EXHIBIT 1.1
First USA Credit Card Master Trust
Class A Floating Rate Asset Backed Certificates,
Series 1997-3
Class B Floating Rate Asset Backed Certificates,
Series 1997-3
UNDERWRITING AGREEMENT
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May 22, 1997
Bear, Xxxxxxx & Co. Inc.
as Representative of the
Underwriters set forth herein
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
First USA Bank, a Delaware chartered banking corporation (the "Bank"), has
duly authorized the issuance and sale to Bear, Xxxxxxx & Co. Inc. (the
"Representative"), X.X. Xxxxxx Securities Inc., Swiss Bank Corporation, London
Branch and Banc One Capital Corporation, as underwriters (the "Class A
Underwriters") of First USA Credit Card Master Trust $500,000,000 aggregate
principal amount of Class A Floating Rate Asset Backed Certificates, Series
1997-3 (the "Class A Certificates") and the issuance and sale to the
Representative, X.X. Xxxxxx Securities Inc. and Swiss Bank Corporation, London
Branch, as underwriters (collectively with the Class A Underwriters, the
"Underwriters" and each individually, an "Underwriter") of First USA Credit Card
Master Trust $45,180,000 aggregate principal amount of Class B Floating Rate
Asset Backed Certificates, Series 1997-3 (the "Class B Certificates" and
together with the Class A Certificates, the "Certificates"). The Certificates
will be issued pursuant to a Pooling and Servicing Agreement, dated as of
September 1, 1992 (the "Master Pooling and Servicing Agreement"), as
supplemented by the Series 1997-3 Supplement dated as of the Closing Date (the
"Supplement" and together with the Master Pooling and Servicing Agreement, the
"Pooling and Servicing Agreement"), each by and between the Bank, as transferor
and servicer, and The Bank of New York (Delaware) (the "Trustee").
Each Certificate will represent an undivided interest in certain assets of
First USA Credit Card Master Trust (the "Trust"). The property of the Trust
will include, among other
things, receivables (the "Receivables") arising under certain MasterCard(R) and
VISA(R)/*/ revolving credit card accounts (the "Accounts").
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement.
1. Representations, Warranties and Agreements of the Bank. The Bank
represents and warrants to, and agrees with, the Underwriters as follows:
(a) The Bank has filed with the Securities and Exchange Commission (the
"Commission"), on Form S-3, a registration statement (Registration No. 333-
24227) pursuant to Rule 415 under the Securities Act of 1933, as amended (such
act, the "Act"). The Bank may have filed one or more amendments thereto each of
which amendments has previously been furnished to each of the Underwriters. The
Bank will also file with the Commission a prospectus supplement in accordance
with Rule 424(b) under the Act. As filed, the registration statement 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 date and time as
of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission, and
"Effective Date" means the date of the Effective Time. Such registration
statement, as amended at the Effective Time, and including the exhibits thereto
and any material incorporated by reference therein (including any Computational
Materials, ABS Term Sheets, Structural Term Sheets and Collateral Term Sheets
(as defined in Section 3(b) of this Agreement) filed on Form 8-K), is
hereinafter referred to as the
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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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"Registration Statement," and any prospectus supplement (the "Prospectus
Supplement") relating to the Certificates, as filed with the Commission pursuant
to and in accordance with Rule 424(b) ("Rule 424(b)") under the Act is, together
with the prospectus filed as part of the Registration Statement (such
prospectus, in the form it appears in the Registration Statement or in the form
most recently revised and filed with the Commission pursuant to Rule 424(b)
being hereinafter referred to as the "Basic Prospectus"), hereinafter referred
to as the "Prospectus". "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
(b) On the Effective Date and on the date of this Agreement, the
Registration Statement did or will, and, when the Prospectus was first filed and
on the Closing Date, the Prospectus did or will, comply in all material respects
with the applicable requirements of the Act and the rules and regulations of the
Commission (the "Rules and Regulations"); on the Effective Date, the
Registration Statement did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date, the Prospectus did not
or will not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the Bank makes no representation or warranty as to the information
contained in or omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with information furnished in writing to the
Bank by the Underwriters specifically for use in connection with preparation of
the Registration Statement or the Prospectus.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there has not been any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, management, financial
condition, stockholders' equity, results of operations, regulatory status or
business prospects of the Bank and (ii) the Bank has not entered into any
transaction or agreement (whether or not in the ordinary course of business)
material to the Bank that, in either case, would reasonably be expected to
materially adversely affect the interests of the holders of the Certificates,
otherwise than as set forth or contemplated in the Prospectus.
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(d) The Bank is duly organized, validly existing and in good standing as a
banking corporation under the laws of the State of Delaware and is qualified to
transact business in and is in good standing under the laws of each state in
which its activities require such qualification, and has full power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement, the Spread
Account Agreement dated as of the Closing Date by and among the Bank, as
Transferor and Servicer, the Trustee and The Bank of New York, as initial
collateral agent (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
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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.
