EXHIBIT 10.4 SEPARATION AGREEMENT dated as of July 30th, 1997

EXHIBIT 10.4
SEPARATION AGREEMENT

dated as of
July 30th, 1997

between

HFS Car Rental, Inc.

and

Avis Rent A Car, Inc.

SEPARATION AGREEMENT

SEPARATION AGREEMENT ("Agreement") dated as of July 30th, 1997 by and
between HFS Car Rental, Inc., a Delaware corporation, and an indirect wholly
owned subsidiary of HFS Incorporated (together with its successors and permitted
assigns, "Holdings"), and Avis Rent A Car, Inc., a Delaware corporation
(together with its successors and permitted assigns, "ARAC").

RECITALS

WHEREAS, ARAC and certain of its subsidiaries currently conduct the
business of owning and managing car rental operations under the service ▇▇▇▇ and
tradename "Avis" (the "Car Rental Business") primarily through certain
subsidiaries of ARAC (the "Direct Car Rental Subsidiaries"), their respective
subsidiaries and joint ventures, all as identified on Schedule 1 hereto
(collectively, the "Car Rental Subsidiaries");

WHEREAS, ARAC is presently a direct wholly owned subsidiary of Holdings
established for the purposes of taking title to the capital stock and associated
goodwill of the Direct Car Rental Subsidiaries and certain assets associated
with the Car Rental Business, and assuming certain liabilities associated with
the Car Rental Business, all as specified herein, such that ARAC will own
substantially all of the assets, business and operations currently conducted by
the Car Rental Business other than the System (as defined herein) and the
business of granting franchise rights or licenses with respect to the operation
of Avis car rental locations under the System and the Proprietary Marks (as
defined herein);

WHEREAS, the Board of Directors of Holdings has determined that it is in
the best interest of Holdings and the stockholder of Holdings to conduct a
public offering (the "Separation") of approximately 75% of ARAC Common Stock;
and

WHEREAS, the parties have determined that it is necessary and desirable
to set forth the principal corporate transactions required to effect the
Separation and to set forth other agreements that will govern certain other
matters following such Separation.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
agreements, provisions and covenants contained in this Agreement, the parties
hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1 Definitions. As used herein, the following terms have the
following meanings:

"Action" means any claim, suit, arbitration, inquiry, proceeding or
investigation by or before any court, governmental or regulatory or
administrative agency or commission or any other tribunal.

"Affiliate" of any specified person means any other person that, directly
or indirectly, controls, is controlled by or is under direct or indirect common
control with such specified person.

"Agreement" has the meaning specified in the Recitals.

"Ancillary Agreements" means the Master License Agreement, the Computer
Services Agreement, the Reservation Agreement, the Employee Benefits and Other
Employment Matters Allocation Agreement, the Lease Agreements, the Cost Sharing
Agreement, and the Tax Disaffiliation Agreement.

"ARAC" has the meaning specified in the Recitals.

"ARAC Bylaws" means the bylaws of ARAC in the form filed as an exhibit to
the Form S-1.

"ARAC Certificate" means the restated certificate of incorporation of
ARAC in the form filed as an exhibit to the Form S-1.

"ARAC Common Stock" means the outstanding shares of common stock, par
value $.01 per share, of ARAC.

"ARAC Liabilities" means all of (i) the Liabilities of ARAC under this
Agreement, (ii) the Assumed Liabilities, (iii) the Liabilities of ARAC arising
after the Separation Date and (iv) any liabilities for Taxes for which HFS
Incorporated is entitled to indemnification from ARAC pursuant to the Tax
Disaffiliation Agreement.

"ARAC Transferred Assets" has the meaning specified in Section 2.1.

"Assumed Liabilities" means the Liabilities arising directly or
indirectly from the operation of the Car Rental Business or the ownership or use
of assets (including the ARAC Transferred Assets) or other activities in
connection therewith whether arising before, on or after the Separation Date,
including but not limited to any Liabilities arising or in connection with or
related to (i) information contained in or omitted from the Form S-1, (ii) any
Liabilities set forth or referenced in the audited financial statements of ARAC
included in the Form S-1, (iii) all litigation relating to the Car Rental
Business, including any liability arising from the franchise agreements arising
prior to the Separation Date and (iv) the Wizard Note pursuant to the Wizard
Note Assumption and Release Agreement between Wizard Co., and ARAC and Reserve
Claims Management Co. dated as of the date hereof. Notwithstanding the
foregoing, the Assumed Liabilities shall not include (i) operating leases under
which Holdings remains liable, and (ii) liabilities related to alleged acts of
illegal discrimination against customers in the Car Rental Business which are
alleged to have occurred prior to the Separation Date.

"Car Rental Business" has the meaning specified in the first recital of
this Agreement.

"Car Rental Subsidiaries" has the meaning specified in the first recital of
this Agreement.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission" means the Securities and Exchange Commission.

"Computer Services Agreement" means the Computer Services Agreement dated
as of the date hereof between WizCom and Rent A Car, pursuant to which WizCom
has granted ARAC rights to use the Wizard

System in the conduct of its car rental business and pursuant to which WizCom
receives fees in exchange therefor as such agreement may be amended from time to
time.

"Cost Sharing Agreement" means the Cost Sharing Agreement dated as of the
date hereof between WizCom and ARAC, providing for certain matters relating to
the sharing of space and support services, as such agreement may be amended from
time to time.

"Covered Claims" means any claim that is of a type covered by insurance
or self insurance of Holdings as in effect on the Separation Date and that is a
type of claim specified as a covered claim on Schedule 5.6(a).

"Direct Car Rental Subsidiaries" has the meaning specified in the first
recital of this Agreement.

"Employee Benefits Agreement" means the Employment Benefits & Other
Employment Matters Allocation Agreement dated as of the date hereof between
Holdings, HFS and ARAC, providing for certain matters relating to the allocation
of employee benefits and related matters, as such agreement may be amended from
time to time.

"Fleet Financing Program" means the approximately $3.5 billion asset-backed
fleet financing program of ARAC being structured jointly by Chase Securities
Inc. and ▇▇▇▇▇▇ Brothers Inc.

"Form S-1" means the registration statement on Form S-1 filed by ARAC
with the Commission to effect the registration of the ARAC Common Stock pursuant
to the Securities Act, as such registration statement may be amended from time
to time.

"Franchise Agreements" means all franchise agreements to which Holdings
or any Car Rental Subsidiary is a party, pursuant to which Holdings(either
directly or through any such Car Rental Subsidiary) has granted franchise rights
with respect to the operation of Avis car rental facilties, and in exchange
therefor, receives franchise fees, royalties, license fees and service fees.

"Guarantees" means the guarantees of Holdings listed on Schedule 3 hereto.

"HFS" means HFS Incorporated, a Delaware corporation.

"Holdings" has the meaning specified in the Recitals.

"Holdings Liabilities" means all of (i) the Liabilities of Holdings under
this Agreement, (ii) the Liabilities of Holdings (other than any ARAC
Liabilities), arising after the Separation Date, (iii) liabilities related to
alleged acts of illegal discrimination against customers in the Car Rental
Business which are alleged to have occurred prior to the Separation Date, and
(iv) any liabilities for Taxes as for which ARAC is entitled to indemnification
from HFS Incorporated pursuant to the Tax Disaffiliation Agreement.

"Holdings Transferred Assets" has the meaning specified in Section 2.1.

"Lease Agreements" means the Lease Agreements and Sublease Agreements, as
the case may be, between WizCom and Rent A Car providing for the allocation of
the executive and other offices of ARAC and WizCom, as such agreements may be
amended from time to time.

"Liabilities" means any and all claims, debts, liabilities and
obligations, absolute or contingent, matured or not matured, liquidated or
unliquidated, accrued or not accrued, known or unknown, whenever arising,
including all costs and expenses (including reasonable attorney's fees) relating
thereto under any law, rule, regulation, action, order or consent decree of any
Governmental entity or any award of any arbitrator of any kind, and those
arising under any contract, commitment or undertaking.

"Loss" has the meaning specified in Section 4.1.

"Master License Agreement" means the Master License Agreement dated as of
the date hereof between Rent A Car and Holdings pursuant to which Holdings has
granted franchise rights to Rent A Car with respect to the operation of Avis car
rental facilities, and in exchange therefor receives royalties, license fees and
service fees, as amended from time to time.

"New Credit Facilities" means a revolving credit facility in the amount
of up to $125 million, a term loan facility in the amount of $120 million and a
$225 million standby letter of credit facility, each with the Chase Manhattan
Bank, as agent, and the other lenders thereto.

"Rent A Car" means Avis Rent A Car System, Inc., a wholly owned
subsidiary of ARAC.

"Reservation Agreement" means the Reservation Services Agreement dated as
of the date hereof between HFS and Rent A Car pursuant to which HFS is to
provide certain reservation services to Rent A Car, as amended from time to
time.

"Securities Act" means the Securities Act of 1933, as amended.

"Separation" has the meaning specified in the third recital of this
Agreement.

"Separation Date" means the date determined by the Board of Directors of
Holdings as the date on which the Separation shall be effected, which is
contemplated to occur on or about September 22, 1997.

"System" shall have the meaning given to such term in the Master License
Agreement.

"Tax" or "Taxes" shall have the meaning given to such term in the Tax
Disaffiliation Agreement.

"Tax Disaffiliation Agreement" means the Tax Disaffiliation Agreement
dated as of the date hereof between HFS Incorporated and ARAC providing for
certain tax related matters, as such agreement may be amended from time to time.

