Exhibit 4.2
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A.I. RECEIVABLES CORP.
Transferor
A.I. CREDIT CORP.
Original Transferor and Servicer
AICCO, INC.
Original Transferor and Servicer
and
THE FIRST NATIONAL BANK OF CHICAGO
Trustee on behalf of the
Series 1998-1 Certificateholders
SERIES 1998-1 SUPPLEMENT
Dated as of March [__], 1998
to
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of March [__], 1998
AIC PREMIUM FINANCE LOAN MASTER TRUST
SERIES 1998-1
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TABLE OF CONTENTS
Page
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SECTION 1. Designation ....................................................... 1
SECTION 2. Definitions and Certain Calculations .............................. 1
SECTION 3. Servicing Compensation ............................................ 14
SECTION 4. Cleanup Call ...................................................... 14
SECTION 5. Delivery and Payment for the Certificates ......................... 15
SECTION 6. Depository; Form of Delivery of Certificates; Transfer Restrictions 15
SECTION 7. Article IV of Agreement ........................................... 15
SECTION 4.04 Rights of Certificateholders ...................... 15
SECTION 4.05 Allocations ....................................... 16
SECTION 4.06 Determination of Monthly Interest ................. 18
SECTION 4.07 Determination of Monthly Principal ................ 19
SECTION 4.08 Coverage of Required Amount ....................... 20
SECTION 4.09 Monthly Payments .................................. 21
SECTION 4.10 Charge-Offs ....................................... 26
SECTION 4.11 Allocation of Yield Enhancement Amounts ........... 27
SECTION 4.12 Reallocated Principal Collections ................. 29
SECTION 4.13 Shared Principal Collections ...................... 29
SECTION 4.14 Series 1998-1 Yield Enhancement Account ........... 30
SECTION 4.15 Excess Funding Account ............................ 31
SECTION 4.16 Determination of LIBOR ............................ 31
SECTION 4.17 Failure to Make a Deposit or Payment .............. 32
SECTION 4.18 Effect of Other Series ............................ 33
SECTION 4.19 Excess Receivables ................................ 33
SECTION 8. Article V of the Agreement ........................................ 33
SECTION 5.01 Distributions ..................................... 33
SECTION 5.02 Monthly Certificateholders' Statement ............. 34
SECTION 9. Series 1998-1 Pay Out Events ...................................... 36
SECTION 10. Series 1998-1 Termination ......................................... 38
SECTION 11. Counterparts ...................................................... 38
SECTION 12. Governing Law ..................................................... 38
SECTION 13. No Petition ....................................................... 38
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EXHIBITS
Exhibit A-1 Form of Class A Certificate
Exhibit A-2 Form of Class B Certificate
Exhibit A-3 Form of Class C Certificate
Exhibit B Form of Monthly Certificateholders' Statement
ii
SERIES 1998-1 SUPPLEMENT, dated as of March [__], 1998 (this
"Series Supplement"), by and among A.I. Receivables Corp., a Delaware
corporation ("AIR"), as Transferor, A.I. Credit Corp., a New Hampshire
corporation ("AIC"), and AICCO, Inc., a California corporation and a wholly
owned subsidiary of AIC ("AICCO"), as Original Transferors and Servicer, and The
First National Bank of Chicago, as Trustee, under the Amended and Restated
Pooling and Servicing Agreement dated as of March [__], 1998 among AIR, AIC,
AICCO and the Trustee (as may be amended from time to time, the "Agreement").
Section 6.02 of the Agreement provides, among other things,
that the Original Transferors, the Transferor, the Servicer and the Trustee may
enter into a supplement to the Agreement for the purpose of authorizing the
execution and authentication by the Trustee of a Series of Investor
Certificates.
SECTION 1. Designation. (a) There is hereby created a Series
of Investor Certificates to be issued in three classes pursuant to the Agreement
and this Series Supplement and to be known together as the "Series 1998-1
Certificates." The three classes shall be designated the Series 1998-1 Floating
Rate Class A Asset Backed Certificates (the "Class A Certificates"), the Series
1998-1 Floating Rate Class B Asset Backed Certificates (the "Class B
Certificates"), and the Series 1998-1 Floating Rate Class C Asset Backed
Certificates (the "Class C Certificates"). The Class A Certificates, Class B
Certificates and Class C Certificates shall be substantially in the form of
Exhibits ▇-▇, ▇-▇ ▇▇▇ ▇-▇, respectively.
(b) Series 1998-1 shall not be subordinated to any other
Series.
SECTION 2. Definitions and Certain Calculations. In the event
that any term or provision contained herein shall conflict with or be
inconsistent with any provision contained in the Agreement, the terms and
provisions of this Series Supplement shall govern. All references in this Series
Supplement to Articles, Sections or subsections shall mean Articles, Sections or
subsections of the Agreement, except as the context otherwise requires. All
capitalized terms not otherwise defined herein are defined in the Agreement.
Each capitalized term defined herein shall relate only to the Series 1998-1
Certificates and no other Series of certificates issued by the Trust.
"Aggregate Default Amount" shall mean, with respect to any
Monthly Period, the sum of the Default Amounts in respect of such Monthly
Period.
"Annualized Monthly Excess Spread Amount" shall mean, in
respect of any Monthly Period, the number of basis points derived by dividing
(i) an amount equal to (A) the amount that is deposited (or would have been
deposited but for the operation of the third paragraph of subsection 4.03(a) of
the Agreement) in the Finance Charge Account pursuant to subsection 4.05(a)(i)
on each day during such Monthly Period, plus (B) the Available Yield Enhancement
Amount for the immediately succeeding Transfer Date, minus (C) the Aggregate
Default Amount for such Monthly Period, minus (D) the Investor Servicing Fee
payable on such Transfer Date, minus (E) the aggregate amount payable to
Certificateholders in respect of interest on the immediately succeeding
Distribution Date by (ii) the Certificateholders Ownership Interests as of the
end of such Monthly Period, and multiplying the resulting quotient by 12.
"Available Investor Principal Collections" (a) shall mean with
respect to the Series 1998-1 Certificates and any Monthly Period, an amount
equal to (i) the Investor Principal Collections
1
for such Monthly Period, minus (ii) the amount of Reallocated Principal
Collections with respect to such Monthly Period which pursuant to Section 4.12
are required to fund the Class A Required Amount and the Class B Required
Amount, plus (iii) the amount of Shared Principal Collections that are allocated
to Series 1998-1 in accordance with subsection 4.13(a), and (b) when used with
respect to any other Series, shall have the meaning specified in the applicable
Series supplement.
"Available Yield Enhancement Amount" shall mean, with respect
to any Transfer Date, (a) during the Revolving Period the product of (i) 2.0%
and (ii) the product of (A) the Collections for the related Monthly Period
otherwise allocable to the Transferor Ownership Interest and (B) the Floating
Investor Percentage divided by one minus the Aggregate Investor Percentage, and
(b) during the Controlled Amortization Period and the Rapid Amortization Period,
if any, the product of (i) 2.0% and (ii) the product of (A) the Collections for
the related Monthly Period otherwise allocable to the Transferor Ownership
Interest and (B) in the case of Collections of Finance Charge Receivables
allocable to the Transferor Ownership Interest, the Floating Investor Percentage
divided by one minus the Aggregate Investor Percentage, and in the case of
Collections of Principal Receivables allocable to the Transferor Ownership
Interest, the Fixed Investor Percentage divided by one minus the Aggregate
Investor Percentage; provided that in no event shall the Available Yield
Enhancement Amount for any Transfer Date exceed the sum of Class A Monthly
Interest, Class A Additional Interest, Class B Monthly Interest, Class B
Additional Interest, Class C Monthly Interest and Class C Additional Interest
for such Transfer Date.
"Business Day" shall mean, for the purpose of determining
LIBOR, any Business Day (as defined in the Agreement) other than a day on which
banking institutions in London, England trading in Dollar deposits in the London
interbank market are authorized or obligated by law or executive order to be
closed; for all other purposes, Business Day shall have the meaning provided in
the Agreement.
"Certificateholder" shall mean (a) with respect to the Class A
Certificates, the holder of record of a Class A Certificate, (b) with respect to
the Class B Certificates, the holder of record of a Class B Certificate, (c)
with respect to the Class C Certificates, the holder of record of a Class C
Certificate and (d) with respect to any Investor Certificate, the holder of
record of such Investor Certificate.
"Certificateholders Ownership Interests" shall mean, on any
date of determination, an amount equal to the sum of (a) the Class A Ownership
Interest, (b) the Class B Ownership Interest and (c) the Class C Ownership
Interest, each as of such date.
"Class A Additional Interest" shall have the meaning specified
in Section 4.06(a).
"Class A Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the Class A Floating Allocation of the
Collections of Finance Charge Receivables deposited in the Finance Charge
Account for such Monthly Period (or to be deposited in the Finance Charge
Account on the related Transfer Date with respect to the preceding Monthly
Period pursuant to the third paragraph of subsection 4.03(a) of the Agreement).
"Class A Certificate Rate" shall mean for the period from the
Closing Date through [_______________], [_____]% per annum and, for the period
from [______________] through [_______________] and with respect to each
Interest Period thereafter, a per annum rate equal to
2
[___]% in excess of LIBOR, as determined on the related LIBOR Determination
Date, subject to a maximum annual rate of [ ]%.
"Class A Certificateholder" shall mean the Person in whose
name a Class A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any of the certificates
executed and authenticated by or on behalf of the Trustee, substantially in the
form of Exhibit A-1 hereto.
"Class A Charge-Off" shall have the meaning specified in
4.10(a).
"Class A Controlled Amortization Period" shall mean an
amortization period commencing on [_______________] and continuing through the
earliest to occur of (i) the day before a Pay Out Commencement Date, (ii) the
date on which the Class A Ownership Interest has been paid in full, (iii) the
date of termination of the Trust pursuant to Section 12.01 of the Agreement and
(iv) the Series 1998-1 Termination Date.
"Class A Controlled Distribution Amount" shall mean, with
respect to each Distribution Date during the Class A Controlled Amortization
Period commencing with the Distribution Date in [_____________], an amount equal
to the Controlled Distribution Amount for such Distribution Date.
"Class A Default Amount" shall mean, with respect to each
Transfer Date, an amount equal to the product of (a) the Aggregate Default
Amount for the related Monthly Period and (b) the Class A Floating Allocation
applicable for the related Monthly Period.
"Class A Deficiency Amount" shall have the meaning specified
in subsection 4.06(a).
"Class A Floating Allocation" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class A Ownership Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Certificateholders Ownership Interests as
of the close of business on such day; provided, however, that, with respect to
the first Monthly Period, the Class A Floating Allocation shall mean the
percentage equivalent of a fraction, the numerator of which is the Class A
Initial Ownership Interest and the denominator of which is the Initial
Certificateholders Ownership Interests.
"Class A Initial Ownership Interest" shall mean the aggregate
initial principal amount of the Class A Certificates, which is $[_________].
"Class A Monthly Interest" shall have the meaning specified in
subsection 4.06(a).
"Class A Monthly Principal" shall mean the monthly principal
distributable in respect of the Class A Certificates as calculated in accordance
with subsection 4.07(a).
"Class A Ownership Interest" shall mean, on any date of
determination, an amount equal to (a) the Class A Initial Ownership Interest,
minus (b) the aggregate amount of principal payments made to Class A
Certificateholders prior to such date, minus (c) the aggregate amount of Class A
Charge-Offs for all prior Transfer Dates pursuant to subsection 4.10(a), minus
(d) the amount
3
of Reallocated Principal Collections allocated pursuant to subsection 4.12(a) on
all prior Transfer Dates for which the Class B Ownership Interest and the Class
C Ownership Interest have not been reduced and plus (e) the aggregate of the
amounts deducted pursuant to the foregoing clauses (c) and (d) deemed to have
been reimbursed on all prior Transfer Dates pursuant to subsection 4.11(c);
provided, however, that the Class A Ownership Interest may not be reduced below
zero.
"Class A Prior Period Interest" shall mean the sum, with
respect to each Interest Period in which the Class A Certificates would have
accrued interest on the Class A Ownership Interest had such Class A Ownership
Interest not been reduced for reasons other than the payment of principal to the
Class A Certificateholders, of an amount equal to the product of (i) the Class A
Certificate Rate in effect during such Interest Period plus 2% per annum, (ii)
the actual number of days in such Interest Period divided by 360 and (iii) the
amount by which the Class A Ownership Interest was less than the Class A
Ownership Interest during such Interest Period for reasons other than the
payment of principal to the Class A Certificateholders; provided, however, that
Class A Prior Period Interest shall not be distributed until the Distribution
Date or Distribution Dates following the Transfer Date on which the Class A
Ownership Interest has been reimbursed in full for any reductions.
"Class A Required Amount" shall have the meaning specified in
subsection 4.08(a).
"Class A Servicing Fee" shall have the meaning specified in
Section 3 hereof.
"Class B Additional Interest" shall have the meaning specified
in subsection 4.06(b).
"Class B Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the Class B Floating Allocation of the
Collections of Finance Charge Receivables deposited in the Finance Charge
Account for such Monthly Period (or to be deposited in the Finance Charge
Account on the related Transfer Date with respect to the preceding Monthly
Period pursuant to the third paragraph of subsection 4.03(a) of the Agreement).
"Class B Certificate Rate" shall mean, for the period from the
Closing Date through [______________], [____]% per annum and, for the period
from [______________] through [_______________] and with respect to each
Interest Period thereafter, a per annum rate equal to [____]% in excess of
LIBOR, as determined on the related LIBOR Determination Date, subject to a
maximum annual rate of [ ]%.
"Class B Certificateholder" shall mean the Person in whose
name a Class B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any of the certificates
executed and authenticated by or on behalf of the Trustee, substantially in the
form of Exhibit A-2 hereto.
"Class B Charge-Off" shall have the meaning specified in
subsection 4.10(b).
"Class B Controlled Amortization Period" shall mean an
amortization period commencing on the Distribution Date on which the Class A
Ownership Interest has been paid in full and continuing through the earliest to
occur of (i) the day before a Pay Out Commencement Date, (ii) the date on which
the Class B Ownership Interest has been paid in full, (iii) the date of
termination of the Trust pursuant to Section 12.01 of the Agreement or (iv) the
Series 1998-1 Termination Date.
4
"Class B Controlled Distribution Amount" shall mean, with
respect to each Distribution Date during the Class B Controlled Amortization
Period, an amount equal to the Controlled Distribution Amount for such
Distribution Date.
"Class B Default Amount" shall mean, with respect to each
Transfer Date, an amount equal to the product of (a) the Aggregate Default
Amount for the related Monthly Period and (b) the Class B Floating Allocation
applicable for the related Monthly Period.
"Class B Deficiency Amount" shall have the meaning specified
in subsection 4.06(b).
"Class B Floating Allocation" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class B Ownership Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Certificateholders Ownership Interests as
of the close of business on such day; provided, however, that, with respect to
the first Monthly Period, the Class B Floating Allocation shall mean the
percentage equivalent of a fraction, the numerator of which is the Class B
Initial Ownership Interest and the denominator of which is the Initial
Certificateholders Ownership Interests.
"Class B Initial Ownership Interest" shall mean the aggregate
initial principal amount of the Class B Certificates, which is $[_______].
"Class B Monthly Interest" shall have the meaning specified in
subsection 4.06(b).
"Class B Monthly Principal" shall mean the monthly principal
distributable in respect of the Class B Certificates as calculated in accordance
with subsection 4.07(b).
"Class B Ownership Interest" shall mean, on any date of
determination, an amount equal to (a) the Class B Initial Ownership Interest,
minus (b) the aggregate amount of principal payments made to Class B
Certificateholders prior to such date, minus (c) the aggregate amount of Class B
Charge-Offs for all prior Transfer Dates pursuant to subsection 4.10(b), minus
(d) the amount of Reallocated Principal Collections allocated pursuant to
subsection 4.12(a) on all prior Transfer Dates for which the Class C Ownership
Interest has not been reduced, minus (e) an amount equal to the amount by which
the Class B Ownership Interest has been reduced on all prior Transfer Dates
pursuant to subsection 4.10(a), and plus (f) the aggregate of the amounts
deducted pursuant to the foregoing clauses (c), (d) and (e) deemed to have been
reimbursed on all prior Transfer Dates pursuant to subsection 4.11(d); provided,
however, that the Class B Ownership Interest may not be reduced below zero.
"Class B Prior Period Interest" shall mean the sum, with
respect to each Interest Period in which the Class B Certificates would have
accrued interest on the Class B Ownership Interest had the Class B Ownership
Interest not been reduced for reasons other than the payment of principal to the
Class B Certificateholders, of an amount equal to the product of (i) the Class B
Certificate Rate in effect during such Interest Period plus 2% per annum, (ii)
the actual number of days in such Interest Period divided by 360 and (iii) the
amount by which the Class B Ownership Interest was less than the Class B
Ownership Interest during such Interest Period for reasons other than the
payment of principal to the Class B Certificateholders; provided, however, that
Class B Prior Period Interest shall not be
5
distributed until the Distribution Date or Distribution Dates following the
Transfer Date on which the Class B Ownership Interest has been reimbursed in
full for any reductions.
"Class B Required Amount" shall have the meaning specified in
subsection 4.08(b).
"Class B Servicing Fee" shall have the meaning specified in
Section 3 hereof.
"Class C Additional Interest" shall have the meaning specified
in subsection 4.06(c).
"Class C Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the Class C Floating Allocation of the
Collections of Finance Charge Receivables deposited in the Finance Charge
Account for such Monthly Period (or to be deposited in the Finance Charge
Account on the related Transfer Date with respect to the preceding Monthly
Period pursuant to the third paragraph of subsection 4.03(a) of the Agreement).
"Class C Certificate Rate" shall mean, for the period from the
Closing Date through [______________], [____]% per annum and, for the period
from [______________] through [_______________] and with respect to each
Interest Period thereafter, a per annum rate equal to [___]% in excess of LIBOR,
as determined on the related LIBOR Determination Date, subject to a maximum
annual rate of [ ]%.
"Class C Certificateholder" shall mean the Person in whose
name a Class C Certificate is registered in the Certificate Register.
"Class C Certificates" shall mean any of the certificates
executed and authenticated by or on behalf of the Trustee, substantially in the
form of Exhibit A-3 hereto.
"Class C Charge-Off" shall have the meaning specified in
subsection 4.10(c).
"Class C Controlled Amortization Period" shall mean an
amortization period commencing on the Distribution Date on which the Class B
Ownership Interest has been paid in full and continuing through the earliest to
occur of (i) the day before a Pay Out Commencement Date, (ii) the date on which
the Class C Ownership Interest has been paid in full, (iii) the date of
termination of the Trust pursuant to Section 12.01 of the Agreement or (iv) the
Series 1998-1 Termination Date.
"Class C Controlled Distribution Amount" shall mean, with
respect to each Distribution Date during the Class C Controlled Amortization
Period, an amount equal to the Controlled Distribution Amount for such
Distribution Date.
"Class C Default Amount" shall mean, with respect to any
Transfer Date, an amount equal to the product of (a) the Aggregate Default
Amount for the related Monthly Period and (b) the Class C Floating Allocation
applicable for the related Monthly Period.
"Class C Deficiency Amount" shall have the meaning specified
in subsection 4.06(c).
"Class C Floating Allocation" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class C Ownership Interest as
of the close of business on the last day of the preceding
6
Monthly Period and the denominator of which is equal to the Certificateholders
Ownership Interests as of the close of business on such day; provided, however,
that, with respect to the first Monthly Period, the Class C Floating Allocation
shall mean the percentage equivalent of a fraction, the numerator of which is
the Class C Initial Ownership Interest and the denominator of which is the
Initial Certificateholders Ownership Interests.
