<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported) December 17, 1996
----------------------
First USA, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-11030 75-2291060
-------- ------- ----------
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
1601 Elm Street, 46th Floor, Dallas, Texas 75201
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
214-849-2195
- ----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
<PAGE>
Item 5. Other Events.
On December 17, 1996, First USA Federal Savings Bank (the "Bank"), a
wholly-owned subsidiary of First USA Financial, Inc., which is a wholly-owned
subsidiary of First USA, Inc., completed the securitization of approximately
$137 million of unsecured closed end consumer loan receivables. The
securitization consists of three classes of fixed rate First USA Consumer Loan
Grantor Trust 1996-A Certificates.
The securitization includes the issuance of $119,293,000 First USA Consumer
Loan Grantor Trust 1996-A Class A Certificates and $13,026,000 First USA
Consumer Loan Grantor Trust 1996-A Class B Certificates. The securitization also
consists of $4,799,737.46 First USA Consumer Loan Grantor Trust 1996-A Class C
Certificates, which will be subordinated to and provide credit enhancement for
the First USA Consumer Loan Grantor Trust 1996-A Class A Certificates and First
USA Consumer Loan Grantor Trust 1996-A Class B Certificates.
The Bank services the receivables that are included in the securitization
and will continue to service the accounts associated with such receivables
following the securitization.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
99. Pooling and Servicing Agreement, dated as of December 3, 1996, between
First USA Securitization Corporation, as Transferor, First USA Federal Savings
Bank, as Servicer, and Bankers Trust (Delaware), as Trustee.
2
<PAGE>
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 thereunto duly authorized.
Date: January 2, 1997
First USA, Inc.
By: /s/ Philip E. Taken
--------------------------
Philip E. Taken
Senior Vice President
<PAGE>
EXHIBIT 99
EXECUTION COPY
================================================================================
FIRST USA SECURITIZATION CORPORATION
Transferor
FIRST USA FEDERAL SAVINGS BANK
Servicer
and
BANKERS TRUST (DELAWARE)
Trustee
of the First USA Consumer Loan Grantor Trust 1996-A
________________________________________
POOLING AND SERVICING AGREEMENT
Dated as of December 3, 1996
================================================================================
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions............................................................................. 1
Section 1.2 Other Definitional Provisions........................................................... 17
Section 1.3 Simple Interest Method; Allocations..................................................... 18
Section 1.4 Statement of Intention.................................................................. 18
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Creation of the Trust................................................................... 19
Section 2.2 Conveyance of Receivables............................................................... 19
Section 2.3 Acceptance by Trustee................................................................... 21
Section 2.4 Representations and Warranties of the Transferor........................................ 22
Section 2.5 Representations and Warranties of the Transferor Relating to the Agreement
and the Receivables................................................................... 24
Section 2.6 Repurchase Upon Breach or Failure of a Condition........................................ 27
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters Relating to the Servicer.................... 28
Section 3.2 Servicing Modifications to Terms of Receivables......................................... 29
Section 3.3 Representations and Warranties of the Servicer.......................................... 29
Section 3.4 Covenants of Servicer................................................................... 31
Section 3.5 Purchase of Receivables Upon Breach..................................................... 32
Section 3.6 Servicing Compensation.................................................................. 33
Section 3.7 Monthly Servicer's Certificate.......................................................... 33
Section 3.8 Annual Servicer's Certificate........................................................... 34
Section 3.9 Annual Independent Accountants' Servicing Report........................................ 34
Section 3.10 Custody of Receivable Files............................................................. 35
Section 3.11 Duties of Servicer as Custodian......................................................... 35
Section 3.12 Instructions; Authority to Act.......................................................... 36
Section 3.13 Custodians' Indemnification............................................................. 36
Section 3.14 Effective Period and Termination........................................................ 37
ARTICLE IV
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RIGHTS OF CERTIFICATEHOLDERS
AND APPLICATION OF COLLECTIONS
Section 4.1 Establishment of Accounts.............................................................. 38
Section 4.2 Collections and Allocations............................................................ 39
Section 4.3 Advances............................................................................. 40
Section 4.4 Additional Deposits.................................................................... 41
Section 4.5 Distributions.......................................................................... 41
Section 4.6 Spread Account; Assignment of Monthly Excess Interest to Collateral Agent.............. 42
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
Section 5.1 Distributions.......................................................................... 46
Section 5.2 Statements to Certificateholders....................................................... 47
Section 5.3 Annual Certificateholders' Tax Statement............................................... 48
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates....................................................................... 49
Section 6.2 Execution, Authentication and Delivery of Certificates................... 49
Section 6.3 Registration of Transfer and Exchange of Certificates; Legends;
Restrictions on Transfer of Certificates............................................. 50
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates...................................... 50
Section 6.5 Persons Deemed Owners.................................................................. 53
Section 6.6 Appointment of Paying Agent............................................................ 54
Section 6.7 Access to List of Certificateholders' Names and Addresses.............................. 54
Section 6.8 Authenticating Agent................................................................... 55
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.1 Liability of the Transferor............................................................ 57
Section 7.2 Merger or Consolidation of the Transferor.............................................. 57
Section 7.3 Limitation on Liability................................................................ 58
Section 7.4 Liabilities............................................................................ 58
Section 7.5 Transferor May Own Certificates........................................................ 59
Section 7.6 Amendments to Certificate of Incorporation............................................. 59
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ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer............................................................. 60
Section 8.2 Merger or Consolidation of the Servicer............................................... 60
Section 8.3 Limitation on Liability of the Servicer and Others.................................... 61
Section 8.4 Servicer Indemnification of the Trust and the Trustee................................. 61
Section 8.5 The Servicer Not to Resign............................................................ 62
Section 8.6 Access to Certain Documentation and Information Regarding the Receivables............. 63
Section 8.7 Delegation of Duties.................................................................. 63
Section 8.8 Examination of Records................................................................ 63
ARTICLE IX
SERVICER DEFAULTS
Section 9.1 Servicer Defaults..................................................................... 64
Section 9.2 Trustee to Act; Appointment of Successor.............................................. 66
Section 9.3 Notification to Certificateholders.................................................... 67
Section 9.4 Waiver of Past Defaults............................................................... 68
ARTICLE X
THE TRUSTEE
Section 10.1 Duties of Trustee..................................................................... 69
Section 10.2 Certain Matters Affecting the Trustee................................................. 71
Section 10.3 Trustee Not Liable for Recitals in Certificates....................................... 72
Section 10.4 Trustee May Own Certificates.......................................................... 72
Section 10.5 The Servicer to Pay Trustee's Fees and Expenses....................................... 73
Section 10.6 Eligibility Requirements for Trustee.................................................. 73
Section 10.7 Resignation or Removal of Trustee..................................................... 73
Section 10.8 Successor Trustee..................................................................... 74
Section 10.9 Merger or Consolidation of Trustee.................................................... 75
Section 10.10 Appointment of Co-Trustee or Separate Trustee........................................ 75
Section 10.11 Tax Returns.......................................................................... 76
Section 10.12 Trustee May Enforce Claims Without Possession of Certificates........................ 77
Section 10.13 Suits for Enforcement................................................................ 77
Section 10.14 Rights of Certificateholders to Direct Trustee....................................... 77
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Section 10.15 Representations and Warranties of Trustee............................................ 78
Section 10.16 Maintenance of Office or Agency...................................................... 78
Section 10.17 Bankers Trust (Delaware), as Collateral Agent........................................ 78
ARTICLE XI
TERMINATION
Section 11.1 Termination of Trust................................................................. 79
Section 11.2 Optional Purchase of All Receivables................................................. 79
Section 11.3 Final Payment with Respect to the Certificates....................................... 79
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1 Amendment............................................................................ 82
Section 12.2 Protection of Right Title and Interest to Trust...................................... 83
Section 12.3 Limitation on Rights of Certificate holders......................................... 85
Section 12.4 Governing Law........................................................................ 86
Section 12.5 Notices.............................................................................. 86
Section 12.6 Severability of Provisions........................................................... 86
Section 12.7 Assignment........................................................................... 87
Section 12.8 Certificates Non-Assessable and Fully Paid........................................... 87
Section 12.9 Further Assurances................................................................... 87
Section 12.10 No Waiver; Cumulative Remedies....................................................... 87
Section 12.11 Counterparts......................................................................... 87
Section 12.12 Third-Party Beneficiaries............................................................ 87
Section 12.13 Actions by Certificateholders........................................................ 87
Section 12.14 No Petition.......................................................................... 88
Section 12.15 Merger and Integration............................................................... 88
Section 12.16 Heading.............................................................................. 88
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EXHIBITS
Exhibit A-1 Form of Class A Certificate
Exhibit A-2 Form of Class B Certificate
Exhibit A-3 Form of Class C Certificate
Exhibit B Form of Monthly Servicer's Certificate and Certificateholders'
Statement
Exhibit C Form of Annual Servicer's Certificate
Exhibit D-1 Form of Trustee's Certificate (Assignment to Transferor)
Exhibit D-2 Form of Trustee's Certificate (Assignment to Servicer)
Exhibit E Form of Investment Letter
iv
<PAGE>
SCHEDULE
Schedule 1 List of Receivables [Deemed Incorporated]
v
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of December 3, 1996 by and
among FIRST USA SECURITIZATION CORPORATION, a Delaware corporation, as
Transferor, FIRST USA FEDERAL SAVINGS BANK, a federally chartered savings bank,
as Servicer, and BANKERS TRUST (DELAWARE), a Delaware banking corporation, as
Trustee and separately as Collateral Agent with respect to the Spread Account
and the Monthly Excess Interest.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and the
Certificateholders:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the
-----------
following words and phrases shall have the following meanings:
"Account Property" shall mean all amounts and investments held from
----------------
time to time in the Spread Account (whether in the form of money, deposit
accounts, instruments, certificated securities, book-entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
"Accrued Interest" on a Receivable, as of any date of determination,
----------------
shall mean that amount of interest accrued on the Principal Balance of such
Receivable at the Contract Rate with respect to such Receivable but not paid by
or on behalf of the Obligor.
"Advance" shall have the meaning specified in subsection 4.3.
-------
"Affiliate" shall mean, with respect to any Person, any other Person
---------
controlling, controlled by or under common control with such Person.
"Aggregate Loss" shall mean, with respect to any Monthly Period, the
--------------
amount equal to the Principal Balance of each Receivable that became a Defaulted
Receivable during such Monthly Period immediately prior to such Receivable
becoming a Defaulted Receivable.
"Agreement" shall mean this Pooling and Servicing Agreement and all
---------
amendments hereof.
"Applicants" shall have the meaning specified in Section 6.7.
----------
"Authorized Newspaper" shall mean a newspaper of general circulation
--------------------
in the Borough of Manhattan, The City of New York printed in the English
language and customarily published on
<PAGE>
each Business Day, whether or not published on Saturdays, Sundays and holidays.
"Available Funds Remaining" shall mean, with respect to any
-------------------------
Distribution Date, the sum (to the extent necessary to affect the application
provided for in subsection 4.5(g)) of (a) the Available Interest with respect to
such Distribution Date remaining after giving effect to the application of
subsections 4.5(a), 4.5(b), 4.5(c), 4.5(d), 4.5(e) and 4.5(f) with respect to
such Distribution Date and (b) the Available Principal with respect to such
Distribution Date remaining after giving effect to the application of
subsections 4.5(c), 4.5(d) and 4.5(f) with respect to such Distribution Date.
"Available Interest" shall mean, for any Distribution Date, (a)
------------------
Collections of Late Fees and other outstanding fees during the related Monthly
Period, (b) that portion of Collections on the Receivables received during the
related Monthly Period allocated to interest, all Advances made by the Servicer
with respect to such Distribution Date and, to the extent attributable to
interest, the Repurchase Amount received with respect to each Receivable
repurchased by the Transferor or purchased by the Servicer under an obligation
that arose during the related Monthly Period and (c) all Recoveries and
Investment Earnings, each with respect to such Monthly Period.
"Available Principal" shall mean, for any Distribution Date, that
-------------------
portion of Collections on the Receivables received during the related Monthly
Period allocated to the principal balance of the Receivables, and, to the extent
attributable to principal, the Repurchase Amount received with respect to each
Receivable repurchased by the Transferor or purchased by the Servicer under an
obligation that arose during the related Monthly Period.
"Available Spread Account Amount" shall mean, for each Distribution
-------------------------------
Date, an amount equal to the lesser of (i) the amount on deposit in the Spread
Account and (ii) the Required Spread Account Amount.
"Average Default Ratio" shall mean, with respect to any Distribution
---------------------
Date, the average of the Default Ratios for the immediately preceding three
Monthly Periods.
"Average Delinquency Ratio" shall mean, with respect to any
-------------------------
Distribution Date, the average of the Delinquency Ratios for the immediately
preceding three Monthly Periods.
"Average Pool Balance" shall mean, with respect to any Monthly Period,
--------------------
an amount equal to (a) the sum of (i) the Pool Balance on the first day of such
Monthly Period plus (ii) the Pool Balance as of the last day of such Monthly
----
Period, divided by (b) two (2).
2
<PAGE>
"Business Day" shall mean any day other than a Saturday, a Sunday or
------------
a day on which banking institutions in New York, New York, or the city and state
in which the Corporate Trust Office of the Trustee, or applicable successor
trustee, is located, are authorized or obligated by law or executive order to be
closed.
"Certificate Principal Balance" shall mean, with respect to any
-----------------------------
Distribution Date, the sum of the Class A Certificate Principal Balance, the
Class B Certificate Principal Balance and the Class C Certificate Principal
Balance, each determined as of such Distribution Date.
"Certificate Register" shall mean the register maintained pursuant to
--------------------
subsection 6.3(a), providing for the registration of the Certificates and
transfers and exchanges thereof.
"Certificateholder" or "Holder" shall mean the Person in whose name a
----------------- ------
Certificate is registered in the Certificate Register.
"Certificates" shall mean collectively, the Class A Certificates, the
------------
Class B Certificates and the Class C Certificates.
"Check" shall mean, with respect to each Receivable, the canceled
-----
check of First USA Federal Savings Bank, pursuant to which the related Obligor
receives funds under such Receivable, or separate paper, in each case containing
the written indorsement of the related Obligor.
"Class" shall mean any one of the classes of Certificates issued
-----
pursuant to this Agreement.
"Class A Certificate Principal Balance" shall mean, for any
-------------------------------------
Distribution Date, the excess, if any, of (a) the Class A Initial Certificate
Principal Balance over (b) all payments of principal distributed to the Class A
Certificateholder on or prior to such Distribution Date.
"Class A Certificates" shall mean any of the First USA Consumer Loan
--------------------
Grantor Trust 1996-A, Class A Certificates executed by the Trustee on behalf of
the Trust and authenticated by or on behalf of the Trustee, substantially in the
form of Exhibit A-1 hereto.
"Class A Distribution Account" shall mean the account established and
----------------------------
maintained as such pursuant to Section 4.1(b).
"Class A Initial Certificate Principal Balance" shall mean
---------------------------------------------
$119,293,000.00.
"Class A Interest Available Funds" shall mean, with respect to any
--------------------------------
Distribution Date, the sum of (a) the Available Interest with respect to such
Distribution Date remaining after
3
<PAGE>
giving effect to the application of subsections 4.5(a) and 4.5(b) with respect
to such Distribution Date, (b) theClass C Percentage of Available Principal with
respect to such Distribution Date, (c) the Class B Percentage of Available
Principal with respect to such Distribution Date and (d) the Available Spread
Account Amount with respect to such Distribution Date remaining after giving
effect to the application of subsections 4.5(a) and 4.5(b) with respect to such
Distribution Date. Amounts available to be considered as part of Class A
Interest Available Funds shall be applied as such only (y) to the extent
necessary to effect the application provided for in subsection 4.5(c) and (z) in
the priority specified in the immediately preceding sentence.
"Class A Interest Carryover Shortfall" shall mean (a) for the initial
------------------------------------
Distribution Date, zero, and (b) for any other Distribution Date, the excess of
Class A Monthly Interest for the preceding Distribution Date and any outstanding
Class A Interest Carryover Shortfall for such preceding Distribution Date over
the amount in respect of interest that was actually deposited in the Class A
Distribution Account on such preceding Distribution Date.
"Class A Interest Distributable Amount" shall mean, for any
-------------------------------------
Distribution Date, the sum of Class A Monthly Interest for such Distribution
Date and the Class A Interest Carryover Shortfall for such Distribution Date.
"Class A Monthly Interest" shall mean, with respect to any
------------------------
Distribution Date, one-twelfth of the Class A Pass-Through Rate multiplied by
the Class A Certificate Principal Balance as of the preceding Distribution Date
(after giving effect to any payments made on such preceding Distribution Date)
or, in the case of the first Distribution Date, the Class A Initial Certificate
Principal Balance.
"Class A Monthly Principal" shall mean, with respect to any
-------------------------
Distribution Date, the sum of (a) the Class A Percentage of the Available
Principal for such Distribution Date and (b) the Class A Percentage of the
Aggregate Loss with respect to the related Monthly Period.
"Class A Pass-Through Rate" shall mean 6.30% per annum.
-------------------------
"Class A Percentage" shall mean, with respect to any Distribution
------------------
Date, a fraction, the numerator of which is the Class A Initial Certificate
Principal Balance and the denominator of which is the Initial Certificate
Principal Balance.
"Class A Pool Factor" shall mean, with respect to any Distribution
-------------------
Date, the Class A Certificate Principal Balance as of such Distribution Date
(after giving effect to any payments to be made on such Distribution Date),
divided by the Class A Initial Certificate Principal Balance, expressed as an
eight-digit decimal.
4
<PAGE>
"Class A Principal Available Funds" shall mean, with respect to any
---------------------------------
Distribution Date, the sum of (a) the Available Principal with respect to such
Distribution Date remaining after giving effect to the application of
subsections 4.5(c) and 4.5(d) with respect to such Distribution Date, (b)
Available Interest with respect to such Distribution Date remaining after giving
effect to the application of subsections 4.5(a), 4.5(b), 4.5(c), 4.5(d) and
4.5(e) with respect to such Distribution Date, and (c) the Available Spread
Account Amount with respect to such Distribution Date remaining after giving
effect to the application of subsections 4.5(a), 4.5(b) and 4.5(c) with respect
to such Distribution Date. Amounts available to be considered as part of Class A
Principal Available Funds shall be applied as such only (y) to the extent
necessary to effect the application provided for in subsection 4.5(f) and (z) in
the priority specified in the immediately preceding sentence.
"Class A Principal Carryover Shortfall" shall mean, for any
-------------------------------------
Distribution Date, the excess of Class A Monthly Principal for the preceding
Distribution Date and any outstanding Class A Principal Carryover Shortfall for
such preceding Distribution Date over the amount in respect of principal that
was actually deposited in the Class A Distribution Account on such preceding
Distribution Date.
"Class A Principal Distributable Amount" shall mean, with respect to
--------------------------------------
any Distribution Date, the sum of (a) Class A Monthly Principal for such
Distribution Date and (b) the Class A Principal Carryover Shortfall for such
Distribution Date. In addition, on the Final Scheduled Distribution Date, the
Class A Principal Distributable Amount shall include any additional amount
required to reduce the Class A Certificate Principal Balance to zero.
"Class B Certificate Principal Balance" shall mean, for any
--------------------------------------
Distribution Date, the excess, if any, of (a) the Class B Initial Certificate
Principal Balance over (b) all payments of principal distributed to the Class B
Certificateholder on or prior to such Distribution Date.
"Class B Certificates" shall mean any of the First USA Consumer Loan
--------------------
Grantor Trust, Class B Certificates executed by the Trustee on behalf of the
Trust and authenticated by or on behalf of the Trustee, substantially in the
form of Exhibit A-2 hereto.
"Class B Distribution Account" shall mean the account established and
----------------------------
maintained as such pursuant to Section 4.1(c).
"Class B Initial Certificate Principal Balance" shall mean
---------------------------------------------
$13,026,000.00.
"Class B Interest Available Funds" shall mean, with respect to any
--------------------------------
Distribution Date, the sum of (a) the Available Interest with respect to such
Distribution Date remaining after giving effect to the application of
subsections 4.5(a), 4.5(b)
5
<PAGE>
and 4.5(c) with respect to such Distribution Date and (b) the Class C Percentage
of Available Principal with respect to such Distribution Date remaining after
giving effect to the application of subsection 4.5(c) with respect to such
Distribution Date. Amounts available to be considered as part of Class B
Interest Available Funds shall be applied as such only (y) to the extent
necessary to effect the application provided for in subsection 4.5(d) and (z) in
the priority specified in the immediately preceding sentence.
"Class B Interest Carryover Shortfall" shall mean (a) for the initial
------------------------------------
Distribution Date, zero, and (b) for any other Distribution Date, the excess of
Class B Monthly Interest for the preceding Distribution Date and any outstanding
Class B Interest Carryover Shortfall for such preceding Distribution Date over
the amount in respect of interest that is actually deposited in the Class B
Distribution Account on such preceding Distribution Date.
"Class B Interest Distributable Amount" shall mean, with respect to
-------------------------------------
any Distribution Date, the sum of Class B Monthly Interest for such Distribution
Date and the Class B Interest Carryover Shortfall for such Distribution Date.
"Class B Monthly Interest" shall mean, with respect to any
------------------------
Distribution Date, one-twelfth of the Class B Pass-Through Rate multiplied by
the Class B Certificate Principal Balance as of the preceding Distribution Date
(after giving effect to any payments made on such preceding Distribution Date)
or, in the case of the first Distribution Date, the Class B Initial Certificate
Principal Balance.
"Class B Monthly Principal" shall mean, with respect to any
-------------------------
Distribution Date, the sum of (a) the Class B Percentage of the Available
Principal for such Distribution Date and (b) the Class B Percentage of the
Aggregate Loss with respect to the related Monthly Period.
"Class B Pass-Through Rate" shall mean 7.05% per annum.
-------------------------
"Class B Percentage" shall mean, with respect to any Distribution
------------------
Date, a fraction, the numerator of which is the Class B Initial Certificate
Principal Balance and the denominator of which is the Initial Certificate
Principal Balance.
"Class B Pool Factor" shall mean, with respect to any Distribution
-------------------
Date, the Class B Certificate Principal Balance as of such Distribution Date
(after giving effect to any payments to be made on such Distribution Date),
divided by the Class B Initial Certificate Principal Balance, expressed as an
eight-digit decimal.
"Class B Principal Carryover Shortfall" shall mean, for any
-------------------------------------
Distribution Date, the excess of Class B Monthly Principal for the preceding
Distribution Date and any outstanding Class B Principal Carryover Shortfall for
such preceding Distribution
6
<PAGE>
Date over the amount in respect of principal that was actually deposited in the
Class B Distribution Account for such preceding Distribution Date.
"Class B Principal Distributable Amount" shall mean, with respect to
--------------------------------------
any Distribution Date, the sum of (a) Class B Monthly Principal for such
Distribution Date and (b) the Class B Principal Carryover Shortfall for such
Distribution Date. In addition, on the Final Scheduled Distribution Date, the
Class B Principal Distributable Amount will include any additional amount
required to reduce the Class B Certificate Principal Balance to zero.
"Class C Certificate Principal Balance" shall mean, for any
-------------------------------------
Distribution Date, the excess, if any, of (a) the Class C Initial Certificate
Principal Balance over (b) all payments of principal distributed to the Class C
Certificateholder on or prior to such Distribution Date.
"Class C Certificates" shall mean any of the First USA Consumer Loan
--------------------
Grantor Trust, Class C Certificates executed by the Trustee on behalf of the
Trust and authenticated by or on behalf of the Trustee, substantially in the
form of Exhibit A-3 hereto.
"Class C Distribution Account" shall mean the account established and
----------------------------
maintained as such pursuant to Section 4.1(c).
"Class C Initial Certificate Principal Balance" shall mean
---------------------------------------------
$4,799,737.46.
"Class C Interest Available Funds" shall mean, with respect to any
--------------------------------
Distribution Date, the Available Interest with respect to such Distribution Date
remaining after giving effect to the application of subsections 4.5(a), 4.5(b),
4.5(c) and 4.5(d) with respect to such Distribution Date.
"Class C Interest Carryover Shortfall" shall mean (a) for the initial
------------------------------------
Distribution Date, zero, and (b) for any other Distribution Date, the excess of
Class C Monthly Interest for the preceding Distribution Date and any outstanding
Class C Interest Carryover Shortfall for such preceding Distribution Date over
the amount in respect of interest that was actually deposited in the Class C
Distribution Account on such preceding Distribution Date.
"Class C Interest Distributable Amount" shall mean, with respect to
-------------------------------------
any Distribution Date, the sum of Class C Monthly Interest for such Distribution
Date and the Class C Interest Carryover Shortfall for such Distribution Date.
"Class C Monthly Interest" shall mean, with respect to any
------------------------
Distribution Date, one-twelfth of the Class C Pass-Through Rate multiplied by
the Class C Certificate Principal Balance as of the preceding Distribution Date
(after giving effect to any payments made on such preceding Distribution Date)
or, in the
7
<PAGE>
case of the first Distribution Date, the Class C Initial Certificate Principal
Balance.
"Class C Monthly Principal" shall mean, with respect to any
-------------------------
Distribution Date, the sum of (a) the Class C Percentage of the Available
Principal for such Distribution Date and (b) the Class C Percentage of the
Aggregate Loss with respect to the related Monthly Period.
"Class C Pass-Through Rate" shall mean 8.18232% per annum.
-------------------------
"Class C Percentage" shall mean, with respect to any Distribution
------------------
Date, a fraction, the numerator of which is the Class C Initial Certificate
Principal Balance and the denominator of which is the Initial Certificate
Principal Balance.
"Class C Pool Factor" shall mean, with respect to any Distribution
-------------------
Date, the Class C Certificate Principal Balance as of such Distribution Date
(after giving effect to any payments to be made on such Distribution Date),
divided by the Class C Initial Certificate Principal Balance, expressed as an
eight-digit decimal.
"Class C Principal Carryover Shortfall" shall mean, for any
-------------------------------------
Distribution Date, the excess of Class C Monthly Principal for the preceding
Distribution Date and any outstanding Class C Principal Carryover Shortfall for
such preceding Distribution Date over the amount in respect of principal that
was actually deposited in the Class C Distribution Account for such preceding
Distribution Date.
"Class C Principal Distributable Amount" shall mean, with respect to
--------------------------------------
any Distribution Date, the sum of (a) Class C Monthly Principal for such
Distribution Date and (b) the Class C Principal Carryover Shortfall for such
Distribution Date. In addition, on the Final Scheduled Distribution Date, the
Class C Principal Distributable Amount will include any additional amount
required to reduce the Class C Certificate Principal Balance to zero.
"Closing Date" shall mean, December 17, 1996.
------------
"Code" shall have the meaning specified in subsection 6.3(c).
----
"Collateral Agent" shall mean, Bankers Trust (Delaware) a Delaware
----------------
banking corporation, in its capacity as collateral agent for the benefit of the
Certificateholders and the Transferor with respect to the Spread Account and the
Monthly Excess Interest.
"Collection Account" shall have the meaning specified in subsection
------------------
4.1(a).
8
<PAGE>
"Collections" shall mean all payments received by the Servicer in
-----------
respect of the Receivables, in the form of cash, checks, wire transfers, ATM
transfers or other form of payment in accordance with the Receivables.
"Contract Rate" shall mean, with respect to any Receivable, the annual
-------------
rate of interest stated in such Receivable.
"Corporate Trust Office" shall mean the principal office at which at
----------------------
any particular time the corporate trust business of the Trustee is administered,
which office is initially located at 1001 Jefferson Street, Suite 550,
Wilmington, Delaware 19801.
"Cut-Off Date" shall mean December 3, 1996.
------------
"Date of Processing" shall mean, with respect to any transaction, the
------------------
date on which such transaction is first recorded on the Servicer's computer
master file of unsecured consumer loan receivables (without regard to the
effective date of such recordation).
"Default Ratio" shall mean, with respect to any Monthly Period, the
-------------
ratio, expressed as an annual percentage, of (a) the Aggregate Loss minus the
Recoveries, each with respect to such Monthly Period, divided by (b) the Average
Pool Balance with respect to such Monthly Period.
"Defaulted Receivable" shall mean each Receivable which, in accordance
--------------------
with Servicer's customary and usual servicing procedures for servicing unsecured
consumer loan receivables comparable to the Receivables, the Servicer has
charged off as uncollectible; provided, that the Servicer shall charge off a
--------
Receivable as uncollectible no later than the date on which such Receivable
becomes 180 days delinquent. Notwithstanding the above, a Receivable shall
become a Defaulted Receivable on the day on which such Receivable is recorded as
charged off as uncollectible on the Servicer's computer master file of unsecured
consumer loans.
