Exhibit 4.1
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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 Certificateholders
of the AIC Premium Finance Loan Master Trust
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AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of February [___], 1998
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions................................................ 2
Section 1.02 Other Definitional Provisions.............................. 21
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES...................... 23
Section 2.01 Conveyance of Receivables.................................. 23
Section 2.02 Acceptance by Trustee...................................... 25
Section 2.03 Representations and Warranties of the Original
Transferors and the Transferor......................... 25
Section 2.04 Representations and Warranties of the Original
Transferors and the Transferor Relating to the
Agreement and the Receivables.......................... 28
Section 2.05 Covenants of the Transferor................................ 33
Section 2.06 Addition of Receivables.................................... 35
Section 2.07 Removal of Receivables..................................... 36
ARTICLE III
ADMINISTRATION AND SERVICING
OF TRUST ASSETS.......................... 39
Section 3.01 Acceptance of Appointment and Other Matters Relating
to the Servicer........................................ 39
Section 3.02 Servicing Compensation..................................... 41
Section 3.03 Representations and Warranties of the Servicer............. 41
Section 3.04 Reports and Records for the Trustee........................ 44
Section 3.05 Annual Servicer's Certificate.............................. 45
Section 3.06 Annual Independent Accountants' Servicing Report........... 45
Section 3.07 Tax Treatment.............................................. 46
Section 3.08 Notices to the Transferor.................................. 47
Section 3.09 Reports to the Commission.................................. 47
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ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS................... 48
Section 4.01 Rights of Certificateholders............................... 48
Section 4.02 Establishment of Accounts.................................. 48
Section 4.03 Collections and Allocations................................ 50
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES].................... 53
ARTICLE VI
THE CERTIFICATES.......................... 54
Section 6.01 The Certificates........................................... 54
Section 6.02 Execution and Authentication of Certificates............... 54
Section 6.03 Registration of Transfer and Exchange of Certificates...... 55
Section 6.04 Mutilated, Destroyed, Lost or Stolen Certificates.......... 58
Section 6.05 Persons Deemed Owners...................................... 58
Section 6.06 Appointment of Paying Agent................................ 59
Section 6.07 Access to List of Certificateholders' Names and
Addresses.............................................. 60
Section 6.08 Authenticating Agent....................................... 60
Section 6.09 Transfer of Transferor Certificate; New Series Issuances... 62
Section 6.10 Book-Entry Certificates.................................... 64
Section 6.11 Notices to Clearing Agency................................. 65
Section 6.12 Definitive Certificates.................................... 65
Section 6.13 Global Certificate; Euro-Certificate Exchange Date......... 66
Section 6.14 Meetings of Certificateholders............................. 66
ARTICLE VII
OTHER MATTERS RELATING TO THE ORIGINAL
TRANSFERORS AND THE TRANSFEROR................... 68
Section 7.01 Liability of the Original Transferors and the Transferor... 68
Section 7.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Original Transferors or the
Transferor............................................. 68
Section 7.03 Limitation on Liability.................................... 69
Section 7.04 Liabilities................................................ 70
Section 7.05 Indemnification of the Trust and the Trustee by the
Original Transferors and the Transferor................ 70
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Section 7.06 Support Agreement.......................................... 71
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER.......................... 72
Section 8.01 Liability of the Servicer.................................. 72
Section 8.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer........................... 72
Section 8.03 Limitation on Liability of the Servicer and Others......... 73
Section 8.04 Servicer Indemnification of the Trust and the Trustee...... 73
Section 8.05 The Servicer Not to Resign................................. 74
Section 8.06 Access to Certain Documentation and Information
Regarding the Trust Assets............................. 74
Section 8.07 Transfer of Duties......................................... 75
Section 8.08 The Servicer to Pay Rating Agency Fees..................... 75
ARTICLE IX
PAY OUT EVENTS........................... 76
Section 9.01 Pay Out Events............................................. 76
Section 9.02 Additional Rights Upon the Occurrence of Certain
Events................................................. 76
ARTICLE X
SERVICER DEFAULTS......................... 79
Section 10.01 Servicer Defaults......................................... 79
Section 10.02 Trustee to Act; Appointment of Successor.................. 82
Section 10.03 Notification to Certificateholders........................ 84
Section 10.04 Waiver of Past Defaults................................... 84
ARTICLE XI
THE TRUSTEE............................ 85
Section 11.01 Duties of Trustee......................................... 85
Section 11.02 Certain Matters Affecting the Trustee..................... 86
Section 11.03 Trustee Not Liable for Recitals in Certificates........... 88
Section 11.04 Trustee May Own Certificates.............................. 88
Section 11.05 The Servicer to Pay Trustee's Fees and Expenses........... 88
Section 11.06 Eligibility Requirements for Trustee...................... 89
Section 11.07 Resignation or Removal of Trustee......................... 89
Section 11.08 Successor Trustee......................................... 90
Section 11.09 Merger or Consolidation of Trustee........................ 90
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Section 11.10 Appointment of Co-Trustee or Separate Trustee............. 91
Section 11.11 Tax Returns............................................... 92
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates........................................... 92
Section 11.13 Suits for Enforcement..................................... 93
Section 11.14 Rights of Certificateholders to Direct Trustee............ 93
Section 11.15 Representations and Warranties of Trustee................. 93
Section 11.16 Maintenance of Office or Agency........................... 93
ARTICLE XII
TERMINATION............................ 95
Section 12.01 Termination of Trust...................................... 95
Section 12.02 Cleanup Call.............................................. 96
Section 12.03 Final Payment with Respect to Any Series.................. 97
Section 12.04 Termination Rights of Holders of Transferor Certificate... 98
ARTICLE XIII
MISCELLANEOUS PROVISIONS...................... 99
Section 13.01 Amendment................................................. 99
Section 13.02 Protection of Right, Title and Interest to Trust..........100
Section 13.03 Limitation on Rights of Certificateholders................101
Section 13.04 Governing Law.............................................102
Section 13.05 Notices...................................................102
Section 13.06 Severability of Provisions................................103
Section 13.07 Assignment................................................103
Section 13.08 Certificates Non-Assessable and Fully Paid................103
Section 13.09 Further Assurances........................................103
Section 13.10 No Waiver; Cumulative Remedies............................103
Section 13.11 Counterparts..............................................103
Section 13.12 Third-Party Beneficiaries.................................103
Section 13.13 Actions by Certificateholders.............................104
Section 13.14 Rule 144A Information.....................................104
Section 13.15 Merger and Integration....................................104
Section 13.16 Headings..................................................104
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AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT dated as
of February [___], 1998, by and among A.I. Receivables Corp., a Delaware
corporation ("AIR"), as transferor (the "Transferor"), A.I. Credit Corp., a New
Hampshire corporation ("AIC"), as an original transferor and a servicer, AICCO,
Inc., a California corporation ("AICCO") as an original transferor (together
with AIC, the "Original Transferors") and a servicer (together with AIC, the
"Servicer"), and The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, as trustee (the "Trustee").
WHEREAS, the AIC Premium Finance Loan Master Trust was
created pursuant to a Pooling and Servicing Agreement dated as of December 1,
1994 (the "Original Agreement"), by and among AIC and AICCO, as transferors and
servicers, and the Trustee, as trustee.
WHEREAS, the Trust issued the Series 1994-1 Certificates on
the Initial Closing Date pursuant to the Original Agreement and the original
Series 1994-1 Supplement dated as of December 1, 1994 by and among AIC, AICCO
and the Trustee (the "Original Series 1994-1 Supplement").
WHEREAS, Section 13.01(a) of the Original Agreement provides
that such agreement and any supplement thereto may be amended for certain
specified purposes in writing from time to time by the parties thereto, without
the consent of any of the Certificateholders (as defined herein), provided that
such action does not adversely affect in any material respect the interests of
any Investor Certificateholder (as defined herein).
WHEREAS, the parties to the Original Agreement, together with
the Transferor desire to amend and restate the Original Agreement (i) to
designate AIR as transferor under the Trust, replacing AIC and AICCO as
transferors, (ii) to permit the transfer into the Trust of Receivables for which
the related Loans were purchased by AIC or AICCO, and (iii) to provide for the
transfer of the Transferor Certificate (as defined herein) from the Original
Transferors to the Transferor.
WHEREAS, in connection with such amendment and restatement of
the Original Agreement, AIR, as purchaser, and AIC and AICCO, as sellers, will
enter into a receivables sale agreement providing for the transfer of
Receivables (as defined herein) to the Transferor.
In consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other parties and the
Certificateholders (as defined herein):
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement,
the following words and phrases shall have the following meanings:
"Account Information" shall have the meaning specified in
subsection 2.02(b).
"Accumulation Period" shall mean, with respect to any Series,
or any Class within a Series, a period following the Revolving Period, which
shall be the accumulation or other period in which Collections of Principal
Receivables are accumulated in an account for the benefit of the Investor
Certificateholders of such Series, or a Class within such Series, in each case
as defined with respect to such Series in the related Supplement.
"Addition Date" shall mean each date as of which Additional
Receivables will be included as Trust Assets pursuant to Section 2.06.
"Additional Receivables" shall have the meaning specified in
subsection 2.06(b).
"Affiliate" of any Person shall mean any other Person
controlling, controlled by or under common control with such Person.
"Aggregate Certificateholders Ownership Interests" shall
mean, as of any date of determination, the sum of the Certificateholders
Ownership Interests of all Series of Certificates issued and outstanding on such
date of determination.
"Aggregate Default Amount" shall have, with respect to any
Series of Certificates, the meaning stated in the related Supplement.
"Aggregate Investor Percentage" with respect to Principal
Receivables and Finance Charge Receivables, as the case may be, shall mean, as
of any date of determination, the sum of the applicable Investor Percentages of
all Series of Certificates issued and outstanding on such date of determination;
provided, however, that the Aggregate Investor Percentage shall not exceed 100%.
"Agreement" shall mean this Amended and Restated Pooling and
Servicing Agreement and all amendments hereof and supplements hereto, including
any Supplement.
"AIC" shall mean A.I. Credit Corp., a New Hampshire
corporation.
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"AIC Support Agreement" shall mean the agreement between AIG
and AIC dated as of December 1, 1994, substantially in the form of Exhibit G to
this Agreement, together with the letter agreement between AIG and the Trustee
dated as of December 1, 1994, substantially in the form of Exhibit H to this
Agreement.
"AICCO" shall mean AICCO, Inc., a California corporation.
"AIG" shall mean American International Group, Inc., a
Delaware corporation.
"AIR" shall mean A.I. Receivables Corp., a Delaware
corporation.
"AIR Support Agreement" shall mean the agreement between AIG
and AIR dated as of February [___], 1998, substantially in the form of Exhibit I
to this Agreement, together with the letter agreement between AIG and the
Trustee dated as of February [___], 1998, substantially in the form of Exhibit J
to this Agreement.
"Amortization Period" shall mean, with respect to any Series,
or any Class within a Series, a period following the Revolving Period during
which principal is distributed to Investor Certificateholders, which shall be
the controlled amortization period, the principal amortization period, the rapid
amortization period, or other amortization period, in each case as defined with
respect to such Series in the related Supplement.
"Applicants" shall have the meaning specified in Section
6.07.
"Appointment Day" shall have the meaning specified in
subsection 9.02(a).
"Assignment" shall have the meaning specified in subsection
2.06(d)(ii).
"Authorized Newspaper" shall mean a newspaper of general
circulation in the Borough of Manhattan, the City of New York printed in the
English language (or, with respect to any Series, any additional city specified
in the Supplement for such Series) and customarily published on each Business
Day, whether or not published on Saturdays, Sundays and holidays.
"Bearer Certificates" shall have the meaning specified in
Section 6.01.
"Bearer Rules" shall mean the provisions of the Internal
Revenue Code, in effect from time to time, governing the treatment of bearer
obligations, including without limitation sections 163(f), 165(j), 871, 881,
1287(a), 1441, 1442
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and 4701, and any regulations promulgated under the Internal Revenue Code
including, to the extent applicable to any Series, Proposed or Temporary
Regulations.
"Book-Entry Certificates" shall mean certificates evidencing
a beneficial interest in the Investor Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 6.10; provided, that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer authorized and Definitive
Certificates have been issued to the Certificate Owners, such certificates shall
no longer be "Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in New York, New York, Los
Angeles, California or the city in which the Corporate Trust Office is located
(or, with respect to any Series, any additional city specified in the related
Supplement) are authorized or obligated by law or executive order to be closed.
"Cedel" shall mean Cedel Bank, societe anonyme.
"Certificate" shall mean any one of the Investor Certificates
of any Series or the Transferor Certificate.
"Certificate Interest" shall mean interest payable in respect
of the Investor Certificates of any Series pursuant to Article IV of the
Supplement for such Series.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as may be reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly or
as an indirect participant, in accordance with the rules of such Clearing
Agency).
"Certificate Principal" shall mean principal payable in
respect of the Investor Certificates of any Series pursuant to Article IV of
this Agreement.
"Certificate Rate" shall mean, with respect to any Series of
Certificates (or, for any Series with more than one Class, for each Class of
such Series), the percentage (or formula on the basis of which such rate shall
be determined) stated as such in the related Supplement.
"Certificate Register" shall mean the register maintained
pursuant to Section 6.03, providing for the registration of the Certificates and
transfers and exchanges thereof.
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"Certificateholder" or "Holder" shall mean the Person in
whose name a Certificate is registered in the Certificate Register and, if
applicable, the holder of any Bearer Certificate or Coupon, as the case may be,
or such other Person deemed to be a "Certificateholder" or "Holder" in any
related Supplement.
"Certificateholders Ownership Interests" shall have, with
respect to any Series of Certificates, the meaning stated in the related
Supplement.
"Class" shall mean, with respect to any Series, any one of
the classes of Certificates of that Series as specified in the related
Supplement.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended.
"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from time to time a
Clearing Agency or Foreign Clearing Agency effects book-entry transfers and
pledges of securities deposited with the Clearing Agency or Foreign Clearing
Agency.
"Closing Date" shall mean (i) the Initial Closing Date with
respect to the Series 1994-1 Certificates, (ii) the Series 1998-1 Closing Date
with respect to the Series 1998-1 Certificates, and (iii) with respect to any
other Series of Certificates, the date specified as such in the related
Supplement.
"Collateral Interest" shall have the meaning, with respect to
any Series, specified in the related Supplement.
"Collection Account" shall have the meaning specified in
subsection 4.02(a).
"Collections" shall mean all payments received by the
Servicer in respect of the Receivables, including without limitation Recoveries,
whether in the form of cash, checks, wire transfers, ATM transfers or other form
of payment in accordance with the applicable Premium Finance Agreement. If the
Servicer establishes any lock-box account for the receipt of payments, a payment
shall be deemed received by the Servicer on the date of deposit in such lock-box
account.
"Companion Series" shall mean (i) each Series which has been
paired with another Series (which Series may be prefunded or partially
prefunded), such that the reduction of the Certificateholders Ownership
Interests of such Series results in the increase of the Certificateholders
Ownership Interests of such other Series, as described in the related
Supplements, and (ii) such other Series.
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"Corporate Trust Office" shall mean the principal office of
the Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of the execution of this Agreement is
located at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Services Division, except that for purposes of
Sections 6.03(d), 6.06, and 11.16, such term shall mean the office or agency of
the Trustee in the Borough of Manhattan, the City of New York, which office at
the date hereof is located at 00 Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000.
"Coupon" shall have the meaning specified in Section 6.01.
"Credit Adjustment" shall have the meaning specified in
subsection 4.03(d).
"Credit Balance" shall mean, as of any date of determination,
(a) with respect to any Receivable arising under a Loan which is not a Defaulted
Loan, any Collections on such Loan in excess of the sum of (i) amounts due and
payable on such Loan during the month in which such date occurs and (ii) all
accrued and unpaid amounts, if any, on such Loan in respect of any month or
months prior to the month in which such date occurs or (b) with respect to any
Receivable arising under a Defaulted Loan, any Collections on such Defaulted
Loan in excess of all amounts due thereon.
"Credit Enhancement" shall mean, with respect to any Series,
the cash collateral account, letter of credit, surety bond, guaranteed rate
agreement, maturity guaranty facility, tax protection agreement, interest rate
swap or any other contract or agreement principally for the benefit of the
Certificateholders of such Series (or Certificateholders of a Class within such
Series) as designated in the applicable Supplement.
"Credit Enhancement Provider" shall mean, with respect to any
Series, the Person, if any, designated as such in the related Supplement.
"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.
"Cut-Off Date" shall mean (i) the Initial Cut-Off Date with
respect to the Series 1994-1 Certificates and (ii) the date, if any, specified
in the related Supplement with respect to any other Series of Certificates.
"Defaulted Loan" shall mean any Loan which (i) remains in
default as of the beginning of the month immediately following the first
anniversary of the cancellation of the related insurance policy, which
cancellation results from such
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default, or (ii) is overdue and which the Servicer determines, in accordance
with the Guidelines, is incapable of collection. A Loan shall be considered to
be a Defaulted Loan upon the earlier to occur of (i) or (ii).
"Definitive Certificate" shall have the meaning specified in
Section 6.10.
"Depository" shall have the meaning specified in Section
6.10.
"Depository Agreement" shall mean, with respect to each
Series, the agreement among the Original Transferors or the Transferor, as
applicable, the Trustee and the Clearing Agency, or as otherwise provided in the
related Supplement.
"Determination Date" shall mean, unless otherwise specified
in the related Series Supplement, the fourth Business Day prior to each Transfer
Date.
"Distribution Account" shall have the meaning specified in
subsection 4.02(c).
"Distribution Date" shall mean, with respect to each Series,
the dates specified in the related Supplement.
"Dollars", "$" or "U.S. $" shall mean United States dollars.
"Eligible Receivable" shall mean (i) with respect to
Receivables conveyed to the Trust on any Closing Date, as of the related Cut-Off
Date, or, if any such Receivable is originated after the related Cut-Off Date
and prior to such Closing Date, as of the date of origination thereof, (ii) with
respect to Existing Receivables other than those conveyed to the Trust on the
Initial Closing Date, as of the relevant date of transfer to the Trust and (iii)
with respect to any Additional Receivable, as of the relevant Addition Date,
each Receivable:
(a) which has arisen from a Loan made to an Obligor that used all
the proceeds of such Loan to pay premiums on property or casualty
insurance policies, governed by the law of any State of the United
States or the District of Columbia, under which such Obligor is the
insured;
(b) which has arisen from a Loan, having a stated maturity, that
complies in all material respects with all Requirements of Law
applicable to AIC, AICCO, any Third Party Originator and the Servicer
and which, at the time of transfer of such Receivable to the Trust,
complies in all material respects with all Requirements of Law
applicable to AIC, AICCO, any Third Party Originator and the Servicer;
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(c) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations or declarations with,
any Governmental Authority required to be obtained, effected or given
in connection with the creation of such Receivable or the execution,
delivery and performance by the related Originator of the Loan
relating to such Receivable, have been duly obtained, effected or
given and are in full force and effect as of the date of transfer of
such Receivable to the Trust;
(d) which, at the time of transfer of such Receivable to the
Trust, represents a beneficial interest in a Loan that has been
originated in accordance with the Guidelines and that has not been
waived or modified except for waivers or modifications that were made
by the Servicer in accordance with the Guidelines;
(e) as to which the related Loan is not subject to any right of
rescission, setoff, counterclaim, defense arising out of violations of
usury laws or any other defenses of any Obligor at the time of the
transfer of such Receivable to the Trust, other than defenses that may
arise after the time of transfer out of applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights in general and general equity
principles;
(f) as to which all obligations of the related Originator with
respect to such Receivable required to be fulfilled pursuant to the
Premium Finance Agreement and this Agreement, including the funding of
the related Loan, are satisfied;
(g) as to which, at the time of transfer of such Receivable to
the Trust, the related Originator has not taken any action which would
impair, or failed to take any action necessary to avoid impairing, the
rights of the Trust or the Certificateholders therein;
(h) with respect to which, in the case of Existing Receivables
transferred to the Trust after the Initial Closing Date and Additional
Receivables only, the Obligor under the related Loan is not the direct
obligor under any Defaulted Loan (other than under any Loan which is a
Defaulted Loan solely due to an event of bankruptcy with respect to an
obligor other than such direct obligor);
(i) which, in the case of Existing Receivables transferred to the
Trust after the Initial Closing Date and Additional Receivables only,
does not relate to a Defaulted Loan or a Loan which is overdue;
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(j) as to which the related Loan and all amounts due thereon are
denominated and payable only in Dollars;
(k) which has arisen from a Loan whereby the related Premium
Finance Agreement provides the related Originator a limited power of
attorney allowing it to cancel the related insurance policy, if
cancelable, in accordance with state law, upon non-payment of an
installment under such Premium Finance Agreement by the Obligor
thereunder; and
(l) which has arisen from a Loan whereby the related Premium
Finance Agreement allows the related Originator to direct the related
insurance company to pay to such party any Unearned Premium calculated
as of the time of cancellation of the related insurance policy, if
such insurance policy is cancelable.
"Eligible Servicer" shall mean the Trustee, a wholly-owned
subsidiary of the Trustee, or an entity which, at the time of its appointment as
Servicer, (a) is servicing a portfolio of insurance premium finance receivables
or other receivables comparable to the Receivables, (b) is legally qualified and
has the capacity and all licenses required to service the Receivables, (c) is
qualified (or licensed) to use the software that the Servicer is then currently
using to service the Receivables or obtains the right to use, or has its own,
software which is adequate to perform its duties under this Agreement, (d) has,
in the reasonable judgment of the Trustee, demonstrated the ability to
professionally and competently service a portfolio of similar accounts in
accordance with customary standards of skill and care and (e) has a net worth of
at least $25,000,000 as of the end of its most recent fiscal quarter.
"Enhancement Invested Amount" shall have the meaning, with
respect to any Series, specified in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Euroclear Operator" shall mean Xxxxxx Guaranty Trust Company
of New York, Brussels, Belgium office, as operator of the Euroclear System.
"Excess Receivables Amount" shall have the meaning, with
respect to any Series, specified in the related Supplement.
"Existing Receivables" shall have the meaning specified in
Section 2.01.
"Extended Trust Termination Date" shall have the meaning
specified in subsection 12.01(a).
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"FDIC" shall mean the Federal Deposit Insurance Corporation
or any successor thereto.
"Finance Charge Account" shall have the meaning specified in
subsection 4.02(b).
"Finance Charge Receivables" shall mean Receivables created
in respect of the Periodic Finance Charges and Late Fees and similar fees and
charges allocable to the Trust, calculated as provided in subsection 1.02(f).
"Foreign Clearing Agency" shall mean Cedel and the Euroclear
Operator.
"Future Receivables" shall have the meaning specified in
Section 2.01.
"Global Certificate" shall have the meaning specified in
Section 6.13.
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guidelines" shall mean the written policies and procedures
of AIC and AICCO relating to the operation of their respective insurance premium
finance businesses, including, without limitation, the policies and procedures
for determining the creditworthiness of insureds, insurance agents, insurance
brokers and insurance companies, and for the extension of credit to prospective
insureds and relating to the maintenance and servicing of Premium Finance
Agreements and collection of receivables thereunder, as such policies and
procedures may be amended from time to time.
"Holder" or "Certificateholder" shall mean the Person in
whose name a Certificate is registered in the Certificate Register and, if
applicable, the holder of any Bearer Certificate or Coupon, as the case may be,
or such other Person deemed to be a "Holder" or "Certificateholder" in any
related Supplement.
"Ineligible Receivable" shall have the meaning specified in
subsection 2.04(e)(ii).
"Initial Certificateholders Ownership Interests" shall mean,
with respect to any Series of Certificates, the amount stated in the related
Supplement.
"Initial Closing Date" shall mean December 22, 1994.
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"Initial Cut-Off Date" shall mean November 30, 1994.
"Insolvency Event" shall have the meaning specified in
subsection 9.01(a).
"Interest Period" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
"Investor Account" shall mean each of the Finance Charge
Account, the Principal Account and each of the Distribution Accounts.
"Investor Certificate" shall mean any one of the certificates
(including, without limitation, the Bearer Certificates, the Registered
Certificates or the Global Certificates) issued by the Trust, executed and
authenticated by the Trustee substantially in the form (or forms in the case of
a Series with multiple classes) of the investor certificate attached to the
related Supplement or such other interest in the Trust deemed to be an "Investor
Certificate" in any related Supplement.
"Investor Certificateholder" shall mean the holder of record
of an Investor Certificate.
"Investor Exchange" shall have the meaning specified in
subsection 6.09(b).
"Investor Percentage" shall have, with respect to Principal
Receivables and Finance Charge Receivables and any Series of Certificates, the
meaning stated in the related Supplement.
"Investor Servicing Fee" shall have, with respect to each
Series, the meaning specified in Section 3.02.
"Late Fees" shall have the meaning specified in the Premium
Finance Agreement applicable to each Loan for late fees or similar terms.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation or equity interest, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing and the filing of any financing statement under
the UCC (other than any such
11
financing statement filed for informational purposes only) or comparable law of
any jurisdiction to evidence any of the foregoing; provided, however, that any
assignment pursuant to Section 7.02 shall not be deemed to constitute a Lien.
"Loan" shall mean each loan to an Obligor in the United
States made by an Originator in accordance with the Guidelines under a Premium
Finance Agreement.
"Minimum Transferor Ownership Interest" shall mean, unless
otherwise specified in a Supplement, as of any date of determination, an amount
equal to the sum of (a)(i) 107% of an amount equal to the sum of the Initial
Certificateholders Ownership Interests of each outstanding Series minus (ii) the
sum of the Certificateholders Ownership Interests of each outstanding Series as
of such date of determination and (b) the Excess Receivables Amount for such
date to the extent the related Supplement requires the [addition] of such amount
in the calculation of the Minimum Transferor Ownership Interest
"Monthly Certificateholders' Statement" shall mean, with
respect to any Series of Certificates, a statement substantially in the form
attached in the relevant Supplement, with such changes as the Servicer may
determine to be necessary or desirable; provided, however, that no such change
shall serve to exclude information required by this Agreement or any Supplement.
"Monthly Period" shall mean, unless otherwise defined in any
Supplement, the period from and including the first day of a calendar month to
and including the last day of a calendar month.
"Monthly Servicer Report" shall mean a report substantially
in the form attached as Exhibit C to this Agreement or in such other form as
shall be agreed between the Servicer and the Trustee; provided, however, that no
such other agreed form shall serve to exclude information required by this
Agreement or any Supplement.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"New Series Issuance" shall mean any issuance of a new Series
of Certificates pursuant to Section 6.09 hereof.
"New Series Issuance Date" shall have the meaning, with
respect to any Series issued pursuant to a New Series Issuance, specified in
subsection 6.09(b).
"New Series Issuance Notice" shall have the meaning, with
respect to any Series issued pursuant to a New Series Issuance, specified in
subsection 6.09(b).
12
"Notice Date" shall have the meaning specified in subsection
2.06(d)(i).
"Obligor" shall mean, with respect to any Loan under a
Premium Finance Agreement, the Person or Persons obligated to make payments with
respect to such loan, including any guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by
any Vice President or more senior officer of the Transferor or the Servicer (of
both AIC and AICCO, if both are then acting as the Servicer), as the case may
be, and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be counsel for or an employee of the Person providing the opinion, and
who shall be reasonably acceptable to the Trustee; provided, however, that any
Tax Opinion or other opinion relating to federal income tax matters shall be an
opinion of nationally recognized tax counsel.
"Original Agreement" shall have the meaning specified in the
recitals to this Agreement.
"Original Series 1994-1 Supplement" shall have the meaning
specified in the recitals to this Agreement.
"Original Transferor" shall mean AIC or AICCO, as the case
may be.
"Originator" shall mean AIC, AICCO or, in the case of a Loan
purchased by AIC or AICCO, the related Third Party Originator.
"Pay Out Commencement Date" shall mean, (a) with respect to
each Series, the date on which a Trust Pay Out Event is deemed to occur pursuant
to Section 9.01 or (b) with respect to any Series, the date on which a Series
Pay Out Event is deemed to occur pursuant to the Supplement for such Series.
"Pay Out Event" shall mean, with respect to each Series, a
Trust Pay Out Event or a Series Pay Out Event.
"Paying Agent" shall mean any paying agent appointed pursuant
to Section 6.06 and shall initially be the Trustee's Corporate Trust Office.