"Class C Initial Ownership Interest" shall mean the aggregate
initial principal amount of the Class C Certificates, which is $[_______].
"Class C Monthly Interest" shall have the meaning specified in
subsection 4.06(c).
"Class C Monthly Principal" shall mean the monthly principal
distributable in respect of the Class C Certificates as calculated in accordance
with subsection 4.07(c).
"Class C Ownership Interest" shall mean, on any date of
determination, an amount equal to (a) the Class C Initial Ownership Interest,
minus (b) the aggregate amount of principal payments made to Class C
Certificateholders prior to such date, minus (c) the aggregate amount of Class C
Charge-Offs for all prior Transfer Dates pursuant to subsection 4.10(c), minus
(d) the amount of Reallocated Principal Collections allocated pursuant to
subsection 4.12(a) on all prior Transfer Dates for which the Class C Ownership
Interest was to be reduced, minus (e) an amount equal to the amount by which the
Class C Ownership Interest has been reduced on all prior Transfer Dates pursuant
to subsections 4.10(a) and 4.10(b), and plus (f) the aggregate of the amounts
deducted pursuant to the foregoing clauses (c), (d) and (e) deemed to have been
reimbursed on all prior Transfer Dates pursuant to subsection 4.11(f); provided,
however, that the Class C Ownership Interest may not be reduced below zero.
"Class C Prior Period Interest" shall mean the sum, with
respect to each Interest Period in which the Class C Certificates would have
accrued interest on the Class C Ownership Interest had the Class C Ownership
Interest not been reduced for reasons other than the payment of principal to the
Class C Certificateholders, of an amount equal to the product of (i) the Class C
Certificate Rate in effect during such Interest Period plus 2% per annum, (ii)
the actual number of days in such Interest Period divided by 360 and (iii) the
amount by which the Class C Ownership Interest was less than the Class C
Ownership Interest during such Interest Period for reasons other than the
payment of principal to the Class C Certificateholders; provided, however, that
Class C Prior Period Interest will not be distributed until the Distribution
Date or Distribution Dates following the Transfer Date on which the Class C
Ownership Interest has been reimbursed in full for any reductions.
"Class C Required Amount" shall have the meaning specified in
subsection 4.08(c).
"Class C Servicing Fee" shall have the meaning specified in
Section 3 hereof.
"Closing Date" shall mean March [__], 1998.
"Controlled Amortization Amount" shall mean (a) for any
Distribution Date with respect to the Class A Controlled Amortization Period,
$[____________], (b) for any Distribution Date with respect to the Class B
Controlled Amortization Period, $[___________] and (c) for any Distribution Date
with respect to the Class C Controlled Amortization Period, $[___________].
7
"Controlled Amortization Period" shall mean any or all of the
Class A Controlled Amortization Period, the Class B Controlled Amortization
Period or the Class C Controlled Amortization Period, as the context may
require.
"Controlled Distribution Amount" shall mean, for any
Distribution Date with respect to the Controlled Amortization Period, an amount
equal to the sum of the applicable Controlled Amortization Amount for such
Distribution Date and any Deficit Controlled Amortization Amount for the
immediately preceding Distribution Date.
"Cumulative Series Principal Shortfall" shall mean the sum of
the Series Principal Shortfalls (as such term is defined in the related Series
Supplement) for each Series.
"Default Amount" shall mean, with respect to any Monthly
Period and any Receivable under a Loan that became a Defaulted Loan during such
Monthly Period, an amount equal to the product of (a) the unpaid amount
(including both principal and accrued unpaid finance charges) of such Receivable
as of the date that such Loan became a Defaulted Loan and (b) the Floating
Investor Percentage with respect to such Monthly Period; provided, however, that
the calculation of "Default Amount" shall in no event give effect to (x) losses
in respect of Excess Borrower Concentration Amounts computed pursuant to clause
(i) of the definition of Excess Receivables Amount or losses in respect of
Excess Insurer Concentration Amounts (to the extent relating to an Insurer
Insolvency Event) computed pursuant to clause (ii) of such definition or (y)
losses incurred after the occurrence of a Pay Out Event pursuant to subsection
9(d) hereof or after the Transferor Ownership Interest falls below the Minimum
Transferor Ownership Interest following the occurrence of any other Pay Out
Event.
"Deficit Controlled Amortization Amount" shall mean (a) on the
first Distribution Date with respect to the Class A Controlled Amortization
Period, the Class B Controlled Amortization Period or the Class C Controlled
Amortization Period, the excess, if any, of the Controlled Amortization Amount
for such Distribution Date over the amount distributed from the Series 1998-1
Distribution Account as Class A Monthly Principal, Class B Monthly Principal or
Class C Monthly Principal, as the case may be, for such Distribution Date and
(b) on each subsequent Distribution Date with respect to the Class A Controlled
Amortization Period, the Class B Controlled Amortization Period or the Class C
Controlled Amortization Period, the excess, if any, of the Controlled
Distribution Amount for such subsequent Distribution Date over the amount
distributed from the Series 1998-1 Distribution Account as Class A Monthly
Principal, Class B Monthly Principal or Class C Monthly Principal, as the case
may be, for such subsequent Distribution Date.
"Distribution Date" shall mean [______________], 1998 and the
fifteenth day of each calendar month thereafter, or if such fifteenth day is not
a Business Day, the next succeeding Business Day.
"Excess Finance Charges" shall mean, with respect to any
Transfer Date, the sum of (i) the excess of (a) Class A Available Funds for the
related Monthly Period over (b) the amounts distributable on such Transfer Date
pursuant to subsections 4.09(a)(i) through (iv), (ii) the excess, if any, of (a)
Class B Available Funds for the related Monthly Period over (b) the amounts
distributable on such Transfer Date pursuant to subsections 4.09(b)(i) through
(iv) and (iii) the excess, if any, of (a) Class C Available Funds for the
related Monthly Period over (b) the amounts distributable on such Transfer Date
pursuant to subsections 4.09(c)(i) through (iv).
8
"Excess Funding Account" shall have the meaning specified in
Section 4.15.
"Excess Receivables Amount" shall mean, as of any date of
determination, the sum of:
(i) the aggregate unpaid principal balance of all
Receivables in the Trust as of the end of the immediately preceding Monthly
Period having the same Obligor but only to the extent such aggregate balance
is in excess of 0.60% of the aggregate unpaid principal balance of all
Receivables in the Trust as of the end of such Monthly Period (such aggregate
excess amounts, the "Excess Borrower Concentration Amounts"); and
(ii) the greater of:
(a) the sum, for each ▇▇▇▇▇'▇ Non-Investment Grade
Insurer (including for this purpose any affiliated ▇▇▇▇▇'▇
Non-Investment Grade Insurer) of, if more than 5% of the
aggregate unpaid principal balance of all Receivables in the
Trust as of the end of such Monthly Period arise from Loans
made to finance premiums due to such insurer (including any
such affiliated insurer), the aggregate unpaid principal
balance of such Receivables but only to the extent in excess
of such percentage; and
(b) the sum, for each insurer (including any affiliated
insurer), of the greater of:
(I) if more than 2% of the aggregate unpaid principal
balance of all Receivables in the Trust as of the end of such
Monthly Period arise from Loans made to finance premiums due
to the same S&P Non-Investment Grade Insurer (including for
this purpose any affiliated S&P Non-Investment Grade Insurer),
the aggregate unpaid principal balance of such Receivables but
only to the extent in excess of such percentage; and
(II) if more than 4% of the aggregate unpaid principal
balance of all Receivables in the Trust as of the end of such
Monthly Period arise from Loans made to finance premiums due
to the same S&P Non-AAA Insurer (including for this purpose
any affiliated S&P Non-AAA Insurer), the aggregate unpaid
principal balance of such Receivables but only to the extent
in excess of such percentage (the greater of such aggregate
excess amounts in clauses (a) and (b), the "Excess Insurer
Concentration Amounts").
For purposes of making any calculation: (x) pursuant to clause (ii) above, any
amount that would be part of the Excess Receivables Amount under such clause
shall be taken into account only to the extent not already taken into account
under clause (i) and (y) pursuant to clause (i) or clause (ii) above, the
aggregate of the losses, if any, previously realized in respect of any Obligor
subject to clause (i) above or any insurer referred to in subclauses (a), (b)(I)
and/or (b)(II) of clause (ii) above (to the extent relating to an Insurer
Insolvency Event) shall reduce the percentage levels used in calculating the
excess amounts set forth or referred to in such clause or subclauses with
respect to any single Obligor or insurer.
"Financed Premium Percentage" shall mean, in respect of any
Monthly Period, the ratio (expressed as a percentage) of the aggregate of the
portions of premiums financed or committed to be financed, as of the respective
dates of origination of the Related Loans, of all Additional Receivables
9
transferred to the Trust during such Monthly Period to the aggregate of the
premiums paid or committed to be paid with respect to such Loans.
"Fixed Investor Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of which
is the Certificateholders Ownership Interests as of the close of business on the
last day of the Monthly Period that ends immediately prior to the last day of
the Revolving Period and the denominator of which is the greater of (a) the
aggregate amount of Principal Receivables in the Trust determined as of the
close of business on the last day of the prior Monthly Period and (b) the sum of
the numerators used to calculate the respective percentages allocable to holders
of Investor Certificates (as such term is defined in the Agreement) for
allocations with respect to Principal Receivables for all outstanding Series on
such date of determination.
"Floating Investor Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of which
is the Certificateholders Ownership Interests as of the close of business on the
last day of the preceding Monthly Period (or with respect to the first Monthly
Period, the Initial Certificateholders Ownership Interests) and the denominator
of which is the greater of (a) the aggregate amount of Principal Receivables as
of the close of business on the last day of the preceding Monthly Period (b) the
sum of the numerators used to calculate the respective percentages allocable to
holders of Investor Certificates (as such term is defined in the Agreement) for
allocations with respect to Finance Charge Receivables, Default Amounts or
Principal Receivables, as applicable, for all outstanding Series on such date of
determination.
"H.15(519)" shall mean the weekly statistical release
designated as such, published by the Board of Governors of the Federal Reserve
System (or such other release which may replace H.15(519)).
"Initial Certificateholders Ownership Interests" shall mean
$[__________].
"Insurer Insolvency Event" shall mean, with respect to any
insurer, the commencement of a state insolvency, receivership or similar
proceeding in respect of such insurer.
"Interest Period" shall mean, with respect to any Distribution
Date, the period from and including the Distribution Date immediately preceding
such Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"Investor Certificates" shall mean the Class A Certificates,
the Class B Certificates and the Class C Certificates.
"Investor Percentage" shall mean for any Monthly Period, (a)
with respect to Finance Charge Receivables and Default Amounts at any time and
Principal Receivables during the Revolving Period, the Floating Investor
Percentage and (b) with respect to Principal Receivables during the Controlled
Amortization Period or the Rapid Amortization Period, the Fixed Investor
Percentage.
"Investor Principal Collections" shall mean, with respect to
any Monthly Period, the sum of (a) the aggregate amount deposited into the
Principal Account for such Monthly Period pursuant to subsections 4.05(a)(ii),
(iii) and (iv), or 4.05(b)(ii), in each case, as applicable to such Monthly
Period, (b) the aggregate amount to be treated as Investor Principal Collections
pursuant to subsections 4.09(a)(iv), 4.09(b)(iv), 4.09(c)(iv), 4.11(c), 4.11(d)
and 4.11(f) for such Monthly Period (other than
10
such amount paid from Reallocated Principal Collections), and (c) the aggregate
amount of Collections on deposit in the Excess Funding Account on the related
Transfer Date that are to be deposited in the Principal Account pursuant to
subsection 4.09(f).
"Investor Servicing Fee" shall have the meaning specified in
Section 3 hereof.
"LIBOR" shall mean, for any Interest Period, the London
interbank offered rate for one-month Dollar deposits determined by the Trustee
for each Interest Period in accordance with the provisions of Section 4.16.
"LIBOR Determination Date" shall mean [_______________], 1998
for the period from [_______________], 1998 to [____________], 1998, and the
second Business Day prior to the commencement of the second and each subsequent
Interest Period.
"Maximum Yield Enhancement Amount" shall mean, with respect to
any Transfer Date, the amount calculated pursuant to the proviso to the
definition of "Available Yield Enhancement Amount," determined on the assumption
that the Class A Certificate Rate, the Class B Certificate Rate and the Class C
Certificate Rate used in determining Class A Monthly Interest, Class B Monthly
Interest and Class C Monthly Interest, respectively, equals in each case 16.00%
per annum.
"Monthly Payment Rate" shall mean, in respect of any Monthly
Period, a fraction (expressed as a percentage), the numerator of which shall
equal the aggregate Collections received by the Trust during such Monthly Period
and the denominator of which shall equal the aggregate amount of Principal
Receivables in the Trust at the end of the preceding Monthly Period.
"Monthly Period" shall have the meaning specified in the
Agreement.
"▇▇▇▇▇'▇ Non-Investment Grade Insurer" shall mean, on any date
of determination, an insurer that as of the end of the immediately preceding
Monthly Period did not have an insurance financial strength rating of at least
investment grade (i.e., in one of the top four generic rating categories,
irrespective of any plus or minus) by ▇▇▇▇▇'▇ (other than AIG or any wholly
owned subsidiary of AIG), unless ▇▇▇▇▇'▇ shall have previously notified the
Transferor in writing that such insurer is not to be deemed a ▇▇▇▇▇'▇
Non-Investment Grade Insurer (and shall not have revoked such notification).
"Net Servicing Fee Rate" shall mean (a) so long as AIC and
AICCO are collectively the Servicer, 0% per annum and (b) otherwise, 0.50% per
annum.
"91 Day Delinquency Amount" shall mean, as of any Transfer
Date, an amount equal to the product of (a) the Floating Investor Percentage and
(b) the aggregate outstanding principal amount as of the end of the immediately
preceding Monthly Period of the Loans relating to Receivables then in the Trust
that are then overdue 91 days or more after cancellation of the related
insurance policies (or, if cancellation was delayed, whether due to a stay by
reason of an Obligor's bankruptcy or other reason, after the date the policy
would have been cancelled in the absence of such delay).
"Pay Out Commencement Date" shall mean the date on which a
Trust Pay Out Event is deemed to occur pursuant to Section 9.01 or a Series
1998-1 Pay Out Event is deemed to occur pursuant to Section 9 hereof.
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"Pool Factor" shall mean, with respect to the last day of any
Monthly Period, a number carried out to seven decimals representing the ratio of
the Certificateholders Ownership Interests as of such day (determined after
taking into account any reduction therein which will occur on the Distribution
Date following such last day of such Monthly Period) to the Initial
Certificateholders Ownership Interests.
"Prior Period Interest" shall mean, with respect to any
Distribution Date, the sum of Class A Prior Period Interest, Class B Prior
Period Interest and Class C Prior Period Interest, if any, but only to the
extent due and payable to Certificateholders on such Distribution Date.
"Rapid Amortization Period" shall mean the Amortization Period
commencing on the Pay Out Commencement Date and ending on the earlier to occur
of (a) the Series 1998-1 Termination Date and (b) the termination of the Trust
pursuant to Section 12.01.
"Rating Agency" shall mean each of ▇▇▇▇▇'▇ and Standard &
Poor's.
"Reallocated Class A Principal Collections" shall mean, with
respect to any Transfer Date, Collections of Principal Receivables applied in
accordance with subsection 4.12(a) in an amount not to exceed the product of (a)
the Class A Floating Allocation with respect to the Monthly Period relating to
such Transfer Date and (b) the Investor Percentage with respect to the Monthly
Period relating to such Transfer Date and (c) the amount of Collections of
Principal Receivables with respect to the Monthly Period relating to such
Transfer Date; provided, however, that such amount shall not exceed the Class A
Ownership Interest after giving effect to any Class A Charge-Offs for such
Transfer Date.
"Reallocated Class B Principal Collections" shall mean, with
respect to any Transfer Date, Collections of Principal Receivables applied in
accordance with subsection 4.12(a) in an amount not to exceed the product of (a)
the Class B Floating Allocation with respect to the Monthly Period relating to
such Transfer Date and (b) the Investor Percentage with respect to the Monthly
Period relating to such Transfer Date and (c) the amount of Collections of
Principal Receivables with respect to the Monthly Period relating to such
Transfer Date; provided, however, that such amount shall not exceed the Class B
Ownership Interest after giving effect to any Class B Charge-Offs for such
Transfer Date.
"Reallocated Class C Principal Collections" shall mean, with
respect to any Transfer Date, Collections of Principal Receivables applied in
accordance with subsection 4.12(a) in an amount not to exceed the product of (a)
the Class C Floating Allocation with respect to the Monthly Period relating to
such Transfer Date and (b) the Investor Percentage with respect to the Monthly
Period relating to such Transfer Date and (c) the amount of Collections of
Principal Receivables with respect to the Monthly Period relating to such
Transfer Date; provided, however, that such amount shall not exceed the Class C
Ownership Interest after giving effect to any Class C Charge-Offs for such
Transfer Date.
"Reallocated Principal Collections" shall mean, with respect
to any Transfer Date, the sum of (a) Reallocated Class A Principal Collections
for such Transfer Date, (b) Reallocated Class B Principal Collections for such
Transfer Date and (c) Reallocated Class C Principal Collections for such
Transfer Date.
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"Reference Banks" shall mean four major banks in the London
interbank market selected by the Servicer and identified in an officer's
certificate delivered to the Trustee on the Closing Date or in any subsequent
officer's certificate delivered no later than one Business Day prior to any
applicable LIBOR Determination Date.
"Related Loan" shall mean, with respect to any Receivable in
the Trust on any date of determination, the Loan giving rise to such Receivable.
"Revolving Period" shall mean the period from and including
the Closing Date to, but not including, the earlier of (a) the day the Class A
Controlled Amortization Period commences and (b) the Pay Out Commencement Date.
"S&P Non-AAA Insurer" shall mean, on any date of
determination, an insurer that as of the end of the immediately preceding
Monthly Period did not have a claims-paying ability rating at least as high as
the then applicable rating assigned by Standard & Poor's to the Class A
Certificates, unless Standard & Poor's shall have previously notified the
Transferor in writing that such insurer is not to be deemed an S&P Non-AAA
Insurer (and shall not have revoked such notification).
"S&P Non-Investment Grade Insurer" shall mean, on any date of
determination, an insurer that as of the end of the immediately preceding
Monthly Period did not have a claims-paying ability rating of at least
investment grade (i.e., in one of the top four generic rating categories,
irrespective of any plus or minus) by Standard & Poor's (other than any
affiliate of AIG with a qualified solvency rating of BBBq from Standard &
Poor's), unless Standard & Poor's shall have previously notified the Transferor
in writing that such insurer is not to be deemed an S&P Non-Investment Grade
Insurer (and shall not have revoked such notification).
"Series 1998-1" shall mean the Series of the AIC Premium
Finance Loan Master Trust represented by the Investor Certificates.
"Series 1998-1 Certificateholder" shall mean the holder of
record of a Series 1998-1 Certificate.
"Series 1998-1 Certificates" shall mean the Class A
Certificates, the Class B Certificates and the Class C Certificates.
"Series 1998-1 Distribution Account" shall mean the account
established for the benefit of the Certificateholders pursuant to subsection
4.02(c) of the Agreement.
