Document:

Exhibit 10.22

 

BNY Trust Company of Canada,

as trustee of Canadian Master Trust

c/o BMO Nesbitt Burns Inc.

3rd Floor Podium

1 First Canadian Place

Toronto, ON M5X 1H3

 

and

 

NT Limited Partnership

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

 

	
   

  	
  October 14, 2003

  

 

Dear Sirs:

 

NT Limited Partnership (the “Partnership”)

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Yours truly,

 

	
  Vanguard Car Rental USA Holdings Inc.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Leland Wilson

  
	
  Name:

  	
  Leland
  Wilson

  
	
  Title:

  	
  Senior Vice President

  

 

3

 

	
  Agreed this 14th day of October, 2003

  
	
   

  
	
   

  
	
  National
  Car Rental (Canada) Inc.,

  
	
   

  
	
  by:

  	
  /s/ Peter Chung

  
	
   

  	
   

  
	
  Name:

  	
  Peter Chung

  
	
  Title:

  	
  Vice-President and Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  BNY Trust
  Company of Canada,

  
	
  as trustee of Canadian
  Master Trust

  
	
  (with liability limited to
  the assets of the Trust)

  
	
  by its Securitization
  Agent, BMO NESBITT BURNS INC.

  
	
   

  
	
   

  
	
  by:

  	
  /s/ Paul Smeeton

  
	
   

  	
   

  
	
  Name:

  	
  Paul Smeeton

  
	
  Title:

  	
  Executive Managing
  Director

  Securitization and Structured Finance

  
	
   

  
	
   

  
	
  by:

  	
  /s/ Jerry Marriott

  
	
   

  	
   

  
	
  Name:

  	
  Jerry Marriott

  
	
  Title:

  	
  Vice President,

  Securitization and Structured Finance

  
	
   

  
	
   

  
	
  1487792 Ontario
  Inc.,

  
	
   

  
	
   

  
	
  by:

  	
  /s/ Ian Bandeen

  
	
   

  	
   

  
	
  Name:

  	
  Ian Bandeen

  
	
  Title:

  	
  President

  

 

4

 

SCHEDULE A

Defined Terms

 

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

 

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

 

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

 

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

 

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

 

“MBIA Insured Financing” means the Series 1999-1 6.02% Rental Car Asset Backed Notes, Class
A-3; the Series 1999-3 Floating Rate Car Asset Backed Notes and the Series
2001-2 Floating Rate Rental Car Asset Backed Notes, and the documents relating
thereto.Exhibit 10.23

 

 

CORPORATE BANKING

 

 

FACILITY LETTER

 

BANK OF SCOTLAND

 

funding of

 

£30,000,000

 

to 

 

VANGUARD RENTAL (HOLDINGS)
LIMITED

 

and

 

THE COMPANIES NAMED IN PART ONE
OF SCHEDULE 9

 

REVOLVING CREDIT AND OVERDRAFT
FACILITY

 

 

	
  

  	
  Bank of Scotland

  Corporate Banking

  
	
  CORPORATE
  BANKING

  	
  PO Box 39900 

  155 Bishopsgate

  London

  EC2M 3YB

  

 

	
   

  	
  For the attention of:
  Simon Webber

  
	
  Vanguard Rental (Holdings) Limited

  	
  Telephone:

  	
  0207 012 9170

  
	
  (Company Number 915008)

  	
  Fax:

  	
  0207 012 9459

  
	
  James House

  	
   

  
	
  55 Welford Road

  	
   

  
	
  Leicester

  	
   

  
	
  LE2 7AR

  	
   

  

 

(the “Principal Borrower”),

and the Subsidiaries of the Principal

Borrower listed in Part One of Schedule 9

 

	
  3rd December, 2004

  

 

Dear Sirs,

 

REVOLVING CREDIT AND OVERDRAFT FACILITY OF £ 30,000,000

 

We are pleased to offer the Borrowers a revolving credit and overdraft
facility in an aggregate amount equal to the Commitment, and to agree to issue
the Inter-bank Indemnity, in each case, on the terms and subject to the
conditions contained in this letter. This offer is open for acceptance by the
Original Borrowers until                
2004, when it will lapse. If accepted, this letter and its schedules will form
the agreement between the Borrowers and BoS for the Facility.

 

The definitions which shall apply to this letter are given in Schedules
4 and 12. 

