[AESOP II Loan Agreement]
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LOAN AGREEMENT
dated as of July 30, 1997
among
AESOP LEASING CORP. II,
as Borrower,
AESOP LEASING CORP.,
as Permitted Nominee of the Borrower,
and
AESOP FUNDING II L.L.C.,
as Lender
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TABLE OF CONTENTS
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SECTION 1. CERTAIN DEFINITIONS......................................................... 3
SECTION 1.1. Certain Definitions........................................... 3
SECTION 1.2. Accounting and Financial Determinations....................... 3
SECTION 1.3. Cross References; Headings.................................... 3
SECTION 1.4. Interpretation................................................ 4
SECTION 2. LOAN COMMITMENT OF THE LENDER............................................... 4
SECTION 2.1. Loan Commitment............................................... 4
SECTION 2.2. Certain Waivers............................................... 5
SECTION 2.3. Conditions.................................................... 5
SECTION 2.4. Use of Proceeds............................................... 5
SECTION 3. LOAN NOTE; LOAN PROCEDURE;
RECORDKEEPING............................................................... 6
SECTION 3.1. Loan Note..................................................... 6
SECTION 3.2. Loan Procedure................................................ 6
SECTION 3.3. Recordkeeping................................................. 7
SECTION 4. INTEREST.................................................................... 7
SECTION 4.1. Interest Rate on Loans........................................ 7
SECTION 4.2. Supplemental Interest......................................... 7
SECTION 4.3. Loan Interest Payment Dates................................... 8
SECTION 4.4. Setting of Rates.............................................. 8
SECTION 4.5. Carrying Charges.............................................. 8
SECTION 5. REPAYMENT OF LOAN PRINCIPAL AMOUNT.......................................... 9
SECTION 5.1. Mandatory Repayment of Monthly
Loan Principal Amount of Loans................................ 9
SECTION 5.2. Voluntary Prepayments of Loan
Principal Amount.............................................. 10
SECTION 6. MAKING OF PAYMENTS.......................................................... 10
SECTION 6.1. Making of Payments............................................ 10
SECTION 6.2. Due Date Extension............................................ 11
SECTION 6.3. Application of Sale Proceeds.................................. 11
SECTION 6.4. Payment Deficits.............................................. 12
SECTION 7. LOAN COLLATERAL SECURITY.................................................... 12
SECTION 7.1. Grant of Security Interest.................................... 12
SECTION 7.2. Certificates of Title......................................... 14
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SECTION 7.3. Release of AESOP II Loan Collateral........................... 14
SECTION 7.4. Change of Location or Name.................................... 16
SECTION 7.5. Deliveries; Further Assurances................................ 16
SECTION 7.6. [RESERVED].................................................... 17
SECTION 7.7. [RESERVED].................................................... 17
SECTION 7.8. AESOP II Segregated Account................................... 17
SECTION 8. REPRESENTATIONS AND WARRANTIES.............................................. 17
SECTION 8.1. Organization; Ownership; Power;
Qualification................................................. 18
SECTION 8.2. Authorization; Enforceability................................. 18
SECTION 8.3. Compliance.................................................... 18
SECTION 8.4. [RESERVED].................................................... 19
SECTION 8.5. Litigation.................................................... 19
SECTION 8.6. Liens......................................................... 19
SECTION 8.7. Employee Benefit Plans........................................ 19
SECTION 8.8. Investment Company Act........................................ 19
SECTION 8.9. Regulations G, T, U and X..................................... 20
SECTION 8.10. Proceeds...................................................... 20
SECTION 8.11. Business Locations; Trade Names............................... 20
SECTION 8.12. Taxes......................................................... 20
SECTION 8.13. Governmental Authorizations................................... 21
SECTION 8.14. Compliance with Laws.......................................... 21
SECTION 8.15. Eligible Vehicles............................................. 22
SECTION 8.16. Manufacturer Programs......................................... 22
SECTION 8.17. Absence of Default............................................ 22
SECTION 8.18. No Security Interest; Title to
Assets........................................................ 22
SECTION 8.19. Accuracy of Information....................................... 23
SECTION 9. AFFIRMATIVE COVENANTS....................................................... 23
SECTION 9.1. Corporate Existence; Foreign
Qualification................................................. 23
SECTION 9.2. Books, Records and Inspections................................ 24
SECTION 9.3. Insurance..................................................... 24
SECTION 9.4. Manufacturer Programs......................................... 25
SECTION 9.5. Reporting Requirements........................................ 25
SECTION 9.6. Payment of Taxes; Removal of
Liens......................................................... 26
SECTION 9.7. Business...................................................... 27
SECTION 9.8. Maintenance of the Vehicles................................... 27
SECTION 9.9. Maintenance of Separate Existence............................. 27
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SECTION 9.10. Manufacturer Payments; Sales
Proceeds...................................................... 30
SECTION 9.11. Maintenance of Properties..................................... 30
SECTION 9.12. Verification of Title......................................... 31
SECTION 9.13. [RESERVED].................................................... 31
SECTION 9.14. Delivery of Information....................................... 31
SECTION 9.15. Preferred Stock............................................... 31
SECTION 9.16. Vehicles...................................................... 32
SECTION 9.17. Assignments................................................... 32
SECTION 9.18. Notation of Liens............................................. 32
SECTION 10. NEGATIVE COVENANTS.......................................................... 33
SECTION 10.1. Liens......................................................... 33
SECTION 10.2. Other Indebtedness............................................ 33
SECTION 10.3. Mergers, Consolidations....................................... 33
SECTION 10.4. Sales of Assets............................................... 33
SECTION 10.5. Acquisition of Assets......................................... 33
SECTION 10.6. Dividends, Officers' Compensation, etc........................ 33
SECTION 10.7. Organizational Documents...................................... 33
SECTION 10.8. Investments................................................... 34
SECTION 10.9. Regulations G, T, U and X..................................... 34
SECTION 10.10. Other Agreements.............................................. 34
SECTION 10.11. Use of Vehicles............................................... 34
SECTION 10.12. Use of Proceeds............................................... 34
SECTION 10.13. Limitations on the Acquisition of
Certain Vehicles.............................................. 34
SECTION 11. CONDITIONS.................................................................. 35
SECTION 11.1. Initial Loans................................................. 35
SECTION 11.2. All Loans..................................................... 37
SECTION 12. LOAN EVENTS OF DEFAULT AND THEIR EFFECT..................................... 38
SECTION 12.1. AESOP II Loan Events of Default............................... 38
SECTION 12.2. Effect of AESOP II Loan Event of
Default or Liquidation Event of
Default....................................................... 40
SECTION 12.3. Rights of Trustee Upon Liquidation Event of Default and
Non-Performance of Certain Covenants.......................... 40
SECTION 12.4. Application of Proceeds....................................... 42
SECTION 13. GENERAL..................................................................... 42
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SECTION 13.1. Waiver; Amendments............................................ 42
SECTION 13.2. Confirmations................................................. 43
SECTION 13.3. Notices....................................................... 43
SECTION 13.4. Taxes......................................................... 43
SECTION 13.5. Indemnification............................................... 43
SECTION 13.6. Bankruptcy Petition........................................... 45
SECTION 13.7. Submission to Jurisdiction.................................... 46
SECTION 13.8. Governing Law................................................. 46
SECTION 13.9. JURY TRIAL.................................................... 47
SECTION 13.10. Successors and Assigns........................................ 47
SECTION 13.11. Tax Treatment of Loans........................................ 47
SECTION 13.12. No Recourse................................................... 47
SECTION 13.13. Consent to Amendment of Indenture
by Preferred Stockholders..................................... 47
EXHIBITS AND SCHEDULES
EXHIBIT A FORM OF LOAN NOTE
EXHIBIT B-1 FORM OF LOAN REQUEST
EXHIBIT B-2 FORM OF LOAN REQUEST RESPONSE
EXHIBIT C FORM OF PAYMENT DEFICIT NOTICE
SCHEDULE 8.11 BUSINESS LOCATIONS, TRADE NAMES
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of July 30, 1997 (the
"Agreement"), is entered into between AESOP LEASING CORP. II, a Delaware
corporation ("AESOP Leasing II" or the "Borrower"), AESOP LEASING CORP., a
Delaware corporation ("Original AESOP"), as Permitted Nominee of the Borrower,
and AESOP FUNDING II L.L.C., a Delaware limited liability company ("AFC-II" or
the "Lender").
BACKGROUND
AESOP Leasing II intends to purchase and finance Program
Vehicles (such capitalized term, together with all other capitalized terms
used herein, shall have the meaning assigned thereto in Section 1.1) that it
will then lease to ARAC and certain other Eligible Rental Car Companies for
use in their respective daily vehicle rental businesses pursuant to the AESOP
II Operating Lease, and AESOP Leasing II desires to obtain financing for such
Program Vehicles from the Lender.
AESOP Leasing II has appointed Original AESOP pursuant to
the Original AESOP Nominee Agreement to act as nominee titleholder for the
sole purpose of holding registered title to Vehicles acquired by AESOP Leasing
II.
The Lender is willing to make Loans to AESOP Leasing II on
the terms and conditions set forth herein.
The Lender will utilize the proceeds of one or more Series
of Notes issued from time to time pursuant to the Indenture to make Loans to
AESOP Leasing II hereunder and to AESOP Leasing I under the AESOP I Loan
Agreements, in each case to the extent Vehicles eligible to be financed
hereunder and thereunder are available for financing and, in certain other
circumstances, to pay amortizing Notes. In connection therewith, the Lender
will assign its rights hereunder and under the AESOP I Loan Agreements to the
Trustee to secure the Lender's obligations to the Secured Parties.
The Loans made to AESOP Leasing II hereunder will be secured
by all of the right, title and interest
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of AESOP Leasing II and Original AESOP in and to (a) the Program Vehicles
leased under the AESOP II Operating Lease, (b) the Manufacturer Programs as
they relate to such Program Vehicles, (c) all payments under insurance
policies or warranties relating to such Program Vehicles, (d) all payments due
from the Lessees and ARC under the AESOP II Operating Lease and (e) all
proceeds of the foregoing.
Accordingly, in consideration of the mutual agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to the terms and
conditions hereof, the parties hereto agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
SECTION 1.1. Certain Definitions. As used in this Agreement
and unless the context requires a different meaning, capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in (i)
the Definitions List attached as Schedule I to the Base Indenture, dated as of
July 30, 1997 (as such agreement may be amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms, the "Base
Indenture"), between AFC-II and Xxxxxx Trust and Savings Bank, as trustee (the
"Trustee"), as in effect on the date hereof and as such Schedule I may be
amended or modified from time to time in accordance with the terms of the Base
Indenture (the "Definitions List").
SECTION 1.2. Accounting and Financial Determinations. Where
the character or amount of any asset or liability or item of income or expense
is required to be determined, or any accounting computation is required to be
made, for the purpose of this Agreement, such determination or calculation
shall be made, to the extent applicable and except as otherwise specified in
this Agreement, in accordance with GAAP. When used herein, the term "financial
statement" shall include the notes and schedules thereto.
SECTION 1.3. Cross References; Headings. The words "hereof",
"herein" and "hereunder" and words of a similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. Section, Schedule and
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Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified. Any
reference in any Section or definition to any clause is, unless otherwise
specified, to such clause of such Section or definition. The various headings
in this Agreement are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or any provision hereof.
SECTION 1.4. Interpretation. In this Agreement, unless the
context otherwise requires:
(i) the singular includes the plural and
vice versa;
(ii) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors
and assigns are permitted by this Agreement, and reference to any
Person in a particular capacity only refers to such Person in such
capacity;
(iii) reference to any gender includes
the other gender;
(iv) reference to any Requirement of Law means such
Requirement of Law as amended, modified, codified or reenacted, in
whole or in part, and in effect from time to time;
(v) "including" (and with correlative meaning
"include") means including without limiting the generality of any
description preceding such term; and
(vi) with respect to the determination of any
period of time, "from" means "from and including" and "to" and
"until" means "to but excluding".
SECTION 2. LOAN COMMITMENT OF THE LENDER.
SECTION 2.1. Loan Commitment. Subject to the terms and
conditions of this Agreement, including Section 12.2 and further subject to
the availability of funds to the Lender pursuant to the Indenture, the Lender
agrees to make loans hereunder (the "Loans") to AESOP Leasing II
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from time to time on or after the Initial Closing Date and prior to the Loan
Commitment Termination Date; provided, that on any one date the Loan Principal
Amount of all Loans made hereunder to AESOP Leasing II shall not exceed the
AESOP II Loan Agreement Borrowing Base. The foregoing commitment of the Lender
is called the "Loan Commitment".
SECTION 2.2. Certain Waivers. AESOP Leasing II waives
presentment, demand for payment, notice of dishonor and protest, notice of the
creation of any of its Liabilities and all other notices whatsoever to AESOP
Leasing II with respect to such Liabilities except notices required under
Section 12.1. The obligations of AESOP Leasing II under this Agreement and the
Loan Note shall not be affected by (i) the failure of the Trustee or the
Lender or the holder of the Loan Note or any of AESOP Leasing II's Liabilities
to assert any claim or demand or to exercise or enforce any right, power or
remedy against AESOP Leasing II or the AESOP II Loan Collateral or otherwise,
(ii) any extension or renewal for any period (whether or not longer than the
original period) or exchange of any of AESOP Leasing II's Liabilities or the
release or compromise of any obligation of any nature of any Person with
respect thereto, (iii) the surrender, release or exchange of all or any part
of any property (including the AESOP II Loan Collateral) securing payment and
performance of any of AESOP Leasing II's Liabilities or the compromise or
extension or renewal for any period (whether or not longer than the original
period) of any obligations of any nature of any Person with respect to any
such property, and (iv) any other act, matter or thing which would or might,
in the absence of this provision, operate to release, discharge or otherwise
prejudicially affect the obligations of AESOP Leasing II.