"Series 1998-1 Pay Out Event" shall have the meaning specified
in Section 9 hereof.
"Series 1998-1 Termination Date" shall mean the earlier to
occur of (a) the Distribution Date on which the Certificateholders Ownership
Interests are paid in full, or (b) the [__________] Distribution Date.
"Series 1998-1 Yield Enhancement Account" shall have the
meaning specified in subsection 4.14(a).
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"Series Principal Shortfall" shall mean with respect to the
Series 1998-1 Certificates and any Transfer Date, the excess, if any, of (a) (i)
with respect to any Transfer Date during the Controlled Amortization Period, the
applicable Controlled Distribution Amount for such Transfer Date or (ii) with
respect to any Transfer Date during the Rapid Amortization Period, the
Certificateholders Ownership Interests over (b) the Investor Principal
Collections minus the Reallocated Principal Collections for such Transfer Date.
"Shared Principal Collections" shall mean either (a) the
amount allocated to the Series 1998-1 Certificates which may be applied to the
"Series Principal Shortfall" with respect to other outstanding Series of
investor certificates or (b) the amounts allocated to the investor certificates
of other Series which the applicable supplements for such Series specify are to
be treated as "Shared Principal Collections" and which may be applied to cover
any Series Principal Shortfall with respect to the Series 1998-1 Certificates.
SECTION 3. Servicing Compensation. The share of the Servicing
Fee allocable to Series 1998-1 with respect to any Transfer Date (the "Investor
Servicing Fee") shall be equal to the sum of the Class A Servicing Fee, the
Class B Servicing Fee and the Class C Servicing Fee with respect to such date.
The share of the Servicing Fee allocable to the Class A Ownership Interest with
respect to any Transfer Date (the "Class A Servicing Fee") shall be equal to
one-twelfth of the product of (i) the Class A Floating Allocation, (ii) the Net
Servicing Fee Rate and (iii) the Certificateholders Ownership Interests as of
the last day of the Monthly Period preceding such Transfer Date. The share of
the Servicing Fee allocable to the Class B Ownership Interest with respect to
any Transfer Date (the "Class B Servicing Fee") shall be equal to one-twelfth of
the product of (i) the Class B Floating Allocation, (ii) the Net Servicing Fee
Rate and (iii) the Certificateholders Ownership Interests as of the last day of
the Monthly Period preceding such Transfer Date. The share of the Servicing Fee
allocable to the Class C Ownership Interest with respect to any Transfer Date
(the "Class C Servicing Fee") shall be equal to one-twelfth of the product of
(i) the Class C Floating Allocation, (ii) the Net Servicing Fee Rate and (iii)
the Certificateholders Ownership Interests as of the last day of the Monthly
Period preceding such Transfer Date. Except as specifically provided above, the
Servicing Fee shall be paid by the cash flows from the Trust allocated to the
Holder of the Transferor Certificate or the certificateholders of other Series
(as provided in the related Supplements) and in no event shall the Trust, the
Trustee or the Certificateholders be liable therefor. The Class A Servicing Fee
shall be payable to the Servicer solely to the extent amounts are available for
distribution in respect thereof pursuant to subsections 4.09(a)(iii) and
4.11(a). The Class B Servicing Fee shall be payable solely to the extent amounts
are available for distribution in respect thereof pursuant to subsections
4.09(b)(iii) and 4.11(b). The Class C Servicing Fee shall be payable solely to
the extent amounts are available for distribution in respect thereof pursuant to
subsections 4.09(c)(iii) and 4.11(e). For so long as AIC and AICCO are
collectively the Servicer, AIC and AICCO shall be entitled to apportion the
Servicing Fee between themselves in such manner as they see fit.
SECTION 4. Cleanup Call. The Investor Certificates shall be
subject to purchase by the Transferor at its option, in accordance with the
terms specified in subsection 12.02(a), on any Distribution Date on or after the
Distribution Date on which the Certificateholders Ownership Interests are
reduced to an amount less than or equal to $[________]. The deposit required in
connection with any such purchase will be equal to the sum of (a) the
Certificateholders Ownership Interests and (b) accrued and unpaid interest on
the Certificates through the day preceding the Distribution Date on which the
purchase occurs less the amounts, if any, on deposit at such Distribution Date
in the Series 1998-1 Distribution Account for the payment of principal and
interest due the Certificateholders.
14
SECTION 5. Delivery and Payment for the Certificates. The
Trustee shall execute, authenticate and deliver the Series 1998-1 Certificates
in accordance with Section 6.02 of the Agreement and Section 6 below.
SECTION 6. Depository; Form of Delivery of Certificates;
Transfer Restrictions.
(a) The Class A Certificates and the Class B Certificates
shall be delivered as Book-Entry Certificates as provided in Sections 6.01 and
6.10. The Class C Certificates shall be delivered as Registered Certificates in
certificated form as provided in Section 6.01, shall be registered in the name
of the Transferor and, notwithstanding anything to the contrary contained in the
Agreement, shall not be transferred, sold or pledged, in whole or in part, other
than pursuant to subsection 6(c) below.
(b) The Depository for Series 1998-1 shall be The Depository
Trust Company, and the Class A Certificates and Class B Certificates shall be
Registered Certificates initially registered in the name of Cede & Co., its
nominee.
(c) Pursuant to subsection 6.09(b) of the Agreement, the
Series 1998-1 Certificateholders shall have the right to tender their Series
1998-1 Certificates, and the Holder of the Transferor Certificate may reduce the
Transferor Ownership Interest, to effectuate the issuance of one or more new
Series of investor certificates in accordance with the terms and conditions
contained in a notice of new Series issuance delivered by the Trustee to the
Series 1998-1 Certificateholders. Any such notice shall specify, among other
things: (a) the amount of Series 1998-1 Certificates that may be tendered, (b)
the Certificate Rate with respect to the new Series, (c) the term of the new
Series, (d) the method of computing the investor percentage of the new Series,
(e) the Credit Enhancement, if any, with respect to the new Series and (f) the
time and the manner at which the tender and cancellation of the Series 1998-1
Certificates and the issuance of the new Series of Certificates will be
effectuated. Upon satisfaction of the conditions contained in subsections
6.09(b) and 6.09(c) of the Agreement, the Trustee shall cancel the applicable
Series 1998-1 Certificates and shall issue such Series of investor certificates,
dated the New Series Issuance Date.
SECTION 7. Article IV of Agreement. Sections 4.01, 4.02 and
4.03 shall be read in their entirety as provided in the Agreement. Article IV
(except for Sections 4.01, 4.02 and 4.03 thereof) shall read in its entirety as
follows and shall be applicable only to the Investor Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.04 Rights of Certificateholders. The Investor
Certificates shall represent undivided interests in the Trust, consisting of the
right to receive, to the extent necessary to make the required payments with
respect to such Investor Certificates at the times and in the amounts specified
in the Agreement and this Series Supplement, (a) the Floating Investor
Percentage and Fixed Investor Percentage (as applicable from time to time) of
Collections received with respect to the Receivables and (b) without
duplication, funds on deposit in the Collection Account, the Finance Charge
Account, the Principal Account, the Series 1998-1 Yield Enhancement Account, the
Excess Funding Account and the Series 1998-1 Distribution Account. The Class C
Certificates shall be subordinate to the Class A Certificates and the Class B
Certificates to the extent provided herein. The Class B Certificates shall be
subordinate to the Class A
15
Certificates to the extent provided herein. The Transferor Certificate shall not
represent any interest in the Collection Account, the Finance Charge Account,
the Principal Account, the Series 1998-1 Yield Enhancement Account, the Excess
Funding Account or the Series 1998-1 Distribution Account, except as
specifically provided in this Article IV.
SECTION 4.05 Allocations.
(a) Allocations During the Revolving Period and the Controlled
Amortization Period. During the Revolving Period and the Controlled Amortization
Period, the Servicer shall, prior to the close of business on the day any
Collections are deposited in the Collection Account, allocate to the
Certificateholders or the Holder of the Transferor Certificate and pay or
deposit from the Collection Account the following amounts as set forth below:
(i) Deposit into the Finance Charge Account an amount
equal to the product of (A) the Investor Percentage on the date of receipt of
such Collections and (B) the aggregate amount of Collections received in
respect of Finance Charge Receivables on such date, to be applied in
accordance with Section 4.09.
(ii) Deposit into the Principal Account an amount equal
to the product of (A) the Class C Floating Allocation on the date of receipt
of such Collections, (B) the Investor Percentage on the date of receipt of
such Collections and (C) the aggregate amount of Collections received in
respect of Principal Receivables on such date, to be applied first in
accordance with Section 4.12 and then in accordance with subsections 4.09(d)
and (e).
(iii) Deposit into the Principal Account an amount equal
to the product of (A) the Class B Floating Allocation on the date of receipt
of such Collections, (B) the Investor Percentage on the date of receipt of
such Collections and (C) the aggregate amount of Collections received in
respect of Principal Receivables on such date, to be applied first in
accordance with Section 4.12 and then in accordance with subsections 4.09(d)
and (e).
(iv) Deposit into the Principal Account an amount equal
to the product of (A) the Class A Floating Allocation on the date of receipt
of such Collections, (B) the Investor Percentage on the date of receipt of
such Collections and (C) the aggregate amount of Collections received in
respect of Principal Receivables on such date, to be applied first in
accordance with Section 4.12 and then in accordance with subsections 4.09(d)
and (e).
(v) Pay to the Holder of the Transferor Certificate
(without duplication) an amount equal to the excess, if any, of the aggregate
amount of Collections received in respect of Finance Charge Receivables and
Principal Receivables on the date of receipt of such Collections over the sum
of (A) the amounts deposited pursuant to subsections 4.05(a)(i), (ii), (iii)
and (iv) above; (B) the amount required to be deposited in the Series 1998-1
Yield Enhancement Account pursuant to subsection 4.14(b); and, (C) any
comparable provision of any other Supplement; provided, however, that the
amount to be paid to the Holder of the Transferor Certificate pursuant to
this subsection 4.05(a)(v) with respect to any such date shall be paid to
such Holder only to the extent that the Transferor Ownership Interest on such
date (after giving effect to the inclusion in the Trust of all Receivables
transferred to the Trust on or prior to such date and the application of
payments referred to in subsection 4.03(b)) is greater than the Minimum
Transferor Ownership Interest as of the end of
16
the immediately preceding Monthly Period and otherwise shall be deposited
into the Excess Funding Account in accordance with subsection 4.05(c) and any
comparable provision of any other Supplement; provided further, that in no
event shall the amount payable to the Holder of the Transferor Certificate
pursuant to this subsection 4.05(a)(v) and any comparable provision of any
other Supplement be greater than the Transferor Ownership Interest on such
date.
(b) Allocations During the Rapid Amortization Period. During
the Rapid Amortization Period, the Servicer shall, prior to the close of
business on the day any Collections are deposited in the Collection Account,
allocate to the Certificateholders and pay or deposit from the Collection
Account the following amounts as set forth below:
(i) Deposit into the Finance Charge Account an amount
equal to the product of (A) the Investor Percentage on the date of
receipt of such Collections and (B) the aggregate amount of Collections
received in respect of Finance Charge Receivables on such date, to be
applied in accordance with Section 4.09.
(ii) Deposit into the Principal Account an amount
equal to the product of (A) the Investor Percentage on the date of
receipt of such Collections and (B) the aggregate amount of Collections
received in respect of Principal Receivables on such date; provided,
however, that the amount deposited into the Principal Account pursuant
to this subsection 4.05(b)(ii) shall not exceed the Certificateholders
Ownership Interests as of the close of business on the last day of the
prior Monthly Period (after taking into account any payments to be made
on the Distribution Date relating to such prior Monthly Period).
(iii) Pay to the Holder of the Transferor Certificate
(without duplication) an amount equal to the excess, if any, of the
aggregate amount of Collections received in respect of Finance Charge
Receivables and Principal Receivables on the date of receipt of such
Collections over the sum of the amounts (A) deposited pursuant to
subsections 4.05(b)(i) and (ii) above; (B) the amount required to be
deposited in the Series 1998-1 Yield Enhancement Account pursuant to
subsection 4.14(b); and, (C) any comparable provision of any other
Supplement; provided, however, that the amount to be paid to the Holder
of the Transferor Certificate pursuant to this subsection 4.05(b)(iii)
and any comparable provision of any other Supplement with respect to
any such date shall be paid to such Holder only to the extent that the
Transferor Ownership Interest on such date (after giving effect to the
inclusion in the Trust of all Receivables transferred to the Trust on
or prior to such date and the application of payments referred to in
subsection 4.03(b)) is greater than the Minimum Transferor Ownership
Interest as of the end of the immediately preceding Monthly Period and
otherwise shall be deposited into the Excess Funding Account in
accordance with subsection 4.05(c); provided further, that in no event
shall the amount payable to the Holder of the Transferor Certificate
pursuant to this subsection 4.05(b)(iii) and any comparable provision
of any other Supplement be greater than the Transferor Ownership
Interest on such date.
(c) Excess Funding Collections. Any Collections in respect of
Principal Receivables or Finance Charge Receivables not allocated and paid to
the Holder of the Transferor Certificate because of the limitations contained in
subsections 4.05(a)(v), 4.05(b)(iii), 4.09(d)(ii), 4.09(e)(v) and 4.11(g) shall
be deposited in the Series 1998-1 Yield Enhancement Account and any other
comparable account to the extent required by such subsections and/or subsection
4.14(b) and any comparable provision of any other Supplement, and the remainder
shall be held in the Excess Funding Account and, prior to the
17
commencement of the Controlled Amortization Period or the Rapid Amortization
Period, shall be paid (without duplication) to the Holder of the Transferor
Certificate on any subsequent date when, and only to the extent that, the
Transferor Ownership Interest on such date is greater than the Minimum
Transferor Ownership Interest as of the end of the immediately preceding Monthly
Period.
Notwithstanding the preceding provisions of subsections
4.05(a) and 4.05(b), the deposits required by such subsections shall be subject
to the third paragraph of subsection 4.03(a) of the Agreement. With respect to
any Series of Certificates, and notwithstanding anything in the Agreement or any
Series Supplement to the contrary, whether or not the Servicer is required to
make monthly or daily deposits from the Collection Account into the Finance
Charge Account, the Principal Account or the Excess Funding Account pursuant to
subsections 4.05(a) and 4.05(b), with respect to any Monthly Period, (i) the
Servicer will only be required to deposit Collections from the Collection
Account into the Finance Charge Account, the Principal Account or the Excess
Funding Account up to the required amount to be deposited into any such deposit
account or, without duplication, distributed on or prior to the related
Distribution Date to the Certificateholders of all Series and (ii) if at any
time prior to such Distribution Date the amount of Collections deposited in the
Collection Account exceeds the amount required to be deposited pursuant to
clause (i) above, the Servicer will be permitted to withdraw the excess from the
Collection Account and allocate and pay such excess to the Holder of the
Transferor Certificate in accordance with subsection 4.03(c) of the Agreement.
SECTION 4.06 Determination of Monthly Interest.
(a) The amount of monthly interest distributable to the Class
A Certificates shall be determined as of each Transfer Date and shall be an
amount equal to the product of (i)(A) a fraction, the numerator of which is the
actual number of days in the related Interest Period and the denominator of
which is 360, times (B) the Class A Certificate Rate in effect with respect to
the related Interest Period, and (ii) the Class A Ownership Interest determined
as of the Record Date occurring during such Interest Period (the "Class A
Monthly Interest"); provided, however, that in addition to Class A Monthly
Interest an amount equal to the sum of (i) the amount of any unpaid Class A
Deficiency Amounts, as defined below, and (ii) an amount equal to the product of
(A) (1) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (2) a rate
equal to 2% over the Class A Certificate Rate in effect with respect to the
related Interest Period, and (B) any Class A Deficiency Amount from the prior
Transfer Date, as defined below (or the portion thereof which has not
theretofore been paid to Class A Certificateholders) (such sum, the "Class A
Additional Interest") shall also be distributable to the Class A Certificates;
provided further, that the "Class A Deficiency Amount" for any Transfer Date
shall be equal to the excess, if any, of the aggregate amount accrued pursuant
to this subsection 4.06(a) as of the prior Interest Period over the amount
actually paid in respect thereof on the preceding Distribution Date.
(b) The amount of monthly interest distributable to the Class
B Certificates shall be determined as of each Transfer Date and shall be an
amount equal to the product of (i)(A) a fraction, the numerator of which is the
actual number of days in the related Interest Period and the denominator of
which is 360, times (B) the Class B Certificate Rate in effect with respect to
the related Interest Period, and (ii) the Class B Ownership Interest determined
as of the Record Date occurring during such Interest Period (the "Class B
Monthly Interest"); provided, however, that in addition to Class B Monthly
Interest an amount equal to the sum of (i) the amount of any unpaid Class B
Deficiency Amounts, as defined below, and (ii) an amount equal to the product of
(A) (1) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is
18
360, times (2) a rate equal to 2% over the Class B Certificate Rate in effect
with respect to the related Interest Period, and (B) any Class B Deficiency
Amount from the prior Transfer Date, as defined below (or the portion thereof
which has not theretofore been paid to Class B Certificateholders) (such sum,
the "Class B Additional Interest") shall also be distributable to the Class B
Certificates; provided further, that the "Class B Deficiency Amount" for any
Transfer Date shall be equal to the excess, if any, of the aggregate amount
accrued pursuant to this subsection 4.06(b) as of the prior Interest Period over
the amount actually paid in respect thereof on the preceding Distribution Date.
Notwithstanding anything to the contrary herein, payment of any Class B
Additional Interest shall be suspended during any period when the Class B
Ownership Interest is zero and payment thereof shall be cancelled on the first
date during the Class B Controlled Amortization Period or, if applicable, the
Rapid Amortization Period when the Class B Ownership Interest is or becomes
zero.
(c) The amount of monthly interest distributable to the Class
C Certificates shall be determined as of each Transfer Date and shall be an
amount equal to the product of (i)(A) a fraction, the numerator of which is the
actual number of days in the related Interest Period and the denominator of
which is 360, times (B) the Class C Certificate Rate in effect with respect to
the related Interest Period, and (ii) the Class C Ownership Interest determined
as of the Record Date occurring during such Interest Period (the "Class C
Monthly Interest"); provided, however, that in addition to Class C Monthly
Interest an amount equal to the sum of (i) the amount of any unpaid Class C
Deficiency Amounts, as defined below, and (ii) an amount equal to the product of
(A) (1) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (2) a rate
equal to 2% over the Class C Certificate Rate in effect with respect to the
related Interest Period, and (B) any Class C Deficiency Amount from the prior
Transfer Date, as defined below (or the portion thereof which has not
theretofore been paid to Class C Certificateholders) (such sum, the "Class C
Additional Interest") shall also be distributable to the Class C Certificates;
provided further, that the "Class C Deficiency Amount" for any Transfer Date
shall be equal to the excess, if any, of the aggregate amount accrued pursuant
to this subsection 4.06(c) as of the prior Interest Period over the amount
actually paid in respect thereof on the preceding Distribution Date.
Notwithstanding anything to the contrary contained herein, payment of any Class
C Additional Interest shall be suspended during any period when the Class C
Ownership Interest is zero and payment thereof shall be cancelled on the first
date during the Class C Controlled Amortization Period or, if applicable, the
Rapid Amortization Period when the Class C Ownership Interest is or becomes
zero.
SECTION 4.07 Determination of Monthly Principal.