 

1.             Conditions

 

1.1.         Conditions
Precedent

 

The
Facility will not be available, and the Inter-bank Indemnity will not be
issued, until BoS has received, in form and substance satisfactory to it, the
documents and evidence detailed in Part One of Schedule 1.

 

1.2.         Conditions Subsequent

 

1.2.1        The Principal Borrower shall
procure that:

 

 

(a)                                  by no later than the date falling 30 days
after the date of this letter, BoS has received, in form and substance
satisfactory to it

 

(i)            the Legal Charges;

 

(ii)           the Standard Security; and

 

(iii)          the Reports on Title;

 

(b)                                 by no later than the date falling 90 days
after the date of this letter, all bank accounts operated by the Charging Group
Companies are held with BoS at the Facility Office, save for those accounts
required for the operation of the Facility and the Security Documents which
must be held with BoS at the Facility Office prior to the date of first Drawdown
in accordance with paragraph 4.2 of Schedule 1; and

 

(c)                                  by no later than the date falling 7 days
after the date of this letter, standing orders are in effect in respect of all
bank accounts held by the Charging Group Companies with any bank other than
BoS, to ensure that any credit balances on such accounts are transferred to accounts
held by the Charging Group Companies with BoS at the close of business on each
Business Day, provided that

 

(i)                                     subject to clause 1.2.1 (c){ii) below, the
transfer of credit balances to BoS shall only apply to the amount by which the
aggregate of such credit balances on any Business Day exceeds £2,000,000; and

 

(ii)                                  on two Business Days in any week (such days
to be identified by the Principal Borrower in its sole discretion), the
transfer of credit balances to BoS shall only apply to the amount by which the
aggregate of such credit balances on each such Business Day exceeds £5,000,000.

 

1.2.2                        The Principal Borrower shall, by no later
than 10 December 2004, deliver to BoS a letter of undertaking from Worldwide
Excellerated Leasing Ltd. addressed to the Vehicle Funders and BoS (such letter
of undertaking to provide for a period of consultation prior to any Initial
Public Offering and to be in the form agreed on the date of this letter).

 

2.             The
Overdraft Facility

 

2.1.         Purpose

 

A
Borrower may only use the Overdraft Facility for general working capital
purposes.

 

2.2.         Limit

 

2.2.1.                     The overdraft limit is, subject to clause 2.2.4,
£10,000,000 (the “Overdraft Limit”).

 

2

 

2.2.2.                     The Borrowers must at all times provide
sufficient funds to ensure that the Overdraft Limit is not exceeded.

 

2.2.3.                     Any debit balance over the Overdraft Limit
and, where the Overdraft Facility has ceased to be available, the total debit
balance of the overdraft, will attract interest at the annual rate of 2% over
the rate of interest payable on the overdraft

 

2.2.4.                     BoS may, at any time, agree with the
Principal Borrower to increase the Overdraft Limit. If BoS agrees an increase
with the Principal Borrower, the Overdraft Limit will automatically increase to
the amount agreed on the date of that agreement.

 

2.4          Availability

 

2.4.1                        The Overdraft Facility shall, subject to the
terms of this letter, be available for utilisation by any Borrower by way of
cash withdrawals or payments.

 

2.4.2                        A Borrower may utilise the Overdraft Facility
provided that:-

 

(a)                                  no breach of the terms and conditions of this
letter has occurred or would result from the relevant utilisation;

 

(b)                                 the relevant utilisation would not result in
the aggregate of the Advances and the Overdraft Outstandings exceeding the Commitment;
and

 

(c)                                  the relevant utilisation would not result in
the Overdraft Outstandings exceeding the Overdraft Limit;

 

2.4.3                        The Overdraft Facility shall cease to be
available on the Maturity Date or such earlier date on which it is cancelled in
accordance with the terms of this letter.

 

2.4.4                        In accordance with normal banking practice,
BoS will have the right to demand repayment of the whole or any part of the
aggregate Overdraft Outstandings on demand.

 

2.4.5                        In the absence of a Default, repayment of the
Overdraft Outstandings as a result of a demand under clause 2.4.4 will be
without prejudice to the continuation of the Advances Facility.

 

2.5          Interest

 

2.5.1                        Each Borrower will pay interest on its Overdraft
Outstandings at the annual rate of 1.25% over the Bank of Scotland base rate as
that rate fluctuates. Interest will be calculated on a day to day basis on the
cleared daily debit balance of the amount drawn down and will be debited to the
relevant Borrower’s current account on the last day of each month.