"Delinquency Ratio" shall mean, with respect to any Monthly Period,
-----------------
the ratio, expressed as a percentage, of (a) the principal amount of all
outstanding Receivables (other than Receivables repurchased by the Transferor or
the Servicer and Defaulted Receivables) which are 60 or more days delinquent as
of the end of such Monthly Period, determined in accordance with the Servicer's
customary practices, divided by (b) the Average Pool Balance with respect to
such Monthly Period.
"Determination Date" shall mean the fourth Business Day prior to each
------------------
Distribution Date.
9
<PAGE>
"Distribution Date" shall mean the fifteenth day of each month or, if
-----------------
such fifteenth day is not a Business Day, the next succeeding Business Day.
"Dollars", "$" or "U.S. $" shall mean United States dollars.
------- - ------
"ERISA" shall have the meaning specified in subsection 6.3(c).
-----
"FDIC" shall mean the Federal Deposit Insurance Corporation.
----
"Final Scheduled Distribution Date" shall mean the June 2002
---------------------------------
Distribution Date.
"Fitch" shall mean Fitch Investors Service, L.P.
-----
"Governmental Authority" shall mean the United States of America, any
----------------------
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Initial Certificate Principal Balance" shall mean $137,118,737.46.
-------------------------------------
"Initial Pool Balance" shall mean $137,118,737.46.
--------------------
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
---------------------
as amended from time to time.
"Investment Company Act" shall mean the Investment Company Act of
----------------------
1940, as amended from time to time.
"Investment Earnings" shall have the meaning specified in Section 3.6.
-------------------
"Late Fees" shall have the meaning specified in the loan agreement
---------
applicable to each Receivable for late fees or similar terms.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
----
assignment, participation or equity interest, deposit arrangement, encumbrance,
lien (statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
--------
however, that any assignment pursuant to Section 7.2 shall not be deemed to
- -------
constitute a Lien.
10
<PAGE>
"Loan Agreement" shall mean, with respect to any Receivable, the paper
--------------
copy of the agreement containing the terms relating to such Receivable.
"Monthly Excess Interest" shall mean the amount distributable to the
-----------------------
Transferor pursuant to subsection 4.5(g)(iii).
"Monthly Period" shall mean the period from and including the first
--------------
day of a calendar month to and including the last day of such calendar month.
"Monthly Servicing Fee" shall have the meaning specified in Section
---------------------
3.6.
"Obligor" shall mean, with respect to any Receivable, the Person or
-------
Persons obligated to make payments with respect to such Receivable, including
any guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by (i) with
---------------------
respect to the Transferor, any vice president or more senior officer of the
Transferor or (ii) with respect to the Servicer, any Servicing Officer of the
Servicer, and in either case, delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
------------------
be counsel for or an employee of the Person providing the opinion, and who shall
be reasonably acceptable to the Trustee.
"Optional Purchase Percentage" shall mean 5%.
----------------------------
"Paying Agent" shall mean any paying agent appointed pursuant to
------------
Section 6.6 and shall initially be the Trustee.
"Permitted Investments" shall mean (a) negotiable instruments or
---------------------
securities represented by instruments in bearer or registered form which
evidence (i) obligations of or fully guaranteed by the United States of America;
(ii) time deposits, promissory notes, or certificates of deposit of any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by federal or state banking or depositary institution authorities;
provided, however, that at the time of the Trust's investment or contractual
- -------- -------
commitment to invest therein, the certificates of deposit or short-term deposits
of such depositary institution or trust company shall have a credit rating from
Moody's or Standard & Poor's or Fitch (if then rated by Fitch) of P-1 or A-1+ or
F-1+, respectively; (iii) commercial paper having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating from Moody's or
Standard & Poor's or Fitch (if then rated by Fitch) of P-1 or A-1+ or F-1+,
respectively; (iv) bankers acceptances issued by any depository institution or
trust company described in clause (a)(ii) above; and (v) investments in money
11
<PAGE>
market funds rated AAA-m or AAA-mg by Standard & Poor's or P-1 by Moody's or F-1
by Fitch or otherwise approved in writing by each Rating Agency; provided,
--------
however, that investments in this clause (v) must be disposed of only on the
- -------
Transfer Date relating to the Monthly Period in which such investment is made by
the Trust; (b) demand deposits in the name of the Trust or the Trustee in any
depositary institution or trust company referred to in clause (a)(ii) above; (c)
repurchase agreements transacted with either (i) an entity subject to the United
States federal bankruptcy code, provided, however, that (A) the term of the
repurchase agreement is consistent with the requirements set forth in Section
4.1(c) with regard to the maturity of Permitted Investments or is due on demand,
(B) the Trustee or a third party acting solely as agent for the Trustee has
possession of the collateral, (C) the Trustee on behalf of the Trust has a
perfected first priority security or ownership interest in the collateral, (D)
the market value of the collateral is maintained at the requisite collateral
percentage of the obligation in accordance with standards of the Rating
Agencies, (E) the failure to maintain the requisite collateral level will
obligate the Trustee to liquidate the collateral immediately, (F) the securities
subject to the repurchase agreement are either obligations of, or fully
guaranteed as to principal and interest by, the United States of America or any
agency or any instrumentality or agency thereof, certificates of deposit or
bankers acceptances and (G) the securities subject to the repurchase agreement
are free and clear of any third party lien or claim, or (ii) a financial
institution insured by the FDIC, or any broker-dealer with "retail-customers"
that is under the jurisdiction of the Securities Investors Protection Corp.,
provided, however, that (A) the market value of the collateral is maintained at
the requisite collateral percentage of the obligation in accordance with the
standards of the Rating Agencies, (B) the Trustee or a third party (with a
rating from Moody's or Standard & Poor's or Fitch (if then rated by Fitch) of P-
1 or A-1+ or F-1+, respectively) acting solely as agent for the Trustee has
possession of the collateral, (C) the collateral is free and clear of third
party liens and, in the case of an SIPC broker, was not acquired pursuant to a
repurchase or reverse repurchase agreement and (D) the failure to maintain the
requisite collateral percentage will obligate the Trustee to liquidate the
collateral; provided, however, that at the time of the Trust's investment or
contractual commitment to invest in any repurchase agreement the short-term
deposit or commercial paper rating of such entity or institution in subsections
(i) and (ii) above shall have a credit rating of P-1 or A-1+ or F-1+ (if then
rated by Fitch) or their equivalent from each Rating Agency or; (d) any other
investment if the Rating Agency confirms in writing that such investment will
not adversely affect its then current rating of the Certificates.
"Person" shall mean any legal person, including any individual,
------
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of
similar nature.
12
<PAGE>
"Pool Balance" shall mean, as of any date of determination, the
------------
aggregate principal balance of all outstanding Receivables, calculated as of the
close of business on such date.
"Pool Factor" shall mean, with respect to any Distribution Date, the
-----------
Certificate Principal Balance as of such Distribution Date (after giving effect
to any payments to be made on such Distribution Date), divided by the Initial
Certificate Principal Balance, expressed as a eight-digit decimal.
"Principal Balance" shall mean, with respect to any Receivable, as of
-----------------
any date of determination, the amount advanced under the Receivable, minus that
-----
portion of all payments received on or prior to such date allocable to
principal. The Principal Balance of a Defaulted Receivable or a Repurchased
Receivable shall be deemed to be zero, in each case, as of such date.
"Qualified Institution" shall have the meaning specified in subsection
---------------------
4.1(a)(ii).
"Rating Agency" shall mean Fitch.
-------------
"Rating Agency Condition" shall mean, with respect to any action, that
-----------------------
(i) each Rating Agency shall have notified the Transferor, the Servicer and the
Trustee in writing that such action will not result in the reduction or the
withdrawal of the rating of any outstanding Certificate with respect to which it
is the Rating Agency and (ii) each Certificateholder received ten Business Days
prior notice from the Transferor or the Servicer that such action was being
contemplated.
"Receivable" shall mean each unsecured consumer installment loan
----------
contract, including all proceeds thereof and payments thereunder (other than
interest accrued and unpaid as of the Cut-Off Date), identified on Schedule 1 to
this Agreement.
"Receivable File" shall have the meaning specified in Section 3.10.
---------------
"Receivable Information" shall have the meaning specified in
----------------------
subsection 2.3(b).
"Record Date" shall mean, with respect to any Distribution Date, the
-----------
last Business Day of the immediately preceding Monthly Period.
"Recoveries" shall mean, with respect to any Monthly Period, all
----------
moneys received by the Servicer with respect to any Defaulted Receivable, net of
any expense of the Servicer in connection with the collection of such Receivable
and any payments required by law to be remitted to the Obligor, if any.
"Relevant UCC" shall mean the Uniform Commercial Code as in effect in
------------
the applicable jurisdiction.
13
<PAGE>
"Repurchase Amount" shall mean, with respect to a Repurchased
-----------------
Receivable, the sum of the Principal Balance thereof, as of the Record Date
preceding the Transfer Date on which such Receivable becomes a Repurchased
Receivable, plus the Accrued Interest thereon; and, with respect to a Defaulted
Receivable the sum of the Principal Balance thereof, immediately prior to such
Receivable becoming a Defaulted Receivable, plus the Accrued Interest thereon
through the last day of the Monthly Period immediately preceding the Transfer
Date on which the Repurchase Amount is deposited into the Collection Account
pursuant to Section 4.4 (the accrued interest for the Monthly Period in which
such Receivable became a Defaulted Receivable to be calculated at a rate equal
to one-twelfth of the sum of (A) the Class C Pass-Through Rate and (B) the
Servicing Fee Rate).
"Repurchased Receivable" shall mean, as of any Record Date, a
----------------------
Receivable repurchased as of the following Transfer Date by the Transferor
pursuant to Section 2.6 or 11.2 or purchased as of such day by the Servicer
pursuant to Section 3.5.
"Required Spread Account Amount" shall mean, with respect to any
------------------------------
Distribution Date, the product of (i) the Required Spread Account Percentage
with respect to such Distribution Date and (ii) the Initial Pool Balance.
"Required Spread Account Percentage" shall mean, with respect to any
----------------------------------
Distribution Date, 1.0%; provided, however, that with respect to any
-------- -------
Distribution Date (i) if the Average Default Ratio relating to any such
Distribution Date exceeds 2.0%, then the Required Spread Account Percentage for
such Distribution Date will equal 1.5%; (ii) if the Average Default Ratio
relating to any such Distribution Date exceeds 3.0%, then the Required Spread
Account Percentage for such Distribution Date will equal 2.0%; (iii) if the
Average Delinquency Ratio relating to any such Distribution Date exceeds 4.0%,
then the Required Spread Account Percentage for such Distribution Date will
equal 1.5%; and (iv) if the Average Delinquency Ratio relating to any such
Distribution Date exceeds 5.0%, then the Required Spread Account Percentage for
such Distribution Date will equal 2.0%; provided further, however, that,
-------- ------- -------
notwithstanding anything to the contrary contained within this Agreement, the
definition of Required Spread Account Percentage may be modified at the
Transferor's option at any time if the Rating Agency Condition is satisfied with
respect to such modification.
"Requirements of Law" shall mean, for any Person, the certificate of
-------------------
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether federal, state or local (including, without limitation, usury laws, the
federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
14
<PAGE>
"Responsible Officer" shall mean, when used with respect to the
-------------------
Trustee, any officer within the Corporate Trust Office of the Trustee including
any Managing Director, Vice President, Assistant Vice President, Secretary,
Assistant Secretary, Treasurer, Assistant Treasurer or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject and, in each case, who
is responsible for the administration of the transactions contemplated by the
Agreement.
"Secured Obligations" shall have the meaning specified in Section 2.2.
-------------------
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Servicer" shall mean initially First USA Federal Savings Bank, and
--------
its permitted successors and assigns, and thereafter any Person appointed as
successor as herein provided to service the Receivables.
"Servicer Default" shall have the meaning specified in Section 9.1.
----------------
"Servicer's Certificate" shall mean the monthly servicer's certificate
----------------------
to be delivered by the Servicer to the Trustee pursuant to Section 3.7,
substantially in the form of Exhibit B hereto, as it may be modified from time
to time in accordance with subsection 1.2(e).
"Servicing Fee Available Funds" shall mean, with respect to any
-----------------------------
Distribution Date, the sum of (a) the Available Interest with respect to such
Distribution Date remaining after giving effect to the application of subsection
4.5(a) on such Distribution Date and (b) the Available Spread Account Amount
with respect to such Distribution Date remaining after giving effect to the
application of subsection 4.5(a) on such Distribution Date. Amounts available to
be considered as part of Servicing Fee Available Funds shall be applied as such
only (y) to the extent necessary to effect the application provided for in
subsection 4.5(b) and (z) in the priority specified in the immediately preceding
sentence.
"Servicing Fee Rate" shall mean 1.0% per annum.
------------------
"Servicing Officer" shall mean any officer of the Servicer involved
-----------------
in, or responsible for, the administration and servicing of the Receivables
whose name appears on a list of servicing officers furnished to the Trustee by
the Servicer, as such list may from time to time be amended.
15
<PAGE>
"Spread Account" shall have the meaning specified in subsection
--------------
4.6(a).
"Spread Account Initial Deposit" shall mean $1,371,187.37.
------------------------------
"Successor Servicer" shall have the meaning specified in subsection
------------------
9.2(a).
"Termination Notice" shall have the meaning specified in Section 9.1.
------------------
"Transfer" shall have the meaning specified in subsection 6.3(b).
--------
"Transfer Agent and Registrar" shall have the meaning specified in
----------------------------
Section 6.3 and shall initially be the Trustee.
"Transfer Date" shall mean the Business Day immediately prior to each
-------------
Distribution Date.
"Transferor" shall mean First USA Securitization Corporation, a
----------
Delaware corporation.
"Trust" shall mean the First USA Consumer Loan Grantor Trust 1996-A
-----
created by this Agreement, the corpus of which shall consist of the Receivables
and all monies due or to become due with respect thereto, all proceeds (as
defined in Section 9-306 of the Relevant UCC) of the Receivables and such funds
as from time to time are deposited in the Collection Account, the Class A
Distribution Account, the Class B Distribution Account and the Class C
Distribution Account (other than any funds in respect of the Monthly Excess
Interest).
"Trust Property" shall have the meaning specified in Section 2.2.
--------------
"Trustee" shall mean Bankers Trust (Delaware), a Delaware banking
-------
corporation, and any successor to the corporate trust business and any Person
resulting from or surviving any consolidation or merger to which it or its
successors may be a party, or any successor trustee appointed as herein
provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time to
---
time, as in effect in any specified jurisdiction.
Section 1.2 Other Definitional Provisions.
-----------------------------
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
16
<PAGE>
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partially defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles or regulatory accounting principles, as
applicable. To the extent that the definitions of accounting terms herein are
inconsistent with the meanings of such terms under generally accepted accounting
principles or regulatory accounting principles, the definitions contained herein
shall control.
(c) The agreements, representations and warranties of First USA
Federal Savings Bank in this Agreement in its capacity as Servicer shall be
deemed to be the agreements, representations and warranties of First USA Federal
Savings Bank solely in such capacity.
(d) The agreements, representations and warranties of First USA
Securitization Corporation in this Agreement in its capacity as Transferor shall
be deemed to be the agreements, representations and warranties of First USA
Securitization Corporation solely in such capacity.
(e) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and Section, subsection,
Schedule and Exhibit references contained in this Agreement are references to
Sections, subsections, Schedules and Exhibits in or to this Agreement unless
otherwise specified. The Servicer's Certificate shall be in substantially the
form of Exhibit B, with such additions as the Servicer may determine to be
necessary or desirable. The Servicer shall, upon making such determination,
deliver to the Trustee and each Rating Agency an Officer's Certificate to which
shall be annexed the form of the related Exhibit, as so changed. Upon the
delivery of such Officer's Certificate to the Trustee, the related Exhibit, as
so changed, shall for all purposes of this Agreement constitute such Exhibit.
The Trustee may conclusively rely upon such Officer's Certificate in determining
whether the related Exhibit, as changed, conforms to the requirements of this
Agreement.
Section 1.3 Simple Interest Method; Allocations. All allocations of
-----------------------------------
payments to principal and interest and determinations of periodic charges and
the like on the Receivables shall be based on a year with the actual number of
days in such year and twelve months with the actual number of days in each such
month. Each payment on a Receivable shall be applied first to any outstanding
fees and Late Fees under the terms of the Receivable, then to the amount of
interest accrued on such Receivable to the date of receipt and then to reduce
the principal amount outstanding on the Receivable. Amounts paid by the
Transferor or the Servicer in respect of Repurchased
17
<PAGE>
Receivables shall be allocated first to any Accrued Interest and then to the
Principal Balance of the related Receivable.
Section 1.4 Statement of Intention. It is the intention of the
----------------------
parties hereto and, by their acquisition of an interest herein, the
beneficiaries hereof, that the Trust be treated as a fixed investment trust
described in United States Treasury Regulations section 301.7701-4(c).
Accordingly, notwithstanding anything to the contrary herein, neither the
Transferor, the Trustee nor the Servicer shall have any explicit or implicit
obligation, right or power to vary the corpus of the Trust (whether by sale,
investment or reinvestment of Trust assets) in a manner inconsistent with the
requirements of such Treasury Regulation. The provisions of this Agreement shall
be construed in furtherance of the foregoing intention.
[End of Article I]
18
<PAGE>
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Creation of the Trust. Upon the execution of this
---------------------
Agreement by the parties hereto, there is hereby created the First USA Consumer
Loan Grantor Trust 1996-A.
Section 2.2 Conveyance of Receivables. The Transferor does hereby
-------------------------
sell, transfer, assign, set-over and otherwise convey to the Trust, for the
benefit of the Certificateholders, without recourse, all of its right, title and
interest, whether now owned or hereafter acquired, in and to the Receivables,
all accounts, contract rights, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods, letters of
credit, advices of credit, certificated securities and uncertificated securities
consisting of, arising from, or relating to the Receivables (including proceeds
of the repurchase of Receivables by the Transferor pursuant to Sections 2.6 and
11.2 or the purchase of Receivables by the Servicer pursuant to Section 3.5),
all monies due or to become due and all amounts received with respect to such
Receivables, and all rights of the Transferor, at law or in equity, with respect
thereto, including without limitation, the rights to enforce, collect and
receive payments on such Receivables, and all proceeds (as defined in the
Relevant UCC) of and Collections of such Receivables, and all products of, and
books and records describing or used in connection with, the foregoing (the
"Trust Property"). The foregoing sale, transfer, assignment, set-over and
conveyance does not constitute and is not intended to result in a creation or an
assumption by the Trust, the Trustee or any Certificateholder of any obligation
of the Transferor, the Servicer or any other Person in connection with the
Receivables or any agreement or instrument relating thereto.
It is the intention of the parties hereto that the purchase made
hereunder shall constitute a sale and assignment as such terms are used in
Article 9 of the UCC, which sales and assignments are absolute, irrevocable and
without recourse except as specifically provided herein and shall provide the
Trust with the full benefits of ownership of the Trust Property. In the event
that the purchase hereunder is deemed to constitute a pledge rather than a sale
and assignment of the aforementioned property, the Transferor does hereby grant
to the Trust a first priority perfected security interest in and to and a lien
on the Trust Property. The possession by the Trustee or its transferee or agent
of chattel paper, instruments, documents, money, deposit accounts, certificates
of deposit, goods, letters of credit, advises of credit or certificated
securities consisting of, arising from, or relating to the Receivables shall be
deemed to be "possession by the secured party" for purposes of perfecting such
security interest pursuant to the Relevant UCC (including, without limitation,
Sections 9-305, 8-313, or 8-321 thereof). Notifications to persons holding such
property, and
19
<PAGE>
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed to be notifications to, or acknowledgements, receipts or
confirmations from financial intermediaries, bailees or agents (as applicable)
of, the Trust or its transferee for the purpose of perfecting such security
interest under the relevant UCC and other applicable laws.
Simultaneously with the sale, transfer, assignment, set-over and
conveyance by the Transferor pursuant to this Section 2.2, the Trustee on behalf
of the Trust does hereby sell, transfer, assign and otherwise convey to the
Transferor all of its right, title and interest in the Monthly Excess Interest.
Notwithstanding anything herein to the contrary, the property of the
Trust shall not include, and the Trust shall not have any right to, the Monthly
Excess Interest or the Spread Account, any funds actually or deemed to be
deposited in such account or any investments therein except to the extent
separately provided in Section 4.6.
In connection with such sale, transfer, assignment, set-over and
conveyance, the Transferor agrees to record and file, at its own expense,
financing statements (including any continuation statements with respect to such
financing statements when applicable) with respect to the Receivables meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the assignment of the Receivables to
the Trust, and to deliver a file-stamped copy of such financing statement or
continuation statement or other evidence of such filing (which may, for purposes
of this Section 2.2, consist of telephone confirmation of such filing to be
followed with a file stamped copy) to the Trustee on or prior to the Closing
Date, and in the case of any continuation statements filed pursuant to this
Section 2.2, as soon as practicable after receipt thereof by the Transferor. The
foregoing sale, transfer, assignment, set-over and conveyance to the Trust shall
be made to the Trustee, on behalf of the Trust, and each reference in this
Agreement to such sale, transfer, assignment, set-over and conveyance shall be
construed accordingly.
In connection with such transfer, the Transferor agrees, at its own
expense, on or prior to the Closing Date (i) to annotate and indicate in its
records that the Receivables with the designation "Pool Number 2" have been
transferred to the Trust pursuant to this Agreement for the benefit of the
Certificateholders and (ii) to deliver to the Trustee a computer file or
microfiche list containing a true and complete list in all material respects of
all such Receivables, identified by loan number and setting forth the Principal
Balance of each Receivable as of the Cut-Off Date. Such file or list shall be
marked as Schedule 1 to this Agreement, delivered to the Trustee as confidential
and proprietary, and is hereby incorporated into and made a part of this
Agreement. The Transferor further agrees not to alter the "Pool Number 2"
designation referenced in clause (i) of this paragraph with respect to any
Receivable during the term
20
<PAGE>
of this Agreement unless and until such Receivable becomes a Repurchased
Receivable. Also in connection with such transfer, the Transferor agrees, at its
own expense, to deliver to the Trustee (i) on or prior to the Closing Date the
Check relating to each Receivable and (ii) on or prior to January 31, 1997, the
Loan Agreement relating to each Receivable, together, in each case, with an
Officer's Certificate to the effect that, to the best knowledge of the
Transferor, such delivery is complete and otherwise being made in accordance
with the terms hereof. The Trustee shall forward a copy of the Officer's
Certificate provided pursuant to clause (ii) above to the Certificateholders
upon receipt of the Loan Agreements and such Officer's Certificate in accordance
with the preceding sentence (or give notice to the Certificateholders of the
lack of receipt thereof by January 31, 1997). In connection with such delivery,
the Trustee or its agent shall hold the Checks and the Loan Agreements in trust
for the exclusive benefit of the Certificateholders. The Trustee makes no
representation or warranty with respect to the content or enforceability of any
Check or Loan Agreement. On or prior to March 15, 1997, the Trustee shall
deliver a report to the Servicer, each Certificateholder and each Rating Agency
identifying for each Receivable identified by loan number on the diskette
delivered pursuant to Section 2.2 (i) each Check that does not have a
corresponding Loan Agreement, (ii) each Loan Agreement that does not have a
corresponding Check, (iii) the loan number of each Receivable that does not have
both a Check and a Loan Agreement and (iv) the number of Receivables identified
on the diskette delivered pursuant to Section 2.2.
Pursuant to the written request of the Transferor, the Trustee shall
cause Certificates in authorized denominations evidencing the entire interest in
the Trust to be duly executed and authenticated and delivered to or upon the
order of the Transferor pursuant to Section 6.2.
Section 2.3 Acceptance by Trustee.
---------------------
(a) The Trustee hereby acknowledges its acceptance, on behalf of the
Trust, of all right, title and interest previously held by the Transferor in and
to the Receivables conveyed to the Trustee pursuant to Section 2.2, and declares
that it shall maintain such right, title and interest, upon the Trust herein set
forth, for the benefit of the Certificateholders. The Trustee further
acknowledges that, prior to or simultaneously with the execution and delivery of
this Agreement, the Transferor delivered to the Trustee (i) the computer file or
microfiche list described in the sixth paragraph of Section 2.2 and (ii) the
Checks described in the sixth paragraph of Section 2.2.
(b) The Trustee hereby agrees not to disclose to any Person any of
the loan numbers or other information contained in the computer file or
microfiche list delivered to the Trustee by the Transferor pursuant to Section
2.2 (the "Receivable Information") except as is required in connection with the
performance of its duties hereunder or in enforcing the rights of the
Certificateholders or to a Successor Servicer appointed pursuant to Section 9.2,
any successor trustee appointed pursuant
21
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to Section 10.8, any co-trustee or separate trustee appointed pursuant to
Section 10.10 or any other Person in connection with a UCC search or as mandated
pursuant to any Requirement of Law applicable to the Trustee. The Trustee agrees
to take such measures as shall be reasonably requested by the Transferor to
protect and maintain the security and confidentiality of such information, and,
in connection therewith, shall allow the Transferor to inspect the Trustee's
security and confidentiality arrangements from time to time upon three days
prior notice during normal business hours. In the event that the Trustee is
required by law to disclose any Receivable Information, the Trustee shall
provide the Transferor with prompt written notice, unless such notice is
prohibited by law, of any such request or requirement so that the Transferor may
request a protective order or other appropriate remedy. The Trustee shall make
reasonable efforts to provide the Transferor with written notice no later than
five days prior to any disclosure pursuant to this subsection 2.3(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.4 Representations and Warranties of the Transferor. The
------------------------------------------------
Transferor hereby represents and warrants to the Trustee as of the Closing Date:
(a) Organization and Good Standing. The Transferor is a Delaware
------------------------------
corporation duly organized and validly existing in good standing under the laws
of the State of Delaware and has full corporate power, authority and legal right
to own its properties and conduct its business as such properties are presently
owned and such business is presently conducted, and to execute, deliver and
perform its obligations under this Agreement.
(b) Due Qualification. The Transferor is duly qualified to do
-----------------
business and is in good standing as a foreign corporation (or is exempt from
such requirement), and has obtained all necessary licenses and approvals with
respect to the Transferor, in each jurisdiction in which failure to so qualify
or to obtain such licenses and approvals would have a material adverse effect on
the interests of the Certificateholders hereunder or render any of the
Receivables unenforceable; provided, however, that no representation or warranty
-------- -------
is made with respect to any qualifications, licenses or approvals which the
Trustee has or may be required at any time to obtain, if any, in connection with
the transactions contemplated hereby.
(c) Due Authorization. The execution and delivery of this Agreement
-----------------
and the consummation of the transactions provided for in this Agreement have
been duly authorized by the Transferor by all necessary corporate action on its
part and this Agreement will remain, from the time of its execution, an official
record of the Transferor.
22
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(d) No Conflict. The execution and delivery of this Agreement, the
-----------
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof will not conflict with, result in any breach of
any of the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any indenture,
contract, agreement, mortgage, deed of trust, or other instrument to which the
Transferor is a party or by which it or any of its properties are bound.
(e) No Violation. The execution and delivery of this Agreement, the
------------
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof will not conflict with or violate any
Requirements of Law applicable to the Transferor.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending or, to the best knowledge of the Transferor, threatened against the
Transferor before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality having jurisdiction over the Transferor
(i) asserting the invalidity of this Agreement or the Certificates, (ii) seeking
to prevent the issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement or the Certificates, (iii) seeking
any determination or ruling that, in the reasonable judgment of the Transferor,
would materially and adversely affect the performance by the Transferor of its
obligations under this Agreement, (iv) seeking any determination or ruling that
would materially and adversely affect the validity or enforceability of this
Agreement or the Certificates or (v) seeking to affect adversely the income tax
attributes of the Trust under the federal or Delaware income or franchise tax
laws.
(g) All Consents Required. All material approvals, authorizations,
---------------------
consents, orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery of this
Agreement, the performance of the transactions contemplated by this Agreement
and the fulfillment of the terms hereof, have been obtained; provided, however,
-------- -------
that the Transferor makes no representation or warranty regarding state
securities or "blue sky" laws in connection with the offer and sale of the
Certificates.
The representations and warranties set forth in this Section 2.4 shall
survive the transfer and assignment of the Trust Property to the Trust. Upon
discovery by the Transferor, the Servicer or the Trustee of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the others. The Trustee shall not be deemed
to have discovered any such breach and shall have no obligation to give any
notice pursuant to this Section 2.4 unless a Responsible Officer of the Trustee
has actual knowledge of such breach.
23
<PAGE>
Section 2.5 Representations and Warranties of the Transferor Relating
---------------------------------------------------------
to the Agreement and the Receivables.
