AESOP FUNDING II L.L.C.,

                                    as Issuer

                                       and

                         HARRIS TRUST AND SAVINGS BANK,

                       as Trustee and Series 1998-1 Agent

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

                            SERIES 1998-1 SUPPLEMENT

                          dated as of February 26, 1998

                                       to

                       AMENDED AND RESTATED BASE INDENTURE

                            dated as of July 30, 1997

                            -------------------------
<PAGE>

                           TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PRELIMINARY STATEMENT                                                          1

DESIGNATION                                                                    1

                                    ARTICLE I

                                   DEFINITIONS                                 2

                                   ARTICLE II
                           SERIES 1998-1 ALLOCATIONS                          14

Section 2.1       Establishment of Series 1998-1
                  Collection Account, Series 1998-1
                  Excess Collection Account and Series
                  1998-1 Accrued Interest Account                             14
Section 2.2       Allocations with Respect to the Series 1998-1 Notes         14
Section 2.3       Payments To Noteholders                                     18
Section 2.4       Payment of Note Interest                                    21
Section 2.5       Payment of Note Principal                                   21
Section 2.6       Administrator's Failure to
                  Instruct the Trustee to Make a Deposit or Payment           22
Section 2.7       Series 1998-1 Reserve Account                               23
Section 2.8       Series 1998-1 Distribution Account                          25

                                   ARTICLE III
                              AMORTIZATION EVENTS                             28

                                   ARTICLE IV
                     RIGHT TO WAIVE PURCHASE RESTRICTIONS                     29

                                    ARTICLE V
                          FORM OF SERIES 1998-1 NOTES                         31

Section 5.1       Restricted Global Series 1998-1 Notes                       31
Section 5.2       Temporary Global Series 1998-1
                  Notes; Permanent Global Series
                  1998-1 Notes.                                               32
<PAGE>
                                                                            Page
                                                                            ----
                                   ARTICLE VI

                                    GENERAL                                   32

Section 6.1       Optional Repurchase                                         32
Section 6.2       Information                                                 33
Section 6.3       Exhibits                                                    33
Section 6.4       Ratification of Base Indenture                              33
Section 6.5       Counterparts                                                33
Section 6.6       Governing Law                                               33
Section 6.7       Amendments                                                  34
Section 6.8       Discharge of Indenture                                      34
Section 6.9       Notice to Surety Provider and Rating Agencies               34
Section 6.10      Certain Rights of Surety Provider                           34
Section 6.11      Surety Provider Deemed Noteholder                           35
Section 6.12      Capitalization of AFC-II                                    35
Section 6.13      Series 1998-1 Required Non-Program Enhancement Percentage.  35
Section 6.14      Third Party Beneficiary.                                    35
Section 6.15      Prior Notice by Trustee to Surety Provider.                 36

Exhibit A-1-1:    Form of Restricted Global Series 1998-1 Note
Exhibit A-1-2:    Form of Temporary Global Series 1998-1 Note
Exhibit A-1-3:    Form of Permanent Global Series 1998-1 Note
Exhibit B:        Form of Consent
<PAGE>

            SERIES 1998-1 SUPPLEMENT, dated as of February 26, 1998 (this "
Supplement") between AESOP FUNDING II L.L.C., a special purpose limited
liability company established under the laws of Delaware ("AFC-II"), HARRIS
TRUST AND SAVINGS BANK, an Illinois banking corporation, as trustee (together
with its successors in trust thereunder as provided in the Base Indenture
referred to below, the "Trustee"), and HARRIS TRUST AND SAVINGS BANK, an
Illinois banking corporation, as agent for the benefit of the Series 1998-1
Noteholders and the Surety Provider (the "Series 1998-1 Agent"), to the Amended
and Restated Base Indenture, dated as of July 30, 1997, between AFC-II and the
Trustee (as amended, modified or supplemented from time to time, exclusive of
Supplements creating a new Series of Notes, the "Base Indenture").

                         PRELIMINARY STATEMENT

            WHEREAS, Sections 2.2 and 12.1 of the Base Indenture provide, among
other things, that AFC-II and the Trustee may at any time and from time to time
enter into a supplement to the Base Indenture for the purpose of authorizing the
issuance of one or more Series of Notes.

            NOW, THEREFORE, the parties hereto agree as follows:

                              DESIGNATION

            There is hereby created a Series of Notes to be issued pursuant to
the Base Indenture and this Supplement and such Series of Notes shall be
designated as 6.14% Rental Car Asset Backed Notes, Series 1998-1(the "Series
1998-1 Notes").

            The proceeds from the sale of the Series 1998-1 Notes shall be
deposited in the Collection Account and shall be paid to AFC-II and used to make
Loans under the Loan Agreements to the extent that the Borrowers have requested
Loans thereunder and Eligible Vehicles are available to acquire or refinance
thereunder on the date hereof. Any such portion of proceeds not so used to make
Loans shall be deemed to be Principal Collections.

            The Series 1998-1 Notes are a non-Segregated Series of Notes (as
more fully described in the Base Indenture). Accordingly, all references in this
Supplement to "all" Series of Notes (and all references in this Supplement to
terms defined in the Base Indenture that contain references to "all" Series of
Notes) shall refer to all Series of Notes other than Segregated Series of Notes.
<PAGE>

                               ARTICLE I

                              DEFINITIONS

            (a) All capitalized terms not otherwise defined herein are defined
in the Definitions List attached to the Base Indenture as Schedule I thereto.
All Article, Section or Subsection references herein shall refer to Articles,
Sections or Subsections of the Base Indenture, except as otherwise provided
herein. Unless otherwise stated herein, as the context otherwise requires or if
such term is otherwise defined in the Base Indenture, each capitalized term used
or defined herein shall relate only to the Series 1998-1 Notes and not to any
other Series of Notes issued by AFC-II.

            (b) The following words and phrases shall have the following
meanings with respect to the Series 1998-1 Notes and the definitions of such
terms are applicable to the singular as well as the plural form of such terms
and to the masculine as well as the feminine and neuter genders of such terms:

            "Consent" has the meaning set forth in Article IV of this
Supplement.

            "Consent Period Expiration Date" has the meaning set forth in
Article IV of this Supplement.

            "Designated Amounts" has the meaning set forth in Article IV of this
Supplement.

            "Excess Collections" has the meaning specified in Section 2.3(b) of
this Supplement.

            "Insurance Agreement" means the Insurance Agreement, dated as
February 26, 1998, among the Surety Provider, the Trustee and AFC-II, which
shall constitute an "Enhancement Agreement" with respect the Series 1998-1 Notes
for all purposes under the Indenture.

            "Monthly Total Principal Allocation" means for any Related Month the
sum of all Series 1998-1 Principal Allocations with respect to such Related
Month.

            "Permanent Global Series 1998-1 Note" has the meaning specified in
Section 5.2 of this Supplement.
<PAGE>

            "Principal Deficit Amount" means, with respect to any Distribution
Date, the excess, if any, of (a) the Series 1998-1 Invested Amount on such
Distribution Date (after giving effect to the distribution of the Monthly Total
Principal Allocation for the Related Month) over (b) the sum of the Series
1998-1 Available Reserve Account Amount on such Distribution Date and the Series
1998-1 AESOP I Operating Lease Loan Agreement Borrowing Base on such
Distribution Date.

            "Requisite Noteholders" means Series 1998-1 Noteholders holding 50%
or more of the Series 1998-1 Invested Amount.

            "Restricted Global Series 1998-1 Note" has the meaning specified in
Section 5.1 of this Supplement.

            "Series 1997-1 Notes" means the Series of Notes designated as the
Series 1997-1 Notes.

            "Series 1997-2 Supplement" means the supplement to the Base
Indenture authorizing the issuance of the Series of Notes designated as the
Series 1997-2 Notes.

            "Series 1998-1 Accrued Interest Account" has the meaning specified
in Section 2.1(b) of this Supplement.

            "Series 1998-1 AESOP I Operating Lease Loan Agreement Borrowing
Base" means, as of any date of determination, the product of (a) the Series
1998-1 AESOP I Operating Lease Vehicle Percentage as of such date and (b) the
AESOP I Operating Lease Loan Agreement Borrowing Base as of such date.

            "Series 1998-1 AESOP I Operating Lease Vehicle Percentage" means, as
of any date of determination, a fraction, expressed as a percentage, the
numerator of which is the Series 1998-1 Required AESOP I Operating Lease Vehicle
Amount as of such date and the denominator of which is the sum of the Required
AESOP I Operating Lease Vehicle Amounts for all Series of Notes as of such date.

            "Series 1998-1 Available Reserve Account Amount" means, as of any
date of determination, the amount on deposit in the Series 1998-1 Reserve
<PAGE>

Account (after giving effect to any deposits thereto and withdrawals and
releases therefrom on such date).

            "Series 1998-1 Carryover Controlled Amortization Amount" means, with
respect to any Related Month during the Series 1998-1 Controlled Amortization
Period, the amount, if any, by which the Monthly Total Principal Allocation for
the previous Related Month was less than the Series 1998-1 Controlled
Distribution Amount for the previous Related Month; provided, however, that for
the first Related Month in the Series 1998-1 Controlled Amortization Period, the
Series 1998-1 Carryover Controlled Amortization Amount shall be zero.

