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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) JUNE 25, 1998
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FIRST USA BANK
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(Exact name of registrant as specified in its charter)
(ORIGINATOR OF THE FIRST USA CREDIT CARD MASTER TRUST)
DELAWARE 333-24227 76-0039224
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or Identification Number)
organization)
201 NORTH WALNUT STREET, WILMINGTON, DELAWARE 19801
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(Address of principal executive offices) (Zip Code)
302/594-4117
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Registrant's telephone number, including area code
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
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Item 5. Other Events
On June 25, 1998, First USA Bank (the "Bank"), a wholly owned
subsidiary of First USA Financial, Inc., which is a wholly owned subsidiary of
Banc One Corporation, completed the securitization of approximately $963,856,000
of credit card receivables. The securitization consists of First USA Credit Card
Master Trust Series 1998-3.
Series 1998-3 consists of $800,000,000 Class A Floating Rate Asset
Backed Certificates, and $72,289,000 Class B Floating Rate Asset Backed
Certificates, each of which has an average life of approximately three years.
Series 1998-3 also consists of $91,567,000 Excess Collateral, which will be
subordinated to the Class A and Class B certificates and will provide credit
enhancement for the benefit of certificateholders.
First USA 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 Statement, Pro Forma Financial Information and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits
1.1 Underwriting Agreement of First USA Credit Card Master Trust, Series
1998-3 dated as of June 18, 1998, between First USA Bank and Credit Suisse First
Boston Corporation, as Representative of the Underwriters set forth herein.
99.1 Series 1998-3 Supplement, dated as of June 25, 1998, to the Pooling
and Servicing Agreement, dated as of September 1, 1992, between First USA Bank,
as Transferor and Servicer, and The Bank of New York (Delaware), as Trustee.
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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.
FIRST USA BANK
As Servicer
By: /s/ TRACIE H. KLEIN
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Tracie H. Klein
Vice President
Date: July 8, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
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<C> <S> <C>
1.1 Underwriting Agreement of First USA Credit Card Master
Trust, Series 1998-3, dated as of June 18, 1998, between
First USA Bank and Credit Suisse First Boston Corporation,
as Representative of the Underwriters set forth therein.
99.1 Series 1998-3 Supplement, dated as of June 25, 1998, to
the Pooling and Servicing Agreement, dated as of September
1, 1992, between First USA Bank, as Transferor and
Servicer, and The Bank of New York (Delaware), as Trustee.
</TABLE>
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First USA Credit Card Master Trust
Class A Floating Rate Asset Backed Certificates,
Series 1998-3
Class B Floating Rate Asset Backed Certificates,
Series 1998-3
UNDERWRITING AGREEMENT
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June 18, 1998
Credit Suisse First Boston Corporation,
as Representative of the
Underwriters set forth herein
Eleven Madison Avenue
New York, New York 10010
Ladies and Gentlemen:
First USA Bank, a Delaware chartered banking corporation (the
"Bank"), has duly authorized the issuance and sale to Credit Suisse First Boston
----
Corporation (the "Representative"), Banc One Capital Markets, Inc., Bear,
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Stearns & Co., Inc., First Chicago Capital Markets, Inc. and Salomon Brothers
Inc, as underwriters (collectively with the Representative, the "Underwriters"
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and each individually, an "Underwriter") of First USA Credit Card Master Trust
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$800,000,000 aggregate principal amount of Class A Floating Rate Asset Backed
Certificates, Series 1998-3 (the "Class A Certificates") and of First USA Credit
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Card Master Trust $72,289,000 aggregate principal amount of Class B Floating
Rate Asset Backed Certificates, Series 1998-3 (the "Class B Certificates" and,
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together with the Class A Certificates, the "Certificates"). The Certificates
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will be issued pursuant to a Pooling and Servicing Agreement dated as of
September 1, 1992, as amended as of the date hereof (the "Master Pooling and
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Servicing Agreement"), as supplemented by the Series 1998-3 Supplement, dated as
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of the Closing Date (the "Supplement" and, together with the Master Pooling and
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Servicing Agreement, the "Pooling and Servicing Agreement"), each by and between
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the Bank, as transferor and servicer, and The Bank of New York (Delaware), a
Delaware banking corporation, as trustee (in such capacity, the "Trustee").
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Each Certificate will represent an undivided interest in
certain assets of First USA Credit Card Master Trust (the "Trust"). The property
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of the Trust will include, among other things, receivables (the "Receivables")
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arising under certain MasterCard(R) and VISA(R)1 revolving credit card accounts
(the "Accounts").
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Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement.
1. Representations, Warranties and Agreements of the
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Bank. The Bank represents and warrants to, and agrees with, the
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Underwriters as follows:
(a) The Bank has filed with the Securities and
Exchange Commission (the "Commission"), on Form S-3, a registration statement
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(Registration No. 333-24227) pursuant to Rule 415 under the Securities Act of
1933, as amended (such act, the "Act"). The Bank may have filed one or more
amendments thereto each of which amendments has previously been furnished to
each of the Underwriters. The Bank will also file with the Commission a
prospectus supplement in accordance with Rule 424(b) under the Act. As filed,
the registration statement, including any amendments thereto, the form of
prospectus supplement, and any prospectuses or prospectus supplements filed
pursuant to Rule 424(b) under the Act relating to the Certificates shall, except
to the extent that the Underwriters shall agree in writing to a modification, be
in all substantive respects in the form furnished to the Representative prior
to the Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes
(beyond that contained in the latest preliminary prospectus supplement which has
previously been furnished to the Under writers) as the Bank has advised the
Underwriters, prior to the Execution Time, will be included or made therein.
For purposes of this Agreement, "Effective Time" means the
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date and time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission, and "Effective Date" means the date of the Effective Time. Such
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registration statement, as amended at the Effective Time, and including the
exhibits thereto and any material incorporated by reference therein (including
any
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(1) VISA(R) and MasterCard(R) are registered trademarks of Visa
USA Incorporated and MasterCard International
Incorporated, respectively.
2
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Computational Materials, ABS Term Sheets, Structural Term Sheets and Collateral
Term Sheets (as defined in Section 3(b) hereof) filed on Form 8-K), is
hereinafter referred to as the "Registration Statement," and any prospectus
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supplement (the "Prospectus Supplement") relating to the Certificates, as filed
---------------------
with the Commission pursuant to and in accordance with Rule 424(b) ("Rule
----
424(b)") under the Act is, together with the prospectus filed as part of the
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Registration Statement (such prospectus, in the form it appears in the
Registration Statement or in the form most recently revised and filed with the
Commission pursuant to Rule 424(b) being hereinafter referred to as the "Basic
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Prospectus"), hereinafter referred to as the "Prospectus". "Execution Time"
- ---------- ---------- --------------
shall mean the date and time that this Agreement is executed and delivered by
the parties hereto.
(b) On the Effective Date and on the date of this
Agreement, the Registration Statement did or will, and, when the Prospectus was
first filed and on the Closing Date, the Prospectus did or will, comply in all
material respects with the applicable requirements of the Act and the rules and
regulations of the Commission under the Act (the "Rules and Regulations"); on
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the Effective Date, the Registration Statement did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Prospectus did not or will not include any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Bank makes no representation
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or warranty as to the information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with information
furnished in writing to the Bank by the Underwriters specifically for use in
connection with preparation of the Registration Statement or the Prospectus.
(c) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i) there
has not been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, management, financial condition, stockholders' equity, results of
operations, regulatory status or business prospects of the Bank and (ii) the
Bank has not entered into any transaction or agreement (whether or not in the
ordinary course of business) material to the Bank that, in either case, would
reasonably be expected to materially adversely affect the interests of the
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holders of the Certificates, otherwise than as set forth or contemplated in the
Prospectus.
(d) The Bank is duly organized, validly existing
and in good standing as a banking corporation under the laws of the State of
Delaware and is qualified to transact business in and is in good standing under
the laws of each state in which its activities require such qualification, and
has full power, authority and legal right to own its properties and conduct its
business as such properties are presently owned and such business is presently
conducted, and to execute, deliver and perform its obligations under this
Agreement, the Pooling and Servicing Agreement, the Certificates and the
Transfer and Administration Agreement, dated as of the Closing Date (the
"Transfer and Administration Agreement"), between the Bank and Bankers Trust
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(Delaware), a Delaware banking corporation, not in its individual capacity but
solely as Owner Trustee on behalf of the First USA Secured Note Trust 1998-3 (in
such capacity, the "Owner Trustee").
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(e) This Agreement has been duly authorized and
validly executed and delivered by the Bank.
(f) The Pooling and Servicing Agreement has been
duly authorized and, when executed and delivered by the Bank and assuming the
due authorization, execution and delivery thereof by the Trustee, will
constitute a valid and binding obligation of the Bank enforceable against the
Bank in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is pursuant to a proceeding in equity or at
law). As of the Closing Date, the Pooling and Servicing Agreement will have been
duly and validly executed by the Bank and will conform in all material respects
to the description thereof contained in the Prospectus.
(g) The Certificates have been duly and validly
authorized by all required action of the Bank, and, when duly and validly
executed by the Bank, authenticated by the Trustee and delivered in accordance
with the Pooling and Servicing Agreement, and delivered to and paid for by the
Underwriters as provided herein, will be validly issued and outstanding and
entitled to the benefits of the Pooling and Servicing Agreement. As of the
Closing Date, the Certificates will have been duly and validly executed by the
Bank, and will conform in all material respects to the descriptions thereof
contained in the Prospectus.
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(h) The Transfer and Administration Agreement has
been duly authorized, and, when executed and delivered by the Bank and assuming
the due authorization, execution and delivery thereof by the other parties
thereto, will constitute a valid and binding obligation of the Bank enforceable
against the Bank in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is pursuant to a proceeding in equity or at
law). As of the Closing Date, the Transfer and Administration Agreement will
have been validly executed by the Bank.
(i) The Receivables delivered on the Closing Date
to the Trustee pursuant to the Pooling and Servicing Agreement will conform in
all material respects with the description thereof contained in the Prospectus.
(j) Neither the transfer of the Receivables to
the Trustee, nor the issuance, sale and delivery of the Certificates, nor the
execution or delivery of this Agreement, the Transfer and Administration
Agreement or the Pooling and Servicing Agreement, nor the consummation of any of
the transactions herein or therein contemplated, nor the fulfillment of the
terms of the Certificates, the Pooling and Servicing Agreement, the Transfer and
Administration Agreement or this Agreement, will result in the breach of any
term or provision of the charter or by-laws of the Bank, or conflict with,
result in a breach, violation or acceleration of, or constitute a default under,
the terms of any indenture or other agreement or instrument to which the Bank is
a party or by which it or its properties is bound or may be affected or any
statute, order or regulation applicable to the Bank of any court, regulatory
body, administrative agency, governmental body or arbitrator having jurisdiction
over the Bank or will result in the creation of any Lien upon any property or
assets of the Bank (other than as contemplated in the Pooling and Servicing
Agreement). The Bank is not a party to, bound by, or in breach or violation of,
any indenture or other agreement or instrument, or subject to or in violation of
any statute, order or regulation of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over it, that
materially and adversely affects the ability of the Bank to perform its obliga-
tions under this Agreement, the Pooling and Servicing Agreement, the Transfer
and Administration Agreement or the Certificates.
(k) There are no charges, investigations, actions,
suits, claims or proceedings before or by any court, regulatory body,
administrative agency, governmental body or
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arbitrator now pending or, to the best knowledge of the Bank, threatened that,
separately or in the aggregate (i) could have a material adverse effect on (x)
the general affairs, business, management, financial condition, stockholders'
equity, results of operations, regulatory status or business prospects of the
Bank or (y) the ability of the Bank to perform its obligations under this
Agreement, the Transfer and Administration Agreement, the Pooling and Servicing
Agreement, or the Certificates, (ii) assert the invalidity of this Agreement,
the Transfer and Administration Agreement, the Pooling and Servicing Agreement,
or the Certificates, (iii) seek to prevent the issuance, sale or delivery of
the Certificates or any of the transactions contemplated by this Agreement, the
Transfer and Administration Agreement or the Pooling and Servicing Agreement or
(iv) seek to affect adversely the federal income tax or ERISA attributes of the
Certificates described in the Prospectus.
(l) No federal, state or local tax, including
intangibles tax or documentary stamp tax, the non-payment of which would result
in the imposition of a Lien on the Receivables or of transferee liability on the
Trustee, is imposed with respect to the conveyance of the Receivables from the
Bank to the Trust, or in connection with the issuance of the Certificates by the
Trust, or the holding of the Receivables by the Trust, or in connection with any
of the other transactions contemplated by this Agreement, the Transfer and
Administration Agreement or the Pooling and Servicing Agreement. Any taxes, fees
and other governmental charges in connection with the execution, delivery and
issuance of the Certificates or the execution and delivery of this Agreement,
the Transfer and Administration Agreement or the Pooling and Servicing Agreement
have been or will have been paid at or prior to the Closing Date.
(m) As of the Closing Date, the representations
and warranties of the Bank in the Pooling and Servicing Agreement, with regard
to itself as both transferor and servicer and the Receivables (individually and
in the aggregate), will be true and correct.
(n) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body is required for the execution, delivery and performance by the Bank of or
compliance by the Bank with this Agreement, the Transfer and Administration
Agreement, the Pooling and Servicing Agreement, or the Certificates or the
consummation of the transactions contemplated hereby or thereby except the
filing of Uniform Commercial Code financing statements with respect to the
Receivables and to the approval of the Office of the State Bank Commissioner of
the State of Delaware.
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(o) Coopers & Lybrand L.L.P. who have audited
certain financial statements of the Banc One Corporation are independent public
accountants as required by the Act and the Rules and Regulations.
(p) As of the Closing Date, the Principal Receiv-
ables transferred to the Trust pursuant to the Pooling and Servicing Agreement
will have an aggregate balance of not less than the sum of (i) the aggregate
outstanding principal amount of all classes of all Series outstanding at the
close of business on the Closing Date (including Series 1998-3), plus (ii) 7% of
----
the amount stated in clause (i).
(q) The Trust is not, and will not be as a result
of the issuance and sale of the Certificates, an "investment company" or a
company "controlled by" an investment company within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
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2. Purchase, Sale, Payment and Delivery of Certificates. On
----------------------------------------------------
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Bank agrees to
sell to the Underwriters, and the Underwriters agree, severally and not jointly,
to purchase from the Bank, on June 25, 1998 or on such other date as shall be
mutually agreed upon by the Bank and the Underwriters (the "Closing Date"), the
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number and type of Certificates set forth in Schedule A opposite the name of
each such Underwriter. The Class A Certificates being purchased by the
Underwriters hereunder are to be purchased at a purchase price equal to 99.775%
of the principal amount thereof. The Class B Certificates being purchased by the
Underwriters hereunder are to be purchased at a purchase price equal to 99.725%
of the principal amount thereof.
The closing of the sale of the Certificates (the "Closing")
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shall be held at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919
Third Avenue, New York, New York 10022, at 10:00 a.m., New York City time, on
the Closing Date. Payment of the purchase price for the Certificates being sold
and purchased hereunder shall be made on the Closing Date by wire transfer of
federal or other immediately available funds to an account to be designated one
business day prior to the Closing Date by the Bank, against delivery of the
Certificates at the Closing on the Closing Date. Each of the Certificates to be
so delivered shall be represented by one or more definitive certificates
registered in the name of Cede & Co., as nominee for The Depository Trust
Company.
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3. Offering by Underwriters. (a) It is understood that after
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the Effective Date the Underwriters propose to offer the Certificates for sale
to the public as set forth in the Prospectus.
(b) Each Underwriter may provide to prospective
investors the 1998-3 Term Sheet, dated June 17, 1998, relating to the
Certificates (the "1998-3 Term Sheet") prepared by the Bank and attached
-----------------
hereto as Exhibit A, subject to the following conditions:
(i) Such Underwriter shall have complied with the
requirements of (A) the no-action letter, dated May 20, 1994, issued by
the Commission to Kidder, Peabody Acceptance Corporation I, Kidder,
Peabody & Co. Incorporated and Kidder Structured Asset Corporation, as
made applicable to other issuers and underwriters by the Commission in
the response to the request of the Public Securities Association, dated
May 24, 1994 (collectively, the "Kidder/PSA Letter"), (B) the
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requirements of the no-action letter, dated February 17, 1995, issued
by the Commission to the Public Securities Association (the "PSA
---
Letter") and (C) the requirements of the no-action letter, dated April
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5, 1996, issued by the Commission to Greenwood Trust Company (the
"Greenwood Letter" and, together with the Kidder/PSA Letter and the PSA
----------------
Letter, the "No-Action Letters").
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(ii) Each Underwriter, severally, represents and
warrants to the Bank that (a) it has not and will not use any
information that constitutes "Computational Materials" with respect to
the offering of the Certificates unless it has obtained the prior
written consent of the Bank to such usage and (b) other than the 1998-3
Term Sheet, it has not and will not use any information that
constitutes "Series Term Sheets," "ABS Term Sheets," "Structural Term
Sheets" or "Collateral Term Sheets" with respect to the offering of the
Certificates. For purposes hereof, "Series Term Sheet" shall have the
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meaning given such term in the Greenwood Letter and "Computational
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Materials" shall have the meaning given such term in the No-Action
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Letters. For purposes hereof, "ABS Term Sheets," "Structural Term
--------------- ---------------
Sheets" and "Collateral Term Sheets" shall have the meanings given such
------ ----------------------
terms in the PSA Letter.
4. Certain Agreements of the Bank. The Bank covenants and
------------------------------
agrees with the several Underwriters as follows:
(a) Immediately following the execution of this
Agreement, the Bank will prepare a Prospectus Supplement setting
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forth the amount of Certificates covered thereby and the terms thereof not
otherwise specified in the Basic Prospectus, the price at which such
Certificates are to be purchased by the Underwriters, the initial public
offering price, the selling concessions and allowances, and such other
information as the Bank deems appropriate. The Bank will transmit the Prospectus
including such Prospectus Supplement to the Commission pursuant to Rule 424(b)
by a means reasonably calculated to result in filing that complies with all
applicable provisions of Rule 424(b). The Bank will advise the Representative
promptly of any such filing pursuant to Rule 424(b).
(b) The Bank will advise the Representative
promptly of any proposal to amend or supplement the Registration Statement or
the Prospectus and will not effect such amendment or supplement without the
consent of the Representative, which consent will not unreasonably be withheld;
the Bank will also advise the Representative promptly of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information; and the Bank will also advise
the Representative promptly of any amendment or supplement to the Registration
Statement or the Prospectus and of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threat of any proceeding for that purpose and the Bank will use
its best efforts to prevent the issuance of any such stop order and to obtain as
soon as possible the lifting of any issued stop order.
(c) If, at any time when a prospectus relating to
the Certificates is required to be delivered under the Act, any event occurs as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with the Act, the Bank promptly
will advise the Representative thereof and will prepare and file, or cause to be
prepared and filed, with the Commission an amendment or supplement which will
correct such statement or omission, or an amendment or supplement which will
effect such compliance. Any such filing shall not operate as a waiver or
limitation on any condition or right of the Underwriters hereunder.
(d) As soon as practicable, but not later than
sixteen months after the original effective date of the Registration Statement,
the Bank will cause the Trust to make generally available to Certificateholders
an earnings statement
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(or statements) of the Trust covering a period of at least twelve months
beginning after the effective date of the Registration Statement which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 promulgated
thereunder.
(e) The Bank will furnish to the Underwriters
copies of the Registration Statement (one of which will be signed and will
include all exhibits), each related preliminary prospectus or prospectus
supplement, the Prospectus and all amendments and supplements to such documents,
in each case as soon as available and in such quantities as the Underwriters
request.
(f) The Bank will promptly, from time to time,
take such action as any Underwriter may reasonably request to qualify the
Certificates for offering and sale under the securities laws of such
jurisdictions as such Underwriter may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the
Certificates, provided that in connection therewith the Bank shall not be
required to qualify as a foreign corporation or dealer in securities or to file
a general consent to service of process in any jurisdiction.
(g) For a period from the date of this Agreement
until the retirement of the Certificates, the Bank will deliver to the
Representative the annual statements of compliance and the annual independent
certified public accountants' reports furnished to the Trustee pursuant to the
Pooling and Servicing Agreement, as soon as such statements and reports are
furnished to the Trustee.
(h) So long as any of the Certificates are
outstanding, the Bank will furnish to the Representative (i) as soon as
practicable after the end of the fiscal year all documents required to be
distributed to Certificateholders or filed with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any order
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of the Commission thereunder and (ii) from time to time, any other information
concerning the Bank filed with any government or regulatory authority which is
otherwise publicly available, as the Representative reasonably requests.
(i) To the extent, if any, that the rating
provided with respect to the Certificates by the rating agency or agencies that
initially rate the Certificates is conditional upon the furnishing of documents
or the taking of any other actions by
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the Bank, the Bank shall use its best efforts to furnish such documents and take
any such other actions.
(j) The Bank will file with the Commission a
report on Form 8-K with respect to the 1998-3 Term Sheet and a report on Form
8-K setting forth all Computational Materials described in Section 3 hereof
provided to the Bank by any of the Underwriters and identified by such
Underwriter as such within the time period allotted for such filing pursuant to
the No-Action Letters.
5. Payment of Expenses. The Bank will pay all expenses
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incident to the performance of its obligations under this Agreement, including
(i) the printing of the 1998-3 Term Sheet and any Computational Materials
described in Section 3 hereof, (ii) the printing of the Prospectus and of each
amendment or supplement thereto, (iii) the preparation of this Agreement, the
Transfer and Administration Agreement and the Pooling and Servicing Agreement,
(iv) the preparation, issuance and delivery of the Certificates to the
Underwriters, (v) the fees and disbursements of the Bank's counsel and
accountants, (vi) the qualification of the Certificates under securities laws in
accordance with the provisions of Section 4(f) hereof, including filing fees and
the fees and disbursements of counsel for the Underwriters and in connection
with the preparation of any blue sky and legal investment survey, (vii) the
printing and delivery to the Underwriters of copies of the 1998-3 Term Sheet and
any Computational Materials described in Section 3 hereof, (viii) the printing
and delivery to the Underwriters of copies of the Prospectus and of each
amendment or supplement thereto, (ix) the printing and delivery to the
Underwriters of copies of any blue sky or legal investment survey prepared in
connection with the Certificates, (x) any fees charged by rating agencies for
the rating of the Certificates, (xi) the fees and expenses, if any, incurred
with respect to any filing with the National Association of Securities Dealers,
Inc. and (xii) the fees and expenses of the Trustee and its counsel. The
Underwriters have agreed to reimburse the Bank for expenses not to exceed
$218,072 incurred by the Bank in connection with the issuance and distribution
of the Certificates.
6. Conditions of the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the several Underwriters to purchase and pay for the Certificates
will be subject to the accuracy of the representations and warranties on the
part of the Bank herein, to the accuracy of the statements of officers of the
Bank made pursuant to the provisions hereof, to the performance by the Bank of
its obligations hereunder and to the following additional conditions precedent:
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(a) The Prospectus and any supplements thereto
shall have been filed (if required) with the Commission in accordance with the
Rules and Regulations and Section 1 hereof, and prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or,
to the knowledge of the Bank, shall be contemplated by the Commission or by any
authority administering any state securities or blue sky law.
(b) On or prior to the date of the Prospectus and
on or prior to the Closing Date, the Underwriters shall have received a letter
or letters, dated as of the date of the Prospectus and as of the Closing Date,
respectively, of Coopers & Lybrand L.L.P., Certified Public Accountants,
substantially in the form of the drafts to which the Representative has
previously agreed and otherwise in form and substance satisfactory to the
Representative and its counsel.
(c) Subsequent to the execution and delivery of
this Agreement, there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the business or
properties of the Trust, or the Bank which, in the judgment of the
Representative, materially impairs the investment quality of the Certificates or
makes it impractical or inadvisable to market the Certificates; (ii) any
suspension or limitation on trading in securities generally on the New York
Stock Exchange or the National Association of Securities Dealers National Market
system, or any setting of minimum prices for trading on such exchange or market
system; (iii) any suspension of trading of any securities of BANC ONE
CORPORATION on any exchange or in the over-the-counter market which materially
impairs the investment quality of the Certificates or makes it impractical or
inadvisable to market the Certificates; (iv) any banking moratorium declared by
Federal, Delaware or New York authorities; or (v) any outbreak or escalation of
major hostilities or armed conflict, any declaration of war by Congress, or any
other substantial national or international calamity or emergency if, in the
judgment of the Representative, the effect of any such outbreak, escalation,
declaration, calamity, or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Certificates.
(d) At the Closing Date, the Bank shall have
furnished to the Representative certificates of a vice president or more senior
officer of the Bank as to the accuracy of the representations and warranties of
the Bank herein at and as of the Closing Date, as to the performance by the Bank
of all of its
12
<PAGE> 13
obligations hereunder to be performed at or prior to such Closing Date, and as
to such other matters as the Representative may reasonably request.
(e) Joanne Sundheim, Associate General Counsel of
First USA Bank, shall have furnished to the Representative her written opinion,
addressed to the Representative and dated the Closing Date, in form and
substance satisfactory to the Representative and its counsel, substantially to
the effect that:
(i) The Bank has been duly incorporated and
is validly existing as a bank in good standing under the laws
of the State of Delaware with full power and authority (cor-
porate and other) to own its properties and conduct its
business, as presently owned and conducted by it, and to enter
into and perform its obligations under this Agreement, the
Transfer and Administration Agreement and the Pooling and
Servicing Agreement (collectively referred to in this
subsection (e) as the "Agreements"), and the Certificates and
----------
had at all times, and now has, the power, authority and legal
right to acquire, own and transfer the Receivables;
(ii) The Bank is duly qualified to do
business and is in good standing, and under state laws, as
they are currently interpreted and enforced, has obtained all
necessary licenses and approvals in each jurisdiction in which
failure to qualify or to obtain such licenses or approvals
would materially and adversely affect the enforceability of
any Receivable by the Bank or the Trustee or would adversely
affect the ability of the Bank to perform its obligations
under the Agreements or the Certificates;
(iii) The Certificates have been duly
authorized, executed and delivered by the Bank and, when duly
authenticated by the Trustee in accordance with the terms of
the Pooling and Servicing Agreement and delivered to and paid
for by the Underwriters in accordance with the terms of this
Agreement, will be validly issued and outstanding and entitled
to the benefits provided by the Pooling and Servicing
Agreement;
13
<PAGE> 14
(iv) Each of the Pooling and Servicing
Agreement and the Transfer and Administration Agreement has
been duly authorized, executed and delivered by the Bank and
constitutes the legal, valid and binding agreement of the Bank
enforceable against the Bank in accordance with its terms,
subject, as to enforceability, to (A) the effect of
bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation and other similar laws relating to
or affecting the rights and remedies of creditors generally,
and (B) the application of principles of equity (regardless of
whether considered and applied in a proceeding in equity or at
law) and the rights and powers of the FDIC;
(v) This Agreement has been duly authorized,
executed and delivered by the Bank;
(vi) The Trust is not now, and immediately
following the sale of the Certificates pursuant to the
Underwriting Agreement will not be, required to register under
the 1940 Act;
(vii) No consent, approval, authorization or
order of any governmental agency or body is required for (A)
the execution, delivery and performance by the Bank of its
obligations under the Agreements or the Certificates, or (B)
the issuance or sale of the Certificates, except such as have
been obtained under the Act and as may be required under
state securities or blue sky laws in connection with the
purchase and distribution of the Certificates by the Un-
derwriters and the filing of Uniform Commercial Code
financing statements with respect to the Receivables and the
approval of the Office of the State Bank Commissioner of the
State of Delaware;
(viii) To the best knowledge of such
counsel, neither the execution and delivery of the Agreements
or the Certificates by the Bank nor the performance by the
Bank of the transactions therein contemplated
14
<PAGE> 15
nor the fulfillment of the terms thereof does or will result
in any violation of any statute or regulation or any order or
decree of any court or governmental authority binding upon the
Bank or its property, or conflict with, or result in a breach
or violation of any term or provision of, or result in a
default under any of the terms and provisions of, the Bank's
charter or by-laws or any material indenture, loan agreement
or other material agreement to which the Bank is a party or by
which the Bank is bound;
(ix) To the knowledge of such counsel after
due investigation, there are no legal or governmental
proceedings pending to which the Bank is a party or to which
the Bank is subject which, individually or in the aggregate
(A) would have a material adverse effect on the ability of the
Bank to perform its obligations under the Agreements or the
Certificates, (B) assert the invalidity of the Agreements or
the Certificates, (C) seek to prevent the issuance, sale or
delivery of the Certificates or any of the transactions
contemplated by the Agreements or (D) seek to affect adversely
the federal income tax or ERISA attributes of the Certificates
described in the Prospectus;
(x) The Registration Statement and the
Prospectus (except for the financial statements, financial
schedules and other financial and operating data included
therein, as to which such counsel expresses no view) comply as
to form with the Act and the Rules and Regulations;
(xi) The Registration Statement has become
effective under the Act, and the Prospectus Supplement will be
filed with the Commission pursuant to Rule 424(b) thereunder;
and
(xii) Such counsel has not independently
verified and is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of
the information contained in the Registra-
15
<PAGE> 16
tion Statement and Prospectus. Based upon discussion with the
Bank, its accountants and others, however, no facts have come
to its attention that cause it to believe that the Prospectus
(except for the financial statements, financial schedules and
other financial and statistical data included therein, as to
which such counsel expresses no view), contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make
the statements therein not misleading.
(f) The Representative shall have received a letter
from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the Bank, to
the effect that the Representative may rely on its opinion to Moody's Investors
Service, Inc. ("Moody's") Standard & Poor's Ratings Services, a division of The
-------
McGraw-Hill Companies, Inc.("Standard & Poor's"), and Fitch IBCA, Inc. with
-----------------
respect to certain bank regulatory matters.
(g) The Representative shall have received an opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Bank,
addressed to the Representative, dated the Closing Date and satisfactory in form
and substance to the Representative and its counsel, to the effect that the
Certificates will be treated as indebtedness for Federal income tax purposes and
for Delaware income tax purposes.
(h) The Representative shall have received from
Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, such
opinion or opinions, dated the Closing Date, substantially to the effect that:
(i) Each of the Pooling and Servicing
Agreement and the Transfer and Administration Agreement
(collectively referred to in this subsection (h) as the
"Agreements") constitutes the valid and binding obligation of
----------
the Bank, enforceable against the Bank in accordance with its
terms, except (x) to the extent that the enforceability
thereof may be limited by (a) bankruptcy, insolvency,
receivership, reorganization, moratorium or other similar
16
<PAGE> 17
laws now or hereafter in effect relating to creditors' rights
generally and the rights of creditors of Delaware chartered
banks as the same may be applied in the event of the
bankruptcy, insolvency, receivership, reorganization,
moratorium or other similar event in respect of the Bank, (b)
general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity) and (c) the qualification that certain of the remedial
provisions of the Agreements may be unenforceable in whole or
in part, but the inclusion of such provisions does not affect
the validity of the Agreements taken as a whole, and the
Agreements, together with applicable law, contain adequate
provisions for the practical realization of the benefits of
the security created thereby and (y) such counsel expresses no
opinion as to the enforceability of any rights to contribution
or indemnification which are violative of public policy
underlying any law, rule or regulation;
(ii) The Certificates, when executed and
authenticated in accordance with the terms of the Pooling and
Servicing Agreement and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be duly and
validly issued and outstanding and will be entitled to the
benefits of the Pooling and Servicing Agreement;
(iii) This Agreement has been duly
authorized, executed and delivered by the Bank;
(iv) Neither the execution, delivery or
performance by the Bank of the Agreements or this Agreement,
nor the compliance by the Bank with the terms and provisions
thereof or hereof, will contravene any provision of any
applicable law;
(v) Based on such counsel's review of
applicable laws, no governmental approval, which has not been
obtained or taken and is not in full force and effect, is
required to authorize or is required in
17
<PAGE> 18
connection with the execution, delivery or performance of the
Agreements by the Bank;
(vi) The Certificates, the Pooling and
Servicing Agreement and this Agreement conform in all material
respects to the descriptions thereof contained in the Pro-
spectus;
(vii) The Pooling and Servicing Agreement is
not required to be qualified under the Trust Indenture Act of
1939, as amended, and the Trust is not required to be
registered under the 1940 Act;
(viii) The statements in the Prospectus
under the heading "Certain Legal Aspects of the Receivables",
to the extent that they constitute matters of law or legal
conclusions with respect thereto, have been reviewed by such
counsel and are correct in all material respects; and
(ix) Each of the Registration Statement, as
of its effective date, and the Prospectus, as of its date,
appeared on its face to be appropriately responsive in all
material respects to the requirements of the Act and the
General Rules and Regulations under the Act, except that in
each case such counsel expresses no opinion as to the
financial data included therein or excluded therefrom or the
exhibits to the Registration Statement, and such counsel does
not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
Statement and the Prospectus.
Such opinion shall also state that such counsel has
participated in conferences with officers and representatives of the Bank,
counsel for the Bank, representatives of the independent accountants of the Bank
and the Underwriters at which the contents of the Prospectus and related matters
were discussed and, although such counsel need not pass upon, and need not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Prospectus and shall have made no independent check
or
18
<PAGE> 19
verification thereof, except for those made under the caption "Certain Legal
Aspects of the Receivables" to the extent set forth in paragraph (viii) above,
on the basis of the foregoing, no facts shall have come to such counsel's
attention that shall have led such counsel to believe that the Prospectus, as of
its date, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that such
counsel need not express an opinion or belief with respect to the financial
statements, schedules and other financial information included in such
Prospectus or excluded therefrom.
