EXHIBIT 10.12
AESOP FUNDING II L.L.C.,
as Issuer
AVIS RENT A CAR SYSTEM, INC.,
as Administrator
CENDANT CORPORATION,
as Purchaser
and
THE BANK OF NEW YORK,
as Trustee and Series 2003-1 Agent
----------
SERIES 2003-1 SUPPLEMENT
dated as of January 28, 2003
to
AMENDED AND RESTATED BASE INDENTURE
dated as of July 30, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS...............................................................................1
ARTICLE II PURCHASE AND SALE OF SERIES 2003-1 NOTES; INCREASES AND DECREASES OF SERIES 2003-1
INVESTED AMOUNT..........................................................................15
Section 2.1. Purchase of the Series 2003-1 Notes..................................................15
Section 2.2. Delivery.............................................................................16
Section 2.3. Procedure for Initial Issuance and for Increasing the Series 2003-1 Invested
Amount...............................................................................16
Section 2.4. Procedure for Decreasing the Series 2003-1 Invested Amount; Optional
Termination..........................................................................17
Section 2.5. Increases and Reductions of the Series 2003-1 Maximum Invested Amount;
Extensions of the Scheduled Expiry Date..............................................18
Section 2.6. Interest.............................................................................18
Section 2.7. Indemnification by AFC-II............................................................18
ARTICLE III SERIES 2003-1 ALLOCATIONS................................................................19
Section 3.1. Establishment of Series 2003-1 Collection Account, Series 2003-1 Excess
Collection Account and Series 2003-1 Accrued Interest Account........................19
Section 3.2. Allocations with Respect to the Series 2003-1 Notes..................................19
Section 3.3. Note Interest with respect to the Series 2003-1 Notes................................23
Section 3.4. Payment of Note Interest.............................................................25
Section 3.5. Payment of Note Principal............................................................25
Section 3.6. Administrator's Failure to Instruct the Trustee to Make a Deposit or Payment.........29
Section 3.7. Series 2003-1 Reserve Account........................................................29
Section 3.8. Series 2003-1 Letters of Credit and Series 2003-1 Cash Collateral Account............31
Section 3.9. Series 2003-1 Distribution Account...................................................36
Section 3.10. Series 2003-1 Demand Notes Constitute Additional Collateral for Series 2003-1
Notes................................................................................37
Section 3.11. Payments to Purchaser................................................................37
ARTICLE IV AMORTIZATION EVENTS......................................................................37
ARTICLE V CONDITIONS PRECEDENT.....................................................................39
Section 5.1. Conditions Precedent to Effectiveness of Supplement..................................39
ARTICLE VI REPRESENTATIONS AND WARRANTIES, COVENANTS................................................41
Section 6.1. Representations and Warranties of AFC-II and the Administrator.......................41
Section 6.2. Covenants of AFC-II and the Administrator............................................42
(i)
TABLE OF CONTENTS
(continued)
Page
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ARTICLE VII GENERAL..................................................................................42
Section 7.1. Successors and Assigns...............................................................42
Section 7.2. Securities Law.......................................................................42
Section 7.3. Adjustments; Set-off.................................................................43
Section 7.4. No Bankruptcy Petition...............................................................43
Section 7.5. Limited Recourse.....................................................................43
Section 7.6. Costs and Expenses...................................................................44
Section 7.7. Exhibits.............................................................................44
Section 7.8. Ratification of Base Indenture.......................................................44
Section 7.9. Counterparts.........................................................................44
Section 7.10. Governing Law........................................................................44
Section 7.11. Amendments...........................................................................44
Section 7.12. Discharge of Indenture...............................................................45
Section 7.13. Capitalization of AFC-II.............................................................45
Section 7.14. Series 2003-1 Demand Notes...........................................................45
Section 7.15. Termination of Supplement............................................................45
Section 7.16. No Waiver; Cumulative Remedies.......................................................45
Section 7.17. Waiver of Setoff.....................................................................45
Section 7.18. Notices..............................................................................45
(ii)
SERIES 2003-1 SUPPLEMENT, dated as of January 28, 2003 (this
"SUPPLEMENT"), among AESOP FUNDING II L.L.C., a special purpose limited
liability company established under the laws of Delaware ("AFC-II"), AVIS RENT A
CAR SYSTEM, INC., a Delaware corporation, as administrator (the
"ADMINISTRATOR"), CENDANT CORPORATION, as Purchaser (the "PURCHASER" or
"CENDANT"), THE BANK OF
NEW YORK, a
New York banking corporation, as successor
in interest to the corporate trust administration of Xxxxxx Trust and Savings
Bank, as trustee (together with its successors in trust thereunder as provided
in the Base Indenture referred to below, the "TRUSTEE") and THE BANK OF
NEW
YORK, a
New York banking corporation, as agent for the benefit of the Series
2003-1 Noteholders (the "SERIES 2003-1 AGENT"), to the Amended and Restated Base
Indenture, dated as of July 30, 1997, between AFC-II and the Trustee (as
amended, modified or supplemented from time to time, exclusive of Supplements
creating a new Series of Notes, the "BASE INDENTURE").
PRELIMINARY STATEMENT
WHEREAS, Sections 2.2 and 12.1 of the Base Indenture provide, among
other things, that AFC-II and the Trustee may at any time and from time to time
enter into a supplement to the Base Indenture for the purpose of authorizing the
issuance of one or more Series of Notes;
NOW, THEREFORE, the parties hereto agree as follows:
DESIGNATION
There is hereby created a Series of Notes to be issued pursuant to the
Base Indenture and this Supplement and such Series of Notes shall be designated
generally as Variable Funding Rental Car Asset Backed Notes, Series 2003-1.
The proceeds from the sale of the Series 2003-1 Notes shall be
deposited in the Collection Account and shall be paid to AFC-II and used to make
Loans under the Loan Agreements to the extent that the Borrowers have requested
Loans thereunder and Eligible Vehicles are available for acquisition or
refinancing thereunder on the date hereof. Any such portion of proceeds not so
used to make Loans shall be deemed to be Principal Collections.
The Series 2003-1 Notes are a non-Segregated Series of Notes (as more
fully described in the Base Indenture). Accordingly, all references in this
Supplement to "all" Series of Notes (and all references in this Supplement to
terms defined in the Base Indenture that contain references to "all" Series of
Notes) shall refer to all Series of Notes other than Segregated Series of Notes.
ARTICLE I
DEFINITIONS
(a) All capitalized terms not otherwise defined herein are defined
in the Definitions List attached to the Base Indenture as Schedule I thereto.
All Article, Section or Subsection references herein shall refer to Articles,
Sections or Subsections of this Supplement, except as otherwise provided herein.
Unless otherwise stated herein, as the context otherwise
requires or if such term is otherwise defined in the Base Indenture, each
capitalized term used or defined herein shall relate only to the Series 2003-1
Notes and not to any other Series of Notes issued by AFC-II.
(b) The following words and phrases shall have the following
meanings with respect to the Series 2003-1 Notes and the definitions of such
terms are applicable to the singular as well as the plural form of such terms
and to the masculine as well as the feminine and neuter genders of such terms:
"ADMINISTRATOR" is defined in the recitals hereto.
"AGH" means Avis Group Holdings, Inc., a Delaware corporation.
"BOARD" means the Board of Governors of the Federal Reserve System or
any successor thereto.
"BUSINESS DAY" means any day other than (a) a Saturday or a Sunday or
(b) a day on which banking institutions in Xxx Xxxx, Xxx Xxxx, Xxxxxxx, Xxxxxxxx
or the city in which the corporate trust office of the Trustee is located are
authorized or obligated by law or executive order to close.
"CERTIFICATE OF LEASE DEFICIT DEMAND" means a certificate in the form
of ANNEX A to the Series 2003-1 Letters of Credit.
"CERTIFICATE OF TERMINATION DATE DEMAND" means a certificate in the
form of ANNEX D to the Series 2003-1 Letters of Credit.
"CERTIFICATE OF TERMINATION DEMAND" means a certificate in the form of
ANNEX C to the Series 2003-1 Letters of Credit.
"CERTIFICATE OF UNPAID DEMAND NOTE DEMAND" means a certificate in the
form of ANNEX B to the Series 2003-1 Letters of Credit.
"CHANGE IN CONTROL" means (a) Cendant shall at any time cease to own
or control, directly or indirectly, greater than 50% of the Voting Stock of AGH
or ARAC, any Lessee, the Sublessee or the Administrator or (b) either AFC-II or
AESOP Leasing is no longer indirectly wholly-owned by AGH.
"CLAIM" is defined in Section 2.7.
"COMPANY INDEMNIFIED PERSON" is defined in Section 2.7.
"DECREASE" is defined in Section 2.4(a).
"DEMAND NOTE ISSUER" means each issuer of a Series 2003-1 Demand Note.
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"DISBURSEMENT" means any Lease Deficit Disbursement, any Unpaid Demand
Note Disbursement, any Termination Date Disbursement or any Termination
Disbursement under a Series 2003-1 Letter of Credit, or any combination thereof,
as the context may require.
"EFFECTIVE DATE" is defined in Section 5.1.
"EXCESS COLLECTIONS" is defined in Section 3.3(e)(i).
"EXCLUDED TAXES" means, with respect to the Purchaser or any other
recipient of any payment to be made by or on account of any obligation of AFC-II
hereunder, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America or by any other Governmental Authority,
in each case, as a result of a present or former connection between the United
States of America or the jurisdiction of such Governmental Authority imposing
such tax, as the case may be, and the Purchaser or any other such recipient
(except a connection arising solely from the Purchaser's or such recipient's
having executed, delivered or performed its obligations hereunder, receiving a
payment hereunder or enforcing the Series 2003-1 Notes) and (b) any branch
profits tax imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which AFC-II is located (except any such branch
profits or similar tax imposed as a result of a connection with the United
States of America or other jurisdiction as a result of a connection arising
solely from the Purchaser's or such recipient's having executed, delivered or
performed its obligations hereunder, receiving a payment hereunder or enforcing
the Series 2003-1 Notes).
"EXPIRY DATE" means the earlier of (a) the Scheduled Expiry Date with
respect to the Purchaser and (b) the date on which an Amortization Event with
respect to the Series 2003-1 Notes shall have been declared or automatically
occurred.
"INCREASE" is defined in Section 2.3(a).
"INCREASE AMOUNT" is defined in Section 2.3(a).
"INCREASE DATE" is defined in Section 2.3(a).
"LEASE DEFICIT DISBURSEMENT" means an amount drawn under a Series
2003-1 Letter of Credit pursuant to a Certificate of Lease Deficit Demand.
"LIBOR" means, with respect to each Series 2003-1 Interest Period, a
rate per annum to be determined by the Trustee as follows:
(i) On each LIBOR Determination Date, the Trustee will determine the
London interbank offered rate for U.S. dollar deposits for one month that
appears on Telerate Page 3750 as it relates to U.S. dollars as of 11:00
a.m., London time, on such LIBOR Determination Date:
(ii) If, on any LIBOR Determination Date, such rate does not appear
on Telerate Page 3750, the Trustee will request that the principal London
offices of each of four major banks in the London interbank market selected
by the Trustee provide the Trustee with offered quotations for deposits in
U.S. dollars for a period of one month,
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commencing on the first day of such Series 2003-1 Interest Period, to prime
banks in the London interbank market at approximately 11:00 a.m., London
time, on such LIBOR Determination Date and in a principal amount equal to
an amount of not less than $250,000 that is representative of a single
transaction in such market at such time. If at least two such quotations
are provided, "LIBOR" for such Series 2003-1 Interest Period will be the
arithmetic mean of such quotations; or
(iii) If fewer than two such quotations are provided, "LIBOR" for such
Series 2003-1 Interest Period will be the arithmetic mean of rates quoted
by three major banks in the City of
New York selected by the Trustee at
approximately 11:00 a.m.,
New York City time, on such LIBOR Determination
Date for loans in U.S. dollars to leading European banks, for a period of
one month, commencing on the first day of such Series 2003-1 Interest
Period, and in a principal amount equal to an amount of not less than
$250,000 that is representative of a single transaction in such market at
such time; PROVIDED, HOWEVER, that if the banks selected as aforesaid by
such Trustee are not quoting rates as mentioned in this sentence, "LIBOR"
for such Series 2003-1 Interest Period will be the same as "LIBOR" for the
immediately preceding Series 2003-1 Interest Period.
"LOC PRO RATA SHARE" means, with respect to any Series 2003-1 Letter
of Credit Provider as of any date, the fraction (expressed as a percentage)
obtained by dividing (A) the available amount under such Series 2003-1 Letter of
Credit Provider's Series 2003-1 Letter of Credit as of such date by (B) an
amount equal to the aggregate available amount under all Series 2003-1 Letters
of Credit as of such date; PROVIDED that only for purposes of calculating the
LOC Pro Rata Share with respect to any Series 2003-1 Letter of Credit Provider
as of any date, if such Series 2003-1 Letter of Credit Provider has not complied
with its obligation to pay the Trustee the amount of any draw under its Series
2003-1 Letter of Credit made prior to such date, the available amount under such
Series 2003-1 Letter of Credit Provider's Series 2003-1 Letter of Credit as of
such date shall be treated as reduced (for calculation purposes only) by the
amount of such unpaid demand and shall not be reinstated for purposes of such
calculation unless and until the date as of which such Series 2003-1 Letter of
Credit Provider has paid such amount to the Trustee and been reimbursed by the
Lessee or the applicable Demand Note Issuer, as the case may be, for such amount
(PROVIDED that the foregoing calculation shall not in any manner reduce the
undersigned's actual liability in respect of any failure to pay any demand under
its Series 2003-1 Letter of Credit).
"LIBOR DETERMINATION DATE" means, with respect to any Series 2003-1
Interest Period, the second London Banking Day preceding the first day of such
Series 2003-1 Interest Period.
"LONDON BANKING DAY" means any business day on which dealings in
deposits in United States dollars are transacted in the London interbank market.
"MONTHLY TOTAL PRINCIPAL ALLOCATION" means for any Related Month the
sum of all Series 2003-1 Principal Allocations with respect to such Related
Month.
"MOODY'S" means Xxxxx'x Investors Service.
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"OPTIONAL TERMINATION DATE" is defined in Section 2.4(b).
"OPTIONAL TERMINATION NOTICE" is defined in Section 2.4(b).
"OUTSTANDING" means, with respect to the Series 2003-1 Notes, the
Series 2003-1 Invested Amount shall not have been reduced to zero and all
accrued interest and other amounts owing on the Series 2003-1 Notes and to the
Purchaser hereunder shall not have been paid in full.
"PAST DUE RENT PAYMENT" is defined in Section 3.2(f).
"PREFERENCE AMOUNT" means any amount previously distributed to the
Purchaser on or relating to a Series 2003-1 Note that is recoverable or that has
been recovered as a voidable preference by the trustee in a bankruptcy
proceeding of a Demand Note Issuer pursuant to the United State Bankruptcy Code
(11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
"PRE-PREFERENCE PERIOD DEMAND NOTE PAYMENTS" means, as of any date of
determination, the aggregate amount of all proceeds of demands made on the
Series 2003-1 Demand Notes included in the Series 2003-1 Demand Note Payment
Amount as of the Series 2003-1 Letter of Credit Termination Date that were paid
by the Demand Note Issuers more than one year before such date of determination;
PROVIDED, HOWEVER, that if an Event of Bankruptcy (or the occurrence of an event
described in clause (a) of the definition thereof, without the lapse of a period
of 60 consecutive days) with respect to a Demand Note Issuer occurs during such
one-year period, (x) the Pre-Preference Period Demand Note Payments as of any
date during the period from and including the date of the occurrence of such
Event of Bankruptcy to and including the conclusion or dismissal of the
proceedings giving rise to such Event of Bankruptcy without continuing
jurisdiction by the court in such proceedings shall equal the Pre-Preference
Period Demand Note Payments as of the date of such occurrence and (y) the
Pre-Preference Period Demand Note Payments as of any date after the conclusion
or dismissal of such proceedings shall equal the Series 2003-1 Demand Note
Payment Amount as of the date of the conclusion or dismissal of such
proceedings.
"PRINCIPAL DEFICIT AMOUNT" means, on any date of determination, the
excess, if any, of (i) the Series 2003-1 Invested Amount on such date (after
giving effect to the distribution of the Monthly Total Principal Allocation for
the Related Month if such date is a Distribution Date) over (ii) the Series
2003-1 AESOP I Operating Lease Loan Agreement Borrowing Base on such date.
"PURCHASER" is defined in the recitals hereto.
"RECORD DATE" means, with respect to each Distribution Date, the
immediately preceding Business Day.
"SCHEDULED EXPIRY DATE" shall mean the later of (a) January 28, 2006
and (b) the last day of any extension thereof made in accordance with Section
2.5(b).
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"SERIES 1998-1 NOTES" means the Series of Notes designated as the
Series 1998-1 Notes.
"SERIES 2000-1 NOTES" means the Series of Notes designated as the
Series 2000-1 Notes.
"SERIES 2000-2 NOTES" means the Series of Notes designated as the
Series 2000-2 Notes.
"SERIES 2000-3 NOTES" means the Series of Notes designated as the
Series 2000-3 Notes.
"SERIES 2000-4 NOTES" means the Series of Notes designated as the
Series 2000-4 Notes.
"SERIES 2001-1 NOTES" means the Series of Notes designated as the
Series 2001-1 Notes.
"SERIES 2001-2 NOTES" means the Series of Notes designated as the
Series 2001-2 Notes.
