As filed with the Securities and Exchange Commission on January 14, 2002
Registration No. 333-[ ]
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Chase USA Card Funding LLC
(Transferor of the Receivables described herein)
(Exact name of registrants as specified in their charters)
CHASE CREDIT CARD MASTER TRUST
(Issuer with respect to the Offered Securities)
Delaware [application pending]
(State or other jurisdiction (I.R.S. employer identification number)
of incorporation or organization)
Andrew T. Semmelman
Vice President
Chase USA Card Funding LLC
White Clay Center Building 200
Route 273
Newark, Delaware 19711
(302) 575-5000
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Andrew T. Semmelman
Vice President
c/o Chase Manhattan Bank USA,
National Association
White Clay Center Building 200
Route 273
Newark, Delaware 19711
(302) 575-5000
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copies to:
David M. Eisenberg, Esq. James Y. Lee, Esq. Andrew M. Faulkner, Esq.
Simpson Thacher & Bartlett J.P. Morgan Chase & Co. Skadden, Arps, Slate, Meagher & Flom LLP
425 Lexington Avenue 270 Park Avenue Four Times Square
New York, New York 10017 New York, New York 10017 New York, NY 10036
(212) 455-2000 (212) 270-6255 (212) 735-2853
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable on or after the effective date of the Registration
Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box. |_| If any of the securities being registered on this Form
are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. |X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
Calculation of Registration Fee
Title of Each Class Amount to Be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
of Securities to Be Registered Registered (1) Price per Unit or Share (2) Offering Price Registration Fee
Asset Backed Certificates $1,000,000 100% $1,000,000 $239
Asset Backed Notes $1,000,000 100% $1,000,000 -
Total $1,000,000 100% $1,000,000 $239
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(1) If any registered securities are issued at an original issue discount,
then such greater principal amount as shall result in an aggregate
initial offering price of $1,000,000. In no event will the aggregate
initial offering price of securities registered hereunder exceed
$1,000,000 or the equivalent thereof in one or more foreign currencies
or composite currencies, including the euro.
(2) The proposed maximum offering price per unit or share will be
determined from time to time by the registrant of the securities
registered hereunder.
The attached prospectus and either of the attached prospectus supplements
may be used by J.P. Morgan Securities Inc., a wholly owned subsidiary of
J.P. Morgan Chase & Co. and an affiliate of Chase Manhattan Bank USA,
National Association and the Transferor, in connection with offers and
sales related to market-making transactions in the securities. J.P. Morgan
Securities Inc. may act as principal or agent in such transactions. Such
sales will be made at prices related to prevailing market prices at the
time of sale.
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EXPLANATORY NOTE
This Form S-3 Registration Statement (file no. 333- ) includes, on
behalf of Chase USA Card Funding LLC ("Card Funding") and Chase Manhattan
Bank USA, National Association (the "Bank"), a base prospectus and one
model prospectus supplement, which describes an offering by Chase Credit
Card Owner Trust 200 - of asset backed notes. The prospectus and the
prospectus supplement have been prepared to comply with the "Plain English"
Rules (Release No. 33-7497), including Rule 421(b) and Rule 421(d) under
the Securities Act of 1933, as amended, and related revisions to Regulation
S-K and Form S-3 adopted by the Securities and Exchange Commission.
The information in this prospectus supplement and prospectus is
not complete and may be changed. We cannot sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. Neither this prospectus supplement nor the prospectus is an
offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
[GRAPHIC OMITTED]
The information in this prospectus supplement and prospectus is not
complete and may be changed. We cannot sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. Neither this prospectus supplement nor the prospectus is an
offer to sell these securities and it is not soliciting an offer to buy or
sale is not permitted.
Subject to Completion. Dated January 14, 2002
Prospectus Supplement
(To Prospectus dated January 14, 2002)
Chase Credit Card Owner Trust 200_
Issuer
Chase USA Card Funding LLC, Transferor
Chase Manhattan Bank USA, National Association, Administrator
JPMorgan Chase Bank, Servicer of Chase Credit Card Master Trust
$ Class A Floating Rate Asset Backed Notes, Series 200_
$ Class B Floating Rate Asset Backed Notes, Series 200_
$ Class C Floating Rate Asset Backed Notes, Series 200_
CLASS A CLASS B CLASS C
Principal Amount $ $ $
Price $ ($ %) ($ %) ( %)
Underwriters' Commissions $ ($ %) ($ %) ( %)
Proceeds to the Transferor $ ($ %) ($ %) ( %)
Interest Rate one-month LIBOR + one-month LIBOR + one-month LIBOR +
% p.a. % p.a. % p.a.
Interest Payment Dates monthly on the 15th monthly on the 15th monthly on the 15th
First Interest Payment Date - - -
Scheduled Note Payment Date - - -
The Class B Notes are subordinated to the Class A Notes. The Class C Notes
are subordinated to the Class A Notes and the Class B Notes.
These securities are interests in Chase Credit Card Owner Trust 200_-_, and
are backed only by the assets of the owner trust. Neither these securities
nor the assets of the owner trust are recourse obligations of Chase Credit
Card Master Trust, Chase USA Card Funding LLC, Chase Manhattan Bank USA,
N.A., JPMorgan Chase Bank or any of their affiliates, or obligations
insured by the FDIC.
These securities are highly structured. Before you purchase these
securities, be sure you understand the structure and the risks. See "Risk
Factors" beginning on page S-[ ] of this prospectus supplement.
We intend to apply to have the securities listed on the Luxembourg Stock
Exchange.
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed on the adequacy or accuracy of the disclosures in this supplement
and the attached prospectus. Any representation to the contrary is a
criminal offense.
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The underwriters for each class of notes have agreed to purchase those
notes, subject to the terms and conditions in the underwriting agreement.
Underwriters of the Class A Notes
JPMorgan
Underwriters of the Class B Notes and the Class C Notes
JPMorgan
, 2002
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Table of Contents
WHERE TO FIND INFORMATION IN THESE
DOCUMENTS..............................................................S-4
SUMMARY OF TERMS...........................................................S-5
STRUCTURAL SUMMARY.........................................................S-7
The Owner Trust and the Notes..........................................S-7
Card Funding...........................................................S-7
The Master Trust and the Series Certificate............................S-7
Sharing Excess Collections.............................................S-7
Scheduled Payment Dates; Maturity Dates................................S-8
Shortfalls in Expected Cashflows.......................................S-8
Optional Redemption....................................................S-9
Allocation of Net Losses; Credit Enhancement...........................S-9
Minimum Yield on the Receivables; Events of Default
and Acceleration of Maturity........................................S-9
Tax Status of Class A, Class B, Class C and Chase
Credit Card Master Trust...........................................S-10
ERISA Considerations..................................................S-10
Mailing Address and Telephone Number of Principal
Executive Offices..................................................S-10
SELECTED MASTER TRUST PORTFOLIO
SUMMARY DATA..........................................................S-11
RISK FACTORS..............................................................S-12
You May Receive Principal Payments Earlier or Later
Than the Scheduled Maturity Date if the Portfolio
Yield is Reduced...................................................S-12
Allocations of Charged-Off Receivables Could Reduce
Payments to You....................................................S-14
Issuance of Additional Series by the Master Trust May
Affect the Timing of Payments to You
..................................................................S-14
Card Funding May Add Accounts with Different Terms
to the Master Trust Portfolio......................................S-14
Card Funding May Not Be Able to Add New Accounts
When Required under the Pooling and Servicing
Agreement..........................................................S-15
Insolvency or Bankruptcy of Chase USA Could Result
in Accelerated, Delayed or Reduced Payments to
You................................................................S-15
You Will Have Limited Control of Owner Trust and
Master Trust Actions...............................................S-17
You May Not Be Able to Resell Your Notes..............................S-17
Repayment of Your Notes is limited to the Owner
Trust Assets.......................................................S-18
Class B Bears Losses Before Class A...................................S-18
Class C Bears Losses Before Class A
and Class B......................................................S-18
CHASE CREDIT CARD MASTER TRUST
PORTFOLIO.............................................................S-19
General...............................................................S-19
Delinquency and Loss Experience.......................................S-19
Characteristics of Receivables Portfolio..............................S-21
MATURITY CONSIDERATIONS...................................................S-23
Controlled Accumulation...............................................S-23
Rapid Amortization Period.............................................S-24
Historical Payment Rates..............................................S-24
RECEIVABLE YIELD CONSIDERATIONS...........................................S-25
CREATION OF THE OWNER TRUST...............................................S-26
USE OF PROCEEDS...........................................................S-26
DESCRIPTION OF THE SECURITIES.............................................S-27
Description of the Series Certificate.................................S-27
General...............................................................S-27
Interest Allocations..................................................S-27
Principal Allocations.................................................S-28
Controlled Accumulation...............................................S-28
Allocation Percentages................................................S-29
Reallocation of Cash Flows............................................S-29
Application of Collections............................................S-30
Shared Excess Finance Charge Collections..............................S-31
Shared Principal Collections..........................................S-31
Defaulted Receivables.................................................S-31
Principal Funding Account.............................................S-32
Accumulation Period Reserve Account...................................S-32
Pay Out Events........................................................S-33
Servicing Fees and Expenses...........................................S-35
Description of the Notes..............................................S-35
General...............................................................S-35
Subordination.........................................................S-35
Interest Payments.....................................................S-35
Optional Redemption...................................................S-37
Distributions.........................................................S-37
Owner Trust Spread Account............................................S-38
Events of Default.....................................................S-39
Noteholder Reports....................................................S-40
LISTING AND GENERAL INFORMATION...........................................S-41
UNDERWRITING..............................................................S-42
OTHER SERIES ISSUED AND
OUTSTANDING..........................................................S-45
GLOSSARY OF TERMS FOR
PROSPECTUS SUPPLEMENT................................................S-59
PART II...................................................................II-1
WHERE TO FIND INFORMATION IN THESE DOCUMENTS
The attached prospectus provides general information about Chase
Credit Card Owner Trust 200 - and Chase Credit Card Master Trust, including
terms and conditions that are generally applicable to the notes issued by
the owner trust and the certificates issued by the master trust. The
specific terms of the notes and the series certificate are described in
this supplement.
This supplement begins with several introductory sections describing
your series, Chase Credit Card Owner Trust 200 - , and Chase Credit Card
Master Trust in abbreviated form:
o Summary of Terms provides important amounts, dates and other terms
of your notes,
o Structural Summary gives a brief introduction to the key structural
features of your notes and the series certificate and directions
for locating further information,
o Selected Master Trust Portfolio Summary Data gives certain
financial information about the assets of the master trust, and
o Risk Factors describes risks that apply to your notes and the
series certificate.
As you read through these sections, cross-references will direct you
to more detailed descriptions in the attached prospectus and elsewhere in
this supplement. You can also directly reference key topics by looking at
the table of contents pages in this supplement and the attached prospectus.
As a purchaser of notes, you should review carefully the description
of the series certificate in this prospectus supplement and the prospectus.
The most significant asset of the owner trust will be the series
certificate issued by the master trust and pledged to secure the notes.
This prospectus supplement and the attached prospectus may be used by
J.P. Morgan Securities Inc., an affiliate of Chase USA Card Funding LLC,
Chase Manhattan Bank USA, N.A. and JPMorgan Chase Bank, and a wholly-owned
subsidiary of J.P. Morgan Chase & Co., in connection with offers and sales
related to market-making transactions in the notes offered by this
supplement and the attached prospectus. J.P. Morgan Securities Inc. may act
as principal or agent in such transactions. Such sales will be made at
prices related to prevailing market prices at the time of sale.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the prospectus. We have not
authorized anyone to provide you with different information.
We are not offering these notes in any state where the offer is not
permitted.
We do not make any representation as to the accuracy of the
information in this prospectus supplement and the prospectus as of any date
other than the dates stated on their respective covers.
To understand the structure of these securities, you must read carefully
the attached prospectus and this supplement in their entirety.
SUMMARY OF TERMS
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Administrator: Chase Manhattan Bank USA, National
Association--"Chase USA"
Transferor: Chase USA Card Funding LLC ("Card
Funding").
Issuer: Chase Credit Card Owner Trust 200-
Owner Trust Assets: The series certificate issued by Chase
Credit Card Master Trust representing
the right to certain collections on
receivables originated in the VISA and
MasterCard accounts comprising the
master trust portfolio, including
recoveries on charged-off receivables
and fees payable by VISA and
MasterCard to Chase USA or another
originator. The series certificate
will be rated in one of the four
highest rating categories by at least
one nationally recognized rating
agency.
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Note Structure: Amount % of Initial Series
Principal Amount
Class A $ %
Class B $ %
Class C $ %
Annual Servicing Fee:
Class A Class B Class C
Credit Enhancement: subordination of Class B subordination of Class C spread account
and Class C
ERISA Eligible: Yes Yes Yes
(investors subject to ERISA should
consult with their counsel)
Interest Rate: 1-month LIBOR + 1-month LIBOR + 1-month LIBOR +
% p.a. % p.a. % p.a.
Interest Accrual Method: actual/360 actual/360 actual/360
Interest Payment Dates: monthly (15th) monthly (15th) monthly (15th)
Interest Rate Index Reset Date: 2 business days before 2 business days before 2 business days before
each interest payment date each interest payment date each interest payment date
First Interest Payment Date:
Scheduled Note Payment Date:
Final Note Payment Date
(no later than):
Application for Exchange Listing: Luxembourg Luxembourg Luxembourg
CUSIP Number:
ISIN:
Common Code:
Anticipated Ratings: Aaa/AAA/AAA A2/A/A Baa2/BBB/BBB
(Moody's/S&P/Fitch)
It is a condition of issuance that at least one of the anticipated ratings
be obtained for Class A and Class B notes and that at least two of the
anticipated ratings be obtained for the Class C notes.
STRUCTURAL SUMMARY
This summary briefly describes certain major structural components
of Series 200 - . To fully understand the terms of Series 200 - you will
need to read both this supplement and the attached prospectus in their
entirety.
The Owner Trust and the Notes
The notes are obligations of the owner trust and bear interest at the rates
and are payable on the dates stated in the summary of terms. The notes will
be issued by the owner trust. The owner trust is a Delaware common law
trust formed by Card Funding and the owner trustee for the purpose of
issuing the notes. Card Funding is the beneficial owner of the owner trust.
The notes are secured by the series certificate and the proceeds of the
series certificate that may be held from time to time by the owner trust.
For more information on the owner trust, see "Creation of the Owner Trust"
in this supplement. For more information on the notes, see "Description of
the Securities--Description of the Notes" in this supplement. For more
information on the series certificate, see "Description of the
Securities--Description of the Series Certificate" in this supplement.
Card Funding
Card Funding is a Delaware limited liability company formed for the purpose
of purchasing receivables from Chase USA and selling them to the master
trust and engaging in the other transactions described herein. Card Funding
is a wholly-owned subsidiary of Chase USA.
The Master Trust and the Series Certificate
Chase Credit Card Master Trust is the issuer of the series certificate. On
the closing date, the series certificate for Series 200 - will be one of
outstanding series issued by the master trust. The series certificate will
not be subordinated to any other series of certificates issued by the
master trust. The trustee of the master trust maintains the master trust
for several beneficiaries:
o the owner trust, as holder of the series certificate for Series
200 - , is entitled to an allocation of collections on the
receivables in the master trust portfolio based on the outstanding
amount of the series certificate,
o certificateholders of other series issued by the master trust are
entitled to allocations of collections on the receivables based on
the aggregate outstanding amount of each series,
o providers of credit enhancements for certain series of
certificates issued by the master trust are entitled to
allocations of collections on the receivables based on the terms
of those enhancements, and
o Card Funding, as transferor of the receivables to the master
trust, is entitled to the remainder of the collections on the
receivables.
The series certificate represents an undivided interest in certain assets
of the master trust. Each month, a portion of collections and net losses on
the receivables will be allocated to the owner trust as holder of the
series certificate. The amounts allocated to the series certificate will be
used to pay principal and interest due on the notes, to cover net losses
allocated to the series certificate and to pay the servicing fees and other
expenses allocated to the series certificate.
For more information on the series certificate, see "Description of the
Securities--Description of the Series Certificate" in this supplement. For
more information on other series, see "Other Series Issued and Outstanding"
in this supplement. For more information on the allocation of collections
on the series certificate and payment on the series certificate, see
"Description of the Securities--Description of the Series
Certificate--Interest Allocations," "--Principal Allocations" and
"--Allocation Percentages" in this supplement.
Sharing Excess Collections
If the collections allocated to the series certificate exceed the principal
and interest payable on the notes, the servicing fee payable to the
servicer of the master trust, net losses allocated to the series
certificate and any required funding of the spread account (collections
greater than principal + interest + servicing fee + losses + spread account
funding), the servicer will share the excess with other series of
certificates issued by the master trust, and then distribute any remaining
excess to
Card Funding as the owner of the equity interest in the owner trust. In no
case will the holders of the notes receive more than the outstanding amount
of principal and interest due on the notes. For more information with
respect to the sharing of excess collections, see "Description of the
Securities--Description of the Series Certificate--Shared Excess Finance
Charge Collections" and "--Shared Principal Collections" in this
supplement.
Scheduled Payment Dates; Maturity Dates
The notes are scheduled to be paid in full on the following payment dates
for each class:
Class A
Class B
Class C
The owner trust expects to pay each class of notes in full on the scheduled
payment date for that class.
For the benefit of the owner trust, the master trust will accumulate funds
in a principal funding account for the purpose of repaying Class A. The
master trust will deposit principal collections in the principal funding
account during a controlled accumulation period that ends on the scheduled
payment date for Class A. The controlled accumulation period may be as long
as twelve months, but will be shortened if the servicer determines that a
shorter period will suffice for the accumulation of the Class A principal
amount. During the controlled accumulation period, the master trust will
make monthly deposits into the principal funding account in specified
amounts. The funds available for deposit in the principal funding account
will comprise the monthly principal collections allocated to Series 200 -
but may also include principal collections allocated to other series that
would otherwise be paid to Card Funding as transferor of the receivables to
the master trust. In general, the availability of principal collections
allocated to other series would be expected to permit the controlled
accumulation period to be shortened. On the scheduled payment date for
Class A, the master trust will pay to the owner trust the amount on deposit
in the principal funding account, and the owner trust will make a principal
allocation to Class A to the extent of the available funds.
On the scheduled payment date for Class B, if Class A has been paid in
full, the master trust will pay to the owner trust all principal
collections allocated to Series 200 - and the owner trust will make a
principal allocation to Class B, up to the outstanding principal amount of
Class B, to the extent of the available funds.
On the scheduled payment date for Class C, if Class A and Class B have been
paid in full, the master trust will pay to the owner trust all principal
collections allocated to Series 200 - and the owner trust will make a
principal allocation to Class C, up to the outstanding principal amount of
Class C, to the extent of the available funds.
The notes will mature, and any remaining principal and interest will be
payable, on . No further payments on the notes will be made after that
date.
For more information with respect to repayment of principal of notes and
the controlled accumulation period, see "Description of the
Securities--Description of the Notes--Principal Payments," "Maturity
Considerations--Controlled Accumulation" and "Description of the
Securities--Description of the Series Certificate--Controlled Accumulation"
in this supplement.
Shortfalls in Expected Cashflows
If the funds available in the principal funding account and paid to the
owner trust on the scheduled Class A payment date are insufficient to pay
Class A principal in full, the owner trust will use the available funds to
pay in part each of the outstanding Class A notes. On each subsequent
payment date, the owner trust will apply all principal allocations it
receives on the series certificate to the further payment of each of the
outstanding Class A notes until they have been paid in full.
If Class A remains outstanding on the scheduled Class B payment date, the
owner trust will use the principal collections it receives from the master
trust to pay Class A until Class A has been paid in full. If the principal
collections remaining after Class A has been paid in full are insufficient
to pay Class B in full, the owner trust will use those funds to pay in part
each of the outstanding Class B notes. On each subsequent payment date, the
owner trust will apply all principal allocations it receives on the series
certificate to the further payment of each of the outstanding Class B notes
until they have been paid in full. If Class A or Class B remains
outstanding on the scheduled Class C payment date, the owner trust will use
the principal collections it receives from the master trust to pay Class A
and Class B until Class A and Class B have been paid in full. If the
available funds remaining after Class A and Class B have been paid in full
are insufficient to pay Class C in full, the owner trust will use those
funds to pay in part each of the outstanding Class C notes. On each
subsequent payment date, the owner trust will apply all principal
allocations it receives on the series certificate to the further payment of
each of the outstanding Class C notes until they have been paid in full.
For more information on shortfalls in expected cashflows, see "Description
of the Securities--Description of the Notes--Principal Payments" in this
supplement.
Optional Redemption
Card Funding, as transferor of the receivables to the master trust, has the
right, but not the obligation, to purchase the series certificate, and
cause the payment in full of the outstanding notes, when the outstanding
amount of the series certificate is less than or equal to 5% of the amount
of the series certificate at the closing date. If Card Funding exercises
its right to purchase the series certificate, the purchase price received
by the owner trust will be used to redeem the outstanding notes. The
redemption price for any note will equal the sum of the outstanding
principal amount of the note plus the accrued but unpaid interest on the
note at the redemption date.
For more information with respect to optional redemption of the notes, see
"Description of the Securities--Description of the Notes--Optional
Redemption" in this supplement and "Description of the
Securities--Description of the Series Certificates--Optional Repurchase" in
the attached prospectus.
Allocation of Net Losses; Credit Enhancement
The series certificate represents an interest in both collections and net
losses on the receivables in the master trust portfolio. The Class A and
Class B notes, however, feature credit enhancement by means of the
subordination of other interests, which provides the Class A and Class B
notes with a measure of protection from net losses and shortfalls in cash
flow. Class C has the benefit of a spread account that is available to
reimburse any losses that Class C may suffer.
The master trust will allocate a portion of net losses on the receivables
in the master trust portfolio to the series certificate. Finance charge
collections allocated to the series certificate ordinarily will be used to
pay interest on the notes, to fund the servicing fee with respect to Series
200 - and then to cover the portion of net losses allocated to the series
certificate. If finance charge collections are insufficient to make all
required payments and reimbursements in any month, shared finance charge
collections from other series, if any, may be used to make up the
shortfall.
If those amounts are not sufficient, reallocated principal collections may
be used to make up the shortfall, but in that event the outstanding amount
of the series certificate will be reduced by the amount of the reallocated
principal. Any reduction in the outstanding amount of the series
certificate may be reinstated on subsequent payment dates by application of
any finance charge collections remaining after payment of all other
required amounts.
If any reduction of the outstanding amount of the series certificate is not
reinstated, the owner trust will not receive sufficient principal
allocations for the redemption or repayment of the entire aggregate
principal amount of the notes. In that event, the owner trust will first
pay the principal of Class A, then the principal of Class B, and finally
pay the principal of Class C. In this manner, Class C will be subordinated
to Class A and Class B, and Class B will be subordinated to Class A.
Class C will have the benefit of the spread account maintained by the owner
trust. The master trust will make payments to the owner trust out of
available finance charge collections on the receivables in order to fund
the spread account. If payments of principal and finance charge collections
on the series certificate are insufficient to pay the principal and
interest due on Class C, the owner trust will use the funds on deposit in
the spread account, if any, to make up the shortfall.
For more information on allocation of losses, see "Description of the
Securities--Description of the Notes--Subordination" in this supplement.
For more information with respect to the use of the spread account for
payments to Class C, see "Description of the Securities--Description of the
Notes--Owner Trust Spread Account" in this supplement.
Minimum Yield on the Receivables; Events of
Default and Acceleration of Maturity
The owner trust will begin to repay the principal of the notes before their
scheduled payment dates if the finance charge collections on the
receivables in the master trust portfolio are too low. The minimum amount
of collections for any month, referred to as the base rate, is the sum of
the interest payable on the notes for the related interest period, plus the
servicing fee allocated to the series certificate for the related month. If
the average net yield for the master trust portfolio, after deducting net
loss amounts, for any three consecutive months is less than the average
base rate for the same three consecutive months, a pay out event will occur
with respect to the series certificate and the master trust will begin a
rapid amortization of the series certificate through payment of all
allocated principal to the owner trust. The owner trust, in turn, will use
the proceeds of any rapid amortization to repay the notes in full or in
part as described above under "--Shortfalls in Expected Cashflows."
The series certificate is also subject to several other pay out events,
which could cause the start of a rapid amortization of the series
certificate. Also, the notes are subject to certain events of default,
which could result in the acceleration of the maturity of the notes. These
other events are summarized under the headings "Description of the
Securities--Description of the Series Certificate--Pay Out Events" and
"--Description of the Notes--Events of Default" in this supplement.
For more information on pay out events, the portfolio yield and base rate,
early principal repayment and redemption and rapid amortization, see
"Maturity Considerations--Rapid Amortization Period," "Description of the
Securities--Description of the Series Certificate--Pay Out Events" and
"--Description of the Notes--Principal Payments" and "--Optional
Redemption" in this supplement and "Description of the
Securities--Description of the Series Certificates--Principal Allocations"
and "--Final Payment of Principal; Series Termination" in the attached
prospectus.
Tax Status of Class A, Class B, Class C and Chase
Credit Card Master Trust
Simpson Thacher & Bartlett, tax counsel to Card Funding, is of the opinion
that:
o under existing laws the Class A, Class B and Class C notes will be
characterized as debt for U.S. federal income tax purposes, and
o neither Chase Credit Card Owner Trust 200 - nor the Chase Credit
Card Master Trust will be an association or publicly traded
partnership taxable as a corporation for U.S. federal income tax
purposes.
For further information regarding the application of
U.S. federal income tax laws, see "Tax Matters" in the
attached prospectus.
ERISA Considerations
Subject to important considerations described under "Employee Benefit
Plan Considerations" in the attached prospectus, each class of notes will
be eligible for purchase by persons investing assets of employee benefit
plans or individual retirement accounts.
For further information regarding the application of ERISA, see
"Employee Benefit Plan Considerations" in the attached prospectus.
Mailing Address and Telephone Number of
Principal Executive Offices
The mailing address of Chase USA Card Funding LLC is White Clay Center
Building 200, Route 273, Newark, Delaware 19711, and its telephone number
is . The mailing address of Chase Manhattan Bank USA, National Association
is White Clay Center Building 200, Route 273, Newark, Delaware 19711, and
its telephone number is (302) 575-5000.
SELECTED MASTER TRUST PORTFOLIO SUMMARY DATA
The chart below shows the geographic distribution of the receivables in the
master trust portfolio among the 50 states and the District of Columbia.
Other than the states specifically shown in the chart, no state accounts
for more than 5% of receivables in the master trust portfolio.
[GRAPHIC OMITTED]
IGT: "74454piechart.eps"
The chart below shows the percentages of the receivables in the master
trust portfolio arising under accounts within the age brackets shown.
[GRAPHIC OMITTED]
IGT: "74454barchart.eps"
The chart below shows the master trust yield, payment rate and net
charge-off rate for the master trust portfolio for each month from July
1999 to September 2001.
[GRAPHIC OMITTED]
IGT: "74568datachart.eps"
"Master trust yield" for any month means the total amount of collected
finance charges and interchange fees allocated to Chase Credit Card Master
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 amount of "net charge-offs" 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.
RISK FACTORS
The following is a summary of all material risks that apply to an
investment in the notes. The remainder of this supplement and the attached
prospectus provide much more detailed information about these risks. You
should consider the following risk factors in light of your investment
strategy in deciding whether to purchase the notes.
You May Receive Principal If the average master trust net yield
Payments Earlier or Later Than allocated to Series 200_ - called
the Scheduled Maturity Date portfolio yield - for any three
if the Portfolio Yield is Reduced consecutive months is less than the
amount of interest payable on the
notes for the related interest
period, plus the servicing fee
allocated to the series certificate
averaged for the same three
consecutive months, a pay out event
will occur for the series certificate
for your series. The master trust
then will commence a rapid
amortization of the series
certificate and the master trust will
begin making payments of principal to
the indenture trustee who holds the
series certificate for your benefit.
As a result, you will receive
principal allocations from the
indenture trustee earlier than the
scheduled principal allocation date
of your notes. Additionally, if
principal collections on receivables
allocated to other series are
available for application to a rapid
amortization of your securities, a
rapid amortization may be
substantially shortened. Because of
the potential for early repayment if
the portfolio yield on the
receivables falls below the minimum
amount, any circumstances that tend
to reduce the portfolio yield
increase the risk of early repayment
of your notes.
The following four factors could
result in reduced portfolio yield:
Chase USA and other Originators Chase USA and any other originator
May Change the Terms and will transfer to Card Funding who will
Conditions of the Accounts in turn transfer to the master trust
receivables arising under specified
credit card accounts, but Chase USA
and any such other originator will
continue to own those accounts. As
the owner of those accounts, Chase
USA and any such other originator
retain the right to change various
terms and conditions of those
accounts, including finance charges
and other fees it charges and the
required minimum monthly payment.
Chase USA and any such other
originator may change the terms of
the accounts to maintain its
competitive position in the credit
card industry. Changes in the terms
of the accounts may reduce the amount
of receivables arising under the
accounts, reduce the amount of
collections on those receivables, or
otherwise alter payment patterns. See
"Description of the
Securities--Description of the Series
Certificates--Addition of Master
Trust Assets" and "Chase USA's Credit
Card Activities--Billing and
Payments" in the attached prospectus.
Securities Interest Rate and Finance charges on some of the accounts
Receivables Interest Rate May in the master trust accrue at a
Reset at Different Times variable rate above a stated prime
rate or other index under the terms
of the agreement with the cardholder.
The interest rate of your note is
based on LIBOR. Changes in LIBOR
might not be reflected in the prime
rate or other index, resulting in a
higher or lower spread, or
difference, between the amount of
collections of finance charge
receivables on the accounts and the
amounts of interest payable on your
notes and other amounts required to
be funded out of collections of
finance charge receivables.
Finance charges on some of the
accounts in the master trust accrue
at a fixed rate. If LIBOR increases,
the interest payments on your notes
and other amounts required to be
funded out of collections of finance
charge receivables will increase,
while the amount of collections of
finance charge receivables on the
accounts will remain the same unless
and until the fixed rates on the
accounts are reset.
A decrease in the spread between
collections of finance charge
receivables and those allocated to
make interest payments on your notes
could reduce the portfolio yield and
increase the risk of early repayment
of the series certificate and early
repayment of your notes as described
above.
Changes to Consumer Protection Federal and state consumer protection
Laws May Impede the Servicer's laws regulate the creation and
Collection Efforts enforcement of consumer loans,
including credit card accounts and
receivables. Changes or additions to
those regulations could make it more
difficult for the servicer of the
receivables to collect payments on
the receivables or reduce the finance
charges and other fees that we can
charge on credit card account
balances, resulting in reduced
collections. See "Description of the
Securities--Description of the Series
Certificates--Pay Out Events" in the
attached prospectus.
Receivables that do not comply with
consumer protection laws may not be
valid or enforceable in accordance
with their terms against the obligors
on those receivables. Card Funding
makes representations and warranties
relating to the validity and
enforceability of the receivables in
the master trust. Chase USA makes
parallel representations and
warranties to Card Funding. No other
party will make any examination of
the receivables or the related
records for the purpose of
determining the presence or absence
of defects, compliance with
representations and warranties, or
for any other purpose. The only
remedy if any of Card Funding's
representations or warranties is
violated, and the violation continues
beyond the period of time allowed to
correct the violation, is that Card
Funding must accept reassignment of
the receivables affected by the
violation. See "Certain Legal Aspects
of the Receivables--Consumer
Protection Laws" in the attached
prospectus.
Cardholders May Make Principal The receivables transferred to the
Payments at Any Time master trust may be repaid by
cardholders at any time. We cannot
assure the creation of additional
receivables in the master trust's
accounts or that any particular
pattern of cardholder payments will
occur. A significant decline in the
amount of new receivables generated
by the accounts in the master trust
could result in reduced amounts of
collections in the master trust
portfolio and could increase the risk
of early repayment of the series
certificate and early repayment of
your notes as described above. See
"Maturity Considerations" in this
supplement.
Allocations of Charged-Off JPMorgan Chase Bank as servicer will
Receivables Could Reduce write off the receivables arising in
Payments to You accounts in the master trust
portfolio if the receivables become
uncollectible or are otherwise more
than 180 days past due. The series
certificate for your series will be
allocated a portion of these
charged-off receivables. If the
amount of charged-off receivables
allocated to the series certificate
for your series exceeds the amount of
funds available for reimbursement of
those charge-offs, the owner trust as
the holder of the series certificate
for your series may not receive the
full amount of principal and interest
due to it by the scheduled note
payment date for your notes and you
may suffer a loss in the repayment of
your principal. See "Chase Credit
Card Master Trust
Portfolio--Delinquency and Loss
Experience" and "Description of the
Securities--Description of the Series
Certificate--Reallocation of Cash
Flows," "--Application of
Collections" and "--Defaulted
Receivables" in this supplement.
Issuance of Additional Series Chase Credit Card Master Trust, as a
by the Master Trust May Affect master trust, may issue series of
the Timing of Payments to You certificates from time to time. The
master trust may issue an additional
series certificate with terms that
are different from the series
certificate for your series without
your prior review or consent. It is a
condition to the issuance of each new
series certificate that each rating
agency that has rated an outstanding
series confirm in writing that the
issuance of the new series will not
result in a reduction or withdrawal
of its rating of any class of any
outstanding series or of any series
of securities. The rating agency
confirmation will be based primarily
on the master trust's ability to pay
principal by the final note payment
date and interest on each payment
date, but the rating agency will not
consider how the terms of a new
series could otherwise affect the
timing and amounts of payments on
your series. See "Description of the
Securities--Description of the Series
Certificates--Issuing New Series
Certificates" in the attached
prospectus.
Card Funding May Add Accounts In addition to the accounts already
with Different Terms to the designated for the master trust, Card
Master Trust Portfolio Funding is permitted to designate
additional accounts of Chase USA or
another originator and transfer the
related receivables to the master
trust. Any newly designated accounts
and receivables may have different
terms and conditions than the
receivables already in the master
trust, such as higher or lower fees
or interest rates, or longer or
shorter principal allocation terms.
Credit card accounts purchased by
Chase USA may be designated as
additional accounts if conditions in
the pooling and servicing agreement
are satisfied. Credit card accounts
purchased by Chase USA will have been
created using the account
originator's underwriting criteria,
not those used by Chase USA. The
account originator's underwriting
criteria may be more or less
stringent than those of Chase USA.
The new receivables may produce
higher or lower collections or
charge-offs over time than the
receivables already in the master
trust and could tend to reduce the
amount of collections allocated to
the series certificate for your
series. See "Description of the
Securities--Description of the Series
Certificates--Addition of Master
Trust Assets" in the attached
prospectus.
Card Funding May Not Be Able If Card Funding's percentage interest
to Add New Accounts When in the receivables in the master
Required under the Pooling trust falls to 7% or less, Card
and Servicing Agreement Funding will exercise its right to
require Chase USA to maintain that
level by designating additional
accounts for the master trust
portfolio and transferring the
receivables in those accounts to the
master trust. Chase USA may not have
any additional accounts to add at
that time. Card Funding will not be
able to designate for the master
trust any receivables relating to
additional accounts to make up the
shortfall if Chase USA does not
designate additional accounts under
the receivables purchase agreement.
If Chase USA fails to add accounts
when required, a "pay out event" will
occur and you could receive payment
of principal sooner than you
expected. See "Description of the
Securities--Description of the Series
Certificates--Addition of Master
Trust Assets" in the attached
prospectus.
Insolvency or Bankruptcy of Chase USA accounts for the transfer
Chase USA Could Result in of receivables by Chase USA to Card
Accelerated, Delayed or Funding and by Card Funding to the
Reduced Payments to You master trust as a sale. However, a
court could conclude that Chase USA
or Card Funding still owns the
receivables and that the master trust
holds only a security interest. If a
court concludes that the transfer to
the master trust is only a grant of a
security interest in the receivables,
a tax or government lien on our
property arising before new
receivables come into existence may
have priority over the master trust's
interests in those receivables. See
"Certain Legal Aspects of the
Receivables--Transfer of Receivables"
and "Description of the
Securities--Description of the Series
Certificates--Chase USA's
Representations and Warranties" in
the attached prospectus.
Chase USA is chartered as a national
banking association and is subject to
regulation and supervision by the
Office of the Comptroller of the
Currency. If Chase USA becomes
insolvent, is in an unsound condition
or engages in violations of its
bylaws or regulations, the
Comptroller is authorized to appoint
the FDIC as conservator or receiver.
Under such circumstances, the FDIC
could:
o require the master trust
trustee to go through an
administrative claims
procedure to establish its
right to payments collected
on the receivables in the
master trust,
o request a stay of
proceedings with respect to
the master trust's claims
against Chase USA, or
o repudiate without
compensation Chase USA's
ongoing obligations under
the pooling and servicing
agreement, such as the duty
to collect payments or
otherwise service the
receivables or to provide
administrative services to
the owner trust.
If the FDIC were to take any of those
actions, payments of principal and
interest on your notes could be
delayed or reduced.
By statute, the FDIC as conservator
or receiver is authorized to
repudiate any "contract" of Chase USA
upon payment of "actual direct
compensatory damages." This authority
may be interpreted by the FDIC to
permit it to repudiate the transfer
of receivables to the master trust.
Under an FDIC regulation, however,
the FDIC as conservator or receiver
will not reclaim, recover, or
recharacterize a bank's transfer of
financial assets if certain
conditions are met, including that
the transfer qualifies for sale
accounting treatment, was made for
adequate consideration, and was not
made fraudulently, in contemplation
of insolvency, or with the intent to
hinder, delay, or defraud the bank or
its creditors. Chase USA believes the
FDIC regulation applies to the
transfer of receivables under the
receivables purchase agreement and
the pooling and servicing agreement
and that the conditions of the
regulation have been satisfied.
If a condition required under the
FDIC regulation, or other statutory
or regulatory requirement applicable
to the transaction, were found not to
have been satisfied, the FDIC as
conservator or receiver might refuse
to recognize Chase USA's transfer of
the receivables to Card Funding and
Card Funding's transfer of the
receivables to the master trust. In
that event the master trust could be
limited to seeking recovery based
upon its security interest in the
receivables. The FDIC's statutory
authority has been interpreted by the
FDIC and at least one court to permit
the repudiation of a security
interest upon payment of actual
direct compensatory damages measured
as of the date of conservatorship or
receivership. Such damages do not
include damages for lost profits or
opportunity, and no damages would be
paid for the period between the date
of conservatorship or receivership
and the date of repudiation. The FDIC
could delay its decision whether to
recognize Chase USA's transfer of the
receivables for a reasonable period
following its appointment as
conservator or receiver for the bank.
If the FDIC were to refuse to
recognize Chase USA's transfer of the
receivables, payments of principal
and interest on your notes could be
delayed or reduced. See "Certain
Legal Aspects of the
Receivables--Certain Matters Relating
to Receivership" in the attached
prospectus.
If a conservator or receiver were
appointed for Chase USA or a
bankruptcy trustee were appointed for
Card Funding, then a "pay out event"
would occur for all outstanding
series under the terms of the pooling
and servicing agreement, which may
cause payment of the notes earlier
than scheduled. New principal
receivables would not be transferred
to the master trust and the master
trust trustee would sell the
receivables unless holders of more
than 50% of the investor interest of
each class of outstanding
certificates gave the master trust
trustee other instructions. The
master trust would then terminate
earlier than was planned and you
could have a loss if the sale of the
receivables produced insufficient net
proceeds to pay you in full. The
conservator or receiver or the
bankruptcy trustee may nonetheless
have the power:
o regardless of the terms of
the pooling and servicing
agreement, (a) to prevent
the beginning of a rapid
amortization period, (b) to
prevent the early sale of
the receivables and
termination of the master
trust or (c) to require new
principal receivables to
continue being transferred
to the master trust, or
o regardless of the
instructions of the
certificateholders, (a) to
require the early sale of
the receivables, (b) to
require termination of the
master trust and retirement
of the certificates or (c)
to prohibit the continued
transfer of principal
receivables to the master
trust.
In addition, if the servicer defaults
on its obligations under the pooling
and servicing agreement solely
because a conservator or receiver is
appointed for it, the conservator or
receiver might have the power to
prevent either the master trust
trustee or the holders of securities
issued by the master trust from
appointing a new servicer under the
pooling and servicing agreement. See
"Certain Legal Aspects of the
Receivables--Certain Matters Relating
to Receivership" in the attached
prospectus.
You Will Have Limited Control You will have limited voting rights
of Owner Trust and Master Trust relating to actions of the owner
Actions trust and indenture trustee. You will
not have the right to vote to direct
the master trust trustee to take any
actions other than the right to vote
to declare a pay out event or a
servicer default.
You May Not Be Able to The underwriters may assist in
Resell Your Notes resales of any class of the notes but
they are not required to do so. A
secondary market for your notes may
not develop. If a secondary market
does develop, it might not continue
or it might not be sufficiently
liquid to allow you to resell your
notes.
Repayment of Your Notes The owner trust will not have any
is limited to the Owner significant assets other than the
Trust Assets series certificate, the owner trust
spread account and the note
distribution account. As a result,
you must rely only on those assets
for repayment of your notes. Although
the owner trust may be required to
sell the series certificate following
a pay out event, we cannot assure you
that the proceeds of a sale of the
series certificate will be sufficient
to pay the interest or principal due
to you. Additionally, the sale of the
series certificate is subject to
restrictions on transfer that may
delay the payment on your notes.
Class B Bears Losses Class B is subordinated to Class A.
Before Class A Principal allocations to Class B will
not begin until Class A has been paid
in full. If principal collections
allocated to the series certificate
are reallocated to make interest
allocations and not reimbursed, the
full amount of Class B principal may
not be repaid. If receivables had to
be sold, the net proceeds of that
sale available to pay principal on
the notes would be paid first to
Class A before any remaining net
proceeds would be available for
payments due to Class B. See
"Description of the Securities--
Description of the Notes--Subordination"
in this supplement.
Class C Bears Losses Class C is subordinated to Class A
Before Class A and and Class B. Principal allocations to
Class B Class C will not begin until Class A
and Class B have been paid in full.
If principal collections allocated to
the series certificate are
reallocated to make interest
allocations and not reimbursed, the
full amount of Class C principal may
not be repaid. If receivables had to
be sold, the net proceeds of that
sale available to pay principal would
be paid first to Class A, then to
Class B, before any remaining net
proceeds would be available for
payments due to Class C. See
"Description of the
Securities--Description of the
Notes--Subordination" in this
supplement.
CHASE CREDIT CARD MASTER TRUST PORTFOLIO
Defined terms are indicated by boldface type. Both the attached
prospectus and this supplement contain a glossary of important terms where
definitions can be found.