"Wizard Note" means the note, dated October 1996, made by Wizard Co., Inc.
in the principal amount of $194,100,000.

"WizCom" means WizCom International, Ltd., a Delaware corporation and an
indirect wholly owned subsidiary of HFS.

"WizCom Transferred Assets" means the assets and agreements identified on
Schedule 4 hereto which were intended to be transferred on October 16, 1996 in
connection with the acquisition of ARAC by HFS Incorporated.

ARTICLE II

TRANSFER OF CAR RENTAL BUSINESS

Section 1 Transfer of Assets. (a) Prior to the Separation Date, Holdings
shall take or shall cause to be taken all actions necessary to cause the
transfer, assignment, delivery and conveyance to ARAC of all of Holdings' and
its subsidiaries' rights, title and interest in the assets listed below
(collectively, the "ARAC Transferred Assets"):

(i) the shares of common stock and preferred stock, if any, of the Direct
Car Rental Subsidiaries owned by Holdings as set forth on Schedule 1
hereto; and

(ii) all books, records and files of, or relating exclusively to, the Car
Rental Business; provided, however, that Holdings shall retain access to
such books, records and files to the extent required to carry out its
obligations under the Master License Agreement.

(b) Prior to the Separation Date, ARAC shall take or shall cause to be
taken all actions necessary to cause the transfer, assignment and conveyance to
Holdings or its subsidiaries or affiliates of all of ARAC's and its
subsidiaries, rights, title and interest in the assets listed below
(collectively, the "Holdings Transferred Assets"):

(i) the System;

(ii) the Franchise Agreements identified on Schedule 2 hereto;

(iii) the WizCom Transferred Assets; and

(iv) all books, records and files of, or relating to, the System, the
Franchise Agreements identified on Schedule 2 hereto and the WizCom Transferred
Assets; provided, however, that ARAC shall retain access to such books, records
and files to the extent required to carry out its obligations under the Master
License Agreement.

Section 2 Assignment and Assumption of Liabilities. Except as set forth
in one or more of the Ancillary Agreements, from and after the Separation Date,
(i) ARAC shall, and/or shall cause its subsidiaries to, assume, pay, perform and
discharge in due course all of the ARAC Liabilities, and (ii) Holdings shall,
and/or shall cause its subsidiaries to, assume, pay, perform and discharge in
due course all of the Holdings Liabilities.

Section 3 Transfers Not Effected Prior to the Separation Date. To the
extent any transfers contemplated by this Article II shall not have been fully
effected prior to the Separation Date, Holdings and ARAC shall cooperate to
effect such transfers as promptly as possible following the Separation Date.
Nothing herein shall be deemed to require the transfer of any assets or the
assumption of any Liabilities that by their terms or by operation of law cannot
be transferred or assumed; provided, however, that Holdings and ARAC and their
respective subsidiaries and Affiliates shall cooperate in seeking to obtain any
necessary consents or approvals for the transfer of all assets and Liabilities
as contemplated by this Article II. In the event that any such transfer of
assets or Liabilities has not been consummated effective as of the Separation
Date, the party retaining such asset or Liability shall thereafter hold such
assets in trust for the use and benefit of the party entitled thereto (at the
expense of the party entitled thereto) and retain such Liability for the account
of the party to whom such Liability is to be assumed pursuant hereto, and take
such other actions as may be reasonably required in order to place the parties,
insofar as reasonably possible, in the same position as would have existed had
such asset been transferred, or such Liability been assumed as contemplated
hereby. As and when any such asset or Liability becomes transferable, such
transfer and assumption shall be effected forthwith. Holdings and ARAC agree
that, as of the Separation Date, each party hereto shall be deemed to have
acquired complete and sole beneficial ownership over all of the assets, together
with all of the rights, powers and privileges incidental thereto, that such
party is entitled to acquire pursuant to the terms of this Agreement.

Section 4 No Representations or Warranties; Consents. Each of the parties
hereto understands and agrees that no party hereto is, in this Agreement or in
any other agreement or document contemplated by this Agreement or otherwise,
representing or warranting in any way as to the value or freedom from
encumbrance of, or any other matter concerning, any assets of such party, or as
to the legal sufficiency to convey title to an asset transferred pursuant to
this Agreement or an Ancillary Agreement, including, without limitation, any
conveyancing or assumption instruments. It is also agreed and understood that
there are no warranties whatsoever, express or implied, given by either party to
this Agreement, as to the condition, quality, merchantability or fitness of any
of the assets, businesses or other rights transferred or retained by the
parties, as the case may be, and all such assets, businesses and other rights
shall be "as is, where is" and "with all faults" (provided that the absence of
warranties given by the parties shall not negate the allocation of Liabilities
under this Agreement and shall have no effect on any manufacturers, sellers, or
other third party warranties that are intended to be transferred with such
assets). Similarly, each party hereto understands and agrees that no party
hereto is, in this Agreement or in any other agreement or document contemplated
by this Agreement or otherwise, representing or warranting in any way that the
obtaining of any consents or approvals, the execution and delivery of any
amendatory agreements and the taking of any filings or applications contemplated
by this Agreement will satisfy the provisions of any or all applicable laws or
judgments or other instruments or agreements relating to such assets.

Notwithstanding the foregoing, the parties shall use their good faith
efforts to obtain all consents and approvals, to enter into all reasonable
amendatory agreements and to make all filings and applications contemplated by
this Agreement, and shall take all such further actions as shall be deemed
reasonably necessary to preserve for each of Holdings and ARAC, to the greatest
extent reasonably feasible, consistent with this Agreement, the economic and
operational benefits of the allocation of assets provided for in this Agreement.
In case at any time after the Separation Date any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall take all such necessary or
desirable action, provided that any financial cost shall be borne by the party
receiving the benefit of the action.

Section 5 Conveyancing and Stock Assumption Instruments. In connection
with the asset and stock transfers and the assumptions of Liabilities
contemplated by this Agreement, the parties shall execute, or cause to be
executed by the appropriate entities, conveyancing and assumption instruments,
including appropriate releases and novations, in such forms as the parties shall
reasonably agree, including deeds as may be appropriate, the assignment of
trademarks and franchise rights, and the assignment and assumption of existing
lease agreements. Any transfer of capital stock shall be effected by means of
delivery of stock certificates and executed stock powers and notation on the
stock record books of the corporations, or other legal entities involved and, to
the extent required by applicable law, by notation on public registries.

ARTICLE III

THE SEPARATION

Section 1 Cooperation Prior to the Separation.
(a) Holdings and ARAC have prepared the Form S-1 which sets forth
disclosure concerning ARAC, the Separation and other matters. Holdings and ARAC
shall each use reasonable efforts to cause the Form S-1 to become effective
under the Securities Act.

(b) Holdings and ARAC shall cooperate in preparing, filing with the
Commission and causing to become effective any registration statements or
amendments thereto that are appropriate to reflect the establishment of or
amendments to any employee benefit and other plans contemplated by the Employee
Benefits Agreement.

(c) Holdings and ARAC shall take all such action as may be necessary or
appropriate under the securities or blue sky laws of the states or other
political subdivisions of the United States in connection with the transactions
contemplated by this Agreement.

(d) ARAC has prepared and filed a preliminary listing application with
and will pursue the approval of the application to permit listing of the ARAC
Common Stock on, the New York Stock Exchange.

Section 2 Conduct of Car Rental Business Pending Separation.

(a) Prior to the Separation Date, the Car Rental Business shall be
operated by Holdings and ARAC and its subsidiaries for the sole benefit of
Holdings and its stockholder.

(b) Prior to the Separation Date, ARAC shall have no operations or
conduct any business except as a holding company for Rent A Car and Reserve
Claims Management Co. and in preparation for the consummation of the
transactions contemplated by this Agreement.

Section 3 Holdings Board Action; Conditions Precedent to the Separation.
Holdings' Board of Directors shall, in its discretion, establish any appropriate
procedures in connection with the Separation. In no event shall the Separation
occur unless the following conditions shall, unless waived by Holdings in its
sole discretion, have been satisfied:

(a) all necessary regulatory approvals and consents of third parties shall
have been received;

(b) the Form S-1 shall have been declared effective under the Securities
Act;

(d) ARAC's Board of Directors, as named in the Form S-1 shall have been
elected by Holdings, as sole stockholder of ARAC, and the ARAC Certificate
and ARAC Bylaws shall be in effect;

(e) the ARAC Common Stock shall have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance;

(f) Holdings' Board of Directors shall have formally approved the
Separation and shall not have abandoned, deferred or modified the
Separation at any time prior to the Separation Date;

(g) the transactions contemplated by Sections 2.1 and 2.2 and Article V
shall have been consummated in all material respects and each of the
Ancillary Agreements, in form and substance satisfactory to Holdings, shall
have been executed by the parties thereto and each of the transactions
contemplated by the Ancillary Agreements to be consummated on or prior to
the Separation Date shall have been consummated;

(h) no preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a government,
regulatory or administrative agency or commission, and no statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, shall be in effect preventing the consummation of the
Separation; and

(i) Holdings shall have been released from any liabilities, Guarantees or
other obligations with respect to any indebtedness or otherwise of ARAC or
its Subsidiaries;

provided, that the satisfaction of such conditions shall not create any
obligation on the part of Holdings to effect the Separation or in any way limit
Holdings' power of termination set forth in Section 7.1 or alter the
consequences of any such termination from those specified in such Section.

