Filed Pursuant to Rule 424B5
Registration No. 333-73728-01
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 18, 2002
[FLEET LOGO]
FLEET CREDIT CARD MASTER TRUST II
ISSUER
FLEET CREDIT CARD FUNDING TRUST
TRANSFEROR
FLEET BANK (RI), NATIONAL ASSOCIATION
SERVICER
$637,500,000 CLASS A 2.75% ASSET-BACKED CERTIFICATES, SERIES 2002-C
$45,000,000 CLASS B FLOATING RATE ASSET-BACKED CERTIFICATES, SERIES 2002-C
<Table>
<Caption>
CLASS A CERTIFICATES CLASS B CERTIFICATES
-------------------- --------------------
Certificate rate 2.75% annually One-Month LIBOR
plus 0.40% annually
Interest paid Monthly, beginning Monthly, beginning
January 15, 2003 January 15, 2003
Expected final distribution date October 17, 2005 October 17, 2005
Legal final maturity April 15, 2008 April 15, 2008
Price to public per certificate 99.98823% 100%
Underwriting discount per certificate 0.225% 0.275%
Proceeds to transferor per certificate 99.76323% 99.725%
</Table>
The total price to public is $682,424,966. The total amount of the underwriting
discount is $1,558,125. The total amount of proceeds plus accrued interest and
before deduction of expenses is $680,866,841.
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-7 IN THIS PROSPECTUS
SUPPLEMENT AND PAGE 8 IN THE PROSPECTUS.
The certificates are not deposits and neither the certificates nor the
underlying accounts or receivables are insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency.
The certificates will represent interests in the trust only and will not
represent interests in or obligations of Fleet Bank (RI), National Association,
Fleet Credit Card Funding Trust or any of their affiliates.
CREDIT ENHANCEMENT:
- - The Class B certificates will be subordinated to the Class A certificates.
- - The trust is also issuing a collateral interest in the amount of $67,500,000.
The collateral interest will be subordinated to both the Class A certificates
and the Class B certificates.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE CERTIFICATES OR DETERMINED THAT
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This prospectus supplement and the accompanying prospectus may be used by Fleet
Securities, Inc. or another affiliate of Fleet Credit Card Funding Trust in
connection with offers and sales of the certificates in market-making
transactions.
Underwriters of the Class A Certificates
LEHMAN BROTHERS
CREDIT SUISSE FIRST BOSTON
FLEET SECURITIES, INC.
JPMORGAN
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
Underwriters of the Class B Certificates
LEHMAN BROTHERS CREDIT SUISSE FIRST BOSTON
NOVEMBER 19, 2002
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
We provide information to you about the certificates in two separate
documents that progressively provide more detail: (a) the accompanying
prospectus, which provides general information, some of which may not apply to
your series and (b) this prospectus supplement, which describes the specific
terms of your series. This prospectus supplement may be used to sell the Class A
certificates and the Class B certificates only if accompanied by the prospectus.
This prospectus supplement and the prospectus relate to the offering of
Class A certificates and Class B certificates only. The collateral interest is
not offered by this prospectus supplement and prospectus.
IF THE TERMS OF YOUR CERTIFICATES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT
VARY FROM THE TERMS DESCRIBED IN THE ACCOMPANYING PROSPECTUS, YOU SHOULD RELY ON
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT.
We include cross references in this prospectus supplement and the
accompanying prospectus to captions in these materials where you can find
further related discussions. The following table of contents and the table of
contents in the accompanying prospectus provide the pages on which these
captions are located.
You can find a listing of the pages where terms used in this prospectus
supplement and the accompanying prospectus are defined under the caption "Index
of Principal Terms" beginning on page S-50 in this document and under the
caption "Index of Principal Terms" on page 79 in the accompanying prospectus.
----------------------
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
Summary of Terms...................... S-1
The Trust........................... S-1
The Trustee......................... S-1
The Bank............................ S-1
Transferor.......................... S-1
Servicer............................ S-1
The Receivables..................... S-1
Offered Securities.................. S-1
Certificates..................... S-1
Distribution Dates............... S-1
Interest......................... S-1
Principal........................ S-2
The Collateral Interest............. S-2
Credit Enhancement.................. S-2
Subordination of Classes......... S-2
The Transferors' Interest........... S-2
Allocations......................... S-3
Among Series..................... S-3
Among Classes.................... S-3
Application of Collections.......... S-3
Finance Charge Collections....... S-3
Excess Spread and Excess Finance
Charges........................ S-3
Principal Collections............ S-4
Pay Out Events...................... S-4
Optional Repurchase................. S-5
Registration........................ S-5
Tax Status.......................... S-5
ERISA Considerations................ S-5
Certificate Ratings................. S-5
Exchange Listing.................... S-5
Additional Information.............. S-6
Risk Factors.......................... S-7
Ability To Resell Series 2002-C
Certificates Not Assured......... S-7
Credit Enhancement May Not Be
Sufficient To Prevent Loss....... S-7
Class B Certificates Are
Subordinated To The Class A
Certificates; Trust Assets May Be
Diverted From Class B To Pay
Class A.......................... S-7
Ratings Can Be Lowered Or Withdrawn
After You Purchase Your
Certificates And The Market Value
Of Your Certificates May Be
Reduced.......................... S-8
Introduction.......................... S-9
</Table>
<Table>
<Caption>
PAGE
----
The Bank's Credit Card Activities..... S-10
General............................. S-10
Finance Charges..................... S-10
Delinquency and Loss Experience..... S-10
Interchange......................... S-11
Litigation.......................... S-12
The Receivables....................... S-12
Maturity Assumptions.................. S-15
Receivable Yield Considerations....... S-17
Description of the Certificates....... S-18
General............................. S-18
Registration of Certificates........ S-20
Interest Payments................... S-20
Principal Payments.................. S-23
Postponement of Accumulation
Period........................... S-25
Subordination....................... S-25
Allocation Percentages.............. S-26
Reallocation of Cash Flows.......... S-29
Application of Collections.......... S-31
Principal Funding Account........... S-36
Reserve Account..................... S-37
Paired Series....................... S-38
Shared Collections of Principal
Receivables...................... S-38
Allocation of Investor Default
Amount........................... S-39
Optional Repurchase................. S-40
Pay Out Events...................... S-41
Servicing Compensation and Payment
of Expenses...................... S-43
Federal Income Tax Consequences....... S-44
ERISA Considerations.................. S-44
General............................. S-44
Class A Certificates................ S-44
Class B Certificates................ S-46
Consultation with Counsel........... S-47
Underwriting.......................... S-47
Legal Matters......................... S-49
Index of Principal Terms.............. S-50
ANNEX I: OTHER SERIES ISSUED.......... I-1
ANNEX II: RECEIVABLES IN ADDITIONAL
ACCOUNTS CONVEYED TO THE TRUSTEE.... II-1
</Table>
i
SUMMARY OF TERMS
This summary highlights selected information from this document and does not
contain all of the information that you need to consider in making your
investment decision. This summary provides general, simplified descriptions of
matters which, in some cases, are highly technical and complex. More detail is
provided in other sections of this document and in the prospectus.
Do not rely upon this summary for a full understanding of the matters you need
to consider in connection with any potential investment in the certificates. To
understand all of the terms of the offering of the Series 2002-C certificates,
read carefully this entire document and the accompanying prospectus.
THE TRUST
Fleet Credit Card Master Trust II will issue the certificates.
The trust has issued numerous series of certificates, will issue the Series
2002-C certificates and expects to issue additional series. The certificates of
each series will represent an ownership interest in the assets of the trust.
THE TRUSTEE
The trustee is Deutsche Bank Trust Company Americas (formerly known as Bankers
Trust Company). You may obtain information regarding the certificates by
telephoning the trustee at (800) 735-7777.
THE BANK
Fleet Bank (RI), National Association is the owner of the revolving credit card
accounts. The bank sells the receivables in the accounts to Fleet Credit Card
Funding Trust.
The bank is a special purpose credit card bank. Its principal offices are
located at 111 Westminster Street, Providence, Rhode Island 02903. The telephone
number is (401) 278-5451.
TRANSFEROR
As transferor, Fleet Credit Card Funding Trust purchases the receivables from
the bank and transfers the receivables to the trust.
SERVICER
The bank is the servicer. As the servicer, the bank collects payments on the
receivables and allocates the collections among the interests in the trust.
THE RECEIVABLES
The primary assets of the trust are receivables in VISA(R) and MasterCard(R)(1)
revolving credit card accounts. The receivables consist of principal receivables
and finance charge receivables.
The following information is as of October 31, 2002:
- - Principal receivables in the trust: $11,195,951,197.
- - Finance charge receivables in the trust: $254,471,963.
- - Accounts designated to the trust: 6,928,975.
See "The Receivables" in this prospectus
supplement.
OFFERED SECURITIES
CERTIFICATES
Fleet Credit Card Master Trust II is offering:
- - $637,500,000 of Class A certificates; and
- - $45,000,000 of Class B certificates.
The Series 2002-C certificates include both Class A and Class B.
Beneficial interests in these certificates may be purchased in minimum
denominations of $1,000 and integral multiples of $1,000.
The transferor expects that the trust will issue the Series 2002-C certificates
on November 26, 2002.
DISTRIBUTION DATES
The first distribution date will be January 15, 2003.
Distribution dates for the Series 2002-C certificates will be the 15th day of
each month if the 15th day is a business day. If the 15th is not a business day,
the distribution date will be the following business day.
INTEREST
Interest on the Series 2002-C certificates will be paid on each distribution
date.
You may obtain the interest rates for the current interest period and the
immediately preceding interest period by telephoning the trustee at (800)
735-7777.
- ------------
(1) VISA(R) and MasterCard(R) are federally registered servicemarks of VISA
U.S.A., Inc. and MasterCard International Inc., respectively.
S-1
Class A
The Class A certificates will bear interest at 2.75% per annum.
Class B
The Class B certificates will bear interest at LIBOR as determined each month
plus 0.40% per annum.
See "Description of the Certificates--Interest Payments" in this prospectus
supplement for a description of how and when LIBOR will be determined.
PRINCIPAL
The transferor expects that principal on the Series 2002-C certificates will be
distributed on the date noted below; however, principal may, in fact, be
distributed earlier or later. You will not be entitled to any premium for early
or late payment of principal.
If certain adverse events known as pay out events occur, principal may be
distributed earlier than expected.
If collections of the credit card receivables are less than expected or are
collected more slowly than expected, then principal repayment may be delayed.
Class A
The transferor expects that principal of the Class A certificates will be
distributed on the October 2005 distribution date.
Class B
The transferor expects that principal of the Class B certificates will be
distributed on the October 2005 distribution date; however, no principal will be
paid on the Class B certificates unless the Class A certificates are paid in
full.
Accumulation Period
We are scheduled to begin accumulating collections of principal receivables on
January 1, 2005 for later distribution to you. The servicer may, however, elect
to delay the beginning of the accumulation period to a date not later than
September 1, 2005.
See "Description of the Certificates--Principal Payments," and "--Postponement
of Accumulation Period" in this prospectus supplement.
Legal Final Maturity
If the Series 2002-C certificates are not paid on their expected final
distribution dates, collections of receivables will continue to be used to pay
principal on the Series 2002-C certificates until the certificates are paid or
until April 15, 2008, whichever occurs first. April 15, 2008 is the legal final
maturity date for Series 2002-C.
See "Maturity Assumptions," and "Description of the Certificates--Allocation
Percentages," and "--Principal Payments" in this prospectus supplement.
THE COLLATERAL INTEREST
At the same time as the Series 2002-C certificates are issued, the trust will
issue an undivided interest in the trust called a collateral interest in the
amount of $67,500,000 as part of Series 2002-C. The holder of the collateral
interest will have voting and certain other rights as if the collateral interest
were a subordinated class of certificates. The collateral interest is not
offered by this document.
CREDIT ENHANCEMENT
SUBORDINATION OF CLASSES
The collateral interest and the Class B certificates are subordinated to the
Class A certificates.
The collateral interest is also subordinated to the Class B certificates.
See "Description of the Certificates--Reallocation of Cash Flows" and
"--Allocation of Investor Default Amount" in this prospectus supplement.
THE TRANSFERORS' INTEREST
The interest in the trust not represented by your series or by any other series
is the transferors' interest. The transferors' interest is held by Fleet Credit
Card Funding Trust. Fleet Credit Card Funding Trust may sell a portion of the
transferors' interest to other investors. If a portion of the transferors'
interest is sold to anyone other than the transferor or its affiliates, the
interest will be represented by a supplemental certificate. No supplemental
certificates are currently outstanding.
The transferors' interest does not provide credit enhancement for your series or
any other series.
S-2
ALLOCATIONS
AMONG SERIES
Each month the bank, as servicer, will allocate collections received among:
- - Series 2002-C;
- - other outstanding series; and
- - the transferors' interest in the trust.
The amount allocated to your series will generally be determined based upon the
ratio of the invested amount of your series to the total amount of principal
receivables in the trust and any balances in the trust's excess funding account.
You are entitled to receive payments of interest and principal only from
collections and other trust assets allocated to your series.
The invested amount is the primary basis for allocations to your series. The
invested amount is the sum of the Class A invested amount, the Class B invested
amount and the collateral invested amount.
At the time of issuance of the Series 2002-C certificates, the invested amount
for Series 2002-C will be $750,000,000.
AMONG CLASSES
From the amounts allocated to your series, the servicer will further allocate
among the Class A certificates, the Class B certificates and the collateral
interest on the basis of the invested amount of each class and the invested
amount of the collateral interest. Initially the invested amount of each class
will be equal to the original principal amount of that class and the initial
invested amount of the collateral interest will be equal to the original
principal amount of the collateral interest.
See "Description of the Certificates--Allocation Percentages" in this prospectus
supplement.
The invested amount of a series or a class will decline as a result of the
accumulation of principal collections in the principal funding account or
principal payments. The invested amount also may decline if collections of
receivables allocated to your series are not sufficient to make certain required
payments and to cover your series share of principal receivables that are
written off as uncollectible. If the invested amount of your series or class
declines for this reason, there may be a reduction in amounts allocated and
available for payment to you.
For a description of the events which may lead to these reductions, see
"Description of the Certificates--Reallocation of Cash Flows" and "--Allocation
of Investor Default Amount" in this prospectus supplement.
APPLICATION OF COLLECTIONS
FINANCE CHARGE COLLECTIONS
- - Collections of finance charge receivables and certain other amounts allocated
to the Class A certificates will be used to pay interest on the Class A
certificates, to pay Class A's portion of the servicing fee and to cover Class
A's portion of principal receivables that are written off as uncollectible.
Any remaining amount will become excess spread and be applied as described
immediately below under the caption "--Excess Spread and Excess Finance
Charges."
- - Collections of finance charge receivables allocated to the Class B
certificates will be used to pay interest on the Class B certificates and to
pay Class B's portion of the servicing fee. Any remaining amount will become
excess spread and be applied as described immediately below under the caption
"--Excess Spread and Excess Finance Charges."
- - Collections of finance charge receivables allocated to the collateral interest
will be used to pay the collateral interest's portion of the servicing fee if
the bank or the trustee is no longer the servicer. Any remaining amount will
become excess spread and be applied as described immediately below under the
caption "--Excess Spread and Excess Finance Charges."
See "Description of the Certificates--Application of Collections--Payment of
Interest, Fees and Other Items" in this prospectus supplement.
EXCESS SPREAD AND EXCESS FINANCE CHARGES
Each month the excess spread and excess finance charges will be used in the
following order of priority:
- - first to make up deficiencies for Class A,
- - then to make up deficiencies for Class B, including covering Class B's portion
of principal receivables written off as uncollectible,
S-3
- - then to pay interest on the collateral interest at the collateral minimum
interest rate,
- - then to pay the collateral interest's portion of the servicing fee, or, if the
bank or the trustee is no longer the servicer, then to pay any portion of the
collateral interest's servicing fee not paid as described above under
"--Finance Charge Collections,"
- - then to cover the collateral interest's portion of principal receivables that
are written off as uncollectible,
- - then to reimburse any previous reductions in the collateral invested amount,
- - then, in limited circumstances, to fund a reserve account to cover interest
payment shortfalls for Class A, and
- - finally to make payments to the holder of the collateral interest.
See "Description of the Certificates--Application of Collections--Excess Spread;
Excess Finance Charges" in this prospectus supplement.
PRINCIPAL COLLECTIONS
So long as no pay out event has occurred, your series' share of principal
collections, including shared principal collections from other series, will be
applied each month as follows:
- - First, principal collections allocated to the collateral interest and the
Class B certificates may be reallocated, if necessary, to make required
payments on the Class A certificates and the Class B certificates which were
not made from finance charge collections, excess spread or excess finance
charges.
- - During the revolving period, no principal will be paid to you or accumulated
in a trust account.
- - During the accumulation period, principal collections allocated or available
to the Class A certificates and the Class B certificates will be deposited in
the principal funding account, up to a controlled deposit amount, for payment
first to the Class A certificateholders and then to the Class B
certificateholders on the expected final distribution date.
- - Upon payment in full of the Class A certificates and the Class B certificates,
principal collections allocated or available to the collateral interest, up to
the collateral invested amount, will be paid to the collateral interest
holder.
- - Any remaining principal collections will be first made available to other
series and then paid to the holders of the transferors' interest or deposited
in the excess funding account.
If a pay out event occurs, the rapid amortization period will begin and all of
the principal collections allocated or available to the Class A certificates and
the Class B certificates, except amounts required to be reallocated, will be
applied each month to pay principal on your series. Class A will be paid first,
and then Class B.
See "Description of the Certificates--Principal Payments," "--Application of
Collections" and "--Shared Collections of Principal Receivables" in this
prospectus supplement.
PAY OUT EVENTS
Pay out events are adverse events that result in the end of the revolving period
or the accumulation period and the beginning of a rapid amortization period.
The following are pay out events for your series:
- - the transferor fails to make required payments, fails to make required
deposits, or violates other covenants and agreements;
- - the representations and warranties of the transferor are materially incorrect;
- - the transferor does not transfer additional assets to the trust when required;
- - the percentage obtained from your series' allocation of the yield on the trust
portfolio and investment earnings from the principal funding account and
withdrawals from the reserve account, after taking into account the amount of
the principal receivables that are written off as uncollectible allocated to
Series 2002-C, averaged over any three consecutive months is less than the
weighted average interest rate for Series 2002-C, calculated by taking into
account the interest rate for Class A, Class B and the collateral minimum
interest rate, plus the servicing fee rate for Series 2002-C averaged over the
same three months;
- - certain defaults of the servicer; or
- - the Class A certificates, the Class B certificates or the collateral interest
are not paid in full on their expected final distribution date.
S-4
The following are pay out events for the trust:
- - the occurrence of certain events of insolvency or receivership relating to the
bank or any additional account owner or the transferor or any additional
transferor;
- - the transferor is unable to transfer receivables to the trust as required
under the pooling and servicing agreement or the bank is unable to transfer
receivables to the transferor as required under the receivables purchase
agreement; or
- - the trust becomes an "investment company" under the Investment Company Act of
1940.
For a more detailed discussion of the pay out events, see "Description of the
Certificates--Pay Out Events" in this prospectus supplement. In addition, see
"Description of the Certificates--Trust Pay Out Events" in the accompanying
prospectus.
OPTIONAL REPURCHASE
The transferor has the option to repurchase your certificates when the investor
amount for your series has been reduced to 5% or less of the initial invested
amount.
See "Description of the Certificates--Optional Repurchase" in this prospectus
supplement and "Risk Factors--If Optional Repurchase Occurs, It May Result in an
Early Return of Principal and a Reinvestment Risk" in the accompanying
prospectus.
REGISTRATION
The Series 2002-C certificates will be in book-entry form and will be registered
in the name of Cede & Co., as the nominee of The Depository Trust Company.
Except in certain limited circumstances, you will not receive a definitive
certificate representing your interest.
See "Description of the Certificates--Definitive Certificates" in the
accompanying prospectus.
You may elect to hold your certificates through DTC in the United States, or
Clearstream Banking, societe anonyme or the Euroclear System in Europe.
See "Description of the Certificates--Book-Entry Registration" and "--Definitive
Certificates" in the accompanying prospectus.
TAX STATUS
Orrick, Herrington & Sutcliffe LLP, as special tax counsel to the bank and the
transferor, is of the opinion that under existing law your certificates will be
characterized as debt for federal income tax purposes. By your acceptance of a
Series 2002-C certificate, you will agree to treat your certificates as debt for
federal, state and local income and franchise tax purposes.
See "Federal Income Tax Consequences" in the accompanying prospectus for
additional information concerning the application of federal income tax laws.
ERISA CONSIDERATIONS
Subject to important considerations described under "ERISA Considerations" in
this prospectus supplement and in the accompanying prospectus, the Class A
certificates are eligible for purchase by persons investing assets of employee
benefit plans or individual retirement accounts.
For the reasons discussed under "ERISA Considerations" in this prospectus
supplement and the accompanying prospectus, the Class B certificates are not
eligible for purchase by persons investing assets of employee benefit plans or
individual retirement accounts other than an insurance company investing assets
of its general account.