(a) The amount of monthly principal distributable from the
Principal Account with respect to the Class A Certificates on each Transfer
Date, beginning with the Transfer Date in the month in which the Class A
Controlled Amortization Period begins or, if earlier, the first Transfer Date
occurring after the Rapid Amortization Period begins, shall be equal to the
least of (i) the Available Investor Principal Collections on deposit in the
Principal Account with respect to such Transfer Date, (ii) for each Transfer
Date occurring during the Class A Controlled Amortization Period, commencing
with the [____________] Transfer Date, prior to the payment in full of the Class
A Ownership Interest, the Controlled Distribution Amount for the related
Distribution Date and (iii) the Class A Ownership Interest (after taking into
account any adjustments to be made on such Transfer Date pursuant to Sections
4.10 and 4.12) on such Transfer Date.
(b) The amount of monthly principal distributable from the
Principal Account with respect to the Class B Certificates on each Transfer
Date, for the Class B Controlled Amortization
19
Period, beginning with the Transfer Date immediately preceding the Distribution
Date on which the Class A Ownership Interest will have been paid in full, and
during the Rapid Amortization Period, beginning with the Transfer Date
immediately preceding the Distribution Date on which the Class A Ownership
Interest will have been paid in full, shall be an amount equal to the least of
(i) the Available Investor Principal Collections on deposit in the Principal
Account with respect to such Transfer Date (minus the portion of such Available
Investor Principal Collections applied to Class A Monthly Principal on such
Transfer Date), (ii) for each Transfer Date with respect to the Class B
Controlled Amortization Period prior to the payment in full of the Class B
Ownership Interest, the Controlled Distribution Amount for the related
Distribution Date (minus the portion of such Controlled Distribution Amount
applied to Class A Monthly Principal on such Transfer Date), and (iii) the Class
B Ownership Interest (after taking into account any adjustments to be made on
such Transfer Date pursuant to Sections 4.10 and 4.12) on such Transfer Date.
(c) The amount of monthly principal distributable from the
Principal Account with respect to the Class C Certificates on each Transfer
Date, for the Class C Controlled Amortization Period, beginning with the
Transfer Date immediately preceding the Distribution Date on which the Class B
Ownership Interest will have been paid in full, and during the Rapid
Amortization Period, beginning with the Transfer Date immediately preceding the
Distribution Date on which the Class B Ownership Interest will have been paid in
full, shall be an amount equal to the least of (i) the Available Investor
Principal Collections on deposit in the Principal Account with respect to such
Transfer Date (minus the portion of such Available Investor Principal
Collections applied to Class A Monthly Principal and Class B Monthly Principal
on such Transfer Date), (ii) for each Transfer Date with respect to the Class C
Controlled Amortization Period prior to the payment in full of the Class C
Ownership Interest, the Controlled Distribution Amount for the related
Distribution Date (minus the portion of such Controlled Distribution Amount
applied to Class A Monthly Principal and Class B Monthly Principal on such
Transfer Date), and (iii) the Class C Ownership Interest (after taking into
account any adjustments to be made on such Transfer Date pursuant to Sections
4.10 and 4.12) on such Transfer Date.
SECTION 4.08 Coverage of Required Amount. (a) On or before
each Transfer Date, the Servicer shall determine the amount (the "Class A
Required Amount"), if any, by which an amount equal to (i) the Class A Monthly
Interest for such Transfer Date, plus (ii) the Class A Additional Interest, if
any, for such Transfer Date, plus (iii) the Class A Servicing Fee for such
Transfer Date, plus (iv) the Class A Servicing Fee, if any, due but not paid on
any prior Transfer Date that will be distributable on the related Distribution
Date, plus (v) the Class A Default Amount, if any, for such Transfer Date, plus
(vi) Class A Prior Period Interest, if any, for such Transfer Date that will be
distributable on the related Distribution Date, exceeds the Class A Available
Funds for the related Monthly Period.
(b) On or before each Transfer Date, the Servicer shall also
determine the amount (the "Class B Required Amount"), if any, by which an amount
equal to (i) the Class B Monthly Interest for such Transfer Date, plus (ii) the
Class B Additional Interest, if any, for such Transfer Date, plus (iii) the
Class B Servicing Fee for such Transfer Date, plus (iv) the Class B Servicing
Fee, if any, due but not paid on any prior Transfer Date, plus (v) the Class B
Default Amount, if any, for such Transfer Date, plus (vi) Class B Prior Period
Interest, if any, for such Transfer Date that will be distributable on the
related Distribution Date, exceeds the Class B Available Funds for the related
Monthly Period.
20
(c) On or before each Transfer Date, the Servicer shall also
determine the amount (the "Class C Required Amount"), if any, by which an amount
equal to (i) the Class C Monthly Interest for such Transfer Date, plus (ii) the
Class C Additional Interest, if any, for such Transfer Date, plus (iii) the
Class C Servicing Fee for such Transfer Date, plus (iv) the Class C Servicing
Fee, if any, due but not paid on any prior Transfer Date, plus (v) the Class C
Default Amount, if any, for such Transfer Date, plus (vi) Class C Prior Period
Interest, if any, for such Transfer Date that will be distributable on the
related Distribution Date, exceeds the Class C Available Funds for the related
Monthly Period.
(d) In the event that the sum of the Class A Required Amount,
the Class B Required Amount and the Class C Required Amount for such Transfer
Date is greater than zero, the Servicer shall give written notice to the Trustee
thereof on such Transfer Date. In the event that the Class A Required Amount for
such Transfer Date is greater than zero, all or a portion of the funds on
deposit in the Series 1998-1 Yield Enhancement Account with respect to such
Transfer Date in an amount equal to the Class A Required Amount, to the extent
available, shall be distributed from the Series 1998-1 Yield Enhancement Account
on such Transfer Date pursuant to subsection 4.11(a). In the event that the
Class A Required Amount for such Transfer Date exceeds the amount of funds on
deposit in the Series 1998-1 Yield Enhancement Account with respect to such
Transfer Date, the Collections of Principal Receivables allocable to each Class
of Investor Certificates with respect to the prior Monthly Period shall be
applied as specified in Section 4.12. In the event that the Class B Required
Amount for such Transfer Date is greater than zero, all or a portion of the
funds on deposit in the Series 1998-1 Yield Enhancement Account with respect to
such Transfer Date in an amount equal to the Class B Required Amount, to the
extent available, shall be distributed from the Series 1998-1 Yield Enhancement
Account on such Transfer Date pursuant to Section 4.11(b). In the event that the
Class B Required Amount for such Transfer Date exceeds the amount of funds on
deposit in the Series 1998-1 Yield Enhancement Account available to fund the
Class B Required Amount pursuant to subsection 4.11(b), the Collections of
Principal Receivables allocable to each Class of Investor Certificates shall be
applied as specified in Section 4.12.
SECTION 4.09 Monthly Payments. On or before each Transfer
Date, the Servicer shall instruct the Trustee in writing (which writing shall be
substantially in the form of the Monthly Servicer Report) to withdraw and the
Trustee, acting in accordance with such instructions, shall withdraw on such
Transfer Date or the related Distribution Date, as applicable, to the extent of
available funds, the amounts in respect of the Series 1998-1 Certificates
required to be withdrawn from the Finance Charge Account, the Principal Account,
the Excess Funding Account and the Series 1998-1 Distribution Account, as
follows:
(a) An amount equal to the Class A Available Funds deposited
into the Finance Charge Account for the related Monthly Period (together with
funds deposited into the Finance Charge Account on such Transfer Date pursuant
to subsection 4.11(a) and 4.12(a)(i)) shall be distributed in the following
priority:
(i) an amount equal to Class A Monthly Interest for
such Transfer Date shall be deposited into the Series 1998-1
Distribution Account;
(ii) an amount equal to Class A Additional Interest
for such Transfer Date shall be deposited into the Series 1998-1
Distribution Account;
21
(iii) an amount equal to the Class A Servicing Fee
for such Transfer Date plus the amount of any Class A Servicing Fee due
but not paid to the Servicer on any prior Transfer Date shall be
distributed to the Servicer;
(iv) an amount equal to the Class A Default Amount,
if any, for such Transfer Date shall be treated as a portion of
Investor Principal Collections and deposited into the Principal Account
on such Transfer Date; and
(v) an amount equal to Class A Prior Period Interest,
if any, to the extent distributable on the related Distribution Date,
shall be deposited into the Series 1998-1 Distribution Account.
(b) An amount equal to the Class B Available Funds deposited
into the Finance Charge Account for the related Monthly Period (together with
funds deposited into the Finance Charge Account on such Transfer Date pursuant
to subsection 4.11(b) and 4.12(a)(ii)) shall be distributed in the following
priority:
(i) an amount equal to the Class B Monthly Interest
for such Transfer Date shall be deposited into the Series 1998-1
Distribution Account;
(ii) an amount equal to Class B Additional Interest
for such Transfer Date shall be deposited into the Series 1998-1
Distribution Account;
(iii) an amount equal to the Class B Servicing Fee
for such Transfer Date plus the amount of any Class B Servicing Fee due
but not paid to the Servicer on any prior Transfer Date shall be
distributed to the Servicer;
(iv) an amount equal to the Class B Default Amount,
if any, for such Transfer Date shall be treated as a portion of
Investor Principal Collections and deposited into the Principal Account
for such Transfer Date; and
(v) an amount equal to Class B Prior Period Interest,
if any, to the extent distributable on the related Distribution Date,
shall be deposited into the Series 1998-1 Distribution Account.
(c) An amount equal to the Class C Available Funds deposited
into the Finance Charge Account for the related Monthly Period (together with
funds deposited into the Finance Charge Account on such Transfer Date pursuant
to subsection 4.11(e)) shall be distributed in the following priority:
(i) an amount equal to Class C Monthly Interest for
such Transfer Date, shall be deposited into the Series 1998-1
Distribution Account;
(ii) an amount equal to Class C Additional Interest
for such Transfer Date shall be deposited into the Series 1998-1
Distribution Account;
(iii) an amount equal to the Class C Servicing Fee
for such Transfer Date, plus the amount of any Class C Servicing Fee
due but not paid to the Servicer on any prior Transfer Date shall be
distributed to the Servicer;
22
(iv) an amount equal to the Class C Default Amount,
if any, for such Transfer Date shall be treated as a portion of
Investor Principal Collections and deposited into the Principal Account
on such Transfer Date; and
(v) an amount equal to Class C Prior Period Interest,
if any, to the extent distributable on the related Distribution Date,
shall be deposited into the Series 1998-1 Distribution Account.
(d) During the Revolving Period, an amount equal to the
Available Investor Principal Collections for Series 1998-1 deposited into the
Principal Account for the related Monthly Period (giving effect to amounts to be
deposited therein on such Transfer Date pursuant to subsections 4.09(a)(iv),
4.09(b)(iv), 4.09(c)(iv), 4.11(c), 4.11(d) and 4.11(f)) shall be distributed in
the following priority:
(i) an amount equal to the lesser of (A) the product
of (1) a fraction, the numerator of which is equal to the Available
Investor Principal Collections for Series 1998-1 and the denominator of
which is equal to the sum of the Available Investor Principal
Collections available for sharing as specified in the related Series
Supplement for each Series and (2) the Cumulative Series Principal
Shortfall, if any, and (B) Available Investor Principal Collections for
Series 1998-1, shall remain in the Principal Account to be treated as
Shared Principal Collections and applied to Series other than this
Series 1998-1; and
(ii) an amount equal to the excess, if any, of (A)
the Available Investor Principal Collections for Series 1998-1 for such
Monthly Period over (B) the applications specified in subsection
4.09(d)(i) above shall be paid on such Transfer Date, without
duplication, to the Holder of the Transferor Certificate; provided,
however, that the amount to be paid to such Holder pursuant to this
subsection 4.09(d)(ii) with respect to such date shall be paid only if
the Transferor Ownership Interest on such date (after giving effect to
the inclusion in the Trust of all Receivables transferred to the Trust
on or prior to such date and the application of payments referred to in
subsection 4.03(b)) is greater than the Minimum Transferor Ownership
Interest as of the end of the immediately preceding Monthly Period and
otherwise shall be deposited into the Excess Funding Account in
accordance with subsection 4.05(c); provided further, that in no event
shall the amount payable to the Holder of the Transferor Certificate
pursuant to this subsection 4.09(d)(ii) be greater than the Transferor
Ownership Interest on such Transfer Date.
(e) During the Controlled Amortization Period or the Rapid
Amortization Period, an amount equal to the Available Investor Principal
Collections for Series 1998-1 deposited into the Principal Account for the
related Monthly Period (giving effect to amounts to be deposited therein on such
Transfer Date pursuant to subsections 4.09(a)(iv), 4.09(b)(iv), 4.09(c)(iv),
4.09(f), 4.11(c), 4.11(d) and 4.11(f)) shall be distributed in the following
priority:
(i) an amount equal to the Class A Monthly Principal
for such Transfer Date shall be deposited into the Series 1998-1
Distribution Account;
(ii) for each Distribution Date beginning with the
Distribution Date on which the Class A Ownership Interest is paid in
full, after giving effect to the distribution referred to
23
in clause (i) above, an amount equal to the Class B Monthly Principal
for such Transfer Date shall be deposited into the Series 1998-1
Distribution Account;
(iii) for each Distribution Date beginning with the
Distribution Date on which the Class B Ownership Interest is paid in
full, after giving effect to the distribution referred to in clauses
(i) and (ii) above, an amount equal to the Class C Monthly Principal
for such Transfer Date shall be deposited into the Series 1998-1
Distribution Account;
(iv) an amount equal to the lesser of (A) the product
of (1) a fraction, the numerator of which is equal to the Available
Investor Principal Collections for Series 1998-1 remaining after the
applications specified in subsections 4.09(e)(i), (ii) and (iii) above
and the denominator of which is equal to the sum of the Available
Investor Principal Collections available for sharing as specified in
the related Series Supplement for each Series and (2) the Cumulative
Series Principal Shortfall, if any, and (B) the Available Investor
Principal Collections for Series 1998-1 remaining after the
applications specified in subsections 4.09(e)(i), (ii) and (iii) above,
shall remain in the Principal Account to be treated as Shared Principal
Collections and applied to Series other than this Series 1998-1; and
(v) an amount equal to the excess, if any, of (A) the
Available Investor Principal Collections for Series 1998-1 for such
Monthly Period over (B) the applications specified in subsection
4.09(e)(i) through (iv) above shall be paid on such Transfer Date to
the Holder of the Transferor Certificate; provided, however, that the
amount to be paid to such Holder pursuant to this subsection 4.09(e)(v)
with respect to such date shall be paid only if the Transferor
Ownership Interest on such date (after giving effect to the inclusion
in the Trust of all Receivables transferred to the Trust on or prior to
such date and the application of payments referred to in subsection
4.03(b)) is greater than the Minimum Transferor Ownership Interest as
of the end of the immediately preceding Monthly Period and otherwise
shall be deposited into the Excess Funding Account in accordance with
subsection 4.05(c); provided further, that in no event shall the amount
payable to the Holder of the Transferor Certificate pursuant to this
subsection 4.09(e)(v) be greater than the Transferor Ownership Interest
on such Transfer Date.
(f) On each Transfer Date with respect to the Controlled
Amortization Period, any amounts on deposit in the Excess Funding Account on
such Transfer Date (or, if such Transfer Date also relates to an Amortization
Period for any other Series, a portion of such amounts determined on a pari
passu basis in accordance with the fixed investor percentage of each such other
Series and the Fixed Investor Percentage for Series 1998-1) shall be deposited
into the Principal Account and included in the Investor Principal Collections to
be applied pursuant to subsection 4.09(e) on such Transfer Date. On the earlier
to occur of the first Transfer Date with respect to the Rapid Amortization
Period or the Transfer Date immediately preceding the Series 1998-1 Termination
Date, and on each subsequent Transfer Date occurring during the Rapid
Amortization Period, the Trustee, acting in accordance with instructions from
the Servicer, shall withdraw from the Excess Funding Account and deposit in the
Principal Account for application as Investor Principal Collections pursuant to
subsection 4.09(e) the entire amount on deposit in the Excess Funding Account
(or, if such Transfer Date also relates to an Amortization Period for any other
Series, a portion of such amount determined on a pari passu basis in accordance
with the fixed investor percentage of each such other Series and the Fixed
Investor Percentage for Series 1998-1).
24
(g) On each Distribution Date during the Revolving Period, the
Trustee shall pay in accordance with Section 5.01 from the Series 1998-1
Distribution Account the following amounts (in each case determined as of the
immediately preceding Transfer Date) in the following order of priority:
(i) to the Class A Certificateholders:
(A) Class A Monthly Interest;
(B) Class A Additional Interest, if any;
(C) Class A Prior Period Interest, if
any, to the extent distributable on such Distribution
Date;
(ii) to the Class B Certificateholders:
(A) Class B Monthly Interest;
(B) Class B Additional Interest, if any;
(C) Class B Prior Period Interest, if
any, to the extent distributable on such Distribution
Date;
(iii) to the Class C Certificateholders:
(A) Class C Monthly Interest;
(B) Class C Additional Interest, if any;
(C) Class C Prior Period Interest, if
any, to the extent distributable on such Distribution
Date.
(h) On the earlier to occur of the first Distribution Date in
the month in which the Class A Controlled Amortization Period begins or the
first Distribution Date occurring after the Rapid Amortization Period begins,
and on each Distribution Date thereafter, the Trustee, acting in accordance with
instructions from the Servicer, shall pay in accordance with Section 5.01 from
the Series 1998-1 Distribution Account the following amounts (in each case
determined as of the immediately preceding Transfer Date) in the following order
of priority:
(i) to the Class A Certificateholders:
(A) Class A Monthly Interest;
(B) Class A Additional Interest, if any;
(C) Class A Prior Period Interest, if
any, to the extent distributable on such Distribution
Date;
(ii) to the Class B Certificateholders:
25
(A) Class B Monthly Interest;
(B) Class B Additional Interest, if any;
(C) Class B Prior Period Interest, if
any, to the extent distributable on such Distribution
Date;
(iii) to the Class A Certificateholders, Class A
Monthly Principal;
(iv) to the Class B Certificateholders, Class B
Monthly Principal;
(v) to the Class C Certificateholders:
(A) Class C Monthly Interest;
(B) Class C Additional Interest, if any;
(C) Class C Prior Period Interest, if
any, to the extent distributable on such Distribution
Date;
(D) Class C Monthly Principal.
SECTION 4.10 Charge-Offs.
(a) On each Transfer Date, the Servicer shall calculate the
Class A Default Amount. If on any Transfer Date, the Class A Default Amount for
such Transfer Date exceeds the sum of the amounts allocated with respect thereto
pursuant to subsection 4.09(a)(iv) and, without duplication, subsection 4.11(a)
and Section 4.12 with respect to such Transfer Date, the Class C Ownership
Interest (after giving effect to reductions therein for any Class C Charge-Offs
and any Reallocated Principal Collections on such Transfer Date) shall be
reduced by the amount of such excess. In the event that such reduction would
cause the Class C Ownership Interest to be a negative number, the Class C
Ownership Interest will be reduced to zero and the Class B Ownership Interest
(after giving effect to reductions therein for any Class B Charge-Offs and any
Reallocated Principal Collections on such Transfer Date) shall be reduced by the
amount by which the Class C Ownership Interest would have been reduced below
zero. In the event that such reduction would cause the Class B Ownership
Interest to be a negative number, the Class B Ownership Interest shall be
reduced to zero and the Class A Ownership Interest shall be reduced (but not
below zero) by the amount by which the Class B Ownership Interest would have
been reduced below zero (a "Class A Charge-Off"). The Class A Ownership Interest
shall then be reduced (but not below zero) by the amount of Reallocated
Principal Collections in excess of the Class B Ownership Interest and the Class
C Ownership Interest allocated thereto pursuant to Section 4.12. The Class A
Ownership Interest will thereafter be deemed to be reimbursed on any subsequent
Transfer Date (but not in excess of reductions in the Class A Ownership Interest
that have not been previously reimbursed) by the amount of funds on deposit in
the Series 1998-1 Yield Enhancement Account pursuant to subsection 4.11(c).
