<PAGE>
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of l934
Date of Report (Date of earliest event reported)______________________________
November 12, 1998
______________________________________________________________________________
FCC National Bank on behalf of First Chicago Master Trust II
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(Exact name of registrant as specified in its charters)
United States of America 0-16337 51-0269396
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Gateway Center, 300 King Street, Wilmington, Delaware 19801
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 302-656-5020
<PAGE>
Item 5. Other Events.
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On November 12, 1998, the closing of the sale of First Chicago Master Trust II
$1,000,000,000 Floating Rate Asset Backed Certificates Series 1998-V (the
"Series 1998-V Certificates") pursuant to the Underwriting Agreement, dated
November 3, 1998, and the Terms Agreement dated November 3, 1998, both between
FCC National Bank (the "Bank") and Morgan Stanley & Co. Incorporated, as
representative of the several underwriters named therein, occurred. The
Certificates were issued pursuant to the Series 1998-V Supplement, dated as of
November 1, 1998 (the "Series 1998-V Supplement"), between the Bank, as seller
and servicer, and Norwest Bank Minnesota, National Association, as trustee (the
"Trustee"), to the Pooling and Servicing Agreement, dated as of June 1, 1990,
(as amended, the "Pooling and Servicing Agreement"), between the Bank and the
Trustee.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits
The exhibits listed below and attached hereto are hereby filed in
connection with the Registrant's Registration Statement on Form S-3 (File No.
333-49625).
Exhibit Number Description of Exhibit
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1.2 Underwriting Agreement
4.28 Series 1998-V Supplement to Pooling and
Servicing Agreement relating to the
Series 1998-V Certificates.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FCC NATIONAL BANK
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(Registrant)
Date: November 20, 1998 By /s/ Sharon A. Renchof
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Title: Assistant Secretary
<PAGE>
INDEX TO EXHIBITS
Exhibit Description of Sequential Page
Number Exhibit Number
- -------- ----------------- ------------------
1.2 Underwriting Agreement
4.28 Series 1998-V Supplement
to Pooling and Servicing
Agreement relating to the
Series 1998-V Certificates
<PAGE>
Exhibit 1.2
First Chicago Master Trust II
FCC NATIONAL BANK
(Seller and Servicer)
UNDERWRITING AGREEMENT
(Standard Terms)
November 3, 1998
MORGAN STANLEY & CO. INCORPORATED
As Underwriter or as a Representative
of the Underwriters named in the
within referenced Terms Agreement
1585 Broadway
New York, New York 10036
Dear Sirs:
1. Introductory. FCC National Bank, a national banking association
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(the "Bank") proposes to sell one or more Series of Investor Certificates to be
issued by the First Chicago Master Trust II (the "Certificates"). The
Certificates are to be issued pursuant to a Pooling and Servicing Agreement
between the Bank, as Seller and Servicer, and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"), dated as of June 1, 1990 (as amended or
otherwise modified from time to time, the "Pooling and Servicing Agreement"), as
supplemented by a supplement between the Bank, as Seller and Servicer, and the
Trustee, (the "Supplement") to the Pooling and Servicing Agreement, relating to
the applicable Series of Certificates (references to the Pooling and Servicing
Agreement herein may, as the context requires, include all supplements,
including the Supplement, to the Pooling and Servicing Agreement). The
Certificates may be sold in a public offering by the Bank through Morgan Stanley
& Co. Incorporated ("Morgan Stanley"), as sole underwriter, or through certain
underwriters which include Morgan Stanley, one or more of which may act as
representative of such underwriters (any underwriter through which Certificates
are sold shall be referred to herein as an "Underwriter" or, collectively, all
such Underwriters may be referred to as the "Underwriters"; any representatives
thereof may be referred to herein as a "Representative," which, if the context
herein does require, shall include Morgan Stanley in its capacity as sole
Underwriter of any Series, or the "Representa-
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MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 2
tives"). Certificates of any Series shall be sold pursuant to a Terms Agreement
by and between the Bank and the Representatives, a form of which is attached
hereto as Exhibit A (a "Terms Agreement"), which incorporates by reference this
Underwriting Agreement (the "Agreement," which may include the applicable Terms
Agreement if the context requires). Any Series of Certificates sold pursuant to
any Terms Agreement may include the benefits of a collateral interest, cash
collateral account, letter of credit, guaranteed rate agreement, maturity
guaranty facility, tax protection agreement, interest rate or currency swap or
other contract or agreement for the benefit of the Certificateholders of such
Series (an "Enhancement"). With respect to any such Enhancement, the Bank shall
enter into an agreement or contract (the "Enhancement Agreement") by and between
the Bank and the provider of the Enhancement (the "Enhancement Provider"). Each
Certificate will represent an undivided interest in the First Chicago Master
Trust II (the "Trust"). The assets of the Trust will include, among other
things, certain amounts due on a pool of MasterCard(R) and VISA(R) credit card
accounts (the "Receivables") and, with respect to any such Series sold pursuant
to this Agreement, the benefits of an Enhancement. To the extent not defined
herein, capitalized terms used herein have the meanings assigned in the Pooling
and Servicing Agreement.
Upon the execution of any Terms Agreement, the Bank agrees with the
Underwriters as follows:
2. Representations and Warranties of the Bank. The Bank represents
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and warrants to, and agrees with, the Underwriters that:
(i) A registration statement on Form S-3 (having the
registration number stated in the applicable Terms Agreement), including a
prospectus and such amendments thereto as may have been required to the
date of execution of such Terms Agreement, relating to the Certificates and
the offering thereof from time to time in accordance with Rule 415 under
the Securities Act of 1933, as amended (the "Act"), has been filed with the
Securities and Exchange Commission (the "Commission"), (which may have
included one or more preliminary prospectuses and prospectus supplements
(each, a "Prelimi-
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MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 3
nary Prospectus") meeting the requirements of Rule 430 of the Act), and
such registration statement, as amended, has become effective; such
registration statement, as amended, and the prospectus relating to the sale
of the Certificates offered thereby by the Bank constituting a part
thereof, as from time to time amended or supplemented (including any
prospectus filed with the Commission pursuant to Rule 424(b) of the rules
and regulations of the Commission (the "Rules and Regulations") under the
Act), are respectively referred to herein as the "Registration Statement"
and the "Prospectus"; provided, however, that a supplement to the
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Prospectus prepared pursuant to Section 5(a) hereof (each, a "Prospectus
Supplement") shall be deemed to have supplemented the Prospectus only with
respect to the offering of the Certificates to which it relates. The
conditions to the use of a registration statement on Form S-3 under the
Act, as set forth in the General Instructions to Form S-3, and the
conditions of Rule 415 under the Act, have been satisfied with respect to
the Registration Statement.
(ii) as of the date of execution of the related Terms Agreement,
the Registration Statement and the Prospectus, except with respect to any
modification to which Representatives have agreed in writing, shall be in
all substantive respects in the form furnished to the Underwriters prior to
such date or, to the extent not completed on such date, shall contain only
such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus or, if applicable, Series
Term Sheet (as defined below) that has previously been furnished to you) as
the Bank has advised Representatives, prior to such time, will be included
or made therein.
(iii) on the effective date of the Registration Statement, the
Registration Statement and the Prospectus complied in all material respects
with the applicable requirements of the Act and the Rules and Regulations,
and did not include any untrue statement of a material fact or, in the case
of the Registration Statement, omit to state any material fact required to
be stated therein or necessary
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MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 4
to make the statements therein not misleading and, in the case of the
Prospectus, omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and on the date of each Terms Agreement and on each
Closing Date (as defined below), the Registration Statement, the Prospectus
and any Series Term Sheet will comply in all material respects with the
applicable requirements of the Act and the Rules and Regulations, and none
of such documents included or will include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the foregoing does not apply to
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information contained in or omitted from any of such documents based upon
written information furnished to the Bank by any Underwriter relating to
such Underwriter specifically for use in connection with the preparation of
the Registration Statement, the Prospectus or such Series Term Sheet.
(iv) As of the Closing Date of the applicable Series of
Certificates, the representations and warranties of the Bank in the Pooling
and Servicing Agreement will be true and correct.
(v) The Bank is an association duly organized, validly existing
and in good standing as a licensed national banking association under the
laws of the United States, and has all requisite power and authority to own
its properties and conduct in all material respects its business as
presently conducted and to execute, deliver and perform this Agreement and
the applicable Terms Agreement, to authorize the issuance of the
Certificates and to consummate the transactions contemplated hereby.
(vi) The execution, delivery and performance by the Bank of this
Agreement, the applicable Terms Agreement, the Pooling and Servicing
Agreement, any Enhancement Agreement, the issuance of the Certificates and
the consummation of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary action or proceedings.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 5
(vii) This Agreement and the applicable Terms Agreement have
been duly executed and delivered by the Bank.
(viii) The information, other than projections based upon
historical data, provided to you by the Bank in connection with this
Agreement and the sale of the Certificates and described on Schedule II
attached to the applicable Terms Agreement when taken collectively, did
not, as of the date such information was provided, or as of the effective
date of the Registration Statement, or as of the date of the Prospectus, as
the case may be, and does not as of the date hereof, contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein not misleading.
(ix) The Bank has authorized the conveyance of the Receivables
to the Trust, and the Bank has authorized the Trust to issue the
Certificates.
(x) The Bank has delivered to you complete and correct copies of
(i) the December 31, 1996 and 1997 audited consolidated balance sheets of
First Chicago NBD Corporation (the predecessor of the parent of the Bank);
(ii) publicly available portions of the Consolidated Report of Condition
and Income of the Bank for the years ended December 31, 1996, and 1997 as
submitted to the Comptroller of the Currency; (iii) publicly available
portions of the Consolidated Report of Condition and Income of the Bank for
the period ended June 30, 1998 as submitted to the Comptroller of the
Currency and (iv) such other similar items, if any, identified in the Terms
Agreement. Except as set forth in or contemplated in the Registration
Statement and the Prospectus, there has been no material adverse change in
the condition (financial or otherwise) of the Bank since December 31, 1997.
(xi) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance of this Agreement,
the applicable Terms Agreement, the Pooling and Servic-
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 6
ing Agreement, any Enhancement Agreement and the Certificates shall have
been paid or will be paid by the Bank at or prior to the Closing Date.
(xii) The Certificates have been duly and validly authorized,
and, when validly authenticated, issued and delivered in accordance with
the Pooling and Servicing Agreement and sold to the Underwriters as
provided herein and in the applicable Terms Agreement, will conform in all
material respects to the description thereof contained in the Prospectus
and will be validly issued and outstanding and entitled to the benefits of
the Pooling and Servicing Agreement.
3. Purchase, Sale, Payment and Delivery of Certificates. Delivery of
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and payment for the Certificates to which this Agreement applies will be made at
the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New
York, New York 10022, or such other offices specified in the applicable Terms
Agreement, at such time as shall be specified in the applicable Terms Agreement,
or at such other time thereafter or other place as the Representatives and the
Bank shall agree upon, each such time being herein referred to as a "Closing
Date." Delivery of such Certificates shall be made by the Bank to the
Underwriters against payment of the purchase price specified in the applicable
Terms Agreement in same day funds wired to such bank as may be designated by the
Bank, or by such other manner of payment as may be agreed upon by the Bank and
you. Unless otherwise provided in the applicable Terms Agreement, payment for
the Certificates shall be made against delivery through the facilities of The
Depository Trust Company ("DTC") of Book-Entry Certificates to you for the
respective accounts of the several Underwriters. Unless otherwise provided in a
Terms Agreement, the Certificates so to be delivered shall be global
certificates registered in the name of Cede & Co., as nominee for DTC. The
number and denomination of definitive certificates so delivered shall be as
specified by DTC. The definitive certificates for the Certificates will be made
available for inspection and packaging by the Underwriters at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, or such other offices specified in the
applicable Terms
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 7
Agreement, not later than 1:00 P.M., New York City time, on the Business Day
prior to the Closing Date.
4. Offering by Underwriters. (a) It is understood that the several
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Underwriters propose to offer the Certificates subject to this Agreement for
sale to the public (which may include selected dealers) as set forth in the
Prospectus.
(b) Each Underwriter may provide to prospective investors a Series
Term Sheet relating to the Certificates prepared by the Bank (the "Series Term
Sheet"), which shall be attached to the applicable Terms Agreements subject to
the following conditions:
(i) Such Underwriter shall have complied with the requirements of
the no-action letter, dated May 20, 1994, issued by the Commission to
Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co.
Incorporated and Kidder Structured Asset Corporation, as made applicable to
other issuers and underwriters by the Commission in the response to the
request of the Public Securities Association, dated May 24, 1994
(collectively, the "Kidder/PSA Letter"), the requirements of the no-action
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letter, dated February 17, 1995, issued by the Commission to the Public
Securities Association (the "PSA Letter") and the requirements of the no-
----------
action letter, dated April 5, 1996, issued by the Commission to Greenwood
Trust Company (the "Greenwood Letter" and together with the Kidder/PSA
----------------
Letter and the PSA Letter, the "No-Action Letters").
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(ii) Each Underwriter, severally, represents and warrants to the
Bank that (a) it has not and will not use any information that constitutes
"Computational Materials" with respect to the offering of the Certificates
unless it has obtained the prior written consent of the Bank to such usage
and (b) other than the Series Term Sheet, it has not and will not use any
information that constitutes "ABS Term Sheets," "Structural Term Sheets,"
or "Collateral Term Sheets" with respect to the offering of the
Certificates. For purposes hereof, "Computational Materials" shall have
-----------------------
the meaning given such term in the No-Action Letters. For purposes hereof,
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 8
"ABS Term Sheets," "Structural Term Sheets" and "Collateral Term Sheets"
--------------- ---------------------- ----------------------
shall have the meanings given such terms in the PSA Letter.
5. Certain Agreements of the Bank. The Bank agrees with the
------------------------------
Underwriters that:
(a) Immediately following the execution of each Terms Agreement, the
Bank will prepare a Prospectus Supplement setting forth the amount of
Certificates covered thereby and the terms thereof not otherwise specified in
the Prospectus, the price at which such Certificates are to be purchased by the
Underwriters from the Bank, either the initial public offering price or the
method by which the price at which such Certificates are to be sold will be
determined, the selling concessions and allowances, if any, and such other
information as the Bank deems appropriate in connection with the offering of
such Certificates, but the Bank will not file any amendments to the Registration
Statement as in effect with respect to the Certificates, or any amendments or
supplements to the Prospectus, unless it shall first have delivered copies of
such amendments or supplements to the Underwriters. The Bank will not file any
amendment to the Registration Statement or supplement to the Prospectus to which
the Representatives reasonably object. The Bank will use its best efforts to
transmit the Prospectus including such Prospectus Supplement to the Commission
pursuant to Rule 424(b) under the Act by a means reasonably calculated to result
in filing with the Commission pursuant to Rule 424(b) under the Act. The Bank
will advise the Representatives promptly of any such filing. The Bank will
immediately advise you and your counsel (i) when notice is received from the
Commission that any post-effective amendment to the Registration Statement has
become or will become effective and (ii) of any order or communication
suspending or preventing, or threatening to suspend or prevent, the offer and
sale of the Certificates or of any proceedings or examinations that may lead to
such an order or communication, whether by or of the Commission or any authority
administering any state securities or Blue Sky law, as soon as practicable after
the Bank is advised thereof, and will use every reasonable effort both to
prevent the issuance of any such order or communication and to obtain as soon as
possible its lifting, if issued.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 9
(b) If, at any time when a prospectus relating to the Certificates is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Act, the Bank promptly will prepare and file with the
Commission (subject to your prior review pursuant to paragraph (a) of this
Section 5) an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance.
(c) As soon as practicable, after the Closing Date, the Bank will
cause the Trust to make generally available to the Certificateholders an
earnings statement or statements of the Trust covering a period of at least 12
months beginning after the effective date of the Registration Statement which
will satisfy the provisions of Section 11(a) and Rule 158 of the Act.
(d) The Bank will furnish to you copies of the Registration Statement
(three of which will include all exhibits), each related Preliminary Prospectus,
any Series Term Sheet, the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as you
reasonably request. The Bank will pay the expenses of printing or other
production of all documents relating to the offering.
(e) The Bank will pay all expenses incidental to the performance of
its obligations under this Agreement, including without limitation (i) expenses
of preparing, printing and reproducing the Registration Statement, any Series
Term Sheet, the Prospectus, this Agreement, the Pooling and Servicing Agreement,
any Enhancement, any Enhancement Agreement and the Certificates, (ii) any fees
charged by any rating agency for the rating of the Certificates, (iii) any
expenses (including reasonable fees and disbursements of counsel) incurred by
you in connection with qualification of the Certificates for sale under the laws
of such jurisdictions as you designate, (iv) reasonable fees and expenses of
Skadden,
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 10
Arps, Slate, Meagher & Flom LLP in its role as special counsel for the Bank, (v)
any expenses incurred by you in connection with listing the Certificates on the
Luxembourg Stock Exchange and (vi) the cost of delivering the Certificates to
the offices of the Underwriters, insured to the satisfaction of the Underwriters
(it being understood that, except as provided in this subsection (e) and in
Section 8 hereof, the Underwriters will pay their own expenses, including the
expense of preparing, printing and reproducing any agreement among underwriters,
the fees and expenses of Skadden, Arps, Slate, Meagher & Flom in its role as
special counsel for the Underwriters, any transfer taxes on resale of any of the
Certificates by them and advertising expenses connected with any offers that the
Underwriters may make).
(f) The Bank will arrange for the qualification of the Certificates
for sale and the determination of their eligibility for investment under the
laws of such jurisdictions as you designate and will continue such
qualifications in effect so long as required for the distribution of the
Certificates; provided, however, that the Bank shall not be obligated to qualify
to do business in any jurisdiction in which it is not currently so qualified.
(g) For a period from the date of this Agreement until the retirement
of the Certificates, (i) the Bank, as Servicer, will furnish to you copies of
each certificate and the annual statements of compliance delivered to the
Trustee pursuant to Article III of the Pooling and Servicing Agreement and the
annual independent certified public accountant's servicing reports furnished to
the Trustee pursuant to Article III of the Pooling and Servicing Agreement, by
first-class mail as soon as practicable after such statements and reports are
furnished to the Trustee and (ii) on each Determination Date or as soon
thereafter as practicable, the Bank, as Servicer, shall give notice to you by
telex or telecopy in substantially the form of the Certificateholder's Statement
attached to Exhibit D to the Pooling and Servicing Agreement.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 11
(h) So long as any of the Certificates are outstanding, the Bank will
furnish to you by firstclass mail as soon as practicable, all documents (A)
distributed, or caused to be distributed, by the Bank to Certificateholders, (B)
filed, or caused to be filed, by the Bank with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), any order of
the Commission thereunder or pursuant to a "no-action" letter from the staff of
the Commission and (C) from time to time, such other information in the
possession of the Bank concerning the Trust as you may reasonably request it
being understood that the Bank has no obligation hereunder to furnish you any
information which the Bank deems proprietary or confidential.
(i) Whether or not the transactions contemplated by this Agreement and
the Terms Agreement are consummated or this Agreement and the Terms Agreement
are terminated for any reason, the Bank will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse the
Underwriters for any reasonable expenses (including fees and disbursements of
counsel) incurred by them in connection with qualification of the Certificates
for sale and determination of their eligibility for investment under the laws of
such jurisdictions as you designate and the printing of memoranda relating
thereto, for any fees charged by investment rating agencies for the rating of
the Certificates, for any filing fee of the National Association of Securities
Dealers, Inc. relating to the Certificates, and for expenses incurred in
distributing preliminary prospectuses, any Series Term Sheet and the Prospectus
(including any amendments and supplements thereto).
(j) To the extent, if any, that the rating provided with respect to
the Certificates by the rating agency or agencies specified in the applicable
Terms Agreement is conditional upon the furnishing of documents or the taking of
any other action by the Bank agreed upon on or prior to the Closing Date, the
Bank shall furnish such documents and take such other action.
(k) The Bank will file with the Commission a report on Form 8-K
setting forth all Series Term Sheets prepared by the Bank within the time period
allotted for such filing pursuant to the No-Action Letters.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 12
6. Conditions of the Obligations of the Underwriters. The
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obligations of the Underwriters to purchase and pay for the Certificates will be
subject to the accuracy of the representations and warranties on the part of the
Bank herein, to the accuracy of the statements of officers of the Bank made
pursuant to the provisions hereof, to the performance by the Bank of its
obligations hereunder and under the applicable Terms Agreement and to the
following additional conditions precedent:
(a) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this Agreement;
and, prior to the Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Bank or you,
shall be contemplated by the Commission.
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Bank, BANK ONE CORPORATION or any Enhancement Provider which, in the
judgment of the Underwriters, materially impairs the investment quality of the
Certificates; (ii) any downgrading in the rating of the debt securities of the
Bank, BANK ONE CORPORATION or any Enhancement Provider by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act); (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Bank, BANK ONE CORPORATION or any Enhancement Provider on any
exchange or in the over-the-counter market; (iv) any banking moratorium declared
by Federal, Illinois or Delaware authorities; or (v) any outbreak or escalation
of major hostilities in which the United States is involved, any declaration of
war by Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Underwriters, the
effect of any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 13
with completion of the sale of and payment for the Certificates.