"SERIES 2002-1 NOTES" means the Series of Notes designated as the
Series 2002-1 Notes.
"SERIES 2002-2 NOTES" means the Series of Notes designated as the
Series 2002-2 Notes.
"SERIES 2002-3 NOTES" means the Series of Notes designated as the
Series 2002-3 Notes.
"SERIES 2002-4 NOTES" means the Series of Notes designated as the
Series 2002-4 Notes.
"SERIES 2003-1 ACCRUED INTEREST ACCOUNT" is defined in Section 3.1(b).
"SERIES 2003-1 AESOP I OPERATING LEASE LOAN AGREEMENT BORROWING BASE"
means, as of any date of determination, the product of (a) the Series 2003-1
AESOP I Operating Lease Vehicle Percentage as of such date and (b) the AESOP I
Operating Lease Loan Agreement Borrowing Base as of such date.
"SERIES 2003-1 AESOP I OPERATING LEASE VEHICLE PERCENTAGE" means, as
of any date of determination, a fraction, expressed as a percentage (which
percentage shall never exceed 100%), the numerator of which is the Series 2003-1
Required AESOP I Operating Lease Vehicle Amount as of such date and the
denominator of which is the sum of the Required AESOP I Operating Lease Vehicle
Amounts for all Series of Notes as of such date.
"SERIES 2003-1 AGENT" is defined in the recitals hereto.
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"SERIES 2003-1 AMORTIZATION PERIOD" means the period beginning at the
earliest to occur of (a) the close of business on the Business Day immediately
preceding the date on which the Expiry Date shall have occurred, (b) the close
of business on the Optional Termination Date and (c) the close of business on
the Business Day immediately preceding the day on which an Amortization Event is
deemed to have occurred or been declared with respect to the Series 2003-1 Notes
and ending upon the earlier to occur of (i) the date on which the Series 2003-1
Notes are fully paid and (ii) the termination of the Indenture.
"SERIES 2003-1 AVAILABLE CASH COLLATERAL ACCOUNT AMOUNT" means, as of
any date of determination, the amount on deposit in the Series 2003-1 Cash
Collateral Account (after giving effect to any deposits thereto and withdrawals
and releases therefrom on such date).
"SERIES-2003-1 AVAILABLE RESERVE ACCOUNT AMOUNT" means, as of any date
of determination, the amount on deposit in the Series 2003-1 Reserve Account
(after giving effect to any deposits thereto and withdrawals and releases
therefrom on such date).
"SERIES 2003-1 CASH COLLATERAL ACCOUNT" is defined in Section 3.8(e).
"SERIES 2003-1 CASH COLLATERAL ACCOUNT COLLATERAL" is defined in
Section 3.8(a).
"SERIES 2003-1 CASH COLLATERAL ACCOUNT SURPLUS" means, with respect to
any Distribution Date, the lesser of (a) the Series 2003-1 Available Cash
Collateral Account Amount and (b) the lesser of (A) the excess, if any, of the
Series 2003-1 Liquidity Amount (after giving effect to any withdrawal from the
Series 2003-1 Reserve Account on such Distribution Date) over the Series 2003-1
Required Liquidity Amount on such Distribution Date and (B) the excess, if any,
of the Series 2003-1 Enhancement Amount (after giving effect to any withdrawal
from the Series 2003-1 Reserve Account on such Distribution Date) over the
Series 2003-1 Required Enhancement Amount on such Distribution Date; PROVIDED,
HOWEVER, that, on any date after the Series 2003-1 Letter of Credit Termination
Date, the Series 2003-1 Cash Collateral Account Surplus shall mean the excess,
if any, of (x) the Series 2003-1 Available Cash Collateral Account Amount over
(y) the Series 2003-1 Demand Note Payment Amount MINUS the Pre-Preference Period
Demand Note Payments as of such date.
"SERIES 2003-1 CASH COLLATERAL PERCENTAGE" means, as of any date of
determination, the percentage equivalent of a fraction, the numerator of which
is the Series 2003-1 Available Cash Collateral Amount as of such date and the
denominator of which is the Series 2003-1 Letter of Credit Liquidity Amount as
of such date.
"SERIES 2003-1 CLOSING DATE" is defined in Section 2.1(a).
"SERIES 2003-1 COLLATERAL" means the Collateral, each Series 2003-1
Letter of Credit, each Series 2003-1 Demand Note, the Series 2003-1 Distribution
Account Collateral, the Series 2003-1 Cash Collateral Account Collateral and the
Series 2003-1 Reserve Account Collateral.
"SERIES 2003-1 COLLECTION ACCOUNT" is defined in Section 3.1(b).
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"SERIES 2003-1 DEMAND NOTE" means each demand note made by a Demand
Note Issuer, substantially in the form of EXHIBIT C to this Supplement, as
amended, modified or restated from time to time.
"SERIES 2003-1 DEMAND NOTE PAYMENT AMOUNT" means, as of the Series
2003-1 Letter of Credit Termination Date, the aggregate amount of all proceeds
of demands made on the Series 2003-1 Demand Notes pursuant to Section
3.5(c)(iii) or 3.5(d)(ii) that were deposited into the Series 2003-1
Distribution Account and paid to the Series 2003-1 Noteholders during the
one-year period ending on the Series 2003-1 Letter of Credit Termination Date;
PROVIDED, HOWEVER, that if an Event of Bankruptcy (or the occurrence of an event
described in clause (a) of the definition thereof, without the lapse of a period
of 60 consecutive days) with respect to a Demand Note Issuer shall have occurred
during such one-year period, the Series 2003-1 Demand Note Payment Amount as of
the Series 2003-1 Letter of Credit Termination Date shall equal the Series
2003-1 Demand Note Payment Amount as if it were calculated as of the date of
such occurrence.
"SERIES 2003-1 DEPOSIT DATE" is defined in Section 3.2.
"SERIES 2003-1 DISTRIBUTION ACCOUNT" is defined in Section 3.9(a).
"SERIES 2003-1 DISTRIBUTION ACCOUNT COLLATERAL" is defined in Section
3.9(d).
"SERIES 2003-1 ELIGIBLE LETTER OF CREDIT PROVIDER" means a person
satisfactory to ARAC and the Demand Note Issuers and having, at the time of the
issuance of the related Series 2003-1 Letter of Credit, a long-term senior
unsecured debt rating of at least "A" from S&P and a short-term senior unsecured
debt rating of at least "A-1" from S&P and a long-term senior unsecured debt
rating of at xxxxx "X0" from Moody's and a short-term senior unsecured debt
rating of "P-1" from Moody's that is a commercial bank having total assets in
excess of $500,000,000.
"SERIES 0000-0 XXXXXXXXXXX" means the Series 2003-1 Cash Collateral
Account Collateral, the Series 2003-1 Letters of Credit, the Series 2003-1
Demand Notes, the Series 2003-1 Overcollateralization Amount and the Series
2003-1 Reserve Account Amount.
"SERIES 2003-1 ENHANCEMENT AMOUNT" means, as of any date of
determination, the sum of (i) the Series 2003-1 Overcollateralization Amount as
of such date, (ii) the Series 2003-1 Letter of Credit Amount as of such date,
(iii) the Series 2003-1 Available Reserve Account Amount as of such date and
(iv) the amount of cash and Permitted Investments on deposit in the Series
2003-1 Collection Account (not including amounts allocable to the Series 2003-1
Accrued Interest Account) and the Series 2003-1 Excess Collection Account as of
such date.
"SERIES 2003-1 ENHANCEMENT DEFICIENCY" means, on any date of
determination, the amount by which the Series 2003-1 Enhancement Amount is less
than the Series 2003-1 Required Enhancement Amount as of such date.
"SERIES 2003-1 EXCESS COLLECTION ACCOUNT" is defined in Section
3.1(b).
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"SERIES 2003-1 EXPECTED FINAL DISTRIBUTION DATE" means the
Distribution Date falling in the seventh calendar month after the calendar month
in which the Series 2003-1 Revolving Period ends.
"SERIES 2003-1 INITIAL INVESTED AMOUNT" is defined in Section 2.3(a).
"SERIES 2003-1 INTEREST PERIOD" means a period commencing on and
including a Distribution Date and ending on and including the day preceding the
next succeeding Distribution Date; PROVIDED, HOWEVER, that the initial Series
2003-1 Interest Period shall commence on and include the Series 2003-1 Closing
Date and end on and include February 20, 2003.
"SERIES 2003-1 INVESTED AMOUNT" means, on any date of determination,
(a) when used with respect to the Series 2003-1 Closing Date, the Series 2003-1
Initial Invested Amount and (b) when used with respect to any other date, an
amount equal to (i) the Series 2003-1 Invested Amount on the immediately
preceding Business Day PLUS (ii) the Increase Amount on such date MINUS (iii)
the amount of principal payments made to the Purchaser pursuant to Section
3.5(e) on such date PLUS (iv) the amount of principal payments recovered from
the Purchaser by a trustee as a preference payment in a bankruptcy proceeding of
a Demand Note Issuer or otherwise.
"SERIES 2003-1 INVESTED PERCENTAGE" means as of any date of
determination:
(a) when used with respect to Principal Collections, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction the
numerator of which shall be equal to the sum of the Series 2003-1 Invested
Amount and the Series 2003-1 Overcollateralization Amount, determined
during the Series 2003-1 Revolving Period as of the end of the immediately
preceding Business Day, or, during the Series 2003-1 Amortization Period,
as of the end of the Series 2003-1 Revolving Period, and the denominator of
which shall be the greater as of the end of the immediately preceding
Business Day of (I) the Aggregate Asset Amount and (II) the sum of the
numerators used to determine (i) invested percentages for allocations with
respect to Principal Collections (for all Series of Notes and all classes
of such Series of Notes) and (ii) overcollateralization percentages for
allocations with respect to Principal Collections (for all Series of Notes
that provide for credit enhancement in the form of overcollateralization);
and
(b) when used with respect to Interest Collections, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction the
numerator of which shall be the Accrued Amounts with respect to the Series
2003-1 Notes on such date of determination, and the denominator of which
shall be the aggregate Accrued Amounts with respect to all Series of Notes
on such date of determination.
"SERIES 2003-1 LEASE INTEREST PAYMENT DEFICIT" means on any
Distribution Date an amount equal to the excess, if any, of (a) the aggregate
amount of Interest Collections which pursuant to Section 3.2(a), (b) or (c)
would have been allocated to the Series 2003-1 Accrued Interest Account if all
payments of Monthly Base Rent required to have been made under the Leases from
and excluding the preceding Distribution Date to and including such Distribution
Date were made in full over (b) the aggregate amount of Interest Collections
which pursuant to
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Section 3.2(a), (b) or (c) have been allocated to the Series 2003-1 Accrued
Interest Account (excluding any amounts paid into the Series 2003-1 Accrued
Interest Account pursuant to the proviso in Sections 3.2(b)(ii) and 3.2(c)(ii))
from and excluding the preceding Distribution Date to and including such
Distribution Date.
"SERIES 2003-1 LEASE PAYMENT DEFICIT" means either a Series 2003-1
Lease Interest Payment Deficit or a Series 2003-1 Lease Principal Payment
Deficit.
"SERIES 2003-1 LEASE PRINCIPAL PAYMENT CARRYOVER DEFICIT" means (a)
for the initial Distribution Date, zero and (b) for any other Distribution Date,
the excess of (x) the Series 2003-1 Lease Principal Payment Deficit, if any, on
the preceding Distribution Date OVER (y) the amount deposited in the
Distribution Account on such preceding Distribution Date pursuant to Section
3.5(c) of this Supplement on account of such Series 2003-1 Lease Principal
Payment Deficit.
"SERIES 2003-1 LEASE PRINCIPAL PAYMENT DEFICIT" means on any
Distribution Date the sum of (a) the Series 2003-1 Monthly Lease Principal
Payment Deficit for such Distribution Date and (b) the Series 2003-1 Lease
Principal Payment Carryover Deficit for such Distribution Date.
"SERIES 2003-1 LETTER OF CREDIT" means an irrevocable letter of
credit, if any, substantially in the form of EXHIBIT D to this Supplement issued
by a Series 2003-1 Eligible Letter of Credit Provider in favor of the Trustee
for the benefit of the Series 2003-1 Noteholders.
"SERIES 2003-1 LETTER OF CREDIT AMOUNT" means, as of any date of
determination, the aggregate outstanding principal amount of the Series 2003-1
Demand Notes on such date.
"SERIES 2003-1 LETTER OF CREDIT EXPIRATION DATE" means, with respect
to any Series 2003-1 Letter of Credit, the expiration date set forth in such
Series 2003-1 Letter of Credit, as such date may be extended in accordance with
the terms of such Series 2003-1 Letter of Credit.
"SERIES 2003-1 LETTER OF CREDIT LIQUIDITY AMOUNT" means, as of any
date of determination, the sum of (a) the aggregate amount available to be drawn
on such date under each Series 2003-1 Letter of Credit, as specified therein,
and (b) if the Series 2003-1 Cash Collateral Account has been established and
funded pursuant to Section 3.8 of this Supplement, the Series 2003-1 Available
Cash Collateral Account Amount on such date.
"SERIES 2003-1 LETTER OF CREDIT PROVIDER" means the issuer of a Series
2003-1 Letter of Credit.
"SERIES 2003-1 LETTER OF CREDIT TERMINATION DATE" means the first to
occur of (a) the date on which the Series 2003-1 Notes are fully paid and (b)
the Series 2003-1 Termination Date.
"SERIES 2003-1 LIMITED LIQUIDATION EVENT OF DEFAULT" means, so long as
such event or condition continues, any event or condition of the type specified
in clauses (a) through (h) of Article IV; PROVIDED, HOWEVER, that any event or
condition of the type specified in clauses
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(a) through (h) of Article IV shall not constitute a Series 2003-1 Limited
Liquidation Event of Default if (i) within such thirty (30) day period, such
Amortization Event shall have been cured or (ii) the Trustee shall have received
the written consent of each of the Series 2003-1 Noteholders waiving the
occurrence of such Series 2003-1 Limited Liquidation Event of Default.
"SERIES 2003-1 LIQUIDITY AMOUNT" means, as of any date of
determination, the sum of (a) the Series 2003-1 Letter of Credit Liquidity
Amount on such date and (b) the Series 2003-1 Available Reserve Account Amount
on such date.
"SERIES 2003-1 MAXIMUM AGGREGATE KIA/ISUZU/SUBARU/HYUNDAI/SUZUKI
AMOUNT" means, as of any day, with respect to Kia, Isuzu, Subaru, Hyundai and
Suzuki, in the aggregate, an amount equal to 15% of the aggregate Net Book Value
of all Vehicles leased under the Leases on such day.
"SERIES 2003-1 MAXIMUM AMOUNT" means any of the Series 2003-1 Maximum
Manufacturer Amounts, the Series 2003-1 Maximum Non-Eligible Manufacturer
Amount, the Series 2003-1 Maximum Non-Program Vehicle Amount or the Series
2003-1 Maximum Specified States Amount.
"SERIES 2003-1 MAXIMUM INDIVIDUAL KIA/ISUZU/SUBARU/HYUNDAI/SUZUKI
AMOUNT" means, as of any day, with respect to Kia, Isuzu, Subaru, Hyundai or
Suzuki, individually, an amount equal to 5% of the aggregate Net Book Value of
all Vehicles leased under the Leases on such day.
"SERIES 2003-1 MAXIMUM INVESTED AMOUNT" means, on any date of
determination, $500,000,000, as such amount may be increased or reduced from
time to time as provided in Section 2.5.
"SERIES 2003-1 MAXIMUM MANUFACTURER AMOUNT" means, as of any day, any
of the Series 2003-1 Maximum Mitsubishi Amount, the Series 2003-1 Maximum Nissan
Amount, the Series 2003-1 Maximum Individual Kia/Isuzu/Subaru/Hyundai/Suzuki
Amount or the Series 2003-1 Maximum Aggregate Kia/Isuzu/Subaru/Hyundai/Suzuki
Amount.
"SERIES 2003-1 MAXIMUM MITSUBISHI AMOUNT" means, as of any day, an
amount equal to 5% of the aggregate Net Book Value of all Vehicles leased under
the Leases on such day.
"SERIES 2003-1 MAXIMUM NISSAN AMOUNT" means, as of any day, an amount
equal to 5% of the aggregate Net Book Value of all Vehicles leased under the
Leases on such day.
"SERIES 2003-1 MAXIMUM NON-ELIGIBLE MANUFACTURER AMOUNT" means, as of
any day, an amount equal to 3% of the aggregate Net Book Value of all Vehicles
leased under the Leases on such day.
"SERIES 2003-1 MAXIMUM NON-PROGRAM VEHICLE AMOUNT" means, as of any
day, an amount equal to 25% of the aggregate Net Book Value of all Vehicles
leased under the Leases on such day.
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"SERIES 2003-1 MAXIMUM SPECIFIED STATES AMOUNT" means, as of any day,
an amount equal to 7.5% of the aggregate Net Book Value of all Vehicles leased
under the Leases on such day.
"SERIES 2003-1 MONTHLY INTEREST" means, with respect to any Series
2003-1 Interest Period, an amount equal to the sum for each day in such Series
2003-1 Interest Period of (1) the product of (a) the Series 2003-1 Invested
Amount on such day and (b) the Series 2003-1 Note Rate for such Series 2003-1
Interest Period, divided by (2) 360.