CERTIFICATE RATINGS
The Class A certificates will be rated in the highest rating category by at
least one nationally recognized rating organization and the Class B certificates
will be rated in one of the three highest rating categories by at least one
nationally recognized rating organization.
See "Risk Factors--Ratings Can Be Lowered or Withdrawn After You Purchase Your
Certificates And The Market Value Of Your Certificates May Be Reduced" in this
prospectus supplement.
EXCHANGE LISTING
We will apply to list the Class A certificates and the Class B certificates on
the Luxembourg Stock Exchange. We cannot guaranty that the application for the
listing will be accepted. You should consult with Deutsche Bank Luxembourg S.A.,
the Luxembourg listing agent for the certificates, 14 Boulevard F.D. Roosevelt,
L-2450 Luxembourg, phone number (352) 46 02 41, to
S-5
determine whether or not the Series 2002-C certificates are listed on the
Luxembourg Stock Exchange.
ADDITIONAL INFORMATION
For more information, you can call (215) 444-6800 and direct your inquiries to
the Fleet Credit Card Securitization Department.
S-6
RISK FACTORS
In the accompanying prospectus you will find a section called "Risk
Factors." The information in that section applies generally to all series,
including yours. The information in this section applies more specifically to
your series.
You should consider the risk factors discussed under the caption "Risk
Factors" in the prospectus and the risk factors discussed below in this section
before deciding whether to purchase any of the Series 2002-C certificates.
<Table>
ABILITY TO RESELL SERIES 2002-C If you purchase Series 2002-C certificates, you may not
CERTIFICATES NOT ASSURED be able to sell them. There is currently no secondary
market for the certificates. A secondary market for your
certificates may not develop. If a secondary market does
develop, it may not continue or it may not provide
sufficient liquidity to allow you to resell all or a
part of your certificates if you want to do so. The
underwriters of the Class A certificates and the
underwriters of the Class B certificates may assist in
resales of the certificates, but they are not required
to do so.
CREDIT ENHANCEMENT MAY NOT BE SUFFICIENT Credit enhancement provided for your series of
TO PREVENT LOSS certificates is limited. The only sources of payment for
your certificates are the assets of the trust allocated
to your series. If problems develop with the
receivables, such as an increase in losses on the
receivables or if there are problems in the collection
and transfer of the receivables to the trust, it is
possible that you may not receive the full amount of
interest and principal that you would otherwise receive.
See "Description of the Certificates--Subordination,"
"--Allocation Percentages," "--Reallocation of Cash
Flows" and "--Allocation of Investor Default Amount" in
this prospectus supplement.
CLASS B CERTIFICATES ARE SUBORDINATED TO If you purchase a Class B certificate, your right to
THE CLASS A CERTIFICATES; TRUST ASSETS MAY receive principal payments is subordinated to the
BE DIVERTED FROM CLASS B TO PAY CLASS A payment in full of the Class A certificates. No
principal will be paid to you until the full amount of
principal has been paid on the Class A certificates.
In addition, if Class A's share of collections of
finance charge receivables and certain other amounts
allocated to Series 2002-C, excess spread, excess
finance charges and the collateral interest's share of
principal collections are not sufficient to make all
required payments for the Class A certificates,
collections of principal receivables allocated to Class
B may be diverted to Class A. If this occurs, the Class
B invested amount and future allocations to Class B
would be reduced.
Also, if Class A's share of losses on principal
receivables exceeds the collections and credit
enhancement available to cover those losses, and the
collateral invested amount is reduced to zero, the Class
B invested amount will be reduced to avoid reducing the
Class A invested amount. If this occurs, the Class B
invested amount and future allocations to Class B would
be reduced.
</Table>
S-7
<Table>
As a result of the subordination, you may receive
payments of interest or principal later than you expect
or you may not receive the full amount of expected
principal and interest.
RATINGS CAN BE LOWERED OR WITHDRAWN AFTER The ratings assigned to the Series 2002-C certificates
YOU PURCHASE YOUR CERTIFICATES AND THE are based upon many factors, including the credit
MARKET VALUE OF YOUR CERTIFICATES MAY BE quality of the receivables and the amount of credit
REDUCED enhancement provided. The ratings are not a
recommendation to purchase, hold or sell any of the
Series 2002-C certificates. The ratings also are not
intended and should not be relied upon to determine the
marketability of the Series 2002-C certificates, the
market value of the Series 2002-C certificates or
whether the Series 2002-C certificates are a suitable
investment for you.
Any rating agency may lower its rating or withdraw its
rating entirely if, in the sole judgment of the rating
agency, the credit quality of the certificates has
declined or is in question. If any rating assigned to
your certificates is lowered or withdrawn, the market
value of your certificates may be reduced.
</Table>
S-8
INTRODUCTION
The following provisions of this prospectus supplement contain more
detailed information concerning the asset-backed certificates offered hereby.
The certificates will be issued by Fleet Credit Card Master Trust II (the
"TRUST") pursuant to the terms of a Pooling and Servicing Agreement dated as of
December 1, 1993. The Pooling and Servicing Agreement has been amended numerous
times and was most recently amended and restated as of January 1, 2002 and was
further amended by Amendment Number 1 dated as of April 1, 2002. The Pooling and
Servicing Agreement, as amended from time to time, is in this prospectus
supplement called the "MASTER POOLING AND SERVICING AGREEMENT." The Master
Pooling and Servicing Agreement is among Fleet Credit Card Funding Trust
("FCCF"), as transferor, Fleet Bank (RI), National Association (the "BANK"), as
servicer, and Deutsche Bank Trust Company Americas (formerly known as Bankers
Trust Company), as trustee.
In addition to its role as servicer, the bank is the owner of credit card
accounts including those designated to the trust. Pursuant to a receivables
purchase agreement dated as of January 1, 2002 and amended as of April 1, 2002
between the bank and FCCF (the "RECEIVABLES PURCHASE AGREEMENT"), the
receivables in designated accounts are sold by the bank to FCCF. FCCF, as
transferor, then transfers the receivables to the trustee under the Master
Pooling and Servicing Agreement.
Prior to January 1, 2002 (the "SUBSTITUTION DATE") the bank sold
receivables from the designated accounts directly to the trustee. As of January
1, 2002, FCCF was substituted as the direct transferor to the trust and the bank
sells the receivables to FCCF under the Receivables Purchase Agreement described
above.
FCCF, in its capacity as transferor under the Master Pooling and Servicing
Agreement and the series supplement, is referred to as the transferor. The bank
in its capacity as servicer, is referred to as the servicer. The term
"TRANSFEROR" refers to FCCF and also includes the entities which were the
sellers under the Master Pooling and Servicing Agreement to the trust prior to
the substitution date and includes any additional transferors as described under
the caption "Description of the Certificates -- The Base Certificate; Additional
Transferors" in the accompanying prospectus. The term "SERVICER" refers to the
bank and also refers to any successor to the bank, as servicer.
The bank is an indirect, wholly-owned subsidiary of FleetBoston Financial
Corporation ("FLEET"). Fleet is the bank holding company which came into
existence on October 1, 1999 as a result of the merger of Fleet Financial Group,
Inc. and BankBoston Corporation. Prior to the merger of Fleet Financial Group,
Inc. and the BankBoston Corporation, the bank was an indirect wholly-owned
subsidiary of Fleet Financial Group, Inc. See "The Bank and FleetBoston
Financial Corporation" in the accompanying prospectus.
FCCF is a Delaware statutory trust. FCCF was formed as a limited liability
company under the laws of the state of Delaware on November 15, 2001 and
converted to a statutory trust under Delaware law on March 28, 2002. FCCF is an
indirect subsidiary of the bank. FCCF's address is 300 North Wakefield Drive,
Suite DE EH 60002 P, Newark, Delaware 19702 and the telephone number is (302)
266-5004.
The trust will issue $637,500,000 of its Class A 2.75% Asset-Backed
Certificates, Series 2002-C (the "CLASS A CERTIFICATES") and $45,000,000 of its
Class B Floating Rate Asset-Backed Certificates, Series 2002-C (the "CLASS B
CERTIFICATES"). There will also be created, as part of Series 2002-C, a third
class of interests in the trust which shall be in the amount of $67,500,000 and
be known as the Collateral Interest, Series 2002-C ("COLLATERAL INTEREST").
The Class A Certificates and the Class B Certificates are, collectively,
the "SERIES 2002-C CERTIFICATES." The registered holders of the Class A
Certificates are referred to as the "CLASS A CERTIFICATEHOLDERS." The registered
holders of the Class B Certificates are referred to as the "CLASS B
CERTIFICATEHOLDERS." The registered holder of the Collateral Interest is the
"COLLATERAL INTEREST HOLDER." The Class A Certificateholders and the Class B
Certificateholders, together with the Collateral Interest Holder are,
collectively, the "SERIES 2002-C HOLDERS." The Series 2002-C Certificates and
the Collateral Interest are, collectively, the "SERIES 2002-C INTERESTS." The
series in which the Series 2002-C Interests
S-9
are issued is known as "SERIES 2002-C." The closing date on which the Series
2002-C Interests will be issued is expected to be November 26, 2002.
The Series 2002-C Interests will be issued pursuant to the Master Pooling
and Servicing Agreement and a series supplement designated as the Series 2002-C
Supplement. The Master Pooling and Servicing Agreement together with the series
supplement is, in this prospectus supplement, the "POOLING AND SERVICING
AGREEMENT."
Series 2002-C will be the thirty-second series issued by the trust. Of
these series, sixteen, including Series 2002-C, will be outstanding on the
closing date and each of those sixteen series will be included in the group of
series issued by the trust from time to time and designated as Group One. See
Annex I. Annex I is hereby incorporated into this prospectus supplement by
reference. Additional series are expected to be issued from time to time by the
trust.
The certificates offered by this prospectus supplement and the accompanying
prospectus are investment grade asset-backed securities within the meaning of
the Securities Act of 1933, as amended, and the rules promulgated under it.
THE BANK'S CREDIT CARD ACTIVITIES
GENERAL
The bank owns a portfolio of credit card accounts consisting of accounts
originated by the bank or acquired from other entities. The portfolio of credit
card accounts owned by the bank, as it exists from time to time, including
additional accounts originated or acquired in the future, is the "FLEET CREDIT
CARD PORTFOLIO." The accounts which have been designated to the trust are
included in the Fleet Credit Card Portfolio, however, the Fleet Credit Card
Portfolio also includes other accounts which have not been designated to the
trust.
The initial accounts were designated to the trust in 1993 by a predecessor
transferor to the trust. Since the initial designation, additional accounts have
been designated for inclusion in the trust from time to time as set forth in
Annex II. Annex II is hereby incorporated into this prospectus supplement by
reference.
The bank is a member of VISA U.S.A., Inc. and MasterCard International Inc.
FINANCE CHARGES
Some accounts have floating rate finance charges set at a rate above the
London interbank offered rate or at a rate above the prime rate. Other accounts
have finance charges set at rates established from time to time by the bank. For
more information, see "The Bank's Credit Card Activities--Billing and Payments"
in the accompanying prospectus.
DELINQUENCY AND LOSS EXPERIENCE
The following tables show the delinquency and loss experience for the Fleet
Credit Card Portfolio.
The trust portfolio is made up of the accounts which have been designated
to the trust and the receivables in these accounts as of any date of
determination. The accounts designated to the trust must be Eligible Accounts.
See "Description of the Certificates--Representations, Warranties and Covenants"
and "--Addition of Accounts" in the accompanying prospectus. See also "The
Receivables" in this prospectus supplement.
The trust portfolio is only a portion of the Fleet Credit Card Portfolio;
therefore, actual delinquency and loss experience for the receivables in the
trust may be different from that shown in the following tables which include
information for the entire Fleet Credit Card Portfolio.
S-10
There can be no assurance that the delinquency and loss experience for the
receivables in the trust will be similar to the historical experience shown in
the following tables.
DELINQUENCY EXPERIENCE
FLEET CREDIT CARD PORTFOLIO
(DOLLARS IN THOUSANDS)
<Table>
<Caption>
AS OF AS OF DECEMBER 31,
SEPTEMBER 30, -----------------------------------------
2002 2001 2000 1999
------------- ----------- ----------- -----------
Receivables Outstanding(1)(2)......... $15,629,064 $15,414,076 $14,685,814 $14,278,212
Receivables Contractually Delinquent
as a Percentage of Receivables
Outstanding(1):
30-59 days.......................... 1.24% 1.25% 1.52% 1.44%
60-89 days.......................... 0.91% 0.96% 1.13% 1.09%
90 or more days..................... 1.71% 1.86% 2.40% 2.35%
----------- ----------- ----------- -----------
Total................................. 3.86% 4.07% 5.05% 4.88%
=========== =========== =========== ===========
</Table>
- ------------
(1) Receivables Outstanding and Receivables Contractually Delinquent as a
Percentage of Receivables Outstanding related to the credit card portfolio
acquired by Fleet as a result of the merger of Fleet Financial Group, Inc.
and BankBoston Corporation are included as of March 31, 2000.
(2) Receivables Outstanding consists of all amounts due from cardholders as
posted to the accounts.
LOSS EXPERIENCE
FLEET CREDIT CARD PORTFOLIO
(DOLLARS IN THOUSANDS)
<Table>
<Caption>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, -----------------------------------------
2002 2001 2000 1999
------------- ----------- ----------- -----------
Average Receivables
Outstanding(1)(2)................... $14,981,118 $14,415,785 $14,199,216 $13,065,414
Gross Losses(1)(3).................... $ 665,519 $ 927,801 $ 863,922 $ 967,611
Recoveries(1)......................... $ 46,670 $ 74,586 $ 74,400 $ 75,883
Net Losses............................ $ 618,849 $ 853,215 $ 789,522 $ 891,728
Net Losses as a Percentage of Average
Receivables Outstanding............. 5.51%(4) 5.92% 5.56% 6.83%
</Table>
- ------------
(1) Average Receivables Outstanding, Gross Losses and Recoveries related to the
credit card portfolio acquired by Fleet as a result of the merger of Fleet
Financial Group, Inc. and BankBoston Corporation are included as of March
31, 2000.
(2) Average Receivables Outstanding is the sum of receivables outstanding at the
beginning and end of each month during the period indicated, divided by
twice the number of months in the period indicated.
(3) Gross Losses are presented net of adjustments made pursuant to the bank's
normal servicing procedures and do not include accrued finance charges and
fees on accounts charged-off.
(4) Annualized.
INTERCHANGE
Each month the bank sells to FCCF, under the Receivables Purchase
Agreement, interchange allocated to the accounts designated to the trust. See
the "Receivables Purchase Agreement" in the accompanying prospectus. Under the
Master Pooling and Servicing Agreement and the Series 2002-C Supplement, the
transferor is required prior to the distribution date each month to transfer to
the trust for
S-11
Series 2002-C a portion of the allocated interchange equal to one-twelfth of
1.25% of the outstanding balance of the principal receivables allocable to
Series 2002-C at the end of the preceding month.
LITIGATION
On January 22, 1999, Fleet Financial Group, Inc. (the predecessor to
FleetBoston Financial Corporation), Fleet National Bank, Fleet Bank (RI),
National Association, Fleet Credit Card Services, L.P. and Fleet Credit Card
Holdings, Inc. brought suit against Advanta Corp., and certain of its
subsidiaries. The action arose out of a February 1998 transaction in which Fleet
Financial Group, Inc. and the predecessor in interest to Fleet Credit Card
Services, L.P., acquired most of the consumer credit card business of Advanta
National Bank. The Advanta entities answered the Fleet entities' complaint,
denying the principal allegations and asserting a variety of counterclaims.
Since then, the court has granted three motions for partial summary judgement in
favor of the Fleet entities, but several claims remain to be resolved. Trial of
the remaining claims commenced in November 2001 and concluded in December 2001.
Thereafter, the parties submitted post-trial memoranda and presented closing
arguments, but the court has not yet issued its decision. Due to the nature of
the Advanta entities' pleadings and the general unpredictability of the
litigation process, it is impossible, at this time, to predict the ultimate
outcome of the litigation. However, Fleet does not expect the resolution of this
action to have a material adverse impact on its business.
THE RECEIVABLES
The receivables in the initial accounts designated to the trust were
conveyed to the trust on December 3, 1993. Since that date, accounts have been
added to the trust from time to time as set forth in Annex II.
Prior to the substitution date, on each account addition, the bank selected
accounts, designated the accounts to the trust and transferred the receivables
in the accounts to the trustee. On and after the substitution date, on each
account addition, FCCF requests that the bank designate accounts under the
Receivables Purchase Agreement. The bank selects and designates accounts and
sells the receivables in the designated account to FCCF. Under the Master
Pooling and Servicing Agreement, FCCF designates the accounts to the trust and
transfers the receivables in the accounts to the trustee. In each case, the bank
has broad discretion in selecting accounts that will be designated as additional
accounts; however, each additional account must, as of the relevant cut-off date
for that account, qualify as an Eligible Account. In order to be an Eligible
Account, each account must on the relevant cut-off date, among other things, be
in existence and maintained by the bank, or an additional account owner, have a
cardholder with a billing address in the United States, its territories or
possessions or a military address, and, except under limited circumstances, not
be an account the credit card or cards for which have been reported as having
been lost or stolen. See "Description of the Certificates--Representations,
Warranties and Covenants" in the accompanying prospectus.
Cardholders whose accounts are included in the Fleet Credit Card Portfolio
have billing addresses in all 50 states, the District of Columbia, Puerto Rico,
Guam, the Virgin Islands and certain foreign countries. As noted above, Eligible
Accounts must, as of the relevant cut-off date, have a billing address in the
United States, its territories or possessions or a military address. As of
October 31, 2002, 99.9% of the accounts designated to the trust and 99.9% of the
receivables in the trust had billing addresses in one of the 50 states or the
District of Columbia.
Pursuant to the Pooling and Servicing Agreement, the transferor may be
obligated to designate additional accounts to the trust and to convey all
receivables of these additional accounts to the trustee. Also, the transferor
may in its discretion, from time to time, designate additional accounts to the
trust. In such case, the transferor will request the bank to select and
designate additional accounts and the bank will do so under the Receivables
Purchase Agreement. All of the receivables in the designated accounts are
conveyed to FCCF and FCCF conveys the receivables to the trustee whether these
receivables are
S-12
then existing or are subsequently created. See "Description of the
Certificates--General" and "--Addition of Accounts" in the accompanying
prospectus. As of the relevant cut-off date and on the date any new receivables
are created, the bank and the transferor represent and warrant that the
receivables in the accounts are Eligible Receivables. See "Description of
Certificates--Representations, Warranties and Covenants" in the accompanying
prospectus.
As of the date of this prospectus supplement, the accounts from which the
receivables in the trust arise are the existing VISA and MasterCard accounts.
However, any new accounts designated to the trust are not required to be VISA
and MasterCard accounts.
The receivables in the trust including receivables in additional accounts,
which have been or are expected to be designated to the trust during the period
from October 31, 2002 through the date of issuance of the Series 2002-C
Certificates totaled $12,312,218,694 in 7,226,938 accounts as of October 31,
2002. The accounts had an average credit limit of $8,704. The percentage of the
aggregate total receivables balance to the aggregate total credit limit was
19.6%. The average age of the accounts designated to the trust was approximately
51.7 months.
The receivables balance in the trust as of October 31, 2002 totaled (not
including receivables to be added to the trust thereafter) $11,450,423,160. The
receivables balance in the trust as of November 14, 2002 totaled
$11,375,212,545. As of November 14, 2002 the balance of receivables in the trust
which were 30 days or more contractually delinquent was $492,249,851.
The following tables summarize the trust portfolio, by various criteria as
of the close of business on October 31, 2002 including receivables in additional
accounts, which have been or are expected to be designated to the trust during
the period from October 31, 2002 through the date of issuance of the Series
2002-C Certificates. Because the future composition of the trust portfolio may
change over time, these tables are not necessarily indicative of future results.