 

3

 

2.5.2                        In the event that the last day of any month
falls on a day other than a Business Day, then interest will be applied in
accordance with this clause 2.5 on the next Business Day,

 

3.             The
Advances Facility

 

3.1          Purpose

 

The
Borrowers may only use the Advances Facility to refinance existing Borrowings
and for general working capital purposes. For the avoidance of doubt, the
Borrowers may use the Advances Facility to make inter-company loans to other
Group Companies.

 

3.2          Drawdown

 

3.2.1                        Subject to clauses 3.2.2 and 3.2.3 below, a
Borrower may draw the Advances Facility by way of Advances by giving a Notice
of Drawdown (or, in respect of the Cash Collateral Advance, a Cash Collateral
Notice of Drawdown) no later than 11 am on the proposed Drawdown Date (which must
be a Business Day during the Availability Period).

 

3.2.2                        Drawdown of each Advance shall be conditional
upon BoS being satisfied that:-

 

(a)                                  save for the Cash Collateral Advance, the
amount of the Advance requested is a minimum of £1,000,000 and an integral multiple
of £1,000,000 or, if less, the Available Commitment;

 

(b)                                 there are no more than six Advances
outstanding at any time;

 

(c)                                  the Repeating Representations are true and
accurate on the date of the Notice of Drawdown and on the proposed Drawdown
Date;

 

(d)                                 in the case of a Rollover Advance, no Event
of Default and in the case of any other Advance, no Default has occurred or would
result from BoS permitting its Drawdown.

 

3.2.3                        Each Notice of Drawdown shall stale whether
the Base Rate Option or the LIBOR Option is to apply to the relevant Advance
and, if the LIBOR Option is chosen, the length of the first Interest Period for
such Advance. If the relevant Borrower does not elect either Interest Option,
the Base Rate Option shall apply to the relevant Advance until such time as the
Borrower elects that the LIBOR Option shall apply to the relevant Advance in
accordance with clause 3.6.3.

 

3.3          Availability

 

The
Advances Facility shall cease to be available on the Maturity Date (as that
date may have been extended under clause 3.4) when all Advances shall become
immediately repayable.

 

4

 

3.4          Extension of the Advances Facility

 

The
Principal Borrower may, by notice to BoS not less than 90 days prior to the
Maturity Date, request BoS to extend the Maturity Date to the date falling 364
days after the then current Maturity Date (as that date may previously have
been extended under this clause 3.4). BoS may, subject in any event to there
being no Default which has occurred and is continuing, agree to such request
and shall give written notice of such extension or of its refusal to agree to
such extension (as the case may be) to the Principal Borrower no later than 60
days prior to the then current Maturity Date. The Repeating Representations
shall be given on the date of the Principal Borrower’s notice to BoS requesting
an extension of the Advances Facility pursuant to this clause 3.4.

 

3.4          Repayment

 

3.5                                 Each Borrower which has drawn an Advance
shall (subject to the other provisions of this letter) repay that Advance on
the last Business Day of the Interest Period in relation thereto. The relevant
Advance shall then be available for redrawing subject to clauses 3,2 and 3.3
above.

 

3.6          Interest

 

3.6.1                     The LIBOR Option

 

3.6.1.1               Each Borrower may elect that interest in
respect of an Advance made to it shall be calculated by reference to LIBOR (the
“LIBOR Option”) either, in the Notice of Drawdown relative to that Advance or
in accordance with clause 3.6.3.

 

3.6.1.2               If the LIBOR Option is selected by a Borrower
to apply to an Advance:

 

(a)          the
relevant Borrower will pay interest on that Advance for its Interest Period at
the annual rate which is the sum of (1) the Margin, (2) LIBOR and (3) the
Mandatory Costs (if any);

 

(b)         Interest
will be paid on that Advance in arrear on each Interest Payment Date;

 

(c)          the
relevant Advance shall have only one Interest Period;

 

(d)         the
relevant Borrower may (subject to clause 3.6.1.2{e) and/or as otherwise agreed
by BoS) select an Interest Period for the relevant Advance of one, two, three
or six months in the Notice of Drawdown for such Advance;

 

(e)          no
Interest Period may be selected which extends beyond the Maturity Date; and

 

5

 

(f)            if
there is a repayment, prepayment or recovery of all or any part of the relevant
Advance by the relevant Borrower other than on the last day of an Interest
Period relative thereto, then the relevant Borrower will pay BoS an amount
equal to the Break Costs and indemnify BoS against any other costs, liabilities
or expenses incurred by BoS in connection with that early repayment, prepayment
or recovery.