General
The assets of the master trust include credit card receivables
generated through accounts that Chase USA and Card Funding have designated
as master trust accounts. The master trust accounts are accounts designated
when the master trust was established and additional accounts that have
been designated since that time. Card Funding is permitted to add accounts,
and at times is required to add accounts, to the master trust. Card Funding
can remove accounts from the master trust if the conditions to removal are
satisfied. As a result, the composition of the master trust is expected to
change over time. See "The Receivables" in the attached prospectus for a
general description of the receivables in the master trust.
Delinquency and Loss Experience
The following table provides you with delinquency experience for the
Master Trust Portfolio as of the indicated dates. Number of Days Delinquent
means the number of days after the first billing date following the
original billing date; 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.
Delinquency Experience
Master Trust Portfolio
(dollar amounts in millions)
As of September 30, As of December 31,
2001 2000
---------------------------------------- --------------------------------------
Percentage Percentage
Number of Days Delinquent of Total Delinquent of Total
Delinquent Amount Receivables Amount Receivables
- ---------------------------- ------------------ ------------------- ------------------ -----------------
30 to 59 Days............... $355 1.52% $306 1.39%
60 to 89 Days............... 243 1.04% 242 1.10%
90 Days or More............. 435 1.86% 477 2.17%
------------------ ------------------- ------------------ -----------------
TOTAL.................. $1,032 4.42% $1,025 4.66%
================== =================== ================== =================
As of December 31, As of December 31,
1999 1998
30 to 59 Days............... $257 1.29% $264 1.49%
60 to 89 Days............... 185 0.92% 177 1.00%
90 Days or More............. 393 1.97% 369 2.08%
------------------ ------------------- ------------------ -----------------
TOTAL.................. $1,837 8.60% $1,835 9.23%
================== =================== ================== =================
The following table provides you with loss experience for the Master
Trust Portfolio for the indicated periods. Average Principal Receivables
Outstanding is the average of the beginning of the month balance of master
trust 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 of any
reductions in Average Principal Receivables Outstanding due to fraud,
returned goods or customer disputes. The percentage shown for the nine
months ended September 30, 2001 is annualized.
Loss Experience
Master Trust Portfolio
(dollar amounts in millions)
Nine Months
Ended September 30, Year Ended December 31,
----------------------------- -----------------------------------
2001 2000 1999 1998
----------------------------- ---------- --------- -----------
Average Principal Receivables Outstanding.............. $20,865 $20,486 $18,332 $15,658
Gross Charge-Offs...................................... 1,017 1,161 1,120 1,109
Recoveries............................................. 63 69 75 84
Net Charge-Offs........................................ 954 1,093 1,045 1,025
Net Charge-Offs as a Percentage of Average 6.10% 5.33% 5.70% 6.55%
Receivables Outstanding............................
As of September 30, 2001, accounts 60 or more days delinquent were
2.90% of total receivables compared with 3.27% as of December 31, 2000,
2.89% as of December 31, 1999 and 3.08% as of December 31, 1998.
Delinquencies are a leading indicator of future charge-offs. For the nine
months ended September 30, 2001 net charge-offs as a percentage of average
principal receivables outstanding were 6.10% compared with 5.33% for the
year ended December 31, 2000, 5.70% for the year ended December 31, 1999
and 6.55% for the year ended December 31, 1998.
Delinquencies and charge-offs depend on a variety of factors,
including:
o general economic conditions and trends in consumer bankruptcy
filings,
o the availability of other sources of credit, and
o seasonal variations in consumer spending and borrowing patterns.
We attribute the general decrease in charge-offs in 2000 to the
following factors:
o improving general economic conditions reduced the number of
consumers that were unable to make the minimum payments on their
accounts and the number of consumers filing for bankruptcy, and
o Chase USA took steps to improve account management techniques and
made significant investments in decision support technology. These
steps include implementing refined credit scoring models, improved
collection techniques, enhanced credit line management and
underwriting.
The increase in charge-offs in the first nine months of 2001 can be
attributed primarily to increased bankruptcy filings as well as to a
general deterioration in economic conditions.
Characteristics of Receivables Portfolio
The receivables and the accounts in the Master Trust Portfolio, as of
the beginning of the day on October 1, 2001:
o included approximately $22.50 billion of Principal Receivables and
$0.90 billion of Finance Charge Receivables,
o had an average principal receivables balance of $1,691,
o had an average credit limit of $8,076, of which the average
principal receivables balance represented approximately 22%,
o represented approximately 62% of aggregate receivables in the Bank
Portfolio,
o had an average age of 98 months,
o had billing addresses in all 50 states and the District of
Columbia,
o included approximately 52% as standard accounts, representing
approximately 50% of outstanding Principal Receivables balances,
and
o included approximately 48% as premium accounts, representing
approximately 50% of outstanding Principal Receivables balances.
The following tables summarize characteristics of the Master Trust
Portfolio as of the beginning of the day on October 1, 2001. Because the
composition of the Master Trust Portfolio may change in the future, these
tables are not necessarily indicative of the composition of the Master
Trust Portfolio at any subsequent time.
Composition by Account Balance--Master Trust Portfolio
Percentage of Percentage of
Number of Total Number Receivables Total
Account Balance Accounts of Accounts Outstanding Receivables
- ----------------------------------- -------------------- ----------------- --------------------- ------------------
Credit Balance..................... 202,331 1.52% $ (28,727,272) (0.12)%
No Balance......................... 5,575,116 41.89 0 0.00
$0.01 to $1,500.00................. 3,503,401 26.32 1,654,046,034 7.07
$1,500.01 to $5,000.00............. 2,207,867 16.59 6,667,090,447 28.49
$5,000.01 to $10,000.00............ 1,440,549 10.82 10,413,782,047 44.51
$10,000.01 to $20,000.00........... 373,665 2.81 4,540,457,948 19.40
Over $20,000.00.................... 5,987 0.05 152,134,939 0.65
-------------------- ----------------- --------------------- ------------------
TOTAL......................... 13,308,916 100.00% $23,398,784,143 100.00%
==================== ================= ===================== ==================
Composition by Credit Limit--Master Trust Portfolio
Percentage of Percentage of
Number of Total Number Receivables Total
Credit Limit Accounts of Accounts Outstanding Receivables
- ----------------------------------- ------------------- ----------------- --------------------- ------------------
$0.00.............................. 574 0.0$% 47,546 0.00%
$0.01 to $1,500.00................. 700,145 5.26 416,815,746 1.78
$1,500.01 to $5,000.00............. 2,878,558 21.63 3,072,343,096 13.13
$5,000.01 to $10,000.00............ 6,169,336 46.36 9,436,451,273 40.33
Over $10,000.00.................... 3,560,303 26.75 10,473,126,482 44.76
------------------- ----------------- --------------------- ------------------
TOTAL......................... 13,308,916 100.00% $23,398,784,143 100.00%
=================== ================= ===================== ==================
Composition by Period of Delinquency--Master Trust Portfolio
Percentage of Percentage of
Number of Total Number Receivables Total
Payment Status Accounts of Accounts Outstanding Receivables
- ----------------------------------- ------------------- ------------------ ------------------- -------------------
Current............................ 12,815,576 96.29% $21,235,765,581 90.75%
1 to 29 days delinquent............ 291,009 2.19 1,130,890,723 4.83
30 to 59 days delinquent........... 77,267 0.58 355,041,648 1.52
60 to 89 days delinquent........... 46,338 0.35 242,530,683 1.04
90 days delinquent or more......... 78,726 0.59 434,555,508 1.86
------------------- ------------------ ------------------- -------------------
TOTAL......................... 13,308,916 100.00% $23,398,784,143 100.00%
=================== ================== =================== ===================
In the Composition by Account Seasoning table below, account age is
determined by the number of months elapsed since the account was originally
opened, except that for some accounts converted from standard to premium
accounts, account age is determined by the number of months since the
account was converted.
Composition by Account Seasoning--Master Trust Portfolio
Percentage of Percentage of
Number of Total Number Receivables Total
Account Age Accounts of Accounts Outstanding Receivables
- ------------------------------------ ------------------ ----------------- -------------------- -------------------
Not more than 6 Months.............. 59,764 0.45% $ 160,937,714 0.69%
Over 6 Months to 12 Months.......... 319,426 2.40 626,020,689 2.68
Over 12 Months to 24 Months......... 802,631 6.03 1,256,310,403 5.37
Over 24 Months to 36 Months......... 1,049,474 7.89 1,765,417,527 7.54
Over 36 Months to 48 Months......... 1,137,312 8.54 1,829,110,614 7.82
Over 48 Months to 60 Months......... 1,884,366 14.16 2,893,097,574 12.36
Over 60 Months to 120 Months........ 4,436,890 33.34 7,748,464,862 33.11
Over 120 Months..................... 3,619,053 27.19 7,119,424,760 30.43
------------------ ----------------- -------------------- -------------------
TOTAL.......................... 13,308,916 100.00% $23,398,784,143 100.00%
================== ================= ==================== ===================
Geographic Distribution--Master Trust Portfolio
Percentage of Percentage of
Number of Total Number Receivables Total
State Accounts of Accounts Outstanding Receivables
- ------------------------------------ --------------- ------------------ --------------------- --------------------
New York............................ 1,691,960 12.71% $ 2,907,566,295 12.43%
California.......................... 1,655,380 12.44 2,815,231,295 12.03
Texas............................... 936,313 7.04 1,850,347,068 7.91
Florida............................. 910,536 6.84 1,568,554,590 6.70
New Jersey.......................... 738,495 5.55 1,293,920,594 5.53
Illinois............................ 612,764 4.60 1,052,087,331 4.50
Ohio................................ 522,391 3.93 933,952,951 3.99
Pennsylvania........................ 492,693 3.70 805,733,032 3.44
Michigan............................ 440,842 3.31 789,554,345 3.37
Massachusetts....................... 425,230 3.20 666,239,928 2.85
Virginia............................ 292,035 2.19 535,055,034 2.29
Georgia............................. 258,895 1.95 514,004,046 2.20
North Carolina...................... 249,048 1.87 463,744,761 1.98
Maryland............................ 252,729 1.90 448,883,466 1.92
Indiana............................. 237,586 1.79 414,444,620 1.77
Connecticut......................... 217,651 1.64 385,034,352 1.65
Missouri............................ 205,891 1.55 360,541,900 1.54
Washington.......................... 186,931 1.40 357,057,805 1.53
Arizona............................. 180,719 1.36 345,204,695 1.48
Wisconsin........................... 213,386 1.60 333,496,861 1.42
Colorado............................ 181,012 1.36 316,990,577 1.35
Tennessee........................... 184,803 1.39 316,905,086 1.35
Minnesota........................... 194,728 1.46 300,657,418 1.28
Louisiana.......................... 166,280 1.25 287,740,737 1.23
Alabama............................ 151,541 1.14 278,914,183 1.19
Kentucky............................ 138,965 1.04 229,775,962 0.98
Oklahoma............................ 122,440 0.92 226,023,296 0.97
Oregon.............................. 118,021 0.89 217,794,042 0.93
South Carolina..................... 116,803 0.88 217,535,979 0.93
Nevada.............................. 93,861 0.71 196,756,435 0.84
Arkansas............................ 99,878 0.75 178,792,884 0.76
Kansas.............................. 92,289 0.69 166,633,431 0.71
Mississippi......................... 86,031 0.65 152,481,072 0.65
Iowa................................ 92,392 0.69 144,077,430 0.62
New Hampshire....................... 69,312 0.52 121,458,425 0.52
New Mexico.......................... 62,984 0.47 118,508,277 0.51
Rhode Island........................ 67,054 0.50 106,549,157 0.46
West Virginia....................... 63,212 0.47 104,073,021 0.44
Maine............................... 57,998 0.44 101,056,781 0.43
Nebraska........................... 55,826 0.42 92,463,659 0.39
Hawaii.............................. 45,011 0.34 89,594,520 0.38
Utah................................ 47,195 0.35 87,534,961 0.37
Idaho............................... 35,604 0.27 64,464,656 0.28
Vermont............................. 31,978 0.24 60,417,086 0.26
Montana............................. 33,733 0.25 58,765,225 0.25
Delaware............................ 29,915 0.22 58,274,746 0.25
Washington, D.C..................... 26,230 0.20 50,107,306 0.21
Alaska.............................. 19,655 0.15 43,461,285 0.19
South Dakota........................ 22,494 0.17 39,442,573 0.17
Wyoming............................. 20,306 0.15 36,617,503 0.16
North Dakota........................ 20,688 0.16 34,382,783 0.15
Other............................... 39,202 0.29 59,878,678 0.26
--------------- ------------------ --------------------- --------------------
TOTAL.......................... 13,308,916 100.00% $23,398,784,143 100.00%
=============== ================== ===================== ====================
MATURITY CONSIDERATIONS
Each class of notes is scheduled to receive principal as follows:
o the Class A Scheduled Note Payment Date is the Payment Date, following the Controlled Accumulation
Period,
o the Class B Scheduled Note Payment Date is the Payment Date, following payment of Class A, and
o the Class C Scheduled Note Payment Date is the Payment Date, following payment of Class B.
Controlled Accumulation
Principal for payment to Class A will accumulate in the Principal
Funding Account during the Controlled Accumulation Period. The Controlled
Accumulation Period is scheduled to begin at the close of business on the
last day of the Monthly Period, but may be delayed based on recent payment
rate experience and the amount of principal collections expected to be
available for sharing from other series. On each Transfer Date during the
Controlled Accumulation Period, the master trust trustee shall deposit into
the Principal Funding Account for the benefit of the Class A noteholders,
the least of:
o Available Investor Principal Collections,
o the Controlled Deposit Amount, and
o Adjusted Investor Interest before any deposits on that Transfer
Date.
The length of the Controlled Accumulation Period may be adjusted if
the servicer believes that, based on expected collections of principal,
Class A is expected to be fully repaid on its Scheduled Note Payment Date.
Whether or not the Controlled Accumulation Period is shortened, we can give
no assurance that principal adequate to repay Class A will be available on
Class A's Scheduled Note Payment Date.
Note that if the Rapid Amortization Period begins before the
Controlled Accumulation Period, there will be no accumulation of principal.
If the Rapid Amortization Period begins during the Controlled Accumulation
Period, all principal in the Principal Funding Account will be paid to
Class A on the next Payment Date.
See "Description of the Securities--Description of the Series
Certificate--Principal Allocations" and "--Controlled Accumulation" in this
supplement for a more detailed discussion.
Principal on the Class B and Class C notes is expected to be available
for payment in one lump sum on the Payment Date. There will be no
controlled accumulation of principal collections for the Class B and Class
C notes. Principal will not be paid to Class B until Class A is fully
repaid, and no principal will be paid to Class C until Class A and Class B
are fully repaid.
Rapid Amortization Period
If a Pay Out Event occurs, a rapid amortization will begin and any
principal in the Principal Funding Account and principal allocated to the
Series Certificate will be distributed to Class A on the following Payment
Date. If Class A is not paid in full on its Scheduled Note Payment Date,
all principal allocated to the Series Certificate on each subsequent
monthly Distribution Date will be paid to Class A until Class A is fully
repaid. After Class A is repaid, any remaining principal allocated to the
Series Certificate will be paid to Class B on each monthly Distribution
Date until Class B is repaid, and finally to Class C on each monthly
Distribution Date until Class C is repaid. If charge-offs are allocated to
your class of notes and not reimbursed, principal will be paid to you only
up to your principal balance net of these charge-offs.
See "Description of the Securities--Description of the Series
Certificate--Principal Allocations" and "--Pay Out Events" in this
supplement for a more detailed discussion.
Historical Payment Rates
The following table provides you with the highest and lowest
cardholder monthly payment rates for the Master Trust Portfolio during any
month in the periods shown, and the average cardholder monthly payment rate
for all months in the periods shown. These payment rates are calculated as
total payments collected during each month, including recoveries on
previously charged-off receivables, expressed as a percentage of total
outstanding master trust receivables at the beginning of the month. Monthly
averages are shown as an arithmetic average of the payment rate for each
month during the indicated period. Payment rates shown in this table are
based on total cash payments toward principal and finance charges made by
cardholders whose receivables are included in the master trust.
Cardholder Monthly Payment Rates
Master Trust Portfolio
Nine Months
Ended
September 30, Year Ended December 31,
----------------------- ------------------------------------------------------
2001 2000 1999 1998
----------------------- ----------------- ---------------- -----------------
Highest Month.......................... 16.20% 15.97% 14.45% 12.70%
Lowest Month........................... 13.47% 13.81% 12.21% 10.96%
Monthly Average........................ 15.09% 14.82% 13.51% 12.11%
We can give no assurance that cardholder monthly payment rates in the
future will be similar to this historical experience. If there is a
slowdown in the payment rate below the payment rate used to determine the
amount deposited in the Principal Funding Account during the Controlled
Accumulation Period, we cannot assure you if you hold Class A notes that
there will be sufficient time to accumulate the principal collections
necessary to pay you principal on the Scheduled Note Payment Date for your
notes. If the owner trust cannot repay Class A due to insufficient funds in
the Principal Funding Account, principal payments to Class B and Class C
will be delayed since you cannot receive principal if you hold Class B or
Class C notes until Class A is fully repaid. See "Maturity Considerations"
in the attached prospectus.
RECEIVABLE YIELD CONSIDERATIONS
Gross revenues from finance charges and fees collected from accounts
designated for the Master Trust Portfolio for the nine months ended
September 30, 2001 and each of the three calendar years 2000, 1999 and 1998
are set forth in the following table. In the following table:
o Finance Charges and Fees Collected include periodic and minimum
finance charges, annual membership fees, late charges, cash
advance transaction fees, Interchange, overlimit fees and fees for
returned checks,
o Average Principal Receivables Outstanding is the average of the
beginning of the month balance of master trust Principal
Receivables outstanding,
o Yield from Finance Charges and Fees Collected is calculated as a
percentage of Average Principal Receivables Outstanding,
o historical yield figures are calculated on a cash collections
basis, and
o the yield percentage for the nine months of 2001 is annualized.
Portfolio Yield
Master Trust Portfolio
(dollar amounts in millions)
Nine Months
Ended
September 30, Year Ended December 31,
----------------- -----------------------------------------
2001 2000 1999 1998
----------------- ------------ ----------- -------------
Finance Charges and Fees Collected...................... $ 2,797 $ 3,820 $ 3,373 $ 2,795
Average Principal Receivables Outstanding............... $ 20,865 $20,486 $18,332 $15,658
Yield from Finance Charges and Fees Collected........... 17.87% 18.65% 18.40% 17.85%
CREATION OF THE OWNER TRUST
Card Funding, a Delaware limited liability company, and Wilmington
Trust Company, a Delaware banking corporation, as Owner Trustee will form
Chase Credit Card Owner Trust 200 - as a Delaware common law trust. The
Trust Agreement for the owner trust provides that the owner trust has been
formed for a limited purpose and may not engage in any activities other
than:
o acquiring, owning and managing the assets of the owner trust,
o issuing and making payments on the notes and the certificates of
beneficial interest in the owner trust, and
o engaging in other activities incidental to the activities
described above, as long as those activities would not be contrary
to the status of the owner trust as a "qualifying special purpose
entity" under existing accounting literature.
Because of its limited activities, the owner trust has contracted with
Chase USA to provide administrative services, including providing notices
to you and directions to the Indenture Trustee. You should refer to the
Trust Agreement and the Deposit and Administration Agreement for a complete
description of the owner trust's activities.
The owner trust's assets include:
o the Series Certificate, and
o the Owner Trust Spread Account.
Only the Class C notes will receive any benefit from the Owner Trust Spread
Account.
The owner trust will not have any other assets and payments of
principal and interest on the notes will only be made to the extent that
the master trust allocates finance charge and principal collections to the
Series Certificate.
The owner trust's address is Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001, in care of the Owner Trustee and
its telephone number at that address is (302) 651-1000.
USE OF PROCEEDS
The net proceeds from the sale of your notes will be:
o used to make a deposit into the Finance Charge Account for the
initial Interest Payment Date,
o used to make an initial deposit into the Owner Trust Spread
Account, and
o paid to Card Funding in consideration for the Series Certificate.
Card Funding will use the proceeds it receives to pay Chase USA for
receivables. Chase USA will use the proceeds it receives from Card Funding
for general corporate purposes.
DESCRIPTION OF THE SECURITIES
The following is a summary of the material provisions of the notes and
the Series Certificate for your series. This summary is not a complete
description of the terms of the notes or the Series Certificate for your
series. You should refer to "Description of the Securities" in the attached
prospectus as well as the Indenture, the Pooling and Servicing Agreement
and the Series 200 - Supplement for a complete description.
Description of the Series Certificate
The owner trust will hold the Series Certificate to be issued through
the Series 200 - Supplement. The owner trust will pledge the Series
Certificate including its allocations of principal and interest from the
master trust to the Indenture Trustee for your benefit.
General
The Series Certificate represents the right to receive its allocation
of cardholder payments which have been transferred to the master trust. The
Series Certificate will be allocated:
o a Floating Allocation Percentage of collections of Finance Charge
Receivables that will be used to pay interest on your notes,
o a Floating Allocation Percentage of Default Amounts that will
reduce your Investor Interest if not paid from collections of
Finance Charge Receivables,
o only during the Revolving Period, a Floating Allocation Percentage
of collections of Principal Receivables, and
o during the Controlled Accumulation Period or a Rapid Amortization
Period, a Fixed Allocation Percentage of Principal Receivables
that will be used to repay your principal.
The master trust trustee will also allocate to your series:
o Shared Principal Collections, and
o Excess Finance Charge Collections.
Class A will also be entitled to amounts in the Principal Funding Account
and the Accumulation Period Reserve Account as well as investment earnings
on those amounts.
The Series Certificate is included in Group I. The series listed under
"Other Series Issued and Outstanding" below are also included in Group I
and additional series issued by the master trust may also be included in
Group I.
The Series Certificate will not be subordinated to any other series of
certificates.
Interest Allocations
Interest payments on the Series Certificate for your series will be
funded from:
o finance charge receivables collected during the prior month
allocated to the Series Certificate other than Interchange used to
pay a portion of the Investor Servicing Fee,
o investment earnings on amounts deposited in the Principal Funding
Account for the prior month, and
o amounts deposited in the Accumulation Period Reserve Account but
only if necessary to pay interest to you.
The owner trust will receive the amount described above that is not
applied to:
o the Investor Servicing Fee,
o the Investor Default Amount,
o the Investor Charge-Offs and unreimbursed Reallocated Principal
Collections, and
o Excess Finance Charge Collections paid to other series.
The owner trust will receive these amounts on the business day
preceding the Distribution Date of each month for the Series Certificate.
Principal Allocations
Principal payments on the Series Certificate for your series will be
funded from:
o Principal Receivables allocated to the Series Certificate
collected during the prior month, minus
o Principal Receivables reallocated to other series, plus
o Shared Principal Collections allocated to your series.
During the Revolving Period, these amounts will be treated as Shared
Principal Collections and be used to pay principal to other series or to
Card Funding.
During the Controlled Accumulation Period, an amount equal to the
least of:
o Available Investor Principal Collections allocated to the Series
Certificate,
o the Controlled Deposit Amount, and
o the excess of the Class A note principal balance over the amount
on deposit in the Principal Funding Account
will be deposited in the Principal Funding Account to be paid to the owner
trust on each Transfer Date for distribution to Class A noteholders on the
Payment Date.
After payment has been made to Class A, Available Investor Principal
Collections will be available to pay Class B and Class C. There is no
Principal Funding Account for Class B and Class C.
During the Rapid Amortization Period, Available Investor Principal
Collections will be paid to the owner trust on each Transfer Date until the
Series Certificate is paid in full and will be used to pay Class A, then to
pay Class B and finally to pay Class C.
Controlled Accumulation
The Controlled Accumulation Period is scheduled to last 12 months.
However, the Servicer may extend the Revolving Period and postpone the
Controlled Accumulation Period by providing a notice to the master trust
trustee. The Servicer can extend the Revolving Period only if the number of
months needed to fund the Principal Funding Account based on expected
principal collections needed to pay principal on Class A is less than 12
months. On each determination date from the determination date until the
Controlled Accumulation Period begins, the Servicer will review the amount
of expected principal collections until Class A's Scheduled Note Payment
Date and may elect to postpone the Controlled Accumulation Period. In
making this determination, the Servicer is required to assume that the
principal payment rate will be no greater than the lowest monthly payment
rate for the prior 12 months and will consider the amount of principal
expected to be allocable to certificateholders of all other series which
are not expected to be amortizing or accumulating principal. In no case
will the Controlled Accumulation Period be reduced to less than one month.
Allocation Percentages
The master trust trustee will use the Floating Allocation Percentage
to allocate to the Series Certificate collections of Finance Charge
Receivables and Default Amounts at any time and collections of Principal
Receivables during the Revolving Period. The Floating Allocation Percentage
for each month will equal a fraction:
- the numerator of which is equal to the Adjusted Investor
Interest, and
- the denominator of which is equal to the greater of:
o the sum of the amount of Principal Receivables in the
master trust and any amount on deposit in the Excess
Funding Account as of the close of business on the last
day of the prior month (or, in the case of the first
monthly period, the amount of Principal Receivables as of
the close of business on the day immediately preceding
the Closing Date), and
o the sum of the numerators used to calculate the Investor
Percentages for allocations of Finance Charge
Receivables, Default Amounts or Principal Receivables for
other master trust series outstanding.
The master trust trustee will use the Fixed Allocation Percentage to
allocate to the Series Certificate collections of Principal Receivables
during the Controlled Accumulation Period and the Rapid Amortization
Period.
o The Fixed Allocation Percentage for each month will equal a
fraction:
- the numerator of which is equal to the Investor Interest as of
the last day of the Revolving Period, and
- the denominator of which is equal to the greater of:
o the sum of the amount of Principal Receivables in the
master trust and any amount on deposit in the Excess
Funding Account as of the close of business on the last
day of the prior month, and
o the sum of the numerators used to calculate the Investor
Percentage for allocations of Principal Receivables for
other master trust series outstanding.
When there has been an addition or removal of receivables during the prior
month, the denominator used to determine these percentages will be
adjusted.
Reallocation of Cash Flows
On each Transfer Date, the Servicer will allocate principal
collections to pay Class A and Class B interest and the Net Investor
Servicing Fee in an amount equal to the Reallocated Principal Collections.
If Reallocated Principal Collections are greater than zero, then
principal collections allocated to the Investor Interest will be treated as
finance charge collections and be available to pay Class A and B interest
and the Net Investor Servicing Fee and the Investor Interest will be
reduced accordingly. A reduction in the Investor Interest will reduce the
allocation of finance charge and principal collections to the Series
Certificate.
Application of Collections
On each Transfer Date, the Servicer will direct the master trust
trustee to apply Available Investor Finance Charge Collections from the
prior month in the following order:
o deposit an amount equal to the Class A Interest Requirement for
the related Distribution Date into the Note Distribution Account
for distribution to the owner trust on that Distribution Date,
o deposit an amount equal to the Class B Interest Requirement for
the related Distribution Date into the Note Distribution Account
for distribution to the owner trust on that Distribution Date,
o pay an amount equal to the Net Investor Servicing Fee plus the
amount of any overdue Net Investor Servicing Fee, to the Servicer,
o deposit an amount equal to the Net Class C Interest Requirement
for the related Distribution Date into the Note Distribution
Account for distribution to the owner trust on that Distribution
Date,
o treat an amount equal to the Investor Default Amount, if any, for
the related Monthly Period, as Available Investor Principal
Collections and deposit it into the Principal Account,
o treat an amount equal to the sum of the Investor Charge-Offs and
the amount of unreimbursed Reallocated Principal Collections as
Available Investor Principal Collections and deposit it into the
Principal Account,
o deposit into the Accumulation Period Reserve Account on and after
the Reserve Account Funding Date, but prior to the date on which
the Accumulation Period Reserve Account terminates an amount equal
to the excess, if any, of the Required Accumulation Period Reserve
Account Amount over the Available Accumulation Period Reserve
Account Amount, and
o pay to the owner trust an amount equal to the excess, if any, of
the Required Owner Trust Spread Account Amount over the amount
then on deposit in the Owner Trust Spread Account.
All remaining amounts will be treated as Excess Finance Charge Collections
and will be available to cover any shortfalls in finance charge collections
for other outstanding series. After payment of shortfalls, the remaining
amount will be paid to the owner trust as the holder of the Series
Certificate.
The following diagram provides you with an outline of the allocation
of finance charge receivables. This diagram is a simplified demonstration
of the allocation and payment provisions contained in this supplement and
the attached prospectus.
Allocations of Collections of Finance Charge Receivables
[GRAPHIC OMITTED]
IGT: "74454chart1.eps"
The Servicer will direct the master trust trustee to apply Available
Investor Principal Collections - after reallocating principal collections
to cover shortfalls in amounts payable from finance charge collections - in
the following order:
o during the Revolving Period, treat as Shared Principal Collections
and make available to cover any shortfalls in principal
collections for other outstanding series and will be shared
between series as described below under "--Shared Principal
Collections,"
o during the Controlled Accumulation Period, deposit the Controlled
Deposit Amount in the Principal Funding Account and treat any
remaining amount as Shared Principal Collections, or
o during the Rapid Amortization Period, distribute to the owner
trust to make principal payments to you.
The following diagram provides you with an outline of the allocation
of principal collections. This diagram is a simplified demonstration of the
allocation and payment provisions contained in this supplement and the
attached prospectus.
Allocations of Collections of Principal Receivables
[GRAPHIC OMITTED]
IGT: "74454chart2.eps"
Shared Excess Finance Charge Collections
Finance charge collections - and other amounts treated like finance
charge collections - in excess of the amount required to make payments or
deposits for the Series Certificate for your series will be made available
to other series included in Group I whose allocation of finance charge
collections is not sufficient to make its required payments or deposits. We
call these collections Excess Finance Charge Collections. If the Series
Certificate for your series requires more finance charge collections than
allocated through the Investor Percentage, it will have access to finance
charge collections - and other amounts treated like finance charge
collections - from other series in Group I. Each series that is part of
Group I and has a shortfall will receive a share of the total amount of
Excess Finance Charge Collections available for that month based on the
amount of shortfall for that series divided by the total shortfall for all
series for that same month.
Shared Principal Collections
Collections of Principal Receivables allocated to the Investor
Interest in excess of the Controlled Deposit Amount during the Controlled
Accumulation Period and principal payments to the owner trust, as the
holder of the Series Certificate, during the Rapid Amortization Period,
will be made available to other series whose allocation of principal
collections is not sufficient to make payments or deposits required to be
made from principal collections allocated to those series. We call these
collections Shared Principal Collections. If the Series Certificate for
your series requires more principal collections than allocated through the
Investor Percentage, it will share in the excess available from other
series in Group I. Each series that is part of Group I and has a shortfall
will receive a share of the total amount of Shared Principal Collections
available for that month based on the amount of shortfall for that series
divided by the total shortfall for all series for that same month. Shared
Principal Collections will not, however, be available to cover Investor
Charge-Offs for any series.
If Shared Principal Collections exceed shortfalls, the master trust
trustee will distribute the remaining amount to the holder of the
Transferor Certificate or, under certain circumstances, deposit it into the
Excess Funding Account.
Defaulted Receivables
The Default Amount represents the investors' share of losses from the
Master Trust Portfolio. On each Transfer Date, JPMorgan Chase Bank as
Servicer will calculate the Default Amount by multiplying:
o the Floating Allocation Percentage for that month, by
o the total amount of receivables in Master Trust Portfolio accounts
that were charged-off for that month.
If the Default Amount exceeds the amount of finance charge collections
allocated to fund this amount for the prior month, then the Investor
Interest will be reduced by the excess. If the Investor Interest is reduced
to zero, the Series Certificate will not receive any further allocations of
finance charge and principal collections. The Investor Interest will also
be reduced by the amount of any Reallocated Principal Collections used to
make interest payments to Class A and Class B. In no event, however, shall
the Investor Interest be reduced below zero. Reductions in the Investor
Interest from both of these items may be reimbursed from subsequent finance
charge collections allocated for reimbursement, if available.
Principal Funding Account
The master trust trustee will establish an account in which it will
collect principal collections (other than Reallocated Principal
Collections), including Shared Principal Collections, during the Controlled
Accumulation Period. The amounts collected will be distributed to the owner
trust to make principal payments to holders of Class A notes on Class A's
Scheduled Note Payment Date. However, if a rapid amortization occurs, those
amounts will be paid to you if you hold Class A notes on the first
Distribution Date after the Rapid Amortization Period begins. There is no
Principal Funding Account for Class B and Class C.
The Servicer will direct the master trust trustee to invest money on
deposit in this account in short-term, highly rated liquid investments
permitted under the terms of the Pooling and Servicing Agreement. As stated
above, investment earnings on these investments will be treated as finance
charge collections. We call these amounts Investor Principal Funding
Investment Proceeds. If for any month, the Investor Principal Funding
Investment Proceeds are less than the product of:
o the actual number of days in that month divided by 360,
o the balance of the Principal Funding Account as of the Record
Date, and
o the interest rate on the Class A notes in effect for that month,
then the master trust trustee will withdraw the shortfall from the
Accumulation Period Reserve Account and treat those amounts as finance
charge collections.
Accumulation Period Reserve Account
The master trust trustee will establish an account that it will use to
fund shortfalls in investment earnings on amounts in the Principal Funding
Account during the Controlled Accumulation Period. At least two months
prior to the beginning of the Controlled Accumulation Period, the master
trust trustee will begin to deposit Available Investor Finance Charge
Collections into this account until the account balance equals the Required
Accumulation Period Reserve Account Amount.
JPMorgan Chase Bank as Servicer will direct the master trust trustee
to invest money on deposit in this account in short-term, highly rated
liquid investments permitted under the terms of the Pooling and Servicing
Agreement. Investment earnings (net of expenses and losses) will be
retained in this account. The master trust trustee will withdraw money from
this account in excess of the Required Accumulation Period Reserve Account
Amount on each Transfer Date and the amount withdrawn will be used to fund
any shortfall in Investor Principal Funding Investment Proceeds.
On each Transfer Date during the Controlled Accumulation Period, and
on the first Transfer Date during the Rapid Amortization Period, the
Servicer will withdraw from the Accumulation Period Reserve Account and
treat as Available Investor Finance Charge Collections the lesser of:
o the Available Accumulation Period Reserve Account Amount, and
o the Principal Funding Investment Shortfall with respect to that
Transfer Date.
The Accumulation Period Reserve Account will be terminated on the
earliest to occur of:
o the termination date of the master trust,
o if the Controlled Accumulation Period has not begun, the first
Transfer Date after the Rapid Amortization Period has begun, and
o if the Controlled Accumulation Period has begun, the earlier of:
- the first Transfer Date with respect to the Rapid Amortization
Period, and
- the Transfer Date immediately preceding the Scheduled Principal
Allocation Commencement Date.
When this account is closed, funds in this account will be treated as
Available Investor Finance Charge Collections and used to pay interest to
you.
Pay Out Events
The Revolving Period will continue until the scheduled date for the
beginning of the Controlled Accumulation Period unless one of the events
identified in the chart below occurs. The chart also indicates whether each
listed Pay Out Event is an event that requires a majority vote of the
noteholders to declare the occurrence of a Pay Out Event. Unless otherwise
specified, Pay Out Events are declared upon their occurrence without the
necessity for a vote. Additionally, some events cause a rapid amortization
of the Series Certificate while others will cause a rapid amortization for
all series issued by the master trust and outstanding when the event
occurs.
Requires a Causes Rapid Causes Rapid
Majority Vote of Amortization of Amortization
Pay out Event Noteholders Series 200- of All Series
1. Card Funding fails to make a payment or deposit when X X
required under the Pooling and Servicing Agreement
or within five days after that date.
2. Card Funding fails to observe or perform any X X
covenant or agreement and that failure has a material
adverse effect on you and the failure continues
unremedied for 60 days after written notice to Card
Funding.
3. Card Funding makes a representation or warranty X X
that was materially incorrect when made and that
continues to be materially incorrect for 60 days after
written notice to Card Funding and as a result you
are materially and adversely affected, unless Card
Funding accepts reassignment of the related
receivables.
4. Card Funding provides materially incorrect X X
information about the master trust accounts and that
information continues to be materially incorrect for
60 days after written notice to Card Funding and as a
result you are materially and adversely affected,
unless Card Funding accepts reassignment of the
related receivables.
5. The average of the Portfolio Yields for three X
consecutive Monthly Periods is less than the average
of the Base Rates for the same period.
6. Card Funding fails to transfer receivables under X
additional accounts or participations when required under
the Pooling and Servicing Agreement.
7. A Servicer Default occurs which has a material X
adverse effect on you.
8. There are insufficient funds in the Distribution X
Account to pay the Investor Interest in full on the
second Distribution Date following the Scheduled
Principal Allocation Commencement Date.
9. Card Funding, Chase USA or any other originator X
becomes bankrupt or insolvent or enters receivership
or conservatorship.
10. Card Funding becomes unable to transfer receivables X
to the master trust in accordance with the Pooling
and Servicing Agreement or any originator
becomes unable to transfer receivables to Card
Funding in accordance with the Receivables
Purchase Agreement.
11. The master trust becomes subject to regulation as X
an"investment company" under the Investment
Company Act of 1940.
12. An Event of Default occurs under the Indenture. X
Once a rapid amortization begins, principal will begin to be
distributed to the owner trust on the first Distribution Date following the
month in which the Pay Out Event occurred or was declared. If a rapid
amortization begins, the average life of the notes you hold may be
shortened.
Servicing Fees and Expenses
The master trust trustee will pay the Servicer a 2% annual
servicing fee payable in twelve equal monthly installments. We expect to
pay half of the servicing fee from finance charge collections and half of
the servicing fee from Interchange allocated to the Investor Interest.
Interchange paid to the Servicer is limited to 1% of the Adjusted Investor
Interest. If there is not enough Interchange to pay half of the servicing
fee, none of the master trust, the Indenture Trustee nor the noteholders
will be responsible for paying the Servicer the amount of any shortfall.
The Servicer will pay expenses out of the servicing fee it
receives, including the fees and expenses of any master trust trustee and
independent certified public accountants and other fees not stated to be
paid by the master trust. JPMorgan Chase Bank as the Servicer will not be
responsible for the payment of any federal, state or local taxes on your
notes or on the Series Certificate for your series.
Description of the Notes
The following is a summary of the material terms of the notes. You
should refer to "Description of the Securities--Description of the Notes"
in the attached prospectus as well as the Indenture for a complete
description of the notes.
General
The Class A, Class B and Class C notes will be issued under an
Indenture between the owner trust and The Bank of New York, as Indenture
Trustee. The form of the Indenture has been filed as an exhibit to the
Registration Statement and a copy will be filed with the SEC after the
notes are issued. The notes are obligations of the owner trust and payments
on the notes will only be made if the owner trust receives payment on the
Series Certificate.
Notes will be issued in $1,000 denominations and integral
multiples of $1,000, are in registered form and will be available only in
book-entry form through DTC. As described in the attached prospectus, as
long as the notes are held in book-entry form, you will only be able to
transfer your notes through the facilities of DTC. You will receive
payments and notices through DTC and its participants. Payments of interest
and principal will be made to the noteholders in whose names notes are
registered on the Record Date, to the extent of available funds, on each
Payment Date.
The Record Date for the notes is the last business day of the
calendar month before the Payment Date.
Subordination
The Class B notes and the Class C notes are subordinated to the
Class A notes. Interest payments will be made to the Class A notes prior to
the Class B notes and the Class C notes. Interest payments will be made to
the Class B notes prior to the Class C notes. Principal payments to the
Class B notes will not begin until the Class A notes have been paid in
full. Principal payments to the Class C notes will not begin until the
Class A notes and the Class B notes have been paid in full. If principal
collections allocated to the Series Certificate are reallocated to pay
interest on the Class A notes, the principal amount of the Class C notes
and the Class B notes may not be repaid. If principal collections allocated
to the Series Certificate are reallocated to pay interest on the Class B
notes, the principal amount of the Class C notes may not be repaid. If
receivables are sold after an Event of Default or Pay Out Event, the net
proceeds of that sale which are available to pay principal on the notes
would be paid first to the Class A notes before any remaining net proceeds
would be available for payments due to the Class B notes or the Class C
notes.
Interest Payments
Interest will begin to accrue on the notes beginning on the
Closing Date and will be paid to you on and the 15th day of each following
month or, if that day is not a business day, on the following business day.
On each Payment Date, you will receive an interest payment based
on the interest rate for your class and the outstanding balance of your
notes as follows:
o the Class A interest rate is % per annum above one-month
LIBOR,
o the Class B interest rate is % per annum above one-month
LIBOR, and
o the Class C interest rate is % per annum above one-month
LIBOR.
The Indenture Trustee will calculate the amount of interest to be
paid to you by multiplying:
o the note balance of your class as of the last Record Date by
o the interest rate for your class by
o a fraction equal to the number of actual days for that
interest period divided by 360.
An interest period is the period from the prior Payment Date through the
day before the current Payment Date. However, the first interest period
begins on the Closing Date and ends on the day before the first Payment
Date. The owner trust will pay interest from money it received from the
Series Certificate and deposited in the Note Distribution Account. Interest
on each class of notes will be paid from amounts on deposit in the Note
Distribution Account; however, Class C interest will also be paid from the
Owner Trust Spread Account. Class A will receive interest payments prior to
Class B and Class C. Class B will receive interest payments prior to Class
C, except to the extent Class C interest payments are paid from the Owner
Trust Spread Account.
If you do not receive your interest in full on any Payment Date,
you will be paid the shortfall on a following Payment Date as well as
interest at the interest rate for your class on those unpaid amounts to the
extent of available funds.
The Indenture Trustee will determine one-month LIBOR on the second
business day prior to the beginning of each interest period by referring to
the rate for dollar deposits for one month on Telerate Page 3750 at 11 a.m.
London time. If the rate does not appear, the Indenture Trustee will
request four major banks in the London interbank market to provide quotes
for interest rates on dollar deposits for one month and will use the
arithmetic mean of the quotes. If less than two London banks provide
quotes, the Indenture Trustee will request major New York City banks to
provide quotes for interest rates on dollar deposits to be lent to European
banks for one month and will use the arithmetic mean of the quotes. LIBOR
for the period from the Closing Date through will be determined on . The
term "business day" means (a) any day other than a Saturday, Sunday or day
on which banking institutions in New York, New York are authorized or
obligated by law or executive order to be closed or (b) for purposes of
determining LIBOR, any day (i) on which dealings in deposits in United
States dollars are transacted in the London interbank market and (ii) which
satisfies the criteria described in clause (a) above.