SECTION 2.3. Conditions. The making of each Loan hereunder
is subject to the satisfaction of the applicable conditions set forth in
Section 11.
SECTION 2.4. Use of Proceeds. AESOP Leasing II shall apply
the funds received by it pursuant to Section 2.1 hereof solely to purchase
Eligible Vehicles that are Program Vehicles that it will lease to ARAC and
certain other Eligible Rental Car Companies pursuant to the AESOP II Operating
Lease for use in their respective daily vehicle rental businesses. Only
Eligible Vehicles
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that are Program Vehicles shall be eligible to be purchased by AESOP Leasing
II from the proceeds of the Loans made hereunder. All references in this
Agreement to "Vehicle" or "Vehicles" (other than such references in the
recital) shall refer to a Program Vehicle or Program Vehicles, respectively.
SECTION 3. LOAN NOTE; LOAN PROCEDURE;
RECORDKEEPING.
SECTION 3.1. Loan Note. The Loans made hereunder shall be
evidenced by a promissory note issued by AESOP Leasing II (herein, as from
time to time supplemented, extended or replaced, the "Loan Note"),
substantially in the form set forth in Exhibit A, with appropriate insertions,
dated as of the Initial Closing Date, payable to the order of the Lender and
assigned to the Trustee pursuant to the Indenture.
SECTION 3.2. Loan Procedure. AESOP Leasing II shall deliver
a Loan Request to the Lender no later than 4:00 p.m., New York City time, on a
day that is not less than one, nor more than five, Business Days prior to the
proposed Borrowing Date (which shall be a Business Day). Each Loan Request
shall be irrevocable, and shall specify (i) the principal amount of the
proposed Loan, (ii) the Borrowing Date of the proposed Loan, (iii) a summary
of the Vehicles being financed (including for Vehicles subject to the GM
Repurchase Program, the Designated Period for each such Vehicle), (iv) that
each Vehicle is a Program Vehicle, (v) the VIN for each Vehicle to be
financed, (vi) in the case of new Vehicles, the total Capitalized Cost thereof
as of the Borrowing Date, and (vii) in the case of Initial Vehicles, the Net
Book Value of such Vehicles as of the first day of the Related Month. The
aggregate requested borrowings hereunder on any Business Day shall be for an
initial aggregate principal amount that, together with the Loan Principal
Amount of Loans outstanding hereunder and under the AESOP I Loan Agreements on
such date, shall not exceed the principal amount of Notes outstanding on such
date. On the terms and subject to the conditions of this Agreement, on or
before 2:00 p.m., New York City time, on the Borrowing Date specified in the
Loan Request, the Lender shall transfer same day or immediately available
funds to AESOP Leasing II's account specified in such Loan Request in the
amount specified in such Loan Request. Each Loan
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Request made pursuant to this Section 3.2 shall constitute AESOP Leasing II's
representation and warranty that all of the applicable conditions contained in
Section 11 will, after giving effect to such Loan, be satisfied.
SECTION 3.3. Recordkeeping. The Lender shall record in its
records, or at its option on the schedule attached to the Loan Note, the date
and principal amount of each Loan made hereunder, each repayment thereof, and
the other information provided for thereon. The aggregate unpaid Loan
Principal Amount so recorded shall be rebuttable presumptive evidence of the
Loan Principal Amount owing and unpaid on the Loan Note. The failure to so
record any such information or any error in so recording any such information
shall not, however, limit or otherwise affect the actual obligations of AESOP
Leasing II hereunder or under the Loan Note to repay the Loan Principal
Amount, together with all Loan Interest accruing thereon.
SECTION 4. INTEREST.
SECTION 4.1. Interest Rate on Loans. AESOP Leasing II hereby
promises to pay interest on the unpaid principal amount of each Loan made to
it hereunder (the "Loan Interest"), for each Loan Interest Period commencing
on the date such Loan is made to AESOP Leasing II until such Loan is paid in
full at a rate not less than the Lender's Carrying Cost Interest Rate for the
applicable Loan Interest Period. The applicable rate of Loan Interest on each
Loan shall be specified in a Loan Request Response provided by the Lender to
AESOP Leasing II on the date a Loan Request is delivered; provided that if the
Lender's Carrying Cost Interest Rate for the applicable Loan Interest Period
is higher than the rate of Loan Interest specified in the Loan Request
Response, Loan Interest payable shall be determined using the higher rate.
SECTION 4.2. Supplemental Interest. AESOP Leasing II agrees
to pay to the Lender, as an additional interest payment, an amount equal to
the product of (A) the applicable Loan Agreement's Share as of the beginning
of each Loan Interest Period times (B) the sum of (i) the Supplemental
Carrying Charges for such Loan Interest Period, minus (ii) any accrued
earnings on Permitted Investments in the Collection Account which earnings are
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available for distribution on the last Business Day of such Loan Interest
Period (the product of the amounts described in clauses (A) and (B) above,
"Supplemental Interest").
SECTION 4.3. Loan Interest Payment Dates. Accrued Loan
Interest on each Loan made hereunder shall be payable on each Payment Date
(with respect to the related Loan Interest Period), upon any prepayment and at
maturity, commencing with the first of such dates to occur after the date such
Loan is made. After maturity (whether by acceleration or otherwise), all
accrued Loan Interest and Supplemental Interest on all Loans made hereunder
shall be payable on demand. Supplemental Interest in respect of each Loan
Interest Period shall be payable on each Payment Date and upon any prepayment
and at maturity. All calculations of Loan Interest and Supplemental Interest
shall be based on a 360-day year and the actual number of days elapsed in the
related Loan Interest Period.
SECTION 4.4. Setting of Rates. The Lender's Carrying Cost
Interest Rate and Supplemental Carrying Charges used hereunder to compute Loan
Interest due on each Loan made hereunder on each Payment Date and the
Supplemental Interest due on each Payment Date shall be calculated from time
to time by the Lender in accordance with this Agreement (and written notice
thereof shall be provided to AESOP Leasing II not later than ten days prior to
the applicable Payment Date). Such calculation shall be conclusive, absent
demonstrable error.
SECTION 4.5. Carrying Charges. AESOP Leasing II agrees to
pay to the Lender on each Payment Date an amount equal to the product of (A)
the applicable Loan Agreement's Share as of such Payment Date times (B) all
accrued and unpaid Carrying Charges that are accrued and unpaid as of each
such Payment Date.
SECTION 5. REPAYMENT OF LOAN PRINCIPAL AMOUNT.
SECTION 5.1. Mandatory Repayment of Monthly Loan Principal
Amount of Loans. On each Payment Date, AESOP Leasing II shall pay to the
Lender, as a repayment of the Loan Principal Amount, an amount equal to the
product of (A) the applicable Loan Payment Allocation Percentage as of the
beginning of the Related Month times
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(B) the sum, without duplication, of (i) the accrued Depreciation Charges for
the Related Month for all Vehicles (a) leased under the AESOP II Operating
Lease as of the end of the Related Month or (b) described in clauses (ii) or
(iii) of this Section 5.1, plus (ii) the aggregate Termination Values (each as
of the date on which such Vehicle becomes an Ineligible Vehicle, a Casualty or
is sold, as applicable) of all the Vehicles leased under the AESOP II
Operating Lease at any time during such Related Month that, without double
counting, while so leased either became Ineligible Vehicles, suffered a
Casualty or were sold by or on behalf of AESOP Leasing II (it being understood
that AESOP Leasing II has agreed to sell, or cause to be sold, Vehicles only
in a manner consistent with the provisions hereof and of the Related
Documents) to any Person other than to a Manufacturer pursuant to a
Manufacturer Program or to a third party pursuant to an auction conducted
through a Guaranteed Depreciation Program, in each case, during the Related
Month, plus (iii) the aggregate Termination Values (each as of the applicable
Turnback Date) of all Vehicles leased under the AESOP II Operating Lease that
while so leased were returned to a Manufacturer pursuant to a Manufacturer
Program with respect to which either (x) the Repurchase Price has been paid by
such Manufacturer and/or the related auction dealers during the Related Month
or (y) a Manufacturer Event of Default has occurred, minus (iv) an amount
equal to the sum of (1) any amounts received by the Lender or the Trustee, or
deposited into the Collection Account, during the Related Month representing
(a) Repurchase Prices for repurchases of Vehicles leased under the AESOP II
Operating Lease at the applicable Turnback Date or (b) the sales proceeds
(including amounts paid by a Manufacturer as a result of the sale of a Vehicle
during the Related Month outside such Manufacturer's Manufacturer Program but
excluding amounts released to AESOP Leasing II pursuant to the last sentence
of Section 5.2(a) of the Base Indenture) for sales of Vehicles leased under
the AESOP II Operating Lease at the time of such sale to a third party other
than (x) to a Manufacturer pursuant to a Repurchase Program or (y) through an
auction dealer pursuant to a Guaranteed Depreciation Program and (2) any
amounts received in the Related Month and applied to the Loan Principal Amount
pursuant to Section 6.3 (the product of the amounts described in clauses (A)
and (B) above, the "Monthly Loan Principal Amount"). Unless otherwise
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required to be paid sooner pursuant to the terms of this Agreement, the entire
unpaid Loan Principal Amount of the Loans made hereunder shall be payable on
the last occurring Series Termination Date with respect to the Notes. All
Loans made hereunder shall be due on the maturity date therefor, whether by
acceleration or otherwise. Solely for determining the amounts payable under
this Section 5.1, with respect to a Vehicle that became a Casualty during the
Related Month as a result of such Vehicle being held beyond the stated
expiration date of the applicable Repurchase Period, such Vehicle will be
deemed to have become a Casualty upon such expiration date.
SECTION 5.2. Voluntary Prepayments of Loan Principal Amount.
AESOP Leasing II may from time to time prepay the principal amount with
respect to any Loans made hereunder, in whole or in part, on any date;
provided that, except for any prepayment made pursuant to Section 6.3 hereof
or any payment made to comply with Section 10.13 hereof, AESOP Leasing II
shall give the Lender and the Trustee not less than one (1) Business Day's
prior notice of any such prepayment, specifying the date and amount of such
prepayment, and, if AESOP Leasing II is requesting a release of Vehicles from
the Lien hereof pursuant to Section 7.3, the Vehicles to which such prepayment
relates.
SECTION 6. MAKING OF PAYMENTS.
SECTION 6.1. Making of Payments. All payments of the Monthly
Loan Principal Amount or Loan Interest hereunder, all prepayments of the Loan
Principal Amount hereunder, and all payments of Supplemental Interest,
Carrying Charges and of all other Liabilities shall be made by AESOP Leasing
II to, or for the account of, the Lender in immediately available Dollars,
without setoff, counterclaim or deduction of any kind. All such payments shall
be made to the Collection Account (or such other account as the Lender may
from time to time specify with the consent of the Trustee), not later than
11:00 a.m., New York City time, on the date due, and funds received after that
hour shall be deemed to have been received by the Lender on the next following
Business Day. The Lender hereby specifies that all (i) payments with respect
to Vehicles leased under the AESOP II Operating Lease made by the
Manufacturers and related auction deal-
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ers under the Manufacturer Programs, (ii) amounts representing the proceeds
from sales of Vehicles leased under the AESOP II Operating Lease (including
amounts paid by a Manufacturer as a result of the sale of such Vehicle outside
such Manufacturer's Manufacturer Program) to third parties (other than under
any related Manufacturer Program) and (iii) payments with respect to any other
AESOP II Loan Collateral shall be deposited in the Collection Account;
provided, however, that, subject to Section 5.2 of the Base Indenture,
insurance proceeds and warranty payments with respect to Vehicles leased under
the AESOP II Operating Lease will be deposited in the Collection Account only
if an Amortization Event or a Potential Amortization Event shall have occurred
and be continuing.
SECTION 6.2. Due Date Extension. If any (i) payment of the
Monthly Loan Principal Amount or Loan Interest hereunder or (ii) prepayments
of the Loan Principal Amount or Supplemental Interest with respect to any
Loans made hereunder falls due on a day which is not a Business Day, then such
due date shall be extended to the next following Business Day and Loan
Interest or Supplemental Interest, as applicable, shall accrue through such
Business Day.
SECTION 6.3. Application of Sale Proceeds. AESOP Leasing II
agrees that an amount equal to the product of (A) the applicable Loan Payment
Allocation Percentage as of the beginning of the Related Month times (B) the
sum of (i) all payments made by the Manufacturers and related auction dealers
under the Manufacturer Programs with respect to Vehicles leased under the
AESOP II Operating Lease, plus (ii) proceeds from the sale of Vehicles leased
under the AESOP II Operating Lease to third parties (other than to the
Manufacturer or pursuant to a Guaranteed Depreciation Program), in each case
deposited in the Collection Account on any date, shall be applied, upon
receipt thereof in the Collection Account, to prepay the Loan Principal
Amount.
