EXECUTION VERSION ACES 2007-41

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Private Placement Memorandum Supplement Dated December 13, 2007

MORGAN STANLEY ACES SPC (a segregated portfolio company incorporated under the laws of the Cayman Islands)

Series 2007-41

U.S.$ 17,914,000 Floating Rate Notes due 2013

This Private Placement Memorandum Supplement (this "Supplement") is delivered together with the Private Placement Memorandum, dated April 26, 2007 (the "Base Private Placement Memorandum" and together with this Supplement, this "Private Placement Memorandum"). This Supplement is issued in conjunction with the issuance of the U.S.$ 17,914,000 Floating Rate Notes due 2013 (the "Notes") of Series 2007-41, by Morgan Stanley ACES SPC, acting for the account of the segregated portfolio relating to the Notes (the "Issuer") and must be read in conjunction with the Base Private Placement Memorandum. The segregated portfolio relating to the Notes will be referred to herein as the "Series 2007-41 Segregated Portfolio."

Payments on the Notes are linked to the credit of each of the corporate and sovereign Reference Entities (each, a "Reference Entity") specified in the Reference Portfolio attached as Schedule A, to the Credit Confirmation. The Notes are linked to a separate credit default swap transaction on the terms specified for such Notes in the Credit Confirmation. In the event that a Credit Event occurs, (a) the maximum Cash Settlement Amount payable in respect of the Notes will be the Initial Principal Balance of the Notes and (b) the Notes will have no recourse to any other Series or any other assets of the Issuer to support the payments due under the Notes. See "Special Considerations—Risks Associated with the Reference Entities" herein.

The Notes offered hereby are issued pursuant to the Series 2007-41 Indenture described herein (the "Indenture") between LaSalle Bank National Association, as trustee (the "Trustee") and the Issuer.

The holders of the Notes (the "Holders") will have recourse only to the assets of the Series 2007-41 Segregated Portfolio as described herein (the "Portfolio Property"). The Portfolio Property will consist of (i) the Underlying Securities described herein, (ii) the Issuer's rights under the Swap Agreement described herein, including the Swap Guarantee, (iii) the Issuer's rights under the Contingent Forward Agreement described herein, including the Contingent Forward Guarantee (together with the Swap Agreement, the "Related Agreements"), (iv) any Permitted Investments purchased by the Issuer, (v) certain property incidental thereto, and (vi) the proceeds of the foregoing. See "The Portfolio Property" herein.

The Notes will be represented by one or more Definitive Notes in registered form. The Notes offered and sold in reliance upon Regulation S will initially be represented by a Definitive Note registered in the name of Cox & Co, as nominee of HSBC as custodian of Pinnacle Performance Limited.

Capitalized terms not otherwise defined in this Supplement will have the meanings ascribed to such terms in the Base Private Placement Memorandum. An index of terms defined in this Supplement is attached as Annex E hereto.

MORGAN STANLEY

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NOTICE TO INVESTORS

The Series 2007-41 Notes of the Issuer will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws. The Issuer will not be registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"). Sales or other transfers of Notes may be made only to non-U.S. persons in offshore transactions in reliance and in accordance with Regulation S ("Regulation S") under the Securities Act. No Benefit Plan Investor (as defined in the Base Private Placement Memorandum) subject to ERISA (as defined below) or Section 4975 of the Code (as defined below) may purchase or hold any Notes, except as provided in the Base Private Placement Memorandum and in this Supplement.

The information set forth herein with respect to the Underlying Securities and the Reference Entities has been obtained from official or other sources believed to be reliable. The Issuer has not independently verified any of this information and makes no representation or warranty about its accuracy or completeness.

This Private Placement Memorandum contains summaries of certain documents. All such summaries are qualified by reference to the actual documents, which may be obtained on a confidential basis from the Trustee.

The information in this Private Placement Memorandum is intended to be current as of the date of this Private Placement Memorandum. No representation or warranty is made as to the accuracy or completeness of such information as of any other date, and nothing contained in this Private Placement Memorandum is, or should be relied on as, a promise or representation as to the future. Neither the subsequent delivery of this Private Placement Memorandum nor any sale of the Notes after the date of this Private Placement Memorandum implies that there has not been any change in the affairs of the Issuer or the information presented here after the date of this Private Placement Memorandum.

A purchase of the Notes exposes the Holders to, among other things, the credit of each of the Reference Entities, and the holders of the Notes assume the credit and other risks of each of the Reference Entities.

None of the Reference Entities has participated in, and each of the Reference Entities is most likely unaware of, the issuance of the Notes or the preparation of the Private Placement Memorandum.

No information is set forth herein with respect to the condition and creditworthiness of the Reference Entities. Investors should consult independent sources as to the condition and creditworthiness of the Reference Entities (as well as the issuer of the Underlying Securities) and the risks associated with an investment in an obligation issued by any Reference Entity (or by the issuer of the Underlying Securities).

Although the Issuer has no reason to believe that any publicly available information concerning the Underlying Securities or the Reference Entities is unreliable, the Issuer is not able to represent to you that any publicly available information regarding the issuer of the Underlying Securities or the Reference Entities is and will remain accurate or complete.

The Issuer will make available to each prospective purchaser, prior to such purchaser's purchase of Notes, the opportunity to ask questions of, and receive answers from, the Trustee concerning the terms and conditions of this offering and the Issuer.

No person is authorized to give any information or to make any representation concerning the offering of the Notes not contained in the Private Placement Memorandum, and any such information or representation not contained or incorporated by reference herein or therein should not be relied upon as having been authorized by or on behalf of the Trustee, the Issuer or the Swap Counterparty. Neither the delivery of the Private Placement Memorandum nor any sale made hereunder should, at any time, imply that the information contained herein or therein is correct as of any date subsequent to their respective dates.

You should assume that the Swap Counterparty and its affiliates (the "Morgan Stanley Affiliates") will accept deposits from, make loans or otherwise extend credit to, and generally engage in commercial or investment banking or other business with the issuer of the Underlying Securities or a Reference Entity or one or more of their respective affiliates (or another person or entity having obligations relating to the issuer of the Underlying Securities or a Reference Entity) and is most likely to act with respect to such business as if the Notes did not exist, regardless

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of whether any such action might have an adverse effect on the issuer of the Underlying Securities, any Reference Entity or on a purchaser of the Notes (including, without limitation, any action which might constitute or give rise to a Credit Event). You should assume that the Morgan Stanley Affiliates will vote any interests they may have in obligations of the issuer of the Underlying Securities or a Reference Entity (or of any of their respective affiliates), and purchase or sell such obligations, provide bid and offer prices with respect thereto, affect the market value thereof, and otherwise participate in the secondary market for such obligations as if the Notes did not exist, regardless of whether any such action would have an adverse effect on the issuer of the Underlying Securities, the Underlying Securities, a Reference Entity or the Holders of the Notes.

You should assume that the Morgan Stanley Affiliates will, whether by virtue of the types of relationships described above or otherwise, at the date hereof or at any time hereafter, be in possession of information in relation to the issuer of the Underlying Securities, a Reference Entity or any of their respective obligations which is or may be material in the context of the Notes and which is not or may not be known to the general public. None of the Morgan Stanley Affiliates has any obligation, and the offering of the Notes and the execution of the Swap Agreement does not create any obligation on the part of any Morgan Stanley Affiliate, to disclose to the purchaser of the Notes any such relationship or information (whether or not confidential) and you should assume that the Morgan Stanley Affiliates will not disclose such relationship or information to you.

The Private Placement Memorandum has been prepared solely for use in connection with the offering of the Notes and the information contained in the Private Placement Memorandum is confidential. Distribution of the Private Placement Memorandum to any person other than the offeree and those persons, if any, retained to advise such offeree with respect thereto is unauthorized, and any disclosure of any of their contents, without the Issuer's prior written consent, is prohibited. However, the Morgan Stanley Affiliates and the Issuer authorize each of the offerees of Notes (and each employee, representative, or other agent of any offeree) to disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Issuer and all materials of any kind (including opinions and other tax analyses) that are provided to the offeree relating to such tax treatment and tax structure.

The Private Placement Memorandum does not constitute an offer to sell or a solicitation of any offer to buy any security other than the Notes offered hereby, nor constitute an offer to sell or a solicitation of an offer to buy any of the Notes to any person in any jurisdiction in which it is unlawful to make such an offer or solicitation to such person.

NO APPLICATION HAS BEEN OR WILL BE MADE FOR THIS PRIVATE PLACEMENT MEMORANDUM TO BE APPROVED AS A PROSPECTUS UNDER DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE").

The Trustee has not participated in the preparation of the Private Placement Memorandum and assumes no responsibility for its contents.

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INFORMATION AS TO PLACEMENT WITHIN THE NETHERLANDS

Each Distributor has represented and agreed that it has not, directly or indirectly, offered, sold, transferred or delivered and will not, directly or indirectly, offer, sell, transfer or deliver any Notes (including rights representing an interest in a global certificate) in denominations less than €250,000 or $250,000 (or the equivalent thereof in other currencies) to anyone anywhere in the world other than to banks, investment banks, pension funds, insurance companies, securities firms, investment institutions, central governments, large international and supranational organizations, treasuries and finance companies of large enterprises and other entities which trade or invest in securities in the conduct of a business or profession.

NOTICE TO CANADIAN RESIDENTS For Ontario and Quebec Residents Only

Offers and Sales in Canada

This Private Placement Memorandum constitutes an offering of the securities described herein only in those Canadian jurisdictions and to those Canadian persons where and to whom the securities may be lawfully offered for sale, and therein only by persons permitted to sell such securities. This Private Placement Memorandum is not, and under no circumstances is to be construed as, an advertisement or a public offering of securities in Canada or in any province or territory thereof. Any offer or sale of the securities in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable provincial securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon this Private Placement Memorandum or the merits of the securities described herein and any representation to the contrary is an offence.

The offering of the securities in Canada is being made solely by this Private Placement Memorandum and any decision to purchase the securities should be based solely on information contained within this document. No person has been authorized to give any information or to make any representations concerning this offering other than as contained herein. The delivery of this Private Placement Memorandum does not imply that any information contained herein is correct as of any date subsequent to the date set forth on the cover hereof. This Private Placement Memorandum constitutes an offering of the securities described herein in the provinces of Ontario and Quebec only.

This Private Placement Memorandum is for the confidential use of only those persons to whom it is delivered by the Issuer or its authorized dealer-agents in connection with the private placement of securities in the provinces of Ontario and Quebec. The Issuer and its authorized dealer-agents reserve the right to reject all or part of any offer to purchase the securities for any reason or allocate to any purchaser less than all of the securities for which it has subscribed.

Responsibility

Except as otherwise expressly required by applicable law or as agreed to in contract, no representation, warranty, or undertaking (express or implied) is made and no responsibilities or liabilities of any kind or nature whatsoever are accepted by any dealer as to the accuracy or completeness of the information contained in this Private Placement Memorandum or any other information provided by the Issuer in connection with the offering of securities in the provinces of Ontario and Quebec.

Resale Restrictions

The distribution of the securities in Canada is being made on a private placement basis only and is exempt from the requirement that the Issuer prepare and file a prospectus with the relevant Canadian securities regulatory authorities. Accordingly, any resale of the securities must be made in accordance with applicable securities laws, which will vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with prospectus and registration requirements or statutory exemptions from the prospectus and registration requirements in the relevant Canadian provinces and/or territories or under a discretionary exemption granted by the relevant

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Canadian securities regulatory authorities. Canadian investors are advised to seek legal advice prior to any resale of the securities.

The Issuer is not a "reporting issuer", as such term is defined under applicable Canadian securities legislation, or the equivalent in any province or territory of Canada in which the securities will be offered. Canadian investors are advised that the Issuer currently does not intend to file a prospectus or similar document with any securities regulatory authority in Canada qualifying the resale of the securities to the public in Canada or any province or territory thereof.

Representations of Investors

Each Canadian investor who purchases securities will be deemed to have represented to the Issuer and any dealer who sells securities to such investor that:

(i) the offer and sale of the securities was made exclusively through the final version of the Private Placement Memorandum and was not made through an advertisement of the securities in any printed media of general and regular paid circulation, radio, television or telecommunications, including electronic display, or any other form of advertising in Canada;

(ii) such investor has reviewed and acknowledges the terms referred to above under the heading "—Resale Restrictions";

(iii) where required by law, such investor is purchasing as principal, or is deemed to be purchasing as principal in accordance with the applicable securities laws of the province in which such investor is resident, for its own account and not as agent for the benefit of another person; and

(iv) such investor, or any ultimate purchaser for which such investor is acting as agent, is entitled under applicable Canadian securities laws to purchase such securities without the benefit of a prospectus qualified under such securities laws, and without limiting the generality of the foregoing:

(a) in the case of an investor resident in Quebec, such investor is an "accredited investor" as defined in section 1.1 of National Instrument 45-106 Prospectus and Registration Exemptions ("NI 45-106"); and

(b) in the case of an investor resident in Ontario, such investor, or any ultimate purchaser for which such investor is acting as agent:

(i) is an "accredited investor", other than an individual, as defined in section 1.1 of NI 45-106 and is a person to which a dealer registered as an international dealer in Ontario within the meaning of section 98(4) of the Regulation to the Securities Act (Ontario) may sell the securities; or

(ii) is an "accredited investor", including an individual, as defined in section 1.1 of NI 45-106 and is purchasing the securities from a registered investment dealer or limited market dealer registered within the meaning of section 98(5) and section 98(6) of the Regulation to the Securities Act (Ontario), respectively.

In addition, each resident of Ontario who purchases the securities will be deemed to have represented to the Issuer and each dealer from whom a purchase confirmation is received, that such investor:

(v) has been notified by the Issuer:

(a) that the Issuer may be required to provide certain personal information ("personal information") pertaining to the investor as required to be disclosed in Schedule I of Form 45-106F1 under NI 45-106 (including its name, address, telephone number and the number and value of any

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securities purchased), which Form 45-106F1 may be required to be filed by the Issuer under NI 45-106;

(b) that such personal information may be delivered to the Ontario Securities Commission (the "OSC") in accordance with NI 45-106;

(c) that such personal information is collected indirectly by the OSC under the authority granted to it under the securities legislation of Ontario;

(d) that such personal information is collected for the purposes of the administration and enforcement of the securities legislation of Ontario; and

(e) that the public official in Ontario who can answer questions about the OSC's indirect collection of such personal information is the Administrative Assistant to the Director of Corporate Finance at the OSC, Suite 1903, Box 5520 Queen Street West, Toronto, Ontario M5H 3S8, Telephone: (416) 593-8086; and

(vi) has authorized the indirect collection of the personal information by the OSC.

Furthermore, the investor acknowledges that its name, address, telephone number and other specified information, including the aggregate purchase price to the investor, may be disclosed to other Canadian securities regulatory authorities and may become available to the public in accordance with the requirements of applicable Canadian laws. By purchasing the securities, each Canadian purchaser consents to the disclosure of such information.

Taxation and Eligibility for Investment

Any discussion of taxation and related matters contained in this Private Placement Memorandum does not purport to be a comprehensive description of all the tax considerations that may be relevant to a Canadian investor when deciding to purchase the securities. Canadian investors should consult their own legal and tax advisers with respect to the tax consequences of an investment in the securities in their particular circumstances and with respect to the eligibility of the securities for investment by such investor under relevant Canadian federal and provincial legislation and regulations.

Rights of Action for Damages or Rescission

Securities legislation in certain of the Canadian provinces provides purchasers of securities pursuant to an offering memorandum (such as this Private Placement Memorandum) with a remedy for damages or rescission, or both, in addition to any other rights they may have at law, where the offering memorandum and any amendment to it contains a "Misrepresentation". Where used herein, "Misrepresentation" means an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make any statement not misleading in light of the circumstances in which it was made. These remedies, or notice with respect to these remedies, must be exercised or delivered, as the case may be, by the purchaser within the time limits prescribed by applicable securities legislation.

Ontario

Section 130.1 of the Securities Act (Ontario) provides that every purchaser of securities pursuant to an offering memorandum (such as this Private Placement Memorandum) shall have a statutory right of action for damages or rescission against the issuer and any selling security holder on whose behalf the distribution is made in the event that the offering memorandum contains a Misrepresentation. A purchaser who purchases securities offered by an offering memorandum during the period of distribution has, without regard to whether the purchaser relied upon the Misrepresentation, a right of action for damages or, alternatively, while still the owner of the securities, for rescission against the issuer and the selling security holders, provided that:

(i) if the purchaser exercises its right of rescission, it shall cease to have a right of action for damages against the Issuer and the selling security holders, if any;

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(ii) the Issuer and the selling security holders, if any, will not be liable if they prove that the purchaser purchased the securities with knowledge of the Misrepresentation;

(iii) the Issuer and the selling security holders, if any, will not be liable for all or any portion of damages that they can prove do not represent the depreciation in value of the securities as a result of the Misrepresentation relied upon; and

(iv) in no case shall the amount recoverable exceed the price at which the securities were offered.

Section 138 of the Securities Act (Ontario) provides that no action shall be commenced to enforce these rights more than:

(i) in the case of an action for rescission, 180 days from the day of the transaction that gave rise to the cause of action; or

(ii) in the case of an action for damages, the earlier of:

(a) 180 days from the day that the purchaser first had knowledge of the facts giving rise to the cause of action; or

(b) three years from the day of the transaction that gave rise to the cause of action.

This Private Placement Memorandum is being delivered in reliance on exemptions from the prospectus requirements contained under NI 45-106. The rights referred to in section 130.1 of the Securities Act (Ontario) do not apply in respect of an offering memorandum (such as this Private Placement Memorandum) delivered to a prospective purchaser in connection with a distribution made in reliance on the exemption from the prospectus requirement in section 2.3 of NI 45-106 if the prospective purchaser is:

(i) a Canadian financial institution (as defined in NI 45-106) or a Schedule III bank,

(ii) the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada), or

(iii) a subsidiary of any person referred to in paragraphs (a) and (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary.

The foregoing summary is subject to the express provisions of the Securities Act (Ontario) and the rules, regulations and other instruments thereunder, and reference is made to the complete text of such provisions contained therein. Such provisions may contain limitations and statutory defences on which the Issuer may rely. The enforceability of these rights may be limited as described herein under the heading "—Enforcement of Legal Rights" below.

The rights of action for damages or rescission discussed above are conferred to Ontario purchasers and are in addition to, and without derogation from, any other right or remedy which purchasers may have at law.

Enforcement of Legal Rights

All or substantially all of the directors and officers of the Issuer, as well as the experts named in this Private Placement Memorandum, may be located outside of Canada and, as a result, it may not be possible for Canadian investors to effect service of process upon such persons in Canada. All or a substantial portion of the assets of the Issuer and such other persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgement against the Issuer or such other persons in Canada or to enforce a judgement obtained in Canadian courts against the Issuer or such other persons outside of Canada.

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Language of Documents

Upon receipt of this document, each Canadian investor hereby confirms that its has expressly requested that all documents evidencing or relating in any way to the sale of the securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur canadien confirme par les présentes qu'il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d'achat ou tout avis) soient rédigés en anglais seulement.

NOTICE TO RESIDENTS OF EUROPEAN ECONOMIC AREA

IN RELATION TO EACH MEMBER STATE OF THE EUROPEAN ECONOMIC AREA WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE OR WHERE THE PROSPECTUS DIRECTIVE IS APPLIED BY THE REGULATOR (EACH, A "RELEVANT MEMBER STATE"), EACH DISTRIBUTOR HAS REPRESENTED AND AGREED, AND EACH FURTHER DISTRIBUTOR APPOINTED UNDER THE PROGRAMME WILL BE REQUIRED TO REPRESENT AND AGREE, THAT WITH EFFECT FROM AND INCLUDING THE DATE ON WHICH THE PROSPECTUS DIRECTIVE IS IMPLEMENTED OR APPLIED IN THAT RELEVANT MEMBER STATE (THE "RELEVANT IMPLEMENTATION DATE") IT HAS NOT MADE AND WILL NOT MAKE AN OFFER OF SECURITIES TO THE PUBLIC IN THAT RELEVANT MEMBER STATE EXCEPT THAT IT MAY, WITH EFFECT FROM AND INCLUDING THE RELEVANT IMPLEMENTATION DATE, MAKE AN OFFER OF SECURITIES TO THE PUBLIC IN THAT RELEVANT MEMBER STATE:

(A) IN (OR IN GERMANY, WHERE THE OFFER STARTS WITHIN) THE PERIOD BEGINNING ON THE DATE OF PUBLICATION OF A PROSPECTUS IN RELATION TO THOSE SECURITIES WHICH HAS BEEN APPROVED BY THE COMPETENT AUTHORITY IN THAT RELEVANT MEMBER STATE OR, WHERE APPROPRIATE, APPROVED IN ANOTHER RELEVANT MEMBER STATE AND NOTIFIED TO THE COMPETENT AUTHORITY IN THAT RELEVANT MEMBER STATE, ALL IN ACCORDANCE WITH THE PROSPECTUS DIRECTIVE AND ENDING ON THE DATE WHICH IS 12 MONTHS AFTER THE DATE OF SUCH PUBLICATION;

(B) AT ANY TIME TO LEGAL ENTITIES WHICH ARE AUTHORIZED OR REGULATED TO OPERATE IN THE FINANCIAL MARKETS OR, IF NOT SO AUTHORIZED OR REGULATED, WHOSE CORPORATE PURPOSE IS SOLELY TO INVEST IN SECURITIES;

(C) AT ANY TIME TO ANY LEGAL ENTITY WHICH HAS TWO OR MORE OF (1) AN AVERAGE OF AT LEAST 250 EMPLOYEES DURING THE LAST FINANCIAL YEAR; (2) A TOTAL BALANCE SHEET OF MORE THAN EUR43,000,000 AND (3) AN ANNUAL TURNOVER OF MORE THAN EUR50,000,000, AS SHOWN IN ITS LAST ANNUAL OR CONSOLIDATED ACCOUNTS; OR

(D) AT ANY TIME IN ANY OTHER CIRCUMSTANCES WHICH DO NOT REQUIRE THE PUBLICATION BY THE ISSUER OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE.

FOR THE PURPOSES OF THIS PROVISION, THE EXPRESSION AN "OFFER OF SECURITIES TO THE PUBLIC" IN RELATION TO ANY SECURITIES IN ANY RELEVANT MEMBER STATE MEANS THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE SECURITIES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE THE SECURITIES, AS THE SAME MAY BE VARIED IN THAT MEMBER STATE BY ANY MEASURE IMPLEMENTING THE PROSPECTUS DIRECTIVE IN THAT MEMBER STATE AND THE EXPRESSION "PROSPECTUS DIRECTIVE" MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN EACH RELEVANT MEMBER STATE.

The Trustee has not participated in the preparation of the Private Placement Memorandum and assumes no responsibility for its contents.

