AESOP FUNDING II L.L.C.,
as Issuer
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Trustee
------------------------------
AMENDED AND RESTATED
BASE INDENTURE
Dated as of July 30, 1997
------------------------------
Rental Car Asset Backed Notes
(Issuable in Series)
AMENDED AND RESTATED BASE INDENTURE, dated as of July 30,
1997, between AESOP FUNDING II L.L.C., a special purpose limited liability
company established under the laws of Delaware, as issuer ("AFC-II"), and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, an Illinois banking corporation, as trustee (in
such capacity, the "Trustee").
W I T N E S S E T H:
WHEREAS, AESOP Funding Corp. II ("Original AFC-II") and
▇▇▇▇▇▇ Trust and Savings Bank are parties to a Base Indenture, dated as of May
1, 1996 (the "Prior Indenture");
WHEREAS, Original AFC-II and AFC-II have merged with AFC-II
as the surviving entity pursuant to an Agreement of Merger, dated as of July
30, 1997 (the "Merger Agreement"), between Original AFC-II and AFC-II, and AFC-
II has assumed all the rights and obligations of Original AFC-II under the
Prior Indenture pursuant to the Merger Agreement;
WHEREAS, AFC-II desires to amend and restate the Prior
Indenture in its entirety as herein set forth, and ▇▇▇▇▇▇ Trust and Savings
Bank, as trustee under the Prior Indenture, hereby consents thereto;
WHEREAS, AFC-II has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of one
or more series of AFC-II's Rental Car Asset Backed Notes (the "Notes"),
issuable as provided in this Indenture; and
WHEREAS, all things necessary to make this Indenture a legal,
valid and binding agreement of AFC-II, in accordance with its terms, have been
done, and AFC-II proposes to do all the things necessary to make the Notes,
when executed by AFC-II and authenticated and delivered by the Trustee
hereunder and duly issued by AFC-II, the legal, valid and binding obligations
of AFC-II as hereinafter provided;
NOW, THEREFORE, for and in consideration of the premises and
the receipt of the Notes by the Noteholders, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Noteholders, that the
Prior
Indenture be amended and restated in its entirety as follows:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
Certain capitalized terms used herein (including the preamble
and the recitals hereto) shall have the meanings assigned to such terms in the
Definitions List attached hereto as Schedule I (the "Definitions List"), as
such Definitions List may be amended or modified from time to time in
accordance with the provisions hereof.
Section 1.2. Cross-References.
Unless otherwise specified, references in this Indenture and
in each other Related Document to any Article or Section are references to such
Article or Section of this Indenture or such other Related Document, as the
case may be and, unless otherwise specified, references in any Article, Section
or definition to any clause are references to such clause of such Article,
Section or definition.
Section 1.3. Accounting and Financial Determinations;
No Duplication.
Where the character or amount of any asset or liability or
item of income or expense is required to be determined, or any accounting
computation is required to be made, for the purpose of this Indenture, such
determination or calculation shall be made, to the extent applicable and except
as otherwise specified in this Indenture, in accordance with GAAP. When used
herein, the term "financial statement" shall include the notes and schedules
thereto. All accounting determinations and computations hereunder or under any
other Related Documents shall be made without duplication.
Section 1.4. Rules of Construction.
In this Indenture, unless the context otherwise requires:
2
(i) the singular includes the plural and
vice versa;
(ii) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by this Indenture, and reference to any Person
in a particular capacity only refers to such Person in such capacity;
(iii) reference to any gender includes
the other gender;
(iv) reference to any Requirement of Law means such
Requirement of Law as amended, modified, codified or reenacted, in
whole or in part, and in effect from time to time;
(v) "including" (and with correlative meaning
"include") means including without limiting the generality of any
description preceding such term; and
(vi) with respect to the determination of any period
of time, "from" means "from and including" and "to" means "to but
excluding".
ARTICLE 2.
THE NOTES
Section 2.1. Designation and Terms of Notes.
Each Series of Notes shall be substantially in the form
specified in the applicable Supplement and shall bear, upon its face, the
designation for such Series to which it belongs so selected by AFC-II. All
Notes of any Series shall, except as specified in the related Supplement, be
equally and ratably entitled as provided herein to the benefits hereof without
preference, priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions of
this Indenture and the applicable Supplement. The aggregate principal amount of
Notes which may be authenticated and delivered under this Indenture is
unlimited. The Notes shall be in denomina-
3
tions of $200,000 and integral multiples of $1,000 in excess thereof.
Section 2.2. Notes Issuable in Series.
The Notes may be issued in one or more Series. Each Series of
Notes shall be created by a Supplement. Notes of a new Series may from time to
time be executed by AFC-II and delivered to the Trustee for authentication and
thereupon the same shall be authenticated and delivered by the Trustee upon the
receipt by the Trustee of a Company Request at least two (2) Business Days in
advance of the related Series Closing Date and upon delivery by AFC-II to the
Trustee, and receipt by the Trustee, of the following:
(a) a Company Order authorizing and directing the
authentication and delivery of the Notes of such new Series by the
Trustee and specifying the designation of such new Series, the
aggregate principal amount of Notes of such new Series to be
authenticated and the Note Rate (or the method for allocating interest
payments or other cash flow) with respect to such new Series;
(b) a Supplement in form satisfactory to the Trustee executed
by AFC-II and the Trustee and specifying the Principal Terms of such
new Series;
(c) the related Enhancement Agreement, if any, executed by
each of the parties thereto, other than the Trustee;
(d) written confirmation that the Rating Agency Confirmation
Condition and the CP Rating Agency Condition shall have been satisfied
with respect to such issuance;
(e) an Officer's Certificate of AFC-II dated as of the
applicable Series Closing Date to the effect that (i) no Amortization
Event, Aggregate Asset Amount Deficiency, Enhancement Agreement Event
of Default, if applicable, Enhancement Deficiency, Loan Event of
Default, AESOP I Operating Lease Vehicle Deficiency, Manufacturer
Event of Default, Lease Event of Default, Potential Amortization
Event, Potential Enhancement Agreement Event of
4
Default, Potential Loan Event of Default, Potential Lease Event of
Default, or Potential Manufacturer Event of Default is continuing or
will occur as a result of the issuance of the new Series of Notes,
(ii) the issuance of the new Series of Notes will not result in any
breach of any of the terms, conditions or provisions of or constitute
a default under any indenture, mortgage, deed of trust or other
agreement or instrument to which AFC-II is a party or by which it or
its property is bound or any order of any court or administrative
agency entered in any suit, action or other judicial or administrative
proceeding to which AFC-II is a party or by which it or its property
may be bound or to which it or its property may be subject, (iii) all
conditions precedent provided in this Base Indenture and the related
Supplement with respect to the authentication and delivery of the new
Series of Notes have been complied with and (iv) if such new Series of
Notes is a Segregated Series, the criteria used to select the
Series-Specific Collateral will not have a material adverse effect on
the quality of the Collateral securing any other outstanding Series of
Notes;
(f) unless otherwise specified in the related Supplement, an
Opinion of Counsel, subject to the assumptions and qualifications
stated therein, and in a form substantially acceptable to the Trustee,
dated the applicable Series Closing Date, substantially to the effect
that:
(i) (x) the new Series of Notes will be treated as
indebtedness of AFC-II for Federal and New York state income
tax purposes and (y) the issuance of such Series will not
adversely affect the Federal or New York state income tax
characterization of the Outstanding Notes of any Series;
(ii) all instruments furnished to the Trustee
conform in all material respects to the requirements of this
Base Indenture and the related Supplement and constitute all
the documents required to be delivered hereunder and
thereunder for the Trustee to authenticate and deliver the
new Series of Notes, and all conditions precedent provided
for in this Base In-
5
denture and the related Supplement with respect to the
authentication and delivery of the new Series of Notes have
been complied with in all material respects;
(iii) (w) AFC-II is duly organized under the
jurisdiction of its formation and has the power and authority
to execute and deliver the related Supplement, this Base
Indenture and each other Related Document to which it is a
party and to issue the new Series of Notes, (x) AESOP Leasing
is duly organized under the jurisdiction of its formation and
has the power and authority to execute and deliver each of
the Related Documents to which it is a party, (y) each of
Original AESOP, AESOP Leasing II, PVHC and Quartx is duly
incorporated under the jurisdiction of its incorporation and
has the corporate power and authority to execute and deliver
each of the Related Documents to which it is a party and (z)
each of ARC, ARAC and each Lessee is duly incorporated in the
jurisdiction of its incorporation and, as of the date of this
Indenture, has the corporate power and authority to execute
and deliver each of the Related Documents to which it is a
party;
(iv) the related Supplement, this Base Indenture,
the Loan Agreements, the Leases and each of the other Related
Documents to which AFC-II, AESOP Leasing, AESOP Leasing II,
Original AESOP, PVHC, Quartx, ARAC, any Lessee or ARC is a
party have been duly authorized, executed and delivered by
AFC-II, AESOP Leasing, AESOP Leasing II, Original AESOP,
PVHC, Quartx, ARAC, any Lessee or ARC, as the case may be;
(v) the new Series of Notes has been duly authorized
and executed and, when authenticated and delivered in
accordance with the provisions of this Base Indenture and the
related Supplement, will constitute valid, binding and
enforceable obligations of AFC-II entitled to the benefits of
this Base Indenture and the related Supplement, subject, in
the case of enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affect-
6
ing creditors' rights generally and to general principles of
equity;
(vi) this Base Indenture, the related Supplement and
each of the other Related Documents to which AFC-II, AESOP
Leasing, AESOP Leasing II, Original AESOP, PVHC, Quartx,
ARAC, any Lessee or ARC is a party are legal, valid and
binding agreements of AFC-II, AESOP Leasing, AESOP Leasing
II, Original AESOP, PVHC, Quartx, ARAC, any Lessee or ARC, as
the case may be, enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
creditors' rights generally and to general principles of
equity;
(vii) each of AFC-II, AESOP Leasing and AESOP
Leasing II is not, and is not controlled by, an "investment
company" within the meaning of, and is not required to
register as an "investment company" under, the Investment
Company Act, and this Base Indenture and the related
Supplement are not required to be registered under the Trust
Indenture Act;
(viii) the offer and sale of the new Series of Notes
is not required to be registered under the Securities Act;
(ix) as to the new Series of Notes and any
Outstanding Series of Notes, the opinions of counsel relating
to (A) the validity, perfection and priority of security
interests, (B) the nature of each of the Operating Leases as
a "true lease" and not as a financing arrangement, (C) the
analysis of substantive consolidation of the assets of (1)
AFC, AFC-II, AESOP Leasing, AESOP Leasing II or Original
AESOP with the assets of ARC or any of its Subsidiaries in
the event of the insolvency of ARC or any of its
Subsidiaries, (2) AFC or AFC-II with the assets of AESOP
Leasing, AESOP Leasing II or Original AESOP in the event of
the insolvency of AESOP Leasing, AESOP Leasing II or Original
AESOP and (3) AFC, AESOP Leasing, AESOP Leasing II or
Original AESOP with the as-
7
sets of AFC-II in the event of the insolvency of AFC-II, (D)
the status of each of AFC-II, AESOP Leasing, AESOP Leasing II
and Original AESOP as not being an investment company or
controlled by an investment company under the Investment
Company Act, (E) there being no pending or threatened
litigation which, if adversely determined, would materially
and adversely affect the ability of each of AFC-II, AESOP
Leasing, AESOP Leasing II, Original AE-SOP, PVHC, Quartx,
ARAC, any Lessee or ARC to perform its obligations under any
of the Related Documents, and (F) the absence of any conflict
with or violation of any court decree, injunction, writ or
order applicable to AFC-II or any breach or default of any
indenture, agreement or other instrument as a result of the
issuance of such Series of Notes by AFC-II, as furnished by
counsel retained by AFC-II, AESOP Leasing, AESOP Leasing II,
Original AE-SOP, PVHC and Quartx in connection with the
issuance of the initial Series of Notes, are reaffirmed in
all respects and
(x) such other matters as the Trustee may reasonably
require;
(g) executed counterparts of each Loan Agreement and each
Lease, duly executed by the applicable parties thereto;
(h) evidence that each of parties to the Related Documents
and each party to any Swap Agreement has covenanted and agreed that,
prior to the date which is one year and one day after the payment in
full of the latest maturing Note, it will not institute against, or
join with any other Person in instituting, against AFC-II, AESOP
Leasing, AESOP Leasing II, Original AESOP, PVHC, Quartx or AFC any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings, under any Federal or state
bankruptcy or similar law;
(i) evidence of the grant (i) by ▇▇▇▇▇ ▇▇▇▇▇▇▇, PVHC and
Quartx to (1) AFC-II and (2) the Trustee of a first priority security
interest in and
8
to the AESOP I Operating Lease Loan Collateral, (ii) by AESOP Leasing
to (1) AFC-II and (2) the Trustee of a first priority security
interest in and to the AESOP I Finance Lease Loan Collateral, (iii) by
AESOP Leasing II and Original AESOP to (1) AFC-II and (2) the Trustee
of a first priority security interest in and to the AESOP II Loan
Collateral and (iv) by AFC-II to the Trustee of a first priority
security interest in and to the Collateral;
(j) evidence (which, in the case of the filing of financing
statements on form UCC-1, may be telephonic, followed by prompt
written confirmation) that AESOP Leasing and AESOP Leasing II have
caused or are causing the Trustee's name to be noted on each Vehicle's
Certificate of Title (other than Certificates of Title for the Initial
PVT Vehicles, the Initial Financed Vehicles, the Franchisee Vehicles
and Vehicles titled in Nebraska, Ohio and Oklahoma) in accordance
with the Loan Agreements and this Indenture and all filings (including
filing of financing statements on form UCC-1) and recordings have been
accomplished as may be required by law to establish, perfect, protect
and preserve the rights, titles, interests, remedies, powers,
privileges, licenses and security interest of the Trustee in such
Vehicles and the Collateral for the benefit of the Secured Parties
(except, as to perfection, with respect to Vehicles titled in
Nebraska, Ohio and Oklahoma); and
(k) such other documents, instruments, certifications,
agreements or other items as the Trustee may reasonably require.
Upon satisfaction of such conditions, the Trustee shall authenticate and
deliver, as provided above, such Series of Notes upon execution thereof by
AFC-II.
Section 2.3. Supplement For Each Series.
(a) In conjunction with the issuance of a new Series, the
parties hereto shall execute a Supplement, which shall specify the
relevant terms with respect to such new Series of Notes, which shall
include, as applicable: (i) its name or designation, (ii) the
aggregate principal amount of Notes of such
9
Series, (iii) the Note Rate (or the method for calculating such Note
Rate) with respect to such Series, (iv) the interest payment date or
dates and the date or dates from which interest shall accrue, (v) the
method of allocating Collections with respect to such Series and the
method by which the principal amount of Notes of such Series shall
amortize or accrete, (vi) the names of any accounts to be used by such
Series and the terms governing the operation of any such account,
(vii) the terms of any Enhancement, (viii) the Enhancement Provider,
if any, (ix) whether the Notes may be issued in bearer form and any
limitations imposed thereon, (x) the Series Termination Date, (xi)
whether the Notes will be issued in multiple classes and, if so, the
method of allocating Collections among such classes, (xii) whether
such Series of Notes shall have the benefit of Series-Specific
Collateral and (xiii) any other relevant terms of such Series of Notes
that do not (subject to Section 2.3(b) and Article 12 hereof) change
the terms of any Outstanding Series of Notes or otherwise materially
conflict with the provisions of this Indenture and that do not prevent
the satisfaction of the Rating Agency Confirmation Condition with
respect to the issuance of such new Series (all such terms, the
"Principal Terms" of such Series);
(b) (i) A Supplement may specify that the related Series of
Notes (each, a "Segregated Series") will, in addition to the
Enhancement, have Collateral that is to be solely for the benefit of
the Noteholders of such Segregated Series of Notes (such Collateral
being referred to as "Series-Specific Collateral"); provided,
however, that no such Segregated Series of Notes will be issued unless
(x) the Rating Agency Confirmation Condition and the CP Rating Agency
Condition each is met, (y) AFC-II shall have delivered to the Trustee
an Officers' Certificate to the effect that the issuance of such
Segregated Series of Notes will not have a material adverse effect
upon the Noteholders of any Series of Notes outstanding at the time of
the issuance of the Segregated Series of Notes, and (z) the applicable
Supplement provides, in form satisfactory to the Trustee, for the
changes and modifications to the
10
Indenture and the other Related Documents as are described in clause
(ii) below.
(ii) In the event any Segregated Series of Notes is
issued, the related Supplement will provide that (A) the
Administrator will identify to the Trustee the Collateral for
such Segregated Series of Notes such that (x) the
Series-Specific Collateral will secure only the Segregated
Series of Notes to which such Series-Specific Collateral is
applicable and (y) the Noteholders with respect to any other
Series of Notes will not be entitled to the benefit of such
Series-Specific Collateral, (B) the Trustee will adjust the
allocations and distributions to be made under the Indenture
at the written direction of the Administrator so that the
Noteholders with respect to the Segregated Series of Notes
will be entitled to allocations and distributions arising
solely from the Series-Specific Collateral applicable to such
Segregated Series of Notes and the Noteholders with respect
to the non-Segregated Series of Notes will be entitled to
allocations and distributions arising solely from the
non-Series-Specific Collateral, (C) the Trustee will act as
collateral agent under the Indenture (and in such capacity
the Trustee shall (x) establish and maintain a master
collection account, and one or more segregated collection
accounts, into which Collections allocated to all Series of
Notes will be deposited and, after such deposit, further
allocated among one or more Segregated Series of Notes and
the non-Segregated Series of Notes and (y) hold its lien
encumbering the non-Series-Specific Collateral for the
benefit of the non-Segregated Series of Notes and hold its
lien encumbering the Series-Specific Collateral for the
benefit of the Segregated Series of Notes), (D) the
Administrator will designate on its computer system the
source of the funds for the financing of each Vehicle (as
between one or more Segregated Series of Notes and the
non-Segregated Series of Notes, the "Financing Provider" with
respect to such Series of Notes), (E) the Noteholders of any
Segregated
11
Series of Notes will, subject to the limitations contained in
this Base Indenture and the applicable Supplement, be
entitled to direct the Trustee in writing to exercise the
remedies under the Indenture solely on behalf of such
Segregated Series of Notes, (F) separate monthly reports and
other information will be furnished under the Indenture for
the Series-Specific Collateral, which monthly reports and
other information will contain substantially the same type of
information as the monthly reports provided under the
Indenture prior to the issuance of such Segregated Series of
Notes, (G) a separate segregated loan agreement and separate
segregated leases pertaining solely to the Series-Specific
Collateral will be executed and delivered by AFC-II, as
lender, AESOP Leasing or AESOP Leasing II, as borrower, and
the Lessees, as lessees, and ARC, as guarantor (H) to the
extent specified in the Supplement for such Segregated Series
of Notes, AFC-II and AESOP Leasing or AESOP Leasing II, as
the case may be, will take such actions as are necessary to
perfect the Trustee's interest on behalf of the Noteholders
of such Series in the Series-Specific Collateral, (I)
amendments will be made to this Indenture and the other
Related Documents, if necessary, to reflect the foregoing,
which amendments will, among other things, provide for
revisions to the terms "Aggregate Asset Amount", "Required
Aggregate Asset Amount", "Collateral", "Collection Account",
"AFC-II Agreements", "AFC-II Obligations", "Loan Agreements",
"Leases", "Related Documents", "Aggregate Invested Amount"
and "Requisite Investors" and such other terms as may be
appropriate to reflect the creation of the Segregated Series,
provided that any such amendment shall not have a material
adverse effect on the Noteholders of any Series unless the
Required Noteholders of such Series shall have given their
prior written consent thereto (and, with respect to each
Series, the Trustee may conclusively rely on an Officer's
Certificate of AESOP Leasing and AESOP Leasing II as
sufficient evidence of such lack of a material adverse
effect) and (J) references herein to
12
"all" Series of Notes (other than as specifically stated
herein) shall be modified to refer to all Series of Notes
other than any Segregated Series of Notes which may hereafter
be issued.
Section 2.4. Execution and Authentication.
(a) An Authorized Officer shall sign the Notes for AFC-II by
manual or facsimile signature. If an Authorized Officer whose
signature is on a Note no longer holds that office at the time the
Note is authenticated, the Note shall nevertheless be valid.
(b) At any time and from time to time after the execution and
delivery of this Indenture, AFC-II may deliver Notes of any particular
Series executed by AFC-II to the Trustee for authentication, together
with one or more Company Orders for the authentication and delivery of
such Notes, and the Trustee, in accordance with such Company Order and
this Indenture, shall authenticate and deliver such Notes.
(c) No Note shall be entitled to any benefit under this
Indenture or be valid for any purpose unless there appears on such
Note a certificate of authentication substantially in the form
provided for herein, duly executed by the Trustee by the manual
signature of a Trust Officer (and the Luxembourg agent (the
"Luxembourg Agent"), if such Notes are listed on the Luxembourg Stock
Exchange). Such signatures on such certificate shall be conclusive
evidence, and the only evidence, that the Note has been duly
authenticated under this Indenture. The Trustee may appoint an
authenticating agent acceptable to AFC-II to authenticate Notes.
Unless limited by the term of such appointment, an authenticating
agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with AFC-II or an Affiliate of AFC-II. The
Trustee's certificate of authentication shall be in substantially the
following form:
13
This is one of the Notes of a series issued under the within
mentioned Indenture.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Trustee
By:
-------------------------------
Authorized Signatory
(d) Each Note shall be dated and issued as of the date of its
authentication by the Trustee.
(e) Notwithstanding the foregoing, if any Note shall have
been authenticated and delivered hereunder but never issued and sold
by AFC-II, and AFC-II shall deliver such Note to the Trustee for
cancellation as provided in Section 2.14 together with a written
statement (which need not comply with Section 13.3 and need not be
accompanied by an Opinion of Counsel) stating that such Note has never
been issued and sold by AFC-II, for all purposes of this Indenture
such Note shall be deemed never to have been authenticated and
delivered hereunder and shall not be entitled to the benefits of this
Indenture.
Section 2.5. Form of Notes; Book Entry Provisions; Title.
(a) Restricted Global Note. Any Series of Notes (other than
Variable Funding Notes), or any class of such Series to be issued in
the United States will be in registered form and sold initially to
institutional accredited investors within the meaning of Regulation D
under the Securities Act in reliance on an exemption from the
registration requirements of the Securities Act and thereafter (i) to
qualified institutional buyers within the meaning of, and in reliance
on, Rule 144A under the Securities Act ("Rule 144A"), (ii) outside the
United States to a non-U.S. Person (as such term is defined in
Regulation S of the Securities Act) in a transaction in compliance
with Regulation S of the Securities Act, (iii) pursuant to an
effective registration statement under the Securities Act or (iv) in
reliance on another exemption under the Securities Act, in each case
in accordance with any
14
applicable securities laws of any state of the United States, and as
provided in the applicable Supplement and prior to any such sale, each
such purchaser shall be deemed to have represented and agreed as
follows:
(1) It is an institutional accredited investor
within the meaning of Regulation D under the Securities Act
or a qualified institutional buyer as defined in Rule 144A
and is acquiring the Notes for its own institutional account
or for the account of an institutional accredited investor or
a qualified institutional buyer;
(2) It understands that the Notes purchased by it
will be offered, and may be transferred, only in a
transaction not involving any public offering within the
meaning of the Securities Act, and that, if in the future it
decides to resell, pledge or otherwise transfer any Notes,
such Notes may be resold, pledged or transferred only (a) to
a person who the seller reasonably believes is a qualified
institutional buyer (as defined in Rule 144A under the
Securities Act) that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is
given that the resale, pledge or transfer is being made in
reliance on Rule 144A, (b) outside the United States to a
non-U.S. Person (as such term is defined in Regulation S of
the Securities Act) in a transaction in compliance with
Regulation S of the Securities Act, (c) pursuant to an
effective registration statement under the Securities Act or
(d) in reliance on another exemption under the Securities
Act, in each case in accordance with any applicable
securities laws of any state of the United States;
(3) It understands that the Notes will
bear a legend substantially as set forth in
Section 2.10; and
(4) It acknowledges that the Trustee, the Issuer,
each Placement Agent for such Series of Notes, and their
affiliates, and others will rely upon the truth and accuracy
of the forego-
15
ing acknowledgements, representations and agreements. If it
is acquiring any Notes for the account of one or more
institutional accredited investors or qualified institutional
buyers, it represents that it has sole investment discretion
with respect to each such account and that it has full power
to make the foregoing acknowledgements, representations and
agreements on behalf of each such account.
In addition, such purchaser shall be responsible for
providing additional information or certification, as shall be reasonably
requested by the Trustee, the Issuer or any Placement Agent for such Series of
Notes, to support the truth and accuracy of the foregoing acknowledgements,
representations and agreements, it being understood that such additional
information is not intended to create additional restrictions on the transfer
of the Notes. Such Series of Notes (other than the Variable Funding Note) shall
be issued in the form of and represented by one or more permanent global Notes
in fully registered form without interest coupons (each, a "Restricted Global
Note"), substantially in the form set forth in the applicable Supplement, with
such legends as may be applicable thereto, which shall be deposited on behalf
of the subscribers for the Notes represented thereby with a custodian for DTC,
and registered in the name of DTC or a nominee of DTC, duly executed by AFC-II
and authenticated by the Trustee as provided in Section 2.4 for credit to the
accounts of the subscribers at DTC. The aggregate initial principal amount of a
Restricted Global Note may from time to time be increased or decreased by
adjustments made on the records of the custodian for DTC, DTC or its nominee,
as the case may be, as hereinafter provided.
(b) Temporary Global Note; Permanent Global Note. Any Series
of Notes (other than Variable Funding Notes), or any class of such
Series, offered and sold outside of the United States will be offered
and sold in reliance on Regulation S ("Regulation S") under the
Securities Act and shall initially be issued in the form of one or
more temporary global Notes (each, a "Temporary Global Note") in fully
registered form without interest coupons substantially in the form set
forth in the applicable Supplement with such legends as may be
applicable
16
thereto, registered in the name of DTC or a nominee of DTC, duly
executed by AFC-II and authenticated by the Trustee as provided in
Section 2.4, for credit to the subscribers' accounts at ▇▇▇▇▇▇
Guaranty Trust Company of New York, Brussels Office, as operator of
Euroclear or Cedel. Interests in a Temporary Global Note will be
exchangeable, in whole or in part, for interests in a permanent global
note (a "Permanent Global Note") in fully registered form without
interest coupons, representing Notes of the same Series, substantially
in the form set forth in the applicable Supplement, in accordance with
the provisions of the Temporary Global Note and this Indenture. Until
the Exchange Date, interests in a Temporary Global Note may only be
held by the agent members of Euroclear and Cedel. The aggregate
initial principal amount of the Temporary Global Note may from time to
time be increased or decreased by adjustments made on the records of
the custodian for DTC, DTC or its nominee, as the case may be, as
hereinafter provided.
(c) Variable Funding Note. Any Series of Variable Funding
Notes shall initially be sold to investors in reliance on an exemption
from the registration requirements of the Securities Act. Such Series
of Notes shall be issued in the form of one or more Variable Funding
Notes (each, a "Variable Funding Note") in fully registered form
without interest coupons substantially in the form set forth in the
applicable Supplement with such legends as may be applicable thereto,
duly executed by AFC-II and authenticated by the Trustee as provided
in Section 2.4. The aggregate initial principal amount of a Variable
Funding Note may from time to time be increased or decreased in
accordance with the applicable Supplement by adjustments made on the
records of the Note Register.
Section 2.6. Registrar and Paying Agent.
(a) AFC-II shall (i) maintain an office or agency where Notes
may be presented for registration of transfer or for exchange
("Registrar") and (ii) appoint a paying agent (which shall satisfy the
eligibility criteria set forth in Section 10.8(a)) ("Paying Agent") at
whose office or agency Notes may
17
be presented for payment. The Registrar shall keep a register of the
Notes and of their transfer and exchange (the "Note Register"). AFC-II
may appoint one or more co-registrars and one or more additional
paying agents. The term "Paying Agent" includes any additional paying
agent and the term "Registrar" includes any co-registrars. AFC-II may
change any Paying Agent or Registrar without prior notice to any
Noteholder. AFC-II shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. The Trustee is
hereby initially appointed as the Registrar, Paying Agent and agent
for service of notices and demands in connection with the Notes.
(b) AFC-II shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. Such agency agreement
shall implement the provisions of this Indenture that relate to such
Agent. AFC-II shall notify the Trustee in writing of the name and
address of any such Agent. If AFC-II fails to maintain a Registrar or
Paying Agent and a Trust Officer has actual knowledge of such failure,
or if AFC-II fails to give the foregoing notice, the Trustee shall act
as such, and shall be entitled to appropriate compensation in
accordance with this Indenture, until AFC-II shall appoint a
replacement Registrar and Paying Agent.
Section 2.7. Paying Agent to Hold Money in Trust.
(a) AFC-II will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee (and if the Trustee
acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of
amounts due with respect to the Notes in trust for the
benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein
provided;
18
(ii) give the Trustee notice of any default by
AFC-II (or any other obligor under the Notes) of which it
(or, in the case of the Trustee, a Trust Officer) has actual
knowledge in the making of any payment required to be made
with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as a Paying Agent and
forthwith pay to the Trustee all sums held by it in trust for
the payment of Notes if at any time it ceases to meet the
standards required to be met by a Trustee hereunder at the
time of its appointment; and
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on
any Notes of any applicable withholding taxes imposed thereon
and with respect to any applicable reporting requirements in
connection therewith.