(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, govern mental body or arbitrator having
jurisdiction over it, that materially and adversely affects the ability of the
Bank to perform its obligations under this Agreement, the Pooling and Servicing
Agreement, the 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
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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
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) Xxxxx & 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 April 30, 1997, the Principal
Receivables transferred to the Trust pursuant to the Pooling and Servicing
Agreement have an aggregate balance
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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 outstanding on April 30, 1997, plus (y) $1,204,820,000 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").
2. Purchase, Sale, Payment and Delivery of Certificates. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Bank agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Bank, on June 10, 1997 or on such other date as shall be mutually
agreed upon by the Bank and the Underwriters (the "Closing Date"), the number
and type of Certificates set forth in Schedule A opposite the name of each such
Underwriter. The Class A Certificates being purchased by the Underwriters
hereunder are to be purchased at a purchase price equal to 99.725% 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 99.675%
of the principal amount thereof.
The closing of the sale of the Certificates (the "Closing") shall be held
at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on the Closing
Date. Payment of the purchase price for the Certificates being sold and
purchased hereunder shall be made on the Closing Date by wire transfer of
federal or other immediately available funds to an account to be designated one
business day prior to the Closing Date by the Bank, against delivery of the
Certificates at the Closing on the Closing Date. Each of the Certificates to be
so delivered shall be represented by one or more definitive certificates
registered in the name of Cede & Co., as nominee for The Depository Trust
Company.
3. Offering by Underwriters. (a) It is understood that after the
Effective Date the Underwriters propose to offer the Certificates for sale to
the public as set forth in the Prospectus.
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(b) Each Underwriter may provide to prospective investors the 1997-3 Term
Sheet dated May 21, 1997 relating to the Certificates (the "1997-3 Term Sheet")
prepared by the Bank and attached hereto as Exhibit A, subject to the following
conditions:
(i) Such Underwriter shall have complied with the requirements of the no-
action letter, dated May 20, 1994, issued by the Commission to Xxxxxx, Xxxxxxx
Acceptance Corporation I, Xxxxxx, Xxxxxxx & Co. Incorporated and Xxxxxx
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 "Xxxxxx/PSA
Letter"), the requirements of the no-action letter, dated February 17, 1995,
issued by the Commission to the Public Securities Association (the "PSA Letter")
and the requirements of the no-action letter, dated April 5, 1996, issued by the
Commission to Greenwood Trust Company (the "Greenwood Letter" and together with
the Xxxxxx/PSA Letter and the PSA Letter, the "No-Action Letters").
(ii) Each Underwriter, severally, represents and warrants to the Bank that
(a) it has not and will not use any information that constitutes "Computational
Materials" with respect to the offering of the Certificates unless it has ob-
tained the prior written consent of the Bank to such usage and (b) other than
the 1997-3 Term Sheet, it has not and will not use any information that
constitutes "Series Term Sheets," "ABS Term Sheets," "Structural Term Sheets,"
or "Collateral Term Sheets" with respect to the offering of the Certificates.
For purposes hereof, "Series Term Sheet" shall have the meaning given such term
in the Greenwood Letter and "Computational Materials" shall have the meaning
given such term in the No-Action Letters. For purposes hereof, "ABS Term
Sheets," "Structural Term Sheets" and "Collateral Term Sheets" shall have the
meanings given such terms in the PSA Letter.
4. Certain Agreements of the Bank. The Bank covenants and agrees with the
several Underwriters as follows:
(a) Immediately following the execution of this Agreement, the Bank will
prepare a Prospectus Supplement setting forth the amount of Certificates covered
thereby and the terms thereof not otherwise specified in the Basic Prospectus,
the price at which such Certificates are to be purchased by the Underwriters,
the initial public offering price, the selling concessions and allowances, and
such other information as the Bank deems appropriate. The Bank will transmit
the Prospectus including such Prospectus Supplement to the Commission pursuant
8
to Rule 424(b) by a means reasonably calculated to result in filing that
complies with all applicable provisions of Rule 424(b). The Bank will advise
the Representative promptly of any such filing pursuant to Rule 424(b).
(b) The Bank will advise the Representative promptly of any proposal to
amend or supplement the Registration Statement or the Prospectus and will not
effect such amendment or supplement without the consent of the Representative,
which consent will not unreasonably be withheld; the Bank will also advise the
Representative promptly of any request by the Commission for any amendment of
or supplement to the Registration Statement or the Prospectus or for any
additional information; and the Bank will also advise the Representative
promptly of any amendment or supplement to the Registration Statement or the
Prospectus and of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or threat of
any proceeding for that purpose and the Bank will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as possible
the lifting of any issued stop order.