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TABLE OF CONTENTS

Page

NOTICE TO INVESTORS ......................................................................................................................................... ii

INFORMATION AS TO PLACEMENT WITHIN THE NETHERLANDS ............................................................ iv

SPECIAL CONSIDERATIONS ................................................................................................................................. 1

THE NOTES ............................................................................................................................................................... 8

THE PORTFOLIO PROPERTY ............................................................................................................................... 22

The Underlying Securities ......................................................................................................................................... 22

The Swap Agreement ................................................................................................................................................ 30

The Contingent Forward Agreement ......................................................................................................................... 39

Permitted Investments ............................................................................................................................................... 42

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS.......................................................................... 43

TRANSFER RESTRICTIONS.................................................................................................................................. 46

LIST OF ANNEXES:

ANNEX A – Form of Credit Confirmation ........................ ........................................................................ Annex A-1

ANNEX B – Form of Rate Confirmation........................... .........................................................................Annex B-1

ANNEX C – Form of Contingent Forward Confirmation .. .........................................................................Annex C-1

ANNEX D – Initial Underlying Securities Prospectus....... ........................................................................ Annex D-1

ANNEX E – Index of Defined Terms ................................ .........................................................................Annex E-1

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SPECIAL CONSIDERATIONS

The purchase of the Notes involves substantial risks, including without limitation the risks described below. This Private Placement Memorandum does not describe all risks of an investment in the Notes, either as such risks exist at the date hereof or as such risks may change in the future.

Limited Recourse; Notes Payable Solely from Portfolio Property; Notes Not Payable from Portfolio Property of Other Series

The Notes will not be obligations or responsibilities of, and will not be guaranteed by, the Trustee, the Swap Counterparty, the Swap Guarantor, the Contingent Forward Counterparty, the Contingent Forward Guarantor, any Agent or any company in the same group of companies as or any affiliate of any of the foregoing. Each Holder by its holding of its Notes will be deemed to agree that the obligations of the Issuer will be payable solely from the Portfolio Property. No assurance can be made that the amount of Portfolio Property available for and allocated to the repayment of the Notes at any particular time will be sufficient to cover all amounts that would otherwise be due and payable in respect of the Notes. If proceeds of the Portfolio Property received by the Trustee for the benefit of the Holders are insufficient to make payments on the Notes, no other assets will be available for payment of the deficiency, and following liquidation of the Portfolio Property, the obligations of the Issuer to pay such deficiency will be extinguished. Holders in respect of the Series 2007-41 Segregated Portfolio will not have any recourse to the general assets of the Company or any assets of any other segregated portfolio of the Company.

Statutory Segregation of Assets and Liabilities

The Notes will be issued for the account of the Series 2007-41 Segregated Portfolio as described herein. The Companies Law (2004 Revision) of the Cayman Islands (the "Companies Law") provides that a segregated portfolio company may create one or more segregated portfolios in order to segregate the assets and liabilities of the segregated portfolio company held within or on behalf of a segregated portfolio from the assets and liabilities of the segregated portfolio company held within or on behalf of any other segregated portfolio of the company or the assets and liabilities of the company which are not held within or on behalf of a segregated portfolio of the company. The Companies Law also provides that segregated portfolio assets shall only be available and used to meet the liabilities to the creditors of the segregated portfolio company who are creditors of that segregated portfolio and who shall thereby be entitled to have recourse only to the segregated portfolio assets attributable to that segregated portfolio for such purposes, and segregated portfolio assets shall not be available or used to meet liabilities to, and shall be absolutely protected from, the creditors of the segregated portfolio company who are not creditors in respect of that segregated portfolio, and who accordingly shall not be entitled to recourse to the segregated portfolio assets attributable to that segregated portfolio. This type of structure does not exist in most jurisdictions and these provisions of the Companies Law have not been subject to judicial scrutiny in any jurisdiction. Accordingly, there is a risk that upon such review a court may not be willing to uphold the statutory segregation of assets and liabilities as provided for by the Companies Law with respect to a segregated portfolio company.

Swap Counterparty Not Adviser or Fiduciary

The Swap Counterparty is not acting as a fiduciary or adviser to the Issuer or the Holders. In selecting the Reference Entities and in performing its obligations under the Swap Agreement, the Swap Counterparty will not act as an adviser, fiduciary or agent of the Issuer or the Holders, but will take such actions as are permitted under the Swap Agreement and which it deems to be in its interests, which may be adverse to the interests of the Issuer or the Holders.

Risks Associated with the Reference Entities

There will be one credit default swap transaction under the Swap Agreement, linked to the Notes. The transaction will be linked to a portfolio of specified reference assets (the "Reference Portfolio"). Since payments under the Swap Agreement will be linked to the credit of each of the Reference Entities, and payments under the Notes rely on the Swap Agreement, once the Aggregate Loss Amount under (and as defined in) the Swap Agreement exceeds the Lower Threshold Amount specified in the Credit Confirmation in connection with the Swap Agreement, Holders of the Notes will be exposed to the credit risk of the Reference Entities to the full extent of the value of their Notes. Upon the occurrence of a Credit Event, Holders could lose a substantial portion, or all, of the value of their Notes.

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In particular, upon the occurrence of a Credit Event in respect of any of the Reference Entities, the principal amount of the Notes may be reduced as set out herein without any repayment of principal and, as provided herein, the right to receive payment of any such principal amount will be extinguished in accordance with the provisions herein. The likelihood of a Credit Event occurring with respect to a Reference Entity will generally fluctuate with, among other things, the financial condition of the Reference Entities, general economic conditions, the condition of certain financial markets, political events, developments or trends in any relevant industry and changes in prevailing interest rates.

No obligation of a Reference Entity will constitute a part of the property of the Issuer and Holders will have no right to vote or exercise any other right or remedy with respect to a Reference Entity or any of its obligations and will have no legal or equitable interest therein.

None of the Swap Counterparty and its affiliates makes any representations to investors concerning (i) any Reference Entity or its condition or creditworthiness or (ii) the merits of an investment in the Notes. Investors should consult independent sources as to the condition of each Reference Entity, as well as the risks associated with an investment in an obligation issued or, to the extent permitted under the Swap Agreement, guaranteed by any Reference Entity to the same extent as if they were making a direct investment in obligations of such Reference Entity. Each investor will be deemed to have represented and warranted to the Swap Counterparty and the Issuer that it has made its own investigation of the condition and creditworthiness of the Reference Entities and has determined that it can bear any loss associated with an investment in the Notes as described herein.

Limited Liquidity; Resale Restrictions

The Notes are a highly illiquid investment. There is currently no secondary market for the Notes and it is extremely unlikely that a significant secondary market in the Notes will develop or that if a secondary market does develop that it will continue or will be sufficient to provide the Holders with needed liquidity.

The limited scope of information available to the Issuer, the Trustee and the Holders regarding the Reference Entities, the Underlying Securities and the nature of any Credit Event (as defined in "The Portfolio Property—The Swap Agreement" section), may affect the liquidity of the Notes.

The Notes are subject to significant restrictions on transfer that could also limit their liquidity.

Consequently, the purchase of Notes is suitable only for, and should be made only by, investors who understand and can bear the risks of such an investment (including without limitation the substantial credit, financial and liquidity risks of such an investment) for an indefinite period of time or until final redemption or maturity of the Notes.

See "Transfer Restrictions" herein and "Certain ERISA and Other U.S. Considerations" in the Base Private Placement Memorandum.

Subordination of the Notes

The Notes are subordinated to the payment of certain other amounts payable by the Issuer, as set out in the Priority of Payments (as defined in the Base Private Placement Memorandum). There can be no assurance that the Holders will receive the full amounts payable by the Issuer under the Notes or that they will receive any return on their investment in the Notes. In particular, if certain Credit Events occur, returns to Holders could be reduced to as low as zero. If a Credit Event occurs, the Principal Balance of the Notes will be reduced according to the formula provided in the Credit Confirmation in an amount equal to the Cash Settlement Amount (as defined in "The Notes" section), if any, determined in connection therewith.

Issuer's Ability to Pay Interest under the Notes

The ability of the Issuer to meet its obligations to pay interest on the Notes after payment in full has been made by the Issuer of all amounts due and owing which rank in priority thereto, will depend on the performance by or on behalf of the Swap Counterparty of its obligations under the Swap Agreement, of the Swap Guarantor under the Swap Guarantee and receipt by the Issuer of the sums of principal and interest receivable by the Issuer in respect of the Underlying Securities.

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The Swap Counterparty will make payments of interest and/or premium due from it under the Swap Agreement to the Issuer, and such amounts will be applied in payment of amounts due to the Holders in accordance with the Priority of Payments.

Deferral of Interest on the Notes due to Unsettled Reference Entities

If one or more Reference Entities are Unsettled Reference Entities on any Interest Payment Date, interest on the Notes that is otherwise payable on such Interest Payment Date may be deferred and subject to reduction as described herein. See "—Interest Payments—Interest Payment Deferral".

Acceleration or Early Redemption in Certain Circumstances

The Notes are subject to acceleration upon the occurrence of an Indenture Event of Default or early redemption upon the occurrence of an Early Redemption Event, as described in the Base Private Placement Memorandum. In such circumstances, the Underlying Securities will, subject to the Holder not having elected to receive Underlying Securities, be liquidated (to the extent not previously redeemed) and the proceeds applied in accordance with the Priority of Payments. The net proceeds (if any) of any realization of the Underlying Securities may be insufficient to pay amounts due to the Holders in respect of the Notes.

At any time when the entire Principal Balance of the Notes is held by a Morgan Stanley Affiliate, the Swap Counterparty may elect to terminate the portions of the Swap Agreement associated with such Notes. Upon such termination, the Issuer will be required to redeem such Notes at their then current Principal Balance.

Risks Associated with Underlying Securities

Underlying Securities Default

The Holders will be exposed to the credit of the issuer of the Underlying Securities to the full extent of their investment in the Notes. If the issuer of the Underlying Securities is late in making any payment of interest or principal with respect to the Underlying Securities and if such failure continues after the expiration of any applicable grace period or if any other event occurs which constitutes an Underlying Securities Default (as defined in "The Notes" section), the Swap Agreement will be subject to termination as described herein. If the Swap Agreement is terminated, the Issuer will, out of the proceeds of the Underlying Securities, pay certain accrued and unpaid expense payments due to the Trustee and other service providers of the Issuer and amounts due to the Swap Counterparty under the Swap Agreement (including any Swap Breakage Fee other than a Defaulted Swap Termination Payment) before distributing the remaining proceeds, if any, to the Holders of the Notes. If an Underlying Securities Default occurs, then the amount distributed to the Holders could be substantially less than the Holders' original investment in the Issuer and could even be zero.

Limited Information with respect to the Underlying Securities

The Private Placement Memorandum does not provide detailed information with respect to the Underlying Securities or the issuer thereof or with respect to any rights or obligations, legal, financial or otherwise, arising under the Underlying Securities. Prospective purchasers of the Notes are urged to undertake their own investigation of these and other matters relating to the Underlying Securities.

The limited information concerning the Underlying Securities and the issuer thereof that is set forth herein will, unless otherwise specified, be based upon publicly available sources and will not have been independently checked or verified by the Swap Counterparty, the Swap Guarantor, the Contingent Forward Counterparty, the Contingent Forward Guarantor, the Trustee or anyone else in connection with the issuance of the Notes.

The issuer of the Underlying Securities has not participated in, and is most likely unaware of, the offering of the Notes or the preparation of this Private Placement Memorandum.

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Risks Associated with the Swap Agreement

Credit of Swap Counterparty and Swap Guarantor

The receipt by Holders of payments on their Notes will be dependent on the Issuer's timely receipt of payments from, and therefore the credit of, the Swap Counterparty and the Swap Guarantor.

Liability for Swap Breakage Fees and Defaulted Swap Termination Payments

The Swap Agreement may be terminated early if a Swap Event of Default or a Swap Termination Event (each as defined in "The Portfolio Property—The Swap Agreement" section) with respect to the Swap Counterparty or the Issuer occurs or if an Indenture Event of Default or Early Redemption Event occurs. If a Swap Event of Default, a Swap Termination Event, an Indenture Event of Default or an Early Redemption Event occurs, then the Swap Agreement will be subject to termination and, as a result of such termination, the Issuer or the Swap Counterparty will pay a termination payment in accordance with Section 6(e) of the Master Swap Agreement (the "Swap Breakage Fee"). The Issuer will pay a Swap Breakage Fee to the Swap Counterparty if the value of the Swap Agreement is in favor of the Swap Counterparty and the Swap Counterparty will pay a Swap Breakage Fee to the Issuer if the value of the Swap Agreement is in favor of the Issuer, subject to the Priority of Payments. The value of the Swap Agreement may be highly volatile, and it is not possible to estimate the amount of the Swap Breakage Fee paid or foregone by the Holders of the Notes. The Holders of the Notes, will effectively pay any Swap Breakage Fee payable by the Issuer, in proportion to the amount of their respective investment in the Notes, up to the limit of such investment.

The Indenture distinguishes between Swap Breakage Fees and Defaulted Swap Termination Payments, which term refers to any amount payable by the Issuer under the Swap Agreement as a consequence of an early termination of the Swap Agreement in respect of which termination the Swap Counterparty (and not the Issuer) is the sole affected or defaulting party. Swap Breakage Fees that are Defaulted Swap Termination Payments have a lower priority in the Priority of Payments than (and will be subordinated to) the payments due to the Holders in respect of the Notes.

Risks Associated with the Contingent Forward Agreement

Credit of Contingent Forward Counterparty and Contingent Forward Guarantor

The Contingent Forward Agreement will require the Contingent Forward Counterparty to pay 100% of the principal amount of the Underlying Securities (other than Underlying Securities consisting of Liquidity Funds or U.S. dollars) which are required to be liquidated by the Issuer in respect of (a) a Cash Settlement Amount payable under the Credit Confirmation or (b) the redemption of the Notes on the Scheduled Maturity Date. However, settlement on the Contingent Forward Agreement will not occur (except to the extent settlement is pending) when an Underlying Securities Default, any other Indenture Event of Default or an Early Redemption Event occurs, and Holders of the Notes are exposed to the risks of decline in the market value of the Underlying Securities related to such Notes in such circumstances. Investors are also exposed to the credit risk of the Contingent Forward Counterparty under the Contingent Forward Agreement and the Contingent Forward Guarantor under the Contingent Forward Guarantee, as applicable.

No Right to Receive Termination Payments under the Contingent Forward Agreement

In no event will the Issuer pay or receive any termination payment in respect of the Contingent Forward Agreement at any time except to the extent settlement under the Contingent Forward Agreement is pending at the time of an Early Redemption Event or Indenture Event of Default. Accordingly, no Holders of the Notes will be compensated for any loss of the market value of the Contingent Forward Agreement related to such Notes and the Holders of the Notes will be exposed to the risk that the related Underlying Securities are worth less than their par value on the date of the Early Redemption Event or Indenture Event of Default. The value of the Contingent Forward Agreement may be highly volatile, and it is not possible to estimate the amount of the termination payment paid or foregone by the Holders.

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The Swap Counterparty may require the Issuer to redeem the Notes early

Under the terms of the Credit Confirmation under the Swap Agreement, the Swap Counterparty may on any Business Day occurring on or after the Interest Payment Date falling in June, 2008 exercise its right to terminate the Credit Confirmation under the Swap Agreement in whole (but not in part) upon not less than five Business Days' prior notice to the Issuer and the Trustee (such Business Day, being the Optional Early Redemption Date) (after giving effect to any Cash Settlement Amounts payable on or prior to such Optional Early Redemption Date) provided that the Swap Counterparty shall not deliver such a notice unless, in respect of Underlying Securities in respect of the Notes related the Credit Confirmation consisting of assets other than Liquidity Funds or U.S. dollars, the Calculation Agent (as defined in the Indenture) has identified a prospective purchaser (which prospective purchaser may be Morgan Stanley & Co. International plc or an affiliate of Morgan Stanley & Co. International plc) that has agreed to make a firm bid for such Underlying Securities then held by the Issuer, at par or above. On such Optional Early Redemption Date, the Issuer will be required to redeem the Notes related to the Credit Confirmation in whole (and not in part), together with accrued interest up to but excluding the Optional Early Redemption Date. As a result, the Holders of the Notes may receive the principal amount on such Notes earlier than expected, and there can be no assurance that such Holders will be able to reinvest such principal amount in alternative investments at an equivalent rate of interest. See "The Notes—Principal Payments and Redemption—Optional Early Redemption of the Notes" and "The Swap Agreement—Optional Termination" below.

Conflicts of Interest

You should assume that the Swap Counterparty and its affiliates (the "Morgan Stanley Affiliates") will accept deposits from, make loans or otherwise extend credit to, and generally engage in commercial or investment banking or other business with the issuer of the Underlying Securities or a Reference Entity or one or more of their respective affiliates (or another person or entity having obligations relating to the issuer of the Underlying Securities or a Reference Entity) and is most likely to act with respect to such business as if the Notes did not exist, regardless of whether any such action might have an adverse effect on the issuer of the Underlying Securities or a Reference Entity or on a purchaser of the Notes (including, without limitation, any action which might constitute or give rise to a Credit Event). You should assume that the Morgan Stanley Affiliates will vote any interests they may have in obligations of the issuer of the Underlying Securities or a Reference Entity (or of any of their respective affiliates), and purchase or sell such obligations, provide bid and offer prices with respect thereto, affect the market value thereof, and otherwise participate in the secondary market for such obligations as if the Notes did not exist, regardless of whether any such action would have an adverse effect on the issuer of the Underlying Securities, the Underlying Securities, the Reference Entities or the Holders of the Notes.

You should assume that the Morgan Stanley Affiliates will, whether by virtue of the types of relationships described above or otherwise, at the date hereof or at any time hereafter, be in possession of information in relation to the issuer of the Underlying Securities or the Reference Entities or any of their respective obligations which is or may be material in the context of the Notes and which is not or may not be known to the general public. None of the Morgan Stanley Affiliates has any obligation, and the offering of the Notes and the execution of the Swap Agreement does not create any obligation on the part of any Morgan Stanley Affiliate, to disclose to the purchaser of the Notes any such relationship or information (whether or not confidential) and you should assume that the Morgan Stanley Affiliates will not disclose such relationship or information to you.

Legal Investment

The appropriate characterization of the Notes under various legal investment restrictions, and thus the ability of investors subject to those restrictions to purchase the Notes, may be subject to significant interpretative uncertainties. No representation is made as to the proper characterization of the Notes for legal investment purposes, or for risk-weighting, securities valuation, regulatory accounting or other financial institution regulatory regimes of the National Association of Insurance Commissioners, any state insurance commissioner, any federal or state banking authority or any other regulatory body. Investors should consult with their own legal advisors in determining whether, and to what extent, the Notes will constitute legal investments for them and the consequences of such an investment.

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U.S. Federal Income Tax Consequences Relating to the Issuer and the Holders

The Company will be classified as an association taxable as a corporation for U.S. federal income tax purposes. Moreover, although each Series is nominally issued by the Company, the Company intends for U.S. federal income tax purposes, and each investor will be required, to treat each Issuer as a separate corporation. However, due to a lack of directly governing authority, such treatment is not free from doubt. Each prospective investor is urged to consult with its own tax advisors as to the effect of denial of such separate treatment.

The Issuer, the Trustee and the Swap Counterparty will treat, and each Holder will be required to treat, the Swap Agreement as a "notional principal contract" for U.S. federal income tax purposes. However, there is no authority directly addressing the U.S. federal income tax treatment of investments such as the Swap Agreement and it is possible that the Swap Agreement may be recharacterized as some other type of financial instrument of the Swap Counterparty. Such recharacterization may have adverse income tax consequences to Holders.

Each prospective investor is urged to consult with its own tax advisors as to the federal income, state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of the Notes. See "Certain U.S. Federal Income Tax Considerations" herein and the discussion in the Base Private Placement Memorandum under the heading "Certain U.S. Federal Income Tax Considerations" for a more detailed discussion of the U.S. federal income tax issues arising in connection with the purchase, ownership and disposition of the Notes.

Limited Information

This Private Placement Memorandum does not provide detailed information concerning the issuer of the Underlying Securities, the Underlying Securities or the Reference Entities. Holders should do their own review and investigation of the issuer of the Underlying Securities, the Underlying Securities, the Swap Agreement, the Contingent Forward Agreement and the Reference Entities to the same extent as if they were making a direct investment in the Underlying Securities, the Swap Agreement, the Contingent Forward Agreement and obligations of the Reference Entities. Further, Holders should review for themselves the Indenture setting forth the terms of the Notes. A copy of each Confirmation is attached as an annex hereto. Copies of the Master Swap Agreement, the Contingent Forward Agreement and the sets of definitions published by ISDA and forming part of the Swap Agreement and the Contingent Forward Agreement, as well as the Indenture and the other documents executed in connection with the issuance of the Notes, are available upon request from the Trustee.

Ratings

It is expected that the Notes will be rated "AA" by S&P. A security rating is not a recommendation to buy, sell or hold the Notes. There is no assurance that a rating will remain for any given period of time or that a rating will not be lowered or withdrawn by the Rating Agency if, in its judgment, circumstances in the future so warrant. In the event that a rating initially assigned to the Notes is subsequently lowered for any reason, no person or entity is obliged to provide any additional support or credit enhancement with respect to the Notes and the market value of the Notes is likely to be adversely affected.

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THE NOTES

This Private Placement Memorandum Supplement must be read in conjunction with the Base Private Placement Memorandum. To the extent any provision in this Supplement is inconsistent with the Base Private Placement Memorandum, the provisions in this Supplement shall control. The description of the Notes does not purport to be and is not complete. Prospective purchasers should review the Indenture, the Related Agreements and the Portfolio Property in making their decision to purchase any Notes. An index of defined terms used in this Supplement is set forth at Annex E hereto.

Securities Offered .......................................... The U.S.$ 17,914,000 Floating Rate Notes due 2013 (the "Notes") of Series 2007-41, to be issued by the Issuer on the Issue Date pursuant to the Series 2007-41 Indenture (the "Indenture") to be dated as of the Issue Date among the Trustee and the Issuer.

Issuer ............................................................ Morgan Stanley ACES SPC, acting for the account of the Series 2007-41 Segregated Portfolio

Portfolio Property .......................................... All the Issuer's estate, right, title and interest in, to and under, in each case, whether now owned or existing, or hereafter acquired or arising:

(i) the Underlying Securities;

(ii) the Swap Agreement (including the Swap Guarantee);

(iii) the Contingent Forward Agreement (including the Contingent Forward Guarantee) (together with the Swap Agreement, the "Related Agreements");

(iv) any Permitted Investments purchased by the Issuer;

(v) the Collection Account and the Underlying Securities Account or any other accounts of the Issuer held under the Indenture, including all assets, investments and other amounts held in such accounts;

(vi) all present and continuing right, power and authority of the Issuer, in the name and on behalf of the Issuer, as agent and attorney-in-fact, or otherwise, to make claim for and demand performance on, under or pursuant to any of the foregoing, to bring actions and proceedings thereunder or for the specific or other enforcement thereof, or with respect thereto, to make all waivers and agreements, to grant or refuse requests, to give or withhold notices, and to exercise all rights, remedies, powers, privileges and options, to grant or withhold consents and approvals and do any and all things and exercise all other discretionary rights, options, privileges or benefits which the Issuer is or may become entitled to do with respect to the foregoing; and

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(vii) all interest, income, profits or gains with respect to cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Portfolio Property.

The Portfolio Property will provide the sole source of funds for payments in respect of the Notes.

Trustee ........................................................... LaSalle Bank National Association

Distributor...................................................... There is no distributor in respect of the Notes. Prospective holders of the Notes will acquire the Notes directly from the Issuer. Accordingly, all references to, and where applicable any provision relating to, a "Distributor" or "Distributors" in the Indenture (including the Standard Terms (as defined in the Indenture)) will be deleted in respect of the Notes.

