Document:

guaranteeandcollateral.htm

 

Exhibit 10.2

 

 

AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT

 

made by

 

AVIS BUDGET HOLDINGS, LLC,

 

AVIS BUDGET CAR RENTAL, LLC

 

and certain of its Subsidiaries

 

in favor of

 

JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent

 

Dated as of May 3, 2011

 

 

  

  

  

TABLE OF CONTENTS

 

	  	  	
Page

	  
	  	
 

SECTION 1.                      DEFINED TERMS

 

	
2

	  
	  	
1.1           Definitions

	
2

	  
	  	
1.2           Other Definitional Provisions

	
5

	  
	  	
 

SECTION 2.                      BORROWER GUARANTEE

 

	
6

	  
	  	
2.1           Borrower Guarantee

	
6

	  
	  	
2.2           No Subrogation

	
6

	  
	  	
2.3           Amendments, etc. with respect to the Subsidiary Borrower Obligations

	
7

	  
	  	
2.4           Guarantee Absolute and Unconditional

	
7

	  
	  	
2.5           Reinstatement

	
8

	  
	  	
2.6           Payments

	
8

	  
	  	
 

SECTION 3.                      HOLDINGS AND SUBSIDIARY GUARANTEE

 

	
8

	  
	  	
3.1           Holdings and Subsidiary Guarantee

	
8

	  
	  	
3.2           Right of Contribution

	
9

	  
	  	
3.3           No Subrogation

	
9

	  
	  	
3.4           Amendments, etc. with respect to the Borrower Obligations and Subsidiary Borrower Obligations

	
9

	  
	  	
 

3.5           Guarantees Absolute and Unconditional

	
10

	  
	  	
3.6           Reinstatement

	
10

	  
	  	
3.7           Payments

	
11

	  
	  	
 

SECTION 4.                      GRANT OF SECURITY INTEREST

 

	
11

	  
	  	
 

SECTION 5.                      REPRESENTATIONS AND WARRANTIES

 

	
12

	  
	  	
5.1           Title; No Other Liens

	
12

	  
	  	
5.2           Perfected Liens

	
13

	  
	  	
5.3           Jurisdiction of Organization; Chief Executive Office

	
13

	  
	  	
5.4           Investment Property

	
13

	  
	  	
5.5           Intellectual Property

	
13

	  
	  	
5.6           Receivables

	
14

	  
	  	
5.7           Vehicles

	
14

	  
	  	
 

SECTION 6.                      COVENANTS

 

	
14

	  
	  	
6.1           Delivery of Instruments, Certificated Securities and Chattel Paper

	
14

	  
	  	
6.2           Payment of Obligations

	
14

	  
	  	
6.3           Maintenance of Perfected Security Interest; Further Documentation

	
15

	  
	  	
6.4           Changes in Name, etc

	
15

	  
	  	
6.5           Notices

	
15

	  
	  	
6.6           Investment Property

	
15

	  
	  	
6.7           Receivables

	
16

	  
	  	
6.8           Intellectual Property

	
17

	  
	  	
 

SECTION 7.                      REMEDIAL PROVISIONS

 

	
18

	  
	  	
7.1           Certain Matters Relating to Receivables

	
18

	  
	  	
7.2           Communications with Obligors; Grantors Remain Liable

	
19

	  
	  	
7.3           Pledged Stock

	
19

	  

 

 

  

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7.4           Proceeds to be Turned Over To Administrative Agent

	
20

	  
	  	
7.5           Application of Proceeds

	
20

	  
	  	
7.6           Code and Other Remedies

	
21

	  
	  	
7.7           Registration Rights

	
21

	  
	  	
7.8           Deficiency

	
22

	  
	  	
7.9           Grant of Intellectual Property License

	
22

	  
	  	
 

SECTION 8.                      THE ADMINISTRATIVE AGENT

 

	
22

	  
	  	
8.1           Administrative Agent’s Appointment as Attorney-in-Fact, etc

	
22

	  
	  	
8.2           Duty of Administrative Agent

	
24

	  
	  	
8.3           Execution of Financing Statements

	
24

	  
	  	
8.4           Authority of Administrative Agent

	
24

	  
	  	  	  	  
	  	
 

SECTION 9.                      MISCELLANEOUS

 

	
25

	  
	  	
9.1           Amendments in Writing

	
25

	  
	  	
9.2           Notices

	
25

	  
	  	
9.3           No Waiver by Course of Conduct; Cumulative Remedies

	
25

	  
	  	
9.4           Enforcement Expenses; Indemnification

	
25

	  
	  	
9.5           Successors and Assigns

	
26

	  
	  	
9.6           Set-Off

	
26

	  
	  	
9.7           Counterparts

	
26

	  
	  	
9.8           Severability

	
26

	  
	  	
9.9           Section Headings

	
26

	  
	  	
9.10           Integration

	
26

	  
	  	
9.11           GOVERNING LAW

	
26

	  
	  	
9.12           Submission To Jurisdiction; Waivers

	
27

	  
	  	
9.13           Acknowledgements

	
27

	  
	  	
9.14           Additional Grantors

	
27

	  
	  	
9.15           Releases

	
27

	  
	  	
9.16           WAIVER OF JURY TRIAL

	
28

	  
	  	
9.17           Continuation of Security Interests

	
28

	  

 

 

	
SCHEDULES

 

	
Schedule 1                      Notice Addresses

	
Schedule 2                      Pledged Stock and Pledged Notes

	
Schedule 3                      Domestic Perfection Matters

	
Schedule 4                      [Reserved]

	
Schedule 5                      Jurisdictions of Organization and Chief Executive Offices

	
Schedule 6                      Intellectual Property

	
Schedule 7                      Specified Vehicles

 

	
Annex I                                Form of Assumption Agreement

 

  

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AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT

 

AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 3, 2011 (the “Effective Date”), made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the “Grantors”), in favor of JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions or entities (the “Lenders”) from time to time parties to the Amended and Restated Credit Agreement, dated as of May 3, 2011 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among AVIS BUDGET HOLDINGS, LLC, a Delaware limited liability company (“Holdings”), AVIS BUDGET CAR RENTAL, LLC, a Delaware limited liability company (the “Borrower”), the Subsidiary Borrowers (as defined in the Credit Agreement) from time to time parties hereto, the several banks and other financial institutions or entities from time to time parties hereto (the “Lenders”), DEUTSCHE BANK SECURITIES INC., as Syndication Agent, CITICORP USA, INC., BANK OF AMERICA, N.A., CREDIT AGRICOLE CORPORATE & INVESTMENT BANK, BARCLAYS BANK PLC and THE ROYAL BANK OF SCOTLAND PLC, as Co-Documentation Agents, and the Administrative Agent.

 

W I T N E S S E T H:

 

WHEREAS,  Holdings, the Borrower, the lenders party thereto and the Administrative Agent are parties to that certain credit agreement, dated as of April 19, 2006 (as heretofore amended, modified and supplemented and as in effect immediately prior to the date hereof, the “Existing Credit Agreement”);

 

WHEREAS, in connection with the first amendment dated as of December 23, 2008 to the Existing Credit Agreement, the Borrower and certain other Grantors entered into a Guarantee and Collateral Agreement dated as of December 23, 2008  (as heretofore amended, modified and supplemented and as in effect immediately prior to the date hereof , the “Existing Guarantee and Collateral Agreement”) in favor of the Administrative Agent for the benefit of the lenders party to the Existing Credit Agreement and certain other parties in order to guarantee and secure the extensions of credit made to the Borrower thereunder and certain other extensions of credit;

 

WHEREAS, concurrently with the execution and delivery of this Agreement, Holdings, the Borrower,  the lenders party thereto and the Administrative Agent are entering into the Credit Agreement in order to amend and restate the Existing Credit Agreement in its entirety;

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower and the Subsidiary Borrowers upon the terms and subject to the conditions set forth therein;

 

WHEREAS, the Borrower and each Subsidiary Borrower is a member of an affiliated group of companies that includes each other Grantor;

 

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Borrower and each Subsidiary Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses;

 

WHEREAS, the Borrower, each Subsidiary Borrower and the other Grantors will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement;

 

  

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WHEREAS, as a condition precedent to the effectiveness of the Credit Agreement, the parties hereto have agreed to amend and restate the Existing Guarantee and Collateral Agreement in its entirety as provided herein below;

 

NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and amend and restate the Existing Credit Agreement, and to continue to make their respective extensions of credit thereunder and certain other extensions of credit, each Grantor hereby agrees that the Existing Guarantee and Collateral Agreement is hereby amended and restated as of the Effective Date to read in its entirety as follows:

 

 

SECTION 1.                      DEFINED TERMS

 

1.1 Definitions.  (a)             Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms are used herein as defined in Article 9 of the New York UCC:  Account, Certificated Security, Chattel Paper, Deposit Account, Documents, Equipment, General Intangibles, Instruments, Inventory, Letter of Credit Rights and Supporting Obligations.

 

(b) The following terms shall have the following meanings:

 

“Agreement”:  this Amended and Restated Guarantee and Collateral Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

 

“Borrower Obligations”:  the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations and all other obligations and liabilities of the Borrower (including, without limitation, interest accruing at the then applicable rate provided in the Credit Agreement after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in the Credit Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to the Administrative Agent or any Lender (or, in the case of any Specified Swap Agreement and Specified Cash Management Agreements, any Affiliate of any Agent or Lender, in each case, at the time such agreement was entered into), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, this Agreement (including, without limitation, the Borrower Guarantor Obligations), the other Loan Documents, any Letter of Credit, any Specified Swap Agreement, any Specified Cash Management Agreement or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, interest, reimbursement obligations, swap coupon or termination payments, fees or indemnities or reasonable out-of-pocket costs or expenses (including, without limitation, all reasonable out-of-pocket fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements).

 

“Borrower Guarantor Obligations”:  without duplicating any Borrower Obligations, all obligations and liabilities of the Borrower described in Section 2 of this Agreement.

 

“Borrower Termination Event”:  as defined in Section 3.1(d).

 

“Collateralized”:  secured by cash collateral arrangements and/or backstop letters of credit entered into on terms and in amounts reasonably satisfactory to the Administrative Agent and the relevant Issuing Lender.

 

  

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“Collateral”:  as defined in Section 4.

 

“Collateral Account”:  any collateral account established by the Administrative Agent as provided in Section 7.1 or 7.4.

 

“Copyright Licenses”:  any written or oral agreement naming any Grantor as licensor or licensee (including, without limitation, those listed in Schedule 6), granting any right under any Copyright, including, without limitation, the grant of rights to manufacture, distribute, exploit and sell Copyrighted materials.

 

“Copyrights”:  (i) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations, applications and recordings thereof in the United States Copyright Office and any other copyright registry office (including, without limitation, those listed in Schedule 6), and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office, and (ii) the right to obtain all renewals thereof.

 

“Excluded Property”: as defined in Section 4.

 

“Foreign Subsidiary Stock”:  the Capital Stock of any Foreign Subsidiary.

 

“Grantor”:  as defined in the preamble hereto.

 

“Guarantor Obligations”:  with respect to any Guarantor, without duplicating any Subsidiary Borrower Obligations, all obligations and liabilities of such Guarantor which may arise under or in connection with this Agreement (including, without limitation, Section 3) or any other Loan Document, any Specified Swap Agreement or any Specified Cash Management Agreement to which such Guarantor is a party, in each case whether on account of guarantee obligations, repayment obligations, reimbursement obligations, fees, indemnities or reasonable out-of-pocket costs or expenses (including, without limitation, all reasonable, out-of-pocket fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by such Guarantor pursuant to the terms of this Agreement or any other Loan Document).

 

“Guarantors”:  the collective reference to each Grantor other than the Borrower.  For the avoidance of doubt, notwithstanding any other provision of this Agreement, the parties hereto expressly agree that no Excluded Subsidiary, Foreign Subsidiary or Securitization Entity shall be a Guarantor.

 

“Intellectual Property”:  the collective reference to all rights, priorities and privileges with respect to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, trade secrets, know-how, and other confidential or proprietary information, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

 

“Intercompany Note”: any promissory note evidencing loans or advances made by any Loan Party to Holdings or any of its Subsidiaries.

 

“Investment Property”: the collective reference to (i) all “investment property” as such term is defined in Section 9-102(a)(49) of the New York UCC (other than any Foreign Subsidiary Stock excluded from the definition of “Pledged Stock”) and (ii) whether or not constituting “investment property” as so defined, all Pledged Notes and all Pledged Stock.

 

  

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“Issuers”:  the collective reference to each issuer of any Pledged Stock.

 

“New York UCC”:  the Uniform Commercial Code as from time to time in effect in the State of New York.

 

“Obligations”:  (i) in the case of the Borrower, the Borrower Obligations and the Borrower Guarantor Obligations, (ii) in the case of each Guarantor which is also a Subsidiary Borrower, its Subsidiary Borrower Obligations, and (iii) in the case of each Guarantor (whether or not a Subsidiary Borrower), its Guarantor Obligations.

 

“Patents”:  (i) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof and all goodwill associated therewith, including, without limitation, any of the foregoing referred to in Schedule 6, (ii) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including, without limitation, any of the foregoing referred to in Schedule 6, and (iii) all rights to obtain any reissues or extensions of the foregoing.

 

“Patent License”:  all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in part by a Patent, including, without limitation, any of the foregoing listed on Schedule 6.

 

“Pledged Notes”: all promissory notes listed on Schedule 2, all Intercompany Notes at any time issued to or held by any Grantor and all other promissory notes issued to or held by any Grantor.

 

“Pledged Stock”:  the shares of Capital Stock listed on Schedule 2, together with any other shares, stock certificates, options, interests or rights of any nature whatsoever in respect of the Capital Stock of any Subsidiary of any Grantor (other than any Excluded Subsidiary or any Securitization Entity) that may be issued or granted to, or held by, any Grantor while this Agreement is in effect; provided that in no event shall Pledged Stock or Collateral include more than 65% of the total outstanding Foreign Subsidiary Stock of any Foreign Subsidiary or any Capital Stock of any Foreign Subsidiary that is not a first-tier Foreign Subsidiary.

 

“Proceeds”:  all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC and, in any event, shall include, without limitation, all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

 

“Receivable”: any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by any Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, such right if it constitutes an Account).

 

“Secured Parties”:  the collective reference to the Administrative Agent, the Lenders and in the case, of any Specified Swap Agreement and Specified Cash Management Agreements, any affiliate of any Agent or Lender, in each case, at the time such agreement was entered into, to which Borrower Obligations, Subsidiary Borrower Obligations or Guarantor Obligations, as applicable, are owed.

 

“Securities Account”:  as defined in Article 8 of the New York UCC.

 

“Securities Act”:  the Securities Act of 1933, as amended.

 

  

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“Specified Vehicles”:  the vehicles described on Schedule 7, provided that Specified Vehicles shall not include any such vehicles that are initially specified on Schedule 7 but are disposed from time to time by the applicable Grantor in accordance with the Credit Agreement.

 

“Subsidiary Borrower Obligations”:  with respect to each Subsidiary Borrower, without duplicating any Guarantor Obligations, the collective reference to the unpaid principal of and interest on the Loans and all other obligations and liabilities of such Subsidiary Borrower (including, without limitation, interest accruing at the then applicable rate provided in the Credit Agreement after the maturity of the Loans and interest accruing at the then applicable rate provided in the Credit Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Subsidiary Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to the Administrative Agent or any Lender (or, in the case of any Specified Swap Agreement and Specified Cash Management Agreements, any Affiliate of any Agent or Lender, in each case, at the time such agreement was entered into), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, this Agreement, the other Loan Documents, any Letter of Credit, any Specified Swap Agreement, any Specified Cash Management Agreement or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of  principal, interest, reimbursement obligations, swap coupon or termination payments, fees or indemnities or reasonable out-of-pocket costs or expenses (including, without limitation, all reasonable out-of-pocket fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by such Subsidiary Borrower pursuant to the terms of any of the foregoing agreements).

 

“Subsidiary Borrower Termination Event”:  as defined in Section 2.1(d).

 

“Subsidiary Guarantor”:  each Guarantor other than Holdings and the Borrower.

 

“Trademarks”:  (i) all trademarks, trade names, corporate names, company names, business names, domain names, fictitious business names, trade styles, service marks, logos and other indicators of the source of goods or services, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common-law rights therein, including, without limitation, any of the foregoing listed on Schedule 6, and (ii) the right to obtain all renewals thereof.

 

“Trademark License”:  any agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark, including, without limitation, any of the foregoing referred to in Schedule 6.

 

“Vehicles”: all cars, trucks, trailers and other vehicles covered by a certificate of title law of any state other than any car, truck, trailer or other vehicle securing indebtedness permitted under the Credit Agreement and, in any event including, without limitation, the Specified Vehicles and all tires and other appurtenances to any of the foregoing.

 

1.2 Other Definitional Provisions.  (a)  The words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified.

 

  

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(b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

(c) Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

 

 

SECTION 2.                      BORROWER GUARANTEE

 

2.1 Borrower Guarantee.  (a)  The Borrower hereby, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by each Subsidiary Borrower when due (whether at the stated maturity, by acceleration or otherwise) of its Subsidiary Borrower Obligations.

 

(b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of the Borrower hereunder and under the other Loan Documents in respect of its guarantee obligations shall in no event exceed the amount which can be guaranteed by the Borrower under applicable federal and state laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2).

 

(c) The guarantee contained in this Section 2 shall remain in full force and effect until all the Subsidiary Borrower Obligations (other than any unasserted contingent indemnification obligations and Obligations in respect of Specified Swap Agreements and Specified Cash Management Agreements) shall have been satisfied by payment in full, each Letter of Credit shall have terminated, expired or been Collateralized and the Commitments shall have been terminated (all of the foregoing conditions together, the “Subsidiary Borrower Termination Event”), notwithstanding that from time to time during the term of the Credit Agreement each Subsidiary Borrower may be free from any Subsidiary Borrower Obligations.

 

(d) No payment made by any Subsidiary Borrower, any of the other Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent or any Lender from any Subsidiary Borrower, any of the other Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Subsidiary Borrower Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of the Borrower hereunder which shall, notwithstanding any such payment (other than any payment made by the Borrower in respect of the Subsidiary Borrower Obligations or any payment received or collected from the Borrower in respect of the Subsidiary Borrower Obligations), remain liable for the Subsidiary Borrower Obligations up to the maximum liability of the Borrower hereunder until the occurrence of the Subsidiary Borrower Termination Event.

 

2.2 No Subrogation.  Notwithstanding any payment or payments made by the Borrower hereunder, or any set-off or application of funds of the Borrower by the Administrative Agent or any Lender, the Borrower shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against the Subsidiary Borrowers or against any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Subsidiary Borrower Obligations, nor shall the Borrower seek or be entitled to seek any contribution or reimbursement from the Subsidiary Borrowers in respect of payments made by the Borrower hereunder, until the Subsidiary Borrower Termination Event.  If any amount shall be paid to the Borrower on account of  such subrogation rights at any time before the Subsidiary Borrower Termination Event, such amount shall be held by the Borrower in trust for the Administrative Agent and the Lenders, segregated from other funds of the Borrower, and shall, forthwith upon receipt by the Borrower, be turned over to the Administrative Agent in the exact form received by the Borrower (duly indorsed by the Borrower to the 

 

  

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Administrative Agent, if required), to be applied against the Subsidiary Borrower Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.

 

2.3 Amendments, etc. with respect to the Subsidiary Borrower Obligations.  The Borrower shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Borrower and without notice to or further assent by the Borrower, any demand for payment of any of the Subsidiary Borrower Obligations made by the Administrative Agent or any Lender may be rescinded by the Administrative Agent or such Lender and any of the Subsidiary Borrower Obligations continued, and the Subsidiary Borrower Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Lender, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any Lender for the payment of the Subsidiary Borrower Obligations may be sold, exchanged, waived, surrendered or released.  Neither the Administrative Agent nor any Lender shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Subsidiary Borrower Obligations or for the guarantee contained in this Section 2 or any property subject thereto.

 

2.4 Guarantee Absolute and Unconditional.  The Borrower waives any and all notice of the creation, renewal, extension or accrual of any of the Subsidiary Borrower Obligations and notice of or proof of reliance by the Administrative Agent or any Lender upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Subsidiary Borrower Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and the Subsidiary Borrowers, on the one hand, and the Administrative Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2.  The Borrower waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or the applicable Subsidiary Borrower with respect to the Subsidiary Borrower Obligations.  The Borrower understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment (to the extent permitted by applicable law) without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Subsidiary Borrower Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Subsidiary Borrower or any other Person against the Administrative Agent or any Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or any Subsidiary Borrower) which constitutes, or might be construed to constitute, an equitable or legal discharge of  the Subsidiary Borrowers for the Subsidiary Borrower Obligations, or of the Borrower under the guarantee contained in this Section 2, in bankruptcy or in any other instance.  When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against the Borrower, the Administrative Agent or any Lender may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Subsidiary Borrowers or any other Person or against any collateral security or guarantee for the Subsidiary Borrower Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent or any Lender to make any such demand, to pursue such other rights or remedies or to collect any payments from the 

 

  

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Borrower, any Subsidiary Borrower, or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any Subsidiary Borrower or any other Person or any such collateral security, guarantee or right of offset, shall not relieve the Borrower of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any Lender against the Borrower.  For the purposes hereof, “demand” shall include the commencement and continuance of any legal proceedings.

 

2.5 Reinstatement.  The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Subsidiary Borrower Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower, any Subsidiary Borrower or any other Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower, any Subsidiary Borrower or any other Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

2.6 Payments.  The Borrower hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the Funding Office.

 

 

SECTION 3.                      HOLDINGS AND SUBSIDIARY GUARANTEE

 

3.1 Holdings and Subsidiary Guarantee.  (a)  Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower and the Subsidiary Borrowers when due (whether at the stated maturity, by acceleration or otherwise) of the Borrower Obligations and the Subsidiary Borrower Obligations.

 

(b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor (other than Holdings) hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 3.2).

 

(c) Each Guarantor agrees that the Borrower Obligations and the Subsidiary Borrower Obligations, either solely or collectively, may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 3 or affecting the rights and remedies of the Administrative Agent or any Lender hereunder.

 

(d) The guarantee contained in this Section 3 shall remain in full force and effect until all the Borrower Obligations (other than any unasserted contingent indemnification obligations and Obligations in respect of Specified Swap Agreements and Specified Cash Management Agreements) and Subsidiary Borrower Obligations (other than any unasserted contingent indemnification obligations and Obligations in respect of Specified Swap Agreements and Specified Cash Management Agreements) shall have been satisfied by payment in full, each Letter of Credit shall have terminated, expired or been Collateralized, and the Commitments shall have been terminated (all of the foregoing conditions together, the “Borrower Termination Event”), notwithstanding that from time to time during the term of the Credit Agreement the Borrower may be free from any Borrower Obligations and Subsidiary Borrower Obligations.

 

(e) No payment made by the Borrower, any of the Subsidiary Borrowers, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent or any Lender from the Borrower, any of the Subsidiary Borrowers, any of the Guarantors, any other 

 

  

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guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Borrower Obligations or the Subsidiary Borrower Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Borrower Obligations or the Subsidiary Borrower Obligations or any payment received or collected from such Guarantor in respect of the Borrower Obligations or the Subsidiary Borrower Obligations), remain liable for the Borrower Obligations and the Subsidiary Borrower Obligations up to the maximum liability of such Guarantor hereunder until the occurrence of the Borrower Termination Event.

 

3.2 Right of Contribution.  Each Subsidiary Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and against any other Subsidiary Guarantor hereunder which has not paid its proportionate share of such payment.  Each Subsidiary Guarantor’s right of contribution shall be subject to the terms and conditions of Section 3.3.  The provisions of this Section 3.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Administrative Agent and the Lenders, and each Guarantor shall remain liable to the Administrative Agent and the Lenders for the full amount guaranteed by such Guarantor hereunder.

 

3.3 No Subrogation.  Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Administrative Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against the Borrower, any Subsidiary Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Borrower Obligations or the Subsidiary Borrower Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower, any Subsidiary Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, until the occurrence of the Borrower Termination Event.  If any amount shall be paid to any Guarantor on account of such subrogation rights at any time before the occurrence of the Borrower Termination Event, such amount shall be held by such Guarantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Borrower Obligations and the Subsidiary Borrower Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.

 

3.4 Amendments, etc. with respect to the Borrower Obligations and Subsidiary Borrower Obligations.  Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Borrower Obligations or Subsidiary Borrower Obligations made by the Administrative Agent or any Lender may be rescinded by the Administrative Agent or such Lender and any of the Borrower Obligations and the Subsidiary Borrower Obligations continued, and the Borrower Obligations and the Subsidiary Borrower Obligations or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Lender, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any Lender for the payment of the Borrower Obligations or the Subsidiary Borrower Obligations may be sold, exchanged, waived, surrendered or released.  Neither the 

 

  

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Administrative Agent nor any Lender shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Borrower Obligations or the Subsidiary Borrower Obligations or for the guarantee contained in this Section 3 or any property subject thereto.

 

3.5 Guarantees Absolute and Unconditional.  Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Borrower Obligations and Subsidiary Borrower Obligations and notice of or proof of reliance by the Administrative Agent or any Lender upon the guarantee contained in this Section 3 or acceptance of the guarantee contained in this Section 3; the Borrower Obligations and Subsidiary Borrower Obligations shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 3; and all dealings between the Borrower, the Subsidiary Borrowers and any of the Guarantors, on the one hand, and the Administrative Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 3.  Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower, the Subsidiary Borrowers or any of the Guarantors with respect to the Borrower Obligations and the Subsidiary Borrower Obligations.  Each Guarantor understands and agrees that the guarantee contained in this Section 3 shall be construed as a continuing, absolute and unconditional guarantee of payment (to the extent permitted by applicable law) without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Borrower Obligations or the Subsidiary Borrower Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower, any Subsidiary Borrower or any other Person against the Administrative Agent or any Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower, any Subsidiary Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Borrower Obligations, of any Subsidiary Borrower for the Subsidiary Borrower Obligations or of such Guarantor under the guarantee contained in this Section 3, in bankruptcy or in any other instance.  When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Administrative Agent or any Lender may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any Subsidiary Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Borrower Obligations or the Subsidiary Borrower Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent or any Lender to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any Subsidiary Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any Subsidiary Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any Lender against any Guarantor.  For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

 

3.6 Reinstatement.  The guarantee contained in this Section 3 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Borrower Obligations or the Subsidiary Borrower Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower, any Subsidiary Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower, any Subsidiary Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

  

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3.7 Payments.  Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the Funding Office.