"SERIES 2003-1 MONTHLY LEASE PRINCIPAL PAYMENT DEFICIT" means on any
Distribution Date an amount equal to the excess, if any, of (a) the aggregate
amount of Principal Collections which pursuant to Section 3.2(a), (b) or (c)
would have been allocated to the Series 2003-1 Collection Account if all
payments required to have been made under the Leases from and excluding the
preceding Distribution Date to and including such Distribution Date were made in
full over (b) the aggregate amount of Principal Collections which pursuant to
Section 3.2(a), (b) or (c) have been allocated to the Series 2003-1 Collection
Account (without giving effect to any amounts paid into the Series 2003-1
Accrued Interest Account pursuant to the proviso in Sections 3.2(b)(ii) and/or
3.2(c)(ii)) from and excluding the preceding Distribution Date to and including
such Distribution Date.
"SERIES 2003-1 NON-PROGRAM VEHICLE PERCENTAGE" means, as of any date
of determination, a fraction, expressed as a percentage, the numerator of which
is the aggregate Net Book Value of all Non-Program Vehicles leased under the
AESOP I Operating Lease on such date and the denominator of which is the
aggregate Net Book Value of all Vehicles leased under the AESOP I Operating
Lease.
"SERIES 2003-1 NOTE" means any one of the Series 2003-1 Variable
Funding Rental Car Asset Backed Notes, executed by AFC-II authenticated and
delivered by or on behalf of the Trustee, substantially in the form of EXHIBIT
A.
"SERIES 2003-1 NOTE RATE" means, for (i) the initial Series 2003-1
Interest Period, 2.84875% per annum and (ii) any other Series 2003-1 Interest
Period, the sum of LIBOR for such Series 2003-1 Interest Period PLUS 1.50%.
"SERIES 2003-1 NOTEHOLDER" means a Person in whose name a Series
2003-1 Note is registered in the Note Register.
"SERIES 2003-1 OVERCOLLATERALIZATION AMOUNT" means (i) as of any date
on which no AESOP I Operating Lease Vehicle Deficiency exists, the Series 2003-1
Required Overcollateralization Amount as of such date and (ii) as of any date on
which an AESOP I Operating Lease Vehicle Deficiency exists, the excess, if any,
of (x) the Series 2003-1 AESOP I Operating Lease Loan Agreement Borrowing Base
as of such date over (y) the Series 2003-1 Invested Amount as of such date.
"SERIES 2003-1 PAST DUE RENT PAYMENT" is defined in Section 3.2(f).
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"SERIES 2003-1 PERCENTAGE" means, as of any date of determination, a
fraction, expressed as a percentage, the numerator of which is the Series 2003-1
Invested Amount as of such date and the denominator of which is the Aggregate
Invested Amount as of such date.
"SERIES 2003-1 PRINCIPAL ALLOCATION" is defined in Section 3.2(a)(ii).
"SERIES 2003-1 PROGRAM VEHICLE PERCENTAGE" means, as of any date of
determination, 100% minus the Series 2003-1 Non-Program Vehicle Percentage.
"SERIES 2003-1 REIMBURSEMENT AGREEMENT" means any and each agreement
providing for the reimbursement of a Series 2003-1 Letter of Credit Provider for
draws under its Series 2003-1 Letter of Credit as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"SERIES 2003-1 REQUIRED AESOP I OPERATING LEASE VEHICLE AMOUNT" means,
as of any date of determination, the sum of the Series 2003-1 Required
Overcollateralization Amount and the Series 2003-1 Invested Amount as of such
date.
"SERIES 2003-1 REQUIRED ENHANCEMENT AMOUNT" means, as of any date of
determination, the sum of (i) the product of the Series 2003-1 Required
Enhancement Percentage as of such date and the Series 2003-1 Invested Amount as
of such date, (ii) the Series 2003-1 Percentage of the excess, if any, of the
Non-Program Vehicle Amount as of such date over the Series 2003-1 Maximum
Non-Program Vehicle Amount as of such date, (iii) the Series 2003-1 Percentage
of the excess, if any, of the aggregate Net Book Value of all Vehicles
manufactured by Mitsubishi and leased under the Leases as of such date over the
Series 2003-1 Maximum Mitsubishi Amount as of such date, (iv) the Series 2003-1
Percentage of the excess, if any, of the aggregate Net Book Value of all
Vehicles manufactured by Kia, Isuzu, Subaru, Hyundai or Suzuki, individually,
and leased under the Leases as of such date over the Series 2003-1 Maximum
Individual Kia/Isuzu/Subaru/ Hyundai/Suzuki Amount as of such date, (v) the
Series 2003-1 Percentage of the excess, if any, of the aggregate Net Book Value
of all Vehicles manufactured by Kia, Isuzu, Subaru, Hyundai or Suzuki, in the
aggregate, and leased under the Leases as of such date over the Series 2003-1
Maximum Aggregate Kia/Isuzu/Subaru/Hyundai/Suzuki Amount as of such date, (vi)
the Series 2003-1 Percentage of the excess, if any, of the Specified States
Amount as of such date over the Series 2003-1 Maximum Specified States Amount as
of such date and (vii) the Series 2003-1 Percentage of the excess, if any, of
the Non-Eligible Manufacturer Amount as of such date over the Series 2003-1
Maximum Non-Eligible Manufacturer Amount as of such date.
"SERIES 2003-1 REQUIRED ENHANCEMENT PERCENTAGE" means, as of any date
of determination, the sum of (i) the product of (A) 15.0% times (B) the Series
2003-1 Program Vehicle Percentage as of the immediately preceding Business Day
and (ii) the product of (A) the Series 2003-1 Required Non-Program Enhancement
Percentage as of such date times (B) the Series 2003-1 Non-Program Vehicle
Percentage as of the immediately preceding Business Day.
"SERIES 2003-1 REQUIRED LIQUIDITY AMOUNT" means, with respect to any
Distribution Date, an amount equal to 0.50% of the Series 2003-1 Invested Amount
on such
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Distribution Date (after giving effect to any payments of principal to be made
on the Series 2003-1 Notes on such Distribution Date).
"SERIES 2003-1 REQUIRED NON-PROGRAM ENHANCEMENT PERCENTAGE" means, as
of any date of determination, the greater of (a) 19.5% and (b) the sum of (i)
19.5% and (ii) the highest, for any calendar month within the preceding twelve
calendar months, of the greater of (x) an amount (not less than zero) equal to
100% minus the Measurement Month Average for the immediately preceding
Measurement Month and (y) an amount (not less than zero) equal to 100% minus the
Market Value Average as of the Determination Date within such calendar month
(excluding the Market Value Average for any Determination Date which has not yet
occurred).
"SERIES 2003-1 REQUIRED OVERCOLLATERALIZATION AMOUNT" means, as of any
date of determination, the excess, if any, of the Series 2003-1 Required
Enhancement Amount over the sum of (i) the Series 2003-1 Letter of Credit Amount
as of such date, (ii) the Series 2003-1 Available Reserve Account Amount on such
date and (iii) the amount of cash and Permitted Investments on deposit in the
Series 2003-1 Collection Account (not including amounts allocable to the Series
2003-1 Accrued Interest Account) and the Series 2003-1 Excess Collection Account
on such date.
"SERIES 2003-1 REQUIRED RESERVE ACCOUNT AMOUNT" means, with respect to
any Distribution Date, an amount equal to the sum of (A) the excess, if any, of
the Series 2003-1 Required Liquidity Amount on such Distribution Date over the
Series 2003-1 Letter of Credit Liquidity Amount on such Distribution Date (after
giving effect to any payments of principal to be made on the Series 2003-1 Notes
on such Distribution Date) and (B) the excess, if any, of the Series 2003-1
Required Enhancement Amount over the Series 2003-1 Enhancement Amount (excluding
therefrom the Series 2003-1 Available Reserve Account Amount and calculated
after giving effect to any payments of principal to be made on the Series 2003-1
Notes) on such Distribution Date
"SERIES 2003-1 RESERVE ACCOUNT" is defined in Section 3.7(a).
"SERIES 2003-1 RESERVE ACCOUNT COLLATERAL" is defined in Section
3.7(d).
"SERIES 2003-1 RESERVE ACCOUNT SURPLUS" means, with respect to any
Distribution Date, the excess, if any, of the Series 2003-1 Available Reserve
Account Amount over the Series 2003-1 Required Reserve Account Amount on such
Distribution Date.
"SERIES 2003-1 REVOLVING PERIOD" means the period from and including,
the Series 2003-1 Closing Date to the commencement of the Series 2003-1
Amortization Period.
"SERIES 2003-1 SHORTFALL" is defined in Section 3.3(f).
"SERIES 2003-1 TERMINATION DATE" means the Distribution Date falling
in the nineteenth calendar month after the calendar month in which the Series
2003-1 Revolving Period ends.
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"SERIES 2003-1 UNPAID DEMAND AMOUNT" means, with respect to any single
draw pursuant to Section 3.5(c) or (d) on the Series 2003-1 Letters of Credit,
the aggregate amount drawn by the Trustee on all Series 2003-1 Letters of
Credit.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc.
"SUPPLEMENT" is defined in the recitals hereto.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERMINATION DATE DISBURSEMENT" means an amount drawn under a Series
2003-1 Letter of Credit pursuant to a Certificate of Termination Date Demand.
"TERMINATION DISBURSEMENT" means an amount drawn under a Series 2003-1
Letter of Credit pursuant to a Certificate of Termination Demand.
"TRUSTEE" is defined in the recitals hereto.
"UNPAID DEMAND NOTE DISBURSEMENT" means an amount drawn under a Series
2003-1 Letter of Credit pursuant to a Certificate of Unpaid Demand Note Demand.
"VOTING STOCK" of any Person means the common stock or membership
interests of such Person and any other security of, or ownership interest in,
such Person having ordinary voting power to elect a majority of the board of
directors or a majority of the managers (or other Persons serving similar
functions) of such Person.
ARTICLE II
PURCHASE AND SALE OF SERIES 2003-1 NOTES;
INCREASES AND DECREASES OF SERIES 2003-1 INVESTED AMOUNT
Section 2.1. PURCHASE OF THE SERIES 2003-1 NOTES. (a) INITIAL
PURCHASE. Subject to the terms and conditions of this Supplement, including
delivery of notice in accordance with Section 2.3, (i) the Purchaser may, in its
sole discretion, purchase a Series 2003-1 Note in an amount equal to all or a
portion of the Series 2003-1 Initial Invested Amount on any Business Day during
the period from the Effective Date (the "SERIES 2003-1 CLOSING DATE") to and
including the Expiry Date and the Purchaser may maintain its Series 2003-1 Note,
subject to increase or decrease during the period from the Series 2003-1 Closing
Date to and including the Expiry Date in accordance with the provisions of this
Supplement. Payments by the Purchaser shall be made in immediately available
funds on the Series 2003-1 Closing Date to the Trustee for deposit into the
Series 2003-1 Collection Account.
(b) SERIES 2003-1 MAXIMUM INVESTED AMOUNT. Notwithstanding anything
to the contrary contained in this Supplement, at no time shall the Series 2003-1
Invested Amount exceed the Series 2003-1 Maximum Invested Amount at such time.
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(c) FORM OF SERIES 2003-1 NOTES. The Series 2003-1 Notes shall be
issued in fully registered form without interest coupons, substantially in the
form set forth in EXHIBIT A hereto.
Section 2.2. DELIVERY. (a) On the Series 2003-1 Closing Date, AFC-II
shall sign and shall direct the Trustee in writing pursuant to Section 2.2 of
the Base Indenture to duly authenticate, and the Trustee, upon receiving such
direction, shall so authenticate a Series 2003-1 Note in the name of the
Purchaser in an amount equal to the Series 2003-1 Maximum Invested Amount and
deliver such Series 2003-1 Note to the Purchaser in accordance with such written
directions.
(b) The Purchaser shall maintain a record of the Series 2003-1
Invested Amount outstanding on any date of determination, which, absent manifest
error, shall constitute PRIMA FACIE evidence of the outstanding Series 2003-1
Invested Amount from time to time.
Section 2.3. PROCEDURE FOR INITIAL ISSUANCE AND FOR INCREASING THE
SERIES 2003-1 INVESTED AMOUNT. (a) Subject to Section 2.3(c), (i) on the Series
2003-1 Closing Date, the Purchaser may agree to purchase and (ii) on any
Business Day during the period from the Effective Date to and including the
Expiry Date the Purchaser may agree, in its sole discretion, that the Series
2003-1 Invested Amount may be increased by an amount equal to the Increase
Amount (an "INCREASE"), upon the request of AFC-II (each date on which an
increase in the Series 2003-1 Invested Amount occurs hereunder being herein
referred to as the "INCREASE DATE" applicable to such Increase); PROVIDED,
HOWEVER, that AFC-II shall have given the Purchaser (with a copy to the Trustee)
irrevocable written notice (effective upon receipt), by telecopy (receipt
confirmed), substantially in the form of EXHIBIT B hereto, of such request no
later than 3:00 p.m. (
New York City time) on the Business Day prior to the
Series 2003-1 Closing Date or such Increase Date, as the case may be. Such
notice shall state (x) the Series 2003-1 Closing Date or the Increase Date, as
the case may be, and (y) the initial invested amount (the "SERIES 2003-1 INITIAL
INVESTED AMOUNT") or the proposed amount of the increase in the Series 2003-1
Invested Amount (an "INCREASE AMOUNT"), as the case may be.
(b) The Purchaser shall in no event be required to make the initial
purchase of a Series 2003-1 Note on the Series 2003-1 Closing Date or to
increase the Series 2003-1 Invested Amount on any Increase Date hereunder
unless:
(i) such Increase Amount is equal to (A) $1,000,000 or an integral
multiple of $100,000 in excess thereof or (B) if less, the excess of the
Series 2003-1 Maximum Invested Amount over the Series 2003-1 Invested
Amount;
(ii) after giving effect to the Series 2003-1 Initial Invested Amount
or such Increase Amount, the Series 2003-1 Invested Amount would not exceed
the Series 2003-1 Maximum Invested Amount;
(iii) after giving effect to the Series 2003-1 Initial Invested Amount
or such Increase Amount, no AESOP I Operating Lease Vehicle Deficiency
would occur and be continuing;
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(iv) no Amortization Event with respect to the Series 2003-1 Notes or
Potential Amortization Event with respect to the Series 2003-1 Notes would
occur and be continuing prior to or after giving effect to such Series
2003-1 Initial Invested Amount or such Increase;
(v) all of the representations and warranties made by each of
AFC-II, the Lessees, the Lessors and the Administrator in the Base
Indenture, this Supplement and the Related Documents to which each is a
party are true and correct in all material respects on and as of the Series
2003-1 Closing Date or such Increase Date, as the case may be, as if made
on and as of such date (except to the extent such representations and
warranties are expressly made as of another date); and
(vi) all conditions precedent to the making of any Loan under the
applicable Loan Agreements would be satisfied.
AFC-II's acceptance of funds in connection with (x) the initial purchase of
Series 2003-1 Notes on the Series 2003-1 Closing Date and (y) each Increase
occurring on any Increase Date shall constitute a representation and warranty by
AFC-II to the Purchaser as of the Series 2003-1 Closing Date or such Increase
Date (except to the extent such representations and warranties are expressly
made as of another date), as the case may be, that all of the conditions
contained in this Section 2.3(b) have been satisfied.
(c) The Purchaser shall pay in immediately available funds such
Increase on the related Increase Date to the Trustee for deposit into the Series
2003-1 Collection Account.
Section 2.4. PROCEDURE FOR DECREASING THE SERIES 2003-1 INVESTED
AMOUNT; OPTIONAL TERMINATION. (a) On any Business Day prior to the occurrence of
an Amortization Event with respect to the Series 2003-1 Notes, upon the written
request of AFC-II or the Administrator on behalf of AFC-II, the Series 2003-1
Invested Amount may be reduced (a "DECREASE") by the Trustee's withdrawing from
the Series 2003-1 Excess Collection Account, depositing into the Series 2003-1
Distribution Account and distributing to the Purchaser funds on deposit in the
Series 2003-1 Excess Collection Account on such day in accordance with Section
3.5(b) in an amount not to exceed the amount of such funds on deposit on such
day; PROVIDED that AFC-II shall have given the Purchaser (with a copy to the
Trustee) irrevocable written notice (effective upon receipt) of the amount of
such Decrease prior to 9:30 a.m. (
New York City time) on the Business Day prior
to such Decrease; PROVIDED, FURTHER, that any such Decrease shall be in an
amount equal to $1,000,000 and integral multiples of $100,000 in excess thereof.
Upon each Decrease, the Purchaser shall indicate in its records such Decrease
and the Series 2003-1 Invested Amount outstanding after giving effect to such
Decrease.
(b) On any Business Day, AFC-II shall have the right to deliver an
irrevocable written notice (an "OPTIONAL TERMINATION NOTICE") to the Trustee and
the Purchaser in which AFC-II declares that the commitment of the Purchaser to
consider making an Increase shall terminate on the date (the "OPTIONAL
TERMINATION DATE") set forth in such notice (which date, in any event, shall be
a Distribution Date not less than three Business Days from the date on which
such notice is delivered).
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(c) From and after the Optional Termination Date, the Series 2003-1
Amortization Period shall commence for all purposes under this Supplement, the
Base Indenture and the Related Documents.