COMPOSITION BY ACCOUNT BALANCE
TRUST PORTFOLIO
<Table>
<Caption>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
ACCOUNT BALANCE RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- --------------------- --------- ---------- --------------- -----------
Credit balance........................... 105,871 1.5% $ (11,289,634) (0.1)%
$0.00.................................... 3,341,231 46.2 0 0.0
$0.01 to $1,000.00....................... 1,291,935 17.9 440,999,192 3.6
$1,000.01 to $2,500.00................... 717,396 9.9 1,220,188,254 9.9
$2,500.01 to $5,000.00................... 836,215 11.6 3,073,449,767 25.0
$5,000.01 to $7,500.00................... 476,449 6.6 2,922,574,961 23.7
Over $7,500.00........................... 457,841 6.3 4,666,296,154 37.9
--------- ----- --------------- -----
Total.................................... 7,226,938 100.0% $12,312,218,694 100.0%
========= ===== =============== =====
</Table>
S-13
COMPOSITION BY CREDIT LIMIT
TRUST PORTFOLIO
<Table>
<Caption>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
CREDIT LIMIT ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- ------------ --------- ---------- --------------- -----------
$0.00 to $2,500.00....................... 583,083 8.1% $ 299,010,485 2.4%
$2,500.01 to 3,500.00.................... 294,156 4.1 351,317,293 2.9
$3,500.01 to 5,000.00.................... 805,324 11.1 1,050,625,130 8.6
$5,000.01 to 7,500.00.................... 1,273,142 17.6 1,944,412,492 15.8
$7,500.01 to 10,000.00................... 1,644,445 22.7 2,491,435,322 20.2
$10,000.01 to 12,500.00.................. 1,249,465 17.3 2,244,152,953 18.2
Over $12,500.00.......................... 1,377,323 19.1 3,931,265,019 31.9
--------- ----- --------------- -----
Total.................................... 7,226,938 100.0% $12,312,218,694 100.0%
========= ===== =============== =====
</Table>
COMPOSITION BY PERIOD OF DELINQUENCY
TRUST PORTFOLIO
<Table>
<Caption>
PERCENTAGE
OF TOTAL PERCENTAGE
PERIOD OF DELINQUENCY NUMBER OF NUMBER OF OF TOTAL
(DAYS CONTRACTUALLY DELINQUENT) ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- ------------------------------- --------- ---------- --------------- -----------
Not Delinquent........................... 7,045,401 97.5% $11,446,806,234 93.0%
1 to 29 days............................. 93,405 1.3 389,023,878 3.1
30 to 59 days............................ 28,554 0.4 144,123,037 1.2
60 to 89 days............................ 20,979 0.3 115,064,424 0.9
90 to 119 days........................... 15,674 0.2 86,429,104 0.7
120 to 149 days.......................... 12,196 0.2 68,631,070 0.6
150 or more days......................... 10,729 0.1 62,140,947 0.5
--------- ----- --------------- -----
Total.................................... 7,226,938 100.0% $12,312,218,694 100.0%
========= ===== =============== =====
</Table>
COMPOSITION BY ACCOUNT AGE
TRUST PORTFOLIO
<Table>
<Caption>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
ACCOUNT AGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- ----------- --------- ---------- --------------- -----------
Not more than 6 Months................... 362,060 5.0% $ 1,058,614,296 8.6%
Over 6 to 12 Months...................... 800,809 11.1 1,771,907,144 14.4
Over 12 to 24 Months..................... 1,405,565 19.4 2,377,654,940 19.3
Over 24 to 36 Months..................... 1,073,583 14.9 1,735,175,380 14.1
Over 36 to 48 Months..................... 851,312 11.8 1,348,074,985 10.9
Over 48 to 60 Months..................... 835,663 11.5 920,878,917 7.5
Over 60 to 84 Months..................... 603,461 8.4 993,751,241 8.1
Over 84 Months........................... 1,294,485 17.9 2,106,161,791 17.1
--------- ----- --------------- -----
Total.................................... 7,226,938 100.0% $12,312,218,694 100.0%
========= ===== =============== =====
</Table>
S-14
COMPOSITION BY STATE
TRUST PORTFOLIO
<Table>
<Caption>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
STATE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- ----- --------- ---------- --------------- -----------
California............................... 816,766 11.3% $ 1,278,264,852 10.4%
New York................................. 672,019 9.3 1,041,801,770 8.5
Texas.................................... 432,205 6.0 818,174,989 6.7
Florida.................................. 442,330 6.1 791,826,341 6.4
Massachusetts............................ 394,967 5.5 596,886,129 4.8
Pennsylvania............................. 337,470 4.7 543,312,706 4.4
New Jersey............................... 354,099 4.9 522,527,307 4.2
Ohio..................................... 260,968 3.6 474,122,734 3.9
Illinois................................. 276,274 3.8 447,127,884 3.6
Michigan................................. 219,566 3.0 395,826,933 3.2
All Others(1)............................ 3,020,274 41.8 5,402,347,049 43.9
--------- ----- --------------- -----
Total.................................... 7,226,938 100.0% $12,312,218,694 100.0%
========= ===== =============== =====
</Table>
- ------------
(1) No state or other jurisdiction in this category represented more than 3% of
the total number of accounts or more than 3% of the receivables.
MATURITY ASSUMPTIONS
The Pooling and Servicing Agreement provides that, unless a Pay Out Event
occurs, the Class A Certificateholders will not receive payments of principal
until the October 2005 distribution date (the "CLASS A EXPECTED FINAL
DISTRIBUTION DATE"). The transferor expects that the full principal amount of
the Class A Certificates will be paid on the Class A Expected Final Distribution
Date. However, if a Pay Out Event occurs, principal payments may begin prior to
that date.
The Pooling and Servicing Agreement also provides that the Class B
Certificateholders will not receive payments of principal until the October 2005
distribution date (the "CLASS B EXPECTED FINAL DISTRIBUTION DATE"). The
transferor expects that the full principal amount of the Class B Certificates
will be paid on the Class B Expected Final Distribution Date. However, if a Pay
Out Event occurs, principal payments may begin prior to that date.
No principal payments will be made to the Class B Certificateholders unless
the Class A Investor Amount is paid in full.
Series 2002-C will have a period of time called the "ACCUMULATION PERIOD"
when monthly deposits are made into the principal funding account. During the
accumulation period, amounts deposited in the principal funding account will
accumulate in an amount calculated to be sufficient to pay the Class A
Certificates on the Class A Expected Final Distribution Date and to pay the
Class B Certificates on the Class B Expected Final Distribution Date. Unless and
until a Pay Out Event occurs, on each distribution date for the accumulation
period, prior to the date on which the Class A Investor Amount and Class B
Investor Amount are paid in full, monthly deposits of principal will be made
into the principal funding account in an amount equal to the least of:
(a) Available Investor Principal Collections;
(b) the sum of:
(1) the Controlled Accumulation Amount for that distribution date;
and
S-15
(2) any Deficit Controlled Accumulation Amount for the immediately
preceding distribution date; or
(c) the Class A Invested Amount and Class B Invested Amount.
It is anticipated that a single principal payment will be made to Class A
Certificateholders in an amount equal to the Class A Investor Amount on the
Class A Expected Final Distribution Date and that a single principal payment
will also be made to Class B Certificateholders in an amount equal to the Class
B Investor Amount on the Class B Expected Final Distribution Date. However,
payment rates vary and we cannot assure you that Available Investor Principal
Collections will always be sufficient to make required payments to the principal
funding account or to make payments on your certificates when you expect.
On the other hand, the occurrence of a Pay Out Event may result in
principal being paid to you earlier than expected.
Pay Out Events which apply to all series are described in the accompanying
prospectus. See "Description of the Certificates--Trust Pay Out Events" in the
accompanying Prospectus.
Series Pay Out Events for Series 2002-C are described in this prospectus
supplement under the caption "Description of the Certificates--Pay Out Events."
There can be no assurance that a Pay Out Event will not occur. See
"Description of the Certificates--Pay Out Events" in this Prospectus Supplement.
Upon the occurrence of a Pay Out Event which applies to Series 2002-C or to
all series, a "RAPID AMORTIZATION PERIOD" will begin. The rapid amortization
period means the period beginning with the occurrence of a Pay Out Event and
ending on the earlier of:
(a) the payment in full of the Class A Investor Amount, the Class B
Investor Amount and the Collateral Invested Amount; and
(b) the Series 2002-C Termination Date.
During the rapid amortization period, first the Class A Certificateholders
and then, following the payment in full of the Class A Investor Amount, the
Class B Certificateholders will be entitled to receive monthly payments of
principal. The monthly payments will be equal to the Available Investor
Principal Collections received by the trust during the related monthly period,
plus the principal amount on deposit in the principal funding account, until the
Class A Investor Amount or Class B Investor Amount, as applicable, is paid in
full.
Allocations of collections of principal receivables will be made to Series
2002-C based on the Principal Allocation Percentage. See "Description of the
Certificates--Allocation Percentages" in this Prospectus Supplement.
The following table shows the highest and lowest cardholder monthly payment
rates and the average of the cardholder monthly payment rates for the Fleet
Credit Card Portfolio. The rates are calculated as a percentage of the total
opening monthly account balances during the periods shown. Payments shown in the
table include amounts which would be deemed payments of principal receivables
and finance charge receivables on the accounts.
S-16
MONTHLY PAYMENT RATES
FLEET CREDIT CARD PORTFOLIO(1)
<Table>
<Caption>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, -----------------------
2002 2001 2000 1999
------------- ----- ----- -----
Lowest................................................ 12.17% 11.17% 11.12% 11.20%
Highest............................................... 14.79% 13.40% 12.93% 13.64%
Monthly Average....................................... 13.46% 12.59% 12.07% 12.06%
</Table>
- ------------
(1) Payments related to the credit card portfolio acquired by Fleet as a result
of a merger of Fleet Financial Group, Inc. and BankBoston Corporation are
included as of March 31, 2000.
The amount of collections on receivables from the trust may vary from month
to month due to seasonal variations, general economic conditions, changes in tax
law and payment habits of individual cardholders. There can be no assurance that
collections of principal receivables from the trust portfolio, and thus the rate
at which you can expect to accumulate or receive payments of principal on your
certificates during the accumulation period or the rapid amortization period,
will be similar to the historical experience set forth above. In addition, the
ability to pay the Class A Investor Amount or the Class B Investor Amount on the
Class A Expected Final Distribution Date and the Class B Expected Final
Distribution Date, respectively, may be dependent upon the availability of
Shared Principal Collections.
Since the trust, as a master trust, may issue additional series from time
to time, there can be no assurance that the issuance of additional series or the
terms of any additional series might not have an impact on the timing of
payments made to you. Further, if a Pay Out Event occurs, the average life and
maturity of the Series 2002-C Certificates could be significantly reduced.
RECEIVABLE YIELD CONSIDERATIONS
The following table provides yield information for the nine months ended
September 30, 2002 and each of the years ended December 31, 2001, 2000 and 1999.
The historical yield figures in the table are calculated on an accrual
basis. Collections on the receivables in the trust will be on a cash basis and
may not reflect the historical yield experience in the table. For example,
during periods of increasing delinquencies accrual yields may exceed cash yields
as amounts collected on credit card receivables lag behind amounts accrued and
billed to cardholders. Conversely, as delinquencies decrease, cash yields may
exceed accrual yields as amounts collected in a current period may include
amounts accrued during prior periods. Yield on both an accrual and a cash basis
will be affected by numerous factors, including the finance charges on the
receivables in the trust, the amount of the annual cardholder fees and other
fees and charges, changes in the delinquency rate on the receivables in the
trust, the percentage of cardholders who pay their balances in full each month
and do not incur finance charges and any restrictions which may be imposed by
future legislation or regulations. There can be no assurance that the revenue
from finance charges and fees for the receivables in the trust will be similar
to the historical experience set forth below. See "Risk Factors" in the
accompanying Prospectus.
S-17
REVENUE FROM FINANCE CHARGES AND FEES
FLEET CREDIT CARD PORTFOLIO
<Table>
<Caption>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------
2002 2001 2000 1999
------------- ------ ------ ------
Average Monthly Accrued Finance Charges and
Fees(1)(2)......................................... $38.62 $41.54 $44.17 $42.44
Average Account Balance(1)(3)........................ $3,065 $2,974 $2,882 $2,699
Yield From Finance Charges and Fees
(Annualized)(2).................................... 15.12% 16.76% 18.39% 18.87%
</Table>
- ------------
(1) Finance charges, fees and account balances related to the credit card
portfolio acquired by Fleet as a result of the merger of Fleet Financial
Group, Inc. and BankBoston Corporation are included as of March 31, 2000.
(2) Finance charges and fees are comprised of periodic finance charges, fees and
revenue attributed to interchange. Average Monthly Accrued Finance Charges
and Fees and Yield From Finance Charges and Fees are presented net of
adjustments made pursuant to normal servicing procedures, including the
removal of incorrect or disputed finance charges and fees and the reversal
of finance charges and fees on charged-off accounts.
(3) Average Account Balance includes net purchases, cash advances, balance
transfers, and billed and unpaid finance charges and fees, and is calculated
on the average of the monthly account balances for accounts with balances
during the periods presented.
The yields shown in the above table are comprised of three components:
finance charges, fees and revenue attributed to interchange. The yield related
to fees varies with the type and volume of activity in, and the balance of, each
account.
The decrease in the Yield From Finance Charges and Fees shown in the above
table for the year ended December 31, 2001 and for the nine months ended
September 30, 2002 compared to the year ended December 31, 2000 reflects a
general decrease in interest rates. In addition, the decrease for the nine month
period ended September 30, 2002 is, in part, due to the origination of a
substantial volume of new accounts in the fourth quarter of 2001 and the first
nine months of 2002. Many of the new accounts are still in their introductory
period with low initial yields.
DESCRIPTION OF THE CERTIFICATES
The following summary, together with information contained elsewhere in
this Prospectus Supplement and the Prospectus, describes the material terms of
the certificates contained in the Pooling and Servicing Agreement. The following
summary is qualified in its entirety by reference to the Pooling and Servicing
Agreement.
GENERAL
The Series 2002-C Certificates and the Collateral Interest will represent
undivided interests in the assets of the Fleet Credit Card Master Trust II. See
"--Allocation Percentages" in this prospectus supplement. The rights represented
by the Series 2002-C Certificates and the Collateral Interest include the right
to a percentage of the collections of the receivables in the trust. The
percentage used to allocate collections to Series 2002-C is the "SERIES
PERCENTAGE." When allocating finance charge receivables and defaulted
receivables, the Series Percentage is the Floating Allocation Percentage. When
allocating principal receivables, the Series Percentage is the Principal
Allocation Percentage.
For any monthly period, the portion of the principal receivables and any
amounts in the excess funding account represented by the Series 2002-C
Certificates and the Collateral Interest will be equal to:
- $750,000,000, which will be the "INITIAL INVESTED AMOUNT" of the
certificates and the Collateral Interest on the date of issuance of
Series 2002-C; minus
- the principal amount on deposit in the principal funding account; minus
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- the amount of principal payments paid to the certificateholders and the
Collateral Interest Holder; and minus
- any unreimbursed reductions in the Invested Amount.
See "Description of the Certificates--Defaulted Receivables; Rebates and
Fraudulent Charges" in the accompanying prospectus and "Description of the
Certificates--Allocation of Investor Default Amount" in this prospectus
supplement.
Each Series 2002-C Certificate represents the right to receive monthly
payments of interest at the Class A Certificate Rate or Class B Certificate
Rate, as applicable, from:
- collections of finance charge receivables;
- amounts withdrawn from the reserve account; provided, that amounts
withdrawn from the reserve account will be available only to the Class A
Certificates; and
- reallocated principal collections.
The Series 2002-C Certificates also represent the right to deposits or
payments of principal during the accumulation period or the rapid amortization
period. Deposits to the principal funding account to be used to pay principal on
the Class A Certificates and the Class B Certificates or amounts otherwise used
to pay principal on the Class A Certificates or the Class B Certificates will be
funded from Available Investor Principal Collections. During the accumulation
period, Available Investor Principal Collections will include collections of
principal receivables otherwise allocable to other series, but which are not
needed by the other series.
The transferor holds the interest in the principal receivables and the
amounts in the excess funding account not represented by the Series 2002-C
Certificates, the Collateral Interest or the certificates and uncertificated
interests represented by other series. The interest held by the transferor is
the "TRANSFERORS' INTEREST." The transferors' interest includes an undivided
interest in the assets of the trust including the right to a percentage of
collections of receivables. The transferor percentage of receivables is 100%
minus both the Series Percentage for Series 2002-C and the series percentages
for all other series.
During the Revolving Period, the Invested Amount will remain constant
except in limited circumstances. See "Description of the Certificates--Defaulted
Receivables; Rebates and Fraudulent Charges" in the accompanying prospectus and
"Description of the Certificates--Allocation of Investor Default Amount" in this
prospectus supplement. The amount of principal receivables, however, will vary
each day as new principal receivables are created and others are paid. The
"TRANSFEROR AMOUNT," being the amount of principal receivables and amounts in
the excess funding account not represented by the investor certificates of any
series, will fluctuate daily to reflect the changes in the amount of the
principal receivables. During the accumulation period or the rapid amortization
period, the Invested Amount will decline for each monthly period as cardholder
payments of principal receivables are collected and deposited in the principal
funding account or paid to the certificateholders or the Collateral Interest
Holder.
The interest of the certificateholders in the trust will terminate
following the "SERIES 2002-C TERMINATION DATE," which is the earliest of:
- the day after the distribution date on which the Investor Amount is paid
in full;
- the April 2008 distribution date; and
- the termination of the trust.
All principal and interest on your certificates will be due and payable no later
than the Series 2002-C Termination Date. See "Description of the
Certificates--Final Payment of Principal and Interest; Termination" in the
accompanying prospectus.
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REGISTRATION OF CERTIFICATES
The certificates initially will be represented by certificates registered
in the name of Cede & Co., as the nominee of The Depository Trust Company. No
person acquiring a beneficial interest in the certificates--called a
"CERTIFICATE OWNER"--will be entitled to receive a "DEFINITIVE CERTIFICATE"
representing the person's interest, except in the event that definitive
certificates are issued to certificate owners under the limited circumstances
described in the prospectus. Investor certificateholders may elect to hold their
investor certificates through The Depository Trust Company, in the United States
or Clearstream Banking or Euroclear, in Europe. See "Description of the
Certificates--Definitive Certificates" in the accompanying prospectus.
INTEREST PAYMENTS
Interest will accrue on the certificates at the applicable Class A
Certificate Rate or Class B Certificate Rate from the date of the initial
issuance of the certificates. Interest payments on the certificates will be made
on distribution dates. The "DISTRIBUTION DATES" will be January 15, 2003 and the
15th day of each month, or if the 15th day is not a business day, on the next
succeeding business day.
Interest payments on the certificates on any distribution date will be
calculated on the outstanding principal amount of the Class A Certificates or
the Class B Certificates, as applicable, as of the preceding record date or, in
the case of the first distribution date, as of the date of issuance of Series
2002-C. Class A Monthly Interest and Class B Monthly Interest due but not paid
on any distribution date will be payable on the next succeeding distribution
date together with additional interest on the due and unpaid amount at the Class
A Certificate Rate or Class B Certificate Rate, as applicable, plus 2.0%.
Interest on the Class A Certificates will be calculated on the basis of a
360-day year of twelve months having 30 days in each month; provided, however,
that interest on the Class A Certificates for the January 15, 2003 distribution
date will be $2,386,197.92. Interest on the Class B Certificates will be
calculated on the basis of the actual number of days in the related interest
period and a 360-day year. The Class A Certificates will bear interest at the
rate of 2.75% per annum (the "CLASS A CERTIFICATE RATE"). The Class B
Certificates will bear interest at the rate of 0.40% per annum above LIBOR for a
period of the Designated Maturity determined as set forth below (the "CLASS B
CERTIFICATE RATE").
The "INTEREST PERIOD" for any distribution date will be the period from the
previous distribution date through the day preceding that distribution date
except that the initial interest period will be the period from the date of
issuance of Series 2002-C through the day preceding the initial distribution
date.
The term "BUSINESS DAY" means (a) any day other than a Saturday, Sunday or
day on which banking institutions in New York, New York, Providence, Rhode
Island or any other state where the principal executive offices of the bank,
FCCF or any additional transferor or the trustee are located, are authorized or
obligated by law, executive order or governmental decree to be closed or (b) for
purposes of determining LIBOR, a day on which dealings in United States dollars
are transacted in the London interbank market.
The "MONTHLY PERIOD" for any distribution date will be the immediately
preceding calendar month, except for the initial monthly period, which will
begin on the date of issuance of Series 2002-C and end on December 31, 2002.
The "RECORD DATE" for any distribution date will be the last business day
of the month preceding that distribution date.
For the period from the date of issuance of Series 2002-C through January
14, 2003, the trustee will determine LIBOR on the second London business day
prior to the date of issuance. For each future interest period, the trustee will
determine LIBOR on the second London business day prior to the distribution date
on which the interest period begins (each a "LIBOR DETERMINATION DATE")
commencing with the January 2003 distribution date. The determination of LIBOR
by the trustee and the trustee's
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subsequent calculation of the applicable certificate rate for the relevant
interest periods shall, in the absence of manifest error, be final and binding
on each certificateholder.
"LIBOR" means, as of any LIBOR determination date, the rate for deposits in
United States dollars for a period of the Designated Maturity which appears on
Telerate Page 3750 as of 11:00 a.m., London time on that date. If the rate does
not appear on Telerate Page 3750, the rate for that LIBOR determination date
will be determined on the basis of the rates at which deposits in United States
dollars are offered by the reference banks at approximately 11:00 a.m., London
time, on that date to prime banks in the London interbank market for a period of
the Designated Maturity. The trustee will request the principal London office of
each of the reference banks to provide a quotation of its rate. If at least two
quotations are provided, the rate for that LIBOR determination date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that LIBOR determination date will be the arithmetic
mean of the rates quoted by the reference banks, selected by the servicer at
approximately 11:00 a.m., New York City time, on that day for loans in United
States dollars to leading European banks for a period of the Designated
Maturity.