 

 

SECTION 4.                      GRANT OF SECURITY INTEREST

 

Each Grantor hereby assigns and transfers to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Secured Parties, a security interest in, all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest, in each case, excluding any Excluded Property (such property excluding any and all Excluded Property being collectively referred to as, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of such Grantor’s Obligations:

 

(a) all Accounts;

 

(b) all Chattel Paper;

 

(c) all Equipment;

 

(d) all Fixtures;

 

(e) all General Intangibles;

 

(f) all Instruments;

 

(g) all Documents;

 

(h) all Intellectual Property;

 

(i) all Inventory;

 

(j) all Investment Property;

 

(k) all Letter-of-Credit Rights;

 

(l) all Pledged Notes;

 

(m) all Pledged Stock;

 

(n) all Receivables;

 

(o) all Vehicles and title documents with respect to Vehicles;

 

(p) all other property not otherwise described above (except for any property specifically excluded from any clause in this section, and any property specifically excluded from any defined term used in any clause of this section);

 

(q) all books and records pertaining to the Collateral; and

 

  

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(r) to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

 

provided, however, that notwithstanding any of the other provisions set forth in this Section 4, this Agreement shall not constitute a grant of and the Collateral shall not include a security interest in any of the following (collectively, the “Excluded Property”): (a) any property to the extent that such grant of a security interest is prohibited by any Requirements of Law of a Governmental Authority, requires a consent not obtained of any Governmental Authority pursuant to such Requirement of Law or is prohibited by, or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property or, in the case of any Investment Property, Pledged Stock or Pledged Note, any applicable shareholder or similar agreement, except to the extent that such Requirement of Law or the term in such contract, license, agreement, instrument or other document or shareholder or similar agreement providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable law, (b) any trademark applications filed in the United States Patent and Trademark Office on the basis of such Grantor's “intent-to-use” such trademark, unless and until acceptable evidence of use of the Trademark has been filed with the United States Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), to the extent that granting a Lien in such Trademark application prior to such filing would adversely affect the enforceability or validity of such Trademark application; provided, that upon the filing of acceptable evidence of use of the Trademark with the United States Patent and Trademark Office such application shall be automatically subject to the security interest granted herein and deemed to be included in the Collateral, (c) Receivables classified as receivables that are “assets under vehicle programs” in the financial statements of the Borrower and (d) any interests in Vehicles leased by a Grantor pursuant to the AESOP Financing Program, all certificates of title with respect to such Vehicles, any other rights and agreements associated with such Vehicles, including, but not limited to, subleases, manufacturer programs and insurance policies with respect to such Vehicles, and any Proceeds of any of the foregoing; provided, further, that in no event shall General Intangibles include more than 65% of the total outstanding Foreign Subsidiary Stock of any Foreign Subsidiary.

 

 

SECTION 5.                      REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower and each Subsidiary Borrower thereunder, each Grantor hereby represents and warrants to the Administrative Agent and each Lender that:

 

5.1 Title; No Other Liens.  Except for the security interest granted to the Administrative Agent for the ratable benefit of the Secured Parties pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreement, such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others.  No effective financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except such as have been filed in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, pursuant to this Agreement or as are permitted by the Credit Agreement.  For the avoidance of doubt, it is understood and agreed that any Grantor may, as part of its business, grant licenses to third parties to use Intellectual Property owned by or licensed to a Grantor.  For purposes of this Agreement and the other Loan Documents, such licensing activity shall not constitute a “Lien” on or “Disposition” of such Intellectual Property.  Each of the Administrative Agent and each Lender understands that any such licenses may be exclusive to the applicable licensees, and such exclusivity 

 

  

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provisions may limit the ability of the Administrative Agent to utilize, sell, lease or transfer the related Intellectual Property or otherwise realize value from such Intellectual Property pursuant hereto.

 

5.2 Perfected Liens.  The security interests granted pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 3 (which, in the case of all filings and other documents referred to on said Schedule, have been delivered to the Administrative Agent in completed and duly executed form) and will, to the extent perfection may be achieved by such filings and actions, constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, as collateral security for such Grantor’s Obligations under the laws of the United States, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for (i) unrecorded Liens permitted by the Credit Agreement which have priority over the Liens on the Collateral by operation of law and (ii) in the case of Collateral other than Pledged Stock, Permitted Liens; provided, however, that additional filings in the United States Patent and Trademark Office and United States Copyright Office may be necessary with respect to the perfection of the Administrative Agent’s Lien in United States registrations and applications for Trademarks, Patents and Copyrights which are filed by, issued to, exclusively licensed to or acquired by any Grantor after the date hereof and, provided, further, no Grantor shall be required to perfect the security interests granted pursuant to this Agreement (i) by means of delivery of  agreement granting “control” (as defined in Article 8 of the New York UCC) over any Deposit Account or Securities Account (other than with respect to any Collateral Account), (ii) in any Vehicles (other than maintaining any perfection of the security interests granted in the Specified Vehicles owned by the Grantors existing on the date hereof) or (iii) in any Intellectual Property under the laws of a jurisdiction outside the United States.

 

5.3 Jurisdiction of Organization; Chief Executive Office.  On the date hereof, such Grantor’s jurisdiction of organization and the location of such Grantor’s chief executive office or sole place of business or principal residence, as the case may be, are specified on Schedule 5.  Such Grantor has furnished to the Administrative Agent a certified charter, certificate of incorporation or other organizational document and long-form good standing certificate as of a date which is recent to the date hereof.

 

5.4 Investment Property.  (a)  The shares of the Pledged Stock pledged by such Grantor hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by such Grantor or, in the case of Foreign Subsidiary Stock, if less, 65% of the outstanding Foreign Subsidiary Stock of each relevant Issuer or, if less, such amount as has been previously agreed with the Administrative Agent.

 

(b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable.

 

(c) Such Grantor is the record and beneficial owner of, and has good and marketable title to, the Investment Property pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and any statutory Liens permitted under Section 7.3 of the Credit Agreement.

 

5.5 Intellectual Property.  (a)  Schedule 6 lists all registrations and applications recorded in the United States Patent and Trademark Office or the United States Copyright Office included in Intellectual Property owned by such Grantor in its own name on the date hereof and all licenses under which such Grantor holds or has the right to an exclusive license in registered Intellectual Property on the date hereof, including the registration or application number for such licensed Intellectual Property.  With 

 

  

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respect to any unpublished patent applications (whether disclosed on Schedule 6 or hereafter disclosed by such Grantor), such Grantor will disclose on Schedule 6 and in any subsequent report or disclosure, the application number for such patent application but not the title or subject matter.  In the event that the Administrative Agent or any agent thereof discovers the title or subject matter of any such patent application prior to its publication, through any filing receipt or otherwise, the Administrative Agent will not knowingly disclose or use such information for any purpose.

 

(b) On the date hereof, all material Intellectual Property owned by such Grantor is, to its knowledge, valid, subsisting, unexpired and enforceable, has not been abandoned and, to its knowledge, does not infringe upon the Intellectual Property rights of any other Person in any material respect except for the alleged infringements and enforcement activity as disclosed on Schedule 6.

 

(c) Except as set forth in Schedule 6, on the date hereof, no Grantor has granted an exclusive license in the territory of the United Stated in or to (i) any of the following Trademarks: AVIS, BUDGET, and WE TRY HARDER or (ii) any Patents that cover the Wizard System.  

 

(d) No holding, decision or judgment has been rendered by any Governmental Authority against such Grantor which would limit, cancel or question the validity of, or such Grantor’s rights in, any Intellectual Property owned by such Grantor in any respect that could reasonably be expected to have a Material Adverse Effect.

 

(e) Except for the alleged infringements and enforcement activity disclosed on Schedule 6, to such Grantor’s knowledge, no action or proceeding is pending or threatened on the date hereof seeking to limit, cancel or assert the invalidity of any Intellectual Property owned by such Grantor or such Grantor’s ownership interest therein, which, if adversely determined, would have a material adverse effect on the value of any material Intellectual Property owned by such Grantor.

 

5.6 Receivables.  No amount payable to such Grantor under or in connection with any Receivable included in the Collateral for $500,000 or more is evidenced by any Instrument or Chattel Paper which has not been delivered to the Administrative Agent.

 

5.7 Vehicles.  Schedule 7 is a complete and correct list of all Specified Vehicles owned by such Grantor as of March 31, 2011.

 

 

SECTION 6.                      COVENANTS

 

Each Grantor covenants and agrees with the Administrative Agent and the Lenders that, from and after the date of this Agreement until the Obligations (other than any unasserted contingent indemnification obligations and Obligations in respect of Specified Swap Agreements and Specified Cash Management Agreements) shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated:

 

6.1 Delivery of Instruments, Certificated Securities and Chattel Paper. If any amount in excess of $500,000 payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument, Certificated Security or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall be promptly delivered to the Administrative Agent, duly indorsed (including by delivery of related instruments of transfer or assignment) in a manner reasonably satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement. .

 

6.2 Payment of Obligations.  Such Grantor (other than Holdings and the Borrower) will pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, 

 

  

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all obligations and liabilities in respect of taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of such Grantor or except to the extent that such failure to do so could not reasonably be expected to result in a Material Adverse Effect.

 

6.3 Maintenance of Perfected Security Interest; Further Documentation.  (a)  Such Grantor shall not take any action or fail to take any action which would result in the security interest created by this Agreement as a perfected security interest having a priority which is less than that described and required in Section 5.2 and shall make commercially reasonable efforts to defend such security interest against the claims and demands of all Persons whomsoever, subject to the rights of such Grantor under the Loan Documents to dispose of the Collateral.

 

(b) Such Grantor shall furnish to the Administrative Agent and the Lenders from time to time statements and schedules further identifying and describing the assets and property of such Grantor in connection therewith as the Administrative Agent may reasonably request, all in reasonable detail.

 

(c) At any time and from time to time, subject to Section 5.2 and any limitations set forth in this Agreement, upon the written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, (i) filing any financing or continuation statements under the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction in the United States with respect to the security interests created hereby and (ii) in the case of Investment Property, Letter of Credit Rights and any other relevant Collateral, taking any actions necessary to enable the Administrative Agent to obtain “control” (within the meaning of the applicable Uniform Commercial Code) with respect thereto.

 

6.4 Changes in Name, etc.  Such Grantor will not, except upon 15 days’ prior written notice to the Administrative Agent, (i) change its jurisdiction of organization from that referred to in Section 5.3 or (ii) change its name.  Such Grantor shall deliver to the Administrative Agent all additional executed financing statements and other documents reasonably requested by the Administrative Agent to maintain the validity, perfection and priority of the security interests provided for herein.

 

6.5 Notices.  Such Grantor will advise the Administrative Agent (and the Administrative Agent shall advise the Lenders) promptly, in reasonable detail, of:

 

(a)           any Lien (other than security interests created hereby or Liens permitted under the Credit Agreement) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and

 

(b)           of the occurrence of any other event which could reasonably be expected to have a material adverse effect on the aggregate value of the Collateral or on the security interests created hereby.

 

6.6 Investment Property.  (a)  If such Grantor shall become entitled to receive or shall receive any certificate (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the 

 

  

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Administrative Agent and the Lenders, hold the same in trust for the Administrative Agent and the Lenders and deliver the same forthwith to the Administrative Agent in the exact form received, duly indorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power covering such certificate duly executed in blank by such Grantor and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for such Grantor’s Obligations.  If an Event of Default shall have occurred and be continuing, any sums paid upon or in respect of the Investment Property upon the liquidation or dissolution of any Issuer shall be paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the applicable Grantor’s Obligations, and in case any distribution of capital shall be made on or in respect of the Investment Property or any property shall be distributed upon or with respect to the Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be delivered to the Administrative Agent to be held by it hereunder as additional collateral security for such Obligations.  If any sums of money or property so paid or distributed in respect of the Investment Property shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of such Grantor, as additional collateral security for the Obligations.

 

(b) Without the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld), such Grantor will not (i) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreement), (ii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or statutory Liens permitted by the Credit Agreement or nonconsensual Permitted Liens or in the case of Investment Property other than Pledged Stock, Liens permitted by the Credit Agreement, or (iii) enter into any agreement or undertaking restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or transfer any of the Investment Property or Proceeds thereof, except as permitted by the Credit Agreement.

 

(c) The Administrative Agent will execute and deliver (or cause to be executed and delivered) to each Grantor all such proxies and other instruments as such Grantor may request for the purpose of enabling such Grantor to exercise the voting and other rights that it is entitled to exercise and to receive the dividends or interest payments that it is authorized to receive and retain in respect of any Pledged Stock under the Credit Agreement.

 

(d) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Investment Property issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 6.6(a) with respect to the Investment Property issued by it and (iii) the terms of Sections 7.3(c) and 7.7 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 7.3(c) or 7.7 with respect to the Investment Property issued by it.

 

6.7 Receivables.  Such Grantor will deliver to the Administrative Agent a copy of each material demand, notice or document received by it that questions or calls into doubt the validity or enforceability of more than 10% of the aggregate amount of the then outstanding Receivables included in the Collateral.

 

  

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6.8 Intellectual Property.  (a)  Such Grantor (either itself or through licensees) will (i) to the extent consistent with reasonable commercial judgment, continue to use each material Trademark owned by such Grantor on each and every trademark class of goods applicable to its current line as reflected in its current catalogs, brochures and price lists in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (ii) to the extent consistent with reasonable commercial judgment, maintain the quality of products and services offered under such Trademark at a level substantially consistent with the quality of products and services offered under such Trademark as of the date hereof, (iii) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law, and (iv) not (and not authorize any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark may become unenforceable or impaired in any way except to the extent consistent with reasonable commercial judgment.  Without limitation of other provisions of this Agreement, every Trademark adopted or acquired by a Grantor that is confusingly similar to or a colorable imitation of any Trademark owned by such Grantor will automatically be included in the Collateral for all purposes of this Agreement, and, if a Grantor applies to register or registers any such Trademark, the applicable Grantor shall notify the Administrative Agent pursuant to Section 6.8(f) in order for the Administrative Agent, for the ratable benefit of the Secured Parties, to obtain a perfected security interest in such Trademark pursuant to this Agreement.

 

(b) Such Grantor, to the extent consistent with reasonable commercial judgment, will not (and will not authorize its licensees to) do any act, or omit to do any act, whereby any material Patent is likely to become forfeited, abandoned or dedicated to the public.

 

(c) Such Grantor, to the extent consistent with reasonable commercial judgment, will not (and will not authorize any licensee or sublicensee thereof to) (i) do any act or knowingly omit to do any act whereby any material portion of the Copyrights will be materially impaired or (ii) do any act whereby any material portion of the Copyrights may fall into the public domain.

 

(d) Such Grantor will not (and will not authorize its licensees to) do any act that knowingly uses any Intellectual Property owned by such Grantor to infringe upon the Intellectual Property rights of any other Person in any material respect.

 

(e) Such Grantor will notify the Administrative Agent and the Lenders promptly if it knows, or has reason to know, that any application or registration relating to any material Intellectual Property is likely to become forfeited, abandoned or dedicated to the public, or of any material adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court or tribunal in any country) regarding such Grantor’s ownership of, or the validity of, any material Intellectual Property or such Grantor’s right to register the same or to own and maintain the same.

 

(f) Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall file an application for the registration of any Intellectual Property owned by such Grantor with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, or shall acquire or exclusively license any registered Intellectual Property from a third party,  such Grantor shall report such filing, acquisition or exclusive license to the Administrative Agent in accordance with Section 6 of the Credit Agreement, provided that all such disclosure is subject to the last sentence of Section 5.5 of this Agreement, and except that such report shall include all such application and recordation filings by such Grantor through the date five (5) Business Days prior to the date on which such report required by Section 6 of the Credit Agreement is sent to the Administrative Agent.  Upon request of the Administrative 

 

  

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Agent, such Grantor shall execute and deliver, and have recorded, any and all reasonably necessary agreements, instruments, documents, and papers, in a form to be mutually agreed upon by the Borrower and the Administrative Agent, as the Administrative Agent may request to evidence the Administrative Agent’s and the Lenders’ security interest (provided that such Grantor will not have an affirmative obligation to seek an application or registration for Intellectual Property which Borrower reasonably elects not to seek) in any (i) Copyright, Patent and Trademark; and (ii) any material, exclusive license grant to such Grantor with respect to any Trademark, Copyright or Patent (provided that (1) the Trademark, Copyright or Patent registration or application with respect to which such exclusive license is granted is identified in the applicable exclusive license agreement or is otherwise already known to such Grantor; and (2) such Grantor shall not be obligated to obtain the consent of any third party licensor that may be necessary to grant such security interest in such exclusive license), and the general intangibles of such Grantor relating thereto or represented thereby and, with respect to Trademarks, the goodwill of the business connected with the use of or symbolized by such Trademarks.

 

(g) To the extent consistent with reasonable commercial judgment, such Grantor will take all necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of the material Intellectual Property, including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability.

 

(h) In the event that any material Intellectual Property owned by such Grantor is infringed, misappropriated or diluted by a third party, or any licensee of such Intellectual Property breaches the terms and conditions of the applicable license, such Grantor shall (i) take such actions as such Grantor shall reasonably deem appropriate under the circumstances to protect such Intellectual Property and (ii) if such Intellectual Property is of material economic value, promptly notify the Administrative Agent after it learns thereof if such infringement, misappropriation, dilution or breach is material, and, if appropriate in such Grantor’s reasonable commercial judgment, sue for infringement, misappropriation, dilution or breach of contract, seek injunctive relief and recover any and all damages for such infringement, misappropriation, dilution or breach of contract.

 

 

SECTION 7.                      REMEDIAL PROVISIONS

 

7.1 Certain Matters Relating to Receivables.

 

(a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent’s intent to exercise its corresponding rights pursuant to this Section 7.1(a), each Grantor shall be permitted to collect such Grantor’s Receivables.  If required by the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables included in the Collateral, when collected by any Grantor, (i) shall be forthwith (and, in any event, within five Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Administrative Agent if required, in a Collateral Account maintained under the sole dominion and control of the Administrative Agent, subject to withdrawal by the Administrative Agent for the account of the Lenders only as provided in Section 7.5, and (ii) until so turned over, shall be held by such Grantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Grantor.  Each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

 

(b) After the occurrence and during the continuance of an Event of Default, at the Administrative Agent’s request, each Grantor shall deliver to the Administrative Agent all original and 

 

  

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other documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables included in the Collateral, including, without limitation, all original orders, invoices and shipping receipts.

 

7.2 Communications with Obligors; Grantors Remain Liable.  (a)  The Administrative Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default communicate with obligors under the Receivables included in the Collateral to verify with them to the Administrative Agent’s satisfaction the existence, amount and terms of any Receivables included in the Collateral.

 

(b) Upon the request of the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall notify obligors on the Receivables included in the Collateral that the Receivables included in the Collateral have been assigned to the Administrative Agent for the ratable benefit of the Secured Parties and that payments in respect thereof shall be made directly to the Administrative Agent.

 

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Receivables included in the Collateral to observe and perform all the material conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto.  Neither the Administrative Agent nor any Lender shall have any obligation or liability under any Receivable included in the Collateral (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Administrative Agent or any Lender of any payment relating thereto, nor shall the Administrative Agent or any Lender be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable included in the Collateral (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

 

7.3 Pledged Stock.  (a)  Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 7.3(b), each Grantor shall be permitted to receive all cash dividends paid in respect of the Pledged Stock and all payments made in respect of the Pledged Notes, in each case paid in the normal course of business of the relevant Issuer to the extent permitted by the Credit Agreement, to pay and declare dividends to the extent permitted by the Credit Agreement and to exercise all voting and corporate or other organizational rights with respect to the Investment Property; provided, however, that no vote shall be cast or corporate or other organizational right exercised or other action taken which, in the Administrative Agent’s reasonable judgment, would impair the Collateral or which would be inconsistent with or result in any violation of any provision of the Credit Agreement, this Agreement or any other Loan Document.

 

(b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Investment Property and make application thereof to the Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Investment Property shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Investment Property at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such 

 

  

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Investment Property as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other organizational structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver any and all of the Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

 

(c) Each Grantor hereby authorizes and instructs each Issuer of any Investment Property pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Investment Property directly to the Administrative Agent.

 

7.4 Proceeds to be Turned Over To Administrative Agent.  In addition to the rights of the Administrative Agent and the Lenders specified in Section 7.1 with respect to payments of Receivables included in the Collateral, if an Event of Default shall occur and be continuing, all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Administrative Agent, if required).  All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a Collateral Account maintained under its sole dominion and control.  All Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in Section 7.5.

 

7.5 Application of Proceeds.  At such intervals as may be agreed upon by the Borrower and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent’s election, the Administrative Agent may apply all or any part of Proceeds constituting Collateral, whether or not held in any Collateral Account, and any proceeds of the guarantees set forth in Section 2 or 3, as applicable, in payment of the Obligations in the following order (and, to the extent applicable, in a manner consistent with the Credit Agreement):

 

First, to pay incurred and unpaid fees and expenses of the Administrative Agent under the Loan Documents;

 

Second, to the Administrative Agent, for application by it towards payment of amounts then due and owing and remaining unpaid in respect of the Obligations, pro rata among the Secured Parties according to the amounts of the Obligations then due and owing and remaining unpaid to the Secured Parties;

 

Third, to the Administrative Agent, for application by it towards prepayment of the Obligations, pro rata among the Secured Parties according to the amounts of the Obligations then held by the Secured Parties; and

 

  

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Fourth, any balance remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding (other than those Letters of Credit that have been Collateralized) and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same.

 

7.6 Code and Other Remedies.  If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law.  Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived to the fullest extent permitted by applicable law), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, license, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Administrative Agent or any Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk.  The Administrative Agent or any Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released.  Each Grantor further agrees, at the Administrative Agent’s request, to assemble the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.  The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this Section 7.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the Lenders hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-615(a)(3) of the New York UCC, need the Administrative Agent account for the surplus, if any, to any Grantor.  To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent or any Lender arising out of the exercise by them of any rights hereunder.

 

7.7 Registration Rights.  (a)  If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Section 7.6, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold or registered under the provisions of the Securities Act, the relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the reasonable opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable best efforts to cause the registration statement relating thereto to become effective and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto.  Each Grantor agrees to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as 

 

 

  

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practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

 

(b) Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner.  The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.

 

(c) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 7.7 valid and binding and in compliance with any and all other applicable Requirements of Law.

 

7.8 Deficiency.  Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency.

 

7.9 Grant of Intellectual Property License.  If an Event of Default shall occur and be continuing, and for so long as such Event of Default in continuing, each Grantor hereby grants to the Administrative Agent an irrevocable, non-exclusive, fully paid-up, worldwide license or (for third party rights) sublicense, to use, license or sublicense any of the Intellectual Property now or hereafter owned, licensed in (to the fullest extent permitted by such license), held for use or acquired by such Grantor (and subject to the applicable terms and conditions governing such Grantor’s rights in and to such Intellectual Property at the time of the Event of Default), for the purpose of enabling the Administrative Agent to exercise rights and remedies under Section 7 hereof at such time as it shall be lawfully entitled to exercise such rights and remedies, and for no other purpose; subject to (i) the maintenance of quality control standards with respect to all goods and services sold under any licensed Trademarks substantially consistent with those in effect immediately prior to the Event of Default in order to maintain the validity and enforceability of such Trademarks and (ii) exclusive licenses granted by such Grantor prior to the Event of Default to the extent such licenses conflict at the time of the Event of Default with the granting of other licenses in and to the same Intellectual Property.  Such license or sublicense to the Administrative Agent shall include access to all media in which any of the applicable intellectual property may be recorded, processed or stored and all computer programs related thereto.

 

 

SECTION 8.                      THE ADMINISTRATIVE AGENT

 

8.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc.  (a)  Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the 

 

  

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Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following:

 

(i) in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable included in the Collateral or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under any Receivable included in the Collateral or with respect to any other Collateral whenever payable;

 

(ii) in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Administrative Agent may request to evidence the Administrative Agent’s and the Lenders’ security interest in such Intellectual Property and the goodwill connected with the use of and symbolized by any Trademarks and general intangibles of such Grantor relating thereto or represented thereby;

 

(iii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

 

(iv) execute, in connection with any sale provided for in Section 7.6 or 7.7, any indorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

 

(v) (1)  direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct;  (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral;  (3) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (6) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Administrative Agent may deem appropriate; (7) license or assign any Copyright, Patent or Trademark owned by or licensed to (to the fullest extent permitted by such license and subject to the terms and conditions of such license) such Grantor (along with the goodwill of the business connected with the use of and symbolized by any Trademarks), throughout the world for such term or terms, on such conditions, and in such manner, as the Administrative Agent shall in its reasonable discretion determine; and (8) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at the Administrative Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and the Administrative Agent’s and the Lenders’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

 

Anything in this Section 8.1(a)  to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 8.1(a) unless an Event of Default shall have occurred and be continuing.

 

  

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(b) If any Grantor fails to perform or comply with any of its material agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.

 

(c) The reasonable out-of-pocket expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this Section 8.1 shall be payable by such Grantor to the Administrative Agent in accordance with Section 10.5 of the Credit Agreement.