(i) McGuire, Woods, Battle & Boothe,
L.L.P., counsel for The Bank of New York, a New York banking corporation
("BONY"), in connection with the Agency Agreement, dated as of December 4, 1995,
----
between BONY and the Trustee (the "Agency Agreement"), and counsel for the
----------------
Trustee, shall have furnished to the Representative its written opinion,
addressed to the Representative and dated the Closing Date, in form and
substance satisfactory to the Representative and its counsel, substantially to
the effect that:
(i) BONY is a banking corporation duly
organized, validly existing and in good standing under the
laws of the State of New York and has the corporate power and
authority to execute, deliver and perform its obligations
under the Agency Agreement;
(ii) The Certificates have been duly
authenticated by BONY pursuant to the Agency Agreement and in
accordance with the Pooling and Servicing Agreement;
(iii) The Trustee is a banking corporation
duly organized, validly existing and in good standing under
the laws of the State of Delaware and has the corporate power
and authority to execute, deliver and perform its obligations
under the Pooling and Servicing Agreement;
(iv) Each of the Supplement and the Class A
Interest Rate Swap has been duly authorized, executed and
delivered by the
19
<PAGE> 20
Trustee, and each of the Pooling and Servicing Agreement and
the Class A Interest Rate Swap constitutes a legal, valid and
binding agreement of the Trustee, enforceable against the
Trustee in accordance with its terms, except (x) as may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights of
creditors generally (as such laws would apply in the event of
the insolvency, receivership, conservatorship or
reorganization of, or other similar occurrence with respect
to, the Trustee), (y) that the enforceability of the Pooling
and Servicing Agreement against the Trustee may be subject to
the application of general principles of equity (regardless of
whether considered or applied in a proceeding in equity or at
law), and (z) that certain remedial provisions of the Pooling
and Servicing Agreement may be unenforceable, in whole or in
part against the Trustee, but the inclusion of such provisions
does not affect the validity of the Pooling and Servicing
Agreement, taken as a whole, and the Pooling and Servicing
Agreement, together with applicable law, contains adequate
provisions for the practical realization of the benefits of
the security provided thereby. Such counsel expresses no
opinion as to the enforceability of any rights to contribution
or indemnification that are violative of public policy
underlying any law, rule or regulation;
(v) The execution and delivery by the
Trustee of the Supplement and the Class A Interest Rate Swap,
and the performance by the Trustee of its obligations under
the Pooling and Servicing Agreement and the Class A Interest
Rate Swap, do not conflict with or result in a violation of
(x) any law or regulation of the United States of America or
the State of Delaware governing the banking or trust
activities of the Trustee or (y) the amended and restated
articles of association or by-laws of the Trustee; and
(vi) The execution and delivery by the
Trustee of the Supplement and the Class
20
<PAGE> 21
A Interest Rate Swap and the performance by the Trustee of its
obligations under the Pooling and Servicing Agreement and the
Class A Interest Rate Swap, do not require any approval,
authorization or other action by, or filing with, any
governmental authority of the United States of America or the
State of Delaware having jurisdiction over the banking or
trust activities of the Trustee, except such as have been
obtained, taken or made.
(j) Richards, Layton & Finger, counsel
for the Owner Trust in connection with the Transfer and Administration Agreement
and the Indenture, shall have furnished to the Representative its written
opinion, addressed to the Representative and dated the Closing Date, in form
and substance satisfactory to the Representative and its counsel, substantially
to the effect that:
(i) The Owner Trust is a business trust duly
formed, validly existing and in good standing under the laws
of the State of Delaware and has the power and authority to
execute, deliver and perform its obligations under the
Transfer and Administration Agreement and the Indenture;
(ii) The Transfer and Administration
Agreement, the Indenture and the secured notes issued by the
Owner Trust pursuant to the Indenture (the "Notes") have been
-----
duly authorized, executed and delivered by the Owner Trust,
and the Transfer and Administration Agreement, the Indenture
and the Notes constitute legal, valid and binding agreements
of the Owner Trust, enforceable against the Owner Trust in
accordance with their respective terms, except (x) as may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights of
creditors generally (as such laws would apply in the event of
the insolvency, receivership, conservatorship or
reorganization of, or other similar occurrence with respect
to, the Owner Trustee), (y) that the enforceability of the
Transfer and Administration Agreement, the Indenture and the
Notes against the Owner
21
<PAGE> 22
Trust may be subject to the application of general principles
of equity (regardless of whether considered or applied in a
proceeding in equity or at law), and (z) that certain remedial
provisions of the Transfer and Administration Agreement and
the Indenture may be unenforceable, in whole or in part
against the Owner Trust, but the inclusion of such provisions
does not affect the validity of the Transfer and
Administration Agreement and the Indenture, taken as a whole,
and the Transfer and Administration Agreement, together with
applicable law, contains adequate provisions for the practical
realization of the benefits of the security provided thereby.
Such counsel expresses no opinion as to the enforceability of
any rights to contribution or indemnification that are
violative of public policy underlying any law, rule or
regulation;
(iii) The execution and delivery by the
Owner Trust of the Transfer and Administration Agreement, the
Indenture and the Notes and the performance by the Owner Trust
of its obligations under the Transfer and Administration
Agreement, the Indenture and the Notes do not conflict with or
result in a violation of (x) any law or regulation of the
State of Delaware applicable to the Owner Trust, or (y) the
Trust Agreement; and
(iv) The execution and delivery by the Owner
Trust of the Transfer and Administration Agreement, the
Indenture and the Notes and the performance by the Owner
Trustee of its obligations under the Transfer and
Administration Agreement, the Indenture and the Notes do not
require any approval, authorization or other action by, or
filing with, any governmental authority of the State of
Delaware having jurisdiction over the Owner Trust, except such
as have been obtained, taken or made.
(k) Richards, Layton & Finger, counsel
for the Owner Trustee in connection with the Trust Agreement, shall have
furnished to the Representative its written opinion, addressed to the
Representative and
22
<PAGE> 23
dated the Closing Date, in form and substance satisfactory to the Representative
and its counsel, substantially to the effect that:
(i) The Owner Trustee is a banking
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the
corporate power and authority to execute, deliver and perform
its obligations under the Trust Agreement;
(ii) The Trust Agreement has been duly
authorized, executed and delivered by the Owner Trustee, and
the Trust Agreement constitutes a legal, valid and binding
agreement of the Owner Trustee, enforceable against the Owner
Trustee in accordance with its terms, except (x) as may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights of
creditors generally (as such laws would apply in the event of
the insolvency, receivership, conservatorship or
reorganization of, or other similar occurrence with respect
to, the Owner Trustee), (y) that the enforceability of the
Trust Agreement against the Owner Trustee may be subject to
the application of general principles of equity (regardless of
whether considered or applied in a proceeding in equity or at
law), and (z) that certain remedial provisions of the Trust
Agreement may be unenforceable, in whole or in part against
the Owner Trustee, but the inclusion of such provisions does
not affect the validity of the Trust Agreement, taken as a
whole, and the Trust Agreement, together with applicable law,
contains adequate provisions for the practical realization of
the benefits of the security provided thereby. Such counsel
expresses no opinion as to the enforceability of any rights to
contribution or indemnification that are violative of public
policy underlying any law, rule or regulation;
(iii) The execution and delivery by the
Owner Trustee of the Trust Agreement, and the performance by
the Owner
23
<PAGE> 24
Trustee of its obligations under the Trust Agreement, do not
conflict with or result in a violation of (x) any law or
regulation of the United States of America or the State of
Delaware governing the banking or trust activities of the
Owner Trustee, or (y) the organizational documents of the
Owner Trustee; and
(iv) The execution and delivery by the Owner
Trustee of the Trust Agreement and the performance by the
Owner Trustee of its obligations under the Trust Agreement do
not require any approval, authorization or other action by, or
filing with, any governmental authority of the United States
of America or the State of Delaware having jurisdiction over
the banking or trust activities of the Owner Trustee, except
such as have been obtained, taken or made.
(l) The Counsel for the Class A Swap
Counterparty in connection with the Class A Interest Rate Swap shall have
furnished to the Representative its written opinion, addressed to the
Representative and dated the Closing Date, in form and substance satisfactory to
the Representative and its counsel, substantially to the effect that:
(i) The Class A Swap Counterparty is duly
organized, validly existing and in good standing under the
laws of its jurisdiction of formation and has the power and
authority to execute, deliver and perform its obligations
under the Class A Interest Rate Swap;
(ii) The Class A Interest Rate Swap has been
duly authorized, executed and delivered by the Class A
Interest Rate Swap Counterparty, and the Class A Interest Rate
Swap constitutes a legal, valid and binding agreement of the
Class A Interest Rate Swap Counterparty, enforceable against
the Class A Interest Rate Swap Counterparty in accordance with
its terms, except (x) as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally
24
<PAGE> 25
(as such laws would apply in the event of the insolvency,
receivership, conservatorship or reorganization of, or other
similar occurrence with respect to, the Class A Interest Rate
Swap Counterparty), (y) that the enforceability of the Class A
Interest Rate Swap against the Class A Interest Rate Swap
Counterparty may be subject to the application of general
principles of equity (regardless of whether considered or
applied in a proceeding in equity or at law), and (z) that
certain remedial provisions of the Class A Interest Rate Swap
may be unenforceable, in whole or in part against the Class A
Interest Rate Swap Provider, but the inclusion of such
provisions does not affect the validity of the Class A
Interest Rate Swap, taken as a whole, and the Class A Interest
Rate Swap, together with applicable law, contains adequate
provisions for the practical realization of the benefits of
the security provided thereby. Such counsel expresses no
opinion as to the enforceability of any rights to contribution
or indemnification that are violative of public policy
underlying any law, rule or regulation;
(iii) The execution and delivery by the
Class A Interest Rate Swap Provider of the Class A Interest
Rate Swap, and the performance by the Class A Interest Rate
Swap Provider of its obligations under the Class A Interest
Rate Swap, do not conflict with or result in a violation of
(x) any law or regulation of the United States of America or
the State of Delaware governing the banking or trust
activities of the Class A Interest Rate Swap Provider, or (y)
the organizational documents of the Class A Interest Rate Swap
Provider; and
(iv) The execution and delivery by the Class
A Interest Rate Swap Provider of the Class A Interest Rate
Swap and the performance by the Class A Interest Rate Swap
Provider of its obligations under the Class A Interest Rate
Swap do not require any approval, authorization or other
action by, or filing with, any governmental authority having
25
<PAGE> 26
jurisdiction over the activities of the Class A Interest Rate
Swap Provider, except such as have been obtained, taken or
made.
(m) The Representative shall have re-
ceived evidence satisfactory to the Representative and its counsel that, on or
before the Closing Date, UCC-1 financing statements have been filed in the
appropriate filing offices of the State of Delaware and such other jurisdictions
as counsel to the Bank deems appropriate to reflect the interest of the Trustee
in the Receivables.
(n) The Class A Certificates shall be
rated "AAA" by Standard & Poor's and "Aaa" by Moody's and the Class B
Certificates shall be rated at least "A" by Standard & Poor's and rated at least
"A2" by Moody's on the Closing Date, and letters to such effect dated the
Closing Date shall have been received from each Rating Agency.
(o) The Representative shall have re-
ceived evidence satisfactory to the Representative that, on or before the
Closing Date, the Bank shall have received the approval of the Office of the
State Bank Commissioner of the State of Delaware to the transaction.
(p) All proceedings in connection with
the transactions contemplated by this Agreement and all documents incident
thereto shall be satisfactory in form and substance to the Representative and
its counsel, and the Representative and its counsel shall have received such
information, certificates and documents as any of them may reasonably request.
7. Indemnification and Contribution.
--------------------------------
(a) The Bank agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act and under Section 20 of
the Exchange Act against any and all losses, claims, damages or liabilities to
which they may become subject insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or in any revision or amendment
thereof
26
<PAGE> 27
or supplement thereto or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party for any legal
or other expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Bank will not be liable in any such case
-------- -------
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Bank by any Underwriter specifically for use
therein or any revision or amendment thereof or supplement thereto. The
foregoing indemnification with respect to any untrue statement or omission in
any preliminary prospectus or prospectus supplement shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Certificates, or any person controlling
such Underwriter, if a copy of the Prospectus (as then amended or supplemented
if the Bank shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Underwriter to such person, if such is
required by law, at or prior to the written confirmation of the sale of such
Certificates to such person and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability provided that the Bank shall have identified to such
Underwriter in writing such defect prior to the delivery of such written
confirmation by such Underwriter to such person.
(b) Each Underwriter severally and not
jointly agrees to indemnify and hold harmless the Bank, its directors, each of
the Bank's officers who signed the Registration Statement and each person, if
any, who controls the Bank within the meaning of Section 15 of the Act and under
Section 20 of the Exchange Act against any and all losses, claims, damages or
liabilities to which they may become subject insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or in any revision or
amendment thereof or
27
<PAGE> 28
supplement thereto or any related preliminary prospectus or prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Bank by such Underwriter specifically for
use therein or any revision or amendment thereof or supplement thereto, and
agrees to reimburse such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage or liability or action as such expenses are incurred.
(c) Promptly after receipt by an indem-
nified party under this Section 7 of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
which it may have to any indemnified party other than under this Section 7. In
the event that any such action is brought against any indemnified party and it
notified the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified
28
<PAGE> 29
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) If the indemnification provided for
in this Section 7 is unavailable or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnifying party as a result
of the losses, claims, damages or liabilities referred to in subsection (a) or
(b) above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Bank on the one hand and the respective Underwriter on
the other from the offering of the Certificates or (ii) if the allocation pro-
vided by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Bank on the one hand and of
the respective Underwriter on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as well
as any other relevant equitable considerations. The relative benefits received
by the Bank on the one hand and the respective Underwriter on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Bank bear to the total underwriting
discounts and commissions received by such Underwriter. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Bank or by any
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), each Underwriter shall not be required to
contribute any amount in excess of the underwriting discount or commission
applicable to the Certificates purchased by it hereunder. The Bank and the
Underwriters agree that it would not be just and equitable if contribution
29
<PAGE> 30
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of any of the equitable
considerations referred to above in this subsection (d). No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
8. Survival. The Bank and the Underwriters agree that the
--------
respective representations, warranties and agreements made by them herein and in
any certificate or other instrument delivered pursuant hereto shall be deemed
to be relied upon, in the case of the Bank, by each Underwriter and, in the case
of the Underwriters, by the Bank, notwithstanding any investigation heretofore
or hereafter made by or on behalf of the Bank or the Underwriters, and that the
respective representations, warranties and agreements (including without
limitation the indemnity and contribution agreement) made by the Bank and the
Underwriters herein or in any such certificate or other instrument shall survive
the delivery of and payment for the Certificates.
9. Termination. This Agreement may be terminated in the sole
-----------
discretion of the Underwriters by notice to the Bank given at or prior to the
Closing Date in the event that the Bank shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto. Termination of this
Agreement pursuant to this Section 9 shall be without liability of any party to
any other party except as provided in Sections 5 and 7 hereof.
10. Default by One or More of the Underwriters. If one or more
------------------------------------------
of the Underwriters shall fail on the Closing Date to purchase the Certificates
which it or they are obligated to purchase under this Agreement (the "Defaulted
---------
Securities"), the lead Underwriter shall have the right, within 24 hours
- ----------
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall
30
<PAGE> 31
not have completed such arrangements within such 24-hour period, then:
(a) if the aggregate amount of Defaulted Securities does not exceed
10% of the aggregate principal amount of the applicable class of
Certificates, each of the non-defaulting Underwriters of such class of
Certificates shall be obligated to purchase the full amount thereof in
the proportions that their respective underwriting obligations
hereunder with respect to such class of Certificates bear to the
underwriting obligations of all non-defaulting Underwriters of such
class of Certificates, or
(b) if the aggregate amount of Defaulted Securities exceeds 10% of the
aggregate principal amount of the applicable class of Certificates,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representative or the Bank shall have the right to
postpone the Closing Date for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
11. Representation of the Underwriters. Each of the
----------------------------------
Underwriters represents and warrants to, and agrees with, the Bank that (w) it
has only issued or passed on and shall only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Certificates to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
(as amended) or who is a person to whom the document may otherwise lawfully be
issued or passed on, (x) it has complied and shall comply with all applicable
provisions of the Financial Services Act 1986 and other applicable laws and
regulations with respect to anything done by it in relation to the Certificates
in, from or otherwise involving the United Kingdom and (y) if that Underwriter
is an authorized person under
31
<PAGE> 32
the Financial Services Act 1986, it has only promoted and shall only promote (as
that term is defined in Regulation 1.02 of the Financial Services (Promotion of
Unregulated Schemes) Regulations 1991) to any person in the United Kingdom the
scheme described in the Prospectus if that person is of a kind described either
in Section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of the
Financial Services (Promotion of Unregulated Schemes) Regulations 1991.
12. Notices. All communications provided for or permitted
-------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered, sent by overnight courier or mailed by registered mail,
postage prepaid and return receipt requested, or transmitted by telex,
telegraph or telecopier and confirmed by a similar mailed writing, if to (a) the
Underwriters, addressed to Credit Suisse First Boston Corporation, Eleven
Madison Avenue, New York, New York 10010, Attention: Joseph Fashano or to such
other address as the Representative may designate in writing to the Bank or (b)
the Bank, addressed to the Bank at 201 North Walnut Street, Wilmington, Delaware
19801, Attention: Clinton W. Walker, Executive Vice President and General
Counsel, telephone: (302) 434-7677, telecopier: (302) 884-8361, with a copy to
Banc One Corporation, 150 East Gay Street, 20th Floor, Columbus, Ohio 43215,
Attention: Rebekah Sayers, Transaction Manager, Structured Finance, telephone:
(614) 248-9153, telecopier: (614) 248-9544.
13. Secondary Trust or Special Purpose Vehicle. Each
------------------------------------------
Underwriter severally represents that it will not, at any time that such
Underwriter is acting as an "underwriter" (as defined in Section 2(11) of the
Act) with respect to the Certificates, transfer, deposit or otherwise convey any
Certificates into a trust or other type of special purpose vehicle that issues
securities or other instruments backed in whole or in part by, or that
represents interests in, such Certificates without the prior written consent of
the Bank.
14. Successors. This Agreement shall inure to the benefit of
----------
and be binding upon the parties hereto and their respective successors and
assigns. Nothing expressed herein is intended or shall be construed to give any
person other than the persons referred to in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement.
32
<PAGE> 33
15. Severability of Provisions. Any covenant, provision,
--------------------------
agreement or term of this Agreement that is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.
16. Entire Agreement. This Agreement constitutes the entire
----------------
agreement and understanding of the parties hereto with respect to the matters
and transactions contemplated hereby and supersedes all prior agreements and
understandings whatsoever relating to such matters and transactions.
17. Amendment. Neither this Agreement nor any term hereof may
---------
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
18. Headings. The headings in this Agreement are for the
--------
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
19. Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall constitute an original, but all of which shall
together constitute one instrument.
20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PROVISIONS THEREOF.
33
<PAGE> 34
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon it will be a binding agreement among the undersigned in accordance
with its terms.
Very truly yours,
FIRST USA BANK,
as Transferor and Servicer
By: /s/ REBEKAH A. SAYERS
------------------------
Name: Rebekah A. Sayers
Title: Vice President
The foregoing Underwriting Agreement
is hereby agreed to as of the date
first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION,
for itself and as Representative
of the Underwriters named in
Schedule A hereto
By: /s/ MICHAEL B. RAYNES
----------------------------
Name: Michael B. Raynes
Title: Director
<PAGE> 35
SCHEDULE A
Aggregate Principal
Amount of the Class A
Underwriter Certificates
- ----------- ------------
Credit Suisse First Boston
Corporation . . . . .................................. $160,000,000
Banc One Capital Markets, Inc............................. 160,000,000
Bear, Stearns & Co., Inc.................................. 160,000,000
First Chicago Capital
Markets, Inc........................................... 160,000,000
Salomon Brothers Inc...................................... 160,000,000
------------
Total................................... $800,000,000
============
Aggregate Principal
Amount of the Class B
Underwriter Certificates
- ----------- ------------
Credit Suisse First Boston
Corporation............................................ $14,457,800
Banc One Capital Markets, Inc............................. 14,457,800
Bear, Stearns & Co., Inc.................................. 14,457,800
First Chicago Capital
Markets, Inc........................................... 14,457,800
Salomon Brothers Inc...................................... 14,457,800
-----------
Total................................... $72,289,000
===========
<PAGE> 1
- --------------------------------------------------------------------------------
FIRST USA BANK
Transferor and Servicer
and
THE BANK OF NEW YORK (DELAWARE)
on behalf of the Certificateholders
-----------------------------
SERIES 1998-3 SUPPLEMENT
Dated as of June 25, 1998
to
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 1992, as amended
--------------------------
$963,856,000
FIRST USA CREDIT CARD MASTER TRUST
Series 1998-3
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
----
SECTION 1. Designation....................................................1
SECTION 2. Definitions....................................................2
SECTION 3. Reassignment and Transfer Terms...............................29
SECTION 4. Delivery and Payment for the Series 1998-3
Certificates........................................29
SECTION 5. Depositary; Form of Delivery of the Series
1998-3 Certificates.................................30
SECTION 6. Article IV of Agreement.......................................30
Article IV
Rights of Certificateholders and
Allocation and Application of Collections.............31
Section 4.04 Rights of Certificateholders...........................31
Section 4.05 Collections and Allocation.............................32
Section 4.06 Determination of Monthly Interest for
the Series 1998-3 Certificates..............37
Section 4.07 Determination of Monthly Principal.....................40
Section 4.08 Coverage of Required Amount for the
Investor Certificates.......................41
Section 4.09 Monthly Payments.......................................42
Section 4.10 Payment of Class A Certificate and
Class B Certificate Interest................48
Section 4.11 [Reserved].............................................48
Section 4.12 Investor Charge-Offs...................................48
Section 4.13 Excess Finance Charge Collections for
the Series 1998-3 Certificates..............50
Section 4.14 Reallocated Principal Collections for
the Series 1998-3 Certificates..............53
i
<PAGE> 3
Page
----
Section 4.15 Determination of LIBOR.................................55
Section 4.16 Principal Funding Account..............................56
Section 4.17 Reserve Account........................................57
Section 4.18 Class A Interest Rate Swaps ...........................60
SECTION 7. Article V of the Agreement....................................62
Article V
Distributions and Reports to Investor
Certificateholders...........................62
Section 5.01 Distributions..........................................62
Section 5.02 Monthly Certificateholders' Statement..................64
SECTION 8. Series 1998-3 Pay Out Events..................................66
SECTION 9. Series 1998-3 Termination.....................................68
SECTION 10. Periodic Finance Charges and Other Fees......................68
SECTION 11. Transfer of Excess Collateral Amount.........................69
SECTION 12. Compliance with Withholding Requirements.....................72
SECTION 13. Tax Characterization of the Excess
Collateral.........................................72
SECTION 14. ERISA Legend.................................................73
SECTION 15. Amendment and Ratification of Agreement......................73
SECTION 16. Counterparts.................................................74
SECTION 17. GOVERNING LAW................................................74
SECTION 18. Additional Representations and Warranties
of the Servicer....................................74
SECTION 19. Appointment of co-Paying Agent, co-Transfer
Agent and co-Registrar.............................75
ii
<PAGE> 4
EXHIBITS
EXHIBIT A Form of Class A Certificate
EXHIBIT B Form of Class B Certificate
EXHIBIT C DTC Letter of Representations
EXHIBIT D Form of Monthly Allocations and Payment Instructions
EXHIBIT E Form of Monthly Certificateholders' Statement
EXHIBIT F Form of Transferee Representation Letter
iii
<PAGE> 5
SERIES 1998-3 SUPPLEMENT, dated as of June 25, 1998 (this
"Series Supplement") by and between FIRST USA BANK, a Delaware chartered banking
-----------------
corporation, as Transferor and Servicer, and THE BANK OF NEW YORK (DELAWARE), as
Trustee under the Pooling and Servicing Agreement, dated as of September 1,
1992, between FIRST USA BANK, as Transferor and Servicer, and the Trustee, as
amended (the "Agreement").
---------
Section 6.09 of the Agreement provides, among other things,
that the Transferor and the Trustee may at any time and from time to time enter
into a supplement to the Agreement for the purpose of authorizing the issuance
by the Trustee to the Transferor for the execution and redelivery to the Trustee
for authentication of one or more Series of Certificates. The Transferor has
tendered the Exchange Notice required by subsection 6.09(b) of the Agreement and
hereby enters into this Series Supplement with the Trustee as required by
subsection 6.09(c) of the Agreement to provide for the issuance, authentication
and delivery of the Class A Certificates and the Class B Certificates (each as
defined below) and for the issuance of the Excess Collateral (as defined below).
Pursuant to this Series Supplement, the Transferor and the
Trustee shall create a new Series of Investor Certificates and shall specify the
Principal Terms thereof. The Investor Certificates of Series 1998-3 shall not be
subordinated to any other Series.
SECTION 1. Designation. There is hereby created a Series of
-----------
Investor Certificates to be issued pursuant to the Agreement and this Series
Supplement to be known generally as the "Series 1998-3 Certificates." The Series
--------------------------
1998-3 Certificates shall be issued in three Classes, two of which shall be
designated generally as the Class A Floating Rate Asset Backed Certificates,
Series 1998-3 (the "Class A Certificates") and the Class B Floating Rate Asset
--------------------
Backed Certificates, Series 1998-3 (the "Class B Certificates"). In addition,
--------------------
there is hereby created a third Class of uncertificated interests in the Trust
which shall be designated generally as the Excess Collateral, Series 1998-3 (the
"Excess Collateral"), and which shall be treated as a Class of "Investor
-----------------
Certificates" for all purposes under the Agreement and this Series Supplement;
provided, however, that the provisions of subsection 6.09(b) of the Agreement
- -------- -------
with respect to the delivery of an Opinion of Counsel to the effect that a
<PAGE> 6
newly issued Series of Investor Certificates will be treated as debt for Federal
income tax purposes shall not apply to the Excess Collateral and, except as
expressly provided herein, the provisions of Article VI and Article XII of the
Agreement relating to the authentication, delivery, presentation, cancellation
and surrender of registered Certificates shall not apply to the Excess
Collateral.
SECTION 2. Definitions. In the event that any term or
-----------
provision contained herein shall conflict with or be inconsistent with any
provision contained in the Agreement, the terms and provisions of this Series
Supplement shall govern. All Article, Section or subsection references herein
shall mean Article, Section or subsections of the Agreement, except as otherwise
provided herein. All capitalized terms not otherwise defined herein are defined
in the Agreement. Each capitalized term defined herein shall relate only to the
Series 1998-3 Certificates and to no other Series of Certificates issued by the
Trust.
"Accumulation Period" shall mean, unless a Pay Out Event shall
-------------------
have occurred prior thereto, the period commencing at the close of business on
May 31, 2000 or such later date as is determined in accordance with subsection
4.09(i) of the Agreement and ending on the first to occur of (a) the
commencement of the Rapid Amortization Period and (b) the Series 1998-3
Termination Date.
"Accumulation Period Factor" shall mean, for any Monthly
--------------------------
Period, a fraction, the numerator of which is equal to the sum of the initial
invested amounts of all outstanding Series, and the denominator of which is
equal to the sum of (a) the Initial Invested Amount, (b) the initial invested
amounts of all outstanding Series (other than Series 1998-3) which are not
expected to be in their revolving periods during such Monthly Period, and (c)
the initial invested amounts of all other outstanding Series which are not
allocating Excess Principal Collections and are expected to be in their
revolving periods during such Monthly Period.
"Accumulation Period Length" shall have the meaning assigned
--------------------------
such term in subsection 4.09(i) of the Agreement.
2
<PAGE> 7
"Accumulation Shortfall" shall initially mean zero and shall
----------------------
thereafter mean, with respect to any Monthly Period during the Accumulation
Period, the excess, if any, of the Controlled Deposit Amount for the previous
Monthly Period over the amount deposited into the Principal Funding Account
pursuant to subsections 4.09(e)(i), 4.09(e)(ii) and 4.09(e)(iii) of the
Agreement with respect to the Series 1998-3 Certificates for the previous
Monthly Period.
"Adjusted Invested Amount" shall mean, with respect to any
------------------------
date of determination, an amount equal to the sum of the Class A Adjusted
Invested Amount, the Class B Adjusted Invested Amount and the Excess Collateral
Adjusted Amount.
"Agreement" shall mean the Pooling and Servicing Agreement
---------
dated as of September 1, 1992 between First USA Bank, as Transferor and
Servicer, and the Trustee, as amended and as the same may be further amended or
otherwise modified from time to time.
"Amortization Period" shall mean, with respect to the Series
-------------------
1998-3 Certificates, the period commencing on the earlier of (a) the first day
of the Accumulation Period, or (b) the Pay Out Commencement Date, and continuing
to and including the earlier of (i) the payment in full to the Class A
Certificateholders of the Class A Invested Amount, to the Class B
Certificateholders of the Class B Invested Amount and to the Excess Collateral
Holders of the Excess Collateral Amount, and (ii) the Scheduled Series 1998-3
Termination Date.
"Assignee" shall have the meaning specified in subsection
--------
11(a) of this Series Supplement.
"Available Investor Principal Collections" shall mean, with
----------------------------------------
respect to any Monthly Period, an amount equal to (a) the sum of (i) an amount
equal, during the Revolving Period, to the Floating Allocation Percentage or,
during the Amortization Period, to the Fixed/Floating Allocation Percentage of
Collections of Principal Receivables with respect to such Monthly Period, (ii)
any Unallocated Principal Collections allocated to the Investor Certificates on
deposit in the Principal Account on the following Distribution Date, (iii) the
amount, if any, of Collections of Finance Charge Receivables and Excess Finance
Charge Collections to be distributed pursuant to subsection 4.09(a)(iv) with
respect to the
3
<PAGE> 8
following Distribution Date, and (iv) the amount, if any, of Excess Finance
Charge Collections to be distributed pursuant to subsections 4.13(b), (d), (e),
(h) and (i) on the following Transfer Date, minus (b) the amount of Reallocated
-----
Principal Collections with respect to such Monthly Period which are required to
fund a deficiency pursuant to Section 4.14 for such Distribution Date, if any.
"Available Reserve Account Amount" shall mean, with respect to
--------------------------------
any Transfer Date, the lesser of (a) the amount on deposit in the Reserve
Account as of such date (before giving effect to any deposit or withdrawal made
or to be made pursuant to subsection 4.13(j) to the Reserve Account on such
date) and (b) the Required Reserve Account Amount.
"Average Principal Balance" shall mean, for a Monthly Period
-------------------------
in which Additional Accounts are designated for inclusion in or Removed Accounts
are designated for removal from the Trust, the weighted average of the Principal
Receivables in the Trust at the end of the day on the last day of the prior
Monthly Period and the Principal Receivables in the Trust at the end of the day
on the related Addition Date or Removal Date, as applicable, weighted,
respectively, by a fraction, the numerator of which is the number of days from
and including the first day of such Monthly Period to but excluding the related
Addition Date or Removal Date, as applicable, and the denominator of which is
the number of days in such Monthly Period, and by a fraction, the numerator of
which is the number of days from and including the related Addition Date or
Removal Date, as applicable, to and including the last day of such Monthly
Period, and the denominator of which is the number of days in such Monthly
Period.
"Base Rate" shall mean, with respect to any Monthly Period,
---------
the sum of the weighted average of the Class A Certificate Rate, the Class B
Certificate Rate and the Excess Collateral Minimum Rate as of the last day of
such Monthly Period (weighted based on the Class A Invested Amount, the Class B
Invested Amount and the Excess Collateral Amount, respectively, as of the last
day of such Monthly Period) plus the product of 2.00% and the percentage
equivalent of a fraction the numerator of which is the Adjusted Invested Amount
and the denominator of which is the Invested Amount each as of the last day of
such Monthly Period.
4
<PAGE> 9
"BDL" shall mean Banque de Luxembourg.
---
"Business Day" shall mean, for the purpose of determining
------------
LIBOR, any day other than a Saturday, Sunday or day on which banking
institutions in London, England, trading in Dollar deposits in the London
interbank market, or banking institutions in New York, New York, or in Newark,
Delaware, are authorized or obligated by law or executive order to be closed and
for all other purposes shall have the meaning provided in the Agreement.
"Calculation Date" shall mean July 13, 1998 and the second
----------------
Business Day (as defined for purposes of determining LIBOR) prior to the 15th
day of each calendar month thereafter, or if such 15th day is not a Business
Day, the next succeeding Business Day.
"Class A Account Percentage" shall mean, with respect to any
--------------------------
Determination Date, the percentage equivalent of a fraction, the numerator of
which is the aggregate amount deposited in the Principal Funding Account on
prior Transfer Dates pursuant to subsection 4.09(e)(i) and the denominator of
which is the aggregate amount on deposit in the Principal Funding Account as of
the last day of the preceding Monthly Period.
"Class A Adjusted Invested Amount" shall mean, with respect to
--------------------------------
any date of determination, an amount not less than zero equal to the Class A
Invested Amount minus the Principal Funding Account Balance on such date of
determination.
"Class A Available Funds" shall mean, with respect to any
-----------------------
Monthly Period, an amount equal to the sum of (a) the Class A Floating
Allocation Percentage of the Collections of Finance Charge Receivables in
respect of such Monthly Period, (b) the sum of the Class A Net Swap Receipt, if
any, deposited in the Finance Charge Account on the related Transfer Date, and
the Class A Net Swap Receipts, if any, due but not paid on any prior Transfer
Date which have been deposited in the Finance Charge Account since the
immediately preceding Transfer Date and (c) with respect to any Monthly Period
during the Accumulation Period prior to the payment in full of the Class A
Invested Amount, the product of (i) the Class A Account Percentage and (ii) the
sum of the Principal Funding Investment Proceeds pursuant to subsection 4.16(b)
of the Agreement, if any, with respect to the related Transfer Date and the
amounts, if any, to be withdrawn from the
5
<PAGE> 10
Reserve Account which will be deposited into the Finance Charge Account on the
related Transfer Date pursuant to subsections 4.17(b), 4.17(d), 4.17(e) and
4.17(f) of the Agreement.
"Class A Certificate Rate" shall mean a per annum rate of
------------------------
0.06% in excess of LIBOR as determined (i) on June 23, 1998 for the period from
and including the Closing Date through and including July 19, 1998 and (ii) on
the related LIBOR Determination Date with respect to each Interest Period
thereafter.
"Class A Certificateholder" shall mean the Person in whose
-------------------------
name a Class A Certificate is registered in the Certificate Register.
"Class A Certificateholders' Interest" shall mean the portion
------------------------------------
of the Series 1998-3 Certificateholders' Interest evidenced by the Class A
Certificates.
"Class A Certificates" shall mean any of the certificates
--------------------
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A hereto.
"Class A Default Interest" shall have the meaning specified in
------------------------
subsection 4.06(a) of the Agreement.
"Class A Fixed Amount" shall mean, with respect to each
--------------------
Transfer Date, an amount equal to one-twelfth of the product of (a) the Class A
Swap Fixed Rate and (b) the Class A Notional Amount; provided, however, that
-------- -------
with respect to the first Transfer Date the Class A Fixed Amount shall be an
amount equal to the product of (x) a fraction, the numerator of which is 23 and
the denominator of which is 360, (y) the Class A Swap Fixed Rate and (z) the
Class A Notional Amount.