You can call the Indenture Trustee at 212-328-7549 to obtain the
interest rate for any class of notes for the prior and current interest
periods. The Administrator of the owner trust will also notify the
Luxembourg Stock Exchange by the first day of the interest period of the
interest rate for each class of notes and the amount of interest to be paid
to each class of notes on that date. This information will also be included
in the monthly noteholder statement.
Principal Payments
The notes will mature on the Payment Date which is the Note
Maturity Date and are required to be paid on that date.
The Class A notes are scheduled to be repaid in full on the
Payment Date from the amounts on deposit in the Principal Funding Account.
The notes may be repaid or redeemed before or after the Scheduled Note
Payment Date.
If the Class A notes are repaid, the Class B notes will be repaid
in full on the Payment Date.
If the Class A and Class B notes are repaid, the Class C notes
will be repaid in full on the Payment Date.
The Indenture Trustee is required to use the amount on deposit in
the Note Distribution Account to pay principal on the Scheduled Note
Payment Date for each class of notes. If there is an outstanding principal
balance of any class of notes after its Scheduled Note Payment Date,
principal will be paid on the following Payment Dates until the full
balance is repaid. After an Event of Default has been declared, if the
Indenture Trustee and the noteholders determine that the principal amount
of the notes is due and payable, such amounts will be paid to each class in
order of seniority. If the full balance is not repaid by the Note Maturity
Date, an Event of Default will be declared. You may suffer a loss if
principal is not repaid to you by the Note Maturity Date.
Optional Redemption
The owner trust will redeem the notes if the Transferor exercises
its option to purchase the Series Certificate when the Investor Interest of
the Series Certificate is less than or equal to 5% of the Investor Interest
of the Series Certificate on the Closing Date. If a redemption occurs, you
will receive your remaining principal balance plus accrued but unpaid
interest through the Payment Date on which the notes are redeemed. Please
refer to "Description of the Securities--Description of the Series
Certificates--Optional Repurchase" in the attached prospectus for a
description of the option of the Transferor to repurchase a series.
Distributions
On each Transfer Date for the Series Certificate, the master trust
trustee will allocate finance charge and principal collections to pay
interest, principal, fees and other amounts on the notes. The timing,
calculation, distribution, order, source and priority for payment of these
amounts by or on behalf of the Indenture Trustee are provided below:
o deposit the Class A Interest Requirement into the Note
Distribution Account for distribution to the Class A
noteholders on the related Payment Date,
o deposit the Class B Interest Requirement into the Note
Distribution Account for distribution to the Class B
noteholders on the related Payment Date,
o deposit the Class C Interest Requirement into the Note
Distribution Account for distribution to the Class C
noteholders on the related Payment Date,
o deposit the Class A Noteholders' Principal Distribution
Amount into the Note Distribution Account for distribution to
the Class A noteholders on the related Payment Date,
o deposit the Class B Noteholders' Principal Distribution
Amount into the Note Distribution Account for distribution to
the Class B noteholders on the related Payment Date,
o deposit the Class C Noteholders' Principal Distribution
Amount into the Note Distribution Account for distribution to
the Class C noteholders on the related Payment Date, and
o deposit into the Owner Trust Spread Account, the excess, if
any, of:
- the Required Owner Trust Spread Account Amount for such
Transfer Date over
- the amount on deposit in the Owner Trust Spread Account
on such Transfer Date, not taking into account the amount
deposited into the Owner Trust Spread Account on such
Transfer Date described by this clause.
Any remaining funds will be distributed to Card Funding as the
owner of the equity interest in the owner trust.
The Indenture Trustee can also use the funds on deposit in the
Owner Trust Spread Account to pay:
o Class C interest to Class C noteholders, and Class C
principal on or after the Class C scheduled maturity date if:
- the Class A and B notes have been repaid or
- the Investor Interest of the Series Certificate is zero.
On each Payment Date, money on deposit in the Note Distribution Account
will be distributed to you.
Owner Trust Spread Account
The Indenture Trustee will establish this account for the benefit
of the Class C Notes only. It will be funded from allocations of funds from
the Series Certificate after payment of the Class A, Class B and Class C
Interest Requirements and the Class A and Class B Noteholders' Principal
Distribution Amounts for such Transfer Date. The balance of such account
will be used to pay Class C interest and principal as described in the
preceding section. The availability of funds in this account is intended to
increase the likelihood that Class C noteholders will receive the full
amount of principal and interest owed to them and to decrease the
likelihood that Class C noteholders will suffer a loss of principal. If you
purchase Class C notes, you should note that the funds deposited in this
account are limited and may not be available when needed to make up
interest or principal shortfalls.
The required balance of the Owner Trust Spread Account will
initially equal $ and will adjust each Transfer Date to an amount equal to
the initial principal balance of the notes times a percentage based on the
average Excess Spread Percentage for the prior three months described in
the following chart.
Percentage of
Quarterly Excess Spread Percentage Initial Note Balance
- ---------------------------------- --------------------
Greater than 4.5% 1.00%
Less than or equal to 4.5% but greater than 4.25% 1.50%
Less than or equal to 4.25% but greater than 4.0% 2.00%
Less than or equal to 4.0% but greater than 3.5% 2.50%
Less than or equal to 3.5% but greater than 3.0% 3.00%
Less than or equal to 3.0% but greater than 2.5% 3.50%
Less than or equal to 2.5% but greater than or equal to 0.0% 4.00%
Less than 0.0% 9.00%
In the event a Pay Out Event (other than an Event of Default)
occurs, the Required Owner Trust Spread Account Amount will increase to
4.0%.
The balance of the Owner Trust Spread Account will never be
required to be more than the Class C Note Principal Balance.
After the Required Owner Trust Spread Account Amount has increased
as specified in the above chart, the Required Owner Trust Spread Account
Amount shall remain at that amount, unless further increased or decreased
on any Transfer Date to another specified percentage; provided, however,
that the Required Owner Trust Spread Account Amount will not be adjusted
downward until at least three months have elapsed since the later to occur
of:
o the Closing Date, and
o any previous upward adjustment in the Required Owner Trust
Spread Account Amount.
The quarterly Excess Spread Percentages used on the first three
Transfer Dates will be determined based on the performance of an existing
series for the periods before the first full Monthly Period.
The Administrator will be able to modify the method for
calculating the Required Owner Trust Spread Account Amount if the rating
agencies agree that the modification will not result in negative rating
action on the notes and an authorized officer of the Administrator
certifies to the Indenture Trustee that the modification will not result in
an Event of Default. The Administrator will not be able to modify this
formula if a Pay Out Event relating to the nonpayment of interest or
principal has occurred.
The Administrator will direct the Indenture Trustee to invest
money on deposit in this account in short-term, highly rated liquid
investments permitted under the terms of the Indenture. Investment earnings
(net of expenses and losses) will be deposited in the Note Distribution
Account and will be used to pay Class C interest.
If an Event of Default occurs because the owner trust fails to pay
interest or principal when due and payable, the Required Owner Trust Spread
Account Amount will increase to an amount equal to:
o the amount then on deposit in the Owner Trust Spread Account,
and
o the amount available on that date to be deposited in the
Owner Trust Spread Account after payments of principal and
interest on the notes,
but not greater than the outstanding principal amount of the Class C notes.
If an Event of Default occurs that is not a result of the owner trust
failing to pay interest or principal, the Indenture Trustee may, or will if
it receives written instruction from Class C noteholders representing at
least 66 2/3% of the outstanding principal amount of the Class C notes,
increase the Required Owner Trust Spread Account Amount to an amount equal
to the outstanding principal amount of the Class C notes.
Amounts in excess of the Required Owner Trust Spread Account
Amount will be distributed to Card Funding as the holder of the equity
interest in the owner trust. After the payment in full of the Class C
notes, the balance of this account will be distributed to Card Funding as
the holder of the equity interest in the owner trust.
Events of Default
Each of the following events is an Event of Default under the
Indenture:
o Class A, B or C principal is not paid on the Note Maturity
Date,
o the owner trust fails to pay interest on the notes and the
failure continues for 35 days,
o the owner trust becomes bankrupt or insolvent,
o failure to observe or perform in any material respect any
covenants or agreements contained in the Indenture and that
failure has a material adverse effect on you and the failure
continues unremedied for 60 days after written notice is
given by the Indenture Trustee or noteholders representing
greater than 50% of the outstanding balance of the notes, or
o the owner trust becomes subject to regulation as an
"investment company" under the Investment Company Act of
1940.
If an Event of Default occurs, the Indenture Trustee or the
holders of a majority of the notes may declare the notes to be immediately
due and payable. If the notes are accelerated, the Indenture Trustee can:
o begin proceedings to collect amounts due from the owner trust
or exercise other remedies available to it as a secured
party,
o foreclose on the Series Certificate,
o sell the Series Certificate in accordance with the
restrictions described in the attached prospectus and use the
proceeds from the sale to repay you, and
o allow the Owner Trustee to continue to hold the Series
Certificate and pass through any payments on the Series
Certificate to you.
If an Event of Default is declared and the notes are accelerated,
you may receive principal prior to the Scheduled Note Payment Date for your
notes.
Noteholder Reports
You will receive a monthly report from the Administrator as
described in the attached prospectus. In addition, the report will specify
if any money is withdrawn from the Owner Trust Spread Account.
So long as the notes are listed on the Luxembourg Stock Exchange,
we will publish a notice in a daily newspaper in Luxembourg that provides
the information contained in the monthly report. We expect initially to
publish the notice in the Luxemburger Wort.
If definitive notes are issued, the monthly notice will be mailed
to your address as it appears on the Indenture Trustee's register.
LISTING AND GENERAL INFORMATION
We intend to apply to the Luxembourg Stock Exchange to list the
Class A notes, the Class B notes and the Class C notes. In connection with
the listing application, the Limited Liability Company Agreement of Card
Funding, and legal notice relating to the issuance of the Class A notes,
the Class B notes and the Class C notes will be deposited before listing
with the Chief Registrar of the District Court of Luxembourg, where you may
obtain copies of those documents if the notes are listed. The Class A
notes, the Class B notes and the Class C notes will trade through the
facilities of DTC, Clearstream and the Euroclear system.
The securities identification numbers for the notes are listed
below:
International
Securities
Identification
CUSIP Number Number (ISIN) Common Code
------------ --------------- -----------
Class A
Class B
Class C
As of the date of this supplement, neither the master trust nor
the owner trust is involved in any litigation or arbitration proceeding
relating to claims that are material in the context of the issuance of the
notes, nor so far as Card Funding is aware are any of those proceedings
pending or threatened.
Except as disclosed in this prospectus supplement, there has been
no material adverse change in the financial position of the master trust
since through the date of this prospectus supplement.
The transactions described in this prospectus supplement were
authorized by resolutions adopted by Chase USA's Board of Directors on and
were approved by resolutions adopted by Chase USA's Asset and Loan
Securitization Committee on .
Copies of the Receivables Purchase Agreement, the Pooling and
Servicing Agreement, the Series 200- - Supplement, the applicable
Indenture, Deposit and Administration Agreement, the Limited Liability
Company Agreement and the Trust Agreement, the annual report of independent
certified public accountants described in "Description of the
Securities--Description of the Series Certificates--Evidence as to
Compliance" in the attached prospectus, the documents referred to under
"Where You Can Find More Information" and the reports to noteholders
referred to under "Reports to Noteholders" and "Description of the
Securities--Description of the Notes--Reports to Noteholders" in the
attached prospectus will be available free of charge at the office of the
Listing Agent in Luxembourg. Financial information regarding Chase USA and
Card Funding is included in the consolidated financial statements of J.P.
Morgan Chase & Co.'s Annual Report on Form 10-K for the fiscal year ended .
Such report is available, and reports for subsequent years will be
available, at the office of the Listing Agent.
So long as there is no Paying Agent and transfer agent in
Luxembourg, Banque Generale du Luxembourg, S.A. will act as intermediary
agent in Luxembourg. If securities are issued in fully registered,
certificated form under the circumstances described in the attached
prospectus, a Paying Agent and transfer agent will be appointed in
Luxembourg.
The notes, the Receivables Purchase Agreement, the Pooling and
Servicing Agreement, the Series 200 - Supplement, the Indenture and the
Deposit and Administration Agreement are governed by the laws of the State
of New York. The Trust Agreement and the Limited Liability Company
Agreement are governed by the laws of the State of Delaware.
Any notice to noteholders will be validly given if published in a
leading daily newspaper having a general circulation in Luxembourg, which
is expected to be the Luxemburger Wort, and in at least one Belgian
newspaper or, if any of those newspapers shall cease to be published or
timely publication in that newspaper shall not be practicable, in such
other newspapers as the Listing Agent deems necessary to give fair and
reasonable notice to noteholders. Any such notice will be deemed to have
been given on the date of the last publication provided above.
Although we intend to apply to list the notes on the Luxembourg
Stock Exchange, we cannot guarantee that the application for the listing
will be accepted. You should consult with the Listing Agent in Luxembourg
to determine whether or not the notes are listed on the Luxembourg Stock
Exchange.
This prospectus supplement and the attached prospectus have been
prepared by Card Funding solely for use in connection with the offering and
listing of the notes described in this prospectus supplement. At the
request of the Luxembourg Stock Exchange, Card Funding confirms that it has
taken reasonable care to ensure that facts stated in this prospectus
supplement and the attached prospectus are true and accurate in all
material respects and there have not been omitted material facts the
omission of which would make misleading any statements of fact or opinion
in this prospectus supplement or the prospectus, and that Card Funding
accepts responsibility accordingly.
UNDERWRITING
Card Funding has agreed to sell to the underwriters listed below
the amount of securities of each class set forth next to each underwriter's
name. Each underwriter has agreed to purchase that amount of those
securities.
Class A Notes Principal Amount
J.P. Morgan Securities Inc. $
Total $
Class B Notes
J.P. Morgan Securities Inc. $
Total $
Class C Notes
J.P. Morgan Securities Inc. $
Total $
The price to public, underwriters' discounts and commissions, the
concessions that the underwriters may allow to certain dealers, and the
discounts that such dealers may reallow to certain other dealers, each
expressed as a percentage of the principal amount of each class of notes
are as follows:
Underwriting Selling
Price to Discount and Concessions, Reallowance,
Public Commissions Not to Exceed Not to Exceed
Class A Notes % % % %
Class B Notes % % % %
Class C Notes % % % %
After the offering is completed, Card Funding will receive the
proceeds, after deduction of the underwriting and other expenses, listed
below:
Proceeds to Transferor Underwriting
Proceeds to (As % of the Principal Discounts and
Transferor Amount of the Notes) Concessions
Class A Notes $ % $
Class B Notes $ % $
Class C Notes $ % $
After the public offering, the public offering price and other
selling terms may be changed by the underwriters.
The underwriters' obligations to acquire any Series 200 - notes
will be subject to certain conditions. The underwriters will offer the
Series 200 - notes for sale only if the owner trust issues the notes, and
all conditions to the issuance of the notes are satisfied or waived. The
underwriters have agreed either to purchase all of the Series 200 - notes,
or none of them.
The underwriters may reject any orders in whole or in part.
J.P. Morgan Securities Inc. is a wholly-owned subsidiary of J.P.
Morgan Chase & Co. and an affiliate of Chase USA, Card Funding and of
JPMorgan Chase Bank.
Each underwriter has represented and agreed that:
o it has not offered or sold, and prior to the date which is
six months after the date of issue of the Series 200 - notes
will not offer or sell any Series 200 - notes 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 the purposes of the Public Offers of Securities
Regulations 1995;
o it has complied and will comply with all applicable
provisions of the Financial Services and Markets Act 2000
(the "FSMA") with respect to anything done by it in relation
to the Series 200 - notes in, from or otherwise involving the
United Kingdom; and
o 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 the FSMA) received by it
in connection with the issue or sale of any Series 200 -
notes in circumstances in which section 21(1) of the FSMA
does not apply to the issuer.
This prospectus supplement and the attached prospectus may be used
by J.P. Morgan Securities Inc. in connection with offers and sales related
to market-making transactions in the notes. J.P. Morgan Securities Inc. may
act as principal or agent in such transactions. Such sales will be made at
prices related to prevailing market prices at the time of sale. J.P. Morgan
Securities Inc. has no obligation to make a market in the notes and any
such market-making may be discontinued at any time without notice, in its
sole discretion. J.P. Morgan Securities Inc. is among the underwriters
participating in the initial distribution of the notes.
OTHER SERIES ISSUED AND OUTSTANDING
The table below discusses the principal characteristics of the
other series of certificates that have been issued by the master trust and
will be outstanding on the closing date of this series and the notes issued
by various owner trusts and secured by certain certificates issued by the
master trust. For more specific information with respect to any series, any
prospective investor should contact JPMorgan Chase Bank at (212) 270-6000.
JPMorgan Chase Bank will provide, without charge, to any prospective
investor, a copy of the disclosure documents for any other publicly issued
series.
Series 1995-3
1. Class A Certificates
Initial Investor Interest.........................................................................$450,000,000
Certificate Rate.........................................................................................6.23%
Controlled Accumulation Amount (subject to adjustment).............................................$37,500,000
Commencement of Controlled Accumulation Period (subject to adjustment)...........................June 30, 2002
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.....................................................................$35,795,636.36
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date.........................................................................August 15, 2002
Series 1995-3 Termination Date..................................................................April 15, 2005
Series Issuance Date.........................................................................November 21, 1995
2. Class B Certificates
Initial Investor Interest..........................................................................$25,568,000
Certificate Rate.........................................................................................6.39%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date......................................................................September 15, 2002
Series 1995-3 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1995-4
1. Class A Certificates
Initial Investor Interest.........................................................................$300,000,000
Certificate Rate.....................................................................Three Month LIBOR + 0.20%
Controlled Accumulation Amount (subject to adjustment).............................................$25,000,000
Commencement of Controlled Accumulation Period (subject to adjustment)......................September 30, 2002
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.....................................................................$35,714,857.14
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date.......................................................................November 25, 2002
Series 1995-4 Termination Date...................................................................July 25, 2005
Series Issuance Date.........................................................................November 29, 1995
2. Class B Certificates
Initial Investor Interest..........................................................................$21,428,000
Certificate Rate.....................................................................Three Month LIBOR + 0.32%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest............................................ Same as above for Class A Certificates
Scheduled Payment Date ......................................................................November 25, 2002
Series 1995-4 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date...................................................Same as above for Class A Certificates
Series 1996-2
1. Class A Certificates
Initial Investor Interest.........................................................................$550,000,000
Certificate Rate.........................................................................................5.98%
Controlled Accumulation Amount (subject to adjustment)..........................................$45,833,333.33
Commencement of Controlled Accumulation Period (subject to adjustment).......................December 31, 2004
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.....................................................................$43,750,000.00
Other Enhancement....................................................... Subordination of Class B Certificates
Scheduled Payment Date........................................................................January 15, 2006
Series 1996-2 Termination Date..............................................................September 15, 2008
Series Issuance Date..........................................................................January 23, 1996
2. Class B Certificates
Initial Investor Interest..........................................................................$31,250,000
Certificate Rate.........................................................................................6.16%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date.......................................................................February 15, 2006
Series 1996-2 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1996-3
1. Class A Certificates
Initial Investor Interest.........................................................................$411,983,000
Certificate Rate.........................................................................................7.09%
Controlled Accumulation Amount (subject to adjustment)..........................................$34,331,916.67
Commencement of Controlled Accumulation Period (subject to adjustment)............................May 31, 2005
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.....................................................................$32,772,440.86
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date...........................................................................June 15, 2006
Series 1996-3 Termination Date...............................................................February 15, 2009
Series Issuance Date..............................................................................May 30, 1996
2. Class B Certificates
Initial Investor Interest..........................................................................$23,408,000
Certificate Rate.........................................................................................7.27%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date...........................................................................July 15, 2006
Series 1996-3 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1996-4
1. Class A Certificates
Initial Investor Interest.......................................................................$1,400,000,000
Certificate Rate.......................................................................One Month LIBOR + 0.13%
Controlled Accumulation Amount (subject to adjustment).........................................$116,666,666.67
Commencement of Controlled Accumulation Period (subject to adjustment)........................October 31, 2002
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest....................................................................$150,000,666.67
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date.......................................................................November 17, 2003
Series 1996-4 Termination Date...................................................................July 17, 2006
Series Issuance Date.........................................................................November 14, 1996
2. Class B Certificates
Initial Investor Interest.........................................................................$116,666,000
Certificate Rate.......................................................................One Month LIBOR + 0.35%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date.......................................................................December 15, 2003
Series 1996-4 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1997-1
1. Class A Certificates
Initial Investor Interest........................................................................$1,150,000,00
Certificate Rate.......................................................................One Month LIBOR + 0.09%
Controlled Accumulation Amount (subject to adjustment)..........................................$95,833,333.33
Commencement of Controlled Accumulation Period (subject to adjustment)........................January 31, 2003
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.......................................................................$123,214,619
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date.......................................................................February 15, 2004
Series 1997-1 Termination Date................................................................October 15, 2006
Series Issuance Date.........................................................................February 24, 1997
2. Class B Certificates
Initial Investor Interest..........................................................................$95,833,000
Certificate Rate.......................................................................One Month LIBOR + 0.29%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date..........................................................................March 15, 2004
Series 1997-1 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1997-4
1. Class A Certificates
Initial Investor Interest.........................................................................$600,000,000
Certificate Rate.......................................................................One Month LIBOR + 0.16%
Controlled Accumulation Amount (subject to adjustment).............................................$50,000,000
Commencement of Controlled Accumulation Period
(subject to adjustment).....................................................................October 31, 2002
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest........................................................................$64,285,715
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date.......................................................................December 15, 2002
Series 1997-4 Termination Date.................................................................August 15, 2005
Series Issuance Date..........................................................................December 8, 1997
2. Class B Certificates
Initial Investor Interest..........................................................................$50,000,000
Certificate Rate.......................................................................One Month LIBOR + 0.36%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date.......................................................................January 15, 2003
Series 1997-4..........................................Termination Date Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1997-5
1. Class A Certificates
Initial Investor Interest.........................................................................$500,000,000
Certificate Rate........................................................................................6.194%
Controlled Accumulation Amount (subject to adjustment).............................................$41,666,667
Commencement of Controlled Accumulation Period (subject to adjustment)........................October 31, 2002
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest........................................................................$39,772,819
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date.......................................................................December 15, 2002
Series 1997-5 Termination Date.................................................................August 15, 2005
Series Issuance Date.........................................................................December 23, 1997
2. Class B Certificates
Initial Investor Interest..........................................................................$28,409,000
Certificate Rate........................................................................................6.388%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date........................................................................January 15, 2003
Series 1997-5 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1998-1
1. Class A Certificates
Initial Investor Interest.........................................................................$762,232,488
Certificate Rate.....................................................................One Month LIBOR + 0.2216%
Controlled Accumulation Amount (subject to adjustment).............................................$63,519,374
Commencement of Controlled Accumulation Period (subject to adjustment)........................January 31, 2004
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest........................................................................$81,668,141
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date.......................................................................February 15, 2005
Series 1998-1 Termination Date................................................................October 15, 2007
Series Issuance Date.........................................................................February 12, 1998
2. Class B Certificates
Initial Investor Interest..........................................................................$63,519,000
Certificate Rate.......................................................................One Month LIBOR + 0.37%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date..........................................................................March 15, 2005
Series 1998-1 Termination..........................................Date Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1998-3
1. Class A Certificates
Initial Investor Interest $.......................................................................600,000,000
Certificate Rate........................................................................................6.000%
Controlled Accumulation Amount (subject to adjustment).............................................$50,000,000
Commencement of Controlled Accumulation Period (subject to adjustment)..........................March 31, 2002
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.......................................................................$47,728,182
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date..........................................................................April 15, 2003
Series 1998-3 Termination Date.................................................................August 15, 2005
Series Issuance Date...............................................................................May 1, 1998
2. Class B Certificates
Initial Investor Interest..........................................................................$34,090,000
Certificate Rate........................................................................................6.150%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date............................................................................May 15, 2003
Series 1998-3 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1998-4
1. Class A Certificates
Initial Investor Interest.........................................................................$552,486,188
Certificate Rate......................................................................One Month LIBOR + 0.134%
Controlled Accumulation Amount (subject to adjustment).............................................$46,040,516
Commencement of Controlled Accumulation Period (subject to adjustment)...........................July 31, 2007
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest........................................................................$59,195,465
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date.........................................................................August 15, 2008
Series 1998-4 Termination Date...............................................................December 15, 2010
Series Issuance Date.............................................................................July 28, 1998
2. Class B Certificates
Initial Investor Interest..........................................................................$46,040,000
Certificate Rate.......................................................................One Month LIBOR + 0.36%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date......................................................................September 15, 2008
Series 1998-4 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1998-5
1. Class A Certificates
Initial Investor Interest.........................................................................$650,000,000
Certificate Rate.......................................................................One Month LIBOR + 0.16%
Controlled Accumulation Amount (subject to adjustment).............................................$54,166,667
Commencement of Controlled Accumulation Period (subject to adjustment).........................August 31, 2002
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest........................................................................$69,643,524
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date......................................................................September 15, 2003
Series 1998-5 Termination Date................................................................January 15, 2006
Series Issuance Date........................................................................September 24, 1998
2. Class B Certificates
Initial Investor Interest..........................................................................$54,166,000
Certificate Rate.......................................................................One Month LIBOR + 0.36%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest ............................................Same as above for Class A Certificates
Scheduled Payment Date.......................................................................October 15, 2003
Series 1998-5 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1998-6
1. Class A Certificates
Initial Investor Interest.........................................................................$650,000,000
Certificate Rate.......................................................................One Month LIBOR + 0.26%
Controlled Accumulation Amount (subject to adjustment).............................................$54,166,667
Commencement of Controlled Accumulation Period (subject to adjustment)..........................March 31, 2002
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest........................................................................$69,643,524
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date............................................................................May 15, 2002
Series 1998-6 Termination Date..............................................................September 15, 2004
Series Issuance Date.........................................................................November 24, 1998
2. Class B Certificates
Initial Investor Interest..........................................................................$54,166,000
Certificate Rate.......................................................................One Month LIBOR + 0.51%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest ............................................Same as above for Class A Certificates
Scheduled Payment Date...........................................................................June 15, 2002
Series 1998-6 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1999-1
1. Class A Certificates
Initial Investor Interest.........................................................................$750,000,000
Certificate Rate.......................................................................One Month LIBOR + 0.16%
Controlled Accumulation Amount (subject to adjustment).............................................$62,500,000
Commencement of Controlled Accumulation Period (subject to adjustment)..........................April 30, 2003
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest........................................................................$80,357,143
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date............................................................................May 15, 2004
Series 1999-1 Termination Date..............................................................September 15, 2006
Series Issuance Date.............................................................................March 4, 1999
2. Class B Certificates
Initial Investor Interest..........................................................................$62,500,000
Certificate Rate.......................................................................One Month LIBOR + 0.39%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest ............................................Same as above for Class A Certificates
Scheduled Payment Date ..........................................................................June 15, 2004
Series 1999-1 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1999-2
1. Class A Certificates
Initial Investor Interest.........................................................................$500,000,000
Certificate Rate.......................................................................One Month LIBOR + 0.14%
Controlled Accumulation Amount (subject to adjustment).............................................$41,666,667
Commencement of Controlled Accumulation Period (subject to adjustment)..........................April 30, 2002
Annual Servicing Fee Percentage..........................................................................2.0%
Initial Collateral Interest........................................................................$53,572,096
Other Enhancement........................................................Subordination of Class B Certificates
Scheduled Payment Date...........................................................................June 15, 2002
Series 1999-2 Termination Date................................................................October 15, 2004
Series Issuance Date.............................................................................July 15, 1999
2. Class B Certificates
Initial Investor Interest..........................................................................$41,666,000
Certificate Rate.......................................................................One Month LIBOR + 0.36%
Annual Servicing Fee Percentage...........................................................................2.0%
Initial Collateral Interest.............................................Same as above for Class A Certificates
Scheduled Payment Date...........................................................................July 15, 2002
Series 1999-2 Termination Date..........................................Same as above for Class A Certificates
Series Issuance Date....................................................Same as above for Class A Certificates
Series 1999-3
Series 1999-3 Certificate
Initial Principal Amount..........................................................................$965,590,000
Controlled Accumulation Amount (subject to adjustment).............................................$70,833,334
Commencement of Controlled Accumulation Period (subject to adjustment).........................August 31, 2003
Annual Servicing Fee Percentage..........................................................................2.00%
Series 1999-3 Termination Date................................................................January 15, 2007
Series Issuance Date........................................................................September 29, 1999
1. Class A Notes
Initial Class A Principal Amount..................................................................$850,000,000
Note Rate................................................................................................6.66%
Enhancement...................................................Subordination of Class B Notes and Class C Notes
Scheduled Payment Date......................................................................September 15, 2004
Note Issuance Date..........................................................................September 29, 1999
2. Class B Notes
Initial Class B Principal Amount...................................................................$48,295,000
Note Rate................................................................................................6.95%
Enhancement.....................................................................Subordination of Class C Notes
Scheduled Payment Date........................................................................October 15, 2004
Note Issuance Date.........................................................Same as above for the Class A Notes
3. Class C Notes
Initial Class C Principal Amount...................................................................$67,615,000
Note Rate..............................................................................One Month LIBOR + 0.95%
Enhancement........................................................................ Owner Trust Spread Account
Scheduled Payment Date.....................................................Same as above for the Class B Notes
Note Issuance Date.......................................Same as above for the Class A Notes and Class B Notes
Series 2000-1
Series 2000-1 Certificate
Initial Principal Amount..........................................................................$892,857,000
Controlled Accumulation Amount (subject to adjustment).............................................$62,500,000
Commencement of Controlled Accumulation Period (subject to adjustment)........................January 31, 2004
Annual Servicing Fee Percentage.............................................................................2%
Series 2000-1 Termination Date...................................................................June 15, 2007
Series Issuance Date.............................................................................March 2, 2000
1. Class A Notes
Initial Class A Principal Amount..................................................................$750,000,000
Note Rate..............................................................................One Month LIBOR + 0.17%
Enhancement..................................................Subordination of Class B Notes and Class C Notes
Scheduled Payment Date.......................................................................February 15, 2005
Note Issuance Date...............................................................................March 2, 2000
2. Class B Notes
Initial Class B Principal Amount...................................................................$62,500,000
Note Rate..............................................................................One Month LIBOR + 0.35%
Enhancement.....................................................................Subordination of Class C Notes
Scheduled Payment Date..........................................................................March 15, 2005
Note Issuance Date.........................................................Same as above for the Class A Notes
3. Class C Notes
Initial Class C Principal Amount...................................................................$80,357,000
Note Rate..............................................................................One Month LIBOR + 0.73%
Enhancement.........................................................................Owner Trust Spread Account
Scheduled Payment Date.....................................................Same as above for the Class B Notes
Note Issuance Date.......................................Same as above for the Class A Notes and Class B Notes
Series 2000-2
Series 2000-2 Certificate
Initial Principal Amount........................................................................$1,071,429,000
Controlled Accumulation Amount (subject to adjustment).............................................$75,000,000
Commencement of Controlled Accumulation Period (subject to adjustment).......................February 28, 2002
Annual Servicing Fee Percentage.............................................................................2%
Series 2000-2 Termination Date...................................................................July 15, 2005
Series Issuance Date............................................................................April 13, 2000
1. Class A Notes
Initial Class A Principal Amount..................................................................$900,000,000
Note Rate..............................................................................One Month LIBOR + 0.10%
Enhancement...................................................Subordination of Class B Notes and Class C Notes
Scheduled Payment Date..........................................................................March 17, 2003
Note Issuance Date..............................................................................April 13, 2000
2. Class B Notes
Initial Class B Principal Amount...................................................................$75,000,000
Note Rate One Month..............................................................................LIBOR + 0.29%
Enhancement.....................................................................Subordination of Class C Notes
Scheduled Payment Date..........................................................................April 15, 2003
Note Issuance Date.........................................................Same as above for the Class A Notes
3. Class C Notes
Initial Class C Principal Amount...................................................................$96,429,000
Note Rate..............................................................................One Month LIBOR + 0.68%
Enhancement.........................................................................Owner Trust Spread Account
Scheduled Payment Date.....................................................Same as above for the Class B Notes
Note Issuance Date.......................................Same as above for the Class A Notes and Class B Notes
Series 2000-3
Series 2000-3 Certificate
Initial Principal Amount..........................................................................$892,857,000
Controlled Accumulation Amount (subject to adjustment).............................................$62,500,000
Commencement of Controlled Accumulation Period (subject to adjustment).........................August 31, 2004
Annual Servicing Fee Percentage.............................................................................2%
Series 2000-3 Termination Date................................................................January 15, 2008
Series Issuance Date...........................................................................October 3, 2000
1. Class A Notes
Initial Class A Principal Amount..................................................................$750,000,000
Note Rate..............................................................................One Month LIBOR + 0.13%
Enhancement...................................................Subordination of Class B Notes and Class C Notes
Scheduled Payment Date......................................................................September 15, 2005
Note Issuance Date.............................................................................October 3, 2000
2. Class B Notes
Initial Class B Principal Amount...................................................................$62,500,000
Note Rate..............................................................................One Month LIBOR + 0.35%
Enhancement.....................................................................Subordination of Class C Notes
Scheduled Payment Date........................................................................October 17, 2005
Note Issuance Date.........................................................Same as above for the Class A Notes
3. Class C Notes
Initial Class C Principal Amount...................................................................$80,357,000
Note Rate..............................................................................One Month LIBOR + 0.70%
Enhancement.........................................................................Owner Trust Spread Account
Scheduled Payment Date.....................................................Same as above for the Class B Notes
Note Issuance Date.......................................Same as above for the Class A Notes and Class B Notes
Series 2001-1
Series 2001-1 Certificate
Initial Principal Amount..........................................................................$850,000,000
Controlled Accumulation Amount (subject to adjustment).............................................$59,500,000
Commencement of Controlled Accumulation Period (subject to adjustment)........................January 31, 2005
Annual Servicing Fee Percentage.............................................................................2%
Series 2001-1 Termination Date...................................................................June 16, 2008
Series Issuance Date............................................................................March 15, 2001
1. Class A Notes
Initial Class A Principal Amount..................................................................$714,000,000
Note Rate..............................................................................One Month LIBOR + 0.14%
Enhancement...................................................Subordination of Class B Notes and Class C Notes
Scheduled Payment Date.......................................................................February 15, 2006
Note Issuance Date..............................................................................March 15, 2001
2. Class B Notes
Initial Class B Principal Amount...................................................................$59,500,000
Note Rate..............................................................................One Month LIBOR + 0.40%
Enhancement.....................................................................Subordination of Class C Notes
Scheduled Payment Date..........................................................................March 15, 2006
Note Issuance Date.........................................................Same as above for the Class A Notes
3. Class C Notes
Initial Class C Principal Amount...................................................................$76,500,000
Note Rate..............................................................................One Month LIBOR + 0.85%
Enhancement.........................................................................Owner Trust Spread Account
Scheduled Payment Date.....................................................Same as above for the Class B Notes
Note Issuance Date.......................................Same as above for the Class A Notes and Class B Notes
Series 2001-2
Series 2001-2 Certificate
Initial Principal Amount..........................................................................$595,238,000
Controlled Accumulation Amount (subject to adjustment).............................................$41,666,667
Commencement of Controlled Accumulation Period (subject to adjustment)..........................April 30, 2005
Annual Servicing Fee Percentage.............................................................................2%
Series 2001-2 Termination Date..............................................................September 15, 2008
Series Issuance Date.............................................................................June 14, 2001
1. Class A Notes
Initial Class A Principal Amount.................................................................$500,000,000
Note Rate..............................................................................One Month LIBOR + 0.12%
Enhancement...................................................Subordination of Class B Notes and Class C Notes
Scheduled Payment Date............................................................................May 15, 2006
Note Issuance Date...............................................................................June 14, 2001
2. Class B Notes
Initial Class B Principal Amount...................................................................$41,666,000
Note Rate..............................................................................One Month LIBOR + 0.36%
Enhancement.....................................................................Subordination of Class C Notes
Scheduled Payment Date...........................................................................June 15, 2006
Note Issuance Date.........................................................Same as above for the Class A Notes
3. Class C Notes
Initial Class C Principal Amount...................................................................$53,572,000
Note Rate..............................................................................One Month LIBOR + 0.90%
Enhancement.........................................................................Owner Trust Spread Account
Scheduled Payment Date.....................................................Same as above for the Class B Notes
Note Issuance Date.................................. Same as above for the Class A Notes and the Class B Notes
Series 2001-3
Series 2001-3 Certificate
Initial Principal Amount..........................................................................$892,857,000
Controlled Accumulation Amount (subject to adjustment).............................................$62,500,000
Commencement of Controlled Accumulation Period (subject to adjustment)..........................April 30, 2003
Annual Servicing Fee Percentage.............................................................................2%
Series 2001-3 Termination Date..............................................................September 15, 2006
Series Issuance Date.............................................................................June 14, 2001
1. Class A Notes
Initial Class A Principal Amount..................................................................$750,000,000
Note Rate..............................................................................One Month LIBOR + 0.07%
Enhancement...................................................Subordination of Class B Notes and Class C Notes
Scheduled Payment Date............................................................................May 17, 2004
Note Issuance Date...............................................................................June 14, 2001
2. Class B Notes
Initial Class B Principal Amount...................................................................$62,500,000
Note Rate..............................................................................One Month LIBOR + 0.34%
Enhancement.....................................................................Subordination of Class C Notes
Scheduled Payment Date...........................................................................June 15, 2004
Note Issuance Date.........................................................Same as above for the Class A Notes
3. Class C Notes
Initial Class C Principal Amount...................................................................$80,357,000
Note Rate..............................................................................One Month LIBOR + 0.85%
Enhancement.........................................................................Owner Trust Spread Account
Scheduled Payment Date.....................................................Same as above for the Class B Notes
Note Issuance Date...................................Same as above for the Class A Notes and the Class B Notes
Series 2001-4
Series 2001-4 Certificate
Initial Principal Amount........................................................................$1,000,000,000
Controlled Accumulation Amount (subject to adjustment).............................................$70,000,000
Commencement of Controlled Accumulation Period (subject to adjustment)...........................June 30, 2005
Annual Servicing Fee Percentage.............................................................................2%
Series 2001-4 Termination Date...............................................................November 17, 2008
Series Issuance Date............................................................................August 1, 2001
1. Class A Notes
Initial Class A Principal Amount.................................................................$840,000,000
Note Rate................................................................................................5.50%
Enhancement...................................................Subordination of Class B Notes and Class C Notes
Scheduled Payment Date...........................................................................July 17, 2006
Note Issuance Date..............................................................................August 1, 2001
2. Class B Notes
Initial Class B Principal Amount...................................................................$70,000,000
Note Rate..............................................................................One Month LIBOR + 0.38%
Enhancement.....................................................................Subordination of Class C Notes
Scheduled Payment Date.........................................................................August 15, 2006
Note Issuance Date.........................................................Same as above for the Class A Notes
3. Class C Notes
Initial Class C Principal Amount...................................................................$90,000,000
Note Rate................................................................Not more than One Month LIBOR + 1.00%
Enhancement.........................................................................Owner Trust Spread Account
Scheduled Payment Date.....................................................Same as above for the Class B Notes
Note Issuance Date...................................Same as above for the Class A Notes and the Class B Notes
Series 2001-5
Series 2001-5 Certificate
Initial Principal Amount........................................................................$1,500,000,000
Controlled Accumulation Amount (subject to adjustment)............................................$105,000,000
Commencement of Controlled Accumulation Period (subject to adjustment)......................September 30, 2003
Annual Servicing Fee Percentage.............................................................................2%
Series 2001-5 Termination Date...............................................................February 15, 2007
Series Issuance Date..........................................................................October 25, 2001
1. Class A Notes
Initial Class A Principal Amount...............................................................$1,260,000,000
Note Rate..............................................................................one month LIBOR + 0.10%
Enhancement...................................................Subordination of Class B Notes and Class C Notes
Scheduled Payment Date........................................................................October 15, 2004
Note Issuance Date............................................................................October 25, 2001
2. Class B Notes
Initial Class B Principal Amount..................................................................$105,000,000
Note Rate..............................................................................One Month LIBOR + 0.45%
Enhancement.....................................................................Subordination of Class C Notes
Scheduled Payment Date.......................................................................November 15, 2004
Note Issuance Date.........................................................Same as above for the Class A Notes
3. Class C Notes
Initial Class C Principal Amount..................................................................$135,000,000
Note Rate................................................................Not more than One Month LIBOR + 1.10%
Enhancement.........................................................................Owner Trust Spread Account
Scheduled Payment Date.....................................................Same as above for the Class B Notes
Note Issuance Date...................................Same as above for the Class A Notes and the Class B Notes
Series 2001-6
Series 2001-6 Certificate
Initial Principal Amount........................................................................$1,200,000,000
Controlled Accumulation Amount (subject to adjustment).............................................$84,000,000
Commencement of Controlled Accumulation Period (subject to adjustment)........................October 31, 2005
Annual Servicing Fee Percentage.............................................................................2%
Series 2001-6 Termination Date..................................................................March 16, 2009
Series Issuance Date.........................................................................December 17, 2001
1. Class A Notes
Initial Class A Principal Amount...............................................................$1,008,000,000
Note Rate..............................................................................One month LIBOR + 0.13%
Enhancement...................................................Subordination of Class B Notes and Class C Notes
Scheduled Payment Date.......................................................................November 15, 2006
Note Issuance Date...........................................................................December 17, 2001
2. Class B Notes
Initial Class B Principal Amount...................................................................$84,000,000
Note Rate..............................................................................One Month LIBOR + 0.48%
Enhancement.....................................................................Subordination of Class C Notes
Scheduled Payment Date.......................................................................December 15, 2006
Note Issuance Date.........................................................Same as above for the Class A Notes
3. Class C Notes
Initial Class C Principal Amount..................................................................$108,000,000
Note Rate..............................................................................One Month LIBOR + 1.10%
Enhancement.........................................................................Owner Trust Spread Account
Scheduled Payment Date.....................................................Same as above for the Class B Notes
Note Issuance Date...................................Same as above for the Class A Notes and the Class B Notes
GLOSSARY OF TERMS FOR PROSPECTUS SUPPLEMENT
"Adjusted Investor Interest" means, for any date of determination,
an amount equal to:
o the Investor Interest as of that date, minus
o the amount on deposit in the Principal Funding Account for
that date.