SECTION 6.4. Payment Deficits. At or before 11:30 a.m., New
York City time, on each Payment Date, AESOP Leasing II shall notify the
Trustee and the related Enhancement Provider of the amount of the Lease
Payment Deficit, if any, with respect to each Series of Notes
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issued pursuant to the Indenture, such notification to be in the form of
Exhibit C.
SECTION 7. LOAN COLLATERAL SECURITY.
SECTION 7.1. Grant of Security Interest. (a) As security for
the prompt and complete payment and performance of its Liabilities, each of
AESOP Leasing II and Original AESOP hereby pledges, hypothecates, assigns,
transfers and delivers to the Lender, and hereby grants to the Lender, a
continuing, security interest in, all of the following, whether now owned or
hereafter acquired:
(i) all Vehicles leased under the AESOP II
Operating Lease, and all Certificates of Title with respect thereto;
(ii) all right, title and interest of each of AESOP
Leasing II and Original AESOP in and to each Manufacturer Program,
including any amendments thereof, and all monies due and to become
due under or in connection with each such Manufacturer Program
whether payable as Vehicle Repurchase Prices, auction sales proceeds,
fees, expenses, costs, indemnities, insurance recoveries, damages for
breach of the Manufacturer Programs or otherwise (but excluding all
incentive payments payable in respect of purchases of vehicles under
the Manufacturer Programs) and all rights to compel performance and
otherwise exercise remedies thereunder;
(iii) all right, title and interest of AESOP
Leasing II and Original AESOP in, to and under the AESOP II Operating
Lease and the related Lessee Agreements (other than any right, title
and interest of AESOP Leasing II or Original AESOP with respect to
any Excluded Payments) including, without limitation, all monies due
and to become due to AESOP Leasing II or Original AESOP from any of
the Lessees or the Guarantor or any of their assigns under or in
connection with the AESOP II Operating Lease and the related Lessee
Agreements, whether payable as principal, interest, rent, guaranty
payments (other than guaranty payments with respect to any Excluded
Payments provided to AESOP Leasing II or Original AESOP under the
AESOP II Operating Lease), fees, expenses, costs, indemnities,
insurance recoveries,
12
damages for the breach of any of the AESOP II Operating Lease and the
related Lessee Agreements or otherwise, and all rights, remedies,
powers, privileges and claims of each of AESOP Leasing II and
Original AESOP against any other party under or with respect to the
AESOP II Operating Lease and the related Lessee Agreements (whether
arising pursuant to the terms of the AESOP II Operating Lease or the
related Lessee Agreements or otherwise available to AESOP Leasing II
or Original AESOP at law or in equity), the right to enforce the
AESOP II Operating Lease and the related Lessee Agreements as
provided herein and to give or withhold any and all consents,
requests, notices, directions, approvals, extensions or waivers under
or with respect to the AESOP II Operating Lease and the related
Lessee Agreements or the obligations of any party thereunder, and all
collateral pledged under the AESOP II Operating Lease;
(iv) all right, title and interest of each of AESOP
Leasing II and Original AESOP in, to and under the Vehicle Title and
Lienholder Nominee Agreements, the HFS Indemnity and the
Administration Agreement, including any amendments thereof, and all
monies due and to become due thereunder, whether payable as fees,
expenses, costs, indemnities, insurance recoveries, damages for the
breach of any of the Vehicle Title and Lienholder Nominee Agreements,
the HFS Indemnity and the Administration Agreement or otherwise and
all rights to compel performance and otherwise exercise remedies
thereunder;
(v) all payments under insurance policies (whether
or not the Lessor, the Lender or the Trustee is named as the loss
payee thereof) or any warranty payable by reason of loss or damage
to, or otherwise with respect to, any of the Vehicles leased under
the AESOP II Operating Lease;
(vi) all right, title and interest of each of AESOP
Leasing II and Original AESOP in and to any proceeds from the sale of
Vehicles leased under the AESOP II Operating Lease, including all
monies due in respect of such Vehicles under the AESOP II Operating
Lease, whether payable as the purchase
13
price of such Vehicles, auction sales proceeds, or as fees, expenses,
costs, indemnities, insurance recoveries, or otherwise;
(vii) any assignment of a security interest in any
Vehicle leased under the AESOP II Operating Lease granted to AESOP
Leasing II or Original AESOP pursuant to the AESOP II Operating Lease
or otherwise, and all Certificates of Title with respect to each such
Vehicle; and
(viii) all products and proceeds of all of the
foregoing;
provided, however, that the AESOP II Segregated Account shall not be subject
to the grant of a security interest by each of AESOP Leasing II and Original
AESOP pursuant to this Section 7.1(a) and shall not constitute part of the
AESOP II Loan Collateral.
(b) To secure the AFC-II Obligations, each of AESOP Leasing
II and Original AESOP hereby pledges, hypothecates, assigns, transfers and
delivers to the Trustee, on behalf of the Secured Parties, and hereby grants
to the Trustee, on behalf of the Secured Parties, a continuing, first priority
security interest in, all of the AESOP II Loan Collateral, whether now owned
or hereafter acquired; provided, however, that in no event shall the Trustee's
claim against such collateral exceed the outstanding obligations of AESOP
Leasing II to the Lender hereunder. Upon the occurrence of a Liquidation Event
of Default or a Limited Liquidation Event of Default and subject to the
provisions of the Related Documents and the proviso contained in the
immediately preceding sentence, the Trustee shall have all of the rights and
remedies of a secured party, including, without limitation, the rights and
remedies granted under the Uniform Commercial Code.
SECTION 7.2. Certificates of Title. AESOP Leasing II shall
take, or shall cause to be taken, such action as shall be necessary to submit
all of the Certificates of Title for Vehicles leased under the AESOP II
Operating Lease (other than Certificates of Title with respect to Vehicles
titled in the states of Nebraska, Ohio and Oklahoma) to the appropriate state
authority for notation of the Trustee's lien thereon. The original
14
Certificates of Title shall be held by the Administrator, as agent for AESOP
Leasing II, in trust for the benefit of the Lender and the Trustee.
SECTION 7.3. Release of AESOP II Loan Collateral. The Lender
shall request the Trustee in writing to release its Lien on a Vehicle leased
under the AESOP II Operating Lease and the Certificate of Title therefor upon
the earliest of (i) in the case of a Vehicle subject to a Guaranteed
Depreciation Program, the date of the sale of such Vehicle by an auction
dealer to a third party, and in the case of a Vehicle subject to a Repurchase
Program, the Turnback Date for such Vehicle, (ii) voluntary prepayment in full
of the principal amount of the Loan to which such Vehicle relates in
accordance with Section 5.2, as noted in records maintained by the Trustee,
(iii) receipt of proceeds from an ordinary course sale of such Vehicle in an
amount at least equal to the Termination Value of such Vehicle, provided,
however, that if such ordinary course sale occurs during the Repurchase Period
with respect to a Vehicle, AESOP Leasing II shall only sell or permit a sale
of such Vehicle for a purchase price, together with any amounts payable by a
Manufacturer as a result of or in connection with such sale, equal to or
greater than the Repurchase Price that it would have received if it had turned
back such Vehicle to the Manufacturer and (iv) receipt of proceeds from an
ordinary course sale of a Vehicle subject to a Casualty in an amount at least
equal to the Termination Value of such Vehicle. With respect to Vehicles
leased under the AESOP II Operating Lease, from and after the earliest of (a)
in the case of a Vehicle subject to a Guaranteed Depreciation Program, the
date of the sale of such Vehicle by an auction dealer to a third party, and in
the case of a Vehicle subject to a Repurchase Program, the Turnback Date for
such Vehicle, (b) a prepayment of the principal amount of the Loan to which
such Vehicle relates and (c) receipt of the purchase price for a Vehicle by
AESOP Leasing II, or by the Trustee on the Lender's behalf, in either case in
an amount at least equal to the Termination Value of such Vehicle, such
Vehicle and such Certificate of Title shall be deemed to be released from the
Lien of this Agreement, and the Lender and the Trustee shall execute such
documents and instruments as AESOP Leasing II may reasonably request
(including a power of attorney of the Trustee appointing the Administrator to
act as the agent of the Trustee in
15
releasing the Lien of the Trustee on Vehicles turned back or sold pursuant to
the provisions of this Section 7.3; which power of attorney shall be revocable
by the Lender or the Trustee at any time following the occurrence of a
Liquidation Event of Default), at AESOP Leasing II's expense, to evidence
and/or accomplish such release.
SECTION 7.4. Change of Location or Name. So long as any of
its Liabilities shall remain outstanding or the Lender shall continue to have
any Loan Commitment, neither AESOP Leasing II nor Original AESOP will change
(i) the location of its principal place of business, chief executive office,
major executive office, chief place of business or its records concerning its
business and financial affairs, or (ii) its legal name or the name under or by
which it conducts its business, in each case without first giving the Trustee
and the Lender at least 30 days' advance written notice thereof and having
taken any and all action required to maintain and preserve the first priority
perfected Lien of the Lender or the Trustee on the AESOP II Loan Collateral
(except, as to perfection and priority, with respect to Vehicles titled in
the states of Nebraska, Ohio and Oklahoma), free and clear of any Lien
whatsoever except for Permitted Liens; provided, however, that notwithstanding
the foregoing, neither AESOP Leasing II nor Original AESOP shall change the
location of its principal place of business, chief executive office, major
executive office, chief place of business or its records concerning its
business and financial affairs to any place outside the United States of
America.
SECTION 7.5. Deliveries; Further Assurances. Each of AESOP
Leasing II and Original AESOP agrees that it will, at its sole expense, (i)
immediately deliver or cause to be delivered to the Lender (or the Trustee on
behalf of the Secured Parties), in due form for transfer (i.e., endorsed in
blank), all securities, chattel paper, instruments and documents, if any, at
any time representing all or any of the AESOP II Loan Collateral, other than
the Certificates of Title which shall be delivered to the Lender or the
Trustee, as applicable, after the occurrence of a Liquidation Event of
Default, if such delivery is reasonably necessary or appropriate to perfect or
protect the Lender's (or the Trustee's on behalf of the Secured Parties)
security interest in such AESOP II Loan Collateral, and (ii) execute and
deliver, or
16
cause to be executed and delivered, to the Lender or the Trustee in due form
for filing or recording (and pay the cost of filing or recording the same in
all public offices reasonably deemed necessary or advisable by the Lender or
the Trustee), such assignments, security agreements, mortgages, consents,
waivers, financing statements and other documents, and do such other acts and
things, all as may from time to time be reasonably necessary or desirable to
establish and maintain to the satisfaction of the Lender (or the Trustee) a
valid perfected Lien on and security interest in all of the AESOP II Loan
Collateral (except, as to perfection, with respect to Vehicles titled in the
states of Nebraska, Ohio and Oklahoma) now or hereafter existing or acquired
(free of all other Liens whatsoever other than Permitted Liens) to secure
payment and performance of its Liabilities.
SECTION 7.6. [RESERVED].
SECTION 7.7. [RESERVED].
SECTION 7.8. AESOP II Segregated Account. AESOP Leasing II
shall establish and maintain in its name an account entitled "AESOP Leasing
Corp. II Account" (the "AESOP II Segregated Account"). The AESOP II Segregated
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 AESOP II Segregated Account. If the AESOP
II Segregated Account is not maintained in accordance with the previous
sentence, then within 10 Business Days after obtaining knowledge of such fact,
AESOP Leasing II shall establish a new AESOP II Segregated Account which
complies with such sentence and transfer into the new AESOP II Segregated
Account all amounts then on deposit in the non-qualifying AESOP II Segregated
Account. The parties hereto acknowledge and agree that the monies held in the
AESOP II Segregated Account from time to time (i) are property of AESOP
Leasing II, (ii) are not being pledged to secure any obligation to, or
otherwise held in trust for, the Lender or any of the persons specified in
this Section 7.8 and (iii) are available to satisfy the claims of creditors of
AESOP Leasing II generally; provided, however, that nothing contained herein
shall affect the rights of the Lender to
17
pursue all legal remedies available to it with respect to any amounts payable
by AESOP Leasing II hereunder.
SECTION 8. REPRESENTATIONS AND WARRANTIES. To induce the
Lender to enter into this Agreement and to make Loans hereunder, AESOP Leasing
II represents and warrants to the Lender as to itself, and Original AESOP
represents and warrants to the Lender as to itself, as of the Initial Closing
Date, as of the date of each Loan made hereunder and as of each Series Closing
Date that:
SECTION 8.1. Organization; Ownership; Power; Qualification.
Each of AESOP Leasing II and Original AESOP is (i) a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) has the power and authority to own its
properties and to carry on its business as now being and hereafter proposed to
be conducted and (iii) is duly qualified, in good standing and authorized to
do business in each jurisdiction in which the character of its properties or
the nature of its businesses requires such qualification or authorization.
SECTION 8.2. Authorization; Enforceability. Each of AESOP
Leasing II and Original AESOP has the corporate power and has taken all
necessary corporate action to authorize it to execute, deliver and perform
this Agreement and each of the other Related Documents to which it is a party
in accordance with their respective terms, and to consummate the transactions
contemplated hereby and thereby. This Agreement has been duly executed and
delivered by each of AESOP Leasing II and Original AESOP and is, and each of
the other Related Documents to which AESOP Leasing II or Original AESOP is a
party is, a legal, valid and binding obligation of such party, enforceable in
accordance with its terms.
