Exhibit
10.31


 


Execution Copy


 


DATED
26 September 2005


 


 


CAPITAL BANK plc

(acting as principal and as agent)


 


VANGUARD
RENTAL (UK) LIMITED

(formerly ANC Rental
Corporation (UK) Limited)


 


and


 


 


VANGUARD RENTAL (HOLDINGS) LIMITED

(formerly ANC Rental Corporation (Holdings) Limited)


 


 






 


DEED
OF AMENDMENT AND RESTATEMENT

relating to

Master Lease Agreement

dated 14 February 2002


 






 


 


DWF


Centurion House


129 Deansgate


Manchester


M3
3AA


 

















 


CONTENTS


 


	
  1.

  	
  Definitions and
  Construction

  	
  2

  
	
  2.

  	
  Consent to Amend

  	
  4

  
	
  3.

  	
  Amendment and Restatment of
  MOLA

  	
  4

  
	
  4.

  	
  Schedules

  	
  4

  
	
  5.

  	
  Purchase Agency, Sales
  Agency and Sub-Lease Addendum

  	
  5

  
	
  6.

  	
  Confirmation of Guarantor

  	
  5

  
	
  7.

  	
  Representations and
  Warranties

  	
  6

  
	
  8.

  	
  Expenses

  	
  6

  
	
  9.

  	
  Miscellaneous

  	
  6

  
	
  10.

  	
  Governing Law and
  Jurisdiction

  	
  7

  
	
  SIGNATURE PAGE

  	
  8

  
	
  APPENDIX

  	
  9

  
	
  Amended and Restated MOLA

  	
  9

  



 

















 


THIS
DEED OF AMENDMENT AND RESTATEMENT is dated 26 September 2005
and made between:


 


(1)           CAPITAL BANK plc (Company No. 392902) of
Capital House, Queens Park Road, Handbridge, Chester, CH88 3AN (“CAPITAL”) acting as principal and as agent
on behalf of each of the following companies:


 


CAPITAL BANK LEASING 1 LIMITED


CAPITAL BANK LEASING 2 LIMITED


CAPITAL BANK LEASING 3 LIMITED


CAPITAL BANK LEASING 4 LIMITED


CAPITAL BANK LEASING 5 LIMITED


CAPITAL BANK LEASING 6 LIMITED


CAPITAL BANK LEASING 7 LIMITED


CAPITAL BANK LEASING 8 LIMITED


CAPITAL BANK LEASING 9 LIMITED


CAPITAL BANK LEASING 10 LIMITED


CAPITAL BANK LEASING 11 LIMITED


CAPITAL BANK LEASING 12 LIMITED


ILC ASSET FINANCE LIMITED


ILC HARVEST FINANCE LIMITED


ILC LEASING LIMITED


ILC OPERATING LEASING LIMITED


 


(together with CAPITAL,
the “Companies” and each a “Company”);


 


(2)           VANGUARD RENTAL (UK) LIMITED (Company No.
1089057) whose registered office is at James House, 55 Welford Road, Leicester,
LE2 7AR (the “Lessee”); and


 


(3)           VANGUARD RENTAL (HOLDINGS) LIMITED (Company
No. 915008) whose registered office is at James House, 55 Welford Road,
Leicester, LE2 7AR (the “Guarantor”).


 


BACKGROUND:


 


(A)          This Deed
is supplemental to the master lease agreement dated 14 February 2002 and made
between CAPITAL (acting as principal and as agent on behalf of the Companies)
and the Lessee, whereby CAPITAL and the Companies agreed to lease, and the
Lessee agreed to take on lease, certain vehicles on the terms specified therein.


 


(B)           Pursuant
to the Accession Agreement the ILC Companies became party to the master lease
agreement mentioned in paragraph (A) above.


 


(C)           Pursuant
to the Original Guarantee and the Guarantor’s Deed, the Guarantor has guaranteed,
inter alia, the obligations of
the Lessee under the MOLA.


 


(D)          The parties
to this Deed wish to make
certain amendments to and restate the MOLA upon and subject to the terms of
this Deed.


 


1

















 


IT IS
AGREED as follows:


 


1.                                      DEFINITIONS AND CONSTRUCTION


 


1.1                               Definitions


 


In this Deed:


 


	
  “Accession Agreement”

  	
   

  	
  means the accession and variation agreement dated 3
  December 2004 and made between the ILC Companies, CAPITAL (as principal and
  as agent) and the Lessee;

  
	
   

  	
   

  	
   

  
	
  “Amended and Restated MOLA”

  	
   

  	
  means the MOLA as amended and restated pursuant to
  this Deed and shall, where the context permits, include any Schedule or Lease
  Contract;

  
	
   

  	
   

  	
   

  
	
  “Effective Date”

  	
   

  	
  means the date of this Deed;

  
	
   

  	
   

  	
   

  
	
  “Guarantor’s Deed”

  	
   

  	
  means the guarantor’s deed dated 3 December 2004 and
  made between the ILC Companies, CAPITAL (as principal and as agent) and the
  Lessee in connection with, inter alia, the
  Accession Agreement;

  
	
   

  	
   

  	
   

  
	
  “ILC Companies”

  	
   

  	
  means each of ILC Asset Finance Limited, ILC Harvest
  Finance Limited, ILC Leasing Limited and ILC Operating Leasing Limited;

  
	
   

  	
   

  	
   

  
	
  “Lease Contract”

  	
   

  	
  shall have the meaning given to such term in the
  Amended and Restated MOLA;

  
	
   

  	
   

  	
   

  
	
  “MOLA”

  	
   

  	
  means the master lease agreement dated 14 February
  2002 and made between CAPITAL (acting as principal and as agent) and the
  Lessee as such agreement has been amended and supplemented, from time to
  time;

  
	
   

  	
   

  	
   

  
	
  “Original Guarantee”

  	
   

  	
  means the guarantee dated 29 April 2002 and made by
  the Guarantor in favour of the Companies;

  
	
   

  	
   

  	
   

  
	
  “Purchase Agency”

  	
   

  	
  means the letter dated 14 February 2002 from CAPITAL
  to the Lessee authorising the Lessee to act as agent in connection with the
  purchase of vehicles the subject of Schedules;

  
	
   

  	
   

  	
   

  
	
  “Reservations”

  	
   

  	
  means:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)                                  the principle that equitable remedies may be
  granted or refused at the discretion of a Court and the limitation of
  enforcement by laws relating to insolvency, reorganisation and other

  



 


2

















 


	
   

  	
   

  	
  laws
  generally affecting the rights of creditors;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)                                 the time barring of claims under the
  Limitation Acts, the possibility that an undertaking to assume liability for
  or indemnify a person against non-payment of stamp duty may be void and
  defences of set-off or counterclaim; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)                                  similar principles, rights and defences
  under any relevant laws of England and Wales;

  
	
   

  	
   

  	
   

  
	
  “Sales
  Agency”

  	
   

  	
  means the letter dated 14
  February 2002 from CAPITAL to the Lessee authorising the Lessee to act as
  agent in connection with the sale of vehicles the subject of Schedules;

  
	
   

  	
   

  	
   

  
	
  “Schedule”

  	
   

  	
  shall have the meaning
  given to the term “Leasing Schedule” in the MOLA; and

  
	
   

  	
   

  	
   

  
	
  “Sub-Lease
  Addendum”

  	
   

  	
  means the addendum to the
  MOLA dated 14 February 2002 and made between CAPITAL and the Lessee in
  connection with the sub-lease of vehicles the subject of Schedules.

  



 


1.2                               Construction


 


In
this Deed:


 


(a)                                  any reference to:


 


(i)            an “Act” is a reference to an Act of
Parliament of the United Kingdom of Great Britain and Northern Ireland;


 


(ii)           “this Deed” or any other agreement or instrument
is a reference to this Deed or that other agreement or instrument as amended,
restated, supplemented, waived or novated from time to time;


 


(iii)          a “person” includes any person, firm, company,
corporation, government, state or agency of a state or any association, trust
or partnership (whether or not having separate legal personality) or two or
more of the foregoing;


 


(iv)          “CAPITAL”, any “Company”, the “Lessee” or the “Guarantor”
shall, where the context permits, include such person’s successors and
permitted assigns and any persons deriving title under such person;


 


(v)           a “regulation” includes any regulation, rule,
official directive, request or guideline (whether or not having the force of
law) of any governmental, intergovernmental or supranational body, agency,
department or regulatory, self-regulatory or other authority or organisation;


 


3

















 


(vi)                              a provision of law is a reference to that
provision as amended or re-enacted;


 


(vii)                           a recital, clause or appendix is a reference
to a recital of, a clause of or
appendix to this Deed; and


 


(viii)                        a time of day is a reference to London time;


 


(b)                                 words importing the plural include the
singular (and vice versa);


 


(c)                                  the ejusdem
generis rule shall not apply and accordingly the interpretation of general
words shall not be restricted by being preceded by words including a particular
class of acts, matters or things or by being followed by particular examples;
and


 


(d)                                 section, clause and appendix headings are for
ease of reference only.


 


2.                                      CONSENT TO AMEND


 


The
Lessee, the Guarantor and the Companies hereby consent to the amendments to the
MOLA provided for in this Deed.


 


3.                                      AMENDMENT AND RESTATMENT OF
MOLA


 


With
effect on and from the Effective Date, the MOLA shall be amended and restated
to read as set out in the Appendix to this Deed and the Lessee and the
Companies agree to be bound by the Amended and Restated MOLA.


 


4.                                      SCHEDULES


 


4.1                                 With effect from the Effective Date:


 


(a)                                  each Schedule shall be deemed to have been
entered into pursuant to the Amended and Restated MOLA; and


 


(b)                                 the lease of any vehicle the subject of a
Schedule shall become subject to the terms and conditions of the Amended and
Restated MOLA.


 


4.2                                 Notwithstanding clause 4.1 and in relation to
each Schedule:


 


(a)                                  clause 5.4 of the Amended and Restated MOLA
shall not apply to such Schedule and each such Schedule shall, for the purposes
of the Amended and Restated MOLA, be subject to the assumptions set out in
clause 4(c) of the MOLA. References to clause 5.4 in the Amended and Restated
MOLA shall, in relation to each Schedule, be construed as references to clause
4(c) of the MOLA and the Amended and Restated MOLA shall be interpreted accordingly;


 


(b)                                 references to “Lease Contracts” in the Amended
and Restated MOLA shall be construed as references to such Schedule;


 


(c)                                  references to “Leasing Schedules” in the
Amended and Restated MOLA shall be construed as references to the appendix
attached to such Schedule setting out the details of the vehicles the subject
thereof;


 


4

















 


(d)                                 references to “Relevant Lessor” in the Amended
and Restated MOLA shall be construed as references to the company identified in
such Schedule as lessor;


 


(e)                                  the following terms shall have the following
meanings:


 


(i)            “Advance Payment of Sale Proceeds” shall have
the meaning given to the term “Assumed Net Sales Proceeds” in the Amended and
Restated MOLA;


 


(ii)           “Advance Payment of Sale Proceeds Date” shall
have the meaning given to the term “Assumed Net Sales Proceeds Payment Date” in
the Amended and Restated MOLA;


 


(iii)          “Lessor Risk Base Amount” shall have the
meaning given to the term “Lessor Risk Amount” in the Amended and Restated MOLA
except that the excess mileage charge and the delayed delivery charge set out
in the definition of “Lessor Risk Amount” shall be read, respectively, as £0.12 per mile and £25 per day; and


 


(iv)          “Period of Hire” shall have the meaning given
to the term “Lease Term” in the Amended and Restated MOLA.


 


5.                                      PURCHASE AGENCY, SALES AGENCY AND SUB-LEASE ADDENDUM


 


With
effect from the Effective Date:


 


(a)                                  each of the Purchase Agency, the Sales Agency
and the Sub-Lease Addendum shall be terminated and be of no further effect, and
references to the Sales Agency in the Schedules shall be of no effect;


 


(b)                                 any order for any vehicle made by the Lessee
on behalf of any Company pursuant to the Purchase Agency shall be deemed to
have been made by the Lessee on behalf of such Company pursuant to and be
subject to the terms and conditions of the Amended and Restated MOLA;


 


(c)                                  any sale of any vehicle the subject of a
Schedule to be made by the Lessee (or its delegate) as agent of the relevant
Company shall be sold in accordance with the terms of the Amended and Restated
MOLA and the relevant Schedule; and


 


(d)                                 each vehicle the subject of a Schedule shall
be subject to, inter alia, the restrictions
on sub-leasing contained in the Amended and Restated MOLA.


 


6.                                      CONFIRMATION OF GUARANTOR


 


The
Guarantor confirms that its obligations under each of the Original Guarantee
and the Guarantor’s Deed shall remain in full force and effect in respect of
the Lessee’s obligations under the Amended and Restated MOLA and that the
obligations under this Deed and the Amended and Restated MOLA constitute
obligations included within each of the Original Guarantee and the Guarantor’s
Deed.


