AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 5, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST USA BANK, NATIONAL ASSOCIATION
(Originator of the Trust described herein)
(Exact name of registrant as specified in its charter)
FIRST USA CREDIT CARD MASTER TRUST
Delaware First USA Bank, National Association 76-0039224
(State or other 201 North Walnut Street (I.R.S. employer
jurisdiction of Wilmington, Delaware 19801 identification number)
incorporation or (302) 594-4000
organization)
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
RICHARD W. VAGUE
201 North Walnut Street
Wilmington, Delaware 19801
(302) 594-4100
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
COPIES TO:
Joanne K. Sundheim Andrew M. Faulker, Esq.
Senior Vice President and Skadden, Arps, Slate, Meagher & Flom LLP
Associate General Counsel 919 Third Avenue
201 North Walnut Street New York, New York 10022
Wilmington, Delaware 19801 (212) 735-2000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this registration statement becomes effective as
determined by market conditions.
If the only securities registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box. ( )
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. (X)
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ( )
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ( )
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. ( )
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
TITLE OF EACH CLASS AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE BE REGISTERED OFFERING PRICE PER OFFERING PRICE (1) REGISTRATION FEE
REGISTERED UNIT (1)
- -----------------------------------------------------------------------------------------------
Asset Backed
Certificates . . . . $1,000,000 100% $1,000,000 $278
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(1) Estimated solely for purpose of calculating the registration fee.
</TABLE>
The Registrant hereby amends the Registration Statement on such date or
dates as may be necessary to delay its effective date until Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
[TEXT BOX CONTENTS:
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
CAN NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.]
[TEXT BOX CONTENTS:
A CERTIFICATE IS NOT A DEPOSIT AND NEITHER THE CERTIFICATES NOR THE
UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST ONLY AND WILL NOT
REPRESENT INTERESTS IN OR OBLIGATIONS OF FIRST USA BANK, N.A., THE SERVICER
OR ANY OF THEIR AFFILIATES.
THIS PROSPECTUS MAY BE USED TO OFFER AND SELL ANY SERIES OF CERTIFICATES
ONLY IF ACCOMPANIED BY THE PROSPECTUS SUPPLEMENT FOR THAT SERIES.]
SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1999
Prospectus
FIRST USA CREDIT CARD MASTER TRUST
Issuer
FIRST USA BANK, N. A.
Transferor and Servicer
ASSET BACKED CERTIFICATES
THE TRUST
o may periodically issue asset backed certificates in one or more
series with one or more classes; and
o will own-
o receivables in a portfolio of consumer revolving credit card
accounts;
o payments due on those receivables; and
o other property described in this prospectus and in the
prospectus supplement.
THE CERTIFICATES-
o will represent interests in a trust and will be paid only from the
assets of the trust;
o offered by this prospectus will be rated in one of the four highest
rating categories by at least one nationally recognized rating
organization;
o may have one or more forms of enhancement; and
o will be issued as part of a designated series which may include one
or more classes of certificates and enhancement.
THE CERTIFICATEHOLDERS-
o will receive interest and principal payments from a varying
percentage of credit card account collections.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
[Date]
TABLE OF CONTENTS
The Trust ............................................................ 4
First USA's Credit Card Activities ................................... 4
General ............................................................ 4
Description of FDR ................................................. 5
Billing and Payments ............................................... 6
Delinquencies and Charge-Offs ...................................... 6
Interchange ........................................................ 7
Recoveries ......................................................... 7
The Receivables ...................................................... 8
Maturity Assumptions ................................................. 9
Use of Proceeds ...................................................... 10
First USA and BANK ONE CORPORATION ................................... 10
Year 2000 Readiness ................................................ 11
Description of the Certificates ...................................... 12
General ............................................................ 12
Book-Entry Registration ............................................ 13
Definitive Certificates ............................................ 16
Interest Payments .................................................. 17
Principal Payments ................................................. 17
Revolving Period ................................................... 18
Controlled Amortization Period ..................................... 18
Accumulation Period ................................................ 18
Rapid Amortization Period .......................................... 19
Shared Excess Finance Charge Collections ........................... 19
Shared Collections of Principal Receivables ........................ 19
Companion Series ................................................... 19
Transfer and Assignment of Receivables ............................. 19
Exchanges .......................................................... 20
Representations and Warranties ..................................... 21
Addition of Accounts ............................................... 23
Removal of Accounts ................................................ 24
Collection and Other Servicing Procedures .......................... 24
Trust Accounts ..................................................... 24
Discount Receivables ............................................... 25
Investor Percentage and Transferor Percentage ...................... 25
Application of Collections ......................................... 25
Funding Period ..................................................... 26
Defaulted Receivables; Rebates and Fraudulent Charges .............. 26
Investor Charge-Offs ............................................... 27
Defeasance ......................................................... 27
Final Payment of Principal; Termination ............................ 27
Pay Out Events ..................................................... 28
Certain Matters Regarding the Transferor and the Servicer .......... 29
Servicer Default ................................................... 30
Reports to Certificateholders ...................................... 31
Reports; Notices ................................................... 31
Evidence as to Compliance .......................................... 31
Amendments ......................................................... 32
List of Certificateholders ......................................... 32
The Trustee ........................................................ 32
Enhancement ........................................................... 33
General ............................................................. 33
Subordination ....................................................... 33
Letter of Credit .................................................... 34
Cash Collateral Guaranty or Account ................................. 34
Collateral Invested Amount .......................................... 34
Surety Bond or Insurance Policy ..................................... 34
Spread Account ...................................................... 35
Reserve Account ..................................................... 35
Certificate Ratings ................................................... 35
Certain Legal Aspects of the Receivables .............................. 36
Transfer of Receivables ............................................. 36
Certain Matters Relating to Receivership ............................ 36
Consumer Protection Laws ............................................ 37
Industry Litigation ................................................. 38
Other Litigation .................................................... 38
Certain U.S. Federal Income Tax Consequences .......................... 39
General ............................................................. 39
Characterization of the Certificates as Indebtedness ................ 39
Taxation of Interest Income of Certificateholders ................... 40
Sale or Other Disposition of a Certificate .......................... 41
Tax Characterization of the Trust ................................... 41
Recent Legislation .................................................. 42
Foreign Investors ................................................... 43
State and Local Taxation ............................................ 44
Erisa Considerations .................................................. 44
Plan of Distribution .................................................. 46
Legal Matters ......................................................... 46
Reports to certificateholderS ......................................... 47
Where You Can Find More Information ................................... 47
Index of Tterms for Prospectus ........................................ 48
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE PROSPECTUS SUPPLEMENT
We provide information to you about the certificates in two separate
documents that progressively provide more detail: (a) this prospectus,
which provides general information, some of which may not apply to a
particular series of certificates, including your series, and (b) the
prospectus supplement, which will describe the specific terms of your
series of certificates, including:
o the timing and amount of interest and principal payments;
o information about the receivables;
o information about credit enhancement for each offered class;
o credit ratings; and
o the method for selling the certificates.
WHENEVER INFORMATION IN THE PROSPECTUS SUPPLEMENT IS MORE SPECIFIC THAN
THE INFORMATION IN THIS PROSPECTUS, YOU SHOULD RELY ON THE INFORMATION IN
THE PROSPECTUS SUPPLEMENT.
You should rely only on the information provided in this prospectus and
the prospectus supplement, including the information incorporated by
reference. We have not authorized anyone to provide you with different
information.
We include cross-references in this prospectus and in the prospectus
supplement to captions in these materials where you can find further
related discussions. The preceding table of contents and the table of
contents included in the prospectus supplement provide the pages on which
these captions are located.
You can find a listing of the pages where capitalized terms are defined
under the caption "Index of Terms for Prospectus" beginning on page 48 in
this prospectus.
____________________
THE TRUST
The First USA Credit Card Master Trust (the "TRUST") was formed, in
accordance with the laws of the State of Delaware, pursuant to a Pooling
and Servicing Agreement dated as of September 1, 1992, as amended and
supplemented (the "POOLING AND SERVICING AGREEMENT"). The Trust was formed
for the transaction relating to the issuance of the Series 1992-1
Certificates, this transaction and similar transactions, as contemplated by
the Agreement, and prior to formation had no assets or obligations. The
Trust will not engage in any business activity, other than as described
herein and in the related supplement to this Prospectus (the "PROSPECTUS
SUPPLEMENT"), but rather will only acquire and hold the Receivables, issue
(or cause to be issued) certificates representing undivided interests in
the Trust (the "CERTIFICATES"), the Exchangeable Transferor Certificate and
certificates representing additional Series or Classes of Series and
related activities (including, with respect to any Series or Class of such
Series, entering into any Enhancement agreement) and make payments thereon.
As a consequence, the Trust is not expected to have any need for additional
capital resources.
FIRST USA'S CREDIT CARD ACTIVITIES
GENERAL
The Receivables which First USA Bank, National Association (the
"BANK") has conveyed and will convey to the Trust pursuant to the Pooling
and Servicing Agreement have been and will be generated from transactions
made by holders of selected VISAregistered trademark and
MasterCardregistered trademark 1 credit card accounts. The Bank currently
owns and services the credit card accounts (the"TRUST PORTFOLIO"). Certain
data processing and administrative functions associated with such
servicing are performed on behalf of the Bank by First Data Resources,
Inc. ("FDR"). See " Description of FDR."
_____________________
1
MasterCardregistered trademark and VISAregistered trademark
are registered trademarks of MasterCard International
Incorporated and VISA USA Incorporated, respectively.
The following discussion describes certain terms and characteristics
that generally apply to the accounts in the Bank Portfolio from which the
Accounts in the Trust Portfolio were selected. The Eligible Accounts from
which the Accounts were selected do not represent the entire Bank
Portfolio. In addition, Additional Accounts consist of Eligible Accounts
which may or may not currently be in existence and which may be selected
using different criteria from those used in selecting the Accounts already
included in the Trust. See "Description of the Certificates Addition of
Accounts." Consequently, actual loss and delinquency, revenue and monthly
payment rate experience with respect to the Additional Accounts may be
different from such experience for the Trust Portfolio described in the
related Prospectus Supplement.
Growth Strategy and Origination. To achieve steady and diversified
growth, the Bank originates credit card accounts through several different
programs: (i) First USA brand products, (ii) partnership products such as
affinity group, financial institutions, sports marketing and co-branding
programs, and (iii) the acquisition of credit card portfolios from other
financial institutions. These programs (excluding portfolio acquisitions)
emphasize segmentation and use direct mail, telemarketing, take-one
application displays, events, media and the Internet as channels to market
the Bank's products. The Bank has also originated credit card accounts
through mailings to BANK ONE customers and prospects. Management believes
that such multi-faceted account origination programs help to ensure
balanced and reliable growth for the Bank.
The First USA brand direct solicitation program represents the
greatest share of new account origination. The Bank has historically
emphasized direct solicitation as a source of new accounts as its expertise
has increased through experience and the benefit of numerous marketing,
credit and risk management tests. Currently, the Bank conducts national
direct mail and telemarketing solicitation to geographic areas that have
been selected from a process that includes a rigorous analysis of the
economic indicators of each region of the nation and targets the most
favorable regions. The Bank carefully targets consumers through various
data mining methods and targeting models. The Bank aligns the product
offering with the target customer segment along with the number and
sequence of offers in order to maximize penetration, response rates and
usage.
The affinity groups, financial institutions and sports marketing
programs are partnership programs which involve the active participation of
endorsing organizations. The affinity group marketing program involves the
solicitation of prospective individual cardmembers from identifiable groups
with a common interest or affiliation. In this program, the Bank has
entered into exclusive marketing arrangements with a number of affinity
groups. The Bank typically pays referral compensation to the affinity
groups for each new account generated. The Bank has a similar relationship
with certain professional sports organizations.
In its financial institutions program, the Bank maintains exclusive
marketing partnership relationships with banks, as well as mortgage
companies, insurance companies, brokerage firms and other financial
institutions. Through this program, participating financial institutions
offer VISAregistered trademark and MasterCardregistered trademark products
to their customers without becoming primary issuers. In addition to placing
the name of the participating financial institution on the front of the
plastic card, the Bank typically pays a referral fee for each account. The
Bank believes that the endorsement of the participating financial
institution reduces overall origination costs and encourages cardmember
usage.
The Bank also participates in co-branding, which involves a
partnership between the Bank and a consumer products or services company to
solicit the customers of such company. Companies such as airlines, computer
on-line services, catalog companies and general retailers participate with
financial institutions in co-branding programs. The Bank typically pays a
portion of on-going revenue to the co-branding partner, with the benefit of
such payment generally accruing to the customer in the form of "points"
which can then be redeemed with the co-branding partner.
The Bank currently has relationships with over 1,500 partners in these
various programs. Management believes this network is one of the largest of
its kind in the nation.
Underwriting Procedures. Generally, the credit risk of each applicant
is evaluated by application of a credit scoring system, which is intended
to provide a general indication, based on the information available, of the
applicant's willingness and ability to repay his or her obligations. Most
applications are scored based on the information received on the
application as well as data obtained from an independent credit reporting
agency. In select cases, based on certain criteria, including likelihood of
fraud, and in accordance with criteria established by Bank management,
employment and earnings are verified by telephone. Credit limits are
determined based on income and score or, in the case of applications that
have not been scored, based on income and certain information obtained from
the application and the independent credit reporting agency. Cardholder
requests for increased credit limits are evaluated based on a current
credit bureau report, updated application data, and prior account
performance. In addition, credit limit increases are effected periodically
by the Bank for all cardholders meeting specific criteria.
For preapproved solicitations, the Bank generally purchases prospect
names that meet established credit criteria from credit bureaus. These
lists are further edited and matched against internal and external sources
to insure optimal quality and accuracy. The Bank then mails preapproved
solicitation packages requiring only the signature and a brief amount of
information from the prospect. Preapproved solicitations are targeted to
high quality prospects and exhibit similar credit quality results as
compared to non-preapproved solicitations.
For non-preapproved solicitations, the Bank purchases prospect names
from a variety of sources and then edits the list utilizing internal and
external sources to insure quality and accuracy. The prospective customers
on the final list are mailed solicitations which include full applications.
Respondents are approved or declined based on both the demographic
characteristics drawn from the application and a credit bureau check.
Portfolio Acquisitions. The Bank has made portfolio acquisitions in
the past and such acquisitions are possible in the future. See "First USA
and BANK ONE CORPORATION." Prior to acquiring a portfolio, the Bank reviews
the historical performance and seasoning of the portfolio and the policies
and practices of the selling institution, but individual accounts are not
requalified by the Bank. There can be no assurance that Accounts so
acquired were originated in a manner consistent with the Bank's policies as
described under " Growth Strategy and Origination" and " Underwriting
Procedures" above or that the underwriting and qualification of such
Accounts conformed to any given standards. The Accounts include accounts
previously acquired by the Bank. Such accounts and any accounts acquired in
the future may become Additional Accounts provided that, at such time, they
constitute Eligible Accounts. See "The Receivables," "Description of the
Certificates Transfer and Assignment of Receivables," " Representations and
Warranties" and " Addition of Accounts."
DESCRIPTION OF FDR
With respect to the Accounts, certain data processing and
administrative functions associated with servicing the Receivables will
initially be performed by FDR. If FDR were to fail or become insolvent,
delays in processing and recovery of information with respect to charges
incurred by the respective cardholders could occur, and the replacement of
the services FDR currently provides to the Bank could be time-consuming. As
a result, delays in payments to Certificateholders could occur.
FDR is located in Omaha, Nebraska and provides computer data
processing services primarily to the bankcard industry. FDR is a subsidiary
of First Data Corp.
The Bank utilizes a variety of the services provided by FDR in
originating and servicing the Bank's VISA and MasterCard accounts,
including provision of network interface to other card processors through
Visa USA Incorporated and MasterCard International Incorporated. This
network provides cardholder authorizations in addition to a conduit for
funds transfer and settlement.
BILLING AND PAYMENTS
Cardholder Agreement. Each cardholder is subject to an agreement with
the Bank governing the terms and conditions of the related VISA or
MasterCard account. Pursuant to each such agreement, the Bank generally
reserves the right, upon advance notice to the cardholder, to add or to
change any terms, conditions, services or features of its VISA or
MasterCard accounts at any time, including increasing or decreasing
periodic finance charges, other charges or minimum payment terms. The
agreement with each cardholder provides that, subject to the requirements
of applicable law, after notice to a cardholder of any such new or changed
terms, such new or changed terms will become effective at the time stated
in such notice and will apply to all outstanding unpaid indebtedness as
well as new transactions.
A cardholder may use the credit card to purchase or lease goods or
services wherever the card is honored ("PURCHASES") or to obtain cash
loans ("CASH ADVANCES") from any financial institution that accepts the
card. Purchases and Cash Advances may also be obtained through the use of
"Convenience Checks" issued by the Bank which may be completed and signed
by the cardholder in the same way as a regular personal check.
Billing, Payments and Fees. A billing statement is sent to each
cardholder at the end of each monthly billing cycle in which the account
has a debit or credit balance of more than one dollar or if a finance
charge has been imposed. The Bank may assess a late payment fee if it does
not receive the minimum payment by the payment due date shown on the
monthly billing statement. The Bank may assess a return check fee for each
payment check that is dishonored or that is unsigned or otherwise
irregular, an overlimit fee for Purchases or Cash Advances that cause the
credit line to be exceeded and administrative fees for certain functions
performed at the request of the cardholder. Unless otherwise arranged
between the Bank and the cardholder, any late payment fee, return check fee
or administrative fee is added to the account and treated as a Purchase. In
some cases, the Bank charges a nonrefundable Annual Membership Fee.
Periodic Finance Charges are not assessed in most circumstances on
Purchases if the entire balance shown on the previous billing statement was
paid in full by the payment due date. New Purchases and Cash Advances are
included in the calculation of the balance subject to finance charge as of
the later of the day that they are made and the first day of the billing
cycle during which they were posted to the account; or, if a Convenience
Check is used, the transaction date of the check. Aggregate monthly finance
charges for each account consist of the sum of the Cash Advance finance
charge (not applicable for certain accounts) for each new Cash Advance
posted to the account, transaction finance charge (not applicable for
certain accounts) plus the Periodic Finance Charge. The Bank issues
accounts with fixed periodic rates and accounts with floating periodic
rates that adjust periodically according to an index.
The foregoing provisions apply with respect to cardholders that have
entered into one of the Bank's standard agreements by, in the case of a new
account, signature, recorded verbal confirmation of disclosure information
or, in the case of an account acquired by the Bank from another
institution, acceptance of the terms of the Bank's agreement in writing or
by using the credit card after disclosure that the account will be governed
by such terms. If the cardholder of an account acquired by the Bank from
another institution has not entered into one of the Bank's standard
agreements, the terms of the account may continue to be governed by the
agreement between the cardholder and the seller of the account, which may
differ in material respects from the provisions described above.
DELINQUENCIES AND CHARGE-OFFS
The Bank considers any account contractually delinquent if the minimum
payment due thereunder is not received by the Bank by the date of the
statement following the statement on which the amount is first stated to be
due. An account is not treated as delinquent by the Bank if the minimum
payment is received by the next billing date. The Bank classifies an
account as "over limit" if its posted balance exceeds its credit limit.
Efforts to collect delinquent credit card receivables currently are
made by the Bank's collection department personnel with regional collection
units located in Wilmington, Delaware, Orlando, Florida, Baton Rouge,
Louisiana, Columbus, Ohio, Austin, Texas and Frederick, Maryland.
Collection activities include statement messages, telephone calls and
formal collection letters. Collectors generally initiate telephone contact
with cardholders whose accounts have become 5 days or more delinquent. In
the event that initial telephone contact fails to resolve the delinquency,
the Bank continues to contact the cardholder by telephone and by mail. The
Bank may also enter into arrangements with cardholders to extend or
otherwise change payment schedules as approved by one of the Bank's
collection managers. Delinquency levels are monitored daily by the
respective collectors and aggregate delinquency information is reported
daily to senior management.
The Bank generally charges off an account immediately prior to the end
of the sixth billing cycle after having become contractually past due
unless a payment has been received in an amount sufficient to bring the
account into a different delinquency category or to bring the account
current. Charge-offs may occur earlier in some circumstances, as in the
case of bankrupt cardholders. At the time of charge-off, an evaluation is
made on a case by case basis whether to pursue further remedies. In most
cases outside collection agencies and, in some cases, outside attorneys,
are engaged. In some cases charged off accounts are sold to outside
collection agencies. The credit evaluation, servicing and charge-off
policies and collection practices of the Bank may change from time to time
in accordance with the Bank's business judgment and applicable law.
The Bank has a policy of restoring or "reaging" a delinquent account
to current status when the cardholder has made two consecutive payments
and, in the collector's judgment, has the ability to keep the account
current. A collector may recommend that an account be reaged in other
circumstances. All reaging must be approved by a supervisor and an account
may be reaged no more than once per year.
The Federal Financial Institutions Examination Counsel has proposed
revising its policy statement on the classification of retail credit. If
adopted, the revised policy statement could provide guidance for loans
affected by bankruptcy, fraudulent activity, and death; establish standards
for reaging, extending, deferring, or rewriting of past due accounts; and
broaden the circumstances under which partial payments are recognized as
full payments for purposes of determining that a loan is no longer
delinquent.
INTERCHANGE
Creditors participating in the VISA and MasterCard associations
receive certain fees ("Interchange") as partial compensation for taking
credit risk, absorbing fraud losses and funding receivables for a limited
period prior to initial billing. Under the VISA and MasterCard systems, a
portion of Interchange in connection with cardholder charges for goods and
services is collected by banks that issue credit cards by applying a
discount to the amount paid by such banks to the banks that clear the
related transactions for merchants. Interchange will be allocated to the
Trust, by treating 1.3% (subject to adjustment at the option of the
Transferor upon the satisfaction of certain conditions as described herein
in "Description of the Certificates Discount Receivables," which adjusted
percentage, if applicable will be specified in the applicable Prospectus
Supplement) of collections on the Receivables (whether arising from
Purchases or Cash Advances), other than collections with respect to
Periodic Finance Charges, Annual Membership Fees and Other Charges, as
collections of Discount Receivables.
RECOVERIES
The Transferor and the Servicer will be required, pursuant to the
terms of the Pooling and Servicing Agreement, to transfer to the Trust all
amounts received by the Transferor or the Servicer with respect to
Receivables in Defaulted Accounts, including amounts received by the
Transferor or the Servicer from the purchaser or transferee with respect to
the sale or other disposition of Receivables in Defaulted Accounts
("RECOVERIES"). In the event of any such sale or other disposition of
Receivables, Recoveries will not include amounts received by the purchaser
or transferee of such Receivables but will be limited to amounts received
by the Transferor or the Servicer from the purchaser or transferee.
Collections of Recoveries will be treated as collections of Principal
Receivables; provided, however, that to the extent the aggregate amount of
Recoveries received with respect to any Monthly Period exceeds the
aggregate amount of Principal Receivables (other than Ineligible
Receivables) in Defaulted Accounts on the day such Account became a
Defaulted Account for each day in such Monthly Period, the amount of such
excess will be treated as collections of Finance Charge Receivables.
THE RECEIVABLES
The property of the Trust includes and will include receivables (the
"RECEIVABLES") arising under certain VISA(R) and MasterCard(R) revolving
credit card accounts (the "ACCOUNTS") selected from the portfolio of VISA
and MasterCard accounts owned by the Transferor (the "BANK PORTFOLIO"),
all monies due or to become due in payment of the Receivables, all proceeds
of the Receivables and all monies on deposit in certain bank accounts of
the Trust (other than certain investment earnings on such amounts),
Recoveries and any Enhancement issued with respect to any Series or Class,
as described in the related Prospectus Supplement. The term "ENHANCEMENT"
means, with respect to any Series or Class thereof, any letter of credit,
cash collateral account or guaranty, collateral invested amount, guaranteed
rate agreement, maturity guaranty facility, tax protection agreement,
interest rate swap or other contract or agreement for the benefit of
Certificateholders of such Series. Enhancement may also take the form of
subordination of one or more Classes of a Series to any other Class or
Classes of a Series or a cross-support feature which requires collections
on Receivables of one Series to be paid as principal and/or interest with
respect to another Series. The Receivables included in the Trust may consist
of Accounts originated and owned by the Transferor and/or Accounts otherwise
acquired by the Transferor, as specified in the related Prospectus Supplement.
The Transferor originally conveyed to the Trustee all Receivables
existing under certain Accounts that were selected from the Bank Portfolio
based on criteria provided in the Pooling and Servicing Agreement as
applied on August 21, 1992 (the "ORIGINAL CUT-OFF DATE"), and on certain
additional cut off dates with respect to additional eligible revolving
credit card accounts to be included as Accounts (the "ADDITIONAL
ACCOUNTS") and has conveyed and will convey all Receivables arising under
such Accounts from time to time thereafter until termination of the Trust.
See "Description of the Certificates Addition of Accounts."
The Receivables conveyed to the Trust have arisen and will arise in
Accounts selected from the Bank Portfolio on the basis of criteria set
forth in the Pooling and Servicing Agreement. The Transferor will have the
right (subject to certain limitations and conditions set forth in the
Pooling and Servicing Agreement) to designate from time to time Additional
Accounts and to transfer to the Trust all Receivables of such Additional
Accounts, whether such Receivables are then existing or thereafter created.
Any Additional Accounts designated pursuant to the Pooling and Servicing
Agreement must be Eligible Accounts as of the date the Transferor
designates such accounts as Additional Accounts. In addition, the
Transferor is required to designate Additional Accounts (x) to maintain the
Transferor Interest so that, during any period of 30 consecutive days, the
Transferor Interest averaged over that period and expressed as a percentage
of the aggregate amount of Principal Receivables equals or exceeds such
percentage as may be specified in any Series Supplement (such percentage,
the "MINIMUM TRANSFEROR INTEREST") of the average of the aggregate amount
of Principal Receivables for the same period, or (y) to maintain, for so
long as certificates of any Series (including the Certificates) remain
outstanding, an aggregate amount of Principal Receivables in amount equal
to or greater than the Minimum Aggregate Principal Receivables. "MINIMUM
AGGREGATE PRINCIPAL RECEIVABLES" shall mean an amount equal to (i) the sum
of the initial invested amounts for all Series then outstanding other than
any Series of variable funding certificates, (ii) with respect to any
Series of variable funding certificates in its revolving period, the then
current invested amount of such Series and (iii) with respect to any
Series of variable funding certificates in its amortization period, the
invested amount of such Series at the end of the last day of the Revolving
Period for such Series. The Transferor will convey the Receivables then
existing or thereafter created under such Additional Accounts to the Trust.
Throughout the term of the Trust, the Accounts from which the Receivables
arise will be the Accounts designated by the Transferor on the Original
Cut-Off Date plus any Additional Accounts minus any Removed Accounts. See
"Description of the Certificates Representations and Warranties."
The Receivables consist of amounts charged by cardholders for goods
and services and cash advances (such amounts, less the amount of Discount
Receivables, the "PRINCIPAL RECEIVABLES"), plus the related periodic
finance charges (the "PERIODIC FINANCE CHARGES"), annual membership fees
(the "ANNUAL MEMBERSHIP FEES"), and amounts charged to the Accounts in
respect of cash advance finance charges, late fees, overlimit fees, return
check fees and similar fees and charges (the "OTHER CHARGES"). Receivables
in an amount equal to the product of the Yield Factor (initially 1.3%) and
amounts charged by cardholders for goods and services and cash advances
(the "DISCOUNT RECEIVABLES") will be treated as Finance Charge Receivables
(Discount Receivables, together with the Periodic Finance Charges, Annual
Membership Fees and Other Charges, the "FINANCE CHARGE RECEIVABLES"). See
"Description of the Certificates Discount Receivables." The Finance Charge
Receivables will not affect the amount of the Invested Amount represented
by the Certificates or the amount of the Transferor Interest, which are
determined on the basis of the amount of Principal Receivables in the
Trust.
During the term of the Trust, all new Receivables arising in the
Accounts will be transferred automatically to the Trust by the Transferor.
The total amount of Receivables in the Trust will fluctuate from day to day
because the amount of new Receivables arising in the Accounts and the
amount of payments collected on existing Receivables usually differ each
day. Because the Transferor Interest represents the interest in the
Principal Receivables in the Trust not represented by the Certificates or
any other Series of Certificates, the amount of the Transferor Interest
will fluctuate from day to day as Receivables are collected and new
Receivables are transferred to the Trust.
The aggregate undivided interest in the Principal Receivables in the
Trust evidenced by the Certificates will never exceed the aggregate
Invested Amount regardless of the total amount of Principal Receivables in
the Trust at any time.
The Prospectus Supplement relating to each Series of Certificates will
provide certain information about the Receivables in the Accounts selected
from the Bank Portfolio included in the Trust on the basis of criteria set
forth in the Pooling and Servicing Agreement (the "TRUST PORTFOLIO") as of
the date specified. Such information will include, but not be limited to,
the amount of Principal Receivables, the amount of Finance Charge
Receivables, the range of principal balances of the Accounts and the
average thereof, the range of credit limits of the Accounts and the average
thereof, the range of ages of the Accounts and the average thereof, the
geographic distribution of the Accounts, the types of Accounts and
delinquency and loss statistics relating to the Accounts.
MATURITY ASSUMPTIONS
Unless otherwise specified in the related Prospectus Supplement, for
each Series, following the Revolving Period, collections of Principal
Receivables are expected to be distributed to the holders of each Class of
Certificates (the "CERTIFICATEHOLDERS") of such Series or any specified
class of Certificates (each, a "CLASS") thereof on each specified
Distribution Date during the Controlled Amortization Period or are expected
to be accumulated for payment to Certificateholders of such Series or any
specified Class thereof during the Accumulation Period and distributed on a
Scheduled Payment Date; provided, however, that, if the Rapid Amortization
Period commences, collections of Principal Receivables will be paid to
Certificateholders in the manner described herein and in the related
Prospectus Supplement. The related Prospectus Supplement will specify the
date on which the Controlled Amortization Period or the Accumulation
Period, as applicable, will commence, or how such date will be determined,
the principal payments expected or available to be received or accumulated
during such Controlled Amortization Period or Accumulation Period, or on
the Scheduled Payment Date, as applicable, the manner and priority of
principal accumulations and payments among the Classes of a Series of
Certificates and the Pay Out Events which, if any were to occur, would lead
to the commencement of a Rapid Amortization Period.
No assurance can be given, however, that collections of Principal
Receivables allocated to be paid to Certificateholders or the holders of
any specified Class thereof will be available for distribution or
accumulation for payment to Certificateholders on each Distribution Date
during the Controlled Amortization Period, or, with respect to the
Accumulation Period, on the Scheduled Payment Date, as applicable. In
addition, the Transferor can give no assurance that the payment rate
assumptions for any Series will prove to be correct. The related Prospectus
Supplement will provide certain historical data relating to payments by
cardholders, total charge-offs and other related information relating to
the Trust Portfolio. There can be no assurance that future events will be
consistent with such historical data.
The amount of collections of Receivables may vary from month to month
due to seasonal variations, general economic conditions and payment habits
of individual cardholders. There can be no assurance that collections of
Principal Receivables with respect to the Trust Portfolio, and thus the
rate at which the related Certificateholders could expect to receive or
accumulate payments of principal on their Certificates during an
Amortization Period or on any Scheduled Payment Date, as applicable, will
be similar to any historical experience set forth in a Prospectus
Supplement. If a Pay Out Event occurs, the average life and maturity of
such Series of Certificates could be significantly reduced. In addition,
there can be no assurance that the issuance of the Series of Certificates
or the terms of such other Series might not have an impact on the timing of
the payments received by Certificateholders.
The actual payment rate for any Series of Certificates may be slower
than the payment rate used to determine the amount of collections of
Principal Receivables scheduled or available to be distributed or
accumulated for later payment to Certificateholders or any specified Class
thereof during the Controlled Amortization Period or the Accumulation
Period or on the Scheduled Payment Date, as applicable, or a Pay Out Event
may occur which would initiate the Rapid Amortization Period (each of the
Controlled Amortization Period, the Accumulation Period and the Rapid
Amortization Period, an "AMORTIZATION PERIOD"). There can be no assurance
that the actual number of months elapsed from the date of issuance of such
Series of Certificates to the final Distribution Date with respect to the
Certificates will equal the expected number of months. In addition if,
after the issuance of a Series, a related Companion Series is issued and a
Rapid Amortization Period commences, payments to the holders of such Series
may be delayed. See "Description of the Certificates Companion Series."
USE OF PROCEEDS
Unless otherwise specified in the related Prospectus Supplement, the
net proceeds from the sale of each Series of Certificates offered hereby
will be paid to the Transferor. The Transferor will use such proceeds for
its general corporate purposes.
FIRST USA AND BANK ONE CORPORATION
First USA Bank, N.A. The Bank is a wholly-owned subsidiary of First
USA Financial, Inc. ("FIRST USA FINANCIAL"), which is a wholly-owned
subsidiary of BANK ONE CORPORATION ("BANK ONE").
The Bank is one of the nation's two largest issuers of VISA and
MasterCard credit cards in the United States. The Bank's revenues derive
primarily from interest income and fees on its credit card accounts and
interchange income. Its primary cash expenses include the cost of funding
credit card loans, credit losses, salaries and employee benefits, marketing
expenses, processing expenses and income taxes.
The Bank offers a broad array of bankcard products to targeted
segments of creditworthy consumers. The Bank's primary target market is
experienced users of general purpose credit products. The strategy of the
Bank is to offer uniquely tailored individualized products to profitable
consumer segments.
The Bank markets over 1,000 credit card products to customers
throughout the United States. These products cover a range which includes
standard card products, those that are identified and developed through
data mining efforts, as well as products that are developed and marketed
through partnership relationships. Products include designs that are
tailored to an individual's lifestyle, profession or interest; those that
are built around affiliations, such as universities or fraternal
organizations, co-brand relationships and programs with financial
institutions and an upscale platinum card product.
The Bank's products feature low interest rates, specific features and
benefits, unique card design and individualized credit lines. The Bank's
strategy is to target customers through a carefully matched combination of
pricing, credit analysis and packaging. Rates, fees, other features and
credit lines offered vary depending on the profile of targeted prospect
groups. The Bank generally markets its products with low introductory and
regular rates and no annual fee.
In line with its product diversity, the Bank has built and maintains a
broad set of distribution channels. The Bank is one of the leading direct
mailers and telemarketers in the industry and manages a large active sales
force to distribute its products via fairs, tradeshows and other events.
The Bank also markets its products through an array of Web sites and
utilizes other direct response media channels for distribution.
BANK ONE CORPORATION
BANK ONE is a multi-bank holding company organized in 1998 under the
laws of the State of Delaware to effect the merger, effective October 2,
1998 (the "MERGER"), of First Chicago NBD Corporation with BANC ONE
CORPORATION.
Throughout its bank subsidiaries, BANK ONE provides domestic retail
banking, worldwide corporate and institutional banking and trust and
investment management services. At October 2, 1998, BANK ONE operated
banking offices in Arizona, Colorado, Delaware, Florida, Illinois, Indiana,
Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Texas, Utah, West Virginia
and Wisconsin. BANK ONE also owns nonbank subsidiaries that engage in
businesses related to banking and finance, including credit card and
merchant processing, consumer and education finance, mortgage lending and
servicing, insurance, venture capital, investment and merchant banking,
trust, brokerage, investment management, leasing, community development and
data processing.
On July 1, 1998, BANK ONE consolidated substantially all of its
current consumer credit card operations in the Bank. The Bank added
receivables in accounts originated by the Bank, Bank One, N.A., Bank One,
Arizona, NA and other affiliates of the Bank to the Trust on July 6, 1998.
On September 30, 1998, the Bank purchased the credit card portfolio of
Chevy Chase Bank F.S.B. ("CHEVY CHASE"). On November 16, 1998, the Bank
acquired accounts formerly owned by First National Bank of Commerce ("FIRST
COMMERCE") as a result of a merger between First Commerce and Bank One,
Louisiana, N.A. and the transfer by Bank One, Louisiana, N.A. to the Bank
of substantially all of such accounts. On December 24, 1998, the Bank
purchased a portfolio of VISA and MasterCard credit card loans from General
Electric Capital Corporation ("GE CAPITAL"). The portfolio includes
approximately $2.3 billion in managed credit card loans. The Bank has not
added to the Trust receivables in any of the accounts acquired from Chevy
Chase, First Commerce or GE Capital. A substantial portion of these
portfolios is currently subject to securitization through other credit card
master trusts. The Bank, may, from time to time, add to the Trust
additional Receivables arising in accounts originated by affiliates of the
Bank or purchased by the Bank. Each such addition to the Trust of
receivables in accounts originated by the Bank and affiliates of the Bank
or purchased by the Bank is subject to certain restrictions on additions of
Accounts in the Pooling and Servicing Agreement, including satisfaction of
the Rating Agency Condition with respect to such addition. "RATING AGENCY
CONDITION" with respect to any action means the condition that each Rating
Agency then rating any Series of Certificates outstanding confirm in
writing that such action would not result in any downgrading or withdrawal
of such Rating Agency's rating of any Series of Certificates then
outstanding. See "Description of the Certificates--Addition of Accounts"
herein.
Effective October 2, 1998, BANK ONE, the parent corporation of the
Bank, merged with First Chicago NBD Corporation, a Delaware corporation.
Immediately prior to such merger, BANC ONE CORPORATION, an Ohio corporation
("BANC ONE"), also merged with and into BANK ONE, which had been a
subsidiary, of BANC ONE prior to such merger. BANK ONE is a bank holding
company headquartered in Chicago, Illinois and registered under the Bank
Holding Company Act of 1956, as amended.
BANK ONE's executive offices are located at One First National Plaza,
Chicago, Illinois 60670, and its telephone number is (312)732-4000.
YEAR 2000 READINESS
BANK ONE, like most other companies, utilizes computer programs which
process transactions based on using two digits for the year of the
transaction rather than a full four digits. Programs that process Year
2000 transactions using only the last two digits "00" for the year may read
the date as 1900, not 2000. This can lead to significant processing
inaccuracies or render systems inoperable.
Solving the Year 2000 problem is a top priority for BANK ONE
CORPORATION. A focused comprehensive effort addresses every area of BANK
ONE to ensure products and services are able to accurately process dates
within and between the 20th and 21st centuries, including leap year
calculations. The year 2000 issue is being addressed by either modifying,
retiring or replacing existing software applications and systems or
installing vendor upgrades.
A plan has been developed and is being followed to ensure that the
modifications, replacements and upgrades are implemented and thoroughly
tested on a timely basis. As of December 31, 1998, 84 percent of all
software applications have been tested and returned to production. BANK
ONE expects all applications, systems and equipment to be Year 2000-ready
by June 30, 1999.
BANK ONE utilizes some software provided by outside suppliers which
must also become Year 2000-ready on a timely basis. BANK ONE is actively
monitoring the progress of outside suppliers. However, there is no
guarantee that the software of other suppliers on which BANK ONE's
information systems rely will be converted on a timely basis, or that
failure to convert would not have a material adverse effect on BANK ONE's
operations. Appropriate actions will be taken if a vendor's readiness does
not meet BANK ONE's expectations.
Year 2000 costs and the date on which the year 2000 modifications are
expected to be completed are based on management's best estimates, which
were derived utilizing numerous assumptions of future events including the
availability of certain resources, third party modifications and other
factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from those plans.
Specific factors that might cause material differences include, but are not
limited to, the availability and cost of personnel trained in this area,
the ability to locate and correct all relevant computer codes and similar
uncertainties.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued in Series. Each Series will represent
an interest in the Trust other than the interests represented by any other
Series of Certificates issued by the Trust (which may include Series
offered pursuant to this Prospectus) and the Exchangeable Transferor
Certificate. Each Series will be issued pursuant to the Pooling and
Servicing Agreement entered into by the Bank and the Trustee and a series
supplement (a "SERIES SUPPLEMENT") to the Pooling and Servicing Agreement,
a copy of the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Prospectus Supplement for
each Series will describe any provisions of the Pooling and Servicing
Agreement relating to such Series which may differ materially from the
Pooling and Servicing Agreement filed as an exhibit to the Registration
Statement. The following is a summary of the provisions common to each
Series of Certificates. The summary is qualified in its entirety by
reference to all of the provisions of the related Pooling and Servicing
Agreement and Series Supplement.
GENERAL
The assets of the Trust will be allocated among the Certificateholders
of each Series (the "INVESTOR INTEREST") of the Trust and the holder of the
Exchangeable Transferor Certificate and, in certain circumstances, the
related Enhancement Providers. The aggregate principal amount of the
interest of the Certificateholders of a Series in the Trust is referred to
herein as the "INVESTED AMOUNT" and is based on the aggregate amount of the
Principal Receivables in the Trust allocated to such Series. The aggregate
principal amount of the interest of the Transferor in the Trust is
referred to herein as the "TRANSFEROR INTEREST," and is based on the
aggregate amount of Principal Receivables (the "TRANSFEROR AMOUNT") in the
Trust not allocated to the Certificateholders or any Enhancement Provider.
The certificate that evidences the Transferor Interest is referred to
herein as the "EXCHANGEABLE TRANSFEROR CERTIFICATE."
The Certificates of each Series will represent undivided interests in
certain assets of the Trust, including the right to the applicable Investor
Percentage of all cardholder payments on the Receivables. For each Series
of Certificates, unless otherwise specified in the related Prospectus
Supplement, the Invested Amount on any date will be equal to the initial
Invested Amount as of the related Closing Date for such Series minus the
amount of principal paid to the Certificateholders prior to such date and
minus the amount of unreimbursed Investor Charge-Offs with respect to such
Series prior to such date. If so specified in the Prospectus Supplement
relating to any Series of Certificates, under certain circumstances the
Invested Amount may be further adjusted by the amount of principal
allocated to Certificateholders, the funds on deposit in any specified
account, and any other amount specified in the related Prospectus
Supplement.
Each Series of Certificates may consist of one or more Classes, one or
more of which may be senior certificates ("SENIOR CERTIFICATES") and one or
more of which may be subordinated certificates ("SUBORDINATED
CERTIFICATES"). Each Class of a Series will evidence the right to receive
a specified portion of each distribution of principal or interest or both.
The Invested Amount with respect to a Series with more than one Class will
be allocated among the Classes as described in the related Prospectus
Supplement. The Certificates of a Class may differ from Certificates of
other Classes of the same Series in, among other things, the amounts
allocated to principal payments, maturity date, interest rate per annum
("CERTIFICATE RATE") and the availability of Enhancement.
The Certificateholders of each Series will have the right to receive
(but only to the extent needed to make required payments under the Pooling
and Servicing Agreement and the related Series Supplement and subject to
any reallocation of such amounts if the Series Supplement so provides)
varying percentages of the collections of Finance Charge Receivables and
Principal Receivables for each month and will be allocated a varying
percentage of the amount of Receivables in Accounts which were written off
as uncollectible by the Servicer ("DEFAULTED ACCOUNTS") for such month
(each such percentage, an "INVESTOR PERCENTAGE"). The related Prospectus
Supplement will specify the Investor Percentages with respect to the
allocation of collections of Principal Receivables, Finance Charge
Receivables and Receivables in Defaulted Accounts during the Revolving
Period, any Amortization Period and any Accumulation Period, as applicable.
If the Certificates of a Series offered hereby include more than one Class
of Certificates, the assets of the Trust allocable to the Certificates of
such Series may be further allocated among each Class in such Series as
described in the related Prospectus Supplement. See " Investor Percentage
and Transferor Percentage."
The Certificates of each Series will represent interests in the Trust
only and will not represent interests in or recourse obligations of the
Bank or any of its affiliates. A Certificate is not a deposit and neither
the Certificates nor the underlying Accounts or Receivables are insured or
guaranteed by the FDIC or any other governmental agency.
For each Series of Certificates, payments of interest and principal
will be made on Distribution Dates or other payment dates as specified in
the related Prospectus Supplement to Certificateholders in whose names the
Certificates were registered on the record dates (each, a "RECORD DATE")
specified in the related Prospectus Supplement. Interest will be
distributed to Certificateholders in the amounts, for the periods and on
the dates specified in the related Prospectus Supplement.
For each Series of Certificates, the Transferor initially will own the
Exchangeable Transferor Certificate. The Exchangeable Transferor
Certificate will represent the undivided interest in the Trust not
represented by the Certificates issued and outstanding under the Trust or
the rights, if any, of any Enhancement Providers to receive payments from
the Trust. The holder of the Exchangeable Transferor Certificate will have
the right to a percentage (the "TRANSFEROR PERCENTAGE") of all cardholder
payments from the Receivables in the Trust.
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates, during the Revolving Period, the
Invested Amount will remain constant except under certain limited
circumstances. See " Defaulted Receivables; Rebates and Fraudulent
Charges," and " Investor Charge-Offs." The amount of Principal Receivables
in the Trust, however, will vary each day as new Principal Receivables are
created and others are paid or charged-off. The amount of the Transferor
Interest will fluctuate each day, therefore, to reflect the changes in the
amount of the Principal Receivables in the Trust. When a Series is
amortizing, the Invested Amount of such Series will generally decline as
payments of Principal Receivables are collected and distributed to the
Certificateholders. As a result, the Transferor Interest will generally
increase each month during an Amortization Period for any Series to reflect
the reductions in the Invested Amount of such Series and will also change
to reflect the variations in the amount of Principal Receivables in the
Trust. The Transferor Interest may also be reduced as the result of an
Exchange. See " Exchanges."
Unless otherwise specified in the related Prospectus Supplement,
Certificates of each Series initially will be represented by certificates
registered in the name of the nominee of DTC (together with any successor
depository selected by the Transferor, the "DEPOSITORY") except as set
forth below. Unless otherwise specified in the related Prospectus
Supplement, with respect to each Series of Certificates, beneficial
interests in the Certificates will be available for purchase in minimum
denominations of $1,000 and integral multiples thereof in book-entry form
only. The Transferor has been informed by DTC that DTC's nominee will be
Cede & Co. ("CEDE"). No Certificate Owner acquiring an interest in the
Certificates will be entitled to receive a certificate representing such
person's interest in the Certificates unless Definitive Certificates are
issued. Unless and until Definitive Certificates are issued for any
Series under the limited circumstances described herein, all references
herein to actions by Certificateholders shall refer to actions taken by DTC
upon instructions from DTC Participants (as defined below), and all
references herein to distributions, notices, reports and statements to
Certificateholders shall refer to distributions, notices, reports and
statements to DTC or Cede, as the registered holder of the Certificates, as
the case may be, for distribution to Certificate Owners in accordance with
DTC procedures. See " Book-Entry Registration" and " Definitive
Certificates."
If so specified in the Prospectus Supplement relating to a Series,
application will be made to list the Certificates of such Series, or all or
a portion of any Class thereof, on the Luxembourg Stock Exchange, or all
or a portion of such Series or Classes thereof on any other specified
exchange.
BOOK-ENTRY REGISTRATION
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates in book-entry form,
Certificateholders may hold their Certificates through DTC (in the United
States) or Cedelbank or Euroclear (in Europe) which in turn hold through
DTC, if they are participants of such systems, or indirectly through
organizations that are participants in such systems.
Cede, as nominee for DTC, will hold the global Certificates. Cedelbank
and Euroclear will hold omnibus positions on behalf of the Cedelbank
Customers and the Euroclear Participants, respectively, through customers'
securities accounts in Cedelbank's and Euroclear's names on the books of
their respective depositaries (collectively, the "DEPOSITARIES") which in
turn will hold such positions in customers' securities accounts in the
Depositaries' names on the books of DTC.
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, as amended (the "EXCHANGE ACT"). DTC
holds securities that its participating organizations ("DTC PARTICIPANTS")
deposit with DTC. DTC also facilitates the clearance and settlement among
DTC Participants of securities transactions, such as transfers and pledges,
in deposited securities through electronic book-entry changes in DTC
Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. DTC Participants include securities brokers
and dealers, banks, trust companies and clearing corporations and may
include certain other organizations. DTC is owned by a number of its DTC
Participants and the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc.
Indirect 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 DTC Participant, either
directly or indirectly ("INDIRECT PARTICIPANTS"). The rules applicable to
DTC and DTC Participants are on file with the Securities and Exchange
Commission (the "SEC").
DTC management is aware that some computer applications and systems
used for processing data were written using two digits rather than four to
define the applicable year, and therefore may not recognize a date using
"00" as the year 2000. This could result in the inability of these systems
to properly process transactions with dates in the year 2000 and
thereafter. DTC has developed and is implementing a program to address
this problem so that its applications and systems as the same relate to the
timely payment of distributions (including principal and interest payments)
to securityholders, book-entry deliveries and settlement of trades within
DTC continue to function properly. This program includes a technical
assessment and a remediation plan, each of which is complete.
Additionally, DTC plans to implement a testing phase of this program which
is expected to be completed within appropriate time frames.
In addition, DTC is contacting (and will continue to contact) third
party vendors that provide services to DTC to determine the extent of their
year 2000 compliance, and DTC will develop contingency plans as it deems
appropriate to address failures in year 2000 compliance on the part of
third party vendors. However, there can be no assurance that the systems
of third party vendors will be timely converted and will not adversely
affect the proper functioning of DTC's services.
The information set forth in the preceding two paragraphs has been
provided by DTC for informational purposes only and is not intended to
serve as a representation, warranty or contract modification of any kind.
The Transferor makes no representations as to the accuracy or completeness
of such information.
Transfers between DTC Participants will occur in accordance with DTC
rules. Transfers between Cedelbank Customers and Euroclear Participants
will occur in the ordinary way in accordance with their applicable rules
and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC in the United States, on the one hand, and directly or
indirectly through Cedelbank Customers or Euroclear Participants, on the
other, will be effected in DTC in accordance with DTC rules on behalf of
the relevant European international clearing system by its Depositary;
however, such cross-market transactions will require delivery of
instructions to the relevant European international clearing system by the
counterparty in such system in accordance with its rules and procedures and
within its established deadlines (European time). The relevant European
international clearing system will, if the transaction meets its settlement
requirements, deliver instructions to its Depositary to take action to
effect final settlement on its behalf by delivering or receiving securities
in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Cedelbank
Customers and Euroclear Participants may not deliver instructions directly
to the Depositaries.
Because of time-zone differences, credits of securities in Cedelbank
or Euroclear as a result of a transaction with a DTC Participant will be
made during the subsequent securities settlement processing, dated the
business day following the DTC settlement date, and such credits or any
transactions in such securities settled during such processing will be
reported to the relevant Cedelbank Customers or Euroclear Participant on
such business day. Cash received in Cedelbank or Euroclear as a result of
sales of securities by or through a Cedelbank Customers or a Euroclear
Participant will be received with value on the DTC settlement date but will
be available in the relevant Cedelbank or Euroclear cash account only as of
the business day following settlement in DTC.
Certificate Owners that are not DTC Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership
of, or other interest in, Certificates may do so only through DTC
Participants and Indirect Participants. In addition, Certificate Owners
will receive all distributions of principal of and interest on the
Certificates from the Trustee through DTC Participants who in turn will
receive them from DTC. Under a book-entry format, Certificate Owners may
experience some delay in their receipt of payments, since such payments
will be forwarded by the Trustee to Cede, as nominee for DTC. DTC will
forward such payments to DTC Participants which thereafter will forward
them to Indirect Participants or Certificate Owners. It is anticipated that
the only "Certificateholder" of Certificates in book-entry form will be
Cede, as nominee of DTC. Certificate Owners will not be recognized by the
Trustee as Certificateholders, as such term is used in the Pooling and
Servicing Agreement, and Certificate Owners will only be permitted to
exercise the rights of Certificateholders indirectly through DTC
Participants who in turn will exercise the rights of Certificateholders
through DTC.
Under the rules, regulations and procedures creating and affecting DTC
and its operations, DTC is required to make book-entry transfers among DTC
Participants on whose behalf it acts with respect to the Certificates and
is required to receive and transmit distributions of principal of and
interest on the Certificates. DTC Participants and Indirect Participants
with which Certificate Owners have accounts with respect to the
Certificates similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective
Certificate Owners. Accordingly, although Certificate Owners will not
possess Certificates, Certificate Owners will receive payments and will be
able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who in turn
act on behalf of Indirect Participants and certain banks, the ability of a
Certificate Owner to pledge Certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
Certificates, may be limited due to the lack of a physical certificate for
such Certificates.
DTC has advised the Transferor that it will take any action permitted
to be taken by a Certificateholder under the Pooling and Servicing
Agreement only at the direction of one or more DTC Participants to whose
account with DTC the Certificates are credited. Additionally, DTC has
advised the Transferor that it will take such actions with respect to
specified percentages of the Invested Amount only at the direction of and
on behalf of DTC Participants whose holdings include undivided interests
that satisfy such specified percentages. DTC may take conflicting actions
with respect to other undivided interests to the extent that such actions
are taken on behalf of DTC Participants whose holdings include such
undivided interests.
Cedelbank, sociEtE anonyme ("CEDELBANK") is incorporated under the
laws of Luxembourg as a professional depository. Cedelbank holds
securities for its participating organizations ("CEDELBANK CUSTOMERS") and
facilitates the clearance and settlement of securities transactions between
Cedelbank Customers through electronic book-entry changes in accounts of
Cedelbank Customers, thereby eliminating the need for physical movement of
certificates. Transactions may be settled in Cedelbank in any of 36
currencies, including United States dollars. Cedelbank provides to its
Cedelbank Customers, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Cedelbank deals with
domestic securities markets in over 30 countries through established
depository and custodial relationships. Cedelbank has established an
electronic bridge with Morgan Guaranty Trust as the Operator of the
Euroclear System ("MGT/EOC") in Brussels to facilitate settlement of trades
between Cedelbank and MGT/EOC. Cedelbank currently accepts over 110,000
securities issues on its books. As a professional depository, Cedelbank
is subject to regulation by the Luxembourg Commission for the Supervision
of the Financial Sector, which supervises Luxembourg banks. Cedelbank
Customers are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations and may include the
underwriters of any Series of Certificates. Cedelbank Customers in the
United States are limited to securities brokers and dealers and banks.
Currently, Cedelbank has approximately 2,000 customers located in over 80
countries, including all major European countries, Canada and the United
States. Indirect access to Cedelbank is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a Cedelbank Customer, either directly or
indirectly.
The Euroclear System (the "EUROCLEAR SYSTEM") was created in 1968 to
hold securities for participants of the Euroclear System ("EUROCLEAR
PARTICIPANTS") and to clear and settle transactions between Euroclear
Participants through simultaneous electronic book-entry delivery against
payment, thereby eliminating the need for physical movement of certificates
and any risk from lack of simultaneous transfers of securities and cash.
Transactions may now be settled in any of 34 currencies, including United
States dollars. The Euroclear System includes various other services,
including securities lending and borrowing and interfaces with domestic
markets in several countries generally similar to the arrangements for
cross-market transfers with DTC described above. The Euroclear System is
operated by Morgan Guaranty Trust Company of New York's Brussels, Belgium
office (the "EUROCLEAR OPERATOR" or "EUROCLEAR"), under contract with
Euroclear Clearance System, S.C., a Belgian cooperative corporation (the
"COOPERATIVE"). All operations are conducted by the Euroclear Operator, and
all Euroclear securities clearance accounts and Euroclear cash accounts are
accounts with the Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for the Euroclear System on behalf of Euroclear
Participants. Euroclear Participants include banks (including central
banks), securities brokers and dealers and other professional financial
intermediaries and may include the underwriters of any Series of
Certificates. Indirect access to the Euroclear System is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such,
it is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York State Banking Department, as well as the
Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of
Euroclear and the related Operating Procedures of the Euroclear System and
applicable Belgian law (collectively, the "TERMS AND CONDITIONS"). The
Terms and Conditions govern transfers of securities and cash within the
Euroclear System, withdrawal of securities and cash from the Euroclear
System, and receipts of payments with respect to securities in the
Euroclear System. All securities in the Euroclear System are held on a
fungible basis without attribution of specific certificates to specific
securities clearance accounts. The Euroclear Operator acts under the Terms
and Conditions only on behalf of Euroclear Participants and has no record
of or relationship with persons holding through Euroclear Participants.
Distributions with respect to Certificates held through Cedelbank or
Euroclear will be credited to the cash accounts of Cedelbank Customers or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Depositary. Such distributions
will be subject to tax reporting in accordance with relevant United States
tax laws and regulations. See "Certain U.S. Federal Income Tax
Consequences." Cedelbank or the Euroclear Operator, as the case may be,
will take any other action permitted to be taken by a Certificateholder
under the Pooling and Servicing Agreement on behalf of a Cedelbank Customer
or Euroclear Participant only in accordance with its relevant rules and
procedures and subject to its Depositary's ability to effect such actions
on its behalf through DTC.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Certificates among
participants of DTC, Cedelbank and Euroclear, they are under no obligation
to perform or continue to perform such procedures and such procedures may
be discontinued at any time.
DEFINITIVE CERTIFICATES
Unless otherwise specified in the related Prospectus Supplement, the
Certificates of each Series otherwise issued in book-entry form will be
issued in fully registered, certificated form to Certificate Owners or
their nominees ("DEFINITIVE CERTIFICATES") rather than to DTC or its
nominee, only if (i) the Transferor advises the Trustee in writing that DTC
is no longer willing or able to discharge properly its responsibilities as
Depository with respect to such Series of Certificates, and the Trustee or
the Transferor is unable to locate a qualified successor, (ii) the
Transferor, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through DTC or (iii) after the occurrence
of a Servicer Default, Certificate Owners representing not less than 50%
(or such other percentage specified in the related Prospectus Supplement)
of the Invested Amount advise the Trustee and DTC through participants in
writing that the continuation of a book-entry system through DTC (or a
successor thereto) is no longer in the best interest of the Certificate
Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all participants of the
availability through DTC of Definitive Certificates. Upon surrender by DTC
of the definitive certificate representing the Certificates and
instructions for re-registration, the Trustee will issue the Certificates
as Definitive Certificates, and thereafter the Trustee will recognize the
holders of such Definitive Certificates as holders under the Pooling and
Servicing Agreement ("HOLDERS").