SECTION 8.3. Compliance. The execution, delivery and
performance by each of AESOP Leasing II and Original AESOP of this Agreement
and each other Related Document to which it is a party, and the consummation
of the transactions contemplated hereby and thereby, do not and will not (i)
require any consent, approval, authorization or registration not already
obtained or effected, (ii) violate any applicable law with respect to AESOP
Leasing II or Original AESOP, as the case may be, which violation could result
in a Material Adverse Effect,
18
(iii) conflict with, result in a breach of, or constitute a default under the
certificate or articles of incorporation or by-laws, as amended, of AESOP
Leasing II or Original AESOP, as the case may be, or under any indenture,
agreement, or other instrument to which AESOP Leasing II or Original AESOP is
a party or by which its properties may be bound, or (iv) result in or require
the creation or imposition of any Lien upon or with respect to any property
now owned or hereafter acquired by AESOP Leasing II or Original AESOP except
Permitted Liens.
SECTION 8.4. [RESERVED].
SECTION 8.5. Litigation. There is no action, suit or
proceeding pending against or, to the knowledge of AESOP Leasing II or
Original AESOP, threatened against or affecting AESOP Leasing II or Original
AESOP before any court or arbitrator or any Governmental Authority in which
there is a reasonable possibility of an adverse decision that could materially
adversely affect the consolidated financial position, consolidated results of
operations, business, properties, performance or condition (financial or
otherwise) of AESOP Leasing II or Original AESOP, as the case may be, or which
in any manner draws into question the validity or enforceability of this
Agreement or any other Related Document or the ability of AESOP Leasing II or
Original AESOP to comply with any of the respective terms hereunder or
thereunder.
SECTION 8.6. Liens. The AESOP II Loan Collateral is free and
clear of all Liens other than (i) Permitted Liens and (ii) Liens in favor of
the Lender or the Trustee. The Lender (or the Trustee on behalf of the Secured
Parties) has obtained, as security for the Liabilities, a first priority
perfected Lien on all AESOP II Loan Collateral (except, with respect to
perfection and priority, Vehicles titled in the states of Nebraska, Ohio and
Oklahoma). All Vehicle Perfection and Documentation Requirements with respect
to all Vehicles leased under the AESOP II Operating Lease on or after the date
hereof have and will continue to be satisfied in accordance with the terms of
this Agreement.
SECTION 8.7. Employee Benefit Plans. Neither AESOP Leasing
II nor Original AESOP has established nor does it maintain or contribute to
any employee benefit plan that is covered by Title IV of ERISA, and neither
19
AESOP Leasing II nor Original AESOP will do so, so long as the Loan Commitment
has not expired, or any amount is owing to the Lender hereunder.
SECTION 8.8. Investment Company Act. Neither AESOP Leasing
II nor Original AESOP is or is controlled by an "investment company," within
the meaning of the Investment Company Act, and neither AESOP Leasing II nor
Original AESOP is subject to any other statute which would impair or restrict
its ability to perform its obligations under this Agreement or the other
Related Documents, and neither the entering into or performance by AESOP
Leasing II or Original AESOP of this Agreement nor the issuance of the Loan
Note violates any provision of such Act.
SECTION 8.9. Regulations G, T, U and X. Neither AESOP
Leasing II nor Original AESOP is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation G, T, U
and X of the Board of Governors of the Federal Reserve System). None of AESOP
Leasing II, Original AESOP, any Affiliate of AESOP Leasing II or Original
AESOP or any Person acting on its or their behalf has taken or will take
action to cause the execution, delivery or performance of this Agreement or
the Loan Note, the making or existence of the Loans or the use of proceeds of
the Loans made hereunder to violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
SECTION 8.10. Proceeds. The proceeds of the Loans made
hereunder will be used solely to purchase or finance Eligible Vehicles that
will be leased under the AESOP II Operating Lease.
SECTION 8.11. Business Locations; Trade Names. Schedule 8.11
lists each of the locations where AESOP Leasing II or Original AESOP maintains
a chief executive office, principal place of business, or any records, and
Schedule 8.11 also lists the legal name of each of AESOP Leasing II and
Original AESOP of each name under or by which it conducts its business.
SECTION 8.12. Taxes. Each of AESOP Leasing II and Original
AESOP has filed all tax returns which have
20
been required to be filed by it (except where the requirement to file such
return is subject to a valid extension), and has paid or provided adequate
reserves for the payment of all taxes shown due on such returns or required to
be paid as a condition to such extension, as well as all payroll taxes and
federal and state withholding taxes, and all assessments payable by it that
have become due, other than those that are payable without penalty or are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been established, and are being maintained, in
accordance with GAAP. As of the Closing Date, to the best of AESOP Leasing
II's and Original AESOP's knowledge, there is no unresolved claim by a taxing
authority concerning AESOP Leasing II's or Original AESOP's tax liability for
any period for which returns have been filed or were due other than those
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been established, and are being maintained, in
accordance with GAAP.
SECTION 8.13. Governmental Authorizations. Each of AESOP
Leasing II and Original AESOP has all licenses, franchises, permits and other
governmental authorizations necessary for all businesses presently carried on
by it (including owning and leasing the real and personal property owned and
leased by it), except where failure to obtain such licenses, franchises,
permits and other governmental authorizations would not have a material
adverse effect on its business and properties or a Material Adverse Effect (as
set forth in clauses (ii) and (iii) of the definition thereof).
SECTION 8.14. Compliance with Laws. Each of AESOP Leasing II
and Original AESOP: (i) is not in violation of any law, ordinance, rule,
regulation or order of any Governmental Authority applicable to it or its
property, which violation would have a material adverse effect on its business
and properties or a Material Adverse Effect (as set forth in clauses (ii) and
(iii) of the definition thereof), and no such violation has been alleged, (ii)
has filed in a timely manner all reports, documents and other materials
required to be filed by it with any governmental bureau, agency or
instrumentality (and the information contained in each of such filings is true
correct and complete in all material respects), except where failure to make
such filings would not have
21
a material adverse effect on its business and properties or a Material Adverse
Effect (as set forth in clauses (ii) and (iii) of the definition thereof) and
(iii) has retained all records and documents required to be retained by it
pursuant to any Requirement of Law, except where failure to retain such
records would not have a material adverse effect on its business and
properties or a Material Adverse Effect (as set forth in clauses (ii) and
(iii) of the definition thereof).
SECTION 8.15. Eligible Vehicles. Each Vehicle leased under
the AESOP II Operating Lease was, on the date of purchase or financing thereof
by AESOP Leasing II, an Eligible Vehicle.
SECTION 8.16. Manufacturer Programs. No Manufacturer Event
of Default has occurred and is continuing with respect to any Eligible Program
Manufacturer.
SECTION 8.17. Absence of Default. Each of AESOP Leasing II
and Original AESOP is in compliance with all of the provisions of its
certificate or articles of incorporation and by-laws and no event has occurred
or failed to occur which has not been remedied or waived, the occurrence or
non-occurrence of which constitutes, or with the passage of time or giving of
notice or both would constitute, (i) an AESOP II Loan Event of Default or a
Potential AESOP II Loan Event of Default or (ii) a default or event of default
by AESOP Leasing II or Original AESOP under any indenture, agreement or other
instrument, or any judgment, decree or final order to which AESOP Leasing II
or Original AESOP is a party or by which AESOP Leasing II or Original AESOP or
any of its properties may be bound or affected.
SECTION 8.18. No Security Interest; Title to Assets. (a) All
action necessary (including the filing of UCC-1 financing statements, the
assignment of rights under the Manufacturer Programs to the Trustee, the
notation on Certificates of Title for all Vehicles leased under the AESOP II
Operating Lease (other than Vehicles titled in the states of Nebraska, Ohio
and Oklahoma) of the Trustee's lien for the benefit of the Noteholders) to
protect and perfect AFC-II's security interest in the AESOP II Loan Collateral
and the Trustee's security interest on behalf of the Secured Parties in the
Collat-
22
eral now in existence and hereafter acquired or created has been duly and
effectively taken.
(b) Each of AESOP Leasing II and Original AESOP has good,
legal and marketable title to, or a valid leasehold interest in, all of its
assets. None of such properties or assets is subject to any Liens, except for
Permitted Liens. Except for financing statements or other filings with respect
to or evidencing Permitted Liens, no financing statement under the UCC of any
state, application for a Certificate of Title or certificate of ownership, or
other filing which names AESOP Leasing II or Original AESOP as debtor or which
covers or purports to cover any of the assets of AESOP Leasing II or Original
AESOP is on file in any state or other jurisdiction, and neither AESOP Leasing
II nor Original AESOP has signed any such financing statement, application or
instrument authorizing any secured party or creditor of such Person thereunder
to file any such financing statement, application or filing other than with
respect to Permitted Liens.
SECTION 8.19. Accuracy of Information. All data,
certificates, reports, statements, opinions of counsel, documents and other
information furnished to the Lender or the Trustee by or on behalf of AESOP
Leasing II or Original AESOP pursuant to any provision of any Related
Document, or in connection with or pursuant to any amendment or modification
of, or waiver under, any Related Document, shall, at the time the same are
so furnished, (i) be complete and correct in all material respects to the
extent necessary to give the Lender or the Trustee, as the case may be, true
and accurate knowledge of the subject matter thereof, (ii) not contain any
untrue statement of a material fact and (iii) not omit to state a material
fact necessary in order to make the statements contained therein (in light of
the circumstances in which they were made) not misleading, and the
furnishing of the same to the Lender or the Trustee, as the case may be, shall
constitute a representation and warranty by AESOP Leasing II or Original
AESOP, as the case may be, made on the date the same are furnished to the
Lender or the Trustee, as the case may be, to the effect specified in clauses
(i), (ii) and (iii) above.
SECTION 9. AFFIRMATIVE COVENANTS. Until the expiration or
termination of the Loan Commitment and
23
thereafter until the Loan Note and all other Liabilities are paid in full,
each of AESOP Leasing II and Original AESOP agrees that, unless at any time
the Lender shall otherwise expressly consent in writing:
SECTION 9.1. Corporate Existence; Foreign Qualification.
Each of AESOP Leasing II and Original AESOP will do and cause to be done at
all times all things necessary to (i) maintain and preserve its corporate
existence, (ii) be, and ensure that it is, duly qualified to do business and
in good standing as a foreign corporation in each jurisdiction where the
nature of its business makes such qualification necessary and the failure to
so qualify would have a material adverse effect on its business and properties
or a Material Adverse Effect (as set forth in clauses (ii) and (iii) of the
definition thereof) and (iii) comply with all Contractual Obligations and
Requirements of Law binding upon it, except to the extent that the failure to
comply therewith would not, in the aggregate, have a material adverse effect
on its business and properties or a Material Adverse Effect (as set forth in
clauses (ii) and (iii) of the definition thereof).
SECTION 9.2. Books, Records and Inspections. AESOP Leasing
II will maintain complete and accurate books and records with respect to the
AESOP II Loan Collateral and each of AESOP Leasing II and Original AESOP will
permit any Person designated by the Lender or the Trustee in writing to visit
and inspect any of its properties, corporate books and financial records and
to discuss its affairs, finances and accounts with its officers, its agents
and its independent public accountants, all at such reasonable times and as
often as the Lender or the Trustee may reasonably request.
SECTION 9.3. Insurance. AESOP Leasing II will obtain and
maintain, or cause to be obtained and maintained, with respect to all Vehicles
leased under the AESOP II Operating Lease (i) vehicle liability insurance to
the full extent required by law and in any event not less than $500,000 per
Person and $1,000,000 per occurrence, (ii) property damage insurance with a
limit of $1,000,000 per occurrence and (iii) excess coverage public liability
insurance with a limit of not less than $50,000,000 or the limit maintained
from time to time by the relevant Lessee at any time hereafter, whichever is
24
greater, with respect to all passenger cars and vans comprising such Lessee's
rental fleet. The Lender acknowledges and agrees that AESOP Leasing II may, to
the extent permitted by applicable law, allow the relevant Lessees to
self-insure with respect to the Vehicles leased under the AESOP II Operating
Lease for the first $1,000,000 per occurrence, or a greater amount up to a
maximum of $3,000,000, with the consent of each Enhancement Provider, per
occurrence, of vehicle liability and property damage insurance which is
otherwise required to be insured hereunder. All such policies shall be from
financially sound and reputable insurers, shall name the Lender, Original
AESOP, PVHC, Quartx and the Trustee as additional insured parties, in the case
of catastrophic physical damage insurance on such Vehicles, shall name the
Trustee as loss payee as its interest may appear and will provide that the
Lender and the Trustee shall receive at least 10 days' prior written notice of
cancellation of such policies. AESOP Leasing II will notify promptly the
Lender and the Trustee of any curtailment or cancellation of any such Lessee's
right to self-insure in any jurisdiction.
SECTION 9.4. Manufacturer Programs. AESOP Leasing II will
turn in, or cause to be turned in, the Vehicles leased under the AESOP II
Operating Lease to the relevant Manufacturer within the Repurchase Period
therefor (unless AESOP Leasing II pays in full the Loan with respect to a
Vehicle pursuant to Section 5.2 or sells a Vehicle and, prior to the end of
the Repurchase Period therefor, receives sales proceeds thereof in cash in an
amount equal to or greater than the repurchase price under such Manufacturer
Program); and will comply with all of its obligations under each Manufacturer
Program.