"Class A Floating Allocation Percentage" shall mean, with
--------------------------------------
respect to any Monthly Period, the percentage equivalent of a fraction, the
numerator of which is the Class A Adjusted Invested Amount as of the last day of
the preceding Monthly Period and the denominator of which is the total amount of
Principal Receivables in the Trust as of the last day of such preceding Monthly
Period; provided however, that, with respect to the first Monthly Period, the
-------- -------
Class A Floating Allocation Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Class A Initial Invested Amount and
6
<PAGE> 11
the denominator of which is the total amount of Principal Receivables in the
Trust on the Closing Date; provided further, that with respect to any Monthly
-------- -------
Period in which an Addition Date or a Removal Date occurs and the Servicer need
not make daily deposits of Collections into the Collection Account, the
denominator in the definition of the Class A Floating Allocation Percentage
shall be the Average Principal Balance; provided further, that with respect to
-------- -------
any Monthly Period in which an Addition Date or Removal Date occurs and the
Servicer is required to make daily deposits of Collections into the Collection
Account, the denominator in the definition of the Class A Floating Allocation
Percentage shall be (1) the aggregate amount of Principal Receivables in the
Trust at the end of the day on the last day of the prior Monthly Period for the
period from and including the first day of such Monthly Period to but excluding
the related Addition Date or Removal Date, as applicable, and (2) the aggregate
amount of Principal Receivables in the Trust at the end of the day on the
related Addition Date or Removal Date, as applicable, for the period from such
Addition Date to and including the last day of such Monthly Period.
"Class A Floating Amount" shall mean, for any Distribution
-----------------------
Date, an amount equal to the product of (a) a fraction, the numerator of which
is the actual number of days in the related Interest Period, and the denominator
of which is 360, (b) the Class A Swap Floating Rate and (c) the Class A Notional
Amount as of the preceding Record Date.
"Class A Initial Invested Amount" shall mean the aggregate
-------------------------------
initial principal amount of the Class A Certificates, which is $800,000,000.
"Class A Interest Rate Swap" shall mean the interest rate
--------------------------
exchange agreement, dated as of June 18, 1998 between the Trustee on behalf of
the Trust and the Class A Swap Counterparty, as such agreement may be amended or
otherwise modified or replaced.
"Class A Interest Shortfall" shall have the meaning specified
--------------------------
in subsection 4.06(a) of the Agreement.
"Class A Invested Amount" shall mean, when used with respect
-----------------------
to any date of determination, an amount equal to (a) the Class A Initial
Invested Amount, minus (b) the aggregate amount of principal payments made to
-----
Class A Certificateholders prior to such day and minus
-----
7
<PAGE> 12
(c) the excess, if any, of the aggregate amount of Class A Investor Charge-Offs
over Class A Investor Charge-Offs reimbursed pursuant to subsection 4.12(a) of
the Agreement prior to such day.
"Class A Investor Charge-Offs" shall have the meaning
----------------------------
specified in subsection 4.12(a) of the Agreement.
"Class A Investor Default Amount" shall mean, with respect to
-------------------------------
each Distribution Date and each Receivable in an Account which became a
Defaulted Account during the related Monthly Period, an amount equal to the
product of the aggregate Default Amount for the related Monthly Period and the
applicable Class A Investor Percentage for the related Monthly Period.
"Class A Investor Percentage" shall mean for any Monthly
---------------------------
Period, (a) with respect to Defaulted Receivables and Finance Charge Receivables
at any time and Principal Receivables during the Revolving Period, the Class A
Floating Allocation Percentage, and (b) with respect to Principal Receivables
during the Amortization Period, the Fixed/Floating Allocation Percentage.
"Class A Monthly Interest" shall mean the monthly interest
------------------------
distributable in respect of the Class A Certificates as calculated in accordance
with subsection 4.06(a) of the Agreement.
"Class A Monthly Principal" shall mean the monthly principal
-------------------------
distributable in respect of the Class A Certificates as calculated in accordance
with subsection 4.07(a) of the Agreement.
"Class A Monthly Servicing Fee" shall mean, with respect to
-----------------------------
any Distribution Date, one-twelfth of the product of the Series Servicing Fee
Percentage and the Class A Adjusted Invested Amount on the last day of the
preceding Monthly Period; provided, however, that with respect to the initial
-------- -------
Monthly Period the Class A Monthly Servicing Fee shall be $197,260.
"Class A Net Swap Payment" shall mean, for any Transfer Date,
------------------------
the amount by which the Class A Fixed Amount for such date exceeds the Class A
Floating Amount for such date.
"Class A Net Swap Receipt" shall mean, for any Transfer Date,
------------------------
the amount by which the Class A Floating
8
<PAGE> 13
Amount for such date exceeds the Class A Fixed Amount for such date plus the
----
amount of any termination payments made by the Class A Swap Counterparty to the
Trust with respect to the Class A Interest Rate Swap.
"Class A Notional Amount" shall mean the "Calculation Amount"
-----------------------
as defined in the Class A Interest Rate Swap.
"Class A Outstanding Principal Balance" shall mean, when used
-------------------------------------
with respect to any date of determination, an amount equal to (a) the Class A
Initial Invested Amount, minus (b) the aggregate amount of principal payments
-----
made to the Class A Certificateholders prior to such day.
"Class A Required Amount" shall have the meaning specified in
-----------------------
Section 4.08 of the Agreement.
"Class A Scheduled Payment Date" shall mean the June 2001
------------------------------
Distribution Date.
"Class A Swap Counterparty" shall have the meaning specified
-------------------------
in the Class A Interest Rate Swap.
"Class A Swap Fixed Rate" shall mean 5.7375% per annum.
-----------------------
"Class A Swap Floating Rate" shall mean, with respect to any
--------------------------
Interest Period, a per annum rate equal to LIBOR for such Interest Period.
"Class B Account Percentage" shall mean, with respect to any
--------------------------
Determination Date, the percentage equivalent of a fraction, the numerator of
which is the aggregate amount deposited in the Principal Funding Account on
prior Transfer Dates pursuant to subsection 4.09(e)(ii) and the denominator of
which is the aggregate amount on deposit in the Principal Funding Account as of
the last day of the preceding Monthly Period.
"Class B Adjusted Invested Amount" shall mean, with respect to
--------------------------------
any date of determination, an amount not less than zero equal to the Class B
Invested Amount minus the excess, if any, of the Principal Funding Account
-----
Balance over the Class A Invested Amount on such date of determination.
9
<PAGE> 14
"Class B Available Funds" shall mean, with respect to any
-----------------------
Monthly Period, an amount equal to the sum of (a) the Class B Floating
Allocation Percentage of the Collections of Finance Charge Receivables in
respect of such Monthly Period and (b) with respect to any Monthly Period during
the Accumulation Period prior to the payment in full of the Class B Invested
Amount, the product of (i) the Class B Account Percentage and (ii) the sum of
the Principal Funding Investment Proceeds pursuant to subsection 4.16(b) of the
Agreement, if any, with respect to the related Transfer Date and the amounts, if
any, to be withdrawn from the Reserve Account which will be deposited into the
Finance Charge Account on the related Transfer Date pursuant to subsections
4.17(b), 4.17(d), 4.17(e) and 4.17(f) of the Agreement.
"Class B Certificate Rate" shall mean a per annum rate of
------------------------
0.22% in excess of LIBOR as determined (i) on June 23, 1998 for the period from
and including the Closing Date through and including July 19, 1998 and (ii) on
the related LIBOR Determination Date with respect to each Interest Period
thereafter.
"Class B Certificateholder" shall mean the Person in whose
-------------------------
name a Class B Certificate is registered in the Certificate Register.
"Class B Certificateholders' Interest" shall mean the portion
------------------------------------
of the Series 1998-3 Certificateholders' Interest evidenced by the Class B
Certificates.
"Class B Certificates" shall mean any of the certificates
--------------------
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit B hereto.
"Class B Default Interest" shall have the meaning specified in
------------------------
subsection 4.06(b) of the Agreement.
"Class B Fixed/Floating Allocation Percentage" shall mean for
--------------------------------------------
any Monthly Period during the Amortization Period the percentage equivalent of a
fraction, the numerator of which is the Class B Invested Amount at the end of
the last day of the Revolving Period and the denominator of which is the greater
of (a) the total amount of Principal Receivables in the Trust at the end of the
last day of the preceding Monthly Period and (b) the sum of the numerators used
to calculate fixed/
10
<PAGE> 15
floating allocation percentages with respect to all Series then outstanding on
the applicable Distribution Date; provided, however, that with respect to any
-------- -------
Monthly Period in which an Addition Date or Removal Date occurs and the Servicer
need not make daily deposits of Collections into the Collection Account, the
denominator determined pursuant to clause (a) shall be the Average Principal
Balance; provided further, however, that with respect to any Monthly Period in
-------- ------- -------
which an Addition Date or Removal Date occurs and the Servicer is required to
make daily deposits of Collections into the Collection Account, the denominator
determined pursuant to clause (a) hereof shall be (1) the aggregate amount of
Principal Receivables in the Trust at the end of the day on the last day of the
prior Monthly Period for the period from and including the first day of such
Monthly Period to but excluding the related Addition Date or Removal Date, as
applicable, and (2) the aggregate amount of Principal Receivables in the Trust
at the end of the day on the related Addition Date or Removal Date, as
applicable, for the period from and including such Addition Date or Removal
Date, as applicable, to and including the last day of such Monthly Period.
"Class B Floating Allocation Percentage" shall mean, with
--------------------------------------
respect to any Monthly Period, the percentage equivalent of a fraction, the
numerator of which is the Class B Adjusted Invested Amount as of the last day of
the preceding Monthly Period and the denominator of which is the total amount of
Principal Receivables in the Trust as of the last day of such preceding Monthly
Period; provided however, that, with respect to the first Monthly Period, the
-------- -------
Class B Floating Allocation Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Class B Initial Invested Amount and the
denominator of which is the total amount of Principal Receivables on the Closing
Date; provided further, that with respect to any Monthly Period in which an
-------- -------
Addition Date or Removal Date occurs and the Servicer need not make daily
deposits of Collections into the Collection Account, the denominator in the
definition of the Class B Floating Allocation Percentage shall be the Average
Principal Balance; provided further, that with respect to any Monthly Period in
-------- -------
which an Addition Date or Removal Date occurs and the Servicer is required to
make daily deposits of Collections into the Collection Account, the denominator
in the definition of the Class B Floating Allocation Percentage shall be (1) the
aggregate amount of Principal Receivables in the Trust at the end of the
11
<PAGE> 16
day on the last day of the prior Monthly Period for the period from and
including the first day of such Monthly Period to but excluding the related
Addition Date or Removal Date, as applicable, and (2) the aggregate amount of
Principal Receivables in the Trust at the end of the day on the related Addition
Date or Removal Date, as applicable, for the period from and including such
Addition Date or Removal Date, as applicable, to and including the last day of
such Monthly Period.
"Class B Initial Invested Amount" shall mean the aggregate
-------------------------------
initial principal amount of the Class B Certificates, which is $72,289,000.
"Class B Interest Shortfall" shall have the meaning specified
--------------------------
in subsection 4.06(b) of the Agreement.
"Class B Invested Amount" shall mean, when used with respect
-----------------------
to any date of determination, an amount equal to (a) the Class B Initial
Invested Amount, minus (b) the aggregate amount of principal payments made to
-----
Class B Certificateholders prior to such day, minus (c) the aggregate amount of
-----
Class B Investor Charge-Offs for all prior Distribution Dates, minus (d) the
-----
amount of the Reallocated Class B Principal Collections allocated on all prior
Distribution Dates for which the Excess Collateral Amount has not been reduced
pursuant to subsection 4.14(a) of the Agreement, minus (e) an amount equal to
-----
the amount by which the Class B Invested Amount has been reduced on all prior
Distribution Dates pursuant to subsection 4.12(a) of the Agreement and plus (f)
----
the amount of Excess Finance Charge Collections allocated and available on all
prior Transfer Dates pursuant to subsection 4.13(e) of the Agreement, for the
purpose of reimbursing amounts deducted pursuant to the foregoing clauses (c),
(d) and (e); provided, however, that the Class B Invested Amount may not be
-------- -------
reduced below zero.
"Class B Investor Charge-Offs" shall have the meaning
----------------------------
specified in subsection 4.12(b) of the Agreement.
"Class B Investor Default Amount" shall mean, with respect to
-------------------------------
each Distribution Date and each Receivable in an Account which became a
Defaulted Account during the related Monthly Period, an amount equal to the
product of the aggregate Default Amount for the related Monthly Period and the
Class B Investor Percentage applicable for the related Monthly Period.
12
<PAGE> 17
"Class B Investor Percentage" shall mean for any Monthly
---------------------------
Period, (a) with respect to Defaulted Receivables and Finance Charge Receivables
at any time or Principal Receivables during the Revolving Period, the Class B
Floating Allocation Percentage, and (b) with respect to Principal Receivables
during the Amortization Period, the Class B Fixed/Floating Allocation
Percentage.
"Class B Monthly Interest" shall mean the monthly interest
------------------------
distributable in respect of the Class B Certificates as calculated in accordance
with subsection 4.06(b) of the Agreement.
"Class B Monthly Principal" shall mean the monthly principal
-------------------------
distributable in respect of the Class B Certificates as calculated in accordance
with subsection 4.07(b) of the Agreement.
"Class B Monthly Servicing Fee" shall mean, with respect to
-----------------------------
any Distribution Date, one-twelfth of the product of the Series Servicing Fee
Percentage and the Class B Adjusted Invested Amount on the last day of the
preceding Monthly Period; provided, however, that with respect to the initial
-------- -------
Monthly Period the Class B Monthly Servicing Fee shall be $17,825.
"Class B Outstanding Principal Balance" shall mean, when used
-------------------------------------
with respect to any date of determination, an amount equal to (a) the Class B
Initial Invested Amount, minus (b) the aggregate amount of principal payments
made to the Class B Certificateholders prior to such day.
"Class B Principal Commencement Date" shall mean (a) with
-----------------------------------
respect to the Accumulation Period, the first Distribution Date on which an
amount equal to the Class A Invested Amount has been deposited in the Principal
Funding Account and allocated to the Class A Certificates or (b) with respect to
the Rapid Amortization Period, the Distribution Date on which the Class A
Invested Amount is paid in full or, if there are no Available Investor Principal
Collections allocable to the Investor Certificates remaining after payments have
been made to the Class A Certificates on such Distribution Date, the
Distribution Date following the Distribution Date on which the Class A Invested
Amount is paid in full.
13
<PAGE> 18
"Class B Required Amount" shall have the meaning specified in
-----------------------
Section 4.08 of the Agreement.
"Class B Scheduled Payment Date" shall mean the June 2001
------------------------------
Distribution Date.
"Closing Date" shall mean June 25, 1998.
------------
"Code" shall mean the Internal Revenue Code of 1986, as
----
amended.
"Collateral Base Rate" shall mean, with respect to any Monthly
--------------------
Period, the sum of (a) the weighted average of the Class A Certificate Rate, the
Class B Certificate Rate and the Excess Collateral Minimum Rate (weighted based
on the Class A Invested Amount, the Class B Invested Amount and the Excess
Collateral Amount, respectively, as of the last day of such Monthly Period) plus
(b) the Series Servicing Fee Percentage per annum.
"Controlled Accumulation Amount" shall mean, for any Transfer
------------------------------
Date with respect to the Accumulation Period prior to the payment in full of the
Invested Amount, $80,321,334; provided, however, that if the Accumulation Period
-------- -------
Length is determined to be less than 12 months pursuant to subsection 4.09(i) of
the Agreement, the Controlled Accumulation Amount for each Transfer Date with
respect to the Accumulation Period prior to the payment in full of the Invested
Amount will be equal to (i) the product of (x) the Initial Invested Amount and
(y) the Accumulation Period Factor for such Monthly Period divided by (ii) the
Required Accumulation Factor Number.
"Controlled Deposit Amount" shall mean, with respect to any
-------------------------
Transfer Date, the sum of (a) the Controlled Accumulation Amount for such
Transfer Date and (b) any existing Accumulation Shortfall.
"Covered Amount" shall mean, with respect to any Interest
--------------
Period during the Accumulation Period prior to the payment in full of the
Invested Amount, the sum of (a) with respect to the Class A Certificates, the
product of (i) a fraction, the numerator of which is the actual number of days
in such Interest Period and the denominator of which is 360, (ii) the Class A
Certificate Rate in effect with respect to such Interest Period and (iii) the
aggregate amount on deposit in the Principal Funding Account with respect to
Class A Monthly Principal as of
14
<PAGE> 19
the last day of the Monthly Period preceding the Monthly Period in which such
Interest Period ends, (b) with respect to the Class B Certificates, the product
of (i) a fraction, the numerator of which is the actual number of days in such
Interest Period and the denominator of which is 360, (ii) the Class B
Certificate Rate in effect with respect to such Interest Period and (iii) the
aggregate amount on deposit in the Principal Funding Account with respect to
Class B Monthly Principal as of the last day of the Monthly Period preceding the
Monthly Period in which such Interest Period ends, and (c) with respect to the
Excess Collateral, the product of (i) a fraction, the numerator of which is the
actual number of days in such Interest Period and the denominator of which is
360, (ii) the Excess Collateral Minimum Rate in effect with respect to such
Interest Period and (iii) the aggregate amount on deposit in the Principal
Funding Account with respect to Excess Collateral Monthly Principal as of the
last day of the Monthly Period preceding the Monthly Period in which such
Interest Period ends.
"Daily Deposit Date" shall mean the Determination Date on
------------------
which the Excess Spread Percentage for the Monthly Period preceding such date is
less than 2.50% per annum.
"Default Interest" shall mean, with respect to any
----------------
Distribution Date, the sum of Class A Default Interest and Class B Default
Interest distributable in respect of the Class A Certificates and Class B
Certificates, respectively, as calculated in accordance with Section 4.06 of the
Agreement.
"Determination Date" shall mean the first Business Day on or
------------------
before the eighth calendar day prior to each Distribution Date.
"Distribution Date" shall mean July 20, 1998 and the 18th day
-----------------
of each calendar month thereafter, or if such 18th day is not a Business Day,
the next succeeding Business Day.
"Enhancement" shall mean with respect to the Class A
-----------
Certificates, the subordination of the Class B Certificates and the Excess
Collateral, and with respect to the Class B Certificates, the subordination of
the Excess Collateral.
15
<PAGE> 20
"Enhancement Provider" shall mean the Excess Collateral
--------------------
Holders.
"ERISA" shall mean the Employee Retirement Income Security Act
-----
of 1974, as amended.
"Excess Collateral" shall mean an undivided interest in the
-----------------
Trust which shall consist of the right to receive from the Trust an amount equal
to (i) to the extent necessary to make the required payments to the Excess
Collateral Holders under this Series Supplement, the portion of Collections
allocable thereto under the Agreement and this Series Supplement, and funds on
deposit in the Collection Account allocable thereto pursuant to the Agreement
and this Series Supplement, and (ii) amounts available pursuant to subsection
4.13(k) of the Agreement.
"Excess Collateral Account Percentage" shall mean, with
------------------------------------
respect to any Determination Date, the percentage equivalent of a fraction, the
numerator of which is the aggregate amount deposited in the Principal Funding
Account on prior Transfer Dates pursuant to subsection 4.09(e)(iii) and the
denominator of which is the aggregate amount on deposit in the Principal Funding
Account as of the last day of the preceding Monthly Period.
"Excess Collateral Adjusted Amount" shall mean, with respect
---------------------------------
to any date of determination, an amount not less than zero equal to the Excess
Collateral Amount minus the excess, if any, of the Principal Funding Account
-----
Balance over the sum of the Class A Invested Amount and the Class B Invested
Amount on such date of determination.
"Excess Collateral Amount" shall mean, when used with respect
------------------------
to any date of determination, an amount equal to (a) the Excess Collateral
Initial Amount, minus (b) the aggregate amount of principal payments made to
-----
Excess Collateral Holders prior to such day, minus (c) the aggregate amount of
-----
Excess Collateral Charge-Offs for all prior Distribution Dates pursuant to
subsection 4.12(c) of the Agreement, minus (d) the amount of the Reallocated
-----
Principal Collections allocated on all prior Distribution Dates pursuant to
Section 4.14 of the Agreement (but in the aggregate not in excess of the Excess
Collateral Initial Amount), minus (e) an amount equal to the amount by which the
-----
Excess Collateral Amount has been
16
<PAGE> 21
reduced on all prior Distribution Dates pursuant to subsections 4.12(a) and (b)
of the Agreement and plus (f) the amount of Excess Finance Charge Collections
----
allocated and available on all prior Transfer Dates pursuant to subsection
4.13(i) of the Agreement, for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e); provided, however, that the
-------- -------
Excess Collateral Amount may not be reduced below zero.
"Excess Collateral Available Funds" shall mean, with respect
---------------------------------
to any Monthly Period, an amount equal to the sum of (a) the Excess Collateral
Floating Allocation Percentage of the Collections of Finance Charge Receivables
in respect of such Monthly Period and (b) with respect to any Monthly Period
during the Accumulation Period prior to the payment in full of the Excess
Collateral Amount, the product of (i) the Excess Collateral Account Percentage
and (ii) the sum of the Principal Funding Investment Proceeds pursuant to
subsection 4.16(b) of the Agreement, if any, with respect to the related
Transfer Date and the amounts, if any, to be withdrawn from the Reserve Account
which will be deposited into the Finance Charge Account on the related Transfer
Date pursuant to subsections 4.17(b), 4.17(d), 4.17(e) and 4.17(f) of the
Agreement.
"Excess Collateral Charge-Offs" shall have the meaning
-----------------------------
specified in subsection 4.12(c) of the Agreement.
"Excess Collateral Default Amount" shall mean, with respect to
--------------------------------
each Distribution Date and each Receivable in an Account which became a
Defaulted Account during the related Monthly Period, an amount equal to the
product of the aggregate Default Amount for the related Monthly Period and the
Excess Collateral Percentage applicable for the related Monthly Period.
"Excess Collateral Fixed/Floating Allocation Percentage" shall
------------------------------------------------------
mean for any Monthly Period during the Amortization Period the percentage
equivalent of a fraction, the numerator of which is the Excess Collateral Amount
at the end of the last day of the Revolving Period and the denominator of which
is the greater of (a) the total amount of Principal Receivables in the Trust at
the end of the last day of the preceding Monthly Period and (b) the sum of the
numerators used to calculate fixed/floating allocation percentages with respect
to all Series then outstanding on the applicable Distribution Date; provided,
--------
however, that with respect to any Monthly
- -------
17
<PAGE> 22
Period in which an Addition Date or Removal Date occurs and the Servicer need
not make daily deposits of Collections into the Collection Account, the
denominator determined pursuant to clause (a) shall be the Average Principal
Balance; provided further, however, that with respect to any Monthly Period in
-------- ------- -------
which an Addition Date or Removal Date occurs and the Servicer is required to
make daily deposits of Collections into the Collection Account, the denominator
determined pursuant to clause (a) hereof shall be (1) the aggregate amount of
Principal Receivables in the Trust at the end of the day on the last day of the
prior Monthly Period for the period from and including the first day of such
Monthly Period to but excluding the related Addition Date or Removal Date, as
applicable, and (2) the aggregate amount of Principal Receivables in the Trust
at the end of the day on the related Addition Date or Removal Date, as
applicable, for the period from and including such Addition Date or Removal
Date, as applicable, to and including the last day of such Monthly Period.
"Excess Collateral Floating Allocation Percentage" shall mean,
------------------------------------------------
with respect to any Monthly Period, the percentage equivalent of a fraction, the
numerator of which is the Excess Collateral Adjusted Amount as of the last day
of the preceding Monthly Period and the denominator of which is the total amount
of Principal Receivables in the Trust as of the last day of such preceding
Monthly Period; provided however, that, with respect to the first Monthly
-------- -------
Period, the Excess Collateral Floating Allocation Percentage shall mean the
percentage equivalent of a fraction, the numerator of which is the Excess
Collateral Initial Amount and the denominator of which is the total amount of
Principal Receivables on the Closing Date; provided further, that with respect
-------- -------
to any Monthly Period in which an Addition Date or Removal Date occurs and the
Servicer need not make daily deposits of Collections into the Collection
Account, the denominator in the definition of the Excess Collateral Floating
Allocation Percentage shall be the Average Principal Balance; provided further,
-------- -------
that with respect to any Monthly Period in which an Addition Date or Removal
Date occurs and the Servicer is required to make daily deposits of Collections
into the Collection Account, the denominator in the definition of the Excess
Collateral Floating Allocation Percentage shall be (1) the aggregate amount of
Principal Receivables in the Trust at the end of the day on the last day of the
prior Monthly Period for the period from and including the first day of such
Monthly Period to but
18
<PAGE> 23
excluding the related Addition Date or Removal Date, as applicable, and (2) the
aggregate amount of Principal Receivables in the Trust at the end of the day on
the related Addition Date or Removal Date, as applicable, for the period from
and including such Addition Date or Removal Date, as applicable, to and
including the last day of such Monthly Period.
"Excess Collateral Holders" shall mean the Person or Persons
-------------------------
so designated in the Transfer and Administration Agreement.
"Excess Collateral Initial Amount" shall mean the aggregate
--------------------------------
initial principal amount of the Excess Collateral Amount, which is $91,567,000.
"Excess Collateral Interest Shortfall" shall have the meaning
------------------------------------
specified in subsection 4.06(c) of the Agreement.
"Excess Collateral Minimum Monthly Interest" shall mean the
------------------------------------------
monthly interest distributable in respect of the Excess Collateral Amount as
calculated in accordance with subsection 4.06(c) of the Agreement.
"Excess Collateral Minimum Rate" shall mean a per annum rate
------------------------------
of .50% in excess of LIBOR as determined (i) on June 23, 1998 for the period
from and including the Closing Date through and including July 19, 1998, and
(ii) on the related LIBOR Determination Date with respect to each Interest
Period thereafter, or such lesser rate as may be designated in the Transfer and
Administration Agreement.
"Excess Collateral Monthly Principal" shall mean the monthly
-----------------------------------
principal distributable in respect of the Excess Collateral Amount as calculated
in accordance with subsection 4.07(c) of the Agreement.
"Excess Collateral Monthly Servicing Fee" shall mean, with
---------------------------------------
respect to any Distribution Date, one-twelfth of the product of the Series
Servicing Fee Percentage and the Excess Collateral Adjusted Amount on the last
day of the preceding Monthly Period; provided, however, that with respect to the
-------- -------
initial Monthly Period the Excess Collateral Monthly Servicing Fee shall be
$22,578.
"Excess Collateral Percentage" shall mean for any Monthly
----------------------------
Period, (a) with respect to Defaulted Receiv-
19
<PAGE> 24
ables and Finance Charge Receivables at any time or Principal Receivables during
the Revolving Period, the Excess Collateral Floating Allocation Percentage, and
(b) with respect to Principal Receivables during the Amortization Period, the
Excess Collateral Fixed/Floating Allocation Percentage.
"Excess Collateral Principal Commencement Date" shall mean (a)
---------------------------------------------
with respect to the Accumulation Period, the first Distribution Date on which an
amount equal to the sum of the Class A Invested Amount and the Class B Invested
Amount has been deposited in the Principal Funding Account and allocated to the
Class A Certificates and the Class B Certificates or (b) with respect to the
Rapid Amortization Period, the Distribution Date on which the Class A Invested
Amount and the Class B Invested Amount have each been paid in full or, if there
are no Principal Receivables allocable to the Investor Certificates remaining
after payments have been made to the Class A Certificates and the Class B
Certificates on such Distribution Date, the Distribution Date following the
Distribution Date on which the Class A Invested Amount and the Class B Invested
Amount have each been paid in full.
"Excess Collateral Scheduled Payment Date" shall mean the June
----------------------------------------
2001 Transfer Date.
"Excess Finance Charge Collections" shall mean, with respect
---------------------------------
to any Transfer Date, the sum of the amounts, if any, specified pursuant to
subsections 4.09(a)(v), 4.09(b)(iii) and 4.09(c)(ii) of the Agreement with
respect to such Transfer Date.
"Excess Principal Collections" shall mean, as the context
----------------------------
requires, either (a) the amount allocated to the Investor Certificates which, in
accordance with subsections 4.05(b)(ii), 4.05(c)(ii) and 4.05(f) of the
Agreement, may be applied to Principal Shortfalls with respect to other
outstanding Series or (b) the amounts allocated to the investor certificates of
other Series which the applicable supplements for such Series specify are to be
treated as "Excess Principal Collections" and which may be applied to cover
Principal Shortfalls with respect to the Investor Certificates.
"Excess Spread Percentage" shall mean, with respect to any
------------------------
Monthly Period, the amount, if any, by
20
<PAGE> 25
which (i) the Net Portfolio Yield exceeds (ii) the Collateral Base Rate.
"Finance Charge Deficit" shall have the meaning set forth in
----------------------
subsection 4.05(b)(ii) of the Agreement.
"Fixed/Floating Allocation Percentage" shall mean for any
------------------------------------
Monthly Period during the Amortization Period the percentage equivalent of a
fraction, the numerator of which is the Invested Amount at the end of the last
day of the Revolving Period and the denominator of which is the greater of (a)
the total amount of Principal Receivables in the Trust at the end of the last
day of the preceding Monthly Period and (b) the sum of the numerators used to
calculate fixed/floating allocation percentages with respect to all Series then
outstanding on the applicable Distribution Date; provided, however, that with
-------- -------
respect to any Monthly Period in which an Addition Date or a Removal Date occurs
and the Servicer need not make daily deposits of Collections into the Collection
Account, the denominator determined pursuant to clause (a) shall be the Average
Principal Balance; provided further, however, that with respect to any Monthly
-------- ------- -------
Period in which an Addition Date or Removal Date occurs and the Servicer is
required to make daily deposits of Collections into the Collection Account, the
denominator determined pursuant to clause (a) hereof shall be (1) the aggregate
amount of Principal Receivables in the Trust at the end of the day on the last
day of the prior Monthly Period for the period from and including the first day
of such Monthly Period to but excluding the related Addition Date or Removal
Date, as applicable, and (2) the aggregate amount of Principal Receivables in
the Trust at the end of the day on the related Addition Date or Removal Date, as
applicable, for the period from and including the related Addition Date or
Removal Date, as applicable, to and including the last day of such Monthly
Period.
"Floating Allocation Percentage" shall mean for any date of
------------------------------
determination the sum of the applicable Class A Floating Allocation Percentage,
the applicable Class B Floating Allocation Percentage and the applicable Excess
Collateral Floating Allocation Percentage.
"Initial Invested Amount" shall mean the aggregate initial
-----------------------
principal amount of the Investor Certificates of Series 1998-3, which is
$963,856,000.
21
<PAGE> 26
"Initial Purchaser" shall have the meaning specified in
-----------------
subsection 11(c) of this Series Supplement.
"Interest Period" shall mean, with respect to a Distribution
---------------
Date and, with respect to the Excess Collateral, the Transfer Date relating to
such Distribution Date, the period beginning on the preceding Distribution Date
continuing through the day preceding such Distribution Date, except the first
Interest Period shall be deemed to be the 25 day period from and including the
Closing Date through and including the day preceding the initial Distribution
Date.
"Interest Shortfall" shall mean, with respect to any
------------------
Distribution Date, the sum of the Class A Interest Shortfall, the Class B
Interest Shortfall and the Excess Collateral Interest Shortfall distributable in
respect of the Investor Certificates as calculated in accordance with Section
4.06 of the Agreement.
"Invested Amount" shall mean, when used with respect to any
---------------
date, an amount equal to the sum of (a) the Class A Invested Amount, (b) the
Class B Invested Amount and (c) the Excess Collateral Amount each as of such
date; provided, however, that for purposes of determining the Investor Monthly
-------- -------
Servicing Fee and the Aggregate Invested Amount, the Invested Amount shall mean
an amount equal to the sum of (a) the Class A Adjusted Invested Amount, (b) the
Class B Adjusted Invested Amount and (c) the Excess Collateral Adjusted Amount
with respect to any date of determination.
"Investor Certificateholder" shall mean the Holder of record
--------------------------
of an Investor Certificate of Series 1998-3.
"Investor Certificates" shall mean the Class A Certificates,
---------------------
the Class B Certificates and the Excess Collateral.
"Investor Default Amount" shall mean, with respect to each
-----------------------
Distribution Date, an amount equal to the sum of (a) the Class A Investor
Default Amount for such Distribution Date, (b) the Class B Investor Default
Amount for such Distribution Date and (c) the Excess Collateral Default Amount
for such Distribution Date.
"Investor Monthly Servicing Fee" shall, with respect to any
------------------------------
Transfer Date, be equal to one-twelfth of
22
<PAGE> 27
the product of (A) the Series Servicing Fee Percentage and (B) the Adjusted
Invested Amount as of the last day of the Monthly Period preceding such Transfer
Date; provided, however, that with respect to the initial Monthly Period the
-------- -------
Investor Monthly Servicing Fee shall be $237,663.
"Investor Percentage" shall mean for any Monthly Period, (a)
-------------------
with respect to Finance Charge Receivables and Defaulted Receivables at any time
and Principal Receivables during the Revolving Period, the Floating Allocation
Percentage and (b) with respect to Principal Receivables during the Amortization
Period, the Fixed/Floating Allocation Percentage.
"Issuance Date" shall mean the Closing Date.
-------------
"LIBOR" shall mean, for any Interest Period, the London
-----
interbank offered rate for one-month Dollar deposits determined by the Trustee
for each Interest Period in accordance with the provisions of Section 4.15 of
the Agreement.
"LIBOR Determination Date" shall mean (i) June 23, 1998 for
------------------------
the period from and including the Closing Date through and including July 19,
1998 and (ii) the second Business Day prior to the commencement of the second
and each subsequent Interest Period.
"Minimum Transferor Interest" shall mean, with respect to any
---------------------------
period, 7% of the average of the aggregate amount of Principal Receivables for
such period.
"Monthly Interest" shall mean, with respect to any
----------------
Distribution Date, the sum of the Class A Monthly Interest, the Class B Monthly
Interest and the Excess Collateral Minimum Monthly Interest distributable in
respect of the Series 1998-3 Certificates as calculated in accordance with
Section 4.06 of the Agreement.
"Monthly Period" shall have the meaning specified in the
--------------
Agreement, except that the first Monthly Period with respect to the Series
1998-3 Certificates shall begin on and include the Closing Date and shall end on
and include June 30, 1998.
"Monthly Principal" shall mean the monthly principal
-----------------
distributable in respect of the Series 1998-3
23
<PAGE> 28
Certificates as calculated in accordance with Section 4.07 of the Agreement.