(b) AFC-II may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose,
by Company Order direct any Paying Agent to pay to the Trustee all
sums held in trust by such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which the sums were held by
such Paying Agent; and upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
(c) Subject to applicable laws with respect to escheat of
funds, any money held by the Trustee or any Paying Agent or a Clearing
Agency in trust for the payment of any amount due with respect to any
Note and remaining unclaimed for two years after such amount has
become due and payable shall be discharged from such trust and be paid
to AFC-II on Company Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look
19
only to AFC-II for payment thereof (but only to the extent of the
amounts so paid to AFC-II), and all liability of the Trustee or such
Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of AFC-II
cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general
circulation in New York City, and London and Luxembourg (if the
related Series of Notes has been listed on the Luxembourg Stock
Exchange), if applicable, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30
days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to AFC-II. The Trustee may also
adopt and employ, at the expense of AFC-II, any other reasonable means
of notification of such repayment.
Section 2.8. Noteholder List.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Noteholders of each Series of Notes. If the Trustee is not the
Registrar, AFC-II shall furnish to the Trustee at least seven Business Days
before each Distribution Date and at such other time as the Trustee may request
in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Noteholders of each Series of
Notes.
Section 2.9. Transfer and Exchange.
(a) When Notes of any particular Series are presented to the
Registrar or a co-registrar with a request to register a transfer or
to exchange them for an equal principal amount of Notes of other
authorized denominations of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for
such transaction are met; provided, however, that the Notes
surrendered for transfer or exchange (a) shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory
to AFC-II and the
20
Registrar, duly executed by the holder thereof or its attorney, duly
authorized in writing and (b) shall be transferred or exchanged in
compliance with the following provisions:
(i) Transfer of Restricted Global Notes.
(A) if such Note is being acquired for the account
of such Holder, without transfer, a certification from such Holder to
that effect (in substantially the form of Exhibit A-1 hereto); or
(B) if such Note is being transferred to a qualified
institutional buyer (as defined in Rule 144A) in accordance with Rule
144A, (i) a certification to that effect (in substantially the form of
Exhibit A-1 hereto) and (ii) each such transferee of such Note shall
be deemed to have represented and agreed as follows:
(1) It is a qualified institutional buyer as defined
in Rule 144A and is acquiring the Notes for its own
institutional account or for the account of a qualified
institutional buyer;
(2) It understands that the Notes purchased by it
will be offered, and may be transferred, only in a
transaction not involving any public offering within the
meaning of the Securities Act, and that, if in the future it
decides to resell, pledge or otherwise transfer any Notes,
such Notes may be resold, pledged or transferred only (a) to
a person who the seller reasonably believes is a qualified
institutional buyer (as defined in Rule 144A under the
Securities Act) that purchases for it own account or for the
account of a qualified institutional buyer to whom notice is
given that the resale, pledge or transfer is being made in
reliance on Rule 144A, (b) outside the United States to a
non-U.S. Person (as such term is defined in Regulation S of
the Securities Act) in a transaction in compliance with
Regulation S of the Securities Act, (c) pursuant to an
effective registration statement under the Securities Act or
(d) in reliance on another exemption under the Securities
Act, in each
21
case in accordance with any applicable securities laws of any
state of the United States;
(3) It understands that the Notes will bear a legend
substantially as set forth in Section 2.10; and
(4) It acknowledges that the Trustee, the Issuer,
each Placement Agent for such Series of Notes, and their
affiliates, and others will rely upon the truth and accuracy
of the foregoing acknowledgements, representations and
agreements. If it is acquiring any Notes for the account of
one or more qualified institutional buyers, it represents
that it has sole investment discretion with respect to each
such account and that it has full power to make the foregoing
acknowledgements, representations and agreements on behalf of
each such account.
In addition, such transferee shall be responsible for
providing additional information or certification, as shall be reasonably
requested by the Trustee, the Issuer or any Placement Agent for such Series of
Notes, to support the truth and accuracy of the foregoing acknowledgements,
representations and agreements, it being understood that such additional
information is not intended to create additional restrictions on the transfer
of the Notes; or
(C) if such Note is being transferred pursuant to an
exemption from registration in accordance with Regulation S, a
certification to that effect (in substantially the form of Exhibit A-1
hereto); or
(D) if such Note is being transferred in reliance on
another exemption from the registration requirements of the Securities
Act, a certification to that effect (in substantially the form of
Exhibit A-1 hereto) and an opinion of counsel in form and substance
acceptable to AFC-II and to the Registrar to the effect that such
transfer is in compliance with the Securities Act.
(ii) Temporary Global Note to Permanent
Global Note. Interests in a Temporary Global
22
Note as to which the Trustee has received from Euroclear or
Cedel, as the case may be, a certificate substantially in the
form of Exhibit B to the effect that Euroclear or Cedel, as
applicable, has received a certificate substantially in the
form of Exhibit C from the holder of a beneficial interest in
such Note, will be exchanged, on and after the 40th day after
the completion of the distribution of the relevant Series
(the "Exchange Date"), for interests in a Permanent Global
Note. To effect such exchange AFC-II shall execute and the
Trustee shall authenticate and deliver to Euroclear or Cedel,
as applicable, for credit to the respective accounts of the
holders of Notes, a duly executed and authenticated Permanent
Global Note, representing the principal amount of interests
in the Temporary Global Note initially exchanged for
interests in the Permanent Global Note. The delivery to the
Trustee by Euroclear or Cedel of the certificate or
certificates referred to above may be relied upon by AFC-II
and the Trustee as conclusive evidence that the certificate
or certificates referred to therein has or have been
delivered to Euroclear or Cedel pursuant to the terms of this
Indenture and the Temporary Global Note. Upon any exchange of
interests in a Temporary Global Note for interests in a
Permanent Global Note, the Trustee shall endorse the
Temporary Global Note to reflect the reduction in the
principal amount represented thereby by the amount so
exchanged and shall endorse the Permanent Global Note to
reflect the corresponding increase in the amount represented
thereby. The Temporary Global Note or the Permanent Global
Note shall also be endorsed upon any cancellation of
principal amounts upon surrender of Notes purchased by AFC-II
or any of its respective subsidiaries or affiliates or upon
any repayment of the principal amount represented thereby or
any payment of interest in respect of such Notes.
(iii) Restricted Global Note to Temporary
Global Note During the Restricted Period. If,
prior to the Exchange Date, a holder of a bene-
23
ficial interest in the Restricted Global Note registered in
the name of DTC or its nominee wishes at any time to exchange
its interest in such Restricted Global Note for an interest
in the Temporary Global Note, such holder may, subject to the
rules and procedures of DTC, exchange or cause the exchange
or transfer of such interest for an equivalent beneficial
interest in the Temporary Global Note. Upon receipt by the
Trustee as Transfer Agent ("Transfer Agent") of (1)
instructions given in accordance with DTC's procedures from
an agent member directing the Trustee as Transfer Agent to
credit or cause to be credited a beneficial interest in the
Temporary Global Note in an amount equal to the beneficial
interest in the Restricted Global Note to be exchanged or
transferred, (2) a written order given in accordance with
DTC's procedures containing information regarding the
Euroclear or Cedel account to be credited with such increase
and the name of such account, and (3) a certificate in the
form of Exhibit A-3 attached hereto given by the holder of
such beneficial interest stating that the exchange or
transfer of such interest has been made in compliance with
the transfer restrictions applicable to the Notes and
pursuant to and in accordance with Regulation S, the Transfer
Agent shall instruct DTC to reduce the Restricted Global Note
by the aggregate principal amount of the beneficial interest
in the Restricted Global Note to be so exchanged or
transferred and the Transfer Agent shall instruct DTC,
concurrently with such reduction, to increase the principal
amount of the Temporary Global Note by the aggregate
principal amount of the beneficial interest in the Restricted
Global Note to be so exchanged or transferred, and to credit
or cause to be credited to the account of the person
specified in such instructions (who shall be the agent member
of Euroclear or Cedel, or both, as the case may be) a
beneficial interest in the Temporary Global Note equal to the
reduction in the principal amount of the Restricted Global
Note.
24
(iv) Restricted Global Note to Permanent Global Note
After the Exchange Date. If, after the Exchange Date, a
holder of a beneficial interest in the Restricted Global Note
registered in the name of DTC or its nominee wishes at any
time to exchange its interest in such Restricted Global Note
for an interest in the Permanent Global Note, or to transfer
its interest in such Restricted Global Note to a Person who
wishes to take delivery thereof in the form of an interest in
the Permanent Global Note, such holder may, subject to the
rules and procedures of DTC, exchange or cause the exchange
or transfer of such interest for an equivalent beneficial
interest in the Permanent Global Note. Upon receipt by the
Transfer Agent of (1) instructions given in accordance with
DTC's procedures from an agent member directing the Trustee
to credit or cause to be credited a beneficial interest in
the Permanent Global Note in an amount equal to the
beneficial interest in the Restricted Global Note to be
exchanged or transferred, (2) a written order given in
accordance with DTC's procedures containing information
regarding the participant account of DTC and, in the case of
a transfer pursuant to and in accordance with Regulation S,
the Euroclear or Cedel account to be credited with such
increase and (3) a certificate in the form of Exhibit A-4
attached hereto given by the holder of such beneficial
interest stating that the exchange or transfer of such
interest has been made in compliance with the transfer
restrictions applicable to the Notes (A) and pursuant to and
in accordance with Regulation S or (B) and that the Note
being exchanged or transferred is not a "restricted security"
as defined in Rule 144, the Trustee shall instruct DTC to
reduce the Restricted Global Note by the aggregate principal
amount of the beneficial interest in the Restricted Global
Note to be so exchanged or transferred and the Transfer Agent
shall instruct DTC, concurrently with such reduction, to
increase the principal amount of the Permanent Global Note by
the aggregate principal amount of the beneficial interest in
the Re-
25
stricted Global Note to be so exchanged or transferred, and
to credit or cause to be credited to the account of the
person specified in such instructions a beneficial interest
in the Permanent Global Note equal to the reduction in the
principal amount of the Restricted Global Note.
(v) Temporary Global Note to Restricted Global Note.
If a holder of a beneficial interest in the Temporary Global
Note registered in the name of DTC or its nominee wishes at
any time to exchange its interest in such Temporary Global
Note for an interest in the Restricted Global Note, or to
transfer its interest in such Temporary Global Note to a
Person who wishes to take delivery thereof in the form of an
interest in the Restricted Global Note, such holder may,
subject to the rules and procedures of Euroclear or Cedel and
DTC, as the case may be, exchange or cause the exchange or
transfer of such interest for an equivalent beneficial
interest in the Restricted Global Note. Upon receipt by the
Transfer Agent of (1) instructions from Euroclear or Cedel or
DTC, as the case may be, directing the Trustee to credit or
cause to be credited a beneficial interest in the Restricted
Global Note equal to the beneficial interest in the Temporary
Global Note to be exchanged or transferred, such instructions
to contain information regarding the agent member's account
with DTC to be credited with such increase, and, with respect
to an exchange or transfer of an interest in the Temporary
Global Note after the Exchange Date, information regarding
the agent member's account with DTC to be debited with such
decrease, and (2) with respect to an exchange or transfer of
an interest in the Temporary Global Note for an interest in
the Restricted Global Note prior to the Exchange Date, a
certificate in the form of Exhibit A-5 attached hereto given
by the holder of such beneficial interest and stating that
the Person transferring such interest in the Temporary Global
Note reasonably believes that the Person acquiring such
interest in the Restricted Global Note is a qualified
institu-
26
tional buyer (as defined in Rule 144A) and is obtaining such
beneficial interest in a transaction meeting the requirements
of Rule 144A, Euroclear or Cedel or the Trustee, as the case
may be, shall instruct DTC to reduce the Temporary Global
Note by the aggregate principal amount of the beneficial
interest in the Temporary Global Note to be exchanged or
transferred, and the Transfer Agent shall instruct DTC,
concurrently with such reduction, to increase the principal
amount of the Restricted Global Note by the aggregate
principal amount of the beneficial interest in the Temporary
Global Note to be so exchanged or transferred, and to credit
or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the
Restricted Global Note equal to the reduction in the
principal amount of the Temporary Global Note.
(vi) Permanent Global Note to Restricted Global
Note. Interests in the Permanent Global Note may not be
transferred for interests in the Restricted Global Note.
(vii) Transfers of Variable Funding Notes. The
Variable Funding Notes shall not be transferable except in
the limited circumstances, if any, described in the
applicable Supplement; provided, however, that the Variable
Funding Note may be pledged as security (and transferred) in
accordance with the terms of the Collateral Agreement and the
CP Program Documents (each as defined in the applicable
Supplement).
(viii) Other Transfers or Exchanges. In the event
that a Global Note is exchanged for Notes in definitive
registered form without interest coupons, pursuant to Section
2.18 hereof, such Notes may be exchanged or transferred for
one another only in accordance with such procedures as are
substantially consistent with the provisions of clauses (i)
through (vi) above (including the certification requirements
intended to insure that such exchanges or
27
transfers comply with Rule 144A or Regulation S, as the case
may be) and as may be from time to time adopted by AFC-II and
the Trustee.
(b) The Trustee shall not register the exchange of interests
in a Note for a Definitive Note or the transfer of or exchange of a
Note during the period beginning on any Record Date and ending on the
next following Distribution Date.
(c) AFC-II or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any exchange or registration of transfer of
Notes. No service charge shall be made for any such transaction.
(d) If the Notes are listed on the Luxembourg Stock Exchange,
the Trustee or the Luxembourg Agent, as the case may be, shall send to
AFC-II upon any transfer or exchange of any Note information reflected
in the copy of the register for the Notes maintained by the Registrar
or the Luxembourg Agent, as the case may be.
(e) To permit registrations of transfers and exchanges,
AFC-II shall execute and the Trustee shall authenticate Notes, subject
to such rules as the Trustee may reasonably require. No service charge
to the Noteholder shall be made for any registration of transfer or
exchange (except as otherwise expressly permitted herein), but the
Registrar may require payment of a sum sufficient to cover any
transfer tax or similar government charge payable in connection
therewith (other than any such transfer tax or similar governmental
charge payable upon exchanges pursuant to Section 2.13 hereof in which
event the Registrar will be responsible for the payment of any such
taxes).
(f) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of AFC-II, evidencing
the same debt, and entitled to the same benefits under this Indenture,
as the Notes surrendered upon such registration of transfer or
exchange.
28
(g) Prior to due presentment for registration of transfer of
any Note, the Trustee, any Agent and AFC-II may deem and treat the
Person in whose name any Note is registered (as of the day of
determination) as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Note and for
all other purposes whatsoever, whether or not such Note is overdue,
and neither the Trustee, any Agent nor AFC-II shall be affected by
notice to the contrary.
(h) Notwithstanding any other provision of this Section 2.9,
the typewritten Note or Notes representing Book-Entry Notes for any
Series may be transferred, in whole but not in part, only to another
nominee of the Clearing Agency for such Series, or to a successor
Clearing Agency for such Series selected or approved by AFC-II or to a
nominee of such successor Clearing Agency, only if in accordance with
this Section 2.9 and Section 2.18.
Section 2.10. Legending of Notes.
(a) Unless otherwise provided for in a Supplement and except
as permitted by the following sentence, each Note (other than any
Variable Funding Note) shall bear a legend in substantially the
following form:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
ANY STATE SECURITIES OR "BLUE SKY" LAWS. THE HOLDER HEREOF,
BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF AESOP
FUNDING II L.L.C. (THE "COMPANY") THAT THIS NOTE IS BEING
ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (1) TO THE COMPANY (UPON REDEMPTION THEREOF
OR OTHERWISE), (2) TO A PERSON WHO THE TRANSFEROR REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE UNITED STATES
TO A NON-U.S. PERSON (AS SUCH TERM IS DEFINED IN REGULATION S
OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
29
REGULATION S OF THE SECURITIES ACT OR (4) IN A TRANSACTION
COMPLYING WITH OR EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (SUBJECT IN THE CASE OF THIS CLAUSE (4)
TO RECEIPT OF SUCH CERTIFICATES AND OTHER DOCUMENTS AS THE
TRUSTEE MAY REQUIRE UNDER THE INDENTURE), IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
Upon any transfer, exchange or replacement of Notes bearing such
legend, or if a request is made to remove such legend on a Note, the
Notes so issued shall bear such legend, or such legend shall not be
removed, as the case may be, unless there is delivered to AFC-II and
the Trustee or the Luxembourg Agent, if the Notes are listed on the
Luxembourg Exchange, such satisfactory evidence, which may include an
opinion of counsel, as may be reasonably required by AFC-II that
neither such legend nor the restrictions on transfer set forth therein
are required to ensure that transfers thereof comply with the
provisions of Rule 144A, Rule 144 or Regulation S. Upon provision of
such satisfactory evidence, the Trustee, at the direction of AFC-II,
shall authenticate and deliver a Note that does not bear such legend.
(b) Unless otherwise provided for in a Supplement, each
Variable Funding Note shall bear a legend in substantially the
following form:
THIS VARIABLE FUNDING NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS. THE HOLDER
HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF
AESOP FUNDING II L.L.C. (THE "COMPANY") THAT THIS NOTE IS
BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION. THIS VARIABLE FUNDING NOTE IS NOT PERMITTED TO
BE TRANSFERRED, ASSIGNED OR OTHERWISE PLEDGED OR CONVEYED
EXCEPT IN COMPLIANCE WITH THE TERMS OF THE INDENTURE REFERRED
TO HEREIN.
30
Section 2.11. Replacement Notes.
(a) If (i) any mutilated Note is surrendered to the Trustee,
or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to
the Trustee such security or indemnity as may be required by it to
hold AFC-II, each Enhancement Provider and the Trustee harmless then,
in the absence of notice to AFC-II, the Registrar or the Trustee that
such Note has been acquired by a bona fide purchaser, and provided
that the requirements of Section 8-405 of the UCC (which generally
permit AFC-II to impose reasonable requirements) are met, AFC-II shall
execute and upon its request the Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed,
lost or stolen Note, a replacement Note; provided, however, that if
any such destroyed, lost or stolen Note, but not a mutilated Note,
shall have become or within seven days shall be due and payable,
instead of issuing a replacement Note, AFC-II may pay such destroyed,
lost or stolen Note when so due or payable without surrender thereof.
If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the
preceding sentence, a bona fide purchaser of the original Note in lieu
of which such replacement Note was issued presents for payment such
original Note, AFC-II and the Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was
delivered or any Person taking such replacement Note from such Person
to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover
upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by AFC-II or the Trustee in
connection therewith.
(b) Upon the issuance of any replacement Note under this
Section 2.11, AFC-II may require the payment by the Holder of such
Note of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other reasonable
expenses (including the fees and expenses of the Trustee) connected
therewith.
31
(c) Every replacement Note issued pursuant to this Section
2.11 in replacement of any mutilated, destroyed, lost or stolen Note
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section 2.11 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes.
Section 2.12. Treasury Notes.
In determining whether the Noteholders of the required
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by AFC-II or any Affiliate of AFC-II (other than the Series 1997-2
Notes (as defined in the related Supplement) owned by AFC) shall be considered
as though they are not Outstanding, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes of which the Trustee has received written notice of such
ownership shall be so disregarded. Absent written notice to the Trustee of such
ownership, the Trustee shall not be deemed to have knowledge of the identity of
the individual beneficial owners of the Notes.
Section 2.13. Temporary Notes.
(a) Pending the preparation of Definitive Notes issued under
Section 2.18 hereof, AFC-II may prepare and the Trustee, upon receipt
of a Company Order, shall authenticate and deliver temporary Notes of
such Series. Temporary Notes shall be substantially in the form of
Definitive Notes of like Series but may have variations that are not
inconsistent with the terms of this Indenture as the officers
executing such Notes may determine, as evidenced by their execution of
such Notes.
(b) If temporary Notes are issued pursuant to
Section 2.13(a) above, AFC-II will cause Definitive
Notes to be prepared without unreasonable delay.
After the preparation of Definitive Notes, the
32
temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of AFC-II to
be maintained as provided in Section 8.2, without charge to the
Noteholder. Upon surrender for cancellation of any one or more
temporary Notes, AFC-II shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount
of Definitive Notes of authorized denominations. Until so exchanged,
the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
Section 2.14. Cancellation.
AFC-II may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
AFC-II may have acquired in any manner whatsoever, and all Notes so delivered
shall be promptly cancelled by the Trustee. The Registrar and Paying Agent
shall forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee shall cancel all Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation.
AFC-II may not issue new Notes to replace Notes that it has redeemed or paid or
that have been delivered to the Trustee for cancellation. All cancelled Notes
held by the Trustee shall be disposed of in accordance with the Trustee's
standard disposition procedures unless by a written order, signed by two
Authorized Officers and received by the Trustee in a timely fashion, AFC-II
shall direct that cancelled Notes be returned to it.
Section 2.15. Principal and Interest.
(a) The principal of each Series of Notes shall be payable at
the times and in the amount set forth in the related Supplement and in
accordance with Section 6.1.
(b) Each Series of Notes shall accrue interest as provided in
the related Supplement and such interest shall be payable on each
Distribution Date for such Series in accordance with Section 6.1 and
the related Supplement.
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(c) Except as provided in the following sentence, the Person
in whose name any Note is registered at the close of business on any
Record Date with respect to a Distribution Date for such Note shall be
entitled to receive the principal and interest payable on such
Distribution Date notwithstanding the cancellation of such Note upon
any registration of transfer, exchange or substitution of such Note
subsequent to such Record Date. Any interest payable at maturity shall
be paid to the Person to whom the principal of such Note is payable.
(d) If AFC-II defaults in the payment of interest on the
Notes of any Series, such interest, to the extent paid on any date
that is more than five (5) Business Days after the applicable due
date, shall, at the option of AFC-II, cease to be payable to the
Persons who were Noteholders of such Series at the applicable Record
Date and AFC-II shall pay the defaulted interest in any lawful manner,
plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Noteholders of such Series on a
subsequent special record date which date shall be at least five (5)
Business Days prior to the payment date, at the rate provided in this
Indenture and in the Notes of such Series. AFC-II shall fix or cause
to be fixed each such special record date and payment date, and at
least 15 days before the special record date, AFC-II (or the Trustee,
in the name of and at the expense of AFC-II) shall mail to Noteholders
of such Series a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
Section 2.16. Book-Entry Notes.
(a) For each Series of Notes to be issued in registered form
(other than the Variable Funding Note), AFC-II shall duly execute the
Notes, and the Trustee shall, in accordance with Section 2.4 hereof,
authenticate and deliver initially one or more Global Notes that (a)
shall be registered on the Note Register in the name of DTC or DTC's
nominee, and (b) shall bear legends substantially to the following
effect:
34
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
AFC-II OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. ("CEDE")
OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE, HAS AN INTEREST
HEREIN.
So long as DTC or its nominee is the registered owner or
holder of a Global Note, DTC or its nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented by such Global
Note for purposes of this Indenture and such Notes. Members of, or participants
in, DTC shall have no rights under this Indenture with respect to any Global
Note held on their behalf by DTC, and DTC may be treated by AFC-II, the
Trustee, any Agent and any agent of such entities as the absolute owner of such
Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent AFC-II, the Trustee, any Agent and any agent of such
entities from giving effect to any written certification, proxy or other
authorization furnished by DTC or impair, as between DTC and its agent members,
the operation of customary practices governing the exercise of the rights of a
holder of any Note.
(b) Subject to Section 2.9(g), the provisions of the
"Operating Procedures of the Euroclear System" and the "Terms and
Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel,
respectively, shall be applicable to the Global Note insofar as
interests in a Global Note are held by the agent members of Euroclear
or Cedel (which shall only occur in the case of the Temporary Global
Note and the Permanent Global Note). Account holders or participants
in Euroclear and Cedel shall have no rights under this Indenture with
respect to such Global Note, and the registered holder may be treated
by AFC-II, the Trustee and any agent of AFC-II or
35
the Trustee as the owner of such Global Note for all
purposes whatsoever.
(c) Title to the Notes shall pass only by registration in the
Note Register maintained by the Registrar pursuant to Section 2.6.
(d) Any typewritten Note or Notes representing Book Entry
Notes shall provide that they represent the aggregate or a specified
amount of Outstanding Notes from time to time endorsed thereon and may
also provide that the aggregate amount of Outstanding Notes
represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a typewritten Note or Notes representing
Book-Entry Notes to reflect the amount, or any increase or decrease in
the amount, or changes in the rights of Note Owners represented
thereby, shall be made in such manner and by such Person or Persons as
shall be specified therein or in the Company Order to be delivered to
the Trustee pursuant to Section 2.4. Subject to the provisions of
Section 2.5, the Trustee shall deliver and redeliver any typewritten
Note or Notes representing Book-Entry Notes in the manner and upon
instructions given by the Person or Persons specified therein or in
the applicable Company Order. Any instructions by AFC-II with respect
to endorsement or delivery or redelivery of a typewritten Note or
Notes representing the Book-Entry Notes shall be in writing but need
not comply with Section 13.3 hereof and need not be accompanied by an
Opinion of Counsel.
(e) Unless and until definitive, fully registered Notes
("Definitive Notes") have been issued to Note Owners pursuant to
Section 2.18:
(i) the provisions of this Section 2.16
shall be in full force and effect;
(ii) the Paying Agent, the Registrar and the Trustee
may deal with the Clearing Agency and the Clearing Agency
Participants for all purposes of this Indenture (including
the making of payments on the Notes and the giving of
instructions or directions hereunder) as the authorized
representatives of the Note Owners;
36
(iii) to the extent that the provisions of this
Section 2.16 conflict with any other provisions of this
Indenture, the provisions of this Section 2.16 shall control;
(iv) whenever this Indenture requires or permits
actions to be taken based upon instructions or directions of
Holders of Notes evidencing a specified percentage of the
Outstanding principal amount of the Notes, the applicable
Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such
effect from Note Owners and/or their related Clearing Agency
Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes
and has delivered such instructions to the Trustee; and
(v) the rights of Note Owners shall be exercised
only through the applicable Clearing Agency and their related
Clearing Agency Participants and shall be limited to those
established by law and agreements between such Note Owners
and their related Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Notes are issued
pursuant to Section 2.18, the applicable Clearing Agencies
will make book-entry transfers among their related Clearing
Agency Participants and receive and transmit payments of
principal and interest on the Notes to such Clearing Agency
Participants.
Section 2.17. Notices to Clearing Agency.
Whenever notice or other communication to the Noteholders is
required under this Indenture, unless and until Definitive Notes shall have
been issued to Note Owners pursuant to Section 2.18, the Trustee and AFC-II
shall give all such notices and communications specified herein to be given to
Noteholders to the applicable Clearing Agency for distribution to the Note
Owners.
Section 2.18. Definitive Notes.
37
(a) Conditions for Issuance. Interests in a Restricted Global
Note or Permanent Global Note deposited with DTC pursuant to Section
2.5 shall be transferred to the beneficial owners thereof in the form
of definitive registered Notes only if such transfer complies with
Section 2.9 and (x) DTC notifies AFC-II that it is unwilling or unable
to continue as depositary for such Restricted Global Note or Permanent
Global Note or at any time ceases to be a "clearing agency" registered
under the Exchange Act, and a successor depositary so registered is
not appointed by AFC-II within 90 days of such notice or (y) AFC-II
determines that the Restricted Global Note or Permanent Global Note
with respect to the relevant Series of Notes shall be exchangeable for
definitive registered Notes, in which case Definitive Notes shall be
issuable or exchangeable only in respect of such Global Notes or the
category of Definitions Notes represented thereby or (z) any
Noteholder, purchaser or transferee of a Restricted Global Note or a
Permanent Global Note requests the same in the form of a Definitive
Note and AFC-II, in its sole discretion, consents to such request (in
which case a Definitive Note shall be issuable or transferable only to
such Noteholder, purchaser or transferee), AFC-II will deliver Notes
in definitive registered form, without interest coupons, in exchange
for the Restricted Global Notes or the Permanent Global Notes or, in
the case of an exchange or transfer described in clause (z) above, in
exchange for the applicable beneficial interest in one or more Global
Notes. Definitive registered Notes shall be issued without coupons in
amounts of U.S. $200,000 and integral multiples of U.S. $1,000,
subject to compliance with all applicable legal and regulatory
requirements.
(b) Issuance. If interests in any Restricted Global Note or
Permanent Global Note, as the case may be, are to be transferred to
the beneficial owners thereof in the form of definitive registered
Notes pursuant to this Section 2.18, such Restricted Global Note or
Permanent Global Note, as the case may be, shall be surrendered by DTC
to the office or agency of the Transfer Agent located in the Borough
of Manhattan, the City of New York, or if the Notes are listed on the
Luxembourg Stock Exchange, to the
38
applicable Luxembourg Agent in Luxembourg, to be so transferred,
without charge. If interests in any Permanent Global Note are to be
transferred to the beneficial owners thereof in the form of definitive
Notes pursuant to this Section 2.18, such Permanent Global Note shall
be surrendered by the custodian for DTC to the Transfer Agent or its
agent located in London to be so transferred, without charge. The
Trustee shall authenticate and deliver, upon such transfer of
interests in such Restricted Global Note or Permanent Global Note, an
equal aggregate principal amount of definitive registered Notes of
authorized denominations; provided, that in the case of an interest in
a Restricted Global Note, no such interest will be transferred except
upon (i) delivery of a Transfer Certificate substantially in the form
of Exhibit A-1 hereto and (ii) compliance with the conditions set
forth in Section 2.9. The definitive Notes transferred pursuant to
this Section 2.18 shall be executed, authenticated and delivered only
in the denominations specified in paragraph (a) above or in the
related Supplement, and definitive registered Notes shall be
registered in such names as DTC shall direct in writing. The Transfer
Agent shall have at least 30 days from the date of its receipt of
definitive Notes and registration information to authenticate and
deliver such definitive Notes. Any definitive registered Note
delivered in exchange for an interest in a Restricted Global Note or
Permanent Global Note shall, except as otherwise provided by Section
2.10, bear, and be subject to, the legend regarding transfer
restrictions set forth in Section 2.10. AFC-II will promptly make
available to the Transfer Agent a reasonable supply of definitive
Notes. AFC-II shall bear the costs and expenses of printing or
preparing any definitive Notes.