SECTION 9.5. Reporting Requirements. AESOP Leasing II will
furnish, or cause to be furnished, to the Lender and the Trustee and, in the
case of item (iii) below, each Rating Agency:
(i) Reports. All reports of ARC and the Lessees
required to be delivered to AESOP Leasing II pursuant to Section 31.5
of the AESOP II Operating Lease;
(ii) AESOP II Loan Events of Default; Amortization
Events. As soon as possible but in any
25
event within two Business Days after the occurrence of (A) any
Potential AESOP II Loan Event of Default or AESOP II Loan Event of
Default, a written statement of an Authorized Officer describing such
event and the action that AESOP Leasing II proposes to take with
respect thereto and (B) any Potential Amortization Event or
Amortization Event, notice thereof to the Lender, each Enhancement
Provider and the Rating Agencies;
(iii) Manufacturers. Promptly after obtaining actual
knowledge thereof, notice of any Manufacturer Event of Default or
termination or replacement of a Manufacturer Program;
(iv) Notice of Liens and Vicarious Liability
Claims. On each Determination Date, AESOP Leasing II shall forward to
AFC-II, the Trustee and the Paying Agent, the Administrative Agent,
the Rating Agencies and each Enhancement Provider, (A) an Officer's
Certificate of AESOP Leasing II certifying as to whether, to the
knowledge of AESOP Leasing II, (x) any Lien exists on any of the
AESOP II Loan Collateral or (y) any vicarious liability claims shall
have been made against AESOP Leasing II as a result of its ownership
of the Vehicles leased under the AESOP II Operating Lease or against
Original AESOP as a result of its holding legal title to the Vehicles
leased under the AESOP II Operating Lease and (B) a written statement
of an Authorized Officer summarizing each such Lien or claim and the
action that AESOP Leasing II proposes to take with respect thereto;
and
(v) Other. Promptly, from time to time, such other
information, documents, or reports respecting the AESOP II Loan
Collateral or the condition or operations, financial or otherwise, of
AESOP Leasing II or Original AESOP as the Lender or the Trustee may
from time to time reasonably request in order to protect the
interests of the Lender or the Trustee under or as contemplated by
this Agreement or any other Related Document.
SECTION 9.6. Payment of Taxes; Removal of Liens. Each of
AESOP Leasing II and Original AESOP will pay when due all taxes, assessments,
fees and governmen-
26
tal charges of any kind whatsoever that may be at any time lawfully assessed
or levied against or with respect to AESOP Leasing II or Original AESOP, as
the case may be, or its property and assets or any interest thereon.
Notwithstanding the previous sentence, but subject in any case to the other
requirements hereof and of the Related Documents, neither AESOP Leasing II nor
Original AESOP shall be required to pay any tax, charge, assessment or
imposition nor to comply with any law, ordinance, rule, order, regulation or
requirement so long as AESOP Leasing II or Original AESOP, as the case may be,
shall contest, in good faith, the amount or validity thereof, in an
appropriate manner or by appropriate proceedings. Each such contest shall be
promptly prosecuted to final conclusion (subject to the right of AESOP Leasing
II or Original AESOP, as the case be, to settle any such contest).
SECTION 9.7. Business. Each of AESOP Leasing II and Original
AESOP will engage only in businesses conducted on the date hereof.
SECTION 9.8. Maintenance of the Vehicles. AESOP Leasing II
will maintain or cause to be maintained in good repair, working order, and
condition all of the Vehicles leased under the AESOP II Operating Lease,
except to the extent that any such failure to comply with such requirements
does not, in the aggregate, materially adversely affect the interests of the
Lender under this Agreement or the interests of the Secured Parties under the
Indenture or the likelihood of repayment of the Loans made hereunder. From
time to time AESOP Leasing II will make or cause to be made all appropriate
repairs, renewals, and replacements with respect to the Vehicles leased under
the AESOP I Operating Lease.
SECTION 9.9. Maintenance of Separate Existence. AESOP
Leasing II will do all things necessary to continue to be readily
distinguishable from ARC, ARAC, AESOP Leasing, Original AESOP, AFC, AFC-II,
the Affiliates of the foregoing or any other affiliated or unaffiliated entity
and to maintain its corporate existence separate and apart from that of AESOP
Leasing, Original AESOP, AFC, AFC-II, ARAC and ARC and Affiliates of ARC
including, without limitation, (i) practicing and adhering to corporate
formalities, such as maintaining appropriate corporate books and records; (ii)
observing all
27
corporate formalities in connection with all dealings between itself and ARC,
ARAC, AESOP Leasing, Original AESOP, AFC, AFC-II, the Affiliates of the
foregoing or any other affiliated or unaffiliated entity; (iii) observing all
corporate procedures required by its certificate of incorporation, its bylaws
and the corporation law of the State of Delaware; (iv) acting solely in its
name and through its duly authorized officers or agents in the conduct of its
businesses; (v) managing its business and affairs by or under the direction of
the Board of Directors; (vi) ensuring that its Board of Directors duly
authorizes all of its corporate actions; (vii) ensuring the receipt of proper
authorization, when necessary, from its stockholder(s) for corporate action;
(viii) maintaining at least two corporate directors who are Independent
Directors; (ix) owning or leasing (including through shared arrangements with
Affiliates) all office furniture and equipment necessary to operate its
business; (x) not (A) having or incurring any debt or obligations to any of
AESOP Leasing, Original AESOP, AFC, AFC-II, ARC, ARAC, the Affiliates of the
foregoing or any other affiliated or unaffiliated entity, except for, the
obligations to AFC-II under the AESOP II Loan Agreement; (B) other than as
provided in the Related Documents, guaranteeing or otherwise becoming liable
for any obligations of AESOP Leasing, Original AESOP, AFC, AFC-II, ARAC or ARC
or any Affiliates of the foregoing; (C) having obligations guaranteed by AESOP
Leasing, Original AESOP, AFC, AFC-II, ARAC or ARC or any Affiliates of the
foregoing; (D) holding itself out as responsible for debts of AESOP Leasing,
Original AESOP, AFC, AFC-II, ARAC or ARC or any Affiliates of the foregoing or
for decisions or actions with respect to the affairs of AESOP Leasing,
Original AESOP, AFC, AFC-II, ARAC or ARC or any Affiliates of the foregoing;
(E) failing to correct any known misrepresentation with respect to the
statement in subsection (C); (F) operating or purporting to operate as an
integrated, single economic unit with respect to AESOP Leasing, Original
AESOP, AFC, AFC-II, ARAC, ARC, the Affiliates of the foregoing or any other
affiliated or unaffiliated entity or any other affiliated or unaffiliated
entity; (G) seeking to obtain credit or incur any obligation to any third
party based upon the assets of AESOP Leasing, Original AESOP, AFC, AFC-II,
ARAC, ARC, the Affiliates of the foregoing or any other affiliated or
unaffiliated entity; (H) induce any such third party to reasonably rely on the
creditworthiness of AESOP Leasing, Original
28
AESOP, AFC, AFC-II, ARAC, ARC, the Affiliates of the foregoing or any other
affiliated or unaffiliated entity; and (I) being directly or indirectly named
as a direct or contingent beneficiary or loss payee on any insurance policy of
AESOP Leasing, Original AESOP, AFC, AFC-II, ARAC or ARC or any Affiliates of
the foregoing other than as required by the Related Documents with respect to
insurance on the Vehicles; (xi) other than as provided in the Related
Documents, maintaining its deposit and other bank accounts and all of its
assets separate from those of any other Person; (xii) maintaining its
financial records separate and apart from those of any other Person; (xiii)
disclosing in its annual financial statements the effects of the transactions
contemplated by the Related Documents in accordance with generally accepted
accounting principles; (xiv) setting forth clearly in its financial statements
its separate assets and liabilities and the fact that the Vehicles leased
under the AESOP II Operating Lease are owned by AESOP Leasing II; (xv) not
suggesting in any way, within its financial statements, that its assets are
available to pay the claims of creditors of AESOP Leasing, Original AESOP,
AFC, AFC-II, ARAC, ARC, the Affiliates of the foregoing or any other
affiliated or unaffiliated entity; (xvi) not consolidating its financial
statements with the financial statements of AESOP Leasing, Original AESOP,
AFC, AFC-II, ARAC, ARC, the Affiliates of the foregoing or any other
affiliated or unaffiliated entity and not consolidating its assets or
liabilities into, or otherwise reflecting them on, the financial statements of
AESOP Leasing, Original AESOP, AFC, AFC-II, ARAC, ARC, the Affiliates of the
foregoing or any other affiliated or unaffiliated entity; (xvii) compensating
all its employees, officers, consultants and agents for services provided to
it by such Persons out of its own funds; (xviii) maintaining office space
separate and apart from that of AESOP Leasing, Original AESOP, AFC, AFC-II,
ARAC or ARC or any Affiliates of the foregoing (even if such office space is
subleased from or is on or near premises occupied by AESOP Leasing, Original
AESOP, AFC, AFC-II, ARAC or ARC or any Affiliates of the foregoing) and a
telephone number separate and apart from that of AESOP Leasing, Original
AESOP, AFC, AFC-II, ARAC or ARC or any Affiliates of the foregoing; (xix)
conducting all oral and written communications, including, without limitation,
letters, invoices, purchase orders, contracts, statements, and applications
solely in its own name; (xx) having separate stationary from AESOP Leasing,
29
Original AESOP, AFC, AFC-II, ARAC, ARC, the Affiliates of the foregoing or any
other affiliated or unaffiliated entity; (xxi) accounting for and managing all
of its liabilities separately from those of AESOP Leasing, Original AESOP,
AFC, AFC-II, ARAC or ARC or any Affiliates of the foregoing; (xxii)
allocating, on an arm's-length basis, all shared corporate operating services,
leases and expenses, including, without limitation, those associated with the
services of shared consultants and agents and shared computer and other office
equipment and software; and otherwise maintaining an arm's-length relationship
with each of AESOP Leasing, Original AESOP, AFC, AFC-II, ARAC, ARC, the
Affiliates of the foregoing or any other affiliated or unaffiliated entity;
(xxiii) refraining from filing or otherwise initiating or supporting the
filing of a motion in any bankruptcy or other insolvency proceeding involving
AESOP Leasing, Original AESOP, AFC, AFC-II, AESOP Leasing II, ARAC, ARC or any
Affiliate of ARC, to substantively consolidate AESOP Leasing, AFC, AFC-II or
AESOP Leasing II with ARAC, ARC or any Affiliate of ARC; (xxiv) remaining
solvent and assuring adequate capitalization for the business in which it is
engaged and (xxv) conducting all of its business (whether written or oral)
solely in its own name so as not to mislead others as to the identity of each
of AESOP Leasing II, AESOP Leasing, Original AESOP, AFC, AFC-II, ARAC, ARC and
the Affiliates of the foregoing or any other affiliated or unaffiliated
entity. AESOP Leasing II acknowledges its receipt of a copy of those certain
opinion letters issued by Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP dated July
30, 1997 addressing the issue of substantive consolidation as they may relate
to any of ARAC, ARC and each affiliate of ARC on the one hand and any of AESOP
Leasing, Original AESOP, AFC, AFC-II and AESOP Leasing II on the other hand
and as among AESOP Leasing II, AFC-II, AESOP Leasing Original AESOP, and AFC.
AESOP Leasing II hereby agrees to maintain in place all policies and
procedures, and take and continue to take all action, described in the factual
assumptions set forth in such opinion letter and relating to it.
SECTION 9.10. Manufacturer Payments; Sales Proceeds. AESOP
Leasing II will cause each Manufacturer and auction dealer to make all
payments under the Manufacturer Programs with respect to Vehicles directly to
the Collection Account. Any such payments from Manufacturers or related
auction dealers received directly by
30
AESOP Leasing II, will be, within three Business Days of receipt, deposited
into the Collection Account. AESOP Leasing II shall, within two Business Days
of receipt thereof, deposit into the Collection Account all amounts
representing the proceeds from sales of Vehicles by auction dealers under a
Guaranteed Depreciation Program and sales of Vehicles (including amounts paid
by a Manufacturer as a result of the sale of such Vehicle outside such
Manufacturer's Manufacturer Program) to third parties (other than under any
related Manufacturer Program) and all payments with respect to other AESOP II
Loan Collateral (other than the AESOP II Loan Collateral described in the last
sentence of this paragraph). Insurance proceeds and warranty payments with
respect to Vehicles will only be deposited into the Collection Account if an
Amortization Event or Potential Amortization Event shall have occurred and be
continuing.
SECTION 9.11. Maintenance of Properties. Each of AESOP
Leasing II and Original AESOP will maintain or cause to be maintained in the
ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) all properties, including, without
limitation, vehicles necessary for the operation of its businesses (whether
owned or held under lease), and from time to time make or cause to be made all
needed and appropriate repairs, renewals, replacements, additions, betterments
and improvements thereto, except to the extent no material adverse effect on
its business and properties or a Material Adverse Effect (as set forth in
clauses (ii) and (iii) of the definition thereof) could result, and maintain
good, legal and marketable title to, or a valid leasehold interest in, all of
its assets, free and clear of all Liens except for Permitted Liens, and except
to the extent sold or otherwise disposed of in accordance with this Agreement
or any other Related Document.