Distribution of principal and interest on the Certificates will be
made by the Trustee directly to Holders of Definitive Certificates in
accordance with the procedures set forth herein and in the Pooling and
Servicing Agreement. Interest payments and any principal payments on each
Distribution Date or other payment date as specified in the related
Prospectus Supplement will be made to Holders in whose names the Definitive
Certificates were registered at the close of business on the related Record
Date. Distributions will be made by check mailed to the address of such
Holder as it appears on the register maintained by the Trustee or, if such
Holder holds more than an aggregate principal amount of such Definitive
Certificates to be specified in the Pooling and Servicing Agreement, by
wire transfer to such Holder's account. The final payment on any
Certificate (whether Definitive Certificates or the Certificates registered
in the name of Cede representing the Certificates), however, will be made
only upon presentation and surrender of such Certificate at the office or
agency specified in the notice of final distribution to Certificateholders.
The Trustee will provide such notice to registered Certificateholders not
later than the fifth day of the month of such final distributions.
Definitive Certificates will be transferable and exchangeable at the
offices of the Transfer Agent and Registrar specified in the Pooling and
Servicing Agreement, which shall initially be the Trustee. No service
charge will be imposed for any registration of transfer or exchange, but
the transfer agent and registrar may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection therewith.
INTEREST PAYMENTS
For each Series of Certificates and Class thereof, interest will
accrue from the relevant Closing Date on the applicable Invested Amount,
plus, if applicable, the Pre-Funding Amount (or other amount specified in
the related Prospectus Supplement) at the applicable Certificate Rate,
which may be a fixed, floating or other type of rate as specified in the
related Prospectus Supplement. Interest will be distributed to
Certificateholders in the amounts and on the dates (which may be monthly,
quarterly, semiannually or otherwise as specified in the related Prospectus
Supplement) (each, a "DISTRIBUTION DATE"). Interest payments on any
Distribution Date will generally be funded from collections of Finance
Charge Receivables allocated to the Investor Interest during the preceding
monthly period or periods (each, a "MONTHLY PERIOD") and may be funded from
certain investment earnings on funds held in accounts of the Trust, from
any applicable Enhancement, if necessary, or certain other amounts as
specified in the related Prospectus Supplement. If the Distribution Dates
for payment of interest for a Series or Class occur less frequently than
monthly, such collections or other amounts (or the portion thereof
allocable to the Investor Interest of such Class) may be deposited in one
or more trust accounts (each, an "INTEREST FUNDING ACCOUNT") pending
distribution to the Certificateholders of such Series or Class, as
described in the related Prospectus Supplement. If a Series has more than
one Class of Certificates, each such Class may have a separate Interest
Funding Account. The Prospectus Supplement relating to each Series of
Certificates and each Class thereof will describe the amounts and sources
of interest payments to be made, the Certificate Rate for each Class
thereof, and, for a Series or each Class thereof bearing interest at a
floating Certificate Rate, the initial Certificate Rate, the dates and the
manner for determining subsequent Certificate Rates, and the formula, index
or other method by which such Certificate Rates are determined.
PRINCIPAL PAYMENTS
The principal of the Certificates of each Series offered hereby will
be scheduled to be paid either in installments commencing on a date
specified in the related Prospectus Supplement (the "PRINCIPAL COMMENCEMENT
DATE"), in which case such Series will have either a Controlled
Amortization Period, as described below, or on an expected date specified
in, or determined in the manner specified in, the related Prospectus
Supplement (the "SCHEDULED PAYMENT DATE"), in which case such Series will
have an Accumulation Period, as described below. If a Series has more than
one Class of Certificates, a different method of paying principal,
Principal Commencement Date or Scheduled Payment Date may be assigned to
each Class. The payment of principal with respect to the Certificates of a
Series or Class may commence earlier than the applicable Principal
Commencement Date or Scheduled Payment Date, and the final principal
payment with respect to the Certificates of a Series or Class may be made
later than the applicable expected payment date, Scheduled Payment Date or
other expected date, if a Pay Out Event occurs and the Rapid Amortization
Period commences with respect to such Series or Class or under certain
other circumstances described herein or in the related Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement,
during the Revolving Period for each Series of Certificates (which begins
on the Closing Date relating to such Series and ends with the commencement
of an Amortization Period), no principal payments will be made to the
Certificateholders of such Series. During the Controlled Amortization
Period or Accumulation Period, as applicable, which will be scheduled to
begin on the date specified in, or determined in the manner specified in,
the related Prospectus Supplement, and during the Rapid Amortization
Period, which will begin upon the occurrence of a Pay Out Event, principal
will be paid to the Certificateholders in the amounts and on Distribution
Dates specified in the related Prospectus Supplement or will be accumulated
in a trust account established for the benefit of such Certificateholders
(a "PRINCIPAL FUNDING ACCOUNT") for later distribution to
Certificateholders on the Scheduled Payment Date in the amounts specified
in the related Prospectus Supplement. Principal payments for any Series or
Class thereof will be funded from collections of Principal Receivables
received during the related Monthly Period or Periods as specified in the
related Prospectus Supplement and allocated to the Investor Interest such
Series or Class and from certain other sources specified in the related
Prospectus Supplement. In the case of a Series with more than one Class of
Certificates, the Certificateholders of one or more Classes may receive
payments of principal at different times. The related Prospectus Supplement
will describe the manner, timing and priority of payments of principal to
Certificateholders of each Class.
Funds on deposit in any Principal Funding Account applicable to a
Series may be subject to a guaranteed rate agreement or investment contract
or other arrangement specified in the related Prospectus Supplement
intended to assure a minimum rate of return on the investment of such
funds. In order to enhance the likelihood of the payment in full of the
principal amount of a Series of Certificates or Class thereof at the end of
an Accumulation Period, such Series of Certificates or Class thereof may be
subject to a principal payment guaranty or other similar arrangement
specified in the related Prospectus Supplement.
REVOLVING PERIOD
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series and any Class thereof, no principal will be payable
to Certificateholders until the Principal Commencement Date or the
Scheduled Payment Date with respect to such Series or Class. For the period
beginning on the Closing Date and ending with the commencement of an
Amortization Period (the "REVOLVING PERIOD"), collections of Principal
Receivables otherwise allocable to the Investor Interest will, subject to
certain limitations, be paid from the Trust to the holder of the
Exchangeable Transferor Certificate or, under certain circumstances and if
so specified in the related Prospectus Supplement, will be treated as
Excess Principal Collections and paid to the holders of other Series of
Certificates issued by the Trust, as described herein and in the related
Prospectus Supplement. See " Shared Collections of Principal Receivables."
CONTROLLED AMORTIZATION PERIOD
If the Prospectus Supplement relating to a Series so specifies, unless
a Rapid Amortization Period with respect to such Series commences, the
Certificates of such Series or any Class thereof will have an amortization
period (the "CONTROLLED AMORTIZATION PERIOD") during which collections of
Principal Receivables allocable to the Investor Interest of such
Series (and certain other amounts if so specified in the related Prospectus
Supplement) will be used on each Distribution Date to make principal
distributions in scheduled amounts to the Certificateholders of such
Series or any Class of such Series then scheduled to receive such
distributions. The amount to be distributed on any Distribution Date during
the Controlled Amortization Period will be limited to an amount (the
"CONTROLLED DISTRIBUTION AMOUNT") equal to an amount specified in the
related Prospectus Supplement (the "CONTROLLED AMORTIZATION AMOUNT") plus
any existing deficit Controlled Amortization Amount arising from prior
Distribution Dates. If a Series has more than one Class of Certificates,
each Class may have a separate Controlled Amortization Amount. In addition,
the related Prospectus Supplement may describe certain priorities among
such Classes with respect to such distributions. The Controlled
Amortization Period will commence at the close of business on the Principal
Commencement Date and continue until the earliest of (a) the commencement
of the Rapid Amortization Period, (b) payment in full of the Invested
Amount of the Certificates of such Series or Class and (c) the close of
business on the Stated Series Termination Date with respect to such Series.
ACCUMULATION PERIOD
If the Prospectus Supplement relating to a Series so specifies, unless
a Rapid Amortization Period with respect to such Series commences, the
Certificates of such Series or any Class thereof will have an accumulation
period (the "ACCUMULATION PERIOD") during which collections of Principal
Receivables allocable to the Investor Interest of such Series (and certain
other amounts if so specified in the related Prospectus Supplement) will be
deposited prior to each Distribution Date in a Principal Funding Account
and used to make distributions of principal to the Certificateholders of
such Series or Class on the Scheduled Payment Date. If the Prospectus
Supplement relating to a series so specifies, the amount to be deposited in
the Principal Funding Account on any date will be limited to an amount (the
"CONTROLLED DEPOSIT AMOUNT") equal to an amount specified in the related
Prospectus Supplement (the "CONTROLLED ACCUMULATION AMOUNT") plus the
amount of any shortfalls arising from the failure to pay the Controlled
Accumulation Amount on any prior Distribution Dates. If a Series has more
than one Class of Certificates, each Class may have a separate Principal
Funding Account and Controlled Accumulation Amount. In addition, the
related Prospectus Supplement may describe certain priorities among such
Classes with respect to deposits of principal into such Principal Funding
Account. The Accumulation Period will commence at the close of business on
a date specified in the related Prospectus Supplement (subject to
adjustment if so specified in the related Prospectus Supplement) and
continue until the earliest of (a) the commencement of the Rapid
Amortization Period, (b) payment in full of the Invested Amount of the
Certificates of such Series or Class and (c) the close of business on the
Stated Series Termination Date with respect to such Series.
Funds on deposit in any Principal Funding Account may be invested in
permitted investments or subject to a guaranteed rate or investment
agreement or other arrangement intended to assure a specified return on the
investment of such funds. Investment earnings on such funds may be applied
to pay interest on the related Series of Certificates. In order to enhance
the likelihood of payment in full of principal at the end of an
Accumulation Period with respect to a Series of Certificates, such
Series may be subject to a principal guaranty or other similar arrangement.
See " Principal Payments."
RAPID AMORTIZATION PERIOD
During the period from the day on which a Pay Out Event has occurred
with respect to a Series to the earlier of the date on which the Invested
Amount of the Certificates of such Series has been paid in full or the
related Stated Series Termination Date (the "RAPID AMORTIZATION PERIOD"),
unless otherwise provided in the related Prospectus Supplement, collections
of Principal Receivables allocable to the Investor Interest of such
Series (and certain other amounts if so specified in the related Prospectus
Supplement) will be distributed as principal payments to the
Certificateholders of such Series monthly on each Distribution Date with
respect to such Series in the manner and order of priority set forth in the
related Prospectus Supplement. During the Rapid Amortization Period with
respect to a Series, distributions of principal to Certificateholders will
not be limited by any Controlled Distribution Amount or Controlled Deposit
Amount. In addition, upon the commencement of the Rapid Amortization Period
with respect to a Series, unless otherwise specified in the related
Prospectus Supplement, any funds on deposit in a Principal Funding Account
with respect to such Series or any Class thereof will be paid to the
Certificateholders of such Series or Class on the first Distribution Date
in the Rapid Amortization Period. See " Pay Out Events" for a discussion
of the events which might lead to commencement of the Rapid Amortization
Period.
SHARED EXCESS FINANCE CHARGE COLLECTIONS
If so specified in the related Prospectus Supplement, the
Certificateholders of a Series or any Class thereof may be entitled to
receive all or a portion of Excess Finance Charge Collections with respect
to another Series to cover any shortfalls with respect to amounts payable
from collections of Finance Charge Receivables allocable to such Series or
Class.
SHARED COLLECTIONS OF PRINCIPAL RECEIVABLES
Unless otherwise specified in the related Prospectus Supplement, to
the extent that collections of Principal Receivables and certain other
amounts that are allocated to the Invested Amount of any Series are not
needed to make payments or deposits with respect to such Series, such
collections ("EXCESS PRINCIPAL COLLECTIONS") will be applied to cover
principal payments due to or for the benefit of Certificateholders of
another Series. Any such reallocation will not result in a reduction in the
Invested Amount of the Series to which such collections were initially
allocated.
COMPANION SERIES
If so provided in the Prospectus Supplement relating to a Series, each
such Series is subject to being paired with another Series (in such case, a
"COMPANION SERIES"). The Prospectus Supplement for such Series and the
Prospectus Supplement for the Companion Series will each specify the
relationship between the Series.
TRANSFER AND ASSIGNMENT OF RECEIVABLES
With respect to the Trust, the Transferor has transferred and assigned
to the Trust of all its rights, title and interest in and to Receivables in
certain Accounts which were selected from the Bank Portfolio based upon
criteria set forth in the Pooling and Servicing Agreement.
In connection with the transfer of the Receivables to the Trust, the
Transferor has indicated in its computer files that the Receivables have
been conveyed to the Trust. In addition, the Transferor has provided to the
Trustee computer files or microfiche lists containing a true and complete
list showing each Account, including each Additional Account, identified by
account number and by total outstanding balance, respectively. The
Transferor has not delivered and will not deliver to the Trustee any other
records or agreements relating to the Accounts or the Receivables, except
in connection with additions or removals of Accounts. Except as stated
above, the records and agreements relating to the Accounts and the
Receivables maintained by the Transferor or the Servicer are not segregated
by the Transferor or the Servicer from other documents and agreements
relating to other credit card accounts and receivables and are not stamped
or marked to reflect the transfer of the Receivables to the Trust, but the
computer records of the Transferor are required to be marked to evidence
such transfer. The Transferor has filed UCC financing statements with
respect to the Receivables meeting the requirements of Delaware state law.
See "Certain Legal Aspects of the Receivables."
EXCHANGES
The Pooling and Servicing Agreement provides for the Trustee to issue
two types of certificates: (i) one or more Series of Certificates that will
be transferable and have the characteristics described below and (ii) the
Exchangeable Transferor Certificate, a certificate which evidences the
Transferor Interest, which initially will be held by the Transferor and
will be transferable only as provided in the Pooling and Servicing
Agreement. The Pooling and Servicing Agreement also provides that, pursuant
to any one or more Series Supplements, the holder of the Exchangeable
Transferor Certificate may tender the Exchangeable Transferor Certificate,
or, if provided in the relevant Series Supplement, Certificates
representing any Series and the Exchangeable Transferor Certificate, to the
Trustee in exchange for one or more new Series (which may include Series
offered pursuant to this Prospectus) and a reissued Exchangeable Transferor
Certificate (any such tender, an "EXCHANGE"). However, after giving effect
to any Exchange the Transferor Interest expressed as a percentage of the
aggregate amount of Principal Receivables must be equal to or exceed the
Minimum Transferor Interest. Pursuant to the Pooling and Servicing
Agreement, the holder of the Exchangeable Transferor Certificate may
define, with respect to any newly issued Series, certain terms including:
(i) its initial invested amount (or method for calculating such amount)
which amount may not be greater than the current principal amount of the
Exchangeable Transferor Certificate; (ii) its certificate rate (or formula
for the determination thereof); (iii) its payment dates and the date from
which interest shall accrue; (iv) its series termination date; and (v) such
other terms as the Transferor may deem appropriate (all such terms, the
"PRINCIPAL TERMS" of such Series). Upon the issuance of an additional
Series of Certificates, none of the Transferor, the Servicer, the Trustee
or the Trust will be required or will intend to obtain the consent of any
Certificateholder of any other Series previously issued by the Trust.
However, as a condition of an Exchange, the holder of the Exchangeable
Transferor Certificate will deliver to the Trustee written confirmation
that the Exchange will not result in the reduction or withdrawal by any
Rating Agency of its rating of any outstanding Series. As used herein,
"RATING AGENCY" means a nationally recognized rating organization selected
by the Bank to rate any Series. The Transferor may offer any Series to the
public or other investors under a Prospectus or other disclosure document
(a "DISCLOSURE DOCUMENT") in offerings pursuant to this Prospectus or in
transactions either registered under the Securities Act of 1933, as amended
(the "SECURITIES ACT") or exempt from registration thereunder directly,
through the Underwriter or one or more other underwriters, purchasers or
placement agents, in fixed-price offerings or in negotiated transactions or
otherwise. Any such series may be issued in fully registered or book-entry
form in minimum denominations by the Transferor. Other Series have been
issued by the Trust and may be issued concurrently herewith. The
Transferor intends to offer, from time to time, additional Series issued by
the Trust.
Unless otherwise specified in the related Prospectus Supplement, the
holder of the Exchangeable Transferor Certificate may perform Exchanges and
define Principal Terms such that each Series issued by the Trust has a
period during which amortization or accumulation of the principal amount
thereof is intended to occur which may have a different length and begin on
a different date than such period for any other Series. Further, one or
more Series may be in their amortization or accumulation periods while
other Series are not. Moreover, each Series may have the benefit of an
Enhancement which is available only to such Series. Under the Pooling and
Servicing Agreement, the Trustee will hold any such form of Enhancement
only on behalf of the Series with respect to which it relates. The holder
of the Exchangeable Transferor Certificate may deliver a different form of
Enhancement agreement with respect to each Series. The holder of the
Exchangeable Transferor Certificate may specify different certificate rates
and monthly servicing fees with respect to each Series (or a particular
Class within such Series). The holder of the Exchangeable Transferor
Certificate will also have the option under the Pooling and Servicing
Agreement to vary between Series the terms upon which a Series (or a
particular Class within such Series) may be repurchased by the Transferor.
Additionally, certain Series may be subordinated to other Series, or
Classes within a Series may have different priorities. There will be no
limit to the number of Exchanges that may be performed under the Pooling
and Servicing Agreement.
Under the Pooling and Servicing Agreement and pursuant to a Series
Supplement, an Exchange may only occur upon the satisfaction of certain
conditions provided in the Pooling and Servicing Agreement. Under the
Pooling and Servicing Agreement, the holder of the Exchangeable Transferor
Certificate may perform an Exchange by notifying the Trustee at least five
days in advance of the date upon which the Exchange is to occur. Under the
Pooling and Servicing Agreement, the notice will state the designation of
any Series to be issued on the date of the Exchange and, with respect to
each such Series: (i) its initial principal amount (or method for
calculating such amount) which amount may not be greater than the current
principal amount of the Exchangeable Transferor Certificate, (ii) its
certificate rate (or method of calculating such rate) and (iii) the
Enhancement Provider, if any, which is expected to provide credit support
with respect to it. On the date of the Exchange, the Pooling and Servicing
Agreement provides that the Trustee will authenticate any such Series only
upon delivery to it of the following, among other things, (i) a Series
Supplement specifying the Principal Terms of such Series, (ii) an opinion
of counsel to the effect that, unless otherwise stated in the related
Series Supplement, the certificates of such Series will be characterized as
indebtedness for Federal income tax purposes under existing law, and that
the issuance of such Series will not have a material adverse effect on the
Federal income tax characterization of any outstanding Series, (iii) if
required by the related Series Supplement, the form of Enhancement, (iv) if
an Enhancement is required by the Supplement, an appropriate Enhancement
agreement with respect thereto, (v) written confirmation from each Rating
Agency that the Exchange will not result in such Rating Agency's reducing
or withdrawing its rating on any then outstanding Series rated by it,
(vi) the existing Exchangeable Transferor Certificate and, if applicable,
the certificates representing the Series to be exchanged, and (vii) an
officer's certificate of the Transferor to the effect that on the date of
the Exchange the Transferor, after giving effect to the Exchange, would not
be required to add Receivables from Additional Accounts pursuant to the
Pooling and Servicing Agreement, and the Transferor Interest averaged
expressed as a percentage of the aggregate amount of Principal Receivables
would be at least equal to a certain specified minimum percentage (the
"MINIMUM TRANSFEROR INTEREST"). Upon satisfaction of such conditions, the
Trustee will cancel the existing Exchangeable Transferor Certificate and
the certificates of the exchanged Series, if applicable, and authenticate
the new Series and a new Exchangeable Transferor Certificate.
REPRESENTATIONS AND WARRANTIES
The Transferor has made and will make certain representations and
warranties to the Trust to the effect that, among other things, (a) as of
the date of issuance of a Series (a "SERIES CLOSING DATE"), the Transferor
was duly incorporated and in good standing and that it has the authority to
consummate the transactions contemplated by the Pooling and Servicing
Agreement and (b) as of the relevant Cut-Off Date for each Series as
defined herein and in the related Prospectus Supplement (the "SERIES CUT-
OFF DATES") (or as of the date of the designation of Additional Accounts),
each Account was an Eligible Account (as defined below). If (i) any of
these representations and warranties proves to have been incorrect in any
material respect when made, and continues to be incorrect for 60 days after
notice to the Transferor by the Trustee or to the Transferor and the
Trustee by the Certificateholders holding more than 50% of the Investor
Interest of the related Series, and (ii) as a result the interests of the
Certificateholders are materially and adversely affected, and continue to
be materially and adversely affected during such period, then the Trustee
or Certificateholders holding more than 50% of the Investor Interest may
give notice to the Transferor (and to the Trustee in the latter instance)
declaring that a Pay Out Event has occurred, thereby commencing the Rapid
Amortization Period. See " Pay Out Events."
The Transferor has made and will make representations and warranties
to the Trust relating to the Receivables to the effect, among other things,
that (a) as of the Series Closing Date of the initial Series of
Certificates, the 1992-1 Series issued by the Trust (the "INITIAL CLOSING
DATE"), each of the Receivables then existing was an Eligible Receivable
(as defined below) and (b) as of the date of creation of any new
Receivable, such Receivable is an Eligible Receivable and the
representation and warranty set forth in clause (b) in the immediately
following paragraph is true and correct with respect to such Receivable. In
the event (i) of a breach of any representation and warranty set forth in
this paragraph, within 60 days, or such longer period as may be agreed to
by the Trustee, of the earlier to occur of the discovery of such breach by
the Transferor or Servicer or receipt by the Transferor of written notice
of such breach given by the Trustee, or, with respect to certain breaches
relating to prior liens, immediately upon the earlier to occur of such
discovery or notice and (ii) that as a result of such breach, the
Receivables in the related Accounts are charged off as uncollectible, the
Trust's rights in, to or under the Receivables or its proceeds are impaired
or the proceeds of such Receivables are not available for any reason to the
Trust free and clear of any lien, the Transferor shall accept reassignment
of each Principal Receivable as to which such breach relates (an
"INELIGIBLE RECEIVABLE") on the terms and conditions set forth below;
provided, however, that no such reassignment shall be required to be made
with respect to such Ineligible Receivable if, on any day within the
applicable period (or such longer period as may be agreed to by the
Trustee), the representations and warranties with respect to such
Ineligible Receivable shall then be true and correct in all material
respects. The Transferor shall accept reassignment of each such Ineligible
Receivable by (i) directing the Servicer to deduct the amount of each such
Ineligible Receivable from the aggregate amount of Principal Receivables
used to calculate the Transferor Interest and (ii) depositing into the
Collection Account an amount equal to the finance charge at the annual
percentage rate applicable to such Ineligible Receivable from the last date
billed through the end of the Monthly Period in which such reassignment
obligation arises. In the event that the exclusion of an Ineligible
Receivable from the calculation of the Transferor Interest would cause the
Transferor Interest to be a negative number, on the date of reassignment of
such Ineligible Receivable the Transferor shall make a deposit in the
Principal Account in immediately available funds in an amount equal to the
amount by which the Transferor Interest would be reduced below zero. Any
such deduction or deposit shall be considered a repayment in full of the
Ineligible Receivable. The obligation of the Transferor to accept
reassignment of any Ineligible Receivable is the sole remedy respecting any
breach of the representations and warranties set forth in this paragraph
with respect to such Receivable available to the Certificateholders or the
Trustee on behalf of Certificateholders.
The Transferor has made representations and warranties to the Trust to
the effect, among other things, that as of the Initial Closing Date (a) the
Pooling and Servicing Agreement constituted a legal, valid and binding
obligation of the Transferor and (b) the transfer of Receivables by it to
the Trust under the Pooling and Servicing Agreement constituted either a
valid transfer and assignment to the Trust of all right, title and interest
of the Transferor in and to the Receivables (other than Receivables in
Additional Accounts), whether then existing or thereafter created and the
proceeds thereof (including amounts in any of the accounts established for
the benefit of Certificateholders) or the grant of a first priority
perfected security interest in such Receivables (except for certain tax
liens) and the proceeds thereof (including amounts in any of the accounts
established for the benefit of Certificateholders), which is effective as
to each such Receivable upon the creation thereof. In the event of a breach
of any of the representations and warranties described in this paragraph,
either the Trustee or the holders of Certificates evidencing undivided
interests in the Trust aggregating more than 50% of the Investor Interest
of all Series outstanding, by written notice to the Transferor (and to the
Trustee and the Servicer if given by the Certificateholders of all Series
outstanding), may direct the Transferor to accept reassignment of the Trust
Portfolio within 60 days of such notice, or within such longer period
specified in such notice. The Transferor will be obligated to accept
reassignment of the Trust Portfolio on a Distribution Date occurring within
such applicable period. Such reassignment will not be required to be made,
however, if at any time during such applicable period, or such longer
period, the representations and warranties shall then be true and correct
in all material respects. The deposit amount for such reassignment will be
equal to the Invested Amount for all Series of Certificates required to be
repurchased on the last day of the Monthly Period preceding the
Distribution Date on which the reassignment is scheduled to be made less
the amount, if any, previously allocated for payment of principal to such
Certificateholders on such Distribution Date, plus an amount equal to all
accrued and unpaid interest on such Certificates at the applicable
certificate rate through such last day of such Monthly Period, less the
amount transferred to the Distribution Account from the Finance Charge
Account in respect of interest on such Certificates. The payment of the
reassignment deposit amount and the transfer of all other amounts deposited
for the preceding month in the Distribution Account will be considered a
payment in full of the Invested Amount for all Series of Certificates
required to be repurchased and will be distributed upon presentation and
surrender of the Certificates for each such Series. If the Trustee or
Certificateholder gives a notice as provided above, the obligation of the
Transferor to make any such deposit will constitute the sole remedy
respecting a breach of the representations and warranties available to the
Trustee or such Certificateholders.
An "ELIGIBLE ACCOUNT" means, as of the Original Cut-Off Date (or, with
respect to Additional Accounts, as of their date of designation for
inclusion in the Trust), each Account owned by the Transferor (a) which was
in existence and maintained with the Transferor, (b) which is payable in
United States dollars, (c) the cardholder of which has provided, as his
most recent billing address, an address located in the United States or its
territories or possessions or any mailing address on any United States
armed forces military base of operations, including APO and FPO addresses,
(d) which has not been classified by the Transferor in its computer files
as being involved in a voluntary or involuntary bankruptcy proceeding, (e)
which has not been identified as an Account with respect to which the
related card has been lost or stolen, (f) which is not sold or pledged to
any other party at the time of its inclusion in the Trust, (g) which does
not have receivables which are sold or pledged to any other party at the
time of their inclusion in the Trust, and (h) which is a VISA or MasterCard
revolving credit card account.
An "ELIGIBLE RECEIVABLE" means each Receivable (a) which has arisen
under an Eligible Account, (b) which was created in compliance, in all
material respects, with all requirements of law applicable to the
Transferor, and pursuant to a credit card agreement which complies in all
material respects with all requirements of law applicable to the
Transferor, (c) with respect to which all consents, licenses or
authorizations of, or registrations with, any governmental authority
required to be obtained or given by the Transferor in connection with the
creation of such Receivable or the execution, delivery, creation and
performance by the Transferor of the related credit card agreement have
been duly obtained or given and are in full force and effect as of the date
of the creation of such Receivable, (d) as to which, at the time of its
inclusion in the Trust, the Transferor or the Trust had good and marketable
title free and clear of all liens and security interests arising under or
through the Transferor (other than certain tax liens for taxes not then due
or which the Transferor is contesting), (e) which is the legal, valid and
binding payment obligation of the cardholder thereof, legally enforceable
against such cardholder in accordance with its terms (with certain
bankruptcy-related exceptions) and (f) which constitutes an "account" under
Article 9 of the UCC as then in effect in the State of Delaware.
It is not required or anticipated that the Trustee will make any
initial or periodic general examination of the Receivables or any records
relating to the Receivables for the purpose of establishing the presence or
absence of defects, compliance with the Transferor's representations and
warranties or for any other purpose. The Servicer, however, will deliver to
the Trustee on or before March 31 of each year an opinion of counsel with
respect to the validity of the security interest of the Trust in and to the
Receivables.
ADDITION OF ACCOUNTS
As described above in "The Receivables," the Transferor will have the
right to designate for the Trust, from time to time, Additional Accounts to
be included as Accounts. In addition, the Transferor will be required to
designate Additional Accounts (i) if the average of the Transferor Interest
for any 30 consecutive days expressed as a percentage of the aggregate
amount of Principal Receivables is less than the Minimum Transferor
Interest, or (ii) if, on the last day of any Monthly Period, the aggregate
amount of Principal Receivables is less than the Minimum Aggregate
Principal Receivables. Receivables from such Additional Accounts shall be
transferred to the Trust on or before the tenth business day following such
30-day period or the last day of any monthly period, as the case may be.
The Transferor will convey to the Trust its interest in all Receivables of
such Additional Accounts, whether such Receivables are then existing or
thereafter created. The total amount of Receivables in the Trust will
fluctuate from day to day, because the amount of new Receivables arising in
the Accounts and the amount of payments collected on existing Receivables
usually differ each day.
Each Additional Account must be an Eligible Account at the time of its
designation. However, Additional Accounts may not be of the same credit
quality as the initial Accounts. Additional Accounts may have been
originated by the Transferor using credit criteria different from those
which were applied by the Transferor to the initial Accounts or may have
been acquired by the Transferor from a third-party financial institution
which may have had different credit criteria.
A conveyance by the Transferor to a Trust of Receivables in Additional
Accounts is subject to the following conditions, among others: (i) the
Transferor shall give the Trustee, each Rating Agency and the Servicer
written notice that such Additional Accounts will be included, which notice
shall specify the approximate aggregate amount of the Receivables to be
transferred; (ii) the Transferor shall have delivered to the Trustee a
written assignment (including an acceptance by the Trustee on behalf of the
Trust for the benefit of the Certificateholders) as provided in the Pooling
and Servicing Agreement relating to such Additional Accounts (the
"ASSIGNMENT") and, within five business days thereafter, the Transferor
shall have delivered to the Trustee a computer file or microfiche list,
dated the date of such Assignment, containing a true and complete list of
such Additional Accounts; (iii) the Transferor shall represent and warrant
that (x) each Additional Account is, as of the date the Account is selected
to have its receivables added to the Trust (the "ADDITION CUT-OFF DATE"),
an Eligible Account, and each Receivable in such Additional Account is, as
of the Addition Cut-Off Date, an Eligible Receivable, (y) no selection
procedures believed by the Transferor to be materially adverse to the
interests of the Certificateholders were utilized in selecting the
Additional Accounts from the available Eligible Accounts from the Bank
Portfolio, and (z) as of the Addition Cut-Off Date, the Transferor is not
insolvent; (iv) the Transferor shall deliver an opinion of counsel with
respect to the security interest of the Trust in the Receivables in the
Additional Accounts transferred to the Trust; and (v) the Trustee shall
have received notice that the Rating Agency Condition has been satisfied
with respect to such addition.
REMOVAL OF ACCOUNTS
Subject to the conditions set forth in the next succeeding sentence,
the Transferor may, but shall not be obligated to, designate from time to
time, all Receivables from certain Accounts to be Removed Accounts, all
Receivables in which shall be subject to deletion and removal from the
Trust; provided, however, that the Transferor shall not make more than one
such designation in any Monthly Period. The Transferor will be permitted to
designate and require reassignment to it of the Receivables from Removed
Accounts only upon satisfaction of the following conditions: (i) the
removal of any Receivables of any Removed Accounts shall not, in the
reasonable belief of the Transferor, cause a Pay Out Event for any Series
to occur, cause the Transferor Interest expressed as a percentage of the
aggregate amount of Principal Receivables to be less than the Minimum
Transferor Interest on such date of removal, or result in the failure to
make any payment specified in the related Series Supplement with respect to
any Series; (ii) the Transferor shall have delivered to the Trustee for
execution a written assignment and, within five business days thereafter, a
computer file or microfiche list containing a true and complete list of all
Removed Accounts identified by account number and the aggregate amount of
the Receivables in such Removed Accounts; (iii) not more than 15% of the
Trust Portfolio is more than 34 days delinquent; (iv) the Transferor shall
represent and warrant that no selection procedures believed by the
Transferor to be materially adverse to the interests of the
Certificateholders were utilized in selecting the Removed Accounts to be
removed from the Trust; (v) the Rating Agency shall have received notice of
such proposed removal of Accounts and the Rating Agency Condition shall
have been satisfied with respect to such proposed removal; (vi) the
Principal Receivables of the Removed Accounts shall not equal or exceed 5%
of the aggregate amount of the Principal Receivables in the Trust at such
time; provided, that if any Series has been paid in full, the Principal
Receivables in such Removed Accounts may equal the initial invested amount
of such Series; and (vii) the Transferor shall have delivered to the
Trustee an officer's certificate confirming the items set forth in clauses
(i) through (vi) above.
COLLECTION AND OTHER SERVICING PROCEDURES
Pursuant to the Pooling and Servicing Agreement, the Servicer will be
responsible for servicing and administering the Receivables in accordance
with the Servicer's policies and procedures for servicing credit card
receivables comparable to the Receivables. The Servicer will be required to
maintain fidelity bond coverage insuring against losses through wrongdoing
of its officers and employees who are involved in the servicing of credit
card receivables covering such actions and in such amounts as the Servicer
believes to be reasonable from time to time.
TRUST ACCOUNTS
The Trustee has established and maintains in the name of the Trust two
separate accounts in a segregated trust account (which need not be a
deposit account), a "FINANCE CHARGE ACCOUNT" and a "PRINCIPAL ACCOUNT" for
the benefit of the Certificateholders of each Series. The Trustee has also
established a "DISTRIBUTION ACCOUNT" (a non-interest bearing segregated
demand deposit account established with a "QUALIFIED INSTITUTION" other
than the Transferor). The Servicer has established and maintains, in the
name of the Trust, for the benefit of Certificateholders of all Series, a
"COLLECTION ACCOUNT," which is a non-interest bearing segregated account
established and maintained with the Servicer or with a Qualified
Institution, defined as a depository institution, which may include the
Trustee, organized under the laws of the United States or any one of the
states thereof, which at all times has a certificate of deposit rating of
P-1 by Moody's Investors Service, Inc. ("MOODY'S") and of A-1+ by Standard
& Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.
("STANDARD & POOR'S") or long-term unsecured debt obligation (other than
such obligation the rating of which is based on collateral or on the credit
of a person other than such institution or trust company) rating of Aa3 by
Moody's and AA- by Standard & Poor's and deposit insurance provided by
either the Bank Insurance Fund ("BIF") or the Savings Association Insurance
Fund ("SAIF"), each administered by the FDIC, or a depository institution,
which may include the Trustee, which is acceptable to the Rating Agency.
Funds in the Principal Account and the Finance Charge Account will be
invested, at the direction of the Servicer, in (i) obligations fully
guaranteed by the United States of America, (ii) demand deposits, time
deposits or certificates of deposit of depository institutions or trust
companies, the certificates of deposit of which have the highest rating
from Moody's and Standard & Poor's, (iii) commercial paper having, at the
time of the Trust's investment, a rating in the highest rating category
from Moody's and Standard & Poor's, (iv) bankers acceptances issued by any
depository institution or trust company described in clause (ii) above, (v)
money market funds which have the highest rating from, or have otherwise
been approved in writing by, Moody's and Standard & Poor's, (vi) certain
open end diversified investment companies, and (vii) any other investment
if the Rating Agency Condition shall have been satisfied with respect to
such investment (such investments, "PERMITTED INVESTMENTS"). Any earnings
(net of losses and investment expenses) on funds in the Finance Charge
Account or the Principal Account will be paid to the Transferor. The
Servicer has the revocable power to withdraw funds from the Collection
Account and to instruct the Trustee to make withdrawals and payments from
the Finance Charge Account and the Principal Account for the purpose of
carrying out the Servicer's duties under the Pooling and Servicing
Agreement. The Paying Agent specified in the Pooling and Servicing
Agreement has the revocable power to withdraw funds from the Distribution
Account for the purpose of making distributions to the Certificateholders.
DISCOUNT RECEIVABLES
The Pooling and Servicing Agreement provides that 1.3% (the "YIELD
FACTOR") of the amount of Receivables consisting of amounts charged by
cardholders for goods and services and cash advances (the "DISCOUNT
RECEIVABLES") will be treated as Finance Charge Receivables. On the date of
processing of any collections, the product of the Yield Factor and
collections of Receivables consisting of amounts charged by cardholders for
goods and services and cash advances on such day which otherwise would be
Principal Receivables will be deemed "DISCOUNT RECEIVABLE COLLECTIONS." An
amount equal to the product of (i) the investor percentage with respect to
Finance Charge Receivables for each Series of Certificates issued and
outstanding and (ii) the amount of such Discount Receivable Collections
will be deposited by the Servicer into the Collection Account and an amount
equal to the product of (i) the Transferor Percentage and (ii) the amount
of the Discount Receivable Collections will be paid to the holder of the
Exchangeable Transferor Certificate. The former amount deposited into the
Collection Account will be applied as provided below regarding payments
with respect to Finance Charge Receivables. The Transferor may at any time
increase the Yield Factor to a fixed percentage up to 4%; provided that the
Transferor must provide 30 days' prior written notice to the Servicer, the
Trustee, any provider of Enhancement and the Rating Agency of any such
designation, and such designation will become effective on the date
specified therein only if (i) in the reasonable belief of the Transferor
such designation would not cause a Pay Out Event to occur or an event
which, with notice or the lapse of time or both, would constitute a Pay Out
Event and (ii) the Rating Agency Condition is satisfied with respect to
such designation.
INVESTOR PERCENTAGE AND TRANSFEROR PERCENTAGE
The Servicer will allocate between the Invested Amount of each Series
issued by the Trust (and between each Class of each Series) and the
Transferor Interest, and, in certain circumstances, the interest of certain
Enhancement Providers, all amounts collected on Finance Charge Receivables,
all amounts collected on Principal Receivables and all Receivables in
Defaulted Accounts. The Servicer will make each allocation by reference to
the applicable Investor Percentage of each Series and the Transferor
Percentage, and, in certain circumstances, the percentage interest of
certain Enhancement Providers (the "ENHANCEMENT PERCENTAGE") with respect
to such Series. The Prospectus Supplement relating to a Series will specify
the Investor Percentage and, if applicable, the Enhancement Percentage (or
the method of calculating such percentage) with respect to the allocations
of collections of Principal Receivables, Finance Charge Receivables and
Receivables in Defaulted Accounts during the Revolving Period and any
Amortization Period, as applicable. In addition, for each Series of
Certificates having more than one Class, the related Prospectus Supplement
will specify the method of allocation between each Class.
The Transferor Percentage will, in all cases, be equal to 100% minus
the aggregate Investor Percentages and, if applicable, the Enhancement
Percentages, for all Series then outstanding.
APPLICATION OF COLLECTIONS
Allocations. Except as otherwise provided below or in the related
Prospectus Supplement, the Servicer will deposit into the Collection
Account, no later than the second business day following the date of
processing, any payment collected by the Servicer on the Receivables;
provided, however, that the Servicer need not deposit amounts to be paid to
the holder of the Exchangeable Transferor Certificate and certain amounts
allocated to Certificateholders of a Series, as specified in the related
Series Supplement, into the Collection Account, and provided, further,
that for as long as the Bank remains the Servicer under the Pooling and
Servicing Agreement, and (a)(i) the Servicer provides to the Trustee a
letter of credit covering collection risk of the Servicer acceptable to the
Rating Agency and (ii) the Transferor shall not have received a notice from
the Rating Agency that such letter of credit would result in the lowering
of such Rating Agency's then existing rating of any Series of Certificates
then outstanding, or (b) the Servicer has and maintains a certificate of
deposit rating of P-1 by Moody's and of A-1 by Standard & Poor's and
deposit insurance provided by either BIF or SAIF, then the Servicer may
make such deposits and payments on the business day immediately prior to
the Distribution Date (the "TRANSFER DATE") in an amount equal to the net
amount of such deposits and payments which would have been made had the
conditions of this proviso not applied.
Any amounts collected in respect of Principal Receivables not paid to
the Transferor because the Transferor Interest expressed as a percentage of
the aggregate amount of Principal Receivables has been reduced below the
Minimum Transferor Interest ("UNALLOCATED PRINCIPAL COLLECTIONS"), together
with any adjustment payments, as described below, will be held in the
Collection Account and only paid to the Transferor if and to the extent
that such percentage with respect to the Transferor Interest is greater
than the Minimum Transferor Interest. Unallocated Principal Collections
will be applied to principal shortfalls for each Series on the applicable
Transfer Date. If principal shortfalls for all Series exceed Unallocated
Principal Collections for any Monthly Period, Unallocated Principal
Collections will be allocated pro rata among the applicable Series based on
the relative amounts of principal shortfalls.
FUNDING PERIOD
For any Series of Certificates, the related Prospectus Supplement may
specify that for a period beginning on the Closing Date and ending on a
specified date before the commencement of an Amortization Period with
respect to such Series (the "FUNDING PERIOD"), the aggregate amount of
Principal Receivables in the Trust allocable to such Series may be less
than the aggregate principal amount of the Certificates of such Series and
that the amount of such deficiency (the "PRE-FUNDING AMOUNT") will be held
in a trust account established with the Trustee for the benefit of the
Certificateholders of such Series (the "PRE-FUNDING ACCOUNT") pending the
transfer of additional Receivables to the Trust or pending the reduction of
the Invested Amounts of other Series. The related Prospectus Supplement
will specify the initial Invested Amount with respect to such Series, the
aggregate principal amount of such Series (the "FULL INVESTED AMOUNT") and
the date by which the Invested Amount is expected to equal the Full
Invested Amount. The Invested Amount will increase as Receivables are
delivered to the Trust or as the Invested Amounts of other Series are
reduced. The Invested Amount may also decrease due to Investor Charge-Offs
as provided in the related Prospectus Supplement.
During the Funding Period, funds on deposit in the Pre-Funding Account
for a Series of Certificates will be withdrawn and paid to the Transferor
to the extent of any increases in the Invested Amount. In the event that
the Invested Amount does not for any reason equal the Full Invested Amount
by the end of the Funding Period, any amount remaining in the Pre-Funding
Account and any additional amounts specified in the related Prospectus
Supplement will be payable to the Certificateholders of such Series in the
manner and at such time as set forth in the related Prospectus Supplement.
If so specified in the related Prospectus Supplement, monies in the
Pre-Funding Account will be invested by the Trustee in Permitted
Investments or will be subject to a guaranteed rate or investment agreement
or other similar arrangement, and, in connection with each Distribution
Date during the Funding Period, investment earnings on funds in the
Pre-Funding Account during the related Monthly Period will be withdrawn
from the Pre-Funding Account and deposited, together with any applicable
payment under a guaranteed rate or investment agreement or other similar
arrangement, into the Collection Account for distribution in respect of
interest on the Certificates of the related Series in the manner specified
in the related Prospectus Supplement.
DEFAULTED RECEIVABLES; REBATES AND FRAUDULENT CHARGES
For each Series of Certificates, on the first business day on or
before the eighth calendar day prior to each Distribution Date (the
"DETERMINATION DATE"), the Servicer will calculate the Investor Default
Amount for the preceding Monthly Period. Receivables in any Account will
be charged off as uncollectible in accordance with the Servicer's customary
and usual policies and procedures for servicing its own comparable credit
card accounts (such an Account, a "DEFAULTED ACCOUNT"). The term "DEFAULT
AMOUNT" means, for any Monthly Period, an amount (which shall not be less
than zero) equal to (a) the aggregate amount of Principal Receivables
(other than Ineligible Receivables) in Defaulted Accounts on the day such
Account became a Defaulted Account for each day in such Monthly Period
minus (b) the aggregate amount of Recoveries received in such Monthly
Period. A portion of the Default Amount (the "INVESTOR DEFAULT AMOUNT")
will be allocated to the Certificateholders for each Distribution Date in
an amount equal to the product of the Investor Percentage for the relevant
Series applicable during the related Monthly Period and the Default Amount
for such related Monthly Period. In the case of a Series of Certificates
having more than one Class, the Investor Default Amount will be allocated
among the Classes in the manner described in the related Prospectus
Supplement. If so provided in the related Prospectus Supplement, an amount
equal to the Investor Default Amount for any Monthly Period may be paid
from other amounts, including from Enhancement, and applied to pay
principal to Certificateholders or the holder of the Exchangeable
Transferor Certificate, as appropriate. In the case of a Series of
Certificates having one or more Classes of Subordinated Certificates, the
related Prospectus Supplement may provide that all or a portion of amounts
otherwise allocable to such Subordinated Certificates may be paid to the
holders of the Senior Certificates to make up any Investor Default Amount
allocable to such holders of the Senior Certificates.
If the Servicer adjusts the amount of any Principal Receivable because
of transactions occurring in respect of a rebate or refund to a cardholder,
or because such Principal Receivable was created in respect of merchandise
which was refused or returned by a cardholder, then the amount of the
Transferor Interest in the Trust will be reduced, on a net basis, by the
amount of the adjustment. In addition, the Transferor Interest in the Trust
will be reduced, on a net basis, as a result of transactions in respect of
any Principal Receivable which was discovered as having been created
through a fraudulent or counterfeit charge.
INVESTOR CHARGE-OFFS
With respect to each Series of Certificates, if the amount payable on
a Distribution Date or other specified date in respect of interest on the
Certificates, the Investor Servicing Fee (unless otherwise specified in the
related Prospectus Supplement), the Investor Default Amount and other
required fees exceeds the amount on deposit in the Collection Account
available therefor, available Enhancement amounts, if any, and amounts
available from other specified sources, then the Invested Amount with
respect to such Series will be reduced by the amount of such excess, but
not more than the Investor Default Amount (an "INVESTOR CHARGE-OFF").
Investor Charge-Offs will be reimbursed on any Distribution Date to the
extent amounts on deposit in the Collection Account and otherwise available
therefor exceed such interest, fees and any aggregate Investor Default
Amount payable on such date. Such reimbursement of Investor Charge-Offs
will result in an increase in the Invested Amount with respect to such
Series. In the case of a Series of Certificates having more than one Class,
the related Prospectus Supplement will describe the manner and priority of
allocating Investor Charge-Offs and reimbursements thereof among the
Invested Amounts of the Classes.
DEFEASANCE
If so specified in the related Prospectus Supplement relating to a
Series, the Transferor may terminate its substantive obligations in respect
of such Series or the Trust by depositing with the Trustee, from amounts
representing, or acquired with, collections of Receivables, money or
Permitted Investments sufficient to make all remaining scheduled interest
and principal payments on such Series or all outstanding Series of
Certificates of the Trust, as the case may be, on the dates scheduled for
such payments and to pay all amounts owing to any Enhancement Provider with
respect to such Series or all outstanding Series, as the case may be, if
such action would not result in a Pay Out Event for any Series. Prior to
its first exercise of its right to substitute money or Permitted
Investments for Receivables, the Transferor will deliver to the Trustee (i)
an opinion of counsel to the effect that such deposit and termination of
obligations will not result in the Trust being required to register as an
"investment company" within the meaning of the Investment Company Act of
1940, as amended and (ii) an opinion of counsel to the effect that, for
Federal income tax purposes, (a) such action will not adversely affect the
tax characterization as debt of Certificates of such Series or Class that
were characterized as debt at the time of their issuance, (b) following
such action the Trust will not be deemed to be an association (or publicly
traded partnership) taxable as a corporation and (c) such action will not
cause or constitute an event in which gain or loss would be recognized by
any Certificateholder or the Trust (an opinion of counsel with respect to
any matter to the effect referred to in clause (ii) with respect to any
action is referred to herein as a "TAX OPINION").
FINAL PAYMENT OF PRINCIPAL; TERMINATION
With respect to each Series, the Certificates will be subject to
optional repurchase by the Transferor on any Distribution Date after the
Invested Amount of such Series is reduced to an amount less than or equal
to the percentage of the initial outstanding principal amount of the
Certificates specified in the related Prospectus Supplement, if certain
conditions set forth in the Pooling and Servicing Agreement are met.
Unless otherwise specified in the related Prospectus Supplement, the
repurchase price will be equal to the Invested Amount of such Series (less
the amount, if any, on deposit in any Principal Funding Account with
respect to such Series), plus accrued and unpaid interest on the
Certificates.
The Certificates of each Series will be retired on the day following
the Distribution Date on which the final payment of principal is scheduled
to be made to the Certificateholders, whether as a result of optional
reassignment to the Transferor or otherwise. Each Prospectus Supplement
will specify the final date on which principal and interest with respect to
the related Series of Certificates will be scheduled to be distributed (the
"STATED SERIES TERMINATION DATE"); provided, however, that the Certificates
may be subject to prior termination as provided above. If the Invested
Amount is greater than zero on the Stated Series Termination Date, the
Trustee will be required to sell or cause to be sold certain Receivables
allocable to such Series in the manner provided in the Pooling and
Servicing Agreement and Series Supplement and to pay the net proceeds of
such sale and any collections on the Receivables, up to an amount equal to
the sum of the Invested Amount plus accrued interest due on the
Certificates and any other amounts specified in the related Prospectus
Supplement, to the Certificateholders of such Series on such Stated Series
Termination Date as final payment of the Certificates.
Unless the Servicer and the holder of the Exchangeable Transferor
Certificate instruct the Trustee otherwise, the Trust will terminate on the
earlier of (a) the day after the Distribution Date with respect to any
Series following the date on which funds shall have been deposited in the
Distribution Account for the payment to Certificateholders of each
Series outstanding sufficient to pay in full the aggregate Investor
Interest of all Series outstanding plus accrued interest thereon at the
applicable certificate rates through the end of the related Monthly Period,
or (b) August 1, 2032. Upon the termination of the Trust and the surrender
of the Exchangeable Transferor Certificate, the Trustee shall convey to the
holder of the Exchangeable Transferor Certificate all right, title and
interest of the Trust in and to the Receivables and other funds of the
Trust (other than funds on deposit in the Distribution Account and other
similar bank accounts of the Trust with respect to other Series).
PAY OUT EVENTS
Unless otherwise specified in the related Prospectus Supplement, as
described above, the Revolving Period will continue through the date
specified in the related Prospectus Supplement unless a Pay Out Event
occurs prior to such date. A "PAY OUT EVENT" occurs with respect to all
Series issued by the Trust upon the occurrence of either of the following
events:
(a) certain events of insolvency or receivership relating to the
Transferor; or
(b) the Trust becomes subject to regulation as an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
In addition, a Pay Out Event may occur with respect to any Series upon
the occurrence of any other event specified in the related Prospectus
Supplement. On the date on which a Pay Out Event is deemed to have
occurred, the Rapid Amortization Period will commence. If, because of the
occurrence of a Pay Out Event, the Rapid Amortization Period begins earlier
than the scheduled commencement of a Controlled Amortization Period or an
Accumulation Period or prior to a Scheduled Payment Date,
Certificateholders will begin receiving distributions of principal earlier
than they otherwise would have, which may shorten the average life of the
Certificates.
If the only Pay Out Event to occur is either the insolvency of the
Transferor or the appointment of a receiver or conservator for the
Transferor, the receiver or conservator for the Transferor may have the
power to delay or prevent commencement of the Rapid Amortization Period.
In addition to the consequences of a Pay Out Event discussed above,
unless otherwise specified in the related Prospectus Supplement, if
pursuant to certain provisions of Federal law, the Transferor voluntarily
enters liquidation or a receiver is appointed for the Transferor, on the
day of such event the Transferor will immediately cease to transfer
Principal Receivables to the Trust and promptly give notice to the Trustee
of such event. Within 15 days, the Trustee will publish a notice of the
liquidation or the appointment stating that the Trustee intends to sell,
dispose of, or otherwise liquidate the Receivables in a commercially
reasonable manner. Unless otherwise instructed within a specified period by
Certificateholders representing undivided interests aggregating more than
50% of the Invested Amount of each such Series (or if any Series has more
than one Class, of each Class, and any other person specified in the
Pooling and Servicing Agreement or a Series Supplement) issued and
outstanding, the Trustee will sell, dispose of, or otherwise liquidate the
portion of the Receivables allocated to the Certificates and the
Receivables allocable to other Series with respect to which all outstanding
Classes did not vote to continue the Trust in accordance with the Pooling
and Servicing Agreement in a commercially reasonable manner and on
commercially reasonable terms. The proceeds from the sale, disposition or
liquidation of the Receivables will be treated as collections of the
Receivables and applied with respect to such Series as specified above in
"--Application of Collections" and in the related Prospectus Supplement.
If the only Pay Out Event to occur is either the insolvency of the
Transferor or the appointment of a conservator or receiver for the
Transferor, the conservator or receiver may have the power to prevent the
early sale, liquidation or disposition of the Receivables and the
commencement of the Rapid Amortization Period. In addition, a conservator
or receiver may have the power to cause the early sale of the Receivables
and the early retirement of the Certificates. See "Certain Legal Aspects
of the Receivables Certain Matters Relating to Receivership."
CERTAIN MATTERS REGARDING THE TRANSFEROR AND THE SERVICER
First USA Bank, N.A. will service the Receivables (in such capacity,
the "SERVICER"). The principal executive office of the Bank is located at
201 North Walnut Street, Wilmington, Delaware 19801, telephone number (302)
594-4000. The Servicer will receive a fee as servicing compensation from
the Trust in respect of each Series in the amounts and at the times
specified in the related Prospectus Supplement (the "INVESTOR SERVICING
FEE"). The Servicing Fee may be payable from Finance Charge Receivables,
Interchange or other amounts as specified in the related Prospectus
Supplement.
The Servicer may not resign from its obligations and duties under the
Pooling and Servicing Agreement, except upon determination that performance
of its duties is no longer permissible under applicable law. No such
resignation will become effective until the Trustee or a successor to the
Servicer has assumed the Servicer's responsibilities and obligations under
the Pooling and Servicing Agreement. The Bank, as initial Servicer, has
delegated some of its servicing duties to FDR; however, such delegation
does not relieve it of its obligation to perform such duties in accordance
with the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement provides that the Servicer will
indemnify the Trust and Trustee from and against any reasonable loss,
liability, expense, damage or injury suffered or sustained by reason of any
acts or omissions or alleged acts or omissions of the Servicer with respect
to the activities of the Trust or the Trustee; provided, however, that the
Servicer shall not indemnify (a) the Trustee for liabilities imposed by
reason of fraud, negligence, or willful misconduct by the Trustee in the
performance of its duties under the Pooling and Servicing Agreement, (b)
the Trust, the Certificateholders or the Certificate Owners for liabilities
arising from actions taken by the Trustee at the request of
Certificateholders, (c) the Trust, the Certificateholders or the
Certificate Owners for any losses, claims, damages or liabilities incurred
by any of them in their capacities as investors, including without
limitation, losses incurred as a result of defaulted Receivables or
Receivables which are written off as uncollectible or (d) the Trust, the
Certificateholders or the Certificate Owners for any liabilities, costs or
expenses of the Trust, the Certificateholders or the Certificate Owners
arising under any tax law, including without limitation, any Federal, state
or local income or franchise tax or any other tax imposed on or measured by
income (or any interest or penalties with respect thereto or arising from a
failure to comply therewith) required to be paid by the Trust, the
Certificateholders or the Certificate Owners in connection with the Pooling
and Servicing Agreement to any taxing authority.
In addition, the Pooling and Servicing Agreement provides that,
subject to certain exceptions, the Transferor will indemnify the Trust and
the Trustee from and against any reasonable loss, liability, expense,
damage or injury arising out of or based upon the arrangement created by
the Pooling and Servicing Agreement as though the Pooling and Servicing
Agreement created a partnership under the New York Uniform Partnership Act
in which the Transferor is a general partner.
The Pooling and Servicing Agreement provides that neither the
Transferor nor the Servicer nor any of their respective directors,
officers, employees or agents will be under any other liability to the
Trust, the Certificateholders or any other person for any action taken, or
for refraining from taking any action, in good faith pursuant to the
Pooling and Servicing Agreement. Neither the Transferor, the Servicer, nor
any of their respective directors, officers, employees or agents will be
protected against any liability which would otherwise be imposed by reason
of willful misfeasance, bad faith or gross negligence of the Transferor,
the Servicer or any such person in the performance of its duties or by
reason of reckless disregard of obligations and duties thereunder. In
addition, the Pooling and Servicing Agreement provides that the Servicer is
not under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its servicing responsibilities under the Pooling
and Servicing Agreement and which in its opinion may expose it to any
expense or liability.
The Pooling and Servicing Agreement provides that, in addition to
Exchanges, the Transferor may transfer its interest in a portion of the
Exchangeable Transferor Certificate, provided that prior to any such
transfer (a) the Rating Agency Condition is satisfied with respect to such
transfer and (b) the Trustee receives a written opinion of counsel
confirming that such transfer would not adversely affect the treatment of
the Certificates for each outstanding Series as debt for Federal income tax
purposes.