 

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof.  All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

 

8.2 Duty of Administrative Agent.  The Administrative Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account.  Neither the Administrative Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Administrative Agent and the Lenders hereunder are solely to protect the Administrative Agent’s and the Lenders’ interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Lender to exercise any such powers.  The Administrative Agent and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

 

8.3 Execution of Financing Statements.  Pursuant to any applicable law, each Grantor authorizes the Administrative Agent to file or record financing statements, continuation statements, and amendments to financing statements in any jurisdictions and with any filing offices as the Administrative Agent may determine are necessary or advisable to perfect the security interest granted to the Administrative Agent in connection herewith with respect to the Collateral without the signature of such Grantor, to the extent permitted by law, in such form as the Administrative Agent determines appropriate to perfect the security interests of the Administrative Agent under this Agreement.  Such financing statements may describe the Collateral in the same manner as described in this Agreement or may contain an indication or description of Collateral that describes such property in any other manner as the Administrative Agent may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to the Administrative Agent in connection with this Agreement, including, without limitation, describing such property as “all assets, whether now owned or hereafter acquired” or “all personal property, whether now owned or hereafter acquired.”  Each Grantor hereby ratifies and authorizes the filing by the Administrative Agent of any financing statement with respect to the Collateral made prior to the date hereof.

 

8.4 Authority of Administrative Agent.  Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement or any other Security Document with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or under any other Security Document or resulting or arising out of this Agreement or any other Security Document shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time 

 

  

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among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

 

 

SECTION 9.                      MISCELLANEOUS

 

9.1 Amendments in Writing.  None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 10.1 of the Credit Agreement.

 

9.2 Notices.  All notices, requests and demands to or upon the Administrative Agent or any Grantor hereunder shall be effected in the manner provided for in Section 10.2 of the Credit Agreement; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth on Schedule 1.

 

9.3 No Waiver by Course of Conduct; Cumulative Remedies.  Neither the Administrative Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or under any other Security Document or to have acquiesced in any Default or Event of Default.  No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any Lender, any right, power or privilege hereunder or under any other Security Document shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Administrative Agent or any Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent or such Lender would otherwise have on any future occasion.  The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

9.4 Enforcement Expenses; Indemnification.  (a)  Each Guarantor agrees to pay or reimburse each Lender and the Administrative Agent for all its reasonable and documented out-of-pocket costs and expenses incurred in collecting against such Guarantor under the guarantees contained in Section 2 or 3, as applicable, or otherwise enforcing or preserving any rights under this Agreement and the other Loan Documents to which such Guarantor is a party, in each case, in accordance with Section 10.5 of the Credit Agreement.

 

(b) Each Guarantor agrees to pay, and to save the Administrative Agent and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement or any other Security Document and, to the extent applicable, in a manner consistent with Section 2.19 of the Credit Agreement.

 

(c) Each Guarantor agrees to pay, and to save the Administrative Agent and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement or any other Security Document to the extent the Borrower would be required to do so pursuant to Section 10.5 of the Credit Agreement.

 

(d) The agreements in this Section 9.4 shall survive repayment of the Obligations and all other amounts payable under the Credit Agreement and the other Loan Documents.

 

  

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9.5 Successors and Assigns.  This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Administrative Agent and the Lenders and their successors and permitted assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent.

 

9.6 Set-Off.  Each Grantor hereby irrevocably authorizes the Administrative Agent and each Lender at any time and from time to time while an Event of Default shall have occurred and be continuing, without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to the extent permitted by applicable law, upon any amount becoming due and payable by Holdings, the Borrower or any Subsidiary Borrower under any Loan Document (whether at the stated maturity, by acceleration or otherwise), to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Administrative Agent or such Lender to or for the credit or the account of such Grantor. The Administrative Agent and each Lender shall notify such Grantor promptly of any such set-off and the application made by the Administrative Agent or such Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of the Administrative Agent and each Lender under this Section 9.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Administrative Agent or such Lender may have.

 

9.7 Counterparts.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent.

 

9.8 Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

9.9 Section Headings.  The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

9.10 Integration.  This Agreement and the other Loan Documents represent the agreement of the Grantors, the Administrative Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents.

 

9.11 GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

  

26

  

9.12 Submission To Jurisdiction; Waivers.  Each of the Agents, Lenders and each Grantor hereby irrevocably and unconditionally:

 

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York located in the Borough of Manhattan, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

 

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Grantor at its address referred to in Section 9.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

 

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

9.13 Acknowledgements.  Each Grantor hereby acknowledges that:

 

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

 

(b) neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Administrative Agent and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Grantors and the Lenders.

 

9.14 Additional Grantors.  Each Subsidiary of the Borrower or Holdings that is required to become a party to this Agreement pursuant to Section 6.9 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

 

9.15 Releases.  (a)  At such time as the Obligations (other than any unasserted contingent indemnification obligations, and Obligations in respect of Specified Swap Agreements and Specified Cash Management Agreements) shall have been paid in full, the Commitments have been terminated and the Letters of Credit shall have terminated, expired or been Collateralized, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated 

 

  

27

  

to survive such termination) of the Administrative Agent and each Grantor hereunder shall automatically terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors.  At the request and sole expense of any Grantor following any such termination, the Administrative Agent shall promptly deliver to such Grantor any Collateral held by the Administrative Agent hereunder, and promptly execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.

 

(b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreement, then the Liens created hereby on such Collateral shall be released automatically upon consummation of such disposition, and the Administrative Agent, at the request and sole expense of such Grantor, shall promptly execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable to evidence the release of the Liens created hereby on such Collateral.  At the request and sole expense of the Borrower, a Subsidiary Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement; provided that the Borrower shall have delivered to the Administrative Agent a written request for release identifying the relevant Subsidiary Guarantor, together with a certification by the Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents.

 

                9.16WAIVER OF JURY TRIAL.  EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

9.17 Continuation of Security Interests.  All security interests, Liens and obligations created by the Existing Guarantee and Collateral Agreement are continued in full force and effect under this Agreement.  The Existing Guarantee and Collateral Agreement remains in full force and effect as amended by this Agreement.

 

  

28

  

IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated Guarantee and Collateral Agreement to be duly executed and delivered as of the date first above written.

 

AVIS BUDGET HOLDINGS, LLC

	
  

	
 

	
By: /s/ Rochelle Tarlowe

 

	
  

	
Name:  Rochelle Tarlowe

	
  

	
Title:  Vice President and Treasurer

AVIS BUDGET CAR RENTAL, LLC

	
  

	
 

	
By: /s/ Rochelle Tarlowe

 

	
  

	
Name:  Rochelle Tarlowe

	
  

	
Title:  Vice President and Treasurer

  

  

  

  

	
  

	

Avis Budget Finance, Inc.

 

Avis Asia and Pacific, Limited

 

Avis Car Rental Group, LLC

 

Avis Caribbean, Limited

 

Avis Enterprises, Inc.

 

Avis Group Holdings, LLC

 

	
  

	
Avis International, Ltd.

 

	
  

	
Avis Rent A Car System, LLC

 

PF Claims Management, Ltd.

 

	
  

	
Wizard Co., Inc.

 

	
  

	
AB Car Rental Services, Inc.

 

	
  

	
ARACS LLC

 

	
  

	
Avis Operations, LLC

 

	
  

	
PR Holdco, Inc.

 

	
  

	
Wizard Services, Inc.

 

	
  

	
 

	
By: /s/ Rochelle Tarlowe

 

	
  

	
Name:  Rochelle Tarlowe

	
  

	
Title:  Vice President and Treasurer

 

 

 

	
  

	
BGI Leasing, Inc.

 

	
  

	
Budget Rent A Car System, Inc.

 

	
  

	
Budget Truck Rental LLC

 

	
  

	
Runabout, LLC

 

 

	
  

	
 

	
By: /s/ David B. Wyshner

 

	
  

	
Name:  David B. Wyshner

	
  

	
Title:  Executive Vice President, Chief Financial Officer and Treasurer

  

  

  

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

	
  

	
 

	
By: /s. Robert P. Kellas

 

	
  

	
Name:  ROBERT P. KELLAS

	
  

	
Title:  EXECUTIVE DIRECTORseries20111supplement.htm

Exhibit 10.3

 

AVIS BUDGET RENTAL CAR FUNDING (AESOP) LLC,

 

as Issuer

 

and

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

 

as Trustee and Series 2011-1 Agent

 

_____________________

 

SERIES 2011-1 SUPPLEMENT

 

dated as of May 3, 2011

 

to

 

SECOND AMENDED AND RESTATED BASE INDENTURE

 

dated as of June 3, 2004

 

_____________________

Series 2011-1 1.85% Rental Car Asset Backed Notes, Class A

Series 2011-1 2.98% Rental Car Asset Backed Notes, Class B

  

  

  

 

TABLE OF CONTENTS

 

	 	 	Page	 
	  	
 

ARTICLE I DEFINITIONS

 

	
2

	  
	  	
 

ARTICLE II SERIES 2011-1 ALLOCATIONS

 

	
23

	  
	  	
Section 2.1.                      Establishment of Series 2011-1 Collection Account, Series 2011-1 Excess Collection Account and Series 2011-1 Accrued   Interest Account

	
23

	  
	  	
Section 2.2.                      Allocations with Respect to the Series 2011-1 Notes

	
23

	  
	  	
Section 2.3.                      Payments to Noteholders

	
27

	  
	  	
Section 2.4.                      Payment of Note Interest

	
30

	  
	  	
Section 2.5.                      Payment of Note Principal

	
30

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

	
34

	  
	  	
Section 2.7.                      Series 2011-1 Reserve Account

	
35

	  
	  	
Section 2.8.                      Series 2011-1 Letters of Credit and Series 2011-1 Cash Collateral Account

	
36

	  
	  	
Section 2.9.                      Series 2011-1 Distribution Account

	
41

	  
	  	
Section 2.10.                    Series 2011-1 Accounts Permitted Investments

	
42

	  
	  	
Section 2.11.                    Series 2011-1 Demand Notes Constitute Additional Collateral for Series 2011-1 Notes

	
43

	  
	  	
Section 2.12.                    Subordination of the Class B Notes and Class C Notes

	
43

	  
	  	
 

ARTICLE III AMORTIZATION EVENTS

 

	
44

	  
	  	
 

ARTICLE IV FORM OF SERIES 2011-1 NOTES

 

	
45

	  
	  	
Section 4.1.                      Restricted Global Series 2011-1 Notes

	
45

	  
	  	
Section 4.2.                      Temporary Global Series 2011-1 Notes; Permanent Global Series 2011-1 Notes

	
45

	  
	  	
 

ARTICLE V GENERAL

 

	  46	  
	  	
Section 5.1.                      Optional Repurchase

	  46	  
	  	
Section 5.2.                      Information

	  46	  
	  	
Section 5.3.                      Exhibits

	  46	  
	  	
Section 5.4.                      Ratification of Base Indenture

	  46	  
	  	
Section 5.5.                      Counterparts

	  47	  
	  	
Section 5.6.                      Governing Law

	  47	  
	  	
Section 5.7.                      Amendments

	  47	  
	  	
Section 5.8.                      Discharge of Indenture

	  47	  
	  	
Section 5.9.                      Notice to Rating Agencies

	  47	  
	  	
Section 5.10.                    Capitalization of ABRCF

	  47	  
	  	
Section 5.11.                    Required Noteholders.

	  48	  
	  	
Section 5.12.                    Series 2011-1 Demand Notes

	  48	  
	  	
Section 5.13.                    Termination of Supplement

	  48	  
	  	
Section 5.14.                    Noteholder Consent to Certain Amendments

	  48	  
	  	
Section 5.15.                    Issuance of Class C Notes

	  49	  
	  	
Section 5.16.                    Confidential Information.

	  50	  
	  	
Section 5.17.                    Capitalized Cost Covenant

	  52	  
	  	
Section 5.18.                    Further Limitation of Liability.

	  52	  

 

 

  

  

  

 

	  	
Section 5.19.                    Force Majeure.

	  52	  
	  	
Section 5.20.                    Waiver of Jury Trial, etc

	52	  
	  	
Section 5.21.                    Submission to Jurisdiction

	  53	  

 

  

  

  

SERIES 2011-1 SUPPLEMENT, dated as of May 3, 2011 (this “Supplement”), among AVIS BUDGET RENTAL CAR FUNDING (AESOP) LLC, a special purpose limited liability company established under the laws of Delaware (“ABRCF”), THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (formerly known as The Bank of New York), a limited purpose national banking association with trust powers, as trustee (in such capacity, and together with its successors in trust thereunder as provided in the Base Indenture referred to below, the “Trustee”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (formerly known as The Bank of New York), as agent (in such capacity, the “Series 2011-1 Agent”) for the benefit of the Series 2011-1 Noteholders, to the Second Amended and Restated Base Indenture, dated as of June 3, 2004, between ABRCF 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 ABRCF and the Trustee may at any time and from time to time enter into a supplement to the Base Indenture for the purpose of authorizing the issuance of one or more Series of Notes;

 

 

NOW, THEREFORE, the parties hereto agree as follows:

 

 

DESIGNATION

 

There is hereby created a Series of Notes to be issued pursuant to the Base Indenture and this Supplement, and such Series of Notes shall be designated generally as the Series 2011-1 Rental Car Asset Backed Notes.  The Series 2011-1 Notes shall be issued in up to three Classes, the first of which shall be known as the “Class A Notes”, the second of which shall be known as the “Class B Notes” and the third of which, if issued, shall be known as the “Class C Notes”.

 

On the Series 2011-1 Closing Date, ABRCF shall issue (i) one tranche of Class A Notes, which shall be designated as the Series 2011-1 1.85% Rental Car Asset Backed Notes, Class A and (ii) one tranche of Class B Notes, which shall be designated as the Series 2011-1 2.98% Rental Car Asset Backed Notes, Class B.

 

Subsequent to the Series 2011-1 Closing Date, ABRCF may on any date during the Series 2011-1 Revolving Period offer and sell additional Series 2011-1 Notes subject to the conditions set forth in Section 5.15.  Such additional Series 2011-1 Notes, if issued, shall be designated as the Series 2011-1 Fixed Rate Rental Car Asset Backed Notes, Class C, and shall be referred to herein as the “Class C Notes”.

 

The Class A Notes, Class B Notes and Class C Notes, if issued, together, constitute the Series 2011-1 Notes.  The Class B Notes shall be subordinated in right of payment to the Class A Notes, to the extent set forth herein.  The Class C Notes, if issued, shall be subordinated in right of payment to the Class A Notes and Class B Notes, to the extent set forth herein.

 

  

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The proceeds from the sale of the Class A Notes and Class B Notes shall be deposited in the Collection Account and shall be deemed to be Principal Collections.

 

The Series 2011-1 Notes are a non-Segregated Series of Notes (as more fully described in the Base Indenture).  Accordingly, all references in this Supplement to “all” Series of Notes (and all references in this Supplement to terms defined in the Base Indenture that contain references to “all” Series of Notes) shall refer to all Series of Notes other than Segregated Series of Notes.

 

 

ARTICLE I

 

DEFINITIONS

 

(a)           All capitalized terms not otherwise defined herein are defined in the Definitions List attached to the Base Indenture as Schedule I thereto.  All Article, Section, Subsection or Exhibit references herein shall refer to Articles, Sections, Subsections or Exhibits of this Supplement, except as otherwise provided herein.  Unless otherwise stated herein, as the context otherwise requires or if such term is otherwise defined in the Base Indenture, each capitalized term used or defined herein shall relate only to the Series 2011-1 Notes and not to any other Series of Notes issued by ABRCF.  In the event that a term used herein shall be defined both herein and in the Base Indenture, the definition of such term herein shall govern.

 

(b)           The following words and phrases shall have the following meanings with respect to the Series 2011-1 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:

 

“ABCR” means Avis Budget Car Rental, LLC.

 

“Adjusted Net Book Value” means, as of any date of determination, with respect to each Adjusted Program Vehicle as of such date, the product of 0.965 and the Net Book Value of such Adjusted Program Vehicle as of such date.

 

“Business Day” means any day other than (a) a Saturday or a Sunday or (b) a day on which banking institutions in New York City or in the city in which the corporate trust office of the Trustee is located are authorized or obligated by law or executive order to close.

 

“Certificate of Lease Deficit Demand” means a certificate substantially in the form of Annex A to the Series 2011-1 Letters of Credit.

 

“Certificate of Termination Date Demand” means a certificate substantially in the form of Annex D to the Series 2011-1 Letters of Credit.

 

“Certificate of Termination Demand” means a certificate substantially in the form of Annex C to the Series 2011-1 Letters of Credit.

 

  

-2-

  

“Certificate of Unpaid Demand Note Demand” means a certificate substantially in the form of Annex B to the Series 2011-1 Letters of Credit.

 

“Class” means a class of the Series 2011-1 Notes, which may be the Class A Notes, the Class B Notes or, if issued, the Class C Notes.

 

“Class A Carryover Controlled Amortization Amount” means, with respect to any Related Month during the Series 2011-1 Controlled Amortization Period, the amount, if any, by which the portion of the Monthly Total Principal Allocation paid to the Class A Noteholders pursuant to Section 2.5(e)(i) for the previous Related Month was less than the Class A Controlled Distribution Amount for the previous Related Month; provided, however, that for the first Related Month in the Series 2011-1 Controlled Amortization Period, the Class A Carryover Controlled Amortization Amount shall be zero.

 

“Class A Controlled Amortization Amount” means, with respect to any Related Month during the Series 2011-1 Controlled Amortization Period, $58,000,000.

 

“Class A Controlled Distribution Amount” means, with respect to any Related Month during the Series 2011-1 Controlled Amortization Period, an amount equal to the sum of the Class A Controlled Amortization Amount and any Class A Carryover Controlled Amortization Amount for such Related Month.

 

“Class A Initial Invested Amount” means the aggregate initial principal amount of the Class A Notes, which is $174,000,000.

 

“Class A Invested Amount” means, when used with respect to any date, an amount equal to (a) the Class A Initial Invested Amount minus (b) the amount of principal payments made to Class A Noteholders on or prior to such date.

 

“Class A Monthly Interest” means, with respect to (i) the initial Series 2011-1 Interest Period, an amount equal to $420,258.33 and (ii) any other Series 2011-1 Interest Period, an amount equal to the product of (A) one-twelfth of the Class A Note Rate and (B) the Class A Invested Amount on the first day of such Series 2011-1 Interest Period, after giving effect to any principal payments made on such date.

 

“Class A Note” means any one of the Series 2011-1 1.85% Rental Car Asset Backed Notes, Class A, executed by ABRCF and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A-1, Exhibit A-2 or Exhibit A-3.  Definitive Class A Notes shall have such insertions and deletions as are necessary to give effect to the provisions of Section 2.18 of the Base Indenture.

 

“Class A Note Rate” means 1.85% per annum.

 

“Class A Noteholder” means the Person in whose name a Class A Note is registered in the Note Register.

 

“Class A Shortfall” has the meaning set forth in Section 2.3(g)(i).

 

  

-3-

  

“Class B Carryover Controlled Amortization Amount” means, with respect to any Related Month during the Series 2011-1 Controlled Amortization Period, the amount, if any, by which the portion of the Monthly Total Principal Allocation paid to the Class B Noteholders pursuant to Section 2.5(e)(ii) for the previous Related Month was less than the Class B Controlled Distribution Amount for the previous Related Month; provided, however, that for the first Related Month in the Series 2011-1 Controlled Amortization Period, the Class B Carryover Controlled Amortization Amount shall be zero.

 

“Class B Controlled Amortization Amount” means, (i) with respect to any Related Month during the Series 2011-1 Controlled Amortization Period other than the Related Month immediately preceding the Series 2011-1 Expected Final Distribution Date, $8,666,666.67 and (ii) with respect to the Related Month immediately preceding the Series 2011-1 Expected Final Distribution Date, $8,666,666.66.

 

“Class B Controlled Distribution Amount” means, with respect to any Related Month during the Series 2011-1 Controlled Amortization Period, an amount equal to the sum of the Class B Controlled Amortization Amount and any Class B Carryover Controlled Amortization Amount for such Related Month.

 

“Class B Initial Invested Amount” means the aggregate initial principal amount of the Class B Notes, which is $26,000,000.

 

“Class B Invested Amount” means, when used with respect to any date, an amount equal to (a) the Class B Initial Invested Amount minus (b) the amount of principal payments made to Class B Noteholders on or prior to such date.

 

“Class B Monthly Interest” means, with respect to (i) the initial Series 2011-1 Interest Period, an amount equal to $101,154.44 and (ii) any other Series 2011-1 Interest Period, an amount equal to the product of (A) one-twelfth of the Class B Note Rate and (B) the Class B Invested Amount on the first day of such Series 2011-1 Interest Period, after giving effect to any principal payments made on such date.

 

“Class B Note” means any one of the Series 2011-1 2.98% Rental Car Asset Backed Notes, Class B, executed by ABRCF and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit B-1, Exhibit B-2 or Exhibit B-3.  Definitive Class B Notes shall have such insertions and deletions as are necessary to give effect to the provisions of Section 2.18 of the Base Indenture.

 

“Class B Note Rate” means 2.98% per annum.

 

“Class B Noteholder” means the Person in whose name a Class B Note is registered in the Note Register.

 

“Class B Shortfall” has the meaning set forth in Section 2.3(g)(ii).

 

“Class C Noteholder” means the Person in whose name a Class C Note is registered in the Note Register.

 

  

-4-

  

“Class C Notes” has the meaning set forth in the preamble.

 

“Class C Notes Closing Date” has the meaning set forth in Section 5.15.

 

“Clearstream” is defined in Section 4.2.

 

“Confirmation Condition” means, with respect to any Bankrupt Manufacturer which is a debtor in Chapter 11 Proceedings, a condition that shall be satisfied upon the bankruptcy court having competent jurisdiction over such Chapter 11 Proceedings issuing an order that remains in effect approving (i) the assumption of such Bankrupt Manufacturer’s Manufacturer Program (and the related Assignment Agreements) by such Bankrupt Manufacturer or the trustee in bankruptcy of such Bankrupt Manufacturer under Section 365 of the Bankruptcy Code and at the time of such assumption, the payment of all amounts due and payable by such Bankrupt Manufacturer under such Manufacturer Program and the curing of all other defaults by the Bankrupt Manufacturer thereunder or (ii) the execution, delivery and performance by such Bankrupt Manufacturer of a new post-petition Manufacturer Program (and the related assignment agreements) on the same terms and covering the same Vehicles as such Bankrupt Manufacturer’s Manufacturer Program (and the related Assignment Agreements) in effect on the date such Bankrupt Manufacturer became subject to such Chapter 11 Proceedings and, at the time of the execution and delivery of such new post-petition Manufacturer Program, the payment of all amounts due and payable by such Bankrupt Manufacturer under such Manufacturer Program and the curing of all other defaults by the Bankrupt Manufacturer thereunder; provided that notwithstanding the foregoing, the Confirmation Condition shall be deemed satisfied until the 90th calendar day following the initial filing in respect of such Chapter 11 Proceedings.

 

“DBRS” means DBRS, Inc.

 

“DBRS Excluded Manufacturer Receivable Specified Percentage” means, as of any date of determination, with respect to each DBRS Non-Investment Grade Manufacturer as of such date, the percentage (not to exceed 100%) most recently specified in writing by DBRS to ABRCF and the Trustee and consented to by the Requisite Series 2011-1 Noteholders with respect to such DBRS Non-Investment Grade Manufacturer; provided, however, that as of the Series 2011-1 Closing Date the DBRS Excluded Manufacturer Receivable Specified Percentage for each DBRS Non-Investment Grade Manufacturer shall be 100%; provided, further, that the initial DBRS Excluded Manufacturer Receivable Specified Percentage with respect to any Manufacturer that becomes a DBRS Non-Investment Grade Manufacturer after the Series 2011-1 Closing Date shall be 100%.

 

“DBRS Excluded Receivable Amount” means, as of any date of determination, the sum of the following amounts with respect to each DBRS Non-Investment Grade Manufacturer as of such date:  the product of (i) to the extent such amounts are included in the calculation of AESOP I Operating Lease Loan Agreement Borrowing Base as of such date, all amounts receivable, as of such date, by AESOP Leasing or the Intermediary from such DBRS Non-Investment Grade Manufacturer and (ii) the DBRS Excluded Manufacturer Receivable Specified Percentage for such DBRS Non-Investment Grade Manufacturer as of such date.

 

  

-5-

  

“DBRS Non-Investment Grade Manufacturer” means, as of any date of determination, any Manufacturer that (i) is not a Bankrupt Manufacturer and (ii) does not have a long-term senior unsecured debt rating of at least “BBB (low)” from DBRS; provided that any Manufacturer whose long-term senior unsecured debt rating is downgraded from at least “BBB (low)” to below “BBB (low)” by DBRS after the Series 2011-1 Closing Date shall not be deemed a DBRS Non-Investment Grade Manufacturer until the thirtieth (30th) calendar day following such downgrade.

 

“Demand Note Issuer” means each issuer of a Series 2011-1 Demand Note.

 

“Disbursement” means any Lease Deficit Disbursement, any Unpaid Demand Note Disbursement, any Termination Date Disbursement or any Termination Disbursement under a Series 2011-1 Letter of Credit, or any combination thereof, as the context may require.

 

“Euroclear” is defined in Section 4.2.

 

“Excess Collections” is defined in Section 2.3(f)(i).

 

“Excluded Receivable Amount” means, as of any date of determination, the greater of the Moody’s Excluded Receivable Amount and the DBRS Excluded Receivable Amount as of such date.

 

“Finance Guide” means the Black Book Official Finance/Lease Guide.

 

“Inclusion Date” means, with respect to any Vehicle, the date that is three months after the earlier of (i) the date such Vehicle became a Redesignated Vehicle and (ii) if the Manufacturer of such Vehicle is a Bankrupt Manufacturer, the date upon which the Event of Bankruptcy which caused such Manufacturer to become a Bankrupt Manufacturer first occurred.

 

“Lease Deficit Disbursement” means an amount drawn under a Series 2011-1 Letter of Credit pursuant to a Certificate of Lease Deficit Demand.