(c) The Representatives shall have received from Sherman I. Goldberg,
Esq., General Counsel and Secretary of BANK ONE CORPORATION, as counsel for the
Bank, a favorable opinion with respect to clauses (i) through (xii) of this
paragraph (c), and from Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to the Bank, a favorable opinion with respect to clause (xiii) of this
paragraph (c), each opinion dated the Closing Date and satisfactory in form and
substance to you and your counsel (provided that the applicable Terms Agreement
may set forth the names of other counsel who shall deliver such opinions), to
the effect that:
(i) the Bank has been duly organized as an association licensed
as a national banking association and is validly existing and in good
standing under the laws of the United States, is duly qualified to do
business and is in good standing under the laws of each jurisdiction which
requires such qualification wherein it owns or leases material properties
or conducts material business, and has full power and authority to own its
properties, to conduct its business as described in the Registration
Statement and the Prospectus, to enter into and perform its obligations
under this Agreement, the applicable Terms Agreement, the Pooling and
Servicing Agreement and the Supplement, to execute the Certificates and to
consummate the transactions contemplated hereby and thereby;
(ii) the Pooling and Servicing Agreement and the Supplement have
been duly authorized, executed and delivered by the Bank and constitute the
legal, valid and binding agreements of the Bank, enforceable against the
Bank in accordance with their terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium
and other laws affecting creditors' rights generally from time to time in
effect and the rights of creditors of national banks under United States
laws and except as such enforceability may be limited by general principles
of
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 14
equity, whether considered in a proceeding at law or in equity);
(iii) the applicable Terms Agreement, incorporating by reference
this Agreement, has been duly authorized, executed and delivered by the
Bank;
(iv) the Certificates have been duly authorized and, when
executed and authenticated in accordance with the terms of the Pooling and
Servicing Agreement and the Supplement, and delivered to and paid for by
you pursuant to the applicable Terms Agreement, will be validly issued and
outstanding, enforceable in accordance with their terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights generally
from time to time in effect and the rights of creditors of national banks
under United States law and except as such enforceability may be limited by
general principles of equity, whether considered in a proceeding at law or
in equity) and will be entitled to the benefits of the Pooling and
Servicing Agreement and the Supplement;
(v) neither the execution nor the delivery of this Agreement,
the applicable Terms Agreement, the Supplement, the Pooling and Servicing
Agreement or the Enhancement Agreement, if any, nor the issuance or
delivery of the Certificates, nor the consummation of any of the
transactions contemplated herein or therein, nor the fulfillment of the
terms of the Certificates, this Agreement, the applicable Terms Agreement,
the Supplement, the Pooling and Servicing Agreement or the Enhancement
Agreement, if any, will conflict with or violate, result in a material
breach of or constitute a default under any term or provision of the
articles of association or by-laws of the Bank, any statute currently
applicable to the Bank or the Trust or any order or regulation known to
such counsel to be currently applicable to the Bank or the Trust of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Bank or the Trust, as the case may be, or the terms
of
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 15
any indenture or other agreement or instrument known to such counsel to
which the Bank or the Trust is a party or by which either of them or any of
their properties is bound;
(vi) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator with respect to the Trust, the
Certificates, the Pooling and Servicing Agreement, the Supplement, the
Enhancement, if any, the Enhancement Agreement, if any, or any of the
transactions contemplated herein or therein or with respect to the Bank
which, in the case of any such action, suit or proceeding with respect to
the Bank, if adversely determined, would have a material adverse effect on
the Certificateholders or the Trust or upon the ability of the Bank to
perform its obligations under the Pooling and Servicing Agreement and the
Supplement, and there is no material contract, franchise or document
relating to the Trust or property conveyed to the Trust which is not
disclosed in the Registration Statement or Prospectus; and the statements
included in the Registration Statement and Prospectus describing statutes,
legal proceedings, contracts and other documents fairly summarize the
matters therein described;
(vii) the Registration Statement has become effective under the
Act; any required filing of the Prospectus or any supplement thereto
pursuant to Rule 424(b) under the Act has been made in the manner and
within the time period required by Rule 424(b) under the Act; any required
filing of the Series Term Sheet under the Exchange Act has been made in the
manner and within the time period required by the Exchange Act; to the best
knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued, no proceedings for that purpose
have been instituted or threatened; the Registration Statement, the
Prospectus and any Series Term Sheet (and any supplements thereto) (other
than financial and statistical information contained therein as to which
such counsel need express no opinion) comply
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 16
as to form in all material respects with the applicable requirements of the
Act and the rules thereunder; and such counsel has no reason to believe
that at the effective date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus includes any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading (other than as to the Registration Statement and the
Prospectus, the information set forth under the caption relating to the
Enhancement or the Enhancement Provider and the financial and statistical
information contained therein as to which such counsel need express no
opinion);
(viii) no approval, authorization, consent, order, registration,
filing, qualification, license or permit of or with any court or
governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the Blue Sky laws of any
jurisdiction in connection with the purchase and distribution of the
Certificates by the Underwriters and such filings or other approvals
(specified in such opinion) as have been made or obtained;
(ix) the Bank is the sole owner of all right, title and interest
in, and has good and marketable title to, free and clear of any liens,
security interests or encumbrances other than as permitted by Section
2.08(b) of the Pooling and Servicing Agreement, the Accounts and the
Receivables prior to the assignment of the Receivables to the Trust. The
assignment of the Receivables, all documents and instruments relating
thereto and all proceeds thereof to the Trustee, pursuant to the Pooling
and Servicing Agreement and the Supplement, vests in the Trustee all
interests which are purported to be conveyed thereby, free and clear of any
liens, security interests or encumbrances except as
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 17
specifically permitted pursuant to the Pooling and Servicing Agreement and
the Supplement.
(x) the Certificates, this Agreement, the Enhancement, if any,
the Pooling and Servicing Agreement and the Supplement conform in all
material respects to the descriptions thereof contained in the Registration
Statement and the Prospectus;
(xi) the Pooling and Servicing Agreement and the Supplement will
not be required to be qualified under the Trust Indenture Act of 1939, as
amended. The Trust is not now, and immediately following the sale of the
Certificates to the Underwriters will not be, required to be registered
under the Investment Company Act of 1940, as amended;
(xii) the statements in the Registration Statement and the
Prospectus under the heading "Certain Legal Aspects of the Receivables," to
the extent that they constitute statements of matters of law or legal
conclusions with respect thereto, have been prepared or reviewed by such
counsel and are correct in all material respects; and
(xiii) the statements in the Registration Statement and the
Prospectus under the headings "Tax Matters" and "ERISA Considerations," to
the extent that they constitute statements of matters of law or legal
conclusions with respect thereto, have been prepared or reviewed by such
counsel and are correct in all material respects.
In rendering such opinion counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Illinois and the
United States, to the extent deemed proper and stated in such opinion, upon the
opinion of other counsel of good standing believed by such counsel to be
reliable and acceptable to you and your counsel, and (B) as to matters of fact,
to the extent deemed proper and as stated therein, on certificates of
responsible officers of the Trust, the Bank and public officials. References to
the Prospectus in this paragraph (c) include any supplements thereto.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 18
(d) At the time of the execution of each Terms Agreement by the
parties hereto and at the Closing Date, Arthur Andersen LLP (or such other
independent accountants as shall be named in the applicable Terms Agreement)
shall have furnished to the Representatives a letter or letters, dated
respectively as of the date of such Terms Agreement and as of the Closing Date,
in form and substance satisfactory to the Representatives and counsel for the
Underwriters, confirming that they are certified independent public accountants
within the meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating in effect that they have
performed certain specified procedures as a result of which they determined that
certain information of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information derived from the
general accounting records of the Trust and the Bank) set forth in the
Registration Statement, the Series Term Sheet and the Prospectus (and any
supplement thereto), including the information set forth under the captions
"Prospectus Summary," "The Bank's Credit Card Portfolio," "The Accounts," "The
Seller," and "Maturity and Principal Payment Considerations" in the Prospectus,
agrees with the accounting records of the Trust and the Bank, excluding any
questions of legal interpretation.
(e) The Representatives shall have received from Arthur Andersen LLP
(or such other independent accountants as shall be named in the applicable Terms
Agreement), certified independent public accountants for the Bank, a letter or
letters, dated respectively as of the date of each Terms Agreement and as of the
Closing Date, satisfactory in form and substance to the Representatives and
counsel for the Underwriters, to the effect that they have performed certain
specified procedures as a result of which they have determined that the
information contained in the computer tape of the Accounts made available to
them by the Bank is correct or agrees with the Accounts and the accounting
records of the Trust and the Bank.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 19
(f) The Representatives shall receive evidence satisfactory to them
that, on or before the Closing Date, UCC-1 financing statements have been or are
being filed in the offices of the Secretaries of State of Illinois, New York and
Delaware, and in the offices of the Nassau County, New York, recorder reflecting
the interest of the Trust in the receivables and the proceeds thereof.
(g) The Representatives shall have received an opinion or opinions of
Skadden, Arps, Slate, Meagher & Flom LLP (or such other counsel as may be named
in the applicable Terms Agreement), special counsel for the Bank, with respect
to certain matters relating to the transfer of the Receivables to the Trust,
with respect to the perfection of the Trust's interest in the Receivables, with
respect to the applicability of certain provisions of the National Bank Act and
with respect to other related matters in a form previously approved by the
Representatives and their counsel.
(h) The Representatives shall have received an opinion from Skadden,
Arps, Slate, Meagher & Flom LLP (or such other counsel as may be named in the
applicable Terms Agreement), special counsel to the Bank, with respect to the
Federal, Illinois and Delaware income tax and New York income and corporate
franchise tax treatment of the Certificates in form and substance satisfactory
to the Underwriters.
(i) The Representatives shall have received from Skadden, Arps, Slate,
Meagher & Flom LLP (or such other counsel as may be named in the applicable
Terms Agreement), counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the organization of the Bank, the validity of
the Certificates, the Registration Statement, the Series Term Sheet, the
Prospectus and other related matters as you may require, and the Bank shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 20
(j) The Representatives shall have received a certificate, dated the
Closing Date, of a Vice-President or more senior officer of the Bank in which
such officer, to the best of his or her knowledge after reasonable
investigation, shall state that the representations and warranties of the Bank
in this Agreement are true and correct in all material respects on and as of the
Closing Date, that the Bank has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder and under the
applicable Terms Agreement at or prior to the Closing Date, that the
representations and warranties of the Bank in the Supplement and the Pooling and
Servicing Agreement are true and correct as of the dates specified in the
Supplement and in the Pooling and Servicing Agreement, that no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are threatened by the
Commission and that, subsequent to the date of the most recent financial
statement, delivered to you pursuant to Section 2(ix) hereof, there has been no
material adverse change in the financial position or results of operation of
BANK ONE CORPORATION or the Bank or of the Bank's credit card business except as
set forth in or contemplated by the Prospectus; provided, however, that any
certification involving BANK ONE CORPORATION may be given by a Vice President or
more senior officer of BANK ONE CORPORATION.
(k) You shall have received an opinion of in-house counsel of Norwest
Bank Minnesota, National Association (or such other counsel as may be named in
the applicable Terms Agreement), as counsel for the Trustee, addressed to the
Representatives and the Bank, dated the Closing Date and satisfactory in form
and substance to you and your counsel to the effect that:
(i) the Trustee has been duly organized and is validly existing
as a national banking association in good standing under the laws of the
United States of America;
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 21
(ii) the Trustee has the corporate power and authority to enter
into and perform its obligations under the Supplement, the Pooling and
Servicing Agreement and (if applicable) the Enhancement Agreement and has
duly authorized, executed and delivered the Supplement, the Pooling and
Servicing Agreement and (if applicable) the Enhancement Agreement, and the
Supplement, the Pooling and Servicing Agreement and (if applicable) the
Enhancement Agreement constitute the legal, valid and binding agreements of
the Trustee, enforceable in accordance with their terms, except (y) the
enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership, or other similar
laws now or hereafter in effect relating to creditors' rights generally and
(z) except as enforcement thereof may be subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law) as well as concepts of reasonableness, good faith and
fair dealing;
(iii) the Certificates have been duly authenticated by the
Trustee;
(iv) the execution and delivery of the Supplement, the Pooling
and Servicing Agreement and (if applicable) the Enhancement Agreement and
the performance by the Trustee of their terms do not conflict with or
result in a violation of (A) any United States of America or state law or
regulation governing the banking or trust powers of the Trustee, or (B) the
articles of association or by-laws of the Trustee; and
(v) no approval, authorization or other action by, or filing
with, any governmental authority of the United States of America having
jurisdiction over the banking or trust powers of the Trustee is required in
connection with its execution and delivery of the Supplement, the Pooling
and Servicing Agreement and (if applicable) the Enhancement Agreement or
the performance by the Trustee of their terms.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 22
(l) You shall have received an opinion of the counsel to the
Enhancement Provider, if any, addressed to the Representatives and the Bank,
dated the Closing Date and satisfactory in form and substance to the
Representatives and their counsel to the effect that:
(i) the Enhancement Provider is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization, is duly qualified to do business in all jurisdictions where
the nature of its operations as contemplated in the Enhancement Agreement
requires such qualification, and has the power and authority (corporate and
other) to issue the Enhancement and to perform its obligations under the
Enhancement and the applicable Enhancement Agreement;
(ii) the Enhancement and the applicable Enhancement Agreement
have each been duly authorized, executed and delivered by the Enhancement
Provider, and each constitutes the legal, valid and binding obligation of
the Enhancement Provider, enforceable in accordance with its terms, except
to the extent that the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, conservatorship, moratorium or other similar
laws now or hereafter in effect relating to creditors, rights as such laws
would apply in the event of the insolvency, liquidation or reorganization
or other similar occurrence with respect to the Enhancement Provider or in
the event of any moratorium or similar occurrence affecting the Enhancement
Provider;
(iii) the execution, delivery and performance by the Enhancement
Provider of the Enhancement Agreement and the Enhancement have been duly
authorized by all necessary corporate action on the part of the Enhancement
Provider, and under present law do not and will not contravene any law or
governmental regulation or order presently binding on the Enhancement
Provider or the charter or the by-laws of the Enhancement Provider or
contravene any provision of or constitute a default under any indenture,
contract or other instrument to which the Enhancement Provider is a party
or by which the Enhancement Provider is bound; and
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 23
(iv) the execution, delivery and performance by the Enhancement
Provider of the Enhancement Agreement and the Enhancement do not require
the consent or approval of, the giving of notice to, the registration with,
or the taking of any other action in respect of any Federal, state or other
governmental agency or authority which has not previously been effected.
(m) [Reserved]
(n) The Enhancement Agreement shall have been duly authorized,
executed and delivered, the Enhancement shall have been duly authorized,
executed, issued and delivered by the Enhancement Provider, all fees due and
payable to the Enhancement Provider as of the Closing Date shall have been paid
in full at or prior to the Closing Date and the Enhancement shall conform in all
material respects to the description thereof in the Registration Statement and
the Prospectus.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been any change, or any development involving a prospective change, in or
affecting the business or properties of the Trust or the Bank the effect of
which, in any case referred to above, is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or the delivery of the Certificates as
contemplated by the Registration Statement and the Prospectus.
(p) All proceedings in connection with the transactions contemplated
by this Agreement and all documents incident hereto shall be satisfactory in
form and substance to the Representatives and counsel for the Underwriters, and
the Representatives and counsel for the Underwriters shall have received such
information, certificates and documents as the Representatives or counsel for
the Underwriters may reasonably request.
(q) You shall have received evidence satisfactory to you that the
Certificates shall be rated in accordance with the applicable Terms Agreement by
the rating agency or agencies specified therein.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 24
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all your obligations hereunder may be cancelled at, or at any time
prior to, the Closing Date by you. Notice of such cancellation shall be given
to the Trust and the Bank in writing or by telephone or telegraph confirmed in
writing. The Bank will furnish, or cause to be furnished to, you with such
number of conformed copies of such opinions, certificates, letters and documents
as you reasonably request.
7. Indemnification and Contribution. (a) The Bank will indemnify and
--------------------------------
hold harmless each Underwriter and each person, if any, controls such
Underwriter within the meaning of the Act against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject, under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related Preliminary Prospectus or Series
Term Sheet, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
and each such controlling person for any legal or other expenses reasonably
incurred by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that (i) the Bank will not be
-------- -------
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the Bank
by any Underwriter
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 25
through you specifically for use therein and (ii) such indemnity with respect to
the Prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such loss,
claim, damage or liability purchased the Certificates which are the subject
thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Certificates to
such person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in any Preliminary
Prospectus or Series Term Sheet was corrected in the Prospectus (or the
Prospectus as supplemented). This indemnity agreement will be in addition to any
liability which the Bank may otherwise have.
(b) Each Underwriter, severally, agrees to indemnify and hold harmless
the Bank, each of its directors, each of the officers who signs the Registration
Statement, and each person who controls the Bank within the meaning of the Act,
to the same extent as the foregoing indemnities from the Bank to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Bank by or on behalf of such Underwriter
specifically for use in the preparation of the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 26
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party); provided, however, that if the defendants
-------- -------
in any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available-to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election to so
appoint counsel to defend such action and approval by the indemnified party of
such counsel, the indemnifying party will not be liable to such indemnified
party under this Section 7 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
Underwriters in the case of subsection (a) of this Section 7, representing the
indemnified parties under such subsection (a) who are parties to such action),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) To provide for just and equitable contribution in circumstances in
which the indemnification provided for in subsection (a) or (b) of this Section
7 is due in accordance with its terms but is for any reason held by a court to
be unavailable on grounds of policy or otherwise, the Bank, on the one hand, and
the Underwriters, on the other, shall contribute to the ag-
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 27
gregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
to which the Bank and the Underwriters may be subject in such proportion so that
the Underwriters are responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page of the Prospectus
bears to the public offering price appearing thereon and the Bank is responsible
for the balance; provided, however, that (y) in no case shall any Underwriter
-------- -------
(except as may be provided in the agreement among Underwriters relating to the
offering of the Certificates) be responsible for any amount in excess of the
underwriting discount applicable to the Certificates purchased by such
Underwriter hereunder and (z) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person who controls an
Underwriter within the meaning of the Act shall have the same rights to
contribution as such Underwriter, and each person who controls the Bank within
the meaning of the Act, each officer of the Bank who shall have signed the
Registration Statement and each director of the Bank shall have the same rights
to contribution as the Bank, as the case may be, subject in each case to clauses
(y) and (z) of this subsection (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against any other party or parties under this subsection (d), notify
such party or parties from whom contribution may be sought, but the omission to
so notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this subsection (d).
8. Default by an Underwriter. If any one or more Underwriters shall
-------------------------
fail to purchase and pay for any of the Certificates agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 28
up any pay for (in the respective proportions which the amount of Certificates
set forth opposite their names in Schedule I to the Terms Agreement bears to the
aggregate amount of Certificates set forth opposite the names of all the
remaining Underwriters) the Certificates which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
-------- -------
that the aggregate amount of Certificates which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of the Certificates set forth in Schedule I to the Terms Agreement, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Certificates, and if such
nondefaulting Underwriters do not purchase all the Certificates, this Agreement
will terminate without liability to any nondefaulting Underwriter, the Trust or
the Bank. In the event of a default by any Underwriter as set forth in this
Section 8, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Underwriters shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the Bank
and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
9. Survival of Certain Representations and Obligations. The
---------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements of the Bank or its officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation, or statement as to the results thereof, made by or on
behalf of any Underwriter, the Bank or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Certificates. If this Agreement is terminated pursuant to
Section 8 or if for any reason the purchase of the Certificates by the
Underwriters is not consummated, the Bank shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Bank and the Underwriters pursuant to Section 7 shall remain
in effect. If the purchase of the Certificates by the Underwriters is not
consummat-
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 29
ed for any reason other than solely because of the termination of this Agreement
pursuant to Section 8 or the occurrence of any event specified in clauses (iii),
(iv) or (v) of Section 6(b), the Bank will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Certificates.
10. Notices. All communications hereunder will be in writing and, if
-------
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to you at or c/o Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New
York 10036, Attention: General Counsel, or, if sent to the Bank, will be mailed,
delivered or telegraphed and confirmed to FCC National Bank, c/o BANK ONE
CORPORATION, One First National Plaza, Chicago, Illinois 60670, Attention:
Treasurer; provided, however, that any notice to an Underwriter pursuant to
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation of Underwriters. Any action under this Agreement
------------------------------
with respect to any Series taken by the Representatives jointly or by Morgan
Stanley will be binding upon the Underwriters.
13. Applicable Law. This Agreement shall be governed by, and
--------------
construed in accordance with, the laws of the State of New York.
14. Miscellaneous. Neither this Agreement nor any term hereof may be
-------------
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
November 3, 1998
Page 30
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement between the Bank and the several Underwriters
in accordance with its terms.
Very truly yours,
FCC NATIONAL BANK
By: /s/ M. Eileen Kennedy
---------------------------
Name: M. Eileen Kennedy
Title: Vice President
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Robert A. Feldman
---------------------------
Name: Robert A. Feldman
Title: Principal
<PAGE>
EXHIBIT A
FIRST CHICAGO MASTER TRUST II
CREDIT CARD CERTIFICATES SERIES 199_-_
TERMS AGREEMENT
---------------
Dated:____________
To: FCC NATIONAL BANK
Re: Underwriting Agreement dated November 3, 1998
Series Designation: Series 199_-_
Underwriters:
The Underwriters named on Schedule I attached hereto are the
"Underwriters" for the purpose of this Agreement and for the purposes of the
above referenced Underwriting Agreement as such Underwriting Agreement is
incorporated herein and made a part hereof.