Any person into which, in accordance with the Pooling and Servicing
Agreement, the Transferor or the Servicer may be merged or consolidated or
any person resulting from any merger or consolidation to which the
Transferor or the Servicer is a party, or any person succeeding to the
business of the Transferor or the Servicer, upon execution of a supplement
to the Pooling and Servicing Agreement and delivery of an opinion of
counsel with respect to the compliance of the transaction with the
applicable provisions of the Pooling and Servicing Agreement, will be the
successor to the Transferor or the Servicer, as the case may be, under the
Pooling and Servicing Agreement.
SERVICER DEFAULT
In the event of any Servicer Default (as defined below), either the
Trustee or Certificateholders representing undivided interests aggregating
more than 50% of the aggregate investor interests for all outstanding
Series of Certificates, by written notice to the Servicer (and to the
Trustee if given by the Certificateholders), may terminate all of the
rights and obligations of the Servicer as servicer under the Pooling and
Servicing Agreement and in and to the Receivables and the proceeds thereof
and the Trustee may appoint a new Servicer (a "SERVICE TRANSFER"). The
rights and interest of the Transferor under the Pooling and Servicing
Agreement and in the Transferor Interest will not be affected by such
termination. The Trustee shall as promptly as possible appoint a successor
Servicer. If no such Servicer has been appointed and has accepted such
appointment by the time the Servicer ceases to act as Servicer, all
authority, power and obligations of the Servicer under the Pooling and
Servicing Agreement shall pass to and be vested in the Trustee. If the
Trustee is unable to obtain any bids from eligible servicers and the
Servicer delivers an officer's certificate to the effect that it cannot in
good faith cure the Servicer Default which gave rise to a transfer of
servicing, and if the Trustee is legally unable to act as successor
Servicer, then the Trustee shall give the Transferor the right of first
refusal to purchase the Receivables on terms equivalent to the best
purchase offer as determined by the Trustee.
A "SERVICER DEFAULT" refers to any of the following events:
(a) failure by the Servicer to make any payment, transfer or
deposit, or to give instructions to the Trustee to make certain
payments, transfers or deposits, on the date the Servicer is required
to do so under the Pooling and Servicing Agreement or any Series
Supplement (or within the applicable grace period, which shall not
exceed five (5) business days);
(b) failure on the part of the Servicer duly to observe or perform
in any respect any other covenants or agreements of the Servicer which
has a material adverse effect on the Certificateholders of any Series
issued and outstanding and which continues unremedied for a period of
60 days after written notice and continues to have a material adverse
effect on the Certificateholders of any Series, including the
Certificates (which determination shall be made without regard to
whether funds are available from any Enhancement), then outstanding
for such period; or the delegation by the Servicer of its duties under
the Pooling and Servicing Agreement, except as specifically permitted
thereunder;
(c) any representation, warranty or certification made by the
Servicer in the Pooling and Servicing Agreement, or in any certificate
delivered pursuant to the Pooling and Servicing Agreement, proves to
have been incorrect when made which has a material adverse effect on
the Certificateholders of any Series, including the Certificates
(which determination shall be made without regard to whether funds are
available from any Enhancement), then outstanding, and which continues
to be incorrect in any material respect for a period of 60 days after
written notice and continues to have a material adverse effect on such
Certificateholders for such period; or
(d) the occurrence of certain events of bankruptcy, insolvency or
receivership of the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in clause (a) above for a period of ten (10) business days, or
referred to under clause (b) or (c) for a period of 60 business days, shall
not constitute a Servicer Default if such delay or failure could not be
prevented by the exercise of reasonable diligence by the Servicer and such
delay or failure was caused by an act of God or other similar occurrence.
Upon the occurrence of any such event, the Servicer shall not be relieved
from using its best efforts to perform its obligations in a timely manner
in accordance with the terms of the Pooling and Servicing Agreement, and
the Servicer shall provide the Trustee, any Enhancement Provider, the
Transferor and the holders of Certificates of all Series outstanding prompt
notice of such failure or delay by it, together with a description of the
cause of such failure or delay and its efforts to perform its obligations.
In the event of a Servicer Default, if a conservator or receiver is
appointed for the Servicer and no Servicer Default other than such
conservatorship or receivership or the insolvency of the Servicer exists,
the conservator or receiver may have the power to prevent either the
Trustee or the majority of the Certificateholders from effecting a Service
Transfer.
REPORTS TO CERTIFICATEHOLDERS
Unless otherwise specified in the related Prospectus Supplement, for
each Series of Certificates, on each Distribution Date, or as soon
thereafter as is practicable, as specified in the related Prospectus
Supplement, the Trustee or any Paying Agent appointed by the Trustee will
forward to each Certificateholder of record a statement prepared by the
Servicer setting forth certain information with respect to the Trust and
the Certificates of each Series, including, among other things: (a) the
total amount distributed, (b) the amount of distribution on such
Distribution Date allocable to principal of the Certificates, (c) the
amount of such distribution allocable to interest on the Certificates, (d)
the amount of collections of Principal Receivables processed during the
preceding month or months since the last Distribution Date and allocated in
respect of the Certificates, (e) the amount of collections of Finance
Charge Receivables processed during the related Monthly Period and
allocated in respect of the Certificates, (f) the Investor Percentage for
the related Monthly Period, (g) the aggregate outstanding balance of
Accounts which are 35 or more days contractually delinquent, by class of
delinquency, as of the end of the last day of the related Monthly Period,
(h) the applicable Investor Default Amount for the related Monthly Period ,
(i) the applicable Investor Charge-Offs for the related Monthly Period and
the amount of Investor Charge-Offs reimbursed on the Transfer Date
immediately preceding the Distribution Date, (j) the amount of the Investor
Servicing Fee for the related Monthly Period, (k) the Invested Amount at
the close of business on the last day of the related Monthly Period, and
(l) the amount available, if any, pursuant to the applicable Enhancement.
On or before January 31 of each calendar year or such other date as
specified in the related Prospectus Supplement, the Trustee or any Paying
Agent appointed by the Trustee will furnish to each person who at any time
during the preceding calendar year was a Certificateholder of record, a
statement prepared by the Servicer containing the information required to
be contained in the regular monthly report to Certificateholders, as set
forth in clauses (a), (b) and (c) above aggregated for such calendar year
or the applicable portion thereof during which such person was a
Certificateholder, together with such other customary information
(consistent with the treatment of the Certificates as debt) as the Trustee
or the Servicer deems necessary or desirable to enable the
Certificateholders to prepare their United States tax returns.
REPORTS; NOTICES
With respect to any Series which is listed on the Luxembourg Stock
Exchange, the Trustee will publish or will cause to be published following
each Distribution Date in a daily newspaper in Luxembourg (expected to be
the Luxemburger Wort) a notice to the effect that the information set
forth in the foregoing paragraph will be available for review at the main
office of the listing agent of the Trust in Luxembourg, Luxembourg.
In addition, with respect to such Series, notices to
Certificateholders will be given by publication in a daily newspaper in
Luxembourg, which is expected to be the Luxemburger Wort. In the event
that Definitive Certificates are issued, notices to Certificateholders will
also be given by mail to the addresses of such holders as they appear in
the Certificate Register referred to in the Pooling and Servicing
Agreement.
EVIDENCE AS TO COMPLIANCE
The Pooling and Servicing Agreement provides that the Servicer will
cause a firm of independent public accountants to furnish to the Trustee on
an annual basis a report to the effect that such firm has reviewed the
Servicer's computer reports regarding the Receivables, including
information regarding delinquencies, charge-offs and yield and that such
reports are in agreement with monthly statements prepared by the Servicer
and distributed to the Trustee and the Certificateholders, except as set
forth in such report.
The Pooling and Servicing Agreement provides that the Servicer will
cause a firm of independent public accountants to furnish to the Trustee on
an annual basis a report to the effect that such firm has made a study and
evaluation in accordance with generally accepted auditing standards of the
Servicer's internal accounting controls relative to the servicing of the
Accounts and that, on the basis of such examination, such firm is of the
opinion (assuming the accuracy of reports by the Servicer's third party
agents) that the system of internal controls in effect for the reporting
period relating to servicing procedures performed by the Servicer, taken as
a whole, provided reasonable assurance that the internal control system was
sufficient for the prevention and detection of errors and irregularities
and that such servicing was conducted in compliance with such provisions of
the Pooling and Servicing Agreement with which such accountants can
reasonably be expected to possess adequate knowledge of the subject matter,
which are susceptible of positive assurance by such accountants and for
which their professional competence is relevant, except for such exceptions
as such firm shall believe to be immaterial and such other exceptions as
shall be set forth in such statement.
The Pooling and Servicing Agreement also provides for delivery to the
Trustee, on or before a certain date each year, of a certificate signed by
an officer of the Servicer stating that the Servicer has fulfilled its
obligations under the Pooling and Servicing Agreement throughout the
preceding twelve months or, if there has been a default in the fulfillment
of any such obligations, describing each such default.
AMENDMENTS
The Pooling and Servicing Agreement and any Series 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) the Rating Agency Condition will be satisfied
with respect to such amendment. Such an amendment may be entered into in
order to comply with or obtain the benefits of certain current and future
tax legislation (such as the legislation creating FASITs) as described
below under "Certain U.S. Federal Income Tax Consequences Recent
Legislation" or to modify the provisions of the Pooling and Servicing
Agreement relating to the removal of Accounts to be consistent with
accounting requirements for off balance sheet treatment for receivables in
the Trust.
The Pooling and Servicing Agreement and the 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 Pooling and Servicing
Agreement or the Series 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 Pooling and Servicing Agreement, the Trustee will furnish
written notice of the substance of such amendment to each
Certificateholder. Any Series Supplement and any amendments regarding the
addition or removal of Receivables from the Trust will not be considered
an amendment requiring Certificateholder consent under the provisions of
the Pooling and Servicing Agreement and any Series Supplement.
LIST OF CERTIFICATEHOLDERS
With respect to each Series of Certificates, upon written request of
Certificateholders of record representing undivided interests in the Trust
aggregating not less than 10% (or such other percentage specified in the
related Prospectus Supplement) of the Invested Amount of a Series, the
Trustee after having been adequately indemnified by such Certificateholders
for its costs and expenses, and having given the Servicer notice that such
request has been made, will afford such Certificateholders access during
business hours to the current list of Certificateholders of the Trust for
purposes of communicating with other Certificateholders with respect to
their rights under the Pooling and Servicing Agreement. See " Book-Entry
Registration" and " Definitive Certificates" above.
THE TRUSTEE
The Bank of New York (Delaware) is currently the Trustee under the
Pooling and Servicing Agreement. The Transferor, the Servicer and their
respective affiliates may from time to time enter into normal banking and
trustee relationships with the Trustee and its affiliates. The Trustee, the
Transferor, the Servicer and any of their respective affiliates may hold
Certificates in their own names. In addition, for purposes of meeting the
legal requirements of certain local jurisdictions, the Trustee shall have
the power to appoint a co-trustee or separate trustees of all or any part
of the Trust. In the event of such appointment, all rights, powers, duties
and obligations conferred or imposed upon the Trustee by the Pooling and
Servicing Agreement shall be conferred or imposed upon the Trustee and such
separate trustee or co-trustee jointly, or, in any jurisdiction in which
the Trustee shall be incompetent or unqualified to perform certain acts,
singly upon such separate trustee or co-trustee who shall exercise and
perform such rights, powers, duties and obligations solely at the direction
of the Trustee.
The Trustee may resign at any time, in which event the Transferor will
be obligated to appoint a successor Trustee. The Transferor may also remove
the Trustee if the Trustee ceases to be eligible to continue as such under
the Pooling and Servicing Agreement or if the Trustee becomes insolvent. In
such circumstances, the Transferor will be obligated to appoint a successor
Trustee. Any resignation or removal of the Trustee and appointment of a
successor Trustee does not become effective until acceptance of the
appointment by the successor Trustee.
ENHANCEMENT
GENERAL
For any Series, "ENHANCEMENT" may be provided with respect to one or
more Classes thereof. Enhancement may be in the form of the subordination
of one or more Classes of the Certificates of such Series, the
establishment of a cash collateral guaranty or account, a letter of credit,
a surety bond, an insurance policy, a spread account, a reserve account,
the use of cross support features or another method of Enhancement
described in the related Prospectus Supplement, or any combination of the
foregoing. If so specified in the related Prospectus Supplement, any form
of Enhancement may be structured so as to be drawn upon by more than one
Class to the extent described therein.
The type, characteristics and amount of the Enhancement for any Series
or Class will be determined based on several factors, including the
characteristics of the Receivables and Accounts included in the Trust
Portfolio as of the Closing Date with respect to such Series and the
desired rating for each Class, and will be established on the basis of
requirements of each Rating Agency rating the Certificates of such Series
or Class.
Unless otherwise specified in the related Prospectus Supplement for a
Series, the Enhancement will not provide protection against all risks of
loss and will not guarantee repayment of the entire principal balance of
the Certificates and interest thereon. If losses occur which exceed the
amount covered by the Enhancement or which are not covered by the
Enhancement, Certificateholders will bear their allocable share of
deficiencies.
If Enhancement is provided with respect to a Series, the related
Prospectus Supplement will include a description of (a) the amount payable
under such Enhancement, (b) any conditions to payment thereunder not
otherwise described herein, (c) the conditions (if any) under which the
amount payable under such Enhancement may be reduced and under which such
Enhancement may be terminated or replaced and (d) any material provision of
any agreement relating to such Enhancement. Additionally, the related
Prospectus Supplement may set forth information with respect to the issuer
of any third party Enhancement (the "ENHANCEMENT PROVIDER"), including (i)
a brief description of its principal business activities, (ii) its
principal place of business, place of incorporation and the jurisdiction
under which it is chartered or licensed to do business, (iii) if
applicable, the identity of regulatory agencies which exercise primary
jurisdiction over the conduct of its business and (iv) its total assets,
and its stockholders' or policy holders' surplus, if applicable, and other
appropriate financial information as of the date specified in the related
Prospectus Supplement. If so specified in the related Prospectus
Supplement, the Enhancement with respect to a Series may be available to
pay principal of the Certificates of such Series following the occurrence
of certain Pay Out Events with respect to such Series. In such event, the
Enhancement Provider may have an interest in certain cash flows in respect
of the Receivables to the extent described in such Prospectus Supplement
(the "ENHANCEMENT INVESTED AMOUNT").
SUBORDINATION
If so specified in the related Prospectus Supplement, one or more
Classes of any Series will be subordinated as described in the related
Prospectus Supplement to the extent necessary to fund payments with respect
to the Senior Certificates or specified Certificates of another Series. The
rights of the holders of any such Subordinated Certificates to receive
distributions of principal and/or interest on any Distribution Date for
such Series will be subordinated in right and priority to the rights of the
holders of Senior Certificates, but only to the extent set forth in the
related Prospectus Supplement. If so specified in the related Prospectus
Supplement, subordination may apply only in the event of certain types of
losses not covered by another Enhancement. The related Prospectus
Supplement will also set forth information concerning the amount of
subordination of a Class or Classes of Subordinated Certificates in a
Series, the circumstances in which such subordination will be applicable,
the manner, if any, in which the amount of subordination will be
applicable, the manner, if any, in which the amount of subordination will
decrease over time, and the conditions under which amounts available from
payments that would otherwise be made to holders of such Subordinated
Certificates will be distributed to holders of Senior Certificates. If
collections of Receivables otherwise distributable to holders of a
subordinated Class of a Series will be used as support for a Class of
another Series, the related Prospectus Supplement will specify the manner
and conditions for applying such a cross-support feature.
LETTER OF CREDIT
If so specified in the related Prospectus Supplement, support for a
Series or one or more Classes thereof will be provided by one or more
letters of credit. A letter of credit may provide limited protection
against certain losses in addition to or in lieu of other Enhancement. The
issuer of the letter of credit (the "L/C BANK") will be obligated to honor
demands with respect to such letter of credit, to the extent of the amount
available thereunder, to provide funds under the circumstances and subject
to such conditions as are specified in the related Prospectus Supplement.
The maximum liability of an L/C Bank under its letter of credit will
generally be an amount equal to a percentage specified in the related
Prospectus Supplement of the initial Invested Amount of a Series or a
Class of such Series. The maximum amount available at any time to be paid
under a letter of credit will be determined in the manner specified therein
and in the related Prospectus Supplement.
CASH COLLATERAL GUARANTY OR ACCOUNT
If so specified in the related Prospectus Supplement, support for a
Series or one or more Classes thereof will be provided by a guaranty (the
"CASH COLLATERAL GUARANTY") secured by the deposit of cash or certain
permitted investments in an account (the "CASH COLLATERAL ACCOUNT")
reserved for the beneficiaries of the Cash Collateral Guaranty or by a Cash
Collateral Account alone. The amount available pursuant to the Cash
Collateral Guaranty or the Cash Collateral Account will be the lesser of
amounts on deposit in the Cash Collateral Account and an amount specified
in the related Prospectus Supplement. The related Prospectus Supplement
will set forth the circumstances under which payments are made to
beneficiaries of the Cash Collateral Guaranty from the Cash Collateral
Account or from the Cash Collateral Account directly.
COLLATERAL INVESTED AMOUNT
If so specified in the related Prospectus Supplement, support for a
Series or one or more Classes thereof will be provided initially by an
undivided interest in the Trust (the "COLLATERAL INVESTED AMOUNT") in an
amount initially equal to a percentage of the Senior Certificates of such
Series as specified in the related Prospectus Supplement. Such Series may
also have the benefit of a Cash Collateral Guaranty or Cash Collateral
Account with an initial amount on deposit therein of zero or such amount as
specified in the related Prospectus Supplement which will be increased (i)
to the extent the Transferor elects, subject to certain conditions
specified in the related Prospectus Supplement, to apply collections of
Principal Receivables allocable to the Collateral Invested Amount to
decrease the Collateral Invested Amount, (ii) to the extent collections of
Principal Receivables allocable to the Collateral Invested Amount are
required to be deposited into the Cash Collateral Account as specified in
the related Prospectus Supplement and (iii) to the extent excess
collections of Finance Charge Receivables are required to be deposited into
the Cash Collateral Account as specified in the related Prospectus
Supplement. The total amount of the Enhancement available pursuant to the
Collateral Invested Amount and, if applicable, the Cash Collateral
Guaranty or Cash Collateral Account will be the lesser of the sum of the
Collateral Invested Amount and the amount on deposit in the Cash Collateral
Account and an amount specified in the related Prospectus Supplement. The
related Prospectus Supplement will set forth the circumstances under which
payments which otherwise would be made to holders of the Collateral
Invested Amount will be distributed to holders of Senior Certificates and,
if applicable, the circumstances under which payment will be made from the
Cash Collateral Guaranty or from the Cash Collateral Account directly
If so specified in the related Prospectus Supplement, the Collateral
Invested Amount may be issued in certificated form and may have voting and
certain other rights of a subordinated Class of Certificates. Any
Collateral Invested Amount issued in certificated form may be offered
hereby or under a separate Disclosure Document in transactions either
registered under the Securities Act or exempt from registration thereunder.
SURETY BOND OR INSURANCE POLICY
If so specified in the related Prospectus Supplement, insurance with
respect to a Series or one or more Classes thereof will be provided by one
or more insurance companies. Such insurance will guarantee, with respect to
one or more Classes of the related Series, distributions of interest or
principal in the manner and amount specified in the related Prospectus
Supplement.
If so specified in the related Prospectus Supplement, a surety bond
will be purchased for the benefit of the holders of any Series or Class of
such Series to assure distributions of interest or principal with respect
to such Series or Class of Certificates in the manner and amount specified
in the Prospectus Supplement.
SPREAD ACCOUNT
If so specified in the related Prospectus Supplement, support for a
Series or one or more Classes thereof will be provided by the periodic
deposit of certain available excess cash flow from the Trust assets into an
account (the "SPREAD ACCOUNT") intended to assist with subsequent
distribution of interest on and principal of the Certificates of such Class
or Series in the manner specified in the related Prospectus Supplement.
RESERVE ACCOUNT
If so specified in the related Prospectus Supplement, support for a
Series or one or more Classes thereof will be provided by the establishment
of a reserve account (the "RESERVE ACCOUNT"). The Reserve Account may be
funded, to the extent provided in the related Prospectus Supplement, by an
initial cash deposit, the retention of certain periodic distributions of
principal or interest or both otherwise payable to one or more Classes of
Certificates, including the Subordinated Certificates, or the provision of
a letter of credit, guarantee, insurance policy or other form of credit or
any combination thereof. The Reserve Account will be established to assist
with the subsequent distribution of principal or interest on the
Certificates of such Series or Class in the manner provided in the related
Prospectus Supplement.
CERTIFICATE RATINGS
Any rating of the Certificates by a Rating Agency will indicate:
o its view on the likelihood that Certificateholders will
receive required interest and principal payments; and
o its evaluation of the Receivables and the availability of
any Enhancement for the Certificates.
Among the things a rating will not indicate are:
o the likelihood that principal payments will be made on a
scheduled payment date;
o the likelihood that a Pay Out Event will occur;
o the likelihood that a United States withholding tax will be
imposed on non-U.S. Certificateholders;
o the marketability of the Certificates;
o the market price of the Certificates; or
o whether the Certificates are an appropriate investment for
any purchaser.
A rating will not be a recommendation to buy, sell or hold the
Certificates. A rating may be lowered or withdrawn at any time by a Rating
Agency.
The Transferor will request a rating of the Certificates offered by
this Prospectus and the related Prospectus Supplement from at least one
Rating Agency. It will be a condition to the issuance of the Certificates
of each Series or Class offered pursuant to this Prospectus and the related
Prospectus Supplement (including each Series that includes a Pre-Funding
Account) that they be rated in one of the four highest rating categories by
at least one nationally recognized rating organization (each such rating
agency selected by the Transferor to rate any Series, a "RATING AGENCY").
The rating or ratings applicable to the Certificates of each Series or
Class offered hereby will be set forth in the related Prospectus
Supplement. Rating agencies other than those requested could assign a
rating to the Certificates and such a rating could be lower than any rating
assigned by a Rating Agency chosen by the Transferor.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
The Transferor has represented and warranted in the Pooling and
Servicing Agreement that the transfer of Receivables by it to the Trust is
either a valid transfer and assignment to such Trust of all right, title
and interest of the Transferor in and to the related Receivables, except
for the interest of the Transferor as holder of the Exchangeable Transferor
Certificate, or the grant to the Trust of a security interest in such
Receivables. The Transferor has also represented and warranted in the
Agreement that, in the event the transfer of Receivables by the Transferor
to the Trust is deemed to create a security interest under the Uniform
Commercial Code as in effect in the State of Delaware (the "UCC") there
will exist a valid, subsisting and enforceable first priority perfected
security interest in such Receivables created thereafter in favor of such
Trust on and after their creation, except for certain tax and other
governmental liens, subject to the limitations described below. For a
discussion of the Trust's rights arising from a breach of these warranties,
see "Description of the Certificates Representations and Warranties."
The Transferor has represented as to Receivables to be conveyed, that
the Receivables are "accounts" for purposes of the UCC. Both the transfer
and assignment of accounts and the transfer of accounts as security for an
obligation are treated under Article 9 of the UCC as creating a security
interest therein and are subject to its provisions, and the filing of an
appropriate financing statement is required to perfect the security
interest of the Trust. Financing statements covering the Receivables have
been and will be filed with the appropriate governmental authority to
protect the interests of the Trust in the Receivables.
There are certain limited circumstances under the UCC in which a prior
or subsequent transferee of Receivables coming into existence after a
Closing Date could have an interest in such Receivables with priority over
the Trust's interest. Under the Pooling and Servicing Agreement, however,
the Transferor has represented and warranted that it transferred the
Receivables to the Trust free and clear of the lien of any third party. In
addition, the Transferor has covenanted that it will not sell, pledge,
assign, transfer or grant any lien on any Receivable (or any interest
therein) other than to the Trust. A tax or government lien or other
nonconsensual lien on property of the Transferor arising prior to the time
a Receivable comes into existence may also have priority over the interest
of the Trust in such Receivable. If the FDIC were appointed as receiver of
the Transferor, certain administrative expenses of the receiver may also
have priority over the interest of the Trust in such Receivable.
CERTAIN MATTERS RELATING TO RECEIVERSHIP
The Bank is chartered as a national banking corporation and is subject
to regulation and supervision by the United States Comptroller of the
Currency (the "COMPTROLLER"). If the Bank becomes insolvent or is in an
unsound condition or if certain other circumstances occur, the Comptroller
is authorized to appoint the FDIC as receiver.
The Federal Deposit Insurance Act ("FDIA"), as amended by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989,
("FIRREA"), sets forth certain powers that the FDIC may exercise if it were
appointed as conservator or receiver of the Transferor or the Servicer.
Among other things, the FDIA grants such a conservator or receiver the
power to repudiate contracts of, and to request a stay of up to 90 days of
any judicial action or proceeding involving, the Transferor or the
Servicer.
To the extent that (i) the Transferor granted a security interest in
the Receivables to the Trust, (ii) the interest was validly perfected
before the Transferor's insolvency, (iii) the interest was not taken or
granted in contemplation of the Transferor's insolvency or with the intent
to hinder, delay or defraud the Transferor or its creditors, (iv) the
Pooling and Servicing Agreement is continuously a record of the Bank, and
(v) the Pooling and Servicing Agreement represents a bona fide and arm's
length transaction undertaken for adequate consideration in the ordinary
course of business and that the Trustee is the secured party and is not an
insider or affiliate of the Transferor, such valid perfected security
interest of the Trustee would be enforceable (to the extent of the Trust's
"actual direct compensatory damages") notwithstanding the insolvency of, or
the appointment of a receiver or conservator for, the Transferor and
payments to the Trust with respect to the Receivables (up to the amount of
such damages) should not be subject to an automatic stay of payment or to
recovery by the FDIC as conservator or receiver of the Transferor. If,
however, the FDIC were to assert that the security interest was unperfected
or unenforceable or were to require the Trustee to establish its right to
those payments by submitting to and completing the administrative claims
procedure established under FIRREA, or the conservator or receiver were to
request a stay of proceedings with respect to the Transferor as provided
under FIRREA, delays in payments on the Certificates and possible
reductions in the amount of those payments could occur. The FDIA does not
define the term "actual direct compensatory damages." The FDIC has stated
that a claim for "actual direct compensatory damages" is limited to such
damages determined as of the date of appointment of the FDIC as conservator
or receiver. Since the FDIC may delay repudiation or disaffirmation for up
to 180 days following such appointment, investors may not have a claim for
interest accrued during this 180 day period. On December 18, 1998, the
FDIC proposed a statement of policy regarding the treatment of asset-backed
securitization in the event of conservatorship or receivership. In
addition, in one case involving the repudiation by the RTC of certain
secured zero-coupon bonds issued by a savings association, a United States
Federal district court held that "actual direct compensatory damages" in
the case of a marketable security meant the market value of the repudiated
bonds as of the date of repudiation. If that court's view were applied to
determine the Trust's "actual direct compensatory damages" in the event the
FDIC repudiated the Transferor's obligations under the Pooling and
Servicing Agreement, the amount paid to Certificateholders could, depending
upon circumstances existing on the date of the repudiation, be less than
the principal of the Certificates and the interest accrued thereon to the
date of payment.
The Pooling and Servicing Agreement provides that, upon the
appointment of a conservator or receiver or upon a voluntary liquidation
with respect to the Transferor, the Transferor will promptly give notice
thereof to the Trustee and a Pay Out Event will occur with respect to all
Series then outstanding. Pursuant to the Pooling and Servicing Agreement,
newly created Principal Receivables will not be transferred to the Trust on
and after any such appointment or voluntary liquidation, and the Trustee
will proceed to sell, dispose of or otherwise liquidate the Receivables in
a commercially reasonable manner and on commercially reasonable terms,
unless otherwise instructed within a specified period by holders of
Certificates representing undivided interests aggregating more than 50% of
the Invested Amount of each Series (or if any Series has more than one
Class, of each Class, and any other person specified in the Pooling and
Servicing Agreement or a Series Supplement), or unless otherwise required
by the FDIC as receiver or conservator of the Transferor. Under the Pooling
and Servicing Agreement, the proceeds from the sale of the Receivables
allocable to the Certificates would be treated as collections of the
Receivables and would be distributed to the Certificateholders. This
procedure could be delayed, as described above. If the only Pay Out Event
to occur is either the insolvency of the Transferor or the appointment of a
conservator or receiver for the Transferor, the FDIC as conservator or
receiver may have the power to prevent the early sale, liquidation or
disposition of the Receivables and the commencement of the Rapid
Amortization Period. In addition, a conservator or receiver may have the
power to cause the early sale of the Receivables and the early retirement
of the Certificates or to prohibit the continued transfer of Principal
Receivables to the Trust. However, if no Servicer Default other than the
conservatorship or receivership of the Servicer exists, the conservator or
receiver for the Servicer may have the power to prevent either the Trustee
or the Certificateholders from appointing a successor Servicer under the
Pooling and Servicing Agreement. See "Description of the Certificates Pay
Out Events."
If, upon the insolvency of the Servicer, the Servicer were to be
placed into conservatorship or receivership, the FDIC as conservator or
receiver would have the power to repudiate and refuse to perform any
obligations, including servicing obligations, of the Servicer under the
Pooling and Servicing Agreement or any other contract, and to request a
stay of up to 90 days of any judicial action or proceeding involving the
Servicer. In the event of a Servicer Default, if the FDIC were appointed as
conservator or receiver for the Servicer, and no Servicer Default other
than such conservatorship or receivership or insolvency of the Servicer
exists, the FDIC may have the power to prevent a transfer of servicing to a
successor Servicer or to appoint a successor Servicer chosen by the FDIC.
In Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th Cir. 1993),
cert. denied, 114 S. Ct. 554 (1993) ("OCTAGON"), the United States Court of
Appeals for the 10th Circuit suggested that even where a transfer of
accounts from a seller to a buyer constitutes a "true sale," the accounts
would nevertheless constitute property of the seller's bankruptcy estate in
a bankruptcy of the seller. If the Transferor were to be placed into
receivership and a court were to follow the Octagon court's reasoning,
Certificateholders might experience delays in payment or possibly losses in
their investment in the Certificates. Counsel has advised the Transferor
that the facts of the Octagon case are distinguishable from those in the
sale transactions between the Transferor and the Trust and that the
reasoning of the Octagon case appears to be inconsistent with established
precedent and the UCC. In addition, because the Transferor, the Trust and
the transactions governed by the Pooling and Servicing Agreement do not
have any particular link to the 10th Circuit, it is unlikely that the
Transferor would be subject to a receivership proceeding in the 10th
Circuit. Accordingly, the Octagon case should not be binding precedent on a
court in a receivership proceeding.
CONSUMER PROTECTION LAWS
The relationship of the cardholder and credit card issuer is
extensively regulated by Federal and state consumer protection laws. With
respect to credit cards issued by First USA, the most significant laws
include the Federal Truth-in-Lending, Equal Credit Opportunity, Fair Credit
Reporting, Fair Debt Collection Practices and Electronic Funds Transfer
Acts. These statutes impose disclosure requirements when a credit card
account is advertised, when it is opened, at the end of monthly billing
cycles, and at year end. In addition, these statutes limit customer
liability for unauthorized use, prohibit certain discriminatory practices
in extending credit, and impose certain limitations on the type of
account-related charges that may be assessed. Cardholders are entitled
under these laws to have payments and credits applied to the credit card
accounts promptly, to receive prescribed notices and to require billing
errors to be resolved promptly.
The Trust may be liable for certain violations of consumer protection
laws that apply to the related Receivables, either as assignee from the
Transferor with respect to obligations arising before transfer of the
Receivables to the Trust or as a party directly responsible for obligations
arising after the transfer. In addition, a cardholder may be entitled to
assert such violations by way of set-off against his obligation to pay the
amount of Receivables owing. The Transferor warrants in the Pooling and
Servicing Agreement that all related Receivables have been and will be
created in compliance with the requirements of such laws. The Servicer also
agrees in the Pooling and Servicing Agreement to indemnify the Trust, among
other things, for any liability arising from such violations caused by the
Servicer. For a discussion of the Trust's rights arising from the breach
of these warranties, see "Description of the Certificates Representations
and Warranties."
Various proposed laws and amendments to existing laws have from time
to time been introduced in Congress and certain state and local
legislatures that, if enacted, would further regulate the credit card
industry, certain of which would, among other things, impose a ceiling on
the rate at which a financial institution may assess finance charges and
fees on credit card accounts that would be substantially below the rates of
the finance charges and fees the Bank currently assesses on its accounts.
In particular, on June 19, 1997, a proposal to amend the Federal
Truth-in-Lending Act was introduced in the House of Representatives and
referred to the Committee on Banking and Financial Services, which would,
among other things, prohibit the imposition of certain minimum finance
charges and other fees, prohibit certain methods of calculating finance
charges, require prior notice of any increase in the interest rate assessed
with respect to a credit card account and limit the amount of certain fees.
Although such proposed legislation was not enacted, there can be no
assurance that such a bill will not become law in the future. The potential
effect of any legislation which limits the amount of finance charges and
fees that may be charged on credit cards could be to reduce the portfolio
yield on the Accounts. If such portfolio yield is reduced, a Pay Out Event
may occur, and the Rapid Amortization Period would commence.
The Soldiers' and Sailors' Civil Relief Act of 1940 allows individuals
on active duty in the military to cap the interest rate on debts incurred
before the call to active duty to 6% per annum. In addition, subject to
judicial discretion, any action or court proceeding in which an individual
in military service is involved may be stayed if the individual's rights
would be prejudiced by denial of such stay.
Application of Federal and state bankruptcy and debtor relief laws
would affect the interests of the Certificateholders if such laws result in
any related Receivables being written off as uncollectible when the amount
available under any Enhancement is equal to zero. See "Description of the
Certificates Defaulted Receivables; Rebates and Fraudulent Charges."
INDUSTRY LITIGATION
In October 1998, the United States Department of Justice (the "DOJ")
filed an antitrust lawsuit in Federal court in Manhattan against VISA
U.S.A., Inc., VISA International Inc. (together, "VISA") and MasterCard
International Incorporated ("MASTERCARD INTERNATIONAL") alleging that the
two credit card associations restrain competition and limit consumer
choice. The DOJ in such lawsuit challenges, among other things, the
control of both VISA and MasterCard International by the same set of banks,
the ability of banks to issue both MasterCard and VISA cards as well as the
rules adopted by the two associations prohibiting members from offering
credit cards of certain competitors. In public statements, both VISA and
MasterCard International have contested the DOJ's allegations. The Bank is
unable to predict the effect of such lawsuit on the Bank's credit card
business. A final adverse decision against VISA and MasterCard
International, or a similar settlement with the DOJ by the two
associations, could result in changes in the current associations and the
Bank's ability to issue both MasterCard and VISA cards as well as cards of
certain other competitors.
OTHER LITIGATION
The Bank has been named as a defendant in four class action lawsuits
filed in late 1997 by cardmembers of the Bank. These actions were filed in
the Superior Court of the State of Delaware, New Castle County, the Circuit
Court of Multnomah County, Oregon, the United States District Court for the
Western District of Washington and in the 14th District Court of Dallas
County, Texas. The plaintiffs in all four cases contend that they and
others similarly situated are entitled to equitable relief for alleged
violations of the Delaware Consumer Fraud Act, breach of contract, breach
of the covenant of good faith and fair dealing and fraud. The court granted
summary judgment in favor of the Bank in the Delaware case in April 1998
and the court in Oregon entered partial summary judgment in favor of the
Bank in May 1998. These cases are in various stages of motion and discovery
practice. The Bank believes that these claims are without merit and
intends to vigorously defend against all claims. While it is impossible to
predict the outcome of these matters, the Bank believes that any liability
arising from these matters will not have a material adverse effect on the
Transferor's business or on the Receivables of the Trust.
The Bank has been named as a defendant in a class action lawsuit filed
in the United States District Court for the District of Delaware against
the Bank alleging that the Bank charged balance transfer fees in a manner
contrary to representations made in the Bank's solicitations. Although
this matter is at a preliminary stage, the Bank believes that it is without
merit and the Bank intends to vigorously defend against all claims. While
it is impossible to predict the outcome of this matter, the Bank believes
that any liability arising from this matter will not have a material effect
on the Transferor's business or on the Receivables of the Trust.
The Bank has been named as a defendant in a class action lawsuit filed
in December 1998 in the United States District Court for the Northern
District of Illinois alleging that the Bank, in one of its direct mail
solicitations, violated Federal and state prohibitions against the mailing
of unsolicited credit cards. Although this matter is at a preliminary
stage, the Bank believes that it is without merit and the Bank intends to
vigorously defend against all claims. While it is impossible to predict
the outcome of this matter the Bank believes that any liability arising
from this matter will not have a material adverse effect on the
Transferor's business or on the Receivables of the Trust.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following discussion, summarizing certain anticipated United
States ("U.S.") Federal income tax aspects of the purchase, ownership and
disposition of the Certificates of a Series, is based upon the provisions
of the Internal Revenue Code of 1986, as amended (the "CODE"), proposed,
temporary and final Treasury regulations thereunder, and published rulings
and court decisions in effect as of the date hereof, all of which are
subject to change, possibly retroactively. This discussion does not address
every aspect of the Federal income tax laws that may be relevant to
Certificate Owners of a Series in light of their personal investment
circumstances or to certain types of Certificate Owners of a Series subject
to special treatment under U.S. Federal income tax laws (for example, banks
and life insurance companies). Each prospective Certificate Owner is urged
to consult its own tax advisor in determining the Federal, state, local and
foreign income and any other tax consequences of the purchase, ownership
and disposition of a Certificate.
CHARACTERIZATION OF THE CERTIFICATES AS INDEBTEDNESS
Unless otherwise specified in the related Prospectus Supplement,
special tax counsel to the Bank ("SPECIAL TAX COUNSEL") specified in such
Prospectus Supplement will, upon issuance of a Series of Certificates,
advise the Bank based on the assumptions and qualifications set forth in
the opinion that the Certificates of such Series that are offered pursuant
to a Prospectus Supplement (the "OFFERED CERTIFICATES;" and for purposes of
this section "Certain U.S. Federal Income Tax Consequences" the term
"CERTIFICATE OWNER" refers to a holder of a beneficial interest in an
Offered Certificate) will be treated as indebtedness for Federal income tax
purposes. However, opinions of counsel are not binding on the Internal
Revenue Service (the "IRS") and there can be no assurance that the IRS
could not successfully challenge this conclusion.
The Transferor expresses in the Pooling and Servicing Agreement its
intent that for Federal, state and local income or franchise tax purposes,
the Offered Certificates of each Series will be indebtedness secured by the
Receivables. The Transferor agrees and each Certificateholder and
Certificate Owner, by acquiring an interest in an Offered Certificate,
agrees or will be deemed to agree to treat the Offered Certificates of such
Series as indebtedness for Federal, state and local income or franchise tax
purposes. However, because different criteria are used to determine the
non-tax accounting characterization of the transactions contemplated by the
Pooling and Servicing Agreement, the Transferor expects to treat such
transaction, for regulatory and financial accounting purposes, as a sale of
an ownership interest in the Receivables and not as a secured loan.
In general, whether for Federal income tax purposes a transaction
constitutes a sale of property or a loan, the repayment of which is secured
by the property, is a question of fact, the resolution of which is based
upon the economic substance of the transaction rather than its form or the
manner in which it is labeled. While the IRS and the courts have set forth
several factors to be taken into account in determining whether the
substance of a transaction is a sale of property or a secured indebtedness
for Federal income tax purposes, the primary factor in making this
determination is whether the transferee has assumed the risk of loss or
other economic burdens relating to the property and has obtained the
benefits of ownership thereof. Unless otherwise set forth in a Prospectus
Supplement, it is expected that, as set forth in its opinion, Special Tax
Counsel will analyze and rely on several factors in reaching its opinion
that the weight of the benefits and burdens of ownership of the Receivables
has not been transferred to the Certificate Owners.
In some instances, courts have held that a taxpayer is bound by a
particular form it has chosen for a transaction, even if the substance of
the transaction does not accord with its form. Unless otherwise specified
in a Prospectus Supplement, it is expected that Special Tax Counsel will
advise that the rationale of those cases will not apply to the transaction
evidenced by a Series of Certificates, because the form of the transaction,
as reflected in the operative provisions of the documents, either is not
inconsistent with the characterization of the Offered Certificates of such
Series as debt for Federal income tax purposes or otherwise makes the
rationale of those cases inapplicable to this situation.
TAXATION OF INTEREST INCOME OF CERTIFICATEHOLDERS
As set forth above, it is expected that, unless otherwise specified in
a Prospectus Supplement, Special Tax Counsel will advise the Bank that the
Offered Certificates will constitute indebtedness for Federal income tax
purposes, and accordingly, interest thereon will be includible in income by
Certificate Owners as ordinary income in accordance with their respective
methods of tax accounting. Interest received on the Offered Certificates
may also constitute "investment income" for purposes of certain limitations
of the Code concerning the deductibility of investment interest expense.
While it is not anticipated that the Offered Certificates will be
issued at a greater than de minimis discount, under applicable Treasury
regulations (the "REGULATIONS") the Offered Certificates may nevertheless
be deemed to have been issued with original issue discount ("OID"). This
could be the case, for example, if interest payments for a Series are not
treated as "qualified stated interest" because the IRS determines that
(i) no reasonable legal remedies exist to compel timely payment and
(ii) the Offered Certificates do not have terms and conditions that make
the likelihood of late payment (other than a late payment that occurs
within a reasonable grace period) or nonpayment a remote contingency.
Applicable regulations provide that, for purposes of the foregoing test,
the possibility of nonpayment due to default, insolvency, or similar
circumstances, is ignored. Although this provision does not directly apply
to the Offered Certificates (because they have no actual default
provisions) the Transferor intends to take the position that, because
nonpayment can occur only as a result of events beyond its control
(principally, loss rates and payment delays on the Receivables
substantially in excess of those anticipated), nonpayment is a remote
contingency. Based on the foregoing, and on the fact that generally
interest will accrue on the Offered Certificates at a "qualified floating
rate," the Transferor intends to take the position that interest payments
on the Offered Certificates constitute qualified stated interest. If,
however, interest payments for a Series were not classified as "qualified
stated interest," all of the taxable income to be recognized with respect
to the Offered Certificates would be includible in income as OID but would
not be includible again when the interest is actually received.
If the Offered Certificates are in fact issued at a greater than de
minimis discount or are treated as having been issued with OID under the
Regulations, the following rules will apply. The excess of the "stated
redemption price at maturity" of an Offered Certificate over the original
issue price (in this case, the initial offering price at which a
substantial amount of the Offered Certificates are sold to the public) will
constitute OID. A Certificate Owner must include OID in income as interest
over the term of the Offered Certificate under a constant yield method. In
general, OID must be included in income in advance of the receipt of cash
representing that income. In the case of a debt instrument as to which the
repayment of principal may be accelerated as a result of the prepayment of
other obligations securing the debt instrument (a "PREPAYABLE INSTRUMENT"),
the periodic accrual of OID is determined by taking into account both the
prepayment assumptions used in pricing the debt instrument and the
prepayment experience. If this provision applies to a Class of Certificates
(which is not clear), the amount of OID which will accrue in any given
"accrual period" may either increase or decrease depending upon the actual
prepayment rate. Accordingly, each Certificate Owner should consult its own
tax advisor regarding the impact to it of the OID rules if the Offered
Certificates are issued with OID. Under the Regulations, a holder of a
Certificate issued with de minimis OID must include such OID in income
proportionately as principal payments are made on a Class of Certificates.
A Certificate Owner who purchases an Offered Certificate at a discount
from its adjusted issue price after its original issuance may be subject to
the "market discount" rules of the Code. These rules provide, in part, for
the treatment of gain attributable to accrued market discount as ordinary
income upon the receipt of partial principal payments or on the sale or
other disposition of the Offered Certificate, and for the deferral of
interest deductions with respect to debt incurred to acquire or carry the
market discount Offered Certificate.
A Certificate Owner who purchases an Offered Certificate after its
original issuance for an amount in excess of the sum of all amounts payable
on such Certificate after the purchase date other than payment of qualified
stated interest (the "REMAINING REDEMPTION AMOUNT") shall be considered to
have purchased the Certificates at a premium. Such Certificate Owner may
generally elect to amortize such premium (as an offset to interest income),
using a constant yield method, over the remaining term of the Certificate.
A Certificate Owner who purchases an Offered Certificate that was
issued with OID after its original issuance for an amount less than, or
equal to, the Remaining Redemption Amount but in excess of the Certificate
adjusted issue price (any such excess being "acquisition premium")
generally is permitted to reduce the daily portion of OID otherwise
includible in such Certificate Owner's taxable income.
SALE OR OTHER DISPOSITION OF A CERTIFICATE
In general, a Certificate Owner will recognize gain or loss upon the
sale, exchange, redemption, or other taxable disposition of an Offered
Certificate measured by the difference between (i) the amount of cash and
the fair market value of any property received (other than amounts
attributable to, and taxable as, accrued interest) and (ii) the Certificate
Owner's tax basis in the Offered Certificate (which is equal, in general,
to the purchase price of the Certificate increased by any OID or market
discount previously included in income by the holder and decreased by any
deductions previously allowed for amortizable bond premium and by any
payments reflecting principal or OID received with respect to such
Certificate). Subject to the market discount rules discussed above and to
the one-year holding requirement for long-term capital gain treatment, any
such gain or loss generally will be long-term capital gain, provided that
the Offered Certificate was held as a capital asset and provided, further,
that if the rules applicable to Prepayable Instruments apply, any OID not
previously accrued will be treated as ordinary income. The maximum ordinary
income tax rate for individuals, estates, and trusts exceeds the maximum
long-term capital gains tax rate for such taxpayers. In addition, capital
losses generally may be used only to offset capital gains.
TAX CHARACTERIZATION OF THE TRUST
The Pooling and Servicing Agreement permits the issuance of Classes of
Certificates that are treated for Federal income tax purposes either as
indebtedness or as an interest in a partnership. Accordingly, the Trust
could be characterized either as (i) a security device to hold Receivables
securing the repayment of the Certificates of all Series or (ii) a
partnership in which the Transferor and holder of certain classes of
Certificates are partners, and which has issued debt represented by other
Classes of Certificates (including, unless otherwise specified in a
Supplement, the Offered Certificates). In connection with the issuance of
Certificates of any Series, Special Tax Counsel will render an opinion to
the Bank, based on the assumptions and qualifications set forth therein,
that under then current law, the issuance of the Certificates of such
Series will not cause the Trust to be characterized for Federal income tax
purposes as an association (or publicly traded partnership) taxable as a
corporation. The assumptions and qualifications set forth in such opinion
will include the qualification that the opinion is limited to the issuance
of the Certificates of such Series by the Trust and an assumption that any
secondary transactions entered into with respect to any Class of
Certificates (such as the deposit of Certificates into a second trust and
the issuance of securities out of that trust) will not adversely affect the
Federal income tax status of the Trust.
The opinion of Special Tax Counsel with respect to Offered
Certificates and the Trust will not be binding on the courts or the IRS. It
is possible that the IRS could assert that, for purposes of the Code, the
transaction contemplated by this Prospectus and a Prospectus Supplement
constitutes a sale of the Receivables (or an interest therein) to the
Certificate Owners of one or more Series or Classes and that the proper
classification of the legal relationship between the Bank and some or all
of the Certificate Owners or Certificateholders of one or more
Series resulting from the transaction is that of a partnership or a
publicly traded partnership taxable as a corporation, or an association
taxable as a corporation. The Transferor currently does not intend to
comply with the Federal income tax reporting requirements that would apply
if any Classes of Certificates were treated as interests in a partnership
or corporation (unless, as is permitted by the Pooling and Servicing
Agreement, an interest in the Trust that is issued or sold is intended to
be classified as an interest in a partnership).
If the Trust were treated in whole or in part as a partnership in
which some or all Certificate Owners of one or more Series were partners,
that partnership could be classified as a publicly traded partnership
taxable as a corporation. A partnership will be classified as a publicly
traded partnership taxable as a corporation if equity interests therein are
traded on an "established securities market," or are "readily tradeable" on
a "secondary market" or its "substantial equivalent" unless certain
exceptions apply. One such exception would apply if the Trust is not
engaged in a "financial business" and 90% or more of its income consists of
interest and certain other types of passive income. Because Treasury
regulations do not clarify the meaning of a "financial business" for this
purpose, it is unclear whether this exception applies. The Transferor has
taken and intends to take measures designed to reduce the risk that the
Trust could be classified as a publicly traded partnership taxable as a
corporation by reason of trading of interests in the Trust other than the
Offered Certificates and other certificates with respect to which an
opinion is rendered that such certificates constitute debt for Federal
income tax purposes. However, there can be no assurance that the Trust
could not become a publicly traded partnership, because certain of the
actions necessary to comply with such exceptions are not fully within the
control of the Transferor. Furthermore, certain Series issued prior to
May 2, 1995 may not be able to be conformed to the measures taken by the
Transferor with respect to Series issued on or after that date.
If a transaction were treated as creating a partnership between the
Transferor and the Certificate Owners of one or more Series, the
partnership itself would not be subject to Federal income tax (unless it
were to be characterized as a publicly traded partnership taxable as a
corporation); rather, the partners of such partnership, including the
Certificate Owners of such Series, would be taxed individually on their
respective distributive shares of the partnership's income, gain, loss,
deductions and credits. The amount and timing of items of income and
deductions of a Certificate Owner could differ if the Offered Certificates
were held to constitute partnership interests, rather than indebtedness.
Moreover, unless the partnership were treated as engaged in a trade or
business, an individual's share of expenses of the partnership would be
miscellaneous itemized deductions that, in the aggregate, are allowed as
deductions only to the extent they exceed two percent of the individual's
adjusted gross income, and would be subject to reduction under Section 68
of the Code if the individual's adjusted gross income exceeded certain
limits. As a result, the individual might be taxed on a greater amount of
income than the stated rate on the Offered Certificates. Finally, if the
partnership were a publicly traded partnership that qualifies for exemption
from taxation as a corporation, all or a portion of any taxable income
allocated to a Certificate Owner that is a pension, profit-sharing or
employee benefit plan or other tax-exempt entity (including an individual
retirement account) may, under certain circumstances, constitute "unrelated
business taxable income" which generally would be taxable to the holder.
Partnership characterization also may have adverse state and local income
or franchise tax consequences for a Certificate Owner.
If it were determined that a transaction created an entity classified
as an association or as a publicly traded partnership taxable as a
corporation, the Trust would be subject to Federal income tax at corporate
income tax rates on the income it derives from the Receivables, which would
reduce the amounts available for distribution to the Certificate Owners,
possibly including Certificate Owners of a Class that is treated as
indebtedness. Such classification may also have adverse state and local tax
consequences that would reduce amounts available for distribution to
Certificate Owners. Cash distributions to the Certificate Owners (except
any Class not recharacterized as an equity interest in an association)
generally would be treated as dividends for tax purposes to the extent of
such deemed corporation's earnings and profits.
RECENT LEGISLATION
Certain provisions of the Code provide for the creation of a new type
of entity for Federal income tax purposes, the "financial asset
securitization investment trust" ("FASIT"). However, although these
provisions were effective September 1, 1997, many technical issues
concerning FASITs must be addressed by Treasury regulations which have not
yet been issued. Although transition rules permit an entity in existence on
August 31, 1997, such as the Trust, to elect FASIT status, at the present
time it is not clear how outstanding interests of such an entity would be
treated subsequent to such an election. The Pooling and Servicing Agreement
may be amended in accordance with the provisions thereof to provide that
the Transferor may cause a FASIT election to be made for the Trust if the
Transferor delivers to the Trustee an opinion of counsel to the effect
that, for Federal income tax purposes, (i) the issuance of FASIT regular
interests will not adversely affect the tax characterization as debt of
Certificates of any outstanding Series or Class that were characterized as
debt at the time of their issuance, (ii) following such issuance, the Trust
will not be deemed to be an association (or publicly traded partnership)
taxable as a corporation and (iii) such issuance will not cause or
constitute an event in which gain or loss would be recognized by any
Certificate Owners or the Trust.
FOREIGN INVESTORS
As set forth above, it is expected that Special Tax Counsel will
render an opinion, upon issuance, that the Offered Certificates will be
treated as debt for U.S. Federal income tax purposes. The following
information describes the U.S. Federal income tax treatment of investors
that are not U.S. persons ("FOREIGN INVESTORS") if the Offered Certificates
are treated as debt. The term "Foreign Investor" means any person other
than (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity organized in or under the laws of the United
States or any political subdivision thereof, (iii) an estate the income of
which is includible in gross income for U.S. Federal income tax purposes,
regardless of its source or (iv) a trust if a U.S. court is able to
exercise primary supervision over the administration of such trust and one
or more U.S. persons have the authority to control all substantial
decisions of such trust.
Interest, including OID, paid to a Foreign Investor will be subject to
U.S. withholding taxes at a rate of 30% unless (x) the income is
"effectively connected" with the conduct by such Foreign Investor of a
trade or business in the United States or (y) the Foreign Investor and each
securities clearing organization, bank, or other financial institution that
holds the Offered Certificates on behalf of the customer in the ordinary
course of its trade or business, in the chain between the Certificate Owner
and the U.S. person otherwise required to withhold the U.S. tax, complies
with applicable identification requirements and, in addition (i) the
non-U.S. Certificate Owner does not actually or constructively own 10
percent or more of the total combined voting power of all classes of stock
of the Transferor entitled to vote (or of a profits or capital interest of
a trust characterized as a partnership), (ii) the non-U.S. Certificate
Owner is not a controlled foreign corporation that is related to the
Transferor (or a trust treated as a partnership) through stock ownership,
(iii) the non-U.S. Certificate Owner is not a bank receiving interest
described in Code Section 881(c)(3)(A), (iv) such interest is not
contingent interest described in Code Section 871(h)(4), and (v) the
non-U.S. Certificate Owner does not bear certain relationships to any
holder of the Exchangeable Transferor Certificate other than the Transferor
or any holder of the Certificates of any Series not properly characterized
as debt. Applicable identification requirements generally will be satisfied
if there is delivered to a securities clearing organization (i) IRS
Form W-8 signed under penalties of perjury by the Certificate Owner,
stating that the Certificate Owner is not a U.S. person and providing such
Certificate Owner's name and address, (ii) IRS Form 1001, signed by the
Certificate Owner or such Certificate Owner's agent, claiming exemption
from withholding under an applicable tax treaty, or (iii) IRS Form 4224
signed by the Certificate Owner or such owner's agent, claiming exemption
from withholding of tax on income effectively connected with the conduct of
a trade or business in the United States; provided that in any such case
(x) the applicable form is delivered pursuant to applicable procedures and
is properly transmitted to the United States entity otherwise required to
withhold tax and (y) none of the entities receiving the form has actual
knowledge that the Certificate Owner is a U.S. person.
On October 6, 1997, the Department of the Treasury issued new
regulations (the "New Regulations") which make certain modifications to the
withholding, backup withholding and information reporting rules described
above. The New Regulations attempt to unify certification requirements and
modify reliance standards. The New Regulations will generally be effective
for payments made after December 31, 1999, subject to certain transition
rules. Prospective investors are urged to consult their own tax advisors
regarding the New Regulations.
A Certificate Owner that is a nonresident alien or foreign corporation
will not be subject to U.S. Federal income tax on gain realized upon the
sale, exchange, or redemption of an Offered Certificate, provided that
(i) such gain is not effectively connected with the conduct of a trade or
business in the United States, (ii) in the case of a Certificate Owner that
is an individual, such Certificate Owner is not present in the United
States for 183 days or more during the taxable year in which such sale,
exchange, or redemption occurs, and (iii) in the case of gain representing
accrued interest, the conditions described in the second preceding
paragraph are satisfied.
If the interests of the Certificate Owners of a Series were
reclassified as interests in a partnership (not taxable as a corporation),
such recharacterization could cause a Foreign Investor to be treated as
engaged in a trade or business in the United States. In such event the
Certificate Owner of such Series would be required to file a Federal income
tax return and, in general, would be subject to Federal income tax,
including branch profits tax in the case of a Certificateholder that is a
corporation, on its net income from the partnership. Further, the
partnership would be required, on a quarterly basis, to pay withholding tax
equal to the sum, for each foreign partner, of such foreign partner's
distributive share of "effectively connected" income of the partnership
multiplied by the highest rate of tax applicable to that foreign partner.
The tax withheld from each foreign partner would be credited against such
foreign partner's U.S. Federal income tax liability.
If the Trust were taxable as a corporation, distributions to foreign
persons, to the extent treated as dividends, would generally be subject to
withholding at the rate of 30%, unless such rate were reduced by an
applicable tax treaty.
STATE AND LOCAL TAXATION
The discussion above does not address the tax treatment of the Trust,
the Certificates of any Series, or the Certificate Owners of any Series
under state tax laws. Each investor should consult its own tax advisor
regarding state and local tax consequences of purchase, ownership or
disposition of the Certificates of any Series under any state or local tax
law.
ERISA CONSIDERATIONS
Section 406 of "ERISA" and Section 4975 of the Code prohibit a
pension, profit sharing or other employee benefit plan from engaging in
certain transactions involving "plan assets" with persons that are "parties
in interest" under ERISA or "disqualified persons" under the Code with
respect to the plan. ERISA also imposes certain duties on persons who are
fiduciaries of plans subject to ERISA and prohibits certain transactions
between a plan and parties in interest with respect to such plans. Under
ERISA, any person who exercises any authority or control respecting the
management or disposition of the assets of a plan is considered to be a
fiduciary of such plan (subject to certain exceptions not here relevant). A
violation of these "prohibited transaction" rules may generate excise tax
and other liabilities under ERISA and the Code for such persons.