 

“Market Value Average” means, as of any day, the percentage equivalent of a fraction, the numerator of which is the average of the Selected Fleet Market Value as of the preceding Determination Date and the two Determination Dates precedent thereto and the denominator of which is the sum of (a) the average of the aggregate Net Book Value of all Non-Program Vehicles (excluding (i) any Unaccepted Program Vehicles, (ii) any Excluded Redesignated Vehicles and (iii) any other Non-Program Vehicles that are subject to a Manufacturer Program with an Eligible Non-Program Manufacturer with respect to which no Manufacturer Event of Default has occurred and is continuing) and (b) the average of the aggregate Adjusted Net Book Value of all Adjusted Program Vehicles, in the case of each of clause (a) and (b) leased under the AESOP I Operating Lease and the Finance Lease as of the preceding Determination Date and the two Determination Dates precedent thereto.

 

“Monthly Total Principal Allocation” means for any Related Month the sum of all Series 2011-1 Principal Allocations with respect to such Related Month.

 

  

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“Moody’s Excluded Manufacturer Receivable Specified Percentage” means, as of any date of determination, with respect to each Moody’s Non-Investment Grade Manufacturer as of such date, the percentage (not to exceed 100%) most recently specified in writing by Moody’s to ABRCF and the Trustee and consented to by the Requisite Series 2011-1 Noteholders with respect to such Moody’s Non-Investment Grade Manufacturer; provided, however, that as of the Series 2011-1 Closing Date the Moody’s Excluded Manufacturer Receivable Specified Percentage for each Moody’s Non-Investment Grade Manufacturer shall be 100%; provided further that the initial Moody’s Excluded Manufacturer Receivable Specified Percentage with respect to any Manufacturer that becomes a Moody’s Non-Investment Grade Manufacturer after the Series 2011-1 Closing Date shall be 100%.

 

“Moody’s Excluded Receivable Amount” means, as of any date of determination, the sum of the following amounts with respect to each Moody’s Non-Investment Grade Manufacturer as of such date:  the product of (i) to the extent such amounts are included in the calculation of AESOP I Operating Lease Loan Agreement Borrowing Base as of such date, all amounts receivable, as of such date, by AESOP Leasing or the Intermediary from such Moody’s Non-Investment Grade Manufacturer and (ii) the Moody’s Excluded Manufacturer Receivable Specified Percentage for such Moody’s Non-Investment Grade Manufacturer as of such date.

 

“Moody’s Non-Investment Grade Manufacturer” means, as of any date of determination, any Manufacturer that (i) is not a Bankrupt Manufacturer and (ii) does not have a long term senior unsecured debt rating of at least “Baa3” from Moody’s; provided that any Manufacturer whose long term senior unsecured debt rating is downgraded from at least “Baa3” to below “Baa3” by Moody’s after the Series 2011-1 Closing Date shall not be deemed a Moody’s Non Investment Grade Manufacturer until the thirtieth (30th) calendar day following such downgrade.

 

 “Past Due Rent Payment” is defined in Section 2.2(g).

 

“Permanent Global Class A Note” is defined in Section 4.2.

 

“Permanent Global Class B Note” is defined in Section 4.2.

 

“Permanent Global Series 2011-1 Notes” is defined in Section 4.2.

 

“Pre-Preference Period Demand Note Payments” means, as of any date of determination, the aggregate amount of all proceeds of demands made on the Series 2011-1 Demand Notes included in the Series 2011-1 Demand Note Payment Amount as of the Series 2011-1 Letter of Credit Termination Date that were paid by the Demand Note Issuers more than one year before such date of determination; provided, however, that if an Event of Bankruptcy (or the occurrence of an event described in clause (a) of the definition thereof, without the lapse of a period of sixty (60) consecutive days) with respect to a Demand Note Issuer occurs during such one-year period, (x) the Pre-Preference Period Demand Note Payments as of any date during the period from and including the date of the occurrence of such Event of Bankruptcy to and including the conclusion or dismissal of the proceedings giving rise to such Event of Bankruptcy without continuing jurisdiction by the court in such proceedings shall equal the Pre-Preference Period Demand Note Payments as of the date of such occurrence for all Demand 

 

  

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Note Issuers and (y) the Pre-Preference Period Demand Note Payments as of any date after the conclusion or dismissal of such proceedings shall equal the Series 2011-1 Demand Note Payment Amount as of the date of the conclusion or dismissal of such proceedings.

 

“Principal Deficit Amount” means, as of any date of determination, the excess, if any, of (i) the Series 2011-1 Invested Amount on such date (after giving effect to the distribution of the Monthly Total Principal Allocation for the Related Month if such date is a Distribution Date) over (ii) the Series 2011-1 AESOP I Operating Lease Loan Agreement Borrowing Base on such date; provided, however that the Principal Deficit Amount on any date occurring during the period commencing on and including the date of the filing by any of the Lessees of a petition for relief under Chapter 11 of the Bankruptcy Code to but excluding the date on which each of the Lessees shall have resumed making all payments of the portion of Monthly Base Rent relating to Loan Interest required to be made under the AESOP I Operating Lease, shall mean the excess, if any, of (x) the Series 2011-1 Invested Amount on such date (after giving effect to the distribution of Monthly Total Principal Allocation for the Related Month if such date is a Distribution Date) over (y) the sum of (1) the Series 2011-1 AESOP I Operating Lease Loan Agreement Borrowing Base on such date and (2) the lesser of (a) the Series 2011-1 Liquidity Amount on such date and (b) the Series 2011-1 Required Liquidity Amount on such date.

 

“Proposed Class C Notes” has the meaning set forth in Section 5.15.

 

“Pro Rata Share” means, with respect to any Series 2011-1 Letter of Credit Provider as of any date, the fraction (expressed as a percentage) obtained by dividing (A) the available amount under such Series 2011-1 Letter of Credit Provider’s Series 2011-1 Letter of Credit as of such date by (B) an amount equal to the aggregate available amount under all Series 2011-1 Letters of Credit as of such date; provided, that only for purposes of calculating the Pro Rata Share with respect to any Series 2011-1 Letter of Credit Provider as of any date, if such Series 2011-1 Letter of Credit Provider has not complied with its obligation to pay the Trustee the amount of any draw under its Series 2011-1 Letter of Credit made prior to such date, the available amount under such Series 2011-1 Letter of Credit Provider’s Series 2011-1 Letter of Credit as of such date shall be treated as reduced (for calculation purposes only) by the amount of such unpaid demand and shall not be reinstated for purposes of such calculation unless and until the date as of which such Series 2011-1 Letter of Credit Provider has paid such amount to the Trustee and been reimbursed by the Lessee or the applicable Demand Note Issuer, as the case may be, for such amount (provided that the foregoing calculation shall not in any manner reduce the undersigned’s actual liability in respect of any failure to pay any demand under its Series 2011-1 Letter of Credit).

 

“Required Controlling Class Series 2011-1 Noteholders” means (i) for so long as any Class A Notes are outstanding, Class A Noteholders holding more than 50% of the Class A Invested Amount and (ii) if no Class A Notes are outstanding, Class B Noteholders holding more than 50% of the Class B Invested Amount (excluding, for the purposes of making any of the foregoing calculations, any Series 2011-1 Notes held by ABCR or any Affiliate of ABCR unless ABCR is the sole Series 2011-1 Noteholder).

“Requisite Series 2011-1 Noteholders” means Class A Noteholders and Class B Noteholders holding, in the aggregate, more than 50% of the Series 2011-1 Invested Amount 

 

  

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(excluding, for the purposes of making the foregoing calculation, any Series 2011-1 Notes held by ABCR or any Affiliate of ABCR unless ABCR is the sole Series 2011-1 Noteholder).

 

“Restricted Global Class A Note” is defined in Section 4.1.

 

“Restricted Global Class B Note” is defined in Section 4.1.

 

“Selected Fleet Market Value” means, with respect to all Adjusted Program Vehicles and all Non-Program Vehicles (excluding (i) any Unaccepted Program Vehicles, (ii) any Excluded Redesignated Vehicles and (iii) any other Non-Program Vehicles that are subject to a Manufacturer Program with an Eligible Non-Program Manufacturer with respect to which no Manufacturer Event of Default has occurred and is continuing) as of any date of determination, the sum of the respective Market Values of each such Adjusted Program Vehicle and each such Non-Program Vehicle, in each case subject to the AESOP I Operating Lease or the Finance Lease as of such date.  For purposes of computing the Selected Fleet Market Value, the “Market Value” of an Adjusted Program Vehicle or a Non-Program Vehicle means the market value of such Vehicle as specified in the most recently published NADA Guide for the model class and model year of such Vehicle based on the average equipment and the average mileage of each Vehicle of such model class and model year then leased under the AESOP I Operating Lease and the Finance Lease; provided, that if the NADA Guide is not being published or the NADA Guide is being published but such Vehicle is not included therein, the Market Value of such Vehicle shall be based on the market value specified in the most recently published Finance Guide for the model class and model year of such Vehicle based on the average equipment and the average mileage of each Vehicle of such model class and model year then leased under the AESOP I Operating Lease or the Finance Lease; provided, further, that if the Finance Guide is being published but such Vehicle is not included therein, the Market Value of such Vehicle shall mean (x) in the case of an Adjusted Program Vehicle, the Adjusted Net Book Value of such Adjusted Program Vehicle and (y) in the case of a Non-Program Vehicle, the Net Book Value of such Non-Program Vehicle provided, further, that if the Finance Guide is not being published, the Market Value of such Vehicle shall be based on an independent third-party data source selected by the Administrator and approved by each Rating Agency that is rating any Series of Notes at the request of ABRCF based on the average equipment and average mileage of each Vehicle of such model class and model year then leased under the AESOP I Operating Lease or the Finance Lease; provided, further, that if no such third-party data source or methodology shall have been so approved or any such third-party data source or methodology is not available, the Market Value of such Vehicle shall be equal to a reasonable estimate of the wholesale market value of such Vehicle as determined by the Administrator, based on the Net Book Value of such Vehicle and any other factors deemed relevant by the Administrator.

 

“Series 2004-1 Notes” means the Series of Notes designated as the Series 2004-1 Notes.

 

“Series 2005-2 Notes” means the Series of Notes designated as the Series 2005-2 Notes.

 

  

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“Series 2005-4 Notes” means the Series of Notes designated as the Series 2005-4 Notes.

 

“Series 2007-2 Notes” means the Series of Notes designated as the Series 2007-2 Notes.

 

“Series 2008-1 Notes” means the Series of Notes designated as the Series 2008-1 Notes.

 

“Series 2009-1 Notes” means the Series of Notes designated as the Series 2009-1 Notes.

 

“Series 2009-2 Notes” means the Series of Notes designated as the Series 2009-2 Notes.

 

“Series 2009-3 Notes” means the Series of Notes designated as the Series 2009-3 Notes.

 

“Series 2010-1 Notes” means the Series of Notes designated as the Series 2010-1 Notes.

 

“Series 2010-2 Notes” means the Series of Notes designated as the Series 2010-2 Notes.

 

“Series 2010-3 Notes” means the Series of Notes designated as the Series 2010-3 Notes.

 

“Series 2010-4 Notes” means the Series of Notes designated as the Series 2010-4 Notes.

 

“Series 2010-5 Notes” means the Series of Notes designated as the Series 2010-5 Notes.

 

“Series 2010-6 Notes” means the Series of Notes designated as the Series 2010-6 Notes.

 

“Series 2011-1 Accounts” means each of the Series 2011-1 Distribution Account, the Series 2011-1 Reserve Account, the Series 2011-1 Collection Account, the Series 2011-1 Excess Collection Account and the Series 2011-1 Accrued Interest Account.

 

“Series 2011-1 Accrued Interest Account” is defined in Section 2.1(b).

 

 

“Series 2011-1 AESOP I Operating Lease Loan Agreement Borrowing Base” means, as of any date of determination, the product of (a) the Series 2011-1 AESOP I Operating Lease Vehicle Percentage as of such date and (b) the excess of (i) the AESOP I Operating Lease Loan Agreement Borrowing Base as of such date over (ii) the Excluded Receivable Amount as of such date.

 

  

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“Series 2011-1 AESOP I Operating Lease Vehicle Percentage” means, as of any date of determination, a fraction, expressed as a percentage (which percentage shall never exceed 100%), the numerator of which is the Series 2011-1 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 2011-1 Agent” is defined in the recitals hereto.

 

“Series 2011-1 Available Cash Collateral Account Amount” means, as of any date of determination, the amount on deposit in the Series 2011-1 Cash Collateral Account (after giving effect to any deposits thereto and withdrawals and releases therefrom on such date).

 

“Series 2011-1 Available Reserve Account Amount” means, as of any date of determination, the amount on deposit in the Series 2011-1 Reserve Account (after giving effect to any deposits thereto and withdrawals and releases therefrom on such date).

 

“Series 2011-1 Cash Collateral Account” is defined in Section 2.8(f).

 

“Series 2011-1 Cash Collateral Account Collateral” is defined in Section 2.8(a).

 

“Series 2011-1 Cash Collateral Account Surplus” means, with respect to any Distribution Date, the lesser of (a) the Series 2011-1 Available Cash Collateral Account Amount and (b) the lesser of (A) the excess, if any, of the Series 2011-1 Liquidity Amount (after giving effect to any withdrawal from the Series 2011-1 Reserve Account on such Distribution Date) over the Series 2011-1 Required Liquidity Amount on such Distribution Date and (B) the excess, if any, of the Series 2011-1 Enhancement Amount (after giving effect to any withdrawal from the Series 2011-1 Reserve Account on such Distribution Date) over the Series 2011-1 Required Enhancement Amount on such Distribution Date; provided, however that, on any date after the Series 2011-1 Letter of Credit Termination Date, the Series 2011-1 Cash Collateral Account Surplus shall mean the excess, if any, of (x) the Series 2011-1 Available Cash Collateral Account Amount over (y) the Series 2011-1 Demand Note Payment Amount minus the Pre-Preference Period Demand Note Payments as of such date.

 

“Series 2011-1 Cash Collateral Percentage” means, as of any date of determination, the percentage equivalent of a fraction, the numerator of which is the Series 2011-1 Available Cash Collateral Amount as of such date and the denominator of which is the Series 2011-1 Letter of Credit Liquidity Amount as of such date.

 

“Series 2011-1 Closing Date” means May 3, 2011.

 

“Series 2011-1 Collateral” means the Collateral, each Series 2011-1 Letter of Credit, each Series 2011-1 Demand Note, the Series 2011-1 Distribution Account Collateral, the Series 2011-1 Cash Collateral Account Collateral and the Series 2011-1 Reserve Account Collateral.

 

“Series 2011-1 Collection Account” is defined in Section 2.1(b).

 

  

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“Series 2011-1 Controlled Amortization Period” means the period commencing at the opening of business on August 1, 2013 (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 2011-1 Rapid Amortization Period, (ii) the date on which the Series 2011-1 Notes are fully paid and (iii) the termination of the Indenture.

 

“Series 2011-1 DBRS Enhancement Percentage” means, as of any date of determination, the sum of (i) the product of (A) the Series 2011-1 DBRS Lowest Enhancement Rate as of such date and (B) the Series 2011-1 DBRS Lowest Enhanced Vehicle Percentage as of such date, (ii) the product of (A) the Series 2011-1 DBRS Intermediate Enhancement Rate as of such date and (B) the Series 2011-1 DBRS Intermediate Enhanced Vehicle Percentage as of such date, and (iii) the product of (A) the Series 2011-1 DBRS Highest Enhancement Rate as of such date and (B) the Series 2011-1 DBRS Highest Enhanced Vehicle Percentage as of such date.

 

“Series 2011-1 DBRS Highest Enhanced Vehicle Percentage” means, as of any date of determination, a fraction, expressed as a percentage, (a) the numerator of which is the aggregate Net Book Value of all Vehicles leased under the AESOP I Operating Lease that were manufactured by a Manufacturer that does not have a long-term senior unsecured debt rating of at least “BBB (low)” from DBRS as of such date and (b) 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 2011-1 DBRS Highest Enhancement Rate” means, as of any date of determination, the sum of (a) 30.50% and (b) the highest, for any calendar month within the preceding twelve calendar months, of the greater of (x) an amount (not less than zero) equal to 100% minus the Measurement Month Average for the immediately preceding Measurement Month and (y) an amount (not less than zero) equal to 100% minus the Market Value Average as of the Determination Date within such calendar month (excluding the Market Value Average for any Determination Date which has not yet occurred).

 

“Series 2011-1 DBRS Intermediate Enhanced Vehicle Percentage” means, as of any date of determination, 100% minus the sum of (a) the Series 2011-1 DBRS Lowest Enhanced Vehicle Percentage and (b) the Series 2011-1 DBRS Highest Enhanced Vehicle Percentage.

 

“Series 2011-1 DBRS Intermediate Enhancement Rate” means, as of any date of determination, the sum of (a) 27.25% and (b) the highest, for any calendar month within the preceding twelve calendar months, of the greater of (c) 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 2011-1 DBRS Lowest Enhanced Vehicle Percentage” means, as of any date of determination, a fraction, expressed as a percentage, (a) the numerator of which is the sum, without duplication, of (1) the aggregate Net Book Value of all Program Vehicles leased under the AESOP I Operating Lease that are manufactured by Eligible Program Manufacturers 

 

  

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having long-term senior unsecured debt ratings of “BBB” or higher from DBRS as of such date, (2) so long as any Eligible Non-Program Manufacturer has a long-term senior unsecured debt rating of “BBB” or higher from DBRS and no Manufacturer Event of Default has occurred and is continuing with respect to such Eligible Non-Program Manufacturer, the aggregate Net Book Value of all Non-Program Vehicles leased under the AESOP I Operating Lease manufactured by each such Eligible Non-Program Manufacturer that are subject to a Manufacturer Program and remain eligible for repurchase thereunder as of such date and (3) the lesser of (A) the sum of (x) if as of such date any Eligible Program Manufacturer has a long-term senior unsecured debt rating of “BBB (low)” from DBRS, the aggregate Net Book Value of all Program Vehicles leased under the AESOP I Operating Lease manufactured by each such Eligible Program Manufacturer as of such date and (y) if as of such date any Eligible Non-Program Manufacturer has a long-term senior unsecured debt rating of “BBB (low)” from DBRS and no Manufacturer Event of Default has occurred and is continuing with respect to such Eligible Non-Program Manufacturer, the aggregate Net Book Value of all Non-Program Vehicles leased under the AESOP I Operating Lease manufactured by each such Eligible Non-Program Manufacturer that are subject to a Manufacturer Program and remain eligible for repurchase thereunder as of such date and (B) 10% of the aggregate Net Book Value of all Vehicles leased under the AESOP I Operating Lease as of such date and (b) 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 2011-1 DBRS Lowest Enhancement Rate” means, as of any date of determination, 25.00%.

 

“Series 2011-1 Demand Note” means each demand note made by a Demand Note Issuer, substantially in the form of Exhibit D, as amended, modified or restated from time to time.

 

“Series 2011-1 Demand Note Payment Amount” means, as of the Series 2011-1 Letter of Credit Termination Date, the aggregate amount of all proceeds of demands made on the Series 2011-1 Demand Notes pursuant to Section 2.5(b) or (c) that were deposited into the Series 2011-1 Distribution Account and paid to the Series 2011-1 Noteholders during the one year period ending on the Series 2011-1 Letter of Credit Termination Date; provided, however, that if an Event of Bankruptcy (or the occurrence of an event described in clause (a) of the definition thereof, without the lapse of a period of sixty (60) consecutive days) with respect to a Demand Note Issuer shall have occurred during such one year period, the Series 2011-1 Demand Note Payment Amount as of the Series 2011-1 Letter of Credit Termination Date shall equal the Series 2011-1 Demand Note Payment Amount as if it were calculated as of the date of such occurrence.

 

“Series 2011-1 Deposit Date” is defined in Section 2.2.

 

“Series 2011-1 Distribution Account” is defined in Section 2.9(a).

 

“Series 2011-1 Distribution Account Collateral” is defined in Section 2.9(d).

 

“Series 2011-1 Eligible Letter of Credit Provider” means a Person satisfactory to ABCR and the Demand Note Issuers and having, at the time of the issuance of the related Series 2011-1 Letter of Credit, a long-term senior unsecured debt rating (or the equivalent thereof) of at 

 

  

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least “A1” from Moody’s and at least “A (high)” from DBRS and a short term senior unsecured debt rating of at least “P-1” from Moody’s and at least “R-1” from DBRS that is (a) a commercial bank having total assets in excess of $500,000,000, (b) a finance company, insurance company or other financial institution that in the ordinary course of business issues letters of credit and has total assets in excess of $200,000,000 or (c) any other financial institution; provided, however, that if a Person is not a Series 2011-1 Letter of Credit Provider (or a letter of credit provider under the Supplement for any other Series of Notes), then such Person shall not be a Series 2011-1 Eligible Letter of Credit Provider until ABRCF has provided 10 days’ prior notice to the Rating Agencies that such Person has been proposed as a Series 2011-1 Letter of Credit Provider.

 

“Series 2011-1 Enhancement” means the Series 2011-1 Cash Collateral Account Collateral, the Series 2011-1 Letters of Credit, the Series 2011-1 Demand Notes, the Series 2011-1 Overcollateralization Amount and the Series 2011-1 Reserve Account Amount.

 

“Series 2011-1 Enhancement Amount” means, as of any date of determination, the sum of (i) the Series 2011-1 Overcollateralization Amount as of such date, (ii) the Series 2011-1 Letter of Credit Amount as of such date, (iii) the Series 2011-1 Available Reserve Account Amount as of such date and (iv) the amount of cash and Permitted Investments on deposit in the Series 2011-1 Collection Account (not including amounts allocable to the Series 2011-1 Accrued Interest Account) and the Series 2011-1 Excess Collection Account as of such date.

 

“Series 2011-1 Enhancement Deficiency” means, on any date of determination, the amount by which the Series 2011-1 Enhancement Amount is less than the Series 2011-1 Required Enhancement Amount as of such date.

 

“Series 2011-1 Excess Collection Account” is defined in Section 2.1(b).

 

“Series 2011-1 Expected Final Distribution Date” means the November 2013 Distribution Date.

 

“Series 2011-1 Final Distribution Date” means the November 2014 Distribution Date.

 

“Series 2011-1 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 2011-1 Interest Period shall commence on and include the Series 2011-1 Closing Date and end on and include June 19, 2011.

 

“Series 2011-1 Invested Amount” means, as of any date of determination, the sum of the Class A Invested Amount as of such date and the Class B Invested Amount as of such date.

 

“Series 2011-1 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 

 

  

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which shall be equal to the sum of the Series 2011-1 Invested Amount and the Series 2011-1 Overcollateralization Amount, determined during the Series 2011-1 Revolving Period as of the end of the Related Month (or, until the end of the initial Related Month, on the Series 2011-1 Closing Date), or, during the Series 2011-1 Controlled Amortization Period and the Series 2011-1 Rapid Amortization Period, as of the end of the Series 2011-1 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 2011-1 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 2011-1 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 2011-1 Lease Interest Payment Deficit” means, on any Distribution Date, an amount equal to the excess, if any, of (a) the aggregate amount of Interest Collections which pursuant to Section 2.2(a), (b), (c) or (d) would have been allocated to the Series 2011-1 Accrued Interest Account if all payments of Monthly Base Rent required to have been made under the Leases from and excluding the preceding Distribution Date to and including such Distribution Date were made in full over (b) the aggregate amount of Interest Collections which pursuant to Section 2.2(a), (b), (c) or (d) have been allocated to the Series 2011-1 Accrued Interest Account (excluding any amounts paid into the Series 2011-1 Accrued Interest Account pursuant to the proviso in Sections 2.2(c)(ii) and/or 2.2(d)(ii)) from and excluding the preceding Distribution Date to and including the Business Day immediately preceding such Distribution Date.

 

“Series 2011-1 Lease Payment Deficit” means either a Series 2011-1 Lease Interest Payment Deficit or a Series 2011-1 Lease Principal Payment Deficit.

 

“Series 2011-1 Lease Principal Payment Carryover Deficit” means (a) for the initial Distribution Date, zero and (b) for any other Distribution Date, the excess of (x) the Series 2011-1 Lease Principal Payment Deficit, if any, on the preceding Distribution Date over (y) the amount deposited in the Distribution Account on such preceding Distribution Date pursuant to Section 2.5(b) on account of such Series 2011-1 Lease Principal Payment Deficit.

 

“Series 2011-1 Lease Principal Payment Deficit” means on any Distribution Date the sum of (a) the Series 2011-1 Monthly Lease Principal Payment Deficit for such Distribution Date and (b) the Series 2011-1 Lease Principal Payment Carryover Deficit for such Distribution Date.

 

  

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“Series 2011-1 Letter of Credit” means an irrevocable letter of credit, if any, substantially in the form of Exhibit E issued by a Series 2011-1 Eligible Letter of Credit Provider in favor of the Trustee for the benefit of the Series 2011-1 Noteholders.

 

“Series 2011-1 Letter of Credit Amount” means, as of any date of determination, the lesser of (a) the sum of (i) the aggregate amount available to be drawn on such date under each Series 2011-1 Letter of Credit on which no draw has been made pursuant to Section 2.8(c), as specified therein, and (ii) if the Series 2011-1 Cash Collateral Account has been established and funded pursuant to Section 2.8, the Series 2011-1 Available Cash Collateral Account Amount on such date and (b) the aggregate outstanding principal amount of the Series 2011-1 Demand Notes on such date.

 

“Series 2011-1 Letter of Credit Expiration Date” means, with respect to any Series 2011-1 Letter of Credit, the expiration date set forth in such Series 2011-1 Letter of Credit, as such date may be extended in accordance with the terms of such Series 2011-1 Letter of Credit.

 

“Series 2011-1 Letter of Credit Liquidity Amount” means, as of any date of determination, the sum of (a) the aggregate amount available to be drawn on such date under each Series 2011-1 Letter of Credit on which no draw has been made pursuant to Section 2.8(c), as specified therein, and (b) if the Series 2011-1 Cash Collateral Account has been established and funded pursuant to Section 2.8, the Series 2011-1 Available Cash Collateral Account Amount on such date.