"Periodic Finance Charges" shall mean, with respect to each
Loan, the monthly finance charges payable under the related Premium Finance
Agreement by the related Obligor.
13
"Permitted Investments" shall mean, unless otherwise provided
in the Supplement with respect to any Series (a) book-entry securities or
negotiable instruments or securities represented by instruments in bearer or
registered form which evidence (i) obligations of or fully guaranteed by the
United States of America; (ii) demand deposits, time deposits or certificates of
deposit of any depositary institution or trust company; provided, however, that
at the time of the Trust's investment or contractual commitment to invest
therein, either (A) the certificates of deposit of such depositary institution
or trust company shall have a credit rating from Moody's and Standard & Poor's
of P-1 and A-1+, respectively, and the long-term unsecured debt obligations of
such depositary institution or trust company shall have a credit rating from
Moody's and Standard & Poor's of Aa and AA, respectively or (B) such investment
is made with the corporate trust department of such depositary institution or
trust company and the certificates of deposit of such depositary institution or
trust company shall have a credit rating from Moody's and Standard & Poor's of
P-l and A-l, respectively, and the long-term debt obligations of such depositary
institution or trust company shall have a credit rating from Moody's and
Standard & Poor's of at least A and A, respectively; (iii) commercial paper
having, at the time of the Trust's investment or contractual commitment to
invest therein, a rating from Moody's and Standard & Poor's of P-l and A-l+,
respectively; (iv) bankers' acceptances issued by any depositary institution or
trust company described in clause (ii) above; (v) investments in money market
funds rated AAA-M or AAA-MG by Standard & Poor's or P-l by Moody's or otherwise
approved in writing by each Rating Agency; and (vi) demand deposits, time
deposits and certificates of deposit which are fully insured to the limits as
required by law and the FDIC; and (b) securities not represented by an
instrument that are registered in the name of the Trustee upon books maintained
for that purpose by or on behalf of the issuer thereof and identified on books
maintained for that purpose by the Trustee as held for the benefit of the Trust
or the Certificateholders, and consisting of shares of an open end diversified
investment company which is registered under the Investment Company Act of 1940,
as amended, and which (i) invests its assets exclusively in obligations of or
guaranteed by the United States of America or any instrumentality or agency
thereof having in each instance a final maturity date of less than one year from
their date of purchase or other Permitted Investments, (ii) seeks to maintain a
constant net asset value per share, (iii) has aggregate net assets of not less
than $100,000,000 on the date of purchase of such shares and (iv) each Rating
Agency designates in writing will not result in a withdrawal or downgrading of
its then current rating of any Series rated by it.
"Person" shall mean any legal person, including any
individual, corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or other entity of similar nature.
14
"Premium Finance Agreement" shall mean a written agreement by
which an insured or prospective insured promises to pay to the applicable
Originator an amount advanced or to be advanced thereunder to an insurer (or to
an insurance broker or agent for payment to the insurer) in payment of premiums
on an insurance contract together with any Periodic Finance Charges and any
other incidental fees and charges.
"Principal Account" shall have the meaning specified in
subsection 4.02(b).
"Principal Receivable" shall mean each Receivable other than
(i) Finance Charge Receivables and (ii) Recoveries, calculated as provided in
subsection 1.02(f).
"Principal Terms" shall have the meaning, with respect to any
Series issued pursuant to a New Series Issuance, specified in subsection
6.09(c).
"Qualified Institution" shall mean a depositary institution,
which may include the Trustee, organized under the laws of the United States or
any one of the States thereof including the District of Columbia, the deposits
in which are insured by the FDIC and which at all times has (x) a certificate of
deposit rating of at least A-1+ by Standard & Poor 5 and P-l by Moody's or a
long-term debt rating of at least AA by Standard & Poor's and at least Aa by
Moody's or (y) if such deposits are held in the corporate trust department of
such depositary institution, a certificate of deposit rating of at least A-l by
Standard & Poor's and P-1 by Moody's or a long-term debt rating of at least A by
Standard & Poor's and at least A by Xxxxx'x.
"Rating Agency" shall mean, with respect to each Series, the
rating agency or agencies, if any, selected by the Transferor (or the Original
Transferors in the case of Series 1994-1) to rate all or a portion of the
Certificates, as specified in the related Supplement.
"Rating Agency Condition" shall mean, unless otherwise
provided in a Supplement, with respect to any action requiring rating agency
approval or consent, that each Rating Agency rating any Series shall have
notified the Transferor, the Servicer and the Trustee in writing that such
action will not result in a reduction or withdrawal of the then current rating
of any outstanding Series or Class thereof with respect to which it is a Rating
Agency. Satisfaction of the Rating Agency Condition shall be an expense of the
Trust unless otherwise provided herein or in any Supplement.
"Reassignment" shall have the meaning specified in subsection
2.07(b)(ii).
15
"Reassignment Date" shall have the meaning specified in
subsection 2.04(e).
"Receivable" shall mean the entire beneficial interest in a
Loan, including all amounts due and to become due and all Collections on or in
respect of such Loan (including all Finance Charge Receivables, Principal
Receivables and Recoveries). The term "Receivable" shall be deemed to refer to
an Additional Receivable only from and after the Addition Date with respect
thereto, and the term "Receivable" shall be deemed to refer to any Removed
Receivable only prior to the Removal Date with respect thereto. The term
"Receivable" shall in no event include any Credit Balance.
"Record Date" shall mean, with respect to any Distribution
Date, the last Business Day of the preceding Monthly Period.
"Recoveries" shall mean all amounts, other than Credit
Balances, received by the Servicer from any Person (including the Obligor) with
respect to any Defaulted Loan, including, without limitation, any Unearned
Premium with respect thereto, and, if permitted by applicable law or regulation,
the right to receive dividends and loss payments on the related insurance
policy.
"Registered Certificates" shall have the meaning specified in
Section 6.01.
"Removal Date" shall mean any date on which designated
Removed Receivables will be reassigned by the Trustee to the Transferor.
"Removal Notice Date" shall have the meaning specified in
Section 2.07(a).
"Removed Receivables" shall have the meaning specified in
subsection 2.07(a).
"Requirements of Law" for any Person shall mean the
certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether federal, state or local (including, without limitation, usury
laws and laws relating to truth in lending).
"Responsible Officer" shall mean any officer within the
Corporate Trust Office (or any successor group of the Trustee), including any
Vice President, any Assistant Secretary or any other officer of the Trustee
customarily performing
16
functions similar to those performed by any person who at the time shall be an
above- designated officer and also, with respect to a particular matter, any
other officer to whom any corporate trust matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Restricted Period" shall have, with respect to any Series of
Certificates, the meaning designated as the "Restricted Period," if any, in the
related Supplement.
"Revolving Period" shall have, with respect to each Series,
the meaning specified in the related Supplement.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Series" shall mean any series of Investor Certificates,
which may include within any such Series multiple Classes of Investor
Certificates one or more of which may be subordinate to another such Class or
Classes of Investor Certificates.
"Series 1994-1 Supplement" shall have the meaning specified
in the recitals to this Agreement.
"Series 1998-1 Closing Date" shall have the meaning set forth
in the related Supplement.
"Series Account" shall mean any account or accounts
established pursuant to a Supplement for the benefit of the related Series.
"Series Pay Out Event" shall have, with respect to any
Series, the meaning specified pursuant to the related Supplement.
"Series Servicing Fee Percentage" shall mean, with respect to
any Series, the amount specified in the related Supplement.
"Series Temporary Regulation S Global Certificate" shall
mean, with respect to any Series of Certificates, the certificates designated as
such, if any, in the related Supplement.
"Series Termination Date" shall have, with respect to any
Series of Certificates, the meaning specified in the related Supplement.
"Servicer" shall mean initially AIC and AICCO and their
respective permitted successors and assigns and thereafter any Person appointed
as successor as herein provided to service the Receivables.
17
"Servicer Default" shall have the meaning specified in
Section 10.01.
"Servicer's Compliance Certificate" shall have the meaning
specified in Section 3.06.
"Servicing Fee" shall have the meaning specified in Section
3.02.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Receivables whose name appears on a list of servicing officers furnished to the
Trustee by the Servicer (by both AIC and AICCO, if both are then acting as the
Servicer), as such list may from time to time be amended.
"Shared Finance Charge Collections" shall mean, with respect
to any Transfer Date, the aggregate amount for all outstanding Series that the
related Supplements specify are to be treated as "Shared Finance Charge
Collections" for such Transfer Date.
"Shared Principal Collections" shall mean, with respect to
any Transfer Date, the aggregate amount for all outstanding Series that the
related Supplements specify are to be treated as "Shared Principal Collections"
for such Transfer Date.
"Standard & Poor's" shall mean Standard & Poor's Ratings
Group.
"Successor Servicer" shall have the meaning specified in
subsection 10.02(a).
"Supplement" or "Series Supplement" shall mean, (i) with
respect to Series 1994-1, the Series 1994-1 Supplement and (ii) with respect to
any other Series of Certificates, a supplement to this Agreement complying with
the terms of Section 6.09 of this Agreement, executed in conjunction with the
issuance of such Series of Certificates (or, in the case of the issuance of
Certificates on the Series 1998-1 Closing Date, the supplement executed in
connection with the issuance of such Certificates).
"Support Agreements" shall mean the AIC Support Agreement and
the AIR Support Agreement.
"Tax Opinion" shall mean with respect to any action or event,
an Opinion of Counsel to the effect that, for United States federal income tax
purposes and for income and/or franchise tax purposes of any state or locality
(if appropriate) in which the Servicer maintains its principal place of business
and any additional states or localities (as appropriate) in which the Servicer,
after the date hereof,
18
conducts substantial servicing activities in respect of Receivables, (a) such
action or event will not adversely affect the tax characterization of Investor
Certificates of any outstanding Series or Class issued to investors as debt, (b)
following such action or event, the Trust will not be treated as a taxable
entity and (c) such action or event will not cause or constitute a taxable event
to any Investor Certificateholder or the Trust.
"Termination Notice" shall have, with respect to any Series,
the meaning specified in subsection 10.01(a).
"Third Party Lender" shall mean an originator other than AIC
or AICCO that has originated a Loan to an Obligor in the United States in
accordance with the Guidelines, which Loan is subsequently purchased by AIC or
AICCO and sold to the Transferor.
"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.03 and shall initially be the Trustee's Corporate Trust
Office.
"Transfer Date" shall mean, unless otherwise specified in the
related Supplement, with respect to any Series, the Business Day immediately
prior to each Distribution Date.
"Transferor" shall mean AIR, and any successor or assignee
thereof permitted under Section 7.02.
"Transferor Certificate" shall mean the certificate or
certificates which represent the Transferor Ownership Interest, executed and
authenticated by the Trustee, substantially in the form of Exhibit A; provided
that at any time there shall be no more than two such certificates.
"Transferor Ownership Interest" shall mean, on any date of
determination, the aggregate amount of Principal Receivables then in the Trust
and as adjusted pursuant to subsection 4.03(d) and the principal amount on
deposit in any Principal Funding Account (as defined in any Supplement) at the
end of the day immediately prior to such date of determination, minus the
Aggregate Certificateholders Ownership Interests at the end of such day, minus
the aggregate Enhancement Invested Amounts, if any, for each Series outstanding
at the end of such day, minus the aggregate Collateral Interests not included in
the Aggregate Certificateholders Ownership Interests, if any, for each Series
outstanding at the end of such day.
"Transferor Ownership Interest Reduction" shall have the
meaning specified in subsection 6.09(b).
19
"Transferor Percentage" shall mean, on any date of
determination, when used with respect to Principal Receivables and Finance
Charge Receivables, a percentage equal to 100% minus the Aggregate Investor
Percentage with respect to such categories of Receivables.
"Transferor Servicing Fee" shall have the meaning specified
in Section 3.02.
"Trust" shall mean the trust created by this Agreement, the
corpus of which shall consist of the Trust Assets.
"Trust Assets" shall have the meaning specified in Section
2.01.
"Trust Extension" shall have the meaning specified in
subsection 12.01(a).
"Trust Pay Out Event" shall have, with respect to each
Series, the meaning specified in Section 9.01.
"Trust Termination Date" shall mean the earliest to occur of
(i) unless a Trust Extension shall have been delivered, the first Business Day
after the Distribution Date with respect to any Series following the day on
which funds shall have been deposited in the Distribution Accounts and any
applicable Series Account sufficient to pay in full (a) the Aggregate
Certificateholders Ownership Interests plus accrued Certificate Interest at the
applicable Certificate Rate through the applicable Interest Period prior to such
Distribution Date with respect to each such Series and (b) all amounts owed to
each Credit Enhancement Provider, (ii) if a Trust Extension shall have been
delivered, the Extended Trust Termination Date and (iii) the date of any
termination pursuant to Section 9.02(b).
"Trustee" shall mean The First National Bank of Chicago, and
its successors and any corporation resulting from or surviving any consolidation
or merger to which it or its successors may be a party and any successor trustee
appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in any specified jurisdiction (or, if no jurisdiction
is specified, as in effect in any applicable jurisdiction).
"Undivided Interest" shall mean the undivided interest in the
Trust evidenced by an Investor Certificate.
"Unearned Premium" shall mean, with respect to any Loan, the
portion, if any, of any insurance premium financed under the related Premium
20
Finance Agreement that is considered unearned and is required under applicable
law and/or the terms of the related insurance policy to be returned by the
insurance company directly, or indirectly through an insurance broker or agent,
to the related Originator upon receipt by the related Obligor of notice of
cancellation of the related insurance policy, if such insurance policy is
cancelable.
Section 1.02 Other Definitional Provisions.
(a) All terms defined in any Supplement or this Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
Section 1.01, and accounting terms partially defined in Section 1.01 to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained herein shall
control.
(c) The agreements, representations and warranties of AIC in
this Agreement and in any Supplement in each of its capacities as an Original
Transferor and as a Servicer shall be deemed to be the agreements,
representations and warranties of AIC solely in each such capacity for so long
as AIC acts in each such capacity under this Agreement; provided, however, that
the representations and warranties made by AIC with respect to the Existing
Receivables shall survive AIC's replacement as transferor. The agreements,
representations and warranties of AICCO in this Agreement and in any Supplement
in each of its capacities as an Original Transferor and as a Servicer shall be
deemed to be the agreements, representations and warranties of AICCO solely in
each such capacity for so long as AICCO acts in each such capacity under this
Agreement; provided, however, that the representations and warranties made by
AICCO with respect to the Existing Receivables shall survive AICCO's replacement
as transferor.
(d) Unless the context otherwise requires, if more than one
Person is acting as Servicer under this Agreement and any Supplement, the
agreements, representations and warranties of the Servicer in this Agreement and
any Supplement shall be deemed to be the joint and several agreements,
representations and warranties of such Persons for so long as such Persons act
in such capacity under this Agreement.
(e) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement or any Supplement shall refer to this
Agreement or such Supplement as a whole and not to any particular provision of
this
21
Agreement or any Supplement; and Section, subsection, Schedule and Exhibit
references contained in this Agreement or any Supplement are references to
Sections, subsections, Schedules and Exhibits in or to this Agreement or any
Supplement unless otherwise specified.
(f) The amount of Principal Receivable with respect to any
Loan on any date of determination shall be calculated by deducting from the
gross funded receivable shown for such date on the Servicer's servicing system
the amount of any unearned income thereon as of such date. Any Receivables which
the Transferor is unable to transfer as provided in subsection 2.05(c) shall not
be included in calculating the aggregate amount of Principal Receivables. In
allocating Collections on Receivables received during any Monthly Period, the
Servicer shall be entitled to allocate to Finance Charge Receivables an amount
equal to the reduction for such Monthly Period in unearned income for each
Receivable shown on the servicing system of the Servicer together with any
Recoveries and to allocate to Principal Receivables the remaining amount or to
follow any other method of allocation that is in accordance with generally
accepted accounting principles.
[End of Article I]
22
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Receivables. Pursuant to the
Original Agreement, the Original Transferors have transferred, assigned, and
otherwise conveyed to the Trust for the benefit of the Certificateholders,
without recourse, all of their respective right, title and interest in and to
the Receivables existing at any time after the Initial Cut-Off Date or
thereafter created up to (but excluding) the Series 1998-1 Closing Date,
including all Collections thereon, other than Credit Balances, received by the
Original Transferors after the Cut-Off Date (the "Existing Receivables"). The
Transferor hereby transfers, assigns, and otherwise conveys to the Trust for the
benefit of the Certificateholders, without recourse, all of its respective
right, title and interest in and to the Receivables (including Additional
Receivables) existing at any time on or after the Series 1998-1 Closing Date or
thereafter created, including all Collections thereon, other than Credit
Balances, received by the Transferor on or after the Series 1998-1 Closing Date
(the "Future Receivables") and required or permitted to be conveyed hereunder
pursuant to Section 2.05 hereof. Such property, together with all monies as from
time to time are deposited in the Collection Account, any Investor Account, any
Series Account and any other account maintained for the benefit of Holders 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, shall constitute the assets of the Trust
(collectively, the "Trust Assets").
In connection with such transfers, assignments and
conveyances (i) each Original Transferor (A) has recorded and filed, at its own
expense, a financing statement (including any continuation statements with
respect to such financing statement when applicable) with respect to the
Existing Receivables, for the transfer of general intangibles (as defined in
Section 9-106 of the UCC as in effect in the State of New York) ("general
intangibles") meeting the filing requirements of the laws of the States of New
York or California, as appropriate (each, an "Original Financing Statement") and
(B) has delivered a file-stamped copy of the related Original Financing
Statement or continuation statement or other evidence of such filing (which may,
for purposes of this Section 2.01, consist of telephone confirmation of such
filing) to the Trustee on or prior to the Initial Closing Date, and in the case
of any continuation statements filed pursuant to this Section 2.01, as soon as
practicable after receipt thereof by the Original Transferors, and (ii) the
Transferor agrees, at its own expense, (w) to amend the Original Financing
Statements, and/or to record and file a new financing statement (the "New
Financing Statement") with respect to the Receivables for the transfer of
"general intangibles" meeting the filing requirements of the States of New York,
Delaware and California, as appropriate, (x) to deliver a file-stamped copy of
the New Financing Statement or other evidence of such filing (which
23
may, for purposes of this Section 2.01, consist of telephone confirmation of
such filing) to the Trustee on or prior to the Series 1998-1 Closing Date, (y)
to cause the Servicer pursuant to Section 13.02 to record and file any
continuation statements with respect to the New Financing Statement, and (z) to
cause the Servicer pursuant to Section 13.02 to deliver a file-stamped copy of
each such continuation statement or other evidence of each such filing (which
may, for purposes of this Section 2.01, consist of telephone confirmation of
such filing) to the Trustee as soon as practicable after receipt thereof by the
Transferor. The foregoing transfers, assignments and conveyances to the Trust
shall be (and, with respect to the Existing Receivables, have been) made to the
Trustee, on behalf of the Trust, and each reference in this Agreement to such
transfers, assignments and conveyances shall be construed accordingly.
In connection with such transfers, (i) each Original
Transferor has, at its own expense, (x) indicated in its computer files that the
Existing Receivables have been transferred to the Trust pursuant to the Original
Agreement for the benefit of the Certificateholders, and (y) delivered to the
Trustee a computer file or microfiche list containing a true and complete list
of all such Existing Receivables, identified by account number and setting forth
the Receivable balance as of the Series 1998-1 Closing Date, and (ii) the
Transferor agrees, on or prior to each Closing Date on which Receivables are
transferred to the trust, at its own expense, (x) to cause AIC and AICCO to
indicate in their computer files that Future Receivables (other than any
Additional Receivables) have been transferred to the Trust pursuant to this
Agreement for the benefit of the Certificateholders and (y) to cause AIC and
AICCO to deliver to the Trustee a computer file or microfiche list containing a
true and complete list of all such Future Receivables, identified by account
number and setting forth the Receivable balance as of the applicable Cut-Off
Date. Such files or lists shall be marked as Schedule 1 to this Agreement and
delivered to the Trustee as confidential and proprietary, and are hereby
incorporated into and made a part of this Agreement.
The parties intend that if, and to the extent that, such
transfers are not deemed to be sales, the Original Transferors and the
Transferor shall be deemed hereunder to have granted to the Trustee a first
priority perfected security interest in all of their right, title and interest
in, to and under the Trust Assets for the purpose of securing a loan in an
amount equal to the unpaid principal amount of the Investor Certificates issued
hereunder and pursuant to one or more Supplements and the interest accrued at
the related Certificate Rate and to secure all of the Original Transferors', the
Transferor's and, in the case of AIC and AICCO, pursuant to Section 2.05, the
Servicer's obligations hereunder including, without limitation, the Transferor's
obligation to sell or transfer Receivables hereafter created to the Trust, and
that this Agreement shall constitute a security agreement under applicable law.
Pursuant to requests of the Original Transferors and the
Transferor, the Trustee has caused and shall cause Certificates in authorized
denominations
24
evidencing the entire interest in the Trust to be duly executed, authenticated
and delivered to or upon the orders of the Original Transferors pursuant to the
Original Agreement and the Transferor pursuant to Section 6.02.
Section 2.02 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on behalf
of the Trust, of all right, title and interest to the property now existing and
hereafter created, conveyed to the Trust pursuant to Section 2.01 hereof (or, in
the case of Existing Receivables, pursuant to section 2.01 of the Original
Agreement), and declares that it shall maintain such right, title and interest,
upon the trust herein set forth, for the benefit of all Certificateholders. The
Trustee further acknowledges that, prior to or simultaneously with the execution
and delivery of this Agreement, the Trustee has received the computer file or
microfiche list described in the third paragraph of Section 2.01.
(b) The Trustee hereby agrees not to disclose to any Person
any of the account numbers or other information contained in the computer files
or microfiche lists delivered to the Trustee by the Original Transferors or
caused to be delivered to the Trustee by the Transferor pursuant to Sections
2.01, 2.06 and 2.07 ("Account Information") except (i) as is required in
connection with the performance of its duties hereunder or in enforcing the
rights of the Certificateholders, (ii) to a Successor Servicer appointed
pursuant to Section 10.02, (iii) as mandated pursuant to any Requirement of Law
applicable to the Trustee or (iv) to the extent included in any financing
statement executed by the Original Transferors or the Transferor. The Trustee
agrees to take such measures as shall be reasonably requested by the Transferor
to protect and maintain the security and confidentiality of such information,
and, in connection therewith, shall allow the Transferor to inspect the
Trustee's security and confidentiality arrangements from time to time during
normal business hours. In the event that the Trustee is required by law to
disclose any Account Information, the Trustee shall provide the Transferor with
prompt written notice, unless such notice is prohibited by law, of any such
request or requirement so that the Transferor may request a protective order or
other appropriate remedy. The Trustee shall use its best efforts to provide the
Transferor with written notice no later than five days prior to any disclosure
pursuant to this subsection 2.02(b).
(c) The Trustee shall have no power to create, assume or
incur indebtedness or other liabilities in the name of the Certificateholders of
the Trust other than as contemplated in this Agreement.
Section 2.03 Representations and Warranties of the Original
Transferors and the Transferor. Each Original Transferor hereby represents and
warrants to the Trust, as of the date of the Original Agreement, the Initial
Closing Date, the date of this Agreement, and the Series 1998-1 Closing Date,
and the
25
Transferor hereby represents and warrants to the Trust, as of the date of this
Agreement and the Series 1998-1 Closing Date, that:
(a) Organization and Good Standing. It is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full power, authority and legal right
to own its properties and conduct its business as such properties are presently
owned and such business is presently conducted, and to execute, deliver and
perform its obligations under this Agreement.
(b) Due Qualification. It is duly qualified to do business
and is in good standing (or is exempt from such requirement) in any state
required in order to conduct business except where failure to so qualify or be
in good standing would not have a material adverse effect on its business, and
has obtained all necessary licenses and approvals with respect to it and the
conduct of its business required under federal, state and local laws except
where failure to obtain such licenses and approvals would not have a material
adverse effect on its business.
(c) Due Authorization. The execution and delivery of this
Agreement by it and the consummation of the transactions provided for in this
Agreement have been duly authorized by it by all necessary corporate action on
its part.
(d) No Conflict. The execution and delivery of this
Agreement, the performance of the transactions contemplated by this Agreement
and the fulfillment of the terms hereof by it will not conflict with, result in
any breach of, or constitute (with or without notice or lapse of time or both) a
default under, its charter or by-laws, any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which it is a party or by which
it or any of its properties are bound.
(e) No Violation. The execution and delivery of this
Agreement, the performance of the transactions contemplated by this Agreement
and the fulfillment of the terms hereof by it will not conflict with or violate
any Requirements of Law applicable to it or any of its properties.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best of its knowledge, threatened against it
before any Governmental Authority (i) asserting the invalidity of this Agreement
or the Certificates, (ii) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this Agreement or
the Certificates, (iii) seeking any determination or ruling that, in its
reasonable judgment, would materially and adversely affect its performance of
its obligations under this Agreement, (iv) seeking any determination or ruling
that would materially and
26
adversely affect the validity or enforceability of this Agreement or the
Certificates of (v) seeking to affect adversely the income tax attributes of the
Trust.
(g) Loans. As of the relevant Cut-Off Date, each Receivable
constituting part of the Trust Assets arose from a Loan.
(h) Accuracy of Information. All information heretofore
furnished by it in writing to the Trustee for purposes of or in connection with
this Agreement or any transactions contemplated hereby is, and all such
information hereafter furnished by it in writing to the Trustee will be, true
and accurate in every material respect.
(i) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery of this
Agreement and the Certificates, the performance of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof, have been obtained.
(j) Receivables Selection. The Receivables conveyed to the
Trust by it on the initial Closing Date represented all Eligible Receivables
owned by it as of the Cut-Off Date.
For the purposes of the representations and warranties
contained in this Section 2.03 and made by the Original Transferors on the
Initial Closing Date, "Certificates" shall mean the Certificates issued on the
Initial Closing Date and "Agreement" shall mean the Original Agreement. For the
purposes of the representatives and warranties contained in this Section 2.03
and made by the Original Transferors or the Transferor on the Series 1998-1
Closing Date, "Certificates" shall mean the Certificates issued on the Series
1998-1 Closing Date. The representations and warranties set forth in this
Section 2.03 shall survive the transfer and assignment of the Trust Assets to
the Trust, and termination of the rights and obligations of the Servicer
pursuant to Section 10.01. The Transferor hereby represents and warrants to the
Trust, with respect to any other Series of Certificates, as of its Closing Date,
unless otherwise stated in such Supplement, that its representations and
warranties set forth in this Section 2.03 are true and correct as of such date
(for the purposes of such representations and warranties, "Certificates" shall
mean the Certificates issued on the related Closing Date). Upon discovery by the
Transferor, the Servicer or the Trustee of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the others.
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Section 2.04 Representations and Warranties of the Original
Transferors and the Transferor Relating to the Agreement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment. The
Transferor hereby represents and warrants to the Trust that as of the Series
1998-1 Closing Date:
(i) This Agreement constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its
terms, except (A) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of creditors'
rights in general, and (B) as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in
equity).
(ii) This Agreement constitutes a valid transfer,
assignment and conveyance to the Trust of all of its right, title and
interest in and to the Trust Assets, which will be held by the Trust
free and clear of any Lien of any Person claiming through or under it
or any of its Affiliates except for (x) Liens permitted under
subsection 2.05(b), (y) its interest as Holder of the Transferor
Certificate and (z) its right, if any, to interest accruing on, and
investment earnings, if any, in respect of the Finance Charge Account,
the Principal Account or any Series Account, as provided in this
Agreement or the related Supplement. Neither it nor any Person claiming
through or under it has or shall have any claim to or interest in the
Principal Account, the Finance Charge Account, the Distribution Account
or any Series Account, except for its rights to receive interest
accruing on, and investment earnings in respect of, the Finance Charge
Account and Principal Account as provided in this Agreement (or, if
applicable, any Series Account as provided in any Supplement) and, if
this Agreement constitutes the grant of a security interest in such
property, except for its interest in such property as a debtor for
purposes of the UCC as in effect in the State of New York or
California, as the case may be.
(b) Eligibility of Existing Receivables. The Original
Transferors hereby represent and warrant to the Trust with respect to the
Existing Receivables and as of the Initial Closing Date and as of each
subsequent date on which Existing Receivables were transferred to the Trust (or
other specified date set forth below), as the case may be, that:
(i) Each such Receivable is an Eligible Receivable as
of the Initial Closing Date or the date of transfer to the Trust, as
applicable.