Section 2.5. INCREASES AND REDUCTIONS OF THE SERIES 2003-1 MAXIMUM
INVESTED AMOUNT; EXTENSIONS OF THE SCHEDULED EXPIRY DATE. (a) AFC-II may from
time to time request that the Purchaser agree to increase the Series 2003-1
Maximum Invested Amount. An increase in such amount shall be effective hereunder
if the Purchaser shall have agreed in its sole discretion in writing to such
increase.
(b) If AFC-II desires to extend the Scheduled Expiry Date, AFC-II
shall notify the Purchaser at least 5 days prior to such Scheduled Expiry Date
of its desire to extend the Scheduled Expiry Date. The Purchaser shall notify
the Administrator, the Trustee and AFC-II in writing of whether the Purchaser
agrees to an extension of the Scheduled Expiry Date; PROVIDED that failure by
the Purchaser to respond to such request shall not be construed as a consent by
the Purchaser to such extension. The decision to extend or not extend shall be
made by the Purchaser in its sole discretion. In the event that the Purchaser
desires to extend its Scheduled Expiry Date for an amount that is less than the
Series 2003-1 Maximum Invested Amount prior to AFC-II's request for an
extension, AFC-II, in its sole discretion, may accept such extension.
(c) On any Business Day during the Series 2003-1 Revolving Period,
AFC-II may, upon two (2) Business Days' prior written notice to the Purchaser
(effective upon receipt) (with copies to the Trustee) reduce the Series 2003-1
Maximum Invested Amount in an amount equal to $10,000,000 or a whole multiple of
$1,000,000 in excess thereof; PROVIDED that no such termination or reduction
shall be permitted if, after giving effect thereto and to any reduction in the
Series 2003-1 Invested Amount on such date, the Series 2003-1 Invested Amount
would exceed the Series 2003-1 Maximum Invested Amount. Once reduced, the Series
2003-1 Maximum Invested Amount may not be subsequently reinstated without the
Purchaser's prior written consent, which consent shall be granted or not in the
sole discretion of the Purchaser.
Section 2.6. INTEREST. Interest shall be payable on the Series 2003-1
Notes on each Distribution Date pursuant to Section 3.3. Calculations of per
annum rates under this Supplement shall be made on the basis of a 360 day year.
Section 2.7. INDEMNIFICATION BY AFC-II. AFC-II agrees to indemnify and
hold harmless the Trustee, the Administrator, the Purchaser, and each of their
respective officers, directors, agents and employees (each, a "COMPANY
INDEMNIFIED PERSON") from and against any loss, liability, expense, damage or
injury suffered or sustained by (a "CLAIM") such Company indemnified person by
reason of (i) any acts, omissions or alleged acts or omissions arising out of,
or relating to, activities of AFC-II pursuant to the Indenture or the other
Related Documents to which it is a party, (ii) a breach of any representation or
warranty made or deemed made by AFC-II (or any of its officers) in the Indenture
or other Related Document or (iii) a failure by AFC-II to comply with any
applicable law or regulation or to perform its covenants, agreements, duties or
obligations required to be performed or observed by it in accordance with the
provisions of the Indenture or the other Related Documents, including, but not
limited to, any judgment, award, settlement, reasonable attorneys' fees and
other reasonable costs or expenses
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incurred in connection with the defense of any actual or threatened action,
proceeding or claim, except to the extent such loss, liability, expense, damage
or injury resulted from the gross negligence, bad faith or willful misconduct of
such Company indemnified person or its officers, directors, agents, principals,
employees or employers or includes any Excluded Taxes; PROVIDED that any
payments made by AFC-II pursuant to this Section 2.7 shall be made solely from
funds available pursuant to Section 3.3(e), shall be non-recourse other than
with respect to such funds, and shall not constitute a claim against AFC-II to
the extent that such funds are insufficient to make such payment.
ARTICLE III
SERIES 2003-1 ALLOCATIONS
With respect to the Series 2003-1 Notes, the following shall apply:
Section 3.1. ESTABLISHMENT OF SERIES 2003-1 COLLECTION ACCOUNT,
SERIES 2003-1 EXCESS COLLECTION ACCOUNT AND SERIES 2003-1 ACCRUED INTEREST
ACCOUNT. (a) All Collections allocable to the Series 2003-1 Notes shall be
allocated to the Collection Account.
(b) The Trustee will create three administrative subaccounts within
the Collection Account for the benefit of the Series 2003-1 Noteholders: the
Series 2003-1 Collection Account (such sub-account, the "SERIES 2003-1
COLLECTION ACCOUNT"), the Series 2003-1 Excess Collection Account (such
sub-account, the "SERIES 2003-1 EXCESS COLLECTION ACCOUNT") and the Series
2003-1 Accrued Interest Account (such sub-account, the "SERIES 2003-1 ACCRUED
INTEREST ACCOUNT").
Section 3.2. ALLOCATIONS WITH RESPECT TO THE SERIES 2003-1 NOTES. The
net proceeds from the initial sale of the Series 2003-1 Notes and any Increase
will be deposited into the Collection Account. On each Business Day on which
Collections are deposited into the Collection Account (each such date, a "SERIES
2003-1 DEPOSIT DATE"), the Administrator will direct the Trustee in writing
pursuant to the Administration Agreement to allocate all amounts deposited into
the Collection Account in accordance with the provisions of this Section 3.2:
(a) ALLOCATIONS OF COLLECTIONS DURING THE SERIES 2003-1 REVOLVING
PERIOD. During the Series 2003-1 Revolving Period, the Administrator will direct
the Trustee in writing pursuant to the Administration Agreement to allocate on
each day, prior to 11:00 a.m. (
New York City time) on each Series 2003-1 Deposit
Date, all amounts deposited into the Collection Account as set forth below:
(i) allocate to the Series 2003-1 Collection Account an
amount equal to the Series 2003-1 Invested Percentage (as of such day)
of the aggregate amount of Interest Collections on such day. All such
amounts allocated to the Series 2003-1 Collection Account shall be
further allocated to the Series 2003-1 Accrued Interest Account; and
(ii) allocate to the Series 2003-1 Excess Collection Account
the sum of (A) the Series 2003-1 Invested Percentage (as of such day)
of the aggregate amount of Principal Collections on such day (for any
such day, the "SERIES 2003-1
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PRINCIPAL ALLOCATION") and (B) the proceeds from the initial issuance
of the Series 2003-1 Notes and from any Increase;
(b) ALLOCATIONS OF COLLECTIONS DURING THE SERIES 2003-1 AMORTIZATION
PERIOD. With respect to the Series 2003-1 Amortization Period, other than after
the occurrence of an Event of Bankruptcy with respect to ARAC, any other Lessee
or AGH, the Administrator will direct the Trustee in writing pursuant to the
Administration Agreement to allocate, prior to 11:00 a.m. (New York City time)
on any Series 2003-1 Deposit Date, all amounts deposited into the Collection
Account as set forth below:
(i) allocate to the Series 2003-1 Collection Account an
amount determined as set forth in Section 3.2(a)(i) above for such
day, which amount shall be further allocated to the Series 2003-1
Accrued Interest Account; and
(ii) allocate to the Series 2003-1 Collection Account an
amount equal to the Series 2003-1 Principal Allocation for such day,
which amount shall be used to make principal payments in respect of
the Series 2003-1 Notes, ratably, without preference or priority of
any kind, until the Series 2003-1 Invested Amount is paid in full;
PROVIDED that if on any Determination Date (A) the Administrator
determines that the amount anticipated to be available from Interest
Collections allocable to the Series 2003-1 Notes and other amounts
available pursuant to Section 3.3 to pay Series 2003-1 Monthly
Interest on the next succeeding Distribution Date will be less than
the Series 2003-1 Monthly Interest for the Series 2003-1 Interest
Period ending on the day preceding such Distribution Date and (B) the
Series 2003-1 Enhancement Amount is greater than zero, then the
Administrator shall direct the Trustee in writing to reallocate a
portion of the Principal Collections allocated to the Series 2003-1
Notes during the Related Month equal to the lesser of such
insufficiency and the Series 2003-1 Enhancement Amount to the Series
2003-1 Accrued Interest Account to be treated as Interest Collections
on such Distribution Date.
(c) ALLOCATIONS OF COLLECTIONS AFTER THE OCCURRENCE OF AN EVENT OF
BANKRUPTCY. After the occurrence of an Event of Bankruptcy with respect to ARAC,
any other Lessee or AGH, the Administrator will direct the Trustee in writing
pursuant to the Administration Agreement to allocate, prior to 11:00 a.m. (New
York City time) on any Series 2003-1 Deposit Date, all amounts deposited into
the Collection Account as set forth below:
(i) allocate to the Series 2003-1 Collection Account an
amount equal to the Series 2003-1 AESOP I Operating Lease Vehicle
Percentage as of the date of the occurrence of such Event of
Bankruptcy of the aggregate amount of Interest Collections made under
the AESOP I Operating Lease Loan Agreement. All such amounts allocated
to the Series 2003-1 Collection Account shall be further allocated to
the Series 2003-1 Accrued Interest Account; and
(ii) allocate to the Series 2003-1 Collection Account an
amount equal to the Series 2003-1 AESOP I Operating Lease Vehicle
Percentage as of the date of the occurrence of such Event of
Bankruptcy of the aggregate amount of
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Principal Collections made under the AESOP I Operating Lease Loan
Agreement, which amount shall be used to make principal payments in
respect of the Series 2003-1 Notes until the Series 2003-1 Notes have
been paid in full; PROVIDED that if on any Determination Date (A) the
Administrator determines that the amount anticipated to be available
from Interest Collections allocable to the Series 2003-1 Notes and
other amounts available pursuant to Section 3.3 to pay Series 2003-1
Monthly Interest on the next succeeding Distribution Date will be less
than the Series 2003-1 Monthly Interest for the Series 2003-1 Interest
Period ending on the day preceding such Distribution Date and (B) the
Series 2003-1 Enhancement Amount is greater than zero, then the
Administrator shall direct the Trustee in writing to reallocate a
portion of the Principal Collections allocated to the Series 2003-1
Notes during the Related Month equal to the lesser of such
insufficiency and the Series 2003-1 Enhancement Amount to the Series
2003-1 Accrued Interest Account to be treated as Interest Collections
on such Distribution Date.
(d) ALLOCATIONS FROM OTHER SERIES. Amounts allocated to other Series
of Notes that have been reallocated by AFC-II to the Series 2003-1 Notes (i)
during the Series 2003-1 Revolving Period shall be allocated to the Series
2003-1 Excess Collection Account and applied in accordance with Section 3.2(e)
and (ii) during the Series 2003-1 Amortization Period shall be allocated to the
Series 2003-1 Collection Account and applied in accordance with Section 3.2(b)
to make principal payments in respect of the Series 2003-1 Notes.
(e) SERIES 2003-1 EXCESS COLLECTION ACCOUNT. Amounts allocated to
the Series 2003-1 Excess Collection Account on any Series 2003-1 Deposit Date
will be (i) first, deposited in the Series 2003-1 Reserve Account in an amount
up to the excess, if any, of the Series 2003-1 Required Reserve Account Amount
for such date, after giving effect to any Increase or Decrease on such date,
over the Series 2003-1 Available Reserve Account Amount for such date, (ii)
second, to the extent directed by AFC-II used to pay the principal amount of
other Series of Notes that are then required to be paid, (iii) third, to the
extent directed in writing by the Administrator, used to make a voluntary
Decrease in the Series 2003-1 Invested Amount, (iv) fourth, to the extent
directed in writing by the Administrator used to make a voluntary decrease in
the Invested Amount of any other Series of Notes that may be reduced in
accordance with the Indenture, (v) fifth, released to AESOP Leasing in an amount
equal to the product of (A) the Loan Agreement's Share with respect to the AESOP
I Operating Lease Loan Agreement as of such date times (B) 100% minus the Loan
Payment Allocation Percentage with respect to the AESOP I Operating Lease Loan
Agreement as of such date times (C) the amount of any remaining funds and (vi)
sixth, paid to AFC-II, which may be used to make Loans under the Loan Agreements
to the extent the Borrowers have requested Loans thereunder and Eligible
Vehicles are available for financing thereunder or as otherwise permitted under
the Related Documents; PROVIDED, in the case of clauses (iv), (v) and (vi), that
no AESOP I Operating Lease Vehicle Deficiency would result therefrom or exist
immediately thereafter. Upon the occurrence of an Amortization Event, funds on
deposit in the Series 2003-1 Excess Collection Account will be withdrawn by the
Trustee, deposited in the Series 2003-1 Collection Account and allocated as
Principal Collections to reduce the Series 2003-1 Invested Amount on the
immediately succeeding Distribution Date.
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(f) PAST DUE RENTAL PAYMENTS. Notwithstanding Section 3.2(a), if
after the occurrence of a Series 2003-1 Lease Payment Deficit, the Lessees shall
make payments of Monthly Base Rent or other amounts payable by the Lessees under
the Leases on or prior to the fifth Business Day after the occurrence of such
Series 2003-1 Lease Payment Deficit (a "PAST DUE RENT PAYMENT"), the
Administrator shall direct the Trustee in writing pursuant to the Administration
Agreement to allocate to the Series 2003-1 Collection Account an amount equal to
the Series 2003-1 Invested Percentage as of the date of the occurrence of such
Series 2003-1 Lease Payment Deficit of the Collections attributable to such Past
Due Rent Payment (the "SERIES 2003-1 PAST DUE RENT PAYMENT"). The Administrator
shall instruct the Trustee in writing pursuant to the Administration Agreement
to withdraw from the Series 2003-1 Collection Account and apply the Series
2003-1 Past Due Rent Payment in the following order:
(i) if the occurrence of such Series 2003-1 Lease Payment
Deficit resulted in a withdrawal being made from the Series 2003-1
Reserve Account pursuant to Section 3.3(d), deposit in the Series
2003-1 Reserve Account an amount equal to the lesser of (x) the Series
2003-1 Past Due Rent Payment and (y) the excess, if any, of the Series
2003-1 Required Reserve Account Amount over the Series 2003-1
Available Reserve Account Amount on such day;
(ii) if the occurrence of the related Series 2003-1 Lease
Payment Deficit resulted in one or more Lease Deficit Disbursements
being made under the Series 2003-1 Letters of Credit, pay to each
Series 2003-1 Letter of Credit Provider who made such a Lease Deficit
Disbursement for application in accordance with the provisions of the
applicable Series 2003-1 Reimbursement Agreement an amount equal to
the lesser of (x) the unreimbursed amount of such Series 2003-1 Letter
of Credit Provider's Lease Deficit Disbursement and (y) such Series
2003-1 Letter of Credit Provider's pro rata share, calculated on the
basis of the unreimbursed amount of each Series 2003-1 Letter of
Credit Provider's Lease Deficit Disbursement, of the amount of the
Series 2003-1 Past Due Rent Payment remaining after payment pursuant
to clause (i) above;
(iii) if the occurrence of such Series 2003-1 Lease Payment
Deficit resulted in a withdrawal being made from the Series 2003-1
Cash Collateral Account, deposit in the Series 2003-1 Cash Collateral
Account an amount equal to the lesser of (x) the amount of the Series
2003-1 Past Due Rent Payment remaining after any payment pursuant to
clauses (i) and (ii) above and (y) the amount withdrawn from the
Series 2003-1 Cash Collateral Account on account of such Series 2003-1
Lease Payment Deficit;
(iv) allocate to the Series 2003-1 Accrued Interest Account
the amount, if any, by which the Series 2003-1 Lease Interest Payment
Deficit, if any, relating to such Series 2003-1 Lease Payment Deficit
exceeds the amount of the Series 2003-1 Past Due Rent Payment applied
pursuant to clauses (i), (ii) and (iii) above; and
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(v) treat the remaining amount of the Series 2003-1 Past Due
Rent Payment as Principal Collections allocated to the Series 2003-1
Notes in accordance with Section 3.2(a)(ii) or 3.2(b)(ii), as the case
may be.
Section 3.3. NOTE INTEREST WITH RESPECT TO THE SERIES 2003-1 NOTES.
(a) Prior to the Determination Date for any Series 2003-1 Interest Period, the
Purchaser shall provide to the Administrator its calculation of the Series
2003-1 Monthly Interest, which shall include a reasonable estimate of interest
accruing for the remainder of the Series 2003-1 Interest Period. On each
Determination Date, the Administrator shall instruct the Trustee and the Paying
Agent in writing pursuant to the Administration Agreement as to the amount to be
withdrawn and paid pursuant to Section 3.4 from the Series 2003-1 Accrued
Interest Account to the extent funds are anticipated to be available from
Interest Collections allocable to the Series 2003-1 Notes processed from, but
not including, the preceding Distribution Date through the succeeding
Distribution Date in respect of (x) first, an amount equal to the Series 2003-1
Monthly Interest for the Series 2003-1 Interest Period ending on the day
preceding the related Distribution Date and (y) second, an amount equal to the
amount of any unpaid Series 2003-1 Shortfall as of the preceding Distribution
Date (together with any accrued interest on such Series 2003-1 Shortfall). On
the following Distribution Date, the Trustee shall withdraw the amounts
described in the first sentence of this Section 3.3(a) from the Series 2003-1
Accrued Interest Account and deposit such amounts in the Series 2003-1
Distribution Account. If the actual amount of Series 2003-1 Monthly Interest for
any Series 2003-1 Interest Period is less than or greater than the amount
calculated pursuant to the first sentence of this paragraph, the Purchaser shall
notify the Administrator prior to the next Determination Date and the
Administrator will reduce or increase the Series 2003-1 Monthly Interest for the
next Series 2003-1 Interest Period accordingly.