"Net Portfolio Yield" shall mean for the Series 1998-3
-------------------
Certificates, with respect to any Monthly Period, the annualized percentage
equivalent of a fraction, the numerator of which is an amount equal to the sum
of (a) the amount of Collections of Finance Charge Receivables allocated to the
Series 1998-3 Certificates for such Monthly Period and (b) the amount, if any
with respect to current and overdue Class A Net Swap Receipts deposited in the
Finance Charge Account on the related Transfer Date (such sum to be calculated
on a cash basis after subtracting an amount equal to the sum of the Investor
Default Amount for such Monthly Period and the current and overdue Class A Net
Swap Payments, if any, made to the Class A Swap Counterparty on the related
Transfer Date), and the denominator of which is the sum of the Class A Adjusted
Invested Amount, the Class B Adjusted Invested Amount and the Excess Collateral
Adjusted Amount as of the last day of the preceding Monthly Period.
"Pay Out Commencement Date" shall mean the earliest to occur
-------------------------
of (i) the date on which a Trust Pay Out Event is deemed to occur pursuant to
Section 9.01 of the Agreement, (ii) a Series 1998-3 Pay Out Event is deemed to
occur pursuant to Section 8 of this Series Supplement, (iii) the Class A
Scheduled Payment Date if the Class A Invested Amount is not paid in full on
such date and (iv) the Class B Scheduled Payment Date if the Class B Invested
Amount is not paid in full on such date.
"Paying Agent" shall mean The Bank of New York.
------------
"Plan Purchaser" shall have the meaning specified in
--------------
subsection 11(f) of this Series Supplement.
"Portfolio Adjusted Yield" shall mean, with respect to any
------------------------
Transfer Date, the average of the percentages obtained for each of the three
preceding Monthly Periods by subtracting the Base Rate for such Monthly Period
from the Portfolio Yield for such Monthly Period.
"Portfolio Yield" shall mean for the Series 1998-3
---------------
Certificates, with respect to any Monthly Period, the annualized percentage
equivalent of a fraction, the numerator of which is an amount equal to the sum
of (a) the amount of Collections of Finance Charge Receivables allocated to the
Investor Certificates for such Monthly
24
<PAGE> 29
Period, (b) the Principal Funding Investment Proceeds deposited into the Finance
Charge Account on the Transfer Date related to such Monthly Period, (c) the
amount, if any, withdrawn from the Reserve Account to be deposited into the
Finance Charge Account pursuant to subsections 4.17(b), 4.17(d), 4.17(e) and
4.17(f) of the Agreement on the Transfer Date relating to such Monthly Period
and (d) the amount, if any, with respect to current and overdue Class A Net Swap
Receipts deposited in the Finance Charge Account on the related Transfer Date
(such sum to be calculated on a cash basis after subtracting an amount equal to
the sum of the Investor Default Amount for such Monthly Period and the current
and overdue Class A Net Swap Payments, if any, made to the Class A Swap
Counterparty on the related Transfer Date), and the denominator of which is the
Invested Amount as of the last day of the preceding Monthly Period.
"Principal Funding Account" shall have the meaning set forth
-------------------------
in subsection 4.16(a) of the Agreement.
"Principal Funding Account Balance" shall mean, with respect
---------------------------------
to any date of determination during the Accumulation Period, the principal
amount, if any, on deposit in the Principal Funding Account on such date of
determination.
"Principal Funding Investment Proceeds" shall mean, with
-------------------------------------
respect to each Interest Period during the Accumulation Period, the investment
earnings on funds in the Principal Funding Account (net of investment expenses
and losses) for such Interest Period.
"Principal Funding Investment Shortfall" shall mean, with
--------------------------------------
respect to each Interest Period during the Accumulation Period, the amount, if
any, by which the Principal Funding Investment Proceeds are less than the
Covered Amount.
"Principal Shortfalls" shall mean, with respect to any
--------------------
Distribution Date (a) during the Accumulation Period, the amount, if any, by
which the Controlled Deposit Amount exceeds the sum of the Class A Monthly
Principal, Class B Monthly Principal and Excess Collateral Monthly Principal for
such Distribution Date or (b) during the Rapid Amortization Period, (i) the
amount, if any, by which the Class A Invested Amount exceeds the Class A Monthly
Principal for such Distribution Date, (ii) on and after the Class B Principal
Commencement
25
<PAGE> 30
Date, the amount, if any, by which the Class B Invested Amount exceeds the Class
B Monthly Principal for such Distribution Date and (iii) on and after the Excess
Collateral Principal Commencement Date, the amount if any, by which the Excess
Collateral Amount exceeds the Excess Collateral Monthly Principal for such
Distribution Date.
"Rapid Amortization Period" shall mean the period commencing
-------------------------
on the Pay Out Commencement Date and ending on the earlier to occur of (i) the
date of termination of the Trust pursuant to Section 12.01 of the Agreement or
(ii) the Series 1998-3 Termination Date.
"Rating Agency" shall mean each of Fitch IBCA, Inc., Moody's
-------------
and Standard & Poor's.
"Rating Agency Condition" shall mean the notification in
-----------------------
writing by each Rating Agency to the Transferor, the Servicer and the Trustee
that any action will not result in any Rating Agency reducing or withdrawing its
then existing rating of the investor certificates of any outstanding Series or
class with respect to which it is a Rating Agency.
"Reallocated Class B Principal Collections" shall have the
-----------------------------------------
meaning specified in subsection 4.14(b) of the Agreement.
"Reallocated Excess Collateral Principal Collections" shall
---------------------------------------------------
have the meaning specified in subsection 4.14(a) of the Agreement.
"Reallocated Principal Collections" shall mean the sum of
---------------------------------
Reallocated Class B Principal Collections and Reallocated Excess Collateral
Principal Collections.
"Reference Banks" shall mean four major banks in the London
---------------
interbank market selected by the Servicer.
"Required Accumulation Factor Number" shall be equal to a
-----------------------------------
fraction, rounded upwards to the nearest whole number, the numerator of which is
one and the denominator of which is equal to the lowest monthly principal
payment rate on the Accounts, expressed as a decimal, for the 12 months
preceding the date of such calculation.
"Required Reserve Account Amount" shall mean, with respect to
-------------------------------
any Transfer Date on or after the Reserve
26
<PAGE> 31
Account Funding Date, an amount equal to (a) 0.50% of the Invested Amount or (b)
any other amount designated by the Transferor; provided, however, that if such
-------- -------
designation is of a lesser amount, the Transferor shall (i) provide the
Servicer, the Excess Collateral Holders and the Trustee with evidence that the
Rating Agency Condition shall have been satisfied and (ii) deliver to the
Trustee a certificate of an authorized officer to the effect that, based on the
facts known to such officer at such time, in the reasonable belief of the
Transferor, such designation will not cause a Pay Out Event or an event that,
after the giving of notice or the lapse of time, would cause a Pay Out Event to
occur with respect to Series 1998-3.
"Reserve Account" shall have the meaning specified in
---------------
subsection 4.17(a) of the Agreement.
"Reserve Account Funding Date" shall mean the Transfer Date
----------------------------
which occurs not later than the earliest of (a) the Transfer Date with respect
to the Monthly Period which commences 3 months prior to the commencement of the
Accumulation Period; (b) the first Transfer Date for which the Portfolio
Adjusted Yield is less than 2.0%, but in such event the Reserve Account Funding
Date shall not be required to occur earlier than the Transfer Date which
commences 12 months prior to the commencement of the Accumulation Period; (c)
the first Transfer Date for which the Portfolio Adjusted Yield is less than
3.0%, but in such event the Reserve Account Funding Date shall not be required
to occur earlier than the Transfer Date which commences 6 months prior to the
commencement of the Accumulation Period; or (d) the first Transfer Date for
which the Portfolio Adjusted Yield is less than 3.5%, but in such event the
Reserve Account Funding Date shall not be required to occur earlier than the
Transfer Date which commences 4 months prior to the commencement of the
Accumulation Period.
"Reserve Account Surplus" shall mean, as of any Transfer Date
-----------------------
following the Reserve Account Funding Date, the amount, if any, by which the
amount on deposit in the Reserve Account exceeds the Required Reserve Account
Amount.
"Reserve Draw Amount" shall have the meaning specified in
-------------------
subsection 4.17(c) of the Agreement.
27
<PAGE> 32
"Reversion Date" shall mean the first Determination Date
--------------
following any Daily Deposit Date on which the Excess Spread Percentage for the
Monthly Period preceding such Determination Date is equal to or exceeds 2.50%
per annum.
"Revolving Period" shall mean the period from and including
----------------
the Closing Date to, but not including, the earlier of (a) the day the
Accumulation Period commences and (b) the Pay Out Commencement Date.
"Scheduled Series 1998-3 Termination Date" shall mean the
----------------------------------------
February 2004 Distribution Date.
"Series 1998-3" shall mean the Series of the First USA Credit
-------------
Card Master Trust represented by the Investor Certificates.
"Series 1998-3 Certificateholder" shall mean the holder of
-------------------------------
record of any Series 1998-3 Certificate.
"Series 1998-3 Certificateholders' Interest" shall have the
------------------------------------------
meaning specified in Section 4.04 of the Agreement.
"Series 1998-3 Certificates" shall have the meaning specified
--------------------------
in Section 1 of this Series Supplement.
"Series 1998-3 Pay Out Event" shall have the meaning specified
---------------------------
in Section 8 of this Series Supplement.
"Series 1998-3 Termination Date" shall mean the earlier to
------------------------------
occur of (i) the day after the Distribution Date on which the Investor
Certificates are paid in full, or (ii) the Scheduled Series 1998-3 Termination
Date.
"Series Servicing Fee Percentage" shall mean 1.50% for so long
-------------------------------
as First USA Bank is the Servicer or 2.00% if First USA Bank is no longer the
Servicer.
"Subordinate Principal Collections" shall have the meaning set
---------------------------------
forth in subsection 4.05(b)(ii) of the Agreement.
"Targeted Holder" shall mean each holder of a right to receive
---------------
interest or principal with respect to the Excess Collateral (or other interests
in the Trust), other than certificates (or other such interests) with respect to
which an opinion is rendered that such certif-
28
<PAGE> 33
icates (or other such interests) will be treated as debt for federal income tax
purposes, and any holder of a right to receive any amount in respect of the
Transferor Interest; provided, that any Person holding more than one interest
--------
each of which would cause such Person to be a Targeted Holder shall be treated
as a single Targeted Holder.
"Transfer" shall have the meaning specified in subsection
--------
11(a) of this Series Supplement.
"Transfer and Administration Agreement" shall mean the
-------------------------------------
agreement among the Transferor and the Excess Collateral Holders, dated the
Closing Date, as amended, supplemented or otherwise modified from time to time.
"Unpaid Investor Monthly Servicing Fee" shall mean with
-------------------------------------
respect to any Transfer Date, the amount of the Investor Monthly Servicing Fee
with respect to such Transfer Date not distributed to the Servicer pursuant to
subsection 4.09(a)(iii), subsection 4.09(b)(ii), subsection 4.09(c)(i), or
subsection 4.13(a) of the Agreement and any overdue Investor Monthly Servicing
Fee from prior Transfer Dates.
SECTION 3. Reassignment and Transfer Terms. The Series 1998-3
-------------------------------
Certificates shall be subject to retransfer to the Transferor at its option, in
accordance with the terms specified in subsection 12.02(a) of the Agreement, on
any Distribution Date on or after the Distribution Date on which the Invested
Amount is reduced to an amount less than or equal to 5% of the Initial Invested
Amount. The deposit required in connection with any such repurchase shall be
equal to the Invested Amount plus accrued and unpaid interest on the Series
1998-3 Certificates through the Record Date preceding the Distribution Date on
which the repurchase occurs.
SECTION 4. Delivery and Payment for the Series 1998-3
------------------------------------------
Certificates. The Transferor shall execute and deliver the Class A Certificates
- ------------
and the Class B Certificates to the Trustee for authentication in accordance
with Section 6.01 of the Agreement. The Trustee shall deliver the Class A
Certificates and the Class B Certificates when authenticated in accordance with
Section 6.02 of the Agreement.
29
<PAGE> 34
SECTION 5. Depositary; Form of Delivery of the Series 1998-3
-------------------------------------------------
Certificates. (a) The Class A Certificates and the Class B Certificates shall be
- ------------
delivered as Book-Entry Certificates as provided in Sections 6.01 and 6.10 of
the Agreement.
(b) The Depositary for Series 1998-3 shall be The Depository
Trust Company, and the Class A Certificates and the Class B Certificates shall
be initially registered in the name of Cede & Co., its nominee. The Class A
Certificates and the Class B Certificates will initially be held by the Trustee
as custodian for The Depository Trust Company.
SECTION 6. Article IV of Agreement. (A) Sections 4.01, 4.02
-----------------------
and 4.03 of the Agreement shall be read in their entirety as provided in the
Agreement except for subsections 4.02(b) and (c) of the Agreement which shall,
for purposes of this Series Supplement, read in their entirety as follows:
"(b) The Finance Charge and Principal Accounts. The Trustee, for the
-----------------------------------------
benefit of the Series 1998-3 Certificateholders, shall establish and
maintain in the name of the Trust with a Qualified Institution (other
than the Transferor), which shall initially be the Paying Agent, two
segregated trust accounts (the "Finance Charge Account" and the
----------------------
"Principal Account," respectively), bearing a designation clearly
-----------------
indicating that the funds therein are held for the benefit of the
Series 1998-3 Certificateholders. The Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the
Finance Charge Account and the Principal Account and in all proceeds
thereof. The Finance Charge Account and the Principal Account shall be
under the sole dominion and control of the Trustee for the benefit of
the Series 1998-3 Certificateholders. Pursuant to authority granted to
it hereunder, the Servicer shall have the revocable power to instruct
the Trustee to withdraw funds from the Finance Charge Account and the
Principal Account for the purpose of carrying out the Servicer's or the
Trustee's duties hereunder. The Trustee at all times shall maintain
copies of all written reports and instructions that it receives
reflecting each transaction in the
30
<PAGE> 35
Principal Account and the Finance Charge Account and that funds held
therein shall at all times be held in trust for the benefit of the
Series 1998-3 Certificateholders.
(c) The Distribution Account. The Trustee, for the benefit of the
------------------------
Series 1998-3 Certificateholders, shall cause to be established and
maintained in the name of the Trust, with an office or branch of a
Qualified Institution (other than the Transferor), which shall
initially be the Paying Agent, a non-interest bearing segregated
account (the "Distribution Account") bearing a designation clearly
--------------------
indicating that the funds deposited therein are held in trust for the
benefit of the Series 1998-3 Certificateholders. The Trustee shall
possess all right, title and interest in all funds on deposit from time
to time in the Distribution Account and in all proceeds thereof. The
Distribution Account shall be under the sole dominion and control of
the Trustee for the benefit of the Series 1998-3 Certificateholders."
(B) Article IV of the Agreement (except for Sections 4.01, 4.02 and 4.03
thereof) shall read in its entirety as follows and shall be applicable only to
the Series 1998-3 Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.04 Rights of Certificateholders. The Investor
----------------------------
Certificates shall represent undivided interests in the Trust, consisting of the
right to receive, to the extent necessary to make the required payments with
respect to such Investor Certificates at the times and in the amounts specified
in this Agreement, (a) the Floating Allocation Percentage and Fixed/Floating
Allocation Percentage (as applicable from time to time) of Collections received
with respect to the Receivables, (b) funds on deposit in the Collection Account,
the Finance Charge Account, the Principal Account, the Principal Funding
Account, the Reserve Account and the Distribution Account (for such Series, the
"Series 1998-3 Certificateholders' Interest") and (c) with respect to
------------------------------------------
31
<PAGE> 36
the Class A Certificates, the Class A Net Swap Receipts received with respect to
the Class A Interest Rate Swap. The Excess Collateral shall be subordinate to
the Class A Certificates and the Class B Certificates. The Class B Certificates
shall be subordinate to the Class A Certificates. The Exchangeable Transferor
Certificate shall not represent any interest in the Collection Account, the
Finance Charge Account, the Principal Account, the Principal Funding Account,
the Reserve Account or the Distribution Account, except as specifically provided
in this Article IV.
Section 4.05 Collections and Allocation.
--------------------------
(a) Collections. The Servicer will apply or will
-----------
instruct the Trustee to apply all funds on deposit in the Collection Account,
the Finance Charge Account, the Principal Account, the Principal Funding
Account, the Reserve Account or the Distribution Account allocable to the Series
1998-3 Certificates as described in this Article IV.
(b) Daily Allocations During the Revolving Period.
---------------------------------------------
During the Revolving Period, the Servicer shall, prior to the close of business
on each Date of Processing, allocate the following amounts as set forth below:
(i) Allocate to the Series 1998-3 Certificateholders
the Floating Allocation Percentage of Collections of Finance Charge
Receivables and deposit and retain in the Finance Charge Account (A)
prior to the Calculation Date in each Monthly Period an amount equal to
the product of (x) the Floating Allocation Percentage and (y) the
aggregate amount of Collections of Finance Charge Receivables on such
Date of Processing, or (B) on and after each such Calculation Date to
and including the last day of such Monthly Period, the lesser of (x)
the product of (1) the Floating Allocation Percentage and (2) the
aggregate amount of Collections of Finance Charge Receivables on such
Date of Processing and (y) the excess of (1) the sum of the Monthly
Interest, the Interest Shortfall, the Default Interest and the current
and overdue Class A Net Swap Payments, if any, due to the Class A Swap
Counterparty for the Distribution Date following the then current
Monthly Period (plus, if the Transferor is not the Servicer, the
Investor Monthly Servicing Fee) over
32
<PAGE> 37
(2) the amounts previously deposited in the Finance Charge Account with
respect to the current Monthly Period pursuant to this subsection
4.05(b)(i) of the Agreement. On each Date of Processing on and after
each Calculation Date, Collections of Finance Charge Receivables
allocated to the Series 1998-3 Certificates in excess of the amount
required to be deposited and retained in the Finance Charge Account as
provided above shall be held by the Servicer and applied in accordance
with subsection 4.05(f) of the Agreement. In addition, on the Closing
Date, the Transferor shall make a deposit to the Finance Charge Account
in an amount equal to $2,440,000 to be applied as Collections of
Finance Charge Receivables allocated to the Series 1998-3 Certificates.
Notwithstanding the foregoing, on each Date of Processing from and
including each Daily Deposit Date to but excluding the immediately
succeeding Reversion Date, the Servicer shall be required to allocate
to the Series 1998-3 Certificateholders the Floating Allocation
Percentage of Collections of Finance Charge Receivables and deposit and
retain in the Finance Charge Account an amount equal to the product of
(i) the Floating Allocation Percentage and (ii) the aggregate amount of
Collections of Finance Charge Receivables on such Date of Processing.
(ii) Allocate to the Series 1998-3 Certificateholders
an amount equal to the product of (A) the Floating Allocation
Percentage on such Date of Processing and (B) the aggregate amount of
Collections of Principal Receivables on such Date of Processing and pay
such amount to the Transferor subject to the obligation of the
Transferor to make an amount equal to the Reallocated Principal
Collections and Excess Principal Collections for such Monthly Period
available on the related Transfer Date in accordance with subsection
4.05(f) of the Agreement; provided, however, that the amount to be paid
-------- -------
to the Transferor pursuant to this subsection 4.05(b)(ii) of the
Agreement on any Date of Processing shall be paid only if the
Transferor Interest on such Date of Processing is greater than zero
(after giving effect to all Principal Receivables transferred to the
Trust on such Date of Processing and after giving effect to Collections
of Principal Receivables on such Date of Processing) and otherwise
shall be deposited in the Collection Account
33
<PAGE> 38
and applied in accordance with subsection 4.03(f) of the Agreement;
provided, further, however, that on and after the Calculation Date if
-------- ------- -------
the amounts previously deposited in the Finance Charge Account with
respect to the current Monthly Period pursuant to subsection 4.05(b)(i)
of the Agreement are less than the sum of the Monthly Interest, the
Interest Shortfall, the Default Interest and the current and overdue
Class A Net Swap Payments, if any, due to the Class A Swap Counterparty
for the Distribution Date following the then current Monthly Period
(plus, if the Transferor is not the Servicer, the Investor Monthly
Servicing Fee) (the amount of such shortfall, the "Finance Charge
--------------
Deficit"), an amount not to exceed the product of (x) the sum of the
-------
Class B Floating Allocation Percentage and the Excess Collateral
Floating Allocation Percentage and (y) the Collections of Principal
Receivables on any such Date of Processing ("Subordinate Principal
---------------------
Collections") with respect to the then current Monthly Period will be
-----------
deposited into the Principal Account on a daily basis during such
Monthly Period in an aggregate amount not to exceed the Finance Charge
Deficit; at such time as the Finance Charge Deficit is equal to zero,
such amounts may be released from the Principal Account and paid to the
holder of the Exchangeable Transferor Certificate, subject to the
preceding proviso.
(c) Daily Allocations During the Accumulation Period.
------------------------------------------------
During the Accumulation Period, the Servicer shall, prior to the close of
business on each Date of Processing, allocate the following amounts as set forth
below:
(i) Allocate to the Series 1998-3 Certificateholders
and deposit and retain in the Finance Charge Account an amount equal to
the product of (A) the Floating Allocation Percentage on such Date of
Processing and (B) the aggregate amount of Collections of Finance
Charge Receivables on such Date of Processing.
(ii) Allocate to the Series 1998-3 Certificateholders
and retain in the Principal Account an amount equal to the product of
(x) the Fixed/Floating Allocation Percentage on such Date of Pro-
34
<PAGE> 39
cessing and (y) the aggregate amount of Collections of Principal
Receivables on such Date of Processing (for any such date, a
"Percentage Allocation"); provided, however, that if the sum of such
--------------------- -------- -------
Percentage Allocations with respect to the same Monthly Period exceeds
the Controlled Deposit Amount for the related Distribution Date, then
such excess shall be paid to the Holder of the Exchangeable Transferor
Certificate (subject to the obligation of the Transferor to make an
amount equal to the Reallocated Principal Collections and Excess
Principal Collections for such Monthly Period available on the related
Transfer Date in accordance with subsection 4.05(f)) of the Agreement
if the Transferor Interest on such Date of Processing is greater than
zero (after giving effect to all Principal Receivables transferred to
the Trust on such day) and otherwise shall be deposited in the
Collection Account and applied in accordance with subsection 4.03(f) of
the Agreement; provided, further, that on and after the Calculation
-------- -------
Date if there is a Finance Charge Deficit, Subordinate Principal
Collections with respect to each Monthly Period will be deposited into
the Principal Account on a daily basis during such Monthly Period in an
aggregate amount not to exceed the Finance Charge Deficit; at such time
as the Finance Charge Deficit is equal to zero, such amounts may be
released from the Principal Account to the holder of the Exchangeable
Transferor Certificate, subject to the preceding proviso.
(d) Daily Allocations During the Rapid Amortization
-----------------------------------------------
Period. During the Rapid Amortization Period, the Servicer shall, prior to the
- ------
close of business on each Date of Processing, allocate the following amounts as
set forth below:
(i) Allocate to the Series 1998-3 Certificateholders
and deposit and retain in the Finance Charge Account an amount equal to
the product of (A) the Floating Allocation Percentage on such Date of
Processing and (B) the aggregate amount of Collections of Finance
Charge Receivables on such Date of Processing.
(ii) Allocate to the Series 1998-3 Certificateholders
and deposit and retain in the Principal Account an amount equal to the
product of (A) the Fixed/Floating Allocation Percentage on such Date of
Processing and (B) the aggregate amount of Collections of Principal
Receivables on such Date of
35
<PAGE> 40
Processing; provided, however, that after the date on which an amount
-------- -------
of such Collections equal to the Invested Amount has been deposited
into the Collection Account and allocated to the Series 1998-3
Certificateholders, the amount determined in accordance with this
subparagraph (ii) shall be paid to the Holder of the Exchangeable
Transferor Certificate only if the Transferor Interest on such Date of
Processing is greater than zero (after giving effect to all Principal
Receivables transferred to the Trust on such day) and otherwise shall
be deposited in the Collection Account and applied in accordance with
subsection 4.03(f) of the Agreement.
(e) Daily Deposits. Notwithstanding the foregoing,
--------------
the Servicer need not make daily deposits of Collections into the Collection
Account at any time when the requirements of the third paragraph of subsection
4.03(a) of the Agreement are satisfied.
(f) Monthly Allocations During the Revolving Period
-----------------------------------------------
and Accumulation Period. To the extent not previously allocated pursuant to
- -----------------------
subsection 4.05(b), during the Revolving Period, the Servicer shall, on each
Transfer Date, allocate to the Series 1998-3 Certificateholders and deposit in
the Finance Charge Account an amount equal to (i) the lesser of (A) the product
of (x) the Floating Allocation Percentage with respect to the preceding Monthly
Period and (y) the aggregate amount of Collections of Finance Charge Receivables
for the related Monthly Period, and (B) the aggregate of the amounts to be
applied from amounts on deposit in the Finance Charge Account on such Transfer
Date pursuant to subsections 4.09(a)(i) through (iv), 4.09(b)(i) and (ii),
4.09(c)(i) and 4.13(a) through (k) of the Agreement, minus (ii) the amounts
deposited and retained in the Finance Charge Account daily during such Monthly
Period pursuant to subsection 4.05(b)(i) of the Agreement. Any such amounts, to
the extent they would be paid to First USA Bank, as Transferor or Servicer, need
not be so deposited but shall be deemed to have been so deposited and, as and
when specified in the subsections identified above, be deemed to have been paid
to First USA Bank pursuant to such subsections. During the Revolving Period and
the Accumulation Period, the Transferor shall, on each Transfer Date deposit in
the Principal Account an amount equal to the sum of (I) the excess of the amount
of Reallocated Principal Collections over the amount deposited and retained in
the Principal Account pursuant to subsection
36
<PAGE> 41
4.05(b)(ii) or 4.05(c)(ii) of the Agreement with respect to the Revolving Period
or the Accumulation Period, respectively, and (II) an amount equal to the amount
of Excess Principal Collections to be applied for the benefit of other Series
from amounts that were originally allocated to Series 1998-3, not to exceed (x)
during the Revolving Period, the Floating Allocation Percentage of Collections
of Principal Receivables for the related Monthly Period or (y) during the
Accumulation Period, the Fixed/Floating Allocation Percentage of Collections of
Principal Receivables for the related Monthly Period less the amount thereof
applied to pay Monthly Principal on the related Distribution Date.
(g) Notwithstanding anything in this Section 4.05, if
on any date the aggregate amount of Principal Receivables is less than the sum
of the Invested Amounts for all Series then outstanding, all Collections of
Principal Receivables on such date shall be deposited and applied in accordance
with subsection 4.03(f) of the Agreement.
The allocations to be made pursuant to this Section 4.05 of
the Agreement also apply to deposits into the Collection Account that are
treated as Collections, including Credit Adjustments, payment of the
reassignment price pursuant to Section 2.07 of the Agreement and proceeds from
the sale, disposition or liquidation of the Receivables pursuant to Section
9.02, 10.01, 12.01 or 12.02 of the Agreement and Section 3 of the Series
Supplement for Series 1998-3. Such deposits to be treated as Collections will be
allocated as Finance Charge Receivables or Principal Receivables as indicated in
the Agreement.
Section 4.06 Determination of Monthly Interest for the Series
------------------------------------------------
1998-3 Certificates. (a) The amount of monthly interest (for the Series 1998-3
- -------------------
Certificates, the "Class A Monthly Interest") distributable from the
------------------------
Distribution Account with respect to the Class A Certificates on any
Distribution Date shall be an amount equal to the product of (i) the product of
(x) the Class A Certificate Rate and (y) a fraction the numerator of which is
the actual number of days in the related Interest Period and the denominator of
which is 360 and (ii) the Class A Outstanding Principal Balance as of the close
of business on the last day of the preceding Monthly Period; provided, however,
-------- -------
that with respect to the first Distribution Date, Class A Monthly Interest shall
be
37
<PAGE> 42
equal to the product of (a) the Class A Certificate Rate for the period from
and including the Closing Date to and including July 19, 1998, (b) a fraction
the numerator of which is 25 and the denominator of which is 360 and (c) the
Class A Initial Invested Amount.
On the Determination Date preceding each Distribution Date,
the Servicer shall determine an amount (the "Class A Interest Shortfall") equal
--------------------------
to the excess, if any, of (x) the aggregate Class A Monthly Interest for the
Interest Period applicable to the preceding Distribution Date over (y) the
----
amount which was paid to the Class A Certificateholders in respect of interest
on such preceding Distribution Date. If there is a Class A Interest Shortfall
with respect to any Distribution Date, an additional amount ("Class A Default
---------------
Interest") shall be payable as provided herein with respect to the Class A
- --------
Certificates on each Distribution Date following such Distribution Date to and
including the Distribution Date on which such Class A Interest Shortfall is paid
to Class A Certificateholders equal to the product of (i) the product of (x) the
Class A Certificate Rate plus 2.00% per annum and (y) a fraction the numerator
of which is the actual number of days in the related Interest Period and the
denominator of which is 360 and (ii) such Class A Interest Shortfall.
Notwithstanding anything to the contrary herein, Class A Default Interest shall
be payable or distributed to Class A Certificateholders only to the extent
permitted by applicable law.
(b) The amount of monthly interest (for the Series
1998-3 Certificates, the "Class B Monthly Interest") distributable from the
------------------------
Distribution Account with respect to the Class B Certificates on any
Distribution Date shall be an amount equal to the product of (i) the product of
(x) the Class B Certificate Rate and (y) a fraction the numerator of which is
the actual number of days in the related Interest Period and the denominator of
which is 360 and (ii) the Class B Invested Amount as of the close of business on
the last day of the preceding Monthly Period; provided, however, that with
-------- -------
respect to the first Distribution Date, Class B Monthly Interest shall be equal
to the product of (a) the Class B Certificate Rate for the period from and
including the Closing Date to and including July 19, 1998, (b) a fraction the
numerator of which is 25 and the denominator of which is 360 and (c) the Class B
Initial Invested Amount.
38
<PAGE> 43
On the Determination Date preceding each Distribution Date,
the Servicer shall determine an amount (the "Class B Interest Shortfall") equal
--------------------------
to the excess, if any, of (x) the aggregate Class B Monthly Interest for the
Interest Period applicable to the preceding Distribution Date over (y) the
amount which was paid to the Class B Certificateholders in respect of interest
on such preceding Distribution Date. If there is a Class B Interest Shortfall
with respect to any Distribution Date, an additional amount ("Class B Default
---------------
Interest") shall be payable as provided herein with respect to the Class B
- --------
Certificates on each Distribution Date following such Distribution Date to and
including the Distribution Date on which such Class B Interest Shortfall is paid
to Class B Certificateholders equal to the product of (i) the product of (x) the
Class B Certificate Rate plus 2.00% per annum and (y) a fraction the numerator
of which is the actual number of days in the related Interest Period and the
denominator of which is 360 and (ii) such Class B Interest Shortfall.
Notwithstanding anything to the contrary herein, Class B Default Interest shall
be payable or distributed to Class B Certificateholders only to the extent
permitted by applicable law.
(c) The minimum amount of monthly interest (for the
Series 1998-3 Certificates, the "Excess Collateral Minimum Monthly Interest")
------------------------------------------
distributable with respect to the Excess Collateral on any Transfer Date shall
be an amount equal to the product of (i) the product of (x) the Excess
Collateral Minimum Rate and (y) a fraction the numerator of which is the actual
number of days in the related Interest Period and the denominator of which is
360 and (ii) the Excess Collateral Amount as of the close of business on the
last day of the preceding Monthly Period; provided, however, that with respect
-------- -------
to the first Transfer Date, Excess Collateral Minimum Monthly Interest shall be
equal to the product of (a) the Excess Collateral Minimum Rate for the period
from and including the Closing Date to and including July 19, 1998, (b) a
fraction the numerator of which is 25 and the denominator of which is 360 and
(c) the Excess Collateral Initial Amount.
On the Determination Date preceding each Transfer Date, the
Servicer shall determine an amount (the "Excess Collateral Interest Shortfall")
------------------------------------
equal to the excess, if any, of (x) the aggregate Excess Collateral Minimum
Monthly Interest for the Interest Period applicable to the preceding Transfer
Date over (y) the amount
----
39
<PAGE> 44
which was paid to the Excess Collateral Holders in respect of interest on such
preceding Transfer Date pursuant to the terms hereof.
Section 4.07 Determination of Monthly Principal. (a) The
----------------------------------
amount of monthly principal (the "Class A Monthly Principal") distributable from
-------------------------
the Principal Account with respect to the Class A Certificates on each Transfer
Date beginning with the Transfer Date in the month following the month in which
the Accumulation Period or, if earlier, the Rapid Amortization Period begins
shall be equal to the least of (i) the Available Investor Principal Collections
on deposit in the Principal Account with respect to such Transfer Date, (ii) for
each Transfer Date with respect to the Accumulation Period prior to the Class A
Scheduled Payment Date, the Controlled Deposit Amount for such Transfer Date and
(iii) the Class A Adjusted Invested Amount on such Transfer Date prior to any
deposit into the Principal Funding Account to be made on such day.
(b) The amount of monthly principal (the "Class B
-------
Monthly Principal") distributable from the Principal Account with respect to the
- -----------------
Class B Certificates on each Transfer Date, beginning with the Transfer Date
first preceding the Class B Principal Commencement Date, shall be an amount
equal to the least of (i) the Available Investor Principal Collections on
deposit in the Principal Account with respect to such Transfer Date (minus the
portion of such Available Investor Principal Collections applied to Class A
Monthly Principal on such Transfer Date), (ii) for each Transfer Date with
respect to the Accumulation Period prior to the Class B Scheduled Payment Date,
the Controlled Deposit Amount for such Transfer Date (minus the Class A Monthly
Principal for such Transfer Date) and (iii) the Class B Adjusted Invested Amount
on such Transfer Date (after taking into account any adjustments to be made on
such Transfer Date pursuant to Sections 4.12 and 4.14 of the Agreement on such
Transfer Date).
(c) The amount of monthly principal (the "Excess
------
Collateral Monthly Principal") distributable from the Principal Account with
- ----------------------------
respect to the Excess Collateral on each Transfer Date, beginning with the
Transfer Date first preceding the Excess Collateral Principal Commencement Date,
shall be an amount equal to the least of (i) the Available Investor Principal
Collections on deposit in the Principal Account with respect to such
40
<PAGE> 45
Transfer Date (minus the portion of such Available Investor Principal
Collections applied to Class A Monthly Principal and Class B Monthly Principal
on such Transfer Date), (ii) for each Transfer Date with respect to the
Accumulation Period prior to the Excess Collateral Scheduled Payment Date, the
Controlled Deposit Amount for such Transfer Date (minus the Class A Monthly
Principal and the Class B Monthly Principal for such Transfer Date) and (iii)
the Excess Collateral Adjusted Amount on such Transfer Date (after taking into
account any adjustments to be made on such Transfer Date pursuant to Sections
4.12 and 4.14 of the Agreement on such Transfer Date).
