Exhibit 10.9

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

SECOND AMENDED AND RESTATED MASTER MOTOR VEHICLE OPERATING
LEASE AGREEMENT

dated as of June 3, 2004

 

between

 

AESOP LEASING L.P.,
as Lessor,

 

and

 

CENDANT CAR RENTAL GROUP, INC.,
as Lessee and as Administrator

 

As set forth in Section 27 hereof, Lessor has assigned to CRCF (as defined
herein) and CRCF has assigned to the Trustee (as defined herein) certain of its
right, title and interest in and to this lease. To the extent, if any, that this
lease constitutes chattel paper (as such term is defined in the uniform
commercial code as in effect in any applicable jurisdiction) no security
interest in this lease may be created through the transfer or possession of any
counterpart other than the original executed counterpart, which shall be
identified as the counterpart containing the receipt therefor executed by the
trustee on the signature page thereof.

[THIS IS NOT COUNTERPART NO. 1]

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

                              Page

--------------------------------------------------------------------------------

1.   DEFINITIONS     1  
 
                    2.   GENERAL AGREEMENT     2  

    2.1.     Lease and Acquisition of Vehicles     5  

    2.2.     Right of Lessee to Act as Lessor’s Agent     5  

    2.3.     Payment of Capitalized Cost by Lessor     5  

    2.4.     Non-Liability of Lessor     6  

    2.5.     Lessee’s Right to Purchase Vehicles     6  

    2.6.     Lessor’s Right to Cause Vehicles to be Sold     7  

    2.7.     Redesignation of Vehicles     8  

    2.8.     Limitations on the Acquisition or Redesignation of Certain Vehicles
    9  

    2.9.     Compliance with Master Exchange Agreement     9  
 
                    3.   TERM     9  

    3.1.     Vehicle Term     9  

    3.2.     Term     10  
 
                    4.   RENT AND CHARGES     11  

    4.1.     Payment of Rent     11  

    4.2.     Special Service Charges     11  

    4.3.     Net Lease     11  
 
                    5.   INSURANCE     12  

    5.1.     Personal Injury and Damage     12  

    5.2.     Delivery of Certificate of Insurance     12  

    5.3.     Changes in Insurance Coverage     12  
 
                    6.   RISK OF LOSS; CASUALTY AND INELIGIBLE VEHICLE
OBLIGATIONS     13  

    6.1.     Risk of Loss Borne by Lessee     13  

    6.2.     Casualty; Ineligible Vehicles     13  
 
                    7.   VEHICLE USE     13  
 
                    8.   LIENS     14  
 
                    9.   NON-DISTURBANCE     15  
 
                    10.   REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES
AND FINES     15  
 
                    11.   MAINTENANCE AND REPAIRS     15  
 
                    12.   VEHICLE WARRANTIES.     16  

(i)

--------------------------------------------------------------------------------

 

                     

    12.1.     No Lessor Warranties     16  

    12.2.     Manufacturer’s Warranties     16  
 
                    13.   VEHICLE USAGE GUIDELINES AND RETURN; SPECIAL DEFAULT
PAYMENTS; EARLY TERMINATION PAYMENTS     16  

    13.1.     Usage     16  

    13.2.     Return     17  

    13.3.     Special Default Payments     17  

    13.4.     Early Termination Payments     18  
 
                    14.   DISPOSITION PROCEDURE     18  
 
                    15.   ODOMETER DISCLOSURE REQUIREMENT     19  
 
                    16.   GENERAL INDEMNITY     19  

    16.1.     Indemnity by the Lessee     19  

    16.2.     Reimbursement Obligation by the Lessee     21  

    16.3.     Defense of Claims     21  
 
                    17.   ASSIGNMENT     22  

    17.1.     Right of the Lessor to Assign this Agreement     22  

    17.2.     Limitations on the Right of the Lessee to Assign this Agreement  
  22  
 
                    18.   DEFAULT AND REMEDIES THEREFOR     23  

    18.1.     Events of Default     23  

    18.2.     Effect of AESOP I Operating Lease Event of Default or Liquidation
Event of Default     24  

    18.3.     Rights of Lessor Upon AESOP I Operating Lease Event of Default,
Limited Liquidation Event of Default or Liquidation Event of Default     24  

    18.4.     Rights of Lender and Trustee Upon Liquidation Event of Default,
Limited Liquidation Event of Default and Non-Performance of Certain Covenants  
  25  

    18.5.     Measure of Damages     27  

    18.6.     Vehicle Return Default     27  

    18.7.     Application of Proceeds     29  
 
                    19.   MANUFACTURER EVENTS OF DEFAULT     29  
 
                    20.   [RESERVED]     29  
 
                    21.   [RESERVED]     29  
 
                    22.   CERTIFICATION OF TRADE OR BUSINESS USE     29  
 
                    23.   SURVIVAL     30  
 
                    24.   [RESERVED]     30  
 
                    25.   TITLE     30  

(ii)

--------------------------------------------------------------------------------

 

                      26.   [RESERVED]     30  
 
                   
27.
  RIGHTS OF LESSOR ASSIGNED     30  
 
                    28.   [RESERVED]     31  
 
                    29.   MODIFICATION AND SEVERABILITY     31  
 
                    30.   CERTAIN REPRESENTATIONS AND WARRANTIES     31  

    30.1.     Organization; Ownership; Power; Qualification     32  

    30.2.     Authorization; Enforceability     32  

    30.3.     Compliance     32  

    30.4.     Financial Information; Financial Condition     32  

    30.5.     Litigation     33  

    30.6.     Liens     33  

    30.7.     Employee Benefit Plans     33  

    30.8.     Investment Company Act     33  

    30.9.     Regulations T, U and X     34  

    30.10.     Records Locations; Jurisdiction of Organization     34  

    30.11.     Taxes     34  

    30.12.     Governmental Authorization     34  

    30.13.     Compliance with Laws     34  

    30.14.     Eligible Vehicles     35  

    30.15.     Supplemental Documents True and Correct     35  

    30.16.     Manufacturer Programs     35  

    30.17.     Absence of Default     35  

    30.18.     Title to Assets     35  

    30.19.     Burdensome Provisions     35  

    30.20.     No Adverse Change     36  

    30.21.     No Adverse Fact     36  

    30.22.     Accuracy of Information     36  

    30.23.     Solvency     36  

    30.24.     Payment Of Capitalized Cost     36  
 
                    31.   CERTAIN AFFIRMATIVE COVENANTS     37  

    31.1.     Corporate Existence; Foreign Qualification     37  

    31.2.     Books, Records and Inspections     37  

    31.3.     Insurance     37  

    31.4.     Manufacturer Programs     38  

    31.5.     Reporting Requirements     38  

    31.6.     Payment of Taxes; Removal of Liens     39  

    31.7.     Business     39  

    31.8.     Maintenance of Separate Existence     40  

    31.9.     Trustee as Lienholder     40  

    31.10.     Maintenance of the Vehicles     40  

    31.11.     Enhancement     40  

    31.12.     Manufacturer Payments     40  

(iii)

--------------------------------------------------------------------------------

 

                     

    31.13.     Accounting Methods; Financial Records     41  

    31.14.     Disclosure to Auditors     41  

    31.15.     Disposal of Non-Program Vehicles     41  

    31.16.     Perfection of Lessor’s Security Interest     41  
 
                    32.   CERTAIN NEGATIVE COVENANTS     41  

    32.1.     Mergers, Consolidations     41  

    32.2.     Other Agreements     41  

    32.3.     Liens     42  

    32.4.     Use of Vehicles     42  

    32.5.     Termination of Agreement     42  

    32.6.     Sublease Amendment     42  
 
                    33.   ADMINISTRATOR ACTING AS AGENT OF THE LESSOR     42  
 
                    34.   NO PETITION     42  
 
                    35.   CERTAIN AGREEMENTS RESPECTING THE MASTER EXCHANGE
AGREEMENT     43  
 
                    36.   SUBMISSION TO JURISDICTION     43  
 
                    37.   GOVERNING LAW     43  
 
                    38.   JURY TRIAL     44  
 
                    39.   NOTICES     44  
 
                    40.   [RESERVED]     45  
 
                    41.   TITLE TO MANUFACTURER PROGRAMS IN LESSOR     45  
 
                    42.   HEADINGS     45  
 
                    43.   EXECUTION IN COUNTERPARTS     45  
 
                    44.   EFFECTIVE DATE     46  
 
                    45.   NO RECOURSE     46  

      SCHEDULES AND ATTACHMENTS
Schedule 30.5
  Litigation
Schedule 30.10
  Jurisdiction of Organization; Records and Business Locations
Schedule 30.13
  Compliance with Law
 
   
ATTACHMENT A
  Vehicle Acquisition Schedule and Related Information
 
   
ATTACHMENT B
  Form of Power of Attorney

(iv)

--------------------------------------------------------------------------------

 

     
ATTACHMENT C
  Form of Sublease

(v)

--------------------------------------------------------------------------------

 

SECOND AMENDED AND RESTATED MASTER MOTOR VEHICLE
OPERATING LEASE AGREEMENT

This Second Amended and Restated Master Motor Vehicle Operating Lease Agreement
(this “Agreement”), dated as of June 3, 2004, is made by and between AESOP
LEASING L.P., a Delaware limited partnership, as lessor (the “Lessor”), and
CENDANT CAR RENTAL GROUP, INC., a Delaware corporation (“CCRG”), as lessee (in
such capacity, the “Lessee”) and as administrator (in such capacity, the
“Administrator”).

W I T N E S S E T H :

WHEREAS, immediately prior to this Agreement becoming effective, the Lessor,
Avis Rent A Car System, Inc. (“ARAC”), as lessee and as administrator, and Avis
Group Holdings Inc. (“AGH”), as guarantor, are parties to an Amended and
Restated Master Motor Vehicle Operating Lease Agreement, dated as of
September 15, 1998 (the “Prior AESOP I Operating Lease”), pursuant to which the
Lessor leases Program Vehicles and Non-Program Vehicles of one or more
Manufacturers to ARAC, and AGH guarantees certain obligations of the lessees
thereunder;

WHEREAS, immediately prior to this Agreement becoming effective, ARAC and AGH
each assigned all of its respective rights, interests and obligations under the
Prior AESOP I Operating Lease to CCRG, pursuant to an Assignment and Assumption
Agreement, dated as of the date hereof, among ARAC, AGH and CCRG;

WHEREAS, the parties hereto now wish to amend and restate the Prior AESOP I
Operating Lease in order to eliminate the guarantee by AGH of the obligations of
the lessees thereunder and to amend certain other provisions; and

WHEREAS, the Lessor desires to lease to the Lessee and the Lessee desires to
lease from the Lessor both Program Vehicles and Non-Program Vehicles financed by
the Lessor with the proceeds of Loans and other available funds for use in the
daily rental car business of the Lessee or a Permitted Sublessee;

NOW, THEREFORE, in consideration of the foregoing premises, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree that the Prior AESOP I Operating Lease is
hereby amended and restated as follows:

1.     DEFINITIONS. Unless otherwise specified herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Definitions List
attached as Schedule I to the Second Amended and Restated Base Indenture, dated
as of June 3, 2004 (the “Base Indenture”), between Cendant Rental Car Funding
(AESOP) LLC (“CRCF”), as Issuer, and The Bank of New York, as Trustee, as such
Definitions List may from time to time be amended in accordance with the terms
of the Base Indenture.

 

--------------------------------------------------------------------------------

 

2.     GENERAL AGREEMENT. (a) The Lessee and the Lessor intend that this
Agreement is a lease and that the relationship between the Lessor and the Lessee
pursuant hereto shall always be only that of lessor and lessee, and the Lessee
hereby declares, acknowledges and agrees that the Lessor is the owner of, and
the Lessor or its Permitted Nominee holds legal title to, the Vehicles. The
Lessee shall not acquire by virtue of this Agreement any right, equity, title or
interest in or to any Vehicles, except the right to use the same under the terms
hereof. The parties agree that this Agreement is a “true lease” and agree to
treat this Agreement as a lease for all purposes, including tax, accounting and
otherwise and each party hereto will take no position on its tax returns and
filings contrary to the position that the Lessor is the owner of the Vehicles
for federal and state income tax purposes.

(b)     If, notwithstanding the intent of the parties to this Agreement, this
Agreement is characterized by any third party as a financing arrangement or as
otherwise not constituting a “true lease,” then it is the intention of the
parties that this Agreement shall constitute a security agreement under
applicable law, and, to secure all of its obligations under this Agreement, the
Lessee hereby grants to the Lessor a security interest in all of the Lessee’s
right, title and interest, if any, in and to all of the following assets,
property and interests in property, whether now owned or hereafter acquired or
created:

(i)     the rights of the Lessee under this Agreement, as such Agreement may be
amended, modified or supplemented from time to time in accordance with its
terms, and any other agreements related to or in connection with this Agreement,
to which the Lessee is a party (the “Lessee Agreements”), including, without
limitation, (a) all monies, if any, due and to become due to the Lessee from any
other Person under or in connection with any of the Lessee Agreements, whether
payable as rent, guaranty payments, fees, expenses, costs, indemnities,
insurance recoveries, damages for the breach of any of the Lessee Agreements or
otherwise, (b) all rights, remedies, powers, privileges and claims of the Lessee
against any other party under or with respect to the Lessee Agreements (whether
arising pursuant to the terms of such Lessee Agreements or otherwise available
to the Lessee at law or in equity), including the right to enforce any of the
Lessee Agreements and to give or withhold any and all consents, requests,
notices, directions, approvals, extensions or waivers under or with respect to
the Lessee Agreements or the obligations and liabilities of any party
thereunder, (c) all liens and property from time to time purporting to secure
payment of the obligations and liabilities of the Lessee arising under or in
connection with the Lessee Agreements, and any documents or agreements
describing any collateral securing such obligations or liabilities and (d) all
guarantees, insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such obligations and
liabilities of the Lessee pursuant to the Lessee Agreements;

(ii)     all Vehicles leased by the Lessee from the Lessor under this Agreement,
which, notwithstanding that this Agreement is intended to convey only a
leasehold interest, are determined to be owned by the Lessee or any Permitted
Sublessee, and all Certificates of Title with respect to such Vehicles;

(iii)     all right, title and interest of the Lessee in, to and under any
Manufacturer Programs, including any amendments thereof, and all monies due and
to become due

2

--------------------------------------------------------------------------------

 

thereunder, in each case in respect of the Vehicles leased hereunder which,
notwithstanding that this Agreement is intended to convey only a leasehold
interest, are determined to be owned by the Lessee, 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 to the Lessee or the
Lessor in respect of purchases of vehicles under the Manufacturer Programs) and
all rights to compel performance and otherwise exercise remedies thereunder;

(iv)     all right, title and interest of the Lessee in and to any Proceeds from
the sale of the Vehicles leased hereunder (including, without limitation, the
sale of any such Vehicles by the Intermediary) which, notwithstanding that this
Agreement is intended to convey only a leasehold interest, are determined to be
owned by the Lessee, including all monies due in respect of such Vehicles,
whether payable as the purchase price of such Vehicles, as auction sales
proceeds, or as fees, expenses, costs, indemnities, insurance recoveries, or
otherwise (including all upfront incentive payments payable by Manufacturers to
the Lessee or the Lessor in respect of purchases of Non-Program Vehicles);

(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 hereunder;

(vi)     all additional property that may from time to time hereafter be
subjected to the grant and pledge under this Agreement, as same may be modified
or supplemented from time to time, by the Lessee or by anyone on its behalf; and

(vii)     all Proceeds of any and all of the foregoing including, without
limitation, payments under insurance (whether or not the Lessor is named as the
loss payee thereof) and cash.

(c)     To secure all of the Lessee’s obligations under this Agreement, the
Lessee hereby grants to the Lessor a security interest in all of the Lessee’s
right, title and interest, in and to all of the following assets, property and
interests in property, if any, whether now owned or hereafter acquired or
created (the “Sublease Collateral”): the rights of the Lessee under each
Sublease entered into from time to time relating to the Vehicles leased
hereunder, as each such Sublease may be amended, modified or supplemented from
time to time in accordance with its terms, including, without limitation, (i)
all monies due and to become due to the Lessee from any Permitted Sublessee or
any other Person under or in connection with each such Sublease, whether payable
as rent, guaranty payments, fees, expenses, costs, indemnities, insurance
recoveries, damages for the breach of such Sublease or otherwise, (ii) all
rights, remedies, powers, privileges and claims of the Lessee against any
Permitted Sublessee or any other party under or with respect to each such
Sublease (whether arising pursuant to the terms of such Sublease or otherwise
available to the Lessee at law or in equity), including the right to enforce
such Sublease and to give or withhold any and all consents, requests, notices,
directions, approvals, extensions or waivers under or with respect to such
Sublease or the obligations and

3

--------------------------------------------------------------------------------

 

liabilities of any party thereunder, (iii) all liens and property from time to
time purporting to secure payment of the obligations and liabilities of a
Permitted Sublessee arising under or in connection with each such Sublease, and
any documents or agreements describing any collateral securing such obligations
or liabilities, (iv) all guarantees, insurance and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such obligations and liabilities of such Permitted Sublessee pursuant
to such Sublease and (v) all Proceeds of any and all of the foregoing. The
Lessor shall have all of the rights and remedies of a secured party with respect
to each Sublease, including, without limitation, the rights and remedies granted
under the UCC.