"Available Accumulation Period Reserve Account Amount" will equal
the lesser of:
o the amount on deposit in the Accumulation Period Reserve
Account--after giving effect to the interest and earnings
retained in that account but before giving effect to any
deposit to be made to that account on a Transfer Date, and
o the Required Accumulation Period Reserve Account Amount for
such Transfer Date.
"Available Investor Finance Charge Collections" means, with
respect to any Monthly Period, the sum of:
o the Floating Allocation Percentage of collections of Finance
Charge Receivables with respect to that Monthly Period
excluding collections of Finance Charge Receivables
attributable to Interchange which are allocable to Servicer
Interchange,
o investment earnings on amounts in the Principal Funding
Account, if any, with respect to the related Transfer Date,
and
o amounts, if any, to be withdrawn from the Accumulation Period
Reserve Account which are required to be included in
Available Investor Finance Charge Collections under the
Series 200 - Supplement.
"Available Investor Principal Collections" means, with respect to
any Monthly Period, the sum of:
o the Fixed Allocation Percentage of collections of Principal
Receivables received during that Monthly Period and amounts
applied to cover the Investor Default Amount and Investor
Charge-Offs and previously unreimbursed Reallocated Principal
Collections on the related Transfer Date, plus
o any Shared Principal Collections with respect to other series
that are allocated to Series 200 - , minus
o the amount of Reallocated Principal Collections used to fund
the interest payments on the Class A notes and the Class B
notes and the Net Investor Servicing Fee.
"Base Rate" means, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction:
o the numerator of which is the sum of:
- the Class A Interest Requirement,
- the Class B Interest Requirement,
- the Net Class C Interest Requirement, and
- the Investor Servicing Fee with respect to that Monthly
Period, and
o the denominator of which is the Investor Interest as of the
close of business on the last day of such Monthly Period.
"Class A Interest Requirement" means, with respect to any Payment
Date, the sum of:
o the Class A Monthly Note Interest, and
o any unpaid Class A Note Interest Shortfall.
"Class A Monthly Note Interest" means the product of:
o the Class A Note Interest Rate for the related Note Interest
Period,
o a fraction:
- the numerator of which is the actual number of days in such
Note Interest Period and
- the denominator of which is 360, and
o the Class A Note Principal Balance on the related Record Date
or, with respect to the initial Payment Date, the Class A
Note Initial Principal Balance.
"Class A Noteholders' Principal Distribution Amount" means, with
respect to any Payment Date on and after the earlier to occur of:
o the Class A Scheduled Note Payment Date, and
o any Note Principal Due Date,
the Class A Note Principal Balance on that Payment Date.
"Class A Note Initial Principal Balance" means $ .
"Class A Note Interest Rate" means a rate of % per annum above
one-month LIBOR.
"Class A Note Interest Shortfall" means, with respect to any
Payment Date, the sum of:
o the excess, if any, of:
- the Class A Interest Requirement for the preceding Payment
Date, over
- the amount of interest paid on the Class A notes for the
preceding Payment Date, plus
o interest on the amount of overdue interest owed to the Class
A noteholders on the preceding Payment Date, to the extent
permitted by law, at the Class A Note Interest Rate from and
including the preceding Payment Date to but excluding the
current Payment Date.
"Class A Note Principal Balance" means, as of any date:
o the Class A Note Initial Principal Balance, minus
o the aggregate amount of any principal allocations paid to the
Class A noteholders prior to that date.
"Class A Scheduled Note Payment Date" means the Payment Date.
"Class B Interest Requirement" means, with respect to any Payment
Date, the sum of:
o the Class B Monthly Note Interest, and
o any unpaid Class B Note Interest Shortfall.
"Class B Monthly Note Interest" means the product of:
o the Class B Note Interest Rate for the related Note Interest
Period,
o a fraction:
- the numerator of which is the actual number of days in such
Note Interest Period and
- the denominator of which is 360, and
o the Class B Note Principal Balance on the related Record Date
or, with respect to the initial Payment Date, the Class B
Note Initial Principal Balance.
"Class B Noteholders' Principal Distribution Amount" means, with
respect to any Payment Date on and after the earlier to occur of:
o the Class B Scheduled Note Payment Date, and
o any Note Principal Due Date,
the Class B Note Principal Balance on that Payment Date.
"Class B Note Initial Principal Balance" means $ .
"Class B Note Interest Rate" means a rate of % per annum above
one-month LIBOR.
"Class B Note Interest Shortfall" means, with respect to any
Payment Date, the sum of:
o the excess, if any, of:
- the Class B Interest Requirement for the preceding Payment
Date, over
- the amount of interest paid on the Class B notes for the
preceding Payment Date, plus
o interest on the amount of overdue interest owed to the Class
B noteholders on the preceding Payment Date, to the extent
permitted by law, at the Class B Note Interest Rate from and
including the preceding Payment Date to but excluding the
current Payment Date.
"Class B Note Principal Balance" means, as of any date:
o the Class B Note Initial Principal Balance, minus
o the aggregate amount of any principal allocations paid to the
Class B noteholders prior to that date.
"Class B Scheduled Note Payment Date" means the Payment Date.
"Class C Interest Requirement" means, with respect to any Payment
Date, the sum of:
o the Class C Monthly Note Interest, and
o the amount of any Class C Note Interest Shortfall.
"Class C Monthly Note Interest" means the product of:
o the Class C Note Interest Rate for the related Note Interest
Period,
o a fraction:
- the numerator of which is the actual number of days in
such Note Interest Period and
- the denominator of which is 360, and
o the Class C Note Principal Balance on the related Record Date
or, with respect to the initial Payment Date, the Class C
Note Initial Principal Balance.
"Class C Noteholders' Principal Distribution Amount" means, with
respect to any Payment Date on and after the earlier to occur of:
o the Class C Scheduled Note Payment Date, and
o any Note Principal Due Date,
the Class C Note Principal Balance on that Payment Date.
"Class C Note Initial Principal Balance" means $ .
"Class C Note Interest Rate" means a rate of % per annum above
one-month LIBOR.
"Class C Note Interest Shortfall" means, with respect to any
Payment Date, the sum of:
o the excess, if any, of:
- the Class C Interest Requirement for the preceding
Payment Date, over
- the amount of interest paid on the Class C notes for the
preceding Payment Date, plus
o interest on the amount of overdue interest owed to the Class
C noteholders on the preceding Payment Date, to the extent
permitted by law, at the Class C Note Interest Rate from and
including the preceding Payment Date to but excluding the
current Payment Date.
"Class C Note Principal Balance" means, as of any date:
o the Class C Note Initial Principal Balance, minus
o the aggregate amount of any principal allocations paid to the
Class C noteholders prior to that date.
"Class C Scheduled Note Payment Date" means the Payment Date.
"Controlled Accumulation Amount" means the amount scheduled to be
deposited in the Principal Funding Account on each Transfer Date during the
Controlled Accumulation Period which is initially scheduled to be $ but can
become a larger amount if the Controlled Accumulation Period is shorter
than twelve months.
"Controlled Accumulation Period" means a period:
o beginning at the close of business on the last day of the
Monthly Period (subject to adjustment as described herein)
and
o ending on the earliest of:
- the start of the Rapid Amortization Period, and
- the Series Termination Date,
during which collections of Principal Receivables up to the amount
specified herein are deposited monthly into the Principal Funding Account.
"Default Amount" means the amount of receivables in Defaulted
Accounts for any Monthly Period.
"Deposit and Administration Agreement" means the agreement among
Chase USA Card Funding LLC, as Depositor, Chase Manhattan Bank USA,
National Association, as Administrator, and Wilmington Trust Company, not
in its individual capacity but as Owner Trustee for the Chase Credit Card
Owner Trust 200 - , as issuer, under which the Series Certificate will be
deposited into the owner trust.
"Distribution Date" means the 15th day of each month--or, if that
day is not a business day, the next succeeding business day--on which
distributions of interest or principal are to be made to
certificateholders, including the owner trust as holder of the Series
Certificate.
"Events of Default" means, with respect to the notes, those events
described under "Description of the Securities--Description of the
Notes--Events of Default" in this supplement.
"Excess Finance Charge Collections" means those finance charge
collections described under "Description of the Securities--Description of
the Series Certificate--Shared Excess Finance Charge Collections" in this
supplement.
"Excess Spread Percentage" means, with respect to any Monthly
Period, the amount, if any, by which the Portfolio Yield exceeds the Base
Rate.
"Fixed Allocation Percentage" means the Investor Percentage
described under "Description of the Securities--Description of the Series
Certificate--Allocation Percentages" in this supplement.
"Floating Allocation Percentage" means the Investor Percentage
described under "Description of the Securities--Description of the Series
Certificate--Allocation Percentages" in this supplement.
"Group I" means the group of series under the master trust to
which the Series Certificate for your series belongs.
"Investor Interest" means:
o the initial principal amount of the Series Certificate, minus
o the amount of principal previously paid to the owner trust as
certificateholder, minus
o the amount of unreimbursed Investor Charge-Offs and
Reallocated Principal Collections.
"Investor Principal Funding Investment Proceeds" means the
investment earnings on funds in the Principal Funding Account, net of
investment expenses and losses for a single Monthly Period.
"Investor Servicing Fee" means, as of any Transfer Date, an amount
equal to one-twelfth of the product of:
o 2.0%, and
o the Adjusted Investor Interest as of the last day of the
Monthly Period preceding that Transfer Date; provided,
however, with respect to the first Transfer Date, the
Investor Servicing Fee shall be equal to the product of:
- a fraction, the numerator of which is the number of days
from and including the Closing Date to and including the
last day of the Monthly Period and the denominator of
which is 360,
- 2.0%, and
- the Investor Interest on the Closing Date.
"Limited Liability Company Agreement" means the Limited Liability
company agreement of Chase USA Card Funding LLC, as amended, restated,
supplemented or otherwise modified from time to time.
"Listing Agent" means Banque Generale du Luxembourg, S.A., 50 Avenue
J.F. Kennedy, L-2951, Luxembourg, phone number 011 352 4242 2367.
"Monthly Principal Reallocation Amount" means, with respect to any
Monthly Period, the sum of:
o the lower of:
- the excess of the Class A Interest Requirement over the
Available Investor Finance Charge Collections allocated
to the Class A Interest Requirement, and
- 16% of the initial Investor Interest minus the amount of
unreimbursed Investor Charge-Offs and unreimbursed
Reallocated Principal Collections, plus
o the lower of:
- the sum of (A) the excess of the Class B Interest
Requirement over the Available Investor Finance Charge
Collections allocated to the Class B Interest Requirement
and (B) the excess of the Net Investor Servicing Fee over
the Available Investor Finance Charge Collections
allocated to the Net Investor Servicing Fee, and
- 9% of the initial Investor Interest minus the amount of
unreimbursed Investor Charge-Offs and unreimbursed
Reallocated Principal Collections.
"Net Class C Interest Requirement" means for each Transfer Date:
o the Class C Interest Requirement, minus
o the investment earnings on amounts in the Owner Trust Spread
Account.
"Net Investor Servicing Fee" means the share of the Investor
Servicing Fee allocable to the owner trust as holder of the Series
Certificate with respect to any Transfer Date which is equal to one-twelfth
of the product of:
o 1.0%, and
o the Adjusted Investor Interest as of the last day of the
Monthly Period preceding that Transfer Date;
provided, however, that with respect to the first Transfer Date,
the Net Investor Servicing Fee shall be equal to the product of:
o a fraction, the numerator of which is the number of days from
and including the Closing Date to and including the last day
of the Monthly Period, and the denominator of which is 360,
o the Net Servicing Fee Rate, and
o the Investor Interest on the Closing Date.
"Net Servicing Fee Rate" means 1.0% per annum.
"Note Distribution Account" means an account in which payments
made to the owner trust by the master trust with respect to the Series
Certificate are deposited and from which payments to the noteholders are
made.
"Note Documents" means the Indenture, the Trust Agreement and the
Deposit and Administration Agreement.
"Note Initial Principal Balance" means $ .
"Note Interest Period" means, with respect to any Payment Date,
the period from the previous Payment Date through the day preceding such
Payment Date, except that the initial Note Interest Period will be the
period from the Closing Date through the day preceding the initial Payment
Date.
"Note Maturity Date" means , or if that day is not a business day
the next business day, which will be the Payment Date on which the entire
remaining principal balance of the notes will be paid in full.
"Note Principal Due Date" means any of:
o the date on which the master trust is terminated,
o the date on which the Investor Interest is paid in full,
o the Note Maturity Date,
o the Payment Date on which the Transferor exercises its option
to purchase the Series Certificates and
o the Payment Date in the month following the Monthly Period in
which a Pay Out Event (including an Event of Default) occurs.
"Note Rate" means the interest rate per annum for a class of notes
set forth under "Summary of Terms" in this supplement.
"Owner Trust Spread Account" means the spread account maintained
by the owner trust for the benefit of the Class C notes.
"Owner Trustee" means Wilmington Trust Company, as Owner Trustee
of the owner trust.
"Payment Date" means the 15th day of each month--or, if that day
is not a business day, the next succeeding business day--on which
distributions of interest or principal are to be made to noteholders.
"Pay Out Event" means, for the Series Certificate of your series,
any of the events described under "Description of the
Securities--Description of the Series Certificate--Pay Out Events" in this
supplement.
"Portfolio Yield" means the annualized percentage equivalent of a
fraction:
o the numerator of which is the sum of:
- collections of Finance Charge Receivables,
- Investor Principal Funding Investment Proceeds, and
- amounts withdrawn from the Accumulation Period Reserve
Account, and deposited into the Finance Charge Account
for such Monthly Period, calculated on a cash basis after
subtracting the Investor Default Amount for such Monthly
Period, and
o the denominator of which is the Investor Interest as of the
close of business on the last day of such Monthly Period.
"Principal Funding Investment Shortfall" means, as of any Transfer
Date during the Controlled Accumulation Period, a deficiency that occurs
when the Investor Principal Funding Investment Proceeds for that Transfer
Date are less than the product of:
o the actual number of days in the related Note Interest Period
divided by 360, times
o the Class A Note Interest Rate, times
o the balance in the Principal Funding Account as of the Record
Date preceding that Transfer Date.
"Quarterly Excess Spread Percentage" means, with respect to any
Monthly Period, the average of the current Excess Spread Percentage and the
Excess Spread Percentages for the two immediately preceding Monthly
Periods.
"Rapid Amortization Period" means, for the Series Certificate, a
period:
o beginning on the day a Pay Out Event occurs or such other
date as may be specified in this supplement, and
o ending on the earlier of:
- the date on which the Investor Interest of the Series
Certificate has been paid in full, and
- the Series Termination Date; and
during which the portion of collections of Principal Receivables allocable
to the Series Certificate of your series will be paid on each Distribution
Date to the owner trust as the holder of the Series Certificate.
"Reallocated Principal Collections" means with respect to any
Transfer Date, Available Investor Principal Collections used to pay
interest on the Class A notes and the Class B notes or used to pay the Net
Investor Servicing Fee, in an amount equal to the lesser of:
o the Monthly Principal Reallocation Amount for the related
Monthly Period, and
o the Investor Interest after giving effect to any Investor
Charge-Offs for that Transfer Date.
"Record Date" means the last business day of the calendar month
before the Payment Date, as of which a noteholder must be the registered
holder of a note to receive a payment on the following Payment Date.
"Required Accumulation Period Reserve Account Amount" means, with
respect to any Transfer Date on or after which principal is deposited into
the Accumulation Period Reserve Account, an amount equal to:
o the product of:
- 84%,
- the initial Investor Interest, and
- 0.5%, or
o a greater or lesser amount in accordance with the provisions
of the Series 200 - Supplement.
"Required Owner Trust Spread Account Amount" means the minimum
amount required to be held in the Owner Trust Spread Account for the
benefit of the Class C noteholders, equal to $ unless the Quarterly Excess
Spread Percentage:
o is less than or equal to 4.50% per annum but greater than
4.25% per annum, in which case the Required Owner Trust
Spread Account Amount will be increased to an amount equal to
1.50% of the Note Initial Principal Balance,
o is less than or equal to 4.25% per annum but greater than
4.00% per annum, in which case the Required Owner Trust
Spread Account Amount will be increased to an amount equal to
2.00% of the Note Initial Principal Balance,
o is less than or equal to 4.00% per annum but greater than
3.50% per annum, in which case the Required Owner Trust
Spread Account Amount will be increased to an amount equal to
2.50% of the Note Initial Principal Balance,
o is less than or equal to 3.50% per annum but greater than
3.00% per annum, in which case the Required Owner Trust
Spread Account Amount will be increased to an amount equal to
3.00% of the Note Initial Principal Balance,
o is less than or equal to 3.00% per annum but greater than
2.50% per annum, in which case the Required Owner Trust
Spread Account Amount will be increased to an amount equal to
3.50% of the Note Initial Principal Balance,
o is less than or equal to 2.50% per annum but greater than or
equal to 0.00% per annum, in which case the Required Owner
Trust Spread Account Amount will be increased to an amount
equal to 4.00% of the Note Initial Principal Balance, and
o is less than 0.00% per annum, in which case the Required
Owner Trust Spread Account Amount will be increased to an
amount equal to 9.00% of the Note Initial Principal Balance.
The Required Owner Trust Spread Account Amount will never be greater than
the Class C Note Principal Balance.
"Reserve Account Funding Date" means the Transfer Date with
respect to the Monthly Period which commences no later than three months
prior to the commencement of the Controlled Accumulation Period, or an
earlier date determined by the Servicer.
"Scheduled Note Payment Date" means:
o for Class A, ,
o for Class B, , and
o for Class C, ,
or if the Scheduled Note Payment Date for any class is not a business day,
the next business day.
"Scheduled Principal Allocation Commencement Date" means the
Distribution Date.
"Series 200 - Supplement" means the supplement to the Pooling and
Servicing Agreement through which the Series Certificate is issued.
"Servicer" means JPMorgan Chase Bank, as servicer of the Chase
Credit Card Master Trust.
"Servicer Interchange" means, for any Monthly Period, an amount
equal to:
o Finance Charge Receivables allocated to the Investor Interest
with respect to that Monthly Period which are attributable to
Interchange,
o but not in excess of one-twelfth of the product of:
- the Adjusted Investor Interest, as of the last day of such
Monthly Period, and
- 1.0%.
"Shared Principal Collections" means those principal collections
described under "Description of the Securities--Description of the Series
Certificate--Shared Principal Collections" in this supplement.
"Trust Agreement" means the agreement under which the owner trust
will be established to be entered into by Card Funding, as the Depositor,
and Wilmington Trust Company, as the Owner Trustee.
----------------------------------
A note is not a deposit
and neither the notes nor
the underlying accounts
or receivables or series
certificates are insured
or guaranteed by the FDIC
or any other governmental
agency.
A note will be an obligation
of an owner trust only.
Neither the notes nor
the series certificates will
represent interests in or
recourse obligations of Card
Funding, Chase USA, the servicer
or any of their affiliates.
This prospectus may be
used to offer and sell any
series of notes only if
accompanied by the
prospectus supplement for
that series.
----------------------------------
The information in this prospectus is not complete and may be changed. We
cannot sell these notes until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these notes and is not soliciting an offer to buy these notes
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JANUARY 14, 2002
Prospectus
Chase Credit Card Master Trust
Chase Credit Card Owner Trusts
Issuers
Chase Manhattan Bank USA, National Association
Administrator of Owner Trusts
Chase USA Card Funding LLC
Transferor
JPMorgan Chase Bank
Servicer of Master Trust
Asset Backed Securities
The master trust--
o may periodically issue asset backed certificates in one or more series
that will be sold to owner trusts and pledged to secure notes, and
o will own receivables in a portfolio of consumer revolving credit card
accounts and other property described in this prospectus and in the
prospectus supplement.
The notes--
o will be obligations of an owner trust and will be secured by the
assets of that owner trust, including one or more series certificates,
o offered by this prospectus will be rated in one of the four highest
rating categories by at least one nationally recognized statistical
rating organization,
o may have one or more forms of credit enhancement, and
o will be issued as part of a series which may include one or more classes
of notes.
The noteholders will receive interest and principal as described in the
prospectus supplement. Each series of notes will be secured by a series
certificate issued by the master trust and purchased by the owner trust
that will issue the notes and any other assets described in that prospectus
supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these notes or determined whether
this prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
, 2002
Table of Contents
Overview of the Information in this Prospectus
and the Prospectus Supplement..............................................1
The Master Trust.............................................................2
The Owner Trusts.............................................................2
Chase USA's Credit Card Activities...........................................3
Acquisition and Maintenance of Credit Card
Accounts..............................................................4
Billing and Payments....................................................6
Collection of Delinquent Accounts.......................................7
Description of First Data Resources, Inc................................8
Interchange.............................................................9
Recoveries..............................................................9
The Receivables..............................................................9
Use of Proceeds.............................................................12
Maturity Considerations.....................................................13
Chase USA...................................................................14
Card Funding................................................................14
Description of the Securities...............................................14
Form of Your Notes.....................................................15
DTC ...................................................................16
Clearstream............................................................16
Euroclear..............................................................17
Book-Entry Registration................................................17
Definitive Notes.......................................................19
Initial Settlement.....................................................20
Secondary Market Trading...............................................21
Certain U.S. Federal Income Tax
Documentation Procedures Relating
to Global Notes......................................................23
Description of the Series Certificates.................................23
Transferor Interest....................................................24
Issuing New Series Certificates........................................25
Interest Allocations...................................................26
Principal Allocations..................................................26
Transfer and Assignment of Receivables.................................28
Card Funding's Representations and
Warranties...........................................................29
Addition of Master Trust Assets........................................30
Removal of Master Trust Assets........................................31
Master Trust Bank Accounts............................................32
Companion Series......................................................34
Funding Period........................................................35
Investor Percentage and Transferor
Percentage...........................................................36
Application of Collections............................................36
Shared Excess Finance Charge Collections..............................37
Shared Principal Collections..........................................37
Rebates and Fraudulent Charges........................................38
Default Allocations...................................................38
Investor Charge-Offs..................................................38
Optional Repurchase...................................................38
Final Payment of Principal; Series
Termination..........................................................39
Pay Out Events........................................................39
Servicing Compensation................................................40
The Servicer..........................................................40
Servicer Default......................................................40
Payment of Expenses...................................................41
Reports to Certificateholders.........................................41
Evidence as to Compliance.............................................42
Amendments............................................................43
The Master Trust Trustee..............................................44
Master Trust Termination..............................................44
Description of the Notes..............................................45
Principal and Interest on the Notes...................................45
The Indentures........................................................46
Certain Covenants.....................................................49
The Indenture Trustee.................................................50
Transfer and Assignment of the
Series Certificate...................................................50
Reports to Noteholders................................................50
Certain Matters Regarding the Administrator...........................51
Amendments............................................................51
Termination...........................................................52
Credit Enhancement..........................................................52
Specific Forms of Credit Enhancement..................................53
Note Ratings................................................................56
Certain Legal Aspects of the Receivables...................................57
Certain Matters Relating to the Transfer of the
Receivables and the Series Certificate.............................57
Certain Matters Relating to Bankruptcy or
Receivership.......................................................58
Certain Matters Relating to Receivership..............................58
Consumer Protection Laws..............................................60
Industry Litigation...................................................61
Tax Matters.................................................................61
Tax Characterization of the Master Trust..............................63
Tax Characterization of the Owner Trusts..............................63
Tax Characterization of the Notes.....................................63
Taxation of Interest Income on the Notes..............................63
Possible Alternative Characterizations................................64
Non-U.S. Note Owners..................................................65
Information Reporting and Backup
Withholding..........................................................67
State and Local Taxation..............................................68
Employee Benefit Plan Considerations........................................68
Certain ERISA Considerations With
Respect to Notes.....................................................69
Prohibited Transaction Considerations.................................69
Plan of Distribution........................................................70
Legal Matters...............................................................71
Reports to Noteholders......................................................71
Where You Can Find More Information.........................................72
Glossary of Terms For Prospectus............................................73
Overview of the Information in this Prospectus
and the Prospectus Supplement
We provide information to you about the notes in two separate
documents that progressively provide more detail: (a) this prospectus,
which provides general information, some of which may not apply to a
particular series of notes, including your series, and (b) the prospectus
supplement, which will describe the specific terms of your series of notes,
including:
o the timing and amount of interest and principal payments,
o information about the receivables,
o information about credit enhancement for each class,
o credit ratings, and
o the method for selling the notes.
We have included a description of some of the basic terms and
characteristics of the notes that may be offered by this prospectus. We
have also included a description of any series certificate sold to an owner
trust to be pledged to secure notes. In addition, we have included a
description summarizing the terms and provisions that would apply to all
notes offered by this prospectus.
You should review carefully the descriptions of the series
certificates in this prospectus and the prospectus supplement. The most
significant asset of each owner trust will be a series certificate issued
by the master trust and pledged to secure the notes of the owner trust. The
terms and provisions of that series certificate will be reflected in the
terms and provisions of the notes secured by that series certificate.
Each series certificate issued by the master trust and pledged to
secure the notes of an owner trust will be:
o registered under the registration statement we have filed with the
SEC relating to the notes, and
o rated in one of the four highest rating categories by at least one
nationally recognized statistical rating agency.
You should rely only on the information provided in this prospectus
and the prospectus supplement, including the information incorporated by
reference. We have not authorized anyone to provide you with different
information.
We include cross-references in this prospectus and in the prospectus
supplement to captions in these materials where you can find further
related discussions. The preceding table of contents and the table of
contents included in the prospectus supplement provide the pages on which
these captions are located.
You can find a glossary of the defined terms that appear in this
document in bold faced type under the caption "Glossary of Terms for
Prospectus" beginning on page [76] in this prospectus.
The Master Trust
The Chase Credit Card Master Trust was formed in October 1995 to issue
certificates representing interests in a pool of credit card receivables
held by the master trust. Series Certificates issued by the master trust
will be issued in amounts, at prices and on terms to be determined at the
time of sale as set forth in a supplement to this prospectus.
The master trust exists through a Pooling and Servicing Agreement
among the following parties:
o Chase USA Card Funding LLC, as Transferor after [ ], 2002,
o Chase Manhattan Bank USA, National Association, as Transferor
after May 31, 1996 and prior to [ ], 2002,
o JPMorgan Chase Bank, as Transferor prior to June 1, 1996 and as
servicer, and
o The Bank of New York, as trustee.
JPMorgan Chase Bank has delegated substantially all of its servicing
duties to Chase USA.
The master trust will not engage in any business activity other than:
o acquiring and holding receivables,
o issuing series of certificates and a Transferor Certificate,
o making payments on these certificates,
o obtaining any credit enhancement or entering into any enhancement
contract necessary to issue Series Certificates,
o entering into swap agreements to convert specified cash flows from
one form to another, and
o engaging in related activities, which activities cannot be
contrary to the status of the master trust as a "qualifying
special purpose entity" under existing accounting literature.
Because of the restricted nature of its activities, we do not expect that
the obligations of the master trust will ever exceed the value of its
assets.
The Owner Trusts
Each series of notes will be issued by an owner trust. Each owner
trust will be formed as a statutory business trust or a common law trust
under the laws of the State of Delaware. Card Funding will deposit in an
owner trust a Series Certificate rated in one of the four highest rating
categories by at least one rating agency. Each owner trust will be the
certificateholder of a single Series Certificate. The descriptions of the
Series Certificates in this prospectus and in the related supplement are
important to purchasers of notes because the Series Certificate will be the
most significant asset of each owner trust. The terms and provisions of the
Series Certificate, including the payment terms, will be reflected in the
terms and provisions of the notes. Each series of notes will be issued
under an Indenture between the Owner Trustee and the Indenture Trustee. The
notes will be secured by the Series Certificate and the other collateral
pledged by the owner trust to secure the notes pursuant to the Indenture,
which may include a reserve account for the benefit of one or more classes
of notes.
The activities of each owner trust will be limited to:
o acquiring and holding a Series Certificate,
o issuing a single series of notes,
o making payments on the notes,
o entering into swap agreements to convert specified cash flows from
one form to another, and
o engaging in other activities that are appropriate to accomplish
those goals, which activities cannot be contrary to the status of
the owner trust as a "qualifying special purpose entity" under
existing accounting literature.
Chase USA's Credit Card Activities
Chase USA's portfolio of credit card receivables is originated through
MasterCard and VISA accounts principally established by:
o Chase USA,
o JPMorgan Chase Bank, before the transfer of its credit card
business to Chase USA in June 1996, and
o The Bank of New York, before the purchase of its credit card
operations by Chase USA in November 1997.
Some of these accounts are designated as master trust accounts. The
receivables owned by the master trust or which Chase USA will convey to
Card Funding under the terms of the Receivables Purchase Agreement and Card
Funding will convey to the master trust under the terms of the Pooling and
Servicing Agreement have been and will be generated from transactions made
by the holders of these master trust accounts.
Card Funding has the right, and currently expects, to designate
additional accounts from time to time as master trust accounts. Accounts
available for addition to the master trust might have been originated under
policies and procedures which differ from the policies and procedures used
to originate accounts currently in the master trust. If Card Funding adds
any of these accounts, it does not expect that these differences will have
a material effect on your interests.
Chase USA services credit card accounts at facilities located in:
o Hicksville, New York,
o San Antonio, Texas,
o Tempe, Arizona,
o Tampa, Florida,
o Wilmington, Delaware and Newark, Delaware.
Many data processing and administrative functions for the Bank
Portfolio are performed by First Data Resources, Inc.
Acquisition and Maintenance of Credit Card Accounts
The accounts in the master trust were generated under the VISA U.S.A.,
Inc. and MasterCard International Inc. programs. Chase USA, a member of
VISA and MasterCard International, originated or purchased these accounts.
VISA and MasterCard International license their respective marks permitting
financial institutions to issue credit cards to their customers. In
addition, VISA and MasterCard International provide clearing services
facilitating exchange of payments among member institutions and networks
linking members' credit authorization systems.
The VISA and MasterCard credit cards are issued by Chase USA as part
of the worldwide VISA and MasterCard International systems, and
transactions creating the receivables through the use of these credit cards
are processed through the VISA and MasterCard International authorization
and settlement systems.
VISA and MasterCard credit cards may be used:
o to purchase merchandise and services,
o to obtain cash advances from a financial institution, automated
teller machine, a check drawn on the account or as overdraft
protection, and
o to consolidate and transfer balances from other credit cards.
Amounts due on master trust accounts for any of these purposes are included
as receivables in the master trust.
Chase USA entered into an agreement with MasterCard International,
effective as of July 1, 1999, as a result of which the Bank Portfolio is
expected to have a larger proportion of MasterCard accounts in the future.
While this shift may be accompanied by some attrition of accounts, Chase
USA believes the amount of any such attrition will not be material. Based
on current analyses, Chase USA does not expect its performance of this
agreement or any such attrition of accounts to have a material adverse
effect on Chase USA, Card Funding, the master trust, the owner trusts or
any holders of notes.
Chase USA originates accounts through several channels:
o Applications. Chase USA makes applications for VISA and MasterCard
accounts available at all JPMorgan Chase Bank branches and point
of sale outlets. Chase USA advertises on television, radio and in
magazines with the goal of generating customer applications. Chase
USA also mails applications directly to prospective cardholders.
In each case, Chase USA reviews an application for completeness
and creditworthiness. Applications provide information to Chase
USA on the applicant's employment history, income and residence
status. A credit report on the applicant, requested from an
independent credit reporting agency, will also be evaluated.
Discrepancies between the credit report and the application must
be resolved before the application can be approved.
Chase USA generally evaluates the applicant's ability to repay
credit card balances through application of a credit scoring
system using proprietary models and models developed by
independent consulting firms. Credit scoring is intended to
provide a general indication, based on the information available
from the application, credit bureaus or other sources, of the
applicant's likelihood to repay his or her obligations. Credit
scoring assigns values to the information provided in each
applicant's application and credit bureau report and then
estimates the associated credit risk. The score at which an
applicant will be approved correlates to Chase USA's credit risk
tolerance at the time of the approval. Chase USA's personnel and
outside consultants regularly review the predictive accuracy of
the scoring models.
Applications are also evaluated with a proprietary profitability
model, which determines if the applicant is likely to meet Chase
USA's profitability expectations. These expectations are adjusted
from time to time based on economic conditions, Chase USA's and
JPMorgan Chase Bank's corporate goals and competitive pressures.
Applicants who fall outside of Chase USA's desired credit and
profitability segments will be denied a credit card.
An approved application is assigned an initial credit limit based
on the applicant's credit score and income level,
o Direct Mail and Telemarketing. Chase USA uses direct mail and
telemarketing solicitation campaigns to access individuals whom
Chase USA has identified as desirable cardholders. A list of
prospects from a variety of sources are screened at one or more
credit bureaus in accordance with Chase USA's credit criteria,
including previous payment patterns and longevity of account
relationships. Individuals qualifying for pre-screened direct mail
or telemarketing solicitation are conditionally offered a credit
card without having to complete a detailed application. Credit
limits offered to pre-screened prospective cardholders are based
on each individual's credit profile, profitability potential and
overall indebtedness relative to inferred income,
o Purchase of Accounts. Chase USA has added, and may continue to
add, accounts to its credit card portfolio by purchasing accounts
from other financial institutions. Chase USA originally opened
credit card accounts it purchased using criteria established by
another institution. These purchased accounts may not have been
subject to the same level of credit review as accounts Chase USA
initially established. Following acquisition, purchased accounts
are evaluated against the same criteria used by Chase USA to
maintain accounts which it originates. This evaluation might
indicate that the purchased account should be closed immediately,
which causes Chase USA to authorize no future purchases or cash
advances on the card. All accounts passing the evaluation remain
open, subject to the same criteria Chase USA uses to periodically
evaluate all of its accounts. Regardless of origination channel,
at least once per year each account is subject to a systematic
evaluation of payment and behavioral information. Chase USA may
adjust the account's credit limit up or down, based on updated
credit and profitability scores. Credit limits may also be
adjusted at the request of the applicant, subject to Chase USA's
independent evaluation of the applicant's payment and card usage
history.
Each cardholder is subject to an agreement governing the terms and
conditions of the account. In these agreements, Chase USA has reserved the
right:
o to change or end any terms, conditions, services or features of
each account, including increasing or decreasing finance charges,
fees or minimum payments, and
o to sell or transfer the accounts and/or any amounts owed on such
accounts to another creditor.
Billing and Payments
The accounts in the master trust have various billing and payment
structures, including varying minimum payment levels and fees. Chase USA
sends monthly billing statements to cardholders. The following information
reflects the current billing and payment characteristics of the master
trust accounts.
When an account is established it is randomly assigned to a billing
cycle. Currently there are 20 billing cycles, each with a different monthly
billing date. On each cycle's monthly billing date, all activity since the
previous monthly billing date for all accounts in the cycle are processed
and billed to cardholders.
Chase USA generally determines the minimum monthly payment with
respect to the accounts by multiplying the combined new balance of
purchases and cash advances, less any disputed amounts, by 2.000%. If the
calculated minimum payment amount is less than $10.00, it is increased to
$10.00. The sum of this amount and any past due amounts equals the minimum
payment amount. The minimum payment, however, is never more than the new
balance.
When each account's monthly activity is processed for a billing cycle,
finance charges are assessed in two ways:
o Finance Charges on New Purchases. A daily periodic finance charge
is assessed on principal receivables from new purchases if the
following criteria are met:
- on the first day of the billing cycle there was a balance
outstanding; and
- there was a balance outstanding on the payment date shown on
the previous monthly statement.
If a finance charge is assessed on a new purchase, it will be
calculated as described below:
o Finance Charges on Cash Advances and Pre-Existing Purchases. Daily
periodic finance charges on cash advances and pre-existing purchase
balances are calculated as follows:
- (average daily cash advance or pre-existing purchase balance)
x (applicable daily periodic finance charge rate) x (number
of days in the billing cycle)
In calculating the average daily cash advance and pre-existing
purchase balance, Chase USA will add the interest amount accrued on the
previous day's ending balance to the current day's balance. New cash
advances and new purchases are generally included in their respective
average daily balances from the date the advance or purchase occurs,
although--as noted above--in some cases finance charges do not begin to
accrue until the first day of the following billing cycle.
Chase USA offers fixed rate and variable rate accounts. The annual
percentage rate for fixed rate accounts generally ranges from 9.9% per
annum to 19.8% per annum. The current annual percentage rate for variable
rate accounts is based on the prime rate published in the "Money Rates"
table of The Wall Street Journal plus a spread generally ranging from 4.4%
to 14.99%. Chase USA also offers temporary promotional rates and
promotional rates on transferred balances. In specific situations, the
periodic finance charges on a limited number of accounts may be either
greater than or less than those assessed by Chase USA generally. To the
extent that the amount of any finance charge applicable to a purchase
balance is less than $0.50, the Bank increases this amount to $0.50.
Chase USA charges annual membership fees on some accounts while other
accounts carry no annual membership fee. For those accounts with an annual
membership fee, the fee is generally $20.00 for regular accounts, $40.00
for premium fixed rate accounts and $45.00 for premium variable rate
accounts. Chase USA may waive all or a portion of annual membership fees in
connection with solicitations of new accounts--and has done so for portions
of recent solicitations--or when Chase USA determines that, for competitive
reasons, a waiver is necessary. In addition to the annual membership fee,
Chase USA may charge accounts other fees generally at the rates specified
below, including:
o a late fee of $29.00 if Chase USA does not receive the required
minimum monthly payment by the payment due date noted on the
monthly billing statement,
o a cash advance fee of 3.0% of the amount of each cash advance,
with a minimum fee of $5.00 for each cash advance,
o a balance transfer fee of $50 for each balance transfer, which fee
may be reduced in Chase USA's discretion in any balance transfer
offer it makes,
o a fee of $29.00 for each check written on a credit card account--a
form of cash advance--which Chase USA does not honor because the
credit card account is delinquent, overdrawn or closed,
o a fee of $29.00 for each dishonored check sent as payment by the
cardholder, and
o an overlimit charge of $29.00 if, at the end of the billing cycle,
the total amount owed for principal and finance charges exceeds
the cardholder's credit line.
Cardholder payments to Chase USA are processed and applied to any
billed and unpaid finance charges and to billed and unpaid transactions in
the order determined by Chase USA. Any excess is applied to unbilled
transactions in the order determined by Chase USA and then to unbilled
finance charges. We can give you no assurance that periodic finance
charges, fees and other charges will remain at current levels in the
future.
Collection of Delinquent Accounts
An account is "delinquent" if, by the payment due date shown on the
account's monthly statement, Chase USA has not received the minimum monthly
payment. An account is "over limit" if its posted balance exceeds its
credit limit.
Efforts to collect delinquent credit card receivables are made by
Chase USA's personnel, collection agencies and attorneys retained by Chase
USA. Collection procedures are determined by an adaptive risk control
system that uses statistical models and basic account financial information
to determine the steps to be followed at various stages of delinquency.
Generally, Chase USA includes a request for payment of overdue amounts on
billing statements issued after the account becomes delinquent. In
addition, after a period determined by the risk control system, Chase USA
mails a separate notice to the cardholder with:
o notification that the account is delinquent,
o a warning that credit privileges may be revoked, and
o a request for payment of the delinquent amount.
Collection personnel generally initiate telephone contact with cardholders
whose credit card accounts have become 30 days or more delinquent. If the
initial telephone contact fails to resolve the delinquency, Chase USA
continues to contact the cardholder by telephone and by mail.
Based upon the risk control system's analysis, Chase USA may suspend
an account as early as the date on which the account becomes 30 days or
more delinquent. Chase USA generally suspends the account by the time the
account becomes 50 days delinquent. One hundred days after an account
becomes delinquent the credit card is automatically canceled. Based on the
risk control system's analysis of a delinquent cardholder's behavior, Chase
USA may take any or all of the above actions earlier than indicated here.
In some cases, depending on the financial profile of the cardholder and the
stated reason for and magnitude of a delinquency, Chase USA may enter into
arrangements with a delinquent cardholder to extend or otherwise change the
payment schedule.
Chase USA's policy is to charge-off an account in the billing cycle
immediately following the cycle in which the account became one hundred
fifty (150) days delinquent. If Chase USA receives notice that a cardholder
is the subject of a bankruptcy proceeding, the Bank charges off such
cardholder's account upon the earlier of sixty (60) days after receipt of
such notice and the time period set forth in the previous sentence.
During the fourth quarter of 2000, JPMC implemented a revised policy
for consumer loan charge-offs to conform with the policy statement adopted
by the Federal Financial Institutions Examination Council. The FFIEC
policy, originally issued in February 1999, established uniform guidelines
for the charge-off of consumer loans to delinquent, bankrupt, deceased and
fraudulent borrowers. JPMC and Chase USA do not believe that the revised
charge-off policy will materially affect the interests of holders of the
notes.
Chase USA also offers a "Flexible Payment Program" to certain
delinquent cardholders who have experienced temporary financial setbacks.
In addition, third-party consumer credit counseling services with which
Chase USA has no affiliation, provide external debt management programs,
which cardholders may elect to use. For both program types, participating
cardholders must agree with Chase USA to a schedule of fixed monthly
payments for a specified duration at a lowered annual percentage rate and
as a result the account will be reported as current. Upon the withdrawal of
a customer from either program type, the account returns to its
pre-existing terms and may be returned to the pre-existing level of
delinquency or may age normally thereafter.
Description of First Data Resources, Inc.
First Data Resources, Inc. is located in Omaha, Nebraska and provides
computer data processing services primarily to the bankcard industry. First
Data Resources, Inc. is a subsidiary of First Data Corp.
Interchange
Financial institutions participating in the VISA and MasterCard
associations receive Interchange for performing specified tasks. Under the
VISA and MasterCard systems, a portion of Interchange in connection with
cardholder charges for goods and services is passed from banks which clear
the transactions for merchants to credit card issuing banks. MasterCard and
VISA set Interchange fees annually based on the number of credit card
transactions and the amount charged per transaction. MasterCard and VISA
may from time to time change the amount of Interchange reimbursed to banks
issuing their credit cards. Card Funding is required, under the terms of
the Pooling and Servicing Agreement, to transfer to the master trust a
percentage of Interchange. Each month, Interchange allocated to the master
trust is calculated as follows:
(Interchange for the Monthly Period) x (total amount of purchases
of merchandise and services in the Master Trust Portfolio) /
(total amount of purchases of merchandise and services in the
entire Bank Portfolio)
Interchange allocated to the master trust will be treated as
collections of finance charge receivables.
Recoveries
Chase USA is required, under the terms of the Receivables Purchase
Agreement, to transfer to Card Funding and Card Funding is required under
the terms of the Pooling and Servicing Agreement, to transfer to the master
trust a percentage of the recoveries on charged-off accounts received each
month. Each month, Recoveries allocated to the master trust are calculated
as follows:
(total Recoveries collected by Chase USA) x (defaulted receivables in
the Master Trust Portfolio) / (defaulted receivables in the Bank
Portfolio)
Recoveries allocated to the master trust are treated by the master
trust as collections of finance charge receivables.