Terms of the Certificates:
- -------------------------
Initial
Invested Interest Price to
Amount Rate or Formula Public (1)
- ------ --------------- ----------
(1) Plus accrued interest at the applicable rate from
___________.
Payment Dates: __________, _________, _________ and
- -------------
___________, commencing ________ __, 199_.
Certificate Rating(s]: ________ by ____________
- ---------------------
_____________,
[_______ by ____________
_____________.
A-1
<PAGE>
Enhancement Provider:
- --------------------
Purchase Price:
- --------------
The purchase price payable by the Underwriters for the Certificates
covered by this Agreement will be the following percentage of the principal
amounts to be issued:
Per Certificate _________%
Registration Statement:
- ----------------------
Underwriting Commissions, Concessions and Discounts:
- ---------------------------------------------------
The Underwriters' discounts and commissions, the concessions that the
Underwriters may allow to certain dealers, and the discounts that such dealers
may reallow to certain other dealers, each expressed as a percentage of the
principal amount of the Certificates, shall be as follows:
Underwriting
Discounts and Selling
Commissions Concessions Reallowance
------------- ----------- -----------
___% ___% ___%
Closing Date: ___________ __, 19__, ___ a.m., [New York] Time
- ------------
Location of Closing:
- -------------------
Payment for the Certificates:
- ----------------------------
Opinion Modifications:
- ---------------------
Other Modifications:
- -------------------
A-2
<PAGE>
The Underwriters agree, severally and not jointly, subject to the
terms and provisions of the above referenced Underwriting Agreement which is
incorporated herein in its entirety and made a part hereof, to purchase the
respective principal amounts of the above referenced Series of Certificates set
forth opposite their names on Schedule I hereto.
MORGAN STANLEY & CO. INCORPORATED
As Representative of the
Underwriters named in
Schedule 1 hereto.
By:___________________
Name:
Title:
Accepted:
FCC NATIONAL BANK
By:______________________
Name:
Title:
A-3
<PAGE>
SCHEDULE I
UNDERWRITERS
$___________ Principal Amount of Credit Card Certificates Series 19_-_
Principal Amount
----------------
[Names of Underwriters] $
_______________
$_______________
A-4
<PAGE>
SCHEDULE II
A-5
<PAGE>
SCHEDULE III
[Form of Series Term Sheet,
if applicable]
A-6
<PAGE>
Exhibit 4.28
- --------------------------------------------------------------------------------
FCC NATIONAL BANK,
Seller and Servicer
and
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
Trustee
on behalf of the Certificateholders
--------------------
SERIES 1998-V SUPPLEMENT
Dated as of November 1, 1998
to
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1990
--------------------
$1,142,857,143
FIRST CHICAGO MASTER TRUST II
SERIES 1998-V
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. Designation................................. 1
SECTION 2. Definitions................................. 2
SECTION 3. Minimum First Chicago Interest Percentage
and Minimum Aggregate Principal
Receivables................................. 19
SECTION 4. Reassignment and Transfer Terms............. 20
SECTION 5. Delivery and Payment for the Series
1998-V Certificates......................... 20
SECTION 6. Form of Delivery of the Series 1998-V
Certificates................................ 20
SECTION 7. Article IV of Agreement..................... 20
Section 4.02 Rights of Series 1998-V
Certificateholders.............. 21
Section 4.03 Collections and Allocations..... 21
Section 4.04 Determination of Monthly
Interest for the Series
1998-V Certificates............. 23
Section 4.05 Determination of Monthly
Principal for the Series
1998-V Certificates............. 26
Section 4.06 Coverage of Required Amount
for the Class A Certificates.... 28
Section 4.07 Application of Class A
Available Funds, Collateral
Available Funds, Class A Avail-
able Principal Collections and
Collateral Principal Collections
on Deposit in the Collection
Account for the Series 1998-V
Certificates.................... 30
Section 4.08 Investor Charge-Offs............ 32
Section 4.09 Excess Spread................... 33
Section 4.10 Reallocated Principal
Collections..................... 35
Section 4.11 Cash Collateral Account......... 35
Section 4.12 Interchange; Interchange
Monthly Servicing Fee........... 38
(i)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 4.13 Determination of LIBOR.......... 39
Section 4.14 Postponement of Accumulation
Period.......................... 40
Section 4.15 Principal Funding Account....... 41
Section 4.16 Reserve Account................. 43
SECTION 8. Article V of the Agreement.................. 45
Section 5.01 Distributions................... 45
Section 5.02 Statements to
Certificateholders.............. 46
SECTION 9. Additional Liquidation Events............... 47
SECTION 10. Related Interest Periods.................... 49
SECTION 11. Eligible Servicer........................... 49
SECTION 12. Trustee Resignation......................... 49
SECTION 13. Tax Opinion................................. 49
SECTION 14. Subordination of Certain Termination
Payments.................................... 50
SECTION 15. Variable Accumulation Series................ 50
SECTION 16. Ratification of Pooling and Servicing
Agreement; Representations; Security
Interest.................................... 50
SECTION 17. Counterparts............................... 51
SECTION 18. Governing Law.............................. 51
EXHIBITS
EXHIBIT A Form of Class A Certificate
EXHIBIT B Form of Certificateholders' Payment Date
Statement
</TABLE>
(ii)
<PAGE>
SERIES 1998-V SUPPLEMENT dated as of November 1, 1998 (this "Series
Supplement") between FCC NATIONAL BANK, a national bank, as Seller and Servicer,
and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a banking association
organized and existing under the laws of the United States of America (together
with its successors in trust thereunder as provided in the Agreement referred to
below, the "Trustee"), as trustee under the Pooling and Servicing Agreement
dated as of June 1, 1990 (as amended and supplemented, the "Agreement").
PRELIMINARY STATEMENT
Section 6.09 of the Agreement provides, among other things, that the
Seller and the Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the issuance by the
Trustee to the Seller for execution and redelivery to the Trustee for
authentication one or more Series of Certificates. The Seller has tendered the
Exchange Notice required by subsection 6.09(b) of the Agreement and hereby
enters into this Series Supplement with the Trustee as required by subsection
6.09(c) of the Agreement to provide for the issuance of the Investor
Certificates of Series 1998-V (the "Series 1998-V Certificates"). In the event
that any term or provision contained herein shall conflict with or be
inconsistent with any term or provision contained in the Agreement, the terms
and provisions of this Series Supplement shall govern.
All capitalized terms not otherwise defined herein are defined in the
Agreement. All Article, Section or subsection references herein shall mean
Article, Section or subsections of the Agreement, except as otherwise provided
herein. Unless otherwise stated herein, as the context otherwise requires or if
such term is otherwise defined in the Agreement, each capitalized term used or
defined herein shall relate only to the Series 1998-V Certificates and no other
Series of investor certificates issued by the Trust.
SECTION 1. Designation. The Series 1998-V Certificates shall be
-----------
issued in two classes to be designated generally as the Floating Rate Asset
Backed Certificates Series 1998-V (to be defined herein as the Class A
Certificates) and the Collateral Interest Series 1998-V (to be defined herein as
the Collateral Interest). Each
<PAGE>
of the Class A Certificates and the Collateral Interest shall constitute a Class
of Investor Certificates; provided, however, that the Collateral Interest shall
-------- -------
be issued in uncertificated form and the provisions of Article VI and Article
XII of the Agreement relating to the registration, authentication, delivery,
presentation, cancellation and surrender of Registered Certificates shall not be
applicable thereto. In addition, solely for purposes of subsection 9.02(a) of
the Agreement, holders of interests in the Cash Collateral Account (other than
the Seller) shall be deemed to be a Class of Investor Certificates.
SECTION 2. Definitions. The following words and phrases shall have
-----------
the following meaning with respect to the Series 1998-V Certificates and the
definitions of such terms are applicable to the singular as well as the plural
form of such terms and to the masculine as well as the feminine and neuter
genders of such terms:
"Accumulation Period" shall mean, with respect to the Series 1998-V
-------------------
Certificates, and provided that a Rapid Amortization Period shall not have
commenced, a period commencing on the Controlled Accumulation Date, and
continuing to the earlier of (x) but not including, the first day of the Due
Period in which a Liquidation Event is deemed to have occurred, (y) and
including, the date on which the Invested Amount is paid in full, or (z) the
Series Termination Date.
"Accumulation Period Amount" shall mean, with respect to a Due Period,
--------------------------
an amount equal to the product of (i) Available Expected Principal for such Due
Period and (ii) a fraction, the numerator of which is the Initial Invested
Amount and the denominator of which is the sum of the Initial Invested Amount
and the initial invested amounts (as defined in the respective related
Supplements) of all other Variable Accumulation Series that are not scheduled to
be in their revolving periods as of such Due Period; provided that, for purposes
of this definition, the commencement date of the accumulation period of each
such Variable Accumulation Series shall be deemed to have been postponed to the
latest permissible date, determined as if the provisions hereof applied to each
such Series with such changes as may be specified in the applicable Supplement
with respect to such Series (applying such provisions first to the Variable
Accumulation Series with the latest scheduled pay-
2
<PAGE>
ment day and next to each Series with the next preceding scheduled payment
date).
"Accumulation Period Length" shall have the meaning specified in
--------------------------
Section 4.14 of the Agreement.
"Adjusted Available Cash Collateral Amount" shall mean, with respect
-----------------------------------------
to any Distribution Date, the Available Cash Collateral Amount for such
Distribution Date after giving effect to all withdrawals therefrom for such
Distribution Date pursuant to Section 4.06 of the Agreement.
"Adjusted Invested Amount" shall mean, with respect to any date of
------------------------
determination, an amount equal to the sum of (a) the Class A Adjusted Invested
Amount and (b) the Collateral Invested Amount.
"Available Funds" shall have the meaning specified in Section 4.06 of
---------------
the Agreement.
"Available Cash Collateral Amount" shall mean, with respect to any
--------------------------------
Distribution Date, the amount on deposit in the Cash Collateral Account after
giving effect to all deposits therein and withdrawals therefrom with respect to
the immediately preceding Distribution Date, but before giving effect to any
deposits therein or withdrawals therefrom with respect to the related
Distribution Date.
"Available Enhancement Amount" shall mean, with respect to any
----------------------------
Distribution Date, the sum of (a) the Collateral Invested Amount on the related
Determination Date and (b) the Available Cash Collateral Amount.
"Available Expected Principal" shall mean, for any date of
----------------------------
determination with respect to a Due Period, an amount equal to the excess of (a)
the Expected Monthly Principal for such Due Period over (b) the sum of, without
duplication, (i) all scheduled amortizations or accumulations of principal,
including past due shortfalls as of such date of determination, for all non-
Variable Accumulation Series that are not scheduled to be in their revolving
periods as of such Due Period and (ii) all Expected Monthly Principal
collections projected by the Servicer to be allocable to any other Series with
respect to which a Liquidation Event shall have occurred on or prior to such
date of determination.
3
<PAGE>
"Available Reserve Account Amount" shall mean, with respect to any
--------------------------------
Distribution Date, the lesser of (a) the amount on deposit in the Reserve
Account on such date (after taking into account any interest and earnings
retained in the Reserve Account pursuant to subsection 4.16(b) on such date, but
before giving effect to any deposit made or to be made into the Reserve Account
pursuant to subsection 4.09(h) on such date) and (b) the Required Reserve
Account Amount.
"Base Rate" shall mean, with respect to any Interest Period, the
---------
annualized percentage equivalent of a fraction, the numerator of which is the
sum of (i) the Class A Monthly Interest, (ii) the Collateral Monthly Interest
and (iii) one-twelfth of the product of 2.00% and the Adjusted Invested Amount
for such Interest Period, and the denominator of which is the Invested Amount
for such Interest Period.
"Cash Collateral Account" shall have the meaning specified in Section
-----------------------
4.11 of the Agreement.
"Cash Collateral Account Surplus" shall mean, upon the occurrence of a
-------------------------------
Conversion Deposit and after the reduction of the Collateral Invested Amount to
zero, the excess of the amount on deposit in the Cash Collateral Account over
the Required Cash Collateral Account.
"Class A Additional Interest" shall have the meaning specified in
---------------------------
Section 4.04 of the Agreement.
"Class A Adjusted Invested Amount" shall mean, on any date of
--------------------------------
determination, an amount equal to the Class A Invested Amount minus the
-----
Principal Funding Account Balance on such date of determination.
"Class A Available Funds" shall mean, with respect to any Due Period,
-----------------------
an amount equal to the sum of (i) the Class A Floating Percentage of the
Floating Allocation Percentage of Collections of Finance Charge Receivables
(including any amounts that are to be treated as Collections of Finance Charge
Receivables in accordance with the Agreement), (ii) Principal Funding Investment
Proceeds, up to the Covered Amount for such Due Period, and (iii) if applicable
for such Due Period, the Reserve Draw Amount, up to the Available Reserve
Account Amount.
4
<PAGE>
"Class A Available Principal Collections" shall mean, with respect to
---------------------------------------
any Distribution Date, the sum of (a) the Class A Principal Percentage of the
Invested Percentage of Collections of Principal Receivables, (b) the amount, if
any, of Unallocated Principal Collections on deposit in the Collection Account
allocated to the Series 1998-V Certificates pursuant to subsection 4.01(f) of
the Agreement, (c) Excess Principal Collections allocated to the Series 1998-V
Certificates pursuant to subsection 4.05(c) of the Agreement and (d) any other
amounts which are to be treated as Class A Available Principal Collections in
accordance with the provisions hereof (including, but not limited to, amounts
allocable pursuant to subsections 4.07(a)(iii), 4.07(d)(ii), 4.07(f)(ii),
4.07(g) and 4.09(b)).
"Class A Certificate" shall mean any one of the Certificates executed
-------------------
by the Seller and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit A hereto.
---------
"Class A Certificate Rate" shall mean for the period beginning on and
------------------------
including the Closing Date and ending on and excluding November 16, 1998, for
the period beginning on and including November 16, 1998 and ending on and
excluding December 15, 1998, and for each Interest Period thereafter, a per
annum rate of 0.28% in excess of LIBOR determined on the related LIBOR
Determination Date, calculated on the basis of actual days elapsed and a 360-day
year.
"Class A Certificateholder" shall mean the Holder of record of a Class
-------------------------
A Certificate.
"Class A Covered Amount" shall have the meaning specified in
----------------------
subsection 4.06(a) of the Agreement.
"Class A Floating Percentage" shall mean, with respect to any
---------------------------
Distribution Date, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Class A Adjusted
Invested Amount for such Distribution Date and the denominator of which is the
Adjusted Invested Amount for such Distribution Date.
"Class A Initial Invested Amount" shall mean $1,000,000,000.
-------------------------------
5
<PAGE>
"Class A Interest Shortfall Amount" shall have the meaning specified
---------------------------------
in Section 4.04 of the Agreement.
"Class A Invested Amount" shall mean, on any date of determination, an
-----------------------
amount equal to (a) the Class A Initial Invested Amount, minus (b) the aggregate
-----
amount of principal payments made to the Class A Certificateholders prior to
such date, minus (c) the excess, if any, of the aggregate amount of Class A
-----
Investor Charge-Offs for all prior Distribution Dates over the aggregate amount
of Class A Investor Charge-Offs reimbursed pursuant to Section 4.09 of the
Agreement prior to such date.
"Class A Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.08 of the Agreement.
"Class A Investor Default Amount" shall mean, with respect to each
-------------------------------
Distribution Date, an amount equal to the product of (i) the Investor Default
Amount for such Distribution Date and (ii) the Class A Floating Percentage for
such Distribution Date.
"Class A Monthly Interest" shall have the meaning specified in Section
------------------------
4.04 of the Agreement.
"Class A Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.05 of the Agreement.
"Class A Principal Percentage" shall mean, with respect to any
----------------------------
Distribution Date (i) relating to the Revolving Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is the Class A Invested Amount for such Distribution Date,
and the denominator of which is the Invested Amount for such Distribution Date
and (ii) relating to the Accumulation Period or the Rapid Amortization Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Class A Invested Amount as of the end of
the day on the last Distribution Date relating to the Revolving Period, and the
denominator of which is the Invested Amount as of such day.
"Class A Required Amount" shall have the meaning specified in Section
-----------------------
4.06 of the Agreement.
"Class A Scheduled Payment Date" shall mean the October 2001
------------------------------
Distribution Date.
6
<PAGE>
"Closing Date" shall mean November 12, 1998.
------------
"Collateral Additional Interest" shall have the meaning specified in
------------------------------
Section 4.04 of the Agreement.
"Collateral Available Funds" shall mean, with respect to any Due
--------------------------
Period, an amount equal to the Collateral Floating Percentage of the Floating
Allocation Percentage of Collections of Finance Charge Receivables (including
any amounts that are to be treated as Collections of Finance Charge Receivables
in accordance with the Agreement).
"Collateral Default Amount" shall mean, with respect to each
-------------------------
Distribution Date, an amount equal to the product of (i) the Investor Default
Amount for such Distribution Date and (ii) the Collateral Floating Percentage
for such Distribution Date.
"Collateral Floating Percentage" shall mean, with respect to any
------------------------------
Distribution Date, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Collateral Invested
Amount for such Distribution Date, and the denominator of which is the Adjusted
Invested Amount for such Distribution Date.
"Collateral Initial Invested Amount" shall mean $142,857,143.
----------------------------------
"Collateral Invested Amount" shall mean, for any date of
--------------------------
determination, an amount equal to (a) the Collateral Initial Invested Amount,
minus (b) an amount equal to the amount by which the Collateral Invested Amount
- -----
has been reduced on all prior Distribution Dates pursuant to Section 4.08 of the
Agreement, minus (c) the aggregate amount of Collateral Monthly Principal
-----
applied in accordance with the Loan Agreement pursuant to Section 4.07 of the
Agreement or deposited into the Cash Collateral Account pursuant to subsection
4.11(e) of the Agreement prior to such date; provided, however, that the
-------- -------
Collateral Invested Amount may not be reduced below zero.
"Collateral Interest" shall mean a fractional undivided interest in
-------------------
the Trust which shall consist of the right to receive, to the extent necessary
to make the required payments to the Collateral Interest Holder under this
Supplement, the portion of Collections allocable thereto under the Agreement and
funds on deposit in the
7
<PAGE>
Collection Account allocable thereto pursuant to the Agreement.
"Collateral Interest Holder" shall mean the entity so designated in
--------------------------
the Loan Agreement.
"Collateral Interest Shortfall Amount" shall have the meaning
------------------------------------
specified in Section 4.04 of the Agreement.
"Collateral Monthly Interest" shall have the meaning specified in
---------------------------
Section 4.04 of the Agreement.
"Collateral Monthly Principal" shall have the meaning specified in
----------------------------
Section 4.05 of the Agreement.
"Collateral Principal Collections" shall mean, with respect to any Due
--------------------------------
Period, the Collateral Principal Percentage of the Invested Percentage of
Collections of Principal Receivables, plus any other amounts which are to be
----
treated as Collateral Principal Collections in accordance with the provisions
hereof, minus the amount of Reallocated Principal Collections with respect to
-----
such Due Period.
"Collateral Principal Percentage" shall mean, with respect to any
-------------------------------
Distribution Date (i) relating to the Revolving Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is the Collateral Invested Amount for such Distribution Date,
and the denominator of which is the Invested Amount for such Distribution Date
and (ii) relating to the Accumulation Period or the Rapid Amortization Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Collateral Invested Amount as of the end
of the day on the last Distribution Date relating to the Revolving Period, and
the denominator of which is the Invested Amount as of such day.
"Collateral Rate" shall mean the rate designated as such in the Loan
---------------
Agreement.
"Controlled Accumulation Amount" shall mean one-twelfth of the Class A
------------------------------
Initial Invested Amount; provided, however, that if the Accumulation Period
-------- -------
Length is determined to be less than 12 months pursuant to Section 4.14 of the
Agreement, the Controlled Accumula-
8
<PAGE>
tion Amount shall mean the amount determined in accordance with such
Section.
"Controlled Accumulation Date" shall mean the first day of the Due
----------------------------
Period relating to the November 2000 Distribution Date or such later date as is
determined in accordance with Section 4.14 of the Agreement.
"Controlled Deposit Amount" shall mean, with respect to any
-------------------------
Distribution Date relating to the Accumulation Period, an amount equal to the
sum of the Controlled Accumulation Amount and any existing Deficit Controlled
Accumulation Amount.
"Conversion Deposit" shall have the meaning specified in subsection
------------------
4.11(e) of the Agreement.
"Conversion Event" shall mean any event that the Seller, in its sole
----------------
discretion, shall determine makes it advisable that the Collateral Invested
Amount no longer be Enhancement.
"Covered Amount" shall mean an amount, determined as of each
--------------
Distribution Date with respect to any Interest Period, equal to the product of
(i) a fraction, the numerator of which is the actual number of days in such
Interest Period and the denominator of which is 360, times (ii) the Class A
-----
Certificate Rate in effect with respect to such Interest Period, times (iii) the
-----
Principal Funding Account Balance as of the Record Date preceding such
Distribution Date.
"Deficit Controlled Accumulation Amount" shall mean, on the first
--------------------------------------
Distribution Date with respect to the Accumulation Period, the excess, if any,
of the Controlled Accumulation Amount over the amount of Class A Monthly
Principal for such Distribution Date and, on each subsequent Distribution Date
with respect to the Accumulation Period, the excess, if any, of the Controlled
Deposit Amount over the amount of Class A Monthly Principal for such
Distribution Date.
"Eligible Institution" shall have the meaning specified in Section
--------------------
1.01 of the Agreement, except that the reference therein to "First Chicago"
shall instead be to "the Servicer."
"Enhancement" shall mean the Cash Collateral Account and the
-----------
Collateral Invested Amount.
9
<PAGE>
"Enhancement Provider" shall mean the Collateral Interest Holder.
--------------------
"Enhancement Surplus" shall mean, with respect to any Distribution
-------------------
Date, the amount by which the Collateral Invested Amount may be reduced on such
Distribution Date so that the sum of (i) the Adjusted Available Cash Collateral
Amount (after giving effect to any deposits pursuant to subsection 4.09(f) for
such Distribution Date), (ii) the Collateral Invested Amount (after giving
effect to any reductions thereof on such Distribution Date pursuant to Section
4.08 of the Agreement) as reduced by such Enhancement Surplus and (iii) the
Optional Deposit for such Distribution Date, if any, equals the Required
Enhancement Amount (computed as if the Collateral Invested Amount was reduced by
such Enhancement Surplus and subject to the proviso contained in the definition
of Required Enhancement Amount).