(d)     To secure the CRCF Obligations, the Lessee hereby grants to the Trustee,
on behalf of the Secured Parties, a first-priority security interest in all of
the Lessee’s right, title and interest, if any, in and to all of the collateral
described in Sections 2(b) and 2(c) above, whether now owned or hereafter
acquired or created. 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, the Trustee shall have all of the rights and remedies of a
secured party, including, without limitation, the rights and remedies granted
under the UCC.

(e)     The Lessee agrees to deliver to the Lessor, the Lender and the Trustee
on or before the Restatement Effective Date:

(i)     a written search report from a Person satisfactory to the Lessor, the
Lender and the Trustee listing all effective financing statements that name the
Lessee as debtor or assignor, and that are filed in the jurisdictions in which
filings were made pursuant to clause (ii) below, together with copies of such
financing statements, and tax and judgment lien search reports from a Person
satisfactory to the Lessor, the Lender and the Trustee showing no evidence of
liens filed against the Lessee that purport to affect any Vehicles leased
hereunder or any Collateral under the Indenture; and

(ii)     draft financing statements on Form UCC-1 to be filed in the
jurisdiction where the Lessee is located under Section 9-307 of the UCC naming
the Lessee, as debtor, the Lessor, as secured party, and the Trustee, as
assignee of the secured party, covering the collateral described in
Sections 2(b) and (c) hereof.

(f)     The Lessee hereby authorizes each of the Lessor and the Trustee to file
(provided that the Trustee shall have no obligation to so file), or cause to be
filed, financing or continuation statements, and amendments thereto and
assignments thereof, under the UCC in order to perfect its interest in the
security granted pursuant to Section 2(b).

(g)     The Lessee agrees to file, or cause to be filed, the financing
statements delivered in draft form pursuant to Section 2(e)(ii) on or before the
third (3rd) Business Day following the Restatement Effective Date.

2.1.     Lease and Acquisition of Vehicles. From time to time, subject to the
terms and provisions hereof, the Lessor agrees to lease to the Lessee and the
Lessee agrees to lease from the Lessor, subject to the terms hereof, (i) the new
vehicles identified in vehicle orders (each such vehicle order, a “Vehicle
Order”) placed by the Lessee pursuant to the terms of the

4

--------------------------------------------------------------------------------

 

Manufacturer Programs with respect to Program Vehicles and Non-Program Vehicles
(to the extent such Non-Program Vehicles are subject to a Manufacturer Program)
and as otherwise agreed by the Lessor, the Lessee and a dealer with respect to
other Non-Program Vehicles and (ii) the Vehicles identified in the computer file
delivered by the Lessee to the Trustee on the date hereof which were leased
pursuant to the Prior AESOP I Operating Lease immediately prior to the
effectiveness of this Agreement. If requested by the Lessor, the Lessee shall
make each Vehicle Order with respect to each Vehicle leased hereunder available
to the Lessor, together with a schedule containing the information with respect
to such Vehicle included within such Vehicle Order as is set forth in Attachment
A hereto (each, a “Vehicle Acquisition Schedule”), or in such form as is
otherwise requested by the Lessor. In addition, the Lessee agrees to provide
such other information regarding such Vehicles as the Lessor may require from
time to time. This Agreement, together with the Manufacturer Programs and any
other related documents attached to this Agreement or submitted with a Vehicle
Order (collectively, the “Supplemental Documents”), will constitute the entire
agreement regarding the leasing of Vehicles by the Lessor to the Lessee.

2.2.     Right of Lessee to Act as Lessor’s Agent. The Lessor agrees that the
Lessee may act as the Lessor’s agent in placing Vehicle Orders on behalf of the
Lessor, as well as filing claims on behalf of the Lessor for damage in transit,
and other Manufacturer delivery claims related to the Vehicles leased hereunder;
provided, however, that the Lessor may hold the Lessee liable for losses due to
the Lessee’s actions, or failure to act, in performing as the Lessor’s agent in
accordance with the terms hereof. In addition, the Lessor agrees that the Lessee
may make arrangements for delivery of Vehicles leased hereunder to a location
selected by the Lessee at its expense. The Lessee agrees to accept Vehicles
leased hereunder as produced and delivered except that the Lessee will have the
option to reject any such Vehicle that may be rejected pursuant to the terms of
the applicable Manufacturer Program (with respect to Program Vehicles and
Non-Program Vehicles subject to a Manufacturer Program), or in accordance with
its customary business practices with respect to other Non-Program Vehicles. The
Lessee, acting as agent for the Lessor, shall be responsible for pursuing any
rights of the Lessor with respect to the return to the Manufacturer of any
Vehicle leased hereunder that has been rejected pursuant to the preceding
sentence. The Lessee agrees that all Program Vehicles ordered as provided herein
shall be ordered utilizing the procedures consistent with an Eligible
Manufacturer Program. Without limiting the foregoing, the Lessee agrees to give
immediate notice to the Lessor, in such form and to such address as the Lessor
may from time to time specify and in accordance with the terms of the Master
Exchange Agreement, of each acceptance and of any rejection of any Program
Vehicle identified by the Lessor as Replacement Property.

2.3.     Payment of Capitalized Cost by Lessor. Upon delivery of any new
Vehicle, the Lessor shall pay to the authorized dealer, if any, that sold such
Vehicle to the Lessor, the Capitalized Cost for such Vehicle and the Lessee
shall pay all applicable costs and expenses of freight, packing, handling,
storage, shipment and delivery of such Vehicle, and sales and use tax (if any),
to the extent that the same have not been included in the Capitalized Cost for
such Vehicle.

2.4.     Non-Liability of Lessor. The Lessor shall not be liable to the Lessee
for any failure or delay in obtaining Vehicles or making delivery thereof. AS
BETWEEN THE LESSOR AND THE LESSEE, ACCEPTANCE FOR LEASE OF THE VEHICLES LEASED

5

--------------------------------------------------------------------------------

 

HEREUNDER SHALL CONSTITUTE THE LESSEE’S ACKNOWLEDGMENT AND AGREEMENT THAT THE
LESSEE HAS FULLY INSPECTED SUCH VEHICLES, THAT SUCH VEHICLES ARE IN GOOD ORDER
AND CONDITION AND ARE OF THE MANUFACTURE, DESIGN, SPECIFICATIONS AND CAPACITY
SELECTED BY THE LESSEE, THAT THE LESSEE IS SATISFIED THAT THE SAME ARE SUITABLE
FOR THIS USE AND THAT THE LESSOR IS NOT A MANUFACTURER OR ENGAGED IN THE SALE OR
DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY
REPRESENTATION, WARRANTY OR COVENANT WITH RESPECT TO MERCHANTABILITY, CONDITION,
QUALITY, DURABILITY OR SUITABILITY OF SUCH VEHICLES IN ANY RESPECT OR IN
CONNECTION WITH OR FOR THE PURPOSES OR USES OF THE LESSEE, OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, WITH RESPECT THERETO. The Lessor shall not be liable for any failure or
delay in delivering any Vehicle ordered for lease pursuant to this Agreement, or
for any failure to perform any provision hereof, resulting from fire or other
casualty, natural disaster, riot, strike or other labor difficulty, governmental
regulation or restriction, or any cause beyond the Lessor’s direct control. IN
NO EVENT SHALL THE LESSOR BE LIABLE FOR ANY INCONVENIENCES, LOSS OF PROFITS OR
ANY OTHER CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES RESULTING FROM ANY DEFECT
IN OR ANY THEFT, DAMAGE, LOSS OR FAILURE OF ANY VEHICLE, AND THERE SHALL BE NO
ABATEMENT OF MONTHLY BASE RENT, SUPPLEMENTAL RENT OR OTHER AMOUNTS PAYABLE
HEREUNDER BECAUSE OF THE SAME.

2.5.     Lessee’s Right to Purchase Vehicles. The Lessee shall have the option,
exercisable with respect to any Vehicle during the Vehicle Term with respect to
such Vehicle, to purchase any Vehicle leased hereunder at the greater of (i) the
Termination Value or (ii) the Market Value of such Vehicle, in each case, as of
the Payment Date with respect to the Related Month in which the Lessee elects to
purchase such Vehicle (the greater of such amounts being referred to as the
“Vehicle Purchase Price”), in which event the Lessee will pay the Vehicle
Purchase Price to the Lessor on or before such Payment Date and the Lessee will
pay on or before such Payment Date all accrued and unpaid Monthly Base Rent and
any Supplemental Rent then due and payable with respect to such Vehicle through
such Payment Date. The Lessor shall request title to any such Vehicle to be
transferred to the Lessee and the Administrator shall request the Trustee to
cause its Lien to be removed from the Certificate of Title for such Vehicle,
concurrently with or promptly after the Vehicle Purchase Price for such Vehicle
(and any such unpaid Monthly Base Rent and Supplemental Rent) is deposited in
the Collection Account. Notwithstanding the foregoing, with respect to any
Vehicle that, when acquired by the Lessor, was a Replacement Vehicle, and with
respect to any other Vehicle that the Lessor may wish to designate as
Relinquished Property, the Lessee’s right to purchase shall be solely in the
discretion of the Lessor.

2.6.     Lessor’s Right to Cause Vehicles to be Sold. (a) If the Lessee does not
elect to purchase any Vehicle leased hereunder pursuant to Section 2.5 (or,
pursuant to the last sentence of such Section 2.5, is not permitted to purchase
a particular Vehicle), then:

(i) notwithstanding anything to the contrary contained herein, with respect to
Program Vehicles leased hereunder, and subject to Sections 2.5 and 13.2, the
Lessor shall

6

--------------------------------------------------------------------------------

 

have the right, at any time following the date ninety (90) days prior to the
expiration of the Maximum Term for such Program Vehicle, to require that the
Lessee or another Person designated by the Lessor, which Person’s compensation
will be payable solely from the proceeds from the sale of such Vehicle, exercise
commercially reasonable efforts to arrange for the sale of such Vehicle to a
third party for the Vehicle Purchase Price with respect to such Vehicle, in
which event the Lessee or such other designated Person shall, until not later
than the date thirty (30) days prior to the expiration of such Maximum Term,
exercise commercially reasonable efforts to arrange for the sale of such Vehicle
to a third party for a price (as reduced by the amount of compensation to be
paid to any such other designated Person) equal to or greater than the
Termination Value thereof. If a sale of such Program Vehicle is arranged by the
Lessee or such other designated Person prior to such date thirty (30) days prior
to the expiration of such Maximum Term, then (i) the Lessee or such other
designated Person shall deliver such Vehicle to the purchaser thereof, (ii) the
Lessee or such other designated Person shall cause to be delivered to the Lessor
the funds paid for such Vehicle by the purchaser and (iii) the Administrator
shall request the Trustee to cause its Lien to be removed from the Certificate
of Title for such Vehicle. If the Lessee or such other designated Person is
unable to arrange for a sale of such Vehicle prior to such date thirty (30) days
prior to the expiration of such Maximum Term, then the Lessee or such other
designated Person shall cease attempting to arrange for such a sale and the
Lessee shall return or cause to be returned such Vehicle, if a Manufacturer
Event of Default has not occurred, to the applicable Manufacturer as provided in
Section 13.2(a) (and, if so requested by the Lessor, shall cooperate with the
Lessor to effect any such return in accordance with the provisions of the Master
Exchange Agreement); and

(ii)     with respect to Non-Program Vehicles leased hereunder and subject to
the exercise of the Lessee’s rights under Section 2.5, the Lessee shall use
commercially reasonable efforts to arrange for the sale of each Non-Program
Vehicle leased hereunder to a third party for the Vehicle Purchase Price with
respect to such Vehicle on or prior to the date that is the last Business Day of
the month that is eighteen (18) months after the month in which the Vehicle
Operating Lease Commencement Date occurs with respect to such Vehicle. The
Lessee may return or cause to be returned a Non-Program Vehicle subject to a
Manufacturer Program to the applicable Manufacturer under such Manufacturer
Program; provided that (i) the Repurchase Price of such Vehicle, together with
any Special Default Payments payable by the Lessee with respect to such Vehicle,
is at least equal to the Termination Value with respect to such Vehicle, (ii) no
Manufacturer Event of Default shall have occurred with respect to such
Manufacturer and (iii) by the date on which such Vehicle is returned to the
Manufacturer, the Trustee and the Lender shall have received a copy of an
Assignment Agreement with respect to such Manufacturer Program. Notwithstanding
the disposition of a Non-Program Vehicle by the Lessee prior to the applicable
Vehicle Operating Lease Expiration Date, the Lessee shall pay to the Lessor all
accrued and unpaid Monthly Base Rent and any Supplemental Rent then due and
payable with respect to such Non-Program Vehicle through the Payment Date with
respect to the Related Month during which such disposition occurred, unless such
Non-Program Vehicle is a Standard Casualty or becomes an Ineligible Vehicle,
payment for which will be made in accordance with Section 6 hereof. If a sale of
such Non-Program Vehicle is arranged by the Lessee pursuant to this
Section 2.6(a)(ii),

7

--------------------------------------------------------------------------------

 

then (x) the Lessee shall deliver the Vehicle to the purchaser thereof, (y) the
Lessee shall cause to be delivered to the Lessor the funds paid for such Vehicle
by the purchaser and (z) the Administrator shall request the Trustee to cause
its Lien to be removed from the Certificate of Title for such Vehicle.

(b)     In the event any Vehicle or Vehicles leased hereunder are not purchased
by the Lessee pursuant to Section 2.5 hereof or sold to a third party or
returned to a Manufacturer pursuant to Section 2.6(a), then, in the case of a
Non-Program Vehicle, the Lessee shall return or cause to be returned such
Vehicle to the Lessor on the Payment Date with respect to the Related Month in
which the applicable Vehicle Operating Lease Expiration Date falls, or, in the
case of a Program Vehicle, the Lessee shall dispose of such Vehicle in
accordance with the procedures set forth in Section 13.2(a), and, in each case,
the Lessee shall pay an amount equal to all accrued but unpaid Monthly Base Rent
and all Supplemental Rent payable with respect to such Vehicles through the
Payment Date on which such Non-Program Vehicle was returned or with respect to
the Related Month during which such Program Vehicle was returned to its
Manufacturer pursuant to Section 13.2(a).

2.7.     Redesignation of Vehicles. At any time, including without limitation,
if a Program Vehicle becomes ineligible for repurchase by its Manufacturer or
for sale at auction under the applicable Manufacturer Program or the return of a
Program Vehicle to the applicable Manufacturer cannot otherwise be effected for
any reason (including by reason of the occurrence of a Manufacturer Event of
Default with respect to the Manufacturer of such Program Vehicle or the failure
of a Manufacturer to accept such Program Vehicle for repurchase and acceptance
is not expected upon a subsequent return), the Lessee may redesignate a Program
Vehicle as a Non-Program Vehicle; provided that (i) no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) no
violation of the requirements of Section 10.13 of the AESOP I Operating Lease
Loan Agreement or Section 2.8 hereof would be caused by such redesignation;
provided, further, in each case, that (x) the Lessee shall pay to the Lessor on
the next succeeding Payment Date an amount equal to the difference, if any,
between the Net Book Value of such Vehicle as of the date of redesignation and
an amount equal to the Net Book Value of such Vehicle as of the date of
redesignation had such Vehicle been a Non-Program Vehicle at the time of
delivery thereof pursuant to Section 2.1 and (y) the Required Enhancement Amount
required under each Supplement, after giving effect to such redesignation, shall
be satisfied on the date of redesignation.