 

3.6.2                     The Base Rate Option

 

3.6.2.1               Each Borrower may elect that interest in
respect of an Advance made to it shall be calculated by reference to the base
rate of Bank of Scotland (the “Base Rate Option”) either in the Notice of
Drawdown relative to that Advance or in accordance with clause 3.6.3.

 

3.6.2.2               If the Base Rate Option applies to an
Advance, the Borrower to which that Advance has been made will
pay interest in arrear on that Advance on each Interest Payment Date at an
annual rate which is the sum of (1) the Margin and (2) the Bank of Scotland
base rate as that rate fluctuates.

 

3.6.3                     Change of Interest Option

 

A
Borrower may elect to change the Interest Option applicable to an Advance made
to it by giving written notice to BoS which will become effective, in the case
of the relevant Borrower electing that the LIBOR Option shall apply to the
relevant Advance, after two Business Days and, in the case of the relevant
Borrower electing that the Base Rate Option shall apply to the relevant Advance
at the expiry of the then current Interest Period relative to that Advance.

 

3.7          Commitment
Fee

 

3.7.1.                     The Principal Borrower shall pay, or shall
cause another Borrower to pay, to BoS a fee computed at the rate of 0.625% on
the Available Commitment for the Availability Period.

 

3.7.2.                     The accrued commitment fee is payable on the
last day of each successive period of three months which ends during the
Availability Period, on the last day of the Availability Period and on the date
of any cancellation pursuant to clause 3.8 or clause 3.9 in relation to the
amount of the Commitment thereby cancelled.

 

3.8          Voluntary Cancellation

 

The
Principal Borrower may cancel all or any part of the Available Commitment
provided that it has given BoS not less than 5 Business Days’ notice in writing
of its intention to cancel.

 

3.9          Mandatory Prepayment and Cancellation

 

6

 

On
the occurrence of any of:

 

3.9.1.                     a Sale;

 

3.9.2.                     a Listing; or

 

3.9.3.                     a Change of Control,

 

(a)                                  the Principal Borrower shall promptly notify BoS
upon becoming aware of that event; and

 

(b)                                 BoS shall cancel the Facility and declare all
outstanding Advances, together with accrued interest, and all other amounts
accrued under the BoS Documents immediately due and
payable, whereupon the Facility will be cancelled and all such outstanding
amounts will become immediately due and payable.

 

3.10        Prepayment
and Cancellation

 

3.10.1.               No amount of the Commitment cancelled under
this letter may be subsequently reinstated.

 

3.10.2.               Any notice of cancellation under this letter
shall be irrevocable.

 

3.10.3.               Any cancellation under this letter shall be
of an amount of not less than £1,000,000 and an integral multiple of £1,000,000
{or, if less, the Available Commitment) and shall be made together with any
other amounts payable to BoS under this letter in respect of the amount of the
Commitment cancelled.

 

3.10.4.               Without prejudice to Clause 3.6.1.2(f), any
cancellation under this letter may be made without payment of any fee or
penalty.

 

3.10.5.               Unless the relevant Borrower complies with
the terms of clause 3.6.1.2 (f), any prepayment of any Advance to which the
LIBOR Option applies shall be made on the last day of the Interest Period
relative to such Advance.

 

3.10.6.               The Borrowers may not repay or prepay any
Advance or cancel all or any part of the Commitment except at the times and in
the manner provided for in this letter.

 

4.             Default
Interest

 

4.1.                              If a
Borrower fails to pay any sum under or in relation to the Facility on its due
date then the relevant Borrower will pay interest on the unpaid amount at the
Default Rate until it is paid.

 

4.2.                              Default interest payable must be paid monthly
in arrear and if not paid will itself bear interest at the Default Rate.

 

7

 

5.                                      Security

 

The
Initial Charging Companies will, as security for the Facility and any other
money owing or incurred to BoS by any Charging Group Company deliver or procure
delivery of the Security Documents detailed in Part One of Schedule 1.