 


5

















 


7.                                      REPRESENTATIONS AND
WARRANTIES


 


Each
of the parties to this Deed
represents and warrants to the other parties that:


 


(a)                                  Corporate
power: it has power to
execute, deliver and perform its obligations under this Deed; all necessary
corporate, shareholder and other action has been taken to authorise the
execution, delivery and performance of this Deed and this Deed constitutes its
valid and legally binding obligations enforceable in accordance with its terms
subject to the Reservations;


 


(b)                                 No conflict
with other obligations: its
execution and delivery of, the performance of its obligations under, and compliance
with the provisions of, this Deed by it will not (i) contravene any material
existing applicable law, statute, rule or regulation or any judgment, decree or
permit to which it is subject, (ii) conflict with, or result in any breach of
any of the terms of, or constitute a default under, any material agreement or
other instrument to which it is a party or is subject or by which it or any of
its property is bound, (iii) contravene or conflict with any material provision
of its Memorandum and Articles of Association, or (iv) result in the creation
or imposition of or oblige it to create any security interest over any of its
undertaking, assets, rights or revenues; and


 


(c)                                  Consents
obtained: every consent,
authorisation, licence or approval of, or registration with or declaration to,
governmental or public bodies or authorities or courts required by such party
to authorise, or required by such party in connection with, the execution,
delivery, validity, enforceability or admissibility in evidence of this Deed or
the performance by it of its obligations under this Deed has been obtained or
made and is in full force and effect and there has been no default in the
observance of the conditions or restrictions (if any) imposed in, or in
connection with, any of the same.


 


8.                                      EXPENSES


 


The
Lessee shall pay any reasonable out-of-pocket fees, costs and expenses incurred
by CAPITAL in connection with the negotiation, preparation and execution of
this Deed.


 


9.                                      MISCELLANEOUS


 


9.1                               Continuation of the MOLA


 


Save
as amended and restated by this Deed, the provisions of the MOLA shall continue
in full force and effect and the Amended and Restated MOLA and this Deed shall
be read and construed as one instrument.


 


9.2                               Counterparts


 


This
Deed may be executed in any number of counterparts and by the different parties
on separate counterparts, each of which when so executed and delivered shall be
an original but all counterparts shall together constitute one and the same
instrument.


 


6

















 


9.3                               Contract (Rights of Third
Parties) Act 1999


 


No
person who is not a party to this Deed shall be entitled to enforce any term of
this Deed pursuant to the Contracts (Rights of Third Parties) Act 1999.


 


10.                               GOVERNING LAW AND
JURISDICTION


 


10.1                           This Deed is governed by English law.


 


10.2                           The courts of England have non-exclusive
jurisdiction to settle any dispute arising out of or in connection with this
Deed (including a dispute regarding the existence, validity or termination of
this Deed).


 


This Deed has been entered into on the date stated at the
beginning of this Deed.


 


7

















 


SIGNATURE PAGE


 


	
  EXECUTED as a deed

  for and on behalf of

  CAPITAL BANK plc

  	
  )

  )

  )

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
  by

  	
  )

  	
  Authorised Signatory

  
	
  affixing the Company Seal hereto

  	
   

  	
   

  
	
  In the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a deed

  for and on behalf of

  	
  )

  )

  	
   

  	
   

  
	
  VANGUARD
  RENTAL

  (UK) LIMITED

  	
  )

  )

  	
  Director

  
	
  by

  and by

  	
  )

  )

  	
   

  	
   

  
	
   

  	
   

  	
  Director/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a deed

  for and on behalf of

  	
  )

  )

  	
   

  	
   

  
	
  VANGUARD
  RENTAL

  (HOLDINGS) LIMITED

  	
  )

  )

  	
  Director

  
	
  by

  and by

  	
  )

  )

  	
   

  	
   

  
	
   

  	
   

  	
  Director/Secretary

  



 


8

















 


SIGNATURE PAGE


 


	
  EXECUTED as a deed

  for and on behalf of

  CAPITAL BANK plc

  	
  )

  )

  )

  	
   

  	
   

  
	
  by

  	
  )

  	
  Authorised Signatory

  
	
   

  	
   

  	
   

  
	
  In the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Occupation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a deed

  for and on behalf of

  	
  )

  )

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
  VANGUARD
  RENTAL

  (UK) LIMITED

  	
  )

  )

  	
  Director

  
	
  by

  and by

  	
  )

  )

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Director/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a deed

  for and on behalf of

  	
  )

  )

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
  VANGUARD
  RENTAL

  (HOLDINGS) LIMITED

  	
  )

  )

  	
  Director

  
	
  by

  and by

  	
  )

  )

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Director/Secretary

  



 


8

















 


APPENDIX


 


Amended and Restated MOLA


 


9

















 


CONFORMED COPY


 


DATED 14 February 2002


 


 


as amended and restated on 26 September 2005


 


 


CAPITAL BANK plc

(as principal and as
agent on behalf of the Companies)


 


 


and


 


 


VANGUARD RENTAL (UK) LIMITED

(formerly ANC Rental
Corporation (UK) Limited)


 


 






 


MASTER OPERATING LEASE AGREEMENT


 






 


 


DWF


Centurion House


129 Deansgate


Manchester


M3 3AA


 

















 


CONTENTS


 


	
  1.

  	
  Definitions and
  Construction

  	
  4

  
	
  2.

  	
  Purchase Agency

  	
  13

  
	
  3.

  	
  Agreement to Lease

  	
  18

  
	
  4.

  	
  Lease Term

  	
  18

  
	
  5.

  	
  Rentals and Allowances

  	
  19

  
	
  6.

  	
  The Vehicles

  	
  24

  
	
  7.

  	
  Insurance

  	
  26

  
	
  8.

  	
  Redelivery of the Vehicles

  	
  28

  
	
  9.

  	
  Termination

  	
  28

  
	
  10.

  	
  Disclaimer

  	
  31

  
	
  11.

  	
  Sale of Goods After
  Termination

  	
  32

  
	
  12.

  	
  Lessee’s Warranties

  	
  36

  
	
  13.

  	
  Notices

  	
  37

  
	
  14.

  	
  Miscellaneous

  	
  38

  
	
  15.

  	
  Data Protection

  	
  39

  
	
  16.

  	
  Governing Law and
  Jurisdiction

  	
  39

  
	
  SCHEDULE 1

  	
  41

  
	
   

  	
  The Relevant Lessors

  	
  41

  
	
  SCHEDULE 2

  	
  42

  
	
   

  	
  Form of Lease Contract

  	
  42

  
	
  SIGNATURE PAGE

  	
  46

  



 


2

















 


THIS MASTER OPERATING LEASE AGREEMENT is dated 14 February 2002, has been amended
and restated on 26 September 2005, numbered 0881050 and made between:


 


(1)                                  CAPITAL BANK plc (Company No. 392902) of Capital House, Queens
Park Road, Handbridge, Chester, CH88 3AN (“CAPITAL”)
acting as principal and as agent on behalf of each of the following companies:


 


CAPITAL BANK LEASING 1 LIMITED


CAPITAL BANK LEASING 2 LIMITED


CAPITAL BANK LEASING 3 LIMITED


CAPITAL BANK LEASING 4 LIMITED


CAPITAL BANK LEASING 5 LIMITED


CAPITAL BANK LEASING 6 LIMITED


CAPITAL BANK LEASING 7 LIMITED


CAPITAL BANK LEASING 8 LIMITED


CAPITAL BANK LEASING 9 LIMITED


CAPITAL BANK LEASING 10 LIMITED


CAPITAL BANK LEASING 11 LIMITED


CAPITAL BANK LEASING 12 LIMITED


ILC ASSET FINANCE LIMITED


ILC OPERATING LEASING LIMITED


ILC HARVEST FINANCE LIMITED


ILC LEASING LIMITED


 


(together
with CAPITAL, the “Companies” and
each a “Company”); and


 


(2)           VANGUARD RENTAL (UK) LIMITED (Company No. 1089057) whose registered office
is at James House, 55 Welford Road, Leicester, LE2 7AR (the “Lessee”).


 


BACKGROUND:


 


(A)          The Companies have agreed to appoint the
Lessee as their agent for the purchase of Vehicles on the terms set out in this
Master Agreement


 


(B)           The Companies have agreed to lease to the
Lessee and the Lessee has agreed to take on lease the Vehicles.


 


(C)           This Master Agreement sets out the terms for
the leasing of Vehicles which will be deemed to be incorporated in each Lease
Contract on signature of the relevant Lease Contract by the Lessee and the
Lessor.


 


(D)          The Companies have agreed to appoint the
Lessee, in certain circumstances, as their agent for the sale of Vehicles on
the expiration of the relevant Lease Term on the terms set out in this Master
Agreement.


 

















 


IT IS
AGREED as follows:


 


1.                                      DEFINITIONS
AND CONSTRUCTION


 


1.1                                 In
this Master Agreement:


 


	
  “Accounting Period”

  	
   

  	
  means an accounting period of the Lessor for the
  purpose of Section 12 ICTA;

  
	
   

  	
   

  	
   

  
	
  “Affiliate”

  	
   

  	
  means, in relation to any person, a Subsidiary of
  that person or a Holding Company of that person or any other Subsidiary of
  that Holding Company;

  
	
   

  	
   

  	
   

  
	
  “Assumed Net Sales Proceeds”

  	
   

  	
  means, in relation to any Vehicle, the amount
  specified as such in the applicable Lease Contract;

  
	
   

  	
   

  	
   

  
	
  “Break Costs”

  	
   

  	
  means, in relation to any Vehicle, any Loss (other
  than any loss of profit) suffered, incurred or paid by the Lessor or by HBOS
  Treasury Services plc on behalf of the Lessor in liquidating, cancelling or
  reallocating any loan, deposit or other funding obtained by the Lessor (or by
  HBOS Treasury Services plc on behalf of the Lessor) to fund the Lessor’s
  acquisition of such Vehicle and its investment in such Vehicle from time to
  time;

  
	
   

  	
   

  	
   

  
	
  “Business Day”

  	
   

  	
  means a day upon which banks are open for the
  transaction of normal banking business in the City of London (other than a
  Saturday or Sunday);

  
	
   

  	
   

  	
   

  
	
  “CAA”

  	
   

  	
  means the Capital Allowances Act 2001;

  
	
   

  	
   

  	
   

  
	
  “Capital Allowances”

  	
   

  	
  means any writing down allowance made in respect of
  capital expenditure on plant and machinery under Part 2 CAA and/or any other
  law or regulation for the time being in force providing for the making of
  similar allowances and/or giving of similar reliefs whether introduced in
  addition to or as a replacement for the same;

  
	
   

  	
   

  	
   

  
	
  “Cerberus”

  	
   

  	
  means Cerberus Capital Management, L.P.;

  
	
   

  	
   

  	
   

  
	
  “Change of Control”

  	
   

  	
  means any Lessee Change of Control or any Guarantor
  Change of Control;

  



 


4

















 


	
  “Commencement
  Date”

  	
   

  	
  means, in relation to any
  Lease Term, the first day of such Lease Term as specified in the applicable
  Lease Contract;

  
	
   

  	
   

  	
   

  
	
  “Corporation
  Tax”

  	
   

  	
  means the corporation tax
  on profits at the standard rate (as opposed to the small companies rate) in
  the context of the scheme of taxation applying to UK resident companies
  generally, or tax of a similar nature if enacted in addition to or in
  substitution for corporation tax;

  
	
   

  	
   

  	
   

  
	
  “Due Date”

  	
   

  	
  means, in relation to any
  sum payable under any Lease Contract, the date on which payment of such sum
  falls due for payment in accordance with the terms of such Lease Contract;

  
	
   

  	
   

  	
   

  
	
  “Event of
  Default”

  	
   

  	
  means any event or
  circumstance specified as such in clause 9.1;

  
	
   

  	
   

  	
   

  
	
  “Fund”

  	
   

  	
  means any fund, trust or
  person the assets of which are managed professionally for investment purposes
  on behalf of investors, shareholders, unit holders, partners, members or
  other participants (howsoever organised or described);

  
	
   

  	
   

  	
   

  
	
  “Group of
  Companies”

  	
   

  	
  means any companies which
  are members of the same group of companies (as defined by Section 413 ICTA)
  for the purposes of the provisions for group relief contained in ICTA;

  
	
   

  	
   

  	
   

  
	
  “Guarantor”

  	
   

  	
  means Vanguard Rental
  (Holdings) Limited (company number 915008);

  
	
   

  	
   

  	
   

  
	
  “Guarantor
  Change of Control”

  	
   

  	
  means:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a) Cerberus or any Permitted Holder ceases
  to control directly or indirectly the Guarantor; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b) any person or group of persons acting in
  concert gains direct or indirect control of the Guarantor.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For
  the purposes of paragraph (a) (but only prior to an Initial Public Offering)
  and paragraph (b) of this definition “control” of
  the Guarantor means:

  



 


5

















 


	
   

  	
   

  	
  (i)        the
  power (whether by way of ownership of shares, proxy, contract, agency or
  otherwise) to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1) cast, or control the casting of, more than 50% of the maximum
  number of votes that might
  be cast at a general meeting of the Guarantor; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2) appoint or remove all, or the majority, of the directors or other
  equivalent officers of the Guarantor; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3) give directions with respect to the operating and financial
  policies of the Guarantor with which the directors or other equivalent
  officers of the Guarantor are obliged to comply; and/or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)     the
  holding beneficially of more than 50% of the issued share capital of the
  Guarantor (excluding any part of that issued share capital that carries no
  right to participate beyond a specified amount in a distribution of either
  profits or capital);

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For the purposes of paragraph (a) of this definition
  following an Initial Public Offering, “control” of
  the Guarantor means:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)                           the
  power (whether by way of
  ownership of shares, proxy, contract, agency or otherwise) to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)      cast,
  or control the casting of more than 29.9% of the maximum number of votes that
  might be cast at a general meeting of the Guarantor; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)      appoint or remove all, or the
  majority, of the directors or other equivalent officers of the Guarantor; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)      give
  directions with respect to the operating and