2.8.     Limitations on the Acquisition or Redesignation of Certain Vehicles.
Unless otherwise specified in a Supplement or unless waived by the Required
Noteholders as specified in a Supplement, (a) the aggregate Net Book Value of
all Vehicles (or such portion thereof as is specified in such Supplement)
manufactured by Manufacturers other than Eligible Non-Program Manufacturers and
leased under this Agreement (after giving effect to the inclusion of such
Vehicle under this Agreement) and the Finance Lease as of such date shall not
exceed any applicable Maximum Non-Eligible Manufacturer Amount, (b) the
aggregate Net Book Value of all Non-Program Vehicles (or such portion thereof as
is specified in such Supplement) leased under this Agreement (after giving
effect to the inclusion or redesignation, as the case may be, of such Vehicle
under this Agreement) and the Finance Lease as of such date shall not exceed any
applicable Maximum Non-Program Vehicle Amount, (c) the aggregate Net Book Value
of all Vehicles (or such portion thereof as is specified in such Supplement)
manufactured by a

8

--------------------------------------------------------------------------------

 

particular Manufacturer or group of Manufacturers and leased under the Leases
(after giving effect to the inclusion of such Vehicle under this Agreement) as
of such date shall not exceed any applicable Maximum Manufacturer Amount,
(d) the aggregate Net Book Value of all Vehicles (or such portion thereof as is
specified in such Supplement) titled in the States of Ohio, Oklahoma and
Nebraska and leased under this Agreement (after giving effect to the inclusion
of such Vehicle under this Agreement) and the AESOP II Operating Lease as of
such date shall not exceed any applicable Maximum Specified States Amount and
(e) after giving effect to the inclusion or redesignation of such Vehicle under
this Agreement, there shall not be a failure or violation of any other
conditions, requirements or restrictions with respect to the leasing of Eligible
Vehicles under this Agreement as is specified in any Supplement.

2.9.     Compliance with Master Exchange Agreement. In connection with (x) any
return of a Program Vehicle leased hereunder by the Lessee to a Manufacturer
pursuant to Section 13.2(a) or (y) any sale by the Lessee of a Non-Program
Vehicle leased hereunder to a third party or any return by the Lessee to a
Manufacturer of a Non-Program Vehicle leased hereunder subject to a Manufacturer
Program, in each case pursuant to Section 2.6(a)(ii), the Lessee agrees, to the
extent requested by the Lessor, to cooperate with the Lessor in effecting such
sales or returns on behalf of the Lessor pursuant to, and in accordance with,
the terms of the Master Exchange Agreement.

3.          TERM.

3.1.     Vehicle Term. (a) The “Vehicle Operating Lease Commencement Date” for
each Vehicle shall mean the day as referenced in the Vehicle Acquisition
Schedule (including any Vehicle Acquisition Schedule delivered under the Prior
AESOP I Operating Lease) with respect to such Vehicle, but in no event shall
such date be a date later than the date that funds are expended or allocated by
the Lessor or the Intermediary to acquire such Vehicle. The “Vehicle Term” with
respect to each Vehicle shall extend from the Vehicle Operating Lease
Commencement Date through the earliest of (i) if such Vehicle is a Program
Vehicle or a Non-Program Vehicle returned to a Manufacturer under a Manufacturer
Program, the Turnback Date for such Vehicle, (ii) if such Vehicle is sold to a
third party (other than through an auction conducted by or through or arranged
by the Manufacturer pursuant to its Manufacturer Program), the date on which
funds in respect of such sale are first deposited in either the Collection
Account or a Joint Collection Account (by such third party or by the Lessee on
behalf of such third party) and such funds equal or exceed the Termination Value
of such Vehicle, (iii) if such Vehicle becomes a Standard Casualty or an
Ineligible Vehicle, the date funds in the amount of the Termination Value
thereof are deposited in the Collection Account by the Lessee, (iv) the date
that such Vehicle is purchased by the Lessee pursuant to Section 2.5 hereof and
the Vehicle Purchase Price with respect to such purchase (and any unpaid Monthly
Base Rent and Supplemental Rent with respect to such Vehicle) is deposited in
the Collection Account by the Lessee and (v) the date that is the last Business
Day of the month that is eighteen (18) months after the month in which the
Vehicle Operating Lease Commencement Date occurs with respect to such Vehicle
(the earliest of such five dates described in the foregoing clauses (i) through
(v) being referred to as the “Vehicle Operating Lease Expiration Date”).

(b)      Subject to the provisions of Sections 2.5 and 2.6, the Lessee shall use
its commercially reasonable efforts to return or cause to be returned each
Program Vehicle leased

9

--------------------------------------------------------------------------------

 

hereunder to the related Manufacturer (or such Manufacturer’s agent or as
otherwise directed by such Manufacturer in accordance with such Manufacturer
Program) (a) not prior to the end of the minimum holding period specified in the
related Manufacturer Program (prior to which the Lessor may not return such
Program Vehicle without penalty (the “Minimum Term”)) and (b) not later than the
end of the maximum holding period (after which the Lessor may not return such
Program Vehicle without penalty (the “Maximum Term”)); provided, however, that
the Lessee shall in any case return or cause to be returned each Program Vehicle
leased hereunder to the related Manufacturer (or such Manufacturer’s agent or as
otherwise directed by such Manufacturer in accordance with such Manufacturer
Program) pursuant to Section 13.2 on or before the date that is the last
Business Day of the month that is eighteen (18) months after the month in which
the Vehicle Operating Lease Commencement Date occurs with respect to such
Vehicle. The Lessee will pay to the Lessor the equivalent of the Monthly Base
Rent for the Minimum Term with respect to any Program Vehicles returned before
the Minimum Term plus any early turn back surcharges payable by the Lessor or
deductible from the Repurchase Price of such Vehicle regardless of actual usage,
unless such Vehicle is a Standard Casualty or becomes an Ineligible Vehicle, in
which case, the disposition of such Vehicle will be handled in accordance with
Section 6 hereof.

3.2.     Term. The “AESOP I Operating Lease Commencement Date” shall mean the
Initial Closing Date. The “AESOP I Operating Lease Expiration Date” shall mean
the latest of (i) the date of the payment in full of all Loans (including any
Loan Interest thereon) the proceeds of which were used by the Lessor to finance
the purchase of Vehicles subject to this Agreement, (ii) the Vehicle Operating
Lease Expiration Date for the last Vehicle leased hereunder and (iii) the date
on which all amounts payable hereunder and under the Loan Agreements have been
paid in full. The “Term” of this Agreement shall mean the period commencing on
the AESOP I Operating Lease Commencement Date and ending on the AESOP I
Operating Lease Expiration Date.

4.          RENT AND CHARGES. The Lessee will pay Monthly Base Rent and any
Supplemental Rent due and payable on a monthly basis (and any Special Service
Charges due and payable) as set forth in this Section 4.

4.1.     Payment of Rent. On each Payment Date the Lessee shall pay in
immediately available funds to the Lessor not later than 11:00 a.m., New York
City time, on such Payment Date (i) all Monthly Base Rent that has accrued
during the Related Month with respect to each Vehicle leased hereunder during or
prior to the Related Month and (ii) all Supplemental Rent due and payable on
such Payment Date.

4.2.     Special Service Charges. On each Payment Date, or on such other
Business Day as the Lessor shall request, the Lessee shall pay in immediately
available funds to, or at the direction of, the Lessor, not later than
11:00 a.m., New York City time, on such date, the Special Service Charges
determined by the Lessor to be due and payable hereunder on such date with
respect to Vehicles leased hereunder. The provisions of this Section 4.2 will
survive the expiration or earlier termination of the Term.

4.3.     Net Lease. THIS AGREEMENT SHALL BE A NET LEASE, AND THE LESSEE’S
OBLIGATION TO PAY ALL MONTHLY BASE RENT, SUPPLEMENTAL RENT

10

--------------------------------------------------------------------------------

 

AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE AND UNCONDITIONAL, AND SHALL NOT BE
SUBJECT TO ANY ABATEMENT, SETOFF, COUNTERCLAIM, DEDUCTION OR REDUCTION FOR ANY
REASON WHATSOEVER. The obligations and liabilities of the Lessee hereunder shall
in no way be released, discharged or otherwise affected (except as may be
expressly provided herein including, without limitation, the right of the Lessee
to reject Vehicles pursuant to Section 2.2 hereof) for any reason, including,
without limitation: (i) any defect in the condition, merchantability, quality or
fitness for use of the Vehicles or any part thereof; (ii) any damage to,
removal, abandonment, salvage, loss, scrapping or destruction of or any
requisition or taking of the Vehicles or any part thereof; (iii) any
restriction, prevention or curtailment of or interference with any use of the
Vehicles or any part thereof; (iv) any defect in or any Lien on title to the
Vehicles or any part thereof; (v) any change, waiver, extension, indulgence or
other action or omission in respect of any obligation or liability of the Lessee
or the Lessor; (vi) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to the
Lessee, the Lessor or any other Person, or any action taken with respect to this
Agreement by any trustee or receiver of any Person mentioned above, or by any
court; (vii) any claim that the Lessee has or might have against any Person,
including, without limitation, the Lessor; (viii) any failure on the part of the
Lessor to perform or comply with any of the terms hereof or of any other
agreement; (ix) any invalidity or unenforceability or disaffirmance of this
Agreement or any provision hereof or any of the other Related Documents or any
provision of any thereof, in each case whether against or by the Lessee or
otherwise; (x) any insurance premiums payable by the Lessee with respect to the
Vehicles; (xi) any failure of a Permitted Sublessee to perform its obligations
under the Sublease to which it is a party; or (xii) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing, whether or not the
Lessee shall have notice or knowledge of any of the foregoing and whether or not
foreseen or foreseeable. This Agreement shall be noncancelable by the Lessee
and, except as expressly provided herein, the Lessee, to the extent permitted by
law, waives all rights now or hereafter conferred by statute or otherwise to
quit, terminate or surrender this Agreement, or to any diminution or reduction
of Monthly Base Rent, Supplemental Rent or other amounts payable by the Lessee
hereunder. All payments by the Lessee made hereunder shall be final (except to
the extent of adjustments provided for herein), absent manifest error and,
except as otherwise provided herein, the Lessee shall not seek to recover any
such payment or any part thereof for any reason whatsoever, absent manifest
error. If for any reason whatsoever this Agreement shall be terminated in whole
or in part by operation of law or otherwise except as expressly provided herein,
the Lessee shall nonetheless pay all Monthly Base Rent, all Supplemental Rent
and all other amounts due hereunder at the time and in the manner that such
payments would have become due and payable under the terms of this Agreement as
if it had not been terminated in whole or in part. All covenants and agreements
of the Lessee herein shall be performed at its cost, expense and risk unless
expressly otherwise stated.

5.          INSURANCE. The Lessee represents that it shall at all times maintain
or cause to be maintained insurance coverage in force as follows:

5.1.     Personal Injury and Damage. Insurance coverage as set forth in
Section 31.3 hereof. In addition, the Lessee will maintain with respect to the
Lessee’s properties and businesses insurance against loss or damage of the kind
customarily insured against by

11

--------------------------------------------------------------------------------

 

corporations engaged in the same or similar businesses, of such types and in
such amounts as are customarily carried by such similarly situated corporations.

5.2.     Delivery of Certificate of Insurance. Within ten (10) days after the
Initial Closing Date, the Lessee shall have delivered to the Lessor a
certificate(s) of insurance naming the Lender, the Lessor, Original AESOP, PVHC,
Quartx and the Trustee as additional insureds as to the item required by
Section 31.3. Such insurance shall not be changed or canceled except as provided
below in Section 5.3.

5.3.     Changes in Insurance Coverage. No changes shall be made in any of the
foregoing insurance requirements unless the prior written consent of the Lessor,
the Lender and the Trustee are first obtained. The Lessor may grant or withhold
its consent to any proposed change in such insurance in its sole discretion. The
Lender and the Trustee shall be required to grant their consent to any proposed
change in such insurance upon compliance with the following conditions:

(i)     the Lessee shall deliver not less than thirty (30) days’ prior written
notice of any proposed change in such insurance to the Lender and the Trustee;
and

(ii)     the proposed change will satisfy the Rating Agency Confirmation
Condition.

6.          RISK OF LOSS; CASUALTY AND INELIGIBLE VEHICLE OBLIGATIONS.

6.1.     Risk of Loss Borne by Lessee. Upon delivery of each Vehicle to the
Lessee, as between the Lessor and the Lessee, the Lessee assumes and bears the
risk of loss, damage, theft, taking, destruction, attachment, seizure,
confiscation or requisition with respect to such Vehicle, however caused or
occasioned, and all other risks and liabilities, including personal injury or
death and property damage, arising with respect to such Vehicle or the
manufacture, purchase, acceptance, rejection, ownership, delivery, leasing,
subleasing, possession, use, inspection, registration, operation, condition,
maintenance, repair, storage, sale, return or other disposition of such Vehicle,
howsoever arising.

6.2.     Casualty; Ineligible Vehicles. If a Vehicle becomes a Standard Casualty
or an Ineligible Vehicle, then the Lessee will (i) promptly notify the Lessor
thereof and (ii) promptly, but in no event later than the Payment Date with
respect to the Related Month during which such Vehicle became a Standard
Casualty or an Ineligible Vehicle, pay to the Lessor the Termination Value of
such Vehicle (as of the date such Vehicle became a Standard Casualty or an
Ineligible Vehicle). Upon payment by the Lessee to the Lessor of the Termination
Value of any Vehicle that has become a Standard Casualty or an Ineligible
Vehicle (i) the Lessor shall cause title to such Vehicle to be transferred to
the Lessee to facilitate liquidation of such Vehicle by the Lessee, (ii) the
Lessee shall be entitled to any physical damage insurance proceeds applicable to
such Vehicle and (iii) the Administrator shall request the Trustee to cause its
Lien to be removed from the Certificate of Title for such Vehicle.

7.          VEHICLE USE. So long as no AESOP I Operating Lease Event of Default,
Liquidation Event of Default or Limited Liquidation Event of Default has
occurred

12

--------------------------------------------------------------------------------

 

(subject, however, to Section 2.6 hereof), the Lessee may use each Vehicle
leased hereunder in its regular course of business and may sublease such Vehicle
to Permitted Sublessees from time to time pursuant to subleases (each such
agreement, a “Sublease”), substantially in the form of the agreement attached
hereto as Attachment C, for use in the rental car businesses of such Permitted
Sublessees. Such use shall be confined primarily to the United States; provided,
however, that the principal place of business or rental office of the Lessee and
each Permitted Sublessee with respect to the Vehicles is located in the United
States. The Administrator shall promptly and duly execute, deliver, file and
record all such documents, statements, filings and registrations and take such
further actions as the Lessor, the Lender or the Trustee shall from time to time
reasonably request in order to establish, perfect and maintain the Lessor’s
title to and interest in the Vehicles and the Certificates of Title as against
the Lessee, each Permitted Sublessee or any third party in any applicable
jurisdiction and to establish, perfect and maintain the Trustee’s Lien on the
Vehicles and the Certificates of Title (other than noting the Lien of the
Trustee on the Certificates of Title with respect to Vehicles titled in the
states of Ohio, Oklahoma and Nebraska) as a perfected first lien in any
applicable jurisdiction. The Lessee and each Permitted Sublessee may, at its
sole expense, change the place of principal location of any Vehicles.
Notwithstanding the foregoing, no change of location shall be undertaken unless
and until (x) all actions necessary to maintain the Lien of the Trustee on such
Vehicles and the Certificates of Title (other than noting the Lien of the
Trustee on the Certificates of Title with respect to Vehicles titled in the
states of Ohio, Oklahoma and Nebraska) with respect to such Vehicles shall have
been taken and (y) all legal requirements applicable to such Vehicles shall have
been met or obtained. Following the occurrence of an AESOP I Operating Lease
Event of Default, a Limited Liquidation Event of Default, a Liquidation Event of
Default or a Manufacturer Event of Default, and upon the Lender’s request, the
Lessee shall advise the Lender in writing where all Vehicles leased hereunder as
of such date are principally located. The Lessee shall not knowingly use any
Vehicles or knowingly permit the same to be used for any unlawful purpose. The
Lessee shall use reasonable precautions to prevent loss or damage to Vehicles.
The Lessee shall comply with all applicable statutes, decrees, ordinances and
regulations regarding acquiring, titling, registering, leasing, insuring and
disposing of Vehicles and shall take reasonable steps to ensure that operators
are licensed. The Lessee and the Lessor agree that the Lessee shall perform, at
the Lessee’s own expense, such vehicle preparation and conditioning services
with respect to Vehicles leased hereunder as are customary. The Lessor, the
Lender or the Trustee or any authorized representative of the Lessor, the Lender
or the Trustee may during reasonable business hours from time to time, without
disruption of the Lessee’s or any Permitted Sublessee’s business, subject to
applicable law, inspect Vehicles and registration certificates, Certificates of
Title and related documents covering Vehicles wherever the same be located. The
Lessee shall not sublease any Vehicles to any Person other than a Permitted
Sublessee pursuant to a Sublease and, except for a sublease to a Permitted
Sublessee pursuant to a Sublease, the Lessee shall not assign any right or
interest herein or in any Vehicles; provided, however, the foregoing shall not
be deemed to prohibit the Lessee or any Permitted Sublessee from renting
Vehicles to third-party customers in the ordinary course of its respective car
rental business. If the Lessee subleases any Vehicle to any Permitted Sublessee
from time to time, the Lessee shall nevertheless remain responsible for all
obligations arising hereunder with respect to such Vehicle.