- ------------------------------------
(a) Binding Obligation; Valid Transfer and Assignment. The Transferor
-------------------------------------------------
hereby represents and warrants to the Trustee that, as of the Closing Date, this
Agreement constitutes a legal, valid and binding obligation of the Transferor,
enforceable against the Transferor in accordance with its terms, except (A) as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(b) The Transferor makes the following representations and warranties
as to the Receivables on which the Trustee shall rely in accepting the
Receivables in trust and authenticating the Certificates. Such representations
and warranties shall speak as of the Cut-Off Date unless otherwise specified and
shall survive the sale, transfer, assignment, set-over and conveyance of the
Receivables to the Trustee.
(i) The information set forth in Schedule 1 hereto with respect to
each Receivable is true and correct in all material respects, and no
selection procedures adverse to the Certificateholders has been utilized in
selecting the Receivables from all receivables owned by the Transferor
which meet the selection criteria specified herein.
(ii) No Receivable has been sold, transferred, assigned or pledged by
the Transferor to any Person other than the Trustee.
(iii) Immediately prior to the transfer and assignment of the
Receivables to the Trust herein contemplated, the Transferor has good and
marketable title to each Receivable free and clear of all Liens and rights
of others; and, immediately upon the transfer thereof, the Trustee, for the
benefit of the Certificateholders, has either (i) good and marketable title
to each Receivable, free and clear of all Liens and rights of others, and
the transfer has been perfected under applicable law or (ii) a first
priority perfected security interest in each Receivable.
(c) Conditions Applicable to the Receivables. The Transferor hereby
----------------------------------------
represents and warrants to the Trustee that each Receivable satisfies the
following conditions as of the Cut-Off Date unless otherwise specified.
(i) Each Receivable was originated by First USA Federal Saving Bank.
24
<PAGE>
(ii) Each Receivable conveyed hereby had a remaining scheduled
maturity, as of the Cut-Off Date, of not less than 12 months nor greater
than 60 months.
(iii) Each Receivable is a fully-amortizing fixed rate simple
interest contract that provides for level scheduled monthly payments over
its remaining term, and has a Contract Rate of at least 10.0% and not more
than 16.0%.
(iv) Each Receivable has been entered into by an Obligor who has not
been identified on the computer files of the Servicer as in bankruptcy
proceedings as of the Cut-Off Date.
(v) Each Receivable has no payment that is more than 30 days past due
as of the Cut-Off Date.
(vi) Each Receivable had a remaining principal balance, as of the
Cut-Off Date, of at least $100 and not greater than $30,000;
(vii) Each Receivable complied at the time it was originated or made,
and complies on and after the Cut-Off Date, in all material respects with
all requirements of applicable federal, state, and local laws, and
regulations thereunder, including usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the
Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the Magnuson-Moss Warranty Act, Federal
Reserve Board Regulations B and Z, state adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code, and any other
consumer credit, equal opportunity, and disclosure laws applicable to such
Receivable and sale thereof.
(viii) Each Loan Agreement and Receivable constitutes the legal,
valid, and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in all material respects in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, liquidation and other similar laws and
equitable principles relating to or affecting the enforcement of creditors'
rights.
(ix) No Receivable is due from the United States of America or any
state or from any agency, department, instrumentality or political
subdivision of the United States of America or any state or local
municipality.
(x) No Receivable has been satisfied, subordinated, or rescinded in
whole or in part.
(xi) No provision of a Receivable has been waived by the Transferor
in such a manner that such Receivable fails either to meet all of the
representations and warranties
25
<PAGE>
made by the Transferor herein with respect thereto or to meet all of the
conditions with respect thereto pursuant to this Section 2.5(c).
(xii) No Receivable has been amended by the Transferor except
pursuant to instruments maintained by the Transferor in the ordinary course
of its business, and no such amendment has caused such Receivable either to
fail to meet all of the representations and warranties made by the
Transferor herein with respect thereto or to fail to meet all of the
conditions with respect thereto pursuant to this subsection 2.5(c).
(xiii) As of the Cut-Off Date, there are no facts which would give
rise to any right of rescission, setoff, counterclaim, or defense, or of
the same being asserted or threatened, with respect to any Receivable.
(xiv) Except for payment defaults continuing for a period of not more
than 30 days as of the Cut-Off Date, no default, breach, violation, or
event permitting acceleration under the terms of any Receivable exists; no
continuing condition that with notice or lapse of time would constitute a
default, breach, violation, or event permitting acceleration under the
terms of any Receivable exists; and the Transferor has not waived any of
the foregoing.
(xv) No Receivable has been originated in, or is subject to the laws
of, any jurisdiction under which the sale, transfer, and assignment of such
Receivable under this Agreement or pursuant to transfers of the
Certificates is unlawful, void or voidable.
(xvi) With respect to each Receivable, the sole executed original
Check, properly and fully completed, with respect to such Receivable, will
have been delivered to the Trustee on the Closing Date.
(xvii) All filings will have been made on the Closing Date, including
all filings under the Relevant UCC, which are necessary in any jurisdiction
to cause the ownership and title interests of the Trust in the Receivables
to be afforded priority over competing claims of the holders of security
interests or other claims against whom such filings can assure priority.
(d) Notice of Breach. The representations and warranties set forth
----------------
in this Section 2.5 shall survive the transfer and assignment of the Receivables
to the Trust. Upon discovery by the Transferor, the Servicer or the Trustee of a
breach of any of the representations and warranties set forth in this Section
2.5, the party discovering such breach shall give prompt written notice to the
other parties mentioned above. The Transferor agrees to cooperate with the
Servicer and the Trustee in attempting to cure any such breach. The Trustee
shall not be
26
<PAGE>
deemed to have discovered any such breach and shall have no obligation to give
any notice pursuant to this Section 2.5 unless a Responsible Officer of the
Trustee has actual knowledge of such breach.
Section 2.6 Repurchase Upon Breach or Failure of a Condition. The
------------------------------------------------
Transferor, the Servicer, or the Trustee, as the case may be, shall inform the
other parties promptly, in writing, upon the discovery by the Transferor, the
Servicer or the Trustee of either any breach of the Transferor's representations
and warranties set forth in subsection 2.5(b) or the failure of any Receivable
to satisfy any of the conditions set forth in subsection 2.5(c) which materially
and adversely affects the Trust's interest in any Receivable. Unless the breach
or failed condition shall have been cured by the last day of the Monthly Period
following the Monthly Period in which such discovery occurred (or, at the
Transferor's option, the last day of the Monthly Period in which such discovery
occurred), the Transferor shall repurchase any Receivable the Trust's interest
in which was materially and adversely affected by the breach or failed
condition, as of such last day. In consideration of the repurchase of a
Receivable, the Transferor shall remit the Repurchase Amount of such Receivable,
for credit as of such last day, in the manner specified in Section 4.4. In the
event that, as of the Cut-Off Date, any Receivable shall have a Contract Rate
which is lower than the sum of the Class C Pass-Through Rate and the Servicing
Fee Rate, the Transferor shall repurchase such Receivable on the terms and in
the manner specified above. The sole remedy of the Trust, the Trustee or the
Certificateholders with respect either to a breach of the Transferor's
representations and warranties set forth in subsection 2.5(b) or to a failure to
satisfy any of the conditions set forth in subsection 2.5(c) shall be to require
the Transferor to repurchase Receivables pursuant to this Section 2.6. The
obligation of the Transferor to repurchase any Receivable under this Section 2.6
shall not be solely dependent upon the actual knowledge of the Transferor of any
breached representation or warranty. The Trustee shall have no duty to conduct
any affirmative investigation as to the occurrence of any condition requiring
the repurchase of any Receivable pursuant to this Section 2.6 or the eligibility
of any Receivable for purposes of this Agreement.
[End of Article II]
27
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters Relating to
-------------------------------------------------------
the Servicer.
- ------------
(a) First USA Federal Savings Bank agrees to act as the Servicer
under this Agreement. The Certificateholders, by their acceptance of the
Certificates, consent to First USA Federal Savings Bank acting as the Servicer.
(b) The Servicer shall service and administer the Receivables and
shall collect payments due under the Receivables in accordance with its
customary and usual servicing procedures for servicing unsecured consumer loan
receivables comparable to the Receivables and shall have full power and
authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing and subject to Section 9.1, the Servicer or its
designee is hereby authorized and empowered (i) unless such power and authority
is revoked by the Trustee on account of the occurrence of a Servicer Default
pursuant to Section 9.1, to instruct the Trustee in writing, as set forth in
this Agreement, (ii) to execute and deliver, on behalf of the Trust for the
benefit of the Certificateholders, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables and (iii) to take any other action
and exercise any other power permitted to be taken or exercised by the Servicer
pursuant to the terms of this Agreement. The Trustee agrees that it shall
promptly follow the instructions of the Servicer to withdraw funds from the
Collection Account, the Class A Distribution Account, the Class B Distribution
Account and the Class C Distribution Account and make demands for withdrawals
from the Spread Account and take any action required under this Agreement at
such time as required under this Agreement. The Trustee shall furnish the
Servicer with any powers of attorney or other documents necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
hereunder and the Trustee shall not be held responsible for any act or omission
by the Servicer in its use of such powers of attorney.
(c) In the event that a Receivable becomes a Repurchased Receivable
then, in any such event, the Servicer agrees to account for payments received
with respect to such Repurchased Receivable separately from its accounting for
Collections on Receivables retained by the Trust.
28
<PAGE>
(d) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other unsecured consumer loan receivables.
Section 3.2 Servicing Modifications to Terms of Receivables. No
-----------------------------------------------
extensions of, or other modifications to, the Receivables shall be made by the
Servicer if such modifications would have a material adverse effect on the
interests of Certificateholders. The Servicer shall not change the amount of
(except with respect to a prepayment of a scheduled payment that does not result
in a deferral of any other scheduled payment) or reschedule the due date of any
scheduled payment to a date more than 30 days from the original due date of such
scheduled payment, change the Contract Rate of, or extend any Receivable or
change any material term of a Receivable, except with respect to certain
unilateral changes as provided by the terms of the Receivable or of this
Agreement or as required by law or court order; provided, however, that the
-------- -------
Servicer may grant extensions of the due date for a payment on a Receivable that
is in default or with respect to which, absent such extension, default is
reasonably foreseeable, and the Servicer would grant such extension with respect
to comparable unsecured consumer loan receivables that it services for itself,
but such extension would be granted only if (i) the Available Spread Account
Amount is greater than zero at the time of such extension, (ii) the extension is
for no more than three months, (iii) the total period of all credit related
extensions granted on such Receivable will not exceed the number of months equal
to the number of whole years comprising the original term of the Receivable and
(iv) the maturity of such Receivable would not be extended beyond the Monthly
Period immediately preceding the Final Scheduled Distribution Date and the
rescheduling or extension would not modify the terms of such Receivable in such
a manner as to constitute a cancellation of such Receivable and the creation of
a new receivable for federal income tax purposes. If, as a result of
inadvertently rescheduling or extending of payments, such rescheduling or
extension breaches any of the terms of the proviso to the preceding sentence,
then the Servicer shall be obligated to purchase such Receivable pursuant to
Section 3.5. For the purpose of such purchases pursuant to Section 3.5, notice
shall be deemed to have been received by the Servicer at such time as shall make
purchase mandatory as of the last day of the Monthly Period during which the
discovery of such breach shall have occurred. The Servicer may, in its
discretion, in accordance with its customary standards, policies and procedures,
waive any Late Fees or other fees that may be collected in the ordinary course
of servicing a Receivable.
Section 3.3 Representations and Warranties of the Servicer. First
----------------------------------------------
USA Federal Savings Bank, as Servicer, hereby makes, and any Successor Servicer
by its appointment hereunder shall make the following representations and
warranties on which
29
<PAGE>
the Trustee has relied in accepting the Receivables in trust and in
authenticating the Certificates issued on the Closing Date:
(a) Organization and Good Standing. The Servicer is a banking
------------------------------
corporation chartered under the laws of a state of the United States, a national
banking association chartered under the laws of the United States, or a federal
savings bank chartered under the laws of the United States, as applicable, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has full corporate power, authority and legal
right to own its properties and conduct its consumer lending business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement.
(b) Due Qualification. The Servicer is duly qualified to do business
-----------------
and is in good standing as a foreign corporation (or is exempt from such
requirements) and has obtained all necessary licenses and approvals in order to
service the Receivables under federal and state law in each jurisdiction in
which failure to so qualify or to obtain such licenses and approvals would have
a material adverse effect on the interests of the Certificateholders hereunder;
provided, however, that no representation or warranty is made with respect to
- -------- -------
any qualifications, licenses or approvals which the Trustee has or may be
required at any time to obtain, if any, in connection with the transactions
contemplated hereby.
(c) Due Authorization. The execution, delivery, and performance of
-----------------
this Agreement have been duly authorized by the Servicer by all necessary
corporate action on the part of the Servicer and this Agreement will remain,
from the time of its execution, an official record of the Servicer.
(d) Binding Obligation. This Agreement constitutes a legal, valid
------------------
and binding obligation of the Servicer, enforceable against the Servicer in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereinafter in effect, affecting the enforcement of creditors'
rights in general and the rights of creditors of Delaware or other state
chartered banking corporations, national banking associations or federal savings
banks, as applicable, in each case which are insured by the FDIC, and except as
such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this Agreement by
------------
the Servicer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Servicer,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a default under, any Requirement of Law applicable to the Servicer or
any indenture, contract, agreement,
30
<PAGE>
mortgage, deed of trust or other instrument to which the Servicer is a party or
by which it is bound.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by this
Agreement, seeking any determination or ruling that, in the reasonable judgment
of the Servicer, would materially and adversely affect the performance by the
Servicer of its obligations under this Agreement, or seeking any determination
or ruling that would materially and adversely affect the validity or
enforceability of this Agreement.
(g) Compliance with Requirements of Law. The Servicer shall duly
-----------------------------------
satisfy all obligations on its part to be fulfilled under or in connection with
each Receivable, will maintain in effect all qualifications required under
Requirements of Law in order to service properly each Receivable and will comply
in all material respects with all other Requirements of Law in connection with
servicing each Receivable the failure to comply with which would have a material
adverse effect on the Certificateholders.
(h) Protection of Certificateholders' Rights. The Servicer shall
----------------------------------------
take no action which, nor omit to take any action the omission of which, would
substantially impair the rights of Certificateholders in any Receivable, nor
shall it reschedule, revise or defer payments due on any Receivable except as
provided herein.
(i) All Consents. All authorizations, consents, orders or approvals
------------
of or registrations or declarations with any Governmental Authority required to
be obtained, effected or given by the Servicer in connection with the execution
and delivery of this Agreement by the Servicer and the performance of the
transactions contemplated by this Agreement by the Servicer, have been duly
obtained, effected or given and are in full force and effect; provided, however,
-------- -------
that the Servicer makes no representation or warranty regarding state securities
or "blue sky" laws in connection with the offer and sale of the Certificates.
(j) Rescission or Cancellation. The Servicer shall not permit any
--------------------------
rescission or cancellation of any Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority or in accordance with the
customary and usual procedures of the Servicer.
Section 3.4 Covenants of Servicer. The Servicer hereby makes the
---------------------
following covenants on which the Trustee will rely in accepting the Receivables
in trust and authenticating the Certificates:
31
<PAGE>
(a) No Impairment. The Servicer shall not impair the rights of the
-------------
Trust in the Receivables;
(b) Extensions, Defaulted Receivables. The Servicer shall not
---------------------------------
increase the number of payments under a Receivable, nor increase the loan amount
due under a Receivable, nor extend or forgive payments on a Receivable nor make
any other modification of a Receivable, except as provided in Section 3.2. In
the event that at the end of the scheduled term of any Receivable, the
outstanding principal amount thereof is such that the final payment to be made
by the related Obligor is larger than the regularly scheduled payment of
principal and interest made by such Obligor, the Servicer may permit such
Obligor to pay such remaining principal amount in more than one payment of
principal and interest; provided, however, that the last such payment shall be
-------- -------
due on or prior to the Monthly Period immediately preceding the Final Scheduled
Distribution Date;
(c) Delivery of Loan Agreements. On or before January 31, 1997, the
---------------------------
Servicer shall deliver to the Trustee a paper copy of the Loan Agreement,
properly and fully completed relating to each Receivable; and
(d) Electronic Access. On or prior to the Closing Date, the Servicer
-----------------
shall provide the Trustee with remote electronic access to the Servicer's
computer records containing the electronic image of each Loan Agreement.
Notwithstanding such access, the Trustee shall not have an affirmative duty to
review any Loan Agreement or the Servicer's computer records.
Section 3.5 Purchase of Receivables Upon Breach.
-----------------------------------
The Servicer or the Trustee, as the case may be, shall inform the
other party promptly, in writing, upon the discovery by the Servicer or the
Trustee, as the case may be, of any breach by the Servicer of its covenants
under Section 3.4 which materially and adversely affects the interest of the
Trust in any Receivable (for this purpose, any breach of the covenant set forth
in subsections 3.4(b), (c) or (d) shall be deemed to materially and adversely
affect the interest of the Trust in a Receivable). Except as otherwise specified
in Sections 3.2, unless the breach shall have been cured by the last day of the
Monthly Period following the Monthly Period in which such discovery occurred
(or, at the Servicer's election, the last day of the Monthly Period in which
such discovery occurred), the Servicer shall purchase any Receivable materially
and adversely affected by such breach, as of such last day. In consideration of
the purchase of such Receivable, the Servicer shall remit the Repurchase Amount
in the manner specified in Section 4.4. The sole remedy of the Trust, the
Trustee, or the Certificateholders against the Servicer with respect to a breach
pursuant to Section 3.4 shall be to require the Servicer to purchase Receivables
pursuant to this Section 3.5. The Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to
32
<PAGE>
this Section 3.5 or the eligibility of any Receivable for purposes of this
Agreement. The Trustee shall not be deemed to have discovered any breach as
described in this Section 3.5 and shall have no obligation to give any notice
pursuant to this Section 3.5 unless a Responsible Officer of the Trustee has
actual knowledge of such breach.
Section 3.6 Servicing Compensation. As compensation for its
----------------------
servicing activities hereunder and reimbursement for its expenses as set forth
in the immediately following paragraph, the Servicer shall be entitled to
receive a monthly servicing fee in respect of any Monthly Period prior to the
termination of the Trust pursuant to Section 11.1 (with respect to each Monthly
Period, the "Monthly Servicing Fee"). The Monthly Servicing Fee shall be equal
to the sum of (a) the product of one-twelfth of the product of the Servicing Fee
Rate and the Average Pool Balance (b) investment earnings on amounts on deposit
in the Collection Account or earned on collections pending deposit in the
Collection Account (the "Investment Earnings") and (c) any Collections of fees
and Late Fees processed with respect to such Monthly Period. The Monthly
Servicing Fee is payable in arrears on the Distribution Date immediately
following the related Monthly Period. The Monthly Servicing Fee shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 10.5 and the reasonable fees and disbursements of
independent public accountants and all other expenses incurred by the Servicer
in connection with its activities hereunder; provided, however, that the
-------- -------
Servicer shall not be liable for any liabilities, costs or expenses of the Trust
or the Certificateholders arising under any tax law, including without
limitation any federal, state or local income or franchise taxes or any other
tax imposed on or measured by income (or any interest or penalties with respect
thereto or arising from a failure to comply therewith). The Servicer shall be
required to pay such expenses for its own account and shall not be entitled to
any payment therefor other than the Monthly Servicing Fee.
Section 3.7 Monthly Servicer's Certificate.
------------------------------
On or prior to each Determination Date the Servicer shall forward, as
provided in Section 12.5, to the Trustee, the Collateral Agent, the Paying Agent
and each Rating Agency, a Servicer's Certificate. The Servicer shall also
specify each Receivable which the Transferor or the Servicer is required to
repurchase or purchase, as the case may be, as of the related Record Date, and
each Receivable which the Servicer shall have determined to be a Defaulted
Receivable during the preceding Monthly Period. Subsequent to the Closing Date,
the form of Servicer's Certificate may be revised or modified to cure any
ambiguities or inconsistencies with this Agreement in accordance with Section
1.2(e). In the event that the form of Servicer's Certificate is revised or
modified in accordance with the
33
<PAGE>
preceding sentence, a form thereof, as so revised or modified, shall be provided
to the Trustee and each Rating Agency. A copy of such certificate may be
obtained by any Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.
Section 3.8 Annual Servicer's Certificate. The Servicer will
-----------------------------
deliver, as provided in Section 12.5, to the Trustee and the Rating Agency on or
before September 30 of each calendar year beginning with September 30, 1997, an
Officer's Certificate substantially in the form of Exhibit C stating that (a) a
review of the activities of the Servicer during the period covered by such
Officer's Certificate (which shall be the period from July 1 of the preceding
calendar year to and including June 30 of such calendar year or for the initial
period, from the Closing Date until June 30, 1997) and of its performance under
this Agreement was made under the supervision of the officer signing such
certificate and (b) to the best of such officer's knowledge, based on such
review, the Servicer has fully performed all its obligations under this
Agreement throughout such period, or, if there has been a default in the
performance of any such obligation, specifying each such default known to such
officer and the nature and status thereof. A copy of such certificate may be
obtained by any Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.
Section 3.9 Annual Independent Accountants' Servicing Report.
------------------------------------------------
(a) On or before September 30 of each calendar year, beginning with
September 30, 1997, the Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer or the Transferor) to furnish a report to the Trustee and the Rating
Agency to the effect that such firm has made a study and evaluation in
accordance with generally accepted auditing standards of the Servicer's internal
accounting controls relative to the servicing of Receivables under this
Agreement, and that, on the basis of such examination, such firm is of the
opinion (assuming the accuracy of any reports generated by the Servicer's third
party agents) that the system of internal accounting controls in effect for the
fiscal year ending on June 30 of such year relating to servicing procedures
performed by the Servicer under this Agreement, taken as a whole, provided
reasonable assurance that the internal control system was sufficient for the
prevention and detection of errors and irregularities and that such servicing
was conducted in compliance with such provisions of this Agreement of which such
accountants can reasonably be expected to possess adequate knowledge of the
subject matter, which are susceptible of positive assurance by such accountants
and for which their professional competence is relevant, except for such
exceptions as they believe to be immaterial and such other exceptions as shall
be set forth in such statement. The Trustee shall forward a copy of such
Certificate to each Certificateholder.
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<PAGE>
(b) On or before September 30 of each calendar year, beginning with
September 30, 1997, the Servicer shall cause a firm of nationally recognized
independent certified public accountants (who may also render other services to
the Servicer or the Transferor) to furnish a report to the Trustee and each
Rating Agency to the effect that they have compared the mathematical
calculations of each amount set forth in the monthly certificates forwarded by
the Servicer pursuant to Section 3.7 during the period covered by such report
(which shall be the period from July 1 of the preceding calendar year to and
including June 30 of such calendar year, or for the initial period, from the
Closing Date until June 30, 1997) with the Servicer's computer reports which
were the source of such amounts and that on the basis of such comparison, such
amounts are in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such report. A
copy of such report may be obtained by any Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office.
Section 3.10 Custody of Receivable Files. To assure uniform quality
---------------------------
in servicing the Receivables and to reduce administrative costs, the Trustee,
upon the execution and delivery of this Agreement, revocably appoints the
Servicer, as agent, and the Servicer accepts such appointment, to act as
custodian on behalf of the Trustee of the following documents or instruments,
which are hereby constructively delivered to the Trustee with respect to each
Receivable (collectively, a "Receivable File") until such time as such documents
---------------
or instruments are actually delivered to the Trustee:
(a) copies of each Loan Agreement;
(b) electronic entries and copies of all documents, instruments or
writings relating to extensions, amendments or waivers of the Receivable;
(c) any and all other documents or electronic records that the
Transferor or Servicer, as the case may be, shall keep on file, in accordance
with its customary procedures, relating to the Receivable or the Obligor.
Section 3.11 Duties of Servicer as Custodian. (a) Safekeeping. The
------------------------------- -----------
Servicer, in its capacities as custodian, shall hold, or cause an Affiliate to
hold, the Receivable Files on behalf of the Trustee for the benefit of all
present and future Certificateholders, and maintain such accurate and complete
accounts, records, and computer systems pertaining to each Receivable as shall
enable the Servicer and the Trustee to comply with the terms and provisions of
this Agreement applicable to it. In performing its duties as custodian
hereunder, the Servicer shall act with reasonable care, exercising the degree of
skill and care that the Servicer exercises with respect to similar receivables
owned and/or serviced by it and that is consistent with industry standards.
35
<PAGE>
(b) Maintenance of and Access to Records. The Servicer shall
------------------------------------
maintain each Receivable File at the address provided in Section 12.5 to this
Agreement, or at such other office of the Servicer or an Affiliate (or, in the
case of any successor Servicer, within the State in which its principal place of
business is located) as shall be specified to the Trustee by thirty (30) days'
prior written notice. The Servicer shall make available to the Trustee or its
Responsible Officers (or, then requested in writing by the Trustee, to its
attorneys or auditors) and to Certificateholders (for legitimate business
purposes relating to the Trust) the Receivable Files and the related accounts,
records, and computer systems maintained by the Servicer at such times during
the normal business hours of the Servicer as the Trustee shall reasonably
instruct.
(c) Title to Receivables. The Servicer agrees that, in respect of
--------------------
any Receivable held by it as custodian hereunder, the Servicer will not at any
time have or in any way attempt to assert any interest in such Receivable or the
related Receivable File, other than solely for the purpose of collecting or
enforcing the Receivable for the benefit of the Trust and that the entire
equitable interest in such Receivable and the related Receivable File shall at
all times be vested in the Trust.
Section 3.12 Instructions; Authority to Act. The Servicer shall be
------------------------------
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Responsible Officer of the
Trustee.
Section 3.13 Custodians' Indemnification. The Servicer, in its
---------------------------
capacities as custodian, shall indemnify and hold harmless the Trustee, its
officers, directors, employees and agents and the Certificateholders from and
against any and all liabilities, obligations, losses, compensatory damages,
payments, costs or expenses (including legal fees if any) of any kind whatsoever
that may be imposed on, incurred, or asserted against the Trustee or the
Certificateholders as the result of any act or omission relating to the
maintenance and custody of the Receivable Files; provided, however, that the
-------- -------
Servicer shall not be liable hereunder to the extent, but only to the extent,
that such liabilities, obligations, losses, compensatory damages, payments,
costs or expenses result from the willful misconduct, bad faith, or negligence
of the Trustee.
Section 3.14 Effective Period and Termination. The Servicer's
--------------------------------
appointment as custodian shall become effective as of the Cut-Off Date and shall
continue in full force and effect until terminated pursuant to this Section
3.14. If the Servicer resigns as a Servicer, or if all of the rights and
obligations of a Servicer shall have been terminated, the appointment of the
Servicer as custodian hereunder may be terminated by the Trustee or by the
Holders of Certificates evidencing not less than a majority of the aggregate
outstanding principal balance of the Class A Certificates, the Class B
Certificates and the Class C
36
<PAGE>
Certificates taken together as a single class, in the same manner as the Trustee
or such Holders may terminate the rights and obligations of the Servicer under
this Agreement.
[End of Article III]
37
<PAGE>
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS
AND APPLICATION OF COLLECTIONS
Section 4.1 Establishment of Accounts.
-------------------------
(a) The Collection Account. The Servicer, for the benefit of the
----------------------
Certificateholders, shall establish in the name of the Trustee, on behalf of the
Trust, a segregated account (the "Collection Account") bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Certificateholders, and shall cause such Collection Account to be
established and maintained (i) in a segregated trust account with the corporate
trust department of a depository institution or trust company (which may include
the Trustee) organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia and with deposit insurance
provided by the FDIC which at all times maintains a long-term deposit rating of
at least Baa3 by Moody's and having corporate trust powers and acting as trustee
for funds deposited therein; provided, however, that such account need not be
-------- -------
maintained as a segregated trust account with the corporate trust department of
such institution if at all times the certificates of deposit, short-term
deposits or commercial paper or the long-term unsecured debt obligations (other
than such obligation whose rating is based on collateral or on the credit of a
Person other than such institution or trust company) of such depository
institution or trust company shall have a credit rating from Moody's, Standard &
Poor's and Fitch (if then rated by Fitch) of P-1, A-1+ and F-1+, respectively,
in the case of the certificates of deposit, short-term deposits or commercial
paper, or a rating from Moody's of at least Aa2 and from Standard & Poor's and
Fitch (if then rated by Fitch) of AAA in the case of the long-term unsecured
debt obligations, or (ii) with a depository institution, which may include the
Trustee, which is acceptable to the Rating Agency (a "Qualified Institution");
provided, however, that the Collection Account shall not be maintained with the
- -------- -------
Servicer or any affiliate thereof. Pursuant to authority granted to it pursuant
to subsection 3.1(b), the Servicer shall have the revocable power to withdraw
funds from the Collection Account for the purposes of carrying out its duties
hereunder.
