AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 7, 1999
REGISTRATION NO. 333-74303
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
(Originator of the Trusts described herein)
(Exact name of registrant as specified in its charter)
CHASE CREDIT CARD MASTER TRUST
(Issuer with respect to the Offered Securities)
DELAWARE 22-2382028
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
802 DELAWARE AVENUE
WILMINGTON, DELAWARE 19801
(302) 575-5000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
ANDREW T. SEMMELMAN
VICE PRESIDENT
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION
C/O 802 DELAWARE AVENUE
WILMINGTON, DELAWARE 19801
(302) 575-5000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
<TABLE>
<S> <C> <C>
DAVID M. EISENBERG, ESQ. MARTIN R. JOYCE, ESQ. ANDREW M. FAULKNER, ESQ.
SIMPSON THACHER & BARTLETT THE CHASE MANHATTAN BANK SKADDEN, ARPS, SLATE, MEAGHER
425 LEXINGTON AVENUE 270 PARK AVENUE & FLOM LLP
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10017 919 THIRD AVENUE
(212) 455-2000 (212) 270-5918 NEW YORK, NY 10022
(212) 735-2853
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</TABLE>
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. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE REGISTRATION
REGISTERED REGISTERED(1) UNIT OR SHARE(2) OFFERING PRICE FEE (3)
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<S> <C> <C> <C> <C>
Asset Backed
Certificates $5,060,221,000 100% $5,060,221,000 $1,406,741.44
Asset Backed Notes $5,060,221,000 100% $5,060,221,000 --
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Total $5,060,221,000 $5,060,221,000 $1,406,741.44
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</TABLE>
(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 $5,060,221,000. In no event will the aggregate initial
offering price of securities registered hereunder exceed $5,060,221,000 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.
(3) $278 of which has previously been paid.
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The attached prospectus and either of the attached prospectus supplements
may be used by Chase Securities Inc., a wholly owned subsidiary of The
Chase Manhattan Corporation and an affiliate of the Transferor, in
connection with offers and sales related to market-making transactions in
the securities. Chase 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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THE REGISTRANTS HEREBY AMEND, THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus which
is a part of this Registration Statement shall relate to $2,939,779,000 of
Asset Backed Certificates which remain unsold under the Registration
Statement on Form S-3 (File No. 333-43173) of the Registrant which amount
may be applied to the issuance of Asset Backed Notes and Asset Backed
Certificates under the Registration Statement. Accordingly, the Prospectus
relates to a total of up to $8 billion of Asset Backed Certificates and a
total of up to $8 billion of Asset Backed Notes, which have been registered
under this Registration Statement and Registration Statement No. 333-43173.
EXPLANATORY NOTE
This Form S-3 Registration Statement (file no. 333-74303) includes, on
behalf of Chase Manhattan Bank USA, National Association (the "Bank"), as
originator of the trusts described herein, a base prospectus and two model
prospectus supplements. One model prospectus supplement describes an
offering by Chase Credit Card Master Trust of asset backed certificates.
The other model prospectus supplement describes an offering by Chase Credit
Card Owner Trust 1999-__ of asset backed notes. The prospectus and each
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.
[FLAG]
The information in this 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. This prospectus is not
an offer to sell these securities and is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
[TEXT BOX]
A security is not a deposit and neither the securities nor the underlying
accounts or receivables or series certificates or notes are insured or
guaranteed by the FDIC or any other governmental agency.
A certificate will represent an interest in the master trust only. A note
will be an obligation of an owner trust only. Neither the certificates nor
the notes will represent interests in or recourse obligations of Chase USA,
the servicer or any of their affiliates.
This prospectus may be used to offer and sell any series of securities only
if accompanied by the prospectus supplement for that series.
SUBJECT TO COMPLETION, DATED SEPTEMBER 3, 1999
Prospectus
CHASE CREDIT CARD MASTER TRUST
CHASE CREDIT CARD OWNER TRUSTS
Issuers
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
Transferor and Administrator of Owner Trusts
THE CHASE MANHATTAN BANK
Servicer of Master Trust
ASSET BACKED SECURITIES
THE MASTER TRUST-
o may periodically issue asset backed certificates in one or more
series, including series of asset backed certificates 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 SECURITIES-
o with respect to the certificates, will represent interests in the
master trust and will be paid only from the assets of the master
trust;
o with respect to the notes, will be obligations of an owner trust and
will be secured by the assets of that owner trust, including one or
more 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 securities.
The certificateholders will receive interest and principal payments from a
varying percentage of credit card account collections.
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 SECURITIES OR DETERMINED
WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_______, 1999
TABLE OF CONTENTS
OVERVIEW OF THE INFORMATION IN THIS PROSPECTUS AND THE
PROSPECTUS SUPPLEMENT...............................................4
THE MASTER TRUST.......................................................6
THE OWNER TRUSTS.......................................................6
CHASE USA'S CREDIT CARD ACTIVITIES.....................................7
Acquisition and Maintenance of Credit Card Accounts..................8
Billing and Payments................................................10
Collection of Delinquent Accounts...................................12
Description of First Data Resources, Inc. ..........................13
Interchange.........................................................13
Recoveries .........................................................14
Year 2000 Compliance ...............................................14
THE RECEIVABLES.......................................................16
USE OF PROCEEDS.......................................................18
MATURITY CONSIDERATIONS...............................................18
Series of Certificates..............................................18
Series of Notes.....................................................19
CHASE USA.............................................................19
DESCRIPTION OF THE SECURITIES.........................................20
Form of Your Securities.............................................21
DTC ...............................................................21
Cedelbank...........................................................22
Euroclear...........................................................23
Book-Entry Registration.............................................24
Definitive Securities...............................................26
Initial Settlement..................................................27
Secondary Market Trading............................................28
Description of the Certificates.....................................31
Transferor Certificate..............................................32
Issuing New Series of Certificates..................................33
Interest Allocations................................................34
Principal Allocations...............................................35
Transfer and Assignment of Receivables..............................38
Chase USA's Representations and Warranties..........................38
Addition of Master Trust Assets.....................................39
Removal of Master Trust Assets......................................41
Discount Option.....................................................42
Master Trust Bank Accounts..........................................43
Companion Series....................................................44
Funding Period......................................................45
Investor Percentage and Transferor Percentage.......................46
Application of Collections..........................................46
Shared Excess Finance Charge Collections............................48
Shared Principal Collections........................................48
Default Allocations.................................................48
Rebates and Fraudulent Charges......................................49
Investor Charge-Offs................................................49
Defeasance..........................................................49
Optional Repurchase.................................................50
Final Payment of Principal; Series Termination......................50
Pay Out Events......................................................50
Servicing Compensation..............................................51
The Servicer........................................................51
Servicer Default....................................................51
Payment of Expenses.................................................53
Reports to Certificateholders.......................................53
Evidence as to Compliance...........................................54
Amendments..........................................................54
List of Certificateholders..........................................56
The Master Trust Trustee............................................56
Master Trust Termination............................................57
Description of the Notes............................................57
Principal and Interest on the Notes.................................57
The Indentures......................................................58
Certain Covenants...................................................62
The Indenture Trustee...............................................63
Transfer and Assignment of the Series Certificate...................64
Reports to Noteholders..............................................64
Certain Matters Regarding the Administrator.........................65
Amendment...........................................................65
Termination.........................................................66
CREDIT ENHANCEMENT....................................................66
Specific Forms of Credit Enhancement................................67
SECURITY RATINGS......................................................70
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES..............................71
Transfer of Receivables.............................................71
Certain Matters Relating to Receivership............................72
Consumer Protection Laws............................................74
Industry Litigation.................................................75
TAX MATTERS...........................................................75
Tax Characterization of the Master Trust............................77
Tax Considerations Relating to Certificate Owners...................77
Tax Considerations Relating to Note Owners .........................80
Non-U.S. Certificate Owners and Non-U.S. Note Owners................82
Information Reporting and Backup Withholding........................85
State and Local Taxation............................................86
EMPLOYEE BENEFIT PLAN CONSIDERATIONS..................................86
Certain ERISA Considerations With Respect to Notes..................87
Prohibited Transaction Considerations...............................87
Certain ERISA Considerations With Respect to Certificates...........88
Prohibited Transaction Considerations ..............................88
PLAN OF DISTRIBUTION..................................................90
LEGAL MATTERS.........................................................92
REPORTS TO SECURITYHOLDERS............................................92
WHERE YOU CAN FIND MORE INFORMATION...................................92
GLOSSARY OF TERMS FOR PROSPECTUS......................................94
OVERVIEW OF THE INFORMATION IN THIS PROSPECTUS
AND THE PROSPECTUS SUPPLEMENT
We provide information to you about the securities 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 securities, including your series, and (b) the
prospectus supplement, which will describe the specific terms of your
series of securities, including:
o the type of securities offered;
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 securities.
We have included a description of some of the basic terms and
characteristics of the securities that may be offered by this prospectus.
We have also included a description of any certificate offered by this
prospectus or 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.
If you are purchasing notes, you should review carefully the
descriptions of the certificates in this prospectus and the prospectus
supplement. The most significant asset of each owner trust will be a
certificate issued by the master trust and pledged to secure the notes of
the owner trust. The terms and provisions of that certificate will be
reflected in the terms and provisions of the notes secured by that
certificate.
Each certificate issued by the master trust and offered to investors
or 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 securities;
o sold through this prospectus and the related prospectus
supplement; 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 94 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. 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 Manhattan Bank USA, National Association, as TRANSFEROR;
o The Chase Manhattan Bank, as servicer; and
o The Bank of New York, as trustee.
The Chase Manhattan 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 certificates;
o entering into swap agreements to convert specified cash flows
from one form to another; and
o engaging in related activities.
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 the
assets listed above.
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. Chase USA 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
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 and any other
assets,
o issuing a single series of notes,
o making payments on the notes, and
o engaging in other activities that are appropriate to accomplish
those goals.
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 Chemical 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 which the Bank 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.
Chase USA is also seller and servicer, with Yasuda Bank and Trust
Company (U.S.A.) as trustee, of Chase Manhattan Credit Card Master Trust.
This master trust has issued several series of asset backed certificates
which remain outstanding. As long as any of these series remain
outstanding, the accounts designated for inclusion in Chase Manhattan
Credit Card Master Trust will not be available for addition to the master
trust. However, Chase USA is allowed, with Rating Agency approval, to
periodically remove accounts from Chase Manhattan Credit Card Master Trust
and add some or all of them to the master trust. See "Description of the
Securities --Description of the Certificates--Addition of Master Trust
Assets" and "--Removal of Master Trust Assets" for information on the
conditions to any addition or removal of accounts.
Chase USA has the right, and currently expects, to add accounts from
time to time to the master trust. 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 Chase USA 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 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 originates accounts through several channels:
o Applications. Chase USA makes applications for VISA and
MasterCard accounts available at all CMB 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 CMB'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
purchase balance outstanding; and
- there was a purchase 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 Wall Street Journal prime rate 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 the Bank 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 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 seventy-five (75) days after
receipt of such notice and the time period set forth in the previous
sentence. On February 10, 1999, the Federal Financial Institutions
Examination Council adopted a revised Uniform Retail Credit Classification
and Account Management Policy, which recommends that:
o all U.S. banks and thrift institutions should charge-off
accounts of obligors who declare bankruptcy within 60 days of
receipt of notification of filing from the bankruptcy court,
and
o these charge-offs should be implemented in reporting for the
year ending December 31, 2000.
We expect that the implementation of this revised charge-off policy would
cause a temporary increase in charge-offs, but would not materially affect
certificateholders' interests.
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. Chase USA 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 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.
YEAR 2000 COMPLIANCE
Year 2000 efforts for Chase USA, both technical and business-related,
are being coordinated, managed and monitored as part of the Year 2000
efforts of The Chase Manhattan Corporation by CMC'S Year 2000 Enterprise
Program Office. The Program Office reports directly to the Executive
Committee of CMC. In addition, a YEAR 2000 CORE TEAM, consisting of senior
managers from internal audit, technology risk and control, financial
management and control, the technology infrastructure division, legal and
the Program Office, provides independent oversight of the process. The YEAR
2000 CORE TEAM, which also reports directly to the CMC'S Executive
Committee, is charged with identifying major risks and ensuring necessary
management attention for timely resolution of project issues.
CMC also established a Year 2000 Business Risk Council on January 1,
1999 comprised of approximately 20 senior business leaders, including line
managers, risk managers, and representatives of key staff functions, whose
responsibilities are:
o to identify potential Year 2000 business risks,
o to coordinate planning and readiness efforts,
o to refine contingency plans for Year 2000, and
o to establish a Year 2000 command center structure and rapid
response teams.
CMC'S Year 2000 program is tracked against well-defined milestones.
CMC completed the inventory and assessment phases of its program in 1997,
identifying affected hardware and software, prioritizing tasks and
establishing implementation plans. The inventory and assessment phase
identified 97 business software applications (30 of which are provided by
third-party vendors) related to the cardmember services functions of Chase
USA as requiring Year 2000 remediation.
As of the date hereof, all 97 business software applications have
been remediated and all have been fully tested to be Year 2000 compliant.
In addition, CMC has conducted tests with FDR and its other third party
service providers, and with third party infrastructure organizations that
interface with Chase USA and the Trust, and expects to continue such
testing for the remainder of this year.
The major focus of CMC'S Year 2000 efforts for the balance of this
year is business risk management, contingency planning and event
preparation. Under the auspices of CMC'S Year 2000 Business Risk Council,
contingency plans have been refined and are in the process of being tested.
Approximately 250 different risk scenarios have been identified across all
geographies and CMC businesses, resulting in the development of
approximately 1,400 individual Year 2000 contingency plans. These plans
include identification of possible alternative methods by which to provide
service, alternative locations for operations, increased staff support to
service customers, as well as ways for CMC to maintain critical services in
the event of environmental infrastructure outages. In addition, CMC has
developed Year 2000 stress scenarios and has established a process of
stress testing both its credit and market-sensitive portfolios utilizing
these scenarios. These tests will continue through the remainder of 1999.
Event preparation activities also continue. Year 2000 command centers
are being created; problem tracking and reporting tools designed; key
operational and service performance measures identified for tracking;
"wellness checks" of facilities, services, and systems planned; and
training of the "rapid response teams" scheduled. Dress rehearsals have
been scheduled for three weekends during the fourth quarter of 1999 and
command centers will become operational in late December.
CMC currently estimates that full year 1999 Year 2000 costs will be
approximately $158 million. None of these costs will be borne by the master
trust or any owner trust.
CMC manages many types of risk in the normal course of its business.
It recognizes, however, that the risks presented by Year 2000 are unique
given their pervasive nature and the higher likelihood that any Year 2000
disruption may have multiple, simultaneous impacts. Because of this, CMC
has adjusted and will continue to adjust its risk management processes and
contingency plans to reflect the most probable anticipated effects. CMC
believes Year 2000 disruptions, if they occur, may manifest themselves to
financial institutions in three distinct ways:
o as liquidity problems, evidenced, for example, by a "flight to
quality" or preference for cash;
o as operational problems, which may trigger disruptions in the
financial markets; and
o as credit problems, with respect to individuals, companies or
countries experiencing potential financial losses as a result
of liquidity or operational issues.
The anticipated costs to complete the project and the anticipated
business, operational and financial risks to CMC, Chase USA and the master
trust are subject to a number of uncertainties. Any failures by the VISA or
MasterCard associations, FDR or other service providers to implement
successfully their Year 2000 remediation plans could adversely impact the
timing of collections on receivables. A large number of similar failures by
account obligors, banks and other financial institutions or other
participants in the national payments system could also adversely affect
the timing of collections on receivables. In addition, any financial losses
incurred by the obligors on the Accounts could cause an increase in losses
allocated to the master trust and the owner trusts.
If collections that normally would have been received in any
particular month are delayed, or if losses for any month exceed normal
levels, the portfolio yield for that month will be reduced to that extent.
Any such reduction would increase the likelihood of a PAY OUT EVENT
resulting from insufficient portfolio yield.
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. If Chase USA exercises the
DISCOUNT OPTION, an amount of monthly collections of principal receivables
will be considered finance charge collections. See "Description of the
Securities--Description of the Certificates--Discount Option" for a
description of the manner of and the conditions to exercise of the Discount
Option.
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 were 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, Chase USA 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.
Chase USA 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. Chase USA 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,
Chase USA is required by the terms of the POOLING AND SERVICING 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 Certificates--Addition
of Master Trust Assets" for more information on adding accounts to the
master trust.
The POOLING AND SERVICING AGREEMENT also gives Chase USA the right to
remove accounts from the designated list of master trust accounts. If Chase
USA does so, the master trust will reconvey all receivables in these
removed accounts, whether existing or to be created, to Chase USA. See
"Description of the Securities--Description of the Certificates--Removal of
Master Trust Assets" for more information on removing accounts from the
master trust.
When the master trust issues a new series of securities, Chase USA
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 Certificates--Chase
USA's Representations and Warranties" for more information on eligibility
criteria for accounts and receivables.
USE OF PROCEEDS
The net proceeds from the sale of each series of certificates will
generally be paid to Chase USA and used for general corporate purposes. 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 Chase USA and used
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.
MATURITY CONSIDERATIONS
SERIES OF CERTIFICATES
Following the REVOLVING PERIOD, each series of certificates is
expected to begin to accumulate principal or begin to distribute principal
to certificateholders. The attached supplement describes the conditions
under which an accumulation or amortization period will begin for your
class of certificates.
Principal will accumulate in a funding account if your series
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 DISTRIBUTION 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 your series features rapid
accumulation, the full amount of principal available to your series 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 certificates, 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 certificates may not make use of it.
Principal will be paid to you in increments - up to the amount
specified in the attached supplement - if your class of certificates
features controlled amortization and this period begins. Your class of
certificates might also begin to pay principal to you if the attached
supplement specifies that your class will begin rapid amortization. Rapid
amortization will begin, for all classes of your series, when a PAY OUT
EVENT occurs. During any amortization period, principal will be paid to you
only on a DISTRIBUTION DATE.
If the series described in the attached supplement features multiple
classes, different classes of your series may have differing priorities for
the accumulation or payment of principal. This means that
certificateholders 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 certificates is based upon assumptions about
payment rates on the master trust's credit card receivables, as detailed in
the attached supplement. Chase USA can give no 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 certificates might be longer than expected if principal is
collected more slowly. The attached supplement may detail that if the
principal payment rate 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 certificates.
The attached supplement will state if your series is a COMPANION
SERIES to any other outstanding series of certificates. 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 37 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.
SERIES OF NOTES
Each series of notes from an owner trust will be secured by the owner
trust's pledge of a SERIES CERTIFICATE. The considerations described above
for payment of certificates will apply to payment of notes. If a PAY OUT
EVENT occurs with respect to a SERIES CERTIFICATE, principal may be paid
earlier than scheduled on the related notes. These 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."
CHASE USA
Chase USA, a wholly-owned subsidiary of CMC, was formed in 1982 and
is headquartered in Wilmington, 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 802
Delaware Avenue, Wilmington, Delaware 19801, telephone number (302)
575-5000.
CMC is a bank holding company, the principal subsidiary of which is
The Chase Manhattan Bank, a New York State bank.
DESCRIPTION OF THE SECURITIES
The securities are in the form of the master trust certificates and
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 Certificates. Each series of certificates 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 of certificates will be issued
through the POOLING AND SERVICING AGREEMENT and a SERIES
SUPPLEMENT to the POOLING AND SERVICING AGREEMENT. If you are
purchasing certificates, the attached supplement describes any
series-specific provisions supplementing the information in
this prospectus.
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. Each series of
notes from an owner trust will be issued through an INDENTURE,
entered into by the OWNER TRUSTEE and the INDENTURE TRUSTEE. If
you are purchasing notes, the attached supplement describes any
provisions of the notes supplementing the information in this
prospectus.
Following is a summary of provisions of the securities - either
certificates or notes - which you are purchasing. This summary describes
the material provisions common to each series of securities; the attached
supplement will give you additional information specific to the securities
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 - if you are purchasing notes - the related
indenture, deposit and administration agreement and trust agreement.
Each series of securities 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 securityholders in whose names the securities were
registered on the RECORD DATES specified in the related supplement.
Generally, securities offered through this prospectus and the
attached supplement:
o will be represented by certificates or notes 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 securities in book-entry form, in which you will hold a
beneficial interest as described below under "--Book-Entry Registration,"
"global securities." The attached supplement will specify if your
securities have different
characteristics from those listed above.
The attached supplement may state that application will be made to
list your series or class of securities on the Luxembourg Stock Exchange or
another exchange.
FORM OF YOUR SECURITIES
Following is a description of the form your securities, whether
certificates or notes, will take. We also describe how your securities 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. Chase USA has not independently verified
the accuracy of this information.
DTC has informed Chase USA that its nominee will be CEDE.
Accordingly, CEDE is expected to be the holder of record of each series of
securities. This means that you, as an owner of securities, will generally
not be entitled to a DEFINITIVE SECURITY representing your interest in the
issued securities: you will own securities 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 securities, for distribution to you in accordance with DTC procedures.
All references in this document to actions by securityholders shall refer
to actions taken by DTC upon instructions from DTC Participants.
You may hold your securities through DTC in the U.S., CEDELBANK or
EUROCLEAR in Europe or in any other manner described in the attached
supplement. You may hold your securities 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 securities
certificates. 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.
DTC management is aware that some computer applications and systems
used for processing data were written using two digits rather than four to
define the applicable year, and therefore may not recognize a date using
"00" as the year 2000. This could result in the inability of these systems
to properly process transactions with dates in the year 2000 and
thereafter. DTC has developed and is implementing a program to address this
problem so that its applications and systems as the same relate to the
timely payment of distributions (including principal and interest payments)
to securityholders, book-entry deliveries and settlement of trades within
DTC continue to function properly. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally,
DTC plans to implement a testing phase of this program which is expected to
be completed within appropriate time frames.
In addition, DTC is contacting and will continue to contact
third-party vendors that provide services to DTC to determine the extent of
their Year 2000 compliance, and DTC will develop contingency plans as it
deems appropriate to address failures in Year 2000 compliance on the part
of third-party vendors. However, there can be no assurance that the systems
of third-party vendors will be timely converted and will not adversely
affect the proper functioning of DTC'S services.
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.
Chase USA makes no representations as to the accuracy or completeness of
such information.
CEDELBANK
CEDELBANK is incorporated under the laws of Luxembourg as a
professional depository. CEDELBANK holds securities for CEDELBANK CUSTOMERS
and facilitates the clearance and settlement of securities transactions
between CEDELBANK CUSTOMERS through electronic book-entry changes in
accounts of CEDELBANK CUSTOMERS, thereby eliminating the need for physical
movement of certificates. Transactions may be settled in CEDELBANK in any
of 36 currencies, including U.S. dollars. CEDELBANK provides to its
CEDELBANK CUSTOMERS, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. CEDELBANK deals with
domestic securities markets in over 30 countries through established
depository and custodial relationships. CEDELBANK has established an
electronic bridge with Morgan Guaranty Trust as EUROCLEAR OPERATOR in
Brussels to facilitate settlement of trades between CEDELBANK and
EUROCLEAR. CEDELBANK currently accepts over 110,000 securities issues on
its books. As a professional depository, CEDELBANK is subject to regulation
by the Luxembourg Commission for the Supervision of the Financial Sector,
which supervises Luxembourg banks. CEDELBANK CUSTOMERS are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and
other organizations and may include the underwriters of any series of
securities issued through this document. CEDELBANK CUSTOMERS in the U.S.
are limited to securities brokers, dealers and banks. Currently, Cedelbank
has approximately 2,000 customers located in over 80 countries, including
all major European countries, Canada and the United States. Indirect access
to CEDELBANK is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a CEDELBANK CUSTOMER, either directly or indirectly.
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
certificates 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 Morgan Guaranty Trust Company of New York's Brussels,
Belgium office, acting as 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 securities
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 is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such,
it is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York State Banking Department, as well as the
Belgian Banking 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 securities. CEDELBANK
and EUROCLEAR will hold omnibus positions on behalf of CEDELBANK CUSTOMERS
and EUROCLEAR PARTICIPANTS, respectively, through customers' securities
accounts in CEDELBANK'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 CEDELBANK 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
securities directly or indirectly through DTC, on the one hand, and
directly or indirectly through CEDELBANK 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 securities in DTC, and making or receiving payment in accordance
with normal procedures for same-day funds settlement applicable to DTC.
CEDELBANK CUSTOMERS and EUROCLEAR PARTICIPANTS may not deliver instructions
directly to the depositaries.
Because of time-zone differences, credits of securities in CEDELBANK
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 CEDELBANK CUSTOMERS or EUROCLEAR PARTICIPANTS on
such day. Cash received in CEDELBANK or EUROCLEAR as a result of sales of
securities by or through a CEDELBANK CUSTOMER or a EUROCLEAR PARTICIPANT
will be received with value on the DTC settlement date but will be
available in the relevant CEDELBANK or EUROCLEAR cash account only as of
the business day following settlement in DTC.
Your purchases of securities under the DTC system must be made by or
through DTC Participants, which will receive a credit for the securities 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 securities are accomplished by
entries made on the books of DTC Participants acting on behalf of you and
other securityholders. You will not receive securities representing your
ownership interest in the securities offered through this document, except
in the event that use of the book-entry system for these securities is
discontinued.
To facilitate subsequent transfers, all securities deposited by DTC
Participants with DTC are registered in the name of DTC'S nominee, CEDE.
The deposit of securities 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 securities; DTC'S records reflect only the identity of
the DTC Participants to whose accounts the securities are credited, which
may or may not be the actual securities 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 securityholders 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
securities. 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 securities are credited on the relevant record date.
Principal and interest payments on these securities will be made to
DTC. DTC'S practice is to credit DTC Participants' accounts on the
applicable DISTRIBUTION 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 DISTRIBUTION DATE. Payments by DTC Participants to
securityholders will be governed by standing instructions and customary
practices, as is the case with securities 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 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
Master Trust Trustee, disbursement of these payments to DTC Participants
shall be the responsibility of DTC, and disbursement of such payments to
securityholders shall be the responsibility of DTC Participants and
indirect participants.
DTC may discontinue providing its services as securities depository
for these securities at any time by giving reasonable notice to Chase USA,
the Master Trust Trustee or the INDENTURE TRUSTEE. If this occurs, in the
event that a successor securities depository is not obtained, DEFINITIVE
SECURITIES will be printed and delivered. Chase USA may decide to
discontinue use of the system of book-entry transfers through DTC or a
successor securities depository. In that event, DEFINITIVE SECURITIES will
be delivered to each securityholder. See "--Definitive Securities" for a
description of the circumstances under which Definitive Securities will be
issued.
Distributions on securities held through CEDELBANK or EUROCLEAR will
be credited to the cash accounts of CEDELBANK 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 Securities" and "Tax Matters."
CEDELBANK or the EUROCLEAR OPERATOR, as the case may be, will take any
other action permitted to be taken by a securityholder under the POOLING
AND SERVICING AGREEMENT or INDENTURE on behalf of a CEDELBANK 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, CEDELBANK and EUROCLEAR have agreed to the foregoing
procedures in order to facilitate transfers of securities 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 SECURITIES
Although the attached supplement may indicate that this series of
securities, or one or more classes of this series, may be issued in a
different form, it is expected that securities offered through this
document will be issued in book-entry form. If these securities are
initially issued in book-entry form, DEFINITIVE SECURITIES in fully
registered, certificated form will not be issued to any party other than
DTC or its nominee unless:
o Chase USA advises the Master Trust Trustee, in the case of
certificates, or the OWNER TRUSTEE for this series, in the case
of notes, in writing that DTC is no longer willing or able to
discharge properly its responsibilities as depository with
respect to this series of securities, and the Master Trust
Trustee or the OWNER TRUSTEE, as applicable, or Chase USA is
unable to locate a qualified successor;
o Chase USA, at its option, advises the Master Trust Trustee, in
the case of certificates, or the OWNER TRUSTEE for this series,
in the case of notes, in writing that it elects to terminate
the book-entry system through DTC; or
o after the occurrence of a SERVICER DEFAULT, in the case of
certificates, or an EVENT OF DEFAULT, in the case of notes,
securityholders representing not less than 50% - or such other
percentage specified in the related supplement - of the
outstanding principal amount of the certificates or the notes,
as applicable, advise the Master Trust Trustee or the OWNER
TRUSTEE, as applicable, and DTC through DTC Participants in
writing that the continuation of a book-entry system through
DTC or its successor is no longer in the best interests of the
securityholders.
If any of these events occur, DTC must notify all DTC Participants of
the availability through DTC of DEFINITIVE SECURITIES. Upon surrender by
DTC of the definitive security representing these securities and
instructions for re-registration, the Master Trust Trustee will issue the
securities as DEFINITIVE SECURITIES, and thereafter the Master Trust
Trustee, in the case of certificates, or the OWNER TRUSTEE, in the case of
notes, will recognize the holders of these DEFINITIVE SECURITIES as holders
under the POOLING AND SERVICING AGREEMENT, in the case of certificates, or
the INDENTURE, in the case of notes.
Allocations of finance charge and principal collections to
certificates which are DEFINITIVE SECURITIES will be made by the Master
Trust Trustee. Distributions of these amounts on notes which are DEFINITIVE
SECURITIES will be made, after these amounts are received through the
SERIES CERTIFICATE deposited in the owner trust, by the INDENTURE TRUSTEE.
In both cases, payments will be made directly to holders of DEFINITIVE
SECURITIES in accordance with the procedures set forth in this prospectus,
in the POOLING AND SERVICING AGREEMENT and any related indenture. Payments
on each DISTRIBUTION DATE will be made to holders in whose names the
DEFINITIVE SECURITIES were registered at the close of business on the
related RECORD DATE. If you own DEFINITIVE SECURITIES in an amount greater
than a minimum level stated in the POOLING AND SERVICING AGREEMENT or
INDENTURE, as applicable, payments of principal and interest will be sent
to you via wire transfer. If you own less than this minimum level of
DEFINITIVE SECURITIES, payments will be made by check and mailed to you at
an address maintained by the Master Trust Trustee or OWNER TRUSTEE, as
applicable.
The final payment on any security, whether a DEFINITIVE SECURITY or
the securities registered in the name of DTC or its nominee, will be made
only upon presentation and surrender of the security at the office or
agency specified in the notice of final distribution to securityholders.
The Master Trust Trustee or the INDENTURE TRUSTEE, as applicable, will
provide this notice to registered securityholders no later than the fifth
day of the month in which the final distribution will occur. If the
securities are listed on the Luxembourg Stock Exchange, payments of
principal and interest, including the final payment on any security, will
also be made at the offices of Banque Generale du Luxembourg, S.A.
DEFINITIVE SECURITIES will be transferable and exchangeable at the
offices of any of the transfer agents and registrars, which shall initially
be CMB and the Master Trust Trustee or INDENTURE TRUSTEE, as applicable. 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
SECURITIES for a period of fifteen days preceding the due date for any
payment on the DEFINITIVE SECURITIES.
INITIAL SETTLEMENT
All securities will be held in book-entry form by DTC in the name of
Cede as nominee of DTC. Investors' interests in the securities will be
represented through financial institutions acting on their behalf as direct
and indirect participants in DTC. As a result, CEDELBANK 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 securities through
DTC will be credited with their holdings against payment in same-day funds
on the settlement date.
Investors who elect to hold securities through CEDELBANK or EUROCLEAR
accounts will follow the settlement procedures that apply to conventional
eurobonds, except that there will be no temporary global security and no
"lock-up" or restricted period. Securities 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 securities 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 Cedelbank Customers and/or Euroclear Participants.
Secondary market trading between investors holding securities through
CEDELBANK 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 CEDELBANK CUSTOMERS or EUROCLEAR
PARTICIPANTS will be settled using the procedures applicable to
conventional eurobonds in same-day funds.
Trading between DTC seller and Cedelbank or Euroclear purchaser. When
securities are to be transferred from the account of a DTC PARTICIPANT to
the account of a CEDELBANK CUSTOMER or a EUROCLEAR PARTICIPANT, the
purchaser will send instructions to CEDELBANK or EUROCLEAR through a
CEDELBANK CUSTOMER or EUROCLEAR PARTICIPANT at least one business day prior
to settlement. CEDELBANK or EUROCLEAR will instruct the respective
depositary, as the case may be, to receive the securities against payment.
Payment will include interest accrued on the securities 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 securities. After settlement has been
completed, the securities will be credited to the respective clearing
system and by the clearing system, in accordance with its usual procedures,
to the CEDELBANK CUSTOMER'S or EUROCLEAR PARTICIPANT'S account. The
securities credit will appear the next day, European time, and the cash
debit will be back-valued to, and the interest on the securities 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 CEDELBANK or EUROCLEAR cash
debit will be valued instead as of the actual settlement date.
CEDELBANK 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
CEDELBANK or EUROCLEAR. Under this approach, they may take on credit
exposure to CEDELBANK or EUROCLEAR until the securities are credited to
their accounts one day later.
As an alternative, if CEDELBANK or EUROCLEAR has extended a line of
credit to them, CEDELBANK 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, CEDELBANK CUSTOMERS or EUROCLEAR
PARTICIPANTS purchasing securities would incur overdraft charges for one
day, assuming they cleared the overdraft when the securities were credited
to their accounts. However, interest on the securities would accrue from
the value date. Therefore, in many cases the investment income on the
securities earned during that one-day period may substantially reduce or
offset the amount of such overdraft charges, although this result will
depend on each CEDELBANK 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 securities to
the respective depositary for the benefit of CEDELBANK 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 Cedelbank or Euroclear seller and DTC purchaser. Due
to time zone differences in their favor, CEDELBANK CUSTOMERS and EUROCLEAR
PARTICIPANTS may employ their customary procedures for transactions in
which securities are to be transferred by the respective clearing system,
through the respective depositary, to a DTC Participant. The seller will
send instructions to CEDELBANK or EUROCLEAR through a CEDELBANK CUSTOMER or
EUROCLEAR PARTICIPANT at least one business day prior to settlement. In
these cases, CEDELBANK 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
securities 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 CEDELBANK CUSTOMER or EUROCLEAR PARTICIPANT the following day, and
receipt of the cash proceeds in the CEDELBANK 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
CEDELBANK 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 CEDELBANK CUSTOMER'S or
EUROCLEAR PARTICIPANT'S account would instead be valued as of the actual
settlement date. Finally, day traders that use CEDELBANK or EUROCLEAR and
that purchase securities from DTC PARTICIPANTS for delivery to CEDELBANK
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 CEDELBANK or EUROCLEAR for one day - until
the purchase side of the day trade is reflected in their
CEDELBANK or EUROCLEAR accounts - in accordance with the
clearing system's customary procedure;
(2) borrowing the securities in the U.S. from a DTC PARTICIPANT no
later than one day prior to settlement which would give the
securities sufficient time to be reflected in their CEDELBANK
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 CEDELBANK CUSTOMER or EUROCLEAR Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION PROCEDURES RELATING TO
GLOBAL SECURITIES
A beneficial owner of global securities holding securities through
CEDELBANK 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' securities 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 such beneficial owner takes one of the following steps to
obtain an exemption or reduced tax rate.
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of
securities that are non-U.S. PERSONS can obtain a complete exemption from
the withholding tax by filing a signed Form W-8 (Certificate of Foreign
Status). If the information shown on Form W-8 changes, a new Form W-8 must
be filed within 30 days of such change.
Exemption for non-U.S. Persons with effectively connected income
(Form 4224). A non-U.S. PERSON, including a non-U.S. corporation or bank
with a U.S. branch, for which the interest income is effectively connected
with its conduct of a trade or business in the United States, can obtain an
exemption from the withholding tax by filing Form 4224 (Exemption from
Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States).
Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001). Non-U.S. PERSONS that are securities owners residing
in a country that has a tax treaty with the United States can obtain an
exemption or reduced tax rate (depending on the treaty terms) by filing
Form 1001 (Ownership, Exemption or Reduced Rate Certificate). If the treaty
provides only for a reduced rate, withholding tax will be imposed at that
rate unless the filer alternatively files Form W-8. Form 1001 may be filed
by the securities owner or his or her agent.
Exemption for U.S. Persons (Form W-9). U.S. PERSONS can obtain a
complete exemption from the withholding tax by filing Form W-9 (Payer's
Request for Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The certificate owner of
a global security or, in the case of a Form 1001 or a Form 4224 filer, his
or her agent, files by submitting the appropriate form to the person
through whom it holds (the clearing agency, in the case of persons holding
directly on the books of the clearing agency). Form W-8 and Form 1001 are
effective for three calendar years and Form 4224 is effective for one
calendar year.
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 of any state,
o an estate the income of which is subject to United States
federal income taxation regardless of its source, or
o a trust the income of which is subject to United States federal
income taxation regardless of its source; provided, however,
that for tax years beginning after December 31, 1996 - and, if
a trustee so elects, for tax years ending after August 20, 1996
- a "U.S. PERSON" shall include any trust:
- which is subject to the supervision of a court within the
United States and the control of a United States person as
described in section 7701(a)(30) of the tax code, or
- that has a valid election in effect under applicable U.S.
treasury regulations to be treated as a United States
person.
This summary does not deal with all aspects of U.S. federal income
tax withholding that may be relevant to foreign holders of the global
securities. Investors are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of the global
securities.
DESCRIPTION OF THE CERTIFICATES
Following is a summary of the material provisions common to all
series of certificates issued through the POOLING AND SERVICING AGREEMENT,
including generally-distributed certificates and any SERIES CERTIFICATES
purchased by owner trusts and pledged to secure series of notes.
Where the term "certificateholder" is used in the following summary,
it refers also to any owner trust holding a SERIES CERTIFICATE pledged to
support notes.
The assets of the master trust are allocated among:
o certificateholders of each series;
o providers of uncertificated credit enhancement backed by
receivables; and
o the TRANSFEROR CERTIFICATe.
Each series 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 your series' INVESTOR
INTEREST 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 to the series' certificateholders) -
(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 your series includes 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 issued from the master trust.
The 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.
Certificateholders of each series will therefore receive varying amounts of
collections of principal and finance charges each month, and will also be
allocated 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 your series in
different ways: the attached supplement will describe how the various
INVESTOR PERCENTAGES are calculated. If your series includes multiple
classes of certificates, collections allocated to your series may be
further allocated among each class. See "--Investor Percentage and
Transferor Percentage" for descriptions of the allocation percentages.
As a certificateholder, your right to collections is limited to the
amounts needed to make required payments to you. Collections allocated to
your series or your class of certificates might be reallocated. The
attached supplement and the POOLING AND SERVICING AGREEMENT set forth how
collections will be allocated to, or reallocated from, your certificates.
Each series of certificates may be included in a GROUP of series.
Series in a GROUP may share excess principal collections, finance charge
collections or both among themselves. The attached supplement will state if
your series is in a GROUP and, if it is, what other series in your GROUP
were outstanding on your series' CLOSING DATE.
Each series of certificates represents interests in the master trust
only, and does not represent interests in or recourse obligations of Chase
USA, CMB or any of their affiliates. A certificate is not a deposit and
neither the certificates nor the underlying master trust accounts or
receivables are insured or guaranteed by the FDIC or any other governmental
agency.