The Receivables
The assets of the master trust include receivables generated through
accounts designated as master trust accounts, all of which are owned by
Chase USA. The master trust assets include:
o all monies due or to become due in payment of these receivables,
o all proceeds of these receivables,
o all proceeds of any credit insurance policies relating to these
receivables,
o any Interchange and Recoveries allocable to the master trust
because of these receivables,
o all monies on deposit in specified master trust bank accounts or
investments made with these monies, including any earned
investment proceeds if the supplement so indicates,
o proceeds of any credit enhancement, as described in the related
supplement, and
o proceeds of any derivative contracts between the master trust and
a counterparty, as described in the related supplement.
Receivables in the master trust consist of:
o principal receivables, which are amounts charged by master trust
account cardholders for goods and services, cash advances and
consolidation or transfer of balances from other credit cards, and
o finance charge receivables, which are periodic finance charges and
other amounts charged to master trust accounts, including cash
advance fees, late fees, and annual membership fees.
The master trust considers collections of Interchange and Recoveries
as collections of finance charge receivables.
Receivables conveyed to the master trust arise in accounts selected
from the Bank Portfolio and designated as master trust accounts. Initially,
a group of accounts was selected on the Cut-Off Date and designated as
master trust accounts; since then additional accounts have been designated
for inclusion in the master trust. Accounts initially designated as master
trust accounts, new accounts so designated and any future accounts
designated for inclusion in the master trust must meet eligibility criteria
set forth in the Pooling and Servicing Agreement. Receivables conveyed to
the master trust must also meet eligibility criteria set forth in the
Pooling and Servicing Agreement. If receivables conveyed to the master
trust are found to have been ineligible when created or designated for
inclusion, Card Funding must accept retransfer of these receivables and
either replace them with eligible receivables or pay the value of the
retransferred receivables to the master trust.
Card Funding has agreed to maintain a Minimum Transferor Interest in
the Master Trust Portfolio, based on the total outstanding amount of
principal receivables in the Master Trust Portfolio plus the total amount
on deposit in the Excess Funding Account. Card Funding has also agreed to
maintain a Minimum Aggregate Principal Receivables amount. If the average
daily Transferor Interest for any 30 consecutive days is below the Minimum
Transferor Interest, or the amount of principal receivables in the master
trust falls below the amount of Minimum Aggregate Principal Receivables,
Card Funding will require Chase USA by the terms of the Receivables
Purchase Agreement to designate accounts for addition to the master trust
so that the amount of receivables in these accounts, when added to
then-existing receivables in the master trust, equals or exceeds these
minimum levels. See "Description of the Securities--Description of the
Series Certificates --Addition of Master Trust Assets" for more information
on adding accounts to the master trust.
The Pooling and Servicing Agreement also gives Card Funding the right
to remove accounts from the designated list of master trust accounts. If
Card Funding does so, the master trust will reconvey all receivables in
these removed accounts, whether existing or to be created, to Card Funding.
See "Description of the Securities--Description of the Series
Certificates--Removal of Master Trust Assets" for more information on
removing accounts from the master trust.
When the master trust issues a new Series Certificate, Card Funding
will represent and warrant to the master trust that, as of the Closing Date
for the new series, the accounts designated as master trust accounts meet
the eligibility criteria set forth in the Pooling and Servicing Agreement.
See "Description of the Securities--Description of the Series
Certificates--Chase USA's Representations and Warranties" for more
information on eligibility criteria for accounts and receivables.
Purchases of Receivables
The receivables transferred to the master trust by Card Funding
beginning on [ ] were purchased by Card Funding from Chase USA pursuant to
the Receivables Purchase Agreement. In connection with the sale of
receivables to Card Funding, Chase USA has:
o filed appropriate UCC financing statements to evidence that
sale and to perfect Card Funding's right, title and interest
in those receivables; and
o indicated in its computer files that the receivables have
been sold to Card Funding by Chase USA.
Pursuant to the Receivables Purchase Agreement, Chase USA sold to
Card Funding all of its right, title and interest in and to:
o the receivables existing in the accounts and in additional
accounts as of their date of designation for inclusion in the
trust;
o all interchange, insurance proceeds and recoveries relating
to those receivables; and
o all proceeds of the receivables that are transferred to Card
Funding.
Pursuant to the Pooling and Servicing Agreement, those receivables are then
transferred immediately by Card Funding to the master trust, and Card
Funding has assigned to the master trust its rights under the Receivables
Purchase Agreement. However, Card Funding remains the holder of the
Transferor Certificate.
Chase USA's Representations and Warranties
In the Receivables Purchase Agreement, Chase USA represents and
warrants to Card Funding, to the effect that, among other things, as of the
effective date of such agreement and as of the date of each sale of
receivables to Card Funding:
o Chase USA has the authority to perform its obligations under
the Receivables Purchase Agreement;
o The Receivables Purchase Agreement constitutes a legal, valid
and binding obligation enforceable against Card Funding;
o each receivable conveyed to Card Funding has been conveyed to
Card Funding free and clear of any lien;
o the Receivables Purchase Agreement constitutes a valid sale
to Card Funding of all of the right, title and interest of
Chase USA in the receivables and the sale is perfected under
the UCC; and
o each receivable sold to Card Funding is an Eligible
Receivable.
If Chase USA breaches its representation that the receivables are free and
clear of any lien and either:
o a receivable is charged off as uncollectible, Card Funding's
rights in the receivable are impaired or the proceeds of the
receivable are not available to Card Funding free and clear
of any lien;
o a lien arises as to a receivable; or
o the short term debt rating of the Originator falls below
"P-1" by Moody's or "A-1" by S&P;
then Chase USA will be obliged to repurchase the receivable.
Chase USA will also be obliged to repurchase any receivables after 60 days
if Chase USA breaches any other of its representations and warranties set
forth in the Receivables Purchase Agreement and as a result:
o the related Account becomes uncollectible;
o Card Funding's rights in the receivable become impaired; or
o the proceeds of the receivable are not available to Card
Funding free and clear of any lien.
The purchase price for that ineligible receivable will be the unpaid
balance of that receivable.
Chase USA indemnifies Card Funding for all losses resulting from the a
breach of any of its representations and warranties under the Receivables
Purchase Agreement.
Amendments to the Receivables Purchase Agreement
The Receivables Purchase Agreement may be amended by Chase USA and
Card Funding without consent of the noteholders if:
o Chase USA provides an officer's certificate to the effect
that such amendment will not materially and adversely affect
the interests of any noteholder;
o Chase USA provides a tax opinion with respect to the
amendment;
o prior notice is given to the rating agencies; and
o the Rating Agency Condition is satisfied.
Use of Proceeds
If the master trust is issuing a Series Certificate, it will be
deposited in an owner trust in exchange for a series of notes. The net
proceeds from the sale of this series of notes will generally be paid to
Card Funding who will use such amounts to pay for receivables purchased
from Chase USA. Chase USA will use the amounts it receives from Card
Funding for general corporate purposes.
The attached supplement may state that some of these net proceeds will
be paid to other parties and/or used for other purposes, such as funding a
reserve account or spread account.
Maturity Considerations
Each series of notes issued by an owner trust will be secured by the
owner trust's pledge of a Series Certificate. The repayment of the notes of
each series will be dependent upon the payments made on the related Series
Certificate. Following the Revolving Period, each Series Certificate is
expected to begin to accumulate principal or begin to distribute principal
to the owner trust for payment to the related noteholders. The attached
supplement describes the conditions under which an accumulation or
amortization period will begin for the Series Certificate related to your
class of notes.
Principal will accumulate in a funding account if the Series
Certificate related to your notes features controlled accumulation or rapid
accumulation and one of these principal accumulation periods begins. As
described in the attached supplement, during controlled accumulation on
each Transfer Date an amount of principal, up to the amount specified, will
be set aside in the funding account. If a Pay Out Event occurs and the
Series Certificate related to your notes features rapid accumulation, the
full amount of principal available to the Series Certificate related to
your notes will be deposited in a funding account, up to the amount
specified in the related supplement. This accumulated principal will be
paid to you on the expected payment date or dates for your class of notes,
or earlier if an amortization period begins before your first expected
principal payment date. Note that although your series may feature an
accumulation period, your class of notes may not make use of it.
Principal will be paid to you in increments--up to the amount
specified in the attached supplement--if the Series Certificate related to
your class of notes features controlled amortization and this period
begins. Your class of notes might also begin to pay principal to you if the
attached supplement specifies that your class will begin rapid
amortization. If a Pay Out Event occurs with respect to a Series
Certificate, principal may be paid earlier than scheduled on the related
notes.
If the series described in the attached supplement features multiple
classes, different classes of your series may have differing priorities for
the payment of principal. This means that noteholders of other classes
could begin to receive payments of principal before you do.
We can give you no assurance that principal will be available when
expected, either to accumulate or to pay to you. The scheduled payment date
or dates for your class of notes are based upon assumptions about payment
rates on the master trust's credit card receivables, as detailed in the
attached supplement. Neither Card Funding nor Chase USA can give assurance
that these payment rate assumptions will be correct. Payment rates depend
on collections of receivables; collections can vary seasonally and are also
affected by general economic conditions and the payment habits of
individual cardholders. The attached supplement will provide historical
payment rates, total charge-offs and other information relating to the
master trust's receivables. We cannot assure you that future payment rates,
charge-offs or other factors will be consistent with this historical data.
The expected life of your notes might be longer than expected if principal
is collected more slowly. The attached supplement may detail that if the
principal payment rate for the receivables falls below a specified level, a
Pay Out Event will occur. The occurrence of any Pay Out Event may
substantially shorten the average life of your notes. Your notes may also
be repaid earlier than scheduled when an Event of Default occurs. See
"Description of the Securities --Description of the Notes--The
Indentures--Events of Default: Rights Upon Event of Default."
The attached supplement will state if the Series Certificate related
to your notes is a Companion Series to any other outstanding Series
Certificate. If rapid accumulation begins with respect to, or a Pay Out
Event occurs to, a series with a Companion Series, the Companion Series may
experience delayed payments of principal.
See the table on page [31] for a more complete description of possible
accumulation and amortization periods. See "Maturity Considerations" in the
attached supplement for specific information about how your series will
accumulate and/or pay principal, as well as historical payment rate
information for the master trust.
Chase USA
Chase USA, a wholly-owned subsidiary of JPMC, was formed in 1982 and
is headquartered in Newark, Delaware. Chase USA is currently chartered as a
national bank and as such is regulated primarily by the United States
Comptroller of the Currency. Chase USA's activities are predominantly
related to credit card lending and other forms of consumer lending.
The principal executive office of Chase USA is located at White Clay
Center Building 200, Route 273, Newark, Delaware 19711, telephone number
(302) 575-5000.
On December 31, 2000, J.P. Morgan & Co. Incorporated and The Chase
Manhattan Corporation completed their merger, with the surviving
corporation being named J.P. Morgan Chase & Co. JPMorgan Chase Bank and
Chase USA are the principal banking subsidiaries of JPMC.
Card Funding
Card Funding is a limited liability company formed under the laws of
the State of Delaware on January 7, 2002 and is a wholly-owned subsidiary
of Chase USA. Card Funding was organized for the limited purposes of
purchasing, holding, owning and transferring receivables and related
activities. The office of Card Funding is at White Clay Center Building
200, Route 273, Newark, Delaware 19711.
Description of the Securities
The notes from each owner trust offered through this prospectus and
the attached supplement and will be issued in "series" consisting of one or
more "classes."
o Notes. Each series of notes will be an obligation of a specified
owner trust, the primary asset of which will be a Series
Certificate issued by the master trust through the Pooling and
Servicing Agreement and a Series Supplement to the Pooling and
Servicing Agreement. Each series of notes from an owner trust will
be issued through an Indenture, entered into by the Owner Trustee
and the Indenture Trustee. The attached supplement describes any
provisions of the notes supplementing the information in this
prospectus.
o Series Certificates. Each Series Certificate will represent an
interest in the master trust distinct from the Transferor
Certificate and any other series of certificates issued by the
master trust. Each Series Certificate will be issued through the
Pooling and Servicing Agreement and a Series Supplement to the
Pooling and Servicing Agreement.
Following is a summary of provisions of the notes and the Series
Certificate related to the notes which you are purchasing. This summary
describes the material provisions common to each series of notes and
related Series Certificate; the attached supplement will give you
additional information specific to the notes and the Series Certificate
related to the notes which you are purchasing. This summary is qualified in
its entirety by reference to the provisions of the Pooling and Servicing
Agreement, the Series Supplement and the related indenture, deposit and
administration agreement and trust agreement.
Each series of notes may consist of one or more classes, one or more
of which may be senior to other classes. Each class of a series will
evidence the right to receive a specified portion of principal and finance
charge collections on receivables in the Master Trust Portfolio. Each class
of a series may differ from other classes in some aspects, including:
o maturity date,
o interest rate, and
o availability and amount of credit enhancement.
Payments will be made to noteholders in whose names the notes were
registered on the Record Dates specified in the related supplement.
Generally, notes offered through this prospectus and the attached
supplement:
o will be registered in the name of a DTC nominee,
o will be available for purchase in minimum denominations and
integral multiples of $1,000, and
o will be available for purchase in book-entry form only.
We call the notes in book-entry form, in which you will hold a
beneficial interest as described below under "--Book-Entry Registration,"
"global notes."
The attached supplement will specify if your notes have different
characteristics from those listed above.
The attached supplement may state that application will be made to
list your series or class of notes on the Luxembourg Stock Exchange or
another exchange.
Form of Your Notes
Following is a description of the form your notes will take. We also
describe how your notes will be transferred and how payments will be made
to you.
The information in this section concerning DTC and DTC's book-entry
system has been provided by DTC. Card Funding has not independently
verified the accuracy of this information. DTC has informed Card Funding
that its nominee will be Cede. Accordingly, Cede is expected to be the
holder of record of each series of notes. This means that you, as an owner
of notes, will generally not be entitled to Definitive Notes representing
your interest in the issued notes: you will own notes through a book-entry
record maintained by DTC. References in this document to distributions,
reports, notices and statements will be made to DTC or Cede, as registered
holder of the notes, for distribution to you in accordance with DTC
procedures. All references in this document to actions by noteholders shall
refer to actions taken by DTC upon instructions from DTC participants.
You may hold your notes through DTC in the U.S., Clearstream or
Euroclear in Europe or in any other manner described in the attached
supplement. You may hold your notes directly with one of these systems if
you are a participant in the system, or indirectly through organizations
which are participants.
DTC
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and
a "clearing agency" registered under the Securities Exchange Act of 1934.
DTC holds securities that its participating organizations deposit with DTC.
DTC also facilitates the clearance and settlement among DTC participants of
securities transactions, such as transfers and pledges, in deposited
securities through electronic book-entry changes in DTC participants'
accounts, eliminating the need for physical movement of notes. DTC
participants include securities brokers and dealers, banks, trust companies
and clearing corporations and may include other organizations. DTC is owned
by a number of its DTC participants and the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Indirect access to the DTC system is also
available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship
with a DTC participant, either directly or indirectly. The rules applicable
to DTC and its DTC participants are on file with the SEC.
The information set forth in this section concerning DTC has been
provided by DTC for informational purposes only and is not intended to
serve as a representation, warranty or contract modification of any kind.
Card Funding makes no representations as to the accuracy or completeness of
such information.
Clearstream
Clearstream is incorporated under the laws of Luxembourg. Clearstream
holds securities for Clearstream Customers and facilitates the clearance
and settlement of securities transactions between Clearstream Customers
through electronic book entry changes in accounts of Clearstream Customers,
thereby eliminating the need for physical movement of notes. Transactions
may be settled through Clearstream in any of 36 currencies, including
United States dollars. Clearstream provides to its Clearstream Customers,
among other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. Clearstream also deals with domestic securities markets in over
30 countries through established depository and custodial relationships.
Clearstream is registered as a bank in Luxembourg, as such is subject to
regulation by the Commission de Surveillance du Secteur Financier, which
supervises Luxembourg banks. Clearstream Customers are world-wide financial
institutions including underwriters, securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations and
may include the underwriters of any series of notes. Clearstream Customers
in the U.S. are limited to securities brokers and dealers and banks.
Currently, Clearstream has approximately 2,000 customers located in over 80
counties, including all major European countries, Canada and the United
States. Indirect access to Clearstream is also available to other
institutions that clear through or maintain a custodial relationship with
an account holder of Clearstream. Clearstream has established an electronic
bridge with Euroclear Bank, S.A./N.V. as the operator of the Euroclear
system in Brussels to facilitate settlement of trades between Clearstream
and Euroclear.
Euroclear
The Euroclear system was created in 1968 to hold securities of
Euroclear Participants and to clear and settle transactions between
Euroclear Participants through simultaneous electronic book-entry delivery
against payment, thereby eliminating the need for physical movement of
notes and any risk from lack of simultaneous transfers of securities and
cash. Transactions may now be settled in any of 34 currencies, including
U.S. dollars. The Euroclear system includes various other services,
including securities lending and borrowing and interfaces with domestic
markets in several countries generally similar to the arrangements for
cross-market transfers with DTC described below. The Euroclear system is
operated by Euroclear Bank, S.A./N.V., acting as the Euroclear operator,
under contract with the Cooperative. All operations are conducted by the
Euroclear operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear operator, not the
Cooperative. The Cooperative establishes policy for the Euroclear system on
behalf of Euroclear Participants. Euroclear Participants include banks
(including central banks), securities brokers and dealers and other
professional financial intermediaries and may include the underwriters of
the series of notes offered through this document. Indirect access to the
Euroclear system is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear Participant, either
directly or indirectly.
The Euroclear operator has a banking license from the Belgian Banking
and Finance Commission. As such, it is regulated and examined by the
Belgian Banking and Finance Commission.
Securities clearance accounts and cash accounts with the Euroclear
operator are governed by the Terms and Conditions Governing Use of
Euroclear and the related Operating Procedures of the Euroclear system and
applicable Belgian law. These terms and conditions govern transfers of
securities and cash within the Euroclear system, withdrawal of securities
and cash from the Euroclear system, and receipts of payments with respect
to securities in the Euroclear system. All securities in the Euroclear
system are held on a fungible basis without attribution of specific
certificates to specific securities clearance accounts. The Euroclear
operator acts under these terms and conditions only on behalf of Euroclear
Participants and has no record of or relationship with persons holding
through Euroclear Participants.
Book-Entry Registration
Cede, as DTC's nominee, will hold the global notes. Clearstream and
Euroclear will hold omnibus positions on behalf of Clearstream Customers
and Euroclear Participants, respectively, through customers' securities
accounts in Clearstream's and Euroclear's names on the books of their
respective depositaries. These depositaries will in turn hold these
positions in customers' securities accounts in the depositaries' names on
DTC's books.
Transfers between DTC participants will occur in accordance with DTC
rules. Transfers between Clearstream Customers and Euroclear Participants
will occur in the ordinary way in accordance with their applicable rules
and operating procedures. Cross-market transfers between persons holding
notes directly or indirectly through DTC, on the one hand, and directly or
indirectly through Clearstream Customers or Euroclear Participants, on the
other, will be effected in DTC in accordance with DTC rules on behalf of
the relevant European international clearing system by its depositary.
However, these cross-market transactions will require delivery of
instructions to the relevant European international clearing system by the
counterparty in the system in accordance with its rules and procedures, and
within its established European time deadlines. The relevant European
international clearing system will, if the transaction meets its settlement
requirements, deliver instructions to its depositary to take action to
effect final settlement on its behalf by delivering or receiving notes in
DTC, and making or receiving payment in accordance with normal procedures
for same-day funds settlement applicable to DTC. Clearstream Customers and
Euroclear Participants may not deliver instructions directly to the
depositaries.
Because of time-zone differences, credits of notes in Clearstream or
Euroclear as a result of a transaction with a DTC participant will be made
during the subsequent securities settlement processing, dated the business
day following the DTC settlement date, and such credits or any transactions
in such securities settled during such processing will be reported to the
relevant Clearstream Customers or Euroclear Participants on such day. Cash
received in Clearstream or Euroclear as a result of sales of notes by or
through a Clearstream Customer or a Euroclear Participant will be received
with value on the DTC settlement date but will be available in the relevant
Clearstream or Euroclear cash account only as of the business day following
settlement in DTC.
Your purchases of notes under the DTC system must be made by or
through DTC participants, which will receive a credit for the notes on
DTC's records. Your ownership interest is in turn recorded on the DTC
participants' and indirect participants' records. You will not receive
written confirmation from DTC of their purchase, but you can expect to
receive written confirmation providing details of the transaction, as well
as periodic statements of your holdings, from the DTC participant or
indirect participant through which you entered into the transaction.
Transfers of ownership interests in the notes are accomplished by entries
made on the books of DTC participants acting on behalf of you and other
noteholders. You will not receive notes representing your ownership
interest in the notes offered through this document, except in the event
that use of the book-entry system for these notes is discontinued.
To facilitate subsequent transfers, all notes deposited by DTC
participants with DTC are registered in the name of DTC's nominee, Cede.
The deposit of notes with DTC and their registration in the name of Cede
effects no change in beneficial ownership. DTC has no knowledge of the
actual owners of the notes; DTC's records reflect only the identity of the
DTC participants to whose accounts the notes are credited, which may or may
not be the actual note owners. DTC participants remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to DTC
participants, by DTC participants to indirect participants, and by DTC
participants and indirect participants to noteholders will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither DTC nor Cede will consent or vote with respect to these notes.
Under its usual procedures, DTC mails an omnibus proxy to Chase USA as soon
as possible after the record date, which assigns Cede's consenting or
voting rights to those DTC participants to whose accounts these notes are
credited on the relevant record date.
Principal and interest payments on these notes will be made to DTC.
DTC's practice is to credit DTC participants' accounts on the applicable
Payment Date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment
on such Payment Date. Payments by DTC participants to noteholders will be
governed by standing instructions and customary practices, as is the case
with notes held for the accounts of customers in bearer form or registered
in "street name" and will be the responsibility of such DTC participant and
not of DTC, the master trust trustee, the Indenture Trustee, the Owner
Trustee, Card Funding or Chase USA, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal
and interest to DTC is the responsibility of the paying agent, disbursement
of these payments to DTC participants shall be the responsibility of DTC,
and disbursement of such payments to noteholders shall be the
responsibility of DTC participants and indirect participants.
DTC may discontinue providing its services as securities depository
for these notes at any time by giving reasonable notice to Card Funding,
the master trust trustee or the Indenture Trustee. If this occurs, in the
event that a successor securities depository is not obtained, Definitive
Notes will be printed and delivered. Card Funding may decide to discontinue
use of the system of book-entry transfers through DTC or a successor
securities depository. In that event, Definitive Notes will be delivered to
each noteholder. See "--Definitive Notes" for a description of the
circumstances under which Definitive Notes will be issued.
Distributions on notes held through Clearstream or Euroclear will be
credited to the cash accounts of Clearstream Customers or Euroclear
Participants in accordance with the relevant system's rules and procedures,
to the extent received by its depositary. Such distributions will be
subject to tax reporting in accordance with relevant U.S. tax laws and
regulations as described under "--Certain U.S. Federal Income Tax
Documentation Procedures relating to Global Notes" and "Tax Matters."
Clearstream or the Euroclear operator, as the case may be, will take any
other action permitted to be taken by a noteholder under the Indenture on
behalf of a Clearstream Customer or Euroclear Participant only in
accordance with its relevant rules and procedures and subject to its
depositary's ability to effect such actions on its behalf through DTC.
Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of notes among their
participants, they are under no obligation to perform or continue to
perform these procedures and these procedures may be discontinued at any
time.
Definitive Notes
Although the attached supplement may indicate that this series of
notes, or one or more classes of this series, may be issued in a different
form, it is expected that notes offered through this document will be
issued in book-entry form. If these notes are initially issued in
book-entry form, Definitive Notes in fully registered, certificated form
will not be issued to any party other than DTC or its nominee unless:
o Card Funding advises the Owner Trustee for this series in writing
that DTC is no longer willing or able to discharge properly its
responsibilities as depository with respect to this series of
notes, and the Owner Trustee or Card Funding is unable to locate a
qualified successor,
o Card Funding, at its option, advises the Owner Trustee for this
series in writing that it elects to terminate the book-entry
system through DTC, or
o after the occurrence of a Servicer Default or an Event of Default
noteholders representing not less than 50%--or such other
percentage specified in the related indenture--of the outstanding
principal amount of the notes advise the Indenture Trustee and DTC
through DTC participants in writing of such Servicer Default or
Event of Default and DTC notifies the Indenture Trustee that the
continuation of a book-entry system through DTC or its successor
is no longer in the best interests of the noteholders.
If any of these events occur, DTC must notify all DTC participants of
the availability through DTC of Definitive Notes. Upon surrender by DTC of
the definitive note representing these notes and instructions for
re-registration, the Owner Trustee will recognize the holders of these
Definitive Notes as holders under the Indenture.
The Indenture Trustee will make payments of interest and principal on
notes that are Definitive Notes out of finance charge and principal account
collections that are allocated to the Series Certificate deposited in the
owner trust and received by the owner trust. Payments will be made directly
to holders of Definitive Notes in accordance with the procedures set forth
in this prospectus and any related indenture. Payments on each Payment
Date will be made to holders in whose names the Definitive Notes were
registered at the close of business on the related Record Date. If you own
Definitive Notes in an amount greater than a minimum level stated in the
Indenture, payments of principal and interest will be sent to you via wire
transfer. If you own less than this minimum level of Definitive Notes,
payments will be made by check and mailed to you at an address maintained
by the Owner Trustee.
The final payment on any note, whether a Definitive Note or the notes
registered in the name of DTC or its nominee, will be made only upon
presentation and surrender of the note at the office or agency specified in
the notice of final distribution to noteholders. The Indenture Trustee will
provide this notice to registered noteholders no later than the fifth day
of the month in which the final distribution will occur. If the notes are
listed on the Luxembourg Stock Exchange, payments of principal and
interest, including the final payment on any note, may also be made at the
offices of Banque Generale du Luxembourg, S.A.
Definitive Notes will be transferable and exchangeable at the offices
of any of the transfer agents and registrars, which shall initially be
JPMorgan Chase Bank and the Indenture Trustee. No service charge will be
imposed for any registration of transfer or exchange, but the transfer
agent and registrar may require payment of a sum sufficient to cover any
tax or other governmental charge imposed in connection with the transfer or
exchange. The transfer agent and registrar shall not be required to
register the transfer or exchange of Definitive Notes for a period of
fifteen days preceding the due date for any payment on the Definitive
Notes.
Initial Settlement
All notes will be held in book-entry form by DTC in the name of Cede
as nominee of DTC. Investors' interests in the notes will be represented
through financial institutions acting on their behalf as direct and
indirect participants in DTC. As a result, Clearstream and Euroclear will
hold positions on behalf of their participants through their respective
depositaries, which will hold positions in accounts as DTC participants.
Custody accounts of investors who elect to hold notes through DTC will
be credited with their holdings against payment in same-day funds on the
settlement date.
Investors who elect to hold notes through Clearstream or Euroclear
accounts will follow the settlement procedures that apply to conventional
eurobonds, except that there will be no temporary global note and no
"lock-up" or restricted period. Notes will be credited to the securities
custody accounts on the settlement date against payment in same-day funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important
to establish at the time of the trade where both the purchaser's and
seller's accounts are located to ensure that settlement can be made on the
desired value date.
Trading between DTC participants. Secondary market trading between
investors holding notes through DTC will be conducted according to the
rules and procedures applicable to U.S. corporate debt obligations.
Secondary market trading between DTC participants will be settled in
same-day funds.
Trading between Clearstream Customers and/or Euroclear Participants.
Secondary market trading between investors holding notes through
Clearstream and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in
accordance with conventional eurobond practice (i.e., seven calendar day
settlement). Secondary market trading between Clearstream Customers or
Euroclear Participants will be settled using the procedures applicable to
conventional eurobonds in same-day funds.
Trading between DTC seller and Clearstream or Euroclear purchaser.
When notes are to be transferred from the account of a DTC participant to
the account of a Clearstream Customer or a Euroclear Participant, the
purchaser will send instructions to Clearstream or Euroclear through a
Clearstream Customer or Euroclear Participant at least one business day
prior to settlement. Clearstream or Euroclear will instruct the respective
depositary, as the case may be, to receive the notes against payment.
Payment will include interest accrued on the notes from and including the
last coupon payment date to and excluding the settlement date. Payment will
then be made by the respective depositary to the DTC participant's account
against delivery of the notes. After settlement has been completed, the
notes will be credited to the respective clearing system and by the
clearing system, in accordance with its usual procedures, to the
Clearstream Customer's or Euroclear Participant's account. The notes credit
will appear the next day, European time, and the cash debit will be
back-valued to, and the interest on the notes will accrue from, the value
date which would be the preceding day when settlement occurred in New York.
If settlement is not completed on the intended value date, i.e., the trade
fails, the Clearstream or Euroclear cash debit will be valued instead as of
the actual settlement date.
Clearstream Customers and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to
pre-position funds for settlement, either from cash on hand or existing
lines of credit, as they would for any settlement occurring within
Clearstream or Euroclear. Under this approach, they may take on credit
exposure to Clearstream or Euroclear until the notes are credited to their
accounts one day later.
As an alternative, if Clearstream or Euroclear has extended a line of
credit to them, Clearstream Customers or Euroclear Participants can elect
not to pre-position funds and allow that credit line to be drawn upon the
finance settlement. Under this procedure, Clearstream Customers or
Euroclear Participants purchasing notes would incur overdraft charges for
one day, assuming they cleared the overdraft when the notes were credited
to their accounts. However, interest on the notes would accrue from the
value date. Therefore, in many cases the investment income on the notes
earned during that one-day period may substantially reduce or offset the
amount of such overdraft charges, although this result will depend on each
Clearstream Customer's or Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours,
DTC participants can use their usual procedures for sending notes to the
respective depositary for the benefit of Clearstream Customers or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. In this way, to the DTC participant a cross-market
transaction will settle no differently than a trade between two DTC
participants.
Trading between Clearstream or Euroclear seller and DTC purchaser. Due
to time zone differences in their favor, Clearstream Customers and
Euroclear Participants may employ their customary procedures for
transactions in which notes are to be transferred by the respective
clearing system, through the respective depositary, to a DTC participant.
The seller will send instructions to Clearstream or Euroclear through a
Clearstream Customer or Euroclear Participant at least one business day
prior to settlement. In these cases, Clearstream or Euroclear will instruct
the respective depositary, as appropriate, to deliver the bonds to the DTC
participant's account against payment. Payment will include interest
accrued on the notes from and including the last coupon payment date to and
excluding the settlement date. The payment will then be reflected in the
account of the Clearstream Customer or Euroclear Participant the following
day, and receipt of the cash proceeds in the Clearstream Customer's or
Euroclear Participant's account would be back-valued to the value date
which would be the preceding day, when settlement occurred in New York.
Should the Clearstream Customer or Euroclear Participant have a line of
credit with its respective clearing system and elect to be in debit in
anticipation of receipt of the sale proceeds in its account, the
back-valuation will extinguish any overdraft charges incurred over that
one-day period. If settlement is not completed on the intended value date,
i.e., the trade fails, receipt of the cash proceeds in the Clearstream
Customer's or Euroclear Participant's account would instead be valued as of
the actual settlement date. Finally, day traders that use Clearstream or
Euroclear and that purchase notes from DTC participants for delivery to
Clearstream Customers or Euroclear Participants should note that these
trades would automatically fail on the sale side unless affirmative action
were taken. At least three techniques should be readily available to
eliminate this potential problem:
(1) borrowing through Clearstream or Euroclear for one day--until
the purchase side of the day trade is reflected in their
Clearstream or Euroclear accounts--in accordance with the
clearing system's customary procedure,
(2) borrowing the notes in the U.S. from a DTC participant no
later than one day prior to settlement which would give the
notes sufficient time to be reflected in their Clearstream or
Euroclear account in order to settle the sale side of the
trade, or
(3) staggering the value dates for the buy and sell sides of the
trade so that the value date for the purchase from the DTC
participant is at least one day prior to the value date for
the sale to the Clearstream Customer or Euroclear
Participant.
Certain U.S. Federal Income Tax Documentation Procedures Relating to Global
Notes
A beneficial owner of global notes holding notes through Clearstream
or Euroclear (or through DTC if the holder has an address outside the U.S.)
will be subject to the 30% U.S. withholding tax that generally applies to
payments of interest--including original issue discount--on registered debt
issued by U.S. Persons, unless:
o each clearing system, bank or other financial institution that
holds customers' notes in the ordinary course of its trade or
business in the chain of intermediaries between such beneficial
owner and the U.S. entity required to withhold tax complies with
applicable certification requirements, and
o the beneficial owner provides appropriate certification that it is
eligible to obtain an exemption from or a reduced rate of
withholding. Certification requirements for Non-U.S. Persons are
described under "Tax Matters--Non-U.S. Note Owners."
U.S. Persons should complete and file IRS Form W-9.
The term "U.S. Person" means:
o a citizen or resident of the United States,
o a corporation or partnership created or organized in the United
States or under the laws of the United States or any political
subdivision of the United States,
o an estate the income of which is subject to United States federal
income taxation regardless of its source, or
o a trust that:
- is subject to the primary supervision of a court within
the United States and one or more United States persons
has the authority to control all substantial decisions of
the trust, or
- has a valid election in effect under applicable U.S.
Treasury regulations to be treated as a United States person.
A Non-U.S. Person is a beneficial owner of notes that is not a U.S. Person.
Investors are advised to consult their own tax advisors for specific
tax advice concerning their holding and disposing of the global notes and
the documentation procedures relating thereto.
Description of the Series Certificates
Following is a summary of the material provisions common to all Series
Certificates issued through the Pooling and Servicing Agreement and
purchased by owner trusts and pledged to secure series of notes.
The assets of the master trust are allocated among:
o certificateholders of such series, and
o providers of uncertificated credit enhancement backed by
receivables.
Each Series Certificate issued by the master trust is backed by an
amount of principal receivables and amounts on deposit in various master
trust bank accounts. The attached supplement may describe that the Investor
Interest for your related series of notes will be adjusted by the amount of
funds deposited in a bank account or accounts, or adjusted in other ways.
These amounts can vary from period to period, and on any date are equal to:
(initial Investor Interest on the series' Closing Date) - (aggregate
principal payments made on the Series Certificates) - (aggregate
unreimbursed charge-offs and reallocated principal collections for the
series)
Any Collateral Interest in a series will also be included in that
series' Investor Interest; if the Series Certificate related to your notes
is enhanced by a Collateral Interest, a description will be included in the
attached supplement. During each series' Revolving Period, the amount of
the series' Investor Interest is expected to remain constant to the extent
noted in the attached supplement.
The aggregate Investor Interest in the master trust is the sum of the
Investor Interests for all Series Certificates issued from the master
trust.
The Series Certificates of each series represent undivided interests
in the assets of the master trust, including the right to each series'
Investor Percentage of all cardholder payments on receivables in the master
trust. Each Series Certificate will therefore be allocated varying amounts
of collections of principal and finance charges each month, and a varying
portion of receivables in defaulted accounts written off during each month.
Principal collections, finance charge collections and receivables in
defaulted accounts may be allocated to the Series Certificate related to
your series of notes in different ways: the attached supplement will
describe how the various Investor Percentages are calculated. If your
series includes multiple classes of notes, collections allocated to the
Series Certificate related to your series of notes may be further allocated
among each class. See "--Investor Percentage and Transferor Percentage" for
descriptions of the allocation percentages.
As a noteholder, your right to collections allocated to the Series
Certificate related to your series of notes is limited to the amounts
needed to make required payments on such Series Certificate. Collections
allocated to the Series Certificate related to your series of notes might
be reallocated. The attached supplement and the Pooling and Servicing
Agreement set forth how collections will be allocated to, or reallocated
from, the Series Certificate related to your series of notes.
Each Series Certificate may be included in a Group of series. Series
Certificates in a Group may share excess principal collections, finance
charge collections or both among themselves. The attached supplement will
state if the Series Certificate related to your series of notes is in a
Group and, if it is, what other series in such Group were outstanding on
your series' Closing Date.
Each Series Certificate represents interests in the master trust only,
and does not represent interests in or recourse obligations of Card
Funding, Chase USA, JPMorgan Chase Bank or any of their affiliates. A
Series Certificate is not a deposit and neither the Series Certificates nor
the underlying master trust accounts or receivables are insured or
guaranteed by the FDIC or any other governmental agency.
Transferor Interest
The total amount of principal receivables and amounts on deposit in
various master trust bank accounts minus the aggregate Investor Interest
and the interest of credit enhancement providers--if not included as part
of the Investor Interest--is the Transferor Interest. The Transferor
Interest may be certificated or uncertificated. When we refer to the
Transferor Certificate we mean this interest in the master trust in
certificated or uncertificated form. This interest in the master trust is
currently uncertificated. The holder of the Transferor Interest is entitled
to a varying percentage of cardholder payments from master trust
receivables, called the Transferor Percentage.
Card Funding currently owns, and expects to continue owning, the
Transferor Interest. See "--Issuing New Series Certificates."
The amount of principal receivables in the master trust will vary
daily as cardholder payments are received and new receivables are created.
The amount of the Transferor Interest will fluctuate from day to day as the
amount of master trust principal receivables varies. When a Series
Certificate begins to amortize or accumulate, the Investor Interest of the
Series Certificate will decline as principal payments are made--or
accumulated for future payment--to certificateholders. The Transferor
Interest will increase to reflect this decrease in the Investor Interest.
The Transferor Interest may be reduced through the issuance of a new
Series Certificate as described below under "--Issuing New Series
Certificates." The Transferor Interest may also be reduced, however, if:
o the servicer adjusts the amount of principal receivables in the
master trust for particular charge-offs from principal receivables
used to calculate the Transferor Interest, and
o the Transferor enters into a participation or other agreement with
another person who purchases an interest in the Transferor
Certificate.
See "--Card Funding's Representations and Warranties," "--Rebates and
Fraudulent Charges" and "--Application of Collections" for other
discussions on how the Transferor Interest may be reduced.
Issuing New Series Certificates
The Pooling and Servicing Agreement provides that Card Funding, as
owner of the Transferor Interest, may from time to time issue new Series
Certificates. Each new issuance would decrease the Transferor Interest and
increase the Investor Interest.
Each new Series Certificate may have a maturity date, principal
payment method, interest rate calculation method or other terms different
from any other outstanding Series Certificate. Each new Series Certificate
may also have credit enhancement available only to that Series Certificate.
Under the Pooling and Servicing Agreement, the master trust trustee holds
credit enhancement only for the benefit of a specific series.
For Card Funding to exchange a portion of its interest in the master
trust for a new series, Card Funding must:
o notify the master trust trustee at least five business days in
advance of the exchange,
o receive written confirmation from each rating agency rating an
outstanding series of certificates or series of notes that issuing
the new series of certificates will not cause a downgrade or
withdrawal of any ratings of any outstanding series of
certificates or notes,
o deliver to the master trust trustee a Series Supplement describing
the principal terms of the series,
o receive a Tax Opinion that issuing the new series of certificates
will not have adverse tax consequences for any outstanding series
of certificates or notes previously characterized as debt, and
o deliver an officer's certificate stating that there are enough
receivables in the master trust to support all existing series of
certificates and the new one.
After satisfaction of these conditions and any other conditions set forth
in the Pooling and Servicing Agreement, the master trust trustee will issue
a new series of certificates.
The Pooling and Servicing Agreement also allows the Transferor, in
addition to the new issuances described above, to transfer all or a portion
of the Transferor Interest, provided that before the transfer the master
trust trustee receives a Tax Opinion.
Interest Allocations
For each Series Certificate, interest will accrue from the date
specified in the applicable supplement, on the outstanding principal amount
of the Series Certificate at the applicable interest rate. Interest will be
distributed to the owner trust in the amounts and on the Transfer Dates
specified in the related supplement.
Interest payments made on each Transfer Date on a Series Certificate
will be funded from:
o collections of finance charges allocated to the series' Investor
Interest during the preceding Monthly Period or Monthly Periods,
o investment earnings, if any, on any funds held in master trust
bank accounts,
o any credit enhancement, to the extent described in the related
supplement, and
o any derivative counterparty, to the extent described in the
related supplement.
If interest payments will be made less frequently than monthly, an
Interest Funding Account may be established to accumulate the required
interest amount.
Principal Allocations
Each Series Certificate will be scheduled to receive principal in a
single payment, or in installments beginning on the Principal Commencement
Date for the series. The related supplement will set forth when the Series
Certificate is expected to receive principal.
Generally, each series will begin in the Revolving Period, during
which no principal will be paid to any class of the series. Collections of
principal receivables allocated to a Series Certificate in its Revolving
Period will be available, if specified in the related supplement, to other
series in a Group or paid to Card Funding as holder of the Transferor
Certificate.
Each Series Certificate will use one or more of the following
principal payment methods:
o principal amortization,
o controlled amortization,
o rapid amortization,
o controlled accumulation, and
o rapid accumulation.
One of the principal payment methods named above will commence at the
end of the Revolving Period and continue until:
o the Transfer Date on which the Investor Interest for the Series
Certificate is repaid,
o the date on which another principal payment method begins, or
o the Series Termination Date.
Each method involving accumulation will make periodic deposits into a
Principal Funding Account. At the end of the accumulation period, the
amount in the Principal Funding Account will be paid on the Series
Certificate related to your series of notes. Each method involving
amortization will make periodic payments of principal allocated to the
Series Certificate related to your series of notes. The frequency of
payments will be specified in the related supplement, but in the event of
rapid amortization payments will always be made monthly.
Descriptions of principal payment methods are found in Table I below.
The master trust trustee will transfer principal payments on the
Series Certificate to the owner trust. The related supplement will set
forth how these payments will be made to noteholders.
You may begin to receive payments of principal earlier or later than
expected. See "Maturity Considerations" for a discussion of how this might
occur.