            "Series 1998-1 Closing Date" means February 26, 1998.

            "Series 1998-1 Collateral" means the Collateral, the Series 1998-1
Distribution Account Collateral and the Series 1998-1 Reserve Account
Collateral.

            "Series 1998-1 Collection Account" has the meaning specified in
Section 2.1(b) of this Supplement.

            "Series 1998-1 Controlled Amortization Amount" means, with respect
to any Related Month during the Series 1998-1 Controlled Amortization Period,
$100,000,000.

            "Series 1998-1 Controlled Amortization Period" means the period
commencing at the close of business on November 1, 2004 (or, if such day is not
a Business Day, the Business Day immediately preceding such day) and continuing
to the earliest of (i) the commencement of the Series 1998-1 Rapid Amortization
Period, (ii) the date on which the Series 1998-1 Notes are fully paid and the
Surety Provider has been paid all Surety Provider Fees and all other Surety
Provider Reimbursement Amounts then due, (iii) the Series 1998-1 Termination
Date, and (iv) the termination of the Indenture.

            "Series 1998-1 Controlled Distribution Amount" means, with respect
to any Related Month during the Series 1998-1 Controlled Amortization Period, an
amount equal to the sum of the Series 1998-1 Controlled Amortization Amount and
any Series 1998-1 Carryover Controlled Amortization Amount for such Related
Month.

            "Series 1998-1 Deposit Date" has the meaning specified in Section
2.2 of this Supplement.
<PAGE>

            "Series 1998-1 Distribution Account" has the meaning specified in
Section 2.8(a) of this Supplement.

            "Series 1998-1 Distribution Account Collateral" has the meaning
specified in Section 2.8(d) of this Supplement.

            "Series 1998-1 Enhancement" means the Series 1998-1
Overcollateralization Amount and the Series 1998-1 Reserve Account Amount.

            "Series 1998-1 Enhancement Amount" means, as of any date of
determination, the sum of the Series 1998-1 Overcollateralization Amount and the
Series 1998-1 Available Reserve Account Amount as of such date.

            "Series 1998-1 Enhancement Deficiency" means, on any date of
determination, the amount by which the Series 1998-1 Enhancement Amount is less
than the Series 1998-1 Required Enhancement Amount as of such date.

            "Series 1998-1 Excess Collection Account" has the meaning specified
in Section 2.1(b) of this Supplement.

            "Series 1998-1 Expected Final Distribution Date" means the May 2005
Distribution Date.

            "Series 1998-1 Final Distribution Date" means the May 2006
Distribution Date.

            "Series 1998-1 Initial Invested Amount" means the aggregate initial
principal amount of the Series 1998-1 Notes, which is $600,000,000.

            "Series 1998-1 Interest Period" means a period commencing on and
including a Distribution Date and ending on and including the day preceding the
next succeeding Distribution Date; provided, however, that the initial Series
1998-1 Interest Period shall commence on and include the Series 1998-1 Closing
Date and end on and include March 19, 1998.

            "Series 1998-1 Invested Amount" means, when used with respect to any
date, an amount equal to (a) the Series 1998-1 Initial Invested Amount minus (b)
the amount of principal payments made to Series 1998-1 Noteholders on or prior
to such date.
<PAGE>

            "Series 1998-1 Invested Percentage" means as of any date of
determination:

            (a) when used with respect to Principal Collections, the percentage
      equivalent (which percentage shall never exceed 100%) of a fraction the
      numerator of which shall be equal to the sum of the Series 1998-1 Invested
      Amount and the Series 1998-1 Overcollateralization Amount, determined
      during the Series 1998-1 Revolving Period as of the end of the Related
      Month (or, until the end of the initial Related Month, on the Series
      1998-1 Closing Date), or, during the Series 1998-1 Controlled Amortization
      Period and the Series 1998-1 Rapid Amortization Period, as of the end of
      the Series 1998-1 Revolving Period, and the denominator of which shall be
      the greater of (I) the Aggregate Asset Amount as of the end of the Related
      Month or, until the end of the initial Related Month, as of the Series
      1998-1 Closing Date, and (II) as of the same date as in clause (I), the
      sum of the numerators used to determine (i) invested percentages for
      allocations with respect to Principal Collections (for all Series of Notes
      and all classes of such Series of Notes) and (ii) overcollateralization
      percentages for allocations with respect to Principal Collections (for all
      Series of Notes that provide for credit enhancement in the form of
      overcollateralization); and

            (b) when used with respect to Interest Collections, the percentage
      equivalent (which percentage shall never exceed 100%) of a fraction the
      numerator of which shall be the Accrued Amounts with respect to the Series
      1998-1 Notes on such date of determination, and the denominator of which
      shall be the aggregate Accrued Amounts with respect to all Series of Notes
      on such date of determination.

            "Series 1998-1 Limited Liquidation Event of Default" means, so long
as such event or condition continues, any event or condition of the type
specified in clauses (a) through (g) of Article III of this Supplement;
provided, however, that any event or condition of the type specified in clauses
(a) through (e) of Article III of this Supplement shall not constitute a Series
1998-1 Limited Liquidation Event of Default if (i) within such thirty (30) day
period, such Amortization Event shall have been cured and, after such cure of
such Amortization Event is provided for, the Trustee shall have received the
written consent of the Surety Provider waiving the occurrence of such Series
1998-1 Limited Liquidation Event of Default or (ii) the Trustee shall have
received the written consent of the Surety Provider waiving the occurrence of
such Series 1998-1 Limited Liquidation Event of Default.
<PAGE>

            "Series 1998-1 Maximum Aggregate Subaru/Hyundai/Suzuki Amount"
means, as of any day, with respect to Subaru, Hyundai and Suzuki, in the
aggregate, an amount equal to 10% of the aggregate Net Book Value of all
Vehicles leased under the Leases on such day.

            "Series 1998-1 Maximum Amount" means any of the Series 1998-1
Maximum Manufacturer Amounts, the Series 1998-1 Maximum Non-Eligible
Manufacturer Amount, the Series 1998-1 Maximum Non-Program Vehicle Amount or the
Series 1998-1 Maximum Specified States Amount.

            "Series 1998-1 Maximum Individual Subaru/Hyundai/Suzuki Amount"
means, as of any day, with respect to Subaru, Hyundai or Suzuki, individually,
an amount equal to 5% of the aggregate Net Book Value of all Vehicles leased
under the Leases on such day.

            "Series 1998-1 Maximum Manufacturer Amount" means, as of any day,
any of the Series 1998-1 Maximum Mitsubishi Amount, the Series 1998-1 Maximum
Individual Subaru/Hyundai/Suzuki Amount, the Series 1998-1 Maximum Aggregate
Subaru/Hyundai/Suzuki Amount, the Series 1998-1 Maximum Mazda Amount or the
Series 1998-1 Maximum Mazda Program Vehicle Amount.

            "Series 1998-1 Maximum Mazda Amount" means, as of any day, an amount
equal to 20% of the aggregate Net Book Value of all Vehicles leased under the
Leases on such day.

            "Series 1998-1 Maximum Mazda Program Vehicle Amount" means, as of
any day, an amount equal to the Series 1998-1 Maximum Mazda Program Vehicle
Percentage of the aggregate Net Book Value of all Vehicles leased under the
Leases on such day.

            "Series 1998-1 Maximum Mazda Program Vehicle Percentage" means 20%
or such lesser percentage as may be agreed to in writing by AFC-II and the
Surety Provider (initially 5%) on or after the Series 1998-1 Closing Date, with
prompt written notice thereof delivered by AFC-II to the Trustee.

            "Series 1998-1 Maximum Mitsubishi Amount" means, as of any day, an
amount equal to 10% of the aggregate Net Book Value of all Vehicles leased under
the Leases on such day.
<PAGE>

            "Series 1998-1 Maximum Non-Eligible Manufacturer Amount" means, as
of any day, an amount equal to 3% of the aggregate Net Book Value of all
Vehicles leased under the Leases on such day.

            "Series 1998-1 Maximum Non-Program Vehicle Amount" means, as of any
day, an amount equal to the Series 1998-1 Maximum Non-Program Vehicle Percentage
of the aggregate Net Book Value of all Vehicles leased under the Leases on such
day.

            "Series 1998-1 Maximum Non-Program Vehicle Percentage" means 25% or
such lesser percentage as may be agreed to in writing by AFC-II and the Surety
Provider (initially 15%) on or after the Series 1998-1 Closing Date, with prompt
written notice thereof delivered by AFC-II to the Trustee.

            "Series 1998-1 Maximum Specified States Amount" means, as of any
day, an amount equal to 7.5% of the aggregate Net Book Value of all Vehicles
leased under the Leases on such day.