ARTICLE IV

INDEMNIFICATION

Section 1 ARAC Indemnification of Holdings. Except as otherwise expressly
provided in any of the Ancillary Agreements, from and after the Separation Date,
ARAC and its subsidiaries (the "ARAC Indemnitors") shall jointly and severally
indemnify, defend and hold harmless HFS, Holdings and their respective
subsidiaries, and each of their respective directors, officers, employees,
agents and Affiliates and each of the heirs, executors, successors and assigns
of any of the foregoing (the "Holdings Indemnitees") from and against any and
all damage, loss, liability and expense (including, without limitation,
reasonable expenses of investigation and reasonable attorneys' fees and expenses
in connection with any or all such investigations or any and all Actions or
threatened Actions) (collectively, "Losses") incurred or suffered by any of the
Holdings Indemnitees and arising out of or related to the ARAC Liabilities.
Losses shall include but not be limited to: (i) all amounts required to be
reimbursed to an insurer for insurance proceeds previously paid by such insurer
as a result of a Loss; (ii) all deductible amounts required to be paid under any

insurance policybefore coverage attaches for a Loss; (iii) all amounts paid to
third parties in excess of insurance coverage; (iv) all other amounts not paid
by insurers in connection with Losses; and (v) the cost of any action against
insurers to obtain insurance coverage. Notwithstanding the foregoing, Losses
shall not include expenditures made prior to the Separation.

Section 2 Holdings Indemnification of ARAC. Except as otherwise expressly
provided in any of the Ancillary Agreements, from and after the Separation Date,
Holdings and its subsidiaries (the "Holdings Indemnitors") shall indemnify,
defend and hold harmless ARAC and its subsidiaries, and each of their respective
directors, officers, employees, agents and Affiliates and each of the heirs,
executors, successors and assigns of any of the foregoing (the "ARAC
Indemnitees") from and against any and all Losses incurred or suffered by any of
the ARAC Indemnitees and arising out of or related to the Holdings Liabilities.

Section 3 Notice and Payment of Claims. If any Holdings Indemnitee or
ARAC Indemnitee (the "Indemnified Party") determines that it is or may be
entitled to indemnification by the ARAC Indemnitors or the Holdings Indemnitors,
as the case may be (the "Indemnifying Party"), under this Article IV (other than
in connection with any Action subject to Section 4.4), the Indemnified Party
shall deliver to the Indemnifying Party a written notice specifying, to the
extent reasonably practicable, the basis for its claim for indemnification and
the amount for which the Indemnified Party reasonably believes it is entitled to
be indemnified. After the Indemnifying Party shall have been notified of the
amount for which the Indemnified Party seeks indemnification, the Indemnifying
Party shall, within 30 days after receipt of such notice, either (i) pay the
Indemnified Party such amount in cash or other immediately available funds (or
reach agreement with the Indemnified Party as to a mutually agreeable
alternative payment schedule) or (ii) object to the claim for indemnification or
the amount thereof by giving the Indemnified Party written notice setting forth
the grounds therefor. Any objection shall be resolved in accordance with Section
7.13. If the Indemnifying Party does not give such notice within such 30-day
period, the Indemnifying Party shall be deemed to have acknowledged its
liability for such claim and the Indemnified Party may exercise any and all of
its rights under applicable law to collect such amount.

Section 4 Notice and Defense of Third-Party Claims. Promptly following
the earlier of (A) receipt of written notice of the commencement by a third
party of any Action against or otherwise involving any Indemnified Party or (B)
receipt of written information from a third party alleging the existence of a
claim against an Indemnified Party, in either case, with respect to which
indemnification may be sought pursuant to this Agreement (a "Third-Party
Claim"), the Indemnified Party shall give the Indemnifying Party prompt written
notice thereof. The failure of the Indemnified Party to give notice as provided
in this Section 4.4 shall not relieve the Indemnifying Party of its obligations
under this agreement, except to the extent that the Indemnifying Party is
prejudiced by such failure to give notice. Such notice shall describe the
Third-Party Claim in reasonable detail and shall indicate the amount of the Loss
that has been or will be sustained by the Indemnified Party.

(a) Within 30 days after receipt of such notice, the Indemnifying Party may
by giving written notice thereof to the Indemnified Party, (i) acknowledge
liability for and at its option elect to assume the defense of such Third-Party
Claim at its sole cost and expense or (ii) object to the claim of
indemnification for such Third-Party Claim setting forth the grounds therefor.
Any objection shall be resolved in accordance with Section 7.13. If the
Indemnifying Party does not within such 30-day period give the Indemnified Party
such notice, the Indemnifying Party shall be claimed to have acknowledged its
liability for such Third-Party Claim.

(b) Any defense of a Third-Party Claim as to which the Indemnifying Party
has elected to assume the defense shall be conducted by attorneys employed by
the Indemnifying Party and reasonably satisfactory to Holdings in the case of
Holdings Indemnitees and ARAC in the case of ARAC Indemnitees. The Indemnified
Party shall have the right to participate in such proceedings and to be
represented by attorneys of its own choosing at the Indemnified Party's sole
cost and expense; provided that if the defendants or parties against which
relief is sought in any such claim include both the Indemnifying Party and one
or more Indemnified Parties and, in the reasonable judgment of Holdings in the
case of Holdings Indemnitees and ARAC in the case of ARAC Indemnitees, a
conflict of interest between such Indemnified Parties and such Indemnifying
Party exists in respect of such claim, such Indemnified Parties shall have the
right to employ one firm of counsel selected by Holdings for Holdings
Indemnities or ARAC for ARAC Indemnities and in that event the reasonable fees
and expenses of such separate counsel (but not more than one separate counsel
reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party.

(c) If the Indemnifying Party assumes the defense of a Third-Party Claim,
the Indemnifying Party may settle or compromise the claim without the prior
written consent of the Indemnified Party; provided that without the prior
written consent of Holdings in the case of Holdings Indemnitees and ARAC in the
case of ARAC Indemnitees, the Indemnifying Party may not agree to any such
settlement unless as a condition to such settlement the Indemnified Party
receives a written release from any and all liability relating to such
Third-Party Claim and such settlement or compromise does not include any remedy
or relief to be applied to or against the Indemnified Party, other than monetary
damages for which the Indemnifying Party shall be responsible hereunder.

(d) If the Indemnifying Party does not assume the defense of a Third-Party
Claim for which it has acknowledged liability for indemnification under this
Article IV, Holdings in the case of Holdings Indemnitees and ARAC in the case of
ARAC Indemnitees may pursue the defense of such Third-Party Claim and choose one
firm of counsel in connection therewith. The Indemnifying Party is required to
reimburse Holdings or ARAC, as the case may be, on a current basis for its
reasonable expenses of investigation, reasonable attorney's fees and reasonable
out-of-pocket expenses incurred by Holdings in the case of Holdings Indemnitees
and ARAC in the case of ARAC Indemnitees in defending against such Third-Party
Claim and the Indemnifying Party shall be bound by the result obtained with
respect thereto, provided that the Indemnifying Party shall not be liable for
any settlement effected without the consent of the Indemnifying Party, which
consent shall not be unreasonably withheld.

(e) The Indemnifying Party shall pay to the Indemnified Party in cash the
amount for which the Indemnified Party is entitled to be indemnified (if any) no
later than the later of (i) the date on which the Indemnified Party makes any
payment in satisfaction (partial or otherwise) of the Third-Party Claim or (ii)
the date on which such Indemnifying Party's objection, if any, to its
responsibility for indemnification under this Article IV has been resolved
pursuant to section 7.13 or by settlement or compromise or the final
nonappealable judgment of a court of competent jurisdiction.

Section 5 Insurance Proceeds. The amount that any Indemnifying Party is
or may be required to pay to any Indemnified Party pursuant to this Article IV
shall be reduced (including, without limitation, retroactively) by any insurance
proceeds or other amounts actually recovered by or on behalf of such Indemnified
Parties in reduction of the related Loss. If an Indemnified Party shall have
received the payment required by this Agreement from an Indemnifying Party in
respect of a Loss and shall subsequently actually receive insurance proceeds, or
other amounts in respect of such Loss as specified above, then such Indemnified
Party shall pay to such Indemnifying Party a sum equal to the amount of such

insurance proceeds or other amounts actually received after deducting therefrom
all of the Indemnifying Party's costs and expenses associated with such Loss.

Section 6 Contribution. If the indemnification provided for in this
Article IV is unavailable to an Indemnified Party in respect of any Loss arising
out of or related to information contained in or omitted from the Form S-1, then
the ARAC Indemnitees, in lieu of indemnifying the Holdings Indemnitees, shall
contribute to the amount paid or payable by the Holdings Indemnitees as a result
of such Loss in such proportion as is appropriate to reflect the relative fault
of ARAC, on the one hand, and Holdings, on the other hand, in connection with
the statements or omissions which resulted in such Loss. The relative fault of
the ARAC Indemnitees on the one hand and of the Holdings Indemnitees on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information concerning ARAC on the
one hand or Holdings on the other hand.

Section 7 Subrogation. In the event of payment by an Indemnifying Party
to any Indemnified Party in connection with any Third-Party Claim, such
Indemnifying Party shall be subrogated to and shall stand in the first place of
such Indemnified Party as to any events or circumstances in respect of which
such Indemnified Party may have any right or claim relating to such Third-Party
Claim. Such Indemnified Party shall cooperate with such Indemnifying Party in a
reasonable manner, and at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right or claim.