TRANSFEROR CERTIFICATE
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 is represented by the TRANSFEROR CERTIFICATE. The holder of the
TRANSFEROR CERTIFICATE is entitled to a varying percentage of cardholder
payments from master trust receivables, called the TRANSFEROR PERCENTAGE.
Chase USA currently owns, and expects to continue owning, the
TRANSFEROR CERTIFICATE. To the extent provided in the attached supplement
and the POOLING AND SERVICING AGREEMENT, Chase USA may transfer the
TRANSFEROR CERTIFICATE in whole or in part to another party. See "--Issuing
New Series of 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 begins
to amortize or accumulate, the INVESTOR INTEREST of the series 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 as described below under "--Issuing New Series of 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 "--Chase USA'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 OF CERTIFICATES
The POOLING AND SERVICING AGREEMENT provides that Chase USA, as owner
of the TRANSFEROR CERTIFICATE, may from time to time exchange the current
TRANSFEROR CERTIFICATE for a new TRANSFEROR CERTIFICATE and the issuance of
a new series of certificates. Each exchange of this form would decrease the
TRANSFEROR INTEREST and increase the INVESTOR INTEREST. The TRANSFEROR
CERTIFICATE and an existing series of certificates may also be exchanged
for a new TRANSFEROR CERTIFICATE and a new series of certificates.
Each new series may have a maturity date, principal payment method,
interest rate calculation method or other terms different from any other
outstanding series. Each new series may also have credit enhancement
available only to that series. Under the POOLING AND SERVICING AGREEMENT,
the Master Trust Trustee holds credit enhancement only for the benefit of
the related series.
For Chase USA to exchange the TRANSFEROR CERTIFICATE for a new
series, Chase USA 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 that issuing the new series
of certificates will not cause a downgrade or withdrawal of any
outstanding rating of certificates and 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 will not have
adverse tax consequences for any outstanding series;
o deliver to the Master Trust Trustee an executed credit
enhancement contract, if required under the terms of the new
series;
o deliver an officer's certificate stating that there are enough
receivables in the master trust to support all existing series
and the new one; and
o deliver to the Master Trust Trustee the existing TRANSFEROr
CERTIFICATE and, if they are also to be exchanged, the
certificates representing an existing series.
After satisfaction of these conditions and any other conditions set forth
in the POOLING AND SERVICING AGREEMENT, the Master Trust Trustee will
cancel the existing TRANSFEROR CERTIFICATE and issue a new TRANSFEROR
CERTIFICATE and a new series of certificates.
The POOLING AND SERVICING AGREEMENT also allows the TRANSFEROR, in
addition to the exchanges or new issuances described above, to transfer its
interest in all or a portion of the TRANSFEROR CERTIFICATE, provided that
before the transfer:
o the Master Trust Trustee receives written notification from
each Rating Agency that the transfer will not result in a
lowering of its then existing rating of the certificates of any
outstanding series rated by it and
o the Master Trust Trustee receives a TAX OPINIOn.
INTEREST ALLOCATIONS
For each series of certificates and each related class, interest will
accrue from the date specified in the applicable supplement, on the
outstanding principal amount of the series or class at the applicable
certificate interest rate. Each certificate interest rate may be fixed,
floating or any other type of rate. Interest will be distributed to
certificateholders in the amounts and on the DISTRIBUTION DATES specified
in the related supplement.
Interest payments made on each DISTRIBUTION DATE to a series 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. If a series has more than one class of certificates, that series
may have more than one INTEREST
FUNDING ACCOUNT.
Your class of certificates will pay interest on the dates and at the
interest rate specified in the attached supplement. If your certificates
bear interest at a floating or variable rate, the attached supplement will
describe how that rate is calculated. For each SERIES CERTIFICATE, the
related supplement will describe how interest is calculated.
PRINCIPAL ALLOCATIONS
Each series of certificates will be scheduled to receive principal in
a single payment, or in installments beginning on the PRINCIPAL
COMMENCEMENT DATE for the series. If a series has more than one class of
certificates, a different PRINCIPAL COMMENCEMENT DATE or scheduled
principal payment date may be assigned to each class. The related
supplement will set forth when each series and class of certificates 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 in its REVOLVING PERIOD will be
available, if specified in the related supplement, to other series in a
GROUP or paid to Chase USA as holder of the TRANSFEROR CERTIFICATE.
Each series or class of certificates 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 DISTRIBUTION DATe on which the INVESTOR INTERESt for the
class or series 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 to certificateholders
of the related class or
series.
Each method involving amortization will make periodic payments of
principal allocated to the series or class to certificateholders. 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.
If your class of certificates is subordinated to more senior classes,
you will receive payments of principal only after the more senior classes
are fully repaid.
For a SERIES CERTIFICATE held by an owner trust, 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
<TABLE>
<S> <C> <C> <C> <C> <C>
Principal Controlled Rapid Controlled Rapid
Amortization Amortization Amortization Accumulation Accumulation
Begins PRINCIPAL COMMENCE- PRINCIPAL COMMENCE- On first occurrence Adjustable date, set On first occurrence
MENT DATE for series MENT DATE for series of a PAY OUT EVENT in related supplement of a RAPID
or class or class ACCUMULATION EVENT
for series or class
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 another class another class another class
Rapid accumulation Rapid accumulation Rapid accumulation Rapid accumulation
for another class for another class for another class for another class
Cannot Begin
After Rapid amortization Rapid amortization N/A Rapid amortization Rapid amortization
Ends Upon first to occur Upon first to occur Upon first to occur Upon first to occur Upon first to occur
of: of: of: of: of:
Repayment of series Repayment of series Repayment of series Repayment of series Repayment of series
or class or class SERIES TERMINATION or class or class
Beginning of rapid Beginning of rapid DATE Beginning of rapid Beginning of rapid
amortization amortization amortization amortization
SERIES TERMINATION SERIES TERMINATION Beginning of rapid SERIES TERMINATION
DATE DATE accumulation DATE
SERIES TERMINATION
DATE
Amount Paid Principal allocated CONTROLLED Principal allocated CONTROLLED DEPOSIT Principal allocated
to class or series AMORTIZATION AMOUNT to class or series AMOUNT deposited each to class or series
(no more than (no more than period, then paid to deposited each
initial INVESTOR initial INVESTOR certificateholders period (no more than
INTEREST) INTEREST) when period ends initial INVESTOR
INTEREST), then paid
to certificateholders
on scheduled payment
date
Applies to Specific class Specific class Entire series Specific class Specific class
Additional CONTROLLED PAY OUT EVENTS as CONTROLLED DEPOSIT RAPID ACCUMULATION
Information AMORTIZATION set forth in the AMOUNT as set forth EVENTS as set forth
AMOUNT as set related supplement in related in the related
forth in related supplement; subject supplement
supplement to adjustment
</TABLE>
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 TRANSFEROR, has
indicated on its 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 the Master Trust Trustee and Chase USA will file, on behalf of
the master trust, UCC financing statements meeting the requirements of
state law. Except as noted above, Chase USA will take no other steps to
identify receivables in master trust accounts.
CHASE USA'S REPRESENTATIONS AND WARRANTIES
When the master trust issues a new series of certificates, Chase USA,
as TRANSFEROR, will make several representations and warranties to the
master trust, including the following:
o as of the CLOSING DATe, Chase USA 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 Chase USA on the CLOSING DATE is
later found to be materially incorrect when made, and
o certificateholders of your series had been materially and
adversely affected for a period of at least 60 days,
o notice had been given to Chase USA and
o the condition persists beyond the date set forth in that
notice,
a PAY OUT EVENT for your series can be declared by the Master Trust
Trustee, or by certificateholders representing at least 50% of your series'
outstanding INVESTOR INTEREST.
Declaring a PAY OUT EVENT will automatically begin rapid amortization of
principal.
Chase USA will make other representations and warranties, including:
o the POOLING AND SERVICING AGREEMENt constitutes a legal, valid
and binding obligation enforceable against Chase USA; 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, Chase
USA 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 Chase USA 60
or more days to cure the breach. If, at the end of this time, the breach
has not been cured, Chase USA:
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
DISTRIBUTION 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 Chase USA is the only remedy
to any breach of these representations
and warranties.
Chase USA 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. Chase USA can give you no assurance that ELIGIBLE
ACCOUNTS will remain eligible once added to the master trust.
Chase USA 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,
Chase USA must accept reassignment of the principal amount of this
ineligible receivable. The Master Trust Trustee may allow Chase USA a
period of time to cure the ineligibility before requiring reassignment.
Chase USA will accept reassignment by directing CMB, 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,
Chase USA 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. Chase USA'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 Chase USA when your securities 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,
CMB, 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.
ADDITION OF MASTER TRUST ASSETS
Chase USA has the right to designate, from time to time, additional
accounts to be included as master trust accounts. As described above under
"The Receivables," Chase USA 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.
Chase USA 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 Chase USA must deliver an officer's certificate to the Master
Trust Trustee stating that, in Chase USA'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 Chase USA to add accounts
to the master trust automatically upon satisfaction of several conditions,
including:
o each account must be an ELIGIBLE ACCOUNt;
o Chase USA must not have designated the account as an account
not to be added;
o each new account was selected for inclusion in the master trust
through a selection process not harmful to certificateholders'
interests; and
o as of the addition date, Chase USA is not insolvent.
In addition to the PARTICIPATION addition requirements noted above,
Chase USA 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 securities and CMB, 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 Chase USA that, on the addition date, each
new account 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 Chase USA that
Chase USA is not insolvent; and
o if specified in any prospectus supplement, 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.
Chase USA 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
Chase USA has the right to remove accounts and PARTICIPATIONS from
the master trust, subject to several conditions, including an officer's
certificate from Chase USA confirming:
o that removing the accounts or PARTICIPATIONs will not cause a
PAY OUT EVENT for any outstanding series;
o that Chase USA has delivered to the Master Trust Trustee a list
of accounts or PARTICIPATIONS to be removed;
o that Chase USA 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';
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 of certificates or notes;
o that the post-removal amount of receivables in the MASTEr TRUST
PORTFOLIO will meet the minimum requirements; and
o that the removal will not result in the failure to make any
payment specified in the related supplement with respect to any
series;
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 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 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 averaged
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.
DISCOUNT OPTION
Chase USA, has the option to reclassify a percentage of PRINCIPAL
RECEIVABLES in the MASTER TRUST PORTFOLIO as FINANCE CHARGE RECEIVABLES.
This is referred to as the Discount Option. Chase USA may use the DISCOUNT
OPTION to compensate for a decline in the PORTFOLIO YIELD, but only if
there would be sufficient PRINCIPAL RECEIVABLES to allow for that
discounting. The designation of PRINCIPAL RECEIVABLES as FINANCE CHARGE
RECEIVABLES would result in a larger amount of FINANCE CHARGE RECEIVABLES
and a smaller amount of PRINCIPAL RECEIVABLES. By doing so, Chase USA would
reduce the likelihood that a PAY OUT EVENT would occur as a result of a
decreased PORTFOLIO YIELD, and at the same time will increase the
likelihood that Chase USA will have to add PRINCIPAL RECEIVABLES to the
master trust.
If the DISCOUNT PERCENTAGE is greater than zero, an amount of master
trust principal collections for each MONTHLY PERIOD equal to:
(the DISCOUNT PERCENTAGE) X (total principal collections
allocable to the master trust)
will be considered finance charge collections and allocated with regular
collections of finance charge receivables in the MASTER TRUST PORTFOLIO.
To exercise the DISCOUNT OPTION, Chase USA must satisfy the
conditions in the POOLING AND SERVICING AGREEMENT, including confirmation
from each Rating Agency that the use of the DISCOUNT OPTION will not result
in a downgrade or withdrawal of any ratings of any outstanding series of
certificates or notes. Chase USA does not intend to exercise its discount
option.
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.
CMB, 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 CMB, as the servicer;
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; or
o any other institution acceptable to all RATING AGENCIEs rating
any outstanding series.
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 at financial institutions having a rating in Moody's
and S&P's highest rating category;
o commercial paper having a rating in Moody's and S&P's highest
rating category;
o banker's acceptances from the highest-rated financial
institutions;
o some repurchase agreements; and
o any other investments which convert to cash within a finite
period, if agreed to by the RATING AGENCIES rating the related
series.
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 of 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 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 your benefit.
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 Chase USA, 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 Chase USA.
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 securities.
A COMPANION SERIES would be issued to finance the interest of Chase
USA in the TRUST PORTFOLIO. The TRANSFEROR INTEREST held by Chase USA 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. Chase USA 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. 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 of certificates, principal receivables may not be
available in the amount of the issued certificates. If this occurs, the
initial INVESTOR INTEREST will be less than the 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 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 certificate principal amount.
The INVESTOR INTEREST will increase as new receivables are conveyed to the
master trust or as the INVESTOR INTERESTS of other series are reduced. The
INVESTOR INTEREST may decrease due to charge-offs allocated to the series.
During the FUNDING PERIOD, funds on deposit in the PRE-FUNDING
ACCOUNT will be paid to Chase USA 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 certificateholders. This type of event may also cause repayment of other
amounts to certificateholders, 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 your
series is paired with a COMPANION SERIES, that the terms of the COMPANION
SERIES will have no impact on the timing or amount of payments made to
certificateholders of your series.
INVESTOR PERCENTAGE AND TRANSFEROR PERCENTAGE
From the amounts allocated to the master trust, CMB, as servicer,
will allocate finance charge collections, principal collections and
receivables in defaulted accounts to:
o each series;
o if a series has multiple classes, each class of the 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 and, if a series
has multiple classes, how allocations will be made among classes.
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, CMB, 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.
CMB must also allocate these deposits between accounts and to various
parties, as described below. However, CMB 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 CMB does not need to make daily deposits; or
o CMB 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.
CMB 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 to certificateholders or other parties. If the COLLECTION
ACCOUNT balance ever exceeds this amount for deposit or distribution, CMB
will be able to withdraw the excess.
Each time a COLLECTION ACCOUNT deposit is made, CMB 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 Chase USA 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 of 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.
If a series of certificates has more than one class, principal and
finance charge collections allocated to the series will be further
allocated and applied to each class as set forth in the related supplement.
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 Chase USA because the TRANSFEROR
INTEREST is less than the MINIMUM TRANSFEROR INTEREST will be held in the
PRINCIPAL ACCOUNT and paid to Chase USA 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.
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. The default amount allocated to each series
will, if the series has multiple classes of certificates, be further
allocated to each class.
REBATES AND FRAUDULENT CHARGES
CMB 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, Chase USA,
as TRANSFEROR, will be required to pay the deficient amount into the EXCESS
FUNDING ACCOUNT.
INVESTOR CHARGE-OFFS
Each month, principal receivables in defaulted accounts will be
allocated to each series. 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.
If your series has multiple classes, INVESTOR CHARGE-OFFS will
generally be applied to subordinate classes first. If you own a subordinate
class of certificates, your INVESTOR INTEREST could be reduced before other
classes are affected. The attached supplement describes how INVESTOR
CHARGE-OFFS are allocated to your class and any other classes.
DEFEASANCE
Some series may provide that Chase USA, as TRANSFEROR, may set aside
with the Master Trust Trustee funds adequate to make all future interest
and principal payments on a series of certificates. This will end Chase
USA's responsibilities to that series. Chase USA will not be able to do
this without an opinion of counsel that:
o this will not alter the tax treatment of the series or the
master trust; and
o this will not cause the master trust to become subject to
regulation as an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
The related supplement will set forth if and how Chase USA may
defease a series.
OPTIONAL REPURCHASE
For each series, Chase USA has the option to repurchase the remaining
INVESTOR INTEREST when the series' 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 to
certificateholders, 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, CMB or the Master Trust Trustee may be required to sell receivables
in an amount sufficient to repay the outstanding INVESTOR INTEREST.
PAY OUT EVENTS
For each series 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 series issued from the master trust if any one of the following occurs:
o Chase USA, as TRANSFEROr, is insolvent or enters receivership;
o Chase USA 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, as amended.
Each series may, in the related supplement, specify additional PAY OUT
EVENTS applicable only to that series.
If Chase USA, as TRANSFEROR, voluntarily begins liquidation or a
receiver is appointed for Chase USA, Chase USA 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 in a commercially reasonable manner. The Master Trust
Trustee will liquidate the receivables unless instructed to do otherwise by
certificateholders representing a majority of the outstanding INVESTOR
INTEREST, or by Chase USA's conservator or receiver. 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.
Rapid amortization begins immediately when any PAY OUT EVENT occurs.
If rapid amortization begins for your series before the scheduled payment
date on your certificates, you could begin receiving principal
distributions earlier than expected, which may shorten the average life of
your investment.
SERVICING COMPENSATION
CMB, 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. In
series with multiple classes of certificates, each class will be
responsible for a portion of the series' 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. CMB, currently the servicer, has
delegated some of its servicing duties to FDR 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 certificateholders 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 certificateholders; 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 certificateholders 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 certificateholders;
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 CMB 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 CMB - 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 Chase USA has the right to purchase all receivables in the
MASTER TRUST PORTFOLIO at a price approved by the Master Trust Trustee.
Chase USA'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
CMB, 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 from the master trust will
receive reports with information on the series and the master trust. CMB,
as servicer, will prepare a certificateholder report on each series'
DISTRIBUTION DATEs, setting forth information as specified in the related
supplement. If a series has multiple classes, information will be provided
for each class, 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 and to each class
of certificates;
o finance charge collections allocated to the series and to each
class of certificates;
o the aggregate amount of principal receivables in the MASTEr
TRUST PORTFOLIO;
o the series' 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 or each class of the
series, and any reimbursement of INVESTOR CHARGE-OFFS;
o the servicing fee due from the series;
o for each series or class, 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 or a class of certificates bears interest at a
floating rate, information relating to the floating rate.
CMB 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 prepare their tax returns.
EVIDENCE AS TO COMPLIANCE
The POOLING AND SERVICING AGREEMENT provides that by March 31 of each
calendar year, CMB, 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 August 31
of each year, an officer of CMB 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 Chase USA, CMB 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 to add any necessary provision not inconsistent with the
existing provisions of the operating documents.
No amendment may be made without certificateholder consent which in any
material respect would adversely affect any certificateholder's interest.
Amendment without certificateholder consent can occur only if:
o CMB, 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;
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
provides written confirmation that the amendment will not cause
a downgrade or withdrawal of any existing rating of
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 Chase USA, CMB
and the Master Trust Trustee with the consent of certificateholders
representing a majority of the INVESTOR INTEREST which is adversely
affected by an amendment. 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.
LIST OF CERTIFICATEHOLDERS
Certificateholders representing 10% of the outstanding INVESTOR
INTEREST of a series - or any other percentage as set forth in the related
supplement - may request access to the Master Trust Trustee's current list
of certificateholders for purposes of communicating with other
certificateholders about their rights under the POOLING AND SERVICING
AGREEMENT. See "--Form of Your Securities--Book-Entry Registration" and
"--Form of Your Securities--Definitive Securities."
THE MASTER TRUST TRUSTEE
Each series' prospectus supplement will identify the Master Trust
Trustee under the POOLING AND SERVICING AGREEMENT. Chase USA, CMB 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,
Chase USA will be obligated to appoint a successor Master Trust Trustee.
Chase USA 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.
CMB and Chase USA 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 the 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, DEPOSIT AND
ADMINISTRATION AGREEMENT and the 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.
Chase USA will own the residual equity interest in each owner trust.
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 Chase
USA.
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
DISTRIBUTION 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 or when Chase USA 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 relating to the notes.
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, as amended;
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 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 Chase USA 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 Chase USA 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 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.
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, as amended, 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, Chase USA 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 Chase
USA, 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 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 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.
AMENDMENT
The parties to each of the SERIES CERTIFICATE, the DEPOSIT AND
ADMINISTRATION AGREEMENT and the TRUST AGREEMENT may amend those
agreements, with the written consent of the INDENTURE TRUSTEE, but without
the consent of the noteholders, to add provisions to or change in any
manner or eliminate provisions of that TRANSACTION AGREEMENT or to modify
in any manner the rights of the noteholders; provided, however, that an
amendment will not:
o as evidenced by an officer's certificate from Chase USA
addressed and delivered to the INDENTURE TRUSTEE and the OWNER
TRUSTEE, materially and adversely affect the interest of any
noteholder, 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, each of the SERIES CERTIFICATE, the DEPOSIT AND ADMINISTRATION
AGREEMENT and the TRUST AGREEMENT may be amended by its parties:
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 of the provisions of a TRANSACTION AGREEMENT or of
modifying in any manner the rights of noteholders; provided, however, that
the action will not, 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. Additionally,
without the consent of the holders of all of the notes, an amendment shall
not:
o reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments in respect of the SERIES
Certificate or payments that are required to be made for the
benefit of the noteholders or
o reduce the percentage of the outstanding principal amount of
the notes which is required to consent to any amendment.
TERMINATION
The obligations of the ADMINISTRATOR, Chase USA, 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 securities, 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 securities or any class of your
series:
SUBORDINATION
One or more classes of securities of any series may be subordinated
as described in the related supplement to the extent necessary to fund
payments with respect to senior securities. The rights of the holders of
any subordinated securities to receive distributions of principal and/or
interest on any DISTRIBUTION DATE for that series will be subordinated in
right and priority to the rights of the holders of senior securities, 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 securities 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 securities
will be distributed to holders of senior securities.
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 securities. 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 securities 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 or one or more classes of
certificates. That series 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
certificates 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 securities 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 securities, 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 securities 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 securities. 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 securities,
including subordinated securities;
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.
SECURITY RATINGS
Any rating of the securities by a Rating Agency will indicate:
o its view on the likelihood that securityholders will receive
required interest and principal payments; and
o its evaluation of the receivables and the availability of any
Credit Enhancement for the securities.
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. securityholders;
o the marketability of the securities;
o the market price of the securities; or
o whether the securities are an appropriate investment for you.
A rating will not be a recommendation to buy, sell or hold the
securities. A rating may be lowered or withdrawn at any time by a Rating
Agency.
The TRANSFEROR will request a rating of the securities offered by
this prospectus and the prospectus supplement from at least one Rating
Agency. It will be a condition to the issuance of the securities of each
series or class offered by this prospectus and the related supplement
including each series that includes a PRE-FUNDING ACCOUNT, and, with
respect to any series of notes, 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 securities of each series or 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 securities and that
rating could be lower than any rating assigned by a Rating Agency chosen by
the TRANSFEROR.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
The transfer of receivables to the master trust constitutes either a
complete transfer of Chase USA's interest in the receivables or a grant of
a security interest in the receivables. If Chase USA's transfer creates a
security interest then it constitutes a perfected security interest under
applicable law.
The master trust will have a first priority claim on the receivables
subject only to some tax and other governmental liens, which are discussed
below.
The master trust will have a claim against Chase USA if the master
trust does not have an unencumbered claim to the receivables. See
"Description of the Securities--Description of the Certificates--Chase
USA's Representations and Warranties."
Chase USA will make all necessary filings under the UCC to perfect
the master trust's security interest in the receivables.
Notwithstanding the actions described above to protect the master
trust's interest in the receivables, there may be some circumstances in
which a creditor of Chase USA could acquire an interest in receivables that
would have priority over the master trust. Chase USA represents and
warrants that no such prior interests will exist. Chase USA also covenants
not to further encumber or sell the receivables.
In addition, a tax or other government lien on Chase USA's property
that arises before the transfer of the receivables to the master trust may
have a prior claim to the receivables. If the FDIC were appointed as Chase
USA's receiver, administrative expenses of the receiver may also have
priority over the interest of the master trust in the receivables.
While Chase USA's affiliate The Chase Manhattan 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 DISTRIBUTION
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 RECEIVERSHIP
Chase USA is chartered as a national banking corporation and is
subject to regulation and supervision by the Comptroller of the Currency.
If Chase USA becomes insolvent or is in an unsound condition or if other
similar circumstances occur, the Comptroller is authorized to appoint the
FDIC as receiver.
As receiver, the FDIC has the power to repudiate or disaffirm the
obligations of the TRANSFEROR under the POOLING AND SERVICING AGREEMENT.
Upon repudiation or disaffirmation of those obligations, the FDIC, as
receiver, will be obligated to compensate you for the master trust's
interest in the receivables if each of the following conditions is
satisfied:
o the TRANSFEROR granted a security interest in the receivables
to the Master Trust;
o the interest was validly perfected before the TRANSFEROR's
insolvency;
o the interest was not taken or granted in contemplation of the
TRANSFEROR'S insolvency or with the intent to hinder, delay or
defraud the TRANSFEROR or its creditors;
o the POOLING AND SERVICING AGREEMENT is continuously a record of
the TRANSFEROR; and
o the POOLING AND SERVICING AGREEMENT represents a bona fide and
arm's-length transaction undertaken for adequate consideration
in the ordinary course of business and that the Master Trust
Trustee, as the secured party, is not an insider or affiliate
of the TRANSFEROR.
The FDIC has the right to require that you establish your right to
compensation by submitting to and completing the administrative claims
procedure established under the law applicable to bank insolvencies. This
could result in delays in payments of the certificates or the notes and
possible losses to you.
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 not a 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 you if a receiver or a conservator is appointed
for it. 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.
The proceeds from the sale of the receivables will be treated as
collections and will be distributed to certificateholders. The FDIC may
delay this procedure as described above.
If the only PAY OUT EVENT to occur is either Chase USA's insolvency
or 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 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
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 Certificates--Rebates and Fraudulent
Charges" and "--Investor Charge-Offs."
INDUSTRY LITIGATION
In October 1998, the federal government filed an antitrust lawsuit
against VISA U.S.A., Inc., VISA International Inc. and MasterCard
International Incorporated alleging that these credit card associations
restrain competition and limit consumer choice. The government in this
lawsuit challenges, among other things:
o the control of VISA U.S.A., Inc., VISA International Inc. and
MasterCard International Incorporated by the same set of banks,
o the ability of banks to issue both VISA and MasterCard cards as
well as
o the rules adopted by these associations prohibiting members
from offering credit cards of some competitors.
In public statements, VISA U.S.A., Inc., VISA International Inc. and
MasterCard International Incorporated have contested the government's
allegations. Chase USA is unable to predict the effect of this lawsuit on
Chase USA's credit card business. An adverse decision against VISA U.S.A.,
Inc., VISA International Inc. and MasterCard International Incorporated, or
an adverse settlement of this litigation, could result in changes in the
current associations and the Bank's ability to issue both VISA and
MasterCard cards as well as cards of other competitors.
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 certificate or note. Unless otherwise indicated, this summary deals
only with U.S. CERTIFICATE OWNERS and U.S. NOTE OWNERS, as defined below,
who acquire their certificates or notes at their original issue price in
the original issuance of those certificates or notes and who hold these
securities as capital assets.
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 certificate owner or note owner in light of
that certificate owner or note owner's circumstances, nor does it discuss
the U.S. federal income tax consequences that may be relevant to some types
of certificate owners or 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 life insurance companies;
o persons holding certificates or 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 alternative
minimum tax consequences, if any, of the investment in the certificates or
notes, or the state, local or foreign tax consequences of the investment.
Each prospective certificate owner or 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 certificate or 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 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 terms U.S. CERTIFICATE OWNER and
U.S. NOTE OWNER mean a beneficial owner of a certificate (other than a
SERIES CERTIFICATE) or note, respectively, 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 United States
federal income taxation regardless of its source; or
o a trust that is subject to the supervision of a court within
the United States and the control of a United States person as
described in section 7701(a)(30) of the tax code or that 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 terms NON-U.S. CERTIFICATE OWNER and
NON-U.S. NOTE OWNER mean a beneficial owner of a certificate (other than a
SERIES CERTIFICATE) or a note, respectively, who is not a U.S. CERTIFICATE
OWNER or U.S. NOTE OWNER.
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. See "--Tax Considerations Relating
to Certificate Owners--Possible Alternative Characterizations" below.
TAX CONSIDERATIONS RELATING TO CERTIFICATE OWNERS
Tax Characterization of the Certificates as Debt
The TRANSFEROR will express in the POOLING AND SERVICING Agreement
its intent that the certificates (other than a SERIES CERTIFICATE) will be
treated as debt for all U.S. tax purposes. The TRANSFEROR, by entering into
the POOLING AND SERVICING AGREEMENT, and each certificate owner, by the
acceptance of a beneficial interest in a certificate, will agree to treat
the certificates (other than a SERIES CERTIFICATE) as debt for U.S. tax
purposes. However, the POOLING AND SERVICING AGREEMENT generally refers to
the transfer of receivables as a "transfer, assignment and conveyance," and
the TRANSFEROR will treat the POOLING AND SERVICING AGREEMENT, for some
non-tax accounting purposes, as causing a transfer of an ownership interest
in the receivables and not as creating a debt obligation.
For U.S. federal income tax purposes, the economic substance of a
transaction often determines its tax consequences. The form of a
transaction, while a relevant factor, is generally not conclusive evidence
of the economic substance of the transaction. In appropriate circumstances,
the courts have allowed the IRS, as well as taxpayers, in more limited
circumstances, to treat a transaction in accordance with its economic
substance, as determined under U.S. federal income tax law, even though the
participants in the transaction have characterized it differently for
non-tax purposes. However, in a 1967 case, the courts substantially limited
the circumstances in which a taxpayer for tax purposes could ignore the
form of a transaction. Nevertheless, tax counsel has advised that, in a
properly presented case, this would not prevent a determination of the tax
characterization of the certificates based on the economic substance of the
transaction.
President Clinton's Fiscal 2000 Budget Proposal includes a
legislative proposal that would codify the 1967 rule if tax indifferent
parties are involved. The proposal would only apply to transactions entered
into on or after the date of first committee action. As currently drafted,
it is unclear whether the proposal would apply to securities such as the
certificates. It is impossible to predict whether the proposed legislation
will be enacted and, if so, in what form. Prospective investors should
consult their own tax advisors regarding the proposed legislation.
The determination of whether the economic substance of a purported
sale of an interest in property is, instead, a loan secured by such
transferred property has been made by the IRS and the courts on the basis
of numerous factors designed to determine whether the seller has
relinquished and the purchaser has obtained substantial incidents of
ownership in the transferred property. Among those factors, the primary
factors examined are whether the purchaser has the opportunity for gain if
the property increases in value and has the risk of loss if the property
decreases in value. 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 certificates (other than a SERIES CERTIFICATE) will be
properly characterized as indebtedness for U.S. federal income tax
purposes. Except where indicated to the contrary, the discussion below
assumes that the certificates (other than a SERIES CERTIFICATE) will be
considered debt for U.S. federal income tax purposes.
Taxation of Interest Income on the Certificates
General. The TRANSFEROR intends to take the position that a U.S.
CERTIFICATE OWNER generally will include the stated interest on a
certificate in gross income at the time such interest income is received or
accrued in accordance with that U.S. CERTIFICATE OWNER'S regular method of
tax accounting. This conclusion is based on the TRANSFEROR'S position that
the stated interest on a certificate is unconditionally payable.
Under the applicable Treasury regulations, the stated interest on the
certificates will be considered unconditionally payable only if the terms
and conditions of the certificates make the likelihood of late payment or
non-payment of the stated interest a remote contingency. Since the master
trust and the Master Trust Trustee will have no discretion to withhold,
delay or otherwise defer scheduled monthly payments of stated interest on
the certificates, provided the master trust has sufficient cash on hand to
allow the Master Trust Trustee to make those interest payments, the
TRANSFEROR believes that the late payment or non-payment of stated interest
on the certificates is a remote contingency.
If, however, the stated interest on the certificates is not
considered unconditionally payable, the stated interest on the certificates
will be considered original issue discount, and a U.S. CERTIFICATE OWNER
will be required to include such stated interest in income, as original
issue discount, on a daily economic accrual basis regardless of that
person's regular method of tax accounting and in advance of receipt of the
cash related to such income. In addition, if the stated interest on the
certificates is not paid in full on a DISTRIBUTION Date, the certificates
may at such time, and at all later times, be considered to be issued with
original issue discount and all U.S. CERTIFICATE OWNERS would be required
to include that stated interest in income as original issue discount on an
economic accrual basis.
Original Issue Discount Obligations. Assuming that the stated
interest on the certificates is considered to be "unconditionally payable",
a series of certificates will not be considered to have been issued with
original issue discount unless (i) a substantial amount of such series of
certificates is sold, pursuant to the original issuance of such
certificates, to investors at a price that is less than the stated
principal amount of such certificates and (ii) the amount of such discount
exceeds a statutory de minimus amount of original issue discount. In this
case, the amount of such discount will be considered original issue
discount.
A U.S. CERTIFICATE OWNER must include the amount of such original
issue discount in income on a daily economic accrual basis regardless of
such U.S. CERTIFICATE OWNER'S method of accounting and in advance of the
receipt of the cash related to such income. A U.S. CERTIFICATE OWNER will
not be required to include in income separately any payments received on
the certificates in respect of such original issue discount. If any series
of certificates is issued with original issue discount it will be disclosed
in the relevant prospectus supplement.
Sale, Exchange or Retirement of Certificates
Upon a sale or other taxable exchange, retirement or disposition of a
certificate, a U.S. CERTIFICATE OWNER will recognize gain or loss equal to
the difference between:
o the amount realized on that sale, exchange, retirement or other
disposition, less an amount equal to any accrued but unpaid
interest that the U.S. CERTIFICATE OWNER has not included in
gross income previously, which will be taxable as such, and
o the U.S. CERTIFICATE OWNER's adjusted tax basis in such
certificate.
This gain or loss generally will be capital gain or loss and generally will
be considered long-term capital gain or loss if the U.S. CERTIFICATE OWNER
held the certificate for more than one year at the time of the 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 certificates (other than a SERIES CERTIFICATE) will be properly
characterized as debt for U.S. federal income tax purposes, this opinion is
not binding on the IRS and, consequently, no assurance can be given that
this characterization will prevail. If the IRS were to contend successfully
that some or all of the certificates or any COLLATERAL INTEREST were not
debt obligations for U.S. federal income tax purposes, all or a portion of
the master trust could be classified as a partnership or as a publicly
traded partnership taxable as a corporation for those purposes. No attempt
will be made to comply with any IRS reporting or other requirements that
would apply if all or a portion of the master trust were treated as a
partnership or as a corporation because in the opinion of tax counsel the
certificates (other than a SERIES CERTIFICATE) will be characterized as
debt for U.S. federal income tax purposes and any beneficial owner of an
interest in a COLLATERAL INTEREST will agree to treat that interest as
debt.
If the master trust were treated in whole or in part as a
partnership, other than a publicly traded partnership taxable as a
corporation, for U.S. federal income tax purposes, such partnership would
not itself 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, or the
beneficial owner of the TRANSFEROR CERTIFICATE, and any certificate owners
treated as partners in the partnership in accordance with their respective
partnership interests. The amount and timing of income reportable by any
certificate owners treated as partners in the partnership would likely
differ from that reportable by those certificate 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 the 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,
in these circumstances, a certificate owner subject to these limitations
may be taxed on a greater amount of income than the interest payable on
that certificate owner's certificates. In addition, all or a portion of the
partnership's taxable income that is allocable to a certificate owner that
is a pension, profit sharing or employee benefit plan or other tax-exempt
entity, including an individual retirement account, may, under some
circumstances, constitute unrelated business taxable income, which
generally would be taxable to that certificate owner under the tax code.
Alternatively, 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 applicable marginal corporate income tax rates applicable to that
income. This entity-level tax could result in reduced distributions to
certificate owners. In addition, the distributions from the master trust
would not be deductible in computing the taxable income of the deemed
corporation, except to the extent that any certificates were treated as
debt of the corporation, and distributions to the related certificate
owners were treated as payments of interest on the certificates. Moreover,
distributions to certificate 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.
TAX CONSIDERATIONS RELATING TO NOTE OWNERS
Tax Characterization of the Owner Trusts
Tax counsel is of the opinion that no owner trust 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--Alternative Characterizations Relating to the Notes"
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. A series of notes will not be
considered to have been issued with original issue discount unless (i) 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 and (ii) the amount of such
discount exceeds a statutory de minimus amount of original issue discount.
In this case, the amount of such discount will be considered original issue
discount.
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 such, 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
Alternative Characterizations Relating to the Notes. 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, under some circumstances, 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.
Alternative Characterizations Relating to the Master Trust. 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. See "--Tax Considerations Relating
to Certificate Owners--Possible Alternative Characterizations" above. This
entity-level tax could result in reduced distributions to an owner trust
and, therefore, to note owners.
NON-U.S. CERTIFICATE OWNERS AND NON-U.S. NOTE OWNERS
Assuming that all of the certificates and notes issued to NON-U.S.
CERTIFICATE OWNERS and NON-U.S. NOTE OWNERS are considered debt of the
TRANSFEROR 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 certificate or note owned by a NON-U.S.
CERTIFICATE OWNER or 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 certificate or 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 certificate or note beneficially owned by an individual who at
the time of his or her death is a NON-U.S. CERTIFICATE OWNER or 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 certificate or 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 certificate owner or the note owner or a financial institution
holding the certificate or 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 certificate owner or note
owner is not a U.S. CERTIFICATE OWNER or U.S. NOTE OWNER. Currently, these
requirements will be met if:
o the certificate owner or note owner provides its name and
address, and certifies, under penalties of perjury, that it is
not a U.S. CERTIFICATE OWNER or U.S. NOTE OWNER, which
certification may be made on an IRS Form W-8 or successor form,
or
o a financial institution holding the certificate or note on
behalf of a certificate owner or note owner certifies, under
penalties of perjury, that the statement has been received by
it and furnishes any withholding agent with a copy.
Under recently finalized Treasury regulations, the statement requirement
also may be satisfied with other documentary evidence for interest paid
after December 31, 2000 to an offshore account or through some foreign
intermediaries.
If a NON-U.S. CERTIFICATE OWNER or 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 1001, 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 4224, or successor form, stating that the interest
paid on the certificate or note is not subject to that
withholding tax because it is effectively connected with the
certificate owner's or note owner's conduct of a trade or
business in the United States.
Under recently finalized Treasury regulations, NON-U.S. CERTIFICATE OWNERS
and NON-U.S. NOTE OWNERS generally will be required to provide an IRS Form
W-8 in lieu of an IRS Form 1001 and IRS Form 4224, although alternative
documentation may be applicable in some situations.
The NON-U.S. CERTIFICATE OWNER or NON-U.S. NOTE OWNER, although
exempt from the U.S. withholding tax discussed above, 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. CERTIFICATE OWNER or U.S. NOTE OWNER if it is
engaged in a trade or business in the United States and the interest on its
certificates or notes is effectively connected with the conduct of that
trade or business. In addition, if that NON-U.S. CERTIFICATE OWNER or
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. For this purpose, the interest income will be included in such
foreign corporation's earnings and profits.
Any gain realized by a NON-U.S. CERTIFICATE OWNER or NON-U.S. NOTE
OWNER upon the sale, exchange, retirement or other disposition of a
certificate or note generally will not be subject to U.S. federal income or
withholding tax unless:
o the gain is effectively connected with a U.S. trade or business
of the NON-U.S. CERTIFICATE OWNER or NON-U.S. NOTE OWNER in the
United States,
o for a NON-U.S. CERTIFICATE OWNEr or 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 other conditions are met,
or
o to the extent the gain is considered accrued but unpaid
interest, the requirements described above are not satisfied.