SECTION 9.12. Verification of Title. AESOP Leasing II will
on an annual basis, cause a title check to be performed by an independent
nationally recognized firm of certified public accountants acceptable to the
Trustee and each Enhancement Provider on a statistical sample of all Vehicles
leased under the Leases designed to provide a ninety-five percent (95%)
confidence level that no more than five percent (5%) of the Certificates of
Title for such Vehicles did not correctly reference
31
the Trustee or its Permitted Nominee, as first lienholder, and the Lessor of
such Vehicle or its Permitted Nominee or, in the case of Financed Vehicles,
ARAC or its Permitted Nominee, as owner, and cause such party to deliver a
report stating that, within the confidence level set forth above, no more than
five percent (5%) of the Certificates of Title did not correctly reference the
lienholder or owner of the Vehicles described in the immediately preceding
clause.
SECTION 9.13. [RESERVED].
SECTION 9.14. Delivery of Information. Each of AESOP Leasing
II and Original AESOP will provide to the Lender any information or materials
necessary for the Lender to comply with its obligations under the Indenture.
SECTION 9.15. Preferred Stock. AESOP Leasing
II will at all times cause to be outstanding Preferred
Stock in an amount equal to or greater than $15,000,000.
SECTION 9.16. Vehicles. AESOP Leasing II will maintain good
and marketable title to each Vehicle purchased by AESOP Leasing II with the
proceeds of Loans made hereunder, free and clear of all Liens and
encumbrances, other than any Permitted Liens.
SECTION 9.17. Assignments. AESOP Leasing II will deliver to
the Trustee on or prior to the Initial Closing Date, or such later date and
thereafter, as necessary to comply with the terms of the Related Documents,
executed counterparts of the Assignment Agreements related to the assignment
of rights under each Manufacturer Program, dated as of the Initial Closing
Date, or such later date, if delivered after the Initial Closing Date in
accordance herewith, duly executed by ARAC, each other Lessee, AESOP Leasing
II, AFC-II, the Trustee and each applicable Manufacturer.
SECTION 9.18. Notation of Liens. AESOP Leasing II will
deliver to the Lender and the Trustee on or prior to the Initial Closing Date
and on an ongoing basis, as applicable, evidence (which, in the case of the
filing of financing statements on form UCC-1, may be telephonic confirmation
of such filing) that it has caused or is causing the Trustee's name to be
noted on
32
the Certificate of Title for each Vehicle leased under the AESOP II Operating
Lease (other than Certificates of Title for Vehicles titled in the states of
Nebraska, Ohio and Oklahoma) in accordance herewith and all filings (including
filings of financing statements on form UCC-1) and recordings have been
accomplished as may be required by law to establish, perfect (other than
perfection of the security interest of the Trustee in Vehicles by notation of
the lien of the Trustee on the Certificates of Title for Vehicles titled in
the States of Nebraska, Ohio and Oklahoma), protect and preserve the rights,
titles, interests, remedies, powers, privileges, licenses and security
interest of the Trustee in such Vehicles and other AESOP II Loan Collateral
for the benefit of the Secured Parties.
SECTION 10. NEGATIVE COVENANTS. Until the expiration or
termination of the Loan Commitment and thereafter until the Loan Note and all
other Liabilities are paid in full, each of AESOP Leasing II and Original
AESOP agrees that, unless at any time the Lender shall otherwise expressly
consent in writing, it will not:
SECTION 10.1. Liens. Create, incur, assume or permit to
exist any Lien upon any of its Assets (including the AESOP II Collateral),
other than Permitted Liens.
SECTION 10.2. Other Indebtedness. Create, assume, incur,
suffer to exist or otherwise become or remain liable in respect of any
Indebtedness other than (i) Indebtedness hereunder and (ii) Indebtedness
permitted under any other Related Document.
SECTION 10.3. Mergers, Consolidations. Except as may be
permitted by the express written approval of the Trustee and the Lender, merge
with or into, enter into any joint venture or other association with, or
consolidate with, any other Person.
SECTION 10.4. Sales of Assets. Sell, lease, transfer,
liquidate or otherwise dispose of any Assets, except as contemplated by the
Related Documents.
SECTION 10.5. Acquisition of Assets. Acquire, by long-term
or operating lease or otherwise, any Assets except pursuant to the terms of
the Related Documents.
33
SECTION 10.6. Dividends, Officers' Compensation, etc. (i)
Declare or pay any dividends on any shares of its capital stock or make any
other distribution on, or any purchase, redemption or other acquisition of,
any shares of its capital stock except, in the case of AESOP Leasing II, out
of funds in the AESOP II Segregated Account, or (ii) pay any wages or salaries
or other compensation to officers, directors, employees or others except out
of earnings computed in accordance with GAAP and, in the case of AESOP Leasing
II, only from funds in the AESOP II Segregated Account.
SECTION 10.7. Organizational Documents. Amend any of its
organizational documents, including its certificate of incorporation or
by-laws, unless prior to such amendment, each Rating Agency confirms that
after such amendment the Rating Agency Condition and the CP Rating Agency
Consent Condition will be met.
SECTION 10.8. Investments. Make, incur, or suffer to exist
any loan, advance, extension of credit or other investment in any Person other
than pursuant to the Related Documents.
SECTION 10.9. Regulations G, T, U and X. Use or permit any
proceeds of the Loans made hereunder to be used, either directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
"purchasing or carrying margin stock" within the meaning of Regulations G, T,
U and X of the Board of Governors of the Federal Reserve System, as amended
from time to time.
SECTION 10.10. Other Agreements. Enter into any agreement
containing any provision which would be violated or breached by the
performance of its obligations hereunder or under any instrument or document
delivered or to be delivered by it hereunder or in connection herewith.
SECTION 10.11. Use of Vehicles. Use or allow the Vehicles
leased under the AESOP II Operating Lease to be used in any manner (i) that
would make Vehicles ineligible for repurchase under an Eligible Manufacturer
Program, (ii) for any illegal purposes or (iii) that could subject the
Vehicles to confiscation.
34
SECTION 10.12. Use of Proceeds. Use or permit the proceeds
of the Loans made hereunder to be used for any purpose other than to purchase
or finance Eligible Vehicles that will be leased under the AESOP II Operating
Lease.
SECTION 10.13. Limitations on the Acquisition of Certain
Vehicles. Unless otherwise specified in the related Supplement or unless
waived by the Required Noteholders as specified in the related Supplement,
permit (a) the aggregate Net Book Value of all Vehicle leased under the Leases
and manufactured by a particular Manufacturer or group of Manufacturers as of
any Payment Date to exceed any applicable Maximum Manufacturer Amount and (b)
the Specified States Amount as of any Payment Date to exceed any applicable
Maximum Specified States Amount.
SECTION 11. CONDITIONS.
SECTION 11.1. Initial Loans. The effectiveness of this
Agreement and the obligation of the Lender to make the initial Loans hereunder
to AESOP Leasing II shall be subject to the prior or concurrent (i) delivery
of each of the following documents to the Lender and, if not otherwise
required to be delivered to the Trustee by any other Related Document, to the
Trustee and any other Enhancement Provider, as applicable (in form and
substance satisfactory to the Lender and, if applicable, the Trustee and any
Enhancement Provider) and (ii) satisfaction of the following conditions, as
applicable:
(a) Loan Note. A Loan Note duly executed by AESOP Leasing
II;
(b) Certificates of Incorporation. The certificate of
incorporation of each of AESOP Leasing II and Original AESOP, duly certified
by the Secretary of State of the State of Delaware, together with a copy of
the by-laws of each of AESOP Leasing II and Original AESOP, duly certified by
the Secretary or an Assistant Secretary of AESOP Leasing II or Original AESOP,
as the case may be;
(c) Resolutions. Copies of resolutions of the Board of
Directors of each of AESOP Leasing II and Original AESOP authorizing or
ratifying the execution, delivery and performance of those documents and
matters re-
35
quired of it with respect to this Agreement, duly certified by the Secretary
or an Assistant Secretary of AESOP Leasing II or Original AESOP, as the case
may be;
(d) Consents, etc. Certified copies of all documents
evidencing any necessary corporate action, consents and governmental approvals
(if any) with respect to this Agreement;
(e) Incumbency and Signatures. A certificate of the
Secretary or an Assistant Secretary of each of AESOP Leasing II and Original
AESOP certifying the names of the individual or individuals authorized to sign
this Agreement and the other Related Documents to be executed by it, together
with a sample of the true signature of each such individual (the Lender may
conclusively rely on each such certificate until formally advised by a like
certificate of any changes therein);
(f) Opinions of Counsel. The opinions of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, special counsel to AESOP Leasing II, AESOP Leasing,
AFC and AFC-II, addressed to the Lender, the Trustee, the Rating Agencies and
the Administrative Agent, the opinions of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, counsel for ARC and ARAC addressed to the Lender, the Trustee, the
Placement Agents, the Rating Agencies and the Administrative Agent, on behalf
of the Liquidity Lenders, and the opinions of counsel to each applicable
Manufacturer for the Manufacturer Programs under which Program Vehicles will
be financed hereunder addressed to the Lender, the Trustee, the Rating
Agencies and the Administrative Agent, on behalf of the Liquidity Lenders;
(g) Good Standing Certificates. Certificates of good
standing for each of AESOP Leasing II and Original AESOP in the jurisdiction
of its incorporation and the jurisdiction of its principal place of business;
(h) Search Reports. A written search report from a Person
satisfactory to the Lender and the Trustee listing all effective financing
statements that name AESOP Leasing II or Original AESOP, as debtor or assign-
or, and that are filed and the jurisdictions in which filings were made
pursuant to subsection (i) below, together with copies of such financing
statements, and tax and judgment lien search reports from a Person satis-
36
factory to the Lender and the Trustee showing no evidence of such liens filed
against AESOP Leasing II or Original AESOP;
(i) Evidence. Evidence (which may be telephonic) of the
filing of proper financing statements on Form UCC-1, naming (1) AESOP Leasing
II as debtor and (2) Original AESOP as debtor, and the Lender as secured party
and the Trustee as assignee or other, similar instruments or documents, as may
be necessary or, in the reasonable opinion of the Lender and the Trustee,
desirable under the UCC of all applicable jurisdictions to perfect the
Lender's and the Trustee's interest in the AESOP II Loan Collateral;
(j) Enhancement Agreement. An executed copy of the
Enhancement Agreement pursuant to the Supplement with respect to any Series of
Notes for which the Series Closing Date occurs on the Initial Closing Date;
(k) Enhancement. The Enhancement Amount with respect to any
Series of Notes for which the Series Closing Date occurs on the Initial
Closing Date is equal to or exceeds the Required Enhancement Amount for such
Series;
(l) Leases. An executed copy of the Leases and all documents
required to be delivered by any relevant Lessee and ARC to the Lessors
pursuant to the Leases, and all conditions to the effectiveness of the Lease
shall have been satisfied;
(m) Assignment Agreement. An executed copy of the Assignment
Agreement of each Manufacturer;
(n) Certified Copy of Manufacturer Program. A copy of each
Manufacturer Program under which Vehicles will be financed hereunder and an
Officer's Certificate, dated the Initial Closing Date, and duly executed by an
Authorized Officer of AESOP Leasing II, certifying that each such copy is
true, correct and complete as of the Initial Closing Date and that each such
Manufacturer Program shall be in full force and effect and enforceable against
the related Manufacturer;
(o) Indenture. The Indenture, dated the Initial Closing
Date, duly executed by the Lender and the
37
Trustee, and all conditions to the effectiveness thereof and the issuance of
the Notes thereunder shall have been satisfied in all respects;
(p) Vehicle Title and Lienholder Nominee Agreements and HFS
Indemnity. The Vehicle Title and Lienholder Nominee Agreements and HFS
Indemnity, each dated the Initial Closing Date, duly executed by the parties
thereto;
(q) Conditions Precedent to Note Issuance. All conditions
precedent to the issuance of any Series of Notes for which the Series Closing
Date occurs on the Initial Closing Date shall have been satisfied in accor-
dance with the related Supplement; and
(r) Other. Such other documents as the Trust-
ee or the Lender may reasonably request.
SECTION 11.2. All Loans. All Loans hereunder (including the
initial Loan) shall be subject to the further conditions precedent that (a) if
the amount of Enhancement with respect to any Series of Notes is increased
or if the current Enhancement with respect to any Series of Notes is replaced,
to the extent such additional or replacement Enhancement is in the form of
an unfunded commitment (including, without limitation, a letter of credit),
AESOP Leasing II shall cause the delivery to the Lender, the Trustee, the
Enhancement Providers, if any, for any Series of Notes issued and outstanding
on the date of such opinion(s), Placement Agents, if any, the Rating Agencies
and the Administrative Agent (on behalf of the Liquidity Lenders) on or
prior to the effectiveness of such additional or replacement Enhancement of
opinion(s) of counsel as to the enforceability of such additional or
replacement Enhancement substantially similar to the original opinions
delivered with respect to such Enhancement, (b) the Lender shall have received
a completed Loan Request therefor and a copy of the related Vehicle Order, (c)
all conditions precedent to the issuance of any Series of Notes after the
Initial Closing Date shall have been satisfied in accordance with the related
Supplement and (d) on the date of such Loan the following statements shall be
true (and AESOP Leasing II, by accepting the amount of such Loan, shall be
deemed to have represented and warranted that): (i) the representations and
warran-
38
ties contained in Section 8 are true and correct on and as of such date with
the same effect as though made on and as of such date and shall be deemed to
have made on such date and (ii) no Potential AESOP II Loan Event of Default or
AESOP II Loan Event of Default has occurred and is continuing or would result
from the making of such Loan or from the application of the proceeds of such
Loan.