28
(ii) Each such Receivable then existing has been
conveyed to the Trust free and clear of any Lien of any Person claiming
through or under it or any of its Affiliates (other than Liens for
municipal or other local taxes if such taxes shall not at the time be
due and payable or if the applicable Original Transferor shall
currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto) and in compliance with all applicable
Requirements of Law.
(iii) With respect to each such Receivable then existing,
all material consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required
to be obtained, effected or given by it in connection with the
origination and servicing of the related Loan and the conveyance of
such Receivable to the Trust have been duly obtained, effected or given
and are in full force and effect.
(iv) With respect to such Receivables transferred to the
Trust after the Initial Closing Date only, (x) no selection procedures
believed by it to be materially adverse to the interests of the
Investor Certificateholders were utilized in selecting the Receivables
being conveyed by it, (y) as of the date of transfer to the Trust, it
is not insolvent and (z) as of the date of transfer to the Trust, it
has not received notice from any Rating Agency that an existing rating
of any Certificates will be reduced or withdrawn as a result of the
conveyance of the related Receivables.
(v) With respect to such Receivables transferred to the
Trust after the Initial Closing Date only, the Original Agreement and
the Assignment (as defined in the Original Agreement) constituted a
valid transfer, assignment and conveyance to the Trust, as of the date
of transfer to the Trust, of all rights, and beneficial interest of the
Original Transferors in and to the related Receivables, and such
Receivables are held by the Trust free and clear of any Lien of any
Person claiming through or under the Original Transferors or any of
their Affiliates except for Liens for municipal or other local taxes if
such taxes shall not at the time be due and payable or if the
applicable Original Transferor shall currently be contesting the
validity thereof in good faith by appropriate proceedings and shall
have set aside on its books adequate reserves with respect thereto and
(y) the Original Transferors' right, if any, to interest accruing on,
and investment earnings, if any, in respect of the Finance Charge
Account, the Principal Account or any Series Account, as provided in
this Agreement or the related Supplement.
(c) Eligibility of Future Receivables. The Transferor hereby
represents and warrants to the Trust with respect to the Future Receivables as
of the
29
Series 1998-1 Closing Date and as of each Addition Date (or other specified date
set forth below), as the case may be, that:
(i) Each Receivable is an Eligible Receivable as of the
Series 1998-1 Closing Date or the Addition Date, as applicable.
(ii) Each Receivable has been conveyed to the Trust free
and clear of any Lien of any Person claiming through or under it or any
of its Affiliates (other than Liens permitted under subsection 2.05(b))
and in compliance with all applicable Requirements of Law.
(iii) With respect to each Receivable conveyed to the
Trust, all material consents, licenses, approvals or authorizations of
or registrations or declarations with any Governmental Authority
required to be obtained, effected or given by an Originator in
connection with the origination and/or servicing of the related Loan
and the conveyance of such Receivable to the Trust have been duly
obtained, effected or given and are in full force and effect.
(iv) As of the Closing Date for a Series, and as of the
end of each Monthly Period during which one or more Addition Dates
shall have occurred with respect to Additional Receivables, the related
computer file or microfiche list referred to in Section 2.06(d), is an
accurate and complete listing in all material respects of all the
Receivables as of the applicable Cut-Off Date, or with respect to
Additional Receivables, as of the end of such Monthly Period, and the
information contained therein with respect to the identity of such
Receivables is true and correct in all material respects as of the end
of such Monthly Period.
(v) With respect to Additional Receivables only, (x) no
selection procedures materially adverse to the interests of the
Investor Certificateholders were utilized in selecting the Additional
Receivables being conveyed, (y) as of the Addition Date, it is not
insolvent and (z) as of the Addition Date, it has not received notice
from any Rating Agency that an existing rating of any Certificates will
be reduced or withdrawn as a result of the conveyance of the related
Additional Receivables.
(vi) With respect to Additional Receivables only, this
Agreement and the Assignment constituted a valid transfer, assignment
and conveyance to the Trust, as of the Addition Date, of all right,
title and interest in and to the Additional Receivables, and such
Additional Receivables are held by the Trust free and clear of any Lien
of any Person claiming through or under it or any of its Affiliates
except for (x) Liens permitted under subsection 2.05(b), (y) its
interest as Holder of the Transferor Certificate and (z) its right, if
any, to
30
interest accruing on, and investment earnings, if any, in respect of
the Finance Charge Account, the Principal Account or any Series
Account, as provided in this Agreement or the related Supplement.
(d) Notice of Breach. The representations and warranties set
forth in this Section 2.04 shall survive the transfer and assignment of the
respective Trust Assets to the Trust. Upon discovery by an Original Transferor,
the Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.04, the party
discovering such breach shall give prompt written notice to the other parties
mentioned above. The Original Transferors and the Transferor agree to cooperate
with the Servicer and the Trustee in attempting to cure any such breach.
(e) Transfer of Ineligible Receivables.
(i) Removal After Cure Period. In the event of a breach
with respect to a Receivable of any of the representations and
warranties set forth in subsection 2.04(b) and 2.04(c) and as a result
of such breach the Loan relating to such Receivable becomes a Defaulted
Loan, then, upon the expiration of 60 days (or such longer period as
may be agreed to by the Trustee in its sole discretion, but in no event
later than 120 days) from the earlier to occur of the discovery of any
such event and Defaulted Loan occurrence by the related Original
Transferor or the Transferor, as applicable, or receipt by the related
Original Transferor or the Transferor, as applicable, of written notice
of any such event and Defaulted Loan occurrence given by the Trustee,
such Receivable shall be removed from the Trust on the terms and
conditions set forth in subsection 2.04(e)(ii); provided, however, that
no such removal shall be required to be made if, on any day within such
applicable period, such representations and warranties with respect to
such Receivable shall then be true and correct in all respects as if
such Receivable had been created on such day.
(ii) Procedures for Removal. When the provisions of
subsection 2.04(e)(i) above require removal of a Receivable, the
related Original Transferor with respect to Existing Receivables or the
Transferor with respect to Future Receivables shall accept reassignment
of such Receivable (an "Ineligible Receivable") by (A) depositing into
the Collection Account an amount equal to the Finance Charge
Receivables due but not collected with respect to such Ineligible
Receivable; (B) the Transferor, with respect to Futures Receivables,
directing the Servicer to deduct the principal balance of each such
Ineligible Receivable from the Principal Receivables in the Trust used
to calculate the Transferor Ownership Interest; and (C) the Original
Transferors, with respect to Existing Receivables, depositing into the
Collection Account an amount equal to the principal balance of such
Ineligible
31
Receivable. In the event that the exclusion of an Ineligible Receivable
from the calculation of the Transferor Ownership Interest would cause
the Transferor Ownership Interest to be reduced below the Minimum
Transferor Ownership Interest or would otherwise not be permitted by
law, the Transferor shall concurrently make a deposit in the Principal
Account (for allocation as a Principal Receivable) in immediately
available funds prior to the Transfer Date related to such Monthly
Period in which such event occurred in an amount equal to the amount by
which the Transferor Ownership Interest would be reduced below the
Minimum Transferor Ownership Interest. The portion of such deposit
allocated to the Investor Certificates of each Series shall be
distributed to the Investor Certificateholders of each Series in the
manner specified in Article IV, if applicable, on the Distribution Date
immediately following such Transfer Date. Upon the reassignment to the
related Original Transferor or the Transferor, as applicable, of an
Ineligible Receivable, the Trust shall automatically and without
further action be deemed to transfer, assign and otherwise convey to
the related Original Transferor or the Transferor, as applicable,
without recourse, representation or warranty, all the right, title and
interest of the Trust in and to such Ineligible Receivable, all monies
due or to become due with respect to such Ineligible Receivable and all
proceeds of such Ineligible Receivable. Such reassigned Ineligible
Receivable shall be treated by the Trust as collected in full as of the
date on which it was transferred. The Trustee shall execute such
documents and instruments of transfer or assignment and take other
actions as shall reasonably be requested by the related Original
Transferor or the Transferor, as applicable, to evidence the conveyance
of such Ineligible Receivable pursuant to this subsection 2.04(e)(ii).
The obligations of the Original Transferors and the Transferor set
forth in this subsection 2.04(e)(ii) shall constitute the sole remedy
respecting any breach of the representations and warranties set forth
in subsection 2.04(b) and 2.04(c) with respect to such Receivable
available to Certificateholders or the Trustee on behalf of
Certificateholders.
(f) Reassignment of Trust Portfolio. In the event of a breach
of any of the representations and warranties set forth in subsection 2.04(a)
having a material adverse effect on the Trust, the Trustee, by notice then given
in writing to the Transferor (and to the Trustee and the Servicer, if given by
the Investor Certificateholders), may direct the Transferor to accept
reassignment of all of the Receivables (whether Existing or Future) within 60
days of such notice (or within such longer period as may be specified in such
notice but in no event longer than 120 days), and the Transferor shall be
obligated to accept reassignment of such Receivables on a Distribution Date
specified by the Transferor (such Distribution Date, the "Reassignment Date")
occurring within such applicable period on the terms and conditions set forth
below; provided, however, that no such reassignment shall be required to be made
if, at any time during such applicable period, with respect to a
32
breach of the representation and warranty contained in subsection 2.04(a)(i),
such representation shall then be true and correct in all respects and, with
respect to a breach of the representation and warranty in subsection
2.04(a)(ii), such representation and warranty shall then be true and correct in
all material respects. The Transferor shall deposit on the Transfer Date (in New
York Clearing House next day funds) preceding the Reassignment Date an amount
for each Series equal to the reassignment deposit amount for such Receivables
for such Series in the related Distribution Account or the applicable Series
Account, as provided in the related Supplement, for distribution to the Investor
Certificateholders pursuant to Article XII. The reassignment deposit amount with
respect to each Series for such reassignment, unless otherwise stated in the
related Supplement, shall be equal to (i) the Certificateholders Ownership
Interests of such Series at the end of the day on the last day of the Monthly
Period preceding the Reassignment Date, less the amount, if any, previously
allocated for payment of principal to such Certificateholders on the related
Distribution Date in the Monthly Period in which the Reassignment Date occurs,
plus (ii) an amount equal to all interest accrued but unpaid on the Investor
Certificates of such Series at the applicable Certificate Rate for the related
Interest Period through the last day of such Interest Period, less the amount,
if any, previously allocated for payment of interest to the Certificateholders
of such Series on the related Distribution Date in the Monthly Period in which
the Reassignment Date occurs. Payment of the reassignment deposit amount with
respect to each Series, and all other amounts in the related Distribution
Account or the applicable Series Account in respect of the preceding Monthly
Period, shall be considered a prepayment in full of the Receivables represented
by the Investor Certificates. On the Distribution Date following the Transfer
Date on which such amount has been deposited in full into the related
Distribution Account or the applicable Series Account, the Receivables shall be
released to the Transferor after payment of all amounts otherwise due hereunder
on or prior to such dates and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be prepared by and as are reasonably
requested by the Transferor to vest in the Transferor, or its designees or
assignees, all right, title and interest of the Trust in and to the Receivables.
If the Trustee or the Investor Certificateholders give notice directing the
Transferor to accept reassignment as provided above, the obligation of the
Transferor to accept reassignment of the Receivables and pay the reassignment
deposit amount pursuant to this subsection 2.04(e) shall constitute the sole
remedy respecting a breach of the representations and warranties contained in
subsection 2.04(a) available to the Investor Certificateholders or the Trustee
on behalf of the Investor Certificateholders.
Section 2.05 Covenants of the Transferor. The Original
Transferors with respect to Existing Receivables and the Transferor with respect
to Future Receivables hereby covenant that:
33
(a) Receivables to Be General Intangibles. It will take no
action to cause any Loan or Receivable to be evidenced by any instrument (as
defined in the UCC as in effect in the States of Delaware, New York and
California). Each Receivable shall be payable pursuant to a contract which does
not create a Lien on any goods purchased thereunder. It will take no action to
cause any Receivable to be anything other than a "general intangible" (as
defined in the UCC as in effect in the States of New York and California).
(b) Conveyances and Security Interests. Except for the
conveyances hereunder or under the Original Agreement, it will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien, on any of the Trust Assets, whether now existing or
hereafter created, or any interest therein or on the legal title to any Loan the
Receivable under which is part of the Trust Assets; it will immediately notify
the Trustee of the existence of any Lien on any of the Trust Assets or on the
legal title to any Loan the Receivable under which is part of the Trust Assets;
and it shall defend the right, title and interest of the Trust in, to and under
the Trust Assets, whether now existing or hereafter created, against all claims
of third parties claiming through or under it; provided, however, that nothing
in this subsection 2.05(b) shall prevent or be deemed to prohibit the Transferor
from suffering to exist upon any of the Trust Assets any Liens for municipal or
other local taxes if such taxes shall not at the time be due and payable or if
the Transferor shall currently be contesting the validity thereof in good faith
by appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto; provided, further, that it shall not be
prohibited hereby from conveying, assigning, selling, exchanging or otherwise
transferring Receivables and related Loans in connection with a transaction
complying with the provisions of Section 7.02.
(c) Receivables Allocations.
(i) In the event that the Transferor is unable for any
reason to transfer Receivables to the Trust in accordance with the
provisions of this Agreement (including, without limitation, by reason
of the application of the provisions of Section 9.02 or an order by any
federal or state governmental agency having regulatory authority over
it or any court of competent jurisdiction that the Transferor not
transfer any Receivables to the Trust) then, in any such event, (A) the
Transferor agrees to allocate and pay to the Trust, after the date of
such inability, all Collections with respect to Receivables, and all
amounts which would have constituted Collections with respect to
Receivables but for its inability to transfer such Receivables to the
Trust; (B) the Transferor agrees to have such amounts applied as
Collections in accordance with Article IV; and (C) for only so long as
all Collections and all amounts which would have constituted
Collections are allocated and applied in accordance with clauses (A)
and (B) above, Receivables (and all amounts
34
which would have constituted Receivables but for its inability to
transfer such Receivables to the Trust) shall continue to be allocated
in accordance with Article IV, and all amounts that would have
constituted Receivables but for its inability to transfer Receivables
to the Trust shall be deemed to be Receivables for the purpose of
calculating (i) the applicable Investor Percentage with respect to any
Series and (ii) the Aggregate Investor Percentage thereunder but shall
not be taken into account in computing the Minimum Transferor Ownership
Interest.
(ii) In the event that, pursuant to subsection 2.04(e),
it accepts reassignment of an Ineligible Receivable as a result of a
breach of the representations and warranties in subsection 2.04(b) or
2.04(c), as applicable, relating to such Receivable, then, in any such
event, it agrees to account for payments received with respect to such
Ineligible Receivable separately from its accounting for Collections on
Receivables retained by the Trust. If payments received from or on
behalf of an Obligor are not specifically applicable either to an
Ineligible Receivable of such Obligor reassigned to the Transferor or
to the Receivables of such Obligor retained in the Trust, then it
agrees to allocate payments proportionately based on the total amount
of Receivables of such Obligor retained in the Trust and the total
amount owing by such Obligor on any Ineligible Receivables reassigned
to the Transferor, and the portion allocable to any Receivables
retained in the Trust shall be treated as Collections and deposited in
accordance with the provisions of Article IV.
(d) Delivery of Collections. It agrees to pay to the Servicer
all Collections received by it in respect of the Receivables as soon as
practicable after receipt thereof, but in no event later than the second
Business Day after such receipt.
(e) Requirement of Law. It agrees to comply in all respects
with all Requirements of Law applicable to it, the Premium Finance Agreements or
the Loans, the failure to comply with which would have a material adverse effect
on the Investor Certificateholders.
Section 2.06 Addition of Receivables.
(a) If on any Determination Date the Transferor Ownership
Interest on such date is less than the Minimum Transferor Ownership Interest as
of the end of the immediately preceding Monthly Period, the Transferor shall,
unless otherwise permitted under the Supplement pursuant to which the Minimum
Transferor Ownership Interest is calculated, designate additional Eligible
Receivables ("Additional Receivables") to be included as Trust Assets in a
sufficient amount such that the Transferor Ownership Interest is at least equal
to such Minimum Transferor
35
Ownership Interest. Such Additional Receivables shall be transferred to the
Trust on or before the Transfer Date immediately following such Determination
Date.
(b) In addition to its obligation under subsection 2.06(a),
the Transferor may, but shall not be obligated to, designate on any date
Additional Receivables to be included as Trust Assets.
(c) On each Addition Date, the Transferor will be deemed to
have made the representations and warranties in subsection 2.04(c) as of such
date with respect to the related Additional Receivables and the related
Assignment.
(d) The Transferor agrees that any such transfer of
Additional Receivables by it under subsection 2.06(a) or (b) shall satisfy the
following conditions (to the extent provided below):
(i) on or before the third Business Day prior to the
Addition Date with respect to additions pursuant to subsection 2.06(a)
(the "Notice Date"), it shall give the Trustee and the Servicer written
notice that such Additional Receivables will be included, which notice
shall specify the approximate aggregate amount of the Receivables to be
transferred; and
(ii) on the Determination Date immediately following
each Monthly Period during which one or more Addition Dates shall have
occurred, the Transferor shall (A) have caused AIC and AICCO to
indicate in their computer files that the Additional Receivables have
been transferred to the Trust as of the related Addition Date, (B)
cause AIC and AICCO to deliver to the Trustee a computer file or
microfiche list containing a true and complete list of all Receivables
(including Additional Receivables conveyed to the Trust during such
Monthly Period), identified by account number and the aggregate amount
of the related Receivables, as of the end of such Monthly Period, which
computer file or microfiche list shall be incorporated into and made a
part of this Agreement as of the end of such Monthly Period and (C)
deliver to the Trustee a written confirmation of assignment (including
a confirmation of acceptance by the Trustee on behalf of the Trust for
the benefit of the Investor Certificateholders) of the Additional
Receivables conveyed to the Trust during such Monthly Period in
substantially the form of Exhibit B (the "Assignment").
Section 2.07 Removal of Receivables.
(a) Subject to the conditions set forth below, on each
Determination Date on which the Transferor Ownership Interest exceeds the
Minimum Transferor Ownership Interest on such Determination Date, the Transferor
may, but shall not be obligated to, designate Receivables for deletion and
removal ("Removed
36
Receivables") from the Trust; provided, however, that the Transferor shall not
make more than one such designation in any Monthly Period. On or before the
fifth Business Day (the "Removal Notice Date") prior to the date on which the
designated Removed Receivables will be reassigned by the Trustee to the
Transferor (the "Removal Date"), the Transferor shall give the Trustee and the
Servicer written notice that such Removed Receivables are to be reassigned to
the Transferor.
(b) The Transferor shall be permitted to designate and
require reassignment to it of Removed Receivables only upon satisfaction of the
following conditions:
(i) the removal of any Removed Receivables on any
Removal Date shall not, in the reasonable belief of the Transferor, (a)
cause a Pay Out Event to occur; provided, however, that for the
purposes of this subsection 2.07(b)(i), the Removed Receivables shall
be considered to have been removed as of the Removal Date, (b) cause
the Transferor Ownership Interest on such Removal Date to be less than
the Minimum Transferor Ownership Interest on such Removal Date or (c)
result in the failure to make any payment specified in the related
Supplement with respect to any Series;
(ii) on or prior to the Removal Date, the Transferor
shall have delivered to the Trustee for execution a written assignment
in substantially the form of Exhibit E (the "Reassignment") and, within
five Business Days thereafter, the Transferor shall have delivered to
the Trustee a computer file or microfiche list containing a true and
complete list of all Removed Receivables identified by account number
and the aggregate amount of such Removed Receivables as of the Removal
Date, which computer file or microfiche list shall as of the Removal
Date modify and amend and be made a part of this Agreement;
(iii) the Transferor shall represent and warrant that no
selection procedures believed by the Transferor to be materially
adverse to the interests of the Certificateholders were utilized in
selecting the Removed Receivables to be removed from the Trust;
(iv) on or before the tenth Business Day prior to the
Removal Date, each Rating Agency shall have received notice of such
proposed removal of the Receivables and the Transferor shall have
received notice prior to the Removal Date from such Rating Agency that
such proposed removal will not result in a downgrade or withdrawal of
its then current rating of any outstanding Series of the Investor
Certificates;
(v) the Transferor shall have delivered to the Trustee
an Officer's Certificate confirming the items set forth in clauses (i)
through (iv) above.
37
The Trustee may conclusively rely on such Officer's Certificates, shall
have no duty to make inquiries with regard to the matters set forth
therein and shall incur no liability in so relying;
(vi) the Transferor, the Trustee and each Rating Agency
shall have received an Opinion of Counsel that the proposed removal
will not adversely affect the United States federal income tax
characterization of the Trust; and
(vii) the proposed removal of Receivables shall not
violate any provisions of the Financial Accounting Standard Board's
Statement of Financial Accounting Standards 125 or any directives or
pronouncements promulgated thereunder, as evidenced by an Officer's
Certificate from the Transferor to such effect.
Upon satisfaction of the above conditions, the Trustee shall
execute and deliver the Reassignment to the Transferor, the Removed Receivables
shall no longer constitute a part of the Trust and the Transferor Ownership
Interest shall be decreased by the amount of the Principal Receivable with
respect to each such Removed Receivable.
[End of Article II]
38
ARTICLE III
ADMINISTRATION AND SERVICING
OF TRUST ASSETS
Section 3.01 Acceptance of Appointment and Other Matters
Relating to the Servicer.
(a) AIC shall act as the Servicer under this Agreement with
respect to all Loans under Premium Finance Agreements originated by it or
purchased by it from Third Party Lenders and AICCO shall act as the Servicer
with respect to all Loans under Premium Finance Agreements originated by it or
purchased by it from Third Party Lenders.
(b) The Servicer shall service and administer the Loans
giving rise to Receivables and shall collect payments due thereunder or in
connection therewith in accordance with its customary and usual servicing
procedures for servicing loans giving rise to receivables comparable to the
Receivables and in accordance with the Guidelines. The Servicer shall have full
power and authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing and subject to Section 10.01, the Servicer is hereby
authorized and empowered (i) to make withdrawals from the Collection Account as
set forth in this Agreement, (ii) unless such power and authority is revoked by
the Trustee on account of the occurrence of a Servicer Default pursuant to
Section 10.01, to instruct the Trustee to make withdrawals and payments from the
Finance Charge Account, the Principal Account and any Series Account, in
accordance with such instructions as set forth in this Agreement or any
applicable Supplement, (iii) unless such power and authority is revoked by the
Trustee on account of the occurrence of a Servicer Default pursuant to Section
10.01, to instruct the Trustee in writing, as set forth in this Agreement, (iv)
to execute and deliver, on behalf of the Trust for the benefit of the
Certificateholders, any and all instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other comparable instruments,
with respect to the Receivables, the related Loans and other Trust Assets and,
after any delinquency in payment relating to any Receivable, to the extent
permitted under and in compliance with applicable law and regulations, to
commence enforcement proceedings with respect thereto (including cancellation of
the related insurance policy) and (v) to make any filings, reports, notices,
applications, registrations with, and to seek any consents or authorizations
from, the Securities and Exchange Commission and any state securities authority
on behalf of the Trust as may be necessary or advisable to comply with any
federal or state securities or reporting requirements. The Trustee agrees that
it shall promptly follow the instructions of the Servicer to withdraw funds from
the Principal Account, the Finance Charge Account or any Series Account and to
take any action required under any Credit Enhancement at such time as required
under this
39
Agreement or any applicable Supplement. The Trustee shall execute at the
Servicer's written request such documents prepared by the Transferor and
acceptable to the Trustee as may be necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
(c) In the event that the Transferor is unable for any reason
to transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including, without limitation, by reason of the application of the
provisions of Section 9.02 or the order of any federal or state or governmental
agency having regulatory authority over the Transferor or any court of competent
jurisdiction that the Transferor not transfer any Receivables to the Trust)
then, in any such event, (A) the Servicer agrees to allocate, after such date,
all Collections with respect to Receivables, and all amounts which would have
constituted Collections with respect to Receivables but for the Transferor's
inability to transfer such Receivables, in accordance with subsection 2.05(c);
(B) the Servicer agrees to apply such amounts as Collections in accordance with
Article IV; and (C) for only so long as all Collections and all amounts which
would have constituted Collections are allocated and applied in accordance with
clauses (A) and (B) above, Receivables and all amounts which would have
constituted Receivables but for the Transferor's inability to transfer
Receivables to the Trust shall continue to be allocated in accordance with
Article IV and all amounts which would have constituted Receivables but for the
Transferor's inability to transfer Receivables to the Trust shall be deemed to
be Receivables for the purpose of calculating (i) the applicable Investor
Percentage with respect to any Series and (ii) the Aggregate Investor Percentage
thereunder but shall not be taken into account in computing the Minimum
Transferor Ownership Interest.
(d) In the event that pursuant to subsection 2.04(e), an
Original Transferor or the Transferor accepts reassignment of an Ineligible
Receivable as a result of a breach of the representations and warranties in
subsection 2.04(b) or subsection 2.04(c), respectively, relating to such
Receivable, or the Servicer accepts reassignment of a Receivable pursuant to
Section 3.03, then, in any such event, the Servicer agrees to account for
payments received with respect to such Receivable separately from its accounting
for Collections on Receivables retained by the Trust. If payments received from
or on behalf of an Obligor are not specifically applicable either to an
Ineligible Receivable of such Obligor reassigned to the Transferor, to a
Receivable of such Obligor reassigned to the Servicer or to Receivables of such
Obligor retained in the Trust, then the Servicer agrees to allocate payments
proportionately based on the total amount of Receivables of such Obligor
retained in the Trust, the total amount owing by such Obligor on any Ineligible
Receivables purchased by the Transferor and the total amount owing by such
Obligor on any Receivables purchased by the Servicer, and the portion allocable
to any Receivables retained in the Trust shall be treated as Collections and
deposited in accordance with the provisions of Article IV.
40
(e) The Servicer shall not be obligated to use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used by the
Servicer in connection with servicing other receivables.
(f) At any time during which the AIC Support Agreement is not
in effect with respect to the Servicer, the Servicer shall maintain fidelity
bond coverage insuring against losses through wrongdoing of its officers and
employees who are involved in the servicing of Trust Assets covering such
actions and in such amounts as the Servicer believes to be reasonable from time
to time.
(g) The Servicer shall, with respect to any Receivable and
the related Loan, where the related Premium Finance Agreement and applicable law
so permits, act expeditiously in exercising its right to cancel the related
insurance policy and, upon cancellation of the related insurance policy, take
such action in accordance with the Guidelines as shall be appropriate in order
to collect any Unearned Premiums or any other amounts payable by the insurer
following cancellation of such insurance policy.
Section 3.02 Servicing Compensation. As compensation for its
servicing activities hereunder and reimbursement for its expenses as set forth
in the immediately following paragraph, the Servicer shall be entitled to
receive a servicing fee (the "Servicing Fee") prior to the termination of the
Trust pursuant to Section 12.01. The Servicing Fee shall be payable, with
respect to each Series, at the times and in the amounts set forth in the related
Supplement. The Servicing Fee shall be allocated between the Investor
Certificates (the "Investor Servicing Fee") and the Holder of the Transferor
Certificate (the "Transferor Servicing Fee").
The Servicer's expenses include the amounts due to the
Trustee pursuant to Section 11.05, the fees and expenses of the Paying Agent,
Transfer Agent and Registrar, the fees and disbursements of independent public
accountants and all other expenses incurred by the Servicer in connection with
its activities hereunder; provided, that the Servicer in its capacity as such
shall not be liable for any liabilities, costs or expenses of the Trust, the
Investor Certificateholders or the Certificate Owners arising under any tax law,
including without limitation any federal, state or local income or franchise
taxes or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith)
except to the extent that such liabilities, taxes or expenses arose as a result
of the breach by the Servicer of its obligations under Section 11.11 herein. The
Servicer shall be required to pay such expenses for its own account and shall
not be entitled to any payment therefor other than the Servicing Fee.
Section 3.03 Representations and Warranties of the Servicer.
Each of AIC and AICCO, as initial Servicer, hereby represents, warrants and
covenants to and
41
for the benefit of the Trust as of the date of this Agreement and as of each
Closing Date:
(a) Organization and Good Standing. The Servicer is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has full
corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and as such
business is presently conducted, and to execute, deliver and perform
its obligations under this Agreement.