  



 


6

















 


	
   

  	
   

  	
  financial
  policies of the Guarantor with which the directors or other equivalent
  officers of the Guarantor are obliged to comply; and/or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)                        the holding beneficially of more than 29.9% of the issued share
  capital of the Guarantor (excluding any part of that issued share capital
  that carries no right to participate beyond a specified amount in a
  distribution of either profits or capital).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For the purposes of
  paragraphs (a) and (b) of this definition, “acting in
  concert” means a group of persons who, pursuant to an agreement or
  understanding (whether formal or informal), actively co-operate, through the
  acquisition of shares in the Guarantor by any of them, either directly or
  indirectly, to obtain or consolidate control of the Guarantor;

  
	
   

  	
   

  	
   

  
	
  “Holding
  Company”

  	
   

  	
  means, in relation to a
  company or corporation, any other company or corporation in respect of which
  it is a Subsidiary;

  
	
   

  	
   

  	
   

  
	
  “ICTA”

  	
   

  	
  means the Income and
  Corporation Taxes Act 1988;

  
	
   

  	
   

  	
   

  
	
  “Initial
  Public Offering”

  	
   

  	
  means the listing of any
  shares of the Guarantor or any Holding Company of the Guarantor on any
  recognised stock exchange for listed securities whether effected by way of an
  offer for sale, a new issue of shares, an introduction, a placing or
  otherwise;

  
	
   

  	
   

  	
   

  
	
  “Lease
  Contract”

  	
   

  	
  means each signed and dated
  contract for the leasing of Vehicles entered into between the Lessor and the
  Lessee, each such contract to be substantially in the form set out in
  schedule 2;

  
	
   

  	
   

  	
   

  
	
  “Lease
  Term”

  	
   

  	
  means, in relation to any
  Lease Contract, the lease period for the relevant Vehicles as specified in
  such Lease Contract;

  
	
   

  	
   

  	
   

  
	
  “Leasing
  Schedule”

  	
   

  	
  means, in relation to any
  Lease Contract, the appendix attached to such

  



 


7

















 


	
   

  	
   

  	
  Lease Contract detailing
  the Vehicles the subject of such Lease Contract, each such schedule to be
  substantially in the form set out in schedule 2;

  
	
   

  	
   

  	
   

  
	
  “Lessee
  Change of Control”

  	
   

  	
  means the Lessee ceases to
  be a wholly owned subsidiary (as such term is defined in Section 736 of the
  Companies Act 1985) of the Guarantor or the Guarantor ceases to control
  directly or indirectly the Lessee.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For the purposes of this
  definition “control” of the
  Lessee means:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)                  the power (whether by way of ownership of shares, proxy, contract,
  agency or otherwise) to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1) cast, or control the casting of, more
  than 50% of the maximum number of votes that might be cast at a general
  meeting of the Lessee; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2) appoint or remove all, or the majority,
  of the directors or other equivalent officers of the Lessee; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3) give directions with respect to the
  operating and financial policies of the Lessee with which the directors or
  other equivalent officers of the Lessee (as applicable) are obliged to
  comply; and/or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)               the
  holding beneficially of more than 50% of the issued share capital of the
  Lessee (excluding any part of
  that issued share capital that carries no right to participate beyond a
  specified amount in a distribution of either profits or capital);

  
	
   

  	
   

  	
   

  
	
  “Lessee
  Group Company”

  	
   

  	
  means any of the following:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)                  the Guarantor;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)               any
  Subsidiary for the time being of the Guarantor; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)            any
  Subsidiary for the time being
  of the Lessee;

  



 


8

















 


	
  “Lessor”

  	
   

  	
  means, in relation to any
  Lease Contract, the Company in which title to the Vehicles the subject of
  such Lease Contract is vested for the time being;

  
	
   

  	
   

  	
   

  
	
  “Letter of
  Offer”

  	
   

  	
  means the letter of offer
  dated 3 December 2004 relating to operating lease, hire purchase and
  guarantee facilities and made between CAPITAL (on behalf of itself and the
  Companies) and the Lessee;

  
	
   

  	
   

  	
   

  
	
  “Loss”

  	
   

  	
  means any loss, demand,
  liability, obligation, claim, action, proceeding, penalty, fine, damage,
  adverse judgement, order or other sanction, reasonable fee and reasonable
  out-of-pocket cost and expense (including any reasonable fee and reasonable
  out-of-pocket cost and expense of any legal counsel);

  
	
   

  	
   

  	
   

  
	
  “Master HP
  Agreement”

  	
   

  	
  means the master hire
  purchase agreement dated 14 February 2002, numbered 0881051 and made between
  CAPITAL and the Lessee (as amended and restated);

  
	
   

  	
   

  	
   

  
	
  “Material
  Adverse Effect”

  	
   

  	
  means, in respect of
  determining the occurrence (or not) of any of the events or circumstances
  described in paragraphs (l) and (m) of clause 9.1, any effect which, in the
  reasonable opinion of the Companies is likely to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a) adversely affect the ability of the
  Lessee, to comply with its obligations under this Master Agreement or any
  Lease Contract; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b) result in this Master Agreement, or any
  Lease Contract, not being legal, valid and binding on, and enforceable
  substantially in accordance with its terms against any party to that
  document;

  
	
   

  	
   

  	
   

  
	
  “Net Sales
  Proceeds”

  	
   

  	
  means, in relation to any
  Vehicle, the actual sales proceeds of such Vehicle (whether or not it is a
  Total Loss and exclusive of VAT, if applicable) received by the Lessor or by
  the Lessee as agent

  



 


9

















 


	
   

  	
   

  	
  of the Lessor (as
  applicable) less the costs of sale;

  
	
   

  	
   

  	
   

  
	
  “Permitted
  Holder”

  	
   

  	
  means:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a) any Affiliate of
  Cerberus or Stephen A. Feinberg;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b) any Fund managed by
  Cerberus or Stephen A. Feinberg;

  
	
   

  	
   

  	
   

  
	
  “Premises”

  	
   

  	
  means any location from
  which the Lessee carries on its normal business or where any Vehicle is used,
  kept or stored;

  
	
   

  	
   

  	
   

  
	
  “Rentals”

  	
   

  	
  means, in relation to any
  Vehicle or in relation to any Lease Contract (as applicable), the sums
  payable by the Lessee to the Lessor for the leasing of such Vehicle or the
  Vehicles the subject of such Lease Contract (as applicable) as specified in
  the applicable Lease Contract;

  
	
   

  	
   

  	
   

  
	
  “Security
  Interest”

  	
   

  	
  means any mortgage, charge,
  pledge, lien or other security interest securing any obligation of any person
  or any other agreement having similar effect, provided that such security
  interest is not a repairer’s or contractor’s lien arising by operation of
  law;

  
	
   

  	
   

  	
   

  
	
  “Self
  Drive Hire”

  	
   

  	
  means self-drive hire as
  defined in Article 7(3)(b) of the Value Added Tax (Input Tax) Order 1992 (as
  amended by Statutory Instrument 1993/2954);

  
	
   

  	
   

  	
   

  
	
  “Self
  Drive Hire Rental Master Agreement”

  	
   

  	
  means the self drive hire
  rental master agreement dated 27 March 1998 and made between, inter alios, CAPITAL and the Lessee (as
  amended and restated);

  
	
   

  	
   

  	
   

  
	
  “Subsidiary”

  	
   

  	
  means, in respect of any
  company, person or entity, any company, person or entity directly or
  indirectly controlled by such company, person or entity (including any
  Subsidiary acquired after the date of this Master Agreement) and “Subsidiaries” shall mean all or any of them, as
  appropriate;

  



 


10

















 


	
  “Supplier”

  	
   

  	
  means, in relation to any
  Vehicle, the manufacturer and/or the supplier of or the dealer in such
  Vehicle;

  
	
   

  	
   

  	
   

  
	
  “Termination
  Sum”

  	
   

  	
  means, in relation to any
  Vehicle or any Lease Contract (as applicable), the amount calculated in
  accordance with paragraph (b) of clause 9.2;

  
	
   

  	
   

  	
   

  
	
  “Total
  Loss”

  	
   

  	
  means, in relation to any
  Vehicle, the condition of such Vehicle where it is or has been irreparably
  damaged, destroyed or lost from whatever cause or if the cost of repairing
  such Vehicle would exceed the cost of replacing it or if the cost of recovery
  of such Vehicle is uneconomic;

  
	
   

  	
   

  	
   

  
	
  “UK GAAP”

  	
   

  	
  means, in relation to any
  relevant time occuring:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)               prior to 1 January 2005, generally accepted
  accounting principles in the United Kingdom; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)              on or after 1 January 2005, international
  accounting standards as applicable to relevant companies in the United
  Kingdom;

  
	
   

  	
   

  	
   

  
	
  “VAT”

  	
   

  	
  means value added tax as
  provided for in the Value Added Tax Act 1994 and any other tax of a similar
  nature; and

  
	
   

  	
   

  	
   

  
	
  “Vehicles”

  	
   

  	
  means each vehicle listed
  in a Leasing Schedule or any other part of a Lease Contract (and where the
  context so permits, the individual items of property referred to therein) and
  shall include all replacements, renewals and component parts thereof and all
  additions and accessories thereto.

  



 


1.2                               Construction


 


In
this Master Agreement and any applicable Lease Contract:


 


(a)                                  any reference to:


 


(i)                                     “assets” includes present and future
properties, revenues and rights of every description;


 


(ii)                                  an “Act” is a reference to an Act of
Parliament of the United Kingdom of Great Britain and Northern Ireland;


 


11

















 


(iii)          “£” and “Sterling” means the lawful currency of the United Kingdom of
Great Britain and Northern Ireland;


 


(iv)          this Master Agreement, any Lease Contract or
any other agreement or instrument is a reference to this Master Agreement, that
Lease Contract or that other agreement or instrument as amended, varied,
modified, supplemented, replaced or novated;


 


(v)           “indebtedness” includes any obligation
(whether incurred as principal or as surety) for the payment or repayment of
money, whether present or future, actual or contingent;


 


(vi)          a “person” includes any person, firm, company,
corporation, government, state or agency of a state or any association, trust
or partnership (whether or not having separate legal personality) or two or
more of the foregoing;


 


(vii)         “CAPITAL”, any “Company”, the “Lessor” or the “Lessee”
shall, where the context permits, include such person’s successors and
permitted assigns and any persons deriving title under such person;


 


(viii)        a “regulation” includes any regulation, rule,
official directive, request or guideline (whether or not having the force of
law) of any governmental, intergovernmental or supranational body, agency,
department or regulatory, self-regulatory or other authority or organisation;


 


(ix)           a provision of law is a reference to that
provision as amended or re-enacted (except as provided for in clause 5);


 


(x)            a time of day is a reference to London time;


 


(xi)           an Event of Default which is “continuing” is a
reference to an Event of Default which has not been waived; and


 


(xii)          a clause or Schedule is to a clause of or
Schedule to this Master Agreement or applicable Lease Contract (as the case may
be);


 


(b)                                 words importing the plural include the
singular (and vice versa);


 


(c)                                  the ejusdem
generis rule shall not apply and accordingly the interpretation of
general words shall not be restricted by being preceded by words including a
particular class of acts, matters or things or by being followed by particular
examples; and


 


(d)                                 section, clause and schedule headings are for
ease of reference only.


 


12

















 


2.                                      PURCHASE AGENCY


 


2.1                                 Definitions


 


For the purposes of this
clause 2:


 


	
  “Interest Rate”

  	
   

  	
  means, at any relevant
  time, the percentage rate per annum equal to the aggregate of 3% and the Bank
  of Scotland Base Rate at such time;

  
	
   

  	
   

  	
   

  
	
  “Lessee’s
  Bank Account”

  	
   

  	
  means the account in the
  name of the Lessee as specified in Part 1 of the relevant Lease Contract or
  such other account in the United Kingdom as may be notified by the Lessee to
  the Lessor in writing;

  
	
   

  	
   

  	
   

  
	
  “Limit”

  	
   

  	
  means the total aggregate
  cost of the Relevant Vehicles which the Lessee may acquire as agent of the
  Companies as set out in the Letter of Offer or as may be otherwise agreed in
  writing by CAPITAL and the Lessee;

  
	
   

  	
   

  	
   

  
	
  “Price”

  	
   

  	
  means, in relation to any
  Relevant Vehicle, the purchase price of such Relevant Vehicle paid or to be
  paid by the Lessee or the Relevant Lessor to the Supplier (inclusive of VAT
  if any);

  
	
   

  	
   

  	
   

  
	
  “Reimbursement Invoice”

  	
   

  	
  means, in relation to any
  Relevant Vehicle, an invoice from the Lessee, addressed to CAPITAL as agent
  of the Relevant Lessor in respect of the Price of such Relevant Vehicle;

  
	
   

  	
   

  	
   

  
	
  “Relevant Lessor”

  	
   

  	
  means, in relation to any
  Lease Contract, the Company in respect of which the two or three digit number
  specified opposite its name in schedule 1 corresponds with the first two or
  three digits of the reference number allocated to such Lease Contract; and

  
	
   

  	
   

  	
   

  
	
  “Relevant
  Vehicles”

  	
   

  	
  means each vehicle acquired
  or to be acquired by the Lessee as agent under the terms of this clause 2.