Section 8 No Third-Party Beneficiaries. This Article IV shall inure to
the benefit of, and be enforceable by Holdings, the Holdings Indemnitees, ARAC
and the ARAC Indemnitees and their respective successors and permitted assigns.
The indemnification provided for by this Article IV shall not inure to the
benefit of any other third party or parties and shall not relieve any insurer
who would otherwise be obligated to pay any claim of the responsibility with
respect thereto or, solely by virtue of the indemnification provisions hereof,
provide any subrogation rights with respect thereto and each party agrees to
waive such rights against the other to the fullest extent permitted.

Section 9 Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnified Party of
any other rights or the seeking of any and all other remedies against an
Indemnifying Party. The procedures set forth in this Article IV, however, shall
be the exclusive procedures governing any indemnity action brought under this
Article IV or otherwise relating to Losses.

Section 10 Survival of Indemnities. The obligations of each of Holdings
and ARAC under this Article IV shall survive the sale or other transfer by it of
any assets or businesses or the assignment by it of any Liabilities, with
respect to any Loss of the other related to such assets, businesses or
Liabilities.

Section 11 After-Tax Indemnification Payments. Except as otherwise
expressly provided herein or in an Ancillary Agreement, indemnification payments
made by either party under this Article shall give effect to, and be reduced by
the value of, any and all applicable deductions, losses, credits, offsets or
other items for Federal, state or other tax purposes attributable to the payment
of the indemnified liability by the Indemnified Party.

ARTICLE V

CERTAIN ADDITIONAL MATTERS

Section 1 Intercompany Payables/Receivables. All intercompany amounts
payable or receivable by Holdings or ARAC shall be settled on or before the
Separation Date, other than amounts payable or receivable pursuant to the
Ancillary Agreements.

Section 2 Ancillary Agreements. On the date hereof, Holdings and ARAC shall
execute and deliver the Ancillary Agreements.

Section 3 ARAC Officers and Board of Directors. On or prior to the
Separation Date, Holdings shall take and shall cause ARAC to take all actions
necessary to appoint as officers and directors of ARAC those persons named in
the Form S-1 to constitute the officers and directors of ARAC on the Separation
Date.

Section 4 ARAC Certificate of Incorporation and By-laws. Prior to the
Separation Date, Holdings shall take all action necessary to cause the
certificate of incorporation and by-laws of ARAC to be amended and restated
substantially in the form attached to the Form S-1 as exhibits thereto.

Section 5 Credit Facilities. (a) Prior to the Separation Date, Holdings
and ARAC shall take all necessary action to replace the existing credit
facilities and fleet financing arrangements so as to release Holdings from any
liability or obligation with respect thereto from and after the Separation Date.

(b) Prior to the Separation Date, Holdings and ARAC shall take all
necessary action to obtain the Fleet Financing Program and the New Credit
Facilities.

(c) Prior to the Separation Date, ARAC and its subsidiaries shall take
all necessary action to release Holdings from any liabilities, Guarantees, or
other obligations with respect to indebtedness or other obligations of ARAC or
its subsidiaries, other than the obligations under the Ancillary Agreements.

Section 6 Insurance Policies and Claims Administration.

(a) Maintenance of Insurance Coverage Prior to Separation Date. Holdings
and ARAC shall use reasonable efforts to maintain in full force and effect at
all times up to and including the Separation Date its current property and
casualty insurance programs, including, without limitation, primary and excess
general liability, automobile, workers' compensation, property and crime
insurance policies (collectively, the "Policies" and individually, a "Policy").
Holdings and its subsidiaries shall retain with respect to any Covered Claims as
set forth on Schedule 5.6(a) relating to periods prior to the Separation Date
all of their respective rights, benefits and privileges, if any, under such
Policies. To the extent not already provided for by the terms of a Policy,
Holdings shall use reasonable efforts to cause ARAC and its subsidiaries, as
appropriate, to be named as additional insureds under such Policy in respect of
Covered Claims arising or relating to periods prior to the Separation Date;
provided, however, that nothing contain herein shall be construed to require
Holdings or any of its subsidiaries to pay any additional premium or other
charges in respect to, or waive or otherwise limit any of its rights, benefits
or privileges under, any such Policy to effect the naming of ARAC and its
subsidiaries as such additional insureds.

(b) ARAC Responsible for Establishing Insurance Coverage On and After
Separation Date. Commencing on and as of the Separation Date, ARAC and each of
its subsidiaries shall be responsible for establishing and maintaining its own
separate insurance programs (including, without limitation, primary and excess
general liability, automobile, workers, compensation, property, director and
officer liability, fire, crime, surety and other similar insurance policies) for
activities and claims relating to any period on or after the Separation Date
involving ARAC or any of its subsidiaries. Notwithstanding any other agreement
or understanding to the contrary, except as set forth in Section 5.6(c) with
respect to claims administration and financial administration of the Policies,
neither Holdings nor any of its subsidiaries shall have any responsibility for
or obligation to ARAC or its subsidiaries relating to liability and casualty
insurance matters for any period, whether prior to, at or after the Separation
Date.

(c) Administration and Procedure. (i) ARAC or a subsidiary of ARAC, as
appropriate, shall be responsible for the claims administration and financial
administration of all Policies for Covered Claims relating to the assets,
ownership or operation prior to the Separation Date of the Car Rental Business;
provided, however, that such retention by ARAC of the Policies and the
responsibility for claims administration and financial administration of the
Policies are in no way intended to limit, inhibit or preclude any right to
insurance coverage for any Covered Claims under the Policies by Holdings. ARAC
or a subsidiary thereof, as appropriate, shall be responsible for all
administrative and financial matters relating to insurance policies established
and maintained by ARAC and its subsidiaries for claims relating to any period on
or after the Separation Date involving ARAC or any of its subsidiaries.

(ii) ARAC shall notify Holdings of any Covered Claim relating to ARAC or a
subsidiary thereof under one or more of the Policies relating to a period prior
to the Separation Date, and ARAC agrees to cooperate and coordinate with
Holdings concerning any strategy Holdings may reasonably elect to pursue to
secure coverage and payment for such Covered Claim by the appropriate insurance
carrier. Notwithstanding anything contained herein, in any other agreement or
applicable Policy or any understanding to the contrary, ARAC or an appropriate
subsidiary thereof assumes responsibility for, and shall pay to the appropriate
insurance carriers or otherwise, any premiums, retrospectively-rated premiums,
defense costs, indemnity payments, deductibles, retentions or other charges, as
appropriate (collectively, "Insurance Charges"), whenever arising, which shall
become due and payable under the terms and conditions of any applicable Policy
in respect of any liabilities, losses, claims, actions or occurrences, whenever
arising or becoming known, involving or relating to any of the assets,
businesses, operations or liabilities of ARAC or any of its subsidiaries, to the
extent set forth in Section 5.6(a) and any such charges that relate to the
period after the Separation Date. To the extent that the terms of any applicable
Policy provide that Holdings or a subsidiary thereof, as appropriate, shall have
an obligation to pay or guarantee the payment of any Insurance Charges, Holdings
or such subsidiary shall be entitled to demand that ARAC or a subsidiary thereof
make such payment directly to the person or entity entitled thereto. In
connection with any such demand, Holdings shall submit to ARAC or a subsidiary
thereof a copy of any invoice received by Holdings or a subsidiary pertaining to
such Insurance Charges, together with appropriate supporting documentation, if
available. In the event that ARAC or its subsidiary fails to pay any Insurance
Charges when due and payable, whether at the request of the party entitled to
payment or upon demand by Holdings or a subsidiary of Holdings, Holdings or a
subsidiary of Holdings may (but shall not be required to) pay such Insurance
Charges for and on behalf of ARAC or its subsidiary and, thereafter, ARAC or its
subsidiary shall forthwith reimburse Holdings or such subsidiary of Holdings for
such payment.

ARTICLE VI

ACCESS TO INFORMATION

Section 1 Provision of Corporate Records. Each of Holdings and ARAC shall
arrange as soon as practicable following the Separation Date for the provision
to the other of existing corporate governance documents (e.g. minute books,
stock registers, stock certificates, documents of title, etc.) in its possession
relating to the other or to its business and affairs.

Section 2 Access to Information. From and after the Separation Date, each
of Holdings and ARAC shall afford the other, including its accountants, counsel
and other designated representatives, reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to all records, books,
contracts, instruments, computer data and other data and information in such
party's possession relating to the business and affairs of the other (other than
data and information subject to an attorney/client or other privilege), insofar
as such access is reasonably required by the other party including, without
limitation, for audit, accounting and litigation purposes, as well as for
purposes of fulfilling disclosure and reporting obligations.

Section 3 Litigation Cooperation. Each of Holdings and ARAC shall use
reasonable efforts to make available to the other, upon written request, its
officers, directors, employees and agents as witnesses to the extent that such
persons may reasonably be required in connection with any legal, administrative
or other proceedings arising out of the business of the other prior to the
Separation Date in which the requesting party may from time to time be involved.

Section 4 Reimbursement. Each party providing witnesses under Section 6.3
to the other shall be entitled to receive from the recipient, upon the
presentation of invoices therefor, payment for all out-of-pocket costs and
expenses as may be reasonably incurred in providing such witnesses.

Section 5 Retention of Records. Except as otherwise required by law or
agreed to in writing, each party shall, and shall cause each of its respective
subsidiaries to, retain all information relating to the other party's business
in accordance with the past practice of such party. Notwithstanding the
foregoing, except as provided in the Tax Disaffiliation Agreement, any party may
destroy or otherwise dispose of any information at any time, providing that,
prior to such destruction or disposal, (a) such party shall provide no less than
30 days prior written notice to the other party, specifying the information
proposed to be destroyed or disposed of and (b) if the recipient of such notice
shall request in writing prior to the scheduled date for such destruction or
disposal that any of the information proposed to be destroyed or disposed of be
delivered to such requesting party, the party proposing the destruction or
disposal shall promptly arrange for the delivery of such of the information as
was requested at the expense of the requesting party.