Calculation Agent .......................................... Morgan Stanley Capital Services Inc

Issue Date ...................................................... December 13, 2007

Scheduled Maturity Date ............................... June 9, 2013

Maturity Date................................................. The earlier of (i) the Scheduled Maturity Date and (ii) the date on which the Principal Balance of the Notes has been reduced to zero. Under no circumstances will the Notes mature after the Legal Maturity Date of the Initial Underlying Securities, being April 15, 2016.

Issue Price...................................................... 100%

Initial Principal Balance ................................ U.S.$17,914,000

Business Day ................................................. Any day, other than a Saturday or Sunday, that is a day on which commercial banks are generally open for business in the City of New York, Chicago, London and Hong Kong.

Business Day Convention.............................. If any date specified herein is said to be subject to the Business Day Convention, such date, if not a Business Day, will be the next following Business Day.

Holdover ........................................................ Not applicable.

Interest Payments:

Interest Payment Dates........................... The 4th Business Day prior to each of June 14 and December 14 in each year, commencing on the 4th Business Day prior to June 14, 2008 and ending on the earlier of the Optional Early Redemption Date and the Maturity Date, subject to the Business Day Convention (each, an "Interest Payment Date" for the Notes).

Calculation of Interest ............................ Interest payments (each, an "Interest Payment") on the Notes will accrue from the Issue Date until (but excluding) the last day of the last Interest Accrual Period.

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On each Interest Payment Date, the Interest Payment due in respect of the Notes will be equal to (i) the sum obtained by adding the products, determined with respect to each day in the related Interest Accrual Period (such number of days being calculated in accordance with the Day Count Fraction) of (a) the Interest Rate divided by, 360 and (b) the Principal Balance of the Notes on such day minus (ii) if one or more Principal Payment Dates (as defined in the Base Private Placement Memorandum) have occurred with respect to the Notes during such Interest Accrual Period (other than on the first day of such Interest Accrual Period), the aggregate amount of interest paid in respect of such Notes on such Principal Payment Dates.

On any Principal Payment Date that is not also an Interest Payment Date, the Interest Payment due in respect of the Notes in respect of which the relevant Principal Payment is being made will be equal to the product of (A) the number of days in the related Interest Accrual Period up to but excluding such Principal Payment Date, (B) the Interest Rate for the Notes divided by 360 and (C) the sum of the Principal Balance of the Notes being paid and the Principal Balance of the Notes being reduced in connection with any Cash Settlement Amounts being made on such date.

Interest Payment Deferral ...................... With respect to any Interest Payment Date, if the Calculation Agent determines, in its sole discretion acting in good faith and in a commercially reasonable manner, that (i) there is at least one Unsettled Reference Entity and (ii) the Potential Payable Credit Protection Payment with respect to such Unsettled Reference Entities is greater than zero, then an "Interest Payment Deferral" will be applicable for such Interest Payment Date. If there is an Interest Payment Deferral, then the amount of interest payable on the Notes on such Interest Payment Date will be equal to the Minimum Interest Payment for such Interest Payment Date and any other interest otherwise payable on the Notes on such Interest Payment Date will be withheld, deferred and deposited by the Trustee into an account held by the Trustee (the "Provisional Reserve Account").

In connection with and following any Interest Payment Deferral, deferred interest in the amount equal to the Interest Adjustment Payment will be withdrawn from the Provisional Reserve Account and will be payable on the Notes on the first Interest Payment Date following the determination of the Cash Settlement Amount in respect of each Unsettled Reference Entity, together with interest on the Interest Adjustment Payment accrued at the Deferral Rate for the number of days the payment of interest was deferred, as calculated by the Calculation Agent in its sole and absolute discretion. The balance of the Provisional Reserve Account, if any, will be paid to the Swap Counterparty in accordance with the terms of the Rate Confirmation.

"Unsettled Reference Entity" means, as of any date, a Reference Entity in respect of which an Event Determination Date has occurred but the related Cash Settlement Date has not occurred as of such date.

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"Event Determination Date" has the meaning ascribed to such term in the Credit Derivative Definitions incorporated in the Credit Confirmation. See Annex A hereto.

"Potential Payable Credit Protection Payment" means, with respect to the Unsettled Reference Entities, an amount equal to the Cash Settlement Amount calculated assuming that the Weighted Average Final Price with respect to each such Unsettled Reference Entity is zero.

"Weighted Average Final Price" has the meaning ascribed to such term in the Credit Confirmation. See Annex A hereto.

"Minimum Interest Payment" means, with respect to any Interest Payment Date for which an Interest Payment Deferral is applicable, an amount (not less than zero) equal to the amount of interest that would have been payable in relation to the Interest Accrual Period ending on such Interest Payment Date in accordance with the provisions under "Calculation of Interest" above if on each day during such period on which one or more Reference Entities are Unsettled Reference Entities, Cash Settlement Amounts had been determined in respect of each such Unsettled Reference Entity such that the Principal Balance on such day took its minimum possible value.

"Interest Adjustment Payment" means, with respect to the period from (and including) the first day of the Interest Accrual Period during which the relevant Event Determination Date occurs to (but excluding) the last day of the Interest Accrual Period during which the related Cash Settlement Date occurs, an amount equal to (a) the amount of interest that would have been payable in respect of such period if such amount had been determined in accordance with the provisions under "Calculation of Interest" above in the absence of the provisions contained in the first two paragraphs of this section "Interest Payment Deferral" and if the reduction in Principal Balance resulting from the Unsettled Reference Entities had occurred on the relevant Event Determination Date (based on the actual Weighted Average Final Price(s) relating thereto) minus (b) the Minimum Interest Payment in respect thereof.

"Deferral Rate" means such rate of interest as is obtained by the Trustee by depositing any funds withheld in its overnight deposit account for institutional accounts.

Designated Maturity ............................... Six months, provided that "six month LIBOR" will be determined through the use of straight-line interpolation for any Interest Accrual Period that is shorter or longer than six months.

Reuters Page........................................... LIBOR 01

Interest Rate ........................................... Six month LIBOR plus Margin.

Margin .................................................... 1.30% per annum

Day Count Fraction................................ Actual/360

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Interest Accrual Period .......................... With respect to each Interest Payment Date, interest on the Principal Balance of the Notes will accrue during the period (the "Interest Accrual Period") from and including the immediately preceding Interest Period End Date (or, in the case of the first Interest Payment Date, from and including, the Issue Date) to but excluding the immediately succeeding Interest Period End Date (or, in the case of the last Interest Payment Date, to but excluding the last Interest Period End Date, which may be the Accrual Cessation Date), provided that an Interest Accrual Period may end on a Principal Payment Date that is not an Interest Period End Date. Any interest accrued but unpaid on any Interest Payment Date will accrue interest from and including such Interest Payment Date to but excluding the succeeding Interest Payment Date.

Interest Period End Date........................ June 14 and December 14 in each year commencing on the Issue Date and ending on the earliest of (i) June 9, 2013 ("Accrual Cessation Date") and (ii) the Optional Early Redemption Date and (iii) the date on which the Principal Balance of the Notes has been reduced to zero, subject to the Business Day Convention.

Principal Payments and Redemptions:

Before Scheduled Maturity Date ............ Unless redeemed as a result of an Early Redemption Event or an Indenture Event of Default, or on an Optional Early Redemption Date, no payments of principal ("Principal Payments") will be made on the Notes before the Scheduled Maturity Date.

At Scheduled Maturity Date ................... Unless redeemed earlier, the Issuer will redeem each outstanding Note at the Principal Balance of such Note on the Scheduled Maturity Date (with accrued but unpaid interest to but excluding the Accrual Cessation Date), subject to the Priority of Payments.

Sale of Underlying Securities to Morgan Stanley Affiliates ................... In arranging for the sale of any of the Underlying Securities as

referred to in "Description of the Notes—Redemptions—Liquidation of Portfolio Property due to an Early Redemption Event" of the Base Private Placement Memorandum, the Calculation Agent, acting on behalf of the Issuer, may arrange for the sale of all or part thereto to itself or any other Morgan Stanley Affiliate (including, without limitation, the Swap Counterparty), provided that such sale shall not occur until the Notification Deadline (as defined below). The Swap Counterparty, in such capacity, or any Morgan Stanley Affiliate will not at any time be required to purchase any Underlying Securities from the Issuer upon liquidation thereof. Notwithstanding the foregoing, the Underlying Securities may only be sold to a Morgan Stanley Affiliate if (i) such Morgan Stanley Affiliate is the highest bidder and (ii) bids were also received in respect of the Underlying Securities from at least five dealers that are not Morgan Stanley Affiliates. Moreover, if, in respect of an Early Redemption Event, (1) a Defaulted Swap Termination Payment is due to the Swap Counterparty and (2) a Morgan Stanley Affiliate is a bidder in respect of the sale of Underlying Securities, the bid of such Morgan Stanley Affiliate shall not exceed the par amount of the Underlying Securities.

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Reductions in Principal Balance Following Credit Events......................... The Principal Balance of the Notes (pari passu and pro rata

among themselves) will be reduced by the amount of any Cash Settlement Amount paid to the Swap Counterparty by the Issuer under the Credit Confirmation. Such reduction will take effect from and including the relevant Event Determination Date following the determination of such Cash Settlement Amount.

As of any date of determination after the Issue Date, the "Principal Balance" of the Notes will be an amount determined as follows:

(i) the Initial Principal Balance of the Notes; minus

(ii) the aggregate amount of reductions in connection with Cash Settlement Amounts applied to the Principal Balance of such Notes on or before such date, with each such reduction described in this clause (ii) being in an amount equal to the related Cash Settlement Amount (such reduction taking effect from and including the relevant Event Determination Date following the determination of such Cash Settlement Amount) and being applied to reduce the Principal Balance of such Notes until such Principal Balance is reduced to zero; minus

(iii) the aggregate amount of Principal Payments (if any) made in respect of the Notes on or before such date.

"Cash Settlement Amount" has the meaning specified in the Credit Confirmation. See Annex A hereto.

"Event Determination Date" has the meaning specified in the Credit Confirmation. See Annex A hereto.

Swap Guarantee and Contingent Forward Guarantee................. ............... Upon the failure of the Swap Counterparty or the Contingent

Forward Counterparty to punctually pay any amount under the Swap Agreement or Contingent Forward Agreement, respectively, the Trustee shall, or shall procure that the Issuer shall, make such demand upon the Swap Guarantor or Contingent Forward Guarantor, as the case may be, as may be applicable in such circumstances under the Swap Guarantee or Contingent Forward Guarantee, respectively.

Optional Early Redemption of the Notes............................................ If the Swap Counterparty delivers a Termination Notice to the

Issuer and the Trustee in accordance with the Credit Confirmation, the Issuer will be required to redeem the Notes in whole but not in part, on the Optional Termination Date under the Credit Confirmation (such date, being a Business Day, the "Optional Early Redemption Date") with interest in respect of the Interest Accrual Period ending on but excluding the Optional Early Redemption Date. The Swap Counterparty shall not deliver a Termination Notice unless, in connection with Underlying Securities (the "Applicable Portion of Underlying Securities") consisting of assets other than U.S. dollars, the Calculation Agent has identified a prospective purchaser (which prospective purchaser may be Morgan Stanley & Co. International plc or an

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affiliate of Morgan Stanley & Co. International plc) that has agreed to make a firm bid for such Underlying Securities then held by the Issuer, at par or above.

Following the delivery by the Swap Counterparty of a Termination Notice under the Credit Confirmation:

(a) the Issuer (or the Calculation Agent on behalf of the Issuer) shall on or about the Optional Early Redemption Date liquidate the investment in or, as the case may be, sell the Applicable Portion of Underlying Securities (after giving effect to any Cash Settlement Amounts payable on or prior to the Optional Early Redemption Date);

(b) under the Rate Confirmation, the Swap Counterparty shall on the Floating Rate Payer Payment Date (as defined in the Rate Confirmation) immediately preceding the Optional Early Redemption Date pay to the Issuer an amount equal to the interest on the Notes in respect of the Interest Accrual Period ending on but excluding the Optional Early Redemption Date;

(c) the Credit Confirmation will terminate;

(d) the Rate Confirmation will terminate;

(e) no Swap Breakage Fees or other termination payments will be payable under the Rate Confirmation, the Credit Confirmation or the Contingent Forward Confirmation as a result of the termination referred to in paragraphs (c) and (d) above, other than any amounts which should have been paid under such Rate Confirmation or Credit Confirmation as the case may be, on or prior to the Optional Early Redemption Date and which remain unpaid;

(f) the Issuer will redeem the Notes in whole and with interest in respect of the Interest Accrual Period ending on but excluding the Optional Early Redemption Date against delivery of the Note certificates in respect of the Notes; and

(g) upon the redemption of the Notes, the Applicable Portion of Underlying Securities referred to in (a) above shall be released from the security constituted by the Indenture and cease to form part of the Portfolio Property.

Redemption Style…………..................... Following an Early Redemption Event, (i) the Trustee will terminate the Swap Agreement and the Contingent Forward Agreement and (ii) a Holder shall receive from the Issuer, in lieu of its entitlement to its relevant share of the liquidation proceeds of sale of the Underlying Securities, a pro rata share of the Underlying Securities in respect of its Notes subject to and in accordance with the provisions below.

Specified Currency ................................. United States Dollars

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Authorized Denominations ..................... U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof, or such lesser denomination as consented to by the Issuer

Minimum Subscription…………………. U.S.$100,000 or such lesser denomination as consented to by the Issuer

Listing .................................................... The Notes will not be admitted to trading on the Irish Stock Exchange or listed on any other stock exchange.

Ratings.................................................... It is expected that the Notes will be rated "AA" by Standard and Poor's Ratings Services, a division of The McGraw Hill Companies ("S&P" or the "Rating Agency").

U.S. Federal Income Tax Considerations................................. The Issuer intends to treat the Notes as equity of the Issuer for U.S.

federal income tax purposes. Each Holder of a Note, by acceptance of an interest in such Note will agree to treat such Note as equity of the Issuer for U.S. federal income tax purposes. However, this treatment will not be binding on the IRS and no assurance can be provided that the IRS will respect such position.

Prospective investors are urged to consult with their tax advisors as to their ability to make, and the likely impact of their making, an election to treat the issuer as a QEF. See "Certain U.S. Federal Income Tax Considerations" herein and the discussion in the Base Private Placement Memorandum under the heading "Certain U.S. Federal Income Tax Considerations" for a more detailed discussion of this and other U.S. federal income tax issues.

ERISA ..................................................... See "Certain ERISA and Other U.S. Considerations" in the Base Private Placement Memorandum.

Tax Treatment......................................... The Notes will be treated as Equity Notes.

Transfer Restrictions .............................. The Notes have not been and will not be registered under the Securities Act and the Issuer will not be registered under the Investment Company Act. The Notes will be offered only to non-U.S. persons in offshore transactions in reliance and in accordance with Regulation S under the Securities Act, in each case in Authorized Denominations for any single beneficial owner. Each purchaser of the Notes (whether by initial purchase or by transfer) will be deemed to have made the representations and agreements set forth in the Notice to Investors and the Transfer Restrictions sections herein.

Each Holder and beneficial owner of a Note acknowledges and agrees that (a) the Issuer may obtain or be in possession of non-public information regarding any Reference Entity or the issuer of any Reference Obligation which may not be made available to any Holder and (b) the Issuer makes no representations with respect to any Reference Entity, the issuer of any Reference Obligation or the accuracy or completeness of any information regarding the foregoing.

Form ....................................................... The Notes will be represented by one or more Definitive Notes in registered form. The Notes will initially be represented by a

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Definitive Note registered in the name of Cox & Co as nominee of The Hongkong and Shanghai Banking Corporation Limited as custodian for Pinnacle Performance Limited.

Amendments to the Base Private Placement Memorandum………………..

The last paragraph of the section "DESCRIPTION OF THE NOTES - Liquidation of Portfolio Property Due to an Early Redemption Event" shall not apply, notwithstanding any other provision to the contrary.

Other Information................................... Reg S:

CUSIP No.: G6265JAA6 ISIN No.: USG6265JAA63

Trustee Information ................................ Effective October 1, 2007, Bank of America Corporation, parent corporation of Bank of America, N.A. and Banc of America Securities LLC, acquired ABN AMRO North America Holding Company, parent company of LaSalle Bank Corporation and LaSalle Bank National Association, from ABN AMRO Bank N.V. The acquisition included all parts of the Global Securities and Trust Services Group within LaSalle Bank National Association engaged in the business of acting as trustee, securities administrator, master servicer, custodian, collateral administrator, securities intermediary, fiscal agent and issuing and paying agent in connection with securitization transactions.

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THE PORTFOLIO PROPERTY The Underlying Securities

The Private Placement Memorandum does not provide detailed information with respect to the Underlying Securities. An investor in the Notes should obtain and evaluate the same information concerning the Underlying Securities as it would if it were investing directly in the Underlying Securities.

The Issuer has obtained the information set forth herein with respect to the Underlying Securities from official or other sources which the Issuer believes to be reliable. The Issuer has not independently verified any of this information and makes no representation or warranty about its accuracy or completeness.

The issuer of the Underlying Securities has not participated in the offering of the Notes or the preparation of this Private Placement Memorandum.

Underlying Securities .................................... "Underlying Securities" means the Initial Underlying Securities or, in the circumstances described in "Description of the Notes - Redemptions - Investment in Substitute Underlying Securities" in the Base Private Placement Memorandum, any of the following (each, a "Substitute Underlying Security") selected by the Calculation Agent in its sole and absolute discretion (provided that, in the case of clauses (i), (iii), (iv), (v), (vi) and (vii) below, at the time of purchase of the relevant asset, the maturity date of such securities or obligations falls not later than the Scheduled Maturity Date or the Extended Maturity Date):

(i) any U.S. dollar-denominated senior debt securities of the United States of America issued by the U.S. Treasury Department and backed by the full faith and credit of the United States of America; and/or

(ii) U.S. dollar denominated cash which shall be held with a bank with a S&P rating of at least A-1+ if to be held in the form of cash for more than 20 Business Days; and/or

(iii) any U.S. dollar-denominated investment that is a money market fund or liquidity fund or similar investment vehicle that principally invests in short term fixed income obligations, including, without limitation, any investment vehicle for which the Calculation Agent or the Trustee, or an affiliate of any of them, provides services, provided that at the time such investment is entered into in respect of such Notes (w) such fund has a S&P rating of at least "AAAm", (x) such fund distributes interest or dividends on such investment on a regular basis and at least once a quarter, (y) that all payments made by such fund are not subject to any withholding tax and (z) the Issuer shall not invest in any one such money market fund or liquidity fund an amount exceeding, in the aggregate, 10 per cent. of the share capital of such fund unless the Rating Agency Condition is satisfied prior to any investment in such fund; and or

(iv) subject to the satisfaction of the Rating Agency Condition, any U.S. dollar-denominated Covered Bonds, Asset-Backed Securities, RMBS, CMBS, Corporate Bonds, Agency Bonds or similar securities having at the time of investment a rating of "AAA" by S&P;

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where:

"Agency Bond" means a bond issued by a US government-sponsored agency, including without limitation, Student Loan Marketing Association (Sallie Mae), Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac).

"Asset-Backed Securities" means bonds or notes backed by loan paper or accounts receivable originated by banks, credit card companies or other providers of credit.

"CMBS" means securities (other than any commercial loan or participation interest in a commercial loan) that entitle holders to receive payments that depend (except for rights or other assets designed to assure the servicing or timely distribution of proceeds to holders of such securities) on the cashflows from a commercial mortgage loan or a pool of commercial mortgage loans.

"Covered Bonds" means bank bonds for which repayment of principal and interest is guaranteed by a portion of the bank’s economic assets (specifically land and mortgage credits, amounts due from, or guaranteed by, public authorities and securities issued in the framework of securitisation operations covering credits of the same kind), the cashflows of which are allocated purely to servicing the bond; including, without limitation, Pfandbrief, Cedulas and Foncières.

"Corporate Bond" means a bond issued by a corporation.

"RMBS" means asset backed securities that entitle the holders to receive payments that depend (except for rights or other assets designed to assure the servicing or timely distribution of proceeds to holders of such asset backed securities) on the cashflows from a pool of residential mortgage loans or from a mixed pool of residential and commercial mortgage loans.

(v) subject to the satisfaction of the Rating Agency Condition, any guaranteed investment contract or other similar agreement between the Issuer and any monoline insurer, bank or other entity or corporation with a rating of at least "AAA" by S&P; and/or

(vi) subject to the satisfaction of the Rating Agency Condition, any time deposit, demand deposit, certificate of deposit or banker’s acceptance offered held or guaranteed by any bank, depository institution, trust company, other entity or corporation rated at least A-1+ by S&P; and/or

(vii) subject to the satisfaction of the Rating Agency Condition, any other U.S. dollar-denominated securities or other obligation with a published rating of "AAA" by S&P.

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For the avoidance of doubt, in the case of clauses (i) to (vii) above, the approval of the Holders will not be required for any investment in Substitute Underlying Securities and, in the case of clauses (i) to (iii) above, the approval of the Rating Agency will not be required.

Initial Underlying Securities

The Initial Underlying Securities .......... On the Issue Date, the Issuer will purchase U.S.$17,914,000 principal amount of the U.S.$300,000,000 Class A (2006-8) Series Notes issued by the Initial Underlying Securities Issuer on June 30, 2006 with CUSIP# I4041NCX7 (the "Initial Underlying Securities").

Issuer ...................................................... Capital One Multi-Asset Execution Trust (the "Initial Underlying Securities Issuer").

Scheduled Maturity Date........................ June 17, 2013 ("Initial Underlying Securities Maturity Date"), which is before the Scheduled Maturity Date of the Notes. Upon such Initial Underlying Securities Maturity Date, in the event the Notes are still outstanding, the proceeds of redemption of the Initial Underlying Securities shall be invested by the Trustee in Substitute Underlying Securities or Permitted Investments.

Legal Maturity Date .............................. April 15, 2016

Currency ................................................. United States Dollars

Interest Rate............................................ One-month LIBOR plus 0.03% per annum where LIBOR is calculated and reset in the manner and at the times specified in the Initial Underlying Securities Prospectus. Interest payable on the Initial Underlying Securities is to be paid to the Swap Counterparty under the Rate Confirmation.

Interest Payment Dates ........................... Accrued interest on the Initial Underlying Securities is payable in arrear on the 15th day of each calendar month (or the next business day) commencing on December 15, 2007 (each an "Initial Underlying Securities Payment Date").

Application of Underlying Securities ............ Where at the relevant time, the Underlying Securities consist of Liquidity Funds or U.S. dollars, on each Interest Payment Date, the Trustee will withdraw from the Underlying Securities Account an amount equal to the amount by which the balance of the Underlying Securities Account at the close of business on the Business Day prior to such Interest Payment Date is greater than the aggregate Initial Principal Balance of the Notes, provided that such amount shall not be more than the amount equal to the amount by which the Underlying Securities Account Balance exceeds the aggregate amount of the Principal Balance of the Notes. The amount withdrawn from the Underlying Securities Account will be paid to the Swap Counterparty on the relevant Interest Payment Date in accordance with the Rate Confirmations.

Where, at the relevant time, the Underlying Securities in respect of the Notes consist of Liquidity Funds or U.S. dollars:

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(a) on any Cash Settlement Date in respect of the Credit Confirmation, the Trustee will pay to the Swap Counterparty in accordance with the Credit Confirmation an amount equal to the Cash Settlement Amount (as defined in the relevant Credit Confirmation), provided that if the Cash Settlement Amount exceeds the total par amount of the Underlying Securities in respect of the Notes, the Trustee will only pay an amount equal to such par amount.