(b) Due Qualification. The Servicer is not required to
qualify nor register as a foreign corporation in any state in order to
service the Trust Assets as required by this Agreement and has obtained
all licenses and approvals necessary in order to so service the Trust
Assets as required under federal, state and local law.
(c) Due Authorization. The execution, delivery, and
performance of this Agreement have been duly authorized by the Servicer
by all necessary corporate action on the part of the Servicer.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Servicer, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereinafter in effect, affecting the enforcement of
creditors' rights in general.
(e) No Violation. The execution and delivery of this
Agreement by the Servicer, and the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
applicable to the Servicer, will not conflict with, violate, result in
any breach of, or constitute (with or without notice or lapse of time
or both) a default under, its charter or by-laws, any Requirement of
Law applicable to the Servicer or any indenture, contract, agreement,
mortgage, deed of trust or other instrument to which the Servicer is a
party or by which it or any of its properties is bound.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the Servicer
threatened, against the Servicer before any Governmental Authority
seeking to prevent the issuance of the Certificates or the consummation
of any of the transactions contemplated by this Agreement, seeking any
determination or ruling that, in the reasonable judgment of the
Servicer,
42
would materially and adversely affect the performance by the Servicer
of its obligations under this Agreement, or seeking any determination
or ruling that would materially and adversely affect the validity or
enforceability of this Agreement.
(g) Compliance with Requirement of Law. The Servicer shall
duly satisfy all obligations on its part to be fulfilled under or in
connection with each Receivable and the related Loan, will maintain in
effect all qualifications and licenses in order to service each
Receivable and the related Loan, the failure to comply with which would
have a material adverse effect on the Certificateholders and will
comply with all other Requirements of Law in connection with servicing
each Receivable and the related Loan the failure to comply with which
would have a material adverse effect on the Certificateholders.
(h) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental
Authority or official required in connection with the execution and
delivery of this Agreement, the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms thereof
by the Servicer have been obtained where the failure to obtain any such
approval, authorization, consent, order or other action would have a
material adverse effect on the Certificateholders.
(i) No Rescission or Cancellation. The Servicer shall not
permit any rescission or cancellation of any Premium Finance Agreement
or the related Loan except in accordance with its customary and usual
servicing procedures and the Guidelines or as ordered by a court of
competent jurisdiction or other Governmental Authority.
(j) Protection of Certificateholders' Rights. The Servicer
shall take no action which, nor omit to take any action the omission of
which, would materially impair the rights of Certificateholders in any
Receivable or the related Premium Finance Agreement or the related
Loan, nor shall it reschedule, revise or defer payments due except in
accordance with its customary and usual servicing procedures and the
Guidelines.
(k) Loans Not to Be Evidenced by Promissory Notes. The
Servicer will take no action to cause any Loan to be evidenced by any
instrument (as defined in the UCC as in effect in the State of New York
or California, as the case may be).
43
(l) Accuracy of Information. All information heretofore
furnished by the Servicer in writing to the Trustee for purposes of or
in connection with this Agreement or any transaction contemplated
hereby is, and all such information hereafter furnished by it in
writing to the Trustee will be, true and accurate in every material
respect.
In the event of noncompliance by the Servicer with its covenants set forth in
subsections (g), (i) or (j) above and such noncompliance has a material adverse
effect on the Certificateholders' interest in a Receivable, then, upon the
expiration of 60 days from the discovery of any such noncompliance by the
Servicer or receipt by the Servicer of written notice of any such noncompliance
given by the Trustee, such Receivable shall be removed from the Trust on the
terms and conditions set forth in the following paragraph; provided, however,
that no such removal shall be required to be made if, on any day within such
applicable period, such noncompliance shall have been cured in all material
respects by the Servicer.
When the provisions of the preceding paragraph require removal of a
Receivable, the Servicer shall accept reassignment of such Receivable by
depositing an amount equal to the amount of such Receivable in the Collection
Account on the date of reassignment. Upon the reassignment to the Servicer of
such Receivable, the Trust shall automatically and without further action be
deemed to transfer, assign and otherwise convey to the Servicer, without
recourse, representation or warranty, all the right, title and interest of the
Trust in and to such Receivable. Such reassigned Receivable shall be treated by
the Trust as collected in full as of the date on which it was transferred. The
Trustee shall execute such documents and instruments of transfer or assignment
and take other actions as shall reasonably be requested by the Servicer to
evidence the conveyance of such Receivable pursuant to this paragraph. Except as
provided in subsection 10.01(b), the obligation of the Servicer set forth in
this paragraph shall constitute the sole remedy respecting any noncompliance
with a covenant set forth in subsections (g), (i) or (j) above with respect to a
Receivable available to Certificateholders or the Trustee on behalf of
Certificateholders.
Section 3.04 Reports and Records for the Trustee.
(a) Daily Reports. The Servicer shall, upon reasonable prior
notice, prepare and make available at the office of the Servicer for inspection
by the Trustee on any Business Day during normal business hours a record setting
forth (i) the aggregate amount of Collections processed by the Servicer on the
preceding Business Day and (ii) the aggregate amount of Receivables included in
the Trust as of the close of business on the preceding Business Day.
(b) Monthly Servicer Report. Unless otherwise stated in the
related Supplement with respect to any Series, on each Determination Date the
Servicer shall
44
forward to the Trustee and each Rating Agency a Monthly Servicer Report prepared
by the Servicer.
Section 3.05 Annual Servicer's Certificate. On or before
April 30 of each calendar year, beginning with April 30, 1996, the Servicer has
delivered or will deliver, as the case may be, as provided in Section 13.05, to
the Trustee, a statement signed by an officer substantially in the form of
Exhibit D stating that (a) a review of the activities of the Servicer during the
twelve-month period ending on December 31 of the preceding calendar year, or for
the initial period, from the Initial Closing Date until December 31, 1995, and
of its performance under this Agreement was made under the supervision of the
officer signing such statement and (b) to the best of such officer's knowledge,
based on such review, the Servicer has fully performed all its obligations under
this Agreement in all material respects throughout such period, or, if there has
been a default in the performance of any such obligation, specifying each such
default known to such officer and the nature and status thereof. A copy of such
certificate may be obtained by any Investor Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office.
Section 3.06 Annual Independent Accountants' Servicing
Report.
(a) On or before April 30 of each calendar year, beginning
with April 30, 1996, the Servicer has caused or shall cause, as the case may be,
a firm of nationally recognized independent accountants (who may also render
other services to the Servicer or the Transferor) to furnish, as provided in
Section 13.05, a report to the Trustee, the Servicer, any Credit Enhancement
Provider and each Rating Agency to the effect provided in the following sentence
and a Servicing Officer shall deliver to such firm, in advance of the date by
which such firm is to deliver its report (as may be reasonably requested by such
firm) a certificate that the Servicer has, during the calendar year preceding
the date of such firm's report, complied in all material respects with the terms
and conditions set forth in Article III and Article IV, in each case as
supplemented by each Supplement, subclause (i) of the third paragraph of Section
2.01 hereof and subclause (ii)(A) of subsection 2.06(d) hereof (the "Servicer's
Compliance Certificate"). Such report shall provide that such firm has examined
the Servicer's Compliance Certificate for the related calendar year, including a
review of certain documents and records relating to the servicing of Receivables
under this Agreement and each Supplement, and compared the information contained
in the Monthly Servicer Reports forwarded by the Servicer pursuant to subsection
3.04(b) during the period covered by such firm's report (which shall be the
period from and including January 1 of the preceding calendar year to and
including December 31 of the preceding calendar year, or, for the initial
period, from the Initial Closing Date until December 31, 1995) with such
documents and records and that, on the basis of such examination, such firm is
of the opinion that the Servicer's Compliance Certificate has been fairly stated
in all material respects, except for such exceptions as such firm shall believe
to be immaterial and such other exceptions as shall be set forth in such report.
Unless otherwise
45
provided with respect to any Series in the related Supplement, a copy of such
report may be obtained by any Investor Certificateholder by a request in writing
to the Trustee addressed to the Corporate Trust Office.
(b) On or before April 30 of each calendar year, beginning
with April 30, 1996, the Servicer has caused or shall cause, as the case may be,
a firm of nationally recognized independent certified public accountants (who
may also render other services to the Servicer or the Transferor) to furnish, as
provided in Section 13.05, a report to the Trustee, the Servicer, any Credit
Enhancement Provider and each Rating Agency, to the effect that they have
compared the mathematical calculations of each amount set forth in the Monthly
Servicer Reports forwarded by the Servicer pursuant to subsection 3.04(b) during
the period covered by such report (which shall be the period from and including
January 1 of the preceding calendar year to and including December 31 of the
preceding calendar year, or, for the initial period, from the Initial Closing
Date until December 31, 1995) with the Servicer's computer reports which were
the source of such amounts and that on the basis of such comparison, such firm
is of the opinion that such amounts are in agreement, except for such exceptions
as it believes to be immaterial and such other exceptions as shall be set forth
in such report. A copy of such report may be obtained by any Investor
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office.
Section 3.07 Tax Treatment. The Original Transferors and the
Transferor have structured this Agreement, the Investor Certificates and any
Collateral Interest with the intention that the Investor Certificates and any
Collateral Interest will qualify under applicable United States federal, state,
local and foreign tax law as indebtedness of the Transferor secured by the
Receivables. The Original Transferors, the Transferor, the Servicer, the Holder
of the Transferor Certificate, each Investor Certificateholder, each Certificate
Owner and each owner of any Collateral Interest or interest therein agree to
treat and to take no action inconsistent with the treatment of the Investor
Certificates and any Collateral Interest (or beneficial interest therein) as
such indebtedness for purposes of United States federal, state, local and
foreign income or franchise taxes and any other tax imposed on or measured by
income. Each Investor Certificateholder and the Holder of the Transferor
Certificate, by acceptance of its Certificate, each Certificate Owner, by
acquisition of a beneficial interest in a Certificate, and any owner of any
Collateral Interest or interest therein, by acquisition of such interest
therein, agree to be bound by the provisions of this Section 3.07. Each
Certificateholder agrees that it will cause any Certificate Owner acquiring an
interest in a Certificate through it, and each owner of any Collateral Interest
or any interest therein agrees that it will cause any Person acquiring any such
interest, to comply with this Agreement as to treatment as indebtedness under
applicable tax law, as described in this Section 3.07. Notwithstanding this
Section 3.07, if the treatment of any Investor Certificate or Collateral
Interest or interest therein as indebtedness is challenged by any governmental
authority, the Holder of the Transferor Certificate and any owner of such
interest do not intend to be foreclosed from adopting as a secondary tax
position that
46
such interest constitutes equity in a partnership and that such partnership is
not a "publicly traded partnership" taxable as an association for United States
tax purposes.
Section 3.08 Notices to the Transferor. In the event that
either of AIC or AICCO is no longer acting as Servicer, any Successor Servicer
appointed pursuant to Section 10.02 shall deliver or make available to the
Transferor each certificate and report required to be prepared, forwarded or
delivered thereafter pursuant to Sections 3.04, 3.05 and 3.06.
Section 3.09 Reports to the Commission. The Trustee shall, on
behalf of the Trust, cause to be filed with the Securities and Exchange
Commission any periodic reports required to be filed under the provisions of the
Securities Exchange Act of 1934 and the rules and regulations of the Securities
and Exchange Commission thereunder, which report shall include such information
necessary to comply with such Act or rules and regulations. The Transferor, if
either AIC or AICCO is not a Servicer, shall, at the expense of the Servicer,
cooperate in any reasonable request of the Servicer in connection with such
filings.
[End of Article III]
47
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.01 Rights of Certificateholders. Each Series of
Investor Certificates shall represent Undivided Interests in the Trust,
including the benefits of any Credit Enhancement issued with respect to such
Series and the right to receive the Collections and other amounts at the times
and in the amounts specified in this Article IV to be deposited in the Investor
Accounts and any other Series Account (if so specified in the related
Supplement) or to be paid to the Investor Certificateholders of such Series;
provided, however, that the aggregate interest represented by such Certificates
at any time in the Principal Receivables shall not exceed an amount equal to the
Certificateholders Ownership Interests at such time. The Transferor Certificate
shall represent the remaining undivided interest in the Trust not allocated to
the Investor Certificates and the other interests issued by the Trust, including
the right to receive the Collections and other amounts at the times and in the
amounts specified in this Article IV to be paid to the Holder of the Transferor
Certificate; provided, however, that the aggregate interest represented by such
Transferor Certificate at any time in the Principal Receivables shall not exceed
the Transferor Ownership Interest at such time and such Certificate shall not
represent any interest in the Investor Accounts, except as provided in this
Agreement, or the benefits of any Credit Enhancement issued with respect to any
Series.
Section 4.02 Establishment of Accounts.
(a) The Collection Account. The Servicer, for the benefit of
the Certificateholders, shall establish and maintain in the State of New York or
in the city in which the Corporate Trust Office is located, with a Qualified
Institution in the name of the Trustee, on behalf of the Trust, a non-interest
bearing segregated account (the "Collection Account") bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Certificateholders. Pursuant to authority granted to it pursuant
to subsection 3.01(b), the Servicer shall have the revocable power to withdraw
funds from the Collection Account for the purposes of carrying out its duties
hereunder.
(b) The Finance Charge and Principal Accounts. The Trustee,
for the benefit of the Investor Certificateholders, shall establish and maintain
in the State of New York or in the city in which the Corporate Trust Office is
located, with a Qualified Institution, in the name of the Trust two non-interest
bearing segregated trust accounts (the "Finance Charge Account" and the
"Principal Account," respectively), each bearing a designation clearly
indicating that the funds therein are held for the benefit of the Investor
Certificateholders. The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Finance Charge Account and
48
the Principal Account and in all proceeds thereof. The Finance Charge Account
and the Principal Account shall be under the sole dominion and control of the
Trustee for the benefit of the Investor Certificateholders. Pursuant to
authority granted to it hereunder, the Servicer shall have the revocable power
to instruct the Trustee to withdraw funds from the Finance Charge Account and
Principal Account for the purpose of carrying out the Servicer's duties
hereunder. The Trustee at all times shall maintain accurate records reflecting
each transaction in the Principal Account and the Finance Charge Account and
that funds held therein shall at all times be held in trust for the benefit of
the Investor Certificateholders.
(c) The Distribution Accounts.
The Trustee, for the benefit of the Investor
Certificateholders, shall establish and maintain in the State of New
York or in the city in which the Corporate Trust Office is located,
with one or more Qualified Institutions, in the name of the Trust, a
non-interest bearing segregated trust account for each Series (each, a
"Distribution Account" and collectively, the "Distribution Accounts")
bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Investor
Certificateholders of such Series. The Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the
Distribution Accounts and in all proceeds thereof. The Distribution
Accounts shall be under the sole dominion and control of the Trustee
for the benefit of the Investor Certificateholders.
(d) Series Accounts.
If so provided in the related Supplement, the Trustee
or the Servicer, for the benefit of the Investor Certificateholders,
shall cause to be established and maintained in the name of the Trust,
one or more Series Accounts. Each such Series Account shall bear a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Investor Certificateholders of such Series.
Each such Series Account will be a trust account, if so provided in the
related Supplement, and will have the other features and be applied as
set forth in the related Supplement.
(e) Administration of the Finance Charge and Principal
Accounts. Funds on deposit in the Principal Account and the Finance Charge
Account that are not both deposited and to be withdrawn on the same date shall
be invested in Permitted Investments. Any such investment shall mature and such
funds shall be available for withdrawal on or prior to the Transfer Date related
to the Monthly Period in which such funds were received or deposited, or if so
specified in the related Supplement, immediately preceding a Distribution Date.
The Trustee shall maintain for the benefit of the Investor Certificateholders
possession of the negotiable instruments or securities evidencing the Permitted
Investments described in clause (a) of the definition thereof
49
from the time of purchase thereof until the time of sale or maturity; provided,
that no such investment shall be disposed of prior to its maturity date. At the
end of each month, all interest and earnings (net of losses and investment
expenses) on funds on deposit in the Principal Account and the Finance Charge
Account shall be paid to the Holder of the Transferor Certificate. If at the end
of a month losses and investment expenses on funds on deposit in either of the
Principal Account and the Finance Charge Account exceed interest and earnings on
such funds during such month, losses and expenses to the extent of such excess
will be allocated, with respect to any Series, among the Investor
Certificateholders of such Series and the Holder of the Transferor Certificate
as provided in the related Supplement. Subject to the restrictions set forth
above, the Holder of the Transferor Certificate, or a Person designated in
writing by the Holder of the Transferor Certificate, of which the Trustee shall
have received written notification thereof, shall have the authority to instruct
the Trustee with respect to the investment of funds on deposit in the Principal
Account and the Finance Charge Account. For purposes of determining the
availability of funds or the balances in the Finance Charge Account and the
Principal Account for any reason under this Agreement, all investment earnings
on such funds shall be deemed not to be available or on deposit.
(f) Qualified Institution. If, at any time, the institution
holding any account established pursuant to this Section 4.02 ceases to be a
Qualified Institution, the Trustee shall notify each Rating Agency and within 10
Business Days establish a new account or accounts, as the case may be, meeting
the conditions specified above with a Qualified Institution, and shall transfer
any cash or any investments to such new account or accounts, as the case may be.
Section 4.03 Collections and Allocations.
(a) Collections. Except as provided below, the Servicer shall
deposit all Collections in the Collection Account as promptly as possible after
the date of receipt of such Collections, but in no event later than the second
Business Day following such date of receipt.
The Servicer shall allocate such amounts to each Series of
Investor Certificates and to the Holder of the Transferor Certificate in
accordance with this Article IV and shall withdraw the required amounts from the
Collection Account or pay such amounts to the Holder of the Transferor
Certificate in accordance with this Article IV, in both cases as modified by any
Supplement. The Servicer shall make such deposits or payments on the date
indicated therein by wire transfer or as otherwise provided in the Supplement
for any Series of Certificates with respect to such Series.
Notwithstanding anything in this Agreement to the contrary,
for so long as, and only so long as, AIC shall remain the Servicer hereunder,
and (a) the AIC Support Agreement as in effect on the Initial Closing Date
remains in effect with
50
respect to the Servicer and is not terminated, modified or amended other than in
accordance with its terms, and AIG has and maintains a long-term rating from
Moody's and Standard & Poor's of at least Aa and AA, respectively, or (b) AIC
has and maintains a commercial paper rating from Moody's and Standard & Poor's
of P-l and A-l, respectively, the Servicer need not deposit Collections to the
Collection Account in the manner provided in this Article IV or, with respect to
any Series, make daily payments from the Collection Account and daily deposits
into the Finance Charge Account, the Principal Account or any Series Account as
provided in any applicable Supplement prior to the close of business on the day
any Collections are deposited in the Collection Account as provided in this
Article IV, but may make such deposits on the Transfer Date immediately
preceding the related Distribution Date in an amount equal to the lesser of (A)
Collections received in the immediately preceding Monthly Period allocable to
the Aggregate Certificateholders Ownership Interests and (B) the amount required
to be deposited in the Finance Charge Account, the Principal Account or any
Series Account or, without duplication, distributed on or prior to the related
Distribution Date to the Investor Certificateholders.
Notwithstanding anything else in this Agreement to the
contrary, with respect to any Monthly Period, whether the Servicer is required
to make monthly or daily deposits from the Collection Account into the Finance
Charge Account, the Principal Account or any Series Account, as provided in any
Supplement, (i) the Servicer will only be required to deposit Collections from
the Collection Account into the Finance Charge Account, the Principal Account or
any Series 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 Investor Certificateholders or to any Credit Enhancement
Provider pursuant to the terms of any Supplement or agreement relating to such
Credit Enhancement, (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 may allocate
such excess amount to the Transferor Certificate and pay such amount to the
Holder of the Transferor Certificate in accordance with subsection 4.03(c) and
(iii) the Servicer will transfer to, or at the direction of, the Transferor any
amounts representing Credit Balances promptly after the date of receipt of such
amounts.
(b) Allocation of Collections Between Finance Charge
Receivables and Principal Receivables. At all times and for all purposes of this
Agreement, the Servicer shall allocate Collections received in respect of any
Loan for any Monthly Period to Finance Charge Receivables and to Principal
Receivables in the manner specified in subsection 1.02(f).
(c) Allocations for the Transferor Certificate. Throughout
the existence of the Trust, unless otherwise stated in any Supplement, the
Servicer shall allocate to the Holder of the Transferor Certificate an amount
equal to the product of (A) the Transferor Percentage and (B) the aggregate
amount of Collections allocated to
51
Principal Receivables and Finance Charge Receivables, respectively, in respect
of each Monthly Period. Notwithstanding anything in this Agreement to the
contrary, unless otherwise stated in any Supplement, the Servicer need not
deposit this amount or any other amounts so allocated to the Transferor
Certificate pursuant to any Supplement into the Collection Account and shall
pay, or be deemed to pay, such amounts as collected to the Holder of the
Transferor Certificate.
(d) Adjustments to Transferor Ownership Interest. The
Servicer shall be obligated on or prior to each Determination Date to deduct on
a net basis for each Monthly Period from the aggregate amount of Principal
Receivables used to calculate the Transferor Ownership Interest as provided in
this paragraph of subsection 4.03(d) (a "Credit Adjustment") the portion of each
Principal Receivable which is reduced by the Servicer by any rebate, refund,
charge-back or adjustment (including due to Servicer errors) made in accordance
with the Guidelines.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND SHALL BE
SPECIFIED IN ANY SUPPLEMENT WITH RESPECT TO ANY SERIES]
[End of Article IV]
52
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
[End of Article V]
53
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates. Subject to Sections 6.10 and
6.13, the Investor Certificates of each Series and any Class thereof may be
issued in bearer form (the "Bearer Certificates") with attached interest coupons
and a special coupon (collectively, the "Coupons") or in fully registered form
(the "Registered Certificates"), and shall be substantially in the form of the
exhibits with respect thereto attached to the related Supplement; provided,
however, that Bearer Certificates shall be issued only in conformity with
applicable laws and regulations, including without limitation the applicable
Bearer Rules. The Transferor Certificate shall be substantially in the form of
Exhibit A. The Investor Certificates and the Transferor Certificate shall, upon
issue pursuant to this Section 6.01, Section 6.09 or Section 6.10, be executed
and authenticated on behalf of the Trust by the Trustee, not personally but
solely as Trustee hereunder. Any Investor Certificate shall be issuable in a
minimum denomination of $1,000 Undivided Interest and integral multiples
thereof, unless otherwise specified in any Supplement. If specified in the
related Supplement for any Series, the Investor Certificates shall be issued
upon initial issuance as a single certificate in an original principal amount
equal to the Initial Certificateholders Ownership Interests as described in
Section 6.10. The Transferor Certificate shall not be represented by more than
two certificates. Each Certificate shall be executed by manual or facsimile
signature on behalf of the Trust by any authorized officer of the Trustee.
Certificates bearing the manual or facsimile signature of the individual who
was, at the time when such signature was affixed, authorized to sign on behalf
of the Trustee shall not be rendered invalid, notwithstanding that such
individual has ceased to be so authorized prior to the authentication and
delivery of such Certificates or does not hold such office at the date of such
Certificates. Unless otherwise provided in the related Supplement, no
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein, executed by or on
behalf of the Trustee by the manual signature of a duly authorized signatory,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication
except Bearer Certificates which shall be dated the applicable issuance date as
provided in the related Supplement.
Section 6.02 Execution and Authentication of Certificates.
Contemporaneously with the initial assignment and transfer of the Trust Assets
(as defined in the Original Agreement) to the Trust, the Trustee executed,
authenticated and delivered the initial Series of Investor Certificates, having
the terms specified in the Original Series 1994-1 Supplement, upon the written
order of the Original Transferors, to the underwriters for sale or to the
Original Transferors for initial retention by them. Upon receipt of such assets
and the issuance of such Investor Certificates, such Investor
54
Certificates became fully paid and non-assessable. The Trustee executed,
authenticated and delivered the Transferor Certificate to the Original
Transferors simultaneously with its delivery to the Original Transferors of the
initial Series of Investor Certificates.
Pursuant to Section 6.09 hereof, the Trustee shall execute,
authenticate and deliver a Series of Investor Certificates having the terms
specified in the related Supplement, upon the written order of the Transferor,
to the underwriters for sale or to the Transferor for initial retention by it.
Upon receipt of such Trust Assets and the issuance of the Investor Certificates,
such Investor Certificates shall be fully paid and non-assessable.
Simultaneously with such delivery to the Transferor of such Series of Investor
Certificates by the Trustee, the Transferor Certificate shall be transferred
from the Original Transferors to the Transferor. Upon a New Series Issuance as
provided in Section 6.09 and the satisfaction of certain other conditions
specified therein, the Trustee shall execute, authenticate and deliver the
Investor Certificates of additional Series (with the designation provided in the
related Supplement), upon the order of the Transferor, to the Persons designated
in such Supplement. Upon the order of the Transferor, the Certificates of any
Series shall be duly executed and authenticated by or on behalf of the Trustee,
in authorized denominations. If specified in the related Supplement for any
Series, the Trustee shall execute, authenticate and deliver the Global
Certificate that is issued upon original issuance thereof, upon the written
order of the Transferor, to the Depository against payment of the purchase price
therefor. If specified in the related Supplement for any Series, the Trustee
shall execute and authenticate Book-Entry Certificates that are issued upon
original issuance thereof, upon the written order of the Transferor, to a
Clearing Agency or its nominee as provided in Section 6.10 against payment of
the purchase price thereof.
Section 6.03 Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall cause to be kept at the office or
agency to be maintained by a transfer agent and registrar (the "Transfer Agent
and Registrar"), in accordance with the provisions of Section 6.03(d), a
register (the "Certificate Register") in which, subject to such reasonable
regulations as it may prescribe, the Transfer Agent and Registrar shall provide
for the registration of the Investor Certificates of each Series (unless
otherwise provided in the related Supplement) and of transfers and exchanges of
the Investor Certificates as herein provided. The Trustee is hereby initially
appointed Transfer Agent and Registrar for the purposes of registering the
Investor Certificates and transfers and exchanges of the Investor Certificates
as herein provided. If any form of Investor Certificate is issued as a Global
Certificate, the Trustee may, or if and so long as any Series of Investor
Certificates are listed on the Luxembourg Stock Exchange, and such exchange
shall so require, the Trustee shall appoint a co-transfer agent and co-registrar
in Luxembourg or another European city. Any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and
co-registrar unless the context otherwise requires. The Trustee shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' written notice
to the Servicer. In
55
the event that the Trustee shall no longer be the Transfer Agent and Registrar,
the Trustee shall appoint a successor Transfer Agent and Registrar.
Upon surrender for registration of transfer of any
Certificate at any office or agency of the Transfer Agent and Registrar, the
Trustee shall execute, subject to the provisions of subsection 6.03(c), and
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of like
aggregate Undivided Interests; provided, that the provisions of this paragraph
shall not apply to Bearer Certificates.
At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of the same Series
in authorized denominations of like aggregate Undivided Interests, upon
surrender of the Investor Certificates to be exchanged at any such office or
agency. At the option of any Holder of Registered Certificates, Registered
Certificates may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests in the
Trust, upon surrender of the Registered Certificates to be exchanged at any
office or agency of the Transfer Agent and Registrar maintained for such
purpose. Registered Certificates may not be exchanged for Bearer Certificates.
At the option of any Holder of Bearer Certificates, subject to applicable laws
and regulations (including without limitation, the Bearer Rules), Bearer
Certificates may be exchanged for other Bearer Certificates or Registered
Certificates of the same Series in authorized denominations of like aggregate
Undivided Interests in the Trust, in the manner specified in the Supplement for
such Series, upon surrender of the Bearer Certificates to be exchanged at an
office or agency of the Transfer Agent and Registrar located outside the United
States. Each Bearer Certificate surrendered pursuant to this Section 6.03 shall
have attached thereto (or be accompanied by) all unmatured Coupons, provided
that any Bearer Certificate so surrendered after the close of business on the
Record Date preceding the relevant Distribution Date after the related Series
Termination Date need not have attached the Coupons relating to such
Distribution Date.