(c) If, at any time when a prospectus relating to the Certificates is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or supplement
the Prospectus to comply with the Act, the Bank promptly will advise the
Representative thereof and will prepare and file, or cause to be prepared and
filed, with the Commission an amendment or supplement which will correct such
statement or omission, or an amendment or supplement which will effect such
compliance. Any such filing shall not operate as a waiver or limitation on any
condition or right of the Underwriters hereunder.
(d) As soon as practicable, but not later than sixteen months after the
original effective date of the Registration Statement, the Bank will cause the
Trust to make generally available to Certificateholders an earnings statement
(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
9
and will include all exhibits), each related preliminary prospectus or
prospectus supplement, the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as the
Underwriters request.
(f) The Bank will promptly, from time to time, take such action as any
Underwriter may reasonably request to qualify the Certificates for offering and
sale under the securities laws of such jurisdictions as such Underwriter may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Certificates, provided that in connection
therewith the Bank shall not be required to qualify as a foreign corporation or
dealer in securities or to file a general consent to service of process in any
jurisdiction.
(g) For a period from the date of this Agreement until the retirement of
the Certificates, the Bank will deliver to the Representative the annual
statements of compliance and the annual independent certified public
accountants' reports furnished to the Trustee pursuant to the Pooling and
Servicing Agreement, as soon as such statements and reports are furnished to the
Trustee.
(h) So long as any of the Certificates are outstanding, the Bank will
furnish to the Representative (i) as soon as practicable after the end of the
fiscal year all documents required to be distributed to Certificateholders or
filed with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any order of the Commission thereunder and (ii)
from time to time, any other information concerning the Bank filed with any
government or regulatory authority which is otherwise publicly available, as the
Representative reasonably requests.
(i) To the extent, if any, that the rating provided with respect to the
Certificates by the rating agency or agencies that initially rate the
Certificates is conditional upon the furnishing of documents or the taking of
any other actions by the Bank, the Bank shall use its best efforts to furnish
such documents and take any such other actions.
(j) The Bank will file with the Commission a report on Form 8-K with
respect to the 1997-3 Term Sheet and a report on Form 8-K setting forth all
Computational Materials described in Section 3 hereof provided to the Bank by
any of the Underwriters and identified by such Underwriter as such within
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the time period allotted for such filing pursuant to the No-Action Letters.
5. Payment of Expenses. The Bank will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the printing
of the 1997-3 Term Sheet and any Computational Materials described in Section 3
hereof, (ii) the printing of the Prospectus and of each amendment or supplement
thereto, (iii) the preparation of this Agreement, the 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 1997-3 Term Sheet and any Computational Materials described in
Section 3 hereof, (viii) the printing and delivery to the Underwriters of copies
of the Prospectus and of each amendment or supplement thereto, (ix) the printing
and delivery to the Underwriters of copies of any blue sky or legal investment
survey prepared in connection with the Certificates, (x) any fees charged by
rating agencies for the rating of the Certificates, (xi) the fees and expenses,
if any, incurred with respect to any filing with the National Association of
Securities Dealers, Inc. and (xii) the fees and expenses of the Trustee and its
counsel. The Underwriters have agreed to reimburse the Bank for expenses not to
exceed $147,590 incurred by the Bank in connection with the issuance and
distribution of the Certificates.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Certificates will be
subject to the accuracy of the representations and warranties on the part of the
Bank herein, to the accuracy of the statements of officers of the Bank made
pursuant to the provisions hereof, to the performance by the Bank of its
obligations hereunder and to the following additional conditions precedent:
(a) The Prospectus and any supplements thereto shall have been filed (if
required) with the Commission in accordance with the rules and regulations
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
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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 Xxxxx
& 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.
(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) Xxxxxxx X. Xxxxxx, General Counsel of First USA Bank, shall have
furnished to the Representative his written opinion, addressed to the
Representative and dated the Closing
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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 has, the power, authority and legal right to acquire, own and
transfer the Receivables;
(ii) The Bank is duly qualified to do business and is in
good standing, and under state laws, as they are currently interpreted
and enforced, has obtained all necessary licenses and approvals in
each jurisdiction in which failure to qualify or to obtain such
licenses or approvals would materially and adversely affect the
enforceability of any Receivable by the Bank or the Trustee or would
adversely affect the ability of the Bank to perform its obligations
under the Agreements or the Certificates;
(iii) The Certificates have been duly authorized,
executed and delivered by the Bank and, when duly authenticated by the
Trustee in accordance with the terms of the Pooling and Servicing
Agreement and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be validly issued
and outstanding and entitled to the benefits provided by the Pooling
and Servicing Agreement;
(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
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(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 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
14
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
no view), contains any untrue statement of a material fact or omits to
state a material
15
fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(f) The Representative shall have received a letter from Xxxxxxx,
Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel for the Bank, to the
effect that the Representative may rely on those provisions of their
opinions to Xxxxx'x Investors Service, Inc. ("Moody's") and Standard &
Poor's Ratings Services, a division of The XxXxxx-Xxxx 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 Xxxxxxx,
Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel to the Bank, addressed to
the Representative, dated the Closing Date and satisfactory in form and
substance to the Representative and its counsel, to the effect that the
Certificates will be treated as indebtedness for Federal income tax
purposes and for Delaware income tax purposes.