  



 


2.2                                 Authority of Agent


 


(a)                                  The Companies appoint the Lessee as their
agent (and the Lessee accepts such appointment) for the purposes of acquiring
Relevant Vehicles on and subject to the terms of this clause 2.


 


13

















 


(b)                                 All orders for Relevant Vehicles will be
placed by the Lessee with the Supplier as agent on behalf of the Relevant
Lessor. Any negotiations that shall take place between the Lessee or any third
party acting on the Lessee’s behalf and the Supplier in relation to the supply
of Relevant Vehicles shall be undertaken by the Lessee as agent on behalf of
the Relevant Lessor for the express purpose of the Relevant Lessor becoming the
owner of the Relevant Vehicles.


 


(c)                                  The Lessee shall not:


 


(i)            enter into any agreement with a Supplier for
the acquisition of Relevant Vehicles as agent for the Companies prior to the
date of this Master Agreement;


 


(ii)           place any firm order or purport to bind the
Companies to any contract for the acquisition of any Relevant Vehicle if, as a
consequence thereof, on entering into a Lease Contract in respect of any such
Relevant Vehicle the aggregate of the amount then outstanding to the Companies
under all Lease Contracts from all Lessee Group Companies would exceed the
Limit;


 


(iii)          exercise its authority under this Master
Agreement to purchase any Relevant Vehicle from itself or from any Lessee Group
Company unless such Lessee Group Company’s business is the manufacture or
supply of the Relevant Vehicle in question and provided that the Price of any
such Relevant Vehicle shall not be greater than the price at which such Lessee
Group Company sells such Relevant Vehicles in its ordinary course of business;


 


(iv)          purchase any Relevant Vehicle under this
Master Agreement which has been used for the purpose of a trade carried out by
the Lessee or any Lessee Group Company; or


 


(v)           exercise its authority under this Master
Agreement to purchase any Relevant Vehicle for so long as any Event of Default
has occurred and is continuing.


 


(d)                                 The Lessee shall ensure that all Relevant
Vehicles shall be purchased under this Master Agreement with clear title, free
from any Security Interest and with the benefit of all Supplier warranties and
guarantees.


 


(e)                                  The Lessee shall not claim or be entitled to
any remuneration or reimbursement for acting as agent under this Master
Agreement except as expressly set out in this clause 2.


 


2.3                                 Passing
of Title and Risk


 


(a)                                  The Lessee shall (i) procure that good title
to each Relevant Vehicle shall, on payment of the Price, pass directly from the
Supplier to the Relevant Lessor free from any Security Interest and (ii) at the
request of the Relevant Lessor, procure the execution of any and all
documentation and the performance of all further acts and things that


 


14

















 


may
be necessary or desirable to ensure title to each Relevant Vehicle is vested in
the Relevant Lessor as principal.


 


(b)                                 Risk of loss of or damage to each Relevant
Vehicle (other than those Relevant Vehicles in the possession of the Lessor)
shall at all times remain with the Lessee following the passing of risk from
the Supplier. As from the date of delivery of any Relevant Vehicle to the
Lessee such Relevant Vehicle shall be regarded as having been on
lease to the Lessee notwithstanding that a Lease Contract may not have been
signed by the Lessee in respect of that Relevant Vehicle. All the provisions of
the Lease Contract with regard to repair, maintenance and insurance of the
Relevant Vehicles and the rights and obligations of the parties on the
occurrence of loss or of damage occurring to the Relevant Vehicles shall apply
in respect of each such Relevant Vehicle with effect from the date of delivery.


 


2.4                                 Delivery


 


(a)                                  The Lessee shall accept delivery from the
Supplier of all Relevant Vehicles purchased under this Master Agreement on
behalf of the Relevant Lessor. Such delivery shall be deemed to constitute
delivery of each such Relevant Vehicle by the Relevant Lessor to the Lessee for
the purposes of the relevant Lease Contract.


 


(b)                                 The Lessee shall be deemed to have accepted
the Relevant Vehicles as being in good condition and satisfactory for all
purposes unless it shall notify the Relevant Lessor to the contrary within 7
days of delivery and in any event prior to signing and dating a Lease Contract in
respect of the relevant Relevant Vehicle.


 


(c)                                  If the Lessee does not accept delivery of a
Relevant Vehicle or if any Relevant Vehicle is not satisfactory for the Lessee’s
purpose:


 


(i)            the Lessee shall not be bound to enter into a Lease
Contract in respect of such Relevant Vehicle as required by paragraph (a) of
clause 2.6;


 


(ii)           the Lessee shall be deemed, as between the
Lessee and the Relevant Lessor, to have purchased such Relevant Vehicle as
principal;


 


(iii)          the Relevant Lessor shall be released from any
obligation to reimburse to the Lessee the Price, and if the Relevant Lessor has
already paid to a Supplier or to the Lessee the Price, the Lessee shall
forthwith repay such amount to the Relevant Lessor together with interest at
the Interest Rate from the date of payment of such amount by the Relevant
Lessor to the date on which it is repaid to the Relevant Lessor;


 


(iv)          the Relevant Lessor shall assign to the
Lessee, at the Lessee’s cost, all the Relevant Lessor’s rights, title and
interest in and to such Relevant Vehicle (if any) and its rights against the
Supplier free from any Security Interest created by the Relevant Lessor;


 


15

















 


(v)                                 the Lessee shall indemnify the Relevant Lessor
and keep the Relevant Lessor indemnified against all and any Loss suffered, incurred
or paid by the Relevant Lessor by reason of the Lessee having acquired such
Relevant Vehicle as agent of the Relevant Lessor save and to the extent that,
in either case, any such Loss (or part thereof) is caused or contributed to by
the Relevant Lessor’s own negligence or wilful default; and


 


(vi)                              the Relevant Lessor shall repay to the Lessee
any Rental actually paid by the Lessee to the Relevant Lessor in respect of any
such Relevant Vehicle together with interest at the Interest Rate from the date
of receipt of such Rental by the Relevant Lessor to the date on which it is
repaid to the Lessee.


 


(d)                                 The Lessee shall, whether or not it accepts
any Relevant Vehicle as satisfactory, pay all the costs of preparation,
signage, livery and delivery of such Relevant Vehicle and shall indemnify the
Relevant Lessor and keep the Relevant Lessor indemnified against any Loss
suffered, incurred or paid by the Relevant Lessor in connection with such
costs.


 


2.5                                 Payment of the Price and
Reimbursement


 


(a)                                  In relation to any Relevant Vehicle, the
Lessee shall, or shall procure that a third party acting as sub-agent for the
Lessee shall, on behalf of the Relevant Lessor, pay the Price to the Supplier
not later than the date on which such Price is due to the Supplier in
accordance with the Supplier’s terms of business.


 


(b)                                 Following payment by or on behalf of the
Lessee in accordance with paragraph (a) of this clause 2.5, the Lessee shall at
intervals to be agreed from time to time with the Companies but no later than
the end of the Lessee’s VAT period, provide to CAPITAL as agent of the Relevant
Lessor the Reimbursement Invoice in respect of all Relevant Vehicles acquired
by the Lessee as agent of such Relevant Lessor following the date of the
previous Reimbursement Invoice (and, within 7 days of any request by CAPITAL, a
copy of any Supplier’s invoice addressed to the Lessee with respect to a
Relevant Vehicle the subject of such Reimbursement Invoice). CAPITAL on behalf
of the Relevant Lessor shall pay to the Lessee the amount shown in the Reimbursement
Invoice in cleared funds not later than the third Business Day following the
date on which such invoice is received. All payments under this Master
Agreement shall be made to the Lessee’s Bank Account.


 


(c)                                  The Lessee may, with the prior written consent
of the Companies, in lieu of submitting a Reimbursement Invoice in accordance
with paragraph (b) of this clause 2.5, arrange for the Supplier to submit the Supplier’s
invoice for Relevant Vehicles direct to CAPITAL on behalf of the Relevant
Lessor. CAPITAL on behalf of the Relevant Lessor is hereby authorised by the
Lessee to pay the amount of such Supplier’s invoice direct to the Supplier in
accordance with the terms of payment agreed between the Lessee and the
Supplier.


 


16

















 


(d)                                 The Lessee may, with the prior written consent
of the Companies, arrange for a third party to act as its sub-agent for the
purposes of acquiring Relevant Vehicles under the terms of this clause 2. In
that event the Lessee may arrange for such third party to submit the Reimbursement
Invoice to CAPITAL on behalf of the Relevant Lessor and the terms of paragraph
(b) of this clause 2.5 shall apply to the payment of such Reimbursement Invoice
as if references in paragraph (b) of this clause 2.5 to “the Lessee” were
references to such third party. The Lessee shall indemnify the Relevant Lessors
and keep the Relevant Lessors indemnified against any Loss suffered, incurred
or paid by any of them by reason of the acts or omission of such third party.


 


(e)                                  The Relevant Lessor shall be entitled to
deduct from any payment to the Lessee under paragraph (b) of this clause 2.5 or
third party under paragraph (d) of this clause 2.5 any sum then due from the
Lessee (or third party if applicable) to the Relevant Lessor under the Lease Contract
or any other Lease Contract between the Relevant Lessor and the Lessee.


 


2.6                                 Entering into of Lease Contracts


 


(a)                                  The Lessee shall, on or before the date of
payment by the Relevant Lessor of the Price in accordance with clause 2.5 enter
into a Lease Contract with the Relevant Lessor in respect of the Relevant
Vehicles.


 


(b)                                 If for any reason (including failure to agree
on any term of the Lease Contract or the Rental) the Lessee does not enter into
a Lease Contract in respect of any Relevant Vehicle:


 


(i)                                     the Lessee shall be deemed, as between the
Lessee and the Relevant Lessor, to have purchased such Relevant Vehicle as
principal;


 


(ii)           the Relevant Lessor shall be released from any
obligation to reimburse to the Lessee, the Supplier or any third party the
Price, and if the Relevant Lessor has already paid to any such person the
Price, the Lessee shall forthwith repay such amount to the Relevant Lessor
together with interest at the Interest Rate from the date of payment of such
amount to the date on which it is repaid to the Relevant Lessor;


 


(iii)          the Relevant Lessor shall assign to the
Lessee, at the Lessee’s cost, all the Relevant Lessor’s rights, title and
interest in and to any such Relevant Vehicle (if any) and its rights against
the Supplier;


 


(iv)          the Lessee shall indemnify the Relevant Lessor
and keep the Relevant Lessor indemnified against all and any Loss suffered,
incurred or paid by the Relevant Lessor by reason of the Lessee having acquired
such Relevant Vehicle as agent of the Relevant Lessor save and to the extent
that such Loss (or any part thereof) is caused or contributed to the Lessor’s
own negligence or wilful default; and


 


17

















 


(v)                                 the Relevant Lessor shall repay to the Lessee
any Rental actually paid by the Lessee to the Relevant Lessor in respect of any
such Relevant Vehicle together with interest at the Interest Rate from the date
of receipt of such Rental by the Relevant Lessor to the date on which it is
repaid to the Lessee.


 


2.7                                 Warranties


 


The
Lessee gives the following warranties to the Relevant Lessor at the time of
each Reimbursement Invoice and in relation to the Relevant Vehicles which are
the subject of that Reimbursement Invoice:


 


(a)                                  that the price at which the Lessee shall
obtain each Relevant Vehicle and which shall be shown on the Reimbursement
Invoice shall be net of all Supplier discounts reasonably obtainable by the
Lessee;


 


(b)                                 that the information shown in the Supplier’s invoice
and the Reimbursement Invoice is in all material respects true and correct;


 


(c)                                  that on the payment by the Relevant Lessor to
the Lessee of each Reimbursement Invoice the Lessor shall obtain good title in
respect of each Relevant Vehicle shown thereon free from any Security Interest;
and


 


(d)                                 that the Lessee is registered for VAT in the
United Kingdom.


 


3.                                      AGREEMENT TO LEASE


 


3.1                                 Agreement to Lease


 


Each
Lessor shall lease and the Lessee shall take on lease the Vehicles upon the
terms and conditions of the applicable Lease Contract which shall incorporate
the terms of this Master Agreement provided that, in the event of any conflict
between any provision contained in this Master Agreement and any provision
contained in any Lease Contract, the latter shall prevail. Each Lease Contract
shall come into effect on execution and delivery of the applicable Leasing
Schedule by each of the Lessee and the Lessor.


 


3.2                                 Quiet Enjoyment


 


Subject
to the compliance by the Lessee with all of its obligations under this Master
Agreement, the Lease Contracts and the Letter of Offer, the Lessor warrants to
the Lessee that the Lessee may peaceably hold and retain the Vehicles
throughout the Lease Term without interference from the Lessor or any persons
claiming title through the Lessor.


 


4.                                      LEASE TERM


 


Each
Lessor shall lease and the Lessee shall take on lease each Vehicle, subject to
the terms of this Master Agreement and the relevant Lease Contract, for the
Lease Term as specified in such Lease Contract.


 


18

















 


5.                                      RENTALS AND ALLOWANCES


 


5.1                                 The Lessee shall pay to the Lessor in cleared
funds on or before the Due Date the Rentals and the Assumed Net Sales Proceeds
(together with, subject to the production of a valid VAT invoice, any VAT
applicable thereto) to such account as the Lessor may specify without prior
demand and without any right of set-off or to make any deductions or withholding
in respect of any period during which the Vehicles are unserviceable. If the
Due Date is not a Business Day, the Lessee shall pay the Rentals to the Lessor
on the next Business Day.