Section 6 Confidentiality. Each party shall hold and shall cause its
directors, officers, employees, agents, consultants and advisors to hold, in
strict confidence, unless compelled to disclose by judicial or administrative
process or, in the opinion of its counsel, by other requirements of law, all
information (other than any such information relating solely to the business or
affairs of such party) concerning the other party (except to the extent that
such information can be shown to have been (a) in the public domain through no
fault of such party, (b) later lawfully acquired on a non-confidential basis
from other sources by the party to which it was furnished, (c) information that
typically would have been disclosed by Holdings or ARAC, as

the case may be, in the ordinary course of business consistent with past
practice or (d) information that may be disclosed pursuant to any Ancillary
Agreement). Neither party shall release or disclose any such information to any
other person, except its auditors, attorneys, financial advisors, bankers and
other consultants and advisors who shall be advised of and agree to comply with
the provisions of this Section 6.6; provided, that with respect to the matters
identified on Schedule 6.6 hereof, no information may be disclosed by either
party under any circumstance without the prior written consent of the other
party hereto.

Section 7 Mail. After the Separation Date, each of Holdings and ARAC may
receive mail, telegrams, packages and other communications property belonging to
the other. Accordingly, at all times after the Separation Date, each of Holdings
and ARAC authorizes the other to receive and open all mail, telegrams, packages
and other communications received by it and not unambiguously intended for the
other party or any of the other party's officers or directors specifically in
their capacities as such, and to retain the same to the extent that they relate
to the business of the receiving party or, to the extent that they do not relate
to the business of the receiving party and do relate to the business of the
other party, or to the extent that they relate to both businesses, the receiving
party shall promptly contact the other party by telephone for delivery
instructions and such mail, telegrams, packages or other communications (or, in
case the same relate to both businesses, copies thereof) shall promptly be
forwarded to the other party in accordance with its delivery instructions. The
foregoing provisions of this Section 6.7 shall constitute full authorization to
the postal authorities, all telegraph and courier companies and all other
persons to make deliveries to Holdings or ARAC, as the case may be, addressed to
either of them or to any of their officers or directors specifically in their
capacities as such. The provisions of this Section 6.7 are not intended to and
shall not be deemed to constitute an authorization by either Holdings or ARAC to
permit the other to accept service of process on its behalf, and neither party
is or shall be deemed to be the agent of the other for service of process
purposes or for any other purpose.

ARTICLE VII

MISCELLANEOUS

Section 1 Termination. This Agreement may be terminated and the
Separation deferred, modified or abandoned at any time prior to the Separation
Date by and in the sole discretion of the Board of Directors of Holdings without
the approval of ARAC. In the event of such termination, no party shall have any
liability to any other party pursuant to this Agreement.

Section 2 Expenses. Except as specifically provided in this Agreement or
in an Ancillary Agreement, all costs and expenses incurred in connection with
the interpretation, execution, delivery and implementation of this Agreement and
with the consummation of the transactions contemplated by this Agreement shall
be paid by the party incurring the expense. The determination of who has
incurred an expense shall be made by the Chief Financial Officer of Holdings or
HFS, which determination shall be binding and final upon each of the parties
hereto and not subject to further review. In addition, it is understood and
agreed that ARAC shall pay the legal, filing, accounting, printing and other
out-of-pocket expenditures in connection with (i) the preparation, printing and
filing of the Form S-1, (ii) obtaining the Fleet Financing Program and (iii)
obtaining the New Credit Facilities.

Section 3 Notices. All notices and communications under this Agreement
shall be in writing and any communication or delivery hereunder shall be deemed
to have been duly given when received addressed as follows:

If to Holdings, to:

HFS Car Rental, Inc.
c/o HFS Incorporated
▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇

If to ARAC, to:

Avis Rent A Car, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇

Any party may, by written notice so delivered to the other parties, change the
address to which delivery of any notice shall thereafter be made.

Section 4 Amendment and Waiver. This Agreement may not be altered or
amended, nor may rights hereunder be waived, except by an instrument in writing
executed by the party or parties to be charged with such amendment or waiver. No
waiver of any terms, provision or condition of or failure to exercise or delay
in exercising any rights or remedies under this Agreement, in any one or more
instances shall be deemed to be, or construed as, a further or continuing waiver
of any such term, provision, condition, right or remedy or as a waiver of any
other term, provision or condition of this Agreement.

Section 5 Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same Agreement.

Section 6 Governing Law; Jurisdiction; Forum. This Agreement shall be
construed in accordance with, and governed by, the laws of the State of New
York, without regard to the conflicts of law rules of such state. Each party
hereto expressly submits and consents in advance to the non-exclusive
jurisdiction of the State and Federal courts sitting in the City of New York,
Borough of Manhattan, State of New York, in any action to enforce an arbitration
agreement or award, or action seeking a pre-arbitral injunction, pre-arbitral
attachment or other order in aid of arbitration, and hereby waives any claim
that any such state or federal court is an inconvenient or improper forum.

Section 7 Entire Agreement. This Agreement including the schedules
hereto, together with the Ancillary Agreements, constitute the entire
understanding of the parties hereto with respect to the subject matter hereof,
superseding all negotiations, prior discussions and prior agreements and
understandings relating

to such subject matter. To the extent that the provisions of this Agreement are
inconsistent with the provisions of any Ancillary Agreements, the provisions of
such Ancillary Agreement shall prevail.

Section 8 Parties in Interest. Neither of the parties hereto may assign
its rights or delegate any of its duties under this Agreement without the prior
written consent of each other party. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns. Nothing contained in this Agreement, express
or implied, is intended to confer any benefits, rights or remedies upon any
person or entity other than Holdings and ARAC, and Holdings Indemnitees and ARAC
Indemnitees under Article IV hereof.

Section 9 Tax Disaffiliation Agreement. Notwithstanding any other
provision of this Agreement to the contrary, any and all matters relating to
Taxes shall be exclusively governed by the Tax Disaffiliation Agreement.

Section 10 Further Assurances and Consents. In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto will use its reasonable efforts to (i) execute and deliver such further
instruments and documents and take such other actions as any other party may
reasonably request in order to effectuate the purposes of this Agreement and to
carry out the terms hereof and (ii) take, or cause to be taken, all actions, and
to do, or cause to be done, all things, reasonably necessary, proper or
advisable under applicable laws, regulations and agreements or otherwise to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, using its reasonable efforts to obtain any
consents and approvals and to make any filings and applications necessary or
desirable in order to consummate the transactions contemplated by this
Agreement; provided that no party hereto shall be obligated to pay any
consideration therefor (except for filing fees and other similar charges) to any
third party from whom such consents, approvals and amendments are requested or
to take any action or omit to take any action if the taking of or the omission
to take such action would be unreasonably burdensome to the party or its
business.

Section 11 Exhibits and Schedules. The Exhibits and Schedules shall be
construed with and as an integral part of this Agreement to the same extent as
if the same had been set forth verbatim herein.

Section 12 Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

Section 13 Dispute Resolution. (a) Resolution of any and all disputes
arising out of or relating to this Agreement or any of the Ancillary Agreements,
whether based on contract, tort, statute or otherwise, including, but not
limited to, disputes over arbitrability (collectively, "Disputes") shall be
exclusively governed by and settled in accordance with the provisions of this
Section 7.13; provided, however, that nothing contained herein shall preclude
either party from seeking or obtaining (a) injunctive relief or (b) equitable or
other judicial relief to enforce the provisions hereof or to preserve the status
quo pending resolution of Disputes hereunder.

(b) Holdings or ARAC (each a "Party") may commence proceedings hereunder
by delivering a written notice to the other Party providing a reasonable
description of the Dispute to the other (the "Demand").

(c) Within 10 days following receipt by a Party of a Demand, the Dispute
shall be referred to representatives of the parties for resolution, each party
being represented by a senior executive officer who has no direct operational
responsibility for the matters contemplated by this Agreement (the
"Representatives"). The Representatives shall promptly meet in a good faith
effort to resolve the Dispute. If the Representatives do not agree upon a
resolution within thirty (30) calendar days after receipt by a Party of a
Demand, each of Holdings and ARAC shall be free to exercise the remedies
available to them under Section 7.13(d).

(d) The Parties hereby agree to submit all Disputes not resolved by
negotiation pursuant to Section 7.13(c) for resolution by arbitration under the
terms hereof, which arbitration shall be final, conclusive and binding upon the
parties, their successors and assigns. Except as expressly provided otherwise in
this Agreement, the arbitration shall be conducted in New York, New York by
three arbitrators (the "Panel") in accordance with the JAMS/Endispute
Comprehensive Arbitration Rules and Procedures then in effect as amended herein.
The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
ss. 1, et seq. Notwithstanding the foregoing (a) each Party shall have the right
to examine the books and records of the other Party that are reasonably related
to the Dispute; (b) each Party shall provide to the other, reasonably in advance
of any hearing, copies of all documents which a Party intends to present in such
hearing; (c) each party shall be allowed to conduct reasonable discovery through
written requests for information, document requests, requests for stipulation of
fact, and depositions, the nature and extent of which discovery shall be
determined by the Panel, taking into account the needs of the Parties and the
desirability of making discovery expeditious and cost effective. The Panel shall
complete all hearings not later than ninety (90) days after its appointment. The
award shall be in writing and shall specify the facts and law on which it is
based. The arbitrators shall not be empowered to award to any party any
consequential damages, lost profits or punitive damages in connection with any
Dispute and each party hereby irrevocably waives any right to recover such
damages. Judgment upon any award may be entered in any court having jurisdiction
thereof.