            "Series 1998-1 Monthly Interest" means, with respect to (i) the
initial Series 1998-1 Interest Period, an amount equal to the product of (A) the
Series 1998-1 Note Rate, (B) the Series 1998-1 Initial Invested Amount and (C)
24/360 and (ii) any other Series 1998-1 Interest Period, an amount equal to the
product of (A) one-twelfth of the Series 1998-1 Note Rate and (B) the Series
1998-1 Invested Amount on the first day of such Series 1998-1 Interest Period,
after giving effect to any principal payments made on such date.

            "Series 1998-1 Non-Program Vehicle Percentage" means, as of any date
of determination, a fraction, expressed as a percentage, the numerator of which
is the aggregate Net Book Value of all Non-Program Vehicles leased under the
AESOP I Operating Lease as of such date and the denominator of which is the
aggregate Net Book Value of all Vehicles leased under the AESOP I Operating
Lease as of such date.

            "Series 1998-1 Note Rate" means 6.14% per annum.

            "Series 1998-1 Noteholder" means the Person in whose name a Series
1998-1 Note is registered in the Note Register.

            "Series 1998-1 Notes" means any one of the 6.14% Rental Car Asset
Backed Notes, Series 1998-1, executed by AFC-II and authenticated by or on
behalf of the Trustee, substantially in the form of Exhibit A-1, Exhibit A-2 or
<PAGE>

Exhibit A-3. Definitive Series 1998-1 Notes shall have such insertions and
deletions as are necessary to give effect to the provisions of Section 2.18 of
the Base Indenture.

            "Series 1998-1 Overcollateralization Amount" means (i) as of any
date on which no AESOP I Operating Lease Vehicle Deficiency exists, the Series
1998-1 Required Overcollateralization Amount as of such date and (ii) as of any
date on which an AESOP I Operating Lease Vehicle Deficiency exists, the excess,
if any, of (x) the Series 1998-1 AESOP I Operating Lease Loan Agreement
Borrowing Base as of such date over (y) the Series 1998-1 Invested Amount as of
such date.

            "Series 1998-1 Percentage" means, as of any date of determination, a
fraction, expressed as a percentage, the numerator of which is the Series 1998-1
Invested Amount as of such date and the denominator of which is the aggregate
Invested Amount of each Series of Notes outstanding as of such date.

            "Series 1998-1 Principal Allocation" has the meaning specified in
Section 2.2(a)(ii) of this Supplement.

            "Series 1998-1 Program Vehicle Percentage" means, as of any date of
determination, a fraction, expressed as a percentage, the numerator of which is
the aggregate Net Book Value of all Program Vehicles leased under the AESOP I
Operating Lease as of such date and the denominator of which is the aggregate
Net Book Value of all Vehicles leased under the AESOP I Operating Lease as of
such date.

            "Series 1998-1 Rapid Amortization Period" means the period beginning
at the close of business on the Business Day immediately preceding the day on
which an Amortization Event is deemed to have occurred with respect to the
Series 1998-1 Notes and ending upon the earliest to occur of (i) the date on
which the Series 1998-1 Notes are fully paid and the Surety Provider has been
paid all Surety Provider Fees and all other Surety Provider Reimbursement
Amounts then due, (ii) the Series 1998-1 Termination Date and (iii) the
termination of the Indenture.

            "Series 1998-1 Repurchase Amount" has the meaning specified in
Section 6.1 of this Supplement.
<PAGE>

            "Series 1998-1 Required AESOP I Operating Lease Vehicle Amount"
means, as of any date of determination, the sum of the Series 1998-1 Invested
Amount and the Series 1998-1 Required Overcollateralization Amount as of such
date.

            "Series 1998-1 Required Enhancement Amount" means, as of any date of
determination, the sum of (i) the product of the Series 1998-1 Required
Enhancement Percentage as of such date and the Series 1998-1 Invested Amount as
of such date, (ii) the Series 1998-1 Percentage of the excess, if any, of the
Non-Program Vehicle Amount as of such date over the Series 1998-1 Maximum
Non-Program Vehicle Amount as of such date, (iii) the Series 1998-1 Percentage
of the excess, if any, of the aggregate Net Book Value of all Vehicles
manufactured by Mitsubishi and leased under the Leases as of such date over the
Series 1998-1 Maximum Mitsubishi Amount as of such date, (iv) the Series 1998-1
Percentage of the excess, if any, of the aggregate Net Book Value of all
Vehicles manufactured by Subaru, Hyundai or Suzuki, individually, and leased
under the Leases as of such date over the Series 1998-1 Maximum Individual
Subaru/Hyundai/Suzuki Amount as of such date, (v) the Series 1998-1 Percentage
of the excess, if any, of the aggregate Net Book Value of all Vehicles
manufactured by Subaru, Hyundai or Suzuki, in the aggregate, and leased under
the Leases as of such date over the Series 1998-1 Maximum Aggregate
Subaru/Hyundai/Suzuki Amount as of such date, (vi) the Series 1998-1 Percentage
of the excess, if any, of the aggregate Net Book Value of all Vehicles
manufactured by Mazda and leased under the Leases as of such date over the
Series 1998-1 Maximum Mazda Amount as of such date, (vii) the Series 1998-1
Percentage of the excess, if any, of the aggregate Net Book Value of all Program
Vehicles manufactured by Mazda and leased under the Leases as of such date over
the Series 1998-1 Maximum Mazda Program Vehicle Amount as of such date, (viii)
the Series 1998-1 Percentage of the excess, if any, of the Specified States
Amount as of such date over the Series 1998-1 Maximum Specified States Amount as
of such date and (ix) the Series 1998-1 Percentage of the excess, if any, of the
Non-Eligible Manufacturer Amount as of such date over the Series 1998-1 Maximum
Non-Eligible Manufacturer Amount as of such date.

            "Series 1998-1 Required Enhancement Percentage" means, as of any
date of determination, a fraction, expressed as a percentage, the numerator of
which is the sum of (i) the product of (A) 11% times (B) the Series 1998-1
Program Vehicle Percentage as of such date times (C) the Series 1998-1 Invested
Amount as of such date and (ii) the product of (A) the Series 1998-1 Required
Non-Program Enhancement Percentage as of such date times (B) the Series 1998-1
Non-Program Vehicle Percentage as of such date times (C) the
<PAGE>

Series 1998-1 Invested Amount as of such date and the denominator of which is
the Series 1998-1 Invested Amount as of such date.

            "Series 1998-1 Required Non-Program Enhancement Percentage" means,
as of any date of determination, the greater of (a) 15% and (b) the sum of (i)
15% and (ii) the sum, for each calendar month within the preceding twelve
calendar months (or such fewer number of calendar months as have elapsed since
the Initial Closing Date), of the greater of (x) an amount (not less than zero)
equal to 100% minus the Measurement Month Average for the immediately preceding
Measurement Month and (y) an amount (not less than zero) equal to 100% minus the
Market Value Average as of the Determination Date within such calendar month
(excluding the Market Value Average for any Determination Date which has not yet
occurred).

            "Series 1998-1 Required Overcollateralization Amount" means, as of
any date of determination, the excess, if any, of the Series 1998-1 Required
Enhancement Amount over the sum of (i) the Series 1998-1 Available Reserve
Account Amount as of such date and (ii) the amount of cash and Permitted
Investment on deposit in the Series 1998-1 Collection Account and the Series
1998-1 Excess Collection Account on such date.

            "Series 1998-1 Required Reserve Account Amount" means, with respect
to any Distribution Date, an amount equal to 4.0% of the Series 1998-1 Invested
Amount on such Distribution Date (after giving effect to any payments of
principal to be made on the Series 1998-1 Notes on such Distribution Date).

            "Series 1998-1 Reserve Account" has the meaning specified in Section
2.7(a) of this Supplement.

            "Series 1998-1 Reserve Account Collateral" has the meaning specified
in Section 2.7(d) of this Supplement.

            "Series 1998-1 Reserve Account Initial Deposit" means $24,000,000.

            "Series 1998-1 Reserve Account Surplus" means, with respect to any
Distribution Date, the excess, if any, of the Series 1998-1 Available Reserve
Account Amount over the Series 1998-1 Required Reserve Account Amount on such
Distribution Date.
<PAGE>

            "Series 1998-1 Revolving Period" means the period from and including
the Series 1998-1 Closing Date to the earlier of (i) the commencement of the
Series 1998-1 Controlled Amortization Period and (ii) the commencement of any
Series 1998-1 Rapid Amortization Period.

            "Series 1998-1 Shortfall" has the meaning specified in Section
2.3(a) of this Supplement.

            "Series 1998-1 Termination Date" means the May 2006 Distribution
Date.

            "Supplement" has the meaning set forth in the preamble.

            "Surety Bond" means the Note Guaranty Insurance Policy No. SB 13014,
dated February 26, 1998, issued by the Surety Provider.

            "Surety Default" means (i) the occurrence and continuance of any
failure by the Surety Provider to pay upon a demand for payment in accordance
with the requirements of the Surety Bond or (ii) the occurrence of an Event of
Bankruptcy with respect to the Surety Provider.

            "Surety Provider" means Capital Markets Assurance Corporation, a New
York stock insurance company. The Surety Provider shall constitute an
"Enhancement Provider" with respect to the Series 1998-1 Notes for all purposes
under the Indenture and the other Related Documents.