Whenever any Investor Certificates of any Series are so
surrendered for exchange, the Trustee shall execute and authenticate and (unless
the Transfer Agent and Registrar is different than the Trustee, in which case
the Transfer Agent and Registrar shall) deliver, the Investor Certificates of
such Series which the Certificateholder making the exchange is entitled to
receive. Every Investor Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
a form satisfactory to the Trustee and the Transfer Agent and Registrar duly
executed by the Certificateholder thereof or his attorney-in-fact duly
authorized in writing.
The preceding provisions of this Section 6.03
notwithstanding, the Trustee or the Transfer Agent and Registrar, as the case
may be, shall not be required
56
to register the transfer of or exchange any Investor Certificate of any Series
for a period of five Business Days preceding the due date for any payment with
respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no
service charge shall be made for any registration of transfer or exchange of
Certificates, but the Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons attached
to Bearer Certificates) surrendered for registration of transfer and exchange
shall be canceled by the Transfer Agent and Registrar and disposed of in a
manner satisfactory to the Trustee. The Trustee shall cancel and destroy the
Global Certificates upon its exchange in full for Definitive Certificates and
shall deliver a certificate of destruction to the Transferor. Such certificate
shall also state that a certificate or certificates of each Foreign Clearing
Agency to the effect referred to in Section 6.12 was received with respect to
each portion of the Global Certificate exchanged for Definitive Certificates.
The Transferor shall deliver to the Trustee or the Transfer
Agent and Registrar, as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 6.09 or 7.02 or in any
Supplement, in no event shall the Transferor Certificate or any interest therein
be transferred, sold or pledged hereunder, in whole or in part.
(c) Unless otherwise provided in the related Supplement,
registration of transfer of Registered Certificates containing a legend relating
to the restrictions on transfer of such Registered Certificates (which legend
shall be set forth in the Supplement relating to such Investor Certificates)
shall be effected only if the conditions set forth in such related Supplement
are satisfied.
Whenever a Registered Certificate containing the legend set
forth in the related Supplement is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar shall promptly
seek instructions from the Servicer regarding such transfer. The Transfer Agent
and Registrar and the Trustee shall be entitled to receive written instructions
signed by a Servicing Officer prior to registering any such transfer or
authenticating new Registered Certificates, as the case may be. The Servicer
hereby agrees to indemnify the Transfer Agent and Registrar and the Trustee and
to hold each of them harmless against any loss, liability or expense incurred
without negligence or bad faith on their part arising out of or in connection
57
with actions taken or omitted by them in reliance on any such written
instructions furnished pursuant to this subsection 6.03(c).
(d) The Transfer Agent and Registrar will maintain at its
expense in the Borough of Manhattan, the City of New York (and subject to this
Section 6.03, if specified in the related Supplement for any Series, any other
city designated in such Supplement) an office or offices or an agency or
agencies where Investor Certificates of such Series may be surrendered for
registration of transfer or exchange (except that Bearer Certificates may not be
surrendered for exchange at any such office or agency in the United States, but
may be surrendered for exchange at such office or agency outside the United
States as shall be specified in the related Supplement). For purposes of this
Section 6.03(d), "United States" includes Puerto Rico, the U.S. Virgin Islands,
the Northern Mariana Islands, Guam, Wake Island and American Samoa.
Section 6.04 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate (together, in the case of Bearer
Certificates, with all unmatured Coupons, if any, appertaining thereto) is
surrendered to the Transfer Agent and Registrar, or the Transfer Agent and
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Transfer Agent and
Registrar and the Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Trustee
shall execute and authenticate and (unless the Transfer Agent and Registrar is
different from the Trustee, in which case the Transfer Agent and Registrar
shall) deliver (in compliance with applicable law), in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like tenor and aggregate Undivided Interest. In connection with the issuance
of any new Certificate under this Section 6.04, the Trustee or the Transfer
Agent and Registrar may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee and the Transfer
Agent and Registrar) connected therewith. Any duplicate Certificate issued
pursuant to this Section 6.04 shall constitute complete and indefeasible
evidence of ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 6.05 Persons Deemed Owners. Prior to due presentation
of a Certificate for registration of transfer, the Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent of any of them may treat a
Certificateholder as the owner of the related Certificate for the purpose of
receiving distributions and for all other purposes whatsoever, and neither the
Trustee, the Paying Agent, the Transfer Agent and Registrar nor any agent of any
of them shall be affected by any notice to the contrary; provided, however, that
in determining whether the holders of Investor Certificates evidencing the
requisite Undivided Interests have given any request, demand, authorization,
direction, notice, consent or waiver hereunder (including under
58
any Supplement), Investor Certificates owned by either of the Original
Transferors, the Transferor, the Servicer or any Affiliate thereof shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Investor Certificates
which a Responsible Officer in the Corporate Trust Office of the Trustee knows
to be so owned shall be so disregarded.
In the case of a Bearer Certificate, the Trustee, the Paying
Agent, the Transfer Agent and Registrar and any agent of any of them may treat
the holder of a Bearer Certificate or Coupon as the owner of such Bearer
Certificate or Coupon for the purpose of receiving distributions and for all
other purposes whatsoever, and neither the Trustee, the Paying Agent, the
Transfer Agent and Registrar nor any agent of any of them shall be affected by
any notice to the contrary.
Section 6.06 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for the
benefit of Certificateholders as specified in this Agreement or the related
Supplement for any Series pursuant to Articles IV and V hereof. Any Paying Agent
shall have the revocable power to withdraw funds from such appropriate account
or accounts for the purpose of making distributions referred to above. The
Trustee (or the Servicer if the Trustee is the Paying Agent) may revoke such
power and remove the Paying Agent, if the Trustee (or the Servicer if the
Trustee is the Paying Agent) determines in its sole discretion that the Paying
Agent shall have failed to perform its obligations under this Agreement in any
material respect or for other good cause. The Trustee (or the Servicer if the
Trustee is the Paying Agent) shall notify Xxxxx'x and Standard & Poor's of the
removal of any Paying Agent. The Paying Agent, unless the Supplement with
respect to any Series states otherwise, shall initially be the Trustee's
Corporate Trust Office. The Trustee shall be permitted to resign as Paying Agent
upon 30 days' written notice to the Servicer. In the event that the Trustee
shall no longer be the Paying Agent, the Trustee shall appoint a successor to
act as Paying Agent (which shall be a bank or trust company).
If specified in the related Supplement for any Series, so
long as the Investor Certificates of such Series are outstanding, the Transferor
shall maintain a co-paying agent in New York City (for Registered Certificates
only) or any other city designated in such Supplement which, if and so long as
any Series of Investor Certificates is listed on the Luxembourg Stock Exchange
or other stock exchange and such exchange so requires, shall be in Luxembourg or
the location required by such other stock exchange. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise. For so long as any Bearer Certificates are
outstanding, the Transferor shall maintain a Paying Agent and a Transfer Agent
and Registrar outside the United States (as defined in Section 6.03(d)).
59
(b) The Trustee shall cause each Paying Agent (other than
itself) to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee that such Paying Agent will hold all sums, if
any, held by it for payment to the Certificateholders in trust for the benefit
of the Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and shall agree, and if the Trustee is the Paying Agent it
hereby agrees, that it shall comply with all requirements of the Internal
Revenue Code regarding the withholding of payments in respect of federal income
taxes due from Certificate Owners.
Section 6.07 Access to List of Certificateholders' Names and
Addresses. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer or the Paying Agent, within five Business
Days after receipt by the Trustee of a request there for from the Servicer or
the Paying Agent, respectively, in writing, a list in such form as the Servicer
or the Paying Agent may reasonably require of the names and addresses of the
Investor Certificateholders as of the most recent Record Date for payment of
distributions to Investor Certificateholders. Unless otherwise provided in the
related Supplement, if holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 20% of the Certificateholders Ownership
Interests of the Investor Certificates of any Series (the "Applicants") apply in
writing to the Trustee, and if such application states that the Applicants
desire to communicate with other Investor Certificateholders of any Series with
respect to their rights under this Agreement or under the Investor Certificates
and is accompanied by a copy of the communication which such Applicants propose
to transmit, then the Trustee, after having been adequately indemnified by such
Applicants for its costs and expenses, shall afford or shall cause the Transfer
Agent and Registrar to afford such Applicants access during normal business
hours to the most recent list of Certificateholders held by the Trustee and
shall give the Servicer notice that such request has been made within five
Business Days after the receipt of such application. Such list shall be as of a
date no more than 45 days prior to the date of receipt of such Applicants'
request. Every Certificateholder, by receiving and holding a Certificate, agrees
with the Trustee that neither the Trustee, the Transfer Agent and Registrar, nor
any of their respective agents shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was obtained.
Section 6.08 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents
with respect to the Certificates which shall be authorized to act on behalf of
the Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and a certificate of authentication
60
executed on behalf of the Trustee by an authenticating agent. Each
authenticating agent must be acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Transferor. The Trustee
may at any time terminate the agency of an authenticating agent by giving notice
of termination to such authenticating agent and to the Transferor. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time an authenticating agent shall cease to be acceptable to the Trustee or
the Transferor, the Trustee promptly may appoint a successor authenticating
agent. Any successor authenticating agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
authenticating agent. No successor authenticating agent shall be appointed
unless acceptable to the Trustee and the Transferor.
(d) The Trustee agrees to pay each authenticating agent from
time to time reasonable compensation for its services under this Section 6.08,
and the Trustee shall be entitled to be reimbursed and the Servicer shall
reimburse the Trustee for such reasonable payments actually made, subject to the
provisions of Section 11.05.
(e) Pursuant to an appointment made under this Section 6.08,
the Certificates may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in substantially
the following form:
This is one of the certificates described in the Pooling and
Servicing Agreement.
-----------------------------------
as Authenticating Agent
for the Trustee,
By:
--------------------------------
Authorized Officer
61
Section 6.09 Transfer of Transferor Certificate; New Series
Issuances.
(a) The Transferor Certificate shall be transferred by the
Original Transferors to the Transferor concurrently with the execution of this
Agreement. Upon any New Series Issuance, the Trustee shall issue to the Holder
of the Transferor Certificate under Section 6.01, for redelivery to the Trustee
for execution and authentication under Section 6.02, one or more new Series of
Investor Certificates. Any such Series of Investor Certificates shall be
substantially in the form specified in the related Supplement and shall bear,
upon its face, the designation for such Series to which it belongs, as selected
by the Transferor. Except as specified in any Supplement for a related Series,
all Investor Certificates of any Series shall rank pari passu and be equally and
ratably entitled as provided herein to the benefits hereof (except that the
Credit Enhancement provided for any Series shall not be available for any other
Series) without preference, priority or distinction on account of the actual
time or times of authentication and delivery, all in accordance with the terms
and provisions of this Agreement and the related Supplement.
(b) 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 or, in connection with a Companion Series,
interests in such Series (a "Transferor Ownership Interest Reduction"). In
addition, to the extent permitted for any Series of Investor Certificates as
specified in the related Supplement, the Investor Certificateholders of such
Series may tender their Investor Certificates and the Holder of the Transferor
Certificate may reduce the Transferor Ownership Interest pursuant to the terms
and conditions set forth in such Supplement to effectuate the issuance of one or
more new Series of Investor Certificates (an "Investor Exchange"). Each of a
Transferor Ownership Interest Reduction and an Investor Exchange is sometimes
referred to herein as a "New Series Issuance." The Holder of the Transferor
Certificate may effect a New Series Issuance by notifying the Trustee in writing
at least three days in advance (a "New Series Issuance Notice") of the date upon
which the New Series Issuance is to occur (a "New Series Issuance Date"). Any
New Series Issuance Notice shall state the designation of any Series (and Class
thereof, if applicable) to be issued on the New Series Issuance Date and, with
respect to each such Series: (a) its Initial Certificateholders Ownership
Interests (or the method for calculating such Initial Certificateholders
Ownership Interests), which, at any time, may not be greater than the current
aggregate principal amount of the Transferor Certificate at such time (or in the
case of an Investor Exchange, the sum of the Certificateholders Ownership
Interests of the Series of Investor Certificates to be exchanged plus the
current aggregate principal amount of the Transferor Certificate), (b) its
Certificate Rate (or the method for calculating such rate) and the method for
allocating interest payments or other cash flows to such Series, if any, and (c)
the Credit Enhancement Provider, if any, with respect to such Series. On the New
Series Issuance Date, the Trustee shall execute, authenticate and deliver any
such Series of Investor Certificates only upon delivery to it of the following:
(a) a fully executed Supplement in form satisfactory to the Trustee
62
specifying the Principal Terms of such Series, (b) the applicable Credit
Enhancement, if any, (c) the agreement, if any, executed by the Transferor and
the Credit Enhancement Provider pursuant to which the Credit Enhancement
Provider agrees to provide the Credit Enhancement, if any, (d) a Tax Opinion
with respect to the issuance of such Series, (e) written confirmation from each
Rating Agency that the New Series Issuance will not result in such Rating
Agency's reducing or withdrawing its rating on any then outstanding Series as to
which it is a Rating Agency, (f) an Officer's Certificate of the Transferor that
on the New Series Issuance Date (A) the Transferor, after giving effect to the
New Series Issuance, would not be required to add Additional Receivables
pursuant to subsection 2.06(a) and (B) after giving effect to such New Series
Issuance, the Transferor Ownership Interest would be at least equal to the
Minimum Transferor Ownership Interest, and (g) in the case of an Investor
Exchange, the applicable Investor Certificates. Upon satisfaction of such
conditions, the Trustee shall issue, as provided above, such Series of Investor
Certificates, dated the New Series Issuance Date, and, in the case of an
Investor Exchange, cancel the applicable Investor Certificates, and a
corresponding reduction in the Transfer Ownership Interest will result. There is
no limit to the number of New Series Issuances that may be performed under the
Agreement.
(c) In conjunction with a New Series Issuance, the parties
hereto shall execute a Supplement, which shall specify the relevant terms with
respect to any newly issued Series of Investor Certificates, which may include
without limitation: (i) its name or designation, (ii) the Initial
Certificateholders Ownership Interests or a method for calculating the Initial
Certificateholders Ownership Interests and a method for determining any adjusted
Certificateholders Ownership Interests, if applicable, (iii) the Receivables to
be allocated with respect to such Series and the provisions governing the
allocations of any such Receivables, (iv) the Certificate Rate (or formula for
the determination thereof), (v) the Closing Date, (vi) each rating agency, if
any, rating such Series, (vii) the name of the Clearing Agency, if any, (viii)
the rights of the Holder of the Transferor Certificate that have been
transferred to the Holders of such Series pursuant to such New Series Issuance
(including any rights to allocations of Collections of Finance Charge
Receivables, Principal Receivables and Recoveries), (ix) the Interest Periods,
the interest payment date or dates, and the date or dates from which interest
shall accrue including the interest accrual period, (x) the periods during which
or dates on which principal will be paid or accrued, (xi) the method of
allocating Collections with respect to Principal Receivables for such Series
and, if applicable, with respect to other Series and the method by which the
principal amount of Investor Certificates of such Series shall amortize or
accrete and the method for allocating Collections with respect to Finance Charge
Receivables and Recoveries, (xii) any other Collections with respect to
Receivables or other amounts available to be paid with respect to such Series,
(xiii) the names of any accounts to be used by such Series and the terms
governing the operation of any such account and use of moneys therein, (xiv) the
Series Servicing Fee and the Series Servicing Fee Percentage, (xv) the Minimum
Transferor Ownership Interest and the Series Termination Date, (xvi) the terms
of any Credit Enhancement
63
with respect to such Series and the Credit Enhancement Provider, if applicable,
(xvii) the base rate, if any, applicable to such Series, (xviii) the terms on
which the Certificates of such Series may be repurchased by the Transferor or
remarketed to other investors, (xix) any deposit into any account provided for
such Series, (xx) the number of Classes of such Series, and if more than one
Class, the rights and priorities of each such Class, (xxi) the extent to which
the Investor Certificates will be issuable in temporary or permanent global
form, and in such case, the depositary for such global certificate or
certificates, the terms and conditions, if any upon which such global
certificate may be exchanged in whole or in part for Definitive Certificates,
and the manner in which any interest or principal payable on a temporary or
global certificate will be paid, (xxii) whether the Certificates may be issued
in bearer form and any limitations imposed thereon, (xxiii) the priority of any
Series with respect to any other Series, (xxiv) whether such Series will or may
be a Companion Series and the Series with which it will be paired, if
applicable, and (xxv) any other relevant terms of such Series (all such terms,
the "Principal Terms" of such Series). The terms of such Supplement may modify
or amend the terms of this Agreement solely as applied to such new Series. If on
the date of the issuance of such Series there is issued and outstanding one or
more Series of Investor Certificates and no Series of Investor Certificates is
currently rated by a Rating Agency, then as a condition to such New Series
Issuance a nationally recognized investment banking firm or commercial bank
shall also deliver to the Trustee an officer's certificate stating, in
substance, that the New Series Issuance will not have an adverse effect on the
timing or distribution of payments to such other Series of Investor Certificates
then issued and outstanding.
Section 6.10 Book-Entry Certificates. Unless otherwise
provided in any related Supplement, the Investor Certificates, upon original
issuance, shall be issued in the form of typewritten Certificates representing
the Book-Entry Certificates, to be delivered to the depository specified in such
Supplement (the "Depository") which shall be the Clearing Agency or Foreign
Clearing Agency, by or on behalf of such Series. The Investor Certificates of
each Series shall, unless otherwise provided in the related Supplement,
initially be registered on the Certificate Register in the name of the nominee
of the Clearing Agency or Foreign Clearing Agency. Unless otherwise provided in
a related Supplement, no Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the related Series of Investor
Certificates, except as provided in Section 6.12. Unless and until definitive,
fully registered Investor Certificates of any Series or any Class thereof
("Definitive Certificates") have been issued to Certificate Owners pursuant to
Section 6.12 or as provided in the applicable Supplement:
(i) the provisions of this Section 6.10 shall be in
full force and effect with respect to each such Series;
(ii) the Transferor, the Servicer, the Paying Agent, the
Transfer Agent and Registrar and the Trustee may deal with the Clearing
Agency and the
64
Clearing Agency Participants for all purposes (including the making of
distributions on the Investor Certificates of each such Series) as the
authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section
6.10 conflict with any other provisions of this Agreement, the
provisions of this Section 6.10 shall control with respect to each such
Series; and
(iv) the rights of Certificate Owners of each such
Series shall be exercised only through the Clearing Agency or Foreign
Clearing Agency and the applicable Clearing Agency Participants and
shall be limited to those established by law and agreements between
such Certificate Owners and the Clearing Agency or Foreign Clearing
Agency and/or the Clearing Agency Participants. Pursuant to the
Depository Agreement applicable to a Series, unless and until
Definitive Certificates of such Series are issued pursuant to Section
6.12, the initial Clearing Agency will make book-entry transfers among
the Clearing Agency Participants and receive and transmit distributions
of principal and interest on the Investor Certificates to such Clearing
Agency Participants.
Section 6.11 Notices to Clearing Agency. Whenever notice or
other communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 6.12, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency or Foreign Clearing Agency for distribution
to Holders of Investor Certificates.
Section 6.12 Definitive Certificates. If (i) (A) the
Transferor advises the Trustee in writing that the Clearing Agency or Foreign
Clearing Agency is no longer willing or able to discharge properly its
responsibilities under the applicable Depository Agreement, and (B) neither the
Trustee nor the Transferor is able to locate a qualified successor, (ii) the
Transferor, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or Foreign Clearing
Agency with respect to any Series of Certificates or (iii) after the occurrence
of a Servicer Default, Certificate Owners of a Class representing beneficial
interests aggregating not less than 50% of the portion of the Certificateholders
Ownership Interests represented by such Class advise the Trustee and the
applicable Clearing Agency or Foreign Clearing Agency through the applicable
Clearing Agency Participants in writing that the continuation of a book-entry
system through the applicable Clearing Agency or Foreign Clearing Agency is no
longer in the best interests of the Certificate Owners, the Trustee shall notify
all Certificate Owners of such Series, through the applicable Clearing Agency
Participants, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Series requesting the
same. Upon surrender to the Trustee of the Investor
65
Certificates of such Series by the applicable Clearing Agency or Foreign
Clearing Agency, accompanied by registration instructions from the applicable
Clearing Agency or Foreign Clearing Agency for registration, the Trustee shall
issue the Definitive Certificates of such Series. Neither the Transferor nor the
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates of such Series and upon the
issuance of any Series of Investor Certificates or any Class thereof in
definitive form in accordance with the related Supplement, all references herein
to obligations imposed upon or to be performed by the applicable Clearing Agency
or Foreign Clearing Agency shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates, and the Trustee shall recognize the Holders of the Definitive
Certificates of such Series or Classes as Certificateholders of such Series or
Classes hereunder. Notwithstanding anything in this Agreement to the contrary,
Definitive Certificates shall not be issued in respect of any Series Temporary
Regulation S Global Certificate unless the applicable Restricted Period has
expired and then only upon receipt by the Trustee from the Holder thereof of any
certifications required by the relevant Supplement.
Section 6.13 Global Certificate; Euro-Certificate Exchange
Date. If specified in the related Supplement for any Series, (i) the Investor
Certificates may be initially issued in the form of a single temporary global
certificate (the "Global Certificate") in registered or bearer form, without
interest coupons, in the denomination of the Initial Certificateholders
Ownership Interests and (ii) a Class of Investor Certificates may be issued in
the form of a single temporary global certificate in registered or bearer form,
in the denomination of the portion of the Certificateholders Ownership Interests
represented by such Class, each substantially in the form attached to the
related Supplement. Unless otherwise specified in the related Supplement, the
provisions of this Section 6.13 shall apply to such Global Certificate. The
Global Certificate will be authenticated by the Trustee upon the same
conditions, in substantially the same manner and with the same effect as the
Definitive Certificates. The Global Certificate may be exchanged in the manner
described in the related Supplement for Registered or Bearer Certificates in
definitive form.
Section 6.14 Meetings of Certificateholders.
To the extent provided by the Supplement for any Series
issued in whole or in part in Bearer Certificates, the Servicer or the Trustee
may at any time call a meeting of the Certificateholders of such Series, to be
held at such time and at such place as the Servicer or the Trustee, as the case
may be, shall determine, for the purpose of approving a modification of or
amendment to, or obtaining a waiver of, any covenant or condition set forth in
this Agreement with respect to such Series or in the Certificates of such
Series, subject to Section 13.01 of this Agreement.
66
[End of Article VI]
67
ARTICLE VII
OTHER MATTERS RELATING TO THE ORIGINAL
TRANSFERORS AND THE TRANSFEROR
Section 7.01 Liability of the Original Transferors and the
Transferor. Each of the Original Transferors and the Transferor shall be liable
in accordance herewith to the extent of the obligations specifically undertaken
by it.
Section 7.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Original Transferors or the Transferor.
(a) Neither any Original Transferor nor the Transferor shall
consolidate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any Person, unless:
(i) if such Original Transferor or the Transferor, as
the case may be, is not the surviving entity, the corporation formed by
such consolidation or into which such Original Transferor or the
Transferor, as the case may be, is merged or the Person which acquires
by conveyance or transfer the properties and assets of such Original
Transferor or the Transferor, as the case may be, substantially as an
entirety shall be organized and existing under the laws of the United
States of America or any State or the District of Columbia, and shall
expressly assume, by an agreement supplemental hereto, executed and
delivered to the Trustee, in form and substance satisfactory to the
Trustee, the performance of every covenant and obligation of such
Original Transferor or the Transferor, as the case may be, as
applicable hereunder and shall benefit from all the rights granted to
such Original Transferor or the Transferor, as the case may be, as
applicable hereunder;
(ii) if such Original Transferor or the Transferor, as
the case may be, is not the surviving entity, such Person certifies in
writing to the Trustee that all of the representations and warranties
set forth in Section 2.03 (other than subsections 2.03(g) and (j)) are
true and correct in all respects with respect to such Person as of the
date of consolidation, merger or transfer, as the case may be;
(iii) such Original Transferor or the Transferor, as the
case may be, has delivered to the Trustee an Officer's Certificate
stating that such consolidation, merger, conveyance or transfer and
such supplemental agreement, if any, comply with this Section 7.02 and
that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel, in form
and substance satisfactory to the
68
Trustee, that such supplemental agreement, if any, is the legal, valid,
binding and enforceable obligation of the parties thereto;
(iv) the Trustee shall have been advised in writing by
each Rating Agency for each outstanding Series of Certificates that the
rating of the related Class(es) of Investor Certificates will not be
lowered or withdrawn as a result of such transaction;
(v) if such Original Transferor or the Transferor, as
the case may be, is not the surviving entity, the related Support
Agreement remains in effect with respect to the successor entity; and
(vi) such Original Transferor or the Transferor, as the case
may be, shall have delivered to the Trustee a Tax Opinion, dated the
date of such merger, conveyance or transfer, with respect thereto.
(b) The respective obligations of the Original Transferors
and the Transferor hereunder shall not be assignable nor shall any Person
succeed to the respective obligations of the Original Transferors and the
Transferor hereunder except for mergers, consolidations, assumptions or
transfers in accordance with the provisions of the foregoing paragraph.
Section 7.03 Limitation on Liability. The respective
directors, officers, employees or agents of each Original Transferor and the
Transferor shall not be under any liability to the Trust, the Trustee, the
Certificateholders, any Credit Enhancement Provider or any other Person
hereunder or pursuant to any document delivered hereunder for any action taken
or for refraining from the taking of any action, it being expressly understood
that all such liability is expressly waived and released as a condition of, and
as consideration for, the execution of this Agreement and any Supplement and the
issuance of the Certificates; provided, however, that this provision shall not
protect the officers, directors, employees, or agents of the Original
Transferors or the Transferor against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. Except as provided in Section 7.04, the Original Transferors
and the Transferor shall not be under any liability to the Trust, the Trustee,
the Certificateholders, any Credit Enhancement Provider or any other Person for
any action taken or for refraining from the taking of any action in its capacity
as an Original Transferor or the Transferor pursuant to this Agreement or any
Supplement whether arising from express or implied duties under this Agreement
or any Supplement; provided, however, that this provision shall not protect the
Original Transferors or the Transferor against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Original Transferors and the Transferor
and any of their respective
69
directors, officers, employees or agents may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder.
Section 7.04 Liabilities. Notwithstanding Section 7.03 or any
other provision of this Agreement, the Transferor agrees to be liable directly
to the injured party, for the entire amount of any losses, claims, damages or
liabilities (other than those incurred by an Investor Certificateholder in the
capacity of an investor in the Investor Certificates) arising out of or based on
the arrangement created by this Agreement (to the extent any property of the
Trust that is remaining after the Investor Certificateholders have been paid in
full is insufficient to pay such losses, claims, damages or liabilities) and the
actions of the Servicer taken pursuant hereto as though this Agreement created a
partnership under the New York Uniform Partnership Law in which the Transferor
was a general partner. The Transferor shall pay, indemnify and hold harmless
each Certificateholder against and from such losses, claims or liabilities
except to the extent that they arise from any action by such Certificateholder.
The rights of the injured party provided by this Section 7.04 shall run directly
to and be enforceable by such party subject to the limitations hereof. In the
event of the appointment of a Successor Servicer (other than the Trustee), the
Successor Servicer will (from its own assets and not from the assets of the
Trust) indemnify and hold harmless the Transferor from and against any losses,
claims, damages and liabilities of the Transferor as described in this Section
arising from the actions or omissions of such Successor Servicer.
Section 7.05 Indemnification of the Trust and the Trustee by
the Original Transferors and the Transferor. The Original Transferors with
respect to Existing Receivables and the Transferor with respect to Future
Receivables shall indemnify and hold harmless the Trust and the Trustee, its
officers, directors, employees and agents, from and against any loss, liability,
damage or injury suffered or sustained by reason of any violation by the Trust,
Trustee or Servicer of any state premium finance licensing laws with respect to
any Receivable, including, but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other reasonable costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; provided, however, that the Original Transferors and the Transferor shall
not indemnify the Trustee if such loss, liability, expense, damage or injury is
imposed by or results from fraud, negligence or willful misconduct by the
Trustee in the performance of its duties under this Agreement; provided,
further, that the Original Transferors and the Transferor shall not indemnify
the Trust, the Investor Certificateholders or the Certificate Owners for any
liabilities, costs or expenses of the Trust with respect to any action taken by
the Trustee at the request of the Investor Certificateholders. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall survive the termination of this Agreement and
the Trust or the resignation or removal of the
70
Trustee and shall run directly to and be enforceable by an injured party subject
to the limitations of this Section 7.05.
