CENDANT RENTAL CAR FUNDING (AESOP) LLC, as Issuer and THE BANK OF NEW YORK, as Trustee and Series 2006-1 Agent _____________________ SERIES 2006-1 SUPPLEMENT dated as of January19, 2006 to SECOND AMENDED AND RESTATED BASE INDENTURE dated as of June 3, 2004 _____________________ Table of Contents

    NOW, THEREFORE, the parties hereto agree as follows:

    “Series 2004-2 Notes” means the Series of Notes designated as the Series 2004-2 Notes.

 

    “Series 2006-1 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 2006-1 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 2006-1 Collection Account (without giving effect to any amounts paid into the Series 2006-1 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 such Distribution Date.

ARTICLE II

SERIES 2006-1 ALLOCATIONS

 

    Section 2.1  Establishment of Series 2006-1 Collection Account, Series 2006-1 Excess Collection Account and Series 2006-1 Accrued Interest Account.  (a)  All Collections allocable to the Series 2006-1 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 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider:  the Series 2006-1 Collection Account (such sub-account, the “Series 2006-1 Collection Account”), the Series 2006-1 Excess Collection Account (such sub-account, the “Series 2006-1 Excess Collection Account”) and the Series 2006-1 Accrued Interest Account (such sub-account, the “Series 2006-1 Accrued Interest Account”).

 

    Section 2.2  Allocations with Respect to the Series 2006-1 Notes.  The net proceeds from the initial sale of the Series 2006-1 Notes will be deposited into the Collection Account.  On each Business Day on which Col­lections are deposited into the Collection Account (each such date, a “Series 2006-1 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 2006-1 Revolving Period.  During the Series 2006-1 Revolving Period, the Administrator will direct the Trustee in writing pursuant to the Administration Agree­ment to allocate on each day, prior to 11:00 a.m. (New York City time) on each Series 2006-1 Deposit Date, all amounts deposited into the Collection Account as set forth below:

 

        (i)                  allocate to the Series 2006-1 Collection Account an amount equal to the sum of (A) the Series 2006-1 Invest­ed Percentage (as of such day) of the aggregate amount of Interest Collections on such day and (B) any amounts received by the Trustee on such day in respect of the Series 2006-1 Interest Rate Swaps.  All such amounts allocated to the Series 2006-1 Collec­tion Account shall be further allocated to the Series 2006-1 Accrued Interest Account; and

 

        (ii)                allocate to the Series 2006-1 Excess Collection Account an amount equal to the Series 2006-1 Invested Percentage (as of such day) of the aggregate amount of Principal Collections on such day (for any such day, the “Series 2006-1 Principal Allocation”); provided, however, if a Waiver Event shall have occurred, then such allocation shall be modified as provided in Article IV.

 

 

    (b)               Allocations of Collections During the Series 2006-1 Controlled Amortiza­tion Period.  With respect to the Series 2006-1 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 2006-1 Deposit Date, all amounts deposited into the Collection Account as set forth below:

 

        (i)                  allocate to the Series 2006-1 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 2006-1 Accrued Interest Account; and

 

        (ii)                allocate to the Series 2006-1 Collection Account an amount equal to the Series 2006-1 Principal Allocation for such day, which amount shall be used to make principal payments in respect of the Series 2006-1 Notes; provided, however, that if the Monthly Total Principal Allocation exceeds the Series 2006-1 Controlled Distribution Amount, then the amount of such excess shall be allo­cated to the Series 2006-1 Excess Collection Account; and provided, further, that if a Waiver Event shall have occurred, then such allocation shall be modified as provided in Article IV.

 

    (c)                Allocations of Collections During the Series 2006-1 Rapid Amortization Period.  With respect to the Series 2006-1 Rapid Amortization Period, other than after the occurrence of an Event of Bankruptcy with respect to CCRG, 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 2006-1 Deposit Date, all amounts deposited into the Collection Account as set forth below:

 

        (i)                  allocate to the Series 2006-1 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 2006-1 Accrued Interest Account; and

 

        (ii)                allocate to the Series 2006-1 Collection Account an amount equal to the Series 2006-1 Princi­pal Allocation for such day, which amount shall be used to make principal payments in respect of the Series 2006-1 Notes until the Series 2006-1 Invested Amount is paid in full; provided that if on any Determination Date (A) the Administrator determines that the amount anticipated to be available from Interest Collections allocable to the Series 2006-1 Notes, any amounts payable to the Trustee in respect of the Series 2006-1 Interest Rate Swaps and other amounts available pursuant to Section 2.3 to pay Series 2006-1 Adjusted Monthly Interest and any Fixed Rate Payments for the next succeeding Distribution Date will be less than the sum of the Series 2006-1 Adjusted Monthly Interest and the Fixed Rate Payments for such Distribution Date and (B) the Series 2006-1 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 2006-1 Notes during the Related Month equal to the lesser of such insufficiency and the Series 2006-1 Enhancement Amount to

 

 

 

the Series 2006-1 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 CCRG, 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 2006-1 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 2006-1 Collec­tion Account an amount equal to the sum of (A) the Series 2006-1 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 and (B) any amounts received by the Trustee in respect of the Series 2006-1 Interest Rate Swaps on such day.  All such amounts allocated to the Series 2006-1 Collection Account shall be further allocated to the Series 2006-1 Accrued Interest Account;

 

        (ii)                allocate to the Series 2006-1 Col­lection Account an amount equal to the Series 2006-1 AESOP I Operating Lease Vehicle Percentage as of the date of the occurrence of such Event of Bankruptcy of the aggregate amount of Principal Collections made under the AESOP I Operating Lease Loan Agree­ment, which amount shall be used to make principal payments in respect of the Series 2006-1 Notes until the Series 2006-1 Invested Amount is paid in full; provided that if on any Determination Date (A) the Administrator determines that the amount anticipated to be available from Interest Collections allocable to the Series 2006-1 Notes, any amounts payable to the Trustee in respect of Series 2006-1 Interest Rate Swaps and other amounts available pursuant to Section 2.3 to pay Series 2006-1 Adjusted Monthly Interest and any Fixed Rate Payments for the next succeeding Distribution Date will be less than the sum of the Series 2006-1 Adjusted Monthly Interest and the Fixed Rate Payments for such Distribution Date and (B) the Series 2006-1 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 2006-1 Notes during the Related Month equal to the lesser of such insufficiency and the Series 2006-1 Enhancement Amount to the Series 2006-1 Accrued Interest Account to be treated as Interest Collections on such Distribution Date.

 

    (e)                Series 2006-1 Excess Collection Account.  Amounts allocated to the Series 2006-1 Excess Collection Account on any Series 2006-1 Deposit Date will be (w) first, deposited in the Series 2006-1 Reserve Account in an amount up to the excess, if any, of the Series 2006-1 Required Reserve Account Amount for such date over the Series 2006-1 Available Reserve Account Amount for such date, (x) second, used to pay the principal amount of other Series of Notes that are then in amortization, (y) third, released to AESOP Leasing in an amount equal to the product of (A) the Loan

 

 

Agreement’s Share with respect to the AESOP I Operating Lease Loan Agreement as of such date 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 CRCF 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 2006-1 Enhancement Deficiency or AESOP I Operating Lease Vehicle Deficiency would result there­from or exist immedi­ately thereafter.  Upon the occurrence of an Amor­tization Event, funds on deposit in the Series 2006-1 Excess Collection Account will be with­drawn by the Trustee, deposited in the Series 2006-1 Collection Account and allocated as Princi­pal Collections to reduce the Series 2006-1 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 CRCF to the Series 2006-1 Notes (i) during the Series 2006-1 Revolving Period shall be allocated to the Series 2006-1 Excess Collection Account and applied in accordance with Section 2.2(e) and (ii) during the Series 2006-1  Controlled Amortization Period or the Series 2006-1 Rapid Amortization Period shall be allocated to the Series 2006-1 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 2006-1 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 2006-1 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 2006-1 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 2006-1 Collection Account an amount equal to the Series 2006-1 Invested Percentage as of the date of the occurrence of such Series 2006-1 Lease Payment Deficit of the Collections attributable to such Past Due Rent Payment (the “Series 2006-1 Past Due Rent Payment”).  The Administrator shall instruct the Trustee in writing pursuant to the Administration Agreement to withdraw from the Series 2006-1 Collection Account and apply the Series 2006-1 Past Due Rent Payment in the following order:

 

    (i)                  if the occurrence of such Series 2006-1 Lease Payment Deficit resulted in one or more Lease Deficit Disbursements being made under the Series 2006-1 Letters of Credit, pay to each Series 2006-1 Letter of Credit Provider who made such a Lease Deficit Disbursement for application in accor­dance with the provisions of the applicable Series 2006-1 Reimbursement Agreement an amount equal to the lesser of (x) the unreimbursed amount of such Series 2006-1 Letter of Credit Provider’s Lease Deficit Disbursement and (y) such Series 2006-1 Letter of Credit Provider’s Pro Rata Share of the Series 2006-1 Past Due Rent Payment;

 

 

 