 

“Series 2011-1 Letter of Credit Provider” means the issuer of a Series 2011-1 Letter of Credit.

 

“Series 2011-1 Letter of Credit Termination Date” means the first to occur of (a) the date on which the Series 2011-1 Notes are fully paid and (b) the Series 2011-1 Termination Date.

 

“Series 2011-1 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; provided, however, that any event or condition of the type specified in clauses (a) through (g) of Article III shall not constitute a Series 2011-1 Limited Liquidation Event of Default if the Trustee shall have received the written consent of the Requisite Series 2011-1 Noteholders waiving the occurrence of such Series 2011-1 Limited Liquidation Event of Default.  The Trustee shall promptly (but in any event within two days) provide the Rating Agencies with written notice of such waiver.

 

“Series 2011-1 Liquidity Amount” means, as of any date of determination, the sum of (a) the Series 2011-1 Letter of Credit Liquidity Amount on such date and (b) the Series 2011-1 Available Reserve Account Amount on such date.

 

“Series 2011-1 Maximum Amount” means any of the Series 2011-1 Maximum Manufacturer Amounts, the Series 2011-1 Maximum Non-Eligible Manufacturer Amount, the Series 2011-1 Maximum Non-Program Vehicle Amount, the Series 2011-1 Maximum Specified States Amount or the Series 2011-1 Maximum Used Vehicle Amount.

 

  

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“Series 2011-1 Maximum Hyundai 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 2011-1 Maximum Individual Isuzu/Subaru Amount” means, as of any day, with respect to Isuzu or Subaru individually, an amount equal to 5% of the aggregate Net Book Value of all Vehicles leased under the Leases on such day.

 

“Series 2011-1 Maximum Kia 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.

 

“Series 2011-1 Maximum Manufacturer Amount” means, as of any day, any of the Series 2011-1 Maximum Mitsubishi Amount, the Series 2011-1 Maximum Individual Isuzu/Subaru Amount, the Series 2011-1 Maximum Hyundai Amount, the Series 2011-1 Maximum Kia Amount or the Series 2011-1 Maximum Suzuki Amount.

 

“Series 2011-1 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.

 

“Series 2011-1 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 2011-1 Maximum Non-Program Vehicle Amount” means, as of any day, an amount equal to the Series 2011-1 Maximum Non-Program Vehicle Percentage of the aggregate Net Book Value of all Vehicles leased under the Leases on such day.

 

“Series 2011-1 Maximum Non-Program Vehicle Percentage” means, as of any date of determination, the sum of (a) 85% and (b) a fraction, expressed as a percentage, the numerator of which is the aggregate Net Book Value of all Redesignated Vehicles manufactured by a Bankrupt Manufacturer or a Manufacturer with respect to which a Manufacturer Event of Default has occurred, and in each case leased under the AESOP I Operating Lease or the Finance Lease as of such date, and the denominator of which is the aggregate Net Book Value of all Vehicles leased under the Leases as of such date.

 

“Series 2011-1 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 2011-1 Maximum Suzuki 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 2011-1 Maximum Used Vehicle Amount” means, as of any day, an amount equal to 5% of the aggregate Net Book Value of all Vehicles leased under the Leases on such day.

 

  

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“Series 2011-1 Monthly Interest” means, with respect to any Series 2011-1 Interest Period, the sum of the Class A Monthly Interest and the Class B Monthly Interest, in each case with respect to such Series 2011-1 Interest Period.

 

“Series 2011-1 Monthly Lease Principal Payment Deficit” means, on any Distribution Date, an amount equal to the excess, if any, of (a) the aggregate amount of Principal Collections which pursuant to Section 2.2(a), (b), (c) or (d) would have been allocated to the Series 2011-1 Collection Account if all payments required to have been made under the Leases from and excluding the preceding Distribution Date to and including such Distribution Date were made in full over (b) the aggregate amount of Principal Collections which pursuant to Section 2.2(a), (b), (c) or (d) have been allocated to the Series 2011-1 Collection Account (without giving effect to any amounts paid into the Series 2011-1 Accrued Interest Account pursuant to the proviso in Sections 2.2(c)(ii) and/or 2.2(d)(ii)) from and excluding the preceding Distribution Date to and including the Business Day immediately preceding such Distribution Date.

 

“Series 2011-1 Moody’s Highest Enhanced Vehicle Percentage” means, as of any date of determination, a fraction, expressed as a percentage, (a) the numerator of which is the aggregate Net Book Value of all Vehicles leased under the AESOP I Operating Lease that are either not subject to a Manufacturer Program or not eligible for repurchase under a Manufacturer Program as of such date and (b) 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 2011-1 Moody’s Highest Enhancement Rate” means, as of any date of determination, the sum of (a) 33.25% and (b) the highest, for any calendar month within the preceding twelve calendar months, of the greater of (x) an amount (not less than zero) equal to 100% minus the Measurement Month Average for the immediately preceding Measurement Month and (y) an amount (not less than zero) equal to 100% minus the Market Value Average as of the Determination Date within such calendar month (excluding the Market Value Average for any Determination Date which has not yet occurred).

 

“Series 2011-1 Moody’s  Intermediate Enhanced Vehicle Percentage” means, as of any date of determination, 100% minus the sum of (a) the Series 2011-1 Moody’s Lowest Enhanced Vehicle Percentage and (b) the Series 2011-1 Moody’s Highest Enhanced Vehicle Percentage.

 

“Series 2011-1 Moody’s Intermediate Enhancement Rate” means, as of any date of determination, 30.75%.

 

“Series 2011-1 Moody’s Lowest Enhanced Vehicle Percentage” means, as of any date of determination, a fraction, expressed as a percentage, (a) the numerator of which is the sum, without duplication, of (1) the aggregate Net Book Value of all Program Vehicles leased under the AESOP I Operating Lease that are manufactured by Eligible Program Manufacturers having long-term senior unsecured debt ratings of “Baa2” or higher from Moody’s as of such date, (2) so long as any Eligible Non-Program Manufacturer has a long-term senior unsecured debt rating of “Baa2” or higher from Moody’s and no Manufacturer Event of Default has occurred and is continuing with respect to such Eligible Non-Program Manufacturer, the 

 

  

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aggregate Net Book Value of all Non-Program Vehicles leased under the AESOP I Operating Lease manufactured by each such Eligible Non-Program Manufacturer that are subject to a Manufacturer Program and remain eligible for repurchase thereunder as of such date and (3) the lesser of (A) the sum of (x) if as of such date any Eligible Program Manufacturer has a long-term senior unsecured debt rating of “Baa3” from Moody’s, the aggregate Net Book Value of all Program Vehicles leased under the AESOP I Operating Lease manufactured by each such Eligible Program Manufacturer as of such date and (y) if as of such date any Eligible Non-Program Manufacturer has a long-term senior unsecured debt rating of “Baa3” from Moody’s and no Manufacturer Event of Default has occurred and is continuing with respect to such Eligible Non-Program Manufacturer, the aggregate Net Book Value of all Non-Program Vehicles leased under the AESOP I Operating Lease manufactured by each such Eligible Non-Program Manufacturer that are subject to a Manufacturer Program and remain eligible for repurchase thereunder as of such date and (B) 10% of the aggregate Net Book Value of all Vehicles leased under the AESOP I Operating Lease as of such date and (b) 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 2011-1 Moody’s Lowest Enhancement Rate” means, as of any date of determination, 25.00%.

 

“Series 2011-1 Moody’s Required Enhancement Percentage” means, as of any date of determination, the sum of (i) the product of (A) the Series 2011-1 Moody’s Lowest Enhancement Rate as of such date and (B) the Series 2011-1 Moody’s Lowest Enhanced Vehicle Percentage as of such date, (ii) the product of (A) the Series 2011-1 Moody’s Intermediate Enhancement Rate as of such date and (B) the Series 2011-1 Moody’s  Intermediate Enhanced Vehicle Percentage as of such date, and (iii) the product of (A) the Series 2011-1 Moody’s Highest Enhancement Rate as of such date and (B) the Series 2011-1 Moody’s Highest Enhanced Vehicle Percentage as of such date.

 

“Series 2011-1 Note Owner” means each beneficial owner of a Series 2011-1 Note.

 

“Series 2011-1 Noteholder” means any Class A Noteholder, any Class B Noteholder or, if the Class C Notes have been issued, any Class C Noteholder.

 

“Series 2011-1 Notes” means, collectively, the Class A Notes, the Class B Notes and any Class C Notes, if issued.

 

“Series 2011-1 Overcollateralization Amount” means (i) as of any date on which no AESOP I Operating Lease Vehicle Deficiency exists, the Series 2011-1 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 2011-1 AESOP I Operating Lease Loan Agreement Borrowing Base as of such date over (y) the Series 2011-1 Invested Amount as of such date.

 

“Series 2011-1 Past Due Rent Payment” is defined in Section 2.2(g).

 

  

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“Series 2011-1 Percentage” means, as of any date of determination, a fraction, expressed as a percentage, the numerator of which is the Series 2011-1 Invested Amount as of such date and the denominator of which is the Aggregate Invested Amount as of such date.

 

“Series 2011-1 Principal Allocation” is defined in Section 2.2(a)(ii).

 

“Series 2011-1 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 2011-1 Notes and ending upon the earliest to occur of (i) the date on which the Series 2011-1 Notes are fully paid, (ii) the Series 2011-1 Final Distribution Date and (iii) the termination of the Indenture.

 

“Series 2011-1 Reimbursement Agreement” means any and each agreement providing for the reimbursement of a Series 2011-1 Letter of Credit Provider for draws under its Series 2011-1 Letter of Credit as the same may be amended, supplemented, restated or otherwise modified from time to time.

 

“Series 2011-1 Repurchase Amount” is defined in Section 5.1.

 

“Series 2011-1 Required AESOP I Operating Lease Vehicle Amount” means, as of any date of determination, the sum of the Series 2011-1 Invested Amount and the Series 2011-1 Required Overcollateralization Amount as of such date.

 

“Series 2011-1 Required Enhancement Amount” means, as of any date of determination, the sum of (i) the product of the Series 2011-1 Required Enhancement Percentage as of such date and the Series 2011-1 Invested Amount as of such date, (ii) the Series 2011-1 AESOP I Operating Lease Vehicle Percentage as of the immediately preceding Business Day of the excess, if any, of the Non-Program Vehicle Amount as of such date over the Series 2011-1 Maximum Non-Program Vehicle Amount as of such date, (iii) the Series 2011-1 AESOP I Operating Lease Vehicle Percentage as of the immediately preceding Business Day 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 2011-1 Maximum Mitsubishi Amount as of such date, (iv) the Series 2011-1 AESOP I Operating Lease Vehicle Percentage as of the immediately preceding Business Day of the excess, if any, of the aggregate Net Book Value of all Vehicles manufactured by Isuzu or Subaru, individually, and leased under the Leases as of such date over the Series 2011-1 Maximum Individual Isuzu/Subaru Amount as of such date, (v) the Series 2011-1 AESOP I Operating Lease Vehicle Percentage as of the immediately preceding Business Day of the excess, if any, of the aggregate Net Book Value of all Vehicles manufactured by Hyundai and leased under the Leases as of such date over the Series 2011-1 Maximum Hyundai Amount as of such date, (vi) the Series 2011-1 AESOP I Operating Lease Vehicle Percentage as of the immediately preceding Business Day of the excess, if any, of the aggregate Net Book Value of all Vehicles manufactured by Kia and leased under the Leases as of such date over the Series 2011-1 Maximum Kia Amount as of such date, (vii) the Series 2011-1 AESOP I Operating Lease Vehicle Percentage as of the immediately preceding Business Day of the excess, if any, of the aggregate Net Book Value of all Vehicles manufactured by Suzuki and leased under the Leases as of such date over the Series 2011-1 Maximum Suzuki Amount as of such date, (viii) the Series 2011-1 AESOP I Operating Lease Vehicle Percentage as of the

 

  

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immediately preceding Business Day of the excess, if any, of the Specified States Amount as of such date over the Series 2011-1 Maximum Specified States Amount as of such date, (ix) the Series 2011-1 AESOP I Operating Lease Vehicle Percentage as of the immediately preceding Business Day of the excess, if any, of the Non-Eligible Manufacturer Amount as of such date over the Series 2011-1 Maximum Non-Eligible Manufacturer Amount as of such date and (x) the Series 2011-1 AESOP I Operating Lease Vehicle Percentage as of the immediately preceding Business Day of the excess, if any, of the Net Book Value of all Vehicles leased under the Leases as of such date that were used vehicles at the time of acquisition over the Series 2011-1 Maximum Used Vehicle Amount as of such date.

 

“Series 2011-1 Required Enhancement Percentage” means, as of any date of determination, the greater of (i) the Series 2011-1 DBRS Enhancement Percentage as of such date and (ii) the Series 2011-1 Moody’s Required Enhancement Percentage as of such date.

 

“Series 2011-1 Required Liquidity Amount” means, as of any date of determination, an amount equal to the product of 1.75% and the Series 2011-1 Invested Amount as of such date.

 

“Series 2011-1 Required Overcollateralization Amount” means, as of any date of determination, the excess, if any, of the Series 2011-1 Required Enhancement Amount over the sum of (i) the Series 2011-1 Letter of Credit Amount as of such date, (ii) the Series 2011-1 Available Reserve Account Amount on such date and (iii) the amount of cash and Permitted Investments on deposit in the Series 2011-1 Collection Account (not including amounts allocable to the Series 2011-1 Accrued Interest Account) and the Series 2011-1 Excess Collection Account on such date.

 

“Series 2011-1 Required Reserve Account Amount” means, for any date of determination, an amount equal to the greater of (a) the excess, if any, of the Series 2011-1 Required Liquidity Amount as of such date over the Series 2011-1 Letter of Credit Liquidity Amount as of such date and (b) the excess, if any, of the Series 2011-1 Required Enhancement Amount over the Series 2011-1 Enhancement Amount (excluding therefrom the Series 2011-1 Available Reserve Account Amount and calculated after giving effect to any payments of principal to be made on the Series 2011-1 Notes) as of such date.

 

“Series 2011-1 Reserve Account” is defined in Section 2.7(a).

 

“Series 2011-1 Reserve Account Collateral” is defined in Section 2.7(d).

 

“Series 2011-1 Reserve Account Surplus” means, with respect to any Distribution Date, the excess, if any, of the Series 2011-1 Available Reserve Account Amount over the Series 2011-1 Required Reserve Account Amount on such Distribution Date.

 

“Series 2011-1 Revolving Period” means the period from and including the Series 2011-1 Closing Date to the earlier of (i) the commencement of the Series 2011-1 Controlled Amortization Period and (ii) the commencement of the Series 2011-1 Rapid Amortization Period.

 

  

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“Series 2011-1 Shortfall” means, on any Distribution Date, the sum of the Class A Shortfall and the Class B Shortfall on such Distribution Date.

 

“Series 2011-1 Termination Date” means the November 2014 Distribution Date.

 

“Series 2011-1 Trustee’s Fees” means, for any Distribution Date during the Series 2011-1 Rapid Amortization Period on which there exists a Series 2011-1 Lease Interest Payment Deficit, a portion of the fees payable to the Trustee in an amount equal to the product of (i) the Series 2011-1 Percentage as of the beginning of the Series 2011-1 Interest Period ending on the day preceding such Distribution Date and (ii) the fees owing to the Trustee under the Indenture; provided that the Series 2011-1 Trustee’s Fees in the aggregate for all Distribution Dates shall not exceed 1.1% of the Series 2011-1 Required AESOP I Operating Lease Vehicle Amount as of the last day of the Series 2011-1 Revolving Period.

 

“Series 2011-2 Notes” means the Series of Notes designated as the Series 2011-2 Notes.

 

“Series 2011-3 Notes” means the Series of Notes designated as the Series 2011-3 Notes.

 

“Supplement” is defined in the preamble hereto.

 

“Temporary Global Class A Note” is defined in Section 4.2.

 

“Temporary Global Class B Note” is defined in Section 4.2.

 

“Temporary Global Series 2011-1 Notes” is defined in Section 4.2.

 

“Termination Date Disbursement” means an amount drawn under a Series 2011-1 Letter of Credit pursuant to a Certificate of Termination Date Demand.

 

“Termination Disbursement” means an amount drawn under a Series 2011-1 Letter of Credit pursuant to a Certificate of Termination Demand.

 

“Trustee” is defined in the recitals hereto.

 

“Unpaid Demand Note Disbursement” means an amount drawn under a Series 2011-1 Letter of Credit pursuant to a Certificate of Unpaid Demand Note Demand.

 

(c)           Any amounts calculated by reference to the Series 2011-1 Invested Amount (or any component thereof) on any date shall, unless otherwise stated, be calculated after giving effect to any payment of principal made to the applicable Class A Noteholders and the applicable Class B Noteholders on such date.

 

  

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ARTICLE II

 

SERIES 2011-1 ALLOCATIONS

 

With respect to the Series 2011-1 Notes, the following shall apply:

 

Section 2.1. Establishment of Series 2011-1 Collection Account, Series 2011-1 Excess Collection Account and Series 2011-1 Accrued Interest Account.  (a)  All Collections allocable to the Series 2011-1 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 2011-1 Noteholders:  the Series 2011-1 Collection Account (such sub-account, the “Series 2011-1 Collection Account”), the Series 2011-1 Excess Collection Account (such sub-account, the “Series 2011-1 Excess Collection Account”) and the Series 2011-1 Accrued Interest Account (such sub-account, the “Series 2011-1 Accrued Interest Account”).

 

Section 2.2. Allocations with Respect to the Series 2011-1 Notes.  The net proceeds from the initial sale of the Class A Notes and the Class B Notes will be deposited into the Collection Account on the Series 2011-1 Closing Date and the net proceeds from any issuance of Class C Notes shall be deposited into the Collection Account on the Class C Notes Closing Date.  On each Business Day on which Collections are deposited into the Collection Account (each such date, a “Series 2011-1 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 2011-1 Revolving Period.  During the Series 2011-1 Revolving 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 each Series 2011-1 Deposit Date, all amounts deposited into the Collection Account as set forth below:

 

(i) allocate to the Series 2011-1 Collection Account an amount equal to the Series 2011-1 Invested Percentage (as of such day) of the aggregate amount of Interest Collections on such day.  All such amounts allocated to the Series 2011-1 Collection Account shall be further allocated to the Series 2011-1 Accrued Interest Account; and

 

(ii) allocate to the Series 2011-1 Excess Collection Account an amount equal to the Series 2011-1 Invested Percentage (as of such day) of the aggregate amount of Principal Collections on such day (for any such day, the “Series 2011-1 Principal Allocation”).

 

(b) Allocations of Collections During the Series 2011-1 Controlled Amortization Period.  With respect to the Series 2011-1 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 2011-1 Deposit Date, all amounts deposited into the Collection Account as set forth below:

 

 

  

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(i) allocate to the Series 2011-1 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 2011-1 Accrued Interest Account; and

 

(ii) allocate to the Series 2011-1 Collection Account an amount equal to the Series 2011-1 Principal Allocation for such day, which amount shall be used to make principal payments in respect of the Series 2011-1 Notes in accordance with Section 2.5, (A) first, in respect of the Class A Notes in an amount equal to the Class A Controlled Distribution Amount and (B) second, in respect of the Class B Notes in an amount equal to the Class B Controlled Distribution Amount, in each case with respect to the Related Month; provided, however, that if the Monthly Total Principal Allocation exceeds the sum of the Class A Controlled Distribution Amount and the Class B Controlled Distribution Amount, in each case with respect to the Related Month, then the amount of such excess shall be allocated to the Series 2011-1 Excess Collection Account.

 

(c) Allocations of Collections During the Series 2011-1 Rapid Amortization Period.  With respect to the Series 2011-1 Rapid Amortization Period, other than after the occurrence of an Event of Bankruptcy with respect to ABCR, any other Lessee or any Permitted Sublessee, 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 2011-1 Deposit Date, all amounts deposited into the Collection Account as set forth below:

 

(i) allocate to the Series 2011-1 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 2011-1 Accrued Interest Account; and

 

(ii) allocate to the Series 2011-1 Collection Account an amount equal to the Series 2011-1 Principal Allocation for such day, which amount shall be used in accordance with Section 2.5 to make principal payments in respect of the Class A Notes until the Class A Notes have been paid in full, and after the Class A Notes have been paid in full shall be used to make principal payments in respect of the Class B Notes until the Class B Notes have been paid in full; provided that if on any Determination Date (A) the Administrator determines that the amount anticipated to be available from Interest Collections allocable to the Series 2011-1 Notes and other amounts available pursuant to Section 2.3 to pay the sum of (x) the Series 2011-1 Monthly Interest for the next succeeding Distribution Date and (y) any unpaid Series 2011-1 Shortfall on such Distribution Date (together with interest on such Series 2011-1 Shortfall) will be less than the sum of (I) the Series 2011-1 Monthly Interest for such Distribution Date and (II) such Series 2011-1 Shortfall (together with interest thereon) and (B) the Series 2011-1 Enhancement Amount is greater than zero, then the Administrator shall direct the Trustee in writing to reallocate a portion of the Principal Collections allocated to the Series 2011-1 Notes during the Related Month equal to the lesser of such insufficiency and the Series 2011-1 Enhancement Amount to the Series 

 

  

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2011-1 Accrued Interest Account to be treated as Interest Collections on such Distribution Date.

 

(d) Allocations of Collections after the Occurrence of an Event of Bankruptcy.  After the occurrence of an Event of Bankruptcy with respect to ABCR, any other Lessee or any Permitted Sublessee, 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 2011-1 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 2011-1 Collection Account an amount equal to the Series 2011-1 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 for such day.  All such amounts allocated to the Series 2011-1 Collection Account shall be further allocated to the Series 2011-1 Accrued Interest Account; and

 

(ii) allocate to the Series 2011-1 Collection Account an amount equal to the Series 2011-1 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 in accordance with Section 2.5 to make principal payments in respect of the Class A Notes until the Class A Notes have been paid in full, and after the Class A Notes have been paid in full shall be used to make principal payments in respect of the Class B Notes until the Class B Notes have been paid in full; provided that if on any Determination Date (A) the Administrator determines that the amount anticipated to be available from Interest Collections allocable to the Series 2011-1 Notes and other amounts available pursuant to Section 2.3 to pay the sum of (x) the Series 2011-1 Monthly Interest for the next succeeding Distribution Date and (y) any unpaid Series 2011-1 Shortfall on such Distribution Date (together with interest on such Series 2011-1 Shortfall) will be less than the sum of (I) the Series 2011-1 Monthly Interest for such Distribution Date and (II) such Series 2011-1 Shortfall (together with interest thereon) and (B) the Series 2011-1 Enhancement Amount is greater than zero, then the Administrator shall direct the Trustee in writing to reallocate a portion of the Principal Collections allocated to the Series 2011-1 Notes during the Related Month equal to the lesser of such insufficiency and the Series 2011-1 Enhancement Amount to the Series 2011-1 Accrued Interest Account to be treated as Interest Collections on such Distribution Date.

 

(e) Series 2011-1 Excess Collection Account.  Amounts allocated to the Series 2011-1 Excess Collection Account on any Series 2011-1 Deposit Date will be (w) first, deposited in the Series 2011-1 Reserve Account in an amount up to the excess, if any, of the Series 2011-1 Required Reserve Account Amount for such date over the Series 2011-1 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, 

 

  

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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 and (B) 100% minus the Loan Payment Allocation Percentage with respect to the AESOP I Operating Lease Loan Agreement as of such date and (C) the amount of any remaining funds and (z) fourth, paid to ABRCF for any use permitted by the Related Documents including to make Loans under the Loan Agreements to the extent the Borrowers have requested Loans thereunder and Eligible Vehicles are available for financing thereunder; provided, however, that in the case of clauses (x), (y) and (z), that no Amortization Event, Series 2011-1 Enhancement Deficiency or AESOP I Operating Lease Vehicle Deficiency would result therefrom or exist immediately thereafter.  Upon the occurrence of an Amortization Event and once a Trust Officer has actual knowledge of the Amortization Event, funds on deposit in the Series 2011-1 Excess Collection Account will be withdrawn by the Trustee, deposited in the Series 2011-1 Collection Account and allocated as Principal Collections to reduce the Series 2011-1 Invested Amount on the immediately succeeding Distribution Date.

 

(f) Allocations From Other Series.  Amounts allocated to other Series of Notes that have been reallocated by ABRCF to the Series 2011-1 Notes (i) during the Series 2011-1 Revolving Period shall be allocated to the Series 2011-1 Excess Collection Account and applied in accordance with Section 2.2(e) and (ii) during the Series 2011-1  Controlled Amortization Period or the Series 2011-1 Rapid Amortization Period shall be allocated to the Series 2011-1 Collection Account and applied in accordance with Section 2.2(b) or 2.2(c), as applicable, to make principal payments in respect of the Series 2011-1 Notes.