(b) WITHDRAWALS FROM SERIES 2003-1 RESERVE ACCOUNT. If the
Administrator determines on any Distribution Date that the amounts available
from the Series 2003-1 Accrued Interest Account are insufficient to pay the sum
of the amounts described in clauses (x) and (y) of Section 3.3(a) above on such
Distribution Date, the Administrator shall instruct the Trustee in writing to
withdraw from the Series 2003-1 Reserve Account and deposit in the Series 2003-1
Distribution Account on such Distribution Date an amount equal to the lesser of
the Series 2003-1 Available Reserve Account Amount and such insufficiency. The
Trustee shall withdraw such amount from the Series 2003-1 Reserve Account and
deposit such amount in the Series 2003-1 Distribution Account.
(c) LEASE PAYMENT DEFICIT NOTICE. On or before 10:00 a.m. (New York
City time) on each Distribution Date, the Administrator shall notify the Trustee
of the amount of any Series 2003-1 Lease Payment Deficit, such notification to
be in the form of EXHIBIT E to this Supplement (each a "LEASE PAYMENT DEFICIT
Notice").
(d) DRAWS ON SERIES 2003-1 LETTERS OF CREDIT FOR SERIES 2003-1 LEASE
INTEREST PAYMENT DEFICITS. If the Administrator determines on any Distribution
Date that there exists a Series 2003-1 Lease Interest Payment Deficit, the
Administrator shall instruct the Trustee in writing to draw on the Series 2003-1
Letters of Credit, if any, and, the Trustee shall, by 12:00 noon (New York City
time) on such Distribution Date draw an amount (identified by the Administrator)
equal to the least of (i) such Series 2003-1 Lease Interest Payment Deficit,
(ii) the excess, if any, of the sum of the amounts described in clauses (x) and
(y) of Section 3.3(a) above
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on such Distribution Date over the amounts available from the Series 2003-1
Accrued Interest Account on such Distribution Date plus the amount withdrawn
from the Series 2003-1 Reserve Account pursuant to Section 3.3(b) and (iii) the
Series 2003-1 Letter of Credit Liquidity Amount on the Series 2003-1 Letters of
Credit by presenting to each Series 2003-1 Letter of Credit Provider a draft
accompanied by a Certificate of Lease Deficit Demand and shall cause the Lease
Deficit Disbursements to be deposited in the Series 2003-1 Distribution Account
on such Distribution Date for distribution in accordance with Section 3.4;
PROVIDED, HOWEVER, that if the Series 2003-1 Cash Collateral Account has been
established and funded, the Trustee shall withdraw from the Series 2003-1 Cash
Collateral Account and deposit in the Series 2003-1 Distribution Account an
amount equal to the lesser of (x) the Series 2003-1 Cash Collateral Percentage
on such Distribution Date of the least of the amounts described in clauses (i),
(ii) and (iii) above and (y) the Series 2003-1 Available Cash Collateral Account
Amount on such Distribution Date and draw an amount equal to the remainder of
such amount on the Series 2003-1 Letters of Credit.
(e) BALANCE. On or prior to the second Business Day preceding each
Distribution Date, the Administrator shall instruct the Trustee and the Paying
Agent in writing pursuant to the Administration Agreement to pay the balance
(after making the payments required in Section 3.3(a)), if any, of the amounts
available from the Series 2003-1 Accrued Interest Account as follows:
(i) on each Distribution Date during the Series 2003-1
Revolving Period, (1) first, to the Administrator, an amount equal to
the Series 2003-1 Percentage as of the beginning of such Series 2003-1
Interest Period of the portion of the Monthly Administration Fee
payable by AFC-II (as specified in clause (iii) of the definition
thereof) for such Series 2003-1 Interest Period, (2) second, to the
Trustee, an amount equal to the Series 2003-1 Percentage as of the
beginning of such Series 2003-1 Interest Period of the Trustee's fees
for such Series 2003-1 Interest Period, (3) third, to pay any Carrying
Charges (other than Carrying Charges provided for above) to the
Persons to whom such amounts are owed, an amount equal to the Series
2003-1 Percentage as of the beginning of such Series 2003-1 Interest
Period of such Carrying Charges (other than Carrying Charges provided
for above) for such Series 2003-1 Interest Period and (4) fourth, the
balance, if any ("EXCESS COLLECTIONS"), shall be withdrawn by the
Paying Agent from the Series 2003-1 Collection Account and deposited
in the Series 2003-1 Excess Collection Account; and
(ii) on each Distribution Date during the Series 2003-1
Amortization Period, (1) first, to the Trustee, an amount equal to the
Series 2003-1 Percentage as of the beginning of such Series 2003-1
Interest Period of the Trustee's fees for such Series 2003-1 Interest
Period, (2) second, to the Administrator, an amount equal to the
Series 2003-1 Percentage as of the beginning of such Series 2003-1
Interest Period of the portion of the Monthly Administration Fee (as
specified in clause (iii) of the definition thereof) payable by AFC-II
for such Series 2003-1 Interest Period, (3) third, to pay any Carrying
Charges (other than Carrying Charges provided for above) to the
Persons to whom such amounts are owed, an amount equal to the Series
2003-1 Percentage as of the beginning of such Series
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2003-1 Interest Period of such Carrying Charges (other than Carrying
Charges provided for above) for such Series 2003-1 Interest Period and
(4) fourth, the balance, if any, shall be treated as Principal
Collections.
(f) SHORTFALLS. If the amounts described in Section 3.3 are
insufficient to pay the Series 2003-1 Monthly Interest of the Purchaser on any
Distribution Date, payments of interest to the Purchaser will be reduced by the
amount of such deficiency. The aggregate amount, if any, of such deficiency on
any Distribution Date shall be referred to as the "SERIES 2003-1 SHORTFALL."
Interest shall accrue on the Series 2003-1 Shortfall at the Series 2003-1 Note
Rate plus 2% per annum.
Section 3.4. PAYMENT OF NOTE INTEREST. On each Distribution Date,
subject to Section 9.8 of the Base Indenture, the Paying Agent shall, in
accordance with Section 6.1 of the Base Indenture, pay to the Purchaser from the
Series 2003-1 Distribution Account the amounts deposited in the Series 2003-1
Distribution Account pursuant to Section 3.3 PLUS the amount of any unpaid
Series 2003-1 Shortfalls relating to unpaid Series 2003-1 Monthly Interest
payable to the Purchaser as of the preceding Distribution Date, together with
any interest thereon at the Series 2003-1 Note Rate plus 2% per annum.
Section 3.5. PAYMENT OF NOTE PRINCIPAL. (a) MONTHLY PAYMENTS DURING
SERIES 2003-1 AMORTIZATION PERIOD. Commencing on the first Determination Date
after the commencement of the Series 2003-1 Amortization Period, the
Administrator shall instruct the Trustee and the Paying Agent in writing
pursuant to the Administration Agreement and in accordance with this Section 3.5
as to (i) the amount allocated to the Series 2003-1 Notes during the Related
Month pursuant to Section 3.2(b)(ii) or (c)(ii), as the case may be, (ii) any
amounts to be withdrawn from the Series 2003-1 Reserve Account and deposited
into the Series 2003-1 Distribution Account or (iii) any amounts to be drawn on
the Series 2003-1 Demand Notes and/or on the Series 2003-1 Letters of Credit (or
withdrawn from the Series 2003-1 Cash Collateral Account). On the Distribution
Date following each such Determination Date, the Trustee shall withdraw the
amount allocated to the Series 2003-1 Notes during the Related Month pursuant to
Section 3.2(b)(ii) or (c)(ii), as the case may be, from the Series 2003-1
Collection Account and deposit such amount in the Series 2003-1 Distribution
Account, to be paid to the holders of the Series 2003-1 Notes.
(b) DECREASES. On any Business Day during the Series 2003-1
Revolving Period on which a Decrease is to be made pursuant to Section 2.4, the
Trustee shall withdraw from the Series 2003-1 Excess Collection Account in
accordance with the written instructions of the Administrator an amount equal to
the lesser of (i) the funds then allocated to the Series 2003-1 Excess
Collection Account and (ii) the amount of such Decrease, and deposit such amount
in the Series 2003-1 Distribution Account, to be paid to the Purchaser.
(c) PRINCIPAL DEFICIT AMOUNT. On each Distribution Date on which the
Principal Deficit Amount is greater than zero, amounts shall be transferred to
the Series 2003-1 Distribution Account as follows:
(i) RESERVE ACCOUNT WITHDRAWAL. The Administrator shall
instruct the Trustee in writing prior to 12:00 noon (New York City
time) on such Distribution
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Date, in the case of a Principal Deficit Amount resulting from a
Series 2003-1 Lease Payment Deficit, or prior to 12:00 noon (New York
City time) on the second Business Day prior to such Distribution Date,
in the case of any other Principal Deficit Amount, to withdraw from
the Series 2003-1 Reserve Account, an amount equal to the lesser of
(x) the Series 2003-1 Available Reserve Account Amount and (y) such
Principal Deficit Amount and deposit it in the Series 2003-1
Distribution Account on such Distribution Date.
(ii) PRINCIPAL DRAWS ON SERIES 2003-1 LETTERS OF CREDIT. If
the Administrator determines on any Distribution Date during the
Series 2003-1 Amortization Period that there exists a Series 2003-1
Lease Principal Payment Deficit, the Administrator shall instruct the
Trustee in writing to draw on the Series 2003-1 Letters of Credit, if
any, as provided below. Upon receipt of a notice by the Trustee from
the Administrator in respect of a Series 2003-1 Lease Principal
Payment Deficit on or prior to 11:00 a.m. (New York City time) on a
Distribution Date, the Trustee shall, by 12:00 noon (New York City
time) on such Distribution Date draw an amount as set forth in such
notice equal to the least of (i) such Series 2003-1 Lease Principal
Payment Deficit, (ii) the amount by which the Principal Deficit Amount
on such Distribution Date exceeds the amount to be deposited in the
Series 2003-1 Distribution Account in accordance with clause (i) of
this Section 3.5(c) and (iii) the Series 2003-1 Letter of Credit
Amount, on the Series 2003-1 Letters of Credit by presenting to each
Series 2003-1 Letter of Credit Provider a draft accompanied by a
Certificate of Lease Deficit Demand and shall cause the Lease Deficit
Disbursements to be deposited in the Series 2003-1 Distribution
Account on such Distribution Date; PROVIDED, HOWEVER, that if the
Series 2003-1 Cash Collateral Account has been established and funded,
the Trustee shall withdraw from the Series 2003-1 Cash Collateral
Account and deposit in the Series 2003-1 Distribution Account an
amount equal to the lesser of (x) the Series 2003-1 Cash Collateral
Percentage on such Distribution Date of the least of the amounts
described in clauses (i), (ii) and (iii) above and (y) the Series
2003-1 Available Cash Collateral Account Amount on such Distribution
Date and draw an amount equal to the remainder of such amount on the
Series 2003-1 Letters of Credit.
(iii) DEMAND NOTE DRAW. If on any Determination Date, the
Administrator determines that the Principal Deficit Amount on the next
succeeding Distribution Date (after giving effect to any withdrawal
from the Series 2003-1 Reserve Account pursuant to Section 3.5(c)(i)
on such Distribution Date) will be greater than zero, prior to 10:00
a.m. (New York City time) on the second Business Day prior to such
Distribution Date, the Administrator shall instruct the Trustee in
writing to deliver a Demand Notice to the Demand Note Issuers
demanding payment of an amount equal to the lesser of (A) the
Principal Deficit Amount and (B) the Series 2003-1 Letter of Credit
Amount. The Trustee shall, prior to 12:00 noon (New York City time) on
the second Business Day preceding such Distribution Date, deliver such
Demand Notice to the Demand Note Issuers; PROVIDED, HOWEVER, that if
an Event of Bankruptcy (or the occurrence of an event described in
clause (a) of the definition thereof, without the lapse of a period of
60
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consecutive days) with respect to a Demand Note Issuer shall have
occurred and be continuing, the Trustee shall not be required to
deliver such Demand Notice to such Demand Note Issuer. The Trustee
shall cause the proceeds of any demand on the Series 2003-1 Demand
Notes to be deposited into the Series 2003-1 Distribution Account.
(iv) LETTER OF CREDIT DRAW. In the event that either (x) on or
prior to 10:00 a.m. (New York City time) on the Business Day
immediately preceding any Distribution Date next succeeding any date
on which a Demand Notice has been transmitted by the Trustee to the
Demand Note Issuers pursuant to clause (ii) of this Section 3.5(c) any
Demand Note Issuer shall have failed to pay to the Trustee or deposit
into the Series 2003-1 Distribution Account the amount specified in
such Demand Notice in whole or in part or (y) due to the occurrence of
an Event of Bankruptcy (or the occurrence of an event described in
clause (a) of the definition thereof, without the lapse of a period of
60 consecutive days) with respect to one or more of the Demand Note
Issuers, the Trustee shall not have delivered such Demand Notice to
any Demand Note Issuer on the second Business Day preceding the Series
2003-1 Termination Date, then, in the case of (x) or (y) the Trustee
shall draw on the Series 2003-1 Letters of Credit, if any, by 12:00
noon (New York City time) on such Business Day an amount equal to the
lesser of (a) the amount that the Demand Note Issuers failed to pay
under the Series 2003-1 Demand Notes (or, the amount that the Trustee
failed to demand for payment thereunder) and (b) the Series 2003-1
Letter of Credit Amount on such Business Day by presenting to each
Series 2003-1 Letter of Credit Provider a draft accompanied by a
Certificate of Unpaid Demand Note Demand; PROVIDED, HOWEVER, that if
the Series 2003-1 Cash Collateral Account has been established and
funded, the Trustee shall withdraw from the Series 2003-1 Cash
Collateral Account and deposit in the Series 2003-1 Distribution
Account an amount equal to the lesser of (x) the Series 2003-1 Cash
Collateral Percentage on such Business Day of the amount that the
Demand Note Issuers failed to pay under the Series 2003-1 Demand Notes
(or, the amount that the Trustee failed to demand for payment
thereunder) and (y) the Series 2003-1 Available Cash Collateral
Account Amount on such Business Day and draw an amount equal to the
remainder of the amount that the Demand Note Issuers failed to pay
under the Series 2003-1 Demand Notes (or, the amount that the Trustee
failed to demand for payment thereunder) on the Series 2003-1 Letters
of Credit. The Trustee shall deposit, or cause the deposit of, the
proceeds of any draw on the Series 2003-1 Letters of Credit and the
proceeds of any withdrawal from the Series 2003-1 Cash Collateral
Account to be deposited in the Series 2003-1 Distribution Account.
(d) SERIES 2003-1 TERMINATION DATE. The entire Series 2003-1
Invested Amount shall be due and payable on the Series 2003-1 Termination Date.
In connection therewith:
(i) RESERVE ACCOUNT WITHDRAWAL. If, after giving effect to
the deposit into the Series 2003-1 Distribution Account of the amount
to be deposited in accordance with Section 3.5(a), together with any
amounts to be deposited therein
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in accordance with Section 3.5(c) on the Series 2003-1 Termination
Date, the amount to be deposited in the Series 2003-1 Distribution
Account with respect to the Series 2003-1 Termination Date is or will
be less than the Series 2003-1 Invested Amount, then, prior to 12:00
noon (New York City time) on the second Business Day prior to the
Series 2003-1 Termination Date, the Administrator shall instruct the
Trustee in writing to withdraw from the Series 2003-1 Reserve Account,
an amount equal to the lesser of the Series 2003-1 Available Reserve
Account Amount and such insufficiency and deposit it in the Series
2003-1 Distribution Account on the Series 2003-1 Termination Date.
(ii) DEMAND NOTE DRAW. If the amount to be deposited in the
Series 2003-1 Distribution Account in accordance with Section 3.5(a)
together with any amounts to be deposited therein in accordance with
Section 3.5(c) and Section 3.5(d)(i) on the Series 2003-1 Termination
Date is less than the Series 2003-1 Invested Amount, then, prior to
10:00 a.m. (New York City time) on the second Business Day prior to
the Series 2003-1 Termination Date, the Administrator shall instruct
the Trustee in writing to make a demand (a "DEMAND NOTICE")
substantially in the form attached hereto as EXHIBIT F on the Demand
Note Issuers for payment under the Series 2003-1 Demand Notes in an
amount equal to the lesser of (i) such insufficiency and (ii) the
Series 2003-1 Letter of Credit Amount. The Trustee shall, prior to
12:00 noon (New York City time) on the second Business Day preceding
the Series 2003-1 Termination Date, deliver such Demand Notice to the
Demand Note Issuers; PROVIDED, HOWEVER, that if an Event of Bankruptcy
(or the occurrence of an event described in clause (a) of the
definition thereof, without the lapse of a period of 60 consecutive
days) with respect to a Demand Note Issuer shall have occurred and be
continuing, the Trustee shall not be required to deliver such Demand
Notice to such Demand Note Issuer. The Trustee shall cause the
proceeds of any demand on the Series 2003-1 Demand Notes to be
deposited into the Series 2003-1 Distribution Account.