    (ii)                if the occurrence of such Series 2006-1 Lease Payment Deficit resulted in a withdrawal being made from the Series 2006-1 Cash Collateral Account, deposit in the Series 2006-1 Cash Collateral Account an amount equal to the lesser of (x) the amount of the Series 2006-1 Past Due Rent Payment remaining after any payment pursuant to clause (i) above and (y) the amount withdrawn from the Series 2006-1 Cash Collateral Account on account of such Series 2006-1 Lease Payment Deficit;

 

    (iii)               if the occurrence of such Series 2006-1 Lease Payment Deficit resulted in a withdrawal being made from the Series 2006-1 Reserve Account pursuant to Section 2.3(d), deposit in the Series 2006-1 Reserve Account an amount equal to the lesser of (x) the amount of the Series 2006-1 Past Due Rent Payment remaining after any payments pursuant to clauses (i) and (ii) above and (y) the excess, if any, of the Series 2006-1 Required Reserve Account Amount over the Series 2006-1 Available Reserve Account Amount on such day;

 

        (iv)              allocate to the Series 2006-1 Accrued Interest Account the amount, if any, by which the Series 2006-1 Lease Interest Payment Deficit, if any, relating to such Series 2006-1 Lease Payment Deficit exceeds the amount of the Series 2006-1 Past Due Rent Payment applied pursuant to clauses (i), (ii) and (iii) above; and

 

    (v)                treat the remaining amount of the Series 2006-1 Past Due Rent Payment as Principal Collections allocated to the Series 2006-1 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 and Each Series 2006-1 Interest Rate Swap Counterparty.  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 Series 2006-1 Interest Rate Swap Proceeds and Interest Collections processed since the preceding Distribution Date and allocated to the holders of the Series 2006-1 Notes.

 

    (a)                Note Interest with respect to the Series 2006-1 Notes and Payments on the Series 2006-1 Interest Rate Swaps.  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 2006-1 Accrued Inter­est Account to the extent funds are anticipated to be available from Interest Collections allo­cable to the Series 2006-1 Notes and the Series 2006-1 Interest Rate Swap Proceeds pro­cessed from but not including the preceding Distribution Date through the succeeding Dis­tribution Date in respect of (w) first, an amount equal to the Series 2006-1 Monthly Interest for the Series 2006-1 Interest Period ending on the day preceding the related Distribution Date, (x) second, an amount equal to all Fixed Rate Payments for the next succeeding Distribution Date, (y) third, an amount equal to the amount of any unpaid Series 2006-1 Shortfall as of the preceding Distribution Date (together with any accrued interest on such Series 2006-1 Shortfall) and (z) fourth, an amount

 

 

equal to the Surety Provider Fee for such Series 2006-1 Interest Period plus any Surety Provider Reimbursement Amounts then due and owing.  On the following Distribution Date, the Trustee shall withdraw the amounts described in the first sentence of this Section 2.3(a) from the Series 2006-1 Accrued Interest Account and deposit such amounts in the Series 2006-1 Distribution Account.

    

    (b)               Lease Payment Deficit Notice.  On or before 10:00 a.m. (New York City time) on each Distribution Date, the Administrator shall notify the Trustee and the Surety Provider of the amount of any Series 2006-1 Lease Payment Deficit, such notification to be in the form of Exhibit E (each a “Lease Payment Deficit Notice”).

 

    (c)                Draws on Series 2006-1 Letters of Credit For Series 2006-1 Lease Interest Payment Deficits.  If the Administrator determines on any Distribution Date that there exists a Series 2006-1 Lease Interest Payment Deficit, the Administrator shall instruct the Trustee in writing to draw on the Series 2006-1 Letters of Credit, if any, and, the Trustee shall, by 12:00 noon (New York City time) on such Distribution Date draw an amount as set forth in such notice equal to the least of (i) such Series 2006-1 Lease Interest Payment Deficit, (ii) the excess, if any, of the sum of (A) the amounts described in clauses (w), (x), (y) and (z) of Section 2.3(a) above on such Distribution Date and (B) during the Series 2006-1 Rapid Amortization Period, the Series 2006-1 Trustee’s Fees for such Distribution Date, over the amounts available from the Series 2006-1 Accrued Interest Account and (iii) the Series 2006-1 Letter of Credit Liquidity Amount on the Series 2006-1 Letters of Credit by presenting to each Series 2006-1 Letter of Credit Provider (with a copy to the Surety Provider) a draft accompanied by a Certificate of Lease Deficit Demand and shall cause the Lease Deficit Disbursements to be deposited in the Series 2006-1 Distribution Account on such Distribution Date; provided, however, that if the Series 2006-1 Cash Collateral Account has been established and funded, the Trustee shall withdraw from the Series 2006-1 Cash Collateral Account and deposit in the Series 2006-1 Distribution Account an amount equal to the lesser of (x) the Series 2006-1 Cash Collateral Percentage on such Distribution Date of the least of the amounts described in clauses (i), (ii) and (iii) above and (y) the Series 2006-1 Available Cash Collateral Account Amount on such Distribu­tion Date and draw an amount equal to the remainder of such amount on the Series 2006-1 Letters of Credit.  During the continuance of a Surety Default, no amounts in respect of the Surety Provider Fee shall be drawn on the Series 2006-1 Letters of Credit.

 

    (d)               Withdrawals from Series 2006-1 Reserve Account.  If the Administrator determines on any Distribution Date that the amounts available from the Series 2006-1 Accrued Interest Account plus the amount, if any, to be drawn under the Series 2006-1 Letters of Credit and /or withdrawn from the Series 2006-1 Cash Collateral Account pursuant to Section 2.3(c) are insufficient to pay the sum of (A) the amounts described in clauses (w), (x), (y) and (z) of Section 2.3(a) above on such Distribution Date and (B) during the Series 2006-1 Rapid Amortization Period, the Series 2006-1 Trustee’s Fees for such Distribution Date, the Administrator shall instruct the Trustee in writing to withdraw from the Series 2006-1 Reserve Account and deposit in the Series 2006-1 Distribution Account on such Distribution Date an amount equal to the lesser of the Series 2006-1 Available Reserve Account Amount and such insufficiency.  During the continuance of a Surety Default, no amounts in respect of the Surety Provider Fee shall be withdrawn from the Series 2006-1 Reserve Account.  The Trustee shall

 

 

 

withdraw such amount from the Series 2006-1 Reserve Account and deposit such amount in the Series 2006-1 Distribution Account.

 

    (e)                Surety Bond.  If the Administrator determines on any Distribution Date that the sum of the amounts available from the Series 2006-1 Accrued Interest Account plus the amount, if any, to be drawn under the Series 2006-1 Letters of Credit and/or to be withdrawn from the Series 2006-1 Cash Collateral Account pursuant to Section 2.3(c) above plus the amount, if any, to be withdrawn from the Series 2006-1 Reserve Account pursuant to Section 2.3(d) above is insufficient to pay the Series 2006-1 Adjusted Monthly Interest for such Distribution Date, the Administrator shall instruct the Trustee in writing to make a demand on the Surety Bond and, upon receipt of such notice by the Trustee on or prior to 11:00 a.m. (New York City time) on such Distribution Date, the Trustee shall, by 12:00 noon (New York City time) on such Distribution Date, make a demand on the Surety Bond in an amount equal to such insufficiency in accordance with the terms thereof and shall cause the proceeds thereof to be deposited in the Series 2006-1 Distribution Account.

    

    (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 2006-1 Accrued Interest Account and the Series 2006-1 Distribution Account, plus the amount, if any, drawn under the Series 2006-1 Letters of Credit and/or withdrawn from the Series 2006-1 Cash Collateral Account pursuant to Section 2.3(c) plus the amount, if any, withdrawn from the Series 2006-1 Reserve Account pursuant to Section 2.3(d) as follows:

 

        (i)                  on each Distribution Date during the Series 2006-1 Revolving Period or the Series 2006-1 Con­trolled Amortization Period, (1) first, to each Series 2006-1 Interest Rate Swap Counterparty, an amount equal to the Fixed Rate Payment for such Distribution Date due and owing to such Series 2006-1 Interest Rate Swap Counterparty, (2) second, to the Surety Provider, in an amount equal to (x) the Surety Provider Fee for the related Series 2006-1 Interest Period and, without duplication, (y) any Surety Provider Reimbursement Amounts then due and owing, (3) third, to the Administrator, an amount equal to the Series 2006-1 Percentage as of the beginning of the Series 2006-1 Interest Period ending on the day preceding such Distribution Date of the portion of the Monthly Administration Fee pay­able by CRCF (as specified in clause (iii) of the definition thereof) for such Series 2006-1 Interest Period, (4) fourth, to the Trustee, an amount equal to the Series 2006-1 Percentage as of the beginning of such Series 2006-1 Interest Period of the fees owing to the Trustee under the Indenture for such Series 2006-1 Interest Peri­od, (5) fifth, 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 2006-1 Percentage as of the beginning of such Series 2006-1 Interest Period of such Carrying Charges (other than Carrying Charges provided for above) for such Series 2006-1 Interest Period, (6) sixth, to each Series 2006-1 Interest Rate Swap Counterparty, any amounts due and owing under the applicable Series 2006-1 Interest Rate Swap (other than any Fixed Rate Payment) and (7) seventh, the balance, if any (“Excess Collections”), shall be withdrawn by the Paying Agent from the Series 2006-1 Collection Account and deposited in the Series 2006-1 Excess Collection Account; and