Algebraically, if the Required Enhancement Amount for the Distribution
Date is computed pursuant to clause (i) of the definition thereof, the
Enhancement Surplus shall be represented as:
0.135(AIA + (CIA-X)) = ACCA + (CIA-X)
where,
X = the Enhancement Surplus;
AIA = the Class A Adjusted Invested Amount at the end of such
Distribution Date;
ACCA = the Adjusted Available Cash Collateral Amount (after giving
effect to any deposit pursuant to subsection 4.09(f) or Optional
Deposit on such Distribution Date); and
CIA = the Collateral Invested Amount on such Distribution Date (after
giving effect to any reductions thereof pursuant to Section
4.08).
Algebraically, if the Required Enhancement Amount for the Distribution
Date is computed pursuant to clause (ii) of the definition thereof, the
Enhancement Surplus shall be represented as:
$11,428,572+ 2($11,428,572 - ACCA) = ACCA + (CIA-X)
10
<PAGE>
where,
X = the Enhancement Surplus;
ACCA = the Adjusted Available Cash Collateral Amount (after giving
effect to any deposit pursuant to Section 4.09(f) or Optional
Deposit on such Distribution Date); and
CIA = the Collateral Invested Amount on such Distribution Date (after
giving effect to any reductions thereof pursuant to Section
4.08).
"Excess Finance Charge Collections" shall have the meaning specified
---------------------------------
in subsection 4.04(c) of the Agreement.
"Excess Principal Collections" shall have the meaning specified in
----------------------------
subsection 4.05(c) of the Agreement.
"Excess Principal Funding Investment Proceeds" shall mean, with
--------------------------------------------
respect to each Distribution Date, the amount, if any, by which the Principal
Funding Investment Proceeds for such Distribution Date exceed the Covered Amount
determined for such Distribution Date.
"Excess Spread" shall mean, with respect to any Distribution Date, the
-------------
sum of the amounts, if any, specified in subsections 4.07(a)(iv) and 4.07(b).
"Expected Monthly Principal" shall mean, for a Due Period, an amount
--------------------------
equal to the product of (a) the lowest of the monthly principal payment rates
(determined by dividing Collections of Principal Receivables with respect to a
Due Period by the amount of Aggregate Principal Receivables as of the last day
of the immediately preceding Due Period), expressed as a decimal, for the 12 Due
Periods immediately preceding the Determination Date with respect to the October
2000 Distribution Date (including the Due Period related to the October 2000
Distribution Date)(or such lower principal payment rate as the Servicer may
select) and (b) the sum of the initial invested amounts (as defined in the
respective related Supplements) of all then outstanding Series.
"Fixed Allocation Percentage" shall mean, with respect to any
---------------------------
Distribution Date relating to the Accumu-
11
<PAGE>
lation Period or any Rapid Amortization Period, the percentage equivalent of a
fraction, the numerator of which is the Invested Amount as of the end of the day
on the last Distribution Date relating to the Revolving Period and the
denominator of which is the greater of (a) Aggregate Principal Receivables for
the Due Period related to the current Distribution Date and (b) the sum of the
numerators used to calculate the Invested Percentages with respect to Principal
Receivables for all Series of investor certificates outstanding for the current
Distribution Date.
"Floating Allocation Percentage" shall mean, with respect to any
------------------------------
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the Adjusted Invested Amount for such Distribution Date, and the
denominator of which is Aggregate Principal Receivables for the Due Period
related to such Distribution Date.
"Initial Invested Amount" shall mean the sum of the Class A Initial
-----------------------
Invested Amount and the Collateral Initial Invested Amount.
"Interchange" shall mean the interchange fees payable to the Seller,
-----------
in its capacity as credit card issuer, through VISA USA, Inc. and MasterCard
International Incorporated in connection with cardholder charges for goods and
services.
"Interchange Amount" shall mean, for any Distribution Date, the amount
------------------
of Interchange paid or payable to the Seller with respect to the second calendar
month preceding the month in which the Distribution Date occurs multiplied by a
fraction the numerator of which is the aggregate amount of cardholder sales
charges for goods and services in the Accounts with respect to the second
preceding Due Period and the denominator of which is the aggregate amount of
cardholder charges for goods and services in all the "MasterCard" and "VISA"
consumer revolving credit card accounts of the Seller with respect to such
second preceding Due Period.
"Interchange Monthly Servicing Fee" shall have the meaning specified
---------------------------------
in subsection 4.12(b) of the Agreement.
"Interest Period" shall mean, with respect to any Distribution Date,
---------------
the period from and including the
12
<PAGE>
Distribution Date immediately preceding such Distribution Date to but excluding
such Distribution Date; provided, however, that the first Interest Period shall
-------- -------
be the period from and including the Closing Date to but excluding December 15,
1998.
"Invested Amount" shall mean, with respect to any date of
---------------
determination, an amount equal to the sum of (a) the Class A Invested Amount and
(b) the Collateral Invested Amount.
"Invested Percentage" shall mean, on any date of determination with
-------------------
respect to any Distribution Date: (a) when used with respect to Principal
Receivables during the Accumulation Period or the Rapid Amortization Period, the
Fixed Allocation Percentage; and (b) when used with respect to Principal
Receivables during the Revolving Period and Finance Charge Receivables and
Defaulted Receivables at any time, the Floating Allocation Percentage.
"Investor Default Amount" shall mean, with respect to each
-----------------------
Distribution Date, an amount equal to the product of the Defaulted Amount for
such Distribution Date and the Invested Percentage applicable for such
Distribution Date.
"LIBOR" shall mean, for any Interest Period, the London interbank
-----
offered rate for one-month deposits of Dollars determined by the Servicer for
each Interest Period in accordance with the provisions of Section 4.13 of the
Agreement.
"LIBOR Determination Date" shall mean November 9, 1998, for the period
------------------------
beginning on and including November 12, 1998, and ending on and excluding
November 16, 1998; November 12, 1998, for the period beginning on and including
November 16, 1998 and ending on and excluding December 15, 1998; and the second
London Business Day prior to the commencement of each subsequent Interest
Period.
"Loan Agreement" shall mean the Loan Agreement among the Seller, the
--------------
Servicer, the Trustee and the Collateral Interest Holder, dated the Closing
Date, as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
13
<PAGE>
"London Business Day" shall mean any Business Day other than a
-------------------
Business Day on which banking institutions in London, England dealing in
deposits in United States Dollars are authorized or obligated by law or
executive order to be closed.
"Monthly Servicing Fee" shall mean the share of the Servicing Fee
---------------------
allocable to the Series 1998-V Certificates with respect to any Distribution
Date, which shall be equal to one-twelfth of the product of (a) the Servicing
Fee Percentage and (b) the Adjusted Invested Amount on the prior Distribution
Date after giving effect to any payment or deposit of principal on such prior
Distribution Date (or, in the case of the first Distribution Date, the Initial
Invested Amount).
"Optional Deposit" shall have the meaning specified in subsection
----------------
4.11(d) of the Agreement.
"Payment Date" shall mean any Distribution Date, commencing December
------------
15, 1998, and the Termination Payment Date.
"Portfolio Yield" shall mean, with respect to any Due Period, the
---------------
annualized percentage equivalent of a fraction the numerator of which is equal
to (a) the Floating Allocation Percentage of the Collections of Finance Charge
Receivables (including Interchange) during such Due Period, calculated on a cash
basis, plus (b) Principal Funding Investment Proceeds for such Due Period, plus
---- ----
(c) the amount, if any, withdrawn from the Reserve Account and included in Class
A Available Funds for the Distribution Date relating to such Due Period, minus
-----
(d) the Investor Default Amount for such Due Period, and the denominator of
which is the Invested Amount for the Distribution Date related to such Due
Period.
"Principal Funding Account" shall have the meaning specified in
-------------------------
subsection 4.15(a) of the Agreement.
"Principal Funding Account Balance" shall mean, with respect to any
---------------------------------
date of determination, the principal amount, if any, on deposit in the Principal
Funding Account on such date of determination as provided in Section 4.15(d).
"Principal Funding Investment Proceeds" shall mean, with respect to
-------------------------------------
each Distribution Date, the investment earnings on funds in the Principal
Funding Account
14
<PAGE>
(net of investment expenses and losses) for the period from and including the
Transfer Date relating to the immediately preceding Distribution Date to but
excluding the Transfer Date relating to such Distribution Date.
"Principal Funding Investment Shortfall" shall mean, with respect to
--------------------------------------
each Distribution Date relating to the Accumulation Period or the first
Distribution Date with respect to the Rapid Amortization Period, the amount, if
any, by which the Principal Funding Investment Proceeds for such Distribution
Date are less than the Covered Amount determined for such Distribution Date.
"Principal Shortfall" shall have the meaning specified in Section 4.03
-------------------
of the Agreement.
"Rapid Amortization Period" shall mean, with respect to the Series
-------------------------
1998-V Certificates, a period beginning on the first day of the Due Period in
which a Liquidation Event is deemed to occur and continuing to and including the
earlier of (a) the date on which the Invested Amount is paid in full or (b) the
Series Termination Date.
"Rating Agency" shall mean, with respect to Series 1998-V, the rating
-------------
agency or agencies rating any Class of the Series 1998-V Certificates at the
request of the Seller, including Moody's, Standard & Poor's and Fitch IBCA, Inc.
"Rating Agency Condition" shall mean the notification in writing by
-----------------------
each Rating Agency to the Seller, the Servicer and the Trustee that an action
will not result in such Rating Agency reducing or withdrawing its then existing
rating of the Investor Certificates of any outstanding Series or Class of a
Series with respect to which it is a Rating Agency.
"Reallocated Principal Collections" shall mean, with respect to any
---------------------------------
Due Period, the Collateral Principal Percentage of the Invested Percentage of
Collections of Principal Receivables but only to the extent that such
Collections of Principal Receivables are actually distributed pursuant to
subsection 4.10(a) of the Agreement.
"Record Date" shall mean, with respect to any Distribution Date, the
-----------
last day of the calendar month immediately preceding such Distribution Date.
15
<PAGE>
"Reference Banks" shall mean four major banks in the London interbank
---------------
market selected by the Servicer and identified in an Officer's Certificate
delivered to the Trustee on the Closing Date or in any subsequent Officer's
Certificate delivered no later than one Business Day prior to the then current
LIBOR Determination Date.
"Required Cash Collateral Amount" shall mean, with respect to any
-------------------------------
Distribution Date, the Required Enhancement Amount, minus the Collateral
-----
Invested Amount after giving effect to all reductions of the Collateral Invested
Amount with respect to such Distribution Date pursuant to Section 4.08 and any
reductions of the Collateral Invested Amount with respect to such Distribution
Date pursuant to Section 4.07 other than as a result of any Enhancement Surplus
due to any Optional Deposit.
"Required Enhancement Amount" shall mean, with respect to any
---------------------------
Distribution Date, the greater of (i) the product of (a) the Adjusted Invested
Amount as of such Distribution Date after taking into account all distributions
and reductions to be made on such Distribution Date, and (b)13.5% and (ii) the
sum of (A) $11,428,572 and (B) the product of (I) two and (II) the excess, if
any, of $11,428,572 over the Adjusted Available Cash Collateral Amount;
provided, however, that (i) if there are any withdrawals from the Cash
- -------- -------
Collateral Account pursuant to Section 4.06 of the Agreement or any reductions
in the Collateral Invested Amount pursuant to clause (b) of the definition of
such amount, or a Liquidation Event occurs with respect to the Series 1998-V
Certificates, then the Required Enhancement Amount for any Distribution Date
shall equal the Required Enhancement Amount on the Distribution Date immediately
preceding such withdrawal, reduction or Liquidation Event, (ii) in no event
shall the Required Enhancement Amount exceed the Class A Adjusted Invested
Amount on any such Distribution Date, and (iii) the Required Enhancement Amount
may be reduced without the consent of the Class A Certificateholders or the
Collateral Interest Holder, if the Seller shall have received written notice
from each Rating Agency (with a copy delivered to the Trustee) that such
reduction will not result in the reduction or withdrawal of the then current
rating of any Class of Series 1998-V Certificates rated by such Rating Agency
and the Seller shall have delivered to the Trustee an Officer's Certificate to
the effect that, based on the facts known to such officer at such time, in the
reasonable belief of
16
<PAGE>
the Seller, such reduction will not cause a Liquidation Event or an event that,
after the giving of notice or the lapse of time, would constitute a Liquidation
Event, to occur with respect to the Series 1998-V Certificates.
"Required Reserve Account Amount" shall mean, with respect to any
-------------------------------
Distribution Date on or after the Reserve Account Funding Date, an amount equal
to (a) 0.25% of the Class A Invested Amount or (b) any other amount designated
by the Seller; provided, however, that if such designation is of a lesser
-------- -------
amount, the Seller shall (i) provide the Servicer, the Collateral Interest
Holder and the Trustee with evidence that the Rating Agency Condition shall have
been satisfied and (ii) deliver to the Trustee an Officers' Certificate to the
effect that, based on the facts known to such officers at such time, in the
reasonable belief of the Seller, such designation will not cause a Liquidation
Event or an event that, after the giving of notice or the lapse of time, would
cause a Liquidation Event to occur with respect to Series 1998-V.
"Reserve Account" shall have the meaning specified in subsection
---------------
4.16(a) of the Agreement.
"Reserve Account Funding Date" shall mean the August 2000 Distribution
----------------------------
Date.
"Reserve Account Surplus" shall mean, as of any Distribution Date
-----------------------
following the Reserve Account Funding Date, the amount, if any, by which the
amount on deposit in the Reserve Account exceeds the Required Reserve Account
Amount.
"Reserve Draw Amount" shall have the meaning specified in subsection
-------------------
4.16(c).
"Revolving Period" shall mean, with respect to the Series 1998-V
----------------
Certificates, the period from and including the Closing Date up to and including
the day prior to the day on which the Accumulation Period or, if earlier, the
Rapid Amortization Period commences.
"Series J Certificates" or "Series 1994-J" shall mean the Floating
--------------------- -------------
Rate Asset Backed Certificates Series 1994-J.
17
<PAGE>
"Series K Certificates" or "Series 1994-K" shall mean the Floating
--------------------- -------------
Rate Credit Card Certificates Series 1994-K.
"Series L Certificates" or "Series 1994-L" shall mean the 7.15% Credit
--------------------- -------------
Card Certificates Series 1994-L.
"Series M Certificates" or "Series 1995-M" shall mean the Floating
--------------------- -------------
Rate Credit Card Certificates Series 1995-M.
"Series N Certificates" or "Series 1995-N" shall mean the Floating
--------------------- -------------
Rate Credit Card Certificates Series 1995-N.
"Series O Certificates" or "Series 1995-O" shall mean the Floating
--------------------- -------------
Rate Credit Card Certificates Series 1995-O.
"Series P Certificates" or "Series 1995-P" shall mean the Floating
--------------------- -------------
Rate Credit Card Certificates Series 1995-P.
"Series Q Certificates" or "Series 1996-Q" shall mean the Floating
--------------------- -------------
Rate Asset Backed Certificates Series 1996-Q.
"Series R Certificates" or "Series 1996-R" shall mean the Floating
--------------------- -------------
Rate Asset Backed Certificates Series 1996-R.
"Series S Certificates" or "Series 1996-S" shall mean the Floating
--------------------- -------------
Rate Asset Backed Certificates Series 1996-S.
"Series T Certificates" or "Series 1997-T" shall mean the Floating
--------------------- -------------
Rate Asset Backed Certificates Series 1997-T.
"Series U Certificates" or "Series 1997-U" shall mean the Floating
--------------------- -------------
Rate Asset Backed Certificates Series 1997-U.
"Series 1998-V Certificateholder" shall mean the Holder of record of a
-------------------------------
Class A Certificate or the Collateral Interest Holder.
18
<PAGE>
"Series 1998-V Certificateholders' Interest" shall have the meaning
------------------------------------------
specified in Section 4.02 of the Agreement.
"Series Termination Date" shall mean the October 2003 Distribution
-----------------------
Date.
"Servicing Fee Percentage" shall mean 0.75% per annum.
------------------------
"Shortfall Amount" shall have the meaning specified in Section 4.04 of
----------------
the Agreement.
"Telerate Page 3750" shall mean the display page currently so
------------------
designated on the Dow Jones Telerate Service (or such other page as may replace
such page on such service for the purpose of displaying comparable rates or
prices).
"Termination Payment Date" shall mean the earlier of (a) the
------------------------
Distribution Date on which final payment has been made on the Series 1998-V
Certificates and (b) the Series Termination Date.
"Variable Accumulation Series" shall mean each then outstanding Series
----------------------------
(including, but not limited to, Series 1998-V), other than Series 1998-V, for
which, pursuant to the terms of the related Supplement, the commencement date of
its accumulation period or amortization period may be changed.
"Withdrawal Amount" shall mean, with respect to the Class A
-----------------
Certificates, and with respect to any Distribution Date, the lesser of (a) the
Class A Required Amount calculated for such Distribution Date and (b) the
Available Cash Collateral Amount calculated for such Distribution Date.
SECTION 3. Minimum First Chicago Interest Percentage and Minimum
-----------------------------------------------------
Aggregate Principal Receivables. The Minimum First Chicago Interest Percentage
- -------------------------------
applicable to the Series 1998-V Certificates shall be 7% (unless (a) the Rating
Agencies confirm in writing that a lower percentage will not cause a reduction
or withdrawal of the then rating of any Class of Series 1998-V Certificates and
(b) the Seller receives an Opinion of Counsel that such reduction will not
adversely affect the Federal income tax characterization of the Series 1998-V
Certificates or any other outstanding investor certificates, or
19
<PAGE>
be treated as an exchange within the meaning of Section 1001 of the Code). The
Minimum Aggregate Principal Receivables shall be the sum of (i) the Initial
Invested Amount and (ii) the initial invested amounts of all other Series then
outstanding or, if any Series calculates the invested percentage with respect to
Principal Receivables by means of a numerator based other than on the initial
invested amount of such Series, then at least equal to the sum of the initial
invested amount of each Series then outstanding which calculates such invested
percentage on the basis of initial invested amount plus, for each other Series
then outstanding, the then current numerator used to calculate the invested
percentage with respect to Principal Receivables for such Series.
SECTION 4. Reassignment and Transfer Terms. The Series 1998-V
-------------------------------
Certificates may be reassigned and transferred to the Seller on any Distribution
Date in the Accumulation Period or the Rapid Amortization Period on or after the
Invested Amount is reduced to an amount less than or equal to 5% of the Initial
Invested Amount in accordance with the terms specified in subsection 12.02(a) of
the Agreement, subject to any limitation specified in the Loan Agreement. The
repurchase price of any such repurchase shall be equal to the Adjusted Invested
Amount plus accrued and unpaid interest on the Series 1998-V Certificates
through the Distribution Date on which the repurchase occurs.
SECTION 5. Delivery and Payment for the Series 1998-V Certificates.
-------------------------------------------------------
The Trustee shall deliver the Class A Certificates when authenticated in
accordance with Section 6.02 of the Agreement. The Collateral Interest shall be
acquired in accordance with the Loan Agreement.
SECTION 6. Form of Delivery of the Series 1998-V Certificates. The
--------------------------------------------------
Class A Certificates shall be delivered as Book Entry Certificates as provided
in Section 6.01 of the Agreement. The Collateral Interest shall be delivered in
uncertificated form as provided in the Loan Agreement.
SECTION 7. Article IV of Agreement. Any provision of Article IV of
-----------------------
the Agreement which distributes Collections to the Seller on the basis of the
Seller's Percentage shall continue to apply irrespective of the issuance of the
Series 1998-V Certificates. With respect to the Series 1998-V Certificates,
Article IV of
20
<PAGE>
the Agreement (except for Section 4.01 thereof) shall read as follows:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.02 Rights of Series 1998-V Certificateholders. The
-------------------------------------------
Investor Certificates of Series 1998-V shall represent fractional Undivided
Interests in the Trust, consisting of the right to receive, to the extent
necessary to make the required payments with respect to such Investor
Certificates at the times and in the amounts specified in this Agreement, (a)
the related Invested Percentage of Collections received with respect to the
Receivables (including the Interchange Amount allocable to the Series 1998-V
Certificateholders), (b) funds on deposit in the Collection Account, (c) funds
on deposit in the Cash Collateral Account, (d) funds on deposit in the Principal
Funding Account and (e) funds on deposit in the Reserve Account (the "Series
1998-V Certificateholders' Interest"). The Exchangeable Seller's Certificate
and any other Series of investor certificates outstanding shall represent
fractional Undivided Interests in the Trust Assets not allocated pursuant to
this Agreement to the Series 1998-V Certificateholders' Interest, including the
right to receive Collections with respect to the Receivables and other amounts
at the times and in the amounts specified in this Article IV to be paid to the
Holder of the Exchangeable Seller's Certificate; provided, however, such
-------- -------
interests shall not represent any interest in the Cash Collateral Account, the
Principal Funding Account or the Reserve Account or funds on deposit therein.
Section 4.03 Collections and Allocations.
---------------------------
(a) Collections. The Trustee will apply or will instruct the
-----------
Servicer to apply all funds on deposit in the Collection Account as described in
this Article IV.
(b) Payments to the Holder of the Exchangeable Seller's Certificate.