If the certificates or 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. CERTIFICATE
OWNER or 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. CERTIFICATE
OWNER or 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. CERTIFICATE OWNER or 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, some withholding
obligations may apply with respect to partnership income that is allocable
to a NON-U.S. CERTIFICATE OWNER or 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. CERTIFICATE OWNER or NON-U.S. NOTE OWNER. Alternatively, if
some or all of the certificates or 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. CERTIFICATE OWNER or
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 "--Tax Considerations Relating to Certificate
Owners--Possible Alternative Characterizations" and "--Tax Considerations
Relating to Note Owners--Possible Alternative Characterizations" above.
Special rules may apply for NON-U.S. CERTIFICATE OWNERS or 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 certificates or notes.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements will apply to some
payments of principal and interest paid on certificates or notes and to the
proceeds of the sale of a certificate or note made by U.S. CERTIFICATE
OWNERS or U.S. NOTE OWNERS other than some exempt recipients, such as
corporations. A 31% backup withholding tax will apply to those payments if
the U.S. CERTIFICATE OWNER or 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. CERTIFICATE OWNER or NON-U.S. NOTE OWNER if the statement
described above under "--Non-U.S. Certificate Owners and Non-U.S. Note
Owners" has been received and the payor does not have knowledge that the
NON-U.S. CERTIFICATE OWNER or NON-U.S. NOTE OWNER is actually a U.S.
CERTIFICATE OWNER or U.S. NOTE OWNER.
In addition, backup withholding and information reporting will not
apply if payments of principal and interest on a certificate or note are
paid or collected by a foreign office of a custodian, nominee or other
foreign agent on behalf of a certificate owner or note owner or if a
foreign office of a broker, as defined in applicable Treasury regulations,
pays the proceeds of the sale of a certificate or note to the owner of that
security. 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 for taxable years beginning after December 31, 2000, a foreign
partnership in which one or more United States persons, in the
aggregate, own 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 certificate owner or
note owner is not a United States person and other conditions
are met, or
o the certificate owner or note owner otherwise establishes an
exemption.
Payments of principal and interest on a certificate or note paid to
the certificate owner or 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 certificate or note, will be subject
to both backup withholding and information reporting unless:
o the relevant certificate owner or note owner provides the
statement referred to above under "--Non-U.S. Certificate
Owners and Non-U.S. Note Owners", and
o the payor does not have actual knowledge that the certificate
owner or note owner is actually a U.S. CERTIFICATE OWNER or
U.S. NOTE OWNER or the certificate owner or 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 certificate owner's or 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 certificate or 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 certificate or note.
EMPLOYEE BENEFIT PLAN CONSIDERATIONS
ERISA and the tax code impose requirements on PLANS and on the PLANS'
fiduciaries. In accordance with ERISA's general fiduciary standards, before
investing in securities, 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 a 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. Thus, a PLAN fiduciary
considering an investment in the securities should also consider whether
the investment might constitute a prohibited transaction under ERISA or the
tax code.
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 a PLAN acquires an "equity
interest" in an entity such as the owner trust, the 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--Tax Considerations Relating to Note Owners" 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.
ACQUISITION OF NOTES
If a 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 the 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.
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 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 STATE LAW OF
THE ACQUISITION AND HOLDING OF THE NOTES.
CERTAIN ERISA CONSIDERATIONS WITH RESPECT TO CERTIFICATES
PROHIBITED TRANSACTION CONSIDERATIONS
TREATMENT OF MASTER TRUST ASSETS AS PLAN ASSETS
Some transactions involving the operation of the master trust might
constitute prohibited transactions under ERISA and the tax code, if assets
of the master trust were deemed to be assets of an investing PLAN. As noted
above, the ERISA regulation concerns whether or not a PLAN'S assets would
include an interest in the underlying assets of an entity (such as the
master trust) for purposes of the reporting and disclosure and fiduciary
responsibility provisions of ERISA. If assets of the master trust were
deemed to be assets of an investing Plan, any person who has discretionary
authority or control with respect to master trust assets will be a
fiduciary of the investing PLAN. This fiduciary status would increase the
scope of activities which could be considered prohibited transactions under
ERISA and the tax code. Accordingly, if PLANS invest in the master trust,
the master trust could be deemed to hold PLAN assets unless one of the
exceptions contained in the ERISA regulation applies.
EXCEPTION FOR INSIGNIFICANT PARTICIPATION BY BENEFIT PLAN
INVESTORS
The ERISA regulation provides that the assets of an entity such as
the master trust will not be deemed to be PLAN assets if equity
participation in the entity by "benefit plan investors" is not
"significant." Examples of benefit plan investors include employee welfare
benefit plans, some trusts or employee pension benefit plans and individual
retirement accounts. Equity participation in an entity by benefit plan
investors is not "significant" on any date if, immediately after the most
recent acquisition of any equity interests in the entity, less than 25% of
the value of each class of equity interests in the entity is held by
benefit plan investors. This less than 25% interest excludes the value of
any equity interests held by the TRANSFEROR, the Master Trust Trustee or
its affiliates. No monitoring or other measures will be taken to ensure
that the exception applies with respect to the master trust. No assurance
can be given as to whether the value of any class of equity interests in
the master trust held by benefit plan investors will be less than 25%, or
whether the value will remain below 25%.
EXCEPTION FOR PUBLICLY TRADED SECURITIES
The ERISA regulation contains an exception which provides that if a
PLAN acquires a "publicly-offered security," the issuer of the security is
not deemed to hold PLAN assets solely by reason of such acquisition. A
publicly-offered security is a security that is:
o freely transferable;
o part of a class of securities that is owned by 100 or more
investors independent of the issuer and of one another; and
o either
- part of a class of securities registered under the
Securities Exchange Act of 1934; or
- sold to the PLAN as part of an offering of securities to
the public under the Securities Act of 1933 and the class
of securities of which this security is a part is
registered under the Securities Exchange Act of 1934
within 120 days, or such later time as may be allowed by
the SEC, after the end of the fiscal year of the issuer
during which the offering of these securities to the
public occurred.
Although it is anticipated that the conditions of this exception may
be met with respect to some classes of the certificates, no assurance can
be given and no monitoring will be done.
Fiduciaries and other persons contemplating purchasing the
certificates on behalf of or with the assets of any PLAN should consult
their own counsel concerning the consequences to the PLAN of an investment
in the certificates, including the consequences to the PLAN if the assets
of the master trust were to become subject to the fiduciary and prohibited
transactions rules of ERISA and the tax code.
ADDITIONAL CONSIDERATIONS FOR INSURANCE COMPANY GENERAL ACCOUNTS
In particular, insurance companies considering the purchase of
certificates of any series should consult their own employee benefits
counsel or other appropriate counsel with respect to the U.S. Supreme
Court's 1993 decision in which it was held that, under some circumstances,
assets held in an insurance company's general account may be deemed to be
assets of PLANS that were issued policies supported by the general account.
In addition, insurance companies may wish to consult with their own counsel
regarding the Small Business Job Protection Act of 1996, which added a new
section of ERISA relating to the status of the assets of insurance company
general accounts under ERISA and a section of the tax code. This new
section provides that assets underlying general account policies issued
before December 31, 1998 will not be considered assets of a PLAN to the
extent criteria set forth in DOL regulations are satisfied. This section
also requires the DOL to issue regulations establishing those criteria. On
December 22, 1997, the DOL published proposed regulations, called the
general account regulations, for this purpose. The general account
regulations provide that when a PLAN acquires a transition policy issued by
an insurance company on or before December 31, 1998, which is supported by
assets of the insurance company's general account, the PLAN'S assets will
include the policy but not the underlying assets of the general account to
the extent the requirements set forth in the general account regulations
are satisfied. The general account regulations also require an independent
fiduciary who has the authority to manage the PLAN'S assets to expressly
authorize the acquisition of that transition policy. If adopted as
proposed, the general account regulations would not apply to any general
account policies issued after December 31, 1998. Accordingly, investors
should analyze whether the U.S. Supreme Court case, the relevant ERISA
section and the general account regulations may have an impact with respect
to their purchase of the certificates of any series.
In light of the foregoing, by acceptance of a certificate, each
holder will be deemed to have represented and warranted that either:
o the holder is not acquiring, or considered to be acquiring, the
certificate with the assets of a PLAN; or
o no non-exempt prohibited transaction will occur as a result of
such acquisition and holding of the certificates.
PLAN OF DISTRIBUTION
The TRANSFEROR may sell the securities 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 securities, including, without
limitation, the names of any underwriters, the purchase price of the
offered securities and the resulting proceeds to Chase USA, 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 securities will purchase the
securities for their own account. The underwriters may sell any securities
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 securities.
If Chase USA sells any securities to dealers as principals, those
dealers may re-sell those securities to the public at varying prices set by
those dealers from time to time.
Chase USA also may sell securities through agents on a best-efforts
basis at varying prices.
Each underwriting agreement will provide that Chase USA, as
TRANSFEROR of the receivables, will indemnify the underwriters of the
offered securities 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 securities so long as the stabilizing bids do not
exceed a specified maximum;
o Syndicate covering transactions, which involve purchases of the
offered securities 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
securities 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
securities 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
Chase Securities Inc., a wholly owned subsidiary of The Chase Manhattan
Corporation and an affiliate of Chase USA, in connection with offers and
sales related to market-making transactions in the offered securities.
Chase 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 securities will
be passed upon for the TRANSFEROR by Simpson Thacher & Bartlett, New York,
New York. Certain legal matters relating to the issuance of the securities
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
The Chase Manhattan Bank and The Chase Manhattan Corporation and owns _____
shares of CMC'S common stock, with the associated rights attached thereto,
________ units of CMC'S common stock equivalents which entitle the holder
upon termination of service as a member of CMC'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 CMC's common stock and __________ units of CMC'S common
stock equivalents which entitle the holder upon termination of service as a
member of CMC'S Board of Directors to receive an equal number of shares of
CMC'S common stock.
REPORTS TO SECURITYHOLDERS
Unless and until DEFINITIVE SECURITIES 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 securities. See "Description of the
Securities--Form of Your Securities--Book-Entry Registration,"
"--Description of the Certificates--Reports to Certificateholders" 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 CMB to the securities 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 securities 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 securities.
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, 802 Delaware
Avenue, Wilmington, Delaware 19801, (302) 575-5000.
GLOSSARY OF TERMS FOR PROSPECTUS
"ACCOUNT" means each MasterCard and VISA credit card account
established under a credit card agreement between Chase USA 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 to
certificateholders.
"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.
"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.
"CEDELBANK" means Cedelbank, societe anonyme, an institution
administering a book-entry settlement system for trading of securities in
Europe.
"CEDELBANK CUSTOMERS" means organizations participating in
Cedelbank's book-entry system.
"CHASE USA" means Chase Manhattan Bank USA, National Association.
"CLOSING DATE" means the date of issuance of a series.
"CMC" means The Chase Manhattan Corporation.
"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
and has an Investor Interest that increases as the Investor
Interest of the previously issued series 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 Distribution 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 certificateholders on each
Distribution 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 certificateholders 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 Distribution Date.
"COOPERATIVE" means the Euro-clear 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 securities. 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.
"DEFINITIVE SECURITIES" means securities in fully registered,
certificated form.
"DEPOSIT AND ADMINISTRATION AGREEMENT" means an agreement between the
Bank 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.
"DISCOUNT OPTION" means the Transferor's option to designate a
percentage - the Discount Percentage - of receivables in the master trust
that would otherwise be Principal Receivables, to be treated as Finance
Charge Receivables.
"DISCOUNT OPTION RECEIVABLES" means those receivables that otherwise
would have been treated as Principal Receivables that are to be treated as
Finance Charge Receivables at the option of Chase USA.
"DISCOUNT PERCENTAGE" means a specified fixed or variable
percentage as specified in the related supplement.
"DISTRIBUTION ACCOUNT" means an Eligible Deposit Account from which
distributions are made to certificateholders.
"DISTRIBUTION DATE" means each date specified in the related
supplement on which distributions of interest or principal are to be made
to certificateholders.
"DOL" means the U.S. Department of Labor.
"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 the Transferor:
o which was in existence and maintained with the Transferor;
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 Transferor as counterfeit,
deleted, fraudulent, stolen or lost;
o which has either been originated by the Transferor or acquired
by the Transferor from other institutions; and
o which has not been charged off by the Transferor 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.
"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
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 Transferor, and under
the terms of a credit card agreement which complies in all
material respects with all requirements of law applicable to
the Transferor;
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 Transferor in connection with
the creation of a receivable or the execution, delivery,
creation and performance by the Transferor 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" or "general intangible" 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.
"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.
"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 certificates of the related series and an amount
is held in a Pre-Funding Account for the benefit of the
certificateholders.
"GROUP" means each series specified in the related supplement to
be included in any group.
"INDENTURE" means an agreement between 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 aggregate 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 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.
"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 Distribution Date occurs for that series.
"NON-U.S. CERTIFICATE OWNER" means a beneficial owner of a
certificate other than a U.S. Certificate Owner.
"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.
"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 the Transferor.
"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 series of 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 Certificates--Pay Out Events."
"PAYING AGENT" means The Chase Manhattan Bank.
"PLAN" means:
o an employee benefit plan within the meaning of Section 3(3) of
ERISA;
o a plan within the meaning of 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 or the regulations promulgated under
ERISA (including, without limitation, an insurance company
general account).
"POOLING AND SERVICING AGREEMENT" means the Second Amended and
Restated Pooling and Servicing Agreement, dated as of September 1, 1996,
among the Transferor, the servicer and the Master Trust Trustee, as 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 certificates
of that series.
"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 Distribution Date to make principal distributions to
the certificateholders of that series or any class then scheduled to
receive principal distributions.
"PRINCIPAL COMMENCEMENT DATE" means the date on which principal
payments on the securities 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.
"PROGRAM OFFICE" means The Chase Manhattan Corporation's Year
2000 Enterprise Program Office.
"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,
- payment in full of the Investor Interest of the
certificates of that series and
- the related 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 to the certificateholders of that series or class
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
certificates of that series have been paid in full or
- the related Series Termination Date; and
during which collections of Principal Receivables allocable to a series
will be paid on each Distribution Date to the certificateholders 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 investor
certificates of any outstanding series or class with respect to which it is
a Rating Agency.
"RECORD DATE" means the date specified in the related supplement as
of which a certificateholder must be the registered holder of a certificate
to receive a payment on the following Distribution 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 securities. 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 to certificateholders 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.
"SERIES TERMINATION DATE" means for any series the earliest to
occur of:
o the Distribution Date on which the Investor Interest has been
paid in full;
o the final Distribution 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
Certificates--Servicer Default" for a description of the specific events
that could result in a Servicer Default.
"SPREAD ACCOUNT" means an account providing support for a series or
one or more classes of securities 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
Distribution Date.
"TRANSFEROR" means:
o with respect to the period before June 1, 1996, CMB (formerly
known as Chemical Bank), and
o with respect to the period beginning on June 1, 1996, Chase
USA.
"TRANSFEROR CERTIFICATE" means the certificate that represents
the Transferor Interest in the master trust.
"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 Distribution 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; or
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. CERTIFICATE OWNER" means a beneficial owner of a
certificate (other than a SERIES CERTIFICATE) described under "Tax
Matters--General."
"U.S. NOTE OWNER" means a beneficial owner of a note described
under "Tax Matters--General."
"U.S. PERSON" means a person described under "Description of the
Securities--Form of Securities--Certain U.S. Federal Income Tax
Documentation Procedures relating to Global Securities."
"YEAR 2000 CORE TEAM" means The Chase Manhattan Corporation's
management team overseeing the Year 2000 compliance process.
[FLAG]
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.
SUBJECT TO COMPLETION, DATED SEPTEMBER 3, 1999
PROSPECTUS SUPPLEMENT TO PROSPECTUS, DATED ________, 1999
CHASE CREDIT CARD MASTER TRUST
Issuer
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, Transferor
THE CHASE MANHATTAN BANK, Servicer
$__________ CLASS A FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 1999-_
$__________ CLASS B FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 1999-_
<TABLE>
<CAPTION>
Class A Certificates Class B Certificates
<S> <C> <C>
Principal Amount $___________________ $___________________
Price $__________ (______%) $__________ (______%)
Underwriters' Commissions $__________ (______%) $__________ (______%)
Proceeds to the Issuer $__________ (______%) $__________ (______%)
Certificate Rate one-month LIBOR + one-month LIBOR +
____% p.a. ___% p.a.
Interest Payment Dates monthly on the 15th monthly on the 15th
First Interest Payment Date _________, 1999 ______, 1999
Scheduled Principal Payment _______ ________
Date distribution date distribution date
</TABLE>
THE CLASS B CERTIFICATES ARE SUBORDINATED TO THE CLASS A CERTIFICATES.
These securities are interests in Chase Credit Card Master Trust and are
backed only by the assets of the trust. Neither these securities nor the
assets of the trust are obligations of Chase Manhattan Bank USA, N.A., The
Chase Manhattan 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-11 of this prospectus supplement.
WE HAVE APPLIED TO HAVE THE SECURITIES LISTED ON THE LUXEMBOURG STOCK
EXCHANGE.
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.
The underwriters of each class of certificates have agreed to purchase
those certificates, subject to the terms and conditions in the underwriting
agreement.
Underwriters of the Class A certificates
CHASE SECURITIES INC.
Underwriter of the Class B certificates
CHASE SECURITIES INC.
The date of this Prospectus Supplement is __________, 1999.
TABLE OF CONTENTS
PAGE
WHERE TO FIND INFORMATION IN THESE DOCUMENTS............................S-3
SUMMARY OF TERMS........................................................S-4
STRUCTURAL SUMMARY......................................................S-5
The Series 1999-_ Certificates .........................................S-5
Chase Credit Card Master Trust..........................................S-5
Scheduled Principal Payments and
Potential Later Payments ......................................S-6
Minimum Yield on the Receivables;
Possible Early Principal
Repayment of Series 1999-_ ....................................S-7
Tax Status of Class A, Class B and Chase
Credit Card Master Trust ......................................S-7
ERISA Considerations ...................................................S-8
Mailing Address and Telephone Number
of Principal Executive Offices ................................S-8
RISK FACTORS...........................................................S-11
CHASE CREDIT CARD MASTER TRUST PORTFOLIO...............................S-17
General .....................................................S-17
Delinquency and Loss Experience........................................S-17
Characteristics of Receivables Portfolio...............................S-18
MATURITY CONSIDERATIONS................................................S-22
Controlled Accumulation................................................S-22
Rapid Amortization Period..............................................S-23
Historical Payment Rates...............................................S-23
RECEIVABLE YIELD CONSIDERATIONS........................................S-24
USE OF PROCEEDS........................................................S-25
DESCRIPTION OF THE CERTIFICATES........................................S-26
General .....................................................S-26
Interest Allocations...................................................S-26
Principal Allocations..................................................S-27
Controlled Accumulation Period.........................................S-28
Rapid Amortization Period..............................................S-28
Allocation Percentages.................................................S-29
Application of Collections.............................................S-30
Excess Spread .....................................................S-31
Reallocation of Cash Flows....................................S-37
Shared Excess Finance Charge
Collections...................................................S-37
Shared Principal Collections...........................................S-37
Required Collateral Interest...........................................S-38
Defaulted Receivables..................................................S-38
Principal Funding Account..............................................S-39
Reserve Account .....................................................S-40
Pay Out Events .....................................................S-41
Servicing Fees and Expenses............................................S-44
Certificateholder Reports..............................................S-44
LISTING AND GENERAL INFORMATION........................................S-45
ERISA Considerations .........................................S-46
Class A Certificates..........................................S-46
Class B Certificates..........................................S-47
Consultation with Counsel.....................................S-48
UNDERWRITING...........................................................S-49
OTHER SERIES ISSUED AND OUTSTANDING....................................S-51
GLOSSARY OF TERMS FOR PROSPECTUS SUPPLEMENT............................S-62
WHERE TO FIND INFORMATION IN THESE DOCUMENTS
The attached prospectus provides general information about Chase
Credit Card Master Trust, including terms and conditions that are generally
applicable to the securities issued by the trust. The specific terms of
Series 1999-_ are described in this supplement.
This supplement begins with several introductory sections
describing your series and Chase Credit Card Master Trust in abbreviated
form:
o Summary of Terms provides important amounts, dates and other
terms of your series;
o Structural Summary gives a brief introduction to the key
structural features of your series and directions for
locating further information;
o Selected Master Trust Portfolio Summary Data gives certain
financial information about the assets of the trust; and
o Risk Factors describes risks that apply to your series.
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.
This prospectus supplement and the attached prospectus may be used
by Chase Securities Inc., an affiliate of Chase Manhattan Bank USA, N.A.
and The Chase Manhattan Bank and a subsidiary of The Chase Manhattan
Corporation, in connection with offers and sales related to market-making
transactions in the certificates offered by this supplement and the
attached prospectus. Chase 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 certificates in any state where the
offer is not permitted.
TO UNDERSTAND THE STRUCTURE AND TERMS OF THESE SECURITIES, YOU MUST READ
CAREFULLY THE ATTACHED PROSPECTUS AND THIS SUPPLEMENT IN THEIR ENTIRETY.
SUMMARY OF TERMS
Transferor: Chase Manhattan Bank USA, National Association--
"Chase USA"
Servicer: The Chase Manhattan Bank--"Chase Bank"
Trustee: The Bank of New York
Pricing Date: _________, 1999
Closing Date: _________, 1999
Clearance and Settlement: DTC/Cedelbank/Euroclear
Master Trust Assets: receivables originated in VISA and MasterCard
accounts, including recoveries on charged-off
receivables and fees payable by VISA and
MasterCard to Chase USA
Series Structure: Amount % of Total Series
Class A $___________ __%
Class B $___________ __%
Collateral Interest $___________ __%
Annual Servicing Fee: __%
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
Credit Enhancement: subordination of Class B subordination of collateral
and the collateral interest interest
Interest Rate: one-month LIBOR + __% one-month LIBOR + __%
p.a. p.a.
Interest Accrual Method: actual/360 actual/360
Interest Payment Dates: monthly (15th) monthly (15th)
Interest Rate Index Reset Date: 2 business days before each 2 business days before each
interest payment date interest payment date
First Interest Payment Date: ______, 1999 ______, 1999
Scheduled Principal Payment Date: ______ distribution date _______ distribution date
Commencement of Controlled Last day of ________ N/A
Accumulation Period
(subject to adjustment):
Series 1999-_ Legal Final Maturity: ________distribution date ________distribution date
Application for Exchange Listing: Luxembourg Luxembourg
CUSIP Number:
ISIN:
Common Code:
Anticipated Ratings:
(Moody's/S&P/Fitch IBCA) Aaa/AAA/AAA A2/A/A
</TABLE>
STRUCTURAL SUMMARY
This summary briefly describes certain major structural components
of Series 1999-_. To fully understand the terms of Series 1999-_ you will
need to read both this supplement and the attached prospectus in their
entirety.
THE SERIES 1999-_ CERTIFICATES
Your certificates represent the right to a portion of collections on the
underlying Chase Credit Card Master Trust assets. Your certificates will
also be allocated a portion of net losses on receivables, if any. Any
collections allocated to your series will be used to make interest or
principal payments, to pay a portion of the fees of Chase Bank as servicer
and to cover net losses allocated to your series. Any collections allocated
to your series in excess of the amount owed to you or Chase Bank as
servicer will be shared with other series of certificates issued by the
trust, or returned to Chase USA. In no case will you receive more than the
principal and interest owed to you under the terms described in this
supplement.
For further information on allocations and payments, see "Description of
the Certificates--Allocation Percentages" and "--Application of
Collections" in this supplement. For further information about the
receivables supporting your certificates, see "Chase Credit Card Master
Trust Portfolio" and "Receivable Yield Considerations" in this supplement.
For a more detailed discussion of the certificates, see "Description of the
Certificates" in this supplement.
AVAILABLE CREDIT ENHANCEMENT
Your certificates feature credit enhancement by means of the subordination
of other interests, which is intended to protect you from net losses and
shortfalls in cash flow. Credit enhancement is provided to Class A by the
following:
o subordination of Class B; and
o subordination of the collateral interest.
Credit enhancement is provided to Class B by the following:
o subordination of the collateral interest.
The effect of subordination is that the more subordinated interests will
absorb any net losses allocated to Series 1999-_, and make up any
shortfalls in cash flow, before the more senior interests are affected. On
the closing date the collateral interest will be $__________, or _% of
Series 1999-_. If the cash flow and any subordinated interest do not cover
all net losses allocated to Series 1999-_, your payments of interest and
principal will be reduced and you may suffer a loss of principal.
For a description of the subordination of Class B to Class A, see "Risk
Factors--Class B Bears Losses Before Class A" and "Description of the
Certificates--Subordination" in this supplement. For a discussion of
losses, see "Description of the Certificates--Defaulted Receivables" in
this supplement. See "Risk Factors" in this supplement for more detailed
discussions of the risks of investing in Series 1999-_.
CHASE CREDIT CARD MASTER TRUST
Your series is one of twenty-one outstanding series issued by the trust.
The trust is maintained by the trustee for the benefit of:
o certificateholders of Series 1999-_;
o certificateholders of other series issued by the trust;
o providers of credit enhancements for Series 1999-_ and other
series issued by the trust; and
o Chase USA.
Each series has a claim to a fixed dollar amount of Chase Credit Card
Master Trust's assets, regardless of the total amount of receivables in the
trust at any time. Chase USA holds the remaining claim to Chase Credit Card
Master Trust's assets, which fluctuates with the total amount of
receivables in the trust. Chase USA, as the holder of that remainder, has
the right to purchase the outstanding Series 1999-_ certificates at any
time when the outstanding amount of the Series 1999-_ certificateholders'
interest in Chase Credit Card Master Trust is less than 5% of the original
amount of that interest.
For more information on Chase Credit Card Master Trust's assets, see "Chase
Credit Card Master Trust Portfolio" and "Receivable Yield Considerations"
in this supplement and "Chase USA's Credit Card Activities" and "The
Receivables" in the attached prospectus.
SCHEDULED PRINCIPAL PAYMENTS AND POTENTIAL LATER PAYMENTS
Chase Credit Card Master Trust expects to pay the entire principal amount
of Class A in one payment on the ________ distribution date, and the entire
principal amount of Class B in one payment on the ________ distribution
date. In order to accumulate the funds to pay Class A on its scheduled
payment date, the trust will accumulate principal collections in a
principal funding account. The trust will deposit funds into the principal
funding account during a "controlled accumulation period." The length of
the controlled accumulation period may be as long as twelve months, but
will be shortened if Chase USA expects that a shorter period will suffice
for the accumulation of the Class A payment amount. The accumulation period
will end on the scheduled payment date for Class A, when the funds on
deposit in the principal funding account will be paid to Class A.
If Class A is not fully repaid on its scheduled payment date, Class A will
begin to amortize by means of monthly payments of all principal collections
allocated to Series 1999-_ until it is fully repaid.
After Class A is fully repaid the trust will use principal collections
allocated to Series 1999-_ to repay Class B. Because of the relatively
small principal payment required to repay Class B, the trust expects to pay
the Class B principal in full in one month. If Class B is not fully repaid
on its scheduled payment date, Class B will begin to amortize by means of
monthly payments of all principal collections allocated to Series 1999-_
after Class A is fully repaid.
For more information on scheduled principal payments, the controlled
accumulation period and Class B principal payments, see "Maturity
Considerations" and "Description of the Certificates--Principal
Allocations," "--Controlled Accumulation Period" and "--Application of
Collections--Payments of Principal" in this supplement and "Description of
the Securities--Description of the Certificates--Principal Allocations" in
the attached prospectus.
Prior to the commencement of an accumulation or amortization period for
Series 1999-_, principal collections will be paid to Chase USA or shared
with other series that are amortizing or in an accumulation period.
MINIMUM YIELD ON THE RECEIVABLES; POSSIBLE EARLY PRINCIPAL REPAYMENT OF
SERIES 1999-_
Class A or Class B may be repaid earlier than its scheduled principal
repayment date if collections on the underlying receivables, together with
other amounts available for payment to securityholders, are too low. The
minimum amount that must be available for payment to Series 1999-_ in any
month, referred to as the base rate, is the sum of the interest payable to
Class A, the interest payable to Class B and the interest payable to the
holder of the collateral interest, in each case for the related interest
period, plus the servicing fee for the related month. If the average trust
portfolio yield for Series 1999-_less net charge-offs 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 Series
1999-_ and the trust will commence a rapid amortization of Series 1999-_,
and holders of Series 1999-_ certificates will receive principal payments
earlier than the scheduled principal repayment date.
Series 1999-_ is also subject to several other pay out events, which could
cause Series 1999-_ to amortize, and which are summarized under the heading
"Description of the Certificates--Pay Out Events" in this supplement. If
Series 1999-_ begins to amortize, Class A will receive monthly payments of
principal until it is fully repaid; Class B will then receive monthly
payments of principal until it is fully repaid. In that event, your
certificates may be repaid prior to the scheduled payment date.
The final payment of principal and interest will be made no later than the
________ distribution date, which is the Series 1999-_ final payment date.
For more information on pay out events, the portfolio yield and base rate,
early principal repayment and rapid amortization, see "Maturity
Considerations," "Description of the Certificates--Principal Allocations"
and "--Pay Out Events" in this supplement and "Description of the
Securities--Description of the Certificates--Principal Allocations" and
"--Final Payment of Principal; Series Termination" in the attached
prospectus.
TAX STATUS OF CLASS A, CLASS B AND CHASE CREDIT CARD MASTER TRUST
Simpson Thacher & Bartlett, tax counsel to Chase USA, is of the opinion
that:
o under existing law the Class A and Class B certificates will be
characterized as debt for U.S. federal income tax purposes; and
o Chase Credit Card Master Trust will not 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
Class A Certificates: The underwriters anticipate that the Class A
certificates will meet the criteria for treatment as "publicly-offered
securities." If so, subject to important considerations described under
"ERISA Considerations" in this prospectus supplement and "Employee Benefit
Plan Considerations" in the attached prospectus, the Class A certificates
will be eligible for purchase by persons investing assets of employee
benefit plans or individual retirement accounts.
Class B Certificates: Pension plans and other investors subject to ERISA
cannot acquire Class B certificates. Prohibited investors include:
o "employee benefit plans" as defined in section 3(3) of ERISA;
o any "plan" as defined in section 4975 of the U.S. Internal
Revenue Code; and
o any entity whose underlying assets may be deemed to include "plan
assets" under ERISA by reason of any such plan's investment in
the entity, including insurance company general accounts.
By purchasing any Class B certificates, you certify that you are not within
any of those categories.
For further information regarding the application of ERISA, see "ERISA
Considerations" in this supplement and "Employee Benefit Plan
Considerations" in the attached prospectus.
MAILING ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES
The mailing address of Chase Manhattan Bank USA, National Association is
802 Delaware Avenue, Wilmington, Delaware 19801, and the telephone number
is (302) 575-5000.
SELECTED MASTER TRUST PORTFOLIO SUMMARY DATA
The chart below shows the geographic distribution of the receivables in the
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 trust portfolio.
[GRAPHIC OMITTED]
[Pie chart describing the "Geographic Distribution of Receivables in the
Master Trust Portfolio as of July 1, 1999." The chart indicates that the
geographic distribution of the Receivables is as follows: (i) 13.4% in
California, (ii) 13.2% in New York, (iii) 7.5% in Texas, (iv) 6.6% in
Florida, (v) 5.4% in New Jersey and (vi) 53.9% of the receivables
distributed among the remaining states.]
The chart below shows the percentages of the receivables in the trust
portfolio arising under accounts within the age brackets shown.
[GRAPHIC OMITTED]
The chart below shows the Master Trust Yield, payment rate and net
charge-off rate for the trust portfolio for each month from January 1997 to
June 1999.
[GRAPHIC OMITTED]
"Master trust yield" for any month means the total amount of collected
finance charges and interchange charges 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 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 certificates. 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 certificates.
YOU MAY RECEIVE PRINCIPAL If the average trust net yield allocated
PAYMENTS EARLIER OR LATER to Series 1999-__ - called portfolio
THAN THE SCHEDULED PRINCIPAL yield - for any three consecutive months
PAYMENT DATE IF THE PORTFOLIO is less than the amount of interest
YIELD IS REDUCED payable on the certificates for the
related interest period, plus the
servicing fee for the series averaged
for the same three months, a pay out
event will occur for your series. The
trust then will commence a rapid
amortization of your certificates, and
holders of Series 1999- certificates
will receive principal payments earlier
than the scheduled principal payment
date. Additionally, if principal
collections on receivables allocated to
other series are available for
application to a rapid amortization of
your certificates, 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 certificates.
The following four factors could result
in reduced portfolio yield:
CHASE USA MAY CHANGE THE Chase USA will transfer to the trust
TERMS AND CONDITIONS OF THE receivables arising under specified
ACCOUNTS credit card accounts, but Chase USA will
continue to own those accounts. As the
owner of those accounts, Chase USA
retains 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 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
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 RATEMAY in the trust accrue at a variable rate
RESET AT DIFFERENT TIMES above a stated prime rate or other index
under the terms of the agreement with
the cardholder. The certificate rate of
your certificate 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
certificates and other amounts required
to be funded out of collections of
finance charge receivables.
Finance charges on some of the accounts
in the trust accrue at a fixed rate. If
LIBOR increases, the interest payments
on your certificates 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 certificates
could reduce the portfolio yield and
increase the risk of early repayment of
your certificates as described above.
CHANGES TO CONSUMER Federal and state consumer protection
PROTECTION LAWS MAY laws regulate the creation and
IMPEDE CHASE'S enforcement of consumer loans, including
COLLECTION EFFORTS 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
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. Chase USA makes
representations and warranties relating
to the validity and enforceability of
the receivables in the trust. 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 Chase USA's representations or
warranties is violated, and the
violation continues beyond the period of
time allowed to correct the violation,
is that Chase USA 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 The receivables transferred to the trust
PRINCIPAL PAYMENTS AT may be repaid by cardholders at any
ANY TIME time. We cannot assure the creation of
additional receivables in the 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 trust could result in reduced
amounts of collections in the trust
portfolio and could increase the risk of
early repayment of your certificates as
described above. See "Maturity
Considerations" in this supplement.
ALLOCATIONS OF CHARGED-OFF CMB as servicer will write off the
RECEIVABLES COULD REDUCE receivables arising in accounts in the
PAYMENTS TO YOU trust portfolio if the receivables
become uncollectible or are otherwise
more than 180 days past due. Your series
will be allocated a portion of these
charged-off receivables. If the amount
of charged-off receivables allocated to
your series exceeds the amount of funds
available for reimbursement of those
charge-offs, 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
Certificates--Reallocation of Cash
Flows," "--Application of Collections"
and "--Defaulted Receivables" in this
supplement.
ISSUANCE OF ADDITIONAL SERIES BY Chase Credit Card Master Trust, as a
THE MASTER TRUST MAY AFFECT THE trust, may issue series of certificates
TIMING OF PAYMENTS TO YOU from time to time. The trust may issue
additional series of certificates with
terms that are different from your
series without your prior review or
consent. It is a condition to the
issuance of each new series 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. The rating agency
confirmation will be based primarily on
the trust's ability to pay principal by
the legal final maturity date and
interest on each payment date, but the
rating agency will not consider how the
terms of a new series could affect the
timing and amounts of payments on your
series. See "Description of the
Securities--Description of the
Certificates--Issuing New Series of
Certificates" in the attached
prospectus.
CHASE USA MAY ADD ACCOUNTS In addition to the accounts already
WITH DIFFERENT TERMS TO designated for the trust, Chase USA is
THE MASTER TRUST PORTFOLIO permitted to designate additional
accounts for the trust portfolio and to
transfer the receivables in those
accounts to the trust. Any new accounts
and receivables may have different terms
and conditions than the accounts and
receivables already in the 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 included
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 accounts and receivables may
produce higher or lower collections or
charge-offs over time than the accounts
and receivables already in the trust and
could tend to reduce the amount of
collections allocated to your series.
See "Description of the
Securities--Description of the
Certificates--Addition of Master Trust
Assets" in the attached prospectus.
CHASE USA MAY NOT BE ABLE TO If Chase USA's percentage interest in
ADD NEW ACCOUNTS WHEN RE- the accounts of the trust falls to 7% or
QUIRED UNDER THE POOLING AND less, Chase USA will be required to
SERVICING AGREEMENT maintain that level by designating
additional accounts for the trust
portfolio and transferring the
receivables in those accounts to the
trust. Chase USA may not have any
additional accounts to add at that time.
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
Certificates--Addition of Master Trust
Assets" in the attached prospectus.
INSOLVENCY OR BANKRUPTCY OF Chase USA accounts for the transfer of
CHASE USA COULD RESULT IN receivables to the trust as a sale.
ACCELERATED, DELAYED OR However, a court could conclude that
REDUCED PAYMENTS TO YOU Chase USA still owns the receivables and
that the trust holds only a security
interest. If a court concludes that the
transfer to the 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
trust's interests in those receivables.
See "Certain Legal Aspects of the
Receivables--Transfer of Receivables"
and "Description of the
Securities--Description of the
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 or is in an
unsound condition, the Comptroller is
authorized to appoint the FDIC as
receiver. Under such circumstances, the
FDIC could:
o require the trustee to go through an
administrative claims procedure to
establish its right to payments
collected on the receivables in the
trust;
o request a stay of proceedings with
respect to the trust's claims
against Chase USA; or
o repudiate the pooling and servicing
agreement and limit the master
trust's resulting claim against the
receivables to "actual direct
compensatory damages" measured as of
the date of receivership. See
"Certain Legal Aspects of the
Receivables--Certain Matters
Relating to Receivership" in the
attached prospectus.
If the FDIC were to take any of those
actions payments on your certificates
could be delayed and possibly reduced.
If a conservator or receiver were
appointed for Chase USA, then a "pay out
event" would occur for all outstanding
series. Under the terms of the pooling
and servicing agreement new principal
receivables would not be transferred to
the trust and the trustee would sell the
receivables unless holders of more than
50% of the investor interest of each
class of outstanding certificates gave
the trustee other instructions. The
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 may
nonetheless have the power:
o regardless of the terms of the
pooling and servicing agreement:
o to prevent the beginning of a
rapid amortization period,
o to prevent the early sale of the
receivables and termination of
the trust or
o to require new principal
receivables to continue being
transferred to the trust; or
o regardless of your instructions,
o to require the early sale of the
receivables,
o to require termination of the
trust and retirement of the
certificates or
o to prohibit the continued
transfer of principal
receivables to the 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
trustee or the holders of securities
issued by the 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 not have the right to vote to
OF MASTER TRUST ACTIONS direct the 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 RESELL The underwriters may assist in resales
YOUR CERTIFICATES of any class of the certificates but
they are not required to do so. A
secondary market for your certificates
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 certificates.
CLASS B BEARS LOSSES BEFORE Class B is subordinated to Class A.
CLASS A Principal allocations to Class B will
not begin until Class A has been paid in
full. If principal collections allocated
to your series are reallocated to make
interest allocations, 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 certificates would be
paid first to Class A before any
remaining net proceeds would be
available for payments due to Class B.