 

 

        (ii)                on each Distribution Date during the Series 2006-1 Rapid Amorti­zation Period, (1) first, to each Series 2006-1 Interest Rate Swap Counterparty, an amount equal to the Fixed Rate Payment for such Distribution Date due and owing to such Series 2006-1 Interest Rate Swap Counterparty, (2) second, to the Surety Provider, in an amount equal to (x) the Surety Provider Fee for the related Series 2006-1 Interest Period and, without duplication, (y) any Surety Provider Reimbursement Amounts then due and owing, (3) third, to the Trustee, an amount equal to the Series 2006-1 Percentage as of the beginning of such Series 2006-1 Interest Period ending on the day preceding such Distribution Date of the fees owing to the Trustee under the Indenture  for such Series 2006-1 Interest Peri­od, (4) fourth, to the Administra­tor, an amount equal to the Series 2006-1 Percentage as of the beginning of such Series 2006-1 Interest Period of the portion of the Monthly Administration Fee (as specified in clause (iii) of the definition thereof) payable by CRCF for such Series 2006-1 Interest Period, (5) fifth, 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 2006-1 Percentage as of the beginning of such Series 2006-1 Interest Period of such Carrying Charges (other than Carrying Charges provided for above) for such Series 2006-1 Interest Period, (6) sixth, so long as the Series 2006-1 Invested Amount is greater than the Monthly Total Principal Allocations for the Related Month, an amount equal to the excess of the Series 2006-1 Invested Amount over the Monthly Total Principal Allocations for the Related Month shall be treated as Principal Collections and (7) seventh, to each Series 2006-1 Interest Rate Swap Counterparty, any amounts due and owing under the applicable Series 2006-1 Interest Rate Swap (other than any Fixed Rate Payment).

 

    (g)                Shortfalls.  If the amounts described in Section 2.3 are insuffi­cient to pay the Series 2006-1 Monthly Interest on any Dis­tribution Date, payments of interest to the Series 2006-1 Noteholders will be reduced on a prorata basis by the amount of such deficiency.  The aggregate amount, if any, of such deficiency on any Distribution Date shall be referred to as the “Series 2006-1 Shortfall.”  Interest shall accrue on the Series 2006-1 Shortfall at the Series 2006-1 Note Rate.

 

    (h)                Listing Information Requirement.  From the time of the Administrator’s written notice to the Trustee that the Series 2006-1 Notes are listed on the Luxembourg Stock Exchange until the Administrator shall give the Trustee written notice that the Series 2006-1 Notes are not listed on the Luxembourg Stock Exchange, the Trustee shall, or shall instruct the Paying Agent to, cause each of (i) the Series 2006-1 Note Rate for the next succeeding Series 2006-1 Interest Period, (ii) the number of days in such Series 2006-1 Interest Period, (iii) the Distribution Date for such Series 2006-1 Interest Period and (iv) the amount of interest payable on the Series 2006-1 Notes on such Distribution Date to be (A) communicated to DTC, Euroclear, Clearstream, the Paying Agent in Luxembourg and the Luxembourg Stock Exchange no later than 11:00 a.m. (London time) on the Business Day immediately following each LIBOR Determination Date and (B) if the rules of the Luxembourg Stock Exchange so require, as notified by the Administrator to the Trustee in writing, published at CRCF’s expense in the Authorized Newspaper as soon as possible after the determination of the Series 2006-1 Note Rate for the applicable Series 2006-1 Interest Period unless the Administrator notifies the Trustee in writing that such publication is no longer required.

 

 

    Section 2.4  Payment of Note Interest.  On each Distribution Date, subject to Sec­tion 9.8 of the Base Indenture, the Paying Agent shall, in accordance with Section 6.1 of the Base Indenture, pay to the Series 2006-1 Noteholders from the Series 2006-1 Distribution Account the amount due to the Series 2006-1 Noteholders deposited in the Series 2006-1 Distribution Account pursuant to Section 2.3.

 

    Section 2.5  Payment of Note Principal.  (a)  Monthly Payments During Controlled Amortization Period or Rapid Amortization Period.  Commencing on the second Determination Date during the Series 2006-1 Controlled Amortization Period or the first Determina­tion Date after the commence­ment of the Series 2006-1 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 (i) the amount allocated to the Series 2006-1 Notes during the Related Month pursuant to Section 2.2(b)(ii), (c)(ii) or (d)(ii), as the case may be, (ii) any amounts to be drawn on the Series 2006-1 Demand Notes and/or on the Series 2006-1 Letters of Credit (or withdrawn from the Series 2006-1 Cash Collateral Account), (iii) any amounts to be withdrawn from the Series 2006-1 Reserve Account and deposited into the Series 2006-1 Distribution Account and (iv) the amount of any demand on the Surety Bond in accordance with the terms thereof.  On the Dis­tribution Date following each such Determination Date, the Trustee shall withdraw the amount allocated to the Series 2006-1 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 2006-1 Collection Account and deposit such amount in the Series 2006-1 Distri­bution Account, to be paid to the holders of the Series 2006-1 Notes.

 

    (b)               Principal Draws on Series 2006-1 Letters of Credit.  If the Administrator determines on any Distribution Date during the Series 2006-1 Rapid Amortization Period that there exists a Series 2006-1 Lease Principal Payment Deficit, the Administrator shall instruct the Trustee in writing to draw on the Series 2006-1 Letters of Credit, if any, as provided below;provided,however, that the Administrator shall not instruct the Trustee to draw on the Series 2006-1 Letters of Credit in respect of a Series 2006-1 Lease Principal Payment Deficit on or after the date of the filing by any of the Lessees of a petition for relief under Chapter 11 of the Bankruptcy Code unless and 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.  Upon receipt of a notice by the Trustee from the Administrator in respect of a Series 2006-1 Lease Principal Payment Deficit on or prior to 11:00 a.m. (New York City time) on a Distribution Date, the Trustee shall, by 12:00 noon (New York City time) on such Distribution Date draw an amount as set forth in such notice equal to the lesser of (i) such Series 2006-1 Lease Principal Payment Deficit and (ii) the Series 2006-1 Letter of Credit Liquidity Amount on the Series 2006-1 Letters of Credit by presenting to each Series 2006-1 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 2006-1 Distribution Account on such Distribution Date; provided, however, that if the Series 2006-1 Cash Collateral Account has been established and funded, the Trustee shall withdraw from the Series 2006-1 Cash Collateral Account and deposit in the Series 2006-1 Distribution Account an amount equal to the lesser of (x) the Series 2006-1 Cash Collateral Percentage on such Distribution Date of the Series 2006-1 Lease Principal Payment Deficit and (y) the Series 2006-1 Available Cash Collateral Account Amount on such Distribution Date and draw an amount equal to the remainder of such amount on the Series 2006-1 Letters of Credit.

 

 

 

    (c)                Final Distribution Date.  The entire Series 2006-1 Invested Amount shall be due and payable on the Series 2006-1 Final Distribution Date.  In connection therewith:

 

        (i)                  Demand Note Draw.  If the amount to be deposited in the Series 2006-1 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 2006-1 Final Distribution Date is less than the Series 2006-1 Invested Amount, and there are any Series 2006-1 Letters of Credit on such date, then, prior to 10:00 a.m. (New York City time) on the second Business Day prior to such Series 2006-1 Final Distribution Date, the Administrator shall instruct the Trustee in writing (with a copy to the Surety Provider) to make a demand (a “Demand Notice”) substantially in the form attached hereto as Exhibit F on the Demand Note Issuers for payment under the Series 2006-1 Demand Notes in an amount equal to the lesser of (i) such insuf­fici­ency and (ii) the Series 2006-1 Letter of Credit Amount.  The Trustee shall, prior to 12:00 noon (New York City time) on the second Business Day preceding such Series 2006-1 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 on the Series 2006-1 Demand Notes to be deposited into the Series 2006-1 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 any Distribution Date next succeeding any date on which a Demand Notice has been transmitted by the Trustee to the Demand Note Issuers pursuant to clause (i) of this Section 2.5(c), any Demand Note Issuer shall have failed to pay to the Trustee or deposit into the Series 2006-1 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 such Series 2006-1 Final Distribution Date, then, in the case of (x) or (y) the Trustee shall draw on the Series 2006-1 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 failed to pay under the Series 2006-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) and (b) the Series 2006-1 Letter of Credit Amount on such Business Day by presenting to each Series 2006-1 Letter of Credit Provider (with a copy to the Surety Provider) a draft accompanied by a Certificate of Unpaid Demand Note Demand; provided, however,that if the Series 2006-1 Cash Collateral Account has been established and funded, the Trustee shall withdraw from the Series 2006-1 Cash Collateral Account and deposit in the Series 2006-1 Distribution Account an amount equal to the lesser of (x) the Series 2006-1 Cash Collateral Percentage on such Business Day of the amount that the Demand Note Issuers failed to pay under the Series 2006-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) and (y) the Series 2006-1 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 2006-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) on the Series 2006-1 Letters of Credit.  The Trustee shall deposit, or cause the deposit of, the proceeds of any draw on the Series 2006-1 Letters of Credit and the proceeds of any withdrawal from the Series 2006-1 Cash Collateral Account to be deposited in the Series 2006-1 Distribution Account.