8.          LIENS. Except for Permitted Liens, the Lessee shall keep all
Vehicles leased hereunder free of all Liens arising during the Term. If on the
Vehicle Operating Lease

13

--------------------------------------------------------------------------------

 

Expiration Date for any Vehicle leased hereunder any such Lien exists on such
Vehicle, the Lessor may, in its discretion, remove such Lien and any sum of
money that may be paid by the Lessor in release or discharge thereof, including
attorneys’ fees and costs, will be paid by the Lessee upon demand by the Lessor.
The Lessor may grant security interests in the Vehicles leased hereunder without
consent of the Lessee; provided, however, that if any such Liens would interfere
with the rights of the Lessee under this Agreement, the Lessor must obtain the
prior written consent of the Lessee. The Lessee agrees and acknowledges that the
granting of Liens and the taking of other actions pursuant to the Loan
Agreements, the Indenture and the other Related Documents does not interfere
with the rights of the Lessee under this Agreement.

9.          NON-DISTURBANCE. So long as the Lessee satisfies its obligations
hereunder, its quiet enjoyment, possession and use of the Vehicles leased
hereunder will not be disturbed during the Term, subject, however, to
Sections 2.6 and 18 hereof and except that the Lessor and the Trustee each
retains the right, but not the duty, to inspect such Vehicles without disturbing
the ordinary conduct of the Lessee’s or any Permitted Sublessee’s business. Upon
the request of the Lessor, the Lender or the Trustee from time to time, the
Lessee will make reasonable efforts to confirm to the Lessor, the Lender and the
Trustee the location, mileage and condition of each Vehicle leased hereunder and
to make available for the Lessor’s, the Lender’s or the Trustee’s inspection
within a reasonable time period, not to exceed forty-five (45) days, such
Vehicles at the location where such Vehicles are normally domiciled. Further,
the Lessee will, during normal business hours and with a notice of three
(3) Business Days, make its records pertaining to the Vehicles leased hereunder
available to the Lessor, the Lender or the Trustee for inspection at the
location where the Lessee’s records are normally domiciled.

10.          REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES. The
Lessee, at its expense, shall be responsible for proper registration and
licensing of the Vehicles leased hereunder, and titling of such Vehicles in the
name of the Lessor or its Permitted Nominee (with the Lien of the Trustee noted
thereon (except with respect to the Vehicles titled in the States of Oklahoma,
Nebraska and Ohio)), and, where required, shall have such Vehicles inspected by
any appropriate Governmental Authority; provided, however, that notwithstanding
the foregoing, possession of all Certificates of Title shall at all times remain
with (i) the Administrator, (ii) SGS Automotive Services, Inc., (formerly known
as and successor in interest to Intermodal Transportation Services, Inc.), as
agent for the Administrator, or (iii) any other titling service, acting as agent
for the Administrator, that is approved in writing by the Required Noteholders
of each Outstanding Series of Notes. The Administrator, or its agent, shall hold
such Certificates of Title in its capacity as agent for the Lessor and on behalf
of the Lender and the Trustee. The Lessee shall be responsible for the payment
of all registration fees, title fees, license fees, traffic summonses,
penalties, judgments and fines incurred with respect to any Vehicle leased
hereunder during the Vehicle Term for such Vehicle or imposed during the Vehicle
Term for such Vehicle by any Governmental Authority or any court of law or
equity with respect to such Vehicles in connection with the Lessee’s operation
of such Vehicles. The Lessor agrees to execute a power of attorney in
substantially the form of Attachment B hereto (each, a “Power of Attorney”), and
such other documents as may be necessary in order to allow the Lessee to title,
register and dispose of the Vehicles leased hereunder in accordance with the
terms hereof; provided, however, that possession of all Certificates of Title
shall at all times remain with the Administrator, or its agent, who will hold
such Certificates of Title in its capacity as agent for the Lessor and on behalf
of the Lender and the Trustee, and the Lessee

14

--------------------------------------------------------------------------------

 

acknowledges and agrees that it has no right, title or interest in or with
respect to any Certificate of Title. Notwithstanding anything herein to the
contrary, the Lessor may terminate such Power of Attorney as provided in
Section 18.3(iii) hereof.

11.          MAINTENANCE AND REPAIRS. The Lessee shall pay for all maintenance
and repairs to keep the Vehicles leased hereunder in good working order and
condition, and the Lessee will maintain such Vehicles as required in order to
keep the Manufacturer’s warranty in force. The Lessee will return Vehicles
leased hereunder to an authorized Manufacturer facility or the Lessee’s
Manufacturer authorized warranty station for warranty work. The Lessee will
comply with any Manufacturer’s recall of any Vehicle leased hereunder. The
Lessee will pay, or cause to be paid, all usual and routine expenses incurred in
the use and operation of the Vehicles leased hereunder including, but not
limited to, fuel, lubricants, and coolants. The Lessee agrees that it shall not
make any material alterations to any Vehicles leased hereunder without the prior
consent of the Lessor. Any improvements or additions to any Vehicles leased
hereunder shall become and remain the property of the Lessor, except that any
addition to Vehicles leased hereunder made by the Lessee shall remain the
property of the Lessee if such addition can be disconnected from such Vehicles
without impairing the functioning of such Vehicles or its resale value,
excluding such addition.

12.          VEHICLE WARRANTIES.

12.1.     No Lessor Warranties. THE LESSEE ACKNOWLEDGES THAT THE LESSOR IS NOT
THE MANUFACTURER, THE AGENT OF THE MANUFACTURER, OR THE DISTRIBUTOR OF THE
VEHICLES LEASED HEREUNDER. THE LESSOR MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, AS TO THE FITNESS, SAFENESS, DESIGN, MERCHANTABILITY,
CONDITION, QUALITY, CAPACITY OR WORKMANSHIP OF THE VEHICLES NOR ANY WARRANTY
THAT THE VEHICLES WILL SATISFY THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT
SPECIFICATION, AND AS BETWEEN THE LESSOR AND THE LESSEE, THE LESSEE AGREES TO
BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE. THE LESSEE SPECIFICALLY WAIVES
ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY VEHICLE FOR BREACH OF ANY
WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE LESSOR, THE LESSEE LEASES THE
VEHICLES “AS IS.” IN NO EVENT SHALL THE LESSOR BE LIABLE FOR SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES, WHATSOEVER OR HOWSOEVER CAUSED.

12.2.     Manufacturer’s Warranties. If a Vehicle leased hereunder is covered by
a Manufacturer’s warranty, the Lessee, during the Vehicle Term for such Vehicle,
shall have the right to make any claims under such warranty which the Lessor
could make.

13.          VEHICLE USAGE GUIDELINES AND RETURN; SPECIAL DEFAULT PAYMENTS;
EARLY TERMINATION PAYMENTS.

13.1.     Usage. As used herein “Vehicle Turn-In Condition” (a) with respect to
each Program Vehicle leased hereunder will be determined in accordance with the
related Manufacturer Program and (b) with respect to each Non-Program Vehicle
leased hereunder shall mean (i) if such Non-Program Vehicle is manufactured by
the same Manufacturer as any

15

--------------------------------------------------------------------------------

 

Program Vehicle leased hereunder, the same standard as required with respect to
such Program Vehicle and (ii) if such Non-Program Vehicle does not satisfy
clause (i) above, that each such Vehicle shall have no body dents; rust;
corrosion; paint mismatches or special colors, or paint which is less than
factory grade; dented, rusted, broken or missing chrome or trim; ripped or
stained upholstery, seats, dash, headliner, carpeting, trunk, or convertible
vinyl top; missing interior trim; sprung or misaligned doors or their openings;
worn, cracked, split, broken or leaking weather-stripping; faulty window
mechanisms; broken, cracked or missing glass, mirrors or lights; faulty
electronic systems, including on-board computers, processors, sensors, controls,
radios, stereos, and the like; faulty heating, air conditioning or climate
control systems; worn or faulty shock absorbers or other suspension or steering
parts, systems or mechanisms; excessively worn tires; or any other condition
that adversely affects the appearance or operating condition of such Vehicle, in
each case other than any such condition that would reasonably be considered to
be normal wear and tear or otherwise de minimis by the Manufacturer of such
Vehicle (or its authorized agent) under such Manufacturer’s manufacturer program
or, if such Manufacturer does not maintain a manufacturer program, under the
manufacturer program of another manufacturer with comparable sales volume, and
the equivalent of any Excess Damage Charges and Excess Mileage Charges with
respect to such Vehicle shall be determined by the Administrator and the Lessor
in accordance with the foregoing standard.

13.2.     Return. (a) The Lessee will, subject to Sections 2.5, 2.6 and 2.9,
return or cause to be returned each Program Vehicle leased hereunder (other than
a Standard Casualty or a Program Vehicle which has become an Ineligible Vehicle)
to the nearest related Manufacturer official auction or other facility
designated by such Manufacturer at the Lessee’s sole expense or to such other
location designated by the Lessor (with any additional cost of delivery in
excess of what would have been incurred upon delivery to the related
Manufacturer at the expense of the Lessor), in each case in accordance with the
requirements of Section 3.1(b) hereof.

(b)     The Lessee agrees that the Vehicles leased hereunder will be in Vehicle
Turn-In Condition upon return to or upon the order of the Lessor. Any rebate or
credits applicable to the unexpired term of any license plates for a Vehicle
leased hereunder shall inure to the benefit of the Lessee.

13.3.     Special Default Payments. (a) The Lessee will use its best efforts to
maintain the Program Vehicles leased hereunder such that no Excess Damage
Charges or Excess Mileage Charges will be deductible from the Repurchase Price
due from a Manufacturer or payable by the Lessor upon the turn back of such
Program Vehicles under the applicable Manufacturer Program. Upon (i) the deposit
of the Repurchase Price of any Program Vehicle leased hereunder payable by the
Manufacturer in the Collection Account or a Joint Collection Account (or the
deposit of the Repurchase Price of any Program Vehicle sold through an auction
conducted by or through a Manufacturer in the Collection Account or a Joint
Collection Account), or (ii) the date by which the Repurchase Price of such
Program Vehicle would have been paid if not for a Manufacturer Event of Default,
the Lessor will charge the Lessee for any Excess Damage Charges and/or Excess
Mileage Charges applicable to such Program Vehicle pursuant to the applicable
Manufacturer Program (any such charges are referred to as “Program Vehicle
Special Default Payments”).

16

--------------------------------------------------------------------------------

 

(b)     The Lessee will use its best efforts to maintain the Non-Program
Vehicles leased hereunder in a manner such that no Non-Program Vehicle Special
Default Payments (as defined below) shall be due upon disposition of such
Non-Program Vehicles by or for the benefit of the Lessor. Upon disposition of
each Non-Program Vehicle leased hereunder by or for the benefit of the Lessor,
other than the sale of any Non-Program Vehicle to the Lessee in accordance with
the terms hereof, the Lessor will charge the Lessee (i) if such Non-Program
Vehicle is manufactured by the same Manufacturer as any Program Vehicle or is
subject to a Manufacturer Program, an amount equal to any Excess Damage Charges
and/or Excess Mileage Charges that would be applicable to the comparable Program
Vehicle pursuant to the applicable Manufacturer Program or an amount equal to
any Excess Damage Charges and/or Excess Mileage Charges that are applicable to
such Vehicle pursuant to the applicable Manufacturer Program, as the case may
be, and (ii) if such Non-Program Vehicle is subject to a Vehicle Turn-In
Condition standard established pursuant to Section 13.1(b)(ii), an amount equal
to any charges applicable to such Non-Program Vehicle pursuant to such Vehicle
Turn-In Condition standard (any such charges are referred to as “Non-Program
Vehicle Special Default Payments” and, together with the Program Vehicle Special
Default Payments, the “Special Default Payments”).

(c)     On each Payment Date, the Lessee shall pay to the Lessor all Special
Default Payments that have accrued during the Related Month. The obligation of
the Lessee to pay Special Default Payments shall constitute the sole remedy
respecting the breach of its covenant contained in the first sentence of each of
Section 13.3(a) and 13.3(b).

(d)     The provisions of this Section 13.3 will survive the expiration or
earlier termination of the Term.

13.4.     Early Termination Payments. With respect to any Program Vehicle leased
hereunder that is turned back to the Manufacturer under its Manufacturer Program
(including by the Intermediary pursuant to the Master Exchange Agreement), upon
the earlier of (i) the deposit of the Repurchase Price of such Vehicle in the
Collection Account or a Joint Collection Account and (ii) the date by which such
Repurchase Price would have been paid if not for a Manufacturer Event of
Default, the Lessor will charge the Lessee an amount equal to (i) the excess, if
any, of (x) the Termination Value of such Vehicle (as of the Turnback Date) over
(y) the sum of the Repurchase Price received with respect to such Vehicle or
that would have been received but for a Manufacturer Event of Default, as
applicable, and any Special Default Payments made by the Lessee in respect of
such Vehicle pursuant to Section 13.3, plus (ii) any unpaid Monthly Base Rent
for the Minimum Term with respect to such Vehicle plus any early turn back
charges payable or deductible from the Repurchase Price of such Vehicle in
accordance with Section 3.1(b) hereof (any such amount is referred to as an
“Early Termination Payment”). On each Payment Date, the Lessee shall pay to the
Lessor all Early Termination Payments that have accrued during the Related
Month. The provisions of this Section 13.4 will survive the expiration or
earlier termination of the Term.

14.          DISPOSITION PROCEDURE. The Lessee will comply with the requirements
of law and the requirements of the Manufacturer Programs in connection with,
among other things, the delivery of Certificates of Title and documents of
transfer signed as necessary, signed Condition Reports, and signed odometer
statements to be submitted with the Program Vehicles or Non-Program Vehicles
returned to a Manufacturer pursuant to Section 

17

--------------------------------------------------------------------------------

 

2.6(a) or (b) and accepted by the Manufacturer or its agent at the time of
Program Vehicle or Non-Program Vehicle return.

15.          ODOMETER DISCLOSURE REQUIREMENT. The Lessee agrees to comply with
all requirements of law and all Manufacturer Program requirements with respect
to each Vehicle leased hereunder in connection with the transfer of ownership by
the Lessor of any such Vehicle, including, without limitation, the submission of
any required odometer disclosure statement at the time of any such transfer of
ownership.