SECTION 12. LOAN EVENTS OF DEFAULT AND THEIR
EFFECT.
SECTION 12.1. AESOP II Loan Events of Default. Each of the
following shall constitute an AESOP II Loan Event of Default under this
Agreement:
12.1.1. Non-Payment of Loans. Default in
the payment when due of the principal amount of any Loan made hereunder or the
Monthly Loan Principal Amount hereunder, and the continuance thereof for one
(1) Business Day after the occurrence thereof, or the default in the payment
of any Loan Interest on any Loan made hereunder, and the continuance thereof
for five (5) Business Days after the occurrence thereof.
12.1.2. Non-Payment of Other Amounts. Default, and
continuance thereof for five (5) Business Days after notice thereof by the
Lender to AESOP Leasing II, in the payment when due of any amount payable
hereunder (other than any amount described in Section 12.1.1).
12.1.3. Bankruptcy, Insolvency, etc. The
occurrence of an Event of Bankruptcy with respect to ARC, ARAC, any other
Lessee under the AESOP II Operating Lease, AESOP Leasing II or Original AESOP.
12.1.4. Non-Compliance With Provisions.
Failure by AESOP Leasing II to comply with or to perform any provision of this
Agreement (and not constituting an AESOP II Loan Event of Default under any of
the other provisions of this Section 12.1) and, other than the failure to
comply with the provisions of Sections 10.1 and 10.2 hereof, the continuance
of such failure for 30 days after the earlier of the date of the receipt of
written notice thereof from the Lender or the Trustee to AESOP Leasing II and
the date AESOP Leasing II learns of such failure.
39
12.1.5. Warranties and Representations.
Any warranty or representation made by or on behalf of AESOP Leasing II or
otherwise in connection herewith is inaccurate or incorrect or is breached or
false or misleading in any material respect as of the date such warranty or
representation is made; or any schedule, certificate, financial statement,
report, notice, or other writing furnished by or on behalf of AESOP Leasing II
to the Lender is false or misleading in any material respect on the date as of
which the facts therein set forth are stated or certified.
12.1.6. Lease Events of Default. The occurrence of a Lease
Event of Default.
12.1.7. Loan Events of Default Under Other Loan Agreements.
The occurrence of an AESOP I Loan Event of Default.
12.1.8. Judgments. Any final and unappealable (or, if
capable of appeal, such appeal is not being diligently pursued or enforcement
thereof has not been stayed) judgment or order for the payment of money in
excess of $100,000 which is not fully covered by insurance shall be rendered
against AESOP Leasing II and such judgment or order shall continue unsatisfied
and unstayed for a period of 30 days.
SECTION 12.2. Effect of AESOP II Loan Event of Default or
Liquidation Event of Default. If any AESOP II Loan Event of Default described
in Section 12.1.1 or 12.1.3 or any Liquidation Event of Default shall occur,
the Loan Commitment (if not theretofore terminated) shall immediately
terminate and in the case of any other AESOP II Loan Event of Default, the
Lender may declare its Loan Commitment (if not theretofore terminated) to be
terminated and whereupon it shall immediately terminate and may declare the
Loan Note and all other Liabilities to be due and payable, whereupon the Loan
Note shall become immediately due and payable.
SECTION 12.3. Rights of Trustee Upon Liquidation Event of
Default and Non-Performance of Certain Covenants. (a) If a Liquidation Event
of Default shall have occurred and be continuing the Lender and the Trustee,
to the extent provided in the Indenture, shall have all the rights against
AESOP Leasing II, Original AESOP
40
and the Loan Collateral provided in the Indenture upon a Liquidation Event of
Default, including the right to take (under the specified circumstances)
possession of all Vehicles immediately.
(b) If (i) AESOP Leasing II shall default in the due
performance and observance of any of its obligations under Section 9.3, 9.4,
9.5(iii), 9.8, 10.1 or 10.11 hereof, or (ii) any Lessee shall default in the
due performance and observance of its obligations under Section 31.10 of the
AESOP II Operating Lease, and such default shall continue unremedied for a
period of 30 days after notice thereof shall have been given to AESOP Leasing
II by the Lender, the Lender shall have the ability to exercise all rights,
remedies, powers, privileges and claims of AESOP Leasing II or Original AESOP
against the Manufacturers under or in connection with the Manufacturer
Programs with respect to (A) Vehicles leased under the AESOP II Operating
Lease that AESOP Leasing II has determined to turn back to the Manufacturers
under such Manufacturer Programs and (B) whether or not AESOP Leasing II shall
then have determined to turn back such Vehicles, any Vehicles leased under the
AESOP II Operating Lease for which the applicable Repurchase Period will end
within one week or less.
(c) Upon a default in the performance (after giving effect
to any grace periods provided herein) by AESOP Leasing II or Original AESOP of
its obligations under Section 7.5 or 8.6 hereof with respect to certain
Vehicles, the Lender or the Trustee shall have the right to take actions
reasonably necessary to correct such default with respect to the subject
Vehicles including the execution of UCC financing statements with respect to
Manufacturer Programs and other general intangibles and the completion of
Vehicle Perfection and Documentation Requirements on behalf of AESOP Leasing
II, Original AESOP or the Lender, as applicable.
(d) Upon the occurrence of a Liquidation Event of Default,
AESOP Leasing II will return all Vehicles leased under the AESOP II Operating
Lease to the related Manufacturer in accordance with the instructions of the
Lender. Upon the occurrence of a Limited Liquidation Event of Default with
respect to any Series of Notes, AESOP Leasing II will return Vehicles leased
under the AESOP II Operating Lease to the related Manufacturer in
41
accordance with the instructions of the Lender to generate proceeds in an
amount which, together with the proceeds of Vehicles returned or sold pursuant
to the AESOP I Loan Agreements, will be sufficient to pay all interest on and
principal of such Series of Notes. To the extent any Manufacturer fails to
accept any such Vehicles under the terms of the applicable Manufacturer
Program, the Lender shall have the right to otherwise dispose of such Vehicles
and to direct AESOP Leasing II to dispose of such Vehicles in accordance with
its instructions. In addition, the Lender shall have all of the rights,
remedies, powers, privileges and claims vis-a-vis AESOP Leasing II and
Original AESOP, necessary or desirable to allow the Trustee to exercise the
rights, remedies, powers, privileges and claims given to the Trustee pursuant
to Sections 9.2 and 9.3 of the Base Indenture and each of AESOP Leasing II and
Original AESOP acknowledges that it has hereby granted the Lender all of the
rights, remedies, powers, privileges and claims granted to the Trustee
pursuant to Article 9 of the Base Indenture and that, under certain
circumstances set forth in the Base Indenture, the Trustee may act in lieu of
the Lender in the exercise of such rights, remedies, powers, privileges and
claims.
SECTION 12.4. Application of Proceeds. The proceeds of any
sale or other disposition on any date pursuant to Section 12.3 shall be
applied in the following order: (i) to the reasonable costs and expenses
incurred by the Lender in connection with such sale or disposition, including
any reasonable costs associated with repairing any Vehicles leased under the
AESOP II Operating Lease, and reasonable attorneys' fees in connection with
the enforcement of this Agreement; (ii) to the payment of accrued Loan
Interest and outstanding Loan Principal Amount, and all other amounts due
hereunder in the Related Month; and (iii) any remaining amounts to AESOP
Leasing II, or such Person as may be lawfully entitled thereto.
SECTION 13. GENERAL.
SECTION 13.1. Waiver; Amendments. No delay on the part of
the Lender or the holder of the Loan Note or other Liabilities in the exercise
of any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial exercise by any of them of any right,
42
power or remedy preclude other or further exercise thereof, or the exercise of
any other right, power or remedy. No amendment, modification or waiver of, or
consent with respect to, any provision of this Agreement or the Loan Note
shall in any event be effective unless (i) the same shall be writing and
signed and delivered by the Lender, AESOP Leasing II and Original AESOP and
consented to in writing by the (x) Trustee and (y) if such amendment,
modification, waiver or consent would materially adversely affect the rights
of the holders of the outstanding Preferred Stock, the holders of such
Preferred Stock, (ii) the Lender shall have received in writing confirmation
from each of the Rating Agencies that its then current rating with respect to
any outstanding Series of Notes or the Commercial Paper Notes will not be
reduced or withdrawn as a result thereof and (iii) the Rating Agency Consent
Condition shall have been satisfied; provided that any amendment or
modification of the Loan Note need only be signed by AESOP Leasing II.
SECTION 13.2. Confirmations. AESOP Leasing II and the Lender
(or the holder of the Loan Note) agree from time to time, upon written request
received by it from the other, to confirm to the other in writing the
aggregate unpaid Loan Principal Amount.
SECTION 13.3. Notices. All notices, amendments, waivers,
consents and other communications provided to any party hereto under this
Agreement shall be in writing and addressed, delivered or transmitted to such
party at its address or facsimile number set forth below its signature hereto
or at such other address or facsimile number as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if
transmitted by facsimile, shall be deemed given when transmitted upon receipt
of electronic confirmation of transmission.
SECTION 13.4. Taxes. AESOP Leasing II agrees to pay, and to
save the Trustee and the Lender harmless from all liability for, any document,
stamp, filing, recording, mortgage or other taxes (other than net income taxes
of the Lender) which may be payable in connection with the borrowings
hereunder or the execution, delivery, recording or filing of this Agreement or
of any other
43
instruments or documents provided for herein or delivered or to be delivered
hereunder or in connection herewith. All obligations provided for in this
Section 13.4 shall survive any termination of this Agreement.
SECTION 13.5. Indemnification. In consideration of the
Lender's execution and delivery of this Agreement and the Lender's extension
of the Loan Commitment, AESOP Leasing II hereby agrees to:
(a) indemnify, exonerate and hold the Lender and its
officers, directors, stockholders, employees, and agents (herein collectively
called "Lender Parties" and individually called a "Lender Party") free and
harmless from and against any and all claims, demands, actions, causes of
action, suits, losses, costs, charges, liabilities, damages, and expenses in
connection therewith (irrespective of whether such Lender Party is a party to
the action for which indemnification hereunder is sought), and including,
without limitation, reasonable attorneys' fees and disbursements (called in
this paragraph the "Indemnified Liabilities"), incurred by Lender Parties or
any of them as a result of, or arising out of, or relating to (i) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Loan made hereunder or involving any Loan
made hereunder, or (ii) the execution, delivery, performance or enforcement of
this Agreement and any instrument, document or agreement executed pursuant
hereto by any of the Lender Parties, or (iii) the ownership, operation,
maintenance, leasing, or titling of the Vehicles, except in each case, for any
such Indemnified Liabilities arising on account of the relevant Lender Party's
gross negligence or willful misconduct and, to the extent that the foregoing
undertaking may be unenforceable for any reason, AESOP Leasing II agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law; and
(b) indemnify and hold harmless the Trustee (and its
officers, directors, employees and agents) from and against any loss,
liability, expense, damage or injury suffered or sustained by reason of, or
arising out of or in connection with: (i) any acts or omissions of AESOP
Leasing II pursuant to this Agreement and (ii) the Trustee's appointment under
the Indenture and the
44
Trustee's performance of its obligations thereunder, or any document
pertaining to any of the foregoing to which the Trustee is a signatory,
including, but not limited to any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim; provided,
however, AESOP Leasing II shall have no duty to indemnify the Trustee to the
extent such loss, liability, expense, damage or injury suffered or sustained
is due to the Trustee's negligence or willful misconduct.
AESOP Leasing II agrees that the indemnification provided for in this Section
13.5 shall run directly to and be enforceable by an indemnified party subject
to the limitations hereof. The indemnification provided for in this Section
13.5 shall survive the termination of this Agreement, the Indenture and the
resignation or removal of the Trustee.
SECTION 13.6. Bankruptcy Petition. (a) Each of AESOP Leasing
II and Original AESOP hereby covenants and agrees that, prior to the date
which is one year and one day after the payment in full of (i) all Commercial
Paper Notes Outstanding and (ii) all Notes Outstanding, it will not institute
against, or join any other Person in instituting against, AFC-II any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceed-
ings or other similar proceeding under the laws of the United States or any
state of the United States. In the event that AESOP Leasing II or Original
AESOP takes action in violation of this Section 13.6, AFC-II agrees, for the
benefit of the Noteholders and the Commercial Paper Note holders,
respectively, that it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such a petition by AESOP Leasing II
or Original AESOP against AFC-II or commencement of such action and raise the
defense that each of AESOP Leasing II and Original AESOP has agreed in writing
not to take such action and should be estopped and precluded therefrom and
such other defenses, if any, as its counsel advises that it may assert. The
provisions of this Section 13.6 shall survive the termination of this
Agreement.