(c) Transfer of Definitive Notes. Subject to the terms of
this Indenture, the holder of any definitive registered Note may
transfer the same in whole or in part, in an amount equivalent to an
authorized denomination, by surrendering at the office maintained by
the Transfer Agent for such purpose in the Borough of Manhattan, The
City of New York, such Note with the form of transfer endorsed on it
duly completed and executed by, or accompanied
39
by a written instrument of transfer in form satisfactory to AFC-II and
the Transfer Agent by, the holder thereof and accompanied by a
Transfer Certificate substantially in the form of Exhibit A-1 hereto.
In exchange for any definitive registered Note properly presented for
transfer, AFC-II shall execute and the Trustee shall promptly
authenticate and deliver or cause to be authenticated and delivered in
compliance with applicable law, to the transferee at such office, or
send by mail (at the risk of the transferee) to such address as the
transferee may request, definitive registered Notes for the same
aggregate principal amount as was transferred. In the case of the
transfer of any definitive registered Note in part, AFC-II shall
execute and the Trustee shall also promptly authenticate and deliver
or cause to be authenticated and delivered to the transferor at such
office, or send by mail (at the risk of the transferor) to such
address as the transferor may request, definitive registered Notes for
the aggregate principal amount that was not transferred. No transfer
of any definitive registered Note shall be made unless the request for
such transfer is made by the registered holder at such office.
(d) Neither AFC-II nor the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Notes for such Series, the Trustee shall
recognize the Holders of the Definitive Notes as Noteholders of such
Series.
Section 2.19. Tax Treatment.
AFC-II has structured this Indenture and the Notes have been
(or will be) issued with the intention that the Notes will qualify under
applicable tax law as indebtedness of AFC-II and any entity acquiring any
direct or indirect interest in any Note by acceptance of its Notes (or, in the
case of a Note Owner, by virtue of such Note Owner's acquisition of a
beneficial interest therein) agrees to treat the Notes (or beneficial interests
therein) for purposes of Federal, state and local and income or franchise taxes
and any other tax imposed on or measured by income, as indebtedness of AFC-II.
40
Each Noteholder agrees that it will cause any Note Owner acquiring an interest
in a Note through it to comply with this Indenture as to treatment as
indebtedness for such tax purposes.
ARTICLE 3.
SECURITY
Section 3.1. Grant of Security Interest.
(a) To secure the AFC-II Obligations, AFC-II hereby pledges,
assigns, conveys, delivers, transfers and sets over to the Trustee,
for the benefit of the Noteholders (the "Secured Parties"), and hereby
grants to the Trustee, for the benefit of the Secured Parties, a
security interest in, all of AFC-II's right, title and interest in and
to all of AFC-II's assets, property and interests in property of any
kind or nature whatsoever (other than as specified below) whether now
or hereafter existing, acquired or created (all of the foregoing being
referred to as the "Collateral"), including without limitation, all of
the following property and interests in property:
(i) the AFC-II Agreements, including, without
limitation, the Loan Notes, all monies due and to become due
to AFC-II from AESOP Leasing and AESOP Leasing II under or in
connection with the AFC-II Agreements, whether payable as
principal, interest, fees, expenses, costs, indemnities,
insurance recoveries, damages for the breach of any of the
AFC-II Agreements or otherwise, and all rights, remedies,
powers, privileges and claims of AFC-II against any other
party under or with respect to the AFC-II Agreements (whether
arising pursuant to the terms of such AFC-II Agreements or
otherwise available to AFC-II at law or in equity), the right
to enforce any of the AFC-II Agreements as provided herein
and to give or withhold any and all consents, requests,
notices, directions, approvals, extensions or waivers under
or with respect to the AFC-II Agreements or the obligations
of any party thereunder, and
41
all AESOP I Loan Collateral and AESOP II Loan Collateral;
(ii) all right, title and interest of AFC-II in, to
and under the Leases, any books, records or computer programs
relating thereto, the right to enforce any of the Leases as
provided therein and in the Loan Agreements and to give or
withhold any and all consents, requests, notices, directions,
approvals, extensions or waivers under or with respect to the
Leases or the obligations of any party thereunder;
(iii) all right, title and interest of AFC-II in any
and all Vehicles and all Certificates of Title with respect
thereto, including all payments under insurance policies or
any warranty payable by reason of loss or damage to, or
otherwise with respect to, any of the Vehicles;
(iv) all right, title and interest of AFC-II in, to
and under any Manufacturer Programs as they relate to
Vehicles leased under the Leases and all monies due and to
become due in respect of such Vehicles from the Manufacturers
under or in connection with the Manufacturer Programs whether
payable as Vehicle repurchase prices, auction sales proceeds,
fees, expenses, costs, indemnities, insurance recoveries,
damages for breach of the Manufacturer Programs or otherwise
(but excluding all incentive payments payable in respect of
purchases of vehicles under the Manufacturer Programs) and
all rights to compel performance and otherwise exercise
remedies thereunder;
(v) all payments under insurance policies (whether
or not the Trustee is named as the loss payee thereof) or any
warranty payable by reason of loss or damage to, or otherwise
with respect to, any of the Vehicles;
(vi) all right, title and interest of AFC-II in and
to any proceeds from the sale of Vehicles leased under the
Leases, including all
42
monies due in respect of such Vehicles, whether payable as
the purchase price of such Vehicles, or as fees, expenses,
costs, indemnities, insurance recoveries, or otherwise
(including all upfront incentive payments payable by
Manufacturers in respect of purchases of Non-Program
Vehicles);
(vii) (a) the Collection Account, (b) all funds on
deposit therein from time to time, (c) all certificates and
instruments, if any, representing or evidencing any or all of
the Collection Account or the funds on deposit therein from
time to time, and (d) all Permitted Investments made at any
time and from time to time with the moneys in the Collection
Account (including income thereon);
(viii) all right, title and interest of AFC-II in
(a) the Termination Services Reserve Account, (b) all funds
on deposit therein from time to time, (c) all certificates
and instruments, if any, representing or evidencing any or
all of the Termination Services Reserve Account or the funds
on deposit therein from time to time, and (d) all Permitted
Investments made at any time and from time to time with the
moneys in the Termination Services Reserve Account (including
income thereon);
(ix) all additional property that may from time to
time hereafter (pursuant to the terms of any Supplement or
otherwise) be subjected to the grant and pledge hereof by
AFC-II or by anyone on its behalf; and
(x) all proceeds of any and all of the foregoing
including, without limitation, payments under insurance
(whether or not the Trustee is the loss payee thereof) or
Vehicle warranties and cash;
provided, however, the security interest of the Trustee on behalf of the
Secured Parties shall be deemed to be released with respect to amounts that are
released to the Administrator from the Termination Services Reserve Ac-
43
count on any Distribution Date in accordance with Section 3.7(d).
(b) The foregoing grant is made in trust to secure AFC-II
Obligations and to secure compliance with the provisions of this
Indenture and any Supplement, all as provided in this Indenture. The
Trustee, as Trustee on behalf of the Secured Parties, acknowledges
such grant, accepts the trusts under this Indenture in accordance with
the provisions of this Indenture and subject to Section 10.1 and 10.2,
agrees to perform its duties required in this Indenture to the best of
its abilities to the end that the interests of the Secured Parties may
be adequately and effectively protected. The Collateral shall secure
the Notes equally and ratably without prejudice, priority (except,
with respect to any Series of Notes, as otherwise stated in the
applicable Supplement) or distinction.
Section 3.2. Certain Rights and Obligations of AFC-II
Unaffected.
(a) Notwithstanding the assignment and security interest so
granted to the Trustee on behalf of the Secured Parties, AFC-II shall
nevertheless be permitted, subject to the Trustee's right to revoke
such permission in the event of an Amortization Event and subject to
the provisions of Section 3.3 hereof, to give all consents, requests,
notices, directions, approvals, extensions or waivers, if any, which
are required to be given in the normal course of business (which does
not include waivers of defaults under any of the AFC-II Agreements or
the Leases or any of the Manufacturer Programs or revocation of powers
of attorney to the Lessees) to AESOP Leasing or AESOP Leasing II by
AFC-II and by AESOP Leasing or AESOP Leasing II to the Manufacturers
by the specific terms of each of the Loan Agreements and each
Manufacturer Program, respectively.
(b) The assignment of the Collateral to the Trustee on behalf
of the Secured Parties shall not (i) relieve AFC-II from the
performance of any term, covenant, condition or agreement on AFC-II's
part to be performed or observed under or in connection with any of
AFC-II Agreements or from any liability to
44
AESOP Leasing, AESOP Leasing II or the Manufacturers, as the case may
be, or (ii) impose any obligation on the Trustee or any of the Secured
Parties to perform or observe any such term, covenant, condition or
agreement on AFC-II's part to be so performed or observed or impose
any liability on the Trustee or any of the Secured Parties for any act
or omission on the part of AFC-II or from any breach of any
representation or warranty on the part of AFC-II. AFC-II hereby agrees
to indemnify and hold harmless the Trustee and each Noteholder
(including, in each case, their respective directors, officers,
employees and agents) from and against any and all losses, liabilities
(including liabilities for penalties), claims, demands, actions,
suits, judgments, reasonable out-of-pocket costs and expenses arising
out of or resulting from the assignment granted hereby or by any
Assignment Agreement, whether arising by virtue of any act or omission
on the part of AFC-II or otherwise, including, without limitation, the
reasonable out-of-pocket costs, expenses, and disbursements (including
reasonable attorneys' fees and expenses) incurred by the Trustee and
any of the Noteholders in enforcing this Indenture or preserving any
of their respective rights to, or realizing upon, any of the
Collateral; provided, however, the foregoing indemnification shall not
extend to any action by the Trustee or a Noteholder which constitutes
gross negligence or willful misconduct by the Trustee, such Noteholder
or any other Indemnified Person hereunder. The indemnification
provided for in this Section 3.2 shall survive the removal of, or a
resignation by, such Person as Trustee as well as the termination of
this Indenture, any Supplement or any Assignment Agreement.
Section 3.3. Performance of Agreement.
Upon the occurrence of a Limited Liquidation Event of Default
or Liquidation Event of Default, promptly following a request from the Trustee
to do so and at AFC-II's expense, AFC-II agrees to take all such lawful action
as permitted under this Indenture as the Trustee may request to compel or
secure the performance and observance by: (i) AESOP Leasing, AESOP Leasing II
or any other party to any of the AFC-II Agreements or any other
45
Related Document of its obligations to AFC-II, (ii) the Administrator, ARC, any
Lessee or any other party to any Related Document of its obligations to AESOP
Leasing and AESOP Leasing II and (iii) a Manufacturer under a Manufacturer
Program of its obligations to AESOP Leasing, AESOP Leasing II and AFC-II, as
assignee, in each case in accordance with the applicable terms thereof, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to AFC-II to the extent and in the manner directed by the Trustee, including,
without limitation, the transmission of notices of default and the institution
of legal or administrative actions or proceedings to compel or secure
performance by AESOP Leasing and AESOP Leasing II (or such other party to any
AFC-II Agreement or any other Related Document), by the Administrator, ARC or
any Lessee (or such other party to any other Related Document) or by a
Manufacturer under a Manufacturer Program, of their respective obligations
thereunder. If (i) AFC-II, AESOP Leasing, AESOP Leasing II, the Administrator,
ARC or any Lessee shall have failed, within 30 days of receiving the direction
of the Trustee, to take commercially reasonable action to accomplish such
directions of the Trustee, (ii) AFC-II, AESOP Leasing, AESOP Leasing II, the
Administrator, ARC or any Lessee, as applicable, refuses to take any such
action, or (iii) the Trustee reasonably determines that such action must be
taken immediately, the Trustee may take such previously directed action and any
related action permitted under this Indenture which the Trustee thereafter
determines is appropriate (without the need under this provision or any other
provision under the Indenture to direct AFC-II to take such action), on behalf
of AFC-II and the Secured Parties.
Section 3.4. Release of Lien on Vehicles.
The Lien of the Trustee on the Vehicles shall automatically
be deemed to be released concurrently with any release thereof as provided in
Section 7.3 of each of the Loan Agreements.
Section 3.5. Stamp, Other Similar Taxes and Filing Fees.
AFC-II shall indemnify and hold harmless the Trustee and each
Noteholder from any present or future claim for liability for any stamp or
other similar tax
46
and any penalties or interest with respect thereto, that may be assessed,
levied or collected by any jurisdiction in connection with this Indenture or
any Collateral. AFC-II shall pay, or reimburse the Trustee for, any and all
amounts in respect of, all search, filing, recording and registration fees,
taxes, excise taxes and other similar imposts that may be payable or determined
to be payable in respect of the execution, delivery, performance and/or
enforcement of this Indenture.
Section 3.6. Vehicle Title Check.
The Trustee shall, on an annual basis, request that the
Borrowers cause a title check to be performed by an independent nationally
recognized firm of certified public accountants acceptable to the Trustee and
each Enhancement Provider on a statistical sample of all Vehicles leased under
the Leases designed to provide a ninety-five percent (95%) confidence level
that no more than five percent (5%) of the Certificates of Title for such
Vehicles did not correctly reference the Trustee or its Permitted Nominee, as
first lienholder, and the Lessor of such Vehicle or its Permitted Nominee or,
in the case of Financed Vehicles, ARAC or its Permitted Nominee, as owner, and
cause such party to deliver a report stating that, within the confidence level
set forth above, no more than five percent (5%) of the Certificates of Title
did not correctly reference the lienholder or owner of the Vehicles described
in the immediately preceding clause.
Section 3.7. Termination Services Reserve Account.
(a) Pursuant to Section 3 of the Administration Agreement,
there has been established and there shall be maintained the Termination
Services Reserve Account in the name of the Trustee for the benefit of the
Secured Parties. The Trustee shall possess all right, title and interest in all
moneys, instruments, securities and other property on deposit from time to time
in the Termination Services Reserve Account and the proceeds thereof for the
benefit of the Secured Parties. The Termination Services Reserve Account shall
be under the sole dominion and control of the Trustee for the benefit of the
Secured Parties. The Termination Services Reserve Account shall be maintained
(i) with a Qualified Institu-
47
tion, or (ii) as a segregated trust account with the corporate trust department
of a depository institution or trust company having corporate trust powers and
acting as trustee for funds deposited in the Termination Services Reserve
Account; provided that, if at any time such Qualified Institution is no longer
a Qualified Institution or the credit rating of any securities issued by such
depository institution or trust company shall be reduced to below BBB- by S&P
or Baa3 by ▇▇▇▇▇'▇, then the Trustee shall, within 30 days of such reduction,
establish a new Termination Services Reserve Account with a new Qualified
Institution. If the Termination Services Reserve Account is not maintained in
accordance with the previous sentence, then within 10 Business Days after
obtaining knowledge of such fact, the Trustee shall establish a new Termination
Services Reserve Account which complies with such sentence and transfer into
the new Termination Services Reserve Account all cash and investments from the
non-qualifying Termination Services Reserve Account. The Termination Services
Reserve Account has been initially established at ▇▇▇▇▇▇ Trust and Savings
Bank. The Trustee shall cause ▇▇▇▇▇▇ Trust and Savings Bank to execute an
agreement pursuant to which it agrees to comply with orders issued by the
Trustee directing the transfer or redemption of any security or other financial
asset credited to the Termination Services Reserve Account without consent of
AFC-II.
(b) Investment of Funds in the Termination Services Reserve
Account. AFC-II shall instruct the institution maintaining the Termination
Services Reserve Account to invest funds on deposit in the Termination Services
Reserve Account at all times in Permitted Investments selected by AFC-II;
provided, however, that any such investment shall mature not later than the
Business Day prior to the Distribution Date following the date on which such
funds were so invested. All such Permitted Investments shall be credited to the
Termination Services Account. Neither AFC-II nor the Trustee shall dispose of
(or permit the disposal of) any Permitted Investments prior to the maturity
thereof to the extent such disposal would result in a loss of principal of such
Permitted Investment.
(c) Earnings from Termination Services Reserve Account.
Subject to the restrictions set forth above, AFC-II shall have the authority
to instruct the Trustee
48
(which instructions shall be in writing) with respect to (i) the investment of
funds on deposit in the Termination Services Reserve Account and (ii)
liquidation of such investments. On each Distribution Date, the Trustee shall
withdraw all interest and earnings (net of losses and investment expenses) paid
on funds on deposit in the Termination Services Reserve Account during the
related Interest Period and distribute such amounts to the Administrator in
payment of a portion of the Monthly Administration Fee.
(d) Termination Services Reserve Draws and Reimbursements. On
or prior to the date which is five (5) days prior to the date on which any
payment is due from ARAC to WizCom pursuant to Section 2 of the Termination
Services Agreement, the Administrator shall deliver written evidence to the
Trustee that an amount at least equal to the amount of such payment has been
deposited by ARAC in a segregated account for the benefit of WizCom. In the
event that ARAC fails to make such deposit, the Administrator shall deliver to
the Trustee on the following day a written statement of an Authorized Officer
of ARAC describing such failure and the action that ▇▇▇▇ proposes to take with
respect thereto. If such failure has not been cured within four (4) days
following the date on which such payment is due from ARAC to WizCom pursuant to
the Termination Services Agreement, the Trustee shall, upon the written
direction (on which it may conclusively rely) of AFC-II delivered by 11:00 a.m.
(New York City time) on the fifth day following the date on which such payment
was due, withdraw an amount equal to the Termination Services Reserve Draw
Amount from the Termination Services Reserve Account and shall pay such amount
to WizCom on behalf of ARAC in payment of amounts then due under the
Termination Services Agreement. Pursuant to the Administration Agreement, the
Administrator will be obligated to reimburse any such withdrawal within two
Business Days thereof by deposit to the Termination Services Reserve Account of
an amount equal to such Termination Services Reserve Draw Amount plus interest
thereon at the applicable Lender's Carrying Cost Interest Rate from and
including the date of such withdrawal to but excluding the date of such
deposit.
(e) Termination of Termination Services Reserve Account.
After the termination of this Indenture and the payment in full of the AFC-II
Obligations, the
49
Trustee shall distribute any amounts remaining in the Termination Services
Reserve Account to the Administrator.
ARTICLE 4.
REPORTS
Section 4.1. Agreement of AFC-II to Provide Reports and
Instructions.
(a) Daily Reports. On each Business Day commencing on the
Initial Closing Date, AFC-II shall prepare and maintain, or cause to be
prepared and maintained, at the office of AFC-II a record (each, a "Daily
Report") setting forth the aggregate of the amounts deposited in the Collection
Account on the immediately preceding Business Day, which shall consist of: (A)
the aggregate amount of payments received from Manufacturers and/or auction
dealers under Manufacturer Programs related to Program Vehicles leased under
the AESOP I Operating Lease, the AESOP II Operating Lease and the Finance Lease
(separately stated) and in each case deposited in the Collection Account, plus
(B) the aggregate amount of proceeds received from third parties (other than
Manufacturers and auction dealers) with respect to the sale of Vehicles leased
under the AESOP I Operating Lease, the AESOP II Operating Lease and the Finance
Lease (separately stated) and in each case deposited in the Collection Account,
plus (C) the aggregate amount of other Collections deposited in the Collection
Account. AFC-II shall deliver a copy of the Daily Report for each Business Day
to the Trustee;
(b) Monthly Certificate. On each Determination Date, AFC-II
shall forward to the Trustee, the Paying Agent, the Administrative Agent, the
Rating Agencies and any Enhancement Provider, an Officer's Certificate of
AFC-II substantially in the form of Exhibit D (each, a "Monthly Certificate")
setting forth, inter alia, the following information (which, in the cases of
clauses (iii), (iv) and (v) below, will be expressed as a dollar amount per
$1,000 of the original principal amount of each Series of Notes and as a
percentage of the outstanding principal balance of the Notes as of such date):
(i) the aggregate amount of payments received from the
50
Manufacturers and/or auction dealers under Manufacturer Programs related to
Program Vehicles leased under the AESOP I Operating Lease, the AESOP II
Operating Lease and the Finance Lease (separately stated) and the aggregate
amount of payments received from third parties (other than Manufacturers and
auction dealers) with respect to the sale of Vehicles leased under the AESOP I
Operating Lease, the AESOP II Operating Lease and the Finance Lease (separately
stated) and in each case deposited in the Collection Account and the aggregate
amount of other Collections deposited in the Collection Account for the Related
Month with respect to such Determination Date; (ii) the Invested Percentage on
the last day of the Related Month of each Series of Notes and each class of
each Series; (iii) for each Series and each class of each Series, the total
amount to be distributed to Noteholders on the next succeeding Distribution
Date; (iv) for each Series and each class of each Series, the amount of such
distribution allocable to principal on the Notes; (v) for each Series and each
class of each Series, the amount of such distribution allocable to interest on
the Notes; (vi) the portion of the Monthly Administration Fee payable by the
Issuer and allocable to each Series and each class of each Series; (vii) for
each Series and each class of each Series, to the extent applicable, the amount
of Enhancement used or drawn in connection with the distribution to Noteholders
of such Series or class on the next succeeding Distribution Date, together with
the aggregate amount of remaining Enhancement not theretofore used or drawn;
(viii) for each applicable Series and each class of each Series, the existing
Carryover Controlled Amortization Amount, if any; (ix) the Pool Factor with
respect to such Related Month for each applicable Series and each class of each
Series; (x) a list of all Vehicles leased under the AESOP I Operating Lease,
the AESOP II Operating Lease and the Finance Lease (separately stated) at the
close of business on the last day of the Related Month; (xi) the aggregate Net
Book Value at the time of the respective sale of all Non-Program Vehicles
leased under the AESOP I Operating Lease and the Finance Lease (separately
stated) that were disposed of during the related Measurement Month; (xii) the
aggregate Disposition Proceeds with respect to all Non-Program Vehicles leased
under the AESOP I Operating Lease and the Finance Lease (separately stated)
that were disposed of during the related Measurement Month; (xiii) the
Aggregate Asset Amount and the amount of the Aggregate Asset
51
Amount Deficiency, if any, at the close of business on the last day of the
Related Month; (xiv) the aggregate Net Book Value of all Non-Program Vehicles
leased under the AESOP I Operating Lease and the Finance Lease (separately
stated) as of the last day of the Related Month; (xv) the Non-Program Fleet
Market Value of all Non-Program Vehicles leased under the AESOP I Operating
Lease and the Finance Lease as of the related Determination Date; (xvi) the
amount of Monthly Base Rent and any Supplemental Rent due under each Lease on
the next succeeding Payment Date (separately stated); (xvii) the amount of Loan
Interest, Monthly Loan Principal Amount and any other amounts due under each
Loan Agreement on the next succeeding Payment Date (separately stated); (xviii)
the amount on deposit in the Termination Services Reserve Account; (xix) the
amount of any withdrawals in respect of Termination Services Reserve Draw
Amounts from the Termination Services Reserve Account during the Related Month;
(xx) the amount, if any, of investment earnings on funds on deposit in the
Termination Services Reserve Account that will be distributed to the
Administrator on the next succeeding Distribution Date; (xxi) for each Series,
the Required Enhancement Amount with respect to such Series and whether an
Enhancement Deficiency exists with respect to such Series and the amount
thereof; (xxii) whether an AESOP I Operating Lease Vehicle Deficiency exists
and the amount thereof; and (xxiii) whether, to the knowledge of AFC-II, (A)
any Lien exists on any of the Collateral (other than Liens granted pursuant to
the Indenture and the other Related Documents or permitted thereunder) and (B)
any Lease Event of Default or Loan Event of Default has occurred; provided,
however, that the information set forth in clause (i) above shall be provided
only to the Trustee;
(c) Monthly Noteholders' Statement. On or before each
Distribution Date, AFC-II shall furnish to the Trustee a Monthly Noteholders'
Statement with respect to each Series of Notes substantially in the form of
Exhibit E;
(d) Instructions as to Withdrawals and Payments. AFC-II will
furnish, or cause to be furnished, to the Trustee or the Paying Agent, as
applicable, written instructions to make withdrawals and payments from the
Collection Account, the Termination Services Reserve Account and any other
accounts specified in a Supplement
52
and to make drawings under any Enhancement, as contemplated herein and in any
Supplement. The Trustee and the Paying Agent shall promptly follow any such
written instructions.
Section 4.2. Administrator. Pursuant to the Administration
Agreement, the Administrator has agreed to provide certain reports,
instructions and other services on behalf of AESOP Leasing, AESOP Leasing II
and AFC-II. The Noteholders by their acceptance of the Notes consent to the
provision of such reports by the Administrator in lieu of the Trustee or
AFC-II.
ARTICLE 5.
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 5.1. Collection Account.
(a) Establishment of Collection Account. The Trustee shall
establish and maintain in the name of the Trustee for the benefit of
the Secured Parties, or cause to be established and maintained, an
account (the "Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit
of the Secured Parties. The Trustee shall possess all right, title and
interest in all moneys, instruments, securities and other property on
deposit from time to time in the Collection Account and the proceeds
thereof for the benefit of the Secured Parties. The Collection Account
shall be under the sole dominion and control of the Trustee for the
benefit of the Secured Parties. The Collection Account shall be
maintained (i) with a Qualified Institution, or (ii) as a segregated
trust account with the corporate trust department of a depository
institution or trust company having corporate trust powers and acting
as trustee for funds deposited in the Collection Account; provided
that, if at any time such Qualified Institution is no longer a
Qualified Institution or the credit rating of any securities issued by
such depository institution or trust company shall be reduced to below
BBB- by S&P or Baa3 by ▇▇▇▇▇'▇, then the Trustee shall, within 30 days
of such reduction, establish a new Collection Account with a
53
new Qualified Institution. If the Collection Account is not maintained
in accordance with the previous sentence, then within 10 Business Days
after obtaining knowledge of such fact, the Trustee shall establish a
new Collection Account which complies with such sentence and transfer
into the new Collection Account all cash and investments from the
non-qualifying Collection Account. Initially, the Collection Account
will be established with ▇▇▇▇▇▇ Trust and Savings Bank. The Trustee
shall cause ▇▇▇▇▇▇ Trust and Savings Bank to execute an agreement
pursuant to which it agrees to comply with orders issued by the
Trustee directing the transfer or redemption of any security or other
financial asset credited to the Collection Account without consent of
AFC-II.
(b) Establishment of Additional Accounts. To the extent
specified in the Supplement with respect to any Series of Notes, the
Trustee may establish and maintain one or more additional accounts
and/or administrative sub-accounts to facilitate the proper allocation
of Collections in accordance with the terms of such Supplement.
(c) Administration of the Collection Account. AFC-II shall
instruct the institution maintaining the Collection Account to invest
funds on deposit in the Collection Account at all times in Permitted
Investments selected by AFC-II; provided, however, that any such
investment shall mature not later than the Business Day prior to the
Distribution Date following the date on which such funds were so
invested, except for any Permitted Investment held in the Collection
Account which is in an investment made by the Paying Agent
institution, in which event such investment may mature on such
Distribution Date and such funds shall be available for withdrawal on
or prior to such Distribution Date. All such Permitted Investments
will be credited to the Collection Account. Neither AFC-II nor the
Trustee shall dispose of (or permit the disposal of) any Permitted
Investments prior to the maturity thereof to the extent such disposal
would result in a loss of principal of such Permitted Investment.
54
(d) Earnings from Collection Account. Subject to the
restrictions set forth above, AFC-II shall have the authority to
instruct the Trustee (which instructions shall be in writing) with
respect to (i) the investment of funds on deposit in the Collection
Account and (ii) liquidation of such investments. All interest and
earnings (net of losses and investment expenses) paid on funds on
deposit in the Collection Account shall be deemed to be available and
on deposit for distribution.
Section 5.2. Collections and Allocations.