(b) The Class A Distribution Account. The Trustee, for the benefit
--------------------------------
of the Class A Certificateholders, shall cause to be established and maintained
in the name of the Trustee, with an office or branch of a Qualified Institution,
a non-interest bearing segregated account (the "Class A Distribution Account").
(c) The Class B Distribution Account. The Trustee, for the benefit
--------------------------------
of the Class B Certificateholders, shall cause to be established and maintained
in the name of the Trustee, with an office or branch of a Qualified Institution,
a non-interest bearing segregated account (the "Class B Distribution Account").
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<PAGE>
(d) The Class C Distribution Account. The Trustee, for the benefit
--------------------------------
of the Class C Certificateholders, shall cause to be established and maintained
in the name of the Trustee, with an office or branch of a Qualified Institution,
a non-interest bearing segregated account (the "Class C Distribution Account").
(e) Administration of the Accounts. Funds on deposit in the
------------------------------
Collection Account shall at all times be invested in Permitted Investments. Any
such investment shall mature and such funds shall be available for withdrawal on
or prior to the Transfer Date following the Record Date occurring in the Monthly
Period in which such funds were processed for collection. The Trustee shall
maintain for the benefit of the Certificateholders possession of the negotiable
instruments or securities evidencing the Permitted Investments described in
clause (a) of the definition thereof from the time of purchase thereof until the
time of sale or maturity; provided, however, that no such investment shall be
-------- -------
disposed of prior to its maturity date. At the end of each month, all interest
and earnings (net of losses and investment expenses) on funds on deposit in the
Collection Account shall be applied in accordance with Section 4.5. Subject to
the restrictions set forth above, the Servicer, or a Person designated in
writing by the Servicer, of which the Trustee shall have received written
notification thereof, shall have the authority to instruct the Trustee with
respect to the investment of funds on deposit in the Collection Account. If at
any time the institution holding the Collection Account, the Class A
Distribution Account, the Class B Distribution Account or the Class C
Distribution Account ceases to be a Qualified Institution, the Transferor shall
notify the Trustee, and the Trustee upon being notified (or the Servicer on its
behalf) shall, within 10 Business Days, establish a new Collection Account, the
Class A Distribution Account, the Class B Distribution Account or the Class C
Distribution Account, as the case may be, meeting the conditions specified above
with a Qualified Institution, and shall transfer any cash or any investments to
such new Collection Account, the Class A Distribution Account, the Class B
Distribution Account or the Class C Distribution Account, as the case may be.
Section 4.2 Collections and Allocations.
---------------------------
(a) Collections. Except as provided below, the Servicer shall
-----------
deposit all Collections in the Collection Account as promptly as possible after
the Date of Processing of such Collections, but in no event later than the
second Business Day following such Date of Processing. In the event of the
insolvency of the Servicer, then, immediately upon the occurrence of such event
and thereafter, the Servicer shall deposit all Collections into the Collection
Account which shall be established and maintained with a Qualified Institution
other than the Servicer or an Affiliate thereof in accordance with subsection
4.1(a), and in no such event shall the Servicer deposit any Collections
thereafter into any account established, held or maintained with the Servicer.
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<PAGE>
The Servicer shall withdraw the required amounts from the Collection
Account in accordance with this Article IV. The Servicer shall make such
deposits or payments on the date indicated herein by wire transfer.
Notwithstanding anything in this Agreement to the contrary, for so
long as, and only so long as, the First USA Federal Savings Bank shall remain
the Servicer hereunder, and (a)(i) the Servicer provides to the Trustee a letter
of credit or other form of enhancement covering the risk of collection of the
Servicer, and (ii) the Transferor shall have received a notice from each Rating
Agency that such letter of credit or other form of enhancement will not result
in the lowering of such Rating Agency's then-existing rating of the
Certificates, or (b) the Servicer shall have and maintain a certificate of
deposit or short-term deposit rating of F-1 by Fitch and deposit insurance
provided by the FDIC, the Servicer need not deposit Collections into the
Collection Account prior to the close of business on the second Business Day
following such Date of Processing as provided in Article IV, but may make such
deposits on each Transfer Date in an amount equal to the net amount of such
deposits, payments and withdrawals which would have been made but for the
provisions of this paragraph.
Section 4.3 Advances. (a) As of the Transfer Date preceding the
--------
related Distribution Date, the Servicer may, in its sole discretion, make a
payment (each such payment, an "Advance") with respect to each Receivable (other
than a Defaulted Receivable) equal to the excess, if any, of (x) the product of
the Principal Balance of such Receivable as of the related Record Date and one-
twelfth of the Contract Rate for such Receivable, over (y) the interest actually
received by the Servicer with respect to such Receivable from the Obligor or
from payments of the Repurchase Amount during or with respect to such Monthly
Period. The Servicer shall deposit all such Advances into the Collection Account
in immediately available funds no later than 11 a.m., New York City time, on the
related Transfer Date. The Servicer may elect not to make any Advance with
respect to a Receivable to the extent that the Servicer, in its sole discretion,
shall determine that such Advance is not recoverable from subsequent payments on
such Receivable or from funds in the Spread Account. Until a Receivable becomes
a Defaulted Receivable, the Servicer shall be reimbursed for any Advance made
with respect to such Receivable only from accrued interest paid by or on behalf
of the Obligor under such Receivable.
(b) On each Transfer Date, the Trustee shall (in accordance with the
Servicer's Certificate) demand a withdrawal from the Spread Account in an
amount, not to exceed the Available Spread Account Amount for such Distribution
Date, equal to the amount of all outstanding Advances with respect to all
Receivables that become Defaulted Receivables during the immediately preceding
Monthly Period and shall deposit such amount into the Collection Account in
immediately available funds no later than 11 a.m., New York City time, on such
Transfer Date
40
<PAGE>
or, pursuant to Section 4.6(c) in immediately available funds no later than 11
a.m., New York City time on such Distribution Date. Such amounts shall be
distributed to the Servicer on the related Distribution Date pursuant to Section
4.5(a).
(c) On each Transfer Date, the Paying Agent shall (in accordance with
the Servicer's Certificate) provide written notice to the Trustee setting forth
the amount, if any, of Advances deposited by the Servicer in the Collection
Account no later than 11 a.m., New York City time, on such Transfer Date and, if
the Paying Agent fails to provide the Trustee with such written notice by 12
noon, New York City time, on such Transfer Date, then the Trustee shall assume
that no Advances were deposited to the Collection Account pursuant to this
Section 4.3.
Section 4.4 Additional Deposits. The Servicer, or the Transferor, as
-------------------
the case may be, shall deposit into the Collection Account the aggregate
Repurchase Amount pursuant to Sections 2.6, 11.2 and 3.5, as applicable. All
deposits shall be made to the Collection Account, in immediately available
funds, no later than 11 a.m., New York City time, on the applicable Transfer
Date.
Section 4.5 Distributions. Not later than 12 noon, New York City
-------------
time, on each Distribution Date, the Trustee, or the Paying Agent on behalf of
the Trustee, shall cause to be made the following distributions, to the extent
funds are available in the Collection Account (including amounts demanded and
withdrawn from the Spread Account and deposited therein), in the following order
of priority and in the amounts set forth in the Servicer's Certificate for such
Distribution Date:
(a) to the Servicer, by wire transfer of immediately available funds,
in reimbursement of Advances, from amounts on deposit in the Collection Account
allocable to interest under the Receivables or from withdrawals from the Spread
Account (including an amount equal to the accrued interest on Defaulted
Receivables and Repurchased Receivables to the extent available in the
Collection Account), the amount payable to the Servicer in respect of past
Advances made pursuant to Section 4.3;
(b) to the extent of Servicing Fee Available Funds with respect to
such Distribution Date, an amount equal to the Monthly Servicing Fee for the
related Monthly Period and all unpaid Monthly Servicing Fees from prior Monthly
Periods shall be paid to the Servicer;
(c) to the extent of Class A Interest Available Funds with respect to
such Distribution Date, an amount equal to the Class A Interest Distributable
Amount for such Distribution Date shall be deposited into the Class A
Distribution Account;
(d) to the extent of Class B Interest Available Funds with respect to
such Distribution Date, an amount equal to the Class B Interest Distributable
Amount for such Distribution Date shall be deposited into the Class B
Distribution Account;
41
<PAGE>
(e) to the extent of Class C Interest Available Funds with respect to
such Distribution Date, an amount equal to the Class C Interest Distributable
Amount for such Distribution Date shall be deposited into the Class C
Distribution Account;
(f) to the extent of Class A Principal Available Funds with respect
to such Distribution Date, an amount equal to the Class A Principal
Distributable Amount for such Distribution Date shall be deposited in the Class
A Distribution Account; and
(g) to the extent of Available Funds Remaining, the following amounts
shall be applied in the following order of priority:
(i) an amount equal to the Class B Principal Distributable Amount for
such Distribution Date shall be deposited in the Class B Distribution
Account;
(ii) an amount equal to the Class C Principal Distributable Amount
for such Distribution Date shall be deposited in the Class C Distribution
Account; and
(iii) an amount equal to any remaining amounts (the "Monthly Excess
Interest") shall be paid to the Transferor subject to the provisions of
Section 4.6.
Section 4.6 Spread Account; Assignment of Monthly Excess Interest to
--------------------------------------------------------
Collateral Agent. (a) The Transferor shall establish an account (the "Spread
- ----------------
Account") with an office or branch of a Qualified Institution which may include
Bankers Trust (Delaware) or its agent, in the name of Bankers Trust (Delaware)
as Collateral Agent on behalf of the Certificateholders and the Transferor, such
as their interests shall appear herein. The Spread Account shall not be an
account of or property of the Trust and shall not be maintained by Bankers Trust
(Delaware) in its capacity as Trustee, but shall be maintained by Bankers Trust
(Delaware) in separate trust in its capacity as Collateral Agent. The Spread
Account and funds on deposit therein shall be beneficially owned by the
Transferor but shall be subject to the pledge described in subsection (b) and
shall be held by the Collateral Agent as security for the Transferor's limited
guarantee with respect to amounts distributable to the Certificateholders as set
forth herein, and the Transferor agrees to report the Spread Account and such
funds accordingly for federal income tax purposes.
(b) On the Closing Date, the Transferor shall deposit the Spread
Account Initial Deposit into the Spread Account. The Transferor hereby pledges
to the Collateral Agent for the benefit of the Certificateholders all of its
right, title and interest in and to the Monthly Excess Interest and the Spread
Account and any and all property credited thereto from time to time, including,
but not limited to, Permitted Investments, to secure the payment of all amounts
due and owing to the Certificateholders to the extent provided herein; provided,
--------
however, that the Transferor
- -------
42
<PAGE>
shall be completely released from such pledge and its obligations pursuant to
this section 4.6 (and may thereupon freely transfer its rights with respect to
either or both of the Monthly Excess Interest and the Spread Account) upon the
establishment of alternative credit enhancement arrangements, with respect to
the Certificates, which satisfy the Rating Agency Condition. To the extent that
the Available Spread Account Amount with respect to any Distribution Date (after
giving effect to all withdrawals on such Distribution Date) is less than the
Required Spread Account Amount with respect to such Distribution Date, in
keeping with the aforementioned pledge, the Collateral Agent shall deposit the
Monthly Excess Interest with respect to such Distribution Date (or such portion
thereof) in an amount equal to the excess, if any, of the Required Spread
Account Amount with respect to such Distribution Date over the Available Spread
Account Amount with respect to such Distribution Date. By acceptance of their
Certificates, Certificateholders shall be deemed to have accepted the
appointment of Bankers Trust (Delaware) as Collateral Agent with respect to the
Spread Account and the Monthly Excess Interest. Bankers Trust (Delaware) hereby
accepts such appointment as Collateral Agent with respect to the Spread Account
and the Monthly Excess Interest. The Transferor's interest in the Monthly Excess
Interest is transferable only in whole and only pursuant to the terms of Section
6.3 as though it were a Certificate and the Monthly Excess Interest shall be
subject to Section 6.6 as though it were a Certificate.
(c) The Spread Account shall be under the sole dominion and control
of the Collateral Agent, and the Collateral Agent shall have signature authority
with respect thereto. Should any depositary at which the Spread Account is held
cease to be a Qualified Institution, the Transferor shall notify the Collateral
Agent, and the Collateral Agent upon being notified shall, within 10 Business
Days, cause the Spread Account to be moved to a Qualified Institution unless the
Rating Agency Condition is satisfied in connection with such depositary's
ceasing to be a Qualified Institution.
All amounts held in the Spread Account shall be invested by the
institution then maintaining the account, at the written direction of the
Transferor in Permitted Investments that mature not later than the Transfer Date
next succeeding the date of investment except, if the Spread Account is
maintained with the Trustee or such institution which is maintaining the
Collection Account, if not the Trustee, for investments on which the Trustee or
such institution is the obligor (including repurchase agreements on which the
Trustee or such institution in its commercial capacity is liable as principal),
which investments may mature on such Distribution Date.
(d) The Collateral Agent shall, at the expense of the Servicer, take
such action as is required in writing by the Servicer to maintain the security
interest of the Collateral Agent in any Account Property as a perfected security
interest under the Relevant UCC; provided, however, that the Collateral
-------- -------
43
<PAGE>
Agent shall not be required to prepare or file any financing statements or
continuation statements and that the Collateral Agent and Trustee may rely upon
the written instructions of the Servicer as to the method by which the security
interest of the Collateral Agent may be perfected.
(e) On each Distribution Date, the Collateral Agent shall (in
accordance with the Servicer's Certificate) withdraw from the Spread Account and
pay to the Transferor any investment income with respect to amounts on deposit
in the Spread Account and an amount equal to the excess, if any, of the amount
on deposit in the Spread Account (after giving effect to all deposits therein or
withdrawals therefrom on such Distribution Date) over the Required Spread
Account Amount with respect to such Distribution Date. Upon any distribution to
the Transferor of amounts from the Spread Account, neither the
Certificateholders nor the Collateral Agent will have any rights in, or claims,
to, such amounts. Amounts properly distributed to the Transferor from the
Spread Account shall not be available under any circumstances to the Trustee or
the Collateral Agent, and in no event shall the Transferor thereafter be
required to refund any such distributed amounts.
(f) On each Transfer Date, the Trustee shall (in accordance with the
Servicer's Certificate) demand a withdrawal from the Spread Account, in an
amount not to exceed the Available Spread Account Amount (after withdrawals from
the Spread Account on such Transfer Date pursuant to subsection 4.3(b)), equal
to the amount required to fund the amounts required pursuant to the definitions
of Servicing Fee Available Funds, Class A Interest Available Funds and Class A
Principal Available Funds, each with respect to such Distribution Date and
deposit such amount in the Collection Account to be applied pursuant to Section
4.5.
(g) On the Transfer Date immediately preceding the Distribution Date
on which the Class A Certificates are paid in full, the Trustee shall (in
accordance with the Servicer's Certificate) demand a withdrawal from the Spread
Account, the amount remaining on deposit in the Spread Account of (after
withdrawals from the Spread Account on such Transfer Date to fund amounts
required pursuant to the application of subsection 4.3(a) and the definitions of
Servicing Fee Available Funds, Class A Interest Available Funds and Class A
Principal Available Funds) and shall deposit the amount of such withdrawal into
the Collection Account. On the following Distribution Date, after the
application of Funds pursuant to Section 4.5, the Trustee shall apply the amount
of the withdrawal made from the Spread Account pursuant to this subsection
4.6(g) in the following order of priority:
(i) any remaining unpaid Class B Interest Distributable Amount shall
be deposited into the Class B Distribution Account;
44
<PAGE>
(ii) any remaining unpaid Class B Principal Distributable Amount
shall be deposited into the Class B Distribution Account;
(iii) any remaining unpaid Class C Interest Distributable Amount
shall be deposited into the Class C Distribution Account;
(iv) any remaining unpaid Class C Principal Distributable Amount
shall be deposited into the Class C Distribution Account; and
(v) any amounts remaining shall be paid to the Transferor.
[End of Article IV]
45
<PAGE>
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
Section 5.1 Distributions.
-------------
(a) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the Servicer's Certificate) to the Class A Certificateholders of
record on the preceding Record Date (other than as provided in Section 11.3 of
this Agreement respecting a final distribution) such Class A Certificateholder's
share of amounts on deposit in the Class A Distribution Account as are payable
to the Class A Certificateholders pursuant to Sections 4.5 hereof by wire
transfer to an account or accounts designated by such Certificateholder by
written notice given to the Trustee not less than five Business Days prior to
the related Distribution Date; provided, however, that the final payment in
-------- -------
retirement of the Class A Certificates will be made only upon presentation and
surrender to the Class A Certificates at the office or offices specified in the
notice of such final distribution delivered by the Trustee pursuant to Section
11.3 of the Agreement.
(b) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the Servicer's Certificate) to the Class B Certificateholders of
record on the preceding Record Date (other than as provided in Section 11.3 of
this Agreement respecting a final distribution) such Class B Certificateholder's
share of amounts on deposit in the Class B Distribution Account as are payable
to the Class B Certificateholders pursuant to Sections 4.5 hereof by wire
transfer to an account or accounts designated by such Certificateholder by
written notice given to the Trustee not less than five Business Days prior to
the related Distribution Date; provided, however, that the final payment in
-------- -------
retirement of the Class B Certificates will be made only upon presentation and
surrender to the Class B Certificates at the office or offices specified in the
notice of such final distribution delivered by the Trustee pursuant to Section
11.3 of the Agreement.
(c) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the Servicer's Certificate) to the Class C Certificateholders of
record on the preceding Record Date (other than as provided in Section 11.3 of
this Agreement respecting a final distribution) such Class C Certificateholder's
share of amounts on deposit in the Class C Distribution Account as are payable
to the Class C Certificateholders pursuant to Sections 4.5 hereof by wire
transfer to an account or accounts designated by such Certificateholder by
written notice given to the Trustee not less than five Business Days prior to
the related Distribution Date; provided, however, that the final payment in
-------- -------
retirement of the Class C Certificates will be made only upon presentation and
surrender to the Class C Certificates at the office or offices specified in the
notice of such final
46
<PAGE>
distribution delivered by the Trustee pursuant to Section 11.3 of the Agreement.
Section 5.2 Statements to Certificateholders. (a) On each
--------------------------------
Distribution Date, the Servicer shall prepare and furnish to the Trustee and the
Paying Agent, and the Paying Agent shall forward to each Certificateholder, and
to each Rating Agency, a statement substantially in the form of Exhibit B, based
on information in the certificate furnished pursuant to Section 3.7, setting
forth for the Monthly Period the following information (which in the case of
items (i) and (ii) shall be expressed in the aggregate and as a dollar amount
per $1,000 of the original principal balance of a Certificate):
(i) the amount of the distribution allocable to principal on the
Class A Certificates, the Class B Certificates and the Class C
Certificates;
(ii) the amount of the distribution allocable to interest on the
Class A Certificates, the Class B Certificates and Class C Certificates;
(iii) the amount of the Monthly Servicing Fee to be paid to the
Servicer pursuant to subsection 4.5(b);
(iv) the Class A Certificate Principal Balance, the Class A Pool
Factor, the Class B Certificate Principal Balance, the Class B Pool Factor,
the Class C Certificate Principal Balance and the Class C Pool Factor as of
such Distribution Date, in each case after giving effect to payments
allocated to principal reported pursuant to clause (i);
(v) the Pool Balance as of each of the first and the last day of the
related Monthly Period and the Average Pool Balance for the related Monthly
Period;
(vi) the amount of the Aggregate Loss, if any, for such Monthly
Period.
(vii) the Class A Interest Carryover Shortfall, the Class B Interest
Carryover Shortfall, the Class C Interest Carryover Shortfall, the Class A
Principal Carryover Shortfall and the Class B Principal Carryover
Shortfall, if any, for such Distribution Date;
(viii) the balance of the Spread Account on such Distribution Date,
after giving effect to changes therein on such Distribution Date and the
amounts deposited into and withdrawn from the Spread Account on such
Distribution Date;
(ix) the Required Spread Account Balance as of such Distribution
Date;
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(x) the aggregate Repurchase Amount of Receivables repurchased by the
Transferor or purchased by the Servicer during such Monthly Period;
(xi) the aggregate unreimbursed Advances as of such Distribution Date
and the change in such amount from the previous Distribution Date and the
amount of Advances reimbursed on such Distribution Date from collections
and from withdrawals from the Spread Account;
(xii) the aggregate amount of Collections from Obligors allocated to
interest and to principal, respectively;
(xiii) the aggregate Repurchase Amount allocated to interest and to
principal, respectively;
(xiv) the aggregate amount of Recoveries;
(xv) the Available Spread Account Amount for the next succeeding
Distribution Date;
(xvi) the Default Ratio with respect to such Distribution Date;
(xvii) the Delinquency Ratio with respect to such Distribution Date;
(xviii) the amount of Monthly Excess Interest with respect to such
Distribution Date;
(xix) the delinquency profile of the Receivables as of the
immediately preceding Record Date;
(xx) the weighted average yield and weighted average maturity of the
Receivables; and
(xxi) the amount of principal prepayments received with respect to
the related Monthly Period.
Section 5.3 Annual Certificateholders' Tax Statement. Within a
----------------------------------------
reasonable period of time after the end of each calendar year, but not later
than January 31 of each calendar year commencing with January 31, 1998, the
Servicer shall prepare and furnish to the Trustee and the Paying Agent, and the
Paying Agent shall furnish, to each Person who at any time during such calendar
year shall have been a Certificateholder for the purposes of such
Certificateholder's preparation of federal income tax returns, a statement
setting forth the information required by law.
[End of Article V]
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ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates. Unless otherwise specified in this
----------------
Agreement, the Certificates of each class shall be issued in minimum
denominations of $250,000 and in integral multiples of $1,000 in excess thereof;
provided, however, that one Class C Certificate may be issued in a denomination
- -------- -------
that represents a residual portion of the Class C Initial Certificate Principal
Balance. Upon initial issuance in fully registered form (the "Registered
Certificates") on the Closing Date, the Class A Certificates, the Class B
Certificates and the Class C Certificates shall be in the form of Exhibit A-1,
Exhibit A-2 and Exhibit A-3, respectively, which are incorporated by reference,
and shall be issued as provided in Section 6.2 in an aggregate amount equal to
the Class A Initial Certificate Principal Balance, the Class B Initial
Certificate Principal Balance and the Class C Initial Certificate Principal
Balance, respectively. The Certificates shall be executed on behalf of the Trust
by manual or facsimile signature of a Responsible Officer or other authorized
signatory of the Trustee. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall be valid and
binding obligations of the Trust, notwithstanding that such individuals shall
have ceased to be so authorized prior to the execution, authentication and
delivery of such Certificates or did not hold such offices or positions at the
date of such Certificates. No Certificate shall entitle the Holder to any
benefit under this Agreement, or shall be valid for any purpose, unless there
shall appear on such Certificate an authentication substantially in the form set
forth in Exhibit A-1, A-2 and A-3 hereto, as applicable, executed by the Trustee
by manual or facsimile signature; such authentication shall constitute
conclusive evidence that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication. A transferee of a Certificate shall become a Certificateholder
and shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder, upon due presentment of such Certificate in such
transferee's name pursuant to Section 6.5.
Section 6.2 Execution, Authentication and Delivery of Certificates.
------------------------------------------------------
The Trustee shall deliver to, or upon the order of, the Transferor, in exchange
for the Receivables, the other assets of the Trust and the pledge of the Spread
Account and amounts on deposit therein and the Monthly Excess Interest,
simultaneously with the sale, assignment and transfer to the Trustee of the
Receivables and the delivery to the Trustee of the other components of the
Trust, Certificates duly executed by the Trustee, on behalf of the Trust, and
authenticated by the Trustee in authorized denominations equaling in the
aggregate the Initial Pool Balance, and evidencing the entire ownership of the
Trust.
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Section 6.3 Registration of Transfer and Exchange of Certificates;
------------------------------------------------------
Legends; Restrictions on Transfer of Certificates.
- -------------------------------------------------
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and registrar (the "Transfer Agent and
Registrar"), in accordance with the provisions of Section 10.16, a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Certificates and of transfers and exchanges of the
Certificates as herein provided. The Trustee is hereby initially appointed
Transfer Agent and Registrar for the purposes of registering the Certificates
and transfers and exchanges of the Certificates as herein provided. The Trustee
shall be permitted to resign as Transfer Agent and Registrar upon 30 days'
written notice to the Servicer and the Transferor. In the event that the
Trustee shall no longer be the Transfer Agent and Registrar, the Transferor
shall appoint a successor Transfer Agent and Registrar reasonably acceptable to
the Trustee and meeting the requirements of Section 10.6.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates in authorized denominations of like initial aggregate
principal amount, upon surrender of the Certificates to be exchanged at any
office or agency of the Transfer Agent and Registrar maintained for such
purpose. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute, authenticate and (unless the Transfer Agent and Registrar is
different than the Trustee, in which case the Transfer Agent and Registrar
shall) deliver, the Certificates which the Certificateholder making the exchange
is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Trustee and the Transfer
Agent and Registrar duly executed by the Certificateholder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3 notwithstanding, the
Trustee or the Transfer Agent and Registrar, as the case may be, shall not be
required to register the transfer of or exchange any Certificate for a period of
15 days preceding the due date for any payment with respect to the Certificates.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Transfer Agent and Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer and exchange
shall be canceled by the Transfer Agent and Registrar and disposed of in a
manner satisfactory to the Trustee.
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(b) No Certificate or any interest therein may be sold (including in
the initial offering), conveyed, assigned, hypothecated, pledged, participated,
or otherwise transferred (each, a "Transfer") except in accordance with this
--------
Section 6.3. No Certificate or any interest therein may be Transferred to any
Person, unless the Assignee shall have executed and delivered the certification
referred to in subsection 6.3(c) below.
(c) Each Certificate will bear a legend substantially in the
following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF FIRST USA
SECURITIZATION CORPORATION (THE "CORPORATION") THE TRUST AND THE TRUSTEE THAT,
WITH RESPECT TO THE SOURCE OF FUNDS TO BE USED BY YOU TO PURCHASE THIS
CERTIFICATE (THE "SOURCE") EITHER: (i) THE SOURCE IS NOT ASSETS OF AN "EMPLOYEE
BENEFIT PLAN" (WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO TITLE I OF
ERISA OR AN INDIVIDUAL RETIREMENT ARRANGEMENT OR PLAN THAT IS SUBJECT TO SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A
"PLAN"); OR (ii) YOU ARE AN INSURANCE COMPANY AND EITHER (A) YOU ARE AUTHORIZED
TO DO BUSINESS UNDER THE LAWS OF MORE THAN ONE STATE AND THE SOURCE IS YOUR
"INSURANCE COMPANY GENERAL ACCOUNT" AS DESCRIBED IN PROHIBITED TRANSACTION
EXEMPTION 95-60, AND THE AMOUNT OF THE RESERVES FOR THE CONTRACT(S) HELD BY OR
ON BEHALF OF ANY PLAN (DETERMINED UNDER SECTION 807(d) OF THE CODE), TOGETHER
WITH THE AMOUNT OF THE RESERVES FOR THE CONTRACTS HELD BY OR ON BEHALF OF OTHER
PLANS (DETERMINED UNDER SECTION 807(d) OF THE CODE) MAINTAINED BY THE SAME
EMPLOYER OR AFFILIATE THEREOF OR BY THE SAME EMPLOYEE ORGANIZATION, IN THE
GENERAL ACCOUNT DO NOT EXCEED 10% OF THE TOTAL OF ALL LIABILITIES OF THE GENERAL
ACCOUNT; (B) THE SOURCE IS A "GOVERNMENTAL PLAN" (WITHIN THE MEANING OF SECTION
3(32) OF ERISA); (C) THE SOURCE IS AN "INSURANCE COMPANY POOLED SEPARATE
ACCOUNT" (WITHIN THE MEANING OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 90-1) AND THERE IS NO PLAN (TREATING AS A SINGLE PLAN ALL
PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE ORGANIZATION) WHOSE ASSETS IN
SUCH POOLED SEPARATE ACCOUNT EXCEED TEN PERCENT (10%) OF THE TOTAL ASSETS IN
THAT ACCOUNT; (D) THE SOURCE IS AN "INVESTMENT FUND" (WITHIN THE MEANING OF PART
V(b) OF PTCE 84-14); MANAGED BY A "QUALIFIED PROFESSIONAL ASSET MANAGER" (WITHIN
THE MEANING OF PART V(a) OF PTCE 84-14) AND THE PURCHASE IS EXEMPT UNDER PTCE
84-14; OR (E) THE SOURCE IS A SPECIFIC PLAN, YOU HAVE PROVIDED IN WRITING TO THE
TRUSTEE COMPLETE AND ACCURATE INFORMATION AS TO THE IDENTITY OF THAT PLAN AND
THE PURCHASE IS EXEMPT UNDER ANOTHER APPLICABLE EXEMPTION; OR (iii) YOU ARE AN
ENTITY OTHER THAN AN INSURANCE COMPANY AND EITHER (A) THE SOURCE IS A
"GOVERNMENTAL PLAN" (WITHIN THE MEANING OF SECTION 3(32) OF ERISA); (B) THE
SOURCE IS A "COLLECTIVE INVESTMENT FUND MAINTAINED BY A BANK" (WITHIN THE
MEANING OF PTCE 91-38) AND THERE IS NO PLAN (TREATING AS A SINGLE PLAN ALL
EMPLOYEE BENEFIT PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE ORGANIZATION)
WHOSE ASSETS IN SUCH BANK COLLECTIVE INVESTMENT FUND EXCEED TEN PERCENT (10%) OF
THE TOTAL ASSETS IN
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THAT FUND; (C) THE SOURCE IS AN "INVESTMENT FUND" (WITHIN THE MEANING OF PART
V(b) OF PTCE 84-14) MANAGED BY A "QUALIFIED PROFESSIONAL ASSET MANAGER" (WITHIN
THE MEANING OF PART V(a) OF PTCE 84-14) AND THE PURCHASE IS EXEMPT UNDER PTCE
84-14; (D) YOU ARE AN "IN-HOUSE ASSET MANAGER" OR "INHAM" (AS DEFINED IN SECTION
IV(a) of PTCE 96-23); AND THE PURCHASE IS EXEMPT UNDER PTCE 96-23; OR (E) THE
SOURCE IS A SPECIFIC PLAN, YOU HAVE PROVIDED IN WRITING TO THE TRUSTEE COMPLETE
AND ACCURATE INFORMATION AS TO THE IDENTITY OF THAT PLAN AND THE PURCHASE IS
EXEMPT UNDER ANOTHER APPLICABLE EXEMPTION.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) TO
THE CORPORATION, OR (2) TO A LIMITED NUMBER OF INSTITUTIONAL "ACCREDITED
INVESTORS" (AS DEFINED IN RULE 501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) AND IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (UPON DELIVERY OF THE DOCUMENTATION REQUIRED BY THE POOLING AND
SERVICING AGREEMENT AND, IF THE TRUSTEE SO REQUIRES, AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE). EACH CERTIFICATE OWNER BY ACCEPTING A BENEFICIAL
INTEREST IN THIS CERTIFICATE IS DEEMED TO REPRESENT THAT IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a) (1), (2), (3) OR (7) UNDER THE
SECURITIES ACT). THIS CERTIFICATE WILL NOT BE ACCEPTED FOR REGISTRATION OF
TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE TRANSFER AGENT
AND REGISTRAR THAT THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AND
SERVICING AGREEMENT AND THE CERTIFICATE PURCHASE AGREEMENT HAVE BEEN COMPLIED
WITH.