---------------------------------------------------------------
On each Determination Date preceding a Distribution Date, the Servicer shall
determine whether a Liquidation Event is deemed to have occurred in the Due
Period relating to such Determination
21
<PAGE>
Date with respect to the Series 1998-V Certificates, and the Servicer shall
allocate Collections with respect to the Due Period for such Distribution Date
to the Holder of the Exchangeable Seller's Certificate as follows:
(i) for Determination Dates with respect to the Revolving
Period, in addition to amounts allocated to the Holder of the Exchangeable
Seller's Certificate pursuant to subsection 4.01(d) of the Agreement, an
amount equal to the Invested Percentage for the Distribution Date of the
aggregate amount of such Collections in respect of Principal Receivables,
but not exceeding the First Chicago Amount (determined as of such
Determination Date after giving effect to any Principal Receivables
transferred to the Trust for the Due Period relating to such Determination
Date), and excluding any such Collections to be applied as Collateral
Monthly Principal pursuant to Section 4.07 and any Reallocated Principal
Collections;
(ii) for Determination Dates with respect to the Accumulation
Period, an amount equal to the excess of the Invested Percentage for the
Distribution Date of the aggregate amount of such Collections in respect of
Principal Receivables over the related Controlled Deposit Amount, but not
exceeding the First Chicago Amount (determined as of such Determination
Date after giving effect to any Principal Receivables transferred to the
Trust for the Due Period relating to such Determination Date), and
excluding any such Collections to be applied as Collateral Monthly
Principal pursuant to Section 4.07 and any Reallocated Principal
Collections; and
(iii) for Determination Dates with respect to any Rapid
Amortization Period, the amount of payments made to the Holder of the
Exchangeable Seller's Certificate shall be determined only as provided in
subsection 4.01(d) of the Agreement;
provided, however, that in the event that principal shall be payable to or for
- -------- -------
the benefit of other Series on such Distribution Date, and amounts allocable to
such Series
22
<PAGE>
are not sufficient to make the maximum principal payment which could be made
under the terms of the applicable Supplement to the certificateholders of such
Series for such Distribution Date (such deficiencies, "Principal Shortfalls"),
amounts otherwise allocable to the Holder of the Exchangeable Seller's
Certificate pursuant to this subsection 4.03(b) shall instead be paid to or for
the benefit of such other Series on a pro rata basis (based on the numerator
used in calculating the invested percentage of Collections of Principal
Receivables for such Series) if such other Series provide for the sharing of
Collections of Principal Receivables to pay Principal Shortfalls.
The allocations to be made pursuant to this Section 4.03 also apply to
deposits into the Collection Account that are treated as Collections, including
Transfer Deposit Amounts, Excess Finance Charge Collections, Adjustment
Payments, proceeds from the sale, disposition or liquidation of the Receivables
pursuant to Section 9.02, 10.01, 12.01 or 12.02 of the Agreement and Section 4
of this Series Supplement and the Interchange Amount allocable to the Series
1998-V Certificateholders. Such deposits to be treated as Collections will be
allocated as Finance Charge Receivables or Principal Receivables as indicated in
the Agreement. For purposes of this Series Supplement, the Interchange Amount
shall be treated as Finance Charge Receivables, except that a portion of the
Interchange Amount shall be available solely to pay the Servicer the Interchange
Monthly Servicing Fee pursuant to subsection 4.12(b) of the Agreement.
Section 4.04 Determination of Monthly Interest for the Series 1998-V
-------------------------------------------------------
Certificates. (a) The amount of monthly interest ("Class A Monthly Interest")
- ------------
distributable from the Collection Account with respect to the Class A
Certificates on any Distribution Date commencing with the December 1998
Distribution Date shall be an amount equal to the product of (i)(A) a fraction,
the numerator of which is the actual number of days in the related Interest
Period and the denominator of which is 360, times (B) the Class A Certificate
Rate in effect with respect to the related Interest Period, and (ii) the Class A
Invested Amount determined as of the Record Date preceding such Distribution
Date (or in the case of the November 1998 Distribution Date, the Class A Initial
Invested Amount); provided, however, that Class A Monthly Interest for the
-------- -------
December 1998 Distribution Date shall be
23
<PAGE>
the sum of the amounts calculated pursuant to clauses (i) and (ii) above for the
period from and including the Closing Date to but excluding the November 1998
Distribution Date and for the period from and including the November 1998
Distribution Date to but excluding the December 1998 Distribution Date.
On each Determination Date preceding a Distribution Date, commencing
with the December 1998 Distribution Date, the Servicer shall determine the
amount (the "Class A Interest Shortfall Amount"), if any, of the excess of Class
A Monthly Interest over the amount that will be on deposit in the Collection
----
Account on such Distribution Date and available for payment of Class A Monthly
Interest. An additional amount ("Class A Additional Interest") shall be payable
as provided herein with respect to Class A Certificates on each Distribution
Date following such Distribution Date, to and including the Distribution Date on
which such Class A Interest Shortfall Amount is paid in full, in an amount equal
to the product of (i)(A) a fraction, the numerator of which is the actual number
of days in the related Interest Period and the denominator of which is 360,
times (B) the Class A Certificate Rate in effect with respect to the related
Interest Period plus 2% per annum and (ii) the unpaid portion of such Class A
Interest Shortfall Amount.
(b) The amount of monthly interest ("Collateral Monthly Interest")
distributable from the Collection Account with respect to the Collateral
Interest on any Distribution Date commencing with the December 1998 Distribution
Date shall be an amount equal to the product of (i)(A) a fraction, the numerator
of which is the actual number of days in the related Interest Period and the
denominator of which is 360, times (B) the Collateral Rate in effect with
respect to the related Interest Period and (ii) the Collateral Invested Amount
determined as of the Record Date preceding such Distribution Date (or in the
case of the November 1998 Distribution Date, the Collateral Initial Invested
Amount); provided, however, that Collateral Monthly Interest for the December
-------- -------
1998 Distribution Date shall be the sum of the amounts calculated pursuant to
clauses (i) and (ii) above for the period from and including the Closing Date to
but excluding the November 1998 Distribution Date and for the period from and
including the November 1998 Distribution Date to but excluding the December 1998
Distribution Date.
24
<PAGE>
On each Determination Date preceding a Distribution Date, commencing
with the December 1998 Distribution Date, the Servicer shall determine the
amount (the "Collateral Interest Shortfall Amount"), if any, of the excess of
Collateral Monthly Interest over the amount that will be on deposit in the
----
Collection Account on such Distribution Date and available for payment of
Collateral Monthly Interest. An additional amount ("Collateral Additional
Interest") shall be payable as provided herein with respect to the Collateral
Interest on each Distribution Date following such Distribution Date, to and
including the Distribution Date on which such Collateral Interest Shortfall
Amount is paid in full, in an amount equal to the product of (i)(A) a fraction,
the numerator of which is the actual number of days in the related Interest
Period and the denominator of which is 360, times (B) the Collateral Rate in
effect with respect to the related Interest Period and (ii) the unpaid portion
of such Collateral Interest Shortfall Amount.
(c) Collections of Finance Charge Receivables allocable to any Series
issued on or after May 25, 1994 (including, but not limited to, the Series J
Certificates, the Series K Certificates, the Series L Certificates, the Series M
Certificates, the Series N Certificates, the Series O Certificates, the Series P
Certificates, the Series Q Certificates, the Series R Certificates, the Series S
Certificates, the Series T Certificates and the Series U Certificates) and the
proceeds thereof that would otherwise be payable to the Seller (whether pursuant
to the Supplement relating to such Series or an agreement relating to the
Enhancement for such Series), excluding any payments made to the Seller in its
capacity as Servicer or any payments made with respect to the Investor Default
Amount, shall, unless the Supplement with respect to any such Series specifies
otherwise, be payable on each Distribution Date on a pro rata basis (based on
the numerator used in calculating the invested percentage of Collections of
Finance Charge Receivables) to or for the benefit of other Series issued on or
after May 25, 1994 (including, but not limited to, the Series J Certificates,
the Series K Certificates, the Series L Certificates, the Series M Certificates,
the Series N Certificates, the Series O Certificates, the Series P Certificates,
the Series Q Certificates, the Series R Certificates, the Series S Certificates,
the Series T Certificates and the Series U Certificates) experiencing shortfalls
in amounts payable from Collec-
25
<PAGE>
tions of Finance Charge Receivables allocable to such other Series as provided
for pursuant to the Supplement for any such Series, so long as the Supplement
for any such other Series permits and provides for the payment of such excess
Collections of Finance Charge Receivables and the proceeds thereof ("Excess
Finance Charge Collections") to such Series. The shortfall payable from Excess
Finance Charge Collections allocable to the Series 1998-V Certificates for any
Distribution Date (the "Shortfall Amount") shall equal the amount by which the
sum of (i) the Class A Monthly Interest, (ii) any Class A Monthly Interest
previously due but not paid to the Class A Certificateholders, (iii) any Class A
Additional Interest, (iv) the Class A Investor Default Amount, (v) to the extent
payable to a Successor Servicer that is not an Affiliate of the Seller, the
Monthly Servicing Fee, (vi) any unreimbursed Class A Investor Charge-Offs, (vii)
the Collateral Monthly Interest, (viii) any Collateral Monthly Interest
previously due but not paid to the Collateral Interest Holder, (ix) any
Collateral Additional Interest, (x) the Collateral Default Amount and (xi) the
amounts, if any, payable pursuant to subsections 4.09(e), 4.09(f), 4.09(g) and
4.09(h), exceeds the Floating Allocation Percentage of Collections in respect of
Finance Charge Receivables allocable to the Series 1998-V Certificates. Such
Excess Finance Charge Collections shall be available only to pay the amounts
referred to in clauses (i) through (xi) above.
The Seller hereby directs the Servicer to direct the Trustee to
deposit any amounts payable to FCCNB pursuant to Section 2.11 of the Loan
Agreement with respect to any Distribution Date, to the extent such amounts
constitute Excess Finance Charge Collections for other Series, into the
Collection Account for payment on such Distribution Date.
Section 4.05 Determination of Monthly Principal for the Series 1998-V
--------------------------------------------------------
Certificates. (a) The amount of monthly principal ("Class A Monthly
- ------------
Principal") distributable from the Collection Account with respect to the Class
A Certificates on each Distribution Date beginning with the earlier to occur of
(i) the first Distribution Date to occur with respect to the Rapid Amortization
Period and (ii) the first Distribution Date to occur with respect to the
Accumulation Period shall be equal to Class A Available Principal Collections;
provided, however, that for each Distribution Date with respect to the
- -------- -------
Accumulation Period (unless and until a Liquidation Event
26
<PAGE>
is deemed to have occurred), Class A Monthly Principal shall not exceed the
Controlled Deposit Amount for such Distribution Date; provided, further, that
-------- -------
with respect to any Distribution Date, Class A Monthly Principal shall not
exceed the Class A Adjusted Invested Amount.
(b) The amount of monthly principal ("Collateral Monthly Principal")
distributable from the Collection Account with respect to the Collateral
Interest on each Distribution Date beginning with the December 1998 Distribution
Date shall be equal to an amount calculated as follows:
(i) on any Distribution Date prior to the Distribution Date on
which the Class A Invested Amount is paid in full, the lesser of (A) the
sum of (x) Collateral Principal Collections with respect to such
Distribution Date not applied to Class A Monthly Principal on such
Distribution Date and (y) Class A Available Principal Collections not
applied to Class A Monthly Principal on such Distribution Date and (B) the
Enhancement Surplus on such Distribution Date (including any Enhancement
Surplus which will result from the transfer of funds to the Cash Collateral
Account pursuant to Section 2.11(d) of the Loan Agreement and subsection
4.11(d) of the Agreement); and
(ii) on and after the Distribution Date on which the Class A
Invested Amount is paid in full, the sum of (A) Collateral Principal
Collections with respect to such Distribution Date not applied to Class A
Monthly Principal on such Distribution Date and (B) Class A Available
Principal Collections not applied to Class A Monthly Principal on such
Distribution Date;
(iii) notwithstanding the foregoing subsections (i) and (ii) of
this subsection 4.05(b), on any Distribution Date prior to the commencement
of a Rapid Amortization Period and after the determination by the Seller to
make a Conversion Deposit pursuant to, and in accordance with, subsection
4.11(e), the sum of (A) Collateral Principal Collections with respect to
such Distribution Date not applied to Class A Monthly Principal on such
Distribution
27
<PAGE>
Date and (B) Class A Available Principal Collections not applied to Class A
Monthly Principal on such Distribution Date;
provided, however, that with respect to any Distribution Date, Collateral
- -------- -------
Monthly Principal shall not exceed the Collateral Invested Amount.
(c) Collections of Principal Receivables allocable to a Series (other
than any Series which specifically prohibits sharing of Excess Principal
Collections) with respect to any Distribution Date but not payable to or for the
benefit of such Series on such Distribution Date ("Excess Principal
Collections") shall be payable on such Distribution Date on a pro rata basis
(based on the numerator used in calculating the invested percentage of
Collections of Principal Receivables) to or for the benefit of other Series
experiencing a Principal Shortfall for such Distribution Date, provided that the
Supplement for such other Series permits the payment of Excess Principal
Collections to such Series.
Section 4.06 Coverage of Required Amount for the Class A
-------------------------------------------
Certificates. (a) On each Determination Date, the Servicer shall determine the
- ------------
amount (the "Class A Required Amount"), if any, by which the sum of (i) Class A
Monthly Interest for the related Distribution Date payable with respect to the
Class A Invested Amount, (ii) any Class A Monthly Interest previously due but
not paid to the Class A Certificateholders, (iii) any Class A Additional
Interest, (iv) the Class A Investor Default Amount, if any, for such
Distribution Date and (v) to the extent payable to a Successor Servicer that is
not an Affiliate of the Seller, the Monthly Servicing Fee (the sum of (i)
through (v), the "Class A Covered Amount") exceeds the sum of (x) Class A
Available Funds for such Distribution Date which are available to pay (i)
through (v) (after taking into consideration the pro rata portion of the Monthly
Servicing Fee payable in accordance with the first proviso to subsection 4.07(a)
of the Agreement), (y) Excess Spread available pursuant to Section 4.09 of the
Agreement and (z) Excess Finance Charge Collections allocable to the Series
1998-V Certificates pursuant to subsection 4.04(c) of the Agreement (up to the
Shortfall Amount). In the event that the Class A Required Amount is greater
than zero, the Servicer shall give written notice to the Trustee of such
positive Class A Required Amount, specifying therein the amount to be withdrawn
pursuant to this subsection 4.06(a), on or
28
<PAGE>
after the Determination Date but in no event later than three Business Days
prior to such Distribution Date. On the Transfer Date, the Trustee (or the
Servicer on the Trustee's behalf) shall withdraw the Withdrawal Amount from the
Cash Collateral Account and immediately deposit such amount into the Collection
Account. In the event that the Class A Required Amount exceeds the Available
Cash Collateral Amount with respect to such Distribution Date, Reallocated
Principal Collections with respect to such Distribution Date in an amount equal
to such excess shall be distributed from the Collection Account on such
Distribution Date pursuant to Section 4.10.
(b) If the Servicer fails to make any payment or deposit (other than
as required by Sections 2.07, 7.04, 8.04, 9.02 (upon receipt of sale proceeds
thereunder) and 10.01 of the Agreement) required to be made by the Servicer at
the time specified in the Agreement (including applicable grace periods), the
Trustee, without instruction from the Servicer, shall make such payment or
deposit from the Collection Account.
If the Servicer fails to give the notice of a positive Class A
Required Amount required to be given by the Servicer pursuant to subsection
4.06(a) of the Agreement, the Trustee shall make a withdrawal from the Cash
Collateral Account in accordance with the certificate delivered pursuant to
subsection 3.04(b) of the Agreement without instruction from the Servicer. In
the event that the Servicer fails to deliver the certificate required by
subsection 3.04(b) of the Agreement, no withdrawal from the Cash Collateral
Account shall be made; provided, however, that if the Trustee, in its sole
-------- -------
discretion, is able to determine and confirm the amount of interest payable
pursuant to subsection 4.07(a)(i) of the Agreement, the Trustee shall, if
necessary after application of the funds in the Collection Account, make a
withdrawal from the Cash Collateral Account in the amount of the interest
shortfall.
The Servicer shall, upon request of the Trustee, promptly provide the
Trustee with all information necessary to allow the Trustee to comply with the
provisions of this subsection 4.06(b).
Section 4.07 Application of Class A Available Funds, Collateral
--------------------------------------------------
Available Funds, Class A Available Principal Collections and Collateral
- -----------------------------------------------------------------------
Principal Collections on Deposit in the Collection Account for the Series
- -------------------------------------------------------------------------
29
<PAGE>
1998-V Certificates. The Trustee shall apply or shall cause the Servicer to
- -------------------
apply (provided FCCNB is the Servicer and the Collection Account is maintained
with FNBC) or shall cause the Paying Agent, to the extent Section 6.06 of the
Agreement is applicable, to apply, on each Distribution Date, Class A Available
Funds, Collateral Available Funds, Class A Available Principal Collections and
Collateral Principal Collections on deposit in the Collection Account with
respect to such Distribution Date to make the following distributions.
(a) An amount equal to Class A Available Funds with respect to such
Distribution Date shall be distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
----
previously due but not distributed on a prior Distribution Date, plus the
----
amount of any Class A Additional Interest for such Distribution Date, shall
be distributed by the Servicer or the Trustee to the Paying Agent for
payment to the Class A Certificateholders;
(ii) an amount equal to the Monthly Servicing Fee for such
Distribution Date shall be distributed to the Servicer;
(iii) an amount equal to the Class A Investor Default Amount for
such Distribution Date, if any, shall be treated as a portion of Class A
Available Principal Collections; and
(iv) the balance shall constitute Excess Spread and shall be
distributed pursuant to Section 4.09;
provided, however, in the event that there are insufficient funds (before giving
- -------- -------
effect to any Withdrawal Amount payable from the Cash Collateral Account
pursuant to Section 4.06, Excess Spread payable pursuant to Section 4.09, Excess
Finance Charge Collections allocable to the Series 1998-V Certificates pursuant
to subsection 4.04(c) or any Reallocated Principal Collections available
pursuant to subsection 4.10(a)) to pay in full the amounts distributable
pursuant to subsections 4.07(a)(i),
30
<PAGE>
4.07(a)(ii) and 4.07(a)(iii), such amounts shall be paid, to the extent of such
funds, on a pro rata basis.
(b) An amount equal to Collateral Available Funds with respect to
such Distribution Date shall constitute Excess Spread and shall be distributed
pursuant to Section 4.09
(c) On each Distribution Date with respect to the Revolving Period,
an amount equal to Class A Available Principal Collections, to the extent not
allocated in accordance with subsection 4.05(b), shall be applied as set forth
in subsection 4.03(b).
(d) On each Distribution Date with respect to the Revolving Period,
an amount equal to Collateral Principal Collections for the related Due Period
plus any amount of Class A Available Principal Collections available therefor in
accordance with subsection 4.05(b) shall be distributed and applied in the
following priority:
(i) an amount equal to Collateral Monthly Principal for such
Distribution Date shall be applied in accordance with the Loan Agreement
or, if a Conversion Event shall have occurred, deposited in the Cash
Collateral Account pursuant to subsection 4.11(e); and
(ii) the balance shall be treated as a portion of Class A
Available Principal Collections for such Distribution Date.
(e) On each Distribution Date with respect to the Accumulation Period
or the Rapid Amortization Period, an amount equal to the Class A Available
Principal Collections for the related Due Period shall be distributed and
applied in the following priority:
(i) an amount equal to Class A Monthly Principal for such
Distribution Date shall be (x) during the Accumulation Period, deposited
into the Principal Funding Account to be distributed by the Servicer or the
Trustee to the Paying Agent for payment to Class A Certificateholders on
the earlier of the Class A Scheduled Payment Date or the first Distribution
Date with respect to the Rapid Amortization Period and (y) during the Rapid
Amortiza-
31
<PAGE>
tion Period, distributed by the Servicer or the Trustee to the Paying Agent
for payment to the Class A Certificateholders; and
(ii) the balance shall be included in Collateral Monthly
Principal to the extent permitted in accordance with subsection 4.05(b).
(f) On each Distribution Date with respect to the Accumulation
Period, an amount equal to Collateral Principal Collections for the related Due
Period plus any amount of Class A Available Principal Collections included in
Collateral Monthly Principal pursuant to subsection 4.07(e)(ii) shall be
distributed and applied in the following priority:
(i) an amount equal to Collateral Monthly Principal for such
Distribution Date shall be applied in accordance with the Loan Agreement
or, if a Conversion Event shall have occurred, deposited in the Cash
Collateral Account pursuant to subsection 4.11(e); and
(ii) the balance shall be treated as a portion of Class A
Available Principal Collections for such Distribution Date.
(g) On each Distribution Date with respect to the Rapid Amortization
Period, an amount equal to Collateral Principal Collections for the related Due
Period shall be treated as a portion of Class A Available Principal Collections
for such Distribution Date.
(h) The distributions to be made pursuant to this Section 4.07 are
subject to the provisions of Sections 2.07, 4.08, 9.02, 10.01, 12.01 and 12.02
of the Agreement and Section 4 of this Series Supplement.