            "Surety Provider Fee" has the meaning set forth in the Insurance
Agreement.

            "Surety Provider Reimbursement Amounts" means, as of any date of
determination, (i) an amount equal to the aggregate of any amounts due as of
such date to the Surety Provider pursuant to the Insurance Agreement in respect
of unreimbursed draws under the Surety Bond, including interest thereon
determined in accordance with the Insurance Agreement, and (ii) an amount equal
to the aggregate of any other amounts due as of such date to the Surety Provider
pursuant to the Insurance Agreement.

            "Temporary Global Series 1998-1 Note" has the meaning specified in
Section 5.2 of this Supplement.

            "Waiver Event" means the occurrence of the delivery of a Waiver
Request and the subsequent waiver of any Series 1998-1 Maximum Amount.
<PAGE>

            "Waiver Request" has the meaning set forth in Article IV of this
Supplement.

                               ARTICLE II

                       SERIES 1998-1 ALLOCATIONS

            With respect to the Series 1998-1 Notes, the following shall apply:

            Section 2.1 Establishment of Series 1998-1 Collection Account,
Series 1998-1 Excess Collection Account and Series 1998-1 Accrued Interest
Account.

            (a) All Collections allocable to the Series 1998-1 Notes shall be
allocated to the Collection Account.

            (b) The Trustee will create three administrative subaccounts within
the Collection Account for the benefit of the Series 1998-1 Noteholders and the
Surety Provider: the Series 1998-1 Collection Account (such sub-account, the
"Series 1998-1 Collection Account"), the Series 1998-1 Excess Collection Account
(such sub-account, the "Series 1998-1 Excess Collection Account") and the Series
1998-1 Accrued Interest Account (such sub-account, the "Series 1998-1 Accrued
Interest Account").

            Section 2.2 Allocations with Respect to the Series 1998-1 Notes. The
proceeds from the initial sale of the Series 1998-1 Notes will be deposited into
the Collection Account. On each Business Day on which Collections are deposited
into the Collection Account (each such date, a "Series 1998-1 Deposit Date"),
the Administrator will direct the Trustee in writing pursuant to the
Administration Agreement to allocate all amounts deposited into the Collection
Account in accordance with the provisions of this Section 2.2:

            (a) Allocations of Collections During the Series 1998-1 Revolving
Period. During the Series 1998-1 Revolving Period, the Administrator will direct
the Trustee in writing pursuant to the Administration Agreement to allocate on
each day, prior to 11:00 a.m. (New York City time) on each Series 1998-1 Deposit
Date, all amounts deposited into the Collection Account as set forth below:
<PAGE>

            (i) allocate to the Series 1998-1 Collection Account an amount equal
      to the Series 1998-1 Invested Percentage (as of such day) of the aggregate
      amount of Interest Collections on such day. All such amounts allocated to
      the Series 1998-1 Collection Account shall be further allocated to the
      Series 1998-1 Accrued Interest Account; and

            (ii) allocate to the Series 1998-1 Excess Collection Account an
      amount equal to the Series 1998-1 Invested Percentage (as of such day) of
      the aggregate amount of Principal Collections on such day (for any such
      day, the "Series 1998-1 Principal Allocation"); provided however, if a
      Waiver Event shall have occurred, then such allocation shall be modified
      as provided in Article IV of this Supplement.

            (b) Allocations of Collections During any Series 1998-1 Controlled
Amortization Period. With respect to the Series 1998-1 Controlled Amortization
Period, the Administrator will direct the Trustee in writing pursuant to the
Administration Agreement to allocate, prior to 11:00 a.m. (New York City time)
on any Series 1998-1 Deposit Date, all amounts deposited into the Collection
Account as set forth below:

            (i) allocate to the Series 1998-1 Collection Account an amount
      determined as set forth in Section 2.2(a)(i) above for such day, which
      amount shall be further allocated to the Series 1998-1 Accrued Interest
      Account; and

            (ii) allocate to the Series 1998-1 Collection Account an amount
      equal to the Series 1998-1 Principal Allocation for such day, which amount
      shall be used to make principal payments in respect of the Series 1998-1
      Notes; provided, however, that if the Monthly Total Principal Allocation
      exceeds the Series 1998-1 Controlled Distribution Amount, then the amount
      of such excess shall be allocated to the Series 1998-1 Excess Collection
      Account; and provided further that if a Waiver Event shall have occurred,
      then such allocation shall be modified as provided in Article IV of this
      Supplement.

            (c) Allocations of Collections During the Series 1998-1 Rapid
Amortization Period. With respect to the Series 1998-1 Rapid Amortization
Period, other than after the occurrence of an Event of Bankruptcy with respect
to ARAC, any other Lessee or ARC, the Administrator will direct the Trustee in
writing pursuant to the Administration Agreement to allocate, prior to 11:00
a.m. 
<PAGE>

(New York City time) on any Series 1998-1 Deposit Date, all amounts deposited
into the Collection Account as set forth below:

            (i) allocate to the Series 1998-1 Collection Account an amount
      determined as set forth in Section 2.2(a)(i) above for such day, which
      amount shall be further allocated to the Series 1998-1 Accrued Interest
      Account; and

            (ii) allocate to the Series 1998-1 Collection Account an amount
      equal to the Series 1998-1 Principal Allocation for such day, which amount
      shall be used to make principal payments in respect of the Series 1998-1
      Notes, ratably, without preference or priority of any kind, until the
      Series 1998-1 Invested Amount is paid in full.

            (d) Allocations of Collections after the Occurrence of an Event of
Bankruptcy. After the occurrence of an Event of Bankruptcy with respect to ARAC,
any other Lessee or ARC, the Administrator will direct the Trustee in writing
pursuant to the Administration Agreement to allocate, prior to 11:00 a.m. (New
York City time) on any Series 1998-1 Deposit Date, all amounts attributable to
the AESOP I Operating Lease Loan Agreement deposited into the Collection Account
as set forth below:

            (i) allocate to the Series 1998-1 Collection Account an amount equal
      to the Series 1998-1 AESOP I Operating Lease Vehicle Percentage as of the
      date of the occurrence of such Event of Bankruptcy of the aggregate amount
      of Interest Collections made under the AESOP I Operating Lease Loan
      Agreement. All such amounts allocated to the Series 1998-1 Collection
      Account shall be further allocated to the Series 1998-1 Accrued Interest
      Account;

            (ii) allocate to the Series 1998-1 Collection Account an amount
      equal to the Series 1998-1 AESOP I Operating Lease Vehicle Percentage as
      of the date of the occurrence of such Event of Bankruptcy of the aggregate
      amount of Principal Collections made under the AESOP I Operating Lease
      Loan Agreement, which amount shall be used to make principal payments in
      respect of the Series 1998-1 Notes, ratably, without preference or
      priority of any kind, until the Series 1998-1 Invested Amount is paid in
      full.

After the occurrence of an Event of Bankruptcy with respect to ARAC, any other
Lessee or ARC, the Administrator will direct the Trustee in writing pursuant to
the 
<PAGE>

Administration Agreement to allocate all amounts attributable to the AESOP I
Finance Lease Loan Agreement and the AESOP II Loan Agreement in accordance with
the provisions of the Series 1997-2 Supplement.

            (e) Series 1998-1 Excess Collection Account. Amounts allocated to
the Series 1998-1 Excess Collection Account on any Series 1998-1 Deposit Date
will be (w) first, deposited in the Series 1998-1 Reserve Account in an amount
up to the excess, if any, of the Series 1998-1 Required Reserve Account Amount
for such date over the Series 1998-1 Available Reserve Account Amount for such
date, (x) second, used to pay the principal amount of other Series of Notes that
are then in amortization, (y) third, released to AESOP Leasing in an amount
equal to the product of (A) the Loan Agreement's Share with respect to the AESOP
I Operating Lease Loan Agreement as of such date times (B) 100% minus the Loan
Payment Allocation Percentage with respect to the AESOP I Operating Lease Loan
Agreement as of such date times (C) the amount of any remaining funds and (z)
fourth, paid to AFC-II and used to make Loans under the Loan Agreements to the
extent the Borrowers have requested Loans thereunder, Eligible Vehicles are
available for financing thereunder and no Series 1998-1 Enhancement Deficiency
or AESOP I Operating Lease Vehicle Deficiency would result therefrom. Upon the
occurrence of an Amortization Event, funds on deposit on the Series 1998-1
Excess Collection Account will be withdrawn by the Trustee, deposited in the
Series 1998-1 Collection Account and allocated as Principal Collections to
reduce the Series 1998-1 Invested Amount on the immediately succeeding
Distribution Date.

            Section 2.3 Payments To Noteholders.

            On each Determination Date, as provided below, the Administrator
shall instruct the Paying Agent in writing pursuant to the Administration
Agreement to withdraw, and on the following Distribution Date the Paying Agent,
acting in accordance with such instructions, shall withdraw the amounts required
to be withdrawn from the Collection Account pursuant to Sections 2.3(a) and (b)
below in respect of all funds available from Interest Collections processed
since the preceding Distribution Date and allocated to the holders of the Series
1998-1 Notes.