(b) On each Transfer Date, the Servicer shall calculate the
Class B Default Amount. If on any Transfer Date, the Class B Default Amount for
such Transfer Date exceeds the sum of the amounts allocated with respect thereto
pursuant to subsection 4.09(b)(iv) and, without duplication,
26
subsection 4.11(b) and Section 4.12, the Class C Ownership Interest (after
giving effect to reductions therein for any Class C Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and any adjustments with
respect thereto as described in subsection 4.10(a) above) shall be reduced by
the amount of such excess. In the event that such reduction would cause the
Class C Ownership Interest to be a negative number, the Class C Ownership
Interest shall be reduced to zero and the Class B Ownership Interest shall be
reduced (but not below zero) by the amount by which the Class C Ownership
Interest would have been reduced below zero (a "Class B Charge-Off"). The Class
B Ownership Interest shall then be reduced (but not below zero) by the amount of
Reallocated Principal Collections in excess of the Class C Ownership Interest
allocated thereto pursuant to Section 4.12 and then by the amount of any portion
of the Class B Ownership Interest allocated to the Class A Certificates to avoid
a reduction in the Class A Ownership Interest pursuant to subsection 4.10(a)
above. The Class B Ownership Interest will thereafter be deemed to be reimbursed
(but not in excess of reductions in the Class B Ownership Interest that have not
been previously reimbursed) on any subsequent Transfer Date by the amount of
funds on deposit in the Series 1998-1 Yield Enhancement Account pursuant to
subsection 4.11(d).
(c) On each Transfer Date, the Servicer shall calculate the
Class C Default Amount. If on any Transfer Date, the Class C Default Amount for
such Transfer Date exceeds the amount allocated with respect thereto pursuant to
subsection 4.09(c)(iv) and, without duplication, subsection 4.11(e), the Class C
Ownership Interest shall be reduced by the amount of such excess but not by more
than the lesser of the Class C Default Amount and the Class C Ownership Interest
for such Transfer Date (a "Class C Charge-Off"). The Class C Ownership Interest
shall then be reduced (but not below zero) by the amount of Reallocated
Principal Collections allocated thereto pursuant to Section 4.12, then by the
amount of any portion of the Class C Ownership Interest allocated to the Class A
Certificates to avoid a reduction in the Class A Ownership Interest pursuant to
subsection 4.10(a) and then by the amount of any portion of the Class C
Ownership Interest allocated to the Class B Certificates to avoid a reduction in
the Class B Ownership Interest pursuant to subsection 4.10(b). The Class C
Ownership Interest will thereafter be deemed to be reimbursed (but not in excess
of reductions in the Class C Ownership Interest that have not been previously
reimbursed) on any subsequent Transfer Date by the amount of funds on deposit in
the Series 1998-1 Yield Enhancement Account pursuant to subsection 4.11(f).
(d) For purposes of calculating the Default Amount and the
Excess Receivables Amount, the Servicer shall keep records sufficient to track
cumulative losses in respect of Receivables on an Obligor-by-Obligor basis and
on an insurer-by-insurer basis.
(e) Except as otherwise expressly provided herein, if losses
and investment expenses attributable to the investment of amounts on deposit in
any Investor Account or any Series Account shall exceed interest and investment
earnings in respect of such amounts during any Monthly Period, the net losses
and expenses shall be allocated between the certificateholders ownership
interests of all outstanding Series, on the one hand, and the Transferor
Ownership Interest, on the other hand, in the same proportion that losses in
respect of Receivables are so allocated for such Monthly Period.
SECTION 4.11 Allocation of Yield Enhancement Amounts. On each
Transfer Date, the Trustee, acting pursuant to the Servicer's instructions,
shall apply funds on deposit in the Series 1998-1 Yield Enhancement Account with
respect to the related Monthly Period (after giving effect to the deposits to be
made therein on such date pursuant to Section 4.14) to make the following
distributions in the following priority:
27
(a) an amount equal to the Class A Required Amount, if any,
with respect to such Transfer Date will be transferred to the Finance Charge
Account and used to fund the Class A Required Amount in accordance with, and in
the priority set forth in, subsection 4.09(a);
(b) an amount equal to the Class B Required Amount, if any,
with respect to such Transfer Date will be transferred to the Finance Charge
Account and used to fund the Class B Required Amount in accordance with, and in
the priority set forth in, subsection 4.09(b);
(c) an amount equal to the aggregate amount by which the Class
A Ownership Interest has been reduced below the initial Class A Ownership
Interest on previous Transfer Dates for reasons other than the payment of
principal to the Class A Certificateholders (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) will be
treated as a portion of Investor Principal Collections and deposited into the
Principal Account on such Transfer Date (and the Class A Ownership Interest
shall be deemed to have been reimbursed by such amount but only if the Class A
Ownership Interest shall not have previously been reduced to zero during the
Class A Controlled Amortization Period or Rapid Amortization Period);
(d) an amount equal to the aggregate amount by which the Class
B Ownership Interest has been reduced below the initial Class B Ownership
Interest on previous Transfer Dates for reasons other than the payment of
principal to the Class B Certificateholders (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) will be
treated as a portion of Investor Principal Collections and deposited into the
Principal Account on such Transfer Date (and the Class B Ownership Interest
shall be deemed to have been reimbursed by such amount but only if the Class B
Ownership Interest shall not have previously been reduced to zero during the
Class B Controlled Amortization Period or Rapid Amortization Period);
(e) an amount equal to the Class C Required Amount, if any,
with respect to such Transfer Date will be transferred to the Finance Charge
Account and used to fund the Class C Required Amount in accordance with, and in
the priority set forth in, subsection 4.09(c);
(f) an amount equal to the aggregate amount by which the Class
C Ownership Interest has been reduced below the initial Class C Ownership
Interest on previous Transfer Dates for reasons other than the payment of
principal to the Class C Certificateholders (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) will be
treated as a portion of Investor Principal Collections and deposited into the
Principal Account on such Transfer Date (and the Class C Ownership Interest
shall be deemed to have been reimbursed by such amount but only if the Class C
Ownership Interest shall not have previously been reduced to zero during the
Class C Controlled Amortization Period or Rapid Amortization Period); and
(g) the balance, if any, in excess of the 91 Day Delinquency
Amount, after giving effect to the payments made pursuant to subsections (a)
through (f) above, shall be paid on such Transfer Date to the Holder of the
Transferor Certificate (but only if a Pay Out Event has not theretofore
occurred); provided, however, that the amount to be paid to such Holder pursuant
to this subsection 4.11(g) with respect to such date shall be paid only if the
Transferor Ownership Interest on such date (after giving effect to the inclusion
in the Trust of all Receivables transferred to the Trust on or prior to such
date and the application of payments referred to in subsection 4.03(b)) is
greater than the Minimum Transferor Ownership Interest as of the end of the
immediately preceding Monthly Period and otherwise shall be deposited into the
Excess Funding Account in accordance with Section 4.05(c);
28
provided further, that in no event shall the amount payable to the Holder of the
Transferor Certificate pursuant to this subsection 4.11(g) be greater than the
Transferor Ownership Interest on such Transfer Date. Funds remaining on deposit
in the Series 1998-1 Yield Enhancement Account under this subsection 4.11(g)
shall be available on the next succeeding Transfer Date for application,
together with any additional amounts required to be deposited therein on or
prior to such Transfer Date as provided elsewhere herein, in accordance with
this Section 4.11.
SECTION 4.12 Reallocated Principal Collections.
(a) On each Transfer Date, the Trustee shall apply Reallocated
Principal Collections (applying first all Reallocated Class C Principal
Collections, then Reallocated Class B Principal Collections and finally
Reallocated Class A Principal Collections, to the extent necessary) with respect
to such Transfer Date, to make the following distributions in the following
priority:
(i) an amount equal to the excess, if any, of (A) the
Class A Required Amount, if any, with respect to such Transfer Date
over (B) the amount of funds on deposit in the Series 1998-1 Yield
Enhancement Account and available to cover the Class A Required Amount
pursuant to subsection 4.11(a) on such Transfer Date shall be
transferred to the Finance Charge Account and applied pursuant to
subsection 4.09(a); and
(ii) an amount equal to the excess, if any, of (A) the
Class B Required Amount, if any, with respect to such Transfer Date
over (B) the amount of funds on deposit in the Series 1998-1 Yield
Enhancement Account and available to cover the Class B Required Amount
pursuant to subsection 4.11(b) on such Transfer Date shall be
transferred to the Finance Charge Account and applied pursuant to
subsection 4.09(b).
(b) On each Transfer Date the Class C Ownership Interest shall
be reduced by the amount of Reallocated Principal Collections for such Transfer
Date. In the event that such reduction would cause the Class C Ownership
Interest (after giving effect to any Class C Charge-Offs for such Transfer Date)
to be a negative number, the Class C Ownership Interest (after giving effect to
any Class C Charge-Offs for such Transfer Date) shall be reduced to zero and the
Class B Ownership Interest shall be reduced by the amount by which the Class C
Ownership Interest would have been reduced below zero. In the event that the
reallocation of Reallocated Principal Collections pursuant to the preceding
sentence would cause the Class B Ownership Interest (after giving effect to any
Class B Charge-Offs for such Transfer Date) to be a negative number on any
Transfer Date, the Class B Ownership Interest (after giving effect to any Class
B Charge-Offs for such Transfer Date) shall be reduced to zero and the Class A
Ownership Interest (after giving effect to any Class A Charge-Offs for such
Transfer Date) shall be reduced (but not below zero) by the amount by which the
Class B Ownership Interest would have been reduced below zero.
SECTION 4.13 Shared Principal Collections.
(a) The portion of Shared Principal Collections on deposit in
the Principal Account equal to the amount of Shared Principal Collections
allocable to Series 1998-1 on any Transfer Date shall be treated as part of
Available Investor Principal Collections and applied pursuant to Section 4.09.
(b) Shared Principal Collections allocable to Series 1998-1
with respect to any Transfer Date shall mean an amount equal to the Series
Principal Shortfall, if any, with respect to Series 1998-1
29
for such Transfer Date; provided, however, that if the aggregate amount of
Shared Principal Collections for all Series for such Transfer Date is less than
the Cumulative Series Principal Shortfall for such Transfer Date, then Shared
Principal Collections allocable to Series 1998-1 on such Transfer Date shall
equal the product of (i) Shared Principal Collections for all Series for such
Transfer Date and (ii) a fraction, the numerator of which is the Series
Principal Shortfall with respect to Series 1998-1 for such Transfer Date and the
denominator of which is the Cumulative Series Principal Shortfall for all Series
for such Transfer Date.
(c) Solely for the purpose of determining the amount of
Available Investor Principal Collections for Series 1998-1 to be treated as
Shared Principal Collections on any Transfer Date allocable to other Series, on
each Determination Date the Servicer shall determine the Class A Required
Amount, the Class B Required Amount, the Class C Required Amount, the Available
Yield Enhancement Amount and Reallocated Principal Collections as of such
Determination Date for the following Transfer Date.
SECTION 4.14 Series 1998-1 Yield Enhancement Account.
(a) The Servicer shall establish and maintain with a Qualified
Institution in the name of the Trustee, on behalf of the Trust, for the benefit
of the Series 1998-1 Certificateholders, a segregated account (the "Series
1998-1 Yield Enhancement Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders. The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Series 1998-1 Yield Enhancement
Account and in all proceeds thereof. The Series 1998-1 Yield Enhancement Account
shall be under the sole dominion and control of the Trustee for the benefit of
the Certificateholders. If at any time the institution holding the Series 1998-1
Yield Enhancement Account ceases to be a Qualified Institution, the Trustee
shall notify each Rating Agency and within 10 Business Days establish a new
Series 1998-1 Yield Enhancement Account meeting the conditions specified above
with a Qualified Institution, and shall transfer any cash or any investments to
such new Series 1998-1 Yield Enhancement Account.
(b) On each Transfer Date, an amount equal to the Available
Yield Enhancement Amount shall be deposited by the Trustee into the Series
1998-1 Yield Enhancement Account out of Collections otherwise allocable to the
Holder of the Transferor Certificate for the Monthly Period immediately
preceding such Transfer Date. If Collections otherwise allocable to the Holder
of the Transferor Certificate for such Monthly Period on such Transfer Date are
not sufficient therefor, then the Transferor shall deposit the amount of such
insufficiency out of its own funds. Notwithstanding the two preceding sentences
or subsection 4.03(c) or the third paragraph of subsection 4.03(a) of the
Agreement, if AIR is no longer the Transferor or if the AIR Support Agreement is
not in effect with respect to AIR, then prior to any payment to the Holder of
the Transferor Certificate pursuant to subsections 4.05(a)(v) or 4.05(b)(iii),
there shall be deposited into the Series 1998-1 Yield Enhancement Account on
each date amounts allocable to the Series 1998-1 Certificates otherwise
allocable to such Holder until the amount so deposited equals the Maximum Yield
Enhancement Amount for the next Transfer Date. In addition, on each Transfer
Date (prior to giving effect to the withdrawals set forth in Section 4.09) the
amount of any Excess Finance Charges shall be withdrawn from the Finance Charge
Account and deposited into the Series 1998-1 Yield Enhancement Account. The
Trustee, at the direction of the Servicer, shall make withdrawals from the
Series 1998-1 Yield Enhancement Account from time to time, in the amounts and
for the purposes set forth in Section 4.11.
30
(c) Funds deposited into the Series 1998-1 Yield Enhancement
Account pursuant to the third sentence of subsection 4.14(b) or remaining on
deposit therein pursuant to the last paragraph of Section 9 shall be invested at
the direction of the Transferor by the Trustee in Permitted Investments that
will mature so that such funds will be available for withdrawal on or prior to
the following Transfer Date. The Trustee shall maintain for the benefit of the
Certificateholders possession of the negotiable instruments or securities, if
any, evidencing such Permitted Investments. No Permitted Investment shall be
disposed of prior to its maturity. Except as otherwise provided in subsection
4.11(g) above, on each Transfer Date, after giving effect to withdrawals from
the Series 1998-1 Yield Enhancement Account required by subsection 4.14(b), all
amounts remaining on deposit in the Series 1998-1 Yield Enhancement Account,
including interest and earnings (net of losses and investment expenses, which
shall reduce the amounts on deposit therein) accrued on funds on deposit in the
Series 1998-1 Yield Enhancement Account, shall be paid to the Holder of the
Transferor Certificate.
SECTION 4.15 Excess Funding Account.
(a) The Servicer has established and maintained and shall
continue to maintain, with a Qualified Institution, in the name of the Trustee,
on behalf of the Trust, for the benefit of the certificateholders of all
outstanding Series, including the Certificateholders, a segregated trust account
(the "Excess Funding Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of such certificateholders.
The Trustee shall possess all right, title and interest in all funds on deposit
from time to time in the Excess Funding Account and in all proceeds thereof. The
Excess Funding Account shall be under the sole dominion and control of the
Trustee for the benefit of the certificateholders of all outstanding Series,
including the Certificateholders. If at any time the institution holding the
Excess Funding Account ceases to be a Qualified Institution, the Trustee shall
notify each Rating Agency and within 10 Business Days establish a new Excess
Funding Account meeting the conditions specified above with a Qualified
Institution, and shall transfer any cash or any investments to such new Excess
Funding Account. The Trustee, at the direction of the Servicer, shall (i) make
withdrawals from the Excess Funding Account from time to time for the purposes
set forth in subsections 4.05(c) and 4.09(f), and any comparable provision of
any Supplement and (ii) make deposits into the Excess Funding Account as
specified in subsection 4.05(c) and any comparable provision of any Supplement.
(b) Funds on deposit in the Excess Funding Account shall be
invested at the direction of the Transferor by the Trustee in Permitted
Investments. Funds on deposit in the Excess Funding Account on any Transfer
Date, after giving effect to any withdrawals from the Excess Funding Account on
such Transfer Date, shall be invested in such investments that will mature so
that such funds will be available for withdrawal on or prior to the following
Transfer Date. The Trustee shall maintain for the benefit of the
certificateholders of all outstanding Series, including the Certificateholders,
possession of the negotiable instruments or securities, if any, evidencing such
Permitted Investments. No Permitted Investment shall be disposed of prior to its
maturity. All interest and earnings (net of losses and investment expenses)
accrued on funds on deposit in the Excess Funding Account shall be retained in
the Excess Funding Account (to the extent that the Transferor Ownership Interest
on any date does not exceed the Minimum Transferor Ownership Interest as of the
end of the immediately preceding Monthly Period).
SECTION 4.16 Determination of LIBOR.
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(a) On each LIBOR Determination Date, the Trustee shall
determine LIBOR on the basis of the rate for Dollar deposits for a period equal
to one month (commencing on the first day of the applicable Interest Period)
which appears on Telerate Page 3750 as of 11:00 A.M. (London time) on such LIBOR
Determination Date (or such other page as may replace that page on the Dow ▇▇▇▇▇
Telerate Service for the purpose of displaying London interbank offered rates of
major banks).
(b) If on any LIBOR Determination Date such rate does not
appear on Telerate Page 3750 (or such other page), then LIBOR for the applicable
Interest Period shall be determined on the basis of the rates at which Dollar
deposits are offered by the Reference Banks at approximately 11:00 A.M. (London
time) on such LIBOR Determination Date to prime banks in the London interbank
market for a period equal to one month (commencing on the first day of such
Interest Period). The Trustee shall request the principal London office of each
of the Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for such Interest Period shall be the
arithmetic mean of such quotations (rounded, if necessary, to the nearest whole
multiple of 0.0625%). If on the LIBOR Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR shall be:
(i) the rate per annum (rounded, as aforesaid) that
the Trustee determines to be the arithmetic mean of the offered
quotations that leading banks in the City of New York selected by the
Servicer are quoting at or about 11:00 A.M. (New York time) on such
LIBOR Determination Date to leading European banks for Dollar deposits
for a period equal to one month (commencing on the first day of the
applicable Interest Period); or
(ii) if the banks selected as aforesaid by the
Servicer are not quoting as described in clause (i) above, LIBOR for
such Interest Period will be LIBOR as determined on the previous LIBOR
Determination Date (or, in the case of the first LIBOR Determination
Date, 6.0625% per annum).
(c) The Class A Certificate Rate, the Class B Certificate Rate
and the Class C Certificate Rate applicable to the then current and the
immediately preceding Interest Periods may be obtained by any Certificateholder
by telephoning the Trustee at its Corporate Trust Office at [(▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇].
(d) On each LIBOR Determination Date prior to 12:00 noon (New
York time), the Trustee shall send to the Servicer, by facsimile, notification
of LIBOR for the following Interest Period.
SECTION 4.17 Failure to Make a Deposit or Payment.