Section 4.08 Investor Charge-Offs. (a) On each Distribution Date,
--------------------
the Servicer shall calculate the Class A Investor Default Amount, if any, for
such Distribution Date. If on any Distribution Date, the Class A Investor
Default Amount exceeds the Available Cash Collateral Amount and the amount of
Reallocated Principal Collections with respect to such Due Period available
therefor, then the Collateral Invested Amount (after giving effect to any
reductions pursuant to subsections (b) and (c) below) shall be reduced by the
amount of such
32
<PAGE>
excess, but not by more than the Class A Investor Default Amount for such
Distribution Date. In the event that such reduction would cause the Collateral
Invested Amount to be a negative number, the Collateral Invested Amount shall be
reduced to zero and the Class A Invested Amount shall be reduced by the amount
by which the Collateral Invested Amount would have been reduced below zero, but
not by more than the Class A Investor Default Amount for such Distribution Date
(a "Class A Investor Charge-Off"). Class A Investor Charge-Offs shall thereafter
be reimbursed and the Class A Invested Amount increased (but not by an amount in
excess of the aggregate Class A Investor Charge-Offs) on any Distribution Date
by the amount of Excess Spread available for such purpose pursuant to Section
4.09.
(b) If, on any Distribution Date, Reallocated Principal Collections
for such Distribution Date are applied pursuant to subsection 4.10(a), then the
Collateral Invested Amount shall be reduced by the amount of such Reallocated
Principal Collections so applied.
(c) If, on any Distribution Date, the Collateral Default Amount
exceeds the amount of Excess Spread available in respect thereof pursuant to
Section 4.09 on such Distribution Date, then the Collateral Invested Amount
shall be reduced by the amount of such excess.
Section 4.09 Excess Spread. The Trustee shall apply or shall cause
-------------
the Servicer to apply, on each Distribution Date, Excess Spread to make the
following distributions in the following priority:
(a) an amount equal to the amount by which the Class A Covered
Amount with respect to such Distribution Date exceeds Class A Available
Funds with respect to such Distribution Date shall be distributed to fund
any such deficiency, in the order of priority of the enumerated items in
the definition of Class A Covered Amount;
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed shall be treated as a
portion of Class A Available Principal Collections for such Distribution
Date;
33
<PAGE>
(c) an amount equal to Collateral Monthly Interest for such
Distribution Date, plus the amount of any Collateral Monthly Interest
----
previously due but not distributed on a prior Distribution Date, plus the
----
amount of any Collateral Additional Interest for such Distribution Date,
shall be applied in accordance with the Loan Agreement;
(d) an amount equal to the Collateral Default Amount for such
Distribution Date shall be treated as a portion of Collateral Principal
Collections with respect to such Distribution Date;
(e) an amount equal to the aggregate amount by which the
Collateral Invested Amount has been reduced pursuant to clause (b) of the
definition of "Collateral Invested Amount" (but not in excess of the
aggregate amount of such reductions which have not been previously
reimbursed pursuant to this subsection 4.09(e) or Section 2.12(b) of the
Loan Agreement) shall be applied in accordance with the Loan Agreement;
(f) an amount up to the excess, if any, of the Required Cash
Collateral Amount over the Adjusted Available Cash Collateral Amount
(without giving effect to any deposit made on such date hereunder or any
deposit pursuant to subsection 4.11(d) or 4.11(e)) shall be deposited into
the Cash Collateral Account;
(g) an amount equal to any unpaid portion of the Monthly
Servicing Fee for such Distribution Date, plus the amount of any Monthly
----
Servicing Fee previously due but not distributed to the Servicer on a prior
Distribution Date, shall be distributed to the Servicer;
(h) on each Distribution Date from and after the Reserve Account
Funding Date, but prior to the date on which the Reserve Account is
terminated as set forth in subsection 4.16(f), an amount up to the excess,
if any, of the Required Reserve Account Amount over the Available Reserve
Account Amount shall be deposited into the Reserve Account; and
(i) the balance shall be applied in accordance with the Loan
Agreement.
34
<PAGE>
Section 4.10 Reallocated Principal Collections. The Trustee shall
---------------------------------
apply or shall cause the Servicer to apply on each Distribution Date, to the
extent required hereunder, the Collateral Principal Percentage of Collections of
Principal Receivables with respect to such Distribution Date, to make the
following distributions in the following priority:
(a) an amount equal to the amount by which the Class A Covered
Amount with respect to such Distribution Date exceeds the sum of (x) the
amount of Class A Available Funds, Excess Spread and Excess Finance Charge
Collections allocable to the Series 1998-V Certificates with respect to
such Distribution Date and (y) the Available Cash Collateral Amount with
respect to such Distribution Date shall be distributed by the Trustee to
fund any such deficiency in the order of priority of the enumerated items
in the definition of Class A Covered Amount; and
(b) the balance of such Reallocated Principal Collections shall
be treated as a portion of Collateral Principal Collections to be applied
in accordance with Section 4.07.
Section 4.11 Cash Collateral Account.
-----------------------
(a) Establishment of Cash Collateral Account. The Seller hereby
----------------------------------------
directs the Trustee, for the benefit of the Series 1998-V Certificateholders, to
establish and maintain or cause to be established and maintained in the name of
the Trustee, on behalf of the Series 1998-V Certificateholders, with an Eligible
Institution (which initially shall be FNBC) a segregated trust account (the
"Cash Collateral Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 1998-V
Certificateholders. The Seller does hereby transfer, assign, set over and
otherwise convey to the Trustee for the benefit of the Series 1998-V
Certificateholders, without recourse, all of its right, title and interest in,
to and under the Cash Collateral Account, any Eligible Investments on deposit
therein and any proceeds of the foregoing. The Seller, to the extent of any
interest it may have in the Cash Collateral Account, Eligible Investments or
other amounts on deposit therein and the proceeds thereof, hereby grants a
security interest in the Cash Collateral Account, Eligible Investments or
35
<PAGE>
other amounts on deposit therein and proceeds thereof to the Trustee for the
benefit of the Series 1998-V Certificateholders, and the parties intend that the
grant contained in this subsection 4.11(a) constitute a security agreement under
the UCC to secure the obligations of the Seller and the Trustee herein. The
Trustee shall possess all right, title and interest in all Eligible Investments
or other amounts on deposit from time to time in the Cash Collateral Account and
in all proceeds thereof. The Cash Collateral Account shall be under the sole
dominion and control of the Trustee for the benefit of the Series 1998-V
Certificateholders. If, at any time, the institution holding the Cash Collateral
Account ceases to be an Eligible Institution, the Trustee (or the Servicer on
its behalf) shall within 10 Business Days (or within 5 Business Days if such
institution is an Affiliate of First Chicago) establish a new Cash Collateral
Account meeting the conditions specified above with an Eligible Institution,
transfer any cash and/or any Eligible Investments or other amounts on deposit in
the Cash Collateral Account to such new Cash Collateral Account and from the
date such new Cash Collateral Account is established, it shall be the "Cash
Collateral Account." The Seller hereby directs the Trustee (or the Servicer on
the Trustee's behalf) to deposit $11,428,572 in the Cash Collateral Account on
the Closing Date, and the Trustee hereby acknowledges receipt of such deposit
from the Seller. Pursuant to the authority granted to the Servicer in subsection
3.01(b), the Servicer shall have the power, revocable by the Trustee, to
instruct the Trustee to make withdrawals and payments from the Cash Collateral
Account for the purposes of carrying out the Servicer's and the Trustee's duties
hereunder and under the Loan Agreement. Withdrawals from the Cash Collateral
Account shall be made only as provided herein.
(b) Administration of the Cash Collateral Account. Funds on deposit
---------------------------------------------
in the Cash Collateral Account shall at all times be invested by the Trustee in
Eligible Investments, which may be obligations of Affiliates of the Seller or
the Servicer and which may, with the written consent of Standard & Poor's, be
rated A-1 instead of A-1+. The Seller shall direct the Trustee as to the
selection of such Eligible Investments. Funds on deposit in the Cash Collateral
Account for any Distribution Date, after giving effect to any deposits to or
withdrawals from the Cash Collateral Account for such Distribution Date, shall
be invested in Eligible Investments that will mature so that such funds will be
available for withdrawal on the following Transfer Date. The proceeds of any
such investments shall at all times be invested in Eligible Investments that
will mature so that such funds will be available for with-
36
<PAGE>
drawal on or prior to the Transfer Date immediately following the date of such
investment. The Seller shall furnish or cause to be furnished to the Trustee a
monthly statement reporting all activity with respect to the Cash Collateral
Account. The Trustee shall maintain for the benefit of the Series 1998-V
Certificateholders possession, itself or through a bailee, of the negotiable
instruments or securities, if any, evidencing the Eligible Investments described
in clause (a) of the definition thereof from the time of purchase thereof until
the time of sale or maturity. On each Transfer Date, all interest and other
investment earnings (net of losses and investment expenses) earned during the
period since the preceding Transfer Date on funds on deposit in the Cash
Collateral Account shall be paid to, or upon the order of, the Seller. In
addition, after the occurrence of a Conversion Deposit, any Cash Collateral
Account Surplus shall be withdrawn on any Transfer Date for application in
accordance with the Loan Agreement. For purposes of determining the availability
of funds or the balances in the Cash Collateral Account for any reason under
this Agreement, all investment earnings on such funds shall be deemed not to be
available or on deposit.
(c) Final Payment of the Series 1998-V Certificates. The Trustee
-----------------------------------------------
shall, no later than the Termination Payment Date, upon the prior payment of all
amounts owing to the Class A Certificateholders and the Servicer and payable
from the Cash Collateral Account as provided herein, withdraw from the Cash
Collateral Account all amounts on deposit in the Cash Collateral Account for
application in accordance with Section 2.11 of the Loan Agreement.
(d) Optional Deposit. Pursuant to the terms of and subject to the
----------------
limitation contained in the Loan Agreement, the Seller, at its option, may at
any time prior to the commencement of the Rapid Amortization Period elect to
cause one or more additional deposits to be made into the Cash Collateral
Account (each, an "Optional Deposit"). The Seller may cause any such deposit to
be made on a Distribution Date after forwarding notice of such deposit
(including the amount thereof) to the Trustee in accordance with Section 3.04
relating to the furnishing of monthly reports to the Trustee. Any such
37
<PAGE>
deposit shall be deemed to be available in the Cash Collateral Account for
purposes of calculating any Enhancement Surplus for such related Distribution
Date, but shall not be included in the Available Cash Collateral Amount for such
Distribution Date, but shall be included in the Available Cash Collateral Amount
for the subsequent Distribution Date.
(e) Conversion Deposit. The Seller, at its option, may at any time
------------------
following the occurrence of a Conversion Event and prior to the commencement of
the Rapid Amortization Period elect to cause Collateral Monthly Principal with
respect to a Distribution Date (in an amount calculated pursuant to subsection
4.05(b)(iii)) to be deposited into the Cash Collateral Account (each such
deposit, a "Conversion Deposit"); provided, however, that the Trustee shall have
-------- -------
received written confirmation from each Rating Agency which has rated any
outstanding Series that such Rating Agency will not reduce or withdraw its
rating on any outstanding Series rated by it as a result of the making of
Conversion Deposits. The Seller may cause any such deposit to be made on a
Distribution Date after forwarding notice of such deposit to the Trustee in
accordance with Section 3.04 relating to the furnishing of monthly reports to
the Trustee. Any such deposit shall not be included in the Available Cash
Collateral Amount for such Distribution Date, but shall be included in the
Available Cash Collateral Amount for the subsequent Distribution Date.
(f) Tax Reporting. The Seller shall report all investment earnings
-------------
on amounts from time to time on deposit in the Cash Collateral Account as its
income for applicable federal, state and local tax purposes.
Section 4.12 Interchange; Interchange Monthly Servicing Fee. (a) On
----------------------------------------------
or prior to each Determination Date, the Seller shall notify the Servicer of the
Interchange Amount to be included as Collections of Finance Charge Receivables
with respect to the related Distribution Date. Not later than 12:00 noon,
Chicago, Illinois time, on each Transfer Date, the Seller shall deposit into the
Collection Account in immediately available funds the Interchange Amount (less
the Interchange Monthly Servicing Fee) to be included as Finance Charge
Receivables with respect to the preceding Due Period.
38
<PAGE>
(b) In addition to the Monthly Servicing Fee payable pursuant to
Section 4.07 of the Agreement and the remaining Monthly Servicing Fee payable
pursuant to Section 4.09 of the Agreement, the Servicer shall be entitled to
receive on each Transfer Date a servicing fee payable solely from the
Interchange Amount equal to the lesser of (a) the Interchange Amount with
respect to the related Distribution Date and (b) one-twelfth of the product of
1.25% per annum and the Adjusted Invested Amount as of the Record Date for such
Distribution Date (or, in the case of the first Distribution Date, the Initial
Invested Amount) (such servicing fee, the "Interchange Monthly Servicing Fee").
Section 4.13 Determination of LIBOR. (b) On each LIBOR
----------------------
Determination Date, the Servicer will determine LIBOR for the Interest Period
(or portion thereof, in the case of the November 9, 1998 and November 12, 1998
LIBOR Determination Dates) following such LIBOR Determination Date on the basis
of the rate for deposits in United States Dollars for a one-month period
following such LIBOR Determination Date which appears on Telerate Page 3750 as
of 11:00 A.M. (London time) on such LIBOR Determination Date.
(c) If, on any LIBOR Determination Date, such rate does not appear on
Telerate Page 3750, LIBOR will be determined on the basis of the rates at which
deposits for United States Dollars are offered by at least two of the Reference
Banks at approximately 11:00 A.M. (London time) on such LIBOR Determination Date
to prime banks in the London interbank market for the one-month period following
such LIBOR Determination Date. The Servicer shall request the principal London
office of each of the Reference
39
<PAGE>
Banks to provide a quotation of its rate. If at least two such quotations are
provided, LIBOR for such LIBOR Determination Date shall be the arithmetic mean
of such quotations (rounded up, if necessary, to the nearest multiple of 0.0625%
per annum).
(d) If, on any LIBOR Determination Date, only one or none of the
Reference Banks provides such offered quotations, LIBOR will be the rate per
annum (rounded, as aforesaid) that the Servicer determines to be either (x) the
arithmetic mean of the offered quotations that leading banks in the City of New
York selected by the Servicer are quoting on the relevant LIBOR Determination
Date for one-month United States Dollar deposits to the principal London office
of each of the Reference Banks or those of them (being at least two in number)
to which such offered quotations are, in the opinion of the Servicer, being so
quoted or (y) in the event that the Servicer can determine no such arithmetic
mean, the arithmetic mean of the offered quotations that leading banks in the
City of New York selected by the Servicer are quoting on such LIBOR
Determination Date to leading European banks for one-month United States Dollar
deposits; or
(e) If, on the LIBOR Determination Date, the banks selected as
aforesaid by the Servicer are not quoting as described in clause (c) above,
LIBOR for such Interest Period will be LIBOR as determined on the previous LIBOR
Determination Date.
Section 4.14 Postponement of Accumulation Period. The Accumulation
-----------------------------------
Period is scheduled to commence on the first day of the Due Period relating to
the November 2000 Distribution Date; provided, however, that, if the
-------- -------
Accumulation Period Length (determined as described below) is less than 12
monthly periods, upon notice to the Trustee, the Seller, each Rating Agency and
the Collateral Interest Holder, the Servicer, at its option, may elect to modify
the date on which the Accumulation Period actually commences to the first day of
the Due Period which ends in the month that is at least the number of calendar
months prior to the calendar month in which the Class A Scheduled Payment Date
occurs equal to the Accumulation Period Length; provided, however, that (i) the
length of the Accumulation Period shall not be less than one monthly period and
(ii) notwithstanding any other provision hereof to the contrary, no election to
postpone the commencement of the Accumulation Period shall be made after a
Liquidation Event shall have occurred and is continuing with respect to any
other Series. On the Determination Date with respect to the October 2000
Distribution Date, the Servicer shall determine the "Accumulation Period
Length," which shall equal the number of monthly periods such that the
Accumulation Period Amount for the Due Period relating to the Class A Scheduled
Payment Date, when aggregated with the Accumulation Period Amounts for each
preceding Due Period,
40
<PAGE>
shall equal or exceed the Class A Initial Invested Amount. Any notice by the
Servicer electing to modify the commencement of the Accumulation Period pursuant
to this Section shall specify (i) the Accumulation Period Length, (ii) the
commencement date of the Accumulation Period and (iii) the Controlled
Accumulation Amount with respect to each Due Period preceding the Class A
Scheduled Payment Date.
Section 4.15 Principal Funding Account. (a) The Seller hereby
-------------------------
directs the Trustee, for the benefit of the Series 1998-V Certificateholders, to
establish and maintain or cause to be established and maintained in the name of
the Trustee, on behalf of the Series 1998-V Certificateholders, with an Eligible
Institution (which initially shall be FNBC) a segregated trust account (the
"Principal Funding Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 1998-V
Certificateholders. The Trustee shall possess all right, title and interest in
all Eligible Investments or other amounts on deposit from time to time in the
Principal Funding Account and in all proceeds thereof. The Principal Funding
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Series 1998-V Certificateholders. If, at any time, the
institution holding the Principal Funding Account ceases to be an Eligible
Institution, the Trustee (or the Servicer on its behalf) shall within 10
Business Days establish a new Principal Funding Account meeting the conditions
specified above with an Eligible Institution, and shall transfer any cash and/or
any Eligible Investments or other amounts to such new Principal Funding Account.
Pursuant to the authority granted to the Servicer in subsection 3.01(b), the
Servicer shall have the power, revocable by the Trustee, (i) to make
withdrawals, or to instruct the Trustee to make withdrawals, from the Principal
Funding Account from time to time, in the amounts and for the purposes set forth
herein and (ii) on each Distribution Date (from and after the commencement of
the Accumulation Period) prior to the termination of the Principal Funding
Account, to make deposits, or to instruct the Trustee to make deposits, into the
Principal Funding Account in the amounts specified in, and otherwise in
accordance with, subsection 4.07(e).
(b) Funds on deposit in the Principal Funding Account shall at all
times be invested by the Trustee in Eligible Investments, which may be
obligations of Affili-
41
<PAGE>
ates of the Seller or the Servicer and which may, with the written consent of
Standard & Poor's, be rated A-1 instead of A-1+. The Seller shall direct the
Trustee as to the selection of such Eligible Investments. Funds on deposit in
the Principal Funding Account on any Distribution Date, after giving effect to
any withdrawals from the Principal Funding Account for such Distribution Date,
shall be invested in such investments that will mature so that such funds will
be available for withdrawal on or prior to the following Transfer Date. The
Trustee shall maintain for the benefit of the Series 1998-V Certificateholders
possession, itself or through a bailee, of the negotiable instruments or
securities, if any, evidencing the Eligible Investments described in clause (a)
of the definition thereof from the time of purchase thereof until the time of
maturity.
(c) On each Transfer Date with respect to the Accumulation Period and
on the first Distribution Date with respect to the Rapid Amortization Period,
the Servicer shall transfer from the Principal Funding Account to the Collection
Account the Principal Funding Investment Proceeds on deposit in the Principal
Funding Account, but not in excess of the Covered Amount, for application as
Class A Available Funds.
(d) Any Excess Principal Funding Investment Proceeds shall be paid
to, or upon the direction of, the Seller on each Transfer Date. An amount equal
to any Principal Funding Investment Shortfall will be deposited into the
Collection Account from the Reserve Account to the extent funds are available
pursuant to subsection 4.16(d). Principal Funding Investment Proceeds
(including reinvested interest) shall not be considered part of the principal
amounts on deposit in the Principal Funding Account hereunder.
(e) On the earliest to occur of (i) the first Distribution Date with
respect to the Rapid Amortization Period and (ii) the Class A Scheduled Payment
Date, the Trustee shall pay, or cause the Servicer to pay, the Principal Funding
Account Balance to Class A Certificateholders in accordance with subsection
5.01(b).
Section 4.16 Reserve Account.
---------------
(a) The Seller hereby directs the Trustee, for the benefit of the
Series 1998-V Certificateholders, to establish and maintain or cause to be
established and
42
<PAGE>
maintained in the name of the Trustee, on behalf of the Series 1998-V
Certificateholders, with an Eligible Institution (which initially shall be FNBC)
a segregated trust account (the "Reserve Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Series 1998-V Certificateholders. The Trustee shall possess all right, title
and interest in all Eligible Investments or other amounts on deposit from time
to time in the Reserve Account and in all proceeds thereof. The Reserve Account
shall be under the sole dominion and control of the Trustee for the benefit of
the Series 1998-V Certificateholders. If, at any time, the institution holding
the Reserve Account ceases to be an Eligible Institution, the Trustee (or the
Servicer on its behalf) shall within 10 Business Days establish a new Reserve
Account meeting the conditions specified above with an Eligible Institution, and
shall transfer any cash and/or any Eligible Investments or other amounts to such
new Reserve Account. Pursuant to the authority granted to the Servicer in
subsection 3.01(b), the Servicer shall have the power, revocable by the Trustee
(i) to make withdrawals, or to instruct the Trustee to make withdrawals, from
the Reserve Account from time to time in an amount up to the Available Reserve
Account Amount at such time, for the purposes set forth herein and (ii) on each
Distribution Date (from and after the Reserve Account Funding Date) prior to
termination of the Reserve Account, to make a deposit, or to instruct the
Trustee to make a deposit, into the Reserve Account in the amount specified in,
and otherwise in accordance with, subsection 4.09 (h).
(b) Funds on deposit in the Reserve Account shall at all times be
invested by the Trustee in Eligible Investments, which may be obligations of
Affiliates of the Seller or the Servicer and which may, with the written consent
of Standard & Poor's, be rated A-1 instead of A-1+. The Seller shall direct the
Trustee as to the selection of such Eligible Investments. Funds on deposit in
the Reserve Account on any Distribution Date, after giving effect to any
withdrawals from the Reserve Account for such Distribution Date, shall be
invested in such investments that will mature so that such funds will be
available for withdrawal on or prior to the following Transfer Date. The
Trustee shall maintain for the benefit of the Series 1998-V Certificateholders
possession, itself or through a bailee, of the negotiable instruments or
securities, if any, evidencing the Eligible Invest-
43
<PAGE>
ments described in clause (a) of the definition thereof from the time of
purchase thereof until the time of maturity. On each Transfer Date, all interest
and earnings (net of losses and investment expenses) accrued since the preceding
Distribution Date on funds on deposit in the Reserve Account shall be retained
in the Reserve Account (to the extent that the Available Reserve Account Amount
is less than the Required Reserve Account Amount) and the balance, if any, shall
be paid to, or upon the direction, of the Seller. For purposes of determining
the availability of funds or the balance in the Reserve Account for any reason
hereunder, except as otherwise provided in the preceding sentence, investment
earnings on such funds shall be deemed not to be available or on deposit.