Section 7.06 Support Agreements.
(a) AIC shall not terminate the AIC Support Agreement or
amend or modify it other than in accordance with its terms.
(b) AIC shall (i) at all times be the ultimate beneficial
owner of 100% of the voting capital stock of AICCO now or hereafter issued and
outstanding that is not beneficially owned by AIG, (ii) at all times cause AICCO
to maintain a net worth of at least U.S. $1 as determined in accordance with
generally accepted accounting principles and (iii) provide funds to AICCO either
as equity or as a loan in a manner sufficiently timely for AICCO to (A) pay its
obligations when due (except for any such obligations which are the subject of a
bona fide dispute) the nonpayment of which could constitute a basis for the
filing of an involuntary case against AICCO under the United States Bankruptcy
Code, as now or hereafter in effect or (B) meet any of AICCO's obligations as
Original Transferor or Servicer hereunder; provided, however, any such loan
shall be subordinated in all respects to any and all debt of AICCO whether or
not such debt is outstanding at the time of such loan and to all financial
obligations of AICCO hereunder, whether or not such loan has such express
subordination provisions therein and notwithstanding anything to the contrary in
such loan or herein. Notwithstanding the foregoing, the provisions of this
subsection 7.06(b) shall no longer apply in the event AICCO shall at any time
merge or otherwise be liquidated into AIC.
(c) AIR shall not terminate the AIR Support Agreement or
amend or modify it other than in accordance with its terms.
[End Of Article VII]
71
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.01 Liability of the Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. (a) The Servicer shall not consolidate with or
merge into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) if the Servicer is not the surviving entity, the
corporation formed by such consolidation or into which the Servicer is
merged or the Person which acquires by conveyance or transfer the
properties and assets of the Servicer substantially as an entirety
shall be a corporation organized and existing under the laws of the
United States of America or any State or the District of Columbia, and
shall expressly assume, by an agreement supplemental hereto, executed
and delivered to the Trustee in form and substance satisfactory to the
Trustee, the performance of every covenant and obligation of the
Servicer hereunder;
(ii) if the Servicer is not the surviving entity, such
Person certifies in writing to the Trustee it is an Eligible Servicer
and that all of the representations and warranties set forth in Section
3.03 are true and correct in all respects with respect to such Person,
in each case as of the date of consolidation, merger or transfer, as
the case may be;
(iii) the Servicer has delivered to the Trustee an
Officer's Certificate stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement, if any, comply
with this Section 8.02 and that all conditions precedent herein
provided for relating to such transaction have been complied with and
an Opinion of Counsel, in form and substance satisfactory to the
Trustee, that such supplemental agreement, if any, is the legal, valid,
binding and enforceable obligation of the parties thereto; and
(iv) the Trustee shall have been advised in writing by
the Rating Agency for each outstanding Series of Certificates that the
rating of the related Class(es) of Investor Certificates will not be
lowered or withdrawn as a result of such transaction.
72
(b) The obligations and duties of the Servicer hereunder
shall not be assignable nor shall any Person succeed to the obligations of the
Servicer hereunder except in accordance with the provisions of subsection
8.02(a), Section 8.07 or as a result of the appointment of a Successor Servicer
pursuant to Section 10.02.
Section 8.03 Limitation on Liability of the Servicer and
Others. The directors, officers, employees or agents of the Servicer shall not
be under any liability to the Trust, the Trustee, the Certificateholders, any
Credit Enhancement Provider or any other Person hereunder or pursuant to any
document delivered hereunder for any action taken or for refraining from the
taking of any action, it being expressly understood that all such liability is
expressly waived and released as a condition of, and as consideration for, the
execution of this Agreement and any Supplement and the issuance of the
Certificates; provided, however, that this provision shall not protect the
directors, officers, employees and agents of the Servicer against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. Except as provided in Section 8.04 with
respect to the Trust and the Trustee, its officers, directors, employees and
agents, the Servicer shall not be under any liability to the Trust, the Trustee,
its officers, directors, employees and agents, the Certificateholders or any
other Person for any action taken or for refraining from the taking of any
action in its capacity as Servicer pursuant to this Agreement or any Supplement;
provided, however, that this provision shall not protect the Servicer against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of its
reckless disregard of its obligations and duties hereunder or under any
Supplement. The Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Trust Assets in accordance with this Agreement which in its
reasonable opinion may involve it in any expense or liability.
Section 8.04 Servicer Indemnification of the Trust and the
Trustee. The Servicer shall (jointly and severally if more than one Person is
acting as Servicer) indemnify and hold harmless the Trust and the Trustee, its
officers, directors, employees and agents, from and against any loss, liability,
expense, damage or injury suffered or sustained by reason of any acts or
omissions or alleged acts or omissions of the Servicer with respect to
activities of the Trust or the Trustee pursuant to this Agreement or any
Supplement, including, but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other reasonable costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; provided, however, that the Servicer shall not indemnify the Trustee if
such acts, omissions or alleged acts or omissions constitute or are caused by
fraud, negligence, breach of fiduciary duty or willful misconduct by the Trustee
in the performance of its
73
duties under this Agreement; provided further, that the Servicer shall not
indemnify the Trust, the Investor Certificateholders or the Certificate Owners
for any liabilities, costs or expenses of the Trust with respect to any action
taken by the Trustee at the request of the Investor Certificateholders; provided
further, that the Servicer shall not indemnify the Trust, the Investor
Certificateholders or the Certificate Owners as to any losses, claims, damages
or liabilities incurred by any of them in their capacities as investors as a
result of Defaulted Loans; and provided further, that the Servicer shall not
indemnify the Trust, the Investor Certificateholders or the Certificate Owners
for any liabilities, costs or expenses of the Trust, the Investor
Certificateholders or the Certificate Owners arising under any tax law,
including without limitation, any federal, state, local or foreign income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Trust, the Investor Certificateholders or
the Certificate Owners in connection herewith to any taxing authority (except to
the extent that such liabilities, taxes or expenses arose as a result of the
breach by the Servicer of its obligations under Section 11.11). Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall survive the termination of this Agreement and
the Trust or the resignation or removal of the Trustee and shall run directly to
and be enforceable by an injured party subject to the limitations of this
Section 8.04.
Section 8.05 The Servicer Not to Resign. The Servicer shall
not resign from the obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel and as to clause (ii) by an Officer's Certificate, each to
such effect delivered, and satisfactory in form and substance, to the Trustee.
No such resignation shall become effective until the Trustee or a Successor
Servicer shall have assumed the responsibilities and obligations of the Servicer
in accordance with Section 10.02 hereof. If the Trustee is unable within 120
days of the date of such determination to appoint a Successor Servicer, the
Trustee shall serve as Successor Servicer hereunder.
Section 8.06 Access to Certain Documentation and Information
Regarding the Trust Assets. The Servicer shall provide to the Trustee access to
the documentation regarding the Trust Assets in such cases where the Trustee is
required, in connection with the enforcement of the rights of the Investor
Certificateholders or by applicable statutes or regulations, to review such
documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to the
Servicer's normal security and confidentiality procedures and (iv) at offices
designated by the Servicer. Nothing in this Section 8.06 shall derogate from the
obligation of the Transferor, the Trustee or the Servicer to
74
observe any applicable law prohibiting disclosure of information regarding the
Obligors and the failure of the Servicer to provide access as provided in this
Section 8.06 as a result of such obligations shall not constitute a breach of
this Section 8.06.
Section 8.07 Transfer of Duties. It is understood and agreed
by the parties hereto that the Servicer may transfer its servicing duties
hereunder to (i) any of its Affiliates which is an Eligible Servicer or (ii) to
any other Person which is an Eligible Servicer if, in either case, each Rating
Agency for each outstanding Series of Certificates has advised the Trustee in
writing that the rating of the related Class(es) of Investor Certificates will
not be lowered or withdrawn as a result of such transfer; provided that, in
either case, the AIC Support Agreement shall remain in effect with respect to
such Affiliate or Person. No such transfer shall become effective until such
Affiliate or Person shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 10.02 hereof.
Section 8.08 The Servicer to Pay Rating Agency Fees. The
Servicer covenants and agrees to pay to each Rating Agency from time to time the
fees of such Rating Agency for all services rendered by it in connection with
the Trust or any Series or any Class within a Series.
[End of Article VIII]
75
ARTICLE IX
PAY OUT EVENTS
Section 9.01 Pay Out Events. If any one of the following
events (each, a "Trust Pay Out Event") shall occur:
(a) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or other similar law
for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against either of the Original Transferors or the Transferor
and such decree or order shall have remained in force undischarged or unstayed
for a period of 60 days; or either of the Original Transferors or the Transferor
shall consent to the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities,
voluntary liquidation or similar proceedings of or relating to such entity or of
or relating to all or substantially all of such entity's property; or either of
the Original Transferors or the Transferor shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its obligations
or take any corporate action in furtherance of any of the foregoing (any such
event, an "Insolvency Event");
(b) the Transferor shall become unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement; or
(c) AIG shall fail to meet its obligations under either of
the Support Agreements in any respect or AIC shall fail to meet its obligations
under subsection 7.06(b) in any respect, or the provisions of subsection 7.06
shall have been modified, amended or terminated except as otherwise expressly
permitted by the terms of this Agreement or any Supplement, or either of the
Support Agreements shall have been modified, amended or terminated except as
otherwise expressly permitted by the terms thereof; then a Pay Out Event with
respect to all Series of Certificates shall occur without any notice or other
action on the part of the Trustee or the Investor Certificateholders immediately
upon the occurrence of such event.
Section 9.02 Additional Rights Upon the Occurrence of
Certain Events.
(a) If an Insolvency Event occurs with respect to the
Transferor violates Section 6.03(b) for any reason, the Transferor shall on the
day of such Insolvency Event or violation (the "Appointment Day") immediately
cease to transfer
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Principal Receivables to the Trust and shall promptly give notice to the Trustee
thereof. Notwithstanding any cessation of the transfer to the Trust of
additional Principal Receivables, Principal Receivables transferred to the Trust
prior to the occurrence of such Insolvency Event or violation and Collections in
respect of such Principal Receivables, Finance Charge Receivables, whenever
created, accrued in respect of such Principal Receivables, and Recoveries with
respect to such Principal Receivables and Finance Charge Receivables shall
continue to be a part of the Trust, and shall continue to be allocated and paid
in accordance with Article IV. Within 15 days of the Appointment Day, the
Trustee shall (i) publish a notice in an Authorized Newspaper that an Insolvency
Event or violation has occurred and that the Trustee intends to sell, dispose of
or otherwise liquidate the Trust Assets on commercially reasonable terms and in
a commercially reasonable manner and (ii) send written notice to the Investor
Certificateholders describing the provisions of this Section 9.02 and requesting
instructions from such Holders. Unless within 90 days from the day notice
pursuant to clause (i) above is first published the Trustee shall have received
written instructions from Holders of Investor Certificates (including for
purposes of this Section 9.02 any Investor Certificates owned by either of the
Original Transferors or the Transferor as to which no Insolvency Event has
occurred) evidencing more than 50% of the Certificateholders Ownership Interests
of each Series issued and outstanding (or, if any such Series has two or more
Classes of Investor Certificates, each such Class) and written instructions from
the Holder of the Transferor Certificate (if no Insolvency Event has occurred as
to it) to the effect that such Holders disapprove of the liquidation of the
Trust Assets and wish to continue having Principal Receivables transferred to
the Trust as before such Insolvency Event or violation, the Trustee shall sell,
dispose of or otherwise liquidate the Trust Assets in a commercially reasonable
manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids. The Trustee may obtain a prior determination
from any such conservator, receiver or liquidator that the terms and manner of
any proposed sale, disposition or liquidation are commercially reasonable. The
provisions of Sections 9.01 and 9.02 shall not be deemed to be mutually
exclusive.
(b) The proceeds from the sale, disposition or liquidation of
the Trust Assets pursuant to subsection (a) above shall be treated as
Collections on the Receivables and shall be allocated and deposited in
accordance with the provisions of Article IV; provided, that the Trustee shall
determine conclusively in its sole discretion the amount of such proceeds which
are allocable to Finance Charge Receivables, the amount of such proceeds
allocable to Recoveries and the amount of such proceeds which are allocable to
Principal Receivables. Unless the Trustee receives written instructions from
Investor Certificateholders as provided in subsection 9.02(a) above, on the day
following the last Distribution Date in the Monthly Period during which such
proceeds are distributed to the Investor Certificateholders of each Series, the
Trust shall terminate.
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(c) The Trustee may appoint an agent or agents to assist with
its responsibilities pursuant to this Article IX with respect to competitive
bids.
[End of Article IX]
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ARTICLE X
SERVICER DEFAULTS
Section 10.01 Servicer Defaults. If any one of the
following events (a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer
or deposit (other than with respect to any Credit Balances) or to give
instructions or notice to the Trustee pursuant to Article IV or to instruct the
Trustee to make any required drawing, withdrawal, or payment under any Credit
Enhancement on or before the date occurring five Business Days after the date
such payment, transfer, deposit, withdrawal or drawing or such instruction or
notice is required to be made or given, as the case may be, under the terms of
this Agreement;
(b) failure on the part of the Servicer duly to observe or
perform in any respect any other covenants or agreements of the Servicer set
forth in this Agreement (other than those set forth in subsections 3.03(g), (i)
and (j)), which has a material adverse effect on the Investor Certificateholders
of any Series (which determination shall be made without regard to the
availability of any Credit Enhancement or similar credit support device) and
which continues unremedied for a period of 60 days after the date on which
written notice of such failure, stating that such notice is a "Notice of
Servicer Default" hereunder and requiring the same to be remedied, shall have
been given to the Servicer by the Trustee, or to the Servicer and the Trustee by
the Holders of Investor Certificates evidencing Undivided Interests aggregating
not less than 50% of the Certificateholders Ownership Interests of any Series
adversely affected thereby and continues to materially adversely affect such
Investor Certificateholders for such period; or the Servicer shall delegate or
assign its duties under this Agreement, except as permitted by Section 8.02 or
8.07; provided, however, that failure on the part of the Servicer duly to
observe or perform in any respect any covenants or agreements of the Servicer
set forth in subsections 3.03(g), (i) or (j) of this Agreement, which has a
material adverse effect on the Investor Certificateholders of any Series (which
determination shall be made without regard to the availability of any Credit
Enhancement or similar credit support device) and which continues after, and
notwithstanding, the removal by the Servicer of the related Receivable in
accordance with the last paragraph of Section 3.03, shall be a Servicer Default
unless the Servicer shall have, within 60 days after the date (following such
removal) on which written notice of such continuing material adverse effect
shall have been given to the Servicer by the Trustee or to the Servicer and the
Trustee by the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 50% of the Certificateholders Ownership Interests of
any Series adversely affected thereby, remedied such failure;
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(c) any representation, warranty or certification made by the
Servicer in this Agreement or any Supplement or in any certificate (including
without limitation any Monthly Servicer Report) delivered pursuant to this
Agreement or any Supplement shall prove to have been incorrect when made, which
has a material adverse effect on the Investor Certificateholders of any Series
(which determination shall be made without regard to the availability of any
Credit Enhancement or similar credit support device) and 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 the Servicer by the Trustee, or to the Servicer and the
Trustee by the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 50% of the Certificateholders Ownership Interests of
any Series adversely affected thereby; or
(d) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or other similar law
for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or the
Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities, voluntary liquidation or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of its property; or the
Servicer shall admit in writing its inability to pay its debts as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations or take any corporate action in
furtherance of any of the foregoing;
then, so long as such Servicer Default shall not have been remedied, either the
Trustee, or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Certificateholders Ownership
Interests, by notice then given in writing to the Servicer (and to the Trustee
if given by the Investor Certificateholders) (a "Termination Notice"), may
terminate all of the rights and obligations of the Servicer as Servicer (and
which termination shall apply to each person acting as Servicer if more than one
Person is acting as Servicer) under this Agreement and in and to the
Receivables. Any determination that an inaccuracy or other event, which with
notice and/or the passage of time would constitute a Servicer Default, would
have a material adverse effect on Holders of one or more Series of Certificates
shall be made without regard to the availability of any Credit Enhancement or
similar credit support device with respect to such Series. After receipt by the
Servicer of such Termination Notice, and on the date that a Successor Servicer
shall have been appointed by the Trustee pursuant to Section 10.02, all
authority and power of the Servicer under this Agreement shall pass to and be
vested in the Successor Servicer; and, without limitation, the
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Trustee is hereby authorized and empowered (upon the failure of the Servicer to
cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such transfer of servicing rights and obligations. The Servicer
agrees to cooperate with the Trustee and such Successor Servicer in effecting
the termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to service the Trust Assets
provided for under this Agreement, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by the Servicer, in the Collection
Account, the Finance Charge Account, the Principal Account, and any Series
Account, or which shall thereafter be received with respect to the Trust Assets,
and in assisting the Successor Servicer and in enforcing all rights to
Recoveries allocable to the Trust. The Servicer shall promptly transfer its
electronic records or electronic copies thereof relating to the Trust Assets to
the Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Trust Assets in the manner and at such times as the Successor
Servicer shall reasonably request. To the extent that compliance with this
Section 10.01 shall require the Servicer to disclose to the Successor Servicer
information of any kind which the Servicer reasonably deems to be confidential,
the Successor Servicer shall be required to enter into such customary licensing
and confidentiality agreements as the Servicer shall deem reasonably necessary
to protect its interests. Subject to the immediately preceding sentence, the
Servicer agrees to grant to the Successor Servicer an exclusive,
non-transferable, non-assignable license to utilize the software which is owned
by the Servicer and which is used by the Servicer in connection with the
servicing of the Loans and the related Receivables; provided, however, that such
software shall be used by the Successor Servicer solely for the purposes of
servicing the Trust Assets. The Servicer shall, on the date of any servicing
transfer, transfer all of its rights and obligations under the Credit
Enhancement with respect to any Series to the Successor Servicer.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in subsection 10.01(a) for a period of 10 Business Days
or under subsection 10.01(b) or (c) for a period of 60 Business Days, shall not
constitute a Servicer Default if such delay or failure could not be prevented by
the exercise of reasonable diligence by the Servicer and such delay or failure
was caused by an act of God or the public enemy, acts of declared or undeclared
war, public disorder, rebellion, riot or sabotage, epidemics, landslides,
lightning, fire, hurricanes, tornadoes, earthquakes, nuclear disasters or
meltdowns, floods, power outages or similar causes. The preceding sentence shall
not relieve the Servicer from using its best efforts to perform its obligations
in a timely manner in accordance with the terms of this Agreement and the
81
Servicer shall provide the Trustee, any Credit Enhancement Provider, the
Transferor and the Holders of Investor Certificates with an Officer's
Certificate giving prompt notice of such failure or delay by it, together with a
description of the cause of such failure or delay and its efforts so to perform
its obligations.
Section 10.02 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a Termination
Notice pursuant to Section 10.01, the Servicer shall continue to perform all
servicing functions under this Agreement until the date specified in the
Termination Notice or otherwise specified by the Trustee in writing or, if no
such date is specified in such Termination Notice, or otherwise specified by the
Trustee, until a date mutually agreed upon by the Servicer and Trustee. The
Trustee shall notify each Rating Agency of such removal of the Servicer. The
Trustee shall, as promptly as possible after the giving of a Termination Notice
appoint a successor servicer (the "Successor Servicer"), and such Successor
Servicer shall accept its appointment by a written assumption in a form
acceptable to the Trustee. The Trustee may obtain bids from any potential
successor servicer. If the Trustee is unable to obtain any bids from any
potential successor servicer and the Servicer delivers an Officer's Certificate
to the effect that they cannot in good faith cure the Servicer Default which
gave rise to a Termination Notice, and if the Trustee is legally unable to act
as Successor Servicer, then the Trustee shall notify each Credit Enhancement
Provider of the proposed sale of the Receivables and shall provide each such
Credit Enhancement Provider an opportunity to bid on the Receivables and shall
offer the Transferor the right of first refusal to purchase the Receivables on
terms equivalent to the best purchase offer as determined by the Trustee (which
shall be the average bid quoted by two recognized dealers for similar securities
rated in comparable rating categories by each Rating Agency and having a
remaining maturity approximately equal to the remaining maturity of each
Series), but in no event less than an amount equal to the Aggregate
Certificateholders Ownership Interests on the date of such purchase plus all
interest accrued but unpaid on all of the outstanding Investor Certificates at
the applicable Certificate Rate through the date of such purchase; provided,
however, that if (i) the AIR Support Agreement is not in effect at the time of
such purchase and (ii) the short-term unsecured debt obligations or long-term
unsecured debt obligations of the Transferor (or any Affiliate of the Transferor
that may agree at such time to guarantee payment of such purchase price) are not
rated at the time of such purchase at least P-3 or Baa3, respectively, by
Moody's, no such purchase by the Transferor shall occur unless the Transferor
shall deliver an Opinion of Counsel reasonably acceptable to the Trustee and, if
Xxxxx'x is a Rating Agency with respect to any Series of Certificates
outstanding, to Moody's, that such purchase would not constitute a fraudulent
conveyance of the Transferor. The proceeds of such sale shall be deposited in
the Distribution Accounts or any Series Account, as provided in the related
Supplement, for distribution to the Investor Certificateholders of each
outstanding Series pursuant to Section 12.03 of this Agreement. In the event
that a Successor Servicer has not been appointed and has not accepted its
appointment at the
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time when the Servicer ceases to act as Servicer, the Trustee without further
action shall automatically be appointed the Successor Servicer. Notwithstanding
the above, the Trustee shall, if it is legally unable so to act, petition a
court of competent jurisdiction to appoint any established financial institution
having, in the case of an entity that is subject to risk-based capital adequacy
requirements, risk-based capital of at least $50,000,000 or, in the case of an
entity that is not subject to risk-based capital requirements, having a net
worth of not less than $50,000,000 and whose regular business includes the
servicing of receivables comparable to the Receivables as the Successor Servicer
hereunder.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, shall be deemed to have made the representations and
warranties set forth in Section 3.03 as of the date of succession and all
references in this Agreement to the Servicer shall be deemed to refer to the
Successor Servicer. Any Successor Servicer, by its acceptance of its
appointment, will automatically agree to be bound by the terms and provisions of
each Credit Enhancement. Notwithstanding the above, the Trustee, if it becomes
Successor Servicer pursuant to this Section, shall have no responsibility or
obligation (i) for the duties and obligations of the predecessor Servicers in
their capacities as Original Transferors under this Agreement, to repurchase or
substitute any Trust Asset, (ii) to cure losses on Permitted Investments
directed by a predecessor Servicer, (iii) for any representation or warranty of
the predecessor Servicer pursuant to Section 3.03, and (iv) for any act of any
predecessor Servicer prior to the date the Trustee assumes the capacity of
Servicer pursuant to this Section.
(c) In connection with such appointment and assumption, the
Trustee shall be entitled to such compensation, or may make such arrangements
for the compensation of the Successor Servicer out of Collections, as it and
such Successor Servicer shall agree; provided, however, that no such
compensation shall be in excess of the Servicing Fee permitted to the Servicer
pursuant to Section 3.02. The Transferor agrees that if the Servicer is
terminated hereunder, it will deposit with the Trustee a portion of the
Collections in respect of Finance Charge Receivables that it is entitled to
receive pursuant to Article IV to pay its share of the compensation of the
Successor Servicer.
(d) All authority and power granted to the Successor Servicer
under this Agreement shall automatically cease and terminate upon termination of
the Trust pursuant to Section 12.01 and shall pass to and be vested in the
Transferor and, without limitation, the Transferor is hereby authorized and
empowered to execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The Successor
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Servicer agrees to cooperate with the Transferor in effecting the termination of
the responsibilities and rights of the Successor Servicer to conduct servicing
on the Trust Assets. The outgoing Servicer shall be responsible for all costs
and expenses of the transfer of servicing to a Successor Servicer, including the
Trustee if it is acting in such capacity. The Successor Servicer shall transfer
its electronic records relating to the Trust Assets to the Transferor in such
electronic form as the Transferor may reasonably request and shall transfer all
other records, correspondence and documents to the Transferor in the manner and
at such times as the Transferor shall reasonably request. To the extent that
compliance with this Section 10.02 shall require the Successor Servicer to
disclose to the Transferor information of any kind which the Successor Servicer
deems to be confidential, the Transferor shall be required to enter into such
customary licensing and confidentiality agreements as the Successor Servicer
shall deem reasonably necessary to protect its interests.
Section 10.03 Notification to Certificateholders. Within two
Business Days after the Servicer becomes aware of any Servicer Default, the
Servicer shall give prompt written notice thereof to the Trustee, Standard &
Poor's, Moody's and any Credit Enhancement Provider and the Trustee shall give
notice to the Investor Certificateholders at their respective addresses
appearing in the Certificate Register. Upon any termination or appointment of a
Successor Servicer pursuant to this Article X, the Trustee shall give prompt
written notice thereof to Investor Certificateholders at their respective
addresses appearing in the Certificate Register.
Section 10.04 Waiver of Past Defaults. The Holders of
Investor Certificates evidencing Undivided Interests aggregating not less than
66-2/3% of the Certificateholders Ownership Interests of each Series adversely
affected by any default by the Servicer, the Transferor or the Original
Transferors may, on behalf of all Certificateholders of such Series, waive any
default by the Servicer, the Transferor or the Original Transferors in the
performance of their respective obligations hereunder and its consequences,
except a default in the failure to make any required deposits or payments of
interest or principal relating to such Series pursuant to Article IV which
default does not result from the failure of the Paying Agent to perform its
obligations to make any required deposits or payments of interest and principal
in accordance with Article IV. Upon any such waiver of a past default, such
default shall cease to exist, and any default arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
[End of Article X]
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ARTICLE XI
THE TRUSTEE
Section 11.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of any Servicer
Default and after the curing or waiver of all Servicer Defaults which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement and no additional duties shall be
implied into this Agreement against the Trustee. If a Responsible Officer has
received written notice that a Servicer Default has occurred (which has not been
cured or waived) and if the Trustee has not appointed a successor Servicer
pursuant to Section 10.02, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they substantially conform to the requirements of this
Agreement.
(c) Subject to subsection 11.01(a), no provision of this
Agreement shall be construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act or its own misconduct;
provided, however, that:
(i) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50%
of the Certificateholders Ownership Interests of any Series or of any
Credit Enhancement Provider with respect to such Series relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee in relation to such Series, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of
any failure by the Servicer referred to in clauses (a), (b) or (c) of
Section 10.01 unless a
85
Responsible Officer of the Trustee obtains actual knowledge of such
failure or the Trustee receives written notice of such failure from the
Credit Enhancement Provider, the Servicer or any Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than
10% of the Certificateholders Ownership Interests of any Series
adversely affected thereby.
(d) The Trustee shall not be required to expend or risk its
own funds or otherwise incur financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it, and none of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Servicer under this Agreement except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Servicer in accordance with
the terms of this Agreement.
(e) Except for actions expressly authorized by this
Agreement, the Trustee shall take no action reasonably likely to impair the
interests of the Trust in any Trust Assets now existing or hereafter created or
to impair the value of any Trust Assets now existing or hereafter created.
(f) Except as provided in this subsection 11.01(f), the
Trustee shall have no power to vary the corpus of the Trust including, without
limitation, the power to (i) accept any substitute obligation for a Trust Asset
initially assigned to the Trust under Section 2.01 or 2.06 hereof, (ii) add any
other investment, obligation or security to the Trust, except for an addition
permitted under Section 2.06 or (iii) withdraw from the Trust any Trust Assets,
except for a withdrawal permitted under Sections 2.07, 9.02, 12.01 or 12.02 or
subsections 2.04(d), 2.04(e) or Article IV.
(g) Subject to subsection 11.01(d) above, in the event that
the Paying Agent or the Transfer Agent and Registrar (if other than the Trustee)
shall fail to perform any obligation, duty or agreement in the manner or on the
day required to be performed by the Paying Agent or the Transfer Agent and
Registrar, as the case may be, under this Agreement, the Trustee shall be
obligated promptly to perform such obligation, duty or agreement in the manner
so required.
(h) No provision of this Agreement shall be construed to
require the Trustee to perform, or accept any responsibility for the performance
of, the obligations of the Servicer hereunder until it shall have assumed such
obligations in accordance with Section 10.02.
