SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[X] Filed by the Registrant
[_] Filed by a Party other than the Registrant
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CHASE CREDIT CARD MASTER TRUST (Issuer)
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION (Depositor)
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
_____________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________
5) Total fee paid:
_____________________________________________________________________
[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount Previously Paid:
_____________________________________________________________________
2) Form, Schedule or Registration Statement No.:
_____________________________________________________________________
3) Filing Party:
_____________________________________________________________________
4) Date Filed:
_____________________________________________________________________
2
May 19, 2003
To the Holders of the
Class A 7.09% Asset Backed Certificates, Series 1996-3 and
Class B 7.27% Asset Backed Certificates, Series 1996-3 of
Chase Credit Card Master Trust
This letter is being mailed to you on behalf of Chase Manhattan Bank
USA, National Association, as depositor of the above-named trust. The purpose
of this letter and the accompanying materials is to obtain your consent to the
execution of an amendment to the Series 1996-3 Supplement dated as of May 30,
1996 to the Pooling and Servicing Agreement pursuant to which the Class A
certificates and Class B certificates were issued by the trust. The amendment
would change the portfolio performance trigger for the purpose of determining
whether a base rate pay out event has occurred. The adoption of this amendment
would decrease the likelihood that a base rate pay out event will occur. The
amendment and the reasons why Chase USA seeks your approval to adopt the
amendment are discussed in the accompanying Solicitation Statement.
Only a registered holder of the Class A certificates and the Class B
certificates of the trust (or such holder's authorized legal representative)
at the close of business on April 15, 2003, the record date, may execute a
consent, and such consent will be binding on all subsequent transferees of
such Class A certificates and Class B certificates. If you hold your
certificates through a broker, dealer, bank or other nominee, you must contact
that entity directly in order to give appropriate instructions for consenting
to the amendment. A letter of instruction is included in the enclosed
solicitation materials which you may use for this purpose.
Regardless of the size of your holdings, your consent is important
because in order to implement the amendment consents from the holders of the
Class A certificates and the Class B certificates representing more than 50%
of the outstanding principal amount of the Class A certificates, Class B
certificates and collateral interest must be received. Accordingly, failure to
complete and return a consent will have the effect of a negative vote.
Any Class A certificateholder or Class B certificateholder that
gives its consent to the amendment may not revoke its consent.
A Solicitation Statement, a Consent Form, a letter of instruction
and a return, postage-paid envelope are enclosed. If you wish to obtain
additional copies of the accompanying materials, please contact the
solicitation agent, Mellon Investor Services LLC, at (888) 468-9726.
We urge you to complete, sign, date and return the enclosed Consent
Form as soon as possible.
Very truly yours,
/s/ Keith Schuck
-----------------------------
Keith Schuck
Senior Vice President
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
SOLICITATION STATEMENT
Statement soliciting consents of investor certificateholders with respect to a
proposed amendment of the Series 1996-3 Supplement to the Pooling and
Servicing Agreement governing the Investor Certificates issued by:
CHASE CREDIT CARD MASTER TRUST
Class A 7.09% Asset Backed Certificates, Series 1996-3 (Cusip No. 163762 AN7)
Class B 7.27% Asset Backed Certificates, Series 1996-3 (Cusip No. 163762 AP2)
This solicitation statement is furnished by Chase Manhattan Bank
USA, National Association, to holders of the Class A 7.09% Asset Backed
Certificates, Series 1996-3 and the Class B 7.27% Asset Backed Certificates,
Series 1996-3 issued by Chase Credit Card Master Trust. The trust exists
pursuant to the Third Amended and Restated Pooling and Servicing Agreement,
dated as of November 15, 1999 (the "Agreement") among Chase USA, as transferor
on and after June 1, 1996, JPMorgan Chase Bank (formerly known as Chemical
Bank and The Chase Manhattan Bank), as transferor prior to June 1, 1996, and
as servicer, and The Bank of New York, as trustee. The Class A and Class B
certificates together with the related collateral interest (collectively, the
"Investor Certificates") were issued pursuant to the Series 1996-3 Supplement
dated as of May 30, 1996 (the "Series Supplement") to the Agreement. This
solicitation statement is being sent in connection with Chase USA's
solicitation of consents from the registered holders of the Investor
Certificates to the execution and delivery of a proposed amendment to the
Series Supplement. The record date for determining the investor
certificateholders eligible to consent to the amendment is the close of
business on April 15, 2003. The date on which this solicitation statement is
first being sent to investor certificateholders is May 20, 2003. Capitalized
terms that are not defined within the text of this solicitation statement are
defined in the glossary of terms attached as Annex A.
Approval of the amendment requires the consent of investor
certificateholders holding more than 50% of the outstanding principal amount
of the Investor Certificates. The amendment will be executed and delivered if
consents are obtained from the required number of investor certificateholders
on or before the Solicitation Expiration Date (as defined below). Furthermore,
the amendment will be executed and delivered only if the trustee receives
letters from Standard & Poor's Ratings Group, Moody's Investors Service, Inc.
and Fitch Ratings (collectively, the "Rating Agencies"), confirming that
adoption of the amendment will not result in a reduction or withdrawal of
their respective ratings of the Class A and Class B certificates.
The term "Solicitation Expiration Date" means the earlier of (a)
5:00 p.m. New York City time on June 4, 2003 and (b) 5:00 p.m. New York City
time on the date on which consents are obtained from the required number of
investor certificateholders or, if extended by Chase USA, such subsequent time
and date specified by Chase USA. Chase USA reserves the right to extend the
period during which consents will be received from the investor
certificateholders at any time by making a public announcement of such
extension not later than 10:00 a.m. New York City
2
time on the business day following any previously announced Solicitation
Expiration Date. Chase USA may extend the solicitation period any number of
times.
Only a registered holder of an Investor Certificate (or such
holder's authorized legal representative) on the record date may execute a
consent. Giving a consent will not affect the right of an investor
certificateholder to transfer an Investor Certificate, and such consent will
be binding on all subsequent transferees of such Investor Certificate. As of
the date of this solicitation statement, all of the Class A and Class B
certificates are registered in the name of a nominee of The Depository Trust
Company ("DTC"). Chase USA anticipates that DTC, as nominee holder of the
Class A and Class B certificates, will execute an omnibus proxy that will
authorize its participants to execute consents with respect to the Class A and
Class B certificates owned by such DTC participants as specified on the DTC
position listing as of the record date. Beneficial owners of Investor
Certificates who hold their Investor Certificates through a broker, dealer,
bank or other nominee must contact that entity in order to give their consent
with respect to the amendment. A letter of instruction is included in the
solicitation materials provided with this solicitation statement which may be
used by a beneficial owner to give such instructions to the applicable broker,
dealer, bank or other nominee.
Any investor certificateholder that executes a consent to the
amendment on the accompanying form may not revoke such consent. Any investor
certificateholder that opposes or abstains on the accompanying form may revoke
such opposition or abstention and give its consent to the amendment (by
executing and delivering such consent as instructed on the accompanying form)
at any time prior to the Solicitation Expiration Date. If a properly executed
consent is returned with no instructions given with respect to the amendment,
the consent will be deemed to be in favor of the amendment.
Investor certificateholders will have no rights of appraisal or
similar dissenters' rights in the event that the amendment is adopted.
General
As the prime rate has decreased since the issuance of the Investor
Certificates, the Portfolio Yield (as defined below) for the Investor
Certificates has decreased while components of the Base Rate have remained
constant due to the fixed rate coupon for the Class A and Class B
certificates. Portfolio Yield has decreased because one of the main components
of Portfolio Yield is collections from finance charge receivables which are
based upon the prime rate. As a result, the likelihood of the occurrence of a
Base Rate Pay Out Event (as defined below) has increased because the
difference between the Portfolio Yield and the Base Rate has narrowed as
compared to when the Investor Certificates were originally issued.