16.          GENERAL INDEMNITY.

16.1.     Indemnity by the Lessee. The Lessee agrees to indemnify and hold
harmless the Lessor, the Lender, the Intermediary and the Trustee and the
Lessor’s, the Lender’s, the Intermediary’s and the Trustee’s respective
directors, officers, stockholders, agents and employees (collectively, the
“Indemnified Persons”), on a net after-tax basis against any and all claims,
demands and liabilities of whatsoever nature and all costs and expenses relating
to or in any way arising out of:

16.1.1.     the ordering, delivery, acquisition, title on acquisition,
rejection, installation, possession, titling, retitling, registration,
re-registration, custody by the Lessee or its agent of title and registration
documents, use, non-use, misuse, operation, deficiency, defect, transportation,
repair, control or disposition of any Vehicle leased hereunder or to be leased
hereunder pursuant to a request by the Lessee. The foregoing shall include,
without limitation, any liability (or any alleged liability) of the Lessor to
any third party arising out of any of the foregoing, including, without
limitation, all legal fees, costs and disbursements arising out of such
liability (or alleged liability);

16.1.2.     all (i) federal, state, county, municipal or foreign license,
qualification, registration, franchise, sales, use, gross receipts, ad valorem,
business, property (real or personal), excise, motor vehicle, and occupation
fees and taxes, and all federal, state and local income taxes, and penalties and
interest thereon, and all other taxes, fees and assessments of any kind
whatsoever whether assessed, levied against or payable by the Lessor or
otherwise, with respect to any Vehicle leased hereunder or the acquisition,
purchase, sale, rental, delivery, use, operation, control, ownership or
disposition of any such Vehicle or measured in any way by the value thereof or
by the ownership by the Lessor with respect thereto and (ii) documentary, stamp,
filing, recording, mortgage or other taxes, if any, which may be payable by the
Lessor in connection with this Agreement or any other Related Documents;
provided, however, that the following taxes are excluded from the indemnity
provided in clauses (i) and (ii) above:

(i) any tax on, based on, with respect to, or measured by net income (including
federal alternative minimum tax) other than any taxes or other charges which may
be imposed as a result of any determination by a taxing authority that the
Lessor is not the owner for tax purposes of the Vehicles leased hereunder or
that this Agreement is not a “true lease” for tax purposes or that depreciation
deductions that would be available to the owner of such Vehicles are disallowed,
or that the Lessor is not entitled to include the full purchase price for any
such

18

--------------------------------------------------------------------------------

 

Vehicle in basis including any amounts payable in respect of interest charges,
additions to tax and penalties that may be imposed, and all attorneys and
accountants fees and expenses and all other fees and expenses that may be
incurred in defending against or contesting any such determination;

(ii)     any withholding tax imposed by the United States federal government
other than such a tax imposed as a result of a change in law enacted (including
new interpretations thereof), adopted or promulgated after the Initial Closing
Date or, if later, the date the Trustee or the Lender acquires its interest in
the Vehicles leased hereunder or the Loan Agreements, the Indenture, the
Assignment Agreements, or any other related operative documents that causes it
to be an Indemnified Person hereunder unless such a tax is enacted, adopted or
promulgated as a tax in lieu of, or in substitution for a tax not otherwise
indemnifiable hereunder;

(iii)     any tax with respect to any Vehicle leased hereunder or any
transaction relating to such Vehicle to the extent it covers any period
beginning after the earlier of (A) the discharge in full of the Lessee’s
obligation to pay Monthly Base Rent, Supplemental Rent and any other amount
payable hereunder with respect to such Vehicle and (B) the expiration or other
termination of this Agreement with respect to such Vehicle, unless such tax
accrues in respect of any period during which the Lessee holds over such
Vehicle; and

(iv)     any tax that is imposed on an Indemnified Person or any of its
Affiliates, to the extent that such tax results from the willful misconduct or
gross negligence of such Indemnified Person or such Affiliates;

16.1.3.     any violation by the Lessee of this Agreement or of any Related
Documents to which the Lessee is a party or by which it is bound or of any laws,
rules, regulations, orders, writs, injunctions, decrees, consents, approvals,
exemptions, authorizations, licenses and withholdings of objecting of any
governmental or public body or authority and all other requirements having the
force of law applicable at any time to any Vehicle leased hereunder or any
action or transaction by the Lessee with respect thereto or pursuant to this
Agreement;

16.1.4.     all out of pocket costs of the Lessor (including the fees and out of
pocket expenses of counsel for the Lessor) in connection with the execution,
delivery and performance of this Agreement and the other Related Documents;

16.1.5.     all out of pocket costs and expenses (including reasonable
attorneys’ fees and legal expenses) incurred by the Lessor, the Lender, the
Intermediary or the Trustee in connection with the administration, enforcement,
waiver or amendment of this Agreement and any other Related Documents and all
indemnification obligations of the Lender or the Lessor under the Related
Documents (including all obligations of the Lessor under Section 13.4 and
Section 13.5 of the AESOP I Operating Lease Loan Agreement); and

19

--------------------------------------------------------------------------------

 

16.1.6. all costs, fees, expenses, damages and liabilities (including, without
limitation, the fees and out of pocket expenses of counsel) in connection with,
or arising out of, any claim made by any third party against the Lessor for any
reason (including, without limitation, in connection with any audit or
investigation conducted by a Manufacturer under its Manufacturer Program).

If the Lessor shall actually receive any tax benefit (whether by way of offset,
credit, deduction, refund or otherwise) not already taken into account in
calculating the net after-tax basis for such payment as a result of the payment
of any tax indemnified pursuant to this Section 16 or in connection with the
circumstances giving rise to the imposition of such tax, such tax benefit shall
be used to offset any indemnity payment owed pursuant to this Section 16 or
shall be paid to the Lessee (but only to the extent of any prior indemnity
payments actually made pursuant to this Section 16 and only after the Lessor
shall actually receive such tax benefits); provided, however, that no such
payment to the Lessee shall be made while an AESOP I Operating Lease Event of
Default shall have occurred and be continuing.

16.2.     Reimbursement Obligation by the Lessee. The Lessee shall forthwith
upon demand reimburse the Lessor or the relevant Indemnified Person for any sum
or sums expended with respect to any of the foregoing; provided, however, that
to the extent such amounts constitute Excluded Payments, such amounts shall be
paid only to the AESOP I Segregated Account; and provided further that, if so
requested by the Lessee, the Lessor or the relevant Indemnified Person shall
submit to the Lessee a statement documenting any such demand for reimbursement
or prepayment. To the extent that the Lessee in fact indemnifies the Lessor or
the relevant Indemnified Person under the indemnity provisions of this
Agreement, the Lessee shall be subrogated to the Lessor’s or the relevant
Indemnified Person’s rights in the affected transaction and shall have a right
to determine the settlement of claims therein. The foregoing indemnity as
contained in this Section 16 shall survive the expiration or earlier termination
of this Agreement or any lease of any Vehicle hereunder.

16.3.     Defense of Claims. The Lessor agrees to notify the Lessee of any claim
made against it for which the Lessee may be liable pursuant to this Section 16
and, if the Lessee requests, to contest or allow the Lessee to contest such
claim. If any AESOP I Operating Lease Event of Default shall have occurred and
be continuing, no contest shall be required, and any contest which has begun
shall not be required to be continued to be pursued, unless arrangements to
secure the payment of the Lessee’s obligations pursuant to this Section 16
hereunder have been made and such arrangements are reasonably satisfactory to
the Lessor. The Lessor shall not settle any such claim without the Lessee’s
consent, which consent shall not be unreasonably withheld. Defense of any claim
referred to in this Section 16 for which indemnity may be required shall, at the
option and request of the Indemnified Person, be conducted by the Lessee. The
Lessee will inform the Indemnified Person of any such claim and of the defense
thereof and will provide copies of material documents relating to any such claim
or defense to such Indemnified Person upon request. Such Indemnified Person may
participate in any such defense at its own expense provided such participation
does not interfere with the Lessee’s assertion of such claim or defense. The
Lessee agrees that no Indemnified Person will be liable to the Lessee for any
claim caused directly or indirectly by the inadequacy of any Vehicle leased
hereunder for any purpose or any deficiency or defect therein or the use or
maintenance thereof or any repairs,

20

--------------------------------------------------------------------------------

 

servicing or adjustments thereto or any delay in providing or failure to provide
such repairs, servicing or adjustments or any interruption or loss of service or
use thereof or any loss of business, all of which shall be the risk and
responsibility of the Lessee. The rights and indemnities of each Indemnified
Person hereunder are expressly made for the benefit of, and will be enforceable
by, each Indemnified Person notwithstanding the fact that such Indemnified
Person is either no longer a party to (or entitled to receive the benefits of)
this Agreement, or was not a party to (or entitled to receive the benefits of)
this Agreement at its outset. Except as otherwise set forth herein, nothing
herein shall be deemed to require the Lessee to indemnify the Lessor for any of
the Lessor’s acts or omissions which constitute gross negligence or willful
misconduct. This general indemnity shall not affect any claims of the type
discussed above which the Lessee may have against the Manufacturer.

17.          ASSIGNMENT.

17.1.     Right of the Lessor to Assign this Agreement. The Lessor shall have
the right to finance the acquisition and ownership of Vehicles by selling or
assigning, in whole or in part, its right, title and interest in this Agreement,
including, without limitation, in moneys due from the Lessee and any third party
under this Agreement and in any security therefor; provided, however, that any
such sale or assignment shall be subject to the rights and interest of the
Lessee in the Vehicles leased hereunder, including but not limited to the
Lessee’s right of quiet and peaceful possession of such Vehicles as set forth in
Section 9 hereof, and under this Agreement.

17.2.     Limitations on the Right of the Lessee to Assign this Agreement. The
Lessee agrees that it shall not, without prior written consent of the Lessor,
CRCF and the Trustee and without having satisfied the Rating Agency Consent
Condition, assign this Agreement or any of its rights hereunder to any other
party; provided, however, that the Lessee may rent the Vehicles leased hereunder
under the terms of its normal daily rental programs and/or sublease such
Vehicles to Permitted Sublessees pursuant to a Sublease. Any purported
assignment in violation of this Section 17.2 shall be void and of no force or
effect. Nothing contained herein shall be deemed to restrict the right of the
Lessee to acquire or dispose of, by purchase, lease, financing, or otherwise,
motor vehicles that are not subject to the provisions of this Agreement.

18.          DEFAULT AND REMEDIES THEREFOR.

18.1.     Events of Default. Any one or more of the following will constitute an
event of default (an “AESOP I Operating Lease Event of Default”) as that term is
used herein:

18.1.1.     there occurs (i) a default in the payment of the portion of Monthly
Base Rent that relates to the Loan Principal Amount, the Special Default
Payments, the Early Termination Payments, Vehicle Purchase Price or Termination
Value upon a Standard Casualty or when a Vehicle becomes an Ineligible Vehicle
or upon a Vehicle Return Default or any Supplemental Rent (to the extent not
included in any of the foregoing) and the continuance thereof for a period of
five (5) Business Days or (ii) a default and continuance thereof for five
(5) Business Days after notice thereof by the Lessor or the Trustee to the
Lessee in the payment of any amount payable under this Agreement (other than
amounts described in clause (i) above);

21

--------------------------------------------------------------------------------

 

18.1.2. any unauthorized assignment or transfer of this Agreement by the Lessee
occurs;

18.1.3. the failure, in any material respect, of the Lessee to maintain, or
cause to be maintained, insurance as required in Section 5 or Section 31.3;

18.1.4. the failure of the Lessee to observe or perform any other covenant,
condition, agreement or provision hereof, and such default continues for more
than thirty (30) days after the date written notice thereof is delivered by the
Lessor or the Trustee to the Lessee;

18.1.5. if any representation or warranty made by the Lessee herein is
inaccurate or incorrect or is breached or is false or misleading in any material
respect as of the date of the making thereof or any schedule, certificate,
financial statement, report, notice, or other writing furnished by or on behalf
of the Lessee to the Lessor or the Trustee is false or misleading in any
material respect on the date as of which the facts therein set forth are stated
or certified, and the circumstance or condition in respect of which such
representation, warranty or writing was inaccurate, incorrect, breached, false
or misleading in any material respect, as the case may be, shall not have been
eliminated or otherwise cured for thirty (30) days after the earlier of (x) the
date of the receipt of written notice thereof from the Lessor, the Lender or the
Trustee to the Lessee and (y) the date the Lessee learns of such circumstance or
condition;

18.1.6. an Event of Bankruptcy occurs with respect to the Lessee or any
Permitted Sublessee;

18.1.7. a Loan Event of Default occurs;

18.1.8. a Finance Lease Event of Default or an AESOP II Operating Lease Event of
Default occurs; or

18.1.9. the Pension Benefit Guaranty Corporation or the Internal Revenue Service
shall have filed notice of one or more liens against the Lessee (unless such
lien does not purport to cover the Collateral or any amount payable under the
Leases), and, in the case of notice filed by the Internal Revenue Service, such
notice shall have remained in effect for more than thirty (30) days unless,
prior to the expiration of such period, the Lessee shall have provided the
Lessor with a bond in an amount at least equal to the amount of such lien or, in
the case of any such lien in an amount less than $1,000,000, the Lessee shall
have established to the reasonable satisfaction of the Lessor that such lien is
being contested in good faith and that adequate reserves have been established
in respect of the claim giving rise to such lien.

18.2. Effect of AESOP I Operating Lease Event of Default or Liquidation Event of
Default. If any AESOP I Operating Lease Event of Default described in Section 18
or any Liquidation Event of Default shall occur, (i) the Lessor may terminate
the rights of the Lessee to place Vehicle Orders pursuant to Section 2.1 and to
lease additional Vehicles from the Lessor, and (ii) if CRCF has declared the
Loan Note under any Loan Agreement to be due and payable pursuant to
Section 12.2 of such Loan Agreement, (x) this Agreement shall automatically

-22-

--------------------------------------------------------------------------------

 

terminate and any accrued and unpaid Monthly Base Rent, Supplemental Rent and
all other payments accrued but unpaid under this Agreement (calculated as if the
full amount of interest on such Loan Note was then due and payable in full)
shall, automatically, without further action by the Lessor or the Trustee,
become immediately due and payable and (y) the Lessee shall, at the request of
the Lessor, the Lender or the Trustee, return or cause to be returned all
Vehicles subject to this Agreement (and the Administrator shall deliver or cause
to be delivered to the Trustee the Certificates of Title relating thereto) to
the Lessor in accordance with the provisions of Section 13.2 hereof.

18.3. Rights of Lessor Upon AESOP I Operating Lease Event of Default, Limited
Liquidation Event of Default or Liquidation Event of Default. If an AESOP I
Operating Lease Event of Default, Limited Liquidation Event of Default or
Liquidation Event of Default shall occur, then the Lessor at its option may:

(i)     proceed by appropriate court action or actions, either at law or in
equity, to enforce performance by the Lessee of the applicable covenants and
terms of this Agreement or to recover damages for the breach hereof calculated
in accordance with Section 18.5; and/or

(ii)     by notice in writing to the Lessee, terminate this Agreement in its
entirety and/or the right of possession hereunder of the Lessee of the Vehicles
leased hereunder, and the Lessor may direct delivery by the Lessee of documents
of title to the Vehicles leased hereunder, whereupon all rights and interests of
the Lessee to such Vehicles will cease and terminate (but the Lessee will remain
liable hereunder as herein provided; provided, however, that its liability will
be calculated in accordance with Section 18.5); and thereupon, the Lessor or its
agents or assignees may peaceably enter upon the premises of the Lessee or other
premises where such Vehicles may be located (including, without limitation, the
premises of any Permitted Sublessee) and take possession of them and thenceforth
hold, possess and enjoy the same free from any right of the Lessee or its
successors or assigns, to use such Vehicles for any purpose whatsoever, and the
Lessor will, nevertheless, have a right to recover from the Lessee any and all
amounts which under the terms of this Section 18.3 (as limited by Section 18.5
of this Agreement) as may be then due. The Lessor will provide the Lessee with
written notice of the place and time of the sale at least five (5) days prior to
the proposed sale, which shall be deemed commercially reasonable, and the Lessee
may purchase such Vehicle(s) at the sale. Each and every power and remedy hereby
specifically given to the Lessor will be in addition to every other power and
remedy hereby specifically given or now or hereafter existing at law, in equity
or in bankruptcy and each and every power and remedy may be exercised from time
to time and simultaneously and as often and in such order as may be deemed
expedient by the Lessor; provided, however, that the measure of damages
recoverable against the Lessee will in any case be calculated in accordance with
Section 18.5. All such powers and remedies will be cumulative, and the exercise
of one will not be deemed a waiver of the right to exercise any other or others.
No delay or omission of the Lessor in the exercise of any such power or remedy
and no renewal or extension of any payments due hereunder will impair any such
power or remedy or will be construed to be a waiver of any default or any
acquiescence therein. Any extension of time for payment hereunder or other
indulgence duly granted to the Lessee will not otherwise alter or affect

-23-

--------------------------------------------------------------------------------

 

the Lessor’s rights or the obligations hereunder of the Lessee. The Lessor’s
acceptance of any payment after it will have become due hereunder will not be
deemed to alter or affect the Lessor’s rights hereunder with respect to any
subsequent payments or defaults therein; and/or

(iii)     proceed by appropriate court action or actions, either at law or in
equity, to enforce performance by any Permitted Sublessee of the applicable
covenants and terms of the related Sublease or to recover damages or any other
amounts payable under such Sublease; and/or

(iv)     by notice in writing to the Lessee, terminate the Power of Attorney.

18.4. Rights of Lender and Trustee Upon Liquidation Event of Default, Limited
Liquidation Event of Default and Non-Performance of Certain Covenants. (i) If a
Liquidation Event of Default or a Limited Liquidation Event of Default shall
have occurred and be continuing, the Lender and the Trustee, to the extent
provided in the Indenture, shall have the rights against the Lessee, and the
AESOP I Operating Lease Loan Collateral provided in the Base Indenture upon a
Liquidation Event of Default or a Limited Liquidation Event of Default, as the
case may be, including the right to take possession of all or a portion of the
Vehicles leased hereunder immediately from the Lessee or a Permitted Sublessee.

(ii)     If the Lessee shall default in the due performance and observance of
any of its obligations under Sections 31.3, 31.4, 31.5(iv), 31.10, 32.3 or 32.4
hereof, and such default shall continue unremedied for a period of thirty
(30) days after notice thereof shall have been given to the Lessee by the
Lessor, the Lender or the Trustee, the Trustee, as assignee of the Lessor’s
rights hereunder, shall have the ability to exercise all rights, remedies,
powers, privileges and claims of the Lessee or the Intermediary against the
Manufacturers under or in connection with the Manufacturer Programs with respect
to (i) Program Vehicles leased hereunder that the Lessee has determined to turn
back to the Manufacturers under such Manufacturer Programs (excluding
Relinquished Vehicles) and (ii) whether or not the Lessee shall then have
determined to turn back such Program Vehicles, any Program Vehicles leased
hereunder for which the applicable Repurchase Period will end within one week or
less.