 

(g) Past Due Rent Payments.  Notwithstanding the foregoing, if in the case of Section 2.2(a) or (b), after the occurrence of a Series 2011-1 Lease Payment Deficit, the Lessees shall make payments of Monthly Base Rent or other amounts payable by the Lessees under the Leases on or prior to the fifth Business Day after the occurrence of such Series 2011-1 Lease Payment Deficit (a “Past Due Rent Payment”), the Administrator shall direct the Trustee in writing pursuant to the Administration Agreement to allocate to the Series 2011-1 Collection Account an amount equal to the Series 2011-1 Invested Percentage as of the date of the occurrence of such Series 2011-1 Lease Payment Deficit of the Collections attributable to such Past Due Rent Payment (the “Series 2011-1 Past Due Rent Payment”).  The Administrator shall instruct the Trustee in writing pursuant to the Administration Agreement to withdraw from the Series 2011-1 Collection Account and apply the Series 2011-1 Past Due Rent Payment in the following order:

 

(i) if the occurrence of such Series 2011-1 Lease Payment Deficit resulted in one or more Lease Deficit Disbursements being made under the Series 2011-1 Letters of Credit, pay to each Series 2011-1 Letter of Credit Provider who made such a Lease Deficit Disbursement for application in accordance with the provisions of the applicable Series 2011-1 Reimbursement Agreement an amount equal to the lesser of (x) the unreimbursed amount of such Series 2011-1 Letter of Credit Provider’s Lease Deficit Disbursement and (y) such Series 2011-1 Letter of Credit Provider’s Pro Rata Share of the Series 2011-1 Past Due Rent Payment;

 

  

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(ii) if the occurrence of such Series 2011-1 Lease Payment Deficit resulted in a withdrawal being made from the Series 2011-1 Cash Collateral Account, deposit in the Series 2011-1 Cash Collateral Account an amount equal to the lesser of (x) the amount of the Series 2011-1 Past Due Rent Payment remaining after any payment pursuant to clause (i) above and (y) the amount withdrawn from the Series 2011-1 Cash Collateral Account on account of such Series 2011-1 Lease Payment Deficit;

 

(iii) if the occurrence of such Series 2011-1 Lease Payment Deficit resulted in a withdrawal being made from the Series 2011-1 Reserve Account pursuant to Section 2.3(d), deposit in the Series 2011-1 Reserve Account an amount equal to the lesser of (x) the amount of the Series 2011-1 Past Due Rent Payment remaining after any payments pursuant to clauses (i) and (ii) above and (y) the excess, if any, of the Series 2011-1 Required Reserve Account Amount over the Series 2011-1 Available Reserve Account Amount on such day;

 

(iv) allocate to the Series 2011-1 Accrued Interest Account the amount, if any, by which the Series 2011-1 Lease Interest Payment Deficit, if any, relating to such Series 2011-1 Lease Payment Deficit exceeds the amount of the Series 2011-1 Past Due Rent Payment applied pursuant to clauses (i), (ii) and (iii) above; and

 

(v) treat the remaining amount of the Series 2011-1 Past Due Rent Payment as Principal Collections allocated to the Series 2011-1 Notes in accordance with Section 2.2(a)(ii) or 2.2(b)(ii), as the case may be.

 

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 Section 2.3(a) below in respect of all funds available from Interest Collections processed since the preceding Distribution Date and allocated to the holders of the Series 2011-1 Notes.

 

(a) Note Interest with Respect to the Series 2011-1 Notes.  On each Determination Date, the Administrator shall instruct the Trustee and the Paying Agent in writing pursuant to the Administration Agreement as to the amount to be withdrawn and paid pursuant to Section 2.4 from the Series 2011-1 Accrued Interest Account to the extent funds are anticipated to be available from Interest Collections allocable to the Series 2011-1 Notes processed from but not including the preceding Distribution Date through the succeeding Distribution Date in respect of (i) an amount equal to the Class A Monthly Interest for the Series 2011-1 Interest Period ending on the day preceding the related Distribution Date, (ii) an amount equal to the amount of any unpaid Class A Shortfall as of the preceding Distribution Date (together with any accrued interest on such Class A Shortfall), (iii) an amount equal to the Class B Monthly Interest for the Series 2011-1 Interest Period ending on the day preceding the related Distribution Date and (iv) an amount equal to the amount of any unpaid Class B Shortfall as of the preceding Distribution Date (together with any accrued interest on such Class B Shortfall).  On the 

 

  

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following Distribution Date, the Trustee shall withdraw the amounts described in the first sentence of this Section 2.3(a) from the Series 2011-1 Accrued Interest Account and deposit such amounts in the Series 2011-1 Distribution Account.

 

(b) Lease Payment Deficit Notice.  On or before 3:00 p.m. (New York City time) on the Business Day immediately preceding each Distribution Date, the Administrator shall notify the Trustee of the amount of any Series 2011-1 Lease Payment Deficit, such notification to be in the form of Exhibit F (each a “Lease Payment Deficit Notice”).

 

(c) Draws on Series 2011-1 Letters of Credit For Series 2011-1 Lease Interest Payment Deficits.  If the Administrator determines on the Business Day immediately preceding any Distribution Date that on such Distribution Date there will exist a Series 2011-1 Lease Interest Payment Deficit, the Administrator shall, on or prior to 3:00 p.m. (New York City time) on such Business Day, instruct the Trustee in writing to draw on the Series 2011-1 Letters of Credit, if any, and, the Trustee shall, by 5:00 p.m. (New York City time) on such Business Day draw an amount as set forth in such notice equal to the least of (i) such Series 2011-1 Lease Interest Payment Deficit, (ii) the excess, if any, of the sum of (A) the amounts described in clauses (i) through (iv) of Section 2.3(a) above for such Distribution Date and (B) during the Series 2011-1 Rapid Amortization Period, the Series 2011-1 Trustee’s Fees for such Distribution Date, over the amounts available from the Series 2011-1 Accrued Interest Account and (iii) the Series 2011-1 Letter of Credit Liquidity Amount on the Series 2011-1 Letters of Credit by presenting to each Series 2011-1 Letter of Credit Provider a draft accompanied by a Certificate of Lease Deficit Demand and shall cause the Lease Deficit Disbursements to be deposited in the Series 2011-1 Distribution Account on such date; provided, however, that if the Series 2011-1 Cash Collateral Account has been established and funded, the Trustee shall withdraw from the Series 2011-1 Cash Collateral Account and deposit in the Series 2011-1 Distribution Account an amount equal to the lesser of (x) the Series 2011-1 Cash Collateral Percentage on such date of the least of the amounts described in clauses (i), (ii) and (iii) above and (y) the Series 2011-1 Available Cash Collateral Account Amount on such date and draw an amount equal to the remainder of such amount on the Series 2011-1 Letters of Credit.

 

(d) Withdrawals from Series 2011-1 Reserve Account.  If the Administrator determines on any Distribution Date that the amounts available from the Series 2011-1 Accrued Interest Account plus the amount, if any, to be drawn under the Series 2011-1 Letters of Credit and /or withdrawn from the Series 2011-1 Cash Collateral Account pursuant to Section 2.3(c) are insufficient to pay the sum of (A) the amounts described in clauses (i) through (iv) of Section 2.3(a) above on such Distribution Date and (B) during the Series 2011-1 Rapid Amortization Period, the Series 2011-1 Trustee’s Fees for such Distribution Date, the Administrator shall instruct the Trustee in writing to withdraw from the Series 2011-1 Reserve Account and deposit in the Series 2011-1 Distribution Account on such Distribution Date an amount equal to the lesser of the Series 2011-1 Available Reserve Account Amount and such insufficiency.  The Trustee shall withdraw such amount from the Series 2011-1 Reserve Account and deposit such amount in the Series 2011-1 Distribution Account.

 

(e) [RESERVED]

 

  

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(f) 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 2.4), if any, of the amounts available from the Series 2011-1 Accrued Interest Account and the Series 2011-1 Distribution Account, plus the amount, if any, drawn under the Series 2011-1 Letters of Credit and/or withdrawn from the Series 2011-1 Cash Collateral Account pursuant to Section 2.3(c) plus the amount, if any, withdrawn from the Series 2011-1 Reserve Account pursuant to Section 2.3(d) as follows:

 

(i) on each Distribution Date during the Series 2011-1 Revolving Period or the Series 2011-1 Controlled Amortization Period, (1) first, to the Administrator, an amount equal to the Series 2011-1 Percentage as of the beginning of the Series 2011-1 Interest Period ending on the day preceding such Distribution Date of the portion of the Monthly Administration Fee payable by ABRCF (as specified in clause (iii) of the definition thereof) for such Series 2011-1 Interest Period, (2) second, to the Trustee, an amount equal to the Series 2011-1 Percentage as of the beginning of such Series 2011-1 Interest Period of the fees owing to the Trustee under the Indenture for such Series 2011-1 Interest Period, (3) third to pay any Carrying Charges (other than Carrying Charges provided for above) to the Persons to whom such amounts are owed, an amount equal to the Series 2011-1 Percentage as of the beginning of such Series 2011-1 Interest Period of such Carrying Charges (other than Carrying Charges provided for above) for such Series 2011-1 Interest Period and (4) fourth, the balance, if any (“Excess Collections”), shall be withdrawn by the Paying Agent from the Series 2011-1 Collection Account and deposited in the Series 2011-1 Excess Collection Account; and

 

(ii) on each Distribution Date during the Series 2011-1 Rapid Amortization Period, (1) first, to the Trustee, an amount equal to the Series 2011-1 Percentage as of the beginning of such Series 2011-1 Interest Period ending on the day preceding such Distribution Date of the fees owing to the Trustee under the Indenture for such Series 2011-1 Interest Period, (2) second, to the Administrator, an amount equal to the Series 2011-1 Percentage as of the beginning of such Series 2011-1 Interest Period of the portion of the Monthly Administration Fee (as specified in clause (iii) of the definition thereof) payable by ABRCF for such Series 2011-1 Interest Period, (3) third, to pay any Carrying Charges (other than Carrying Charges provided for above) to the Persons to whom such amounts are owed, an amount equal to the Series 2011-1 Percentage as of the beginning of such Series 2011-1 Interest Period of such Carrying Charges (other than Carrying Charges provided for above) for such Series 2011-1 Interest Period and (4) fourth, so long as the Series 2011-1 Invested Amount is greater than the Monthly Total Principal Allocations for the Related Month, an amount equal to the excess of the Series 2011-1 Invested Amount over the Monthly Total Principal Allocations for the Related Month shall be treated as Principal Collections.

 

(g) Shortfalls.  (i)  If the amounts described in Section 2.3 are insufficient to pay the Class A Monthly Interest on any Distribution Date, payments of interest to the Class A 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, together with the aggregate unpaid amount of any such deficiencies with respect to all prior Distribution Dates, shall be referred to 

 

  

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as the “Class A Shortfall”.  Interest shall accrue on the Class A Shortfall at the Class A Note Rate.

 

(ii) If the amounts described in Section 2.3 are insufficient to pay the amounts described in clauses (i) and (ii) of Section 2.3(a) and the Class B Monthly Interest on any Distribution Date, payments of interest to the Class B 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 (which deficiency on any Distribution Date shall not exceed the Class B Monthly Interest for the Series 2011-1 Interest Period ended on the day preceding such Distribution Date), together with the aggregate unpaid amount of any such deficiencies with respect to all prior Distribution Dates, shall be referred to as the “Class B Shortfall”.  Interest shall accrue on the Class B Shortfall at the Class B Note Rate.

 

Section 2.4. Payment of Note Interest.  (a)  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 the following amounts in the following order of priority from amounts deposited into the Series 2011-1 Distribution Account pursuant to Section 2.3:

 

(i) first, to the Class A Noteholders, the amounts due to the Class A Noteholders described in Sections 2.3(a)(i) and (ii); and

 

(ii) second, to the Class B Noteholders the amounts due to the Class B Noteholders described in Sections 2.3(a)(iii) and (iv).

 

Section 2.5. Payment of Note Principal.  (a)  Monthly Payments During Controlled Amortization Period or Rapid Amortization Period.  On each Determination Date, commencing on the second Determination Date during the Series 2011-1 Controlled Amortization Period or the first Determination Date after the commencement of the Series 2011-1 Rapid Amortization Period, the Administrator shall instruct the Trustee and the Paying Agent in writing pursuant to the Administration Agreement and in accordance with this Section 2.5 as to (1) the amount allocated to the Series 2011-1 Notes during the Related Month pursuant to Section 2.2(b)(ii), (c)(ii) or (d)(ii), as the case may be, (2) any amounts to be drawn on the Series 2011-1 Demand Notes and/or on the Series 2011-1 Letters of Credit (or withdrawn from the Series 2011-1 Cash Collateral Account) pursuant to this Section 2.5 and (3) any amounts to be withdrawn from the Series 2011-1 Reserve Account pursuant to this Section 2.5 and deposited into the Series 2011-1 Distribution Account.  On the Distribution Date following each such Determination Date, the Trustee shall withdraw the amount allocated to the Series 2011-1 Notes during the Related Month pursuant to Section 2.2(b)(ii), (c)(ii) or (d)(ii), as the case may be, from the Series 2011-1 Collection Account and deposit such amount in the Series 2011-1 Distribution Account, to be paid to the holders of the Series 2011-1 Notes.

 

(b) Principal Draws on Series 2011-1 Letters of Credit.  If the Administrator determines on the Business Day immediately preceding any Distribution Date during the Series 2011-1 Rapid Amortization Period that on such Distribution Date there will exist a Series 2011-1 Lease Principal Payment Deficit, the Administrator shall instruct the Trustee in writing to draw on the Series 2011-1 Letters of Credit, if any, as provided below.  Upon receipt of a notice by the Trustee from the Administrator in respect of a Series 2011-1 Lease Principal Payment Deficit on 

 

  

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or prior to 3:00 p.m. (New York City time) on the Business Day immediately preceding a Distribution Date, the Trustee shall, by 5:00 p.m. (New York City time) on such Business Day draw an amount as set forth in such notice equal to the least of (i) such Series 2011-1 Lease Principal Payment Deficit, (ii) the Principal Deficit Amount for such Distribution Date and (iii) the Series 2011-1 Letter of Credit Liquidity Amount on the Series 2011-1 Letters of Credit by presenting to each Series 2011-1 Letter of Credit Provider a draft accompanied by a Certificate of Lease Deficit Demand and shall cause the Lease Deficit Disbursements to be deposited in the Series 2011-1 Distribution Account on such date; provided, however, that if the Series 2011-1 Cash Collateral Account has been established and funded, the Trustee shall withdraw from the Series 2011-1 Cash Collateral Account and deposit in the Series 2011-1 Distribution Account an amount equal to the lesser of (x) the Series 2011-1 Cash Collateral Percentage for such date of the lesser of the Series 2011-1 Lease Principal Payment Deficit and the Principal Deficit Amount for such Distribution Date and (y) the Series 2011-1 Available Cash Collateral Account Amount on such date and draw an amount equal to the remainder of such amount on the Series 2011-1 Letters of Credit.  Notwithstanding any of the preceding to the contrary, during the period after the date of the filing by any of the Lessees of a petition for relief under Chapter 11 of the Bankruptcy Code until the date on which each of the Lessees shall have resumed making all payments of the portion of Monthly Base Rent relating to Loan Interest required to be made under the AESOP I Operating Lease, the Administrator shall only instruct the Trustee to draw on the Series 2011-1 Letters of Credit (or withdraw from the Series 2011-1 Cash Collateral Account, if applicable) pursuant to this Section 2.5(b), and the Trustee shall only draw (or withdraw), an amount equal to the lesser of (i) the amount determined as provided in the preceding sentence and (ii) the excess, if any, of (x) the Series 2011-1 Liquidity Amount on such date over (y) the Series 2011-1 Required Liquidity Amount on such date.

 

(c) Final Distribution Date.  Each of the entire Class A Invested Amount and the entire Class B Invested Amount shall be due and payable on the Series 2011-1 Final Distribution Date.  In connection therewith:

 

(i) Demand Note Draw.  If the amount to be deposited in the Series 2011-1 Distribution Account in accordance with Section 2.5(a) together with any amounts to be deposited therein in accordance with Section 2.5(b) on the Series 2011-1 Final Distribution Date is less than the Series 2011-1 Invested Amount and there are any Series 2011-1 Letters of Credit on such date, then, prior to 10:00 a.m. (New York City time) on the second Business Day prior to the Series 2011-1 Final Distribution Date, the Administrator shall instruct the Trustee in writing to make a demand (a “Demand Notice”) substantially in the form attached hereto as Exhibit G on the Demand Note Issuers for payment under the Series 2011-1 Demand Notes in an amount equal to the lesser of (i) such insufficiency and (ii) the Series 2011-1 Letter of Credit Amount.  The Trustee shall, prior to 12:00 noon (New York City time) on the second Business Day preceding such Series 2011-1 Final Distribution Date deliver such Demand Notice to the Demand Note Issuers; provided, however, that if an Event of Bankruptcy (or the occurrence of an event described in clause (a) of the definition thereof, without the lapse of a period of 60 consecutive days) with respect to a Demand Note Issuer shall have occurred and be continuing, the Trustee shall not be required to deliver such Demand Notice to such Demand Note Issuer.  The Trustee shall cause the proceeds of any demand

 

  

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on the Series 2011-1 Demand Notes to be deposited into the Series 2011-1 Distribution Account.

 

(ii) Letter of Credit Draw.  In the event that either (x) on or prior to 10:00 a.m. (New York City time) on the Business Day immediately preceding the Series 2011-1 Final Distribution Date a Demand Notice has been transmitted by the Trustee to the Demand Note Issuers pursuant to clause (i) of this Section 2.5(c) and any Demand Note Issuer shall have failed to pay to the Trustee or deposit into the Series 2011-1 Distribution Account the amount specified in such Demand Notice in whole or in part or (y) due to the occurrence of an Event of Bankruptcy (or the occurrence of an event described in clause (a) of the definition thereof, without the lapse of a period of 60 consecutive days) with respect to one or more of the Demand Note Issuers, the Trustee shall not have delivered such Demand Notice to any Demand Note Issuer on the second Business Day preceding the Series 2011-1 Final Distribution Date, then, in the case of (x) or (y) the Trustee shall draw on the Series 2011-1 Letters of Credit by 12:00 noon (New York City time) on such Business Day an amount equal to the lesser of (a) the amount that the Demand Note Issuers so failed to pay under the Series 2011-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) and (b) the Series 2011-1 Letter of Credit Amount on such Business Day by presenting to each Series 2011-1 Letter of Credit Provider a draft accompanied by a Certificate of Unpaid Demand Note Demand; provided, however, that if the Series 2011-1 Cash Collateral Account has been established and funded, the Trustee shall withdraw from the Series 2011-1 Cash Collateral Account and deposit in the Series 2011-1 Distribution Account an amount equal to the lesser of (x) the Series 2011-1 Cash Collateral Percentage on such Business Day of the amount that the Demand Note Issuers so failed to pay under the Series 2011-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) and (y) the Series 2011-1 Available Cash Collateral Account Amount on such Business Day and draw an amount equal to the remainder of the amount that the Demand Note Issuers failed to pay under the Series 2011-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) on the Series 2011-1 Letters of Credit.  The Trustee shall deposit, or cause the deposit of, the proceeds of any draw on the Series 2011-1 Letters of Credit and the proceeds of any withdrawal from the Series 2011-1 Cash Collateral Account to be deposited in the Series 2011-1 Distribution Account.

 

(iii) Reserve Account Withdrawal.  If, after giving effect to the deposit into the Series 2011-1 Distribution Account of the amount to be deposited in accordance with Section 2.5(a) and the amounts described in clauses (i) and (ii) of this Section 2.5(c), the amount to be deposited in the Series 2011-1 Distribution Account with respect to the Series 2011-1 Final Distribution Date is or will be less than the Series 2011-1 Invested Amount, then, prior to 12:00 noon (New York City time) on the second Business Day prior to such Series 2011-1 Final Distribution Date, the Administrator shall instruct the Trustee in writing to with­draw from the Series 2011-1 Reserve Account, an amount equal to the lesser of the Series 2011-1 Available Reserve Account Amount and such remaining insufficiency and deposit it in the Series 2011-1 Distribution Account on such Series 2011-1 Final Distribution Date.

 

  

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(d) Principal Deficit Amount.  On each Distribution Date, other than the Series 2011-1 Final Distribution Date, on which the Principal Deficit Amount is greater than zero, amounts shall be transferred to the Series 2011-1 Distribution Account as follows:

 

(i) Demand Note Draw.  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 and there are any Series 2011-1 Letters of Credit on such date, prior to 10:00 a.m. (New York City time) on the second Business Day prior to such Distribution Date, the Administrator shall instruct the Trustee in writing to deliver a Demand Notice to the Demand Note Issuers demanding payment of an amount equal to the lesser of (A) the Principal Deficit Amount and (B) the Series 2011-1 Letter of Credit Amount.  The Trustee shall, prior to 12:00 noon (New York City time) on the second Business Day preceding such Distribution Date, deliver such Demand Notice to the Demand Note Issuers; provided, however, that if an Event of Bankruptcy (or the occurrence of an event described in clause (a) of the definition thereof, without the lapse of a period of 60 consecutive days) with respect to a Demand Note Issuer shall have occurred and be continuing, the Trustee shall not be required to deliver such Demand Notice to such Demand Note Issuer.  The Trustee shall cause the proceeds of any demand on the Series 2011-1 Demand Note to be deposited into the Series 2011-1 Distribution Account.

 

(ii) Letter of Credit Draw.  In the event that either (x) on or prior to 10:00 a.m. (New York City time) on the Business Day prior to such Distribution Date, any Demand Note Issuer shall have failed to pay to the Trustee or deposit into the Series 2011-1 Distribution Account the amount specified in such Demand Notice in whole or in part or (y) due to the occurrence of an Event of Bankruptcy (or the occurrence of an event described in clause (a) of the definition thereof, without the lapse of a period of 60 consecutive days) with respect to any Demand Note Issuer, the Trustee shall not have delivered such Demand Notice to any Demand Note Issuer on the second Business Day preceding such Distribution Date, then, in the case of (x) or (y) the Trustee shall on such Business Day draw on the Series 2011-1 Letters of Credit an amount equal to the lesser of (i) Series 2011-1 Letter of Credit Amount and (ii) the aggregate amount that the Demand Note Issuers failed to pay under the Series 2011-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) by presenting to each Series 2011-1 Letter of Credit Provider a draft accompanied by a Certificate of Unpaid Demand Note Demand; provided, however, that if the Series 2011-1 Cash Collateral Account has been established and funded, the Trustee shall withdraw from the Series 2011-1 Cash Collateral Account and deposit in the Series 2011-1 Distribution Account an amount equal to the lesser of (x) the Series 2011-1 Cash Collateral Percentage on such Business Day of the aggregate amount that the Demand Note Issuers so failed to pay under the Series 2011-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) and (y) the Series 2011-1 Available Cash Collateral Account Amount on such Business Day and draw an amount equal to the remainder of the aggregate amount that the Demand Note Issuers failed to pay under the Series 2011-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) on the Series 2011-1 Letters of Credit.  The Trustee shall deposit into, or cause the deposit of, the proceeds of any draw on the Series 2011-1 Letters of Credit and the 

 

  

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proceeds of any withdrawal from the Series 2011-1 Cash Collateral Account to be deposited in the Series 2011-1 Distribution Account.

 

(iii) Reserve Account Withdrawal.  If the Series 2011-1 Letter of Credit Amount will be less than the Principal Deficit Amount on any Distribution Date, then, prior to 12:00 noon (New York City time) on the second Business Day prior to such Distribution Date, the Administrator shall instruct the Trustee in writing to withdraw from the Series 2011-1 Reserve Account, an amount equal to the lesser of (x) the Series 2011-1 Available Reserve Account Amount and (y) the amount by which the Principal Deficit Amount exceeds the amounts to be deposited in the Series 2011-1 Distribution Account in accordance with clauses (i) and (ii) of this Section 2.5(d) and deposit it in the Series 2011-1 Distribution Account on such Distribution Date.

 

(e) Distributions.  (i)  Class A Notes.  On each Distribution Date occurring on or after the date a withdrawal is made from the Series 2011-1 Collection Account pursuant to Section 2.5(a) or amounts are deposited in the Series 2011-1 Distribution Account pursuant to Section 2.5(b), (c) or (d) the Paying Agent shall, in accordance with Section 6.1 of the Base Indenture, pay pro rata to each Class A Noteholder from the Series 2011-1 Distribution Account the amount deposited therein pursuant to Section 2.5(a), (b), (c) or (d), to the extent necessary to pay the Class A Controlled Amortization Amount during the Series 2011-1 Controlled Amortization Period or to the extent necessary to pay the Class A Invested Amount during the Series 2011-1 Rapid Amortization Period.

 

(ii)           Class B Notes.  On each Distribution Date occurring on or after the date a withdrawal is made from the Series 2011-1 Collection Account pursuant to Section 2.5(a) or amounts are deposited in the Series 2011-1 Distribution Account pursuant to Section 2.5(b), (c) or (d) the Paying Agent shall, in accordance with Section 6.1 of the Base Indenture, pay pro rata to each Class B Noteholder from the Series 2011-1 Distribution Account the amount deposited therein pursuant to Section 2.5(a), (b), (c) or (d) less the aggregate amount applied to make the payments required pursuant to Section 2.5(e)(i), to the extent necessary to pay the Class B Controlled Amortization Amount during the Series 2011-1 Controlled Amortization Period or to the extent necessary to pay the Class B Invested Amount during the Series 2011-1 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.

 

  

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Section 2.7. Series 2011-1 Reserve Account.  (a)  Establishment of Series 2011-1 Reserve Account.  ABRCF shall establish and maintain in the name of the Series 2011-1 Agent for the benefit of the Series 2011-1 Noteholders, or cause to be established and maintained, an account (the “Series 2011-1 Reserve Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2011-1 Noteholders.  The Series 2011-1 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 2011-1 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 (low)” by DBRS or “Baa2” by Moody’s, then ABRCF shall, within thirty (30) days of such reduction, establish a new Series 2011-1 Reserve Account with a new Qualified Institution.  If the Series 2011-1 Reserve Account is not maintained in accordance with the previous sentence, ABRCF shall establish a new Series 2011-1 Reserve Account, within ten (10) Business Days after obtaining knowledge of such fact, which complies with such sentence, and shall instruct the Series 2011-1 Agent in writing to transfer all cash and investments from the non-qualifying Series 2011-1 Reserve Account into the new Series 2011-1 Reserve Account.  Initially, the Series 2011-1 Reserve Account will be established with The Bank of New York Mellon Trust Company, N.A.