(h) The Representative shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, substantially to the effect that:
(i) Each of the Pooling and Servicing Agreement and the
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
16
is considered in a proceeding at law or in equity) and (c) the
qualification that certain of the remedial provisions of the
Agreements may be unenforceable in whole or in part, but the inclusion
of such provisions does not affect the validity of the Agreements
taken as a whole, and the Agreements, together with applicable law,
contain adequate provisions for the practical realization of the
benefits of the security created thereby and (y) such counsel
expresses no opinion as to the enforceability of any rights to
contribution or indemnification which are violative of public policy
underlying any law, rule or regulation;
(ii) The Certificates, when executed and authenticated in
accordance with the terms of the Pooling and Servicing Agreement and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be duly and validly issued and outstanding and will be
entitled to the benefits of the Pooling and Servicing Agreement;
(iii) This Agreement has been duly authorized, executed and
delivered by the Bank;
(iv) Neither the execution, delivery or performance by the
Bank of the Agreements or this Agreement, nor the compliance by the
Bank with the terms and provisions thereof or hereof, will contravene
any provision of any applicable law;
(v) Based on such counsel's review of applicable laws, no
governmental approval, which has not been obtained or taken and is not
in full force and effect, is required to authorize or is required in
connection with the execution, delivery or performance of the
Agreements by the Bank;
(vi) The Certificates, the Agreements and this Agreement
conform in all material respects to the descriptions thereof contained
in the Prospectus;
17
(vii) The Pooling and Servicing Agreement is not required
to be qualified under the Trust Indenture Act of 1939, as amended, and
the Trust is not required to be registered under the 1940 Act;
(viii) The statements in the Prospectus under the heading
"Certain Legal Aspects of the Receivables", to the extent that they
constitute matters of law or legal conclusions with respect thereto,
have been reviewed by such counsel and are correct in all material
respects; and
(ix) Each of the Registration Statement, as of its
effective date, and the Prospectus, as of its date, appeared on its
face to be appropriately responsive in all material respects to the
requirements of the Act and the General Rules and Regulations under
the Act, except that in each case such counsel expresses no opinion as
to the financial data included therein or excluded therefrom or the
exhibits to the Registration Statement, and such counsel does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement and the
Prospectus.
Such opinion shall also state that such counsel has participated in
conferences with officers and representatives of the Bank, counsel for the
Bank, representatives of the independent accountants of the Bank and the
Underwriters at which the contents of the Prospectus and related matters
were discussed and, although such counsel need not pass upon, and need not
assume any responsibility for, the accuracy, completeness or fairness of
the statements contained in the Prospectus and shall have made no
independent check or 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
18
which they were made, not misleading, except that such counsel need not
express an opinion or belief with respect to the financial statements,
schedules and other financial information included in such Prospectus or
excluded therefrom.
(i) XxXxxxx, Woods, Battle & Xxxxxx, 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
19
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
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
20
activities of the Trustee, except such as have been obtained, taken or
made.
(j) The Representative shall have received 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.
(k) The Class A Certificates shall be rated "AAA" by Standard & Poor's
and "Aaa" by Xxxxx'x and the Class B Certificates shall be rated at least
"A" by Standard & Poor's and rated at least "A2" by Xxxxx'x 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 received 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 pro-
21
spectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and agrees to reimburse
each such indemnified party for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Bank will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Bank by any Underwriter specifically for use
therein or any revision or amendment thereof or supplement thereto. The
foregoing indemnification with respect to any untrue statement or omission
in any preliminary prospectus or prospectus supplement shall not inure to
the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Certificates, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Bank shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Certificates to such person and if
the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability provided that the Bank
shall have identified to such Underwriter in writing such defect prior to
the delivery of such written confirmation by such Underwriter to such
person.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Bank, its directors, each of the Bank's officers who
signed the Registration Statement and each person, if any, who controls the
Bank within the meaning of Section 15 of the Act and under Section 20 of
the Exchange Act against any and all losses, claims, damages or liabilities
to which they may become subject insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or in any revision
or amendment thereof or supplement thereto or any related preliminary
prospectus
22
or prospectus supplement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Bank by such Underwriter specifically for use therein or any revision or
amendment thereof or supplement thereto, and agrees to reimburse such
indemnified party for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage or liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
7 of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may
have to any indemnified party other than under this Section 7. In the
event that any such action is brought against any indemnified party and it
notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to
such indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the prior written consent of the indemni
fied party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional
23
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
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
24
rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of any of the equitable considerations referred to above in this
subsection (d). No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
8. Survival. The Bank and the Underwriters agree that the respective
representations, warranties and agreements made by them herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed
to be relied upon, in the case of the Bank, by each Underwriter and, in the
case of the Underwriters, by the Bank, notwithstanding any investigation
heretofore or hereafter made by or on behalf of the Bank or the
Underwriters, and that the respective representations, warranties and
agreements (including without limitation the indemnity and contribution
agreement) made by the Bank and the Underwriters herein or in any such
certificate or other instrument shall survive the delivery of and payment
for the Certificates.