The proposed amendment adds a new defined term "Portfolio
Supplemented Yield" which replaces the term "Portfolio Yield" solely for the
purpose of determining whether a Base Rate Pay Out Event has occurred. If
specified conditions are met, the Portfolio Supplemented Yield will be equal
to the Portfolio Yield plus a specific amount of shared excess finance charge
collections otherwise available to the Investor Certificates. Shared excess
finance charge collections are generally the amount by which finance charge
collections on the receivables in the trust allocable to the investor
interests of all series exceed the aggregate amount of allocable
3
servicing fees, defaulted receivables (net of recoveries) and interest on the
outstanding investor certificates available from all outstanding series of
investor certificates issued by the trust.
A "Base Rate Pay Out Event" currently occurs if Portfolio Yield
(averaged over any three consecutive monthly periods) is less than the Base
Rate (averaged over any three consecutive monthly periods). The "Base Rate"
means, with respect to any monthly period, the annualized percentage
equivalent of a fraction, the numerator of which is the sum of (a) the monthly
interest distributable on the Investor Certificates and (b) the proportionate
share of the servicing fee allocable to the Investor Certificates with respect
to such monthly period and the denominator of which is the Investor Interest
as of the close of business on the last day of such monthly period. "Portfolio
Yield" means the annualized percentage equivalent of a fraction, the numerator
of which is the sum of (a) the amount of finance charge receivables collected
for the monthly period, (b) investment earnings on funds in the Principal
Funding Account for the monthly period and (c) the amounts withdrawn from the
Reserve Account in accordance with the Series Supplement and deposited into
the Finance Charge Account for the monthly period, calculated on a cash basis,
after subtracting from that amount, the amount of receivables which were
charged off as uncollectible in such monthly period, and the denominator of
which is the Investor Interest as of the last day of such monthly period.
Shared excess finance charge collections are currently available to
cover shortfalls in amounts allocable to make payments of interest on the
Class A and Class B certificates and to meet the other obligations of the
trust with respect to each of the series of certificates that it has issued.
However, shared excess finance charge collections are not currently included
in the defined term "Portfolio Yield" and thus are not taken into account in
the current determination of whether a Base Rate Pay Out Event has occurred.
The amendment adds a new defined term "Portfolio Supplemented Yield".
Portfolio Supplemented Yield adds a portion of shared excess finance charge
collections (if specified conditions are met) to the amount of Portfolio Yield
(up to the maximum amount specified below) and uses Portfolio Supplemented
Yield in the determination of whether a Base Rate Pay Out Event has occurred.
Although sufficient shared excess finance charge collections are
currently available to the Investor Certificates, sufficient shared excess
finance charge collections may not always be available in the future,
particularly if the trust experiences higher levels of charged-off receivables
or if the prime rate were to continue to decline. If shared excess finance
charge collections are not available to the Investor Certificates, then no
amount of shared excess finance charge collections will be included in the
Portfolio Supplemented Yield and the calculation of the Base Rate Pay Out
Event will be determined in the same manner as it is determined before this
amendment takes effect.
This amendment will not have the effect of increasing the amount of
finance charge collections allocable or distributable to the Investor
Certificates. In addition, the inclusion of any amounts of shared excess
finance charge collections in the calculation of whether a Base Rate Pay Out
Event has occurred does not change in any way (either positively or
negatively) the amount of collateral or cash flow available to pay principal
or interest on the Investor Certificates nor will the amendment affect the
interest rate, payment date (either final or expected), collateral or rating
of the Investor Certificates.
4
The purpose of the amendment is to reduce the likelihood of the
occurrence of a Base Rate Pay Out Event. If a Base Rate Pay Out Event were to
occur, monthly distributions of principal would commence on the first
distribution date following the occurrence of such event (although
distributions of principal on the Class B certificates would not commence
until the principal amount of the Class A certificates has been repaid in
full).
The effect of this amendment on investor certificateholders will be
to reduce the likelihood that a decline in Portfolio Yield will cause a Base
Rate Pay Out Event to occur, thereby decreasing the likelihood that principal
will be repaid to investor certificateholders prior to the scheduled maturity
date, which is June 15, 2006 for the Class A certificates and July 15, 2006
for the Class B certificates.
A form of the amendment is attached to this solicitation statement
as Annex E.
Advantages of the Amendment
The amendment will reduce the likelihood of a Base Rate Pay Out
Event occurring, thereby decreasing the likelihood that principal will be
repaid to investor certificateholders earlier than the respective scheduled
payment dates of such Investor Certificates. As a result, investor
certificateholders are less likely to need to reinvest early distributions of
principal, at prevailing interest rates that are currently significantly lower
than the rates applicable to the Class A and Class B certificates. In the
absence of a pay out event, interest will continue to accrue and be paid to
investor certificateholders on the Investor Certificates at their current
respective fixed rates until their respective final payment dates. Further,
the proposed amendment has been reviewed by the Rating Agencies, all of which
have indicated that adoption of the amendment will not adversely affect their
respective ratings of either the Class A or Class B certificates. Thus,
investor certificateholders would continue to hold Investor Certificates with
the same ratings as those currently assigned, but with a reduced likelihood of
early distributions of principal.
Disadvantages of the Amendment
Although the Class A and Class B certificates will maintain their
respective ratings after the adoption of the amendment, the effect of the
amendment will be to delay the commencement of a Base Rate Pay Out Event that
occurs as a result of a decline in Portfolio Yield. Portfolio Yield is
calculated based upon two principal components--finance charge collections and
charged-off receivables. If the amendment is adopted, a decline in finance
charge collections or an increase in charged-off receivables that would
otherwise have resulted in a Base Rate Pay Out Event will not result in such a
Base Rate Pay Out Event and, as a consequence, investor certificateholders
could incur a loss if the performance of the trust's assets were worse than is
assumed by the Rating Agencies when they confirm their respective ratings of
the Class A and Class B certificates, resulting in losses greater than the
available credit enhancement where such situation could have been avoided if
the Base Rate Pay Out Event had occurred earlier and before the deterioration
in the trust's assets. In order to mitigate this risk, the amendment provides
that certain conditions must be met in order to use the revised formula for
calculating whether a Base Rate Pay Out Event has occurred and limits the
amount of shared excess finance
5
charge collections that can be included in Portfolio Supplemented Yield in any
one monthly period.
Certain Provisions of the Agreement
If a Base Rate Pay Out Event occurs, monthly distributions of
principal to holders of the Class A certificates would begin on the first
distribution date following the monthly period in which such Base Rate Pay Out
Event occurred, even though the scheduled principal payment date of the Class
A certificates is not until June 15, 2006. Holders of the Class B certificates
would begin receiving monthly distributions of principal on the first
distribution date after the Class A certificates are repaid in full, even
though the scheduled principal payment date of the Class B certificates is not
until July 15, 2006. In the case of such payments, there would be no
limitation on the amount of principal that could be distributed on any single
distribution date.
The purpose of accelerating payment of principal to investor
certificateholders upon the occurrence of a Base Rate Pay Out Event is to
enhance the likelihood that investor certificateholders will receive a full
return of their investment before the conditions giving rise to such event
impair the cash flows generated by the receivables held by the trust to the
extent that available credit enhancement would actually be depleted prior to
such investor certificateholders receiving such full return of their
investment.