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 trust include credit card receivables generated
through accounts that Chase USA has designated as trust accounts. The trust
accounts are accounts designated when the trust was established and
additional accounts that have been designated since that time. Chase USA is
permitted to add accounts, and at times is required to add accounts, to the
trust. Chase USA can remove accounts from the trust if the conditions to
removal are satisfied. As a result, the composition of the trust is
expected to change over time. See "The Receivables" in the attached
prospectus for a general description of the receivables in the 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.
<TABLE>
<CAPTION>
DELINQUENCY EXPERIENCE
MASTER TRUST PORTFOLIO
(DOLLAR AMOUNTS IN MILLIONS)
AS OF JUNE 30, AS OF DECEMBER 31,
--------------------------------------------------------------------
1999 1998 1997 1996
--------------------- ----------------------- ---------------------- ----------------------
PERCENTAGE
OF TOTAL PERCENTAGE PERCENTAGE PERCENTAGE
NUMBER OF DAYS DELINQUENT RECEIVABLES DELINQUENT OF TOTAL DELINQUENT OF TOTAL DELINQUENT OF TOTAL
DELINQUENT AMOUNT DELINQUENT AMOUNT RECEIVABLES AMOUNT RECEIVABLES AMOUNT RECEIVABLES
- ------------------- ---------- ---------- ----------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30 to 59 Days...... $231 1.25% $264 1.49% $238 1.67% $244 1.73%
60 to 89 Days...... 156 0.85 177 1.00 166 1.17 169 1.21
90 Days or More.... 328 1.77 369 2.08 328 2.31 335 2.38
------ ---------- ---------- ----------- ---------- ---------- ---------- -----------
TOTAL......... $715 3.87% $810 4.57% $732 5.15% $748 5.32%
====== ========== ========== =========== ========== ========== ========== ===========
</TABLE>
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 trust PRINCIPAL RECEIVABLES outstanding during the indicated
period. Gross Charge-Offs shown include only the principal portion of
charged-off receivables and exclude charges relating to changes in Chase
USA's charge-off policies. 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 reflected for
the six months ended June 30, 1999 is an annualized figure.
<TABLE>
<CAPTION>
LOSS EXPERIENCE
MASTER TRUST PORTFOLIO
(DOLLAR AMOUNTS IN MILLIONS)
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------
1999 1998 1997 1996
----------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Average Principal Receivables Outstanding..... $17,761 $15,658 $13,394 $8,787
Gross Charge-Offs............................. 571 1,109 1,109 588
Recoveries.................................... 40 84 75 53
Net Charge-Offs............................... 531 1,025 941 535
Net Charge-Offs as a Percentage of Average
Principal Receivables Outstanding.......... 5.98% 6.55% 7.03% 6.09%
</TABLE>
As of June 30, 1999, accounts 60 or more days delinquent were
2.62% of total receivables compared with 3.08% as of December 31, 1998.
Accounts 60 or more days delinquent were 3.59% and 3.48% of total
receivables as of December 31, 1996 and 1997, respectively. Delinquencies
are a leading indicator of future charge-offs.
For the six month period ended June 30, 1999, net charge-offs as a
percentage of average principal receivables outstanding were 5.98% compared
with 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 delinquencies since December
31, 1996, and charge-offs since December 31, 1997 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.
o We 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.
Net charge-offs as a percentage of average principal receivables
outstanding were 6.09%, 7.03% and 6.55% for the years ended December 31,
1996, 1997 and 1998, respectively. The increase in 1997 and 1998, when
compared with 1996 reflects, among other factors, higher levels of personal
bankruptcies during 1997 and 1998.
CHARACTERISTICS OF RECEIVABLES PORTFOLIO
The receivables and the accounts in the MASTER TRUST PORTFOLIO, as
of the beginning of the day on July 1, 1999:
o included approximately $18.0 billion of PRINCIPAL
RECEIVABLES and $0.5 billion of FINANCE CHARGE RECEIVABLES;
o had an average principal receivables balance of $1,551;
o had an average credit limit of $7,043, of which the average
principal receivables balance represented approximately
23%;
o represented approximately 58% of aggregate receivables in
the BANK PORTFOLIO;
o had an average age of 80 months;
o had billing addresses in all 50 states and the District of
Columbia;
o approximately 64% were standard accounts, representing
approximately 61% of outstanding PRINCIPAL RECEIVABLES
balances; and
o approximately 36% were premium accounts, representing
approximately 39% of outstanding PRINCIPAL RECEIVABLES
balances.
The following tables summarize characteristics of the MASTER TRUST
PORTFOLIO as of the beginning of the day on July 1, 1999. 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.
<TABLE>
<CAPTION>
COMPOSITION BY ACCOUNT BALANCE
MASTER TRUST PORTFOLIO
PERCENTAGE OF PERCENTAGE OF
NUMBER OF TOTAL NUMBER RECEIVABLES TOTAL
ACCOUNT BALANCE ACCOUNTS OF ACCOUNTS OUTSTANDING RECEIVABLES
- ---------------------------------------------- ------------ ------------- ------------------- -------------
<S> <C> <C> <C> <C>
Credit Balance................................ 145,444 1.25% $ (18,009,406) (0.10)%
No Balance.................................... 5,012,613 43.17 0 0.00
$0.01 to $1,500.00............................ 3,090,165 26.61 1,483,679,418 8.03
$1,500.01 to $5,000.00........................ 1,967,067 16.94 5,867,161,035 31.74
$5,000.01 to $10,000.00....................... 1,184,869 10.20 8,615,066,192 46.61
$10,000.01 to $20,000.00...................... 210,695 1.81 2,489,524,758 13.47
Over $20,000.00............................... 1,770 0.02 45,625,461 0.25
------------ ------------- ------------------- -------------
TOTAL.................................... 11,612,623 100.00% $18,483,047,458 100.00%
============ ============= =================== =============
</TABLE>
<TABLE>
<CAPTION>
COMPOSITION BY CREDIT LIMIT
MASTER TRUST PORTFOLIO
PERCENTAGE OF PERCENTAGE OF
NUMBER OF TOTAL NUMBER RECEIVABLES TOTAL
CREDIT LIMIT ACCOUNTS OF ACCOUNTS OUTSTANDING RECEIVABLES
- ------------------------------------------- ----------- ------------- ------------------- --------------
<S> <C> <C> <C> <C>
$0.00...................................... 8,186 0.07% $ 49,565 0.00%
$0.01 to $1,500.00......................... 903,255 7.78 463,450,119 2.51
$1,500.01 to $5,000.00..................... 3,135,230 27.00 3,181,545,584 17.21
$5,000.01 to $10,000.00.................... 5,889,439 50.71 9,788,561,283 52.96
Over $10,000.00............................ 1,676,513 14.44 5,049,440,907 27.32
----------- ------------- ------------------ --------------
TOTAL................................. 11,612,623 100.00% $ 18,483,047,458 100.00%
=========== ============= =================== ==============
</TABLE>
<TABLE>
<CAPTION>
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
- --------------------------------------------- ------------- ------------ ------------------- --------------
<S> <C> <C> <C> <C>
Current...................................... 11,208,389 96.52% $ 16,981,336,608 91.88%
1 to 29 days delinquent...................... 235,921 2.03 785,870,780 4.25
30 to 59 days delinquent..................... 62,563 0.54 231,494,875 1.25
60 to 89 days delinquent..................... 36,796 0.32 156,372,895 0.85
90 days delinquent or more................... 68,954 0.59 327,972,300 1.77
------------ ------------ ------------------- --------------
TOTAL................................... 11,612,623 100.00% $ 18,483,047,458 100.00%
============ ============ =================== ==============
</TABLE>
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.
<TABLE>
<CAPTION>
COMPOSITION BY ACCOUNT SEASONING
MASTER TRUST PORTFOLIO
PERCENTAGE OF PERCENTAGE OF
NUMBER OF TOTAL NUMBER RECEIVABLES TOTAL
ACCOUNT AGE ACCOUNTS OF ACCOUNTS OUTSTANDING RECEIVABLES
- -------------------------------- -------------- ---------------- ---------------- -------------
<S> <C> <C> <C> <C>
Not More than 6 Months.......... 50,995 0.44% $ 106,556,062 0.58%
Over 6 Months to 12 Months...... 255,022 2.20 471,372,072 2.55
Over 12 Months to 24 Months..... 1,274,780 10.98 1,770,432,927 9.58
Over 24 Months to 36 Months..... 1,852,655 15.96 2,406,416,562 13.02
Over 36 Months to 48 Months..... 1,528,743 13.16 2.025,721,035 10.96
Over 48 Months to 60 Months..... 1,156,707 9.96 2,232,859,123 12.08
Over 60 Months to 120 Months.... 3,169,474 27.29 5,419,994,636 29.32
Over 120 Months................. 2,324,247 20.01 $ 4,049,695,041 21.91
-------------- ---------------- ---------------- -------------
TOTAL 11,612,623 100.00% $ 18,483,047,458 100.00%
============== ================ ================ =============
</TABLE>
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF ACCOUNTS
MASTER TRUST PORTFOLIO
PERCENTAGE OF PERCENTAGE OF
NUMBER OF TOTAL NUMBER RECEIVABLES TOTAL
STATE ACCOUNTS OF ACCOUNTS OUTSTANDING RECEIVABLES
- ----------------------------------------------- ---------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
California..................................... 1,480,646 12.75% $2,474,438,784 13.39%
New York....................................... 1,528,889 13.17 2,436,895,669 13.18
Texas.......................................... 785,093 6.76 1,385,115,672 7.49
Florida........................................ 774,279 6.67 1,212,457,587 6.56
New Jersey..................................... 636,595 5.48 993,636,022 5.38
Illinois....................................... 586,716 5.05 901,828,169 4.88
Ohio........................................... 410,789 3.54 651,623,533 3.53
Pennsylvania................................... 414,604 3.57 593,359,042 3.21
Massachusetts.................................. 418,776 3.61 576,080,918 3.12
Michigan....................................... 368,033 3.17 550,941,181 2.98
Virginia....................................... 252,459 2.17 425,331,178 2.30
Georgia........................................ 211,159 1.82 366,304,912 1.98
Maryland....................................... 222,008 1.91 355,936,077 1.93
Indiana........................................ 223,468 1.92 346,091,861 1.87
North Carolina................................. 209,504 1.80 340,385,000 1.84
Connecticut.................................... 206,673 1.78 307,528,947 1.66
Missouri....................................... 176,579 1.52 277,964,390 1.50
Tennessee...................................... 163,520 1.41 261,842,921 1.42
Washington..................................... 153,436 1.32 261,534,276 1.41
Arizona........................................ 145,726 1.26 250,487,878 1.36
Wisconsin...................................... 179,392 1.54 242,876,647 1.31
Minnesota...................................... 167,999 1.45 239,969,519 1.30
Louisiana...................................... 153,479 1.32 230,574,181 1.25
Colorado....................................... 145,954 1.26 229,108,768 1.24
Alabama........................................ 132,951 1.15 215,868,890 1.17
Kentucky....................................... 117,907 1.02 173,347,010 0.94
Oklahoma....................................... 104,903 0.90 168,096,726 0.91
South Carolina................................. 99,081 0.85 163,766,110 0.89
Oregon......................................... 99,512 0.86 162,484,514 0.88
Nevada......................................... 75,460 0.65 143,858,920 0.78
Arkansas....................................... 86,589 0.75 138,356,312 0.75
Kansas......................................... 78,447 0.68 124,285,116 0.67
Mississippi.................................... 75,250 0.65 116,389,135 0.63
Iowa........................................... 77,551 0.67 107,709,269 0.58
New Hampshire.................................. 59,897 0.52 98,320,273 0.53
Rhode Island................................... 69,589 0.60 98,034,288 0.53
New Mexico..................................... 55,084 0.47 90,156,617 0.49
Hawaii......................................... 43,418 0.37 79,175,989 0.43
Maine.......................................... 48,430 0.42 75,166,511 0.41
West Virginia.................................. 46,186 0.40 69,815,493 0.38
Nebraska....................................... 46,186 0.40 69,224,053 0.37
Utah........................................... 40,763 0.35 63,425,787 0.34
Idaho.......................................... 29,895 0.26 48,246,090 0.26
Vermont........................................ 28,539 0.25 46,364,544 0.25
Delaware....................................... 25,407 0.22 45,669,325 0.25
Montana........................................ 26,461 0.23 41,470,705 0.22
Washington, D.C................................ 22,520 0.19 39,444,540 0.21
Alaska......................................... 17,641 0.15 34,997,703 0.19
Wyoming........................................ 16,755 0.14 28,016,920 0.15
South Dakota................................... 17,737 0.15 26,378,387 0.14
North Dakota................................... 17,301 0.15 25,794,135 0.14
Other.......................................... 37,387 0.30 76,870,964 0.42
---------- -------------- ---------------- --------------
TOTAL 11,612,623 100.00% $18,483,047,458 100.00%
</TABLE>
MATURITY CONSIDERATIONS
Each class of certificates is scheduled to receive principal as
follows:
o the Class A scheduled certificate payment date is the
___________ distribution date, following the controlled
accumulation; and
o the Class B scheduled certificate payment date is the
___________ distribution date, following payment of Class A.
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 trustee shall deposit
into the PRINCIPAL FUNDING ACCOUNT for the benefit of the Class A
certificateholders, the least of:
o the CONTROLLED DEPOSIT AMOUNT,
o AVAILABLE INVESTOR PRINCIPAL COLLECTIONS, and
o the CLASS A ADJUSTED INVESTOR INTEREST before any
deposits on that TRANSFER DATE.
The length of the CONTROLLED ACCUMULATION PERIOD may be adjusted if
Chase USA believes that, based on expected collections of principal, Class
A will be fully repaid on the CLASS A SCHEDULED 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 the
CLASS A SCHEDULED 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 DISTRIBUTION DATE.
See "Description of the Certificates--Principal Allocations" and
"Controlled Accumulation" in this supplement for a more detailed
discussion.
Principal for payment to Class B is expected to be available in one
lump sum on the ________ DISTRIBUTION DATE without a CONTROLLED
ACCUMULATION PERIOD. Principal will not be paid to Class B until Class A is
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 your
series will be distributed to Class A on the following DISTRIBUTION DATE.
If Class A is not paid in full on the CLASS A SCHEDULED PAYMENT DATE, all
principal allocated to your series 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 your series will be paid to
Class B on each monthly DISTRIBUTION DATE until Class B, net of
charge-offs, is repaid, and finally to the COLLATERAL INTEREST holder on
each monthly DISTRIBUTION DATE until the COLLATERAL INTEREST, net of
charge-offs, is repaid. If charge-offs are allocated to your class of
certificates and not reimbursed, principal will be paid to you only up to
your investor interest net of these charge-offs.
See "Description of the Certificates--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 as a percentage of total
outstanding 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 trust.
<TABLE>
<CAPTION>
CARDHOLDER MONTHLY PAYMENT RATES
MASTER TRUST PORTFOLIO
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1999 1998 1997 1996
------------------ ------------------ ---------------- -----------------
<S> <C> <C> <C> <C>
Highest Month.................... 13.97% 12.70% 12.09% 11.79%
Lowest Month..................... 12.21% 10.96% 10.33% 10.09%
Monthly Average.................. 13.13% 12.11% 11.44% 10.76%
</TABLE>
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 certificates
that there will be sufficient time to accumulate the principal collections
necessary to pay you principal on the CLASS A SCHEDULED PAYMENT DATE. If
the trust cannot repay Class A due to insufficient funds in the PRINCIPAL
FUNDING ACCOUNT, principal payments to Class B will be delayed since you
cannot receive principal if you hold Class B certificates 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
in the MASTER TRUST PORTFOLIO for each of the three calendar years 1998,
1997 and 1996 and for the six months ended on June 30, 1999 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 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 percentage reflected for the six months ended June
30, 1999 is an annualized figure.
<TABLE>
<CAPTION>
PORTFOLIO YIELD
MASTER TRUST PORTFOLIO
(DOLLAR AMOUNTS IN MILLIONS)
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------------------------------------
1999 1998 1997 1996
---------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Finance Charges and Fees Collected............ $1,628 $2,795 $2,348 $1,505
Average Principal Receivables Outstanding..... $17,761 $15,658 $13,394 $8,787
Yield from Finance Charges and Fees Collected. 18.34% 17.85% 17.53% 17.13%
</TABLE>
USE OF PROCEEDS
The net proceeds from the sale of your certificates will be:
o used to make an initial deposit into an account for the
benefit of the COLLATERAL INTEREST holder; and
o paid to Chase USA in consideration for a portion of the
interest of Chase USA in the accounts receivables.
Chase USA will use the proceeds it receives for general corporate purposes.
DESCRIPTION OF THE CERTIFICATES
The following is a summary of the material provisions of the
certificates. This summary is not a complete description of the terms of
the certificates. You should refer to "Description of the
Securities--Description of the Certificates" in the attached prospectus as
well as the Pooling and Servicing Agreement and the Series 1999-__
Supplement for a complete description.
GENERAL
The certificates will be issued under the POOLING AND SERVICING
AGREEMENT and the SERIES 1999-__ SUPPLEMENT. Each certificate represents
the right to receive allocations of cardholder payments which have been
received from accounts transferred to the trust. In particular, the
certificates will be allocated:
o a FLOATING INVESTOR PERCENTAGE of collections of FINANCE
CHARGE RECEIVABLES;
o a FLOATING INVESTOR PERCENTAGE of DEFAULT AMOUNTS that
will reduce your INVESTOR INTEREST if not paid from
collections of FINANCE CHARGE RECEIVABLES or REALLOCATED
PRINCIPAL COLLECTIONS;
o during the REVOLVING PERIOD, a FLOATING INVESTOR
PERCENTAGE of collections of PRINCIPAL RECEIVABLES; and
o during the CONTROLLED ACCUMULATION PERIOD or a RAPID
AMORTIZATION PERIOD, a FIXED INVESTOR PERCENTAGE of
PRINCIPAL RECEIVABLES that will be used to repay your
principal.
The trustee will also allocate to the certificates:
o SHARED PRINCIPAL COLLECTIONS; and
o EXCESS FINANCE CHARGE COLLECTIONS.
Certificates will be issued in $1,000 denominations and will be
available only in book-entry form through DTC. As described in the attached
prospectus, as long as the certificates are held in book-entry form, you
will only be able to transfer your certificates 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
certificateholders in whose names certificates are registered on the RECORD
DATE, to the extent of available funds, on each DISTRIBUTION DATE.
The certificates are 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 trust may also be included in GROUP I.
INTEREST ALLOCATIONS
If you purchase Class A certificates you will receive a payment
from available funds of CLASS A MONTHLY INTEREST plus overdue CLASS A
MONTHLY INTEREST and interest on overdue CLASS A MONTHLY INTEREST on the
15th day of each month, or if that date is not a business day you will be
paid on the next business day.
If you purchase Class B certificates you will receive a payment
from available funds of CLASS B MONTHLY INTEREST plus overdue CLASS B
MONTHLY INTEREST and interest on overdue CLASS B MONTHLY INTEREST on the
15th day of each month, or if that date is not a business day you will be
paid on the next business day.
On each DISTRIBUTION DATE, you will receive an interest payment
based on the interest rate for your class and the outstanding balance of
your certificates as follows:
o the Class A certificate rate is _____% per annum above
one-month LIBOR; and
o the Class B certificate rate is _____% per annum above
one-month LIBOR.
The trustee will calculate the amount of interest to be paid to
you by multiplying:
o the principal balance of your class as of the last RECORD
DATE by
o the certificate rate for your class by
o a fraction equal to the number of actual days for that
interest period divided by 360.
If you do not receive your interest in full on any DISTRIBUTION
DATE, you will be paid the shortfall on a following DISTRIBUTION DATE as
well as interest at the interest rate for your class on those unpaid
amounts to the extent of available funds.
The initial interest payment and the initial interest period will
be adjusted to account for a [shorter][longer] first period.
The 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 11:00 a.m.
London time. If the rate does not appear, the 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 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.
You can call the trustee at 212-815-5286 to obtain the Class A and
B interest rates for the prior and current interest periods. Chase USA will
also notify the Luxembourg Stock Exchange by the first day of the interest
period of the Class A and Class B interest rates and the amount of interest
to be paid to each class of certificates on the next DISTRIBUTION DATE.
This information will also be included in the monthly certificateholder
statement.
Interest payments on your certificate will be funded from:
o FINANCE CHARGE RECEIVABLES collected during the prior
month and allocated to your series based on the FLOATING
INVESTOR PERCENTAGE described under "--Allocation
Percentages" -- other than INTERCHANGE used to pay a
portion of the 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.
PRINCIPAL ALLOCATIONS
Principal payments on your certificate will be funded from:
o collections of PRINCIPAL RECEIVABLES allocated to your
series; plus
o SHARED PRINCIPAL COLLECTIONS allocated to your series; minus
o collections of PRINCIPAL RECEIVABLES reallocated to pay
the CLASS A REQUIRED AMOUNT and the CLASS B REQUIRED
AMOUNT; minus
o collections of PRINCIPAL RECEIVABLEs reallocated to other
series.
During the REVOLVING PERIOD, these amounts will be :
o used as REALLOCATED PRINCIPAL COLLECTIONs to make
payments of the CLASS A REQUIREd AMOUNT or the CLASS B
REQUIRED AMOUNT;
o if there has been a reduction of the REQUIRED COLLATERAL
INTERESt paid to the COLLATERAl INTEREST holder; or
o treated as SHARED PRINCIPAL COLLECTIONs and may be used
to pay principal to other series or to Chase USA.
During the CONTROLLED ACCUMULATION PERIOD, an amount equal to the
least of:
o AVAILABLE INVESTOR PRINCIPAL COLLECTIONS allocated to
your series,
o the CONTROLLED DEPOSIT AMOUNT, and
o the excess of the CLASS A ADJUSTED INVESTOR INTEREST over
the amount on deposit in the PRINCIPAL FUNDING ACCOUNT
will be deposited in the PRINCIPAL FUNDING ACCOUNT for distribution to
Class A certificateholders on the ___________ DISTRIBUTION DATE.
After the earlier of:
o the date the Class A certificates have been paid in full,
or
o the date the PRINCIPAL FUNDING ACCOUNT equals the amount
of the CLASS A INVESTOR INTEREST,
an amount equal to the lesser of:
o AVAILABLE INVESTOR PRINCIPAL COLLECTIONS, and
o the CLASS B INVESTOR INTEREST
will be available to pay principal to the Class B certificates on the
_______ DISTRIBUTION DATE. There will be no accumulation of principal in
the PRINCIPAL FUNDING ACCOUNT for Class B certificates.
After the CLASS A and CLASS B INVESTOR INTERESTS have been paid,
AVAILABLE INVESTOR PRINCIPAL COLLECTIONS will be distributed to the
COLLATERAL INTEREST holder until the earlier of:
o the date the COLLATERAL INTEREST has been paid, and
o the SERIES 1999-____ TERMINATION DATE.
CONTROLLED ACCUMULATION PERIOD
The CONTROLLED ACCUMULATION PERIOD is scheduled to last 12 months.
However, the servicer may elect to extend the REVOLVING PERIOD and postpone
the CONTROLLED ACCUMULATION PERIOD by providing a notice to the trustee.
The servicer can make this election 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 ___, 200_ DETERMINATION DATE until the
CONTROLLED ACCUMULATION PERIOD begins, the servicer will review the amount
of expected principal collections until the CLASS A SCHEDULED PAYMENT DATE
and may elect to postpone the CONTROLLED ACCUMULATION PERIOD. In making its
decision, 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.
RAPID AMORTIZATION PERIOD
The RAPID AMORTIZATION PERIOD will begin upon the occurrence of a
PAY OUT EVENT. During the RAPID AMORTIZATION PERIOD, the Class A
certificateholders will receive:
o amounts in the PRINCIPAL FUNDING ACCOUNT, if any, and
o the AVAILABLE INVESTOR PRINCIPAL COLLECTIONS until the
Class A certificates have been paid in full.
After the Class A certificates have been paid in full, AVAILABLE
INVESTOR PRINCIPAL COLLECTIONS will be paid to the Class B
certificateholders until the earlier of:
o the date the Class B certificates are paid in full, and
o the SERIES TERMINATION DATE.
SUBORDINATION
The Class B certificates and the COLLATERAL INTEREST will be
subordinated to the Class A certificates. The COLLATERAL INTEREST will be
subordinated to the Class B certificates. Principal payments that are
allocated to the Class B certificates may be reallocated to pay the CLASS A
REQUIRED AMOUNT and the CLASS B INVESTOR INTEREST may be reduced if the
COLLATERAL INTEREST is equal to zero. Similarly, principal payments that
are allocated to the Collateral Interest may be reallocated to pay the
CLASS A REQUIRED AMOUNT and the CLASS B REQUIRED AMOUNT and the COLLATERAL
INTEREST may be reduced. If EXCESS SPREAD is not available to reimburse
these reductions in the CLASS B INVESTOR INTEREST, the percentage of
collections of FINANCE CHARGE RECEIVABLES allocated to the Class B
certificates in later periods and the amount of interest and principal
distributable to Class B certificateholders will be reduced. No principal
will be paid to Class B until the CLASS A INVESTOR INTEREST is paid in
full.
ALLOCATION PERCENTAGES
The trustee will use the FLOATING INVESTOR PERCENTAGE to allocate
to the INVESTOR INTEREST collections of FINANCE CHARGE RECEIVABLES and
DEFAULT AMOUNTS at any time and collections of PRINCIPAL RECEIVABLES during
the REVOLVING PERIOD.
o The FLOATING INVESTOR 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 generally equal to
the greater of:
o the sum of the amount of PRINCIPAL
RECEIVABLES in the 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 percentages for
allocations of FINANCE CHARGE
RECEIVABLES, DEFAULT AMOUNTS or
PRINCIPAL RECEIVABLES for all trust
series outstanding.
These amounts allocated to the INVESTOR INTEREST will be allocated to:
o the Class A certificates based on the CLASS A FLOATING
ALLOCATION;
o the Class B certificates based on the CLASS B FLOATING
ALLOCATION; and
o the COLLATERAL INTEREST based on the COLLATERAL FLOATING
ALLOCATION.
The trustee will use the FIXED INVESTOR PERCENTAGE to allocate to
the INVESTOR INTEREST collections of PRINCIPAL RECEIVABLES during the
CONTROLLED ACCUMULATION PERIOD and the RAPID AMORTIZATION PERIOD.
o The FIXED INVESTOR 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 generally equal to
the greater of:
o the sum of the amount of PRINCIPAL
RECEIVABLES in the 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 all 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.
PRINCIPAL RECEIVABLES allocated to the INVESTOR INTEREST will be
further allocated to:
o the Class A certificates based on the CLASS A FIXED
ALLOCATION;
o the Class B certificates based on the CLASS B FIXED
ALLOCATION; and
o the COLLATERAL INTEREST based on the COLLATERAL FIXED
ALLOCATION.
APPLICATION OF COLLECTIONS
Payment of Interest, Fees and Other Items. On each Transfer Date,
AVAILABLE FUNDS will be applied as described below.
o CLASS A AVAILABLE FUNDS will be distributed as described
below:
- an amount equal to CLASS A MONTHLY INTEREST,
plus the amount of any overdue CLASS A MONTHLY
INTEREST and CLASS A ADDITIONAL INTEREST, will
be deposited into the DISTRIBUTION ACCOUNT for
payment to Class A certificateholders;
- an amount equal to the CLASS A SERVICING FEE for
the related MONTHLY PERIOD, plus the amount of
any overdue CLASS A SERVICING FEE, will be paid
to the servicer;
- an amount equal to the CLASS A INVESTOR DEFAULT
AMOUNT for the related MONTHLY PERIOD will be
treated as a portion of AVAILABLE INVESTOR
PRINCIPAL COLLECTIONS and deposited into the
PRINCIPAL ACCOUNT; and
- the balance, if any, will constitute a portion
of EXCESS SPREAD and will be allocated and
distributed as described below under "--Excess
Spread."
o CLASS B AVAILABLE FUNDS will be distributed as described
below:
- an amount equal to CLASS B MONTHLY INTEREST,
plus the amount of any overdue CLASS B MONTHLY
INTEREST and CLASS B ADDITIONAL INTEREST, will
be deposited into the DISTRIBUTION ACCOUNT for
distribution to Class B certificateholders;
- an amount equal to the CLASS B SERVICING FEE for
the related MONTHLY PERIOD, plus the amount of
any overdue CLASS B SERVICING FEE, will be paid
to the servicer; and
- the balance, if any, will constitute a portion of
EXCESS SPREAD and will be allocated and distributed
as described below under "--Excess Spread."
o COLLATERAL AVAILABLE FUNDS will be distributed as described
below:
- if neither CMB or any of its affiliates nor The
Bank of New York is the servicer, an amount
equal to the COLLATERAL INTEREST SERVICING FEE
for the related MONTHLY PERIOD, plus the amount
of any overdue COLLATERAL INTEREST SERVICING
FEE, will be paid to the servicer; and
- the balance, if any, will constitute a portion
of EXCESS SPREAD and will be allocated and
distributed as described below under "--Excess
Spread."
EXCESS SPREAD
On each TRANSFER DATE, EXCESS SPREAD and EXCESS FINANCE CHARGE
COLLECTIONS available to Series 1999-_ will be applied in the following
order of priority:
o an amount equal to the CLASS A REQUIRED AMOUNT, if any, will
be used to fund:
- CLASS A MONTHLY INTEREST plus any overdue CLASS
A MONTHLY INTEREST and any CLASS A ADDITIONAL
INTEREST, then
- the CLASS A SERVICING FEE and any overdue CLASS
A SERVICING FEE, then
- an amount equal to the CLASS A INVESTOR DEFAULT
AMOUNT and be treated as AVAILABLE INVESTOR
PRINCIPAL COLLECTIONS;
o an amount equal to the aggregate amount of CLASS A
INVESTOR CHARGE-OFFS which have not been previously
reimbursed will be deposited into the Principal Account
and treated as a portion of AVAILABLE INVESTOR PRINCIPAL
COLLECTIONS;
o an amount equal to the CLASS B REQUIRED AMOUNT, if any,
will be used to fund:
- CLASS B MONTHLY INTEREST plus the amount of any
overdue CLASS B MONTHLY INTEREST and any CLASS B
ADDITIONAL INTEREST, then
- the CLASS B SERVICING FEE plus any overdue CLASS
B SERVICING FEE, and
- an amount equal to the CLASS B INVESTOR DEFAULT
AMOUNT and be treated as a portion of Available
Investor Principal Collections;
o an amount equal to the amount by which the CLASS B
INVESTOR INTEREST has been reduced below the initial
CLASS B INVESTOR INTEREST for reasons other than the
payment of principal to the Class B certificateholders
will be deposited into the PRINCIPAL ACCOUNT and treated
as a portion of AVAILABLE INVESTOR PRINCIPAL COLLECTIONS;
o an amount equal to the COLLATERAL MONTHLY INTEREST, plus
the amount of any COLLATERAL MONTHLY INTEREST previously
due but not distributed to the COLLATERAL INTEREST
holder, will be distributed to the COLLATERAL INTEREST
holder for distribution in accordance with the LOAN
AGREEMENT;
o if CMB or any of its affiliates or The Bank of New York
is the servicer, an amount equal to the COLLATERAL
INTEREST SERVICING FEE for the related MONTHLY PERIOD,
plus the amount of any overdue COLLATERAL INTEREST
SERVICING FEE, will be paid to the servicer;
o an amount equal to the COLLATERAL DEFAULT AMOUNT, if any,
will be deposited into the PRINCIPAL ACCOUNT and treated
as AVAILABLE INVESTOR PRINCIPAL COLLECTIONS;
o an amount equal to the amount by which the COLLATERAL
INTEREST has been reduced below the REQUIRED COLLATERAL
INTEREST for any reason other than the payment of
principal to the COLLATERAL INTEREST holder will be
deposited into the PRINCIPAL ACCOUNT and treated as a
portion of AVAILABLE INVESTOR PRINCIPAL COLLECTIONS;
o on and after the RESERVE ACCOUNT FUNDING DATE, an amount
up to the excess, if any, of the REQUIRED RESERVE ACCOUNT
AMOUNT over the AVAILABLE RESERVE ACCOUNT AMOUNT will be
deposited into the RESERVE ACCOUNT;
o an amount equal to the amounts determined to be payable
pursuant to the LOAN AGREEMENT will be paid to the COLLATERAL
INTEREST holder; and
o the balance, if any, will constitute EXCESS FINANCE
CHARGE COLLECTIONS to be applied for the benefit of other
series in accordance with the POOLING AND SERVICING
AGREEMENT.
The figure below demonstrates the application of collections of
FINANCE CHARGE RECEIVABLES allocated to Series 1999- [ ]. The figure is a
simplified demonstration of the allocation and payment provisions contained
in this supplement and the attached prospectus.
[GRAPHIC OMITTED]
Payments of Principal. On each TRANSFER DATE, AVAILABLE INVESTOR
PRINCIPAL COLLECTIONS on deposit in the PRINCIPAL ACCOUNT will be applied
in the following manner:
o on each TRANSFER DATE during the REVOLVING PERIOD, all
AVAILABLE INVESTOR PRINCIPAL COLLECTIONS will be
distributed or deposited in the following priority:
- an amount equal to the COLLATERAL MONTHLY
PRINCIPAL will be paid to the COLLATERAL
INTEREST holder in accordance with the LOAN
AGREEMENT; and
- the balance will be treated as SHARED PRINCIPAL
COLLECTIONS;
o on each TRANSFER DATE during the CONTROLLED ACCUMULATION
PERIOD or the RAPID AMORTIZATION PERIOD, all AVAILABLE
INVESTOR PRINCIPAL COLLECTIONS will be distributed or
deposited in the following priority:
- an amount equal to CLASS A MONTHLY PRINCIPAL
will be
o during the CONTROLLED ACCUMULATION
PERIOd, deposited in the PRINCIPAL
FUNDING ACCOUNT up to the CONTROLLED
DEPOSIT AMOUNT, and
o during the RAPID AMORTIZATION PERIOd,
distributed to Class A
certificateholders; and
- for each TRANSFER DATE after the CLASS A
INVESTOR INTEREST has been paid in full an
amount equal to the CLASS B MONTHLY PRINCIPAL
will be distributed to the Class B
certificateholders;
- on each TRANSFER DATE during the CONTROLLED
ACCUMULATION PERIOD and the RAPID AMORTIZATION
PERIOD in which a reduction in the REQUIRED
COLLATERAL INTEREST has occurred, AVAILABLE
INVESTOR PRINCIPAL COLLECTIONS not applied to
CLASS A MONTHLY PRINCIPAL or CLASS B MONTHLY
PRINCIPAL will be applied in accordance with the
LOAN AGREEMENT to reduce the COLLATERAL INTEREST
to the REQUIRED COLLATERAL INTEREST; and
- on each TRANSFER DATE during the CONTROLLED
ACCUMULATION PERIOD and the RAPID AMORTIZATION
PERIOD, the balance of AVAILABLE INVESTOR
PRINCIPAL COLLECTIONS not paid for the benefit
of the Class A certificateholders, the Class B
certificateholders or the COLLATERAL INTEREST
holders, if any, will be treated as Shared
Principal Collections.
You will receive the final distribution of principal and interest
on the certificates no later than the SERIES 1999-____ TERMINATION DATE.
After the SERIES 1999-____ TERMINATION DATE, the trust will have no further
obligation to pay principal or interest on the certificates.
The following diagram provides you with an outline of the
allocation of principal collections This figure is a simplified
demonstration of the allocation and payment provisions contained in this
supplement and the attached prospectus.
[GRAPHIC OMITTED]
REALLOCATION OF CASH FLOWS
Each month, the servicer will calculate the CLASS A REQUIRED
AMOUNT and the CLASS B REQUIRED AMOUNT. These amounts are generally equal
to the amount of interest plus the portion of the INVESTOR SERVICING FEE
and INVESTOR DEFAULT AMOUNT allocated to Class A or Class B that cannot be
paid from CLASS A AVAILABLE FUNDS or CLASS B AVAILABLE FUNDS.
The CLASS A REQUIRED AMOUNT will be paid, to the extent necessary,
from:
o EXCESS SPREAD, then
o REALLOCATED COLLATERAL PRINCIPAL COLLECTIONS, then
o REALLOCATED CLASS B PRINCIPAL COLLECTIONS.
REALLOCATED PRINCIPAL COLLECTIONS are principal collections
allocated to Class B or to the COLLATERAL INTEREST that are then
reallocated to make interest payments, pay a portion of the servicing fee
and cover INVESTOR DEFAULT AMOUNTS allocated to a more senior class.
SHARED EXCESS FINANCE CHARGE COLLECTIONS
Collections of FINANCE CHARGE RECEIVABLES - and other amounts
treated like collections of FINANCE CHARGE RECEIVABLES - in excess of the
amount required to make payments or deposits for the certificates of your
series will be made available to other series included in GROUP I whose
allocation of collections of FINANCE CHARGE RECEIVABLES is not sufficient
to make its required payments or deposits. We call these collections EXCESS
FINANCE CHARGE COLLECTIONS. If the certificates of your series require more
collections of FINANCE CHARGE RECEIVABLES than allocated through the
investor percentage, they will have access to collections of FINANCE CHARGE
RECEIVABLES - 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. EXCESS FINANCE CHARGE COLLECTIONS remaining after payment of all
shortfalls for other series in GROUP I will be paid to Chase USA.
SHARED PRINCIPAL COLLECTIONS
Collections of PRINCIPAL RECEIVABLES allocated to the INVESTOR
INTEREST in excess of:
o the CONTROLLED DEPOSIT AMOUNT and principal
payment, if any, to the COLLATERAL INTEREST
holder during the CONTROLLED ACCUMULATION
PERIOD, and
o principal payments to the certificateholders or
the COLLATERAL INTEREST holder, 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 certificates require more
principal collections than allocated through the investor percentage, you
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 trustee
will distribute the remaining amount to the holder of the TRANSFEROR
CERTIFICATE or, under certain circumstances, deposit it into the EXCESS
FUNDING ACCOUNT.
REQUIRED COLLATERAL INTEREST
With respect to any TRANSFER DATE, if the COLLATERAL INTEREST is
less than the REQUIRED COLLATERAL INTEREST, available EXCESS SPREAD will be
allocated to increase the COLLATERAL INTEREST to cover the shortfall. Any
EXCESS SPREAD that is not required to be deposited in the RESERVE ACCOUNT
will be applied in accordance with the LOAN AGREEMENT.
DEFAULTED RECEIVABLES
The INVESTOR DEFAULT AMOUNT represents the investor's share of
losses from the trust. On each TRANSFER DATE, CMB as servicer will
calculate the INVESTOR DEFAULT AMOUNT by multiplying:
o the FLOATING INVESTOR PERCENTAGE for that month, by
o the total amount of receivables in trust portfolio
accounts that were charged-off for that month.
The INVESTOR DEFAULT AMOUNT will be further allocated:
o to the Class A certificateholders based on the CLASS A
FLOATING ALLOCATION;
o to the Class B certificateholders based on the CLASS B
FLOATING ALLOCATION; and
o to the COLLATERAL INTEREST holder based on the COLLATERAL
FLOATING ALLOCATION.