 

(b) Administration of the Series 2011-1 Reserve Account.  The Administrator may instruct the institution maintaining the Series 2011-1 Reserve Account to invest funds on deposit in the Series 2011-1 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 2011-1 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 2011-1 Reserve Account and any such Permitted Investments that constitute (i) physical property (and that is not either a United States security entitlement or a security entitlement) shall be physically delivered to the Trustee; (ii) United States security entitlements or security entitlements shall be controlled (as defined in Section 8-106 of the New York UCC) by the Trustee pending maturity or disposition, and (iii) uncertificated securities (and not United States security entitlements) shall be delivered to the Trustee by causing the Trustee to become the registered holder of such securities.  The Trustee shall, at the expense of ABRCF, take such action as is required to maintain the Trustee’s security interest in the Permitted Investments credited to the Series 2011-1 Reserve Account.  ABRCF shall not direct the Trustee to dispose of (or permit the disposal of) any Permitted Investments prior to the maturity thereof to the extent such disposal would result in a loss of the purchase price of such Permitted Investments.  In the absence of written investment instructions hereunder, funds on deposit in the Series 2011-1 Reserve Account shall remain uninvested.

 

(c) Earnings from Series 2011-1 Reserve Account.  All interest and earnings (net of losses and investment expenses) paid on funds on deposit in the Series 2011-1 Reserve Account shall be deemed to be on deposit therein and available for distribution.

 

  

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(d) Series 2011-1 Reserve Account Constitutes Additional Collateral for Series 2011-1 Notes.  In order to secure and provide for the repayment and payment of the ABRCF Obligations with respect to the Series 2011-1 Notes, ABRCF hereby grants a security interest in and assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 2011-1 Noteholders, all of ABRCF’s right, title and interest in and to the following (whether now or hereafter existing or acquired):  (i) the Series 2011-1 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 2011-1 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 2011-1 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 2011-1 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 2011-1 Reserve Account Collateral”).  The Trustee shall possess all right, title and interest in and to all funds on deposit from time to time in the Series 2011-1 Reserve Account and in all proceeds thereof, and shall be the only person authorized to originate entitlement orders in respect of the Series 2011-1 Reserve Account.  The Series 2011-1 Reserve Account Collateral shall be under the sole dominion and control of the Trustee for the benefit of the Series 2011-1 Noteholders.  The Series 2011-1 Agent hereby agrees (i) to act as the securities intermediary (as defined in Section 8-102(a)(14) of the New York UCC) with respect to the Series 2011-1 Reserve Account; (ii) that its jurisdiction as securities intermediary is New York; (iii) that each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Series 2011-1 Reserve Account shall be treated as a financial asset (as defined in Section 8-102(a)(9) of the New York UCC) and (iv) to comply with any entitlement order (as defined in Section 8-102(a)(8) of the New York UCC) issued by the Trustee.

 

(e) Series 2011-1 Reserve Account Surplus.  In the event that the Series 2011-1 Reserve Account Surplus on any Distribution Date, after giving effect to all withdrawals from the Series 2011-1 Reserve Account, is greater than zero, if no Series 2011-1 Enhancement Deficiency or AESOP I Operating Lease Vehicle Deficiency would result therefrom or exist thereafter, the Trustee, acting in accordance with the written instructions of the Administrator pursuant to the Administration Agreement, shall withdraw from the Series 2011-1 Reserve Account an amount equal to the Series 2011-1 Reserve Account Surplus and shall pay such amount to ABRCF.

 

(f) Termination of Series 2011-1 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 2011-1 Noteholders and payable from the Series 2011-1 Reserve Account as provided herein, shall withdraw from the Series 2011-1 Reserve Account all amounts on deposit therein for payment to ABRCF.

 

Section 2.8. Series 2011-1 Letters of Credit and Series 2011-1 Cash Collateral Account.  (a)   Series 2011-1 Letters of Credit and Series 2011-1 Cash Collateral Account 

 

  

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Constitute Additional Collateral for Series 2011-1 Notes.  In order to secure and provide for the repayment and payment of the ABRCF Obligations with respect to the Series 2011-1 Notes, ABRCF hereby grants a security interest in and assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 2011-1 Noteholders, all of ABRCF’s right, title and interest in and to the following (whether now or hereafter existing or acquired):  (i) each Series 2011-1 Letter of Credit; (ii) the Series 2011-1 Cash Collateral Account, including any security entitlement thereto; (iii) all funds on deposit in the Series 2011-1 Cash Collateral Account from time to time; (iv) all certificates and instruments, if any, representing or evidencing any or all of the Series 2011-1 Cash Collateral Account or the funds on deposit therein from time to time; (v) all investments made at any time and from time to time with monies in the Series 2011-1 Cash Collateral Account, whether constituting securities, instruments, general intangibles, investment property, financial assets or other property; (vi) all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for the Series 2011-1 Cash Collateral Account, the funds on deposit therein from time to time or the investments made with such funds; and (vii) all proceeds of any and all of the foregoing, including, without limitation, cash (the items in the foregoing clauses (ii) through (vii) are referred to, collectively, as the “Series 2011-1 Cash Collateral Account Collateral”).  The Trustee shall, for the benefit of the Series 2011-1 Noteholders, possess all right, title and interest in all funds on deposit from time to time in the Series 2011-1 Cash Collateral Account and in all proceeds thereof, and shall be the only person authorized to originate entitlement orders in respect of the Series 2011-1 Cash Collateral Account.  The Series 2011-1 Cash Collateral Account shall be under the sole dominion and control of the Trustee for the benefit of the Series 2011-1 Noteholders.  The Series 2011-1 Agent hereby agrees (i) to act as the securities intermediary (as defined in Section 8-102(a)(14) of the New York UCC) with respect to the Series 2011-1 Cash Collateral Account; (ii) that its jurisdiction as a securities intermediary is New York, (iii) that each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Series 2011-1 Cash Collateral Account shall be treated as a financial asset (as defined in Section 8-102(a)(9) of the New York UCC) and (iv) to comply with any entitlement order (as defined in Section 8-102(a)(8) of the New York UCC) issued by the Trustee.

 

(b) Series 2011-1 Letter of Credit Expiration Date.  If prior to the date which is ten (10) days prior to the then - scheduled Series 2011-1 Letter of Credit Expiration Date with respect to any Series 2011-1 Letter of Credit, excluding the amount available to be drawn under such Series 2011-1 Letter of Credit but taking into account each substitute Series 2011-1 Letter of Credit which has been obtained from a Series 2011-1 Eligible Letter of Credit Provider and is in full force and effect on such date, the Series 2011-1 Enhancement Amount would be equal to or more than the Series 2011-1 Required Enhancement Amount and the Series 2011-1 Liquidity Amount would be equal to or greater than the Series 2011-1 Required Liquidity Amount, then the Administrator shall notify the Trustee in writing no later than two (2) Business Days prior to such Series 2011-1 Letter of Credit Expiration Date of such determination.  If prior to the date which is ten (10) days prior to the then-scheduled Series 2011-1 Letter of Credit Expiration Date with respect to any Series 2011-1 Letter of Credit, excluding the amount available to be drawn under such Series 2011-1 Letter of Credit but taking into account a substitute Series 2011-1 Letter of Credit which has been obtained from a Series 2011-1 Eligible Letter of Credit Provider and is in full force and effect on such date, the Series 2011-1 Enhancement Amount would be less than the Series 2011-1 Required Enhancement Amount or the Series 2011-1 Liquidity 

 

  

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Amount would be less than the Series 2011-1 Required Liquidity Amount, then the Administrator shall notify the Trustee in writing no later than two (2) Business Days prior to such Series 2011-1 Letter of Credit Expiration Date of (x) the greater of (A) the excess, if any, of the Series 2011-1 Required Enhancement Amount over the Series 2011-1 Enhancement Amount, excluding the available amount under such expiring Series 2011-1 Letter of Credit but taking into account any substitute Series 2011-1 Letter of Credit which has been obtained from a Series 2011-1 Eligible Letter of Credit Provider and is in full force and effect, on such date, and (B) the excess, if any, of the Series 2011-1 Required Liquidity Amount over the Series 2011-1 Liquidity Amount, excluding the available amount under such expiring Series 2011-1 Letter of Credit but taking into account any substitute Series 2011-1 Letter of Credit which has been obtained from a Series 2011-1 Eligible Letter of Credit Provider and is in full force and effect, on such date, and (y) the amount available to be drawn on such expiring Series 2011-1 Letter of Credit on such date.  Upon receipt of such notice by the Trustee on or prior to 10:00 a.m. (New York City time) on any Business Day, the Trustee shall, by 12:00 noon (New York City time) on such Business Day (or, in the case of any notice given to the Trustee after 10:00 a.m. (New York City time), by 12:00 noon (New York City time) on the next following Business Day), draw the lesser of the amounts set forth in clauses (x) and (y) above on such expiring Series 2011-1 Letter of Credit by presenting a draft accompanied by a Certificate of Termination Demand and shall cause the Termination Disbursement to be deposited in the Series 2011-1 Cash Collateral Account.

 

If the Trustee does not receive the notice from the Administrator described in the first paragraph of this Section 2.8(b) on or prior to the date that is two (2) Business Days prior to each Series 2011-1 Letter of Credit Expiration Date, the Trustee shall, by 12:00 noon (New York City time) on such Business Day draw the full amount of such Series 2011-1 Letter of Credit by presenting a draft accompanied by a Certificate of Termination Demand and shall cause the Termination Disbursement to be deposited in the Series 2011-1 Cash Collateral Account.

 

(c) Series 2011-1 Letter of Credit Providers.  The Administrator shall notify the Trustee in writing within one (1) Business Day of becoming aware that (i) the long-term senior unsecured debt credit rating of any Series 2011-1 Letter of Credit Provider has fallen below “A (high)” as determined by DBRS or “A1” as determined by Moody’s or (ii) the short-term senior unsecured debt credit rating of any Series 2011-1 Letter of Credit Provider has fallen below “R-1” as determined by DBRS or “P-1” as determined by Moody’s.  At such time the Administrator shall also notify the Trustee of (i) the greater of (A) the excess, if any, of the Series 2011-1 Required Enhancement Amount over the Series 2011-1 Enhancement Amount, excluding the available amount under the Series 2011-1 Letter of Credit issued by such Series 2011-1 Letter of Credit Provider, on such date, and (B) the excess, if any, of the Series 2011-1 Required Liquidity Amount over the Series 2011-1 Liquidity Amount, excluding the available amount under such Series 2011-1 Letter of Credit, on such date, and (ii) the amount available to be drawn on such Series 2011-1 Letter of Credit on such date.  Upon receipt of such notice by the Trustee on or prior to 10:00 a.m. (New York City time) on any Business Day, the Trustee shall, by 12:00 noon (New York City time) on such Business Day (or, in the case of any notice given to the Trustee after 10:00 a.m. (New York City time), by 12:00 noon (New York City time) on the next following Business Day), draw on such Series 2011-1 Letter of Credit in an amount equal to the lesser of the amounts in clause (i) and clause (ii) of the immediately preceding sentence on such Business Day by presenting a draft accompanied by a Certificate of 

 

  

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Termination Demand and shall cause the Termination Disbursement to be deposited in the Series 2011-1 Cash Collateral Account.

 

(d) Termination Date Demands on the Series 2011-1 Letters of Credit.  Prior to 10:00 a.m. (New York City time) on the Business Day immediately succeeding the Series 2011-1 Letter of Credit Termination Date, the Administrator shall determine the Series 2011-1 Demand Note Payment Amount, if any, as of the Series 2011-1 Letter of Credit Termination Date and, if the Series 2011-1 Demand Note Payment Amount is greater than zero, instruct the Trustee in writing to draw on the Series 2011-1 Letters of Credit.  Upon receipt of any such notice by the Trustee on or prior to 11:00 a.m. (New York City time) on a Business Day, the Trustee shall, by 12:00 noon (New York City time) on such Business Day draw an amount equal to the lesser of (i) the Series 2011-1 Demand Note Payment Amount and (ii) the Series 2011-1 Letter of Credit Liquidity Amount on the Series 2011-1 Letters of Credit by presenting to each Series 2011-1 Letter of Credit Provider a draft accompanied by a Certificate of Termination Date Demand and shall cause the Termination Date Disbursement to be deposited in the Series 2011-1 Cash Collateral Account; provided, however, that if the Series 2011-1 Cash Collateral Account has been established and funded, the Trustee shall draw an amount equal to the product of (a) 100% minus the Series 2011-1 Cash Collateral Percentage and (b) the lesser of the amounts referred to in clause (i) and (ii) on such Business Day on the Series 2011-1 Letters of Credit as calculated by the Administrator and provided in writing to the Trustee.

 

(e) Draws on the Series 2011-1 Letters of Credit.  If there is more than one Series 2011-1 Letter of Credit on the date of any draw on the Series 2011-1 Letters of Credit pursuant to the terms of this Supplement, the Administrator shall instruct the Trustee, in writing, to draw on each Series 2011-1 Letter of Credit in an amount equal to the Pro Rata Share of the Series 2011-1 Letter of Credit Provider issuing such Series 2011-1 Letter of Credit of the amount of such draw on the Series 2011-1 Letters of Credit.

 

(f) Establishment of Series 2011-1 Cash Collateral Account.  On or prior to the date of any drawing under a Series 2011-1 Letter of Credit pursuant to Section 2.8(b), (c) or (d) above, ABRCF shall establish and maintain in the name of the Trustee for the benefit of the Series 2011-1 Noteholders, or cause to be established and maintained, an account (the “Series 2011-1 Cash Collateral Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2011-1 Noteholders.  The Series 2011-1 Cash Collateral Account shall be maintained (i) with a Qualified Institution, or (ii) as a segregated trust account with the corporate trust department of a depository institution or trust company having corporate trust powers and acting as trustee for funds deposited in the Series 2011-1 Cash Collateral Account; provided, however, that if at any time such Qualified Institution is no longer a Qualified Institution or the credit rating of any securities issued by such depository institution or trust company shall be reduced to below “BBB (low)” by DBRS or “Baa3” by Moody’s, then ABRCF shall, within thirty (30) days of such reduction, establish a new Series 2011-1 Cash Collateral Account with a new Qualified Institution or a new segregated trust account with the corporate trust department of a depository institution or trust company having corporate trust powers and acting as trustee for funds deposited in the Series 2011-1 Cash Collateral Account.  If a new Series 2011-1 Cash Collateral Account is established, ABRCF shall instruct the Trustee in writing to transfer all cash and investments from the non-qualifying Series 2011-1 Cash Collateral Account into the new Series 2011-1 Cash Collateral Account.

 

  

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(g) Administration of the Series 2011-1 Cash Collateral Account.  ABRCF may instruct (by standing instructions or otherwise) the institution maintaining the Series 2011-1 Cash Collateral Account to invest funds on deposit in the Series 2011-1 Cash Collateral Account from time to time in Permitted Investments; provided, however, that any such investment shall mature not later than the Business Day prior to the Distribution Date following the date on which such funds were received, unless any Permitted Investment held in the Series 2011-1 Cash Collateral Account is held with the Paying Agent, in which case such investment may mature on such Distribution Date so long as such funds shall be available for withdrawal on or prior to such Distribution Date.  All such Permitted Investments will be credited to the Series 2011-1 Cash Collateral Account and any such Permitted Investments that constitute (i) physical property (and that is not either a United States security entitlement or a security entitlement) shall be physically delivered to the Trustee; (ii) United States security entitlements or security entitlements shall be controlled (as defined in Section 8-106 of the New York UCC) by the Trustee pending maturity or disposition, and (iii) uncertificated securities (and not United States security entitlements) shall be delivered to the Trustee by causing the Trustee to become the registered holder of such securities.  The Trustee shall, at the expense of ABRCF, take such action as is required to maintain the Trustee’s security interest in the Permitted Investments credited to the Series 2011-1 Cash Collateral Account.  ABRCF shall not direct the Trustee to dispose of (or permit the disposal of) any Permitted Investments prior to the maturity thereof to the extent such disposal would result in a loss of the purchase price of such Permitted Investments.  In the absence of written investment instructions hereunder, funds on deposit in the Series 2011-1 Cash Collateral Account shall remain uninvested.

 

(h) Earnings from Series 2011-1 Cash Collateral Account.  All interest and earnings (net of losses and investment expenses) paid on funds on deposit in the Series 2011-1 Cash Collateral Account shall be deemed to be on deposit therein and available for distribution.

 

(i) Series 2011-1 Cash Collateral Account Surplus.  In the event that the Series 2011-1 Cash Collateral Account Surplus on any Distribution Date (or, after the Series 2011-1 Letter of Credit Termination Date, on any date) is greater than zero, the Trustee, acting in accordance with the written instructions of the Administrator, shall withdraw from the Series 2011-1 Cash Collateral Account an amount equal to the Series 2011-1 Cash Collateral Account Surplus and shall pay such amount:  first, to the Series 2011-1 Letter of Credit Providers to the extent of any unreimbursed drawings under the related Series 2011-1 Reimbursement Agreement, for application in accordance with the provisions of the related Series 2011-1 Reimbursement Agreement, and, second, to ABRCF any remaining amount.

 

(j) Termination of Series 2011-1 Cash Collateral Account.  Upon the termination of this Supplement in accordance with its terms, the Trustee, acting in accordance with the written instructions of the Administrator, after the prior payment of all amounts owing to the Series 2011-1 Noteholders and payable from the Series 2011-1 Cash Collateral Account as provided herein, shall withdraw from the Series 2011-1 Cash Collateral Account all amounts on deposit therein (to the extent not withdrawn pursuant to Section 2.8(i) above) and shall pay such amounts:  first, to the Series 2011-1 Letter of Credit Providers to the extent of any unreimbursed drawings under the related Series 2011-1 Reimbursement Agreement, for application in accordance with the provisions of the related Series 2011-1 Reimbursement Agreement, and, second, to ABRCF any remaining amount.

 

  

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Section 2.9. Series 2011-1 Distribution Account.  (a)  Establishment of Series 2011-1 Distribution Account.  ABRCF shall establish and maintain in the name of the Trustee for the benefit of the Series 2011-1 Noteholders, or cause to be established and maintained, an account (the “Series 2011-1 Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2011-1 Noteholders.  The Series 2011-1 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 2011-1 Distribution Account; provided, however, 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 (low)” by DBRS or “Baa3” by Moody’s, then ABRCF shall, within thirty (30) days of such reduction, establish a new Series 2011-1 Distribution Account with a new Qualified Institution.  If the Series 2011-1 Distribution Account is not maintained in accordance with the previous sentence, ABRCF shall establish a new Series 2011-1 Distribution Account, within ten (10) Business Days after obtaining knowledge of such fact, which complies with such sentence, and shall instruct the Series 2011-1 Agent in writing to transfer all cash and investments from the non-qualifying Series 2011-1 Distribution Account into the new Series 2011-1 Distribution Account.  Initially, the Series 2011-1 Distribution Account will be established with The Bank of New York Mellon Trust Company, N.A.

 

(b) Administration of the Series 2011-1 Distribution Account.  The Administrator may instruct the institution maintaining the Series 2011-1 Distribution Account to invest funds on deposit in the Series 2011-1 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 2011-1 Distribution Account is held with the Paying Agent, then such investment may mature on such Distribution Date and such funds shall be available for withdrawal on or prior to such Distribution Date.  All such Permitted Investments will be credited to the Series 2011-1 Distribution Account and any such Permitted Investments that constitute (i) physical property (and that is not either a United States security entitlement or a security entitlement) shall be physically delivered to the Trustee; (ii) United States security entitlements or security entitlements shall be controlled (as defined in Section 8-106 of the New York UCC) by the Trustee pending maturity or disposition, and (iii) uncertificated securities (and not United States security entitlements) shall be delivered to the Trustee by causing the Trustee to become the registered holder of such securities.  The Trustee shall, at the expense of ABRCF, take such action as is required to maintain the Trustee’s security interest in the Permitted Investments credited to the Series 2011-1 Distribution Account.  ABRCF shall not direct the Trustee to dispose of (or permit the disposal of) any Permitted Investments prior to the maturity thereof to the extent such disposal would result in a loss of the purchase price of such Permitted Investments.  In the absence of written investment instructions hereunder, funds on deposit in the Series 2011-1 Distribution Account shall remain uninvested.

 

(c) Earnings from Series 2011-1 Distribution Account.  All interest and earnings (net of losses and investment expenses) paid on funds on deposit in the Series 2011-1 Distribution Account shall be deemed to be on deposit and available for distribution.

 

  

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(d) Series 2011-1 Distribution Account Constitutes Additional Collateral for Series 2011-1 Notes.  In order to secure and provide for the repayment and payment of the ABRCF Obligations with respect to the Series 2011-1 Notes, ABRCF hereby grants a security interest in and assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 2011-1 Noteholders, all of ABRCF’s right, title and interest in and to the following (whether now or hereafter existing or acquired):  (i) the Series 2011-1 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 2011-1 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 2011-1 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 2011-1 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 2011-1 Distribution Account Collateral”).  The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Series 2011-1 Distribution Account and in and to all proceeds thereof, and shall be the only person authorized to originate entitlement orders in respect of the Series 2011-1 Distribution Account.  The Series 2011-1 Distribution Account Collateral shall be under the sole dominion and control of the Trustee for the benefit of the Series 2011-1 Noteholders.  The Series 2011-1 Agent hereby agrees (i) to act as the securities intermediary (as defined in Section 8-102(a)(14) of the New York UCC) with respect to the Series 2011-1 Distribution Account; (ii) that its jurisdiction as securities intermediary is New York, (iii) that each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Series 2011-1 Distribution Account shall be treated as a financial asset (as defined in Section 8-102(a)(9) of the New York UCC) and (iv) to comply with any entitlement order (as defined in Section 8-102(a)(8) of the New York UCC) issued by the Trustee.

 

Section 2.10. Series 2011-1 Accounts Permitted Investments.  ABRCF shall not, and shall not permit, funds on deposit in the Series 2011-1 Accounts to be invested in:

 

(i) Permitted Investments that do not mature at least one Business Day before the next Distribution Date;

 

(ii) demand deposits, time deposits or certificates of deposit with a maturity in excess of 360 days;

 

(iii) commercial paper which is not rated “P-1” by Moody’s;

 

(iv) money market funds or eurodollar time deposits which are not rated at least “P-1” by Moody’s;

 

(v) eurodollar deposits that are not rated “P-1” by Moody’s or that are with financial institutions not organized under the laws of a G-7 nation; or

 

  

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(vi) any investment, instrument or security not otherwise listed in clause (i) through (vi) of the definition of “Permitted Investments” in the Base Indenture.

 

Section 2.11. Series 2011-1 Demand Notes Constitute Additional Collateral for Series 2011-1 Notes.  In order to secure and provide for the repayment and payment of the ABRCF Obligations with respect to the Series 2011-1 Notes, ABRCF hereby grants a security interest in and assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 2011-1 Noteholders, all of ABRCF’s right, title and interest in and to the following (whether now or hereafter existing or acquired):  (i) the Series 2011-1 Demand Notes; (ii) all certificates and instruments, if any, representing or evidencing the Series 2011-1 Demand Notes; and (iii) all proceeds of any and all of the foregoing, including, without limitation, cash.  On the date hereof, ABRCF shall deliver to the Trustee, for the benefit of the Series 2011-1 Noteholders, each Series 2011-1 Demand Note, endorsed in blank.  The Trustee, for the benefit of the Series 2011-1 Noteholders, shall be the only Person authorized to make a demand for payments on the Series 2011-1 Demand Notes.

 

Section 2.12. Subordination of the Class B Notes and Class C Notes.  (a)  Notwithstanding anything to the contrary contained in this Supplement, the Indenture or in any other Related Document, the Class B Notes will be subordinate in all respects to the Class A Notes as and to the extent set forth in this Section 2.12(a).  No payments on account of principal shall be made with respect to the Class B Notes on any Distribution Date during the Series 2011-1 Controlled Amortization Period unless an amount equal to the Class A Controlled Distribution Amount for the Related Month shall have been paid to the Class A Noteholders and no payments on account of principal shall be made with respect to the Class B Notes during the Series 2011-1 Rapid Amortization Period or on the Series 2011-1 Final Distribution Date until the Class A Notes have been paid in full.  No payments on account of interest shall be made with respect to the Class B Notes on any Distribution Date until all payments of interest then due and payable with respect to the Class A Notes (including, without limitation, all accrued interest, all Class A Shortfall and all interest accrued on such Class A Shortfall) have been paid in full.

 

(b)  Notwithstanding anything to the contrary contained in this Supplement, the Indenture or in any other Related Document, the Class C Notes, if issued, will be subordinate in all respects to the Class A Notes and the Class B Notes as and to the extent set forth in this Section 2.12(b).  No payments on account of principal shall be made with respect to the Class C Notes on any Distribution Date during the Series 2011-1 Controlled Amortization Period unless an amount equal to the Class A Controlled Distribution Amount for the Related Month shall have been paid to the Class A Noteholders and an amount equal to the Class B Controlled Distribution Amount for the Related Month shall have been paid to the Class B Noteholders. No payments on account of principal shall be made with respect to the Class C Notes during the Series 2011-1 Rapid Amortization Period or on the Series 2011-1 Final Distribution Date until the Class A Notes and the Class B Notes have been paid in full.  No payments on account of interest shall be made with respect to the Class C Notes on any Distribution Date until all payments of interest then due and payable with respect to the Class A Notes and Class B Notes (including, without limitation, all accrued interest, all Class A Shortfall, all interest accrued on such Class A Shortfall, all Class B Shortfall and all interest accrued on such Class B Shortfall) have been paid in full.