Under the terms of the Agreement, Chase USA covenants that it will
not reduce the Portfolio Yield to less than the Base Rate unless such
reduction is otherwise required by law or is deemed necessary by Chase USA to
maintain its credit card business on a competitive basis, based on a good
faith assessment by Chase USA of the nature of the competition in the credit
card business. The purpose of this covenant is to protect investor
certificateholders from Chase USA taking actions that would decrease the cash
flow on such receivables to a rate that is less than that required to enable
the trust to continue to make scheduled payments of interest and cover losses
attributable to charged-off principal receivables allocable to investor
certificateholders or to a rate that would trigger amortization of the
Investor Certificates as described above. The amendment does not in any way
affect this covenant because the defined term "Portfolio Yield" will not be
affected by the amendment. The amendment will only affect the calculation for
determining whether the Base Rate Pay Out Event has occurred.
Portfolio Yield
Portfolio Yield is based on the amount of collections of finance
charge receivables received by the trust less the amount of receivables that
has been charged-off as uncollectible. The amount of finance charge
collections and losses due to charged-off receivables depends on payment
patterns of cardholders which result from a variety of economic, legal and
social factors. Chase USA is unable to determine and has no basis to predict
whether or to what extent changes in applicable laws or other economic or
social factors will affect card use or repayment patterns. Economic factors
include the rate of inflation, unemployment levels and relative interest
rates. Chase USA believes that the reduction in gross portfolio yield for the
trust that has created the increased risk of a Base Rate Pay Out Event is
primarily attributable to a decrease in periodic finance charges as a result
of multiple reductions in the prime rate that have occurred since the issuance
of the Investor Certificates. A majority of the credit card accounts held by
the
6
trust have periodic finance charges that are calculated on a floating rate
based upon the prime rate. The prime rate has decreased 4.25% from January 1,
2000 to March 31, 2003. When the prime rate decreases periodic finance charges
also decrease resulting in lower gross portfolio yield. As shown in the chart
below, the net default rates and the payment rates for the trust have been
relatively stable in recent months, while the gross portfolio yield for the
trust has declined during the last twelve months. The amount of gross
portfolio yield will decrease in the future if the prime rate continues to
decline.
The chart below shows the gross portfolio yield, payment rate and
net charge-off rate for the trust portfolio for each month from January 2001
to December 2002.
- --------------------------------------------------------------------------------
CHASE CREDIT CARD MASTER TRUST
Gross Net
Portfolio Payment Default
Yield Rate Rate
Jan-01 18.76% 15.70% 5.52%
Feb-01 17.06% 13.47% 5.94%
Mar-01 19.47% 15.44% 6.22%
Apr-01 18.43% 15.24% 6.36%
May-01 18.15% 15.47% 6.60%
Jun-01 16.74% 14.74% 6.67%
Jul-01 18.37% 15.80% 6.28%
Aug-01 18.42% 16.20% 5.59%
Sep-01 15.62% 13.73% 5.80%
Oct-01 18.69% 16.55% 5.48%
Nov-01 16.72% 14.96% 5.11%
Dec-01 16.83% 15.18% 5.27%
Jan-02 16.32% 16.11% 5.87%
Feb-02 14.64% 13.83% 5.46%
Mar-02 16.42% 15.75% 5.92%
Apr-02 14.80% 15.52% 5.31%
May-02 14.81% 16.19% 4.75%
Jun-02 13.97% 14.69% 4.94%
Jul-02 16.01% 16.78% 4.72%
Aug-02 15.04% 16.03% 4.84%
Sep-02 14.72% 15.58% 4.68%
Oct-02 15.25% 15.97% 5.18%
Nov-02 14.27% 14.38% 5.02%
Dec-02 15.65% 16.18% 6.07%
- --------------------------------------------------------------------------------
"Gross portfolio yield" for any month means the total amount of
collected finance charges and interchange fees allocated to the trust for the
month, expressed as a percentage of total outstanding principal receivables at
the beginning of the month.
The "payment rate" for any month is the total amount collected on
receivables during the month, including recoveries on previously charged-off
receivables, expressed as a percentage of total outstanding receivables at the
beginning of the month.
The "net default rate" for any month is the amount of charged-off
receivables recorded in the month, net of any recoveries from earlier
charge-offs on receivables in the master trust portfolio, expressed as a
percentage of total outstanding principal receivables at the beginning of the
month.
7
The amount of finance charge collections and charged-off receivables
is also influenced by the amount of delinquencies and the level of convenience
use (where cardholders pay their balances early and avoid charges), both of
which can decrease the Portfolio Yield. If more cardholders do not pay their
account in a timely manner, delinquencies will increase possibly indicating
that in the future, the receivables for the cardholders with delinquent
accounts may be uncollectible resulting in a larger amount of receivables
being charged-off. If cardholders increase their level of convenience use then
less finance charge receivables will be generated by the trust and finance
charge collections will decrease.
In addition, competition may affect Portfolio Yield. As the credit
card industry is increasingly competitive, new credit card issuers continually
seek to expand in or enter the market and additional non-cash payment methods,
including pre-paid cash cards and other technology-based cash substitutes, are
being introduced which may also compete with credit cards. If cardholders
choose to utilize competing sources of credit and/or methods of payment, fewer
credit card receivables may be generated resulting in fewer finance charge
receivables and finance charge collections. To retain cardholders, Chase USA
reviews market conditions regularly to maintain the competitiveness of its
credit card products and, accordingly, reserves the right (subject to the
limitations discussed above) to change the terms of its credit card accounts,
including applicable fees and finance charges. Any decreases in applicable fee
rates and finance charge rates that Chase USA makes can also decrease finance
charge collections.
As discussed in the preceding paragraphs, any decrease in the level
of finance charge collections or increase in the level of receivables
charged-off as uncollectible has the effect of decreasing Portfolio Yield. Any
decrease in Portfolio Yield increases the risk of the occurrence of a Base
Rate Pay Out Event.
Purpose of the Amendment
Declines in the gross portfolio yield for the trust have resulted in
a decreased Portfolio Yield on the Investor Certificates. The Portfolio Yield
was 9.28% for the Monthly Period ending March 31, 2003. If the three-month
consecutive average of the Portfolio Yield, which was 9.14% as of March 31,
2003, falls below the three-month consecutive average of the Base Rate, which
is 8.69% as of March 31, 2003, then a Base Rate Pay Out Event will occur
resulting in early payment of principal of the Investor Certificates.
Despite the reduction in gross yield available to the trust,
sufficient shared excess finance charge collections are currently available to
make payments of interest on the Class A and Class B certificates and to meet
the other obligations of the trust with respect to each of the series of
certificates that it has issued. Approximately 91% of the outstanding amount
of the Investor Certificates issued as part of Group I bear a floating
interest rate that is based upon one-month LIBOR. One-month LIBOR has
decreased 4.51% from the January 1, 2000 monthly period to the March 31, 2003
monthly period. As one-month LIBOR has decreased, the interest payments on the
floating rate certificates have also decreased, thereby reducing the overall
obligations of the trust. However, because the Class A and Class B
certificates are fixed rate certificates, there has not been a corresponding
decrease in the interest payments or the Base Rate for the Investor
Certificates. The floating rate certificates thus generate shared excess
finance charge collections that are available to Series 1996-3 and other fixed
rate series. The amount of gross portfolio
8
yield and shared excess finance charge collections that the trust has
generated over the past twelve months can be found in the table on Annex B.
Concurrently with this solicitation, Chase USA is soliciting
substantially similar consents from the holders of Series 1996-2 and Series
1999-3 investor certificates, both of which are fixed rate series. These other
fixed rate series are entitled to shared excess finance charge collections on
a pro rata basis with Series 1996-3. The continuing requirements of the other
fixed rate series may reduce the amount of shared finance charge collections
available to Series 1996-3 and may reduce the Average Trust Excess Spread
Percentage and thus may increase the likelihood of a Base Rate Pay Out Event.