 


5.2                                 Payments sent by post shall be at the Lessee’s
risk. Subject to clause 9.1(a) payment of all sums due from the Lessee under
this Master Agreement on their respective Due Dates shall be of the essence of
the Master Agreement and each Lease Contract.


 


5.3                                 Any sum due under this Master Agreement or
under any Lease Contract which is not received by the Lessor on its Due Date
shall bear interest from the Due Date at the rate of 3% per annum over Bank of
Scotland Base Rate calculated on a daily basis and compounded quarterly as well
after as before judgement, until payment thereof and the Lessor may appropriate
any sum received from the Lessee under this Master Agreement, any Lease
Contract or any other agreement subsisting between the Lessee and the Lessor to
any part of the debt notwithstanding any contrary appropriation by the Lessee.


 


5.4                                 The Rentals and the Assumed Net Sales Proceeds
have been calculated on the assumption that:


 


(a)           subject to Section 220 CAA, in respect of the whole of the expenditure incurred
by the Lessor in the acquisition of the Vehicles, the Lessor will be entitled
to Capital Allowances pursuant to Section 55 CAA at the rate specified in the
applicable Lease Contract commencing in the Accounting Period in which the
applicable Lease Contract is made and such writing down allowances will not be
delayed, disputed or withdrawn in whole or in part;


 


(b)           the Lessor will not be required to bring into account in any Accounting Period
any disposal value in relation to the Vehicles pursuant to Section 61 CAA, in
excess of any sales proceeds, insurance proceeds or other compensation actually
received by the Lessor in respect thereof in such Accounting Period;


 


(c)           the rate of Corporation Tax at all relevant times is the rate specified
in the Lease Contract;


 


(d)           the due dates for payment of Corporation Tax by the Lessor in respect of
each Accounting Period shall be as prescribed in Statutory Instrument 1998 No.
3175 entitled Corporation Tax (Instalment Payments) Regulations 1998;


 


(e)           all Rentals are accrued for tax purposes in the same manner as they are
accrued for accounting purposes;


 


19

















 


(f)            the
Assumed Net Sales Proceeds are accounted for and taxed as disposal proceeds for
the purposes of Section 61 CAA in the Accounting Period in which they are due
to be received;


 


(g)           the
Lessor Sales Proceeds Retention (as defined in clause 11) is accounted for and
taxable in the Accounting Period in which it is received;


 


(h)           relief
for interest in respect of the funds borrowed by the Lessor for the purpose of
making payment of any part of the acquisition price of the Vehicles or for the
purpose of replacing any funds so borrowed will be allowable for tax purposes
in the Accounting Period in which the interest is accrued;


 


(i)            no
later than each due date for payment of Corporation Tax by the Lessor in respect of any Accounting Period,
the Lessor shall have received and retained a proportion of the benefit of the
aforesaid allowances or reliefs corresponding to the amount of the Lessor’s
Corporation Tax due and payable on that date as a proportion of the Lessor’s
total Corporation Tax liability for that Accounting Period, such benefit to be
received as a reduction of the Corporation Tax otherwise payable or by reason
of a payment for group relief by a member of the Group of Companies of which
the Lessor is a member to the Lessor in respect of the aforesaid allowances or
reliefs where there has been a surrender of losses to that member;


 


(j)            the
Lessor’s Accounting Period shall not change;


 


(k)           any
payment in respect of group relief not exceeding the amount of the tax losses
surrendered by way of group relief will not be taxable in accordance with
Section 402(6) ICTA;


 


(l)            no
change will be made in UK GAAP as it affects the Lessor or any other member of
the group of companies of which the Lessor is a member; and


 


(m)          no
change will be made in tax law and/or the published practice of any relevant
Revenue authority as it affects the Lessor and/or other members of the Group of
Companies of which the Lessor is a member.


 


5.5                                 If
any of the assumptions specified in clause 5.4 prove to be incorrect and by
reason thereof the net after tax rate of return to the Lessor on its investment
in the Vehicles shall be less or more than it would have been had the relevant
assumptions proved to be correct, the Lessor shall (even if the leasing of all
or any of the Vehicles has been determined and provided that the sums
calculated would result in an aggregate adjustment of more than £100.00 in the Rentals
paid and/or payable during the Lease Term in respect of the applicable Lease
Contract):


 


(a)           increase
or decrease the remaining Rentals; or


 


(b)           if
no further Rentals remain to be paid, calculate the amount of the additional
Rental or rebate of Rental that is required to be paid


 


20

















 


to
ensure that, after allowance for the costs of carrying out such calculation,
the net after tax rate of return to the Lessor on the Lessor’s investment in
the Vehicles shall remain the same as it would have been had the relevant
assumptions proved to be correct and shall notify such adjustment or additional
Rental or rebate of Rental to the Lessee together with any revised assumptions
which the Lessor has made in calculating such adjustment in lieu of those
assumptions which have proved to be incorrect. Following any such adjustment
this paragraph shall have effect as if paragraphs (a) to (m) inclusive of
clause 5.4 contained the revised assumptions notified to the Lessee in lieu of
those assumptions which have proved to be incorrect. Within 14 days after
receipt of notification of the amount thereof the relevant party shall pay to
the other party any additional Rental or rebate of Rental.


 


Notwithstanding
the foregoing and save to the extent that any assumption has become incorrect
as a result of a change in law or practice or in UK GAAP, no such assumption as
set out in clause 5.4 shall be incorrect if the Lessor’s failure to obtain
Capital Allowances or the benefit of such allowances is solely due to:


 


(i)            the Lessor or any member of the Lessor Group
of Companies failing to make all appropriate returns or make claims within the
time limits required by law (otherwise than by reason of any failure by the
Lessee to provide the Lessor with information or other assistance reasonably
required in writing by the Lessor for the purposes of making such claim); or


 


(ii)           the Lessor or any member of the Lessor Group of Companies having
insufficient profits to set off or otherwise utilise any tax losses created by
the claiming of the aforesaid Capital Allowances (provided that this limitation
shall not apply to the extent that the insufficiency of profits would not have
arisen but for any negligence or wilful default on behalf of the Lessee or the
Lessee not complying with any of its material obligations under this Master
Agreement or any Lease Contract); or


 


(iii)          the Lessor voluntarily ceasing to carry on a leasing trade or the Lessor
ceases to treat the transactions contemplated by this Master Agreement or any
Lease Contract as part of such leasing trade; or


 


(iv)          the Lessor failing to prepare its statutory accounts on the basis that
the transactions contemplated by this Master Agreement shall constitute an
operating lease or if the external auditors of the Lessor for the time being
shall qualify their audit report in respect of such treatment by the Lessor; or


 


(v)           the Lessor voluntarily ceasing to be within the charge to Corporation
Tax or voluntarily ceasing to be resident for tax purposes in the United
Kingdom; or


 


(vi)          the Lessor is not, or is treated as not being a member of a Group of
Companies; or


 


21

















 


(vii)         the Lessor or any member of the Lessor’s Group of Companies submits its
Corporation Tax computations on a basis which is inconsistent with the
assumption set out in clause 5.4; or


 


(viii)        the Lessor voluntarily changing its accounting period or the Lessor
voluntarily changing the method upon which it prepares its accounts insofar as
they relate to the transactions contemplated by this Master Agreement or any
Lease Contract.


 


5.6                                 For the avoidance of doubt, it is agreed that
if the Inland Revenue shall dispute the availability of any Capital Allowances
then the Lessor shall be entitled to pay the additional Corporation Tax claimed
by the Inland Revenue while still contesting the position adopted by the Inland
Revenue and if it is subsequently agreed or determined that such allowance is
available to the Lessor with the result that such Corporation Tax is repaid the
Lessor shall nevertheless be entitled to adjust the Rentals or the Lessee shall
pay the additional Rental or receive a rebate of Rental in accordance with
clause 5.5, for the period during which the Inland Revenue retained such
Corporation Tax and any repayment supplement received by the Lessee being taken
into account in calculating the net after tax rate of return to the Lessor.
Other than any agreement between the Lessors and the Lessee to the contrary,
nothing in this clause 5.6 shall oblige the Lessor to appeal against any assessment
to Corporation Tax made by the
Inland Revenue.


 


5.7                                 If, in respect of Vehicles which do not fall
within Section 74 CAA, upon the termination of this Agreement at any time the
Lessor has not received for the purposes of Section 61 CAA by the end of the
Accounting Period in which such termination occurs, an amount of disposal value
in respect of the Vehicles which is not less than the tax written-down value of
the Vehicles at the beginning of such Accounting Period, the Lessee shall pay
to the Lessor by way of additional Rental such amount as the Lessor shall
notify in writing to the Lessee to be necessary to ensure that, after allowance
for the costs of carrying out such calculation, the net after tax rate of
return to the Lessor on the Lessor’s investment in the Vehicles shall remain
the same as it would have been had the Lessor received in its Accounting Period
in which such termination occurred a disposal value equal to the tax written
down value of the Vehicles at the beginning of such Accounting Period. For the
purposes of this paragraph the tax written-down value of the Vehicles at any
date shall be the original cost thereof to the Lessor (exclusive of any
recoverable VAT) less the amount of all writing-down allowances to which the
Lessor is entitled (on the assumption referred to in clause 5.8) in respect of
the Vehicles for each Accounting Period of the Lessor which has ended before
the date as at which the tax written-down value is being calculated.


 


5.8                                 All Rental, the Assumed Net Sales Proceeds and
rebate of Rental calculated in accordance with clauses 5.5 and 5.7 shall be
made on the assumption (whether or not it shall in fact be the case) that at
all material times the Lessor had no qualifying expenditure and received no
disposal value for the purposes of Section 61 CAA in relation to any plant or
machinery other than the Vehicles. Nothing in this clause 5.8 shall have the
effect of deeming a balancing allowance to arise at any time.


 


5.9                                 At the request of the Lessee, the Lessor shall
have the amount of any adjustment or additional Rental or rebate of Rental in
accordance with


 


22

















 


clauses
5.5 and 5.7 above certified by the Lessor’s auditors and any such certificate
by the Lessor’s auditors shall (save in respect of manifest error) be final and
binding on both parties. If the determination by the Lessor’s auditors in
accordance with this clause 5.9 demonstrates that any calculation carried out
by the Lessor in accordance with clauses 5.5 and/or 5.7 above is in error by
more than 5% of any such adjustment then the costs of such auditor shall be
borne by the Lessor, otherwise, such costs will be borne by the Lessee.


 


5.10                           As soon as is reasonably practicable following
a written request from CAPITAL or any Lessor, the Lessee shall, in sufficient
time to allow the relevant Lessor to meet any relevant statutory obligation,
provide copies of and/or reasonable access to such information and/or the
relevant parts of any books, records or documents as may properly be required
to be furnished by any Lessor to, or in response to any request from, the Board
of the Inland Revenue, any Inspector of Taxes, or H.M. Customs & Excise,
and to enable any Lessor to be satisfied that it is complying with its
obligations under the legislation relating to Corporation Tax self-assessment
but only insofar as the same relate to the transactions contemplated by this
Master Agreement


 


5.11                           All payments of Rental, the Assumed Net Sales
Proceeds and other sums payable by the Lessee to the Lessor under this Master
Agreement or any Lease Contract shall be paid in full without any deductions or
withholdings whatsoever (unless required by law) and free of any rights of set
off or counterclaim together with VAT where appropriate. If any deduction or withholding
is required by law in respect of any such Rental, the Assumed Net Sales
Proceeds or any other sum payable by the Lessee to the Lessor under this Master
Agreement, the Lessee shall increase such Rental, the Assumed Net Sales Proceeds
or other sum so that the net amount received by the Lessor after the deduction
or withholding shall be equal to the amount which the Lessor would have been
entitled to receive in the absence of any requirement to make such deduction or
withholding. The Lessee shall provide to the Lessor such evidence as the Lessor
may reasonably require of any such deduction or withholding and if the Lessor
subsequently receives and retains the benefit of any tax credit in respect
thereof it will, as soon as reasonably practical, pay to the Lessee the net
after tax value thereof in the hands of the Lessor provided that nothing in
this clause 5.11 shall require the Lessor to order its tax affairs in any
particular manner or to claim any such credit in priority to any other or to
require the Lessor to disclose to the Lessee any information regarding the
Lessor’s liability to taxation (if any) or the calculation thereof. If the
Lessor is subsequently unable to retain the benefit of any such tax credit the
Lessee shall repay any such amount to the Lessor on demand.


 


5.12                           Subject to paragraphs (i) to (viii) inclusive
of clause 5.5 if any payment made by the Lessor under this Master Agreement or
any Lease Contract is initially made on the basis that it is a deductible
trading expense or other deduction or offset for tax purposes and it is
subsequently determined that it is not, then such appropriate adjustment and
payment will be made to restore the net after tax rate of return of the
relevant Lessor.


 


5.13                           If the VAT percentage rate changes between the
Due Date for payment of the Assumed Net Sales Proceeds and the actual date of
disposal of the Vehicle, the amount payable will be adjusted accordingly to
reflect the increase or decrease in VAT.


 


23

















 


5.14         The Lessee agrees that its right to receive 14
days’ prior notice from CAPITAL of any amendment to be made to a variable direct debit mandate
within the terms of Chapter 8 of the Originators’ Guide and Rules to the Direct
Debiting Scheme (3rd Edition) dated July 1986 is waived and the Lessee agrees
to accept three Business Days’ notice from CAPITAL of any such variation within
the terms of the said Direct Debiting Scheme or any amendment thereto.