 

  

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ARTICLE III

 

AMORTIZATION EVENTS

 

In addition to the Amortization Events set forth in Section 9.1 of the Base Indenture, any of the following shall be an Amortization Event with respect to the Series 2011-1 Notes and collectively shall constitute the Amortization Events set forth in Section 9.1(n) of the Base Indenture with respect to the Series 2011-1 Notes (without notice or other action on the part of the Trustee or any holders of the Series 2011-1 Notes):

 

(a) a Series 2011-1 Enhancement Deficiency shall occur and continue for at least two (2) Business Days; provided, however, that such event or condition shall not be an Amortization Event if during such two (2) Business Day period such Series 2011-1 Enhancement Deficiency shall have been cured in accordance with the terms and conditions of the Indenture and the Related Documents;

 

(b) the Series 2011-1 Liquidity Amount shall be less than the Series 2011-1 Required Liquidity Amount for at least two (2) Business Days; provided, however, that such event or condition shall not be an Amortization Event if during such two (2) Business Day period such insufficiency shall have been cured in accordance with the terms and conditions of the Indenture and the Related Documents;

 

(c) the Collection Account, the Series 2011-1 Collection Account, the Series 2011-1 Excess Collection Account or the Series 2011-1 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 of and interest on any Class of the Series 2011-1 Notes is not paid in full on or before the Series 2011-1 Expected Final Distribution Date;

 

(e) any Series 2011-1 Letter of Credit shall not be in full force and effect for at least two (2) Business Days and (x) either a Series 2011-1 Enhancement Deficiency would result from excluding such Series 2011-1 Letter of Credit from the Series 2011-1 Enhancement Amount or (y) the Series 2011-1 Liquidity Amount, excluding therefrom the available amount under such Series 2011-1 Letter of Credit, would be less than the Series 2011-1 Required Liquidity Amount;

 

(f) from and after the funding of the Series 2011-1 Cash Collateral Account, the Series 2011-1 Cash Collateral Account shall be subject to an injunction, estoppel or other stay or a Lien (other than Liens permitted under the Related Documents) for at least two (2) Business Days and either (x) a Series 2011-1 Enhancement Deficiency would result from excluding the Series 2011-1 Available Cash Collateral Account Amount from the Series 2011-1 Enhancement Amount or (y) the Series 2011-1 Liquidity Amount, excluding therefrom the Series 2011-1 Available Cash Collateral Amount, would be less than the Series 2011-1 Required Liquidity Amount; and

 

(g) an Event of Bankruptcy shall have occurred with respect to any Series 2011-1 Letter of Credit Provider or any Series 2011-1 Letter of Credit Provider 

 

  

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repudiates its Series 2011-1 Letter of Credit or refuses to honor a proper draw thereon and either (x) a Series 2011-1 Enhancement Deficiency would result from excluding such Series 2011-1 Letter of Credit from the Series 2011-1 Enhancement Amount or (y) the Series 2011-1 Liquidity Amount, excluding therefrom the available amount under such Series 2011-1 Letter of Credit, would be less than the Series 2011-1 Required Liquidity Amount.

 

 

ARTICLE IV

 

FORM OF SERIES 2011-1 NOTES

 

Section 4.1. Restricted Global Series 2011-1 Notes.  Each Class of the Series 2011-1 Notes to be issued in the United States will be issued in book-entry form and represented by one or more permanent global Notes in fully registered form without interest coupons (each, a “Restricted Global Class A Note” or a “Restricted Global Class B Note”, as the case may be), substantially in the form set forth in Exhibits A-1 and B-1, 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 such Class of the Series 2011-1 Notes represented thereby, with the Trustee as custodian for DTC, and registered in the name of Cede as DTC’s nominee, duly executed by ABRCF and authenticated by the Trustee in the manner set forth in Section 2.4 of the Base Indenture.

 

Section 4.2. Temporary Global Series 2011-1 Notes; Permanent Global Series 2011-1 Notes.  Each Class of the Series 2011-1 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 Class A Note” or a “Temporary Global Class B Note”, as the case may be, and collectively the “Temporary Global Series 2011-1 Notes”), substantially in the form set forth in Exhibits A-2 and B-2 which shall be deposited on behalf of the purchasers of such Class of the Series 2011-1 Notes represented thereby with a custodian for, and registered in the name of a nominee of DTC, for the account of Euroclear Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”) or for Clearstream Banking, société anonyme (“Clearstream”), duly executed by ABRCF and authenticated by the Trustee in the manner set forth in Section 2.4 of the Base Indenture.  Interests in each Temporary Global Series 2011-1 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 Class A Note” or a “Permanent Global Class B Note”, as the case may be, and collectively the “Permanent Global Series 2011-1 Notes”), substantially in the form of Exhibits A-3 and B-3 in accordance with the provisions of such Temporary Global Series 2011-1 Note and the Base Indenture (as modified by this Supplement).  Interests in a Permanent Global Series 2011-1 Note will be exchangeable for a definitive Series 2011-1 Note in accordance with the provisions of such Permanent Global Series 2011-1 Note and the Base Indenture (as modified by this Supplement).

 

  

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ARTICLE V

 

GENERAL

 

Section 5.1. Optional Repurchase.  The Series 2011-1 Notes shall be subject to repurchase by ABRCF at its option in accordance with Section 6.3 of the Base Indenture on any Distribution Date after the Series 2011-1 Invested Amount is reduced to an amount less than or equal to 10% of the sum of the Class A Initial Invested Amount, the Class B Initial Invested Amount and, if issued, the initial invested amount of the Class C Notes (the “Series 2011-1 Repurchase Amount”).  The repurchase price for any Series 2011-1 Note shall equal the aggregate outstanding principal balance of such Series 2011-1 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 5.2. Information.  The Trustee shall provide to the Series 2011-1 Noteholders, or their designated agent, copies of all information furnished to the Trustee or ABRCF pursuant to the Related Documents, as such information relates to the Series 2011-1 Notes or the Series 2011-1 Collateral.

 

Section 5.3. Exhibits.  The following exhibits attached hereto supplement the exhibits included in the Indenture.

 

	 	
Exhibit A-1:

	
Form of Restricted Global Class A Note

	 	
Exhibit A-2:

	
Form of Temporary Global Class A Note

	 	
Exhibit A-3:

	
Form of Permanent Global Class A Note

	 	
Exhibit B-1:

	
Form of Restricted Global Class B Note

	 	
Exhibit B-2:

	
Form of Temporary Global Class B Note

	 	
Exhibit B-3:

	
Form of Permanent Global Class B Note

	 	
Exhibit D:

	
Form of Series 2011-1 Demand Note

	 	
Exhibit E:

	
Form of Letter of Credit

	 	
Exhibit F:

	
Form of Lease Payment Deficit Notice

	 	
Exhibit G:

	
Form of Demand Notice

	 	
Exhibit H:

	
Form of Supplemental Indenture No. 3 to the Base Indenture

	 	
Exhibit I:

	
Form of Amendment to the Master Exchange Agreement

	 	
Exhibit J:

	
Form of Amendment to the AESOP I Operating Lease

	 	
Exhibit K:

	
Form of Amendment to the Finance Lease

	 	
Exhibit L:

	
Form of Amendment to the AESOP I Operating Lease Loan Agreement

	 	
Exhibit M:

	
Form of Amendment to the AESOP I Finance Lease Loan Agreement

	 	
Exhibit N:

	
Form of Amendment to the Administration Agreement

	 	  	  

Section 5.4. Ratification of Base Indenture.  As supplemented by this Supplement, the Base Indenture is in all respects ratified and confirmed and the Base Indenture 

 

  

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

 

Section 5.5. 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 5.6. Governing Law.  This Supplement shall be construed in accordance with the law of the State of New York, and the obligations, rights and remedies of the parties hereto shall be determined in accordance with such law.

 

Section 5.7. 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 or any other Related Document, such requirement shall be satisfied if such amendment or modification is consented to by the Requisite Series 2011-1 Noteholders; provided further, that, so long as (i) no Amortization Event has occurred and is continuing and (ii) the Rating Agency Consent Condition is met with respect to the outstanding Series 2011-1 Notes, ABRCF shall be able to (x) increase the Series 2011-1 Maximum Hyundai Amount up to an amount not to exceed 30% of the aggregate Net Book Value of all Vehicles leased under the Leases, (y) increase the Series 2011-1 Maximum Kia Amount up to an amount not to exceed 15% of the aggregate Net Book Value of all Vehicles leased under the Leases and (z) increase the Series 2011-1 Maximum Used Vehicle Amount up to an amount not to exceed 10% of the aggregate Net Book Value of all Vehicles leased under the Leases at any time without the consent of the Series 2011-1 Noteholders by giving written notice of such increase to the Trustee along with an Officer’s Certificate certifying that no Amortization Event has occurred and is continuing; provided further that, notwithstanding anything in this Section 5.7 or Article 8 or Article 12 of the Base Indenture to the contrary, this Supplement and any Related Documents relating solely to the Series 2011-1 Notes may be amended to provide for the issuance of any Class C Notes in accordance with Section 5.15 without the consent of any Class A Noteholder or any Class B Noteholder.

Section 5.8. 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 2011-1 Notes without the consent of the Requisite Series 2011-1 Noteholders.

 

Section 5.9. Notice to Rating Agencies.  The Trustee shall provide to 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.

 

Section 5.10. Capitalization of ABRCF.  ABRCF agrees that on the Series 2011-1 Closing Date it will have capitalization in an amount equal to or greater than 3% of the sum of (x) the Series 2011-1 Invested Amount and (y) the invested amount of the Series 2004-1 Notes, the Series 2005-2 Notes, the Series 2005-4 Notes, the Series 2007-2 Notes, the Series 2008-1 

 

  

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Notes, the Series 2009-1 Notes, the Series 2009-2 Notes, the Series 2009-3 Notes, the Series 2010-1 Notes, the Series 2010-2 Notes, the Series 2010-3 Notes, the Series 2010-4 Notes, the Series 2010-5 Notes, the Series 2010-6 Notes, the Series 2011-2 Notes and the Series 2011-3 Notes.

 

Section 5.11. Required Noteholders.Subject to Section 5.7 above, any action pursuant to Section 5.6, Section 8.13 or Article 9 of the Base Indenture that requires the consent of, or is permissible at the direction of, the Required Noteholders with respect to the Series 2011-1 Notes pursuant to the Base Indenture shall only be allowed with the consent of, or at the direction of, the Required Controlling Class Series 2011-1 Noteholders.  Any other action pursuant to any Related Document which requires the consent or approval of, or the waiver by, the Required Noteholders with respect to the Series 2011-1 Notes shall require the consent or approval of, or waiver by, the Requisite Series 2011-1 Noteholders; provided that, notwithstanding anything in this Section 5.11 or Article 8 or Article 12 of the Base Indenture to the contrary, any Related Documents relating solely to the Series 2011-1 Notes may be amended to provide for the issuance of any Class C Notes in accordance with Section 5.15 without the consent of any Class A Noteholder or any Class B Noteholder.

 

Section 5.12. Series 2011-1 Demand Notes.  Other than pursuant to a demand thereon pursuant to Section 2.5, ABRCF shall not reduce the amount of the Series 2011-1 Demand Notes or forgive amounts payable thereunder so that the outstanding principal amount of the Series 2011-1 Demand Notes after such reduction or forgiveness is less than the Series 2011-1 Letter of Credit Liquidity Amount.  ABRCF shall not agree to any amendment of the Series 2011-1 Demand Notes without first satisfying the Rating Agency Confirmation Condition and the Rating Agency Consent Condition.

 

Section 5.13. Termination of Supplement.  This Supplement shall cease to be of further effect when all outstanding Series 2011-1 Notes theretofore authenticated and issued have been delivered (other than destroyed, lost, or stolen Series 2011-1 Notes which have been replaced or paid) to the Trustee for cancellation, ABRCF has paid all sums payable hereunder, and, if the Series 2011-1 Demand Note Payment Amount on the Series 2011-1 Letter of Credit Termination Date was greater than zero, all amounts have been withdrawn from the Series 2011-1 Cash Collateral Account in accordance with Section 2.8(i).

 

Section 5.14. Noteholder Consent to Certain Amendments.  Each Series 2011-1 Noteholder, upon any acquisition of a Series 2011-1 Note, will be deemed to agree and consent to (i) the execution by ABRCF of a Supplemental Indenture to the Base Indenture substantially in the form of Exhibit H hereto, (ii) the execution of an amendment to the Master Exchange Agreement substantially in the form of Exhibit I hereto, (iii) the execution of an amendment to the AESOP I Operating Lease in the form of Exhibit J hereto, (iv) the execution of an amendment to the Finance Lease in the form of Exhibit K hereto, (v) the execution of an amendment to the AESOP I Operating Lease Loan Agreement in the form of Exhibit L hereto, (vi) the execution of an amendment to the AESOP I Finance Lease Loan Agreement in the form of Exhibit M hereto and (vii) the execution of an amendment to the Administration Agreement in the form of Exhibit N hereto.  Such deemed consent will apply to each proposed amendment set forth in Exhibits H, I, J, K, L, M and N individually, and the failure to adopt any of the amendments set forth therein will not revoke the consent with respect to any other amendment.

 

  

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Section 5.15. Issuance of Class C Notes  No Class C Notes shall be issued on the Series 2011-1 Closing Date.  On any date during the Series 2011-1 Revolving Period, ABRCF may issue Class C Notes, subject to satisfaction of the following conditions precedent:

 

(i) ABRCF and the Trustee shall have entered into an amendment to this Supplement (a) providing that the Class C Notes will bear a fixed rate of interest, determined on or prior the Class C Note Closing Date, (b) providing that the expected final payment date for the Class C Notes will be the Series 2011-1 Expected Final Distribution Date, (c) providing that the principal amount of the Class C Notes will be due and payable on the Series 2011-1 Final Distribution Date, (d) providing that the controlled amortization period with respect to the Class C Notes will be the Series 2011-1 Controlled Amortization Period and (e) providing for payment mechanics with respect to the Class C Notes substantially similar to those with respect to the Class A Notes and the Class B Notes (other than as set forth below) and consistent with Section 2.12 and such other provisions with respect to the Class C Notes as may be required for such issuance;

 

(ii) The Trustee shall have received a Company Request at least two (2) Business Days (or such shorter time as is acceptable to the Trustee) in advance of the proposed closing date for the issuance of the Class C Notes (the “Class C Notes Closing Date”) requesting that the Trustee authenticate and deliver the Class C Notes specified in such Company Request (such specified Class C Notes, the “Proposed Class C Notes”).

 

(iii) The Trustee shall have received a Company Order authorizing and directing the authentication and delivery of the Proposed Class C Notes by the Trustee and specifying the designation of the Proposed Class C Notes, the initial aggregate principal amount of the Proposed Class C Notes to be authenticated and the Note Rate with respect to the Proposed Class C Notes;

 

(iv) The Trustee shall have received written confirmation that the Rating Agency Confirmation Condition shall have been satisfied with respect to the issuance of the Proposed Class C Notes (including with respect to the Class A Notes and the Class B Notes);

 

(v) The Trustee shall have received an Officer’s Certificate of ABRCF dated as of the Class C Note Closing Date to the effect that (a) no Amortization Event with respect to the Series 2011-1 Notes, Aggregate Asset Amount Deficiency, Series 2011-1 Enhancement Deficiency, Loan Event of Default, AESOP I Operating Lease Vehicle Deficiency, Manufacturer Event of Default, Lease Event of Default, Potential Amortization Event with respect to the Series 2011-1 Notes, Potential Loan Event of Default, Potential Lease Event of Default, or Potential Manufacturer Event of Default is continu­ing or will occur as a result of the issuance of the Proposed Class C Notes, (b) the issuance of the Proposed Class C Notes will not result in any breach of any of the terms, conditions or provisions of or constitute a default under any indenture, mortgage, deed of trust or other agreement or instrument to which ABRCF is a party or by which it or its property is bound or any order of any court or administrative agency entered in any suit, action or other judicial or administrative proceeding to which ABRCF is a party or by which it or its property may be bound or to which it or its property may be subject, (c) all 

 

  

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conditions precedent provided in this Supplement and the Base Indenture with respect to the authentication and delivery of the Proposed Class C Notes have been complied with and (d) the issuance of the Proposed Class C Notes and any related amendments to this Supplement and any Related Document relating solely to the Series 2011-1 Notes will not reduce the availability of the Series 2011-1 Enhancement to support the payment of interest on or principal of the Class A Notes or the Class B Notes in any material respect;

 

(vi) No amendments to this Supplement or any Related Documents relating solely to the Series 2011-1 Notes in connection with the issuance of the Proposed Class C Notes may provide for (a) the application of amounts available under the Series 2011-1 Letters of Credit or the Series 2011-1 Reserve Account to support the payment of interest on or principal of the Class C Notes while any Class A Notes or Class B Notes remain outstanding, (b) any voting rights in respect of the Class C Notes for so long as any Class A Notes or Class B Notes are outstanding, other than with respect to any amendments to the Indenture or any Related Document pursuant to clauses (i) and (ii) of Section 12.2 of the Base Indenture, (c) the addition of any Amortization Event with respect to the Series 2011-1 Notes other than those related to payment defaults on the Class C Notes similar to those in respect of the Class A Notes or the Class B Notes and enhancement or liquidity deficiencies in respect of the credit enhancement supporting the Class C Notes similar to those in respect of the Class A Notes and Class B Notes or (d) the reallocation of Principal Collections allocable to the Series 2011-1 Notes to pay interest on the Class C Notes while the Class A Notes or Class B Notes remain outstanding.

 

(vii) The Trustee shall have received opinions of counsel substantially similar to those received in connection with the offering and sale of the Class A Notes and the Class B Notes, including, without limitation, opinions to the effect that:

 

(A)           (x) the Proposed Class C Notes will be treated as indebtedness of ABRCF for Federal and New York state income tax purposes and (y) the issuance of the Proposed Class C Notes will not result in any of the Class A Notes, the Class B Notes or any other outstanding Series of Notes failing to be characterized as debt for Federal or New York state income tax purposes;

 

(B)           all conditions precedent provided for in the Base Indenture and this Supplement with respect to the authentication and delivery of the Proposed Class C Notes has been complied with in all material respects; and

 

(C)           the Proposed Class C Notes have been duly authorized and executed and, when authenticated and delivered in accordance with the provisions of the Base Indenture and this Supplement, will constitute valid, binding and enforceable obligations of ABRCF entitled to the benefits of the Base Indenture and this Supplement, subject, in the case of enforcement, to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally and to general principles of equity.

 

Section 5.16. Confidential Information.(a)  The Trustee and each Series 2011-1 Note Owner agrees, by its acceptance and holding of a beneficial interest in a Series 2011-1 

 

  

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Note, to maintain the confidentiality of all Confidential Information in accordance with procedures adopted by the Trustee or such Series 2011-1 Note Owner in good faith to protect confidential information of third parties delivered to such Person; provided, that such Person may deliver or disclose Confidential Information to:  (i) such Person’s directors, trustees, officers, employees, agents, attorneys, independent or internal auditors and affiliates who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 5.16; (ii) such Person’s financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 5.16; (iii) any other Series 2011-1 Note Owner; (iv) any Person of the type that would be, to such Person’s knowledge, permitted to acquire an interest in the Series 2011-1 Notes in accordance with the requirements of the Indenture to which such Person sells or offers to sell any such Series 2011-1 Note or any part thereof and that agrees to hold confidential the Confidential Information substantially in accordance with this Section 5.16 (or in accordance with such other confidentiality procedures as are acceptable to ABRCF); (v) any federal or state or other regulatory, governmental or judicial authority having jurisdiction over such Person; (vi) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about the investment portfolio of such Person, (vii) any reinsurers or liquidity or credit providers that agree to hold confidential the Confidential Information substantially in accordance with this Section 5.16 (or in accordance with such other confidentiality procedures as are acceptable to ABRCF); (viii) any other Person with the consent of ABRCF; or (ix) any other Person to which such delivery or disclosure may be necessary or appropriate (A) to effect compliance with any law, rule, regulation, statute or order applicable to such Person, (B) in response to any subpoena or other legal process upon prior notice to ABRCF (unless prohibited by applicable law, rule, order or decree or other requirement having the force of law), (C) in connection with any litigation to which such Person is a party upon prior notice to ABRCF (unless prohibited by applicable law, rule, order or decree or other requirement having the force of law) or (D) if an Amortization Event with respect to the Series 2011-1 Notes has occurred and is continuing, to the extent such Person may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under the Series 2011-1 Notes, the Indenture or any other Related Document; and provided, further, however, that delivery to any Series 2011-1 Note Owner of any report or information required by the terms of the Indenture to be provided to such Series 2011-1 Note Owner shall not be a violation of this Section 5.16.  Each Series 2011-1 Note Owner agrees, by acceptance of a beneficial interest in a Series 2011-1 Note, except as set forth in clauses (v), (vi) and (ix) above, that it shall use the Confidential Information for the sole purpose of making an investment in the Series 2011-1 Notes or administering its investment in the Series 2011-1 Notes.  In the event of any required disclosure of the Confidential Information by such Series 2011-1 Note Owner, such Series 2011-1 Note Owner agrees to use reasonable efforts to protect the confidentiality of the Confidential Information.

 

(b) For the purposes of this Section 5.16, “Confidential Information” means information delivered to the Trustee or any Series 2011-1 Note Owner by or on behalf of ABRCF in connection with and relating to the transactions contemplated by or otherwise pursuant to the Indenture and the Related Documents; provided, that such term does not include information that:  (i) was publicly known or otherwise known to the Trustee or such Series 2011-1 Note Owner prior to the time of such disclosure; (ii) subsequently becomes publicly known 

 

  

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through no act or omission by the Trustee, any Series 2011-1 Note Owner or any person acting on behalf of the Trustee or any Series 2011-1 Note Owner; (iii) otherwise is known or becomes known to the Trustee or any Series 2011-1 Note Owner other than (x) through disclosure by ABRCF or (y) as a result of the breach of a fiduciary duty to ABRCF or a contractual duty to ABRCF; or (iv) is allowed to be treated as non-confidential by consent of ABRCF.

 

Section 5.17. Capitalized Cost Covenant.  ABRCF hereby agrees that it shall not permit the aggregate Capitalized Cost for all Vehicles purchased in any model year that are not subject to a Manufacturer Program to exceed 85% of the aggregate MSRP (Manufacturer Suggested Retail Price) of all such Vehicles; provided, however, that ABCRF shall not modify the customary buying patterns or purchasing criteria used by the Administrator and its Affiliates with respect to the Vehicles if the primary purpose of such modification is to comply with this covenant.

 

Section 5.18. Further Limitation of Liability.Notwithstanding anything in this Supplement to the contrary, in no event shall the Trustee or its directors, officers, agents or employees be liable under this Supplement for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits), even if the Trustee or its directors, officers, agents or employees have been advised of the likelihood of such loss or damage and regardless of the form of action.

Section 5.19. Series 2011-1 Agent.The Series 2011-1 Agent shall be entitled to the same rights, benefits, protections, indemnities and immunities hereunder as are granted to the Trustee under the Base Indenture as if set forth fully herein.

 

Section 5.20. Force Majeure.In no event shall the Trustee be liable for any failure or delay in the performance of its obligations under this Supplement because of circumstances beyond the Trustee’s control, including, but not limited to, a failure, termination, suspension of a clearing house, securities depositary, settlement system or central payment system in any applicable part of the world or acts of God, flood, war (whether declared or undeclared), civil or military disturbances or hostilities, nuclear or natural catastrophes, political unrest, explosion, severe weather or accident, earthquake, terrorism, fire, riot, labor disturbances, strikes or work stoppages for any reason, embargo, government action, including any laws, ordinances, regulations or the like (whether domestic, federal, state, county or municipal or foreign) which delay, restrict or prohibit the providing of the services contemplated by this Supplement, or the unavailability of communications or computer facilities, the failure of equipment or interruption of communications or computer facilities, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility, or any other causes beyond the Trustee’s control whether or not of the same class or kind as specified above.

 

Section 5.21. Waiver of Jury Trial, etc.EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SUPPLEMENT, THE SERIES 2011-1 NOTES, THE SERIES 2011-1 DEMAND NOTES, THE SERIES 2011-1 LETTER OF CREDIT AND ANY OTHER RELATED DOCUMENTS EXECUTED IN CONNECTION WITH THE 

 

  

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ISSUANCE OF THE SERIES 2011-1 NOTES, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE PARTIES HERETO.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS SUPPLEMENT.

 

Section 5.22. Submission to Jurisdiction. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, STATE OF NEW YORK, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENT, THE SERIES 2011-1 NOTES, THE SERIES 2011-1 DEMAND NOTES, THE SERIES 2011-1 LETTER OF CREDIT AND ANY OTHER RELATED DOCUMENTS EXECUTED IN CONNECTION WITH THE ISSUANCE OF THE SERIES 2011-1 NOTES AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT.  EACH OF THE PARTIES HERETO EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION EACH MAY NOW OR HEREAFTER HAVE, TO THE LAYING OF VENUE IN ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AS WELL AS ANY RIGHT EACH MAY NOW OR HEREAFTER HAVE, TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED, TO ANOTHER COURT ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE.  NOTHING CONTAINED HEREIN SHALL PRECLUDE ANY PARTY HERETO FROM BRINGING AN ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENT, THE SERIES 2011-1 NOTES, THE SERIES 2011-1 DEMAND NOTES, THE SERIES 2011-1 LETTER OF CREDIT AND ANY OTHER RELATED DOCUMENTS EXECUTED IN CONNECTION WITH THE ISSUANCE OF THE SERIES 2011-1 NOTES IN ANY OTHER COUNTRY, STATE OR PLACE HAVING JURISDICTION OVER SUCH ACTION OR PROCEEDING.

 

  

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IN WITNESS WHEREOF, ABRCF 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.

 

 

	
  

	
AVIS BUDGET RENTAL CAR FUNDING (AESOP) LLC

 

	
By:

	  /s/ Rochelle Tarlowe

	
  

	
Name: Rochelle Tarlowe

	
  

	
Title:   Vice President and Treasurer

  

  

  

 

	
  

	
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

 

 

	
  

	
By:

	
/s/ Sally R. Tokich

	 

	
  

	
Name:

	
Sally R. Tokich

	
  

	
Title:    Senior Associate

 

 

	
  

	
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Series 2011-1 Agent

 

	
  

	
By:

	
/s/ Sally R. Tokich

	 

	
  

	
 

	
Name:  Sally R. Tokich

	
  

	
Title:    Senior Associate

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