(a) Collections in General. Until this Indenture is
terminated pursuant to Section 11.1, AFC-II shall, and the Trustee is
authorized to, cause all Collections due and to become due to AFC-II
or the Trustee, as the case may be, (i) under or in connection with
the Collateral (including, without limitation, amounts due from
Manufacturers and related auction houses under their Manufacturer
Programs but excluding amounts representing the proceeds from sales of
Vehicles by AESOP Leasing, AESOP Leasing II or any Lessee to third
parties other than the Manufacturers, warranty payments and insurance
proceeds) to be paid directly to the Trustee or its agent for deposit
into the Collection Account; (ii) with respect to amounts representing
the proceeds from sales of Vehicles by AESOP Leasing, AESOP Leasing II
or any Lessee to third parties other than the Manufacturers to be
deposited by AESOP Leasing, AESOP Leasing II or any Lessee, as the
case may be, within two Business Days of its receipt thereof into the
Collection Account; (iii) under the Loan Agreements to be paid
directly to the Trustee for deposit into the Collection Account; and
(iv) from any other source to be paid either (a) directly into the
Collection Account at such times as such amounts are due or (b) by
AESOP Leasing, AESOP Leasing II or any Lessee into the Collection
Account within two Business Days of its receipt thereof (and, in each
case, AFC-II represents to the Secured Parties that it has instructed
AESOP Leasing, AESOP Leasing II, each Lessee, the Manufacturers, and
any other source of Collections, as applicable, to so remit such
amounts). Upon the occurrence and during the continuance of an
Amortization Event or Potential
55
Amortization Event, insurance proceeds and warranty payments will be
deposited in the Collection Account within two Business Days of their
receipt by AESOP Leasing, AESOP Leasing II or any Lessee; provided,
however, upon the delivery of an Officer's Certificate of AESOP
Leasing or AESOP Leasing II, as the case may be, to the Trustee (upon
which it may conclusively rely) certifying (i) that a Vehicle for
which insurance proceeds or warranty payments, as the case may be,
have been received in the Collection Account has been repaired and
(ii) as to the dollar amount of such repairs, the Trustee shall
release to AESOP Leasing or AESOP Leasing II, as applicable, insurance
proceeds or warranty payments, as the case may be, in such dollar
amount (to the extent not previously applied hereunder). AFC-II agrees
that if any such monies, instruments, cash or other proceeds shall be
received by AFC-II in an account other than the Collection Account or
in any other manner, such monies, instruments, cash and other proceeds
will not be commingled by AFC-II with any of its other funds or
property, if any, but will be held separate and apart therefrom and
shall be held in trust by AFC-II for, and immediately paid over to,
but in any event within two Business Days from receipt, the Trustee,
with any necessary endorsement. All monies, instruments, cash and
other proceeds received by the Trustee pursuant to this Indenture
shall be immediately deposited in the Collection Account and shall be
applied as provided in this Article 5. Notwithstanding the foregoing,
provided that all amounts due and payable under the Loan Agreements as
of any Payment Date have been paid in full and so long as an
Amortization Event shall not have occurred and be continuing and no
Potential Loan Event of Default under Section 12.1.1 of any of the
Loan Agreements shall result therefrom, to the extent that (i) the
aggregate amount of proceeds received in the Collection Account with
respect to Vehicles during the Related Month exceeds the aggregate of
the Termination Values of such Vehicles payable under the Loan
Agreements on the related Distribution Date, (ii) any amounts in
respect of payments to AESOP Leasing pursuant to Section 16.2 of the
AESOP I Operating Lease or the Finance Lease remain on deposit in the
Collection Account or (iii) any amounts in respect of payments
56
to AESOP Leasing II pursuant to Section 16.2 of the AESOP II Operating
Lease remain on deposit in the Collection Account, the Trustee shall,
upon the written direction (on which it may conclusively rely) of
AFC-II delivered by 12:00 noon (New York City time) on the second
Business Day prior to such Distribution Date (which direction AFC-II
agrees to give), release (x) in the case of clause (i) above, the
portion of such excess (to the extent not previously applied
hereunder) allocable to Vehicles financed under the AESOP II Loan
Agreement to AESOP Leasing II and the remaining portion of such excess
to AESOP Leasing (in each case, in accordance with such written
direction of AFC-II), (y) in the case of clause (ii) above, such
unreimbursed amounts to AESOP Leasing and (z) in the case of clause
(iii) above, such unreimbursed amounts to AESOP Leasing II. The
Trustee shall release such excess or amounts to AESOP Leasing or AESOP
Leasing II, as the case may be, by deposit to, (i) in the case of
AESOP Leasing, the AESOP I Segregated Account and, (ii) in the case of
AESOP Leasing II, the AESOP II Segregated Account, in each case on
such Distribution Date, or, if such written direction is received by
the Trustee after 12:00 noon (New York City time) on such Distribution
Date, on the next succeeding Business Day.
(b) Disqualification of Institution Maintaining Collection
Account. In the event the Qualified Institution maintaining the
Collection Account ceases to be such, then, upon the occurrence of
such event and the establishment of a new Collection Account with a
Qualified Institution or qualified corporate trust department pursuant
to Section 5.1(a) and thereafter, AFC-II shall deposit or cause to be
deposited all Collections as set forth in Section 5.2(a) into the new
Collection Account, and in no such event shall deposit or cause to be
deposited any Collections thereafter into any account established,
held or maintained with the institution formerly maintaining the
Collection Account (unless it later becomes a Qualified Institution or
qualified corporate trust department). AFC-II will instruct AESOP
Leasing and AESOP Leasing II as to the foregoing requirements of this
subsection (b).
57
(c) Sharing Collections. In the manner described in the
related Supplement, to the extent that Principal Collections that are
allocated to any Series on a Distribution Date are not needed to make
payments to Noteholders of such Series or required to be deposited in
a reserve account or a Distribution Account for such Series on such
Distribution Date, such Principal Collections may, at the direction of
AFC-II, be applied to cover principal payments due to or for the
benefit of Noteholders of another Series. Any such reallocation will
not result in a reduction in the Invested Amount of the Series to
which such Principal Collections were initially allocated.
(d) Unallocated Principal Collections. If, after giving
effect to Section 5.2(c), Principal Collections allocated to any
Series on any Distribution Date are in excess of the amount required
to be paid in respect of such Series on such Distribution Date, then
any such excess Principal Collections shall be allocated to AFC-II or
such other party as may be entitled thereto as set forth in any
Supplement.
Section 5.3. Determination of Monthly Interest.
Monthly interest with respect to each Series of Notes shall be
determined, allocated and distributed in accordance with the procedures set
forth in the applicable Supplement.
Section 5.4. Determination of Monthly Principal.
Monthly principal with respect to each Series of Notes shall be
determined, allocated and distributed in accordance with the procedures set
forth in the applicable Supplement. However, all principal or interest with
respect to any Series of Notes shall be due and payable no later than the
Series Termination Date with respect to such Series.
Section 5.5. Paired Series.
58
To the extent provided in a Supplement, any Series of Notes
may be paired with one or more other Series (each, a "Paired Series"). Each
Paired Series may be prefunded with an initial deposit to a pre-funding account
in an amount up to the initial principal balance of such Paired Series,
primarily from the proceeds of the sale of such Paired Series, or will have a
variable principal amount. Any such pre-funding account will be held for the
benefit of such Paired Series and not for the benefit of the Noteholders of the
Series paired therewith. As funds are accumulated in a principal funding
account or paid to Noteholders either (i) in the case of a pre-funded Paired
Series, an equal amount of funds on deposit in any pre-funding account for such
prefunded Paired Series will be released and paid to AFC-II or (ii) in the
case of a Paired Series having a variable principal amount, an interest in such
variable Paired Series in an equal or lesser amount may be sold by AFC-II and,
in either case, the invested amount of such Paired Series will increase by up
to a corresponding amount. Upon payment in full of the Series paired to the
Paired Series, the aggregate invested amount of such related Paired Series will
have been increased by an amount up to an aggregate amount equal to the
Invested Amount of such Series paid to the Noteholders thereof. The issuance of
a Paired Series may be subject to certain conditions described in the related
Supplement.
[THE REMAINDER OF ARTICLE 5 IS RESERVED AND MAY BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES.]
ARTICLE 6.
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
Section 6.1. Distributions in General.
(a) Notwithstanding any provision hereof or of any
Supplement, prior to depositing any amounts on deposit in the
Collection Account into any Distribution Account, all amounts due and
payable to the Trustee pursuant to Section 10.5 and Section 10.11 and
under the Vehicle Title and Lienholder Nominee Agreements (including
all costs and expenses incurred by the Trustee related to the
disposition of any Collateral), to the extent not already paid by
59
AFC-II, shall be withdrawn from the Collection Account and paid to the
Trustee. Unless otherwise specified in the applicable Supplement, on
each Distribution Date with respect to each Outstanding Series, after
payment of the amounts described in the preceding sentence, (i) the
Paying Agent shall deposit (in accordance with the Monthly Certificate
delivered to the Trustee) in the Distribution Account for each such
Series the amounts on deposit in the Collection Account allocable to
Noteholders of such Series as interest and, if during an Amortization
Period, principal, and (ii) to the extent provided for in the
applicable Supplement, the Trustee shall deposit in the Distribution
Account for each such Series the amount of Enhancement for such Series
drawn in connection with such Distribution Date.
(b) Unless otherwise specified in the applicable Supplement,
on each Distribution Date, the Paying Agent shall distribute to the
Noteholders of each Series, to the extent amounts are on deposit in
the Distribution Account for such Series, an amount sufficient to pay
all principal and interest due on such Series on such Distribution
Date in accordance with the Monthly Certificate delivered to the
Trustee. Such distribution shall be to each Noteholder of record of
such Series on the preceding Record Date based on such Noteholder's
pro rata share of the aggregate principal amount of the Notes of such
Series held by such Noteholder; provided, however, that, the final
principal payment due on a Note shall only be paid to the holder of a
Note on due presentment of such Note for cancellation in accordance
with the provisions of the Note.
(c) Unless otherwise specified in the applicable Supplement,
amounts distributable to a Noteholder pursuant to this Section 6.1
shall be payable by wire transfer of immediately available funds
released by the Paying Agent from the Distribution Account no later
than 12:00 noon (New York City time) for credit to the account
designated by such Noteholder.
(d) Unless otherwise specified in the applica-
ble Supplement (i) all distributions to Noteholders
60
of all classes within a Series of Notes will have the same priority
and (ii) in the event that on any date of determination the amount
available to make payments to the Noteholders of a Series is not
sufficient to pay all sums required to be paid to such Noteholders on
such date, then each class of Noteholders will receive its ratable
share (based upon the aggregate amount due to such class of
Noteholders) of the aggregate amount available to be distributed in
respect of the Notes of such Series.
(e) All distributions in respect of Notes represented by a
Temporary Global Note will be made only with respect to that portion
of the Temporary Global Note in respect of which Euroclear or Cedel
shall have delivered to the Trustee a certificate or certificates
substantially in the form of Exhibit B. The delivery to the Trustee by
Euroclear or Cedel of the certificate or certificates referred to
above may be relied upon by AFC-II and the Trustee as conclusive
evidence that the certificate or certificates referred to therein or
have been delivered to Euroclear or Cedel pursuant to the terms of
this Indenture and the Temporary Global Note. No payments of interest
will be made on a Temporary Global Note after the Exchange Date
therefor.
Section 6.2. Reserved.
Section 6.3. Optional Repurchase of Notes.
On any Distribution Date occurring on or after the date on
which the Invested Amount of any Series or class of such Series is equal to or
less than the Repurchase Amount (if any) for such Series or class set forth in
the Supplement related to such Series, or at such other time otherwise provided
for in the Supplement relating to such Series, AFC-II shall have the option to
purchase all Outstanding Notes of such Series, or class of such Series, at a
purchase price (determined after giving effect to any payment of principal and
interest on such Distribution Date) equal to (unless otherwise specified in the
related Supplement) the Invested Amount of such Series on such Distribution
Date, plus accrued and unpaid interest on the unpaid principal balance of the
Notes of such Series (calculated at the Note Rate of such Series) through the
day immediately prior to the date of
61
such purchase plus, if provided for in the related Supplement, any premium
payable at such time. AFC-II shall give the Trustee at least 30 days' prior
written notice of the date on which AFC-II intends to exercise such option to
purchase. Not later than 12:00 noon, New York City time, on such Distribution
Date, an amount of the purchase price equal to the Invested Amount of all Notes
of such Series on such Distribution Date and the amount of accrued and unpaid
interest with respect to such Notes and any applicable premium will be
deposited into the Distribution Account for such Series in immediately
available funds. The funds deposited into such Distribution Account or
distributed to the Paying Agent will be passed through in full to the
Noteholders on such Distribution Date.
Section 6.4. Monthly Noteholders' Statement.
(a) On each Distribution Date, the Paying Agent shall forward
to each Noteholder of record of each Outstanding Series the Monthly
Noteholders' Statement with respect to such Series, with a copy to the
Rating Agencies, the Trustee (if other than the Paying Agent) and any
Enhancement Provider with respect to such Series.
(b) Annual Noteholders' Tax Statement. On or before January
31 of each calendar year, beginning with calendar year 1998, the
Paying Agent shall furnish to each Person who at any time during the
preceding calendar year was a Noteholder a statement prepared by
AFC-II containing the information which is required to be contained in
the Monthly Noteholders' Statements with respect to each Series of
Notes aggregated for such calendar year or the applicable portion
thereof during which such Person was a Noteholder, together with such
other customary information (consistent with the treatment of the
Notes as debt) as AFC-II deems necessary or desirable to enable the
Noteholders to prepare their tax returns (each such statement, an
"Annual Noteholders' Tax Statement"). Such obligations of AFC-II to
prepare and the Paying Agent to distribute the Annual Noteholders' Tax
Statement shall be deemed to have been satisfied to the extent that
substantially comparable information shall be pro-
62
vided by the Paying Agent pursuant to any requirements of the Code as
from time to time in effect.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES
AFC-II hereby represents and warrants, for the benefit of the
Trustee and the Secured Parties, as follows as of each Series Closing Date:
Section 7.1. Existence and Power.
AFC-II (a) is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware,
(b) is duly qualified to do business as a foreign limited liability company and
in good standing under the laws of each jurisdiction where the character of its
property, the nature of its business or the performance of its obligations make
such qualification necessary, and (c) has all limited liability company powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and for purposes of the
transactions contemplated by this Indenture and the other Related Documents.
Section 7.2. Limited Liability Company and
Governmental Authorization.
The execution, delivery and performance by AFC-II of this
Indenture, the related Supplement and the other Related Documents to which it
is a party (a) is within AFC-II's limited liability company powers, has been
duly authorized by all necessary limited liability company action, (b) requires
no action by or in respect of, or filing with, any governmental body, agency or
official which has not been obtained and (c) does not contravene, or constitute
a default under, any provision of applicable law or regulation or of the
certificate of formation or limited liability company agreement of AFC-II or of
any law or governmental regulation, rule, contract, agreement, judgment,
injunction, order, decree or other instrument binding upon AFC-II or any of its
Assets or result in the creation or imposition of any Lien on any Asset of
AFC-II, except for Liens created by
63
this Indenture or the other Related Documents. This Indenture and each of the
other Related Documents to which AFC-II is a party has been executed and
delivered by a duly authorized officer of AFC-II.
Section 7.3. Binding Effect.
This Indenture and each other Related Document is a legal,
valid and binding obligation of AFC-II enforceable against AFC-II in accordance
with its terms (except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally or by general equitable
principles, whether considered in a proceeding at law or in equity and by an
implied covenant of good faith and fair dealing).
Section 7.4. Financial Information; Financial Condition.
All balance sheets, all statements of operations, of
shareholders' equity and of cash flow, and other financial data (other than
projections) which have been or shall hereafter be furnished by AFC-II to the
Trustee and the Rating Agencies pursuant to Section 8.3 have been and will be
prepared in accordance with GAAP (to the extent applicable) and do and will
present fairly the financial condition of the entities involved as of the dates
thereof and the results of their operations for the periods covered thereby,
subject, in the case of all unaudited statements, to normal year-end
adjustments and lack of footnotes and presentation items.
Section 7.5. Litigation.
There is no action, suit or proceeding pending against or, to
the knowledge of AFC-II, threatened against or affecting AFC-II before any
court or arbitrator or any Governmental Authority with respect to which there
is a reasonable possibility of an adverse decision that could materially
adversely affect the financial position, results of operations, business,
properties, performance, prospects or condition (financial or otherwise) of
AFC-II or which in any manner draws into question the validity or
enforceability of this Indenture, any Supplement or any other Related Document
or the
64
ability of AFC-II to perform its obligations hereunder or thereunder.
Section 7.6. No ERISA Plan.
AFC-II has not established and does not maintain or
contribute to any Pension Plan that is covered by Title IV of ERISA and will
not do so, as long as any Notes are Outstanding.
Section 7.7. Tax Filings and Expenses.
AFC-II has filed all federal, state and local tax returns and
all other tax returns which, to the knowledge of AFC-II, are required to be
filed (whether informational returns or not), and has paid all taxes due, if
any, pursuant to said returns or pursuant to any assessment received by AFC-II,
except such taxes, if any, as are being contested in good faith and for which
adequate reserves have been set aside on its books. AFC-II has paid all fees
and expenses required to be paid by it in connection with the conduct of its
business, the maintenance of its existence and its qualification as a foreign
limited liability company authorized to do business in each State in which it
is required to so qualify, except where the failure to pay any such fees and
expenses is not reasonably likely to have a Material Adverse Effect.
Section 7.8. Disclosure.
All certificates, reports, statements, documents and other
information furnished to the Trustee by or on behalf of AFC-II pursuant to any
provision of this Indenture or any Related Document, or in connection with or
pursuant to any amendment or modification of, or waiver under, this Indenture
or any Related Document, shall, at the time the same are so furnished, be
complete and correct to the extent necessary to give the Trustee true and
accurate knowledge of the subject matter thereof in all material respects, and
the furnishing of the same to the Trustee shall constitute a representation and
warranty by AFC-II made on the date the same are furnished to the Trustee to
the effect specified herein.
Section 7.9. Investment Company Act; Securities Act.
65
AFC-II is not, and is not controlled by, an "investment
company" within the meaning of, and is not required to register as an
"investment company" under, the Investment Company Act of 1940. It is not
necessary in connection with the issuance and sale of the Notes under the
circumstances contemplated in the related Supplement to register any security
under the Securities Act or to qualify any indenture under the Trust Indenture
Act.
Section 7.10. Regulations G, T, U and X.
The proceeds of the Notes will not be used to purchase or
carry any "margin stock" (as defined or used in the regulations of the Board of
Governors of the Federal Reserve System, including Regulations G, T, U and X
thereof). AFC-II is not engaged in the business of extending credit for the
purpose of purchasing or carrying any margin stock.
Section 7.11. No Consent.
No consent, action by or in respect of, approval or other
authorization of, or registration, declaration or filing with, any Governmental
Authority or other Person is required for the valid execution and delivery of
this Indenture or any Supplement or for the performance of any of AFC-II's
obligations hereunder or thereunder or under any other Related Document other
than such consents, approvals, authorizations, registrations, declarations or
filings as shall have been obtained by AFC-II prior to the Initial Closing Date
or as contemplated in Section 7.14.
Section 7.12. Solvency.
Both before and after giving effect to the transactions
contemplated by this Indenture and the other Related Documents, AFC-II is
solvent within the meaning of the Bankruptcy Code and AFC-II is not the subject
of any voluntary or involuntary case or proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy or insolvency law and no Event of Bankruptcy has occurred with
respect to AFC-II.
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Section 7.13. Ownership of Limited Liability Company
Interests; Subsidiary.
As of each Series Closing Date, all of the issued and
outstanding limited liability company interests of AFC-II are owned by AESOP
Leasing and Original AESOP, all of which limited liability company interests
have been validly issued, are fully paid and non-assessable and are owned of
record by such entities. AFC-II has no subsidiaries and owns no capital stock
of, or other interest in, any other Person.
Section 7.14. Security Interests.
(a) All action necessary (including the filing of UCC-1
financing statements, the assignment of rights under the Manufacturer
Programs to the Trustee and the notation on the Certificates of Title
for all Vehicles (other than the Initial PVT Vehicles, the Initial
Financed Vehicles, the Franchisee Vehicles and Vehicles titled in the
states of Nebraska, Ohio and Oklahoma) of the Trustee's Lien for the
benefit of the Secured Parties) to protect and perfect the Trustee's
security interest in the Collateral (except, as to perfection, with
respect to Vehicles titled in Nebraska, Ohio and Oklahoma) now in
existence and hereafter acquired or created has been duly and
effectively taken.
(b) No security agreement, financing statement, equivalent
security or lien instrument or continuation statement listing AFC-II
as debtor covering all or any part of the Collateral is on file or of
record in any jurisdiction, except such as may have been filed,
recorded or made by AFC-II in favor of the Trustee on behalf of the
Secured Parties in connection with this Indenture.
(c) This Indenture constitutes a valid and continuing Lien on
the Collateral in favor of the Trustee on behalf of the Secured
Parties, which Lien will be prior to all other Liens (other than
Permitted Liens), will be enforceable as such as against creditors of
and purchasers from AFC-II in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
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similar laws affecting creditors' rights generally or by general
equitable principles, whether considered in a proceeding at law or in
equity and by an implied covenant of good faith and fair dealing. All
action necessary to perfect such prior security interest has been duly
taken (except with respect to Vehicles titled in Nebraska, Ohio and
Oklahoma).
(d) AFC-II's principal place of business and chief executive
office shall be at: Two Wall Street, New York, New York 10005, and the
place where its records concerning the Collateral are kept is at: Two
Wall Street, New York, New York 10005. AFC-II does not transact, and
has not transacted, business under any other name.
(e) All authorizations in this Indenture for the Trustee to
endorse checks, instruments and securities and to execute financing
statements, continuation statements, security agreements, Certificates
of Title, and other instruments with respect to the Collateral are
powers coupled with an interest and are irrevocable.
Section 7.15. Binding Effect of Loan Agreements.
Each of the Loan Agreements is in full force and effect and
there are no outstanding Loan Events of Default thereunder or Manufacturer
Events of Default under the Leases nor have events occurred which, with the
giving of notice, the passage of time or both, would constitute a Loan Event of
Default or a Manufacturer Event of Default.
Section 7.16. Non-Existence of Other Agreements.
As of the date of the issuance of the first Series of Notes,
other than as permitted by Section 8.24 and Section 8.26 hereof (i) AFC-II is
not a party to any contract or agreement of any kind or nature and (ii) AFC-II
is not subject to any obligations or liabilities of any kind or nature in favor
of any third party, including, without limitation, Contingent Obligations.
Section 7.17. Manufacturer Programs.
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On the date of each Loan, each Manufacturer Program in
respect of which any portion of the Aggregate Asset Amount is calculated
(including any portion of the Aggregate Asset Amount comprising the value of
any Loans used to purchase Vehicles covered by such Manufacturer Program) shall
be an Eligible Manufacturer Program.
Section 7.18. Other Representations.
All representations and warranties of AFC-II made in each
Related Document to which it is a party are true and correct and are repeated
herein as though fully set forth herein.
ARTICLE 8.
COVENANTS
Section 8.1. Payment of Notes.
AFC-II shall pay the principal of (and premium, if any) and
interest on the Notes pursuant to the provisions of this Indenture and any
applicable Supplement. Principal and interest shall be considered paid on the
date due if the Paying Agent holds on that date money designated for and
sufficient to pay all principal and interest then due.
Section 8.2. Maintenance of Office or Agency.
AFC-II will maintain an office or agency (which may be an
office of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or exchange, where notices and demands
to or upon AFC-II in respect of the Notes and this Indenture may be served, and
where, at any time when AFC-II is obligated to make a payment of principal and
premium upon the Notes, the Notes may be surrendered for payment. AFC-II will
give prompt written notice to the Trustee of the location, and any change in
the location, of such office or agency. If at any time AFC-II shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
69
AFC-II may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. AFC-II
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
AFC-II hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of AFC-II.
Section 8.3. Information.
AFC-II will deliver or cause to be delivered to the Trustee
and each Rating Agency:
(a) promptly upon the delivery by each Borrower to AFC-II, a
copy of the financial information and other materials required to be
delivered by such Borrower to AFC-II pursuant to Section 9.5(i) of the
related Loan Agreements;
(b) from time to time such additional information regarding
the financial position, results of operations or business of each
Borrower as the Trustee may reasonably request to the extent that such
Borrower delivers such information to AFC-II pursuant to Section
9.5(iv) and (v) of the related Loan Agreements;
(c) at the time of delivery of the items described in clause
(a) above, a certificate of an officer of AFC-II that, except as
provided in any certificate delivered in accordance with Section 8.10,
no Amortization Event, Loan Event of Default or (to the best of such
officer's knowledge) Potential Amortization Event, Potential Loan
Event of Default, Lease Event of Default or Potential Lease Event of
Default has occurred or is continuing during such fiscal quarter;
(d) on or prior to June 30 of each year, a certificate of the
chief financial officer of AFC-II certifying that (i) the ratings
assigned by the Rating Agencies in respect of any outstanding Series
of Notes have not been withdrawn or downgraded since
70
the date of the related Supplement, (ii) no Rating Agency has
determined that the amount of Enhancement for any outstanding Series
of Notes must be increased in order to maintain the then current
rating of such Series or, if any Rating Agency has made such a
determination, the amount of additional Enhancement that would be
required in order to maintain such current rating, (iii) no change in
the Manufacturer Program of any Manufacturer in respect of any new
model year shall have given rise to any request on the part of the
Rating Agencies that any modification be made to any Loan Agreement or
any other Related Document, and (iv) AFC-II has apprised the Rating
Agencies of all material changes in the Manufacturer Programs
occurring since the date of this Indenture; and
(e) promptly following the introduction of any prospective
change in any Manufacturer Program or the introduction of any new
Manufacturer Program by an existing Manufacturer, or, if later, the
date AFC-II or any Lessee obtains notice thereof, notice of the same
and notice thereof to the Rating Agencies describing the principal
terms thereof, and at least annually a copy of each Manufacturer
Program to the Rating Agencies.
Section 8.4. Payment of Obligations.
AFC-II will pay and discharge, at or before maturity, all of
its respective material obligations and liabilities, including, without
limitation, tax liabilities and other governmental claims, except where the
same may be contested in good faith by appropriate proceedings, and will
maintain, in accordance with GAAP, reserves as appropriate for the accrual of
any of the same.
Section 8.5. Maintenance of Property.
AFC-II will keep, or will cause to be kept, all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted; provided, however, that nothing in this
Section 8.5 shall require AFC-II to maintain, or to make renewals,
replacements, additions, betterments or improvements of or to, any tangible
property, if such property, in the reasonable opinion of AFC-II, is obsolete or
surplus or
71
unfit for use and cannot be used advantageously in the
conduct of the business of AFC-II.
Section 8.6. Conduct of Business and Maintenance of
Existence.
AFC-II will maintain its existence as a limited liability
company validly existing, and in good standing under the laws of the State of
Delaware and duly qualified as a foreign limited liability company licensed
under the laws of each state in which the failure to so qualify would have a
material adverse effect on the business and operations of AFC-II.
Section 8.7. Compliance with Laws.
AFC-II will comply in all respects with all Requirements of
Law and all applicable laws, ordinances, rules, regulations, and requirements
of Governmental Authorities (including, without limitation, ERISA and the rules
and regulations thereunder) except where the necessity of compliance therewith
is contested in good faith by appropriate proceedings and where such
noncompliance would not materially and adversely affect the condition,
financial or otherwise, operations, performance, properties or prospects of
AFC-II or its ability to carry out the transactions contemplated in this
Indenture and each other Related Document; provided, however, such
noncompliance will not result in a Lien (other than a Permitted Lien) on any
Assets of AFC-II.
Section 8.8. Inspection of Property, Books and Records.
AFC-II will keep proper books of record and account in which
full, true and correct entries shall be made of all dealings and transactions
in relation to its Assets, business and activities in accordance with GAAP; and
will permit the Trustee to visit and inspect any of its properties, to examine
and make abstracts from any of its books and records and to discuss its
affairs, finances and accounts with its officers, directors, employees and
independent public accountants, all at such reasonable times upon reasonable
notice and as often as may reasonably be requested.
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Section 8.9. Compliance with Related Documents.
AFC-II will perform and comply with each and every
obligation, covenant and agreement required to be performed or observed by it
in or pursuant to this Indenture and each other Related Document to which it is
a party and will not take any action which would permit AESOP Leasing, AESOP
Leasing II or any Lessee to have the right to refuse to perform any of its
respective obligations under any Related Document. AFC-II will not amend any of
the Loan Agreements, except in accordance with Article 12 hereof.
Section 8.10. Notice of Defaults.
(a) Promptly upon becoming aware of any Potential
Amortization Event, Amortization Event, Potential Loan Event of
Default, Loan Event of Default, Potential Lease Event of Default or
Lease Event of Default, AFC-II shall give the Trustee, each
Enhancement Provider and the Rating Agencies notice thereof, together
with a certificate of the President, Vice President or principal
financial officer of AFC-II setting forth the details thereof and any
action with respect thereto taken or contemplated to be taken by
AFC-II, and
(b) Promptly upon becoming aware of any default under any
Related Document or under any Manufacturer Program, AFC-II shall give
the Trustee, each Enhancement Provider and the Rating Agencies notice
thereof.
Section 8.11. Notice of Material Proceedings.
Promptly upon becoming aware thereof, AFC-II shall give the
Trustee and the Rating Agencies written notice of the commencement or existence
of any proceeding by or before any Governmental Authority against or affecting
AFC-II which is reasonably likely to have a material adverse effect on the
business, condition (financial or otherwise), results of operations, properties
or performance of AFC-II or the ability of AFC-II to perform its obligations
under this Indenture or under any other Related Document to which it is a
party.
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Section 8.12. Further Requests.
AFC-II will promptly furnish to the Trustee, each Enhancement
Provider and the Rating Agencies such other information as, and in such form
as, the Trustee or such Enhancement Provider or the Rating Agencies may
reasonably request in connection with the transactions contemplated hereby.
Section 8.13. Further Assurances.
(a) AFC-II shall do such further acts and things, and execute
and deliver to the Trustee such additional assignments, agreements,
powers and instruments, as the Trustee or the Required Noteholders
reasonably determines to be necessary to carry into effect the
purposes of this Indenture or the other Related Documents or to better
assure and confirm unto the Trustee or the Noteholders their rights,
powers and remedies hereunder including, without limitation, the
filing of any financing or continuation statements under the Uniform
Commercial Code in effect in any jurisdiction with respect to the
liens and security interests granted hereby. AFC-II also hereby
acknowledges that the Trustee has the right but not the obligation to
file any such financing statement or continuation statement without
the signature of AFC-II to the extent permitted by applicable law. If
any amount payable under or in connection with any of the Collateral
shall be or become evidenced by any promissory note, chattel paper or
other instrument, such note, chattel paper or instrument shall be
deemed to be held in trust and immediately pledged and physically
delivered to the Trustee hereunder, and shall, subject to the rights
of any Person in whose favor a prior ▇▇▇▇ has been perfected, be duly
endorsed in a manner satisfactory to the Trustee and delivered to the
Trustee promptly. Without limiting the generality of the foregoing
provisions of this Section 8.13(a), AFC-II shall take all actions that
are required to maintain the security interest of the Trustee on
behalf of the Secured Parties in the Collateral as a perfected
security interest subject to no prior Liens, including, without
limitation (i) filing all Uniform Commercial Code financing
statements, continuation statements and amendments thereto necessary
to
74
achieve the foregoing, (ii) causing the Lien of the Trustee to be
noted on all Certificates of Title (other than on Certificates of
Title with respect to the (1) Initial PVT Vehicles and the Initial
Financed Vehicles, which Certificates of Title shall reflect the lien
of BONY, (2) Franchisee Vehicles, which Certificates of Title shall
reflect the lien of the nominee lienholder under the applicable
Franchisee Nominee Agreement, and (3) Vehicles located in Ohio,
Oklahoma and Nebraska) and (iii) causing the Administrator, as agent
for the Trustee, to maintain possession of the Certificates of Title
for the benefit of the Trustee pursuant to Section 10 of each of the
Leases. AFC-II further agrees that it will not, without the prior
written consent of the Trustee and without prior written notice to the
Enhancement Providers, exercise any right, remedy, power or privilege
available to it with respect to any obligor under the Collateral, take
any action to compel or secure performance or observance by any
obligor of its obligations to AFC-II, or give any consent, request,
notice, direction, approval, extension or waiver with respect to any
obligor.