 


6.             THE VEHICLES


 


6.1           The Vehicles will at all times remain the
property of the Lessor and at no time will title to the Vehicles pass to the
Lessee or to a Lessee Group Company, other than as provided for in paragraph
(b) of clause 7.7.


 


6.2           No material alteration in or any material
addition to the Vehicles shall be made by the Lessee without the Lessee having
obtained the prior written consent of the Lessor, such consent not to be
unreasonably withheld by the Lessor. In the event that any such alteration or
addition to the Vehicles is made without the consent of the Lessor, title to
any additions or replacements so made to the Vehicles shall immediately vest in
the Lessor on the expiration or termination of the Lease Term. The Lessor may
require the Lessee to restore the Vehicles to the condition they were in
immediately before such alterations or additions were made.


 


6.3           The Lessee shall, subject to clauses 6.13 and
6.14, keep the Vehicles in its own control and in good order, repair and in
working condition. The Lessee shall upon reasonable advance written notice from
the Lessor (except in the case of an Event of Default) at all reasonable times
during normal business hours allow the Lessor, its servants or agents at the
request of the Lessor to inspect the Vehicles.


 


6.4           The Lessee:


 


(a)                                  shall not knowingly permit the removal of the
Vehicles out of the United Kingdom for any period in excess of 28 consecutive
days without the Lessor’s prior written consent having been obtained and then
only in accordance with the conditions of such consent and shall, in any event,
ensure that whilst any Vehicle is outside the United Kingdom whether pursuant
to this paragraph (a) or otherwise it shall have the benefit of comprehensive
vehicle recovery insurance; and


 


(b)                                 shall if appropriate pay promptly or cause to
be so paid from time to time all licence fees, duties and registration fees
payable in respect of the use and/or operation of the Vehicles.


 


6.5           If any maintenance arrangements are entered
into between the Lessee and any contractor whether expressly at the request of
the Lessor or otherwise the Lessee shall pay to the said contractor any and
every sum payable thereunder and shall observe and perform all the conditions
and stipulations therein contained but nothing in this clause 6.5 shall absolve
the Lessee from any of its responsibilities or obligations in relation to the
Vehicles. No failure on the part of any contractor to perform any of its
responsibilities under such maintenance arrangement shall be a defence to a
claim by the Lessor for Rentals or any other monies payable by the Lessee under
the terms of any Lease Schedule or give the Lessee any claim whatsoever against
the Lessor.


 


24

















 


6.6           The Lessee shall keep the Vehicles free from
any legal process or Security Interest whatsoever and shall not allow the
Vehicles to be seized in any distress for rent or otherwise or any execution.


 


6.7           The Lessee shall not (other than in accordance
with clause 11) sell or attempt to sell or dispose of the Vehicles nor allow
any repairer or any contractor to obtain a Security Interest on the Vehicles
(other than a repairer’s or contractor’s lien arising by operation of law which
the Lessee shall ensure is promptly discharged) nor shall the Lessee knowingly
permit any removal or alteration of any name, identification mark, Vehicle
identification chassis or engine number or any other mark on the Vehicles. The
Lessee shall remain responsible for all loss or damage caused to the Vehicles
(except for fair wear and tear) whether caused by the Lessee, their servants or
agents, their customers or by any other third party. As far as it is reasonably
practicable the Lessee shall take all steps to ensure that the provisions of
all legislation relating to health and safety at work are observed in relation
to the Vehicles.


 


6.8           The Lessee shall pay all sums in connection
with the preparation and delivery of the Vehicles to the Premises.


 


6.9           The Lessee acknowledges that the Vehicles are
required by the Lessee for the purposes of the trade or business of the Lessee
or of any Lessee Group Company incorporated in the United Kingdom and that if
the Vehicles cease to be used for such purposes the Lessee will immediately
notify the Lessor. The Lessee acknowledges that the Lessee has inspected and
approved the Vehicles which are in good working order and satisfactory for
their requirements and that the Lessor has purchased the Vehicles and entered into
the Lease Contract in reliance upon such inspection and approval.


 


6.10         Any warranty in relation to the Vehicles given
by the Supplier to the Lessor which is capable of assignment shall, where it is
reasonably practicable to do so, be assigned and the benefit thereof
transferred by the Lessor to the Lessee.


 


6.11         The Lessee shall, throughout the Lease Term,
maintain each Vehicle in accordance with the general practice in the vehicle
rental market and shall maintain and retain for each Vehicle a full service and
maintenance history.


 


6.12         All terms and conditions whether express or
implied whether by statute, common law or otherwise as to the quality or
fitness of the Vehicles for the Lessee’s purposes are hereby excluded from this
Master Agreement and each Lease Contract in so far as it is lawful so to do.
Under no circumstances will the Lessor be liable to the Lessee for any Loss
arising from the delivery, installation, use or operation of the Vehicles other
than damages for death or personal injury arising out of the negligence or
wilful default of the Lessor or the Lessor’s duly appointed agent or
representatives. No Supplier has any authority to make on behalf of the Lessor
any representation or to give any warranty in respect of the Vehicles and the
Lessor shall not be bound by any such representation or warranty so made by the
Supplier.


 


6.13         The Lessee shall be entitled to permit the use
of the Vehicles by a Lessee Group Company that is resident in the United
Kingdom for Corporation Tax purposes. No such use shall be construed as a
sub-lease of the Vehicles to the Lessee Group Company and the Lessee shall
remain fully responsible to


 


25

















 


the
Lessor for the performance of all the covenants and obligations on the part of
the Lessee to be performed under the Lease Contract.


 


6.14         The Lessee may sub-lease the Vehicles only in
the normal course of its business including the supply of vehicles to its
agents and provided that in so doing the Lessee shall not breach or permit the
breach of any of the terms of this Master Agreement or any Lease Contract.


 


6.15         The Lessor may register the Vehicles with a
hire purchase or credit sale register. The Lessee may request the Lessor to
release such registration to enable sale of the Vehicles and if so requested,
the Lessor undertakes to release such registration subject to no Event of
Default having occurred and being continuing.


 


7.             INSURANCE


 


7.1           As between the Lessor and the Lessee the risk
in the Vehicles shall at all times remain with the Lessee.


 


7.2           The Lessee shall (other than in respect of the
Lessor’s own negligence or wilful default) indemnify and hold the Lessor, its
servants and agents harmless from and against any Loss suffered, paid or incurred
by the Lessor in connection with the Vehicles or in connection with the
ownership, possession, use or transportation of the Vehicles (including any
health and safety law or regulation relating to the foregoing).


 


7.3           The Lessee shall:


 


(a)                                  fully and effectively indemnify the Lessor or
procure that the Lessor is fully and effectively indemnified from and against
any loss or damage occurring to the Vehicle howsoever caused and against all
liability to third parties arising out of the use or operation of the Vehicle
other man damages for death or personal injury caused, in each case, by the
negligence or wilful default of the Lessor;


 


(b)                                 unless the relevant Vehicles are in the Lessor’s
possession, effect or procure the effect of such insurance as may from time to
time be required by law to cover liability in respect of the death of or bodily
injury to persons arising out of the use of the Vehicle and shall also effect
or procure the effect of insurance to cover liability in respect of damage to
property arising out of such use;


 


(c)                                  not to knowingly do or permit anything to be
done which may make such insurance as required under paragraph (b) of this
clause 7.3 void or unenforceable, nor knowingly use or permit the use of the
Vehicle for any purpose not permitted by such insurance;


 


(d)                                 promptly upon the reasonable written request
of the Lessor, produce any insurance policy and or evidence that such insurance
as required under paragraph (b) of this clause 7.3 is currently in force; and


 


(e)                                  not use or permit the use of any Vehicle
whilst uninsured as required by law.


 


26

















 


7.4           The Lessee will notify the Lessor on not less
than a monthly basis with respect to any Vehicle being lost or sustaining
serious damage and if for any reason whatsoever any such Vehicle shall not be
fully covered by insurance or such insurance is for any reason inoperative the
Lessee shall indemnify the Lessor for all loss of or damage to such Vehicle and
against all liability for personal injury or damage arising in connection with
such Vehicle except for personal injury or death caused by the negligence or
wilful default of the Lessor.


 


7.5           In the event of a Total Loss of any Vehicle,
the leasing of that Vehicle shall terminate without prior notice to the Lessee
and the Lessee shall pay to the Lessor on the next Rental Due Date following
notification of such Total Loss, a Termination Sum in respect of that Vehicle
(together with any applicable VAT thereon) and the calculation of which shall
reflect any proceeds of insurance already received thereon by the relevant
Lessor. Any such Termination Sum not received on its Due Date shall attract interest
at the rate specified in clause 5.3 from the Due Date until the date of receipt
by the relevant Lessor. Following receipt of all sums due from the Lessee under
this clause 7.5 in respect of each Vehicle which becomes a Total Loss, the
Lessor shall adjust any remaining Rentals and Assumed Net Sales Proceeds under the
relevant Lease Contract to reflect the receipt of such Termination Sum.


 


7.6           Each Lessor hereby appoints the Lessee as its
agent to negotiate claims with insurers and to receive and give receipts for
any insurance monies paid by an insurer in respect of a Vehicle which is a
Total Loss.


 


7.7           Each Lessor hereby appoints the Lessee as its
agent to dispose of any Vehicle which is a Total Loss on and subject to the
terms set out in this clause 7.7:


 


(a)                                  the Vehicle shall be sold in the state in
which it then is and no representations shall be made and, except as to title,
no condition, warranty or other terms shall be agreed in respect of the Vehicle
(whether in respect of its description, fitness for purpose, quality or otherwise)
save such as may be incapable of exclusion by law;


 


(b)                                 the Lessee shall not sell a Vehicle to itself
or to any person, firm or company connected with the Lessee within the meaning
of Section 839 ICTA, otherwise than that the Lessee may purchase up to a maximum
of 5% of the aggregate number of Vehicles on each Lease Contract provided such
Vehicles are a Total Loss;


 


(c)                                  that title to the relevant Vehicle shall only
pass to the buyer on receipt by the Lessee as the Lessor’s agent of the
purchase price plus VAT if applicable; and


 


(d)                                 the identity of the Lessor as the owner of the
Vehicle shall not be disclosed to the prospective purchaser, other than in the
proving of title.


 


7.8           Notwithstanding anything to the contrary
contained herein:


 


(a)                                  if the Lessee has paid to the Lessor all sums
due under clause 7.5, the Lessee shall be permitted to retain by way of rebate
of Rental, any insurance monies received from an insurer and, in the event that
such


 


27

















 


insurance
monies are received by the Lessor in such circumstances, the Lessor shall
promptly pay such monies to the Lessee; and


 


(b)                                 if the Lessee has complied with its
obligations under clause 7.7, the Lessee shall be permitted to retain by way of
rebate of Rental any Net Sale Proceeds and, in the event that any such Net Sale
Proceeds are received by the Lessor in such circumstances, the Lessor shall
promptly transfer to the Lessee such Net Sale Proceeds.


 


8.                                      REDELIVERY OF THE VEHICLES ON
TERMINATION


 


8.1                                 Upon the termination of any Lease Contract for
any reason the Lessee shall:


 


(a)                                  return the Vehicles (with the exception of any
of those which have become a Total Loss or have been sold in accordance with
clause 11) in the same state of repair and condition as the same were in at the
Commencement Date (with the exception of fair wear and tear);


 


(b)                                 keep the Vehicles insured in accordance with
the provisions of clause 7 and keep them stored until their return to an
address so specified in paragraph (d) of this clause 8.1 but if the Lessee
retains or is permitted by the relevant Lessor to retain possession of or use
the Vehicles after the expiration or early termination of the Lease Term the
obligations of the Lessee under this Master Agreement and the relevant Lease Contract
shall continue notwithstanding such expiration or earlier termination as if the
Lease Term had not expired notwithstanding that such use or possession of the
Vehicles shall not be construed as a renewal of the relevant Lease Contract,
the Lessee being obliged to deliver the relevant Vehicles in accordance with clause
8.1;


 


(c)                                  on the return of a Vehicle to the Lessor,
deliver to the Lessor a full service and maintenance history for that Vehicle;


 


(d)                                 be responsible for all or any charges incurred
in connection with, if appropriate, the transportation (including insurance in
transit) of the Vehicles to any address in the United Kingdom as the Lessor may
reasonably specify.


 


8.2           The Lessee shall (other than in respect of the
Lessor’s own negligence or wilful default) indemnify the Lessor against any
Loss suffered, incurred or paid by the Lessor as a result of the Lessee
retaining possession of any Vehicle following the expiry of the applicable
Lease Term or after termination of the relevant Lease Contract or this Master
Agreement.