Upon surrender for registration of transfer of a Certificate at the
office of the Transfer Agent and Registrar, accompanied by a certification by
the Certificateholder substantially in the form attached as Exhibit E, executed
by the registered owner, in person or by such Certificateholder's attorney
thereunto duly authorized in writing (and, if the Trustee so requires, an
Opinion of Counsel satisfactory to the Trustee), such Certificate shall be
transferred upon the Certificate Register, and the Trustee shall execute,
authenticate and (unless the Transfer Agent and Registrar is different than the
Trustee, in which case the Transfer Agent and Registrar shall) deliver, in the
name of the designated transferee or transferees one or more new appropriate
registered Certificates of any authorized denominations and of a like aggregate
principal amount and tenor. Transfers and exchanges of Certificates shall be
subject to the restrictions set forth in this Section 6.3 and as shall be set
forth in the text of the Certificates and such reasonable regulations as may be
prescribed by the Transferor. Successive registrations and registrations of
transfers as aforesaid may be made from time to time as desired, and each
registration shall be noted on the Certificate Register.
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(d) The Transfer Agent and Registrar will maintain an office or
offices or an agency or agencies where Certificates may be surrendered for
registration of transfer or exchange.
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated Certificate is surrendered to the Transfer Agent and
Registrar, or the Transfer Agent and Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (b) there
is delivered to the Transfer Agent and Registrar and the Trustee such security
or indemnity as may be required by them to save each of them harmless (an
unsecured indemnity agreement of an institutional investor having an investment
grade rating shall be deemed sufficient to satisfy such security or indemnity
requirement), then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and (unless the Transfer Agent and Registrar is different
from the Trustee, in which case the Transfer Agent and Registrar shall) deliver
(in compliance with applicable law), in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination, but bearing a number not contemporaneously outstanding.
In connection with the issuance of any new Certificate under this Section 6.4,
the Trustee or the Transfer Agent and Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Transfer Agent and Registrar) connected therewith. Any
duplicate Certificate issued pursuant to this Section 6.4 shall constitute
complete and indefeasible evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
Section 6.5 Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat the Person
in whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Article V and for all other
purposes whatsoever, and neither the Trustee, the Paying Agent, the Transfer
Agent and Registrar nor any agent of any of them shall be affected by any notice
to the contrary; provided, however, that in determining whether the holders of
-------- -------
Certificates evidencing the requisite portion of the Certificate Principal
Balance have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Certificates owned by the Transferor, the Servicer
or any Affiliate thereof shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Certificates which a Responsible Officer in the Corporate Trust
Office of the Trustee knows to be so owned shall be so disregarded.
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Section 6.6 Appointment of Paying Agent.
---------------------------
(a) The Paying Agent shall make distributions to Certificateholders,
the Servicer and the Collateral Agent, as applicable; from the appropriate
account or accounts maintained for the benefit of Certificateholders as
specified in this Agreement pursuant to Articles IV and V hereof. Any Paying
Agent shall have the revocable power to withdraw funds from such appropriate
account or accounts for the purpose of making distributions referred to above.
The Trustee (or the Servicer if the Trustee is the Paying Agent) may revoke such
power and remove the Paying Agent, if the Trustee (or the Servicer if the
Trustee is the Paying Agent) determines in its sole discretion that the Paying
Agent shall have failed to perform its obligations under this Agreement in any
material respect or for other good cause. The Paying Agent shall initially be
the Trustee. The Trustee shall be permitted to resign as Paying Agent upon 30
days' written notice to the Servicer and the Transferor. In the event that the
Trustee shall no longer be the Paying Agent, the Transferor shall appoint a
successor, reasonably acceptable to the Trustee and meeting the requirements of
Section 10.6, to act as Paying Agent (which shall be a bank or trust company)
and the Servicer shall promptly give each Rating Agency notice of such
successor. The provisions of Sections 10.1, 10.2 and 10.3 shall apply to the
Trustee also in its role as Paying Agent, for so long as the Trustee shall act
as Paying Agent.
(b) The Trustee shall cause the Paying Agent (other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and shall agree, and if the Trustee is the Paying Agent it
hereby agrees, that it shall comply with all requirements of the Code regarding
the withholding by the Trustee of payments in respect of federal income taxes
due from Certificateholders. The Paying Agent shall return all unclaimed funds
to the Trustee and upon removal shall also return all funds in its possession to
the Trustee.
Section 6.7 Access to List of Certificateholders' Names and
-----------------------------------------------
Addresses. The Trustee will furnish or cause to be furnished by the Transfer
- ---------
Agent and Registrar to the Servicer or the Paying Agent, within five Business
Days after receipt by the Trustee of a request therefor from the Servicer or the
Paying Agent, respectively, in writing, a list of the names and addresses of the
Certificateholders as of the most recent Record Date for payment of
distributions to Certificateholders. Holders of Certificates evidencing not
less than 5% of the Certificate Principal Balance (the "Applicants") may apply
in writing to the Trustee, and if such application states that the Applicants
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and is accompanied by a copy of
the communication which such
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Applicants propose to transmit, then the Trustee, after having been adequately
indemnified by such Applicants for its costs and expenses, shall afford or shall
cause the Transfer Agent and Registrar to afford such Applicants access during
normal business hours to the most recent list of Certificateholders held by the
Trustee and shall give the Servicer notice that such request has been made,
within five Business Days after the receipt of such application. Such list shall
be as of a date no more than 45 days prior to the date of receipt of such
Applicants' request. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Trustee that neither the Trustee, the Transfer
Agent and Registrar, the Paying Agent nor any of their respective agents shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Certificateholders hereunder, regardless of the
source from which such information was obtained.
Section 6.8 Authenticating Agent.
--------------------
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Transferor. The Trustee may at
any time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Transferor. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
an authenticating agent shall cease to be acceptable to the Trustee or the
Transferor, the Trustee promptly may appoint a successor authenticating agent.
Any successor authenticating agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an authenticating agent.
No successor authenticating agent shall be appointed unless acceptable to the
Trustee and the Transferor.
(d) The Trustee agrees to pay, on behalf of the Trust, each
authenticating agent from time to time reasonable
55
<PAGE>
compensation for its services under this Section 6.8, and the Trustee shall be
entitled to be reimbursed and the Servicer shall reimburse the Trustee for such
reasonable payments actually made, subject to the provisions of Section 10.5.
(e) The provisions of Sections 10.1, 10.2 and 10.3 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the certificates described in the Pooling and Servicing
Agreement.
___________________________
as Authenticating Agent
for the Trustee,
By:________________________
Authorized Officer
[End of Article VI]
56
<PAGE>
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.1 Liability of the Transferor. The Transferor shall be
---------------------------
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Transferor.
Section 7.2 Merger or Consolidation of the Transferor.
-----------------------------------------
The Transferor shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which the
Transferor is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Transferor substantially as an entirety shall be,
if the Transferor is not the surviving entity, organized and existing under the
laws of the United States of America or any State or the District of Columbia
and shall expressly assume, by an agreement supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the performance
of every covenant and obligation of the Transferor, as applicable hereunder. To
the extent that any right, covenant or obligation of the Transferor, as
applicable hereunder, is inapplicable to the successor entity, such successor
entity shall be subject to such covenant or obligation, or benefit form such
right, as would apply, to the extent practicable, to such successor entity.
(b) the Transferor shall have delivered to the Trustee an Officer's
Certificate signed by a Vice President (or any more senior officer) of the
Transferor stating that such consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section 7.2 and that all conditions
precedent herein provided for relating to such transaction have been complied
with and an Opinion of Counsel that such supplemental agreement is a legal,
valid and binding obligation of such surviving entity, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, receivership, conservatorship, reorganization,
moratorium or similar laws affecting creditors' rights and the rights of
creditors of Delaware corporations, as applicable, and by general principles of
equity (whether considered in a suit at law or in equity); and
(c) the Servicer shall have delivered notice to the Rating Agency of
such consolidation, merger, conveyance or transfer, and the Rating Agency
Condition shall have been satisfied.
The obligations of the Transferor hereunder shall not be assignable
nor shall any Person succeed to the obligations of the Transferor hereunder
except for mergers, consolidations,
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assumptions or transfers in accordance with the provisions of the foregoing
paragraph.
Section 7.3 Limitation on Liability. The directors, officers,
-----------------------
employees or agents of the Transferor shall not be under any liability to the
Trust, the Trustee, the Certificateholders or any other Person hereunder or
pursuant to any document delivered hereunder, it being expressly understood that
all such liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and the issuance of the
Certificates; provided, however, that this provision shall not protect the
-------- -------
officers, directors, employees, or agents of the Transferor against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. Except as provided in Section
7.4, the Transferor shall not be under any liability to the Trust, the Trustee,
the Certificateholders or any other Person for any action taken or for
refraining from the taking of any action in its capacity as Transferor pursuant
to this Agreement whether arising from express or implied duties under this
Agreement; provided, however, that this provision shall not protect the
-------- -------
Transferor against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder. The
Transferor and any director, officer, employee or agent of the Transferor may
rely in good faith on any document of any kind prima facie properly executed and
----- -----
submitted by any Person respecting any matters arising hereunder.
Section 7.4 Liabilities. Notwithstanding Section 7.3, or any other
-----------
provision to the contrary herein (including without limitation Sections 8.3, 8.4
and 10.11 hereof), by entering into this Agreement, the initial Transferor and
any additional Transferor shall indemnify, defend and hold harmless the Trustee,
the Paying Agent, the Transfer Agent and Registrar, the Collateral Agent, and
the Trust from and against any taxes that may at any time be asserted against
the Trust with respect to, and as of the date of, the sale of the Receivables to
the Trust or the issuance and original sale of the Certificates, including any
sales, gross receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but not including any taxes asserted with
respect to ownership of the Receivables or federal or other income taxes,
including franchise taxes measured by net income), arising out of the
transactions contemplated by this Agreement, and costs and expenses in defending
against the same.
The Transferor shall indemnify, defend, and hold harmless the
Trustee, the Paying Agent, the Collateral Agent, the Transfer Agent and
Registrar and the Trust from and against any loss, liability or expense, damage
or injury (including, but not limited to, any judgment, award, settlement,
reasonable
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attorneys' fees and other costs or expenses) incurred by reason of (i) the
Transferor's willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of reckless disregard of the
obligations and duties hereunder and (ii) the Transferor's violation of federal
or state securities laws in connection with the sale of the Certificates.
If the Transferor shall have made any indemnity payments to the Trust
pursuant to this Section 7.4 and the Trust thereafter shall collect any of such
amounts from others, the Trust shall repay such amounts to the Transferor,
without interest. The provisions of this Section 7.4 shall run directly to and
be enforceable by an injured party subject to the limitations hereof and shall
survive the resignation or removal of the Trustee and/or the termination of the
Trust.
Section 7.5 Transferor May Own Certificates. The Transferor may in
-------------------------------
its individual or any other capacity become the owner or pledgee of any Class C
Certificates with the same rights as it would have if it were not the Transferor
thereof. Subject to Section 6.5, Class C Certificates so owned by or pledged to
the Transferor shall have an equal and proportionate benefit under the
provisions of this Agreement, without preference, priority, or distinction as
among all of the Class C Certificates.
Section 7.6 Amendments to Certificate of Incorporation. The
------------------------------------------
Transferor agrees to amend any provision of the Third or Tenth Articles of its
Certificate of Incorporation only upon satisfaction of the Rating Agency
Condition.
[End of Article VII]
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ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer. The servicer shall be liable
-------------------------
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.2 Merger or Consolidation of the Servicer. The Servicer
---------------------------------------
shall not consolidate with or merge into any other corporation or convey or
transfer its properties and assets substantially as an entirety to any Person,
unless:
(i) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Servicer substantially as an entirety
shall be, if the Servicer is not the surviving entity, (x) a corporation
organized and existing under the laws of the United States of America or
any State or the District of Columbia, or (y) organized and existing under
the laws of the United States of America or any State or the District of
Columbia, and shall be a national banking association, state banking
corporation or other entity which is not subject to the bankruptcy laws of
the United States of America and such corporation shall expressly assume,
by an agreement supplemental hereto, executed and delivered to the Trustee
in form satisfactory to the Trustee, the performance of every covenant and
obligation of the Servicer hereunder (to the extent that any right,
covenant or obligation of the Servicer, as applicable hereunder, is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity);
(ii) the Servicer shall have delivered to the Trustee an Officer's
Certificate that such consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section 8.2 and that all
conditions precedent herein provided for relating to such transaction have
been complied with and an Opinion of Counsel that such supplemental
agreement is a legal, valid and binding obligation of such surviving
entity, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights and the rights of
creditors of national banking associations or state banking corporations
and by general principles of equity (whether considered in a suit at law or
in equity); and
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(iii) the Servicer shall have delivered notice to the Rating Agency
of such consolidation, merger, conveyance or transfer.
Section 8.3 Limitation on Liability of the Servicer and Others. The
--------------------------------------------------
directors, officers, employees or agents of the Servicer shall not be under any
liability to the Trust, the Trustee, the Certificateholders or any other Person
hereunder or pursuant to any document delivered hereunder, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Agreement and the
issuance of the Certificates; provided, however, that this provision shall not
-------- -------
protect the directors, officers, employees and agents of the Servicer against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. Except as provided in
Section 8.4 with respect to the Trust and the Trustee, its officers, directors,
employees and agents, the Servicer shall not be under any liability to the
Trust, the Trustee, its officers, directors, employees and agents, the
Certificateholders or any other Person for any action taken or for refraining
from the taking of any action in its capacity as Servicer pursuant to this
Agreement; provided, however, that this provision shall not protect the Servicer
-------- -------
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of its reckless disregard of its obligations and duties hereunder. The
Servicer may rely in good faith on any document of any kind prima facie properly
----- -----
executed and submitted by any Person respecting any matters arising hereunder.
The Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the
Receivables in accordance with this Agreement which in its reasonable opinion
may involve it in any expense or liability. The Servicer may, in its sole
discretion, undertake any such legal action which it may deem necessary or
desirable for the benefit of Certificateholders with respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder.
Section 8.4 Servicer Indemnification of the Trust and the Trustee.
-----------------------------------------------------
The Servicer shall indemnify and hold harmless the Trust and the Trustee, the
Paying Agent and the Transfer Agent and Registrar, the Collateral Agent, and
their officers, directors, employees and agents, from and against any loss,
liability, expense, damage or injury suffered or sustained by reason of any acts
or omissions or alleged acts or omissions of the Servicer with respect to
activities of the Trust, the Trustee, the Paying Agent, the Collateral Agent and
the Transfer Agent and Registrar pursuant to this Agreement, or by reason of the
acceptance of this or the administration thereof by the Trustee, the issuance by
the Trust of the Certificates, any Servicer Default, any termination of the
rights and obligations
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of the Servicer including, but not limited to, any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided, however, that the Servicer shall not indemnify the Trustee or the
- -------- -------
Certificateholders if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, negligence, or willful misconduct by the
Trustee; provided further, that the Servicer shall not indemnify the Trust, the
-------- -------
Certificateholders for any liabilities, costs or expenses of the Trust with
respect to any action taken by the Trustee at the request of the
Certificateholders; provided further, that the Servicer shall not indemnify the
-------- -------
Trust or the Certificateholders as to any losses, claims or damages incurred by
any of them in their capacities as investors, including without limitation
losses incurred as a result of Defaulted Receivables; provided further, that the
-------- -------
Servicer shall not indemnify the Trust or the Certificateholders for any
liabilities, costs or expenses of the Trust or the Certificateholders arising
under any tax law, including without limitation, any federal, state, local or
foreign income or franchise taxes or any other tax imposed on or measured by
income (or any interest or penalties with respect thereto or arising from a
failure to comply therewith) required to be paid by the Trust or the
Certificateholders in connection herewith to any taxing authority. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof and shall survive the
resignation or removal of the Servicer, the resignation or removal of the
Trustee and/or the termination of the Trust.
Section 8.5 The Servicer Not to Resign. The Servicer shall not
--------------------------
resign from the obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance with
Section 9.2 hereof. If the Trustee is unable within 120 days of the date of
such determination to appoint a Successor Servicer, the Trustee or its designee
(which may not be the outgoing Servicer) shall serve as Successor Servicer
hereunder (but the Trustee shall have continued authority to appoint another
Person as Successor Servicer).
Section 8.6 Access to Certain Documentation and Information Regarding
---------------------------------------------------------
the Receivables. The Servicer shall provide to the Trustee access to the
- ---------------
documentation regarding the Receivables to review such documentation, such
access being afforded without charge but only (i) upon reasonable request,
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(ii) during normal business hours, (iii) subject to the Servicer's normal
security and confidentiality procedures and (iv) at offices designated by the
Servicer. Nothing in this Section 8.6 shall derogate from the obligation of the
Transferor, the Trustee or the Servicer to observe any applicable law
prohibiting disclosure of information regarding the obligors and the failure of
the Servicer to provide access as provided in this Section 8.6 as a result of
such obligations shall not constitute a breach of this Section 8.6.
Section 8.7 Delegation of Duties. It is understood and agreed by the
--------------------
parties hereto that the Servicer may delegate certain of its duties hereunder to
Alltel Financial Systems, a Delaware corporation. In the ordinary course of
business, the Servicer may at any time delegate any duties hereunder. Any such
delegations shall not relieve the Servicer of its liability and responsibility
with respect to such duties, and shall not constitute a resignation within the
meaning of Section 8.5 hereof. If any such delegation is to a party other than
Alltel Financial Systems, notification thereof shall be given to the Trustee and
each Rating Agency that is rating any Class of Certificates at the time of such
delegation.
Section 8.8 Examination of Records. The Servicer shall clearly and
----------------------
unambiguously identify each Receivable in its computer or other records to
reflect that such Receivable has been conveyed to the Trust pursuant to this
Agreement for the benefit of the Certificateholders. The Servicer shall, prior
to the sale or transfer to a third party of any receivable held in its custody,
examine its computer and other records to determine that such receivable is not
a Receivable.
[End of Article VIII]
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ARTICLE IX
SERVICER DEFAULTS
Section 9.1 Servicer Defaults. If any one of the following events (a
-----------------
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Trustee pursuant to Article IV
on or before the date such payment, transfer, deposit or such instruction or
notice is required to be made or given, as the case may be, under the terms of
this Agreement, which failure continues unremedied for a period of five Business
Days;
(b) failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set forth
in this Agreement, which has a material adverse effect on the Certificateholders
and which continues unremedied for a period of 60 days after the earlier of
discovery by a Servicing Officer or the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, or to the Servicer and the Trustee by the Holders of
Certificates evidencing not less than 50% of the Certificate Principal Balance
and continues to materially adversely affect such Certificateholders for such
period; or
(c) any representation, warranty or certification made by the
Servicer in this Agreement or in any certificate delivered pursuant to this
Agreement shall prove to have been incorrect when made, which has a material
adverse effect on the Certificateholders and which continues to be incorrect in
any material respect for a period of 30 days after the earlier of discovery by a
Servicing Officer or the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the Trustee,
or to the Servicer and the Trustee by the Holders of the Certificates evidencing
not less than 50% of the Certificate Principal Balance and continues to
materially adversely affect such Certificateholders for such period; or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of its property, or a decree or order
of a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer, and such decree or order shall have
remained in force undischarged or unstayed for a
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period of 60 days; or the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make any assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations;
then, so long as such Servicer Default shall not have been remedied, either the
Trustee, or the Holders of Certificates evidencing more than 50% of the
Certificate Principal Balance by notice then given in writing to the Servicer
(and to the Trustee if given by the Certificateholders) (a "Termination
Notice"), may terminate all of the rights and obligations of the Servicer as
Servicer under this Agreement. After receipt by the Servicer of such
Termination Notice, and on the date that a Successor Servicer shall have been
appointed by the Trustee pursuant to Section 9.2, all authority and power of the
Servicer under this Agreement shall pass to and be vested in a Successor
Servicer; and, without limitation, the Trustee is hereby authorized and
empowered (upon the failure of the Servicer to cooperate) to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all
documents and other instruments upon the failure of the Servicer to execute or
deliver such documents or instruments, and to do and accomplish all other acts
or things necessary or appropriate to effect the purposes of such transfer of
servicing rights and obligations. The Servicer agrees to cooperate with the
Trustee and such Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder
including, without limitation, the transfer to such Successor Servicer of all
authority of the Servicer to service the Receivables provided for under this
Agreement, including, without limitation, all authority over all Collections
which shall on the date of transfer be held by the Servicer for deposit, or
which have been deposited by the Servicer, in the Collection Account or which
shall thereafter be received with respect to the Receivables. The Servicer shall
promptly transfer its electronic records or electronic copies thereof relating
to the Receivables to the Successor Servicer in such electronic form as the
Successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents necessary for
the continued servicing of the Receivables in the manner and at such times as
the Successor Servicer shall reasonably request. To the extent that compliance
with this Section 9.1 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer reasonably deems to be
confidential, the Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Servicer shall deem
necessary to protect its interests.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in subsection 9.1(a) for a period of 10 Business Days or under
subsection 9.1(b) or (c) for a period of 60 Business Days in addition to any
period provided in subsection 9.1(a), (b) or (c) shall not constitute a Servicer
Default for
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such additional 10 or 60 Business Days if such delay or failure could not be
prevented by the exercise of reasonable diligence by the Servicer and such delay
or failure was caused by an act of God or the public enemy, acts of declared or
undeclared war, public disorder, rebellion, riot or sabotage, epidemics,
landslides, lightning, fire, hurricanes, tornadoes, earthquakes, nuclear
disasters or meltdowns, floods, power outages, communications outages, computer
failure or similar causes. The preceding sentence shall not relieve the Servicer
from using its best efforts to perform its obligations in a timely manner in
accordance with the terms of this Agreement and the Servicer shall provide the
Trustee, the Transferor and the Holders of Certificates with an Officer's
Certificate giving prompt notice of such failure or delay by it, together with a
description of the cause of such failure or delay and its efforts so to perform
its obligations.
Section 9.2 Trustee to Act; Appointment of Successor.
----------------------------------------
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 9.1, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Trustee in writing or, if no such date is
specified in such Termination Notice, or otherwise specified by the Trustee,
until a date mutually agreed upon by the Servicer and Trustee. The Trustee
shall notify each Rating Agency of such removal of the Servicer. The Trustee
shall, as promptly as possible after the giving of a Termination Notice appoint
a successor servicer (the "Successor Servicer"), and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to the
Trustee. The Trustee may obtain bids from any potential successor servicer. If
the Trustee is unable to obtain any bids from any potential successor servicer
and the Servicer delivers an Officer's Certificate to the effect that they
cannot in good faith cure the Servicer Default which gave rise to a transfer of
servicing, the Trustee without further action shall automatically be appointed
the Successor Servicer (but shall have continued authority, to appoint another
Person as Successor Servicer). Notwithstanding the above, the Trustee shall, if
it is legally unable to act or if it is unwilling to act (provided that in the
latter case it acts as Successor Servicer until another Person is appointed
Successor Servicer), petition a court of competent jurisdiction to appoint any
established financial institution having, in the case of an entity that is
subject to risk-based capital adequacy requirements, risk-based capital of at
least $50,000,000 or, in the case of an entity that is not subject to risk-based
capital requirements, having a net worth of not less than $50,000,000 and whose
regular business includes the servicing of consumer loans similar to the loans
relating to the Receivables as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to
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servicing functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof, and all references in this Agreement to the
Servicer shall be deemed to refer to the Successor Servicer. The Trustee shall
notify each Rating Agency of the appointment of such Successor Servicer.
(c) In connection with such appointment and assumption, the Trustee
shall be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
-------- -------
shall be in excess of the Monthly Servicing Fee permitted to the Servicer
pursuant to Section 3.6.
(d) All authority and power granted to the Servicer under this
Agreement shall automatically cease and terminate upon termination of the Trust
pursuant to Section 11.1 and shall pass to and be vested in the Transferor and,
without limitation, the Transferor is hereby authorized and empowered to execute
and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all
documents and other instruments, and to do and accomplish all other acts or
things necessary or appropriate to effect the purposes of such transfer of
servicing rights. The Servicer agrees to cooperate with the Transferor in
effecting the termination of the responsibilities and rights of the Servicer to
conduct servicing on the Receivables. The Servicer shall transfer its
electronic records relating to the Receivables to the Transferor, or to such
other Person as the Transferor may designate, in such electronic form as the
Transferor may reasonably request and shall transfer all other records,
correspondence and documents to the Transferor, or to such other Person as the
Transferor may designate, in the manner and at such times as the Transferor
shall reasonably request. To the extent that compliance with this Section 10.2
shall require the Servicer to disclose to the Transferor information of any kind
which the Servicer deems to be confidential, the Transferors shall be required
to enter into such customary licensing and confidentiality agreements as the
Servicer shall deem necessary to protect its interests.
Section 9.3 Notification to Certificateholders. Within two Business
----------------------------------
Days after the Servicer becomes aware of any Servicer Default, the Servicer
shall give prompt written notice thereof to the Trustee and the Trustee shall
give notice to the Certificateholders at their respective addresses appearing in
the Certificate Register. Upon any termination or appointment of a Successor
Servicer pursuant to this Article IX, the Trustee shall give prompt written
notice thereof to Certificateholders at their respective addresses appearing in
the Certificate Register.
Section 9.4 Waiver of Past Defaults. The Holders of Certificates
-----------------------
evidencing not less than 662/3% of the Certificate Principal Balance may, on
behalf of all Certificateholders, waive any default by the Servicer or
Transferor in the performance of
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its obligations hereunder and its consequences, except a default in the failure
to make any required deposits or payments of interest or principal pursuant to
Article IV which default does not result from the failure of the Paying Agent to
perform its obligations to make any required deposits or payments of interest
and principal in accordance with Article IV. Upon any such waiver of a past
default, such default shall cease to exist, and any default arising there from
shall be deemed to have been remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.
[End of Article IX]
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ARTICLE X
THE TRUSTEE
Section 10.1 Duties of Trustee.