For purposes of calculating LIBOR, the "DESIGNATED MATURITY" means, as of
any LIBOR determination date, one month; provided, that LIBOR for the initial
interest period will be determined by straight-line interpolation, based on the
actual number of days in the period from the date of issuance of Series 2002-C
through January 14, 2003, between two rates determined in accordance with the
definition of LIBOR, one of which will be determined for a Designated Maturity
of one month and the other which will be determined for a Designated Maturity of
two months.
"TELERATE PAGE 3750" means the display page currently so designated on the
Moneyline Telerate Service or a page that may replace that page on that service
for the purpose of displaying comparable rates or prices.
"REFERENCE BANKS" means three major banks in the London interbank market
selected by the servicer.
The Class B Certificate Rate applicable to the then current and immediately
preceding interest periods may be obtained by telephoning the trustee at (800)
735-7777.
On each distribution date, Class A Monthly Interest and Class A Monthly
Interest previously due but not distributed to the Class A Certificateholders
will be paid to the Class A Certificateholders from Class A Available Funds for
the related monthly period. To the extent Class A Available Funds for the
related monthly period are insufficient to pay the interest, then one or all of
the following will be used to make the interest payments due on the Class A
Certificates:
- Excess Spread;
- if necessary, Excess Finance Charges; and
- if necessary, Reallocated Principal Collections first from amounts
allocated to the Collateral Invested Amount and then from amounts
allocated to the Class B Invested Amount.
"CLASS A AVAILABLE FUNDS" means, for any monthly period, the sum of:
- the Class A Floating Percentage of collections of finance charge
receivables allocated to the Series 2002-C Certificates for the related
monthly period, including other amounts that are to be treated as
collections of finance charge receivables in accordance with the Pooling
and Servicing Agreement;
- the amount of earnings on the principal funding account, if any, for the
related distribution date; and
- the amount of funds, if any, to be withdrawn from the reserve account and
included in Class A Available Funds for the distribution date.
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"CLASS A MONTHLY INTEREST" means, for any distribution date, an amount
equal to one-twelfth of the product of:
- the Class A Certificate Rate; and
- the outstanding principal amount of the Class A Certificates as of the
preceding record date;
provided however, for the first distribution date, the Class A Monthly Interest
will be equal to $2,386,197.92.
On each distribution date, Class B Monthly Interest and Class B Monthly
Interest previously due but not distributed to the Class B Certificateholders
will be paid to Class B Certificateholders from Class B Available Funds for the
related monthly period. To the extent Class B Available Funds for the related
monthly period are insufficient to pay the interest, then one or all of the
following, to the extent not used to make distributions for the Class A
Certificates, will be used to make the interest payments due on the Class B
Certificates:
- Excess Spread;
- if necessary, Excess Finance Charges allocated to Series 2002-C; and
- if necessary, Reallocated Principal Collections allocable to the
collateral invested amount.
"CLASS B AVAILABLE FUNDS" means, for any monthly period, an amount equal to
the Class B Floating Percentage of collections of finance charge receivables
allocated to the Series 2002-C Certificates for the related monthly period,
including other amounts that are to be treated as collections of finance charge
receivables in accordance with the Pooling and Servicing Agreement.
"CLASS B MONTHLY INTEREST" means, for any distribution date, the product
of:
- (a) a fraction, the numerator of which is the actual number of days in
the period from and including the preceding distribution date, or in
the case of the first distribution date, from and including the
closing date, to but excluding that distribution date and the
denominator of which is 360; times
(b) the Class B Certificate Rate; and
- the outstanding principal amount of the Class B Certificates as of the
preceding record date;
provided however, for the first distribution date, Class B Monthly Interest
shall be equal to the interest accrued on the outstanding principal amount of
the Class B Certificates at the applicable Class B Certificate Rate for the
period from the date of issuance of Series 2002-C through January 14, 2003
calculated on the basis of the actual number of days in the period and a year of
360 days.
"COLLATERAL AVAILABLE FUNDS" means, for any monthly period, an amount equal
to the Collateral Floating Percentage of the collections of finance charge
receivables allocated to Series 2002-C including any amounts that are to be
treated as collections of finance charge receivables in accordance with the
Pooling and Servicing Agreement.
"COLLATERAL MINIMUM MONTHLY INTEREST" means, for any distribution date, an
amount equal to the product of:
- (a) a fraction, the numerator of which is the actual number of days in
the period from and including the preceding distribution date, or in
the case of the first distribution date, from and
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including the closing date, to but excluding that distribution date
and the denominator of which is 360; times
(b) the Collateral Minimum Interest Rate; and
- the outstanding principal amount of the Collateral Interest.
"COLLATERAL MINIMUM INTEREST RATE" means the London interbank offered rate
for one-month United States dollar deposits plus 2.0% per annum, or such lesser
amount as may be designated in the agreement between the bank and the Collateral
Interest Holder relating to the transfer of the Collateral Interest to the
Collateral Interest Holder.
"EXCESS FINANCE CHARGES" are collections of finance charge receivables for
a monthly period which are allocated to series in Group One other than Series
2002-C and are, under the documents governing the other series, designated as
Excess Finance Charges.
PRINCIPAL PAYMENTS
During the Series 2002-C revolving period no principal payments will be
made to or for the benefit of the certificateholders or deposited into the
principal funding account to be accumulated and subsequently paid to the
certificateholders. During the revolving period, collections of principal
receivables allocable to Series 2002-C will, except to the extent used as
Reallocated Principal Collections, be treated as Shared Principal Collections.
Any Shared Principal Collections will be made available to other series in Group
One which are in an amortization period. If the collections of principal
receivables allocable to Series 2002-C during the revolving period are not
needed by other series, the collections will be paid to the holders of the
transferors' interest or, if required by the Pooling and Servicing Agreement,
retained in the excess funding account.
See "Description of the Certificates--Shared Principal Collections" in the
accompanying prospectus.
The accumulation period for the Series 2002-C Interests is scheduled to
begin at the close of business on December 31, 2004. The beginning of the
accumulation period may, however, be delayed to a date no later than the close
of business on August 31, 2005. The first principal payment will be made to the
Class A Certificateholders on the earlier of (i) the October 2005 distribution
date, the "CLASS A EXPECTED FINAL DISTRIBUTION DATE" or (ii) the distribution
date in the month following the month in which the rapid amortization period
begins. Principal is also expected to be paid to the Class B Certificateholders
on the October 2005 distribution date, the "CLASS B EXPECTED FINAL DISTRIBUTION
DATE"; however, if the amount on deposit in the principal funding account is not
sufficient to pay the certificates in full, it will be applied first to pay the
Class A Certificates. No principal will be payable to the Class B
Certificateholders unless the Class A Investor Amount is paid in full or funds
in the principal funding account are sufficient to make the full payment to the
Class A Certificateholders.
On each distribution date for the accumulation period, prior to the date on
which the Class A Investor Amount and the Class B Investor Amount are paid in
full, an amount equal to the least of one of the following will be deposited in
the principal funding account:
- Available Investor Principal Collections on deposit in the collection
account for the distribution date;
- the applicable Controlled Deposit Amount for the distribution date; and
- the sum of the Class A Invested Amount and the Class B Invested Amount.
Amounts deposited into the principal funding account during the accumulation
period will be paid first to the Class A Certificateholders and then the Class B
Certificateholders, on the Class A Expected Final Distribution Date and the
Class B Expected Final Distribution Date or, if earlier, the first distribution
date for the rapid amortization period.
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"AVAILABLE INVESTOR PRINCIPAL COLLECTIONS" means, for any monthly period,
an amount equal to the sum of:
- (a) an amount equal to the Principal Allocation Percentage of all
collections of principal receivables received during the related
monthly period; minus
(b) the amount of Reallocated Principal Collections for the related
monthly period used to fund the Class A Required Amount or the Class
B Required Amount; plus
- any Shared Principal Collections from other series in Group One that are
allocated to Series 2002-C; plus
- any other amounts which pursuant to the series supplement are to be
treated as Available Investor Principal Collections for the related
distribution date.
On each distribution date for the rapid amortization period until the Class
A Investor Amount is paid in full or the Series 2002-C Termination Date occurs,
the Class A Certificateholders will be entitled to receive Available Investor
Principal Collections in an amount up to the Class A Investor Amount. After
payment in full of the Class A Investor Amount, the Class B Certificateholders
will be entitled to receive, on each distribution date, Available Investor
Principal Collections until the earlier of the date the Class B Investor Amount
is paid in full and the Series 2002-C Termination Date.
"CLASS A MONTHLY PRINCIPAL" for any distribution date for the accumulation
period or the rapid amortization period will equal the least of:
- the Available Investor Principal Collections on deposit in the collection
account for that distribution date;
- for each distribution date for the accumulation period, on or prior to
the Class A Expected Final Distribution Date, the Controlled Deposit
Amount for that distribution date; and
- the Class A Invested Amount on the related distribution date.
"CLASS B MONTHLY PRINCIPAL" for any distribution date, beginning with the
first distribution date for the accumulation period on which the full amount of
the Class A Investor Amount is on deposit in the principal funding account or
has been paid to the Class A Certificateholders or, if earlier, the first
distribution date in the rapid amortization period, will equal the least of:
- the Available Investor Principal Collections on deposit in the collection
account for that distribution date, minus the portion of the Available
Investor Principal Collections applied to Class A Monthly Principal on
that distribution date;
- for each distribution date with respect to the accumulation period, the
Controlled Deposit Amount for that distribution date, minus the portion
of the Controlled Deposit Amount for that distribution date applied to
Class A Monthly Principal; and
- the Class B Invested Amount on that distribution date.
"COLLATERAL MONTHLY PRINCIPAL" means beginning with the Collateral Expected
Final Distribution Date, or, if earlier, the first distribution date in the
rapid amortization period, an amount equal to the lesser of:
- the Available Investor Principal Collections for that distribution date,
minus the portion of the Available Investor Principal Collections applied
to Class A Monthly Principal and Class B Monthly Principal on that
distribution date; and
- the Collateral Invested Amount for that distribution date.
The "COLLATERAL EXPECTED FINAL DISTRIBUTION DATE" is the October 2005
Distribution Date.
"CONTROLLED ACCUMULATION AMOUNT" means for any distribution date for the
accumulation period, the sum of the Class A Initial Invested Amount and the
Class B Initial Invested Amount divided by nine, subject to adjustment if the
beginning of the accumulation period is postponed.
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"DEFICIT CONTROLLED ACCUMULATION AMOUNT" means:
- on the first distribution date for the accumulation period the excess, if
any, of the Controlled Accumulation Amount for that distribution date
over the amount distributed from the collection account as Class A
Monthly Principal and Class B Monthly Principal for that distribution
date; and
- on each subsequent distribution date for the accumulation period the
excess, if any, of the Controlled Deposit Amount for the subsequent
distribution date over the amount distributed from the collection account
as Class A Monthly Principal and Class B Monthly Principal for the
subsequent distribution date.
"CONTROLLED DEPOSIT AMOUNT" means, for any distribution date relating to
the accumulation period, an amount equal to the sum of:
- the Controlled Accumulation Amount on that distribution date; and
- any Deficit Controlled Accumulation Amount for the immediately preceding
distribution date.
POSTPONEMENT OF ACCUMULATION PERIOD
The servicer may elect to postpone the start of the accumulation period and
extend the length of the revolving period. The servicer may make this election
only if the period needed to fully fund the principal account, determined on the
basis of assumptions provided in the Series 2002-C Supplement is less than nine
months. On each determination date, until the accumulation period begins, the
servicer will determine the number of months expected to be required to fully
fund the principal funding account and be able to pay the Class A Investor
Amount no later than the Class A Expected Final Distribution Date and the Class
B Investor Amount no later than the Class B Expected Final Distribution Date.
The servicer will determine the length of the period required on the basis of:
- the monthly collections of principal receivables expected to be
distributable to the certificateholders of all principal sharing series
in Group One, assuming a principal payment rate no greater than the
lowest monthly principal payment rate on the receivables for the
preceding 12 months; and
- the amount of principal expected to be distributable to
certificateholders of principal sharing series in Group One which are not
expected to be in their revolving periods during the accumulation period.
If the servicer determines that the period needed to fully fund the principal
funding account is less than nine months, the servicer may, at its option,
postpone the start of the accumulation period so that the number of months
included in the accumulation period will be equal to or exceed the period
needed. The effect of the foregoing calculation is to permit the reduction of
the length of the accumulation period based on the investor interest of certain
other principal sharing series in Group One that are scheduled to be in their
revolving periods during the accumulation period and on increases in the
principal payment rate occurring after the date of issuance of Series 2002-C.
The length of the accumulation period will not be less than one month.
SUBORDINATION
The Class B Certificateholders' interest and the Collateral Interest will
be subordinated to the extent necessary to fund certain payments for the Class A
Certificates. In addition, the Collateral Interest will be subordinated to the
extent necessary to fund certain payments for the Class B Certificates. Also
collections of principal receivables otherwise allocable to the Class B
Certificateholders may be reallocated to the Class A Certificateholders and the
Class B Invested Amount may be reduced. Similarly, collections of principal
receivables allocable to the Collateral Interest may be reallocated to the Class
A Certificateholders and the Class B Certificateholders and the Collateral
Invested Amount may be reduced. 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 this reduction in the Class B Invested
Amount is not reimbursed,
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the amount of principal distributable to the Class B Certificateholders will be
reduced. See "--Allocation Percentages," "--Reallocation of Cash Flows," and
"--Application of Collections--Excess Spread; Excess Finance Charges" in this
prospectus supplement.
ALLOCATION PERCENTAGES
The servicer will allocate among the Class A Certificates, the Class B
Certificates, the Collateral Interest, the Certificateholders' interest for all
other outstanding series and the transferors' interest, all collections of
finance charge receivables, principal receivables and the defaulted amount for
each monthly period.
Collections of finance charge receivables and the defaulted amount for any
monthly period will be allocated to Series 2002-C based on the Floating
Allocation Percentage. The "FLOATING ALLOCATION PERCENTAGE" means, for any
monthly period, the percentage equivalent, which shall never exceed 100%, of a
fraction, the numerator of which is the Invested Amount as of the last day of
the preceding monthly period, or for the first monthly period, the Initial
Invested Amount as of the date of issuance of Series 2002-C, and the denominator
of which is the greater of:
(1) the sum of:
- the total amount of principal receivables in the trust as of the last
day of the monthly period, or, for the first monthly period, the total
amount of principal receivables in the trust on the date of issuance
of Series 2002-C; and
- the principal amount on deposit in the excess funding account as of
the last day of the monthly period; and
(2) the sum of the numerators used to calculate the series percentages
for finance charge receivables or defaulted receivables, for all
series of certificates then outstanding;
provided however, that this ratio is subject to adjustment to give effect to
designations of additional accounts.
These amounts will be further allocated among the Class A
Certificateholders, the Class B Certificateholders and the Collateral Interest
Holder in accordance with the Class A Floating Percentage, the Class B Floating
Percentage and the Collateral Floating Percentage, respectively.
The "CLASS A FLOATING PERCENTAGE" means, for any monthly period, the
percentage equivalent, which percentage shall never exceed 100%, of a fraction
the numerator of which is equal to the Class A Invested Amount as of the close
of business on the last day of the preceding monthly period, or with respect to
the first monthly period, the Class A Initial Invested Amount and the
denominator of which is equal to the Invested Amount as of the close of business
on that day or for the first monthly period, the Initial Invested Amount.
The "CLASS B FLOATING PERCENTAGE" means, for any monthly period, the
percentage equivalent, which percentage shall never exceed 100%, of a fraction
the numerator of which is equal to the Class B Invested Amount as of the close
of business on the last day of the preceding monthly period, or with respect to
the first monthly period, the Class B Initial Invested Amount and the
denominator of which is equal to the Invested Amount as of the close of business
on that day or for the first monthly period, the Initial Invested Amount.
The "COLLATERAL FLOATING PERCENTAGE" means, for any monthly period, the
percentage equivalent, which percentage shall never exceed 100%, of a fraction
the numerator of which is equal to the Collateral Invested Amount as of the
close of business on the last day of the preceding monthly period or with
respect to the first monthly period, the Collateral Initial Invested Amount and
the denominator of which is equal to the Invested Amount as of the close of
business on that day, or for the first monthly period, the Initial Invested
Amount.
S-26
Collections of principal receivables will be allocated to Series 2002-C
based on a percentage equivalent to a fraction, for any monthly period, called
the "PRINCIPAL ALLOCATION PERCENTAGE."
(a) The numerator of the fraction is:
- during the revolving period, the Invested Amount as of the last day of
the immediately preceding monthly period, or, if it is the first
monthly period, then the date of issuance of Series 2002-C; and
- during the accumulation period or the rapid amortization period, the
invested amount as of the last day of the revolving period or if the
numerator has been reduced during an accumulation period as described
in the following paragraph and a rapid amortization period begins, the
Invested Amount as of the last day of the accumulation period; and
(b) the denominator of the fraction is the greater of:
- the sum of the total amount of principal receivables in the trust as
of the last day of the immediately preceding monthly period and the
principal amount on deposit in the excess funding account as of the
same day, or, if it is the first monthly period, as of the date of
issuance of Series 2002-C; and
- the sum of the numerators used to calculate the series percentage
applicable to principal receivables for all series outstanding as of
the date for which the determination is being made.
During the accumulation period, on any date, at the option of the servicer,
the numerator of the Principal Allocation Percentage may be reduced below the
numerator used in the previous monthly period, to an amount not less than the
greater of:
- the Invested Amount as of the last day of the immediately preceding
monthly period, less the amount of any distributions of principal
deposited in the principal funding account since the last day of the
immediately preceding monthly period; and
- an amount that if used as the numerator of the Principal Allocation
Percentage for the remainder of the accumulation period, based on
assumptions set forth in the series supplement, would assure that
Available Investor Principal Collections for Series 2002-C would equal at
least 125% of the Controlled Accumulation Amount for each monthly period
for so long as the Invested Amount is greater than zero.
The Principal Allocation Percentage is also subject to adjustment to give
effect to designations of additional accounts.
Amounts allocated to Series 2002-C on the basis of the Principal Allocation
Percentage will be further allocated among the Class A Certificates, the Class B
Certificates and the Collateral Interest based on the Class A Principal
Percentage, the Class B Principal Percentage and the Collateral Principal
Percentage.
The "CLASS A PRINCIPAL PERCENTAGE" means, for any monthly period:
(1) during the revolving period, the percentage equivalent of a
fraction, the numerator of which is the Class A Invested Amount as
of the last day of the immediately preceding monthly period or, if
it is the first monthly period, as of the date of issuance of
Series 2002-C, and the denominator of which is the Invested Amount
as of the last day of the preceding monthly period, or, if it is
the first monthly period, the date of issuance of Series 2002-C;
and
(2) after the revolving period, the percentage equivalent of a
fraction, the numerator of which is the Class A Invested Amount as
of the last day of the revolving period, and the denominator of
which is the Invested Amount as of that last day.
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The "CLASS B PRINCIPAL PERCENTAGE" means, for any monthly period:
(1) during the revolving period, the percentage equivalent of a
fraction, the numerator of which is the Class B Invested Amount as
of the last day of the immediately preceding monthly period or, if
it is the first monthly period, the date of issuance of Series
2002-C and the denominator of which is the Invested Amount as of
the last day of the preceding monthly period, or, in the case of
the first monthly period, the date of issuance of Series 2002-C;
and
(2) after the revolving period, the percentage equivalent of a
fraction, the numerator of which is the Class B Invested Amount as
of the last day of the revolving period, and the denominator of
which is the Invested Amount as of the same day.
"COLLATERAL PRINCIPAL PERCENTAGE" means, for any monthly period:
(1) during the revolving period, the percentage equivalent of a
fraction, the numerator of which is the Collateral Invested Amount
as of the last day of the immediately preceding monthly period and
the denominator of which is the Invested Amount as of the last day
of the preceding monthly period; and
(2) after the revolving period, the percentage equivalent of a
fraction, the numerator of which is the Collateral Invested Amount
as of the last day of the revolving period, and the denominator of
which is the Invested Amount as of the same day.
As used in this prospectus supplement, the following terms have the
meanings indicated:
"CLASS A INVESTED AMOUNT" for any date means:
(1) $637,500,000, the "CLASS A INITIAL INVESTED AMOUNT;" minus
(2) the aggregate amount of principal payments made to the Class A
Certificateholders on or prior to the date; minus
(3) the excess, if any, of the aggregate amount of Class A Investor
Charge-Offs for all prior distribution dates over the aggregate
amount of any reimbursements of Class A Investor Charge-Offs for
all distribution dates prior to the date; and minus
(4) the principal amount on deposit in the principal funding account
on the date, but not in excess of the Class A Initial Invested
Amount.
