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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
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SERIES 1998-1 SUPPLEMENT
Dated as of April [__], 1998
to
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of April [__], 1998
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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................. 14
SECTION 6. Depository; Form of Delivery of Certificates;
Transfer Restrictions............................... 14
SECTION 7. Article IV of Agreement................................... 15
SECTION 4.04 Rights of Certificateholders................... 15
SECTION 4.05 Allocations.................................... 15
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.............. 28
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......................... 32
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................................ 37
SECTION 11. Counterparts............................................. 37
i
SECTION 12. Governing Law............................................ 38
SECTION 13. No Petition.............................................. 38
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 April [__], 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 April [__], 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 X-0, X-0 xxx X-0, 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, 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 of Reallocated Principal Collections allocated pursuant
to subsection 4.12(a) on all prior Transfer Dates
3
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, 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 and (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 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.
5
"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, 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 and (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 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
6
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 April [__], 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,
$[___________].
"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.
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"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).
"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:
8
(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 Xxxxx'x Non-Investment Grade
Insurer (including for this purpose any affiliated Xxxxx'x
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 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.
9
"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 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 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 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).
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"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 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.
"Xxxxx'x 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 Xxxxx'x (other than AIG or
any wholly owned subsidiary of AIG), unless Xxxxx'x shall have previously
notified the Transferor in writing that such insurer is not to be deemed a
Xxxxx'x 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.
"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
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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 Xxxxx'x 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.
"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.
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"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).
"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.
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"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.
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.
14
(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 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.
15
(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 amounts required to be
otherwise applied under 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)
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(a)(v) and any comparable provision of
any other Supplement be greater than the Transferor Ownership Interest
on such date.
16
(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 (A) the amounts 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 amounts required to be otherwise
applied under 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 for any other Series 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 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.
17
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 (without duplication) 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 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
18
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 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
19
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.
(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.
20
(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;
(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
21
(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;
(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.
22
(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) and any comparable provision of
any other Supplement 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 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;
23
(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,
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(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) and any
comparable provision of any other Supplement 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).
(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;
24
(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:
(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;
25
(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,
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
26
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:
(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
27
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);
provided further, that in no event shall the amount payable to the Holder of
the Transferor Certificate pursuant to this subsection 4.11(g) and any
comparable provision of any other Supplement 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
28
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 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
29
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.
(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.
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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 other Supplement and (ii)
make deposits into the Excess Funding Account as specified in subsection
4.05(c) and any comparable provision of any other 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.
(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 Xxxxx 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%).
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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
(800) 524- 9472 or (000) 000-0000.
(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, 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.
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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 (without duplicating any such
amount required to be so added pursuant to any other Supplement) 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 Xxxxx'x 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 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
33
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;
(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);
34
(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;
(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
35
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;
(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;
36
(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.
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.
37
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 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 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 April [_], 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-1:1
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 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, 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 (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.
A-1:3
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 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 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 April [_], 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 forth hereinbelow. The assets of the
Trust will also include all monies on deposit in the Collection
A-2:1
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.
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 $[
A-2:2
] 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, 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 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)
A-2:3
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 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 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 April [_], 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-3:1
"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 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.
A-3:2
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 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, 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 of (i) Available Investor Principal Collections with respect to such
Distribution Date (minus the portion
A-3:3
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 Al above in respect of
Class A Monthly Principal.................................. $
----------------
3. The amount of the distribution set
forth in Al above in respect of
Class B Monthly Principal.................................. $
----------------
4. The amount of the distribution set forth in Al above in
respect of Class C
Monthly Principal.......................................... $
----------------
5. The amount of the distribution set
forth in Al above in respect of
Class A Monthly Interest................................... $
----------------
6. The amount of the distribution set
forth in Al above in respect of
Class A Additional Interest................................ $
----------------
B:1
7. The amount of the distribution set
forth in Al above in respect of
Class A Prior Period Interest.............................. $
----------------
8. The amount of the distribution set
forth in Al above in respect of
Class B Monthly Interest................................... $
----------------
9. The amount of the distribution set
forth in Al above in respect of
Class B Additional Interest................................ $
----------------
10. The amount of the distribution set
forth in Al above in respect of
Class B Prior Period Interest.............................. $
----------------
11. The amount of the distribution set
forth in Al above in respect of Class C
Monthly Interest........................................... $
----------------
12. The amount of the distribution set
forth in Al above in respect of Class C
Additional Interest........................................ $
----------------
13. The amount of the distribution set
forth in Al 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................................. $
----------------
B:2
(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:
B:3
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.................. $ %
------------------ -------------------
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......................................... $
----------------
B:4
(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.......................... $
----------------
(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................................ $
----------------
B:5
(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) 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............................ $
----------------
B:6
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......................................... $
----------------
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
, .
-------- ---- -----
B:7
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..................................... %
----------------
(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..................................................... %
----------------
B:8
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:9