If the Servicer or the Transferor fails to make, or give
instructions to make, any payment, deposit or withdrawal (other than as required
by subsections 2.04(d) and (e) and 12.02(a) or Sections 10.02 and 12.01)
required to be made or given by the Servicer or the Transferor, respectively, at
the time specified in the Agreement or this Series Supplement (including
applicable grace periods), the Trustee shall make such payment, deposit or
withdrawal from the applicable Investor Account or other Series 1998-1 account
without instruction from the Servicer or the Transferor. The Trustee shall be
required to make any such payment, deposit or withdrawal hereunder only to the
extent that the Trustee has sufficient information to allow it to determine the
amount thereof; provided, however, that the Trustee shall in all cases be deemed
to have sufficient information to determine the amount of interest payable to
the Series 1998-1 Certificateholders on each Distribution Date. The Servicer
shall,
32
upon request of the Trustee, promptly provide the Trustee with all information
necessary to allow the Trustee to make such payment, deposit or withdrawal. Such
funds or the proceeds of such withdrawal shall be applied by the Trustee in the
manner in which such payment or deposit should have been made by the Transferor
or the Servicer, as the case may be.
SECTION 4.18 Effect of Other Series.
Notwithstanding anything to the contrary contained herein, in
the event that additional Series of certificates are issued from time to time in
accordance with Section 6.09 of the Agreement, the Excess Funding Account may be
retitled in order to reflect the fact that amounts on deposit therein shall be
for the additional benefit of the holders of such other Series and the amounts
to be deposited therein and withdrawn therefrom may be calculated with reference
to such other Series as well as to Series 1998-1 and Series 1994-1; provided
that no such action or calculation shall adversely affect the interests of the
Series 1998-1 Certificateholders in any material respect.
SECTION 4.19 Excess Receivables.
On any date of determination, the Minimum Transferor Ownership
Interest shall be calculated by adding the Excess Receivables Amount to the
amount derived pursuant to clause (a) of the definition of Minimum Transferor
Ownership Interest in the Agreement unless (i) prior to such date there shall
have been delivered to the Trustee (a) a written agreement, in form and
substance satisfactory to the Rating Agencies, executed by a Person having a
long-term unsecured debt rating of AAA from Standard & Poor's and Aaa from
▇▇▇▇▇'▇ pursuant to which such Person shall have unconditionally agreed to
indemnify the Trust for all amounts constituting the Excess Receivables Amount
at any time and (b) written confirmation from each of the Rating Agencies to the
effect that such substitution will not result in such Rating Agency reducing or
withdrawing its rating on any then outstanding Class of Investor Certificates
and (ii) the agreement and the rating referred to in clause (a) above remain in
effect on such date of determination and such agreement provides that it shall
continue in effect through at least the end of the first full Monthly Period
following such date of determination.
SECTION 8. Article V of the Agreement. Article V of the
Agreement shall read in its entirety as follows and shall be applicable only to
the Certificateholders:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
SECTION 5.01 Distributions. (a) On each Distribution Date, the
Trustee shall distribute (in accordance with the Monthly Servicer Report
delivered by the Servicer to the Trustee pursuant to subsection 3.04(b)) to each
Class A Certificateholder of record on the immediately preceding Record Date
(other than as provided in Section 12.03 respecting a final distribution) such
Certificateholder's pro rata share (based on the aggregate Undivided Interests
represented by Class A Certificates held by such Certificateholder) of amounts
on deposit in the Series 1998-1 Distribution Account as are payable to the Class
A Certificateholders pursuant to Section 4.09 by check mailed to each Class A
Certificateholder (at such Certificateholder's address as it appears in the
Certificate
33
Register), except that with respect to Class A Certificates registered in the
name of the nominee of a Clearing Agency, such distribution shall be made in
immediately available funds.
(b) On each Distribution Date, the Trustee shall distribute
(in accordance with the Monthly Servicer Report delivered by the Servicer to the
Trustee pursuant to subsection 3.04(b)) to each Class B Certificateholder of
record on the immediately preceding Record Date (other than as provided in
Section 12.03 respecting a final distribution) such Certificateholder's pro rata
share (based on the aggregate Undivided Interests represented by Class B
Certificates held by such Certificateholder) of amounts on deposit in the Series
1998-1 Distribution Account as are payable to the Class B Certificateholders
pursuant to Section 4.09 by check mailed to each Class B Certificateholder (at
such Certificateholder's address as it appears in the Certificate Register),
except that with respect to Class B Certificates registered in the name of the
nominee of a Clearing Agency, such distribution shall be made in immediately
available funds.
(c) On each Distribution Date, the Trustee shall distribute
(in accordance with the Monthly Servicer Report delivered by the Servicer to the
Trustee pursuant to subsection 3.04(b)) to each Class C Certificateholder of
record on the immediately preceding Record Date (other than as provided in
Section 12.03 respecting a final distribution) such Certificateholder's pro rata
share (based on the aggregate Undivided Interests represented by Class C
Certificates held by such Certificateholder) of amounts on deposit in the Series
1998-1 Distribution Account as are payable to the Class C Certificateholders
pursuant to Section 4.09 by check mailed to each Class C Certificateholder (at
such Certificateholder's address as it appears in the Certificate Register).
(d) Notwithstanding anything to the contrary contained in the
Agreement or this Series Supplement, if the amount distributable in respect of
principal on any Class of Certificates on any Distribution Date is less than one
dollar, then no such distribution of principal need be made on such Distribution
Date.
SECTION 5.02 Monthly Certificateholders' Statement.
(a) On or before each Distribution Date, the Trustee shall
forward to each Series 1998-1 Certificateholder and each Rating Agency a
statement substantially in the form of Exhibit B to this Series Supplement
prepared by the Servicer and delivered to the Trustee on the preceding
Determination Date and setting forth, among other things, the following
information (which, in the case of subclauses (i), (ii) and (iii) below, shall
be stated on the basis of an original principal amount of $1,000 per Certificate
and, in the case of subclauses (ix), (x) and (xi) shall be stated on an
aggregate basis and on the basis of an original principal amount of $1,000 per
Certificate):
(i) the total amount distributed to holders of
Investor Certificates;
(ii) the amount of such distribution allocable to
Class A Monthly Principal, Class B Monthly Principal and Class C
Monthly Principal, respectively;
(iii) the amount of such distribution allocable to
Class A Monthly Interest, Class A Additional Interest, Class B Monthly
Interest, Class B Additional Interest, Class C Monthly Interest and
Class C Additional Interest, respectively;
34
(iv) the amount of Collections of Principal
Receivables received during the related Monthly Period and allocated in
respect of the Investor Certificates;
(v) the amount of Collections of Finance Charge
Receivables received during the related Monthly Period and allocated in
respect of the Investor Certificates;
(vi) the aggregate amount of Principal Receivables,
the Certificateholders Ownership Interests, the Class A Ownership
Interest, the Class B Ownership Interest, the Class C Ownership
Interest, the Floating Investor Percentage, the Class A Floating
Allocation, the Class B Floating Allocation, the Class C Floating
Allocation and the Fixed Investor Percentage with respect to the
Principal Receivables in the Trust as of the end of the preceding
Monthly Period;
(vii) the aggregate outstanding balance of
Receivables which were 1-30 days, 31-60 days, 61-90 days, 91-120 days,
121-150 days and more than 150 days delinquent, respectively, following
cancellation of the related insurance policies in accordance with the
Servicer's then existing Guidelines as of the end of the preceding
Monthly Period (or, if cancellation was delayed, whether due to a stay
by reason of an Obligor's bankruptcy or other reason, after the date
the policy would have been cancelled in the absence of such delay);
(viii) the Aggregate Default Amount as of the end of
the preceding Monthly Period and the Class A Default Amount, the Class
B Default Amount and the Class C Default Amount for the related
Transfer Date;
(ix) the aggregate amount of Class A Charge-Offs,
Class B Charge-Offs, Class C Charge-Offs and other reductions in the
absence of principal distributions in the Certificateholders Ownership
Interests for such Transfer Date;
(x) the aggregate amount of Class A Charge-Offs,
Class B Charge-Offs, Class C Charge-Offs and other reductions in the
absence of principal distributions in the Certificateholders Ownership
Interests deemed to have been reimbursed on such Transfer Date;
(xi) the aggregate amount of Prior Period Interest,
the Class A Prior Period Interest, the Class B Prior Period Interest
and the Class C Prior Period Interest reimbursed on such Distribution
Date;
(xii) the amount of the Class A Servicing Fee, the
Class B Servicing Fee and the Class C Servicing Fee for such Transfer
Date;
(xiii) the amount of Reallocated Class C Principal
Collections, Reallocated Class B Principal Collections and Reallocated
Class A Principal Collections with respect to such Distribution Date;
(xiv) LIBOR for the Interest Period ending on the day
before such Distribution Date;
(xv) the Pool Factor as of the end of the immediately
preceding Monthly Period;
35
(xvi) the Available Yield Enhancement Amount, the
aggregate of any Excess Finance Charges deposited into the Series
1998-1 Yield Enhancement Account, the 91 Day Delinquency Amount and the
amount, if any, of funds required to be withdrawn from the Series
1998-1 Yield Enhancement Account for such Transfer Date;
(xvii) the amount of Class A Available Funds, Class B
Available Funds and Class C Available Funds on deposit in the Finance
Charge Account on the related Transfer Date;
(xviii) the date on which the Class A Controlled
Amortization Period, the Class B Controlled Amortization Period, the
Class C Controlled Amortization Period and/or the Rapid Amortization
Period commenced; and
(xix) such other items as are set forth in Exhibit B
to this Series Supplement.
(b) Annual Certificateholders' Tax Statement. On or before
January 31 of each calendar year, beginning with calendar year 1999, the Trustee
shall distribute to each Person who at any time during the preceding calendar
year was a Series 1998-1 Certificateholder, a statement prepared by the Trustee
containing the information required to be contained in the regular monthly
report to Series 1998-1 Certificateholders, as set forth in subclauses (i), (ii)
and (iii) above, aggregated for such calendar year or the applicable portion
thereof during which such Person was a Series 1998-1 Certificateholder, together
with such other customary information (consistent with the treatment of the
Certificates as debt) as the Trustee deems necessary or desirable to enable the
Series 1998-1 Certificateholders to prepare their tax returns. Such obligations
of the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Internal Revenue Code as from time to time in effect.
SECTION 9. Series 1998-1 Pay Out Events. If any one of the
following events (a "Series 1998-1 Pay Out Event") shall occur with respect to
the Investor Certificates:
(a) (i) failure on the part of either of the Original
Transferors or the Transferor to make any payment or deposit required by the
terms of the Agreement or this Series Supplement, on or before the date
occurring five Business Days after the date such payment or deposit is required
to be made herein or (ii) failure on the part of either of the Original
Transferors or the Transferor duly to observe or perform in any material respect
any other covenants or agreements of such entity set forth in the Agreement or
this Series Supplement, which failure has a material adverse effect on the
Certificateholders (which determination shall be made without reference to
whether any funds are available in the Series 1998-1 Yield Enhancement Account
or by reason of the subordination of any Class of Investor Certificates) and
continues unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to such entity by the Trustee, or to such entity and the Trustee by the Holders
of Certificates evidencing Undivided Interests aggregating not less than 50% of
the Certificateholders Ownership Interests of this Series 1998-1, and continues
to affect materially and adversely the interests of the Certificateholders
(which determination shall be made without reference to whether any funds are
available in the Series 1998-1 Yield Enhancement Account or by reason of the
subordination of any Class of Investor Certificates) for such period;
36
(b) any representation or warranty made by either of the
Original Transferors or the Transferor in the Agreement or this Series
Supplement, or any information contained in a computer file or microfiche list
required to be delivered by such entity pursuant to Section 2.01 or 2.06, (i)
shall prove to have been incorrect in any material respect when made or when
delivered, which continues to be incorrect in any material respect for a period
of 60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to such entity by the Trustee, or to
such entity and the Trustee by the Holders of Certificates evidencing Undivided
Interests aggregating not less than 50% of the Certificateholders Ownership
Interests of this Series 1998-1, and (ii) as a result of which the interests of
the Series 1998-1 Certificateholders are materially and adversely affected
(which determination shall be made without reference to whether any funds are
available in the Series 1998-1 Yield Enhancement Account or by reason of the
subordination of any Class of Investor Certificates) and continue to be
materially and adversely affected (which determination shall be made without
reference to whether any funds are available in the Series 1998-1 Yield
Enhancement Account or by reason of the subordination of any Class of Investor
Certificates) for such period; provided, however, that a Series 1998-1 Pay Out
Event pursuant to this subsection 9(b) shall not be deemed to have occurred
hereunder if the related Original Transferor or the Transferor, as applicable,
has accepted reassignment of the related Receivable, or all of such Receivables,
if applicable, during such period in accordance with the provisions of
subsections 2.04(e) or 2.04(f) of the Agreement;
(c) if the Financed Premium Percentage exceeds 90% for three
consecutive Monthly Periods;
(d) the Transferor Ownership Interest as of any Determination
Date does not at least equal the Minimum Transferor Ownership Interest as of the
end of the immediately preceding Monthly Period and on the immediately following
Transfer Date the Transferor shall have failed to transfer Additional
Receivables to the Trust as required by subsection 2.06(a) of the Agreement;
(e) any Servicer Default occurs which would have a material
adverse effect on the Certificateholders (which determination shall be made
without reference to whether any funds are available in the Series 1998-1 Yield
Enhancement Account or by reason of the subordination of the Class C Ownership
Interest);
(f) if the Monthly Payment Rate is less than 14% for three
consecutive Monthly Periods; or
(g) if the Annualized Monthly Excess Spread Amount is less
than 400 basis points for three consecutive Monthly Periods;
then, in the case of any event described in subsection 9(a), (b) or (e) hereof,
after the applicable grace period set forth in such subsections, a Series 1998-1
Pay Out Event shall occur on the tenth Business Day thereafter unless prior to
such day Holders of Series 1998-1 Certificates evidencing Undivided Interests
aggregating not less than 50% of the Certificateholders Ownership Interests of
this Series 1998-1 shall notify the Trustee, the Transferor and the Servicer in
writing that a Series 1998-1 Pay Out Event should not occur, and in the case of
any event described in subsection 9(c), (d), (f) or (g) hereof, a Series 1998-1
Pay Out Event shall occur without any notice or other action on the part of the
Trustee or the Certificateholders immediately upon the occurrence of such event.
37
Notwithstanding anything to the contrary contained in the
Agreement or this Series Supplement, upon the occurrence of a Pay Out Event, if
more than 10% of the principal balance of the Receivables have a remaining
maturity of more than twelve months, the Transferor shall, subject to the
requirements of the following sentence, purchase from the Trust sufficient
Receivables with a remaining maturity of more than twelve months, at a price
equal to the principal amount thereof plus accrued but unpaid Finance Charges to
the date of purchase, such that the percentage of Receivables having a remaining
maturity as of the date of purchase of more than twelve months shall be no more
than 10% of the principal balance of Receivables remaining in the Trust after
giving effect to such purchase. If so required to purchase Receivables, the
Transferor shall select for purchase, from the group of Receivables having a
remaining maturity of more than 12 months then in the Trust, Receivables that
were conveyed to the Trust as of the Addition Date immediately preceding the
date of purchase, or, if such Receivables are insufficient to satisfy the
requirement of the immediately preceding sentence, as of the Addition Dates
closest in time to such purchase date. The proceeds of such purchase shall be
treated as Collections of Principal Receivables and Finance Charge Receivables
in respect of the related Receivables.
SECTION 10. Series 1998-1 Termination. Except as otherwise
provided in subsection 12.03(b) of the Agreement, the right of the
Certificateholders to receive payments from the Trust will terminate on the
first Business Day following the Series 1998-1 Termination Date.
SECTION 11. Counterparts. This Series Supplement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original, but all of such counterparts shall together constitute
but one and the same instrument.
SECTION 12. Governing Law. THIS SERIES SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 13. No Petition. The Original Transferors, the
Transferor, the Servicer and the Trustee, by entering into this Series
Supplement, and each Certificateholder, by accepting a Series 1998-1
Certificate, hereby covenant and agree that they will not at any time institute
against the Trust, or join in any institution against the Trust of, any
bankruptcy proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the
Certificateholders, the Agreement or this Series Supplement.
38
IN WITNESS WHEREOF, the parties hereto have caused this Series
1998-1 Supplement to be duly executed by their respective officers as of the day
and year first above written.
A.I. RECEIVABLES CORP., as
Transferor
By:___________________________
Name:
Title:
A.I. CREDIT CORP., as
Original Transferor and Servicer
By:___________________________
Name:
Title:
AICCO, INC., as Original Transferor
and Servicer
By:___________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By:___________________________
Name:
Title:
39
Exhibit A-1
Form of Class A Certificate
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee
referred to below or an agent of the Trustee referred to below for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No. $
--------- ---------
CUSIP NO.
---------
AIC PREMIUM FINANCE LOAN MASTER TRUST
CLASS A FLOATING RATE ASSET BACKED CERTIFICATE,
SERIES 1998-1
This Certificate does not represent an obligation of, or any interest
in, the Original Transferors, the Transferor or the Servicer referred to below,
or any of their affiliates, and neither the Series 1998-1 Certificates, the
Receivables nor the related Loans are insured or guaranteed by any governmental
agency or instrumentality or any other Person. This Certificate is limited in
right of payment to certain collections respecting the Receivables, all as more
specifically set forth hereinbelow and in the Pooling and Servicing Agreement
referred to below.
This certifies that _____________ (the "Class A Certificateholder") is
the registered owner of an undivided interest in a trust (the "Trust"), the
corpus of which consists of the entire right, title and interest in and to (i)
the Receivables existing at any time after the Initial Cut-Off Date or
thereafter created up to (but excluding) the Closing Date (the "Existing
Receivables"), including all Collections thereon, other than Credit Balances,
received by the Original Transferors after the Initial Cut-Off Date, and (ii)
the Receivables existing at any time on or after the Closing Date or thereafter
created that are required or permitted to be conveyed to the Trust pursuant to
Section 2.06 of the Pooling and Servicing Agreement referred to below (the
"Additional Receivables"), including all Collections thereon, other than Credit
Balances, received [by the Servicer] on or after the Closing Date, together with
other assets and interests constituting the Trust pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of March [_], 1998, by and
among A.I. Receivables Corp., as Transferor, A.I. Credit Corp. and AICCO, Inc.,
as Original Transferors and Servicer, and The First National Bank of Chicago, as
Trustee, as supplemented by any Supplement relating to a Series of Certificates
(the
A-1:1
"Pooling and Servicing Agreement"), a summary of certain of the pertinent
provisions of which is set forth hereinbelow. The assets of the Trust will also
include all monies on deposit in the Collection Account, any Investor Account,
any Series Account and any other account maintained for the benefit of
Certificateholders of any Series of Certificates, any Credit Enhancement and all
monies available under any Credit Enhancement to be provided for any Series for
payment to the Certificateholders of such Series.
To the extent not defined herein, the capitalized terms used herein
have the meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the holder hereof by virtue
of the acceptance hereof assents and by which the holder hereof is bound.
The Original Transferors and the Transferor have structured the Pooling
and Servicing Agreement and the Series 1998-1 Certificates with the intention
that the Series 1998-1 Certificates will qualify under applicable tax law as
indebtedness, and each of the Original Transferors, the Transferor, the Holder
of the Transferor Certificate, the Servicer and each Series 1998-1
Certificateholder (or Series 1998-1 Certificate Owner) by acceptance of its
Series 1998-1 Certificate (or in the case of a Series 1998-1 Certificate Owner,
by virtue of such Series 1998-1 Certificate Owner's acquisition of a beneficial
interest therein), agrees to treat and to take no action inconsistent with the
treatment of the Series 1998-1 Certificates (or any beneficial interest therein)
as indebtedness for purposes of federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income. Each Series
1998-1 Certificateholder agrees that it will cause any Series 1998-1 Certificate
Owner acquiring an interest in a Series 1998-1 Certificate through it to comply
with the Pooling and Servicing Agreement as to treatment of the Series 1998-1
Certificates as indebtedness for certain tax purposes.