"CLASS B INVESTED AMOUNT" for any date means:
(1) $45,000,000, the "CLASS B INITIAL INVESTED AMOUNT;" minus
(2) the aggregate amount of principal payments made to Class B
Certificateholders on or prior to the date; minus
(3) the excess, if any, of the aggregate amount of Class B Investor
Charge-Offs for all prior distribution dates over the aggregate
amount of any reimbursements of Class B Investor Charge-Offs for
all distribution dates prior to the date; minus
(4) the aggregate amount of Reallocated Principal Collections for all
prior distribution dates which have been used to fund the Class A
Required Amount for prior distribution dates, excluding any
Reallocated Principal Collections that have resulted in a
reduction of the Collateral Invested Amount; minus
(5) the amount by which the Class B Invested Amount has been reduced
to fund the Class A Investor Default Amount on all prior
distribution dates as described under "--Allocation of Investor
Default Amount," in this prospectus supplement; plus
(6) the aggregate amount of Excess Spread and Excess Finance Charges
allocated to Series 2002-C and applied on all prior distribution
dates for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (3), (4) and (5); and minus
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(7) the positive difference, if any, between the principal funding
account balance and the Class A Investor Amount on the date;
provided however, that the Class B Invested Amount may not be reduced below
zero.
"COLLATERAL INVESTED AMOUNT" for any date means:
(1) $67,500,000, the "COLLATERAL INITIAL INVESTED AMOUNT;" minus
(2) the aggregate amount of principal payments made on the Collateral
Interest prior to the date; minus
(3) the aggregate amount of Reallocated Principal Collections
allocable to the Collateral Invested Amount for all prior
distribution dates which have been used to fund the Class A
Required Amount or the Class B Required Amount; minus
(4) the aggregate amount by which the Collateral Invested Amount has
been reduced to fund the Class A Investor Default Amount and the
Class B Investor Default Amount on all prior distribution dates as
described under "--Allocation of Investor Default Amount," in this
prospectus supplement; minus
(5) an amount equal to the product of the Collateral Floating
Percentage and the Investor Default Amount (the "COLLATERAL
DEFAULT AMOUNT") for any distribution date that is not funded out
of Excess Spread and Excess Finance Charges allocated to Series
2002-C and available for this purpose on that distribution date;
and plus
(6) the aggregate amount of Excess Spread and Excess Finance Charges
allocated and available to reimburse amounts deducted pursuant to
the foregoing clauses (3), (4) and (5);
provided however, that the Collateral Invested Amount may not be reduced below
zero.
The "INVESTED AMOUNT," for any date means the sum of the Class A Invested
Amount, the Class B Invested Amount and the Collateral Invested Amount.
The "INITIAL INVESTED AMOUNT," means $750,000,000 which is the Invested
Amount on the date of issuance of Series 2002-C.
"CLASS A INVESTOR AMOUNT" for any date means the sum of the Class A
Invested Amount plus the principal amount on deposit in the principal funding
account, but not in excess of the Class A Initial Invested Amount.
"CLASS B INVESTOR AMOUNT" for any date means the sum of the Class B
Invested Amount plus the positive difference, if any, between the principal
amount on deposit in the principal funding account, and the Class A Investor
Amount on that date but not in excess of the Class B Initial Invested Amount.
"INVESTOR AMOUNT," for any date means the sum of the Class A Investor
Amount, the Class B Investor Amount and the Collateral Invested Amount.
"SERIES INVESTOR AMOUNT," for any date means the numerator of the Principal
Allocation Percentage on that date.
REALLOCATION OF CASH FLOWS
On each determination date, the servicer will determine the "CLASS A
REQUIRED AMOUNT" which will be the amount, if any, by which the sum of the
following exceeds the Class A Available Funds for the distribution date:
- Class A Monthly Interest for the distribution date;
- any Class A Monthly Interest previously due but not paid to the Class A
Certificateholders on a prior distribution date;
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- any Class A Additional Interest and any Class A Additional Interest
previously due but not paid to the Class A Certificateholders on a prior
distribution date;
- the Class A Servicing Fee for the distribution date and any unpaid Class
A Servicing Fee; and
- the Class A Investor Default Amount, if any, for the distribution date.
If the Class A Required Amount is greater than zero, Excess Spread and Excess
Finance Charges allocated to Series 2002-C and available for this purpose will
be used to fund the Class A Required Amount for the distribution date. If the
Excess Spread and Excess Finance Charges are insufficient to fund the Class A
Required Amount, collections of principal receivables allocable first to the
Collateral Interest and then to the Class B Certificates for the related monthly
period will then be used to fund the remaining Class A Required Amount.
"REALLOCATED PRINCIPAL COLLECTIONS" means an amount of collections of
principal receivables with respect to any monthly period equal to the product
of:
- the Principal Allocation Percentage for the monthly period;
- the aggregate amount of collections of principal receivables for the
monthly period; and
- the sum of the Class B Principal Percentage and the Collateral Principal
Percentage for the monthly period.
If Reallocated Principal Collections for a related monthly period together
with Excess Spread and Excess Finance Charges allocated to Series 2002-C are
insufficient to fund the Class A Required Amount for the related monthly period,
then the Collateral Invested Amount will be reduced by the amount of this
excess, but not by more than the Class A Investor Default Amount for the
distribution date. In the event that this reduction would cause the Collateral
Invested Amount to be a negative number, the Collateral Invested Amount will be
reduced to zero and the Class B Invested Amount will be reduced by the amount by
which the Collateral Invested Amount would have been reduced below zero.
However, the Class B Invested Amount cannot be reduced by more than the excess
of the Class A Investor Default Amount, if any, for the distribution date over
the amount of the reduction, if any, of the Collateral Invested Amount on the
distribution date. In the event that the reduction would cause the Class B
Invested Amount to be a negative number, the Class B Invested Amount will be
reduced to zero, and the Class A Invested Amount will be reduced by the amount
by which the Class B Invested Amount would have been reduced below zero.
However, the Class A Invested Amount cannot be reduced by more than the excess,
if any, of the Class A Investor Default Amount for the distribution date over
the amount of the reductions, if any, of the Collateral Invested Amount and the
Class B Invested Amount with respect to the distribution date as described
above. Any such reduction in the Class A Invested Amount may have the effect of
slowing or reducing the return of principal and interest to the Class A
Certificateholders. In this case, the Class A Certificateholders will directly
bear the credit and other risks associated with their interest in the trust. See
"--Allocation of Investor Default Amount" in this prospectus supplement.
On each determination date, the servicer will determine the "CLASS B
REQUIRED AMOUNT," which will be the sum of the Class B Investor Default Amount
for the distribution date plus the amount, if any, by which the following
amounts exceed the Class B Available Funds for the distribution date:
- Class B Monthly Interest for the distribution date;
- any Class B Monthly Interest previously due but not paid to the Class B
Certificateholders on a prior distribution date;
- any Class B Additional Interest and any Class B Additional Interest
previously due but not paid to the Class B Certificateholders on a prior
distribution date; and
- the Class B Servicing Fee for the distribution date and any unpaid Class
B Servicing Fee.
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If the Class B Required Amount is greater than zero, Excess Spread and
Excess Finance Charges allocated to Series 2002-C not required to pay the Class
A Required Amount or reimburse Class A Investor Charge-Offs will be used to fund
the Class B Required Amount for that distribution date.
If the Excess Spread and Excess Finance Charges available to fund the
remaining Class B Required Amount for that distribution date are insufficient to
pay the Class B Required Amount, then Reallocated Principal Collections
allocable to the Collateral Interest and not required to pay the Class A
Required Amount will be used to fund the remaining Class B Required Amount.
If the Reallocated Principal Collections allocable to the Collateral
Interest are insufficient to fund the remaining Class B Required Amount, then
the Collateral Invested Amount remaining after any adjustments made for the
benefit of the Class A Certificateholders will be reduced by the amount of the
insufficiency, but not by more than the Class B Investor Default Amount for the
distribution date. In the event that this reduction would cause the Collateral
Invested Amount to be a negative number, the Collateral Invested Amount will be
reduced to zero, and the Class B Invested Amount will be reduced by the amount
by which the Collateral Invested Amount would have been reduced below zero.
However the Class B Invested Amount cannot be reduced by more than the excess of
the Class B Investor Default Amount for the distribution date over the amount of
the reduction of the Collateral Invested Amount. Any reduction in the Class B
Invested Amount may have the effect of slowing or reducing the return of
principal and interest to the Class B Certificateholders. In this case, the
Class B Certificateholders will directly bear the credit and other risks
associated with their interests in the trust. See "--Allocation of Investor
Default Amount" in this prospectus supplement.
Reductions of the Class A Invested Amount or Class B Invested Amount will
then be reimbursed and the Class A Invested Amount or Class B Invested Amount
increased to the extent of Excess Spread and Excess Finance Charges available
for these purposes on each distribution date. See "--Application of
Collections--Excess Spread; Excess Finance Charges" in this prospectus
supplement. When these reductions of the Class A Invested Amount and Class B
Invested Amount have been fully reimbursed, reductions of the Collateral
Invested Amount will be reimbursed until reimbursed in full in a similar manner.
APPLICATION OF COLLECTIONS
Application of Collections to the Collection Account. Except under the
conditions described in the accompanying prospectus under "Description of the
Certificates--Application of Collections," the servicer will apply, or will
instruct the trustee to apply, on or prior to the close of business on the
second business day following the date of processing of any collections, all
collections and other funds to be deposited into the collection account that are
allocated to the Series 2002-C Certificates and the Collateral Interest as
follows:
(1) during the revolving period, an amount equal to the Floating
Allocation Percentage of the collections of finance charge
receivables processed on that date will be allocated to the Series
2002-C Holders, and of that allocation, the difference between the
following amount will be deposited and retained in the collection
account:
(a) monthly interest for the related distribution date plus, if the
bank is not the servicer, the Monthly Servicing Fee for the
monthly period; and
(b) the amounts previously deposited in the collection account for
the monthly period pursuant to this clause (1);
(2) during the accumulation period or rapid amortization period, an
amount equal to the Floating Allocation Percentage of the
collections of finance charge receivables processed on this date
will be allocated to the Series 2002-C Holders and deposited and
retained in the collection account;
S-31
(3) during the revolving period, an amount equal to the Principal
Allocation Percentage of collections of principal receivables
processed on that date will be allocated to the Series 2002-C
Holders. If any other principal sharing series in Group One is
outstanding and in an amortization period or accumulation period,
then it will be retained in the collection account for application,
to the extent necessary, to other series in Group One on the related
distribution date. Any remaining funds will be paid to the holders
of the transferors' interest. However, these remaining funds will be
paid to the holders of the transferors' interest only if the
Transferor Amount is greater than the Required Transferor Amount and
the aggregate amount of principal receivables in the trust is
greater than the Required Principal Balance. If this is not the
case, these remaining funds be will be deposited in the excess
funding account until the Transferor Amount is greater than the
Required Transferor Amount and the aggregate amount of principal
receivables is greater than the required principal balance. Any
remaining funds will be paid to the holders of the transferors'
interest;
(4) during the accumulation period, an amount, called a "PERCENTAGE
ALLOCATION" for any date, equal to the Principal Allocation
Percentage of collections of principal receivables processed on that
date will be allocated to the Series 2002-C Holders and deposited
and retained in the collection account. However, if the sum of
Percentage Allocations for the same monthly period exceeds the
Controlled Deposit Amount for the related distribution date plus,
for the Collateral Expected Final Distribution Date, the Collateral
Invested Amount, then this excess shall not be treated as a
Percentage Allocation and shall be:
(a) retained in the collection account for application, as necessary,
as Shared Principal Collections to other series in Group One on
the related distribution date, if any other principal sharing
series in Group One is outstanding and in its amortization period
or accumulation period; and
(b) paid to the holders of the transferors' interest only if the
Transferor Amount, on the date of processing, is greater than the
Required Transferor Amount and the aggregate amount of principal
receivables in the trust is greater than the Required Principal
Balance and otherwise will be deposited in the excess funding
account until the Transferor Amount is greater than the Required
Transferor Amount and the aggregate amount of principal
receivables in the trust is greater than the Required Principal
Balance and the remainder will be paid to the holders of the
transferors' interest; and
(5) during the rapid amortization period, an amount equal to the
Principal Allocation Percentage of the collections of principal
receivables processed on that date will be allocated to the Series
2002-C Holders and deposited and retained in the collection account.
However, after the date on which an amount of the collections equal
to the Invested Amount has been deposited into the collection
account and allocated to the Series 2002-C Holders, the amount in
excess of the Invested Amount will be:
(a) retained in the collection account for application, as necessary,
as Shared Principal Collections to other series in Group One on
the related distribution date, if any other principal sharing
series in Group One is outstanding and in its amortization period
or accumulation period; and
(b) paid to the holders of the transferors' interest only if the
Transferor Amount is greater than the Required Transferor Amount
and the aggregate amount of principal receivables in the trust is
greater than the Required Principal Balance and otherwise will be
deposited in the excess funding account until the Transferor
Amount is greater than the Required Transferor Amount and the
aggregate amount of principal receivables in the trust is greater
than the Required Principal Balance and the remainder will be
paid to the holders of the transferors' interest.
S-32
Withdrawals from Series Accounts. On or before each distribution date, the
servicer will direct the trustee to make the following withdrawals from the
following series accounts:
(1) on each distribution date all principal funding account investment
proceeds then on deposit in the principal funding account will be
withdrawn and deposited into the collection account for distribution
as a portion of Class A Available Funds for that distribution date;
(2) on each distribution date after the reserve account funding date,
all net investment income accrued since the preceding distribution
date on the reserve account will be retained in the reserve account
to the extent that the amount on deposit in the reserve account is
less than the required reserve account amount and the balance, if
any, will be deposited in the collection account for distribution as
collections of finance charge receivables allocable to the
certificateholders and the Collateral Interest Holder; and
(3) on or before each distribution date for the accumulation period and
on the first distribution date for the rapid amortization period, if
applicable, an amount equal to the lesser of:
(a) the available reserve account amount for such distribution date;
and
(b) the excess, if any, of a portion of the Class A Monthly Interest
determined in accordance with the series supplement over the
principal funding account investment proceeds for that
distribution date
will be withdrawn from the reserve account and deposited in the
collection account for distribution as a portion of Class A Available
Funds for that distribution date; provided, that the amount of the
withdrawal from the reserve account under this clause (3) will be
reduced to the extent that funds otherwise would be available to be
deposited in the reserve account on such distribution date.
Payment of Interest, Fees and Other Items. The trustee, acting pursuant to
the servicer's instructions, will apply the Class A Available Funds, Class B
Available Funds and Collateral Available Funds in the following priority:
(1) On each distribution date, an amount equal to the Class A Available
Funds for the distribution date will be withdrawn from the
collection account and distributed in the following priority:
(a) the Class A Monthly Interest for the distribution date, plus the
amount of any Class A Monthly Interest previously due but not
paid to the Class A Certificateholders on a prior distribution
date, plus any additional interest with respect to Class A
Monthly Interest that was due but not paid to the Class A
Certificateholders on a prior distribution date at a rate equal
to the Class A Certificate Rate plus 2% per annum (the "CLASS A
ADDITIONAL INTEREST") and any Class A Additional Interest
previously due but not distributed to the Class A
Certificateholders on a prior distribution date will be
distributed to the Class A Certificateholders;
(b) the Class A Servicing Fee for the distribution date, plus the
amount of any Class A Servicing Fee previously due but not
distributed to the servicer on a prior distribution date, will be
distributed to the servicer;
(c) the Class A Investor Default Amount for the distribution date
will be treated as a portion of Available Investor Principal
Collections for the distribution date; and
(d) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as described under "--Excess Spread;
Excess Finance Charges" below.
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(2) On each distribution date, an amount equal to the Class B Available
Funds for the distribution date will be withdrawn from the
collection account and distributed in the following priority:
(a) the Class B Monthly Interest for the distribution date, plus the
amount of any Class B Monthly Interest previously due but not
paid to the Class B Certificateholders on a prior distribution
date, plus any additional interest with respect to Class B
Monthly Interest that was due but not paid to the Class B
Certificateholders on a prior distribution date at a rate equal
to the Class B Certificate Rate plus 2% per annum (the "CLASS B
ADDITIONAL INTEREST") and any Class B Additional Interest
previously due but not distributed to the Class B
Certificateholders on a prior distribution date will be
distributed to the Class B Certificateholders;
(b) the Class B Servicing Fee for the distribution date, plus the
amount of any Class B Servicing Fee previously due but not
distributed to the servicer on a prior distribution date, will be
distributed to the servicer; and
(c) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as described under "--Excess Spread;
Excess Finance Charges" below.
(3) On each distribution date, an amount equal to the Collateral
Available Funds for the distribution date will be withdrawn from the
collection account and distributed in the following priority:
(a) if the bank or the trustee is no longer the servicer, the
Collateral Servicing Fee for the distribution date, plus the
amount of any Collateral Servicing Fee previously due but not
distributed to the servicer on a prior distribution date, will be
distributed to the servicer; and
(b) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as described under "--Excess Spread;
Excess Finance Charges" below.
"EXCESS SPREAD" means, for any distribution date, the sum of the amounts
described in clause (1)(d) above, clause (2)(c) above and clause (3)(b)
immediately above.
Excess Spread; Excess Finance Charges. On each distribution date, the
trustee, acting pursuant to the servicer's instructions, will apply Excess
Spread and Excess Finance Charges allocated to Series 2002-C for the related
monthly period to make the following distributions in the following priority:
(1) an amount equal to any deficiency pursuant to clauses (1)(a), (b)
and (c) above under "--Payment of Interest, Fees and Other Items"
will be used to fund the deficiency, provided, that in the event the
deficiency exceeds the amount of Excess Spread and Excess Finance
Charges allocated to Series 2002-C, the Excess Spread and Excess
Finance Charges shall be applied:
(a) first, to pay amounts due on the distribution date pursuant to
clause (1)(a) above under "--Payment of Interest, Fees and Other
Items;"
(b) second, to pay the Class A Servicing Fee pursuant to clause
(1)(b) above under "--Payment of Interest, Fees and Other Items;"
and
(c) third, to pay the Class A Investor Default Amount for the
distribution date pursuant to clause (1)(c) above under
"--Payment of Interest, Fees and Other Items;"
(2) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed will be
treated as a portion of Available Investor Principal Collections for
the distribution date as described under "--Payments of Principal"
below;
(3) an amount equal to any deficiency pursuant to clauses (2)(a) and (b)
above under "--Payment of Interest, Fees and Other Items" will be
used to fund this deficiency,
S-34
provided, that in the event the deficiency for this distribution
date exceeds the remaining amount of Excess Spread and Excess
Finance Charges allocated to Series 2002-C, the Excess Spread and
Excess Finance Charges will be applied first to pay amounts due on
the distribution date pursuant to clause (2)(a) above under
"--Payment of Interest, Fees and Other Items," and second to pay
the Class B Servicing Fee pursuant to clause (2)(b) above under
"--Payment of Interest, Fees and Other Items;"
(4) an amount equal to the Class B Investor Default Amount for the
distribution date will be treated as a portion of Available
Investor Principal Collections for the distribution date as
described under "--Payments of Principal" below;
(5) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced pursuant to clauses (3), (4) and
(5) of the definition of "Class B Invested Amount" under
"--Allocation Percentages" above, (but not in excess of the
aggregate amount of the reductions which have not been previously
reimbursed), will be treated as a portion of Available Investor
Principal Collections for the distribution date;
(6) an amount equal to the Collateral Minimum Monthly Interest for the
distribution date, plus the amount of any Collateral Minimum
Monthly Interest previously due but not paid to the Collateral
Interest Holder on a prior Distribution Date, plus any additional
interest with respect to Collateral Minimum Monthly Interest that
was due but not paid to the Collateral Interest Holder on a prior
distribution date at a rate equal to the Collateral Minimum
Interest Rate (the "COLLATERAL ADDITIONAL INTEREST") and any
Collateral Additional Interest previously due but not distributed
to the Collateral Interest Holder on a prior distribution date will
be distributed to the Collateral Interest Holder;
(7) an amount equal to the Collateral Servicing Fee for the
distribution date or if neither the bank nor the trustee is the
servicer, the amount of any Collateral Servicing Fee due but not
paid from Collateral Available Funds and the amount of any
Collateral Servicing Fee due but not paid to the servicer on a
prior distribution date will be paid to the servicer;
(8) an amount equal to the Collateral Default Amount for the
distribution date will be treated as a portion of Available
Investor Principal Collections for the distribution date;
(9) an amount equal to the aggregate amount by which the Collateral
Invested Amount has been reduced pursuant to clauses (3), (4) and
(5) of the definition of "Collateral Invested Amount" under
"--Allocation Percentages" above, but not in excess of the
aggregate amount of those reductions which have not been previously
reimbursed, will be treated as a portion of Available Investor
Principal Collections for the distribution date;
(10) an amount up to the excess, if any, of the Required Reserve Account
Amount over the principal amount on deposit in the reserve account
will be deposited in the reserve account; and
(11) the balance, if any, will be distributed to the Collateral Interest
Holder.