            (a) Note Interest with respect to the Series 1998-1 Notes. On each
Determination Date, the Administrator shall instruct the Trustee and the Paying
Agent in writing pursuant to Administration Agreement as to the amount to be
withdrawn and paid pursuant to Section 2.4 of this Supplement from the Series
1998-1 Accrued Interest Account to the extent funds are anticipated to be
<PAGE>

available from Interest Collections allocable to the Series 1998-1 Notes
processed from but not including the preceding Distribution Date through the
succeeding Distribution Date in respect of (x) first, an amount equal to Series
1998-1 Monthly Interest for the Series 1998-1 Interest Period ending on the day
preceding the related Distribution Date, (y) second, an amount equal to the
amount of any unpaid Series 1998-1 Shortfall as of the preceding Distribution
Date (together with any accrued interest on such Series 1998-1 Shortfall) and
(z) third, an amount equal to the Surety Provider Fee for such Series 1998-1
Interest Period plus any Surety Provider Reimbursement Amounts then due and
owing. If the amounts anticipated to be available from the Series 1998-1 Accrued
Interest Account will be insufficient to pay the sum of the amounts described in
clauses (x), (y) and (z) above on any Distribution Date, the Administrator shall
instruct the Trustee in writing to withdraw from the Series 1998-1 Reserve
Account and deposit in the Series 1998-1 Distribution Account on the following
Distribution Date an amount equal to the lesser of the Series 1998-1 Available
Reserve Account Amount and such insufficiency; provided, however, that after the
occurrence of a Surety Default, no amounts in respect of the Surety Provider Fee
shall be withdrawn from the Series 1998-1 Reserve Account. If the amounts
described in the preceding two sentences are insufficient to pay the sum of the
amounts described in clauses (x) and (y) above on any Distribution Date, the
Trustee shall make a demand on the Surety Bond in accordance with the terms
thereof in an amount equal to such insufficiency and deposit the proceeds
thereof in the Series 1998-1 Distribution Account. If the amounts described in
this Section 2.3(a) are insufficient to pay Series 1998-1 Monthly Interest on
any Distribution Date, payments of interest to the Series 1998-1 Noteholders
will be reduced on a pro rata basis by the amount of such deficiency. The
aggregate amount, if any, of such deficiency on any Distribution Date shall be
referred to as the "Series 1998-1 Shortfall." Interest shall accrue on the
Series 1998-1 Shortfall at the Series 1998-1 Note Rate. On the following
Distribution Date, the Trustee shall withdraw the amounts described in this
Section 2.3(a) from the Series 1998-1 Accrued Interest Account and deposit such
amounts in the Series 1998-1 Distribution Account.

            (b) Balance. On or prior to the second Business Day preceding each
Distribution Date, the Administrator shall instruct the Trustee and the Paying
Agent in writing pursuant to the Administration Agreement to pay the balance
(after making the payments required in Section 2.3(a) of this Supplement), if
any, of the Interest Collections allocated to holders of the Series 1998-1 Notes
since the preceding Distribution Date as follows:
<PAGE>

            (i) on each Distribution Date during the Series 1998-1 Revolving
      Period or the Series 1998-1 Controlled Amortization Period, (1) first, to
      the Surety Provider, in an amount equal to (x) the Surety Provider Fee for
      the related Series 1998-1 Interest Period and, without duplication, (y)
      any Surety Provider Reimbursement Amounts then due and owing, (2) second,
      to the Administrator, an amount equal to the Series 1998-1 Percentage as
      of the beginning of such Series 1998-1 Interest Period of the portion of
      the Monthly Administration Fee payable by AFC-II (as specified in clause
      (iii) of the definition thereof) for such Series 1998-1 Interest Period,
      (3) third, to the Trustee, an amount equal to the Series 1998-1 Percentage
      as of the beginning of such Series 1998-1 Interest Period of the Trustee's
      fees for such Series 1998-1 Interest Period, (4) fourth, to pay any
      Carrying Charges (other than Carrying Charges provided for above) to the
      Persons to whom such amounts are owed, an amount equal to the Series
      1998-1 Percentage as of the beginning of such Series 1998-1 Interest
      Period of such Carrying Charges (other than Carrying Charges provided for
      above) for such Series 1998-1 Interest Period and (5) fifth, the balance,
      if any ("Excess Collections"), shall be withdrawn by the Paying Agent from
      the Series 1998-1 Collection Account and deposited in the Series 1998-1
      Excess Collection Account; and

            (ii) on each Distribution Date during the Series 1998-1 Rapid
      Amortization Period, (1) first, to the Surety Provider, in an amount equal
      to (x) the Surety Provider Fee for the related Series 1998-1 Interest
      Period and, without duplication, (y) any Surety Provider Reimbursement
      Amounts then due and owing, (2) second, to the Trustee, an amount equal to
      the Series 1998-1 Percentage as of the beginning of such Series 1998-1
      Interest Period of the Trustee's fees for such Series 1998-1 Interest
      Period, (3) third, to the Administrator, an amount equal to the Series
      1998-1 Percentage as of the beginning of such Series 1998-1 Interest
      Period of the portion of the Monthly Administration Fee (as specified in
      clause (iii) of the definition thereof) payable by AFC-II for such Series
      1998-1 Interest Period, (4) fourth, to pay any Carrying Charges (other
      than Carrying Charges provided for above) to the Persons to whom such
      amounts are owed, an amount equal to the Series 1998-1 Percentage as of
      the beginning of such Series 1998-1 Interest Period of such Carrying
      Charges (other than Carrying Charges provided for above) for such Series
      1998-1 Interest Period and (5) fifth, the balance, if any, shall
      constitute Excess Collections and shall be withdrawn by the Paying Agent
      from the Series 1998-1 Collection Account and deposited in the Series
      1998-1 Excess Collection Account.
<PAGE>

            Section 2.4  Payment of Note Interest.

            On each Distribution Date, subject to Section 9.8 of the Base
Indenture, the Paying Agent shall, in accordance with Section 6.1 of the Base
Indenture, pay to the Series 1998-1 Noteholders from the Series 1998-1
Distribution Account the amount deposited in the Series 1998-1 Distribution
Account for the payment of interest pursuant to Section 2.3(a) of this
Supplement and, to the extent necessary to pay interest on the Series 1998-1
Notes, first, amounts on deposit in the Series 1998-1 Collection Account,
second, amounts on deposit in the Series 1998-1 Reserve Account and third,
proceeds of a demand on the Surety Bond made in accordance with the terms
thereof.

            Section 2.5 Payment of Note Principal.

            (a) Monthly Payments During Controlled Amortization Period or Rapid
Amortization Period. Commencing on the second Determination Date during the
Series 1998-1 Controlled Amortization Period, or the first Determination Date
after the commencement of the Series 1998-1 Rapid Amortization Period, the
Administrator shall instruct the Trustee and the Paying Agent in writing
pursuant to the Administration Agreement as to the amount allocated to the
Series 1998-1 Notes during the Related Month pursuant to Section 2.2(b)(ii),
(c)(ii) or (d)(ii), as the case may be, of this Supplement, as to any amounts to
be withdrawn from the Series 1998-1 Reserve Account and deposited into the
Series 1998-1 Distribution Account, and as to the amount of any demand on the
Surety Bond in accordance with the terms thereof. On the Distribution Date
following each such Determination Date, the Trustee shall withdraw the amount
allocated to the Series 1998-1 Notes during the Related Month pursuant to
Section 2.2(b)(ii), (c)(ii) or (d)(ii), as the case may be, of this Supplement
from the Series 1998-1 Collection Account and deposit such amount in the Series
1998-1 Distribution Account, to be paid to the holders of the Series 1998-1
Notes. If the amount so deposited in the Series 1998-1 Collection Account with
respect to the Series 1998-1 Final Distribution Date is less than the Series
1998-1 Invested Amount, the Trustee shall withdraw from the Series 1998-1
Reserve Account, an amount equal to the lesser of the Series 1998-1 Available
Reserve Account Amount and such insufficiency. If the Series 1998-1 Available
Reserve Account Amount is less than such insufficiency, the Trustee shall make a
demand on the Surety Bond in accordance with the terms thereof in an amount
equal to such insufficiency and deposit the proceeds thereof in the Series
1998-1 Distribution Account. The entire principal amount of all Outstanding
Series 
<PAGE>

1998-1 Notes shall be due and payable on the Series 1998-1 Final Distribution
Date.

            (b) If on any Determination Date the Administrator determines that
the Principal Deficit Amount with respect to the next succeeding Distribution
Date will be greater than zero, the Administrator shall instruct the Trustee in
writing to make a demand on the Surety Bond on such Determination Date in
accordance with the terms thereof in an amount equal to such Principal Deficit
Amount and deposit the proceeds thereof into the Series 1998-1 Distribution
Account.