9. Termination. This Agreement may be terminated in the sole
discretion of the Underwriters by notice to the Bank given at or prior to
the Closing Date in the event that the Bank shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder at or prior thereto.
Termination of this Agreement pursuant to this Section 9 shall be without
liability of any party to any other party except as provided in Sections 5
and 7 hereof.
10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail on the Closing Date to purchase the
Certificates which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the lead Underwriter shall have
the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as
may be agreed upon and upon the terms herein set forth; if, however, the
Representative shall not have completed such arrangements within such 24-
hour period, then:
25
(a) if the aggregate amount of Defaulted Securities does not exceed 10%
of the aggregate principal amount of the applicable class of
Certificates, each of the non-defaulting Underwriters of such class of
Certificates shall be obligated to purchase the full amount thereof
in the proportions that their respective underwriting obligations
hereunder with respect to such class of Certificates bear to the
underwriting obligations of all non-defaulting Underwriters of such
class of Certificates, or
(b) if the aggregate amount of Defaulted Securities exceeds 10% of the
aggregate principal amount of the applicable class of Certificates,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representative or the Bank shall
have the right to postpone the Closing Date for a period not exceeding
seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements.
11. Representation of the Underwriters. Each of the Underwriters
represents and warrants to, and agrees with, the Bank that (w) it has only
issued or passed on and shall only issue or pass on in the United Kingdom
any document received by it in connection with the issue of the
Certificates to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1996 or who is a person to whom the document may otherwise lawfully be
issued or passed on, (x) it has complied and shall comply with all
applicable provisions of the Financial Services Act 1986 and other
applicable laws and regulations with respect to anything done by it in
relation to the Certificates in, from or otherwise involving the United
Kingdom and (y) if that Underwriter is an authorized person under the
Financial Services Act 1986, it has only promoted and shall only promote
(as that term is defined in Regulation 1.02 of the Financial Services
(Promotion of Unregulated
26
Schemes) Regulations 1991) to any person in the United Kingdom the scheme
described in the Prospectus if that person is of a kind described either in
Section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of
the Financial Services (Promotion of Unregulated Schemes) Regulations 1991.
12. Notices. All communications provided for or permitted hereunder
shall be in writing and shall be deemed to have been duly given if
personally delivered, sent by overnight courier or mailed by registered
mail, postage prepaid and return receipt requested, or transmitted by
telex, telegraph or telecopier and confirmed by a similar mailed writing,
if to (a) the Underwriters, addressed to Bear, Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Asset Backed Securities
Department, or to such other address as the Representative may designate in
writing to the Bank or (b) the Bank, addressed to the Bank at 000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx,
Senior Vice President and General Counsel, telephone: (000) 000-0000,
telecopier: (000) 000-0000, with a copy to First USA, Inc., 0000 Xxx
Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000, Attention: X. Xxxx Xxxxxxxx, Vice
President - Corporate Finance, telephone: (000) 000-0000, telecopier: (214)
849-2472.
13. Secondary Trusts. Each Underwriter, severally, represents that
it will not, at any time that such Underwriter is acting as an
"underwriter" (as defined in Section 2(11) of the Act) with respect to the
Certificates, transfer, deposit or otherwise convey any Certificates into a
trust or other type of special purpose vehicle that issues securities or
other instruments backed in whole or in part by, or that represents
interests in, such Certificates without the prior written consent of the
Bank.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and
assigns. Nothing expressed herein is intended or shall be construed to
give any person other than the persons referred to in the preceding
sentence any legal or equitable right, remedy or claim under or in respect
of this Agreement.
15. Severability of Provisions. Any covenant, provision, agreement
or term of this Agreement that is prohibited or is held to be void or
unenforce-
27
able in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
16. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the
matters and transactions contemplated hereby and supersedes all prior
agreements and understandings whatsoever relating to such matters and
transactions.
17. Amendment. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought.
18. Headings. The headings in this Agreement are for the purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
19. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which shall together
constitute one instrument.
20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF.
28
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/ X. Xxxx Xxxxxxxx
------------------------------
Name: X. Xxxx Xxxxxxxx
Title: Vice President
The foregoing Underwriting Agreement
is hereby agreed to as of the date
first above written.