 

6.             Representations
and Warranties

 

Each
Borrower makes the representations and warranties set out in paragraph 1 of
Schedule 2 and the Principal Borrower makes the representations and warranties
set out in paragraph 2 of Schedule 2, on the date hereof and repeats the
Repeating Representations on each Interest Payment Date.

 

7.             Covenants

 

The
Principal Borrower covenants with BoS that from the date of this letter until
all the obligations of the Borrowers under it have been discharged:-

 

7.1.         General
Covenants

 

it
will at all times comply and procure compliance by each Charging Group Company
with the general covenants set out in Schedule 3;

 

7.2.         Financial
Covenants

 

it
will at all times comply with the financial covenants set out in Schedule 4;
and

 

7.3.         Financial
Information Covenants

 

it
will at all times comply with the financial information covenants set out in
Schedule 5.

 

8.             Default
and Indemnify

 

8.1.                              If an Event of Default occurs and has not
been waived by BoS in writing, BoS may by notice in writing to the Principal
Borrower:-

 

8.1.1.                     declare that all or part of the Advances be
due and payable together with accrued interest and all other amounts
outstanding under the BoS Documents; and/or

 

8.1.2.                     cancel any part of the Available Commitment;
and/or

 

8.1.3.                     require repayment (immediately or otherwise
as BoS may require) of the Advances together with accrued interest and all
other amounts outstanding under the BoS Documents; and/or

 

8.1.4.                     require that interest is payable on the
Advances at the Default Rate from the date of the occurrence of the Event of
Default.

 

8.2.                              The Principal Borrower will (or shall procure
that a Charging Group Company will) indemnify (and keep indemnified) BoS on
written demand

 

8

 

against
any loss or expense, including legal fees, which BoS sustains or incurs:-

 

8.2.1.                     because of a default by any Charging Group
Company of any obligation assumed by it under any BoS Document; or

 

8.2.2.                     as a consequence of any Default

 

8.3.                              If a Default occurs then (while it is
continuing unwaived, or, in the case of a Potential Event of Default,
unremedied and unwaived) BoS shall be entitled to initiate an Investigation of,
and/or instruct any report (accounting, legal, valuation or otherwise) on, the
business and affairs of the Principal Borrower and/or any other Charging Group
Company which BoS considers reasonably necessary to ascertain the financial
position of the Charging Group, all reasonable fees and out of pocket expenses
incurred by BoS in so doing being payable by the Principal Borrower.

 

9.             Taxes,
Increased Cost and Market Disruption

 

9.1.                              Subject
to clause 12,6, all payments by the Borrowers to BoS
(being a Qualifying Lender) under this letter shall be free and without
deduction of tax unless the relevant Borrower is required by law to make a
payment subject to deduction or withholding of tax, in which case the amount
payable by the relevant Borrower will be sufficiently increased to ensure that BoS
receives and retains a net sum equal to that which it would have received and retained
were no deduction or withholding made. If BoS subsequently receives a tax
credit which is referable to the increased payment and which enhances its
position, then it will reimburse the relevant Borrower sufficient to redress
the position up to the amount received so long as by so doing it does not
prejudice receipt or retention of the tax credit.

 

9.2.                              If BoS incurs an Increased Cost, then the
Principal Borrower will indemnify it and will promptly pay to it the amount BoS
certifies as payable. BoS will disclose, in reasonable detail, the basis of its
calculation but not any matter which it, in good faith, considers confidential.

 

9.3                                 If (and for so long as) BoS determines that
adequate and fair means do not exist to ascertain LIBOR in relation to any
Advance to which the LIBOR Option applies for any Interest Period, then the
rate of interest applicable to that Advance for that Interest Period shall be
the annual rate which is the sum of the Margin, the rate notified by BoS to the
Principal Borrower to be the cost to BoS of funding that Advance from whatever
source it may reasonably select and the Mandatory Costs (if any) applicable to
that Advance.

 

10.          Payment,
Set Off and Interest Calculations

 

10.1.                        All payments of principal, interest or
commission will be paid to BoS at the Facility Office unless BoS otherwise
directs and shall be in cleared Sterling funds. If BoS receives a payment that
is insufficient to discharge all the amounts then due and payable under the BoS
Documents, BoS shall apply that payment towards the obligations of the Charging
Group Companies under the BoS Documents in such order as BoS considers
appropriate and

 

9

 

any
such appropriation shall override any instructions by any Charging Group
Company.