(iii)     Upon a default in the performance (after giving effect to any grace
periods provided herein) by the Lessee of its obligations hereunder to keep the
Vehicles leased hereunder free of Liens (other than Permitted Liens) and to
maintain the Trustee’s first-priority perfected security interest in the AESOP I
Operating Lease Loan Collateral, the Lessor 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 the
Lessee.

(iv)     Upon the occurrence of a Liquidation Event of Default or a Limited
Liquidation Event of Default, the Lessee shall return or cause to be returned
any Program Vehicles leased hereunder to the related Manufacturer in accordance
with the instructions of the Lessor. To the extent any Manufacturer fails to
accept any such Program Vehicles under the terms of the applicable Manufacturer
Program, the Lessor shall have the right to otherwise dispose of such Program
Vehicles and to direct the Lessee to dispose of such Program Vehicles in
accordance with its instructions. Upon the occurrence of a Liquidation Event of
Default or a Limited Liquidation Event of Default, the Lessee shall dispose of
any Non-Program Vehicles leased hereunder in accordance with the instructions of
the Lessor. To the extent the Lessee fails to so dispose of any such Non-Program
Vehicles, the Lessor shall have the right to otherwise

-24-

--------------------------------------------------------------------------------

 

dispose of such Non-Program Vehicles. In addition, following the occurrence of a
Liquidation Event of Default or a Limited Liquidation Event of Default, the
Lessor shall have all of the rights, remedies, powers, privileges and claims
vis-à-vis the Lessee, necessary or desirable to allow (a) the Lender to exercise
the rights, remedies, powers, privileges and claims given to the Lender pursuant
to Section 12.3 of the AESOP I Operating Lease Loan Agreement, and the Lessee
acknowledges that it has hereby granted to the Lessor all of the rights,
remedies, powers, privileges and claims granted by the Lessor to the Lender
pursuant to Article 7 of the AESOP I Operating Lease Loan Agreement and that,
under the circumstances set forth in the AESOP I Operating Lease Loan Agreement,
the Lender may act in lieu of the Lessor in the exercise of such rights,
remedies, powers, privileges and claims and (b) the Trustee to exercise the
rights, remedies, powers, privileges and claims given to the Trustee pursuant to
Sections 3.3 and 9.2 of the Base Indenture, and the Lessee acknowledges that
(x) it has hereby granted to the Lessor all of the rights, remedies, powers,
privileges and claims granted by the Lender to the Trustee pursuant to Article 3
of the Base Indenture and that, under certain circumstances set forth in the
Base Indenture, the Trustee may act in lieu of the Lessor in the exercise of
such rights, remedies, powers, privileges and claims and (y) under certain
circumstances the Trustee may act in lieu of the Lessor in the exercise of the
rights, remedies, powers, privileges and claims of the Lessor hereunder.

18.5. Measure of Damages. If an AESOP I Operating Lease Event of Default, a
Limited Liquidation Event of Default or a Liquidation Event of Default occurs
and the Lessor, the Lender or the Trustee exercises the remedies granted to the
Lessor, the Lender or the Trustee under this Article 18, the amount that the
Lessor shall be permitted to recover shall be equal to:

(i)     all Monthly Base Rent, all Supplemental Rent and all other payments
payable under this Agreement (calculated as provided in Section 18.2); plus

(ii)     any damages and expenses, including reasonable attorneys’ fees and
expenses (but excluding net after-tax losses of federal and state income tax
benefits to which the Lessor would otherwise be entitled as a result of this
Agreement), which the Lessor, the Lender or the Trustee will have sustained by
reason of the AESOP I Operating Lease Event of Default, Limited Liquidation
Event of Default or Liquidation Event of Default, together with reasonable sums
for such attorneys’ fees and such expenses as will be expended or incurred in
the seizure, storage, rental or sale of the Vehicles leased hereunder or in the
enforcement of any right or privilege hereunder or in any consultation or action
in such connection; plus

(iii)     interest on amounts due and unpaid under this Agreement at the
applicable Lender’s Carrying Cost Interest Rate plus 1.0% from time to time
computed from the date of the AESOP I Operating Lease Event of Default, Limited
Liquidation Event of Default or Liquidation Event of Default or the date
payments were originally due to the Lessor under this Agreement or from the date
of each expenditure by the Lessor, the

-25-

--------------------------------------------------------------------------------

 

Lender or the Trustee which is recoverable from the Lessee pursuant to this
Section 18, as applicable, to and including the date payments are made by the
Lessee.

18.6. Vehicle Return Default. If the Lessee fails to comply with the provisions
of (a) Section 13.2 hereof with respect to any Vehicle leased hereunder or (b)
Section 3.1 with respect to returning or causing to be returned any Program
Vehicles leased hereunder to the related Manufacturer not later than the end of
the Maximum Term (each, a “Vehicle Return Default”), and the Vehicle is not
redesignated as a Non-Program Vehicle in accordance with Section 2.7, then the
Lessor at its option may:

(i)     proceed by appropriate court action or actions, either at law or equity,
to enforce performance by the Lessee of such covenants and terms of this
Agreement or to recover damages for the breach hereof calculated in accordance
with Section 18.5 as it relates to such Vehicle; or

(ii)     by notice in writing to the Lessee following the occurrence of such
Vehicle Return Default, terminate the Agreement with respect to such Vehicle
and/or the right of possession hereunder of the Lessee with respect to such
Vehicle and the Lessor may direct delivery by the Lessee of documents of title
to such Vehicle, whereupon all rights and interests of the Lessee to such
Vehicle will cease and terminate (but the Lessee will remain liable hereunder as
herein provided; provided, however, that its liability will be calculated in
accordance with Section 18.5 as it relates to such Vehicle); and thereupon the
Lessor or its agents or assignees may peaceably enter upon the premises of the
Lessee or other premises where such Vehicle may be located (including, without
limitation, the premises of any Permitted Sublessee) and take possession of it
and thenceforth hold, possess and enjoy the same free from any right of the
Lessee or its successors or assigns to use such Vehicle for any purpose
whatsoever and the Lessor will nevertheless have a right to recover from the
Lessee any and all amounts which, under the terms of this Agreement may then be
due. The Lessor will provide the Lessee with written notice of the place and
time of the sale of such Vehicle at least five (5) days prior to the proposed
sale, which sale shall be deemed commercially reasonable and the Lessee may
purchase the Vehicle at such sale; or

(iii)     hold, keep idle or lease to others such Vehicle, as the Lessor in its
sole discretion may determine, free and clear of any rights of the Lessee
without any duty to account to the Lessee with respect to such action or
inaction or for any proceeds with respect to such action or inaction except that
the Lessee’s obligation to pay Monthly Base Rent for periods commencing after
the Lessee shall have been deprived of the use of such Vehicle pursuant to this
clause (iii) shall be reduced by the net proceeds, if any, received by the
Lessor from leasing such Vehicle to any person other than the Lessee for the
same period or any portion thereof; or

(iv)     whether or not the Lessor shall have exercised or shall thereafter
exercise any of the rights under the foregoing clauses (i), (ii) or (iii),
demand by written notice to the Lessee that the Lessee pay to the Lessor
immediately, and the Lessee shall so pay to the Lessor as liquidated damages for
loss of a bargain and not as a penalty, any unpaid Monthly Base Rent due through
the Payment Date with respect to the Related Month

-26-

--------------------------------------------------------------------------------

 

during which such Vehicle is rejected by the Manufacturer or otherwise is not
returned to the Manufacturer or on the date the Lessee is required to, but does
not, sell, return or otherwise dispose of such Vehicle pursuant to Section 3.1
or 2.6 hereof, any Supplemental Rent then accrued and unpaid plus whichever of
the following amounts the Lessor, in its sole discretion shall specify in such
notice:

(1)     an amount equal to the excess, if any, of the Termination Value for such
Vehicle over the Market Value of such Vehicle as of (a) the date such Vehicle
(if such Vehicle is a Program Vehicle) is rejected by a Manufacturer for not
meeting its Manufacturer Program’s Vehicle Turn-In Condition guidelines, or
(b) the date the Lessee is required to, but does not, sell, return or otherwise
dispose of such Vehicle (if such Vehicle is a Non-Program Vehicle) pursuant to
Section 3.1 or 2.6 hereof; or

(2)     an amount equal to the Termination Value for such Vehicle as of (a) the
date such Vehicle is rejected by a Manufacturer for not meeting its Manufacturer
Program’s Vehicle Turn-In Condition guidelines (if such Vehicle is a Program
Vehicle), or (b) the date the Lessee is required to, but does not, sell, return
or otherwise dispose of such Vehicle (if such Vehicle is a Non-Program Vehicle)
pursuant to Section 3.1 or 2.6 hereof, in which event (x) the Lessor shall cause
title to such Vehicle to be transferred to the Lessee, (y) the Lessee shall be
entitled to any physical damage insurance proceeds applicable to such Vehicle,
and (z) the Administrator shall request the Trustee to cause its Lien to be
removed from the Certificate of Title for such Vehicle.

(v)     if the Lessor shall have sold any Vehicle pursuant to clause (ii) above,
the Lessor in lieu of exercising its rights under clause (iv) above with respect
to such Vehicle may, if it shall so elect, demand that the Lessee pay to the
Lessor and the Lessee shall pay to the Lessor on the date of such sale as
liquidated damages for loss of a bargain and not as a penalty, any unpaid
Monthly Base Rent and Supplemental Rent due through such date of sale plus the
amount of any deficiency between the net proceeds of such sale and the
Termination Value of such Vehicle computed as of the date of the sale.

18.7. Application of Proceeds. The proceeds of any sale or other disposition
pursuant to Section 18.2, 18.3 or 18.6 shall be applied by the Lessor in its
sole discretion as the Lessor deems appropriate.

19.     MANUFACTURER EVENTS OF DEFAULT. (a) Upon the occurrence of a
Manufacturer Event of Default with respect to any Manufacturer (a “Defaulting
Manufacturer”), the Lessee, on behalf of the Lessor, (i) shall no longer place
Vehicle Orders for additional Program Vehicles from such Manufacturer and
(ii) shall cancel any Vehicle Order with such Defaulting Manufacturer for any
Program Vehicle with respect to which a VIN has not been assigned as of the date
such Manufacturer Event of Default occurs.

(b)     Upon the occurrence of a Manufacturer Event of Default, the Lessee
agrees to (i) act at the direction of the Lessor, the Lender or the Trustee to
take commercially reasonable action to liquidate the Program Vehicles subject to
a Manufacturer Program with

-27-

--------------------------------------------------------------------------------

 

respect to which such Manufacturer Event of Default has occurred or (ii) convert
such Program Vehicles to Non-Program Vehicles in accordance with Section 2.7
hereof and subject to the limitations set forth therein.

(c)     Upon the occurrence of a Manufacturer Event of Default, except as
provided in Section 13.3, the Lessee shall not be liable for any failure by the
Lessor to recover all or any portion of the Repurchase Price with respect to any
Program Vehicles subject to the Manufacturer Program of the Defaulting
Manufacturer; provided, however, that nothing in this Section 19 shall be
construed to modify, terminate or otherwise affect the Lessee’s obligations
under this Agreement.

20.     [RESERVED]

21.     [RESERVED]

22.     CERTIFICATION OF TRADE OR BUSINESS USE.

The Lessee hereby warrants and certifies, under penalties of perjury, that it
intends to use the Vehicles which are subject to this Agreement, in its trade or
business or for sublease to a Permitted Sublessee pursuant to a Sublease.

23.     SURVIVAL.

In the event that, during the term of this Agreement, the Lessee becomes liable
for the payment or reimbursement of any obligations, claims or taxes pursuant to
any provision hereof, such liability will continue, notwithstanding the
expiration or termination of this Agreement, until all such amounts are paid or
reimbursed by the Lessee.

24.     [RESERVED]

25.     TITLE.

This is an agreement to lease only and title to Vehicles will at all times
remain in the Lessor’s name or in the name of the Lessor’s Permitted Nominee.
The Lessee will not have any rights or interest in Vehicles whatsoever other
than the right of possession and use as provided by this Agreement.

26.     [RESERVED]

27.     RIGHTS OF LESSOR ASSIGNED.

Notwithstanding anything to the contrary contained in this Agreement, the Lessee
acknowledges that the Lessor has assigned all of its rights under this Agreement
(other than its right to receive Excluded Payments) to CRCF pursuant to the
AESOP I Operating Lease Loan Agreement and CRCF has assigned such rights to the
Trustee pursuant to the Base Indenture. Accordingly, the Lessee agrees that:

-28-

--------------------------------------------------------------------------------

 

(i)     subject to the terms of the AESOP I Loan Agreement and the Indenture,
the Trustee shall have all the rights, powers, privileges and remedies of the
Lessor hereunder (other than the right to receive Excluded Payments, which shall
be paid to the AESOP I Segregated Account) and the obligations of the Lessee
hereunder (including with respect to the payment of Monthly Base Rent,
Supplemental Rent and all other amounts payable hereunder) shall not be subject
to any claim or defense which the Lessee may have against the Lessor (other than
the defense of payment actually made) and shall be absolute and unconditional
and shall not be subject to any abatement, setoff, counterclaim, deduction or
reduction for any reason whatsoever. Specifically, the Lessee agrees that, upon
the occurrence of an AESOP I Operating Lease Event of Default, a Limited
Liquidation Event of Default or a Liquidation Event of Default, the Trustee may
exercise (for and on behalf of the Lessor) any right or remedy against the
Lessee provided for herein (other than with respect to the right to receive
Excluded Payments) and the Lessee will not interpose as a defense that such
claim should have been asserted by the Lessor;

(ii)     upon the delivery by the Trustee of any notice to the Lessee stating
that an AESOP I Operating Lease Event of Default, a Limited Liquidation Event of
Default or a Liquidation Event of Default has occurred, the Lessee will, if so
requested by the Trustee, treat the Trustee or the Trustee’s designee for all
purposes (other than with respect to the right to receive Excluded Payments) as
the Lessor hereunder and in all respects comply with all obligations under this
Agreement that are asserted by the Trustee as the successor to the Lessor
hereunder, irrespective of whether the Lessee has received any such notice from
the Lessor; provided, however, that the Trustee shall in no event be liable to
the Lessee for any action taken by it in its capacity as successor to the Lessor
other than actions that constitute negligence or willful misconduct;

(iii)     the Lessee acknowledges that pursuant to the AESOP I Operating Lease
Loan Agreement and the Base Indenture the Lessor has irrevocably authorized and
directed the Lessee to, and the Lessee shall, make payments of Monthly Base Rent
and Supplemental Rent hereunder (and any other payments hereunder) (other than
Excluded Payments, which shall be paid to the AESOP I Segregated Account)
directly to the Trustee for deposit in the Collection Account established by the
Trustee for receipt of such payments pursuant to the Base Indenture and such
payments shall discharge the obligation of the Lessee to the Lessor hereunder to
the extent of such payments. Upon written notice to the Lessee of a sale or
assignment by the Trustee of its right, title and interest in moneys due under
this Agreement to a successor Trustee, the Lessee shall thereafter make payments
of all Monthly Base Rent and Supplemental Rent (and any other payments
hereunder) (other than Excluded Payments, which shall be paid to the AESOP I
Segregated Account) to the party specified in such notice;

(iv)     upon request made by the Trustee at any time, the Lessee will take such
actions as are requested by the Trustee to assist the Trustee in maintaining the
Trustee’s first-priority perfected security interest in the Vehicles leased
hereunder, the Certificates of Title with respect thereto and any other portion
of the AESOP I Operating Lease Loan Collateral; and

-29-

--------------------------------------------------------------------------------

 

(v)     in the event that the Indenture terminates and all obligations owing
under the Indenture have been paid in full, the Lender shall have all rights
under this Agreement previously assigned to the Trustee.

28.     [RESERVED]

29.     MODIFICATION AND SEVERABILITY.

The terms of this Agreement will not be waived, altered, modified, amended,
supplemented or terminated in any manner whatsoever unless (i) the same shall be
in writing and signed and delivered by the Lessor and the Lessee and consented
to in writing by the Lender and the Trustee and (ii) the Rating Agency Consent
Condition shall have been satisfied. If any part of this Agreement is not valid
or enforceable according to law, all other parts will remain enforceable. The
Lessor shall provide prompt written notice to each Rating Agency of any such
waiver, modification or amendment.

30.     CERTAIN REPRESENTATIONS AND WARRANTIES.

The Lessee represents and warrants to the Lessor and the Trustee that as of the
Restatement Effective Date and as of each Series Closing Date:

30.1. Organization; Ownership; Power; Qualification. The Lessee is (i) a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (ii) has the corporate 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.