(c) On or before each Distribution Date with respect to the
Accumulation Period, and on or before the first Distribution Date with respect
to the Rapid Amortization Period, the Servicer shall calculate the "Reserve Draw
Amount" which shall be equal to the Principal Funding Investment Shortfall with
respect to such Distribution Date; provided, however, that such amount will be
-------- -------
reduced to the extent that funds otherwise would be available for deposit in the
Reserve Account under subsection 4.09(h) with respect to such Distribution Date.
(d) In the event that for any Distribution Date the Reserve Draw
Amount is greater than zero, the Reserve Draw Amount, up to the Available
Reserve Account Amount, shall be withdrawn from the Reserve Account on the
Transfer Date by the Servicer or the Trustee (acting in accordance with the
instructions of the Servicer), and deposited into the Collection Account for
application as Class A Available Funds.
(e) In the event that the Reserve Account Surplus for any
Distribution Date, after giving effect to all deposits to and withdrawals from
the Reserve Account with respect to such Distribution Date, is greater than
zero, the Servicer, or the Trustee, acting in accordance with the instructions
of the Servicer, shall withdraw from the Reserve Account on the Transfer Date,
and treat as Excess Spread to be applied in accordance with subsection 4.09(i),
an amount equal to such Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the date on which the Class A
Invested Amount shall be paid in
44
<PAGE>
full, (ii) the first Distribution Date with respect to the Rapid Amortization
Period and (iii) the Scheduled Payment Date, the Trustee, after the prior
payment of all amounts owing to the Series 1998-V Certificateholders that are
payable from the Reserve Account as provided herein, shall withdraw, or cause
the Servicer to withdraw, from the Reserve Account and treat as Excess Spread to
be applied in accordance with subsection 4.09(i), all amounts, if any, on
deposit in the Reserve Account, and the Reserve Account shall thereafter be
deemed to have terminated for all purposes hereunder.
[END OF ARTICLE IV]
SECTION 8. Article V of the Agreement. With respect to the Series
--------------------------
1998-V Certificates, Article V of the Agreement shall read as follows:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Section 5.01 Distributions. (a) On each Payment Date for the Series
-------------
1998-V Certificates, the Paying Agent shall distribute to each Class A
Certificateholder on the preceding Record Date (other than as provided in
Section 12.02 of the Agreement respecting a final distribution) such Class A
Certificateholder's pro rata share (based on the aggregate Undivided Interests
represented by related Class A Certificates held by such Class A
Certificateholder) of the funds on deposit in the Collection Account payable to
such Class A Certificateholders pursuant to the Agreement in respect of
interest.
(b) On the Scheduled Payment Date, on each Distribution Date with
respect to the Rapid Amortization Period and on the Termination Payment Date for
the Series 1998-V Certificates, the Paying Agent shall distribute to each Class
A Certificateholder on the preceding Record Date (other than as provided in
Section 12.02 of the Agreement respecting a final distribution) such Class A
Certificateholder's pro rata share (based on the aggregate Undivided Interests
represented by related Class A Certificates held by such Class A
Certificateholder) of the funds on deposit in the Collec-
45
<PAGE>
tion Account and, if applicable, the Principal Funding Account, payable to such
Class A Certificateholders pursuant to the Agreement in respect of principal;
provided, however, that no distribution pursuant to this subsection 5.01(b) may
- -------- -------
exceed the Class A Invested Amount before giving effect to such distribution.
(c) Distributions to Class A Certificateholders hereunder shall be
made by check mailed to each Class A Certificateholder, except that with respect
to Class A Certificates registered in the name of a Clearing Agency, such
distribution shall be made in immediately available funds.
(d) On each Payment Date for the Series 1998-V Certificates, the
Paying Agent shall distribute to the Collateral Interest Holder on such Payment
Date the funds on deposit in the Collection Account payable to or with respect
to the Collateral Interest for application pursuant to the terms of the Loan
Agreement. Distributions to be made hereunder to or with respect to the
Collateral Interest shall be made in immediately available funds at the
direction of the Collateral Interest Holder.
Section 5.02 Statements to Certificateholders. (a)
--------------------------------
Certificateholders' Payment Date Statement. On each Payment Date, the Paying
- ------------------------------------------
Agent, on behalf of the Trustee, shall forward to each Class A Certificateholder
(or to the Clearing Agency to the extent Section 6.11 of the Agreement applies),
to the Collateral Interest Holder and to each Rating Agency a statement
substantially in the form of Exhibit B prepared by the Servicer setting forth
the information set forth in the Monthly Servicer's Certificate furnished to the
Trustee with respect to such Distribution Date.
(b) Annual Certificateholders' Tax Statement. On or before January
----------------------------------------
31 of each calendar year, beginning with calendar year 1999, the Servicer will
cause the Paying Agent, on behalf of the Trustee, to furnish or cause to be
furnished to each Person who at any time during the preceding calendar year was
a Class A Certificateholder, a statement prepared by the Servicer containing
information relating to the amounts distributed to such Person aggregated for
such calendar year or the applicable portion thereof during which such Person
was a Class A Certificateholder, together with such other information as is
required to be provided by an issuer of
46
<PAGE>
debt under the Internal Revenue Code and such other customary information as is
necessary to enable the Class A Certificateholders to prepare their tax returns.
Such obligation of the Servicer shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the Paying
Agent pursuant to any requirements of the Internal Revenue Code as from time to
time in effect. In addition, the Servicer shall make available to Certificate
Owners of Class A Certificates such information as is required by the Code and
the regulations thereunder to be made available to holders of debt instruments
having the characteristics of the Class A Certificates.
[END OF ARTICLE V]
SECTION 9. Additional Liquidation Events. If any one of the events
-----------------------------
specified in Section 9.01 of the Agreement (after any grace periods or consents
applicable thereto) or any one of the following events shall occur during either
the Revolving Period or the Accumulation Period with respect to the Series 1998-
V Certificates:
(a) failure on the part of the Seller (i) to make any payment or
deposit required by the terms of the Agreement or this Series Supplement on or
before five Business Days after the date such payment or deposit is required to
be made therein or herein, or (ii) duly to observe or perform in any material
respect the covenant of the Seller set forth in subsection 2.08(b) of the
Agreement, or (iii) duly to observe or perform in any material respect any other
covenants or agreements of the Seller set forth in the Agreement or this Series
Supplement, which, in the case of clause (iii), continues unremedied for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Seller by the
Trustee, or to the Seller and the Trustee by a Rating Agency, the Collateral
Interest Holder or the Holders of Class A Certificates evidencing Undivided
Interests aggregating not less than 10% of the Class A Invested Amount;
(b) any representation or warranty made by the Seller in the
Agreement or this Series Supplement or any information contained in a computer
file or microfiche list required to be delivered by the Seller pursuant to
Section 2.01 or 2.05 of the Agreement shall prove
47
<PAGE>
to have been incorrect in any material respect when made or when delivered,
which continues to be incorrect in any material respect for a period of 60 days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Trustee, or to the Seller
and the Trustee by a Rating Agency, the Collateral Interest Holder or the
Holders of Class A Certificates evidencing Undivided Interests aggregating not
less than 10% of the Class A Invested Amount and as a result of which the
interests of the Series 1998-V Certificateholders are materially and adversely
affected; provided, however, that a Liquidation Event pursuant to this
-------- -------
subparagraph 9(b) shall not be deemed to have occurred hereunder with respect to
the Series 1998-V Certificates if the Seller has accepted the transfer of the
related Receivable, or all of such Receivables, if applicable, during such
period (or such longer period as the Trustee may specify), in accordance with
the provisions hereof;
(c) the average Portfolio Yield (the calculation of which shall
include, without limitation, the Interchange Amount as a component of Finance
Charge Receivables) for any three consecutive Due Periods shall be less than the
average of the Base Rates for the related Interest Periods;
(d) the Seller shall fail to convey Additional Accounts to the Trust,
as required by subsection 2.05(a) of the Agreement, (i) in the case of the
calculation provided in subsection 2.05(a)(1) of the Agreement 10 days after the
failure to meet such calculation or (ii) in the case of the calculation provided
in subsection 2.05(a)(2) of the Agreement immediately upon the occurrence of the
failure to meet such calculation;
(e) the Class A Invested Amount shall not be paid in full on the
Class A Scheduled Payment Date; or
(f) any Servicer Default shall occur which would have a material
adverse effect on the Series 1998-V Certificateholders;
then, (y) in the case of any event described in subparagraph (a), (b) or (f),
after any applicable grace period set forth in or applicable to such
subparagraph, either the Trustee or the Holders of Series 1998-V Certificates
evidencing Undivided Interests aggregating not less than 50% of the Invested
Amount of the Series 1998-V Certifi-
48
<PAGE>
cates by notice then given in writing to the Seller and the Servicer (and to the
Trustee if given by the Series 1998-V Certificateholders) may declare that a
liquidation event (a "Liquidation Event") has occurred with respect to the
Series 1998-V Certificates as of the date of such notice, and (z) in the case of
subparagraph (c), (d) or (e) (or any of the events specified in Section 9.01 of
the Agreement), a Liquidation Event with respect to such Series 1998-V
Certificates shall occur without any notice or other action on the part of the
Trustee or all investor certificateholders or the Series 1998-V
Certificateholders, as applicable, immediately upon the occurrence of such
event.
SECTION 10. Related Interest Periods. For purposes of this Series
------------------------
Supplement, the Interest Period related to any Due Period shall be the Interest
Period ending on the day prior to the Distribution Date for such Due Period.
SECTION 11. Eligible Servicer. The Trustee hereby agrees that, in
-----------------
the event that it appoints an Eligible Servicer as Successor Servicer pursuant
to Section 10.02 of the Agreement, such Eligible Servicer shall have a long term
debt rating of at least A by Standard & Poor's and A2 by Moody's; provided,
--------
however, that if the Trustee has a long term debt rating of at least A by
- -------
Standard & Poor's and A2 by Moody's, such Eligible Servicer need have only a
long term debt rating of BBB- by Standard & Poor's and Baa3 by Moody's.
SECTION 12. Trustee Resignation. The Trustee shall not resign
-------------------
pursuant to Section 11.07 of the Agreement without written confirmation from
each Rating Agency that such resignation will not result in the Rating Agency's
reducing or withdrawing its rating on any Class of any then outstanding Series
rated by it.
SECTION 13. Tax Opinion. As permitted in subsection 6.09(b) of the
------------
Agreement, it shall be a condition of the Exchange contemplated hereby and the
issuance of the Series 1998-V Certificates that an Opinion of Counsel be
furnished pursuant to clause (c) of subsection 6.09(b) to the effect that the
Class A Certificates will be treated as debt for Federal income tax purposes and
that the issuance of the Series 1998-V Certificates will not adversely affect
the Federal income tax characteristics of any outstanding Series of Investor
Certificates or any Certificate Owner.
49
<PAGE>
SECTION 14. Subordination of Certain Termination Payments.
----------------------------------------------
Notwithstanding anything contained in subsection 12.02(c) of the Agreement, upon
the sale of Receivables or interests therein as provided in Section 12.02(c) of
the Agreement, the net proceeds of any such sale payable to the Series 1998-V
Certificates shall be paid pro rata to the Class A Certificates and then to the
--- ----
Collateral Interest Holder for application pursuant to the terms of the Loan
Agreement.
SECTION 15. Variable Accumulation Series. For purposes of the
-----------------------------
Supplement with respect to any other Series (including, but not limited to, the
Supplement for Series 1998-V), Series 1998-V Certificates may be designated a
"Variable Accumulation Series."
SECTION 16. Ratification of Pooling and Servicing Agreement;
------------------------------------------------
Representations; Security Interest.
- ----------------------------------
(a) As supplemented by this Series Supplement, the Agreement is in
all respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken, and construed as one and the same
instrument; provided, however, that pursuant to clause (D) of the fifth sentence
-------- -------
of subsection 9.02(a) of the Agreement, the required written instruction
pursuant to such fifth sentence of subsection 9.02(a) shall include the Holders
of Investor Certificates representing Undivided Interests aggregating more than
50% of the Invested Amount of each Series issued prior to April 19, 1995.
(b) The Seller hereby represents and warrants to the Trustee that 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 by the Seller of the Agreement, any Supplement and the Certificates,
the performance by the Seller of the transactions contemplated by the Agreement
and any Supplement and the fulfillment by the Seller of the terms of the
Agreement, any Supplement and the Certificates have been obtained; provided,
--------
however, that the Seller makes no representation or warranty regarding state
- -------
securities or "Blue Sky" laws in connection with the distribution of the
Certificates.
(c) If the Agreement does not constitute a valid transfer and
assignment of all right, title and interest of the Seller in the Receivables and
the pro-
50
<PAGE>
ceeds thereof (excluding Recoveries relating thereto), the parties hereto
intend that the Agreement, which constitutes a security agreement under the UCC,
is a grant of a security interest for the purposes of (i) securing the rights of
the Trustee for the benefit of the Investor Certificateholders and (ii) securing
the right and ability of the Trustee to make the distributions set forth in the
Agreement.
SECTION 17. Counterparts. This Series Supplement may be executed in
------------
any number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 18. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, 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.
51
<PAGE>
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
FCC NATIONAL BANK
By /s/ M. Eileen Kennedy
---------------------------
Name: M. Eileen Kennedy
Title: Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ Sue Dignan
--------------------------
Name: Sue Dignan
Title: Corporate Trust Officer
52
<PAGE>
EXHIBIT A
---------
REGISTERED FIRST CHICAGO MASTER TRUST II REGISTERED
Unless this certificate is presented by an authorized representative
of The Depository Trust Company to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede &
Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
FLOATING RATE ASSET BACKED CERTIFICATES SERIES 1998-V
No. _____ $_____________
Each $1,000 minimum denomination represents
1/1,000,000 Undivided Interest in certain assets of the
FIRST CHICAGO MASTER TRUST II
Evidencing an Undivided Interest in a Trust, the corpus of which consists of
receivables generated from time to time in the ordinary course of business in a
portfolio of "Classic VISA," "Standard MasterCard," "VISA Gold," "Gold
MasterCard," "Platinum VISA" and "Platinum MasterCard" consumer revolving credit
accounts
by
FCC NATIONAL BANK
(Not an interest in or obligation of FCC National Bank or any affiliate thereof
except to the limited extent described herein)
CUSIP NO. 31945 RBB 8
-----------
A-1
<PAGE>
This certifies that
CEDE & CO.
(the "Certificateholder") is the registered owner of the Undivided Interest in
certain assets of a trust (the "Trust"), created pursuant to the Pooling and
Servicing Agreement, dated as of June 1, 1990, as supplemented by a Series 1998-
V Supplement, dated as of November 1, 1998, by and between FCC National Bank
("FCCNB"), a national bank, as Seller and Servicer, and Norwest Bank Minnesota,
National Association, as trustee (the "Trustee") (collectively referred to
herein as the "Agreement"). The corpus of the Trust consists of (i) a portfolio
of all receivables (the "Receivables") existing in the consumer revolving credit
card accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time thereafter,
(iii) funds collected or to be collected from cardholders in respect of the
Receivables, (iv) all funds which are from time to time on deposit in the
Collection Account and any other account or accounts held for the benefit of
investor certificateholders (the "Investor Certificateholders"), (v) the
benefits of funds on deposit in the Cash Collateral Account and any other
Enhancements to be issued by Enhancement Providers with respect to one or more
Series of investor certificates (the "Investor Certificates") up to the amount
available thereunder, and (vi) all other assets and interests constituting the
Trust. The holder of this Certificate is entitled to the benefit of funds on
deposit in the Cash Collateral Account, and the benefits of the subordination of
the Collateral Interest Series 1998-V (the "Collateral Interest"), and is not
entitled to the benefit of any other Enhancement which may be part of the
Trust's assets. Although a summary of certain provisions of the Agreement is
set forth below, this Certificate does not purport to summarize the Agreement,
is qualified in its entirety by the terms and provisions of the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced hereby
and the rights, duties and obligations of the Trustee. A copy of the Agreement
may be requested from the Trustee by writing to the Trustee at Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479-0070, Attention: Corporate Trust
Department. To the extent not defined herein, the capitalized terms used herein
have the meanings ascribed to them in the Agreement.
A-2
<PAGE>
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, as amended from time to time, to
which the Certificateholder, by virtue of the acceptance hereof, assents and is
bound.
It is the intent of FCCNB and the Class A Certificateholders that, for
federal, state and local income and franchise tax purposes only, the Class A
Certificates will be evidence of debt secured by the Receivables. FCCNB and the
Certificateholder, by the acceptance of this Certificate, agree to treat this
Certificate for federal, state and local income and franchise tax purposes as
debt.
Subject to the Agreement, payments of principal are limited to the
unpaid Class A Invested Amount of the Class A Certificates at the commencement
of the Rapid Amortization Period, which may be less than the unpaid balance of
the Class A Certificates pursuant to the terms of the Agreement. All principal
of and interest on the Class A Certificates is due and payable no later than the
October 2003 Distribution Date (the "Series Termination Date"). After the
Series Termination Date, neither the Trust nor FCCNB will have any further
obligation to distribute principal or interest on the Class A Certificates. In
the event that the Class A Invested Amount is greater than zero on the Series
Termination Date, the Trustee will sell or cause to be sold, and pay the
proceeds, to the extent necessary, to the Class A Certificateholders pro rata in
final payment of the Class A Invested Amount, an amount of interests in the
Receivables or certain of the Receivables up to 110% of the Adjusted Invested
Amount at the close of business on such date (but not more than the total amount
of Receivables allocable to the Certificates, including the Collateral
Interest).
The Receivables consist of Principal Receivables which arise generally
from the purchase of goods and services and amounts advanced to cardholders as
cash advances and Finance Charge Receivables which arise from the Periodic Rate
Finance Charges, Cash Advance Fees, Late Fees, Overlimit Fees, annual fees with
respect to the Accounts, Returned Check Fees and all other fees and charges
payable by Obligors with respect to the Accounts. Finance Charge Receivables
also include certain Interchange allocable to the Accounts. This Certificate is
one of a class of a series of Investor Certificates
A-3
<PAGE>
entitled "First Chicago Master Trust II Floating Rate Credit Card Certificates
Series 1998-V (the "Class A Certificates" and together with the Collateral
Interest, the "Certificates"), each of which represents an Undivided Interest in
certain assets of the Trust. The Trust's assets are allocated in part to the
Class A Certificateholders and to the holder of the Collateral Interest (the
"Collateral Interest Holder"), with the remainder allocated to holders of other
Series of Investor Certificates issued by the Trust, if any, and to FCCNB (the
"Seller"). In addition to the Certificates, an Exchangeable Seller's Certificate
will be issued to the Seller pursuant to the Agreement which will represent the
Seller's interest in the Trust. The Exchangeable Seller's Certificate will
represent the interest in the Principal Receivables not represented by the
Investor Certificates. The Exchangeable Seller's Certificate may be exchanged by
the Seller pursuant to the Agreement for one or more Series of Investor
Certificates and a reissued Exchangeable Seller's Certificate upon the
conditions set forth in the Agreement. In addition, to the extent permitted for
any Series of Investor Certificates by the related Supplement, the Investor
Certificateholders of such Series may tender their Investor Certificates and the
Seller may tender the Exchangeable Seller's Certificate in exchange for one or
more Series of Investor Certificates and a reissued Exchangeable Seller's
Certificate.
The aggregate interest represented by the Certificates at any time in
the Principal Receivables in the Trust shall not exceed an amount equal to the
Invested Percentage with respect to Principal Receivables at such time. The
Invested Amount, for any date, will be an amount equal to the sum of the Class A
Invested Amount and the Collateral Invested Amount. The Initial Invested Amount
is $1,142,857,143. The Class A Initial Invested Amount is $1,000,000,000. The
Class A Invested Amount, for any date, will be an amount equal to (a)
$1,000,000,000, minus (b) the aggregate amount of principal payments made to the
-----
Class A Certificateholders prior to such date, minus (c) the excess, if any, of
-----
the aggregate amount of Class A Investor Charge-Offs for all Distribution Dates
preceding such date over the aggregate amount of Class A Investor Charge-Offs
reimbursed pursuant to Section 4.09 of the Agreement for all Distribution Dates
preceding such date. The Class A Adjusted Invested Amount, for any date, will
be an amount equal to the Class A Invested Amount, minus the Principal Funding
-----
A-4
<PAGE>
Account Balance on such date. The Adjusted Invested Amount, for any date, will
be an amount equal to the sum of (a) the Class A Adjusted Invested Amount and
(b) the Collateral Invested Amount. The Invested Percentage, when used with
respect to Principal Receivables during the Revolving Period and Finance Charge
Receivables and Defaulted Receivables at any time, means the percentage
equivalent of a fraction the numerator of which is the Adjusted Invested Amount
for such Distribution Date and the denominator of which is the Aggregate
Principal Receivables for the Due Period relating to such Distribution Date.