Table I: Descriptions of Principal Payment Methods
PRINCIPAL CONTROLLED RAPID CONTROLLED RAPID
AMORTIZATION AMORTIZATION AMORTIZATION ACCUMULATION ACCUMULATION
Begins Principal Principal On first occurrence of Adjustable date, On first
Commencement Commencement a Pay Out Event set in related occurrence of a
Date for series Date for series supplement Rapid
Accumulation
Event for series
After Revolving Period Revolving Period Any other period Revolving Period Revolving Period
Controlled Controlled Controlled Controlled
amortization for amortization for amortization for amortization for
another class another class another class another class
Controlled Controlled Controlled Controlled
accumulation for accumulation for accumulation for accumulation for
another class Rapid another class Rapid another class another class
accumulation for accumulation for Rapid Rapid
another class another class accumulation for accumulation for
another class another class
Cannot Rapid amortization Rapid amortization N/A Rapid amortization Rapid amortization
Begin After Rapid
accumulation
Ends Upon first to occur Upon first to occur Upon first to occur of: Upon first to occurUpon first to occur
of: of: Repayment of series of: of:
Repayment of Repayment of Series Termination Repayment of Repayment of
series series Date series series
Beginning of rapid Beginning of rapid Beginning of Beginning of
amortization amortization rapid rapid amortization
Series Termination Series Termination amortization Series
Date Date Beginning of Termination
rapid Date
accumulation
Series
Termination Date
Amount Principal allocated toControlled Principal allocated to Controlled Deposit Principal allocated
Paid series (no more Amortization series (no more than Amount deposited to series
than initial Amount initial Investor each period, then deposited each
Investor Interest) Interest) paid to the owner period (no more
trust when period than initial
ends Investor
Interest, then
paid to the owner
trust on scheduled
payment date
Applies to Specific class Specific class Entire series Specific class Specific class
Additional Controlled Pay Out Events as set Controlled Deposit Rapid
Information Amortization forth in the related Amount as set Accumulation
Amount as set forth supplement forth in related Events as set
in related supplement; forth in the related
supplement subject to supplement
adjustment
Transfer and Assignment of Receivables
The master trust has all right, title and interest in and to the
receivables in accounts designated as master trust accounts, as well as all
future receivables created in these accounts. Chase USA, as Originator or
seller, and Card Funding, as Transferor, have indicated on their respective
computer files which accounts are designated as master trust accounts. When
new accounts are designated for inclusion in the master trust, Chase USA
will provide a complete list of these additional accounts to Card Funding
who will in turn provide such list to the master trust trustee. Chase USA
and Card Funding will file UCC financing statements meeting the
requirements of state law, reflecting the transfer of receivables from
Chase USA to Card Funding and from Card Funding to the Master Trust. Except
as noted above, Chase USA and Card Funding will take no other steps to
identify receivables in master trust accounts.
Card Funding's Representations and Warranties
When the master trust issues a new Series Certificate, Card Funding,
as Transferor, will make several representations and warranties to the
master trust, including the following:
o as of the Closing Date, Card Funding has the authority to
consummate the issuance, and
o as of the initial account selection date or the date each account
was added to the master trust, it was an Eligible Account.
If a representation or warranty made by Card Funding on the Closing
Date is later found to be materially incorrect when made, and:
o noteholders of your series had been materially and adversely
affected for a period of at least 60 days,
o notice had been given to Card Funding, and
o the condition persists beyond 60 days from the date of the notice,
a Pay Out Event for the Series Certificate related to your series of notes,
unless otherwise specified in the attached supplement, will automatically
occur without any declaration and upon such occurrence a rapid amortization
of principal will automatically begin.
Card Funding will make other representations and warranties,
including:
o the Pooling and Servicing Agreement constitutes a legal, valid and
binding obligation enforceable against Card Funding, and
o the master trust has all right, title and interest in the
receivables in the Master Trust Portfolio or has a first priority
perfected security interest in these receivables.
If either of these representations and warranties is ever breached, Card
Funding might be required to accept reassignment of the entire Master Trust
Portfolio. Certificateholders representing 50% or more of all of the master
trust's outstanding series' Investor Interest may vote to give Card Funding
60 or more days to cure the breach. If, at the end of this time, the breach
has not been cured, Card Funding:
o will be obligated to accept retransfer of the entire Master Trust
Portfolio, and
o will pay into the master trust's Principal Account on the next
Transfer Date a cash sum equal to the outstanding Investor
Interest and any accrued and unpaid interest due as of that date.
This will constitute payment in full of the aggregate Investor Interest.
Reassignment of the Master Trust Portfolio to Card Funding is the only
remedy to any breach of these representations and warranties.
Card Funding makes representations and warranties in the Pooling and
Servicing Agreement concerning master trust accounts and the receivables in
the Master Trust Portfolio. Only Eligible Accounts can be designated as
master trust accounts. Card Funding can give you no assurance that Eligible
Accounts will remain eligible once added to the master trust.
Card Funding also represents that each receivable in the Master Trust
Portfolio is an Eligible Receivable when created. If a receivable is found
to be ineligible when created, and this receivable is charged-off as
uncollectible or the master trust's rights to the receivable are impaired,
Card Funding must accept reassignment of the principal amount of this
ineligible receivable. The master trust trustee may allow Card Funding a
period of time to cure the ineligibility before requiring reassignment.
Card Funding will accept reassignment by directing JPMorgan Chase Bank, as
servicer, to deduct the principal amount of the ineligible receivable from
the Transferor Interest. If this would make the Transferor Interest a
negative number, Card Funding will make a cash deposit in the master
trust's Principal Account in the amount by which the Transferor Interest
would have been negative. Any deduction or deposit is considered a
repayment in full of the ineligible receivable. Card Funding's obligation
to accept reassignment of any ineligible receivable is the only remedy to
any breach of a representation or warranty concerning eligibility of
receivables.
The attached supplement may specify additional representations and
warranties made by Card Funding when your notes are issued. The master
trust trustee is not required to make periodic examinations of receivables
in the Master Trust Portfolio or any records relating to them. However,
JPMorgan Chase Bank, as servicer, will deliver to the master trust trustee
once each year an opinion of counsel affirming, among other things, that no
further action is necessary to maintain the master trust's perfected
security interest in the receivables.
Chase USA will make representations and warranties to Card Funding in
the Receivables Purchase Agreement similar to those made by Card Funding to
the master trust. See "The Receivables - Chase USA's Representations and
Warranties".
Addition of Master Trust Assets
Card Funding has the right to designate, from time to time, additional
accounts to be included as master trust accounts. As described above under
"The Receivables," Card Funding may also be obligated, from time to time,
to designate new accounts to be included as master trust accounts.
Each new account must be an Eligible Account at the time of its
designation. However, new accounts may not be of the same credit quality as
existing master trust accounts.
Card Funding is also permitted to add Participations to the master
trust from time to time. These Participations must be undivided interests
in a pool of assets primarily consisting of receivables arising under
consumer credit card accounts owned by Chase USA. To amend the Pooling and
Servicing Agreement so that a Participation may be added to the master
trust without certificateholder consent, the following must occur:
o Card Funding must deliver an officer's certificate to the master
trust trustee stating that, in Card Funding's reasonable belief,
adding the Participation will not have a material adverse effect
on certificateholders' interests, and
o the amendment allowing addition of the Participation will not
result in a downgrade or withdrawal of any ratings of any
outstanding series of certificates.
The SEC currently requires that any Participations added to the master
trust be registered under the Securities Act of 1933.
The Pooling and Servicing Agreement allows Card Funding to add
receivables in additional accounts to the master trust automatically upon
satisfaction of several conditions, including:
o each account from which the additional receivables are added must
be an Eligible Account,
o Card Funding must not have designated the account from which the
additional receivables are added as an account not to be added,
o each new account from which the additional receivables are added
was selected for inclusion in the master trust through a selection
process not harmful to certificateholders' interests, and
o as of the addition date, Card Funding is not insolvent.
In addition to the Participation addition requirements noted above,
Card Funding must satisfy several conditions to add Participations and-if
accounts are not being added automatically--accounts to the master trust,
including:
o notice to the master trust trustee, each rating agency rating an
outstanding series of certificates or notes and JPMorgan Chase
Bank, as servicer,
o delivery and acceptance by the master trust trustee of written
assignment of receivables in new accounts or Participations to the
master trust,
o delivery of a computer file or microfiche list with a list of all
new accounts or Participations,
o representation from Card Funding that, on the addition date, each
new account from which the additional receivables are added is an
Eligible Account and was selected for inclusion in the master
trust through a selection process not harmful to
certificateholders' interests,
o as of the addition date, representation from Card Funding that
Card Funding is not insolvent, and
o receipt of confirmation from each rating agency that the addition
will not result in a downgrade or withdrawal of any ratings of any
outstanding series of certificates or notes.
Card Funding expects to file a report on Form 8-K with the SEC on any
addition of assets to the master trust not related to an automatic account
addition.
Removal of Master Trust Assets
Card Funding has the right to remove accounts and Participations from
the master trust, subject to several conditions, including an officer's
certificate from Card Funding confirming:
o that removing the accounts or Participations will not cause a Pay
Out Event for any outstanding series,
o that Card Funding has delivered to the master trust trustee a list
of accounts or Participations to be removed,
o that Card Funding represents that the accounts to be removed were
not selected through a selection process believed to be materially
adverse to the interests of the certificateholders and
- a random selection procedure was used by Card Funding in
selecting the accounts to be removed--and only one such
removal is permitted for each monthly period, or
- the removed accounts are subject to an arrangement with a
third party where the third party has the right or the option
to purchase the removed accounts, which right or option has
arisen in response to a third-party action or decision not to
act and not the unilateral action of Card Funding, and the
third party has exercised that option,
o receipt of confirmation from each rating agency that the removal
will not result in a downgrade or withdrawal of any ratings of any
outstanding Series Certificate or series of certificates or notes,
o that the designation and reassignment of such receivables from
removed accounts will not:
- adversely affect the tax characterization as debt of any
class of investor certificates of any outstanding series or
class in respect of which an opinion was delivered at the
time of issuance that such class would be treated as debt for
U.S. federal income tax purposes,
- cause the master trust following such designation and
acceptance to be deemed to be an association taxable as a
corporation, and
- cause or constitute a taxable event in which gain or loss
would be recognized by any investor certificateholder or the
master trust, and
o that as of the removal date, either:
- the receivables are not more than 15% delinquent by estimated
principal amount and the weighted average delinquency of such
receivables is not more than 60 days, or
- the receivables are not more than 7% delinquent by estimated
principal amount and the weighted average delinquency of such
receivables does not exceed 90 days.
Card Funding also has the right to remove accounts that have receivables
balances of zero in certain circumstances.
Master Trust Bank Accounts
The master trust trustee has established and maintains the following
bank accounts on behalf of all series issued from the master trust:
o the Principal Account,
o the Finance Charge Account,
o the Collection Account,
o the Excess Funding Account, and
o one or more Distribution Accounts.
JPMorgan Chase Bank, as Paying Agent, has the revocable right to withdraw
funds from the Distribution Accounts to make distributions to
certificateholders.
The master trust trustee may establish, as set forth in the related
supplement, additional bank accounts for each series, including:
o the Interest Funding Account,
o the Principal Funding Account, and
o the Pre-Funding Account.
All of these bank accounts must be established with an Eligible
Institution, which may include:
o JPMorgan Chase Bank, as the servicer, or
o a depository institution, which may be the master trust trustee or
an affiliate, organized under the laws of the United States or any
state which at all times:
- has a certificate of deposit rating of "P-1" by Moody's,
- has either a long-term unsecured debt rating of "AAA" by S&P
or a certificate of deposit rating of "A-1+" by S&P, and
- is a member of the FDIC.
Funds on deposit in any of these master trust bank accounts are
invested in permitted investments, which generally include:
o U.S. government debt,
o deposits which mature within 90 days after the date of investment
at financial institutions having a rating in Moody's and S&P's
highest rating category,
o commercial paper, other than commercial paper issued by Chase USA
or any of its affiliates, having a rating in Moody's and S&P's
highest rating category,
o bankers' acceptances, other than bankers' acceptances issued by
Chase USA or any of its affiliates, from the highest-rated
financial institutions,
o some repurchase agreements, and
o any other investments, other than investments in Chase USA or any
of its affiliates, where the short-term unsecured debt or deposits
of the obligor on such investments have a rating in Moody's and
S&P's highest ratings category.
Deposits in series-specific bank accounts are for the benefit of the
related series, and the related supplement may set forth differing
permitted investments for amounts in these series-specific bank accounts.
Companion Series
The Series Certificate may be paired with a Companion Series in the
future. The issuance of a Companion Series is subject to the conditions
described above in "--Issuing New Series Certificates," including the
condition that the rating agencies confirm that the issuance of a Companion
Series will not have a negative impact on the ratings of any outstanding
series of certificates or notes.
A Companion Series may be funded with either a deposit to a
pre-funding account funded by the sale of the Companion Series or may have
a variable principal amount. Any pre-funding account would be for the
benefit of the Companion Series and not for the benefit of the Series
Certificate related to your notes.
As principal is allocated to the Series Certificate, the Investor
Interest of the Companion Series will increase and either:
o an equal amount of funds on deposit in the pre-funding account
will be released to Card Funding, or
o an interest in the variable funding certificate that is equal to
the principal allocated to the Series Certificate will be sold and
the proceeds will be distributed to Card Funding.
A Companion Series may be issued privately or sold publicly. A
Companion Series sold publicly will be registered under the registration
statement we have filed with the SEC relating to the notes and the Series
Certificates.
A Companion Series would be issued to finance the interest of Card
Funding in the Master Trust Portfolio. The Transferor Interest held by Card
Funding grows if the amount of Principal Receivables in the master trust
does not decrease and principal is paid to a series or accumulated in a
principal funding account for the benefit of a series. The Investor
Interest of a Companion Series will absorb what would otherwise be growth
in the Transferor Interest as a result of payments or deposits in a
principal funding account for the benefit of a series. Card Funding may
choose to issue a Companion Series rather than have the growth in the
Transferor Interest reflected on its balance sheet for accounting purposes.
We cannot assure you that terms of a Companion Series will not have an
adverse impact on the timing or amount of payments allocated to the Series
Certificate related to your notes. A Companion Series will have a claim
against the assets allocated to it by the master trust. The master trust
will have limited assets. If a rapid amortization or rapid accumulation
occurs for a Companion Series while the Series Certificate is outstanding,
the percentage of receivables allocated to the Series Certificate may be
reduced if the terms of the supplement relating to the Companion Series
required that the Companion Series also receive its share of principal
collections. In addition, if a rapid amortization or rapid accumulation
occurs for a Series Certificate, the percentage of receivables allocated to
the Companion Series may be reduced until the Series Certificate is paid in
full. See "--Funding Period" for more discussion on Companion Series.
Funding Period
For any series, principal receivables may not be available in the
amount of the issued Series Certificate. If this occurs, the initial
Investor Interest will be less than the Series Certificate principal
amount. In this case, the related supplement will set forth the terms of
the Funding Period, which is the period from the series' Closing Date to
the earlier of:
o the date the series' Investor Interest equals the Series
Certificate principal amount, and
o the date specified in the related supplement.
During the Funding Period, the series amount not invested in
receivables will be maintained in the Pre-Funding Account. On the Closing
Date, this amount may be up to 100% of the Series Certificate's principal
amount. The Investor Interest will increase as new receivables are conveyed
to the master trust or as the Investor Interests of other Series
Certificates are reduced. The Investor Interest may decrease due to
charge-offs allocated to the Series Certificate.
During the Funding Period, funds on deposit in the Pre-Funding Account
will be paid to Card Funding as the Investor Interest increases. If the
Funding Period does not end by the date specified in the related
supplement, any amount remaining in the Pre-Funding Account will be repaid
to the Series Certificates. This type of event may also cause repayment of
other amounts on the Series Certificates, as set forth in the related
supplement.
The prospectus supplement for a series with a Funding Period will set
forth:
o the initial Investor Interest,
o the full Investor Interest, which is the initial certificate
principal balance,
o the date on which the series' Investor Interest is expected to
equal the full Investor Interest,
o when the Funding Period will end, and
o what other events, if any, will occur if the end of the Funding
Period is reached before the full Investor Interest is funded.
A Companion Series may use a Funding Period to pair a new series with
an existing series in, or about to begin, principal amortization or
accumulation. As the Investor Interest for the existing series decreases,
the Investor Interest for the Companion Series will increase. If either the
existing series or the Companion Series experiences a Pay Out Event before
the Companion Series has reached its full Investor Interest, the Investor
Percentages for the two series may be reset as described in the related
supplements. This could have an effect on the allocation of principal
collections to one or both series. We can give you no assurance, if the
Series Certificate related to your notes is paired with a Companion Series,
that the terms of the Companion Series will have no impact on the timing or
amount of payments on the Series Certificate related to your notes.
Investor Percentage and Transferor Percentage
From the amounts allocated to the master trust, JPMorgan Chase Bank,
as servicer, will allocate finance charge collections, principal
collections and receivables in defaulted accounts to:
o each series,
o the Transferor Interest, and
o if the related supplement so states, to any credit enhancement
providers.
All allocations of these amounts will be made through the respective
Investor Percentages for each series, the Transferor Percentage and, where
appropriate, the Credit Enhancement Percentage. The related supplements
will set forth how the Investor Percentages are calculated.
The Transferor Percentage is, in all cases, equal to:
100% - (all Investor Percentages for outstanding series) -(all Credit
Enhancement Percentages for outstanding series)
Application of Collections
Except in the circumstance described below, JPMorgan Chase Bank, as
servicer, must deposit into the Collection Account, no later than two days
after processing, all payments made on receivables in the Master Trust
Portfolio. JPMorgan Chase Bank must also allocate these deposits between
accounts and to various parties, as described below. However, JPMorgan
Chase Bank will be able to make these deposits on a monthly or other
periodic basis if one of the following is true:
o all rating agencies rating an outstanding series agree in writing
that JPMorgan Chase Bank does not need to make daily deposits, or
o JPMorgan Chase Bank has a short-term rating of "P-1" from Moody's,
a short-term rating of "A-1" from S&P and deposit insurance from
the Bank Insurance Fund.
JPMorgan Chase Bank must make daily or periodic deposits to the Collection
Account only to the extent that the funds are needed for deposit into other
bank accounts or distribution on Series Certificates or to other parties.
If the Collection Account balance ever exceeds this amount for deposit or
distribution, JPMorgan Chase Bank will withdraw the excess.
Each time a Collection Account deposit is made, JPMorgan Chase Bank
will withdraw the following amounts and apply them as indicated:
o Transferor Interest and Principal. The Transferor Percentage of
deposits of principal and finance charge collections will be paid
or held for payment to Card Funding as holder of the Transferor
Certificate. However, if the Minimum Transferor Interest exceeds
the Transferor Interest on the relevant date of processing,
principal collections up to the amount of such excess otherwise
payable to the Transferor Interest will be deposited to the
Principal Account, the Excess Funding Account, or paid to Series
Certificates, as set forth in the Pooling and Servicing Agreement,
o Investor Finance Charges. For each series, the relevant Investor
Percentage of finance charge collections will be deposited into
the Finance Charge Account for allocation and distribution as set
forth in the related supplement,
o Investor Principal. Each series will be allocated a varying share
of principal collections based on the principal distribution
status of the series as follows:
- if the series is in the Revolving Period, the Investor
Percentage of principal collections allocated to the series
will be invested or held for investment in new receivables,
- if the series is in controlled accumulation or controlled
amortization, the Investor Percentage of principal
collections allocated to the series will be available to fund
the relevant period's controlled deposit amount or controlled
amortization amount, and
- if the series is in principal amortization or rapid
amortization, the Investor Percentage of principal
collections allocated to the series will be deposited into
the Principal Account for distribution as provided in the
related supplement.
As described in the related supplement, other series may use principal
collections not required by a series in any period to make deposits or
distributions. If the Minimum Transferor Interest exceeds the Transferor
Interest on the relevant date of processing, principal collections
allocated to but not needed by a series, up to the amount of such excess,
will be deposited to the Principal Account, the Excess Funding Account, or
paid to other series of certificates, as set forth in the Pooling and
Servicing Agreement.
Principal collections allocated to a series but not required for
deposit or distribution may be shared with other series. The related
supplement will set forth the manner and priority of any principal sharing.
See "--Shared Principal Collections" for more information.
Principal collections not paid to Card Funding because the Transferor
Interest is less than the Minimum Transferor Interest will be held in the
Principal Account and paid to Card Funding when the Transferor Interest is
again at least equal to the Minimum Transferor Interest. Amounts so
deposited in the Principal Account will be allocated as regular principal
collections to series in their accumulation or amortization periods, as set
forth in the related supplements.
Shared Excess Finance Charge Collections
If a series is in a Group, finance charge collections allocated to the
series in excess of the amount needed to make deposits or payments may be
shared with other series in the Group. If one series requires more finance
charge collections than allocated through its Investor Percentage, it will
have access to all of these shared excess finance charge collections in
other series in its Group. If two or more series require more finance
charge collections, excess finance charge collections in the Group will be
shared between the series in the manner and priority set forth in the
related supplements.
Shared Principal Collections
If a series is allocated principal in excess of the amount needed for
deposit or distribution, this excess amount will be available to make
principal payments or deposits required by other series. These shared
principal collections may be limited to series within a Group. If principal
collections allocated to a series are shared with another series, the
Investor Interest for the series from which collections were shared will
not be reduced.
Rebates and Fraudulent Charges
JPMorgan Chase Bank may adjust the amount of principal receivables in
the Master Trust Portfolio because of:
o a rebate or refund to a cardholder,
o merchandise refused or returned by a cardholder, and
o fraudulent or counterfeit charges.
The Transferor Interest will be reduced--net of the creation of new
receivables--by the adjustment amount. If reducing the Transferor Interest
would cause it to be less than the Minimum Transferor Interest, Card
Funding, as Transferor, will be required to pay the deficient amount into
the Excess Funding Account.
Default Allocations
Each month, Master Trust Portfolio principal receivables in defaulted
accounts will be allocated to each series based on each series' Investor
Percentage. Defaulted accounts are Accounts which were written off by the
servicer as uncollectible.
Investor Charge-Offs
Each month, principal receivables in defaulted accounts will be
allocated to each Series Certificate. Allocated default amounts will reduce
each series' Investor Interest, unless these defaulted amounts are
reimbursed through payment of finance charge collections or other amounts,
as set forth in each series' supplement. Reducing a series' Investor
Interest through allocation of default amounts is called an Investor
Charge-Off. The Investor Interest can be increased through reimbursement of
Investor Charge-Offs, which can happen in any Monthly Period where finance
charge collections are available for that purpose.
Optional Repurchase
For each Series Certificate, Card Funding--for so long as an affiliate
of Card Funding or JPMorgan Chase Bank is the servicer--has the option to
repurchase the remaining Investor Interest when the Series Certificate's
total outstanding Investor Interest is no more than 5% of the Investor
Interest on the series' Closing Date. The repurchase price must be for:
o the dollar amount of all of the remaining Investor Interest--less
any amount on deposit in an associated Principal Funding
Account--plus any accrued and unpaid interest through the
repurchase date, or
o a different optional repurchase price set forth in the related
supplement.
Final Payment of Principal; Series Termination
Each series will end on the earliest to occur of:
o the date on which the series' Investor Interest is reduced to
zero,
o the date set forth in the related supplement as the last day on
which interest and principal will be distributed on the Series
Certificate, referred to as the Series Termination Date, and
o the date on which the master trust terminates.
If the Investor Interest is greater than zero on the Series Termination
Date, JPMorgan Chase Bank or the master trust trustee may be required to
sell receivables in an amount sufficient to repay the outstanding Investor
Interest. Card Funding and its affiliates and agents will not be permitted
to purchase the receivables in this type of sale.
Pay Out Events
For each Series Certificate issued from the master trust, occurrence
of a Pay Out Event will begin rapid amortization of principal. Rapid
amortization of principal will interrupt and replace the Revolving Period
or any other form of principal amortization or accumulation. A Pay Out
Event will occur for all certificates (including Series Certificates),
issued from the master trust if any one of the following occurs:
o Chase USA or Card Funding is insolvent, enters receivership or
becomes subject to a bankruptcy proceeding,
o Card Funding is unable for any reason to transfer receivables to
the master trust as required by the Pooling and Servicing
Agreement, or
o the master trust becomes subject to regulation as an "investment
company" within the meaning of the Investment Company Act of 1940.
Each Series Certificate may, in the related supplement, specify additional
Pay Out Events applicable only to that Series Certificate.
If Chase USA or Card Funding voluntarily begins liquidation or a
receiver is appointed for Card Funding or if Chase USA becomes subject to a
bankruptcy proceeding or becomes insolvent, Card Funding will:
o immediately stop transferring receivables to the master trust, and
o promptly notify the master trust trustee of the event.
Within 15 days the master trust trustee will publish a notice, stating that
the master trust trustee intends to liquidate the receivables in the Master
Trust Portfolio. The master trust trustee will liquidate the receivables
unless instructed to do otherwise by noteholders whose related Series
Certificates represent a majority of the outstanding Investor Interest, or
by Chase USA or Card Funding's conservator or receiver or trustee in
bankruptcy. The conservator or receiver may have the power to cause or
prevent an early sale of master trust assets. Any early sale of these
assets could cause early repayment of outstanding certificates or notes.
Card Funding and its affiliates and agents will not be permitted to
purchase the receivables in this type of sale.
Rapid amortization begins immediately when any Pay Out Event occurs.
If rapid amortization begins for the Series Certificate related to your
notes before the scheduled payment date on your notes, you could begin
receiving principal distributions earlier than expected, which may shorten
the average life of your investment.
Servicing Compensation
JPMorgan Chase Bank, as servicer, receives a fee for its servicing
activities and reimbursement of expenses incurred in administering the
master trust. This servicing fee accrues for each outstanding series, in
the amounts and calculated on the balances as set forth in the related
supplement. Each series' servicing fee is payable each period from
collections of Finance Charge Receivables allocated to the series; some
series, however, may direct all or a portion of Interchange toward paying
the servicing fee. Neither the master trust nor certificateholders are
responsible for any servicing fee allocable to the Transferor Interest.
The Servicer
The servicer is responsible for servicing and administering
receivables in the Master Trust Portfolio. JPMorgan Chase Bank, currently
the servicer, has delegated some of its servicing duties to First Data
Resources, Inc., a computer data processing servicer for the bankcard
industry and substantially all of its remaining duties to Chase USA. The
servicer is required to maintain insurance coverage against losses through
wrongdoing of its officers and employees who service receivables.
Servicer Default
The Pooling and Servicing Agreement and any Series Supplement specify
the duties and obligations of the servicer. A failure by the servicer to
perform its duties or fulfill its obligations can result in a Servicer
Default.
Servicer Defaults include:
o failure by the servicer to make any payment, transfer or deposit,
or to give instructions to the master trust trustee to do so, on
the required date under the Pooling and Servicing Agreement or any
Series Supplement or within the applicable grace period not
exceeding 10 business days,
o failure on the part of the servicer to observe or perform any of
its other covenants or agreements if the failure:
- materially adversely affects certifcateholders of any series
issued and outstanding under the master trust, and
- continues unremedied for a period of 60 days after
written notice and continues to materially adversely
affect those certifcateholders, or
the delegation by the servicer of its duties, except as
specifically permitted under the Pooling and Servicing Agreement
and any Series Supplement,
o any representation, warranty or certification made by the servicer
in the Pooling and Servicing Agreement and any Series Supplement,
or any certificate delivered under the terms of those agreements,
proves to have been incorrect when made if it:
- materially adversely affects certifcateholders of any
series issued and outstanding under the master trust, and
- continues to be incorrect in any material respect for a
period of 60 days after written notice and continues to
materially adversely affect those certifcateholders,
o specific events of bankruptcy, insolvency or receivership of the
servicer, or
o any other event specified in the related supplement.
If a Servicer Default occurs, the master trust trustee or
certificateholders representing a majority of the aggregate outstanding
Investor Interest may remove JPMorgan Chase Bank as servicer to the master
trust and appoint a new servicer. If a new, eligible servicer is not
appointed or has not accepted appointment by the time JPMorgan Chase
Bank--or a successor servicer--has ceased to act as servicer, the master
trust trustee will become the servicer. If the master trust trustee is
legally unable to act as successor servicer, then the master trust trustee
will use its best efforts to sell the receivables in the Master Trust
Portfolio by the solicitation of competitive bids. Card Funding and its
affiliates and agents will not be permitted to purchase the receivables in
this type of sale.
Card Funding's rights and obligations as Transferor will be unaffected
by any change in servicer.
If a conservator or receiver is appointed for the servicer and this
causes a Servicer Default, the conservator or receiver may have the power
to prevent a transfer of servicing duties to a successor servicer.
Payment of Expenses
JPMorgan Chase Bank, as servicer, has agreed to pay some expenses
incurred in servicing the Master Trust Portfolio, including:
o fees and expenses of the master trust trustee,
o fees and expenses of independent certified public accountants, and
o other fees and expenses of the master trust, excluding taxes.
Reports to Certificateholders
Certificateholders of each series issued and outstanding under the
master trust will receive reports with information on the series and the
master trust. JPMorgan Chase Bank, as servicer, will prepare a
certificateholder report on each series' Transfer Dates, setting forth
information as specified in the related supplement.
Periodic information to certificateholders generally will include:
o the total amount distributed,
o the amount of principal and interest for distribution,
o principal collections allocated to the series,
o finance charge collections allocated to the series,
o the aggregate amount of principal receivables in the Master Trust
Portfolio,
o the related Investor Interest amount and the Investor Interest as
a percentage of principal receivables in the Master Trust
Portfolio,
o receivables in the Master Trust Portfolio broken out by
delinquency status,
o aggregate defaults allocated to the series,
o Investor Charge-Offs for the series, and any reimbursement of
Investor Charge-Offs,
o the servicing fee due from the series,
o for each series, the available amount of credit enhancement, if
any,
o the "pool factor," which is the ratio of the current Investor
Interest to the initial Investor Interest,
o the Portfolio Yield for the series, and
o if the series bears interest at a floating rate, information
relating to the floating rate.
JPMorgan Chase Bank will also provide an annual summary of
distributions to each series by January 31 of the succeeding year. This
information is intended to help certificateholders and noteholders prepare
their tax returns.
Evidence as to Compliance
The Pooling and Servicing Agreement provides that by March 31 of each
calendar year, JPMorgan Chase Bank, as servicer, will have a firm of
independent certified public accountants furnish reports showing that, for
the prior calendar year:
o the accounting firm has reviewed management's assertion that the
system of internal control over servicing of securitized credit
card receivables met the criteria for effective internal control
as specified by the Committee of Sponsoring Organizations of the
Treadway Commission, and that in the accounting firm's opinion,
management's assertion is fairly stated in all material respects,
and
o for each outstanding series, the accounting firm has reviewed at
least one report prepared by the servicer from each quarter of the
calendar year, compared the amounts set forth in the reports with
the servicer's computer reports and disclosed any discrepancies.
The Pooling and Servicing Agreement also provides that by March 31 of
each year, an officer of JPMorgan Chase Bank will forward a signed
statement to the master trust trustee, stating that the servicer has
performed under its obligations--as set forth in the Pooling and Servicing
Agreement--during the prior calendar year, and if there has been a default
in the performance of any obligation, specifying the nature and status of
the default.
Amendments
The Pooling and Servicing Agreement and any Series Supplement may be
amended by Card Funding, JPMorgan Chase Bank and the master trust trustee,
as set forth in the Pooling and Servicing Agreement and the relevant Series
Supplement. These amendments may be made without certificateholder consent
to do the following:
o cure any ambiguity,
o revise specific exhibits and schedules,
o correct or supplement any provision which may be inconsistent with
any other provision, or
o add any necessary provision not inconsistent with the existing
provisions of the operative documents.
No amendment may be made without certificateholder consent which in any
material respect would adversely affect any certificateholder's interest or
which would significantly change the permitted activities of the master
trust.
Amendment without certificateholder consent can occur only if:
o JPMorgan Chase Bank, as servicer, furnishes an officer's
certificate to the master trust trustee, stating that the
amendment will not materially adversely affect any existing
certificateholder's interest and will not significantly change the
permitted activities of the master trust,
o the amendment will not cause the master trust to be subject to
corporate taxation, or have any other negative federal income tax
effect on the master trust or certificateholders,
o each rating agency rating an affected series of certificates or
notes provides written confirmation that the amendment will not
cause a downgrade or withdrawal of any existing rating of any
outstanding certificates or notes, and
o the amendment does not do any of the following:
- reduce the amount or delay the timing of scheduled
distributions to certificateholders of any series,
- change the manner or method of calculating interest due
to certificateholders of any series,
- alter the requirements for calculating the Minimum
Transferor Interest for any outstanding series,
- change the manner in which the Transferor Interest is
calculated, or
- reduce the percentage of the Investor Interest required
to consent to proposed changes which do require
certificateholder consent.
The Pooling and Servicing Agreement may be amended by Card Funding,
JPMorgan Chase Bank and the master trust trustee with the consent of
certificateholder representing a majority of the Investor Interest which is
adversely affected by an amendment or, with respect to an amendment to
significantly change the permitted activities of the master trust, a
majority of the Investor Interest of all the certificateholders. Even with
consent, these amendments may not occur if they:
o reduce the amount of or delay the timing of scheduled
distributions to certificateholders of any series,
o change the manner of calculating the Investor Interest, the
Investor Percentage or the amount of defaults allocated to
certificateholders without the consent of each affected
certificateholder, and
o reduce the percentage of the Investor Interest required to consent
to any amendment, without the consent of each affected
certificateholder.
The Master Trust Trustee
Each series' prospectus supplement will identify the master trust
trustee under the Pooling and Servicing Agreement. Card Funding, JPMorgan
Chase Bank and their affiliates may from time to time enter into banking
and trustee relationships with the master trust trustee, and all three
parties may from time to time hold certificates in their own names.
In addition, where required by local jurisdictions, the master trust
trustee may appoint a co-trustee or separate trustees of all or any part of
the master trust. If this occurs, all rights, powers, duties and
obligations conferred or imposed by the Pooling and Servicing Agreement on
the master trust trustee will be conferred or imposed:
o jointly on the master trust trustee and any separate trustee or
co-trustee, or
o where the master trust trustee shall be incompetent or unqualified
to perform required acts, singly upon any separate trustee or
co-trustee.
In each case, a separate trustee or co-trustee shall exercise and
perform these rights, powers, duties and obligations solely at the
direction of the master trust trustee.
The master trust trustee may resign at any time. If this occurs, Card
Funding will be obligated to appoint a successor master trust trustee. Card
Funding may also remove the master trust trustee and appoint a successor
if:
o the master trust trustee ceases to be eligible to continue in that
role under the Pooling and Servicing Agreement; or
o the master trust trustee becomes insolvent.
Any resignation or removal of a master trust trustee will not become
effective until appointment of, and acceptance by, a successor.
Master Trust Termination
The master trust is scheduled to end on the earliest of:
o the date the aggregate Investor Interest--including the interest
of any credit enhancement provider, if not part of the Investor
Interest--is reduced to zero,
o the date on which all receivables are sold, disposed of or
otherwise liquidated due to insolvency, and
o August 31, 2016.
JPMorgan Chase Bank and Card Funding may inform the master trust trustee of
a change in the master trust termination date, provided that a change may
not affect existing certificateholders.
Description of the Notes
Following is a summary of the material provisions common to all series
of notes issued through an Indenture and offered by this prospectus. The
particular terms of your notes are described in the related supplement. The
summary is qualified in its entirety by references to the provisions of
your Indenture and related Series Certificate, and the related Deposit and
Administration Agreement and Trust Agreement.
An owner trust will issue the notes under an Indenture. The owner
trust will pledge a Series Certificate to the Indenture Trustee to secure
the payment of the notes. Each owner trust will issue one or more classes
of notes that may have different maturity dates, interest rates, priorities
of payments and debt ratings.
Card Funding will own the residual equity interest in each owner trust
established after [ ], 2002. Amounts paid to the owner trust as holder of a
Series Certificate that are not payable in respect of the notes issued by
the owner trust and not required to be retained in a spread account will be
distributed to Card Funding.
Principal and Interest on the Notes
The related supplement will describe the timing and priority of
payment, seniority, allocations of losses, Note Rate and amount of or
method of determining payments of principal and interest on each class of
notes of your series. Your right to receive payments of principal and/or
interest may be senior or subordinate to the rights of holders of any other
class or classes of notes of your series, as described in related
supplement. Payments of interest on the notes of your series may be made
prior to payments of principal. The dates for payments of interest and
principal on the notes of your series may be different from the Transfer
Dates for the Series Certificate pledged to secure payment of your notes.
One or more classes of notes of your series may be redeemable in whole or
in part under the circumstances described in the related supplement,
including when Card Funding exercises its option under the Pooling and
Servicing Agreement to purchase the related Series Certificate.
Your notes may have fixed principal payment schedules. In that event,
you would be entitled to receive on each specified Payment Date the
applicable amount of principal designated to be repaid, in the manner and
to the extent described in the related supplement.
Payments to all the noteholders of each class will have the same
priority. Under some circumstances, there may not be sufficient amounts
available to pay the amount of interest which is required to be paid to all
the noteholders of your class. In that event, you will receive a
share, based upon the aggregate amount of interest due to your class, of
the aggregate amount available for distribution of interest on the notes of
your series.
If your series includes two or more classes of notes, the sequential
order and priority of payment of principal and interest, and any schedule
or formula or other provisions for determining the amount of principal and
interest of each class will be described in the related supplement.
Payments of principal and interest on any class of notes will be made
equally among all the noteholders of that class based on the principal
amount of notes held by each noteholder.
The Indentures
Your owner trust will issue one or more classes of notes under an
Indenture. A form of Indenture has been filed as an exhibit to the
Registration Statement.
Events of Default: Rights Upon Event of Default. With respect to the
notes of a given series, "Events of Default" under your Indenture will be
any of the following:
o the owner trust fails to pay interest or principal when due and
payable,
o the owner trust becomes subject to regulation as an "investment
company" within the meaning of the Investment Company Act of 1940,
o specific events of bankruptcy with respect to the owner trust, and
o any other Events of Default described in the related supplement.
During the occurrence of an Event of Default, the Indenture Trustee or
holders of a majority in principal amount of the notes of your series may
declare the principal of the notes to be immediately due and payable. That
declaration may be rescinded by the holders of a majority of the notes with
respect to which the Event of Default has occurred.
If your notes are declared to be due and payable following an Event of
Default, the Indenture Trustee may institute proceedings to collect amounts
due or foreclose on the owner trust property, exercise remedies as a
secured party, sell the owner trust property to a party or parties other
than Card Funding and its affiliates and agents or have the owner trust
keep the owner trust property and continue to apply collections on the
owner trust property as if there had been no declaration of acceleration.
However, the Indenture Trustee is prohibited from selling the owner trust
property following an Event of Default, unless:
o the holders of all the notes consent to the sale,
o the proceeds of the sale are sufficient to pay in full the
principal and the accrued interest on the notes at the date of the
sale, or
o there has been an Event of Default arising from a failure to make
a required payment of principal or interest on the notes, and the
Indenture Trustee:
- determines that the proceeds of the owner trust property
would not be sufficient to make all payments on the notes
when those payments would have become due if the
obligations had not been declared due and payable, and
- obtains the consent of the holders of sixty-six and
two-thirds percent of the outstanding principal amount of
the notes.
If an Event Of Default occurs and is continuing, the Indenture Trustee
will not be obligated to exercise any of the rights or powers under the
Indenture at the request or direction of any noteholders, if the Indenture
Trustee reasonably believes it will not be adequately indemnified against
the costs, expenses and liabilities which might be incurred by it in
complying with that request. Subject to the provisions for indemnification
and other limitations contained in the Indenture, a majority of the
noteholders of your series:
o will have the right to direct the time, method and place of
conducting any proceeding or any remedy available to the Indenture
Trustee, and
o may, in some cases, waive any default with respect to their notes,
except a default:
- in the payment of principal or interest, or
- in respect of a covenant or provision of the Indenture
that cannot be modified without the waiver or consent of
all the holders of the notes of your series.
The Indenture Trustee's right to sell the Series Certificate will be
subject to restrictions on transferability described in the Series
Supplement, including a requirement that no more than ninety-nine persons
hold interests in the master trust (including the Series Certificate) that
have been issued without an opinion for federal income tax purposes that
those interests would be treated as debt and limitations on the nature of
the potential purchasers of the Series Certificate. Examples of these
limitations are:
o any foreign purchaser must certify that its ownership of the
Series Certificate is effectively connected with a trade or
business within the United States,
o any potential purchaser that is a partnership, Subchapter S
corporation or grantor trust for federal income tax purposes will
be required to represent that its interest in the Series
Certificate represents less than a specified percentage of its
assets, and
o a potential purchaser must not be an employee benefit plan, a Plan
or any entity whose underlying assets include "plan assets."
Also, any transfer of the Series Certificate in foreclosure will be
subject to the requirement that each purchaser of an interest in the Series
Certificate deliver to the master trust trustee and Card Funding an
investment letter relating to compliance with applicable securities laws
and other restrictions described in the applicable Series Supplement.
You may institute proceedings with respect to the Indenture only if:
o you have previously given written notice to the Indenture Trustee
that an Event of Default continues,
o not less than 25% of the noteholders of your series have made
written request to the Indenture Trustee to institute the
proceeding in its own name as Indenture Trustee,
o you have offered the Indenture Trustee indemnity reasonably
satisfactory to it against the costs, expenses and liabilities
that may be incurred in complying with that request,
o the Indenture Trustee has for 60 days after receipt of notice,
request and offer of indemnity failed to institute the proceeding,
and
o no direction inconsistent with the written request has been given
to the Indenture Trustee during the 60-day period by a majority of
the noteholders.
In general, the Indenture Trustee will enforce the rights and remedies
of the holders of accelerated notes. However, holders of notes will have
the right to institute any proceeding with respect to the Indenture if the
following conditions are met:
o the holder gives the Indenture Trustee written notice of a
continuing Event of Default,
o the holders of at least 25% in aggregate principal amount of the
outstanding notes make a written request of the Indenture Trustee
to institute a proceeding as Indenture Trustee,
o the holders offer indemnity reasonably satisfactory to the
Indenture Trustee against the costs, expenses and liabilities of
instituting a proceeding,
o the Indenture Trustee has not instituted a proceeding within 60
days after receipt of the request and offer of indemnification,
and
o the Indenture Trustee has not received from the holders of a
majority in aggregate principal amount of the outstanding notes a
direction inconsistent with the request.
In addition in all circumstances, if the owner trust fails to pay
interest or principal when due and payable, the holders of the notes will
have the right to sue to force payment to be made.
The Indenture Trustee and the noteholders, by accepting the notes,
will agree that they will not institute against the owner trust or master
trust any bankruptcy, reorganization or other proceeding under any federal
or state bankruptcy or similar law.
The Indenture Trustee, the Owner Trustee in its individual capacity,
and Card Funding as owner of the equity interest in the owner trust will
not be personally liable for the payment of the principal of or interest on
the notes or for the agreements of the owner trust contained in the
Indenture.