 

        (iii)               Reserve Account Withdrawal.  If, after giving effect to the deposit into the Series 2006-1 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 2006-1 Distribution Account with respect to the Series 2006-1 Final Distribution Date is or will be less than the Series 2006-1 Invested Amount, then prior to 12:00 noon (New York City time) on the second Business Day prior to such Series 2006-1 Final Distribution Date, the Administrator shall instruct the Trustee in writing to withdraw from the Series 2006-1 Reserve Account, an amount equal to the lesser of the Series 2006-1 Available Reserve Account Amount and such remaining insufficiency and deposit it in the Series 2006-1 Distribution Account on such Series 2006-1 Final Distribution Date. 

 

        (iv)              Demand on Surety Bond.  If after giving effect to the deposit into the Series 2006-1 Distribution Account of the amount to be deposited in accor­dance with Section 2.5(a) and all other amounts described in clauses (i), (ii) and (iii) of this Section 2.5(c), the amount to be deposited in the Series 2006-1 Distribution Account with respect to the Series 2006-1 Final Distribution Date is or will be less than the Series 2006-1 Outstanding Principal Amount, then the Trustee shall make a demand on the Surety Bond by 12:00 noon (New York City time) on the second Business Day preceding such Distribution Date in an amount equal to such insufficiency in accordance with the terms thereof and shall cause the proceeds thereof to be deposited in the Series 2006-1 Distribution Account. 

 

        (d)               Principal Deficit Amount.  On each Distribution Date, other than the Series 2006-1 Final Distribution Date, on which the Principal Deficit Amount is greater than zero, amounts shall be transferred to the Series 2006-1 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 2006-1 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 (with a copy to the Surety Provider) 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 2006-1 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 2006-1 Demand Note to be deposited into the Series 2006-1 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 2006-1 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 2006-1 Letters of Credit an amount equal to the lesser of (i) Series 2006-1 Letter of Credit Amount and (ii) the aggregate amount that the Demand Note Issuers failed to pay under the Series 2006-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) by presenting to each Series 2006-1 Letter of Credit Provider (with a copy to the Surety Provider) a draft accompanied by a Certificate of Unpaid Demand Note Demand; provided, however, that if the Series 2006-1 Cash Collateral Account has been established and funded, the Trustee shall withdraw from the Series 2006-1 Cash Collateral Account and deposit in the Series 2006-1 Distribution Account an amount equal to the lesser of (x) the Series 2006-1 Cash Collateral Percentage on such Business Day of the aggregate amount that the Demand Note Issuers failed to pay under the Series 2006-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) and (y) the Series 2006-1 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 2006-1 Demand Notes (or, the amount that the Trustee failed to demand for payment thereunder) on the Series 2006-1 Letters of Credit.  The Trustee shall deposit into, or cause the deposit of, the proceeds of any draw on the Series 2006-1 Letters of Credit and the proceeds of any withdrawal from the Series 2006-1 Cash Collateral Account to be deposited in the Series 2006-1 Distribution Account.

 

        (iii)               Reserve Account Withdrawal.  If the Series 2006-1 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 2006-1 Reserve Account, an amount equal to the lesser of (x) the Series 2006-1 Available Reserve Account Amount and (y) the amount by which the Principal Deficit Amount exceeds the amounts to be deposited in the Series 2006-1 Distribution Account in accordance with clauses (i) and (ii) of this Section 2.5(d) and deposit it in the Series 2006-1 Distribution Account on such Distribution Date.  

 

        (iv)              Demand on Surety Bond.  If the sum of the Series 2006-1 Letter of Credit Amount and the Series 2006-1 Available Reserve Account Amount will be less than the Principal Deficit Amount on any Distribution Date, then the Trustee shall make a demand

 

on the Surety Bond by 12:00 noon (New York City time) on the second Business Day preceding such Distribution Date in an amount equal to the Insured Principal Deficit Amount and shall cause the proceeds thereof to be deposited in the Series 2006-1 Distribution Account.

 

    (e)                Distribution.  On each Distribution Date occurring on or after the date a withdrawal is made from the Series 2006-1 Collection Account pursuant to Section 2.5(a) or amounts are deposited in the Series 2006-1 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 prorata to each Series 2006-1 Noteholder from the Series 2006-1 Distribution Account the amount deposited therein pursuant to Section 2.5(a), (b), (c) or (d), to the extent necessary to pay the Series 2006-1 Controlled Amortization Amount during the Series 2006-1 Controlled Amortization Period, or to the extent necessary to pay the Series 2006-1 Invested Amount during the Series 2006-1 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.

 

    Section 2.7  Series-2006-1 Reserve Account.  (a)  Establishment of Series 2006-1 Reserve Account.  CRCF shall establish and maintain in the name of the Series 2006-1 Agent for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider, or cause to be estab­lished and maintained, an account (the “Series 2006-1 Reserve Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2006-1 Notehold­ers, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider.  The Series 2006-1 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 2006-1 Reserve Account; provided that, if at any time such Qualified Institution is no longer a Qualified Institution or the credit rating of any securities issued by such depositary institution or trust company shall be reduced to below “BBB-” by Standard & Poor’s or “Baa2” by Moody’s, then CRCF shall, within thirty (30) days of such reduction, establish a new Series 2006-1 Reserve Account with a new Qualified Institution.  If the Series 2006-1 Reserve Account is not maintained in accordance with the previous sentence, CRCF shall establish a new Series 2006-1 Reserve Account, within ten (10) Business Days after obtaining knowledge of such fact, which complies with such sentence, and shall instruct the Series 2006-1 Agent in writing to transfer all cash and investments from the non-qualifying Series 2006-1 Reserve Account into the new Series 2006-1 Reserve Account.  Initially, the Series 2006-1 Reserve Account will be established with The Bank of New York. 

 

 

    (b)               Administration of the Series 2006-1 Reserve Account.  The Administrator may instruct the institution maintaining the Series 2006-1 Reserve Account to invest funds on deposit in the Series 2006-1 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 2006-1 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 2006-1 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 CRCF, take such action as is required to maintain the Trustee’s security interest in the Permitted Investments credited to the Series 2006-1 Reserve Account.  CRCF 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 2006-1 Reserve Account shall remain uninvested.

 

    (c)                Earnings from Series 2006-1 Reserve Ac­count.  All interest and earnings (net of losses and investment expenses) paid on funds on deposit in the Series 2006-1 Reserve Account shall be deemed to be on deposit therein and available for distribution.

 

    (d)               Series 2006-1 Reserve Account Constitutes Additional Collateral for Series 2006-1 Notes.  In order to secure and provide for the repayment and payment of the CRCF Obligations with respect to the Series 2006-1 Notes, CRCF hereby grants a security interest in and assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider, all of CRCF’s right, title and interest in and to the following (whether now or hereafter existing or acquired):  (i) the Series 2006-1 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 2006-1 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 2006-1 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 2006-1 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 2006-1 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 2006-1 Reserve Account and in all proceeds thereof, and shall be the only person authorized to originate entitlement orders in respect of the Series 2006-1 Reserve Account.  The Series 2006-1 Reserve Account Collateral shall be under the sole

 

 

dominion and control of the Trustee for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider.  The Series 2006-1 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 2006-1 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 2006-1 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 2006-1 Reserve Account Surplus.  In the event that the Series 2006-1 Reserve Account Surplus on any Distribution Date, after giving effect to all withdrawals from the Series 2006-1 Reserve Account, is greater than zero, if no Series 2006-1 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 (with a copy of such written instructions to be provided by the Administrator to the Surety Provider) pursuant to the Administration Agreement, shall withdraw from the Series 2006-1 Reserve Account an amount equal to the Series 2006-1 Reserve Account Surplus and shall pay such amount to CRCF.

 

    (f)                 Termination of Series 2006-1 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 2006-1 Noteholders and to the Surety Provider and payable from the Series 2006-1 Reserve Account as provided herein, shall withdraw from the Series 2006-1 Reserve Account all amounts on deposit therein for payment to CRCF.

 

    Section 2.8  Series 2006-1 Letters of Credit and Series 2006-1 Cash Collateral Account.  (a)      Series 2006-1 Letters of Credit and Series 2006-1 Cash Collateral Account Constitute Additional Collateral for Series 2006-1 Notes.  In order to secure and provide for the repayment and payment of the CRCF Obligations with respect to the Series 2006-1 Notes, CRCF hereby grants a security interest in and assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider, all of CRCF’s right, title and interest in and to the following (whether now or hereafter existing or acquired): (i) each Series 2006-1 Letter of Credit; (ii) the Series 2006-1 Cash Collateral Account, including any security entitlement thereto; (iii) all funds on deposit in the Series 2006-1 Cash Collateral Account from time to time; (iv) all certificates and instruments, if any, representing or evidencing any or all of the Series 2006-1 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 2006-1 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 2006-1 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 2006-1 Cash Collateral Account Collateral”). 