BEAR, XXXXXXX & CO. INC.,
for itself and as Representative
of the several Underwriters named
in Schedule A hereto
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Managing Director
29
SCHEDULE A
Aggregate Principal
Amount of the Class A
Underwriter Certificates
------------------------------ ----------------------
Bear, Xxxxxxx & Co. Inc....... $158,333,334
X.X. Xxxxxx Securities Inc.... $158,333,333
Swiss Bank Corporation,
London Branch................ $158,333,333
Banc One Capital Corporation.. $ 25,000,000
------------
Total....................... $500,000,000
============
Aggregate Principal
Amount of the Class B
Underwriter Certificates
------------------------------ -----------------------
Bear, Xxxxxxx & Co. Inc....... $ 15,060,000
X.X. Xxxxxx Securities Inc.... $ 15,060,000
Swiss Bank Corporation,
London Branch................ $ 15,060,000
------------
Total....................... $ 45,180,000
============
30
EXHIBIT A
SUBJECT TO REVISION
SERIES TERM SHEET DATED MAY 21, 1997
$545,180,000
FIRST USA CREDIT CARD MASTER TRUST
$500,000,000 CLASS A FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 1997-3
$45,180,000 CLASS B FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 1997-3
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-
XXXXX 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, XXXXXXX & CO. INC.
X.X. XXXXXX & CO.
SBC WARBURG
A Division of Swiss Bank Corporation
31
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 1997-3
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 1997-3 (the "Class A
Certificates") and Class B Floating Rate
Asset Backed Certificates, Series 1997-3
(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), Recoveries 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'
Interest.................... Each of the Offered Certificates represents
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.
32
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 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 May 8, 1997 and in certain
additional Accounts designated to be added
to the Trust on June 10, 1997 (the "Closing
Date")), as of the close of business on
April 30, 1997, was $22,197,806,408,
comprised of $21,588,400,896 of principal
Receivables and $609,405,512 of finance
charge Receivables.
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 17th 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 July 17,
1997, 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 July 1997 Distribution Date,
the Closing Date) through the day preceding
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
33
applicable, as of the last day of the
preceding calendar month (or, in the case of
the July 1997 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 June 6, 1997
for the period from the Closing Date through
June 16, 1997, on June 13, 1997 for the
period from June 17, 1997 through July 16,
1997, and on the second business day prior
to each Distribution Date thereafter 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 June 2002 Distribution Date.
Class B Expected Final
Payment Date............... The June 2002 Distribution Date.
Stated Series Termination
Date........................ The final distribution of principal and
interest on the Certificates will be made no
later than the February 2005 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 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
34
(or other entity deemed to hold assets of
such a 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.
35
RECENT DEVELOPMENTS
The bank is an indirect wholly-owned subsidiary of First USA, Inc. ("FUSA").
On January 19, 1997, FUSA and Banc One Corporation ("Banc One") entered into
an Agreement and Plan of Merger, amended as of April 23, 1997 (as amended, the
"Merger Agreement") pursuant to which FUSA would merge with and into Banc One
and Banc One would be the surviving corporation (the "Merger"). Pursuant to
the Merger Agreement, each share of FUSA's common stock will be converted into
1.1659 shares of Banc One common stock.
The Merger is subject to approvals by the shareholders of FUSA and Banc One
and the receipt of all required regulatory approvals. Banc One has received
all required regulatory approvals. The Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation and the appropriate
state banking regulators have approved the Merger or have notified Banc One
that they do not disapprove of the Merger, as the case may be. The Merger is
expected to close in the second quarter of calendar 1997.
Following the Merger, Banc One intends to consolidate the management of its
credit card operations with those of FUSA. Banc One may also consolidate the
operations of certain other subsidiaries or divisions of Banc One and FUSA,
which provide similar services, although no final determination with respect
to such matters has been made.
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 April 30, 1997, the Receivables in the Trust Portfolio (including
the Receivables in certain additional Accounts to be added to the Trust on the
Closing Date) represented approximately 95.5% 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 in the tables below.
DELINQUENCY EXPERIENCE
BANK PORTFOLIO
(DOLLARS IN THOUSANDS)
AS OF JUNE 30,
-----------------------------------------------------------------------
AS OF
MARCH 31, 1997 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)......... $22,890,011 100.00% $18,721,130 100.00% $13,287,452 100.00% $7,520,458 100.00%
=========== ====== =========== ====== =========== ====== ========== ======
Receivables Delinquent:
35-64 days............. $ 345,273 1.51% $ 272,380 1.45% $ 141,181 1.06% $ 60,024 0.80%
65-94 days............. 212,252 0.93 159,791 0.85 76,416 0.57 32,255 0.43
95 or more days........ 593,027 2.59 378,179 2.03 176,250 1.33 74,458 0.99
----------- ------ ----------- ------ ----------- ------ ---------- ------
Total................. $ 1,150,552 5.03% $ 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.