Approval of this amendment is not conditioned on approval of the respective
amendments by the holders of the other series.
In light of these factors, Chase USA proposes the amendment that
would have the effect of reducing the likelihood that a Base Rate Pay Out
Event would arise from a reduction in the Portfolio Yield and, therefore,
reducing the possibility of early repayment of principal to investor
certificateholders due to such reduction. Chase USA believes that, absent
adoption of the amendment, a Base Rate Pay Out Event and acceleration of
repayment of principal on the Investor Certificates could occur at a time when
cash flows on the receivables assigned to the trust would still be sufficient
to the degree consistent with the ratings of such Investor Certificates as
originally assigned by the relevant Rating Agencies, to support the ultimate
payment of principal of, and full and timely payment of interest on, such
Investor Certificates. Investor certificateholders could incur a loss as a
result of the proposed amendment if the performance of the trust's assets were
worse than is assumed by the Rating Agencies when they confirm their
respective ratings of the Class A and Class B certificates, resulting in
losses greater than the available credit enhancement where such situation
could have been avoided had the lower, current Portfolio Yield triggered a
Base Rate Pay Out Event early enough that such losses would not have been
greater than the available credit enhancement.
Although sufficient shared excess finance charge collections are
currently available to the Investor Certificates, sufficient shared excess
finance charge collections may not always be available in the future,
particularly if the trust experiences higher levels of charged-off receivables
or if the prime rate were to continue to decline. If shared excess finance
charge collections are not available to the Investor Certificates, then no
amount of shared excess finance charge collections will be included in the
Portfolio Supplemented Yield and the calculation of the Base Rate Pay Out
Event will be determined in the same manner as it is determined before this
amendment takes effect.
Terms of the Amendment
The amendment adds a new defined term "Portfolio Supplemented Yield"
which replaces the term "Portfolio Yield" solely for the purpose of
determining whether a Base Rate Pay Out Event has occurred. If specified
conditions are met, the Portfolio Supplemented Yield will be equal to the
Portfolio Yield plus a specific amount of shared excess finance charge
collections otherwise available to the Investor Certificates. The amount of
shared excess finance charge collections included in the calculation of the
Base Rate Pay Out Event varies with the Average Excess Spread Percentage.
"Average Excess Spread Percentage" means the amount (expressed as an
annualized percentage) by which the average Portfolio Yield for three
consecutive monthly
9
periods exceeds the average Base Rate. Assuming sufficient shared excess
finance charge collections exist, the amendment would have the effect of
adding approximately in any one monthly period (a) 0% to the Portfolio Yield
if the Average Excess Spread Percentage is greater than 1.50%, (b) 0.50% to
the Portfolio Yield if the Average Excess Spread Percentage is greater than 1%
and less than or equal to 1.50%, (c) 1.00% to the Portfolio Yield if the
Average Excess Spread Percentage is greater than 0.50% and less than or equal
to 1.00% and (d) 1.50% to the Portfolio Yield if the Average Excess Spread
Percentage is less than or equal to 0.50%. However, if (i) the Average Trust
Excess Spread Percentage is less than or equal to 3.5% indicating that the
Base Rates for the investor certificates issued by the trust has increased or
Portfolio Yield has decreased to a level where insufficient shared excess
finance charge collections exist, (ii) unreimbursed Investor Interest
Charge-offs exist indicating that the amount of receivables of the trust that
have been charged off has increased to a level where Investor Certificates are
experiencing a loss or (iii) if a servicer default has occurred and is
continuing, then no amount of shared excess finance charge collections are
included in Portfolio Supplemented Yield. Under such circumstances, the
occurrence of a Base Rate Pay Out Event will be determined as if the amendment
had not been adopted.
In the event that the amount required to be included in Portfolio
Supplemented Yield is greater than the amount of shared excess finance charge
collections available to the Investor Certificates, then only the amount of
shared excess finance charge collections available will be included in
Portfolio Supplemented Yield.
Rating Agency Confirmation
The Rating Agencies have indicated that adoption of the proposed
amendment will not result in a reduction of their respective ratings of the
Class A certificates, which are currently rated "AAA" by Standard & Poor's
Ratings Group and Fitch Ratings and "Aaa" by Moody's Investors Service, Inc.,
or the Class B certificates, which are currently rated "A" by Standard &
Poor's Ratings Group and Fitch Ratings and "A2" by Moody's Investors Service,
Inc.
The effectiveness of the amendment will be subject to the receipt by
the trustee of letters from the Rating Agencies confirming that such amendment
will not result in a reduction or withdrawal of their current ratings of the
Class A and Class B certificates.
Financial Information
Attached hereto as Annex C are two tables setting forth the
delinquency and loss experience with respect to the trust for the three months
ended March 31, 2003 and for the years ended December 31, 2000, 2001 and 2002.
"Number of days delinquent" means the number of days after the first billing
date following the original billing date in which the minimum payment was not
received; for example, 30 days delinquent means that the minimum payment was
not received within 60 days of the original billing date. Delinquencies are
calculated as a percentage of outstanding receivables as of the end of the
indicated month. "Average principal receivables outstanding" is the average of
the beginning of the month balance of the trust's principal receivables
outstanding during the indicated period. "Gross charge-offs" shown include
only the principal portion of charged-off receivables. Also excluded from
gross charge-offs is the amount
10
of any reductions in average principal receivables outstanding due to fraud,
returned goods or customer disputes.
Attached hereto as Annex D is a chart which sets forth with respect
to the Investor Certificates the monthly Portfolio Yield, Base Rate and excess
spread percentage (which is the amount by which Portfolio Yield exceeds the
Base Rate), as well as the Average Excess Spread Percentage and Average Trust
Excess Spread Percentage each calculated by using the particular month shown
and the two months preceding it.
As Annexes B and C indicate, delinquencies and charge-offs have
remained relatively stable while gross portfolio yield has declined. Annex B
also illustrates the amount of shared excess finance charge collections that
are currently available in the trust.
Federal Income Tax Considerations
Chase USA believes that under applicable current Treasury
Regulations the adoption of the amendment would not be a "significant
modification" to the terms of the Class A and B certificates. As a result, a
holder of the Class A and Class B certificates would not recognize gain or
loss as a result of the amendment, and future tax consequences to holders
would be the same as if the amendment had not been adopted.
However, no ruling is being requested from the Internal Revenue
Service (the "IRS") regarding the tax consequences of the amendment. As a
result, no assurance can be given that the IRS or a court would not disagree
with this position. Moreover, the amendment might have other tax consequences
to particular holders of the Class A and Class B certificates in light of
their own circumstances. As a result, the above discussion is intended for
general information only, and holders of Class A and Class B certificates
should consult their own tax advisors in determining the federal, state, local
and other tax consequences of the amendment.
Consents
Authorization of the amendment requires the consent of investor
certificateholders representing more than 50% of the outstanding principal
amount of the Investor Certificates (including in such calculation the
Investor Certificates, if any, that are owned by Chase USA or any of its
affiliates).
As of the record date, the outstanding aggregate principal amount of
the Investor Certificates is $468,163,441. Accordingly, consents from the
investor certificateholders representing $234,081,721 or more of the
outstanding principal amount of the Investor Certificates are necessary to
approve the amendment.
All of the Class A and Class B certificates are registered in the
name of Cede & Co., whose address is 55 Water Street, New York, New York
10041. Cede & Co. is the nominee name of DTC which is a securities depositary
engaged in, among other things, the business of effecting computerized
book-entry transfers of securities deposited with its participants, which are
financial institutions such as brokerage firms and banks.