(b) on the Maturity Date of the Notes, unless an Indenture Event of Default or an Early Redemption Event has occurred, the Trustee will liquidate the investment in the Underlying Securities in respect of the Notes and the Issuer will pay the Swap Counterparty an amount equal to the proceeds of such liquidation and the Swap Counterparty will pay the Issuer an amount equal to the Principal Balance of the Notes, in accordance with the relevant Rate Confirmation.

Where, at the relevant time, the Underlying Securities consist of other assets other than Liquidity Funds or U.S. dollars:

(i) On any Cash Settlement Date in respect of the Credit Confirmation, the Issuer will deliver to the Contingent Forward Counterparty the par amount of the Underlying Securities equal to the lesser of the Cash Settlement Amount payable on such Cash Settlement Date under the Credit Confirmation and the par or payable amount of the Underlying Securities in respect of the Notes and the Contingent Forward Counterparty will pay the Issuer an amount equal to the par or payable amount of the Underlying Securities delivered, in accordance with the relevant Contingent Forward Confirmation.

(ii) On the Business Day preceding the Maturity Date of the Notes, unless an Indenture Event of Default or an Early Redemption Event has occurred in respect of the Notes, the Issuer will deliver to the Contingent Forward Counterparty the par or payable amount of the Underlying Securities in respect of the Notes and the Contingent Forward Counterparty will pay the Issuer an amount equal to the par or payable amount of the Underlying Securities delivered, in accordance with the relevant Contingent Forward Confirmation, and the Trustee will apply such funds in and towards, first, payment of any outstanding Cash Settlement Amounts under the Credit Confirmation) and then redemption of the Notes.

If an Indenture Event of Default or an Early Redemption Event has occurred, subject to the terms of the Indenture, the Trustee will liquidate the investment in the Underlying Securities and the proceeds of such liquidation will be applied in accordance with the Priority of Payments.

If an Optional Early Redemption Date occurs in respect of the Notes, the Issuer (or the Calculation Agent on behalf of the Issuer) will liquidate the investment in or, as the case may be, sell to a

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third party the Underlying Securities in respect of the Notes (after giving effect to any Cash Settlement Amounts payable under the Credit Confirmation on or prior to such date) and apply the proceeds in and towards redemption of the Notes.

The Trustee will notify the Rating Agency of any redemption of the Underlying Securities, any purchase of Substitute Underlying Securities and any material adverse change in respect of any Underlying Securities.

The Initial Underlying Securities are discussed in the Prospectus Supplement dated June 27, 2006 and the Prospectus dated May 22, 2006 relating to the Initial Underlying Securities attached as Annex D hereto (the "Initial Underlying Securities Prospectus"). The Initial Underlying Securities Prospectus is provided for ease of reference and does not form part of the Private Placement Memorandum.

Investment in Substitute Underlying Securities .................................... If:

(a) the Initial Underlying Securities are repaid in full following redemption by the Initial Underlying Securities Issuer in the circumstances described in the Initial Underlying Securities Prospectus prior to the Scheduled Maturity Date; or

(b) if the Calculation Agent reasonably believes that there is a potential Underlying Securities Default; or

(c) the Calculation Agent, in its sole and absolute discretion, notifies the Issuer to liquidate the investment in the Underlying Securities (which notice may only be given once by the Calculation Agent while the Notes are outstanding) and the Calculation Agent on behalf of the Issuer liquidates the investment in the Underlying Securities,

then the Calculation Agent, acting on behalf of the Issuer, may, at any time after receipt of the balance of the Underlying Securities Account instruct the Trustee to invest such amount in Substitute Underlying Securities, provided that (i) any such Substitute Underlying Securities satisfy the criteria set forth in the definition of Underlying Securities and (ii) security is granted simultaneously with such Substitute Underlying Securities and in respect thereof. Upon investment in the Substitute Underlying Securities, the relevant payment due to the Swap Counterparty from the Issuer under the Rate Confirmation will be adjusted to reflect the interest rate or distribution rate in respect of such Substitute Underlying Securities.

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The Swap Agreement

This description of the Swap Agreement does not purport to be complete. The general terms of the Swap Agreement are set out under "Portfolio Property - Applicable Swap Agreements" in the Base Private Placement Memorandum. Prospective purchasers should review the Swap Agreement (including the Confirmations executed thereunder) in making their decision to purchase any Notes. Copies of the forms of the Credit Confirmation and the Rate Confirmation to be executed are attached as Annex A and Annex B hereto, respectively. Copies of the Master Swap Agreement, the ISDA Definitions and the ISDA Credit Derivatives Definitions (as defined in the Credit Confirmation) and forming part of the Swap Agreement are available upon request from the Trustee.

Swap Agreement ........................................... The Swap Agreement will consist of (i) the 1992 ISDA Master Agreement (Multicurrency-Cross Border) published by ISDA and the schedule thereto entered into by the Issuer and the Swap Counterparty on January 25, 2007 (the "Master Swap Agreement"), (ii) the Credit Confirmation, (iii) the Rate Confirmation, each dated as of the Issue Date, and (iv) the Swap Guarantee (collectively, as amended and supplemented, the "Swap Agreement").

Swap Counterparty ........................................ Morgan Stanley Capital Services Inc.

Swap Guarantee............................................. The unconditional and irrevocable guarantee, dated as of January 25, 2007, issued by the Swap Guarantor in respect of the payment obligations of the Swap Counterparty under the Swap Agreement.

Swap Guarantor ............................................. Morgan Stanley

Swap Calculation Agent ................................ Morgan Stanley Capital Services Inc

Scheduled Termination Date ......................... June 9, 2013, subject to earlier termination in accordance with its terms.

Additional Termination Events...................... In addition to the Additional Termination Events set out under "Portfolio Property – Applicable Swap Agreements – Swap Termination Events" in the Base Private Placement Memorandum, each of a Default Swap Counterparty Downgrade and a Rate Swap Counterparty Downgrade will be an "Additional Termination Event."

Credit Confirmation....................................... There will be one credit default swap transaction under the Swap Agreement linked to the Notes. This transaction will be linked to a portfolio of reference assets. The credit default swap transaction will be evidenced by a confirmation and a schedule attached as Schedule C, identifying the specific terms of the transaction entered into by the Issuer and the Swap Counterparty on the Issue Date and incorporating the provisions of the Master Swap Agreement (as amended and supplemented, the "Credit Confirmation"). The form of the Credit Confirmation, including the Reference Portfolio attached as Schedule A thereto, is attached as Annex A hereto.

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Optional Termination .................................... Under the Credit Confirmation, the Swap Counterparty may on any Business Day occurring on or after the Business Day following the Fixed Rate Payer Payment Date falling in June, 2008 (corresponding to the Interest Payment Date falling in June, 2008), exercise its right to terminate the Credit Confirmation in whole (but not in part) upon not less than five Business Days' prior notice (such notice, a "Termination Notice") to the Issuer and the Trustee. The Swap Counterparty has agreed that it shall not deliver a Termination Notice unless, in connection with Underlying Securities consisting of assets other than Liquidity Funds or U.S. dollars, the Calculation Agent (as defined in the Indenture) has identified a prospective purchaser (which prospective purchaser may be Morgan Stanley & Co. International plc or an affiliate of Morgan Stanley & Co. International plc) that has agreed to make a firm bid for such Underlying Securities then held by the Issuer, at par or above.

Credit Events ................................................. The Credit Events that will apply with respect to any Reference Entity specified in the Reference Portfolio attached as Schedule A to the Credit Confirmation, and by reference to the relevant type specified therein, are specified in the relevant section of the ISDA Credit Derivatives Physical Settlement Matrix to the 2003 ISDA Credit Derivatives Definitions (the "Matrix") (the relevant sections of which are set out in Schedule B to the Credit Confirmation), provided that to the extent there are any inconsistencies between the Matrix and Schedule B to the Credit Confirmation, the Matrix as of the Trade Date (as defined in the Credit Confirmation) shall prevail, and the Swap Counterparty in its discretion acting in good faith and in a commercially reasonable manner shall apply the provisions of the Matrix to the extent applicable to such Reference Entity in accordance with standard market practice as at the Trade Date. See Schedule A and Schedule B to the Credit Confirmation attached hereto.

Rate Confirmation ......................................... The interest rate swap transaction under the Swap Agreement will be evidenced by the interest rate swap confirmation (the form of which is attached as Annex B hereto) entered into by the Issuer and the Swap Counterparty on the Issue Date and incorporating the provisions of the Master Swap Agreement (as amended and supplemented, the "Rate Confirmation").

Rate Swap Counterparty Downgrade .................................................... In respect of the Swap Counterparty, the occurrence of a Rate

Swap Counterparty Downgrade shall constitute an Additional Termination Event; provided, that a Rate Swap Counterparty Downgrade shall not constitute an Additional Termination Event if the Swap Counterparty takes one of the following actions at its sole expense: in the event of a Rate Swap Counterparty Downgrade described in the definition thereof, within three Business Days after the Calculation Agent (as defined in the Rate Confirmation) or the Trustee has notified the Swap Counterparty in writing that a Rate Swap Counterparty Downgrade has occurred, (i) the Swap Counterparty posts Rate Swap Collateral for the benefit of the Issuer, (ii) the Swap Counterparty has elected to designate, by written notice to the Issuer, the Calculation Agent and the Rating Agency, a Substitute Swap Counterparty in respect

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of the transactions under the Swap Agreement within three Business Days of the occurrence of such Rate Swap Counterparty Downgrade and such substitution shall occur within thirty days of such Rate Swap Counterparty Downgrade, (iii) the Swap Counterparty has, within ten Business Days of the occurrence of such Rate Swap Counterparty Downgrade, procured the appointment of an Eligible Credit Support Provider with respect to the Swap Counterparty's obligations hereunder and such appointment shall occur within thirty days of such Rate Swap Counterparty Downgrade, or (iv) the Swap Counterparty has complied with such other collateral posting requirements, if any, with respect to the Transaction, in connection with which the Rating Condition has been met. In the event of an Additional Termination Event under this section, the Swap Counterparty shall be deemed the sole Affected Party.

"Additional Eligible Collateral" means any of the following investments:

(i) direct obligations of, and obligations fully guaranteed by, the United States, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit System or any agency or instrumentality of the United States the obligations of which are explicitly backed by the full faith and credit of the United States of America; provided that obligations of, or guaranteed by, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the Federal Farm Credit System shall be Additional Eligible Collateral only if, at the time, and during the course, of investment, it has at least the credit rating of "A-1+" or "AAA" by S&P;

(ii) demand and time deposits in, interest bearing trust accounts, certificates of deposit of, or bankers' acceptances issued by any depository institution or trust company (including the Trustee or any agent of the Trustee acting in their respective commercial capacities) incorporated under the laws of the United States or any State and subject to supervision and examination by Federal and/or State banking authorities so long as the commercial paper and/or the short-term debt obligations of such depository institution or trust company at the time of, and during the course of, such investment or contractual commitment providing for such investment have at least the credit rating of "A-1+" or "AAA" by S&P (or, in the case of a depository institution which is the principal subsidiary of a holding company, the commercial paper or other short-term debt obligations of such holding company have a credit rating of "A-1+" or "AAA" by S&P);

(iii) commercial paper having a maturity of not more than 180 days and having at the time, and during the course, of such investment at least the credit rating of "A-1+" by S&P;

(iv) repurchase agreements with respect to (a) any security described in clause (i) above or (b) any other security issued

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or guaranteed by an agency or instrumentality of the United States with an entity having the credit rating of "A-1+" or "AAA" by S&P. Copies of any repurchase agreement entered into will be delivered to S&P.

"Applicable Rating(s)" means, with respect to any entity and the Rating Agency, at the time of such measurement, the higher of (x) the ratings assigned by such Rating Agency with respect to long term or short term, as applicable, senior unsecured debt of such entity or (y) the ratings assigned by such Rating Agency with respect to the long term or short term, as applicable, senior unsecured debt of any Credit Support Provider of such entity.

"Collateralizing Securities" means Permitted Investments or Additional Eligible Collateral posted by the Swap Counterparty as collateral in accordance with the provisions hereof; provided, however, that the restriction on the maturity of the securities described in clause (i) and clause (ii) of the definition of "Permitted Investments" shall be deemed not to apply.

"Eligible Credit Support Provider" means an entity which (a) has agreed in writing to act as a Credit Support Provider (as defined in the Swap Agreement) in respect of Party A's obligations hereunder, (b) at the time of such agreement, the Applicable Rating in respect of such entity is at least "A-1" (short term) by the Rating Agency or, if such entity does not have a short term rating, "A+" (long term) by the Rating Agency and (c) the Rating Condition is satisfied; provided, that, if Morgan Stanley or any Affiliate thereof (each, a "Morgan Stanley Designee") is designated as a Substitute Swap Counterparty, the Applicable Ratings in respect of such Morgan Stanley Designee, must be at least (1) the aforementioned ratings or (2) if such Morgan Stanley Designee posts Collateralizing Securities as described above, such lower ratings that, as described therein, will not cause a Rate Swap Counterparty Downgrade to result in an Additional Termination Event, or, in any event, any lower rating as to which the Rating Condition is satisfied.

"Rate Swap Collateral" means Collateralizing Securities in an amount, as determined by the Calculation Agent, sufficient to provide the Issuer an amount equal to the Floating Amount II payable on the next following Floating Rate II Payer Payment Date (each such term as defined in the Rate Confirmation). The amount that constitutes Rate Swap Collateral, and any Collateralizing Securities previously posted as Rate Swap Collateral, shall be recalculated by the Calculation Agent on a weekly basis and failure to restore compliance with the requirements set out in the first paragraph of this "—Rate Swap Counterparty Downgrade" section within five Business Days of such recalculation shall constitute an Additional Termination Event.

"Rate Swap Counterparty Downgrade" means the Applicable Ratings in respect of the Swap Counterparty are downgraded to less than "A-1" (short term) by the Rating Agency or, if such entity does not have a short term rating, "A+" (long term) by the Rating Agency. If the Rating Agency introduces new criteria setting out a

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lower rating threshold requirement, such new criteria shall apply to the Rate Confirmation without further action by any person. Notwithstanding the foregoing, if the Applicable Rating in respect of the Swap Counterparty is greater than or equal to the current S&P rating in terms of the Notes, no Rate Swap Counterparty Downgrade shall be deemed to occur.

"Rating Condition" means, with respect to any action subject to such condition, that the Rating Agency has notified the Issuer and the Trustee in writing that such action will not result in a reduction or withdrawal of the then current rating of the Notes rated by such Rating Agency.

"Substitute Swap Counterparty" means a counterparty (A) (i) as to which the Swap Counterparty has agreed to transfer all of its rights and obligations under the Swap Agreement and such transfer has satisfied the Rating Condition and (ii) that has agreed to assume all such rights and obligations, and (B) at the time such Substitute Swap Counterparty is designated by the Calculation Agent in accordance with the terms hereof, the Applicable Rating in respect of such Substitute Swap Counterparty is at least "A-1" (short term) by the Rating Agency or, if such entity does not have a short term rating, "A+" (long term) by the Rating Agency; provided that, if Morgan Stanley or any affiliate thereof (each, a "Morgan Stanley Designee") is designated as a Substitute Swap Counterparty, the Applicable Ratings in respect of such Morgan Stanley Designee, must be at least (1) the aforementioned ratings or (2) if such Morgan Stanley Designee posts Collateralizing Securities as described above, such lower ratings that, as described therein, will not cause a Rate Swap Counterparty Downgrade to result in an Additional Termination Event, or, in any event, any lower rating as to which the Rating Condition is satisfied.

Effect of a Termination Notice ............................................................ If the Swap Counterparty delivers a Termination Notice pursuant

to the Credit Confirmation, with effect from the Optional Termination Date, the Credit Confirmation and the Rate Confirmation shall terminate.

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The Contingent Forward Agreement

This description of the Contingent Forward Agreement does not purport to be complete. The general terms of the Contingent Forward Agreement are set out under "Portfolio Property - Applicable Contingent Forward Agreement" in the Base Private Placement Memorandum. Prospective purchasers should review the Contingent Forward Agreement (including the Confirmation executed thereunder) in making their decision to purchase any Notes. A copy of the form of Contingent Forward Confirmation to be executed is attached as Annex C hereto. Copies of the Master Contingent Forward Agreement and the Bond Option Definitions forming part of the Contingent Forward Agreement are available upon request from the Trustee.

Contingent Forward Agreement .................... The Contingent Forward Agreement will consist of (i) the 1992 ISDA Master Agreement (Multicurrency-Cross Border) published by ISDA and the schedule thereto entered into by the Issuer and the Contingent Forward Counterparty on August 5, 2004 (the "Master Contingent Forward Agreement"), (ii) the Contingent Forward Confirmation, dated as of the Issue Date, and (iii) the Contingent Forward Guarantee (collectively, as amended and supplemented, the "Contingent Forward Agreement").

Contingent Forward Counterparty ................. MS Remora Ltd.

Contingent Forward Guarantee...................... The unconditional and irrevocable guarantee, dated as of August 5, 2004, issued by the Contingent Forward Guarantor in respect of the payment obligations of the Contingent Forward Counterparty under the Contingent Forward Agreement.

Contingent Forward Guarantor...................... Morgan Stanley

Scheduled Termination Date ......................... The Scheduled Maturity Date as defined under the Credit Confirmation subject to earlier termination in accordance with its terms.

Additional Termination Events...................... In addition to the Additional Termination Events set out under "Portfolio Property – Applicable Contingent Forward Agreement – Contingent Forward Termination Events" in the Base Private Placement Memorandum, an Additional Termination Event will occur if the Indenture is supplemented, amended or modified or any provision thereof is waived, in each case, without the prior written consent of the Swap Counterparty and such supplement, amendment, modification or waiver is, in the reasonable judgment of the Swap Counterparty, materially adverse to the interests of the Swap Counterparty.

Contingent Forward Confirmation ................ The contingent forward transaction under the Contingent Forward Agreement (the "Contingent Forward Transaction") will be evidenced by the contingent forward confirmation (the form of which is attached as Annex C hereto) entered into by the Issuer and the Contingent Forward Counterparty on the Issue Date (as amended and supplemented, the "Contingent Forward Confirmation").

Effect of a Termination Notice ...................... The Issuer will not be entitled to exercise a Contingent Forward Transaction if the Swap Counterparty delivers a Termination Notice pursuant to the Credit Confirmation. In such circumstances, the Issuer will be required to liquidate the

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Underlying Securities in respect of the Notes to redeem the Notes, where relevant, by sale to a third party purchaser. The Swap Counterparty has agreed that it shall not deliver a Termination Notice unless, in connection with the Underlying Securities consisting of assets other than Liquidity Funds or U.S. dollars, it has identified a prospective purchaser (which prospective purchaser may be Morgan Stanley & Co. International plc or an affiliate of Morgan Stanley & Co. International plc) that has agreed to make a firm bid for such Underlying Securities then held by the Issuer, at par or above. Upon such redemption of the Notes, the Contingent Forward Transaction will terminate.

Contingent Forward Counterparty Downgrade .................................................... In respect of the Contingent Forward Counterparty, the occurrence

of a Contingent Forward Counterparty Downgrade shall constitute an Additional Termination Event; provided, that the occurrence of a Contingent Forward Counterparty Downgrade shall not constitute an Additional Termination Event if the Swap Counterparty takes one of the following actions at its sole expense (i) in the event of a Contingent Forward Counterparty Downgrade described in the definition thereof, within three Business Days after the Calculation Agent or the Trustee has notified the Contingent Forward Counterparty in writing in writing that a Contingent Forward Counterparty Downgrade has occurred, the Contingent Forward Counterparty posts Underlying Securities Deficiency Collateral for the benefit of the Issuer; (ii) the Contingent Forward Counterparty has elected to designate, by written notice to the Issuer, the Calculation Agent and the Rating Agencies, a Substitute Contingent Forward Counterparty in respect of the Contingent Forward Confirmation within three Business Days of the occurrence of such Contingent Forward Counterparty Downgrade and such substitution shall occur within thirty days of such Contingent Forward Counterparty Downgrade; (iii) the Contingent Forward Counterparty has within ten Business Days of the occurrence of such Contingent Forward Counterparty Downgrade, procured the appointment of an Eligible Credit Support Provider with respect to the Contingent Forward Counterparty's obligations hereunder and such appointment shall occur within thirty days of such Contingent Forward Counterparty Downgrade, or (iv) the Contingent Forward Counterparty has complied with such other collateral posting requirements, if any, with respect to the Contingent Forward Confirmation, in connection with which the Rating Condition has been met. In the event of an Additional Termination Event under this paragraph, the Contingent Forward Counterparty shall be deemed the sole Affected Party.

"Additional Eligible Collateral" means any of the following investments:

(i) direct obligations of, and obligations fully guaranteed by, the United States, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit System or any agency or instrumentality of the United States the obligations of which

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are explicitly backed by the full faith and credit of the United States of America; provided that obligations of, or guaranteed by, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the Federal Farm Credit System shall be Additional Eligible Collateral only if, at the time, and during the course, of investment, it has at least the credit rating of "A-1+" or "AAA" by the Rating Agency;

(ii) demand and time deposits in, interest bearing trust accounts, certificates of deposit of, or bankers' acceptances issued by any depository institution or trust company (including the Trustee or any agent of the Trustee acting in their respective commercial capacities) incorporated under the laws of the United States or any State and subject to supervision and examination by Federal and/or State banking authorities so long as the commercial paper and/or the short-term debt obligations of such depository institution or trust company at the time of, and during the course of, such investment or contractual commitment providing for such investment have at least the credit rating of "A-1+" or "AAA" by the Rating Agency (or, in the case of a depository institution which is the principal subsidiary of a holding company, the commercial paper or other short-term debt obligations of such holding company have a credit rating of "A-1+" or "AAA" by the Rating Agency);

(iii) commercial paper having a maturity of not more than 180 days and having at the time, and during the course, of such investment at least the credit rating of "A-1+" by the Rating Agency;

(iv) repurchase agreements with respect to (a) any security described in clause (i) above or (b) any other security issued or guaranteed by an agency or instrumentality of the United States with an entity having the credit rating of "A-1+" or "AAA" by the Rating Agency. Copies of any repurchase agreement entered into will be delivered to the Rating Agency.

"Applicable Rating(s)" means, with respect to any entity and the Rating Agency, at the time of such measurement, the higher of (x) the ratings assigned by such Rating Agency with respect to long term or short term, as applicable, senior unsecured debt of such entity or (y) the ratings assigned by such Rating Agency with respect to the long term or short term, as applicable, senior unsecured debt of any Credit Support Provider of such entity.

"Contingent Forward Collateralizing Securities" means (1) Permitted Investments, provided, however, that the restriction on the maturity of the securities described in clause (i) and clause (ii) of the definition of "Permitted Investments" shall be deemed not to apply; (2) Additional Eligible Collateral and/or (3) any securities issued by the issuer of the Underlying Securities of the same series as the Underlying Securities; provided, however, that the Underlying Securities remain rated AAA.