(iii) LETTER OF CREDIT DRAW. In the event that either (x) on or
prior to 10:00 a.m. (New York City time) on the Business Day prior to
such Distribution Date, any Demand Note Issuer shall have failed to
pay to the Trustee or deposit in the Series 2003-1 Distribution
Account the amount specified in such Demand Notice in whole or in part
or (y) due to the occurrence of an Event of Bankruptcy (or the
occurrence of an event described in clause (a) of the definition
thereof, without the lapse of a period of 60 consecutive days) with
respect to any Demand Note Issuer, the Trustee shall not have
delivered such Demand Notice to any Demand Note Issuer on the second
Business Day preceding such Distribution Date, then, in the case of
(x) or (y) the Trustee shall on such Business Day draw on the Series
2003-1 Letters of Credit, if any, an amount equal to the lesser of (i)
Series 2003-1 Letter of Credit Amount and (ii) the aggregate amount
that the Demand Note Issuers failed to pay under the Series 2003-1
Demand Notes (or, the amount that the Trustee failed to demand for
payment thereunder) by presenting to each Series 2003-1 Letter of
Credit Provider a draft accompanied by a Certificate of Unpaid Demand
Note Demand; PROVIDED, HOWEVER, that if the
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Series 2003-1 Cash Collateral Account has been established and funded,
the Trustee shall withdraw from the Series 2003-1 Cash Collateral
Account and deposit in the Series 2003-1 Distribution Account an
amount equal to the lesser of (x) the Series 2003-1 Cash Collateral
Percentage on such Business Day of the aggregate amount that the
Demand Note Issuers failed to pay under the Series 2003-1 Demand Notes
(or, the amount that the Trustee failed to demand for payment
thereunder) and (y) the Series 2003-1 Available Cash Collateral
Account Amount on such Business Day and draw an amount equal to the
remainder of the aggregate amount that the Demand Note Issuers failed
to pay under the Series 2003-1 Demand Notes (or, the amount that the
Trustee failed to demand for payment thereunder) on the Series 2003-1
Letters of Credit. The Trustee shall deposit into, or cause the
deposit of, the proceeds of any draw on the Series 2003-1 Letters of
Credit and the proceeds of any withdrawal from the Series 2003-1 Cash
Collateral Account to be deposited in the Series 2003-1 Distribution
Account.
(e) DISTRIBUTION. On each Distribution Date occurring on or after
the date a withdrawal is made from the Series 2003-1 Collection Account pursuant
to Section 3.5(a) or amounts are deposited in the Series 2003-1 Distribution
Account pursuant to Section 3.5(c) and/or (d), the Paying Agent shall, in
accordance with Section 6.1 of the Base Indenture, pay to the Purchaser from the
Series 2003-1 Distribution Account the amount deposited therein pursuant to
Section 3.5(a), (c), and/or (d).
Section 3.6. ADMINISTRATOR'S FAILURE TO INSTRUCT THE TRUSTEE TO MAKE
A DEPOSIT OR PAYMENT. If the Administrator fails to give notice or instructions
to make any payment from or deposit into the Collection Account required to be
given by the Administrator, at the time specified in the Administration
Agreement or any other Related Document (including applicable grace periods),
the Trustee shall make such payment or deposit into or from the Collection
Account without such notice or instruction from the Administrator, PROVIDED that
the Administrator, upon request of the Trustee, promptly provides the Trustee
with all information necessary to allow the Trustee to make such a payment or
deposit. When any payment or deposit hereunder or under any other Related
Document is required to be made by the Trustee or the Paying Agent at or prior
to a specified time, the Administrator shall deliver any applicable written
instructions with respect thereto reasonably in advance of such specified time.
Section 3.7. SERIES 2003-1 RESERVE ACCOUNT. (a) ESTABLISHMENT OF
SERIES 2003-1 RESERVE ACCOUNT. AFC-II shall establish and maintain in the name
of the Series 2003-1 Agent for the benefit of the Series 2003-1 Noteholders, or
cause to be established and maintained, an account (the "SERIES 2003-1 RESERVE
ACCOUNT"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Series 2003-1 Noteholders. The Series
2003-1 Reserve 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 Series 2003-1 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 depositary
institution or trust company shall be reduced to below "BBB-" by S&P or "Baa2"
by Xxxxx'x, then AFC-II shall, within 30 days of such reduction, establish a new
Series 2003-1 Reserve Account with a new
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Qualified Institution. If the Series 2003-1 Reserve Account is not maintained in
accordance with the previous sentence, AFC-II shall establish a new Series
2003-1 Reserve Account, within ten (10) Business Days after obtaining knowledge
of such fact, which complies with such sentence, and shall instruct the Series
2003-1 Agent in writing to transfer all cash and investments from the
non-qualifying Series 2003-1 Reserve Account into the new Series 2003-1 Reserve
Account. Initially, the Series 2003-1 Reserve Account will be established with
The Bank of New York.
(b) ADMINISTRATION OF THE SERIES 2003-1 RESERVE ACCOUNT. The
Administrator may instruct the institution maintaining the Series 2003-1 Reserve
Account to invest funds on deposit in the Series 2003-1 Reserve Account from
time to time in Permitted Investments; 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 received, unless
any Permitted Investment held in the Series 2003-1 Reserve Account is held with
the Paying Agent, then 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 Series 2003-1
Reserve Account and any such Permitted Investments that constitute (i) physical
property (and that is not either a United States security entitlement or a
security entitlement) shall be physically delivered to the Trustee; (ii) United
States security entitlements or security entitlements shall be controlled (as
defined in Section 8-106 of the New York UCC) by the Trustee pending maturity or
disposition, and (iii) uncertificated securities (and not United States security
entitlements) shall be delivered to the Trustee by causing the Trustee to become
the registered holder of such securities.
(c) EARNINGS FROM SERIES 2003-1 RESERVE ACCOUNT. All interest and
earnings (net of losses and investment expenses) paid on funds on deposit in the
Series 2003-1 Reserve Account shall be deemed to be on deposit therein and
available for distribution.
(d) SERIES 2003-1 RESERVE ACCOUNT CONSTITUTES ADDITIONAL COLLATERAL
FOR SERIES 2003-1 NOTES. In order to secure and provide for the repayment and
payment of the AFC-II Obligations with respect to the Series 2003-1 Notes,
AFC-II hereby grants a security interest in and assigns, pledges, grants,
transfers and sets over to the Series 2003-1 Agent, for the benefit of the
Series 2003-1 Noteholders, all of AFC-II's right, title and interest in and to
the following (whether now or hereafter existing or acquired): (i) the Series
2003-1 Reserve Account, including any security entitlement thereto; (ii) all
funds on deposit therein from time to time; (iii) all certificates and
instruments, if any, representing or evidencing any or all of the Series 2003-1
Reserve Account or the funds on deposit therein from time to time; (iv) all
investments made at any time and from time to time with monies in the Series
2003-1 Reserve Account, whether constituting securities, instruments, general
intangibles, investment property, financial assets or other property; (v) all
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
the Series 2003-1 Reserve Account, the funds on deposit therein from time to
time or the investments made with such funds; and (vi) all proceeds of any and
all of the foregoing, including, without limitation, cash (the items in the
foregoing clauses (i) through (vi) are referred to, collectively, as the "SERIES
2003-1 RESERVE ACCOUNT COLLATERAL"). The Series 2003-1 Agent shall possess all
right, title and interest in and to all funds on deposit from time to time in
the Series 2003-1 Reserve Account and in all proceeds thereof, and shall be the
only person authorized to originate entitlement orders in respect of the Series
2003-1 Reserve Account. The Series 2003-1 Reserve
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Account Collateral shall be under the sole dominion and control of the Series
2003-1 Agent for the benefit of the Series 2003-1 Noteholders. The Series 2003-1
Agent hereby agrees (i) to act as the securities intermediary (as defined in
Section 8-102(a)(14) of the New York UCC) with respect to the Series 2003-1
Reserve Account; (ii) that each item of property (whether investment property,
financial asset, security, instrument or cash) credited to the Series 2003-1
Reserve Account shall be treated as a financial asset (as defined in Section
8-102(a)(9) of the New York UCC) and (iii) to comply with any entitlement order
(as defined in Section 8-102(a)(8) of the New York UCC) issued by the Trustee.
(e) PREFERENCE AMOUNT WITHDRAWALS FROM THE SERIES 2003-1 RESERVE
ACCOUNT OR THE SERIES 2003-1 CASH COLLATERAL ACCOUNT. If the Purchaser notifies
the Trustee in writing of the existence of a Preference Amount, then, subject to
the satisfaction of the conditions set forth in the next succeeding sentence, on
the Business Day on which those conditions are first satisfied, the Trustee
shall withdraw from either (x) prior to the Series 2003-1 Letter of Credit
Termination Date, the Series 2003-1 Reserve Account or (y) on or after the
Series 2003-1 Letter of Credit Termination Date, the Series 2003-1 Cash
Collateral Account and pay to the Purchaser an amount equal to such Preference
Amount. Prior to any withdrawal from the Series 2003-1 Reserve Account or the
Series 2003-1 Cash Collateral Account pursuant to this Section 3.7(e), the
Trustee shall have received (i) a certified copy of the order requiring the
return of such Preference Amount; (ii) an opinion of counsel satisfactory to the
Trustee that such order is final and not subject to appeal; and (iii) a release
as to any claim against AFC-II by the Purchaser for any amount paid in respect
of such Preference Amount. On the Business Day after the Series 2003-1 Letter of
Credit Termination Date, the Trustee shall transfer the amount on deposit in the
Series 2003-1 Reserve Account to the Series 2003-1 Cash Collateral Account.
(f) SERIES 2003-1 RESERVE ACCOUNT SURPLUS. In the event that the
Series 2003-1 Reserve Account Surplus on any Distribution Date, after giving
effect to all withdrawals from the Series 2003-1 Reserve Account, is greater
than zero, the Trustee, acting in accordance with the written instructions of
the Administrator pursuant to the Administration Agreement, shall withdraw from
the Series 2003-1 Reserve Account an amount equal to the Series 2003-1 Reserve
Account Surplus and shall pay such amount to AFC-II.
(g) TERMINATION OF SERIES 2003-1 RESERVE ACCOUNT. Upon the
termination of the Indenture pursuant to Section 11.1 of the Base Indenture, the
Trustee, acting in accordance with the written instructions of the
Administrator, after the prior payment of all amounts owing to the Series 2003-1
Noteholders and payable from the Series 2003-1 Reserve Account as provided
herein, shall withdraw from the Series 2003-1 Reserve Account all amounts on
deposit therein for payment to AFC-II.
Section 3.8. SERIES 2003-1 LETTERS OF CREDIT AND SERIES 2003-1 CASH
COLLATERAL ACCOUNT. (a) SERIES 2003-1 LETTERS OF CREDIT AND SERIES 2003-1 CASH
COLLATERAL ACCOUNT CONSTITUTE ADDITIONAL COLLATERAL FOR SERIES 2003-1 NOTES. In
order to secure and provide for the repayment and payment of the AFC-II
Obligations with respect to the Series 2003-1 Notes, AFC-II hereby grants a
security interest in and assigns, pledges, grants, transfers and sets over to
the Trustee, for the benefit of the Series 2003-1 Noteholders, all of AFC-II's
right, title and interest in and to the following (whether now or hereafter
existing or acquired): (i) each Series 2003-1 Letter of Credit; (ii) the Series
2003-1 Cash Collateral Account, including any security
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entitlement thereto; (iii) all funds on deposit in the Series 2003-1 Cash
Collateral Account from time to time; (iv) all certificates and instruments, if
any, representing or evidencing any or all of the Series 2003-1 Cash Collateral
Account or the funds on deposit therein from time to time; (v) all investments
made at any time and from time to time with monies in the Series 2003-1 Cash
Collateral Account, whether constituting securities, instruments, general
intangibles, investment property, financial assets or other property; (vi) all
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
the Series 2003-1 Cash Collateral Account, the funds on deposit therein from
time to time or the investments made with such funds; and (vii) all proceeds of
any and all of the foregoing, including, without limitation, cash (the items in
the foregoing clauses (ii) through (vii) are referred to, collectively, as the
"SERIES 2003-1 CASH COLLATERAL ACCOUNT COLLATERAL"). The Trustee shall, for the
benefit of the Series 2003-1 Noteholders, possess all right, title and interest
in all funds on deposit from time to time in the Series 2003-1 Cash Collateral
Account and in all proceeds thereof, and shall be the only person authorized to
originate entitlement orders in respect of the Series 2003-1 Cash Collateral
Account. The Series 2003-1 Cash Collateral Account shall be under the sole
dominion and control of the Trustee for the benefit of the Series 2003-1
Noteholders. The Series 2003-1 Agent hereby agrees (i) to act as the securities
intermediary (as defined in Section 8-102(a)(14) of the New York UCC) with
respect to the Series 2003-1 Cash Collateral Account; (ii) that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Series 2003-1 Cash Collateral Account shall be treated as
a financial asset (as defined in Section 8-102(a)(9) of the New York UCC) and
(iii) to comply with any entitlement order (as defined in Section 8-102(a)(8) of
the New York UCC) issued by the Trustee.
(b) SERIES 2003-1 LETTER OF CREDIT EXPIRATION DATE. If prior to the
date which is ten (10) days prior to the then scheduled Series 2003-1 Letter of
Credit Expiration Date with respect to any Series 2003-1 Letter of Credit,
excluding the amount available to be drawn under such Series 2003-1 Letter of
Credit but taking into account each substitute Series 2003-1 Letter of Credit
which has been obtained from a Series 2003-1 Eligible Letter of Credit Provider
and is in full force and effect on such date, the Series 2003-1 Enhancement
Amount would be equal to or more than the Series 2003-1 Required Enhancement
Amount and the Series 2003-1 Liquidity Amount would be equal to or greater than
the Series 2003-1 Required Liquidity Amount, then the Administrator shall notify
the Trustee in writing no later than two Business Days prior to such Series
2003-1 Letter of Credit Expiration Date of such determination. If prior to the
date which is ten (10) days prior to the then scheduled Series 2003-1 Letter of
Credit Expiration Date with respect to any Series 2003-1 Letter of Credit,
excluding the amount available to be drawn under such Series 2003-1 Letter of
Credit but taking into account a substitute Series 2003-1 Letter of Credit which
has been obtained from a Series 2003-1 Eligible Letter of Credit Provider and is
in full force and effect on such date, the Series 2003-1 Enhancement Amount
would be less than the Series 2003-1 Required Enhancement Amount or the Series
2003-1 Liquidity Amount would be less than the Series 2003-1 Required Liquidity
Amount, then the Administrator shall notify the Trustee in writing no later than
two Business Days prior to such Series 2003-1 Letter of Credit Expiration Date
of (x) the greater of (A) the excess, if any, of the Series 2003-1 Required
Enhancement Amount over the Series 2003-1 Enhancement Amount, excluding the
available amount under such expiring Series 2003-1 Letter of Credit but taking
into account any substitute Series 2003-1 Letter of Credit which has been
obtained from a Series 2003-1 Eligible Letter of Credit Provider and is in full
force and effect, on such date, and (B) the
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excess, if any, of the Series 2003-1 Required Liquidity Amount over the Series
2003-1 Liquidity Amount, excluding the available amount under such expiring
Series 2003-1 Letter of Credit but taking into account any substitute Series
2003-1 Letter of Credit which has been obtained from a Series 2003-1 Eligible
Letter of Credit Provider and is in full force and effect, on such date, and (y)
the amount available to be drawn on such expiring Series 2003-1 Letter of Credit
on such date. Upon receipt of such notice by the Trustee on or prior to 10:00
a.m. (New York City time) on any Business Day, the Trustee shall, by 12:00 p.m.
(New York City time) on such Business Day (or, in the case of any notice given
to the Trustee after 10:00 a.m. (New York City time), by 12:00 p.m. (New York
City time) on the next following Business Day), draw the lesser of the amounts
set forth in clauses (x) and (y) above on such expiring Series 2003-1 Letter of
Credit by presenting a draft accompanied by a Certificate of Termination Demand
and shall cause the Termination Disbursement to be deposited in the Series
2003-1 Cash Collateral Account.
If the Trustee does not receive the notice from the Administrator
described in the first paragraph of this Section 3.8(b) on or prior to the date
that is two Business Days prior to each Series 2003-1 Letter of Credit
Expiration Date, the Trustee shall, by 12:00 p.m. (New York City time) on such
Business Day draw the full amount of such Series 2003-1 Letter of Credit by
presenting a draft accompanied by a Certificate of Termination Demand and shall
cause the Termination Disbursement to be deposited in the Series 2003-1 Cash
Collateral Account.
(c) SERIES 2003-1 LETTER OF CREDIT PROVIDERS. The Administrator
shall notify the Trustee in writing within one Business Day of becoming aware
that (i) the long-term senior unsecured debt credit rating of any Series 2003-1
Letter of Credit Provider has fallen below "A" as determined by Standard &
Poor's or "A2" as determined by Xxxxx'x or (ii) the short-term senior unsecured
debt credit rating of any Series 2003-1 Letter of Credit Provider has fallen
below "A-1" as determined by Standard & Poor's or "P-1" as determined by
Xxxxx'x. At such time the Administrator shall also notify the Trustee of (i) the
greater of (A) the excess, if any, of the Series 2003-1 Required Enhancement
Amount over the Series 2003-1 Enhancement Amount, excluding the available amount
under the Series 2003-1 Letter of Credit issued by such Series 2003-1 Letter of
Credit Provider, on such date, and (B) the excess, if any, of the Series 2003-1
Required Liquidity Amount over the Series 2003-1 Liquidity Amount, excluding the
available amount under such Series 2003-1 Letter of Credit, on such date, and
(ii) the amount available to be drawn on such Series 2003-1 Letter of Credit on
such date. Upon receipt of such notice by the Trustee on or prior to 10:00 a.m.