Section 14 Titles and Headings. Titles and headings to sections herein
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement on the day and year first above written.

HFS CAR RENTAL, INC.

y:__________________
Name
Title:

AVIS RENT A CAR, INC.

By:____________________

Name:

Title:

Schedule 1

AVIS RENT A CAR, INC.
SUBSIDIARIES

Avis Rent A Car, Inc. f/k/a
Delaware
Rental Car System Holdings, Inc.

Subsidiaries (100% owned):

Avis Rent A Car System, Inc. - Delaware

Subsidiaries (100% owned):

1.Avis International, Ltd. - Delaware

Subsidiaries (100% owned):

( a ) Avis Management Pty. Limited - Australia

Subsidiary (100% owned):

-We Try Harder Pty. Limited - Australia

-Chaconne Pty. Limited - Australia

-W.T.H. Pty. Limited - Australia

Subsidiaries:

-Auto Accident Consultants Pty. Limited - Australia
(100% owned)

-W.T.H. Fleet Leasing Pty. Limited - Australia
(ownership shared with parent)

-Avis Services Pty. Ltd. - Australia
(100% owned)

( b ) Avis Management Services, Limited - Delaware

( c ) Arbitra S.A. - Argentina

( d ) Avis Caribbean, Limited - Delaware

Subsidiaries (100% owned):

-Avis Rent A Car de Puerto Rico, Inc. - Puerto Rico

-Virgin Islands Enterprises, Inc. - Virgin Islands

( e ) Avis Asia and Pacific, Limited - Delaware

Subsidiary (100% owned)

-Avis Rent A Car Limited - New Zealand
subsidiary (100% owned)

- Altra Auto Rental Limited - New Zealand

( f ) WTH Canada, Inc. - Canada

Subsidiary (100% owned):

-Aviscar Inc. - Canada
subsidiary ( 100% owned)

- Avis Services Canada, Inc. - Canada

( g ) Avis Rent A Car (Hong Kong) Ltd. - Hong Kong

Subsidiaries (less than 100% owned):

National Car Rentals (Private) Limited (29% owned)* Singapore

Sistem Sewa Kereta Malaysia Sdn. Bhd. (25% owned)* Malaysia

-----------
*By agreement with Avis Europe Limited ("AEL"), shares in these companies
will be transferred to AEL as soon as the other shareholders consent to such
transfer.

Avis International, Ltd.

Subsidiaries (less than 100% owned):

West Indies Car Rental Limited (49% owned) - Jamaica

2. Avis Enterprises, Inc. f/k/a Avis Leasing Corporation - Delaware

Subsidiaries (100% owned)

( a) Avis Service, Inc. - Delaware

( b ) Avis Lube, Inc. - Delaware

3. Pathfinder Insurance Company - Colorado

4. PF Claims Management, Ltd. - Delaware

5. Avis Leasing Corporation - Delaware

6. Zam, Inc. - West Virginia

7. Global Excess & Reinsurance Ltd. - Bermuda

8. Constellation Reinsurance Company Limited - Barbados

9. We Try Harder Japan Co., Ltd. - ▇▇▇▇▇

▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇.▇. - ▇▇▇▇▇▇

▇▇. Avis Rent A Car Limited - Fiji

12. Avis Rent A Car Sdn. Bhd. - Malaysia

13. Avis Rent A Car Sdn. Bhd.- Singapore

14. Avis Rent A Car Limited - Vanuatu

Avis Rent A Car, Inc. f/k/a
Rental Car System Holdings, Inc.

Subsidiaries (less than 100% owned):

Reserve Claims Management Co. f/k/a Avis Leasing - Delaware
International, Ltd.

JOINT VENTURES

Sistem Sewa Kereta Malaysia Sdn. Bhd.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Malaysia

Capitalization: Authorized: 5,000,000
Issued: 2,000,000

Shareholders: Avis Rent A Car (Hong Kong) Ltd.
25%
Melewar Leisure Sdn. Bhd.
75%

West Indies Car Rental Ltd.
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇

Capitalization Authorized: 100,000 shares at $0.10
Issued: 100,000 shares Jamaican

Shareholders: Hilsons Limited: 50,000
Avis International, Ltd. 49,000
▇▇▇▇▇ ▇▇▇▇▇▇ Mais, Esq. 1,000

National Car Rentals (Private) Limited
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ 0409

Capitalization Authorized: 900,000 ordinary shares at $1.00
Issued: 810,000

Shareholders: Avis Rent A Car (Hong Kong) Ltd. 234,000
Goodwood Hotels Corporation (Pte) Ltd. 180,000
▇▇▇▇▇▇ ▇▇▇ Pte. Ltd. 63,000
Straits Steamship Co. Ltd. 333,000

Schedule 2

TERRITORIES OF OTHER SYSTEM LICENSEES

AVIS RENT A CAR SYSTEM, INC.
FRANCHISED LICENSEE LOCATIONS
REVISED 7/1/97

"1955" Type Franchise Agreements 292
"1992" Type Franchise Agreements 17
Letter Agreements (1955) Type 3
Agency Agreements (1955) Type 1
"1955" Type Truck Franchise Agreements 134

CITY-STATE ........... DATE TYPE
-------------- ------ ------
1 Birmingham, AL ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ ... Nov-69 C
Tuscaloosa, AL . ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ ... ▇▇▇-▇▇ ▇
▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ Apr-56 B
Decatur, AL .... Feb-64 B
Florence, AL ... ▇▇▇-▇▇ ▇
▇ ▇▇▇▇▇▇, ▇▇ May-63 C
Point Clear, AL .. ▇▇▇-▇▇ ▇
▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ Oct-51 B
Columbia, SC ... Oct-59 B
Camden, SC ..... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇/▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ . ▇▇▇-▇▇ ▇
▇▇▇▇▇, ▇▇ ...... May-96 New Agreement

CITY-STATE ............ DATE TYPE
---------- ------ -------------
Greenwood, SC ... May-96 ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇, ▇▇ ... May-68 B
Fayetteville, AR Oct-70 C
Fort ▇▇▇▇▇, AR .. ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ .... Jun-75 C
Hot Springs, AR . Jan-62 B
Jonesboro, AR ... Dec-61 C
Pine Bluff, AR .. Dec-55 B
Stuttgart, AR ... Nov-56 C
Texarkana, AR ... May-72 C
Savannah, GA .... Jan-87 B
Midland, TX ..... Dec-90 B
Abilene, TX ..... Dec-90 B
San Angelo, TX .. Dec-90 C
Clovis, NM ...... Dec-90 C
Albany, GA ...... ▇▇▇-▇▇ ▇
▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ Jan-53 C
Arcadia, CA ..... Oct-79 C
Alhambra, CA .... Oct-79 C
Azusa, CA ....... Oct-79 C
Bakersfield, CA . Oct-78 B
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇, ▇▇ ...... Aug-76 C
Burbank, CA ..... Jan-56 C
Coronado, CA .... May-56 C
Culver City, CA . Jun-61 C

CITY-STATE ............. DATE TYPE
------------------------ ------ ----
Disneyland, CA ... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ ..... May-56 C
Glendora, CA ..... Oct-79 C
Imperial, CA ..... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ .... Jan-56 C
Lennox, CA ....... Dec-77 C
Long Beach, CA ... Jan-56 C
Marina Del Rey, CA Feb-78 C
Monrovia, CA ..... Oct-79 C
Montebello, CA ... Oct-79 C
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ .... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇, ▇▇ ....... ▇▇▇-▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ .. ▇▇▇-▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ . May-56 C
Pasedena, CA ..... Jan-56 C
Pico Rivera, CA .. Oct-79 C
Ridgecrest, CA ... Sep-72 B%
San Diego, Ca .... Jan-56 C
Santa Barbara, CA Jan-56 C
Santa Monica, CA . ▇▇▇-▇▇ ▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ... Jun-61 C
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇ ..... Nov-67 C
Ventura, CA ...... Mar-61 C
▇▇▇▇▇▇, CA ....... Jun-61 C
Victorville, CA .. Sep-72 B

CITY-STATE .......... DATE TYPE
--------------------- ------ -----
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ .. Oct-79 C
Yuma, AZ ...... Jul-80 B
Las Vegas, NV . Jan-56 B
Barstow, CA ... ▇▇▇-▇▇ ▇
▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ Jul-93 C
▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ . ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ May-68 C
Dubuque, IA ... Jan-75 C
Waterloo, IA .. May-78 C
Peoria, IL .... Jan-87 B
Bloomington, IL Jan-87 C
Champaign, IL . Jan-87 B
Decatur, IL ... Jan-87 B
Pekin, IL ..... Jan-87 C
Springfield, IL Jan-87 B
Danville, IL .. Jan-87 B
17 Dex Moines, IA ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ May-90 C
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇

▇▇▇▇-▇▇▇▇▇ .............. DATE TYPE
----------------- ------ -------------
20 ▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇, ▇▇ .......... Dec-96 C
Great Bend, KS .... Feb-96 C
Independence, KS .. Dec-95 New Agreement
Topeka, KS ........ ▇▇▇-▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ..... ▇▇▇-▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ Aug-85 C
Liberal, KS ....... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ..... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ ...... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ Aug-54 B
Monroe, LA ........ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇, ▇▇ Aug-71 C
Salt Ste. ▇▇▇▇▇, MI ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇, ▇▇ Apr-56 C
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ Jun-60 C
29 Kalamazoo, MI Feb-72 C
▇▇▇▇▇▇, MI ........ Aug-76 C
Traverse City, MI . ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇, ▇▇ Aug-89 C
Charlevoix, MI .... Jun-91 C
Gaylord, MI ....... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇, ▇▇ Jan-65 B
Rhinelander, WI ... May-85 C