 

 

The Trustee shall, for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider, possess all right, title and interest in all funds on deposit from time to time in the Series 2006-1 Cash Collateral Account and in all proceeds thereof, and shall be the only person authorized to originate entitlement orders in respect of the Series 2006-1 Cash Collateral Account.  The Series 2006-1 Cash Collateral Account shall be under the sole dominion and control of the Trustee for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider.  The Series 2006-1 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 2006-1 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 2006-1 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 2006-1 Letter of Credit Expiration Date.  If prior to the date which is ten (10) days prior to the then - scheduled Series 2006-1 Letter of Credit Expiration Date with respect to any Series 2006-1 Letter of Credit, excluding the amount available to be drawn under such Series 2006-1 Letter of Credit but taking into account each substitute Series 2006-1 Letter of Credit which has been obtained from a Series 2006-1 Eligible Letter of Credit Provider and is in full force and effect on such date, the Series 2006-1 Enhancement Amount would be equal to or more than the Series 2006-1 Required Enhancement Amount and the Series 2006-1 Liquidity Amount would be equal to or greater than the Series 2006-1 Required Liquidity Amount, then the Administrator shall notify the Trustee and the Surety Provider (with the Surety Provider to be provided supporting calculations in reasonable detail) in writing no later than two (2) Business Days prior to such Series 2006-1 Letter of Credit Expiration Date of such determination.  If prior to the date which is ten (10) days prior to the then-scheduled Series 2006-1 Letter of Credit Expiration Date with respect to any Series 2006-1 Letter of Credit, excluding the amount available to be drawn under such Series 2006-1 Letter of Credit but taking into account a substitute Series 2006-1 Letter of Credit which has been obtained from a Series 2006-1 Eligible Letter of Credit Provider and is in full force and effect on such date, the Series 2006-1 Enhancement Amount would be less than the Series 2006-1 Required Enhancement Amount or the Series 2006-1 Liquidity Amount would be less than the Series 2006-1 Required Liquidity Amount, then the Administrator shall notify the Trustee and the Surety Provider (with the Surety Provider to be provided supporting calculations in reasonable detail) in writing no later than two (2) Business Days prior to such Series 2006-1 Letter of Credit Expiration Date of (x) the greater of (A) the excess, if any, of the Series 2006-1 Required Enhancement Amount over the Series 2006-1 Enhancement Amount, excluding the available amount under such expiring Series 2006-1 Letter of Credit but taking into account any substitute Series 2006-1 Letter of Credit which has been obtained from a Series 2006-1 Eligible Letter of Credit Provider and is in full force and effect, on such date, and (B) the excess, if any, of the Series 2006-1 Required Liquidity Amount over the Series 2006-1 Liquidity Amount, excluding the available amount under such expiring Series 2006-1 Letter of Credit but taking into account any substitute Series 2006-1 Letter of Credit which has been obtained from a Series 2006-1 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 2006-1 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 2006-1 Letter of Credit by presenting a draft (with a copy to the Surety Provider) accompanied by a Certificate of Termination Demand and shall cause the Termination Disbursement to be deposited in the Series 2006-1 Cash Collateral Account.

    (c)                Series 2006-1 Letter of Credit Providers.  The Administrator shall notify the Trustee and the Surety Provider in writing within one (1) Business Day of becoming aware that (i) the long-term senior unsecured debt credit rating of any Series 2006-1 Letter of Credit Provider has fallen below “A+” as determined by Standard & Poor’s or “Al” as determined by Moody’s or (ii) the short-term senior unsecured debt credit rating of any Series 2006-1 Letter of Credit Provider has fallen below “A-1” as determined by Standard & Poor’s 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 2006-1 Required Enhancement Amount over the Series 2006-1 Enhancement Amount, excluding the available amount under the Series 2006-1 Letter of Credit issued by such Series 2006-1 Letter of Credit Provider, on such date, and (B) the excess, if any, of the Series 2006-1 Required Liquidity Amount over the Series 2006-1 Liquidity Amount, excluding the available amount under such Series 2006-1 Letter of Credit, on such date, and (ii) the amount available to be drawn on such Series 2006-1 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 2006-1 Letter of Credit in an amount equal to the lesser of the amounts in clause (i) and clause (ii) of the immediately preceding sentence on such Business Day by presenting a draft accompanied by a Certificate of Termination Demand and shall cause the Termination Disbursement to be deposited in the Series 2006-1 Cash Collateral Account.

    

    (d)               Termination Date Demands on the Series 2006-1 Letters of Credit.  Prior to 10:00 a.m. (New York City time) on the Business Day immediately succeeding the Series 2006-1 Letter of Credit Termination Date, the Administrator shall determine the Series 2006-1 Demand Note Payment Amount, if any, as of the Series 2006-1 Letter of Credit Termination Date and, if the Series 2006-1 Demand Note Payment Amount is greater than zero, instruct the Trustee in writing to draw on the Series 2006-1 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 2006-1 Demand Note Payment Amount and (ii) the Series 2006-1 Letter of Credit Liquidity Amount on the Series 2006-1 Letters of Credit by presenting to each Series 2006-1 Letter of Credit Provider (with a copy to the Surety Provider) a draft accompanied

 

 

by a Certificate of Termination Date Demand and shall cause the Termination Date Disbursement to be deposited in the Series 2006-1 Cash Collateral Account; provided, however, that if the Series 2006-1 Cash Collateral Account has been established and funded, the Trustee shall draw an amount equal to the product of (a) 100% minus the Series 2006-1 Cash Collateral Percentage and (b) the lesser of the amounts referred to in clause (i) and (ii) on such Business Day on the Series 2006-1 Letters of Credit as calculated by the Administra­tor and provided in writing to the Trustee and the Surety Provider.

 

    (e)                Draws on the Series 2006-1 Letters of Credit.  If there is more than one Series 2006-1 Letter of Credit on the date of any draw on the Series 2006-1 Letters of Credit pursuant to the terms of this Supplement, the Administrator shall instruct the Trustee, in writing, to draw on each Series 2006-1 Letter of Credit in an amount equal to the Pro Rata Share of the Series 2006-1 Letter of Credit Provider issuing such Series 2006-1 Letter of Credit of the amount of such draw on the Series 2006-1 Letters of Credit.

 

    (f)                 Establishment of Series 2006-1 Cash Collateral Account.  On or prior to the date of any drawing under a Series 2006-1 Letter of Credit pursuant to Section 2.8(b), (c) or (d) above, CRCF shall establish and maintain in the name of the Trustee for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider, or cause to be estab­lished and maintained, an account (the “Series 2006-1 Cash Collateral Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider.  The Series 2006-1 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 2006-1 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-” by Standard & Poor’s or “Baa3” by Moody’s, then CRCF shall, within thirty (30) days of such reduction, establish a new Series 2006-1 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 2006-1 Cash Collateral Account.  If a new Series 2006-1 Cash Collateral Account is established, CRCF shall instruct the Trustee in writing to transfer all cash and invest­ments from the non-qualifying Series 2006-1 Cash Collateral Account into the new Series 2006-1 Cash Collateral Account.

 

    (g)                Administration of the Series 2006-1 Cash Collateral Account.  CRCF may instruct (by standing instructions or otherwise) the institution maintaining the Series 2006-1 Cash Collateral Account to invest funds on deposit in the Series 2006-1 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 2006-1 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 2006-1 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 CRCF, take such action as is required to maintain the Trustee’s security interest in the Permitted Investments credited to the Series 2006-1 Cash Collateral Account.  CRCF 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 2006-1 Cash Collateral Account shall remain uninvested.

 

    (h)                Earnings from Series 2006-1 Cash Collateral Account.  All interest and earnings (net of losses and investment expenses) paid on funds on deposit in the Series 2006-1 Cash Collateral Account shall be deemed to be on deposit therein and available for distribution.

 

    (i)                  Series 2006-1 Cash Collateral Account Surplus.  In the event that the Series 2006-1 Cash Collateral Account Surplus on any Distribution Date (or, after the Series 2006-1 Letter of Credit Termination Date, on any date) is greater than zero, the Trustee, acting in accordance with the written instructions (a copy of which shall be provided by the Administrator to the Surety Provider) of the Administrator, shall with­draw from the Series 2006-1 Cash Collateral Account an amount equal to the Series 2006-1 Cash Collateral Account Surplus and shall pay such amount:  first, to the Series 2006-1 Letter of Credit Providers to the extent of any unreimbursed drawings under the related Series 2006-1 Reimbursement Agreement, for application in accordance with the provisions of the related Series 2006-1 Reimbursement Agreement, and, second, to CRCF any remaining amount.

 

    (j)                 Post-Series 2006-1 Letter of Credit Termination Date Withdrawals from the Series 2006-1 Cash Collateral Account.  If the Surety Provider notifies the Trustee in writing that the Surety Provider shall have paid a Preference Amount (as defined in the Surety Bond) under the Surety Bond, subject to the satisfaction of the conditions set forth in the next succeeding sentence, the Trustee shall withdraw from the Series 2006-1 Cash Collateral Account and pay to the Surety Provider an amount equal to the lesser of (i) the Series 2006-1 Available Cash Collateral Account Amount on such date and (ii) such Preference Amount.  Prior to any withdrawal from the Series 2006-1 Cash Collateral Account pursuant to this Section 2.8(j), the Trustee shall have received a certified copy of the order requiring the return of such Preference Amount.