Section 4.08 Coverage of Required Amount for the Investor
--------------------------------------------
Certificates. On each Determination Date, the Servicer shall determine the
- ------------
amount (the "Class A Required Amount"), if any, by which the sum of (i) Class A
-----------------------
Monthly Interest for the following Distribution Date, (ii) any Class A Monthly
Interest previously due but not paid to the Class A Certificateholders on a
prior Distribution Date, (iii) Class A Default Interest, if any, for such
Distribution Date and any Class A Default Interest previously due but not paid
to the Class A Certificateholders on a prior Distribution Date, (iv) the Class A
Net Swap Payment for the following Transfer Date and any Class A Net Swap
Payment previously due but not paid to the Class A Swap Counterparty on any
prior Transfer Date, (v) if First USA Bank is no longer the Servicer, the Class
A Monthly Servicing Fee for the related Distribution Date and (vi) the Class A
Investor Default Amount, if any, for such Distribution Date exceeds the Class A
Available Funds for the related Monthly Period.
On each Determination Date, the Servicer shall determine the
amount (the "Class B Required Amount"), if any, equal to the sum of (x) the
-----------------------
amount, if any, by which the sum of (i) Class B Monthly Interest for the
following Distribution Date, (ii) any Class B Monthly Interest previously due
but not paid to the Class B Certificateholders on a prior Distribution Date,
(iii) Class B Default Interest, if any, for such Distribution Date and any Class
B Default Interest previously due but not paid to the Class B Certificateholders
on a prior Distribution Date and (iv) if First USA Bank is no longer the
Servicer, the Class B Monthly Servicing Fee for the related Distribution Date
exceeds the Class B Available Funds for the related Monthly Period and (y) the
amount, if any, by which the Class B Investor Default Amount, if any, for such
Distribution Date exceeds the amount of
41
<PAGE> 46
Excess Finance Charge Collections available to make payments with respect
thereto pursuant to subsection 4.13(d) of the Agreement.
In the event that the sum of the Class A Required Amount and
the Class B Required Amount for such Distribution Date is greater than zero, the
Servicer shall give written notice to the Trustee of such positive Class A
Required Amount or Class B Required Amount on the related Determination Date. In
the event that the Class A Required Amount for such Distribution Date is greater
than zero all or a portion of the Excess Finance Charge Collections with respect
to the related Transfer Date in an amount equal to the Class A Required Amount
for such Distribution Date shall be distributed from the Finance Charge Account
on such Distribution Date pursuant to subsection 4.13(a) of the Agreement. In
the event that the Class A Required Amount for such Transfer Date exceeds the
amount of Excess Finance Charge Collections with respect to such Transfer Date,
the Collections of Principal Receivables allocable to the Excess Collateral and
the Collections of Principal Receivables allocable to the Class B Certificates
with respect to the prior Monthly Period shall be applied as specified in
Section 4.14 of the Agreement. In the event that after the application of Excess
Finance Charge Collections there is a Class B Required Amount for such Transfer
Date, the Collections of Principal Receivables allocable to the Excess
Collateral (after application to the Class A Required Amount) shall be applied
as specified in Section 4.14 of the Agreement; provided, however, that the sum
-------- -------
of any payments pursuant to this paragraph shall not exceed the sum of the Class
A Required Amount and the Class B Required Amount.
Section 4.09 Monthly Payments. On each Transfer Date, the
----------------
Trustee, acting in accordance with written instructions from the Servicer
substantially in the form of Exhibit D hereto, shall make the withdrawals,
deposits and payments specified in subsections (a) through (h) of this Section
4.09.
(a) On the Transfer Date preceding each Distribution
Date, an amount equal to the Class A Available Funds deposited or deemed to have
been deposited into the Finance Charge Account for the related Monthly Period
will be distributed in the following priority:
42
<PAGE> 47
(i) an amount equal to Class A Monthly Interest for
such Distribution Date, plus the amount of any Class A Monthly Interest
----
previously due but not paid to Class A Certificateholders on a prior
Distribution Date, plus the amount of any Class A Default Interest for
----
such Distribution Date, shall be deposited by the Servicer or the
Trustee into the Distribution Account;
(ii) an amount equal to the Class A Net Swap Payment,
if any, for such Transfer Date, plus the amount of any Class A Net Swap
Payments previously due but not paid to the Class A Swap Counterparty
will be paid to the Class A Swap Counterparty;
(iii) if First USA Bank is no longer the Servicer, an
amount equal to the Class A Monthly Servicing Fee for such Distribution
Date shall be distributed to the Servicer;
(iv) an amount equal to the aggregate Class A
Investor Default Amount, if any, for such Distribution Date shall be
(A) distributed to the Holder of the Exchangeable Transferor
Certificate on Distribution Dates with respect to the Revolving Period,
but not exceeding the Transferor Interest (determined as of such
Distribution Date after giving effect to any Principal Receivables
transferred to the Trust during the Monthly Period relating to such
Distribution Date, any such amount in excess of the Transferor Interest
to be treated as Unallocated Principal Collections) and (B) deposited
in the Principal Account and treated as a portion of Available Investor
Principal Collections for Distribution Dates with respect to the
Amortization Period; and
(v) the balance, if any, shall constitute Excess
Finance Charge Collections and shall be allocated and distributed as
set forth in Section 4.13 of the Agreement.
(b) On the Transfer Date preceding each Distribution
Date, an amount equal to the Class B Available Funds deposited or deemed to have
been deposited in the Finance Charge Account for the related Monthly Period will
be distributed in the following priority:
43
<PAGE> 48
(i) an amount equal to the Class B Monthly Interest
for such Distribution Date, plus the amount of any Class B Monthly
----
Interest previously due but not paid to the Class B Certificateholders
on a prior Distribution Date, plus the amount of any Class B Default
----
Interest for such Distribution Date, shall be deposited by the Servicer
or the Trustee into the Distribution Account;
(ii) if First USA Bank is no longer the Servicer, an
amount equal to the Class B Monthly Servicing Fee for such Distribution
Date shall be distributed to the Servicer; and
(iii) the balance, if any, shall constitute Excess
Finance Charge Collections and shall be allocated and distributed as
set forth in Section 4.13 of the Agreement.
(c) On the Transfer Date preceding each Distribution
Date, an amount equal to the Excess Collateral Available Funds deposited or
deemed to have been deposited in the Finance Charge Account for the related
Monthly Period will be distributed in the following priority:
(i) if First USA Bank is no longer the Servicer, an
amount equal to the Excess Collateral Monthly Servicing Fee for such
Distribution Date shall be distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess
Finance Charge Collections and shall be allocated and distributed as
set forth in Section 4.13 of the Agreement.
(d) On each Transfer Date during the Revolving
Period, the Trustee shall distribute an amount equal to the Available Investor
Principal Collections deposited or deemed to have been deposited into the
Principal Account for the related Monthly Period in the following priority:
(i) an amount equal to the lesser of (A) the product
of (1) a fraction, the numerator of which is equal to the Available
Investor Principal Collections and the denominator of which is equal to
the sum of the Principal Collections available for
44
<PAGE> 49
sharing as specified in the related Series Supplement for each Series
and (2) the Principal Shortfall applicable to such other Series and (B)
remaining Available Investor Principal Collections, shall be treated as
Excess Principal Collections and be deposited in the applicable
principal accounts for such other Series with Principal Shortfalls; and
(ii) an amount equal to the excess, if any, of (A)
the Available Investor Principal Collections for such Transfer Date
over (B) the applications specified in subsection 4.09(d)(i) above
shall be paid to the Holder of the Exchangeable Transferor Certificate;
provided, however, that the amount to be paid to the Holder of the
-------- -------
Exchangeable Transferor Certificate pursuant to this subsection
4.09(d)(ii) with respect to such Transfer Date shall be paid to the
Holder of the Exchangeable Transferor Certificate only if the
Transferor Interest on the related Date of Processing is greater than
zero (after giving effect to the inclusion in the Trust of all
Receivables created on or prior to such Transfer Date and after giving
effect to Collections of Principal Receivables on such Transfer Date)
and otherwise shall be considered as Unallocated Principal Collections
and deposited into the Principal Account in accordance with subsection
4.03(f) of the Agreement.
(e) On each Transfer Date, during the Accumulation
Period or the Rapid Amortization Period, the Trustee shall distribute an amount
equal to the Available Investor Principal Collections deposited or deemed to
have been deposited into the Principal Account for the related Monthly Period in
the following priority:
(i) an amount equal to the Class A Monthly Principal
for such Transfer Date plus, to the extent of any applicable Principal
----
Shortfall for the related Distribution Date, Excess Principal
Collections from other Series, to the extent available, shall be (A)
during the Accumulation Period, deposited into the Principal Funding
Account, and (B) during the Rapid Amortization Period, deposited into
the Distribution Account;
(ii) after giving effect to the distribution referred
to in clause (i) above, an amount equal to the Class B Monthly
Principal plus, to the
----
45
<PAGE> 50
extent of any applicable Principal Shortfall for the related
Distribution Date, Excess Principal Collections from other Series, to
the extent available, shall be (A) during the Accumulation Period,
deposited into the Principal Funding Account, and (B) during the Rapid
Amortization Period, deposited into the Distribution Account;
(iii) after giving effect to the distributions
referred to in clauses (i) and (ii) above, an amount equal to the
Excess Collateral Monthly Principal plus, to the extent of any
----
applicable Principal Shortfall for the related Distribution Date,
Excess Principal Collections from other Series, to the extent
available, shall be (A) during the Accumulation Period, deposited into
the Principal Funding Account, and (B) during the Rapid Amortization
Period, paid to the Excess Collateral Holders;
(iv) an amount equal to the lesser of (A) the product
of (1) a fraction, the numerator of which is equal to the Available
Investor Principal Collections remaining after the application
specified in subsections 4.09(e)(i), (ii) and (iii) above and the
denominator of which is equal to the sum of the Available Investor
Principal Collections available for sharing as specified in the related
Series Supplement for each other Series and (2) the Principal
Shortfalls for all Series and (B) the Available Investor Principal
Collections, shall remain in the Principal Account to be treated as
Excess Principal Collections and applied to Series other than this
Series 1998-3; and
(v) an amount equal to the excess, if any, of (A) the
Available Investor Principal Collections over (B) the applications
specified in subsection 4.09(e)(i) through (iv) above shall be paid to
the Holder of the Exchangeable Transferor Certificate; provided,
--------
however, that the amount to be paid to the Holder of the Exchangeable
-------
Transferor Certificate pursuant to this subsection 4.09(e)(v) with
respect to such Transfer Date shall be paid to the Holder of the
Exchangeable Transferor Certificate only if the Transferor Interest on
the related Date of Processing is greater than zero (after giving
effect to the inclusion in the Trust of all Receivables created on or
prior to such Transfer Date and the application of payments referred to
in subsec-
46
<PAGE> 51
tion 4.03(b) of the Agreement) and otherwise shall be considered as
Unallocated Principal Collections and deposited into the Principal
Account in accordance with subsection 4.03(f) of the Agreement;
provided, further, that in no event shall the amount payable to the
-------- -------
Holder of the Exchangeable Transferor Certificate pursuant to this
subsection 4.09(e)(v) be greater than the Transferor Interest on such
Transfer Date.
(f) On the earlier to occur of the first Transfer
Date with respect to the Rapid Amortization Period or the Transfer Date
immediately preceding the Class A Scheduled Payment Date, the Trustee shall
withdraw from the Principal Funding Account and (i) deposit in the Distribution
Account the amount deposited in the Principal Funding Account pursuant to
subsections 4.09(e)(i) and 4.09(e)(ii) of the Agreement and (ii) pay to the
Excess Collateral Holders, in accordance with subsection 5.01(c) of the
Agreement, an amount equal to the lesser of the amount deposited in the
Principal Funding Account pursuant to subsection 4.09(e)(iii) of the Agreement
and the Excess Collateral Amount.
(g) [Reserved]
(h) On the earlier to occur of the first Distribution
Date with respect to the Rapid Amortization Period or the Class A Scheduled
Payment Date and on each Distribution Date thereafter, the Trustee shall pay in
accordance with Section 5.01 of the Agreement from the Distribution Account the
amount so deposited into the Distribution Account pursuant to subsection
4.09(f)(i) of the Agreement on the related Transfer Date in the following
priority:
(i) an amount equal to the lesser of such amount on
deposit in the Distribution Account and the Class A Invested Amount
shall be paid to the Class A Certificateholders; and
(ii) on the Class B Principal Commencement Date and
on each Distribution Date thereafter, after giving effect to the
distributions referred to in clause (i) above, an amount equal to the
lesser of such amount on deposit in the Distribution Account and the
Class B Invested Amount shall be paid to the Class B
Certificateholders.
47
<PAGE> 52
(i) The Accumulation Period is scheduled to commence
at the close of business on May 31, 2000; provided, however, that, if the
-------- -------
Accumulation Period Length (determined as described below) is less than 12
months, the date on which the Accumulation Period actually commences may, at the
option of the Servicer, upon written notice to the Trustee, be delayed to the
first Business Day of the month that is the number of months prior to the Class
A Scheduled Payment Date at least equal to the Accumulation Period Length and,
as a result, the number of Monthly Periods in the Accumulation Period will at
least equal the Accumulation Period Length. On each Determination Date until the
Accumulation Period begins, the Servicer will determine the "Accumulation Period
-------------------
Length" which will equal the number of months such that the sum of the
- ------
Accumulation Period Factors for each month during such period will be equal to
or greater than the Required Accumulation Factor Number; provided, however, that
-------- -------
the Accumulation Period Length will not be less than one month.
Section 4.10 Payment of Class A Certificate and Class B
------------------------------------------
Certificate Interest. On each Distribution Date, the Paying Agent shall pay in
- --------------------
accordance with Section 5.01 of the Agreement to the Class A Certificateholders
from the Distribution Account the amount deposited into the Distribution Account
pursuant to subsections 4.09(a)(i), 4.13(a), 4.14(a)(i)(x) and 4.14(b)(i) of the
Agreement on the related Transfer Date or such Distribution Date, as applicable
and to the Class B Certificateholders from the Distribution Account the amount
deposited into the Distribution Account pursuant to subsections 4.09(b)(i),
4.13(c) and 4.14(a)(i)(y) of the Agreement on the related Transfer Date.
Section 4.11 [Reserved]
Section 4.12 Investor Charge-Offs.
--------------------
(a) On each Distribution Date, the Servicer shall
calculate the Class A Investor Default Amount. If on any Distribution Date, the
Class A Investor Default Amount for such Distribution Date exceeds the sum of
the amount allocated with respect thereto pursuant to subsection 4.09(a)(iv),
subsection 4.13(a) and Section 4.14 of the Agreement with respect to the Monthly
Period immediately preceding such Distribution Date, the Excess Collateral
Amount will be reduced by the amount of such excess, but not more than the
Excess Collateral Amount
48
<PAGE> 53
for such Distribution Date. In the event that, but for the limitation on the
amount of such reduction in the preceding sentence, such reduction would cause
the Excess Collateral Amount to be a negative number, the Excess Collateral
Amount will be reduced to zero, and the Class B Invested Amount will be reduced
by the amount by which the Excess Collateral Amount would have been reduced
below zero. In the event that such reduction would cause the Class B Invested
Amount to be a negative number, the Class B Invested Amount will be reduced to
zero, and the Class A Invested Amount will be reduced by the amount by which the
Class B Invested Amount would have been reduced below zero, but not more than
the Class A Investor Default Amount for such Distribution Date (a "Class A
-------
Investor Charge-Off"). If the Class A Invested Amount has been reduced by the
- -------------------
amount of any Class A Investor Charge-Offs, it will be reimbursed on any
Distribution Date (but not by an amount in excess of the aggregate Class A
Investor Charge-Offs) by the amount of Excess Finance Charge Collections
allocated and available for such purpose pursuant to subsection 4.13(b) of the
Agreement.
(b) On each Distribution Date, the Servicer shall
calculate the Class B Investor Default Amount. If on any Distribution Date, the
Class B Investor Default Amount for such Distribution Date exceeds the amount of
Excess Finance Charge Collections and Reallocated Principal Collections which
are allocated and available to fund such amount pursuant to subsection 4.13(d)
and Section 4.14 of the Agreement, the Excess Collateral Amount (after giving
effect to any adjustments with respect thereto as described in the preceding
paragraph) will be reduced by the amount of such excess but not more than the
Excess Collateral Amount for such Distribution Date. In the event that, but for
the limitation on the amount of such reduction in the preceding sentence, such
reduction would cause the Excess Collateral Amount to be a negative number, the
Excess Collateral Amount shall be reduced to zero and the Class B Invested
Amount shall be reduced by the amount by which the Excess Collateral Amount
would have been reduced below zero, but not more than the Class B Investor
Default Amount for such Distribution Date (a "Class B Investor Charge-Off"). The
---------------------------
Class B Invested Amount will also be reduced by the amount of Reallocated Class
B Principal Collections in excess of the Excess Collateral Amount pursuant to
Section 4.14 of the Agreement and the amount of any portion of the Class B
Invested Amount
49
<PAGE> 54
allocated to the Class A Certificates to avoid a reduction in the Class A
Invested Amount pursuant to subsection 4.12(a) of the Agreement. The Class B
Invested Amount will thereafter be reimbursed (but not by an amount in excess of
the unpaid principal balance of the Class B Certificates) on any Distribution
Date by the amount of Excess Finance Charge Collections allocated and available
for that purpose as described under subsection 4.13(e) of the Agreement.
(c) On each Distribution Date, the Servicer shall
calculate the Excess Collateral Default Amount. If on any Distribution Date, the
Excess Collateral Default Amount for such Distribution Date exceeds the sum of
the amount of Excess Finance Charge Collections which are allocated and
available to fund such amount pursuant to subsection 4.13(h) of the Agreement,
the Excess Collateral Amount (after giving effect to any adjustments with
respect thereto as described in the preceding paragraphs) will be reduced by the
amount of such excess but not more than the Excess Collateral Amount for such
Distribution Date (an "Excess Collateral Charge-Off"). The Excess Collateral
----------------------------
Amount will also be reduced by the amount of Reallocated Principal Collections
pursuant to Section 4.14 of the Agreement and the amount of any portion of the
Excess Collateral Amount allocated to the Class A Certificates or the Class B
Certificates to avoid a reduction in the Class A Invested Amount, pursuant to
subsection 4.12(a) of the Agreement, or the Class B Invested Amount, pursuant to
subsection 4.12(b) of the Agreement, respectively. The Excess Collateral Amount
will thereafter be reimbursed (but not by an amount in excess of the unpaid
principal balance of the Excess Collateral Amount) on any Distribution Date by
the amount of Excess Finance Charge Collections allocated and available for that
purpose as described under subsection 4.13(i) of the Agreement.
Section 4.13 Excess Finance Charge Collections for the Series
------------------------------------------------
1998-3 Certificates. On each Transfer Date, the Servicer will apply or cause the
- -------------------
Trustee to apply es Excess Finance Charge Collections with respect to the
related Monthly Period, to make the following distributions in the following
priority:
(a) an amount equal to the Class A Required Amount,
if any, with respect to the related Monthly Period will be used to fund the
Class A Required
50
<PAGE> 55
Amount and be applied in accordance with subsection 4.09(a) of the Agreement;
(b) an amount equal to the aggregate amount of Class
A Investor Charge-Offs, which have not been previously reimbursed (after giving
effect to the allocation with respect to the related Distribution Date of
certain other amounts applied for that purpose) will be distributed to the
Holder of the Exchangeable Transferor Certificate on Transfer Dates with respect
to the Revolving Period, but not exceeding the Transferor Interest in Principal
Receivables on such day (after giving effect to any new Principal Receivables
transferred to the Trust on such day) and on Transfer Dates with respect to the
Amortization Period, will be deposited in the Principal Account and treated as a
portion of Available Investor Principal Collections for the related Distribution
Date;
(c) an amount equal to the amount of interest which
has accrued with respect to the Class B Outstanding Principal Balance at the
applicable Class B Certificate Rate but has not been deposited in the
Distribution Account for the benefit of the Class B Certificateholders either on
such Transfer Date or on a prior Transfer Date and any other amounts due and
owing on the related Distribution Date pursuant to subsection 4.09(b)(i) of the
Agreement will be deposited into the Distribution Account for payment to the
Class B Certificateholders;
(d) an amount equal to the aggregate Class B Investor
Default Amount, if any, for the related Distribution Date will be distributed to
the holder of the Exchangeable Transferor Certificate on Transfer Dates with
respect to the Revolving Period (but not exceeding the Transferor Interest in
Principal Receivables on such day (after giving effect to any new Principal
Receivables transferred to the Trust on such day)), and on Transfer Dates with
respect to the Amortization Period will be deposited in the Principal Account
and treated as a portion of Available Investor Principal Collections for the
related Distribution Date;
(e) an amount equal to the aggregate amount by which
the Class B Invested Amount has been reduced below the initial Class B Invested
Amount for reasons other than the payment of principal to the Class B
Certificateholders (but not in excess of the aggregate
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<PAGE> 56
amount of such reductions which have not been previously reimbursed) will be
distributed to the holder of the Exchangeable Transferor Certificate on Transfer
Dates with respect to the Revolving Period, but not in an amount exceeding the
Transferor Interest in Principal Receivables on such day (after giving effect to
any new Principal Receivables transferred to the Trust on such day) and on
Transfer Dates with respect to the Amortization Period will be deposited in the
Principal Account and treated as a portion of Available Investor Principal
Collections for the related Distribution Date;
(f) an amount equal to the Excess Collateral Minimum
Monthly Interest for such Transfer Date, plus the amount of any Excess
Collateral Minimum Monthly Interest previously due but not paid to the Excess
Collateral Holders on a prior Transfer Date will be paid to the Excess
Collateral Holders in accordance with subsection 5.01(c) of the Agreement;
(g) an amount equal to the Unpaid Investor Monthly
Servicing Fee will be paid to the Servicer;
(h) an amount equal to the aggregate Excess
Collateral Default Amount, if any, for the related Distribution Date will be
distributed to the holder of the Exchangeable Transferor Certificate on Transfer
Dates with respect to the Revolving Period (but not exceeding the Transferor
Interest in Principal Receivables on such day (after giving effect to any new
Principal Receivables transferred to the Trust on such day)), and on Transfer
Dates with respect to the Amortization Period will be deposited in the Principal
Account and treated as a portion of Available Investor Principal Collections for
the related Distribution Date;
(i) an amount equal to the aggregate amount by which
the Excess Collateral Amount has been reduced below the Excess Collateral
Initial Amount for reasons other than the payment of principal to the Excess
Collateral Holders (but not in excess of the aggregate amount of such reductions
which have not been previously reimbursed) will be distributed to the holder of
the Exchangeable Transferor Certificate on Transfer Dates with respect to the
Revolving Period, but not in an amount exceeding the Transferor Interest in
Principal Receivables on such day (after giving effect to any new Principal
Receivables transferred to the Trust on such day) and on Transfer Dates with
respect to the Amortiza-
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<PAGE> 57
tion Period will be deposited in the Principal Account and treated as a portion
of Available Investor Principal Collections for the related Distribution Date;
(j) on each Transfer Date from and after the Reserve
Account Funding Date, but prior to the date on which the Reserve Account
terminates as described in subsection 4.17(f) of the Agreement, an amount up to
the excess, if any, of the Required Reserve Account Amount over the Available
Reserve Account Amount shall be deposited into the Reserve Account; and
(k) the balance, if any, after giving effect to the
payments made pursuant to subparagraphs (a) through (j) above shall be paid to
the Excess Collateral Holders in accordance with subsection 5.01(c) of the
Agreement.
Section 4.14 Reallocated Principal Collections for the Series
------------------------------------------------
1998-3 Certificates.
- -------------------
(a) On each Distribution Date, the Servicer will
apply or cause the Trustee to apply an amount, not to exceed the Excess
Collateral Amount, equal to the product of (a)(i) during the Revolving Period,
the Excess Collateral Floating Allocation Percentage or (ii) during an
Amortization Period, the Excess Collateral Fixed/Floating Allocation Percentage
and (b) the amount of Collections of Principal Receivables with respect to the
related Monthly Period in the following priority (such collections applied in
accordance with clause (i) below are called "Reallocated Excess Collateral
-----------------------------
Principal Collections"):
- ---------------------
(i) an amount equal to the sum of (x) the excess, if
any, of the Class A Required Amount with respect to such related
Monthly Period over the amount of Excess Finance Charge Collections
with respect to such related Monthly Period and (y) the Class B
Required Amount with respect to the related Monthly Period which amount
shall be applied in priority first pursuant to subsections 4.09(a)(i)
through (iv) of the Agreement and then pursuant to subsections
4.09(b)(i) and (ii) and 4.13(c) and (d) of the Agreement; and
(ii) any such collections not applied in the
foregoing manner (and therefore not constituting Reallocated Excess
Collateral Principal Collections)
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<PAGE> 58
will, on Distribution Dates with respect to the Revolving Period, be
applied as Available Investor Principal Collections.
(b) On each Distribution Date, the Servicer will
apply or cause the Trustee to apply an amount, not to exceed the Class B
Invested Amount, equal to the product of (a)(i) during the Revolving Period, the
Class B Floating Allocation Percentage or (ii) during an Amortization Period,
the Class B Fixed/Floating Allocation Percentage and (b) the amount of
Collections of Principal Receivables with respect to the related Monthly Period
in the following priority (such collections applied in accordance with clause
(i) below are called "Reallocated Class B Principal Collections"):
-----------------------------------------
(i) an amount equal to the excess, if any, of the
Class A Required Amount with respect to such related Monthly Period
over the sum of (x) the amount of Excess Finance Charge Collections
with respect to such related Monthly Period and (y) the amount of
Reallocated Excess Collateral Principal Collections applied with
respect thereto for the related Monthly Period shall be applied in
priority pursuant to subsection 4.09(a)(i) through (iv) of the
Agreement; and
(ii) any such collections not applied in the
foregoing manner (and therefore not constituting Reallocated Class B
Principal Collections) will, on Distribution Dates with respect to the
Revolving Period, be applied as Available Investor Principal
Collections.
On each Distribution Date the Excess Collateral Amount shall
be reduced by the amount of Reallocated Excess Collateral Principal Collections
and by the amount of Reallocated Class B Principal Collections for such
Distribution Date. In the event that such reduction would cause the Excess
Collateral Amount to be a negative number, the Excess Collateral Amount shall be
reduced to zero and the Class B Invested Amount shall be reduced by the amount
by which the Excess Collateral Amount would have been reduced below zero. In the
event that the reallocation of Principal Collections would cause the Class B
Invested Amount to be a negative number on any Distribution Date, Principal
Collections shall be reallocated on such Distribution Date in an aggregate
amount
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<PAGE> 59
not to exceed the amount which would cause the Class B Invested Amount to be
reduced to zero.
Section 4.15 Determination of LIBOR.
----------------------
(a) On each LIBOR Determination Date, the Trustee
shall determine LIBOR on the basis of the rate for deposits in United States
dollars for a period equal to the relevant Interest Period which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such date. If such rate
does not appear on Telerate Page 3750, the rate for that LIBOR Determination
Date shall be determined on the basis of the rates at which deposits in United
States dollars are offered by the Reference Banks at approximately 11:00 a.m.,
London time, on that day to prime banks in the London interbank market for a
period equal to the relevant Interest Period. The Trustee shall request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If at least two such quotations are provided, the rate for that LIBOR
Determination Date shall be the arithmetic mean of the quotations. If fewer than
two quotations are provided as requested, the rate for that LIBOR Determination
Date will be the arithmetic mean of the rates quoted by major banks in New York
City, selected by the Servicer, at approximately 11:00 a.m., New York City time,
on that day for loans in United States dollars to leading European banks for a
period equal to the relevant Interest Period.
(b) The Class A Certificate Rate and the Class B
Certificate Rate applicable to the then current and the immediately preceding
Interest Periods may be obtained by any Series 1998-3 Certificateholder by
telephoning the Paying Agent at its corporate trust office at (212) 815-5737.
(c) On each LIBOR Determination Date, the Trustee
shall send to the Servicer by facsimile notification of LIBOR for the following
Interest Period. The Trustee shall cause the Class A Certificate Rate and the
Class B Certificate Rate applicable to an Interest Period to be provided to the
Luxembourg Stock Exchange as soon as possible after its determination but in no
event later than the first day of such Interest Period. In addition, the Trustee
shall cause the Class A Monthly Interest and the Class B Monthly Interest
applicable to an Interest Period to be provided to the Luxembourg Stock Exchange
within one Business Day of the date on which the
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<PAGE> 60
Trustee receives notification of the Class A Monthly Interest and the Class B
Monthly Interest from the Servicer.
Section 4.16 Principal Funding Account.
-------------------------
(a) The Servicer shall establish and maintain with a
Qualified Institution, which may be the Trustee, in the name of the Trustee, on
behalf of the Trust, for the benefit of the Investor Certificateholders, a
segregated trust account with the corporate trust department of such Qualified
Institution (the "Principal Funding Account"), bearing a designation clearly
-------------------------
indicating that the funds deposited therein are held for the benefit of the
Investor Certificateholders. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Principal Funding
Account and in all proceeds thereof. The Principal Funding Account shall be
under the sole dominion and control of the Trustee for the benefit of the
Investor Certificateholders. If any time the institution holding the Principal
Funding 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 ten (10) Business Days, establish a new Principal Funding Account
meeting the conditions specified above with a Qualified Institution, and shall
transfer any cash or any investments to such new Principal Funding Account. The
Trustee, at the written direction of the Servicer, shall (i) make withdrawals
from the Principal Funding Account from time to time, in the amounts and for the
purposes set forth in this Supplement, and (ii) on each Transfer Date (from and
after the commencement of the Accumulation Period) prior to termination of the
Principal Funding Account make a deposit into the Principal Funding Account in
the amount specified in, and otherwise in accordance with, subsection 4.09(e) of
the Agreement.
(b) Funds on deposit in the Principal Funding Account
shall be invested at the written direction of the Servicer by the Trustee in
Permitted Investments. Funds on deposit in the Principal Funding Account on any
Transfer Date, after giving effect to any withdrawals from the Principal Funding
Account on such Transfer Date, shall be invested in such investments that will
mature so that such funds will be available for withdrawal on or prior to the
following Transfer Date. The Trustee shall maintain for the benefit of the
Investor
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<PAGE> 61
Certificateholders possession of the negotiable instruments or securities, if
any, evidencing such Permitted Investments. No Permitted Investment shall be
disposed of prior to its maturity.
On the Transfer Date occurring in the month following the
commencement of the Accumulation Period and on each Transfer Date thereafter
with respect to the Accumulation Period, the Trustee, acting at the Servicer's
written direction given on such Transfer Date, shall (x) transfer from the
Principal Funding Account to the Finance Charge Account the Principal Funding
Investment Proceeds on deposit in the Principal Funding Account, but not in
excess of the Covered Amount, for application as Class A Available Funds, Class
B Available Funds and Excess Collateral Available Funds pursuant to subsections
4.09(a), 4.09(b) and 4.09(c), respectively, of the Agreement and (y) pay any
excess Principal Funding Investment Proceeds to the Excess Collateral Holders.
An amount equal to any Principal Funding Investment Shortfall will be deposited
in the Finance Charge Account on each Transfer Date from the Reserve Account to
the extent funds are available pursuant to subsections 4.17(d), 4.17(e) and
4.17(f) of the Agreement. Principal Funding Investment Proceeds (including
reinvested interest) shall not be considered part of the amounts on deposit in
the Principal Funding Account for purposes of this Series Supplement.
Section 4.17 Reserve Account.
---------------
(a) The Servicer shall establish and maintain with a
Qualified Institution, which may be the Trustee, in the name of the Trustee, on
behalf of the Trust, for the benefit of the Investor Certificateholders, a
segregated trust account with the corporate trust department of such Qualified
Institution (the "Reserve Account"), bearing a designation clearly indicating
---------------
that the funds deposited therein are held for the benefit of the Investor
Certificateholders. The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Reserve Account and in all
proceeds thereof. The Reserve Account shall be under the sole dominion and
control of the Trustee for the benefit of the Investor Certificateholders. If at
any time the institution holding the Reserve 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
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<PAGE> 62
Days, establish a new Reserve Account meeting the conditions specified above
with a Qualified Institution, and shall transfer any cash or any investments to
such new Reserve Account. The Trustee, at the written direction of the Servicer,
shall (i) make withdrawals from the Reserve Account from time to time in an
amount up to the Available Reserve Account Amount at such time, for the purposes
set forth in this Supplement, and (ii) on each Transfer Date (from and after the
Reserve Account Funding Date) prior to termination of the Reserve Account make a
deposit into the Reserve Account in the amount specified in, and otherwise in
accordance with, subsection 4.13(j) of the Agreement.
(b) Funds on deposit in the Reserve Account shall be
invested at the written direction of the Servicer by the Trustee in Permitted
Investments. Funds on deposit in the Reserve Account on any Transfer Date, after
giving effect to any withdrawals from the Reserve Account on such Transfer Date,
shall be invested in such investments that will mature so that such funds will
be available for withdrawal on or prior to the following Transfer Date. The
Trustee shall maintain for the benefit of the Investor Certificateholders
possession of the negotiable instruments or securities, if any, evidencing such
Permitted Investments. No Permitted Investment shall be disposed of prior to its
maturity. On each Transfer Date, all interest and earnings (net of losses and
investment expenses) accrued since the preceding Transfer Date on funds on
deposit in the Reserve Account shall be retained in the Reserve Account (to the
extent that the Available Reserve Account Amount is less than the Required
Reserve Account Amount) and the balance, if any, shall be deposited into the
Finance Charge Account for application as Collections of Finance Charge
Receivables allocable to the Investor Certificates on such Transfer Date. For
purposes of determining the availability of funds or the balance in the Reserve
Account for any reason under this Supplement, except as otherwise provided in
the preceding sentence, investment earnings on such funds shall be deemed not to
be available or on deposit.