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"Contingent Forward Counterparty Downgrade" means the Applicable Ratings in respect of the Contingent Forward Guarantor are downgraded to less than "A+" (long-term) or "A-1" (short- term) by the Rating Agency. If the Rating Agency introduces new criteria setting out a lower rating threshold requirement or a lower Underlying Securities Deficiency Collateral requirement, such new criteria shall apply to the Contingent Forward Confirmation without further action by any person. Notwithstanding the foregoing, if the long-term issuer credit rating of the Contingent Forward Guarantor is greater than or equal to the current rating of the Notes by the Rating Agency, no Contingent Forward Counterparty Downgrade shall be deemed to occur.

"Outstanding Principal Notional Amount" has the meaning given to Outstanding Principal Notional Amount in the Credit Default Swap Confirmation.

"Rating Condition" means, with respect to any action subject to such condition, that each relevant Rating Agency has notified the Issuer and the Trustee in writing that such action will not result in a reduction or withdrawal of the then current rating of the Notes rated by such Rating Agency.

"Substitute Contingent Forward Counterparty" means a counterparty (A) (i) as to which the Contingent Forward Counterparty has agreed to transfer all of its rights and obligations under the Contingent Forward Agreement and such transfer has satisfied the Rating Condition and (ii) that has agreed to assume all such rights and obligations, and (B) at the time such Substitute Contingent Forward Counterparty is designated by the Calculation Agent in accordance with the terms hereof, the Applicable Ratings in respect of such Substitute Contingent Forward Counterparty are at least "A+" (long term) and at least "A-1" (short term) by the Rating Agency; provided that, if Morgan Stanley or any affiliate thereof (each, a "Morgan Stanley Designee") is designated as a Substitute Contingent Forward Counterparty, such Morgan Stanley Designee must (1) have the aforementioned ratings, (2) post Contingent Forward Collateralizing Securities in an amount that will not cause a Contingent Forward Counterparty Downgrade to result in an Additional Termination Event, or (3) otherwise satisfy the Rating Condition.

"Underlying Securities Deficiency Collateral" means Contingent Forward Collateralizing Securities in an amount, as determined by the Swap Counterparty, equal to the difference of (a) the Outstanding Principal Notional Amount minus (b) the product of (x) the then market value of the Underlying Securities (expressed as a percentage of the outstanding principal balance of such Underlying Securities) multiplied by (y) the Advance Rate (as defined in the Contingent Forward Agreement), if applicable, multiplied by (z) the then Outstanding Principal Notional Amount. The market value of the Underlying Securities, and any Underlying Securities Deficiency Collateral previously posted, shall be recalculated on a weekly basis and failure to restore compliance with the requirements of the first paragraph of this "Contingent Forward Counterparty Downgrade" section within three Business

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Days of such recalculation shall constitute an Additional Termination Event. Notwithstanding the foregoing, at least once per calendar quarter, the market value of the Underlying Securities will be determined by the Calculation Agent on the basis of the average of three quotations obtained from dealers in obligations of the type of Underlying Securities (as selected by the Calculation Agent in good faith and in a commercially reasonable manner) or the Bloomberg pricing service in respect of the Underlying Securities.

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Permitted Investments

Permitted Investments ................................... All funds in the Collection Account not otherwise necessary to pay the amounts in accordance with the Priority of Payments may be invested in any of the following investments (the "Permitted Investments") selected by the Calculation Agent in its sole and absolute discretion (provided that, in the case of clauses (i) and (ii) below, at the time of purchase of the relevant asset, payments in respect thereof are not subject to any deduction or withholding on account of tax by virtue of such asset being held by or on behalf of the Issuer):

(i) any U.S. dollar-denominated senior debt securities of the United States of America issued by the U.S. Treasury Department and backed by the full faith and credit of the United States of America with a maturity that falls no later than the next following Interest Payment Date in respect of the Notes; and/or

(ii) any U.S. dollar denominated investment that is a money market fund or liquidity fund or similar investment vehicle that principally invests in short term fixed income obligations, including, without limitation, any investment vehicle for which the Calculation Agent or the Trustee, or an affiliate of any of them, provides services, provided that (a) such fund has a rating by S&P of at least AAAm (provided that such fund may also have a rating by Moody's Investors Service, Inc. or any successor to the rating business thereof ("Moody's") or a rating by Fitch, Inc., Fitch Ratings, Ltd. and their subsidiaries and any successor or successors thereto ("Fitch") and/or a, (b) such fund distributes interest or dividends on such investment on a regular basis and at least quarterly, (c) the Issuer will not invest in any one such money market fund or liquidity fund an amount exceeding, in the aggregate, 10% of the share capital of such fund unless the Rating Agency Condition is satisfied prior to investment in such funds and (d) the maturity date of such fund falls no later than the next following Interest Payment Date in respect of the Notes; and/or

(iii) U.S. dollars held in a depository institution rated at least A-1+ if held for more than 20 business days.

For the avoidance of doubt, in the case of clauses (i), (ii) and (iii) above, the approval of the Holders or the Rating Agency will not be required.

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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

TO ENSURE COMPLIANCE WITH INTERNAL REVENUE SERVICE CIRCULAR 230, HOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES IN THIS SUPPLEMENT AND THE BASE PRIVATE PLACEMENT MEMORANDUM IS NOT INTENDED OR WRITTEN BY US TO BE RELIED UPON, AND CANNOT BE RELIED UPON BY HOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON HOLDERS UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) HOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

See "Certain U.S. Federal Income Tax Considerations" in the Base Private Placement Memorandum for a description of certain additional U.S. federal income tax considerations applicable to a Holder of a Note.

Set forth below is a summary of certain U.S. federal income tax considerations relevant to Holders that purchase the Notes at initial issuance and hold the Notes as capital assets under Section 1221 of the Code. Except where otherwise noted, the discussion below is addressed to Holders that are domestic corporations or are otherwise subject to U.S. federal income taxation on a net income basis.

No statutory, judicial or administrative authority directly addresses the U.S. federal income tax characterization of transactions similar to those described herein and in the Base Private Placement Memorandum. As a result, significant aspects of the U.S. federal income tax consequences of an investment in the Notes are not certain. No ruling is being requested from the IRS, and as a result, no assurance can be given that the IRS will agree with the statements made below. ACCORDINGLY, A PROSPECTIVE INVESTOR IN THE NOTES IS EXPECTED TO CONSULT ITS TAX ADVISOR IN DETERMINING THE CONSEQUENCES OF AN INVESTMENT IN THE NOTES, INCLUDING THE APPLICATION OF FEDERAL, STATE, LOCAL OR OTHER TAX LAW.

This summary supplements, and is subject to limitations expressed in, the discussion in the Base Private Placement Memorandum under the heading "Certain U.S. Federal Income Tax Considerations" and supersedes that discussion to the extent this summary is inconsistent therewith.

Status of the Notes

The Issuer intends to treat the Notes as equity in the Issuer for U.S. federal income tax purposes. Each Holder of a Note, by its acceptance of an interest in such Note, will agree to such treatment. For a discussion of Notes treated as equity in the Issuer see the Base Private Placement Memorandum under the heading "Certain U.S. Federal Income Tax Considerations—U.S. Holders of Notes Treated as Equity".

Withholding Taxes: Acceleration Upon Certain Tax Events

Under certain circumstances, the income derived by or payments made by foreign corporations may be subject to withholding taxes imposed by the U.S. In this regard, although the Issuer does not anticipate that it will be subject to U.S. withholding taxes, the issue is not free from doubt. In particular, in the case of credit default swaps there is no definitive guidance from the IRS with respect to the possible imposition of U.S. withholding or excise taxes. Thus, there can be no assurance that the IRS would not successfully assert that the Issuer is subject to U.S. withholding tax or that the Issuer will not generally become subject to U.S. withholding tax as a result of a change in U.S. tax law or the issuance of administrative or judicial interpretations thereof. If payments by the Swap Counterparty to the Issuer under the Swap Agreement become subject to withholding, the Swap Counterparty shall have no obligation to gross-up such amounts, but it may elect to do so in its sole discretion. If it does not so elect, a Tax Redemption Event will occur, the Notes will be redeemed and Swap Breakage Fees may be payable by either the Issuer or the Swap Counterparty. If they are payable by the Issuer they will be paid ahead of the Notes and thus, the cost of such Swap Breakage Fees will be borne by the Holders of the Notes, up to the limit of their outstanding Principal Balances. Should the Swap Counterparty elect to gross-up the payments in full, no Tax Redemption Event shall occur; however, once such an election has been made the Swap Counterparty may cease to make any future gross-up payments at any time, in which case a Tax Redemption Event shall occur.

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Non-U.S. Holders of Notes

The Issuer will not require IRS Forms W-8BEN from non-U.S. Holders of Notes on a protective basis. See the discussion in the Base Private Placement Memorandum under the heading "Certain U.S. Federal Income Tax Considerations" for a more detailed discussion of this matter.

PROSPECTIVE INVESTORS ARE URGED TO CONSULT WITH THEIR TAX ADVISORS AS TO THEIR ABILITY TO MAKE, AND THE LIKELY IMPACT OF THEIR MAKING, AN ELECTION TO TREAT THE ISSUER AS A QEF. SEE THE DISCUSSION IN THE BASE PRIVATE PLACEMENT MEMORANDUM UNDER THE HEADING "CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS" FOR A MORE DETAILED DISCUSSION OF THIS AND OTHER U.S. FEDERAL INCOME TAX ISSUES.

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TRANSFER RESTRICTIONS

The Notes may only be offered and sold to non-U.S. persons in offshore transactions in reliance on Regulation S. No Note may be offered or sold within the United States or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S)

The Trustee will notify the Issuer promptly upon the Trustee becoming aware that any Holder or beneficial owner of a Note was in breach, at the time given, of any of the representations set forth below. In the event that at any time the Issuer determines or is notified that any Holder or beneficial owner of a Note was in breach of any of the representations and agreements set forth below, the Issuer may, by written notice to the Trustee and such Holder, declare the acquisition of the related Notes or interest in the related Notes void, in the event of a breach at the time given, and, in the event of such a determination or notice of such breach, at the time given or at any subsequent time, the Issuer may, by such notice, require that the related Notes or such interest be transferred to a person designated by the Issuer.

The Issuer and the Trustee reserve the right prior to any sale or other transfer of the Notes to require the delivery of such certifications, legal opinions and other information as the Issuer and the Trustee may reasonably require to confirm that the proposed sale or other transfer complies with the restrictions contained in this "—Transfer Restrictions" section.

Each Holder and beneficial owner of a Note, by its purchase thereof, will be deemed to have represented and agreed as follows (terms used in this paragraph that are defined in Regulation S are used herein as defined therein):

(i) It is not a U.S. person and is purchasing such Notes in an offshore transaction pursuant to Regulation S. It understands that in the event that at any time the Issuer determines or is notified that it was in breach, of any of the representations and agreements set forth in this "—Transfer Restrictions" section, the Issuer may, by written notice to the Trustee and such Holder, declare the acquisition of the related Notes or interest in the related Notes void in the event of a breach at the time given, and in the event of such a determination or notice of a breach, at the time given or at any subsequent time, the Issuer may, by such notice, require that the related Notes or such interest be transferred to a person designated by the Issuer.

(ii) It understands that the Notes are being offered only in a transaction not involving any public offering in the United States within the meaning of the Securities Act, and that the Notes have not been and will not be registered under the Securities Act.

(iii) The Notes will bear a legend substantially to the following effect unless the Issuer determines otherwise in accordance with applicable law:

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT AND, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY JURISDICTION AND IN A MINIMUM PRINCIPAL AMOUNT OF U.S.$100,000 AND IN EACH CASE IN COMPLIANCE WITH THE CERTIFICATION AND OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A) ABOVE. ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE TRUSTEE OR ANY

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INTERMEDIARY. IF AT ANY TIME, THE ISSUER DETERMINES OR IS NOTIFIED THAT THE HOLDER OF THIS NOTE OR A BENEFICIAL INTEREST HEREIN WAS IN BREACH OF ANY OF THE REPRESENTATIONS SET FORTH IN THE INDENTURE, THE ISSUER OR THE TRUSTEE MAY DECLARE THE ACQUISITION OF THIS NOTE OR SUCH INTEREST IN THIS NOTE VOID, IN THE EVENT OF A BREACH AT THE TIME GIVEN, AND, IN THE EVENT OF SUCH A DETERMINATION OR NOTICE OF A BREACH, AT THE TIME GIVEN OR AT ANY SUBSEQUENT TIME, THE ISSUER OR THE TRUSTEE MAY REQUIRE THAT THIS NOTE OR SUCH INTEREST HEREIN BE TRANSFERRED TO A PERSON DESIGNATED BY THE ISSUER.

EACH BENEFICIAL OWNER OF THIS NOTE WILL BE DEEMED TO HAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET FORTH IN SECTIONS 2.06(i) AND 2.06(j) OF THE INDENTURE. THE HOLDER AND EACH BENEFICIAL OWNER OF THIS NOTE ACKNOWLEDGE THAT THE ISSUER AND THE TRUSTEE RESERVE THE RIGHT PRIOR TO ANY SALE OR OTHER TRANSFER OF THIS NOTE TO REQUIRE THE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS THE ISSUER AND THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT THE PROPOSED SALE OR OTHER TRANSFER COMPLIES WITH THE RESTRICTIONS SET FORTH IN SECTIONS 2.06(i) AND 2.06(j) OF THE INDENTURE.

The following paragraph is to be included in the legend of the Notes:

THIS NOTE MAY NOT BE PURCHASED BY OR OTHERWISE ACQUIRED BY ANY EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF AND SUBJECT TO SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY PERSON OR ENTITY WHOSE ASSETS INCLUDE (OR ARE DEEMED TO INCLUDE) THE ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN BY REASON OF 29 C.F.R. 2510.3-101 (AS MODIFIED BY ERISA), OR THE CODE (ANY OF THE FOREGOING, A "BENEFIT PLAN INVESTOR"). EACH HOLDER WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT EITHER (A) IT IS NOT (AND IS NOT DEEMED FOR PURPOSES OF ERISA OR SECTION 4975 OF THE CODE TO BE) AND FOR SO LONG AS IT HOLDS THIS NOTE WILL NOT BE (OR BE DEEMED FOR SUCH PURPOSES TO BE) A BENEFIT PLAN INVESTOR OR (B) IT IS AN "EMPLOYEE BENEFIT PLAN" THAT IS NOT A BENEFIT PLAN INVESTOR WHICH IS SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW THAT IS SUBSTANTIALLY SIMILAR TO SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE ("SIMILAR LAW"), AND THE PURCHASE AND HOLDING OF THE NOTES DO NOT AND WILL NOT VIOLATE ANY SUCH SUBSTANTIALLY SIMILAR LAW.

(iv) (A) It is not (and is not deemed for the purposes of ERISA or Section 4975 of the Code to be) and for so long as it holds a Note, will not be (or be deemed for such purposes to be) an "employee benefit plan" as defined in and subject to ERISA, a "plan" as defined in Section 4975 of the Code , or any entity whose underlying assets include (or are deemed to include) for purposes of ERISA or the Code “plan assets” by reason of such plan investment in the entity (any of the foregoing, a “Benefit Plan Investor”) or (B) it is an employee benefit plan that is not a Benefit Plan Investor which is subject to any federal, state, or local law that is substantially similar to Section 406 of ERISA or Section 4975 of the Code (“Similar Law”), and the purchase and holding of the Notes, as applicable, do not and will not violate any such substantially Similar Law.

(v) It will not, at any time, offer to buy or offer to sell the Notes by any directed selling efforts or by any form of general solicitation or advertising, including, but not limited to, any advertisement, article, notice of other communication published in any newspaper, magazine or similar medium or broadcast over television or radio or seminar or meeting whose attendees have been invited by general solicitations or advertisements.

(vi) It is not a member of the public in the Cayman Islands.

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(vii) If it is a U.S. person, (A) it has purchased the Notes in the ordinary course of its investment business, for a bona fide business purpose; and (B) it has not been formed for the purpose of investing in the Issuer.

(viii) It acknowledges and agrees that (A) none of the Issuer, the Swap Counterparty, the Contingent Forward Counterparty, any of the Agents or their respective affiliates are acting as a fiduciary or financial or investment advisor for it; (B) it is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Swap Counterparty, the Contingent Forward Counterparty, any of the Agents or their respective affiliates; and (C) it has consulted with its own legal, regulatory, tax, business, investment, financial, accounting and other advisors to the extent it has deemed necessary and has made its own investment decisions based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the Issuer, the Swap Counterparty, the Contingent Forward Counterparty, any of the Agents or their respective affiliates.

(ix) By acceptance of an interest in such Note, it agrees to treat such Note as equity of the Issuer for U.S. federal income tax purposes.

(x) By acceptance of an interest in such Note, it agrees to treat the Issuer as a separate corporation for U.S. federal income tax purposes.

(xi) By acceptance of an interest in such Note, unless the Series Indenture provides otherwise it agrees to treat the Swap Agreement as a notional principal contract for U.S. federal income tax purposes.

(xii) It acknowledges and agrees that the Portfolio Property will provide the sole source of funds to meet the obligations of the Issuer to the creditors of the Notes, including to the Holders, and all other obligations of the Issuer attributable to the Series 2007-41 Segregated Portfolio. The Portfolio Property shall not be available or used to meet liabilities to, and shall be absolutely protected from, any creditors of the Company who are not creditors in respect of the Series 2007-41 Segregated Portfolio, and who accordingly shall not be entitled to recourse to the Portfolio Property. If proceeds of the Portfolio Property in respect of a Series are insufficient to make payments on the Notes of that Series, no other assets will be available for payment of the deficiency, and following liquidation of the Portfolio Property, the obligations of the Issuer to pay such deficiency will be extinguished. Holders of a Series of Notes will not have any recourse to the general assets of the Company or any assets forming part of the portfolio property of any other Series of Notes.

(xiii) It acknowledges and agrees that (a) the Issuer may obtain or be in possession of non-public information regarding any Reference Entity or the issuer of any Reference Obligation which may not be made available to any Holder and (b) the Issuer makes no representations with respect to any Reference Entity, the issuer of any Reference Obligation or the accuracy or completeness of any information regarding the foregoing.

HKG-1/715683/06 Annex A-1 292369/10-40333396

ANNEX A

FORM OF CREDIT CONFIRMATION

ACES 2007-41

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Credit Default Swap Confirmation

Date: December 13, 2007

To: Morgan Stanley Capital Services Inc. ("Party A")

From: Morgan Stanley ACES SPC, acting for the account of the Series 2007-41 Segregated Portfolio ("Party B")

Re: Swap Transaction – Series 2007-41 Notes

MS Ref No: N4UVF

_____________________________________________________________________________________

Dear Sirs:

The purpose of this letter agreement (this "Confirmation") is to confirm the terms and conditions of the Transactions entered into between us on the Trade Date specified below (the "Swap Transaction"). This Confirmation constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified below.

This Confirmation supplements, forms a part of, and is subject to, the 1992 ISDA Master Agreement dated January 25, 2007 (including the Schedule thereto dated January 25, 2007), as amended and supplemented from time to time (the "Agreement"), between you and us. All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

The definitions and provisions contained in the 2003 ISDA Credit Derivatives Definitions, as supplemented by the May 2003 Supplement to the 2003 ISDA Credit Derivatives Definitions and the 2007 Matrix Supplement to the 2003 ISDA Credit Derivatives Definitions (as so supplemented, the "2003 Definitions"), and, in relation to each Reference Entity where "Monoline" is specified with respect to such Reference Entity, the Additional Provisions for Physically Settled Default Swaps—Monoline Insurer as Reference Entity published on January 21, 2005 (the "2005 Monoline Supplement"), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between the 2003 Definitions, the 2005 Monoline Supplement and this Confirmation, this Confirmation will govern.

The terms of each Transaction to which this Confirmation relates are as follows:

1. General Terms:

Effective Date: December 13, 2007, provided that solely in relation to determining whether or not a Succession Event has occurred with respect to any Reference Entity (comprised in the Reference Portfolio), the Effective Date shall be December 4, 2007.

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Trade Date December 4, 2007.

Scheduled Termination Date: June 9, 2013.

Termination Date: With respect to a Transaction, the earliest of (i) the Scheduled Termination Date (ii) the Optional Termination Date and (iii) the date on which the aggregate of the Cash Settlement Amounts paid and required to be paid under such Transaction equals the Notional Amount of such Transaction.

Calculation Agent: Morgan Stanley Capital Services Inc.

Calculation Agent City: New York

Business Day: New York, London, Chicago and Hong Kong

Business Day Convention: Following (which, subject to Sections 1.4 and 1.6 of the 2003 Definitions, shall apply to any date referred to in this Confirmation that falls on a day that is not a Business Day)

Notice Delivery Period: Notwithstanding Section 1.9 of the Credit Derivatives Definitions, the Notice Delivery Period means the period from and including the Effective Date to and including the date that is five Business Days prior to the Scheduled Termination Date.

Floating Rate Payer: Party B ("Seller")

Fixed Rate Payer: Party A ("Buyer")

Notional Amount: As specified in Schedule C

Reference Entities: Each of the Reference Entities listed in the Reference Portfolio attached in Schedule A.

All Guarantees: As specified in Schedule B for each type of Reference Entities

Reference Price: 100%

Reference Entity Notional Amount:

As specified in Schedule C

Attachment Point: As specified in Schedule C

Detachment Point: As specified in Schedule C

Lower Threshold Amount: As specified in Schedule C

Applicable Portion: As specified in Schedule C

2. Fixed Payments:

Fixed Rate Payer Payment The 5th Business Day immediately preceding June 14 and

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Dates: December 14 of each year, commencing on the 5th Business Day preceding June 14, 2008 and the Business Day immediately preceding the Termination Date

Fixed Amount: The product of (a) the Fixed Rate, (b) the Fixed Rate Payer Calculation Amount and (c) Fixed Rate Day Count Fraction

Fixed Rate: As specified in Schedule C

Fixed Rate Payer Calculation Amount:

The Fixed Rate Payer Calculation Amount for each Fixed Rate Payer Payment Date will be an amount equal to the sum of the Outstanding Notional Amount on each day of the Fixed Rate Payer Calculation Period ending immediately after such Fixed Rate Payer Payment Date divided by the number of days in such Fixed Rate Payer Calculation Period

Outstanding Notional Amount:

On any day, an amount equal to the Notional Amount, as reduced by an amount equal to the sum of all Incurred Loss Amounts determined at or prior to such day and applied in each case with effect from the Event Determination Date relating to such Incurred Loss Amount

Fixed Rate Payer Calculation Period:

With respect to each Fixed Rate Payer Payment Date, the period from and including the Fixed Rate Payer Period End Date immediately preceding such Fixed Rate Payer Payment Date to but excluding the Fixed Rate Payer Period End Date immediately succeeding such Fixed Rate Payer Payment Date, provided that (A) the first Fixed Rate Payer Calculation Period shall be the period from and including the Effective Date to but excluding the Fixed Rate Payer Period End Date immediately succeeding the first Fixed Rate Payer Payment Date; and (B) the last Fixed Rate Payer Calculation Period shall be the period from and including the Fixed Rate Payer Period End Date immediately preceding the Fixed Rate Payer Payment Date immediately preceding the Termination Date to but excluding the Termination Date, provided that where the Termination Date is the Scheduled Termination Date, to but excluding the Fixed Rate Payer Period End Date immediately succeeding the Termination Date (which for the avoidance of doubt may be the Accrual Cessation Date).

Fixed Rate Payer Period End Dates:

June 14 and December 14 in each year, commencing on the Effective Date and ending on the earliest of (i) June 9, 2013 ("Accrual Cessation Date"), (ii) the Optional Termination Date and (iii) the date on which the cumulative Cash Settlement Amounts equals the Notional Amount.