If the CLASS A INVESTOR DEFAULT AMOUNT exceeds the amount of CLASS A
AVAILABLE FUNDS, EXCESS SPREAD and REALLOCATED PRINCIPAL COLLECTIONS
allocated to fund the CLASS A INVESTOR DEFAULT AMOUNT for any MONTHLY
PERIOD, then first the COLLATERAL INTEREST, then second the CLASS B
INVESTOR INTEREST and third the CLASS A INVESTOR INTEREST will be reduced
by the excess. Any reduction in the CLASS A INVESTOR INTEREST as a result
of a CLASS A INVESTOR CHARGE-OFF may be reimbursed by EXCESS SPREAD on a
later TRANSFER DATE.
If the CLASS B INVESTOR DEFAULT AMOUNT exceeds the amount of EXCESS SPREAD
and REALLOCATED COLLATERAL PRINCIPAL COLLECTIONS allocated to fund the
CLASS B INVESTOR DEFAULT AMOUNT for any MONTHLY PERIOD, then first the
COLLATERAL INTEREST and second the CLASS B INVESTOR INTEREST will be
reduced by the excess. The CLASS B INVESTOR INTEREST will also be reduced
by the amount of:
o REALLOCATED CLASS B PRINCIPAL COLLECTIONS in excess of
the COLLATERAL INTEREST; and
o the CLASS B INVESTOR INTEREST allocated to protect the
Class A certificates.
Any reduction in the CLASS B INVESTOR INTEREST may be reimbursed by EXCESS
SPREAD on a later TRANSFER DATE.
If the COLLATERAL DEFAULT AMOUNT exceeds the amount of EXCESS SPREAD
allocated to fund the COLLATERAL DEFAULT AMOUNT for any MONTHLY PERIOD, the
COLLATERAL INTEREST will be reduced by the excess. The COLLATERAL INTEREST
will also be reduced by the amount of:
o REALLOCATED PRINCIPAL COLLECTIONS; and
o the COLLATERAL INTEREST allocated to the Class B
certificates and Class A certificates.
Any reductions in the COLLATERAL INTEREST may be reimbursed by EXCESS
SPREAD on a later TRANSFER DATE.
PRINCIPAL FUNDING ACCOUNT
The trustee will establish the PRINCIPAL FUNDING 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 used to make principal
payment to holders of Class A certificates on the CLASS A SCHEDULED PAYMENT
DATE. However, if a rapid amortization occurs, those amounts will be paid
to you if you hold Class A certificates on the first DISTRIBUTION DATE
after the RAPID AMORTIZATION PERIOD begins.
There is no PRINCIPAL FUNDING ACCOUNT for the Class B certificates.
The servicer will direct the 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 Collections of
FINANCE CHARGE RECEIVABLES. We call these amounts PRINCIPAL FUNDING
INVESTMENT PROCEEDS. If for any month, the PRINCIPAL FUNDING INVESTMENT
PROCEEDS are less than the product of:
o the balance of the PRINCIPAL FUNDING ACCOUNT as of the
RECORD DATE, and
o the CLASS A CERTIFICATE RATE in effect for the related
INTEREST PERIOD, and
o a fraction that is equal to the actual number of
days in the MONTHLY PERIOD divided by 360,
then the Trustee will withdraw the shortfall from the RESERVE ACCOUNT
described below and treat those amounts as CLASS A AVAILABLE FUNDS.
RESERVE ACCOUNT
The trustee will establish the RESERVE ACCOUNT that it will use to
fund investment earnings shortfalls during the CONTROLLED ACCUMULATION
PERIOD. At least three months prior to the beginning of the CONTROLLED
ACCUMULATION PERIOD, the trustee will begin to deposit EXCESS SPREAD into
this account until the account balance equals the REQUIRED RESERVE ACCOUNT
AMOUNT.
Chase USA may change the formula for calculating the REQUIRED
RESERVE ACCOUNT AMOUNT if the rating agencies agree that the modification
to the formula will not result in negative rating action on the
certificates and an authorized officer of Chase USA certifies that, in the
reasonable belief of Chase USA, the modification will not result in a PAY
OUT EVENT.
CMB as servicer will direct the 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 trustee
will withdraw money from this account in excess of the REQUIRED RESERVE
ACCOUNT AMOUNT on each TRANSFER DATE and the amount withdrawn will be
distributed to the COLLATERAL INTEREST holder under the terms of the LOAN
AGREEMENT.
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 RESERVE ACCOUNT and treat as CLASS A
AVAILABLE FUNDS the lesser of:
o the AVAILABLE RESERVE ACCOUNt AMOUNt, and
o the PRINCIPAL FUNDING INVESTMENT SHORTFALL for that
TRANSFER DATE.
The RESERVE ACCOUNT will terminate on the earliest to occur of:
o the termination date of the 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
SERIES 1999-[ ] TERMINATION DATE
Upon termination of this account, funds in this account will be distributed
to the COLLATERAL INTEREST holder to be applied in accordance with the LOAN
AGREEMENT.
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 on the following page occurs. The chart also
indicates whether each listed PAY OUT EVENT is an automatic event or an
event that requires a majority vote of the certificateholders and the
COLLATERAL INTEREST holder to declare the occurrence of a PAY OUT EVENT.
Additionally, some events cause a rapid amortization of the certificates
while others will cause a rapid amortization for all series issued by the
trust and outstanding when the event occurs.
<TABLE>
<CAPTION>
REQUIRES A
MAJORITY VOTE OF
CERTIFICATEHOLDERS CAUSES RAPID CAUSES RAPID
AND COLLATERAL AMORTIZATION OF AMORTIZATION OF
PAY OUT EVENT INTEREST HOLDER 1 SERIES 1999-[ ] ALL SERIES
-------------------- --------------- ---------------
<S> <C> <C> <C>
1. Chase USA fails to make a payment or deposit when required to
under the POOLING AND SERVICING AGREEMENT or within five days X X
after that date.
2. Chase USA fails to observe or perform any covenant or agreement X X
and that failure has a material adverse effect on you and the failure
continues unremedied for 60 days after written notice to Chase USA.
3. Chase USA makes a representation or warranty that was materially X X
incorrect when made and that continues to be materially incorrect for
60 days after written notice to Chase USA and as a result you are
materially and adversely affected, unless Chase USA accepts
reassignment of the related RECEIVABLES.
4. Chase USA provides materially incorrect information about the trust X X
accounts and that information continues to be materially incorrect for
60 days after written notice to Chase USA and as a result you are
materially and adversely affected, unless Chase USA accepts
reassignment of the related RECEIVABLES.
5. The average of the PORTFOLIO YIELDS for three consecutive MONTHLY X
PERIODS is less than the average of the BASE RATES for the same
period.
____________________
1 Each specified PAY OUT EVENT requires the vote of the
certificateholders and the COLLATERAL INTEREST holder holding more
than 50% of the Series 1999-[ ] INVESTOR INTEREST by aggregate
principal amount or the vote of the trustee. Unless otherwise
specified, PAY OUT EVENTS are declared upon occurrence without the
necessity for a vote.
6. Chase USA fails to transfer receivables under additional accounts or
participations when required under the POOLING AND SERVICING
AGREEMENT.
7. A SERVICER DEFAULT occurs which has a material adverse effect on X X
you.
8. There are insufficient funds in the DISTRIBUTION ACCOUNT to pay the X X
CLASS A INVESTOR INTEREST in full on the CLASS A SCHEDULED
PAYMENT DATE or the CLASS B INVESTOR INTEREST in full on the CLASS
B SCHEDULED PAYMENT DATE.
9. Chase USA becomes bankrupt or insolvent or enters receivership or X
conservatorship.
10. Chase USA becomes unable to transfer RECEIVABLES to the trust in X
accordance with the POOLING AND SERVICING AGREEMENT.
11. The trust becomes subject to regulation as an "investment company" X
under the Investment Company Act of 1940.
</TABLE>
Once a rapid amortization begins, principal will begin to be
distributed to the Class A certificates 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 certificates you hold
may be shortened.
SERVICING FEES AND EXPENSES
The 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 collections of FINANCE CHARGE RECEIVABLES and half of
the servicing fee from INTERCHANGE allocated to the INVESTOR INTEREST.
INTERCHANGE paid to the servicer is limited to 1% of the INVESTOR INTEREST
less amounts on deposit in the PRINCIPAL FUNDING ACCOUNT. If there is not
enough INTERCHANGE to pay half of the SERVICING FEE, none of the trust, the
trustee nor the certificateholders will be responsible for paying the
servicer the amount of any shortfall. The portion of the servicing fee
allocable to the INVESTOR INTEREST - referred to in this supplement as the
INVESTOR SERVICING FEE - will equal one-twelfth of the product of:
o 2%; and
o the ADJUSTED INVESTOR INTEREST at the
end of the preceding MONTHLY PERIOD.
The servicer will pay expenses out of the servicing fee it
receives, including the fees and expenses of the trustee and independent
certified public accountants and other fees not stated to be paid by the
trust. CMB as the servicer will not be responsible for the payment of any
federal, state or local taxes on your certificates.
CERTIFICATEHOLDER REPORTS
You will receive a monthly report from the trustee as described in
the attached prospectus.
The report will also specify:
o amounts withdrawn from the PRINCIPAL
FUNDING ACCOUNT; and
o the COLLATERAL INTEREST, if any, for
such TRANSFER DATE.
So long as the certificates 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 certificates are issued, the monthly notice will be
mailed to your address as it appears on the trustee's register.
LISTING AND GENERAL INFORMATION
We have applied to the Luxembourg Stock Exchange to list the Class
A certificates and Class B certificates. In connection with the listing
application, the Organization Certificate and By-laws of the Bank, and
legal notice relating to the issuance of the Class A certificates and the
Class B certificates will be deposited before we list with the Chief
Registrar of the District Court of Luxembourg, where you may obtain copies
of those documents. The Class A certificates and the Class B certificates
have been accepted for clearance through the facilities of DTC, CEDELBANK
and EUROCLEAR.
The securities identification numbers for the certificates are
listed below:
<TABLE>
<CAPTION>
International
Securities
Identification
CUSIP Number Number (ISIN) Common Code
Class A certificates
Class B certificates
<S> <C> <C> <C>
</TABLE>
As of the date of this supplement, the trust is not involved in
any litigation or arbitration proceeding relating to claims that are
material in the context of the issuance of the certificates, nor so far as
Chase USA 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 trust since
___________, 199__ 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
__________, 199__ and by Chase USA's Asset and Loan Securitization
Committee as of ________, 199__.
Copies of the POOLING AND SERVICING AGREEMENT, the SERIES 1999-__
SUPPLEMENT, the annual report of independent certified public accountants
described in "Description of the Securities--Description of the
Certificates--Evidence as to Compliance" in the attached prospectus, the
documents referred to under "Where You Can Find More Information" and the
reports to certificateholders referred to under "Reports to
Securityholders" and "Description of the Securities--Description of the
Certificates--Reports to Certificateholders" in the attached prospectus
will be available free of charge at the office of the LISTING AGENT in
Luxembourg. Financial information regarding Chase USA is included in the
consolidated financial statements of The Chase Manhattan Corporation in The
Chase Manhattan Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998. 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 certificates, the POOLING AND SERVICING AGREEMENT and the
SERIES 1999-__ SUPPLEMENT are each governed by the laws of the State of New
York.
Although we have applied to list the certificates 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 certificates are listed on the
Luxembourg Stock Exchange.
This prospectus supplement and the attached prospectus have been
prepared by Chase USA solely for use in connection with the offering and
listing of the certificates described in this prospectus supplement. At the
request of the Luxembourg Stock Exchange, Chase USA 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 Chase USA accepts responsibility accordingly.
ERISA CONSIDERATIONS
ERISA and the tax code prohibit certain PLANS from engaging in
transactions involving the assets of a PLAN with "parties in interest"
under ERISA or "disqualified persons" under the tax code with respect to
the PLAN. A violation of these "prohibited transaction" rules may generate
excise tax and other liabilities under ERISA and the tax code for such
persons, unless a statutory, regulatory or administrative exemption is
available. PLANS that are governmental PLANS and some church PLANS, as
these PLANS are defined by ERISA, are not subject to ERISA requirements.
CLASS A CERTIFICATES
A violation of the fiduciary and prohibited transaction rules
could occur if the transferor, the trustee, any of the underwriters or any
of their affiliates were a party in interest or a disqualified person with
respect to a PLAN and the Class A certificates were purchased with assets
of that PLAN, unless there is a statutory, regulatory or administrative
exemption. The transferor, the trustee, any of the underwriters and their
affiliates are likely to be parties in interest or disqualified persons
with respect to many PLANS. Before purchasing the Class A certificates, a
PLAN fiduciary or other PLAN investor should consider whether a prohibited
transaction might arise by reason of the relationship between the PLAN and
the transferor, the trustee, any of the underwriters or any of their
affiliates and should consult their counsel regarding the purchase in light
of the fiduciary and prohibited transaction rules of ERISA and the tax code
and the considerations described below and in the attached prospectus.
Under certain circumstances, an ERISA regulation treats the assets
of an entity in which a PLAN holds an equity interest as "plan assets" of
such PLAN. Because the Class A certificates will represent beneficial
interests in the trust, and despite the agreement of the transferor and the
certificate owners to treat the Class A certificates as debt instruments
the Class A certificates are likely to be considered equity interests in
the trust for purposes of this regulation. Accordingly, the assets of the
trust are likely to be treated as "plan assets" of the investing PLANS for
purposes of ERISA and the tax code, unless the exception for
"publicly-offered securities" is applicable. This exception is described in
the attached prospectus. The underwriters anticipate that the Class A
certificates will meet the criteria for treatment as "publicly-offered
securities", as described in the attached prospectus, because:
o no restrictions will be imposed on the transfer of the
Class A certificates;
o it is expected that the Class A certificates will be held
by at least 100 or more investors who were independent of
the issuer and of one another at the conclusion of the
initial public offering although no assurance can be given,
and no monitoring or other measures will be taken to
ensure, that such condition is met; and
o the Class A certificates will be sold as part of an
offering pursuant to an effective registration statement
under the Securities Act and then will be timely registered
under the Exchange Act.
If the foregoing exception under the ERISA regulation was not
satisfied, transactions involving the trust and parties in
interest/disqualified persons with respect to a PLAN that purchases or
holds Class A certificates might be prohibited under ERISA and/or the tax
code and result in excise tax and other liabilities unless an exemption was
available, and any such exemption may not provide relief for all
transactions involving the assets of the trust even if it would otherwise
apply to the purchase of a Class A certificate by a PLAN.
CLASS B CERTIFICATES
The Class B underwriter currently does not expect that the Class B
certificates will be held by at least 100 independent investors and,
therefore, does not expect that the Class B certificates will qualify as
publicly-offered securities under the ERISA regulation referred to in the
preceding paragraph. Accordingly, the Class B certificates may not be
acquired or held by:
o any employee benefit PLAN that is subject to ERISA;
o any PLAN or other arrangement including an individual
retirement account or Keogh Plan, that is subject to the
tax code; or
o any entity whose underlying assets include "plan assets"
under the regulation because the PLAN invested in the
entity.
By its acceptance of a Class B certificate, each Class B
certificateholder will be deemed to have represented and warranted that it
is not and will not be subject to the foregoing limitation.
CONSULTATION WITH COUNSEL
PLAN fiduciaries or other persons contemplating purchasing the
certificates on behalf of or with the assets of any PLAN should consult
their own counsel concerning the consequences to the PLAN of an investment
in the certificates, including the consequences to the PLAN if the assets
of the trust were to become subject to the fiduciary and prohibited
transaction rules of ERISA and the tax code.
Finally, PLAN fiduciaries and other PLAN investors should consider
the fiduciary standards under ERISA or other applicable law in the context
of the PLAN'S particular circumstances before authorizing an investment of
a portion of the PLAN'S assets in the certificates. Accordingly, among
other factors, PLAN fiduciaries and other PLAN investors should consider
whether the investment:
o satisfies the diversification requirement of ERISA or other
applicable law;
o is in accordance with the PLAN's governing instruments; and
o is prudent in light of the risk factors and other factors
discussed in this prospectus supplement.
UNDERWRITING
Chase USA has agreed to sell to the underwriters listed below the
amount of certificates of each class set forth next to each underwriter's
name. Each underwriter has agreed to purchase that amount of those
certificates.
Class A Certificates Principal Amount
Chase Securities Inc. $
----------------
=============
Total $
================
Class B Certificates
Chase Securities Inc. $
----------------
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
certificates are as follows:
<TABLE>
<CAPTION>
Underwriting Selling
Price to discounts and concessions, Reallowance,
Public commissions not to exceed not to exceed
------------------- ------------------ -------------------- -------------------
<S> <C> <C> <C> <C>
Class A certificates ____% ____% ____% ____%
Class B certificates ____% ____% ____% ____%
</TABLE>
After the offering is completed, Chase USA will receive the
proceeds, after deduction of the underwriting and other expenses, listed
below:
<TABLE>
<CAPTION>
Proceeds to Transferor
(as % of the principal Underwriting
Proceeds to amount of the discounts and
Transferor certificates) concessions
---------------------- -------------------------- ----------------------
<S> <C> <C> <C>
Class A certificates $_______ ____% $_______
Class B certificates $_______ ____% $_______
</TABLE>
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 1999-__
certificates will be subject to certain conditions. The underwriters will
offer the Series 1999-__ certificates for sale only if the trust issues the
certificates, and all conditions to the issuance of the certificates are
satisfied or waived. The underwriters have agreed either to purchase all of
the Series 1999-__ certificates, or none of them.
The underwriters may reject any orders in whole or in part.
Chase Securities Inc. is a wholly-owned subsidiary of The Chase
Manhattan Corporation and an affiliate of Chase USA.
Each underwriter has represented and agreed that:
(a) it only issued or passed on and will only issue or pass on
in the United Kingdom any document received by it in
connection with the issue of the certificates to a person
who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 (as amended) or who is a person to
whom the document may otherwise lawfully be issued or
passed on,
(b) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 and other
applicable laws and resolutions with respect to anything
done by it in relation to the certificates in, from or
otherwise involving the United Kingdom, and
(c) if that underwriter is an authorized person under the
Financial Services Act 1986, it has only promoted and will
only promote (as that term is defined in Regulation 1.02 of
the Financial Services (Promotion of Unregulated Schemes)
Regulations 1991) to any person in the United Kingdom the
scheme described in this prospectus supplement if that
person is of a kind described either in Section 76(2) of
the Financial Services Act 1986 or in Regulation 1.04 of
the Financial Services (Promotion of Unregulated Schemes)
Regulations 1991.
This prospectus supplement and the attached prospectus may be used
by Chase Securities Inc. in connection with offers and sales related to
market-making transactions in the certificates. Chase 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. Chase
Securities Inc. has no obligation to make a market in the certificates and
any such market-making may be discontinued at any time without notice, in
its sole discretion. Chase Securities Inc. is among the underwriters
participating in the initial distribution of the certificates.
OTHER SERIES ISSUED AND OUTSTANDING
The table below discusses the principal characteristics of the
twenty other series of certificates previously issued by the trust and
currently outstanding. For more specific information with respect to any
series, any prospective investor should contact The Chase Manhattan Bank at
(212) 270-6000. The Chase Manhattan Bank will provide, without charge, to
any prospective investor, a copy of the disclosure documents for any other
publicly issued series.
<TABLE>
<CAPTION>
SERIES 1995-2
<S> <C>
1. Class A Certificates
Initial Investor Interest.................................................................$600,000,000
Certificate Rate................................................................................ 6.23%
Controlled Accumulation Amount (subject to adjustment).....................................$50,000,000
Commencement of Controlled Accumulation Period
(subject to adjustment).........................................................September 30, 1999
Annual Servicing Fee Percentage...................................................................2.0%
Initial Collateral Interest.............................................................$47,728,181.82
Other Enhancement............................................... Subordination of Class B Certificates
Scheduled Payment Date................................................................October 15, 2000
Series 1995-2 Termination Date...........................................................June 15, 2003
Series Issuance Date..................................................................October 19, 1995
2. Class B Certificates
Initial Investor Interest..................................................................$34,090,000
Certificate Rate................................................................................ 6.38%
Annual Servicing Fee Percentage...................................................................2.0%
Initial Collateral Interest.....................................Same as above for Class A Certificates
Scheduled Payment Date...............................................................November 15, 2000
Series 1995-2 Termination Date..................................Same as above for Class A Certificates
Series Issuance Date............................................Same as above for Class A Certificates
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)...................July 31, 2001
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)...........................................................October 31, 2001
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 1996-1
1. Class A Certificates
Initial Investor Interest.................................................................$700,000,000
Certificate Rate................................................................................ 5.55%
Controlled Accumulation Amount (subject to adjustment)..................................$58,333,333.33
Commencement of Controlled Accumulation Period
(subject to adjustment)..........................................................December 31, 1999
Annual Servicing Fee Percentage ..................................................................2.0%
Initial Collateral Interest.............................................................$55,682,545.45
Other Enhancement................................................Subordination of Class B Certificates
Scheduled Payment Date................................................................January 15, 2001
Series 1996-1 Termination Date......................................................September 15, 2003
Series Issuance Date..................................................................January 23, 1996
2. Class B Certificates
Initial Investor Interest..................................................................$39,772,000
Certificate Rate................................................................................ 5.71%
Annual Servicing Fee Percentage...................................................................2.0%
Initial Collateral Interest.....................................Same as above for Class A Certificates
Scheduled Payment Date...............................................................February 15, 2001
Series 1996-1 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...............................................................$1,150,000,000
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 1997-2
1. Class A Certificates
Initial Investor Interest...............................................................$1,500,000,000
Certificate Rate................................................................................ 6.30%
Controlled Accumulation Amount (subject to adjustment)....................................$125,000,000
Commencement of Controlled Accumulation Period (subject to adjustment)...................July 31, 1999
Annual Servicing Fee Percentage...................................................................2.0%
Initial Collateral Interest...............................................................$119,318,455
Other Enhancement............................................... Subordination of Class B Certificates
Scheduled Payment Date.................................................................August 15, 2000
Series 1997-2 Termination Date..........................................................April 15, 2003
Series Issuance Date...................................................................August 18, 1997
2. Class B Certificates
Initial Investor Interest..................................................................$85,227,000
Certificate Rate................................................................................ 6.45%
Annual Servicing Fee Percentage...................................................................2.0%
Initial Collateral Interest.................................... Same as above for Class A Certificates
Scheduled Payment Date..............................................................September 15, 2000
Series 1997-2 Termination Date..................................Same as above for Class A Certificates
Series Issuance Date............................................Same as above for Class A Certificates
SERIES 1997-3
1. Class A Certificates
Initial Investor Interest.................................................................$250,000,000
Certificate Rate............................................................................... 6.777%
Controlled Accumulation Amount
(subject to adjustment)....................................One-twelfth of outstanding balance of
Class A Certificates on August 1, 2003
Commencement of Controlled Accumulation Period
(subject to adjustment)............................................................August 31, 2003
Annual Servicing Fee Percentage...................................................................2.0%
Initial Collateral Interest................................................................$26,786,048
Other Enhancement................................................Subordination of Class B Certificates
Scheduled Payment Date..............................................................September 15, 2004
Series 1997-3 Termination Date............................................................May 15, 2007
Series Issuance Date................................................................September 22, 1997
2. Class B Certificates
Initial Investor Interest..................................................................$20,833,000
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................................................................October 15, 2004
Series 1997-3 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)..........................................................November 30, 2001
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)..........................................................November 30, 2001
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-1 Certificates
Initial Investor Interest.................................................................$273,822,563
Certificate Rate..............................................................One Month LIBOR + 0.231%
Controlled Accumulation Amount (subject to adjustment).....................................$22,818,547
Commencement of Controlled Accumulation Period
(subject to adjustment)...........................................................January 31, 2004
Annual Servicing Fee Percentage...................................................................2.0%
Enhancement......................Subordination of Class B Certificates and Initial Collateral Interest
Scheduled Payment Date...............................................................February 15, 2005
Series 1998-1 Termination Date........................................................October 15, 2007
Series Issuance Date.................................................................February 12, 1998
Class A-2 Certificates
Initial Investor Interest.................................................................$245,278,391
Certificate Rate.............................................................One Month LIBOR + 0.1885%
Controlled Accumulation Amount (subject to adjustment).................................... $20,439,866
Commencement of Controlled Accumulation Period
(subject to adjustment)...........................................................January 31, 2004
Annual Servicing Fee Percentage...................................................................2.0%
Enhancement......................Subordination of Class B Certificates and Initial Collateral Interest
Scheduled Payment Date...............................................................February 15, 2005
Series 1998-1 Termination Date........................................................October 15, 2007
Series Issuance Date.................................................................February 12, 1998
Class A-3 Certificates
Initial Investor Interest.................................................................$243,131,534
Certificate Rate.............................................................One Month LIBOR + 0.2445%
Controlled Accumulation Amount (subject to adjustment).....................................$20,260,961
Commencement of Controlled Accumulation Period
(subject to adjustment)...........................................................January 31, 2004
Annual Servicing Fee Percentage...................................................................2.0%
Enhancement......................Subordination of Class B Certificates and Initial Collateral Interest
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................................................................$81,668,141
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 1998-2
1. Class A Certificates
Initial Investor Interest.................................................................$800,000,000
Certificate Rate............................................................Federal Funds Rate + 0.24%
Controlled Accumulation Amount (subject to adjustment).....................................$66,666,667
Commencement of Controlled Accumulation Period
(subject to adjustment)...........................................................January 31, 2000
Annual Servicing Fee Percentage...................................................................2.0%
Initial Collateral Interest................................................................$85,714,953
Other Enhancement................................................Subordination of Class B Certificates
Scheduled Payment Date...............................................................February 15, 2001
Series 1998-2 Termination Date.......................................................February 15, 2003
Series Issuance Date.....................................................................March 9, 1998
2. Class B Certificates
Initial Investor Interest..................................................................$66,666,000
Certificate Rate.............................................................. One Month LIBOR + 0.25%
Annual Servicing Fee Percentage...................................................................2.0%
Initial Collateral Interest.................................... Same as above for Class A Certificates
Scheduled Payment Date..................................................................March 15, 2003
Series 1998-2 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)..................April 30, 2001
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, 2001
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)....................May 31, 2001
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
</TABLE>
GLOSSARY OF TERMS FOR PROSPECTUS SUPPLEMENT
"ADJUSTED INVESTOR INTEREST" means,
o the Investor Interest minus
o the amount on deposit in the Principal Funding Account.
"AVAILABLE INVESTOR PRINCIPAL COLLECTIONS" means, for any Monthly
Period, the sum of:
o collections of Principal Receivables received during that
Monthly Period and other amounts allocable to the Investor
Interest, plus
o any Shared Principal Collections from other series that
are allocated to Series 1999- __, minus
o the amount of Reallocated Principal Collections used to
fund the Class A Required Amount and the Class B Required
Amount.
"AVAILABLE RESERVE ACCOUNT AMOUNT" means for any Transfer Date, an
amount equal to the lesser of the amount on deposit in the Reserve Account
and the Required Reserve Account Amount on that Transfer Date available to
be withdrawn from the Reserve Account.
"BASE RATE" means, for any Monthly Period, the annualized percentage
equivalent of a fraction:
o the numerator of which is the sum of
- the Class A Monthly Interest,
- the Class B Monthly Interest,
- the Collateral Monthly Interest, and
- the Investor Servicing Fee 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.
"CLASS A ADDITIONAL INTEREST" means an amount equal to the product of:
o a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of
which is 360, times
o the sum of the Class A Certificate Rate in effect for that
Interest Period, plus 2% per annum, and
o any overdue Class A interest from any prior Distribution Date.
"CLASS A ADJUSTED INVESTOR INTEREST" means, an amount equal to:
o the Class A Investor Interest, minus
o the amount on deposit in the Principal Funding Account.
"CLASS A AVAILABLE FUNDS" means, for any Monthly Period, an amount
equal to the sum of:
o the Class A Floating Allocation of collections of Finance
Charge Receivables allocated to the Investor Interest -
excluding the portion of collections of Finance Charge
Receivables attributable to Servicer Interchange,
o Principal Funding Investment Proceeds, if any, for the
related Transfer Date, and
o amounts, if any, to be withdrawn from the Reserve Account
that are required to be included in Class A Available
Funds.
"CLASS A CERTIFICATE RATE" means a rate of ____% per annum above
LIBOR calculated on the related LIBOR Determination Date for each Interest
Period.
"CLASS A FIXED ALLOCATION" means, for any Monthly Period after the
Revolving Period, the percentage equivalent of a fraction:
o the numerator of which is the Class A Investor Interest as
of the close of business on the last day of the Revolving
Period, and
o the denominator of which is equal to the Investor Interest
as of the close of business on the last day of the
Revolving Period.
"CLASS A FLOATING ALLOCATION" means, for any Monthly Period, the
percentage equivalent of a fraction:
o the numerator of which is the Class A Adjusted Investor
Interest as of the close of business on the last day of
the preceding Monthly Period, and
o the denominator of which is equal to the Adjusted Investor
Interest as of the close of business on that day.
"CLASS A INITIAL INVESTOR INTEREST" means $_____.
"CLASS A INVESTOR CHARGE-OFF" means, for any Monthly Period, the
amount by which the Class A Investor Interest is reduced after the
Collateral Interest and the Class B Investor Interest have been reduced to
zero due to the allocation of the Investor Default Amount.
"CLASS A INVESTOR DEFAULT AMOUNT" means a portion of the Investor
Default Amount that is allocated to the Class A certificateholders on each
Transfer Date in an amount equal to the product of:
o the Class A Floating Allocation applicable during the
related Monthly Period and
o the Investor Default Amount for that Monthly Period.
"CLASS A INVESTOR INTEREST" means, for any date, an amount equal to:
o the Class A Initial Investor Interest, minus
o the aggregate amount of principal payments made to Class A
certificateholders before that date, minus
o the excess, if any, of the aggregate amount of Class A
Investor Charge-Offs for all preceding Transfer Dates over
the amount of any reimbursements of Class A Investor
Charge-Offs for all preceding Transfer Dates.
"CLASS A MONTHLY INTEREST" means, for any Distribution Date, an
amount equal to the product of:
o the Class A Certificate Rate for the related Interest Period,
o the actual number of days in that Interest Period divided
by 360 and
o the principal balance of the Class A certificates on the
related Record Date.
"CLASS A MONTHLY PRINCIPAL" means, with respect to any Transfer
Date during to the Controlled Accumulation Period or the Rapid Amortization
Period, an amount equal to the least of:
o the Available Investor Principal Collections on deposit in
the Principal Account,
o for each Transfer Date during the Controlled Accumulation
Period, prior to the payment in full of the Class A
Investor Interest, and on or prior to the Class A
Scheduled Payment Date, the applicable Controlled Deposit
Amount for that Transfer Date and
o the Class A Adjusted Investor Interest prior to any
deposits on that Transfer Date.
"CLASS A REQUIRED AMOUNT" shall equal the amount, if any, by which
the sum of:
o Class A Monthly Interest and overdue Class A Monthly
Interest and Class A Additional Interest,
o the Class A Servicing Fee and any overdue Class A
Servicing Fee, and
o the Class A Investor Default Amount exceeds the Class A
Available Funds for the related Monthly Period.
"CLASS A SCHEDULED PAYMENT DATE" means the ________ Distribution Date.
"CLASS A SERVICING FEE" means the share of the Investor Servicing
Fee allocable to the Class A Investor Interest equal to one-twelfth of the
product of:
o the Class A Floating Allocation,
o the Net Servicing Fee Rate and
o the Adjusted Investor Interest.
"CLASS B ADDITIONAL INTEREST" means an amount equal to the product of:
o a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of
which is 360, times
o the sum of the Class B Certificate Rate for that Interest
Period, plus 2% per annum, and
o any overdue Class B interest from any prior Transfer Date.
"CLASS B AVAILABLE FUNDS" means, with respect to any Monthly Period,
the Class B Floating Allocation of
o collections of Finance Charge Receivables allocated to the
Investor Interest minus
o the portion of collections of Finance Charge Receivables
attributable to Servicer Interchange.
"CLASS B CERTIFICATE RATE" means a rate of ____% per annum above
LIBOR calculated on the related LIBOR Determination Date with respect to
each Interest Period.
"CLASS B FIXED ALLOCATION" means, for any Monthly Period after the
Revolving Period, the percentage equivalent of a fraction:
o the numerator of which is equal to the Class B Investor
Interest at the close of business on the last day of the
Revolving Period, and
o the denominator of which is equal to the Investor Interest
at the close of business on the last day of the Revolving
Period.
"CLASS B FLOATING ALLOCATION" means, for any Monthly Period, the
percentage equivalent of a fraction:
o the numerator of which is the Class B Investor Interest at
the close of business on the last day of the preceding
Monthly Period, and
o the denominator of which is equal to the Adjusted Investor
Interest as of the close of business on that day.
"CLASS B INITIAL INVESTOR INTEREST" means $___________.
"CLASS B INVESTOR CHARGE-OFF" means, for any Monthly Period, the
amount by which the Class B Investor Interest is reduced if the Collateral
Interest is reduced to zero due to the allocation of the Investor Default
Amount and Reallocated Principal Collections.
"CLASS B INVESTOR DEFAULT AMOUNT" means a portion of the Investor
Default Amount that is allocated to the Class B certificateholders on each
Transfer Date in an amount equal to the product of:
o the Class B Floating Allocation applicable during the
related Monthly Period and
o the Investor Default Amount for that Monthly Period.
"CLASS B INVESTOR INTEREST" means, for any date, an amount equal to:
o the Class B Initial Investor Interest, minus
o the aggregate amount of principal payments made to Class B
certificateholders before that date, minus
o the aggregate amount of Class B Investor Charge-Offs for
all prior Transfer Dates, minus
o the aggregate amount of Reallocated Class B Principal
Collections for all prior Transfer Dates for which the
Collateral Interest has not been reduced, minus
o an amount equal to the aggregate amount by which the Class
B Investor Interest has been reduced to fund the Class A
Investor Default Amount on all prior Transfer Dates and
plus
o the aggregate amount of Excess Spread allocated and
available on all prior Transfer Dates for the purpose of
reimbursing amounts deducted pursuant to the preceding
three bullet items.
"CLASS B MONTHLY INTEREST" means, for any Distribution Date, an
amount equal to the product of:
o the Class B Certificate Rate for the related Interest Period,
o the actual number of days in that Interest Period divided
by 360 and
o the outstanding principal balance of the Class B
certificates on the related Record Date.
"CLASS B MONTHLY PRINCIPAL" means, with respect to any Transfer
Date during the Controlled Accumulation Period or the Rapid Amortization
Period, after the Class A certificates have been paid in full, an amount
equal to the lesser of:
o the Available Investor Principal Collections on deposit in
the Principal Account with respect to that Transfer Date
minus the portion of Available Investor Principal
Collections applied to Class A Monthly Principal on such
Transfer Date and
o the Class B Investor Interest for that Transfer Date.
"CLASS B REQUIRED AMOUNT" shall equal the sum of:
o the amount, if any, by which the sum of
- Class B Monthly Interest and overdue Class B Monthly
Interest and Class B Additional Interest thereon, and
- the Class B Servicing Fee and any overdue Class B
Servicing Fee
exceeds the Class B Available Funds for the related Monthly Period; and
o the Class B Investor Default Amount, if any, for the
related Monthly Period.
"CLASS B SCHEDULED PAYMENT DATE" means the ________ Distribution Date.
"CLASS B SERVICING FEE" means the share of the Investor Servicing
Fee allocable to the Class B Investor Interest equal to one-twelfth of the
product of:
o the Class B Floating Allocation,
o the Net Servicing Fee Rate, and
o the Adjusted Investor Interest.
"CLOSING DATE" means the date of issuance of the series.
"COLLATERAL AVAILABLE FUNDS" means, with respect to any Monthly
Period, the Collateral Floating Allocation of:
o collections of Finance Charge Receivables allocated to the
Investor Interest, minus
o the portion of collections of Finance Charge Receivables
attributable to Interchange that is allocable to Servicer
Interchange.
"COLLATERAL CHARGE-OFF" means the amount by which the Collateral
Interest is reduced due to the allocation of the Investor Default Amount
and Reallocated Principal Collections.
"COLLATERAL DEFAULT AMOUNT" means a portion of the Investor
Default Amount that is allocated to the Collateral Interest on each
Transfer Date in an amount equal to the product of:
o the Investor Default Amount for the related Monthly Period and
o the Collateral Floating Allocation for that Monthly Period.
"COLLATERAL FIXED ALLOCATION" means, for any Monthly Period after
the Revolving Period, the percentage equivalent of a fraction:
o the numerator of which is equal to the Collateral Interest
as of the close of business on the last day of the
Revolving Period, and
o the denominator of which is equal to the Investor Interest
as of the close of business on the last day of the
Revolving Period.
"COLLATERAL FLOATING ALLOCATION" means, for any Monthly Period, the
percentage equivalent of a fraction:
o the numerator of which is equal to the Collateral Interest
as of the close of business on the last day of the
preceding Monthly Period and
o the denominator of which is equal to the Adjusted Investor
Interest as of the close of business on that day.
"COLLATERAL INTEREST" means, for any date, an amount equal to:
o the Initial Collateral Interest, minus
o the aggregate amount of principal payments made to the
Collateral Interest holder prior to that date, minus
o the aggregate amount of Collateral Charge-Offs for all
prior Transfer Dates, minus
o the aggregate amount of Reallocated Principal Collections
for all prior Transfer Dates, minus
o an amount equal to the aggregate amount by which the
Collateral Interest has been reduced to fund the Class A
Investor Default Amount and the Class B Investor Default
Amount on all prior Transfer Dates plus
o the aggregate amount of Excess Spread allocated and
available on all prior Transfer Dates for the purpose of
reimbursing amounts deducted according to the three
preceding bullets.
"COLLATERAL INTEREST SERVICING FEE" means the share of the
Investor Servicing Fee allocable to the Collateral Interest holder equal to
one-twelfth of the product of:
o the Collateral Floating Allocation,
o the Net Servicing Fee Rate, and
o the Adjusted Investor Interest.
"COLLATERAL MONTHLY INTEREST" means, for any Transfer Date, an amount
equal the product of:
o the Collateral Rate, provided, however, that for purposes
of calculating the Base Rate for that Transfer Date, the
Collateral Rate will be equal to the lesser of
- the interest rate designated in the Loan Agreement and
- LIBOR plus 1.5% per annum,
o the actual number of days in the related Interest Period
divided by 360 and
o the Collateral Interest as of the related Record Date or,
with respect to the first Transfer Date, the Initial
Collateral Interest.
"COLLATERAL MONTHLY PRINCIPAL" means:
o for any Transfer Date during the Revolving Period
following any reduction of the Required Collateral
Interest, an amount equal to the lesser of
- the excess, if any, of the Collateral Interest over the
Required Collateral Interest on such Transfer Date, and
- the Available Investor Principal Collections on that
Transfer Date or
o for any Transfer Date during the Controlled Accumulation
Period or Rapid Amortization Period, an amount equal to
the lesser of
- the excess, if any, of the Collateral Interest over the
Required Collateral Interest on such Transfer Date, and
- the excess, if any, of
o the Available Investor Principal Collections on
such Transfer Date over
o the sum of the Class A Monthly Principal and the
Class B Monthly Principal for such Transfer Date.
"COLLATERAL RATE" means an amount equal to the interest rate with
respect to the Collateral Interest designated in the Loan Agreement.