Modification of Indenture. The owner trust and the Indenture Trustee
may, with the consent of the holders of a majority of the notes, execute a
supplemental indenture to add provisions to, change in any manner or
eliminate any provisions of, the Indenture, or modify in any manner the
rights of the noteholders.
The owner trust and the Indenture Trustee may, without the consent of
the holders of any notes, enter into one or more supplemental indentures
for any of the following purposes:
o to correct the description of any property or to add to the
property pledged to secure the notes,
o to reflect the agreement of another person to assume the role of
the owner trust,
o to add to the covenants of the owner trust, for the benefit of the
holders of the notes, or to surrender any right or power of the
owner trust,
o to transfer or pledge any property to the Indenture Trustee,
o to cure any ambiguity or supplement any provision in any
supplemental indenture that may be inconsistent with any other
provision in any supplemental indenture if that action would not
materially and adversely affect the interests of the holders of
the notes,
o to appoint a successor trustee with respect to the notes, or
o to modify, eliminate or add to the provisions of the Indenture as
necessary to qualify the Indenture under the Trust Indenture Act
of 1939.
The owner trust and the Indenture Trustee will not enter into any
supplemental indenture that would:
o cause the owner trust or the master trust to be classified as an
association or a publicly traded partnership taxable as a
corporation for United States federal income tax purposes, or
o cause a taxable event that would cause the beneficial owner of any
outstanding notes to recognize gain or loss.
Certain Covenants
The owner trust will not:
o except as expressly permitted by the Indenture, the Deposit and
Administration Agreement and the Trust Agreement, sell, transfer,
exchange or otherwise dispose of any of the properties or assets
of the owner trust,
o claim any credit on or make any deduction from the principal or
interest payable in respect of the notes (other than amounts
withheld under the tax code or applicable state law) or assert any
claim against any present or former holder of the notes because of
the payment of taxes levied or assessed on the owner trust,
o permit the validity or effectiveness of the Indenture to be
impaired or permit any person to be released from any covenants or
obligations with respect to the notes under the Indenture except
as permitted by the Indenture,
o permit any lien, claim, or security interest to be created on the
assets of the owner trust, or
o permit the lien of the Indenture not to constitute a valid first
priority security interest in the owner trust.
Annual Compliance Statement. The owner trust will be required to
present to the Indenture Trustee each year a written statement as to the
performance of its obligations under the Indenture.
Indenture Trustee's Annual Report. The Indenture Trustee will be
required to mail to the noteholders each year a brief report relating to
its eligibility and qualification to continue as Indenture Trustee under
the Indenture, the property and funds physically held by the Indenture
Trustee and any action it took that materially affects the notes and that
has not been previously reported.
List of Noteholders. Upon the issuance of Definitive Notes, three or
more holders of the notes who have each owned a note for at least six
months may obtain access to the list of noteholders the Indenture Trustee
maintains for the purpose of communicating with other noteholders. The
Indenture Trustee may elect not to allow the requesting noteholders access
to the list of noteholders if it agrees to mail the requested communication
or proxy, on behalf and at the expense of the requesting noteholders, to
all noteholders of record.
Satisfaction and Discharge of Indenture. An Indenture will be
discharged with respect to the notes upon the delivery to the Indenture
Trustee for cancellation of all the notes or, with specific limitations,
upon deposit with the Indenture Trustee of funds sufficient for the payment
in full of all the notes.
The Indenture Trustee
The Indenture Trustee for your series is identified in the related
supplement. The Indenture Trustee may resign at any time, in which event
your Administrator will appoint a successor Indenture Trustee for your
series. The Administrator may also remove the Indenture Trustee if it
ceases to be eligible to continue as an Indenture Trustee under the
Indenture or if the Indenture Trustee becomes insolvent. The Administrator
will then be obligated to appoint a successor Indenture Trustee for your
series. If an Event of Default occurs under an Indenture and the related
supplement provides that a given class of notes of your series is
subordinated to one or more other classes of notes of your series, under
the Trust Indenture Act of 1939, the Indenture Trustee may be deemed to
have a conflict of interest and be required to resign as Indenture Trustee
for one or more of those classes of notes. In that case, a successor
Indenture Trustee will be appointed for one or more of those classes of
notes and may provide for rights of senior noteholders to consent to or
direct actions by the Indenture Trustee which are different from those of
subordinated noteholders. Any resignation or removal of the Indenture
Trustee and appointment of a successor Indenture Trustee for any series of
notes will not become effective until the successor Indenture Trustee
accepts its appointment for your series.
Transfer and Assignment of the Series Certificate
On the Closing Date for any series of notes, Card Funding will deposit
in the owner trust the Series Certificate under the terms of the Deposit
and Administration Agreement. On the Closing Date, the Owner Trustee will
execute, and the Indenture Trustee will authenticate and deliver to Card
Funding, the notes.
Reports to Noteholders
On or prior to each Transfer Date, the Administrator will provide to
the Indenture Trustee for the Indenture Trustee to forward to you and to
each other noteholder of your series, and to the Owner Trustee, a statement
with the following information on the notes for the related Payment Date or
the period since the previous Payment Date, as applicable:
o the amount of the distribution allocated to principal on the
notes,
o the amount of the distribution allocated to interest on the notes,
o if the notes are floating rate, the rate for the current period,
o the aggregate outstanding principal balance of the notes after
giving effect to all payments reported under the first clause
above, and
o the amount on deposit in the Owner Trust Spread Account, on that
Payment Date, after giving effect to all transfers and withdrawals
from and all transfers and deposits to that account on that
Payment Date, and the amount required to be on deposit in the
Owner Trust Spread Account on that date.
Each amount described in the first two clauses above will be expressed
as a dollar amount per $1,000 of the initial principal balance of the
notes.
Within the prescribed period of time for tax reporting purposes after
the end of each calendar year during the term of the Indenture, the
Indenture Trustee will mail to you and to other investors who at any time
during the prior calendar year had been noteholders and received any
payment on the notes, a statement to the extent required by law containing
information which is required for the preparation of federal income tax
returns. See "Tax Matters" for information on tax reporting procedures.
Certain Matters Regarding the Administrator
The Administrator will, to the extent provided in the Deposit and
Administration Agreement, provide the notices and perform on behalf of the
owner trust other administrative obligations required by the Indenture.
Amendments
Parties to the Trust Agreement may amend the Trust Agreement, with
notice to the rating agencies and without the consent of the Indenture
Trustee or the noteholders to cure any ambiguity or correct or supplement
any of its provisions for the purpose of modifying the Trust Agreement or
modifying the rights of the noteholders; provided, however, that an
amendment will not:
o as evidenced by an officer's certificate from Card Funding
addressed and delivered to the Indenture Trustee and the Owner
Trustee, materially and adversely affect the interest of any
noteholder or significantly change any permitted activities of the
owner trust described in the trust agreement, and
o as evidenced by an opinion of counsel, cause the owner trust to be
classified as an association (or a publicly traded partnership)
taxable as a corporation for federal income tax purposes.
Parties to the Deposit and Administration Agreement may amend the
Deposit and Administration Agreement, with notice to the rating agencies
and with the consent of the Indenture Trustee, but without the consent of
the noteholders for the purpose of adding any provisions to or changing or
eliminating any provisions of the Deposit and Administration Agreement or
modifying the rights of the noteholders; provided, however, that such
amendment will not:
o as evidenced by an officer's certificate from Card Funding
addressed and delivered to the Indenture Trustee and the Owner
Trustee, materially and adversely affect the interest of any
noteholder or the certificateholder or significantly change the
purposes and activities of the owner trust, and
o as evidenced by an opinion of counsel, cause the owner trust to be
classified as an association (or a publicly traded partnership)
taxable as a corporation for federal income tax purposes.
In addition, the Trust Agreement or the Deposit and Administration
Agreement may also be amended by the parties:
o with notice to the rating agencies,
o with the written consent of the Indenture Trustee, and
o with the consent of the holders of notes evidencing at least a
majority of the then outstanding principal amount of the notes,
for the purpose of adding any provisions to or changing in any manner or
eliminating any provisions or modifying in any manner the rights of the
noteholders, provided, however, that in the case of the Trust Agreement or
the Deposit and Administration Agreement, no amendment may (1) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on the Series Certificate or distributions that are
required to be made for the benefit of the noteholders or (2) reduce the
percentage of the holders of notes which are required to consent to any
such amendment, without the consent of the holders of all the outstanding
notes.
Termination
The obligations of the Administrator, Card Funding, the Owner Trustee
and the Indenture Trustee under the related Indenture, Deposit and
Administration Agreement and Trust Agreement will end upon the earlier of:
o the payment to noteholders of the note principal balance and all
amounts required to be paid to them under the Series Certificate,
the Deposit and Administration Agreement or the Trust Agreement,
and
o the Note Maturity Date.
Credit Enhancement
Credit Enhancement may be provided with respect to one or more classes
of any series, including your series, offered by this prospectus. If so
specified in the related supplement, any form of Credit Enhancement may be
structured so as to be drawn upon by more than one class to the extent
described in the prospectus supplement.
The type, characteristics and amount of Credit Enhancement for any
series or class:
o will be determined based on several factors, including the
characteristics of the receivables and accounts included in the
Master Trust Portfolio as of the Closing Date with respect to that
series and the desired rating for each class, and
o will be established on the basis of requirements of each rating
agency rating the certificates or the notes of that series or
class.
In general, Credit Enhancement will not provide protection against all
risks of loss and will not guarantee repayment of the entire principal
balance of the certificates or the notes and/or payment of interest. If
losses occur which exceed the amount covered by Credit Enhancement or which
are not covered by Credit Enhancement, certificateholders and noteholders,
as applicable, will bear their allocable share of deficiencies.
If Credit Enhancement is provided with respect to a series or class of
notes, the related supplement will include a description of:
o the amount payable under Credit Enhancement,
o any additional conditions to payment under Credit Enhancement not
described in this prospectus,
o the conditions, if any, under which:
- the amount payable under Credit Enhancement may be reduced,
and
- Credit Enhancement may be ended or replaced, and
o any material provision of any agreement relating to Credit Enhancement.
Additionally, the related supplement may provide information with
respect to any credit enhancement provider, including:
o a brief description of its principal business activities,
o its principal place of business, place of incorporation and the
jurisdiction under which it is chartered or licensed to do
business,
o if applicable, the identity of regulatory agencies which exercise
primary jurisdiction over the conduct of its business, and
o its total assets, and its stockholders' or policy holders'
surplus, if applicable, and other appropriate financial
information as of the date specified in the related supplement.
The related supplement may specify if Credit Enhancement with respect
to a series may be available to pay principal of the series' certificates
after Pay Out Events occur with respect to that series. If so, the credit
enhancement provider may have an interest in cash flows in respect of the
receivables called the Enhancement Invested Amount, to the extent described
in the related supplement.
Specific Forms of Credit Enhancement
The related supplement will also specify the manner and to what extent
the following types of Credit Enhancement or other Credit Enhancement
applies to your series of notes or any class of your series of notes:
Subordination
One or more classes of notes of any series may be subordinated as
described in the related supplement to the extent necessary to fund
payments with respect to senior notes. The rights of the holders of
any subordinated notes to receive distributions of principal and/or
interest on any Payment Date for that series will be subordinated in
right and priority to the rights of the holders of senior notes, but
only to the extent described in the related supplement. The related
supplement may specify if subordination may apply only in the event of
some types of losses not covered by another Credit Enhancement. The
related supplement will also set forth information concerning:
o the amount of subordination of a class or classes of subordinated
notes in a series,
o the circumstances in which subordination will be applicable,
o the manner, if any, in which the amount of subordination will be
applicable,
o the manner, if any, in which the amount of subordination will
decrease over time, and
o the conditions under which amounts available from payments that
would otherwise be made to holders of subordinated notes will be
distributed to holders of senior notes.
If collections of receivables otherwise distributable to holders of a
subordinated class of a series will be used as support for a class of
another series, the related supplement will specify the manner and
conditions for applying this cross-support feature.
Letter of Credit
One or more letters of credit may provide support for a series or one
or more classes of notes. The letter of credit may provide limited
protection against some losses in addition to or in lieu of other Credit
Enhancement. The issuer of the letter of credit, called the L/C Bank, will
be obligated to honor demands with respect to the letter of credit, to the
extent of the amount available under the letter of credit, to provide funds
under the circumstances and subject to the conditions specified in the
related supplement.
Cash Collateral Guaranty or Account
Support for a series or one or more classes of notes may be provided
by:
o a Cash Collateral Guaranty secured by the deposit of cash or some
permitted investments in a Cash Collateral Account reserved for
the beneficiaries of the Cash Collateral Guaranty, or
o a Cash Collateral Account alone.
The amount available from the Cash Collateral Guaranty or the Cash
Collateral Account will be the lesser of (1) amounts on deposit in the Cash
Collateral Account and (2) an amount specified in the related supplement.
The related supplement will set forth the circumstances under which
payments are made to beneficiaries of the Cash Collateral Guaranty from the
Cash Collateral Account or from the Cash Collateral Account directly.
Collateral Interest
An undivided interest in the master trust called the Collateral
Interest, in an amount initially equal to the percentage of the
certificates of a series specified in the supplement for that series, may
initially provide support for a Series Certificate. That Series Certificate
may also have the benefit of a Cash Collateral Guaranty or Cash Collateral
Account with an initial amount on deposit in that account, if any, as
specified in the related supplement which will be increased:
o to the extent the Transferor elects, subject to the conditions
specified in the related supplement, to apply principal
collections allocable to the Collateral Interest to decrease the
Collateral Interest,
o to the extent principal collections allocable to the Collateral
Interest are required to be deposited into the Cash Collateral
Account as specified in the related supplement, and
o to the extent excess finance charge collections are required to be
deposited into the Cash Collateral Account as specified in the
related supplement.
The total amount of Credit Enhancement available from the Collateral
Interest and, if applicable, the Cash Collateral Guaranty or Cash
Collateral Account will be the lesser of the sum of:
o the Collateral Interest and the amount on deposit in the Cash
Collateral Account, and
o an amount specified in the related supplement.
The related supplement will set forth the circumstances under which:
o payments which otherwise would be made to holders of the
Collateral Interest will be distributed to holders of notes, and
o if applicable, payment will be made under the Cash Collateral
Guaranty or under the Cash Collateral Account.
Surety Bond or Insurance Policy
A surety bond may be purchased for the benefit of the holders of any
series or class of notes to assure distributions of interest or principal
with respect to that series or class in the manner and amount specified in
the related supplement.
One or more insurance companies may provide insurance, with respect to
a series or one or more classes of notes, to guarantee, with respect to one
or more classes of that series, distributions of interest or principal in
the manner and amount specified in the related supplement.
Spread Account
Support for a series or one or more classes of notes may be provided
by the periodic deposit of available excess cash flow from the master trust
assets into an account called the Spread Account, intended to assist with
subsequent distribution of interest and principal on that series or class
in the manner specified in the related supplement.
Reserve Account
The establishment of a Reserve Account provides support for a series
or one or more classes of notes. The Reserve Account may be funded, to the
extent provided in the related supplement, by:
o an initial cash deposit,
o the retention of excess cash,
o periodic distributions of principal or interest or both otherwise
payable to one or more classes of notes, including subordinated
notes,
o the provision of a letter of credit, guarantee, insurance policy
or other form of credit, or
o any combination of these items.
The Reserve Account will assist with the subsequent distribution of
principal or interest on that series or class in the manner provided in the
related supplement.
Note Ratings
Any rating of the notes by a rating agency will indicate:
o its view on the likelihood that noteholders will receive required
interest and principal payments, and
o its evaluation of the receivables and the availability of any
Credit Enhancement for the notes.
Among the things a rating will not indicate are:
o the likelihood that a Pay Out Event will occur,
o the likelihood that a United States withholding tax will be
imposed on Non-U.S. noteholders,
o the marketability of the notes,
o the market price of the notes, or
o whether the notes are an appropriate investment for you.
A rating will not be a recommendation to buy, sell or hold the notes.
A rating may be downgraded or withdrawn at any time by a rating agency.
The Transferor will request a rating of the Series Certificate and the
notes offered by this prospectus and the prospectus supplement from at
least one rating agency. It will be a condition to the issuance of the
notes of each class offered by this prospectus and the related
supplement--including each series that includes a Pre-Funding Account, and
the related Series Certificate--that they be rated in one of the four
highest rating categories by at least one nationally recognized rating
organization selected by the Transferor to rate any series, which will be
the rating agency. The rating or ratings applicable to the Series
Certificate and the notes of each class offered by this prospectus will be
set forth in the related supplement. Rating agencies other than those
requested could assign a rating to the Series Certificate and the notes and
that rating could be lower than any rating assigned by a rating agency
chosen by the Transferor.
Certain Legal Aspects of the Receivables
Certain Matters Relating to the Transfer of the Receivables and the Series
Certificate
Prior to [ ], 2002, Chase USA, as Transferor, represented and
warranted that its transfer of receivables to the master trust was either a
complete transfer of Chase USA's interest in those receivables or (ii) the
grant of a security interest in those receivables. After [ ], 2002, Chase
USA represents and warrants that its transfer of receivables to Card
Funding is a complete transfer of Chase USA's interest in those
receivables, and Card Funding represents and warrants that its transfer of
receivables to the master trust is either a complete transfer of Chase
USA's interest in those receivables or the grant of a security interest in
those receivables. For a description of master trust's rights if these
representations and warranties are not true, see "Description of the
Securities-Description of the Series Certificates-Card Funding's
Representations and Warranties" in this prospectus.
After [ ], 2002, Card Funding represents and warrants that the
transfer of its rights (if any) under the Series Certificate to the owner
trust is either a sale of the Series Certificate or the grant of a security
interest in the series certificate.
Prior to [ ], 2002, Chase USA took steps under the UCC to
perfect the master trust's interest in the receivables and the owner trust's
interest in the series certificate. After [ ], 2002, Chase USA takes steps
under the UCC to perfect Card Funding's interest in the receivables, and
Card Funding takes steps under the UCC to perfect the master trust's
interest in the receivables and the owner trust's interest in the series
certificate. The owner trust takes steps under the UCC to perfect the
indenture trustee's interest in the series certificate. If the UCC does not
govern these transfers, however, payments to you could be delayed or
reduced if some other action is required under applicable law and has not
been taken.
Prior to [ ], 2002, Chase USA represented, warranted, and
covenanted that its transfer of receivables was perfected and free and
clear of the lien or interest of any other entity (other than the master
trust trustee and the indenture trustee). After [ ], 2002, Chase USA, Card
Funding, and the owner trust each represents, warrants, and covenants that
its transfer of receivables or the series certificate is perfected and free
and clear of the lien or interest of any other entity (other than the
master trust trustee and the indenture trustee). If any of these
representations, warranties, or covenants is not true, however, the
interest of the indenture trustee in the series certificate could be
impaired, and payments to you could be delayed or reduced. For instance:
o a prior or subsequent transferee of receivables could have an
interest in the receivables superior to that of the master
trust, or a prior or subsequent transferee of the series
certificate could have an interest in the series certificate
superior to the interest of the indenture trustee;
o a tax, governmental, or other nonconsensual lien that
attaches to the property of Chase USA, Card Funding, or the
owner trust could have priority over the interest of the
master trust in the receivables and the interest of the
indenture trustee in the series certificate;
o the administrative expenses of a conservator or receiver for
Chase USA could be paid from collections on the receivables
or distributions on the series certificate before noteholders
receive any payments; and
o if insolvency proceedings were commenced by or against Chase
USA, or if certain time periods were to pass, the master
trust and the indenture trustee may lose any perfected
interest in collections held by Chase USA and commingled with
its other funds.
While Chase USA's affiliate JPMorgan Chase Bank is the servicer,
collections from the receivables will be commingled with the servicer's
general funds and used for the servicer's benefit before each Payment Date.
The master trust will not have a perfected security interest in commingled
collections. If the short-term deposit rating of the servicer is reduced
below "A-1" or "P-1" by the applicable rating agency, the servicer will be
obligated to cease commingling collections and begin depositing collections
into the Collection Account within two business days after the date of
processing.
Certain Matters Relating to Bankruptcy or Receivership
Card Funding will not engage in any activities except purchasing
current and future receivables from Chase USA or any affiliate of Chase
USA, holding certificates representing the equity interest in owner trusts,
entering into revolving credit arrangements in order to fund purchases of
receivables, dealings in relation to the receivables and engaging in
activities incident to, or necessary or convenient to accomplish, the
foregoing. Card Funding has no intention of filing a voluntary petition
under the Bankruptcy Code or any similar applicable state law so long as
Card Funding is solvent and does not reasonably foresee becoming insolvent.
Certain Matters Relating to Receivership
Chase USA is chartered as a national banking association and is
subject to regulation and supervision by the Comptroller of the Currency.
If Chase USA becomes insolvent, is in an unsound condition, engages in
certain violations of laws or regulations, or if other similar
circumstances occur, the Comptroller is authorized to appoint the FDIC as
conservator or receiver.
Under such circumstances the FDIC could:
o require the master trust trustee to go through an administrative
claims procedure to establish its right to payments collected on
the receivables in the master trust,
o request a stay of proceedings with respect to the master trust's
claims against Card Funding or Chase USA, or
o repudiate without compensation Chase USA's ongoing obligations
under the Pooling and Servicing Agreement, such as the duty to
collect payments or otherwise service the receivables or to
provide administrative services to the owner trust.
If the FDIC were to take any of those actions, payments of principal
and interest on your notes could be delayed or reduced.
By statute, the FDIC as conservator or receiver is authorized to
repudiate any "contract" of Chase USA upon payment of "actual direct
compensatory damages." This authority may be interpreted by the FDIC to
permit it to repudiate the transfer of receivables to the master trust.
Under a recently enacted FDIC regulation, however, the FDIC as conservator
or receiver will not reclaim, recover, or recharacterize a bank's transfer
of financial assets if certain conditions are met, including that the
transfer qualifies for sale accounting treatment, was made for adequate
consideration, and was not made fraudulently, in contemplation of
insolvency, or with the intent to hinder, delay, or defraud the bank or its
creditors. Chase USA believes the FDIC regulation applies to the transfer
of receivables under the Receivables Purchase Agreement and the
Pooling and Servicing Agreement and that the conditions of the regulation
have been satisfied.
If a condition required under the FDIC regulation, or other statutory
or regulatory requirement applicable to the transaction, were found not to
have been satisfied, the FDIC as conservator or receiver might refuse to
recognize Chase USA's transfer of the receivables to Card Funding or Card
Funding's transfer of the receivables to the master trust. In that event
the master trust could be limited to seeking recovery based upon its
security interest in the receivables. The FDIC's statutory authority has
been interpreted by the FDIC and at least one court to permit the
repudiation of a security interest upon payment of actual direct
compensatory damages measured as of the date of conservatorship or
receivership. Such damages do not include damages for lost profits or
opportunity, and no damages would be paid for the period between the date
of conservatorship or receivership and the date of repudiation. The FDIC
could delay its decision whether to recognize Chase USA's transfer of the
receivables for a reasonable period following its appointment as
conservator or receiver for the bank. If the FDIC were to refuse to
recognize Chase USA's transfer of the receivables, payments of principal
and interest on your notes could be delayed or reduced.
In the event that the FDIC refused to recognize the transfer of the
receivables and repudiated the master trust's security interest in the
receivables, the amount of compensation that the FDIC is required to pay is
limited to your "actual direct compensatory damages" determined as of the
date of the FDIC's appointment as receiver. There is no statutory
definition of "actual direct compensatory damages." The staff of the FDIC
takes the position that upon repudiation or disaffirmation these damages
would not include interest accrued to the date of actual repudiation or
disaffirmation. Under the FDIC interpretation, you would receive interest
only through the date of the appointment of the receiver. Since the FDIC
may delay actual repudiation or disaffirmation for up to 180 days following
its appointment as receiver, you may not receive the full amount of
interest owing to you under the certificates or the notes. There is one
reported federal district court decision that construes the term "actual
direct compensatory damages." This 1993 court case construed the term, in
the context of the repudiation of zero coupon bonds, to mean the fair
market value of those bonds as of the date of repudiation. Under neither
interpretation, however, would you be compensated for the period between
the appointment of the receiver and the date of repudiation.
Chase USA will notify the master trust trustee if a receiver or a
conservator is appointed for it. Card Funding will notify the master trust
trustee if a bankruptcy trustee is appointed for it. In either case, this
appointment will cause a Pay Out Event for all outstanding series. After
that Pay Out Event occurs, newly created receivables will not be
transferred to the master trust and the master trust trustee will proceed
to dispose of the receivables in a commercially reasonable manner and on
commercially reasonable terms:
o unless otherwise instructed within a specified period by holders
of certificates representing undivided interests aggregating more
than 50% of the Investor Interest of each outstanding series (or
if any series has more than one class, of each class, and any
other entity specified in the Pooling and Servicing Agreement or
Series Supplement), or
o unless otherwise required by the FDIC or the bankruptcy trustee.
The proceeds from the sale of the receivables will be treated as
collections and will be distributed to certificateholders. The FDIC or the
bankruptcy trustee may delay this procedure.
If the only Pay Out Event to occur is Chase USA's insolvency and the
appointment of a conservator or receiver for it, the FDIC may have the
power to prevent the early sale of the receivables and the commencement of
the Rapid Amortization Period. In addition, the FDIC may have the power to
cause the early sale of the receivables and the early retirement of the
certificates or to prohibit the continued transfer of receivables to the
master trust.
If no Servicer Default other than the conservatorship or receivership
of the servicer exists, the FDIC may have the power to prevent the
appointment of a successor servicer. See "Description of the
Securities--Description of the Series Certificates--Pay Out Events."
Consumer Protection Laws
The relationships of the cardholder and credit card issuer and the
lender are extensively regulated by federal and state consumer protection
laws. The most significant laws include the federal Truth-in-Lending, Equal
Credit Opportunity, Fair Credit Reporting, Fair Debt Collection Practices
and Electronic Funds Transfer Acts. These statutes:
o impose disclosure requirements:
- when a credit card account is advertised, when it is opened,
at the end of monthly billing cycles, and at year end,
o limit customer liability for unauthorized use,
o prohibit discriminatory practices in extending credit, and
o impose limits on the type of account-related charges that may be
assessed.
Cardholders are entitled under these laws to have payments and credits
applied to the credit card accounts promptly, to receive prescribed notices
and to require billing errors to be resolved promptly. The master trust may
be liable for some violations of consumer protection laws that apply to the
related receivables. In addition, a cardholder may be entitled to assert
the violations by way of set-off against his or her obligation to pay the
amount of receivables owing. Chase USA warrants that all related
receivables have been and will be created in compliance with the
requirements of those laws. The servicer will also agree to indemnify the
master trust, among other things, for any liability arising from such
violations of consumer protection laws caused by the servicer. For a
discussion of the master trust's rights arising from the breach of these
warranties, see "Description of the Securities--Description of the Series
Certificates--Chase USA's Representations and Warranties."
There have been numerous attempts at the federal, state and local
level to further regulate the credit card industry. In particular,
legislation has been introduced in Congress that would impose a ceiling on
the rate at which a financial institution may assess finance charges and
fees on credit card accounts. These ceilings are substantially below the
rate of the finance charges and fees that is currently assessed on Chase
USA's accounts. Chase USA cannot predict whether any such legislation will
be enacted. If ceilings on finance charges or fees are enacted, the yield
on the receivable pool may be reduced. This reduction could result in a Pay
Out Event and a Rapid Amortization Period. See "Description of the
Securities--Description of the Series Certificates--Rebates and Fraudulent
Charges" and "--Investor Charge-Offs."
Industry Litigation
On October 9, 2001, the United States District Court for the Southern
District of New York issued its decision in an antitrust lawsuit brought by
the federal government against VISA U.S.A., Inc., VISA International Inc.
and MasterCard International Incorporated. A final judgment has not been
entered. The court ordered the repeal of rules adopted by these
associations prohibiting members from offering credit cards of some
competitors. The court rejected the government's challenges to the
governance structure of VISA U.S.A., Inc., VISA International Inc. and
MasterCard International Incorporated.
The court has issued a proposed final judgement. The parties submitted
comments to the judge's proposed final judgement and are awaiting the entry
of a final judgement. MasterCard International Incorporated has announced
publicly that it will appeal portions of the final judgement after it is
entered. It also announced it intends to seek a motion to stay the final
judgement pending the outcome of the appeal. Chase USA is not able at this
time to determine what the effect, if any, of this final judgement would be
on Chase USA's credit card business.
Tax Matters
The following is a general discussion of the material U.S. federal
income tax consequences relating to the purchase, ownership and disposition
of a note that has been offered for sale in connection with a supplement to
this prospectus. Unless otherwise indicated, this summary deals only with
U.S. Note Owners, as defined below, who acquire their notes at their
original issue price in the original issuance of those notes and who hold
the notes as capital assets.
This discussion does not address all possible material tax
considerations of an investment in a note. If necessary, additional
information will be provided in the applicable supplement to this
prospectus.
This discussion is based on present provisions of the Internal Revenue
Code of 1986, as amended, the proposed, temporary and final Treasury
regulations promulgated under the tax code, and administrative rulings or
pronouncements and judicial decisions all as in effect on the date of this
prospectus and all of which are subject to change, possibly with
retroactive effect.
The discussion does not address all of the tax consequences that may
be relevant to a particular note owner in light of that note owner's
circumstances, nor does it discuss the U.S. federal income tax consequences
that may be relevant to some types of note owners that are subject to
special treatment under the tax code, such as:
o dealers in securities or currencies,
o financial institutions,
o tax-exempt entities,
o regulated investment companies,
o real estate investment trusts,
o insurance companies,
o traders in securities who elect to mark their securities holdings
to market,
o persons liable for alternative minimum tax,
o persons holding notes as a part of a hedging, integrated,
conversion or constructive sale transaction or a straddle, or
o persons whose functional currency is not the U.S. dollar.
In addition, the following discussion does not consider the state,
local or foreign tax consequences of the investment. Each prospective note
owner is urged to consult its own tax advisor in determining the federal,
state, local and foreign income and any other tax consequences of the
purchase, ownership and disposition of a note.
Prospective investors should note that no ruling will be sought from
the IRS with respect to any of the U.S. federal income tax consequences
discussed in this prospectus and opinions of counsel, such as those
described below, are not binding on the IRS or the courts. Consequently, no
assurance can be given that the IRS will not take positions contrary to
those described below. In addition, the opinions of Simpson Thacher &
Bartlett ("tax counsel") described below are based upon the representations
and assumptions set forth in their opinions, including, but not limited to,
the assumption that all of the relevant parties will comply with the terms
of the Pooling and Servicing Agreement and the other related documents. If
those representations are inaccurate and/or the relevant parties fail to
comply with the terms of the Pooling and Servicing Agreement or the other
related documents, the conclusions of tax counsel described in the opinions
and the discussion of the U.S. federal income tax consequences set forth in
this prospectus may not be accurate.
For purposes of this discussion, the term U.S. Note Owner means a
beneficial owner of a note that is:
o a citizen or resident of the United States,
o a corporation or partnership created or organized in the United
States or under the laws of the United States or any political
subdivision of the United States,
o an estate the income of which is subject to U.S. federal income
taxation regardless of its source, or
o a trust if:
- it is subject to the primary supervision of a court
within the United States and one or more United States
persons has the authority to control all substantial
decisions of the trust, or
- it has a valid election in effect under applicable U.S.
Treasury regulations to be treated as a United States person.
For purposes of this discussion, the term Non-U.S. Note Owner means a
beneficial owner of a note who is not a U.S. Note Owner.
If a partnership holds notes, the tax treatment of a partner will
generally depend upon the status of the partner and the activities of the
partnership. A note owner that is a partner of a partnership holding such
notes should consult its own tax advisor.
Tax Characterization of the Master Trust
Tax counsel is of the opinion that the master trust will not be
classified as an association or as a publicly traded partnership taxable as
a corporation for U.S. federal income tax purposes. However, as discussed
above, this opinion is not binding on the IRS and no assurance can be given
that this characterization will prevail. If the master trust were treated
in whole or in part as a publicly traded partnership taxable as a
corporation, the taxable income of the master trust would be subject to
U.S. federal income tax at the marginal corporate income rates applicable
to such income. This entity-level tax could result in reduced distributions
to an owner trust and, therefore, to note owners. See "--Possible
Alternative Characterizations" below.
Tax Characterization of the Owner Trusts
Tax counsel is of the opinion that no owner trust described in this
prospectus will be classified as an association or as a publicly traded
partnership taxable as a corporation for U.S. tax purposes. However, as
discussed above, this opinion is not binding on the IRS and no assurance
can be given that this characterization will prevail. See "--Possible
Alternative Characterizations" below.
Tax Characterization of the Notes
The Transferor will express in the Indenture its intent that the notes
will be treated as debt for all U.S. tax purposes and, under the terms of
the Indenture and the related notes, the Transferor, and each note owner,
by the acceptance of a beneficial interest in a note, will agree to treat
each note as debt for such purposes. Tax counsel is of the opinion that,
although no transaction closely comparable to that contemplated in this
prospectus has been the subject of any Treasury regulation, revenue ruling
or judicial decision, the notes will be properly characterized as
indebtedness for U.S. tax purposes. Except where indicated to the contrary,
the discussion below assumes that the notes will be considered debt for
U.S. federal income tax purposes.
Taxation of Interest Income on the Notes
General
A U.S. Note Owner generally will include the stated interest on a
note in gross income at the time that interest income is received or
accrued in accordance with that person's regular method of tax accounting.
Original Issue Discount Obligations
Assuming that the stated interest on the notes is considered to be
"unconditionally payable", a series of notes will not be considered to have
been issued with original issue discount unless a substantial amount of
such series of notes is sold, pursuant to the original issuance of such
notes, to investors at a price that is less than the stated principal
amount of such notes by more than a statutory de minimis amount of original
issue discount. In this case, the amount of such discount will be
considered original issue discount. For this purpose, the issue price of a
series of notes is the first price at which a substantial amount of such
series of notes is sold for money.
A U.S. Note Owner must include the amount of such original issue
discount in income on a daily economic accrual basis regardless of such
U.S. Note Owner's method of accounting and in advance of the receipt of the
cash related to such income. A U.S. Note Owner will not be required to
include in income separately any payments received on the notes in respect
of such original issue discount. If any series of notes is issued with
original issue discount it will be disclosed in the relevant prospectus
supplement.
Sale, Exchange or Retirement of Notes
Upon a sale or other taxable exchange, retirement or disposition of a
note, a U.S. Note Owner will recognize gain or loss equal to the difference
between:
o the amount realized on such sale, exchange, retirement or other
disposition, less an amount equal to any accrued but unpaid
interest which the U.S. Note Owner has not included in gross
income previously, which will be taxable as interest income, and
o the U.S. Note Owner's adjusted tax basis in such note.
This gain or loss generally will be capital gain or loss and generally will
be long-term gain or loss if the U.S. Note Owner held the note for more
than one year at the time of such sale, exchange, retirement or other
disposition. The long-term capital gains of individuals generally are
eligible for reduced rates of taxation. Capital losses generally may be
used only to offset capital gains.
Possible Alternative Characterizations
Although, as described above, it is the opinion of tax counsel that
the notes will be properly characterized as debt for U.S. federal income
tax purposes, such opinion is not binding on the IRS and no assurance can
be given that this characterization will prevail. If the IRS were to
contend successfully that some or all of the notes were not debt
obligations for U.S. federal income tax purposes, an owner trust could be
classified either as a partnership or as a publicly traded partnership
taxable as a corporation for those purposes. Because in the opinion of tax
counsel the notes will be characterized as debt for U.S. federal income tax
purposes, no attempt will be made to comply with any IRS reporting or other
requirements that would apply if an owner trust were treated as a
partnership or as a publicly traded partnership taxable as a corporation.
If an owner trust were treated as a partnership, other than as a
publicly traded partnership taxable as a corporation, for U.S. federal
income tax purposes, the partnership would not be subject to U.S. federal
income tax. Rather, each item of income, gain, loss and deduction of the
partnership would be taken into account directly in computing the taxable
income of the Transferor and any note owners treated as partners in the
partnership in accordance with their respective partnership interests. The
amount and timing of income reportable by any note owners treated as
partners in the partnership would likely differ from that reportable by
those note owners had they been treated as owning debt. Moreover, unless
the partnership were treated as engaged in a trade or business, an
individual's and, under some circumstances, a trust's share of the expenses
of such partnership would be miscellaneous itemized deductions that, in the
aggregate, would be allowed as deductions only to the extent that they
exceeded two percent of the individual's adjusted gross income, and subject
to reduction if the individual's adjusted gross income exceeded specified
limits. As a result, under these circumstances, a note owner subject to
these limitations may be taxed on a greater amount of income than the
interest payable on that note owner's notes. In addition, all or a portion
of any taxable income allocated to a note owner that is a pension, profit
sharing or employee benefit plan or other tax-exempt entity, including an
individual retirement account, may constitute unrelated business taxable
income, which generally would be taxable to such note owner under the tax
code.
Alternatively, if an owner trust were classified as a publicly traded
partnership taxable as a corporation, the taxable income of the owner trust
would be subject to U.S. federal income tax at the marginal corporate
income tax rates applicable to such income. This entity-level tax could
result in reduced distributions to note owners. In addition, the
distributions from the owner trust would not be deductible in computing the
taxable income of the deemed corporation, except to the extent that any
notes were treated as debt of that corporation and distributions to the
related note owners were treated as payments of interest thereon. Moreover,
distributions to note owners not treated as holding debt would be treated
as dividends for U.S. federal income tax purposes to the extent of the
current and accumulated earnings and profits of the deemed corporation.
Non-U.S. Note Owners
Assuming that all of the notes issued to Non-U.S. Note Owners are
considered debt for U.S. federal income tax purposes, under present U.S.
federal income and estate tax law, and subject to the discussion below
concerning backup withholding:
(a) no withholding of U.S. federal income tax will be required with
respect to the payment by the Transferor or any withholding agent of
principal or interest on a note owned by a Non-U.S. Note Owner provided
that:
o the beneficial owner does not actually or constructively own 10%
or more of the total combined voting power of all classes of stock
of the Transferor entitled to vote within the meaning of section
871(h)(3) of the tax code and the Treasury regulations promulgated
under the tax code,
o the beneficial owner is not a controlled foreign corporation that
is related to the Transferor through stock ownership,
o the beneficial owner is not a bank whose receipt of interest on a
note is described in section 881(c)(3)(A) of the tax code, and
o the beneficial owner satisfies the statement requirement set forth
in section 871(h) and section 881(c) of the tax code and the
Treasury regulations promulgated under the tax code, and
(b) a note beneficially owned by an individual who at the time of his
or her death is a Non-U.S. Note Owner will not be subject to U.S. federal
estate tax as a result of such individual's death provided that:
o the individual does not actually or constructively own 10% or more
of the total combined voting power of all classes of stock of the
Transferor entitled to vote within the meaning of section
871(h)(3) of the tax code, and
o the interest payments with respect to the note would not have
been, if received at the time of the individual's death,
effectively connected with the conduct of a U.S. trade or business
by the individual.
To satisfy the statement requirement referred to in paragraph (a)
above, the note owner or a financial institution holding the note on behalf
of the owner, must provide, in accordance with specified procedures, the
Transferor or any withholding agent with a statement to the effect that
such note owner is not a U.S. Note Owner. Currently, these requirements
will be met if:
o the note owner provides its name and address, and certifies, under
penalties of perjury, that it is not a U.S. Note Owner, which
certification may be made on an IRS Form W-8BEN or successor form,
or
o the note owner holds notes through certain foreign intermediaries
and satisfies the certification requirements of applicable U.S.
Treasury regulations.
Special certification rules apply to certain Non-U.S. Note Owners that
are entities rather than individuals.
If a Non-U.S. Note Owner cannot satisfy the requirements described in
paragraph (a) above, payments of interest made to that beneficial owner
will be subject to a 30% withholding tax unless that beneficial owner
provides the Transferor or any withholding agent with a properly executed:
o IRS Form W-8BEN, or successor form, claiming an exemption from, or
a reduction in the rate of, that withholding tax under the benefit
of an applicable U.S. income tax treaty, or
o IRS Form W-8ECI, or successor form, stating that the interest paid
on the note is not subject to that withholding tax because it is
effectively connected with the note owner's conduct of a trade or
business in the United States.
A Non-U.S. Note Owner that receives interest that is effectively
connected with its conduct of a U.S trade or business, although exempt from
the U.S. withholding tax discussed above, provided the applicable
certification requirements are satisfied, will be subject to U.S. federal
income tax on the interest on a net income basis in the same manner as if
it were a U.S. Note Owner. In addition, if that Non-U.S. Note Owner is a
foreign corporation, it may be subject to a U.S. branch profits tax equal
to 30%, or lower applicable treaty rate, of its effectively connected
earnings and profits for the taxable year, subject to adjustments.
Any gain realized by a Non-U.S. Note Owner upon the sale, exchange,
retirement or other disposition of a note generally will not be subject to
U.S. federal income tax unless:
o the gain is effectively connected with a U.S. trade or business of
the Non-U.S. Note Owner in the United States,
o for a Non-U.S. Note Owner who is an individual, that individual is
present in the United States for 183 days or more in the taxable
year of the sale, exchange, retirement or other disposition, and
certain other conditions are met, or
o such Non-U.S. Note Owner is subject to tax pursuant to provisions
of the tax code regarding the taxation of U.S. expatriates.
If the notes were treated as an interest in a partnership, other than
a publicly traded partnership taxable as a corporation, that
recharacterization could cause a Non-U.S. Note Owner to be treated as
engaged in a trade or business in the United States. In that event, the
Non-U.S. Note Owner would be required to file a U.S. federal income tax
return and, generally, would be subject to U.S. federal income tax,
including, for a Non-U.S. Note Owner that is a corporation, the U.S. branch
profits tax, on its allocable share of the net income from such
partnership. Further, withholding obligations would apply with respect to
partnership income that is allocable to a Non-U.S. Note Owner that is
considered to be a partner in the partnership. That withholding would be
imposed at a rate equal to the highest marginal U.S. federal income tax
rate applicable to the Non-U.S. Note Owner. Alternatively, if some or all
of the notes were treated as equity interests in a publicly traded
partnership taxable as a corporation, the gross amount of any related
dividend distributions to a Non-U.S. Note Owner generally would be subject
to U.S. withholding tax at the rate of 30%, unless that rate were
reduced under an applicable U.S. income tax treaty. See "--Possible Alternative
Characterizations" above.