 

    (k)               Termination of Series 2006-1 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 2006-1 Noteholders and to the Surety Provider and payable from the Series 2006-1 Cash Collateral Account as provided herein, shall withdraw from the Series 2006-1 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 2006-1 Letter of Credit Providers to the extent of any unreimbursed drawings under the related Series 2006-1 Reimbursement

 

 

Agreement, for application in accordance with the provisions of the related Series 2006-1 Reimbursement Agreement, and, second, to CRCF any remaining amount.

 

    Section 2.9  Series 2006-1 Distribution Account.  (a)  Establishment of Series 2006-1 Distribu­tion Account.  CRCF shall establish and maintain in the name of the Trustee for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider, or cause to be established and maintained, an account (the “Series 2006-1 Distribution Account”), bearing a designa­tion clearly indicating that the funds deposited therein are held for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider.  The Series 2006-1 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 2006-1 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-” by Standard & Poor’s or “Baa3” by Moody’s, then CRCF shall, within thirty (30) days of such reduction, establish a new Series 2006-1 Distribution Account with a new Qualified Institu­tion.  If the Series 2006-1 Distribution Account is not maintained in accordance with the previous sen­tence, CRCF shall establish a new Series 2006-1 Distribution Account, within ten (10) Business Days after obtaining knowledge of such fact, which complies with such sentence, and shall in­struct the Series 2006-1 Agent in writing to transfer all cash and investments from the non-qualify­ing Series 2006-1 Distribution Account into the new Series 2006-1 Distri­bution Account.  Initially, the Series 2006-1 Distribu­tion Account will be established with The Bank of New York.

 

    (b)               Administration of the Series 2006-1 Dis­tribution Account.  The Adminis­trator may instruct the institution maintaining the Series 2006-1 Distribution Account to invest funds on deposit in the Series 2006-1 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 2006-1 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 2006-1 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 CRCF, take such action as is required to maintain the Trustee’s security interest in the Permitted Investments credited to the Series 2006-1 Distribution Account.  CRCF 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 2006-1 Distribution Account shall remain uninvested.

 

 

 

    (c)                Earnings from Series 2006-1 Distribution Account.  All interest and earn­ings (net of losses and investment expenses) paid on funds on deposit in the Series 2006-1 Distribution Account shall be deemed to be on deposit and available for distribution.

 

    (d)               Series 2006-1 Distribution Account Constitutes Additional Collateral for Series 2006-1 Notes.  In order to secure and provide for the repayment and payment of the CRCF Obligations with respect to the Series 2006-1 Notes, CRCF hereby grants a security interest in and assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider, all of CRCF’s right, title and interest in and to the following (whether now or hereafter existing or acquired):  (i) the Series 2006-1 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 2006-1 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 2006-1 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 2006-1 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 2006-1 Distribution Account Collateral”).  The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Series 2006-1 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 2006-1 Distribution Account.  The Series 2006-1 Distribution Account Collateral shall be under the sole dominion and control of the Trustee for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider.  The Series 2006-1 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 2006-1 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 2006-1 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 2006-1 Interest Rate Swaps.  (a)  On the Series 2006-1 Closing Date, CRCF shall enter into one or more interest rate swaps acceptable to the Surety Provider (in the exercise of its reasonable judgment) in respect of the Series 2006-1 Notes with a Qualified Interest Rate Swap Counterparty (a “Series 2006-1 Interest Rate Swap”).  The Series 2006-1 Interest Rate Swaps shall have an aggregate initial notional amount equal to the Series 2006-1 Initial Invested Amount.  The aggregate notional amount of such Series 2006-1 Interest Rate Swaps shall be reduced pursuant to the terms of such Series 2006-1 Interest Rate Swaps but shall not at any time be less than the Series 2006-1 Invested Amount.  The fixed rate payable by CRCF under the Series 2006-1 Interest Rate Swaps and any replacement thereof shall not be greater than 5.0%.

 

 

 

    (b)               Replacement of Any Series 2006-1 Interest Rate Swap.  If, at any time, a Series 2006-1 Interest Rate Swap Counterparty does not have (i) a long-term senior, unsecured debt, deposit, claims paying or credit (as the case may be) rating at least “A” from Standard & Poor’s and at least “A2” from Moody’s, (ii) a short-term senior, unsecured debt, deposit, claims paying or credit (as the case may be) rating of at least “A-1”, or if such Series 2006-1 Interest Rate Swap Counterparty does not have a short-term senior, unsecured debt rating, then a long-term senior, unsecured debt, deposit, claims paying or credit (as the case may be) rating of at least “A+”, in each case, from Standard & Poor’s and (iii) a short-term senior, unsecured debt, deposit, claims paying or credit (as the case may be) rating of “P-1”, or if such Series 2006-1 Interest Rate Swap Counterparty does not have a short-term senior, unsecured debt rating, then a long-term senior, unsecured debt, deposit, claims paying or credit (as the case may be) rating of at least “A1”, in each case, from Moody’s, then CRCF shall cause the Series 2006-1 Interest Rate Swap Counterparty within thirty (30) days following such occurrence, at the Series 2006-1 Interest Rate Swap Counterparty’s expense, to do one of the following (the choice of such action to be determined by the Series 2006-1 Interest Rate Swap Counterparty) (i) obtain a replacement interest rate swap on substantially the same terms as the replaced Series 2006-1 Interest Rate Swap from a Qualified Interest Rate Swap Provider and terminate the applicable Series 2006-1 Interest Rate Swap, (ii) collateralize its obligations under the Series 2006-1 Interest Rate Swap in a manner acceptable to the Rating Agencies and the Surety Provider (in the exercise of its reasonable judgment) in an amount and with collateral which is sufficient to maintain or restore the immediately prior ratings (without giving effect to the Policy) of the Series 2006-1 Notes or (iii) enter into any other arrangement satisfactory to Standard & Poor’s, Moody’s and the Surety Provider (in the exercise of its reasonable judgment), which is sufficient to maintain or restore the immediately prior ratings (without giving effect to the Surety Bond) of the Series 2006-1 Notes; provided that no termination of any Series 2006-1 Interest Rate Swap shall occur until CRCF has entered into a replacement interest rate swap or shall have entered any other arrangement satisfactory to Standard & Poor’s, Moody’s and the Surety Provider (in the exercise of its reasonable judgment).

    

    (c)                To secure payment of all CRCF Obligations with respect to the Series 2006-1 Notes, CRCF grants a security interest in, and assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 2006-1 Noteholders and the Surety Provider, all of CRCF’s right, title and interest in the Series 2006-1 Interest Rate Swaps and all proceeds thereof (the “Series 2006-1 Interest Rate Swap Collateral”).  CRCF shall require all Series 2006-1 Interest Rate Swap Proceeds to be paid to, and the Trustee shall allocate all Series 2006-1 Interest Rate Swap Proceeds to, the Series 2006-1 Accrued Interest Account of the Series 2006-1 Collection Account.

 

    (d)                The failure of CRCF to comply with its covenants contained in this Section 2.10 shall not constitute an Amortization Event with respect to the Series 2006-1 Notes.

 

    (e)                Each Series 2006-1 Interest Rate Swap Counterparty shall be a Swap Counterparty and therefore shall be a beneficiary of the grant set forth in Section 3.1 of the Base Indenture.

 

    Section 2.11  Series 2006-1 Accounts Permitted Investments.  CRCF shall not, and shall not permit, funds on deposit in the Series 2006-1 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 “AAA” by Standard & Poor’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

        (vi)              any investment, instrument or security not otherwise listed in clause (i) through (vi) of the definition of “Permitted Investments” in the Base Indenture that is not approved in writing by the Surety Provider.

 

    Section 2.12  Series 2006-1 Demand Notes Constitute Additional Collateral for Series 2006-1 Notes.  In order to secure and provide for the repayment and payment of the CRCF Obligations with respect to the Series 2006-1 Notes, CRCF hereby grants a security interest in and assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider, all of CRCF’s right, title and interest in and to the follow­ing (whether now or hereafter existing or acquired): (i) the Series 2006-1 Demand Notes; (ii) all certificates and instruments, if any, representing or evidencing the Series 2006-1 Demand Notes; and (iii) all proceeds of any and all of the foregoing, including, without limitation, cash.  On the date hereof, CRCF shall deliver to the Trustee, for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider, each Series 2006-1 Demand Note, endorsed in blank.  The Trustee, for the benefit of the Series 2006-1 Noteholders, each Series 2006-1 Interest Rate Swap Counterparty and the Surety Provider, shall be the only Person authorized to make a demand for payments on the Series 2006-1 Demand Notes.