(New York City time) on any Business Day, the Trustee shall, by 12:00 p.m. (New
York City time) on such Business Day (or, in the case of any notice given to the
Trustee after 10:00 a.m. (New York City time), by 12:00 p.m. (New York City
time) on the next following Business Day), draw on such Series 2003-1 Letter of
Credit in an amount equal to the lesser of the amounts in clause (i) and clause
(ii) of the immediately preceding sentence on such Business Day by presenting a
draft accompanied by a Certificate of Termination Demand and shall cause the
Termination Disbursement to be deposited in the Series 2003-1 Cash Collateral
Account.
(d) DRAWS ON THE SERIES 2003-1 LETTERS OF CREDIT. If there is more
than one Series 2003-1 Letter of Credit on the date of any draw on the Series
2003-1 Letters of Credit pursuant to the terms of this Supplement, the
Administrator shall instruct the Trustee, in writing, to draw on each Series
2003-1 Letter of Credit in an amount equal to the LOC Pro Rata Share of
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the Series 2003-1 Letter of Credit Provider issuing such Series 2003-1 Letter of
Credit of the amount of such draw on the Series 2003-1 Letters of Credit.
(e) ESTABLISHMENT OF SERIES 2003-1 CASH COLLATERAL ACCOUNT. On or
prior to the date of any drawing under a Series 2003-1 Letter of Credit pursuant
to Section 3.8(b) or (c) above, AFC-II shall establish and maintain in the name
of the Trustee for the benefit of the Series 2003-1 Noteholders, or cause to be
established and maintained, an account (the "SERIES 2003-1 CASH COLLATERAL
ACCOUNT"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Series 2003-1 Noteholders. The Series
2003-1 Cash Collateral 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 Series 2003-1 Cash
Collateral 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 Xxxxx'x, then AFC-II shall, within 30 days of such
reduction, establish a new Series 2003-1 Cash Collateral Account with a new
Qualified Institution or a new 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 Series 2003-1 Cash
Collateral Account. If a new Series 2003-1 Cash Collateral Account is
established, AFC-II shall instruct the Trustee in writing to transfer all cash
and investments from the non-qualifying Series 2003-1 Cash Collateral Account
into the new Series 2003-1 Cash Collateral Account.
(f) ADMINISTRATION OF THE SERIES 2003-1 CASH COLLATERAL ACCOUNT.
AFC-II may instruct (by standing instructions or otherwise) the institution
maintaining the Series 2003-1 Cash Collateral Account to invest funds on deposit
in the Series 2003-1 Cash Collateral Account from time to time in Permitted
Investments; 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 received, unless any Permitted Investment held in the Series
2003-1 Cash Collateral Account is held with the Paying Agent, in which case such
investment may mature on such Distribution Date so long as such funds shall be
available for withdrawal on or prior to such Distribution Date. All such
Permitted Investments will be credited to the Series 2003-1 Cash Collateral
Account and any such Permitted Investments that constitute (i) physical property
(and that is not either a United States security entitlement or a security
entitlement) shall be physically delivered to the Trustee; (ii) United States
security entitlements or security entitlements shall be controlled (as defined
in Section 8-106 of the New York UCC) by the Trustee pending maturity or
disposition, and (iii) uncertificated securities (and not United States security
entitlements) shall be delivered to the Trustee by causing the Trustee to become
the registered holder of such securities. The Trustee shall, at the expense of
AFC-II, take such action as is required to maintain the Trustee's security
interest in the Permitted Investments credited to the Series 2003-1 Cash
Collateral Account. AFC-II shall not direct the Trustee to 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. In the absence of written investment instructions hereunder, funds
on deposit in the Series 2003-1 Cash Collateral Account shall remain uninvested.
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(g) EARNINGS FROM SERIES 2003-1 CASH COLLATERAL ACCOUNT. All
interest and earnings (net of losses and investment expenses) paid on funds on
deposit in the Series 2003-1 Cash Collateral Account shall be deemed to be on
deposit therein and available for distribution.
(h) SERIES 2003-1 CASH COLLATERAL ACCOUNT SURPLUS. In the event that
the Series 2003-1 Cash Collateral Account Surplus on any Distribution Date (or,
after the Series 2003-1 Letter of Credit Termination Date, on any date) is
greater than zero, the Trustee, acting in accordance with the written
instructions of the Administrator, shall withdraw from the Series 2003-1 Cash
Collateral Account an amount equal to the Series 2003-1 Cash Collateral Account
Surplus and shall pay such amount: FIRST, to the Series 2003-1 Letter of Credit
Providers to the extent of any unreimbursed drawings under the related Series
0000-0 Xxxxxxxxxxxxx Agreement, for application in accordance with the
provisions of the related Series 2003-1 Reimbursement Agreement, and, SECOND, to
AFC-II any remaining amount.
(i) TERMINATION OF SERIES 2003-1 CASH COLLATERAL ACCOUNT. Upon the
termination of this Supplement in accordance with its terms, the Trustee, acting
in accordance with the written instructions of the Administrator, after the
prior payment of all amounts owing to the Series 2003-1 Noteholders and payable
from the Series 2003-1 Cash Collateral Account as provided herein, shall
withdraw from the Series 2003-1 Cash Collateral Account all amounts on deposit
therein (to the extent not withdrawn pursuant to Section 3.8(h) above) and shall
pay such amounts: FIRST, to the Series 2003-1 Letter of Credit Providers to the
extent of any unreimbursed drawings under the related Series 0000-0
Xxxxxxxxxxxxx Agreement, for application in accordance with the provisions of
the related Series 2003-1 Reimbursement Agreement, and, SECOND, to AFC-II any
remaining amount.
(j) TERMINATION DATE DEMANDS ON THE SERIES 2003-1 LETTERS OF CREDIT.
Prior to 10:00 a.m. (New York City time) on the Business Day immediately
succeeding the Series 2003-1 Letter of Credit Termination Date, the
Administrator shall determine the Series 2003-1 Demand Note Payment Amount as of
the Series 2003-1 Letter of Credit Termination Date. If the Series 2003-1 Demand
Note Payment Amount is greater than zero, then the Administrator shall instruct
the Trustee in writing to draw on the Series 2003-1 Letters of Credit. Upon
receipt of any such notice by the Trustee on or prior to 11:00 a.m. (New York
City time) on a Business Day, the Trustee shall, by 12:00 noon (New York City
time) on such Business Day draw an amount equal to the lesser of (i) the excess
of the Series 2003-1 Demand Note Payment Amount over the Series 2003-1 Available
Reserve Account Amount (prior to giving effect to any transfer to the Series
2003-1 Cash Collateral Account pursuant to Section 3.7(e) on such date) and (ii)
the Series 2003-1 Letter of Credit Liquidity Amount on the Series 2003-1 Letters
of Credit by presenting to each Series 2003-1 Letter of Credit Provider a draft
accompanied by a Certificate of Termination Date Demand; PROVIDED, HOWEVER, that
if the Series 2003-1 Cash Collateral Account has been established and funded,
the Trustee shall draw an amount equal to the product of (a) 100% minus the
Series 2003-1 Cash Collateral Percentage and (b) the lesser of the amounts
referred to in clause (i) or (ii) on such Business Day on the Series 2003-1
Letters of Credit as calculated by the Administrator and provided in writing to
the Trustee. The Trustee shall cause the Termination Date Disbursement to be
deposited in the Series 2003-1 Cash Collateral Account.
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Section 3.9. SERIES 2003-1 DISTRIBUTION ACCOUNT. (a) ESTABLISHMENT OF
SERIES 2003-1 DISTRIBUTION ACCOUNT. The Trustee shall establish and maintain in
the name of the Series 2003-1 Agent for the benefit of the Series 2003-1
Noteholders, or cause to be established and maintained, an account (the "SERIES
2003-1 DISTRIBUTION ACCOUNT"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 2003-1
Noteholders. The Series 2003-1 Distribution 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 Series
2003-1 Distribution 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 depositary institution or trust company shall be
reduced to below "BBB-" by S&P or "Baa3" by Xxxxx'x, then AFC-II shall, within
30 days of such reduction, establish a new Series 2003-1 Distribution Account
with a new Qualified Institution. If the Series 2003-1 Distribution Account is
not maintained in accordance with the previous sentence, AFC-II shall establish
a new Series 2003-1 Distribution Account, within ten (10) Business Days after
obtaining knowledge of such fact, which complies with such sentence, and shall
instruct the Series 2003-1 Agent in writing to transfer all cash and investments
from the non-qualifying Series 2003-1 Distribution Account into the new Series
2003-1 Distribution Account. Initially, the Series 2003-1 Distribution Account
will be established with The Bank of New York.
(b) ADMINISTRATION OF THE SERIES 2003-1 DISTRIBUTION ACCOUNT. The
Administrator may instruct the institution maintaining the Series 2003-1
Distribution Account to invest funds on deposit in the Series 2003-1
Distribution Account from time to time in Permitted Investments; 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
received, unless any Permitted Investment held in the Series 2003-1 Distribution
Account is held with the Paying Agent, then 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 Series 2003-1 Distribution Account and any such Permitted Investments that
constitute (i) physical property (and that is not either a United States
security entitlement or a security entitlement) shall be physically delivered to
the Trustee; (ii) United States security entitlements or security entitlements
shall be controlled (as defined in Section 8-106 of the New York UCC) by the
Trustee pending maturity or disposition, and (iii) uncertificated securities
(and not United States security entitlements) shall be delivered to the Trustee
by causing the Trustee to become the registered holder of such securities.
(c) EARNINGS FROM SERIES 2003-1 DISTRIBUTION ACCOUNT. All interest
and earnings (net of losses and investment expenses) paid on funds on deposit in
the Series 2003-1 Distribution Account shall be deemed to be on deposit and
available for distribution.
(d) SERIES 2003-1 DISTRIBUTION ACCOUNT CONSTITUTES ADDITIONAL
COLLATERAL FOR SERIES 2003-1 NOTES. In order to secure and provide for the
repayment and payment of the AFC-II Obligations with respect to the Series
2003-1 Notes, AFC-II hereby grants a security interest in and assigns, pledges,
grants, transfers and sets over to the Series 2003-1 Agent, for the benefit of
the Series 2003-1 Noteholders, all of AFC-II's right, title and interest in and
to the following (whether now or hereafter existing or acquired): (i) the Series
2003-1 Distribution Account, including any security entitlement thereto; (ii)
all funds on deposit therein from time to time;
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(iii) all certificates and instruments, if any, representing or evidencing any
or all of the Series 2003-1 Distribution Account or the funds on deposit therein
from time to time; (iv) all investments made at any time and from time to time
with monies in the Series 2003-1 Distribution Account, whether constituting
securities, instruments, general intangibles, investment property, financial
assets or other property; (v) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for the Series 2003-1 Distribution Account, the
funds on deposit therein from time to time or the investments made with such
funds; and (vi) all proceeds of any and all of the foregoing, including, without
limitation, cash (the items in the foregoing clauses (i) through (vi) are
referred to, collectively, as the "SERIES 2003-1 DISTRIBUTION ACCOUNT
COLLATERAL"). The Series 2003-1 Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Series 2003-1
Distribution Account and in and to all proceeds thereof, and shall be the only
person authorized to originate entitlement orders in respect of the Series
2003-1 Distribution Account. The Series 2003-1 Distribution Account Collateral
shall be under the sole dominion and control of the Series 2003-1 Agent for the
benefit of the Series 2003-1 Noteholders. The Series 2003-1 Agent hereby agrees
(i) to act as the securities intermediary (as defined in Section 8-102(a)(14) of
the New York UCC) with respect to the Series 2003-1 Distribution Account; (ii)
that each item of property (whether investment property, financial asset,
security, instrument or cash) credited to the Series 2003-1 Distribution Account
shall be treated as a financial asset (as defined in Section 8-102(a)(9) of the
New York UCC) and (iii) to comply with any entitlement order (as defined in
Section 8-102(a)(8) of the New York UCC) issued by the Trustee.
Section 3.10. SERIES 2003-1 DEMAND NOTES CONSTITUTE ADDITIONAL
COLLATERAL FOR SERIES 2003-1 NOTES. In order to secure and provide for the
repayment and payment of the obligations with respect to the Series 2003-1
Notes, AFC-II hereby grants a security interest in and assigns, pledges, grants,
transfers and sets over to the Trustee, for the benefit of the Series 2003-1
Noteholders, all of AFC-II's right, title and interest in and to the following
(whether now or hereafter existing or acquired): (i) the Series 2003-1 Demand
Notes; (ii) all certificates and instruments, if any, representing or evidencing
the Series 2003-1 Demand Notes; and (iii) all proceeds of any and all of the
foregoing, including, without limitation, cash. On the date hereof, AFC-II shall
deliver to the Trustee, for the benefit of the Series 2003-1 Noteholders, each
Series 2003-1 Demand Note, endorsed in blank. The Trustee, for the benefit of
the Series 2003-1 Noteholders, shall be the only Person authorized to make a
demand for payments on the Series 2003-1 Demand Notes.
Section 3.11. PAYMENTS TO PURCHASER. Notwithstanding anything to the
contrary herein or in the Base Indenture, amounts distributable by AFC-II, the
Trustee, the Paying Agent or the Administrator to the Purchaser shall be paid by
wire transfer of immediately available funds no later than 3:00 p.m. (New York
time) for credit to the account or accounts designated by the Purchaser.
ARTICLE IV
AMORTIZATION EVENTS
In addition to the Amortization Events set forth in Section 9.1 of the
Base Indenture, any of the following shall be an Amortization Event with respect
to the Series 2003-1
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Notes and collectively shall constitute the Amortization Events set forth in
Section 9.1(n) of the Base Indenture with respect to the Series 2003-1 Notes
(without notice or other action on the part of the Trustee or any holders of the
Series 2003-1 Notes):
(a) a Series 2003-1 Enhancement Deficiency shall occur and continue
for at least two (2) Business Days; PROVIDED, HOWEVER, that such event or
condition shall not be an Amortization Event if during such two (2)
Business Day period such Series 2003-1 Enhancement Deficiency shall have
been cured in accordance with the terms and conditions of the Indenture and
the Related Documents;
(b) either the Series 2003-1 Liquidity Amount shall be less than the
Series 2003-1 Required Liquidity Amount or the Series 2003-1 Available
Reserve Account Amount shall be less than the Series 2003-1 Required
Reserve Account Amount for at least two (2) Business Days; PROVIDED,
HOWEVER, that such event or condition shall not be an Amortization Event if
during such two (2) Business Day period such insufficiency shall have been
cured in accordance with the terms and conditions of the Indenture and the
Related Documents;
(c) an AESOP I Operating Lease Vehicle Deficiency shall occur and
continue for at least two (2) Business Days;
(d) the Collection Account, the Series 2003-1 Collection Account,
the Series 2003-1 Excess Collection Account or the Series 2003-1 Reserve
Account shall be subject to an injunction, estoppel or other stay or a Lien
(other than Liens permitted under the Related Documents);
(e) all principal of and interest on the Series 2003-1 Notes is not
paid on the Series 2003-1 Expected Final Distribution Date;
(f) any Series 2003-1 Letter of Credit shall not be in full force
and effect for at least two (2) Business Days and (x) either a Series
2003-1 Enhancement Deficiency would result from excluding such Series
2003-1 Letter of Credit from the Series 2003-1 Enhancement Amount or (y)
the Series 2003-1 Liquidity Amount, excluding therefrom the available
amount under such Series 2003-1 Letter of Credit, would be less than the
Series 2003-1 Required Liquidity Amount;
(g) from and after the funding of the Series 2003-1 Cash Collateral
Account, the Series 2003-1 Cash Collateral Account shall be subject to an
injunction, estoppel or other stay or a Lien (other than Liens permitted
under the Related Documents) for at least two (2) Business Days and either
(x) a Series 2003-1 Enhancement Deficiency would result from excluding the
Series 2003-1 Available Cash Collateral Account Amount from the Series
2003-1 Enhancement Amount or (y) the Series 2003-1 Liquidity Amount,
excluding therefrom the Series 2003-1 Available Cash Collateral Amount,
would be less than the Series 2003-1 Required Liquidity Amount;
(h) an Event of Bankruptcy shall have occurred with respect to any
Series 2003-1 Letter of Credit Provider or any Series 2003-1 Letter of
Credit Provider repudiates its Series 2003-1 Letter of Credit or refuses to
honor a proper draw thereon and
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either (x) a Series 2003-1 Enhancement Deficiency would result from
excluding such Series 2003-1 Letter of Credit from the Series 2003-1
Enhancement Amount or (y) the Series 2003-1 Liquidity Amount, excluding
therefrom the available amount under such Series 2003-1 Letter of Credit,
would be less than the Series 2003-1 Required Liquidity Amount;
(i) the occurrence of an Event of Bankruptcy with respect to any
Permitted Sublessee; and
(j) a Change in Control shall have occurred.
In the case of an event described above, an Amortization Event with
respect to the Series 2003-1 Notes shall have occurred without any notice or
other action on the part of the Trustee or any Series 2003-1 Noteholders,
immediately upon the occurrence of such event. Amortization Events with respect
to the Series 2003-1 Notes described above may be waived with the written
consent of the Series 2003-1 Noteholders.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SUPPLEMENT.