36
LOSS EXPERIENCE
BANK PORTFOLIO
(DOLLARS IN THOUSANDS)
NINE MONTHS
ENDED FISCAL YEAR ENDED JUNE 30,
MARCH 31, ------------------------------------
1997 1996 1995 1994
----------- ----------- ----------- ----------
Average Receivables Out-
standing(1)................ $20,724,248 $16,667,917 $10,446,438 $5,339,689
Gross Charge-Offs(2)........ 807,415 603,249 245,572 132,279
Gross Charge-Offs as a
percentage of Average
Receivables Outstanding(4). 5.19% 3.62% 2.35% 2.48%
Recoveries(3)............... 60,226 40,098 15,099 13,889
Net Losses(3)............... 747,189 563,151 230,473 118,390
Net Losses as a percentage
of Average Receivables
Outstanding(4)............. 4.81% 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.
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
NINE MONTHS FISCAL YEAR ENDED JUNE 30,
ENDED ----------------------------
MARCH 31, 1997 1996 1995 1994
-------------- -------- -------- --------
Lowest Month....................... 10.71% 9.86% 10.46% 10.74%
Highest Month...................... 13.51 11.79 11.63 13.23
Monthly Average.................... 11.62 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 nine months ended
March 31, 1997 is set forth in the table on the following page. 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 nine months ended
March 31, 1997, 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, which may in turn be caused by a variety of factors,
including seasonal variations, the availability of other sources of credit and
general economic conditions.
37
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 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
NINE MONTHS FISCAL YEAR ENDED JUNE 30,
ENDED ----------------------------
MARCH 31, 1997 1996 1995 1994
-------------- -------- -------- --------
Average account monthly accrued
fees and charges (1)(2).......... $38.52 $ 34.43 $29.90 $ 25.73
Average account balance(3)........ 2,875 2,711 2,415 1,976
Portfolio yield from fees and
charges (1)(4)................... 16.08% 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.
The increase in portfolio yield for the fiscal year ended June 30, 1996 and
for the nine months ended March 31, 1997 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 May 8, 1997 and certain additional
Accounts designated to be added to the Trust on the Closing Date), as of the
close of business on April 30, 1997, consisted of $21,588,400,896 of principal
Receivables and $609,405,512 of finance charge Receivables. On March 25, 1997
and April 23, 1997 (the "Relevant Cut Off Dates"), the Transferor designated
additional Accounts, which included approximately $1,277,397,526 of principal
Receivables as of the close of business on April 30, 1997, and will transfer
the Receivables arising therein to the Trust on the Closing Date. In addition,
on the Closing Date, the Transferor will deposit $1,200,000 into the finance
charge account, which will be applied as collections of finance charge
Receivables received during the initial monthly period and allocated to Series
1997-3. The additional Accounts to be added to the Trust on the Closing Date
were, as of the Relevant Cut Off Dates, Eligible Accounts. The Accounts,
including such additional Accounts, had an average principal Receivable
balance of $2,078 (including accounts with a zero balance) and an average
credit limit of $8,557. The percentage of the aggregate total Receivable
balance to the aggregate total credit limit was 25.0%.
As of April 30, 1997, 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
38
territories and possessions. As of April 30, 1997, 71% of the Accounts,
including such additional Accounts, were premium accounts and 29% 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 80% and 20%, respectively.
The following tables summarize the Trust Portfolio (including the additional
Accounts added to the Trust on May 8, 1997 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 April 30, 1997. Because the future composition
of the Trust Portfolio may change over time, these tables are not necessarily
indicative of the composition of the Trust Portfolio at any subsequent time.
COMPOSITION BY ACCOUNT BALANCE
TRUST PORTFOLIO
PERCENTAGE
OF TOTAL PERCENTAGE OF
ACCOUNT NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
BALANCE RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
------------- ---------- ---------- --------------- ---------------
Credit Balance.......... 159,351 1.5% $ (33,071,648) (0.1)%
No Balance.............. 3,125,113 30.1 -- --
$0.01 to $2,000.00...... 3,452,205 33.2 2,341,309,169 10.5
$2,000.01 to $5,000.00.. 2,030,499 19.5 7,221,703,287 32.5
$5,000.01 to $10,000.00. 1,377,387 13.3 9,517,811,686 42.9
$10,000.01 or More...... 244,147 2.4 3,150,053,914 14.2
---------- ----- --------------- -----
TOTAL............... 10,388,702 100.0% $22,197,806,408 100.0%
========== ===== =============== =====
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....... 661,520 6.4% $ 464,313,005 2.1%