30.2. Authorization; Enforceability. The Lessee 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 the Lessee and is, and each of the other Related
Documents to which the Lessee is a party is, a legal, valid and binding
obligation of the Lessee, enforceable in accordance with its terms.

30.3. Compliance. The execution, delivery and performance, in accordance with
their respective terms, by the Lessee of this Agreement and each of the other
Related Documents 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 the Lessee which
violation could result in a Material Adverse Effect, (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 the Lessee, (iv) conflict with, result
in a breach of, or constitute a default under any indenture, agreement, or other
instrument to which the Lessee is a party or by which its properties may be
bound which conflict, breach or default could result in a Material Adverse
Effect, or (v) result in

-30-

--------------------------------------------------------------------------------

 

or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Lessee except Permitted Liens.

30.4. Financial Information; Financial Condition. All balance sheets, all
statements of operations, of shareholders’ equity and of cash flow, and other
financial data (other than projections) which have been or shall hereafter be
furnished to the Lessor, the Lender or the Trustee for the purposes of or in
connection with this Agreement or the Related Documents have been and will be
prepared in accordance with GAAP applied on a consistent basis and do and will
present fairly the financial condition of the entities involved as of the dates
thereof and the results of their operations for the periods covered thereby.
Such financial data include the following financial statements and reports which
have been furnished to the Lessor and the Trustee on or prior to the date
hereof:

(i)     the audited consolidated financial statements consisting of a statement
of financial position of the Lessee and its Consolidated Subsidiaries as of
December 31, 2003, and the related statements of operations, stockholder’s
equity and cash flows of the Lessee and its Consolidated Subsidiaries for the
three-year period ended December 31, 2003; and

(ii)     the unaudited condensed consolidated financial statements consisting of
a statement of financial position of the Lessee and its Consolidated
Subsidiaries as of March 31, 2004, and the related statements of operations,
stockholder’s equity and cash flows of the Lessee and its Consolidated
Subsidiaries for the three months ended March 31, 2004.

30.5. Litigation. Except as set forth in Schedule 30.5 hereto and except for
claims as to which the insurer has admitted coverage in writing and which are
fully covered by insurance, no claims, litigation (including, without
limitation, derivative actions), arbitration, governmental investigation or
proceeding or inquiry is pending or, to the best of the Lessee’s knowledge,
threatened against the Lessee which would, if adversely determined, have a
Material Adverse Effect.

30.6. Liens. The Vehicles, the Sublease Collateral and all other Collateral are
free and clear of all Liens other than (i) Permitted Liens and (ii) Liens in
favor of the Lessor, the Lender or the Trustee. The Trustee has obtained, and
will continue to obtain, for the benefit of the Secured Parties pursuant to the
Base Indenture, a first-priority perfected Lien on all Vehicles leased hereunder
(other than Vehicles titled in the states of Ohio, Oklahoma and Nebraska). The
Lessor has obtained, and will continue to obtain, a first-priority perfected
Lien on all Sublease Collateral. All Vehicle Perfection and Documentation
Requirements with respect to all Vehicles on or after the date hereof have and
will continue to be satisfied.

30.7. Employee Benefit Plans. (a) During the twelve-consecutive-month period
prior to the date hereof and prior to any Series Closing Date: (i) no steps have
been taken by the Lessee or any member of the Controlled Group, or to the
knowledge of the Lessee, by any Person, to terminate any Pension Plan; and
(ii) no contribution failure has occurred with respect to any Pension Plan
maintained by the Lessee or any member of the Controlled Group sufficient to
give rise to a Lien under Section 302(f)(1) of ERISA in connection with such
Pension Plan;

-31-

--------------------------------------------------------------------------------

 

and (b) no condition exists or event or transaction has occurred with respect to
any Pension Plan which could reasonably be expected to result in the incurrence
by the Lessee or any member of the Controlled Group of liabilities, fines or
penalties in an amount that could have a Material Adverse Effect.

30.8. Investment Company Act. The Lessee is not an “investment company” or a
company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended, and the Lessee is not 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 nor the performance by the Lessee of this Agreement violates any
provision of the Investment Company Act of 1940, as amended.

30.9. Regulations T, U and X. The Lessee is not 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 Regulations T, U
and X of the Board of Governors of the Federal Reserve System). None of the
Lessee, any of its Affiliates or any Person acting on 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 to violate Regulation T, U, or X of the Board of Governors
of the Federal Reserve System.

30.10. Records Locations; Jurisdiction of Organization . Schedule 30.10 lists
each of the locations where the Lessee maintains any records; and Schedule 30.10
also lists the Lessee’s legal name and the Lessee’s jurisdiction of
organization.

30.11. Taxes. The Lessee has filed all tax returns which have been required to
be filed by it (except where the requirement to file such return is subject to a
valid extension or such failure relates to returns which, in the aggregate, show
taxes due in an amount of not more than $500,000), 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 date hereof and as of each Series Closing Date,
to the best of the Lessee’s knowledge, there is no unresolved claim by a taxing
authority concerning the Lessee’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.

30.12. Governmental Authorization. The Lessee 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.

30.13. Compliance with Laws. Except as disclosed in Schedule 30.13 hereto, the
Lessee: (i) is not in violation of any law, ordinance, rule, regulation or order
of any

-32-

--------------------------------------------------------------------------------

 

Governmental Authority applicable to it or its property, which violation would
have a Material Adverse Effect, 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
a Material Adverse Effect, 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.

30.14. Eligible Vehicles. Each Vehicle is or will be, as the case may be, on the
Vehicle Operating Lease Commencement Date with respect to such Vehicle, an
Eligible Vehicle.

30.15. Supplemental Documents True and Correct. All information contained in any
Vehicle Order or other Supplemental Document which has been submitted, or which
may hereafter be submitted by the Lessee to the Lessor is, or will be, true,
correct and complete.

30.16. Manufacturer Programs. No Manufacturer Event of Default has occurred and
is continuing with respect to any Manufacturer of a Program Vehicle.

30.17. Absence of Default. The Lessee 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 I Operating Lease
Event of Default or a Potential AESOP I Operating Lease Event of Default or
(ii) a default or event of default by the Lessee under any material indenture,
agreement or other instrument, or any judgment, decree or final order to which
the Lessee is a party or by which the Lessee or any of its properties may be
bound or affected that could result in a Material Adverse Effect.

30.18. Title to Assets. The Lessee has good, legal and marketable title to, or a
valid leasehold interest in, all of its assets, except to the extent no Material
Adverse Effect could result. Except for financing statements or other filings
with respect to or evidencing Permitted Encumbrances, no financing statement
under the UCC of any state, application for a Certificate of Title or
certificate of ownership, or other filing which names the Lessee as debtor or
which covers or purports to cover any of the assets of the Lessee is on file in
any state or other jurisdiction, and the Lessee has not 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 Encumbrances and
except, in each case, to the extent no Material Adverse Effect could result.

30.19. Burdensome Provisions. The Lessee is not a party to or bound by any
Contractual Obligation that could have a Material Adverse Effect.

30.20. No Adverse Change. Since December 31, 2003, (x) no material adverse
change in the business, assets, liabilities, financial condition, results of
operations or business prospects of the Lessee has occurred, and (y) no event
has occurred or failed to occur which has

-33-

--------------------------------------------------------------------------------

 

had or may have, either alone or in conjunction with all other such events and
failures, a Material Adverse Effect.

30.21. No Adverse Fact. No fact or circumstance is known to the Lessee, as of
the date hereof or as of such Series Closing Date which, either alone or in
conjunction with all other such facts and circumstances, has had or might in the
future have (so far as the Lessee can foresee) a Material Adverse Effect which
has not been set forth or referred to in the financial statements referred to in
Section 30.4 or 31.5 or in a writing specifically captioned “Disclosure
Statement” and delivered to the Lessor prior to such Series Closing Date. If a
fact or circumstance disclosed in such financial statements or Disclosure
Statement, or if an action, suit or proceeding disclosed to the Lessor, should
in the future have a Material Adverse Effect, such Material Adverse Effect shall
be a change or event subject to Section 30.20 notwithstanding such disclosure.

30.22. Accuracy of Information. All data, certificates, reports, statements,
opinions of counsel, documents and other information furnished to the Lessor,
the Lender or the Trustee by or on behalf of the Lessee 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 Lessor, 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 Lessor, the Lender or the Trustee, as the
case may be, shall constitute a representation and warranty by the Lessee made
on the date the same are furnished to the Lessor, the Lender or the Trustee, as
the case may be, to the effect specified in clauses (i), (ii) and (iii).

30.23. Solvency. Both before and after giving effect to the transactions
contemplated by this Agreement and the other Related Documents, the Lessee is
solvent within the meaning of the Bankruptcy Code and the Lessee is not the
subject of any voluntary or involuntary case or proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy or insolvency law and no Event of Bankruptcy has occurred with
respect to the Lessee.

30.24. Payment Of Capitalized Cost. Prior to the Vehicle Operating Lease
Commencement Date with respect to each Vehicle leased hereunder, the Capitalized
Cost with respect to such Vehicle shall have been paid.

31.     CERTAIN AFFIRMATIVE COVENANTS. Until the expiration or termination of
this Agreement, and thereafter until the obligations of the Lessee under this
Agreement and the Related Documents are satisfied in full, the Lessee covenants
and agrees that, unless at any time the Lessor, the Lender and the Trustee shall
otherwise expressly consent in writing, it will:

31.1. Corporate Existence; Foreign Qualification. Do and cause to be done at all
times all things necessary to (i) maintain and preserve the corporate existence
of the Lessee; (ii)

-34-

--------------------------------------------------------------------------------

 

be, and ensure that the Lessee 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; and (iii) comply with all Contractual
Obligations and Requirements of Law binding upon it and its Subsidiaries, except
to the extent that the failure to comply therewith would not, in the aggregate,
have a Material Adverse Effect.

31.2. Books, Records and Inspections. (i) Maintain complete and accurate books
and records with respect to the Vehicles leased under this Agreement and
(ii) permit any Person designated by the Lessor, the Lender or the Trustee in
writing to visit and inspect any of the properties, corporate books and
financial records of the Lessee and its Subsidiaries and to discuss its affairs,
finances and accounts with officers of the Lessee and its Subsidiaries, agents
of the Lessee and with the Lessee’s independent public accountants, all at such
reasonable times and as often as the Lessor, the Lender or the Trustee may
reasonably request.

31.3. Insurance. Obtain and maintain with respect to all Vehicles that are
subject to this Agreement (a) 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, (b) property damage insurance with a limit of
$1,000,000 per occurrence, and (c) 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 Lessee at any time hereafter, whichever is greater, with respect to
all passenger cars and vans comprising the Lessee’s rental fleet. The Lessor
acknowledges and agrees that the Lessee may, to the extent permitted by
applicable law, self-insure 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
which is otherwise required to be insured hereunder. All such policies shall be
from financially sound and reputable insurers, shall name the Lender, the Lessor
and the Trustee as additional insured parties and, 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, the Lessor and the
Trustee shall receive at least ten (10) days’ prior written notice of
cancellation of such policies. The Lessee will notify promptly the Lender, the
Lessor and the Trustee of any curtailment or cancellation of the Lessee’s right
to self-insure in any jurisdiction.

31.4. Manufacturer Programs. Turn in (or cause to be turned in) the Program
Vehicles leased hereunder to the relevant Manufacturer within the Repurchase
Period therefor (unless the Lessee purchases such Program Vehicle pursuant to
the terms hereof or sells such Program Vehicle prior to the end of the
Repurchase Period therefor and receives sales proceeds thereof in cash in an
amount equal to or greater than the repurchase price under such Manufacturer
Program); and comply with all of its obligations under each Manufacturer Program
and the Master Exchange Agreement.

31.5. Reporting Requirements. Furnish, or cause to be furnished to the Lessor,
the Lender and the Trustee and, in the case of item (iv) below, to each Rating
Agency:

(i)     Audit Report. As soon as available and in any event within one hundred
twenty (120) days after the end of each fiscal year of the Lessee,
(a) consolidated financial statements consisting of a statement of financial
position of the Lessee and its Consolidated Subsidiaries as of the end of such
fiscal year and a statement of

-35-

--------------------------------------------------------------------------------

 

operations, stockholders’ equity and cash flows of the Lessee and its
Consolidated Subsidiaries for such fiscal year, setting forth in comparative
form the corresponding figures for the preceding fiscal year, certified by and
containing an opinion, unqualified as to scope, of independent certified public
accountants of recognized standing selected by the Lessee and acceptable to the
Lessor, the Lender and the Trustee, accompanied by (b) a letter from such
accountants addressed to the Lessor, the Lender and the Trustee stating that, in
the course of their annual audit of the books and records of the Lessee, no
Potential AESOP I Operating Lease Event of Default or AESOP I Operating Lease
Event of Default has come to their attention which was continuing at the close
of such fiscal year or on the date of their letter, or, if such an event has
come to the attention of such accountants and was continuing at the close of
such fiscal year or on the date of their letter, the nature of such event, it
being understood that such accountants shall have no liability to the Lessor or
the Trustee by reason of the failure of such accountants to obtain knowledge of
the occurrence or continuance of such an AESOP I Operating Lease Event of
Default or Potential AESOP I Operating Lease Event of Default;

(ii)     Quarterly Statements. As soon as available and in any event within
forty-five (45) days after the end of each of the first three quarters of each
fiscal year of the Lessee, (a) financial statements consisting of a consolidated
statement of financial position of the Lessee and its Consolidated Subsidiaries
as of the end of such quarter and a statement of operations, stockholders’
equity and cash flows of the Lessee and its Consolidated Subsidiaries for each
such quarter, setting forth in comparative form the corresponding figures for
the corresponding periods of the preceding fiscal year, all in reasonable detail
and certified (subject to year-end audit adjustments) by a senior financial
officer of the Lessee as having been prepared in accordance with GAAP applied on
a consistent basis, accompanied by (b) a letter from such officer addressed to
the Lessor, the Lender and the Trustee stating that no Potential AESOP I
Operating Lease Event of Default or AESOP I Operating Lease Event of Default has
come to his attention which was continuing at the end of such quarter or on the
date of his letter, or, if such an event has come to his attention and was
continuing at the end of such quarter or on the date of his letter, indicating
the nature of such event and the action which the Lessee proposes to take with
respect thereto;

(iii)     Amortization Events and AESOP I Operating Lease Events of Default. As
soon as possible but in any event within two (2) Business Days after the
occurrence of any Amortization Event, Potential Amortization Event, AESOP I
Operating Lease Event of Default or Potential AESOP I Operating Lease Event of
Default, a written statement of an Authorized Officer describing such event and
the action that the Lessee proposes to take with respect thereto;

(iv)     Manufacturers. Promptly after obtaining actual knowledge thereof,
notice of any Manufacturer Event of Default or termination or replacement of a
Manufacturer Program;

(v)     Interim Financial Statements. Promptly following the Lessee’s receipt
thereof, copies of all other financial reports submitted to the Lessee by
independent

-36-

--------------------------------------------------------------------------------

 

public accountants relating to any annual or interim audit of the books of the
Lessee, or opinion as to the proper book value of the assets of the Lessee;

(vi)     Reports. Promptly, from time to time, such information with respect to
the Subleases, the Vehicles leased hereunder and payments made and owing
hereunder as the Lessor may require to satisfy its reporting obligations to the
Lender pursuant to Section 9.5 of the AESOP I Operating Lease Loan Agreement;
and

(vii)     Other. Promptly, from time to time, such other information, documents,
or reports respecting the Vehicles leased hereunder or the condition or
operations, financial or otherwise, of the Lessee as the Lessor, the Lender or
the Trustee may from time to time reasonably request in order to protect the
interests of the Lessor, the Lender or the Trustee under or as contemplated by
this Agreement or any other Related Document.

31.6. Payment of Taxes; Removal of Liens. Pay when due all taxes, assessments,
fees and governmental charges of any kind whatsoever that may be at any time
lawfully assessed or levied against or with respect to the Lessee, 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, the Lessee shall not 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 the Lessee 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 the Lessee to settle any such contest).

31.7. Business. The Lessee will engage only in businesses in substantially the
same or related fields as the businesses conducted by it on the date hereof and
such other lines of business, which, in the aggregate, do not constitute a
material part of the operations of the Lessee.

31.8. Maintenance of Separate Existence. The Lessee acknowledges its receipt of
a copy of that certain opinion letter issued by White & Case LLP dated the date
hereof and addressing the issue of substantive consolidation as it may relate to
the Lessee, each Permitted Sublessee, the Lessor, Original AESOP, AESOP Leasing
II and CRCF. The Lessee 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 such Person.