This Supplement shall become effective on the date (the "EFFECTIVE DATE") on
which the following conditions precedent have been satisfied or waived:
(a) DOCUMENTS. The Purchaser shall have received a copy, each
executed and delivered in form and substance satisfactory to it of (i) the
Base Indenture, executed by a duly authorized officer of each of AFC-II and
the Trustee, (ii) this Supplement, executed by a duly authorized officer of
each of AFC-II, the Administrator, the Trustee and the Purchaser, (iii)
each Lease, executed by a duly authorized officer of each of AGH, ARAC, as
Lessee and Administrator and the Lessor party thereto, (iv) each Loan
Agreement, executed by a duly authorized officer of each of AFC-II, the
Lessor party thereto and the Permitted Nominees party thereto, (v) each
Vehicle Title and Lienholder Nominee Agreement, executed by the duly
authorized officer of each of the Permitted Nominee party thereto, ARAC,
AGH, the Lessor party thereto and the Trustee and (vi) the Administration
Agreement, executed by a duly authorized officer of each of AFC-II and the
Administrator.
(b) CORPORATE DOCUMENTS; PROCEEDINGS OF AFC-II, THE ADMINISTRATOR,
AESOP LEASING, AESOP LEASING II, ORIGINAL AESOP, ARAC AND AGH. The
Purchaser shall have received from AFC-II, AESOP Leasing, AESOP Leasing II,
Original AESOP, Cherokee, ARAC and AGH true and complete copies of:
(i) to the extent applicable, the certificate of
incorporation or certificate of formation, including all amendments
thereto, of such Person, certified as of a recent date by the
Secretary of State or other appropriate authority of the state of
incorporation or organization, as the case may be, and a certificate
of compliance, of status or of good standing, as and to the extent
applicable, of
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each such Person as of a recent date, from the Secretary of State or
other appropriate authority of such jurisdiction;
(ii) a certificate of the Secretary or an Assistant Secretary
of such Person, dated on or prior to the Effective Date and certifying
(A) that attached thereto is a true and complete copy of the bylaws,
limited liability company agreement or partnership agreement of such
Person, as the case may be, as in effect on the Series 2003-1 Closing
Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto
is a true and complete copy of the resolutions, in form and substance
reasonably satisfactory to the Purchaser, of the Board of Directors or
Managers of such Person or committees thereof authorizing the
execution, delivery and performance of this Supplement and the Related
Documents to which it is a party and the transactions contemplated
thereby, and that such resolutions have not been amended, modified,
revoked or rescinded and are in full force and effect, (C) that the
certificate of incorporation or certificate of formation of such
Person has not been amended since the date of the last amendment
thereto shown on the certificate of good standing (or its equivalent)
furnished pursuant to clause (i) above and (D) as to the incumbency
and specimen signature of each officer or authorized signatory
executing this Supplement and the Related Documents or any other
document delivered in connection herewith or therewith on behalf of
such Person; and
(iii) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing
the certificate pursuant to clause (ii) above.
(c) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of each of AFC-II, the Administrator, AESOP Leasing, AESOP
Leasing II, Original AESOP, each of the Permitted Nominees, Cherokee, ARAC
and AGH contained in each of the Related Documents shall be true and
correct as of the Series 2003-1 Closing Date.
(d) NO AMORTIZATION EVENT, POTENTIAL AMORTIZATION EVENT OR AESOP I
OPERATING LEASE VEHICLE DEFICIENCY. No Amortization Event or Potential
Amortization Event in respect of the Series 2003-1 Notes or any other
Series of Notes shall exist and no AESOP I Operating Lease Vehicle
Deficiency shall exist.
(e) LIEN SEARCHES. The Purchaser shall have received a written
search report listing all effective financing statements that name each of
AFC-II, AESOP Leasing, AESOP Leasing II, Original AESOP the Permitted
Nominees or ARAC as debtor or assignor and that are filed in the State of
New York, the State of Delaware and in any other jurisdictions that the
Purchaser determines are necessary or appropriate, together with copies of
such financing statements, and tax and judgment lien searches showing no
such liens that are not permitted by the Base Indenture, this Supplement or
the Related Documents.
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(f) LEGAL OPINIONS. The Purchaser shall have received, with a
counterpart addressed to the Trustee, opinions of counsel required by
Section 2.2(f) of the Base Indenture and opinions of counsel with respect
to such other matters as may be reasonably requested by the Purchaser, in
form and substance reasonably acceptable to the addressees thereof.
(g) FEES AND EXPENSES. The Purchaser shall have received payment of
all fees, out-of-pocket expenses and other amounts due and payable to the
Purchaser on or before the Effective Date.
(h) ESTABLISHMENT OF ACCOUNTS. The Purchaser shall have received
evidence reasonably satisfactory to it that the Series 2003-1 Collection
Account, the Series 2003-1 Reserve Account and the Series 2003-1
Distribution Account shall have been established in accordance with the
terms and provisions of the Indenture.
(i) OPINION. The Purchaser shall have received an opinion of counsel
to the Trustee as to the due authorization, execution and delivery by the
Trustee of this Supplement and the due execution, authentication and
delivery by the Trustee of the Series 2003-1 Notes.
(j) PROCEEDINGS. All corporate and other proceedings and all other
documents and legal matters in connection with the transactions
contemplated by the Related Documents shall be satisfactory in form and
substance to the Purchaser and its counsel.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES, COVENANTS
Section 6.1. REPRESENTATIONS AND WARRANTIES OF AFC-II AND THE
ADMINISTRATOR. (a) AFC-II and the Administrator each hereby represents and
warrants to the Trustee and the Purchaser that:
(i) each and every of their respective representations and
warranties contained in the Related Documents is true and correct as of the
Series 2003-1 Closing Date and true and correct in all material respects as
of the Series 2003-1 Initial Funding Date and as of the date of each
Increase; and
(ii) as of the Series 2003-1 Closing Date, they have not engaged, in
connection with the offering of the Series 2003-1 Notes, in any form of
general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act.
(b) AFC-II hereby represents and warrants to the Trustee and the
Purchaser that each of the Series 2003-1 Notes has been duly authorized and
executed by AFC-II and when duly authenticated by the Trustee and delivered to
the Purchaser in accordance with the terms of this Supplement will constitute
legal, valid and binding obligations of AFC-II enforceable in accordance with
their terms, except as enforceability thereof may be limited by bankruptcy,
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insolvency, or other similar laws relating to or affecting generally the
enforcement of creditors' rights or by general equitable principles.
Section 6.2. COVENANTS OF AFC-II AND THE ADMINISTRATOR. AFC-II and the
Administrator hereby agree, in addition to their obligations hereunder, that:
(a) they shall observe in all material respects each and every of
their respective covenants (both affirmative and negative) contained in the
Base Indenture and all other Related Documents to which each is a party;
(b) they shall afford the Purchaser and the Trustee or any
representatives of the Purchaser or the Trustee access to all records
relating to the Leases, the Vehicles, the Manufacturer Programs and the
Loan Agreements at any reasonable time during regular business hours, upon
reasonable prior notice (and with one Business Day's prior notice if an
Amortization Event with respect to the Series 2003-1 Notes shall have been
deemed to have occurred or shall have been declared to have occurred), for
purposes of inspection and shall permit the Purchaser, the Trustee or any
representative of the Purchaser or the Trustee to visit any of AFC-II's or
the Administrator's, as the case may be, offices or properties during
regular business hours and as often as may reasonably be desired to discuss
the business, operations, properties, financial and other conditions of
AFC-II or the Administrator with their respective officers and employees
and with their independent certified public accountants;
(c) they shall promptly provide such additional financial and other
information with respect to the Related Documents, AFC-II, the Lessors, the
Permitted Nominees, the Lessees, the Guarantor, the Related Documents or
the Manufacturer Programs as the Purchaser may from time to time reasonably
request; and
(d) they shall provide to the Purchaser simultaneously with delivery
to the Trustee copies of information furnished to the Trustee or AFC-II
pursuant to the Related Documents as such information relates to all Series
of Notes generally or specifically to the Series 2003-1 Notes or the Series
2003-1 Collateral;
ARTICLE VII
GENERAL
Section 7.1. SUCCESSORS AND ASSIGNS (a). (b) This Supplement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that AFC-II and the Purchaser may not assign or
transfer any of its rights under this Supplement without the prior written
consent of the other party.
Section 7.2. SECURITIES LAW. The Purchaser hereby represents and
warrants to AFC-II that it is an "accredited investor" as such term is defined
in Rule 501(a) of Regulation D under the Securities Act and has sufficient
assets to bear the economic risk of, and sufficient knowledge and experience in
financial and business matters to evaluate the merits and risks of, its
investment in a Series 2003-1 Note. The Purchaser agrees that its Series 2003-1
Note will be acquired for investment only and not with a view to any public
distribution thereof, and that the
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Purchaser will not offer to sell or otherwise dispose of its Series 2003-1 Note
(or any interest therein) in violation of any of the registration requirements
of the Securities Act, or any applicable state or other securities laws. The
Purchaser acknowledges that it has no right to require AFC-II to register its
Series 2003-1 Note under the Securities Act or any other securities law. The
Purchaser hereby confirms and agrees that in connection with any transfer by it
of an interest in the Series 2003-1 Note, the Purchaser has not engaged and will
not engage in a general solicitation or general advertising including
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio or television, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
Section 7.3. ADJUSTMENTS; SET-OFF. In addition to any rights and
remedies of the Purchaser provided by law, the Purchaser shall have the right,
without prior notice to AFC-II, any such notice being expressly waived by AFC-II
to the extent permitted by applicable law, upon any amount becoming due and
payable by AFC-II hereunder or under the Series 2003-1 Notes to set-off and
appropriate and apply against any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Purchaser to or for the credit or the account of AFC-II. The
Purchaser agrees promptly to notify AFC-II and the Administrator after any such
set-off and application made by the Purchaser; PROVIDED that the failure to give
such notice shall not affect the validity of such set-off and application.
Section 7.4. NO BANKRUPTCY PETITION. (a) The Purchaser hereby
covenants and agrees that, prior to the date which is one year and one day after
the later of payment in full of all Series of Notes, it will not institute
against, or join any other Person in instituting against, AFC-II any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
similar proceedings under any federal or state bankruptcy or similar law.
(b) This covenant shall survive the termination of this Supplement
and the Base Indenture and the payment of all amounts payable hereunder and
thereunder.
Section 7.5. LIMITED RECOURSE. No recourse under any obligation,
covenant or agreement of the Purchaser contained herein shall be had against any
incorporator, stockholder, officer, director, employee or agent of the Purchaser
or any of its Affiliates by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that this Supplement is solely a corporate obligation of
the Purchaser individually, and that no personal liability whatever shall attach
to or be incurred by any incorporator, stockholder, officer, director, employee
or agent of the Purchaser or any of its Affiliates (solely by virtue of such
capacity) or any of them under or by reason of any of the obligations, covenants
or agreements of the Purchaser contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by the Purchaser
of any of such obligations, covenants or agreements, either at common law or at
equity, or by statute, rule or regulation, of every such incorporator,
stockholder, officer, director, employee or agent is hereby expressly waived as
a condition of and in consideration for the execution of this Supplement;
PROVIDED that the foregoing shall not relieve any such Person from any liability
it might
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otherwise have as a result of fraudulent actions taken or omissions made by
them. The provisions of this Section 7.5 shall survive termination of this
Supplement.
Section 7.6. COSTS AND EXPENSES. AFC-II agrees to pay on demand (x)
all reasonable out-of-pocket costs and expenses of the Purchaser (including,
without limitation, reasonable fees and disbursements of counsel to the
Purchaser) in connection with (i) the preparation, execution and delivery of
this Supplement and the other Related Documents and any amendments or waivers
of, or consents under, any such documents and (ii) the enforcement by the
Purchaser of the obligations and liabilities of AFC-II, the Lessors, the
Lessees, the Guarantor and the Administrator under the Indenture, this
Supplement, the other Related Documents or any related document and all costs
and expenses, if any (including reasonable counsel fees and expenses), in
connection with the enforcement of this Agreement and the other Related
Documents and (y) all reasonable out of pocket costs and expenses of the
Purchaser (including, without limitation, reasonable fees and disbursements of
counsel to the Purchaser) in connection with the administration of this
Supplement and the other Related Documents. Any payments made by AFC-II pursuant
to this Section 7.6 shall be made solely from funds available in the Series
2003-1 Distribution Account, shall be non-recourse other than with respect to
such funds, and shall not constitute a claim against AFC-II to the extent that
insufficient funds exist to make such payment. The agreements in this Section
shall survive the termination of this Supplement and the Base Indenture and the
payment of all amounts payable hereunder and thereunder.
Section 7.7. EXHIBITS. The following exhibits attached hereto
supplement the exhibits included in the Indenture.
EXHIBIT A: Form of Variable Funding Note
EXHIBIT B: Form of Increase Notice
EXHIBIT C: Form of Series 2003-1 Demand Note
EXHIBIT D: Form of Series 2003-1 Letter of Credit
EXHIBIT E: Form of Lease Payment Deficit Notice
EXHIBIT F: Form of Demand Notice
Section 7.8. RATIFICATION OF BASE INDENTURE. As supplemented by this
Supplement, the Base Indenture is in all respects ratified and confirmed and the
Base Indenture as so supplemented by this Supplement shall be read, taken, and
construed as one and the same instrument.
Section 7.9. COUNTERPARTS. This Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
Section 7.10. GOVERNING LAW. This Supplement shall be construed in
accordance with the law of the State of New York, and the obligations, rights
and remedies of the parties hereto shall be determined in accordance with such
law.
Section 7.11. AMENDMENTS. This Supplement may be modified or amended
from time to time in accordance with the terms of the Base Indenture.
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Section 7.12. DISCHARGE OF INDENTURE. Notwithstanding anything to the
contrary contained in the Base Indenture, no discharge of the Indenture pursuant
to Section 11.1(b) of the Base Indenture will be effective as to the Series
2003-1 Notes without the consent of the Series 2003-1 Noteholder.
Section 7.13. CAPITALIZATION OF AFC-II. AFC-II agrees that on the
Series 2003-1 Closing Date and on the date of any increase in the Series 2003-1
Maximum Invested Amount it will have capitalization in an amount equal to or
greater than 3% of the sum of (x) the Series 2003-1 Maximum Invested Amount and
(y) the invested amount of the Series 1998-1 Notes, Series 2000-1 Notes, Series
2000-2 Notes, Series 2000-3 Notes, the Series 2000-4 Notes, the Series 2001-1
Notes, the Series 2001-2 Notes, the Series 2002-1 Notes, the Series 2002-2
Notes, the Series 2002-3 Notes and the Series 2002-4 Notes.
Section 7.14. SERIES 2003-1 DEMAND NOTES. Other than pursuant to a
demand thereon pursuant to Section 3.5 of this Supplement, AFC-II shall not
reduce the amount of the Series 2003-1 Demand Notes or forgive amounts payable
thereunder so that the outstanding principal amount of the Series 2003-1 Demand
Notes after such reduction or forgiveness is less than the Series 2003-1 Letter
of Credit Liquidity Amount. AFC-II shall not agree to any amendment of the
Series 2003-1 Demand Notes without first satisfying the Rating Agency
Confirmation Condition and the Rating Agency Consent Condition.
Section 7.15. TERMINATION OF SUPPLEMENT. This Supplement shall cease
to be of further effect when all outstanding Series 2003-1 Notes theretofore
authenticated and issued have been delivered (other than destroyed, lost, or
stolen Series 2003-1 Notes which have been replaced or paid) to the Trustee for
cancellation and AFC-II has paid all sums payable hereunder and, if the Series
2003-1 Demand Note Payment Amount on the Series 2003-1 Letter of Credit
Termination Date was greater than zero, the Series 2003-1 Cash Collateral
Account Surplus shall equal zero and all amounts have been withdrawn from the
Series 2003-1 Cash Collateral Account in accordance with Section 3.8(h) of this
Supplement.
Section 7.16. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Trustee or the Purchaser, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
Section 7.17. WAIVER OF SETOFF. Notwithstanding any other provision of
this Supplement or any other agreement to the contrary, all payments to the
Purchaser hereunder shall be made without set-off or counterclaim.
Section 7.18. NOTICES. All notices, requests, instructions and demands
to or upon any party hereto to be effective shall be given (i) in the case of
AFC-II, the Administrator and the Trustee in the manner set forth in Section
13.1 of the Base Indenture and addressed as follows:
If to AFC-II:
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AESOP Funding II L.L.C.
c/o Lord Securities Corporation
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X Xxxxxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Administrator:
Avis Rent A Car System, Inc.
0 Xxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Treasurer
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Trustee:
The Bank of New York
c/o BNY Midwest Trust Company
0 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust/Structured Finance
Phone: (000) 000-0000
Fax: (000) 000-0000
and (ii) in the case of the Purchaser, in writing, and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand or three days after being deposited in the mail,
postage prepaid, in the case of facsimile notice, when received, or in the case
of overnight air courier, one Business Day after the date such notice is
delivered to such overnight courier, addressed as follows:
Cendant Corporation
0 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Treasurer
Phone: (000) 000-0000
Fax: (000) 000-0000
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IN WITNESS WHEREOF, each of the parties hereto have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
AESOP FUNDING II L.L.C.,
as Issuer
By: /s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
AVIS RENT A CAR SYSTEM, INC.,
as Administrator
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Assistant
Treasurer
CENDANT CORPORATION,
as Purchaser
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Treasurer
THE BANK OF NEW YORK (as successor in
interest to the corporate trust
administration of Xxxxxx Trust and
Savings Bank), as Trustee
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Agent
THE BANK OF NEW YORK, as Series 2003-1
Agent
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Agent