CITY-STATE .................. DATE TYPE
--------------- ------ -------------
International Falls, MN Apr-95 New Agreement
Bemidji, MN ........... Apr-95 New Agreement
Hibbing, MN ........... Apr-95 New Agreement
Eveleth, MN ........... Apr-95 New Agreement
Marquette, MI ......... Jun-96 New Agreement
Brainerd, MN .......... ▇▇▇-▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ Dec-60 B
Stevens Point, WI ..... Aug-81 C
Eau Claire, WI ........ Aug-81 C
Land O'Lakes, WI ...... Aug-81 C
Marshfield, WI ........ Aug-81 C
Wausau, WI ............ Aug-81 C
▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ........... Apr-78 C
Joplin, MO ............ May-84 C
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇, ▇▇ ............ Jan-90 C
Glacier Park, MT ...... May-94 C
Great Falls, MT ....... May-94 C
▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇, ▇▇ ............ Jul-87 C
▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ......... Sep-89 C
Billings, MT .......... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ........... Apr-78 C

CITY-STATE DATE TYPE
----------------------- ----- ------------------
Nashua, NH ....... ▇▇▇-▇▇ ▇
▇▇▇▇▇, ▇▇ ........ Jun-76 C
Brattleboro, VT .. ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ .... May-82 Letter Agreement
Laconia, NH ...... Oct-82 Letter Agreement
Keene, NH ........ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇, ▇▇ Nov-64 B
Freehold, NJ ..... Oct-60 B
Lakewood, NJ ..... Oct-60 B
Point Pleasant, NJ Oct-60 B
Port Monmouth, NJ Nov-64 B
Sayreville, NJ ... Dec-62 B
Toms River, NJ ... Oct-60 B
Red Bank, NJ ..... Jun-91 B
Eatontown, NJ .... May-93 New Agreement
Wall, NJ ......... Apr-95 New Agreement
40 Piscataway (Plain), NJ Jun-57 B
Cranford, NJ ..... ▇▇▇-▇▇ ▇
▇▇▇▇▇, ▇▇ ........ ▇▇▇-▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ .. Aug-74 (Truck) T
Flemington, NJ ... ▇▇▇-▇▇ ▇
▇▇▇▇ ▇▇▇, ▇▇ ..... Jun-61 T
Hackettstown, NJ . Dec-61 B
Linden, NJ ....... Aug-60 B
Madison, NJ ...... May-65 B
Millburn, NJ ..... Aug-74 B
Montclair, NJ .... Jul-61 B

CITY-STATE DATE TYPE
---------- ------ -----
Morristown, NJ ..... ▇▇▇-▇▇ ▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ .. Apr-60 B
Oakland, NJ ........ Aug-74 (Truck) T
▇▇▇▇ Hills, NJ ..... ▇▇▇-▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ .... Aug-60 B
Rahway, NJ ......... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ..... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ...... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ... Aug-74 (Truck) T
Somerville, NJ ..... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ .... Aug-74 B
Roxbury, NJ ........ Aug-74 B
Summit, NJ ......... May-61 B
Union, NJ .......... Jan-60 B
Port Jervis, NJ .... ▇▇▇-▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ .... Aug-81 C
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇ ▇▇, ▇▇ ....... Apr-65 C
Los Alamos, NM ..... Apr-66 C
Alamogordo, NM ..... Apr-95 New Agreement
42 Albany, NY Dec-64 B
Schenectady, NY .... ▇▇▇-▇▇ ▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ Dec-64 B
Rutland, VT ........ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ........ Oct-95 B
Springfield, VT .... ▇▇▇-▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ Sep-82 C

CITY-STATE DATE TYPE
-------------------- ------ -----
Lake Placid, NY .. ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ Jan-61 B
Larchmont, NY .... Jan-61 B
Mamaroneck, NY ... May-76 B
Rye, Tarrytown, NY Jan-61 B
Scarsdale, NY .... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ Nov-71 B%
Florence, SC ..... Sep-74 B%
Rocky Mount, NC .. ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ .... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ...... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ . ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇ ..... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇, ▇▇ Jan-81 C
Williston, ND .... Jun-81 C
Aberdeen, SD ..... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ Sep-66 B%

CITY-STATE ............. DATE TYPE
----------------------- ------ -------------
State College, PA Mar-94 New Agreement
Mechanicsburgh, PA ▇▇▇-▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ...... ▇▇▇-▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ Apr-59 B
Monroeville, PA .. Apr-59 B
Oakmont, PA ...... Feb-61 B
Vandergrift, PA .. Feb-61 T
Wilkensburg, PA .. ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ Jul-88 B
Waltz ▇▇▇▇▇, PA .. Feb-92 Agency Agreement
59 Pierre, SD ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ .. ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ Apr-81 B%
Greenville, TN ... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ Jun-65 C
Chattanooga, TN .. Jun-65 C
Knoxville, TN .... Oct-76 C
Memphis, TN ...... Jun-65 C
Olive Branch, MS . ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇, ▇▇ Jan-78 B
Lubbock, TX ...... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ Jan-56 B
Brownsville, TX .. Jan-56 B
Harlingen, TX .... Jan-56 B
McAllen, TX ...... Jan-56 B

CITY-STATE ................ DATE TYPE
-------------- ------ ----
Rockport, TX ........ Apr-81 C
S. Padre Island, TX . May-79 C
Victoria, TX ........ Feb-56 B
Laredo, TX .......... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇, ▇▇ Jan-56 B
Austin, TX .......... Apr-56 B
Fort Worth, TX ...... Mar-56 B
San Antonio, TX ..... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇, ▇▇ Apr-94 B
▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ...... Sep-77 C
Page, AZ ............ May-75 C
Vernal, UT .......... Feb-82 C
▇▇▇, NV ............. Mar-82 Letter Agreement
Elko, NV ............ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇, ▇▇ Mar-56 B
Charlottesville, VA . ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ... Jul-65 B
Lynchburg, VA ....... Dec-61 B
Newport, VA ......... May-57 B
Petersburg, VA ...... Jul-65 B
Waynesboro, VA ...... Apr-60 B
Salisbury, MD ....... May-87 B%
Cambridge, Easton, MD May-87 C
Dover, DE ........... May-87 B%
Seaford, DE ......... May-87 C

CITY-STATE .............. DATE TYPE
------------ ------ ------
70 Roanoke, VA Apr-79 B
Bluefield, WV ..... ▇▇▇-▇▇ ▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ Dec-81 C
Clarksburg, WV .... Aug-83 B
Fairmount, WV ..... Aug-83 B
Morgantown, WV .... Aug-83 B
Columbus, MS ...... Oct-86 C
Paducah, KY ....... Aug-77 C
Greenville, MS .... Jan-90 C
Longview, TX ...... Feb-90 C
Tyler, TX ......... Feb-90 C
Killeen, TX ....... Mar-91 ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇, ▇▇ ........ Mar-91 C
Waco, TX .......... Oct-90 C
Meridan, MS ....... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇, ▇▇ Oct-58 C
Green Bay, WI ..... Jul-63 C
Madison, WI ....... Jun-72 C
Wisconsin Dells, WI Apr-78 C
Menominee, MI ..... Jan-73 C
▇▇▇▇▇▇▇▇ Bay, WI .. ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ ...... ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇▇, ▇▇ Jul-65 C
Laramie, WY ....... ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ ...... Dec-69 B
Cody, WY .......... Mar-89 B

CITY-STATE ........ DATE TYPE
------------- ------ ----
▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ Jul-78 B%
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ Apr-56 B%
Fairbanks, AK Apr-56 B%
Juneau, AK .. Apr-56 B%
Kodiak, AK .. Apr-56 B%
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇-▇▇ ▇
▇▇ ▇▇▇▇▇, ▇▇ Feb-69 T

ARACS LICENSEES - CAR RENTAL

Country Expiration
Caribbean Licensee Name Address Date
----------------- -------------------------------------- ---------------------------------------------- ----------

Anguilla Apex Car Rental, Ltd. ▇.▇. ▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ DEC 02

Antigua ▇▇▇▇▇ Enterprises, Ltd. ▇.▇. ▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇'▇ ▇▇ DEC ▇▇
▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 31 DEC 98
Bahamas Windsor Servicentor, Ltd. ▇▇▇ ▇▇▇▇ ▇▇▇, ▇.▇. ▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ YTY
Bonaire Drive Yourself(Bonaire), N.V. Strocofa, Zeelandia, Curacao 31 DEC 97
Cayman Brac T&D Auto Rentals ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ DEC 01
Islands
Curacao Drive Yourself (Curacao), N.V. Stracoba, Zeelandia 31 DEC 97
Dominica ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇ & Co., Ltd. ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇ DEC 99
Dominican Rep. Servicolt C. por A. ▇.▇. ▇▇▇ ▇▇▇-▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ DEC 97
French Guiana Cefber, S.A.R.L. 7, lot La Desireee, 97351, Matoury 31 DEC 00
Grand Cayman ▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 31 DEC 01
(Partnership)
Grenada Spice Isle Rentals, Ltd. ▇.▇. ▇▇▇ ▇▇, ▇▇. ▇▇▇▇▇▇'▇ ▇▇ DEC 00
Guadeloupe Cie. Generade de Location, S.A.R.L. Rue F. Forest, ▇.▇. ▇▇▇▇▇ 31 DEC 00
Haiti Soc. Haitienne de Commerce ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ 31 DEC 99
Martinique Cie.Martiniquaise de Locations, S.A.R.L. Auto GM 2I La Lezarde, 97232, Lamenting 31 DEC 00
Nevis Holiday Car Rentals, Ltd. ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇. Kitts, W.I. 31 DEC 00
Providenciales Provo Auto Supply, Ltd. P.O. Box, Providenciales, Turks & Caicos 31 DEC 00