-----------------
(a) The Trustee, prior to the occurrence of any Servicer Default and
after the curing or waiving of all Servicer Defaults which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If a Responsible Officer has received written notice
that a Servicer Default has occurred (and such Servicer Default has not been
cured or waived), the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs; provided, however, that if the Trustee
-------- -------
shall assume the duties of the Servicer pursuant to Section 8.5 or 9.2, the
Trustee in performing such duties shall use the degree of skill and attention
customarily exercised by a servicer with respect to comparable receivables that
it services for itself or others.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
substantially conform to the requirements of this Agreement, but shall not be
required to verify the accuracy of any information, calculations or conclusions
stated therein.
(c) Subject to subsection 10.1(a), no provision of this Agreement
shall be construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
- -------- -------
(i) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(ii) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Holders of Certificates evidencing more than 50%
of the Certificate Principal Balance relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee under this
Agreement; and
(iii) the Trustee shall not be charged with knowledge of any failure
by the Servicer referred to in clauses (a) and (b) of Section 9.1 or of any
breach by the Servicer
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contemplated by clause (c) of Section 9.1 unless a Responsible Officer of
the Trustee obtains actual knowledge of such failure or breach or the
Trustee receives written notice of such failure or breach from the Servicer
or any Holders of Certificates evidencing not less than 10% of the
Certificate Principal Balance.
(d) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or indemnity
reasonably satisfactory to it against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Agreement shall in
any event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Agreement
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to impair the interests of the
Trust in any Receivable or to impair the value of any Receivable.
(f) Except as provided in this subsection 10.1(f), the Trustee shall
have no power to vary the corpus of the Trust including, without limitation, the
power to (i) accept any substitute obligation for a Receivable initially
assigned to the Trust under Section 2.2 hereof, (ii) add any other investment,
obligation or security to the Trust or (iii) withdraw from the Trust any
Receivables, except for a withdrawal permitted under Sections 2.6 and 3.5.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or agreement in the manner
or on the day required to be performed by the Paying Agent or the Transfer Agent
and Registrar, as the case may be, under this Agreement, the Trustee shall be
obligated promptly upon its knowledge thereof by a Responsible Officer of the
Trustee to perform such obligation, duty or agreement in the manner so required.
(h) If the Transferor has agreed to transfer any of its unsecured
consumer loan receivables (other than the Receivables) to another Person, upon
the written request of the Transferor, the Trustee will enter into such
intercreditor agreements with the transferee of such receivables as are
customary and necessary to identify separately the rights, if any, of the Trust
and such other Person in the Transferor's unsecured consumer loan receivables;
provided, that the Trust shall not be required to enter into any intercreditor
- --------
agreement which could adversely affect the interests of the
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Certificateholders or the Trustee and, upon the request of the Trustee, the
Transferor will deliver an Opinion of Counsel on any matters relating to such
intercreditor agreement, reasonably requested by the Trustee (which Opinion of
Counsel will contain, without limitation, an opinion that entering into such
intercreditor agreement will not adversely affect the interests of the
Certificateholders or the Trustee).
Section 10.2 Certain Matters Affecting the Trustee. Except as
-------------------------------------
otherwise provided in Section 10.1:
(a) the Trustee may conclusively rely on and shall be protected in
acting on, or in refraining from acting in accordance with the Servicer's
Certificate, the annual Servicer's certificate, the monthly payment instructions
and notification to the Trustee, the monthly Certificateholder's statement, any
resolution, Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented to it pursuant to this Agreement by the
proper party or parties;
(b) the Trustee may consult with counsel, and any advice or Opinion
of Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation hereunder or in relation hereto, at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity reasonably satisfactory to it against the
costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee of the obligations,
upon the occurrence of any Servicer Default (which has not been cured or
waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(e) the Trustee shall not be bound to make any investigation into the
facts or matters stated in the Servicer's Certificate, the annual Servicer's
certificate, the monthly payment instructions and notification to the Trustee,
the monthly
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Certificateholders statement, any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by Holders of
Certificates evidencing more than 50% of the Certificate Principal Balance;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or custodian
appointed with due care by it hereunder;
(g) except as may be required by subsection 10.1(a), the Trustee
shall not be required to make any initial or periodic examination of any
documents or records related to the Receivables for the purpose of establishing
the presence or absence of defects, the compliance by the Transferor with its
representations and warranties or for any other purpose; and
(h) whenever in the administration of this Agreement the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate.
Section 10.3 Trustee Not Liable for Recitals in Certificates. The
-----------------------------------------------
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the Certificates (other than the certificate of authentication on
the Certificates). Except as set forth in Section 10.15, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates)
or of any Receivable or related document. The Trustee shall not be accountable
for the use or application by the Transferor of any of the Certificates or of
the proceeds of such Certificates, or for the use or application of any funds
paid to the Transferor in respect of the Receivables or deposited in or
withdrawn from the Collection Account, the Class A Distribution Account, the
Class B Distribution Account, the Class C Distribution Account or other accounts
now or hereafter established to effectuate the transactions contemplated herein
and in accordance with the terms hereof.
Section 10.4 Trustee May Own Certificates. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 10.5 The Servicer to Pay Trustee's Fees and Expenses. The
-----------------------------------------------
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive, reasonable compensation (which shall not
be limited by
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any provision of law in regard to the compensation of a trustee of an express
trust) for all services rendered by the Trustee in the execution of the Trust
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and, subject to Section 8.4, the Servicer will
pay or reimburse the Trustee (without reimbursement from the Collection Account,
the Class A Distribution Account, the Class B Distribution Account, the Class C
Distribution Account or otherwise) upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Agreement (including the reasonable fees and
expenses of its agents and counsel) except any such expense, disbursement or
advance as may arise from its own negligence or bad faith and except as provided
in the following sentence. If the Trustee is appointed Successor Servicer
pursuant to Section 9.2, the provisions of this Section 10.5 shall not apply to
expenses, disbursements and advances made or incurred by the Trustee in its
capacity as Successor Servicer (which shall be covered out of the Monthly
Servicing Fee).
The obligations of the Servicer under this Section 10.5 shall also
apply to the Paying Agent and the Transfer Agent and Registrar and shall survive
the termination of the Trust and the resignation or removal of the Trustee.
Section 10.6 Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or any state thereof authorized under
such laws to exercise corporate trust powers, having a long-term unsecured debt
rating of at least Baa3 by Moody's and BBB- by Standard & Poor's and Fitch (if
then rated by Fitch) having, in the case of an entity that is subject to risk-
based capital adequacy requirements, risk-based capital of at least $50,000,000
or, in the case of an entity that is not subject to risk-based capital adequacy
requirements, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section 10.6, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 10.6, the Trustee shall resign immediately in the manner and with the
effect specified in Section 10.7.
Section 10.7 Resignation or Removal of Trustee.
---------------------------------
(a) The Trustee may at any time resign and be discharged from the
Trust hereby created by giving written notice thereof to the Servicer. Upon
receiving such notice of resignation, the Servicer shall promptly appoint a
successor
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trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted such
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 10.6 hereof and shall fail to resign
after written request therefor by the Transferor, or if at any time the Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the Trustee and promptly
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 10.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 10.8 hereof and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee.
Section 10.8 Successor Trustee.
-----------------
(a) Any successor trustee appointed as provided in Section 10.7
hereof shall execute, acknowledge and deliver to the Transferor and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee herein. The predecessor Trustee shall deliver to the successor
trustee all documents and statements held by it hereunder, and the Transferor
and the predecessor Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly vesting
and confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 10.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 10.6 hereof.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 10.8, such successor trustee
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shall mail notice of such succession hereunder to all Certificateholders at
their addresses as shown in the Certificate Register.
Section 10.9 Merger or Consolidation of Trustee. Any Person into
----------------------------------
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 10.6 hereof, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
Section 10.10 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Certificateholders, such
title to the trust, or any part thereof, and, subject to the other provisions of
this Section 10.10, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 10.6 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 10.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any laws of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly
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by such separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article X. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 10.11 Tax Returns. In the event the Trust shall be required
-----------
to file state tax returns or pursuant to an audit or administrative proceeding
or change in applicable regulations to file federal tax returns, the Servicer,
shall at its expense prepare or cause to be prepared any tax returns required to
be filed by the Trust and, to the extent possible, shall remit such returns to
the Trustee for signature at least five Business Days before such returns are
due to be filed. The Trustee is hereby authorized to sign any such return on
behalf of the Trust. The Servicer shall prepare or shall cause to be prepared
all tax information required by law to be distributed to Certificateholders and
shall deliver such information to the Trustee at least five Business Days prior
the date it is required by law to be distributed to Certificateholders; upon
receipt, the Trustee shall forward such information to the Certificateholders.
The Trustee, upon request, will furnish the Servicer with all such information
known to the Trustee as may be reasonably required in connection with the
preparation of all tax returns of the Trust and shall, upon request, execute
such return. In no event shall the Trustee or the Servicer be liable for any
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liabilities, costs or expenses of the Trust, the Certificateholders arising
under any tax law, including without limitation federal, state, local or foreign
income or excise taxes or any other tax imposed on or measured by income (or any
interest or penalty with respect thereto or arising from a failure to comply
therewith).
Section 10.12 Trustee May Enforce Claims Without Possession of
------------------------------------------------
Certificates. All rights of action and claims under this Agreement or the
- ------------
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.
Section 10.13 Suits for Enforcement. If a Servicer Default shall
---------------------
occur and be continuing, the Trustee, in its discretion may, subject to the
provisions of Section 9.1, proceed to protect and enforce its rights and the
rights of the Certificateholders under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy as the Trustee, being advised by
counsel, shall deem most effectual to protect and enforce any of the rights of
the Trustee or of the Certificateholders.
Section 10.14 Rights of Certificateholders to Direct Trustee.
----------------------------------------------
Holders of Certificates evidencing more than 50% of the Certificate Principal
Balance shall have the right to direct the time, method, and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee; provided, however, that, subject to Section
-------- -------
10.1, the Trustee shall have the right to decline to follow any such direction
if the Trustee being advised by counsel determines that the action so directed
may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in personal liability or
be unduly prejudicial to the rights of Certificateholders not parties to such
direction; and provided further that nothing in this Agreement shall impair the
-------- -------
right of the Trustee to take any action deemed proper by the Trustee and which
is not inconsistent with such direction of such Holders of Certificates.
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Section 10.15 Representations and Warranties of Trustee. The
-----------------------------------------
Trustee represents and warrants that:
(i) the Trustee is a banking corporation organized, existing and
authorized to engage in the business of banking under the laws of the State
of Delaware;
(ii) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement;
and
(iii) this Agreement has been duly executed and delivered by the
Trustee.
Section 10.16 Maintenance of Office or Agency. The Trustee will
-------------------------------
maintain at its expense an office or offices, or agency or agencies, where
notices and demands to or upon the Trustee in respect of the Certificates and
this Agreement may be served. The Trustee initially appoints its Corporate
Trust Office as its office for such purposes. The Trustee will give prompt
written notice to the Servicer and to Certificateholders of any change in the
location of the Certificate Register or any such office or agency.
Section 10.17 Bankers Trust (Delaware), as Collateral Agent.
---------------------------------------------
Notwithstanding anything in this Agreement to the contrary, references in this
Article X to the Trustee shall also refer to Bankers Trust (Delaware), in its
- ---------
capacity as Collateral Agent hereunder.
[End of Article X]
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ARTICLE XI
TERMINATION
Section 11.1 Termination of Trust.
--------------------
The Trust and the respective obligations and responsibilities of the
Transferor, the Servicer and the Trustee created hereby (other than the
obligation of the Trustee to make payments to Certificateholders as hereafter
set forth) shall terminate, except with respect to the duties described in
Section 8.4 and 10.5 upon the earliest of (i) the Distribution Date next
succeeding the purchase by the Transferor at its option, pursuant to Section
11.2, of Receivables remaining in the Trust, (ii) the payment to
Certificateholders of all amounts required to be paid to them pursuant to this
Agreement or (iii) the Distribution Date next succeeding the month which is six
months after the maturity or the liquidation of the last Receivable held in the
Trust and the disposition of any amounts received upon liquidation of any
property remaining in the Trust; provided, however, that in no event shall the
-------- -------
Trust created by this Agreement continue beyond the expiration of 21 years from
the date of this Agreement. The Servicer shall promptly (but in any event not
later than the first day of the month of the specified Distribution Date) notify
the Trustee, the Paying Agent, the Transfer Agent and Registrar and the Rating
Agencies in writing of any prospective termination pursuant to this Section
11.1.
Section 11.2 Optional Purchase of All Receivables. As of the last
------------------------------------
day of any Monthly Period on which the Pool Factor (expressed as a percentage)
shall be equal to or less than the Optional Purchase Percentage, the Transferor
shall have the option to purchase the corpus of the Trust. To exercise such
option, the Transferor shall notify the Trustee, the Paying Agent, the Transfer
Agent and Registrar in writing, no later than the 20th day of such Monthly
Period, shall pay the aggregate Repurchase Amount for the Receivables (including
Defaulted Receivables) as of such last day and shall succeed to all interests
in, to and under the Trust property. The amount deposited pursuant to this
Section 11.2 shall be paid to the Certificateholders pursuant to Sections 4.5
and 5.1 on the related Distribution Date following the date of such deposit. The
Transferor shall not exercise its option under this Section 11.2 unless (i)
after such exercise, the Certificateholders shall receive all amounts of
interest owing and principal outstanding, or (ii) each Certificateholder shall
consent in writing to such exercise.
Section 11.3 Final Payment with Respect to the Certificates.
----------------------------------------------
(a) Written notice of any termination, specifying the Distribution
Date upon which the Certificateholders may surrender their Certificates for
payment of the final distribution and cancellation, shall be given (subject to
at least two Business
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Days' prior notice from the Servicer to the Trustee) by the Trustee to
Certificateholders mailed not later than the fifth Business Day of the month of
such final distribution specifying (i) the Distribution Date upon which final
payment of such Certificates will be made upon presentation and surrender of
such Certificates at the office or offices therein designated, (ii) the amount
of any such final payment and (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments of principal and interest
being made only upon presentation and surrender of the Certificates at the
office or offices therein specified. The Servicer's notice to the Trustee in
accordance with the preceding sentence shall be accompanied by an Officers'
Certificate setting forth the information specified in Section 3.8 of this
Agreement covering the period during the then current calendar year through the
date of such notice and setting forth the date of such final distribution. The
Trustee shall give such notice to the Transfer Agent and Registrar and the
Paying Agent at the time such notice is given to such Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 11.1(a) all funds then on deposit in the Collection Account, the
Class A Distribution Account, the Class B Distribution Account or the Class C
Distribution Account shall continue to be held in trust for the benefit of the
Certificateholders and the Paying Agent or the Trustee shall pay such funds to
the Certificateholders upon surrender of their Certificates. In the event that
all of the Certificateholders shall not surrender their Certificates for
cancellation within six months after the date specified in the above-mentioned
written notice, the Trustee shall give a second written notice to the remaining
Certificateholders upon receipt of the appropriate records from the Transfer
Agent and Registrar to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within one year after the
second notice, all the Certificates shall not have been surrendered for
cancellation, the Trustee may take appropriate steps or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds in the Collection Account or Distribution Account. The Trustee and the
Paying Agent shall pay to the Transferor upon request any monies held by them
for the payment of principal or interest which remains unclaimed for two years.
After payment to the Transferor, Certificateholders entitled to the money must
look to the Transferor for payment as general creditors unless an applicable
abandoned property law designates another Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
canceled by the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor.
[End of Article XI]
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1 Amendment.
---------
(a) This Agreement may be amended in writing from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of
Certificateholders, (i) to cure any ambiguity, to revise any exhibits or
schedules to correct or supplement any provisions herein or thereon which may be
inconsistent with any other provisions herein or thereon or (ii) to add any
other provisions with respect to matters or questions raised under this
Agreement which shall not be inconsistent with the provisions of this Agreement;
provided, that such action shall not, as evidenced by an Officer's Certificate
- --------
from the Transferor addressed and delivered to the Trustee, adversely affect in
any material respect the interests of any Certificateholder; provided further,
-------- -------
that the Rating Agency Condition shall be satisfied with respect to such
amendment; provided further, however, that the Trustee may, but shall not be
-------- ------- -------
obligated to, enter into any such amendment which materially affects the
Trustee's rights, duties or immunities under this Agreement or otherwise.
This Agreement, and any schedule or exhibit thereto, may be amended in
writing from time to time by the Servicer, the Transferor and the Trustee,
without the consent of any of Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the Holders of
Certificates; provided, that the Servicer shall have provided an Officer's
--------
Certificate to the Trustee to the effect that such amendment will not adversely
affect in any material respect the interests of any Certificateholder; provided
--------
further, that each Rating Agency shall have notified the Transferor, the
- -------
Servicer and the Trustee in writing that such action will not result in a
reduction or withdrawal of the rating of any outstanding Class to which it is a
Rating Agency; provided further, that the Trustee may, but shall not be
-------- -------
obligated to, enter into any such amendment which materially affects the
Trustee's rights, duties or immunities under this Agreement or otherwise.
(b) This Agreement may also be amended in writing from time to time
by the Servicer, the Transferor and the Trustee with the consent of the Holders
of Certificates evidencing not less than 662/3% of the Certificate Principal
Balance with respect of each outstanding Class adversely affected by such
amendment for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or modifying in any
manner the rights of Certificateholders; provided, however, that no such
-------- -------
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Class of Certificates without
the consent of each Certificateholder of such Class or (ii) reduce the aforesaid
percentage required to consent to any such amendment, without the
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consent of each Certificateholder of such Class or (ii) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of
each Certificateholder of all Classes adversely affected. An amendment to be
effected pursuant to this paragraph shall be deemed not to adversely affect any
outstanding Class with respect to which the Transferor shall deliver an
Officer's Certificate addressed and delivered to the Trustee, that such action
will not, in the Transferor's reasonable opinion, adversely affect in any
material respect the interests the Certificateholders of such Class and the
Rating Agency Condition with respect to such Amendment has been satisfied. The
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's rights, duties or immunities under this Agreement or
otherwise.
(c) Promptly after the execution of any such amendment (other than an
amendment pursuant to paragraph (a)), the Trustee shall furnish notification of
the substance of such amendment to each Certificateholder and ten Business Days
prior to the proposed effective date for such amendment the Trustee shall
furnish notification of the substance of such amendment to each Rating Agency.
(d) It shall not be necessary for the consent of Certificateholders
under this Section 12.1 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Trustee may prescribe.
(e) Notwithstanding the foregoing provisions of this Section 12.1,
the replacement of the Servicer or the Trustee pursuant to the terms hereof
shall constitute an amendment for purposes of this Section 12.1.
Section 12.2 Protection of Right Title and Interest to Trust.
-----------------------------------------------
(a) The Servicer shall cause this Agreement, all amendments hereto
and/or all financing statements and continuation statements and any other
necessary documents covering the Certificateholders, the Trustee's and the
Collateral Agent's right, title and interest to the Trust and the Spread Account
to be promptly recorded, registered and filed, and at all times to be kept
recorded, registered and filed, all in such manner and in such places as may be
required by law fully to preserve and protect the right, title and interest of
the Certificateholders, the Trustee or the Collateral Agent, as the case may be,
hereunder to all property comprising the Trust. The Servicer shall deliver to
the Trustee and the Collateral Agent, appropriate file-stamped copies of, or
filing receipts for, any document recorded, registered or filed as provided
above, as soon as available following such recording, registration or filing.
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The Transferor shall cooperate fully with the Servicer in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this subsection 12.2(a).
(b) Within 30 days after the Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC as in effect in the
State of Delaware, the Transferor shall give the Trustee and the Collateral
Agent notice of any such change and shall file such financing statements or
amendments as may be necessary to continue the perfection of the Trust's
security interest in the Receivables and the proceeds thereof.
(c) Each of the Transferor and the Servicer will give the Trustee and
the Collateral Agent prompt written notice of any relocation of any office from
which it services Receivables or keeps records concerning the Receivables or of
its principal executive office and whether, as a result of such relocation, the
applicable provisions of the Relevant UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and shall file such financing statements or amendments
as may be necessary to continue the perfection of the Trust's security interest
in the Receivables and the proceeds thereof. Each of the Transferor and the
Servicer will at all times maintain each office from which it services
Receivables and its chief executive office within the United States of America.
As of the Closing Date, the chief executive offices of the Transferor and
Servicer, respectively, are located at the applicable addresses specified in
Section 12.5.
(d) the Servicer shall deliver to the Trustee and the Collateral
Agent, as applicable:
(i) upon the execution and delivery of this Agreement, an Opinion of
Counsel either stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed that
are necessary fully to preserve and protect the interest of the Trustee in
the Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given; and
(ii) on or before March 31 of each year, commencing with March 31,
1998, an Opinion of Counsel, dated as of such date, either (A) stating
that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Trustee in the
Receivables, and reciting the details of such filings or referring to prior
opinions of Counsel in which such details are given, or (B) stating that,
in the opinion of such
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counsel, no such action shall be necessary to preserve and protect such
interest prior to March 31 of the next succeeding calendar year.
Section 12.3 Limitation on Rights of Certificateholders.
--------------------------------------------
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except as
expressly provided in this Agreement) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have made, and unless the Holders of
Certificates evidencing more than 50% of the Certificate Principal Balance shall
have made, written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have the right in any manner whoever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or Prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 12.3, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
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Section 12.4 Governing Law. THIS AGREEMENT 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.
Section 12.5 Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at, sent by facsimile to (followed by a hard copy), sent by
courier at or mailed by registered mail, return receipt requested, to (a) in the
case of the Transferor, its chief executive office at 201 North Walnut Street,
Wilmington, Delaware 19801, Attention: Jerry Holbrook, with a copy to First USA,
Inc., 1601 Elm Street, Suite 4600, Dallas, Texas 75201, Attention: W. Todd
Peterson, (b) in the case of the Servicer, to 201 North Walnut Street,
Wilmington, Delaware 19801, Attention: Executive Vice President, Accounting and
Finance, with a copy to First USA, Inc., 1601 Elm Street, Suite 4700, Dallas,
Texas 75201, Attention: David Nelson, General Counsel, (c) in the case of the
Collateral Agent, to Bankers Trust (Delaware), as Collateral Agent, 1001
Jefferson Street, Suite 550, Wilmington, Delaware 19801, with a copy to Bankers
Trust Company, Four Albany Street, 10th Floor, New York, New York 10006,
Attention: Structured Finance, Mail Stop 5101; (d) in the case of the Trustee,
to the Corporate Trust Office, with a copy to Bankers Trust Company, Four Albany
Street, 10th Floor, New York, New York 10006, Attention: Structured Finance,
Mail Stop 5101; and (e) in the case of Fitch, to One State Street Plaza, New
York, New York 10004, Attention: Asset Backed Group; or, as to each party, at
such other address as shall be designated by such party in a written notice to
each other party. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 12.6 Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof.
Section 12.7 Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Section 8.2, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Certificates
evidencing not less than 662/3% of the Certificate Principal Balance.
85
<PAGE>
Section 12.8 Certificates Non-Assessable and Fully Paid. It is the
------------------------------------------
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the interests
represented by the Certificates shall be non-assessable for any losses or
expenses of the Trust or for any reason whatsoever, and that Certificates upon
authentication thereof by the Trustee pursuant to Sections 2.2 and 6.2 are and
shall be deemed fully paid.
Section 12.9 Further Assurances. The Transferor and the Servicer
------------------
agree to do and perform, from time to time, any and all acts and to execute any
and all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of this Agreement, including, without limitation,
the execution of any financing statements or continuation statements relating to
the Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 12.10 No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Trustee or the
Certificateholders, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privileges
the rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
Section 12.11 Counterparts. This Agreement may be executed in two or
------------
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
Section 12.12 Third-Party Beneficiaries. This Agreement will inure
-------------------------
to the benefit of and be binding upon the parties hereto and the
Certificateholders and their respective successors and permitted assigns.
Except as otherwise provided in this Article XII and Section 7.4, no other
Person will have any right or obligation hereunder.
Section 12.13 Actions by Certificateholders.
-----------------------------
(a) Wherever in this Agreement a provision is made that an action may
be taken or a notice, demand or instruction given by Certificateholders, such
action, notice or instruction may be taken or given by any Certificateholder,
unless such provision requires a specific percentage of Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind such Certificateholder and
every subsequent holder of such Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything
86
<PAGE>
done or omitted to be done by the Trustee or the Servicer in reliance thereon,
whether or not notation of such action is made upon such Certificate.
Section 12.14 No Petition. Each of the Trustee, the Paying Agent,
-----------
the Transfer Agent and Registrar and, by accepting its Certificate, each
Certificateholder, covenants and agrees that it will not at any time institute
against First USA Securitization Corporation, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or similar proceedings under
any United States federal or state or similar law. In consideration of such
covenants and agreements, the Transferor covenants and agrees to use its best
efforts to cause a provision substantially similar to this Section 12.14 to be
included in each pooling and servicing agreement to which it becomes a party.
Section 12.15 Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 12.16 Heading. The headings herein are for purposes of
-------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
[End of Article XII]
87
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer, the Collateral Agent and
the Trustee have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
FIRST USA SECURITIZATION
CORPORATION, Transferor
By:/s/ W. Todd Peterson
---------------------------
Name: W. Todd Peterson
Title: Vice President
FIRST USA FEDERAL SAVINGS BANK,
Servicer
By:___________________________
Name: Jack M. Antonini
Title: President
BANKERS TRUST COMPANY (DELAWARE),
Trustee
By:___________________________
Name:
Title:
BANKERS TRUST COMPANY (DELAWARE),
Collateral Agent
By:___________________________
Name:
Title:
[Signature Page to Pooling and Servicing Agreement]
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer, the Collateral Agent and
the Trustee have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
FIRST USA SECURITIZATION
CORPORATION, Transferor
By:___________________________
Name: W. Todd Peterson
Title: Vice President
FIRST USA FEDERAL SAVINGS BANK,
Servicer
By:/s/ Jack M. Antonini
---------------------------
Name: Jack M. Antonini
Title: President
BANKERS TRUST COMPANY (DELAWARE),
Trustee
By:___________________________
Name:
Title:
BANKERS TRUST COMPANY (DELAWARE),
Collateral Agent
By:___________________________
Name:
Title:
[Signature Page to Pooling and Servicing Agreement]
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer, the Collateral Agent and
the Trustee have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
FIRST USA SECURITIZATION
CORPORATION, Transferor
By:___________________________
Name: W. Todd Peterson
Title: Vice President
FIRST USA FEDERAL SAVINGS BANK,
Servicer
By:___________________________
Name: Jack M. Antonini
Title: President
BANKERS TRUST (DELAWARE),
not in its individual capacity but
solely as Trustee of the Trust
By:/s/ M. Lisa Wilkins
---------------------------
Name: M. Lisa Wilkins
Title: Assistant Secretary
BANKERS TRUST (DELAWARE),
not in its individual capacity but
solely as Collateral Agent of the Trust
By:/s/ M. Lisa Wilkins
---------------------------
Name: M. Lisa Wilkins
Title: Assistant Secretary
[Signature Page to Pooling and Servicing Agreement]
<PAGE>
EXHIBIT A-1
-----------
[FORM OF CLASS A CERTIFICATE]
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF FIRST USA
SECURITIZATION CORPORATION (THE "CORPORATION") THE TRUST AND THE TRUSTEE THAT,
WITH RESPECT TO THE SOURCE OF FUNDS TO BE USED BY YOU TO PURCHASE THIS CLASS A
CERTIFICATE (THE "SOURCE") EITHER: (i) THE SOURCE IS NOT ASSETS OF AN "EMPLOYEE
BENEFIT PLAN" (WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO TITLE I OF
ERISA OR AN INDIVIDUAL RETIREMENT ARRANGEMENT OR PLAN THAT IS SUBJECT TO SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A
"PLAN"); OR (ii) YOU ARE AN INSURANCE COMPANY AND EITHER (A) YOU ARE AUTHORIZED
TO DO BUSINESS UNDER THE LAWS OF MORE THAN ONE STATE AND THE SOURCE IS YOUR
"INSURANCE COMPANY GENERAL ACCOUNT" AS DESCRIBED IN PROHIBITED TRANSACTION
EXEMPTION 95-60, AND THE AMOUNT OF THE RESERVES FOR THE CONTRACT(S) HELD BY OR
ON BEHALF OF ANY PLAN (DETERMINED UNDER SECTION 807(d) OF THE CODE), TOGETHER
WITH THE AMOUNT OF THE RESERVES FOR THE CONTRACTS HELD BY OR ON BEHALF OF OTHER
PLANS (DETERMINED UNDER SECTION 807(d) OF THE CODE) MAINTAINED BY THE SAME
EMPLOYER OR AFFILIATE THEREOF OR BY THE SAME EMPLOYEE ORGANIZATION, IN THE
GENERAL ACCOUNT DO NOT EXCEED 10% OF THE TOTAL OF ALL LIABILITIES OF THE GENERAL
ACCOUNT; (B) THE SOURCE IS A "GOVERNMENTAL PLAN" (WITHIN THE MEANING OF SECTION
3(32) OF ERISA); (C) THE SOURCE IS AN "INSURANCE COMPANY POOLED SEPARATE
ACCOUNT" (WITHIN THE MEANING OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 90-1) AND THERE IS NO PLAN (TREATING AS A SINGLE PLAN ALL
PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE ORGANIZATION) WHOSE ASSETS IN
SUCH POOLED SEPARATE ACCOUNT EXCEED TEN PERCENT (10%) OF THE TOTAL ASSETS IN
THAT ACCOUNT; (D) THE SOURCE IS AN "INVESTMENT FUND" (WITHIN THE MEANING OF PART
V(b) OF PTCE 84-14); MANAGED BY A "QUALIFIED PROFESSIONAL ASSET MANAGER" (WITHIN
THE MEANING OF PART V(a) OF PTCE 84-14) AND THE PURCHASE IS EXEMPT UNDER PTCE
84-14; OR (E) THE SOURCE IS A SPECIFIC PLAN, YOU HAVE PROVIDED IN WRITING TO THE
TRUSTEE COMPLETE AND ACCURATE INFORMATION AS TO THE IDENTITY OF THAT PLAN AND
THE PURCHASE IS EXEMPT UNDER ANOTHER APPLICABLE EXEMPTION; OR (iii) YOU ARE AN
ENTITY OTHER THAN AN INSURANCE COMPANY AND EITHER (A) THE SOURCE IS A
"GOVERNMENTAL PLAN" (WITHIN THE MEANING OF SECTION 3(32) OF ERISA); (B) THE
SOURCE IS A "COLLECTIVE INVESTMENT FUND MAINTAINED BY A BANK" (WITHIN THE
MEANING OF PTCE 91-38) AND THERE IS NO PLAN (TREATING AS A SINGLE PLAN ALL
EMPLOYEE BENEFIT PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE ORGANIZATION)
WHOSE ASSETS IN SUCH BANK COLLECTIVE INVESTMENT FUND EXCEED TEN PERCENT (10%) OF
THE TOTAL ASSETS IN THAT FUND; (C) THE SOURCE IS AN "INVESTMENT FUND" (WITHIN
THE MEANING OF PART V(b) OF PTCE 84-14) MANAGED BY A "QUALIFIED PROFESSIONAL
ASSET MANAGER" (WITHIN THE MEANING OF PART V(a) OF PTCE 84-14) AND THE PURCHASE
IS EXEMPT UNDER PTCE 84-14; (D) YOU ARE AN "IN-HOUSE ASSET MANAGER" OR "INHAM"
(AS DEFINED IN SECTION IV(a) of PTCE 96-23) AND THE PURCHASE IS EXEMPT UNDER
PTCE 96-23; OR (E) THE SOURCE IS A SPECIFIC PLAN, YOU HAVE PROVIDED IN WRITING
TO THE TRUSTEE COMPLETE AND ACCURATE INFORMATION AS TO THE IDENTITY
A-1-1
<PAGE>
OF THAT PLAN AND THE PURCHASE IS EXEMPT UNDER ANOTHER APPLICABLE EXEMPTION.