Fixed Rate Day Count Fraction:

Actual/360

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3. Floating Payments:

Floating Amount: On each Cash Settlement Date, Party B will pay to Party A the Cash Settlement Amount.

Cash Settlement Date: With respect to each Reference Entity for which an Event Determination Date has occurred (an "Affected Reference Entity" from the date of such Event Determination Date), the third Business Day following the Calculation Date.

"Calculation Date" means, with respect to an Affected Reference Entity, the date on which the Loss Amount for all Selected Obligations relating thereto is determined.

Cash Settlement Amount: With respect to a Cash Settlement Date, the Incurred Loss Amount determined on the related Calculation Date

Incurred Loss Amount: With respect to an Affected Reference Entity and an Event Determination Date, an amount, calculated as of such Event Determination Date, equal to the lowest of:

(i) Applicable Portion multiplied by the Loss Amount;

(ii) (x) Applicable Portion multiplied by (y) the Aggregate Loss Amount (including the related Loss Amount for that Affected Reference Entity and Calculation Date) minus the Lower Threshold Amount (subject to a minimum of zero); and

(iii) the Outstanding Notional Amount (prior to any reduction thereto in respect of that Affected Reference Entity and Calculation Date).

Loss Amount: With respect to an Affected Reference Entity:

(100% - Weighted Average Final Price) * Reference Entity Notional Amount for such Reference Entity

Aggregate Loss Amount: At any time on any day, the aggregate of all Loss Amounts calculated hereunder with respect to all Reference Entities

Weighted Average Final Price:

With respect to an Affected Reference Entity, the weighted average of the Final Prices determined for each Selected Obligation, weighted by reference to the Quotation Amount of the outstanding principal balance of each such Selected Obligation or in accordance with the Settlement Protocol provisions below

Conditions to Settlement: Credit Event Notice Notifying Party: Buyer Notice of Publicly Available Information: Applicable

For the avoidance of doubt, the parties agree that the Conditions to Settlement may be satisfied more than once with

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respect to different Reference Entities under this Transaction; provided, however, that the Conditions to Settlement may be satisfied once only with respect to each Reference Entity, unless subsequent to the satisfaction of the Conditions to Settlement with respect to any Reference Entity that Reference Entity becomes the Successor to one or more other Reference Entities in which case the Conditions to Settlement may be satisfied in relation to that Successor Reference Entity, by reference to any Credit Event(s) which occurred after the relevant Succession Event, unless Restructuring is the only Credit Event specified in a Credit Event Notice, in which case, the provisions of Section 8 of this Confirmation shall apply.

Credit Event: In respect of a Reference Entity, the Credit Events specified in the ISDA Credit Derivatives Physical Settlement Matrix to the 2003 ISDA Credit Derivatives Definitions, as published on or immediately prior to the Trade Date (the "Matrix") (the relevant sections of which are set out in the Standard Terms set forth in Part I of Schedule B, provided that to the extent there are any inconsistencies between the Matrix and the applicable Standard Terms set forth in Schedule B, the Matrix as of the Trade Date shall prevail. A copy of all Credit Event Notices shall be sent to the relevant Rating Agency, and the Swap Counterparty in its discretion acting in good faith and in a commercially reasonable manner shall apply the provisions of the Matrix to the extent applicable to such Reference Entity in accordance with standard market practice as at the Trade Date) and in respect of Reference Entities which are LPN Reference Entities, the Credit Events set out in Part II of Schedule B.

Obligation(s): In respect of a Reference Entity, in accordance with Section 2.14 of the 2003 Definitions on the basis of the Obligation Category and the Obligation Characteristic(s) specified in the Matrix (the relevant sections of which are set out in the Standard Terms set forth in Schedule B, provided that to the extent there are any inconsistencies between the Matrix and the applicable Standard Terms set forth in Schedule B, the Matrix as of the Trade Date shall prevail, and the Swap Counterparty in its discretion acting in good faith and in a commercially reasonable manner shall apply the provisions of the Matrix to the extent applicable to such Reference Entity in accordance with standard market practice as at the Trade Date).

4. Settlement Terms:

Settlement Method: Cash Settlement, as modified herein

Settlement Currency: USD

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Valuation Process: Notwithstanding the provisions of Section 7.7 (Quotation) of the 2003 Definitions, valuations of the Reference Obligations shall be conducted as follows:

(A) where the relevant Event Determination Date occurs on or before the date that is thirty-three Business Days prior to the Scheduled Termination Date:

(a) On the Valuation Date, the Calculation Agent shall attempt to obtain Full Quotations from at least five Dealers.

(b) If at least two Full Quotations are not available on such Valuation Date, then on the next following Business Day (and, if necessary, on each Business Day thereafter until the 5th Business Day following such Valuation Date (together with such Valuation Date, the "Bidding Days"; the Bidding Days described in clauses (a) through (c), the "First Round"), the Calculation Agent shall attempt to obtain from five Dealers at least two Full Quotations in an amount equal to the Quotation Amount, for such Reference Obligation, provided, however, that the Calculation Agent shall not solicit or accept bids from any one Dealer on more than two Bidding Days during a single Bidding Round (as defined in clause (d) below).

(c) If, on any Business Day on or before the 5th Business Day following such Valuation Date, the Calculation Agent is able to obtain at least two such Full Quotations for such Reference Obligation, the Market Value of such Reference Obligation will be calculated in accordance with the Valuation Method.

(d) If the Calculation Agent is unable to obtain at least two such Full Quotations on or before the 5th Business Day following such Valuation Date, the Calculation Agent will repeat (such repetition, the "Second Round"; each First Round and each Second Round constitute a separate "Bidding Round") the procedures set forth in clauses (a) – (c) immediately above for a period of up to five Business Days commencing on the 11th Business Day following such Valuation Date, save that in the Second Round the Calculation Agent shall attempt to obtain at least one Full Quotation or a Weighted Average Quotation. If on any Business Day on or before the 5th Business

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Day following such 11th Business Day the Calculation Agent is able to obtain at least one Full Quotation or a Weighted Average Quotation for such Reference Obligation, the Market Value of such Reference Obligation will be calculated in accordance with the Valuation Method. If the Calculation Agent is unable to obtain at least one such Full Quotation or a Weighted Average Quotation by the last Bidding Day of the Second Round, the Quotations (and the Market Value of such Reference Obligation) shall be deemed to be zero.

(B) Where the relevant Event Determination Date occurs after the date that is thirty-three Business Days prior to the Scheduled Termination Date and on or before the date that is five Business Days prior to the Scheduled Termination Date:

(a) The Calculation Agent shall attempt to obtain Full Quotations with respect to the Valuation Date and each Reference Obligation from five or more Dealers, or if two or more Full Quotations are not available, a Weighted Average Quotation.

(b) If in respect of a Reference Obligation, the Calculation Agent is unable to obtain two or more Full Quotations or a Weighted Average Quotation on the Valuation Date, the Quotations shall be deemed to be any Full Quotation obtained from a Dealer on the Valuation Date or, if no Full Quotation is obtained, the weighted average of any firm quotations for the Reference Obligation obtained from Dealers on the Valuation Date with respect to the aggregate portion of the Quotation Amount for which such quotations were obtained and a quotation deemed to be 0% for the balance of the Quotation Amount for which firm quotations were not obtained on such day.

(C) In the case of (A) or (B) above, the Calculation Agent shall determine, based on then current market practice in the market for such Reference Obligation, whether Full Quotations or any quotations comprising a Weighted Average Quotation with respect to such Reference Obligation shall include or exclude accrued but unpaid interest. All Quotations shall be obtained in accordance with this specification.

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Dealer: For the purposes of the Valuation Process provisions above, the Calculation Agent shall select Dealers from the list of Approved Dealers. The initial list of Approved Dealers shall include any of the following financial institutions or any of their respective successors or affiliates (each an "Approved Dealer"): Barclays Bank plc, ABN Amro, BNP Paribas, Citibank, Credit Suisse, Bear Stearns, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Lehman Brothers, Royal Bank of Scotland, Merrill Lynch, Societe Generale, Dresdner Bank and UBS. The Calculation Agent may add new Dealers to and/or remove Dealers from the list of Approved Dealers, provided that the Calculation Agent will use its reasonable efforts to ensure that there are no less than ten Approved Dealers at any one time.

For the avoidance of doubt, Morgan Stanley & Co. International plc or one of its affiliates may be a Dealer. However, where the Calculation Agent is obliged to approach a minimum number of Dealers to seek quotations pursuant to the procedures set out above, any approach to Morgan Stanley & Co. International plc or any of its affiliates will not count towards such minimum.

Settlement Protocol: If, in connection with a Reference Entity and an Event Determination Date, (i) a protocol or other market standard agreement for the valuation of obligations of that Reference Entity in respect of the related Credit Event, sponsored by ISDA or any other internationally recognized association or organization, is published by such association or organization (the “Protocol”) on or before the related Valuation Date, (ii) the Swap Counterparty is bound by, or adheres to, the Protocol, and (iii) the Protocol provides for the selection of an obligation of the same seniority specified under the Subordination Ranking in the Reference Portfolio attached as Schedule A hereto, then the Final Price determined under such Protocol shall apply for such Reference Entity and Event Determination Date.

Valuation Date: Multiple Valuation Dates shall apply provided that if the relevant Event Determination Date occurs after the date that is thirty-three Business Days prior to the Scheduled Termination Date and on or before the date that is five Business Days prior to the Scheduled Termination Date, Single Valuation Date shall apply. The Calculation Agent shall (where applicable) determine the number of Valuation Dates, provided that in all cases the Quotation Amount with respect to a Reference Obligation and a Valuation Date shall not exceed USD25,000,000. Where the relevant Event Determination Date occurs on or before the date that is thirty-three Business Days prior to the Scheduled Termination Date, the Valuation Date, or where there is more than one Valuation Date, the first

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Valuation Date shall be any Business Day selected by the Calculation Agent that occurs on or after the 14th Business Day after the Event Determination Date and on or prior to the 72nd Business Day after the Event Determination Date provided that any Valuation Date selected must be at least four Business Days prior to the Scheduled Termination Date. Where the relevant Event Determination Date occurs after the date that is thirty-three Business Days prior to the Scheduled Termination Date, the Valuation Date shall be any Business Day selected by the Calculation Agent provided that such Valuation Date selected must be at least four Business Days prior to the Scheduled Termination Date. Where applicable, each subsequent Valuation Date shall occur one Business Day following the immediately preceding Valuation Date.

Valuation Method: If there is a single Valuation Date: Highest shall apply

If there are multiple Valuation Dates: Average Highest shall apply.

Quotation Method: Bid

Notice Designating Reference Obligations:

Upon satisfaction of the Conditions to Settlement in respect of any Credit Event, Party A shall as soon as practicable deliver a written notice to Party B, specifying details of one or more Reference Obligations of the relevant Affected Reference Entity (each a "Selected Obligation") that will be included in the portfolio of Reference Obligations to be valued on each or, as the case may be, the Valuation Date. Party A shall select such Reference Obligations in its sole and absolute discretion, subject to the limitations set forth below under "Reference Obligations".

Quotation Amount: Subject to "Valuation Date" above, the outstanding principal balance of the Selected Obligations specified in the Notice Designating Reference Obligation, provided that the Quotation Amount with respect to a Reference Obligation and a Valuation Date shall not exceed USD25,000,000.

Reference Obligations: In respect of a Reference Entity any obligation selected by the Buyer in its sole discretion, in accordance with Section 2.15 of the 2003 Definitions on the basis of the Deliverable Obligation Category and Deliverable Obligation Characteristic(s) specified in the Matrix (the relevant sections of which are set forth in the Standard Terms set forth in Schedule B, provided that to the extent there are any inconsistencies between the Matrix and the applicable Standard Terms in Schedule B, the Matrix as of the Trade Date shall prevail, and the Swap Counterparty in its discretion acting in good faith and in a commercially reasonable manner shall apply the provisions of the Matrix to the extent applicable to such Reference Entity in accordance with standard market practice as at the Trade

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Date).

For purposes of Section 2.19(b)(i)(A) of the 2003 Definitions (a) if "Senior" is specified under the column titled "Subordination Ranking" for the specific Reference Entity in Schedule A, then no Reference Obligation shall be deemed to be selected, and (b) if "Subordinated" is specified under the column titled "Subordination Ranking" for the specific Reference Entity in Schedule A, then the Reference Obligation shall be deemed to be a subordinated Borrowed Money obligation.

5. Other Provisions:

Amendments to Section 2.2 of the 2003 Definitions Relating to Successors:

For the purposes of this Transaction, the 2003 Definitions shall be deemed to be amended as follows:

(i) In each of Sections 2.2(a)(iii) and 2.2 (a)(iv), the words "for a New Credit Derivative Transaction determined in accordance with the provisions of Section 2.2(e)" shall be deemed to be deleted in their entirety.

(ii) Sections 2.2(d) and 2.2 (e) shall each be deemed to be deleted in their entirety and Section 2.2(d) is replaced in its entirety with the following:

"(i) where, pursuant to Section 2.2(a), one or more Successors have been identified in respect of a Reference Entity that has been subject to the relevant Succession Event (the "Original Reference Entity"), (A) the Original Reference Entity will no longer be a Reference Entity for purposes of the Credit Derivative Transaction (unless it is a Successor as described in Section 2.2(d)(i)(B) below), (B) each Successor to the Original Reference Entity shall be a Reference Entity for the purposes of this Transaction, (C) the number of Reference Entities will be increased by the number of Successors (except in the case where any Successor is a Reference Entity at the time of the Succession Event) and the Reference Entity Notional Amount for each such Successor will equal the Reference Entity Notional Amount of the Original Reference Entity immediately prior to the application of Section 2.2 divided by the number of Successors and (D) the Calculation Agent may make any modifications to the terms of the Credit Derivative Transaction required to

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preserve the economic effects of the Credit Derivative Transaction prior to the Succession Event (considered in the aggregate).

(ii) If a Successor is already a Reference Entity at the time Section 2.2 of the Credit Derivatives Definitions is applied (and is not itself the Original Reference Entity), the Reference Entity Notional Amount with respect to such Reference Entity shall be equal to the sum of (A) the Reference Entity Notional Amount in respect of the Reference Entity immediately prior to the application of Section 2.2 of the Credit Derivatives Definitions and (B) the Reference Entity Notional Amount in respect of such Reference Entity as a result of the application of Section 2.2(d)(i)(C) of the Credit Derivatives Definitions (as amended hereby).

(iii) A Successor may be a Reference Entity notwithstanding that such entity was previously a Reference Entity in respect of which the Conditions to Settlement were satisfied."

The Swap Counterparty shall notify the relevant Rating Agency of the occurrence of any Succession Event.

6. Optional Termination:

Party A may, on any day which is (i) a Business Day and (ii) on or after the Business Day immediately succeeding the first Fixed Rate Payer Payment Date, upon not less than five Business Days’ prior notice to Party B, terminate this Transaction (such right, a “Termination Option” and termination resulting from the exercise of such Termination Option, an “Optional Termination” and such date of termination, the "Optional Termination Date") provided that Party A may only exercise such Termination Option if, in connection with Underlying Securities consisting of assets other than U.S. dollars, the Calculation Agent has identified a prospective purchaser (which prospective purchaser may be Morgan Stanley & Co. International plc or an affiliate of Morgan Stanley & Co. International plc) that has agreed to make a firm bid for such Underlying Securities then held by the Issuer at par or above. The Termination Option may be exercised by oral notice (and such oral notice to be confirmed in writing promptly thereafter, provided that failure to do so will not vitiate such original oral notice) from Party A to Party B.

For the avoidance of doubt, all Fixed Rate Payer Payments and any Cash Settlement Amounts due to be paid on or prior to the Optional Termination Date in respect of the relevant Transaction will be payable.

No termination amount under Section 6(e) of the Agreement will be due from either party to the other in connection with any Optional Termination other than any amounts which should have

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been paid in respect of this Transaction on or prior to the Optional Termination Date and which remain unpaid.

7. Treatment as Notional Principal Contract:

It is the intention of Party A and Party B that the Transaction evidenced by this Confirmation be treated for all U.S. federal income tax purposes as consisting of a credit default swap that is treated as a notional principal contract as described in Treasury Regulation Section 1.446-3(c), and both Party A and Party B agree (i) to treat the Transaction as such for such purposes, and (ii) to take no action inconsistent with such treatment for all such purposes.

8. Amendment to Section 3.9 of the 2003 Definitions:

Section 3.9 of the 2003 Definitions is deleted and replaced in its entirety by the following:

"Section 3.9 Credit Event Notice After Restructuring.

(a) In the event that Restructuring is the only Credit Event specified in a Credit Event Notice, the Notifying Party shall specify the portion (an "Exercise Amount") of the Reference Entity Notional Amount in respect of which the Conditions to Settlement are being satisfied in such Credit Event Notice. Such Exercise Amount shall be determined in the sole discretion of the Notifying Party but shall be an amount that is at least 1,000,000 units of the currency (or, if Japanese Yen, 100,000,000 units of the currency) in which the Reference Entity Notional Amount is denominated or an integral multiple thereof or the entire then outstanding Reference Entity Notional Amount. In no case may the Exercise Amount exceed the Reference Entity Notional Amount.

(b) For the purposes of Section 3 and Section 4 (Settlement Terms) above, the Reference Entity Notional Amount of the relevant Reference Entity shall be deemed to be the Exercise Amount.

(c) In the event that the Conditions to Settlement are satisfied with respect to any Reference Entity and the Exercise Amount is less than the relevant Reference Entity Notional Amount, that Reference Entity shall continue to be a Reference Entity for the purposes of the Transaction and:

(i) shall have a Reference Entity Notional Amount equal to its Reference Entity Notional Amount immediately prior to the relevant Event Determination Date minus that Exercise Amount; and

(ii) the Conditions to Settlement may be satisfied on one or more future occasions with respect to that Reference Entity (including without limitation, with respect to a Restructuring Credit Event in relation to which a Cash Settlement Date has already occurred on one or more previous occasions), provided in each case that the Reference Entity Notional Amount of that Reference Entity prior to such satisfaction is greater than zero."

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9. Redemption not Termination

The redemption of the Notes following the reduction of the outstanding principal balance of the Notes to zero will not constitute an Additional Termination Event with respect to any Transaction under the Agreement.

10. Credit Derivatives Physical Settlement Matrix

For purposes of the Matrix:

(a) Each reference to the term Floating Rate Payer Calculation Amount in the Matrix shall be deemed to be a reference to the term Notional Amount; and

(b) (i) North American Corporate Investment Grade and North American Monoline shall mean North American Corporate with Restructuring as ‘Applicable’, and (ii) North American Corporate High Yield shall mean North American Corporate with Restructuring as ‘Not Applicable’.

11. Notice and Account Details:

Notice and Account Details for Party A: Notice Details: Structured Credit Product Group: Dean Yogev Tel: +852-2848-5980 Fax: +852-3407-5096

Account Details: USD: PAY CITIBANK NEW YORK (CITIUS33) FAV: MORGAN STANLEY CAPITAL SERVICES (MSCSUS33) ACC: 4072 4601 ABA: 021 000 089

Notice and Account Details for Party B: Notice Details: The Directors Tel: 345-945-7099 Fax: 345-945-7100

with a copy to: LaSalle Bank National Association 540 West Madison Street, Suite 2500 Chicago, IL 60661 Attention : CDO Trust Services Group - MS ACES SPC, Series 2007-41

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Tel: 312-904-8944 Fax: 312-873-4596

Account Details: LaSalle Bank N.A. ABA 071000505 Account Name: LaSalle Trust GL Acct: 2090067 Further CR: 711585 RE: Morgan Stanley ACES Series SPC 2007-41 Attn: Thais Hayum

and to S&P at: Attention: Structured Finance Surveillance Standard & Poor's, a division of the McGraw-Hill Companies Inc. Level 37, 120 Collins Street Melbourne Victoria 3000 Australia Facsimile No. +613 9620 6027 Telephone No. +613 9631 2000 Email: hk_structured@standardandpoors.com

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to us.

Yours sincerely,

MORGAN STANLEY ACES SPC, acting for the account of the Series 2007-41 Segregated Portfolio

By: Name: Title:

Confirmed on the date first above written: MORGAN STANLEY CAPITAL SERVICES INC.

By: Name: Title:

Sch. A-1

Schedule A

REFERENCE PORTFOLIO

ANNEX I

Reference Entity Seniority Reference Entity Type

1. MBIA Insurance Corporation Senior North American Monoline

2. Financial Security Assurance Inc. Senior North American Monoline

3. General Electric Capital Corporation Senior North American Corporate Investment Grade

4. THE ROYAL BANK OF SCOTLAND PUBLIC LIMITED COMPANY Senior European Corporate

5. The PMI Group, Inc. Senior North American Corporate Investment Grade

6. BARCLAYS BANK PLC Senior European Corporate

7. Federal Home Loan Mortgage Corporation Senior North American Corporate Investment Grade

8. Federal National Mortgage Association Senior North American Corporate Investment Grade

9. Wells Fargo & Company Senior North American Corporate Investment Grade

10. Kaupthing banki hf. Senior European Corporate

11. MGIC Investment Corporation Senior North American Corporate Investment Grade

12. DEUTSCHE BANK AKTIENGESELLSCHAFT Senior European Corporate

13. BANCO SANTANDER S.A. Senior European Corporate

14. HSBC Finance Corporation Senior North American Corporate Investment Grade

15. Berkshire Hathaway Inc. Senior North American Corporate Investment Grade

16. TEMASEK HOLDINGS (PRIVATE) LIMITED Senior Singapore Corporate

17. BNP PARIBAS (Sub) Subordinated European Corporate

Sch. A-2

Reference Entity Seniority Reference Entity Type

18. American International Group, Inc. Senior North American Corporate Investment Grade

19. The Bear Stearns Companies Inc. Senior North American Corporate Investment Grade

20. Landsbanki Islands hf Senior European Corporate

21. BANK OF SCOTLAND PLC (Sub) Subordinated European Corporate

22. Merrill Lynch & Co., Inc. Senior North American Corporate Investment Grade

23. Lehman Brothers Holdings Inc. Senior North American Corporate Investment Grade

24. United Parcel Service, Inc. Senior North American Corporate Investment Grade

25. WACHOVIA CORPORATION Senior North American Corporate Investment Grade

26. UBS AG (Sub) Subordinated European Corporate

27. Bank of America Corporation Senior North American Corporate Investment Grade

28. BP P.L.C. Senior European Corporate

29. The Goldman Sachs Group, Inc. Senior North American Corporate Investment Grade

30. ABBEY NATIONAL PLC (Sub) Subordinated European Corporate

31. Citigroup Inc. Senior North American Corporate Investment Grade

32. Genworth Financial, Inc. Senior North American Corporate Investment Grade

33. MITSUI SUMITOMO INSURANCE COMPANY, LIMITED Senior Japan Corporate

34. International Lease Finance Corporation Senior North American Corporate Investment Grade

35. Allianz SE Senior European Corporate

36. ASSICURAZIONI GENERALI - SOCIETA PER AZIONI Senior European Corporate

37. Boston Properties Limited Partnership Senior North American Corporate Investment Grade

Sch. A-3

Reference Entity Seniority Reference Entity Type

38. ERP Operating Limited Partnership Senior North American Corporate Investment Grade

39. TOKIO MARINE & NICHIDO FIRE INSURANCE CO., LTD. Senior Japan Corporate

40. Prudential Financial, Inc. Senior North American Corporate Investment Grade

41. Kimco Realty Corporation Senior North American Corporate Investment Grade

42. Swiss Reinsurance Company Senior European Corporate

43. Zurich Insurance Company Senior European Corporate

44. Simon Property Group, L.P. Senior North American Corporate Investment Grade

45. ENI S.P.A. Senior European Corporate

46.

Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen (Sub)

Subordinated Subordinated European Insurance Corporate

47. Hannover Rueckversicherung AG (Sub) Subordinated Subordinated European Insurance Corporate

48. Aegon N.V. Senior European Corporate

49. XL Capital Ltd Senior North American Corporate Investment Grade

50. ROYAL DUTCH SHELL PLC Senior European Corporate

51. AXA Senior European Corporate

52. SANOFI-AVENTIS Senior European Corporate

53. Lowe's Companies, Inc. Senior North American Corporate Investment Grade

54. Lincoln National Corporation Senior North American Corporate Investment Grade

55. Legal & General Group plc (Sub) Subordinated European Corporate

56. Republic of Iceland Sovereign Western European Sovereign

57. GAZ DE FRANCE Senior European Corporate

Sch. A-4

Reference Entity Seniority Reference Entity Type

58. TOTAL SA Senior European Corporate

59. Siemens Aktiengesellschaft Senior European Corporate

60. Bayerische Motoren Werke Aktiengesellschaft Senior European Corporate

61. China Development Bank Senior Asia Corporate

62. SK Telecom Co., Ltd. Senior Asia Corporate

63. THE EXPORT-IMPORT BANK OF CHINA Senior Asia Corporate

64.

WESTFIELD MANAGEMENT LTD as responsible entity of the WESTFIELD TRUST

Senior Australia Corporate

65. ORIX CORPORATION Senior Japan Corporate

66. E.On AG Senior European Corporate

67. Kelda Group plc Senior European Corporate

68. B A S F Aktiengesellschaft Senior European Corporate

69. GlaxoSmithKline Plc Senior European Corporate

70. Target Corporation Senior North American Corporate Investment Grade

71. Korea Electric Power Corporation Senior Asia Corporate

72. RWE Aktiengesellschaft Senior European Corporate

73. Wal-Mart Stores, Inc. Senior North American Corporate Investment Grade

74. Electricite de France Senior European Corporate

75. Gannett Co., Inc. Senior North American Corporate Investment Grade

76. ProLogis Senior North American Corporate Investment Grade

77. GAS NATURAL SDG, S.A. Senior European Corporate

Sch. A-5

Reference Entity Seniority Reference Entity Type

78. The Export-Import Bank of Korea Senior Asia Corporate

79. The Korea Development Bank Senior Asia Corporate

80. BHP BILLITON LIMITED Senior Australia Corporate

81. STATE OF QATAR Sovereign Emerging European & Middle Eastern Sovereign

82. Suez Senior European Corporate

83. SP POWERASSETS LIMITED Senior Singapore Corporate

84. SAMSUNG ELECTRONICS CO., LTD. Senior Asia Corporate

85. The Procter & Gamble Company Senior North American Corporate Investment Grade

86. Vornado Realty L.P. Senior North American Corporate Investment Grade

87. National Grid plc Senior European Corporate

88. Nestle S.A. Senior European Corporate

89. ASTRAZENECA PLC Senior European Corporate

90. Abbott Laboratories Senior North American Corporate Investment Grade

91. MTR Corporation Limited Senior Asia Corporate

92. Anglo American plc Senior European Corporate

93. Colgate-Palmolive Company Senior North American Corporate Investment Grade

94. AT&T Inc. Senior North American Corporate Investment Grade

95. Cargill, Incorporated Senior North American Corporate Investment Grade

96. Medtronic, Inc. Senior North American Corporate Investment Grade

97. Centrica Plc Senior European Corporate

Sch. A-6

Reference Entity Seniority Reference Entity Type

98. FPL Group Capital Inc Senior North American Corporate Investment Grade

99. POSCO Senior Asia Corporate

100. The TJX Companies, Inc. Senior North American Corporate Investment Grade

Schedule B-1

SCHEDULE B - PART I

STANDARD TERMS

The standard terms for each Reference Entity are the Credit Derivatives Physical Settlement Matrix in effect as of the Trade Date (subject to amendment).*

ISDA SETTLEMENT MATRIX

Transaction Type

NORTH AMERICAN

CORPORATE1 EUROPEAN

CORPORATE AUSTRALIA

CORPORATE NEW

ZEALAND CORPORATE

JAPAN CORPORATE

SINGAPORE CORPORATE

ASIA CORPORATE

SUBORDINATED EUROPEAN INSURANCE CORPORATE

EMERGING EUROPEAN

CORPORATE

LATIN AMERICA

CORPORATE B

LATIN AMERICA

CORPORATE B&L

Business Days: If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London, New York & TARGET GBP: London JPY: London & Tokyo CHF: London & Zurich

If the Floating Rate Payer Calculation Amount is denominated in EUR: London & TARGET USD: London & New York GBP: London JPY: London & Tokyo CHF: London & Zurich

If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York & Sydney AUD: London, New York & Sydney EUR: London, New York, TARGET & Sydney

If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York & Auckland AUD: London, New York, Sydney & Auckland EUR: London, New York, TARGET & Auckland NZD: London, New York & Auckland

If the Floating Rate Payer Calculation Amount is denominated in JPY: London, New York & Tokyo USD: London, New York & Tokyo EUR: London, New York, Tokyo & TARGET

If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York & Singapore EUR: London, New York, TARGET & Singapore

If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London, New York & TARGET

If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London & TARGET GBP: London JPY: London & Tokyo CHF: London & Zurich

If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York EUR: London, Target

If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London, New York & TARGET

If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London, New York & TARGET

All Guarantees: Not Applicable Applicable Applicable Applicable Applicable Applicable Applicable Applicable Applicable Applicable Applicable

Credit Events: Bankruptcy Failure to Pay Restructuring, if specified as applicable in the relevant Confirmation Restructuring Maturity Limitation and Fully Transferable Obligation

Bankruptcy Failure to Pay Restructuring Modified Restructuring Maturity Limitation and Conditionally Transferable Obligation

Bankruptcy Failure to Pay Restructuring Restructuring Maturity Limitation and Fully Transferable Obligation Applicable

Bankruptcy Failure to Pay Restructuring Restructuring Maturity Limitation and Fully Transferable Obligation Applicable

Bankruptcy Failure to Pay Payment Requirement: If the Floating Rate Payer Calculation Amount is in JPY, JPY 100,000,000 or its equivalent in the relevant Obligation

Bankruptcy Failure to Pay Restructuring

Bankruptcy Failure to Pay Restructuring

Bankruptcy Failure to Pay Restructuring

Bankruptcy Failure to Pay Grace Period Extension: Applicable Obligation Acceleration Repudiation/Moratorium Restructuring Multiple Holder Obligation:

Bankruptcy Failure to Pay Grace Period Extension: Applicable Obligation Acceleration Repudiation/Moratorium Restructuring Multiple Holder

Bankruptcy Failure to Pay Grace Period Extension: Applicable Obligation Acceleration Repudiation/Moratorium Restructuring

Schedule B-2

Transaction Type

NORTH AMERICAN

CORPORATE1 EUROPEAN

CORPORATE AUSTRALIA

CORPORATE NEW

ZEALAND CORPORATE

JAPAN CORPORATE

SINGAPORE CORPORATE

ASIA CORPORATE

SUBORDINATED EUROPEAN INSURANCE CORPORATE

EMERGING EUROPEAN

CORPORATE

LATIN AMERICA

CORPORATE B

LATIN AMERICA

CORPORATE B&L

Applicable Applicable Currency as of the occurrence of the relevant Failure to Pay. In all other cases, USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Restructuring Multiple Holder Obligation: Not Applicable Default Requirement: If the Floating Rate Payer Calculation Amount is in JPY, JPY 1,000,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. In all other cases, USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event.

a) Not Applicable with respect to Obligation Category “Bonds” b) Applicable with respect to Obligation Category “Loans”

Obligation: Not Applicable

Obligation Category:

Borrowed Money

Borrowed Money

Borrowed Money

Borrowed Money

Borrowed Money Bond or Loan Bond or Loan Borrowed Money Bond or Loan Bond Bond or Loan

Schedule B-3

Transaction Type

NORTH AMERICAN

CORPORATE1 EUROPEAN

CORPORATE AUSTRALIA

CORPORATE NEW

ZEALAND CORPORATE

JAPAN CORPORATE

SINGAPORE CORPORATE

ASIA CORPORATE

SUBORDINATED EUROPEAN INSURANCE CORPORATE

EMERGING EUROPEAN

CORPORATE

LATIN AMERICA

CORPORATE B

LATIN AMERICA

CORPORATE B&L

Obligation Characteristics:

None None None None Not Subordinated Not Subordinated Specified Currency: Standard Specified Currencies & Domestic Currency Not Sovereign Lender

Not Subordinated Not Sovereign Lender Not Domestic Currency Not Domestic Issuance Not Domestic Law

None Not Subordinated Not Domestic Law Not Domestic Currency Not Domestic Issuance

Not Subordinated Not Domestic Currency Not Domestic Law Not Domestic Issuance

Not Subordinated Not Sovereign Lender Not Domestic Currency Not Domestic Law Not Domestic Issuance

Deliverable Obligation Category:

Bond or Loan Bond or Loan Bond or Loan Bond or Loan Bond or Loan Bond or Loan Bond or Loan Bond or Loan Bond or Loan Bond Bond or Loan

Deliverable Obligation Characteristics:

Not Subordinated Specified Currency Not ContingentAssignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified Currency Not Contingent Assignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified Currency: Standard Specified Currencies & Domestic Currency Not ContingentAssignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified Currency: Standard Specified Currencies & Domestic Currency Not ContingentAssignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer

Not SubordinatedSpecified Currency Not Contingent Assignable Loan Consent Required Loan Transferable Maximum Maturity: 30 yearsNot Bearer

Not Subordinated Specified Currency: Standard Specified Currencies & Domestic Currency Not Sovereign Lender Not Contingent Assignable Loan Transferable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified Currency Not Sovereign Lender Not Domestic Law Not ContingentNot Domestic Issuance Assignable Loan Transferable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified CurrencyNot Contingent Assignable Loan Consent Required Loan Transferrable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified Currency Not Domestic Issuance Not Contingent Transferable Not Bearer Assignable Loan Consent Required Loan Not Domestic Law

Not Subordinated Specified Currency Not Domestic Law Not Contingent Not Domestic Issuance Transferrable Not Bearer

Not Subordinated Specified Currency Not Sovereign Lender Not Domestic Law Not Contingent Not Domestic Issuance Assignable Loan Consent Required Loan Transferrable Not Bearer

Additional Provisions for Physically Settled Default Swaps - Monoline Insurer as Reference Entity (January 21, 2005)

Not Applicable unless otherwise specified as Applicable in the relevant Confirmation

Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

Schedule B-4

Transaction Type

NORTH AMERICAN

CORPORATE1 EUROPEAN

CORPORATE AUSTRALIA

CORPORATE NEW

ZEALAND CORPORATE

JAPAN CORPORATE

SINGAPORE CORPORATE

ASIA CORPORATE

SUBORDINATED EUROPEAN INSURANCE CORPORATE

EMERGING EUROPEAN

CORPORATE

LATIN AMERICA

CORPORATE B

LATIN AMERICA

CORPORATE B&L

Additional Provisions for the Russian Federation (August 13, 2004):

Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

Additional Provisions for the Republic of Hungary (February 14, 2005):

Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

Additional Provisions for the Argentine Republic: Excluded Obligations and Excluded Deliverable Obligations (December 21, 2005):

Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

1 Investment Grade & High Yield

2 All references to "Definitions" mean the 2003 ISDA Credit Derivatives Definitions, as supplemented by the May 2003 Supplement to the 2003 ISDA Credit Derivatives Definitions, and the 2005 Matrix Supplement to the 2003 ISDA Credit Derivatives Definitions, as published by the International Swaps and Derivatives Association, Inc. Capitalized terms used in this Credit Derivatives Physical Settlement Matrix and not defined here have the meanings given to such terms in the Definitions.

Transaction Type ASIA SOVEREIGN

EMERGING EUROPEAN & MIDDLE EASTERN

SOVEREIGN JAPAN

SOVEREIGN AUSTRALIA SOVEREIGN

NEW ZEALAND SOVEREIGN

SINGAPORE SOVEREIGN

LATIN AMERICA SOVEREIGN

WESTERN EUROPEAN SOVEREIGN

Business Days: If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London, New York & TARGET

If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London & TARGET GBP: London

If the Floating Rate Payer Calculation Amount is denominated in JPY: London, New York & Tokyo USD: London, New York & Tokyo EUR: London, New York,

If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York & Sydney EUR: London, New York, Sydney & TARGET

If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York & Auckland EUR: London, New York, Auckland & TARGET

If the Floating Rate Payer Calculation Amount is denominated in SGD: London, New York & Singapore USD: London, New York & Singapore EUR: London, New York,

If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York EUR: London, New York & TARGET

If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London &

Schedule B-5

Transaction Type ASIA SOVEREIGN

EMERGING EUROPEAN & MIDDLE EASTERN

SOVEREIGN JAPAN

SOVEREIGN AUSTRALIA SOVEREIGN

NEW ZEALAND SOVEREIGN

SINGAPORE SOVEREIGN

LATIN AMERICA SOVEREIGN

WESTERN EUROPEAN SOVEREIGN

Tokyo & TARGET Singapore & TARGET TARGET

All Guarantees: Applicable Applicable Applicable Applicable Applicable Applicable Applicable Applicable

Credit Event: Failure to Pay Repudiation/Moratorium Restructuring

Failure to Pay Grace Period Extension: Applicable Obligation Acceleration Repudiation/Moratorium Restructuring Multiple Holder Obligation: Not Applicable

Failure to Pay Payment Requirement: If the Floating Rate Payer Calculation Amount is in JPY, JPY 100,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. In all other cases, USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Repudiation/Moratorium Restructuring Multiple Holder Obligation: Not Applicable Default Requirement: If the Floating Rate Payer Calculation Amount is in JPY, JPY 1,000,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. In all other cases, USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event.

Failure to Pay Repudiation/Moratorium Restructuring Restructuring Maturity Limitation and Fully Transferable Obligation Applicable

Failure to Pay Repudiation/Moratorium Restructuring Restructuring Maturity Limitation and Fully Transferable Obligation Applicable

Failure to Pay Repudiation/Moratorium Restructuring

Failure to Pay Grace Period Extension: Applicable Obligation Acceleration Repudiation/Moratorium Restructuring Multiple Holder Obligation: Not Applicable

Failure to Pay Repudiation/Moratorium Restructuring

Schedule B-6

Transaction Type ASIA SOVEREIGN

EMERGING EUROPEAN & MIDDLE EASTERN

SOVEREIGN JAPAN

SOVEREIGN AUSTRALIA SOVEREIGN

NEW ZEALAND SOVEREIGN

SINGAPORE SOVEREIGN

LATIN AMERICA SOVEREIGN

WESTERN EUROPEAN SOVEREIGN

Obligation Category:

Bond or Loan Bond Borrowed Money Borrowed Money Borrowed Money Bond or Loan Bond Borrowed Money

Obligation Characteristics:

Not Subordinated Not Sovereign Lender Not Domestic Currency Not Domestic Law Not Domestic Issuance

Not Subordinated Not Domestic Currency Not Domestic Law Not Domestic Issuance

None None None Not Subordinated Specified Currency: Standard Specified Currencies & Domestic Currency Not Sovereign Lender

Not Subordinated Not Domestic Currency Not Domestic Law Not Domestic Issuance

None

Deliverable Obligation Category:

Bond or Loan Bond Bond or Loan Bond or Loan Bond or Loan Bond or Loan Bond Bond or Loan

Deliverable Obligation Characteristics:

Not Subordinated Specified Currency Not Sovereign Lender Not Domestic Law Not Contingent Not Domestic Issuance Assignable Loan Transferable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified Currency Not Domestic Law Not Contingent Not Domestic Issuance Transferable Not Bearer

Specified Currency Not Contingent Assignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified Currency: Standard Specified Currencies & Domestic Currency Not Contingent Assignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified Currency: Standard Specified Currencies & Domestic Currency Not Contingent Assignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified Currency Specified Currencies & Domestic Currency Not Sovereign Lender Not Contingent Assignable Loan Transferable Maximum Maturity: 30 years Not Bearer

Not Subordinated Specified Currency Not Domestic Law Not Contingent Not Domestic Issuance Transferable Not Bearer

Specified Currency Not Contingent Assignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer

Additional Provisions for the Russian Federation (August 13, 2004):

Not Applicable Applicable if the Reference Entity is the Russian Federation, otherwise Not Applicable

Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

Additional Provisions for the Republic of Hungary (February 14, 2005):

Not Applicable Applicable if the Reference Entity is the Republic of Hungary, otherwise Not Applicable

Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

Additional Provisions for the Argentine Republic: Excluded Obligations and Excluded Deliverable Obligations (December 21,

Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Applicable if the Reference Entity is the Argentine Republic, otherwise Not Applicable

Not Applicable

Schedule B-7

Transaction Type ASIA SOVEREIGN

EMERGING EUROPEAN & MIDDLE EASTERN

SOVEREIGN JAPAN

SOVEREIGN AUSTRALIA SOVEREIGN

NEW ZEALAND SOVEREIGN

SINGAPORE SOVEREIGN

LATIN AMERICA SOVEREIGN

WESTERN EUROPEAN SOVEREIGN

2005):

\

Schedule B-8

SCHEDULE B - PART II

Standard Terms for LPN Reference Entities

Transaction Type: LPN Reference Entity/ Loan Pass Through Note Reference Entity

Calculation Agent City: London

Business Days: London, Moscow and New York

All Guarantees: Applicable

Conditions to Settlement:

Credit Event Notice

Notifying Party: Buyer or Seller

Notice of Physical Settlement

Notice of Publicly Available Information: Applicable

Public Sources : Standard Public Sources Specified Number : 2

Credit Events: Bankruptcy

Failure to Pay

Grace Period Extension: Applicable

Payment Requirement: USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay ,

Obligation Acceleration

Restructuring

Default Requirement: USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event

Multiple Holder Obligation:

a) Not Applicable with respect to Obligation Category “Bonds”

b) Applicable with respect to Obligation Category “Loans”

Notwithstanding the above, Multiple Holder Obligation will be Not Applicable with respect to any of the Reference Obligations (and any Underlying Loan).

Repudiation/Moratorium

Obligation Category: Bond or Loan

Schedule B-9

Obligation Characteristics:

Not Subordinated

Not Domestic Law

Not Domestic Currency

Not Domestic Issuance

Excluded Obligations: None

Physical Settlement Period:

The longest of the number of Business Days for settlement in accordance with then current market practice of such Deliverable Obligation, as determined by the Calculation Agent, after consultation with the parties (in accordance with Section 8.6 of the Credit Derivatives Definitions).

Deliverable Obligation Category:

Bond or Loan

Deliverable Obligation Characteristics:

Not Subordinated

Specified Currency: Standard Specified Currencies

Not Domestic Law

Not Domestic Issuance

Not Contingent

Transferable

Not Bearer

Assignable Loan

Consent Required Loan

Deliverable Obligations: Exclude Accrued Interest

Excluded Deliverable Obligations:

None

Escrow: Applicable

Additional Terms: The Additional Provisions for LPN Reference Entities published on October 03, 2006 on ISDA’s website, www.isda.org (the “Additional Provisions”) are incorporated into this Transaction Type.

Schedule C

Schedule C

Terms of Transactions

CDS Transaction

Notional Amount

Reference Entity Notional Amount

Attachment Point

Detachment Point

Fixed Rate Applicable Portion Lower Threshold Amount

Series 2007-41 Notes

USD17,914,000 USD20,000,000 2.67% 3.67% 1.30% per annum

17914/20000, which shall be applied (with rounding to the nearest 1/100 of a USD dollar, where USD0.005 is rounded upwards to the nearest USD0.01) in determining the Incurred Loss Amount

USD53,400,000

HKG-1/715683/06 Annex B-1 253644/10-40343641

ANNEX B

FORM OF RATE CONFIRMATION

ACES 2007-41

HKG-1/715697/06 253644/10-40343641

Interest Rate Swap Confirmation

Date: December 13, 2007

To: Morgan Stanley ACES SPC, acting for the account of the Series 2007-41 Segregated Portfolio

From: Morgan Stanley Capital Services Inc.

Attn: The Directors Contact: Structured Credit Products Group, Hong Kong: Dean Yogev

Fax: +1 (345) 945-7100 Fax: +852-3407-5096

Tel: +1 (345) 945-7099 Tel: +852-2848-5980

Re: Interest Rate Swaps MSCS Ref. No. N4UVF – Series 2007-41 Notes

The purpose of this letter agreement is to confirm the terms and conditions of the transaction entered into between us on the Trade Date specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified below.

The definitions and provisions contained in the 2006 ISDA Definitions (as published by the International Swaps and Derivatives Association, Inc., the "Definitions") are incorporated into this Confirmation. In the event of any inconsistency between those definitions and this Confirmation, this Confirmation will govern. Capitalized terms used but not defined either herein or as provided above shall have the meaning provided in the Master Credit Default Swap Confirmation.

1. This Confirmation supplements, forms part of, and is subject to, the 1992 ISDA Master Agreement dated as of January 25, 2007 (including the Schedule thereto dated January 25, 2007), and the Credit Support Annex dated as of January 25, 2007, each as amended and supplemented from time to time (together the "Agreement") between you and us. All provisions contained in the Agreement govern this Confirmation except as expressly modified below:

2. The terms of the particular Transaction to which this Confirmation relates are as follows:

Party A: Morgan Stanley Capital Services Inc.

Party A Credit Support: Payments guaranteed by Morgan Stanley

Party B: Morgan Stanley ACES SPC, acting for the account of the Series 2007-41 Segregated Portfolio

Effective Date: December 13, 2007

HKG-1/715697/06 - 2 - 253644/10-40343641

Business Day: New York, Chicago, London and Hong Kong

Business Day Convention: Following (which shall apply to any date referred to in this Confirmation that falls on a day that is not a Business Day)

Calculation Agent: Party A

Scheduled Termination Date: The earlier of (a) an Early Termination Date and (b) June 9, 2013.

Termination Date: With respect to each Transaction, the earliest of (i) the Scheduled Termination Date (ii) the Optional Termination Date as defined in the related Credit Default Swap Confirmation and (iii) the date on which the cumulative Cash Settlement Amounts equals the Notional Amount, each under and as defined in the related Credit Default Swap Confirmation, provided that the Additional Amount (2) may be paid after the Termination Date.

Floating Amount(s):

Floating Rate I Payer Notional Amount:

As of the Effective Date, USD17,914,000 thereafter decreased on (i) each "Cash Settlement Date" under and as defined in the Credit Default Swap Confirmation by an amount equal to the sum of the Cash Settlement Amounts payable under the Credit Default Swap Confirmation on such date and (ii) each date on which Initial Underlying Securities are substituted, or amortized or redeemed and payment is made in full to the holder of the Initial Underlying Securities in respect of the amount of principal being amortized or redeemed, by an amount equal to the principal amount of the Initial Underlying Securities being amortized or redeemed.