"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, unless a Pay Out Event has
occurred, the period commencing at the close of business after the
Revolving Period and ending on the first to occur of:
o the commencement of the Rapid Amortization Period or
o the Series 1999-[ ] Termination 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 Class A
certificateholders on the Class A 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 Distribution Date.
"DEFAULT AMOUNT" means the Receivables in Defaulted Accounts for any
Monthly Period.
"DETERMINATION DATE" means the fourth business day preceding each
Transfer Date.
"DISTRIBUTION DATE" means the 15th day of each month, or if the 15th
day is not a business day, the next business day.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"EUROCLEAR" means the Euroclear System which is operated by Morgan
Guaranty Trust Company of New York's Brussels, Belgium office.
"EXCESS FINANCE CHARGE COLLECTIONS" means those finance charge
collections described under "Description of the Certificates--Shared Excess
Finance Charge Collections" in this supplement.
"EXCESS SPREAD" means, for each Transfer Date, the sum of the amounts
remaining after:
o application of the Class A Available Funds to the Class A
Required Amount,
o application of the Class B Available Funds to interest
payments and the portion of the servicing fee allocated to
Class B and
o application of Collateral Available Funds to the payment
of the Collateral Interest Servicing Fee, if any, plus the
amount of any overdue Collateral Interest Servicing Fee if
CMB or any affiliate or The Bank of New York is not the
servicer.
"FIXED INVESTOR PERCENTAGE" means the Investor Percentage
described under "Description of Certificates--Allocation Percentages" in
this supplement.
"FLOATING INVESTOR PERCENTAGE" means the Investor Percentage
described under "Description of the Certificates--Allocation Percentages"
in this supplement.
"GROUP I" means the group of series under the trust to which the
Series 1999-__ certificates belong.
"INITIAL COLLATERAL INTEREST" means $__________.
"INITIAL INVESTOR INTEREST" means $_______.
"INTEREST PERIOD" means, in relation to any Distribution Date, the
period from the previous Distribution Date through the day before that
Distribution Date.
"INVESTOR DEFAULT AMOUNT" means the product of:
o the Default Amount and
o the Floating Investor Percentage.
"INVESTOR INTEREST" means, the sum of the Class A Investor
Interest, the Class B Investor Interest and the Collateral Interest.
"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.
"LIBOR" means as of any LIBOR Determination Date, the rate for
deposits in United States dollars for a period equal to the relevant
Interest Period which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on that date. If that rate does not appear on Telerate Page
3750, "LIBOR" will be determined on the basis of the rates at which
deposits in United States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on that day to prime banks in the
London interbank market for a period equal to the relevant Interest Period.
"LIBOR DETERMINATION DATE" means:
o _____, 1999 for the period from the Closing Date through
_____, 1999, and
o for any other Interest Period, the second business day
before the Distribution Date on which that Interest Period
begins.
"LISTING AGENT" means the Banque Generale du Luxembourg, S.A.
"LOAN AGREEMENT" means the loan agreement among the trustee, Chase
USA, the servicer and the Collateral Interest holder.
"MONTHLY INTEREST" means interest accrued for a specific month for
the Series 1999-[ ], any class of certificates or the Collateral Interest.
"MONTHLY PERIOD" means a calendar month, except that the first
Monthly Period for Series 1999-[ ]:
o begins on the Closing Date for Series 1999-[ ] and
o ends on the last day of the calendar month before the month
in which the first Distribution Date occurs for Series
1999-[ ].
"NET SERVICING FEE RATE" means 1.0% per annum.
"PAY OUT EVENT" means any of the events described under
"Description of the Certificates--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,
- investment earnings on amounts in the Principal Funding
Account, 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 and
o the denominator of which is the Investor Interest.
"PRINCIPAL ACCOUNT" means an account held for the benefit of the
certificateholders in which the servicer will deposit collections of
Principal Receivables allocated to the certificateholders.
"PRINCIPAL FUNDING ACCOUNT" means an Eligible Deposit Account held
for the benefit of the Class A certificateholders in which collections of
Principal Receivables allocated to the Class A certificateholders
are accumulated.
"PRINCIPAL FUNDING INVESTMENT PROCEEDS" means, for each Transfer Date:
o the investment earnings on funds in the Principal Funding
Account minus
o investment expenses and losses
for the period from and including the immediately preceding Transfer Date
to but excluding that Transfer Date.
"REALLOCATED CLASS B PRINCIPAL COLLECTIONS" means, for any Monthly
Period, collections of Principal Receivables allocable to the Class B
Investor Interest for that Monthly Period in an amount not to
exceed the greater of:
o the amount applied to fund the Class A Required Amount,
if any, and
o the Class B Investor Interest after giving effect to any
Class B Investor Charge-Offs for the related Transfer
Date.
"REALLOCATED COLLATERAL PRINCIPAL COLLECTIONS" means, for any
Monthly Period, collections of Principal Receivables allocable to the
Collateral Interest for that Monthly Period in an amount not to exceed
the greater of:
o the amount applied to fund the Class A Required Amount and
the Class B Required Amount, and
o the Collateral Interest after giving effect to any
Collateral Charge-Offs for the related Transfer Date.
"REALLOCATED PRINCIPAL COLLECTIONS" means the sum of all Reallocated
Class B Principal Collections and Reallocated Collateral Principal Collections.
"RECORD DATE" means the last business day of the calendar month
preceding a Distribution Date which is the day on which a certificateholder
must be the registered holder of a certificate to receive a payment on that
Distribution Date.
"REFERENCE BANKS" means four major banks in the London interbank
market selected by the servicer.
"REQUIRED COLLATERAL INTEREST" means for any Transfer Date, 9% of the
sum of:
o the Class A Adjusted Investor Interest,
o the Class B Investor Interest, and
o the Collateral Interest
after taking into account deposits into the Principal Funding Account on
that Transfer Date and payments to be made on the related Distribution
Date, and the Collateral Interest on the prior Transfer Date after any
adjustments made on such Transfer Date, but not less than $__________;
provided, however,
o that if certain reductions in the Collateral Interest are
made or if a Pay Out Event occurs, the Required Collateral
Interest for such Transfer Date will equal the Required
Collateral Interest for the Transfer Date immediately
preceding the occurrence of the reduction or Pay Out
Event,
o in no event will the Required Collateral Interest exceed
the unpaid principal amount of the certificates as of the
last day of the Monthly Period preceding the Transfer Date
after taking into account payments to be made on the
related Distribution Date and
o the Required Collateral Interest may be reduced to a
lesser amount at any time if the Rating Agency Condition
is satisfied.
"REQUIRED RESERVE ACCOUNT AMOUNT" means for any Transfer Date on
or after the Reserve Account Funding Date an amount equal to:
o 0.50% of the outstanding principal balance of the Class A
certificates or
o any other amount designated by Chase USA;
provided, that if Chase USA designates a lesser amount, Chase USA will
provide the servicer, the Collateral Interest holder and the trustee with
evidence that the Rating Agency Condition has been satisfied and will
certify that the designation will not cause a Pay Out Event.
"RESERVE ACCOUNT" means an Eligible Deposit Account in which the
servicer will deposit the Required Reserve Account Amount on or after the
Reserve Account Funding Date to cover shortfalls in investment earnings on
the Principal Funding Account.
"RESERVE ACCOUNT FUNDING DATE" means the Transfer Date for the
Monthly Period which begins no later than three months before the
Controlled Accumulation Period starts, or an earlier date designated by
the servicer.
"REVOLVING PERIOD" means the period that begins on the Closing
Date and ends at the commencement of the Controlled Accumulation Period or,
if earlier, the Rapid Amortization Period.
"SERIES 1999-_ TERMINATION DATE" means the earliest to occur of :
o the Distribution Date on which the Investor Interest
is paid in full,
o the ______ Distribution Date and
o the Trust Termination Date.
"SERIES 1999-__ SUPPLEMENT" means the supplement to the Pooling
and Servicing Agreement relating to the Series 1999-__ certificates.
"SERVICER INTERCHANGE" means, for any Monthly Period, an amount
equal to Finance Charge Receivables allocated to the Investor Interest for
that Monthly Period which are attributable to Interchange
but not in excess of one-twelfth of the product of:
o the Adjusted Investor Interest, as of the last day
of that Monthly Period; and
o 1.0%.
"SERVICING FEE" means the fee the servicer will receive as
servicing compensation from the trust.
"SHARED PRINCIPAL COLLECTIONS" means those principal collections
described under "Description of the Certificates--Shared Principal
Collections" in this supplement.
"TELERATE PAGE 3750" means the display page on the Dow Jones
Telerate Service with that number - or any other page that replaces that
page on that service.
"TRANSFER DATE" means the business day immediately prior to a
Distribution Date.
PRINCIPAL OFFICE OF
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
802 Delaware Avenue
Wilmington, Delaware 19801
TRUSTEE
The Bank of New York
101 Barclay Street
New York, New York 10286
PAYING AGENT AND TRANSFER AGENT
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10036
LISTING AND INTERMEDIARY AGENT
Banque Generale du Luxembourg, S.A.
50 Avenue J.F. Kennedy
L-2951 Luxembourg
LEGAL ADVISOR TO THE TRANSFEROR
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
919 Third Avenue
New York, New York 10022
INDEPENDENT ACCOUNTANTS TO THE TRANSFEROR
PriceWaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
PROSPECTUS SUPPLEMENT
CHASE CREDIT
CARD MASTER TRUST
ISSUER
SERIES 1999-[ ]
$[ ]
CLASS A FLOATING RATE
ASSET BACKED CERTIFICATES
$[ ]
CLASS B FLOATING RATE
ASSET BACKED CERTIFICATES
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION
TRANSFEROR
THE CHASE MANHATTAN BANK
SERVICER
CHASE SECURITIES INC.
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 CERTIFICATES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED.
DEALERS WILL DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS
UNDERWRITERS OF THESE CERTIFICATES AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS. IN ADDITION, ALL DEALERS SELLING THESE
CERTIFICATES WILL DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS UNTIL
[ ], 1999.
[FLAG]
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.
SUBJECT TO COMPLETION, DATED SEPTEMBER 3, 1999
PROSPECTUS SUPPLEMENT TO PROSPECTUS, DATED ____, 1999
CHASE CREDIT CARD OWNER TRUST 1999-__ Issuer
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, Transferor and Administrator
THE CHASE MANHATTAN BANK, Servicer of Chase Credit Card Master Trust
$_________ CLASS A FLOATING RATE ASSET BACKED NOTES, SERIES 1999-__
$_________ CLASS B FLOATING RATE ASSET BACKED NOTES, SERIES 1999-__
$_________ CLASS C FLOATING RATE ASSET BACKED NOTES, SERIES 1999-__
<TABLE>
<S> <C> <C> <C>
Class A Class B Class C
Principal Amount $_______________ $_______________ $_______________
Price $________ (___%) $________ (___%) $________ (___%)
Underwriters' Commissions $________ (___%) $________ (___%) $________ (___%)
Proceeds to the Issuer $________ (___%) $________ (___%) $________ (___%)
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 ____________, 1999 _____________, 1999 _____________, 1999
Note Maturity Date ____________, ___ _____________, ____ _____________, ____
</TABLE>
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 1999-__,
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 MANHATTAN BANK USA, N.A., THE CHASE
MANHATTAN 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-15 OF THIS PROSPECTUS SUPPLEMENT.
WE HAVE APPLIED TO HAVE THE SECURITIES LISTED ON THE LUXEMBOURG STOCK
EXCHANGE.
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.
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
CHASE SECURITIES INC.
Underwriters of the Class B Notes
CHASE SECURITIES INC.
Underwriters of the Class C Notes
CHASE SECURITIES INC.
The date of this Prospectus Supplement is ______, 1999.
TABLE OF CONTENTS
WHERE TO FIND INFORMATION IN THESE DOCUMENTS.........................S-4
SUMMARY OF TERMS.....................................................S-6
STRUCTURAL SUMMARY...................................................S-8
SELECTED MASTER TRUST PORTFOLIO SUMMARY DATA........................S-13
RISK FACTORS........................................................S-15
You May Receive Principal Payments Earlier or Later than
the Scheduled Maturity Date if the Portfolio Yield is
Reduced.......................................................S-15
Allocations of Charged-off Receivables Could Reduce
Payments to You...............................................S-17
Issuance of Additional Series by the Master Trust May
Affect the Timing of Payments to You..........................S-18
Chase USA May Add Accounts With Different Terms to
the Master Trust Portfolio ...................................S-18
Chase USA May Not be Able to Add New Accounts When
Required Under the Pooling and Servicing Agreement............S-19
Insolvency or Bankruptcy of Chase USA Could Result in
Accelerated, Delayed or Reduced Payments to You...............S-19
You Will Have Limited Control of Owner Trust and Master
Trust Actions.................................................S-21
You May Not Be Able to Resell Your Notes.........................S-21
Repayment of Your Notes is Limited to the Owner Trust
Assets........................................................S-21
Class B and Class C Bear Losses Before Class A...................S-21
CHASE CREDIT CARD MASTER TRUST PORTFOLIO............................S-23
General..........................................................S-23
Delinquency and Loss Experience..................................S-23
Characteristics of Receivables Portfolio.........................S-24
MATURITY CONSIDERATIONS.............................................S-28
Controlled Accumulation..........................................S-28
Rapid Amortization Period........................................S-29
Historical Payment Rates.........................................S-29
RECEIVABLE YIELD CONSIDERATIONS.....................................S-30
CREATION OF THE OWNER TRUST.........................................S-31
USE OF PROCEEDS.....................................................S-31
DESCRIPTION OF THE SECURITIES.......................................S-32
Description of the Series Certificate............................S-32
General..........................................................S-32
Interest Allocations.............................................S-33
Principal Allocations............................................S-33
Controlled Accumulation..........................................S-34
Allocation Percentages...........................................S-34
Reallocation of Cash Flows.......................................S-35
Application of Collections.......................................S-35
Shared Excess Finance Charge Collections.........................S-40
Shared Principal Collections.....................................S-40
Defaulted Receivables............................................S-40
Principal Funding Account........................................S-41
Accumulation Period Reserve Account..............................S-41
Pay Out Events...................................................S-42
Servicing Fees and Expenses......................................S-45
DESCRIPTION OF THE NOTES............................................S-45
General..........................................................S-45
Subordination....................................................S-46
Interest Payments................................................S-46
Principal Payments...............................................S-47
Optional Redemption..............................................S-48
Distributions....................................................S-48
Owner Trust Spread Account.......................................S-49
Events of Default................................................S-50
Noteholder Reports...............................................S-51
LISTING AND GENERAL INFORMATION.....................................S-51
UNDERWRITING........................................................S-53
OTHER SERIES ISSUED AND OUTSTANDING.................................S-55
GLOSSARY OF TERMS FOR PROSPECTUS SUPPLEMENT.........................S-66
WHERE TO FIND INFORMATION IN THESE DOCUMENTS
The attached prospectus provides general information about Chase
Credit Card Owner Trust 1999-__ 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 1999-___ 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
Chase Securities Inc., an affiliate of Chase Manhattan Bank USA, N.A. and
of The Chase Manhattan Bank and a subsidiary of The Chase Manhattan
Corporation, in connection with offers and sales related to market-making
transactions in the notes offered by this supplement and the attached
prospectus. Chase 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 AND TERMS OF THESE SECURITIES, YOU MUST READ
CAREFULLY THE ATTACHED PROSPECTUS AND THIS SUPPLEMENT IN THEIR ENTIRETY.
SUMMARY OF TERMS
Seller and Administrator: Chase Manhattan Bank USA, National
Association - "Chase USA"
Issuer: Chase Credit Card Owner Trust 1999-__
Indenture Trustee:
Owner Trustee:
Pricing Date: _________, ____
Closing Date: _________, ____
Clearance and Settlement: DTC/Cedelbank/Euroclear
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. The series
certificate will be rated in one of the four
highest rating categories by at least one
nationally recognized rating agency.
% of Initial Series
Note Structure: Amount Principal Amount
Class A $___________ ___%
Class B $___________ ___%
Class C $___________ ___%
Annual Servicing Fee:
CLASS A CLASS B CLASS C
Credit Enhancement: subordination subordination spread account
of Class B of Class C
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 [2 business days [2 business days [2 business days
Reset Date: before each before each before each
interest interest interest
payment date] payment date] payment date]
First Interest
Payment Date: _________, ___ _________, ___ __________, ___
Scheduled Note
Payment Date: _________, 20xx _________, 20xx _________, 20xx
Final Note Payment
Date
(no later than): _________, 20xx _________, 20xx _________, 20xx
Application for
Exchange Listing: Luxembourg Luxembourg Luxembourg
CUSIP Number: ______________ ______________ ______________
ISIN: ______________ ______________ ______________
Common Code: ______________ ______________ ______________
Anticipated Ratings:
(Moody's/S&P/Fitch Aaa/AAA/AAA A2/A/A [Baa2/BBB/BBB]
IBCA)
- ------------------------
* 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 of the Class C notes.
STRUCTURAL SUMMARY
This summary briefly describes certain major structural components of
Series 1999-__. To fully understand the terms of Series 1999-__ 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 business]
[common law] trust formed by Chase USA for the purpose of issuing the
notes. Chase USA 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.
THE MASTER TRUST AND THE SERIES CERTIFICATE
Chase Credit Card Master Trust is the issuer of the series certificate. The
series certificate for Series 1999-__ is one of twenty-one 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
1999-__, 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 Chase USA, 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 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 and any
required funding of the spread account (collections > 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 Chase USA 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 __________, 20xx
Class B __________, 20xx
Class C __________, 20xx
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 redeeming 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 Chase USA 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
1999-__ but may also include principal collections allocated to other
series that would otherwise be paid to Chase USA 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 Chase USA
to shorten the controlled accumulation period. 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 1999-__ 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 1999-__ 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
Chase USA, 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 5% of the amount of the
series certificate at the closing date. If Chase USA 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 Certificates--Final Payment of Principal;
Series Termination" 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
1999-__ and then to cover the portion of net losses allocated to the series
certificate. If finance charges 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 pay
first the principal of Class A, then the principal of Class B, and finally
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."
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," "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
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 Chase USA, 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 1999-__ 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 Manhattan Bank USA, National Association is
802 Delaware Avenue, Wilmington, Delaware 19801, and the 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.
[Pie chart describing the "Geographic Distribution of Receivables in the
Master Trust Portfolio as of July 1, 1999." The chart indicates that the
geographic distribution of the Receivables is as follows: (i) 13.4% in
California, (ii) 13.2% in New York, (iii) 7.5% in Texas, (iv) 6.6% in
Florida, (v) 5.4% in New Jersey and (vi) 53.9% of the receivables
distributed among the remaining states.]
[GRAPHIC OMITTED]
The chart below shows the percentages of the receivables in the master
trust portfolio arising under accounts within the age brackets shown.
[GRAPHIC OMITTED]
The chart below shows the Master Trust Yield, payment rate and net
charge-off rate for the master trust portfolio for each month from January
1997 to June 1999.
[GRAPHIC OMITTED]
"Master Trust yield" for any month means the total amount of collected
finance charges and interchange charges 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
PAYMENTS EARLIER OR LATER
THAN THE SCHEDULED MATURITY
DATE IF THE PORTFOLIO YIELD
IS REDUCED If the average master trust net yield
allocated to Series 1999- - called portfolio
yield - for any three 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 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 collections of portfolio yield:
CHASE USA MAY CHANGE THE
TERMS AND CONDITIONS OF
THE ACCOUNTS Chase USA will transfer to the master trust
receivables arising under specified credit
card accounts, but Chase USA will continue to
own those accounts. As the owner of those
accounts, Chase USA retains 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 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 Certificates--Addition of Master Trust
Assets" and "Chase USA's Credit Card
Activities--Billing and Payments" in the
attached prospectus.
SECURITIES INTEREST RATE AND
RECEIVABLES INTEREST RATE
MAY RESET AT DIFFERENT TIMES Finance charges on some of the accounts in
the master trust accrue at a 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 LAWS MAY
IMPEDE CHASE'S
COLLECTION EFFORTS Federal and state consumer protection laws
regulate the creation and 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
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.
Chase USA makes representations and
warranties relating to the validity and
enforceability of the receivables in the
master trust. 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
Chase USA's representations or warranties is
violated, and the violation continues beyond
the period of time allowed to correct the
violation, is that Chase USA 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 PAYMENTS AT
ANY TIME The receivables transferred to the 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
RECEIVABLES COULD REDUCE
PAYMENTS TO YOU CMB as servicer will write off the
receivables arising in 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 BY THE MASTER TRUST
MAY AFFECT THE TIMING OF
PAYMENTS TO YOU Chase Credit Card Master Trust, as a master
trust, may issue series of 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 affect
the timing and amounts of payments on your
series. See "Description of the
Securities--Description of the
Certificates--Issuing New Series of
Certificates" in the attached prospectus.
CHASE USA MAY ADD ACCOUNTS
WITH DIFFERENT TERMS TO
THE MASTER TRUST PORTFOLIO In addition to the accounts already
designated for the master trust, Chase USA is
permitted to designate additional accounts
for the master trust portfolio and to
transfer the receivables in those accounts to
the master trust. Any new accounts and
receivables may have different terms and
conditions than the accounts and 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
included 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 accounts and receivables may
produce higher or lower collections or
charge-offs over time than the accounts and
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
Certificates--Addition of Master Trust
Assets" in the attached prospectus.
CHASE USA MAY NOT BE ABLE
TO ADD NEW ACCOUNTS WHEN
REQUIRED UNDER THE POOLING
AND SERVICING AGREEMENT If Chase USA's percentage interest in the
accounts of the master trust falls to 7% or
less, Chase USA will be required 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. 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
Certificates--Addition of Master Trust
Assets" in the attached prospectus.
INSOLVENCY OR BANKRUPTCY OF
CHASE USA COULD RESULT IN
ACCELERATED, DELAYED OR
REDUCED PAYMENTS TO YOU Chase USA accounts for the transfer of
receivables to the master trust as a sale.
However, a court could conclude that Chase
USA 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
Certificates--Chase USA's Representations and
Warranties" in the attached prospectus.
Chase USA is chartered as national banking
association and is subject to regulation and
supervision by the Office of the Comptroller
of the Currency. If Chase USA becomes
insolvent or is in an unsound condition, the
Comptroller is authorized to appoint the FDIC
as 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 the pooling and servicing
agreement and limit the master trust's
resulting claim against the receivables
to "actual direct compensatory damages"
measured as of the date of receivership."
See "Certain Legal Aspects of the
Receivables--Certain Matters Relating to
Receivership" in the attached prospectus.
If the FDIC were to take any of those actions
payments on your notes could be delayed and
possibly reduced.
If a conservator or receiver were appointed
for Chase USA, then a "pay out event" would
occur for all outstanding series. Under the
terms of the pooling and servicing agreement
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 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
trust or (c) to require new principal
receivables to continue being transferred
to the 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 OF OWNER TRUST
AND MASTER TRUST ACTIONS You will have limited voting rights relating
to actions of the owner 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
RESELL YOUR NOTES The underwriters may assist in 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 IS
LIMITED TO THE OWNER TRUST
ASSETS The owner trust will not have any significant
assets other than the 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 AND CLASS C BEAR
LOSSES BEFORE CLASS A Class B is subordinated to 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, 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 is subordinated to Class A and Class
B. Principal allocations to Class C will not
begin until Class A and Class B are repaid.
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 has 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. CHASE USA is permitted to add accounts, and at times is
required to add accounts, to the master trust. CHASE USA 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)
<TABLE>
<CAPTION>
As of December 31,
As of June 30, -----------------------------------------------------------------------------
1999 1998 1997 1996
------------------------ ------------------------ ------------------------ -----------------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NUMBER OF DAYS DELINQUENT OF TOTAL DELINQUENT OF TOTAL DELINQUENT OF TOTAL DELINQUENT OF TOTAL
DELINQUENT AMOUNT RECEIVABLES AMOUNT RECEIVABLES AMOUNT RECEIVABLES AMOUNT RECEIVABLES
DELINQUENT DELINQUENT DELINQUENT DELINQUENT
- ----------------- ---------- ----------- ---------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30 to 59 Days.... $231 1.25% $264 1.49% $238 1.67% $244 1.73%
60 to 89 Days.... 156 0.85% 177 1.00 166 1.17 169 1.21
90 Days or More.. 328 1.77% 369 2.08 328 2.31 335 2.38
---------- ----------- ---------- ----------- ---------- ----------- ---------- -----------
TOTAL...... $715 3.87% $810 4.57% $732 5.15% $748 5.32%
========== =========== ========== =========== ========== =========== ========== ===========
</TABLE>
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 and exclude charges relating to changes in CHASE USA's
charge-off policies. 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 reflected for the six
months ended June 30, 1999 is an annualized figure.
LOSS EXPERIENCE
MASTER TRUST PORTFOLIO
(DOLLAR AMOUNTS IN MILLIONS)
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED JUNE 30, -----------------------------
1999 1998 1997 1996
------- ------- ------- -------
Average Principal Receivables
Outstanding................... $17,761 $15,658 $13,394 $8,787
Gross Charge-Offs................ 571 1,109 1,016 588
Recoveries....................... 40 84 75 53
Net Charge-Offs.................. 531 1,025 941 535
Net Charge-Offs as a Percentage
of Average Receivables
Outstanding.................... 5.98% 6.55% 7.03% 6.09%
As of June 30, 1999, accounts 60 or more days delinquent were 2.62% of
total receivables compared with 3.08% as of December 31, 1998. Accounts 60
or more days delinquent were 3.59% and 3.48% of total receivables as of
December 31, 1996 and 1997, respectively. Delinquencies are a leading
indicator of future charge-offs.
For the six months period ended June 30, 1999 net charge-offs as a
percentage of average principal receivables outstanding were 5.98% compared
with 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 soucres of credit, and
o seasonal variations in consumer spending and borrowings patterns.
We attribute the general decrease in delinquencies since December 31,
1996, and charge-offs since December 31, 1996 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.
o We took steps to improve account management techniques and make
significant investments in decision support technology. These
steps include implementing refined credit scoring models, improved
collection techniques, enhanced credit line management and
underwriting.
Net charge-offs as a percentage of average principal receivables
outstanding were 6.09%, 7.03% and 6.55% for the years ended December 31,
1997 and 1998, respectively. The increase in 1997 and 1998, when compared
with 1996 reflects, among other factors, higher levels of personal
bankruptcies during 1997 and 1998.
CHARACTERISTICS OF RECEIVABLES PORTFOLIO
The receivables and the accounts in the MASTER TRUST PORTFOLIO, as of
the beginning of the day on July 1, 1999:
o included approximately $18.0 billion of PRINCIPAL RECEIVABLES
and $0.5 billion of FINANCE CHARGE RECEIVABLES;
o had an average principal receivables balance of $1,551;
o had an average credit limit of $7,043, of which the average
principal receivables balance represented approximately 23%; and
o represented approximately 58% of aggregate receivables in the
BANK PORTFOLIO.
o had an average age of 80 months;
o had billing addresses in all 50 states and the District of
Columbia;
o approximately 64% were standard accounts, representing
approximately 61% of outstanding PRINCIPAL RECEIVABLES balances;
and
o approximately 36% were premium accounts, representing
approximately 39% of outstanding PRINCIPAL RECEIVABLES balances.
The following tables summarize characteristics of the MASTER TRUST
PORTFOLIO as of the beginning of the day on July 1, 1999. 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.
<TABLE>
<CAPTION>
Composition by Account Balance
Master Trust Portfolio
Percentage of Percentage of
Number of Total Number Receivables Total
Account Balance Accounts of Accounts Outstanding Receivables
- ------------------------- ---------- ------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Credit Balance .......... 145,444 1.25% $ (18,009,406) (0.10)%
No Balance .............. 5,012,613 43.17% 0 0.00%
$0.01 to $1,500.00 ...... 3,090,165 26.61% 1,483,679,418 8.03%
$1,500.01 to $5,000.00 .. 1,967,067 16.94% 5,867,161,035 31.74%
$5,000.01 to $10,000.00 . 1,184,869 10.20% 8,615,066,192 46.61%
$10,000.01 to $20,000.00 210,695 1.81% 2,489,524,758 13.47%
Over $20,000.00 ......... 1,770 0.02% 45,625,461 0.25%
---------- ------------- ---------------- --------------
TOTAL ................... 11,612,623 100.00% $ 18,483,047,458 100.00%
========== ============= ================ ==============
</TABLE>
<TABLE>
<CAPTION>
Composition by Credit Limit
Master Trust Portfolio
Percentage of Percentage of
Number of Total Number Receivables Total
Credit Limit Accounts of Accounts Outstanding PReceivables
- ------------------------------ ------------ --------------- ---------------- -------------
<C> <C> <C> <C> <C>
$0.00......................... 8,186 0.07% $ 49,565 0.00%
$0.01 to $1,500.00............ 903,255 7.78% 463,450,119 2.51%
$1,500.01 to $5,000.00........ 3,135,230 27.00% 3,181,545,584 17.21%
$5,000.01 to $10,000.00....... 5,889,439 50.71% 9,788,561,283 52.96%
Over $10,000.00............... 1,676,513 14.44% 5,049,440,907 27.32%
------------ --------------- ---------------- -------------
TOTAL................... 11,612,623 100.00% $18,483,047,458 100.00%
============ =============== ================ =============
</TABLE>
<TABLE>
<CAPTION>
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
- ------------------------------ ------------ ------------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Current to 29 days delinquent. 11,208,389 96.52% $ 16,981,336,608 91.88%
30 to 59 days delinquent...... 235,921 2.03% 785,870,780 4.25%
60 to 89 days delinquent...... 62,563 0.54% 231,494,875 1.25%
90 to 119 days delinquent..... 36,796 0.32% 156,372,895 0.85%
120 days delinquent or more... 68,954 0.59% 327,972,300 1.77%
------------ ------------- ---------------- -------------
TOTAL................... 11,612,623 100.00% $ 18,483,047,458 100.00%
============ ============= ================ =============
</TABLE>
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.
<TABLE>
<CAPTION>
Composition by Account Seasoning
Master Trust Portfolio
Percentage of Percentage of
Number of Total Number Receivables Total
Account Age Accounts of Accounts Outstanding Receivables
- --------------------------- ------------ -------------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
Not More than 6 Months......... 50,995 0.44% $ 106,556,062 0.58%
Over 6 Months to 12 Months..... 255,022 2.20% 471,372,072 2.55%
Over 12 Months to 24 Months.... 1,274,780 10.98% 1,770,432,927 9.58%
Over 24 Months to 36 Months.... 1,852,655 15.96% 2,406,416,562 13.02%
Over 36 Months to 48 Months.... 1,528,743 13.16% 2,025,721,035 10.96%
Over 48 Months to 60 Months.... 1,156,707 9.96% 2,232,859,123 12.08%
Over 60 Months to 120 Months... 3,169,474 27.29% 5,419,994,636 29.32%
Over 120 Months................ 2,324,247 20.01% 4,049,695,041 21.91%
------------ -------------- ----------------- ------------
TOTAL 11,612,623 100.00% $18,483,047,458 100.00%
============ ============== ================= ============
</TABLE>
<TABLE>
<CAPTION>
Geographic Distribution of Accounts
Master Trust Portfolio
Percentage
Percentage of of
Number of Total Number Receivables Total
State Accounts of Accounts Outstanding Receivables
- --------------------------------- ------------ ------------- --------------- -----------
<S> <C> <C> <C> <C>
California....................... 1,421,011 12.75% $2,474,438,784 13.39%
New York......................... 1,528,889 13.17% 2,436,895,669 13.18%
Texas............................ 785,093 6.76% 1,385,115,672 7.49%
Florida.......................... 774,279 6.67% 1,212,458,587 6.56%
New Jersey....................... 636,595 5.48% 993,636,022 5.38%
Illinois......................... 586,716 5.05% 901,828,169 4.88%
Ohio............................. 410,789 3.54% 651,623,533 3.53%
Pennsylvania..................... 414,604 3.57% 593,359,042 3.21%
Massachusetts.................... 418,776 3.61% 576,080,918 3.12%
Michigan......................... 368,033 3.17% 550,941,181 2.98%
Virginia......................... 252,459 2.17% 425,331,178 2.30%
Georgia.......................... 211,159 1.82% 366,304,912 1.98%
Maryland......................... 222,008 1.91% 355,936,077 1.93%
Indiana.......................... 223,468 1.92% 346,091,861 1.87%
North Carolina................... 209,504 1.80% 340,385,000 1.84%
Connecticut...................... 206,673 1.78% 307,528,947 1.66%
Missouri......................... 176,579 1.52% 277,964,390 1.50%
Tennessee........................ 163,520 1.41% 261,842,921 1.42%
Washington....................... 153,436 1.32% 261,534,276 1.41%
Arizona.......................... 145,726 1.26% 250,487,878 1.36%
Wisconsin........................ 179,392 1.54% 242,876,647 1.31%
Minnesota........................ 167,999 1.45% 239,969,519 1.30%
Louisiana........................ 153,479 1.32% 230,574,181 1.25%
Colorado......................... 145,954 1.26% 229,108,768 1.24%
Alabama.......................... 132,951 1.15% 215,868,890 1.17%
Kentucky......................... 117,907 1.02% 173,347,010 0.94%
Oklahoma......................... 104,903 0.90% 168,096,726 0.91%
South Carolina................... 99,081 0.85% 163,766,110 0.89%
Oregon........................... 99,512 0.86% 162,484,514 0.88%
Nevada........................... 75,460 0.65% 143,858,920 0.78%
Arkansas......................... 86,589 0.75% 138,356,312 0.75%
Kansas........................... 78,447 0.68% 124,285,116 0.67%
Mississippi...................... 75,250 0.65% 116,389,135 0.63%
Iowa............................. 77,551 0.67% 107,709,269 0.58%
New Hampshire.................... 59,897 0.52% 98,320,273 0.53%
Rhode Island..................... 69,589 0.60% 98,034,288 0.53%
New Mexico....................... 55,084 0.47% 90,156,617 0.49%
Hawaii........................... 43,418 0.37% 79,175,989 0.43%
Maine............................ 48,430 0.42% 75,166,511 0.41%
West Virginia.................... 46,186 0.40% 69,815,493 0.38%
Nebraska......................... 46,186 0.40% 69,224,053 0.37%
Utah............................. 40,763 0.35% 63,425,787 0.34%
Idaho............................ 29,895 0.26% 48,246,090 0.26%
Vermont.......................... 28,539 0.25% 46,364,544 0.25%
Delaware......................... 25,407 0.22% 45,669,325 0.25%
Montana.......................... 26,461 0.23% 41,470,705 0.22%
Washington, D.C.................. 22,520 0.19% 39,444,540 0.21%
Alaska........................... 17,641 0.15% 34,997,703 0.19%
Wyoming.......................... 16,755 0.14% 28,016,920 0.15%
South Dakota..................... 17,737 0.15% 26,378,387 0.14%
North Dakota..................... 17,301 0.15% 25,794,135 0.14%
Other............................ 37,387 0.30% 76,870,964 0.42%
------------ ------------- --------------- -----------
TOTAL 11,612,623 100.00% $18,483,047,458 100.00%
============ ============= =============== ===========
</TABLE>
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;
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 the CONTROLLED DEPOSIT AMOUNt,
o AVAILABLE INVESTOR PRINCIPAL COLLECTIONs, and
o ADJUSTED INVESTOR INTEREST before any deposits on that
TRANSFER DATE.
The length of the CONTROLLED ACCUMULATION PERIOD may be adjusted if
CHASE USA believes that, based on expected collections of principal, Class
A will 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 for payment to Class B and Class C is expected to be
available in one lump sum on the ________ PAYMENT DATE without a CONTROLLED
ACCUMULATION PERIOD. 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, net of charge-offs, is repaid, and finally
to Class C on each monthly DISTRIBUTION DATE until Class C, net of
charge-offs, 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 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
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED JUNE 30, -------------------------------------
1999 1998 1997 1996
------- --------- ----------- ------------
Highest Month........ 13.97% 12.70% 12.09% 11.79%
Lowest Month......... 12.21% 10.96% 10.33% 10.09%
Monthly Average...... 13.13% 12.11% 11.44% 10.76%
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
in the MASTER TRUST PORTFOLIO for each of the three calendar years 1998,
1997 and 1996 and for the six months ended on June 30, 1999 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 percentage reflected for the six months ended June
30, 1999 is an annualized figure.
PORTFOLIO YIELD
MASTER TRUST PORTFOLIO
(DOLLAR AMOUNTS IN MILLIONS)
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED JUNE 30, ------------------------------
1999 1998 1997 1996
--------- --------- -------- -------
Finance Charges and Fees
Collected....................... $ 1,628 $2,795 $2,348 $1,505
Average Principal Receivables
Outstanding..................... $17,761 $15,658 $13,394 $8,787
Yield from Finance Charges and
Fees Billed..................... 18.34% 17.85% 17.53% 17.13%
CREATION OF THE OWNER TRUST
CHASE USA and ______________, a Delaware banking corporation, will
form Chase Credit Card Owner Trust 1999-___ as a [Delaware statutory
business] [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
o engaging in other activities incidental to the activities
described above.
Because of its limited activities, the owner trust has contracted with CMB
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 ________________________, in care of the
OWNER TRUSTEE and its telephone number at that address is ( ) - .
USE OF PROCEEDS
The net proceeds from the sale of your notes will be:
o used to make an initial deposit into the OWNER TRUST
SPREAD ACCOUNT; and
o paid to CHASE USA in consideration for the SERIES
CERTIFICATE.
CHASE USA will use the proceeds it receives 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 1999-__ Supplement for a complete description.
DESCRIPTION OF THE SERIES CERTIFICATE
The owner trust will hold the SERIES CERTIFICATE to be issued through
the SERIES 1999-__ 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 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 15th day of each month.
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
CHASE USA.
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 then to pay Class C.
CONTROLLED ACCUMULATION
The CONTROLLED ACCUMULATION PERIOD is scheduled to last 12 months.
However, the servicer may elect to extend the REVOLVING PERIOD and postpone
the CONTROLLED ACCUMULATION PERIOD by providing a notice to the master
trust trustee. The servicer can make this election 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 ___, 200_ 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. In making its decision, 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.
o 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:
- 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
- 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 Disbtibution 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 ends an
amount equal to the excess, if any, of the REQUIRED ACCUMULATION
PERIOD RESERVE ACCOUNT AMOUNT over the AVAILABLE ACCUMULATION
PERIOD RESERVE ACCOUNT AMOUNT;
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 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]
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]
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, CMB 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 PRINCIPAL FUNDING INVESTMENT
PROCEEDS. If for any month, the PRINCIPAL FUNDING INVESTMENT PROCEEDS are
less than the product of:
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,
and
o a fraction that is equal to the actual number of days in
the monthly payment period divided by 360,
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 investment earnings shortfalls during the CONTROLLED ACCUMULATION
PERIOD. At least three 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.
CHASE USA may change the formula for calculating the REQUIRED
ACCUMULATION PERIOD RESERVE ACCOUNT AMOUNT if the rating agencies agree
that the modification to the formula will not result in negative rating
action on the notes and an authorized officer of CHASE USA certifies that,
in the reasonable belief of CHASE USA, the modification will not result in
a PAY OUT EVENT.