$2,000.01 to $5,000.00... 2,488,267 24.0 4,383,465,328 19.7
$5,000.01 to $10,000.00.. 4,054,010 39.0 9,333,878,249 42.0
$10,000.01 or More....... 3,184,905 30.6 8,016,149,826 36.2
---------- ----- --------------- -----
TOTAL................ 10,388,702 100.0% $22,197,806,408 100.0%
========== ===== =============== =====
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........... 9,859,029 94.9% $19,890,323,851 89.6%
Up to 34 Days............ 299,427 2.9 1,208,276,894 5.4
35 to 64 Days............ 78,005 0.8 341,512,020 1.5
65 to 94 Days............ 43,565 0.4 209,042,548 0.9
95 or More Days.......... 108,676 1.0 548,651,095 2.6
---------- ----- --------------- -----
TOTAL................ 10,388,702 100.0% $22,197,806,408 100.0%
========== ===== =============== =====
39
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.................. 1,077,282 10.4% $ 3,031,221,941 13.7%
Over 6 Months to 12
Months.................. 1,360,374 13.1 3,329,663,381 15.0
Over 12 Months to 24
Months.................. 2,860,169 27.5 6,613,874,095 29.8
Over 24 Months to 36
Months.................. 2,231,984 21.5 4,460,319,202 20.1
Over 36 Months to 48
Months.................. 1,288,846 12.4 2,170,200,751 9.8
Over 48 Months to 60
Months.................. 542,707 5.2 790,632,187 3.6
Over 60 Months........... 1,027,340 9.9 1,801,894,851 8.0
---------- ----- --------------- -----
TOTAL................ 10,388,702 100.0% $22,197,806,408 100.0%
========== ===== =============== =====
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...................... 101,078 1.0% $ 232,088,713 1.0%
Alaska....................... 25,496 0.2 70,074,093 0.3
Arizona...................... 178,330 1.7 394,059,124 1.8
Arkansas..................... 86,139 0.8 170,310,995 0.8
California................... 1,293,503 12.5 3,216,171,076 14.5
Colorado..................... 169,860 1.6 371,744,742 1.7
Connecticut.................. 158,381 1.5 338,492,041 1.5
Delaware..................... 24,893 0.2 54,541,379 0.2
District of Columbia......... 21,397 0.2 50,914,320 0.2
Florida...................... 686,273 6.6 1,494,030,222 6.7
Georgia...................... 231,718 2.2 544,516,248 2.5
Hawaii....................... 47,985 0.5 119,957,907 0.5
Idaho........................ 43,653 0.4 95,452,602 0.4
Illinois..................... 500,073 4.8 955,564,298 4.3
Indiana...................... 98,999 1.0 205,689,882 0.9
Iowa......................... 10,253 0.1 19,213,761 0.1
Kansas....................... 96,443 0.9 198,905,161 0.9
Kentucky..................... 104,137 1.0 196,872,071 0.9
Louisiana.................... 235,199 2.3 428,044,563 1.9
Maine........................ 38,885 0.4 80,599,736 0.4
Maryland..................... 257,004 2.5 581,477,857 2.6
Massachusetts................ 339,440 3.3 652,416,098 2.9
Michigan..................... 351,525 3.4 744,444,415 3.4
Minnesota.................... 97,389 0.9 184,721,209 0.8
Mississippi.................. 65,330 0.6 137,477,019 0.6
Missouri..................... 176,506 1.7 354,556,428 1.6
Montana...................... 38,062 0.4 77,545,067 0.3
Nebraska..................... 66,789 0.6 113,004,120 0.5
Nevada....................... 83,866 0.8 204,616,716 0.9
New Hampshire................ 53,584 0.5 104,633,510 0.5
40
PERCENTAGE
OF TOTAL PERCENTAGE OF
NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
STATE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----- ---------- ---------- --------------- ---------------
New Jersey............... 434,463 4.2 $ 848,691,315 3.8%
New Mexico............... 69,187 0.7 140,460,556 0.6
New York................. 786,542 7.6 1,700,182,544 7.7
North Carolina........... 192,523 1.9 428,514,826 1.9
North Dakota............. 21,332 0.2 35,329,588 0.2
Ohio..................... 392,438 3.8 780,581,416 3.5
Oklahoma................. 182,408 1.8 350,697,993 1.6
Oregon................... 144,556 1.4 316,398,964 1.4
Pennsylvania............. 443,600 4.3 774,625,367 3.5
Rhode Island............. 45,177 0.4 87,514,713 0.4
South Carolina........... 97,554 0.9 204,522,866 0.9
South Dakota............. 23,026 0.2 43,395,814 0.2
Tennessee................ 82,167 0.8 178,950,232 0.8
Texas.................... 1,058,540 10.2 2,272,982,279 10.2
Utah..................... 68,390 0.7 133,174,900 0.6
Vermont.................. 22,878 0.2 42,389,733 0.2
Virginia................. 275,574 2.7 632,794,125 2.9
Washington............... 244,199 2.4 593,976,644 2.7
West Virginia............ 51,608 0.5 105,826,744 0.5
Wisconsin................ 20,648 0.2 37,283,430 0.2
Wyoming.................. 19,409 0.2 38,812,800 0.2
Other U.S. territories
and possessions......... 30,293 0.1 58,564,186 0.4
---------- ----- --------------- -----
TOTAL................ 10,388,702 100.0% $22,197,806,408 100.0%
========== ===== =============== =====
Since the largest number of cardholders (based on billing addresses) whose
accounts were included in the Trust as of March 31, 1997 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.
41