The Original Transferors, the Transferor, the Servicer and the Trustee,
by entering into the Series 1998-1 Supplement, and each holder of a Series
1998-1 Certificate, by accepting such Certificate, covenant and agree that they
will not at any time institute against the Trust, or join in any institution
against the Trust of, any bankruptcy proceedings under any United States Federal
or state bankruptcy or similar law in connection with any obligations relating
to the Certificateholders or the Pooling and Servicing Agreement.
This Class A Certificate is one of a duly authorized Series of Investor
Certificates entitled "AIC Premium Finance Loan Master Trust Class A Floating
Rate Asset Backed Certificates, Series 1998-1" (the "Class A Certificates"),
each of which represents an undivided interest in the Trust, including the right
to receive the Collections and other amounts allocated to the Class A
Certificates at the times and in the amounts specified in the Pooling and
Servicing Agreement. Also issued under the Pooling and Servicing Agreement are
the "AIC Premium Finance Loan Master Trust Class B Floating Rate Asset Backed
Certificates, Series 1998-1" (the "Class B Certificates"), which represent an
undivided interest in the Trust subordinate to the Class A Certificates to the
extent provided in the Pooling and Servicing Agreement, and the "AIC Premium
Finance Loan Master Trust Class C Floating Rate Asset Backed Certificates,
Series 1998-1 (the "Class C Certificates"), which represent an undivided
interest in the Trust subordinate to the Class A Certificates and the Class B
Certificates to the extent provided in the Pooling and Servicing Agreement.
A-1:2
The aggregate interest represented by the Class A Certificates, the
Class B Certificates and the Class C Certificates at any time in the Receivables
in the Trust shall not exceed an amount equal to the Certificateholders
Ownership Interests at such time. The Class A Initial Ownership Interest is $[ ]
as of [ ], 1998 (the "Closing Date"). The Class B Initial Ownership Interest is
$[ ] as of the Closing Date. The Class C Initial Ownership Interest is $[ ] as
of the Closing Date. The Class A Ownership Interest on any date of determination
will be an amount equal to (a) the Class A Initial Ownership Interest, minus (b)
the aggregate amount of payments of principal made to the Class A
Certificateholders prior to such date, minus (c) the aggregate amount of Class A
Charge-Offs for all prior Transfer Dates pursuant to subsection 4.10(a) of the
Pooling and Servicing Agreement, minus (d) the amount of Reallocated Principal
Collections allocated pursuant to subsection 4.12(a) of the Pooling and
Servicing Agreement on all prior Transfer Dates for which the Class B Ownership
Interest and the Class C Ownership Interest have not been reduced and plus (e)
the aggregate of the amounts deducted pursuant to the foregoing clauses (c) and
(d) deemed to have been reimbursed on all prior Transfer Dates pursuant to
subsection 4.11(c) of the Pooling and Servicing Agreement; provided, however,
that the Class A Ownership Interest may not be reduced below zero. The Class A
Ownership Interest, together with the aggregate interest represented by the
Class B Certificates in the Receivables in the Trust (the "Class B Ownership
Interest") and the aggregate interest represented by the Class C Certificates in
the Receivables in the Trust (the "Class C Ownership Interest"), is sometimes
collectively referred to herein as the "Certificateholders Ownership Interests."
In addition to the issuance of the Class A Certificates, the Class B
Certificates and the Class C Certificates, the Transferor Certificate,
representing an undivided interest in the Trust, will be transferred on the
Closing Date from the Original Transferors to the Transferor pursuant to the
Pooling and Servicing Agreement. The Transferor Certificate represents the
interest in the Receivables not represented by all of the Series of Certificates
issued by the Trust. The interest represented by the Transferor Certificate may
be reduced by the Transferor pursuant to the Pooling and Servicing Agreement to
effectuate the issuance of a new Series of investor Certificates upon the
conditions set forth in the Pooling and Servicing Agreement. Under the
circumstances provided in the Pooling and Servicing Agreement, the Series 1998-1
Certificates may be included in such a New Series Issuance.
Interest will accrue on the Class A Certificates for the period from
the Closing Date through [ ], 1998 at [ ]% per annum and, for the period from
[ ], 1998 through [ ], 1998 and with respect to each Interest Period thereafter,
at a per annum rate equal to [ ]% in excess of LIBOR, as more specifically set
forth in the Pooling and Servicing Agreement, subject to a maximum annual rate
of [ ]% (the "Class A Certificate Rate"), and will be distributed on [ ], 1998
and on the 15th day of each calendar month thereafter or, if such day is not a
Business Day, on the next succeeding Business Day (a "Distribution Date"), to
the Class A Certificateholders of record as of the last Business Day of the
calendar month preceding such Distribution Date. On each Distribution Date
during the Rapid Amortization Period, if any, in addition to Class A Monthly
Interest, Available Investor Principal Collections with respect to such
Distribution Date will be distributed to such Class A Certificateholders until
the Class A Ownership Interest has been paid in full. On each Distribution Date
during the Class A Controlled Amortization Period, such Class A
Certificateholders will receive a principal payment equal to the least of (i)
Available Investor Principal Collections with respect to such Distribution Date,
(ii) the Controlled Distribution Amount with respect to such Distribution Date
and
A-1:3
(iii) the Class A Ownership Interest for such Distribution Date, unless
distributed earlier as a result of the occurrence of a Pay Out Event in
accordance with the Pooling and Servicing Agreement.
The transfer of this Class A Certificate shall be registered in the
Certificate Register upon surrender of this Class A Certificate for registration
of transfer at any office of agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in a form satisfactory
to the Trustee and the Transfer Agent and Registrar duly executed by the Class A
Certificateholder or such Class A Certificateholder's attorney-in-fact duly
authorized in writing, and thereupon one or more new Class A Certificates of
authorized denominations and for the same aggregate undivided interests will be
issued to the designated transferee or transferees.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations set forth therein, Class A Certificates are exchangeable for
new Class A Certificates evidencing like aggregate undivided interests, as
requested by the Class A Certificateholder surrendering such Class A
Certificates. No service charge may be imposed for any such exchange but the
Transfer Agent and Registrar may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith.
The Trustee, the Paying Agent, the Transfer Agent and Registrar, and
any agent of any of them, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar, nor any agent of any of them,
shall be affected by notice to the contrary except in certain circumstances
described in the Pooling and Servicing Agreement.
Except as otherwise set forth in the Pooling and Servicing Agreement,
the right of the Series 1998-1 Certificateholders to receive payment from the
Trust will terminate on the first Business Day following the Series 1998-1
Termination Date.
Upon the termination of the Trust pursuant to Section 12.01 of the
Pooling and Servicing Agreement, the Pooling and Servicing Agreement provides
that the Trustee shall assign and convey to the Holder of the Transferor
Certificate (without recourse, representation or warranty) all right, title and
interest of the Trust in the Receivables, whether then existing or thereafter
created, all monies due or to become due with respect to such Receivables
(including all accrued interest theretofore posted as Finance Charge
Receivables) and all proceeds of such Receivables, except for amounts held by
the Trustee or any Paying Agent pursuant to Section 12.03(b) of the Pooling and
Servicing Agreement.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
A-1:4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under its official seal.
Date:
-------------------------
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By:
-----------------------------
Authorized Officer
[SEAL]
Attested to:
By:
------------------------------
[Title]
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By:
------------------------------
Authorized Officer
A-1:5
Exhibit A-2
Form of Class B Certificate
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee
referred to below or an agent of the Trustee referred to below for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No. $
--------- -----------
CUSIP NO. -----------
AIC PREMIUM FINANCE LOAN MASTER TRUST
CLASS B FLOATING RATE ASSET BACKED CERTIFICATE,
SERIES 1998-1
This Certificate does not represent an obligation of, or any interest
in, the Original Transferors, the Transferor or the Servicer referred to below,
or any of their affiliates, and neither the Series 1998-1 Certificates, the
Receivables nor the related Loans are insured or guaranteed by any governmental
agency or instrumentality or any other Person. This Certificate is limited in
right of payment to certain collections respecting the Receivables, all as more
specifically set forth hereinbelow and in the Pooling and Servicing Agreement
referred to below.
This certifies that _________________ (the "Class B Certificateholder")
is the registered owner of an undivided interest in a trust (the "Trust"), the
corpus of which consists of the entire right, title and interest in and to (i)
the Receivables existing at any time after the Initial Cut-Off Date or
thereafter created up to (but excluding) the Closing Date (the "Existing
Receivables"), including all Collections thereon, other than Credit Balances,
received by the Original Transferors after the Initial Cut-Off Date, and (ii)
the Receivables existing at any time on or after the Closing Date or thereafter
created that are required or permitted to be conveyed to the Trust pursuant to
Section 2.06 of the Pooling and Servicing Agreement referred to below (the
"Additional Receivables"), including all Collections thereon, other than Credit
Balances, received [by the Servicer] on or after the Closing Date, together with
other assets and interests constituting the Trust pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of March [_], 1998, by and
among A.I. Receivables Corp., as Transferor, A.I. Credit Corp. and AICCO, Inc.,
as Original Transferors and Servicer, and The First National Bank of Chicago, as
Trustee, as supplemented by any Supplement relating to a Series of Certificates
(the "Pooling and Servicing Agreement"), a summary of certain of the pertinent
provisions of which is set
A-2:1
forth hereinbelow. The assets of the Trust will also include all monies on
deposit in the Collection Account, any Investor Account, any Series Account and
any other account maintained for the benefit of Certificateholders of any Series
of Certificates, any Credit Enhancement and all monies available under any
Credit Enhancement to be provided for any Series for payment to the
Certificateholders of such Series.
To the extent not defined herein, the capitalized terms used herein
have the meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the holder hereof by virtue
of the acceptance hereof assents and by which the holder hereof is bound.
The Original Transferors and the Transferor have structured the Pooling
and Servicing Agreement and the Series 1998-1 Certificates with the intention
that the Series 1998-1 Certificates will qualify under applicable tax law as
indebtedness, and each of the Original Transferors, the Transferor, the Holder
of the Transferor Certificate, the Servicer and each Series 1998-1
Certificateholder (or Series 1998-1 Certificate Owner) by acceptance of its
Series 1998-1 Certificate (or in the case of a Series 1998-1 Certificate Owner,
by virtue of such Series 1998-1 Certificate Owner's acquisition of a beneficial
interest therein), agrees to treat and to take no action inconsistent with the
treatment of the Series 1998-1 Certificates (or any beneficial interest therein)
as indebtedness for purposes of federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income. Each Series
1998-1 Certificateholder agrees that it will cause any Series 1998-1 Certificate
Owner acquiring an interest in a Series 1998-1 Certificate through it to comply
with the Pooling and Servicing Agreement as to treatment of the Series 1998-1
Certificates as indebtedness for certain tax purposes.
The Original Transferors, the Transferor, the Servicer and the Trustee,
by entering into the Series 1998-1 Supplement, and each holder of a Series
1998-1 Certificate, by accepting such Certificate, covenant and agree that they
will not at any time institute against the Trust, or join in any institution
against the Trust of, any bankruptcy proceedings under any United States Federal
or state bankruptcy or similar law in connection with any obligations relating
to the Certificateholders or the Pooling and Servicing Agreement.
This Class B Certificate is one of a duly authorized Series of Investor
Certificates entitled "AIC Premium Finance Loan Master Trust Class B Floating
Rate Asset Backed Certificates, Series 1998-1" (the "Class B Certificates"),
each of which represents an undivided interest in the Trust, including the right
to receive the Collections and other amounts allocated to the Class B
Certificates at the times and in the amounts specified in the Pooling and
Servicing Agreement. Also issued under the Pooling and Servicing Agreement are
the "AIC Premium Finance Loan Master Trust Class A Floating Rate Asset Backed
Certificates, Series 1998-1" (the "Class A Certificates"), which represent an
undivided interest in the Trust senior to the Class B Certificates to the extent
provided in the Pooling and Servicing Agreement, and the "AIC Premium Finance
Loan Master Trust Class C Floating Rate Asset Backed Certificates, Series 1998-1
(the "Class C Certificates"), which represent an undivided interest in the Trust
subordinate to the Class A Certificates and the Class B Certificates to the
extent provided in the Pooling and Servicing Agreement.
A-2:2
The aggregate interest represented by the Class A Certificates, the
Class B Certificates and the Class C Certificates at any time in the Receivables
in the Trust shall not exceed an amount equal to the Certificateholders
Ownership Interests at such time. The Class A Initial Ownership Interest is $[ ]
as of [ ], 1998 (the "Closing Date"). The Class B Initial Ownership Interest is
$[ ] as of the Closing Date. The Class C Initial Ownership Interest is $[ ] as
of the Closing Date. The Class B Ownership Interest on any date of determination
will be an amount equal to (a) the Class B Initial Ownership Interest, minus (b)
the aggregate amount of payments of principal made to the Class B
Certificateholders prior to such date, minus (c) the aggregate amount of Class B
Charge-Offs for all prior Transfer Dates pursuant to subsection 4.10(b) of the
Pooling and Servicing Agreement, minus (d) the amount of Reallocated Principal
Collections allocated pursuant to subsection 4.12(a) of the Pooling and
Servicing Agreement on all prior Transfer Dates for which the Class C Ownership
Interest has not been reduced, minus (e) an amount equal to the amount by which
the Class B Ownership Interest has been reduced on all prior Transfer Dates
pursuant to subsection 4.10(a) of the Pooling and Servicing Agreement, and plus
(f) the aggregate of the amount deducted pursuant to the foregoing clauses (c),
(d) and (e) deemed to have been reimbursed on all prior Transfer Dates pursuant
to subsection 4.11(d) of the Pooling and Servicing Agreement; provided, however,
that the Class B Ownership Interest may not be reduced below zero. The Class B
Ownership Interest, together with the aggregate interest represented by the
Class A Certificates in the Receivables in the Trust (the "Class A Ownership
Interest") and the aggregate interest represented by the Class C Certificates in
the Receivables in the Trust (the "Class C Ownership Interest"), is sometimes
collectively referred to herein as the "Certificateholders Ownership Interests."
In addition to the issuance of the Class A Certificates, the Class B
Certificates and the Class C Certificates, the Transferor Certificate,
representing an undivided interest in the Trust, will be transferred on the
Closing Date from the Original Transferors to the Transferor pursuant to the
Pooling and Servicing Agreement. The Transferor Certificate represents the
interest in the Receivables not represented by all of the Series of Certificates
issued by the Trust. The interest represented by the Transferor Certificate may
be reduced by the Transferor pursuant to the Pooling and Servicing Agreement to
effectuate the issuance of a new Series of investor Certificates upon the
conditions set forth in the Pooling and Servicing Agreement. Under the
circumstances provided in the Pooling and Servicing Agreement, the Series 1998-1
Certificates may be included in such a New Series Issuance.
Interest will accrue on the Class B Certificates for the period from
the Closing Date through [ ], 1998 at [ ]% per annum and, for the period from
[ ], 1998 through [ ], 1998 and with respect to each Interest Period thereafter,
at a per annum rate equal to [ ]% in excess of LIBOR, as more specifically set
forth in the Pooling and Servicing Agreement, subject to a maximum annual rate
of [ ]% (the "Class B Certificate Rate"), and will be distributed on [ ], 1998
and on the 15th day of each calendar month thereafter or, if such day is not a
Business Day, on the next succeeding Business Day (a "Distribution Date"), to
the Class A Certificateholders of record as of the last Business Day of the
calendar month preceding such Distribution Date. On each Distribution Date
during the Rapid Amortization Period, if any, after the Class A Ownership
Interest has been paid in full, in addition to Class B Monthly Interest,
Available Investor Principal Collections with respect to such Distribution Date
will be distributed to such Class B Certificateholders until the Class B
Ownership Interest has been paid in full. On each Distribution Date during the
Class B Controlled Amortization Period, such Class B Certificateholders will
receive a principal payment equal to the least of (i) Available Investor
Principal Collections with respect to such Distribution Date (minus the portion
A-2:3
of such Available Investor Principal Collections applied to Class A Monthly
Principal on such Transfer Date), (ii) the Controlled Distribution Amount with
respect to such Distribution Date (minus the portion of such Controlled
Distribution Amount applied to Class A Monthly Principal on such Transfer Date)
and (iii) the Class B Ownership Interest for such Distribution Date, unless
distributed earlier as a result of the occurrence of a Pay Out Event in
accordance with the Pooling and Servicing Agreement.
The transfer of this Class B Certificate shall be registered in the
Certificate Register upon surrender of this Class B Certificate for registration
of transfer at any office of agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in a form satisfactory
to the Trustee and the Transfer Agent and Registrar duly executed by the Class B
Certificateholder or such Class B Certificateholder's attorney-in-fact duly
authorized in writing, and thereupon one or more new Class B Certificates of
authorized denominations and for the same aggregate undivided interests will be
issued to the designated transferee or transferees.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations set forth therein, Class B Certificates are exchangeable for
new Class B Certificates evidencing like aggregate undivided interests, as
requested by the Class B Certificateholder surrendering such Class B
Certificates. No service charge may be imposed for any such exchange but the
Transfer Agent and Registrar may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith.
The Trustee, the Paying Agent, the Transfer Agent and Registrar, and
any agent of any of them, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar, nor any agent of any of them,
shall be affected by notice to the contrary except in certain circumstances
described in the Pooling and Servicing Agreement.
Except as otherwise set forth in the Pooling and Servicing Agreement,
the right of the Series 1998-1 Certificateholders to receive payment from the
Trust will terminate on the first Business Day following the Series 1998-1
Termination Date.
Upon the termination of the Trust pursuant to Section 12.01 of the
Pooling and Servicing Agreement, the Pooling and Servicing Agreement provides
that the Trustee shall assign and convey to the Holder of the Transferor
Certificate (without recourse, representation or warranty) all right, title and
interest of the Trust in the Receivables, whether then existing or thereafter
created, all monies due or to become due with respect to such Receivables
(including all accrued interest theretofore posted as Finance Charge
Receivables) and all proceeds of such Receivables, except for amounts held by
the Trustee or any Paying Agent pursuant to Section 12.03(b) of the Pooling and
Servicing Agreement.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
A-2:4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under its official seal.
Date:
----------------------------
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By:
-------------------------------
Authorized Officer
[SEAL]
Attested to:
By:
----------------------------------
[Title]
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the within-
mentioned Pooling and Servicing Agreement.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By:
--------------------------------
Authorized Officer
A-2:5
Exhibit A-3
Form of Class C Certificate
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY BE SOLD ONLY PURSUANT TO
A REGISTRATION STATEMENT EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND SERVICING AGREEMENT WILL
BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN
REQUEST.
No. $
--------- ---------
CUSIP NO.
-------
AIC PREMIUM FINANCE LOAN MASTER TRUST
CLASS C FLOATING RATE ASSET BACKED CERTIFICATE,
SERIES 1998-1
This Certificate does not represent an obligation of, or any interest
in, the Original Transferors, the Transferor or the Servicer referred to below,
or any of their affiliates, and neither the Series 1998-1 Certificates, the
Receivables nor the related Loans are insured or guaranteed by any governmental
agency or instrumentality or any other Person. This Certificate is limited in
right of payment to certain collections respecting the Receivables, all as more
specifically set forth hereinbelow and in the Pooling and Servicing Agreement
referred to below.