(b) AFC-II will warrant and defend the Trustee's right, title
and interest in and to the Collateral and the income, distributions
and proceeds thereof, for the benefit of the Trustee on behalf of the
Secured Parties, against the claims and demands of all Persons
whomsoever.
(c) If so requested by the Trustee or by Noteholders holding
10% or in excess of 10% of the aggregate Invested Amount of any Series
of Notes (excluding for the purposes of making the foregoing
calculation, any Notes held by ARC or any Affiliate of ARC), AFC-II
will provide, no more frequently than annually, an Opinion of Counsel
to the effect that no UCC financing or continuation statements are
required to be filed with respect to any of the Collateral in which a
security interest may be perfected by the filing of UCC financing
statements.
Section 8.14. Manufacturer Programs.
(a) Prior to making any Loans with respect to any Program
Vehicles for any model year or years
75
after the 1997 model year, AFC-II will have received (i) an executed
Assignment Agreement with respect to such Manufacturer Program for
such model year or years, (ii) if any Series of Notes or Commercial
Paper Notes is then being rated by a Rating Agency, a written
confirmation from each such Rating Agency that the acquisition of
Vehicles pursuant to such Manufacturer Program satisfies the Rating
Agency Consent Condition and the CP Rating Agency Condition in respect
of any outstanding Series of Notes or Commercial Paper Notes, as
applicable, and (iii) if there is a material change to a Manufacturer
Program during a model year, written confirmation from each Rating
Agency that the acquisition of Vehicles pursuant to such Manufacturer
Program satisfies the Rating Agency Consent Condition and the CP
Rating Agency Condition in respect of any outstanding Series of Notes
or Commercial Paper Notes, as applicable. A copy of the rating
confirmations set forth in clauses (ii) and (iii) will promptly be
delivered to the Trustee for delivery to the Noteholders of any
outstanding Series of Notes.
(b) AFC-II will (a) provide the Trustee with at least 30
days' prior written notice of its intention to make Loans to AESOP
Leasing or AESOP Leasing II, as the case may be, for the financing of
Program Vehicles from any new Manufacturer, (b) provide the Trustee
with a copy of the draft Manufacturer Program of such Manufacturer as
it exists at the time of such notice and a copy of the final
Manufacturer Program promptly upon its being available and (c) certify
to the Trustee and the Noteholders that such Manufacturer Program is
an Eligible Manufacturer Program at such time. In no event shall
AFC-II agree, to the extent any consent of AFC-II is solicited or
required by the Manufacturer or any assignor of such Manufacturer
Program, to any change in any Manufacturer Program that is reasonably
likely to materially adversely affect its rights or the rights of the
Noteholders with respect to any Program Vehicle previously purchased
or financed under such Manufacturer Program.
Section 8.15. Liens.
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AFC-II will not create, incur, assume or permit to exist any
Lien upon any of its Assets (including the Collateral), other than (i) Liens in
favor of the Trustee for the benefit of the Secured Parties, and (ii) Permitted
Liens.
Section 8.16. Other Indebtedness.
AFC-II will not create, assume, incur, suffer to exist or
otherwise become or remain liable in respect of any Indebtedness other than (i)
Indebtedness hereunder and (ii) Indebtedness permitted under any other Related
Document.
Section 8.17. Mergers.
AFC-II will not merge or consolidate with or into any other
Person.
Section 8.18. Sales of Assets.
AFC-II will not sell, lease, transfer, liquidate or otherwise
dispose of any Assets, except as contemplated by the Related Documents and
provided that the proceeds received by AFC-II are paid directly to the
Collection Account or deposited by AFC-II into the Collection Account within
two Business Days after receipt thereof by AFC-II.
Section 8.19. Acquisition of Assets.
AFC-II will not acquire, by long-term or operating lease or
otherwise, any Assets except in accordance with the terms of the Related
Documents.
Section 8.20. Dividends, Officers' Compensation, etc.
AFC-II will not (i) declare or pay any distributions on any
of its limited liability company interests or make any purchase, redemption or
other acquisition of, any of its limited liability company interests; provided,
however, that so long as no Amortization Event or Potential Amortization Event
has occurred and is continuing or would result therefrom, AFC-II may declare
and pay distributions out of earnings computed in accordance with GAAP or (ii)
pay any wages or salaries or other compensa-
77
tion to officers, directors, employees or others except out of earnings
computed in accordance with GAAP.
Section 8.21. Name; Principal Office.
AFC-II will neither (a) change the location of its chief
executive office or principal place of business (within the meaning of the
applicable UCC) without sixty (60) days' prior written notice to the Trustee
nor (b) change its name without prior written notice to the Trustee sufficient
to allow the Trustee to make all filings (including filings of financing
statements on form UCC-1) and recordings necessary to maintain the perfection
of the interest of the Trustee on behalf of the Secured Parties in the
Collateral pursuant to this Indenture. In the event that AFC-II desires to so
change its office or change its name, AFC-II will make any required filings and
prior to actually changing its office or its name AFC-II will deliver to the
Trustee (i) an Officers' Certificate and (except with respect to a change of
the location of AFC-II's chief executive office or principal place of business
to a new location in the same county) an Opinion of Counsel confirming that all
required filings have been made to continue the perfected interest of the
Trustee on behalf of the Secured Parties in the Collateral in respect of the
new office or new name of AFC-II and (ii) copies of all such required filings
with the filing information duly noted thereon by the office in which such
filings were made.
Section 8.22. Organizational Documents.
AFC-II will not amend any of its organizational documents,
including its certificate of formation or limited liability company agreement
unless, prior to such amendment, each Rating Agency confirms that after such
amendment the Rating Agency Consent Condition will be met.
Section 8.23. Investments.
AFC-II will not make, incur, or suffer to exist any loan,
advance, extension of credit or other investment in any Person other than
pursuant to the Loan Agreements and with respect to Permitted Investments and,
in addition, without limiting the generality of the foregoing, AFC-II will not
cause the Trustee to make any Per-
78
mitted Investments on AFC-II's behalf that would have the effect of causing
AFC-II to be an "investment company" within the meaning of the Investment
Company Act.
Section 8.24. No Other Agreements.
AFC-II will not (a) enter into or be a party to any agreement
or instrument other than any Related Document or any documents related to any
Enhancement or documents and agreements incidental thereto or entered into as
contemplated in Section 8.26 or (b) except as provided for in Sections 12.1 or
12.2, amend, modify or waive any provision of any Related Document to which it
is a party, or (c) give any approval or consent or permission provided for in
any Related Document, except as permitted in Section 3.2(a).
Section 8.25. Other Business.
AFC-II will not engage in any business or enterprise or enter
into any transaction other than the making of Loans to AESOP Leasing and AESOP
Leasing II pursuant to the Loan Agreements, the related exercise of its rights
as lender thereunder, the incurrence and payment of ordinary course operating
expenses, the issuing and selling of the Notes and other activities related to
or incidental to either of the foregoing (including transactions contemplated
in Sections 8.24 and 8.26).
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Section 8.26. Maintenance of Separate Existence.
AFC-II will do all things necessary to continue to be readily
distinguishable from ARC, each Lessee, AESOP Leasing, Original AESOP, AESOP
Leasing II, AFC and the Affiliates of the foregoing and maintain its limited
liability company existence separate and apart from that of AESOP Leasing,
Original AESOP, AESOP Leasing II, AFC, each Lessee and ARC and Affiliates of
the foregoing including, without limitation, (i) practicing and adhering to
organizational formalities, such as maintaining appropriate books and records;
(ii) observing all organizational formalities in connection with all dealings
between itself and ARC, each Lessee, AESOP Leasing, Original AESOP, AESOP
Leasing II, AFC, the Affiliates of the foregoing or any other unaffiliated
entity; (iii) observing all procedures required by its certificate of
formation, its limited liability company agreement and the laws of the State of
Delaware; (iv) acting solely in its name and through its duly authorized
officers or agents in the conduct of its businesses; (v) managing its business
and affairs by or under the direction of its Managers; (vi) ensuring that its
Chairman of the Managers (or its Managers, when necessary) duly authorizes all
of its actions; (vii) ensuring the receipt of proper authorization, when
necessary, from its Members for its actions; (viii) maintaining at least one
Manager who is an Independent Manager; (ix) owning or leasing (including
through shared arrangements with Affiliates) all office furniture and equipment
necessary to operate its business; (x) not (A) having or incurring any
indebtedness to AESOP Leasing or AESOP Leasing II ; (B) guaranteeing or
otherwise becoming liable for any obligations of AESOP Leasing, Original AESOP,
AESOP Leasing II, AFC, any Lessee or ARC or any Affiliates of the foregoing;
(C) other than as provided in the Related Documents, having obligations
guaranteed by AESOP Leasing, Original AESOP, AESOP Leasing II, AFC, any Lessee,
ARC or any Affiliates of the foregoing; (D) holding itself out as responsible
for debts of AESOP Leasing, AESOP Leasing II, AFC, any Lessee or ARC or any
Affiliates of the foregoing or for decisions or actions with respect to the
affairs of AESOP Leasing, AESOP Leasing II, AFC, any Lessee or ARC or any
Affiliates of the foregoing; (E) failing to correct any known misrepresentation
with respect to the statement in subsection (C); (F) operating or purporting to
operate as
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an integrated, single economic unit with respect to AESOP Leasing, Original
AESOP, AESOP Leasing II, AFC, any Lessee, ARC, the Affiliates of the foregoing
or any other unaffiliated entity; (G) seeking to obtain credit or incur any
obligation to any third party based upon the assets of AESOP Leasing, Original
AESOP, AESOP Leasing II, AFC, any Lessee, ARC, the Affiliates of the foregoing
or any other unaffiliated entity; (H) induce any such third party to reasonably
rely on the creditworthiness of AESOP Leasing, Original AESOP, AESOP Leasing
II, AFC, any Lessee, ARC, the Affiliates of the foregoing or any other
unaffiliated entity; and (I) being directly or indirectly named as a direct or
contingent beneficiary or loss payee on any insurance policy of AESOP Leasing,
Original AESOP, AESOP Leasing II, AFC, any Lessee, ARC or any Affiliates of the
foregoing other than as required by the Related Documents with respect to
insurance on the Vehicles; (xi) other than as provided in the Related
Documents, maintaining its deposit and other bank accounts and all of its
assets separate from those of any other Person; (xii) maintaining its financial
records separate and apart from those of any other Person; (xiii) disclosing in
its annual financial statements the effects of the transactions contemplated by
the Related Documents in accordance with generally accepted accounting
principles; (xiv) setting forth clearly in its financial statements its
separate assets and liabilities and the fact that the Vehicles subject to the
AESOP I Operating Lease are owned by AESOP Leasing and that the Vehicles
subject to the AESOP II Operating Lease are owned by AESOP Leasing II; (xv) not
suggesting in any way, within its financial statements, that its assets are
available to pay the claims of creditors or AESOP Leasing, Original AESOP,
AESOP Leasing II, AFC, any Lessee, ARC, the Affiliates of the foregoing or any
other affiliated or unaffiliated entity; (xvi) compensating all its employees,
officers, consultants and agents for services provided to it by such Persons
out of its own funds; (xvii) maintaining office space separate and apart from
that of AESOP Leasing, Original AESOP, AESOP Leasing II, AFC, any Lessee or ARC
or any Affiliates of the foregoing (even if such office space is subleased from
or is on or near premises occupied by AESOP Leasing, Original AESOP, AESOP
Leasing II, AFC, any Lessee or ARC or any Affiliates of the foregoing) and a
telephone number separate and apart from that of AESOP Leasing, Original AESOP,
AESOP Leasing II, AFC, any Lessee or ARC or any Affiliates of the forego-
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ing; (xviii) conducting all oral and written communications, including, without
limitation, letters, invoices, purchase orders, contracts, statements, and
applications solely in its own name; (xix) having separate stationary from
AESOP Leasing, Original AESOP, AESOP Leasing II, AFC, each Lessee, ARC, the
Affiliates of the foregoing or any other unaffiliated entity; (xx) having no
debt or obligations to any of AESOP Leasing, Original AESOP, AESOP Leasing II,
AFC, any Lessee, ARC, the Affiliates of the foregoing or any other unaffiliated
entity, except for the obligations under the Variable Funding Note to be
acquired by AFC; (xxi) accounting for and managing all of its liabilities
separately from those of AESOP Leasing, Original AESOP, AESOP Leasing II, AFC,
each Lessee or ARC or any Affiliates of the foregoing; (xxii) allocating, on an
arm's length basis, all shared corporate operating services, leases and
expenses, including, without limitation, those associated with the services of
shared consultants and agents and shared computer and other office equipment
and software; and otherwise maintaining an arm's-length relationship with each
of AESOP Leasing, Original AESOP, AESOP Leasing II, AFC, each Lessee, ARC, the
Affiliates of the foregoing or any other unaffiliated entity; (xxiii)
refraining from filing or otherwise initiating or supporting the filing of a
motion in any bankruptcy or other insolvency proceeding involving AESOP
Leasing, Original AESOP, AESOP Leasing II, AFC, each Lessee, ARC or any
Affiliate of ARC, to substantively consolidate AESOP Leasing, Original AESOP,
AESOP Leasing II, AFC, AFC-II with any Lessee, ARC or any Affiliate of ARC;
(xxiv) remaining solvent and assuring adequate capitalization for the business
in which it is engaged and (xxvi) conducting all of its business (whether
written or oral) solely in its own name so as not to mislead others as to the
identity of each of AESOP Leasing, Original AESOP, AESOP Leasing II, AFC, each
Lessee, ARC and the Affiliates of the foregoing. AFC-II acknowledges its
receipt of a copy of those certain opinion letters issued by ▇▇▇▇▇▇▇, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP dated July 30, 1997 addressing the issue of
substantive consolidation as they may relate to any of each Lessee, ARC and
each affiliate of ARC on the one hand and any of AESOP Leasing II, Original
AESOP, AFC, AFC-II and AESOP Leasing on the other hand and as among AESOP
Leasing II, AESOP Leasing, Original AESOP, AFC-II and AFC. AFC-II hereby agrees
to maintain in place all policies and procedures, and take and continue to take
all action, described in
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the factual assumptions set forth in such opinion letter and relating to it. On
an annual basis, AFC-II will provide to the Rating Agencies and the Trustee an
Officer's Certificate certifying that it is in compliance with its obligations
under this Section 8.26.
Section 8.27. Rule 144A Information Requirement.
For so long as any of the Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, AFC-II covenants and agrees that it shall, during any period in
which it is not subject to Section 13 or 15(d) under the Exchange Act, make
available to any Noteholder in connection with any sale thereof and any
prospective purchaser of Notes from such Noteholder in each case upon request,
the information specified in, and meeting the requirements of, Rule 144A(d)(4)
under the Securities Act.
Section 8.28. Use of Proceeds of Notes.
AFC-II shall use the proceeds of Notes solely for one or more
of the following purposes: (a) to pay amortizing Notes when due, in accordance
with this Indenture; and (b) to fund Loans pursuant to the Loan Agreements.
Section 8.29. Vehicles.
AFC-II shall use commercially reasonable efforts to cause
AESOP Leasing and AESOP Leasing II (and ARAC, to the extent applicable) to
maintain good, legal and marketable title to the Vehicles purchased with
proceeds of Loans (and, in the case of ARAC, leased to ARAC under the Finance
Lease), free and clear of all Liens except for Permitted Liens.
ARTICLE 9.
AMORTIZATION EVENTS AND REMEDIES
Section 9.1. Amortization Events.
If any one of the following events shall occur during the
Revolving Period, the Accumulation Period or
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the Controlled Amortization Period with respect to any Series of Notes (each,
an "Amortization Event"):
(a) AFC-II defaults in the payment of any interest on any
Note of such Series when the same becomes due and payable and such
default continues for a period of five (5) Business Days;
(b) AFC-II defaults in the payment of any principal or
premium on any Note of such Series when the same becomes due and
payable and such default continues for a period of one (1) Business
Day;
(c) AFC-II fails to comply with any of its other agreements
or covenants in, or provisions of, the Notes of a Series or this
Indenture and the failure to so comply materially and adversely
affects the interests of the Noteholders of any Series and continues
to materially and adversely affect the interests of the Noteholders of
such Series for a period of thirty (30) days after the earlier of (i)
the date on which AFC-II obtains knowledge thereof or (ii) the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to AFC-II by the Trustee or to AFC-II
and the Trustee by the Required Noteholders of such Series;
(d) the occurrence of an Event of Bankruptcy with respect to
AFC-II, AESOP Leasing, AESOP Leasing II, Original AESOP, PVHC, Quartx,
ARAC, any other Lessee or ARC;
(e) (i) any Loan Event of Default described in Section
12.1.1, 12.1.2 or 12.1.3 of any of the Loan Agreements shall occur,
whether or not subsequently waived by AFC-II or (ii) any other Loan
Event of Default shall occur, whether or not subsequently waived by
AFC-II;
(f) any Aggregate Asset Amount Deficiency exists and
continues for a period of 10 days;
(g) AFC-II shall have become an "investment company" or shall
have become under the "control" of an "investment company" under the
Investment Company Act of 1940, as amended;
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(h) any of the Loan Agreements is terminated for any reason;
(i) any representation made by AFC-II in this Base Indenture
or any Related Document is false and such false representation
materially and adversely affects the interests of the Noteholders of
any Series of Notes and such false representation is not cured for a
period of thirty (30) days after the earlier of (i) the date on which
AFC-II obtains knowledge thereof or (ii) the date that written notice
thereof is given to AFC-II by the Trustee or to AFC-II and the Trustee
by the Required Noteholders of such Series;
(j) any of the Related Documents or any portion thereof shall
not be in full force and effect, enforceable in accordance with its
terms or AFC-II, ARC, any Lessee, AESOP Leasing, AESOP Leasing II,
Original AESOP, PVHC, Quartx, any Manufacturer or the Administrator
shall so assert in writing;
(k) ARAC receives notice of termination of the Computer
Services Agreement from WizCom pursuant to Section 14.1(b) or 14.2(b)
thereof, and, in the case of any such notice pursuant to Section
14.2(b) thereof, a qualified successor provider of vehicle processing
services substantially similar to those provided by WizCom pursuant to
the Computer Services Agreement is not appointed by ARAC on or before
the date which is 180 days prior to the effective date of such
termination;
(l) the occurrence of any event of default described in (i)
Section 17.2 or 17.3 of the Licensing Agreement and ARAC receives
notice of termination of the Licensing Agreement from HFS Car
Rental, Inc. or Wizard Co., Inc. or (ii) Section 17.1 of the Licensing
Agreement;
(m) the occurrence of any Administrator Default;
(n) any other event shall occur which may be specified in any
Supplement as an "Amortization Event";
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then (i) in the case of any event described in clause (a), (b), (c), (i) or (n)
above (with respect to clause (n) above, only to the extent such Amortization
Event is subject to waiver as set forth in the applicable Supplement), either
the Trustee, by written notice to AFC-II, or the Required Noteholders of the
applicable Series of Notes, by written notice to AFC-II and the Trustee, may
declare that an Amortization Event has occurred with respect to such Series as
of the date of the notice, or (ii) in the case of any event described in clause
(e)(ii), either the Trustee, by written notice to AFC-II, or the Required
Noteholders of any Series of Notes, by written notice to AFC-II and the
Trustee, may declare that an Amortization Event has occurred with respect to
such Series as of the date of the notice, or (iii) in the case of any event
described in clause (d), (e)(i), (f), (g), (h), (j), (k), (l) or (m) above, an
Amortization Event with respect to all Series of Notes then outstanding shall
immediately occur without any notice or other action on the part of the Trustee
or any Noteholders or (iv) in the case of any event described in clause (n)
above (only to the extent such Amortization Event is not subject to waiver as
set forth in the applicable Supplement), an Amortization Event with respect to
the related Series of Notes shall immediately occur without any notice or other
action on the part of the Trustee or any Noteholders; provided, however, that
the Trustee shall have no liability in connection with any action or inaction
taken, or not taken by it upon the occurrence of an Amortization Event unless a
Trust Officer has actual knowledge of such Amortization Event; and provided
further the provisions of this sentence shall not insulate the Trustee from
liability arising out of its gross negligence or willful misconduct.
Section 9.2. Rights of the Trustee upon Amortization Event or
Certain Other Events of Default.
(a) General. If and whenever an Amortization Event shall have
occurred and be continuing, the Trustee may and, at the written
direction of the Requisite Investors shall, exercise from time to time
any rights and remedies available to it under applicable law or any
Related Document; provided, however, that if such Amortization Event
is based solely on an event described in clause (a), (b), (c), (i) or
(n) of Section 9.1, then the Trustee's
86
rights and remedies pursuant to the provisions of this Section 9.2
shall, to the extent not detrimental to the rights of the holders of
the applicable Series of Notes, be limited to rights and remedies
pertaining only to those Series of Notes with respect to which such
Amortization Event has occurred. Any amounts obtained by the Trustee
on account of or as a result of the exercise by the Trustee of any
right shall be held by the Trustee as additional collateral for the
repayment of AFC-II Obligations and shall be applied as provided in
Article 5 hereof. If so specified in the applicable Supplement, the
Trustee may agree not to exercise any rights or remedies available to
it as a result of the occurrence of an Amortization Event with respect
to a Series of Notes only after giving prior written notice thereof to
the Enhancement Provider, if any, with respect to such Series and
obtaining the direction of the Required Noteholders of such Series.
(b) Loan Agreements. If a Liquidation Event of Default or a
Limited Liquidation Event of Default shall have occurred and be
continuing and a Trust Officer shall have notice thereof, the Trustee,
at the written direction of the Requisite Investors (in the case of a
Liquidation Event of Default) or the Required Noteholders (in the case
of a Limited Liquidation Event of Default), shall direct AFC-II to
exercise (and AFC-II agrees to exercise), to the extent necessary, all
rights, remedies, powers, privileges and claims of AFC-II against
AESOP Leasing and AESOP Leasing II under or in connection with the
Loan Agreements and any of the Related Documents and against any party
to any Related Document, including the right or power to take any
action to compel performance or observance by AESOP Leasing, AESOP
Leasing II or any such party of its obligations to AFC-II, the right
to take possession of any of the Vehicles, and to give any consent,
request, notice, direction, approval, extension or waiver in respect
of any of the Loan Agreements, and any right of AFC-II to take such
action independent of such direction shall be suspended; provided,
however, nothing in this Section 9.2(b) shall in any way limit,
condition or delay the duties of the Trustee set forth in Section
9.2(c)(i) or (iii) hereof.
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(c) Manufacturer Programs and Vehicles. (i) Upon the
occurrence of a Liquidation Event of Default of which a Trust Officer
has knowledge (and so long as a Manufacturer Event of Default has not
occurred with respect to the related Manufacturer), the Trustee shall
promptly return or instruct AFC-II to return or cause AESOP Leasing,
AESOP Leasing II or the Lessees to return, the Program Vehicles to the
related Manufacturers (after the minimum holding period specified in
the Manufacturer's Manufacturer Program) and then, to the extent any
Manufacturer fails to accept any such Program Vehicles under the terms
of the applicable Manufacturer Program (or if a Manufacturer Event of
Default has occurred with respect to any Manufacturer), to liquidate
or direct AFC-II to liquidate, or cause AESOP Leasing, AESOP Leasing
II or the Lessees to liquidate the Program Vehicles in accordance with
the rights of AFC-II under the Loan Agreements and to otherwise sell
or cause to be sold to third parties all Non-Program Vehicles. Upon
the occurrence of a Limited Liquidation Event of Default with respect
to any Series of Notes of which the Trust Officer has knowledge, the
Trustee shall promptly return or instruct AFC-II to return or cause
AESOP Leasing, AESOP Leasing II or the Lessees to return Program
Vehicles to the related Manufacturers and to sell Non-Program Vehicles
or cause Non-Program Vehicles to be sold to third parties in an amount
sufficient to pay all interest and principal on such Series of Notes,
and to the extent that any Manufacturer fails to accept any such
Program Vehicles under the terms of the applicable Manufacturer
Program, to return or direct AFC-II to return or cause AESOP Leasing,
AESOP Leasing II or the Lessees to liquidate such Program Vehicles in
accordance with the rights of AFC-II under the Loan Agreements;
provided, however, that the Trustee and AFC-II shall select the
Program Vehicles to be returned to the related Manufacturers and the
Non-Program Vehicles to be sold to third parties in a manner that
does not adversely affect in any material respect the interests of
the Noteholders of any Series of Notes or any Enhancement Provider.
(ii) In addition to, and not in limitation of, the remedies
and duties of the Trustee set forth in
88
subsection (i) above or (iii) below, if a Liquidation Event of Default
or a Limited Liquidation Event of Default shall have occurred and be
continuing, the Trustee may, and at the written direction of the
Requisite Investors (in the case of a Liquidation Event of Default) or
at the direction of the Required Noteholders (in the case of a Limited
Liquidation Event of Default) shall exercise, or cause AFC-II or AESOP
Leasing, AESOP Leasing II or the Lessees to exercise, to the extent
necessary, all rights, remedies, powers, privileges and claims of
AFC-II, AESOP Leasing, AESOP Leasing II or the Lessees, as the case
may be, or the Trustee against the Manufacturers under or in
connection with the Manufacturer Programs.
(iii) In the event that either (i) an Event of Bankruptcy
with respect to any Manufacturer of Program Vehicles shall have
occurred and such Manufacturer shall fail to repurchase any Eligible
Vehicles in accordance with the terms of the related Manufacturer
Program or (ii) if there has occurred a Manufacturer Event of Default
of which the Trust Officer has knowledge, the Trustee shall cause
AESOP Leasing, AESOP Leasing II or the Lessees to sell any and all
Program Vehicles covered by the related Manufacturer Program of such
Manufacturer for the highest purchase price offered and, promptly upon
receipt, to deposit the proceeds of such sale into the Collection
Account for allocation hereunder.
(d) Failure of AFC-II, AESOP Leasing, AESOP Leasing II or any
Lessee to Take Action. If (i) AFC-II, AESOP Leasing, AESOP Leasing II
or any Lessee shall have failed, within 15 Business Days of receiving
the direction of the Trustee, to take commercially reasonable action
to accomplish directions of the Trustee given pursuant to clauses (b)
or (c) above, (ii) AFC-II, AESOP Leasing, AESOP Leasing II or such
Lessee refuses to take such action, or (iii) the Trustee reasonably
determines that such action must be taken immediately, the Trustee may
(and at the written direction of the Required Noteholders of the
affected Series of Notes (with respect to any Limited Liquidation
Event of Default) or the Requisite Investors (with respect to any
Amortization Event or any Liquidation Event of Default) shall),
89
take such previously directed action (and any related action as
permitted under this Indenture thereafter determined by the Trustee to
be appropriate without the need under this provision or any other
provision under this Indenture to direct AFC-II, AESOP Leasing, AESOP
Leasing II or such Lessee to take such action) on behalf of AFC-II and
the Secured Parties. The Trustee may institute legal proceedings for
the appointment of a receiver or receivers (to which the Trustee shall
be entitled as a matter of right) to take possession of the Vehicles
pending the sale thereof pursuant either to the powers of sale granted
by this Indenture or to a judgment, order or decree made in any
judicial proceeding for the foreclosure or involving the enforcement
of this indenture.
(e) Sale of Collateral. Upon any sale of any of the
Collateral directly by the Trustee, whether made under the power of
sale given under this Section 9.2 or under judgment, order or decree
in any judicial proceeding for the foreclosure or involving the
enforcement of this Indenture:
(i) the Trustee, any Noteholder and/or any
Enhancement Provider may bid for and purchase the property
being sold, and upon compliance with the terms of sale may
hold, retain and possess and dispose of such property in its
own absolute right without further accountability;
(ii) the Trustee may make and deliver to the
purchaser or purchasers a good and sufficient deed, bill of
sale and instrument of assignment and transfer of the
property sold;
(iii) all right, title, interest, claim and demand
whatsoever, either at law or in equity or otherwise, of
AFC-II of, in and to the property so sold shall be divested;
and such sale shall be a perpetual bar both at law and in
equity against AFC-II, its successors and assigns, and
against any and all Persons claiming or who may claim the
property sold or any part thereof from, through or under
AFC-II its successors or assigns;
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(iv) the receipt of the Trustee or of the officer
thereof making such sale shall be a sufficient discharge to
the purchaser or purchasers at such sale for his or their
purchase money, and such purchaser or purchasers, and his or
their assigns or personal representatives, shall not, after
paying such purchase money and receiving such receipt of the
Trustee or of such officer therefor, be obliged to see to the
application of such purchase money or be in any way
answerable for any loss, misapplication or nonapplication
thereof; and
(v) to the extent that it may lawfully do so, AFC-II
agrees that it will not at any time insist upon, or plead, or
in any manner whatsoever claim or take the benefit or
advantage of, any appraisal, valuation, stay, extension or
redemption laws, or any law permitting it to direct the order
in which the Vehicles shall be sold, now or at any time
hereafter in force, which may delay, prevent or otherwise
affect the performance or enforcement of this Indenture.
(f) Additional Remedies. In addition to any rights and
remedies now or hereafter granted hereunder or under applicable law
with respect to the Collateral, the Trustee on behalf of the Secured
Parties shall (subject to the foregoing provisions in respect of the
Vehicles) have all of the rights and remedies of a secured party under
the UCC as enacted in any applicable jurisdiction.
(g) Non-Segregated Series. Upon the occurrence of an
Amortization Event relating to one or more, but not all, Outstanding
Series of Notes (not including any Segregated Series of Notes), the
Trustee shall exercise all remedies hereunder to the extent necessary
to pay all interest and principal on the related Series of Notes up to
the Invested Amount of each Series.