 

10.2.                        All payments to be made by any Charging Group
Company under the BoS Documents shall be calculated and be made without (and
free and clear of any deduction for) set-off or counterclaim,

 

10.3.                        All sums of interest or commission will
accrue on a daily basis and be calculated on the basis of a year of 365 days
and for the actual number of days elapsed. Interest shall continue to accrue on
sums due following decree or judgement as well as before it, and at the same
rate.

 

10.4.                        Any determination by BoS of any amount of
principal, interest, commission or charges or an applicable interest rate
shall, in the absence of manifest error, be conclusive and binding on the
Borrowers.

 

10.5.                        Where the due date for payment of any amount
under any BoS Document is not a Business Day then (without affecting subsequent
payment dates) actual payment will be required on the next Business Day.

 

10.6.                        Each Borrower agrees that any monies from
time to time standing to its credit on any account (whether current, deposit,
loan or of any other nature whatsoever) held by it with BoS may be retained as
cover for and/or applied by BoS at any time and without notice to the relevant
Borrower (whether on or before or after the expiry of any fixed or minimum
period for which such monies may have been deposited) in or towards payment or
satisfaction of any monies or liabilities due, owing or incurred by the
relevant Borrower to BoS in any manner, whether present or future, actual or
contingent, joint or several, whether incurred as principal or surety (or
guarantor or cautioner) or in any other way whatsoever.

 

10.7.                        If BoS exercises any rights in respect of any
monies as referred to in clause 10.6 (including, without limitation, any rights
of set-off, accounting, retention or similar rights) in relation to any
liability of a Borrower and that liability or any part of it is in a different
currency from any credit balance against which BoS seeks to exercise its rights,
BoS may use the currency of the credit balance to purchase an amount in the
currency of the liability at the then prevailing BoS spot rate of exchange and
to pay out of the credit balance all costs, charges and expenses incurred by BoS
in connection with that purchase.

 

10.8.                        BoS shall not be liable for any loss of
interest caused by the determination before maturity of any deposits or any
loss caused by the fluctuation in any exchange rate at which any currency may
be bought or sold by BoS.

 

10.9.                        If a Borrower fails to pay any amount due to BoS
in Sterling but makes such payment in another currency, the relevant Borrower
shall indemnify BoS against the full cost incurred by BoS (including all costs,
charges and expenses) of converting that payment into Sterling.

 

10.10.                  In the event that (1) any currency in which
any of the obligations under the BoS Documents are denominated from time to
time is changed or replaced at

 

10

 

any
time after the date of this letter (whether as a result of the introduction of,
changeover to or operation of a single or unified European currency or
otherwise) and/or (2) any price source for the Euro or the national currency of
any member state of the European Union disappears or is replaced and/or (3) any
market conventions relating to the fixing and/or calculation of interest are
changed or replaced, the BoS Documents will be amended to the extent that BoS
(acting reasonably) considers to be required in order to reflect those circumstances.

 

11.          Illegality

 

If,
in the opinion of BoS, the introduction of any law or regulation or change in
its interpretation, makes it unlawful for BoS to maintain all or any part of
the Facility or carry out all or any of its obligations in relation to it then BoS
will serve notice to that effect on the Borrowers and that notice will release BoS
from those obligations. The Borrowers will then repay to BoS (on its demand or
on such later date as BoS as reasonably specifies) the Advances together with any
other sums payable to BoS under this letter.

 

12.          Assignment
and Transfer

 

12.1                           This letter is for the benefit of the
Borrowers and BoS and their successors and assignees and transferees of BoS.

 

12.2.                        No Borrower may assign or transfer all or any
of its rights, obligations or benefits under this letter.

 

12.3.                        BoS will be entitled (after consultation with
the Principal Borrower) to (1) assign any of its rights and/or (2) transfer by
novation any of its rights, benefits and obligations under the BoS Documents to
another bank or financial institution or a trust, fund or other entity which is
regularly engaged in or established for the purpose of making, purchasing or
investing in loans, securities or other financial assets. The Principal
Borrower undertakes to execute and to procure that each Charging Group Company
will execute all documents BoS may reasonably require to give effect to an
assignment, novation or transfer.