            (c) On each Distribution Date occurring on or after the date a
withdrawal is made from the Series 1998-1 Collection Account or the Series
1998-1 Reserve Account pursuant to Section 2.5(a) of this Supplement or a demand
is made pursuant to Section 2.5(b) of this Supplement, the Paying Agent shall,
in accordance with Section 6.1 of the Base Indenture, pay pro rata to each
Series 1998-1 Noteholder from the Series 1998-1 Distribution Account the amount
deposited therein pursuant to Section 2.5(a) or (b) of this Supplement, to the
extent necessary to pay the Series 1998-1 Controlled Amortization Amount during
the Series 1998-1 Controlled Amortization Period, or to the extent necessary to
pay the Series 1998-1 Invested Amount during the Series 1998-1 Rapid
Amortization Period.

            Section 2.6 Administrator's Failure to Instruct the Trustee to Make
a Deposit or Payment.

            If the Administrator fails to give notice or instructions to make
any payment from or deposit into the Collection Account required to be given by
the Administrator, at the time specified in the Administration Agreement or any
other Related Document (including applicable grace periods), the Trustee shall
make such payment or deposit into or from the Collection Account without such
notice or instruction from the Administrator, provided that the Administrator,
upon request of the Trustee, promptly provides the Trustee with all information
necessary to allow the Trustee to make such a payment or deposit. When any
payment or deposit hereunder or under any other Related Document is required to
be made by the Trustee or the Paying Agent at or prior to a specified time, the
Administrator shall deliver any applicable written instructions with respect
thereto reasonably in advance of such specified time.
<PAGE>

            Section 2.7 Series 1998-1 Reserve Account.

            (a) Establishment of Series 1998-1 Reserve Account. AFC-II shall
establish and maintain in the name of the Series 1998-1 Agent for the benefit of
the Series 1998-1 Noteholders and the Surety Provider, or cause to be
established and maintained, an account (the "Series 1998-1 Reserve Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Series 1998-1 Noteholders and the Surety Provider.
The Series 1998-1 Reserve Account shall be maintained (i) with a Qualified
Institution, or (ii) as a segregated trust account with the corporate trust
department of a depository institution or trust company having corporate trust
powers and acting as trustee for funds deposited in the Series 1998-1 Reserve
Account; provided that, if at any time such Qualified Institution is no longer a
Qualified Institution or the credit rating of any securities issued by such
depositary institution or trust company shall be reduced to below BBB- by S&P or
Baa3 by Moody's, then AFC-II shall, within 30 days of such reduction, establish
a new Series 1998-1 Reserve Account with a new Qualified Institution. If the
Series 1998-1 Reserve Account is not maintained in accordance with the previous
sentence, AFC-II shall establish a new Series 1998-1 Reserve Account, within ten
(10) Business Days after obtaining knowledge of such fact, which complies with
such sentence, and shall instruct the Series 1998-1 Agent in writing to transfer
all cash and investments from the non-qualifying Series 1998-1 Reserve Account
into the new Series 1998-1 Reserve Account. Initially, the Series 1998-1 Reserve
Account will be established with Harris Trust and Savings Bank. On the Series
1998-1 Closing Date, AFC-II shall deposit an amount equal to the Series 1998-1
Reserve Account Initial Deposit into the Series 1998-1 Reserve Account.

            (b) Administration of the Series 1998-1 Reserve Account. The
Administrator may instruct the institution maintaining the Series 1998-1 Reserve
Account to invest funds on deposit in the Series 1998-1 Reserve Account from
time to time in Permitted Investments; provided, however, that any such
investment shall mature not later than the Business Day prior to the
Distribution Date following the date on which such funds were received, unless
any Permitted Investment held in the Series 1998-1 Reserve Account is held with
the Paying Agent, then such investment may mature on such Distribution Date and
such funds shall be available for withdrawal on or prior to such Distribution
Date. All such Permitted Investments will be credited to the Series 1998-1
Reserve Account.
<PAGE>

            (c) Earnings from Series 1998-1 Reserve Account. All interest and
earnings (net of losses and investment expenses) paid on funds on deposit in the
Series 1998-1 Reserve Account shall be deemed to be on deposit therein and
available for distribution.

            (d) Series 1998-1 Reserve Account Constitutes Additional Collateral
for Series 1998-1 Notes. In order to secure and provide for the repayment and
payment of the AFC-II Obligations with respect to the Series 1998-1 Notes,
AFC-II hereby grants a security interest in and assigns, pledges, grants,
transfers and sets over to the Series 1998-1 Agent, for the benefit of the
Series 1998-1 Noteholders and the Surety Provider, all of AFC-II's right, title
and interest in and to the following (whether now or hereafter existing or
acquired): (i) the Series 1998-1 Reserve Account, including any security
entitlement thereto; (ii) all funds on deposit therein from time to time; (iii)
all certificates and instruments, if any, representing or evidencing any or all
of the Series 1998-1 Reserve Account or the funds on deposit therein from time
to time; (iv) all investments made at any time and from time to time with monies
in the Series 1998-1 Reserve Account, whether constituting securities,
instruments, general intangibles, investment property, financial assets or other
property; (v) all interest, dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for the Series 1998-1 Reserve Account, the funds on deposit therein
from time to time or the investments made with such funds; and (vi) all proceeds
of any and all of the foregoing, including, without limitation, cash (the items
in the foregoing clauses (i) through (vi) are referred to, collectively, as the
"Series 1998-1 Reserve Account Collateral"). The Series 1998-1 Agent shall
possess all right, title and interest in all funds on deposit from time to time
in the Series 1998-1 Reserve Account and in all proceeds thereof, and shall be
the only person authorized to originate entitlement orders in respect of the
Series 1998-1 Reserve Account. The Series 1998-1 Reserve Account Collateral
shall be under the sole dominion and control of the Series 1998-1 Agent for the
benefit of the Series 1998-1 Noteholders and the Surety Provider.

            (e) Series 1998-1 Reserve Account Surplus. In the event that the
Series 1998-1 Reserve Account Surplus on any Distribution Date, after giving
effect to all withdrawals from the Series 1998-1 Reserve Account, is greater
than zero, the Trustee, acting in accordance with the written instructions of
the Administrator pursuant to the Administration Agreement, shall withdraw from
the Series 1998-1 Reserve Account an amount equal to the Series 1998-1 Reserve
Account Surplus and shall pay such amount to AFC-II.
<PAGE>

            (f) Termination of Series 1998-1 Reserve Account. Upon the
termination of the Indenture pursuant to Section 11.1 of the Base Indenture, the
Trustee, acting in accordance with the written instructions of the
Administrator, after the prior payment of all amounts owing to the Series 1998-1
Noteholders and to the Surety Provider and payable from the Series 1998-1
Reserve Account as provided herein, shall withdraw from the Series 1998-1
Reserve Account all amounts on deposit therein for payment to AFC-II.

            Section 2.8 Series 1998-1 Distribution Account.

            (a) Establishment of Series 1998-1 Distribution Account. The Trustee
shall establish and maintain in the name of the Series 1998-1 Agent for the
benefit of the Series 1998-1 Noteholders and the Surety Provider, or cause to be
established and maintained, an account (the "Series 1998-1 Distribution
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Series 1998-1 Noteholders and the Surety
Provider. The Series 1998-1 Distribution Account shall be maintained (i) with a
Qualified Institution, or (ii) as a segregated trust account with the corporate
trust department of a depository institution or trust company having corporate
trust powers and acting as trustee for funds deposited in the Series 1998-1
Distribution Account; provided that, if at any time such Qualified Institution
is no longer a Qualified Institution or the credit rating of any securities
issued by such depositary institution or trust company shall be reduced to below
BBB- by S&P or Baa3 by Moody's, then AFC-II shall, within 30 days of such
reduction, establish a new Series 1998-1 Distribution Account with a new
Qualified Institution. If the Series 1998-1 Distribution Account is not
maintained in accordance with the previous sentence, AFC-II shall establish a
new Distribution Account, within ten (10) Business Days after obtaining
knowledge of such fact, which complies with such sentence, and shall instruct
the Series 1998-1 Agent in writing to transfer all cash and investments from the
non-qualifying Series 1998-1 Distribution Account into the new Series 1998-1
Distribution Account. Initially, the Series 1998-1 Distribution Account will be
established with Harris Trust and Savings Bank.

            (b) Administration of the Series 1998-1 Distribution Account. The
Administrator may instruct the institution maintaining the Series 1998-1
Distribution Account to invest funds on deposit in the Series 1998-1
Distribution Account from time to time in Permitted Investments; provided,
however, that any such investment shall mature not later than the Business Day
prior to the Distribution Date following the date on which such funds were
received, unless any Permitted Investment held in the Series 1998-1 Distribution
Account is held with the Paying Agent, then such investment may mature on such
Distribution 
<PAGE>

Date and such funds shall be available for withdrawal on or prior to such
Distribution Date. All such Permitted Investments will be credited to the Series
1998-1 Distribution Account.

            (c) Earnings from Series 1998-1 Distribution Account. All interest
and earnings (net of losses and investment expenses) paid on funds on deposit in
the Series 1998-1 Distribution Account shall be deemed to be on deposit and
available for distribution.