Plan fiduciaries must determine whether the acquisition and holding of
the Certificates of a Series and the operations of the Trust would result
in direct or indirect prohibited transactions under ERISA and the Code. The
operations of the Trust could result in prohibited transactions if Benefit
Plans that purchase the Certificates of a Series are deemed to own an
interest in the underlying assets of the Trust. There may also be an
improper delegation of the responsibility to manage Benefit Plan assets if
Benefit Plans that purchase the Certificates are deemed to own an interest
in the underlying assets of the Trust.
Pursuant to a final regulation (the "FINAL REGULATION") issued by the
Department of Labor ("DOL") concerning the definition of what constitutes
the "plan assets" of an employee benefit plan subject to ERISA or the Code,
or an individual retirement account ("IRA") (collectively referred to as
"BENEFIT PLANS"), the assets and properties of certain entities in which a
Benefit Plan makes an equity investment could be deemed to be assets of the
Benefit Plan in certain circumstances. Accordingly, if Benefit Plans
purchase Certificates of a Series, the Trust could be deemed to hold plan
assets unless one of the exceptions under the Final Regulation is
applicable to the Trust.
The Final Regulation only applies to the purchase by a Benefit Plan of
an "equity interest" in an entity. Assuming that interests in Certificates
of a Series are equity interests, the Final Regulation contains an
exception that provides that if a Benefit Plan acquires a "publicly-offered
security," the issuer of the security is not deemed to hold plan assets. A
publicly-offered security is a security that is (i) freely transferable,
(ii) part of a class of securities that is owned by 100 or more investors
independent of the issuer and of one another and (iii) either is (A) part
of a class of securities registered under Section 12(b) or 12(g) of the
Exchange Act or (B) sold to the plan as part of an offering of securities
to the public pursuant to an effective registration statement under the
Securities Act and the class of securities of which such security is a part
is registered under the Exchange Act within 120 days (or such later time as
may be allowed by the SEC) after the end of the fiscal year of the issuer
during which the offering of such securities to the public occurred. In
addition, the Final Regulation provides that if a Benefit Plan invests in
an "equity interest" of an entity that is neither a "publicly-offered
security" nor a security issued by an investment company registered under
the Investment Company Act of 1940, as amended, the Benefit Plan's assets
include both the equity interest and an undivided interest in each of the
entity's underlying assets, unless it is established that equity
participation by "benefit plan investors" is not "significant" or that
another exception applies.
Under the Final Regulation, equity participation in an entity by
"benefit plan investors" is "significant" on any date if, immediately after
the most recent acquisition of any equity interest in the entity (other
than a publicly-offered class of equity), 25% or more of the value of any
class of equity interests in the entity (other than a publicly-offered
class) is held by "benefit plan investors." For purposes of this
determination, the value of equity interests held by a person (other than a
benefit plan investor) that has discretionary authority or control with
respect to the assets of the entity or that provides investment advice for
a fee with respect to such assets (or any affiliate of such person) is
disregarded. The term "benefit plan investor" is defined in the Final
Regulation as (a) any employee benefit plan (as defined in Section 3(3) of
ERISA), whether or not it is subject to the provisions of Title I of ERISA,
(b) any plan described in Section 4975(e)(1) of the Code and (c) any entity
whose underlying assets include plan assets by reason of a plan's
investment in the entity.
Unless otherwise specified in the related Prospectus Supplement, it is
anticipated that interests in the Certificates of a Series will meet the
criteria of publicly-offered securities as set forth above. Unless
otherwise specified in the related Prospectus Supplement, the underwriters
expect (although no assurances can be given) that interests in each
Class of Certificates of each Series offered hereby will be held by at
least 100 independent investors at the conclusion of the offering for such
Series; there are no restrictions imposed on the transfer of interests in
the Certificates of such Series; and interests in the Certificates of such
Series will be sold as part of an offering pursuant to an effective
registration statement under the Securities Act and then will be timely
registered under the Exchange Act.
If interests in the Certificates of a Series fail to meet the criteria
of publicly-offered securities or investment by benefit plan investors
becomes significant and the Trust's assets are deemed to include assets of
Benefit Plans that are Certificateholders, transactions involving the Trust
and "parties in interest" or "disqualified persons" with respect to such
plans might be prohibited under Section 406 of ERISA and Section 4975 of
the Code unless an exemption is applicable. In addition, the Transferor or
any underwriter of such Series may be considered to be a party in interest,
disqualified person or fiduciary with respect to an investing Benefit Plan.
Accordingly, an investment by a Benefit Plan in Certificates may be a
prohibited transaction under ERISA and the Code unless such investment is
subject to a statutory or administrative exemption. Thus, for example, if a
participant in any Benefit Plan is a cardholder of one of the Accounts,
under DOL interpretations the purchase of interests in Certificates by such
plan could constitute a prohibited transaction. Five class exemptions
issued by the DOL that could apply in such event are DOL Prohibited
Transaction Exemption ("PTE") 84-14 (Class Exemption for Plan Asset
Transactions Determined by Independent Qualified Professional Asset
Managers), 91-38 (Class Exemption for Certain Transactions Involving Bank
Collective Investment Funds), 90-1 (Class Exemption for Certain
Transactions Involving Insurance Company Pooled Separate Accounts), 95-60
(Class Exemption for Certain Transactions Involving Insurance Company
General Accounts) and 96-23 (Class Exemption for Plan Asset Transactions
Determined by In-House Asset Managers). There is no assurance that these
exemptions, even if all of the conditions specified therein are satisfied,
or any other exemption will apply to all transactions involving the Trust's
assets.
IN LIGHT OF THE FOREGOING, FIDUCIARIES OF A BENEFIT PLAN CONSIDERING
THE PURCHASE OF INTERESTS IN CERTIFICATES OF ANY SERIES SHOULD CONSULT
THEIR OWN COUNSEL AS TO WHETHER THE ASSETS OF THE TRUST WHICH ARE
REPRESENTED BY SUCH INTERESTS WOULD BE CONSIDERED PLAN ASSETS, AND WHETHER,
UNDER THE GENERAL FIDUCIARY STANDARDS OF INVESTMENT PRUDENCE AND
DIVERSIFICATION, AN INVESTMENT IN CERTIFICATES OF ANY SERIES IS APPROPRIATE
FOR THE BENEFIT PLAN TAKING INTO ACCOUNT THE OVERALL INVESTMENT POLICY OF
THE BENEFIT PLAN AND THE COMPOSITION OF THE BENEFIT PLAN'S INVESTMENT
PORTFOLIO. In addition, fiduciaries should consider the consequences that
would apply if the Trust's assets were considered plan assets, the
applicability of exemptive relief from the prohibited transaction rules and
whether all conditions for such exemptive relief would be satisfied.
In particular, insurance companies considering the purchase of
Certificates of any Series should consult their own employee benefits
counsel or other appropriate counsel with respect to the United States
Supreme Court's decision in John Hancock Mutual Life Insurance Co. v.
Harris Trust & Savings Bank, 114 S. Ct. 517 (1993) ("JOHN HANCOCK") and the
applicability of PTE 95-60. In John Hancock, the Supreme Court held that
assets held in an insurance company's general account may be deemed to be
"plan assets" under certain circumstances; however, PTE 95-60 may exempt
some or all of the transactions that could occur as the result of the
acquisition and holding of the Certificates of a Series by an insurance
company general account from the penalties normally associated with
prohibited transactions. Accordingly, investors should analyze whether John
Hancock and PTE 95-60 or any other exemption may have an impact with
respect to their purchase of the Certificates of any Series.
In addition, insurance companies considering the purchase of
Certificates using assets of a general account should consult their own
employee benefits counsel or other appropriate counsel with respect to the
effect of the Small Business Job Protection Act of 1996 which added a new
Section 401(c) of ERISA relating to the status of the assets of insurance
company general accounts under ERISA and Section 4975 of the Code. Pursuant
to Section 401(c), the DOL is required to issue final regulations (the
"GENERAL ACCOUNT REGULATIONS") with respect to insurance policies issued on
or before December 31, 1998 that are supported by an insurer's general
account. The General Account Regulations are intended to provide guidance
on which assets held by the insurer constitute "plan assets" for purposes
of the fiduciary responsibility provisions of ERISA and Section 4975 of the
Code. Section 401(c) also provides that, except in the case of avoidance of
the General Account Regulations and actions brought by the Secretary of
Labor relating to certain breaches of fiduciary duties that also constitute
breaches of state or Federal criminal law, until the date that is 18 months
after the General Account Regulations become final, no liability under the
fiduciary responsibility and prohibited transaction provisions of ERISA and
Section 4975 may result on the basis of a claim that the assets of the
general account of an insurance company constitute the plan assets of any
Benefit Plan. The DOL has recently issued proposed regulations under
Section 401(c). It should be noted that if the General Account Regulations
are adopted substantially in the form in which proposed, the General
Account Regulations may not exempt the assets of insurance company general
accounts from treatment as "plan assets" after December 31, 1998. The plan
asset status of insurance company separate accounts is unaffected by new
Section 401(c) of ERISA, and separate account assets continue to be treated
as the plan assets of any Benefit Plan invested in a separate account. Plan
investors considering the purchase of Certificates of any Series on behalf
of an insurance company general account should consult their legal advisors
regarding the effect of the General Account Regulations on such purchase.
PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in an underwriting
agreement (an "UNDERWRITING AGREEMENT") to be entered into with respect to
a Series of Certificates, the Transferor will agree to sell to each of the
underwriters named therein and in the related Prospectus Supplement, and
each of such underwriters will severally agree to purchase from the
Transferor, the principal amount of Certificates set forth therein and in
the related Prospectus Supplement (subject to proportional adjustment on
the terms and conditions set forth in the related Underwriting Agreement in
the event of an increase or decrease in the aggregate amount of
Certificates offered hereby and by the related Prospectus Supplement).
In each Underwriting Agreement, the several underwriters will agree,
subject to the terms and conditions set forth therein, to purchase all the
Certificates offered hereby and by the related Prospectus Supplement if any
of such Certificates are purchased. In the event of a default by any
underwriter, each Underwriting Agreement will provide that, in certain
circumstances, purchase commitments of the nondefaulting underwriters may
be increased or the Underwriting Agreement may be terminated.
Each Prospectus Supplement will set forth the price at which each
Series of Certificates or Class being offered thereby initially will be
offered to the public and any concessions that may be offered to certain
dealers participating in the offering of such Certificates. After the
initial public offering, the public offering price and such concessions may
be changed.
Each Underwriting Agreement will provide that the Transferor will
indemnify the related underwriters against certain liabilities, including
liabilities under the Securities Act or contribute to payments such
underwriters may be required to make in respect thereof. The place and time
of delivery for any Series of Certificates in respect of which this
Prospectus is delivered will be set forth in the accompanying Prospectus
Supplement.
First Chicago Capital Markets, Inc. ("FCCM") and Banc One Capital
Markets, Inc. ("BOCM") are affiliates of the Transferor. Any obligations of
FCCM or BOCM are the sole obligations of FCCM or BOCM, respectively, and do
not create any obligations on the part of any of their affiliates.
FCCM and BOCM may from time to time purchase or acquire a position in
the Certificates and may, at each of their options, hold or resell such
Certificates. FCCM and BOCM expect to offer and sell previously issued
Certificates in the course of their respective businesses as
broker-dealers. FCCM and BOCM may each act as a principal or an agent in
such transactions. This Prospectus and the related Prospectus Supplement
may be used by FCCM or BOCM and in connection with such transactions. Such
sales, if any, will be made at varying prices related to prevailing market
prices at the time of sale.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates
will be passed upon for the Transferor by Joanne K. Sundheim, Senior Vice
President and Associate General Counsel of First USA Bank, N.A., and by
special counsel, Skadden, Arps, Slate, Meagher & Flom LLP, New York, New
York. Certain legal matters relating to the issuance of the Certificates
and ERISA matters will be passed upon for the underwriters by Skadden,
Arps, Slate, Meagher & Flom LLP, New York, New York.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued, monthly and
annual reports, containing information concerning the Trust and prepared by
the Servicer, will be sent on behalf of the Trust to Cede as nominee of DTC
and registered holder of the related Certificates, pursuant to the Pooling
and Servicing Agreement. See "Description of the Certificates Book-Entry
Registration," " Reports to Certificateholders" and " Evidence as to
Compliance." Such reports will not constitute financial statements prepared
in accordance with generally accepted accounting principles. The Servicer
does not intend to send any financial reports of the Bank to
Certificateholders or to the Certificate Owners. The Servicer will file
with the SEC such periodic reports with respect to the Trust as are
required under the Exchange Act and the rules and regulations of the SEC
thereunder.
WHERE YOU CAN FIND MORE INFORMATION
We filed a registration statement relating to the Certificates with
the SEC. This Prospectus is part of the registration statement, but the
registration statement includes additional information.
The Servicer will file with the SEC all required annual, monthly and
special SEC reports and other information about the Trust.
You may read and copy any reports, statements or other information we
file at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may request copies of these documents, upon
payment of a duplicating fee, by writing to the SEC. Please call the SEC
at (800) SEC-0330 for further information on the operation of the public
reference rooms. Our SEC filings are also available to the public on the
SEC Internet site (http://www.sec.gov).
The SEC allows us to "incorporate by reference" information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by
reference is considered to be part of this Prospectus. Information that we
file later with the SEC will automatically update the information in this
Prospectus. In all cases, you should rely on the later information over
different information included in this Prospectus or the related Prospectus
Supplement. We incorporate by reference any future annual, monthly and
special SEC reports and proxy materials filed by or on behalf of the Trust
until we terminate our offering of the Certificates.
As a recipient of this Prospectus, you may request a copy of any
document we incorporate by reference, except exhibits to the documents
(unless the exhibits are specifically incorporated by reference), at no
cost, by writing or calling us at: First USA Bank, National Association,
201 North Walnut Street, Wilmington, Delaware 19801, (302) 594-4000.
INDEX OF TERMS FOR PROSPECTUS
Terms Page
----- ----
Accounts ............................................................. 8
Accumulation Period .................................................. 18
Addition Cut-Off Date ................................................ 23
Additional Accounts .................................................. 8
Agreement ............................................................ 4
Amortization Period .................................................. 10
Annual Membership Fees ............................................... 8
Assignment ........................................................... 23
BANC ONE ............................................................. 11
Bank ................................................................. 4
BANK ONE ............................................................. 10
Bank Portfolio ....................................................... 8
Benefit Plans ........................................................ 44
BIF .................................................................. 24
BOCM ................................................................. 46
Cash Advances ........................................................ 6
Cash Collateral Account .............................................. 34
Cash Collateral Guaranty ............................................. 34
Cede ................................................................. 13
Cedelbank ............................................................ 15
Cedelbank Customers .................................................. 15
Certificate Owner .................................................... 39
Certificate Rate ..................................................... 12
Certificateholder .................................................... 15
Certificateholders ................................................... 9
Chevy Chase .......................................................... 11
Class ................................................................ 9
Code ................................................................. 39
Collateral Invested Amount ........................................... 34
Collection Account ................................................... 24
Companion Series ..................................................... 19
Comptroller .......................................................... 36
Controlled Accumulation Amount ....................................... 19
Controlled Amortization Amount ....................................... 18
Controlled Amortization Period ....................................... 18
Controlled Deposit Amount ............................................ 19
Controlled Distribution Amount ....................................... 18
Cooperative .......................................................... 16
Corporation .......................................................... 29
Default Amount ....................................................... 26
Defaulted Account .................................................... 26
Defaulted Accounts ................................................... 12
Definitive Certificates .............................................. 16
Depositaries ......................................................... 14
Depository ........................................................... 13
Determination Date ................................................... 26
Disclosure Document .................................................. 20
Discount Receivable Collections ...................................... 25
Discount Receivables .............................................. 8, 25
Distribution Account ................................................. 24
Distribution Date .................................................... 17
DOJ .................................................................. 38
DOL .................................................................. 44
DTC Participants ..................................................... 14
Eligible Account ..................................................... 22
Eligible Receivable .................................................. 23
Enhancement .......................................................... 8
Enhancement Invested Amount .......................................... 33
Enhancement Percentage ............................................... 25
Enhancement Provider ................................................. 33
ERISA ................................................................ 44
Euroclear ............................................................ 16
Euroclear Operator ................................................... 16
Euroclear Participants ............................................... 16
Excess Principal Collections ......................................... 19
Exchange ............................................................. 20
Exchange Act ......................................................... 14
Exchangeable Transferor Certificate .................................. 12
FASIT ................................................................ 42
FCCM ................................................................. 46
FDIA ................................................................. 36
Final Regulation ..................................................... 44
Finance Charge Account ............................................... 24
Finance Charge Receivables ........................................... 8
FIRREA ............................................................... 36
First Commerce ....................................................... 11
First USA Financial .................................................. 10
Foreign Investors .................................................... 43
Full Invested Amount ................................................. 26
Funding Period ....................................................... 26
GE Capital ........................................................... 11
General Account Regulations .......................................... 46
Holders .............................................................. 17
Indirect Participants ................................................ 14
Ineligible Receivable ................................................ 22
Initial Closing Date ................................................. 21
Interchange .......................................................... 7
Interest Funding Account ............................................. 17
Investor Charge-Off .................................................. 27
Investor Default Amount .............................................. 26
Investor Interest ................................................ 12, 17
Investor Percentage .................................................. 12
Investor Servicing Fee ............................................... 29
IRA .................................................................. 44
IRS .................................................................. 39
John Hancock ......................................................... 45
L/C Bank ............................................................. 34
MasterCard International ............................................. 38
Merger ............................................................... 10
MGT/EOC .............................................................. 15
Minimum Aggregate Principal Receivables .............................. 8
Minimum Transferor Interest ....................................... 8, 21
Monthly Period ....................................................... 17
Moody's .............................................................. 24
Octagon .............................................................. 37
Offered Certificates ................................................. 39
OID .................................................................. 40
Original Cut-Off Date ................................................ 8
Other Charges ........................................................ 8
Pay Out Event ........................................................ 28
Periodic Finance Charges ............................................. 8
Permitted Investments ................................................ 25
Pooling and Servicing Agreement ...................................... 4
Pre-Funding Account .................................................. 26
Pre-Funding Amount ................................................... 26
Prepayable Instrument ................................................ 40
Principal Account .................................................... 24
Principal Commencement Date .......................................... 17
Principal Funding Account ............................................ 18
Principal Receivables ................................................ 8
Principal Terms ...................................................... 20
Prospectus Supplement ................................................ 4
PTE .................................................................. 45
Purchases ............................................................ 6
Qualified Institution ................................................ 24
Rapid Amortization Period ............................................ 19
Rating Agency ................................................... 20, 35
Rating Agency Condition .............................................. 11
Receivables .......................................................... 8
Record Date .......................................................... 13
Recoveries ........................................................... 7
Regulations .......................................................... 40
Remaining Redemption Amount .......................................... 41
Reserve Account ...................................................... 35
Revolving Period ..................................................... 18
Scheduled Payment Date ............................................... 17
SEC .................................................................. 14
Securities Act ....................................................... 20
Senior Certificates .................................................. 12
Series Cut-Off Dates ................................................. 21
Series Supplement .................................................... 12
Service Transfer ..................................................... 30
Servicer ............................................................. 29
Servicer Default ..................................................... 30
Special Tax Counsel .................................................. 39
Spread Account ....................................................... 35
Standard & Poor's .................................................... 24
Stated Series Termination Date ....................................... 28
Tax Opinion .......................................................... 27
Terms and Conditions ................................................. 16
Transfer Date ........................................................ 26
Transferor Amount .................................................... 12
Transferor Interest .................................................. 12
Transferor Percentage ................................................ 13
Trust ................................................................ 4
Trust Portfolio ...................................................... 9
U.S. ................................................................ 39
UCC .................................................................. 36
Unallocated Principal Collections .................................... 26
Underwriting Agreement ............................................... 46
VISA ................................................................ 38
Yield Factor ......................................................... 25
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized list of the estimated expenses to be
incurred in connection with the offering of the securities being offered
hereunder other than underwriting discounts and commissions.
Registration Fee $ 278
Printing and Engraving *
Trustee's Fees *
Legal Fees and Expenses *
Accountant's Fees and Expenses *
Rating Agency Fees *
Miscellaneous Fees *
--------------
Total *
==============
_______________
* To be supplied by amendment.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Article Tenth of the Bank's Amended and Restated Articles of
Incorporation provides that the Bank shall indemnify
every person who is or was a director, officer or employee of the Bank or
of any corporation which he served as a director, officer or employee at
the request of the Bank as part of his regularly assigned duties against
all liability (including, without limitation, judgments, fines, penalties
and settlements) and all reasonable expenses (including, without
limitation, attorneys' fees and investigative expenses) that may be
incurred or paid by him in connection with any claim, action, suit or
proceeding, whether civil, criminal or administrative (all referred to
hereafter as "claims") or in connection with any appeal relating thereto in
which he may become involved as a party or otherwise or with which he may
be threatened by reason of his being or having been a director, officer or
employee of the Bank or such other corporation, or by reason of any action
taken or omitted by him in his capacity as such director, officer or
employee, whether or not he continues to be such at the time such liability
or expenses are incurred; provided that nothing contained in Article Tenth
shall be construed to permit indemnification of any such person who is
adjudged guilty of, or liable for, willful misconduct, gross neglect of
duty or criminal acts, unless, at the time such indemnification is sought,
such indemnification in such instance is permissible under applicable law
and regulations, including published rulings of the Comptroller of the
Currency or other appropriate supervisory or regulatory authority; and
provided further that there shall be no indemnification of directors,
officers or employees against expenses, penalties or other payments
incurred in an administrative action by an individual or individuals in the
form of payments to the Bank.
Article Tenth provides that every person who may be indemnified under
the provisions of Article Tenth and who has been wholly successful on the
merits with respect to any claim shall be entitled to indemnification as of
right. Except as provided in the preceding sentence, any indemnification
under Article Tenth shall be at the sole discretion of the Board of
Directors and shall be made only if the Board of Directors or the Executive
Committee acting by a quorum consisting of directors who are not parties to
such claim shall find, or if independent legal counsel shall render their
opinion that in view of all of the circumstances then surrounding the
claim, such indemnification is equitable and in the best interest of the
Bank. In addition to such finding or opinion, no indemnification under
Article Tenth shall be made unless the Board of Directors or the Executive
Committee action by a quorum consisting of directors who are not parties to
such claim shall find, or if independent legal counsel shall render their
opinion that the directors, officer or employee acted in good faith in what
he reasonably believed to be the best interests of the Bank or such other
corporation and further in the case of any criminal action or proceeding,
that the director, officer or employee reasonably believed his conduct to
be lawful. Determination of any claim by judgment adverse to a director,
officer or employee by settlement with or without Court approval or
conviction upon a pleas of guilty or of nolo contendere or its equivalent
shall not create a presumption that a director, officer or employee failed
to meet the standards of conduct set forth in Article Tenth.
Article Tenth provides that expenses incurred with respect to any claim
may be advanced by the Bank prior to the final disposition thereof upon
receipt of an undertaking satisfactory to the Bank by or on behalf of the
recipient to repay such amount unless it is ultimately determined that he
is entitled to indemnification under Article Tenth.
Article Tenth provides that the rights to indemnification and to the
advancement of expenses conferred in Article Tenth shall be in addition to
any rights to which those seeking indemnification may be entitled by
contract or as a matter of law. Every person who shall act as a director,
officer or employee of the Bank shall be conclusively presumed to be doing
so in reliance upon the right of indemnification provided for in Article
Tenth.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
1.1 Form of Underwriting Agreement.
3.1 Amended and Restated Articles of Association of the Bank.
3.2 Bylaws of the Bank.
4.1 Pooling and Servicing Agreement and agreements as
exhibits thereto (incorporated herein by reference to
Exhibit 4.1 of Registration Statement No. 33-50600 of
First USA Bank); the first, second and third amendments
thereto (incorporated herein by reference to Exhibit 4.1
of Registration Statement No. 33-99362 of First USA
Bank); and the sixth, seventh, eighth, ninth and tenth
amendments thereto.
5.1 Opinion of Joanne K. Sundheim with respect to legality.*
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP with
respect to tax matters.*
23.1 Consent of Joanne K. Sundheim included in her opinions, filed
as Exhibit 5.1.*
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP included in
its opinions filed as Exhibit 8.1.*
99.1 Form of Prospectus Supplement.
____________________
* To be filed by amendment.
(b) Financial Statements
All financial statements, schedules and historical financial
information have been omitted as they are not applicable.
ITEM 17. UNDERTAKINGS
The undersigned Registrant on behalf of the First USA Credit Card
Master Trust (the "TRUST") hereby undertakes as follows:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "ACT"); (ii) to reflect in the prospectus
any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement; notwithstanding the foregoing, any increase or decrease in
the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; (iii) to include
any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material
change to such information in the Registration Statement; provided,
however, that clauses (a)(i) and (a)(ii) will not apply if the
information required to be included in a post-effective amendment
thereby is contained in periodic reports filed with or furnished to
the SEC pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(b) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at
the termination of the offering.
(d) That, for purposes of determining any liability under the
Act, each filing of the Trust's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(e) That insofar as indemnification for liabilities arising
under the Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under
Item 15 above, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(f) That, for purposes of determining any liability under the
Act, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) under the Act shall be deemed to be part of this
Registrant Statement as of the time it was declared effective.
(g) That, for the purpose of determining any liability under the
Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Columbus, State of Ohio, on
February 3, 1999.
FIRST USA BANK, N.A.
as Transferor and Servicer
(Registrant)
By /s/ Rebekah A. Sayers
--------------------------------
Rebekah A. Sayers
Vice President
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned does
hereby constitute and appoint George P. Hubley, Clinton W. Walker and
Rebekah A. Sayers his true and lawful attorney-in-fact and agent, each with
full power of substitution, for him and on his behalf to sign, execute and
file this Registration Statement and any or all amendments (including,
without limitation, post-effective amendments and any amendment or
amendments increasing the amount of securities for which registration is
being sought) to this Registration Statement, with all exhibits and any and
all documents required to be filed with respect thereto, with the
Securities and Exchange Commission or any regulatory authority, granting
unto such attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all
intents and purposes as he might or could do if personally present, hereby
ratifying and confirming all that such attorney-in-fact and agents may
lawfully do or cause to be done.
Pursuant to the Requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
FIRST USA BANK, N.A.
SIGNATURE TITLE
--------- -----
PRINCIPAL EXECUTIVE OFFICER:
/s/ Richard W. Vague Chairman of the Board and February 3, 1999
- -------------------------- Chief Executive Officer
Richard W. Vague
PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER:
/s/ George P. Hubley Executive Vice President February 3, 1999
- -------------------------- and Chief Financial Officer
George P. Hubley
DIRECTORS:
/s/ Randy L. Christofferson February 3, 1999
- ----------------------------
Randy L. Christofferson
/s/ Roger Deacon February 3, 1999
- --------------------------
Roger S. Deacon
/s/ George P. Hubley February 3, 1999
- --------------------------
George P. Hubley
/s/ Gary J. Marino February 3, 1999
- --------------------------
Gary J. Marino
/s/ Richard W. Vague February 3, 1999
- --------------------------
Richard W. Vague
First USA Credit Card Master Trust
Class A Floating Rate Asset Backed Certificates,
Series 1999-_
Class B Floating Rate Asset Backed Certificates,
Series 1999-_
UNDERWRITING AGREEMENT
_________ __, 1999
[Underwriter],
as Representative of the
Underwriters set forth herein
[Address]
Ladies and Gentlemen:
First USA Bank, N.A., a national banking association (the
"Bank"), has duly authorized the issuance and sale to __________________
_____________ (the "Representative"), ____________________, ______________
_____________ and ______________________ as underwriters (collectively with
the Representative, the "Underwriters" and each individually, an
"Underwriter") of First USA Credit Card Master Trust $ aggregate principal
amount of Class A Floating Rate Asset Backed Certificates, Series 1999-_
(the "Class A Certificates") and of First USA Credit Card Master Trust
$__________ aggregate principal amount of Class B Floating Rate Asset
Backed Certificates, Series 1999-_ (the "Class B Certificates" and,
together with the Class A Certificates, the "Certificates"). The
Certificates 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 Servicing Agreement"), as supplemented by the Series
1999-_ Supplement, dated as of the Closing Date (the "Supplement" and,
together with the Master Pooling and Servicing Agreement, the "Pooling and
Servicing Agreement"), each by and between the Bank, as transferor and
servicer, and The Bank of New York (Delaware), a Delaware banking
corporation, as trustee (in such capacity, the "Trustee").
Each Certificate will represent an undivided interest in
certain assets of First USA Credit Card Master Trust (the "Trust"). The
property of the Trust will include, among other things, receivables (the
"Receivables") arising under certain MasterCard(R) and VISA(R)(1) revolving
credit card accounts (the "Accounts").
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 Bank. The
Bank represents and warrants to, and agrees with, the Underwriters as
follows:
(a) The Bank has filed with the Securities and Exchange
Commission (the "Commission"), on Form S-3, a registration statement
(Registration No. 333-_______) 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 Underwriters) 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 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
registration statement, as amended at the Effective Time, and including the
exhibits thereto and any material incorporated by reference therein
(including any Computational Materials, ABS Term Sheets, Structural Term
Sheets and Collateral Term Sheets (as defined in Section 3(b) hereof)
- ------------------
(1) VISA(R) and MasterCard(R) are registered trademarks of
Visa USA Incorporated and MasterCard International Incorporated,
respectively.
filed on Form 8-K), is hereinafter referred to as the "Registration
Statement," and any prospectus 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 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 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 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 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 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 national banking association under the laws of the
United States, and has full corporate power, authority and legal right to
own its properties and conduct its business as such properties are
presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement, 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 (Delaware), a Delaware
banking corporation, not in its individual capacity but solely as Owner
Trustee on behalf of the First USA Secured Note Trust 1999-_ (in such
capacity, the "Owner Trustee").
(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.
(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 organizational
documents 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, govern-
mental body or arbitrator having jurisdiction over it, that materially and
adversely affects the ability of the Bank to perform its obligations under
this Agreement, the Pooling and Servicing Agreement, the Transfer and
Administration Agreement or the Certificates.
(k) Except as disclosed in the Base Prospectus inder the
heading "Certain Legal Aspects of the Receivables," there are no charges,
investigations, actions, suits, claims or proceedings before or by any
court, regulatory body, administrative agency, governmental body or
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.
(o) Arthur Andersen, LLP who have audited certain
financial statements of Bank One Corporation are independent public
accountants as required by the Act and the Rules and Regulations.
(p) As of the Closing Date, the Principal Receivables
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
1999-_), plus (ii) 4% 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").
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 , 1999 or on such other date as
shall be mutually agreed upon by the Bank and the Underwriters (the
"Closing Date"), the amount 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 % 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 ____% of the principal amount thereof.
The closing of the sale of the Certificates (the "Closing")
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.
3. Offering by Underwriters. (a) It is understood that
after 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 1999-_ Term Sheet, dated, _____________ __, 1999, relating to the
Certificates (the "1999-_ 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 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 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").
(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 1999-_ 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
meaning given such term in the Greenwood Letter and "Computational
Materials" shall have the meaning given such term in the No-Action
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 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 and the Rules and Regulations thereunder, 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 (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 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 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 1999-_ 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 incident
to the performance of its obligations under this Agreement, including (i)
the printing of the 1999-_ 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 1999-_ 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 $ 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:
(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 Arthur Andersen, LLP, 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 BANK 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 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 K. Sundheim, Associate General Counsel of the
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 organized and is validly existing as
a national banking association in good standing under the laws of the
United States with full power and authority (corporate 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 Re
ceivables;
(ii) 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;
(iii) 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;
(iv) This Agreement has been duly authorized, executed and
delivered by the Bank;
(v) 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 Underwriters and the filing of
Uniform Commercial Code financing statements with respect to the
Receivables;
(vi) 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
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 organizational documents 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;
(vii) 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;
(viii)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
opinion) comply as to form with the Act and the Rules and Regulations;
(ix) 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
(x) 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 Registration
Statement and Prospectus. Based upon her discussions with the Bank, its
accountants and others, however, no facts have come to her attention that
cause her 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 opinion), 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, a division
of The McGraw-Hill Companies, Inc.("Standard & Poor's"), and Fitch IBCA,
Inc. ("Fitch") 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 laws now or
hereafter in effect relating to creditors' rights generally and the
rights of creditors of national banking associations 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 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 Prospectus;
(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 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, com
pleteness or fairness of the statements contained in the Prospectus and
shall have made no independent check or 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) The Supplement has been duly authorized,
executed and delivered by the Trustee, and the Pooling and Servicing
Agreement 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 performance by the Trustee of its obligations
under the Pooling and Servicing 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 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 performance by the Trustee of its obligations
under the Pooling and Servicing 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 Trustee, except such as have been obtained, taken or made.
(j) Richards, Layton & Finger, counsel for First USA
Secured Note Trust 1999-_ (the "Owner Trust") in connection with the
Transfer and Administration Agreement and the Indenture dated as of the
Closing Date, between the Owner Trust and The Bank of New York, as
indenture 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) 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 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, dated as of
________________ __, 1999 (the "trust Agreement"), between the Bank and the
Owner 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) 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 realiza tion 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
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 Representative shall have received evidence
satisfactory to the Representative and its counsel that, on or before the
Closing Date, 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.
(m) The Class A Certificates shall be rated "AAA" by
Standard & Poor's, "Aaa" by Moody's and "AAA" by Fitch and the Class B
Certificates shall be rated at least "A" by Standard & Poor's, at least
"A2" by Moody's and at least "A+" by Fitch on the Closing Date, and letters
to such effect dated the Closing Date shall have been received from each
Rating Agency.
(n) 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 or supplement thereto or any related preliminary pro-
spectus, 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 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 indemnified 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 rea sonable costs of investigation. No
indemnifying party shall, without the prior written consent of the indemni-
fied 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 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 liabili ties referred to in subsection (a) or
(b) above (i) in such proportion as is appropriate to reflect the rela tive
benefits received by the Bank on the one hand and the respective
Underwriter on the other from the offer ing 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 re sulted 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 informa tion and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemni fied 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 contrib ute 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 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 certifi cate 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 hereto fore or hereafter made by or on behalf of the Bank or
the Underwriters, and that the respective representa tions, 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 Under writer shall have
the right, within 24 hours thereafter, to make arrangements for one or more
of the non-default ing Underwriters, or any other underwriter, 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 not have completed such arrangements within such
24-hour period, then:
(a) if the aggregate amount of Defaulted Securi ties 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 pur chase 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 Agree ment 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 post pone 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
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 trans mitted by
telex, telegraph or telecopier and confirmed by a similar mailed writing,
if to (a) the Underwriters, addressed to ,
Attention: , 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: Joanne K. Sundheim, Senior Vice President and
Associate General Counsel, telephone: (302) 434-7677, telecopier: (302)
884-8361, with a copy to Bank 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 Certifi cates 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.
15. Severability of Provisions. Any cove nant, provision,
agreement or term of this Agreement that is prohibited or is held to be
void or unenforce able 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.
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, N.A.,
as Transferor and Servicer
By:_____________________________
Name:
Title:
The foregoing Underwriting Agreement
is hereby agreed to as of the date
first above written.
[Underwriter],
for itself and as Representative
of the Underwriters named in
Schedule A hereto
By:____________________________
Name:
Title:
SCHEDULE A
Aggregate Principal
Amount of the Class A
Underwriter Certificates
Total . . . . . . . . $
===================
Aggregate Principal
Amount of the Class B
Underwriter Certificates
Total . . . . . . . . $
====================
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
FIRST USA BANK, NATIONAL ASSOCIATION
FIRST. The title of this Association shall be FIRST USA BANK, NATIONAL
ASSOCIATION.
SECOND. The main office of the Association shall be in the City of
Wilmington, County of New Castle, State of Delaware.
The general business of the association shall be conducted at its main
office and its branches.
THIRD. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five persons, the exact number to be
fixed and determined from time to time by resolution of a majority of the
full Board of Directors or by resolution of a majority of the shareholders
at any annual or special meeting thereof. Each director shall own common
or preferred stock of the Association, or of a holding company owning the
Association, with an aggregate par, fair market or equity value of not less
than $1,000, as of either (i) the date of purchase, (ii) the date the
person became a director, or (iii) the date of that person's most election
to the Board of Directors, whichever is more recent. Any combination of
common or preferred stock of the Association or holding company may be
used.
Any vacancy in the Board of Directors may be filled by action of a majority
of the remaining directors between meetings of shareholders. The Board of
Directors may not increase the number of directors between meetings of
shareholders to a number which: (1) exceeds by more than two the number of
directors last elected by shareholders where the number was 15 or less; or
(2) exceeds by more than four the number of directors last elected by
shareholders where the number was 16 or more, but in no event shall the
number of directors exceed 25.
Terms of directors, including directors selected to fill vacancies, shall
expire at the next regular meeting of shareholders at which directors are
elected, unless the directors resign or are removed from office.
Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there
is a decrease in the number of directors and his or her position is
eliminated.
Honorary or advisory members of the Board of Directors, without voting
power or power of final decision in matters concerning the business of the
Association, may be appointed by resolution of a majority of the full Board
of Directors, or by resolution of shareholders at any annual or special
meeting. Honorary, or advisory directors shall not be counted to determine
the number of directors of the Association or the presence of a quorum in
connection with any board action, and shall not be required to own
qualifying shares.
FOURTH. There shall be an annual meeting of the shareholders to elect
directors and transact whatever other business may be brought before the
meeting. It shall be held at the main office or any other convenient place
the Board of Directors may designate, on the day of each year specified
therefor in the Bylaws or, if that day falls on a legal holiday in the
state in which the Association is located, on the n6xt following banking
day. If no election is held on the day fixed or in the event of a legal
holiday on the following banking day, an election may be held on any
subsequent day within 60 days of the day fixed, to be designated by the
Board of Directors or, if the directors fail to fix the day, by
shareholders representing two-thirds of the shares issued and outstanding.
In all cases at least 10 days advance notice of the meeting shall be given
to the shareholders by first class mail.
In all elections of directors, the number of votes each common shareholder
may cast will be determined by multiplying the number of shares such
shareholder owns by the number of directors to be elected. Those votes may
be cumulated and cast for a single candidate or may be distributed among
two or more candidates in the manner selected by the shareholder. On all
other questions, each common shareholder shall be entitled to one vote for
each share of stock held by such shareholder. If the issuance of preferred
stock with voting rights has been authorized by a vote of shareholders
owning a majority of the common stock of the Association, preferred
shareholders will have cumulative voting rights and will be included within
the same class as common shareholders, for purposes of elections of
directors.
A director may resign at any time by delivering written notice to the Board
of Directors, its chairperson, or to the Association, which resignation
shall be effective when the notice is delivered unless the notice specifies
a later effective date.
A director may be removed by shareholders at a meeting called to remove him
or her, when notice of the meeting stating that the purpose or one of the
purposes is to remove him or her is provided, if there is a failure to
fulfill one of the affirmative requirements for qualification, or for
cause, provided, however, that a director may not be removed if the number
of votes sufficient to elect him or her under cumulative voting is voted
against his or her removal.
FIFTH. The authorized amount of capital stock of this Association shall be
one hundred twenty-five thousand (125,000) shares of common stock of the
par value of one hundred dollars ($100.00) each; but said capital stock may
be increased or decreased from time to time, according to the provisions of
the laws of the United States.
No holder of shares of the capital stock of any class of the Association
shall have any preemptive or preferential right of subscription to any
shares of any class of stock of the Association, whether now or hereafter
authorized, or to any obligations convertible into stock of the
Association, issued or sold, nor any right of subscription to any thereof
other than such, if any, as the Board of Directors, in its discretion, may
from time to time determine and at such price as the Board of Directors may
from time to time fix.
Unless otherwise specified in the Articles of Association or required by
law, (1) all matters requiring shareholder action, including amendments to
the Articles of Association, must be approved by shareholders owning a
majority voting interest in the outstanding voting stock, and (2) each
shareholder shall be entitled to one vote per share.
Unless otherwise specified in the Articles of Association or required by
law, all shares of voting stock shall be voted together as a class on any
matters requiring shareholder approval. If a proposed amendment would
affect two or more classes or series in the same or a substantially similar
way, all the classes or series so affected must vote together as a single
voting group on the proposed amendment.
Shares of the same class or series may be issued as a dividend on a pro
rata basis and without consideration. Shares of another class or series
may be issued as share dividends in respect of a class or series of stock
if approved by a majority of the votes entitled to be cast by the class or
series to be issued unless there are no outstanding shares of the class or
series to be issued. Unless otherwise provided by the Board of Directors,
the record date for determining shareholders entitled to a share dividend
shall be the date the Board of Directors authorizes the share dividend.
Unless otherwise provided in the Bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close
of business on the day before the first notice is mailed or otherwise sent
to the shareholders, provided that in no event may a record date be more
than 70 days before the meeting.
If a shareholder is entitled to fractional shares pursuant to preemptive
rights, a stock dividend, consolidation or merger, reverse stock split or
otherwise, the Association may: (a) issue fractional shares or; (b) in lieu
of the issuance of fractional shares, issue script or warrants entitling
the holder to receive a full share upon surrendering enough script or
warrants to equal a full share; (c) if there is an established and active
market in the Association's stock, make reasonable arrangements to provide
the shareholder with an opportunity to realize a fair price through sale of
the fraction, or purchase of the additional fraction required for a full
share; (d) remit the cash equivalent of the fraction to the shareholder, or
(e) sell full shares representing all the fractions at public auction or to
the highest bidder after having solicited and received sealed bids from at
least three licensed stock brokers, and distribute the proceeds pro rata to
shareholders who otherwise would be entitled to the fractional shares. The
holder of a fractional share is entitled to exercise the rights of a
shareholder, including the right to vote, to receive dividends, and to
participate in the assets of the Association upon liquidation, in
proportion to the fractional interest. The holder of script or warrants is
not entitled to any of these rights unless the script or warrants
explicitly provide for such rights. The script or warrants may be subject
to such additional conditions as: (1) that the script or warrants will
become void if not exchanged for full shares before a specified date; and
(2) that the shares for which the script or warrants are exchangeable may
be sold at the option of the Association and the proceeds paid to
scriptholders.
The Association, at any time and from time to time, may authorize and issue
debt obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt whether or not subordinated,
which may be issued by the Association without the approval of
shareholders, do not carry voting rights on any issue, including an
increase or decrease in the aggregate number of the securities, or the
exchange or reclassification of all or part of securities into securities
of another class or series.
SIXTH. The Board of Directors shall appoint one of its members president of
this Association, and one of its members chairperson of the board and shall
have the power to appoint one or more vice presidents, a secretary who
shall keep minutes of the directors' and shareholders' meetings and be
responsible for authenticating the records of the Association, and such
other officers and employees as may be required to transact the business of
this Association. A duly appointed officer may appoint one or more
officers or assistant officers if authorized by the Board of Directors in
accordance with the Bylaws.
The Board of Directors shall have the power to:
(1) Define the duties of the officers, employees, and agents of the
Association.
(2) Delegate the performance of its duties, but not the responsibility for
its duties, to the officers, employees, and agents of the Association.
(3) Fix the compensation and enter into employment contracts with its
officers and employees upon reasonable terms and conditions consistent
with applicable law.
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and to fix the penalty
thereof.
(6) Ratify written policies authorized by the Association's management or
committees of the Board of Directors.
(7) Regulate the manner in which any increase or decrease of the capital
of the Association shall be made, provided that nothing herein shall
restrict the power of shareholders to increase or decrease the capital
of the Association in accordance with law, and nothing shall raise or
lower from two-thirds the percentage for shareholder approval to
increase or reduce the capital.
(8) Manage and administer the business and affairs of the Association.
(9) Adopt initial Bylaws, not inconsistent with law or the Articles of
Association, for managing the business and regulating the affairs of
the Association.
(10) Amend or repeal Bylaws, except to the extent that the Articles of
Association reserve this power in whole or in part to shareholders.
(11) Make contracts.
(12) Generally perform all acts that are legal for a Board of Directors to
perform.
SEVENTH. The Board of Directors shall have the power to change the
location of the main office of this Association to any other place within
the limits of the City of Wilmington, State of Delaware, without the
approval of the shareholders; and shall have the power to change the
location of the main office of this Association to any other place outside
the limits of the City of Wilmington, State of Delaware, but not more than
thirty miles beyond such limits, with the affirmative vote of shareholders
owning two-thirds of the stock of the Association, subject to receipt of a
certificate of approval from the Comptroller of the Currency. The Board of
Directors shall have the power to establish or change the location of any
branch or branches of the Association to any other location permitted under
applicable law without the approval of the shareholders, subject to
approval by the Office of the Comptroller of the Currency. The Board of
Directors shall have the power to establish or change the location of any
nonbranch office or facility of the Association without the approval of the
shareholders.
EIGHTH. The corporate existence of this Association shall continue until
termination according to the laws of the United States.
NINTH. The Board of Directors of this Association, or any shareholders
owning, in the aggregate, not less than 20 percent of the stock of this
Association, may call a special meeting of shareholders at any time.
Unless otherwise provided by the Bylaws or the laws of the United States,
or waived by shareholders, a notice of the time, place, and purpose of
every annual and special meeting of the shareholders shall be given by
first-class mail, postage Prepaid, mailed at least 10, and no more than
60, days prior to the date of the meeting to each shareholder of record at
his/her address as shown upon the books of this Association. Unless
otherwise provided by the Bylaws, any action requiring approval of
shareholders must be effected at a duly called annual or special meeting.
TENTH. The Association shall provide indemnification as set forth below:
Every person who is or was a director, officer or employee of the
Association or of any other corporation which he served as a director,
officer or employee at the request of the Association as part of his
regularly assigned duties may be indemnified by the Association in
accordance with the provisions of this Article against all liability
(including, without limitation, judgments, fines, penalties, and
settlements) and all reasonable expenses (including, without limitation,
attorneys' fees and investigative expenses) that may be incurred or paid by
him in connection with any claim, action, suit or proceeding, whether
civil, criminal or administrative (all referred to hereafter in this
Article as "Claims") or in connection with any appeal relating thereto in
which he may become involved as a party or otherwise or with which he may
be threatened by reason of his being or having been a director, officer or
employee of the Association or such other corporation, or by reason of any
action taken or omitted by him in his capacity as such director, officer or
employee, whether or not he continues to be such at the time such liability
or expenses are incurred; provided that nothing contained in this Article
shall be construed to permit indemnification of any such person who is
adjudged guilty of, or liable for, willful misconduct, gross neglect of
duty or criminal acts, unless, at the time such indemnification is sought,
such indemnification in such instance is permissible under applicable law
and regulations, including published filings of the Comptroller of the
Currency or other appropriate supervisory or regulatory authority, and
provided further that there shall be no indemnification of directors,
officers, or employees against expenses, penalties, or other payments
incurred in an administrative proceeding or action instituted by an
appropriate regulatory agency which proceeding or action results in a final
order assessing civil money penalties or requiring affirmative action by an
individual or individuals in the form of payments to the Association.
Every person who may be indemnified under the provisions of this Article
and who has been wholly successful on the merits with respect to any Claim
shall be entitled to indemnification as of right. Except as provided in
the preceding sentence, any indemnification under this Article shall be at
the sole discretion of the Board of Directors and shall be made only if the
Board of Directors or the Executive Committee acting by a quorum consisting
of directors who are not parties to such Claim shall find or if independent
legal counsel (who may be the regular counsel of the Association) selected
by the Board of Directors or Executive Committee whether or not a
disinterested quorum exists shall render their opinion that in view of all
of the circumstances then surrounding the Claim, such indemnification is
equitable and in the best interests of the Association. Among the
circumstances to be taken into consideration in arriving at such a finding
or opinion is the existence or non-existence of a contract of insurance or
indemnity under which the Association world be wholly or partially
reimbursed for such indemnification, but the existence or non-existence of
such insurance is not the sole circumstance to be considered nor shall it
be wholly determinative of whether such indemnification shall be made. In
addition to such finding or opinion, no indemnification under this Article
shall be made unless the Board of Directors or the Executive Committee
acting by a quorum consisting of directors who are not parties to such
Claim shall find or if independent legal counsel (who may be the regular
counsel of the Association) selected by the Board of Directors or Executive
Committee whether or not a disinterested quorum exists shall render their
opinion that the directors, officer or employee acted in good faith in what
he reasonably believed to be the best interests of the Association or such
other corporation and further in the case of any criminal action or
proceeding, that the director, officer or employee reasonably believed his
conduct to be lawful. Determination of any Claim by judgment adverse to a
director, officer or employee by settlement with or without Court approval
or conviction upon a plea of guilty or of nolo contendere or its equivalent
shall not create a presumption that a director, officer or employee failed
to meet the standards of conduct set forth in this Article. Expenses
incurred with respect to any Claim may be advanced by the Association prior
to the final disposition thereof upon receipt of an undertaking
satisfactory to the Association by or on behalf of the recipient to repay
such amount unless it is ultimately determined that he is entitled to
indemnification under this Article.
The rights of indemnification provided in this Article shall be in addition
to any rights to which any director, officer or employee may otherwise be
entitled by contract or as a matter of law. Every person who shall act as
a director, officer or employee of this Association shall be conclusively
presumed to be doing so in reliance upon the right of indemnification
provided for in this Article.
ELEVENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders
of a majority of the stock of this Association, unless the vote of the
holders of a greater amount of stock is required by law, and in that case
by the vote of the holders of such greater amount. The Association's Board
of Directors may propose one or more amendments to the Articles of
Association for submission to the shareholders.
In witness whereof, we have hereunto set our hands this 4th day of June,
1998.
/s/ Richard Vague
-------------------------------
Richard Vague, Director
/s/ Randy Christofferson
-------------------------------
Randy Christofferson, Director
/s/ Gary Marino
-------------------------------
Gary Marino, Director
/s/ George Hubley
-------------------------------
George Hubley, Director
/s/ Roger Deacon
-------------------------------
Roger Deacon, Director
FIRST USA BANK
BY-LAWS
ARTICLE I - STOCKHOLDERS
Section 1. Annual Meeting.
An annual meeting of the stockholders, for the election of
directors to succeed those whose terms expire and for the transaction of
such other business as may properly come before the meeting, shall be held
in Delaware at such place, on such date, and at such time as the Board of
Directors shall each year fix, which date shall be within thirteen (13)
months subsequent to the later of the date of incorporation or the last
annual meeting of stockholders.
Section 2. Special Meetings.
Special meetings of the stockholders, for any purpose or purposes
prescribed in the notice of the meeting, may be called by the Board of
Directors or the chief executive officer and shall be held in Delaware at
such place, on such date, and at such time as they or he or she shall fix.
Section 3. Notice of Meetings.
Written notice of the Delaware location, date, and time of all
meetings of the stockholders shall be given, not less than ten (10) nor
more than sixty (60) days before the date on which the meeting is to be
held, to each stockholder entitled to vote at such meeting, except as
otherwise provided herein or required by law (meaning, here and
hereinafter, as required from time to time by the laws of the State of
Delaware or the Articles of Association of Lomas Bank Delaware (the
"Bank").
When a meeting is adjourned to another Delaware location, date or
time, written notice need not be given of the adjourned meeting if the
place, date and time thereof are announced at the meeting at which the
adjournment is taken; provided, however, that if the date of any adjourned
meeting is more than thirty (30) days after the date for which the meeting
was originally noticed, or if a new record date is fixed for the adjourned
meeting, written notice of the place, date, and time of the adjourned
meeting shall be given in conformity herewith. At any adjourned meeting,
any business may be transacted which might have been transacted at the
original meeting.
Section 4. Quorum.
At any meeting of the stockholders, the holders of a majority of
all of the shares of the stock entitled to vote at the meeting, present in
person or by proxy, shall constitute a quorum for all purposes, unless or
except to the extent that the presence of a larger number may be required
by law. Where a separate vote by a class or classes is required, a
majority of the shares of such class or classes present in person or
represented by proxy shall constitute a quorum entitled to take action with
respect to that vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the shares of stock entitled to
vote who are present, in person or by proxy, may adjourn the meeting to
another place, date, or time.
If a notice of any adjourned special meeting of stockholders is
sent to all stockholders entitled- to vote thereat, stating that it will be
held with those present constituting a quorum, then except as otherwise
required by law, those present at such adjourned meeting shall constitute a
quorum, and all matters shall be determined by a majority of the votes cast
at such meeting.
Section 5. Organization.
Such person as the Board of Directors may have designated or, in
the absence of such a person, the chief executive officer of the Bank or,
in his or her absence, such person as may be chosen by the holders of a
majority of the shares entitled to vote who are present, in person or by
proxy, shall call to order any meeting of the stockholders and act as
chairman of the meeting. In the absence of the Secretary of the Bank, the
secretary of the meeting shall be such person as the chairman appoints.
Section 6. Conduct of Business.
The chairman of any meeting of stockholders shall determine the
order of business and the procedure at the meeting, including such
regulation of the manner of voting and the conduct of discussion as seem to
him or her in order.
Section 7. Proxies and Voting.
At any meeting of the stockholders, every stockholder entitled to
vote may vote in person or by proxy authorized by an instrument in writing
filed in accordance with the procedure established for the meeting.
Each stockholder shall have one (1) vote for every share of stock
entitled to vote which is registered in his or her name on the record date
for the meeting, except as otherwise provided herein or required by law.
All voting, including on the election of directors but excepting
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefore by a stockholder entitled to vote or by his or
her proxy, a stock vote shall be taken. Every stock vote shall be taken by
ballots, each of which shall state the name of the stockholder or proxy
voting and such other information as may be required under the procedure
established for the meeting. Every vote taken by ballots shall be counted
by an inspector or inspectors appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes
cast, and except as otherwise required by law, all other matters shall be
determined by a majority of the votes cast.
Section 8. Consent of Stockholders in Lieu of Meeting.
Any action required to be taken at any annual or special meeting
of stockholders of the Bank, or any action which may be taken at any annual
or special meeting of the stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the holders
of outstanding stock having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and shall be
delivered to the Bank by delivery to its registered office in Delaware, its
principal place of business, or an officer or agent of the Bank having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Bank's registered office shall be made by
hand or by certified or registered mail, return receipt requested.
Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective
to take the corporate action referred to therein unless, within sixty (60)
days of the date the earliest dated consent is delivered to the Bank, a
written consent or consents signed by a sufficient number of holders to
take action are delivered to the Bank in the manner prescribed in the first
paragraph of this Section.
ARTICLE II - BOARD OF DIRECTORS
Section 1. Number and Term of Office.
The number of directors who shall constitute the whole Board
shall be such number as the Board of Directors shall from time to time have
designated, provided that the number of directors shall not be less than
five. Each director shall be elected for a term of one year and until his
or her successor is elected and qualified, except as otherwise provided
herein or required by law.
The initial members of the Board of Directors of the corporation,
including the Chairman of the Board, shall be elected by the majority vote
of the incorporators of the corporation, who shall consider the matter at
the organization meeting of incorporators. Such directors shall hold
office until the first annual meeting of the stockholders and until their
successors have been duly elected and qualified.
Whenever the authorized number of directors is increased between
annual meetings of the stockholders, a majority of the directors then in
office shall have the power to elect such new directors for the balance of
a term and until their successors are elected and qualified. Any decrease
in the authorized number of directors shall not become effective until the
expiration of the term of the directors then in office unless, at the time
of such decrease, there shall be vacancies on the board which are being
eliminated by the decrease.
Section 2. Vacancies.
If the office of any director becomes vacant by reason of death,
resignation, disqualification, removal or other cause, a majority of the
directors remaining in office, although less than a quorum, may elect a
successor for the unexpired term and until his or her successor is elected
and qualified.
Section 3. Regular Meetings.
Regular meetings of the Board of Directors shall be held at such
place or places, on such date or dates, and at such time or times as shall
have been established by the Board of Directors and publicized among all
directors. A notice of each regular meeting shall not be required.
Section 4. Special Meetings.
Special meetings of the Board of Directors may be called by one-
third (1/3) of the directors then in office (rounded up to the nearest
whole number) or by the chief executive officer and shall be held at such
place, on such date, and at such time as they or he or she shall fix.
Notice of the place, date, and time of each such special meeting shall be
given each director by whom it is not waived by mailing written notice not
less than five (5) days before the meeting or by telegraphing or telexing
or by facsimile transmission of the same not less than twenty-four (24)
hours before the meeting. Unless otherwise indicated in the notice
thereof, any and all business may be transacted at a special meeting.
Section 5. Quorum.
At any meeting of the Board of Directors, a majority of the total
number of the whole Board shall constitute a quorum for all purposes. If a
quorum shall fail to attend any meeting, a majority of those present may
adjourn the meeting to another place, date, or time, without further notice
or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
Members of the Board of Directors, or of any committee thereof,
may participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other and such
participation shall constitute presence in person at such meeting.
Section 7. Conduct of Business.
At any meeting of the Board of Directors, business shall be
transacted in such order and manner as the Board may from time to time
determine, and all matters shall be determined by the vote of a majority of
the directors present, except as otherwise provided herein or required by
law. Action may be taken by the Board of Directors without a meeting if all
members thereof consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors.
Section 8. Powers.