 

12.4.                        BoS will be entitled to enter into any
sub-participation, or any trust or contractual arrangement (or any other
transaction under which payments are to be made by reference to the BoS
Documents or any Borrower) with any person in relation to the BoS Documents and
(subject to clause 12.5 below) to provide information in relation to the
Charging Group to such persons for such purpose.

 

12.5.                        BoS will be entitled to disclose to any
prospective or actual assignee, transferee or participant, any other member of
the BoS Group, its auditors, advisers or applicable regulatory authority or any
other person who enters or proposes to enter into any transaction as referred
to in Clause 12. 4 above with BoS in relation to the BoS Documents confidential
information concerning each Charging Group Company and its financial condition
and any other information which may be given to BoS in relation to this letter,

 

11

 

provided that the person to whom such
information is disclosed
undertakes to BoS to maintain the confidentiality of such information.

 

12.6.                        If BoS assigns any of its lights and/or
transfers by novation any of its rights, benefits and obligations under the BoS
Documents to any party which is not, at the time of such assignment or
transfer, a Qualifying Lender, the provisions of clause 9.1 shall not apply.

 

13.                               Additional Borrowers

 

13.1.                        The Principal Borrower may request that any of
its wholly owned Subsidiaries becomes an Additional Borrower. That Subsidiary
shall become an Additional Borrower if:

 

13.1.1.               it is a limited company incorporated in
England and Wales; 

 

13.1.2                it is not a dormant company;

 

13.1.3.               the Principal Borrower delivers to BoS a duly
completed and executed Accession Letter;

 

13.1.4.               the Principal Borrower confirms to BoS that
no Default is continuing or would occur as a result of that Subsidiary becoming
an Additional Borrower;

 

13.1.5.               BoS has received all of the documents and
other evidence listed in Part Two of Schedule 1 in relation to that Additional
Borrower, each in form and substance satisfactory to BoS; and

 

13.1.6.               BoS consents to such Subsidiary becoming an
Additional Borrower.

 

13.2.                        Delivery of an Accession Letter constitutes
confirmation by the relevant Subsidiary that the Repeating Representations are
true and correct in relation to it as at the date of delivery as if made by
reference to the facts and circumstances then existing.

 

14.          Notices

 

14.1.                        Any communication to be made under or in
connection with this letter shall be made in writing and, unless otherwise
stated, may be made by fax or letter.

 

14.2.                        The address and fax number (and the
department or officer, if any, for whose attention the communication is to be
made) of BoS for any communication or document to be made or delivered under or
in connection with this letter is that identified with its name at the
beginning of this letter or any substitute address, fax number or department or
officer as BoS may notify to the other parties by not less than five Business
Days’ written notice,

 

14.3.                        The address of each Borrower for any
communication or document to be made or delivered under or in connection with
this letter is its registered office at the time such communication or document
is made or delivered. The

 

12

 

fax
number of each Borrower for any communication or document to be made or
delivered under or in connection with this letter is the fax number most
recently provided to BoS by the relevant Borrower.

 

14.4                           Any communication made or document made or
delivered by one person to another under or in connection with this letter 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 delivered to the relevant address
or three Business Days after being deposited in the post postage prepaid in an
envelope addressed to it at that address,

 

and,
if a particular department or officer is specified as part of the address
details referred to in clause 14.2, if addressed to that department or officer.

 

14.5                           Any communication or document to be made or
delivered to BoS will be effective only when actually received by BoS and then
only if it is expressly marked for the attention of the department or officer
identified with its name above {or any substitute department or officer as BoS
shall specify for this purpose). Any communication or document made or
delivered to the Principal Borrower in accordance with this clause will be
deemed to have been made or delivered to each of the Charging Group Companies.

 

14.6                           BoS may rely upon any communication by telephone
or fax purporting to be on behalf of a Borrower by anyone notified to BoS by
the Principal Borrower as being authorised to do so, without enquiry by BoS as
to authority or identity. The Principal Borrower agrees to indemnify BoS
against any liability incurred or sustained by BoS as a result.

 

15.                               Miscellaneous

 

15.1                           No failure or delay by BoS in exercising any
right or remedy under any BoS Document shall operate as a waiver, and no single
or partial exercise shall prevent further exercise, of any right or remedy.

 

15.2                           If at any time any provision of this letter
is or becomes illegal, invalid or unenforceable in any respect under any law of
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction shall in any way be affected
or impaired.