            (d) Series 1998-1 Distribution Account Constitutes Additional
Collateral for Series 1998-1 Notes. In order to secure and provide for the
repayment and payment of the AFC-II Obligations with respect to the Series
1998-1 Notes, AFC-II hereby grants a security interest in and assigns, pledges,
grants, transfers and sets over to the Series 1998-1 Agent, for the benefit of
the Series 1998-1 Noteholders and the Surety Provider, all of AFC-II's right,
title and interest in and to the following (whether now or hereafter existing or
acquired): (i) the Series 1998-1 Distribution Account, including any security
entitlement thereto; (ii) all funds on deposit therein from time to time; (iii)
all certificates and instruments, if any, representing or evidencing any or all
of the Series 1998-1 Distribution Account or the funds on deposit therein from
time to time; (iv) all investments made at any time and from time to time with
monies in the Series 1998-1 Distribution Account, whether constituting
securities, instruments, general intangibles, investment property, financial
assets or other property; (v) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for the Series 1998-1 Distribution Account, the
funds on deposit therein from time to time or the investments made with such
funds; and (vi) all proceeds of any and all of the foregoing, including, without
limitation, cash (the items in the foregoing clauses (i) through (vi) are
referred to, collectively, as the "Series 1998-1 Distribution Account
Collateral"). The Series 1998-1 Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Series 1998-1
Distribution Account and in all proceeds thereof, and shall be the only person
authorized to originate entitlement orders in respect of the Series 1998-1
Distribution Account. The Series 1998-1 Distribution Account Collateral shall be
under the sole dominion and control of the Series 1998-1 Agent for the benefit
of the Series 1998-1 Noteholders and the Surety Provider.
<PAGE>

                              ARTICLE III

                          AMORTIZATION EVENTS

            In addition to the Amortization Events set forth in Section 9.1 of
the Base Indenture, the following shall be Amortization Events with respect to
the Series 1998-1 Notes and shall constitute the Amortization Events set forth
in Section 9.1(n) of the Base Indenture with respect to the Series 1998-1 Notes
(without notice or other action on the part of the Trustee or any holders of the
Series 1998-1 Notes) and shall not be subject to waiver:

            (a) a Series 1998-1 Enhancement Deficiency shall occur and continue
for at least two (2) Business Days; provided, however, that such event or
condition shall not be an Amortization Event if (i) during such two (2) Business
Day period such Series 1998-1 Enhancement Deficiency shall have been cured in
accordance with the terms and conditions of the Indenture and the Related
Documents;

            (b) the Series 1998-1 Available Reserve Account Amount shall be less
than the Series 1998-1 Required Reserve Account Amount for at least two (2)
Business Days; provided, however, that such event or condition shall not be an
Amortization Event if (i) during such two (2) Business Day period such
insufficiency shall have been cured in accordance with the terms and conditions
of the Indenture and the Related Documents;

            (c) the Series 1998-1 Reserve Account shall be subject to an
injunction, estoppel or other stay or a Lien (other than Liens permitted under
the Related Documents);

            (d) all principal and interest of the Series 1998-1 Notes is not
paid in full on or before the Series 1998-1 Expected Final Distribution Date;

            (e) the Trustee shall make a demand for payment under the Surety
Bond;

            (f) the occurrence of an Event of Bankruptcy with respect to the
Surety Provider; and

            (g) the Surety Provider fails to pay a demand for payment in
accordance with the requirements of the Surety Bond.
<PAGE>

                               ARTICLE IV

                  RIGHT TO WAIVE PURCHASE RESTRICTIONS

            Notwithstanding any provision to the contrary in the Indenture or
the Related Documents, upon the Trustee's receipt of notice from any Lessee, any
Borrower or AFC-II (i) to the effect that a Manufacturer Program is no longer an
Eligible Manufacturer Program and that, as a result, the Series 1998-1 Maximum
Non-Program Vehicle Amount is or will be exceeded or (ii) that the Lessees, the
Borrowers and AFC-II have determined to increase any Series 1998-1 Maximum
Amount, (such notice, a "Waiver Request"), each Series 1998-1 Noteholder may, at
its option, waive the Series 1998-1 Maximum Non-Program Vehicle Amount or any
other Series 1998-1 Maximum Amount if (i) no Amortization Event exists, (ii) the
Requisite Noteholders and the Surety Provider consent to such waiver and (iii)
60 days' prior, written notice of such proposed waiver is provided to the Rating
Agencies by the Trustee.

            Upon receipt by the Trustee of a Waiver Request (a copy of which the
Trustee shall promptly provide to the Rating Agencies), all amounts which would
otherwise be allocated to the Series 1998-1 Excess Collection Account
(collectively, the "Designated Amounts") from the date the Trustee receives a
Waiver Request through the Consent Period Expiration Date will be held by the
Trustee in the Series 1998-1 Collection Account for ratable distribution as
described below.

            Within ten (10) Business Days after the Trustee receives a Waiver
Request, the Trustee shall furnish notice thereof to the Series 1998-1
Noteholders and the Surety Provider, which notice shall be accompanied by a form
of consent (each a "Consent") in the form of Exhibit B by which the Series
1998-1 Noteholders may, on or before the Consent Period Expiration Date, consent
to waiver of the applicable Series 1998-1 Maximum Amount. If the Trustee
receives the consent of the Surety Provider and Consents from the Requisite
Noteholders agreeing to waiver of the applicable Series 1998-1 Maximum Amount
within forty-five (45) days after the Trustee notifies the Series 1998-1
Noteholders of a Waiver Request (theday on which such forty-five (45) day period
expires, the "Consent Period Expiration Date"), (i) the applicable Series 1998-1
Maximum Amount shall be deemed waived by the consenting Series 1998-1
Noteholders, (ii) the Trustee will distribute the Designated Amounts as set
forth below and (iii) the Trustee shall promptly (but in any event 
<PAGE>

within two days) provide the Rating Agency with notice of such waiver. Any
Series 1998-1 Noteholder from whom the Trustee has not received a Consent on or
before the Consent Period Expiration Date will be deemed not to have consented
to such waiver.

            If the Trustee receives Consents from the Requisite Noteholders on
or before the Consent Period Expiration Date, then on the immediately following
Distribution Date, the Trustee will pay the Designated Amounts as follows:

                        (i) to the non-consenting Series 1998-1 Noteholders, if 
            any, pro rata up to the amount required to pay all Series 1998-1
            Notes held by such non-consenting Series 1998-1 Noteholders in full;
            and

                        (ii) any remaining Designated Amounts to the Series 
            1998-1 Excess Collection Account.

            If the amount paid pursuant to clause (i) of the preceding paragraph
is not paid in full on the date specified therein, then on each day following
such Distribution Date, the Administrator will allocate to the Series 1998-1
Collection Account on a daily basis all Designated Amounts collected on such
day. On each following Distribution Date, the Trustee will withdraw a portion of
such Designated Amounts from the Series 1998-1 Collection Account and deposit
same in the Series 1998-1 Distribution Account for distribution as follows:

                        (a) to the non-consenting Series 1998-1 Noteholders, if
            any, pro rata an amount equal to the Designated Amounts in the
            Series 1998-1 Collection Account as of the applicable Determination
            Date up to the aggregate outstanding principal balance of the Series
            1998-1 Notes held by the non-consenting Series 1998-1 Noteholders;
            and

                        (b) any remaining Designated Amounts to the Series 
            1998-1 Excess Collection Account.

            If the Requisite Noteholders or the Surety Provider do not timely
consent to such waiver, the Designated Amounts will be re-allocated to the
Series 1998-1 Excess Collection Account for allocation and distribution in
accordance with the terms of the Indenture and the Related Documents.

            In the event that the Series 1998-1 Rapid Amortization Period shall
commence after receipt by the Trustee of a Waiver Request, all such Designated
<PAGE>

Amounts will thereafter be considered Principal Collections allocated to the
Series 1998-1 Noteholders.

                               ARTICLE V

                      FORM OF SERIES 1998-1 NOTES

            Section 5.1 Restricted Global Series 1998-1 Notes. The Series 1998-1
Notes to be issued in the United States will be issued in book-entry form of and
represented by one or more permanent global Notes in fully registered form
without interest coupons (each, a "Restricted Global Series 1998-1 Note",
substantially in the form set forth in Exhibit A-1-1 hereto, with such legends
as may be applicable thereto as set forth in the Base Indenture, and will be
sold only in the United States (1) initially to institutional accredited
investors within the meaning of Regulation D under the Securities Act in
reliance on an exemption from the registration requirements of the Securities
Act and (2) thereafter to qualified institutional buyers within the meaning of,
and in reliance on, Rule 144A under the Securities Act and shall be deposited on
behalf of the purchasers of the Series 1998-1 Notes represented thereby, with a
custodian for DTC, and registered in the name of Cede as DTC's nominee, duly
executed by AFC-II and authenticated by the Trustee in the manner set forth in
Section 2.4 of the Base Indenture.