(b) AFC-II hereby covenants and agrees that, prior to the
date which is one year and one day after the
45
payment in full of (i) all Commercial Paper Notes Outstanding, (ii) all Notes
Outstanding and (iii) all Loans outstanding under this Agreement, it will not
institute against, or join any other Person in instituting against, AESOP
Leasing, Original AESOP, AESOP Leasing II, AFC, PVHC or Quartx any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States. In the event that AFC-II takes action with respect to AESOP
Leasing II or Original AESOP in violation of this Section 13.6, each of AESOP
Leasing II and Original AESOP agrees, for the benefit of the Noteholders and
the Commercial Paper Note Holders, respectively, that it shall file an answer
with the bankruptcy court or otherwise properly contest the filing of such a
petition by AFC-II against AESOP Leasing II or Original AESOP or commencement
of such action and raise the defense that AFC-II has agreed in writing not to
take such action and should be estopped and precluded therefrom and such other
defenses, if any, as its counsel advises that it may assert. The provisions of
this Section 13.6 shall survive the termination of this Agreement.
SECTION 13.7. Submission to Jurisdiction. The Lender may
enforce any claim arising out of this Agreement or the Loan Note in any
state or federal court having subject matter jurisdiction and located in New
York, New York. For the purpose of any action or proceeding instituted with
respect to any such claim, AESOP Leasing II hereby irrevocably submits to the
jurisdiction of such courts. Each of AESOP Leasing II and Original AESOP
irrevocably consents to the service of process out of said courts by mailing a
copy thereof, by registered mail, postage prepaid, to AESOP Leasing II or
Original AESOP, as the case may be, and agrees that such service, to the
fullest extent permitted by law, (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding
and (ii) shall be taken and held to be valid personal service upon and
personal delivery to it. Nothing herein contained shall affect the right of
the Trustee and the Lender to serve process in any other manner permitted by
law or preclude the Lender from bringing an action or proceeding in respect
hereof in any other country, state or place having jurisdiction over such
action. Each of AESOP Leasing II and Original AESOP hereby irrevocably waives,
46
to the fullest extent permitted by law, any objection which it may have or
hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court located in New York, New York and any
claim that any such suit, action or proceeding brought in such a court has
been brought in an inconvenient forum.
SECTION 13.8. Governing Law. THIS AGREEMENT AND THE LOAN
NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). Whenever possible
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement. All obligations of AESOP Leasing II
and Original AESOP and rights of the Lender and the holder of the Loan Note or
Liability expressed herein shall be in addition to and not in limitation of
those provided by applicable law or in any other written instrument or
agreement relating to any of the Liabilities.
SECTION 13.9. JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH
IT IS A PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR
ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR
ANY RELATED TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 13.10. Successors and Assigns. This Agreement shall
be binding upon AESOP Leasing II, Original AESOP, the Lender and their
respective successors and assigns, and shall inure to the benefit of AESOP
Leasing II, Original AESOP, the Lender, the Trustee as a third party
beneficiary and their respective successors and assigns; provided, however,
that neither AESOP Leasing II nor Original AESOP shall have the right to
assign its
47
rights or delegate its duties under this Agreement without (i) the Lender's
and the Trustee's prior written consent and (ii) receipt of written
confirmation from each of the Rating Agencies that its then current rating
will not be reduced or withdrawn with respect to the Commercial Paper Notes or
any outstanding Series of Notes as a result thereof. Each of AESOP Leasing II
and Original AESOP acknowledges that this Agreement and the Loan Note will be
assigned by the Lender to the Trustee pursuant to the Indenture, and hereby
agrees that, subject to the terms of the Indenture, the Trustee may exercise
all of the Lender's rights hereunder. This Agreement and the other Related
Documents contain the entire agreement of the parties hereto with respect to
the matters covered hereby.
SECTION 13.11. Tax Treatment of Loans. It is the intention
of the parties hereto that for U.S. federal income tax purposes each Loan made
hereunder will constitute indebtedness of AESOP Leasing II to the Lender and
that AESOP Leasing II shall be the owner of the Vehicles that are subject to
the AESOP II Operating Lease. The parties agree to take no position in any tax
return, filing or proceeding inconsistent with this provision.
SECTION 13.12. No Recourse. The obligations of AFC-II, AESOP
Leasing II and Original AESOP under this Agreement are solely the corporate
obligations of AFC-II, AESOP Leasing II and Original AESOP, respectively. No
recourse shall be had for the payment of any obligation or claim arising out
of or based upon this Agreement against any shareholder, employee, officer,
director or incorporator of AFC-II, AESOP Leasing II or Original AESOP.
SECTION 13.13. Consent to Amendment of Indenture by
Preferred Stockholders. AFC-II shall not consent to any amendment,
modification or waiver of the Indenture if such amendment, modification or
waiver would materially adversely affect the rights of the holders of the
outstanding Preferred Stock, unless the same shall be consented to in writing
by the holders of such Preferred Stock.
48
Delivered at New York, New York as of the day and year first
above written.
AESOP LEASING CORP. II
By:
-------------------------------
Name:
Title:
Address: c/o Lord Securities
Corporation
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
AESOP LEASING CORP.
By:
-------------------------------
Name:
Title:
Address: c/o Lord Securities
Corporation
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
AESOP FUNDING II L.L.C.
By:
-------------------------------
Name:
Title:
Address: c/o Lord Securities
Corporation
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
EXHIBIT A
TO THE LOAN
AGREEMENT
FORM OF LOAN NOTE _______, 1997
FOR VALUE RECEIVED, AESOP Leasing Corp. II, a Delaware corporation
(the "Borrower"), promises to pay to the order of AESOP Funding II L.L.C., a
Delaware limited liability company (the "Lender"), the aggregate unpaid Loan
Principal Amount of all Loans shown on the schedule attached hereto (and any
continuation thereof) provided, that the failure to so record any such
information or any error in so recording any such information shall not limit
or otherwise affect the actual obligations of the Borrower hereunder to repay
the Loan Principal Amount of all Loans made to it, together with all Loan
Interest accruing thereon, made by the Lender pursuant to that certain AESOP
II Loan Agreement, dated as of July 30, 1997 (together with all amendments,
supplements, amendment and restatements and other modifications, if any, from
time to time thereafter made thereto, the "Loan Agreement"), between the
Borrower, AESOP Leasing Corp., as Permitted Nominee of the Borrower, and the
Lender. Unless otherwise defined herein or the context otherwise requires,
terms used herein have the meanings provided in the Loan Agreement.
The Borrower also promises to pay interest on the unpaid Loan
Principal Amount of all Loans hereof from time to time outstanding from the
date hereof until maturity (whether by acceleration or otherwise) and, after
maturity, until paid, at the rates per annum and on the dates specified in the
Loan Agreement.
Payments of both principal and interest are to be made in lawful
money of the United States in same day or immediately available funds to the
account designated by the Lender pursuant to the Loan Agreement.
This Loan Note is the Loan Note referred to in the Loan Agreement and
is entitled to the benefits of the Loan Agreement, and reference is hereby
made to the Loan Agreement for a statement of the terms and conditions on
which the Borrower is permitted and required to make prepayments and
repayments of the Loan Principal Amount of the indebtedness evidenced by this
Loan Note and on which such indebtedness may be declared to be immediately due
and payable.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of
dishonor.
A-1
THIS LOAN NOTE HAS BEEN DELIVERED IN NEW YORK AND SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER AND GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
AESOP LEASING CORP. II
By____________________
Name:
Title:
A-2
TRANSACTIONS ON LOAN NOTE
==================================================================================================================
Amount of
Loan Outstanding
Principal Loan
Amount of Amount Principal
Loan Made Paid Amount Notation
Date This Date This Date This Date Made By
---- --------- --------- --------- -------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
==================================================================================================================
X-0
XXXXXXX X-0
TO THE LOAN
AGREEMENT
FORM OF LOAN REQUEST
AESOP Funding II L.L.C.
c/o Lord Securities Corporation
Two Wall Street, 19th Floor
New York, New York 10005
Attention: Xxxxxx X. Xxxxx
Ladies and Gentlemen:
This Loan Request is delivered to you pursuant to Section 3.2 of that
certain AESOP II Loan Agreement, dated as of July 30, 1997 (as amended,
supplemented, amended and restated or otherwise modified from time to time,
the "Loan Agreement"), between AESOP Leasing Corp. II, a Delaware corporation
("AESOP Leasing II"), AESOP Leasing Corp., as Permitted Nominee of the
Borrower, and AESOP Funding II L.L.C., a Delaware limited liability company
(the "Lender"). Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Loan Agreement.
AESOP Leasing II hereby requests that a Loan be made in the aggregate
Loan Principal Amount of $______________ on _______________ , 19 __.
AESOP Leasing II hereby acknowledges that the delivery of this Loan
Request and the acceptance by AESOP Leasing II of the proceeds of the Loan
requested hereby constitute a representation and warranty by AESOP Leasing II
that, on the date of such Loan, and before and after giving effect thereto and
to the application of the proceeds therefrom, all conditions set forth in
Section 11.2 of the Loan Agreement have been satisfied and all statements set
forth in Section 11.2 of the Loan Agreement are true and correct (in all
material respects to the extent any such statements do not incorporate a
materiality limitation in their terms).
Attached hereto as Annex I is a true and correct copy of the schedule
required to be delivered in connection herewith pursuant to Section 3.2 of the
Loan Agreement.
B-1-1
AESOP Leasing II agrees that if prior to the time of the Loan
requested hereby any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so notify the
Lender. Except to the extent, if any, that prior to the time of the Loan
requested hereby the Lender shall receive written notice to the contrary from
AESOP Leasing II, each matter certified to herein shall be deemed once again
to be certified as true and correct at the date of such Loan as if then made.
Please wire transfer the proceeds of the Loan to the account of AESOP
Leasing II at the financial institution set forth below:
Person to be Paid Name, Address, etc.
Amount to be ----------------- -------------------
Transferred Name Account No.
----------- ---- -----------
$_______ ____ ___________ ___________________
___________________
Attention: ___________________
AESOP Leasing II has caused this Loan Request to be executed and
delivered, and the certification and warranties contained herein to be made,
by its duly Authorized Officer this ____ day of ______________, 19__.
AESOP LEASING CORP. II
By__________________________
Name
Title:
B-1-2
ANNEX I
Vehicle Acquisition Schedule and Related Information
1. Principal amount of proposed Loan
2. Borrowing Date of proposed Loan
3. Vehicle Identification Number (VIN)
4. Summary of Vehicles being financed (including, for
Program Vehicles subject to the GM Repurchase Pro-
gram, the Designated Period for such Vehicles)
5. Each Vehicle is a Program Vehicles
6. Capitalized Cost (New Vehicles)
7. Net Book Value (Initial Vehicles)
X-0-0
XXXXXXX X-0
TO THE LOAN
AGREEMENT
FORM OF LOAN REQUEST RESPONSE
AESOP Leasing Corp. II
c/o Lord Securities Corporation
Two Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
_______________, 199__
Re: Loan Request Dated ___________________, 199__
Ladies and Gentlemen:
This Loan Request Response is delivered to you pursuant to Section
4.1 of that certain Loan Agreement, dated as of July 30, 1997 (as amended,
supplemented, amended and restated or otherwise modified from time to time,
the "Loan Agreement"), between AESOP Leasing Corp. II, a Delaware corporation
("AESOP Leasing II"), AESOP Leasing Corp., as Permitted Nominee of AESOP
Leasing II, and AESOP Funding II L.L.C., a Delaware limited liability company
(the "Lender"). Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings assigned to such terms in the
Loan Agreement.
Reference is hereby made to the Loan Request delivered to us today by
AESOP Leasing II (the "Loan Request"). The applicable rate of Loan Interest on
each Loan requested in the Loan Request is _%; provided, however, if the
Lender's Carrying Cost Interest Rate for the Related Month is higher than the
rate of Loan Interest specified herein, the Loan Interest payable on such
Loans shall be determined using the higher rate.
Very truly yours,
AESOP FUNDING II L.L.C.
By:____________________________
Name:
Title:
B-2-1
EXHIBIT C
TO THE LOAN
AGREEMENT
FORM OF PAYMENT
DEFICIT NOTICE
Xxxxxx Trust and Savings Bank, as Trustee
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Indenture Trust Administration
[Related Enhancement Provider]
[Address]
[ ], 19 _
Ladies and Gentlemen:
This Payment Deficit Notice is delivered to you pursuant to
Section 6.4 of the Loan Agreement, dated as of July 30, 1997 (as amended or
modified from time to time, the "Loan Agreement") between AESOP Funding II
L.L.C., a Delaware limited liability company, as Lender, AESOP Leasing Corp.,
as Permitted Nominee of the Borrower, and AESOP Leasing Corp. II ("AESOP
Leasing II"), a Delaware corporation, as Borrower. Terms used herein have the
meanings provided in the Loan Agreement.
AESOP Leasing II hereby notifies the Trustee and [Related
Enhancement Provider] that for the Related Month ended , 199[ ] [a Lease
Payment Deficit did not exist] [there was a Lease Payment Deficit as follows:
Series ___________: $__________________
Series ___________: $__________________
AESOP Leasing Corp. II
By:_______________________
Name:
Title:
C-1
SCHEDULE 8.11
Business Locations, Trade Names
State of
Principal
Place of States in which
Business Location Business Conducts Business
----------------- -------- -----------------
AESOP Leasing c/o Lord Securities New York New York
Corp. II Corporation
Two Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