(h) Certain Other Non-Segregated Series. Certain Series of
Notes (not including any Segregated Series of Notes) may provide for
allocations of Collections to such Series of Notes only in respect
91
of specified items of Collateral upon the occurrence of certain
Amortization Events. Upon the occurrence of such an Amortization Event
relating to such a Series of Notes, the Trustee shall, to the extent
specified in the applicable Supplement, limit any recourse hereunder
to the related specified items of Collateral to satisfy the payment of
all interest and principal on such Series of Notes up to the Invested
Amount of such Series.
(i) Segregated Series. Upon the occurrence of an Amortization
Event relating to any Outstanding Segregated Series of Notes, the
Trustee shall limit any recourse hereunder to the related
Series-Specific Collateral in satisfying the payment of interest and
principal due on such Segregated Series of Notes.
Section 9.3. [RESERVED].
Section 9.4. Other Remedies.
Subject to the terms and conditions of this Indenture, if an
Amortization Event occurs and is continuing, the Trustee may pursue any remedy
available under applicable law or in equity to collect the payment of principal
or interest on the Notes (or the applicable Series of Notes, in the case of an
Amortization Event that affects only one Series of Notes) or to enforce the
performance of any provision of the Notes, this Indenture or any Supplement. If
an Amortization Event has occurred in accordance with Section 9.1, the Trustee
shall instruct AFC-II to cease issuing Notes and the right of AFC-II to issue
Notes shall automatically terminate. Upon the occurrence of a Loan Event of
Default, the Trustee shall have the right to (and upon direction of the
Requisite Investors, shall) direct AFC-II to declare that the relevant Loan
Commitment is terminated and the relevant Loan Note immediately due and
payable. In addition, the Trustee may, or shall at the direction of the
Requisite Investors (or the Required Noteholders, in the case of an
Amortization Event that affects only one Series of Notes), direct AFC-II to
exercise any rights or remedies available under any Related Document or under
applicable law or in equity.
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The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding, and
any such proceeding instituted by the Trustee shall be in its own name as
trustee. All remedies are cumulative to the extent permitted by law.
Section 9.5. Waiver of Past Events.
Subject to Section 12.2 hereof, the Noteholders of any Series
owning an aggregate principal amount of Notes in excess of 66-2/3% of the
aggregate principal amount of the Outstanding Notes of such Series, by notice
to the Trustee, may waive any existing Potential Amortization Event or
Amortization Event related to clause (a), (b), (c), (i) or (n) of Section 9.1
(with respect to clause (n), only to the extent subject to waiver as provided
in the applicable Supplement) which relate to such Series and its consequences
except a continuing Potential Amortization Event or Amortization Event in the
payment of the principal of or interest on any Note. Upon any such waiver, such
Potential Amortization Event shall cease to exist with respect to such Series,
and any Amortization Event with respect to such Series arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Potential Amortization Event or
impair any right consequent thereon. A Potential Amortization Event or an
Amortization Event related to clause (d), (e), (f), (g), (h), (j), (k), (l),
(m) or (n) of Section 9.1 (with respect to clause (n), only to the extent not
subject to waiver as set forth in the applicable Supplement) shall not be
subject to waiver.
Section 9.6. Control by Requisite Investors.
The Requisite Investors may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee. However, subject to
Section 10.1, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Noteholders, or that may involve the Trustee
in personal liability.
Section 9.7. Limitation on Suits.
93
Any other provision of this Indenture to the contrary
notwithstanding, a Noteholder may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) The Noteholder gives to the Trustee written notice of a
continuing Amortization Event;
(b) The Noteholders of at least 25% in principal amount of
all then Outstanding Notes of such Series make a written request to
the Trustee to pursue the remedy;
(c) Such Noteholder or Noteholders offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) The Trustee does not comply with the request within 45
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) During such 45-day period the Required Noteholders do not
give the Trustee a direction inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
Section 9.8. Unconditional Rights of Holders to
Receive Payment; Withholding Taxes.
(a) Notwithstanding any other provision of this Indenture,
except for clause (b) below, the right of any Noteholder of a Note to
receive payment of principal and interest on the Note, on or after the
respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected
without the consent of the Noteholder.
(b) The Paying Agent agrees, to the extent required by
applicable law, to withhold from each payment due hereunder or under
any Note, United States withholding taxes at the appropriate rate,
94
and, on a timely basis, to deposit such amounts with an authorized
depository and make such reports, filings and other reports in
connection therewith, and in the manner, required under applicable
law. The Paying Agent shall promptly furnish each Noteholder (but in
no event later than the date 30 days after the due date thereof) a
U.S. Treasury Form 1042S and Form 8109-B (or similar forms as at any
relevant time in effect), if applicable, indicating payment in full of
any taxes withheld from any payments by the Paying Agent to such
Persons together with all such other information and documents
reasonably requested by such Noteholder and necessary or appropriate
to enable such Noteholder to substantiate a claim for credit or
deduction with respect thereto for income tax purposes of any
jurisdiction with respect to which such Noteholder is required to file
a tax return. In the event that a Noteholder which is not a United
States Person (as defined in Code Section 7701(a)(30)) has furnished
to the Agent a properly completed and currently effective U.S.
Treasury Form 1001 (or such successor Form or Forms as may be required
by the United States Treasury Department) during the calendar year in
which the payment is made, or in either of the two preceding calendar
years, and has not notified the Agent of the withdrawal or inaccuracy
of such Form prior to the date of each interest payment, only the
amount, if any, required by applicable law shall be withheld from
payments under the Notes held by such Noteholder in respect of United
States federal income tax. In the event that a Noteholder (x) which is
not a United States Person has furnished to the Paying Agent a
properly completed and currently effective U.S. Treasury Form 4224 in
duplicate (or such successor certificate or Form or Forms as may be
required by the United States Treasury Department as necessary in
order to avoid withholding of United States federal income tax),
during the tax year of the Noteholder in which payment is made and has
not notified the Paying Agent of the withdrawal or inaccuracy of such
certificate or Form prior to the date of each interest payment or (y)
which is not a United States Person has furnished to the Agent a
properly completed and currently effective U.S. Treasury Form W-8
during the calendar year in which the payment is made, or in either of
the two preceding calendar years, no amount
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shall be withheld from payments under the Notes held by such
Noteholder in respect of United States federal income tax.
Notwithstanding the foregoing, if any Noteholder has notified the
Paying Agent that any of the foregoing Forms or certificates is
withdrawn or inaccurate, or if the Code or the regulations there-
under or the administrative interpretation thereof are at any time
after the date hereof amended to require such withholding of United
States federal income taxes from payments under the Notes held by such
Noteholder, or if such withholding is otherwise required under
applicable law, the Paying Agent agrees to withhold from each payment
due to the relevant Noteholder withholding taxes at the appropriate
rate under applicable law, and will, as more fully provided above, on
a timely basis, deposit such amounts with an authorized depository and
make such reports, filings and other reports in connection therewith,
and in the manner required under applicable law. The Trustee hereby
agrees to use its best efforts (without incurring liability for a
failure to do so) to inform the Paying Agent and the affected
Noteholder or Noteholders if the Trustee has failed to receive any of
Form 1001, 4224 or W-8 from a Noteholder prior to the date of an
interest payment to such Noteholder.
Section 9.9. Collection Suit by the Trustee.
If any Amortization Event specified in clauses (a) or (b) of
Section 9.1 occurs and is continuing, the Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against AFC-II for
the whole amount of principal and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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Section 9.10. The Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
and the Noteholders allowed in any judicial proceedings relative to AFC-II (or
any other obligor upon the Notes), its creditors or its property, and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claim and any custodian in any such
judicial proceeding is hereby authorized by each Noteholder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Noteholders, to pay the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 10.5 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 10.5 hereof
out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, Notes and other properties which
the Noteholders of the Notes may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Noteholder thereof, or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceeding.
Section 9.11. Priorities.
If the Trustee collects any money pursuant to this Article,
the Trustee shall pay out the money in accordance with the provisions of
Article 5 of this Indenture.
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Section 9.12. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of any undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Noteholder pursuant to Section 9.7, or a suit by Noteholders of more than 10%
in principal amount of all then outstanding Notes.
Section 9.13. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the
Trustee or to the holders of Notes is intended to be exclusive of any other
right or remedy, and every right or remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given under
this Indenture or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy under this Indenture, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
Section 9.14. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any holder of any
Note to exercise any right or remedy accruing upon any Amortization Event shall
impair any such right or remedy or constitute a waiver of any such Amortization
Event or an acquiescence therein. Every right and remedy given by this Article
9 or by law to the Trustee or to the holders of Notes may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
holders of Notes, as the case may be.
Section 9.15. Reassignment of Surplus.
After termination of this Indenture and the payment in full
of the AFC-II Obligations, any proceeds of all the Collateral received or held
by the Trustee shall
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be turned over to AFC-II and the Collateral shall be reassigned to AFC-II by
the Trustee without recourse to the Trustee and without any representations,
warranties or agreements of any kind.
ARTICLE 10.
THE TRUSTEE
Section 10.1. Duties of the Trustee.
(a) If an Amortization Event has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs; provided, however,
that the Trustee shall have no liability in connection with any action
or inaction taken, or not taken, by it upon the deemed occurrence of
an Amortization Event of which a Trust Officer has not received
written notice; and provided, further that the preceding sentence
shall not have the effect of insulating the Trustee from liability
arising out of the Trustee's negligence or willful misconduct.
(b) Except during the occurrence and continuance of an
Amortization Event:
(i) The Trustee undertakes to perform only those
duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) This clause does not limit the effect of clause
(b) of this Section 10.1.
(ii) The Trustee shall not be liable for any error
of judgment made in good faith by a Trust Officer, unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts.
(iii) The Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 9.4.
(iv) The Trustee shall not be charged with knowledge
of any default by any Lessee in the performance of its
obligations under any Related Document, unless a Trust
Officer of the Trustee receives written notice of such
failure from such Lessee or any Holders of Notes evidencing
not less than 10% of the aggregate principal amount of the
Notes of any Series adversely affected thereby.
(d) Notwithstanding anything to the contrary contained in
this Indenture or any of the Related Documents, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or
incur any liability if there is reasonable ground (as determined by
the Trustee in its sole discretion) for believing that the repayment
of such funds is not reasonably assured to it by the security afforded
to it by the terms of this Indenture. The Trustee may refuse to
perform any duty or exercise any right or power unless it receives
indemnity satisfactory to it against any loss, liability or expense.
(e) In the event that the Paying Agent or the Transfer Agent
and Registrar shall fail to perform any obligation, duty or agreement
in the manner or on the day required to be performed by the Paying
Agent or the Transfer Agent and Registrar, as the case may
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be, under this Indenture, the Trustee shall be obligated as soon as
practicable upon actual knowledge of a Trust Officer thereof and
receipt of appropriate records and information, if any, to perform
such obligation, duty or agreement in the manner so required.
(f) Subject to Section 10.3, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in
trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law or
the Related Documents. The Trustee may allow and credit to AFC-II
interest agreed upon by AFC-II and the Trustee from time to time as
may be permitted by law.
Section 10.2. Rights of the Trustee.
Except as otherwise provided by Section 10.1:
(a) The Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting based upon any document
believed by it to be genuine and to have been signed by or presented
by the proper person.
(b) The Trustee may consult with counsel of its selection and
the written advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through agents, custodians and
nominees and shall not be liable for any misconduct or negligence on
the part of, or for the supervision of, any such agent, custodian or
nominee so long as such agent, custodian or nominee is appointed with
due care. The Trustee shall provide written notice to Moody's of any
such appointment and, if practicable, shall provide prior written
notice to Moody's of any such appointment.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which
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it believes to be authorized or within its rights or powers conferred
upon it by the Indenture.
(e) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture or any
Supplement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or direction of
any of the Noteholders, pursuant to the provisions of this Indenture
or any Supplement, unless such Noteholders shall have offered to the
Trustee reasonable security or indemnity satisfactory to the Trustee
against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve
the Trustee of the obligations, upon the occurrence of a default by
any Lessee, AESOP Leasing, AESOP Leasing II, Original AESOP, PVHC,
Quartx or AFC-II (which has not been cured), to exercise such of the
rights and powers vested in it by this Indenture or any Supplement,
and to use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(f) The Trustee shall not be bound to make any investigation
into the facts of matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing so to do by the Required Noteholders of any Series which could
be adversely affected if the Trustee does not perform such acts.
(g) The Trustee shall not be liable for any losses or
liquidation penalties in connection with Permitted Investments, unless
such losses or liquidation penalties were incurred through the
Trustee's own willful misconduct, negligence or bad faith.
(h) The Trustee shall not be liable for the acts or omissions
of any successor to the Trustee so long as such acts or omissions were
not the result of the negligence, bad faith or willful misconduct of
▇▇▇▇▇▇ Trust and Savings Bank.
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Section 10.3. Individual Rights of the Trustee.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise deal with AFC-II or an
Affiliate of AFC-II with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. However, the Trustee is subject to
Section 10.8.
Section 10.4. Notice of Amortization Events
and Potential Amortization Events.
If an Amortization Event or a Potential Amortization Event
occurs and is continuing and if a Trust Officer of the Trustee receives written
notice thereof, the Trustee shall promptly provide the Noteholders and each
Rating Agency with notice of such Amortization Event or the Potential
Amortization Event, if such Notes are represented by a Global Note, by
telephone and facsimile, and, if such Notes are represented by Definitive
Notes, by first class mail.
Section 10.5. Compensation.
(a) AFC-II shall promptly pay to the Trustee from time to
time compensation for its acceptance of this Indenture and services
hereunder as set forth in the letter agreement dated July , 1997
between AFC-II and the Trustee, as may be amended from time to time.
The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. AFC-II shall reimburse
the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include (i) the
reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel and (ii) the reasonable expenses of the Trustee's
agents in administering the Collateral.
(b) AFC-II shall not be required to reimburse any expense or
indemnify the Trustee against any loss, liability, or expense incurred
by the Trustee through the Trustee's own willful misconduct, gross
negligence or bad faith.
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(c) When the Trustee incurs expenses or renders services
after an Amortization Event occurs, the expenses and the compensation
for the services are intended to constitute expenses of administration
under the Bankruptcy Code.
(d) The provisions of this Section 10.5 shall survive the
termination of this Indenture and the resignation and removal of the
Trustee.
Section 10.6. Replacement of the Trustee.
(a) A resignation or removal of the Trustee and appointment
of a successor Trustee shall become effective only upon the successor
Trustee's acceptance of appointment as provided in this Section 10.6
and the satisfaction of the Rating Agency Consent Condition and the CP
Rating Agency Condition.
(b) The Trustee may, after giving sixty (60) days prior
written notice to AFC-II, each Noteholder and each Rating Agency,
resign at any time and be discharged from the trust hereby created by
so notifying AFC-II and ARAC; provided, however, that no such
resignation of the Trustee shall be effective until a successor
trustee has assumed the obligations of the Trustee hereunder. The
Requisite Investors may remove the Trustee by so notifying the
Trustee, ARAC, AFC-II and each Rating Agency. AFC-II may remove the
Trustee upon notice to each Rating Agency if:
(i) the Trustee fails to comply with Section 10.8;
(ii) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect to
the Trustee under the Bankruptcy Code;
(iii) a custodian or public officer takes charge of
the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists
in the office of the Trustee for any reason, AFC-II shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Requisite Investors may appoint a successor Trustee to replace the
successor Trustee appointed by AFC-II.
(c) If a successor ▇▇▇▇▇▇▇ does not take office within 30
days after the retiring Trustee resigns or is removed, the retiring
Trustee, AFC-II or any Secured Party may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(d) If the Trustee after written request by any Noteholder
who has been a Noteholder for at least six months fails to comply with
Section 10.8, such Noteholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
(e) A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee, ARAC and to AFC-II. Thereupon
the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture and any Supplement. The
successor Trustee shall mail a notice of its succession to
Noteholders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee; provided, however,
that all sums owing to the retiring Trustee hereunder have been paid.
Notwithstanding replacement of the Trustee pursuant to this Section
10.6, AFC-II's obligations under Section 10.5 hereof shall continue
for the benefit of the retiring Trustee.
Section 10.7. Successor Trustee by ▇▇▇▇▇▇, etc.
Subject to Section 10.8, if the Trustee consolidates, merges
or converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Trustee.
105
Section 10.8. Eligibility Disqualification.
(a) There shall at all times be a Trustee hereunder which
shall (i) be a corporation organized and doing business under the laws
of the United States of America or of any state thereof authorized
under such laws to exercise corporate trustee power, (ii) be subject
to supervision or examination by Federal or state authority and shall
have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and
(iii) so long as any Commercial Paper Notes are outstanding, have a
rating of not less than Baa3 from Moody's and (iv) if such Trustee is
other than ▇▇▇▇▇▇ Trust and Savings Bank as the original Trustee
hereunder, acceptable to the Requisite Investors.
(b) At any time the Trustee shall cease to satisfy the
eligibility requirements of clauses (a)(i) or (a)(ii) above, the
Trustee shall resign immediately in the manner and with the effect
specified in Section 10.6.
Section 10.9. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Indenture or
any Supplement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Collateral
may at the time be located, the Trustee shall have the power and may
execute and deliver all instruments to appoint one or more persons to
act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Collateral, and to vest in such
Person or Persons, in such capacity and for the benefit of the Secured
Parties, such title to the Collateral, or any part thereof, and,
subject to the other provisions of this Section 10.9, such powers,
duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor
trustee under Section 10.8 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required
106
under Section 10.6. No co-trustee shall be appointed without the
consent of ARAC unless such appointment is required as a matter of
state law or to enable the Trustee to perform its functions hereunder.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) The Notes of each Series shall be authenticated
and delivered solely by the Trustee or an authenticating
agent appointed by the Trustee;
(ii) All rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be
performed, the Trustee shall be incompetent or unqualified to
perform, such act or acts, in which event such rights,
powers, duties and obligations (including the holding of
title to the Assets or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction
of the Trustee;
(iii) No trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee
hereunder;
(iv) The Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee;
and
(v) The Trustee shall remain primarily liable for
the actions of any co-trustee.
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(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall
refer to this Indenture and the conditions of this Article 10. Each
separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions
of this Indenture and any Supplement, specifically including every
provision of this Indenture or any Supplement relating to the conduct
of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to ARAC.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full
power and authority, to the extent not prohibited by law, to do any
lawful act under or in respect to this Indenture or any Supplement on
its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and
be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
(e) In connection with the appointment of a co-trustee, the
Trustee may, at any time, at the Trustee's sole cost and expense,
without notice to the Noteholders, delegate its duties under this Base
Indenture and any Supplement to any Person who agrees to conduct such
duties in accordance with the terms hereof; provided, however, that no
such delegation shall relieve the Trustee of its obligations and
responsibilities hereunder with respect to any such delegated duties.
Section 10.10. Representations and Warranties of Trustee.
108
The Trustee represents and warrants to AFC-II and the Secured
Parties that:
(i) The Trustee is a banking corporation organized,
existing and in good standing under the laws of the State of
Illinois;
(ii) The Trustee has full power, authority and right
to execute, deliver and perform this Indenture and any
Supplement issued concurrently with this Indenture and to
authenticate the Notes, and has taken all necessary action to
authorize the execution, delivery and performance by it of
this Indenture and any Supplement issued concurrently with
this Indenture and to authenticate the Notes;
(iii) This Indenture has been duly executed and
delivered by the Trustee; and
(iv) The Trustee meets the requirements of
eligibility as a trustee hereunder set forth in Section 10.8
hereof.
Section 10.11. AFC-II Indemnification of the
Trustee.
AFC-II shall indemnify and hold harmless the Trustee and its
directors, officers, agents and employees from and against any loss, liability,
expense, damage or injury suffered or sustained by reason of any acts,
omissions or alleged acts or omissions arising out of the activities of the
Trustee pursuant to this Indenture or any Supplement, including but not limited
to any judgment, award, settlement, reasonable attorneys' fees and other costs
or expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, however, that AFC-II shall not indemnify
the Trustee or its directors, officers, employees or agents if such acts,
omissions or alleged acts or omissions constitute bad faith, negligence or
willful misconduct by the Trustee. The indemnity provided herein shall survive
the termination of this Indenture and the resignation and removal of the
Trustee.
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ARTICLE 11.
DISCHARGE OF INDENTURE
Section 11.1. Termination of AFC-II's Obligations.
(a) This Indenture shall cease to be of further effect
(except that AFC-II's obligations under Section 10.5 and Section 10.11
and the Trustee's and Paying Agent's obligations under Section 11.3
shall survive) when all Outstanding Notes theretofore authenticated
and issued have been delivered (other than destroyed, lost or stolen
Notes which have been replaced or paid) to the Trustee for
cancellation and AFC-II has paid all sums payable hereunder.
(b) In addition, except as may be provided to the contrary in
any Supplement, AFC-II may terminate all of its obligations under this
Indenture if:
(i) AFC-II irrevocably deposits in trust with the
Trustee or at the option of the Trustee, with a trustee
reasonably satisfactory to the Trustee and AFC-II under the
terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, money or U.S. Government
Obligations in an amount sufficient, in the opinion of a
nationally recognized firm of independent certified public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay, when due, principal and
interest on the Notes to maturity or redemption, as the case
may be, and to pay all other sums payable by it hereunder;
provided, however, that (1) the trustee of the irrevocable
trust shall have been irrevocably instructed to pay such
money or the proceeds of such U.S. Government Obligations to
the Trustee and (2) the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of said principal and
interest with respect to the Notes;
(ii) AFC-II delivers to the Trustee an Officers'
Certificate stating that all condi-
110
tions precedent to satisfaction and discharge of this
Indenture have been complied with, and an Opinion of Counsel
to the same effect;
(iii) AFC-II delivers to the Trustee an Officer's
Certificate stating that no Potential Amortization Event or
Amortization Event, in either case, described in Section
9.1(d) shall have occurred and be continuing on the date of
such deposit; and
(iv) each of the Rating Agency Consent Condition and
the CP Rating Agency Condition is satisfied.
Then, this Indenture shall cease to be of further effect (except as provided in
this Section 11.1), and the Trustee, on demand of AFC-II, shall execute proper
instruments acknowledging confirmation of and discharge under this Indenture.
(c) After such irrevocable deposit made pursuant to Section
11.1(b) and satisfaction of the other conditions set forth herein, the
Trustee upon request shall acknowledge in writing the discharge of
AFC-II's obligations under this Indenture except for those surviving
obligations specified above.
In order to have money available on a payment date to pay
principal or interest on the Notes, the U.S. Government Obligations shall be
payable as to principal or interest at least one Business Day before such
payment date in such amounts as will provide the necessary money. U.S.
Government Obligations shall not be callable at the issuer's option.
Section 11.2. Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and
AFC-II shall hold in trust money or U.S. Government Obligations deposited with
it pursuant to Section 11.1. The Trustee shall apply the deposited money and
the money from U.S. Government Obligations through the Paying Agent in
accordance with this Indenture to the payment of principal and interest on the
Notes.
111
The provisions of this Section 11.2 shall survive the
expiration or earlier termination of this Indenture.
Section 11.3. Repayment to AFC-II.
The Trustee and the Paying Agent shall promptly pay to AFC-II
upon written request any excess money or, pursuant to Sections 2.11 and 2.14,
return any Notes held by them at any time.
Subject to Section 2.7(c), the Trustee and the Paying Agent
shall pay to AFC-II upon written request any money held by them for the payment
of principal or interest that remains unclaimed for two years after the date
upon which such payment shall have become due.
The provisions of this Section 11.3 shall survive the
expiration or earlier termination of this Indenture.
ARTICLE 12.
AMENDMENTS
Section 12.1. Without Consent of the Noteholders.
Without the consent of any Noteholder, AFC-II, the Trustee,
and any applicable Enhancement Provider, at any time and from time to time, may
enter into one or more Supplements hereto, in form satisfactory to the Trustee,
for any of the following purposes, provided that (i) with respect to clause (a)
below, the Rating Agency Confirmation Condition is met and (ii) with respect to
clauses (b) to (h) below, the Rating Agency Consent Condition is met:
(a) to create a new Series of Notes (including, without
limitation, making such modifications to the Indenture and the other
Related Documents as may be required to issue a Segregated Series of
Notes; provided, however, that the creation of any Segregated Series
of Notes shall not result in a material adverse effect on the
Noteholders of any Series unless the Required Noteholders of such
112
Series shall have given their prior written consent to the creation
thereof);
(b) to add to the covenants of AFC-II for the benefit of any
Secured Parties (and if such covenants are to be for the benefit of
less than all Series of Notes, stating that such covenants are
expressly being included solely for the benefit of such Series) or to
surrender any right or power herein conferred upon AFC-II (provided,
however, that AFC-II will not pursuant to this subsection 12.1(b)
surrender any right or power it has against any Lessee, AESOP Leasing,
AESOP Leasing II, Original AESOP, PVHC, Quartx or any Manufacturer);
(c) to mortgage, pledge, convey, assign and transfer to the
Trustee any property or assets as security for the Notes and to
specify the terms and conditions upon which such property or assets
are to be held and dealt with by the Trustee and to set forth such
other provisions in respect thereof as may be required by the
Indenture or as may, consistent with the provisions of the Indenture,
be deemed appropriate by AFC-II and the Trustee, or to correct or
amplify the description of any such property or assets at any time so
mortgaged, pledged, conveyed and transferred to the Trustee on behalf
of the Secured Parties;
(d) to cure any ambiguity, defect, or inconsistency or to
correct or supplement any provision contained herein or in any
Supplement or in any Notes issued hereunder;
(e) to provide for uncertificated Notes in addition to
certificated Notes;
(f) to add to or change any of the provisions of the
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Notes in bearer form, registrable or not registrable
as to principal, and with or without interest coupons;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes of one or
more Series and to add to or change any of the provisions of the
Inden-
113
ture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; or
(h) to correct or supplement any provision herein which may
be inconsistent with any other provision herein or to make any other
provisions with respect to matters or questions arising under this
Indenture;
provided, however, that, as evidenced by an Opinion of Counsel, such action
shall not adversely affect in any material respect the interests of any
Noteholders. Upon the request of AFC-II, accompanied by a resolution of the
Board of Directors authorizing the execution of any Supplement to effect such
amendment, and upon receipt by the Trustee and ARAC of the documents described
in Section 2.2 hereof, the Trustee shall join with AFC-II in the execution of
any Supplement authorized or permitted by the terms of this Indenture and shall
make any further appropriate agreements and stipulations which may be therein
contained, but the Trustee shall not be obligated to enter into such Supplement
which affects its own rights, duties or immunities under this Indenture or
otherwise.
Section 12.2. With Consent of the Noteholders.
Except as provided in Section 12.1, the provisions of this
Indenture and any Supplement (unless otherwise provided in such Supplement) and
each other Related Document to which AFC-II is a party may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and consented to in writing by AFC-II, the Trustee, any applicable
Enhancement Provider, and the Requisite Investors (or the Required Noteholders
of a Series of Notes, in respect of any amendment to this Indenture, the
Supplement with respect to such Series of Notes or any Related Document which
affects only the Noteholders of such Series of Notes and does not affect the
Noteholders of any other Series of Notes, as substantiated by an Opinion of
Counsel to such effect, which Opinion of Counsel may, to the extent same is
based on any factual matter, rely upon an Officer's Certificate as to the truth
of such factual matter) and provided that each of the Rating Agency
114
Consent Condition and the CP Rating Agency Condition is satisfied.
Notwithstanding the foregoing:
(i) any modification of this Section 12.2, any
requirement hereunder that any particular action be taken by
Noteholders holding the relevant percentage in principal
amount of the Notes or any change in the definition of the
terms "Aggregate Asset Amount" or "Aggregate Asset Amount
Deficiency" (other than in connection with the issuance of a
Segregated Series of Notes), "Eligible Program Manufacturer",
"Eligible Non-Program Manufacturer" or "Eligible Manufacturer
Program" (other than in connection with a waiver of such
eligibility requirement by the Noteholders of any Series of
Notes, but only to the extent so provided in the related
Supplement in respect of such Series of Notes), "Invested
Amount", "Invested Percentage", or the applicable amount of
Enhancement or any defined term used for the purpose of any
such definitions shall require the consent of each affected
Noteholder; and
(ii) any amendment, waiver or other modification
that would (a) extend the due date for, or reduce the amount
of any scheduled repayment or prepayment of principal of or
interest on any Note (or reduce the principal amount of or
rate of interest on any Note) shall require the consent of
each affected Noteholder; (b) approve the assignment or
transfer by AFC-II of any of its rights or obligations
hereunder or under any other Related Document to which it is
a party except pursuant to the express terms hereof or
thereof shall require the consent of each Noteholder; (c)
release any obligor under any Related Document to which it is
a party except pursuant to the express terms of such Related
Document shall require the consent of each Noteholder;
provided, however, that the Liens on Vehicles may be released
as provided in Section 3.5; (d) affect adversely the
interests, rights or obligations of any Noteholder
individually in comparison to any other Noteholder shall
require the consent of such Noteholder; or (e) amend or
115
otherwise modify any Amortization Event shall require the
consent of each affected Noteholder.
No failure or delay on the part of any Noteholder or the Trustee in exercising
any power or right under this Indenture or any other Related Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise thereof or the
exercise of any other power or right.
Section 12.3. Supplements.
Each amendment or other modification to this Indenture or the
Notes shall be set forth in a Supplement. The initial effectiveness of each
Supplement shall be subject to the satisfaction of the Rating Agency Consent
Condition and (so long as any Commercial Paper Notes are Outstanding) the CP
Rating Agency Condition. In addition to the manner provided in Sections 12.1
and 12.2, each Supplement may be amended as provided for in such Supplement.