Reallocated Principal Collections. On or before each distribution date
after giving effect to the distributions above under "--Excess Spread; Excess
Finance Charges," the trustee, acting pursuant to the servicer's instructions,
will apply Reallocated Principal Collections for the related monthly period to
make the following distributions in the following priority:
(1) if the amount of Excess Spread and Excess Finance Charges allocated
to Series 2002-C for the related monthly period is less than the
Class A Required Amount, Reallocated Principal Collections, up to
the amount of the deficiency, will be withdrawn from the collection
account and distributed to fund the deficiency in the order of
priority set forth in clause (1) above under "--Excess Spread;
Excess Finance Charges;"
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(2) if the amount of Excess Spread and Excess Finance Charges allocated
to Series 2002-C for the related monthly period and not required to
fund the Class A Required Amount or reimburse Class A Investor
Charge-Offs is less than the Class B Required Amount, Reallocated
Principal Collections allocable to the Collateral Interest not
required to fund the Class A Required Amount, up to the amount of
the deficiency, will be withdrawn from the collection account and
distributed to fund the deficiency in the order of priority set
forth in clauses (3) and (4) above under "--Excess Spread; Excess
Finance Charges."
Payments of Principal. On each distribution date, the trustee, acting
pursuant to the servicer's instructions, will distribute Available Investor
Principal Collections in the following priority:
(1) on each distribution date for the revolving period, all the
Available Investor Principal Collections will be treated as Shared
Principal Collections and applied as described under "Description of
the Certificates--Shared Principal Collections" in the accompanying
prospectus;
(2) on each distribution date for the accumulation period or the rapid
amortization period, all Available Investor Principal Collections
will be distributed or deposited in the following priority:
(a) an amount equal to Class A Monthly Principal will, during the
accumulation period, be deposited in the principal funding
account for payment to the Class A Certificateholders on each
distribution date beginning on the earlier of the Class A
Expected Final distribution date and the first distribution date
for the rapid amortization period, and will, during the rapid
amortization period, be paid to the Class A Certificateholders;
(b) after giving effect to the distribution referred to in clause (a)
above, an amount equal to the Class B Monthly Principal will,
during the accumulation period, be deposited in the principal
funding account for payment to the Class B Certificateholders on
each distribution date beginning on the earlier of the Class B
Expected Final Payment Date, but only if the Class A Investor
Amount is paid in full on that date, and the first distribution
date for the rapid amortization period on which the Class A
Investor Amount is paid in full, and will, during the rapid
amortization period, be paid to the Class B Certificateholders;
(c) after giving effect to the distributions referred to in clauses
(a) and (b) above, an amount equal to Collateral Monthly
Principal will be paid to the Collateral Interest Holder on each
distribution date beginning on the earlier of the Collateral
Expected Final Distribution Date, but only if the Class B
Investor Amount is paid in full on or prior to that date, and the
first distribution date for the rapid amortization period on
which the Class B Investor Amount is paid in full; and
(d) the balance, if any, will be treated as Shared Principal
Collections and applied as described under "Description of the
Certificates--Shared Principal Collections" in the accompanying
prospectus.
PRINCIPAL FUNDING ACCOUNT
Pursuant to the series supplement, the servicer will establish and maintain
the "PRINCIPAL FUNDING ACCOUNT" as a segregated trust account held for the
benefit of the Class A Certificateholders and the Class B Certificateholders.
During the accumulation period, the trustee at the direction of the servicer
will transfer Available Investor Principal Collections to the principal funding
account as described under "--Application of Collections--Payments of Principal"
in this prospectus supplement.
Funds on deposit in the principal funding account will be invested by the
trustee at the direction of the servicer in eligible investments. Investment
earnings, net of investment losses and expenses, on the
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principal funding account, referred to as the "PRINCIPAL FUNDING ACCOUNT
INVESTMENT PROCEEDS" will be included in Class A Available Funds for each
distribution date.
RESERVE ACCOUNT
Pursuant to the series supplement, the servicer will establish and maintain
the "RESERVE ACCOUNT" as a segregated trust account held for the benefit of the
Class A Certificateholders. The reserve account is established to assist with
the distribution of interest on the Class A Certificates during the accumulation
period. For each distribution date from and after the reserve account funding
date, but prior to the termination of the reserve account, the trustee, acting
pursuant to the servicer's instructions, will apply Excess Spread and Excess
Finance Charges allocated to Series 2002-C, as described above under
"--Application of Collections--Excess Spread; Excess Finance Charges," to
increase the amount on deposit in the reserve account, to the extent this amount
is less than the Required Reserve Account Amount.
The "RESERVE ACCOUNT FUNDING DATE" will be the distribution date for the
monthly period which begins no later than three months prior to the monthly
period in which, as of the related determination date, the accumulation period
is scheduled to begin.
The "REQUIRED RESERVE ACCOUNT AMOUNT" for any distribution date on or after
the reserve account funding date will be
(1) the product of:
- 0.5% of the Class A Investor Amount as of the preceding distribution
date after giving effect to all applicable changes in the Class A
Investor Amount on that date; and
- a fraction, the numerator of which is the number of monthly periods
scheduled to be included in the accumulation period as of that date,
and the denominator of which is nine, provided, that if this numerator
is one, the Required Reserve Account Amount will be zero; or
(2) any other amount designated by the transferor, provided, that if the
designation is of a lesser amount, the transferor shall have
provided the servicer and the trustee with evidence that each rating
agency rating the certificates or the Collateral Interest has
notified the transferor that such action will not result in a
reduction or withdrawal of its rating of any outstanding series or
class and the transferor shall have delivered to the trustee a
certificate of an authorized officer to the effect that, based on
the facts known to the officer at that time, in the reasonable
belief of the transferor, the designation will not cause a Pay Out
Event or an event that, after the giving of notice or the lapse of
time, would cause a Pay Out Event to occur.
On each distribution date, after giving effect to any deposit to be made to
and any withdrawal to be made from the reserve account, the trustee will
withdraw from the reserve account the excess, if any, of the amount on deposit
in the reserve account over the Required Reserve Account Amount and will pay
that amount to the Collateral Interest Holder.
Provided that the reserve account has not terminated as described below,
all amounts on deposit in the reserve account with respect to any distribution
date, after giving effect to any deposits to, or withdrawals from, the reserve
account to be made on the distribution date will be invested by the trustee at
the direction of the servicer in eligible investments. The interest and other
investment income, net of investment expenses and losses, earned on the
investments will be retained in the reserve account, to the extent the amount on
deposit is less than the required Reserve Account Amount, or deposited in the
collection account and treated as collections of finance charge receivables
allocable to Series 2002-C.
On the determination date before each distribution date for the
accumulation period and on the first distribution date for the rapid
amortization period, a withdrawal will be made from the reserve account,
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and the amount of this withdrawal will be deposited in the collection account
and included in Class A Available Funds in an amount equal to the lesser of:
- the available reserve account amount for the distribution date; and
- the excess, if any, of a portion of the Class A Monthly Interest
determined in accordance with the Pooling and Servicing Agreement over
the principal funding account investment proceeds for the distribution
date;
provided, that the amount of the withdrawal shall be reduced to the extent that
funds otherwise would be available to be deposited in the reserve account on the
distribution date.
On each distribution date, the "AVAILABLE RESERVE ACCOUNT AMOUNT" will be
the lesser of the amount on deposit in the reserve account, before giving effect
to any deposit to be made to the reserve account on the distribution date, and
the Required Reserve Account Amount for the distribution date.
The reserve account will be terminated following the earliest of:
- the termination of the trust pursuant to the Pooling and Servicing
Agreement;
- the date on which the Class A Investor Amount is paid in full; and
- if the accumulation period has not begun, the occurrence of a Pay Out
Event or, if the accumulation period has begun, the earlier of the first
distribution date with respect to the rapid amortization period and the
Class A Expected Final Distribution Date.
Upon the termination of the reserve account, all amounts on deposit after
giving effect to any withdrawal from the reserve account on that date as
described above will be distributed to the Collateral Interest Holder. Any
amounts withdrawn from the reserve account and distributed to the Collateral
Interest Holder will not be available for distribution to the
certificateholders.
PAIRED SERIES
The Series 2002-C Certificates are subject to being paired on or after the
beginning of the accumulation period or the rapid amortization period with one
or more later issued series. Any later series which is paired with Series 2002-C
is called a "PAIRED SERIES." A paired series may be pre-funded with an initial
deposit to a funding account or may have a variable principal amount. Any
funding account created in connection with a paired series will be held for the
benefit of the paired series and not for the benefit of the holders of the
Series 2002-C Certificates. Upon payment in full of the Series 2002-C
Certificates, assuming that there have been no unreimbursed charge-offs for any
related paired series, the aggregate investor amount of the paired series will
have been increased by an amount up to an aggregate amount equal to the Investor
Amount. The issuance of a paired series will be subject to the conditions
described under "Description of the Certificates--New Issuances" in the
accompanying prospectus.
There can be no assurance that the terms of any paired series might not
have an impact on the calculation of the Series Percentage or the timing or
amount of payments received by a certificateholder. The full extent by which the
timing or amount of payments received by a holder of a Series 2002-C Certificate
may be affected will be dependent on a number of factors and will not be readily
determinable by the change that may occur in the Series Percentage.
SHARED COLLECTIONS OF PRINCIPAL RECEIVABLES
To the extent that collections of principal receivables allocated to the
Series 2002-C are not needed to make payments to or for the benefit of the
certificateholders or the Collateral Interest Holder, the collections may be
applied to cover principal payments due to or for the benefit of other principal
sharing series in Group One. Any application of principal collections to other
series will not result in a reduction of the Invested Amount of the Series
2002-C Certificates or the Collateral Interest.
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Similarly, collections of principal receivables allocated to other
principal sharing series in Group One, to the extent these collections, are not
needed to make payments to or for the benefit of the holders of the certificates
and other interests of the other series, will be applied, if necessary, to cover
payments of principal due to holders of the Series 2002-C Certificates during
the accumulation period. The collections of principal receivables allocated to
other series and not needed by other series are "SHARED PRINCIPAL COLLECTIONS."
There can be no assurance that Shared Principal Collections will be available to
cover payments of principal or deposits due on any distribution date for the
accumulation period. If no Shared Principal Collections were available to the
certificates, the Class A Investor Amount might not be paid in full by the Class
A Expected Final Distribution Date and the Class B Investor Amount might not be
paid in full by the Class B Expected Final Distribution Date. These Shared
Principal Collections may also be allocated to other series either currently
outstanding or to be issued by the trust in the future. To the extent the Shared
Principal Collections are allocated to other series, the pro rata share of the
Shared Principal Collections allocated to Series 2002-C will be reduced.
Series 2002-C will be included in a group of series designated as "GROUP
ONE." On the closing date, Series 2002-C will be the sixteenth series
outstanding and included in Group One.
ALLOCATION OF INVESTOR DEFAULT AMOUNT
On each determination date, the servicer will calculate the Investor
Default Amount for the preceding monthly period. The term "INVESTOR DEFAULT
AMOUNT" means, for any distribution date, the product of:
(1) the defaulted amount for the related monthly period; and
(2) the Floating Allocation Percentage for the related monthly period.
For a description of the defaulted amount, see "Description of the
Certificates--Defaulted Receivables; Rebates and Fraudulent Charges" in the
accompanying prospectus.
A portion of the Investor Default Amount will be allocated to the Class A
Certificateholders on each distribution date. The amount to be allocated to the
Class A Certificateholders is the "CLASS A INVESTOR DEFAULT AMOUNT" and for each
distribution date is an amount equal to the product of the Class A Floating
Percentage applicable during the related monthly period and the Investor Default
Amount for the related monthly period. A portion of the Investor Default Amount
will also be allocated to the Class B Certificateholders. The amount to be
allocated to the Class B Certificateholders is the "CLASS B INVESTOR DEFAULT
AMOUNT" and for each distribution date is an amount equal to the product of the
Class B Floating Percentage applicable during the related monthly period and the
Investor Default Amount for that monthly period. A portion of the Investor
Default Amount will be allocated to the Collateral Interest Holder on each
distribution date. The amount to be allocated to the Collateral Interest is the
"COLLATERAL DEFAULT AMOUNT" and for each distribution date is an amount equal to
the product of the Collateral Floating Percentage applicable during the related
monthly period and the Investor Default Amount for the related monthly period.
An amount equal to the Class A Investor Default Amount for each monthly
period will be paid from Class A Available Funds, Excess Spread and Excess
Finance Charges allocated to Series 2002-C and Reallocated Principal Collections
and applied as described above under "--Application of Collections--Payment of
Interest, Fees and Other Items," "--Application of Collections--Excess Spread;
Excess Finance Charges" and "--Reallocation of Cash Flows."
An amount equal to the Class B Investor Default Amount for each monthly
period will be paid from Excess Spread and Excess Finance Charges allocated to
Series 2002-C and Reallocated Principal Collections allocable to the Collateral
Invested Amount and applied as described above under "--Application of
Collections--Excess Spread; Excess Finance Charges" and "--Reallocation of Cash
Flows."
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An amount equal to the Collateral Default Amount for each monthly period
will be paid from Excess Spread and Excess Finance Charges allocated to Series
2002-C as described above under "--Application of Collections--Excess Spread;
Excess Finance Charges."
On each distribution date, if the Class A Required Amount for the
distribution date exceeds the sum of Excess Spread and Excess Finance Charges
allocable to Series 2002-C and Reallocated Principal Collections, the Collateral
Invested Amount will be reduced by the amount of that excess, but not by more
than the Class A Investor Default Amount for the distribution date. In the event
that this reduction would cause the Collateral Invested Amount to be a negative
number, the Collateral Invested Amount will be reduced to zero, and the Class B
Invested Amount will be reduced by the amount by which the Collateral Invested
Amount would have been reduced below zero, but not by more than the excess, if
any, of the Class A Investor Default Amount for the distribution date over the
amount of the reduction, if any, of the Collateral Invested Amount for the
distribution date. In the event that this reduction would cause the Class B
Invested Amount to be a negative number, the Class B Invested Amount will be
reduced to zero, and the Class A Invested Amount will be reduced by the amount
by which the Class B Invested Amount would have been reduced below zero, but not
by more than the excess, if any, of the Class A Investor Default Amount for the
distribution date over the amount of the reductions, if any, of the Collateral
Invested Amount and the Class B Invested Amount for the distribution date as
described above. A reduction in the Class A Invested Amount occurring as
described in the preceding sentence is a "CLASS A INVESTOR CHARGE-OFF."
If a Class A Investor Charge-Off occurs this may have the effect of slowing
or reducing the return of principal to the Class A Certificateholders. If the
Class A Invested Amount has been reduced by Class A Investor Charge-Offs, it
will subsequently be increased on any distribution date, but not by an amount in
excess of the aggregate Class A Investor Charge-Offs by the amount of Excess
Spread and Excess Finance Charges allocated to Series 2002-C and available to
reimburse Class A Investor Charge-Offs as described above under "--Application
of Collections--Excess Spread; Excess Finance Charges."
On each distribution date, if the Class B Required Amount for the
distribution date exceeds the sum of Excess Spread and Excess Finance Charges
allocable to Series 2002-C and not required to pay the Class A Required Amount
and Reallocated Principal Collections allocable to the Collateral Interest and
not required to pay the Class A Required Amount, then the Collateral Invested
Amount will be reduced by the amount of that excess. If this reduction would
cause the Collateral Invested Amount to be a negative number, the Collateral
Invested Amount will be reduced to zero, and the Class B Invested Amount will be
reduced by the amount by which the Collateral Invested Amount would have been
reduced below zero, but not by more than the excess, if any, of the Class B
Investor Default Amount for the distribution date over the amount of such
reduction, if any, of the Collateral Invested Amount. A reduction in the Class B
Invested Amount occurring as described in the preceding sentence is a "CLASS B
INVESTOR CHARGE-OFF."
If a Class B Investor Charge-Off occurs this may have the effect of slowing
or reducing the return of principal to the Class B Certificateholders. If the
Class B Invested Amount has been reduced by the Class B Investor Charge-Offs, it
will thereafter be increased on any distribution date, but not by an amount in
excess of the aggregate Class B Investor Charge-Offs, by the amount of Excess
Spread and Excess Finance Charges allocated to Series 2002-C and available to
reimburse Class B Investor Charge-Offs as described above under "--Application
of Collections--Excess Spread; Excess Finance Charges" in this prospectus
supplement.
OPTIONAL REPURCHASE
On any date occurring on or after the date that the Investor Amount is
reduced to 5% or less of the Initial Invested Amount, the transferor will have
the option, to be exercised in its sole discretion, to repurchase the
certificates. The purchase price of the certificates and the Collateral Interest
will be equal to the Invested Amount on the distribution date on which the
purchase occurs, if the purchase is on a distribution date and, if not, the
Invested Amount for the distribution date following the repurchase. Plus,
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in each case, accrued and unpaid interest on the certificates plus accrued and
unpaid interest on the Collateral Interest. Following a repurchase, the
certificateholders will have no further rights to the receivables; provided,
however, that the repurchase in no way impacts the certificateholders' rights
under the federal securities law.
Any optional repurchase may result in an early repayment of your investment
without any prepayment penalty and there can be no assurance that you will be
able to invest the early repayment amount at a similar rate of return.
PAY OUT EVENTS
The revolving period for Series 2002-C will continue through the close of
business on December 31, 2004 or a later date resulting from the postponement of
the accumulation period, unless a Pay Out Event occurs prior to that date. A
"PAY OUT EVENT" for Series 2002-C refers to any of the following events, which
are applicable only to Series 2002-C although other series may have similar or
identical Pay Out Events:
(a) failure of the transferor:
- to make any payment or deposit on the date required under the
Pooling and Servicing Agreement on or before the date occurring
five business days after the date the payment or deposit is
required to be made; or
- duly to observe or perform in any material respect any other
covenants or agreements of the transferor in the Pooling and
Servicing Agreement, which failure has a material adverse effect on
the Series 2002-C Holders which determination will be made without
reference to whether any funds are available pursuant to any credit
enhancement and provided that the failure continues unremedied for
60 days after written notice has been given to the transferor by
the trustee, or to the transferor and the trustee by Series 2002-C
Holders aggregating not less than 50% of the outstanding principal
balance of the Series 2002-C Interests;
(b) any representation or warranty made by the transferor in the Pooling
and Servicing Agreement or any information required to be given by
the servicer on behalf of the transferor to identify the accounts
proves to have been incorrect in any material respect when made or
delivered and continues to be incorrect in any material respect for
60 days after written notice has been given to the transferor by the
trustee, or to the transferor and the trustee by holders of the
certificates aggregating not less than 50% of the outstanding
principal balance of the Series 2002-C Certificates and as a result
the interests of the certificateholders are materially and adversely
affected, which determination shall be made without reference to
whether any funds are available pursuant to any credit enhancement;
provided, however, that a Pay Out Event shall not be deemed to have
occurred under this subparagraph (b) if the transferor has accepted
reassignment of the related receivable or all such receivables, if
applicable, during the 60 day period after notice, or a longer
period if specified by the trustee, in accordance with the
provisions of the Pooling and Servicing Agreement;
(c) with respect to the end of any monthly period:
- for which the Transferor Amount is less than the Required
Transferor Amount, the failure of the transferor to convey
receivables in additional accounts to the trust on or prior to the
tenth business day following the related determination date so that
the Transferor Amount is at least equal to the Required Transferor
Amount; or
- for which the aggregate principal receivables in the trust are less
than the Required Principal Balance, the failure of the transferor
to convey receivables in additional accounts to the trust on or
prior to the tenth business day following the related determination
date
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so that the aggregate principal receivables in the trust are at
least equal to the Required Principal Balance;
(d) the Net Portfolio Yield averaged over three consecutive monthly
periods is less than the Base Rate averaged over the same period;
(e) any servicer default occurs which would have a material adverse
effect on the certificateholders, which determination shall be
made without reference to whether any funds are available pursuant
to any credit enhancement; or
(f) the Class A Investor Amount is not paid in full on the Class A
Expected Final Distribution Date or the Class B Investor Amount is
not paid in full on the Class B Expected Final Distribution Date
or the Collateral Invested Amount shall not be paid in full on the
Collateral Expected Final Distribution Date.
A Pay Out Event for all series refers to any of the following events, which
are applicable to Series 2002-C and other series:
(g) an insolvency event relating to any transferor or additional
transferor or an insolvency event relating to the bank or any
additional account owner;
(h) the trust becomes an "investment company" within the meaning of
the Investment Company Act of 1940, as amended; or
(i) the inability of the transferor or additional transferor for any
reason to transfer receivables to the trust in accordance with
the provisions of the Pooling and Servicing Agreement or the
inability of the bank or any additional account owner for any
reason to sell receivables to FCCF in accordance with the
provisions of the Receivables Purchase Agreement.
In the case of any event described in subparagraphs (a), (b) or (e), a Pay
Out Event will be deemed to have occurred only if, after any applicable grace
period described in these clauses, the trustee or Series 2002-C Holders
evidencing undivided interests aggregating more than 50% of the aggregate unpaid
principal amount of the Series 2002-C Interests, by written notice to the
transferor and the servicer, and to the trustee if given by the Series 2002-C
Holders, declare that a Pay Out Event has occurred with respect to Series
2002-C. In the case of any event described in subparagraphs (c), (d), (f), (g),
(h), or (i), a Pay Out Event will be deemed to have occurred immediately upon
the occurrence of the event without any notice or other action on the part of
the trustee, or the Series 2002-C Holders.