Section 11.02 Certain Matters Affecting the Trustee. Except
as otherwise provided in Section 11.01:
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(a) the Trustee may conclusively rely on and shall be
protected in acting on, or in refraining from acting in accord with, without any
duty to verify the contents or recompute any calculations therein, any
assignment of Additional Receivables, the initial report, the Monthly Servicer
Report, the annual Servicer's certificate, the monthly payment instructions and
notification to the Trustee, the monthly Certificateholders' statement, any
resolution, Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented to it pursuant to this Agreement by the
proper party or parties;
(b) the Trustee may consult with counsel, and any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement or any Credit
Enhancement, or to institute, conduct or defend any litigation hereunder or in
relation hereto, at the request, order or direction of any of the
Certificateholders or any Credit Enhancement Provider, pursuant to the
provisions of this Agreement, unless such Certificateholders or Credit
Enhancement Provider shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee
of the obligations, upon the occurrence of any Servicer Default (which has not
been cured or waived), to exercise such of the rights and powers vested in it by
this Agreement and any Credit Enhancement and to use the same degree of care and
skill in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs;
(d) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(e) the Trustee shall not be bound to make any investigation
into the facts of matters stated in any assignment of Additional Receivables,
the initial report, the monthly Servicer's certificate, the annual Servicer's
certificate, the monthly payment instructions and notification to the Trustee,
the monthly Certificateholders' statement, any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document, unless requested in writing so to do
by any Credit Enhancement Provider or by Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the
Certificateholders Ownership Interests of any Series;
87
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian, and the Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent, attorney or
custodian appointed with due care by it hereunder; and
(g) except as may be required by subsection 11.01(a), the
Trustee shall not be required to make any initial or periodic examination of any
documents or records related to the Trust Assets for the purpose of establishing
the presence or absence of defects, the compliance by the Transferor [, the
Original Transferors] or the Servicer with their respective representations and
warranties or for any other purpose.
Section 11.03 Trustee Not Liable for Recitals in
Certificates. The Trustee assumes no responsibility for the correctness of the
recitals contained in this Agreement and in the Certificates (other than the
signature and authentication of the Trustee on the Certificates). Except as set
forth in Section 11.15, the Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any Trust
Asset or related document. The Trustee shall not be accountable for the use or
application by the Transferor or the Original Transferors of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Transferor or the Original Transferors or
to the Holder of the Transferor Certificate in respect of the Trust Assets or
deposited in or withdrawn from the Collection Account, the Principal Account,
the Finance Charge Account or any Series Account by the Servicer.
Section 11.04 Trustee May Own Certificates. The Trustee in
its individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee.
Section 11.05 The Servicer to Pay Trustee's Fees and
Expenses. The Servicer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to receive, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the Trust hereby created and in the exercise and performance
of any of the powers and duties hereunder of the Trustee, and, subject to
Section 8.04, the Servicer will pay or reimburse the Trustee (without
reimbursement from any Investor Account, any Series Account or otherwise) upon
its request for all reasonable expenses, disbursements and advances (including
legal fees and costs and costs of persons not regularly employed by the Trustee)
incurred or made by the Trustee in accordance with any of the provisions of this
Agreement except any such expense, disbursement or advance as may arise from its
own negligence or bad faith and except as provided in the following sentence. If
the Trustee is appointed Successor Servicer pursuant to Section 10.02, the
provisions of this Section 11.05 shall not apply
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to expenses, disbursements and advances made or incurred by the Trustee in its
capacity as Successor Servicer.
The obligations of the Servicer under this Section 11.05
shall survive the termination of the Trust and the resignation or removal of the
Trustee.
Section 11.06 Eligibility Requirements for Trustee. The
Trustee hereunder shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State thereof
authorized under such laws to exercise corporate trust powers, having a
long-term unsecured debt rating of at least Baa3 by Moody's and BBB- by Standard
& Poor's having, in the case of an entity that is subject to risk-based capital
adequacy requirements, risk-based capital of at least $50,000,000 or, in the
case of an entity that is not subject to risk-based capital adequacy
requirements, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section 11.06, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.07.
Section 11.07 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from
the Trust hereby created by giving written notice thereof to the Servicer. Upon
receiving such notice of resignation, the Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 hereof and shall fail to resign
after written request therefor by the Transferor, or if at any time the Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the Trustee and promptly
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee.
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(c) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 11.07
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 11.08 hereof and any liability of the Trustee
arising hereunder shall survive such appointment of a successor trustee.
Section 11.08 Successor Trustee.
(a) Any successor trustee appointed as provided in Section
11.07 hereof shall execute, acknowledge and deliver to the Transferor and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee herein. The predecessor Trustee shall deliver to the successor
trustee all documents and statements held by it hereunder, and the Transferor
and the predecessor Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly vesting
and confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided
in this Section 11.08 unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 11.06 hereof and shall
be an Eligible Servicer, and, if Standard & Poor's is then a Rating Agency,
unless Standard & Poor's shall have consented to such appointment.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.08, such successor trustee shall mail notice of such
succession hereunder to all Certificateholders at their addresses as shown in
the Certificate Register.
Section 11.09 Merger or Consolidation of Trustee. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such Person shall be eligible under the provisions
of Section 11.06 hereof, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
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Section 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement,
at any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 11.10, such powers, duties, obligations,
rights and trusts as the Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 11.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 11.08 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Trustee joining in such act), except to the extent that under any laws
of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or cotrustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation
of or remove any separate trustee or cotrustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either
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jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect to this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 11.11 Tax Returns. In the event the Trust shall be
required to file tax returns, the Trustee, as soon as practicable after it is
made aware of such requirement, shall prepare or cause to be prepared any tax
returns required to be filed by the Trust and, to the extent possible, shall
file such returns in accordance with Section 3.07 of this Agreement at least
five days before such returns are due to be filed. The Trustee is hereby
authorized to sign any such return on behalf of the Trust. The Servicer shall
prepare or shall cause to be prepared all tax information required by law to be
distributed to Certificateholders and shall deliver such information to the
Trustee at least five days prior to the date it is required by law to be
distributed to Certificateholders. The Servicer, upon request, will furnish the
Trustee with all such information known to the Servicer as may be reasonably
required in connection with the preparation of all tax returns of the Trust.
Except to the extent the Trustee or Servicer breaches its obligations or
covenants contained in this Section 11.11 or in Section 6.06(b) of this
Agreement, in no event shall the Trustee or the Servicer be liable for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders or
the Certificate Owners arising under any tax law, including without limitation
federal, state, local or foreign income or excise taxes or any other tax imposed
on or measured by income (or any interest or penalty with respect thereto or
arising from a failure to comply therewith).
Section 11.12 Trustee May Enforce Claims Without Possession
of Certificates. All rights of action and claims under this Agreement or any
Series of Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of any Series of Certificateholders in respect of which such
judgment has been obtained.
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Section 11.13 Suits for Enforcement. If a Servicer Default
shall occur and be continuing, the Trustee, in its discretion may, subject to
the provisions of Sections 10.01 and 11.14, proceed to protect and enforce its
rights and the rights of any Series of Certificateholders under this Agreement
by a suit, action or proceeding in equity or at law or otherwise, whether for
the specific performance of any covenant or agreement contained in this
Agreement or in aid of the execution of any power granted in this Agreement or
for the enforcement of any other legal, equitable or other remedy as the
Trustee, being advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Trustee or any Series of Certificateholders.
Section 11.14 Rights of Certificateholders to Direct Trustee.
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Aggregate Certificateholders Ownership Interests (or, with
respect to any remedy, trust or power that does not relate to all Series, 50% of
the aggregate Certificateholders Ownership Interests of the Investor
Certificates of all Series to which such remedy, trust or power relates) shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee; provided, however, that, subject to Section
11.01, the Trustee shall have the right to decline to follow any such direction
if the Trustee being advised by counsel determines that the action so directed
may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in personal liability or
be unduly prejudicial to the rights of Certificateholders not parties to such
direction; and provided further, that nothing in this Agreement shall impair the
right of the Trustee to take any action deemed proper by the Trustee and which
is not inconsistent with such direction of such Holders of Investor
Certificates.
Section 11.15 Representations and Warranties of Trustee. The
Trustee represents and warrants that:
(i) the Trustee is a national banking association duly
organized, existing and authorized to engage in the business of banking
under the laws of the United States of America;
(ii) the Trustee has full power, authority and right to
execute, deliver and perform this Agreement, and has taken all
necessary action to authorize the execution, delivery and performance
by it of this Agreement; and
(iii) this Agreement has been duly executed and delivered
by the Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee
will maintain at its expense in the Borough of Manhattan, the City of New York
an office or
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offices, or agency or agencies, where notices and demands to or upon the Trustee
in respect of the Certificates and this Agreement may be served. The Trustee
initially appoints its Corporate Trust Office as its office for such purposes in
New York. The Trustee will give prompt written notice to the Servicer and to
Certificateholders (or in the case of Holders of Bearer Certificates, in the
manner provided for in the related Supplement) of any change in the location of
the Certificate Register or any such office or agency.
[End of Article XI]
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ARTICLE XII
TERMINATION
Section 12.01 Termination of Trust.
(a) The respective obligations and responsibilities of the
Original Transferors, the Transferor, the Servicer and the Trustee created
hereby (other than the obligation of the Trustee to make payments to
Certificateholders as hereafter set forth) shall terminate, except with respect
to the duties described in Section 11.05, subsections 2.04(d) and 12.03(b) and
the indemnity obligations described in subsection 6.03(c) and Sections 7.04,
7.05 and 8.04, on the Trust Termination Date; provided, however, that the Trust
shall not terminate on the date specified in clause (i) of the definition of
"Trust Termination Date" if each of the Servicer and the Holder of the
Transferor Certificate notify the Trustee in writing, not later than five
Business Days preceding such date, that they desire that the Trust not terminate
on such date, which notice (such notice, a "Trust Extension") shall specify the
date on which the Trust shall terminate (such date, the "Extended Trust
Termination Date"); provided, however, that the Extended Trust Termination Date
shall be not later than the earlier of December 31, 2034 and the expiration of
21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the father of the late President of the United States, living on the
date of this Agreement. The Servicer and the Holder of the Transferor
Certificate may, on any date following the date on which a Trust Extension is
given, so long as no Series of Certificates is outstanding, deliver a notice in
writing to the Trustee changing the Extended Trust Termination Date (subject to
the second proviso in the preceding sentence).
(b) All principal or interest with respect to any Series of
Investor Certificates shall be due and payable no later than the Series
Termination Date with respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Certificateholders Ownership Interests of any
Series of Certificates is expected to be greater than zero on its Series
Termination Date (after giving effect to all transfers, withdrawals, deposits
and drawings to occur on such date and the payment of principal to be made on
such Series on such date), the Trustee will, prior to such date, sell or cause
to be sold, and pay the proceeds first, to all Certificateholders of such Series
pro rata and in accordance with the priority for each Class within such Series
as provided in the related Supplement, in final payment of all principal of and
accrued interest on such Series of Certificates, and second, as provided in the
related Supplement, an amount of Principal Receivables and the related Finance
Charge Receivables (or interests therein) up to 110% of the sum of the
Certificateholders Ownership Interests of such Series plus the Enhancement
Invested Amount or the Collateral Interest (if not included in the
Certificateholders Ownership Interests) of such Series, if any, at the close of
business on such date (but not more than the applicable Investor Percentage of
Principal Receivables and the related Finance Charge Receivables on such date
for such Series).
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The Trustee shall notify each Credit Enhancement Provider of the proposed sale
of such Receivables and shall provide each Credit Enhancement Provider with an
opportunity to bid on such Receivables. The Transferor shall be permitted to
purchase such Receivables in such case and shall have a right of first refusal
with respect thereto. Any proceeds of such sale in excess of such principal and
interest paid and such other amounts paid pursuant to the related Supplement
shall be paid to the Holder of the Transferor Certificate but only if the
Transferor Ownership Interest as of such date is greater than the Minimum
Transferor Ownership Interest as of the end of the immediately preceding Monthly
Period and otherwise shall be deposited in the Collection Account. Upon such
Series Termination Date with respect to the applicable Series of Certificates,
final payment of all amounts allocable to any Investor Certificates of such
Series shall be made in the manner provided in Section 12.03.
Section 12.02 Cleanup Call. (a) If so provided in any
Supplement, the Transferor may, but shall not be obligated to, cause a final
distribution to be made in respect of the related Series of Certificates on any
Distribution Date on or after the Distribution Date on which the
Certificateholders Ownership Interest in such Series is less than or equal to
10% of the Certificateholders Ownership Interest on the Closing Date for such
Series. Such distribution shall be made by depositing into the applicable
Distribution Account or the applicable Series Account, not later than the
Transfer Date preceding such Distribution Date, for application in accordance
with Section 12.03, the amount specified in such Supplement; provided, however,
that if (i) the AIR Support Agreement is not in effect at the time of such
purchase and (ii) the short term unsecured debt obligations or long term
unsecured debt obligations of the Transferor (or of any Affiliate of the
Transferor that may agree at such time to guarantee the payment of such purchase
price) are not rated at the time of such purchase of Receivables at least P-3 or
Baa3, respectively, by Moody's, no such event shall occur unless the Transferor
shall deliver an Opinion of Counsel reasonably acceptable to the Trustee and, if
Xxxxx'x is a Rating Agency with respect to any Series of Certificates
outstanding, to Moody's, that such deposit into the applicable Distribution
Account or any Series Account as provided in the related Supplement would not
constitute a fraudulent conveyance of the Transferor.
(b) The amount deposited pursuant to subsection 12.02(a)
shall be paid to the Investor Certificateholders of the related Series pursuant
to Section 12.03 on the related Distribution Date following the date of such
deposit. All Certificates of a Series which are purchased pursuant to subsection
12.02(a) shall be delivered by the Transferor upon such purchase to, and be
canceled by, the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor. The Certificateholders Ownership
Interests of each Series which is purchased pursuant to subsection 12.02(a)
shall, for the purposes of the definition of "Transferor Ownership Interest," be
deemed to be equal to zero on the Distribution Date following the making of the
deposit, and the Transferor Ownership Interest shall thereupon be
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deemed to have been increased by the Certificateholders Ownership Interests of
such Series.
Section 12.03 Final Payment with Respect to Any Series.
(a) Written notice of any termination, specifying the
Distribution Date upon which the Investor Certificateholders of any Series may
surrender their Certificates for payment of the final distribution with respect
to such Series and cancellation, shall be given (subject to at least two
Business Days' prior notice from the Servicer to the Trustee) by the Trustee to
Investor Certificateholders of such Series mailed not later than the fifth day
of the month of such final distribution (or in the manner provided by the
Supplement relating to such Series) specifying (i) the Distribution Date (which
shall be the Distribution Date in the month (x) in which the deposit is made
pursuant to subsection 2.04(e), 9.02(b), or subsection 12.02(a) of the Agreement
or such other section as may be specified in the related Supplement, or (y) in
which the related Series Termination Date occurs) upon which final payment of
such Investor Certificates will be made upon presentation and surrender of such
Investor Certificates at the office or offices therein designated (which, in the
case of Bearer Certificates, shall be outside the United States), (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Investor Certificates at the office or
offices therein specified. The Servicer's notice to the Trustee in accordance
with the preceding sentence shall be accompanied by an Officer's Certificate
setting forth the information specified in Article V of this Agreement covering
the period during the then current calendar year through the date of such notice
and setting forth the date of such final distribution. The Trustee shall give
such notice to the Transfer Agent and the Paying Agent at the time such notice
is given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 12.01(a) or the occurrence of the Series Termination Date with
respect to any Series, all funds then on deposit in the Finance Charge Account,
the Principal Account, the Distribution Account or any Series Account applicable
to the related Series shall continue to be held in trust for the benefit of the
Certificateholders of the related Series and the Paying Agent or the Trustee
shall pay such funds to the Certificateholders of the related Series upon
surrender of their Certificates (which surrenders and payments, in the case of
Bearer Certificates, shall be made only outside the United States). In the event
that all of the Investor Certificateholders of any Series shall not surrender
their Certificates for cancellation within six months after the date specified
in the above- mentioned written notice, the Trustee shall give second written
notice (or, in the case of Bearer Certificates, publication notice) to the
remaining Investor Certificateholders of such Series upon receipt of the
appropriate records from the Transfer Agent and Registrar to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one and one-half years after
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the second notice with respect to a Series, all the Investor Certificates of
such Series shall not have been surrendered for cancellation, the Trustee may
take appropriate steps or may appoint an agent to take appropriate steps, to
contact the remaining Investor Certificateholders of such Series concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds in the Distribution Account or any Series Account held for the benefit of
such Investor Certificateholders. The Trustee and the Paying Agent shall pay to
the Transferor upon request any monies held by them for the payment of principal
or interest which remains unclaimed for two years. After such payment to the
Transferor, Investor Certificateholders entitled to the money must look to the
Transferor for payment as general creditors unless an applicable abandoned
property law designates another Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
canceled by the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor.
Section 12.04 Termination Rights of Holders of Transferor
Certificate. Upon the termination of the Trust pursuant to Section 12.01, and
after payment of all amounts due hereunder on or prior to such termination and
the surrender of the Transferor Certificate, the Trustee shall execute a written
reconveyance substantially in the form of Exhibit F pursuant to which it shall
reconvey 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 moneys 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 subsection 12.03(b). The Trustee shall execute and deliver such instruments
of transfer and assignment, in each case without recourse, as shall be
reasonably requested by the Holder of the Transferor Certificate to vest in such
Holders all right, title and interest which the Trust had in the Receivables.
[End of Article XII]
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment.
(a) This Agreement or any Supplement may be amended in
writing from time to time by the Servicer, the Transferor, the Original
Transferors and the Trustee, without the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein, to
add any other provisions with respect to matters or questions arising under this
Agreement or any Supplement which shall not be inconsistent with the provisions
of this Agreement or any Supplement; provided, that such action shall not, as
evidenced by an Opinion of Counsel for the Transferor addressed and delivered to
the Trustee, adversely affect in any material respect the interests of any
Investor Certificateholder.
(b) This Agreement or any Supplement may also be amended in
writing from time to time by the Servicer, the Transferor, the Original
Transferors and the Trustee with the consent of the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of
the Certificateholders Ownership Interests of each outstanding Series adversely
affected by such amendment for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
any Supplement or modifying in any manner the rights of Investor
Certificateholders of any Series then issued and outstanding; provided, however,
that no such amendment shall (i) reduce in any manner the amount of, or delay
the timing of, distributions which are required to be made on any Investor
Certificates of such Series without the consent of each Holder of Investor
Certificates of such Series, (ii) change the definition of or the manner of
calculating the Certificateholders Ownership Interests, the Investor Percentage
or the Aggregate Default Amount of such Series without the consent of each
Holder of Investor Certificates of such Series, (iii) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of
each Holder of Investor Certificates of all Series adversely affected or (iv)
terminate, modify or amend Section 7.06 without the written consent of each
Holder of Investor Certificates of all Series and written confirmation from each
Rating Agency to the Transferor, the Servicer and the Trustee that such action
will not result in a reduction or withdrawal of the then ratings of any
outstanding Certificates for which it is a Rating Agency. The Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Trustee's rights, duties or immunities under this Agreement or otherwise.
(c) Notwithstanding anything in this Section 13.01 to the
contrary, the Supplement with respect to any Series may be amended with respect
to the items and in accordance with the procedures provided in such Supplement.
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(d) Promptly after the execution of any such amendment, the
Trustee shall furnish notification of the substance of such amendment to each
Investor Certificateholder of each Series affected thereby, to any related
Credit Enhancement Provider and to each Rating Agency providing a rating for
such Series.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Investor Certificateholders shall
be subject to such reasonable requirements as the Trustee may prescribe.
(f) Any Supplement executed and delivered pursuant to Section
6.09 and any amendments deemed made in connection with the addition to or
removal of Receivables from the Trust as provided in Sections 2.06 and 2.07,
executed in accordance with the provisions hereof, shall not be considered
amendments to this Agreement for the purpose of subsections 13.01(a) and (b).
(g) In connection with any amendment, the Trustee may request
an Opinion of Counsel from the Transferor or the Servicer to the effect that the
amendment complies with all requirements of this Agreement.
Section 13.02 Protection of Right, Title and Interest to
Trust.
(a) The Servicer shall cause this Agreement, all amendments
hereto and/or all financing statements and continuation statements and any other
necessary documents covering the Certificateholders and the Trustee's right,
title and interest to the Trust to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such manner
and in such places as may be required by law fully to preserve and protect the
right, title and interest of the Certificateholders or the Trustee, as the case
may be, hereunder to all property comprising the Trust. The Servicer shall
deliver to the Trustee file-stamped copies of, or filing receipts for, any
document recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing. The Transferor and the
Original Transferors shall cooperate fully with the Servicer in connection with
the obligations set forth above and will execute any and all documents
reasonably required to fulfill the intent of this subsection 13.02(a).
(b) Within 30 days after the Transferor or either of the
Original Transferors makes any change in its name, identity or corporate
structure which would make any financing statement or continuation statement
filed in accordance with paragraph (a) above seriously misleading within the
meaning of Section 9-402(7) of the UCC as in effect in the State of New York or
California, such entity shall give the Trustee notice of any such change and
shall file such financing statements or
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amendments as may be necessary to continue the Trust's security interest in the
Trust Assets and the proceeds thereof.
(c) Each of the Transferor, the Original Transferors and the
Servicer will give the Trustee prompt written notice of any relocation of any
office from which it services Trust Assets or keeps records concerning the Trust
Assets or of its principal executive office and whether, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and shall file such financing statements or amendments
as may be necessary to continue the Trust's security interest in the Trust
Assets and the proceeds thereof. The Transferor, the Original Transferors and
the Servicer will at all times maintain each office from which it services Trust
Assets and its principal executive office within the United States of America.
Section 13.03 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall
not operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except
with respect to the Investor Certificateholders as specifically provided
elsewhere herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, except
to the extent provided in Sections 3.07 and 7.04, be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder in its capacity as such be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of
any provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given written notice to the Trustee and
unless the Holders of Certificates evidencing Undivided Interests aggregating
more than 50% of the Certificateholders Ownership Interests of any Series (or,
if applicable, any Class within a Series) which may be adversely affected but
for the institution of such suit, action or proceeding, shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and
101
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have the right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or prejudice the rights of the Holders of any other of the
Certificates of such Series (or, if applicable, any Class within a Series), or
to obtain or seek to obtain priority over or preference to any other such
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders of such Series (or, if applicable, any Class within a
Series). For the protection and enforcement of the provisions of this Section
13.03, each and every Certificateholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
Section 13.04 Governing Law. THIS AGREEMENT 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 13.05 Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered at, sent by facsimile to, sent by courier at
or mailed by registered mail, return receipt requested, to (a) in the case of
AIR, AIC and AICCO, to 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Attention: Senior Vice President, (b) in the case of the Trustee, to the
Corporate Trust Office, (c) in the case of the Credit Enhancement Provider for a
particular Series, the address, if any, specified in the Supplement relating to
such Series and (d) in the case of the Rating Agency for a particular Series,
the address, if any, specified in the Supplement relating to such Series; or, as
to each party, at such other address as shall be designated by such party in a
written notice to each other party. Unless otherwise provided with respect to
any Series in the related Supplement, any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register, or with respect to any notice required or permitted to be made to the
Holders of Bearer Certificates, by publication in the manner provided in the
related Supplement. If and so long as any Series or Class is listed on the
Luxembourg Stock Exchange and such exchange shall so require, any notice to
Investor Certificateholders shall be published in an authorized newspaper of
general circulation in Luxembourg within the time period prescribed in this
Agreement. Any notice so mailed or published, as the case may be, within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
102
Section 13.06 Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall for
any reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or of the
Certificates or rights of the Holders thereof.
Section 13.07 Assignment. Except as provided in Section 8.02
or 8.07, this Agreement may not be assigned by the Servicer.
Section 13.08 Certificates Non-Assessable and Fully Paid.
Except to the extent otherwise provided in Section 7.04, it is the intention of
the parties to this Agreement that the Certificateholders shall not be
personally liable for obligations of the Trust, that the Undivided Interests
represented by the Certificates shall be non-assessable for any losses or
expenses of the Trust or for any reason whatsoever, and that Certificates upon
execution and authentication thereof by the Trustee pursuant to Sections 2.01
and 6.02 are and shall be deemed fully paid.
Section 13.09 Further Assurances. The Transferor, the
Original Transferors and the Servicer agree to do and perform, from time to
time, any and all acts and to execute any and all further instruments required
or reasonably requested by the Trustee more fully to effect the purposes of this
Agreement, including, without limitation, the execution of any financing
statements or continuation statements relating to all or any portion of the
Trust Assets for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trustee, any Credit
Enhancement Provider or the Investor Certificateholders, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
Section 13.11 Counterparts. This Agreement may be executed in
two or more counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall constitute
one and the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Certificateholders and, to the extent provided in the related Supplement, to the
Credit Enhancement Provider named therein, and their respective successors and
permitted assigns. Except as otherwise
103
provided in this Article XIII and Sections 7.04, 7.05, 7.06 and 8.04 hereof, no
other Person will have any right or obligation hereunder.
Section 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement a provision is made that an
action may be taken or a notice, demand or instruction given by Investor
Certificateholders, such action, notice or instruction may be taken or given by
any Investor Certificateholder, unless such provision requires a specific
percentage of Investor Certificateholders. Notwithstanding anything in this
Agreement to the contrary, none of the Original Transferors, the Transferor, the
Servicer or any Affiliate thereof shall have any right to vote with respect to
any Investor Certificate except as specifically provided in Section 9.02(a).
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind such
Certificateholder and every subsequent holder of such Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee or the Servicer
in reliance thereon, whether or not notation of such action is made upon such
Certificate.
Section 13.14 Rule 144A Information. For so long as any of
the Investor Certificates of any Series or any Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Transferor,
the Servicer, the Trustee and the Credit Enhancement Provider for such Series
agree to cooperate with each other to provide to any Investor Certificateholders
of such Series or Class and to any prospective purchaser of Certificates
designated by such an Investor Certificateholder upon the request of such
Investor Certificateholder or prospective purchaser, any information required to
be provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Securities Act.
Section 13.15 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement.
Section 13.16 Headings. The headings herein are for purposes
of reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
[End of Article XIII]
104
IN WITNESS WHEREOF, the Transferor, the Original Transferors,
the Servicer and the Trustee have caused this Agreement 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:
105
EXHIBIT A
TRANSFEROR CERTIFICATE
No. 1 One Unit
AIC PREMIUM FINANCE LOAN MASTER TRUST
ASSET BACKED 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.
This Certificate does not represent an obligation of, or any
interest in, the Transferor or the Servicer referred to below, or any of their
affiliates, and neither the Transferor Certificate, the Receivables nor the
related Loans are insured or guaranteed by any governmental agency or
instrumentality or any other Person. The Transferor Certificate are 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 A.I. Receivables Corp. ("AIR") (the
"Transferor") 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 the Receivables (including Additional Receivables) existing at any
time after the Initial Cut-Off Date or thereafter created, including all
Collections thereon, other than Credit Balances, received by the Transferor
after the Cut-Off Date, together with other assets and interests constituting
the Trust pursuant to an Amended and Restated Pooling and Servicing Agreement
dated as of February [___], 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 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 Transferor by
virtue of the acceptance hereof assents and by which the Transferor is bound.
This Certificate has not been registered or qualified under
the Securities Act of 1933, as amended, or any state securities law. No sale,
transfer, pledge or other disposition of this Certificate shall be permitted
other than in accordance with the provisions of Section 6.09 or 7.02 of the
Pooling and Servicing Agreement.
This Certificate is an Transferor Certificate, which
represents an undivided interest in the Trust, including the right to receive
the collections and other amounts at the times, in the amounts and subject to
the limitations specified in-the Pooling and Servicing Agreement to be paid to
the Holder of the Transferor Certificate. Unless otherwise stated in any
Supplement, throughout the existence of the Trust, the Holder of the Transferor
Certificate will be allocated by the Servicer an amount equal to the product of
(A) the Transferor Percentage and (B) the aggregate amount of Collections
allocated to Principal Receivables and Finance Charge Receivables, respectively,
in respect of each Monthly Period. The aggregate interest represented by the
Transferor Certificate in the Receivables in the Trust shall not at any time
exceed the Transferor Ownership Interest at such time. In addition to this
Certificate, Series of Investor Certificates will be issued to investors
pursuant to the Pooling and Servicing Agreement, each of which will represent an
undivided interest in the Trust. This Certificate shall not represent any
interest in any Investor Certificate, any Series or any Credit Enhancement,
except to the extent provided in the Pooling and Servicing Agreement. The
Transferor Ownership Interest shall be determined as provided in the Pooling and
Servicing Agreement.