CMB 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 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, or
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 on the following page occurs. The chart also
indicates whether each listed PAY OUT EVENT is an automatic event or an
event that requires a majority vote of the noteholders to declare the
occurrence of a PAY OUT EVENT. 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.
<TABLE>
<CAPTION>
REQUIRES A CAUSES RAPID CAUSES RAPID
MAJORITY VOTE OF AMORTIZATION OF AMORTIZATION
PAY OUT EVENT NOTEHOLDERS(1) SERIES 1999-[ ] OF ALL SERIES
- ------------- ---------------- ---------------- -----------------
<S> <C> <C> <C>
1. CHASE USA fails to make a payment or deposit X X
when required to under the POOLING AND
SERVICING AGREEMENT or within five days
after that date.
2. CHASE USA 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 CHASE USA.
3. CHASE USA 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 CHASE
USA and as a result you are materially and
adversely affected, unless CHASE USA
accepts reassignment of the related
Receivables.
4. CHASE USA 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 CHASE USA and as a result
you are materially and adversely affected,
unless CHASE USA 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. CHASE USA 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 X
adverse effect on you.
8. There are insufficient funds in the X X
DISTRIBUTION ACCOUNT to pay the INVESTOR
INTEREST in full on the second DISTRIBUTION
DATE following the SCHEDULED PRINCIPAL
ALLOCATION COMMENCEMENT DATE.
9. CHASE USA becomes bankrupt or insolvent or X
enters receivership or conservatorship.
10. CHASE USA becomes unable to transfer X
Receivables to the master trust in accordance
with the Pooling and Servicing Agreement.
11. The master trust becomes subject to regulation X
as an "investment company" under the Investment
Company Act of 1940, as amended.
12. An Event of Default occurs under the INDENTURE. X
</TABLE>
- -------------
(1) Each specified PAY OUT EVENT requires the vote of noteholders holding
more than 50% of the notes by aggregate principal amount or the vote
of the master trust trustee. Unless otherwise specified, PAY OUT
EVENTS are declared upon occurrence without the necessity for a vote.
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 INVESTOR INTEREST less amounts on
deposit in the PRINCIPAL FUNDING ACCOUNT. 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. Chase Manhattan 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 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 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 the 15th of ___________ and the 15th day of
each following month. If such date is not a business day, you will be paid
interest on the following business day but you will not receive any
additional interest because of the delay.
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 initial interest payment and the initial interest period will be
adjusted to account for a [shorter][longer] first period.
A calculation agent 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 calculation agent 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 calculation agent 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.
Chase Manhattan Bank will be the initial calculation agent. The
calculation agent may not resign until a successor calculation agent is
appointed.
You can call the calculation agent at 212-___-____ to obtain the
Class A, B and C interest rates 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 Class A, B and C
interest rates 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 notes may,
however, be repaid or redeemed before or after the SCHEDULED NOTE PAYMENT
DATE.
The Class A notes are scheduled to be repaid in full on the ________
PAYMENT DATE from the amounts deposited in the PRINCIPAL FUNDING
ACCOUNT.
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 chooses to
repurchase the SERIES CERTIFICATE. 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 Certificates--Final
Payment of Principal; Series Termination" 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 CHASE USA 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
o 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 based on the average
EXCESS SPREAD PERCENTAGE for the prior three months based on the following
chart.
Percentage of
Average Excess Spread Initial Note Balance
--------------------- --------------------
Greater than 4.5% _____%
Less than 4.5% but greater than 3.5% _____%
Less than 3.5% but greater than 2.5% _____%
Less than 2.5% but greater than 1.5% _____%
Less than 1.5% or if a Pay Out Event occurs _____%
In the event a Pay-Out Event occurs, the Required Owner Trust Spread
Account Amount will increase to ____%.
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 CHASE USA certifies to the INDENTURE
TRUSTEE that the modification will not result in an EVENT OF DEFAULT. The
ADMINISTRATOR/TRANSFEROR 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 CHASE USA 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 CHASE USA 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 65 days;
o the owner trust becomes bankrupt or insolvent; 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 TRUSTEE
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 have applied 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 Organization Certificate and By-laws of the Bank,
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 we list with the Chief
Registrar of the District Court of Luxembourg, where you may obtain copies
of those documents. The Class A notes, the Class B notes and the Class C
notes have been accepted for clearance through the facilities of DTC,
CEDELBANK and EUROCLEAR.
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 Chase USA 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
___________, 199__ 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
__________, 199__ and by CHASE USA'S Asset and Loan Securitization
Committee as of ________, 199__.
Copies of the POOLING AND SERVICING AGREEMENT, the SERIES 1999-__
SUPPLEMENT, the applicable Indenture, Deposit and Administration Agreement
and the Trust Agreement, the annual report of independent certified public
accountants described in "Description of the Securities--Description of the
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 Securityholders" 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 is included in the consolidated financial statements of
The Chase Manhattan Corporation in The Chase Manhattan Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997. 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 POOLING AND SERVICING AGREEMENT, the SERIES 1999-__
SUPPLEMENT, the INDENTURE and the DEPOSIT AND ADMINISTRATION AGREEMENT are
governed by the laws of the State of New York. The TRUST AGREEMENT is
governed by the laws of the State of Delaware.
Although we have applied 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 CHASE USA 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, CHASE USA 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 CHASE USA accepts
responsibility accordingly.
UNDERWRITING
CHASE USA 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
------------- ----------------
Chase Securities Inc. $____________
_____________________ $____________
-------------
Total $
=============
Class B Notes
-------------
Chase Securities Inc. $____________
Class C Notes
-------------
Chase Securities Inc. $____________
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 discounts 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, CHASE USA will receive the proceeds,
after deduction of the underwriting and other expenses, listed below:
Proceeds to
Transferor
(as % of the
principal Underwriting
Proceeds to amount of the discounts and
Transferor 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 1999__ notes will
be subject to certain conditions. The underwriters will offer the Series
1999__ 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 1999__ notes,
or none of them.
The underwriters may reject any orders in whole or in part.
Chase Securities Inc. is a wholly-owned subsidiary of The Chase
Manhattan Corporation and an affiliate of CHASE USA.
Each underwriter has represented and agreed that:
(a) it only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the
issue of the notes to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 (as amended) or who is a
person to whom the document may otherwise lawfully be issued or
passed on,
(b) it has complied and will comply with all applicable provisions of
the Financial Services Act 1986 and other applicable laws and
resolutions with respect to anything done by it in relation to
the Notes in, from or otherwise involving the United Kingdom and
(c) if that underwriter is an authorized person under the Financial
Services Act 1986, it has only promoted and will only promote (as
that term is defined in Regulation 1.02 of the Financial Services
(Promotion of Unregulated Schemes) Regulations 1991) to any
person in the United Kingdom the scheme described in this
prospectus supplement if that person is of a kind described
either in Section 76(2) of the Financial Services Act 1986 or in
Regulation 1.04 of the Financial Services (Promotion of
Unregulated Schemes) Regulations 1991.
This prospectus supplement and the attached prospectus may be used by
Chase Securities Inc. in connection with offers and sales related to
market-making transactions in the notes. Chase 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. Chase 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. Chase 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 twenty
other series of certificates previously issued by the master trust and
currently outstanding. For more specific information with respect to any
series, any prospective investor should contact The Chase Manhattan Bank at
(212) 270-6000. The Chase Manhattan Bank will provide, without charge, to
any prospective investor, a copy of the disclosure documents for any other
publicly issued series.
SERIES 1995-2
1. Class A Certificates
Initial Investor Interest...................................$600,000,000
Certificate Rate.................................................. 6.23%
Controlled Accumulation Amount (subject to adjustment).......$50,000,000
Commencement of Controlled Accumulation Period
(subject to adjustment).............................September 30, 1999
Annual Servicing Fee Percentage.....................................2.0%
Initial Collateral Interest...............................$47,728,181.82
Other Enhancement................. Subordination of Class B Certificates
Scheduled Payment Date..................................October 15, 2000
Series 1995-2 Termination Date.............................June 15, 2003
Series Issuance Date....................................October 19, 1995
2. Class B Certificates
Initial Investor Interest....................................$34,090,000
Certificate Rate.................................................. 6.38%
Annual Servicing Fee Percentage.....................................2.0%
Initial Collateral Interest.......Same as above for Class A Certificates
Scheduled Payment Date.................................November 15, 2000
Series 1995-2 Termination Date....Same as above for Class A Certificates
Series Issuance Date..............Same as above for Class A Certificates
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)..................................July 31, 2001
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)...............................October 31, 2001
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 1996-1
1. Class A Certificates
Initial Investor Interest...................................$700,000,000
Certificate Rate.................................................. 5.55%
Controlled Accumulation Amount (subject to adjustment)....$58,333,333.33
Commencement of Controlled Accumulation Period
(subject to adjustment)..............................December 31, 1999
Annual Servicing Fee Percentage ....................................2.0%
Initial Collateral Interest...............................$55,682,545.45
Other Enhancement..................Subordination of Class B Certificates
Scheduled Payment Date..................................January 15, 2001
Series 1996-1 Termination Date........................September 15, 2003
Series Issuance Date....................................January 23, 1996
2. Class B Certificates
Initial Investor Interest....................................$39,772,000
Certificate Rate.................................................. 5.71%
Annual Servicing Fee Percentage.....................................2.0%
Initial Collateral Interest.......Same as above for Class A Certificates
Scheduled Payment Date.................................February 15, 2001
Series 1996-1 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.................................$1,150,000,000
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 1997-2
1. Class A Certificates
Initial Investor Interest.................................$1,500,000,000
Certificate Rate.................................................. 6.30%
Controlled Accumulation Amount (subject to adjustment)......$125,000,000
Commencement of Controlled Accumulation Period
(subject to adjustment)..................................July 31, 1999
Annual Servicing Fee Percentage.....................................2.0%
Initial Collateral Interest.................................$119,318,455
Other Enhancement................. Subordination of Class B Certificates
Scheduled Payment Date...................................August 15, 2000
Series 1997-2 Termination Date............................April 15, 2003
Series Issuance Date.....................................August 18, 1997
2. Class B Certificates
Initial Investor Interest....................................$85,227,000
Certificate Rate.................................................. 6.45%
Annual Servicing Fee Percentage.....................................2.0%
Initial Collateral Interest................... Same as above for Class A
Scheduled Payment Date................................September 15, 2000
Series 1997-2 Termination Date....Same as above for Class A Certificates
Series Issuance Date..............Same as above for Class A Certificates
SERIES 1997-3
1. Class A Certificates
Initial Investor Interest...................................$250,000,000
Certificate Rate................................................. 6.777%
Controlled Accumulation Amount (subject to
adjustment)..............One-twelfth of outstanding balance of Class A
Certificates on August 1, 2003
Commencement of Controlled Accumulation Period
(subject to adjustment)................................August 31, 2003
Annual Servicing Fee Percentage.....................................2.0%
Initial Collateral Interest..................................$26,786,048
Other Enhancement..................Subordination of Class B Certificates
Scheduled Payment Date................................September 15, 2004
Series 1997-3 Termination Date..............................May 15, 2007
Series Issuance Date..................................September 22, 1997
2. Class B Certificates
Initial Investor Interest....................................$20,833,000
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..................................October 15, 2004
Series 1997-3 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)..............................November 30, 2001
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)..............................November 30, 2001
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-1 Certificates
Initial Investor Interest...................................$273,822,563
Certificate Rate................................One Month LIBOR + 0.231%
Controlled Accumulation Amount (subject to adjustment).......$22,818,547
Commencement of Controlled Accumulation Period
(subject to adjustment)...............................January 31, 2004
Annual Servicing Fee Percentage.....................................2.0%
Enhancement........................Subordination of Class B Certificates
and Initial Collateral Interest
Scheduled Payment Date.................................February 15, 2005
Series 1998-1 Termination Date..........................October 15, 2007
Series Issuance Date...................................February 12, 1998
Class A-2 Certificates
Initial Investor Interest...................................$245,278,391
Certificate Rate...............................One Month LIBOR + 0.1885%
Controlled Accumulation Amount (subject to adjustment)...... $20,439,866
Commencement of Controlled Accumulation Period
(subject to adjustment)...............................January 31, 2004
Annual Servicing Fee Percentage.....................................2.0%
Enhancement........................Subordination of Class B Certificates
and Initial Collateral Interest
Scheduled Payment Date.................................February 15, 2005
Series 1998-1 Termination Date..........................October 15, 2007
Series Issuance Date...................................February 12, 1998
Class A-3 Certificates
Initial Investor Interest...................................$243,131,534
Certificate Rate...............................One Month LIBOR + 0.2445%
Controlled Accumulation Amount (subject to adjustment).......$20,260,961
Commencement of Controlled Accumulation Period
(subject to adjustment)...............................January 31, 2004
Annual Servicing Fee Percentage.....................................2.0%
Enhancement........................Subordination of Class B Certificates
and Initial Collateral Interest
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..................................$81,668,141
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 1998-2
1. Class A Certificates
Initial Investor Interest...................................$800,000,000
Certificate Rate..............................Federal Funds Rate + 0.24%
Controlled Accumulation Amount (subject to adjustment).......$66,666,667
Commencement of Controlled Accumulation Period
(subject to adjustment)...............................January 31, 2000
Annual Servicing Fee Percentage.....................................2.0%
Initial Collateral Interest..................................$85,714,953
Other Enhancement..................Subordination of Class B Certificates
Scheduled Payment Date.................................February 15, 2001
Series 1998-2 Termination Date.........................February 15, 2003
Series Issuance Date.......................................March 9, 1998
2. Class B Certificates
Initial Investor Interest....................................$66,666,000
Certificate Rate................................ One Month LIBOR + 0.25%
Annual Servicing Fee Percentage.....................................2.0%
Initial Collateral Interest...... Same as above for Class A Certificates
Scheduled Payment Date....................................March 15, 2003
Series 1998-2 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)..................................April 30, 2001
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, 2001
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)...................................May 31, 2001
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
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 1999-__ Supplement.
"AVAILABLE INVESTOR PRINCIPAL COLLECTIONS" means, with respect to any
Monthly Period, the sum of:
o the Fixed Allocation Percentage of Principal Collections
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 1999-__, minus
o the amount of Reallocated Principal Collections used to
fund the interest payments on the Class A notes and Class B notes.
"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
LIBOR.
"CLASS A NOTE INTEREST SHORTFALL" means, with respect to any Payment
Date, the sum of
o the excess, if any, of
o the Class A Interest Requirement for the preceding Payment
Date, over
o the amount of interest paid on the Class A notes for the
preceding Payment Date, plus
- 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 Princpal 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
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
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
- 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 such 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 Payment Date.
"CMB" or "Servicer" means the Chase Manhattan Bank as servicer of the
Chase Credit Card Master Trust.
"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.
"DEFAULT AMOUNT" means the amount of Receivables in Defaulted
Accounts for any Monthly Period.
"DEPOSIT AND ADMINISTRATION AGREEMENT" means the agreement between
Chase Manhattan Bank USA, National Association, as Depositor and
Administrator and Chase Credit Card Owner Trust 1999-[ ], 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 Securites--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.
"LISTING AGENT" means Banque Generale du Luxembourg, S.A., 50 Avenue
J.F. Kennedy, L-2951, Luxembourg, phone number (352) 42421.
"MONTHLY PRINCIPAL REALLOCATION AMOUNT" means, with respect to any
Monthly Period, the sum of:
o the lower of
o the excess of the Class A Note Interest Requirement over the
Available Investor Finance Charge Collections allocated to
the Class A Note Interest Requirement and
o % the Initial Investor Interest minus the amount of
unreimbursed Investor Charge-Offs and unreimbursed
Reallocated Principal Collections;
o the lower of
o the excess of the Class B Note Interest Requirement over the
Available Investor Finance Charge Collections allocated to
the Class B Note Interest Requirement and
o % the Initial Investor Interest minus the amount of
unreimbursed Investor Charge-Offs and unreimbursed
Reallocated Principal Collections; and
o the lower of
o the excess of the Net Investor Servicing Fee over the
Available Investor Finance Charge Collections allocated
to the Net Investor Servicing Fee and
o % the Initial Investor Interest minus the amount of
unreimbursed Investor Charge-Offs and unreimbursed
Reallocated Principal Collections; and
"NET CLASS C INTEREST REQUIREMENT" means:
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 such 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
o 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%.
"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 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 __________, 20xx, the final Payment Date
on which payments may be made to the noteholders of your series.
"NOTE PRINCIPAL DUE DATE" means any of:
(a) the date on which the master trust is terminated,
(b) the date on which the Investor Interest is paid in full,
(c) the Note Maturity Date,
(d) the Payment Date on which the Transferor exercises its option to
repurchase the Series Certificates and
(e) 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 _____________, 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,
- 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 Principal Funding Investment Proceeds for that Transfer Date are
less than the product of:
o a fraction,
- the numerator of which is the actual number of days
in the related Note Interest Period; and
- the denominator of which is 360, times
o the
- Class A Note Interest Rate,
times
o the balance in the Principal Funding Account as of the
Record Date preceeding 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 or
- 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, 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
- ___%,
- the initial Investor Interest, and
- 0.5%, or
o any other amount designated by the Transferor; provided,
that if the designation is of a lesser amount, the Transferor
- provides to the Servicer and the master trust trustee
evidence that the Rating Agency Condition has been
satisfied, and
- delivers to the master trust trustee a certificate of an
authorized officer to the effect that, based on the facts
known to such officer at such time, in the reasonable
belief of the Transferor, such designation will not cause
a Pay Out Event or an event that, after the giving of
notice or the lapse of time, would cause a Pay Out Event
to occur with respect to Series 1999-[ ].
"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 4.50% per annum but greater than or equal to 3.50%
per annum, in which case the Required Owner Trust Spread
Account Amount will be increased to an amount equal to % of the
Note Initial Principal Balance;
o is less than 3.50% per annum but greater than or equal to 2.50%
per annum, in which case the Required Owner Trust Spread
Account Amount will be increased to an amount equal to % of the
Note Initial Principal Balance;
o is less than 2.50% per annum but greater than or equal to 1.50%
per annum, in which case the Required Owner Trust Spread
Account Amount will be increased to an amount equal to % of the
Note Initial Principal Balance; and
o is less than 1.50% per annum, in which case the Required Owner
Trust Spread Account Amount will be increased to an amount
equal to % of the Note Initial 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, , 20xx;
o for Class B, , 20xx; and
o for Class C, , 20xx.
"SCHEDULED PRINCIPAL ALLOCATION COMMENCEMENT DATE" means the [ ]
Distribution Date.
"SERIES 1999- SUPPLEMENT" means the supplement to the Pooling and
Servicing Agreement through which the Series Certificate is issued.
"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 Chase USA, as the Depositor, and
____ as the Owner Trustee.
PRINCIPAL OFFICE OF
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
802 Delaware Avenue
Wilmington, Delaware 19801
CHASE CREDIT CARD MASTER TRUST
TRUSTEE
The Bank of New York
101 Barclay Street
New York, New York 10286
CHASE CREDIT CARD OWNER TRUST 1999-[ ]
OWNER TRUSTEE INDENTURE TRUSTEE
Chase Manhattan Bank Delaware The Bank of New York
1201 Market Street 101 Barclay Street
Wilmington, DE 19801 New York, New York 10286
PAYING AGENT AND TRANSFER AGENT
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10036
LISTING AND INTERMEDIARY AGENT
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
919 Third Avenue
New York, New York 10022
INDEPENDENT ACCOUNTANTS TO THE TRANSFEROR
PriceWaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
PROSPECTUS SUPPLEMENT
CHASE CREDIT CARD OWNER TRUST 1999-[ ]
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
TRANSFEROR AND ADMINISTRATOR
THE CHASE MANHATTAN BANK
SERVICER OF CHASE
CREDIT CARD MASTER TRUST
CHASE SECURITIES INC.
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 [ ], 1999.
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..................................$1,406,741.44
Printing and Engraving ........................... 300,000.00
Trustee's Fees ................................... 194,000.00
Legal Fees and Expenses .......................... 260,000.00
Blue Sky Fees and Expenses ....................... 10,000.00
Accountants' Fees and Expenses ................... 200,000.00
Rating Agency Fees ....................... 2,700,000.00
Miscellaneous Fees ............................... 90,000.00
-------------
Total........................................$5,160,741.44
Item 15. Indemnification of Directors and Officers
Article IX of the By-laws of Chase Manhattan Bank USA, National
Association ("CHASE USA") provide that any person who was or is made a
party or is threatened to be made a party to or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "PROCEEDING"), by reason of the fact that he or she is or
was a director or officer of Chase USA or is or was serving at the request
of Chase USA as a director, officer, employee or agent or another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan (an
"INDEMNITEE"), whether the basis for such proceeding is alleged action in
an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by Chase USA to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits Chase USA to provide broader
indemnification rights than permitted prior thereto), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators; provided, however, that,
except as provided in the second following paragraph with respect to
proceedings to enforce rights to indemnification, Chase USA shall indemnify
any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the board of directors of Chase USA.
The right to indemnification described in the immediately preceding
paragraph shall include the right to be paid by Chase USA the expenses
incurred in defending any proceeding for which such right to
indemnification is applicable in advance of its final disposition
(hereafter an "ADVANCEMENT OF EXPENSES"); provided, however, that, if the
Delaware General Corporation Law requires an advancement of expenses
incurred by an indemnitee in his or her capacity as a director or officer
(and not in any other capacity in which service was or is rendered by such
indemnitee, including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to Chase USA of an undertaking
(hereinafter an "UNDERTAKING"), by or on behalf of such indemnitee, to
repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal
(hereinafter a "FINAL ADJUDICATION") that such indemnitee is not entitled
to be indemnified for such expenses under such Article IX or otherwise.
The rights to indemnification and to the advancement of expenses
described in the two preceding paragraphs are contract rights. If a claim
under either of such paragraphs is not paid in full by Chase USA within
sixty days after a written claim has been received by Chase USA except in
the case of a claim for an advancement of expenses, in which case the
applicable period shall be twenty days, the indemnitee may at any time
thereafter bring suit against Chase USA to recover the unpaid amount of the
claim. If successful in whole or in part in any such suit, or in a suit
brought by Chase USA to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid also
the expense of prosecuting or defending such suit. In any suit brought b
the indemnitee to enforce a right to indemnification under such Article IX
(but not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and in any suit by
Chase USA to recover an advancement of expenses pursuant to the terms of an
undertaking, Chase USA shall be entitled to recover such expense upon a
final adjudication that, the indemnitee has not met any applicable standard
for indemnification set forth in the Delaware General Corporation Law.
Neither the failure of Chase USA (including its board of directors,
independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification
of the indemnitee is proper in the circumstances because the indemnitee has
met the applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by Chase USA (including its
board of directors, independent legal counsel, or its stockholders) that
the indemnitee has not met such applicable standard of conduct shall create
a presumption that the indemnitee has not met such applicable standard of
conduct or, in the case of such a suit brought by the indemnitee, be a
defense to such suit. In any suit brought by the indemnitee to enforce a
right to indemnification or to an advancement of expenses under such
Article IX, or by Chase USA to recover an advancement of expenses pursuant
to the terms of an undertaking, the burden of proving that the indemnitee
is not entitled to be indemnified, or to such advancement of expenses,
under such Article IX or otherwise shall be on Chase USA.
Article IX of Chase USA's By-Laws also provides that the foregoing
right of indemnification or reimbursement shall not be exclusive of other
rights to which any person may be entitled under any statute, Articles of
Association, by-law, agreement, or vote of stockholders of disinterested
stockholders or otherwise. Section 145 of the Delaware General Corporation
Law provides that a Delaware corporation must indemnify a director or
officer who has defended successfully, on the merits or otherwise, any
proceeding against him or any claim, matter or issue therein, for
reasonable expenses actually incurred in such defense.
There are directors and officers liability insurance policies
presently outstanding which insure directors and officers of Chase USA,
Chase USA's parent and certain of its subsidiaries. The policies cover
losses for which Chase USA, Chase USA's parent or any of those subsidiaries
shall be required or permitted by law to indemnify directors and officers
and which result from claims made against such directors or officers based
upon the commission of wrongful acts in the performance of their duties.
The policies also cover losses which the directors 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 Chase USA, Chase USA'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 for Certificates
(incorporated by reference to Exhibit 1.1 to the
Registration Statement on Form S-3 of Chemical Bank (No.
33-94190)).
1.2--Form of Underwriting Agreement for Notes.*
4.1--Amended and Restated Pooling and Servicing
Agreement, dated as of June 1, 1996, among the Chase USA,
The Chase Manhattan Bank and The Bank of New York
(incorporated by reference to Exhibit 4.2 to the
Registration Statement on Form S-3 of the Registrant (No.
333-04607)).
4.2--Form of Series Supplement for Certificates.*
4.3--Form of Series Supplement for Series Certificates.*
4.4--Form of Delaware Statutory Business Trust Agreement
of Chase Credit Card Owner Trust 1999-__ between the
Chase USA and the Owner Trustee.*
4.4a--Form of Delaware Common Law Trust Agreement of Chase
Credit Card Owner Trust 1999-__ between the Chase USA
and the Owner Trustee.
4.5--Form of Deposit and Administration Agreement among
Chase USA and Chase Credit Card Owner Trust 1999-__.*
4.6--Form of Indenture between Chase Credit Card Owner Trust
1999-__ 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.*
25.1-- Form T-1 of Indenture Trustee*
- ------------------------
* previously filed
(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, 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, 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 Registrants certify that they have reasonable ground to
believe that they meet all the requirements for filing on Form S-3 and have
duly caused this Amendment No. 3 to the Registration Statement to be signed
on their behalf by the undersigned, thereunto duly authorized, in the City
of Wilmington, State of Delaware, on September 3, 1999.
CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION
as originator of the Trust
By: /s/ Keith Schuck
------------------------------------
Keith Schuck
Controller
CHASE CREDIT CARD MASTER TRUST
(Co-Registrant)
By: The Chase Manhattan Bank,
in its capacity as Servicer
By: /s/ Patrick Margey
------------------------------------
Patrick Margey
Vice President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 3 to the Registration Statement has been signed
on September 3, 1999 by the following persons
in the capacities indicated.
SIGNATURES TITLE
* Chairman of the Board and Director
- --------------------------------
Donald L. Boudreau
* President (Chief Executive Officer)
- -------------------------------- and
Michael Barrett Director
* Director
- --------------------------------
Luke S. Hayden
* Director
- --------------------------------
William H. Hoefling
Director
- --------------------------------
Kevin T. Hurley
* Director
- --------------------------------
Thomas Jacob
* Director
- --------------------------------
John M. Nuzum
* Director
- --------------------------------
Peter Schleif
Director
- --------------------------------
Michael Urkowitz
Vice President and Controller (Chief
- -------------------------------- Financial Officer and
Keith Schuck Principal
Accounting Officer)
- ------------------------
* The undersigned, by signing his name hereto, does hereby sign this
Registration Statement on behalf of each of the above-indicated
directors and officers of The Chase Manhattan Bank USA, National
Association pursuant to powers of attorney signed by such directors
and officers.
/s/ Keith Schuck
---------------------------
Keith Schuck
Attorney-in-Fact
- ----------------------------------------------------------------------------
CHASE CREDIT CARD OWNER TRUST 1999-_
TRUST AGREEMENT
between
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
as Depositor
and
as Owner Trustee
Dated as of _____, 1999
- ----------------------------------------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I.
DEFINITIONS
SECTION 1.1. Capitalized Terms......................................1
ARTICLE II.
ORGANIZATION
SECTION 2.1. Name...................................................3
SECTION 2.2. Office.................................................3
SECTION 2.3. Purposes and Powers....................................3
SECTION 2.4. Appointment of Owner Trustee...........................4
SECTION 2.5. Initial Capital Contribution of Trust Estate...........4
SECTION 2.6. Declaration of Trust...................................4
SECTION 2.7. Title to Owner Trust Property..........................5
SECTION 2.8. Situs of Owner Trust...................................5
SECTION 2.9. Representations and Warranties of the Depositor........5
SECTION 2.10. Liability of Certificateholder........................6
ARTICLE III.
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Ownership......................................6
SECTION 3.2. The Certificate........................................6
SECTION 3.3. Execution, Authentication and Delivery of
Certificates...........................................7
SECTION 3.4. Restrictions on Transfer...............................7
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificate.......7
SECTION 3.6. Authenticating Agent...................................7
SECTION 3.7. Actions of Certificateholder...........................8
ARTICLE IV.
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholder with Respect
to Certain Matters.....................................9
ARTICLE V.
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 5.1. General Authority.....................................10
SECTION 5.2. General Duties........................................10
SECTION 5.3. Action upon Instruction...............................10
SECTION 5.4. No Duties Except as Specified in this Agreement
or in Instructions....................................11
SECTION 5.5. No Action Except under Specified Documents
or Instructions.......................................11
SECTION 5.6. Restrictions..........................................12
SECTION 5.7. Doing Business in Other Jurisdictions.................12
ARTICLE VI.
CONCERNING OWNER TRUSTEE
SECTION 6.1. Acceptance of Trusts and Duties.......................12
SECTION 6.2. Furnishing of Documents...............................14
SECTION 6.3. Representations and Warranties........................14
SECTION 6.4. Reliance; Advice of Counsel...........................15
SECTION 6.5. Not Acting in Individual Capacity.....................15
SECTION 6.6. Owner Trustee May Own Notes...........................15
ARTICLE VII.
COMPENSATION OF OWNER TRUSTEE
SECTION 7.1. Owner Trustee's Fees and Expenses.....................16
SECTION 7.2. Indemnification.......................................16
SECTION 7.3. Payments to Owner Trustee.............................17
ARTICLE VIII.
TERMINATION OF TRUST AGREEMENT
SECTION 8.1. Termination of Trust Agreement........................17
ARTICLE IX.
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 9.1. Eligibility Requirements for Owner Trustee............18
SECTION 9.2. Resignation or Removal of Owner Trustee...............18
SECTION 9.3. Successor Owner Trustee...............................19
SECTION 9.4. Merger or Consolidation of Owner Trustee..............19
SECTION 9.5. Appointment of Co-Trustee or Separate Trustee.........19
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. Supplements and Amendments...........................21
SECTION 10.2. No Legal Title to Owner Trust Estate in
Certificateholder....................................22
SECTION 10.3. Limitations on Rights of Others......................22
SECTION 10.4. Notices..............................................22
SECTION 10.5. Severability.........................................22
SECTION 10.6. Separate Counterparts................................22
SECTION 10.7. Successors and Assigns...............................23
SECTION 10.8. Nonpetition Covenants. .............................23
SECTION 10.10. Headings............................................23
SECTION 10.11. GOVERNING LAW.......................................23
SECTION 10.12. Depositor Payment Obligation........................23
SECTION 10.13. Acceptance of Terms of Agreement....................23
SECTION 10.14. Integration of Documents............................24
EXHIBITS
Exhibit A - Form of Certificate
TRUST AGREEMENT dated as of ____, 1999 between CHASE MANHATTAN BANK
USA, NATIONAL ASSOCIATION ("Chase USA"), a national banking association
having its principal executive offices located at 802 Delaware Avenue,
Wilmington, Delaware 19801, as the depositor (in its capacity as the
depositor, the "Depositor") and _________________, a Delaware banking
corporation, as the owner trustee (the "Owner Trustee").
ARTICLE I.
DEFINITIONS
SECTION 1.1. Capitalized Terms. (a) For all purposes of
this Agreement, the following terms shall have the meanings set forth
below:
"Administrator" means Chase Manhattan Bank USA, National
Association, or any successor Administrator under the Deposit and
Administration Agreement.
"Agreement" means this Chase Credit Card Owner Trust 1999-__ Trust
Agreement, as the same may be amended, modified or otherwise supplemented
from time to time.
"Basic Documents" means the Indenture, this Agreement, the Deposit
and Administration Agreement, the Note Underwriting Agreement and other
documents delivered in connection herewith and therewith.
"Certificate" means the certificate evidencing the beneficial
interest of the Certificateholder in the Owner Trust, substantially in the
form attached hereto as Exhibit A.
"Certificateholder" means Chase Manhattan Bank USA, National
Association, and its successors and permitted assigns.
"Code" means the Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" means, with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee located at
__________________________________; or such other address as the Owner
Trustee may designate by notice to the Transferor, or the principal
corporate trust office of any successor Owner Trustee (the address of which
the successor Owner Trustee will notify the Owner and the Transferor).
"Deposit and Administration Agreement" means the Deposit and
Administration Agreement, dated as of __________, 1999, between the Owner
Trustee, on behalf of the Owner Trust, and Chase Manhattan Bank USA,
National Association, as Depositor and as Administrator, as the same may be
amended, supplemented or otherwise modified from time to time.
"Depositor" means Chase Manhattan Bank USA, National Association,
in its capacity as Depositor hereunder and its successors and assigns in
such capacity.
"Expenses" has the meaning assigned to such term in Section 7.2.
"Indemnified Parties" shall have the meaning assigned to such term
in Section 7.2.
"Indenture Trustee" means The Bank of New York, not in its
individual capacity but solely as Indenture Trustee under the Indenture,
and any successor Indenture Trustee under the Indenture.
"Owner Trust" means the trust created by this Agreement.
"Owner Trust Estate" means all right, title and interest of the
Owner Trust in and to the property and rights assigned to the Owner Trustee
pursuant to Section 2.5 of this Agreement and Section 2.1 of the Deposit
and Administration Agreement, all monies, securities, instruments and other
property on deposit from time to time in the accounts established hereunder
and all other property of the Owner Trust from time to time, including any
rights of the Owner Trustee on behalf of the Owner Trust pursuant to the
Deposit and Administration Agreement.
"Owner Trustee" means , a Delaware banking corporation, not in its
individual capacity but solely as owner trustee under this Agreement
(unless otherwise specified herein), and any successor Owner Trustee
hereunder.
"Requirements of Law" means, for any Person, the certificate of
incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty,
rule or regulations, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to
which such Person is subject, whether federal, state or local (including
without limitation, usury laws, the federal Truth in Lending Act and
Regulation Z and Regulation B of the Board of Governors of the Federal
Reserve System).
"Secretary of State" means the Secretary of State of the State of
Delaware.
(b) All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting
terms not defined in this Agreement or in any such certificate or other
document, and accounting terms partly defined in this Agreement or in any
such certificate or other document to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent
with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder," and words
of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement; Section
and Exhibit references contained in this Agreement are references to
Sections and Exhibits in or to this Agreement unless otherwise specified;
and the term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms.
ARTICLE II.
ORGANIZATION
SECTION 2.1. Name. The trust created hereby shall be known
as "Chase Credit Card Owner Trust 1999-_" (hereinafter, the "Owner Trust").
SECTION 2.2. Office. The office of the Owner Trust shall
be in care of the Owner Trustee at the Corporate Trust Office or at such
other address as the Owner Trustee may designate by written notice to the
Certificateholder and the Depositor.
SECTION 2.3. Purposes and Powers. The purpose of the Owner
Trust is, and the Owner Trustee shall have the power and authority, on
behalf of the Owner Trust to engage in the following activities:
(a) to issue the Notes in the name of the Owner Trust
pursuant to the Indenture and the Certificate pursuant to this Agreement,
and to sell, transfer or exchange the Notes and the Certificate;
(b) to acquire the property and assets set forth in the
Deposit and Administration Agreement from the Depositor pursuant to the
terms thereof, to make payments or distributions on the Notes and the
Certificate, to make deposits to and withdrawals from the Reserve Account
and other accounts established under the Indenture;
(c) to assign, grant, transfer, pledge, mortgage and
convey the Owner Trust Estate pursuant to the Indenture and to hold, manage
and distribute to the Certificateholder pursuant to the terms of the
Deposit and Administration Agreement any portion of the Owner Trust Estate
released from the Lien of, and remitted to the Owner Trust pursuant to, the
Indenture;
(d) to enter into and perform its obligations under the
Basic Documents to which it is a party;
(e) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(f) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions to
the Certificateholder and the Noteholders.
The Owner Trustee, on behalf of the Owner Trust, is hereby authorized to
engage in the foregoing activities. Neither the Owner Trustee, nor the
Owner Trust, shall engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the other Basic Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor
hereby appoints the Owner Trustee as trustee of the Owner Trust effective
as of the date hereof, to have all the rights, powers and duties set forth
herein.
SECTION 2.5. Initial Capital Contribution of Trust Estate.
The Depositor hereby sells, assigns, transfers, conveys and sets over to
the Owner Trustee, as of the date hereof, $1.00. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of
the foregoing contribution, which shall constitute the initial Owner Trust
Estate. The Depositor shall pay the organizational expenses of the Owner
Trust as they may arise or shall, upon the request of the Owner Trustee,
promptly reimburse the Owner Trustee for any such expenses paid by the
Owner Trustee.
SECTION 2.6. Declaration of Trust. The Owner Trustee
hereby declares that it will hold the Owner Trust Estate in trust upon and
subject to the conditions set forth herein for the use and benefit of the
Certificateholder, subject to the obligations of the Owner Trustee, on
behalf of the Owner Trust, under the Basic Documents. It is the intention
of the parties hereto that the Owner Trust constitute a common law business
trust duly formed in accordance with the laws of the State of Delaware
and that this Agreement constitutes the governing instrument of such trust.
It is the intention of the parties hereto that, solely for United States
income and franchise tax purposes, the Owner Trust shall be treated as a
division or branch of the Depositor. The parties agree that, unless
otherwise required by appropriate tax authorities, they will take no action
contrary to the foregoing intention. Effective as of the date hereof, the
Owner Trustee shall have all rights, powers and duties set forth herein
with respect to accomplishing the purposes of the Owner Trust.
SECTION 2.7. Title to Owner Trust Property. Legal title to
all the Owner Trust Estate shall be vested at all times in the Owner
Trustee, on behalf of the Owner Trust, except where applicable law in any
jurisdiction requires title to any part of the Owner Trust Estate to be
vested in a co-trustee or a separate trustee, in which case title to such
part shall be deemed to be vested in the co-trustee and/or separate
trustee, as the case may be.
SECTION 2.8. Situs of Owner Trust. The Owner Trust will be
located and administered in the State of Delaware. All bank accounts
maintained by the Owner Trustee on behalf of the Owner Trust shall be
located in the State of Delaware or the State of New York. Payments will be
received by the Owner Trust only in Delaware or New York, and payments and
distributions will be made by the Owner Trust only from Delaware or New
York. The only office of the Owner Trust will be at the Corporate Trust
Office of the Owner Trustee in Delaware.
SECTION 2.9. Representations and Warranties of the
Depositor. The Depositor hereby represents and warrants to the Owner
Trustee that:
(i) The Depositor has been duly organized and is validly
existing as a national banking association in good standing under
the laws of the United States of America, with power and authority
to own its properties and to conduct its business as such
properties are currently owned and such business is presently
conducted.
(ii) The Depositor has the corporate power and authority
to execute and deliver this Agreement and to carry out its terms;
the Depositor has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Owner
Trustee, on behalf of the Owner Trust, and the Depositor has duly
authorized such sale and assignment and deposit to the Owner
Trustee, on behalf of the Owner Trust, by all necessary action; and
the execution, delivery and performance of this Agreement has been
duly authorized by the Depositor by all necessary action.