The Board of Directors may, except as otherwise required by law,
exercise all such powers and do all such acts and things as may be
exercised or done by the Bank, including, without limiting the generality
of the foregoing, the unqualified power:
(1) To declare dividends from time to time in accordance
with law;
(2) To purchase or otherwise acquire any property, rights
or privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such
form as it may determine, of written obligations of every kind,
negotiable or non-negotiable, secured or unsecured, and to do all
things necessary in connection therewith;
(4) To remove any officer of the Bank with or without
cause, and from time to time to devolve the powers and duties of any
officer upon any other person for the time being;
(5) To confer upon any officer of the Bank the power to
appoint, remove and suspend subordinate officers, employees and
agents;
(6) To adopt from time to time such stock, option, stock
purchase, bonus or other compensation plans for directors, officers,
employees and agents of the Corporation and its subsidiaries as it may
determine;
(7) To adopt from time to time such insurance, retirement,
and other benefit plans for directors, officers, employees and agents
of the Bank and its subsidiaries as it may determine; and,
(8) To adopt from time to time regulations, not
inconsistent with these By-laws, for the management of the Bank's
business and affairs.
Section 9. Compensation of Directors.
Directors, as such, may receive, pursuant to resolution of the
Board of Directors, fixed fees and other compensation for their services as
directors, including, without limitation, their services as members of
committees of the Board of Directors.
ARTICLE III - COMMITTEES
Section 1. Committees of the Board of Directors.
The Board of Directors, by a vote of a majority of the whole
Board, may from time to time designate committees of the Board, with such
lawfully delegable powers and duties as it thereby confers, to serve at the
pleasure of the Board and shall, for those committees and any others
provided for herein, elect a director or directors to serve as the member
or members, designating, if it desires, other directors as alternate
members who may replace any absent or disqualified member at any meeting of
the committee. Any committee so designated may exercise the power and
authority of the Board of Directors to declare a dividend, to authorize the
issuance of stock or to adopt a certificate of ownership and merger
pursuant to Delaware law if the resolution which designates the committee
or a supplemental resolution of the Board of Directors shall so provide.
In the absence or disqualification of any member of any committee and any
alternate member in his or her place, the member or members of the
committee present at the meeting and not disqualified from voting, whether
or not he or she or they constitute a quorum, may by unanimous vote appoint
another member of the Board of Directors to act at the meeting in the place
of the absent or disqualified member.
Section 2. Conduct of Business.
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be
made for notice to members of all meetings; one-third (1/3) of the members
shall constitute a quorum unless the committee shall consist of one (1) or
two (2) members, in which event one (1) member shall constitute a quorum;
and all matters shall be determined by a majority vote of the members
present. Action may be taken by any committee without a meeting if all
members thereof consent thereto in writing, and the writing or writings are
filed with the minutes of the proceedings of such committee.
ARTICLE IV - OFFICERS
Section 1. Generally.
The officers of the Bank shall consist of a Chairman of the
Board, President, one or more Vice Presidents (any one or more of whom may
be designated Executive Vice Presidents or Senior Vice Presidents), a
Secretary, a Treasurer, Controller and such other officers as may from time
to time be appointed by the Board Of Directors. Officers shall be elected
by the Board of Directors, which shall consider that subject at its first
meeting after every annual meeting of stockholders. Each officer shall
hold office until his or her successor is elected and qualified or until
his or her earlier resignation or removal. Any number of offices may be
held by the same person. Any vacancies occurring in officer positions may
be filled at any regular or special meeting of the Board of Directors.
The compensation of officers required by this section to be
elected or appointed by the Board of Directors shall be fixed by the Board
of Directors. The compensation of other officers shall be fixed either by
the Board of Directors or by the President. Each officer shall be sworn to
the faithful performance of his duties. In the absence of the Chairman of
the Board, the President shall preside at meetings of the Board of
Directors.
Section 2. Chairman of the Board.
The Chairman of the Board shall, subject to the control of the
Board of Directors, have general supervision, direction and control of the
business affairs of the Corporation. The Chairman shall preside at all
meetings of stockholders. The Chairman shall have the general powers and
duties usually rested in the office of Chairman of the Board of a bank, and
shall have such other powers and duties as may be prescribed by the Board
of Directors. If no Chairman of the Board is elected, then the President
shall have such powers and duties.
Section 3. President.
The President shall be the chief executive officer of the Bank.
Subject to the provisions of these By-laws and to the direction of the
Board of Directors, he or she shall have the responsibility for the general
management and control of the business and affairs of the Bank and shall
perform all duties and have all powers which are commonly incident to the
office of chief executive or which are delegated to him or her by the Board
of Directors. He or she shall have power to sign all stock certificates,
contracts and other instruments of the Bank which are authorized and shall
have general supervision and direction of all of the other officers,
employees and agents of the Bank.
Section 4. Vice President.
Each Vice President shall have such powers and duties as may be
delegated to him or her by the Board of Directors. One (1) Vice President
shall be designated by the Board to perform the duties and exercise the
powers of the President in the event of the President's absence or
disability.
Section 5. Treasurer.
The Treasurer shall have the responsibility for maintaining the
financial records of the Bank. He or she shall make such disbursements of
the funds of the Bank as are authorized and shall render from time to time
an account of all such transactions and of the financial condition of the
Bank. The Treasurer shall also perform such other duties as the Board of
Directors may from time to time prescribe.
Section 6. Secretary.
The Secretary shall issue all authorized notices for, and shall
keep minutes of, all meetings of the stockholders and the Board of
Directors. He or she may sign, with other authorized officers, all
contracts, instruments or documents in the name of the corporation and may
affix or cause to be affixed thereto the Seal of Bank, of which he or she
shall be the custodian. He or she shall have charge of the corporate books
and shall perform such other duties as the Board of Directors may from time
to time prescribe.
Section 7. Controller.
The Controller shall exercise general supervision over, and be
responsible for, the operation of all matters pertaining to the accounting
and bookkeeping of the corporation and shall have such further duties as
the President shall assign to him or her. He or she shall render to the
Board of Directors and the President condensed monthly statements of the
condition of the corporation and of its operating results and shall prepare
such other statements and reports as the President may request.
Section 8. Delegation of Authority.
The Board of Directors may from time to time delegate the powers
or duties of any officer to any other officers or agents, notwithstanding
any provision hereof.
Section 9. Removal.
Any officer of the Bank may be removed at any time, with or
without cause, by the Board of Directors.
Section 10. Action with Respect to Securities of Other Banks.
Unless otherwise directed by the Board of Directors, the
President or any officer of the Bank authorized by the President shall have
power to vote and otherwise act on behalf of the Bank, in person or by
proxy, at any meeting of stockholders of or with respect to any action of
stockholders of any other corporation in which this Bank may hold
securities and otherwise to exercise any and all rights and powers which
this Bank may possess by reason of its ownership of securities in such
other corporation.
ARTICLE V - STOCK
Section 1. Certificates of Stock.
Each stockholder shall be entitled to a certificate signed by,
or. in the name of the Bank by, the President or a Vice President, and by
the Secretary or an Assistant Secretary, or the Treasurer or an Assistant
Treasurer, certifying the number of shares owned by him or her. Any or all
of the signatures on the certificate may be by facsimile.
Section 2. Transfers of Stock.
Transfers of stock shall be made only upon the transfer books of
the Bank kept at an office of the Bank or by transfer agents designated to
transfer shares of the stock of the Bank. Except where a certificate is
issued in accordance with Section 4 of Article V of these By-laws, an
outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.
Section 3. Record Date.
In order that the Bank may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment
of any dividend or other distribution or allotment of any rights or to
exercise any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the Board of Directors
may fix a record date, which record date shall not precede the date on
which the resolution fixing the record date is adopted and which record
date shall not be more than sixty (60) nor less than twenty (20) days
before the date of any meeting of stockholders, nor more than sixty (60)
days prior to the time for such other action as hereinbefore described;
provided, however, that if no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the day next preceding the
day on which the meeting is held, and, for determining stockholders
entitled to receive payment of any dividend or other distribution or
allotment of rights or to exercise any rights of change, conversion or
exchange of stock or for any other purpose, the record date shall be at the
close of business on the day on which the Board of Directors adopts a
resolution relating thereto.
A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
In order that the Bank may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of
Directors may fix a record date, which shall not precede the date upon
which the resolution fixing the record date is adopted by the Board of
Directors, and which record date shall be not more than ten (10) days after
the date upon which the resolution fixing the record date is adopted. If
no record date has been fixed by the Board of Directors and no prior action
by the Board of Directors is required under Delaware law, the record date
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Bank in the manner
prescribed by Article 1, Section 8 hereof. If no record date has been fixed
by the Board of Directors and prior action by the Board of Directors is
required by Delaware law with respect to the proposed action by written
consent of the stockholders, the record date for determining stockholders
entitled to consent to corporate action in writing shall be at the close of
business on the day on which the Board of Directors adopts the resolution
taking such prior action.
Section 4. Lost, Stolen or Destroyed Certificates.
In the event of the loss, theft or destruction of any certificate
of stock, another may be issued in its place pursuant to such regulations
as the Board of Directors may establish concerning proof of such loss,
theft or destruction and concerning the giving of a satisfactory bond or
bonds of indemnity.
Section 5. Regulations.
The issue, transfer, conversion and registration of certificates
of stock shall be governed by such other regulations as the Board of
Directors may establish.
ARTICLE VI - NOTICES
Section 1. Notices.
Except as otherwise specifically provided herein or required by
law, all notices required to be given to any stockholder, director,
officer, employee or agent shall be in writing and may in every instance be
effectively given by hand delivery to the recipient thereof, by depositing
such notice in the mails, postage paid, or by sending such notice by
prepaid telegram or mailgram. Any such notice shall be addressed to such
stockholder, director, officer, employee or agent at his or her last known
address as the same appears an the books of the Bank. The time when such
notice is received, if hand delivered, or dispatched, if delivered through
the mails or by telegram or mailgram, shall be the time of the giving of
the notice.
Section 2. Waivers.
A written waiver of any notice, signed by a stockholder,
director, officer, employee or agent, whether before or after the time of
the event for which notice is to be given, shall be deemed equivalent to
the notice required to be given to such stockholder, director, officer,
employee or agent. Neither the business nor the purpose of any meeting
need be specified in such a waiver.
ARTICLE VII - MISCELLANEOUS
Section 1. Facsimile Signatures.
In addition to the provisions for use of facsimile signatures
elsewhere specifically authorized in these By-laws, facsimile signatures of
any officer or officers of the Bank may be used whenever and as authorized
by the Board of Directors or a committee thereof.
Section 2. Corporate Seal.
The Board of Directors may provide a suitable seal, containing
the name of the Bank, which seal shall be in the charge of the Secretary.
If and when so directed by the Board of Directors or a committee thereof,
duplicates of the seal may be kept and used by the Treasurer or by an
Assistant Secretary or Assistant Treasurer.
Section 3. Reliance upon Books, Reports and Records.
Each director, each member of any committee designated by the
Board of Directors, and each officer of the Bank shall, in the performance
of his or her duties, be fully protected in relying in good faith upon the
books of account or other records of the Bank and upon such information,
opinions, reports or statements presented to the Bank by any of its
officers or employees, or committees of the Board of Directors so
designated, or by any other person as to matters which such director or
committee member reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Bank.
Section 4. Fiscal Year.
The fiscal year of the Bank shall be as fixed by the Board of
Directors.
Section 5. Time Periods.
In applying any provision of these By-laws which requires that an
act be done or not be done a specified number of days prior to an event or
that an act be done during a period of a specified number of days prior to
an event, calendar days shall be used, the day of the doing of the act
shall be excluded, and the day of the event shall be included.
ARTICLE VIII - INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. Right to Indemnification.
Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director or
an officer of the Bank or is or was serving at the request of the Bank as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"),
whether the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee or agent or in any other
capacity, while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Bank to the fullest extent authorized
by Delaware law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment
permits the Bank to provide broader indemnification rights than such law
permitted the Bank to provide prior to such amendment), against all
expense, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith; provided,
however, that, except as provided in Section 3 of this ARTICLE VIII with
respect to proceedings to enforce rights to indemnification, the Bank shall
indemnify any such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Bank.
Section 2. Right to Advancement of Expenses.
The right to indemnification conferred in Section 1 of this
ARTICLE VIII shall include the right to be paid by the Bank the expenses
incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses"); provided, however,
that, if Delaware law requires, an advancement of expenses incurred by an
indemnitee in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall
be made only upon delivery to the Bank of an undertaking (hereinafter an
"Undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision
from which there is no further right to appeal (hereinafter a "final
adjudication") that such indemnitee is not entitled to be indemnified for
such expenses under this Section 2 or otherwise. The rights to
indemnification and to the advancement of expenses conferred in Sections 1
and 2 of this ARTICLE VIII shall be contract rights and such rights shall
continue as to an indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the indemnitee's heirs,
executors and administrators.
Section 3. Right of Indemnitee to Bring Suit.
If a claim under Section 1 or 2 of this ARTICLE VIII is not paid
in full by the Bank within sixty (60) days after a written claim has been
received by the Bank, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty (20) days,
the indemnitee may at any time thereafter bring suit against the Bank to
recover the unpaid amount of the claim. If successful in whole or in part
in any such suit, or in a suit brought by the Bank to recover an
advancement of expenses pursuant to the terms of an undertaking, the
indemnitee shall be entitled to be paid also the expense of prosecuting or
defending such suit. In (i) any suit brought by the indemnitee to enforce
a right to indemnification hereunder (but not in a suit brought by the
indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (ii) in any suit brought by the Bank to recover an
advancement of expenses pursuant to the terms of an undertaking, the Bank
shall be entitled to recover such expenses upon a final adjudication that,
the indemnitee has not met any applicable standard for indemnification
under Delaware law. Neither the failure of the Bank (including its Board
of Directors, independent legal counsel, or its stockholders) to have made
a determination prior to the commencement of such suit that indemnification
of the indemnitee is proper in the circumstances because the indemnitee has
met the applicable standard of conduct under Delaware law, nor an actual
determination by the Bank (including its Board of Directors, independent
legal counsel, or its stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case
of such a suit brought by the indemnitee, be a defense to such suit. In
any suit brought by the indemnitee to enforce a right to indemnification or
to an advancement of expenses hereunder, or brought by the Bank to recover
an advancement of expenses pursuant to the terms of an undertaking, the
burden of proving that the indemnitee is not entitled to be indemnified, or
to such advancement of expenses, under this ARTICLE VIII or otherwise shall
be on the Bank.
Section 4. Non-Exclusivity of Rights.
The rights to indemnification and to the advancement of expenses
conferred in this ARTICLE VIII shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, the
Bank's Certificate of Incorporation, By-laws, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 5. Insurance.
The Bank may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Bank or another
corporation, partnership, joint venture, trust or other enterprise against
any expense, liability or loss, whether or not the Bank would have the
power to indemnify such person against such expense, liability or loss
under Delaware law.
Section 6. Indemnification of Employees and Agents of the
Bank.
The Bank may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement
of expenses to any employee or agent of the Bank to the fullest extent of
the provisions of this Article with respect to the indemnification and
advancement of expenses of directors and officers of the Bank.
ARTICLE IX - AMENDMENTS
These By-laws may be amended or repealed by the Board of
Directors at any meeting or by the stockholders at any meeting; provided,
however, that Article X of the By-laws shall not be subject to amendment,
alteration or repeal.
ARTICLE X - LIMITATION ON EXERCISE OF POWER.
The Bank shall comply with the restrictions set forth in Section
2(c)(2)(F) of the Bank Holding Company Act of 1956, as amended by the
Competitive Equality Amendments of 1987, 12 U.S.C. section 1841(c)(2)(F),
and any further amendments thereto.
SIXTH AMENDMENT TO
THE POOLING AND SERVICING AGREEMENT
SIXTH AMENDMENT TO POOLING AND SERVICING AGREEMENT dated as of
August 27, 1997 (this "Amendment"), by and between FIRST USA BANK, as
Transferor and Servicer (in such capacities, the "Transferor" and the
"Servicer," respectively), and THE BANK OF NEW YORK (DELAWARE), as Trustee
(the "Trustee").
WHEREAS, the Transferor, the Servicer and the Trustee have
heretofore executed and delivered a Pooling and Servicing Agreement dated
as of September 1, 1992 (as amended and supplemented through the date
hereof, the "Master Pooling and Servicing Agreement"), between the
Transferor, the Servicer and the Trustee for the issuance by the First USA
Credit Card Master Trust (the "Trust") of the Investor Certificates and the
Exchangeable Transferor Certificate;
WHEREAS, Section 13.01(a) of the Master Pooling and Servicing
Agreement provides that the Servicer, the Transferor and the Trustee,
without the consent of the Investor Certificateholders may amend the Master
Pooling and Servicing Agreement from time to time so long as the Trustee
shall have received (i) from each Rating Agency then rating the Investor
Certificates, a written notification that such action will not result in a
reduction or withdrawal of the rating of any outstanding Series which it is
then rating and (ii) an Opinion of Counsel to the effect that such
amendment will not adversely affect in any material respect the interests
of the Investor Certificateholders;
WHEREAS, the Trustee has received from (i) each Rating Agency, a
letter confirming the current rating of each outstanding Series and (ii) an
Opinion of Counsel to the effect that such amendment will not adversely
affect in any material respect the interests of the Investor
Certificateholders; and
WHEREAS, all other conditions precedent to the execution of this
Amendment have been complied with;
NOW, THEREFORE, the Servicer, the Transferor and the Trustee are
executing and delivering this Amendment in order to amend the provisions of
the Master Pooling and Servicing Agreement in the manner set forth below.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Master Pooling and Servicing Agreement.
SECTION 1.1 Definitions. Section 1.01 of the Master Pooling and
Servicing Agreement is hereby amended by deleting the definition of
"Business Day" and substituting therefor the following definition:
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in New York, New York, Newark,
Delaware or Wilmington, Delaware (or, with respect to any Series, any
additional city specified in the related Supplement) are authorized or
obligated by law or executive order to be closed.
SECTION 2.1 Collections. Section 4.03(a) of the Master Pooling
and Servicing Agreement is hereby amended by deleting the third paragraph
thereof and substituting therefor the following paragraph:
Notwithstanding anything in this Agreement to the contrary, for
so long as, and only so long as, the Transferor shall remain the
Servicer hereunder, and (a)(i) the Servicer provides to the
Trustee a letter of credit or other form of Enhancement covering
the risk of collection of the Servicer, and (ii) the Transferor
shall not have received a notice from any Rating Agency that such
a letter of credit or other form of Enhancement would result in
the lowering of such Rating Agency's then-existing rating of the
Investor Certificates, or (b) the Servicer shall have and
maintain a certificate of deposit or short-term deposit rating of
P-1 by Moody's and of A-1 by Standard & Poor's and deposit
insurance provided by BIF or SAIF, the Servicer need not deposit
Collections into the Collection Account, the Principal Account,
the Finance Charge Account or any Series Account, as provided in
any Supplement, or make payments to the Holder of the
Exchangeable Transferor Certificate, as provided in Article IV,
but may make such deposits, payments and withdrawals on each
Transfer Date in an amount equal to the net amount of such
deposits, payments and withdrawals which would have been made but
for the provisions of this paragraph.
SECTION 3.1 Addition of Accounts. Section 2.06(b) of the Master
Pooling and Servicing Agreement is hereby amended by deleting the text
thereof and replacing it with the following:
In addition to its obligation under subsection 2.06(a), the
Transferor may, but shall not be obligated to, designate from
time to time Additional Accounts of the Transferor to be included
as Accounts.
SECTION 4.1 Ratification of Master Pooling and Servicing
Agreement. As amended by this Amendment, the Master Pooling and Servicing
Agreement is in all respects ratified and confirmed, and the Master Pooling
and Servicing Agreement, as so amended by this Amendment, shall be read,
taken and construed as one and the same instrument.
SECTION 5.1 Severability. If any one or more of the covenants,
agreements, provisions or terms or portions thereof of this Amendment shall
be for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms or portions thereof shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Amendment and
shall in no way affect the validity or enforceability of the other
provisions or portions of this Amendment.
SECTION 6.1 Counterparts. This Amendment may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
SECTION 7.1 GOVERNING LAW. THIS AMENDMENT 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.
IN WITNESS WHEREOF, the Servicer, the Transferor and the Trustee
have caused this Amendment to be executed by their respective officers,
thereunto duly authorized, as of the day and year first above written.
FIRST USA BANK,
as Transferor and Servicer
By: /s/ Peter W. Atwater
------------------------------------
Name: Peter W. Atwater
Title: Executive Vice President
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Reyne A. Macadaeg
-------------------------------------
Name: Reyne A. Macadaeg
Title: Assistant Vice President
SEVENTH AMENDMENT TO
THE POOLING AND SERVICING AGREEMENT
SEVENTH AMENDMENT TO POOLING AND SERVICING AGREEMENT dated as of
April 15, 1998 (this "Amendment"), by and between FIRST USA BANK, as
Transferor and Servicer (in such capacities, the "Transferor" and the
"Servicer," respectively), and THE BANK OF NEW YORK (DELAWARE), as Trustee
(the "Trustee").
WHEREAS, the Transferor, the Servicer and the Trustee have
heretofore executed and delivered a Pooling and Servicing Agreement dated
as of September 1, 1992 (as amended and supplemented through the date
hereof, the "Master Pooling and Servicing Agreement"), between the
Transferor, the Servicer and the Trustee for the issuance by the First USA
Credit Card Master Trust (the "Trust") of the Investor Certificates and the
Exchangeable Transferor Certificate;
WHEREAS, Section 13.01(a) of the Master Pooling and Servicing
Agreement provides that the Servicer, the Transferor and the Trustee,
without the consent of the Investor Certificateholders may amend the Master
Pooling and Servicing Agreement from time to time so long as the Trustee
shall have received (i) from each Rating Agency then rating the Investor
Certificates, a written notification that such action will not result in a
reduction or withdrawal of the rating of any outstanding Series which it is
then rating and (ii) an Opinion of Counsel to the effect that such
amendment will not adversely affect in any material respect the interests
of the Investor Certificateholders;
WHEREAS, the Trustee has received from (i) each Rating Agency, a
letter confirming the current rating of each outstanding Series and (ii) an
Opinion of Counsel to the effect that such amendment will not adversely
affect in any material respect the interests of the Investor
Certificateholders; and
WHEREAS, all other conditions precedent to the execution of this
Amendment have been complied with;
NOW, THEREFORE, the Servicer, the Transferor and the Trustee are
executing and delivering this Amendment in order to amend the provisions of
the Master Pooling and Servicing Agreement in the manner set forth below.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Master Pooling and Servicing Agreement.
SECTION 1.1 Amendments.
(a) Definition of Business Day. Section 1.01 of the Master
Pooling and Servicing Agreement is hereby amended by deleting the
definition of "Business Day" and replacing it with the following:
""Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions are authorized or
obligated by law or executive order to be closed in (a) New York, New
York, (b) Newark, Delaware, (c) with respect to any Series for which
payments to any Certificateholders are to be made outside of the
United States, the city or cities in which the Paying Agents for such
Series located outside of the United States have their principal place
of business, and (d) with respect to any Series, any additional city
specified in the related Supplement."
(b) Annual Servicer's Certificate. Section 3.05 of the
Master Pooling and Servicing Agreement is hereby amended by deleting the
text thereof and replacing it with the following:
"Section 3.05 Annual Servicer's Certificate. Within four
months after the end of each fiscal year of the Servicer, the Servicer
will deliver, as provided in Section 13.05, to the Trustee, any
Enhancement Provider and the Rating Agency, an Officer's Certificate
substantially in the form of Exhibit D stating that (a) a review of
the activities of the Servicer during the prior twelve-month period
(or, with respect to the report to be delivered on or before April 30,
1998, the six-month period from July 1, 1997 through December 31,
1997) and of its performance under this Agreement was made under the
supervision of the officer signing such certificate, (b) to the best
of such officer's knowledge, based on such review, the Servicer has
fully performed all its obligations under this Agreement throughout
such period, or, if there has been a default in the performance of any
such obligation, specifying each such default known to such officer
and the nature and status thereof and (c) the report required to be
delivered to the Servicer by the independent certified public
accountants pursuant to subsection 3.06(b) of this Agreement has been
delivered to the Servicer, and such report contains no exceptions,
except for such exceptions as the independent certified public
accountants believe to be immaterial and such other exceptions as may
be set forth in such report. Such Officer's Certificate shall specify
all exceptions listed in the independent certified public accountants'
report referred to in clause (c) above. A copy of such certificate
may be obtained by any Investor Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office."
(c) Annual Independent Accountants' Servicing Report.
Section 3.06 of the Master Pooling and Servicing Agreement is hereby
amended by deleting the text thereof and replacing it with the following:
"Section 3.06 Annual Independent Accountants' Servicing
Report.
(a) Within four months after the end of each fiscal year of
the Servicer, the Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to
the Servicer or the Transferor) to furnish a report to the Trustee,
any Enhancement Provider and the Rating Agency, to the effect that
such firm has examined the assertion of the Servicer that it has
maintained effective internal control over the servicing of Accounts
under this Agreement and has complied with the provisions of this
Agreement with respect to the servicing of Accounts, and that such
firm has completed such examination in accordance with standards
established by the American Institute of Certified Public Accountants
and that, on the basis of such examination, such firm is of the
opinion (assuming the accuracy of any reports generated by the
Servicer's third party agents) that such assertion is fairly stated in
all material respects. A copy of such report may be obtained by any
Investor Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.
(b) Within four months after the end of each fiscal year of
the Servicer, the Servicer shall cause a firm of nationally recognized
independent certified public accountants (who may also render other
services to the Servicer or the Transferor) to furnish a report to the
Servicer to the effect that they have compared the mathematical
calculations of each amount set forth in the monthly certificates
forwarded by the Servicer pursuant to subsection 3.04(b) during the
period covered by such report (which shall be each fiscal year of the
Servicer or, with respect to the report to be delivered on or before
April 30, 1998, the six-month period from July 1, 1997 through
December 31, 1997) with the Servicer's computer reports which were the
source of such amounts and that on the basis of such comparison, such
amounts are in agreement, except for such exceptions as they believe
to be immaterial and such other exceptions as shall be set forth in
such report."
SECTION 2.1 Ratification of Master Pooling and Servicing
Agreement. As amended by this Amendment, the Master Pooling and Servicing
Agreement is in all respects ratified and confirmed, and the Master Pooling
and Servicing Agreement, as so amended by this Amendment, shall be read,
taken and construed as one and the same instrument.
SECTION 3.1 Severability. If any one or more of the covenants,
agreements, provisions or terms or portions thereof of this Amendment shall
be for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms or portions thereof shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Amendment and
shall in no way affect the validity or enforceability of the other
provisions or portions of this Amendment.
SECTION 4.1 Counterparts. This Amendment may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
SECTION 5.1 GOVERNING LAW. THIS AMENDMENT 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.
IN WITNESS WHEREOF, the Servicer, the Transferor and the Trustee
have caused this Amendment to be executed by their respective officers,
thereunto duly authorized, as of the day and year first above written.
FIRST USA BANK,
as Transferor and Servicer
By: /s/ Tracie H. Klein
-----------------------------------
Name: Tracie H. Klein
Title: Vice President
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Reyne A. Macadaeg
----------------------------------
Name: Reyne A. Macadaeg
Title: Assistant Vice President
EIGHTH AMENDMENT TO
THE POOLING AND SERVICING AGREEMENT
EIGHTH AMENDMENT TO POOLING AND SERVICING AGREEMENT dated as of
June 30, 1998 (this "Amendment"), by and between FIRST USA BANK, as
Transferor and Servicer (in such capacities, the "Transferor" and the
"Servicer," respectively), and THE BANK OF NEW YORK (DELAWARE), as Trustee
(the "Trustee").
WHEREAS, the Transferor, the Servicer and the Trustee have
heretofore executed and delivered a Pooling and Servicing Agreement dated
as of September 1, 1992 (as amended and supplemented through the date
hereof, the "Master Pooling and Servicing Agreement"), between the
Transferor, the Servicer and the Trustee for the issuance by the First USA
Credit Card Master Trust (the "Trust") of the Investor Certificates and the
Exchangeable Transferor Certificate;
WHEREAS, Section 13.01(a) of the Master Pooling and Servicing
Agreement provides that the Servicer, the Transferor and the Trustee,
without the consent of the Investor Certificateholders may amend the Master
Pooling and Servicing Agreement from time to time so long as the Trustee
shall have received (i) from each Rating Agency then rating the Investor
Certificates, a written notification that such action will not result in a
reduction or withdrawal of the rating of any outstanding Series which it is
then rating and (ii) an Opinion of Counsel to the effect that such
amendment will not adversely affect in any material respect the interests
of the Investor Certificateholders;
WHEREAS, the Trustee has received from (i) each Rating Agency, a
letter confirming the current rating of each outstanding Series and (ii) an
Opinion of Counsel to the effect that such amendment will not adversely
affect in any material respect the interests of the Investor
Certificateholders; and
WHEREAS, all other conditions precedent to the execution of this
Amendment have been complied with;
NOW, THEREFORE, the Servicer, the Transferor and the Trustee are
executing and delivering this Amendment in order to amend the provisions of
the Master Pooling and Servicing Agreement in the manner set forth below.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Master Pooling and Servicing Agreement.
SECTION 1. Amendments. Subsection 6.03(b) of the Master
Pooling and Servicing Agreement is hereby amended by deleting the text
thereof and replacing it with the following:
(b) Except as provided in Section 6.09 or 7.02 or in
any Supplement, in no event shall the Exchangeable
Transferor Certificate or any interest therein be
transferred, sold, exchanged, pledged, participated or
otherwise assigned hereunder, in whole or in part,
unless the Transferor shall have consented in writing
to such transfer and unless the Trustee shall have
received (x) an Opinion of Counsel that such transfer
(i) does not adversely affect the conclusions reached
in any of the federal income tax opinions dated the
applicable Closing Date issued in connection with the
original issuance of any Series of Investor
Certificates and (ii) will not cause the Trust to be
deemed to be an association or "publicly traded
partnership" (within the meaning of Section 7704(b) of
the Internal Revenue Code) taxable as a corporation and
(y) with respect to any such transfer, sale, exchange,
pledge, participation or assignment to an entity which
is not an Affiliate of the Transferor, confirmation in
writing from each Rating Agency that such transfer will
not result in a lowering or withdrawal of its then-
existing rating of any Series of Investor Certificates.
The Transferor shall give each Rating Agency notice of
any such transfer, sale, exchange, pledge,
participation or assignment to an Affiliate of the
Transferor.
SECTION 2. Ratification of Master Pooling and Servicing
Agreement. As amended by this Amendment, the Master Pooling and Servicing
Agreement is in all respects ratified and confirmed, and the Master Pooling
and Servicing Agreement, as so amended by this Amendment, shall be read,
taken and construed as one and the same instrument.
SECTION 3. Severability. If any one or more of the covenants,
agreements, provisions or terms or portions thereof of this Amendment shall
be for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms or portions thereof shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Amendment and
shall in no way affect the validity or enforceability of the other
provisions or portions of this Amendment.
SECTION 4. Counterparts. This Amendment may be executed in
one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
SECTION 5. GOVERNING LAW. THIS AMENDMENT 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.
IN WITNESS WHEREOF, the Servicer, the Transferor and the Trustee
have caused this Amendment to be executed by their respective officers,
thereunto duly authorized, as of the day and year first above written.
FIRST USA BANK,
as Transferor and Servicer
By: /s/ Suzanne Bachman
----------------------------------------
Name: Suzanne Bachman
Title: Vice President
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Reyne A. Macadaeg
--------------------------------------
Name: Reyne A. Macadaeg
Title: Assistant Vice President
NINTH AMENDMENT TO
THE POOLING AND SERVICING AGREEMENT
NINTH AMENDMENT TO POOLING AND SERVICING AGREEMENT, dated as of
July 21, 1998 (this "Amendment"), by and between FIRST USA BANK, N.A., as
Transferor and Servicer (in such capacities, the "Transferor" and the
"Servicer," respectively), and THE BANK OF NEW YORK (DELAWARE), as Trustee
(in such capacity, the "Trustee").
WHEREAS, the Transferor, the Servicer and the Trustee have
heretofore executed and delivered a Pooling and Servicing Agreement, dated
as of September 1, 1992 (as amended and supplemented through the date
hereof and as the same may be further amended, supplemented or otherwise
modified and in effect from time to time, the "Master Pooling and Servicing
Agreement"), by and between the Transferor, the Servicer and the Trustee,
for the issuance by the First USA Credit Card Master Trust (the "Trust") of
the Investor Certificates and the Exchangeable Transferor Certificate;
WHEREAS, Section 13.01(a) of the Master Pooling and Servicing
Agreement provides that the Servicer, the Transferor and the Trustee,
without the consent of the Investor Certificateholders, may amend the
Master Pooling and Servicing Agreement from time to time so long as the
Trustee shall have received (i) from each Rating Agency then rating the
Investor Certificates, a written notification that such action will not
result in a reduction or withdrawal of the rating of any outstanding Series
which it is then rating and (ii) an Opinion of Counsel to the effect that
such amendment will not adversely affect in any material respect the
interests of the Investor Certificateholders;
WHEREAS, the Trustee has received (i) from each Rating Agency, a
letter confirming the current rating of each outstanding Series and (ii) an
Opinion of Counsel to the effect that such amendment will not adversely
affect in any material respect the interests of the Investor
Certificateholders; and
WHEREAS, all other conditions precedent to the execution of this
Amendment have been complied with;
NOW, THEREFORE, the Servicer, the Transferor and the Trustee are
executing and delivering this Amendment in order to amend the provisions of
the Master Pooling and Servicing Agreement in the manner set forth below.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Master Pooling and Servicing Agreement.
SECTION 1. Name Change. Wherever used in the Master Pooling and
Servicing Agreement, including in the exhibits and schedules thereto, (a)
all references to the Transferor or the Servicer as "First USA Bank, a
Delaware chartered banking corporation" are hereby amended to read "First
USA Bank, N.A., a national banking association" and (b) all references to
the name of the Transferor or the Servicer as "First USA Bank" are hereby
amended to read "First USA Bank, N.A." .
SECTION 2. Amendments to Section 2.03. (a) Section 2.03(a) of
the Master Pooling and Servicing Agreement is hereby amended by deleting
the words "Delaware chartered banking corporation duly organized and
validly existing in good standing under the Laws of the State of Delaware"
therefrom and substituting therefor the words "national banking association
duly organized and validly existing in good standing under the laws of the
United States".
(b) Section 2.03(b) of the Master Pooling and Servicing
Agreement is hereby amended by deleting the words "and Delaware" therefrom.
SECTION 3. Amendments to Section 3.03. (a) Section 3.03(a) of
the Master Pooling and Servicing Agreement is hereby amended by deleting
the words "Delaware chartered banking corporation duly organized and
validly existing in good standing under the laws of the State of Delaware"
therefrom and substituting therefor the words "national banking association
duly organized and validly existing in good standing under the laws of the
United States".
(b) Section 3.03(b) of the Master Pooling and Servicing
Agreement is hereby amended by deleting the words "and Delaware" therefrom.
SECTION 4. Amendment to Section 11.15. Section 11.15(i) is
hereby amended by deleting the words "national banking association" and
substituting therefor the words "Delaware chartered banking corporation".
SECTION 5. Ratification of Master Pooling and Servicing
Agreement. As amended by this Amendment, the Master Pooling and Servicing
Agreement is in all respects ratified and confirmed, and the Master Pooling
and Servicing Agreement, as so amended by this Amendment, shall be read,
taken and construed as one and the same instrument.
SECTION 6. Severability. If any one or more of the covenants,
agreements, provisions or terms or portions thereof of this Amendment shall
be for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms or portions thereof shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Amendment and
shall in no way affect the validity or enforceability of the other
provisions or portions of this Amendment.
SECTION 7. Counterparts. This Amendment may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
SECTION 8. GOVERNING LAW. THIS AMENDMENT 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.
IN WITNESS WHEREOF, the Servicer, the Transferor and the Trustee
have caused this Amendment to be executed by their respective officers,
thereunto duly authorized, as of the day and year first above written.
FIRST USA BANK, N.A.
as Transferor and Servicer
By: /s/ Rebekah A. Sayers
--------------------------------------
Name: Rebekah A. Sayers
Title: Vice President
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Reyne A. Macadaeg
--------------------------------------
Name: Reyne A. Macadaeg
Title: Assistant Vice President
TENTH AMENDMENT TO
THE POOLING AND SERVICING AGREEMENT
TENTH AMENDMENT TO POOLING AND SERVICING AGREEMENT, dated as of
August 14, 1998 (this "Amendment"), by and between FIRST USA BANK, N.A., as
Transferor and Servicer (in such capacities, the "Transferor" and the
"Servicer," respectively), and THE BANK OF NEW YORK (DELAWARE), as Trustee
(in such capacity, the "Trustee").
WHEREAS, the Transferor, the Servicer and the Trustee have
heretofore executed and delivered a Pooling and Servicing Agreement, dated
as of September 1, 1992 (as amended and supplemented through the date
hereof and as the same may be further amended, supplemented or otherwise
modified and in effect from time to time, the "Master Pooling and Servicing
Agreement"), by and between the Transferor, the Servicer and the Trustee,
for the issuance by the First USA Credit Card Master Trust (the "Trust") of
the Investor Certificates and the Exchangeable Transferor Certificate;
WHEREAS, Section 13.01(a) of the Master Pooling and Servicing
Agreement provides that the Servicer, the Transferor and the Trustee,
without the consent of the Investor Certificateholders, may amend the
Master Pooling and Servicing Agreement from time to time so long as the
Trustee shall have received (i) from each Rating Agency then rating the
Investor Certificates, a written notification that such action will not
result in a reduction or withdrawal of the rating of any outstanding Series
which it is then rating and (ii) an Opinion of Counsel to the effect that
such amendment will not adversely affect in any material respect the
interests of the Investor Certificateholders;
WHEREAS, the Trustee has received (i) from each Rating Agency, a
letter confirming the current rating of each outstanding Series and (ii) an
Opinion of Counsel to the effect that such amendment will not adversely
affect in any material respect the interests of the Investor
Certificateholders; and
WHEREAS, all other conditions precedent to the execution of this
Amendment have been complied with;
NOW, THEREFORE, the Servicer, the Transferor and the Trustee are
executing and delivering this Amendment in order to amend the provisions of
the Master Pooling and Servicing Agreement in the manner set forth below.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Master Pooling and Servicing Agreement.
SECTION 1. Amendments to Section 1.01. (a) The definition of
"Eligible Account" set forth in Section 1.01 of the Master Pooling and
Servicing Agreement is hereby amended by deleting subsection (c) thereof
and substituting in its place the following subsection (c):
"(c) the Obligor on which has provided, as its most recent
billing address, an address which is located in the United States or
its territories or possessions or a Military Address;"
(b) Section 1.01 of the Master Pooling and Servicing Agreement
is hereby further amended by adding the following definition thereto in the
proper order therefor:
""Military Address" shall mean any mailing address on any
United States armed forces military base of operations, including APO
and FPO Addresses."
SECTION 2. Amendment to Section 2.06(a). Section 2.06(a) of the
Master Pooling and Servicing Agreement is hereby amended by deleting such
subsection in its entirety and substituting therefor the following:
"(a) If, (i) during any period of thirty consecutive days,
the Transferor Interest averaged over that period is less than 4% (or
such higher percentage as may be specified in any Supplement, such
percentage the "Minimum Transferor Interest") of the Average Principal
Receivables, the Transferor shall designate additional eligible
MasterCard or VISA accounts from the Bank Portfolio ("Additional
Accounts") to be included as Accounts in a sufficient amount such that
the average of the Transferor Interest as a percentage of the Average
Principal Receivables for such 30-day period, computed by assuming
that the amount of the Average Principal Receivables of such
Additional Accounts shall be deemed to be outstanding in the Trust
during each day of such 30-day period, is at least equal to the
Minimum Transferor Interest, or (ii) on any Record Date the aggregate
amount of Principal Receivables is less than the Minimum Aggregate
Principal Receivables, the Transferor shall designate Additional
Accounts to be included as Accounts in a sufficient amount such that
the aggregate amount of Principal Receivables will be equal to or
greater than the Minimum Aggregate Principal Receivables. Receivables
from such Additional Accounts shall be transferred to the Trust on or
before the tenth Business Day following such thirty-day period or
Record Date, as the case may be."
SECTION 3. Amendment to Section 4.03(b). Section 4.03(b) of the
Master Pooling and Servicing Agreement is hereby amended by deleting such
subsection in its entirety and substituting therefor the following:
"(b) Allocations for the Exchangeable Transferor
Certificate. Throughout the existence of the Trust, unless otherwise
stated in any Supplement, the Servicer shall allocate to the Holder of
the Exchangeable Transferor Certificate an amount equal to the product
of (A) the Transferor Percentage and (B) the aggregate amount of such
Collections allocated to Principal Receivables and Finance Charge
Receivables, respectively, in respect of each Monthly Period;
provided, however, that amounts payable to the Holder of the
Exchangeable Transferor Certificate pursuant to this clause (b) shall
instead be deposited in the Collection Account to the extent that the
Transferor Interest is less than the Minimum Transferor Interest.
Notwithstanding anything in this Agreement to the contrary, unless
otherwise stated in any Supplement, the Servicer need not deposit this
amount or any other amounts so allocated to the Exchangeable
Transferor Certificate pursuant to any Supplement into the Collection
Account and shall pay, or be deemed to pay, such amounts as collected
to the Holder of the Exchangeable Transferor Certificate."
SECTION 4. Amendment to Section 4.03(f). Section 4.03(f) of the
Master Pooling and Servicing Agreement is hereby amended by deleting such
subsection in its entirety and substituting therefor the following:
"(f) Unallocated Principal Collections. If, pursuant to
any provisions of Article IV, Collections allocated to Principal
Receivables with respect to any Series would cause such Series (a
"Retired Series") to be paid in full or if, pursuant to such
provisions, Collections of Principal Receivables are allocated to the
Holder of the Exchangeable Transferor Certificate and the Transferor
Interest is equal to or less than the Minimum Transferor Interest or
the payment of such amount to the Transferor would cause the
Transferor Interest to be equal to or less than the Minimum Transferor
Interest (any such Collections being referred to as "Allocated
Collections") or any Adjustment Payment is made, any Collections of
Principal Receivables allocated to a Retired Series in excess of the
amount required to pay such Series in full, or to the Transferor
Interest if the Transferor Interest is or would be caused to be less
than the Minimum Transferor Interest or any Adjustment Payment
("Unallocated Principal Collections") shall be retained in the
Collection Account. If on any Business Day following a Business Day
on which Unallocated Principal Collections were retained in the
Collection Account the Transferor Interest is greater than the Minimum
Transferor Interest, such Unallocated Principal Collections may be
released to the Holder of the Exchangeable Transferor Certificate. On
each Transfer Date with respect to each Series in the Monthly Period
succeeding the Monthly Period in which Unallocated Principal
Collections were retained in the Collection Account, such Unallocated
Principal Collections shall be reallocated to outstanding Series (any
such allocation, an "Excess Amount Principal Allocation," and any such
Series, an "Outstanding Series"). Any Excess Amount Principal
Allocation shall be performed assuming that (a) the character of
Unallocated Principal Collections as Principal Receivables shall not
be altered, (b) the Investor Percentages with respect to any
Outstanding Series shall be recalculated assuming that the Retired
Series has been retired and that only the Outstanding Series are
outstanding, (c) Allocated Collections have been paid to the Retiring
Series, (d) if the payment of Allocated Collections as described above
causes a Pay Out Event to occur, Unallocated Principal Collections
shall be allocated as if such Pay Out Event has occurred and (e) the
Unallocated Principal Collections available on any Transfer Date with
respect to any Series shall be applied as if they were available on
the last Business Day of the preceding Monthly Period. On each
Transfer Date immediately preceding each Distribution Date related to
the Amortization Period for any Series, Unallocated Principal
Collections will be deposited in the Principal Account for such Series
to the extent of the lesser of (x) the Principal Shortfall on the last
Business Day of the preceding Monthly Period for such Series and (y)
the aggregate amount of Unallocated Principal Collections retained in
the Collection Account on such day. If more that one Series is in its
Amortization Period, Unallocated Principal Collections retained in the
Collection Account shall be allocated to each outstanding Series pro
rata based on the Principal Shortfall, if any, for each such Series on
the last Business Day of the preceding Monthly Period, and then, at
the option of the Transferor, any remainder may be applied as
principal with respect to any Series of variable funding certificates.
The Servicer shall pay any remaining Shared Principal Collections on
such Transfer Date to the Transferor; provided, that if the Transferor
Interest as determined on such Business Day does not exceed the
Minimum Transferor Interest, then such remaining Unallocated Principal
Collections shall be deposited in the Collection Account in an amount
equal to the lesser of (i) the remaining Unallocated Principal
Collections and (ii) the excess of the Minimum Transferor Interest
over the Transferor Interest on such Business Day."
SECTION 5. Ratification of Master Pooling and Servicing
Agreement. As amended by this Amendment, the Master Pooling and Servicing
Agreement is in all respects ratified and confirmed, and the Master Pooling
and Servicing Agreement, as so amended by this Amendment, shall be read,
taken and construed as one and the same instrument.
SECTION 6. Severability. If any one or more of the covenants,
agreements, provisions or terms or portions thereof of this Amendment shall
be for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms or portions thereof shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Amendment and
shall in no way affect the validity or enforceability of the other
provisions or portions of this Amendment.
SECTION 7. Counterparts. This Amendment may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
SECTION 8. GOVERNING LAW. THIS AMENDMENT 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.
IN WITNESS WHEREOF, the Servicer, the Transferor and the Trustee
have caused this Amendment to be executed by their respective officers,
thereunto duly authorized, as of the day and year first above written.
FIRST USA BANK, N.A.
as Transferor and Servicer
By: /s/ Rebekah A. Sayers
-----------------------------------------
Name: Rebekah A. Sayers
Title: Vice President
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Cheryl L. Laser
----------------------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
PROSPECTUS SUPPLEMENT
(To Prospectus Dated ________, 1999)
$-----------
First USA Credit Card Master Trust
$_________ Class A Floating Rate Asset Backed Certificates, Series 1999-__
$________ Class B Floating Rate Asset Backed Certificates, Series 1999-__
First USA Bank, N.A.
Transferor and Servicer
Class A Certificates Class B Certificates
Principal Amount $_________ $_________
Price $_________ (___%) $_________ (___%)
Underwriting Discount $_________ (___%) $_________ (___%)
Proceeds to the Transferor $_________ (___%) $_________ (___%)
Certificate Rate one-month LIBOR + __%p.a one-month LIBOR + __%p.a.
Interest Payment Dates monthly on the 15th monthly on the 15th
First Interest Payment Date ___________ __________
Scheduled Principal
Payment Date ___________ __________
The Class B Certificates are subordinated to the Class A Certificates.
These securities are interests in First USA Credit Card Master Trust and
are backed only by the assets of the Trust. Neither these securities nor
the assets of the Trust are obligations of First USA Bank, N.A. or any of
its affiliates, or obligations insured by the FDIC.
These securities are highly structured. Before you purchase these
securities, be sure you understand the structure and the risks. See "Risk
Factors" beginning on page S-__ in this prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed on the
adequacy or accuracy of the disclosures in this supplement and the attached
prospectus. Any representation to the contrary is a criminal offense.
These securities are offered subject to availability.
Underwriters of the Class A Certificates
Underwriter of the Class B Certificates
The date of this Prospectus Supplement is __________, 1999
[FLAG]
The information in this prospectus is not complete and may be changed. We
can not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
Table of Contents
Where to Find Information in These Documents.......................S-3
Summary of Terms...................................................S-4
Structural Summary.................................................S-5
Selected Trust Portfolio Summary Data..............................S-8
Risk Factors......................................................S-10
Potential Early Repayment or Delayed
Payment due to Reduced Portfolio Yield......................S-10
Allocations of Charged-Off Receivables
Could Reduce Payments
to Certificateholders.......................................S-12
Limited Ability to Resell Certificates..........................S-13
Certain Liens Could Be Given Priority Over
Your Securities.............................................S-13
Insolvency or Bankruptcy of First USA Could
Result in Accelerated, Delayed or
Reduced Payments to Certificateholders......................S-13
Issuance of Additional Series by the Trust May
Affect the Timing of Payments...............................S-14
Individual Certificateholders WillHave
Limited Control of Trust Actions............................S-15
Class B Bears Additional Credit Risk...........................S-15
First USA's Credit Card Portfolio.................................S-16
General........................................................S-16
Assessment of Fees and Finance and other
Charges.....................................................S-17
Delinquency and Loss Experience................................S-17
Interchange.......................................................S-21
The Receivables...................................................S-21
General.........................................................S-21
Maturity Considerations...........................................S-25
Receivable Yield Considerations...................................S-27
Use of Proceeds...................................................S-28
First USA Bank, N.A...............................................S-28
Description of the Certificates...................................S-29
General........................................................S-29
Status of the Certificates.....................................S-30
Prescription...................................................S-30
Interest Payments..............................................S-30
Principal Payments.............................................S-31
Postponement of Accumulation Period............................S-33
Excess Principal Collections...................................S-33
Subordination of the Class B Certificates......................S-34
Investor Percentage and Transferor
Percentage..................................................S-34
Reallocation of Cash Flows.....................................S-37
Application of Collections.....................................S-37
Allocations of Collections of Finance
Charge Receivables..........................................S-42
Excess Finance Charge Collections..............................S-42
Payments of Principal..........................................S-44
Allocations of Collections of Principal
Receivables.................................................S-46
Reallocated Principal Collections..............................S-46
Defaulted Receivables; Investor Charge-Offs....................S-47
Principal Funding Account......................................S-48
Reserve Account................................................S-49
Companion Series...............................................S-50
Pay Out Events.................................................S-50
Optional Repurchase............................................S-52
Servicing Compensation and Payment of
Expenses.....................................................S-52
Reports to Certificateholders..................................S-52
Listing and General Information...................................S-53
ERISA Considerations..............................................S-53
Class A Certificates...........................................S-53
Class B Certificates...........................................S-54
Consultation with Counsel......................................S-54
Underwriting......................................................S-56
Exchange Listing..................................................S-57
ANNEX I: OTHER SERIES...........................................A-I-1
ANNEX II: GLOBAL CLEARANCE,
SETTLEMENT AND TAX
DOCUMENTATION PROCEDURES.....................................A-II-1
Index of Terms for Prospectus Supplement........................A-II-5
Where to Find Information in These Documents
The attached prospectus provides general information about First USA Credit
Card Master Trust, including terms and conditions that are generally
applicable to the securities issued by the Trust. The specific terms of
Series 1999-__ are described in this supplement.
This supplement begins with several introductory sections describing your
series and First USA Credit Card Master Trust in
abbreviated form:
o Summary of Terms provides important amounts, dates and other
terms of your series;
o Structural Summary gives a brief introduction of the key
structural features of your series and directions for
locating further information; and
o Risk Factors describes risks that apply to your series.
As you read through these sections, cross-references will direct you to
more detailed descriptions in the attached prospectus and elsewhere in this
supplement. You can also directly reference key topics by looking at the
table of contents pages in this supplement and the attached prospectus.
This supplement and the attached prospectus may be used by Banc One Capital
Markets, Inc. and First Chicago Capital Markets, Inc. in connection with
offers and sales related to market-making transactions in the certificates
offered by this supplement and the attached prospectus. Banc One Capital
Markets, Inc. and First Chicago Capital Markets, Inc. may act as principal
or agent in such transactions. Such sales will be made at varying prices
related to prevailing market prices at the time of sale.
To understand the structure of these securities, you must read carefully
the attached prospectus and this supplement in their entirety.
Summary of Terms
Trust: First USA Credit Card Master Trust--"Trust"
Transferor: First USA Bank, National Association--
"First USA" or the "Bank"
Servicer: First USA
Trustee: The Bank of New York (Delaware)
Pricing Date: _________, ____
Closing Date: _________, ____
Clearance and Settlement: DTC/Cedelbank/Euroclear
Trust Assets:
receivables originated in VISA(R) and
MasterCard(R) accounts, including
recoveries on charged-off receivables
Series Structure: Amount % of Total Series
Class A $___________ ____%
Class B $___________ ____%
Excess Collateral $___________ ____%
Annual Servicing Fee: ____%
Class A Class B
Anticipated Ratings:*
(Moody's/Standard & Poor's/
Fitch IBCA Aaa/AAA/AAA A2/A/A+
Credit Enhancement: subordination of subordination of the
Class B and the excess collateral
excess collateral
Interest Rate: one-month LIBOR +_% p.a. one-month LIBOR +_%p.a.
Interest Accrual Method: actual / 360 actual / 360
Interest Payment Dates: monthly (15th) monthly (15th)
Interest Rate Index Reset Date: 2 London business days 2 London business days
before each interest before each interest
payment date payment date
First Interest Payment Date: _________, ____ _________, ____
Scheduled Payment Date: _________, ____ _________, ____
Commencement of Accumulation
Period (subject to adjustment):_________, ____ _________, ____
Stated Series Termination Date: _________, ____ _________, ____
Application for Exchange Listing:Luxembourg Luxembourg
CUSIP Number: ______________ ______________
ISIN Number: ______________ ______________
Common Code: ______________ ______________
* It is a condition to issuance that one of these ratings be obtained.
Structural Summary
This summary briefly describes certain major structural components of
Series 1999-__. To fully understand the terms of Series 1999-__ you will
need to read both this supplement and the attached prospectus in their
entirety.
The Series 1999-__ Certificates
Your certificates represent the right to a portion of collections on
the underlying Trust assets. Your certificates will also be allocated a
portion of net losses on receivables, if any. Any collections of finance
charges allocated to your series will be used to make interest payments, to
pay a portion of the fees of First USA as servicer and to cover net losses
allocated to your series. Any remaining collections of finance charges
allocated to your series will be applied for the benefit of the holder of
the excess collateral. Any principal collections allocated to your series
in excess of the amount owed to certificates of your series on any
distribution date will be shared with other series of certificates issued
by First USA Credit Card Master Trust, retained in a trust account, or
returned to First USA. In no case will you receive more than the principal
and interest owed to you under the terms described in this supplement and
the attached prospectus.
For further information on allocations and payments, see "Description
of the Certificates--Investor Percentage and Transferor Percentage" and "--
Application of Collections" in this supplement. For further information
about the receivables supporting your certificates, see "The Receivables"
and "Receivable Yield Considerations" in this supplement. For a more
detailed discussion of the certificates, see "Description of the
Certificates" in this supplement and the attached prospectus.
Your certificates feature credit enhancement by means of the
subordination of other interests, which is intended to protect you from net
losses and shortfalls in cash flow. Credit enhancement for your series is
for your series' benefit only. Credit enhancement is provided to Class A by
the following:
o subordination of Class B; and
o subordination of the excess collateral.
Credit enhancement is provided to Class B by the following:
o subordination of the excess collateral.
The effect of subordination is that the more
subordinated interests will absorb any net losses allocated to Series
1999-__, and make up any shortfalls in cash flow, before the more senior
interests are affected. On the closing date the excess collateral will be
$__________, or ___% of the sum of the initial Class A invested amount, the
initial Class B invested amount and the initial excess collateral amount.
If the cash flow and any subordinated interest do not cover all net losses
allocated to Series 1999-__, your payments of interest and principal will
be reduced and you may suffer a loss of principal.
For a more detailed description of the subordination provisions of
Series 1999-__, see "Description of the Certificates--Subordination of the
Class B Certificates" in this supplement. For a discussion of losses, see
"Description of the Certificates--Defaulted Receivables; Investor
Charge-Offs" in this supplement. See "Risk Factors" in this supplement for
more detailed discussions of the risks of investing in Series 1999-__.
First USA Credit Card Master Trust
Your series is one of _______ series issued by First USA Credit Card
Master Trust which are expected to remain outstanding as of the closing
date. First USA Credit Card Master Trust is maintained by the trustee, for
the benefit of:
o certificateholders of Series 1999-__;
o certificateholders of other series issued
by First USA Credit Card Master Trust;
o providers of credit enhancements for
Series 1999-__ and other series issued
by First USA Credit Card Master Trust;
and
o First USA.
For a summary of the terms of the previously
issued series see "Annex I: Other Series."
Each series has a claim to a fixed dollar amount of First USA Credit
Card Master Trust's assets, regardless of the total amount of receivables
in the Trust at any time. First USA holds the remaining claim to First USA
Credit Card Master Trust's assets, which fluctuates with the total amount
of receivables in the Trust. First USA, as the holder of that amount, has
the right to purchase the outstanding Series 1999-__ certificates at any
time when the outstanding amount of the Series 1999-__ certificateholders'
interest in the First USA Credit Card Master Trust is less than or equal to
5% of the original amount of that interest. The purchase price for these
outstanding Series 1999-__ certificates will be equal to the outstanding
amount plus accrued and unpaid interest on the certificates through the
last day of the period on which the repurchase occurs.
For more information on First USA Credit Card Master Trust's assets,
see "First USA's Credit Card Portfolio" and "The Receivables" in this
supplement and "First USA's Credit Card Activities" and "The Receivables"
in the attached prospectus. For more information on the final payment of
principal and optional repurchase of the certificates by the Transferor,
see "Description of the Certificates--Optional Repurchase" in this
supplement and "Description of the Certificates--Final Payment of
Principal; Termination" in the attached prospectus.
Scheduled Principal Payments and Potential Later Payments
First USA Credit Card Master Trust expects to pay the entire
principal amount of Class A and the entire principal amount of Class B in
one payment on ________, ____. In order to accumulate the funds to pay
Class A and Class B on their scheduled payment date, the Trust will
accumulate principal collections in a principal funding account. The Trust
will deposit funds into the principal funding account during an
"accumulation period" on each "transfer date." The length of the
accumulation period may be as long as twelve months, but will be shortened
if First USA expects that a shorter period will suffice for the
accumulation of the Class A, Class B and excess collateral payment amounts.