Upon the occurrence of a Pay Out Event, the rapid amortization period will
begin. In this event, distributions of principal to the certificateholders will
begin on the first distribution date following the month in which the Pay Out
Event occurred.
The term "NET PORTFOLIO YIELD" for any month, means the annualized
percentage equivalent of a fraction:
(a) the numerator of which is the sum of:
(1) the amount of collections of finance charge receivables during
the month allocable to the Series 2002-C Certificates and to
the Collateral Interest, including any other amounts that are
to be treated as collections of finance charge receivables
under the Pooling and Servicing Agreement, after subtracting
therefrom the Investor Default Amount for the related month;
plus
(2) the amount of any net earnings on the principal funding account
for the related distribution date; plus
(3) the amount of funds, if any, to be withdrawn from the reserve
account and included in Class A Available Funds for the related
distribution date; and
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(b) and the denominator of which is the Investor Amount as of the last
day of the prior calendar month.
For any month, the "BASE RATE" will be equal to the annualized percentage
equivalent of a fraction:
(a) the numerator of which is equal to the sum of the following, each
for the related distribution date:
(1) the Class A Monthly Interest;
(2) the Class B Monthly Interest;
(3) the Collateral Minimum Monthly Interest; and
(4) the Monthly Servicing Fee, and
(b) the denominator of which is the Investor Amount as of the last day
of the preceding month.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The share of the fee payable to the servicer allocable to the Series 2002-C
Interests for any distribution date (the "MONTHLY SERVICING FEE") will be equal
to one-twelfth of the product of (a) 2% and (b) the Invested Amount as of the
last day of the monthly period preceding the distribution date; provided,
however, with respect to the first distribution date, the Monthly Servicing Fee
will be $777,735.
The share of the Monthly Servicing Fee allocable to the Class A
Certificateholders for any distribution date, called the "CLASS A SERVICING
FEE," will be one-twelfth of the product of:
(1) the Class A Floating Percentage;
(2) 2%; and
(3) the Invested Amount as of the last day of the monthly period
preceding the distribution date;
provided, however, that for the first distribution date, the Class A Servicing
Fee will be $664,063.
The share of the Monthly Servicing Fee allocable to the Class B
Certificateholders for any distribution date, called the "CLASS B SERVICING
FEE," will be equal to one-twelfth of the product of:
(1) the Class B Floating Percentage;
(2) 2%; and
(3) the Invested Amount as of the last day of the monthly period
preceding the distribution date;
provided, however, that for the first distribution date, the Class B Servicing
Fee will be $46,875.
The share of the Monthly Servicing Fee allocable to the Collateral Interest
Holder for any distribution date, called the "Collateral Servicing Fee," will be
equal to one-twelfth of the product of:
(1) the Collateral Floating Percentage;
(2) 2%; and
(3) the Invested Amount as of the last day of the monthly period
preceding the distribution date;
provided, however, that for the first distribution date, the Collateral
Servicing Fee will be $66,797.
The Class A Servicing Fee, the Class B Servicing Fee and the Collateral
Servicing Fee shall be payable to the servicer solely to the extent amounts are
available for distribution as described under "--Application
Collections--Payment of Interest, Fees and Other Items" and "Excess Spread;
Excess Finance Charges" in this prospectus supplement.
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FEDERAL INCOME TAX CONSEQUENCES
Based on the application of existing law to the facts as set forth in the
Pooling and Servicing Agreement and other relevant documents, special tax
counsel to the bank and the transferor, Orrick, Herrington & Sutcliffe LLP, is
of the opinion that the certificates will properly be treated as indebtedness
for federal income tax purposes. See "Federal Income Tax Consequences" in the
accompanying prospectus.
ERISA CONSIDERATIONS
GENERAL
Subject to the considerations described below and in the accompanying
prospectus, the Class A Certificates may be purchased by, on behalf of, or with
"plan assets" of any employee benefit or other plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of
the Internal Revenue Code of 1986, as amended. Any plan fiduciary that proposes
to cause a plan to acquire any of the certificates should consult with its
counsel with respect to the potential consequences under ERISA and the Internal
Revenue Code of the plan's acquisition and ownership of the certificates. See
"ERISA Considerations" in the accompanying prospectus.
Section 406 of ERISA and Section 4975 of the Internal Revenue Code prohibit
plans from engaging in certain transactions involving "plan assets" with persons
that are parties in interest with respect to the plan. A violation of these
"prohibited transaction" rules may generate excise tax and other liabilities
under ERISA and Section 4975 of the Internal Revenue Code for these persons,
unless a statutory, regulatory or administrative exemption is available. Plans
that are governmental plans, as defined in Section 3(32) of ERISA, and some
church plans, as defined in Section 3(33) of ERISA, are not subject to ERISA
requirements.
CLASS A CERTIFICATES
The United States Department of Labor has issued an individual exemption,
Prohibited Transaction Exemption 99-39 (Exemption Application No. D-10643), 64
Fed. Reg. 53,736 (October 4, 1999), to the bank relating to (1) the initial
purchase, the holding and the subsequent resale by plans of senior certificates
representing an undivided interest in a credit card trust with respect to which
the bank or an affiliate is the sponsor; and (2) the servicing, operation and
management of the trust, provided that the general conditions and certain other
conditions set forth in this exemption are satisfied. This exemption will apply
to the acquisition, holding and resale of the Class A Certificates by, on behalf
of, or with "plan assets" of a plan, provided that the conditions specified in
the exemption, some of which are described below, are met.
Among the conditions which must be satisfied for this exemption to apply
are the following:
(1) The acquisition of the Class A Certificates by a plan is on
terms, including the price for the Class A Certificates, that are
at least as favorable to the investing plan as they would be in
an arm's-length transaction with an unrelated party;
(2) The rights and interests evidenced by the Class A Certificates
acquired by the plan are not subordinated to the rights and
interests evidenced by other certificates of the trust;
(3) The Class A Certificates acquired by the plan have received a
rating at the time of the acquisition in one of the two highest
generic rating categories from a rating agency, provided that,
notwithstanding such rating, credit support is provided to the
Class A Certificates through a senior-subordinated structure or
other form of third-party credit support which, at a minimum,
represents 5% of the outstanding principal balance of the Class A
Certificates at the time of the acquisition;
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(4) The trustee is not an affiliate of a restricted group including
the underwriters, the bank, the transferor, the servicer, any
obligor whose receivables constitute more than 0.5% of the fair
market value of the aggregate undivided interest in the trust
allocated to Series 2002-C, or any of their respective
affiliates;
(5) The sum of all payments made to and retained by the underwriters
in connection with the distribution of the Class A Certificates
represents not more than reasonable compensation for underwriting
the Class A Certificates; the consideration received by the
transferor as a consequence of the assignment of receivables to
the trust, to the extent allocable to the Class A Certificates,
represents not more than the fair market value of the
receivables; and the sum of all payments made to and retained by
the servicer, to the extent allocable to the Class A
Certificates, represents not more than reasonable compensation
for the servicer's services under the agreement and reimbursement
of the servicer's reasonable expenses in connection therewith;
(6) The plan investing in the Class A Certificates is an "accredited
investor" as defined in Rule 501(a)(1) of Regulation D of the
Securities and Exchange Commission under the Securities Act of
1933, as amended;
(7) The trustee is a substantial financial institution or trust
company experienced in trust activities, is familiar with its
duties, responsibilities and liabilities as a fiduciary under
ERISA and, as the legal owner of, or holder of a perfected
security interest in, the receivables, enforces all the rights
created in favor of the certificateholders, including plans;
(8) Prior to the issuance of any new series, confirmation is received
from the rating agencies that the issuance will not result in the
reduction or withdrawal of the then current rating of the Class A
Certificates held by any plan pursuant to the Fleet exemption;
(9) To protect against fraud, chargebacks or other dilution of the
receivables, the Pooling and Servicing Agreement and the rating
agencies require the transferor to maintain a transferors'
interest of not less than 2% of the principal balance of the
receivables contained in the trust;
(10) Each receivable is an eligible receivable, based on criteria of
the rating agencies and as specified in the Pooling and Servicing
Agreement, and the Pooling and Servicing Agreement requires that
any change in the terms of the cardholder agreements must be made
applicable to the comparable segment of accounts owned or
serviced by the transferor which are part of the same program or
have the same or substantially similar characteristics;
(11) The Pooling and Servicing Agreement limits the number of newly
originated accounts to be designated to the trust, unless the
rating agencies otherwise consent in writing, to the following:
(a) with respect to any three-month period commencing in January,
April, July and October of each calendar year, 15% of the
number of existing accounts designated to the trust as of the
first day of the calendar year during which the monthly period
commenced; and
(b) with respect to any calendar year, 20% of the number of
existing accounts designated to the trust as of the first day
of the calendar year;
(12) The Pooling and Servicing Agreement requires the transferor to
deliver an opinion of counsel confirming the validity and
perfection of the transfer of receivables in newly originated
accounts to the trust for each interim addition; and
S-45
(13) The Pooling and Servicing Agreement requires the transferor and
the trustee to receive confirmation from each rating agency that
the rating agency will not reduce or withdraw its then current
rating of the Class A Certificates as a result of:
(a) an addition of accounts that is required to be made because
either the Transferor Amount is less than the Required
Transferor Amount or the principal receivables are less than
the Required Principal Balance, and the addition exceeds the
limits set forth in paragraph (11) above; or
(b) a restricted addition of accounts made at the discretion of the
transferor as described in the accompanying prospectus under
the caption "Description of the Certificates--Addition of
Accounts--Conditions to Required and Restricted Additions."
The trust also must meet the following requirements:
(1) The corpus of the trust must consist only of receivables of the
type which have been included in other investment pools;
(2) Certificates evidencing interests in other investment pools have
been rated in one of the two highest generic rating categories by
at least one of the rating agencies for at least one year prior to
the plan's acquisition of the Class A Certificates; and
(3) Certificates evidencing an interest in such other investment pools
have been purchased by investors other than plans for at least one
year prior to any plan's acquisition of the Class A Certificates.
Moreover, the Prohibition Transaction Exemption provides relief from
certain self-dealing/conflict of interest prohibited transactions that may occur
when a plan fiduciary causes a plan to acquire the Class A Certificates if the
fiduciary or its affiliate is an obligor on the receivables held in the trust,
provided that, among other requirements:
(1) in the case of an acquisition in connection with the initial
issuance of the Class A Certificates, at least 50% of each class
of certificates in which plans have invested is acquired by
persons independent of the restricted group and at least 50% of
the aggregate interest in the trust is acquired by persons
independent of the restricted group;
(2) the fiduciary, or its affiliate, is an obligor with respect to
0.5% or less of the fair market value of the obligations contained
in the trust;
(3) the plan's investment in the Class A Certificates does not exceed
25% of all of the Class A Certificates outstanding after the
acquisition; and
(4) no more than 25% of the asset of the plan are invested in
securities representing an interest in one or more trusts
containing assets sold or serviced by the same entity.
The transferor believes that the Fleet exemption will apply to the
acquisition and holding of the Class A Certificates by plans and that all
conditions of the Fleet exemption, other than those within the control of the
investors, will be met.
CLASS B CERTIFICATES
The U.S. Department of Labor has designated the Fleet exemption an
"underwriter exemption." As a result, an insurance company investing solely
assets of its general account may be able to acquire and hold the Class B
Certificates, provided that:
(1) Class A Certificates are eligible for relief under the Fleet
exemption; and
(2) the acquisition and holding satisfies the conditions applicable
under Sections I and III of U.S. Department of Labor Prohibited
Transaction Class Exemption 95-60.
S-46
Accordingly, the Class B Certificates may not be acquired or held by, on behalf
of, or with "plan assets" of any plan, other than an insurance company investing
assets of its general account. By its acceptance of a Class B certificate, each
Class B certificateholder will be deemed to have represented and warranted that
either:
(1) it is not and will not be a plan; or
(2) it is an insurance company, it acquired and will hold the Class B
Certificates solely with assets of its general account, and such
acquisition and holding satisfies the conditions applicable under
Sections I and III of PTCE 95-60. See "--Class A Certificates" above
and "ERISA Considerations" in the accompanying prospectus.
CONSULTATION WITH COUNSEL
In light of the foregoing, fiduciaries or other persons contemplating
purchasing the certificates on behalf of or with "plan assets" of any plan
should consult their own counsel regarding whether the trust assets represented
by the certificates would be considered "plan assets," the consequences that
would apply if the trust's assets were considered "plan assets," and the
availability of exemptive relief from the prohibited transaction rules, in the
case of the Class A Certificates, under the Fleet exemption or, in the case of
the Class B Certificates and only with respect to an insurance company general
account investor, the Fleet exemption and Sections I and III of PTCE 95-60. It
is not anticipated that the Class A or Class B Certificates will meet all
criteria for treatment as "publicly-offered securities" as described in "ERISA
Considerations" in the accompanying prospectus. However, it is expected that the
Fleet exemption will provide exemptive relief for the Class A Certificates which
is as broad as if the "publicly-offered securities" exemption were applicable.
Finally, plan fiduciaries and other plan investors should consider the
fiduciary standards under ERISA or other applicable law in the context of the
plan's particular circumstances before authorizing an investment of a portion of
the plan's assets in the certificates. Accordingly, among other factors, plan
fiduciaries and other plan investors should consider whether the investment:
(1) satisfies the diversification requirement of ERISA or other
applicable law;
(2) is in accordance with the plan's governing instruments; and
(3) is prudent in light of the "Risk Factors" and other factors
discussed in the accompanying prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
relating to the Class A Certificates and the Class B Certificates, the
transferor has agreed to sell to the underwriters named below and each of the
"CLASS A UNDERWRITERS" has agreed to purchase from the transferor, the principal
amount of Class A Certificates set forth opposite its name below:
<Table>
<Caption>
PRINCIPAL
AMOUNT OF
CLASS A
CLASS A UNDERWRITERS CERTIFICATES
- -------------------- ------------
Lehman Brothers Inc. ....................................... $106,250,000
Credit Suisse First Boston Corporation...................... $106,250,000
Fleet Securities, Inc. ..................................... $106,250,000
J.P. Morgan Securities Inc. ................................ $106,250,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... $106,250,000
Salomon Smith Barney Inc. .................................. $106,250,000
------------
Total....................................................... $637,500,000
============
</Table>
S-47
The transferor has been advised by the Class A Underwriters that the Class
A Underwriters propose initially to offer the Class A Certificates to the public
at the price set forth on the cover page of this prospectus supplement and to
certain dealers at such price less a concession not in excess of 0.1350% of the
principal amount of the Class A Certificates. The Class A Underwriters may allow
and the dealers may reallow a concession not in excess of 0.0675% of the
principal amount of the Class A Certificates to certain other dealers. After the
initial public offering, the public offering price and the concessions may be
changed.
Subject to the terms and conditions set forth in the underwriting
agreement, the transferor has agreed to sell to the "CLASS B UNDERWRITERS" named
below and each of the Class B Underwriters has agreed to purchase from the
transferor, the principal amount of Class B Certificates set forth opposite its
name below:
<Table>
<Caption>
PRINCIPAL
AMOUNT OF
CLASS B
CLASS B UNDERWRITERS CERTIFICATES
- -------------------- ------------
Lehman Brothers Inc......................................... $22,500,000
Credit Suisse First Boston Corporation...................... $22,500,000
-----------
Total....................................................... $45,000,000
===========
</Table>
The transferor has been advised by the Class B Underwriters that the Class
B Underwriters propose initially to offer the Class B Certificates to the public
at the price set forth on the cover page of this prospectus supplement and to
certain dealers at this price less a concession not in excess of 0.1650% of the
principal amount of the Class B Certificates. The Class B Underwriters may allow
and the dealers may reallow a concession not in excess of 0.0825% of the
principal amount of the Class B Certificates to certain other dealers. After the
initial public offering, the public offering price and such concessions may be
changed.
The underwriters will be compensated as set forth in the following table:
<Table>
<Caption>
UNDERWRITERS' AMOUNT
DISCOUNTS AND PER $1,000
COMMISSIONS OF PRINCIPAL TOTAL AMOUNT
------------- ------------ ------------
$637,500,000 of the Class A Certificates...... 0.225% $2.25 $1,434,375
$45,000,000 of the Class B Certificates....... 0.275% $2.75 123,750
----------
$1,558,125
==========
</Table>
Additional offering expenses are estimated to be $700,000.
The transferor and the bank have agreed that they will indemnify the
underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments the underwriters
may be required to make in respect thereof.
Each underwriter has represented and agreed that:
(a) it has complied and will comply with all applicable provisions of
the Financial Services and Markets Act 2000 ("FSMA") and the Public Offers
of Securities Regulations 1995 (the "REGULATIONS") with respect to anything
done by it in relation to the certificates in, from or otherwise involving
the United Kingdom;
(b) it has only communicated or caused to be communicated and it will
only communicate or cause to be communicated any invitation or inducement
to engage in investment activity (within the meaning of section 21 of FSMA)
received by it in connection with the issue or sale of any certificates in
circumstances in which section 21(1) of the FSMA does not apply to the
transferor or the bank; and
S-48
(c) it has not offered or sold and, prior to the date which is six
months after the date of issue of the certificates will not offer or sell
any certificate to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing, or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which do not constitute an offer
to the public in the United Kingdom for purposes of the Regulations.
The underwriters may engage in over-allotment transactions, stabilizing
transactions, syndicate covering transactions and penalty bids with respect to
the certificates in accordance with Regulation M under the Securities Exchange
Act of 1934. Over-allotment transactions involve syndicate sales in excess of
the offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase the certificates so long as the stabilizing
bids do not exceed a specified maximum. Syndicate covering transactions involve
purchases of the certificates in the open market after the distribution has been
completed in order to cover syndicate short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when the
certificates originally sold by such syndicate member are purchased in a
syndicate covering transaction. These over-allotment transactions, stabilizing
transactions, syndicate covering transactions and penalty bids may cause the
price of the certificates to be higher than they would otherwise be in the
absence of the transactions. Neither the transferor nor the underwriters
represents that the underwriters will engage in any such transactions or that
these transactions, once commenced, will not be discontinued without notice at
any time.
This prospectus supplement and the accompanying prospectus, may be used by
Fleet Securities, Inc. or another affiliate of the transferor, in connection
with offers and sales of an indeterminate amount of the certificates in
market-making transactions. In these transactions, Fleet Securities, Inc. or
another affiliate may act as a principal or an agent and the sales will be at
negotiated prices related to prevailing market prices at the time of the sale.
LEGAL MATTERS
Certain legal matters relating to the issuance of the certificates will be
passed upon for the transferor and the bank by Linda Morris, Esq., Vice
President, Secretary and General Counsel, Fleet Credit Card Funding Trust and
Executive Vice President, Secretary and General Counsel, Fleet Bank (RI),
National Association, and by Orrick, Herrington & Sutcliffe LLP, Washington,
D.C., special counsel to the transferor and the bank. Certain legal matters,
including matters related to Delaware law, will be passed upon for the
transferor by Richards, Layton & Finger, P.A. In addition, certain legal
matters, including matters related to Rhode Island law, will be passed upon for
the transferor by Edwards & Angell, Boston, Massachusetts. Certain legal matters
relating to the federal tax consequences of such issuance will be passed upon
for the transferor and the bank by Orrick, Herrington & Sutcliffe LLP,
Washington, D.C. Certain matters relating to the issuance of the certificates
will be passed upon for the underwriters by Mayer, Brown, Rowe & Maw, Chicago,
Illinois.