31.9. Trustee as Lienholder. Concurrently with each leasing of a Vehicle under
this Agreement, the Administrator shall indicate on its computer records that
the Trustee, as assignee of the Lender, is the holder of a Lien on such Vehicle
pursuant to the terms of the Base Indenture.

31.10. Maintenance of the Vehicles. Maintain and cause to be maintained in good
repair, working order, and condition all of the Vehicles leased hereunder in
accordance with its ordinary business practices with respect to all other
vehicles owned by it, 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 Lessor under this Agreement, the interests of the Lender under
the AESOP I Operating Lease Loan Agreement or the interests of the Secured

-37-

--------------------------------------------------------------------------------

 

Parties under the Indenture or the likelihood of repayment of the Loans. From
time to time the Lessee will make or cause to be made all appropriate repairs,
renewals, and replacements with respect to the Vehicles.

31.11. Enhancement. If the Enhancement with respect to any Series of Notes is
provided by a letter of credit and (i) the short-term debt or deposit rating of
the Enhancement Provider of such letter of credit shall be downgraded below the
then-current rating of such Series of Notes by the Rating Agencies with respect
to such Series of Notes or (ii) such Enhancement Provider shall notify the
Lessee that its compliance with any of its obligations under such letter of
credit would be unlawful, use its best efforts to obtain a successor institution
to act as Enhancement Provider or, in the alternative, to otherwise credit
enhance the payments to be made under this Agreement by the Lessee, subject to
the satisfaction of the Rating Agency Confirmation Condition and any other
requirements set forth in the Related Documents.

31.12. Manufacturer Payments. Cause each Manufacturer and each auction dealer
with respect to such Manufacturer to make all payments made by it under the
Manufacturer Programs with respect to Vehicles leased hereunder directly to the
Collection Account or a Joint Collection Account. Any such payments from
Manufacturers or related auction dealers received directly by the Lessee, will
be, within three (3) Business Days of receipt, deposited into the Collection
Account or a Joint Collection Account, as applicable.

31.13. Accounting Methods; Financial Records. Maintain, and cause each of its
material Subsidiaries to maintain, a system of accounting and keep, and cause
each of its material Subsidiaries to keep, such records and books of account
(which shall be true and complete) as may be required or necessary to permit the
preparation of financial statements in accordance with GAAP applied on a
consistent basis.

31.14. Disclosure to Auditors. Disclose, and cause each of its material
Subsidiaries to disclose, to its independent certified public accountants in a
timely manner all loss contingencies of a type requiring disclosure to auditors
under accounting standards promulgated by the Financial Accounting Standards
Board.

31.15. Disposal of Non-Program Vehicles. Dispose of the Non-Program Vehicles
leased hereunder in accordance with Section 2.6 (unless the Lessee purchases
such Non-Program Vehicle in accordance with the terms hereof).

31.16. Security Interest; Additional Sublease. Do and cause to be done at all
times all things necessary, including without limitation filing UCC financing
statements and continuation statements, to maintain and preserve the Lessor’s
first-priority perfected security interest in the Sublease Collateral. The
Lessee shall maintain the effectiveness of each of the financing statements
filed in accordance with Section 2. The Lessee shall notify the Lessor and each
Rating Agency of the execution of any additional Sublease, and the Lessee shall
do and cause to be done all things necessary to perfect the security interest in
the additional Sublease Collateral with respect to such Sublease.

32.     CERTAIN NEGATIVE COVENANTS. Until the expiration or termination of this
Agreement and thereafter until the obligations of the Lessee under this

-38-

--------------------------------------------------------------------------------

 

Agreement and the Related Documents are satisfied in full, the Lessee covenants
and agrees that, unless at any time the Lessor and the Trustee shall otherwise
expressly consent in writing, it will not:

32.1. Mergers, Consolidations. Merge or consolidate with any Person, except
that, if after giving effect thereto, no Potential AESOP I Operating Lease Event
of Default or AESOP I Operating Lease Event of Default would exist, this
Section 32.1 shall not apply to any merger or consolidation; provided that the
Lessee is the surviving corporation of such merger or consolidation.

32.2. 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.

32.3. Liens. Create or permit to exist any Lien with respect to any Vehicle
leased hereunder now or hereafter existing or acquired, except for Permitted
Liens.

32.4. Use of Vehicles. Use or allow the Vehicles to be used (i) in any manner
that would make such Vehicles that are Program Vehicles ineligible for
repurchase under an Eligible Manufacturer Program, (ii) for any illegal purposes
or (iii) in any manner that would subject the Vehicles to confiscation.

32.5. Termination of Agreement. Allow this Agreement to terminate prior to the
termination of each other Lease.

32.6. Sublease Amendment. The Lessee shall not amend, modify, supplement or
waive any provision, or permit the amendment, modification, supplementation or
waiver of any provision, of a Sublease without (x) the prior written consent of
the Lessor and the Trustee and (y) satisfaction of the Rating Agency Consent
Condition.

33.     ADMINISTRATOR ACTING AS AGENT OF THE LESSOR. The parties to this
Agreement acknowledge and agree that CCRG shall act as Administrator and, in
such capacity, as the agent for the Lessor, for purposes of performing certain
duties of the Lessor under this Agreement and the Related Documents. As
compensation for the Administrator’s performance of such duties, the Lessor
shall pay to the Administrator on each Payment Date (i) the portion of the
Monthly Administration Fee payable by the Lessor pursuant to the Administration
Agreement and (ii) the reasonable costs and expenses of the Administrator
incurred by it as a result of arranging for the sale of Vehicles returned to the
Lessor in accordance with Section 2.6(b) or as a result of a Vehicle Return
Default and sold to third parties; provided, however, that such costs and
expenses shall only be payable to the Administrator to the extent of any excess
of the sale price received by the Lessor for any such Vehicle over the
Termination Value thereof.

34.     NO PETITION. Each of the Lessee and the Administrator hereby covenants
and agrees that, prior to the date which is one year and one day after the
payment in full of all of the Notes, it will not institute against, or join any
other Person in instituting against, the Lessor, Original AESOP, AESOP Leasing
II, the Intermediary, Quartx, PVHC or CRCF any

-39-

--------------------------------------------------------------------------------

 

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 the Lessee or the Administrator takes
action in violation of this Section 34, the Lessor agrees, for the benefit of
the Secured Parties, that it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such a petition by the Lessee or the
Administrator against the Lessor, Original AESOP, AESOP Leasing II, the
Intermediary, Quartx, PVHC or CRCF or the commencement of such action and raise
the defense that the Lessee or the Administrator 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 34 shall survive the termination of this Agreement.

35.     CERTAIN AGREEMENTS RESPECTING THE MASTER EXCHANGE AGREEMENT. Without
limiting any other provision hereof, the Lessee and the Administrator hereby
covenant and agree that they will cooperate with the Lessor in order to effect
transfers of Relinquished Vehicles to the Intermediary and acquisitions of
Replacement Vehicles by the Intermediary in accordance with the terms of the
Master Exchange Agreement, including by giving such notices and providing such
information to the Lessor or to other persons as the Lessor may from time to
time reasonably request.

36.     SUBMISSION TO JURISDICTION. The Lessor and the Trustee may enforce any
claim arising out of this Agreement in any state or federal court having subject
matter jurisdiction, including, without limitation, any state or federal court
located in the State of New York. For the purpose of any action or proceeding
instituted with respect to any such claim, the Lessee hereby irrevocably submits
to the jurisdiction of such courts. The Lessee further irrevocably consents to
the service of process out of said courts by mailing a copy thereof, by
registered mail, postage prepaid, to the Lessee 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,
the Lender and the Lessor to serve process in any other manner permitted by law
or preclude the Lessor, the Lender or the Trustee from bringing an action or
proceeding in respect hereof in any other country, state or place having
jurisdiction over such action. The Lessee hereby irrevocably waives, 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 the State of New York and any claim that any such
suit, action or proceeding brought in such a court has been brought in an
inconvenient forum.

37.     GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. 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 the Lessee and all rights of the Lessor, the
Lender or the Trustee 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.

-40-

--------------------------------------------------------------------------------

 

38.     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.

39.     NOTICES. All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile transmission or similar
writing) and shall be given to such party, addressed to it, at its address or
telephone number set forth on the signature pages below, or at such other
address or telephone number as such party may hereafter specify for the purpose
by notice to the other party. In each case, a copy of all notices, requests and
other communications that are sent by any party hereunder shall be sent to the
Trustee and the Lender and a copy of all notices, requests and other
communications that are sent by the Lessee to each other that pertain to this
Agreement shall be sent to the Lessor, the Lender and the Trustee. Copies of
notices, requests and other communications delivered to the Trustee, the Lender
and/or the Lessor pursuant to the foregoing sentence shall be sent to the
following addresses:

                  TRUSTEE:   The Bank of New York         c/o BNY Midwest Trust
Company         2 North La Salle Street         10th Floor         Chicago,
Illinois 60602

      Attention:   Corporate Trust Officer

      Telephone:   (312) 827-8569

      Fax:   (312) 869-8562
 
                LENDER:   Cendant Rental Car Funding (AESOP) LLC         c/o
Lord Securities Corporation         48 Wall Street         New York, New York
10005

      Attention:   Benjamin B. Abedine

      Telephone:   (212) 346-9019

      Fax:   (212) 346-9012
 
                LESSOR:   AESOP Leasing L.P.         c/o Lord Securities
Corporation         48 Wall Street         New York, New York 10005

      Attention:   Benjamin B. Abedine

      Telephone:   (212) 346-9019

      Fax:   (212) 346-9012

-41-

--------------------------------------------------------------------------------

 

                  LESSEE:   Cendant Car Rental Group, Inc.         6 Sylvan Way
        Parsippany, NJ 07054

      Attention:   Treasurer

      Telephone:   (973) 496-5000

      Fax:   (973) 496-5852

Each such notice, request or communication shall be effective when received at
the address specified below. Copies of all notices must be sent by first class
mail promptly after transmission by facsimile.

40.     [RESERVED]

41.     TITLE TO MANUFACTURER PROGRAMS IN LESSOR.

The Lessee, by its execution hereof, acknowledges and agrees that, as between
the Lessor and the Lessee, (i) the Lessor is the sole owner and holder of all
right, title and interest in and to the Manufacturer Programs as they relate to
the Vehicles leased hereunder, (ii) in accordance with the Assignment
Agreements, all of the Lessor’s right, title and interest in and to such
Manufacturer Programs shall be assigned to the Trustee (except as expressly
provided otherwise in any Related Document with respect to Relinquished Vehicles
and any related Relinquished Vehicle Property), and (iii) the Lessee does not
have any right, title or interest in any Manufacturer Program as it relates to
the Vehicles leased hereunder. To confirm the foregoing, the Lessee, by its
execution hereof, hereby assigns and transfers to the Lessor any rights that the
Lessee may have in respect of any Manufacturer Programs.

42.     HEADINGS.

Section headings used in this Agreement are for convenience of reference only
and shall not affect the construction of this Agreement.

43.     EXECUTION IN COUNTERPARTS.

This Agreement may be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same Agreement.

44.     EFFECTIVE DATE.

This Agreement shall become effective on the Restatement Effective Date when all
parties hereto have executed the signature pages attached hereto. Except to the
extent amended hereby, the Prior AESOP I Operating Lease is in all respects
ratified and confirmed and in full force and effect. From and after the
Restatement Effective Date all references in the Related

-42-

--------------------------------------------------------------------------------

 

Documents to the AESOP I Operating Lease shall mean such agreement as amended
and restated hereby, unless the context otherwise requires.

45.     NO RECOURSE.

The obligations of AESOP Leasing under this Agreement are solely the obligations
of AESOP Leasing. No recourse shall be had for the payment of any obligation or
claim arising out of or based upon this Agreement against any shareholder,
partner, employee, officer or director of AESOP Leasing.

-43-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Agreement or caused it to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

            LESSOR:

AESOP LEASING L.P.
      By:   AESOP LEASING CORP.,         its general partner              By:  
/s/ Lori Gebron         Name:   Lori Gebron        Title:   Vice President     

            LESSEE AND ADMINISTRATOR:

CENDANT CAR RENTAL GROUP, INC.
      By:   /s/ Lynn Finkel         Name:   Lynn Finkel        Title:   Vice
President     

            Acknowledged and Consented

LENDER:

CENDANT RENTAL CAR FUNDING (AESOP) LLC
      By:   /s/ Orlando Figueroa         Name:   Orlando Figueroa       
Title:   President     

            TRUSTEE:

THE BANK OF NEW YORK, as Trustee
      By:   /s/ Mary L. Collier         Name:   Mary L. Collier        Title:  
Agent   

 

--------------------------------------------------------------------------------

 

            CENDANT CAR RENTAL GROUP, INC.
      By:   /s/ Lynn Finkel         Name:   Lynn Finkel        Title:   Vice
President   

 

--------------------------------------------------------------------------------

 

         

            GUARANTOR (under Prior AESOP I Operating Lease)

CENDANT CAR RENTAL GROUP, INC.
      By:   /s/ Lynn Finkel         Name:   Lynn Finkel        Title:   Vice
President     

Counterpart no. ___ of ten (10) serially numbered manually executed
counterparts. To the extent if any that this document constitutes chattel paper
under the uniform commercial code, no security interest in this document may be
created through the transfer and possession of any counterpart other than
counterpart no. 1.

 

--------------------------------------------------------------------------------

 

SCHEDULE 30.5

Litigation

[NONE]

 

--------------------------------------------------------------------------------

 

SCHEDULE 30.10

Jurisdiction of Organization; Records and Business Locations

                                  Jurisdiction of     Records     States in
which     Lessee     Organization     Locations     Conducts Business    
Cendant Car Rental
Group, Inc.
    Delaware     300 Centre Pointe Dr.
Virginia Beach, VA
23462

1 Campus Drive
Parsippany, NJ 07054     AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, KS,
KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NJ, NM, NY, NC, OH, OK, OR, PA,
RI, SC, TN, TX, UT, VT, VA, WA, WV, WI and WY    

 

--------------------------------------------------------------------------------

 

SCHEDULE 30.13

Compliance with Law

[NONE]

 

--------------------------------------------------------------------------------

 

ATTACHMENT A

Vehicle Acquisition Schedule and Related Information

     
1.
  Principal amount of Loan financing the Vehicle
2.
  Date of Loan financing the Vehicle
3.
  Vehicle Operating Lease Commencement Date
4.
  Vehicle Identification Number (VIN)
5.
  Summary of Vehicles being financed (including, for Vehicles subject to the GM
Repurchase Program, the Designated Period for such Vehicles)
6.
  Program or Non-Program Vehicle
7.
  Capitalized Cost (if applicable)
8.
  Net Book Value (if applicable)

 

--------------------------------------------------------------------------------

 

ATTACHMENT B

Form of Power of Attorney

KNOW ALL MEN BY THESE PRESENTS, that AESOP LEASING L.P. does hereby make,
constitute and appoint Cendant Car Rental Group, Inc. (“CCRG”) its true and
lawful Attorney-in-Fact for it and in its name, stead and behalf, (i) to execute
any and all documents pertaining to the titling of motor vehicles in the name of
AESOP LEASING L.P., PV HOLDING CORP. or QUARTX FLEET MANAGEMENT INC., (ii) the
noting of the lien of The Bank of New York, as trustee (in such capacity, the
“Trustee”), as the first lienholder on certificates of title, (iii) the
licensing and registration of motor vehicles, (iv) designating c/o CCRG as the
mailing address of the Trustee for all documentation relating to the title and
registration of such motor vehicles, (v) applying for duplicate certificates of
title indicating the lien of the Trustee where original certificates of title
have been lost or destroyed and (vi) upon the sale of any such motor vehicle in
accordance with the terms and conditions of the Second Amended and Restated
Master Motor Vehicle Operating Lease Agreement, dated as of June 3, 2004,
between AESOP Leasing L.P. and CCRG as Lessee, releasing the lien of the Trustee
on such motor vehicle by executing any documents required in connection
therewith. This power is limited to the foregoing and specifically does not
authorize the creation of any liens or encumbrances on any of said motor
vehicles.

The powers and authority granted hereunder shall, be effective as of the [___]
day of May, 2004 and unless sooner terminated, revoked or extended, cease eight
(8) years from such date.

 

--------------------------------------------------------------------------------

 

ATTACHMENT B

Page 2

IN WITNESS WHEREOF, AESOP LEASING L.P. has caused this instrument to be executed
on its behalf by its duly authorized officer this    day of May, 2004.

            AESOP LEASING L.P.
      By:                        

State of _______________)

County of _____________)

Subscribed and sworn before me, a notary public, in and for said county and
state, this ____ day of _______, 20___.

Notary Public

My Commission Expires:___________________________