The accumulation period is expected to end on ________, ____, when the
funds on deposit in the principal funding account will be paid to Class A
first, then to Class B and then to the excess collateral.
If Class A is not fully repaid on the scheduled payment date, Class A
will begin to amortize by means of monthly payments of all principal
collections allocated to Series 1999-__ until it is fully repaid.
After Class A is fully repaid the Trust will use principal
collections allocated to Series 1999-__ to repay Class B. If Class B is not
fully repaid on the scheduled payment date, Class B will begin to amortize
by means of monthly payments of all monthly principal collections allocated
to Series 1999-__ after Class A is fully repaid.
For more information on scheduled principal payments and the
accumulation period, see "Maturity Considerations" and "Description of the
Certificates-- Principal Payments," "--Postponement of Accumulation Period"
and "--Application of Collections" in this supplement and "Maturity
Assumptions" and "Description of the Certificates--Principal Payments" in
the attached prospectus.
Prior to the commencement of an accumulation or amortization period
for Series 1999-__, principal collections will be paid to First USA,
retained in a trust account or shared with other series that are amortizing
or in an accumulation period.
Minimum Yield on the Receivables; Possible Early
Principal Repayment of Series 1999-__
Class A or Class B may be repaid earlier than its scheduled payment
date if collections on the underlying receivables, together with other
amounts available for payment to certificateholders, are too low. The
minimum amount that must be available for payment to Series 1999-__ in any
month, referred to as the "base rate," is the sum of the Class A interest
rate, the Class B interest rate and the excess collateral minimum interest
rate, plus 2.0%. If the average Trust portfolio yield, net of losses
allocated to your series, for any three consecutive months is less than the
average base rate for the same three consecutive months, a "pay out event"
will occur with respect to Series 1999-__ and the Trust will commence a
rapid amortization of Series 1999-__, and holders of Series 1999-__
certificates will receive principal payments earlier than the scheduled
payment date.
Series 1999-__ is also subject to several other pay out events, which
could cause Series 1999-__ to amortize, and which are summarized under the
headings "Maturity Considerations" and "Description of the
Certificates--Pay Out Events" in this supplement. If Series 1999-__ begins
to amortize, Class A will receive monthly payments of principal until it is
fully repaid; Class B will then receive monthly payments of principal until
it is fully repaid. In that event, your certificates may be repaid prior to
the scheduled payment date.
The final payment of principal and interest will be made no later
than _________, ____, which is the Stated Series Termination Date.
For more information on pay out events, the portfolio yield and base
rate, early principal repayment and rapid amortization, see "Maturity
Considerations," "Description of the Certificates--Principal Payments" and
"--Pay Out Events" in this supplement and "Description of the
Certificates--Principal Payments" and "--Final Payment of Principal;
Termination" in the attached prospectus.
Tax Status of Class A and Class B
Skadden, Arps, Slate, Meagher & Flom LLP, special tax counsel to
First USA, is of the opinion that under existing law the Class A and Class
B certificates will be characterized as debt for U.S. Federal income tax
purposes.
The Transferor, the Servicer, the holders of the Class A certificates
and the Class B certificates and the owners of such certificates will agree
to treat the Class A certificates and the Class B certificates as debt for
Federal, state, local and foreign income and franchise tax purposes.
For further information regarding the application of U.S. Federal
income tax laws, see "Certain U.S. Federal Income Tax Consequences" in the
attached prospectus.
ERISA Considerations
Class A Certificates: The underwriters anticipate that the Class A
certificates will meet the criteria for treatment as "publicly-offered
securities." If so, subject to important considerations described under
"ERISA Considerations" in this supplement and in the attached prospectus,
the Class A certificates will be eligible for purchase by persons investing
assets of employee benefit plans or individual retirement accounts.
Class B Certificates: It is not anticipated that the Class B certificates
will meet the criteria for treatment as "publicly-offered securities." As
such, pension plans and other investors subject to ERISA cannot acquire
Class B certificates. Prohibited investors include:
o "employee benefit plans" as defined in
section 3(3) of ERISA.
o any "plan" as defined in section 4975 of
the U.S. Internal Revenue Code; and
o any entity whose underlying assets may be deemed to include
"plan assets" under ERISA by reason of any such plan's
investment in the entity, including insurance company general
accounts.
By purchasing any Class B certificates, you certify that you are not within
any of those categories.
For further information regarding the application of ERISA, see
"ERISA Considerations" in this supplement and the attached prospectus.
Mailing Address and Telephone Number of Principal
Executive Offices
The mailing address of First USA Bank, N.A., is 201 North Walnut
Street, Wilmington, Delaware 19801 and the telephone number is (302)
594-4000.
Selected Trust Portfolio Summary Data
Geographical Distribution of Receivables in Trust Portfolio
as of December 31, 1998
[Geographic Distribution Pie Chart]
The chart above shows the geographical distribution of the receivables in
the Trust portfolio among the 50 states. Other than the states specifically
shown in the chart, no state accounts for more than 5% of receivables in
the Trust portfolio.
Payment Data
[Payment Data Chart]
The chart above shows the trust yield, payment rate and net charge-off rate
for the Trust portfolio for each month from April 1997 to December 1998.
"Trust yield" for any month means the total amount of collected finance
charges, annual membership fees, other charges and Discount Receivables
allocated to certificateholders for the monthly period, expressed as a
percentage of total outstanding invested amount as a daily average for such
monthly period.
The "payment rate" for any month is the total amount of principal
collections allocated to the Trust for the monthly period, expressed as a
percentage of total outstanding principal receivables based on the weighted
average principal receivables for such monthly period.
The amount of "net charge-offs" for any month is the amount of principal
receivables in charged-off accounts, net of recoveries from previously
charged-off accounts, allocated to certificateholders for the monthly
period, expressed as a percentage of total outstanding invested amount as a
daily average for such monthly period.
Risk Factors
You should consider the following risk factors in deciding whether to
purchase the asset backed certificates described herein.
Potential Early
Repayment or Delayed
Payment due to
Reduced Portfolio Yield If the average trust portfolio yield, net of
losses allocated to your series, for any
three consecutive months is less than the
average base rate for the same three
consecutive months, a "pay out event" will
occur with respect to Series 1999-__ and the
Trust will commence a rapid amortization of
Series 1999-__, and holders of Series 1999-__
certificates will receive principal payments
earlier than the scheduled payment date.
Moreover, if principal collections on
receivables allocated to other series are
available for application to a rapid
amortization of any outstanding securities,
the period during which that rapid
amortization occurs may be substantially
shortened. Because of the potential for early
repayment if collections on the receivables
fall below the minimum amount, any
circumstances that tend to reduce collections
may increase the risk of early repayment of
Series 1999-__.
Conversely, any reduction in collections may
cause the period during which collections are
accumulated in the principal funding account
for payment of Class A to be longer than
otherwise would have been the case.
The following factors could result in
circumstances that tend to reduce
collections:
First USA May Change the Terms and Conditions
of the Accounts
First USA will transfer receivables to the
First USA Credit Card Master Trust arising
under specified credit card accounts, but
First USA will continue to own those
accounts. As the owner of those accounts,
First USA retains the right to change various
terms and conditions of those accounts,
including finance charges and other fees it
charges and the required monthly minimum
payment. First USA may change the terms of
the accounts to maintain its competitive
position in the credit card industry. Changes
in the terms of the accounts may reduce the
amount of receivables arising under the
accounts, reduce the amount of collections on
those receivables, or otherwise alter payment
patterns.
First USA has agreed that it will not change
the terms of the accounts or its policies
relating to the operation of its credit card
business, including the reduction of the
required minimum monthly payment and the
calculation of the amount or the timing of
finance charges, other fees and charge-offs,
unless it reasonably believes such a change
would not result in a pay out event for any
series and takes the same action on its other
substantially similar accounts, to the extent
permitted by those accounts.
As Servicer, First USA is also required to
exercise the same care and apply the same
policies that it exercises in handling
similar matters for its own comparable
accounts.
First USA May Add Accounts to the Trust Portfolio
In addition to the accounts already
designated for First USA Credit Card Master
Trust, First USA is permitted to designate
additional accounts for the trust portfolio
and to transfer the receivables in those
accounts to the Trust. Any new accounts and
receivables may have different terms and
conditions than the accounts and receivables
already in the Trust--such as higher or lower
fees or interest rates, or longer or shorter
principal payment terms. Credit card accounts
purchased by First USA may be included as
additional accounts if certain conditions are
satisfied. Credit card accounts purchased by
First USA will have been originated using the
account originator's underwriting criteria,
not those of First USA. The account
originator's underwriting criteria may be
more or less stringent than those of First
USA. Additionally, additional credit card
accounts may have been originated by First
USA using credit criteria which is different
from those which were applied by First USA to
the current credit card accounts. The new
accounts and receivables may produce higher
or lower collections or charge-offs over time
than the accounts and receivables already in
the Trust and could tend to reduce the amount
of collections allocated to Series 1999-__.
Also, if First USA's percentage interest in
the accounts of the Trust falls to 4% or
less, First USA will be required to maintain
that level by designating additional accounts
for the Trust portfolio and transferring the
receivables in those accounts to the Trust.
If First USA is required to add accounts to
the Trust, it may not have any accounts
available to be added to the Trust. If First
USA fails to add accounts when required, a
"pay out event" will occur and you could
receive payment of principal sooner than
expected. See "Description of the
Certificates--Addition of Accounts" in the
attached prospectus.
Certificate and Receivables Interest Rate
Reset Terms May Differ
Finance charges on the accounts in the First
USA Credit Card Master Trust may accrue at a
fixed rate or a variable rate above a
designated prime rate or other designated
index. The certificate rate of your
certificate is based on LIBOR. Changes in
LIBOR might not be reflected in the prime
rate or the designated index, resulting in a
higher or lower spread, or difference,
between the amount of collections of finance
charge receivables on the accounts and the
amounts of interest payable on Series 1999-__
and other amounts required to be funded out
of collections of finance charge receivables.
A decrease in the spread between collections
of finance charge receivables and interest
payments on your certificate could increase
the risk of early repayment.
Changes to Consumer Protection Laws May
Impede First USA's Collection Efforts
Federal and state consumer protection laws
regulate the creation and enforcement of
consumer loans, including credit card
accounts and receivables. Changes or
additions to those regulations could make it
more difficult for the servicer of the
receivables to collect payments on the
receivables. The U.S. Congress or state or
local legislatures could pass legislation
limiting the finance charges and fees that
may be charged on credit card accounts. The
impact could be a reduction of the portfolio
yield which could result in a pay out event.
See "Description of the Certificates--Pay Out
Events" and "Certain Legal Aspects of the
Receivables--Consumer Protection Laws" in the
attached prospectus.
Receivables that do not comply with consumer
protection laws may not be valid or
enforceable in accordance with their terms
against the obligors on those receivables.
First USA makes representations and
warranties relating to the validity and
enforceability of the receivables arising
under the accounts in the trust portfolio.
Subject to certain conditions described under
"Description of the
Certificates--Representations and Warranties"
in the attached prospectus, First USA must
accept reassignment of each receivable that
does not comply in all material respects with
all requirements of applicable law. However,
we do not anticipate that the trustee under
the pooling and servicing agreement will make
any examination of the receivables or the
related records for the purpose of
determining the presence or absence of
defects, compliance with representations and
warranties, or for any other purpose. The
only remedy if any representation or warranty
is violated, and the violation continues
beyond the period of time First USA has to
correct the violation, is that First USA must
accept reassignment of the receivables
affected by the violation, subject to certain
conditions described under "Description of
the Certificates-- Representations and
Warranties" in the attached prospectus. See
also "Certain Legal Aspects of the
Receivables--Consumer Protection Laws" in the
attached prospectus.
If a cardholder sought protection under
Federal or state bankruptcy or debtor relief
laws, a court could reduce or discharge
completely the cardholder's obligations to
repay amounts due on its account and, as a
result, the related receivables would be
written off as uncollectible. See
"Description of the Certificates--Defaulted
Receivables; Investor Charge-Offs" in this
supplement and "Description of the
Certificates--Defaulted Receivables; Rebates
and Fraudulent Charges" and "--Investor
Charge-Offs" in the attached prospectus.
Slower Generation of Receivables Could Reduce
Collections
The receivables transferred to the First USA
Credit Card Master Trust may be paid at any
time. We cannot assure the creation of
additional receivables in those accounts or
that any particular pattern of cardholder
payments will occur. A significant decline in
the amount of new receivables generated by
the accounts in the Trust could result in
reduced collections. See "Maturity
Considerations."
Allocations of
Charged-Off Receivables
Could Reduce Payments
to Certificateholders First USA anticipates that it will write off
as uncollectible some portion of the
receivables arising in accounts in the trust
portfolio. Each class of Series 1999- __ will
be allocated a portion of those charged-off
receivables. See "Description of the
Certificates--Investor Percentage and
Transferor Percentage" and "First USA's
Credit Card Portfolio--Delinquency and Loss
Experience." If the amount of charged-off
receivables allocated to any class of
certificates exceeds the amount of other
funds available for reimbursement of those
charge-offs (which could occur if the amount
of credit enhancement for those certificates
is reduced to zero) the holders of those
certificates may not receive the full amount
of principal and interest due to them. See
"Description of the
Certificates--Reallocation of Cash Flows,"
"--Application of Collections" and
"--Defaulted Receivables; Investor
Charge-Offs."
Limited Ability to
Resell Certificates The underwriters may assist in resales of
Class A and Class B certificates but they are
not required to do so. A secondary market for
any such securities may not develop. If a
secondary market does develop, it might not
continue or it might not be sufficiently
liquid to allow you to resell any of your
securities.
Certain Liens Could Be
Given Priority Over
Your Securities First USA accounts for the transfer of the
receivables to the Trust as a sale. However,
a court could conclude that First USA still
owns the receivables and that the Trust holds
only a security interest. First USA will take
steps to give the trustee a "first priority
perfected security interest" in the
receivables. If First USA became insolvent
and the Federal Deposit Insurance Corporation
were appointed conservator or receiver of
First USA, the FDIC's administrative expenses
might be paid from the receivables before the
Trust received any payments on the
receivables. If a court concludes that the
transfer to the Trust is only a grant of a
security interest in the receivables certain
liens on First USA's property arising before
new receivables come into existence may get
paid before the Trust's interest in those
receivables. Those liens include a tax or
government lien or other liens permitted
under the law without the consent of First
USA. See "Certain Legal Aspects of the
Receivables--Transfer of Receivables" and
"Description of the
Certificates--Representations and Warranties"
in the attached prospectus.
Insolvency or
Bankruptcy of First
USA Could Result in
Accelerated, Delayed or
Reduced Payments to
Certificateholders Under the Federal Deposit Insurance Act, as
amended by the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, if
First USA becomes insolvent and the FDIC is
appointed conservator or receiver of First
USA, the FDIC could--
o require The Bank of New York (Delaware),
as trustee for the Trust, to go through an
administrative claims procedure under
which the FDIC could have up to 180 days
to determine the trustee's right to
payments collected on the receivables in
the Trust;
o request a stay of up to 90 days of any
judicial action or proceeding involving
First USA; or
o repudiate the pooling and servicing
agreement establishing the Trust up to 180
days following the date of receivership
and limit the Trust's resulting claim to
"actual direct compensatory damages"
measured as of the date of receivership.
If the FDIC were to take any of these actions
your payments of outstanding principal and
interest could be delayed and possibly
reduced. In this regard, among other
possibilities, it is likely that the FDIC
would not pay you the interest accrued from
the date of receivership to the date of
repudiation or payment. See "Certain Legal
Aspects of the Receivables--Certain Matters
Relating to Receivership" in the attached
prospectus.
If a conservator or receiver were appointed
for First USA, then a "pay out event" could
occur for all outstanding series. Under the
terms of the pooling and servicing agreement
new principal receivables would not be
transferred to the Trust and the trustee
would sell the receivables allocated to a
series unless holders of more than 50% of the
invested amount of the series or, if the
series has more than one class, each class of
the series gave the trustee other
instructions. The Trust would terminate
earlier than was planned if each series did
not vote to continue the Trust. You could
have a loss if the sale of the receivables
produced insufficient net proceeds to pay you
in full. The conservator or receiver may
nonetheless have the power--
o regardless of the terms of the pooling and
servicing agreement, (a) to prevent the
beginning of a rapid amortization period,
(b) to prevent the early sale of the
receivables and termination of the Trust
or (c) to require new principal
receivables to continue being transferred
to the Trust; or
o regardless of the instructions of the
certificateholders, (a) to require the
early sale of the Trust's receivables, (b) to
require termination of the Trust
and retirement of the Trust's certificates
(including Series 1999-__) or (c) to
prohibit the continued transfer of principal
receivables to the Trust.
The FDIC as conservator or receiver would
also have the power to repudiate or refuse to
perform any obligations of First USA,
including any obligations of First USA as
servicer, and to request a stay of up to 90
days of any judicial action or proceeding
involving First USA. In addition, if First
USA, as servicer, defaults on its obligations
under the pooling and servicing agreement
solely because the FDIC is appointed
conservator or receiver for First USA, the
FDIC might have the power to prevent the
trustee or the certificateholders from
appointing a new servicer under the pooling
and servicing agreement. See "Certain Legal
Aspects of the Receivables--Certain Matters
Relating to Receivership" in the attached
prospectus.
Issuance of Additional
Series by the Trust May
Affect the Timing of
Payments First USA Credit Card Master Trust, as a
master trust, may issue series of
certificates from time to time. The Trust may
issue additional series with terms that are
different from your series without the prior
review or consent of any certificateholders.
It is a condition to the issuance of each new
series that each rating agency that has rated
an outstanding series confirm in writing that
the issuance of the new series will not
result in a reduction or withdrawal of its
rating of any class of any outstanding
series.
However, the terms of a new series could
affect the timing and amounts of payments on
any other outstanding series. See
"Description of the Certificates-- Exchanges"
in the attached prospectus.
Individual
Certificateholders Will
Have Limited Control of
Trust Actions Certificateholders of any series or any class
within a series may need the consent or
approval of a specified percentage of the
invested amount of other series or a class of
such other series to take or direct certain
actions, including to require the appointment
of a successor servicer after First USA, as
servicer, defaults on its obligations under
the pooling and servicing agreement, to amend
the pooling and servicing agreement in some
cases, and to direct a repurchase of all
outstanding series after certain violations
of First USA's representations and
warranties. The interests of the
certificateholders of any such series may not
coincide with yours, making it more difficult
for any particular certificateholder to
achieve the desired results from such vote.
Class B Bears
Additional Credit Risk Because Class B is subordinated to Class A,
principal payments to Class B will not begin
until Class A is repaid in full.
Additionally, if collections of finance
charge receivables allocated to Series
1999-__ are insufficient to cover amounts due
to Class A, the invested amount for Class B
might be reduced. This would reduce the
amount of the collections of finance charge
receivables available to Class B in future
periods and could cause a possible delay or
reduction in principal and interest payments
on Class B. If the receivables are sold, the
net proceeds of that sale available to pay
principal would be paid first to Class A and
any remaining net proceeds would be paid to
Class B. See "Description of the
Certificates--Subordination of the Class B
Certificates."
First USA's Credit Card Portfolio
Capitalized terms are defined in this supplement and, if not, in the
attached prospectus. Definitions are indicated by boldface type. Both the
attached prospectus and this supplement contain an index of terms listing
the page numbers where definitions can be found.
General
The receivables (the "Receivables") conveyed or to be conveyed to the
Trust pursuant to a pooling and servicing agreement (as the same may be
amended from time to time, the "Pooling and Servicing Agreement"), between
First USA Bank, National Association ("First USA" or the "Bank") as
transferor (in such capacity, the "Transferor") and as servicer of the
Receivables (in such capacity, the "Servicer"), and The Bank of New York
(Delaware), as trustee (the "Trustee"), as supplemented by the Series
Supplement relating to the Offered Certificates (the "Offered Series
Supplement") (the term "Pooling and Servicing Agreement," unless the
context requires otherwise, refers to the Pooling and Servicing Agreement
as supplemented by the Offered Series Supplement) have been or will be
generated from transactions made by holders of MasterCard and VISA credit
card accounts ("Accounts") selected by First USA, including premium
accounts and standard accounts, from the Bank Portfolio. Each Class A
Floating Rate Asset Backed Certificate, Series 1999-__ (collectively, the
"Class A Certificates") and each Class B Floating Rate Asset Backed
Certificate, Series 1999-__ (collectively, the "Class B Certificates" and,
together with the Class A Certificates, the "Certificates" or the "Offered
Certificates") will represent the right to receive certain payments from
the Trust. As used in this supplement, the term "Certificateholders" refers
to holders of the Certificates, the term "Class A Certificateholders"
refers to holders of the Class A Certificates, the term "Class B
Certificateholders" refers to holders of the Class B Certificates, and the
term "Excess Collateral Holders" refers to the holders of the Excess
Collateral, Series 1999-__ (the "Excess Collateral").
The Bank converted to a national bank charter on July 1, 1998 and is
now named "First USA Bank, National Association". Concurrently with this
charter conversion, all consumer VISA and MasterCard credit card accounts
previously held by other bank subsidiaries of BANK ONE CORPORATION ("BANK
ONE") were consolidated in the Bank, which also replaced Bank One, N.A. as
seller/servicer for the Banc One Credit Card Master Trust and for Banc One
Funding Corporation, two other BANK ONE credit card securitization
vehicles. As a result of the merger of First USA, Inc. with and into BANK
ONE on June 27, 1997, the Bank is now an indirect wholly-owned subsidiary
of BANK ONE.
The Bank added receivables in certain accounts originated by the
Bank, Bank One, N.A., Bank One, Arizona, NA and other affiliates of the
Bank to the Trust on July 6, 1998. On September 30, 1998, the Bank
purchased the credit card portfolio of Chevy Chase Bank, F.S.B. ("Chevy
Chase"). On November 16, 1998, the Bank acquired accounts formerly owned by
First National Bank of Commerce ("First Commerce") as a result of a merger
between First Commerce and Bank One, Louisiana, N.A. and the transfer by
Bank One, Louisiana, N.A. to the Bank of substantially all of such
accounts. On December 24, 1998, the Bank purchased a portfolio of VISA and
MasterCard credit card loans from General Electric Capital Corporation ("GE
Capital"). The portfolio includes approximately $2.3 billion in managed
credit card loans. The Bank has not added to the Trust receivables in any
of the accounts acquired from Chevy Chase, First Commerce or GE Capital. A
substantial portion of each such portfolio (other than the GE Capital
portfolio) is currently subject to securitization through other credit card
master trusts. However, the Bank may, from time to time, add to the Trust
additional Receivables arising in accounts originated by affiliates of the
Bank or purchased by the Bank. Each such addition to the Trust of
receivables in accounts originated by the Bank and affiliates of the Bank
or purchased by the Bank is subject to certain restrictions on additions of
Accounts in the Pooling and Servicing Agreement, including satisfaction of
the Rating Agency Condition with respect to each such addition. See
"Description of the Certificates--Addition of Accounts" in the attached
prospectus.
Effective October 2, 1998, BANK ONE, the parent corporation of the
Bank, merged with First Chicago NBD Corporation, a Delaware corporation.
Immediately prior to such merger, BANC ONE CORPORATION, an Ohio corporation
("BANC ONE"), also merged with and into BANK ONE, which had been a
subsidiary of BANC ONE prior to such merger. BANK ONE is a bank holding
company headquartered in Chicago, Illinois and registered under the Bank
Holding Company Act of 1956, as amended. See "The Bank and BANK ONE
CORPORATION" in the attached prospectus.
Assessment of Fees and Finance and other Charges
A billing statement is sent to each cardholder at the end of each
monthly billing cycle in which the account has a debit or credit balance of
more than one dollar or if a finance charge has been imposed. With minor
exceptions, the minimum payment due each month on each account is equal to
the greater of $10 or 2% of the new balance shown on the statement, plus
the greater of any amount past due on any amount over the cardholder's
credit line. The Bank may assess a late payment fee, generally ranging from
$10 to $35 for most accounts, if it does not receive the minimum payment by
the payment due date shown on the monthly billing statement. The Bank may
assess a return check fee, generally ranging from $10 to $35, for each
payment check that is dishonored or that is unsigned or otherwise
irregular, an overlimit fee, generally ranging from $10 to $25, for
Purchases or Cash Advances that cause the credit line to be exceeded and
administrative fees for certain functions performed at the request of the
cardholder. Unless otherwise arranged between the Bank and the cardholder,
any late payment fee, return check fee or administrative fee is added to
the account and treated as a Purchase. In some cases, the Bank charges a
non-refundable Annual Membership Fee. In addition, the Bank assesses on
some cardholder accounts a transaction fee for the purchase of money
orders, the use of wire transfers, the use of convenience checks and
certain balance transfer transactions, equal to the greater of 2-3% of the
amount thereof and $5, with a cap ranging from $35 to $50.
Periodic finance charges ("Periodic Finance Charges") are not
assessed in most circumstances on purchases and convenience checks if all
balances shown in the billing statement are paid by the payment due date,
which is approximately 20 to 25 days from the previous cycle billing date.
Periodic Finance Charges are assessed on new Purchases and convenience
checks from the day that they are posted to the account if all balances
shown in the prior billing statement were not paid in full by the payment
due date. Periodic Finance Charges are assessed on Cash Advances from the
later of the day that they are made or the first day of the billing cycle
during which they were posted to the account. Aggregate finance charges for
each account in any given monthly billing cycle consist of Periodic Finance
Charges equal to either (i) the product of the monthly periodic rate
multiplied by the average daily balance or (ii) the product of the daily
balance and the daily periodic rate totaled, in each case, for each day
during the monthly billing cycle; plus, if applicable, an additional Cash
Advance finance charge or transaction finance charge (not applicable for
certain accounts), generally equal to a one-time charge of 2% to 3% of the
Cash Advance or purchase of a money order, wire transfer or use of a
convenience check or a balance transfer request (with a minimum ranging
from $2 to $15 and a maximum ranging from $10 to unlimited), for each of
these transactions posted to the account. Certain accounts in the portfolio
of VISA and Master Card credit card accounts serviced by the Bank including
accounts originated by the affiliates of the Bank whose consumer credit
card operations were consolidated in the Bank on July 1, 1998 (the "Bank
Portfolio") have an introductory period annual percentage rate ranging from
3.90% to 9.90%. The introductory rates on the accounts in the Bank
Portfolio are primarily fixed annual percentage rates. The annual
percentage rates, after the introductory rate period, are usually fixed or
floating periodic rates that adjust periodically according to an index.
Post-introductory annual percentage rates generally range from 9.99% to
26.99%.
Delinquency and Loss Experience
The Bank considers an account delinquent if the minimum payment due
thereunder is not received by the Bank by the due date. An account is not
treated as delinquent by the Bank if the minimum payment is received by the
next billing date.
Efforts to collect delinquent credit card receivables are made by the
Bank's collection department personnel, collection agencies and attorneys
retained by the Bank. For a description of the Bank's collection practices
and policies, see "First USA's Credit Card Activities--Delinquencies and
Charge-Offs" in the attached prospectus.
The Bank generally charges off an account immediately prior to the
end of the sixth billing cycle after having become contractually past due.
See "First USA's Credit Card Activities--Delinquencies and Charge-Offs" in
the attached prospectus.
The following tables set forth the delinquency and loss experience
for each of the periods shown for the Trust Portfolio. Reported loss and
delinquency percentages for the Trust Portfolio may be reduced as a result
of the addition of newly originated receivables. Receivables in newly
originated accounts generally have lower delinquency and loss levels than
receivables in more seasoned accounts and the addition of these receivables
to the Trust Portfolio increases the outstanding receivables balance for
the Trust Portfolio.
<TABLE>
<CAPTION>
Delinquency Experience
Trust Portfolio
(dollars in thousands)
As of As of December 31,
---------------------------------------------------------------------------
, 1999 1998 1997 1996
------------------------ ----------------------- ------------------------- -----------------------
Percentage of Percentage of Percentage of Percentage of
Dollar Receivables Dollar Receivables Dollar Receivables Dollar Receivables
Amount(1) Outstanding Amount(1) Outstanding Amount(1) Outstanding Amount(1) Outstanding
---------- ------------- --------- ------------- ----------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receivables
Outstanding
Number of Days
Delinquent:
35-64 days...
65-95 days...
95 or more
days (2).... ---------- ------------- --------- ------------- ----------- ------------- --------- -------------
Total.........$ $ $ $
========== ============= ========= ============= =========== ============= ========= =============
</TABLE>
(1) The Dollar Amount reflected includes all amounts due from cardholders
as posted to the accounts as of the date specified.
(2) The amount of Receivables delinquent 95 or more days as of ______,
1999 and as of December 31, 1998 and December 31, 1997 is stated on a
basis consistent with the Bank's current policy of charging off an
account immediately prior to the end of the sixth billing cycle after
having become contractually past due. The amount of receivables
delinquent 95 or more days as of December 31, 1996 is stated on a
basis consistent with the Bank's prior policy of charging off
accounts immediately prior to the end of the seventh billing cycle
after having become contractually past due. The policy change was
implemented to conform the charge-off policy of the Bank with that of
BANK ONE.
<TABLE>
<CAPTION>
Loss Experience
Trust Portfolio
(dollars in thousands)
__ Months
Ended
_______, Year Ended December 31,
--------------------------------
1999(1) 1998 1997 1996
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Average Principal Receivables Outstanding(2) $ $ $ $
Net Losses(3)(4)............................ $ $ $ $
Net Losses as a percentage of
Average Principal Receivables
Outstanding ............................. % % % %
</TABLE>
(1) Annualized.
(2) Average Principal Receivables Outstanding is the average of Principal
Receivables outstanding during the periods indicated.
(3) Net Losses shown for the months ended , 1999 and the year ended
December 31, 1998 are stated on a basis consistent with the Bank's
current policy of charging off an account immediately prior to the
end of the sixth billing cycle after having become contractually past
due. Its prior policy was to charge off an account immediately prior
to the end of the seventh billing cycle after having become
contractually past due. During the year ended December 31, 1997, the
Bank's charge-off policy was changed to conform with that of BANK
ONE. The prior policy applied for the year ended December 31, 1996.
(4) Net Losses as a percentage of gross charge-offs for the first ____
months of 1999 were ________% and for each of the years ended
December 31, 1998, 1997 and 1996 were ________%, _________% and
__________%, respectively. Gross charge-offs are principal
charge-offs before recoveries and do not include the amount of any
reductions in Average Principal Receivables Outstanding due to fraud,
returned goods or customer disputes.
The Trust's delinquency and net credit loss rates at any time
reflect, among other factors, the quality of the related credit card loans,
the average seasoning of the related accounts, the success of the Bank's
collection efforts and general economic conditions. Principal Receivables
delinquent as a percentage of total Principal Receivables outstanding
increased from % at December 31, 1996 to % at December 31, 1997 and
decreased at December 31, 1998 to % and at _______ __, 1999 to %. Net
losses as a percentage of average Principal Receivables outstanding
increased from % for 1996 to % for 1997 to % for 1998 and to %
for the ____ months ended __________, 1999. Newly booked accounts
historically have exhibited rising delinquencies and losses which reach a
steady state within approximately two to three years after origination. As
new loan originations have continued to become a smaller percentage of the
Trust Portfolio, delinquency, gross charge-off and net credit loss rates
for the Trust Portfolio have increased. The industry also continues to
experience intense competition, which results in increased account turnover
and higher costs per account. The Bank's focus continues to be to optimize
the profitability of each account within the context of acceptable risk
characteristics. As the Bank increases market penetration, it will continue
to focus on segments of the credit market which have been highly
profitable, and the Bank believes the Trust's delinquency and loss rates
will generally follow industry trends.
Interchange
Creditors participating in the VISA and MasterCard associations
receive Interchange as partial compensation for taking credit risk,
absorbing fraud losses and funding receivables for a limited period prior
to initial billing. Under the VISA and MasterCard systems a portion of this
Interchange in connection with cardholder Purchases is collected by banks
that issue credit cards by applying a discount to the amount paid by such
banks to the banks that clear the related transactions for merchants.
Interchange currently ranges from approximately 1.0% to 2.0% of the
transaction amount. Interchange will be allocated to the Trust by treating
1.3% (subject to adjustment at the option of the Transferor upon the
satisfaction of certain conditions as described in the attached prospectus
under "Description of the Certificates--Discount Receivables") of
collections on the Receivables (whether arising from Purchases or Cash
Advances), other than collections with respect to Periodic Finance Charges,
Annual Membership Fees and Other Charges, as collections of Discount
Receivables.
The Receivables
General
The Receivables conveyed to the Trust arise in Accounts selected by
First USA from the Bank Portfolio on the basis of criteria set forth in the
Pooling and Servicing Agreement as applied on August 21, 1992 (the "Cut-Off
Date") and, with respect to Additional Accounts, as of the related dates of
their designations (the "Trust Portfolio"). The Receivables in the Trust
Portfolio (including the Additional Accounts added to the Trust on
_____________, 1999 and , 1999), as of the close of business on , 1999,
consisted of $ of Principal Receivables and $ of Finance Charge
Receivables. On the Closing Date, the Transferor will deposit $ into the
Finance Charge Account, which will be applied as collections of Finance
Charge Receivables received during the initial Monthly Period and allocated
to Series 1999-__ (the "Offered Series"). The Accounts, including such
Additional Accounts, had an average Principal Receivable balance of
$__________ (including accounts with a zero balance) and an average credit
limit of $ . The percentage of the aggregate total Receivable balance to
the aggregate total credit limit was ____%.
As of __________, 1999, cardholders whose Accounts are included in the
Trust Portfolio, including such Additional Accounts, had billing addresses
in 50 states, the District of Columbia and other United States territories
and possessions.
Pursuant to the Pooling and Servicing Agreement, First USA has the
right, subject to certain limitations and conditions set forth therein, to
designate from time to time Additional Accounts and to transfer to the
Trust all Receivables of such Additional Accounts, whether such receivables
are then existing or thereafter created. Any Additional Accounts designated
pursuant to the Pooling and Servicing Agreement must be Eligible Accounts
as of the date First USA designates such accounts as Additional Accounts,
and must have been selected as Additional Accounts absent a selection
procedure believed by First USA to be materially adverse to the interests
of the holders of any Series of certificates. Additionally, First USA must
have received notice from the applicable Rating Agencies that the inclusion
of such accounts as Additional Accounts will not result in a reduction or
withdrawal by such Rating Agencies of any then existing rating of any Class
of certificates of any Series then outstanding. First USA will be required
to designate Additional Accounts, to the extent available, (a) to maintain
the Transferor Interest so that the Transferor Interest averaged for the
preceding 30 consecutive days and expressed as a percentage of the
aggregate amount of Principal Receivables equals or exceeds the Minimum
Transferor Interest and (b) to maintain, for so long as certificates of any
Series (including the Offered Certificates) remain outstanding, the
aggregate amount of Principal Receivables to be equal to or greater than
the Minimum Aggregate Principal Receivables. See "Description of the
Certificates -- Addition of Accounts" in the attached prospectus.
The Minimum Transferor Interest applicable to the Certificates is
currently 4%. The Minimum Aggregate Principal Receivables applicable to the
Certificates is an amount equal to (i) the sum of the initial invested
amounts of all Series then outstanding other than any Series of variable
funding certificates, (ii) with respect to any Series of variable funding
certificates in its revolving period, the then current invested amount of
such Series and (iii) with respect to any Series of variable funding
certificates in its amortization period, the invested amount of such Series
at the end of the last day of the revolving period for such Series.
Further, pursuant to the Pooling and Servicing Agreement, First USA
will have the right (subject to certain limitations and conditions) to
designate certain Accounts and to require the Trustee to reconvey all
Receivables in such Accounts (the "Removed Accounts") to First USA, whether
such Receivables are then existing or thereafter created. See "Description
of the Certificates--Removal of Accounts" in the attached prospectus.
Throughout the term of the Trust, the Accounts from which the Receivables
arise will be the Accounts designated by First USA on the Cut-Off Date plus
any Additional Accounts minus any Removed Accounts.
The following tables summarize the Trust Portfolio (including the
Additional Accounts added to the Trust on _____________, 1999 and
__________, 1999) by various criteria as of the close of business on
__________, 1999. Because the future composition of the Trust Portfolio may
change over time, these tables are not necessarily indicative of the
composition of the Trust Portfolio at any subsequent time.
Composition by Account Balance
Trust Portfolio
Percentage of
Total Percentage of
Number of Number of Amount of Total Amount
Accounts Accounts Receivables Receivables
--------- --------- --------- -----------
Account Balance Range
- ---------------------
Credit Balance............. % $ %
No Balance.................
$0.01 to $2,000.00.........
$2,000.01 to $5,000.00.....
$5,000.01 to $10,000.00....
$10,000.01 or More......... --------- --------- --------- ----------
TOTAL................... 100.0% $ 100.0%
========= ========= ========= ==========
Composition by Credit Limit
Trust Portfolio
Percentage of
Total Percentage of
Number of Number of Amount of Total Amount
Accounts Accounts Receivables Receivables
--------- --------- ----------- ------------
Credit Limit Range
- ---------------------
$0.00 to $2,000.00......... % $ %
$2,000.01 to $5,000.00.....
$5,000.01 to $10,000.00....
$10,000.01 or More......... --------- --------- --------- -----------
TOTAL................ 100.0% $ 100.0%
========= ========= ========= ===========
Composition by Period of Delinquency
Trust Portfolio
Percentage of
Total Percentage of
Number of Number of Amount of Total Amount
Accounts Accounts Receivables Receivables
--------- --------- ----------- -----------
Period of Delinquency
(Days Contractually
Delinquent)
Not Delinquent............ % $ %
Up to 34 Days.............
35 to 64 Days.............
65 to 94 Days.............
95 or More Days --------- --------- --------- -----------
TOTAL................ 100.0% $ 100.0%
========= ========= ========= ===========
Composition of Accounts by Age
Trust Portfolio
Percentage of
Total Percentage of
Number of Number of Amount of Total Amount
Accounts Accounts Receivables Receivables
--------- --------- --------- -----------
Account Age
- -----------------------------
Less than or equal to
6 Months................... % $ %
Over 6 Months to 12 Months...
Over 12 Months to 24 Months..
Over 24 Months to 36 Months..
Over 36 Months to 48 Months..
Over 48 Months to 60 Months..
Over 60 Months...............
--------- --------- --------- -----------
TOTAL................ 100.0% $ 100.0%
========== ========= ========= ===========
Composition by Geographic Distribution
Trust Portfolio
Percentage of
Total Percentage of
Number of Number of Amount of Total Amount
Accounts Accounts Receivables Receivables
--------- --------- --------- -----------
Alabama...................... % $ %
Alaska.......................
Arizona......................
Arkansas.....................
California...................
Colorado.....................
Connecticut..................
Delaware.....................
District of Columbia.........
Florida......................
Georgia......................
Hawaii.......................
Idaho........................
Illinois.....................
Indiana......................
Iowa.........................
Kansas.......................
Kentucky.....................
Louisiana....................
Maine........................
Maryland.....................
Massachusetts................
Michigan.....................
Minnesota....................
Mississippi..................
Missouri.....................
Montana......................
Nebraska.....................
Nevada.......................
New Hampshire................
New Jersey...................
New Mexico...................
New York.....................
North Carolina...............
North Dakota.................
Ohio.........................
Oklahoma.....................
Oregon.......................
Pennsylvania.................
Rhode Island.................
South Carolina...............
South Dakota.................
Tennessee....................
Texas........................
Utah.........................
Vermont......................
Virginia.....................
Washington...................
West Virginia................
Wisconsin....................
Wyoming......................
Other........................
--------- --------- --------- -----------
TOTAL................ 100.0% $ 100.0%
========= ========= ========= ===========
Since the largest number of cardholders (based on billing addresses)
whose accounts were included in the Trust as of _____________, 1999 were in
California, Texas, New York, Florida and Ohio, adverse changes in the
economic conditions in these areas could have a direct impact on the timing
and amount of payments on the Certificates.
Maturity Considerations
The Pooling and Servicing Agreement provides that Class A
Certificateholders will not receive payments of principal until the
Distribution Date (the "Class A Scheduled Payment Date"), or earlier in the
event of a Pay Out Event which results in the commencement of the Rapid
Amortization Period. The Pooling and Servicing Agreement also provides that
Class B Certificateholders will not receive payments of principal until the
Class A Invested Amount has been paid in full. Principal of the Class B
Certificates is expected to be paid on the Class B Scheduled Payment Date
which is the Distribution Date (the "Class B Scheduled Payment Date," and
sometimes referred to herein collectively with the Class A Scheduled
Payment Date and the Excess Collateral Scheduled Payment Date as a
"Scheduled Payment Date"), or earlier in the event of a Pay Out Event which
results in the commencement of the Rapid Amortization Period (in either
case, only after the Class A Invested Amount has been paid in full).
On each Transfer Date during 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, an amount equal to the least
of (a) the Available Investor Principal Collections with respect to the
preceding Monthly Period, (b) the applicable "Controlled Deposit Amount"
for such Monthly Period, which is equal to the sum of the applicable
Controlled Accumulation Amount for such Monthly Period and the applicable
Accumulation Shortfall, if any, for such Monthly Period, and (c) the Class
A Adjusted Invested Amount prior to any deposits on such day will be
deposited in the Principal Funding Account until the amount on deposit in
the Principal Funding Account (the "Principal Funding Account Balance")
equals the Class A Invested Amount. After the full amount of the Class A
Invested Amount has been deposited 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
the application thereof to the Class A Invested Amount, if any, (b) the
applicable Controlled Deposit Amount (minus the Class A Monthly Principal)
for such Monthly Period and (c) the Class B Adjusted Invested Amount prior
to any deposits on such day will be deposited in the Principal Funding
Account until the Principal Funding Account Balance equals the sum of the
Class A Invested Amount and the Class B Invested Amount. On and after the
Transfer Date preceding the Distribution Date on which the Class A Invested
Amount and the Class B Invested Amount will be paid in full, an amount
equal to, for each Monthly Period, the least of (a) the Available Investor
Principal Collections remaining after the application thereof to the Class
A Invested Amount and the Class B Invested Amount, if any, (b) the
applicable Controlled Deposit Amount (minus the Class A Monthly Principal
and Class B Monthly Principal) and (c) the Excess Collateral Adjusted
Amount prior to any deposits on such day will be deposited in the Principal
Funding Account until the Principal Funding Account Balance equals the sum
of the Class A Invested Amount, the Class B Invested Amount and the Excess
Collateral Amount and such amount will be distributed to the Excess
Collateral Holders on the Excess Collateral Scheduled Payment Date and, if
the Excess Collateral Amount is not paid in full on such date, on each
subsequent Transfer Date (other than the Transfer Date prior to the Stated
Series Termination Date) and the Stated Series Termination Date until the
earlier of the date on which the Invested Amount has been paid in full and
the Stated Series Termination Date. Amounts in the Principal Funding
Account are expected to be available to pay the Class A Invested Amount on
the Class A Scheduled Payment Date and the Class B Invested Amount on the
Class B Scheduled Payment Date. Although it is anticipated that collections
of Principal Receivables will be available on each Transfer Date during the
Accumulation Period to make a deposit of the applicable Controlled Deposit
Amount and that the Class A Invested Amount will be paid to the Class A
Certificateholders on the Class A Scheduled Payment Date and the Class B
Invested Amount will be paid to the Class B Certificateholders on the Class
B Scheduled Payment Date, respectively, no assurance can be given in this
regard. If the amount required to pay the Class A Invested Amount or the
Class B Invested Amount in full is not available on the Class A Scheduled
Payment Date or the Class B Scheduled Payment Date, respectively, the Rapid
Amortization Period will commence.
If a Pay Out Event occurs during the Accumulation Period, the Rapid
Amortization Period will commence and the amount on deposit in the
Principal Funding Account up to the Class A Invested Amount will be paid to
the Class A Certificateholders on the next Distribution Date. In addition,
to the extent that the Class A Invested Amount has not been paid in full on
the Class A Scheduled Payment Date, the Class A Certificateholders will be
entitled to monthly payments of principal on each succeeding Distribution
Date equal to the Available Investor Principal Collections until the Class
A Certificates have been paid in full. After the Class A Certificates have
been paid in full, Available Investor Principal Collections will be paid to
the Class B Certificates on each Distribution Date until the earlier of the
date on which the Class B Invested Amount has been paid in full and , (the
"Stated Series Termination Date").
A "Pay Out Event" occurs, either automatically or after specified
notice, upon (a) the failure of the Transferor to make certain payments or
transfers of funds for the benefit of the Certificateholders within the
time periods stated in the Pooling and Servicing Agreement, (b) material
breaches of certain representations, warranties or covenants of the
Transferor, which are not cured within the time periods stated in the
Pooling and Servicing Agreement, (c) certain events of insolvency or
receivership relating to the Transferor, (d) the occurrence of a Servicer
Default which would have a material adverse effect on the
Certificateholders, (e) the failure of the Transferor to convey Receivables
arising under Additional Accounts to the Trust when required by the Pooling
and Servicing Agreement, (f) the Trust's becoming an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or
(g) a reduction in the average Portfolio Yield for any three consecutive
Monthly Periods to a rate which is less than the average Base Rate for such
three consecutive Monthly Periods. The "Base Rate" means, with respect to
any Monthly Period, 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% per annum and a fraction the numerator of which is the sum of the
Class A Adjusted Invested Amount, the Class B Adjusted Invested Amount and
the Excess Collateral Adjusted Amount and the denominator of which is the
Invested Amount, each as of the last day of such Monthly Period. The term
"Portfolio Yield" means, 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 (i) the amount of collections of Finance Charge
Receivables allocable to the Certificateholders for such Monthly Period,
(ii) the investment proceeds on amounts on deposit in the Principal Funding
Account which are deposited in the Finance Charge Account on the Transfer
Date related to such Monthly Period and (iii) the amount, if any, withdrawn
from the Reserve Account to be deposited in the Finance Charge Account on
the Transfer Date relating to such Monthly Period, calculated on a cash
basis after subtracting an amount equal to the Investor Default Amount for
such Monthly Period, and the denominator of which is the Invested Amount as
of the last day of the preceding Monthly Period. See "Description of the
Certificates--Pay Out Events" herein and in the attached prospectus.
The following table sets forth the highest and lowest cardholder
monthly payment rates for the Trust Portfolio during any month in the
periods shown and the average cardholder monthly payment rates for all
months during the periods shown, in each case calculated as a percentage of
total opening monthly account balances during the periods shown. Payment
rates shown in the table are based on amounts which would be deemed
payments of Principal Receivables and Finance Charge Receivables with
respect to the Accounts.
<TABLE>
<CAPTION>
Cardholder Monthly Payment Rates
Trust Portfolio
___ Months
Ended Year Ended December 31,
---------------------------------------
, 1999 1998 1997 1996
-------------- ---------- -------------- ---------
<S> <C> <C> <C> <C>
Lowest Month.................. % % % %
Highest Month................. % % % %
Monthly Average............... % % % %
</TABLE>
The amount of collections of Receivables may vary from month to month
due to seasonal variations, general economic conditions, payment habits of
individual cardholders and number of collection days. If a Pay Out Event
occurs, the average life and maturity of the Certificates could be
significantly reduced. In addition, there can be no assurance that the
issuance of other Series or the terms of any such other Series might not
have an impact on the timing of the payments received by the
Certificateholders.
Because there may be a slowdown in the payment rate to a rate below
the payment rate used to determine the Controlled Accumulation Amount or a
Pay Out Event may occur which would initiate the Rapid Amortization Period,
there can be no assurance that the actual number of months elapsed from the
date of issuance of the Class A Certificates and the Class B Certificates
to their respective final Distribution Dates will equal the expected number
of months. As described under "Description of the
Certificates--Postponement of Accumulation Period," the Servicer may
shorten the Accumulation Period and, in such event, there can be no
assurance that the duration of the Accumulation Period will be sufficient
for the accumulation of all amounts necessary to pay the Class A Invested
Amount and the Class B Invested Amount on the Class A Scheduled Payment
Date and the Class B Scheduled Payment Date, respectively, especially if a
pay out event were to occur with respect to one or more other Series
thereby limiting the amount of Excess Principal Collections allocable to
the Offered Series.
Receivable Yield Considerations
The portfolio yield on the Trust Portfolio for each of the three
years contained in the period ended December 31, 1998 and for the ____
months ended __________, 1999 is set forth in the following table. The
portfolio yields in the table are calculated on a cash basis. Portfolio
yield will be affected by numerous factors, including changes in the
periodic rates, variations in the rate of payments and new borrowings on
the Accounts, the amount of the Annual Membership Fees and Other Charges,
changes in the delinquency and loss rates on the Receivables and the
percentage of cardholders who pay their balances in full each month and do
not incur Periodic Finance Charges, which may in turn be caused by a
variety of factors, including seasonal variations, the availability of
other sources of credit and general economic conditions. See "Maturity
Assumptions" in the attached prospectus. Interchange will be included in
the Trust on an estimated basis by initially treating 1.3% of collections
on the Receivables, other than collections with respect to Periodic Finance
Charges, Annual Membership Fees and Other Charges, as collections of
Discount Receivables.
<TABLE>
<CAPTION>
Portfolio Yield
Trust Portfolio
____ Months
Ended Year Ended December 31,
---------------------------------------
, 1998 1997 1996
1999
-------------- ---------- -------------- ---------
<S> <C> <C> <C> <C>
Finance Charges and Fees Paid. $ $ $ $
Average Revenue Yield(1)(2)...
% % % %
(1) Average Revenue Yield is the result of dividing Finance Charges and Fees
Paid by Average Principal Receivables Outstanding, which for the
first ____ months of 1999 were $________ and for each of the years ended
December 31, 1998, 1997 and 1996 were $ ________, $_________
and $_________, respectively. Average Principal Receivables Outstanding is
the average of Principal Receivables outstanding during the periods
indicated.
(2) Annualized.
</TABLE>
Use of Proceeds
The net proceeds from the sale of the Offered Certificates, in the
amount of $__________, before adjustment for sales of Class B Certificates
to noninstitutional investors and deduction of expenses, will be (i) used
to make an initial deposit to the Finance Charge Account in the amount of
$__________ and (ii) paid to First USA. First USA will use such balance of
the proceeds for its general corporate purposes.
First USA Bank, N.A.
The Bank is among the nation's largest issuers of VISA and MasterCard
credit cards in the United States, with more than ____ million credit cards
issued and approximately $___ billion in managed credit card loans
outstanding as of December 31, 1998, including approximately 2.8 million
credit card accounts and approximately $4.8 billion of credit card loans
purchased from Chevy Chase on September 30, 1998 and approximately 1.7
million credit card accounts and approximately $2.3 billion in managed
credit card loans purchased from GE Capital on December 24, 1998. See
"First USA and BANK ONE CORPORATION" in the attached prospectus.
Description of the Certificates
The Offered Certificates will be issued pursuant to the Pooling and
Servicing Agreement and the Offered Series Supplement. Pursuant to the
Pooling and Servicing Agreement, First USA and the Trustee may execute
further Series Supplements in order to issue additional Series. The
following summary of the Offered Certificates does not purport to be
complete and is subject to, and is qualified in its entirety by reference
to, all of the provisions of the Pooling and Servicing Agreement and the
Offered Series Supplement. See "Description of the Certificates" in the
attached prospectus for additional information concerning the Offered
Certificates and the Pooling and Servicing Agreement.
General
The Certificates will represent undivided interests in certain assets
of the Trust, including the right to the applicable allocation percentage
of all cardholder payments on the Receivables in the Trust. Each Class A
Certificate represents the right to receive payments of interest at the
applicable Class A Certificate Rate for the related Interest Period and
payments of principal on the Class A Scheduled Payment Date, or on each
Distribution Date during the Rapid Amortization Period, funded from
collections of Finance Charge Receivables (and Excess Finance Charge
Collections and Reallocated Principal Collections, as necessary) and
Principal Receivables, respectively, allocated to the Class A
Certificateholders' Interest and certain other amounts. Each Class B
Certificate represents the right to receive payments of interest at the
applicable Class B Certificate Rate for the related Interest Period and
payments of principal on the Class B Scheduled Payment Date and on each
Distribution Date during the Rapid Amortization Period after the Class A
Invested Amount has been paid in full funded from collections of Finance
Charge Receivables (and Reallocated Excess Collateral Principal
Collections, as necessary) and Principal Receivables, respectively,
allocated to the Class B Certificateholders' Interest and certain other
amounts. Payments of interest and principal will be made on each
Distribution Date to Certificateholders in whose names the Certificates
were registered on the last day of the calendar month preceding such
Distribution Date (each, a "Record Date").
The Class A Certificates and the Class B Certificates initially will
be represented by certificates registered in the name of the nominee of
DTC.
Application has been made to list the Class A Certificates and the
Class B Certificates on the Luxembourg Stock Exchange.
In the event that Definitive Certificates are issued, an Offered
Certificate that is mutilated, destroyed, lost or stolen may be exchanged
or replaced, as the case may be, at the offices of the co-transfer agent
and co-registrar in Luxembourg upon presentation of the Offered Certificate
or satisfactory evidence of the mutilation, destruction, loss or theft
thereof to the co-transfer agent and co-registrar. An indemnity
satisfactory to the co-transfer agent and co-registrar and the Trustee may
be required at the expense of the Certificateholder before a replacement
Offered Certificate will be issued. The Certificateholder will be required
to pay any tax or other governmental charge imposed in connection with such
exchange or replacement and any other expenses (including the fees and
expenses of the Trustee and the co-transfer agent and co-registrar)
connected therewith. The transfer agent and registrar shall not be required
to register the transfer or exchange of Definitive Certificates for a
period of fifteen days preceding the due date for any payment with respect
to such Definitive Certificates.
The Trustee will maintain a paying agent in Luxembourg for so long as
the Offered Certificates are outstanding. The name and address of the
paying agent in Luxembourg are set forth at the end of this supplement. If
Definitive Certificates are issued, such paying agent also will act as
co-transfer agent and co-registrar with respect to the Definitive
Certificates and transfers of the Definitive Certificates may be made
through the facilities of such co-transfer agent. In addition, upon
maturity or final payment, such Definitive Certificates may be presented
for payment at the offices of such paying agent in Luxembourg up to two
years after maturity or final payment.
Status of the Certificates
The Offered Series will rank pari passu with all other outstanding
Series. Payments on the Class B Certificates are subordinated to payments
on the Class A Certificates to the extent described
herein and in the attached prospectus.
Payments on the Excess Collateral are subordinated to payments on the
Class A Certificates and the Class B Certificates to the extent described
herein and in the attached prospectus.
Prescription
The Pooling and Servicing Agreement provides that any money paid by
the Trust to any of the paying agents for the payment of principal or
interest which remains unclaimed for two years after such principal or
interest shall have become due and payable will be repaid to the Trust, and
thereafter any holder of an Offered Certificate may look only to the Trust
for payment thereof.
Interest Payments
Interest will accrue on the outstanding principal balance of the
Class A Certificates at the Class A Certificate Rate and on the outstanding
principal balance of the Class B Certificates at the
Class B Certificate Rate from _____________, 1999
(the "Closing Date"). Interest will accrue on the Certificates and be
payable on _____________, 1999, and on the 15th day of each month
thereafter, or if such 15th day is not a business day, on the next
succeeding business day (each, a "Distribution Date"), in an amount equal
to (i) with respect to the Class A Certificates, 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 outstanding principal amount of
the Class A Certificates as of the preceding Record Date (or in the case of
the first Distribution Date, an amount equal to the product of (x) the
outstanding principal amount of the Class A Certificates on the Closing
Date, (y) __ divided by 360 and (z) the Class A Certificate Rate determined
on __________, 1999) and (ii) with respect to the Class B Certificates, 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 outstanding
principal amount of the Class B Certificates as of the preceding Record
Date (or in the case of the first Distribution Date, an amount equal to the
product of (x) the outstanding principal amount of the Class B Certificates
on the Closing Date, (y) __ divided by 360 and (z) the Class B Certificate
Rate determined on __________, 1999). Interest payments on the Certificates
will be funded, (i) with respect to the Class A Certificates, from the
portion of Finance Charge Receivables collected during the preceding
Monthly Period (or with respect to the first Distribution Date, from and
including the Closing Date to and including __________, 1999) allocated to
the Class A Certificateholders' Interest and, if necessary, from Excess
Finance Charge Collections allocated to the Class A Certificates and
Reallocated Principal Collections (to the extent available), (ii) with
respect to the Class B Certificates, from the portion of Finance Charge
Receivables collected during the preceding Monthly Period (or with respect
to the first Distribution Date, from and including the Closing Date to and
including ___________, 1999) allocated to the Class B Certificateholders'
Interest and, if necessary, from Excess Finance Charge Collections
allocated to the Class B Certificates and Reallocated Excess Collateral
Principal Collections (to the extent available) remaining after certain
other payments have been made with respect to the Class A Certificates and
(iii) with respect to the Excess Collateral Amount, from Excess Finance
Charge Collections allocated to the Excess Collateral Holders. The
"Interest Period" with respect to any Distribution Date, or related
Transfer Date, as the case may be, will be the period from the previous
Distribution Date through the day preceding such Distribution Date, except
that the initial Interest Period will be the period from the Closing Date
through the day preceding the initial Distribution Date.
The Class A Certificates will bear interest at the rate of ____%
above LIBOR determined as set forth below from the Closing Date through
__________, 1999 and with respect to each Interest Period thereafter (the
"Class A Certificate Rate"). The Class B Certificates will bear interest at
the rate of ____% above LIBOR determined as set forth below from the
Closing Date through __________, 1999 and with respect to each Interest
Period thereafter (the "Class B Certificate Rate," sometimes referred to
herein collectively with the Class A Certificate Rate as a "Certificate
Rate").