 

 

    (a)                a Series 2006-1 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 2006-1

 

Enhancement Deficiency shall have been cured in accordance with the terms and condi­tions of the Indenture and the Related Documents;

 

    (b)               the Series 2006-1 Liquidity Amount shall be less than the Series 2006-1 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 2006-1 Collection Account, the Series 2006-1 Excess Collection Account or the Series 2006-1 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 the Series 2006-1 Notes is not paid in full on or before the Series 2006-1 Expected Final Distribution Date;

 

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

 

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

 

    (g)                the Surety Provider fails to pay a demand for payment in accordance with the requirements of the Surety Bond;

 

    (h)                any Series 2006-1 Letter of Credit shall not be in full force and effect for at least two (2) Business Days and (x) either a Series 2006-1 Enhancement Deficiency would result from excluding such Series 2006-1 Letter of Credit from the Series 2006-1 Enhancement Amount or (y) the Series 2006-1 Liquidity Amount, excluding therefrom the available amount under such Series 2006-1 Letter of Credit, would be less than the Series 2006-1 Required Liquidity Amount;

 

    (i)                  from and after the funding of the Series 2006-1 Cash Collateral Account, the Series 2006-1 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 2006-1 Enhancement Deficiency would result from excluding the Series 2006-1 Available Cash Collateral Account Amount from the Series 2006-1 Enhancement Amount or (y) the Series 2006-1 Liquidity Amount, excluding therefrom the Series 2006-1 Available Cash Collateral Amount, would be less than the Series 2006-1 Required Liquidity Amount; and

 

    (j)                 an Event of Bankruptcy shall have occurred with respect to any Series 2006-1 Letter of Credit Provider or any Series 2006-1 Letter of Credit Provider repudi­ates its Series 2006-1 Letter of Credit or refuses to honor a proper draw thereon and either (x) a Series 2006-1 Enhancement Deficiency would result from excluding such Series 2006-1 Letter of Credit from the Series 2006-1 Enhancement Amount or (y) the Series 2006-1 Liquidity Amount, excluding therefrom the available amount under such

 

 

Series 2006-1 Letter of Credit, would be less than the Series 2006-1 Required Liquidity Amount.

 

 

        (i)                  to the non-consenting Series 2006-1 Noteholders, if any, prorata up to the amount required to pay all Series 2006-1 Notes held by such non-consenting Series 2006-1 Noteholders in full; and

 

 

        (ii)                any remaining Designated Amounts to the Series 2006-1 Excess Collection Account.

 

 

    Section 5.1  Restricted Global Series 2006-1 Notes.  The Series 2006-1 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 Series 2006-1 Note”), substan­ti­ally in the form set forth in Exhibit A-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 the Series 2006-1 Notes represented thereby, with the Trustee as custodian for DTC, and registered in the name of Cede as DTC’s nominee, duly executed by CRCF and authenticated by the Trustee in the manner set forth in Section 2.4 of the Base Indenture.

 

    Section 5.2  Temporary Global Series 2006-1 Notes; Permanent Global Series 2006-1 Notes.  The Series 2006-1 Notes to be issued outside the United States will be issued and sold in transactions outside the United States in reliance on Regulation S under the Securities

 

 

Act, as provided in the applicable note purchase agree­ment, and shall initially be issued in the form of one or more temporary notes in registered form without interest coupons (each, a “Temporary Global Series 2006-1 Note”), substan­tially in the form set forth in Exhibit A-2, which shall be deposited on behalf of the purchasers of the Series 2006-1 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 CRCF and authenticated by the Trustee in the manner set forth in Section 2.4 of the Base Indenture.  Interests in a Temporary Global Series 2006-1 Note will be exchangeable, in whole or in part, for interests in one or more permanent global notes in registered form without interest coupons (each, a “Permanent Global Series 2006-1 Note”), substantially in the form of Exhibit A-3, in accordance with the provisions of such Temporary Global Series 2006-1 Note and the Base Indenture (as modified by this Supplement).  Interests in a Permanent Global Series 2006-1 Note will be exchangeable for a definitive Series 2006-1 Note in accordance with the provisions of such Permanent Global Series 2006-1 Note and the Base Indenture (as modified by this Sup­plement).

    Section 6.1  Optional Repurchase.  The  Series 2006-1 Notes shall be subject to repurchase by CRCF at its option in accordance with Section 6.3 of the Base Indenture on any Distribution Date after the Series 2006-1 Invested Amount is reduced to an amount less than or equal to 10% of the Series 2006-1 Initial Invested Amount (the “Series 2006-1 Repurchase Amount”); provided, however, that as a condition precedent to any such optional repurchase, on or prior to the Distribution Date on which any Series 2006-1 Note is repurchased by CRCF pursuant to this Section 6.1, CRCF shall have paid the Surety Provider all Surety Provider Fees and all other Surety Provider Reimbursement Amounts due and unpaid as of such Distribution Date.  The repurchase price for any Series 2006-1 Note shall equal the aggregate outstanding principal balance of such Series 2006-1 Note (determined after giving effect to any payments of principal and interest on such Distribution Date), plus accrued and unpaid interest on such outstanding principal balance.

 

    Section 6.2  Information.  The Trustee shall provide to the Series 2006-1 Noteholders, or their desig­nated agent, and the Surety Provider copies of all infor­mation furnished to the Trustee or CRCF pursuant to the Related Documents, as such information relates to the Series 2006-1 Notes or the Series 2006-1 Collateral.  In connection with any Preference Amount payable under the Surety Bond, the Trustee shall furnish to the Surety Provider its records evi­dencing the distributions of principal of and interest on the Series 2006-1 Notes that have been made and subsequently recovered from Series 2006-1 Noteholders and the dates on which such payments were made.

 

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

 

Exhibit A-1:	Form of Restricted Global Series 2006-1 Note
Exhibit A-2	Form of Temporary Global Series 2006-1 Note

 

 

 

Exhibit A-3	Form of Permanent Global Series 2006-1 Note
Exhibit B:	Form of Consent
Exhibit C:	Form of Series 2006-1 Demand Note
Exhibit D:	Form of Letter of Credit
Exhibit E:	Form of Lease Payment Deficit Notice
Exhibit F:	Form of Demand Notice

 

    Section 6.4  Ratification of Base Indenture.  As supplemented by this Supplement, the Base Indenture is in all respects ratified and confirmed and the Base Indenture as so supplemented by this Supplement shall be read, taken, and construed as one and the same instru­ment.

 

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

 

    Section 6.6  Governing Law.  This Supplement shall be construed in accordance with the law of the State of New York, and the obligations, rights and remedies of the parties hereto shall be determined in accordance with such law.

 

    Section 6.7  Amendments.  This Supplement may be modified or amended from time to time with the consent of the Surety Provider and in accordance with the terms of the Base Indenture; provided, however, that if, pur­suant to the terms of the Base Indenture or this Supplement, the consent of the Required Noteholders is required for an amendment or modifi­ca­tion of this Supplement, such requirement shall be satisfied if such amendment or modification is consented to by the Series 2006-1 Noteholders representing more than 50% of the aggregate outstanding principal amount of the Series 2006-1 Notes.

 

    Section 6.8  Discharge of Indenture.  Notwith­standing anything to the contrary contained in the Base Indenture, no discharge of the Indenture pursuant to Section 11.1(b) of the Base Indenture will be effective as to the Series 2006-1 Notes without the consent of the Required Noteholders and, to the extent there are any amounts due to a Series 2006-1 Interest Rate Swap Counterparty, each such Series 2006-1 Interest Rate Swap Counterparty.

 

    Section 6.9  Notice to Surety Provider, Rating Agencies and each Series 2006-1 Interest Rate Swap Counterparty.  The Trustee shall provide to the Surety Provider, each Rating Agency and each Series 2006-1 Interest Rate Swap Counterparty a copy of each notice, opinion of counsel, certificate or other item delivered to, or required to be provided by, the Trustee pursuant to this Supplement or any other Related Document.  Each such opinion of counsel shall be addressed to the Surety Provider and each Series 2006-1 Interest Rate Swap Counterparty, shall be from counsel reasonably acceptable to the Surety Provider and each Series 2006-1 Interest Rate Swap Counterparty and shall be in form and substance reasonably acceptable to the Surety Provider and each Series 2006-1 Interest Rate Swap Counterparty.  All such notices, opinions, certificates or other items delivered to the Surety Provider shall be forwarded to MBIA Insurance Corporation, 113 King Street, Armonk, New York, 10504; Attention:  General Counsel; telephone: (914) 273-4545.

 

 

    Section 6.10  Certain Rights of Surety Provider.  The Surety Provider shall be deemed to be an En­hancement Provider entitled to receive confirmation of the rating on the Series 2006-1 Notes (without regard to the Surety Bond) pursuant to the definition of “Rating Agency Confirmation Condition.”  In addition, the Surety Provider shall be deemed to be an Enhancement Provider entitled to exercise the consent rights described in clause (ii) of the definition of “Rating Agency Consent Condition.”