This certifies that _________________ (the "Class C Certificateholder")
is the registered owner of an undivided interest in a trust (the "Trust"), the
corpus of which consists of the entire right, title and interest in and to (i)
the Receivables existing at any time after the Initial Cut-Off Date or
thereafter created up to (but excluding) the Closing Date (the "Existing
Receivables"), including all Collections thereon, other than Credit Balances,
received by the Original Transferors after the Initial Cut-Off Date, and (ii)
the Receivables existing at any time on or after the Closing Date or thereafter
created that are required or permitted to be conveyed to the Trust pursuant to
Section 2.06 of the Pooling and Servicing Agreement referred to below (the
"Additional Receivables"), including all Collections thereon, other than Credit
Balances, received [by the Servicer] on or after the Closing Date, together with
other assets and interests constituting the Trust pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of March [_], 1998, by and
among A.I. Receivables Corp., as Transferor, A.I. Credit Corp. and AICCO, Inc.,
as Original Transferors and Servicer, and The First National Bank of
A-3:1
Chicago, as Trustee, as supplemented by any Supplement relating to a Series of
Certificates (the "Pooling and Servicing Agreement"), a summary of certain of
the pertinent provisions of which is set forth hereinbelow. The assets of the
Trust will also include all monies on deposit in the Collection Account, any
Investor Account, any Series Account and any other account maintained for the
benefit of Certificateholders of any Series of Certificates, any Credit
Enhancement and all monies available under any Credit Enhancement to be provided
for any Series for payment to the Certificateholders of such Series.
To the extent not defined herein, the capitalized terms used herein
have the meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the holder hereof by virtue
of the acceptance hereof assents and by which the holder hereof is bound.
The Original Transferors and the Transferor have structured the Pooling
and Servicing Agreement and the Series 1998-1 Certificates with the intention
that the Series 1998-1 Certificates will qualify under applicable tax law as
indebtedness, and each of the Original Transferors, the Transferor, the Holder
of the Transferor Certificate, the Servicer and each Series 1998-1
Certificateholder (or Series 1998-1 Certificate Owner) by acceptance of its
Series 1998-1 Certificate (or in the case of a Series 1998-1 Certificate Owner,
by virtue of such Series 1998-1 Certificate Owner's acquisition of a beneficial
interest therein), agrees to treat and to take no action inconsistent with the
treatment of the Series 1998-1 Certificates (or any beneficial interest therein)
as indebtedness for purposes of federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income. Each Series
1998-1 Certificateholder agrees that it will cause any Series 1998-1 Certificate
Owner acquiring an interest in a Series 1998-1 Certificate through it to comply
with the Pooling and Servicing Agreement as to treatment of the Series 1998-1
Certificates as indebtedness for certain tax purposes.
The Original Transferors, the Transferor, the Servicer and the Trustee,
by entering into the Series 1998-1 Supplement, and each holder of a Series
1998-1 Certificate, by accepting such Certificate, covenant and agree that they
will not at any time institute against the Trust, or join in any institution
against the Trust of, any bankruptcy proceedings under any United States Federal
or state bankruptcy or similar law in connection with any obligations relating
to the Certificateholders or the Pooling and Servicing Agreement.
This Class C Certificate is one of a duly authorized Series of Investor
Certificates entitled "AIC Premium Finance Loan Master Trust Class C Floating
Rate Asset Backed Certificates, Series 1998-1" (the "Class C Certificates"),
each of which represents an undivided interest in the Trust, including the right
to receive the Collections and other amounts allocated to the Class C
Certificates at the times and in the amounts specified in the Pooling and
Servicing Agreement. Also issued under the Pooling and Servicing Agreement are
the "AIC Premium Finance Loan Master Trust Class A Floating Rate Asset Backed
Certificates, Series 1998-1" (the "Class A Certificates"), which represent an
undivided interest in the Trust senior to the Class C Certificates to the extent
provided in the Pooling and Servicing Agreement, and the "AIC Premium Finance
Loan Master Trust Class B Floating Rate Asset Backed Certificates, Series 1998-1
(the "Class B Certificates"), which represent an undivided interest in the Trust
senior to the Class C Certificates to the extent provided in the Pooling and
Servicing Agreement.
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The aggregate interest represented by the Class A Certificates, the
Class B Certificates and the Class C Certificates at any time in the Receivables
in the Trust shall not exceed an amount equal to the Certificateholders
Ownership Interests at such time. The Class A Initial Ownership Interest is $[ ]
as of [ ], 1998 (the "Closing Date"). The Class B Initial Ownership Interest is
$[ ] as of the Closing Date. The Class C Initial Ownership Interest is $[ ] as
of the Closing Date. The Class C Ownership Interest on any date of determination
will be an amount equal to (a) the Class C Initial Ownership Interest, minus (b)
the aggregate amount of payments of principal made to the Class C
Certificateholders prior to such date, minus (c) the aggregate amount of Class C
Charge-Offs for all prior Transfer Dates pursuant to subsection 4.10(c) of the
Pooling and Servicing Agreement, minus (d) the amount of Reallocated Principal
Collections allocated pursuant to subsection 4.12(a) of the Pooling and
Servicing Agreement on all prior Transfer Dates for which the Class C Ownership
Interest was to be reduced, minus (e) an amount equal to the amount by which the
Class C Ownership Interest has been reduced on all prior Transfer Dates pursuant
to subsections 4.10(a) and 4.10(b) of the Pooling and Servicing Agreement, and
plus (f) the aggregate of the amounts deducted pursuant to the foregoing clauses
(c), (d) and (e) deemed to have been reimbursed on all prior Transfer Dates
pursuant to subsection 4.11(f) of the Pooling and Servicing Agreement; provided,
however, that the Class C Ownership Interest may not be reduced below zero. The
Class C Ownership Interest, together with the aggregate interest represented by
the Class A Certificates in the Receivables in the Trust (the "Class A Ownership
Interest") and the aggregate interest represented by the Class B Certificates in
the Receivables in the Trust (the "Class B Ownership Interest"), is sometimes
collectively referred to herein as the "Certificateholders Ownership Interests."
In addition to the issuance of the Class A Certificates, the Class B
Certificates and the Class C Certificates, the Transferor Certificate,
representing an undivided interest in the Trust, will be transferred on the
Closing Date from the Original Transferors to the Transferor pursuant to the
Pooling and Servicing Agreement. The Transferor Certificate represents the
interest in the Receivables not represented by all of the Series of Certificates
issued by the Trust. The interest represented by the Transferor Certificate may
be reduced by the Transferor pursuant to the Pooling and Servicing Agreement to
effectuate the issuance of a new Series of investor Certificates upon the
conditions set forth in the Pooling and Servicing Agreement. Under the
circumstances provided in the Pooling and Servicing Agreement, the Series 1998-1
Certificates may be included in such a New Series Issuance.
Interest will accrue on the Class C Certificates for the period from
the Closing Date through [ ], 1998 at [ ]% per annum and, for the period from
[ ], 1998 through [ ], 1998 and with respect to each Interest Period thereafter,
at a per annum rate equal to [ ]% in excess of LIBOR, as more specifically set
forth in the Pooling and Servicing Agreement, subject to a maximum annual rate
of [ ]% (the "Class C Certificate Rate"), and will be distributed on [ ], 1998
and on the 15th day of each calendar month thereafter or, if such day is not a
Business Day, on the next succeeding Business Day (a "Distribution Date"), to
the Class A Certificateholders of record as of the last Business Day of the
calendar month preceding such Distribution Date. On each Distribution Date
during the Rapid Amortization Period, if any, after the Class B Ownership
Interest has been paid in full, in addition to Class C Monthly Interest,
Available Investor Principal Collections with respect to such Distribution Date
will be distributed to such Class C Certificateholders until the Class C
Ownership Interest has been paid in full. On each Distribution Date during the
Class C Controlled Amortization Period, such Class C Certificateholders will
receive a principal payment equal to the least
A-3:3
of (i) Available Investor Principal Collections with respect to such
Distribution Date (minus the portion of such Available Investor Principal
Collections applied to Class A Monthly Principal and Class B Monthly Principal
on such Transfer Date), (ii) the Controlled Distribution Amount with respect to
such Distribution Date (minus the portion of such Controlled Distribution Amount
applied to Class A Monthly Principal and Class B Monthly Principal on such
Transfer Date) and (iii) the Class C Ownership Interest for such Distribution
Date, unless distributed earlier as a result of the occurrence of a Pay Out
Event in accordance with the Pooling and Servicing Agreement.
The transfer of this Class C Certificate is subject to the restrictions
set forth in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations set forth therein, Class C Certificates are exchangeable for
new Class C Certificates evidencing like aggregate undivided interests, as
requested by the Class C Certificateholder surrendering such Class C
Certificates. No service charge may be imposed for any such exchange but the
Transfer Agent and Registrar may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith.
The Trustee, the Paying Agent, the Transfer Agent and Registrar, and
any agent of any of them, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar, nor any agent of any of them,
shall be affected by notice to the contrary except in certain circumstances
described in the Pooling and Servicing Agreement.
Except as otherwise set forth in the Pooling and Servicing Agreement,
the right of the Series 1998-1 Certificateholders to receive payment from the
Trust will terminate on the first Business Day following the Series 1998-1
Termination Date.
Upon the termination of the Trust pursuant to Section 12.01 of the
Pooling and Servicing Agreement, the Pooling and Servicing Agreement provides
that the Trustee shall assign and convey to the Holder of the Transferor
Certificate (without recourse, representation or warranty) all right, title and
interest of the Trust in the Receivables, whether then existing or thereafter
created, all monies due or to become due with respect to such Receivables
(including all accrued interest theretofore posted as Finance Charge
Receivables) and all proceeds of such Receivables, except for amounts held by
the Trustee or any Paying Agent pursuant to Section 12.03(b) of the Pooling and
Servicing Agreement.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
A-3:4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under its official seal.
Date:
--------------------------
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By:
---------------------------------
Authorized Officer
[SEAL]
Attested to:
By:
---------------------------------
[Title]
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the within-
mentioned Pooling and Servicing Agreement.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By:
----------------------------------
Authorized Officer
A-3:5
Exhibit B
Form of Monthly Certificateholders' Statement
MONTHLY CERTIFICATEHOLDERS' STATEMENT
-------------------------------------
AIC PREMIUM FINANCE LOAN MASTER TRUST
SERIES 1998-1
Set forth below is information with respect to the Distribution Date of
_______ __, _____ and with respect to the performance of the Trust during the
related Monthly Period.
Capitalized terms used in this Monthly Certificateholders' Statement
have their respective meanings set forth in the Pooling and Servicing Agreement,
as supplemented by the Series 1998-1 Supplement.
A. Information Regarding the Current Monthly Distribution
(Stated on the Basis of $1,000 Original Certificate
Principal Amount)
1. The total amount of the distribution
to holders of Class A, Class B and
Class C Certificates ........................ $______
2. The amount of the distribution set
forth in A1 above in respect of
Class A Monthly Principal ................... $______
3. The amount of the distribution set
forth in A1 above in respect of
Class B Monthly Principal ................... $______
4. The amount of the distribution set
forth in A1 above in respect of Class C
Monthly Principal ........................... $______
5. The amount of the distribution set
forth in A1 above in respect of
Class A Monthly Interest .................... $______
6. The amount of the distribution set
forth in A1 above in respect of
Class A Additional Interest ................. $______
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7. The amount of the distribution set
forth in A1 above in respect of
Class A Prior Period Interest ............... $______
8. The amount of the distribution set
forth in A1 above in respect of
Class B Monthly Interest .................... $______
9. The amount of the distribution set
forth in A1 above in respect of
Class B Additional Interest ................. $______
10. The amount of the distribution set
forth in A1 above in respect of
Class B Prior Period Interest ............... $______
11. The amount of the distribution set
forth in A1 above in respect of Class C
Monthly Interest ............................ $______
12. The amount of the distribution set
forth in A1 above in respect of Class C
Additional Interest ......................... $______
13. The amount of the distribution set
forth in A1 above in respect of Class C
Prior Period Interest ....................... $______
B. Information Regarding the Performance of the Trust
1. Collections of Principal Receivables
The aggregate amount of Collections of
Principal Receivables received during the
related Monthly Period which were allocated
in respect of the Class A, Class B and
Class C Certificates ........................ $______
2. Certificateholders Ownership Interests
and Principal Receivables in the Trust
(a) The aggregate amount of Principal
Receivables in the Trust as of the
end of the related Monthly Period .. $_______
(b) The Certificateholders Ownership
Interests as of the end of the
related Monthly Period ............. $_______
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(c) The Class A Ownership Interest
as of the end of the
related Monthly Period ............. $_______
(d) The Class B Ownership Interest
as of the end of the
related Monthly Period ............. $_______
(e) The Class C Ownership Interest
as of the end of the
related Monthly Period ............. $_______
(f) The Floating Investor Percentage
with respect to the related Monthly
Period ............................. $_______
(g) The Class A Floating Allocation
with respect to the related Monthly
Period ............................. $_______
(h) The Class B Floating Allocation
with respect to the related Monthly
Period ............................. $_______
(i) The Class C Floating Allocation
with respect to the related Monthly
Period ............................. $_______
(j) The Fixed Investor Percentage with
respect to the related Monthly
Period ............................. $_______
3. Delinquent Receivables
The aggregate outstanding balances of Receivables which were
delinquent as of the end of the related Monthly Period following
cancellation of the related insurance policies:
Aggregate Percentage
Outstanding of Total
Balance Receivables
----------- -----------
(a) 1 - 30 days ....... $ %
-------- ---------
(b) 31 - 60 days ....... $ %
-------- ---------
(c) 61 - 90 days ....... $ %
-------- ---------
(d) 91 - 120 days ....... $ %
-------- ---------
(e) 121 - 150 days ....... $ %
-------- ---------
(f) 151 - or more days ... $ %
-------- ---------
Total .............. $ %
-------- ---------
B:3
4. Default Amounts
(a) The Aggregate Default Amount
for the related Monthly Period ......... $______
(b) The Class A Default Amount for
the related Transfer Date .............. $______
(c) The Class B Default Amount for
the related Transfer Date .............. $______
(d) The Class C Default Amount for
the related Transfer Date .............. $______
5. Investor Charge-Offs
(a) The aggregate amount of Class A
Charge-Offs and other principal
writedowns for the related
Transfer Date ......................... $______
(b) The aggregate amount of Class A
Charge-Offs and other principal
writedowns set forth in 5(a) above
per $1,000 of original Class A
Certificate principal amount .......... $______
(c) The aggregate amount of Class B
Charge-Offs and other principal
writedowns for the related
Transfer Date ......................... $______
(d) The aggregate amount of Class B
Charge-Offs and other principal
writedowns set forth in 5(c) above
per $1,000 of original Class B
Certificate principal amount .......... $______
(e) The aggregate amount of Class C
Charge-Offs and other principal
writedowns for the related
Transfer Date ......................... $______
(f) The aggregate amount of Class C
Charge-Offs and other principal
writedowns set forth in 5(e) above
per $1,000 of original Class C
Certificate principal amount ......... $______
B:4
(g) The aggregate amount of Class A
Charge-Offs and other principal
writedowns reimbursed on the
Transfer Date immediately
preceding this Distribution Date ...... $______
(h) The aggregate amount of Class A
Charge-Offs and other principal
writedowns set forth in 5(g) above
per $1,000 original Class A Certificate
principal amount reimbursed on the
Transfer Date immediately preceding
this Distribution Date ................ $______
(i) The aggregate amount of Class B
Charge-Offs and other principal
writedowns reimbursed on the Transfer
Date immediately preceding this
Distribution Date ..................... $______
(j) The aggregate amount of Class B
Charge-Offs and other principal
writedowns set forth in 5(i) above
per $1,000 original Class B Certificate
principal amount reimbursed on the
Transfer Date immediately preceding
this Distribution Date ................ $______
(k) The aggregate amount of Class C
Charge-Offs and other principal
writedowns reimbursed on the Transfer
Date immediately preceding this
Distribution Date .................... $______
(l) The aggregate amount of Class C
Charge-Offs and other principal
writedowns set forth in 5(k) above
per $1,000 original Class C Certificate
principal amount reimbursed on the
Transfer Date immediately preceding
this Distribution Date ............... $______
6. Investor Servicing Fee
(a) The amount of the Class A Servicing
Fee payable by the Trust to the
Servicer for the related Monthly
Period .............................. $______
B:5
(b) The amount of the Class B Servicing
Fee payable by the Trust to the
Servicer for the related Monthly
Period .............................. $______
(c) The amount of the Class C Servicing
Fee payable by the Trust to the
Servicer for the related Monthly
Period .............................. $______
7. Reallocations
(a) The amount of Reallocated Class C
Principal Collections with respect
to this Distribution Date ........... $______
(b) The amount of Reallocated Class B
Principal Collections with respect
to this Distribution Date ........... $______
(c) The amount of Reallocated Class A
Principal Collections with respect
to this Distribution Date ........... $______
8. Collection of Finance Charge Receivables
The aggregate amount of Collections of
Finance Charge Receivables (including Recoveries)
received during the related Monthly Period which
were allocated in respect of the Class A, Class B
and Class C Certificates ...................... $______
9. Available Funds
(a) The amount of Class A Available
Funds on deposit in the Finance
Charge Account on the related
Transfer Date ....................... $______
(b) The amount of Class B Available
Funds on deposit in the Finance
Charge Account on the related
Transfer Date ....................... $______
(c) The amount of Class C Available
Funds on deposit in the Finance
Charge Account on the related
Transfer Date ....................... $______
B:6
10. Pool Factor .................................... ______%
11. Yield Enhancement
(a) Available Yield Enhancement Amount
with respect to the related
Transfer Date ........................ $______
(b) Excess Finance Charges with respect
to the related Transfer Date ......... $______
(c) Amount withdrawn from Yield
Enhancement Account on the related
Transfer Date ........................ $______
C. Floating Rate Determination
1. LIBOR for the Interest Period ending on this
Distribution Date ............................. ______%
D. Amortization Periods
1. Class A Controlled Amortization Period commenced on ____ __, __.
2. Class B Controlled Amortization Period commenced on ____ __, __.
3. Class C Controlled Amortization Period commenced on ____ __, __.
4. Rapid Amortization Period commenced on ____ __, __.
E. Pay Out Events
(a) Finance Premium Percentage for
the related Monthly Period .................... ______%
(b) Financed Premium Percentage for the
Monthly Period immediately preceding
the related Monthly Period .................... ______%
(c) Financed Premium Percentage for the
Monthly Period next preceding the
related Monthly Period ........................ ______%
(d) Monthly Payment Rate for the related
Monthly Period ................................ ______%
(e) Monthly Payment Rate for the Monthly
Period immediately preceding the
related Monthly Period ........................ ______%
B:7
(f) Monthly Payment Rate for the Monthly
Period next preceding the related
Monthly Period ................................ ______%
(g) Annualized Monthly Excess Spread
Amount for the related Monthly Period ......... ______%
(h) Annualized Monthly Excess Spread
Amount for the Monthly Period
immediately preceding the related
Monthly Period ................................ ______%
(i) Annualized Monthly Excess Spread
Amount for the Monthly Period
next preceding the related Monthly
Period ........................................ ______%
To the knowledge of the undersigned, no Series 1998-1 Pay Out Event or Trust Pay
Out Event has occurred except as described below:
A.I. Credit Corp.,
AICCO, Inc., Servicer
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
B:8