11
Procedure for Consent
Investor certificateholders who are registered holders on the record
date should complete, sign and date the accompanying consent in accordance
with the instructions set forth therein and deliver, by mail, by hand or by
telecopy, the consent to the solicitation agent, Mellon Investor Services LLC,
as follows:
Mellon Investor Services LLC
44 Wall Street, 7th Floor
New York, New York 10005
Attention: Adrian Rocco
Telecopy Number: (917) 320-6312 or (917) 320-6320
If you wish to obtain additional copies of the solicitation materials, please
telephone (888) 468-9726. If you have any questions regarding the solicitation
materials, please telephone Patricia Garvey of Chase USA, at (302) 552-6317.
Only a registered holder of Investor Certificates (or such holder's
authorized legal representative) on the record date may execute a consent. Any
beneficial owner of Investor Certificates who hold certificates through a
broker, dealer, bank or other nominee must contact that entity in order to
give its consent with respect to the amendment. A letter of instruction is
contained in the solicitation materials provided along with this solicitation
statement which may be used by a beneficial owner to give such instructions to
the applicable broker, dealer, bank or other nominee.
If a consent relates to fewer than all of the Investor Certificates
registered in the name of the investor certificateholder providing such
consent, such investor certificateholder must indicate on the consent the
aggregate principal dollar amount of the Investor Certificates to which the
consent relates. Otherwise the consent will be deemed to relate to all of the
Investor Certificates registered in the name of such holder at the close of
business on the record date.
All questions as to the validity, form, eligibility (including time
of receipt) and the acceptance of consents will be resolved by the trustee, in
its sole discretion, whose determination shall be binding. The trustee
reserves the absolute right to reject all consents that are not in proper form
or the acceptance of which could, in the opinion of its counsel, be unlawful.
The trustee also reserves the right to waive any irregularities or conditions
of delivery as to particular consents. Unless waived, any irregularities in
connection with the deliveries must be cured within such time as the trustee
determines. None of the trustee, the solicitation agent, Chase USA or any
other person will be under any duty to give notification of any such
irregularities or waiver. Deliveries of such consents will not be deemed to
have been properly made until such irregularities have been cured or waived.
The interpretation of the trustee of the terms and conditions of this
solicitation shall be binding.
Revocation of Consents
Any investor certificateholder who gives its consent to the
amendment may not revoke such consent. Any investor certificateholder who
opposes or abstains with respect to the
12
amendment on the accompanying form may revoke such opposition or abstention
and give its consent to the amendment (by delivering such consent on the
accompanying form in accordance with the procedures described above) at any
time prior to the Solicitation Expiration Date. IF A PROPERLY EXECUTED CONSENT
IS RETURNED WITH NO INSTRUCTIONS GIVEN WITH RESPECT TO THE AMENDMENT, THE
CONSENT WILL BE DEEMED TO BE IN FAVOR OF THE AMENDMENT.
Effective Date of Amendment
Chase USA and the trustee intend to execute the amendment as soon as
practicable after the Solicitation Expiration Date if the requisite number of
consents is obtained. The amendment will be deemed to become effective, if
executed on or prior to the Determination Date in a monthly period, as of the
first day of the preceding monthly period and otherwise as of the first day of
the monthly period in which the amendment is executed, subject to receipt of
confirmation from the Rating Agencies that such amendment will not result in a
reduction or withdrawal of their respective current ratings of the Class A and
Class B certificates. After the amendment becomes effective, it will bind all
investor certificateholders whether or not they consented to the adoption of
the amendment.
Other Matters
Directors, officers and employees of Chase USA may engage in further
solicitation of consents by wire, mail or telephone or in person, without
compensation therefor other than reimbursement of expenses.
Chase USA has retained the solicitation agent to assist with the
solicitation for a fee not expected to exceed $16,000 exclusive of expenses.
All costs of the solicitation will be borne by Chase USA. Chase USA
will pay brokerage houses and other custodians, nominees and fiduciaries the
reasonable out-of-pocket expenses incurred by them in forwarding copies of
this solicitation statement and the consent and any related documents to the
beneficial owners of the Investor Certificates held of record by such persons
and in forwarding consents to their customers.
The mailing addresses of the principal executive offices of Chase
USA are:
White Clay Center Building 200
Route 273
Newark, Delaware 19711
These addresses are set forth in order to comply with rules of the
Securities and Exchange Commission (the "SEC") governing the solicitation.
Consents should be delivered, mailed or telecopied only to the solicitation
agent at the address as set forth above under the caption "Procedure for
Consent". Under no circumstances should consents be mailed to Chase USA.
13
Incorporation of Other Documents By Reference
The SEC allows the trust to "incorporate by reference" information
that it files with the SEC, which means that the trust can disclose important
information to the investor certificateholders by referring them to those
documents. The information incorporated by reference is an important part of
this solicitation statement. The trust incorporates by reference the documents
listed below under Item 13(b) of Schedule 14A of Regulation 14A under the
Securities Exchange Act of 1934, as amended. Such information was filed in
accordance with the letters dated January 16, 1991 and March 14, 1991,
submitted to the Office of the Chief Counsel of the SEC on behalf of the
originators of the trust:
The trust's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002 filed on March 31, 2003.
The trust's Current Reports on Form 8-K filed since January 1, 2000
that contain the Monthly Certificateholder's Statements for the
Investor Certificates.
In addition, all documents that the trust files pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
subsequent to the date of this solicitation statement and prior to the
Solicitation Expiration Date shall be deemed to be incorporated by reference
into this solicitation statement and to be a part hereof from the date of
filing such documents.
Investor certificateholders may request a copy of these filings at
no cost, by writing or telephoning Chase USA at the following address:
Comptroller of Chase Manhattan Bank USA, National Association
500 Stanton Christiana Road
Floor 1
Newark, Delaware 19713
(302) 552-6310
Chase USA will respond to such request by first class mail or other equally
prompt means within one business day of receipt of such request.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this solicitation statement to the extent that a statement
contained in this solicitation statement, or in any other subsequently filed
document which is also incorporated herein by reference, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part of this solicitation statement except as so
modified or superseded.
PLEASE INDICATE YOUR CONSENT BY EXECUTING THE ENCLOSED CONSENT FORM
AND RETURNING IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE OR BY
TELECOPY. YOUR FAILURE TO ACT WILL HAVE THE SAME EFFECT AS IF YOU HAD VOTED
AGAINST THE AMENDMENT.
14
ANNEX A
GLOSSARY OF TERMS FOR SOLICITATION STATEMENT
"Agreement" means the Third Amended and Restated Pooling and
Servicing Agreement, dated as of November 15, 1999 among Chase USA, as
transferor on and after June 1, 1996, JPMorgan Chase Bank (formerly known as
Chemical Bank and The Chase Manhattan Bank), as transferor prior to June 1,
1996, and as servicer, and The Bank of New York, as trustee.
"Average Excess Spread Percentage" means the amount (expressed as an
annualized percentage) by which the average Portfolio Yield for three
consecutive monthly periods exceeds the average Base Rate.
"Average Trust Excess Spread Percentage" means the average amount
for three consecutive monthly periods (expressed as an annualized percentage)
by which the Portfolio Yield exceeds the weighted average of the Base Rates
for all series of investor certificates issued by the trust included in Group
One.
"Base Rate" means, with respect to any monthly period, the
annualized percentage equivalent of a fraction, the numerator of which is the
sum of (a) the monthly interest distributable on the Investor Certificates and
(b) the proportionate share of the servicing fee allocable to the Investor
Certificates with respect to such monthly period and the denominator of which
is the Investor Interest as of the close of business on the last day of such
monthly period.
"Base Rate Pay Out Event" means a pay out event that occurs if
Portfolio Yield (averaged over any three consecutive monthly periods) is less
than the Base Rate (averaged over any three consecutive monthly periods).