(iii) The consummation of the transactions contemplated by
this Agreement and the other Basic Documents and the fulfillment of
the terms hereof, do not conflict with, result in any breach of any
of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the articles of
association or bylaws of the Depositor, or conflict with or breach
any of the material terms or provisions of or constitute (with or
without notice or lapse of time) a default under any indenture,
agreement or other instrument to which the Depositor is a party or
by which it is bound; nor result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument; nor violate any law
or, to the best of the Depositor's knowledge, any order, rule or
regulation applicable to the Depositor of any court or of any
Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor
or its properties.
(iv) There are no proceedings or investigations pending
or, to the best knowledge of the Depositor, threatened against the
Depositor before any court, regulatory body, administrative agency,
or other tribunal or governmental instrumentality having
jurisdiction over the Depositor (i) asserting the invalidity of any
of the Basic Documents to which the Depositor is a party, (ii)
seeking to prevent the consummation of any of the transactions
contemplated by any of the Basic Documents, to which the Depositor
is a party, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Depositor, would materially and
adversely affect the performance by the Depositor of its
obligations under the Basic Documents to which the Depositor is a
party, or (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of
the Basic Documents to which the Depositor is a party.
SECTION 2.10. Liability of Certificateholder. The
Certificateholder shall not have any personal liability for any liability
or obligation of the Owner Trustee or the Owner Trust.
ARTICLE III.
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Ownership. Upon the formation of the
Owner Trust by the contribution by the Depositor pursuant to Section 2.5,
the Depositor shall be the sole beneficiary of the Owner Trust.
SECTION 3.2. The Certificate. The Certificate shall be
issued substantially in the form of Exhibit A, which is incorporated by
reference. The Certificate shall be executed on behalf of the Owner Trust
by manual or facsimile signature of an Authorized Officer or other
authorized signatory of the Owner Trustee. A Certificate bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the
Owner Trust, shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Certificate or did not hold such offices at the date of authentication and
delivery of such Certificate. The Certificate shall not entitle its Holder
to any benefit under this Agreement, or be valid for any purpose, unless
there shall appear on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit A, executed by the Owner
Trustee or Chase, as the Owner Trustee's authentication agent, by manual or
facsimile signature; such authentication shall constitute conclusive
evidence that such Certificate shall have been duly authenticated and
delivered hereunder. The Certificate shall be dated the date of its
authentication.
SECTION 3.3. Execution, Authentication and Delivery of
Certificates. Concurrently with the initial deposit of the Series
Certificate with the Owner Trustee, on behalf of the Owner Trust, pursuant
to the Deposit and Administration Agreement, the Owner Trustee shall cause
the Certificate to be executed on behalf of the Owner Trust, authenticated
and delivered to or upon the written order of the Depositor, signed by its
chairman of the board, its president or any vice president, without further
action by the Depositor.
SECTION 3.4. Restrictions on Transfer. To the fullest
extent permitted by applicable law, the Certificate (or any interest
therein) may not be sold, transferred, assigned, participated, pledged or
otherwise disposed of by the Depositor to any Person.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen
Certificate. If (a) the mutilated Certificate shall be surrendered to the
Owner Trustee, or if the Owner Trustee shall receive evidence to its
satisfaction of the destruction, loss or theft of the Certificate and (b)
there shall be delivered to the Owner Trustee such security or indemnity as
may be required by it to save it harmless, then the Owner Trustee shall
execute and the Owner Trustee, or Chase, as the Owner Trustee's
authenticating agent, shall authenticate and deliver, in exchange for or in
lieu of the mutilated, destroyed, lost or stolen Certificate, a new
Certificate. In connection with the issuance of any new Certificate under
this Section 3.5, the Owner Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant
to this Section shall constitute conclusive evidence of an ownership
interest in the Owner Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time. The
provisions of this Section 3.5 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the
replacement of the mutilated, destroyed, lost or stolen Certificate.
SECTION 3.6. Authenticating Agent. (a) The Owner Trustee
may appoint one or more authenticating agents with respect to the
Certificate which shall be authorized to act on behalf of the Owner Trustee
in authenticating the Certificate in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the
Certificate. The Owner Trustee hereby appoints Chase as Authenticating
Agent for the authentication of the Certificate upon any registration of
transfer or exchange of the Certificate. Whenever reference is made in this
Agreement to the authentication of the Certificate by the Owner Trustee or
the Owner Trustee's certificate of authentication, such reference shall be
deemed to include authentication on behalf of the Owner Trustee by an
authenticating agent and a certificate of authentication executed on behalf
of the Owner Trustee by an authenticating agent. Each authenticating agent
(other than Chase) shall be subject to acceptance by the Depositor.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating
agent without the execution or filing of any paper or any further act on
the part of the Owner Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by
giving written notice of resignation to the Owner Trustee and the
Depositor. The Owner Trustee may at any time terminate the agency of an
authenticating agent by giving notice of termination to such authenticating
agent and to the Depositor. Upon receiving such a notice of resignation or
upon such a termination, or in case at any time an authenticating agent
shall cease to be acceptable to the Owner Trustee or the Depositor, the
Owner Trustee promptly may appoint a successor authenticating agent with
the consent of the Depositor. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an authenticating agent.
(d) The Depositor shall pay the authenticating agent from
time to time reasonable compensation for its services under this Section
3.6.
(e) The provisions of Sections 6.1, 6.3, 6.4, 6.6, 7.1 and
7.2 shall be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section
3.6, the Certificate may have endorsed thereon, in lieu of the Owner
Trustee's certificate of authentication, an alternate certificate of
authentication in substantially the following form:
This is the Certificate referred to in the within-mentioned Trust
Agreement.
or
not in its individual capacity not in its individual capacity
but solely as Owner Trustee but solely as Owner Trustee
By:____________________________
Authenticating Agent
By: ______________________________ By:___________________________
Authorized Signatory Authorized Signatory
SECTION 3.7. Actions of Certificateholder. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Agreement to be given or taken by the
Certificateholder may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by the Certificateholder
in person or by agent duly appointed in writing; and except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Owner Trustee and, when
required, to the Depositor or the Servicer. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Agreement and conclusive in favor of the Owner
Trustee, the Depositor and the Servicer, if made in the manner provided in
this Section 3.7.
(b) The fact and date of the execution by the
Certificateholder of any such instrument or writing may be proved in any
reasonable manner which the Owner Trustee deems sufficient.
(c) The Owner Trustee may require such additional proof of
any matter referred to in this Section 3.7 as it shall deem necessary.
ARTICLE IV.
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholder with
Respect to Certain Matters. With respect to the following matters, the
Owner Trustee shall not take action unless at least 30 days before the
taking of such action, the Owner Trustee shall have notified the
Certificateholder in writing of the proposed action:
(a) the initiation of any claim or lawsuit on behalf of
the Owner Trust (except claims or lawsuits brought to collect on the Series
Certificate) and the compromise of any material action, claim or lawsuit
brought by or against the Owner Trust or the Owner Trustee (except with
respect to the aforementioned claims or lawsuits to collect on the Series
Certificate);
(b) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interest of
the Certificateholder;
(d) the amendment, change or modification of the Deposit
and Administration Agreement, except any amendment where the consent of the
Certificateholder is not required under the terms of the Deposit and
Administration Agreement; or
(e) the appointment pursuant to the Indenture of a
successor Indenture Trustee or the consent to the assignment by the Note
Registrar, the Paying Agent, the Trustee or the Certificate Registrar of
its obligations under the Indenture.
The Owner Trustee shall notify the Certificateholder in writing of any
appointment of a successor Paying Agent, Authenticating Agent or
Certificate Registrar within five Business Days thereof.
ARTICLE V.
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 5.1. General Authority. The Owner Trustee is
authorized and directed to execute and deliver the Basic Documents to which
the Owner Trustee, on behalf of the Owner Trust, is to be a party and each
certificate or other document required to be executed on behalf of the
Owner Trust that is attached as an exhibit to or contemplated by the Basic
Documents or any amendment thereto or other agreement, in each case, in
such form as the Depositor shall approve as evidenced conclusively by the
Owner Trustee's execution thereof and the Depositor's execution of the
related documents. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required to be
taken on behalf of the Owner Trust pursuant to the Basic Documents. The
Owner Trustee is further authorized from time to time to take such action
as the Administrator directs in writing with respect to the Basic
Documents, except to extent that the Basic Documents expressly require the
consent of the Depositor for such action.
SECTION 5.2. General Duties. It shall be the duty of the
Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and the other
Basic Documents and to administer the Owner Trust in the interest of the
Certificateholder, subject to the Basic Documents and in accordance with
the provisions of this Agreement. Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Basic Documents to the extent the Administrator has
agreed in the Deposit and Administration Agreement to perform any act or to
discharge any duty of the Owner Trustee hereunder or under any other Basic
Document, and the Owner Trustee shall not be liable for the default or
failure of the Administrator to carry out its obligations under the Deposit
and Administration Agreement.
SECTION 5.3. Action upon Instruction. (a) The
Certificateholder may, by written instruction, direct the Owner Trustee in
the management of the Owner Trust. Such direction may be exercised at any
time by written instruction of the Certificateholder.
(b) Notwithstanding the foregoing, the Owner Trustee shall
not be required to take any action hereunder or under any other Basic
Document if the Owner Trustee shall reasonably determine, or shall have
been advised by counsel in writing, that such action is likely to result in
personal liability to the Owner Trustee (in such capacity or individually),
is contrary to the terms of this Agreement or any other Basic Document or
is contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any other Basic Document or is unsure as to the application of
any provision of this Agreement or any Basic Document, or if any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to
the Certificateholder requesting instruction as to the course of action to
be adopted, and to the extent the Owner Trustee acts in good faith in
accordance with any written instruction of the Certificateholder received,
the Owner Trustee shall not be liable on account of such action to any
Person. If the Owner Trustee shall not have received appropriate
instruction within ten days of such notice (or within such shorter period
of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this Agreement or
the other Basic Documents, as it shall deem to be in the best interests of
the Certificateholder, and shall have no liability to any Person for such
action or inaction.
SECTION 5.4. No Duties Except as Specified in this
Agreement or in Instructions. The Owner Trustee shall undertake to perform
such duties and only such duties as are specifically set forth in this
Agreement and the other Basic Documents, and no implied covenants or
obligations shall be read into this Agreement or the other Basic Documents.
The Owner Trustee shall not have any duty or obligation to manage, make any
payment with respect to, register, record, sell, dispose of, or otherwise
deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly provided
by the terms of this Agreement or in any document or written instruction
received by the Owner Trustee pursuant to Section 5.3; and no implied
duties or obligations shall be read into this Agreement or any Basic
Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to
prepare or file any filing for the Owner Trust with the Securities and
Exchange Commission or to record this Agreement or any other Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own
cost and expense, promptly take all action as may be necessary to discharge
any Liens on any part of the Owner Trust Estate that result from actions
by, or claims against, the Owner Trustee, in its individual capacity, that
are not related to the ownership or the administration of the Owner Trust
Estate.
SECTION 5.5. No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell,
dispose of or otherwise deal with any part of the Owner Trust Estate except
(i) in accordance with the powers granted to and the authority conferred
upon the Owner Trustee pursuant to this Agreement, (ii) in accordance with
the Basic Documents, and (iii) in accordance with any document or
instruction delivered to the Owner Trustee pursuant to Section 5.3.
SECTION 5.6. Restrictions. The Owner Trustee shall not (a)
take any action that is inconsistent with the purposes of the Owner Trust
set forth in Section 2.3 or (b) take any action or amend this Agreement in
any manner that, to the best knowledge of a Responsible Officer of the
Owner Trustee, would result in the Owner Trust becoming taxable as a
corporation for United States federal income tax purposes. The
Certificateholder shall not direct the Owner Trustee to take action that
would violate the provisions of this Section.
SECTION 5.7. Doing Business in Other Jurisdictions. (a)
Notwithstanding anything contained herein to the contrary, the Owner
Trustee shall not be required to take any action in any jurisdiction other
than in the State of Delaware, other than as set forth in the last sentence
of this Section 5.7, if the taking of such action will (i) require the
consent or approval or authorization or order of or the giving of notice
to, or the registration with or the taking of any other action in respect
of, any state or other governmental authority or agency of any jurisdiction
other than the State of Delaware; (ii) result in any fee, tax or other
governmental charge under the laws of any jurisdiction or any political
subdivisions thereof in existence on the date hereof other than the State
of Delaware becoming payable by the Owner Trustee; or (iii) subject the
Owner Trustee to personal jurisdiction in any jurisdiction other than the
State of Delaware for causes of action arising from acts unrelated to the
consummation of the transactions by the Owner Trustee, as the case may be,
contemplated hereby. The Owner Trustee shall be entitled to obtain advice
of counsel (which advice shall be an expense of the Depositor) to determine
whether any action required to be taken pursuant to this Agreement results
in the consequences described in clauses (i), (ii) and (iii) of the
preceding sentence. In the event that said counsel advises the Owner
Trustee that such action will result in such consequences, the Owner
Trustee will, at the expense of the Depositor, appoint an additional
trustee pursuant to Section 9.5 to proceed with such action.
ARTICLE VI.
CONCERNING OWNER TRUSTEE
SECTION 6.1. Acceptance of Trusts and Duties. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this
Agreement. The Owner Trustee also agrees to disburse all moneys actually
received by it constituting part of the Owner Trust Estate upon the terms
of the other Basic Documents and this Agreement. The Owner Trustee shall
not be answerable or accountable hereunder or under any Basic Document
under any circumstances, except (i) for its own willful misconduct, bad
faith or negligence or (ii) in the case of the breach of any representation
or warranty contained in Section 6.3 expressly made by the Owner Trustee.
In particular, but not by way of limitation (and subject to the exceptions
set forth in the preceding sentence):
(a) The Owner Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Owner Trustee
unless it is proved that the Owner Trustee was negligent in ascertaining
the pertinent facts;
(b) The Owner Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with the
instructions of the Certificateholder given pursuant to Section 5.3;
(c) No provision of this Agreement or any other Basic
Document shall require the Owner Trustee to expend or risk funds or
otherwise incur any financial liability in its own performance of any of
its rights or powers hereunder or under any other Basic Document if the
Owner Trustee shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
assured or provided to it;
(d) Under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes;
(e) The Owner Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Agreement or
for the due execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the Basic
Documents, other than the certificate of authentication on the Certificate,
shall not be accountable for the use or application by the Depositor of the
proceeds from the Certificate, and the Owner Trustee shall in no event
assume or incur any liability, duty or obligation to any Noteholder or to
the Certificateholder, other than as expressly provided for herein and in
the Basic Documents.
(f) The Owner Trustee shall not be liable for the default
or misconduct of the Indenture Trustee, the Administrator or the Servicer
under any of the Basic Documents or otherwise, and the Owner Trustee shall
have no obligation or liability to perform the obligations to be performed
on behalf of the Owner Trust under this Agreement or the Basic Documents
that are required to be performed by the Administrator under the Deposit
and Administration Agreement or the Indenture Trustee under the Indenture;
(g) The Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any other Basic Document, at
the request, order or direction of the Certificateholder, unless the
Certificateholder has offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Agreement or in
any other Basic Document shall not be construed as a duty, and the Owner
Trustee shall not be answerable for other than its negligence, bad faith or
willful misconduct in the performance of any such act; and
(h) The Owner Trustee, upon receipt of any resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Owner Trustee that shall be specifically
required to be furnished pursuant to any provision of this Agreement or the
other Basic Documents, shall examine them to determine whether they conform
to the requirements of this Agreement or such other Basic Document;
provided, however, that the Owner Trustee shall not be responsible for the
accuracy or content of any such resolution, certificate, statement,
opinion, report, document, order or other instrument furnished to the Owner
Trustee pursuant to this Agreement or the other Basic Documents.
SECTION 6.2. Furnishing of Documents. The Owner Trustee
shall furnish to the Certificateholder promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee under the Basic Documents.
SECTION 6.3. Representations and Warranties. [ ] hereby
represents and warrants to the Depositor, for the benefit of the
Certificateholder, that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware and
having an office within the State of Delaware. It has all requisite
corporate power, authority and legal right to execute, deliver and perform
its obligations under this Agreement.
(b) It has taken all corporate action necessary to
authorize the execution and delivery by it of this Agreement, and this
Agreement will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof will
contravene any federal or Delaware law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment,
writ, decree or order applicable to it, or constitute any default under its
charter documents or by-laws or, with or without notice or lapse of time,
any indenture, mortgage, contract, agreement or instrument to which it is a
party or by which any of its properties may be bound.
(d) The execution, delivery and performance by [ ] of this
Agreement does not require the authorization, consent, or approval of, the
giving of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or agency of the
State of Delaware or the United States of America regulating the corporate
trust activities of [ ].
(e) This Agreement has been duly authorized, executed and
delivered by [ ] and shall constitute the legal, valid, and binding
agreement of [ ], enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization and
other laws affecting the rights of creditors generally, and by general
principles of equity regardless of whether enforcement is pursuant to a
proceeding in equity or at law.
SECTION 6.4. Reliance; Advice of Counsel. (a) The Owner
Trustee shall incur no liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be
genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive
evidence that such resolution has been duly adopted by such body and that
the same is in full force and effect. As to any fact or matter the method
of the determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate, signed by
the president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and
such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance
thereon.
(b) In the exercise or administration of the trusts
hereunder and in the performance of its duties and obligations under this
Agreement or the Basic Documents, the Owner Trustee (i) may act directly or
through its agents or attorneys pursuant to agreements entered into with
any of them, and the Owner Trustee shall not be liable for the conduct or
misconduct of such agents or attorneys if such agents or attorneys shall
have been selected by the Owner Trustee with due care and (ii) may consult
with counsel, accountants and other skilled persons knowledgeable in the
relevant area to be selected with reasonable care and employed by it. The
Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any
such counsel, accountants or other such persons and not contrary to this
Agreement or any Basic Document.
SECTION 6.5. Not Acting in Individual Capacity. Except as
provided in this Article VI, in accepting the trusts hereby created, [ ]
acts solely as the Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by
reason of the transactions contemplated by this Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
SECTION 6.6. Owner Trustee May Own Notes. The Owner
Trustee in its individual or any other capacity may become the owner or
pledgee of the Notes and may deal with the Depositor, the Indenture Trustee
and the Servicer in banking transactions with the same rights as it would
have if it were not the Owner Trustee.
ARTICLE VII.
COMPENSATION OF OWNER TRUSTEE
SECTION 7.1. Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder such fees
as have been separately agreed upon before the date hereof between the
Depositor and the Owner Trustee, and the Owner Trustee shall be entitled to
be reimbursed by the Depositor for its other reasonable expenses hereunder,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Owner Trustee may
employ in connection with the exercise and performance of its rights and
its duties hereunder except any such expenses as may arise from its
negligence, wilful misfeasance, or bad faith or that is the responsibility
of the Certificateholder under this Agreement.
SECTION 7.2. Indemnification. The Depositor shall be
liable as primary obligor for, and shall indemnify the Owner Trustee (in
such capacity or individually) and its successors, assigns, agents and
servants (collectively, the "Indemnified Parties") from and against, any
and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature
whatsoever (collectively, "Expenses") which may at any time be imposed on,
incurred by, or asserted against the Owner Trustee or any Indemnified Party
in any way relating to or arising out of this Agreement, the other Basic
Documents, the Owner Trust Estate, the administration of the Owner Trust
Estate or the action or inaction of the Owner Trustee hereunder, except
only that the Depositor shall not be liable for or required to indemnify
the Owner Trustee from and against Expenses arising or resulting from any
of the matters described in the third sentence of Section 6.1. The
indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. If
any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any
Indemnified Party in respect of which indemnity may be sought pursuant to
this Section 7.2, such Indemnified Party shall promptly notify the
Depositor in writing, and the Depositor upon request of the Indemnified
Party shall retain counsel reasonably satisfactory to the Indemnified Party
(or, with the consent of the Depositor, counsel selected by the Indemnified
Party acceptable to the Depositor) to represent the Indemnified Party and
any others the Depositor may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding.
The Depositor shall not be liable for any settlement of any claim or
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Depositor
agrees to indemnify any Indemnified Party from and against any loss or
liability by reason of such settlement or judgment. The Depositor shall
not, without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such proceeding.
SECTION 7.3. Payments to Owner Trustee. Any amounts paid
to the Owner Trustee pursuant to this Article VII shall be deemed not to be
a part of the Owner Trust Estate immediately after such payment.
ARTICLE VIII.
TERMINATION OF TRUST AGREEMENT
SECTION 8.1. Termination of Trust Agreement. (a) The Owner
Trust shall terminate upon the final distribution by the Owner Trustee of
all moneys or other property or proceeds of the Owner Trust Estate in
accordance with the terms of the Indenture and the Deposit and
Administration Agreement; provided, that in no event will the Owner Trust
continue more than 21 years after the date hereof. Any money or other
property held as part of the Owner Trust Estate following such distribution
shall be distributed to the Depositor. The bankruptcy, death, incapacity,
liquidation, dissolution or termination of the Certificateholder (or any
other beneficiary) shall not (x) operate to terminate this Agreement or the
Owner Trust, or (y) entitle the Certificateholder's (or any other
beneficiary) legal representatives to claim an accounting or to take any
action or proceeding in any court for a partition or winding up of all or
any part of the Owner Trust or Owner Trustee Estate or (z) otherwise affect
the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in Section 8.1(a), neither the
Depositor nor the Owner shall be entitled to revoke or terminate the Owner
Trust.
(c) This Agreement shall be irrevocable. Except as
provided in this Section 8.1(c), neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Owner Trust
or this Agreement. The Depositor and the Owner Trustee acknowledge that the
Indenture Trustee, on behalf of the Noteholders, is a third-party
beneficiary of this Agreement and shall be entitled to enforce the terms of
this agreement to the same extent as if they were signataries hereto. For
so long as the Notes are outstanding, neither the Owner Trust nor this
Agreement shall be revoked without the prior written consent of the
Indenture Trustee. The Depositor and the Owner Trustee acknowledge that the
Indenture Trustee, as an agent of the Noteholders, maintains a legitimate
interest in ensuring that the Owner Trust is not revoked prior to the
fulfillment of the Owner Trust objectives. In no event may this Agreement
be amended without the prior written consent of the Indenture Trustee if
the effect of such amendment is the revocation or termination of this Owner
Trust other than in accordance with this Section 8.1.
ARTICLE IX.
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 9.1. Eligibility Requirements for Owner Trustee.
The Owner Trustee shall at all times be a corporation authorized to
exercise corporate trust powers, having a combined capital and surplus of
at least $50,000,000 and subject to supervision or examination by federal
or state authorities; and having (or having a parent) which has a rating of
at least Baa3 by Moody's, at least BBB- by Standard & Poor's and, if rated
by Fitch, at least BBB- by Fitch, or if not rated, otherwise satisfactory
to each Note Rating Agency. If such corporation shall publish reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Owner
Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and
with the effect specified in Section 9.2.
SECTION 9.2. Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Administrator. Upon
receiving such notice of resignation, the Administrator shall promptly
appoint a successor Owner Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Owner Trustee
and one copy to the successor Owner Trustee. If no successor Owner Trustee
shall have been so appointed and have accepted appointment within 30 days
after the giving of such notice of resignation, the resigning Owner Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Owner Trustee.
If at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of Section 9.1 and shall fail to
resign after written request therefor by the Administrator, or if at any
time the Owner Trustee shall be legally unable to act, or shall be adjudged
bankrupt or insolvent, or a receiver of the Owner Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Owner Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Administrator may
remove the Owner Trustee. If the Administrator shall remove the Owner
Trustee under the authority of the immediately preceding sentence, the
Administrator shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered
to the outgoing Owner Trustee so removed and one copy of which shall be
delivered to the successor Owner Trustee, and payment of all fees owed to
the outgoing Owner Trustee shall be made to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions
of this Section shall not become effective until acceptance of appointment
by the successor Owner Trustee pursuant to Section 9.3 and payment of all
fees and expenses owed to the outgoing Owner Trustee. The Administrator
shall provide notice of such resignation or removal of the Owner Trustee to
each of the Rating Agencies.
SECTION 9.3. Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 9.2 shall execute, acknowledge and
deliver to the Administrator and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon
the resignation or removal of the predecessor Owner Trustee shall become
effective and such successor Owner Trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor under this Agreement, with like
effect as if originally named as the Owner Trustee. The predecessor Owner
Trustee shall upon payment of its fees and expenses deliver to the
successor Owner Trustee all documents and statements and monies held by it
under this Agreement; and the Administrator and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things
as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties
and obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such
successor Owner Trustee shall be eligible pursuant to Section 9.1.
Upon acceptance of appointment by a successor Owner
Trustee pursuant to this Section, the Administrator shall mail notice of
the successor of such Owner Trustee to the Certificateholder , the Trustee,
the Noteholders and the Rating Agencies. If the Administrator shall fail to
mail such notice within 10 days after acceptance of appointment by the
successor Owner Trustee, the successor Owner Trustee shall cause such
notice to be mailed at the expense of the Administrator.
SECTION 9.4. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate
trust business of the Owner Trustee, shall be the successor of the Owner
Trustee hereunder, provided such corporation shall be eligible pursuant to
Section 9.1, without the execution or filing of any instrument or any
further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding; provided further that the Owner Trustee shall
mail notice of such merger or consolidation to the Rating Agencies.
SECTION 9.5. Appointment of Co-Trustee or Separate
Trustee. Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Owner Trust Estate may at the time be located, the
Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee to act as co-trustee, jointly with the Owner
Trustee, or separate trustee or separate trustees, of all or any part of
the Owner Trust Estate, and to vest in such Person, in such capacity, such
title to the Owner Trust, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and
trusts as the Administrator and the Owner Trustee may consider necessary or
desirable. If the Administrator shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, the Owner
Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee under this Agreement shall be required to meet the
terms of eligibility as a successor trustee pursuant to Section 9.1 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 9.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee and such separate
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Owner Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Owner Trustee shall
be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the
holding of title to the Owner Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Administrator and the Owner Trustee acting
jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee.
Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Owner Trustee or separately, as may be
provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee
and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint
the Owner Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts
shall vest in and be exercised by the Owner Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. Supplements and Amendments. This Agreement
may be amended by the Depositor and the Owner Trustee, with prior written
notice to the Rating Agencies, without the consent of the Indenture Trustee
any of the Noteholders or the Certificateholder, to cure any ambiguity or
defect, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholder; provided,
however, that such amendment will not (i) as evidenced by an Officer's
Certificate of the Depositor addressed and delivered to the Owner Trustee
and the Indenture Trustee, materially and adversely affect the interest of
any Noteholder or the Owner Trust and (ii) as evidenced by an Opinion of
Counsel addressed and delivered to the Owner Trustee and the Indenture
Trustee, cause the Owner Trust to be classified as an association (or a
publicly traded partnership) taxable as a corporation for federal income
tax purposes; provided, further, that the Depositor shall deliver written
notice of such amendments to each Rating Agency prior to the execution of
any such amendment.
This Agreement may also be amended from time to time by
the Depositor and the Owner Trustee, with prior written notice to the
Rating Agencies, with the prior written consent of the Holders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or modifying in any
manner the rights of the Noteholders or the Certificateholder; provided
that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments in
respect of the Series Certificate or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholder, or
(b) reduce the aforesaid percentage of the Outstanding Amount of the Notes,
the Holders of which are required to consent to any such amendment.
Promptly after the execution of any amendment or consent,
the Owner Trustee shall furnish written notification of the substance of
such amendment or consent to the Certificateholder, the Indenture Trustee
and each of the Rating Agencies.
It shall not be necessary for the consent of the
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement,
the Owner Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement. The Owner Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner
Trustee's own rights, duties or immunities under this Agreement or
otherwise.
SECTION 10.2. No Legal Title to Owner Trust Estate in
Certificateholder. The Certificateholder shall not have legal title to any
part of the Owner Trust Estate. No transfer, by operation of law or
otherwise, of any right, title or interest of the Certificateholder to and
in its ownership interest in the Owner Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee
to an accounting or to the transfer to it of legal title to any part of the
Owner Trust Estate.
SECTION 10.3. Limitations on Rights of Others. Except for
Sections 2.7 and 2.10, the provisions of this Agreement are solely for the
benefit of the Owner Trustee, the Depositor, the Certificateholder and, to
the extent expressly provided herein, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of
this Agreement or any covenants, conditions or provisions contained herein.
SECTION 10.4. Notices. Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing
and shall be deemed given upon receipt personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested and
shall be deemed to have been duly given upon receipt, if to the Owner
Trustee, addressed to _____________________, Attn: _______________, if to
the Depositor, addressed to, Chase Manhattan Bank USA, National
Association, Attn: , or, as to each party, at such other address as shall
be designated by such party in a written notice to each other party.
SECTION 10.5. Severability. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 10.6. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 10.7. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit
of, the Depositor, the Owner Trustee and its successors and the
Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other
instrument or action by the Certificateholder shall bind the successors and
assigns of the Certificateholder.
SECTION 10.8. Nonpetition Covenants. Notwithstanding any
prior termination of the Owner Trust or this Agreement, each of the Owner
Trustee (not in its individual capacity) and the Certificateholder, by its
acceptance of the Certificate, covenants and agrees that it shall not at
any time with respect to the Owner Trust or the Master Trust, acquiesce,
petition or otherwise invoke or cause the Owner Trust or the Master Trust
to invoke the process of any court or government authority for the purpose
of commencing or sustaining a case against the Owner Trust or the Master
Trust under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, conservator, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Owner Trust or the
Master Trust or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Owner Trust or the Master
Trust; provided, however, that this Section 10.8 shall not operate to
preclude any remedy described in Article V of the Indenture.
SECTION 10.9. No Recourse. The Certificateholder by
accepting the Certificate acknowledges that the Certificate does not
represent an interest in or obligation of the Depositor, the Administrator,
the Owner Trustee (in its individual capacity), the Indenture Trustee or
any Affiliate thereof, and no recourse may be had against such parties or
their assets, or against the assets pledged under the Indenture.
SECTION 10.10. Headings. The headings of the various
Articles and Sections herein are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
SECTION 10.11. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
SECTION 10.12. Depositor Payment Obligation. The Depositor
shall be responsible for payment of the Administrator's fees under the
Deposit and Administration Agreement and shall reimburse the Administrator
for all expenses and liabilities of the Administrator incurred thereunder.
SECTION 10.13. Acceptance of Terms of Agreement. THE
RECEIPT AND ACCEPTANCE OF THE CERTIFICATE BY THE CERTIFICATEHOLDER, WITHOUT
ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE CERTIFICATEHOLDER OF ALL THE TERMS AND
PROVISIONS OF THIS AGREEMENT, AND SHALL CONSTITUTE THE AGREEMENT OF THE
OWNER TRUSTEE, ON BEHALF OF THE OWNER TRUST, THAT THE TERMS AND PROVISIONS
OF THIS AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE
OWNER TRUSTEE AND THE CERTIFICATEHOLDER.
SECTION 10.14. Integration of Documents. This Agreement,
together with the Deposit and Administration Agreement, constitutes the
entire agreement of the parties hereto and thereto with respect to the
subject matter hereof and thereof and supercedes all prior agreements
relating to the subject matter hereof and thereof.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have caused this
Trust Agreement to be duly executed by their respective officers hereunto
duly authorized as of the day and year first above written.
as Owner Trustee
By:_____________________________
Name:
Title:
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION,
as Depositor
By:_____________________________
Name: Keith Schuck
Title: Vice President
EXHIBIT A
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THIS CERTIFICATE
(OR ANY INTEREST HEREIN) MAY NOT BE TRANSFERRED BY THE OWNER TO ANY
PERSON.
CHASE CREDIT CARD OWNER TRUST 1999-__
OWNER CERTIFICATE
R-1
(This Certificate does not represent an interest in or obligation of Chase
Manhattan Bank USA, National Association, or any of its affiliates, except
to the extent described below.)
THIS CERTIFIES THAT Chase Manhattan Bank USA, National Association
is the registered owner of the Chase Credit Card Owner Trust 1999-__ (the
"Owner Trust") created by Chase Manhattan Bank USA, National Association, a
national banking association (the "Depositor").
The Owner Trust was created pursuant to the Chase Credit Card Owner
Trust 1999-__ Trust Agreement dated as of ____________, 1999 (the "Trust
Agreement"), between the Depositor and ____________________, as owner
trustee (the "Owner Trustee"). To the extent not otherwise defined herein,
the capitalized terms used herein have the meanings assigned to them in the
Trust Agreement including, as specified in Section 1.1(a).
This Certificate is the duly authorized Certificate evidencing the
sole beneficial interest in the Owner Trust (herein called the
"Certificate"). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the Owner by virtue of the acceptance hereof assents and by which
the Owner is bound. Three classes of Notes designated as "Class A Floating
Rate Asset Backed Notes, Series 1999-__" (the "Class A Notes"), Class B
Floating Rate Asset Backed Notes, Series 1999-__ (the "Class B Notes") and
Class C Floating Rate Asset Backed Notes, Series 1999-__ (the "Class C
Notes" and, together with the Class A Notes and the Class B Notes, the
"Notes") will be issued under the Indenture dated as of __________, 1999
between the Owner Trust and The Bank of New York, as Indenture Trustee .
Notwithstanding any prior termination of the Trust Agreement, the
Certificateholder, by its acceptance of this Certificate, covenants and
agrees that it shall not at any time with respect to the Owner Trust, the
Depositor or the Master Trust, acquiesce, petition or otherwise invoke or
cause the Owner Trust, the Depositor or the Master Trust to invoke the
process of any court or government authority for the purpose of commencing
or sustaining a case against the Owner Trust, the Depositor or the Master
Trust, under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, conservator, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Owner Trust, the
Depositor or the Master Trust, or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Owner Trust,
the Depositor or the Master Trust.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual
signature, this Certificate shall not entitle the Holder hereof to any
benefit under the Trust Agreement or the Deposit and Administration
Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS
AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE OWNER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Owner Trust
and not in its individual capacity, has caused this Certificate to be duly
executed.
CHASE CREDIT CARD OWNER
TRUST 1999-__
_______________________________
Not in its individual capacity
but solely as Owner Trustee
Dated: _________________, 1999 By: _____________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the within-mentioned Trust
Agreement.
__________________________________ _______________________________
not in its individual capacity not in its individual capacity
but solely as Owner Trustee but solely as Owner Trustee
By: __________________________
Authenticating Agent
By: ______________________________ By: __________________________
Authorized Signatory Authorized Signatory
ANNEX 1 TO EXHIBIT A
Registered Owner and address:
Chase Manhattan Bank USA, National Association
802 Delaware Avenue, 13th Floor
Wilmington, DE 19801
Tax Identification Number:
(212) 455-2000
September 3, 1999
Chase Manhattan Bank USA,
National Association
802 Delaware Avenue
Wilmington, Delaware 19801
Re: Chase Credit Card Master Trust
Asset-Backed Certificates and Chase
Credit Card Owner Trust Asset-Backed Notes
Ladies and Gentlemen:
We have acted as counsel for Chase Manhattan Bank USA, National
Association, a banking corporation organized under the laws of the United
States (the "Bank"), in connection with the filing by the Bank, on behalf
of the Chase Credit Card Master Trust (the "Master Trust") and Chase Credit
Card Owner Trust (the "Owner Trust"), with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, of a Registration
Statement on Form S-3, Registration No. 333-74303 (the "Registration
Statement"), and Amendment No. 1 to the Registration Statement filed by the
Bank under the Act, registering both Asset-Backed Certificates representing
undivided interests in certain assets of the Master Trust (the
"Certificates") and Asset-Backed Notes secured by the Certificate (the
"Notes"). The Certificates of a particular Series will be issued pursuant
to the Second Amended and Restated Pooling and Servicing Agreement, dated
as of September 1, 1996 (the "Pooling and Servicing Agreement") between the
Bank, The Chase Manhattan Bank and The Bank of New York, as Trustee (the
"Trustee"), and filed as Exhibit 4.1 to the Registration Statement, and a
related Series Supplement to the Pooling and Servicing Agreement (a "Series
Supplement") between the Bank and the Trustee, substantially in the form
filed as Exhibit 4.2 to the Registration Statement. The Notes will be
issued under an Indenture (the "Indenture") between the Owner Trust and The
Bank of New York, as Indenture Trustee.
We have examined the Registration Statement, the Pooling and
Servicing Agreement, the form of Series Supplement and the form of the
Indenture, which will be filed with the Commission as an exhibit to the
Registration Statement. We also have examined the originals, or duplicates
or certified or conformed copies, of such records, agreements, instruments
and other documents and have made such other and further investigations as
we have deemed relevant and necessary in connection with the opinions
expressed herein. As to questions of fact material to this opinion, we have
relied upon certificates of public officials and of officers and
representatives of the Bank.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as duplicates or
certified or conformed copies, and the authenticity of the originals of
such latter documents.
We also have assumed that at the time of execution,
authentication, issuance and delivery of the Notes, the Indenture will be
the valid and legally binding obligation of the Owner Trust.
We have assumed further that (1) at the time of execution,
authentication, issuance and delivery of the Notes, the Indenture will have
been duly authorized, executed and delivered by the Owner Trust and (2)
execution, delivery and performance by the Owner Trust of the Indenture and
the Notes will note violate the laws of Delaware or any other applicable
laws (excepting the laws of the State of New York and the Federal laws of
the United States).
Based upon the foregoing, and subject to the qualifications and
limitations set forth herein, we are of the opinion that:
1. The Pooling and Servicing Agreement has been duly authorized,
executed and delivered by the Bank, and assuming due authorization,
execution and delivery by the Trustee, the Pooling and Servicing
Agreement constitutes a binding obligation of the Bank.
2. When the Series Supplement relating to a particular Series of
Certificates has been duly authorized, executed and delivered by each
of the Bank and the Trustee, such Series Supplement will constitute a
binding obligation of the Bank.
3. When the Certificates of a particular Series have been duly
authorized by the Bank, when such Certificates have been duly
executed and authenticated in accordance with the terms of the
Pooling and Servicing Agreement and the related Series Supplement and
when such Certificates have been delivered and sold as contemplated
by the Registration Statement, such Certificates will be validly
issued, fully paid and nonassessable and outstanding and entitled to
the benefits provided for by the Pooling and Servicing Agreement and
such Series Supplement.
4. When the Notes have been duly executed, authenticated, issued
and delivered in accordance with the provisions of the Indenture the
Notes will be fully paid and nonassessable and will constitute
binding obligations of the Owner Trust.
Our opinions set forth above in paragraphs 1, 2, and 4 are
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law).
The statements set forth in the prospectus (the "Prospectus")
under the caption "Tax Matters," insofar as they purport to constitute
summaries of matters of United States federal income tax law and
regulations or legal conclusions with respect thereto, constitute accurate
summaries of the matters described therein in all material respects. We
hereby confirm the opinions expressly set forth under the caption "Tax
Matters" in the Prospectus included in the Registration Statement.
We are members of the Bar of the State of New York, and we do
not express any opinion herein concerning any law other than the law of the
State of New York and the Federal law of the United States.
We hereby consent to the filing of this opinion letter as
Exhibit 5 and Exhibit 8.1 to the Registration Statement and the use of our
name under the captions "Legal Matters" and "Tax Matters" in the Prospectus
included in the Registration Statement.
Very truly yours,
SIMPSON THACHER & BARTLETT