 

15.3                           The schedules referred to in this letter
shall form part of this letter.

 

15.4                           Save to the extent expressly provided to the
contrary in a BoS Document, a person who is not a party to a BoS Document may
not enforce any of its terms under the Contracts (Rights of Third Parties) Act
1999.

 

16.                               Fees and Expenses

 

16.1                           The Principal Borrower will pay to BoS an
arrangement fee of £100,000 payable within 5 Business Days of acceptance of
this letter.

 

13

 

16.2                           The Principal Borrower will pay or reimburse
to BoS (on a full indemnity basis) all reasonable legal, accountancy,
valuation, due diligence and other fees and out of pocket costs and expenses or
tax charged to or incurred by BoS in connection with the BoS Documents
(including the amendment, waiver, enforcement or preservation of the BoS
rights) on demand, subject to any agreed caps and limits. The Principal
Borrower authorises BoS to debit any operating account it has with BoS with the
amount of any such fees, costs, expenses or tax which is payable from time to
tune.

 

17.          Law

 

This
letter will be governed by and construed according to English law and each
Borrower submits to the jurisdiction of the English Courts.

 

Yours faithfully

 

 

	
  /s/ ILLEGIBLE

  	
   

  
	
  for and on behalf of

  
	
  THE GOVERNOR AND COMPANY

  
	
  OF THE BANK OF SCOTLAND

  

 

 

Agreed
and accepted on behalf of Vanguard Rental (Holdings) Limited

 

 

	
  By

  	
   

  	
  Director

  
	
   

  
	
   

  	
  Director/Secretary

  
	
   

  	
   

  
	
  Date:

  
				

 

 

Agreed
and accepted on behalf of Vanguard Rental (Group) Limited

 

 

	
  By

  	
   

  	
  Director

  
	
   

  
	
   

  	
  Director/Secretary

  
	
   

  	
   

  
	
  Date:

  
				

 

14

 

16.2                      The Principal Borrower will pay or reimburse to BoS (on a full
indemnity basis) all reasonable legal, accountancy, valuation, due diligence
and other fees and out of pocket costs and expenses or tax charged to or
incurred by BoS in connection with the BoS Documents (including the amendment,
waiver, enforcement or preservation of the BoS rights) on demand, subject to
any agreed caps and limits. The Principal Borrower authorises BoS to debit any
operating account it has with BoS with the amount of any such fees, costs,
expenses or tax which is payable from time to time.

 

17.       Law

 

This
letter will be governed by and construed according to English law and each
Borrower submits to the jurisdiction of the English Courts,

 

Yours
faithfully

 

 

	
   

  	
   

  
	
  for
  and on behalf of

  
	
  THE GOVERNOR AND COMPANY

  
	
  OF THE BANK OF SCOTLAND

  

 

 

Agreed and accepted on behalf of Vanguard Rental (Holdings) Limited

 

	
  By

  	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  
	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  	
   

  
	
  Date:

  
				

 

 

Agreed and accepted on behalf of Vanguard Rental (Group) Limited

 

	
  By

  	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  
	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  	
   

  
	
  Date:

  
				

 

14

 

 

Agreed and accepted on behalf of Vanguard Rental Limited

 

	
  By

  	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  
	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  	
   

  
	
  Date:

  
				

 

Agreed and accepted on behalf of Provincial Assessors Limited

 

	
  By

  	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  
	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  	
   

  
	
  Date:

  
				

 

Agreed and accepted on behalf of Vanguard Rental (Properties) Limited

 

	
  By

  	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  
	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  	
   

  
	
  Date:

  
				

 

Agreed and accepted on behalf of Vanguard Rental (Franchising) Limited

 

	
  By

  	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  
	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  	
   

  
	
   

  
				

 

15

 

	
  Date:

  

 

 

Agreed and accepted on behalf of Vanguard Rental (UK) Limited

 

	
  By

  	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  
	
  /s/ ILLEGIBLE

  	
  Director

  
	
  Date:

  	
   

  
	
   

  
				

 

 

Agreed and accepted on behalf of Provincial Securities Limited

 

	
  By

  	
  /s/ ILLEGIBLE

  	
  Director

  
	
   

  
	
  /s/ ILLEGIBLE

  	
  Director

  
	
  Date:

  	
   

  
	
   

  
				

 

 

IMPORTANT NOTICE: As with any legally binding agreement, we recommend
that you consult your solicitor or other independent legal adviser before
accepting this letter.

 

16

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