The Invested Percentage, when used with respect to Principal Receivables during
the Accumulation Period or the Rapid Amortization Period, means the percentage
equivalent of a fraction the numerator of which is the Invested Amount as of the
end of the day on the last Distribution Date relating to the Revolving Period
and the denominator of which is the greater of (a) Aggregate Principal
Receivables for the Due Period related to the current Distribution Date and (b)
the sum of the numerators used to calculate the Invested Percentages with
respect to Principal Receivables for all Series of Investor Certificates
outstanding for the current Distribution Date. Collections of Finance Charge
Receivables and Principal Receivables will be further allocated between the
Class A Certificates and the Collateral Interest as described in the Agreement.
Interest will be distributed monthly on the fifteenth day of each
month (or, if such fifteenth day is not a Business Day, on the next succeeding
Business Day) (each a "Distribution Date"), commencing December 15, 1998, at the
applicable rate on the Class A Invested Amount as of the preceding Record Date
to each Class A Certificateholder of record as of the Record Date. Interest
will accrue from the period beginning on and including November 12, 1998 and
ending on and excluding November 16, 1998, for the period beginning on and
including November 16, 1998 and ending on and excluding December 15, 1998, and
with respect to each Interest Period thereafter, at a rate of 0.28% per annum
above LIBOR determined in the manner set forth in the Agreement. Interest is
derived from Collections of Finance Charge Receivables, Excess Spread, Excess
Finance Charge Collections, withdrawals from the Cash Collateral Account and
Reallocated Principal Collections (and, during the Accumulation Period, from
certain amounts withdrawn from the Principal Funding Account and the Reserve
Account), in each case to the extent funds are available from such
A-5
<PAGE>
source in accordance with the Agreement. The Record Date with respect to any
Distribution Date shall be the last day of the calendar month preceding such
Distribution Date.
No principal will be payable to Certificateholders until the October
2001 Distribution Date (the "Class A Scheduled Payment Date") or such earlier
date as may result from the occurrence of a Liquidation Event. During the
Revolving Period, Collections of Principal Receivables otherwise allocable to
Certificateholders will be paid to the Seller, to other amortizing or
accumulating Series or, in certain circumstances, to the Collateral Interest
Holder.
As described in the Agreement, Collections of Principal Receivables
with respect to any Due Period will be allocated to the Certificates on the
related Determination Date on the basis of the Invested Percentage with respect
to Principal Receivables. Such Collections will be further allocated between
the Class A Certificates and the Collateral Interest as described in the
Agreement. Such allocations will be performed during the Revolving Period, the
Accumulation Period and the Rapid Amortization Period. Under the Agreement,
such Collections will be paid to the Seller, to other amortizing or accumulating
Series or to the Collateral Interest Holder, as described above, during the
Revolving Period. During the Accumulation Period, Collections of Principal
Receivables allocable to the Class A Certificateholders up to the Controlled
Deposit Amount will be deposited into the Principal Funding Account for the
benefit of the Class A Certificateholders, with the excess paid to the Seller,
to other amortizing or accumulating Series or to the Collateral Interest Holder.
During the Rapid Amortization Period, all Collections of Principal Receivables
allocable to the Certificateholders will be paid to the Class A
Certificateholders on each Distribution Date. In each case, payments to the
Class A Certificateholders shall not exceed the Class A Invested Amount.
Unless or until a Liquidation Event (as described in the Agreement)
shall have occurred, during the period beginning on the first day of the Due
Period relating to the November 2000 Distribution Date, subject to postponement
as described in the Agreement (the "Controlled Accumulation Date"), and ending
on the earlier of (a) but not including, the first day of the Due Period in
which a Liquidation Event occurs or is deemed to have
A-6
<PAGE>
occurred, (b) and including, the date on which the Invested Amount is paid in
full, or (c) the Series Termination Date (the "Accumulation Period"),
Collections of Principal Receivables allocable to the Class A Certificates up to
the Controlled Deposit Amount will be deposited into the Principal Funding
Account for the benefit of the Class A Certificateholders monthly on each
Distribution Date beginning with the Distribution Date related to the Due Period
in which the Controlled Accumulation Date occurs. The amount of monthly
principal ("Class A Monthly Principal") allocable to Class A Certificateholders
shall equal the sum of (i) an amount equal to the Class A Principal Percentage
of the Fixed Allocation Percentage of all Collections with respect to Principal
Receivables for such Due Period, (ii) the amount, if any, of Unallocated
Principal Collections on deposit in the Collection Account allocable to the
Certificates, (iii) a portion of the amount of Collections of Principal
Receivables allocable to certain other Series but not needed to make payment to
or for the benefit of such Series and (iv) certain other amounts as described in
the Agreement.
If Class A Monthly Principal for the related Due Period is equal to or
greater than the sum of the Controlled Accumulation Amount and the existing
Deficit Controlled Accumulation Amount (such sum, the "Controlled Deposit
Amount"), the amount of the Controlled Deposit Amount will be deposited into the
Principal Funding Account for the benefit of the Class A Certificateholders and
the excess of such sum over the Controlled Deposit Amount will be paid from the
Trust to the Seller, but not more than the First Chicago Amount, to other
amortizing Series or to the Collateral Interest Holder.
If Class A Monthly Principal for the related Due Period is less than
the Controlled Deposit Amount, the entire amount of Class A Monthly Principal
will be deposited into the Principal Funding Account for the benefit of the
Class A Certificateholders and the amount of the excess of the Controlled
Deposit Amount over the Class A Monthly Principal will be the Deficit Controlled
Accumulation Amount for the next succeeding Distribution Date.
During the period beginning on the first day of the Due Period in
which a Liquidation Event occurs or is deemed to occur and continuing to and
including the earlier of the date on which the Invested Amount has been
A-7
<PAGE>
paid in full or the Series Termination Date (the "Rapid Amortization Period"),
Collections of Principal Receivables allocable to the Class A Certificates will
no longer be paid to the Seller, to other amortizing or accumulating Series, to
the Collateral Interest Holder, or to the Principal Funding Account for the
benefit of the Class A Certificateholders (to the extent of the Controlled
Deposit Amount) as described above, but instead will be distributed monthly on
each Distribution Date to Class A Certificateholders. During the Rapid
Amortization Period, Class A Monthly Principal will be paid to the Class A
Certificateholders regardless of the level of any Controlled Accumulation Amount
or Controlled Deposit Amount.
On each Distribution Date, the Paying Agent shall distribute to each
Class A Certificateholder of record on the related Record Date such Class A
Certificateholder's pro rata share (based on the aggregate Undivided Interest
--- ----
represented by the Certificate held by such Class A Certificateholder) of
amounts on deposit in the Collection Account and, on the Class A Scheduled
Payment or, if earlier, the first Distribution Date with respect to the Rapid
Amortization Period, in the Principal Funding Account as are payable to the
Class A Certificateholders pursuant to the Agreement. The amount to be
distributed on each Distribution Date to the Certificateholder will be equal to
the product of the aggregate Undivided Interest represented by this Certificate
and the aggregate of all payments to be made to Class A Certificateholders on
such Distribution Date. Distributions with respect to this Certificate will be
made by the Paying Agent by check mailed to the address of the Certificateholder
of record appearing in the Certificate Register without the presentation or
surrender of this Certificate or the making of any notation (except for the
final distribution in respect of this Certificate) except that if all Class A
Certificates are registered in the name of CEDE & CO., the nominee registration
for The Depository Trust Company, distributions will be made in the form of
immediately available funds. Final payment of this Certificate will be made
only upon presentation and surrender of this Certificate at the office or agency
specified in the notice of final distribution delivered by the Trustee to the
Certificateholder in accordance with the Agreement.
On the Distribution Date occurring after the Adjusted Invested Amount
is reduced to 5% of the Initial
A-8
<PAGE>
Invested Amount or less, the Seller may repurchase the Certificateholders'
Interest in the Trust unless certain events of bankruptcy, insolvency or
receivership have occurred with respect to FCCNB. The repurchase price will be
equal to the Adjusted Invested Amount plus accrued and unpaid interest thereon.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST
IN, FCCNB, THE SERVICER (IF THE SERVICER IS NOT FCCNB) OR ANY AFFILIATE OF
EITHER OF THEM (EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN) AND IS NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY. THIS CERTIFICATE IS LIMITED IN RIGHT OF PAYMENT TO CERTAIN
COLLECTIONS RESPECTING THE RECEIVABLES (AND CERTAIN OTHER AMOUNTS), ALL AS MORE
SPECIFICALLY SET FORTH HEREINABOVE AND IN THE AGREEMENT.
The Agreement may be amended by the Seller, the Servicer and the
Trustee, without Certificateholder consent, to cure any ambiguity, to correct or
supplement any provision therein which may be inconsistent with any other
provision therein, or to add any other provisions with respect to matters or
questions arising under the Agreement which are not inconsistent with the
provisions of the Agreement. Additionally, the Agreement may be amended from
time to time by the Servicer, the Seller and the Trustee, without the consent of
any of the Certificateholders, to add to or change any of the provisions of the
Agreement to provide that Bearer Certificates may be registrable as to
principal, to change or eliminate any restrictions on the payment of principal
of or any interest on Bearer Certificates to comply with the Bearer Rules, to
permit Bearer Certificates to be issued in exchange for Registered Certificates
(if then permitted by the Bearer Rules), to permit Bearer Certificates to be
issued in exchange for Bearer Certificates of other authorized denominations or
to permit the issuance of Certificates in uncertificated form, provided any such
action shall not adversely affect the interests of the Holders of Bearer
Certificates of any Series or any related Coupons in any material respect. No
such amendment, however, may adversely affect in any material respect the
interests of the Certificateholders unless such amendment is necessary to comply
with the Bearer Rules. Any Supplement and any amendments regarding the addition
to or removal of Receivables from the Trust as
A-9
<PAGE>
provided in Sections 2.05, 2.10 and 6.09 of the Agreement, respectively, shall
not be considered amendments to the Agreement.
Subject to the preceding paragraph, the Agreement may be amended by
the Servicer, the Seller and the Trustee with the consent of the Investor
Certificateholders owning Undivided Interests aggregating not less than 66-2/3%
of the invested amount of all Series adversely affected for the purpose of
adding any provisions to, changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of Investor
Certificateholders of any Series then issued and outstanding, provided, however,
-------- -------
that no such amendment shall (a) reduce in any manner the amount of, or delay
the timing of, distributions which are required to be made on any Investor
Certificate without the consent of such Investor Certificateholder, (b) change
the definition of or the manner of calculating the interest of any Investor
Certificateholder, without the consent of such Investor Certificateholder, or
(c) reduce the aforesaid percentage required to consent to any such amendment,
without the consent of such Investor Certificateholder. Any such amendment and
any such consent by the Holder of this Certificate shall be conclusive and
binding on such Certificateholder and upon all future Holders of this
Certificate and of any Certificate issued in exchange hereof or in lieu hereof
whether or not notation thereof is made upon this Certificate.
The Class A Certificates are issuable only in denominations of $1,000
and integral multiples of $1,000 in excess hereof. The transfer of this
Certificate shall be registered in the Certificate Register upon surrender of
this Certificate for registration of transfer at any office or agency maintained
by the Transfer Agent and Registrar accompanied by a written instrument of
transfer, in a form satisfactory to the Trustee and the Transfer Agent and
Registrar, duly executed by the Certificateholder or the Certificateholder's
attorney, and duly authorized in writing with such signature guaranteed, and
thereupon one or more new Class A Certificates of authorized denominations and
for the same aggregate Undivided Interest will be issued to the designated
transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, this Certificate is exchangeable for new Class A Certificates
evidencing a
A-10
<PAGE>
like aggregate Undivided Interest, as requested by the Certificateholder
surrendering this Certificate. No service charge may be imposed for any such
exchange but the Servicer, the Seller or the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Servicer, nor the Trustee, the Paying Agent, the Transfer Agent and Registrar,
nor any agent of any of them shall be affected by notice to the contrary except
in certain circumstances described in the Agreement.
This Certificate shall be construed in accordance with and governed by
the laws of the State of Delaware.
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 Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, FCCNB has caused this Certificate to be duly
executed.
Dated:
FCC NATIONAL BANK
By: -------------------------------
Chairman of the Board
A-11
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates described in the within-
mentioned Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA, NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION NATIONAL ASSOCIATION
as Trustee as Trustee
OR
By:
Authorized Officer By: THE FIRST NATIONAL
BANK OF CHICAGO
Authenticating Agent
By:
Authorized Officer
A-12
<PAGE>
_________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE(S)
- ---------------------------------------------------
- --------------------------------------------------- ............................
(PLEASE PRINT OR TYPEWRITE
NAME AND ADDRESS OF ASSIGNEE)
................................................................................
...............................................................................
the within certificate and all rights thereunder,
and hereby irrevocably constitutes and appoints
...............................................................................
attorney, with full power of substitution in the
premises, to transfer said certificate on the books
kept for registration thereof.
Dated: ........................................................................
..............................................
Note: The signature(s) to this Assignment must
correspond with the name(s) as written on the
face of the within certificate in every
particular, without alteration or enlargement
or any change whatever.
A Non-U.S. Person as defined in
the Code must certify to the
Trustee in writing as to its Non-
U.S. Person status and such further
information as may be required under
the Code or reasonably requested by
the Trustee.
A-13
<PAGE>
EXHIBIT B
---------
FORM OF CERTIFICATEHOLDERS' PAYMENT DATE STATEMENT
(To be delivered by the Payment Agent on each
Payment Date pursuant to Section 5.02(a) of
the Pooling and Servicing Agreement)
FCC NATIONAL BANK
_________________________________________________
FIRST CHICAGO MASTER TRUST II
SERIES 1998-V
__________________________________________________
Under the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of June 1, 1990 by and between FCC National Bank, as Seller
and Servicer ("FCCNB"), and Norwest Bank Minnesota, National Association, as
Trustee (the "Trustee"), as amended and supplemented by the Series 1998-V
Supplement dated as of November 1, 1998 by and between FCCNB and the Trustee,
FCCNB, as Servicer, is required to prepare certain information for each Payment
Date regarding current distributions to Class A Certificateholders and the
performance of the First Chicago Master Trust II (the "Trust") during the
previous period. The information which is required to be prepared with respect
to the distribution on the _________________, 199 Payment Date and with respect
to the performance of the Trust during the Due Period for such Payment Date is
set forth below. Certain of the information is presented on the aggregate
amounts for the Trust as a whole. All capitalized terms used herein shall have
the respective meanings set forth in the Pooling and Servicing Agreement.
B-1
<PAGE>
A. Information Regarding the Current Distribution (Stated on the Basis of
----------------------------------------------------------------------
$1,000 Original Principal Amount).
---------------------------------
1. The total amount of the distri-
bution to Class A Certificate-
holders on the Payment Date
per $1,000 interest................... $________
2. The amount of the distribution
set forth in paragraph 1 above
in respect of principal on the
Class A Certificates, per
$1,000 interest....................... $________
3. The amount of the distribution
set forth in paragraph 1 above
in respect of interest on the
Class A Certificates, per
$1,000 interest....................... $________
B. Information Regarding the Performance of the Trust.
--------------------------------------------------
1. Collections of Receivables.
--------------------------
a. The aggregate amount of Collections
of Receivables processed for the Due
Period with respect to the current
Distribution Date which were allo-
cated in respect of the Investor
Certificates of all Series............. $________
b. The aggregate amount of Collections
of Receivables processed for
the Due Period with respect to
the current Distribution Date which
were allocated in respect of the
Series 1998-V Certificates............. $________
c. The aggregate amount of Collections
of Receivables processed for
the Due Period with respect to
the current Distribution Date which
were allocated in respect of the
Class A Certificates................... $________
B-2
<PAGE>
d. The amount of Collections of
Receivables processed for the
Due Period with respect to the
current Distribution Date which
were allocated in respect of
Class A Certificates, per $1,000
interest............................... $________
e. The amount of Excess Spread for the
Due Period with respect to the cur-
rent Distribution Date................. $________
f. The amount of Reallocated Principal
Collections for the Due Period
with respect to the current
Distribution Date allocated in
respect of the Class A Certificates.... $________
g. The amount of Excess Finance Charge
Collections allocated in respect of
the Series 1998-V Certificates, if
any.................................... $________
h. The amount of Excess Principal Col-
lections allocated in respect of the
Series 1998-V Certificates, if any..... $________
2. Receivables in Trust.
--------------------
a. Aggregate Principal Receivables for
the Due Period with respect to the
current Distribution Date (which
reflects the Principal Receivables
represented by the Exchangeable
Seller's Certificate and by the
Investor Certificates of all
Series)............................... $________
b. The amount of Principal Receivables
in the Trust represented by the
Series 1998-V Certificates (the
"Adjusted Invested Amount")
for the Due Period with respect to
the current Distribution Date......... $________
B-3
<PAGE>
c. The amount of Principal Receivables
in the Trust represented by the
Class A Certificates (the "Class A
Adjusted Invested Amount") for the Due
Period with respect to the current -
Distribution Date...................... $________
d. The Invested Amount for the Due
Period with respect to the current
Distribution Date...................... $________
e. The Class A Invested Amount for
the Due Period with respect to the
current Distribution Date.............. $________
f. The Invested Percentage with respect
to Finance Charge Receivables
(including Interchange) and Defaulted
Receivables for the Series 1998-V
Certificates for the Due Period with
respect to the current Distribution
Date................................... ________%
g. The Invested Percentage with respect
to Principal Receivables for the
Series 1998-V Certificates for the Due
Period with respect to the current
Distribution Date...................... ________%
h. The Class A Floating Percentage
for the Due Period with respect
to the current Distribution Date....... ________%
i. The Class A Principal Percentage
for the Due Period with respect
to the current Distribution Date....... ________%
j. The Collateral Floating Percentage
for the Due Period with respect
to the current Distribution Date....... ________%
k. The Collateral Principal Percentage
for the Due Period with respect
to the current Distribution Date....... ________%
B-4
<PAGE>
3. Delinquent Balances.
-------------------
The aggregate amount of outstanding
balances in the Accounts which were 30
or more days delinquent as of the end
of the Due Period for the current
Distribution Date...................... $________
4. Investor Default Amount.
-----------------------
a. The aggregate amount of all
Defaulted Receivables written off
as uncollectible during the Due Period
with respect to the current Distri-
bution Date allocable to the Series
1998-V Certificates (the "Investor
Default Amount")....................... $________
b. The Class A Investor Default
Amount................................. $________
c. The Collateral Investor Default
Amount................................. $________
5. Investor Charge-Offs.
--------------------
a. The amount of the Class A Investor
Charge-Offs per $1,000 interest
after reimbursement of any such
Class A Investor Charge-Offs for
the Due Period with respect to the
current Distribution Date.............. $________
b. The amount attributable to Class A
Investor Charge-Offs, if any, by
which the principal balance of the
Class A Certificates exceeds the
Class A Adjusted Invested Amount
as of the end of the day on the
Record Date with respect to the
current Distribution Date.............. $________
c. The amount of the Collateral Charge-
Offs, if any, for the Due Period
with respect to the current
Distribution Date...................... $________
B-5
<PAGE>
6. Monthly Servicing Fee.
---------------------
a. The amount of the Monthly Servicing
Fee payable by the Trust to the
Servicer with respect to the
current Distribution Date.............. $________
b. The amount of the Interchange Monthly
Servicing Fee payable to the Servicer
with respect to the current
Distribution Date...................... $________
7. Available Cash Collateral Amount.
--------------------------------
a. The amount, if any, withdrawn from
the Cash Collateral Account for the
current Distribution Date (the
"Withdrawal Amount")................... $________
b. The amount available to be withdrawn
from the Cash Collateral Account
as of the end of the day on the
current Distribution Date, after
giving effect to all withdrawals,
deposits and payments to be made on
such Distribution Date (the
"Available Cash Collateral
Amount" for the next Distribution
Date).................................. $________
c. The amount as computed in 7.b as a
percentage of the Class A Adjusted
Invested Amount after giving effect
to all reductions thereof on the
current Distribution Date.............. $________
8. Collateral Invested Amount.
--------------------------
a. The Collateral Invested Amount for
the current Distribution Date.......... $________
b. The Collateral Invested Amount
after giving effect to all with-
drawals, deposits and payments on
the current Distribution Date.......... $________
9. Total Enhancement.
-----------------
a. The total Enhancement for the current
Distribution Date...................... $________
B-6
<PAGE>
b. The total Enhancement after giving
effect to all withdrawals, deposits
and payments on the current Distri-
bution Date............................ $________
C. The Pool Factor.
---------------
1. The Pool Factor (which represents
the ratio of the Class A Invested
Amount on the last day of the month
ending on the Record Date adjusted
for Class A Investor Charge-Offs
set forth in B.5.a above and for
the distributions of principal set
forth in A.2 above to the Class A
Initial Invested Amount). The
amount of a Class A Certificate-
holder's pro rata share of the
Class A Invested Amount can be
determined by multiplying the
original denomination of the
holder's Class A Certificate by
the Pool Factor........................ ________%
D. Principal Funding Account.
-------------------------
1. The Principal Funding Investment
Proceeds deposited in the Collection
Account for the current Distribu-
tion Date to be treated as Class A
Available Funds......................... $________
2. The Excess Principal Funding
Investment Proceeds for the
current Distribution Date............... $________
3. The Principal Funding Account
Balance as of the end of the
day on the current Distribution
Date.................................... $________
4. The Deficit Controlled Accumulation
Amount for the preceding
Due Period.............................. $________
B-7
<PAGE>
E. Reserve Account.
---------------
1. The Reserve Draw Amount for
the current Distribution Date.......... $________
2. The amount on deposit in the
Reserve Account as of the end
of the day on the current Dis-
tribution Date (the "Available
Reserve Account Amount" for
the next Distribution Date)............ $________
FCC NATIONAL BANK,
Servicer
By____________________________
Title:
B-8