The Servicer is entitled to receive as servicing compensation
a servicing fee, which fee shall be payable, with respect to each Series, at the
times and in the amounts set forth in the Pooling and Servicing Agreement. The
portion of the servicing fee which will be allocable to the Holder of the
Transferor Certificate pursuant to the Pooling and Servicing Agreement will be
payable out of the cash flows of the Trust otherwise allocable to the Holder of
the Transferor Certificate and neither the Trust nor the Trustee nor the
Investor Certificateholders will have any obligations to pay such portion of the
servicing fee.
Upon the termination of the Trust pursuant to Section 12.01
of the Pooling and Servicing Agreement, and after payment of all amounts due
under the Pooling and Servicing Agreement on or prior to such termination and
the surrender of the Transferor Certificate, 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.
A-2
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.
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:_____________________________
Cashier
A-3
Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is an Transferor Certificate referred to in the
within-mentioned Pooling and Servicing Agreement.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By: _________________________
Authorized Officer
A-4
EXHIBIT B
FORM OF CONFIRMATION OF ASSIGNMENT OF ADDITIONAL RECEIVABLES
CONFIRMATION OF ASSIGNMENT No. _____ OF ADDITIONAL
RECEIVABLES, dated as of ______________, ____________ by A.I. Receivables Corp.
(the "Transferor"), to The First National Bank of Chicago, a banking association
organized and existing under the laws of the United States of America (the
"Trustee") pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Transferor and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement, dated as of January [___],
1998 (hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, the Transferor has, pursuant to the Pooling and
Servicing Agreement, conveyed Additional Receivables to the Trust as of the
Addition Dates therefor and the Trustee has accepted such conveyance; and
WHEREAS, the Transferor is required, pursuant to the Pooling
and Servicing Agreement, to deliver this Confirmation of Assignment to the
Trustee;
NOW, THEREFORE, the Transferor and the Trustee hereby agree
as follows:
1. Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein; provided, that the "preceding Monthly
Period" shall mean the Monthly Period immediately preceding the calendar month
in which this Confirmation of Assignment is delivered to the Trustee.
2. Description of Receivables. The Transferor shall deliver
to the Trustee herewith a computer file or microfiche list containing a true and
complete list of all Receivables (including Additional Receivables), identifying
each by account number and the aggregate amount of the related Receivables as of
the end of the preceding Monthly Period. Such list shall be marked as Schedule 1
to this Confirmation of Assignment and, as of the end of the preceding Monthly
Period, shall be incorporated into and made a part of this Confirmation of
Assignment and the Pooling and Servicing Agreement.
3. Confirmation of Conveyance of Receivables.
(a) The Transferor does hereby confirm its transfer,
assignment and conveyance under the Pooling and Servicing Agreement to the Trust
for the benefit of the Certificateholders, without recourse, all of its right,
title and interest in and to the Receivables (including Additional
Receivables as of the Addition Dates therefor), including all Collections
thereon, other than Credit Balances, received by the Transferor after the
Cut-Off Date (or, with respect to Additional Receivables, after the Addition
Dates therefor).
(b) In connection with such transfer, the Transferor agrees,
at its own expense, on or prior to the date of this Confirmation of Assignment,
to cause AIC and/or AICCO to indicate in their computer files that the
Additional Receivables, from Loans under Premium Finance Agreements, have been
transferred to the Trust Pursuant to the Pooling and Servicing Agreement for the
benefit of the Certificateholders.
4. Acceptance by Trustee. The Trustee hereby acknowledges its
acceptance on behalf of the Trust for the benefit of the Certificateholders of
all right, title and interest previously held by the Transferor in and to the
Receivables (including Additional Receivables) and confirms that it shall
maintain such right, title and interest, upon the trust set forth in the Pooling
and Servicing Agreement, for the benefit of all Certificateholders.
5. Representations and Warranties of the Transferor. The
representations and warranties of the Transferor contained in subsection 2.04(c)
of the Pooling and Servicing Agreement are true and correct as of the date
hereof and each Addition Date.
6. Additional Representations and Warranties of the
Transferor. The Transferor hereby further represents and warrants to the Trust
that (a) the execution and delivery of this Confirmation of Assignment by it and
the consummation of the transactions provided for or referred to in this
Confirmation of Assignment have been duly authorized by it by all necessary
corporate action on its part, do not require any approval, authorization,
consent, order or other action of any Person or of any governmental body or
official, do not and will not conflict with or violate any Requirements of Law
applicable to it or any of its properties, and do not and will not conflict
with, result in any breach of, or constitute (with or without notice or lapse of
time or both) a default under any indenture, contract, agreement, mortgage, deed
of trust or other instrument to which it is a party or by which it or any of its
properties are bound and (b) this Confirmation of Assignment constitutes, as of
the date hereof, a legal, valid and binding obligation of the Transferor
enforceable against it in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general, and (ii) except as
such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
7. Amendment of the Pooling and Servicing Agreement. The
Pooling and Servicing Agreement is hereby amended to provide that all references
therein to the "Amended and Restated Pooling and Servicing Agreement," to "this
Agreement," "herein," "hereof" and "hereunder" shall be deemed from and after
the date hereof to be a dual reference to the Pooling and Servicing Agreement as
supplemented by this Confirmation of Assignment. Except as expressly amended
hereby, all of the representations, warranties, terms, covenants and conditions
to the Pooling and Servicing Agreement shall remain unamended and shall continue
to be, and shall remain, in full force and effect in accordance with its terms
and except as expressly provided herein shall not constitute or be deemed
B-2
to constitute a waiver of compliance with or a consent to noncompliance with any
term or provision of the Pooling and Servicing Agreement.
8. Counterparts. This Confirmation of Assignment may be
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.
9. Governing Law. THIS CONFIRMATION OF ASSIGNMENT SHALL BE
GOVERNED BY AND 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.
B-3
IN WITNESS WHEREOF, the undersigned have caused this
Confirmation of Assignment of Additional Receivables to be duly executed and
delivered by their respective duly authorized officers on the day and year first
above written.
A.I. RECEIVABLES CORP.,
as Transferor
By:_______________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:_______________________
Name:
Title:
B-4
Schedule 1 to
Confirmation of Assignment
of Additional Receivables
LIST OF RECEIVABLES (INCLUDING ADDITIONAL RECEIVABLES)
[Deemed Incorporated]
B-5
EXHIBIT C
FORM OF MONTHLY SERVICER REPORT
AIC PREMIUM FINANCE LOAN MASTER TRUST SERIES [____]*
MONTHLY PERIOD ENDING ___________________________
Capitalized terms used in this notice have their respective meanings set forth
in the Pooling and Servicing Agreement or the Series [____]* Supplement, as
applicable. References herein to certain sections and subsections are references
to the respective sections and subsections of the Pooling and Servicing
Agreement, as supplemented by the Series [____]* Supplement (the "Agreement").
This report is delivered pursuant to Section 3.04(b) of the Agreement.
A) A.I. Credit Corp. ("AIC") and AICCO, Inc. ("AICCO") are the
Servicers under the Agreement.
B) The undersigned is a Servicing Officer.
C) The date of this notice is a Determination Date under the Agreement.
I. GENERAL INFORMATION (as of the Transfer Date referred to below or such
other date as may be specified in the Agreement)
A. Class A Available Funds $_________
B. Class B Available Funds $_________
C. Class C Available Funds $_________
D. Available Investor Principal
Collections for Series [____]*
1. Investor Principal Collections
for the related Monthly Period $_________
Less
2. Reallocated Principal Collections
required to fund Class A Required
Amount and Class B Required Amount $_________
Plus
3. Shared Principal Collections
--------
*Specify Series designation.
allocated to Series [____]* $_________
Net $_____
E. Default Amount
1. Class A Default Amount $_________
2. Class B Default Amount $_________
3. Class C Default Amount $_________
Total $_____
F. Transferor Ownership Interest
1. Principal Receivables $_________
Less
2. Outstanding Certificate-
holders Ownership Interests $_________
Net $_____
G. Minimum Transferor Ownership Interest
as of end of Monthly Period**
1. 107% of Initial Certificateholders
Ownership Interests $__________
2. Outstanding Certificateholders
Ownership Interests $__________
3. Excess Receivables Amount $__________
Net $_____
H. Reallocated Principal Collections
--------
** If this information has not been completed then the Servicer certifies
that the Transferor Ownership Interest as of the date of this report is
not less than 50% of Trust assets as of the close of business on the
last day of the above referenced Monthly Period and that such
Transferor Ownership Interest exceeds the Minimum Transferor Ownership
Interest as of end of such Monthly Period.
C-2
1. Reallocated Class A Principal
Collections $__________
2. Reallocated Class B Principal
Collections $__________
3. Reallocated Class C Principal
Collections $__________
Total $_____
I. [____]* Yield Enhancement Account Deposit
1. Available Yield Enhancement Amount $__________
2. Maximum Yield Enhancement Amount $__________
3. Amount being applied towards
Maximum Yield Enhancement Amount $__________
4. Excess Finance Charges $__________
II. INSTRUCTION TO MAKE A WITHDRAWAL
Pursuant to Section 4.09, the Servicer does hereby instruct the Trustee (i) to
make withdrawals from the Finance Charge Account, the Principal Account and the
Excess Funding Account on ____ ___, ____ which date is a Transfer Date under the
Pooling and Servicing Agreement, in the following amounts and (ii) to apply the
proceeds of such withdrawals in accordance with the specified subsection of
Section 4.09:
A. Pursuant to subsection 4.09(a)(i):
1. Class A Monthly Interest $_________
2. Class A Additional Interest $_________
B. Pursuant to subsection 4.09(a)(ii):
1. Class A Prior Period Interest $_________
C. Pursuant to subsection 4.09(a)(iii):
1. Class A Servicing Fee $_________
C-3
2. Accrued and unpaid Class A
Servicing Fee $_________
D. Pursuant to subsection 4.09(a)(iv):
1. Class A Default Amount $_________
E. Pursuant to subsection 4.09(b)(i):
1. Class B Monthly Interest $_________
2. Class B Additional Interest $_________
F. Pursuant to subsection 4.09(b)(ii):
1. Class B Prior Period Interest $_________
G. Pursuant to subsection 4.09(b)(iii):
1. Class B Servicing Fee $_________
2. Accrued and unpaid Class B
Servicing Fee $_________
H. Pursuant to subsection 4.09(iv):
1. Class B Default Amount $_________
I. Pursuant to subsection 4.09(c)(i):
1. Class C Monthly Interest $_________
2. Class C Additional Interest $_________
J. Pursuant to subsection 4.09(c)(ii):
1. Class C Prior Period Interest $_________
K. Pursuant to subsection 4.09(c)(iii):
1. Class C Servicing Fee $_________
2. Accrued and unpaid Class C
Servicing Fee $_________
C-4
L. Pursuant to subsection 4.09(c)(iv):
1. Class C Default Amount $_________
Total of A through L $_____
M. Pursuant to subsection 4.09(d)(i):
1. Amount to be treated as Shared
Principal Collections for other Series $_________
N. Pursuant to subsection 4.09(d)(ii):
1. Amount to be paid to the Holder of the Transferor
Certificate (Transferor Ownership Interest greater
than Minimum Transferor Ownership Interest) $_________
2. Amount to be deposited into Excess
Funding Account (Transferor Ownership
Interest not greater than Minimum
Transferor Ownership Interest) $_________
Total of M and N $_____
O. Pursuant to subsection 4.09(e)(i):
1. Class A Monthly Principal $_________
P. Pursuant to subsection 4.09(e)(ii):
1. Class B Monthly Principal $_________
Q. Pursuant to subsection 4.09(e)(iii)
1. Class C Monthly Principal $_________
R. Pursuant to subsection 4.09(e)(iv):
1. Amount to be treated as Shared
Principal Collections for other Series $_________
S. Pursuant to subsection 4.09(e)(v):
1. Amount to be paid to the Holder
of the Transferor
C-5
Certificate (Transferor Ownership
Interest greater than Minimum
Transferor Ownership Interest) $_________
2. Amount to be deposited into Excess
Funding Account (Transferor Ownership
Interest not greater than Minimum
Transferor Ownership Interest) $_________
Total of O through S $_____
T. Pursuant to subsection 4.09(f):
1. Amount to be deposited from the
Excess Funding Account into the
Principal Account $_________
U. Pursuant to subsection 4.09(g) (Revolving
Period only):
1. Amount to be distributed to Class A
Certificateholders
(A) Class A Monthly Interest $_________
(B) Class A Additional Interest $_________
(C) Class A Prior Period Interest $_________
2. Amount to be distributed to Class
B Certificateholders
(A) Class B Monthly Interest $_________
(B) Class B Additional Interest $_________
(C) Class B Prior Period Interest $_________
3. Amount to be distributed to
Class C Certificateholders
(A) Class C Monthly Interest $_________
(B) Class C Additional Interest $_________
C-6
(C) Class C Prior Period Interest $_________
V. Pursuant to subsection 4.09(h) (Controlled
or Rapid Authorization Period only):
1. Amount to be distributed to
Class A Certificateholders
(A) Class A Monthly Interest $_________
(B) Class A Additional Interest $_________
(C) Class A Prior Period Interest $_________
(D) Class A Monthly Principal $_________
2. Amount to be distributed to
Class B Certificateholders
(A) Class B Monthly Interest $_________
(B) Class B Additional Interest $_________
(C) Class B Prior Period Interest $_________
(D) Class B Monthly Principal $_________
3. Amount to be distributed to
Class C Certificateholders
(A) Class C Monthly Interest $_________
(B) Class C Additional Interest $_________
(C) Class C Prior Period Interest $_________
(D) Class C Monthly Principal $_________
Pursuant to Section 4.11, the Servicer does hereby instruct the Trustee (i) to
make withdrawals of funds on deposit in the Yield Enhancement Account with
respect to the related Monthly Period in the following amounts and (ii) to apply
the proceeds of such withdrawals in accordance with the specified subsections of
Section 4.11:
C-7
A. Pursuant to subsection 4.11(a):
1. Class A Required Amount $_________
B. Pursuant to subsection 4.11(b):
1. Class B Required Amount $_________
C. Pursuant to subsection 4.11(c):
1. Aggregate unreimbursed Class A
Ownership Interest reductions $_________
D. Pursuant to subsection 4.11(d):
1. Aggregate unreimbursed Class B
Ownership Interest reductions $_________
E. Pursuant to subsection 4.11(e):
1. Class C Required Amount $_________
F. Pursuant to subsection 4.11(f):
1. Aggregate unreimbursed Class C
Ownership Interest reductions $_________
G. Pursuant to subsection 4.11(g):
1. Amount to be paid to Holder of
Transferor Certificate
(Transferor Ownership Interest greater
than Minimum Transferor Ownership
Interest and no Pay Out Event) $_________
2. Amount to be deposited into Excess
Funding Account (Transferor Ownership
Interest not greater than Minimum
Transferor Ownership Interest and no Pay
Out Event) $_________
3. 91 Day Delinquency Amount (to be retained
in Yield Enhancement Account) $_________
4. Other amounts to be retained in Yield
C-8
Enhancement Account (Pay Out Event has
occurred) $_________
III. ACCRUED AND/OR UNPAID AMOUNTS
After giving effect to the withdrawals and transfers to be made in accordance
with this notice and the distributions to be made on the related Distribution
Date pursuant to Section 5.01, the following amounts will be accrued and/or
unpaid as of such Distribution Date:
A. Subsections 4.09(a)(i), (b)(i) and (c)(i):
1. The aggregate Class A Additional Interest $________
2. The aggregate Class B Additional Interest $________
3. The aggregate Class C Additional Interest $________
B. Subsections 4.09(a)(ii), (b)(ii) and (c)(ii):
1. Class A Prior Period Interest $________
2. Class B Prior Period Interest $________
3. Class C Prior Period Interest $________
C. Subsections 4.09(a)(iii), (b)(iii) and (c) (iii):
1. Accrued unpaid Class A Servicing Fee $________
2. Accrued unpaid Class B Servicing Fee $________
3. Accrued unpaid Class C Servicing Fee $________
D. Section 4.10:
1. Aggregate unreimbursed Class A
Charge-Offs and writedowns $________
2. Aggregate unreimbursed Class B
Charge-Offs and writedowns $________
3. Aggregate unreimbursed Class C
Charge-Offs and writedowns $________
C-9
IN WITNESS WHEREOF, the undersigned has duly executed this report this ___ day
of _____________, ____.
A.I. CREDIT CORP.,
AICCO, INC., Servicer
By:____________________________
Name:
Title:
By:________________________
Name:
Title:
C-10
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
A.I. CREDIT CORP., AICCO, INC.
--------------------
AIC PREMIUM FINANCE LOAN MASTER TRUST
--------------------
The undersigned, duly authorized representatives of A.I.
Credit Corp. ("AIC") and AICCO, Inc. ("AICCO"), as Servicers pursuant to the
Amended and Restated Pooling and Servicing Agreement dated as of February [___],
1998 (the "Pooling and Servicing Agreement") by and among A.I. Receivables
Corp., AIC, AICCO and The First National Bank of Chicago, as trustee (the
"Trustee"), do hereby certify that:
1. AIC and AICCO are the sole Servicers under the Pooling and
Servicing Agreement (together, herein referred to as the "Servicer").
2. The undersigned are duly authorized pursuant to the
Pooling and Servicing Agreement to execute and deliver this Certificate
to the Trustee.
3. This Certificate is delivered pursuant to Section 3.05 of
the Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during [the
period from the Initial Closing Date until December 31, 1995] [the
twelve-month period ended December 31 of the calendar year immediately
preceding the year in which this certificate is delivered] and of its
performance under the Pooling and Servicing Agreement, including any
Supplement, was conducted under the supervision of the undersigned.
5. Based on such review, the Servicer has, to the best of the
knowledge of the undersigned, fully performed all its obligations under
the Pooling and Servicing Agreement, including any Supplement,
throughout such period and no default in the performance of such
obligations has occurred or is continuing except as set forth in
paragraph 6 below.
6. The following is a description of each default in the
performance of the Servicer's obligations under the provisions of the
Pooling and Servicing Agreement, including any Supplement, known to the
undersigned to have been made during such period which sets forth in
detail (i) the nature of each such default, (ii) the action taken by
the Servicer, if any, to remedy each such default and (iii) the current
status of each such default:
[If applicable, insert "None."]
C-11
IN WITNESS WHEREOF, the undersigned have duly executed this
certificate this ____ day of _____________, ____.
A.I. Credit Corp.
By:________________________________
Name:
Title:
AICCO, Inc.
By:______________________________
Name:
Title:
C-12
EXHIBIT E
FORM OF REASSIGNMENT OF RECEIVABLES
REASSIGNMENT NO. ______ OF RECEIVABLES, dated as of
____________ ____, by and among A.I. RECEIVABLES CORP. (the "Transferor") and
The First National Bank of Chicago, a banking association organized under the
laws of the United States of America, as trustee (the "Trustee") pursuant to the
Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Transferor and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement, dated as of February
[___], 1998 (hereinafter as such agreement may have been, or may from time to
time be, amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to Section 2.07 of the Pooling and
Servicing Agreement, the Transferor wishes to remove certain Receivables from
the Trust (the "Removed Receivables") and to cause the Trustee to reconvey such
Removed Receivables from the Trust to the Transferor (as each such term is
defined in the Pooling and Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation
and to reconvey the Removed Receivables subject to the terms and conditions
hereof;
NOW, THEREFORE, the Transferor and the Trustee hereby agree
as follows:
1. Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein.
"Removal Date" shall mean, with respect to the Removed
Receivables designated hereby, ___________ __________.
"Removal Notice Date" shall mean, with respect to the Removed
Receivables designated hereby , _____________, _____ (which shall be a date on
or before the fifth Business Day prior to the Removal Date).
2. Designation of Removed Receivables. The Transferor shall
deliver to the Trustee, not later than five Business Days after the Removal
Date, a computer file or microfiche list containing a true and complete list of
each Receivable which as of the Removal Date shall be deemed to be a Removed
Receivable, such Receivables being identified by account number and the
aggregate amount thereof as of the Removal Date. Such list shall be marked as
Schedule 1 to this Reassignment and shall be incorporated into and made a part
of this Reassignment and the Pooling and Servicing Agreement as of the Removal
Date.
3. Conveyance of Receivables. The Trust does hereby reconvey
to the Transferor, without recourse, representation or warranty, on and after
the Removal Date, all right, title and interest of the Trust in and to the
Removed Receivables designated hereby, including all Collections thereon
received by the Trust after the Removal Date therefor.
4. Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants to the Trust as of the Removal Date:
(a) Legal Valid and Binding Obligation. This Reassignment
constitutes a legal, valid and binding obligation of the Transferor enforceable
against the Transferor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(b) Selection Procedures. No selection procedures believed by
the Transferor to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Removed Receivables designated
hereby.
5. Conditions Precedent. The amendment of the Pooling and
Servicing Agreement set forth in Section 6 hereof is subject to the
satisfaction, on or prior to the Removal Date, of each of the conditions set
forth in Section 2.07 of the Pooling and Servicing Agreement.
6. Amendment of the Pooling and Servicing Agreement. The
Pooling and Servicing Agreement is hereby amended to provide that all references
therein to the "Pooling and Servicing Agreement," to "this Agreement," "herein,"
"hereof" and "hereby" shall be deemed from and after the Removal Date to be a
dual reference to the Pooling and Servicing Agreement as supplemented by this
Reassignment. Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions to the Pooling and Servicing
Agreement shall remain unamended and shall continue to be, and shall remain, in
full force and effect in accordance with its terms and except as expressly
provided herein shall not constitute or be deemed to constitute a waiver of
compliance with or a consent to non-compliance with any term or provision of the
Pooling and Servicing Agreement.
7. Counterparts. This Reassignment may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of Which together shall constitute one and
the same instrument.
8. Governing Law. THIS REASSIGNMENT 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.
E-2
IN WITNESS WHEREOF, the undersigned have caused this
Reassignment of Receivables to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
A.I. RECEIVABLES CORP.,
as Transferor
By:_________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO,
as Trustee
By:__________________________________
Name:
Title:
E-3
Schedule 1
to Reassignment
of Receivables
---------------
REMOVED RECEIVABLES
Removed Receivable Removal Date
------------------ ------------
E-4
Schedule 2
to the Reassignment
of Receivables
A.I. RECEIVABLES CORP.
AIC PREMIUM FINANCE LOAN MASTER TRUST
Officer's Certificate
The undersigned, a duly authorized officer of A.I.
Receivables Corp. ("AIR"), hereby certifies and acknowledges on behalf of AIR
that to the best of the knowledge of the undersigned the following statements
are true on ______________, _____, (the "Removal Date"), and acknowledges on
behalf of AIR that this Officer's Certificate will be relied upon by The First
National Bank of Chicago, as trustee (the "Trustee") of the AIC Premium Finance
Loan Master Trust in connection with the Trustee entering into Reassignment No.
_____ of Removed Receivables, dated as of the Removal Date (the "Reassignment"),
by and among AIR and the Trustee, in connection with the Amended and Restated
Pooling and Servicing Agreement, dated as of February [___], 1998, as heretofore
supplemented and amended (the "Pooling and Servicing Agreement"), pursuant to
which AIR, as Transferor, AICCO, Inc. and A.I. Credit Corp., as Original
Transferors and Servicer, and the Trustee are parties. The undersigned hereby
certifies and acknowledges on behalf of AIR that:
(a) Delivery of Reassignment and List of Removed Receivables.
On or prior to the Removal Date, the Transferor has delivered to the Trustee the
Reassignment and within five Business Days after the Removal Date the Transferor
shall deliver to the Trustee a computer file or microfiche list containing a
true and complete list of all Removed Receivables identified by account number
and aggregate amount of such Removed Receivables as of the Removal Date.
(b) Selection Procedures. No selection procedures believed by
the Transferor to be materially adverse to the interests of the
Certificateholders were utilized in selecting the Removed Receivables to be
removed from the Trust.
(c) Consequences of Removal. In the reasonable belief of the
Transferor, the removal of the Removed Receivables on the Removal Date shall
not: (i) cause a Pay Out Event to occur (provided that the Removed Receivables
shall be considered to be removed as of the Removal Date for purposes of this
subclause (i)); (ii) cause the Transferor Ownership Interest to be less than the
Minimum Transferor Ownership Interest on such Removal Date; or (iii) result in
the failure to make any payment specified in any Series Supplement.
(d) Ratings. Each Rating Agency was notified of the proposed
removal of the Removed Receivables on or before the tenth Business Day prior to
the Removal Date and the Transferor has received notice prior to the Removal
Date from each Rating Agency that the proposed
E-5
removal will not result in a downgrade or withdrawal of its current rating of
any outstanding Series of Investor Certificates.
Capitalized terms used herein and not otherwise defined are
used as defined in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day
of ________________, ____.
A.I. RECEIVABLES CORP.,
as Transferor
By:_________________________________
Name:
Title:
E-6
EXHIBIT F
FORM OF RECONVEYANCE OF RECEIVABLES
RECONVEYANCE OF RECEIVABLES, dated as of ____________ ___,
____, by and among A.I. Receivables Corp. (the "Transferor") and The First
National Bank of Chicago, a banking association organized and existing under the
laws of the United States of America (the "Trustee") pursuant to the Pooling and
Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Transferor and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement dated as of February [___],
1998 (hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Transferor wishes to cause the Trustee to reconvey all of the Receivables and
proceeds thereof from the Trust to the Holder of the Transferor Certificate
pursuant to the terms of Section 12.04 of the Pooling and Servicing Agreement
upon termination of the Trust pursuant to Section 12.01 of the Pooling and
Servicing Agreement and after payment of all amounts due under the Pooling and
Servicing Agreement on or prior to such termination and the surrender of the
Transferor Certificate;
WHEREAS, the Trustee is willing to reconvey Receivables
subject to the terms and conditions hereof;
NOW, THEREFORE, the Transferor and the Trustee hereby agree
as follows:
1. Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein.
"Reconveyance Date" shall mean _____________.
2. Return of Lists of Receivables. The Trustee shall deliver
to the Transferor, not later than five Business Days after the Reconveyance
Date, each and every computer file or microfiche list of Receivables delivered
to the Trustee pursuant to the terms of the Pooling and Servicing Agreement.
3. Conveyance of Receivables. (a) The Trustee does hereby
reconvey to the Transferor, without recourse, representation or warranty, on and
after the Reconveyance Date, all right, title and interest of the Trust in and
to each and every Receivable, whether then existing or thereafter created, all
monies due or to become due with respect thereto (including all accrued interest
theretofore posted as Finance Charge Receivables) and all proceeds of such
Receivables, except for amounts, if
any, held by the Trustee or any Paying Agent pursuant to subsection 12.03(b) of
the Pooling and Servicing Agreement.
(b) In connection with such transfer, the Trustee agrees to
execute and deliver to the Transferor, on or prior to the Reconveyance Date,
such UCC termination statements as the Holder of the Transferor Certificate may
reasonably request, evidencing the release by the Trust of its lien on the
Receivables.
4. Counterparts. This Reconveyance may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
5. Governing Law. THIS RECONVEYANCE 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.
F-2
IN WITNESS WHEREOF, the undersigned have caused this
Reconveyance of Receivables to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
A.I. RECEIVABLES CORP.,
as Transferor
By:___________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO,
as Trustee
By:___________________________
Name:
Title:
F-3
EXHIBIT G
FORM OF AIC SUPPORT AGREEMENT
G-1
SCHEDULE 1
LIST OF EXISTING RECEIVABLES
Delivered to Trustee only
[Deemed Incorporated]
EXHIBIT H
FORM OF AIC LETTER AGREEMENT
H-1
EXHIBIT I
FORM OF AIR SUPPORT AGREEMENT
I-1
EXHIBIT J
FORM OF AIR LETTER AGREEMENT
J-1