Special rules may apply for Non-U.S. Note Owners who:
o have an office or other fixed place of business in the U.S.,
o are former U.S. citizens,
o are engaged in a banking, financing, insurance or similar business
in the U.S., or
o are "controlled foreign corporations," "foreign personal holding
companies," "passive foreign investment companies" or corporations
that accumulate earnings in order to avoid U.S. federal income
tax.
These persons should consult their own U.S. tax advisors before investing
in the notes.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to some
payments of principal and interest paid on notes and to the proceeds of the
sale of a note made by U.S. Note Owners other than some exempt recipients,
such as corporations. A backup withholding tax will apply to those payments
if the U.S. Note Owner fails to provide a taxpayer identification number or
certification of exempt status or fails to report in full dividend and
interest income.
No information reporting or backup withholding will be required with
respect to payments made by the Transferor or any withholding agent to a
Non-U.S. Note Owner if the statement described above under "--Non-U.S. Note
Owners" has been received and the payor does not have actual knowledge or
reason to know that the Non-U.S. Note Owner is actually a U.S. Note Owner.
In addition, backup withholding and information reporting will not
apply if payments of principal and interest on a note are paid or collected
by a foreign office of a custodian, nominee or other foreign agent on
behalf of a note owner or if a foreign office of a broker, as defined in
applicable Treasury regulations, pays the proceeds of the sale of a note to
the owner of that note. If, however, the custodian, nominee, agent or
broker is, for U.S. federal income tax purposes:
o a United States person,
o a controlled foreign corporation,
o a foreign person that derives 50% or more of its gross income for
specified periods from the conduct of a trade or business in the
United States, or
o a foreign partnership in which one or more United States persons,
in the aggregate, owns more than 50% of the income or capital
interests in the partnership or which is engaged in a trade or
business in the United States,
those payments will not be subject to backup withholding but will be
subject to information reporting, unless:
o that custodian, nominee, agent or broker has documentary evidence
in its records that the relevant note owner is not a United States
person and other conditions are met, or
o the note owner otherwise establishes an exemption.
Payments of principal and interest on a note paid to the note owner by
a United States office of a custodian, nominee or agent, or the payment by
the United States office of a broker of the proceeds of sale of a note,
will be subject to both backup withholding and information reporting
unless:
o the relevant note owner provides the statement referred to above
under "--Non-U.S. Note Owners," and
o the payor does not have actual knowledge or reason to know that
the note owner is actually a U.S. Note Owner or the note owner
otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against a note owner's U.S. federal income
tax liability provided the required information is furnished to the IRS.
State and Local Taxation
The discussion above does not address the tax consequences of the
purchase, ownership or disposition of a note under any state or local tax
law. Each investor should consult its own tax advisor regarding state and
local tax consequences of purchasing, owning and disposing of a note.
Employee Benefit Plan Considerations
Before investing in a note, a Plan fiduciary should determine, among
other factors, whether the investment:
o is permitted under the governing Plan,
o is appropriate for the Plan in view of its overall investment
policy and the composition and diversification of its portfolio,
and
o is prudent considering the factors discussed in this prospectus.
ERISA and the tax code prohibit some transactions involving the assets
of an ERISA Plan and persons who are either "parties in interest" under
ERISA or "disqualified persons" under the tax code. Prohibited transactions
may generate excise taxes and other liabilities. Plans that are not subject
to Title I of ERISA or Section 4975 of the tax code (such as governmental,
church and Non-U.S. Plans ) may be subject to Similar Laws which may affect
their investment in the notes. Thus, a Plan fiduciary considering an
investment in the notes should also consider whether the investment might
constitute a prohibited transaction under ERISA or the tax code or a
violation of a Similar Law by reason of the acquisition of the notes by a
Plan.
Certain ERISA Considerations With Respect to Notes
Plans subject to the fiduciary and prohibited transactions rules of
ERISA and the tax code can purchase the notes subject to the considerations
and conditions discussed below.
Prohibited Transaction Considerations
Treatment of the Notes as Debt Instruments
Some transactions involving the operation of the owner trust could
give rise to prohibited transactions under ERISA and the tax code if the
assets of the owner trust were deemed to be assets of an investing Plan.
Generally, under an ERISA regulation, when an ERISA Plan acquires an
"equity interest" in an entity such as the owner trust, the ERISA Plan's
assets include both the equity interest and an undivided interest in each
of the underlying assets of the entity unless the exceptions set forth in
the regulation apply.
In general, an "equity interest" is defined under the regulation as
any interest in an entity other than an instrument which is treated as
indebtedness under applicable local law and which has no substantial equity
features. Although there is very little published authority concerning the
application of this definition, the Transferor believes that the notes
should be treated as debt rather than equity interests under the regulation
because the notes:
o should be treated as indebtedness under applicable local law and
debt, rather than equity, for U.S. tax purposes (see "Tax Matters"
above), and
o should not be deemed to have any "substantial equity features."
Accordingly, the assets of the owner trust should not constitute Plan
assets subject to the fiduciary or prohibited transaction rules of ERISA or
the tax code by reason of the acquisition of the notes by an ERISA Plan.
Acquisition of Notes
If an ERISA Plan purchases notes and a person who has a relationship
to the owner trust, such as the Transferor, the servicer, any trustee, or
underwriters, or any of their affiliates, is also a "party in interest" or
a "disqualified person" with respect to such Plan, the purchase may be
prohibited under ERISA or the tax code, unless an exemption applies.
Accordingly, fiduciaries of a Plan considering an investment in the notes
should consult their own counsel concerning the propriety of the investment
prior to making the purchase.
Similar Laws governing the investment of the assets of Plans not
subject to Title I of ERISA or Section 4975 of the tax code (such as
governmental, church and Non-U.S. Plans) may contain prohibited transaction
requirements similar to those under ERISA and/or the tax code. Accordingly,
fiduciaries of such Plans, in consultation with their advisors, should
consider the impact of applicable Similar Laws on an investment in the
notes and the considerations discussed above, as applicable.
In light of the foregoing, by acceptance of a note, each holder will
be deemed to have represented and warranted that either:
o the holder is not acquiring, or considered to be acquiring, the
note with the assets of a Plan, or
o no non-exempt prohibited transaction under Section 406 of ERISA,
Section 4975 of the tax code or a violation of any Similar Law
will occur as a result of the acquisition and holding of the
notes.
EACH PLAN FIDUCIARY SHOULD CONSULT WITH ITS COUNSEL REGARDING THE
POTENTIAL CONSEQUENCES UNDER ERISA, THE TAX CODE OR SIMILAR LAWS OF THE
ACQUISITION AND HOLDING OF THE NOTES.
Plan of Distribution
The Transferor may sell the notes offered by the prospectus:
o through underwriters or dealers,
o directly to one or more purchasers, or
o through agents.
The prospectus supplement for any offered series will set forth the
terms of the offering of the offered notes, including, without limitation,
the names of any underwriters, the purchase price of the offered notes and
the resulting proceeds to Card Funding, any underwriting discounts and
other items constituting underwriters' compensation, the initial public
offering price and any discounts or concessions allowed or reallowed or
paid to dealers.
The underwriters of any underwritten notes will purchase the notes for
their own account. The underwriters may sell any notes they purchase in one
or more transactions. Those sales may be transacted at a fixed public
offering price, or at varying prices to be determined at the time of sale,
which will be set forth or described in the prospectus supplement for the
offered notes.
If Card Funding sells any notes to dealers as principals, those
dealers may re-sell those notes to the public at varying prices set by
those dealers from time to time.
Card Funding also may sell notes through agents on a best-efforts
basis at varying prices.
Each underwriting agreement will provide that Card Funding, as
Transferor of the receivables, and Chase USA, as Originator of the
receivables, will indemnify the underwriters of the offered notes against
liabilities under the federal securities laws, or contribute to any amounts
the underwriters may be required to pay with respect to such liabilities.
Dealers and agents may also be entitled to indemnification or contribution
with respect to liabilities under the federal securities laws.
Any underwriter will be permitted to engage in the following
transactions, to the extent permitted by Regulation M under the Securities
Exchange Act of 1934:
o Over-allotment transactions, which involve syndicate sales in
excess of the offering size creating a syndicate short position,
o Stabilizing transactions, which permit bids to purchase the
offered notes so long as the stabilizing bids do not exceed a
specified maximum,
o Syndicate covering transactions, which involve purchases of the
offered notes in the open market after the distribution has been
completed in order to cover syndicate short positions, and
o Penalty bids, which permit the underwriters to reclaim a selling
concession from a syndicate member when the offered notes
originally sold by the syndicate member are purchased in a
syndicate covering transaction.
Such over-allotment transactions, stabilizing transactions, syndicate
covering transactions and penalty bids may cause prices of the offered
notes to be higher than they would otherwise be in the absence of such
transactions. Neither the master trust nor any of the underwriters
represent that the underwriters will engage in any such transactions nor
that such transactions, once commenced, will not be discontinued without
notice.
This prospectus and the attached prospectus supplement may be used by
J.P. Morgan Securities Inc., a wholly owned subsidiary of J.P. Morgan Chase
& Co. and an affiliate of Chase USA, Card Funding and JPMorgan Chase Bank,
in connection with offers and sales related to market-making transactions
in the offered notes. J.P. Morgan Securities Inc. may act as principal or
agent in such transactions. Such sales will be made at prices related to
prevailing market prices at the time of sale.
Legal Matters
Certain legal matters relating to the issuance of the notes will be
passed upon for the Transferor by Simpson Thacher & Bartlett, New York, New
York. Certain legal matters relating to the issuance of the notes will be
passed upon for the Underwriters by Skadden, Arps, Slate, Meagher & Flom
LLP, New York, New York. Helene L. Kaplan, of counsel to Skadden, Arps,
Slate, Meagher & Flom LLP, is a member of the Board of Directors of
JPMorgan Chase Bank and J.P. Morgan Chase & Co. and owns 11,700 shares of
JPMC's common stock, with the associated rights attached thereto, 14,667
units of JPMC's common stock equivalents which entitle the holder upon
termination of service as a member of JPMC's Board of Directors to receive
a cash payment for each unit equal to the fair market value at that time of
a share of JPMC's common stock and 8,011 units of JPMC's common stock
equivalents which entitle the holder upon termination of service as a
member of JPMC's Board of Directors to receive an equal number of shares of
JPMC's common stock.
Reports to Noteholders
Unless and until Definitive Notes are issued, monthly and annual
reports, containing information concerning the applicable master trust or
owner trust and prepared by the servicer or the Administrator, will be sent
on behalf of the master trust or owner trust to Cede as nominee of DTC and
registered holder of the related notes. See "Description of the
Securities--Form of Your Notes--Book-Entry Registration," "--Description of
the Series Certificates--Reports to Noteholders" and "--Evidence as to
Compliance." The reports will not constitute financial statements prepared
in accordance with generally accepted accounting principles. The servicer
does not intend to send any financial reports of Chase USA or JPMorgan
Chase Bank to the note owners. The servicer will file with the SEC such
periodic reports with respect to the master trust and the owner trusts as
are required under the Securities Exchange Act of 1934 and the rules and
regulations of the SEC under that Act.
Where You Can Find More Information
We filed a registration statement relating to the notes with the SEC.
This prospectus is part of the registration statement, but the registration
statement includes additional information.
All required annual, monthly and special SEC reports and other
information will be filed by the Transferor with respect to the master
trust or with respect to each owner trust.
You may read and copy any reports, statements or other information we
file at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can request copies of these documents, upon
payment of a duplicating fee, by writing to the SEC. Please call the SEC at
(800) SEC-0330 for further information on the operation of the public
reference rooms. Our SEC filings are also available to the public on the
SEC Internet site (http://www.sec.gov).
The SEC allows us to "incorporate by reference" information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus. Information that we file later
with the SEC will automatically update the information in this prospectus.
In all cases, you should rely on the later information over different
information included in this prospectus or the related supplement. We
incorporate by reference any future annual, monthly and special SEC reports
and proxy materials filed by or on behalf of the master trust and any
related owner trust until we terminate our offering of the notes.
As a recipient of this prospectus, you may request a copy of any
document we incorporate by reference, except exhibits to the documents
(unless the exhibits are specifically incorporated by reference), at no
cost, by writing or calling us at: Comptroller of Chase USA, 500 Stanton
Christiana Road, Floor 1, Newark, Delaware 19713, (302) 552-6310.
Glossary of Terms For Prospectus
"Account" means each MasterCard and VISA credit card account
established under a credit card agreement between an Originator (whether
originated or acquired by that Originator) and any person and selected by
Chase USA to have its receivables included in the master trust including
each Additional Account but excluding each Removed Account.
"Accumulation Period" means either a Controlled Accumulation Period or
a Rapid Accumulation Period during which principal collections are
accumulated in a Principal Funding Account for payment to
certificateholders on a scheduled payment date.
"Accumulation Period Reserve Account" means an Eligible Deposit
Account held for the benefit of the certificateholders of a series to be
funded to cover potential shortfalls resulting from the difference between:
o the amount of investment earnings on funds accumulated in the
Principal Funding Account during an Accumulation Period, and
o the amount of interest payments to be made on the Series
Certificate.
"Additional Account" means each MasterCard and VISA credit card
account selected by Chase USA to be included in the master trust as an
Account to have its receivables added to the master trust.
"Additional Interest" means interest on overdue Monthly Interest at
the rate specified in the related supplement.
"Administrator" means Chase USA as the administrator of an owner trust
under a Deposit and Administration Agreement.
"Amortization Period" means a Controlled Amortization Period, a
Principal Amortization Period or a Rapid Amortization Period.
"Bank Portfolio" means the portfolio of MasterCard and VISA accounts
owned by Chase USA.
"Card Funding" means Chase USA Card Funding LLC.
"Cash Collateral Account" means an account securing a Cash Collateral
Guaranty.
"Cash Collateral Guaranty" means a guaranty secured by the deposit of
cash or permitted investments in a Cash Collateral Account reserved for the
beneficiaries of that Cash Collateral Guaranty.
"Chase USA" means Chase Manhattan Bank USA, National Association.
"Clearstream" means Clearstream Banking, societe anonyme, an
institution administering a book-entry settlement system for trading of
securities in Europe.
"Clearstream Customers" means organizations participating in
Clearstream's book-entry system.
"Closing Date" means the date of issuance of a series.
"Collateral Interest" means a subordinated interest in a series of
certificates, in an amount initially equal to the percentage of the
certificates of a series specified in the prospectus supplement for that
series.
"Collection Account" means an Eligible Deposit Account for the benefit
of the certificateholders into which the servicer deposits collections on
the receivables.
"Companion Series" means:
o a series which has been paired with a previously issued Series
Certificate and has an Investor Interest that increases as the
Investor Interest of the previously issued Series Certificate
decreases, or
o any series designated as a Companion Series in the related Series
Supplement.
"Controlled Accumulation Amount" means a designated amount scheduled
to be deposited in the Principal Funding Account on each Transfer Date
during the Controlled Accumulation Period as specified in the related
supplement.
"Controlled Accumulation Period" means a period:
o beginning on a date specified in the related supplement after the
Revolving Period and
o ending on the earliest of:
- the start of the Rapid Accumulation Period,
- the start of the Rapid Amortization Period, and
- the Series Termination Date, and
during which collections of Principal Receivables up to the amount
specified in the related supplement are deposited monthly into the
Principal Funding Account.
"Controlled Amortization Amount" means a designated amount scheduled
to be paid on each Transfer Date during the Controlled Amortization Period
as specified in the related supplement.
"Controlled Amortization Period" means a period:
o beginning on a date specified in the related supplement, and
o ending on the earlier of:
- the start of the Rapid Amortization Period, and
- the Series Termination Date, and
during which collections of Principal Receivables up to an amount specified
in the related supplement are paid to the owner trust on each Transfer
Date.
"Controlled Deposit Amount" means the amount to be deposited in the
Principal Funding Account on each Transfer Date during the Controlled
Accumulation Period to cover principal amounts due to the owner trust on
each scheduled payment date equal to the sum of:
o the Controlled Accumulation Amount for that Transfer Date, and
o any remaining shortfall in the Controlled Deposit Amount for any
prior Transfer Date.
"Cooperative" means the Euroclear Clearance System, S.C., a Belgian
cooperative corporation.
"Credit Enhancement" means any instrument, agreement or other
arrangement providing support for a series or class of certificates or
notes. Credit Enhancement may be in the form of:
o the subordination of one or more classes of the certificates or
the notes of a series,
o a letter of credit,
o cash collateral guaranty or account,
o a collateral interest,
o a surety bond,
o an insurance policy,
o a spread account,
o a reserve account,
o the use of cross support features,
o another method of Credit Enhancement described in the related
supplement, or
o any combination of the above.
"Credit Enhancement Percentage" means the percentage interest in the
receivables allocated to some credit enhancement providers.
"Cut-Off Date" means September 27, 1995.
"Defaulted Account" means an Account written off as uncollectible by
the servicer.
"Definitive Notes" means notes in fully registered, certificated form.
"Deposit and Administration Agreement" means an agreement between Card
Funding, Chase USA and an owner trust as specified in the related
supplement under which a series certificate is deposited with the owner
trust and Chase USA agrees to act as Administrator of the owner trust.
"Distribution Account" means an Eligible Deposit Account from which
distributions are made to certificateholders.
"Eligible Account" means, as of the relevant Cut-Off Date, or, with
respect to Additional Accounts, as of their date of designation for
inclusion in the master trust, each Account owned by an Originator:
o which was in existence and maintained with the Originator,
o which is payable in United States dollars,
o the obligor of which has provided, as his or her most recent
billing address, an address located in the United States or its
territories or possessions,
o which has not been classified by the Originator as counterfeit,
deleted, fraudulent, stolen or lost,
o which has not been charged off by the Originator in its customary
and usual manner for charging off Accounts as of the Cut-Off Date
and, with respect to an Additional Account, as of its date of
designation for inclusion in the master trust, and
o which has not been identified by the Originator on its electronic
records as being involved in a voluntary or involuntary bankruptcy
proceeding.
"Eligible Deposit Account" means either:
o a segregated bank account with an Eligible Institution, or
o a segregated bank account with the corporate trust department of a
depository institution organized under the laws of the United
States or any state, including the District of Columbia, or any
domestic branch of a foreign bank, and acting as a trustee for
funds deposited in such accounts, so long as any of the securities
of such depository institution has an investment grade rating from
each rating agency.
"Eligible Institution" means those financial institutions described
under "Description of the Securities--Description of the Series
Certificates--Master Trust Bank Accounts."
"Eligible Receivable" means each receivable:
o which has arisen under an Eligible Account,
o which was created in compliance, in all material respects, with
all requirements of law applicable to the Originator, and under
the terms of a credit card agreement which complies in all
material respects with all requirements of law applicable to the
Originator,
o with respect to which all consents, licenses or authorizations of,
or registrations with, any governmental authority required to be
obtained or given by the Originator in connection with the
creation of a receivable or the execution, delivery, creation and
performance by the Originator of the related credit card agreement
have been duly obtained or given and are in full force and effect
as of the date of the creation of the receivable,
o as to which, at the time of its creation, the Transferor or the
master trust has good title free and clear of all liens and
security interests arising under or through the Transferor, other
than some tax liens for taxes not then due or which the Transferor
is contesting,
o which is the legal, valid and binding payment obligation of the
obligor under the receivable, legally enforceable against that
obligor in accordance with its terms, subject to some
bankruptcy-related exceptions, and
o which constitutes an "account" under Article 9 of the UCC as then
in effect in the State of Delaware.
"Enhancement Invested Amount" means a subordinated investor interest
in cash flows in respect of the receivables to the extent described in the
related supplement.
"ERISA Plan" means a Plan that is subject to Title I of ERISA or
Section 4975 of the tax code.
"Euroclear" means the system operated by Euroclear Bank, S.A./N.V. under
contract with the Cooperative.
"Euroclear Participants" means participants of the Euroclear system.
"Events of Default" means, with respect to the notes, those events
described under "Description of the Securities--Description of the
Notes--The Indentures--Events of Default:
Rights Upon Event of Default."
"Excess Funding Account" means the Eligible Deposit Account for the
benefit of the certificateholders in which principal collections are held
as collateral if the Transferor Interest is less than the Minimum
Transferor Interest.
"FDR" means First Data Resources, Inc., a computer data processing
servicer for the bankcard industry.
"Finance Charge Account" means a bank account held for the benefit of
the certificateholders in which the servicer will deposit collections of
finance charge receivables allocated to the certificateholders.
"Finance Charge Receivables" means periodic finance charges and other
amounts charged in respect of some credit card fees, including cash advance
fees, late fees and annual membership fees plus the amount of any Discount
Option Receivables.
"Funding Period" means with respect to any pre-funded series, the
period:
o beginning on the Closing Date and ending on a specified date
before an Amortization Period or an Accumulation Period begins,
and
o during which the aggregate amount of Principal Receivables in the
master trust may be less than the aggregate principal amount of
the Series Certificate of the related series and an amount is held
in a Pre-Funding Account for the benefit of the Series
Certificate.
"Group" means each series specified in the related supplement to be
included in any group.
"Indenture" means an agreement between an Owner Trustee on behalf of a
Chase credit card owner trust and the applicable Indenture Trustee under
which notes are issued.
"Indenture Trustee" means the trustee acting on behalf of the
noteholders under an Indenture.
"Interchange" means fees received by creditors participating in the
VISA and MasterCard associations as partial compensation for taking credit
risk, absorbing fraud losses, and funding receivables for a limited period
prior to initial billing.
"Interest Funding Account" means an Eligible Deposit Account for the
benefit of the certificateholders in which amounts to be paid to
certificateholders as interest will be deposited on a monthly basis, if
interest payments are made to certificateholders less frequently than
monthly.
"Investor Charge-Off" means, for any Monthly Period, and for any
series:
o the amount by which the sum of (w) related Monthly Interest, (x)
overdue Monthly Interest, (y) any Additional Interest, and (z) the
accrued and unpaid Investor Servicing Fees payable from
collections of Finance Charge Receivables, the Investor Default
Amount and any other required fees exceeds
o amounts available to pay those amounts out of collections of
Finance Charge Receivables, available credit enhancement amounts,
if any, and other sources specified in the related supplement, if
any, but not more than the Investor Default Amount.
"Investor Default Amount" means, for any Monthly Period, the product
of:
o the Investor Percentage with respect to that Monthly Period, and
o the aggregate amount of Principal Receivables in Defaulted
Accounts for that Monthly Period.
"Investor Interest" means the principal amount of the interest of the
certificateholders in a series as specified in the related supplement.
"Investor Percentage" means each of the varying percentages used to
allocate to a Series Certificate receivables in Defaulted Accounts and
collections of Finance Charge Receivables and collections of Principal
Receivables.
"Investor Servicing Fee" means the servicing fee allocable to the
Investor Interest of a series, as specified in the related supplement.
"JPMC" means J.P. Morgan Chase & Co.
"Master Trust Portfolio" means the portfolio of MasterCard and VISA
accounts selected from the Bank Portfolio to be Accounts designated to have
their receivables included in the master trust.
"Minimum Aggregate Principal Receivables" means an amount equal to:
o the sum of the numerators used to calculate the Investor
Percentages for the allocation of collections of Principal
Receivables for each series outstanding minus
o the amount on deposit in the Excess Funding Account;
provided, that the Minimum Aggregate Principal Receivables may be reduced
to a lesser amount at any time if the Rating Agency Condition is satisfied.
"Minimum Transferor Interest" means, for any period, 7% of the sum of:
o the average Principal Receivables for that period, and
o the amount on deposit in each of the Excess Funding Account, the
Principal Funding Account and any other bank account specified in
the Pooling and Servicing Agreement or any Series Supplement;
provided, however, that Chase USA may reduce the Minimum Transferor
Interest to not less than 2% of the sum of the amounts specified above upon
satisfaction of the Rating Agency Condition and other conditions set forth
in the Pooling and Servicing Agreement.
"Monthly Interest" means interest accrued for a specified month for
any series or class.
"Monthly Period" means a calendar month, except that the first Monthly
Period for any series:
o begins on the Closing Date for that series, and
o ends on the last day of the calendar month before the month in
which the first Transfer Date occurs for that series.
"Non-U.S. Note Owner" means a beneficial owner of a note other than a
U.S. Note Owner.
"Note Maturity Date" means the final Payment Date on which payments
are to be made to the noteholders of a series.
"Note Rate" means the interest rate per annum applicable for any
series or class of notes.
"Originator" means each entity that is a party to the Receivables
Purchase Agreement in the capacity of the "seller". Initially, the sole
Originator is Chase USA.
"Owner Trustee" means the trustee of an owner trust identified in the
related supplement.
"Participations" means undivided interests in a pool of assets
primarily consisting of receivables arising under consumer revolving credit
card accounts owned by Chase USA.
"Payment Date" means the dates specified in the related supplement on
which distributions of interest or principal are to be made to noteholders.
"Pay Out Event" means, for any certificates, including Series
Certificates issued by the master trust, any of the events identified in
the related supplement and any of the events described under "Description
of the Securities--Description of the Series Certificates--Pay Out Events."
"Paying Agent" means JPMorgan Chase Bank.
"Plan" means:
o an employee benefit plan within the meaning of Section 3(3) of
ERISA, whether or not subject to ERISA,
o a plan within the meaning of Section 4975 of the tax code, whether
or not subject to Section 4975 of the tax code, or
o any entity which may be deemed to hold the assets of any of those
plans under ERISA, the regulations promulgated under ERISA
(including, without limitation, an insurance company general
account), or any Similar Law.
"Pooling and Servicing Agreement" means the Fourth Amended and
Restated Pooling and Servicing Agreement, dated as of [ ], 2002, among Card
Funding, JPMorgan Chase Bank and the master trust trustee, as may be
amended from time to time.
"Portfolio Yield" means, with respect to any series for any Monthly
Period, the annualized percentage equivalent of a fraction:
o the numerator of which is the sum of collections of Finance Charge
Receivables, investment earnings on amounts in the Principal
Funding Account--net of investment expenses and losses--and
amounts withdrawn from the Accumulation Period Reserve Account
deposited into the Finance Charge Account for that Monthly Period,
calculated on a cash basis after subtracting the Investor Default
Amount for that Monthly Period, and
o the denominator of which is the Investor Interest as of the close
of business on the last day of that Monthly Period.
"Pre-Funding Account" means a bank account:
o established with the master trust trustee for the benefit of
certificateholders of a series, and
o in which is deposited the difference between the aggregate amount
of principal receivables allocable to that series and the
aggregate outstanding principal amount of the Series Certificate.
"Principal Account" means a bank account held for the benefit of the
certificateholders in which the servicer will deposit collections of
Principal Receivables allocated to the certificateholders.
"Principal Amortization Period" means a period:
o beginning on the date specified in the related supplement, and
o ending on the earlier of:
- the start of the Rapid Amortization Period, and
- the Series Termination Date, and
during which collections of Principal Receivables allocable to the Investor
Interest of a series and other amounts specified in the related supplement
will be used on each Transfer Date to make principal distributions on the
Series Certificate of a series.
"Principal Commencement Date" means the date on which principal
payments on the certificates or notes of a series are scheduled to begin.
"Principal Funding Account" means an Eligible Deposit Account held for
the benefit of the certificateholders of a series with an Accumulation
Period in which collections of principal receivables are accumulated. At
the end of the Accumulation Period, the amount in this account will be paid
to certificateholders of the related class or series.
"Principal Receivables" means receivables that consist of amounts
charged by cardholders for:
o goods and services,
o cash advances, and
o consolidation or transfer of balances from other credit cards,
less the amount of any Discount Option Receivables.
"Rapid Accumulation Event" means an event specified in the related
supplement that would cause a Rapid Accumulation Period to commence.
"Rapid Accumulation Period" means a period:
o beginning when a Rapid Accumulation Event occurs or at such other
time as is specified in the related supplement, and
o ending on the earliest of:
- the start of the Rapid Amortization Period,
- the date on which the Investor Interest of the Series
Certificate of that series has been paid in full, and
- the Series Termination Date, and
during which collections of Principal Receivables allocable to a series
will be deposited on each Transfer Date into the Principal Funding Account
and used to pay principal on the Series Certificate of that series on the
scheduled payment date.
"Rapid Amortization Period" means a period:
o beginning on the day a Pay Out Event occurs or such other date as
may be specified in the related supplement, and
o ending on the earlier of:
- the date on which the Investor Interest of the Series
Certificate of that series has been paid in full, and
- the related Series Termination Date, and
during which collections of Principal Receivables allocable to a series
will be paid on each Payment Date on the Series Certificate of that series.
"Rating Agency Condition" means the notification in writing by each
rating agency that a proposed action will not result in that rating agency
reducing or withdrawing its then-existing rating of the Series Certificates
or notes of any outstanding series or class with respect to which it is a
rating agency.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of [ ], 2002, between Card Funding, as purchaser and
Chase USA, as seller, as amended, and any other receivables purchase
agreement entered into by Card Funding and designated a "Receivables
Purchase Agreement".
"Record Date" means the date specified in the related supplement as of
which a noteholder must be the registered holder of a note to receive a
payment on the following Payment Date.
"Recoveries" means amounts received by the servicer with respect to
charged-off accounts in the Bank Portfolio.
"Removed Accounts" means Accounts designated by the Transferor to have
their receivables conveyed from the master trust to the Transferor and
which no longer constitute Accounts.
"Reserve Account" means a bank account established to provide support
for a series or one or more classes of notes. This type of account may be
funded by an initial cash deposit or any other method provided in the
related supplement.
"Revolving Period" means, with respect to any series, a period:
o beginning on the Closing Date, and
o ending when an Accumulation Period or Amortization Period begins,
and
during which collections of Principal Receivables allocable to that series
are generally not paid on Series Certificates or accumulated but are
generally paid to the Transferor.
"Series Certificate" means a Series Certificate issued by the master
trust and deposited in an owner trust.
"Series Supplement" means the supplement to the Pooling and Servicing
Agreement relating to a particular Series Certificate.
"Series Termination Date" means for any series the earliest to occur
of:
o the Transfer Date on which the Investor Interest has been paid in
full,
o the final Transfer Date on which principal and interest with
respect to a series is scheduled to be paid as described in the
related supplement, and
o the Trust Termination Date.
"Servicer Default" means any failure of the servicer under the Pooling
and Servicing Agreement and any Series Supplement:
o to perform its duties or fulfill its obligations (each, a
"breach"), and
o to cure the breach within a specified period of time, including
any grace period, after discovery or notice of the breach.
See "--Description of the Securities--Description of the Series
Certificates--Servicer Default" for a description of the specific events
that could result in a Servicer Default.
"Similar Law" means any federal, state or local law that is
substantially similar to the provisions of Title I of ERISA or Section 4975
of the tax code.
"Spread Account" means an account providing support for a series or
one or more classes of certificates or notes by the periodic deposit in
that account of available excess cash flow from the master trust assets.
"Tax Opinion" means an opinion of counsel to the effect that, for
federal income tax purposes:
o an issuance will not adversely affect the tax characterization as
debt of certificates of any outstanding series or class that were
characterized as debt at the time of their issuance,
o following the issuance, the master trust will not be deemed to be
an association, or publicly traded partnership, taxable as a
corporation, and
o the issuance will not cause or constitute an event in which gain
or loss would be recognized by any certificateholder or the master
trust.
"Transfer Date" means the business day immediately prior to a Payment
Date.
"Transferor" means:
o with respect to the period before June 1, 1996, JPMorgan Chase
Bank,
o with respect to the period from June 1, 1996 until [ ], 2002,
Chase USA, and
o with respect to the period beginning on [ ], 2002, Card Funding.
"Transferor Certificate" means the certificate that represents the
Transferor Interest in the master trust or the uncertificated interest in
the master trust comprising the Transferor Interest.
"Transferor Interest" means the aggregate principal amount of the
interest of the Transferor in the master trust.
"Transferor Percentage" means the percentage of receivables in
Defaulted Accounts and collections of Finance Charge Receivables and
collections of Principal Receivables allocated to the holder of the
Transferor Certificate equal to 100% minus the sum of the applicable
Investor Percentages for all series of certificates then outstanding.
"Trust Termination Date" means the earliest of:
o the day after the Transfer Date on which the aggregate Investor
Interest and Enhancement Invested Amount or Collateral Interest,
if any, with respect to each series outstanding is zero,
o August 31, 2016, and
o if the receivables are sold, disposed of or liquidated after an
insolvency event occurs, immediately after that sale, disposition
or liquidation.
"UCC" means the Uniform Commercial Code as in effect in the
jurisdiction where Chase USA is located.
"U.S. Note Owner" means a beneficial owner of a note described under
"Tax Matters."
"U.S. Person" means a person described under "Description of the
Securities--Form of Your Notes--Certain U.S. Federal Income Tax
Documentation Procedures relating to Global Notes."
PRINCIPAL OFFICE OF
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
White Clay Center Building 200
Route 273
Newark, Delaware 19711
CHASE USA CARD FUNDING LLC
White Clay Center Building 200
Route 273
Newark, Delaware 19711
CHASE CREDIT CARD MASTER TRUST
TRUSTEE
The Bank of New York
Corporate Trust - ABS
5 Penn Plaza, 16th Floor
New York, New York 10001
CHASE CREDIT CARD OWNER TRUST 200_-_
OWNER TRUSTEE INDENTURE TRUSTEE
Wilmington Trust Company The Bank of New York
Rodney Square North Corporate Trust ABS
1100 North Market Street 5 Penn Plaza, 16th Floor
Wilmington, Delaware 19890 New York, New York 10001
PAYING AGENT AND TRANSFER AGENT
JPMorgan Chase Bank
450 West 33rd Street
New York, New York 10036
LUXEMBOURG LISTING AGENT AND INTERMEDIARY
Banque Generale du Luxembourg, S.A.
50 Avenue J.F. Kennedy
L-2951 Luxembourg
LEGAL ADVISOR TO THE TRANSFEROR AND THE OWNER TRUST
as to United States law
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
LEGAL ADVISOR TO THE UNDERWRITERS
as to United States law
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
INDEPENDENT ACCOUNTANTS TO THE TRANSFEROR
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
Prospectus Supplement
Chase Credit Card
Owner Trust 200_
Issuer
$[ ]
Class A Floating Rate
Asset Backed Notes
$[ ]
Class B Floating Rate
Asset Backed Notes
$[ ]
Class C Floating Rate
Asset Backed Notes
Chase Manhattan Bank USA,
National Association
Originator and Administrator
Chase USA Card Funding LLC
Transferor
JPMorgan Chase Bank
Servicer of Chase
Credit Card Master Trust
Underwriters of the Class A Notes
JPMorgan
[ ]
Underwriters of the Class B Notes
JPMorgan
[ ]
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the prospectus. We have not
authorized anyone to provide you with different information.
We are not offering these notes in any state where the offer is not
permitted.
Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of these notes and with respect to their unsold allotments or
subscriptions. In addition, all dealers selling these notes will deliver a
prospectus supplement and prospectus until [ ].
-------------
PART II
Item 14. Other Expenses of Issuance and Distribution
The following is an itemized list of the estimated expenses to
be incurred in connection with the offering of the securities being offered
hereunder other than underwriting discounts and commissions.
Registration Fee $239.00
Printing and Engraving *
Trustee's Fees *
Legal Fees and Expenses *
Blue Sky Fees and Expenses *
Accountants' Fees and Expenses *
Rating Agency Fees *
Miscellaneous Fees *
-------------------------
Total *
--------------------------
- ----------------------------------
*To be provided by amendment
Item 15. Indemnification of Managers and Officers
Under the Limited Liability Company Agreement (the "Agreement")
of Chase USA Card Funding LLC (the "Company"), none of the member, the
special member, the independent manager or any agent of the Company or any
employee, representative, agent or affiliate of the member, the special
member, the directors, the officers or the independent manager
(collectively, the "Covered Persons") shall be liable to the Company or any
other Person who has an interest in or claim against the Company for any
loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Covered Person in good faith on behalf of the Company
and in a manner reasonably believed to be within the scope of the authority
conferred on such Covered Person by the Agreement, except that a Covered
Person shall be liable for any such loss, damage or claim incurred by
reason of such Covered Person's gross negligence or willful misconduct.
To the fullest extent permitted by applicable law, a Covered
Person shall be entitled to indemnification from the Company for any loss,
damage or claim incurred by such Covered Person by reason of any act or
omission performed or omitted by such Covered Person in good faith on
behalf of the Company and in a manner reasonably believed to be within the
scope of the authority conferred on such Covered Person by the Agreement,
except that no Covered Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such Covered Person by
reason of such Covered Person's gross negligence or willful misconduct with
respect to such acts or omissions; provided, however, that any such
indemnity by the Company shall be provided out of and to the extent of
Company assets only, and the Member shall not have personal liability on
account thereof; and provided further, that, prior to the date which is one
year and one day after the date on which all obligations of the Company
under the specified documents have been paid in full, no payment of any
indemnity (or advance of expenses) from funds of the Company (as distinct
from funds from other sources, such as insurance) shall be payable from
amounts allocable or payable to any other Person pursuant to such
documents.
To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by a Covered Person defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by
the Company prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Company of an undertaking by or on
behalf of the Covered Person to repay such amount if it shall be determined
that the Covered Person is not entitled to be indemnified as provided
above.
A Covered Person shall be fully protected in relying in good
faith upon the records of the Company and upon such information, opinions,
reports or statements presented to the Company by any Person as to matters
the Covered Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Company, including information, opinions,
reports or statements as to the value and amount of the assets,
liabilities, or any other facts pertinent to the existence and amount of
assets from which distributions to the Member might properly be paid.
To the extent that, at law or in equity, a Covered Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Company or to any other Covered Person, a Covered Person acting under the
Agreement shall not be liable to the Company or to any other Covered Person
for its good faith reliance on the provisions of the Agreement or any
approval or authorization granted by the Company or any other Covered
Person. The provisions of the Agreement, to the extent that they restrict
the duties and liabilities of a Covered Person otherwise existing at law or
in equity, are agreed by the Member and the Special Member to replace such
other duties and liabilities of such Covered Person. The foregoing
indemnification survives any termination of the Agreement.
There are managers and officers liability insurance policies
presently outstanding which insure managers and officers of the Company,
the Company's parent and certain of its subsidiaries. The policies cover
losses for which the Company, the Company's parent or any of those
subsidiaries shall be required or permitted by law to indemnify managers
and officers and which result from claims made against such managers or
officers based upon the commission of wrongful acts in the performance of
their duties. The policies also cover losses which the managers or officers
must pay as the result of claims brought against them based upon the
commission of wrongful acts in the performance of their duties and for
which they are not indemnified by the Company, the Company's parent or any
of those subsidiaries. The losses covered by the policies are subject to
certain exclusions and do not include fines or penalties imposed by law or
other matters deemed uninsurable under the law. The policies contain
self-insured retention provisions.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
1.1-- Form of Underwriting Agreement.*
4.1-- Fourth Amended and Restated Pooling and Servicing Agreement,
dated as of [ ], 2002, among Card Funding, Chase USA,
JPMorgan Chase Bank and The Bank of New York.*
4.2-- Receivables Purchase Agreement, dated as of [ ], 2002,
between Chase USA and Card Funding.*
4.3-- Form of Series Supplement for Series Certificates.*
4.4-- Form of Delaware Statutory Business Trust Agreement of Chase
Credit Card Owner Trust 200 - __ between Card Funding and
the Owner Trustee.*
4.4a-- Form-of Delaware Common Law Trust Agreement of Chase Credit
Card Owner Trust 200_ between the Card Funding and the Owner
Trustee.*
4.5-- Form of Deposit and Administration Agreement among Card Funding,
Chase USA and Chase Credit Card Owner Trust 200 - _____.*
4.6-- Form of Indenture between Chase Credit Card Owner Trust 200_-__
and the Indenture Trustee.*
4.7-- Form of Note (contained in Exhibit 4.6).*
5.1-- Opinion of Simpson Thacher & Bartlett.*
8.1-- Opinion of Simpson Thacher & Bartlett with respect to certain
tax matters (included in opinion to be filed as Exhibit 5.1).*
23.1-- Consent of Simpson Thacher & Bartlett (included in opinion to
be filed as Exhibit 5.1).*
24.1-- Powers of Attorney (included on page II-6).
25.1-- Form T-1 of Indenture Trustee.*
- ---------------------------
*To be filed by amendment.
(b) Financial Statements
All financial statements, schedules and historical financial
information have been omitted as they are not applicable.
Item 17. Undertakings
The undersigned Registrants hereby undertake as follows:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement: (i)
to include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933 (the "Act"); notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement; (ii) to reflect in the prospectus any facts or
events arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth
in the Registration Statement; (iii) to include any material information
with respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that (a)(i) and (a)(ii) will not
apply if the information required to be included in a post-effective
amendment thereby is contained in periodic reports filed pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(b) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
(d) That, for purposes of determining any liability under the
Act, each filing of the Master Trust's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to
be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(e) That insofar as indemnification for liabilities arising
under the Act may be permitted to directors, managers, officers and
controlling persons of the Registrants pursuant to the provisions described
under Item 15 above, or otherwise, the Registrant have been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred
or paid by a director, officer or controlling person of the Registrants in
the successful defense of any action, suit or proceeding) is asserted by
such director, manager, officer or controlling person in connection with
the securities being registered, the Registrants will, unless in the
opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(f) That, for purposes of determining any liability under the
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or
(4) under the Act shall be deemed to be part of this Registrant Statement
as of the time it was declared effective.
(g) That, for the purpose of determining any liability under the
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Signatures
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Newark, State of Delaware, on
January 10, 2002.
CHASE USA CARD FUNDING LLC
By: /s/ Keith Schuck
--------------------------------------------------
Keith Schuck
President and Manager
CHASE CREDIT CARD MASTER TRUST
(Co-Registrant)
By: /s/ Miriam Haimes
------------------------------------------------
Miriam Haimes
Senior Vice President and Financial Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints John C. Wilmot, Michael J. Barrett,
Vincent J. Mattamira, Keith W. Schuck, Andrew T. Semmelman, Patricia
Garvey, Barbara D'Amico, Robert Birnbaum, Neila Radin and James Y. Lee, or
any one of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
to the Registration Statement, Securities Act of 1933, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and does hereby
grant unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or their or his
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on January 10, 2002 by the
following persons in the capacities indicated.
SIGNATURE TITLE
/s/ Keith W. Schuck Keith W. Schuck
- ---------------------------------------- President and Manager
/s/ John Wilmot John Wilmot
- ---------------------------------------- Manager
/s/ Richard I. Landau Richard I. Landau
- ---------------------------------------- Vice President
/s/ Andrew T. Semmelman Andrew T. Semmelman
- ---------------------------------------- Secretary
/s/ Patricia M. Garvey Patricia M. Garvey
- ---------------------------------------- Treasurer