THIS CLASS A CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS CLASS A CERTIFICATE,
AGREES THAT THIS CLASS A CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) TO THE CORPORATION, OR (2) TO A LIMITED NUMBER OF
INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE 501(a) (1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) AND IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (UPON DELIVERY OF THE DOCUMENTATION REQUIRED
BY THE POOLING AND SERVICING AGREEMENT AND, IF THE TRUSTEE SO REQUIRES, AN
OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE). EACH CLASS A CERTIFICATE OWNER
BY ACCEPTING A BENEFICIAL INTEREST IN THIS CLASS A CERTIFICATE IS DEEMED TO
REPRESENT THAT IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT). THIS CLASS A CERTIFICATE
WILL NOT BE ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON PRESENTATION OF
EVIDENCE SATISFACTORY TO THE TRANSFER AGENT AND REGISTRAR THAT THE RESTRICTIONS
ON TRANSFER SET FORTH IN THE POOLING AND SERVICING AGREEMENT AND THE CERTIFICATE
PURCHASE AGREEMENT HAVE BEEN COMPLIED WITH.
No. A-___ CUSIP 336913AA6
FIRST USA CONSUMER LOAN GRANTOR TRUST 1996-A,
CLASS A CERTIFICATE
Evidencing an undivided interest in a trust, the corpus of which
consists of certain unsecured consumer installment loan contracts originated by
First USA Federal Savings Bank and other assets and interests constituting the
trust under the Pooling and Servicing Agreement described below.
(Not an interest in or a recourse obligation of First USA Federal
Savings Bank or First USA Securitization Corporation, or any affiliate
thereof.)
This certifies that ______________________________ (the "Class A
Certificateholder") is the registered owner of a fractional undivided interest
in the First USA Consumer Loan Grantor Trust 1996-A (the "Trust") created
pursuant to the Pooling and Servicing Agreement dated as of December __, 1996
(the "Agreement"; such term to include any amendment thereto) between First USA
Securitization Corporation, as Transferor (the "Transferor"), First USA Federal
Savings Bank, as Servicer (the "Servicer"), and Bankers Trust (Delaware), as
Trustee (the "Trustee") and separately as collateral agent (the "Collateral
Agent"). The corpus of the Trust consists of all of the
A-1-2
<PAGE>
Transferor's right, title and interest in a portfolio of unsecured consumer
installment loan contracts originated by the Servicer (the "Receivables"), all
monies due or to become due with respect thereto and all proceeds of such
Receivables.
Subject to the terms and conditions of the Agreement (including the
availability of funds for distributions) and until the obligations created by
the Agreement shall have terminated in accordance therewith, there will be
distributed on the 15th day of each month or, if such 15th day is not a Business
Day, the next succeeding Business Day (the "Distribution Date"), commencing on
January 15, 1997, to the Person in whose name this Class A Certificate is
registered at the close of business on the preceding Record Date, such Class A
Certificateholder's share of amounts on deposit in the Class A Distribution
Account distributable to Class A Certificateholders on such Distribution Date.
Distributions on this Class A Certificate will be made by the Trustee
or by the Paying Agent on behalf of the Trustee by wire transfer to an account
or accounts designated by the Holder of this Class A Certificate by written
notice given to the Trustee not less than five Business Days prior to the
related Distribution Date, without the presentation or surrender of this Class A
Certificate or the making of any notation hereon. Except as otherwise provided
in the Agreement and notwithstanding the above, the final distribution of
principal and interest on this Class A Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Class A Certificate at the office or offices specified in
the notice of such final distribution delivered by the Trustee pursuant to the
Agreement.
This Class A Certificate does not purport to summarize 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, at the expense of the requesting party, by
writing to the Trustee at 1001 Jefferson Street, Suite 550, Wilmington, Delaware
19801. To the extent not defined herein, the capitalized terms used herein have
the meanings ascribed to them in the Agreement. This Class A Certificate is one
of a Class of Certificates entitled "First USA Consumer Loan Grantor Trust 1996-
A, Class A Certificates" (the "Class A Certificates") that will be issued
concurrently with a Class of Certificates entitled "First USA Consumer Loan
Grantor Trust 1996-A, Class B Certificates," and a Class of Certificates
entitled "First USA Consumer Loan Grantor Trust 1996-A, Class C Certificates".
Each Class A Certificate represents a fractional undivided interest in the
Trust, and is issued under and is subject to the terms, provisions and
conditions of the Agreement, as amended from time to time, to which Agreement
the Class A Certificateholder by virtue of the acceptance hereof assents and by
which the Class A Certificateholder is bound. In the case of any conflict
between
A-1-3
<PAGE>
terms specified in this Class A Certificate and terms specified in the
Agreement, the terms of the Agreement shall govern.
The Class A Certificates are issuable only as registered Certificates
without coupons in denominations of $250,000 and integral multiples of $1,000 in
excess thereof. As provided in the Agreement and subject to certain limitations
therein set forth, Class A Certificates are exchangeable for new Class A
Certificates evidencing like aggregate principal amount, as requested by the
Class A Certificateholder surrendering such Class A Certificates. No service
charge may be imposed for any such exchange but the Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
In the event that the Holder of this Class A Certificate does not
surrender this Class A Certificate for cancellation within six months after the
date specified in the notice regarding the pendency of the final distribution,
the Trustee shall give a second notice with respect thereto. If within one year
after such second notice this Class A Certificate shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the Holder hereof. As
provided in the Agreement, the Trustee and the Paying Agent shall pay to the
Transferor upon request any monies held by them for the payment of principal or
interest which remains unclaimed for two years from the date of the final
Distribution Date.
The Transferor, the Servicer, the Paying Agent, the Trustee and the
Transfer Agent and Registrar, and any agent of any of them, may treat the person
in whose name this Class A Certificate is registered as the owner hereof for all
purposes, and neither the Transferor, the Servicer, the Paying Agent, the
Trustee and the Transfer Agent and Registrar, nor any agent of any of them or of
any such agent, shall be affected by notice to the contrary except in certain
circumstances described in the Agreement.
The obligations and responsibilities created by the Agreement and the
Trust created thereby with respect to the Class A Certificateholders shall
terminate upon the earlier to occur of (a) the payment to Class A
Certificateholders of all amounts required to be paid to them pursuant to the
Agreement and (b) the Trust Termination Date. The Servicer may, at its option,
purchase the corpus of the Trust at a price specified in the Agreement, and such
purchase of the Receivables and other property of the Trust will effect early
retirement of the Class A Certificates; however, such right of purchase is
exercisable only as of the Record Date immediately preceding any Distribution
Date as of which the Pool Balance is equal to or less than 5% of the Initial
Pool Balance.
THIS CLASS A CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
A-1-4
<PAGE>
Unless the authentication hereon shall have been executed by an
authorized officer of the Trustee or an authenticating agent acting on behalf of
the Trustee, by manual signature, this Class A Certificate shall not entitle the
holder hereof to any benefit under the Agreement or be valid for any purpose.
A-1-5
<PAGE>
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in
its individual capacity, has caused this Class A Certificate to be duly
executed.
FIRST USA CONSUMER LOAN
GRANTOR TRUST 1996-A
By: BANKERS TRUST (DELAWARE),
By: __________________________
Authorized Officer
This is one of the Class A Certificates referred to
in the within-mentioned Agreement.
BANKERS TRUST (DELAWARE),
not in its individual
capacity but solely
as Trustee
By: _______________________________
Authorized Officer
or
___________________________________
as Authenticating Agent
for the Trustee
By: _______________________________
Authorized Officer
A-1-6
<PAGE>
EXHIBIT A-2
-----------
[FORM OF CLASS B CERTIFICATE]
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF FIRST
USA SECURITIZATION CORPORATION ("THE CORPORATION") THE TRUST AND THE
TRUSTEE THAT, WITH RESPECT TO THE SOURCE OF FUNDS TO BE USED BY YOU TO
PURCHASE THIS CLASS B CERTIFICATE (THE "SOURCE") EITHER: (i) THE SOURCE IS
NOT ASSETS OF AN "EMPLOYEE BENEFIT PLAN" (WITHIN THE MEANING OF SECTION 3
(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA')) THAT IS SUBJECT TO TITLE I OF ERISA OR AN INDIVIDUAL RETIREMENT
ARRANGEMENT OR PLAN THAT IS SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"); OR (II) YOU ARE AN
INSURANCE COMPANY AND EITHER (A) YOU ARE AUTHORIZED TO DO BUSINESS UNDER
THE LAWS OF MORE THAN ONE STATE AND THE SOURCE IS YOUR "INSURANCE COMPANY
GENERAL ACCOUNT" AS DESCRIBED IN PROHIBITED TRANSACTION EXEMPTION 95-60,
AND THE AMOUNT OF THE RESERVES FOR THE CONTRACT(S) HELD BY OR ON BEHALF OF
ANY PLAN (DETERMINED UNDER SECTION 807(d) OF THE CODE), TOGETHER WITH THE
AMOUNT OF THE RESERVES FOR THE CONTRACTS HELD BY OR ON BEHALF OF OTHER
PLANS (DETERMINED UNDER SECTION 807(d) OF THE CODE) MAINTAINED BY THE SAME
EMPLOYER OR AFFILIATE THEREOF OR BY THE SAME EMPLOYEE ORGANIZATION, IN THE
GENERAL ACCOUNT DO NOT EXCEED 10% OF THE TOTAL OF ALL LIABILITIES OF THE
GENERAL ACCOUNT; (B) THE SOURCE IS A "GOVERNMENTAL PLAN" (WITHIN THE
MEANING OF SECTION 3(32) OF ERISA); (C) THE SOURCE IS AN "INSURANCE COMPANY
POOLED SEPARATE ACCOUNT" (WITHIN THE MEANING OF DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 90-1) AND THERE IS NO PLAN
(TREATING AS A SINGLE PLAN ALL PLANS MAINTAINED BY THE SAME EMPLOYER OR
EMPLOYEE ORGANIZATION) WHOSE ASSETS IN SUCH POOLED SEPARATE ACCOUNT EXCEED
TEN PERCENT (10%) OF THE TOTAL ASSETS IN THAT ACCOUNT; (D) THE SOURCE IS AN
"INVESTMENT FUND" (WITHIN THE MEANING OF PART V(b) OF PTCE 84-14); MANAGED
BY A "QUALIFIED PROFESSIONAL ASSET MANAGER" (WITHIN THE MEANING OF PART
V(a) OF PTCE 84-14) AND THE PURCHASE IS EXEMPT UNDER PTCE 84-14; OR (E) THE
SOURCE IS A SPECIFIC PLAN, YOU HAVE PROVIDED IN WRITING TO THE TRUSTEE
COMPLETE AND ACCURATE INFORMATION AS TO THE IDENTITY OF THAT PLAN AND THE
PURCHASE IS EXEMPT UNDER ANOTHER APPLICABLE EXEMPTION; OR (iii) YOU ARE AN
ENTITY OTHER THAN AN INSURANCE COMPANY AND EITHER (A) THE SOURCE IS A
"GOVERNMENTAL PLAN" (WITHIN THE MEANING OF SECTION 3(32) OF ERISA); (B) THE
SOURCE IS A "COLLECTIVE INVESTMENT FUND MAINTAINED BY A BANK" (WITHIN THE
MEANING OF PTCE 91-38) AND THERE IS NO PLAN (TREATING AS A SINGLE PLAN ALL
EMPLOYEE BENEFIT PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE
ORGANIZATION) WHOSE ASSETS IN SUCH BANK COLLECTIVE INVESTMENT FUND EXCEED
TEN PERCENT (10%) OF THE TOTAL ASSETS IN THAT FUND; (C) THE SOURCE IS AN
"INVESTMENT FUND" (WITHIN THE MEANING OF PART V(b) OF
A-2-1
<PAGE>
PTCE 84-14) MANAGED BY A "QUALIFIED PROFESSIONAL ASSET MANAGER" (WITHIN THE
MEANING OF PART V(a) OF PTCE 84-14) AND THE PURCHASE IS EXEMPT UNDER PTCE
84-14; (D) YOU ARE AN "IN-HOUSE ASSET MANAGER" OR "INHAM" (AS DEFINED IN
SECTION IV(a) of PTCE 96-23) AND THE PURCHASE IS EXEMPT UNDER PTCE 96-23;
OR (E) THE SOURCE IS A SPECIFIC PLAN, YOU HAVE PROVIDED IN WRITING TO THE
TRUSTEE COMPLETE AND ACCURATE INFORMATION AS TO THE IDENTITY OF THAT PLAN
AND THE PURCHASE IS EXEMPT UNDER ANOTHER APPLICABLE EXEMPTION.
THIS CLASS B CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS CLASS B
CERTIFICATE, AGREES THAT THIS CLASS B CERTIFICATE MAY BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT
AND OTHER APPLICABLE LAWS AND ONLY (1) TO THE CORPORATION, OR (2) TO A
LIMITED NUMBER OF INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE
501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) AND IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (UPON
DELIVERY OF THE DOCUMENTATION REQUIRED BY THE POOLING AND SERVICING
AGREEMENT AND, IF THE TRUSTEE SO REQUIRES, AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE). EACH CLASS B CERTIFICATE OWNER BY ACCEPTING
A BENEFICIAL INTEREST IN THIS CLASS B CERTIFICATE IS DEEMED TO REPRESENT
THAT IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT). THIS CLASS B
CERTIFICATE WILL NOT BE ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE TRANSFER AGENT AND REGISTRAR
THAT THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AND SERVICING
AGREEMENT AND THE CERTIFICATE PURCHASE AGREEMENT HAVE BEEN COMPLIED WITH.
No. B-___ CUSIP 336913AB4
FIRST USA CONSUMER LOAN GRANTOR TRUST 1996-A,
CLASS B CERTIFICATE
Evidencing an undivided interest in a trust, the corpus of which
consists of certain unsecured consumer installment loan contracts
originated by First USA Federal Savings Bank and other assets and interests
constituting the trust under the Pooling and Servicing Agreement described
below.
(Not an interest in or a recourse obligation of First USA Federal
Savings Bank or First USA Securitization Corporation, or any
affiliate thereof.)
A-2-2
<PAGE>
This certifies that ____________________ __________ (the "Class
B Certificateholder") is the registered owner of a fractional undivided
interest in the First USA Consumer Loan Grantor Trust 1996-A (the "Trust")
created pursuant to the Pooling and Servicing Agreement dated as of
December __, 1996 (the "Agreement"; such term to include any amendment
thereto) between First USA Securitization Corporation, as Transferor (the
"Transferor"), First USA Federal Savings Bank, as Servicer (the
"Servicer"), and Bankers Trust (Delaware), as Trustee (the "Trustee") and
separately as collateral agent (the "Collateral Agent"). The corpus of the
Trust consists of all of the Transferor's right, title and interest in a
portfolio of unsecured consumer installment loan contracts originated by
the Servicer (the "Receivables"), all monies due or to become due with
respect thereto and all proceeds of such Receivables.
Subject to the terms and conditions of the Agreement (including
the availability of funds for distributions) and until the obligations
created by the Agreement shall have terminated in accordance therewith,
there will be distributed on the 15th day of each month or, if such 15th
day is not a Business Day, the next succeeding Business Day (the
"Distribution Date"), commencing on January 15, 1997, to the Person in
whose name this Class B Certificate is registered at the close of business
on the preceding Record Date, such Class B Certificateholder's share of
amounts on deposit in the Class B Distribution Account distributable to
Class B Certificateholders on such Distribution Date.
Distributions on this Class B Certificate will be made by the
Trustee or by the Paying Agent on behalf of the Trustee by wire transfer to
an account or accounts designated by the Holder of this Class B Certificate
by written notice given to the Trustee not less than five Business Days
prior to the related Distribution Date, without the presentation or
surrender of this Class B Certificate or the making of any notation hereon.
Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution of principal and interest on this Class B
Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Class B
Certificate at the office or offices specified in the notice of such final
distribution delivered by the Trustee pursuant to the Agreement.
This Class B Certificate does not purport to summarize 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
A-2-3
<PAGE>
from the Trustee, at the expense of the requesting party, by writing to the
Trustee at 1001 Jefferson Street, Suite 550, Wilmington, Delaware 19801. To
the extent not defined herein, the capitalized terms used herein have the
meanings ascribed to them in the Agreement. This Class B Certificate is one
of a Class of Certificates entitled "First USA Consumer Loan Grantor Trust
1996-A, Class B Certificates" (the "Class B Certificates") that will be
issued concurrently with a Class of Certificates entitled "First USA
Consumer Loan Grantor Trust 1996-A, Class A Certificates," and a Class of
Certificates entitled "First USA Consumer Loan Grantor Trust 1996-A, Class
C Certificates". Each Class B Certificate represents a fractional undivided
interest in the Trust, and is issued under and is subject to the terms,
provisions and conditions of the Agreement, as amended from time to time,
to which Agreement the Class B Certificateholder by virtue of the
acceptance hereof assents and by which the Class B Certificateholder is
bound. In the case of any conflict between terms specified in this Class B
Certificate and terms specified in the Agreement, the terms of the
Agreement shall govern.
The Class B Certificates are issuable only as registered
Certificates without coupons in denominations of $250,000 and integral
multiples of $1,000 in excess thereof. As provided in the Agreement and
subject to certain limitations therein set forth, Class B Certificates are
exchangeable for new Class B Certificates evidencing like aggregate
principal amount, as requested by the Class B Certificateholder
surrendering such Class B Certificates. No service charge may be imposed
for any such exchange but the Transfer Agent and Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith.
In the event that the Holder of this Class B Certificate does not
surrender this Class B Certificate for cancellation within six months after
the date specified in the notice regarding the pendency of the final
distribution, the Trustee shall give a second notice with respect thereto.
If within one year after such second notice this Class B Certificate shall
not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the Holder hereof. As provided in the Agreement, the Trustee and
the Paying Agent shall pay to the Transferor upon request any monies held
by them for the payment of principal or interest which remains unclaimed
for two years from the date of the final Distribution Date.
A-2-4
<PAGE>
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not
in its individual capacity, has caused this Class B Certificate to be duly
executed.
FIRST USA CONSUMER LOAN
GRANTOR TRUST 1996-A
By: BANKERS TRUST (DELAWARE),
By: _____________________________
Authorized Officer
This is one of the Class B Certificates referred to
in the within-mentioned Agreement.
BANKERS TRUST (DELAWARE),
not in its individual
capacity but solely
as Trustee
By: _______________________________
Authorized Officer
or
___________________________________
as Authenticating Agent
for the Trustee
By: _______________________________
Authorized Officer
A-2-6
<PAGE>
EXHIBIT A-3
-----------
[FORM OF CLASS C CERTIFICATE]
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF FIRST
USA SECURITIZATION CORPORATION (THE "CORPORATION") THE TRUST AND THE
TRUSTEE THAT, WITH RESPECT TO THE SOURCE OF FUNDS TO BE USED BY YOU TO
PURCHASE THIS CLASS C CERTIFICATE (THE "SOURCE") EITHER: (i) THE SOURCE IS
NOT ASSETS OF AN "EMPLOYEE BENEFIT PLAN" (WITHIN THE MEANING OF SECTION
3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA")) THAT IS SUBJECT TO TITLE I OF ERISA OR AN INDIVIDUAL RETIREMENT
ARRANGEMENT OR PLAN THAT IS SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"); OR (ii) YOU ARE AN
INSURANCE COMPANY AND EITHER (A) YOU ARE AUTHORIZED TO DO BUSINESS UNDER
THE LAWS OF MORE THAN ONE STATE AND THE SOURCE IS YOUR "INSURANCE COMPANY
GENERAL ACCOUNT" AS DESCRIBED IN PROHIBITED TRANSACTION EXEMPTION 95-60,
AND THE AMOUNT OF THE RESERVES FOR THE CONTRACT(S) HELD BY OR ON BEHALF OF
ANY PLAN (DETERMINED UNDER SECTION 807(d) OF THE CODE), TOGETHER WITH THE
AMOUNT OF THE RESERVES FOR THE CONTRACTS HELD BY OR ON BEHALF OF OTHER
PLANS (DETERMINED UNDER SECTION 807(d) OF THE CODE) MAINTAINED BY THE SAME
EMPLOYER OR AFFILIATE THEREOF OR BY THE SAME EMPLOYEE ORGANIZATION, IN THE
GENERAL ACCOUNT DO NOT EXCEED 10% OF THE TOTAL OF ALL LIABILITIES OF THE
GENERAL ACCOUNT; (B) THE SOURCE IS A "GOVERNMENTAL PLAN" (WITHIN THE
MEANING OF SECTION 3(32) OF ERISA); (C) THE SOURCE IS AN "INSURANCE COMPANY
POOLED SEPARATE ACCOUNT" (WITHIN THE MEANING OF DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 90-1) AND THERE IS NO PLAN
(TREATING AS A SINGLE PLAN ALL PLANS MAINTAINED BY THE SAME EMPLOYER OR
EMPLOYEE ORGANIZATION) WHOSE ASSETS IN SUCH POOLED SEPARATE ACCOUNT EXCEED
TEN PERCENT (10%) OF THE TOTAL ASSETS IN THAT ACCOUNT; (D) THE SOURCE IS AN
"INVESTMENT FUND" (WITHIN THE MEANING OF PART V(b) OF PTCE 84-14); MANAGED
BY A "QUALIFIED PROFESSIONAL ASSET MANAGER" (WITHIN THE MEANING OF PART
V(a) OF PTCE 84-14) AND THE PURCHASE IS EXEMPT UNDER PTCE 84-14; OR (E) THE
SOURCE IS A SPECIFIC PLAN, YOU HAVE PROVIDED IN WRITING TO THE TRUSTEE
COMPLETE AND ACCURATE INFORMATION AS TO THE IDENTITY OF THAT PLAN AND THE
PURCHASE IS EXEMPT UNDER ANOTHER APPLICABLE EXEMPTION; OR (iii) YOU ARE AN
ENTITY OTHER THAN AN INSURANCE COMPANY AND EITHER (A) THE SOURCE IS A
"GOVERNMENTAL PLAN" (WITHIN THE MEANING OF SECTION 3(32) OF ERISA); (B) THE
SOURCE IS A "COLLECTIVE INVESTMENT FUND MAINTAINED BY A BANK" (WITHIN THE
MEANING OF PTCE 91-38) AND THERE IS NO PLAN (TREATING AS A SINGLE PLAN ALL
EMPLOYEE BENEFIT PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE
ORGANIZATION) WHOSE ASSETS IN SUCH BANK COLLECTIVE INVESTMENT FUND EXCEED
TEN PERCENT (10%) OF THE TOTAL ASSETS IN THAT FUND; (C) THE SOURCE IS AN
"INVESTMENT FUND" (WITHIN THE MEANING OF PART V(b) OF
A-3-1
<PAGE>
PTCE 84-14) MANAGED BY A "QUALIFIED PROFESSIONAL ASSET MANAGER" (WITHIN THE
MEANING OF PART V(a) OF PTCE 84-14) AND THE PURCHASE IS EXEMPT UNDER PTCE
84-14; (D) YOU ARE AN "IN-HOUSE ASSET MANAGER" OR "INHAM" (AS DEFINED IN
SECTION IV(a) of PTCE 96-23) AND THE PURCHASE IS EXEMPT UNDER PTCE 96-23;
OR (E) THE SOURCE IS A SPECIFIC PLAN, YOU HAVE PROVIDED IN WRITING TO THE
TRUSTEE COMPLETE AND ACCURATE INFORMATION AS TO THE IDENTITY OF THAT PLAN
AND THE PURCHASE IS EXEMPT UNDER ANOTHER APPLICABLE EXEMPTION.
THIS CLASS C CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS CLASS C
CERTIFICATE, AGREES THAT THIS CLASS C CERTIFICATE MAY BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT
AND OTHER APPLICABLE LAWS AND ONLY (1) TO THE CORPORATION, OR (2) TO A
LIMITED NUMBER OF INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE
501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) AND IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (UPON
DELIVERY OF THE DOCUMENTATION REQUIRED BY THE POOLING AND SERVICING
AGREEMENT AND, IF THE TRUSTEE SO REQUIRES, AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE). EACH CLASS C CERTIFICATE OWNER BY ACCEPTING
A BENEFICIAL INTEREST IN THIS CLASS C CERTIFICATE IS DEEMED TO REPRESENT
THAT IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT). THIS CLASS C
CERTIFICATE WILL NOT BE ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE TRANSFER AGENT AND REGISTRAR
THAT THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AND SERVICING
AGREEMENT AND THE CERTIFICATE PURCHASE AGREEMENT HAVE BEEN COMPLIED WITH.
A-3-2
<PAGE>
No. C-___
FIRST USA CONSUMER LOAN GRANTOR TRUST 1996-A,
CLASS C CERTIFICATE
Evidencing an undivided interest in a trust, the corpus of which
consists of certain unsecured consumer installment loan contracts
originated by First USA Federal Savings Bank and other assets and interests
constituting the trust under the Pooling and Servicing Agreement described
below.
(Not an interest in or a recourse obligation of First USA Federal
Savings Bank or First USA Securitization Corporation, or any
affiliate thereof.)
This certifies that ____________________ __________ (the "Class
C Certificateholder") is the registered owner of a fractional undivided
interest in the First USA Consumer Loan Grantor Trust 1996-A (the "Trust")
created pursuant to the Pooling and Servicing Agreement dated as of
December __, 1996 (the "Agreement"; such term to include any amendment
thereto) between First USA Securitization Corporation, as Transferor (the
"Transferor"), First USA Federal Savings Bank, as Servicer (the
"Servicer"), and Bankers Trust (Delaware), as Trustee (the "Trustee") and
separately as collateral agent (the "Collateral Agent"). The corpus of the
Trust consists of all of the Transferor's right, title and interest in a
portfolio of unsecured consumer installment loan contracts originated by
the Servicer (the "Receivables"), all monies due or to become due with
respect thereto and all proceeds of such Receivables.