            Section 5.2 Temporary Global Series 1998-1 Notes; Permanent Global
Series 1998-1 Notes. The Series 1998-1 Notes to be issued outside the United
States will be issued and sold in transactions outside the United States in
reliance on Regulation S under the Securities Act, as provided in the applicable
note purchase agreement, and shall initially be issued in the form of one or
more temporary notes in registered form without interest coupons (each, a
"Temporary Global Series 1998-1 Note", substantially in the form set forth in
Exhibit A-2, which shall be deposited on behalf of the purchasers of the Series
1998-1 Notes represented thereby with a custodian for, and registered in the
name of a nominee of DTC, for the accounts of Morgan Guaranty Trust Company of
New York, Brussels office, as operator of Euroclear and for Cedel, duly executed
by AFC-II and authenticated by the Trustee in the manner set forth in Section
2.4 of the Base Indenture. Interests in a Temporary Global Series 1998-1 Note
will be exchangeable, in whole or in part, for interests in one or more
permanent global notes in registered form without interest coupons (each, a
"Permanent Global Series 1998-1 Note", substantially in the form of Exhibit A-3
hereto, in accordance with the provisions of such Temporary Global Series 1998-1
Note and the 
<PAGE>

Base Indenture (as modified by this Supplement). Interests in a Permanent Global
Series 1998-1 Note will be exchangeable for a definitive Series 1998-1 Note, in
accordance with the provisions of such Permanent Global Series 1998-1 Note and
the Base Indenture (as modified by this Supplement).

                               ARTICLE VI

                                GENERAL

            Section 6.1 Optional Repurchase. The Series 1998-1 Notes shall be
subject to repurchase by AFC-II at its option in accordance with Section 6.3 of
the Base Indenture on any Distribution Date after the Series 1998-1 Invested
Amount is reduced to an amount less than or equal to 10% of the Series 1998-1
Initial Invested Amount (the "Series 1998-1 Repurchase Amount"); provided,
however, that as a condition precedent to any such optional repurchase, on or
prior to the Distribution Date on which any Series 1998-1 Note is repurchased by
AFC-II pursuant to this Section 6.1, AFC-II shall have paid the Surety Bond
Provider all Surety Provider Fees and all other Surety Provider Reimbursement
Amounts due and unpaid as of such Distribution Date. The repurchase price for
any Series 1998-1 Note shall equal the aggregate outstanding principal balance
of such Series 1998-1 Note (determined after giving effect to any payments of
principal and interest on such Distribution Date), plus accrued and unpaid
interest on such outstanding principal balance.

            Section 6.2 Information. The Trustee shall provide to the Series
1998-1 Noteholders, or their designated agent, and the Surety Provider copies of
all information furnished to the Trustee or AFC-II pursuant to the Related
Documents, as such information relates to the Series 1998-1 Notes or the Series
1998-1 Collateral.

            Section 6.3 Exhibits. The following exhibits attached hereto
supplement the exhibits included in the Indenture.

Exhibit A-1:      Form of Restricted Global Series 1998-1 Note
Exhibit A-2:      Form of Temporary Global Series 1998-1 Note
Exhibit A-3:      Form of Permanent Global Series 1998-1 Note
Exhibit B:        Form of Consent

            Section 6.4 Ratification of Base Indenture. As supplemented by this
Supplement, the Base Indenture is in all respects ratified and confirmed and 
<PAGE>

the Base Indenture as so supplemented by this Supplement shall be read, taken,
and construed as one and the same instrument.

            Section 6.5 Counterparts. This Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.

            Section 6.6 Governing Law. This Supplement shall be construed in
accordance with the law of the State of New York (without giving effect to the
provisions thereof regarding conflicts of laws), and the obligations, rights and
remedies of the parties hereto shall be determined in accordance with such law.

            Section 6.7 Amendments. This Supplement may be modified or amended
from time to time in accordance with the terms of the Base Indenture; provided,
however, that if, pursuant to the terms of the Base Indenture or this
Supplement, the consent of the Required Noteholders is required for an amendment
or modification of this Supplement, such requirement shall be satisfied if such
amendment or modification is consented to by Noteholders representing more than
50% of the aggregate outstanding principal amount of the Series 1998-1 Notes
affected thereby.

            Section 6.8 Discharge of Indenture. Notwithstanding anything to the
contrary contained in the Base Indenture, no discharge of the Indenture pursuant
to Section 11.1(b) of the Base Indenture will be effective as to the Series
1998-1 Notes without the consent of the Required Noteholders.

            Section 6.9 Notice to Surety Provider and Rating Agencies. The
Trustee shall provide to the Surety Provider and each Rating Agency a copy of
each notice, opinion of counsel, certificate or other item delivered to, or
required to be provided by, the Trustee pursuant to this Supplement or any other
Related Document. Each such opinion of counsel shall be addressed to the Surety
Provider, shall be from counsel reasonably acceptable to the Surety Provider and
shall be in form and substance reasonably acceptable to the Surety Provider. All
such notices, opinions, certificates or other items delivered to the Surety
Provider shall be forwarded to Capital Markets Assurance Corporation, 885 Third
Avenue, New York, New York 10022, Attention: Chief Financial Officer and Chief
Underwriting Officer, telecopy: (212) 755-5487; confirmation: (212) 
755-1155.
<PAGE>

            Section 6.10 Certain Rights of Surety Provider. The Surety Provider
shall be deemed to be an Enhancement Provider entitled to receive confirmation
of the rating on the Series 1998-1 Notes (without regard to the Surety Bond)
pursuant to the definition of "Rating Agency Confirmation Condition." In
addition, the Surety Provider shall be deemed to be an Enhancement Provider
entitled to exercise the consent rights described in clause (ii) of the
definition of "Rating Agency Consent Condition."

            Section 6.11 Surety Provider Deemed Noteholder and Secured Party.
Except for any period during which a Surety Default is continuing, the Surety
Provider shall be deemed to be the holder of 100% of the Series 1998-1 Notes for
the purposes of giving any consents, waivers, approvals, instructions,
directions, requests, declarations and/or notices pursuant to the Base Indenture
and this Supplement. Any reference in the Base Indenture or the Related
Documents (including, without limitation, in Sections 2.3, 8.14, 9.1, 9.2 or
12.1 of the Base Indenture) to materially, adversely, or detrimentally affecting
the rights or interests of the Noteholders, or words of similar meaning, shall
be deemed, for purposes of the Series 1998-1 Notes, to refer to the rights or
interests of the Surety Provider. Furthermore, the Surety Provider shall be
deemed to be a "Secured Party" under the Base Indenture and the Related
Documents to the extent of amounts payable to the Surety Provider pursuant to
this Supplement. Moreover, wherever in the Related Documents money or other
property is assigned, conveyed, granted or held for, a filing is made for,
action is taken for or agreed to be taken for, or a representation or warranty
is made for the benefit of the Noteholders, the Surety Provider shall be deemed
to be the Noteholder with respect to 100% of the Series 1998-1 Notes for such
purposes.

            Section 6.12 Capitalization of AFC-II. AFC-II agrees that on the
Series 1998-1 Closing Date it will have capitalization in an amount equal to or
greater than 3% of the sum of (x) the Series 1998-1 Initial Invested Amount and
(y) the invested amount of the Series 1997-1 Notes.

            Section 6.13 Series 1998-1 Required Non-Program Enhancement
Percentage. AFC-II agrees that it will not make any Loan under any Loan
Agreement to finance the acquisition of any Vehicle by AESOP Leasing, AESOP
Leasing II or ARAC, as the case may be, if, after giving effect to the making of
such Loan, the acquisition of such Vehicle and the inclusion of such Vehicle
under the relevant Lease, the Series 1998-1 Required Non-Program Enhancement
Percentage would exceed 25.0%.
<PAGE>

            Section 6.14 Third Party Beneficiary. The Surety Provider is an
express third party beneficiary of (i) the Base Indenture to the extent of
provisions relating to any Enhancement Provider and (ii) this Supplement.

            Section 6.15 Prior Notice by Trustee to Surety Provider. Subject to
Section 10.1 of the Base Indenture, the Trustee agrees that, so long as no
Amortization Event shall have occurred and be continuing with respect to any
Series of Notes other than the Series 1998-1 Notes, it shall not exercise any
rights or remedies available to it as a result of the occurrence of an
Amortization Event with respect to the Series 1998-1 Notes (except those set
forth in clauses (f) and (g) of Article III of this Supplement) until after the
Trustee has given prior written notice thereof to the Surety Provider and
obtained the direction of the Required Noteholders with respect to the Series
1998-1 Notes. The Trustee agrees to notify the Surety Provider promptly
following any exercise of rights or remedies available to it as a result of the
occurrence of any Amortization Event or a Series 1998-1 Limited Liquidation
Event of Default.
<PAGE>

            IN WITNESS WHEREOF, AFC-II and the Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.

                             AESOP FUNDING II L.L.C.

                              By:
                                  ----------------------------------
                                  Name:
                                  Title:


                              HARRIS TRUST AND SAVINGS BANK
                                as Trustee

                              By:
                                  ----------------------------------
                                  Name:
                                  Title:


                              HARRIS TRUST AND SAVINGS BANK
                                as Series 1998-1 Agent

                              By: 
                                  ----------------------------------
                                  Name:
                                  Title: