First USA Credit Card Master Trust
Class A Floating Rate Asset Backed Certificates,
Series 1996-6
Class B Floating Rate Asset Backed Certificates,
Series 1996-6
UNDERWRITING AGREEMENT
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October 17, 1996
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
as Representative of the
Underwriters set forth herein
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
First USA Bank, a Delaware chartered banking corporation (the
"Bank"), has duly authorized the issuance and sale to Bear, ▇▇▇▇▇▇▇ & Co. Inc.
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(the "Representative"), ▇.▇. ▇▇▇▇▇▇ Securities Inc. and NationsBanc Capital
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Markets, Inc., as underwriters (each individually, an "Underwriter" and
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collectively, the "Underwriters") of First USA Credit Card Master Trust
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$862,650,000 aggregate principal amount of Class A Floating Rate Asset Backed
Certificates, Series 1996-6 (the "Class A Certificates") and $78,000,000
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aggregate principal amount of Class B Floating Rate Asset Backed Certificates,
Series 1996-6 (the "Class B Certificates" and together with the Class A
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Certificates, the "Certificates"). The Certificates will be issued pursuant to a
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Pooling and Servicing Agreement, dated as of September 1, 1992 (the "Master
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Pooling and Servicing Agreement"), as supplemented by the Series 1996-6
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Supplement dated as of November 13, 1996 (the "Supplement" and together with the
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Master Pooling and Servicing Agreement, the "Pooling and Servicing Agreement"),
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each by and between the Bank, as transferor and servicer, and The Bank of New
York (Delaware) (the "Trustee").
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Each Certificate will represent an undivided interest in
certain assets of First USA Credit Card Master Trust (the "Trust"). The property
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of the Trust will include, among other things, receivables (the "Receivables")
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arising under certain
MasterCard(R) and VISA(R)/*/ revolving credit card accounts (the "Accounts").
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Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement.
1. Representations, Warranties and Agreements of the
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Bank. The Bank represents and warrants to, and agrees with, the
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Underwriters as follows:
(a) The Bank has filed with the Securities and
Exchange Commission (the "Commission"), on Form S-3, a registration statement,
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including a form of prospectus supplement (Registration No. 33-99362) pursuant
to Rule 415 under the Securities Act of 1933, as amended (such act, the "Act").
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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 as amended, 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
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date and time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission, and "Effective Date" means the date of the Effective Time. Such
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registration statement, as amended at the Effective Time, and including the
exhibits thereto and any material incorporated by reference therein (including
any Computational Materials, ABS Term Sheets, Structural Term Sheets and
Collateral Term Sheets (as defined in Section 3(b) of this Agreement) filed on
Form 8-K), is hereinafter referred to as the "Registration Statement," and any
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prospectus supplement (the "Prospectus Supplement") relating to the
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Certificates, as filed
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* VISA(R) and MasterCard(R) are registered trademarks of Visa
USA Incorporated and MasterCard International Incorporated,
respectively.
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with the Commission pursuant to and in accordance with Rule 424(b) ("Rule
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424(b)") under the Act is, together with the prospectus filed as part of the
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Registration Statement (such prospectus, in the form it appears in the
Registration Statement or in the form most recently revised and filed with the
Commission pursuant to Rule 424(b) being hereinafter referred to as the "Basic
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Prospectus"), hereinafter referred to as the "Prospectus". "Execution Time"
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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 (the "Rules and Regulations"); on the Effective
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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
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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 banking corporation under the laws of the State of
Delaware and is qualified to transact business in and is in good standing under
the laws of each state in which its activities require such qualification, and
has full power, authority and legal right to own its properties and conduct its
business as such properties are presently owned and such business
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is presently conducted, and to execute, deliver and perform its obligations
under this Agreement, the Spread Account Agreement dated as of November 13, 1996
by and between the Bank and the Trustee (the "Spread Account Agreement"), the
Pooling and Servicing Agreement, and the Certificates.
(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 Spread Account 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 Spread Account 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.
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(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 Spread Account 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 Spread Account Agreement,
or this Agreement, will result in the breach of any term or provision of the
charter or by-laws of the Bank, or conflict with, result in a breach, violation
or acceleration of, or constitute a default under, the terms of any indenture or
other agreement or instrument to which the Bank is a party or by which it or its
properties is bound or may be affected or any statute, order or regulation
applicable to the Bank of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Bank or will result
in the creation of any Lien upon any property or assets of the Bank (other than
as contemplated in the Pooling and Servicing Agreement). The Bank is not a party
to, bound by, or in breach or violation of, any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over it, that materially and adversely affects
the ability of the Bank to perform its obligations under this Agreement, the
Pooling and Servicing Agreement, the Spread Account Agreement, or the
Certificates.
(k) There are no charges, investigations,
actions, suits, claims or proceedings before or by any court, regulatory body,
administrative agency, governmental body or 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 Spread Account
Agreement, the Pooling and Servicing Agreement, or the Certificates, (ii) assert
the invalidity of this Agreement, the Spread Account 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 Spread Account 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
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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 Spread Account 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 Spread Account
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 Spread Account Agreement, the
Pooling and Servicing Agreement, or the Certificates or the consummation of the
transactions contemplated hereby or thereby except the filing of Uniform
Commercial Code financing statements with respect to the Receivables and to the
approval of the Office of the State Bank Commissioner of the State of Delaware.
(o) ▇▇▇▇▇ & Young LLP who have audited certain
financial statements of the Bank are independent public accountants as required
by the Act and the Rules and Regulations.
(p) As of the close of business on September 30,
1996, the Principal Receivables transferred to the Trust pursuant to the Pooling
and Servicing Agreement have an aggregate balance determined, including the
Receivables in the Additional Accounts to be added to the Trust on or prior to
the Closing Date, of not less than the sum of (i) the sum of (x) the aggregate
outstanding principal amount of all classes of all Series then outstanding, plus
(y) $1,039,400,000 plus (ii) 7% of the sum of (x) plus (y).
(q) The Trust is not, and will not be as a result
of the issuance and sale of the Certificates, an "investment company" or a
company "controlled by" an investment company within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
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2. Purchase, Sale, Payment and Delivery of Certificates.
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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
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jointly, to purchase from the Bank, on November 13, 1996 or on such other date
as shall be mutually agreed upon by the Bank and the Underwriters (the "Closing
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Date"), the number and type of Certificates set forth in Schedule A opposite the
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name of each such Underwriter. The Class A Certificates being purchased by the
Underwriters hereunder are to be purchased at a purchase price equal to 99.65%
of the principal amount thereof. The Class B Certificates being purchased by the
Underwriters hereunder are to be purchased at a purchase price equal to 99.60%
of the principal amount thereof.
The closing of the sale of the Certificates (the "Closing")
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shall be held at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 so to
be 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
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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 Series Term Sheet dated October 16, 1996 relating to the
Certificates (the "Series Term Sheet") prepared by the Bank and attached
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hereto as Exhibit A, subject to the following conditions:
(i) Such Underwriter shall have complied with the
requirements of the no-action letter, dated May 20, 1994, issued by the
Commission to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Acceptance Corporation I, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co.
Incorporated and ▇▇▇▇▇▇ 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
"▇▇▇▇▇▇/PSA Letter"), the requirements of the no-action letter, dated February
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17, 1995, issued by the Commission to the Public Securities Association (the
"PSA Letter") and the requirements of the no-action letter, dated April 5, 1996,
issued by the Commission to Greenwood Trust Company (the "Greenwood Letter" and
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together with the ▇▇▇▇▇▇/PSA Letter and the PSA Letter, the "No-Action
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Letters").
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(ii) Each Underwriter, severally, represents
and warrants to the Bank that (a) it has not and will not use any information
that constitutes "Computational Materials" with respect to the offering of the
Certificates unless it has obtained the prior written consent of the Bank to
such usage and (b) other than the Series Term Sheet, it has not and will not use
any information that constitutes "ABS Term Sheets,"Structural Term Sheets," or
"Collateral Term Sheets" with respect to the offering of the Certificates. For
purposes hereof, "Computational Materials" shall have the meaning given such
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term in the No-Action Letters. For purposes hereof, "ABS Term Sheets,"
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"Structural Term Sheets" and "Collateral Term Sheets" shall have the meanings
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given such terms in the PSA Letter.
4. Certain Agreements of the Bank. The Bank
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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
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fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend or supplement the
Prospectus to comply with the Act, the Bank promptly will advise the
Representative thereof and will prepare and file, or cause to be prepared and
filed, with the Commission an amendment or supplement which will correct such
statement or omission, or an amendment or supplement which will effect such
compliance. Any such filing shall not operate as a waiver or limitation on any
condition or right of the Underwriters hereunder.
(d) As soon as practicable, but not later than
sixteen months after the original effective date of the Registration Statement,
the Bank will cause the Trust to make generally available to Certificateholders
an earnings statement (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
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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
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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 Series Term Sheet and a report on Form
8-K setting forth all Computational Materials described in Section 3 hereof
provided to the Bank by any of the Underwriters and identified by such
Underwriter as such within the time period allotted for such filing pursuant to
the No- Action Letters.
5. Payment of Expenses. The Bank will pay all expenses
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incident to the performance of its obligations under this Agreement, including
(i) the printing of the Series 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
Spread Account 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 Series 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 $254,000 incurred by the Bank
in connection with the issuance and distribution of the Certificates.
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6. Conditions of the Obligations of the Underwriters. The
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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 under the Act 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 ▇▇▇▇▇ & Young 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 First USA, Inc. 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.
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(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) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, counsel for the Bank, shall
have furnished to the Representative his written opinion, addressed to the
Representative and dated the Closing Date, in form and substance satisfactory to
the Representative and its counsel, substantially to the effect that:
(i) The Bank has been duly incorporated
and is validly existing as a bank in good standing under the laws of the
State of Delaware with full power and authority (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 Spread Account 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
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has, the power, authority and legal right to acquire, own and transfer
the Receivables;
(ii) The Bank is duly qualified to do
business and is in good standing, and under state laws, as they are
currently interpreted and enforced, has obtained all necessary licenses
and approvals in each jurisdiction in which failure to qualify or to
obtain such licenses or approvals would materially and adversely affect
the enforceability of any Receivable by the Bank or the Trustee or
would adversely affect the ability of the Bank to perform its
obligations under the Agreements or the Certificates;
(iii) The Certificates have been duly
authorized, executed and delivered by the Bank and, when duly
authenticated by the Trustee in accordance with the terms of the Pooling
and Servicing Agreement and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be
validly issued and outstanding
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and entitled to the benefits provided by the Pooling and Servicing
Agreement;
(iv) Each of the Agreements has been duly
authorized, executed and delivered by the Bank and constitutes the
legal, valid and binding agreement of the Bank enforceable against the
Bank in accordance with its terms, subject, as to enforceability to (A)
the effect of bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation and other similar laws relating to or
affecting the rights and remedies of creditors generally, and (B) the
application of principles of equity (regardless of whether considered
and applied in a proceeding in equity or at law) and the rights and
powers of the FDIC;
(v) The Trust is not now, and immediately
following the sale of the Certificates pursuant to the Underwriting
Agreement will not be, required to register under the 1940 Act;
(vi) 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 and the approval of the Office of the State
Bank Commissioner of the State of Delaware;
(vii) 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
13
with, or result in a breach or violation of any term or provision of, or
result in a default under any of the terms and provisions of, the Bank's
charter or by-laws or any material indenture, loan agreement or other
material agreement to which the Bank is a party or by which the Bank is
bound;
(viii) 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;
(ix) The Registration Statement and the
Prospectus (except for the financial statements, financial schedules and
other financial and operating data included therein, as to which such
counsel expresses no view) comply as to form with the Act and the Rules
and Regulations;
(x) 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
(xi) 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 discussion with
the Bank, its accountants and others, however, no facts have come to its
attention that cause it to believe that the Prospectus (except for the
financial statements, financial schedules and other financial and
statistical data included therein, as to which such counsel expresses
14
no view), contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading.
(f) The Representative shall have received a letter of
▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel for the Bank, to the
effect that the Representative may rely on those provisions of their opinions to
▇▇▇▇▇'▇ Investors Service, Inc. and Standard & Poor's Ratings Services, a
Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("Standard & Poor's") with respect
-----------------
to certain matters relating to the transfer of the Receivables to the Trust,
with respect to the perfection of the Trust's interest in the Receivables and
with respect to other related matters.
(g) The Representative shall have received an opinion of
▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, 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, ▇▇▇▇▇▇▇ & ▇▇▇▇, 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 Spread Account 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 Delaware chartered banks as the same may be applied in
the event of the bankruptcy, insolvency, receivership, reorganization,
moratorium or other similar event in respect of the Bank, (b) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in
15
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 Agreements 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
16
required to be registered under the 1940 Act;
(viii) The statements in the Prospectus under the
heading "Certain Legal Aspects of the Receivables", to the extent that
they constitute matters of law or legal conclusions with respect
thereto, have been reviewed by such counsel and are correct in all
material respects; and
(ix) Each of the Registration Statement, as of its
effective date, and the Prospectus, as of its date, appeared on its
face to be appropriately responsive in all material respects to the
requirements of the Act and the General Rules and Regulations under
the Act, except that in each case such counsel expresses no opinion as
to the financial data included therein or excluded therefrom or the
exhibits to the Registration Statement, and such counsel does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement and the
Prospectus.
Such opinion shall also state that such counsel has
participated in conferences with officers and representatives of the Bank,
counsel for the Bank, representatives of the independent accountants of the Bank
and the Underwriters at which the contents of the Prospectus and related matters
were discussed and, although such counsel need not pass upon, and need not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Prospectus and shall have made no independent check
or 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 opinion
or excluded therefrom.
17
(i) ▇▇▇▇▇▇▇ ▇▇▇▇▇ Battle & ▇▇▇▇▇▇, 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 their 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 and the Spread Account Agreement;
(iv) the Supplement and the Spread Account
Agreement have been duly authorized, executed and delivered by the
Trustee, and the Pooling and Servicing Agreement and the Spread Account
Agreement constitute the legal, valid and binding agreements of the
Trustee enforceable against the Trustee 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
Trustee), (y) that the enforceability of the Pooling and Servicing
Agreement and the Spread Account Agreement may be subject to the
application of general principles of equity (regardless of whether
18
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, 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 Spread Account Agreement and the performance
by the Trustee of its obligations under the Pooling and Servicing
Agreement and the Spread Account 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 Spread Account Agreement and the performance
by the Trustee of its obligations under the Pooling and Servicing
Agreement and the Spread Account 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) The Representative shall have re-ceived
evidence satisfactory to the Representative and its counsel that, on or before
the Closing Date, UCC-1 financing statements have been filed in the appropriate
filing offices of the State of Delaware and such other jurisdictions as counsel
to the Bank deems appropriate to reflect the interest of the Trustee in the
Receivables.
19
(k) The Class A Certificates shall be rated "AAA"
by Standard & Poor's and "Aaa" by ▇▇▇▇▇'▇ Investors Service, Inc. and the Class
B Certificates shall be rated at least "A" by Standard & Poor's and rated at
least "A2" by ▇▇▇▇▇'▇ Investors Service, Inc. on the Closing Date, and letters
to such effect dated the Closing Date shall have been received from each Rating
Agency.
(l) The Representative shall have re-ceived
evidence satisfactory to the Representative that, on or before the Closing Date,
the Bank shall have received the approval of the Office of the State Bank
Commissioner of the State of Delaware to the transaction.
(m) 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 prospectus, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Bank will not be liable in any such case to the
-------- -------
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the
20
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.
21
(c) Promptly after receipt by an indem-nified party
under this Section 7 of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Section 7. In case any such action
is brought against any indemnified party and it notified the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in this
Section 7 is unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnifying party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Bank on the one hand and the respective Underwriter on the other
from the offering of the Certificates or (ii) if the allocation provided 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
22
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Bank on the one hand and
the respective Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Bank bear to the total underwriting discounts and
commissions received by such Underwriter. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Bank or by any Underwriter
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), each Underwriter shall not be required to
contribute any amount in excess of the underwriting discount or commission
applicable to the Certificates purchased by it hereunder. The Bank and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of any of the equitable
considerations referred to above in this subsection (d). No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
8. Survival. The Bank and the Underwriters agree that the
--------
respective representations, warranties and agreements made by them herein and in
any certificate or other instrument delivered pursuant hereto shall be deemed to
be relied upon, in the case of the Bank, by each Underwriter and, in the case of
the Underwriters, by the Bank, notwithstanding any investigation heretofore or
hereafter made by or on behalf of the Bank or the Underwriters, and that the
respective representations, warranties and agreements (including without
limitation the indemnity and contribution agreement) made by the Bank and the
Underwriters herein or in any
23
such certificate or other instrument shall survive the delivery of and payment
for the Certificates.
9. Termination. This Agreement may be terminated in the
-----------
sole discretion of the Underwriters by notice to the Bank given at or prior to
the Closing Date in the event that the Bank shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto. Termination of this
Agreement pursuant to this Section 9 shall be without liability of any party to
any other party except as provided in Sections 5 and 7 hereof.
10. Default by One or More of the Underwriters. If one or
------------------------------------------
more of the Underwriters shall fail on the Closing Date to purchase the
Certificates which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the lead Underwriter shall have the right, within
--------------------
24 hours thereafter, to make arrangements for one or more of the non-default-
ing Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and upon
the terms herein set forth; if, however, the Representative shall not have
completed such arrangements within such 24-hour period, then:
(a) if the aggregate amount of Defaulted Securities does not
exceed 10% of the aggregate principal amount of the applicable class of
Certificates, each of the non-defaulting Underwriters of such class of
Certificates shall be obligated to purchase the full amount thereof in
the proportions that their respective underwriting obligations
hereunder with respect to such class of Certificates bear to the
underwriting obligations of all non-defaulting Underwriters of such
class of Certificates, or
(b) if the aggregate amount of Defaulted Securities exceeds 10%
of the aggregate principal amount of the applicable class of
Certificates, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the
24
Representative or the Bank shall have the right to postpone the Closing Date for
a period not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
11. Representation of the Underwriters. Each of the
----------------------------------
Underwriters represents and warrants to, and agrees with, the Bank that (w) it
has only issued or passed on and shall only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Certificates to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertise-ments)(Exemptions) Order 1996
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 of Great Britain 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 Ser-vices Act 1986 or in Regulation 1.04 of
the Financial Services (Promotion of Unregulated Schemes) Regulations 1991.
12. Notices. All communications provided for or permitted
-------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered, sent by overnight courier or mailed by registered mail,
postage prepaid and return receipt requested, or transmitted by telex, telegraph
or telecopier and confirmed by a similar mailed writing, if to (a) the
Underwriters, addressed to Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Securities Department, or to such other
address as the Underwriters may designate in writing to the Bank or (b) the
Bank, addressed to the Bank at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Executive Vice President - Finance & Accounting, with a copy
to First USA, Inc., ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
Securitization Group.
13. Secondary Trusts. Each Underwriter, severally,
----------------
represents that it will not, at any time that such Underwriter is acting as an
"underwriter" (as
25
defined in Section 2(11) of the Act) with respect to the Certificates, transfer,
deposit or otherwise convey any Certificates into a trust or other type of
special purpose vehicle that issues securities or other instruments backed in
whole or in part by, or that represents interests in, such Certificates without
the prior written consent of the Bank.
14. Successors. This Agreement shall inure to the benefit
----------
of and be binding upon the parties hereto and their respective successors and
assigns. Nothing expressed herein is intended or shall be construed to give any
person other than the persons referred to in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement.
15. Severability of Provisions. Any covenant, provision,
--------------------------
agreement or term of this Agreement that is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.
16. Entire Agreement. This Agreement constitutes the
----------------
entire agreement and understanding of the parties hereto with respect to the
matters and transac-tions 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.
26
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon it will be a binding agreement among the undersigned in accordance
with its terms.
Very truly yours,
FIRST USA BANK,
as Transferor and Servicer
By:/s/ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
The foregoing Underwriting Agreement
is hereby agreed to as of the date
first above written.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.,
for itself and as Representative
of the several Underwriters named
in Schedule A hereto
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
SCHEDULE A
Aggregate Principal
Amount of the Class A
Underwriter Certificates
----------- ------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc. . . $287,550,000
▇.▇. ▇▇▇▇▇▇
Securities Inc.. . . . . $287,550,000
NationsBanc Capital
Markets, Inc. . . . . . $287,550,000
-----------
Total . . . . . . . . . $862,650,000
Aggregate Principal
Amount of the Class B
Underwriter Certificates
----------- ------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc. . . $26,000,000
▇.▇. ▇▇▇▇▇▇
Securities Inc.. . . . . $26,000,000
NationsBanc Capital
Markets, Inc. . . . . . $26,000,000
-----------
Total . . . . . . . . . $78,000,000
EXHIBIT A
SUBJECT TO REVISION
SERIES TERM SHEET DATED OCTOBER 17, 1996
$545,180,000
FIRST USA CREDIT CARD MASTER TRUST
$500,000,000 CLASS A FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 1996-6
$45,180,000 CLASS B FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 1996-6
FIRST USA BANK
TRANSFEROR AND SERVICER
THE OFFERED CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST ONLY AND WILL
NOT REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF FIRST USA BANK OR
ANY AFFILIATE THEREOF. AN OFFERED CERTIFICATE IS NOT A DEPOSIT AND NEI-
THER THE OFFERED CERTIFICATES NOR THE UNDERLYING ACCOUNTS OR RECEIV-
▇▇▇▇▇ ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
THIS SERIES TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION ABOUT
THE OFFERED CERTIFICATES; HOWEVER, THIS SERIES TERM SHEET DOES NOT CONTAIN
COMPLETE INFORMATION ABOUT THE OFFERED CERTIFICATES. THE INFORMATION PRO-
VIDED HEREIN IS PRELIMINARY AND WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. ADDITIONAL
INFORMATION WILL BE CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS. PURCHASERS ARE URGED TO READ BOTH THE PROSPECTUS SUP-
PLEMENT AND THE PROSPECTUS.
THIS SERIES TERM SHEET SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITA-
TION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN
ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE. SALES OF THE OFFERED CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE
PURCHASER HAS RECEIVED BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇.▇. ▇▇▇▇▇▇ & CO.
NATIONSBANC CAPITAL MARKETS, INC.
SUMMARY OF TERMS
This Series Term Sheet will be superseded in its entirety by the information
appearing in the Prospectus Supplement, the Prospectus and the Series 1996-6
Supplement to the Pooling and Servicing Agreement (as amended, the "Pooling and
Servicing Agreement") between First USA Bank (the "Bank"), as transferor (in
such capacity, the "Transferor") and Servicer (in such capacity, the
"Servicer"), and The Bank of New York (Delaware), as trustee (the "Trustee").
Type of Securities.......... Class A Floating Rate Asset Backed
Certificates, Series 1996-6 (the "Class A
Certificates") and Class B Floating Rate
Asset Backed Certificates, Series 1996-6
(the "Class B Certificates" and, together
with the Class A Certificates, the "Offered
Certificates").
Trust Assets................ The property of the First USA Credit Card
Master Trust (the "Trust") includes and will
include receivables (the "Receivables")
arising under certain VISA (R) and
MasterCard (R)* revolving credit card
accounts (the "Accounts") selected by the
Transferor from a portfolio of VISA and
MasterCard accounts owned by the Transferor,
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), and any enhancement issued with
respect to any series issued from time to
time by the Trust (each, a "Series") which
will consist of one or more classes of
certificates. The benefits of any
enhancement issued with respect to any other
Series will not be available for the benefit
of the holders of the Certificates and the
holders of the certificates of other Series
will not be entitled to the benefits of any
enhancement for this Series.
Trustee..................... The Bank of New York (Delaware).
Certificateholders' Each of the Offered Certificates represents
Interest.................... an undivided interest in the Trust. The
Trust's assets will be allocated 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 CIA
Certificateholders (the "CIA
Certificateholders' Interest"), the holders
of other Series previously issued or issued
at some future time pursuant to the Pooling
and Servicing Agreement and the applicable
series supplements to the Pooling and
Servicing Agreement (each, a "Supplement")
and the Transferor (the "Transferor
Interest"), as described below.
The aggregate principal amount of the Class A
Certificateholders' Interest and the Class B
Certificateholders' Interest will, except as
otherwise provided herein, remain fixed at
$500,000,000 (the "Class A Invested Amount")
and $45,180,000 (the "Class B Invested
Amount"), respectively. The principal amount
of the Transferor Interest will fluctuate as
the amount of Receivables in the Trust
changes from time to time.
--------
* VISA (R) and MasterCard (R) are registered trademarks of Visa USA
Incorporated and MasterCard International Incorporated, respectively.
2
The "CIA Invested Amount" in the initial
amount of $57,230,000 (which amount
represents 9.5% of the sum of the initial
Class A Invested Amount, the initial Class B
Invested Amount and the initial CIA Invested
Amount) constitutes enhancement for the
Offered Certificates. Allocations will be
made to the CIA Invested Amount and the
holders of each Class of the CIA
Certificates will have voting and certain
other rights of a subordinated class of
certificates. The CIA Certificates together
with the Offered Certificates are referred
to herein as the "Certificates."
The Class A Certificates will represent the
right to receive from the assets of the
Trust allocated to the Class A
Certificateholders' Interest funds up to
(but not in excess of) the amounts required
to make payments of interest on the Class A
Certificates at the Class A Certificate
Rate, and the payment of principal during
the amortization period to the extent of the
Class A Invested Amount (which may be less
than the aggregate unpaid principal amount
of the Class A Certificates, in certain
circumstances).
The Class B Certificates will represent the
right to receive from the assets of the
Trust allocated to the Class B
Certificateholders' Interest funds up to
(but not in excess of) the amounts required
to make payments of interest on the Class B
Certificates at the Class B Certificate
Rate, and the payment of principal during
the Amortization Period, following the final
principal payment of the Class A Invested
Amount to the holders of the Class A
Certificates, to the extent of the Class B
Invested Amount (which may be less than the
aggregate unpaid principal amount of the
Class B Certificates, in certain
circumstances, if there has been a reduction
of the Class B Invested Amount).
Receivables................. The aggregate amount of Receivables in the
Accounts (including the amount of
Receivables in the additional Accounts added
to the Trust on October 3, 1996 and certain
additional Accounts designated to be added
to the Trust on November 13, 1996 (the
"Closing Date")), as of the close of
business on September 30, 1996, was
$18,483,595,665, comprised of
$17,953,842,869 of principal Receivables and
$529,752,796 of finance charge Receivables.
The Transferor may determine to add to the
Trust on or about the Closing Date, in
compliance with the provisions of the
Pooling and Servicing Agreement, Receivables
in Additional Accounts in addition to those
reflected in the preceding sentence.
Interest.................... Class A Certificate Rate: One-month LIBOR
plus %.
Class B Certificate Rate: One-month LIBOR
plus %.
Interest Payment Dates...... Interest on the Certificates will be
distributed on the 10th day of each calendar
month or, if such day is not a business day,
on the next succeeding business day (each, a
"Distribution Date"), commencing December
10, 1996, in an amount equal to the product
of (a) the actual number of days in the
period from the preceding Distribution Date
(or in the case of the December 1996
Distribution Date, the Closing Date) through
the day preceding
3
such Distribution Date divided by 360, (b)
the Class A Certificate Rate or the Class B
Certificate Rate, as applicable, and (c) the
outstanding principal amount of the Class A
Certificates or the outstanding principal
amount of the Class B Certificates, as
applicable, as of the last day of the
preceding calendar month (or, in the case of
the December 1996 Distribution Date, as of
the Closing Date). "LIBOR" means the London
interbank offered quotations for one-month
United States dollar deposits prevailing on
the date that LIBOR is determined. The
Trustee will determine LIBOR on the second
business day prior to the Closing Date for
the period from the Closing Date through
December 9, 1996, and on the second business
day prior to each Distribution Date for the
period from and including such Distribution
Date through the day preceding the next
succeeding Distribution Date.
Principal................... The principal of the Class A Certificates and
the Class B Certificates is scheduled to be
paid on the Class A Expected Final Payment
Date and the Class B Expected Final Payment
Date, respectively, but may be paid earlier
or later under certain circumstances.
Class A Expected Final
Payment Date...............
The November 2003 Distribution Date.
Class B Expected Final
Payment Date...............
The November 2003 Distribution Date.
Stated Series Termination The final distribution of principal and
Date........................ interest on the Certificates will be made no
later than the July 2006 Distribution Date
(the "Stated Series Termination Date").
After the Stated Series Termination Date,
the Trust will have no further obligation to
pay principal or interest on the
Certificates.
Subordination of the Class
B Certificates and the CIA
Certificates...............
The Class B Certificateholders' Interest will
be subordinated to the extent necessary to
fund certain payments with respect to the
Class A Certificates. In addition, the CIA
Certificateholders' Interest will be
subordinated to the extent necessary to fund
certain payments with respect to the Class A
Certificates and the Class B Certificates.
If the CIA Invested Amount is reduced to
zero, the Class B Certificateholders will
bear directly the credit and other risks
associated with their undivided interest in
the Trust. 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.
ERISA Considerations........ If certain conditions are satisfied,
including that upon completion of the public
offering thereof interests in the Class A
Certificates are held by 100 or more persons
independent of the Transferor and each
other, the Class A Certificates should
qualify as "publicly
4
offered securities" for purposes of the
"plan assets regulation" issued by the
Department of Labor. In such event, the
purchase and holding of Class A Certificates
by an employee benefit plan (or other entity
deemed to hold assets of such plan) would
not cause the assets of the Trust to be
deemed "plan assets" of any such plan
subject to the prohibited transaction rules
of the Employee Retirement Income Security
Act of 1974, as amended and the Internal
Revenue Code of 1986, as amended. Further
information regarding the status of the
Class A Certificates as publicly offered
securities will be provided in the
Prospectus Supplement. Accordingly, plan
investors contemplating the purchase of
Class A Certificates should consult their
counsel and review "ERISA Considerations" in
the Prospectus and "Summary of Terms--ERISA
Considerations" in the Prospectus Supplement
prior to making any purchase of Class A
Certificates.
The Underwriters currently do not expect the
Class B Certificates to qualify as publicly
offered securities and, accordingly, the
Class B Certificates may not be purchased by
employee benefit plans (or entities deemed
to hold assets of such plans, including
without limitation any insurance company
general account deemed to hold plan assets
by reason of a plan's investment in the
general account).
Certificate Ratings......... It is a condition to the issuance of the
Class A Certificates that they be rated in
the highest rating category by at least one
nationally recognized statistical rating
organization (each such rating organization,
a "Rating Agency").
It is a condition to the issuance of the
Class B Certificates that they receive a
rating of at least "A" or its equivalent by
at least one Rating Agency.
Listing..................... Application will be made to list the Offered
Certificates on the Luxembourg Stock
Exchange.
5
THE BANK'S CREDIT CARD PORTFOLIO
DELINQUENCY AND LOSS EXPERIENCE
The following tables set forth the delinquency and loss experience for each
of the periods shown for the portfolio of VISA and MasterCard credit card
accounts serviced by the Bank (the "Bank Portfolio"). As of the close of
business on September 30, 1996, the Receivables in the Trust Portfolio
(including the Receivables in the additional Accounts added to the Trust on
October 3, 1996 and in the additional Accounts to be added to the Trust on the
Closing Date) represented approximately 93.4% of the Bank Portfolio. The
accounts in the Bank Portfolio that are not included in the Trust Portfolio
are primarily newly originated accounts with lower delinquency and loss rates
than the average accounts in the Trust Portfolio which are generally more
seasoned. Therefore, the actual delinquency and loss experience with respect
to the Receivables in the Trust Portfolio may be different from that set forth
below. There can be no assurance that the delinquency and loss experience for
the Trust Portfolio will be similar to the historical experience set forth
below because, among other things, economic and financial conditions affecting
the ability of cardholders to make payments may be different from those that
have prevailed during the periods reflected below.
DELINQUENCY EXPERIENCE
BANK PORTFOLIO
(DOLLARS IN THOUSANDS)
AS OF JUNE 30,
-----------------------------------------------------------------------
AS OF
SEPTEMBER 30, 1996 1996 1995 1994
----------------------- ----------------------- ----------------------- -----------------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL OF TOTAL OF TOTAL
RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Receivables
Outstanding(1)......... $19,782,723 100.00% $18,721,130 100.00% $13,287,452 100.00% $7,520,458 100.00%
=========== ====== =========== ====== =========== ====== ========== ======
Receivables Delinquent:
35-64 days............. $ 343,878 1.74% $ 272,380 1.45% $ 141,181 1.06% $ 60,024 0.80%
65-94 days............. 202,392 1.02 159,791 0.85 76,416 0.57 32,255 0.43
95 or more days........ 456,370 2.31 378,179 2.03 176,250 1.33 74,458 0.99
----------- ------ ----------- ------ ----------- ------ ---------- ------
Total................. $ 1,002,640 5.07% $ 810,350 4.33% $ 393,847 2.96% $ 166,737 2.22%
=========== ====== =========== ====== =========== ====== ========== ======
--------
(1) The Receivables Outstanding on the accounts consist of all amounts due
from cardholders as posted to the accounts.
LOSS EXPERIENCE
BANK PORTFOLIO
(DOLLARS IN THOUSANDS)
THREE MONTHS
ENDED FISCAL YEAR ENDED JUNE 30,
SEPTEMBER 30, ------------------------------------
1996 1996 1995 1994
------------- ----------- ----------- ----------
Average Receivables Out-
standing(1)............... $19,083,015 $16,667,917 $10,446,438 $5,339,689
Gross Charge-Offs(2)....... 231,642 603,249 245,572 132,279
Gross Charge-Offs as a
percentage of Average
Receivables
Outstanding(4)............ 4.86% 3.62% 2.35% 2.48%
Recoveries(3).............. 16,804 40,098 15,099 13,889
Net Losses(3).............. 214,838 563,151 230,473 118,390
Net Losses as a percentage
of Average Receivables
Outstanding(4)............ 4.50% 3.38% 2.21% 2.22%
--------
(1) Average Receivables Outstanding is the average daily receivables during
the periods indicated.
(2) Gross Charge-Offs are principal charge-offs before recoveries and do not
include the amount of any reductions in average receivables outstanding
due to fraud, returned goods or customer disputes.
(3) Recoveries are included in the Trust as of July 1, 1996.
(4) Annualized.
6
SUMMARY OF MONTHLY PAYMENT RATES
The following table sets forth the highest and lowest cardholder monthly
payment rates for the Bank Portfolio during any month in the period 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.
CARDHOLDER MONTHLY PAYMENT RATES
BANK PORTFOLIO
FISCAL YEAR ENDED JUNE 30,
THREE MONTHS ENDED ----------------------------
SEPTEMBER 30, 1996 1996 1995 1994
------------------ -------- -------- --------
Lowest Month................... 10.71% 9.86% 10.46% 10.74%
Highest Month.................. 11.39 11.79 11.63 13.23
Monthly Average................ 11.12 10.98 10.96 11.86
RECEIVABLE YIELD CONSIDERATIONS
The portfolio yield on the Bank Portfolio for each of the three fiscal years
contained in the period ended June 30, 1996 and for the three months ended
September 30, 1996 is set forth in the following table. The portfolio yields
in the table are calculated on an accrual basis. The portfolio yield on
Receivables included in the Trust is calculated on a cash basis. Portfolio
yields calculated on an accrual basis may differ from portfolio yields
calculated on a cash basis due to (a) a lag between when finance charges and
fees are charged to cardholder accounts and when such finance charges and fees
are collected and (b) finance charges and fees that are not ultimately
collected from the cardholder. However, during the three fiscal years
contained in the period ended June 30, 1996 and for the three months ended
September 30, 1996, portfolio yield on an accrual basis approximated portfolio
yield on a cash basis. Portfolio yield on both an accrual and a cash basis
will also be affected by numerous factors, including changes in the monthly
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. Interchange allocated to the Trust with respect to
the Receivables may vary from the amounts included in the table below because
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 discount Receivables.
PORTFOLIO YIELD
BANK PORTFOLIO
FISCAL YEAR ENDED JUNE 30,
THREE MONTHS ENDED ----------------------------
SEPTEMBER 30, 1996 1996 1995 1994
------------------ -------- -------- --------
Average account monthly
accrued fees and charges
(1)(2)....................... $38.07 $ 34.43 $29.90 $ 25.73
Average account balance(3).... 2,793 2,711 2,415 1,976
Portfolio yield from fees and
charges (1)(4)............... 16.36% 15.24% 14.85% 15.62%
--------
(1) Fees and charges are comprised of periodic finance charges, interchange,
annual membership fees and other charges.
(2) Average account monthly accrued fees and charges are presented net of
adjustments made pursuant to the Bank's normal servicing procedures,
including removal of incorrect or disputed periodic finance charges, and
include interchange.
(3) Average account balance includes purchases, cash advances and accrued and
unpaid periodic finance charges, annual membership fees and other charges
and is calculated based on the average of the month end balances for
accounts with balances.
(4) Annualized.
7
The increase in portfolio yield for the fiscal year ended June 30, 1996 and
for the three months ended September 30, 1996 reflects changes in the overall
pricing distribution of the Bank Portfolio. The decline in portfolio yield for
fiscal year 1995 is primarily the result of the Bank's focus on the direct
solicitation of low-rate, no annual fee credit cards which on average had a
lower introductory rate and which had the effect of lowering finance charge
income and annual fee income. The accounts in the Bank Portfolio that are not
included in the Trust Portfolio are primarily newly originated accounts with a
greater proportion of Receivables arising under accounts generated under this
type of solicitation than the average accounts in the Trust Portfolio, which
are more seasoned. Therefore, the actual portfolio yield with respect to the
Receivables in the Trust Portfolio may be different from that set forth above.
THE RECEIVABLES
The Receivables in the Accounts selected from the Bank Portfolio included
and to be included in the Trust on the basis of criteria set forth in the
Pooling and Servicing Agreement (the "Trust Portfolio") (including the
additional Accounts added to the Trust on October 3, 1996 and certain
additional Accounts designated to be added to the Trust on the Closing Date)
as of the close of business on September 30, 1996, consisted of
$17,953,842,869 of principal Receivables and $529,752,796 of finance charge
Receivables. On August 22, 1996 and September 24, 1996 (the "Relevant Cut Off
Dates"), the Transferor designated additional Accounts, which included
approximately $635,767,475 of principal Receivables as of the close of
business on September 30, 1996, and will transfer the Receivables arising
therein to the Trust on the Closing Date. The Transferor may determine to add
to the Trust on or about the Closing Date, in compliance with the provisions
of the Pooling and Servicing Agreement, Receivables in additional Accounts in
addition to those reflected in the two preceding sentences. The additional
Accounts to be added to the Trust on the Closing Date were, as of the Relevant
Cut Off Date, Eligible Accounts. The Accounts had an average principal
Receivable balance of $1,876 (including accounts with a zero balance) and an
average credit limit of $7,084. The percentage of the aggregate total
Receivable balance to the aggregate total credit limit was 27.3%.
As of September 30, 1996, 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. As of September 30, 1996, 66% of the Accounts, including such
additional Accounts, were premium accounts and 34% were standard accounts, and
the aggregate principal Receivable balances of premium accounts and standard
accounts, as a percentage of the aggregate total principal receivables, were
76% and 24%, respectively.
The following tables summarize the Trust Portfolio (including the additional
Accounts added to the Trust on October 3, 1996 and certain additional Accounts
designated to be added to the Trust on the Closing Date) by various criteria
as of the close of business on September 30, 1996. 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. The Transferor may determine to add to the Trust on or about
the Closing Date, in compliance with the provisions of the Pooling and
Servicing Agreement, Receivables in additional Accounts in addition to those
reflected in the tables below.
COMPOSITION BY ACCOUNT BALANCE
TRUST PORTFOLIO
PERCENTAGE
OF TOTAL PERCENTAGE OF
CREDIT NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
LIMIT RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----------- --------- ---------- --------------- ---------------
Credit Balance........... 140,535 1.5% $ (21,889,202) (0.1)%
No Balance............... 3,080,433 32.2 -- --
$0.01 to $2,000.00....... 3,136,842 32.8 2,157,478,639 11.7
$2,000.01 to $5,000.00... 1,927,445 20.1 6,925,488,492 37.5
$5,000.01 to $10,000.00.. 1,166,162 12.2 7,936,222,870 42.9
$10,000.01 or More....... 118,139 1.2 1,486,294,866 8.0
--------- ----- --------------- -----
TOTAL................ 9,569,556 100.0% $18,483,595,665 100.0%
========= ===== =============== =====
8
COMPOSITION BY CREDIT LIMIT
TRUST PORTFOLIO
PERCENTAGE
OF TOTAL PERCENTAGE OF
CREDIT NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
LIMIT RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----------- --------- ---------- --------------- ---------------
$0.00 to $2,000.00........ 863,543 9.0% $ 555,670,792 3.0%
$2,000.01 to $5,000.00.... 3,166,364 33.1 5,276,518,351 28.5
$5,000.01 to $10,000.00... 4,049,086 42.3 9,104,516,827 49.3
$10,000.01 or More........ 1,490,563 15.6 3,546,889,695 19.2
--------- ----- --------------- -----
TOTAL................. 9,569,556 100.0% $18,483,595,665 100.0%
========= ===== =============== =====
COMPOSITION BY PERIOD OF DELINQUENCY
TRUST PORTFOLIO
PERCENTAGE
PERIOD OF DELINQUENCY OF TOTAL PERCENTAGE OF
(DAYS CONTRACTUALLY NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
DELINQUENT) ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
--------------------- --------- ---------- --------------- ---------------
Not Delinquent............ 9,038,492 94.5% $16,306,471,811 88.2%
Up to 34 Days............. 313,395 3.3 1,199,611,953 6.5
35 to 64 Days............. 80,101 0.8 335,204,366 1.8
65 to 94 Days............. 44,448 0.5 197,308,283 1.1
95 or More Days........... 93,120 0.9 444,999,252 2.4
--------- ----- --------------- -----
TOTAL................. 9,569,556 100.0% $18,483,595,665 100.0%
========= ===== =============== =====
COMPOSITION BY GEOGRAPHIC DISTRIBUTION
TRUST PORTFOLIO
PERCENTAGE
OF TOTAL PERCENTAGE OF
NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
STATE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----- --------- ---------- -------------- ---------------
Alabama..................... 92,684 1.0% $ 189,690,824 1.0%
Alaska...................... 24,525 0.3 61,684,676 0.3
Arizona..................... 155,515 1.6 310,057,794 1.7
Arkansas.................... 79,845 0.8 142,487,677 0.8
California.................. 1,158,194 12.1 2,623,302,638 14.2
Colorado.................... 144,278 1.5 289,911,738 1.6
Connecticut................. 144,922 1.5 280,645,714 1.5
Delaware.................... 19,947 0.2 42,557,420 0.2
District of Columbia........ 20,573 0.2 44,637,414 0.2
Florida..................... 648,409 6.8 1,286,438,273 7.0
Georgia..................... 220,582 2.3 471,728,762 2.6
Hawaii...................... 45,183 0.5 101,009,205 0.5
Idaho....................... 37,701 0.4 72,497,743 0.4
Illinois.................... 466,182 4.9 802,524,993 4.3
Indiana..................... 61,120 0.6 96,947,361 0.5
Iowa........................ 8,207 0.1 13,878,764 0.1
Kansas...................... 87,528 0.9 165,518,501 0.9
Kentucky.................... 96,702 1.0 165,791,141 0.9
9
PERCENTAGE
OF TOTAL PERCENTAGE OF
NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
STATE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----- ---------- ---------- --------------- ---------------
Louisiana................ $ 240,549 2.5% $ 392,761,772 2.1%
Maine.................... 32,232 0.3 62,499,382 0.3
Maryland................. 247,975 2.6 516,936,740 2.8
Massachusetts............ 305,259 3.2 536,581,176 2.9
Michigan................. 323,236 3.4 625,873,842 3.4
Minnesota................ 64,533 0.7 88,208,711 0.5
Mississippi.............. 61,443 0.6 116,544,214 0.6
Missouri................. 160,632 1.7 291,350,620 1.6
Montana.................. 36,626 0.4 66,789,197 0.4
Nebraska................. 61,058 0.6 97,715,628 0.5
Nevada................... 74,314 0.8 161,654,847 0.9
New Hampshire............ 50,273 0.5 87,487,099 0.5
New Jersey............... 417,304 4.4 732,072,085 4.0
New Mexico............... 60,748 0.6 109,577,909 0.6
New York................. 746,869 7.8 1,478,448,366 8.0
North Carolina........... 177,596 1.9 361,180,447 2.0
North Dakota............. 20,753 0.2 30,075,535 0.2
Ohio..................... 361,842 3.8 651,765,893 3.5
Oklahoma................. 173,280 1.8 296,795,209 1.6
Oregon................... 130,053 1.4 253,496,344 1.4
Pennsylvania............. 404,358 4.2 640,863,817 3.5
Rhode Island............. 40,168 0.4 70,325,155 0.4
South Carolina........... 90,543 0.9 168,864,658 0.9
South Dakota............. 22,124 0.2 36,845,389 0.2
Tennessee................ 59,751 0.6 103,808,443 0.6
Texas.................... 1,015,907 10.6 1,960,176,568 10.6
Utah..................... 60,011 0.6 102,508,871 0.6
Vermont.................. 21,403 0.2 35,776,138 0.2
Virginia................. 260,129 2.7 547,352,110 3.0
Washington............... 228,210 2.4 503,489,811 2.7
West Virginia............ 48,099 0.5 89,874,873 0.4
Wisconsin................ 15,325 0.2 25,581,443 0.1
Wyoming.................. 17,256 0.2 31,297,394 0.1
Other U.S. territories
and possessions......... 27,600 0.4 47,705,341 0.2
---------- ----- --------------- -----
TOTAL................ $9,569,556 100.0% $18,483,595,665 100.0%
========== ===== =============== =====
Since the largest number of cardholders (based on billing addresses) whose
accounts were included in the Trust as of September 30, 1996 were in
California, Texas, New York, Florida and Illinois, adverse changes in the
economic conditions in these areas could have a direct impact on the timing
and amount of payments on the Certificates.
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COMPOSITION OF ACCOUNTS BY AGE
TRUST PORTFOLIO
PERCENTAGE
OF TOTAL PERCENTAGE OF
NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
AGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
--- ---------- ---------- --------------- ---------------
Less than or equal to 6
Months.................. $ 809,116 8.5% $ 2,295,903,515 12.4%
Over 6 Months to 12
Months.................. 1,627,459 17.0 3,696,720,409 20.0
Over 12 Months to 24
Months.................. 2,914,852 30.5 5,805,746,909 31.4
Over 24 Months to 36
Months.................. 1,961,378 20.5 3,276,411,346 17.7
Over 36 Months to 48
Months.................. 949,867 9.9 1,337,499,893 7.2
Over 48 Months to 60
Months.................. 343,329 3.6 427,260,103 2.3
Over 60 Months........... 963,555 10.0 1,644,053,490 9.0
---------- ----- --------------- -----
TOTAL................ $9,569,556 100.0% $18,483,595,665 100.0%
========== ===== =============== =====
11