(c) On each Transfer Date with respect to the
Accumulation Period prior to the payment in full of the Invested Amount and the
first Transfer Date with respect to the Rapid Amortization Period, the Servicer
shall calculate the "Reserve Draw Amount" which shall be equal to the Principal
-------------------
Funding Investment Shortfall with
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<PAGE> 63
respect to each Transfer Date with respect to the Accumulation Period or the
first Transfer Date with respect to the Rapid Amortization Period; provided,
--------
however, that such amount will be reduced to the extent that funds otherwise
- -------
would be available for deposit in the Reserve Account under subsection 4.13(j)
of the Agreement with respect to such Transfer Date.
(d) In the event that for any Transfer Date the
Reserve Draw Amount is greater than zero, the Reserve Draw Amount, up to the
Available Reserve Account Amount, shall be withdrawn from the Reserve Account on
such Transfer Date by the Trustee (acting in accordance with the written
instructions of the Servicer), deposited into the Finance Charge Account for
application in accordance with Section 4.09 of the Agreement.
(e) In the event that the Reserve Account Surplus on
any Transfer Date, after giving effect to all deposits to and withdrawals from
the Reserve Account with respect to such Transfer Date, is greater than zero,
the Trustee, acting in accordance with the written instructions of the Servicer,
shall withdraw from the Reserve Account and deposit in the Finance Charge
Account an amount equal to such Reserve Account Surplus for application in
accordance with Section 4.09 of the Agreement.
(f) Upon the earliest to occur of (i) the termination
of the Trust pursuant to Article XII of the Agreement, (ii) the day on which the
Invested Amount is paid in full to the Series 1998-3 Certificateholders, (iii)
if the Accumulation Period has not commenced, the occurrence of a Pay Out Event
with respect to Series 1998-3 and (iv) if the Accumulation Period has commenced,
the earlier of the first Transfer Date with respect to the Rapid Amortization
Period and the Class A Scheduled Payment Date, the Trustee, acting in accordance
with the written instructions of the Servicer, after the prior payment of all
amounts owing to the Series 1998-3 Certificateholders that are payable from the
Reserve Account as provided herein, shall withdraw from the Reserve Account and
deposit in the Finance Charge Account all amounts, if any, on deposit in the
Reserve Account for application in accordance with Section 4.09 of the
Agreement, and the Reserve Account shall be deemed to have terminated for
purposes of this Supplement.
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Section 4.18 Class A Interest Rate Swap.
--------------------------
(a) Prior to the Closing Date the Trustee on behalf
of the Trust shall have entered into the Class A Interest Rate Swap with the
Class A Swap Counterparty. Pursuant to the terms of the Class A Interest Rate
Swap, the Class A Swap Counterparty shall pay to the Trustee on each Transfer
Date the Class A Net Swap Receipt, if any, with respect to Class A Interest Rate
Swap plus the amount of any Class A Net Swap Receipt due but not paid with
respect to any previous Transfer Date. The Trustee shall deposit such Class A
Net Swap Receipt, if any, into the Finance Charge Account and shall apply such
amounts as Class A Available Funds pursuant to subsection 4.09. In addition, in
accordance with the terms of the Class A Interest Rate Swap, the Trustee on
behalf of the Trust shall pay to the Class A Swap Counterparty the Class A Net
Swap Payment, if any, with respect to the Class A Interest Rate Swap for such
Transfer Date, plus the amount of any Class A Net Swap Payment due but not paid
on any previous Transfer Date, from amounts applied pursuant to subsection
4.09(a)(ii). All payments by the Trust to the Class A Swap Counterparty or by
the Class A Swap Counterparty to the Trust with respect to the Class A Interest
Rate Swap will be made on a net basis. If the Class A Interest Rate Swap has not
been terminated and the Trustee has not received any Class A Net Swap Receipt
due with respect to the related Transfer Date prior to 10:00 a.m. on the date
such payment is due, (i) the Trustee shall notify the Class A Swap Counterparty,
the Transferor and the Servicer of such fact prior to 12:00 p.m. on such date,
(ii) if such failure is not remedied on or before the third Business Day after
notice of such failure is given to the Class A Swap Counterparty, the Trustee,
if directed by the Servicer in writing, shall designate an Early Termination
Date (as such term is defined in the Class A Interest Rate Swap) pursuant to the
Class A Interest Rate Swap and shall, if the Servicer so directs in writing,
terminate the Class A Interest Rate Swap pursuant to its terms, and (iii) the
Servicer shall provide the Trustee, prior to 4:30 p.m. on the related Transfer
Date, with new statements substantially in the forms of Exhibit D and Exhibit E
to this Series Supplement revised, if necessary, to reflect that the Class A Net
Swap Receipt (or any portion thereof) was not received by the Trustee for such
Transfer Date.
(b) The parties hereto agree that all obligations of the
Trustee on behalf of the Trust under the
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Class A Interest Rate Swap shall be paid from, and limited to, funds
specifically available therefor pursuant to subsections 4.09(a)(ii) and 4.13(a)
of this Series Supplement, and that, in each case, the Trustee shall not be
required to expend or risk its own funds or otherwise incur any liability in
connection with the Class A Interest Rate Swap.
(c) If a Responsible Officer of the Trustee has actual
knowledge of any event specified in Section 5 of the ISDA Master Agreement
comprising a part of the Class A Interest Rate Swap, the Trustee shall provide
written notice of such event to the Transferor, the Servicer and the Rating
Agencies. The Transferor upon becoming aware of any event specified in Section 5
of the ISDA Master Agreement comprising a part of the Class A Interest Rate
Swap, whether pursuant to notice from the Trustee or otherwise, shall
immediately provide the Trustee with written instructions as to the course of
action to be taken under Section 6 of the ISDA Master Agreement comprising a
part of the Class A Interest Rate Swap, including without limitation any notices
to be provided and whether or not an Early Termination Date (as defined in the
Class A Interest Rate Swap) should be designated and, if so, when such Early
Termination Date should be designated. Prior to receiving such written
instructions from the Transferor the Trustee shall not designate an Early
Termination Date with respect to the Class A Interest Rate Swap and shall not
terminate the Class A Interest Rate Swap.
(d) At the request of the Trustee, the Transferor shall
provide the Trustee with any document the Trustee is required to provide to the
Class A Swap Counterparty pursuant to Section 4(a) of the ISDA Master Agreement
comprising a part of the Class A Interest Rate Swap.
(e) Pursuant to the Class A Interest Rate Swap, the Class A
Swap Counterparty and the Servicer, on behalf of the Trustee, may at any time
following written notice to the Rating Agencies, agree to (i) terminate the
Class A Interest Rate Swap or (ii) have the Class A Swap Counterparty assign its
rights and obligations under the Class A Interest Rate Swap to a replacement
swap counterparty; provided that any such replacement swap counterparty must
--------
have a rating of at least "BBB-" from Standard & Poor's and "Baa3" from Moody's;
provided further that, if the terms of any such replacement inter-
- -------- -------
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est rate swap are not substantially the same as the Class A Interest Rate Swap
being replaced, the Rating Agency Condition must be satisfied with respect to
such replacement interest rate swap. In connection with any such termination or
assignment, the Transferor shall deliver to the Trustee an officer's certificate
stating that, based on the facts known to such officer at such time, in the
reasonable belief of the Transferor, such termination or such designation of a
replacement interest rate swap and swap counterparty, as the case may be, will
not cause a Pay Out Event or an event that, after the giving of notice or the
lapse of time, would cause a Pay Out Event to occur with respect to the Series
1998-3 Certificates. The Class A Interest Rate Swap is scheduled to terminate on
June 17, 1999; provided, however, that such date may be extended without the
-------- -------
consent of any Certificateholders or the Rating Agencies; and, provided,
--------
further, however, that the Transferor shall give the Rating Agencies written
- ------- -------
notice of any such extension.
SECTION 7. Article V of the Agreement. Article V of the
--------------------------
Agreement shall read in its entirety as follows and shall be applicable only to
the Series 1998-3 Certificates:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
Section 5.01 Distributions.
-------------
(a) On each Distribution Date, the Paying Agent shall
distribute (in accordance with the certificate delivered by the Servicer to the
Trustee pursuant to subsection 3.04(b) of the Agreement) to each Class A
Certificateholder of record on the preceding Record Date (other than as provided
in subsection 2.04(e) or in Section 12.03 of the Agreement respecting a final
distribution) such Certificateholder's pro rata share (based on the aggregate
--- ----
Undivided Interests represented by Class A Certificates held by such
Certificateholder) of amounts on deposit in the Distribution Account as are
payable to the Class A Certificateholders pursuant to subsection 4.09(h) and
Section 4.10 of the Agreement by check mailed to each Class A Certificateholder
at such Certificateholder's address as it appears on the Certificate Register
or, in the case of Class A Certificateholders holding Class A Certificates
evidencing Undivided Interests
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<PAGE> 67
aggregating not less than 80% of the Invested Amount, by wire transfer, at the
expense of such Class A Certificateholder, to an account or accounts designated
by such Class A Certificateholder by written notice given to the Paying Agent
not less than five 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 of the Class A Certificates at the
office or offices specified in the notice of such final distribution delivered
by the Trustee pursuant to Section 12.03 of the Agreement.
(b) On each Distribution Date, the Paying Agent shall
distribute (in accordance with the certificate delivered by the Servicer to the
Trustee pursuant to subsection 3.04(b) of the Agreement) to each Class B
Certificateholder of record on the preceding Record Date (other than as provided
in subsection 2.04(e) or in Section 12.03 of the Agreement respecting a final
distribution) such Certificateholder's pro rata share (based on the aggregate
--- ----
Undivided Interests represented by Class B Certificates held by such
Certificateholder) of amounts on deposit in the Distribution Account as are
payable to the Class B Certificateholders pursuant to subsection 4.09(h) and
Section 4.10 of the Agreement by check mailed to each Class B Certificateholder
at such Certificateholder's address as it appears on the Certificate Register
or, in the case of Class B Certificateholders holding Class B Certificates
evidencing Undivided Interests aggregating not less than 80% of the Class B
Invested Amount, by wire transfer, at the expense of such Class B
Certificateholder, to an account or accounts designated by such Class B
Certificateholder by written notice given to the Paying Agent not less than five
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 of the Class B Certificates at the office or offices
specified in the notice of such final distribution delivered by the Trustee
pursuant to Section 12.03 of the Agreement.
(c) On each Transfer Date, the Trustee shall
distribute (in accordance with the certificate delivered by the Servicer to the
Trustee pursuant to subsection 3.04(b) of the Agreement) to the Excess
Collateral Holders the amounts payable to the Excess Collateral Holder pursuant
to subsection 4.09(e)(iii), subsection 4.09(f)(ii), subsection 4.13(f),
subsection 4.13(k)
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and subsection 4.16(b) of the Agreement by wire transfer, at the expense of such
Excess Collateral Holders, to an account or accounts designated by such Excess
Collateral Holders by written notice given to the Trustee not less than five
days prior to the related Transfer Date.
Section 5.02 Monthly Certificateholders' Statement.
-------------------------------------
(a) On each Distribution Date, the Paying Agent shall
forward to each Certificateholder, each Rating Agency, during the term of the
Class A Interest Rate Swap, and the Class A Swap Counterparty a statement
substantially in the form of Exhibit E prepared by the Servicer and delivered to
the Trustee and the Paying Agent on the preceding Determination Date setting
forth the following information (which, in the case of (i), (ii) and (iii)
below, shall be stated on the basis of an original principal amount of $1,000
per Certificate):
(i) the total amount distributed;
(ii) the amount of such distribution allocable to
Certificate Interest;
(iii) the amount of such distribution allocable to
Certificate Principal;
(iv) the amount of Collections of Principal
Receivables processed during the related Monthly Period and allocated
in respect of the Class A Certificates, the Class B Certificates and
the Excess Collateral Amount, respectively;
(v) the amount of Collections of Finance Charge
Receivables processed during the related Monthly Period and allocated
in respect of the Class A Certificates, the Class B Certificates and
the Excess Collateral Amount, respectively, and the amount of Principal
Funding Investment Proceeds and investment earnings on amounts on
deposit in the Reserve Account;
(vi) the aggregate amount of Principal Receivables,
the Invested Amount, the Class A Invested Amount, the Class B Invested
Amount, the Excess Collateral Amount, the Floating Allocation
Percentage and, during the Amortization Period, the Fixed/Floating
Allocation Percentage with respect to
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<PAGE> 69
the Principal Receivables in the Trust as of the end of the day on the
Record Date;
(vii) the aggregate outstanding balance of Accounts
which are 35, 65, 95, 125 and 155 or more days Contractually Delinquent
as of the end of the day on the Record Date;
(viii) the aggregate Investor Default Amount, the
Class A Investor Default Amount, the Class B Investor Default Amount
and the Excess Collateral Default Amount for the related Monthly
Period;
(ix) the aggregate amount of Class A Investor
Charge-Offs and the amount by which the Class B Invested Amount and the
Excess Collateral Amount have been reduced with respect to the related
Monthly Period;
(x) the aggregate amount of Class A Investor
Charge-Offs reimbursed and the amount by which reductions of the Class
B Invested Amount and the Excess Collateral Amount have been reimbursed
on the Transfer Date immediately preceding such Distribution Date;
(xi) the amount of the Class A Monthly Servicing Fee,
the Class B Monthly Servicing Fee and the Excess Collateral Monthly
Servicing Fee for the related Monthly Period;
(xii) the amount of Reallocated Excess Collateral
Principal Collections and Reallocated Class B Principal Collections
with respect to such Distribution Date;
(xiii) the Excess Collateral Amount as of the close
of business on such Distribution Date;
(xiv) the Portfolio Yield for the related Monthly
Period;
(xv) the Base Rate for the related Monthly Period;
(xvi) the Principal Funding Account Balance on the
related Transfer Date;
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<PAGE> 70
(xvii) the Accumulation Shortfall;
(xviii) the Accumulation Period Commencement Date and
the Accumulation Period Length; and
(xix) the Principal Funding Investment Shortfall, the
Required Reserve Account Amount, the Reserve Account Balance and the
Reserve Draw Amount for such Monthly Period; and
(xx) the Class A Net Swap Payment, if any, for the
related Transfer Date or the Class A Net Swap Receipt, if any, for the
related Transfer Date.
(b) Annual Certificateholders' Tax Statement. On or
----------------------------------------
before January 31 of each calendar year, beginning with calendar year 1999, the
Trustee shall distribute to each Person who at any time during the preceding
calendar year was a Class A Certificateholder or a Class B Certificateholder, a
statement prepared by the Servicer containing the information required to be
contained in the regular monthly report to Series 1998-3 Certificateholders, as
set forth in subclauses (i), (ii) and (iii) above, aggregated for such calendar
year or the applicable portion thereof during which such Person was a Series
1998-3 Certificateholder, together with such other customary information
(consistent with the treatment of the Class A Certificates and Class B
Certificates as debt) as the Trustee or the Servicer deems necessary or
desirable to enable the Class A Certificateholders and the Class B
Certificateholders to prepare their tax returns. Such obligations of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
SECTION 8. Series 1998-3 Pay Out Events. If any one of the
----------------------------
following events shall occur with respect to the Series 1998-3 Certificates:
(a) failure on the part of the Transferor (i) to make
any payment or deposit required by the terms of (A) the Agreement or (B) this
Series Supplement, on or before the date occurring five days after the date such
payment or deposit is required to be made herein or (ii) duly to observe or
perform in any material respect any covenants or agreements of the Transferor
set forth in
66
<PAGE> 71
the Agreement or this Series Supplement, which failure has a material adverse
effect on the Series 1998-3 Certificateholders and which continues unremedied
for a period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Transferor by
the Trustee, or to the Transferor and the Trustee by the Holders of Series
1998-3 Certificates evidencing Undivided Interests aggregating not less than 50%
of the Invested Amount of this Series 1998-3, and continues to affect materially
and adversely the interests of the Series 1998-3 Certificateholders for such
period;
(b) any representation or warranty made by the
Transferor in the Agreement or this Series Supplement, or any information
contained in a computer file or microfiche list required to be delivered by the
Transferor pursuant to Section 2.01 or 2.06 of the Agreement, (i) shall prove to
have been incorrect in any material respect when made or when delivered, which
continues to be incorrect in any material respect for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Transferor by the Trustee, or to the
Transferor and the Trustee by the Holders of the Series 1998-3 Certificates
evidencing Undivided Interests aggregating more than 50% of the Invested Amount
of this Series 1998-3 and (ii) as a result of which the interests of the Series
1998-3 Certificateholders are materially and adversely affected and continue to
be materially and adversely affected for such period; provided, however, that a
-------- -------
Series 1998-3 Pay Out Event pursuant to this subsection 9(b) shall not be deemed
to have occurred hereunder if the Transferor has accepted reassignment of the
related Receivable, or all of such Receivables, if applicable, during such
period in accordance with the provisions of the Agreement;
(c) the average Portfolio Yield for any three
consecutive Monthly Periods is less than the average Base Rate for such three
consecutive Monthly Periods;
(d) the Transferor shall fail to convey Receivables
arising under Additional Accounts to the Trust, as required by subsection
2.06(a) of the Agreement; or
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<PAGE> 72
(e) any Servicer Default shall occur which would have
a material adverse effect on the Series 1998-3 Certificateholders.
then, in the case of any event described in subparagraph (a), (b) or (e), after
the applicable grace period set forth in such subparagraphs, either the Trustee
or the Holders of Series 1998-3 Certificates evidencing Undivided Interests
aggregating more than 50% of the Invested Amount of this Series 1998-3 by notice
then given in writing to the Transferor and the Servicer (and to the Trustee if
given by the Certificateholders) may declare that a pay out event (a "Series
------
1998-3 Pay Out Event") has occurred as of the date of such notice, and in the
- --------------------
case of any event described in subparagraphs (c) or (d), a Series 1998-3 Pay Out
Event shall occur without any notice or other action on the part of the Trustee
or the Series 1998-3 Certificateholders immediately upon the occurrence of such
event.
For purposes of Series 1998-3, the fifth sentence of subsection 9.02(a) of the
Agreement shall be amended to read in its entirety as follow:
"If, however, with respect to the portion of the Receivables allocable to any
outstanding Series, the holders of more than 50% of the principal amount of the
Class A Certificates and the Class B Certificates and in the case of the Excess
Collateral Amount, holders of more than 50% of the principal amount of the
Excess Collateral Amount as well as more than 50% of holders of interests in the
right to receive interest payments in respect of the Excess Collateral Amount,
instruct the Trustee not to sell the portion of the Receivables allocable to
such Series, the Trust shall continue with respect to such Series pursuant to
the terms of the Agreement and the Supplement."
SECTION 9. Series 1998-3 Termination. The right of the Series
-------------------------
1998-3 Certificateholders to receive payments from the Trust will terminate on
the first Business Day following the Series 1998-3 Termination Date.
SECTION 10. Periodic Finance Charges and Other Fees. The
---------------------------------------
Transferor hereby agrees that, except as otherwise required by any Requirement
of Law, or as is deemed by the Transferor to be necessary in order for the
Transferor to maintain its credit card business, based upon a
68
<PAGE> 73
good faith assessment by the Transferor, in its sole discretion, of the nature
of the competition in the credit card business, it shall not at any time reduce
the Periodic Finance Charges assessed on any Receivable or other fees on any
Account if, as a result of such reduction, the Transferor's reasonable
expectation of the Portfolio Yield as of such date would be less than the Base
Rate.
SECTION 11. Transfers of Excess Collateral. (a) No portion of
------------------------------
the Excess Collateral 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 11. No portion of the Excess Collateral or any interest therein may be
Transferred to any Person (other than Bankers Trust (Delaware), not in its
individual capacity but solely in its capacity as owner trustee of the First USA
Secured Note Trust 1998-3 and The Bank of New York, not in its individual
capacity but solely in its capacity as indenture trustee for the First USA
Secured Note Trust 1998-3) (each, an "Assignee"), unless the Assignee shall have
--------
executed and delivered the certification referred to in subsection 11(e) below.
Any attempted Transfer that would cause the number of Targeted Holders to exceed
ninety-nine shall be void.
(b) Each Assignee shall certify to the Transferor,
the Servicer, and the Trustee that it is either (A)(i) a citizen or resident of
the U.S., (ii) a corporation, partnership or other entity organized in or under
the laws of the U.S. or any political subdivision thereof which, if such entity
is a tax-exempt entity, recognizes that payments with respect to the Excess
Collateral may constitute unrelated business taxable income or (iii) a Person
not described in (i) or (ii) whose ownership of any interest in the Excess
Collateral is effectively connected with the conduct of a trade or business
within the United States (within the meaning of the Code) or (B) an estate or
trust the income of which is includible in gross income for U.S. federal income
tax purposes. Each Assignee also shall agree that (a) if it is a person
described in clause (A)(i) or (A)(ii) above, it will furnish to the Person from
whom it is acquiring any interest in the Excess Collateral, the Servicer and the
Trustee, a properly executed U.S. Internal Revenue Service Form W-9 (and will
agree to furnish a new Form W-9, or any successor applicable form, upon the
expiration
69
<PAGE> 74
or obsolescence of any previously delivered form) or (b) if it is a person
described in clause (A)(iii) above, it will furnish to the person from whom it
is acquiring any interest in the Excess Collateral, the Servicer and the
Trustee, a properly executed U.S. Internal Revenue Service Form 4224 (and will
agree to furnish a new Form 4224, or any successor applicable form, upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable U.S. laws), and, in each case, such
other certifications, representations or opinions of counsel as may be requested
by the Trustee.
(c) Each Initial Purchaser of any interest in the
Excess Collateral and any Assignee thereof shall certify to the Transferor, the
Servicer and the Trustee that, in the case of any Assignee, it has not acquired
and, in the case of each Initial Purchaser and any Assignee, it will not sell,
trade or transfer any interest in the Excess Collateral or cause an interest in
the Excess Collateral to be marketed on or through an "established securities
market" within the meaning of Section 7704(b)(1) of the Code and any treasury
regulation thereunder, including, without limitation, an over-the-counter-market
or an interdealer quotation system that regularly disseminates firm buy or sell
quotations. In addition, any Assignee shall certify, prior to any delivery or
Transfer to it of any Excess Collateral that it is not and will not become, for
so long as it holds an interest in the Excess Collateral, a partnership,
Subchapter S corporation or grantor trust for U.S. federal income tax purposes
or, if it is such a Person, the Excess Collateral will represent not more than
50% of the value of all of its assets. Each Initial Purchaser of an interest in
the Excess Collateral acknowledges that the Opinion of Counsel to the effect
that the Trust will not be treated as a publicly traded partnership taxable as a
corporation is dependent in part on the accuracy of its certifications described
in this subsection 11(c). For purposes of this Section 11, "Initial Purchaser"
shall mean the Transferor, Bankers Trust (Delaware), not in its individual
capacity but solely in its capacity as owner trustee of the First USA Secured
Note Trust 1998-3 and The Bank of New York, not in its individual capacity but
solely in its capacity as indenture trustee for the First USA Secured Note Trust
1998-3.
(d) Each Initial Purchaser of any interest in the
Excess Collateral shall, by its acceptance of
70
<PAGE> 75
the Excess Collateral, be deemed to have certified and each Assignee shall
certify to the Transferor, the Servicer and the Trustee (i) that it has
purchased its interest in the Excess Collateral for investment only and not with
a view to any public distribution thereof, (ii) that it will not offer, sell,
pledge or otherwise transfer its interest in all or any portion of the Excess
Collateral, except in compliance with the Securities Act and other applicable
laws and only (1) to the Transferor 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) and (iii) its purchase of its interest in
the Excess Collateral is not being made in reliance on the Prospectus. No Excess
Collateral Holders will have the right to require the Transferor to register the
Excess Collateral or any other securities under the Securities Act or any other
securities laws. Each holder by accepting a beneficial interest in the Excess
Collateral 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).
(e) Any request for registration of transfer of all
or any portion of the Excess Collateral shall be made at the office of the
Transfer Agent and Registrar and shall be accompanied by a letter of
representations from the prospective Excess Collateral Holders substantially in
the form attached as Exhibit F, executed by the ultimate beneficial purchaser of
the Excess Collateral Amount (or any portion thereof) in person or by such
prospective Excess Collateral Holder's attorney thereunto duly authorized in
writing, and receipt by the Trustee of the written consent of each of the
Transferor and the Servicer to such transfer, the Excess Collateral (or such
portion thereof) shall be transferred upon the Certificate Register. Such
transfers of all or any portion of the Excess Collateral shall be subject to the
restrictions set forth in this Section 11 and to such other restrictions as
shall be set forth in the letter of representations, substantially in the form
attached as Exhibit F, executed by the purchasing Excess Collateral Holder.
Successive registrations and registrations of transfers as aforesaid may be made
from time to time as
71
<PAGE> 76
desired, and each such registration shall be noted on the Certificate Register.
(f) No portion of the Excess Collateral or any
interest therein may be Transferred (including in the initial offering) to (a)
an "employee benefit plan" (as defined in Section 3(3) of ERISA), including
governmental plans and church plans, (b) any "plan" (as defined in Section
4975(e)(1) of the Code) including individual retirement accounts and Keogh
plans, or (c) any other entity whose underlying assets include "plan assets"
(within the meaning of Department of Labor Regulation Section 2510.3-101, 29
C.F.R. Section 2510.3-101 or otherwise under ERISA) by reason of a plan's
investment in the entity, including, without limitation, an insurance company
general account.
(g) The Transferor and the Servicer will facilitate
any transfer of the Excess Collateral consistent with the requirements of this
Section 11, including assisting in the determination as to whether the number of
Targeted Holders would exceed ninety-nine.
SECTION 12. Compliance with Withholding Requirements.
----------------------------------------
Notwithstanding any other provision of the Agreement, the Trustee and any Paying
Agent shall comply with all Federal withholding requirements with respect to
payments to the Excess Collateral Holders of interest, original issue discount,
or other amounts that the Trustee, any Paying Agent, the Servicer or the
Transferor reasonably believes are applicable under the Code. The consent of the
Excess Collateral Holders shall not be required for any such withholding. In the
event the Trustee or the Paying Agent withholds any amount from payments made to
any Excess Collateral Holders pursuant to federal withholding requirements, the
Trustee or the Paying Agent shall indicate to such Excess Collateral Holders the
amount withheld and all such amounts shall be deemed to have been paid to such
Excess Collateral Holder and the Excess Collateral Holders shall have no claim
therefor.
SECTION 13. Tax Characterization of the Excess Collateral. It
---------------------------------------------
is the intention of the parties hereto that the provisions of Section 3.07 of
the Agreement shall not apply to cause the Excess Collateral to be treated as
debt for Federal, state and local income and franchise tax purposes, but rather
it is the intention of the parties hereto that Excess Collateral be treated for
72
<PAGE> 77
Federal, state and local income and franchise tax purposes as an equity interest
in the assets of the Trust. In the event that the Excess Collateral is not so
treated, it is the intention of the parties that the Excess Collateral be
treated as an interest in a partnership that owns the Receivables.
SECTION 14. ERISA Legend. Each Class B Certificate will bear a
------------
legend or legends substantially in the following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF
FIRST USA BANK AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE
BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF
TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (III) A GOVERNMENTAL PLAN, AS
DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW
WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A
PERSON INVESTING "PLAN ASSETS" OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF
CLAUSES (IV) AND (V) ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY
ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
Each Certificate Owner by virtue of its beneficial interest in
the Class B Certificates shall be deemed to have made the representations and
warranties stated in such legend.
SECTION 15. Amendment of Agreement. The Transferor shall not
----------------------
amend, during the term of the Class A Interest Rate Swap, Sections 4.05 through
4.18 of the Agreement without the consent of the Class A Swap Counterparty.
SECTION 16. Amendment and Ratification of Agreement. As
---------------------------------------
supplemented by this Series Supplement, the Agreement is in all respects
ratified and confirmed and the Agreement as so supplemented by this Series
Supplement shall be read, taken, and construed as one and the same instrument.
Subsection 12.01(c) of the Agreement is hereby amended by substituting in the
second
73
<PAGE> 78
sentence thereof in place of the words "and pay the proceeds to all
Certificateholders of such Series . . ." the following: "and pay the proceeds to
the Investor Certificateholders of such Series . . ."
SECTION 17. Counterparts. This Series Supplement may be
------------
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all of such counterparts shall together constitute
but one and the same instrument.
SECTION 18. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 19. Additional Representations and Warranties of the
------------------------------------------------
Servicer. First USA Bank, as initial Servicer, hereby makes, and any Successor
- --------
Servicer by its appointment under the Agreement shall make the following
representations and warranties:
(a) 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 Supplement by the Servicer
and the performance of the transactions contemplated by this Supplement by the
Servicer, have been duly obtained, effected or given and are in full force and
effect.
(b) 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 normal operating procedures of the Servicer.
(c) Receivables Not To Be Evidenced by Promissory
---------------------------------------------
Notes. Except in connection with its enforcement or collection of an Account,
- -----
the Servicer will take no action to cause any Receivable to be evidenced by an
instrument or chattel paper (as defined in the UCC as in effect in the State of
Delaware).
74
<PAGE> 79
SECTION 19. Appointment of co-Paying Agent, co-Transfer Agent
-------------------------------------------------
and co-Registrar. BDL is appointed as co-paying agent and as co-transfer agent
- ----------------
and co-registrar in Luxembourg with respect to the Class A Certificates and the
Class B Certificates, for so long as either the Class A Certificates or the
Class B Certificates are listed on the Luxembourg Stock Exchange. Any reference
in this Series Supplement to the Paying Agent or the Transfer Agent and
Registrar shall be deemed to include BDL as co-paying agent or co-transfer agent
and co-registrar, as the case may be, unless the context requires otherwise.
75
<PAGE> 80
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Series 1998-3 Supplement to be duly executed by their
respective officers as of the day and year first above written.
FIRST USA BANK,
Transferor and Servicer
By: /s/ REBEKAH A. SAYERS
--------------------------
Name: Rebekah A. Sayers
Title: Vice President
THE BANK OF NEW YORK (DELAWARE),
Trustee
By: /s/ REYNE A. MACADAEG
--------------------------
Name: Reyne A. Macadaeg
Title: Assistant Vice President
<PAGE> 81
EXHIBIT A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. R-1
$
------------
Series Termination
Date: February 18, 2004 CUSIP NO. 337435DE8
FIRST USA CREDIT CARD MASTER TRUST CLASS A FLOATING RATE
ASSET BACKED CERTIFICATE, SERIES 1998-3
Evidencing an undivided interest in a trust, the corpus of which consists of
receivables generated from time to time in the ordinary course of business in a
portfolio of VISA(R) and MasterCard(R)* credit card accounts generated or to be
generated by First USA Bank (the "Bank").
(Not an interest in or a recourse obligation
of First USA Bank or any affiliate thereof)
This certifies that CEDE & CO. (the
"Certificateholder") is the registered owner of a fractional undivided interest
in the First USA Credit Card Master Trust (the "Trust") issued pursuant to the
Pooling and Servicing Agreement, dated as of September 1, 1992
- ----------
* VISA(R) and MasterCard(R) are registered trademarks of Visa USA
Incorporated and MasterCard International Incorporated, respectively.
<PAGE> 82
between the Bank, as Transferor (the "Transferor") and as Servicer (the
"Servicer"), and The Bank of New York (Delaware), as trustee (the "Trustee") of
the Trust (the "Agreement"; such term to include any Supplement or amendment
thereto) as supplemented by the Series 1998-3 Supplement (the "Series 1998-3
Supplement"), dated as of June 25, 1998, between the Bank, as Transferor and
Servicer, and the Trustee. The corpus of the Trust consists of all of the
Transferor's right, title and interest in a portfolio of receivables (the
"Receivables") existing in certain VISA(R) and MasterCard(R) revolving credit
card accounts identified in the Agreement from time to time (the "Accounts"),
all Receivables generated under the Accounts from time to time thereafter, all
monies due or to become due and all amounts received with respect to the
Receivables in existence in the Accounts, all monies on deposit in certain bank
accounts (excluding any investment earnings on such deposited amounts except as
set forth in the Series 1998-3 Supplement), the Class A Interest Rate Swap and
all other assets and interests constituting the Trust and all proceeds of the
foregoing.
Although a summary of certain provisions of the
Agreement is set forth below, 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 by writing to the
Trustee at The Bank of New York (Delaware), White Clay Center, Route 273,
Newark, Delaware, 19711, Attention: Bond Administration. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed to
them in the Agreement. This Certificate is one of a Series of Certificates
entitled "First USA Credit Card Master Trust Class A Floating Rate Asset Backed
Certificates, Series 1998-3" (the "Class A Certificates"), each of which
represents a fractional undivided interest in the Trust, and is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement, as amended from time to time, the Certificateholder by virtue of the
acceptance hereof assents and by which the Certificateholder is bound. In the
case of any conflict between terms specified in this Class A Certificate and
terms specified in the Agreement, the terms of the Agreement shall govern.
<PAGE> 83
The Transferor has structured the Agreement, the
Class A Certificates and the First USA Credit Card Master Trust Class B Floating
Rate Asset Backed Certificates, Series 1998-3 (the "Class B Certificates") with
the intention that the Class A Certificates and the Class B Certificates will
qualify under applicable tax law as indebtedness, and the Transferor and each
holder of a Class A Certificate (a "Class A Certificateholder") or any interest
therein, by acceptance of its Class A Certificate or any interest therein,
agrees to treat the Class A Certificates for purposes of federal, state, local
and foreign income or franchise taxes and any other tax imposed on or measured
by income, as indebtedness.
The Trust's assets are allocated in part to the
holders of the Class A Certificates, the holders of the Class B Certificates and
the holders of the First USA Credit Card Master Trust Excess Collateral, Series
1998-3 (the "Excess Collateral") (such holders together the "Investor
Certificateholders") with the remainder allocated to holders of other Series of
Certificates issued by the Trust, if any, and to the Transferor. In addition to
the Class A Certificates, the Class B Certificates and the Excess Collateral,
the Exchangeable Transferor Certificate will be reissued pursuant to the
Agreement and will represent the Transferor's interest in the Trust. The
reissued Exchangeable Transferor Certificate will represent the interest in the
Principal Receivables not represented by the Class A Certificates, the Class B
Certificates and the Excess Collateral (together the "Investor Certificates") or
any other Series of Certificates. The Exchangeable Transferor Certificate may be
exchanged by the Transferor pursuant to the Agreement for one or more Series of
Certificates and a reissued Exchangeable Transferor Certificate upon the
conditions set forth in the Agreement.
The Class A Initial Invested Amount is $800,000,000.
The Class A Invested Amount for any monthly Distribution Date will be an amount
equal to $800,000,000, minus the aggregate amount of principal payments made to
-----
the Class A Certificateholders prior to such Distribution Date and minus the
-----
excess, if any, of the aggregate amount of Class A Investor Charge-Offs over the
Class A Investor Charge-Offs reimbursed prior to such date.