Section 12.4. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to
it by a Noteholder of a Note is a continuing consent by the Noteholder and
every subsequent Noteholder of a Note or portion of a Note that evidences the
same debt as the consenting Noteholder's Note, even if notation of the consent
is not made on any Note. However, any such Noteholder or subsequent Noteholder
may revoke the consent as to his Note or portion of a Note if the Trustee
receives written notice of revocation before the date the amendment or waiver
becomes effective. An amendment or waiver becomes effective in accordance with
its terms and thereafter binds every Noteholder. AFC-II may fix a record date
for determining which Noteholders must consent to such amendment or waiver.
Section 12.5. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an
amendment or waiver on any Note thereafter
116
authenticated. AFC-II in exchange for all Notes may issue and the Trustee shall
authenticate new Notes that reflect the amendment or waiver. Failure to make
the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment or waiver.
Section 12.6. The Trustee to Sign Amendments, etc.
The Trustee shall sign any Supplement authorized pursuant to
this Article 12 if the Supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign it. In signing such Supplement, the Trustee shall be entitled to
receive, if requested, an indemnity reasonably satisfactory to it and to
receive and, subject to Section 10.1, shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
such Supplement is authorized or permitted by this Indenture and that it will
be valid and binding upon AFC-II in accordance with its terms. AFC-II may not
sign a Supplement until each of its Managers approves it.
ARTICLE 13.
MISCELLANEOUS
Section 13.1. Notices.
(a) Any notice or communication by AFC-II or the Trustee to
the other shall be in writing and delivered in person or mailed by
first-class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day
delivery, to the other's address:
If to AFC-II:
AESOP Funding II L.L.C.:
c/o Lord Securities Corporation
Two Wall Street
New York, New York 10005
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
117
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the Administrator:
Avis Rent A Car System, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
cc: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to an Enhancement Provider, at the address provided in the
applicable Enhancement Agreement.
AFC-II or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications;
provided, however, AFC-II may not at any time designate more than a total of
three (3) addresses to which notices must be sent in order to be effective.
Any notice (i) given in person shall be deemed delivered on
the date of delivery of such notice, (ii) given by first class mail shall be
deemed given five (5) days after the date that such notice is mailed, (iii)
delivered by telex or telecopier shall be deemed given on the date of delivery
of such notice, and (iv) delivered by overnight air courier shall be deemed
delivered one Business Day after the date that such notice is delivered to such
overnight courier.
Notwithstanding any provisions of this Indenture to the
contrary, the Trustee shall have no liability based upon or arising from the
failure to receive any
118
notice required by or relating to this Indenture or the Notes.
If AFC-II mails a notice or communication to Noteholders, it
shall mail a copy to the Trustee at the same time.
(b) Where the Indenture provides for notice to Noteholders of
any event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if sent in writing and mailed, first-class
postage prepaid, to each Noteholder affected by such event, at its
address as it appears in the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed (if any) for
the giving of such notice. In any case where notice to Noteholder is
given by mail, neither the failure to mail such notice, nor any defect
in any notice so mailed, to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any
notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given. Where this Indenture
provides for notice in any manner, such notice may be waived in
writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In the case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made that is satisfactory to
the Trustee shall constitute a sufficient notification for every purpose
hereunder.
Section 13.2. Communication by Noteholders With Other
Noteholders.
Noteholders may communicate with other Noteholders with
respect to their rights under this Indenture or the Notes.
119
Section 13.3. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by AFC-II to the Trustee to
take any action under this Indenture, AFC-II shall furnish to the Trustee an
Officers' Certificate in form and substance reasonably satisfactory to the
Trustee (which shall include the statements set forth in Section 13.4) stating
that, in the opinion of the signers, all conditions precedent and covenants, if
any, provided for in this Indenture relating to the proposed action have been
complied with.
Section 13.4. Statements Required in Certificate.
Each certificate with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(a) a statement that the Person giving such certificate has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in
such certificate are based;
(c) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
Section 13.5. Rules by the Trustee.
The Trustee may make reasonable rules for action by or at a
meeting of Noteholders.
Section 13.6. No Recourse Against Others.
A director, Authorized Officer, employee or stockholder of
AFC-II, as such, shall not have any lia-
120
bility for any obligations of AFC-II under the Notes or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Noteholder by accepting a Note waives and releases all such
liability.
Section 13.7. Duplicate Originals.
The parties may sign any number of copies of this Indenture.
One signed copy is enough to prove this Indenture.
Section 13.8. Benefits of Indenture.
Except as set forth in a Supplement, nothing in this
Indenture or in the Notes, expressed or implied, shall give to any Person,
other than the parties hereto and their successors hereunder and the Holders,
any benefit or any legal or equitable right, remedy or claim under the
Indenture.
Section 13.9. Payment on Business Day.
In any case where any Distribution Date, redemption date or
maturity date of any Note shall not be a Business Day, then (notwithstanding
any other provision of this Indenture) payment of interest or principal (and
premium, if any), as the case may be, need not be made on such date but may be
made on the next succeeding Business Day with the same force and effect as if
made on the Distribution Date, redemption date, or maturity date; provided,
however, that no interest shall accrue for the period from and after such
Distribution Date, redemption date, or maturity date, as the case may be.
Section 13.10. Governing Law.
The laws of the State of New York, including, without
limitation, the UCC, but excluding any conflicts of laws, shall govern and be
used to construe this Indenture and the Notes and the rights and duties of the
Trustee, Registrar, Paying Agent and Noteholders.
Section 13.11. No Adverse Interpretation of Other Agreements.
121
This Indenture may not be used to interpret another
indenture, loan or debt agreement of AFC-II or an Affiliate of AFC-II. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 13.12. Successors.
All agreements of AFC-II in this Indenture and the Notes
shall bind its successor; provided, however, AFC-II may not assign its
obligations or rights under this Indenture or any Related Document. All
agreements of the Trustee in this Indenture shall bind its successor.
Section 13.13. Severability.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 13.14. Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
Section 13.15. Table of Contents, Headings,
etc.
The Table of Contents, Cross-Reference Table, and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 13.16. Termination; Collateral.
This Indenture, and any grants, pledges and assignments
hereunder, shall become effective concurrently with the issuance of the first
Series of Notes and shall terminate when (a) all AFC-II Obligations shall have
been fully paid and satisfied, (b) the obligations of each Enhancement Provider
under any Enhancement and related documents have terminated, and (c) any
Enhance-
122
ment shall have terminated, at which time the Trustee, at the request of AFC-II
and upon receipt of an Officers' Certificate from AFC-II to the effect that the
conditions in clauses (a), (b) and (c) above have been complied with and upon
receipt of a certificate from the Trustee and each Enhancement Provider to the
effect that the conditions in clauses (a), (b) and (c) above relating to AFC-II
Obligations to the Noteholders and each Enhancement Provider have been complied
with, shall reassign (without recourse upon, or any warranty whatsoever by, the
Trustee) and deliver all Collateral and documents then in the custody or
possession of the Trustee promptly to AFC-II.
AFC-II and the Secured Parties hereby agree that, if any
Deposited Funds remain on deposit in the Collection Account after the
termination of this Indenture, such amounts shall be released by the Trustee
and paid to AFC-II.
Section 13.17. No Bankruptcy Petition Against AFC-II.
Each of the Secured Parties and the Trustee hereby covenants
and agrees that, prior to the date which is one year and one day after the
payment in full of the latest maturing Note, it will not institute against, or
join with any other Person in instituting, against AFC-II, AESOP Leasing, AESOP
Leasing II, Original AESOP, PVHC, Quartx or AFC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any Federal or state bankruptcy or similar law; provided, however, that nothing
in this Section 13.17 shall constitute a waiver of any right to
indemnification, reimbursement or other payment from AFC-II pursuant to this
Indenture. In the event that any such Secured Party or the Trustee takes action
in violation of this Section 13.17, AFC-II, AESOP Leasing, AESOP Leasing II,
Original AEOP, PVHC, Quartx or AFC shall file an answer with the bankruptcy
court or otherwise properly contesting the filing of such a petition by any
such Secured Party or the Trustee against AFC-II, AESOP Leasing, AESOP Leasing
II, Original AESOP, PVHC, Quartx or AFC or the commencement of such action and
raising the defense that such Secured Party or the Trustee has agreed in
writing not to take such action and should be estopped and precluded therefrom
and such other defenses, if any,
123
as its counsel advises that it may assert. The provisions of this Section 13.17
shall survive the termination of this Indenture, and the resignation or removal
of the Trustee. Nothing contained herein shall preclude participation by any
Secured Party or the Trustee in the assertion or defense of its claims in any
such proceeding involving AFC-II, AESOP Leasing, AESOP Leasing II, Original
AESOP, PVHC, Quartx or AFC.
Section 13.18. No Recourse.
The obligations of AFC-II under this Indenture are solely the
obligations of AFC-II. No recourse shall be had for the payment of any amount
owing in respect of any fee hereunder or any other obligation or claim arising
out of or based upon this Indenture against any stockholder, employee, officer,
director or incorporator of AFC-II. Fees, expenses or costs payable by AFC-II
hereunder shall be payable by AFC-II to the extent and only to the extent that
AFC-II is reimbursed therefor pursuant to any of the Loan Agreements or the
Related Documents, or funds are then available or thereafter become available
for such purpose pursuant to Article 5. Nothing in this Section 13.18 shall be
construed to limit the Trustee from exercising its rights hereunder with
respect to the Collateral.
124
IN WITNESS WHEREOF, the Trustee and AFC-II have caused, this
Amended and Restated Base Indenture to be duly executed by their respective
duly authorized officers as of the day and year first written above.
AESOP FUNDING II L.L.C.,
as Issuer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Schedule I
Definitions List
I-1
EXHIBIT A-1
FORM OF TRANSFER CERTIFICATE
CERTIFICATE TO BE DELIVERED UPON [ ] EXCHANGE OF A BENEFICIAL INTEREST IN THE
RESTRICTED GLOBAL NOTE FOR DEFINITIVE SECURITIES OR [ ] EXCHANGE OR
REGISTRATION OF TRANSFER OF DEFINITIVE SECURITIES
To: ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee
AESOP Funding II L.L.C.
Re: AESOP Funding II L.L.C. Rental Car Asset Backed Notes
This Certificate relates to $__________ principal amount of
Notes held in *[ ] book-entry or [ ] definitive form by _____________________
[insert name of transferor]
(the "Transferor") (CUSIP No. ___) issued pursuant to an Amended and Restated
Base Indenture dated as of July 30, 1997 between AESOP Funding II L.L.C., as
Issuer, and ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee (the "Base Indenture").
Capitalized terms used herein and not otherwise defined, shall have the
meanings given thereto in the Base Indenture.
The Transferor has requested the Trustee by written order to
exchange or register the transfer of a Note or Notes.
In connection with such request and in respect of each such
Note, the Transferor does hereby certify as follows:*
[ ] Such Note is being acquired for its own account, without
transfer.
[ ] Such Note is being transferred to (i) a qualified
institutional buyer (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")) in reliance on Rule 144A, (ii) pursuant to
an exemption from registration in accordance with Regulation S under the
Securities Act or (iii) pursuant to Rule 144 of the Securities Act.
A-1-1
[ ] Such Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 144A, Rule 144 or Regulation S under the
Securities Act and in compliance with other applicable state and federal
securities laws and an opinion of counsel is being furnished simultaneously
with the delivery of this Certificate as required under Section 2.9(a)(i)(D) of
the Base Indenture.
[INSERT NAME OF TRANSFEROR]
By:
--------------------------------
Name:
Title:
Date:
* Check applicable box.
A-1-2
EXHIBIT A-2
[RESERVED]
A-2-1
EXHIBIT A-3
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RESTRICTED GLOBAL
NOTE TO TEMPORARY GLOBAL NOTE]
(exchanges or transfers pursuant to
Section 2.9 of the Base Indenture)
▇▇▇▇▇▇ Trust and Savings Bank,
as Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Attn: Indenture Trust Administration
Re: AESOP Funding II L.L.C. ("AFC-II")
Asset Backed Rental Car Notes
Reference is hereby made to the Amended and Restated Base Indenture,
dated as of July 30, 1997 (the "Base Indenture"), between AFC-II and ▇▇▇▇▇▇
Trust and Savings Bank, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Base Indenture.
This letter relates to _____________ principal amount of Series ___
Notes represented by a beneficial interest in the Restricted Global Series ___
Note (CUSIP No. ___) held with DTC by or on behalf of [transferor] as
beneficial owner (the "Transferor"). The Transferor has requested an exchange
or transfer of its beneficial interest for an interest in the Temporary Global
Series ___ Note (CUSIP (CINS) No. ___) to be held with [Euroclear] [Cedel]
(ISIN Code ___) (Common Code ___) through DTC.
In connection with such request and in respect of such Series ___
Note, the Transferor does hereby certify that such exchange or transfer has
been effected in accordance with the transfer restrictions set forth in the
Series ___ Notes and pursuant to and in accordance with Regulation S under the
Securities Act, and accordingly the Transferor does hereby certify that:
A-3-1
(1) the offer of the Series __ Notes was not made to a person
in the United States;
(2) (A) at the time the buy order was originated, the
transferee was outside the United States or the
Transferor and any person acting on its behalf
reasonably believed that the transferee was
outside the United States, or
(B) the transaction was executed in, on or through the
facilities of a designated offshore securities
market and neither the Transferor nor any person
acting on its behalf knows that the transaction
was prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial
interest being transferred as described above was held with DTC
through Euroclear or Cedel or both (Common Code ___ (ISIN Code ___)).
This certificate and the statements contained herein are made for your
benefit and the benefit of AFC-II and the Dealers.
[Insert Name of Transferor]
By:
------------------------------
Name:
Title:
Dated: _________, 199_
A-3-2
EXHIBIT A-4
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RESTRICTED GLOBAL
NOTE TO PERMANENT GLOBAL NOTE
(exchanges or transfers pursuant to
Section 2.9 of the Base Indenture)
▇▇▇▇▇▇ Trust and Savings Bank,
as Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Indenture Trust Administration
Re: AESOP Funding II L.L.C. ("AFC-II")
Asset Backed Rental Car Notes
Reference is hereby made to the Amended and Restated Base Indenture,
dated as of July 30, 1997 (the "Base Indenture"), between AFC-II and ▇▇▇▇▇▇
Trust and Savings Bank, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Base Indenture.
This letter relates to __________ principal amount of Series ___ Notes
represented by, a beneficial interest in the Restricted Global Series ___ Note
(CUSIP No. ___) held with DTC by or on behalf of [transferor] as beneficial
owner (the "Transferor"). The Transferor has requested an exchange or transfer
of its beneficial interest for an interest in the Permanent Global Series ___
Note (CUSIP (CINS) No. [___]).
In connection with such request and in respect of such Series ___
Notes, the Transferor does hereby certify that such exchange or transfer has
been effected in accordance with the transfer restrictions set forth in the
Series ___ Notes and (i) that, with respect to transfers made in reliance on
Regulation S under the Securities Act:
(1) the offer of the Series ___ Notes was not made to a person in the
United States;
A-4-1
(2) (A) at the time the buy order was originated, the transferee
was outside the United States or the Transferor and any
person acting on its behalf reasonably believed that the
transferee was outside the United States, or
(B) the transaction was executed in, on or through the
facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf
knows that the transaction was prearranged with a buyer in
the United States;
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable, and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
or (ii) that, with respect to transfers made in reliance on Rule 144A under the
Securities Act, the Series ___ Notes are being transferred in a transaction
permitted by Rule 144A under the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of AFC-II and the Dealers.
[Insert Name of Transferor]
By:
------------------------------
Name:
Title:
Dated: ____________, 199_
A-4-2
EXHIBIT A-5
FORM OF TRANSFER CERTIFICATE FOR TRANSFER OR
EXCHANGE FROM TEMPORARY GLOBAL NOTE
TO RESTRICTED GLOBAL NOTE
(exchanges or transfers pursuant to
Section 2.9 of the Base Indenture)
▇▇▇▇▇▇ Trust and Savings Bank,
as Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Indenture Trust Administration
Re: AESOP Funding II L.L.C. ("AFC-II")
Asset Backed Rental Car Notes
Reference is hereby made to the Amended and Restated Base Indenture,
dated as of July 30, 1997 (the "Base Indenture"), between AFC-II and ▇▇▇▇▇▇
Trust and Savings Bank, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
This letter relates to _____________ principal amount of Series ___
Notes which are held in the form of the Permanent Global Series ___ Note (CUSIP
(CINS) No. ) with Euroclear/Cedel(1) (ISIN Code [ ]) (Common Code [ ]) through
DTC by or on behalf of [transferor] as beneficial owner (the "Transferor"). The
Transferor has requested an exchange or transfer of its beneficial interest in
the Series ___ Notes for an interest in the Restricted Global Series ___ Note
(CUSIP No. [ ]).
In connection with such request, and in respect of such Series ___
Notes, the Transferor does hereby certify that such Series ___ Notes are being
transferred in accordance with Rule 144A under the United States Securities Act
of 1933, as amended (the "Securities Act") to a transferee that the Transferor
reasonably believes is purchasing the Series ___ Notes for its own account or
an
------------
1 Select appropriate depositary.
A-5-1
account with respect to which the transferee exercises sole investment
discretion and the transferee and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of AFC-II and the Dealers.
[Insert Name of Transferor]
By:
------------------------------
Name:
Title:
Dated: ____________, 199_
A-5-2
EXHIBIT B
FORM OF CLEARING SYSTEM CERTIFICATE
AESOP Funding II L.L.C.
c/o Lord Securities Corporation
Two Wall Street, 19th Floor
New York, New York 10005
▇▇▇▇▇▇ Trust and Savings Bank, as Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Reference is hereby made to the Amended and Restated Base Indenture
dated as of July 30, 1997 (the "Indenture") among AESOP Funding II L.L.C, as
Issuer, and ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
This is to certify that, based solely on certificates we have received
in writing, by tested telex or by electronic transmissions from noteholders
appearing in our records as persons being entitled to a portion of the original
principal amount of the Series Notes (the "Notes") equal to, as of the date
hereof, U.S. $________ (our "Noteholders"), certificates with respect to such
portion, substantially to the effect set forth in Exhibits A-3, A-4 and A-5 to
the Indenture.
We further certify (i) that we are not making available herewith for
exchange any portion of the Temporary Global Note excepted in such certificates
and (ii) that as of the date hereof we have not received any notification from
any of our Noteholders to the effect that the statements made by such
Noteholder with respect to any portion of the part submitted herewith for
exchange are no longer true and cannot be relied upon as at the date hereof. We
understand that this certification is required in connection with certain
securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with this certificate is or would be relevant, we irrevocably authorized you to
produce this
B-1
certification to any interested party in such proceedings.
Dated: ____________, 199_(1)
Yours faithfully,
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, Brussels office, as
operator of the Euroclear System
or
CEDEL, Societe Anonyme
By:
--------------------------------
Name:
Title:
-------------
(1) To be dated no earlier than the earliest of the Exchange Date or the
relevant Interest Payment Date or the redemption date (as the case may be).
B-2
EXHIBIT C
FORM OF CERTIFICATE OF BENEFICIAL OWNERSHIP
Re: AESOP Funding II L.L.C.
Rental Car Asset Backed Notes, Series [__]
If the Securities are of the category contemplated in Section
230.903(c)(3) of Regulation S under the Securities Act of 1933, as amended (the
"Act"), then this is to certify that, except as set forth below, (i) in the
case of debt securities, the Securities are beneficially owned by (a) non-U.S.
persons or (b) U.S. persons who purchased the Securities in transactions which
did not require registration under the Act; or (ii) in the case of equity
securities, the Securities are owned by (x) non-U.S. persons (and such
person(s) are not acquiring the Securities for the account or benefit of U.S.
person(s)) or (y) U.S. person(s) who purchased the Securities in a transaction
which did not require registration under the Act. If this certification is
being delivered in connection with the exercise of warrants pursuant to Section
230.902(m) of Regulation S under the Act, then this is further to certify that,
except as set forth below, the Securities are being exercised by and on behalf
of non-U.S. person(s). As used in this paragraph the terms "U.S. person" has
the meaning given to it by Regulation S under the Act.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
Securities held by you for our account in accordance with your operating
procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.
C-1
This certification excepts and does not relate to U.S.$_______ of such
interest in the above Securities in respect of which we are not able to certify
and as to which we understand exchange and delivery of definitive Securities
(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification to any
interested party in such proceedings.
Date: _____________, 19__(2)
By:
---------------------------------------------
As, or as agent for, the beneficial owner(s)
of the Securities to which this certificate
relates.
-------------
(2) Not earlier than 15 days prior to the certification event to which the
certification relates.
C-2
EXHIBIT D
FORM OF MONTHLY CERTIFICATE
AESOP Funding II L.L.C.
RENTAL CAR ASSET BACKED NOTES
The undersigned, duly authorized representatives of AESOP Funding II
L.L.C., a Delaware limited liability company ("AFC-II"), pursuant to the
Amended and Restated Trust Indenture, dated as of July 30, 1997 (hereinafter as
such agreement may have been, or may be from time to time, supplemented,
amended or otherwise modified, the "Base Indenture"), between AFC-II, as
Issuer, and ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee, do hereby certify to the
best of their knowledge after reasonable investigation that:
1. Capitalized terms used in this certificate have the respective
meanings set forth in the Base Indenture, or in the case of a particular Series
of Notes, the related Supplement. This certificate is delivered pursuant to
Section 4.1(b) of the Base Indenture.
2. The undersigned are Authorized Officers of AESOP Leasing.
3. The date of this certificate is a Determination Date under the Base
Indenture. Attached hereto as Schedule I is a true and correct copy of the
Monthly Noteholders' Statement to be delivered on the Determination Date
pursuant to Section 4.1(b) of the Base Indenture.
D-1
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this certificate this ____ day of _________________, 199_.
AESOP FUNDING II L.L.C.
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
D-2
SCHEDULE I
1. [1(a), (b) and (c) are only to be provided to the Trustee] (a) The
aggregate amount of payments received and deposited in the Collection Account
with respect to Vehicles from the Manufacturers and/or auction dealers under
Manufacturer Programs for the Related Month with respect to the Determination
Date was equal to $ for Vehicles leased under the AESOP I Operating Lease,
$__________ for Vehicles leased under the AESOP II Operating Lease and
$__________ for Vehicles leased under the Finance Lease.
(b) The aggregate amount of payments received and deposited in the
Collection Account from third parties (other than Manufacturers and auction
dealers) with respect to the sale of Vehicles for the Related Month with
respect to the Determination Date was equal to $__________ for Vehicles leased
under the AESOP I Operating Lease, $__________ for Vehicles leased under the
AESOP II Operating Lease and $__________ for Vehicles leased under the Finance
Lease.
(c) The aggregate amount of other Collections for the Related Month
deposited in the Collection Account with respect to the determination date was
equal to $________________.
2. The Invested Percentage on the last day of the Related Month was
equal to (for each Series of Notes and each Class of each Series):
Series %
Class ___ _____%
Class ___ _____%
Series %
Class ___ _____%
Class ___ _____%
etc.
3. The total amount to be distributed to the Noteholders (expressed as
a dollar amount per $1,000) on the next succeeding Distribution Date is equal
to (for each Series of Notes and each Class of each Series):
Series $
Class ___ $_____
D-3
Class ___ $_____
Series $
Class ___ $_____
Class ___ $_____
etc.
4. (a) The aggregate amount to be distributed to the Noteholders
(expressed as a dollar amount per $1,000) on the next succeeding Distribution
Date in respect of principal is equal to (for each Series of Notes and each
Class of each Series):
Series $
Class ___ $_____
Class ___ $_____
Series $
Class ___ $_____
Class ___ $_____
etc.
(b) The aggregate amount to be distributed to the Noteholders
(expressed as a dollar amount per $1,000) on the next succeeding Distribution
Date in respect of interest is equal to (for each Series of Notes and each
Class of each Series):
Series $
Class ___ $_____
Class ___ $_____
Series $
Class ___ $_____
Class ___ $_____
etc.
5. (a) The amount of Enhancement used or drawn in connection with the
distribution to Noteholders on the next succeeding Distribution Date (for each
Series of Notes and each Class of each Series):
Series $
Class ___ $_____
Class ___ $_____
Series $
Class ___ $_____
Class ___ $_____
etc.
D-4
(b) The amount available to be drawn under the Enhancement in
connection with the distribution to Noteholders on the next succeeding
Distribution Date, after giving effect to any drawing on the Enhancement and
payments to the Enhancement Provider on the next succeeding Distribution Date
(for each Series of Notes and each Class of each Series):
Series $
Class ___ $_____
Class ___ $_____
Series $
Class ___ $_____
Class ___ $_____
etc.
6. The existing Carryover Controlled Amortization Amount (if any) is
(for each Series of Notes and each Class of each Series):
Series $
Class ___ $_____
Class ___ $_____
Series $
Class ___ $_____
Class ___ $_____
etc.
7. The Pool Factor (if any) for the Related Month is equal to (for
each Series of Notes and each Class of each Series):
Series %
Class ___ _____%
Class ___ _____%
Series %
Class ___ _____%
Class ___ _____%
etc.
8. The Vehicle Identification Numbers of all Vehicles leased under the
Leases at the close of business on the last day of the Related Month are listed
on Annex A.
D-5
9. (a) The aggregate Net Book Value of all Non-Program Vehicles
disposed of during the related Measurement Month is as follows:
A. Vehicles under the AESOP I Operating
Lease:
$_______________
B. Vehicles under the Finance Lease:
$_______________
(b) The aggregate Disposition Proceeds with respect to all Non-Program
Vehicles disposed of during the related Measurement Month is as follows:
A. Vehicles under the AESOP I Operating
Lease:
$_______________
B. Vehicles under the Finance Lease:
$_______________
10. The Aggregate Asset Amount and the Aggregate Asset Amount
Deficiency at the close of business on the last day of the Related Month are $
and $ , respectively.
11. The aggregate Net Book Value of all Non-Program Vehicles as of
the last day of the Related Month is as follows:
A. Vehicles under the AESOP I Operating
Lease:
$_______________
B. Vehicles under the Finance Lease:
$_______________
12. The amount of Monthly Base Rent and any Supplemental Rent due
under each Lease on the next succeeding Payment Date is as follows:
A. AESOP I Operating Lease Base Rent due: $___; and AESOP I Operating
Lease Supplemental Rent due: $___.
B. Finance Lease Base Rent due: $___; and Finance Lease Supplemental Rent
due: $___.
D-6
C. AESOP II Operating Lease Base Rent due: $___; and AESOP II Operating
Lease Supplemental Rent due: $__.
13. The amount of Loan Interest, Monthly Loan Principal Amount and any
other amounts due under each Loan Agreement on the next succeeding Payment Date
is as follows:
A. AESOP I Operating Lease Loan Agreement Loan Interest due: $___;
AESOP I Operating Lease Loan Agreement Monthly Loan Principal Amount
due: $___; and
AESOP I Operating Lease Loan Agreement (other amounts due): $___.
B. AESOP I Finance Lease Loan Agreement Loan Interest due: $___;
AESOP I Finance Lease Loan Agreement Monthly Loan Principal Amount
due: $___; and
AESOP I Finance Lease Loan Agreement (other amounts due): $___.
C. AESOP II Loan Agreement Loan Interest due: $___;
AESOP II Loan Agreement Monthly Loan Principal Amount due: $___; and
AESOP II Loan Agreement (other amounts due): $___.
14. The amount on deposit in the Termination Services Reserve Account
is $________.
15. The amount, if any, of withdrawals in respect of Termination
Services Reserve Draw Amounts from the Termination Services Reserve Account
during the related month was $_________.
16. The amount, if any, of investment earnings on funds on deposit in
the Termination Services Reserve Account that will be distributed to the
Administrator on the next succeeding payment date is $__________.
17. (a) The Required Enhancement Amount with respect to each Series is
as follows:
Series ___ $_____
Series ___ $_____
etc.
D-7
(b) The amount of Enhancement Deficiency existing with respect to each
Series is as follows:
Series ___ $_____
Series ___ $_____
etc.
18. The following Liens exist on the Loan Collateral (excluding Liens
granted pursuant to the Indenture and the other Related Documents or permitted
thereunder):
[List as applicable]
19. Check if applicable:
[ ] Lease Event of Default has occurred.
[ ] Loan Event of Default has occurred.
D-8
ANNEX A
1. Vehicles leased under the AESOP I Operating Lease:
[List]
2. Vehicles leased under the AESOP II Operating Lease:
[List]
3. Vehicles leased under the Finance Lease:
[List]
D-9
EXHIBIT E
FORM OF MONTHLY NOTEHOLDERS' STATEMENT
AESOP FUNDING II L.L.C.
RENTAL CAR ASSET BACKED NOTES
Series
Under Section 4.1(c) of the Amended and Restated Base
Indenture, dated as of July 30, 1997 (hereinafter as such agreement may have
been, or may be from time to time, supplemented, amended or otherwise modified,
the "Base Indenture"), between AESOP Funding II L.L.C., a Delaware limited
liability company ("AFC-II"), and ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee
(the "Trustee"), AFC-II is required to prepare certain information each month
for the Trustee regarding current distributions to Noteholders. The information
which is required to be prepared with respect to the Distribution Date of
_________________ , 199_ is set forth below. Capitalized terms used herein have
their respective meanings set forth in the Definitions List attached as
Schedule I to the Base Indenture, or in the case of a particular Series of
Notes, the related Supplement.
NOTE: Information contained herein with respect to each Series will
only be distributed to holders of Notes with respect to such
Series.
I. INVESTED PERCENTAGE
As of ____________, the Invested Percentage is computed as the result of the
following (the percentage equivalent, never to exceed 100%):
A. With respect to Principal Collections on Series 1997-1 Notes:
(1) Series 1997-1 Invested Amount: $___________, plus
(2) Series 1997-1 Overcollateralization Amount:
$___________, divided by
(3) the greater of:
(a) the Aggregate Asset Amount: $__________, or
(b) the sum of ((1) + (2)) above for all Series
outstanding.