St. Barthelemy ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇. ▇▇▇▇ 31 DEC 99
St. Eustatius Mercury Transport (Statia), N.V. Lampweg #1 31 DEC 00
St. ▇▇▇▇ V.I. V.I. Miscellaneous Services, Inc. ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ 31 DEC 00
St. Kitts Holiday Car Rentals, Ltd. ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇
▇▇. ▇▇▇▇▇ Sun Drive Rentals, Ltd. ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇
▇▇. ▇▇▇▇▇▇▇ Mercury Transport, N.V. ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇

▇▇. ▇▇▇▇▇▇▇ Systems Car Rental Paul's Ave. Kingstown, St. ▇▇▇▇▇▇▇ 31 DEC 02
Tortola, B.V.I. Auto Parts & Sales, Ltd. ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇ DEC 98

Central America
Belize Eco Rental, Ltd. ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇ ▇▇ DEC98
Costa Rica Linea de Accion, S.A. Agencia Mazda, La Uruca, San ▇▇▇▇ YTY
Guatemala Arrendadora de Guatemala ▇▇ ▇▇▇▇▇ ▇-▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 31DEC01
Honduras Arrandadora de Vehiculos, S.A. ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Comercial Arriete S.A. Apartado 656, 97000 Merida, Yucatan 31JAN07
Panama Rent A Car Panamena, S.A. Distribuidora ▇▇▇▇▇, Via ▇▇▇▇▇ ▇▇▇▇▇▇▇ 31DEC01
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ Servic, S.A. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Autosolving ▇▇▇▇▇▇▇ ▇▇ - ▇▇. ▇▇▇ - ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Turismo, Carros y Botes Cia., Ltda. ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ Vea Peru, S.A. Ave. ▇▇▇▇▇▇ ▇▇▇▇▇ Este 5235, Lima 12 31DEC98
Suriname Para Rent A Car, Ltd. ▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Urucar, S.A. Yaguaron 1527, Montevideo 30SEP99
Venezuela Dorado Rent A Car, C.A. Ave. Libertador Esq. Ave. Principal 31DEC01
▇▇ ▇▇▇▇▇ ▇▇▇▇▇, Caracas

Schedule 3

GUARANTEES

1. Guaranty dated December 31, 1996 in favor of Scotiabank de Puerto
Rico with respect to the obligations of Avis Rent A Car de Puerto
Rico, Inc.

2. Guaranty dated 31 August 1995 in favor of the Participants and
Agents under a ▇▇▇▇ Facility Agreement dated 15 April 1994, as
amended by the Amendment Agreement dated 31 August 1995 with
respect to the obligations of W.T.H. Pty. Limited.

3. Letter of Guarantee* dated May 14, 1996 in favor of OCBC Bank
(Malaysia) Berhad with respect to the obligations of Sister Sewa
Kereta (but not exceeding 25% of such obligations).

4. Deed of Guarantee and Indemnity* dated February 15, 1990 in favor
of Malayan Banking Berhad with respect to the obligations of
Sister Sewa Kereta (but not exceeding 40% of such obligations).

------------
*Obligations of Avis, Inc. to be assumed by Avis Investment Services
Limited ("AIS") by Agreement dated 4 April, 1997 among AIS, Avis Rent
A Car (Hong Kong) Limited and Avis Rent A Car System, Inc.

Schedule 4

WIZCOM TRANSFERRED ASSETS

(i) All Wizard System Agreements

(ii) All Computer Services Agreements

(iii) All Homepage Agreements

(iv) The following proprietary software:

Fleet System:

Fleet Distribution Model
Fleet Planning
Field Fleet Reporting System
Title Tracking Request
Electronic Repair Order
Fleet Receivables
Invoice System
Fleet Reporting System
Make Model Database
Pre-Delivery Inspection
Vehicle On-Line Transaction System
Purchase Order Database
Vehicle Order Database
Vehicle Order Status
Department of Sanitation System
Fleet Reconciliation System
Group Rate Depreciation System
▇▇▇▇▇▇ County Tax System
Insurance System
Licensee Reporting System
Vehicle Damage Claims

SALES AND MARKETING SYSTEM

Pricing Model
IRDB
Coupon Reporting
Worldwide Prestige Insurance
Chairman's Tracking System
CEO Tracking System
Automated Fulfillment System
Brochure Request System
Wizard Credit Link
CAW Corporate Awards System
PSI (for Preferred Supplier Agreements)
Sales Incentive System
EMP Sales Employee Database
STC Sales STC Database

FINANCIAL MANAGEMENT SYSTEM

Accounts Payable (AP) General Ledger (GL)
Money Management System (MMS) Time and
Attendance (TAA) Rental Agreement Processing
Rental Number System Balance Forward System
Register Miscellaneous Reporting Open Item
System Travel Agency System Cash Application
System Invoicing Licensee Chargebacks
Country Company database Club Red Preferred
Supplier AIM International Direct Sell User
Rental File Europe File Wizard Licensee
Billing BIL Roll and Slide Reporting
Currency Data Base Open Rental System Bonus
System Direct Billing System Daily Business
Reporting

YIELD MANAGEMENT SYSTEM

Yield Management
Data Extraction and Conditioning
Product Forecasting
Revenue Optimization
Graphical User Interface
Supply and Demand
Availability by Length of Rental
(AVLLOR)
Turndowns and Denials
Reservation and Rental History
Rate Opportunity System
Yield Management Price
Elasticity System

Rateshop System
Business Mix
Global Distribution System Rate Maintenance
Rate Availability

MISCELLANEOUS SYSTEMS

Coupon Tracking System
Worldwide Reporting System
Consumer Sales Incentive
Personal Liability and Property Damage
Insurance Reserve
Operating Lease Commitment Reporting
Facility
Treasury Debt Reporting Facility
Interactive Personnel System
Name Risk System
Credit Club Risk
Standard Interline Passenger Procedure
(SIPP)

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS....................................................................
Section 1.1 Definitions..............................................

ARTICLE II

TRANSFER OF CAR RENTAL BUSINESS................................................
Section 2.1 Transfer of Assets......................................
Section 2.2 Assignment and Assumption of Liabilities................
Section 2.3 Transfers Not Effected Prior to the Separation Date.....
Section 2.4 No Representations or Warranties; Consents..............
Section 2.5 Conveyancing and Stock Assumption Instruments...........

ARTICLE III

THE SEPARATION...............................................................
Section 3.1 Cooperation Prior to the Separation......................
Section 3.3 Holdings Board Action; Conditions Precedent to the
Separation......................

ARTICLE IV

INDEMNIFICATION................................................................
Section 4.1 ARAC Indemnification of Holdings.........................
Section 4.2 Holdings Indemnification of ARAC.........................
Section 4.3 Notice and Payment of Claims.............................
Section 4.4 Notice and Defense of Third-Party Claims.................
Section 4.5 Insurance Proceeds.......................................
Section 4.6 Contribution.............................................
Section 4.7 Subrogation..............................................
Section 4.8 No Third-Party Beneficiaries.............................
Section 4.9 Remedies Cumulative......................................
Section 4.10 Survival of Indemnities..................................
Section 4.11 After-Tax Indemnification Payments.......................

ARTICLE V

CERTAIN ADDITIONAL MATTERS.....................................................
Section 5.1 Intercompany Payables/Receivables........................
Section 5.2 Ancillary Agreements.....................................
Section 5.3 ARAC Officers and Board of Directors.....................
Section 5.4 ARAC Certificate of Incorporation and By-laws............
Section 5.5 Credit Facilities........................................
Section 5.6 Insurance Policies and Claims Administration.............

ARTICLE VI

ACCESS TO INFORMATION..........................................................
Section 6.1 Provision of Corporate Records...........................
Section 6.2 Access to Information....................................
Section 6.3 Litigation Cooperation...................................
Section 6.4 Reimbursement............................................
Section 6.5 Retention of Records.....................................
Section 6.6 Confidentiality..........................................
Section 6.7 Mail.....................................................

ARTICLE VII

MISCELLANEOUS..................................................................
Section 7.1 Termination..............................................
Section 7.2 Expenses.................................................
Section 7.3 Notices..................................................
Section 7.4 Amendment and Waiver.....................................
Section 7.5 Counterparts.............................................
Section 7.6 Governing Law; Jurisdiction; Forum.......................
Section 7.7 Entire Agreement.........................................
Section 7.8 Parties in Interest......................................
Section 7.9 Tax Disaffiliation Agreement.............................
Section 7.10 Further Assurances and Consents..........................
Section 7.11 Exhibits and Schedules...................................
Section 7.12 Legal Enforceability.....................................
Section 7.13 Dispute Resolution.......................................
Section 7.14 Titles and Headings......................................

Schedule 1 - Direct Car Rental Subsidiaries

Schedule 2 - Franchise Agreements

Schedule 3 - Guarantees

Schedule 4 - WizCom Transferred Assets

EXHIBIT 10.4 SEPARATION AGREEMENT dated as of July 30th, 1997

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Table of Contents