The Class A Certificates will bear interest at the
rate of 5.71625% per annum on the Class
<PAGE> 84
A Initial Invested Amount from June 25, 1998 through July 19, 1998, and for each
Interest Period thereafter, the Class A Certificates will bear interest at a per
annum rate of 0.06% in excess of LIBOR as determined by the Trustee on the
related LIBOR Determination Date (each such rate as in effect from time to time,
the "Class A Certificate Rate"). Interest will be distributed to the extent of
available funds on July 20, 1998, and on the eighteenth day of each month
thereafter, or if such day is not a Business Day, the next succeeding Business
Day until the earlier of the day on which the Class A Invested Amount is paid in
full and the Scheduled Series 1998-3 Termination Date (each such date a
"Distribution Date"), in an amount equal to the product of (a) the actual number
of days in the related Interest Period divided by 360, (b) the Class A
Certificate Rate and (c) the Class A Outstanding Principal Balance on the last
day of the Monthly Period immediately preceding such Distribution Date. Interest
for a Distribution Date will accrue from and including the previous Distribution
Date (or in the case of the first Distribution Date, from and including the
Closing Date), to, and including, the day immediately preceding the current
Distribution Date. Interest payments will be made from Collections of Finance
Charge Receivables, the sum of the Class A Net Swap Receipts, if any, due but
not paid on any prior Transfer Date which have been deposited in the Finance
Charge Account, and certain other amounts allocated to the Class A Certificates
comprising Class A Available Funds and, in certain circumstances, from
Reallocated Principal Collections on July 20, 1998 and on each Distribution Date
thereafter until the Scheduled Series 1998-3 Termination Date. Interest will be
payable monthly on each Distribution Date to the Class A Certificateholders of
record as of the related Record Date. The Record Date with respect to any
Distribution Date shall be the last day of the calendar month preceding such
Distribution Date.
As described in the Agreement, Collections of
Principal Receivables with respect to any Monthly Period will be allocated on
the related Determination Date on the basis of the aggregate Investor Percentage
of all Series and the Transferor Percentage with respect to the Principal
Receivables. Such allocation will be performed both during the Revolving Period
and any Amortization Period. Throughout the existence of the Trust, the Servicer
will allocate to the Transferor, as holder of the Exchangeable Transferor
Certificate, an amount equal to the Trans-
<PAGE> 85
feror Percentage of the aggregate amount of Collections of Finance Charge
Receivables and Principal Receivables for each Monthly Period. During the
Revolving Period relating to the Investor Certificates, the Class B Floating
Allocation Percentage of Collections of Principal Receivables and the Excess
Collateral Floating Allocation Percentage of Collections of Principal
Receivables will be applied first as Reallocated Principal Collections, to the
extent required, and any remaining amounts together with the Class A Floating
Allocation Percentage of Principal Receivables will be distributed first to the
certificateholders of other Series to the extent of the amount of Principal
Shortfalls, if any, and then to the Transferor in an amount not to exceed the
amount of the Transferor Interest.
Unless a Pay Out Event has occurred, the Accumulation
Period will begin at the close of business on the last day of the Revolving
Period and will end on the earlier of (i) the commencement of the Rapid
Amortization Period, (ii) payment of the Invested Amount in full and (iii) the
Scheduled Series 1998-3 Termination Date. On each Transfer Date following the
commencement of the Accumulation Period, prior to the earlier of the payment of
the Class A Invested Amount in full and the commencement of the Rapid
Amortization Period, the Trustee will deposit in the Principal Funding Account
an amount equal to the least of (a) Available Investor Principal Collections
with respect to the preceding Monthly Period, (b) the applicable Controlled
Deposit Amount and (c) the Class A Adjusted Invested Amount prior to any such
deposit on such day. Amounts in the Principal Funding Account will be paid to
the Class A Certificateholders on the Class A Scheduled Payment Date. After the
full amount of the Class A Invested Amount has been deposited in the Principal
Funding Account and beginning with the Transfer Date related to the Class B
Principal Commencement Date, prior to the commencement of the Rapid Amortization
Period, the Trustee will deposit in the Principal Funding Account an amount
equal to the least of (a) the Available Investor Principal Collections with
respect to the preceding Monthly Period remaining after application thereof to
the Class A Invested Amount, (b) the applicable Controlled Deposit Amount (minus
the Class A Monthly Principal with respect to such Transfer Date) and (c) the
Class B Adjusted Invested Amount prior to any such deposit on such day. After
payment in full of the Class A Invested Amount, amounts in the Principal Funding
Account will be paid to the Class B Certificateholders on the Class B Scheduled
Payment
<PAGE> 86
Date. After the full amount of the sum of the Class A Invested Amount and the
Class B Invested Amount has been deposited in the Principal Funding Account,
prior to the commencement of the Rapid Amortization Period, the Trustee will
deposit in the Principal Funding Account an amount equal to the least of (a) the
Available Investor Principal Collections with respect to the preceding Monthly
Period remaining after application thereof to the Class A Invested Amount and
the Class B Invested Amount, (b) the applicable Controlled Deposit Amount (minus
the Class A Monthly Principal and the Class B Monthly Principal with respect to
such Transfer Date) and (c) the Excess Collateral Adjusted Amount prior to any
such deposit on such day. After payment in full of the Class A Invested Amount
and the Class B Invested Amount, amounts in the Principal Funding Account will
be paid to the Excess Collateral Holders on the Excess Collateral Scheduled
Payment Date. During the Accumulation Period, the portion of Available Investor
Principal Collections not applied to Class A Monthly Principal, Class B Monthly
Principal or Excess Collateral Monthly Principal on a Transfer Date will
generally be treated as Excess Principal Collections.
Upon written notice to the Trustee and satisfaction
of certain conditions, the Servicer may elect to postpone the commencement of
the Accumulation Period, and extend the length of the Revolving Period.
Unless the Rapid Amortization Period has begun, funds
on deposit in the Principal Funding Account will be distributed to the Class A
Certificateholders on the June 2001 Distribution Date (the "Class A Scheduled
Payment Date"). If the aggregate principal amount of deposits made to the
Principal Funding Account are insufficient to pay in full the Class A Invested
Amount on the Class A Scheduled Payment Date the Rapid Amortization Period will
commence and on each Distribution Date thereafter until the Class A Invested
Amount is paid in full, the Class A Certificateholders will receive
distributions of Class A Monthly Principal and Class A Monthly Interest.
If a Pay Out Event occurs during the Accumulation
Period, the Rapid Amortization Period will commence and any amount on deposit in
the Principal Funding Account will be distributed to the Certificateholders of
each Class of Certificates, sequentially, in order of seniority, on the
Distribution Date
<PAGE> 87
following the Monthly Period in which the Rapid Amortization Period commences.
During the period beginning on the earlier of the day
on which a Pay Out Event occurs and the Class A Scheduled Payment Date if the
Invested Amount is not paid in full on such date, and ending on the earlier of
(i) the date on which the Class A Invested Amount, the Class B Invested Amount
and the Excess Collateral Amount have been paid in full and (ii) the Scheduled
Series 1998-3 Termination Date (the "Rapid Amortization Period"), collections of
Principal Receivables allocated to the Invested Amount will no longer be paid to
the holder of the Exchangeable Transferor Certificate or to the holders of the
certificates of any other Series or, if the Accumulation Period has commenced,
deposited in the Principal Funding Account, but instead will be distributed to
the Class A Certificateholders and, following payment in full of the Class A
Invested Amount, to the Class B Certificateholders, and, following payment in
full of the Class B Invested Amount, to the Excess Collateral Holders, monthly
on each Distribution Date beginning with the Distribution Date in the month
following the commencement of the Rapid Amortization Period.
Subject to the Agreement, payments of principal are
limited to the unpaid Class A Invested Amount of the Class A Certificates, which
may be less than the unpaid balance of the Class A Certificates pursuant to the
terms of the Agreement. All principal of and interest on the Class A
Certificates is due and payable no later than February 18, 2004 (or if such day
is not a Business Day, the next succeeding Business Day) (the "Scheduled Series
1998-3 Termination Date"). After the Scheduled Series 1998-3 Termination Date,
neither the Trust nor the Transferor will have any further obligation to
distribute principal or interest on the Class A Certificates.
The transfer of this Certificate shall be registered
in the Certificate Register upon surrender of this Certificate for registration
of transfer at any office or agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in a form satisfactory
to the Trustee and the Transfer Agent and Registrar duly executed by the
Certificateholder or such Certificateholder's attorney duly authorized in
writing, and thereupon one or more new Class A Certificates of authorized
<PAGE> 88
denominations and for the same aggregate Undivided Interests will be issued to
the designated transferee or transferees.
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 Undivided Interests, as requested
by the Class A Certificateholder surrendering such Class A Certificates. No
service charge may be imposed for any such exchange but the Transferor,
Servicer, or Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.
The Transferor, the Servicer, the Trustee, the Paying
Agent and the Transfer Agent and Registrar, and any agent of any of them, may
treat the person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Transferor, the Servicer, the Trustee,
the Paying Agent 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 Agreement and any Supplement may be amended by
the Transferor, the Servicer and the Trustee, without the consent of
certificateholders of any Series then outstanding for any purpose, provided that
--------
(i) the Transferor shall deliver an opinion of counsel acceptable to the Trustee
to the effect that such amendment will not adversely affect in any material
respect the interest of such certificateholders, and (ii) such amendment will
not result in a withdrawal or reduction of the rating of any outstanding Series.
The Agreement and the Series 1998-3 Supplement may be
amended by the Transferor, the Servicer and the Trustee with the consent of the
holders of certificates evidencing undivided interests aggregating not less than
66-2/3% of the investor interests of all Series adversely affected, for the
purpose of adding any provisions to, changing in any manner or eliminating any
of the provisions of the Agreement or the Series 1998-3 Supplement or of
modifying in any manner the rights of certificateholders of any then outstanding
Series. No such amendment, however, may (a) reduce in any manner the amount of,
or delay the timing of, distributions required to be made on any such
<PAGE> 89
Series, (b) change the definition of or the manner of calculating the interest
of any certificateholder of such Series, or (c) reduce the aforesaid percentage
of undivided interests the holders of which are required to consent to any such
amendment, in each case without the consent of all certificateholders of all
Series adversely affected. Promptly following the execution of any amendment to
the Agreement, the Trustee will furnish written notice of the substance of such
amendment to each Class A Certificateholder.
<PAGE> 90
Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this
Certificate to be duly executed on this 25th day of June, 1998.
FIRST USA BANK
By: _________________________
Name: Rebekah A. Sayers
Title: Vice President
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to
in the within-mentioned Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Authenticating Agent
Date: June 25, 1998
By: _________________________
Name: Reyne A. Macadaeg
Title: Assistant Vice President
<PAGE> 91
EXHIBIT B
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE
BENEFIT OF FIRST USA BANK AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (III) A GOVERNMENTAL
PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR
LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A
PERSON INVESTING "PLAN ASSETS" OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF
CLAUSES (IV) AND (V) ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY
ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
No. R-1 $___________
Series Termination
Date: February 18, 2004 CUSIP NO. 337435DF5
<PAGE> 92
FIRST USA CREDIT CARD MASTER TRUST CLASS B FLOATING RATE
ASSET BACKED CERTIFICATE, SERIES 1998-3
Evidencing an undivided interest in a trust, the corpus of which consists of
receivables generated from time to time in the ordinary course of business in a
portfolio of VISA(R) and MasterCard(R)* credit card accounts generated or to be
generated by First USA Bank (the "Bank").
(Not an interest in or a recourse obligation
of First USA Bank or any affiliate thereof)
This certifies that CEDE & CO. (the
"Certificateholder") is the registered owner of a fractional undivided interest
in the First USA Credit Card Master Trust (the "Trust") issued pursuant to the
Pooling and Servicing Agreement, dated as of September 1, 1992 between the Bank,
as Transferor (the "Transferor") and as Servicer (the "Servicer"), and The Bank
of New York (Delaware), as trustee (the "Trustee") of the Trust (the
"Agreement"; such term to include any Supplement or amendment thereto) as
supplemented by the Series 1998-3 Supplement (the "Series 1998-3 Supplement"),
dated as of June 25, 1998, between the Bank, as Transferor and Servicer, and the
Trustee. The corpus of the Trust consists of all of the Transferor's right,
title and interest in a portfolio of receivables (the "Receivables") existing in
certain VISA(R) and MasterCard(R) revolving credit card accounts identified in
the Agreement from time to time (the "Accounts"), all Receivables generated
under the Accounts from time to time thereafter, all monies due or to become
due and all amounts received with respect to the Receivables in existence in the
Accounts, all monies on deposit in certain bank accounts (excluding any
investment earnings on such deposited amounts except as set forth in the Series
1998-3 Supplement) and all other assets and interests constituting the Trust and
all proceeds of the foregoing.
Although a summary of certain provisions of the
Agreement is set forth below,
- --------
* VISA(R) and MasterCard(R) are registered trademarks of Visa USA
Incorporated and MasterCard International Incorporated, respectively.
B-2
<PAGE> 93
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 from the Trustee by writing to the Trustee at The Bank of New
York (Delaware), White Clay Center, Route 273, Newark, Delaware, 19711,
Attention: Bond Administration. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a Series of Certificates entitled "First
USA Credit Card Master Trust Class B Floating Rate Asset Backed Certificates,
Series 1998-3" (the "Class B Certificates"), each of which represents a
fractional undivided interest in the Trust, and is issued under and is subject
to the terms, provisions and conditions of the Agreement, to which Agreement, as
amended from time to time, the Certificateholder by virtue of the acceptance
hereof assents and by which the 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 Transferor has structured the Agreement, the
Class B Certificates and the First USA Credit Card Master Trust Class A Floating
Rate Asset Backed Certificates, Series 1998-3 (the "Class A Certificates") with
the intention that the Class A Certificates and the Class B Certificates will
qualify under applicable tax law as indebtedness, and the Transferor and each
holder of a Class B Certificate (a "Class B Certificateholder") or any interest
therein, by acceptance of its Class B Certificate or any interest therein,
agrees to treat the Class B Certificates for purposes of federal, state, local
and foreign income or franchise taxes and any other tax imposed on or measured
by income, as indebtedness.
The Trust's assets are allocated in part to the
holders of the Class A Certificates, the holders of the Class B Certificates and
the holders of the First USA Credit Card Master Trust Excess Collateral, Series
1998-3 (the "Excess Collateral Holders") (such holders together the "Investor
Certificateholders") with the remainder allocated to
B-3
<PAGE> 94
holders of other Series of Certificates issued by the Trust, if any, and to the
Transferor. In addition to the Class A Certificates, the Class B Certificates
and the Excess Collateral, the Exchangeable Transferor Certificate will be
reissued pursuant to the Agreement and will represent the Transferor's interest
in the Trust. The reissued Exchangeable Transferor Certificate will represent
the interest in the Principal Receivables not represented by the Class A
Certificates, the Class B Certificates and the Excess Collateral (together the
"Investor Certificates") or any other Series of Certificates. The Exchangeable
Transferor Certificate may be exchanged by the Transferor pursuant to the
Agreement for one or more Series of Certificates and a reissued Exchangeable
Transferor Certificate upon the conditions set forth in the Agreement.
The Class B Initial Invested Amount is $72,289,000.
The Class B Invested Amount for any monthly Distribution Date will be an amount
equal to (i) $72,289,000, minus (ii) the aggregate amount of principal payments
-----
made to the Class B Certificateholders prior to such Distribution Date, minus
-----
(iii) the aggregate amount of Class B Investor Charge-Offs for all prior
Distribution Dates, minus (iv) the aggregate amount of Reallocated Class B
-----
Principal Collections for which the Excess Collateral Amount has not been
reduced for all prior Distribution Dates, minus (v) an amount equal to the
-----
aggregate amount by which the Class B Invested Amount has been reduced to fund
the Class A Investor Default Amount on all prior Distribution Dates as described
in the Agreement and plus (vi) the aggregate amount of Excess Finance Charge
----
Collections and certain other amounts allocated and available for purposes of
reimbursing amounts deducted pursuant to clauses (iii), (iv) and (v).
The Class B Certificates will bear interest at the
rate of 5.87625% per annum on the Class B Initial Invested Amount from June 25,
1998 through July 19, 1998 and for each Interest Period thereafter, the Class B
Certificates will bear interest at a per annum rate of 0.22% in excess of LIBOR
as determined by the Trustee on the related LIBOR Determination Date (each such
rate as in effect from time to time, the "Class B Certificate Rate"). Interest
will be distributed to the extent of available funds on July 20,
B-4
<PAGE> 95
1998, and on the eighteenth day of each month thereafter, or if such day is not
a Business Day, the next succeeding Business Day until the earlier of the day on
which the Class B Invested Amount is paid in full and the Scheduled Series
1998-3 Termination Date (each such date a "Distribution Date"), in an amount
equal to the product of (a) the actual number of days in the related Interest
Period divided by 360, (b) the Class B Certificate Rate and (c) the Class B
Outstanding Principal Balance on the last day of the Monthly Period immediately
preceding such Distribution Date. Interest for a Distribution Date will accrue
from and including the previous Distribution Date (or in the case of the first
Distribution Date, from and including the Closing Date), to, and including, the
day immediately preceding the current Distribution Date. Interest payments will
be made from Collections of Finance Charge Receivables and, in certain
circumstances, from Reallocated Principal Collections on July 20, 1998 and on
each Distribution Date thereafter until the Scheduled Series 1998-3 Termination
Date. Interest will be payable monthly on each Distribution Date to the Class B
Certificateholders of record as of the related Record Date. The Record Date with
respect to any Distribution Date shall be the last day of the calendar month
preceding such Distribution Date.
As described in the Agreement, Collections of
Principal Receivables with respect to any Monthly Period will be allocated on
the related Determination Date on the basis of the aggregate Investor Percentage
of all Series and the Transferor Percentage with respect to the Principal
Receivables. Such allocation will be performed both during the Revolving Period
and any Amortization Period. Throughout the existence of the Trust, the Servicer
will allocate to the Transferor, as holder of the Exchangeable Transferor
Certificate, an amount equal to the Transferor Percentage of the aggregate
amount of Collections of Finance Charge Receivables and Principal Receivables
for each Monthly Period. During the Revolving Period relating to the Investor
Certificates, the Class B Floating Allocation Percentage of Collections of
Principal Receivables and the Excess Collateral Floating Allocation Percentage
of Collections of Principal Receivables will be applied first as Reallocated
Principal Collections, to the extent required, and any remaining amounts
together with
B-5
<PAGE> 96
the Class A Floating Allocation Percentage of Principal Receivables will be
distributed first to the certificateholders of other Series to the extent of the
amount of Principal Shortfalls, if any, and then to the Transferor in an amount
not to exceed the amount of the Transferor Interest.
Unless a Pay Out Event has occurred, the Accumulation
Period will begin at the close of business on the last day of the Revolving
Period and will end on the earlier of (i) the commencement of the Rapid
Amortization Period, (ii) payment of the Invested Amount in full and (iii) the
Scheduled Series 1998-3 Termination Date. On each Transfer Date following the
commencement of the Accumulation Period, prior to the earlier of the payment of
the Class A Invested Amount in full and the commencement of the Rapid
Amortization Period, the Trustee will deposit in the Principal Funding Account
an amount equal to the least of (a) Available Investor Principal Collections
with respect to the preceding Monthly Period, (b) the applicable Controlled
Deposit Amount and (c) the Class A Adjusted Invested Amount prior to any such
deposit on such day. Amounts in the Principal Funding Account will be paid to
the Class A Certificateholders on the Class A Scheduled Payment Date. After the
full amount of the Class A Invested Amount has been deposited in the Principal
Funding Account and beginning with the Transfer Date related to the Class B
Principal Commencement Date, prior to the commencement of the Rapid Amortization
Period, the Trustee will deposit in the Principal Funding Account an amount
equal to the least of (a) the Available Investor Principal Collections with
respect to the preceding Monthly Period remaining after application thereof to
the Class A Invested Amount, (b) the applicable Controlled Deposit Amount (minus
the Class A Monthly Principal with respect to such Transfer Date) and (c) the
Class B Adjusted Invested Amount prior to any such deposit on such day. After
payment in full of the Class A Invested Amount, amounts in the Principal Funding
Account will be paid to the Class B Certificateholders on the Class B Scheduled
Payment Date. After the full amount of the sum of the Class A Invested Amount
and the Class B Invested Amount has been deposited in the Principal Funding
Account, prior to the commencement of the Rapid Amortization Period, the Trustee
will deposit in the Principal Funding Account an amount equal to the
B-6
<PAGE> 97
least of (a) the Available Investor Principal Collections with respect to the
preceding Monthly Period remaining after application thereof to the Class A
Invested Amount and the Class B Invested Amount, (b) the applicable Controlled
Deposit Amount (minus the Class A Monthly Principal and the Class B Monthly
Principal with respect to such Transfer Date) and (c) the Excess Collateral
Adjusted Amount prior to any such deposit on such day. After payment in full of
the Class A Invested Amount and the Class B Invested Amount, amounts in the
Principal Funding Account will be paid to the Excess Collateral Holders on the
Excess Collateral Scheduled Payment Date. During the Accumulation Period, the
portion of Available Investor Principal Collections not applied to Class A
Monthly Principal, Class B Monthly Principal or Excess Collateral Monthly
Principal on a Transfer Date will generally be treated as Excess Principal
Collections.
Upon written notice to the Trustee and satisfaction
of certain conditions, the Servicer may elect to postpone the commencement of
the Accumulation Period, and extend the length of the Revolving Period.
On the June 2001 Distribution Date if the Class A
Invested Amount is paid in full, Available Investor Principal Collections and
Excess Principal Collections allocable to Series 1998-3 will be used to pay the
Class B Invested Amount as described in the Agreement. If the Available Investor
Principal Collections and Excess Principal Collections allocable to Series
1998-3 are insufficient to pay in full the Class B Invested Amount on the June
2001 Distribution Date, the Rapid Amortization Period will commence.
If a Pay Out Event occurs during the Accumulation
Period, the Rapid Amortization Period will commence and any amount on deposit in
the Principal Funding Account will be distributed to the Certificateholders of
each Class of Certificates, sequentially, in order of seniority, on the
Distribution Date following the Monthly Period in which the Rapid Amortization
Period commences.
B-7
<PAGE> 98
During the period beginning on the earlier of the day
on which a Pay Out Event occurs and the Class A Scheduled Payment Date if the
Invested Amount is not paid in full on such date, and ending on the earlier of
(i) the date on which the Class A Invested Amount, the Class B Invested Amount
and the Excess Collateral Amount have been paid in full and (ii) the Scheduled
Series 1998-3 Termination Date (the "Rapid Amortization Period"), collections of
Principal Receivables allocated to the Invested Amount will no longer be paid to
the holder of the Exchangeable Transferor Certificate or to the holders of the
certificates of any other Series or, if the Accumulation Period has commenced,
deposited in the Principal Funding Account, but instead will be distributed to
the Class A Certificateholders and, following payment in full of the Class A
Invested Amount, to the Class B Certificateholders, and, following payment in
full of the Class B Invested Amount, to the Excess Collateral Holders, monthly
on each Distribution Date beginning with the Distribution Date in the month
following the commencement of the Rapid Amortization Period.
Principal payments on the Class B Certificates will
be, during the Accumulation Period, funded by deposits to the Principal Funding
Account or, during the Rapid Amortization Period, made monthly, and will
commence on the date (the "Class B Principal Commencement Date") which is (a)
with respect to the Accumulation Period, the first Distribution Date on which an
amount equal to the Class A Invested Amount has been deposited in the Principal
Funding Account and allocated to the Class A Certificates or (b) with respect to
the Rapid Amortization Period, the Distribution Date on which the Class A
Invested Amount has been paid in full or, if there are no Principal Receivables
allocable to the Investor Certificates remaining after payments have been made
to the Class A Certificates on such Distribution Date, the Distribution Date
following the Distribution Date on which the Class A Invested Amount has been
paid in full. After payment in full of the Class A Invested Amount, amounts
deposited in the Principal Funding Account for the benefit of the Class B
Certificates will be paid to the Class B Certificateholders on the June 2001
Distribution Date and on each Distribution Date during the Rapid Amortization
Period beginning with the Class B Principal Com-
B-8
<PAGE> 99
mencement Date, and thereafter until the payment in full of the Class B Invested
Amount or the termination of the Trust, the Percentage Allocation of all
collections of Principal Receivables and certain other amounts for the preceding
Monthly Period remaining after payment in full of the Class A Invested Amount
will be distributed to the Class B Certificateholders.
Subject to the Agreement, payments of principal are
limited to the unpaid Class B Invested Amount of the Class B Certificates, which
may be less than the unpaid balance of the Class B Certificates pursuant to the
terms of the Agreement. All principal of and interest on the Class B
Certificates is due and payable no later than February 18, 2004 (or if such day
is not a Business Day, the next succeeding Business Day) (the "Scheduled Series
1998-3 Termination Date"). After the Series 1998-3 Termination Date, neither the
Trust nor the Transferor will have any further obligation to distribute
principal or interest on the Class B Certificates.
The transfer of this Certificate shall be registered
in the Certificate Register upon surrender of this Certificate for registration
of transfer at any office or agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in a form satisfactory
to the Trustee and the Transfer Agent and Registrar duly executed by the
Certificateholder or such Certificateholder's attorney duly authorized in
writing, and thereupon one or more new Class B Certificates of authorized
denominations and for the same aggregate Undivided Interests will be issued to
the designated transferee or transferees.
As provided in the Agreement and subject to certain
limitations therein set forth, Class B Certificates are exchangeable for new
Class B Certificates evidencing like aggregate Undivided Interests, as requested
by the Class B Certificateholder surrendering such Class B Certificates. No
service charge may be imposed for any such exchange but the Transferor,
Servicer, or 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.
B-9
<PAGE> 100
The Transferor, the Servicer, the Trustee, the Paying
Agent and the Transfer Agent and Registrar, and any agent of any of them, may
treat the person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Transferor, the Servicer, the Trustee,
the Paying Agent 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 Agreement and any Supplement may be amended by
the Transferor, the Servicer and the Trustee, without the consent of
certificateholders of any Series then outstanding for any purpose, provided that
--------
(i) the Transferor shall deliver an opinion of counsel acceptable to the Trustee
to the effect that such amendment will not adversely affect in any material
respect the interest of such certificateholders, and (ii) such amendment will
not result in a withdrawal or reduction of the rating of any outstanding Series.
The Agreement and the Series 1998-3 Supplement may be
amended by the Transferor, the Servicer and the Trustee with the consent of the
holders of certificates evidencing undivided interests aggregating not less than
66-2/3% of the investor interests of all Series adversely affected, for the
purpose of adding any provisions to, changing in any manner or eliminating any
of the provisions of the Agreement or the Series 1998-3 Supplement or of
modifying in any manner the rights of certificateholders of any then outstanding
Series. No such amendment, however, may (a) reduce in any manner the amount of,
or delay the timing of, distributions required to be made on any such Series,
(b) change the definition of or the manner of calculating the interest of any
certificateholder of such Series, or (c) reduce the aforesaid percentage of
undivided interests the holders of which are required to consent to any such
amendment, in each case without the consent of all certificateholders of all
Series adversely affected. Promptly following the execution of any amendment to
the Agreement, the Trustee will furnish written notice of the substance of such
amendment to each Class B Certificateholder.
B-10
<PAGE> 101
Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this
Certificate to be duly executed on this 25th day of June, 1998.
FIRST USA BANK
By: __________________________
Name: Rebekah A. Sayers
Title: Vice President
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to
in the within-mentioned Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Authenticating Agent
Date: June 25, 1998
By: __________________________
Name: Reyne A. Macadaeg
Title: Assistant Vice President
<PAGE> 102
Exhibit C
[LOGO]
BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)
(WITHOUT OWNER OPTION TO REDEEM)/
OTHER ASSET-BACKED SECURITIES/AND PASS-THROUGH CERTIFICATES
Letter of Representations
[To be Completed by Issuer and Agent]
First USA Bank
--------------------------------------------------
[Name of Issuer]
The Bank of New York (Delaware)
--------------------------------------------------
[Name of Agent]
June 25, 1998
-------------
[Date]
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: $800,000,000 Class A Floating Rate Asset Backed Certificates
-------------------------------------------------------------------
Series 1998-3; $72,289,000 Class B Floating Rate Asset
-------------------------------------------------------------------
Backed Certificates, Series 1998-3
-------------------------------------------------------------------
[Issue Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Agent will act as
trustee, paying agent, fiscal agent, or other such agent of Issuer with respect
to the Securities pursuant to a trust indenture, trust agreement, or other
such document dated as of September 1, 1992* (the "Document"). Credit Suisse
----------- - -------------
First Boston Corporation** is distributing the Securities through The
- ------------------------
Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC, and
to act in accordance with its Rules with respect to the Securities, Issuer and
Agent make the following representations to DTC:
1. Prior to closing on the Securities on June 25, 1998, there shall be
------- -
deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede & Co., for each
* As supplemented as of June 25, 1998
** As Representative for itself, Banc One Capital Markets, Inc., Bear,
Stearns & Co., Inc., First Chicago Capital Markets, Inc., and Salomon Brothers
Inc.
<PAGE> 103
stated maturity of the Securities in the face amounts set forth on Schedule A
hereto, the total of which represents 100% of the principal amounts of such
Securities. If, however, the aggregate principal amount of any maturity exceeds
$200 million, one certificate will be issued with respect to each $200 million
of principal amount and an additional certificate will be issued with respect
to any remaining principal amount. Each Security certificate shall bear the
following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of Cede & Co.
or in such other name as is requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
2. Issuer: (a) understands that DTC has no obligations to, and will not,
communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificates by virtue of submission of such certificate(s) to DTC.
3. In the event of any solicitation of consents from or voting by holders
of the Securities, Issuer or Agent shall establish a record date for such
purposes (with no provisions for revocation of consents or votes by subsequent
holders) and shall, to the extent possible, send notice of such record date to
DTC not less than 15 calendar days in advance of such record date. Notices to
DTC pursuant to this Paragraph by telecopy shall be sent to DTC's
Reorganization Department at (212) 709-6896 or (212) 709-6897, and receipt of
such notices shall be confirmed by telephoning (212) 709-6870. Notices to DTC
pursuant to this Paragraph by mail or by any other means shall be sent to DTC's
Reorganization Department as indicated in Paragraph 5.
4. In the event of a full or partial redemption, Issuer or Agent shall
send a notice to DTC specifying: (a) the amount of the redemption or refunding;
(b) in the case of a refunding, the maturity date(s) established under the
refunding; and (c) the date such notice is to be mailed to Security holders or
published (the "Publication Date"). Such notice shall be sent to DTC by a
secure means (e.g., legible telecopy, registered or certified mail, overnight
delivery) in a timely manner designed to assure that such notice is in DTC's
possession no later than the close of business on the business day before or,
if possible, two business days before the Publication Date. Issuer or Agent
shall forward such notice either in a separate secure transmission for each
CUSIP number or in a secure transmission for multiple CUSIP numbers (if
applicable) which includes a manifest or list of each CUSIP number submitted in
that transmission. (The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice.) The
Publication Date shall be not less than 30 days nor more than 60 days prior to
the redemption date or, in the case of an advance refunding, the date that the
proceeds are deposited in escrow. Notices to DTC pursuant to this Paragraph by
telecopy shall be sent to DTC's Call Notification Department at (516) 227-4039
or (516) 227-4190. If the party sending the notice does not receive a telecopy
receipt from DTC confirming that the notice has been received, such party shall
telephone (516) 227-4070. Notices to DTC pursuant to this Paragraph by mail or
by any other means shall be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
<PAGE> 104
5. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Agent to
Security holders specifying the terms of the tender and the Publication Date of
such notice shall be sent to DTC by a secure means in the manner set forth in
the preceding Paragraph. Notices to DTC pursuant to this Paragraph and notices
of other corporate actions by telecopy shall be sent to DTC's Reorganization
Department at (212) 709-1093 or (212) 709-1094, and receipt of such notices
shall be confirmed by telephoning (212) 709-6884. Notices to DTC pursuant to
the above by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
6. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
7. Issuer or Agent shall send DTC written notice with respect to the
dollar amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably 5, but
not less than 2, business days prior to such payment date. Such notices, which
shall also contain the current pool factor, any special adjustments to
principal/interest rates (e.g., adjustments due to deferred interest or
shortfall), and Agent contact's name and telephone number, shall be sent by
telecopy to DTC's Dividend Department at (212) 709-1723, or if by mail or by any
other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
8. [Note: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS OUT THE
OTHER:] [The interest accrual period is payment date to payment date.]
9. Issuer or Agent shall provide a written notice of interest payment
information to a standard interest announcement service subscribed to by DTC as
soon as the information is available. In the unlikely event that no such
service exists, Issuer or Agent shall provide such notice directly to DTC
electronically, as previously arranged by Issuer or Agent and DTC, as soon as
the information is available. If electronic transmission is not available,
absent any other arrangements between Issuer or Agent and DTC, such information
should be sent by telecopy to DTC's Dividend Department at (212) 709-1723 or
(212) 709-1686, and receipt for such notices shall be confirmed by telephoning
(212) 709-1270. Notices to DTC pursuant to the above by mail or by any other
means shall be sent to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
<PAGE> 105
10. Issuer or Agent shall provide CUSIP numbers for each issue for which
payment is being sent, as well as the dollar and cent amount of the payment for
each issue to DTC, no later than noon (Eastern Time) on the payment date.
11. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns, in same-day funds no later than 2:30 p.m.
(Eastern Time) on each payment date. Absent any other arrangements between
Issuer or Agent and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Dividend Deposit Account # 066-026776
12. Maturity and redemption payments allocated with respect to each CUSIP
number shall be received by Cede & Co., as nominee of DTC, or its registered
assigns, in same-day funds no later than 2:30 p.m. (Eastern Time) on the
payment date. Absent any other arrangements between Issuer or Agent and DTC,
such funds shall be wired as follows:
The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Redemption Deposit Account # 066-027306
13. Principal payments (plus accrued interest, if any) as the result of
optional tenders for purchase effected by means of DTC's Repayment Option
Procedures shall be received by Cede & Co., as nominee of DTC, or its
registered assigns, in same-day funds no later than 2:30 p.m. (Eastern Time) on
the first payment date. Absent any other arrangements between Issuer or Agent
and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Reorganization Deposit Account # 066-027608
14. DTC may direct Issuer or Agent to use any other number or address as
the number or address to which notices or payments of interest or principal may
be sent.
15. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or Agent's
invitation) necessitating a reduction in the aggregate principal amount of
Securities outstanding or an advance refunding of part of the Securities
outstanding. DTC, in its discretion: (a) may request Issuer or Agent to issue
and authenticate a new Security certificate; or (b) may make an appropriate
notation on the Security certificate indicating the date and amount of such
reduction in principal except in the case of final maturity, in which case the
certificate will be presented to Issuer or Agent prior to payment, if required.
16. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Agent
shall notify DTC of the availability of certificates. In
<PAGE> 106
such event, Issuer or Agent shall issue, transfer, and exchange certificates in
appropriate amounts, as required by DTC and others.
17. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Agent (at which time DTC will confirm with Issuer or Agent the
aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Agent shall cooperate fully with DTC
by taking appropriate action to make available one or more separate certificates
evidencing Securities to any DTC Participant having Securities credited to its
DTC accounts.
18. Nothing herein shall be deemed to require Agent to advance funds on
behalf of Issuer.
19. This Letter of Representations may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts together shall constitute but one and the same
instrument.
20. This Letter of Representations is governed by, and shall be construed
in accordance with, the laws of the State of New York.
21. The following riders, attached hereto, are hereby incorporated into
this Letter of Representations:
Rider 5A, Rider 1, Rider 2, Rider 3.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Notes: Very truly yours,
- ------
<S> <C>
A. If there is an Agent (as defined in this Letter of
Representations), Agent as well as Issuer must sign this
Letter. If there is no Agent, in signing this Letter Issuer
itself undertakes to perform all of the obligations set
forth herein. First USA Bank
----------------------------------------------------
B. Schedule B contains statements that DTC believes (Issuer)
accurately describe DTC, the method of effecting book-
entry transfers of securities distributed through DTC, By: /s/ SUZANNE BACHMAN
and certain related matters. ----------------------------------------------------
(Authorized Officer's Signature)
The Bank of New York (Delaware)
----------------------------------------------------
(Agent)
By: /s/ REYNE A. MACADAEG
----------------------------------------------------
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: /s/ RICHARD B. NESSIN
------------------------------------------------
</TABLE>
CC: Underwriter
Underwriter's Counsel
<PAGE> 107
Rider 5A
- --------
19. The terms "trust indenture" and "Indenture" are hereby replaced wherever
they appear in the Letter of Representations with the term "Pooling and
Servicing Agreement."
20. The term "Securities" is hereby replaced wherever it appears in the Letter
of Representations with the term "Certificates."
<PAGE> 108
SCHEDULE A
----------
(Describe Issue)
First USA Credit Card Master Trust
$800,000,000 Class A Floating Rate Asset Backed
Certificates, Series 1998-3
$72,289,000 Class B Floating Rate Asset Backed
Certificates, Series 1998-3
<TABLE>
<CAPTION>
CUSIP Principal Amount Maturity Date Interest Rate
----- ---------------- ------------- -------------
<S> <C> <C> <C>
337435DE8 $200,000,000 February 18, 2004 0.06% above LIBOR
337435DE8 $200,000,000 February 18, 2004 0.06% above LIBOR
337435DE8 $200,000,000 February 18, 2004 0.06% above LIBOR
337435DE8 $200,000,000 February 18, 2004 0.06% above LIBOR
337435DF5 $ 72,289,000 February 18, 2004 0.22% above LIBOR
</TABLE>
<PAGE> 109
SCHEDULE B
----------
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
-----------------------------------
(PREPARED BY DTC--BRACKETED MATERIAL MAY BE APPLICABLE ONLY TO CERTAIN ISSUES)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities will
be issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully-registered Security certificate will be
issued for [each issue of] the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the
aggregate principal amount of [any] issue exceeds $200 million, one certificate
will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a number
of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on DTC's
records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interests in
Securities, except in the event that use of the book-entry system for the
Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Securities; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Securities are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
[6. Redemption notices shall be sent to DTC. If less than all of the
Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.]
<PAGE> 110
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to Cede
& Co., as nominee of DTC. DTC's practice is to credit Direct Participants'
accounts, upon DTC's receipt of funds and corresponding detail information from
Issuer or Agent, on payable date in accordance with their respective holdings
shown on DTC's records. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participant and not of
DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal and interest to Cede &
Co. is the responsibility of Issuer or Agent, disbursement of such payments to
Direct Participants shall be the responsibility of DTC, and disbursement of
such payments to the Beneficial Owners shall be the responsibility of Direct
and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to Agent [or Tender/Remarketing
Agent], and shall effect delivery of such Securities by causing the Direct
Participant to transfer the Participant's interest in the Securities, on DTC's
records, to Agent [or Tender/Remarketing Agent]. The requirement for physical
delivery of Securities in connection with an optional tender or a mandatory
purchase will be deemed satisfied when the ownership rights in the Securities
are transferred by Direct Participants on DTC's records and followed by a
book-entry credit of tendered Securities to Agent [or Tender/Remarketing
Agent's] DTC account.]
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Agent. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required to
be printed and delivered.
11. Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable, but
Issuer takes no responsibility for the accuracy thereof.
<PAGE> 111
RIDER 1
-------
[LOGO]
RIDER AMENDING DTC LETTER OF REPRESENTATIONS -- BEO COLLATERALIZED MORTGAGE
---------------------------------------------------------------------------
OBLIGATIONS (CMO) WITHOUT OWNER OPTION TO REDEEM/OTHER ASSET-BACKED SECURITIES
------------------------------------------------------------------------------
/AND PASS-THROUGH CERTIFICATES
------------------------------
As of March 9, 1998, DTC's Reorganization Department relocated and prior to
that, DTC's Dividend Department relocated to the 55 Water Street location.
Following are the new addresses and related telephone and facsimile numbers
referenced in the Letter of Representations.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 3 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Numbers
(212) 709-6896 and (212) 709-6897 (212) 855-5181 and (212) 855-5182
The confirmation number (212) 709-6870 is now (212) 855-5202.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 5 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Number
(212) 709-1093 and (212) 709-1094 (212) 855-5278
The confirmation number (212) 709-6884 is now (212) 855-5280.
The new address is Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
55 Water Street 50th Floor
New York, NY 10041-0099
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 7 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Number Current Telecopier Number
(212) 709-1723 (212) 855-4555
The new address is Manager; Announcements
Dividend Department
The Depository Trust Company
55 Water Street 25th Floor
New York, NY 10041-0099
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 9 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Numbers
(212) 709-1723 and (212) 709-1686 (212) 855-4555 and (212) 855-4556
The confirmation number (212) 709-1270 is now (212) 855-4550.
<PAGE> 112
The new address for this Paragraph 9 is the same as that listed above,
referenced in Paragraph 7.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 10 OF THE LETTER OF REPRESENTATIONS:
Such information shall be conveyed by automated notification. If the
circumstances prevent the funds paid to Cede & Co., as nominee of DTC, by 2:30
p.m. ET from equaling the dollar amount associated with detail payments by
12:00 noon ET Issuer or Agent must provide CUSIP-level reconciliation to DTC no
later than 2:30 ET. Reconciliation can be provided by automated means or
written format.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 11 OF THE LETTER OF REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to remit free funds to
Agent by 1:00 p.m. ET on each payment date, or at such earlier time as required
by Agent to guarantee timely credit to the Dividend Deposit Account of Cede &
Co.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 12 OF THE LETTER OF REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to remit free funds to
Agent by 1:00 p.m. ET on each payment date, or at such earlier time as required
by Agent to guarantee timely credit to the Redemption Deposit Account of Cede &
Co. Issuer or Agent shall deliver Cusip-level detail regarding such payments to
DTC no later than 2:30 p.m. ET on each payment date.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 13 OF THE LETTER OF REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to remit free funds to
Agent by 1:00 p.m. ET on each payment date, or at such earlier time as required
by Agent to guarantee timely credit to the Reorganization Deposit Account of
Cede & Co. Issuer or Agent shall deliver Cusip-level detail regarding such
payments to DTC no later than 2:30 p.m. ET on each payment date.
<PAGE> 113
RIDER 2
-------
[LOGO]
REPRESENTATIONS FOR DEPOSIT/WITHDRAWAL AT CUSTODIAN ("DWAC")
TO BE INCLUDED IN DTC LETTER OF REPRESENTATIONS
-----------------------------------------------
The Security certificate(s) shall remain in Agent's custody as a "Balance
Certificate" subject to the provisions of the Balance Certificate Agreement
between Agent and DTC currently in effect.
On each day on which Agent is open for business and on which it receives
an instruction originated by a Participant through DTC's Deposit/Withdrawal at
Custodian ("DWAC") system to increase the Participant's account by a specified
number of shares, units, or obligations (a "Deposit Instruction"). Agent shall,
before 6:30 p.m. (Eastern Time) that day, either approve or cancel the Deposit
Instruction through the DWAC system.
On each day on which Agent is open for business and on which it receives
an instruction originated by a Participant through the DWAC system to decrease
the Participant's account by a specified number of shares, units, or
obligations (a "Withdrawal Instruction"), Agent shall, at or before 6:30 p.m.
(Eastern Time) that day, either approve or cancel the Withdrawal Instruction
through the DWAC system.
Agent agrees that its approval of a Deposit or Withdrawal Instruction
shall be deemed to be the receipt by DTC of a new reissued or reregistered
certificated security on registration of transfer to the name of Cede & Co. for
the quantity of securities evidenced by the Balance Certificate after the
Deposit or Withdrawal Instruction is effected.
<PAGE> 114
RIDER 3
-------
[LOGO]
REPRESENTATIONS FOR ERISA-RESTRICTED SECURITIES
TO BE INCLUDED IN DTC LETTER OF REPRESENTATIONS
-----------------------------------------------
Issuer and Agent recognize that DTC does not in any way undertake to, and
shall not have any responsibility to, monitor or ascertain whether a transfer
of Securities could give rise to a transaction prohibited or not otherwise
permissible under the Employee Retirement Income Security Act of 1974 or under
Section 4975 of the Internal Revenue Code of 1986. Issuer and Agent acknowledge
that: a) so long as Cede & Co. is the sole record owner of the Securities, it
shall be entitled to all voting rights in respect thereof and to receive the
full amount of all principal, premium, if any, and interest payable with
respect thereto; and b) DTC shall treat any DTC Participant having Securities
credited to its DTC accounts as entitled to the full benefits of ownership of
such Securities even if the crediting of such Securities to the DTC accounts of
such Participant results from transfers or failures to transfer in violation of
such laws. (The treatment by DTC of the effects of the crediting by it of
Securities to the accounts of DTC Participants shall not affect the rights of
Issuer or purchasers, sellers, or holders of Securities against any DTC
Participant.)
<PAGE> 115
EXHIBIT D
MONTHLY ALLOCATIONS AND PAYMENT INSTRUCTIONS AND
NOTIFICATION TO THE TRUSTEE
FIRST USA BANK
------------------------------------------------
FIRST USA CREDIT CARD MASTER TRUST, SERIES 1998-3
------------------------------------------------
Monthly Period:
Distribution Date:
Transfer Date:
The undersigned, a duly authorized representative of First USA Bank (the "Bank")
as Servicer, pursuant to the Pooling and Servicing Agreement dated as of
September 1, 1992 (the "Pooling and Servicing Agreement") and the Series 1998-3
Supplement, dated June 25, 1998 (the "Supplement"), by and between the Bank and
The Bank of New York (Delaware), as Trustee (the "Trustee"), does hereby certify
as follows:
I. Capitalized terms used in this Certificate have their
respective meanings set forth in the Pooling and Servicing
Agreement; provided, that the preceding "Monthly Period" shall
mean the Monthly Period immediately preceding the calendar
month in which this Certificate is delivered. References
herein to certain sections and subsections are references to
the respective sections and subsections of the Pooling and
Servicing Agreement. This Certificate is delivered pursuant to
Section 4.09 of the Pooling and Servicing Agreement.
II. The Bank is Servicer under the Pooling and Servicing
Agreement.
III. The undersigned is a Servicing Officer.
IV. The date of this notice is a Determination Date under the
Pooling and Servicing Agreement.
I. INSTRUCTION TO MAKE A WITHDRAWAL.
---------------------------------
Pursuant to Section 4.09, the Servicer does hereby instruct the Trustee
(i) to make a withdrawal from the Finance Charge Account on the above
referenced Transfer Date under the Pooling and Servicing Agreement, in
an aggregate amount as set forth below
D-1
<PAGE> 116
in respect of the following amounts and (ii) to apply the proceeds of
such withdrawal in accordance with Section 4.05:
<TABLE>
<S> <C> <C> <C>
1. A. Class A Finance Charge Allocations
Principal Funding Investment Proceeds N/A
Reserve Account Withdrawals N/A
Class A Net Swap Receipt N/A
----------------
Total Class A Available Funds
B. Pursuant to subsection 4.09(a)(i):
----------------------------------
a. Interest to be paid to Certificateholders at the Certificate
Rate for the Interest Period on the Outstanding Principal Balance
(Actual/360)
Class A
b. Overdue Interest
c. Default Interest
C. Pursuant to subsection 4.09(a)(ii):
-----------------------------------
a. Class A Net Swap Payment
b. Class A Net Swap Payment (previously due but unpaid)
----------------
D. Pursuant to subsection 4.09(a)(iii):
------------------------------------
Class A Monthly Servicing Fee for the preceding Monthly Period
if First USA Bank is no longer Servicer
E. Pursuant to subsection 4.09(a)(iv):
-----------------------------------
Class A Investor Default Amount for the preceding Monthly Period
----------------
F. Pursuant to subsection 4.09(a)(v):
----------------------------------
Amount constituting Excess Finance Charge Collections
to be distributed per Section 4.13
================
2. A. Class B Finance Charge Allocations
Principal Funding Investment Proceeds N/A
Reserve Account Withdrawals N/A
----------------
Total Class B Available Funds
</TABLE>
D-2
<PAGE> 117
<TABLE>
<S> <C> <C> <C>
B. Pursuant to subsections 4.09(b)(i):
-----------------------------------
1. Interest to be paid to Certificateholders at the Certificate
Rate for the Interest Period on the Invested Amount
(Actual/360)
Class B
2. Overdue Interest
3. Default Interest
C. Pursuant to subsection 4.09(b)(ii):
-----------------------------------
Class B Monthly Servicing Fee for the preceding Monthly Period
if First USA Bank is no longer Servicer
----------------
D. Pursuant to subsection 4.09(b)(iii):
------------------------------------
Amount constituting Excess Finance Charge Collections
distributed per Section 4.13
3. A. Excess Collateral Finance Charge Allocations
Principal Funding Investment Proceeds N/A
Reserve Account Withdrawals N/A
----------------
Total Excess Collateral Available Funds
B. Pursuant to subsection 4.09(c)(i):
----------------------------------
Excess Collateral Monthly Servicing Fee for the preceding
Monthly Period if First USA Bank is no longer Servicer
----------------
C. Pursuant to subsections 4.09(c)(ii):
------------------------------------
Amount constituting Excess Finance Charge Collections
to be distributed per Section 4.13
================
4. A. Pursuant to subsections 4.09(a)(v), 4.09(b)(iii) and 4.09(c)(ii):
-----------------------------------------------------------------
Amount constituting Excess Finance Charge Collections
to be distributed per Section 4.13
================
Total Excess Finance Charge Collections
</TABLE>
D-3
<PAGE> 118
II. APPLICATION OF EXCESS FINANCE CHARGE COLLECTIONS
------------------------------------------------
<TABLE>
<S> <C> <C>
Pursuant to Section 4.13, the Servicer hereby instructs the Trustee to
apply Excess Finance Charge Collections, determined pursuant to the
provisions of Section 4.09, in the following priority:
A. Pursuant to subsection 4.13(a):
-------------------------------
The Class A Required Amount applied in accordance with
subsection 4.09(a)
B. Pursuant to subsection 4.13(b):
-------------------------------
Amount of Class A Investor Charge-Offs
not previously reimbursed
C. Pursuant to subsection 4.13(c):
-------------------------------
Amount equal to unpaid Class B Monthly Interest Due
on the Class B Outstanding Principal Balance
D. Pursuant to subsection 4.13(d):
-------------------------------
Class B Investor Default Amount for the preceding
Monthly Period
E. Pursuant to subsection 4.13(e):
-------------------------------
Reimbursement of Class B Invested Amount which has been
reduced for reasons other than principal payments
F. Pursuant to subsection 4.13(f):
-------------------------------
1. Excess Collateral Monthly Interest for the preceding
Interest Period on the aggregate outstanding
principal balance of the Excess Collateral
(Actual/360)
2. Overdue Interest
3. Excess Collateral Default Amount
----------------
</TABLE>
D-4
<PAGE> 119
<TABLE>
<S> <C> <C> <C>
G. Pursuant to subsection 4.13(g):
-------------------------------
Unpaid Investor Monthly Servicing Fee for the preceding
Monthly Period to be paid to First USA Bank
H. Pursuant to subsection 4.13(h):
-------------------------------
Excess Collateral Default Amount for the preceding
Monthly Period
I. Pursuant to subsection 4.13(i):
-------------------------------
Reimbursement of Excess Collateral Amount which has been
reduced for reasons other than principal payments
J. Pursuant to subsection 4.13(j):
-------------------------------
The excess, if any, of the Required Reserve Account Amount
over Available Reserve Account Amount to be funded to the
Reserve Account
K. Pursuant to subsection 4.13(k):
-------------------------------
Remaining amount to be paid to Excess Collateral Holders
Total (Excess F/C Collections from 4(A) above)
================
</TABLE>
III. APPLICATION OF PRINCIPAL COLLECTIONS
------------------------------------
<TABLE>
<S> <C> <C>
Pursuant to Sections 4.05, 4.07, 4.09, 4.14 and 4.16, the Servicer
hereby instructs the Trustee to apply Principal Collections available
on the Transfer Date, determined pursuant to the provisions of the
above sections, in the following priority:
A. Principal Collections
---------------------
1. Class A Principal Collections
Class A Investor Default Amount (during Accumulation Period)
Class A Investor Charge-Offs (during Accumulation Period)
----------------
Total Class A Monthly Principal
2. Class B Principal Collections
Class B Investor Default Amount (during Accumulation Period)
Class B Investor Charge-Offs (during Accumulation Period)
----------------
</TABLE>
D-5
<PAGE> 120
<TABLE>
<S> <C> <C> <C>
Total Class B Monthly Principal
3. Excess Collateral Principal Collections
Excess Collateral Default Amt (during Accumulation Period)
Excess Collateral Charge-Offs (during Accumulation Period) ----------------
Total Excess Collateral Monthly Principal
4. Excess Principal Collections (other series
----------------
Total Principal Collections
================
B. Allocation of Principal Collections
-----------------------------------
1. Amount of Excess Collateral Principal Reallocated to F/C Account
2. Amount of Class B Principal Reallocated to F/C Account
3. Amount of Investor Principal Collections to other Series
4. Payment of principal to Class A Certificateholders
5. Payment of principal to Class B Certificateholders
6. Payment of principal to Excess Collateral Holders
7. Payment of principal to Principal Funding Account
8. Amount returned to Bank
----------------
Total Principal Allocations
================
</TABLE>
D-6
<PAGE> 121
IV. TRUSTEE DISBURSEMENT SUMMARY
----------------------------
<TABLE>
<S> <C> <C>
(1) Investor Monthly Servicing Fee paid to First USA Bank
(2) Total Default Amounts paid to First USA Bank
(3) Monthly Principal Collections to First USA Bank
----------------
Total to First USA Bank
(4) Deposit to Reserve Account
(5) Interest payment to Class A Certificateholders (DTC)
(6) Interest payment to Class B Certificateholders (DTC)
(7) Interest payment to Excess Collateral Holders
(8) Certificate Principal to Principal Funding Account
(9) Principal to Certificateholders (DTC)
(10) Investor Principal Collections to other Series
(11) Monthly Principal Payment to Excess Collateral Holders
(12) Excess Spread paid to Excess Collateral Holders
Total Disbursements
================
Total Class A, B and C funds to be allocated
================
----------------------------
V. INFORMATION REGARDING CLASS A INTEREST RATE SWAP
------------------------------------------------
(1) Class A Net Swap Payment
due on the related Transfer Date
----------------
(2) Overdue Class A Net Swap Payment
----------------
(3) Class A Net Swap Receipt
due on the related Transfer Date
----------------
(4) Overdue Class A Net Swap Receipt
----------------
</TABLE>
D-7
<PAGE> 122
EXHIBIT E
MONTHLY CERTIFICATEHOLDERS' STATEMENT
FIRST USA BANK
------------------------------------------------
FIRST USA CREDIT CARD MASTER TRUST, SERIES 1998-3
------------------------------------------------
Monthly Period:
Distribution Date:
Transfer Date:
Under Section 5.02 of the Pooling and Servicing Agreement dated as of September
1, 1992 (the "Pooling and Servicing Agreement") by and between First USA Bank
(the "Bank") and The Bank of New York (Delaware), as trustee (the "Trustee") the
Bank, as Servicer, is required to prepare certain information each month
regarding current distributions to Certificateholders and the performance of the
First USA Credit Card Master Trust (the "Trust") during the previous month. The
information which is required to be prepared with respect to the Distribution
Date noted above and with respect to the performance of the Trust during the
month noted above is set forth below. Certain information is presented on the
basis of an original principal amount of $1,000 per Series 1998-3 Certificate (a
"Certificate"). Certain other information is presented based on the aggregate
amount for the Trust as a whole. Capitalized terms used in this Monthly
Certificateholders' Statement have their respective meanings set forth in the
Pooling and Servicing Agreement.
<TABLE>
<S> <C>
1. Information Regarding the Current Monthly Distribution.
-------------------------------------------------------
A. The total amount of the distribution to
Certificateholders on the Distribution Date per
$1,000 original certificate principal amount
Class A
Class B
Excess Collateral Amt.
</TABLE>
E-1
<PAGE> 123
<TABLE>
<S> <C> <C>
B. The amount of the distribution in respect of
interest on the Certificates, per $1,000 original
certificate principal amount
Class A
Class B
Excess Collateral Amt.
C. The amount of the distribution in respect of
principal on the Certificates, per $1,000
original certificate principal amount
Class A
Class B
Excess Collateral Amt.
2. Information Regarding the Performance of the Trust.
---------------------------------------------------
A. Allocation of Principal Receivables.
------------------------------------
The aggregate amount of Allocations of Principal Receivables
processed during the Monthly Period which were allocated in
respect of the Certificates
Class A
Class B
Excess Collateral Amt.
----------------
Total
================
B. Allocation of Finance Charge Receivables.
-----------------------------------------
(a) The aggregate amount of Allocations of Finance Charge
Receivables processed during the Monthly Period which
were allocated in respect of the Certificates
Class A
</TABLE>
E-2
<PAGE> 124
<TABLE>
<S> <C> <C> <C>
Class B
Excess Collateral Amt.
----------------
Total
================
(b) Principal Funding Investment Proceeds (to Class A) N/A
(c) Withdrawals from Reserve Account (to Class A) N/A
----------------
Class A Available Funds
================
(d) Principal Funding Investment Proceeds (to Class B) N/A
----------------
(e) Withdrawals from Reserve Account (to Class B) N/A
----------------
Class B Available Funds
================
(f) Principal Funding Investment Proceeds (to Excess Collateral) N/A
----------------
(g) Withdrawals from Reserve Account (to Excess Collateral) N/A
----------------
Excess Collateral Available Funds
================
(h) Total Principal Funding Investment Proceeds
(i) Earnings on Reserve Account deposits
C. Principal Receivables / Investor Percentages
--------------------------------------------
(a) The aggregate amount of Principal Receivables in
the Trust as of the last day of the Monthly Period
(b) Invested Amount as of the last day of the preceding
month (Adjusted Class A Invested Amount during
Accumulation Period)
Class A
Class B
Excess Collateral Amt._________________________________________________________
Total
(c) The Floating Allocation Percentage: The Invested
Amount set forth in paragraph 2.C.(b) above as a
percentage of the aggregate amount of Principal
Receivables set forth in paragraph 2.C.(a) above
Class A
Class B
Excess Collateral Amt.
----------------
Total
</TABLE>
E-3
<PAGE> 125
<TABLE>
<S> <C> <C> <C>
(d) During the Amortization Period: The Invested
Amount as of _______ (the last day of the Revolving
Period)
Class A N/A
Class B N/A
Excess Collateral Amt. N/A
----------------
Total N/A
(e) The Fixed/Floating Allocation Percentage: The
Invested Amount set forth in paragraph 2.C.(d) above
as a percentage of the aggregate amount of Principal
Receivables set forth in paragraph 2.C.(a) above
Class A N/A
Class B N/A
Excess Collateral Amt. N/A
----------------
Total N/A
D. Delinquent Balances.
--------------------
The aggregate amount of outstanding balances in the Accounts
which were delinquent as of the end of the day on the last day
of the Monthly Period
(a) 35 - 64 days
(b) 65 - 94 days
(c) 95 - 124 days
(d) 125 - 154 days
(e) 155 or more days
----------------
Total
================
</TABLE>
E-4
<PAGE> 126
<TABLE>
<S> <C> <C> <C>
E. Monthly Investor Default Amount.
--------------------------------
The aggregate amount of all defaulted Principal Receivables
written off as uncollectible during the Monthly Period
allocable to the Invested Amount (the aggregate "Investor
Default
Amount")
Class A
Class B
Excess Collateral Amt.
----------------
Total
================
F. Investor Charge-Offs & Reimbursements of Charge-Offs.
-----------------------------------------------------
(a) The aggregate amount of Class A Investor Charge-Offs
and the reductions in the Class B Invested Amount and
the Excess Collateral Amount
Class A
Class B
Excess Collateral Amt.
----------------
Total
================
(b) The aggregate amount of Class A Investor Charge-Offs
reimbursed and the reimbursement of reductions in the
Class B Invested Amount and the Excess Collateral
Amount
Class A
Class B
Excess Collateral Amt.
----------------
Total
================
</TABLE>
E-5
<PAGE> 127
<TABLE>
<S> <C> <C> <C>
G. Investor Servicing Fee.
-----------------------
The amount of the Investor Monthly Servicing Fee
payable by the Trust to the Servicer for the
Monthly Period
Class A
Class B
Excess Collateral Amt.
----------------
Total
================
H. Reallocated Principal Collections
---------------------------------
The amount of Reallocated Excess Collateral and Class B
Principal Collections applied in respect of Interest
Shortfalls, Investor Default Amounts or Investor
Charge-Offs for the prior month.
Class B
Excess Collateral Amt.
----------------
Total
================
I. Excess Collateral Amount
------------------------
The amount of the Excess Collateral Amount as of the close of
business on the related Distribution Date after giving effect
to withdrawals, deposits and payments to be made in respect of
the preceding month
J. The Portfolio Yield
-------------------
The Portfolio Yield for the related Monthly Period
K. The Base Rate
-------------
The Base Rate for the related Monthly Period
</TABLE>
E-6
<PAGE> 128
<TABLE>
<S> <C> <C> <C>
3. Information Regarding the Principal Funding Account
---------------------------------------------------
A. Accumulation Period
-------------------
(a) Accumulation Period Commencement Date
(b) Accumulation Period length (months)
(c) Accumulation Period Factor
(d) Required Accumulation Factor Number
(e) Controlled Accumulation Amount
(f) Minimum Payment Rate (last 12 months)
B. Principal Funding Account
-------------------------
Beginning Balance
Plus: Principal Collections for Related Monthly Period from
Principal Account
Plus: Interest on Principal Funding Account Balance for
Related Monthly Period N/A
Less: Withdrawals to Finance Charge Account N/A
Less: Withdrawals to Distribution Account
----------------
Ending Balance
C. Accumulation Shortfall
----------------------
The Controlled Deposit Amount for the previous
Monthly Period N/A
Less: The amount deposited into the Principal Funding
Account for the Previous Monthly Period N/A
----------------
Accumulation Shortfall N/A
================
Aggregate Accumulation Shortfalls N/A
================
</TABLE>
E-7
<PAGE> 129
<TABLE>
<S> <C> <C> <C>
D. Principal Funding Investment Shortfall
--------------------------------------
Covered Amount N/A
Less: Principal Funding Investment Proceeds N/A
----------------
Principal Funding Investment Shortfall N/A
4. Information Regarding the Reserve Account
A. Required Reserve Account Analysis
(a) Required Reserve Account Amount percentage (0.5% of
Class A Invested Amount or other amount designated by
Transferor)
(b) Required Reserve Account Amount ($)
(c) Required Reserve Account Balance after effect of any
transfers on the Related Transfer Date
(d) Reserve Draw Amount transferred to the Finance
Charge Account on the Related Transfer Date
B. Reserve Account Investment Proceeds
-----------------------------------
Reserve Account Investment Proceeds transferred to the
Finance Charge Account on the Related Transfer Date N/A
C. Withdrawals from the Reserve Account
------------------------------------
Total Withdrawals from the Reserve Account transferred
to the Finance Charge Account on the Related Transfer
Date (4.A.(d) plus 4.B. above) N/A
D. The Portfolio Adjusted Yield
----------------------------
The Portfolio Adjusted Yield for the related Monthly Period
</TABLE>
E-8
<PAGE> 130
EXHIBIT F
[DATE]
First USA Bank
201 North Walnut Street
Wilmington, Delaware 19801
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
Re: Excess Collateral, Series 1998-3
--------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $______ in principal amount
of First USA Credit Card Master Trust, Excess Collateral, Series 1998-3 (the
"Excess Collateral"), we confirm that:
1. We have received such information and documentation as we deem
necessary in order to make our investment decision. We understand that such
information and documentation speaks only as of its date and that the
information contained therein may not be correct or complete as of any time
subsequent to such date.
2. We agree to be bound by the restrictions and conditions set forth
in the Pooling and Servicing Agreement, dated as of September 1, 1992, as
amended and as supplemented by the Series 1998-3 Supplement dated as of June 25,
1998 (the "Series 1998-3 Supplement" and together with the Pooling and Servicing
Agreement, the "Pooling and Servicing Agreement"), each by and between First USA
Bank, as transferor and servicer, and The Bank of New York (Delaware) relating
to the Excess Collateral and agree to be bound by, and not reoffer, resell,
pledge or otherwise transfer (any such act, a "Transfer") the Excess Collateral
except in compliance with such restrictions and conditions including but
F-1
<PAGE> 131
not limited to those in Section 11 of the Series 1998-3 Supplement.
3. We understand that the Excess Collateral has 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 Excess Collateral 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 and, if the
Trustee so requires, an opinion of counsel satisfactory to the Trustee).
4. We have neither acquired nor will we Transfer any Excess Collateral
we acquire (or any interest therein) or cause any Excess Collateral (or any
interest therein) to be marketed on or through an "established securities
market" within the meaning of Section 7704(b)(1) of the Internal Revenue Code of
1986, as amended (the "Code") and any treasury regulation thereunder, including,
without limitation, an over-the-counter-market or an interdealer quotation
system that regularly disseminates firm buy or sell quotations.
5. We are not and will not become, for so long as we own any interest
in the Excess Collateral, a partnership, Subchapter S corporation or grantor
trust for United States federal income tax purposes or, if we are such a Person,
the Excess Collateral does not represent more than 50% of the value of all of
our assets.
F-2
<PAGE> 132
6. We are a person who is either (A)(i) a citizen or resident of the
United States, (ii) a corporation or other entity organized in or under the laws
of the United States or any political subdivision thereof or (iii) a person not
described in (i) or (ii) whose ownership of the Excess Collateral is effectively
connected with a such person's conduct of a trade or business within the United
States (within the meaning of the Code) or (B) an estate or trust the income of
which is includible in gross income for United States federal income tax
purposes. We agree that (a) if we are a person described in clause (A)(i) or
(A)(ii) above, we will furnish to the person from whom we are acquiring a Excess
Collateral, the Servicer and the Trustee, a properly executed U.S. Internal
Revenue Service Form W-9 and a new Form W-9, or any successor applicable form,
upon the expiration or obsolescence of any previously delivered form or (b) if
we are a person described in clause (A)(iii) above, we will furnish to the
person from whom we are acquiring a Excess Collateral, the Servicer and the
Trustee, a properly executed U.S. Internal Revenue Service Form 4224 and a new
Form 4224, or any successor applicable form, upon the expiration or obsolescence
of any previously delivered form (and, in each case, such other certifications,
representations or opinions of counsel as may be requested by the Trustee). We
recognize that if we are a tax-exempt entity, payments with respect to the
Excess Collateral may constitute unrelated business taxable income.
7. We understand that a subsequent Transfer of the Excess Collateral
will be void if such Transfer would cause the number of Targeted Holders (as
defined in the Series 1998-3 Supplement) to exceed ninety nine.
8. We understand that the opinion of tax counsel that the Trust is not
a publicly traded partnership taxable as a corporation is dependent in part on
the accuracy of the representations in paragraphs 4 and 5.
9. 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 Excess Collateral,
and we and any account for which we are acting are each able to bear the
economic risk of our or its investment.
F-3
<PAGE> 133
10. We are acquiring the Excess Collateral 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.
11. We are not (a) an "employee benefit plan" (as defined in Section
3(3) of ERISA), including governmental plans and church plans, (b) a plan
described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended
(the "Code") including individual retirement accounts and Keogh plans, or (c)
any other entity whose underlying assets include "plan assets" (as defined in
United States Department of Labor ("DOL") Regulation Section 2510.3-101, 29
C.F.R. ?2510.3-101 or otherwise under ERISA) by reason of a plan's investment in
the entity, including, without limitation, an insurance company general account
12. We understand that any purported Transfer of any Excess Collateral
Amount in contravention of the restrictions and conditions in paragraphs 1
through 11 above (including any violation of the representation in paragraph 5
by an investor who continues to hold a Excess Collateral occurring any time
after the Transfer in which it acquired such Excess Collateral) shall be null
and void and the purported transferee shall not be recognized by the Trust or
any other person as an Excess Collateral Holder for any purpose.
13. We further understand that, on any proposed resale, pledge or
transfer of any Excess Collateral, we will be required to furnish to the Trustee
and the Registrar, such certifications 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
Excess Collateral and the Pooling and Servicing Agreement pursuant to which the
Excess Collateral were issued and we agree that if we determine to Transfer any
Excess Collateral, we will cause our proposed transferee to provide the
Transferor, the Servicer and the Trustee with a letter substantially in the form
of this letter. We further understand that Excess Collateral purchased by us
will bear a legend to the foregoing effect.
14. The person signing this letter on behalf of the ultimate beneficial
purchaser of the Excess Collateral has been duly authorized by such beneficial
purchaser of the Excess Collateral to do so.
F-4
<PAGE> 134
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,
[full legal name of purchaser]
By:_______________________
Name:
Title:
F-5