S-49
INDEX OF PRINCIPAL TERMS
<Table>
A
accumulation period............... S-15
Available Investor Principal
Collections..................... S-24
Available Reserve Account
Amount.......................... S-38
B
bank.............................. S-9
Base Rate......................... S-43
business day...................... S-20
C
Certificate Owner................. S-20
Class A Additional Interest....... S-33
Class A Available Funds........... S-21
Class A Certificate Rate.......... S-20
Class A Certificateholders........ S-9
Class A Certificates.............. S-9
Class A Expected Final
Distribution Date............... S-15, S-23
Class A Floating Percentage....... S-26
Class A Initial Invested Amount... S-28
Class A Invested Amount........... S-28
Class A Investor Amount........... S-29
Class A Investor Charge-Off....... S-40
Class A Investor Default Amount... S-39
Class A Monthly Interest.......... S-22
Class A Monthly Principal......... S-24
Class A Principal Percentage...... S-27
Class A Required Amount........... S-29
Class A Servicing Fee............. S-43
Class A Underwriters.............. S-47
Class B Additional Interest....... S-34
Class B Available Funds........... S-22
Class B Certificate Rate.......... S-20
Class B Certificateholders........ S-9
Class B Certificates.............. S-9
Class B Expected Final
Distribution Date............... S-15, S-23
Class B Floating Percentage....... S-26
Class B Initial Invested Amount... S-28
Class B Invested Amount........... S-28
Class B Investor Amount........... S-29
Class B Investor Charge-Off....... S-40
Class B Investor Default Amount... S-39
Class B Monthly Interest.......... S-22
Class B Monthly Principal......... S-24
Class B Principal Percentage...... S-28
Class B Required Amount........... S-30
Class B Servicing Fee............. S-43
Class B Underwriters.............. S-48
Collateral Additional Interest.... S-35
Collateral Available Funds........ S-22
Collateral Default Amount......... S-29, S-39
Collateral Expected Final
Distribution Date............... S-24
Collateral Floating Percentage.... S-26
Collateral Initial Invested
Amount.......................... S-29
Collateral Interest............... S-9
Collateral Interest Holder........ S-9
Collateral Invested Amount........ S-29
Collateral Minimum Interest
Rate............................ S-23
Collateral Minimum Monthly
Interest........................ S-22
Collateral Monthly Principal...... S-24
Collateral Principal Percentage... S-28
Controlled Accumulation Amount.... S-24
Controlled Deposit Amount......... S-25
D
Deficit Controlled Accumulation
Amount.......................... S-25
definitive certificate............ S-20
Designated Maturity............... S-21
distribution dates................ S-20
E
Excess Finance Charges............ S-23
Excess Spread..................... S-34
F
FCCF.............................. S-9
Fleet............................. S-9
Fleet Credit Card Portfolio....... S-10
Floating Allocation Percentage.... S-26
FSMA.............................. S-48
G
Group One......................... S-39
I
Initial Invested Amount........... S-18, S-29
interest period................... S-20
Invested Amount................... S-29
Investor Amount................... S-29
Investor Default Amount........... S-39
L
LIBOR............................. S-21
LIBOR determination date.......... S-20
</Table>
S-50
<Table>
M
Master Pooling and Servicing
Agreement....................... S-9
monthly period.................... S-20
Monthly Servicing Fee............. S-43
N
Net Portfolio Yield............... S-42
P
paired series..................... S-38
Pay Out Event..................... S-41
Percentage Allocation............. S-32
Pooling and Servicing Agreement... S-10
Principal Allocation Percentage... S-27
principal funding account......... S-36
principal funding account
investment proceeds............. S-37
R
rapid amortization period......... S-16
Reallocated Principal
Collections..................... S-30
Receivables Purchase Agreement.... S-9
record date....................... S-20
Reference Banks................... S-21
Regulations....................... S-48
Required Reserve Account Amount... S-37
reserve account................... S-37
reserve account funding date...... S-37
S
Series 2002-C..................... S-10
Series 2002-C Certificates........ S-9
Series 2002-C Holders............. S-9
Series 2002-C Interests........... S-9
Series 2002-C Termination Date.... S-19
Series Investor Amount............ S-29
Series Percentage................. S-18
servicer.......................... S-9
Shared Principal Collections...... S-39
substitution date................. S-9
T
Telerate Page 3750................ S-21
transferor........................ S-9
Transferor Amount................. S-19
transferors' interest............. S-19
trust............................. S-9
</Table>
S-51
ANNEX I
OTHER SERIES ISSUED
The certificates will be the thirty-second series to be issued by the
trust. The table below sets forth the principal characteristics of the fifteen
other series heretofore issued by the trust and outstanding as of October 31,
2002. The series outstanding as of October 31, 2002 were the Series 1996-A
Certificates, the Series 1996-B Certificates, the Series 1996-D Certificates,
the Series 1999-B Certificates, the Series 1999-C Certificates, the Series
1999-D Certificates, the Series 2000-A Certificates, the Series 2000-B
Certificates, the Series 2000-C Certificates, the Series 2000-D Certificates,
the Series 2001-A Certificates, the Series 2001-B Certificates, the Series
2001-C Certificates, the Series 2002-A Certificates and Series 2002-B
Certificates. Solely for purposes of this Annex I, "LIBOR" shall mean London
interbank offered quotations for United States dollar deposits determined as set
forth in the related series supplements.
<Table>
SERIES 1996-A
Initial Invested Amount.............................. $400,000,000
Initial Pre-Funded Amount............................ $100,000,000
Investor Amount as of October 31, 2002............... $500,000,000
Class A-1 Certificate Rate........................... 6.0% per annum
Class A-2 Certificate Rate........................... One Month LIBOR plus 0.23% per annum
Class B Certificate Rate............................. One Month LIBOR plus 0.35% per annum
Collateral Rate...................................... No higher than One Month LIBOR
plus 1.00% per annum
Initial Enhancement Amount........................... $43,750,000
Series Servicing Fee Rate............................ 2% per annum
Series 1996-A Termination Date....................... November 2005 Distribution Date
Series Issuance Date................................. January 18, 1996
SERIES 1996-B
Initial Invested Amount.............................. $750,000,000
Investor Amount as of October 31, 2002............... $750,000,000
Class A Certificate Rate............................. Three Month LIBOR plus 0.230% per annum
Class B Certificate Rate............................. Three Month LIBOR plus 0.375% per annum
Collateral Rate...................................... No higher than One Month LIBOR
plus 1.00% per annum
Initial Enhancement Amount........................... $75,000,000
Series Servicing Fee Rate............................ 2% per annum
Series 1996-B Termination Date....................... January 2007 Distribution Date
Series Issuance Date................................. March 26, 1996
SERIES 1996-D
Initial Invested Amount.............................. $575,000,000
Initial Pre-Funded Amount............................ $125,000,000
Investor Amount as of October 31, 2002............... $700,000,000
Class A Certificate Rate............................. One Month LIBOR plus 0.15% per annum
Class B Certificate Rate............................. One Month LIBOR plus 0.30% per annum
Collateral Rate...................................... No higher than One Month LIBOR
plus 1.00% per annum
Initial Enhancement Amount........................... $70,000,000
Series Servicing Fee Rate............................ 2% per annum
Series 1996-D Termination Date....................... June 2005 Distribution Date
Series Issuance Date................................. June 18, 1996
</Table>
I-1
<Table>
SERIES 1999-B
Initial Invested Amount.............................. $500,000,000
Investor Amount as of October 31, 2002............... $500,000,000
Class A Certificate Rate............................. One Month LIBOR plus 0.20% per annum
Class B Certificate Rate............................. One Month LIBOR plus 0.39% per annum
Collateral Rate...................................... No higher than One Month LIBOR
plus 2.00% per annum
Initial Enhancement Amount........................... $55,000,000
Series Servicing Fee Rate............................ 2% per annum
Series 1999-B Termination Date....................... January 2007 Distribution Date
Series Issuance Date................................. July 22, 1999
SERIES 1999-C
Initial Invested Amount.............................. $300,000,000
Investor Amount as of October 31, 2002............... $300,000,000
Class A Certificate Rate............................. 6.90% per annum
Class B Certificate Rate............................. 7.20% per annum
Collateral Minimum Interest Rate..................... No higher than One Month LIBOR
plus 2.00% per annum
Initial Enhancement Amount........................... $27,000,000
Series Servicing Fee Rate............................ 2% per annum
Series 1999-C Termination Date....................... April 2007 Distribution Date
Series Issuance Date................................. November 3, 1999
SERIES 1999-D
Initial Invested Amount.............................. $600,000,000
Investor Amount as of October 31, 2002............... $600,000,000
Class A Certificate Rate............................. One Month LIBOR plus 0.22% per annum
Class B Certificate Rate............................. One Month LIBOR plus 0.50% per annum
Collateral Minimum Interest Rate..................... Not to exceed 9.5% per annum
Initial Enhancement Amount........................... $66,000,000
Series Servicing Fee Rate............................ 2% per annum
Series 1999-D Termination Date....................... April 2007 Distribution Date
Series Issuance Date................................. November 3, 1999
SERIES 2000-A
Initial Invested Amount.............................. $750,000,000
Investor Amount as of October 31, 2002............... $750,000,000
Class A Certificate Rate............................. One Month LIBOR plus 0.13% per annum
Class B Certificate Rate............................. One Month LIBOR plus 0.33% per annum
Collateral Minimum Interest Rate..................... Not to exceed 9.5% per annum
Initial Enhancement Amount........................... $82,500,000
Series Servicing Fee Rate............................ 2% per annum
Series 2000-A Termination Date....................... July 2005 Distribution Date
Series Issuance Date................................. February 2, 2000
</Table>
I-2
<Table>
SERIES 2000-B
Initial Invested Amount.............................. $650,000,000
Investor Amount as of October 31, 2002............... $650,000,000
Class A Certificate Rate............................. One Month LIBOR plus 0.11% per annum
Class B Certificate Rate............................. One Month LIBOR plus 0.31% per annum
Collateral Minimum Interest Rate..................... No higher than One Month LIBOR plus 2.00%
per annum
Initial Enhancement Amount........................... $71,500,000
Series Servicing Fee Rate............................ 2% per annum
Series 2000-B Termination Date....................... September 2005 Distribution Date
Series Issuance Date................................. April 4, 2000
SERIES 2000-C
Initial Invested Amount.............................. $650,000,000
Investor Amount as of October 31, 2002............... $650,000,000
Class A Certificate Rate............................. 7.02% per annum
Class B Certificate Rate............................. One Month LIBOR plus 0.39% per annum
Collateral Minimum Interest Rate..................... No higher than One Month LIBOR plus 2.00%
per annum
Initial Enhancement Amount........................... $71,500,000
Series Servicing Fee Rate............................ 2% per annum
Series 2000-C Termination Date....................... February 2008 Distribution Date
Series Issuance Date................................. August 25, 2000
SERIES 2000-D
Initial Invested Amount.............................. $900,000,000
Investor Amount as of October 31, 2002............... $900,000,000
Class A Certificate Rate............................. One Month LIBOR plus 0.14% per annum
Class B Certificate Rate............................. One Month LIBOR plus 0.38% per annum
Collateral Minimum Interest Rate..................... No higher than One Month LIBOR plus 2.00%
per annum
Initial Enhancement Amount........................... $99,000,000
Series Servicing Fee Rate............................ 2% per annum
Series 2000-D Termination Date....................... May 2008 Distribution Date
Series Issuance Date................................. November 15, 2000
SERIES 2001-A
Initial Invested Amount.............................. $950,000,000
Investor Amount as of October 31, 2002............... $950,000,000
Class A Certificate Rate............................. One Month LIBOR plus 0.15% per annum
Class B Certificate Rate............................. No higher than One Month LIBOR plus 0.50%
per annum
Collateral Minimum Interest Rate..................... No higher than One Month LIBOR plus 2.00%
per annum
Initial Enhancement Amount........................... $99,750,000
Series Servicing Fee Rate............................ 2% per annum
Series 2001-A Termination Date....................... August 2008 Distribution Date
Series Issuance Date................................. February 23, 2001
</Table>
I-3
<Table>
SERIES 2001-B
Initial Invested Amount.............................. $800,000,000
Investor Amount as of October 31, 2002............... $800,000,000
Class A Certificate Rate............................. 5.60% per annum
Class B Certificate Rate............................. 5.90% per annum
Collateral Minimum Interest Rate..................... No higher than One Month LIBOR plus 2.00%
per annum
Initial Enhancement Amount........................... $68,000,000
Series Servicing Fee Rate............................ 2% per annum
Series 2001-B Termination Date....................... December 2008 Distribution Date
Series Issuance Date................................. June 27, 2001
SERIES 2001-C
Initial Invested Amount.............................. $800,000,000
Investor Amount as of October 31, 2002............... $800,000,000
Class A Certificate Rate............................. 3.86% per annum
Class B Certificate Rate............................. 4.19% per annum
Collateral Minimum Interest Rate..................... No higher than One Month LIBOR plus 2.00%
per annum
Initial Enhancement Amount........................... $68,000,000
Series Servicing Fee Rate............................ 2% per annum
Series 2001-C Termination Date....................... March 2007 Distribution Date
Series Issuance Date................................. October 23, 2001
SERIES 2002-A
Initial Invested Amount.............................. $800,000,000
Investor Amount as of October 31, 2002............... $800,000,000
Class A Certificate Rate............................. One Month LIBOR plus 0.05% per annum
Class B Certificate Rate............................. One Month LIBOR plus 0.34% per annum
Collateral Minimum Interest Rate..................... No higher than One Month LIBOR plus 2.00%
per annum
Initial Enhancement Amount........................... $84,000,000
Series Servicing Fee Rate............................ 2% per annum
Series 2002-A Termination Date....................... October 2007 Distribution Date
Series Issuance Date................................. May 8, 2002
SERIES 2002-B
Initial Invested Amount.............................. $750,000,000
Investor Amount as of October 31, 2002............... $750,000,000
Class A Certificate Rate............................. One Month LIBOR plus 0.14% per annum
Class B Certificate Rate............................. One Month LIBOR plus 0.44% per annum
Collateral Minimum Interest Rate..................... No higher than One Month LIBOR plus 2.00%
per annum
Initial Enhancement Amount........................... $78,750,000
Series Servicing Fee Rate............................ 2% per annum
Series 2002-B Termination Date....................... April 2010 Distribution Date
Series Issuance Date................................. October 31, 2002
</Table>
I-4
ANNEX II
RECEIVABLES IN ADDITIONAL ACCOUNTS
CONVEYED TO THE TRUSTEE
<Table>
<Caption>
NUMBER OF RECEIVABLES
ASSIGNMENT DATE OF ADDITIONAL IN ADDITIONAL
NUMBER ADDITION RELEVANT CUT-OFF DATE ACCOUNTS(1) ACCOUNTS(1)
- ---------- ------------------ --------------------- ----------- --------------
1 May 16, 1994 March 31, 1994 276,371 $ 367,091,261
2 July 1, 1994 May 31, 1994 157,629 $ 202,859,562
3 August 17, 1994 July 31, 1994 226,342 $ 351,961,171
4 September 23, 1994 August 31, 1994 192,815 $ 299,924,106
5 November 18, 1994 October 31, 1994 332,866 $ 406,625,727
6 January 6, 1995 November 30, 1994 217,320 $ 316,458,944
7 March 15, 1995 February 28, 1995 291,057 $ 348,693,399
8 April 18, 1995 March 31, 1995 143,714 $ 168,739,171
9 May 23, 1995 April 30, 1995 98,330 $ 137,485,579
10 July 18, 1995 June 30, 1995 322,271 $ 432,984,240
11 August 15, 1995 July 31, 1995 126,338 $ 188,302,827
12 August 31, 1995 August 11, 1995 67,968 $ 94,548,321
13 November 21, 1995 October 25, 1995 285,122 $ 491,863,655
14 December 15, 1995 November 26, 1995 265,376 $ 369,389,253
15 January 18, 1996 December 26, 1995 182,985 $ 330,263,251
16 February 19, 1996 January 31, 1996 269,467 $ 560,543,656
17 March 26, 1996 February 29, 1996 150,460 $ 330,531,723
18 May 1, 1996 March 31, 1996 68,056 $ 251,797,517
19 May 13, 1996 March 31, 1996 219,150 $ 499,241,938
20 June 18, 1996 April 30, 1996 244,770 $ 636,632,670
21 June 30, 1996 May 31, 1996 73,771 $ 200,155,226
22 September 1, 1996 July 31, 1996 217,130 $ 640,152,919
23 November 1, 1996 September 30, 1996 151,051 $ 500,113,079
24 November 1, 1996 September 30, 1996 30,631 $ 100,564,456
25 November 15, 1996 October 31, 1996 100,603 $ 250,370,356
26 January 17, 1997 December 31, 1996 118,232 $ 368,278,729
27 February 14, 1997 January 31, 1997 111,777 $ 307,635,708
28 March 14, 1997 February 28, 1997 169,598 $ 400,826,266
29 April 18, 1997 March 31, 1997 204,546 $ 450,500,767
30 May 14, 1997 April 30, 1997 155,299 $ 450,053,037
31 June 13, 1997 May 31, 1997 148,940 $ 241,091,790
32 June 29, 1997 May 31, 1997 5,757 $ 10,065,454
33 September 12, 1997 August 31, 1997 250,570 $ 499,607,860
34 September 30, 1997 August 31, 1997 218,401 $ 301,830,170
35 November 14, 1997 October 31, 1997 167,351 $ 322,443,973
36 December 12, 1997 November 30, 1997 228,234 $ 203,845,007
37 January 30, 1998 December 31, 1997 492,821 $ 729,961,299
38 February 13, 1998 January 31, 1998 246,990 $ 363,909,199
39 April 14, 1998 March 31, 1998 227,285 $ 907,447,235
40 May 14, 1998 April 30, 1998 249,490 $ 602,772,032
41 July 1, 1998 May 31, 1998 284,855 $ 582,539,789
</Table>
II-1
<Table>
<Caption>
NUMBER OF RECEIVABLES
ASSIGNMENT DATE OF ADDITIONAL IN ADDITIONAL
NUMBER ADDITION RELEVANT CUT-OFF DATE ACCOUNTS(1) ACCOUNTS(1)
- ---------- ------------------ --------------------- ----------- --------------
42 September 1, 1998 July 31, 1998 209,559 $ 500,442,550
43 October 1, 1998 August 31, 1998 126,098 $ 364,789,653
44 November 13, 1998 October 31, 1998 276,577 $ 648,197,959
45 December 14, 1998 November 30, 1998 65,326 $ 166,800,025
46 December 31, 1998 November 30, 1998 79,855 $ 210,815,757
47 January 28, 1999 December 31, 1998 77,427 $ 197,913,305
48 January 31, 1999 December 31, 1998 312,662 $ 704,718,352
49 February 16, 1999 January 31, 1999 189,409 $ 393,818,299
50 March 10, 1999 January 31, 1999 145,162 $ 248,815,264
51 March 24, 1999 February 28, 1999 152,894 $ 206,886,377
52 April 14, 1999 March 31, 1999 56,776 $ 105,666,192
53 April 16, 1999 March 31, 1999 124,643 $ 304,064,904
54 May 14, 1999 April 30, 1999 95,437 $ 123,248,542
55 June 1, 1999 April 30, 1999 400,682 $ 925,598,651
56 July 19, 1999 May 31, 1999 89,208 $ 118,401,838
57 July 23, 1999 June 30, 1999 182,395 $ 332,801,715
58 September 21, 1999 August 31, 1999 399,265 $ 920,892,601
59 October 15, 1999 September 30, 1999 147,493 $ 300,519,356
60 January 17, 2000 December 31, 1999 495,186 $1,345,216,825
61 April 17, 2000 March 31, 2000 203,644 $ 586,536,013
62 June 22, 2000 May 31, 2000 58,635 $ 184,408,447
63 July 7, 2000 May 31, 2000 219,294 $ 675,770,391
64 August 14, 2000 July 31, 2000 241,291 $ 685,961,799
65 November 1, 2000 September 30, 2000 196,306 $ 631,241,897
66 November 16, 2000 October 31, 2000 128,811 $ 401,480,403
67 March 9, 2001 January 31, 2001 108,228 $ 328,911,152
68 April 13, 2001 February 28, 2001 132,424 $ 360,469,883
69 June 1, 2001 April 30, 2001 271,087 $ 728,787,323
70 August 7, 2001 June 30, 2001 192,146 $ 552,660,620
71 October 1, 2001 August 31, 2001 411,688 $1,233,299,682
72 November 9, 2001 October 31, 2001 40,953 $ 97,718,518
73 February 12, 2002 December 31, 2001 402,113 $1,043,635,310
74 May 8, 2002 March 31, 2002 433,991 $1,231,750,794
75 August 1, 2002 June 30, 2002 265,337 $ 624,157,756
76 October 31, 2002 September 30, 2002 337,429 $ 890,012,528
77 November 26, 2002 October 31, 2002 297,963 $ 861,795,534
</Table>
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(1) The amounts shown are as of the relevant Cut-Off Date.
II-2
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FLEET CREDIT CARD MASTER TRUST II
ISSUER
[FLEET LOGO]
FLEET CREDIT CARD FUNDING TRUST
TRANSFEROR
FLEET BANK (RI), NATIONAL ASSOCIATION
SERVICER
SERIES 2002-C
$637,500,000
CLASS A 2.75% ASSET-BACKED CERTIFICATES
$45,000,000
CLASS B FLOATING RATE ASSET-BACKED CERTIFICATES
------------------------
PROSPECTUS SUPPLEMENT
------------------------
Underwriters of the Class A Certificates
LEHMAN BROTHERS
CREDIT SUISSE FIRST BOSTON
FLEET SECURITIES, INC.
JPMORGAN
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
Underwriters of the Class B Certificates
LEHMAN BROTHERS CREDIT SUISSE FIRST BOSTON
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION.
We are not offering the Series 2002-C certificates in any state where the
offer is not permitted.
The delivery of this prospectus supplement and the accompanying prospectus
at any time does not imply that the information in this prospectus supplement
and the accompanying prospectus is correct as of any date after the dates on
their covers. We note that if any material change occurs while this prospectus
supplement and the accompanying prospectus are required by law to be delivered,
we will update the relevant information in this prospectus supplement and the
accompanying prospectus to incorporate the material change.
Until February 17, 2003 all dealers that effect transactions in the Class A
certificates or the Class B certificates, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
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