Subject to the terms and conditions of the Agreement (including
the availability of funds for distributions) and until the obligations
created by the Agreement shall have terminated in accordance therewith,
there will be distributed on the 15th day of each month or, if such 15th
day is not a Business Day, the next succeeding Business Day (the
"Distribution Date"), commencing on January 15, 1997, to the Person in
whose name this Class C Certificate is registered at the close of business
on the preceding Record Date, such Class C Certificateholder's share of
amounts on deposit in the Class C Distribution Account distributable to
Class C Certificateholders on such Distribution Date.
Distributions on this Class C Certificate will be made by the
Trustee or by the Paying Agent on behalf of the Trustee by wire transfer to
an account or accounts designated by the Holder of this Class C Certificate
by written notice given to the Trustee not less than five Business Days
prior to the related Distribution Date,
A-3-3
<PAGE>
without the presentation or surrender of this Class C Certificate or the
making of any notation hereon. Except as otherwise provided in the
Agreement and notwithstanding the above, the final distribution of
principal and interest on this Class C Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Class C Certificate at the office or
offices specified in the notice of such final distribution delivered by the
Trustee pursuant to the Agreement.
This Class C Certificate does not purport to summarize 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, at the
expense of the requesting party, by writing to the Trustee at 1001
Jefferson Street, Suite 550, Wilmington, Delaware 19801. To the extent not
defined herein, the capitalized terms used herein have the meanings
ascribed to them in the Agreement. This Class C Certificate is one of a
Class of Certificates entitled "First USA Consumer Loan Grantor Trust 1996-
A, Class C Certificates" (the "Class C Certificates") that will be issued
concurrently with a Class of Certificates entitled "First USA Consumer Loan
Grantor Trust 1996-A, Class A Certificates," and a Class of Certificates
entitled "First USA Consumer Loan Grantor Trust 1996-A, Class B
Certificates". Each Class C Certificate represents a fractional undivided
interest in the Trust, and is issued under and is subject to the terms,
provisions and conditions of the Agreement, as amended from time to time,
to which Agreement the Class C Certificateholder by virtue of the
acceptance hereof assents and by which the Class C Certificateholder is
bound. In the case of any conflict between terms specified in this Class C
Certificate and terms specified in the Agreement, the terms of the
Agreement shall govern.
The Class C Certificates are issuable only as registered
Certificates without coupons in denominations of $250,000 and integral
multiples of $1,000 in excess thereof. As provided in the Agreement and
subject to certain limitations therein set forth, Class C Certificates are
exchangeable for new Class C Certificates evidencing like aggregate
principal amount, as requested by the Class C Certificateholder
surrendering such Class C Certificates. No service charge may be imposed
for any such exchange but the Transfer Agent and Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith.
A-3-4
<PAGE>
In the event that the Holder of this Class C Certificate does not
surrender this Class C Certificate for cancellation within six months after
the date specified in the notice regarding the pendency of the final
distribution, the Trustee shall give a second notice with respect thereto.
If within one year after such second notice this Class C Certificate shall
not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the Holder hereof. As provided in the Agreement, the Trustee and
the Paying Agent shall pay to the Transferor upon request any monies held
by them for the payment of principal or interest which remains unclaimed
for two years from the date of the final Distribution Date.
The Transferor, the Servicer, the Paying Agent, the Trustee and
the Transfer Agent and Registrar, and any agent of any of them, may treat
the person in whose name this Class C Certificate is registered as the
owner hereof for all purposes, and neither the Transferor, the Servicer,
the Paying Agent, the Trustee and the Transfer Agent and Registrar, nor any
agent of any of them or of any such agent, shall be affected by notice to
the contrary except in certain circumstances described in the Agreement.
The obligations and responsibilities created by the Agreement and
the Trust created thereby with respect to the Class C Certificateholders
shall terminate upon the earlier to occur of (a) the payment to Class C
Certificateholders of all amounts required to be paid to them pursuant to
the Agreement and (b) the Trust Termination Date. The Servicer may, at its
option, purchase the corpus of the Trust at a price specified in the
Agreement, and such purchase of the Receivables and other property of the
Trust will effect early retirement of the Class C Certificates; however,
such right of purchase is exercisable only as of the Record Date
immediately preceding any Distribution Date as of which the Pool Balance is
equal to or less than 5% of the Initial Pool Balance.
THIS CLASS C CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
Unless the authentication hereon shall have been executed by an
authorized officer of the Trustee or an authenticating agent acting on
behalf of the Trustee, by manual signature, this Class C Certificate shall
not entitle the holder hereof to any benefit under the Agreement or be
valid for any purpose.
A-3-5
<PAGE>
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not
in its individual capacity, has caused this Class C Certificate to be duly
executed.
FIRST USA CONSUMER LOAN
GRANTOR TRUST 1996-A
By: BANKERS TRUST (DELAWARE),
By: ___________________________
Authorized Officer
This is one of the Class C Certificates referred to
in the within-mentioned Agreement.
BANKERS TRUST (DELAWARE),
not in its individual
capacity but solely
as Trustee
By: ______________________________
Authorized Officer
or
___________________________________
as Authenticating Agent
for the Trustee
By: ______________________________
Authorized Officer
A-3-6
<PAGE>
EXHIBIT B
FIRST USA CONSUMER LOAN GRANTOR TRUST 1996-A
--------------------------------------------
First USA Consumer Loan Grantor Trust 1996-A
___% Consumer Loan Pass-Through Certificates, Class A
___% Consumer Loan Pass-Through Certificates, Class B
___% Consumer Loan Pass-Through Certificates, Class C
MONTHLY SERVICER CERTIFICATE REPORT
-----------------------------------
Monthly Period __ Beginning Date __________
Monthly __ End Date __________
Related Determination Date __________
Related Distribution Date __________
I. Available Amount in the Collection Amount.
A. Credits
1. Payments from Obligors Applied to Collection
Period
a. Principal Payments $______
b. Recovery of Advance $______
c. Other Interest Payments $______
d. Total (Lines a thru c) $______
2. Repurchase Amount from Repurchased Receivables
a. Principal Payments $______
b. Recovery of Advance $______
c. Other Interest Payments $______
d. Total (Lines a thru c) $______
3. Reversal from Defaulted Contracts $______
4. Recovery of Defaulted Receivables $______
5. Investment Earnings on Collection Account $______
6. Net Adjustments $______
7. Advance by Servicer $______
8. Overpayment from Obligors $______
9. Total Credits $______
B. Debits
1. Overpayments from Obligors $______
2. Recovery Amount Before Cut-
Off Date to Transferor $______
B-1
<PAGE>
3. Reversal from Defaulted Contracts $______
4. Reimbursement of Advance $______
a. From Payments of Non-Defaulted
Receivables $______
b. From Recovery of Defaulted
Receivables $______
c. Total (Lines a thru b) $______
5. Total Debits (Lines 1 thru 4) $______
C. Total Available Amount (Lines A - B) $______
II. Defaulted Receivables Information for Collection
Period
A. Principal ______$
B. Advanced Interest ______$
C. Interest Not Advanced ______$
D. Total (Lines A thru C) ______$
III. Pool Balance Reduction Allocation for Collection
Period
A. Pool Balance Reduction
1. Available Principal
a. From Repurchased Receivables $______
b. Principal Payment $______
c. Total (Lines a thru b) $______
2. From Defaulted Receivables $______
3. Total (Lines 1 thru 3) $______
B. Allocation
1. Percentage Allocation
a. Class A Percentage _____%
b. Class B Percentage _____%
c. Class C Percentage _____%
2. Monthly Principal Allocation
a. Class A $_____
b. Class B $_____
c. Class C $_____
IV. Scheduled Monthly Disbursements
A. Return of Advances to Servicer $_____
B. Servicing Fee To Servicer
B-2
<PAGE>
1. Monthly Servicing Fee $______
2. Overdue Monthly Servicing Fee $______
3. Total (Lines 1 thru 2) $______
C. Class A Interest Distributable Amount
1. Class A Monthly Interest $______
2. Class A Interest Carryover
Shortfall $______
3. Total (Lines 1 thru 2) $______
D. Class B Interest Distributable Amount
1. Class B Monthly Interest $______
2. Class B Interest Carryover
Shortfall $______
3. Total (Lines 1 thru 2) $______
E. Class C Interest Distributable Amount
1. Class C Monthly Interest $______
2. Class C Interest Carryover
Shortfall $______
3. Total (Lines 1 thru 2) $______
F. Class A Principal Distributable Amount
1. Class A Monthly Principal $______
2. Class A Principal Carryover
Shortfall $______
3. Total (Lines 1 thru 2) $______
G. Class B Principal Distributable Amount
1. Class B Monthly Principal $______
2. Class B Principal Carryover
Shortfall $______
3. Total (Lines 1 thru 2) $______
H. Class C Principal Distributable Amount
1. Class C Monthly Principal $______
2. Class C Principal Carryover
Shortfall $______
3. Total (Lines 1 thru 2) $______
I. Deposit to Spread Account $______
J. Total (Lines A thru I) $______
B-3
<PAGE>
V. Available Amounts
A. Available Interest
1. Collections on Receivables $_______
2. Servicer Advances $_______
3. Repurchase Amount $_______
4. Recoveries $_______
5. Total (Lines 1 thru 4) $_______
B. Available Principal
1. Collections on Receivables $_______
2. Repurchase Amount $_______
3. Total (Lines 1 thru 2) $_______
C. Available Spread Account Amount
1. Amount on Deposit in Spread
Account $_______
2. Required Spread Account Amount $_______
Account
3. Available Spread Account
Amount (Min. lines 1 and 2) $_______
VI. Return of Advances
A. Available Interest (Line V A 5 above) $_______
B. Available Spread Account Amount
(Line V C 3 above) $_______
C. Total (Lines A thru B) $_______
VII. Servicing Fee Available Funds
A. Available Interest (minus Line VI A $_______
above)
B. Available Spread Account (minus Line VI
B above) $_______
C. Total (Lines A thru B) $_______
VIII. Class A Interest Available Funds
A. Available Interest (minus Lines VI A and
VII A above) $_______
B. Class C Percentage of Available Principal $_______
C. Class B Percentage of Available Principal $_______
D. Available Spread Account Amount (minus
VI B and VII B above) Lines $_______
E. Total (Lines A thru D) $_______
IX. Class B Interest Available Funds
B-4
<PAGE>
A. Available Interest (minus L ines VI A, VII A
and VIII A above) $______
B. Class C Percentage of Available Principal
(minus Lines VIII B above) $______
C. Total (lines A thru B) $______
X. Class C Interest Available Funds
A. Available Interest (minus Lines VI A, VII A
VIII A and IX A above) $______
XI. Class A Principal Available Funds
A. Available Interest (minus Lines VI A, VII A,
VIII A and IX A above) $______
B. Available Principal (minus Lines VIII B and C
and IX B above) $______
C. Available Spread Account Amount (minus Lines
VI B, VII B and VIII D) $______
D. Total (Lines A thru C) $______
XII. Available Funds Remaining
A. Available Interest (minus Lines VI A, VII A,
VIII A, IX A and X A above) $______
B. Available Principal (minus Lines VIII B and
C, IX B and XI B above) $______
C. Total (lines A thru B) $______
XIII. Spread Account Withdrawal
A. Amount Required For Return of Advances
(Line VI A) $______
B. Amount Required For Servicing Fee Available
Funds (Line VII B) $______
C. Amount Required For Class A Interest
Available Funds (Line VIII D) $______
D. Amount Required For Class B Interest
Available Funds (Line XI C) $______
E. Total Amount Required (sum of Lines A - D) $______
F. Available Spread Account Amount $______
G. Total Withdrawal (Lessor of Line E and F) $______
XIV. Disbursements from Collection Account Including Spread
Account Withdrawal
A. Return of Advances $______
B. Monthly Servicing Fee and Overdue
Servicing Fee $______
C. Class A Interest Distributable Amount $______
D. Class B Interest Distributable Amount $______
E. Class C Interest Distributable Amount $______
F. Class A Principal Distributable Amount $______
B-5
<PAGE>
G. Class B Principal Distributable Amount $______
H. Class C Principal Distributable Amount $______
I. Deposit to Spread Account $______
XV. Shortfall Amounts for Current Monthly Period (to be
applied during next Monthly Period)
A. Overdue Monthly Servicing Fee $______
B. Class A Interest Carryover Shortfall $______
C. Class B Interest Carryover Shortfall $______
D. Class C Interest Carryover Shortfall $______
E. Class A Principal Carryover Shortfall $______
F. Class B Principal Carryover Shortfall $______
G. Class C Principal Carryover Shortfall $______
H. Total (Lines A thru G) $______
XVI. Delinquency Information
A. Delinquency Information
[First USA to Confirm]
<TABLE>
<CAPTION>
DELINQUENCY UNITS DELINQUENCY AMOUNTS PRINCIPAL
- ----------- ----- ------------------- ---------
<S> <C> <C> <C>
30 - 59 Day 0 $______ $______
60 - 89 Day 0 $______ $______
90 - 119 Day 0 $______ $______
120 - 149 Day 0 $______ $______
150 - 179 Day 0 $______ $______
180 - 209 Day 0 $______ $______
210 - 239 Day 0 $______ $______
240 - Day 0
============= ===== ============ ========
Total 0 $______ $______
</TABLE>
B. Aggregate Loss $______
C. Delinquency Ratio (expressed as a percentage)
1. Outstanding Principal Balance for
Delinquency >=60 Days $______
2. Average Pool Balance $______
3. Delinquency Ratio (Lines 1/2) _____%
XVII. Average Delinquency Ratio
A. Sum of Delinquency Ratios for immediately
preceding three Monthly Periods _____%
B-6
<PAGE>
B. Average Delinquency Ratio (Line A/3) _____%
XVIII. Default Ratio (expressed as a percentage)
A. Aggregate Loss - Recoveries $______
B. Average Pool Balance $______
C. Default Ratio (Lines A/B) _____%
XIX. Average Default Ratio
A. Sum of Default Ratios for immediately
preceding three Monthly Periods _____%
B. Average Default Ratio (Line XVIII A
divided by 3) _____%
XX. Required Spread Account Amount for Next
Collection Period
A. Required Spread Account Amount
a. Delinquency Ratio _____%
b. Average Delinquency Ratio _____%
c. Default Ratio _____%
d. Average Default Ratio _____%
e. Required Spread Account Percentage _____%
f. Initial Pool Balance $______
g. Required Spread Account
Amount (Lines e x f) $______
XXI. Available Spread Account Amount for Next
Distribution Date
A. Spread Account Balance After Deposit
1. Available Spread Account Amount
After Disbursement and Deposit from
Previous Distribution Date $______
2. Spread Account Withdrawal $______
3. Investment Earnings from Spread
Account $______
4. Deposit to Spread Account After
Disbursement $______
4(a)Monthly Excess Interest $______
4(b)Class C Interest Distributable
Amount $______
5. Amount After Deposit (Line 1 - 2 +
3 + 4) $______
B. Required Spread Account Amount $______
C. Available Spread Account Amount (Min. Lines A
and B) $______
XXII. Reimbursed Advance
B-7
<PAGE>
A. From Payment in Collection Account $______
B. From Spread Account $______
C. Total (Lines A thru B) $______
XXIII. Excess Amount on Deposit In The Spread Account To
Be Distributed To Transferor
A. Spread Account Balance after Deposit $______
B. Available Spread Account Amount $______
C. Excess Amount to Seller (Lines A - B) $______
I Certify That The Information in This Report is Correct
First USA Federal Savings Bank
By: ___________________________
Name: _________________________
Title: ________________________
B-8
<PAGE>
FROM: First USA Savings Bank
TO: Bankers Trust (Delaware)
MONTHLY CERTIFICATEHOLDER'S REPORT STATEMENT
--------------------------------------------
Collection Period __ Beginning Date __/__/19__
Collection Period __ End Date __/__/19__
Determination Date __/__/19__
Distribution Date __/__/19__
I. Monthly Principal to Certificateholders
(Per $1000 of Original Principal Amount)
A. Class A $_____
B. Class B $_____
C. Class C $_____
II. Monthly Interest to Certificateholders
(Per $1000 of Original Principal Amount)
A. Class A $_____
B. Class B $_____
C. Class C $_____
III. Servicing Fee to Servicer
A. Monthly Servicing Fee $_____
B. Overdue Monthly Servicing Fee $_____
C. Total Servicing Fee $_____
IV. Pool Factor Information
A. Certificate Principal Balance
1. Class A $_____
2. Class B $_____
3. Class C $_____
B. Initial Certificate Balance
1. Class A $_____
2. Class B $_____
3. Class C $_____
C. Pool Factor (Lines A/B)
1. Class A $_____
2. Class B $_____
3. Class C $_____
V. Pool Balance Information
A. Pool Balance
B-1
<PAGE>
1. As of first day of Monthly Period $______
2. As of last day of Monthly Period $______
B. Average Pool Balance for Monthly Period $______
VI. Aggregate Loss for Collection Period $______
VII. Carryover Shortfall Information
A. Principal Carryover Shortfall
1. Class A $______
2. Class B $______
3. Class C $______
B. Interest Carryover Shortfall
1. Class A $______
2. Class B $______
3. Class C $______
VIII. Spread Account Balance After Disbursement $______
IX. Required Spread Account Balance as of Distribution
Date $______
X. Aggregate Repurchase Amount for Monthly Period $______
XI. Unreimbursed Advance Summary
A. From Prior Period $______
B. From Current Period $______
C. Change in Amount Between Periods (Lines B-A) $______
D. Amount reimbursed from collections and
withdrawals from the Spread Account $______
XII. Aggregate Collections from Obligors
A. Allocated to Interest $______
B. Allocated to Principal $______
XIII. Aggregate Repurchase Amount
A. Allocated to Interest $______
B. Allocated to Principal $______
XIV. Aggregate Recoveries $______
XV. Available Spread Account Amount for next Distribution Date $______
XVI. Default Ratio _____%
B-2
<PAGE>
XVII. Delinquency Ratio _____%
XVIII. Monthly Excess Interest ______$
XIX. Delinquency Profile
<TABLE>
<CAPTION>
DELINQUENCY UNITS DELINQUENCY AMOUNTS PRINCIPAL
- ----------- ----- ------------------- ---------
<S> <C> <C> <C>
30 - 59 Day 0 $______ $______
60 - 89 Day 0 $______ $______
90 - 119 Day 0 $______ $______
120 - 149 Day 0 $______ $______
150 - 179 Day 0 $______ $______
180 - 209 Day 0 $______ $______
210 - 239 Day 0 $______ $______
240 - Day 0
============= ===== ============ =========
Total 0 $______ $______
</TABLE>
XX. Weighted Average Yield of Receivables _____%
XXI. Weighted Average Maturity of Receivables ______
XXII.Principal Prepayments $______
B-3
<PAGE>
EXHIBIT C
FORM OF ANNUAL SERVICER'S CERTIFICATE
FIRST USA FEDERAL SAVINGS BANK
_____________________________________________
FIRST USA CONSUMER LOAN GRANTOR TRUST 1996-A
_______________________________________________
The undersigned, a duly authorized representative of First USA Federal
Savings Bank (the "Bank"), as Servicer pursuant to the Pooling and Servicing
Agreement dated as of December 17, 1996, (the Pooling and Servicing Agreement")
by and among First USA Securitization Corporation as Transferor (the
"transferor"), the Bank as Servicer (the "Servicer") and Bankers Trust
(Delaware) as Trustee (the "Trustee") and separately as Collateral Agent (the
"Collateral Agent") does hereby certify that:
1. The Bank is Servicer under the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and
Servicing Agreement to execute and deliver this Certificate to the Trustee.
3. This Certificate is delivered pursuant to section 3.8. of the
Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during (the period from
the Closing Date until) the twelve month period ended) __________ ____, ____ was
conducted under our supervision.
5. Based on such review, the Servicer has to the best of our
knowledge, fully performed all its obligations under the Pooling and Servicing
Agreement throughout such period and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph 6
below.
6. The following is a description of each default in the performance
of the Servicer's obligations under the provisions of the Pooling and Servicing
Agreement known to us to have been made during such period which sets forth in
detail (i) the nature of each such default, (ii) the action taken by the
Servicer, if any, to remedy each such default and (iii) the current status of
each such default:
C-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this ____ day of __________, ____.
______________________________
Name:
Title: Vice President
C-2
<PAGE>
EXHIBIT D-1
-----------
Trustee's Certificate
pursuant to the
Pooling and Servicing Agreement
Pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of December 3, 1996, among First USA
Securitization Corporation, as Transferor (the "Transferor"), First USA Federal
Savings Bank, as Servicer (the "Servicer"), Bankers Trust (Delaware), as trustee
(the "Trustee") and separately as collateral agent (the "Collateral Agent")
creating the First USA Consumer Loan Grantor Trust 1996-A, the Trustee does
hereby sell, transfer, assign, and otherwise convey to the Transferor, without
recourse, representation, or warranty, all of the Trustee's right, title, and
interest in and to all of the Receivables (as defined in the Pooling and
Servicing Agreement) identified in the attached Servicer's Certificate as
"Repurchased Receivables," which were repurchased by the Transferor pursuant to
Section [either 2.6 or 11.2] of the Pooling and Servicing Agreement and all
security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this ____ day of
______, 19__.
_________________________________________
Authorized Signatory
D-1-1
<PAGE>
EXHIBIT D-2
-----------
Trustee's Certificate
pursuant to the
Pooling and Servicing Agreement
Pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of December 3, 1996, among First USA
Securitization Corporation, as Transferor (the "Transferor"), First USA Federal
Savings Bank, as Servicer (the "Servicer"), Bankers Trust (Delaware), as trustee
(the "Trustee") and separately as collateral agent (the "Collateral Agent")
creating the First USA Consumer Loan Grantor Trust 1996-A, the Trustee does
hereby sell, transfer, assign, and otherwise convey to the Servicer, without
recourse, representation, or warranty, all of the Trustee's right, title, and
interest in and to all of the Receivables (as defined in the Pooling and
Servicing Agreement) identified in the attached Servicer's Certificate as
"Repurchased Receivables," which were repurchased by the Transferor pursuant to
Section 3.5 of the Pooling and Servicing Agreement and all security and
documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this ____ day of
______, 19__.
___________________________________
Authorized Signatory
D-2-1
<PAGE>
EXHIBIT E
[DATE]
First USA Securitization Corporation
Three Christina Centre
201 North Walnut Street
15th Floor
Wilmington, Delaware 19801
Bankers Trust (Delaware)
1001 Jefferson Street
Suite 550
Wilmington, Delaware 19801
Re: First USA Consumer Loan Grantor Trust 1996-A Certificates, Class [_]
--------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $_________ in principal amount
of First USA Consumer Loan Grantor Trust 1996-A Certificates, Class [_] (the
"Certificates"), we confirm that:
1. We have received a copy of the Pooling and Servicing Agreement dated
as of December 3, 1996 (the "Pooling and Servicing Agreement") among First USA
Securitization Corporation, as Transferor, First USA Federal Savings Bank, as
Servicer and Bankers Trust (Delaware), as Trustee and such other information and
documentation as we deem necessary in order to make our investment decision.
2. We agree to be bound by the restrictions and conditions set forth in
the Pooling and Servicing Agreement relating to the Certificates and agree to be
bound by, and not reoffer, resell, pledge or otherwise transfer (any such act, a
"Transfer") the Certificates except in compliance with, such restrictions and
conditions including but not limited to those in Section 6.3 of the Pooling and
Servicing Agreement.
3. We understand that the Certificates have not been and will not be
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state securities law and agree that the Certificates may be reoffered,
resold, pledged or otherwise transferred only in compliance with the Securities
Act and other applicable laws and only (i) to the Transferor or (ii) to a
limited number of institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and in a transaction exempt
from the registration requirements of the Securities Act (upon delivery of the
documentation required by the Pooling and Servicing Agreement
E-1
<PAGE>
and, if the Trustee so requires, an opinion of counsel satisfactory to the
Trustee).
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3), or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Certificates, and we
and any account for which we are acting are each able to bear the economic risk
of our or its investment.
5. We are acquiring each of the Certificates purchased by us for our own
account or for a single account (each of which is an institutional "accredited
investor") as to which we exercise sole investment discretion.
6. With respect to the source of funds to be used by us to purchase the
Certificates (the "Source") either:
(i) the Source is not assets of an "employee benefit plan" (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) that is subject to Title I of ERISA or an
individual retirement arrangement or plan that is subject to Section 4975
of the Internal Revenue Code of 1986, as amended (the "Code") (each, a
"Plan"); or
(ii) you are an insurance company and either (A) you are authorized to
do business under the laws of more than one state and the Source is your
"insurance company general account" as described in Prohibited Transaction
Exemption 95-60, and the amount of the reserves for the contract(s) held by
or on behalf of any Plan (determined under Section 807(d) of the Code),
together with the amount of the reserves for the contracts held by or on
behalf of other Plans (determined under Section 807(d) of the Code)
maintained by the same employer or affiliate thereof or by the same
employee organization, in the general account do not exceed 10% of the
total of all liabilities of the general account; (B) the Source is a
"governmental plan" (within the meaning of Section 3(32) of ERISA); (C) the
Source is an "insurance company pooled separate account" (within the
meaning of Department of Labor Prohibited Transaction Class Exemption
("PTCE") 90-1) and there is no Plan (treating as a single Plan all Plans
maintained by the same employer or employee organization) whose assets in
such pooled separate account exceed ten percent (10%) of the total assets
in that account; (D) the Source is an "investment fund" (within the meaning
of Part V(b) of PTCE 84-14); managed by a "qualified professional asset
manager" (within the meaning of Part V(a) of PTCE 84-14) and the purchase
is exempt under PTCE 84-14; or (E) the Source is a specific Plan, you have
provided in writing to the Trustee complete and accurate information as to
the identity
E-2
<PAGE>
of that Plan and the purchase is exempt under another applicable exemption;
or
(iii) you are an entity other than an insurance company and either
(A) the Source is a "governmental plan" (within the meaning of Section
3(32) of ERISA); (B) the Source is a "collective investment fund maintained
by a bank" (within the meaning of PTCE 91-38) and there is no Plan
(treating as a single plan all employee benefit plans maintained by the
same employer or employee organization) whose assets in such bank
collective investment fund exceed ten percent (10%) of the total assets in
that fund; (C) the Source is an "investment fund" (within the meaning of
Part V(b) of PTCE 84-14) managed by a "qualified professional asset
manager" (within the meaning of Part V(a) of PTCE 84-14) and the purchase
is exempt under PTCE 84-14; (D) you are an "in-house asset manager" or
"INHAM" (as defined in Section IV(a) of PTCE 96-23) and the purchase is
exempt under PTCE 96-23; or (E) the Source is a specific Plan, you have
provided in writing to the Trustee complete and accurate information as to
the identity of that plan and the purchase is exempt under another
applicable exemption.
7. We understand that any purported Transfer of any Certificate in
contravention of the restrictions and conditions in paragraphs 1 through 6 above
shall be null and void and the purported transferee shall not be recognized by
the Trust or any other person as a Certificateholder for any purpose.
8. We further understand that, on any proposed resale, pledge or transfer
of any Certificates we will be required to furnish to the Trustee and the
Transfer Agent and Registrar, such certification and other information as the
Trustee or the Registrar may reasonably require to confirm that the proposed
sale complies with the foregoing restrictions and with the restrictions and
conditions of the Certificates and the Pooling and Servicing Agreement pursuant
to which the Certificates were issued and we agree that if we determine to
Transfer any Certificate, we will cause our proposed transferee to provide the
Transferor and the Trustee with a letter substantially in the form of this
letter. We further understand that Certificates purchased by us will bear a
legend to the foregoing effect.
9. The person signing this letter on behalf of the ultimate beneficial
purchaser of the Certificates has been fully authorized by such beneficial
purchaser of the Certificates to do so.
10. The Certificates purchased by us should be registered in the name and
issued in the denominations set forth on Schedule 1 hereto. All payments on the
Certificates held by us should be wired to us in accordance with the
instructions set forth on Schedule 1 hereto unless we otherwise notify the
Transferor, the Servicer and the Trustee in writing.
E-3
<PAGE>
You are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
[NAME OF TRANSFEREE]
By: ______________________
Name:
Title:
E-4
<PAGE>
Schedule 1
----------
Registration and Payment Instruction
------------------------------------
Registration Instructions:
- -------------------------
Full Legal Name of Purchaser:__________________________________
Number and Denomination of Certificates:___________________________
_______________________
Payment Instructions:
- --------------------
Name of Bank: ______________________________
Address of Bank: ______________________________
Account Name: ______________________________
Account Number: ______________________________
ABA Number: ______________________________
Reference: ______________________________
E-5