 


9.                                      TERMINATION


 


9.1                                 Each of the events or circumstances set out in
the following paragraphs (a) to (n) inclusive are an Event of Default:


 


(a)                                  any sum due under this Master Agreement, any
Lease Contract or the Letter of Offer shall not have been paid to the
applicable Lessor on its due date, other than as a result of the failure of the
appropriate payment transmission system; provided that such payment is made to such Lessor within 2 Business Days
of the due date therefor;


 


28

















 


(b)                                 any material written information given (and
upon which a Lessor has relied) or any representation or warranty made or
repeated by or on behalf of the Lessee under this Master Agreement, any Lease
Contract or the Letter of Offer (whether before or after the date of this
Master Agreement or the applicable Lease Contract) is incorrect, inaccurate, incomplete
or misleading in any material respect and, if the relevant circumstances are
capable of remedy, those circumstances are not remedied within 10 Business Days
after written notice thereof has been given by a Lessor to the Lessee calling
for its remedy;


 


(c)                                  the Lessee fails to comply with any covenant,
undertaking or obligation given or owed by it under this Master Agreement, any
Lease Contract or the Letter of Offer and such failure to comply is not
remedied to the reasonable satisfaction of the relevant Lessor within 14 days
after the first to occur of (1) the Lessee being aware of the failure or (2)
written notice by a Lessor calling for its remedy (if it is capable of being remedied);


 


(d)                                 the Lessee or the Guarantor ceases or
threatens to cease to carry on its business or a significant part of it (except
as part of a solvent reconstruction approved by the Companies) or suspends or
threatens to suspend payment of its debts or is unable or is deemed to be
unable to pay its debts within the meaning of Section 123 (1) of the Insolvency
Act 1986;


 


(e)                                  a proposal is made or a nominee or supervisor
is appointed for the Lessee or the Guarantor for a composition in satisfaction
of its debt or for a scheme of arrangement of its affairs or other arrangement
or any proceedings for the benefit of its creditors are commenced under any law,
regulation or procedure relating to the reconstruction or readjustment of debt;


 


(f)                                    any step is taken (including, without
limitation, the making of an application or the giving of any notice) by the
Lessee, the Guarantor or by any other person to appoint an administrator in
respect of the Lessee or the Guarantor, other than any petition for an
administration order which is presented by an unsecured creditor of the Lessee
or the Guarantor and which is frivolous or vexatious where the petition is being
contested in good faith and is dismissed, discharged or stayed within 10 days
of commencement or (if earlier) the date on which it is advertised;


 


(g)                                 any steps are taken (including, without
limitation, the making of an application or the giving of any notice) by the
Lessee or the Guarantor (without the prior written consent of the Companies) or
any other person to wind up or dissolve the Lessee or the Guarantor or to
appoint a liquidator, trustee, receiver, administrative receiver or similar
officer to the Lessee or the Guarantor or any part of its undertaking or
assets, other than any winding-up petition which is frivolous or vexatious
where the petition is being contested in good faith and is dismissed, discharged
or stayed within 10 days of commencement or (if earlier) the date on which it
is advertised;


 


(h)                                 any attachment, distress, diligence,
arrestment, execution or other legal process (not being reasonably considered in
good faith by the


 


29

















 


Companies
to be defensible or vexatious) is levied, enforced or sued against the Lessee
or the Guarantor or its assets or any person validly takes possession of the
property or assets of the Lessee or the Guarantor;


 


(i)                                     any event occurs or proceedings are taken in
respect of the Lessee or the Guarantor in any Jurisdiction to which it is
subject which has an effect equivalent or similar to any of the events
mentioned in paragraphs (d) to (h) (inclusive) above;


 


(j)                                     this Master Agreement or any Lease Contract
ceases to be legal or effective (or the Lessee so alleges) or any consent
required to enable the Lessee to perform its obligations under this Master
Agreement or any Lease Contract ceases to have effect;


 


(k)                                  a Change of Control occurs without the prior
written consent of CAPITAL;


 


(l)                                     any licence, authority, permit, consent,
agreement or contract which is material to the business from time to time of
the Lessee is terminated, withheld or modified which could reasonably be expected
to have a Material Adverse Effect in respect of the terms of this Master
Agreement or any Lease Contract;


 


(m)                               any other circumstance or event occurs or
arises in respect of the Lessee which has or which would reasonably be expected
to have a Material Adverse Effect in respect of the terms of this Master
Agreement or any Lease Contract; or


 


(n)                                 the occurrence of an “Event of Default” as
that term is defined in each of (i) the Master HP Agreement; and (ii) the Self
Drive Hire Rental Master Agreement.


 


9.2                                 At any time following the occurrence of an
Event of Default, the Lessor shall be entitled to terminate this Master
Agreement and/or any Lease Contract forthwith by service upon the Lessee of
written notice to that effect and:


 


(a)                                  repossess the Vehicles and the Lessee, if
appropriate, hereby irrevocably authorises the Lessor’s servants or agents to
remove the Vehicles from the Premises. The Lessee shall (other than in respect of
the Lessor’s own negligence or wilful default) indemnify the Lessor in respect
of any Loss suffered, incurred or paid by the Lessor in recovering or
attempting to recover possession of the Vehicles (including any storage and/or
insurance charges); and/or


 


(b)                                 recover from the Lessee by way of agreed and
liquidated damages the Termination Sum which shall be an amount equal to the
aggregate of:


 


(i)                                     any Rentals actually in arrear and all other
sums due from the Lessee to any of the Lessors under this Master Agreement
and/or any Lease Contract but which are due but remain unpaid; and


 


30

















 


(ii)                                  if the termination of the Lease Contract takes
place prior to the expiration of the Lease Term:


 


(1)                                  the balance of Rentals that would, but for
such termination, be payable during the remainder of the Lease Term together
with the Assumed Net Sales Proceeds less a rebate, in respect of early payment,
of such amount as is required so as to ensure that the net amount received by
the Lessor maintains the Lessor’s net after tax rate of return on its investment
in the Vehicles; and


 


(2)                                  Break Costs (if any).


 


9.3                                 If, following termination of any Lease
Contract the relevant Vehicles are not sold by the Lessee as agent of the
Lessor in accordance with clause 11, the Lessor shall, as soon as is reasonably
practicable following such termination and having recovered possession of the
Vehicles from the Lessee, sell the Vehicles for the best price reasonably
obtainable and shall pay to the Lessee by way of rebate of Rental the Net Sales
Proceeds after deduction of the Lessor Sales Proceeds Retention (as defined in
clause 11) and of any other sums (including Termination Sums) that may be due
from the Lessee to the Lessor under all Lease Contracts entered into between
the Lessor and the Lessee.


 


9.4                                 For a period of 3 months from the date of
termination pursuant to clause 9.2, the Lessor may in its sole discretion
appoint the Lessee as its non-exclusive agent to sell the Vehicles on terms and
to a buyer satisfactory to the Lessor.


 


9.5                                 Without prejudice to the ability of the Lessor
to treat the occurrence of any event or circumstance as an Event of Default,
the Lessor or its agent may (but shall not be obliged to) effect compliance on
behalf of the Lessee following any failure by the Lessee to comply with any
provision of this Master Agreement, any Lease Contract or the Letter of Offer. The
Lessee shall (other than in respect of the Lessor’s own negligence or wilful
default) indemnify and hold harmless the Lessor and its agents from and against
any Loss suffered, incurred or paid by the Lessor or such agent in connection
with any compliance effected or attempted by the Lessor or any agent of the Lessor
under this clause 9.5.


 


10.                               DISCLAIMER


 


It
is expressly agreed that no condition, warranty or representation of any kind has
been, or is given or made by the Lessor, its servants or agents with respect
to, or in respect of, the Vehicles other than a warranty on the part of the
Lessor that to the best of its knowledge the Vehicles are free from any
Security Interest not disclosed or known to the Lessee before the date of the
relevant Lease Contract and all other conditions, warranties or
representations, express or implied, statutory or otherwise, as to the state,
quality, description or otherwise of the Vehicles or as to their fitness for
any purpose are expressly excluded (other than those which are rendered
incapable of exclusion by statute). The Lessee shall not be entitled to any
rebate of the Rental in respect of any period during which the Vehicles are not
in the possession of the Lessee, unserviceable, out of order, or unusable, and


 


31

















 


the Lessor shall not be
liable to provide the Lessee with any replacement goods or parts at all.


 


11.                               SALE
OF GOODS AFTER TERMINATION


 


11.1                           Definitions


 


For the purposes of this
clause 11:


 


	
  “Assumed
  Net Sales Proceeds Payment Date”

  	
   

  	
  means the date so specified in Part 8 of the
  applicable Lease Contract

  
	
   

  	
   

  	
   

  
	
  “Lessor
  Risk Amount”

  	
   

  	
  means, with respect to any Vehicle, the amount
  specified as such in respect such Vehicle in the relevant Lease Contract less
  the aggregate of:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)               an excess mileage
  charge calculated at the rate so specified in Part 9 of the relevant Lease
  Contract for each mile that such Vehicle has travelled at the date of sale
  thereof in excess of the assumed mileage for such Vehicle as shown in Part 9
  of the relevant Lease Contract;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)              the reduction in
  value of such Vehicle (as reasonably estimated by the Lessor) as a result of
  such Vehicle being at the date of sale in a worse than average condition
  having regard to its age and mileage (fair wear and tear always excepted) or
  not being maintained or serviced in accordance with the Supplier’s
  recommendations;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)               a delayed
  delivery charge calculated at the rate per day so specified in Part 10 of the
  relevant Lease Contract during the period that such Vehicle is retained by
  the Lessee such charge to commence on the Assumed Net Sales Proceeds Payment
  Date and to end on the date of sale of such Vehicle; and

  



 


32

















 


	
   

  	
   

  	
  (d)              VAT (if
  applicable) on each of the foregoing,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  provided that the “Lessor Risk Amount” in respect of
  any Vehicle shall never be less than zero;

  
	
   

  	
   

  	
   

  
	
  “Lessor Sales Proceeds Retention”

  	
   

  	
  means the percentage specified in Part 7 of each
  Lease Contract representing the difference between the aggregate Lessor Risk
  Amounts and, if greater, the aggregate Net Sales Proceeds of all Vehicles
  sold in a Relevant Quarter; and

  
	
   

  	
   

  	
   

  
	
  “Relevant Quarter”

  	
   

  	
  means each successive period of 3 calendar months
  commencing on 1 January, 1 April, 1 July and 1 October in each year.

  



 


11.2                           Payment
of Advance Payment of Sales Proceeds


 


The Lessee shall pay to
the Lessor on the Assumed Net Sales Proceeds Payment Date the Assumed Net Sales
Proceeds on account of receipt by the Lessor of the Net Sales Proceeds.


 


11.3                           Authority
to Sell as Agents


 


(a)                                  Each
Company hereby appoints the Lessee as its agent for the purpose of disposing of
Vehicles on the expiration of the Lease Term on and subject to the terms of
this clause 11 and provided that on the expiration of the relevant Lease Term,
the relevant Vehicle is not and is
not likely to become a Total Loss.


 


(b)                                 No
sale will be made by the Lessee as agent hereunder:


 


(i)            unless
the relevant Lessor has received from the Lessee payment of all Rentals, the
Assumed Net Sabs Proceeds and all other sums due to the Lessor under the Lease
Contract;


 


(ii)           if
the Lessee is in liquidation, administration or receivership at the time;


 


(iii)          to
the Lessee or to a person, firm or company connected with the Lessee within the
meaning of Section 839 ICTA;


 


(iv)          for
a price at less than an arms length price and not less than the open market
value of relevant Vehicles; and


 


(v)           at
a price less than the Lessor Risk Amount without prior notification to the
Lessor in each case and then only on such terms and at such price as the Lessor
may direct.


 


(c)                                  The
Lessee may, with the prior consent of the applicable Company arrange for a
third party to act as its sub-agent for the purpose of


 


33

















 


disposing
of Vehicles provided that the terms thereof are in all material respects
substantially on the terms of this clause 11. The Lessee hereby indemnifies
each of the Companies against any Loss suffered, incurred or paid by any of
them by reason of the acts or omissions of any such third party except where
such sub-agent acts on the directions or instructions of such Company.


 


11.4                           Terms of Sale


 


(a)                                  Any sale of a Vehicle by the Lessee as agent
of the Lessor shall:


 


(i)            be made by a date not later than the date
following 60 days after the expiration of the Lease Term;


 


(ii)           be on terms that no representations shall be
made and, except as to title, no condition, warranty or other term shall be
agreed in respect of such Vehicle (whether in respect of its description
fitness for purpose, quality or otherwise) save such as may be incapable of
exclusion by law; and


 


(iii)          provide that the price of such Vehicle shall
be payable in full in sterling to the Lessee as agent of the Lessor not later
than the date on which title to the
Vehicles shall pass to the purchaser thereof.


 


(b)                                 All proceeds of sale of Vehicles shall be
received by the Lessee as agent for the Lessor and shall be held by the Lessee
on trust for the Lessor (and subject to such directions from time to time as
the Lessor may give to the Lessee in writing in connection therewith with which
the Lessee shall forthwith comply) pending application and payment by the
Lessee or the Lessor in accordance with the provisions of this clause 11.


 


11.5                           Value Added Tax


 


(a)                                  The Lessee shall, as agent of the Lessor, issue
to the purchaser an invoice for the purchase price of the Vehicle together with
VAT if applicable at the prevailing rate.


 


(b)                                 Within 14 days of the sale of any Vehicle and
notwithstanding any other provisions of this clause 11 the Lessee shall pay to
the Lessor in full the amount of any VAT paid by the purchaser in connection
with the purchase of such Vehicle.


 


(c)                                  If disposal of any Vehicle in a VAT accounting
period of the Lessor prior to that in which the Assumed Net Sales Proceeds
Payment Date falls thereby results in an earlier liability on the Lessor to pay
VAT to Customs and Excise then, in addition to any amount which may be payable
by the Lessee to the Lessor pursuant to paragraph (b) of this clause 11.5, the
Lessee will pay to the Lessor such amount as is necessary to restore the Lessor’s
net after tax rate of return.