"DTC" means The Depository Trust Company.
"Finance Charge Account" means a bank account held for the benefit
of the investor certificateholders in which the servicer will deposit
collections of finance charge receivables allocated to the investor
certificateholders.
"Group One" means the group of series under the trust to which the
Investor Certificates belong.
"Investor Certificates" means the Class A certificates, Class B
certificates and the related collateral interest.
"Investor Interest" means an amount equal to the sum of (a) the
initial principal amount of the Class A certificates, Class B certificates and
collateral interest minus (b) the aggregate amount of principal payments made
to the holders of the Class A certificates, Class B certificates and the
collateral interest, minus (c) the Class A certificates', Class B
certificates' and the collateral interest's proportionate share of receivables
that were charged off as uncollectible and not reimbursed and minus (d) any
other reallocated amounts pursuant to the Agreement.
"Investor Interest Charge-offs" mean reductions in the Investor
Interest due to receivables that were charged off as uncollectible.
"Portfolio Yield" means the annualized percentage equivalent of a
fraction, the numerator of which is the sum of (a) the amount of finance
charge receivables collected for the monthly period, (b) investment earnings
on funds in the Principal Funding Account for the monthly period and (c) the
amounts withdrawn from the Reserve Account in accordance with the Series
Supplement and deposited into the Finance Charge Account for the monthly
period, calculated on a cash basis, after subtracting from that amount, the
amount of receivables which were charged off as uncollectible in such monthly
period, and the denominator of which is the Investor Interest as of the last
day of such monthly period.
"Portfolio Supplemented Yield" means Portfolio Yield plus a
specified amount of shared excess finance charge collections if the following
conditions are met: (a) the Average Trust Excess Spread Percentage is greater
than 3.5%, (b) no unreimbursed Investor Interest Charge-offs exist and (c) no
servicer default has occurred.
"Principal Funding Account" means an eligible deposit account held
for the benefit of the investor certificateholders in which collections of
principal receivables are accumulated.
"Rating Agencies" means Standard & Poor's Ratings Group, Moody's
Investors Service, Inc. and Fitch Ratings.
"Reserve Account" means an eligible deposit account held for the
benefit of the investor certificateholders in which deposits and withdrawals
are made in accordance with the Series Supplement.
"Series Supplement" means the Series 1996-3 Supplement dated as of
May 30, 1996 to the Agreement.
"Solicitation Expiration Date" means the earlier of (a) 5:00 p.m.
New York City time on June 4, 2003 and (b) 5:00 p.m. New York City time on the
date on which consents are obtained from the required number of investor
certificateholders or, if extended by Chase USA, such subsequent time and date
specified by Chase USA.
2
ANNEX B
CHASE CREDIT CARD MASTER TRUST
Gross Portfolio Yield Shared Excess Finance Charge Collections
---------------------- ----------------------------------------
(Annualized) (dollars in millions)
Mar-03 15.06% 132.5
Feb-03 14.72% 108.0
Jan-03 14.22% 108.8
Dec-02 15.64% 134.5
Nov-02 14.27% 104.3
Oct-02 15.25% 119.0
Sep-02 14.72% 120.4
Aug-02 15.04% 119.6
Jul-02 16.01% 139.0
Jun-02 13.97% 84.1
May-02 14.81% 100.4
Apr-02 14.80% 85.6
Mar-02 16.42% 89.9
Feb-02 14.64% 51.9
Jan-02 16.32% 61.8
ANNEX C
Delinquency Experience
Master Trust Portfolio
(dollar amounts in millions)
As of March 31, Year Ended December 31,
--------------------------- ------------------------------------------------------------------------------------
2003 2002 2001 2000
--------------------------- --------------------------- --------------------------- --------------------------
Percentage Percentage Percentage Percentage
Number of Days Delinquent of Total Delinquent of Total Delinquent of Total Delinquent of Total
Delinquent Amount Receivables Amount Receivables Amount Receivables Amount Receivables
- ----------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ -------------
30 to 59 Days.... $ 452 1.38% $ 460 1.40% $ 367 1.45% $ 306 1.39%
60 to 89 Days.... 324 0.99% 350 1.07% 282 1.11% 242 1.10%
90 Days or More.. 683 2.08% 663 2.02% 542 2.14% 477 2.17%
------ ---- ------ ---- ------ ---- ------ ----
TOTAL......... $1,459 4.44% $1,473 4.49% $1,191 4.70% $1,025 4.66%
====== ==== ====== ==== ====== ==== ====== ====
Loss Experience
Master Trust Portfolio
(dollar amounts in millions)
Three Months
Ended
March 31, Year Ended December 31,
----------------- -------------------------------------------------------
2003 2002 2001 2000
----------------- ----------------- ----------------- -----------------
Average Principal Receivables
Outstanding......................... $ 32,268 $ 29,200 $ 21,504 $ 20,486
Gross Charge-Offs..................... 496 1,637 1,346 1,161
Recoveries............................ 50 117 82 69
Net Charge-Offs....................... 446 1,520 1,263 1,093
Net Charge-Offs as a Percentage of
Average Receivables Outstanding..... 5.52%* 5.21% 5.87% 5.33%
- ----------------
* annualized figure
ANNEX D
CHASE CREDIT CARD MASTER TRUST
SERIES 1996-3
AVERAGE AVERAGE
EXCESS EXCESS TRUST EXCESS
SPREAD SPREAD SPREAD
PORTFOLIO YIELD BASE RATE PERCENTAGE PERCENTAGE PERCENTAGE
- --------- ----------------- ----------- ------------ ------------ --------------
MAR-03 9.28% 8.68% .60% .45% 5.17%
FEB-03 9.43% 8.69% .74% .54% 5.22%
JAN-03 8.70% 8.69% .01% .48% 5.11%
DEC-02 9.56% 8.69% .87% .94% 5.41%
NOV-02 9.26% 8.69% .57% 1.09% 5.42%
OCT-02 10.07% 8.70% 1.37% 1.40% 5.60%
SEP-02 10.04% 8.71% 1.33% 1.80% 5.96%
AUG-02 10.20% 8.71% 1.49% 1.47% 5.58%
JUL-02 11.29% 8.70% 2.59% 1.42% 5.47%
JUN-02 9.03% 8.71% .32% .82% 4.84%
MAY-02 10.06% 8.71% 1.35% 1.31% 5.28%
APRIL-02 9.49% 8.69% .80% 1.02% 4.97%
MAR-02 10.49% 8.71% 1.78% 1.33% 5.28%
FEB-02 9.18% 8.71% .47% 1.68% 5.62%
JAN-02 10.45% 8.72% 1.73% 2.48% 6.35%
NOTE: Each of the foregoing terms is defined in the accompanying solicitation
statement.
ANNEX E
- --------------------------------------------------------------------------------
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
Transferor on and after June 1, 1996,
JPMORGAN CHASE BANK
(formerly The Chase Manhattan Bank),
Transferor prior to June 1, 1996 and Servicer
and
THE BANK OF NEW YORK,
Trustee
on behalf of the Certificateholders
of Chase Credit Card Master Trust
(formerly Chemical Master Credit Card Trust I)
----------------------------------------
AMENDMENT
Dated as of May , 2003
to
SERIES 1996-3 SUPPLEMENT
Dated as of May 30, 1996
TO
THIRD AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of November 15, 1999
--------------------------------------------
- --------------------------------------------------------------------------------
AMENDMENT NO. 1, dated as of May , 2003 (this "Amendment"), to the
Series 1996-3 Supplement, dated as of May 30, 1996 (the "Supplement") to the
Third Amended and Restated Pooling and Servicing Agreement, dated as of
November 15, 1999 (as amended by the First Amendment, dated as of March 31,
2001, and by the Second Amendment, dated as of March 1, 2002, and as
supplemented, the "Pooling and Servicing Agreement") by and among CHASE
MANHATTAN BANK USA, NATIONAL ASSOCIATION ("Chase USA"), as Transferor on and
after June 1, 1996, JPMORGAN CHASE BANK (formerly The Chase Manhattan Bank and
prior to July 13, 1996, Chemical Bank), as Transferor prior to June 1, 1996,
and as Servicer, and THE BANK OF NEW YORK, as Trustee.