The Trustee will determine LIBOR on _______, 1999, for the period from
the Closing Date through ________, 1999, and for each Interest Period
following the initial Interest Period, on the second business day prior to
the Distribution Date on which such Interest Period commences (each, a "LIBOR
Determination Date"). For purposes of calculating LIBOR, a business day is
any day, other than a Saturday, Sunday or day on which banking institutions
in London, England trading in U.S. 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.
"LIBOR" means, as of any LIBOR Determination Date, the rate for
deposits in United States dollars for a one-month 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 will 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 one-month period. The Trustee will 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 will 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 one-month period.
"Telerate Page 3750" means the display page currently so designated
on the Dow Jones Telerate Service (or such other page as may replace that
page on that service for the purpose of displaying
comparable rates or prices).
"Reference Banks" means four major banks in the London interbank
market selected by the Servicer.
The Class A Certificate Rate and the Class B Certificate Rate
applicable to the then current and immediately preceding Interest Period
may be obtained by telephoning The Bank of New York at (212) 815-5737. The
Trustee will cause the Class A Certificate Rate and the Class B Certificate
Rate as well as the amount of Class A Monthly Interest and Class B Monthly
Interest applicable to an Interest Period to be provided to the Luxembourg
Stock Exchange and to be published in a daily newspaper in Luxembourg
(expected to be the Luxemburger Wort) as soon as possible after its
determination but in no event later than the first day of such Interest
Period. Such information will also be included in a statement to the
Certificateholders of record prepared by the Servicer. See "Description of
the Certificates--Reports to Certificateholders" in the attached
prospectus.
Interest on the Class A Certificates and the Class B Certificates
will be calculated on the basis of the actual number of days in the
Interest Period and a 360-day year.
Principal Payments
On each Transfer Date relating to the period from and including the
Closing Date and ending at the commencement of the Accumulation Period or,
if earlier, the Rapid Amortization Period (the "Revolving Period"),
collections of Principal Receivables allocable to the Invested Amount will,
subject to certain limitations, including the allocation of any Reallocated
Principal Collections with respect to the related Monthly Period to pay the
Class A Required Amount and the Class B Required Amount, be treated as
Excess Principal Collections.
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 for
such Monthly Period 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. Beginning with the Transfer Date on which the full amount of the
Class A Invested Amount has been deposited in the Principal Funding Account
and 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, if any, (b) the applicable Controlled Deposit Amount
(minus the Class A Monthly Principal with respect to such Transfer Date)
for such Monthly Period 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.
Beginning with the Transfer Date on which 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, if any, (b) the applicable Controlled Deposit
Amount (minus the Class A Monthly Principal and the Class B Monthly
Principal with respect to such Transfer Date) for such Monthly Period and
(c) the Excess Collateral Adjusted Amount prior to any such deposit on such
day. If the Class A Invested Amount and the Class B Invested Amount will be
paid in full on the Class A Scheduled Payment Date and the Class B
Scheduled Payment Date, respectively, amounts in the Principal Funding
Account will be paid to the Excess Collateral Holders on the Excess
Collateral Scheduled Payment Date. The "Excess Collateral Scheduled Payment
Date" is the __________ ____ Transfer 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.
"Available Investor Principal Collections" means, with respect to any
Monthly Period, an amount equal to the sum of (a) (i) an amount equal to,
during the Revolving Period, the Investor Percentage, and during an
Amortization Period, the Fixed/Floating Allocation Percentage of all
collections in respect of Principal Receivables received during such
Monthly Period, plus (ii) the amount, if any, of Unallocated Principal
Collections on the next succeeding Distribution Date allocated to the
Certificates, plus (iii) the amount, if any, of collections of Finance
Charge Receivables and Excess Finance Charge Collections allocated and
available on the next succeeding Distribution Date to (A) fund the Class A
Investor Default Amount, the Class B Investor Default Amount and the Excess
Collateral Default Amount with respect to the next succeeding Distribution
Date and (B) reimburse Class A Investor Charge-Offs and previous reductions
in the Class B Invested Amount and the Excess Collateral Amount minus (iv)
the amount of Reallocated Principal Collections with respect to such
Monthly Period used to fund the Class A Required Amount and the Class B
Required Amount, plus (b) any Excess Principal Collections with respect to
other Series that are allocated to the Offered Series plus (c) any other
amounts which pursuant to the Offered Series Supplement are to be treated
as Available Investor Principal Collections with respect to the related
Transfer Date.
The "Rapid Amortization Period" is the period beginning on the
earliest of the day on which a Pay Out Event occurs, the Class A Scheduled
Payment Date if the Class A Invested Amount is not paid in full on such
date, and the Class B Scheduled Payment Date if the Class B 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 each been paid in full and (ii) the Stated
Series Termination Date. On each Distribution Date following the Monthly
Period in which the Rapid Amortization Period commences, the Class A
Certificateholders will be entitled to receive Available Investor Principal
Collections for the preceding Monthly Period in an amount up to the Class A
Invested Amount until the earlier of the date the Class A Invested Amount
is paid in full and the Stated Series Termination Date. In addition, 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 paid 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. After payment in full of the Class A Invested Amount, the Class
B Certificateholders will be entitled to receive Available Investor
Principal Collections on each Distribution Date during the Rapid
Amortization Period until the earlier of the date the Class B Invested
Amount is paid in full and the Stated Series Termination Date. After
payment in full of the Class B Invested Amount, the Excess Collateral
Holders will be entitled to receive Available Investor Principal
Collections on each Transfer Date (other than the Transfer Date prior to
the Stated Series Termination Date) and on the Stated Series Termination
Date until the earlier of the date the Excess Collateral Holders' Interest
is paid in full and the Stated Series Termination Date. See "--Pay Out
Events" below for a discussion of events which might lead to the
commencement of the Rapid Amortization Period.
In the event of a sale of the Receivables and an early termination of
the Trust due to an event of insolvency, a material breach of certain
representations and warranties, an optional repurchase of the Receivables
by the Bank, a repurchase of the Receivables in connection with a Servicer
Default or a sale of the Receivables in connection with the Stated Series
Termination Date (each as described under "Description of the
Certificates--Pay Out Events," "--Servicer Default" and "--Final Payment of
Principal; Termination" in the attached prospectus), distributions of
principal will be made to the Certificateholders upon surrender of their
Certificates. The proceeds of any such sale or repurchase of Receivables
will be allocated first to pay amounts due with respect to the Class A
Certificates, then to pay amounts due with respect to the Class B
Certificates and then to pay amounts due with respect to the Excess
Collateral as described herein.
Postponement of Accumulation Period
The accumulation period with respect to the Certificates (the
"Accumulation Period") is scheduled to begin at the close of business on
__________, ____ (the Accumulation Period, together with the Rapid
Amortization Period sometimes referred to as an "Amortization Period" and
collectively as the "Amortization Periods"). Upon written notice to the
Trustee, the Servicer may elect to postpone the commencement of the
Accumulation Period, and extend the length of the Revolving Period, subject
to certain conditions including those set forth below. The Servicer may
make such election only if the Accumulation Period Length (determined as
described below) is less than twelve months. On each Determination Date,
until the Accumulation Period begins, the Servicer will determine the
"Accumulation Period Length," which is the number of months expected to be
required to fully fund the Principal Funding Account no later than the
Excess Collateral Scheduled Payment Date, based on (a) the expected monthly
collections of Principal Receivables expected to be distributable to the
certificateholders of all Series (unless Excess Principal Collections from
any such other Series are not allocated to be shared with the Offered
Series), assuming a principal payment rate no greater than the lowest
monthly principal payment rate on the Receivables for the preceding twelve
months and (b) the amount of principal expected to be distributable to
certificateholders of Series (which may exclude certain other Series) which
are not expected to be in their revolving periods during the Accumulation
Period. If the Accumulation Period Length is less than twelve months, the
Servicer may, at its option, postpone the commencement of the Accumulation
Period such that the number of months included in the Accumulation Period
will be equal to or exceed the Accumulation Period Length. The effect of
the foregoing calculation is to permit the reduction of the length of the
Accumulation Period based on the invested amounts of certain other Series
which are scheduled to be in their revolving periods during the
Accumulation Period and on increases in the principal payment rate
occurring after the Closing Date. The length of the Accumulation Period
will not be less than one month. If the Accumulation Period is postponed in
accordance with the foregoing, and if a Pay Out Event occurs after the date
originally scheduled as the commencement of the Accumulation Period, it is
probable that Certificateholders would receive some of their principal
later than if the Accumulation Period had not been so postponed.
Excess Principal Collections
Collections of Principal Receivables for any Monthly Period allocated
to the Invested Amount will first be used to cover, with respect to any
Monthly Period during either Amortization Period, payments to the Class A
Certificateholders and the Class B Certificateholders and then payments to
the Excess Collateral Holders. The Servicer will determine the amount of
collections of Principal Receivables for any Monthly Period allocated to
the Invested Amount remaining after covering required payments to the
Certificateholders or deposits with respect thereto and any similar amount
remaining for any other Series ("Excess Principal Collections"). The
Servicer will allocate the Excess Principal Collections to cover any
scheduled or permitted principal distributions to certificateholders and
deposits to principal funding accounts, if any, for any Series which have
not been covered out of the collections of Principal Receivables allocable
to such Series and certain other amounts for such Series. Excess Principal
Collections will not be used to cover investor charge-offs for any Series.
If principal shortfalls for all Series exceed Excess Principal Collections
for any Monthly Period, Excess Principal Collections will be allocated pro
rata among the applicable Series based on the relative amounts of principal
shortfalls. To the extent that Excess Principal Collections exceed
principal shortfalls for all Series, the balance will, subject to certain
limitations, be paid to the holder of the Exchangeable Transferor
Certificate. "Principal Shortfalls" means with respect to the Offered
Series and any Distribution Date (a) the sum of the amount, if any, by
which during the Accumulation Period the Controlled Deposit Amount exceeds
the sum of the Class A Monthly Principal, Class B Monthly Principal and
Excess Collateral Monthly Principal for the related Transfer Date or (b)
during the Rapid Amortization Period, (i) the amount, if any, by which the
Class A Invested Amount on such Distribution Date exceeds the Class A
Monthly Principal for the related Transfer Date, (ii) on and after the
Class B Principal Commencement Date, the amount, if any, by which the Class
B Invested Amount on such Distribution Date exceeds the Class B Monthly
Principal for the related Transfer Date and (iii) on and after the date on
which the Class B Invested Amount has been deposited in full in the
Principal Funding Account or paid in full, the amount, if any, by which the
Excess Collateral Amount on such Distribution Date exceeds the Excess
Collateral Monthly Principal for the related Transfer Date. "Class B
Principal Commencement Date" means (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 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 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.
Subordination of the Class B Certificates
The Class B Certificateholders' Interest will be subordinated to the
extent necessary to fund payments with respect to the Class A Certificates.
To the extent the Class B Invested Amount is reduced, the percentage of
collections of Finance Charge Receivables allocated to the Class B
Certificateholders in subsequent Monthly Periods will be reduced. Moreover,
to the extent the amount of such reduction in the Class B Invested Amount
is not reimbursed, the amount of principal distributable to the Class B
Certificateholders will be reduced. No principal will be paid to the Class
B Certificateholders until the Class A Invested Amount is paid in full.
If collections of Finance Charge Receivables allocable to the Class A
Certificateholders' Interest for any Monthly Period are insufficient to pay
Class A Monthly Interest, any overdue Class A Monthly Interest (with
default interest thereon), the Class A Investor Default Amount for such
Monthly Period, and, if the Transferor is not the Servicer, the Class A
Monthly Servicing Fee for such Monthly Period, then Excess Finance Charge
Collections will be applied to fund the amount of such deficiency. If
Excess Finance Charge Collections available with respect to such Monthly
Period are less than the Class A Required Amount, Reallocated Principal
Collections will be applied to fund the remaining Class A Required Amount
and the Excess Collateral Amount will be reduced until the Excess
Collateral Amount is equal to zero and then the Class B Invested Amount
will be reduced by the amount of Reallocated Class B Principal Collections
so used.
If Reallocated Principal Collections available with respect to such
Monthly Period are insufficient to fund the remaining Class A Required
Amount and the Excess Collateral Amount is reduced to zero, then a portion
of the Class B Invested Amount equal to such insufficiency (but not in
excess of the lesser of the Class A Investor Default Amount for such
Monthly Period and the Class B Invested Amount) will be allocated to the
Class A Certificates to avoid a reduction in the Class A Invested Amount,
and the Class B Invested Amount will be reduced by the amount so allocated.
Such reductions of the Class B Invested Amount will thereafter be
reimbursed and the Class B Invested Amount increased on each Distribution
Date by the amount, if any, of Excess Finance Charge Collections for such
Distribution Date allocated and available for such purpose. See "--Excess
Finance Charge Collections" and "--Reallocated Principal Collections"
herein.
Investor Percentage and Transferor Percentage
Pursuant to the Pooling and Servicing Agreement, during each Monthly
Period the Servicer will allocate among the Class A Certificateholders (the
"Class A Certificateholders' Interest"), the Class B Certificateholders
(the "Class B Certificateholders' Interest", and together with the Class A
Certificateholders' Interest, the "Investor Interest"), the Excess
Collateral Holders (the "Excess Collateral Holders' Interest"), the
Transferor Interest and the interest of the holders of the other Series
outstanding at such time all collections of Finance Charge Receivables and
all collections of Principal Receivables and all the amount of Receivables
in Defaulted Accounts with respect to such calendar month (each such month,
a "Monthly Period"). Collections of Finance Charge Receivables and the
amount of Receivables in Defaulted Accounts at all times and collections of
Principal Receivables during the Revolving Period will be allocated to the
Class A Certificateholders' Interest, the Class B Certificateholders'
Interest and the Excess Collateral Holders' Interest based on the
percentage equivalent of the ratio which each of the amount of the Class A
Adjusted Invested Amount, the Class B Adjusted Invested Amount or the
Excess Collateral Adjusted Amount, respectively, on the last day of the
preceding Monthly Period bears to the total amount of Principal Receivables
on the last day of the preceding Monthly Period (the "Class A Floating
Allocation Percentage," the "Class B Floating Allocation Percentage" and
the "Excess Collateral Floating Allocation Percentage," respectively, and
the sum of all three percentages, the "Investor Percentage"). During the
initial Monthly Period, the Class A Floating Allocation Percentage, the
Class B Floating Allocation Percentage and the Excess Collateral Floating
Allocation Percentage will equal the percentage equivalent of the ratio
which the amount of the initial Class A Invested Amount, the initial Class
B Invested Amount and the initial Excess Collateral Amount, respectively,
bears to the total amount of Principal Receivables on the Closing Date.
During the Revolving Period, all Principal Receivables allocable to the
Class A Certificates, the Class B Certificates and the Excess Collateral
will be allocated and paid to the holder of the Exchangeable Transferor
Certificate (except for (i) Reallocated Principal Collections used to pay
interest and certain other amounts on the Class A Certificates and Class B
Certificates and, if the Bank is not the Servicer, the Investor Servicing
Fee, as described under "--Reallocated Principal Collections" and
"--Servicing Compensation and Payment of Expenses," (ii) amounts paid to
the holders of certificates of other Series as Excess Principal
Collections, if any, and (iii) Unallocated Principal Collections). During
an Amortization Period, all Principal Receivables collected will be
allocated to the Offered Series based on the percentage equivalent of the
ratio which each of the Class A Invested Amount, the Class B Invested
Amount and the Excess Collateral Amount, respectively, at the end of the
last day of the Revolving Period bears to the greater of (a) the total
amount of Principal Receivables at the end of the last day of the preceding
Monthly Period and (b) the sum of the numerators used to calculate
allocation percentages with respect to Principal Receivables for each Class
of each Series outstanding for the current Distribution Date (the "Class A
Fixed/Floating Allocation Percentage," the "Class B Fixed/Floating
Allocation Percentage" and the "Excess Collateral Fixed/Floating Allocation
Percentage," respectively, and the sum of all three percentages, the
"Fixed/Floating Allocation Percentage") and the remainder will be allocated
to the Transferor Interest and the interest of certificateholders of other
Series, if any. Reallocated Excess Collateral Principal Collections will be
allocated during the Revolving Period based on the Excess Collateral
Floating Allocation Percentage. Reallocated Excess Collateral Principal
Collections will be allocated during an Amortization Period based on the
Excess Collateral Fixed/Floating Allocation Percentage. Reallocated Class B
Principal Collections will be allocated during the Revolving Period based
on the Class B Floating Allocation Percentage. Reallocated Class B
Principal Collections will be allocated during an Amortization Period based
on the Class B Fixed/Floating Allocation Percentage. However, with respect
to any Monthly Period in which Additional Accounts are added on a specified
date (an "Addition Date") to the Trust and the Servicer need not make daily
deposits of collections into the Collection Account, the denominator in the
definitions of the Class A Floating Allocation Percentage, the Class B
Floating Allocation Percentage and the Excess Collateral Floating
Allocation Percentage and the denominator determined pursuant to clause (a)
of the definitions of Fixed/Floating Allocation Percentage, Class A
Fixed/Floating Allocation Percentage, Class B Fixed/Floating Allocation
Percentage and Excess Collateral Fixed/Floating Allocation Percentage above
shall be the Average Principal Balance; provided, however, that with
respect to any Monthly Period in which an Addition Date occurs and the
Servicer is required to make daily deposits of collections into the
Collection Account, the denominators in the definitions of the Class A
Floating Allocation Percentage, the Class B Floating Allocation Percentage
and the Excess Collateral Floating Allocation Percentage and the
denominator determined pursuant to clause (a) of the definitions of
Fixed/Floating Allocation Percentage, Class A Fixed/Floating Allocation
Percentage, Class B Fixed/Floating Allocation Percentage and Excess
Collateral Fixed/Floating Allocation Percentage shall be (1) for the period
from and including the first day of such Monthly Period to but excluding
the related Addition Date the aggregate amount of Principal Receivables in
the Trust at the end of the day on the last day of the prior Monthly Period
and (2) for the period from and including the Addition Date through the
last day of such Monthly Period the aggregate amount of Principal
Receivables in the Trust at the end of the day on the related Addition
Date. "Average Principal Balance" means, for a Monthly Period in which
Additional Accounts are designated for inclusion in 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, 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, 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 to and
including the last day of such Monthly Period, and the denominator of which
is the number of days in such Monthly Period.
As used herein, the term "Class A Invested Amount" for any day means
an amount equal to (a) the initial principal balance of the Class A
Certificates, minus (b) the amount of principal payments made to Class A
Certificateholders prior to such date and minus (c) the excess, if any, of
the aggregate amount of Class A Investor Charge-Offs for all prior
Distribution Dates over the aggregate amount of any reimbursements of Class
A Investor Charge-Offs for all Distribution Dates preceding such date;
provided, however, that the Class A Invested Amount may not be reduced
below zero.
As used herein, the term "Class A Adjusted Invested Amount" for any
date of determination, means an amount not less than zero equal to the then
current Class A Invested Amount, minus the Principal Funding Account
Balance on such
date.
As used herein, the term "Class B Invested Amount" for any date means
an amount equal to (a) the initial principal balance of the Class B
Certificates, minus (b) the amount of principal payments made to Class B
Certificateholders prior to such date, minus (c) the aggregate amount of
Class B Investor Charge-Offs for all prior Distribution Dates, minus (d)
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 (e) 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 herein
under "-- Defaulted Receivables; Investor Charge-Offs" plus (f) the
aggregate amount of Excess Finance Charge Collections and certain other
amounts applied 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.
As used herein, the term "Class B Adjusted Invested Amount" for any
date of determination, means 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.
As used herein, the term "Excess Collateral Amount" means an amount
equal to (a) the initial Excess Collateral Amount, minus (b) the amount of
principal payments made to the Excess Collateral Holders prior to such
date, minus (c) the aggregate amount of Excess Collateral Charge-Offs for
all prior Distribution Dates, minus (d) the aggregate amount of Reallocated
Principal Collections for all prior Distribution Dates which have been used
to fund the Class A Required Amount or the Class B Required Amount, minus
(e) an amount equal to the aggregate amount by which the Excess Collateral
Amount has been reduced to fund the Class A Investor Default Amount and the
Class B Investor Default Amount on all prior Distribution Dates as
described under "--Defaulted Receivables; Investor Charge-Offs" plus (f)
the aggregate amount of Excess Finance Charge Collections and certain other
amounts allocated and available for purposes 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.
As used herein, the term "Excess Collateral Adjusted Amount" for any
date of determination, means 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.
As used herein, the term "Invested Amount" means the sum of the Class
A Invested Amount, the Class B Invested Amount and the Excess Collateral
Amount.
As used herein, the term "Transferor Percentage" means (a) when used
with respect to collections of Finance Charge Receivables and the amount of
Receivables in Defaulted Accounts, 100% minus the sum of the Class A
Floating Allocation Percentage, the Class B Floating Allocation Percentage
and the Excess Collateral Floating Allocation Percentage and the floating
allocation percentages for all other Series, (b) when used with respect to
collections of Principal Receivables during the Revolving Period, 100%
minus the sum of the Class A Floating Allocation Percentage, the Class B
Floating Allocation Percentage and the Excess Collateral Floating
Allocation Percentage and the allocation percentages for Principal
Receivables for all other Series and (c) when used with respect to
collections of Principal Receivables during the Accumulation Period or the
Rapid Amortization Period, 100% minus the sum of the Fixed/Floating
Allocation Percentage and the allocation percentages for Principal
Receivables for all other Series.
As a result of the Class A Floating Allocation Percentage, the Class
B Floating Allocation Percentage and the Excess Collateral Floating
Allocation Percentage, the portion of Receivables in Defaulted Accounts
allocated to the Class A Certificateholders, the Class B Certificateholders
and the Excess Collateral Holders as well as the collections of Finance
Charge Receivables allocated to the Class A Certificateholders and the
Class B Certificateholders will change for each Monthly Period based on the
relationship of the amount of the Class A Invested Amount, the Class B
Invested Amount and the Excess Collateral Amount to the total amount of
Principal Receivables on the last day of the preceding Monthly Period.
The numerator of the percentages of collections on Principal
Receivables allocable to the Class A Certificateholders, the Class B
Certificateholders and the Excess Collateral Holders, however, will remain
fixed during either Amortization Period. Collections of Principal
Receivables allocable to the Class B Certificates are subject to possible
reallocation for the benefit of the Class A Certificateholders and
collections of Principal Receivables allocable to the Excess Collateral are
subject to possible reallocation for the benefit of the Class A
Certificateholders and the Class B Certificateholders as described under
"--Reallocation of Cash Flows" below.
Reallocation of Cash Flows
On each Determination Date, the Servicer will determine the Class A
Required Amount and Class B Required Amount. The "Class A Required Amount"
means the amount, if any, by which the sum of Class A Monthly Interest and
any overdue Class A Monthly Interest on the related Distribution Date (and
default interest thereon), the Class A Investor Default Amount for the
related Monthly Period and, if the Bank is no longer the Servicer, the
Class A Monthly Servicing Fee for the related Monthly Period exceeds the
Class A Available Funds with respect to the related Monthly Period. The
"Class B Required Amount" means the sum of (i) the amount, if any, by which
the sum of Class B Monthly Interest and any overdue Class B Monthly
Interest on the related Distribution Date (and default interest thereon)
and, if the Bank is no longer the Servicer, the Class B Monthly Servicing
Fee for the related Monthly Period exceeds the Class B Available Funds with
respect to the related Monthly Period and (ii) the amount, if any, by which
the Class B Investor Default Amount for the related Monthly Period exceeds
the amount of Excess Finance Charge Collections available to make payments
with respect thereto on the related Transfer Date. If the Class A Required
Amount is greater than zero, Excess Finance Charge Collections will be used
to pay the Class A Required Amount with respect to such Distribution Date.
If such Excess Finance Charge Collections are insufficient to pay the Class
A Required Amount, Reallocated Principal Collections will then be used to
fund the remaining Class A Required Amount. If Reallocated Principal
Collections with respect to the related Monthly Period are insufficient to
fund the remaining Class A Required Amount for such related Monthly Period,
then a portion of the Excess Collateral Amount equal to such insufficiency
(but not in excess of the lesser of the Class A Investor Default Amount for
such Monthly Period and the Excess Collateral Amount) will be allocated to
the Class A Certificates to avoid a charge-off with respect to the Class A
Certificates. If the Excess Collateral Amount is reduced to zero, then a
portion of the Class B Invested Amount equal to any remaining insufficiency
(but not in excess of the lesser of the Class A Investor Default Amount for
such Monthly Period and the Class B Invested Amount) will be allocated to
the Class A Certificates to avoid a charge-off with respect to the Class A
Certificates. If the Class B Invested Amount is reduced to zero, the Class
A Invested Amount will be reduced by any remaining deficiency (but not in
excess of the Class A Investor Default Amount for such Monthly Period).
If the Class B Required Amount is greater than zero, any Reallocated
Excess Collateral Principal Collections remaining after application of such
amounts to any Class A Required Amount (after the application of Excess
Finance Charge Collections) will then be used to fund the Class B Required
Amount. If such remaining Reallocated Excess Collateral Principal
Collections with respect to the related Monthly Period are insufficient to
fund the Class B Required Amount for such related Monthly Period, then a
portion of any remaining Excess Collateral Amount equal to such
insufficiency (but not in excess of the lesser of the Class B Investor
Default Amount for such Monthly Period and the remaining Excess Collateral
Amount) will be allocated to the Class B Certificates to avoid a charge-off
with respect to the Class B Certificates. If the Excess Collateral Amount
is reduced to zero, the Class B Invested Amount will be reduced by any
remaining deficiency (but not in excess of the Class B Investor Default
Amount for such Monthly Period).
Application of Collections
Daily Allocations. The Servicer will instruct the Trustee to withdraw
from the Collection Account on each business day an amount equal to the
Transferor Percentage of the aggregate amount of such deposits in respect
of Principal Receivables and Finance Charge Receivables, respectively, and
pay such amounts to the holder of the Exchangeable Transferor Certificate;
provided, however, that if the Transferor Interest averaged for the
preceding 30 consecutive days and expressed as a percentage of the
aggregate amount of Principal Receivables is less than the Minimum
Transferor Interest such amount shall instead be deposited in the
Collection Account and applied as Unallocated Principal Collections.
With respect to the Certificates, the Servicer will instruct the
Trustee to make the following payments and deposits on each date of
processing; provided, however, that for so long as the Bank remains the
Servicer under the Pooling and Servicing Agreement and the Servicer has and
maintains a certificate of deposit rating of "P-1" by Moody's and of "A-1"
by Standard & Poor's and deposit insurance provided by either BIF or SAIF,
then the Servicer may make such deposits and payments on each Transfer Date
in an amount equal to the net amount of such deposits and payments which
would have been made had the conditions of this proviso not applied:
(a) during the Revolving Period, (i) allocate to the
Certificateholders an amount equal to the Investor Percentage of
collections of Finance Charge Receivables and retain in the Finance
Charge Account (A) prior to the Calculation Date in each Monthly
Period an amount equal to the product of the Investor Percentage and
the aggregate amount of collections of Finance Charge Receivables, or
(B) on and after each such Calculation Date, the lesser of (x) the
product of the Investor Percentage and the aggregate amount of
collections of Finance Charge Receivables and (y) the excess of (1)
the amounts owing to Certificateholders with respect to interest for
the Distribution Date following the then current Monthly Period
(plus, if the Transferor is not the Servicer, the Investor Servicing
Fee) over (2) the amounts previously deposited in the Finance Charge
Account with respect thereto; on each date of processing on and after
the Calculation Date collections of Finance Charge Receivables
allocated to the Certificates in excess of the amount required to be
retained in the Finance Charge Account as provided above shall be
held by the Servicer and applied on each Transfer Date as described
below and (ii) allocate to the Certificateholders an amount equal to
the product of (A) the Investor Percentage and (B) the aggregate
amount of collections of Principal Receivables on such date of
processing and pay such amount to the holder of the Exchangeable
Transferor Certificate subject to the obligation of such holder to
make an amount equal to the Reallocated Principal Collections and
Excess Principal Collections for such Monthly Period available on the
related Transfer Date as described below; provided, however, that the
amount to be paid to the holder of the Exchangeable Transferor
Certificate shall be paid only if the Transferor Interest averaged
for the preceding 30 consecutive days and expressed as a percentage
of the aggregate amount of Principal Receivables is greater than the
Minimum Transferor Interest (after giving effect to all Principal
Receivables transferred to the Trust on such day) and otherwise will
be deposited in the Collection Account and applied as Unallocated
Principal Collections; and provided, further, that on and after the
Calculation Date if the amounts previously deposited in the Finance
Charge Account with respect to the current Monthly Period are less
than the sum of the amounts owing to Certificateholders with respect
to interest for the Distribution Date following the then current
Monthly Period (plus, if the Transferor is not the Servicer, the
Investor 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) collections of
Principal Receivables on any 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 paid from the Principal Account to
the holder of the Exchangeable Transferor Certificate;
(b) during the Accumulation Period, (i) allocate to the
Certificateholders and retain in the Finance Charge Account an amount
equal to the product of (A) the Investor Percentage and (B) the
aggregate amount of collections of Finance Charge Receivables and
(ii) allocate to the Certificateholders and retain in the Principal
Account an amount equal to the product of (x) the Fixed/Floating
Allocation Percentage and (y) the aggregate amount of collections of
Principal Receivables (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 such holder to make an
amount equal to the Reallocated Principal Collections and Excess
Principal Collections for such Monthly Period available on the
related Transfer Date as described below), only if the Transferor
Interest expressed as a percentage of the aggregate amount of
Principal Receivables is greater than the Minimum Transferor Interest
(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 as Unallocated Principal Collections; 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 paid from the Principal
Account to the holder of the Exchangeable Transferor Certificate; and
(c) during the Rapid Amortization Period, (i) allocate to the
Certificateholders and retain in the Finance Charge Account an amount
equal to the product of (A) the Investor Percentage and (B) the
aggregate amount of collections of Finance Charge Receivables and
(ii) allocate to the Certificateholders and retain in the Principal
Account an amount equal to the product of (A) the Fixed/Floating
Allocation Percentage and (B) the aggregate amount of collections of
Principal Receivables; 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
Certificateholders, the amount determined above will be paid to the
holder of the Exchangeable Transferor Certificate only if the
Transferor Interest expressed as a percentage of the aggregate amount
of Principal Receivables is greater than the Minimum Transferor
Interest (after giving effect to all Principal Receivables
transferred to the Trust on such day) and otherwise will be deposited
in the Collection Account and applied as Unallocated Principal
Collections.
"Calculation Date" means __________, 1999 and the second business day
(as defined for purposes of determining LIBOR) prior to the 15th day of
each calendar month thereafter.
Monthly Deposits During the Revolving Period and Accumulation Period.
During the Revolving Period, the Servicer will deposit in the Finance
Charge Account on each Transfer Date an amount equal to (i) the lesser of
(A) the product of (x) the Investor Percentage with respect to the
preceding Monthly Period and (y) the aggregate amount of collections of
Finance Charge Receivables for the preceding 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 clauses (a)(i)
through (iii), (b)(i) and (ii) and (c)(i) under "--Monthly Allocations" as
described below and clauses (a) through (k) of "--Excess Finance Charge
Collections" less (ii) the amounts deposited in the Finance Charge Account
daily during such Monthly Period as described above in "--Daily
Allocations." During the Revolving Period and the Accumulation Period, on
each Transfer Date the Transferor will 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 retained in the Collection Account as
described above in "--Daily Allocations" with respect to the Revolving
Period or 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 the Offered
Series, not to exceed (a) during the Revolving Period, the Investor
Percentage of collections of Principal Receivables for the related Monthly
Period or (b) 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 Class A Monthly Principal,
Class B Monthly Principal or Excess Collateral Monthly Principal on the
related Distribution Date or Transfer Date, as applicable.
Monthly Allocations. On each Transfer Date, the Trustee, acting pursuant
to the Servicer's instructions, will make
the following payments and deposits:
(a) An amount equal to the Class A Available Funds for the
preceding Monthly Period will be distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any overdue Class A
Monthly Interest, plus any default interest with respect to
interest amounts that were due but not paid on a prior
Distribution Date, such interest to be computed at the Class A
Certificate Rate plus 2.0% per annum, will be deposited into
the Distribution Account for distribution to Class A
Certificateholders on the next succeeding Distribution Date;
(ii) if the Bank is no longer the Servicer, an amount
equal to the Class A Monthly Servicing Fee for the related
Monthly Period will be paid to the Servicer;
(iii) an amount equal to the Class A Investor Default
Amount, if any, for the related Monthly Period will be paid in
respect of principal to the holder of the Exchangeable
Transferor Certificate during the Revolving Period (provided
that if such amount exceeds the Transferor Interest, the excess
will be treated as Unallocated Principal Collections) and
deposited in the Principal Account and treated as a portion of
Available Investor Principal Collections during the
Amortization Period; and
(iv) the balance, if any, will constitute a portion of
Excess Finance Charge Collections and will be allocated and
distributed as described under "--Excess Finance
Charge Collections" below.
(b) An amount equal to the Class B Available Funds for the
preceding Monthly Period will be distributed in the following priority:
(i) an amount equal to Class B Monthly Interest for such
Distribution Date, plus the amount of any overdue Class B
Monthly Interest, plus any default interest with respect to
interest amounts that were due but not paid on a prior
Distribution Date, such interest to be computed at the Class B
Certificate Rate plus 2.0% per annum, will be deposited into
the Distribution Account for distribution to Class B
Certificateholders on the next succeeding Distribution Date;
(ii) if the Bank is no longer the Servicer, an amount
equal to the Class B Monthly Servicing Fee for the related
Monthly Period will be paid to the Servicer; and
(iii) the balance, if any, will constitute a portion of
Excess Finance Charge Collections and will be allocated and
distributed as described under "--Excess Finance
Charge Collections" below.
(c) An amount equal to the Excess Collateral Available Funds
for the preceding Monthly Period will be distributed in the following
priority:
(i) if the Bank is no longer the Servicer, an amount
equal to the Excess Collateral Monthly Servicing Fee for the
related Monthly Period will be paid to the Servicer; and
(ii) the balance, if any, will constitute a portion of
Excess Finance Charge Collections and will be allocated and
distributed as described under "--Excess Finance Charge
Collections" below.
"Excess Finance Charge Collections" means, with respect to any
Transfer Date, an amount equal to the sum of the amounts described in
clause (a)(iv), clause (b)(iii) and clause (c)(ii) above.
"Class A Monthly Interest" with respect to any Distribution Date will
be equal to the product of (i) the Class A Certificate Rate for the related
Interest Period, (ii) the actual number of days in such Interest Period
divided by 360 and (iii) the outstanding principal balance of the Class A
Certificates on the related Record Date or, with respect to the first
Distribution Date, the initial Class A Invested Amount.
"Class A Available Funds" means, with respect to any Monthly Period,
an amount equal to the sum of (a) the Class A Floating Allocation
Percentage of 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 A Invested
Amount, the product of (i) the Class A Account Percentage and (ii) the sum
of the Principal Funding Investment Proceeds, 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 as described under "--Reserve Account" herein.
"Class A Account Percentage" means, with respect to any Determination
Date, the percentage equivalent of a fraction, the numerator of which is
the aggregate amount on deposit in the Principal Funding Account with
respect to the Class A Certificates and the denominator of which is the
aggregate amount on deposit in the Principal Funding Account, in each case
as of the last day of the preceding Monthly Period.
"Class B Monthly Interest" with respect to any Distribution Date will
be equal to the product of (i) the Class B Certificate Rate for the related
Interest Period, (ii) the actual number of days in such Interest Period
divided by 360 and (iii) the Class B Invested Amount on the related Record
Date or, with respect to the first Distribution Date, the initial Class B
Invested Amount.
"Class B Available Funds" means, with respect to any Monthly Period,
an amount equal to the sum of (a) the Class B Floating Allocation
Percentage of 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, 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 as described under "--Reserve Account" herein.
"Class B Account Percentage" means, with respect to any Determination
Date, the percentage equivalent of a fraction, the numerator of which is
the aggregate amount on deposit in the Principal Funding Account with
respect to the Class B Certificates, if any, and the denominator of which
is the aggregate amount on deposit in the Principal Funding Account, in
each case as of the last day of the preceding Monthly Period.
"Excess Collateral Available Funds" means, with respect to any
Monthly Period, an amount equal to the sum of (a) the Excess Collateral
Floating Allocation Percentage of 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,
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 as described under
"--Reserve Account" herein.
"Excess Collateral Account Percentage" means, with respect to any
Determination Date, the percentage equivalent of a fraction, the numerator
of which is the aggregate amount on deposit in the Principal Funding
Account with respect to the Excess Collateral, if any, and the denominator
of which is the aggregate amount on deposit in the Principal Funding
Account, in each case as of the last day of the preceding Monthly Period.
The figure below demonstrates the manner in which collections of
Finance Charge Receivables are allocated and applied to Series 1999-__. The
figure is a simplified demonstration of certain allocation and payment
provisions and is qualified by the full descriptions of these provisions in
this supplement and the attached prospectus.
Allocations of Collections of Finance Charge Receivables
[CHART SHOWING ALLOCATIONS OF COLLECTIONS OF FINANCE CHARGE RECEIVABLES]
Excess Finance Charge Collections
On each Transfer Date, the Servicer will apply or cause the Trustee
to apply 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 Amount;
(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 each Transfer Date 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 thereafter will be deposited into the
Principal Account and treated as a portion of Available Investor
Principal Collections for the related Distribution Date as described
under "--Payments of Principal" below;
(c) an amount equal to the amount of interest which has accrued
with respect to the outstanding aggregate principal amount of the
Class B Certificates 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 on the related
Distribution Date or on any prior Distribution Date as described in
clause (b)(i) of "--Application of Collections--Monthly Allocations"
above but not yet paid 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 each
Transfer Date with respect to the Revolving Period (but not exceeding
the Transferor Interest 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 an Amortization Period will be
deposited into the Principal Account and treated as a portion of
Available Investor Principal Collections for the related Distribution
Date as described under "--Payments of Principal" below;
(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 amount of such
reductions which have not been previously reimbursed) will be
distributed to the holder of the Exchangeable Transferor Certificate
on each Transfer Date with respect to the Revolving Period, but not
in an amount exceeding the Transferor Interest 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 an
Amortization Period will be deposited into the Principal Account and
treated as a portion of Available Investor Principal Collections for
the related Distribution Date as described under "-- Payments of
Principal" below;
(f) an amount equal to Excess Collateral Minimum Monthly
Interest for the related Transfer Date, plus the amount of any
overdue Excess Collateral Minimum Monthly Interest, will be paid to
the Excess Collateral Holders in accordance with the Transfer and
Administration Agreement;
(g) an amount equal to the unpaid Investor 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 each
Transfer Date with respect to the Revolving Period (but not exceeding
the Transferor Interest 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 an Amortization Period will be
deposited into the Principal Account and treated as a portion of
Available Investor Principal Collections for the related Distribution
Date as described under "--Payments of Principal" below;
(i) an amount equal to the aggregate amount by which the Excess
Collateral Amount has been reduced below the initial Excess
Collateral 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 each Transfer Date with respect to the Revolving
Period, but not in an amount exceeding the Transferor Interest 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 an Amortization Period will be deposited into the
Principal Account and treated as a portion of Available Investor
Principal Collections for the related Distribution Date as described
under "--Payments of Principal" below;
(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 under "-- Reserve Account," 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 clauses (a) through (j) above shall be paid to the
Excess Collateral Holders in accordance with a Transfer and
Administration Agreement between a Delaware business trust and the
Bank (the "Transfer and Administration
Agreement").
"Excess Collateral Minimum Monthly Interest" with respect to any
Transfer Date will be equal to the product of (i) the Excess Collateral
Minimum Rate for the related Interest Period, (ii) the actual number of
days in the related Interest Period divided by 360 and (iii) the Excess
Collateral Amount on the related Record Date or, with respect to the first
Transfer Date, the initial Excess Collateral Amount.
"Excess Collateral Minimum Rate" means LIBOR plus % per annum or such
lesser rate as may be specified in the Transfer and Administration
Agreement.
Payments of Principal
The Trustee, acting pursuant to the Servicer's instructions, will
distribute Available Investor Principal Collections (see "--Principal
Payments" above) on deposit in the Principal Account in the following
priority:
(a) on each Transfer Date with respect to the Revolving Period,
all Available Investor Principal Collections with respect to the
preceding Monthly Period will be treated as Excess Principal
Collections and applied as described under "--Excess Principal
Collections" herein and "Description of the Certificates--Shared
Collections of Principal Receivables" in the attached prospectus;
(b) with respect to the Accumulation Period or the Rapid
Amortization Period, all Available Investor Principal Collections
with respect to the preceding Monthly Period will be distributed or
deposited in the following
priority:
(i) an amount equal to the Class A Monthly Principal will
be deposited on each Transfer Date in the Principal Funding
Account for distribution to the Class A Certificateholders on
the Class A Scheduled Payment Date (with respect to the
Accumulation Period) or distributed to the Class A
Certificateholders on each Distribution Date until the Class A
Invested Amount is paid in full (with respect to the Rapid
Amortization Period);
(ii) on the Transfer Date related to the Class B
Principal Commencement Date and on each Transfer Date
thereafter, an amount equal to the Class B Monthly Principal
will be deposited in the Principal Funding Account for
distribution to the Class B Certificateholders on the Class B
Scheduled Payment Date (with respect to the Accumulation
Period) or distributed to the Class B Certificateholders on
each Distribution Date until the Class B Invested Amount is
paid in full (with respect to the Rapid Amortization Period);
and
(iii) on the Transfer Date related to the Distribution
Date on which the Class B Invested Amount is deposited in full
in the Principal Funding Account or paid in full to the Class B
Certificateholders and on each Transfer Date thereafter, an
amount equal to the Excess Collateral Monthly Principal will be
deposited in the Principal Funding Account for distribution to
the Excess Collateral Holders on the Transfer Date immediately
preceding the Excess Collateral Scheduled Payment Date (with
respect to the Accumulation Period) or distributed to the
Excess Collateral Holders on each Transfer Date until the
Excess Collateral Amount is paid in full (with respect to the
Rapid Amortization Period); and
(c) on each Transfer Date with respect to the Accumulation
Period and the Rapid Amortization Period, the balance of Available
Investor Principal Collections not applied pursuant to (a) and (b)
above, if any, will be treated as Excess Principal Collections and
applied as described under "--Excess Principal Collections" herein
and "Description of the Certificates--Shared Collections of Principal
Receivables" in the attached prospectus.
"Class A Monthly Principal" means, with respect to any Transfer Date
relating to the Accumulation Period or the Rapid Amortization Period, prior
to the payment in full of the Class A Invested Amount, 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, (ii) for each
Transfer Date with respect to the Accumulation Period, prior to the payment
in full of the Class A Invested Amount, and on or prior to the Class A
Scheduled Payment Date, the applicable Controlled Deposit Amount for such
Transfer Date and (iii) the Class A Adjusted Invested Amount on such
Transfer Date.
"Class B Monthly Principal" with respect to each Transfer Date
relating to the Accumulation Period or the Rapid Amortization Period
beginning with the Transfer Date first preceding the Class B Principal
Commencement Date, prior to the payment in full of the Class B Invested
Amount, will equal the least of (i) the Available Investor Principal
Collections remaining on deposit in the Principal Account with respect to
such Transfer Date after application thereof to Class A Monthly Principal,
if any, (ii) for each Transfer Date with respect to the Accumulation
Period, prior to the Class B Scheduled Payment Date, the applicable
Controlled Deposit Amount for such Transfer Date (minus the Class A Monthly
Principal with respect to such Transfer Date) and (iii) the Class B
Adjusted Invested Amount on such Transfer Date.
"Excess Collateral Monthly Principal" with respect to each Transfer
Date relating to the Accumulation Period or the Rapid Amortization Period
beginning with the Transfer Date first preceding the Distribution Date on
which the Class B Invested Amount is deposited in full in the Principal
Funding Account or paid in full, prior to the payment in full of the Excess
Collateral Amount, will equal the least of (i) the Available Investor
Principal Collections remaining on deposit in the Principal Account with
respect to such Transfer Date after application thereof to Class A Monthly
Principal and Class B Monthly Principal, if any, (ii) for each Transfer
Date with respect to the Accumulation Period, prior to the Excess
Collateral Scheduled Payment Date, the applicable Controlled Deposit Amount
for such Transfer Date (minus the Class A Monthly Principal and the Class B
Monthly Principal with respect to such Transfer Date) and (iii) the Excess
Collateral Adjusted Amount on such Transfer Date.
"Controlled Accumulation Amount" means for any Transfer Date with
respect to the Accumulation Period, prior to the payment in full of the
Invested Amount, $__________; provided, however, that if the commencement
of the Accumulation Period is delayed as described above under
"--Postponement of Accumulation Period," the Controlled Accumulation Amount
may be higher than the amount stated above for each Transfer Date with
respect to the Accumulation Period and will be determined by the Servicer
in accordance with the Pooling and Servicing Agreement based on the
principal payment rates for the Accounts and on the invested amounts of
other Series (other than certain excluded Series) which are scheduled to be
in their revolving periods and then scheduled to create Excess Principal
Collections during the Accumulation Period.
"Accumulation Shortfall" initially means zero and thereafter means,
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 as
described in clause (b) of this section with respect to the Certificates
for the previous Monthly Period.
The figure below demonstrates the manner in which collections of
Principal Receivables are allocated and applied to Series 1999-__. The
figure is a simplified demonstration of certain allocation and payment
provisions and is qualified by the full descriptions of these provisions in
this supplement and the attached prospectus.
Allocations of Collections of Principal Receivables
[CHART SHOWING ALLOCATIONS OF COLLECTIONS OF PRINCIPAL RECEIVABLES]
Reallocated Principal Collections
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 (a) below are called "Reallocated Excess
Collateral Principal Collections"):
(a) an amount equal to the sum of (i) 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 (ii) the Class B Required
Amount with respect to the related Monthly Period; and
(b) any such collections not applied in the foregoing manner
(and therefore not constituting Reallocated Excess Collateral
Principal Collections) will, on each Distribution Date with respect
to the Revolving Period, first be applied as Excess Principal
Collections for the benefit of other Series and then be distributed
to the holder of the Exchangeable Transferor Certificate, if the
Transferor Interest expressed as a percentage of the aggregate amount
of Principal Receivables is equal to or greater than the Minimum
Transferor Interest, or applied as Unallocated Principal Collections
and on Distribution Dates with respect to an Amortization Period will
be included in the funds available to make principal payments to the
Class A Certificateholders until the Class A Invested Amount is paid
in full and then to the Class B Certificateholders until the Class B
Invested Amount is paid in full and then to the Excess Collateral
Holders until the Excess Collateral Amount is paid in full.
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 (a) below are called "Reallocated Class B Principal
Collections" and the sum of Reallocated Excess Collateral Principal
Collections and Reallocated Class B Principal Collections is called
"Reallocated Principal Collections"):
(a) 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 (i) the amount of Excess Finance Charge Collections with
respect to such related Monthly Period and (ii) the amount of
Reallocated Excess Collateral Principal Collections applied with
respect thereto for the related Monthly Period; and
(b) any such collections not applied in the foregoing manner
(and therefore not constituting Reallocated Class B Principal
Collections) will, on each Distribution Date with respect to the
Revolving Period, first be applied as Excess Principal Collections
for the benefit of other Series and then be distributed to the holder
of the Exchangeable Transferor Certificate, if the Transferor
Interest expressed as a percentage of the aggregate amount of
Principal Receivables is equal to or greater than the Minimum
Transferor Interest, or applied as Unallocated Principal Collections
and on Distribution Dates with respect to an Amortization Period will
be included in the funds available to make principal payments to the
Class A Certificateholders until the Class A Invested Amount is paid
in full and then to the Class B Certificateholders until the Class B
Invested Amount is paid in full and then to the Excess Collateral
Holders until the Excess Collateral Amount is paid in full.
On each Distribution Date the Excess Collateral Amount will 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 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 the reallocation of collections of
Principal Receivables would cause the Class B Invested Amount to be a
negative number on any Distribution Date, collections of Principal
Receivables will be reallocated on such Distribution Date in an aggregate
amount not to exceed the amount which would cause the Class B Invested
Amount to be reduced to zero.
Defaulted Receivables; Investor Charge-Offs
On each Determination Date, the Servicer will calculate the Investor
Default Amount for the preceding Monthly Period. The term "Default Amount"
means, for any Monthly Period, an amount (which shall not be less than
zero) equal to (a) the aggregate amount of Principal Receivables (other
than Ineligible Receivables) in Defaulted Accounts on the day such Account
became a Defaulted Account for each day in such Monthly Period minus (b)
the aggregate amount of Recoveries received in such Monthly Period. The
term "Investor Default Amount" means, for any Monthly Period, the product
of (i) the Investor Percentage with respect to such Monthly Period and (ii)
the Default Amount for such Monthly Period. A portion of the Default Amount
will be allocated to the Class A Certificateholders (the "Class A Investor
Default Amount") on each Distribution Date in an amount equal to the
product of the Class A Floating Allocation Percentage applicable during the
related Monthly Period and the Default Amount for such Monthly Period. A
portion of the Default Amount will be allocated to the Class B
Certificateholders (the "Class B Investor Default Amount") on each
Distribution Date in an amount equal to the product of the Class B Floating
Allocation Percentage applicable during the related Monthly Period and the
Default Amount for such Monthly Period. A portion of the Default Amount
will be allocated to the Excess Collateral Holders (the "Excess Collateral
Default Amount") on each Distribution Date in an amount equal to the
product of the Excess Collateral Floating Allocation Percentage applicable
during the related Monthly Period and the Default Amount for such Monthly
Period.
On each Distribution Date, if the Class A Investor Default Amount for
such Distribution Date exceeds the sum of the Class A Floating Allocation
Percentage of collections in respect of Finance Charge Receivables
allocable with respect thereto, and the Excess Finance Charge Collections
and the Reallocated Principal Collections available to cover such amount
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 lesser of the Class A Investor Default Amount
and 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 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"), which will have the effect of slowing or
reducing the return of principal to the Class A Certificateholders. 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 Transfer 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 as described herein under "--Excess Finance Charge
Collections."
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 Excess Collateral Principal Collections which
are allocated and available to fund such amount, 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 lesser of the Class B Investor Default Amount
and 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 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, 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 applied
to cover shortfalls in excess of the Excess Collateral Amount and the
amount of any portion of the Class B Invested Amount allocated to the Class
A Certificates to avoid a reduction in the Class A Invested Amount. The
Class B Invested Amount will thereafter be reimbursed (but not in the
excess of the unpaid principal balance of the Class B Certificates) on any
Transfer Date by the amount of Excess Finance Charge Collections allocated
and available for that purpose as described herein under "--Excess Finance
Charge Collections."
If on any Distribution Date, the Excess Collateral Default Amount for
such Distribution Date exceeds the amount of Excess Finance Charge
Collections which are allocated and available to fund such amount as
described herein under "-- Excess Finance Charge Collections," 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 lesser of the Excess
Collateral Default Amount and 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 and the amount of any portion of the Excess
Collateral Amount allocated to the Class A Certificates to avoid a
reduction in the Class A Invested Amount or to the Class B Certificates to
avoid a reduction in the Class B Invested Amount. The Excess Collateral
Amount will thereafter be reimbursed on any Transfer Date by the amount of
Excess Finance Charge Collections allocated and available for that purpose
as described herein under "--Excess Finance Charge Collections."
Principal Funding Account
The Servicer will establish and maintain with a Qualified Institution
a principal funding account as a segregated trust account held for the
benefit of the Certificateholders (the "Principal Funding Account"). During
the Accumulation Period, the Trustee at the direction of the Servicer shall
transfer collections in respect of Principal Receivables (other than
Reallocated Principal Collections) and Excess Principal Collections from
other Series, if any, allocated to the Offered Series from the Principal
Account to the Principal Funding Account as described under "--Application
of Collections." Such collections will be retained in the Principal Funding
Account and ultimately used to pay the principal of the Certificates on the
Class A Scheduled Payment Date, the Class B Scheduled Payment Date and the
Excess Collateral Scheduled Payment Date or the first Distribution Date
with respect to the Rapid Amortization Period, whichever occurs earlier.
Funds on deposit in the Principal Funding Account will be invested to
the following Transfer Date by the Trustee at the direction of the Servicer
in Permitted Investments. Investment earnings (net of investment losses and
expenses) on funds on deposit in the Principal Funding Account (the
"Principal Funding Investment Proceeds") during the Accumulation Period
will be included in Class A Available Funds, Class B Available Funds and
Excess Collateral Available Funds. If, for any Interest Period, the
Principal Funding Investment Proceeds are less than an amount equal to, for
each Interest Period, the Covered Amount, the amount of such deficiency
will be paid from the Reserve Account to the extent of the Available
Reserve Account Amount and, if necessary, from Excess Finance Charge
Collections and Reallocated Principal Collections.
Reserve Account
Pursuant to the Offered Series Supplement, the Servicer will
establish and maintain with a Qualified Institution the reserve account as
a segregated trust account held for the benefit of the Certificateholders
(the "Reserve Account"). The Reserve Account is established to assist with
the subsequent distribution of interest on the Certificates during the
Accumulation Period. On each Transfer Date from and after the Reserve
Account Funding Date, but prior to the termination of the Reserve Account,
the Trustee, acting pursuant to the Servicer's instructions, will apply
Excess Finance Charge Collections allocated to the Certificates (to the
extent described above under "--Excess Finance Charge Collections") to
increase the amount on deposit in the Reserve Account (to the extent such
amount is less than the Required Reserve Account Amount). The "Reserve
Account Funding Date" will be the Transfer Date which commences no later
than three months prior to the commencement of the Accumulation Period, or
such earlier date as the Servicer may determine. The "Required Reserve
Account Amount" for any Transfer Date on or after the Reserve Account
Funding Date will be equal to (a) 0.5% of the Invested Amount or (b) any
other amount designated by First USA; provided, that if such designation is
of a lesser amount, First USA shall have provided the Servicer, the Excess
Collateral Holders and the Trustee with evidence that the Rating Agency
Condition with respect to such designation has been satisfied and First USA
shall have delivered 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 First USA, 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 the Offered
Series.
Provided that the Reserve Account has not terminated as described
below, all amounts on deposit in the Reserve Account on any Transfer Date
(after giving effect to any deposits to, or withdrawals from, the Reserve
Account to be made on such Transfer Date) will be invested to the following
Transfer Date by the Trustee at the direction of the Servicer in Permitted
Investments. The interest and other investment income (net of investment
expenses and losses) earned on such investments will be retained in the
Reserve Account (to the extent the amount on deposit is less than the
Required Reserve Account Amount) or deposited in the Finance Charge Account
for application as described in "--Application of Collections-- Monthly
Allocations."
On or before each Transfer Date with respect to the Accumulation
Period and on the first Transfer Date with respect to the Rapid
Amortization Period, a withdrawal will be made from the Reserve Account and
the amount of such withdrawal will be included in Class A Available Funds,
Class B Available Funds and Excess Collateral Available Funds to be applied
to the payment of interest on the Certificates for such Transfer Date in an
amount equal to the lesser of (a) the Available Reserve Account Amount with
respect to such Transfer Date and (b) the excess, if any, of (x) 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 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 (the "Covered Amount") over (y)
the Principal Funding Investment Proceeds with respect to such Transfer
Date; provided, that the amount of such withdrawal shall be reduced to the
extent that funds otherwise would be available to be deposited in the
Reserve Account on such Transfer Date. On each Transfer Date, the amount
available to be withdrawn from the Reserve Account (the "Available Reserve
Account Amount") will be equal to the lesser of the amount on deposit in
the Reserve Account (before giving effect to any deposit to be made to the
Reserve Account on such Transfer Date) and the Required Reserve Account
Amount for such Transfer Date.
The Reserve Account will be terminated following the earliest to
occur of (a) the termination of the Trust pursuant to the Pooling and
Servicing Agreement, (b) the date on which the Invested Amount is paid in
full, (c) if the Accumulation Period has not commenced, the occurrence of a
Pay Out Event with respect to the Certificates and (d) 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.
Upon the termination of the Reserve Account, all amounts on deposit therein
(after giving effect to any withdrawal from the Reserve Account on such
date as described above) will be deposited in the Finance Charge Account
and applied in accordance with the priority of payments described herein
under "--Application of Collections-- Monthly Allocations." Any amounts
withdrawn from the Reserve Account and distributed to the Excess Collateral
Holders as described above will not be available for distribution to the
Class A Certificateholders or the Class B Certificateholders.
Companion Series
The Series 1999-__ Certificates may be paired with one or more other
Series (each a "Companion Series"). Each Companion Series either will be
prefunded with an initial deposit to a prefunding account in an amount up
to the initial principal balance of such Companion Series, funded primarily
from the proceeds for the sale of such Companion Series, or will have a
variable principal amount. Any such prefunding account will be held for the
benefit of such Companion Series and not for the benefit of
Certificateholders. As principal is paid with respect to the Series 1999-__
Certificates, either (i) in the case of a prefunded Companion Series, an
equal amount of funds on deposit in any prefunding account for such
prefunded Companion Series will be released (which funds will be
distributed to First USA) or (ii) in the case of a Companion Series having
a variable principal amount, an interest in such variable Companion Series
in an equal or lesser amount may be sold by the Trust (and the proceeds
thereof will be distributed to First USA) and, in either case, the invested
amount in the Trust of such Companion Series will increase by up to
corresponding amount. Upon payment in full of the Series 1999-__
Certificates, assuming that there have been no unreimbursed charge-offs
with respect to any related Companion Series, the aggregate invested amount
of such related Companion Series will have been increased by an amount up
to an aggregate amount equal to the Series 1999-__ Investor Interest paid
to the Series 1999-__ Certificateholders since the issuance of such
Companion Series. The issuance of a Companion Series will be subject to the
conditions described under "Description of the Certificates--Exchanges" in
the attached prospectus. There can be no assurance, however, that the terms
of any Companion Series might not have an impact on the timing or amount of
payments received by a Series 1999-__ Certificateholder. In particular, the
denominator of the Fixed/Floating Allocation Percentage may be increased
upon the occurrence of a Pay Out Event with respect to a Companion Series
resulting in a possible reduction of the percentage of collections of
Principal Receivables allocated to Series 1999-__ if such event allowed the
payment of principal at such time to the Companion Series and required
reliance by Series 1999-__ on clause (y) of the denominator of the
Fixed/Floating Allocation Percentage for Series 1999-__. See "Maturity
Considerations."
Pay Out Events
As described above, the Revolving Period will continue until the
commencement of the Accumulation Period, unless a Pay Out Event occurs
prior to such date. A "Pay Out Event" refers to any of the following
events:
(a) failure on the part of the Transferor (i) to make any
payment or deposit on the date required under the Pooling and
Servicing Agreement (or within the applicable grace period which will
not exceed five days) or (ii) to observe or perform in any material
respect any other covenants or agreements of the Transferor set forth
in the Pooling and Servicing Agreement or the Offered Series
Supplement, which failure has a material adverse effect on the
Certificateholders and which continues unremedied for a period of
60 days after written notice and continues to materially and
adversely affect the interests of the Certificateholders (which
determination shall be made without regard to whether funds are
available pursuant to any Enhancement) for such period;
(b) any representation or warranty made by the Transferor in the
Pooling and Servicing Agreement or any information required to be
given by the Transferor to the Trustee to identify the Accounts
proves to have been incorrect in any material respect when made and
which continues to be incorrect in any material respect for a period
of 60 days after written notice and as a result of which the
interests of the Certificateholders are materially and adversely
affected and continue to be materially and adversely affected for
such period; provided, however, that a Pay Out Event pursuant to this
clause (b) shall not be deemed to occur thereunder if the Transferor
has accepted reassignment of the related Receivable or all such
Receivables, if applicable, during such period (or such longer period
as the Trustee may specify) in accordance with the provisions
thereof;
(c) certain events of insolvency or receivership relating to the
Transferor;
(d) the average Portfolio Yield for any three consecutive
Monthly Periods is less than the average Base Rate for such three
consecutive Monthly Periods;
(e) the Trust becomes an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(f) a failure by the Transferor to convey Receivables arising
under Additional Accounts to the Trust when required by the Pooling
and Servicing Agreement; or
(g) any Servicer Default occurs which would have a material
adverse effect on the Certificateholders.
In the case of any event described in clause (a), (b) or (g) above, a
Pay Out Event will be deemed to have occurred with respect to the
Certificates only if, after any applicable grace period, either the Trustee
or Certificateholders evidencing undivided interests aggregating more than
50% of the Investor Interest, by written notice to the Transferor and the
Servicer (and to the Trustee if given by the Certificateholders) declare
that a Pay Out Event has occurred with respect to the Certificates as of
the date of such notice. In the case of any event described in clause (c)
or (e), a Pay Out Event with respect to all Series then outstanding, and in
the case of any event described in clause (d) or (f), a Pay Out Event with
respect to only the Certificates, will be deemed to have occurred without
any notice or other action on the part of the Trustee or the
Certificateholders or all certificateholders, as appropriate, immediately
upon the occurrence of such event. On the date on which a Pay Out Event is
deemed to have occurred, the Rapid Amortization Period will commence. In
such event, distributions of principal to the Certificateholders will begin
on the first Distribution Date following the month in which such Pay Out
Event occurred. If, because of the occurrence of a Pay Out Event, the Rapid
Amortization Period begins earlier than the close of business on the last
day of the __________ ____ Monthly Period Certificateholders will begin
receiving distributions of principal earlier than they otherwise would
have, which may shorten the average life of the Certificates.
If pursuant to certain provisions of Federal law, the Transferor
voluntarily enters liquidation or a receiver is appointed for the
Transferor, on the day of such event the Transferor will immediately cease
to transfer Principal Receivables to the Trust and promptly give notice to
the Trustee of such event. Within 15 days, the Trustee will publish a
notice of the liquidation or the appointment stating that the Trustee
intends to sell, dispose of, or otherwise liquidate the Receivables in a
commercially reasonable manner. With respect to each Series outstanding at
such time, unless otherwise instructed within a specified period by
certificateholders representing undivided interests aggregating more than
50% of the invested amount of such Series (or, if such Series has more than
one Class, of each Class of such Series, and with respect to Series
required to vote as a group, all Classes of all such Series), the Trustee
will sell, dispose of, or otherwise liquidate the portion of the
Receivables allocated to the Series with respect to which all outstanding
Classes did not vote to continue the Trust in accordance with the Pooling
and Servicing Agreement in a commercially reasonable manner and on
commercially reasonable terms. The proceeds from the sale, disposition or
liquidation of the Receivables will be treated as collections of the
Receivables and applied with respect to such Series as provided above under
"--Application of Collections." If the only Pay Out Event to occur is
either the insolvency of the Transferor or the appointment of a conservator
or receiver for the Transferor, the conservator or receiver may have the
power to prevent the early sale, liquidation or disposition of the
Receivables and the commencement of the Rapid Amortization Period. In
addition, a conservator or receiver may have the power to cause the early
sale of the Receivables and the early retirement of the Certificates. See
"Description of the Certificates--Pay Out Events" in the attached
prospectus for an additional discussion of the consequences of an
insolvency, conservatorship or receivership of the Transferor.
Optional Repurchase
The Invested Amount will be subject to optional repurchase by the
Transferor 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), if certain conditions set
forth in the Pooling and Servicing Agreement are met. The repurchase price
will be equal to the Invested Amount plus accrued and unpaid interest on
the Certificates through the last day of the Interest Period related to the
Distribution Date on which the repurchase occurs. See "Description of the
Certificates--Final Payment of Principal; Termination" in the attached
prospectus.
Servicing Compensation and Payment of Expenses
The Servicer's compensation for its servicing activities and
reimbursement for its expenses will take the form of the payment to it of a
monthly servicing fee in an amount equal to the sum of, with respect to all
Series, one-twelfth of the product of the applicable servicing fee
percentages with respect to each Series and the allocable portion of the
Transferor Interest and the average amount of the Principal Receivables
during each month. The monthly servicing fee will be allocated between the
Transferor Interest, the Investor Interest and the Excess Collateral
Holders' Interest and the investor interests for all other Series. The
portion of the servicing fee allocable to the Investor Interest and the
Excess Collateral Holders' Interest on each Distribution Date (the
"Investor Servicing Fee") will be equal to one-twelfth of the product of
the Servicing Fee Percentage and the sum of the Class A Adjusted Invested
Amount, the Class B Adjusted Invested Amount and the Excess Collateral
Adjusted Amount on the last day of the related Monthly Period or, in the
case of the first Distribution Date, the product of (i) the actual number
of days from and including the Closing Date to and including __________,
1999 divided by 365, (ii) the Servicing Fee Percentage and (iii) the
initial Invested Amount. "Class A Monthly Servicing Fee," "Class B Monthly
Servicing Fee," and "Excess Collateral Monthly Servicing Fee," mean, with
respect to any Distribution Date, one-twelfth of the product of the
Servicing Fee Percentage and the Class A Adjusted Invested Amount, Class B
Adjusted Invested Amount or Excess Collateral Adjusted Amount, as
applicable, on the last day of the preceding Monthly Period. The "Servicing
Fee Percentage" will mean 1.5% for so long as the Bank is the Servicer or
2.0% if the Bank is no longer the Servicer. The Investor Servicing Fee will
be funded from Excess Finance Charge Collections and, with respect to a
Servicer other than the Bank, from the Investor Percentage of collections
of Finance Charge Receivables and Reallocated Principal Collections. The
remainder of the servicing fee will be allocable to the Transferor Interest
and the investor interests of other Series. None of the Trust, the
Certificateholders nor the Excess Collateral Holders will have any
obligation to pay such portion of the servicing fee.
The Servicer will pay from its servicing compensation certain
expenses incurred in connection with servicing the Receivables including,
without limitation, payment of the fees and disbursements of the Trustee
and independent certified public accountants and other fees which are not
expressly stated in the Pooling and Servicing Agreement to be payable by
the Trust, the Certificateholders or the Excess Collateral Holders other
than Federal, state and local income and franchise taxes, if any, of the
Trust.
Reports to Certificateholders
The Trustee will publish or will cause to be published following each
Distribution Date (including the Stated Series Termination Date) in a daily
newspaper in Luxembourg (expected to be the Luxemburger Wort) a notice to
the effect that the information described in "Description of the
Certificates--Reports to Certificateholders" in the attached prospectus
will be available for review at the main office of the listing agent of the
Trust in Luxembourg.
Notices to Certificateholders will be given by publication in a daily
newspaper in Luxembourg, which is expected to be the Luxemburger Wort. In
the event that Definitive Certificates are issued, notices to
Certificateholders will also be given by mail to the addresses of such
holders as they appear in the Certificate register.
Listing and General Information
Application has been made to list the Offered Certificates on the
Luxembourg Stock Exchange. In connection with the listing application, the
Amended and Restated Articles of Association and By-laws of the Bank, as
well as legal notice relating to the issuance of the Offered Certificates
will be deposited prior to listing with the Chief Registrar of the District
Court in Luxembourg, where copies thereof may be obtained upon request.
Once the Offered Certificates have been so listed, trading of the Offered
Certificates may be effected on the Luxembourg Stock Exchange. The Class A
Certificates and the Class B Certificates have been accepted for clearance
through the facilities of DTC, Cedelbank and Euroclear (ISIN number for the
Class A Certificates is ____________, and for the Class B Certificates
____________, and Common Code number for the Class A Certificates is
____________, and for the Class B Certificates ____________).
The transactions contemplated in this prospectus supplement were
authorized by resolutions adopted by the Bank on February 3, 1999.
Copies of the Pooling and Servicing Agreement, the Offered Series
Supplement, the annual report of independent public accountants described
in "Description of the Certificates--Evidence as to Compliance" in the
attached prospectus, the documents listed under "Where You Can Find More
Information" and the reports to Certificateholders referred to under
"Reports to Certificateholders" and "Description of the
Certificates--Reports to Certificateholders" in the attached prospectus
will be available at the office of the listing agent of the Trust in
Luxembourg, whose address is 14 Boulevard Royal, 2449 Luxembourg,
Grand-Duche de Luxembourg. Financial information regarding the Bank is
included in the consolidated financial statements of BANK ONE in BANK ONE's
Annual Report for the fiscal year ended December 31, 199_, which documents
are also available at the office of the listing agent in Luxembourg.
The Certificates, the Pooling and Servicing Agreement and the Offered
Series Supplement are governed by the laws of the State of Delaware.
ERISA Considerations
Section 406 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") and Section 4975 of the Code prohibit certain pension,
profit sharing or other employee benefit plans, individual retirement
accounts or annuities and employee annuity plans and Keogh plans
(collectively, "Benefit Plans") from engaging in certain transactions
involving "plan assets" with persons that are "parties in interest" under
ERISA or "disqualified persons" under the Code (collectively, "Parties in
Interest") with respect to the Benefit Plan. A violation of these
"prohibited transaction" rules may generate excise tax and other
liabilities under ERISA and Section 4975 of the Code for such persons,
unless a statutory, regulatory or administrative exemption is available.
Benefit Plans that are governmental plans (as defined in section 3(32) of
ERISA) and certain church plans (as defined in section 3(33) of ERISA) are
not subject to ERISA requirements.
Class A Certificates
A violation of the prohibited transaction rules could occur if the
Class A Certificates were to be purchased with assets of any Plan if the
Transferor, the Trustee, any underwriters of such Series or any of their
affiliates were a Party in Interest with respect to such Plan, unless a
statutory, regulatory or administrative exemption is available or an
exemption applies under a regulation (the "Plan Asset Regulation") issued
by the Department of Labor ("DOL"). The Transferor, the Trustee, any
underwriters of a Series and their affiliates are likely to be Parties in
Interest with respect to many Plans. Before purchasing the Class A
Certificates, a Plan fiduciary or other Plan investor should consider
whether a prohibited transaction might arise by reason of the relationship
between the Plan and the Transferor, the Trustee, any underwriters of such
Series or any of their affiliates and consult their counsel regarding the
purchase in light of the considerations described below and in the
accompanying prospectus.
Under certain circumstances, the Plan Asset Regulation treats the
assets of an entity in which a Plan holds an equity interest as "plan
assets" of such Plan. Because the Class A Certificates will represent
beneficial interests in the Trust, and despite the agreement of the
Transferor and the Certificate Owners to treat the Class A Certificates as
debt instruments, the Class A Certificates are likely to be considered
equity interests in the Trust for purposes of the Plan Asset Regulation,
with the result that the assets of the Trust are likely to be treated as
"plan assets" of the investing Plans for purposes of ERISA and Section 4975
of the Code, unless the exception for "publicly-offered securities" is
applicable as described in the accompanying prospectus. The Underwriters
anticipate that the Class A Certificates will meet the criteria for
treatment as "publicly-offered securities" as described in the accompanying
prospectus. No restrictions will be imposed on the transfer of the Class A
Certificates. It is expected that the Class A Certificates will be held by
at least 100 or more investors who were independent of the issuer and of
one another ("Independent Investors") at the conclusion of the initial
public offering although no assurance can be given, and no monitoring or
other measures will be taken to ensure, that such condition is met. The
Class A Certificates will be sold as part of an offering pursuant to an
effective registration statement under the Act and then will be timely
registered under the Exchange Act.
If the foregoing exception under the Plan Asset Regulation were not
satisfied, transactions involving the Trust and Parties in Interest with
respect to a Plan that purchases or holds Class A Certificates might be
prohibited under Section 406 of ERISA and/or Section 4975 of the Code and
result in excise tax and other liabilities under ERISA and Section 4975 of
the Code unless an exemption were available. The five DOL class exemptions
described in the accompanying prospectus may not provide relief for all
transactions involving the assets of the Trust even if they would otherwise
apply to the purchase of a Class A Certificate by a Plan.
Class B Certificates
The Underwriter currently does not expect that the Class B
Certificates will be held by at least 100 Independent Investors and,
therefore, does not expect that such Class B Certificates will qualify as
publicly-offered securities under the regulation referred to in the
preceding paragraph. Accordingly, the Class B Certificates may not be
acquired or held by (a) any employee benefit plan that is subject to ERISA,
(b) any plan or other arrangement (including an individual retirement
account or Keogh plan) that is subject to Section 4975 of the Code, or (c)
any entity whose underlying assets include "plan assets" under the
regulation by reason of any such plan's investment in the entity. By its
acceptance of a Class B Certificate, each Class B Certificateholder will be
deemed to have represented and warranted that it is not and will not be
subject to the foregoing limitation.
Consultation with Counsel
In light of the foregoing, fiduciaries or other persons contemplating
purchasing Class A Certificates or Class B Certificates on behalf or with
"plan assets" of any Benefit Plan should consult their own counsel
regarding whether the Trust assets represented by the Class A Certificates
or Class B Certificates would be considered "plan assets," the consequences
that would apply if the Trust's assets were considered "plan assets," and
the possibility of exemptive relief from the prohibited transaction rules.
Finally, Benefit Plan fiduciaries and other Benefit Plan investors
should consider the fiduciary standards under ERISA or other applicable law
in the context of the Benefit Plan's particular circumstances before
authorizing an investment of a portion of the Benefit Plan's assets in the
Certificates. Accordingly, among other factors, Benefit Plan fiduciaries
and other Benefit Plan investors should consider whether the investment (i)
satisfies the diversification requirement of ERISA or other applicable law,
(ii) is in accordance with the Benefit Plan's governing instruments, and
(iii) is prudent in light of the "Risk Factors" discussed in this
supplement and other factors discussed in this supplement and the attached
prospectus.
Underwriting
Subject to the terms and conditions set forth in the Underwriting
Agreement dated __________, ____ (the "Underwriting Agreement") between
First USA and the underwriters named below (the "Underwriters"), First USA
has agreed to sell to the Underwriters and the Underwriters have agreed to
purchase, the principal amount of the Offered Certificates offered hereby
if any of the Offered Certificates are purchased.
<TABLE>
<CAPTION>
Principal Principal
Amount of Amount of
Class A Class B
Underwriters Certificates Certificates
- ------------ ------------ ------------
<S> <C> <C>
$ $
- -
Total $ $
- ----- - -
================== ================
</TABLE>
The price to public, Underwriters' discounts and commissions, the
concessions that the Underwriters may allow to certain dealers, and the
discounts that such dealers may reallow to certain other dealers, each
expressed as a percentage of the principal amount of the Class A and Class
B Certificates, shall be as follows:
<TABLE>
<CAPTION>
Selling
Underwriting concessions, Reallowance,
Price to discount and not to not to
public commissions exceed exceed
-------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Class A Certificates % % % %
Class B Certificates % % % %
</TABLE>
After the offering is completed, First USA will receive the proceeds,
after deduction of the underwriting and other expenses, listed below:
<TABLE>
<CAPTION>
Proceeds to Transferor Underwriting
(as % of the principal discounts
Proceeds to amount of and
Transferor the Certificates) commissions
----------- ---------------------- ------------
<S> <C> <C> <C>
Class A Certificates $ % $
Class B Certificates $ % $
</TABLE>
After the public offering, the public offering price and other
selling terms may be changed by the Underwriters.
The Underwriters may engage in over-allotment, stabilizing
transactions, syndicate covering transactions and penalty bids with respect
to the Offered Certificates in accordance with Regulation M under the
Exchange Act. Over-allotment transactions involve syndicate sales in excess
of the offering size, which create a syndicate short position. Stabilizing
transactions permit bids to purchase the Offered Certificates so long as
the stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Offered Certificates in the open
market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Underwriters to reclaim
a selling concession from a syndicate member when the Offered Certificates
originally sold by such syndicate member are purchased in a syndicate
covering transaction to cover syndicate short positions. Such
over-allotment transactions, stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of the Offered
Certificates to be higher than it would otherwise be in the absence of such
transactions. Neither the Transferor nor the Underwriters represent that
the Underwriters will engage in any such transactions or that such
transactions, once commenced, will not be discontinued without notice at
any time.
Each Underwriter has represented and agreed that (a) it has only
issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issue of the Offered
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, (b) it has complied and will 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 Offered Certificates in, from or otherwise involving the
United Kingdom and (c) if the Underwriter is an authorized person under the
Financial Services Act 1986, it has only promoted and will 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 herein 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.
The Transferor will indemnify each Underwriter against certain
liabilities, including liabilities under the Securities Act or contribute
to payments the Underwriter may be required to make in respect thereof.
Each Underwriter has agreed to reimburse the Transferor for certain
expenses incurred in connection with the issuance and distribution of the
Offered Certificates.
In the ordinary course of business, each Underwriter and its
affiliates have engaged and may engage in investment banking and/or
commercial banking transactions with the Transferor, its affiliates and the
Trust. In addition, each Underwriter may from time to time take positions
in the Certificates and other certificates issued by the Trust.
First Chicago Capital Markets, Inc. ("FCCM") and Banc One Capital
Markets, Inc. ("BOCM") are affiliates of the Transferor. Any obligations of
FCCM or BOCM are the sole obligations of FCCM or BOCM, respectively, and do
not create any obligations on the part of any of their affiliates.
FCCM and BOCM may from time to time purchase or acquire a position in
the Certificates and may, at each of their options, hold or resell such
Certificates. FCCM and BOCM expect to offer and sell previously issued
Certificates in the course of their respective businesses as
broker-dealers. FCCM and BOCM may each act as a principal or an agent in
such transactions. This supplement and the attached prospectus may be used
by FCCM or BOCM and in connection with such transactions. Such sales, if
any, will be made at varying prices related to prevailing market prices at
the time of sale.
Exchange Listing
We have applied to list the Certificates on the Luxembourg Stock
Exchange. We cannot guaranty that the application for the listing will be
accepted. You should consult with Banque de Luxembourg, S.A., the
Luxembourg listing agent for the Certificates, 14 Boulevard Royal, 2449
Luxembourg, Grand-Duche de Luxembourg, phone number (352) 499243063, to
determine whether or not the Certificates are listed on the Luxembourg
Stock Exchange.
ANNEX I
OTHER SERIES
The Trust has previously issued ______ other Series that the
Transferor anticipates will remain outstanding on the Closing Date. The
table below sets forth the principal characteristics of such Series: Series
1993-3, Series 1994-4, Series 1994-6, Series 1994-7, Series 1994-8, Series
1995-1, Series 1995-2, Series 1995-5, Series 1995-6, Series 1996-1, Series
1996-2, Series 1996-3, Series 1996-4, Series 1996-6, Series 1996-7, Series
1996-8, Series 1997-1, Series 1997-2, Series 1997-3, Series 1997-4, Series
1997-5, Series 1997-6, Series 1997-7, Series 1997-8, Series 1997-9, Series
1997-10, Series 1998-1, Series 1998-2, Series 1998-3, Series 1998-4, Series
1998-5, Series 1998-6, Series 1998-7, Series 1998-8 and Series 1998-9. For
more specific information with respect to any Series, any prospective
investor should contact the Servicer at (214) 849-3700. The Servicer will
provide, without charge, to any prospective purchaser of the Certificates,
a copy of the disclosure documents for any previous publicly issued Series.
Series 1993-3
Initial Invested Amount $750,000,000
Invested Amount on December 15, 1998 $250,000,000
Certificate Rate One Month LIBOR + 0.25%
Controlled Amortization Amount $62,500,000
Commencement of Controlled Amortization Period April 1, 1998
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Cash Collateral Amount $97,500,000
Expected Series Termination Date April 15, 1999
Scheduled Series Termination Date December 15, 2000
Series Issuance Date October 14, 1993
Series 1994-4
1. Class A Certificates
Initial Invested Amount $726,450,000
Certificate Rate One Month LIBOR + 0.37%
Controlled Amortization Amount $60,537,500
Commencement of Controlled Amortization Period November 1, 2000
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Collateral Invested Amount $87,000,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date November 15, 2001
Scheduled Series Termination Date August 15, 2003
Series Issuance Date June 9, 1994
2. Class B Certificates
Initial Invested Amount $56,550,000
Certificate Rate One Month LIBOR + 0.58%
Controlled Amortization Amount $56,550,000
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Collateral Invested Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1994-6
1. Class A Certificates
Initial Invested Amount $750,000,000
Certificate Rate One Month LIBOR + 0.35%
Controlled Amortization Amount $62,500,000
Commencement of Controlled Amortization Period January 1, 2001
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Collateral Invested Amount $89,820,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date January 15, 2002
Scheduled Series Termination Date October 15, 2003
Series Issuance Date August 24, 1994
2. Class B Certificates
Initial Invested Amount $58,380,000
Certificate Rate One Month LIBOR + 0.58%
Controlled Amortization Amount $58,380,000
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Collateral Invested Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1994-7
1. Class A Certificates
Initial Invested Amount $750,000,000
Certificate Rate One Month LIBOR + 0.18%
Controlled Accumulation Amount
(subject to adjustment) $750,000,000
Commencement of Accumulation Period
(subject to adjustment) September 30, 1999
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Collateral Invested Amount $94,880,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date November 15, 1999
Scheduled Series Termination Date June 15, 2002
Series Issuance Date November 8, 1994
2. Class B Certificates
Initial Invested Amount $58,735,000
Certificate Rate One Month LIBOR + 0.40%
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Collateral Invested Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1994-8
1. Class A Certificates
Initial Invested Amount $500,000,000
Certificate Rate Three Month LIBOR + 0.24%
Controlled Accumulation Amount
(subject to adjustment) $41,666,667
Commencement of Accumulation Period
(subject to adjustment) October 31, 2000
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Collateral Invested Amount $63,253,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date November 15, 2001
Scheduled Series Termination Date June 15, 2004
Series Issuance Date November 8, 1994
2. Class B Certificates
Initial Invested Amount $39,157,000
Certificate Rate Three Month LIBOR + 0.45%
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Collateral Invested Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1995-1
1. Class A Certificates
Initial Invested Amount $1,000,000,000
Certificate Rate One Month LIBOR + 0.14%
Controlled Accumulation Amount
(subject to adjustment) $1,000,000,000
Commencement of Accumulation Period
(subject to adjustment) January 31, 1999
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Collateral Invested Amount $126,500,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date March 15, 1999
Scheduled Series Termination Date October 15, 2001
Series Issuance Date March 1, 1995
2. Class B Certificates
Initial Invested Amount $78,300,000
Certificate Rate One Month LIBOR + 0.35%
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Collateral Invested Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1995-2
1. Class A Certificates
Initial Invested Amount $660,000,000
Certificate Rate One Month LIBOR + 0.24%
Controlled Accumulation Amount
(subject to adjustment) $55,000,000
Commencement of Accumulation Period
(subject to adjustment) February 28, 2001
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Collateral Invested Amount $83,500,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date March 15, 2002
Scheduled Series Termination Date October 15, 2004
Series Issuance Date March 1, 1995
2. Class B Certificates
Initial Invested Amount $51,700,000
Certificate Rate One Month LIBOR + 0.425%
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Collateral Invested Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1995-5
1. Class A Certificates
Initial Invested Amount $500,000,000
Certificate Rate One Month LIBOR + 0.17%
Controlled Accumulation Amount
(subject to adjustment) $41,666,667
Commencement of Accumulation Period
(subject to adjustment) August 31, 1999
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Collateral Invested Amount $57,230,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date September 15, 2000
Scheduled Series Termination Date April 15, 2003
Series Issuance Date September 14, 1995
2. Class B Certificates
Initial Invested Amount $45,180,000
Certificate Rate One Month LIBOR + 0.29%
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Collateral Invested Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1995-6
1. Class A Certificates
Initial Invested Amount $1,245,000,000
Certificate Rate One Month LIBOR + 0.17%
Controlled Accumulation Amount
(subject to adjustment) $103,750,000
Commencement of Accumulation Period
(subject to adjustment) October 31, 1999
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Collateral Invested Amount $142,500,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date November 10, 2000
Scheduled Series Termination Date July 10, 2003
Series Issuance Date December 7, 1995
2. Class B Certificates
Initial Invested Amount $112,500,000
Certificate Rate One Month LIBOR + 0.33%
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Collateral Invested Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1996-1
1. Class A Certificates
Initial Invested Amount $750,000,000
Certificate Rate One Month LIBOR + 0.16%
Controlled Accumulation Amount
(subject to adjustment) $75,301,250
Commencement of Accumulation Period
(subject to adjustment) February 29, 2000
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $85,845,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date March 15, 2001
Scheduled Series Termination Date November 15, 2003
Series Issuance Date March 6, 1996
2. Class B Certificates
Initial Invested Amount $67,770,000
Certificate Rate One Month LIBOR + 0.29%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1996-2
1. Class A Certificates
Initial Invested Amount $600,000,000
Certificate Rate One Month LIBOR + 0.18%
Controlled Accumulation Amount
(subject to adjustment) $60,250,000
Commencement of Accumulation Period
(subject to adjustment) May 31, 2002
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $68,700,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date June 10, 2003
Scheduled Series Termination Date February 10, 2006
Series Issuance Date June 4, 1996
2. Class B Certificates
Initial Invested Amount $54,300,000
Certificate Rate One Month LIBOR + 0.33%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1996-3
1. Class A Certificates
Initial Invested Amount $400,000,000
Certificate Rate One Month LIBOR + 0.10%
Controlled Accumulation Amount
(subject to adjustment) $40,166,667
Commencement of Accumulation Period
(subject to adjustment) April 30, 1999
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $45,800,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date June 10, 1999
Scheduled Series Termination Date February 10, 2002
Series Issuance Date June 6, 1996
2. Class B Certificates
Initial Invested Amount $36,200,000
Certificate Rate One Month LIBOR + 0.23%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1996-4
1. Class A Certificates
Initial Invested Amount $500,000,000
Certificate Rate One Month LIBOR + 0.19%
Controlled Accumulation Amount
(subject to adjustment) $50,200,834
Commencement of Accumulation Period
(subject to adjustment) July 31, 2005
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $57,230,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date August 10, 2006
Scheduled Series Termination Date April 10, 2009
Series Issuance Date August 6, 1996
2. Class B Certificates
Initial Invested Amount $45,180,000
Certificate Rate One Month LIBOR + 0.37%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1996-6
1. Class A Certificates
Initial Invested Amount $862,650,000
Certificate Rate One Month LIBOR + 0.14%
Controlled Accumulation Amount
(subject to adjustment) $86,616,667
Commencement of Accumulation Period
(subject to adjustment) October 31, 2002
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $98,750,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date November 10, 2003
Scheduled Series Termination Date July 10, 2006
Series Issuance Date November 13, 1996
2. Class B Certificates
Initial Invested Amount $78,000,000
Certificate Rate One Month LIBOR + 0.35%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1996-7
1. Class A Certificates
Initial Invested Amount $483,060,000
Certificate Rate One Month LIBOR + 0.095%
Controlled Accumulation Amount
(subject to adjustment) $48,500,000
Commencement of Accumulation Period
(subject to adjustment) January 31, 1999
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $55,290,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date February 10, 2000
Scheduled Series Termination Date October 10, 2002
Series Issuance Date December 11, 1996
2. Class B Certificates
Initial Invested Amount $43,650,000
Certificate Rate One Month LIBOR + 0.29%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1996-8
1. Class A Certificates
Initial Invested Amount $400,000,000
Certificate Rate One Month LIBOR + 0.12%
Controlled Accumulation Amount
(subject to adjustment) $40,166,667
Commencement of Accumulation Period
(subject to adjustment) December 31, 2002
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $45,800,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date January 10, 2004
Scheduled Series Termination Date September 10, 2006
Series Issuance Date December 11, 1996
2. Class B Certificates
Initial Invested Amount $36,200,000
Certificate Rate One Month LIBOR + 0.34%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1997-1
1. Class A Certificates
Initial Invested Amount $750,000,000
Certificate Rate One Month LIBOR + 0.10%
Controlled Accumulation Amount
(subject to adjustment) $75,301,250
Commencement of Accumulation Period
(subject to adjustment) January 31, 2003
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $85,845,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date February 17, 2004
Scheduled Series Termination Date October 17, 2006
Series Issuance Date February 4, 1997
2. Class B Certificates
Initial Invested Amount $67,770,000
Certificate Rate One Month LIBOR + 0.31%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1997-2
1. Class A Certificates
Initial Invested Amount $500,000,000
Certificate Rate One Month LIBOR + 0.13%
Controlled Accumulation Amount
(subject to adjustment) $50,200,834
Commencement of Accumulation Period
(subject to adjustment) April 30, 2003
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $57,230,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date May 17, 2004
Scheduled Series Termination Date January 17, 2007
Series Issuance Date May 8, 1997
2. Class B Certificates
Initial Invested Amount $45,180,000
Certificate Rate One Month LIBOR + 0.33%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1997-3
1. Class A Certificates
Initial Invested Amount $500,000,000
Certificate Rate One Month LIBOR + 0.11%
Controlled Accumulation Amount
(subject to adjustment) $50,200,834
Commencement of Accumulation Period
(subject to adjustment) May 31, 2001
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $57,230,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date June 17, 2002
Scheduled Series Termination Date February 17, 2005
Series Issuance Date June 10, 1997
2. Class B Certificates
Initial Invested Amount $45,180,000
Certificate Rate One Month LIBOR + 0.29%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1997-4
1. Class A Certificates
Initial Invested Amount $500,000,000
Certificate Rate One Month LIBOR + 0.21%
Controlled Accumulation Amount
(subject to adjustment) $50,200,834
Commencement of Accumulation Period
(subject to adjustment) May 31, 2006
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $57,230,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date June 17, 2007
Scheduled Series Termination Date February 17, 2010
Series Issuance Date June 10, 1997
2. Class B Certificates
Initial Invested Amount $45,180,000
Certificate Rate One Month LIBOR + 0.41%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1997-5
1. Class A Certificates
Initial Invested Amount $650,000,000
Certificate Rate One Month LIBOR + 0.14%
Controlled Accumulation Amount
(subject to adjustment) $65,260,834
Commencement of Accumulation Period
(subject to adjustment) July 31, 2003
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $74,395,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date August 17, 2004
Scheduled Series Termination Date April 17, 2007
Series Issuance Date August 7, 1997
2. Class B Certificates
Initial Invested Amount $58,735,000
Certificate Rate One Month LIBOR + 0.33%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1997-6
1. Class A Certificates
Initial Invested Amount $1,300,000,000
Certificate Rate 6.42%
Controlled Accumulation Amount
(subject to adjustment) $130,521,667
Commencement of Accumulation Period
(subject to adjustment) June 30, 2001
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $148,790,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date July 17, 2002
Scheduled Series Termination Date March 17, 2005
Series Issuance Date September 9, 1997
2. Class B Certificates
Initial Invested Amount $117,470,000
Certificate Rate 6.58%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1997-7
1. Class A Certificates
Initial Invested Amount $500,000,000
Certificate Rate One Month LIBOR + 0.098%
Controlled Accumulation Amount
(subject to adjustment) $50,200,834
Commencement of Accumulation Period
(subject to adjustment) August 31, 2003
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $57,230,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date September 17, 2004
Scheduled Series Termination Date May 17, 2007
Series Issuance Date September 9, 1997
2. Class B Certificates
Initial Invested Amount $45,180,000
Certificate Rate One Month LIBOR + 0.30%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1997-8
1. Class A Certificates
Initial Invested Amount $780,000,000
Certificate Rate One Month LIBOR + 0.15%
Controlled Accumulation Amount
(subject to adjustment) $78,313,334
Commencement of Accumulation Period
(subject to adjustment) August 31, 2006
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $89,278,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date September 17, 2007
Scheduled Series Termination Date March 17, 2010
Series Issuance Date September 23, 1997
2. Class B Certificates
Initial Invested Amount $70,482,000
Certificate Rate One Month LIBOR + 0.36%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1997-9
1. Class A Certificates
Initial Invested Amount $500,000,000
Certificate Rate One Month LIBOR + 0.06%
Controlled Accumulation Amount
(subject to adjustment) $50,200,834
Commencement of Accumulation Period
(subject to adjustment) September 30, 2003
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificate Amount $57,230,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date October 17, 2004
Scheduled Series Termination Date June 17, 2007
Series Issuance Date October 9, 1997
2. Class B Certificates
Initial Invested Amount $45,180,000
Certificate Rate One Month LIBOR + 0.33%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1997-10
1. Class A Certificates
Initial Invested Amount $700,000,000
Certificate Rate One Month LIBOR + 0.09%
Controlled Accumulation Amount
(subject to adjustment) $70,281,167
Commencement of Accumulation Period
(subject to adjustment) December 31, 1999
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial CIA Certificates Amount $80,121,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date January 17, 2001
Scheduled Series Termination Date September 17, 2003
Series Issuance Date December 23, 1997
2. Class B Certificates
Initial Invested Amount $63,253,000
Certificate Rate One Month LIBOR + 0.27%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial CIA Certificate Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1998-1
1. Class A Certificates
Initial Invested Amount $700,000,000
Certificate Rate One Month LIBOR + 0.08%
Controlled Accumulation Amount
(subject to adjustment) $70,281,167
Commencement of Accumulation Period
(subject to adjustment) April 30, 2002
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Excess Collateral Amount $80,121,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date May 18, 2003
Scheduled Series Termination Date January 18, 2006
Series Issuance Date May 21, 1998
2. Class B Certificates
Initial Invested Amount $63,253,000
Certificate Rate One Month LIBOR + 0.25%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Excess Collateral Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1998-2
1. Class A Certificates
Initial Invested Amount $579,000,000
Certificate Rate One Month LIBOR - 0.125%
Controlled Accumulation Amount
(subject to adjustment) $58,132,667
Commencement of Accumulation Period
(subject to adjustment) May 31, 2007
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Excess Collateral Amount $66,272,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date June 18, 2008
Scheduled Series Termination Date February 18, 2011
Series Issuance Date May 21, 1998
2. Class B Certificates
Initial Invested Amount $52,320,000
Certificate Rate One Month LIBOR - 0.125%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Excess Collateral Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1998-3
1. Class A Certificates
Initial Invested Amount $800,000,000
Certificate Rate One Month LIBOR + 0.06%
Controlled Accumulation Amount
(subject to adjustment) $80,321,334
Commencement of Accumulation Period
(subject to adjustment) May 31, 2000
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Excess Collateral Amount $91,567,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date June 18, 2001
Scheduled Series Termination Date February 18, 2004
Series Issuance Date June 25, 1998
2. Class B Certificates
Initial Invested Amount $72,289,000
Certificate Rate One Month LIBOR + 0.22%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Excess Collateral Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1998-4
1. Class A Certificates
Initial Invested Amount $700,000,000
Certificate Rate One Month LIBOR + 0.12%
Controlled Accumulation Amount
(subject to adjustment) $70,281,167
Commencement of Accumulation Period
(subject to adjustment) June 30, 2004
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Excess Collateral Amount $80,121,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date July 18, 2005
Scheduled Series Termination Date March 18, 2008
Series Issuance Date July 22, 1998
2. Class B Certificates
Initial Invested Amount $63,253,000
Certificate Rate One Month LIBOR + 0.30%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Excess Collateral Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1998-5
1. Class A Certificates
Initial Invested Amount $650,000,000
Certificate Rate One Month LIBOR + 0.10%
Controlled Accumulation Amount
(subject to adjustment) $65,260,834
Commencement of Accumulation Period
(subject to adjustment) July 31, 2002
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Excess Collateral Amount $74,395,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date August 18, 2003
Scheduled Series Termination Date April 18, 2006
Series Issuance Date August 27, 1998
2. Class B Certificates
Initial Invested Amount $58,735,000
Certificate Rate One Month LIBOR + 0.28%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Excess Collateral Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1998-6
1. Class A Certificates
Initial Invested Amount $800,000,000
Certificate Rate One Month LIBOR + 0.16%
Controlled Accumulation Amount
(subject to adjustment) $80,321,334
Commencement of Accumulation Period
(subject to adjustment) July 31, 2007
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Excess Collateral Amount $91,567,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date August 18, 2008
Scheduled Series Termination Date April 18, 2011
Series Issuance Date August 27, 1998
2. Class B Certificates
Initial Invested Amount $72,289,000
Certificate Rate One Month LIBOR + 0.36%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Excess Collateral Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1998-7
1. Class A Certificates
Initial Invested Amount $750,000,000
Certificate Rate One Month LIBOR + 0.10%
Controlled Accumulation Amount
(subject to adjustment) $75,301,250
Commencement of Accumulation Period
(subject to adjustment) July 31, 2000
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Excess Collateral Amount $85,845,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date August 18, 2001
Scheduled Series Termination Date April 18, 2004
Series Issuance Date September 17, 1998
2. Class B Certificates
Initial Invested Amount $67,770,000
Certificate Rate One Month LIBOR + 0.30%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Excess Collateral Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1998-8
1. Class A Certificates
Initial Invested Amount $500,000,000
Certificate Rate One Month LIBOR + 0.15%
Controlled Accumulation Amount
(subject to adjustment) $50,200,833
Commencement of Accumulation Period
(subject to adjustment) August 31, 2004
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Excess Collateral Amount $57,230,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date September 19, 2005
Scheduled Series Termination Date May 19, 2008
Series Issuance Date September 17, 1998
2. Class B Certificates
Initial Invested Amount $45,180,000
Certificate Rate One Month LIBOR + 0.41%
Controlled Accumulation Amount Same as above for Class A
Certificates
(subject to adjustment)
Commencement of Accumulation Period Same as above for Class A
Certificates
(subject to adjustment)
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Excess Collateral Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
Series 1998-9
1. Class A Certificates
Initial Invested Amount $650,000,000
Certificate Rate 5.28%
Controlled Accumulation Amount $62,260,584
(subject to adjustment)
Commencement of Accumulation Period December 31, 2002
(subject to adjustment)
Annual Servicing Fee Percentage 1.5%, subject to increase
to 2.0%
Initial Excess Collateral Amount $52,299,000
Other Enhancement Subordination of Class B
Certificates
Expected Final Payment Date January 20, 2004
Scheduled Series Termination Date September 18, 2006
Series Issuance Date December 22, 1998
2. Class B Certificates
Initial Invested Amount $44,828,000
Certificate Rate 5.55%
Controlled Accumulation Amount
(subject to adjustment) Same as above for Class A
Certificates
Commencement of Accumulation Period
(subject to adjustment) Same as above for Class A
Certificates
Annual Servicing Fee Percentage Same as above for Class A
Certificates
Initial Excess Collateral Amount Same as above for Class A
Certificates
Expected Final Payment Date Same as above for Class A
Certificates
Scheduled Series Termination Date Same as above for Class A
Certificates
Series Issuance Date Same as above for Class A
Certificates
ANNEX II
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered First
USA Credit Card Master Trust Floating Rate Asset Backed Certificates,
Series 1999-__, Class A and Class B (the "Global Securities") will be
available only in book-entry form. Investors in the Global Securities may
hold such Global Securities through any of The Depository Trust Company
("DTC"), Cedelbank or Euroclear. The Global Securities will be tradeable as
home market instruments in both the European and U.S. domestic markets.
Initial settlement and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through Cedelbank and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in
accordance with conventional eurobond practice (i.e., seven calendar day
settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures
applicable to U.S. corporate debt obligations and prior First USA Credit
Card Master Trust issues.
Secondary cross-market trading between Cedelbank Customers or
Euroclear Participants holding Certificates will be effected on a
delivery-against-payment basis through the respective Depositaries of
Cedelbank and Euroclear (in such capacity) and as Cedelbank Customers or
Euroclear Participants.
Non-U.S. holders (as described below) of Global Securities will be
subject to U.S. withholding taxes unless such holders meet certain
requirements and deliver appropriate U.S. tax documents to the securities
clearing organizations or their participants.
Initial Settlement. All Global Securities will be held in book-entry
form by DTC in the name of Cede & Co. as nominee of DTC. Investors'
interests in the Global Securities will be represented through financial
institutions acting on their behalf as direct and indirect Participants. As
a result, Cedelbank and Euroclear will hold positions on behalf of their
participants through their respective Depositaries, which in turn will hold
such positions in accounts as Participants.
Investors electing to hold their Global Securities through DTC will
follow the settlement practices applicable to U.S. corporate debt
obligations and prior First USA Credit Card Master Trust issues. Investor
securities custody accounts will be credited with their holdings against
payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedelbank
or Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global
security and no "lock-up" or restricted period. Global Securities will be
credited to the securities custody accounts on the settlement date against
payment in same-day funds.
Secondary Market Trading. Since the purchaser determines the place of
delivery, it is important to establish at the time of the trade where both
the purchaser's and seller's accounts are located to ensure that settlement
can be made on the desired value date.
Trading between DTC Participants. Secondary market trading between
Participants will be settled using the procedures applicable to prior First
USA Credit Card Master Trust issues in same-day funds.
Trading between Cedelbank Customers and/or Euroclear Participants.
Secondary market trading between Cedelbank Customers or Euroclear
Participants will be settled using the procedures applicable to
conventional eurobonds in same-day funds.
Trading between DTC seller and Cedelbank or Euroclear purchaser. When
Global Securities are to be transferred from the account of a Participant
to the accounts of a Cedelbank Customer or a Euroclear Participant, the
purchaser will send instructions to Cedelbank or Euroclear through a
Cedelbank Customer or Euroclear Participant at least one business day prior
to settlement. Cedelbank or Euroclear, as the case may be, will instruct
their respective Depositary to receive the Global Securities against
payment. Payment will include interest accrued on the Global Securities
from and including the last coupon payment date to and excluding the
settlement date, on the basis of actual days elapsed and a 360 day year.
Payment will then be made by the respective Depositary to the Participant's
account against delivery of the Global Securities. After settlement has
been completed, the Global Securities will be credited to the respective
clearing system and by the clearing system, in accordance with its usual
procedures, to the Cedelbank Customer's or Euroclear Participant's account.
The Global Securities credit will appear the next day (European time) and
the cash debit will be back-valued to, and the interest on the Global
Securities will accrue from, the value date (which would be the preceding
day when settlement occurred in New York). If settlement is not completed
on the intended value date (i.e., the trade fails), the Cedelbank or
Euroclear cash debit will be valued instead as of the actual settlement
date.
Cedelbank Customers and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to
pre-position funds for settlement, either from cash on hand or existing
lines of credit, as they would for any settlement occurring within
Cedelbank or Euroclear. Under this approach, they may take on credit
exposure to Cedelbank or Euroclear until the Global Securities are credited
to their accounts one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of
credit to them, Cedelbank Customers or Euroclear Participants can elect not
to pre-position funds and allow that credit line to be drawn upon the
finance settlement. Under this procedure, Cedelbank Customers or Euroclear
Participants purchasing Global Securities would incur overdraft charges for
one day, assuming they cleared the overdraft when the Global Securities
were credited to their accounts. However, interest on the Global Securities
would accrue from the value date. Therefore, in many cases the investment
income on the Global Securities earned during that one-day period may
substantially reduce or offset the amount of such overdraft charges,
although this result will depend on each Cedelbank Customer's or Euroclear
Participant's particular cost of funds.
Since the settlement is taking place during New York business hours,
DTC Participants can employ their usual procedures for sending Global
Securities to the respective Depositary for the benefit of Cedelbank
Customers or Euroclear Participants. The sale proceeds will be available to
the DTC seller on the settlement date. Thus, to the DTC Participants a
cross-market transaction will settle no differently than a trade between
two DTC Participants.
Trading between Cedelbank or Euroclear seller and DTC purchaser. Due
to time zone differences in their favor, Cedelbank Customers and Euroclear
Participants may employ their customary procedures for transactions in
which Global Securities are to be transferred by the respective clearing
system, through the respective Depositary, to a DTC Participant. The seller
will send instructions to Cedelbank or Euroclear through a Cedelbank
Customer or Euroclear Participant at least one business day prior to
settlement. In these cases, Cedelbank or Euroclear will instruct their
respective Depositary, as appropriate, to deliver the bonds to the DTC
Participant's account against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment
date to and excluding the settlement date on the basis of actual days
elapsed and a 360 day year. The payment will then be reflected in the
account of the Cedelbank Customer or Euroclear Participant the following
day, and receipt of the cash proceeds in the Cedelbank Customer's or
Euroclear Participant's account would be back-valued to the value date
(which would be the preceding day, when settlement occurred in New York).
Should the Cedelbank Customer or Euroclear Participant have a line of
credit with its respective clearing system and elect to be in debit in
anticipation of receipt of the sale proceeds in its account, the
back-valuation will extinguish any overdraft charges incurred over that
one-day period. If settlement is not completed on the intended value date
(i.e., the trade fails), receipt of the cash proceeds in the Cedelbank
Customer's or Euroclear Participant's account would instead be valued as of
the actual settlement date.
Finally, day traders that use Cedelbank or Euroclear and that
purchase Global Securities from DTC Participants for delivery to Cedelbank
Customers or Euroclear Participants should note that these trades would
automatically fail on the sale side unless affirmative action were taken.
At least three techniques should be readily available to eliminate this
potential problem:
(a) borrowing through Cedelbank or Euroclear for one day (until
the purchase side of the day trade is reflected in their Cedelbank or
Euroclear accounts) in accordance with the clearing system's
customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC
Participant no later than one day prior to settlement, which would
give the Global Securities sufficient time to be reflected in their
Cedelbank or Euroclear accounts in order to settle the sale side of
the trade; or
(c) staggering the value dates for the buy and sell sides of
the trade so that the value date for the purchase from the DTC
Participant is at least one day prior to the value date for the sale
to the Cedelbank Customer or Euroclear Participant.
Certain U.S. Federal Income Tax Documentation Requirements
A beneficial owner of Global Securities holding securities through
Cedelbank or Euroclear (or through DTC if the holder has an address outside
the U.S.) will be subject to the 30% U.S. withholding tax that generally
applies to payments of interest (including original issue discount) on
registered debt issued by U.S. Persons, unless (i) each clearing system,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business in the chain of intermediaries
between such beneficial owner and the U.S. entity required to withhold tax
complies with applicable certification requirements and (ii) such
beneficial owner takes one of the following steps to obtain an exemption or
reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of
Certificates that are non-U.S. Persons can obtain a complete exemption from
the withholding tax by filing a signed Form W-8 (Certificate of Foreign
Status). If the information shown on Form W-8 changes, a new Form W-8 must
be filed within 30 days of such change.
Exemption for non-U.S. Persons with effectively connected income
(Form 4224). A non-U.S. Person, including a non-U.S. corporation or bank
with a U.S. branch, for which the interest income is effectively connected
with its conduct of a trade or business in the United States, can obtain an
exemption from the withholding tax by filing Form 4224 (Exemption from
Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States).
Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001). Non-U.S. Persons that are Certificate Owners
residing in a country that has a tax treaty with the United States can
obtain an exemption or reduced tax rate (depending on the treaty terms) by
filing Form 1001 (Ownership, Exemption or Reduced Rate Certificate). If the
treaty provides only for a reduced rate, withholding tax will be imposed at
that rate unless the filer alternatively files Form W-8. Form 1001 may be
filed by the Certificate Owner or his agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form W-9 (Payer's
Request for Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of
a Global Security or, in the case of a Form 1001 or a Form 4224 filer, his
agent, files by submitting the appropriate form to the person through whom
it holds (the clearing agency, in the case of persons holding directly on
the books of the clearing agency). Form W-8 and Form 1001 are effective for
three calendar years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of
the United States or any political subdivision thereof, (iii) an estate the
income of which is includible in gross income for United States tax
purposes, regardless of its source or (iv) a trust if a U.S. court is able
to exercise primary supervision over the administration of such trust and
one or more U.S. persons have the authority to control all substantial
decisions of such trust. This summary does not deal with all aspects of
U.S. Federal income tax withholding that may be relevant to foreign holders
of the Global Securities. Investors are advised to consult their own tax
advisors for specific tax advice concerning their holding and disposing of
the Global Securities.
Index of Terms for Prospectus Supplement
Term Page
Accounts.......................................................S-16
Accumulation Period............................................S-33
Accumulation Period Length.....................................S-33
Accumulation Shortfall.........................................S-45
Addition Date..................................................S-35
Amortization Period............................................S-33
Amortization Periods...........................................S-33
Available Investor Principal Collections.......................S-32
Available Reserve Account Amount...............................S-50
Average Principal Balance......................................S-35
BANC ONE.......................................................S-16
Bank...........................................................S-16
BANK ONE.......................................................S-16
Bank Portfolio.................................................S-17
Base Rate......................................................S-26
Benefit Plans..................................................S-53
BOCM...........................................................S-57
Calculation Date...............................................S-39
Certificate Rate...............................................S-30
Certificateholders.............................................S-16
Certificates...................................................S-16
Chevy Chase....................................................S-16
Class A Account Percentage.....................................S-41
Class A Adjusted Invested Amount...............................S-36
Class A Available Funds........................................S-41
Class A Certificate Rate.......................................S-30
Class A Certificateholders.....................................S-16
Class A Certificateholders' Interest...........................S-34
Class A Certificates...........................................S-16
Class A Fixed/Floating Allocation Percentage...................S-35
Class A Floating Allocation Percentage.........................S-35
Class A Invested Amount........................................S-36
Class A Investor Charge-Off....................................S-48
Class A Investor Default Amount................................S-47
Class A Monthly Interest.......................................S-40
Class A Monthly Principal......................................S-44
Class A Monthly Servicing Fee..................................S-52
Class A Required Amount........................................S-37
Class A Scheduled Payment Date.................................S-25
Class B Account Percentage.....................................S-41
Class B Adjusted Invested Amount...............................S-36
Class B Available Funds........................................S-41
Class B Certificate Rate.......................................S-30
Class B Certificateholders.....................................S-16
Class B Certificateholders' Interest...........................S-34
Class B Certificates...........................................S-16
Class B Fixed/Floating Allocation Percentage...................S-35
Class B Floating Allocation Percentage.........................S-35
Class B Invested Amount........................................S-36
Class B Investor Charge-Off....................................S-48
Class B Investor Default Amount................................S-47
Class B Monthly Interest.......................................S-41
Class B Monthly Principal......................................S-45
Class B Monthly Servicing Fee..................................S-52
Class B Principal Commencement Date............................S-34
Class B Required Amount........................................S-37
Class B Scheduled Payment Date.................................S-25
Closing Date...................................................S-30
Companion Series...............................................S-50
Controlled Accumulation Amount.................................S-45
Controlled Deposit Amount......................................S-25
Cut-Off Date...................................................S-21
Default Amount.................................................S-47
Distribution Date..............................................S-30
DOL............................................................S-53
DTC..........................................................A-II-1
ERISA..........................................................S-53
Excess Collateral..............................................S-16
Excess Collateral Account Percentage...........................S-41
Excess Collateral Adjusted Amount..............................S-36
Excess Collateral Amount.......................................S-36
Excess Collateral Available Funds..............................S-41
Excess Collateral Default Amount...............................S-47
Excess Collateral Fixed/Floating Allocation Percentage.........S-35
Excess Collateral Floating Allocation Percentage...............S-35
Excess Collateral Holders......................................S-16
Excess Collateral Holders' Interest............................S-34
Excess Collateral Minimum Monthly Interest.....................S-44
Excess Collateral Minimum Rate.................................S-44
Excess Collateral Monthly Principal............................S-45
Excess Collateral Monthly Servicing Fee........................S-52
Excess Collateral Scheduled Payment Date.......................S-32
Excess Finance Charge Collections..............................S-40
Excess Principal Collections...................................S-33
FCCM...........................................................S-57
Finance Charge Deficit.........................................S-38
First Commerce.................................................S-16
First USA......................................................S-16
Fixed/Floating Allocation Percentage...........................S-35
GE Capital.....................................................S-16
Global Securities............................................A-II-1
Independent Investors..........................................S-54
Interest Period................................................S-30
Invested Amount................................................S-36
investment company.............................................S-26
Investor Default Amount........................................S-47
Investor Percentage............................................S-35
Investor Servicing Fee.........................................S-52
LIBOR..........................................................S-31
LIBOR Determination Date.......................................S-31
Offered Certificates...........................................S-16
Offered Series.................................................S-21
Offered Series Supplement......................................S-16
Parties in Interest............................................S-53
Pay Out Event............................................S-26, S-50
Percentage Allocation..........................................S-38
Periodic Finance Charges.......................................S-17
Plan Asset Regulation..........................................S-53
Pooling and Servicing Agreement................................S-16
Portfolio Yield................................................S-26
Principal Funding Account......................................S-48
Principal Funding Account Balance..............................S-25
Principal Funding Investment Proceeds..........................S-49
Principal Shortfalls...........................................S-33
Rapid Amortization Period......................................S-32
Reallocated Class B Principal Collections......................S-47
Reallocated Excess Collateral Principal Collections............S-46
Reallocated Principal Collections..............................S-47
Receivables....................................................S-16
Record Date....................................................S-29
Reference Banks................................................S-31
Removed Accounts...............................................S-22
Required Reserve Account Amount................................S-49
Reserve Account................................................S-49
Reserve Account Funding Date...................................S-49
Revolving Period...............................................S-31
Scheduled Payment Date.........................................S-25
Servicing Fee Percentage.......................................S-52
Stated Series Termination Date.................................S-26
Subordinate Principal Collections..............................S-38
Telerate Page 3750.............................................S-31
Transfer and Administration Agreement..........................S-43
Transferor.....................................................S-16
Transferor Percentage..........................................S-36
Trust Portfolio................................................S-21
Trustee........................................................S-16
U.S. Person..................................................A-II-4
Underwriters...................................................S-56
Underwriting Agreement.........................................S-56
PRINCIPAL OFFICE OF
FIRST USA BANK, NATIONAL ASSOCIATION
201 North Walnut Street
Wilmington, Delaware 19801
TRUSTEE
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
PAYING AGENTS
The Bank of New York Banque de Luxembourg
101 Barclay Street, Floor 12E 14 Boulevard Royal
New York, New York 10286 2449 Luxembourg
Grand-Duche de Luxembourg
LISTING AGENT
Banque de Luxembourg
14 Boulevard Royal
2449 Luxembourg
Grand-Duche de Luxembourg
LEGAL ADVISOR TO THE BANK AND THE UNDERWRITERS
as to United States Law
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
INDEPENDENT ACCOUNTANTS TO THE BANK
Arthur Andersen, LLP
33 West Monroe Street
Chicago, Illinois 60603
Prospectus Supplement
First USA Credit
Card Master Trust
Issuer
SERIES 1999 -
$
Class A Floating Rate
Asset Backed Certificates
$
Class B Floating Rate
Asset Backed Certificates
First USA Bank,
National Association
Transferor and Servicer
Underwriters of the Class A Certificates
[Name of Underwriters]
Underwriter of the Class B Certificates
[Name of Underwriter]
You should rely only on the information contained or incorporated by
reference in this Prospectus Supplement and the Prospectus. We have not
authorized anyone to provide you with different information.
We are not offering the Certificates in any state where the offer
is not permitted.
We do not claim the accuracy of the information in this Prospectus Supplement
and the Prospectus as of any date other than the dates stated on their
respective covers.
Dealers will deliver a Prospectus Supplement and Prospectus when acting as
underwriters of the Certificates and with respect to their unsold allotments
or subscriptions. In addition, all dealers selling the Certificates will
deliver a Prospectus Supplement and Prospectus until ________, ____.