 


34

















 


11.6                           Indemnity


 


The
Lessee shall indemnify the Lessor and keep the Lessor indemnified from and
against:


 


(a)                                  any Loss suffered, incurred or paid by any of
them arising out of the sale of any Vehicle by the Lessee as agent of the
Lessor under this Master Agreement or the negligence or breach by the Lessee of
any of its obligations under this clause 11; and


 


(b)                                 any Loss suffered, incurred or paid by the
Lessor by reason of any rebate of Rental or sales commission not being
deductible by the Lessor for Corporation Tax purposes,


 


save
and to the extent that in either case, any such Loss (or part thereof) is
caused or contributed to by the Relevant Lessor’s own negligence or wilful
default.


 


11.7                           Risk
Allocation


 


If
the aggregate of the actual Net Sales Proceeds received in any Relevant Quarter
is:


 


(a)                                  less than the aggregate of the Assumed Net
Sales Proceeds in respect of all Vehicles sold in that Relevant Quarter but
greater than the aggregate Lessor Risk Amounts in respect of all Vehicles sold
in that Relevant Quarter, then the Lessor shall be entitled to retain in full the
Assumed Net Sales Proceeds in respect of all such Vehicles (without liability
to account to the Lessee for the difference) and the Lessee shall pay to the
Lessor a sum equal to the Lessor Sales Proceeds Retention. The Lessee shall be
entitled to retain for its own account the actual Net Sales Proceeds; or


 


(b)                                 less than the aggregate of the Assumed Net
Sales Proceeds in respect of all Vehicles sold in that Relevant Quarter and is
less than the aggregate Lessor Risk Amounts in respect of all Vehicles sold in that
Relevant Quarter, then the Lessor shall repay to the Lessee an amount in
respect of all such Vehicles equal to the difference between the aggregate
actual Net Sales Proceeds and the corresponding aggregate Lessor Risk Amount in
respect of all such Vehicles but shall not be obliged to repay to the Lessee
any part of the Assumed Net Sales Proceeds which it shall be entitled to retain
for its own account; or


 


(c)                                  equal to or greater than the aggregate of the
Assumed Net Sales Proceeds in respect of all Vehicles sold in that Relevant
Quarter, then the Lessor shall be entitled to retain for its own account the
Assumed Net Sales Proceeds and the Lessee shall pay to the Lessor the Lessor Sales
Proceeds Retention in respect of all such Vehicles and the Lessee shall be
entitled to retain in respect of all such Vehicles the balance of the actual
Net Sales Proceeds for its own account by way of (i) rebate of Rentals and (ii)
to the extent of any excess over the aggregate of all Rentals paid under this
Agreement by way of sales commission or fee exclusive of VAT (if any);


 


35

















 


For
the purposes of this clause 11.7, if the Lessee fails to notify the Lessor of
the actual Net Sales Proceeds of any Vehicle within four months of the Assumed
Net Sales Proceeds Payment Date, then the Lessor shall be entitled to assume
that the Net Sales Proceeds of such Vehicle is equal to the Assumed Net Sales
Proceeds and that the Lessor Risk Amount is reduced by not less than 120 days
at the Delayed Delivery Charge rate.


 


12.                               LESSEE’S WARRANTIES


 


12.1                           The Lessee hereby represents and warrants to
the Lessor that:


 


(a)                                  the Lessee is a company duly incorporated
under the laws of the jurisdiction in which its registered office is located
and is registered for VAT in the United Kingdom;


 


(b)                                 the Lessee has power to enter into, exercise
its rights and perform and comply with its obligations contained in this Master
Agreement and each Lease Contract and no limit on its powers will be exceeded by
the performance of its obligations under this Master Agreement or any Lease
Contract;


 


(c)                                  the execution and delivery of this Master
Agreement and performance by the Lessee of its obligations under any Lease
Contract and the transactions contemplated by this Master Agreement will not:


 


(i)            contravene any existing applicable law to
which the Lessee is subject;


 


(ii)           conflict with or result in a breach by the
Lessee of any agreement to which the Lessee is a party or which is binding on
any of its assets; or


 


(iii)          contravene the terms of any of the Lessee’s
constitutional documents or the terms of any prior security over any of its
assets given by the Lessee to any third party;


 


(d)                                 the Lessee has obtained and will maintain in
full force and effect throughout any period in which this Master Agreement and
any Lease Contract is in force all necessary consents and licences necessary
for the carrying on of its business and the performance of its obligations under
this Master Agreement and the applicable Lease Contract; and


 


(e)                                  this Master Agreement is entered in the normal
course of business of the Lessee and the carrying out of the transactions
contemplated by this Master Agreement and any Lease Contract shall be construed
as part of the carrying on of the normal course of business of the Lessee.


 


12.2                           Each of the warranties and representations
given in clause 12.1 shall be given as at the date of this Master Agreement and
shall be deemed to be repeated by the Lessee on the date of each Lease
Contract.


 


36

















 


13.                               NOTICES


 


13.1         Any communication to be made under or in
connection with this Master Agreement or any Lease Contract shall be made in
writing and may be made by letter or fax.


 


13.2         The address and fax number of each party for
any communication or document to be made or delivered under or in connection
with this Master Agreement or any Lease Contract is:


 


	
  in the case of CAPITAL or
  any Company:

  
	
   

  
	
  CAPITAL BANK plc

  
	
  CLG-41

  
	
  Charterhall House

  City Road

  Chester

  CH88 3AN

  
	
   

  
	
  Fax:

  	
  01244 693256

  
	
  Attention:

  	
  Graham Stanley

  
	
   

  
	
  Copy to:

  
	
   

  
	
  Fax:

  	
  01244 692921

  
	
  Attention:

  	
  Corporate Secretariat

  
	
   

  
	
  and, in the case of the
  Lessee:

  
	
   

  
	
  Vanguard Rental (UK)
  Limited

  
	
  James House

  
	
  55 Welford Road

  
	
  Leicester

  
	
  LE2 7AR

  
	
   

  
	
  Fax:

  	
  00 44 (0) 116 256 5643

  
	
  Attention:

  	
  Ian Wardle

  



 


Or
any substitute address or fax number as one party may notify to the other by
not less than 5 Business Days’ notice.


 


13.3         Any communication or document made or
delivered by one person to another under or in connection with this Master
Agreement or any Lease Contract will only be effective:


 


(a)                                  if by way of fax, when received in legible
form; or


 


(b)                                 if by way of letter, when it has been left at
the relevant address or 2 Business Days after being deposited in the post
postage prepaid in an envelope addressed to it at that address.


 


37

















 


14.                               MISCELLANEOUS


 


14.1                        Entire Agreement


 


This
Master Agreement, the schedules hereto and the Lease Contracts constitute the
entire agreement and understanding between the parties in connection with the
matters set out in this Master Agreement and supersede and replace all prior
communications, representations, warranties, stipulations, undertakings and
agreements of whatsoever nature, whether written or oral, between the parties
in connection with such matters.


 


14.2                        Waivers


 


No
failure or delay on the part of CAPITAL or any Company to exercise any power,
right or remedy under this Master Agreement or any Lease Contract shall operate
as a waiver thereof, nor shall any single or partial exercise by CAPITAL or any
Company of any power, right or remedy preclude any other or further exercise
thereof or the exercise of any other power, right or remedy.


 


14.3                        Remedies


 


The
remedies provided in this Master Agreement and each Lease Contract are
cumulative and are not exclusive of any remedies provided by law.


 


14.4                        Amendment


 


Any
amendment or waiver of any provision of this Master Agreement or any Lease
Contract and any waiver of any default under this Master Agreement or any Lease
Contract shall only be effective if made in writing and signed by CAPITAL (on
behalf of itself and the relevant Companies).


 


14.5                        Statement of Account


 


Any statement of account
signed as correct by CAPITAL or any Lessor showing any amount due under this
Master Agreement or any Lease Contract shall, in the absence of manifest error,
be conclusive evidence of the amount so due.


 


14.6                        Severability


 


If any provision of this
Master Agreement or any Lease Contract is prohibited or unenforceable in any
jurisdiction such prohibition or unenforceability shall not invalidate the
remaining provisions hereof or thereof or affect the validity or enforceability
of such provision in any other jurisdiction.


 


14.7                        Assignment


 


Subject to the Lessee’s prior
written consent (which shall not be unreasonably withheld or delayed) CAPITAL
and each Lessor may assign and/or transfer any or all of its respective rights
and obligations under this Master Agreement and any Lease Contract. The Lessee
shall not assign or transfer any of its rights or obligations under this Master
Agreement or any Lease Contract.


 


38

















 


14.8                        Successors and Assigns


 


This Master Agreement and
each Lease Contract shall bind and shall inure for the benefit of each of the
parties hereto and thereto and each of their respective successors and
permitted assigns.


 


14.9                        Third Party Rights


 


A person who is not a party
to this Master Agreement has no right under the Contracts (Rights of Third Parties)
Act 1999 to enforce or to enjoy the benefit of any term of this Master
Agreement.


 


14.10                 Counterparts


 


This Master Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any party hereto may execute this
Master Agreement by signing any such counterpart.


 


14.11                 Costs


 


The Lessee shall be liable to
pay all reasonable out of pocket costs, expenses (including storage and legal
costs) and taxes (including VAT) incurred by the Lessor in connection with this
Master Agreement and each Lease Contract or otherwise in connection with the
giving of any consent or approval which may be required under this Master
Agreement, and in enforcing or endeavouring to enforce the provisions of this
Master Agreement or any Lease Contract, or in ascertaining the whereabouts of
the Lessee, or in recovering or endeavouring to recover possession of the
Vehicles from the Lessee or any other person, firm or company.


 


14.12                 Survival


 


The expiry or termination of
this Master Agreement or any Lease Contract shall be without prejudice to any
claim, right or cause of action which either party has or acquires against the
other and which accrues or arises at any time during the currency of this
Master Agreement or that Lease Contract.


 


15.                               DATA PROTECTION


 


Any data concerning this
Master Agreement and any Lease Contract and the Lessee’s performance of any of
its obligations under a Lease Contract may be shared with the ultimate Holding
Company of CAPITAL and any company which is from time to time a Subsidiary of
that Holding Company and with credit reference agencies and may be used by
others for credit assessment purposes.


 


16.          GOVERNING LAW AND JURISDICTION


 


16.1         This Master Agreement is and each Lease
Contract shall be governed by English law.


 


16.2         The courts of England have non-exclusive
jurisdiction to settle any dispute arising out of or in connection with this
Master Agreement and each Lease


 


39

















 


Contract
(including a dispute regarding the existence, validity or termination of this
Master Agreement or any Lease Contract).


 


This
Master Agreement has been entered into on the date stated at the beginning of
this Master Agreement.


 


40

















 


A
person who is not a party to this Lease Contract has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of
any term of this Lease Contract.


 


14.                               COUNTERPARTS


 


This
Lease Contract may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument and any party
hereto may execute this Lease Contract by signing any such counterpart.


 


15.                               SIGNATURES


 


This
Lease Contract shall not become binding on the Lessor until accepted and signed
on the Lessor’s behalf by a person duly authorised so to sign and shall be
deemed to be made on the date of such signing.


 


 


	
  Signed on behalf of the
  Lessee

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acting by

  	
   

  	
   

  	
   (name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   (position held)

  
	
   

  	
   

  
	
   

  	
   

  
	
  WITNESS TO LESSEE’S
  SIGNATURE

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  OWNER’S SIGNATURE:

  	
   

  	
   

  
	
   

  	
   

  
	
  Date of Signature and
  Execution

  	
   

  	
   

  
	
  FOR AND ON BEHALF OF
  [CAPITAL BANK LEASING [•]/ILC [•] LIMITED

  
														



 


44

















 


LEASING SCHEDULE


 


To be attached to and form part of Lease Contract
number [insert] between [insert Relevant Lessor] and Vanguard
Rental (UK) Limited and dated [insert date].


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ASSUMED

  	
   

  	
   

  	
   

  
	
  AGREEMENT

  	
   

  	
  DESCRIPTION

  	
   

  	
   

  	
   

  	
  REF.

  	
   

  	
  NET

  	
   

  	
  VAT

  	
   

  	
  TOTAL

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TOTAL

  	
   

  	
  NET SALES

  	
   

  	
  ASSUMED

  	
   

  
	
  NO.

  	
   

  	
  OF VEHICLES

  	
   

  	
  REG.NO.

  	
   

  	
  NO.

  	
   

  	
  COST

  	
   

  	
  ON COST

  	
   

  	
  COST

  	
   

  	
  RENTAL

  	
   

  	
  VAT

  	
   

  	
  RENTAL

  	
   

  	
  PROCEEDS

  	
   

  	
  MILEAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TOTALS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


	
  Signed for and on behalf of the
  Lessee:

  	
  Signed
  for and on behalf of the Lessor:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
				



 













 


SIGNATURE PAGE


 


 


	
  CAPITAL

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED

  	
  )

  	
   

  
	
  for and on behalf of

  CAPITAL BANK PLC

  	
  )

  )

  	
  /s/ G K STANLEY

  	
   

  
	
  by G K Stanley

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  The Lessee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
  /s/ I WARDLE

  	
   

  
	
  VANGUARD
  RENTAL (UK)

  	
  )

  	
   

  
	
  LIMITED

  by Ian Wardle

  	
  )

  )