WHEREAS, Section 13.1(c) of the Pooling and Servicing Agreement
provides that the Servicer, the Transferor and the Trustee, with the consent
of Certificateholders evidencing undivided interests aggregating more than 50%
of the Investor Interest of each and every Series adversely affected, may
amend the Pooling and Servicing Agreement or any supplement from time to time
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Pooling and Servicing Agreement or
any supplement or of modifying in any manner the rights of the
Certificateholders of any Series;
WHEREAS, the Servicer, the Transferor and the Trustee desire to
amend the Supplement as set forth below;
WHEREAS, the Trustee has received the consent of at least a majority
of the Certificateholders of the Series 1996-3 Certificates issued and
outstanding under the Pooling and Servicing Agreement as supplemented by the
Supplement; and
WHEREAS, all other conditions precedent to the execution of this
Amendment have been complied with;
NOW, THEREFORE, the Servicer, the Transferor and the Trustee are
executing and delivering this Amendment in order to amend the Supplement in
the manner set forth below.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
SECTION 1. Amendment to Section 2.
(a) Section 2 of the Supplement is hereby amended by adding the
following defined terms in appropriate alphabetical order:
"'Average Excess Spread Percentage' shall mean, on any
Determination Date, the average (expressed as a per annum rate)
of the Excess Spread Percentages for the three consecutive
Monthly Periods preceding such date."
"'Average Trust Excess Spread Percentage' shall mean, on
any Distribution Date, the average (expressed as a per annum
rate) of the Trust
2
Excess Spread Percentages for the three
consecutive Distribution Dates ending on such date."
"'Excess Spread Percentage' shall mean, with respect to any
Monthly Period, the amount, if any, by which (i) the Portfolio
Yield exceeds (ii) the Base Rate."
"'Portfolio Supplemented Yield' shall mean, with respect to
any Monthly Period, the annualized percentage equivalent of a
fraction, the numerator of which is an amount equal to the sum
of (a) the amount of Collections of Finance Charge Receivables
deposited into the Finance Charge Account and allocable to the
Investor Certificates for such Monthly Period, (b) the
Principal Funding Investment Proceeds deposited into the
Finance Charge Account on the Transfer Date related to such
Monthly Period, (c) the amount of the Reserve Draw Amount (up
to the Available Reserve Account Amount) on the related
Transfer Date plus any amounts of interest and earnings
described in subsections 4.15(b) and (d) each deposited into
the Finance Charge Account on the Transfer Date relating to
such Monthly Period, and (d) for any Monthly Period (1) for
which the Average Trust Excess Spread Percentage as of the
related Distribution Date was greater than 3.5%, (2) for which
(after giving effect to all allocations made on such
Distribution Date) there were no unreimbursed Class A Investor
Charge-Offs, Class B Investor Charge-Offs or Collateral
Charge-Offs pursuant to Section 4.10 and (3) for which no
Servicer Default has occurred and is continuing, Required
Shared Excess Finance Charge Collections up to the amount of
the Shared Excess Finance Charge Collections available to
Series 1996-3 pursuant to Section 4.11 on the Transfer Date
relating to such Monthly Period, such sum to be calculated on a
cash basis after subtracting the Aggregate Investor Default
Amount for such Monthly Period, and the denominator of which is
the Investor Interest as of the close of business on the last
day of such Monthly Period."
"'Required Shared Excess Finance Charge Collections' shall
mean, on any Transfer Date, the amount determined as set forth
below on such Transfer Date:
3
================================================================================
Average Excess Spread Percentage The Required Shared Excess
on such Transfer Date is: Finance Charge Collections is:
- ------------------------------------------------
Greater Than: And Less Than Or Equal To:
- -------------------- --------------------------- -------------------------------
1.50% -- -0-
- -------------------- --------------------------- -------------------------------
1.00% 1.50% $195,068
- -------------------- --------------------------- -------------------------------
0.50% 1.00% $390,138
- -------------------- --------------------------- -------------------------------
-- 0.50% $585,204
==================== =========================== ===============================
"'Trust Excess Spread Percentage' shall mean, with
respect to any Monthly Period, the amount, if any, by which the
(i) Portfolio Yield exceeds the (ii) the weighted average of
the Base Rates for all Series in Group 1."
SECTION 2. Amendments to Section 9. Section 9(c) of the Supplement
shall be amended by deleting the reference to "Portfolio Yield" and inserting
in lieu thereof the following: "Portfolio Supplemented Yield".
SECTION 3. No Waiver. The execution and delivery of this Amendment
shall not constitute a waiver of a past default under the Supplement or the
Pooling and Servicing Agreement or impair any right consequent thereon.
SECTION 4. Pooling and Servicing Agreement in Full Force and Effect
as Amended. Except as specifically amended or waived hereby, all of the terms
and conditions of the Pooling and Servicing Agreement and the Supplement shall
remain in full force and effect. All references to the Pooling and Servicing
Agreement and the Supplement in any other document or instrument shall be
deemed to mean such Pooling and Servicing Agreement and the Supplement as
amended by this Amendment. This Amendment shall not constitute a novation of
the Pooling and Servicing Agreement or the Supplement, but shall constitute an
amendment thereof. The parties hereto agree to be bound by the terms and
obligations of the Pooling and Servicing Agreement and the Supplement, as
amended by this Amendment, as though the terms and obligations of the Pooling
and Servicing Agreement and the Supplement were set forth herein.
SECTION 5. Counterparts. This Amendment may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute
one and the same instrument.
5
SECTION 6. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND DUTIES
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 7. Effective Date. This Amendment shall become effective as
of the first day of _______, 2003.
IN WITNESS WHEREOF, the Servicer, the Transferor and the Trustee
have caused this Amendment to be duly executed by their respective officers,
thereunto duly authorized, as of the day and year first above written.
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION
Transferor on and after June 1, 1996
By:________________________________
Name:
Title:
JPMORGAN CHASE BANK (formerly the
Chase Manhattan Bank and prior
to July 13, 1996, Chemical Bank),
Transferor prior to June 1, 1996
and Servicer
By:________________________________
Name:
Title:
THE BANK OF NEW YORK,
Trustee
By:________________________________
Name:
Title:
CHASE CREDIT CARD MASTER TRUST
CLASS A 7.09% ASSET BACKED CERTIFICATES, SERIES 1996-3 CONSENT
SOLICITED ON BEHALF OF
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
UNDER THE POOLING AND SERVICING AGREEMENT
The undersigned holder of the Class A 7.09% Asset Backed
Certificates, Series 1996-3 issued by Chase Credit Card Master Trust hereby
[_] Consents to [_] Opposes [_] Abstains from voting on
the execution and delivery of the amendment to the Series 1996-3 Supplement
dated as of May 30, 1996 to the Pooling and Servicing Agreement under which
the certificates were issued, as set forth in the solicitation statement,
dated May 19, 2003, by Chase Manhattan Bank, USA, National Association ("Chase
USA") to the holders of the certificates, which amendment has been proposed by
Chase USA.
If you indicate an amount in the following space, this consent shall
be effective with respect to only the principal amount of certificates
indicated.