 

    Section 6.11  Surety Provider Deemed Noteholder and Secured Party.  Except for any period during which a Surety Default is continuing, the Surety Provider shall be deemed to be the holder of 100% of the Series 2006-1 Notes for the purposes of giving any and all consents, wai­vers (including, without limitation, pursuant to Article III (other than an Amortization Event described in clauses (f) and (g) thereof) Article IV and Section 6.7), approvals, instructions, directions, requests, declara­tions and/or notices pursuant to the Base Indenture and this Supplement.  Any reference in the Base Indenture or the Related Documents (including, without limitation, in Sections 2.3, 8.14, 9.1, 9.2 or 12.1 of the Base Inden­ture) to materially, adversely, or detrimentally affect­ing the rights or interests of the Noteholders, or words of similar meaning, shall be deemed, for purposes of the Series 2006-1 Notes, to refer to the rights or interests of the Surety Provider.  The Surety Provider shall consti­tute an “Enhancement Provider” with respect to the Series 2006-1 Notes for all purposes under the Indenture and the other Related Documents.  Furthermore, the Surety Provider shall be deemed to be a “Secured Party” under the Base Indenture and the Related Documents to the extent of amounts payable to the Surety Provider pursuant to this Supplement and the Insurance Agreement shall constitute an “Enhancement Agreement” with respect to the Series 2006-1 Notes for all purposes under the Indenture and the Related Documents.  Moreover, wherever in the Related Documents money or other property is assigned, conveyed, granted or held for, a filing is made for, action is taken for or agreed to be taken for, or a representation or warranty is made for the benefit of the Noteholders, the Surety Provider shall be deemed to be the Noteholder with re­spect to 100% of the Series 2006-1 Notes for such purposes. 

    

    Section 6.12  Capitalization of CRCF.  CRCF agrees that on the Series 2006-1 Closing Date it will have capitalization in an amount equal to or greater than 3% of the sum of (x) the Series 2006-1 Invested Amount and (y) the invested amount of the Series 2000-2 Notes, the Series 2001-2 Notes, the Series 2002-1 Notes, the Series 2002-2 Notes, the Series 2002-3 Notes, the Series 2003-1 Notes, the Series 2003-2 Notes, the Series 2003-3 Notes, the Series 2003-4 Notes, the Series 2003-5 Notes, the Series 2004-1 Notes, the Series 2004-2 Notes, the Series 2004-4 Notes, the Series 2005-1 Notes, the Series 2005-2 Notes, the Series 2005-3 Notes and the Series 2005-4 Notes.

 

    Section 6.13  [RESERVED]

 

    Section 6.14  Third Party Beneficiary.  The Surety Provider and each Series 2006-1 Interest Rate Swap Counterparty is an express third party beneficiary of (i) the Base Indenture to the extent of provisions relating to any Enhancement Provider and (ii) this Supplement.

 

    Section 6.15  Prior Notice by Trustee to Surety Provider.  Subject to Section 10.1 of the Base Indenture, the Trustee agrees that, so long as no Amortization Event shall have oc­curred and be continuing with respect to any Series of Notes other than the Series 2006-1 Notes,

 

 

it shall not exercise any rights or remedies available to it as a result of the occurrence of an Amor­tization Event with respect to the Series 2006-1 Notes (except those set forth in clauses (f) and (g) of Article III) or a Series 2006-1 Limited Liquidation Event of Default until after the Trustee has given prior written notice thereof to the Surety Provider and each Series 2006-1 Interest Rate Swap Counterparty and ob­tained the direction of the Required Noteholders with respect to the Series 2006-1 Notes.  The Trustee agrees to notify the Surety Provider promptly following any exercise of rights or remedies available to it as a result of the occurrence of any Amortization Event or a Series 2006-1 Limited Liquidation Event of Default.

 

    Section 6.16  Effect of Payments by the Surety Provider.  Anything herein to the contrary notwithstanding, any distribution of principal of or interest on the Series 2006-1 Notes that is made with moneys received pursuant to the terms of the Surety Bond shall not (except for the purpose of calculating the Principal Deficit Amount) be considered payment of the Series 2006-1 Notes by CRCF.  The Trustee acknowledges that, without the need for any further action on the part of the Surety Provider, (i) to the extent the Surety Provider makes payments, directly or indirectly, on account of principal of or interest on the Series 2006-1 Notes to the Trustee for the benefit of the Series 2006-1 Noteholders or to the Series 2006-1 Noteholders (including any Preference Amounts as defined in the Surety Bond), the Surety Provider will be fully subrogated to the rights of such Series 2006-1 Noteholders to receive such princi­pal and interest and will be deemed to the extent of the payments so made to be a Series 2006-1 Noteholder and (ii) the Surety Provider shall be paid principal and interest in its capacity as a Series 2006-1 Noteholder until all such payments by the Surety Provider have been fully reimbursed, but only from the sources and in the manner provided herein for the distribution of such principal and interest and in each case only after the Series 2006-1 Noteholders have received all payments of principal and interest due to them hereunder on the related Distribution Date.

 

    Section 6.17  Series 2006-1 Demand Notes.  Other than pursuant to a demand thereon pursuant to Section 2.5, CRCF shall not reduce the amount of the Series 2006-1 Demand Notes or forgive amounts payable thereunder so that the outstanding principal amount of the Series 2006-1 Demand Notes after such reduction or forgiveness is less than the Series 2006-1 Letter of Credit Liquidity Amount.  CRCF shall not agree to any amendment of the Series 2006-1 Demand Notes without first satisfying the Rating Agency Confirmation Condition and the Rating Agency Consent Condition.

 

    Section 6.18  Subrogation.  In furtherance of and not in limitation of the Surety Provider’s equitable right of subrogation, each of the Trustee and CRCF acknowledge that, to the extent of any payment made by the Surety Provider under the Surety Bond with respect to interest on or principal of the Series 2006-1 Notes, including any Preference Amount, as defined in the Surety Bond, the Surety Provider is to be fully subrogated to the extent of such payment and any additional interest due on any late payment, to the rights of the Series 2006-1 Noteholders under the Indenture.  Each of CRCF and the Trustee agree to such subrogation and, further, agree to take such actions as the Surety Provider may reasonably request in writing to evidence such subrogation.

 

    Section 6.19  Termination of Supplement.  This Supplement shall cease to be of further effect when all outstanding Series 2006-1 Notes theretofore authenticated and issued have

 

 

been delivered (other than destroyed, lost, or stolen Series 2006-1 Notes which have been replaced or paid) to the Trustee for cancellation, CRCF has paid all sums payable hereunder, the Surety Provider has been paid all Surety Provider Fees and all other Surety Provider Reimbursement Amounts due under the Insurance Agreement, the Series 2006-1 Interest Rate Swaps have been terminated and there are no amounts due and owing thereunder and, if the Series 2006-1 Demand Note Payment Amount on the Series 2006-1 Letter of Credit Termination Date was greater than zero, all amounts have been withdrawn from the Series 2006-1 Cash Collateral Account in accordance with Section 2.8(i).

 

    Section 6.20  Condition to Termination of CRCF’s Obligations.  Notwithstanding anything to the contrary in Section 11.1 of the Base Indenture, so long as this Supplement is in effect, CRCF may not terminate its obligations under the Indenture unless CRCF shall have delivered to the Surety Provider and each Series 2006-1 Interest Rate Swap Counterparty an Opinion of Counsel, in form and substance acceptable to the Surety Provider and each Series 2006-1 Interest Rate Swap Counterparty, to the effect that, in the event of a bankruptcy proceeding under the Bankruptcy Code in respect of CRCF, the Lessor or any Lessee, the bankruptcy court would not avoid any amounts distributed to the Series 2006-1 Noteholders, the Surety Provider or any Series 2006-1 Interest Rate Swap Counterparty in connection with such termination.

 

    Section 6.21  Confidential Information.  (a)  The Trustee and each Series 2006-1 Note Owner agrees, by its acceptance and holding of a beneficial interest in a Series 2006-1 Note, to maintain the confidentiality of all Confidential Information in accordance with procedures adopted by the Trustee or such Series 2006-1 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 6.21; (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 6.21; (iii) any other Series 2006-1 Note Owner; (iv) any Person of the type that would be, to such Person’s knowledge, permitted to acquire an interest in the Series 2006-1 Notes in accordance with the requirements of the Indenture to which such Person sells or offers to sell any such Series 2006-1 Note or any part thereof and that agrees to hold confidential the Confidential Information substantially in accordance with this Section 6.21 (or in accordance with such other confidentiality procedures as are acceptable to CRCF); (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 6.21 (or in accordance with such other confidentiality procedures as are acceptable to CRCF); (viii) any other Person with the consent of CRCF; 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 CRCF (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 CRCF (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 2006-1 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 2006-1 Notes, the Indenture or any other Related Document; and provided, further, however, that delivery to any Series 2006-1 Note Owner of any report or information required by the terms of the Indenture to be provided to such Series 2006-1 Note Owner shall not be a viola­tion of this Section 6.21.  Each Series 2006-1 Note Owner agrees, by acceptance of a beneficial interest in a Series 2006-1 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 2006-1 Notes or administering its investment in the Series 2006-1 Notes.  In the event of any required disclosure of the Confidential Information by such Series 2006-1 Note Owner, such Series 2006-1 Note Owner agrees to use reasonable efforts to protect the confiden­tiality of the Confidential Information.

			CENDANT RENTAL CAR FUNDING (AESOP) LLC
		By:	/s/ Lori Gebron
			Title: Vice President