Series 1997-1 Invested Percentage (with respect to Principal
Collections ((1+2)/(greater of (a) or (b)): ____%
E-1
B. With respect to Principal Collections on Series 1997-2 Notes:
(1) Series 1997-2 Invested Amount: $_________, divided
by
(2) the greater of:
(a) the Aggregate Asset Amount: $________, or
(b) the Sum of (A(1) + A(2) above for all Series
Outstanding.
Series 1997-2 Invested Percentage (with respect to Principal
Collections (1)/(greater of (a) or (b)): ____%
C. With respect to Interest Collections on Series 1997-1 Notes:
(1) Accrued Amounts on Series 1997-1 Notes: $________,
divided by
(2) The aggregate Accrued Amounts with respect to all
Series of Notes: $_________.
Series 1997-1 Invested Percentage (with respect to Interest
Collections (1/2): ____%
D. With respect to Interest Collections as Series 1997-2 Notes:
(1) Accrued Amounts on Series 1997-2 Notes: $_______,
divided by
(2) The aggregate Accrued Amounts with respect to all
Series of Notes: $__________.
Series 1997-2 Invested Percentage (with respect to Interest
Collections ((1)/(2)): _____%
II. AGGREGATE ASSET AMOUNT
As of __________, the Aggregate Asset Amount is computed as the result of the
following:
▇. ▇▇▇▇▇▇▇▇▇ Loan Principal Amount of all Loans outstanding:
$___________, plus
B. Outstanding amount of cash and Permitted Investments held in
the Collection Account: $__________, minus
C. All Monthly Loan Principal Amount payments then or previously
due but not paid with respect to the Loans: $____________.
Total Aggregate Asset Amount (A + B - C): $___________.
E-2
III. REQUIRED AGGREGATE ASSET AMOUNT
As of _____________________, the Required Aggregate Asset Amount is computed as
the result of the following:
A. Series 1997-1 Invested Amount ($________________), plus
B. Series 1997-2 Invested Amount $_____________), plus
C. Invested Amounts for other Series of Notes ($_____________).
Required Aggregate Asset Amount (A + B + C): $__________.
IV. AGGREGATE ASSET AMOUNT DEFICIENCY
As of __________, the Aggregate Asset Amount Deficiency equals: (III - II):
$_________.
V. DISTRIBUTIONS TO NOTEHOLDERS
As of ________________, the distributions with respect to principal and
interest are computed as the result of the following:
A. With respect to Interest Payments on Series 1997-1 Notes:
(1) One-twelfth of ___% (the Class A-1 Note Rate): ___%,
times
(2) Class A-1 Invested Amount (less principal payments):
$______.
Series 1997-1 Class A-1 Monthly Interest ((1) * (2)): $_______:
(3) One-twelfth of ___% (the Class A-2 Note Rate):
____%, times
(4) Class A-2 Invested Amount (less principal payments):
$_______.
Series 1997-1 Class A-2 Monthly Interest ((3) * (4)): $________.
(5) Any unpaid Deficiency Amounts on Class A-1 Notes
(plus interest accrued thereon): $_______, plus
(6) Any unpaid Deficiency Amounts on Class A-2 Notes
(plus interest accrued thereon): $_______.
Series 1997-1 distribution with respect to interest ((1) * (2)) + ((3)
* (4)) + (5) + (6) = $_________.
E-3
B. With respect to Interest Payments on Series 1997-2 Notes:
(1) The Series 1997-2 Note Rate: ___%, times
(2) The average Series 1997-2 Invested Amount, times
(3) The actual number of days in such Series 1997-2
Interest Period divided by 360: _______, plus
(4) Any unpaid Deficiency Amounts (plus interest accrued
thereon): $__________.
Series 1997-2 interest ((1) * (2) * (3)) + (4) = $_________.
C. With respect to Principal Payments on Series 1997-1 Notes:
(1) During Series 1997-1 Controlled Amortization Period:
(a) Class A-1 Controlled Amortization Amount:
$_______, plus
(b) Class A-2 Carryover Controlled Amortization
Amount: $_______.
Series 1997-1 Class A-1 principal payment ((a) + (b)): $_________.
(c) Class A-2 Controlled Amortization Amount:
$_______, plus
(d) Class A-2 Carryover Controlled Amortization
Amount: $_______.
Series 1997-1 Class A-2 principal payment ((c) + (d)): $________.
Series 1997-1 distribution with respect to principal (a) + (b) + (c) +
(d) = $_________.
(2) During Series 1997-1 Rapid Amortization Period:
(a) The total for each day during the Related
Month of the Series 1997-1 Invested
Percentage (as of each day) of the
aggregate amount of Principal Collection on
each day: $_______.
D. With respect to Principal Payments on Series 1997-2 Notes:
(1) During Series 1997-2 Controlled Amortization Period:
(a) The total for each day during the Related
Month of the Series 1997-2 Invested
Percentage (as of each day) of the
aggregate amount of Principal Collections
of each day: $_______, plus
(b) any Increase: $________.
Series 1997-2 principal payment (a) + (b): $_______.
E-4
(2) During Series 1997-2 Rapid Amortization Period:
(a) The total for each day during the Related
Month of the Series 1997-2 Invested
Percentage (as of each day) of the
aggregate amount of Principal Collections
on each day: $_______.
E. The total amount distributed to the Series 1997-1
Noteholders: (A + C): $_________.
F. The total amount distributed to the Series 1997-2
Noteholders: (B + D): $_________.
VI. MONTHLY BASE RENT
As of the __________ Payment Date, the Monthly Base Rent is computed as a
result of the following:
A. With respect to the AESOP I Operating Lease:
(1) The Loan Interest and Supplemental Interest with
respect to the Loans under such Lease: $________;
plus
(2) Accrued Depreciation Charges (plus, without double
counting, Ineligible Vehicles, Casualty Vehicles and
Vehicles sold to third parties under the AESOP I
Operating Lease): $_______; plus
(3) Upfront incentive payments from Manufacturers with
respect to Non-Program Vehicles: $_______; plus
(4) Lease's share of Monthly Administration Fee:
$______; plus
(5) AESOP I Operating Lease Loan Agreement's share of
Carrying Charges: $_______; plus
(6) Portion of AESOP I Operating Lease Management Fee:
$________; plus
(7) One percent of the Net Book Value of Non-Program
Vehicles: $________.
The Monthly Base Rent with respect to the AESOP I Operating Lease is:
(1 + 2 + 3 + 4 + 5 + 6 + 7) = $__________.
B. With respect to the Finance Lease:
(1) The Loan Interest and Supplemental Interest with
respect to the Loans under such Lease: $________;
plus
(2) Accrued Depreciation Charges (plus, without double
counting, Ineligible Vehicles, Casualty Vehicles and
Vehicles sold to third parties under the Finance
Lease): $_______; plus
E-5
(3) Upfront incentive payments from Manufacturers with
respect to Non-Program Vehicles: $_______; plus
(4) Lease's share of Monthly Administration Fee:
$______; plus
(5) Finance Lease Loan Agreement's share of Carrying
Charges: $_______; plus
(6) Portion of AESOP I Operating Lease Management Fee:
$________; plus
(7) One percent of the Net Book Value of Non-Program
Vehicles: $________.
The Monthly Base Rent with respect to the AESOP I Finance Lease is:
(1 + 2 + 3 + 4 + 5 + 6 + 7) = $__________.
C. With respect to the AESOP II Operating Lease:
(1) The Loan Interest and Supplemental Interest with
respect to the Loans under such Lease: $________;
plus
(2) Accrued Depreciation Charges (plus, without double
counting, Ineligible Vehicles, Casualty Vehicles and
Vehicles sold to third parties under the AESOP II
Operating Lease): $_______; plus
(3) Lease's share of Monthly Administration Fee:
$______; plus
(4) AESOP II Operating Lease Loan Agreement's share of
Carrying Charges: $_______; plus
(5) Dividends accrued on the outstanding Preferred
Stock: $_______;
(6) Portion of AESOP II Management Fee: $________.
The Monthly Base Rent with respect to the AESOP II Operating Lease is:
(1 + 2 + 3 + 4 + 5 + 6) = $__________.
VII. SUPPLEMENTAL BASE RENT
As of the __________ Payment Date, the Supplemental Base Rent is computed as a
result of the following:
A. With respect to the AESOP I Operating Lease:
(1) Supplemental Base Rent: $______.
B. With respect to the AESOP I Finance Lease:
(1) Supplemental Base Rent: $______.
C. With respect to the AESOP II Operating Lease:
(1) Supplemental Base Rent: $______.
E-6
VIII. MONTHLY ADMINISTRATION FEE
The amount of the Administration Fee payable by the Issuer is computed as a
result of the following:
A. The Series 1997-1 Percentage of the Monthly Administration
Fee: $_______, and
B. The Series 1997-2 Percentage of the Monthly Administration
Fee: $_______, and
C. Any other Series Percentage of the Monthly Administration Fee:
$_______.
Total Administration Fee payable by the Issuer (A + B + C) =
$_________.
IX. CP BORROWING BASE WITH RESPECT TO SERIES 1997-2
As of ________________, the CP Borrowing Base is computed as the result of the
following:
A. The Series 1997-2 Invested Amount: $__________, plus
B. For all principal amounts of Series 1997-2 Notes funded by
Commercial Paper Notes, interest that will accrue on such
Series 1997-2 Notes through the maturity date of the
Commercial Paper Notes issued to fund such Series 1997-2
Notes: $___________, plus
C. For all other Series 1997-2 Notes, interest accrued on such
Series 1997-2 Notes: $ , plus
D. The outstanding principal amount of cash and Eligible
Investments held by the Collateral Agent in the Collateral
Account (other than amounts set aside for repayment of the
principal of, or interest on, Liquidity Advances, LOC
Liquidity Disbursements or Commercial Paper Notes):
$________, minus
E. The current Series 1997-2 Lease Payment Deficit: $_________,
minus
F. Prior, unreimbursed Series 1997-2 Lease Credit Payment
Deficits: $_______.
Total CP Borrowing Base (A + B + C + D - E - F): $__________.
X. LOAN PAYMENTS DUE
E-7
A. Loan Principal Due with respect to the AESOP I Operating
Lease Loan Agreement (without duplication):
(1) Accrued Depreciation Charges for all Vehicles leased
under the AESOP I Operating Lease: $___________;
plus
(2) Incentive payments from Manufacturers with respect
to purchases of Non-Program Vehicles leased under
the AESOP I Operating Lease: $_________, plus
(3) The aggregate Termination Values of Vehicles leased
under the AESOP I Operating Lease: $__________,
minus
(4) Amounts received by the Lender or Trustee, or
deposited in the Collection Account (representing
Repurchase Prices and sales proceeds for Vehicles
leased under the AESOP I Operating Lease):
$_________, minus
(5) Payments applied to the Loan Principal Amount:
$_________, times
(6) The applicable Loan Payment Allocation Percentage:
____%.
Total Principal Due ((1 + 2 + 3 - 4 - 5) * (6)):
$_________.
Additional amounts due: $__________.
B. Loan Interest Due with respect to the AESOP I Operating Lease
Loan Agreement:
(1) The greater of the Lender's Carrying Cost Interest
Rate (as a percentage equivalent):
(a) The amount of interest accrued with respect
to all Series of Notes: $________, plus
(b) Any Swap Payments payable by the Issuer:
$_________, minus
(c) Any accrued earnings on Permitted
Investments in the Collection Account:
$__________, divided by
(d) The Average Daily Loan Balance under the
Loan Agreements: $_________.
▇▇▇▇▇▇'s Carrying Cost Interest Rate: ((a + b - c) / (d)):
___%, or
(2) The rate of Loan Interest specified in the AESOP I
Operating Lease Loan Agreement Loan Request
Response: _____%
Loan Interest = (greater of ((1) or (2)) = ___%
(3) Unpaid principal amount of Loans: $_________
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Total Loan Interest ((3) * (greater of ((1) or
(2))): $
C. Loan Principal Due with respect to the AESOP II Loan
Agreement (without duplication):
(1) Accrued Depreciation Charges for all Vehicles leased
under the AESOP II Operating Lease: $___________,
plus
(2) The aggregate Termination Values of Vehicles leased
under the AESOP II Operating Lease: $__________,
minus
(3) Amounts received by the Lender or Trustee, or
deposited in the Collection Account (representing
Repurchase Prices and sales proceeds for Vehicles
leased under the AESOP II Operating Lease):
$_________, minus
(4) Payments applied to the Loan Principal Amount:
$_________, times
(5) The applicable Loan Payment Allocation Percentage:
____%.
Total Principal Due ((1 + 2 - 3 - 4) * (5)):
$____________.
Additional amounts due: $__________.
D. Loan Interest Due with respect to the AESOP II Loan Agreement:
(1) The greater of the percentage from B(1) above: ___%,
or
(2) The rate of Loan Interest specified in the AESOP II
Loan Agreement Loan Request Response: _____%
Loan Interest = (greater of ((1) or (2)) = ___%
(3) Unpaid principal amount of Loans: $_________
Total Loan Interest (3 * (greater of ((1) or (2)):
$_________.
E. Loan Principal Due with respect to the AESOP I Operating
Lease Loan Agreement without duplication:
(1) Accrued Depreciation Charges for all Vehicles leased
under the Finance Lease: $___________, plus
(2) Incentive payments from Manufacturers with respect
to purchases of Non-Program Vehicles leased under
the Finance Lease: $_________, plus
(3) The aggregate Termination Values of Vehicles leased
under the Finance Lease: $__________, minus
(4) Amounts received by the Lender or Trustee, or
deposited in the Collection Account (representing
Repurchase Prices and sales proceeds for Vehicles
leased under the Finance Lease): $_________, minus
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(5) Payments applied to the Loan Principal Amount:
$_________, times
(6) The applicable Loan Payment Allocation Percentage:
________%.
Total Principal Due ((1 + 2 + 3 - 4 - 5) * (6):
$____________.
Additional amounts due: $__________.
F. Loan Interest Due with respect to the AESOP I Operating Lease
Loan Agreement:
(1) The greater of the percentage from B(1) above:
____%, or
(2) The rate of Loan Interest specified in the AESOP I
Operating Lease Loan Agreement Loan Request
Response: _____%
Loan Interest = (greater of ((1) or (2)): ___%
(3) Unpaid principal amount of Loans: $_________
Total Loan Interest ((3) * (greater of ((1) or (2)):
$________.
XI. ENHANCEMENT
A. With respect to Series 1997-1:
(1) Draws on Series 1997-1 Available Reserve Account
Amount: $________.
(2) Current Series 1997-1 Available Reserve Account
Amount: $________.
(3) Current Series 1997-1 Overcollateralization Amount:
$________.
Available Series 1997-1 Enhancement Amount: (2 + 3):
$________.
B. With respect to Series 1997-2:
(1) Draws on the Series 1997-2 Letter of Credit:
$________.
(2) Draws on the Series 1997-2 Cash Collateral Account:
$_______.
(3) Current amount available on Series 1997-2 Letter of
Credit: $________
(4) Current amount available from Series 1997-2 Cash
Collateral Account: $________.
Available Series 1997-2 Enhancement Amount: (3): $________.
C. Series 1997-1 Required Enhancement Amount:
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(1) The Series 1997-1 Percentage of the excess (if any)
of the Non-Program Vehicle Amount over the Series
1997-1 Maximum Non-Program Vehicle Amount:
$________, plus
(2) The Series 1997-1 Percentage of the excess (if any)
of the Non-Eligible Manufacturer Amount over the
Series 1997-1 Maximum Non-Eligible Manufacturer
Amount: $________, plus
(3) The Series 1997-1 Percentage of the excess (if any)
of the Mitsubishi Vehicle Amount over the Series
1997-1 Maximum Manufacturer Amount with respect to
Mitsubishi: $________, plus
(4) The Series 1997-1 Percentage of the excess (if any)
of the Subaru/Hyundai/Suzuki Vehicle Amount over the
Series 1997-1 Maximum Manufacturer Amount with
respect to Subaru, Hyundai and Suzuki (in the
aggregate): $________, plus
(5) The Series 1997-1 Percentage of the excess (if any)
of the Specified States Amount over the Series
1997-1 Specified States Amount: $________, plus
(6) The product of: (a) The Series 1997-1 Required
Enhancement Percentage: ___%, times (b) The Series
1997-1 Invested Amount.
The Series 1997-1 Required Enhancement Amount:
(1 + 2 + 3 + 4 + 5 + (6(a) * 6(b))): $________.
D. Series 1997-1 Enhancement Deficiency:
(1) The amount by which:
(a) The Series 1997-1 Enhancement Amount:
$________, is less then
(b) The Series 1997-1 Required Enhancement
Amount: $________.
The Series 1997-1 Enhancement Deficiency, if any, is:
$________.
E. Series 1997-2 Required Enhancement Amount:
(1) The Series 1997-2 Percentage of the excess (if any)
of the Non-Program Vehicle Amount over the Series
1997-2 Maximum Non-Program Vehicle Amount:
$________, plus
(2) The Series 1997-2 Percentage of the excess (if any)
of the Non-Eligible Manufacturer Amount over the
Series 1997-2 Maximum Non-Eligible Manufacturer
Amount: $________, plus
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(3) The Series 1997-2 Percentage of the excess (if any)
of the Mitsubishi Vehicle Amount over the Series
1997-2 Maximum Manufacturer Amount with respect to
Mitsubishi: $________, plus
(4) The Series 1997-2 Percentage of the excess (if any)
of the Subaru/Hyundai/Suzuki Vehicle Amount over the
Series 1997-2 Maximum Manufacturer Amount with
respect to Subaru, Hyundai and Suzuki (in the
aggregate): $________, plus
(5) The excess (if any) of the Financed Vehicle Amount
over the Series 1997-2 Maximum Financed Vehicle
Amount: $________, plus
(6) The product of:
(a) The Series 1997-2 Required Enhancement
Percentage: ___%, times
(b) The Series 1997-2 Invested Amount.
The Series 1997-1 Required Enhancement Amount:
(1 + 2 + 3 + 4 + 5 + (6(a) * 6(b))): $________.
F. Series 1997-1 Enhancement Deficiency:
(1) The amount by which:
(a) The Series 1997-2 Enhancement Amount: $_______,
is less then
(b) The Series 1997-2 Required Enhancement Amount:
$________.
The Series 1997-2 Enhancement Deficiency, if any, is: $______.
XII. LIENS AND DEFAULTS
A. The following Liens exist on the Loan Collateral (excluding
Liens granted pursuant to the Indenture and the other
Related Documents or permitted thereunder):
[List as applicable]
B. Check if applicable:
[ ] Lease Event of Default has occurred.
[ ] Loan Event of Default has occurred.
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XIII. SALE OF NON-PROGRAM VEHICLES
A. The aggregate Net Book value of all Non-Program Vehicles
disposed of during the related Measurement Month is as
follows:
(1) Vehicles under the AESOP I Operating Lease:
$_________.
(2) Vehicles under the Finance Lease: $________.
B. The aggregate Disposition Proceeds with respect to all
Non-Program Vehicles disposed of during the related
Measurement Month is as follows:
(1) Vehicles under the AESOP I Operating Lease:
$_________.
(2) Vehicles under the Finance Lease: $_________.
XIV. VALUE OF NON-PROGRAM VEHICLES
A. The aggregate Net Book Value of all Non-Program Vehicles is
as follows:
(1) Vehicles under the AESOP I Operating Lease:
$_________.
(2) Vehicles under the Finance Lease: $_________.
B. The aggregate Market Value of all Non-Program Vehicles is as
follows:
(1) Vehicles under the AESOP I Operating Lease:
$_________.
(2) Vehicles under the Finance Lease: $_________.
XV. TERMINATION SERVICES RESERVE ACCOUNT
A. The amount on deposit in the Termination Services Reserve
Account: $_________.
B. The amount of withdrawals from the Termination Services
Reserve Account: $_________.
C. The amount, if any, of investment earnings on funds on
deposit in the Termination Services Reserve Account that will
be distributed to the Administrator (as a portion of the
Monthly Administration Fee): $_________.
E-13
IN WITNESS WHEREOF, the undersigned have duly executed this
certificate this day of , 199 .
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
E-14
TABLE OF CONTENTS
Section Page
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY
REFERENCE........................................ 2
Section 1.1. Definitions................................. 2
Section 1.2. Cross-References............................ 2
Section 1.3. Accounting and Financial
Determinations; No Duplication............ 2
Section 1.4. Rules of Construction....................... 2
ARTICLE 2. THE NOTES.......................................... 3
Section 2.1. Designation and Terms of Notes.............. 3
Section 2.2. Notes Issuable in Series.................... 4
Section 2.3. Supplement For Each Series.................. 9
Section 2.4. Execution and Authentication................ 12
Section 2.5. Form of Notes; Book Entry Provisions;
Title..................................... 14
Section 2.6. Registrar and Paying Agent.................. 17
Section 2.7. Paying Agent to Hold Money in Trust......... 18
Section 2.8. Noteholder List............................. 20
Section 2.9. Transfer and Exchange....................... 20
Section 2.10. Legending of Notes.......................... 29
Section 2.11. Replacement Notes........................... 30
Section 2.12. Treasury Notes.............................. 32
Section 2.13. Temporary Notes............................. 32
Section 2.14. Cancellation................................ 33
Section 2.15. Principal and Interest...................... 33
Section 2.16. Book-Entry Notes............................ 34
Section 2.17. Notices to Clearing Agency.................. 37
Section 2.18. Definitive Notes............................ 37
Section 2.19. Tax Treatment............................... 40
ARTICLE 3. SECURITY.......................................... 41
Section 3.1. Grant of Security Interest.................. 41
Section 3.2. Certain Rights and Obligations of
AFC-II Unaffected......................... 44
Section 3.3. Performance of Agreement.................... 45
Section 3.4. Release of Lien on Vehicles................. 46
Section 3.5. Stamp, Other Similar Taxes and Filing
Fees...................................... 46
Section 3.6. Vehicle Title Check......................... 47
Section 3.7. Termination Services Reserve Account........ 47
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Section Page
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ARTICLE 4. REPORTS........................................... 50
Section 4.1. Agreement of AFC-II to Provide Reports
and Instructions.......................... 50
Section 4.2. Administrator............................... 52
ARTICLE 5. ALLOCATION AND APPLICATION OF COLLECTIONS.......... 53
Section 5.1. Collection Account.......................... 53
Section 5.2. Collections and Allocations................. 55
Section 5.3. Determination of Monthly Interest........... 58
Section 5.4. Determination of Monthly Principal.......... 58
Section 5.5. Paired Series............................... 58
ARTICLE 6. DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS........... 59
Section 6.1. Distributions in General.................... 59
Section 6.2. Reserved.................................... 61
Section 6.3. Optional Repurchase of Notes................ 61
Section 6.4. Monthly Noteholders' Statement.............. 62
ARTICLE 7. REPRESENTATIONS AND WARRANTIES..................... 62
Section 7.1. Existence and Power......................... 62
Section 7.2. Limited Liability Company and
Governmental Authorization................ 63
Section 7.3. Binding Effect.............................. 63
Section 7.4. Financial Information; Financial
Condition................................. 64
Section 7.5. Litigation.................................. 64
Section 7.6. No ERISA Plan............................... 64
Section 7.7. Tax Filings and Expenses.................... 64
Section 7.8. Disclosure.................................. 65
Section 7.9. Investment Company Act; Securities Act...... 65
Section 7.10. Regulations G, T, U and X................... 65
Section 7.11. No Consent.................................. 66
Section 7.12. Solvency.................................... 66
Section 7.13. Ownership of Limited Liability Company
Interests; Subsidiary................... 66
Section 7.14. Security Interests.......................... 66
Section 7.15. Binding Effect of Loan Agreements........... 68
Section 7.16. Non-Existence of Other Agreements........... 68
Section 7.17. Manufacturer Programs....................... 68
Section 7.18. Other Representations....................... 68
ARTICLE 8. COVENANTS.......................................... 69
Section 8.1. Payment of Notes............................ 69
Section 8.2. Maintenance of Office or Agency............. 69
Section 8.3. Information................................. 70
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Section Page
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Section 8.4. Payment of Obligations...................... 71
Section 8.5. Maintenance of Property..................... 71
Section 8.6. Conduct of Business and Maintenance of
Existence................................. 71
Section 8.7. Compliance with Laws........................ 72
Section 8.8. Inspection of Property, Books and
Records................................... 72
Section 8.9. Compliance with Related Documents........... 72
Section 8.10. Notice of Defaults.......................... 73
Section 8.11. Notice of Material Proceedings.............. 73
Section 8.12. Further Requests............................ 73
Section 8.13. Further Assurances.......................... 74
Section 8.14. Manufacturer Programs....................... 75
Section 8.15. Liens....................................... 76
Section 8.16. Other Indebtedness.......................... 76
Section 8.17. Mergers..................................... 77
Section 8.18. Sales of Assets............................. 77
Section 8.19. Acquisition of Assets....................... 77
Section 8.20. Dividends, Officers' Compensation,
etc..................................... 77
Section 8.21. Name; Principal Office...................... 77
Section 8.22. Organizational Documents.................... 78
Section 8.23. Investments................................. 78
Section 8.24. No Other Agreements......................... 78
Section 8.25. Other Business.............................. 79
Section 8.26. Maintenance of Separate Existence........... 79
Section 8.27. Rule 144A Information Requirement........... 82
Section 8.28. Use of Proceeds of Notes.................... 82
Section 8.29. Vehicles.................................... 82
ARTICLE 9. AMORTIZATION EVENTS AND REMEDIES................... 83
Section 9.1. Amortization Events......................... 83
Section 9.2. Rights of the Trustee upon Amortization
Event or Certain Other Events of
Default................................... 86
Section 9.3. [RESERVED].................................. 91
Section 9.4. Other Remedies.............................. 91
Section 9.5. Waiver of Past Events....................... 92
Section 9.6. Control by Requisite Investors.............. 93
Section 9.7. Limitation on Suits......................... 93
Section 9.8. Unconditional Rights of Holders to
Receive Payment; Withholding Taxes........ 94
Section 9.9. Collection Suit by the Trustee.............. 96
Section 9.10. The Trustee May File Proofs of Claim........ 96
Section 9.11. Priorities.................................. 97
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Section Page
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Section 9.12. Undertaking for Costs....................... 97
Section 9.13. Rights and Remedies Cumulative.............. 97
Section 9.14. Delay or Omission Not Waiver................ 98
Section 9.15. Reassignment of Surplus..................... 98
ARTICLE 10. THE TRUSTEE............................................... 98
Section 10.1. Duties of the Trustee....................... 98
Section 10.2. Rights of the Trustee.......................100
Section 10.3. Individual Rights of the Trustee............102
Section 10.4. Notice of Amortization Events and
Potential Amortization Events...........102
Section 10.5. Compensation................................102
Section 10.6. Replacement of the Trustee..................103
Section 10.7. Successor Trustee by ▇▇▇▇▇▇, etc............105
Section 10.8. Eligibility Disqualification................105
Section 10.9. Appointment of Co-Trustee or Separate
Trustee.................................105
Section 10.10. Representations and Warranties of
Trustee.................................108
Section 10.11. AFC-II Indemnification of the
Trustee.................................108
ARTICLE 11. DISCHARGE OF INDENTURE....................................109
Section 11.1. Termination of AFC-II's Obligations.........109
Section 11.2. Application of Trust Money..................111
Section 11.3. Repayment to AFC-II.........................111
ARTICLE 12. AMENDMENTS................................................111
Section 12.1. Without Consent of the Noteholders..........111
Section 12.2. With Consent of the Noteholders.............113
Section 12.3. Supplements.................................115
Section 12.4. Revocation and Effect of Consents...........115
Section 12.5. Notation on or Exchange of Notes............116
Section 12.6. The Trustee to Sign Amendments, etc.........116
ARTICLE 13. MISCELLANEOUS.............................................116
Section 13.1. Notices.....................................116
Section 13.2. Communication by Noteholders With
Other Noteholders.......................119
Section 13.3. Certificate and Opinion as to
Conditions Precedent....................119
Section 13.4. Statements Required in Certificate..........119
Section 13.5. Rules by the Trustee........................120
Section 13.6. No Recourse Against Others..................120
Section 13.7. Duplicate Originals.........................120
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Section Page
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Section 13.8. Benefits of Indenture.......................120
Section 13.9. Payment on Business Day.....................120
Section 13.10. Governing Law...............................121
Section 13.11. No Adverse Interpretation of Other
Agreements..............................121
Section 13.12. Successors..................................121
Section 13.13. Severability................................121
Section 13.14. Counterpart Originals.......................121
Section 13.15. Table of Contents, Headings, etc............121
Section 13.16. Termination; Collateral.....................122
Section 13.17. No Bankruptcy Petition Against
AFC-II..................................122
Section 13.18. No Recourse.................................123
v
SCHEDULES AND EXHIBITS
SCHEDULE 1 DEFINITIONS LIST
EXHIBIT A-1 FORM OF TRANSFER CERTIFICATE
EXHIBIT A-2 [RESERVED]
EXHIBIT A-3 FORM OF TRANSFER CERTIFICATE FOR EXCHANGE
OR TRANSFER FROM RESTRICTED GLOBAL NOTE TO
TEMPORARY GLOBAL NOTE
EXHIBIT A-4 FORM OF TRANSFER CERTIFICATE FOR EXCHANGE
OR TRANSFER FROM RESTRICTED GLOBAL NOTE TO
PERMANENT GLOBAL NOTE
EXHIBIT A-5 FORM OF TRANSFER CERTIFICATE FOR TRANSFER
OR EXCHANGE FROM TEMPORARY GLOBAL NOTE TO
RESTRICTED GLOBAL NOTE
EXHIBIT B FORM OF CLEARING SYSTEM CERTIFICATE
EXHIBIT C FORM OF CERTIFICATE OF BENEFICIAL OWNER-
SHIP
EXHIBIT D FORM OF MONTHLY CERTIFICATE
EXHIBIT E FORM OF MONTHLY NOTEHOLDERS' STATEMENT
vi