$________________
If you leave the preceding space blank, this consent shall be
effective with respect to all certificates of which you are the registered
holder.
(Please sign and date below)
IF THIS CONSENT IS SIGNED BUT NOT MARKED ABOVE, IT WILL BE DEEMED TO BE IN
FAVOR OF THE AMENDMENT.
Signature________________________ Date:_________________
Signature________________________
(if held jointly)
Please date and sign as your name appears hereon and return in the enclosed
envelope or by telecopy as provided in the solicitation statement. If acting
as executor, administrator, trustee or guardian, you should so indicate when
signing. If the signer is a corporation, please sign the corporate name by
duly authorized officer. If certificates are held in the name of more than one
person, each certificateholder should sign the consent.
CHASE CREDIT CARD MASTER TRUST
CLASS B 7.27% ASSET BACKED CERTIFICATES, SERIES 1996-3 CONSENT
SOLICITED ON BEHALF OF
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
UNDER THE POOLING AND SERVICING AGREEMENT
The undersigned holder of the Class B 7.27% Asset Backed
Certificates, Series 1996-3 issued by Chase Credit Card Master Trust hereby
[_] Consents to [_] Opposes [_] Abstains from voting on
the execution and delivery of the amendment to the Series 1996-3 Supplement
dated as of May 30, 1996 to the Pooling and Servicing Agreement under which
the certificates were issued, as set forth in the solicitation statement,
dated May 19, 2003, by Chase Manhattan Bank, USA, National Association ("Chase
USA") to the holders of the certificates, which amendment has been proposed by
Chase USA.
If you indicate an amount in the following space, this consent shall
be effective with respect to only the principal amount of certificates
indicated.
$________________
If you leave the preceding space blank, this consent shall be
effective with respect to all certificates of which you are the registered
holder.
(Please sign and date below)
IF THIS CONSENT IS SIGNED BUT NOT MARKED ABOVE, IT WILL BE DEEMED TO BE IN
FAVOR OF THE AMENDMENT.
Signature________________________ Date:_________________
Signature________________________
(if held jointly)
Please date and sign as your name appears hereon and return in the enclosed
envelope or by telecopy as provided in the solicitation statement. If acting
as executor, administrator, trustee or guardian, you should so indicate when
signing. If the signer is a corporation, please sign the corporate name by
duly authorized officer. If certificates are held in the name of more than one
person, each certificateholder should sign the consent.
CHASE CREDIT CARD MASTER TRUST (ISSUER)
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION (DEPOSITOR)
Solicitation of Consents with respect to
Class A 7.09% Asset Backed Certificates, Series 1996-3 (CUSIP No. 163762 AN7)
Class B 7.27% Asset Backed Certificates, Series 1996-3 (CUSIP No. 163762 AP2)
Pursuant to the Solicitation Statement dated May 19, 2003
- --------------------------------------------------------------------------------
THE CONSENT SOLICITATION COMMENCES ON MAY 19, 2003 AND WILL EXPIRE AT 5:00
P.M. NEW YORK CITY TIME ON THE EARLIER OF JUNE 4, 2003 AND THE DATE ON WHICH
THE REQUIRED NUMBER OF CONSENTS ARE OBTAINED UNLESS EXTENDED (THE
"SOLICITATION EXPIRATION DATE"). ANY CERTIFICATEHOLDER THAT CONSENTS TO THE
AMENDMENT ON THE ACCOMPANYING FORM MAY NOT REVOKE SUCH CONSENT. ANY
CERTIFICATEHOLDER WHO OPPOSES OR ABSTAINS ON THE ACCOMPANYING FORM MAY REVOKE
SUCH OPPOSITION OR ABSTENTION UNDER THE CIRCUMSTANCES DESCRIBED IN THE
SOLICITATION STATEMENT (AS DEFINED).
- --------------------------------------------------------------------------------
May 19, 2003
To Our Clients,
Enclosed for your consideration are the Solicitation Statement dated
May 19, 2003 (the "Solicitation Statement") and the related Consent Form in
connection with the solicitation by Chase Manhattan Bank USA, National
Association ("Chase USA") of consents from holders of Class A 7.09% Asset
Backed Certificates, Series 1996-3 and Class B 7.27% Asset Backed
Certificates, Series 1996-3 of the Chase Credit Card Master Trust to the
proposed amendment to the Series 1996-3 Supplement dated as of May 30, 1996 to
the Pooling and Servicing Agreement pursuant to which the certificates were
issued.
We are the holder of the certificates held for your account. Consent
to the proposed amendment may be given only by us as the holder and pursuant
to your instructions. The Consent Form is furnished to you for your
information only and cannot be used by you to consent to the proposed
amendment in respect of certificates held by us for your account.
We request instructions as to whether you wish to consent to the
proposed amendment upon the terms and subject to the conditions set forth in
the Solicitation Statement and the related Consent Form. We urge you to read
the Solicitation Statement and the related Consent Form carefully before
instructing us to deliver or withhold consents. Your instructions to us should
be forwarded as promptly as possible in order to permit us to deliver consents
on your behalf in accordance with the provisions of the Solicitation
Statement.
The consent solicitation will expire on the Solicitation Expiration
Date. If the requisite consents are received and accepted and the proposed
amendment is executed and becomes effective upon the satisfaction of the
conditions described in the enclosed Solicitation Statement, the proposed
amendment will be binding on all holders.
If you wish to have us consent to the proposed amendment, please so
instruct us by completing, executing and returning to us the instruction form
that follows prior to the Solicitation Expiration Date.
THE CONSENT SOLICITATION WILL NOT BE MADE TO, NOR WILL CONSENTS BE
ACCEPTED BY OR ON BEHALF OF, BENEFICIAL OWNERS OF INTERESTS IN CERTIFICATES IN
ANY JURISDICTION IN WHICH THE MAKING OF THE CONSENT SOLICITATION OR ACCEPTANCE
THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.
2
Instructions from beneficial owner regarding delivery of consents
relating to Proposed Amendment with respect to
the Series 1996-3 Supplement to the Pooling
and Servicing Agreement governing the
Class A 7.09% Asset Backed Certificates, Series 1996-3 (Cusip No. 163762 AN7)
Class B 7.27% Asset Backed Certificates, Series 1996-3 (Cusip No. 163762 AP2)
The undersigned acknowledge(s) receipt of your letter, the
Solicitation Statement and the related Consent Form, in connection with the
consent solicitation by Chase Manhattan Bank USA, National Association.
The undersigned, as the beneficial owner of the principal amount of
certificates listed below with respect to which you are the holder, hereby
authorizes and directs you to execute and deliver the Consent Form to evidence
the consent to the proposed amendment by the undersigned. You are further
authorized and directed to take all such other or further action as may be
necessary to carry out and effectuate the purpose and intent of these
instructions.
[ ] Please deliver my consent to the proposed amendment with
respect to the principal amount of certificates held by you for
my account or benefit.
[ ] Please do not deliver my consent to the proposed amendment for
the principal amount of certificates held by you for my account
or benefit.
[ ] Please abstain from voting on the proposed amendment for the
principal amount of certificates held by you for my account or
benefit.
If you indicate an amount in the following space, your instructions
indicated above shall be effective with respect to only the principal amount
of certificates indicated (must be in integral multiples of $1,000).
$________________
If you leave the preceding space blank, your instructions indicated
above shall be effective with respect to the entire principal amount of
certificates which we hold for your account or benefit.
(Please sign and date below)
IF THIS CONSENT IS SIGNED BUT NOT MARKED ABOVE, IT WILL BE DEEMED TO BE IN
FAVOR OF THE PROPOSED AMENDMENT.
Date:_________________________, 2003
_________________________________
Signature(s)
_________________________________
_________________________________
Please print name(s) here