Floating Rate I Payer: Party B

Floating Rate I Payer Period End Dates:

The 15th day of each calendar month, commencing on December 15, 2007, up to and including the maturity date of the Initial Underlying Securities, in each case subject to adjustment in accordance with the Following Business Day Convention, based upon the

HKG-1/715697/06 - 3 - 253644/10-40343641

definition of Floating Rate I Payer Business Day.

Floating Rate I Payer Payment Dates:

One Floating Rate I Payer Business Day after each Floating Rate I Payer Period End Date.

Floating Rate I Option: USD-LIBOR-BBA

Designated Maturity: One month

Spread I: Plus 0.03% per annum

Floating Rate I Day Count Fraction:

Actual/360

Reset Dates: The first day of each Calculation Period.

Compounding: Inapplicable

Floating Rate I Payer Business Day:

Any day which is a "business day" under the terms of the Underlying Securities.

Floating Rate I Payer Calculation Amount:

In respect of each Floating Rate I Payer Calculation Period, the Floating Rate I Payer Notional Amount on the Floating Rate I Payer Period End Date falling at the end of such Calculation Period.

Floating Rate I Payer Calculation Period:

The period from and including each Floating Rate I Payer Period End Date to but excluding the next Floating Rate I Payer Period End Date, provided that the first Floating Rate I Payer Calculation Period shall be the period from and including November 15, 2007 to but excluding the first Floating Rate I Payer Period End Date, and the last Floating Rate I Payer Calculation Period shall be the period from and including the Floating Rate I Payer Period End Date immediately preceding the Termination Date to but excluding the Termination Date.

Floating Amount II:

Floating Rate II Payer: Party A

Floating Rate II Payer Notional Amount: As of the Effective Date, the Notional Amount specified in Schedule A and thereafter decreased, effective on each Floating Rate II Notional Reduction Date, by an amount equal to the Cash Settlement Amount payable under the related

HKG-1/715697/06 - 4 - 253644/10-40343641

Transaction under the Credit Default Swap Confirmation on the Cash Settlement Date in respect of the related Floating Rate II Notional Reduction Date.

Floating Rate II Notional Reduction Date: The Event Determination Date, provided that if the Event Determination Date and the related Cash Settlement Date do not both occur immediately prior to the same Floating Rate II Payer Payment Date, the first day of the Floating Rate II Payer Calculation Period which commences immediately after the Floating Rate II Payer Payment Date immediately preceding such Cash Settlement Date.

Floating Rate II Payer Payment Dates: The 5th Business Day immediately preceding June 14 and December 14 in each year commencing on the 5th Business Day immediately preceding June 14, 2008 and the Business Day immediately preceding the Scheduled Termination Date.

Floating Rate II Option: USD-LIBOR-BBA

Designated Maturity: Six months. Linear Interpolation shall apply

Spread II: As set out in Schedule A

Floating Rate II Day Count Fraction: Actual/360

Reset Dates: The first day of each Floating Rate II Payer Calculation Period

Compounding: Inapplicable

Calculation of Floating Amounts payable by Floating Rate Payer:

The product of (a) the Floating Rate II Option plus Spread II, (b) the Floating Rate II Payer Calculation Amount and (c) Floating Rate II Day Count Fraction.

Floating Rate II Payer Business Day: New York, Chicago, London and Hong Kong

Floating Rate II Payer Calculation Amount:

The Floating Rate II Payer Calculation Amount for each Floating Rate II Payer Payment Date will be an amount equal to the sum of the Floating Rate II Payer Notional Amount on each day of the Floating Rate II Payer Calculation Period ending immediately after such Floating Rate II Payer Payment Date divided by the number of days in such Floating Rate II Payer

HKG-1/715697/06 - 5 - 253644/10-40343641

Calculation Period.

Floating Rate II Payer Calculation Period: With respect to each Floating Rate II Payer Payment Date, the period from and including the Floating Rate II Payer Period End Date immediately preceding such Floating Rate II Payer Payment Date to but excluding the Floating Rate II Payer Period End Date immediately succeeding such Floating Rate II Payer Payment Date, provided that the first Floating Rate II Payer Calculation Period shall be the period from and including the Effective Date to but excluding the Floating Rate II Payer Period End Date immediately succeeding the first Floating Rate II Payer Payment Date, and the last Floating Rate II Payer Calculation Period shall be the period from and including the Floating Rate II Payer Period End Date immediately preceding the Floating Rate II Payer Payment Date immediately preceding the Termination Date to but excluding the Termination Date, provided that where the Termination Date is the Scheduled Termination Date, to but excluding the Floating Rate II Payer Period End Date immediately following the Termination Date (which for the avoidance of doubt may be the Accrual Cessation Date).

Floating Rate II Payer Period End Dates: June 14 and December 14 in each year, commencing on the Effective Date and ending on the earliest of (i) June 9, 2013 ("Accrual Cessation Date") (ii) the Optional Termination Date as defined in the related Credit Default Swap Confirmation and (iii) the date on which the cumulative Cash Settlement Amounts equals the Notional Amount, each in respect of the related Transaction under and as defined in the Credit Default Swap Confirmation.

Fixed Amount:

Fixed Rate Payer: Party B

Fixed Rate: As specified in Schedule A

Fixed Rate Day Count Fraction: Actual/360

Calculation of Fixed Amount payable by The product of (a) the Fixed Rate and (b) the

HKG-1/715697/06 - 6 - 253644/10-40343641

Fixed Rate Payer: Fixed Rate Payer Calculation Amount and (c) the Fixed Rate Day Count Fraction.

Fixed Rate Payer Calculation Amount: The Fixed Rate Payer Calculation Amount for each Fixed Rate Payer Payment Date will be an amount equal to the Fixed Rate Payer Calculation Amount for the related Transaction under the Credit Default Swap Confirmation.

Fixed Rate Payer Payment Dates: Each Fixed Rate Payer Payment Date as defined in the Credit Default Swap Confirmation.

Fixed Rate Payer Calculation Period: Each Fixed Rate Payer Calculation Period as defined in the Credit Default Swap Confirmation.

Additional Amounts:

Additional Amount (1): The Additional Payer (1) Amounts shall be payable by Party B only if, and during such period as, the Underlying Securities with respect to a Transaction consist of assets other than the Initial Underlying Securities.

Additional Payer (1): Party B

Additional Payer (1) Amounts: Party B will, on each Fixed Rate Payer Payment Date, pay to Party A an amount equal to the aggregate of any amount of interest, dividends or other distributions due and payable (in accordance with the terms of the Underlying Securities on the Effective Date or, if later, the date on which such assets became Underlying Securities) in respect of the Underlying Securities with respect to such Transaction in the Calculation Period (or other period) ending on such Fixed Rate Payer Payment Date.

Additional Amount (2)

Additional Payer (2): Party B

Additional Payer (2) Amount: Party B shall pay to Party A on the Additional Payer (2) Payment Date the balance, if any, of the Provisional Reserve Account after the payment of the Interest Adjustment Payment in respect of the Notes, provided that the aggregate Additional Payer (2) Amounts under each Transaction under this Master Confirmation on an

HKG-1/715697/06 - 7 - 253644/10-40343641

Additional Payer (2) Payment Date shall not be more than the amount equal to the balance, if any, of the Provisional Reserve Account after the payment of the Interest Adjustment Payment in respect of the Notes.

Additional Payer (2) Payment Dates: The date of payment of the Interest Adjustment Payment as provided under the Indenture.

3. Additional Terms:

It is the intention of Party A and Party B that the Transaction evidenced by this Confirmation be treated for all U.S. federal income tax purposes as consisting of an interest rate swap that is treated as a notional principal contract as described in Treasury Regulation Section 1.446-3(c), and both Party A and Party B agree (i) to treat the Transaction as such for all such purposes, and (ii) to take no action inconsistent with such treatment for all such purposes.

4. Additional Termination Event:

In respect of Party A, the occurrence of a Rate Swap Counterparty Downgrade shall constitute an Additional Termination Event; provided, that a Rate Swap Counterparty Downgrade shall not constitute an Additional Termination Event if Party A takes one of the following actions at its sole expense (i) in the event of a Rate Swap Counterparty Downgrade described in the definition thereof, within three Business Days after the Calculation Agent or the Trustee has notified Party A in writing that a Rate Swap Counterparty Downgrade has occurred, Party A posts Rate Swap Collateral for the benefit of Party B, (ii) Party A has elected to designate, by written notice to Party B, the Calculation Agent and the Rating Agency a Substitute Swap Counterparty in respect of the transactions under the Swap Agreement within three Business Days of the occurrence of such Rate Swap Counterparty Downgrade and such substitution shall occur within thirty days of such Rate Swap Counterparty Downgrade, (iii) Party A has, within ten Business Days of the occurrence of such Rate Swap Counterparty Downgrade, procured the appointment of an Eligible Credit Support Provider with respect to Party A's obligations hereunder and such appointment shall occur within thirty days of such Rate Swap Counterparty Downgrade, or (iv) Party A has complied with such other collateral posting requirements, if any, with respect to the Transaction, in connection with which the Rating Condition has been met. In the event of an Additional Termination Event under this Section 4, Party A shall be deemed the sole Affected Party.

5. Credit Support Annex:

In the case of Party A, the credit support annex signed by Party A and Party B and dated as of January 25, 2007 shall be a Credit Support Document with respect to this Transaction provided that:

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(a) the "Minimum Transfer Amount" with respect to Party A shall be amended to USD50,000;

(b) the words "upon a demand made by the Secured Party on or promptly following a Valuation Date," shall be deleted from Paragraph 3(a);

(c) Paragraph 4(b) shall be deleted and replaced by the following:

"4(b) Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise specified:

(i) if the Pledgor is required to Transfer Eligible Credit Support under Paragraph 3(a), then the relevant Transfer will be made not later than the close of business on the next Local Business Day; and

(ii) if a demand for the Transfer of Posted Credit Support is made by the Notification Time, then the relevant Transfer will be made not later than the close of business on the next Local Business Day; if a demand is made after the Notification Time, then the relevant Transfer will be made not later than the close of business on the second Local Business Day thereafter.";

(d) the following will be added to Paragraph 13(c)(ii):

Eligible Collateral Valuation Percentage

(a)(i) Investments falling within paragraphs (i) and (iv) of "Additional Eligible Collateral" with a remaining maturity of 10 years or more but less than 15 years;

86.4%

(a)(ii) Investments falling within paragraphs (i) and (iv) of "Additional Eligible Collateral" with a remaining maturity of 7 years or more but less than 10 years.

89.3%

(a)(iii) Investments falling within paragraphs (i) and (iv) of "Additional Eligible Collateral" with a remaining maturity of 5 years or more but less than 7 years;

91.5%

(a)(iv) Investments falling within paragraphs (i) and (iv) of "Additional Eligible Collateral" with a remaining maturity of 3 years or more but less than 5 years;

94.3%

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Eligible Collateral Valuation Percentage

(a)(v) Investments falling within paragraphs (i) and (iv) of "Additional Eligible Collateral" with a remaining maturity of 1 year or more but less than 3 years;

97.1%

(a)(vi) Investments falling within paragraphs (i) and (iv) of "Additional Eligible Collateral" with a remaining maturity of less than 1 year;

98.5%

(a)(vii) Investments falling within paragraphs (i) and (iv) of "Additional Eligible Collateral" with a remaining maturity of 15 years or more.

Subject to the approval of the Rating Agency and as agreed between the Swap Counterparty and the Rating Agency

(b) Investments falling within paragraphs (ii) and (iii) of "Additional Eligible Collateral"

(1) Maturing overnight: 100%

(2) Maturing more than overnight:

Subject to the approval of the Rating Agency and as agreed between the Swap Counterparty and the Rating Agency

(c) Investments falling within paragraph (i) of "Permitted Investments":

(i) with a remaining maturity less than 1 year

99.0%

(ii) with a remaining maturity of 1 year or more but less than 3 years

96.8%

(iii) with a remaining maturity of 3 years or more but less than 5 years

95.8%

(iv) with a remaining maturity of 5 years or more but less than 7 years

94.0%

(v) with a remaining maturity of 93.4%

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Eligible Collateral Valuation Percentage

7 years or more but less than 10 years

(vi) with a remaining maturity of 10 years or more but less than 15 years

89.6%

(vii) with a remaining maturity of 15 years or more

Subject to the approval of the Rating Agency and as agreed between the Swap Counterparty and the Rating Agency

(d) Investments falling within paragraph (ii) of "Permitted Investments"

100%

(e) Investments falling within paragraph (iii) of "Permitted Investments"

100%

(e) Paragraph 13(n)(iv) shall be amended by replacing the definitions of "Pledgor" and "Secured Party" with the following respectively:

"Pledgor" means Party A, when that party (i) is required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has Transferred Eligible Credit Support under Paragraph 3(a).

"Secured Party" means Party B, when that party (i) is entitled to received Eligible Credit Support under Paragraph 3(a) or (ii) holds or is deemed to hold Posted Credit Support."

6. Optional Termination under Credit Default Swap Confirmation

If Party A terminates a Transaction under and as defined in the Credit Default Swap Confirmation pursuant to its right of Optional Termination as provided in the Credit Default Swap Confirmation, the related Transaction under this Master Confirmation (the "Relevant Transaction") shall terminate on an exercise of the Termination Option on the applicable Optional Termination Date under the Credit Default Swap Confirmation.

Upon any such termination, no further amounts shall be payable by either party to the other under Section 6(e) of the Agreement in respect of the termination of such Relevant Transaction, other than any amounts which should have been paid under such Relevant Transaction on or prior to the Optional Termination Date and which remain unpaid.

For the avoidance of doubt, the Floating Amounts, Fixed Amounts and Additional Amounts due on or prior to the date of termination of the Relevant Transaction shall be payable.

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7. Redemption not Termination

The redemption of the Notes following the reduction of the outstanding principal balance of the Notes to zero will not constitute an Additional Termination Event with respect to any Transaction under the Agreement.

8. Definitions:

"Additional Eligible Collateral" means any of the following investments:

(i) direct obligations of, and obligations fully guaranteed by, the United States, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit System or any agency or instrumentality of the United States the obligations of which are explicitly backed by the full faith and credit of the United States of America; provided that obligations of, or guaranteed by, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the Federal Farm Credit System shall be Additional Eligible Collateral only if, at the time, and during the course, of investment, it has at least the credit rating of "A-1+" or "AAA" by the Rating Agency;

(ii) demand and time deposits in, interest bearing trust accounts, certificates of deposit of, or bankers' acceptances issued by any depository institution or trust company (including the Trustee or any agent of the Trustee acting in their respective commercial capacities) incorporated under the laws of the United States or any State and subject to supervision and examination by Federal and/or State banking authorities so long as the commercial paper and/or the short-term debt obligations of such depository institution or trust company at the time of, and during the course of, such investment or contractual commitment providing for such investment have at least the credit rating of "A-1+" or "AAA" by the Rating Agency (or, in the case of a depository institution which is the principal subsidiary of a holding company, the commercial paper or other short-term debt obligations of such holding company have a credit rating of "A-1+" or "AAA" by the Rating Agency;

(iii) commercial paper having a maturity of not more than 180 days and having at the time, and during the course, of such investment at least the credit rating of "A-1+" by the Rating Agency;

(iv) repurchase agreements with respect to (a) any security described in clause (i) above or (b) any other security issued or guaranteed by an agency or instrumentality of the United States with an entity having the credit rating of "A-1+" or "AAA" by the Rating Agency. Copies of any repurchase agreement entered into will be delivered to the Rating Agency.

"Applicable Ratings" means, with respect to any entity and the Rating Agency, at the time of such measurement, the higher of (i) the ratings assigned by such Rating Agency with respect to long term or short term, as applicable, senior unsecured debt

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of such entity or (ii) the ratings assigned by such Rating Agency with respect to the long term or short term, as applicable, senior unsecured debt of any Credit Support Provider of such entity.

"Cash Settlement Amount" has the meaning given to it in the Credit Default Swap Confirmation.

"Cash Settlement Date" has the meaning given to it in the Indenture.

"Collateralizing Securities" means Permitted Investments (as defined in the Indenture) or Additional Eligible Collateral by Party A as collateral in accordance with the provisions hereof; provided, however, that the restriction on the maturity of the securities described in clause (i) and clause (ii) of the definition of "Permitted Investments" in the Indenture shall be deemed not to apply.

"Credit Default Swap Confirmation" has the meaning given to it in the Indenture.

"Eligible Credit Support Provider" means an entity which (a) has agreed in writing to act as a Credit Support Provider in respect of Party A's obligations hereunder, (b) at the time of such agreement, the Applicable Rating in respect of such entity is at least "A-1" (short-term) by the Rating Agency or, if such entity does not have a short term rating, "A+" (long term) by the Rating Agency, and (c) the Rating Condition is satisfied; provided, that, if Morgan Stanley or any Affiliate thereof (each, a "Morgan Stanley Designee") is designated as a Substitute Swap Counterparty, the Applicable Ratings in respect of such Morgan Stanley Designee, must be at least (1) the aforementioned ratings or (2) if such Morgan Stanley Designee posts Collateralizing Securities as described in Section 4 above, such lower ratings that, as described therein, will not cause a Rate Swap Counterparty Downgrade to result in an Additional Termination Event, or, in any event, any lower rating as to which the Rating Condition is satisfied.

"Event Determination Date" has the meaning given to it in the Indenture.

"Indenture" means the Series Indenture relating to the Notes, dated as of December 13, 2007, between Party B and LaSalle Bank National Association, as Trustee, together with the Standard Terms of Indenture incorporated therein and the Terms Schedule attached thereto.

"Initial Underlying Securities" has the meaning given to it in the Indenture.

"Interest Adjustment Payment" has the meaning given to it in the Indenture.

"Interest Payment Date" has the meaning given to it in the Indenture.

"Liquidity Fund" has the meaning given to it in the Indenture.

"Notes" means US$17,914,000 Floating Rate Notes due 2013 of Series 2007-41, issued by Party B on the Effective Date

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"Optional Termination" has the meaning given to it in the Credit Default Swap Confirmation.

"Optional Termination Date" has the meaning given to it in the Credit Default Swap Confirmation.

"Provisional Reserve Account" has the meaning given to it in the Indenture.

"Rating Agency" or "S&P" has the meaning given to it in the Indenture.

"Rating Condition" has the meaning given to it in the Indenture.

"Rate Swap Collateral" means Collateralizing Securities in an amount, as determined by the Calculation Agent, sufficient to provide Party B an amount equal to the Floating Amount II payable on the next following Floating Rate II Payer Payment Date. The amount that constitutes Rate Swap Collateral, and any Collateralizing Securities previously posted as Rate Swap Collateral, shall be recalculated by the Calculation Agent on a weekly basis and failure to restore compliance with the requirements of Section 4 above within five Business Days of such recalculation shall constitute an Additional Termination Event.

"Rate Swap Counterparty Downgrade" means the Applicable Rating in respect of Party A is less than "A-1" (short-term) by the Rating Agency or, if such entity does not have a short term rating, "A+" (long term) by the Rating Agency. If the Rating Agency introduces new criteria setting out a lower rating threshold or a lower Underlying Securities Deficiency Collateral requirement, such new criteria shall apply to the Rate Confirmation without further action by any person. Notwithstanding the foregoing, if the Applicable Rating in respect of the Swap Counterparty is greater than or equal to the current S&P rating in terms of the Notes, no Rate Swap Counterparty Downgrade shall be deemed to occur.

"Scheduled Maturity Date" has the meaning given to it in the Indenture.

"Substitute Swap Counterparty" means a counterparty (A)(i) as to which Party A has agreed to transfer all of its rights and obligations under the Swap Agreement and such transfer has satisfied the Rating Condition and (ii) that has agreed to assume all such rights and obligations, and (B) at the time such Substitute Swap Counterparty is designated by the Calculation Agent in accordance with the terms hereof, the Applicable Rating in respect of such Substitute Swap Counterparty is at least "A-1" (short-term) by the Rating Agency or, if such entity does not have a short term rating, "A+" (long term) by the Rating Agency; provided, that, if Morgan Stanley or any Affiliate thereof (each, a "Morgan Stanley Designee") is designated as a Substitute Swap Counterparty, the Applicable Ratings in respect of such Morgan Stanley Designee, must be at least (1) the aforementioned ratings or (2) if such Morgan Stanley Designee posts Collateralizing Securities as described in Section 4 above, such lower ratings that, as described therein, will not cause a Rate Swap Counterparty Downgrade to result in an Additional Termination Event, or, in any event, any lower rating as to which the Rating Condition is satisfied.

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"Termination Option" has the meaning given to it in the Credit Default Swap Confirmation.

"Underlying Securities" has the meaning given to it in the Indenture.

"Underlying Securities Account" has the meaning given to it in the Indenture.

9. Account Details

Payments to Party A: CITIBANK, New York SWIFT BIC Code: CITIUS33 ABA No. 021 000 089 Account Number: 4072 4601 FAO: Morgan Stanley Capital Services

Payments to Party B: LaSalle Bank N.A. ABA 071000505 Account Name: LaSalle Trust GL Acct: 2090067 Further CR: 711585 RE: Morgan Stanley ACES SPC, Series 2007-41 Attn: Thais Hayum

and such other account as may be specified in Schedule A

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Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to us.

Best regards,

MORGAN STANLEY CAPITAL SERVICES INC.

By: _______________________________ Name: Title:

Acknowledged and agreed as of the date first written above:

MORGAN STANLEY ACES SPC, acting for the account of the Series 2007-41 Segregated Portfolio

By: _______________________________ Name: Title:

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Schedule A

TERMS OF TRANSACTIONS

Transaction Notional Amount Spread Fixed Rate

Series 2007-41 Notes USD 17,914,000 1.30% per annum 1.30% per annum

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ANNEX C

FORM OF CONTINGENT FORWARD CONFIRMATION

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ACES 2007-41

Contingent Forward Confirmation

Date: December 13, 2007

To: Morgan Stanley ACES SPC, acting for the account of the Series 2007-41 Segregated Portfolio

From: MS Remora Ltd.

Attn: The Directors Contact: Structured Credit Products Group, Hong Kong: Dean Yogev

Fax: +1 (345) 945-7100 Fax: +852-3407-5096

Tel: +852-2848-5980

Re: Contingent Forward Transactions MS Reference No. N4WX8 – Series 2007-41 Notes

The purpose of this letter agreement is to confirm the terms and conditions of the Transactions entered into between you and MS Remora Ltd. ("MSRL"), with Morgan Stanley & Co. Incorporated ("MS&Co.") as Calculation Agent, on the Trade Date specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the Agreement below.

The definitions and provisions contained in the 1997 ISDA Government Bond Option Definitions (the "Bond Option Definitions") (as published by the International Swaps and Derivatives Association, Inc. ("ISDA")) are incorporated into this Confirmation. In the event of any inconsistency between those definitions and this Confirmation, this Confirmation will govern.

1. This Confirmation supplements, forms part of, and is subject to, the 1992 ISDA Master Agreement dated as of August 5, 2004 (including the Schedule thereto dated August 5, 2004), as amended and supplemented from time to time (the "Agreement") between you and us. All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

2. The terms of the particular Transaction to which this Confirmation relates are as follows:

(i) General Terms:

Commencement Date: December 13, 2007

Party B: Morgan Stanley ACES SPC, acting for the account of the Series 2007-41 Segregated

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Portfolio ("Party B" or the "Issuer")

Party A: MSRL

Bonds: As specified in Schedule A hereto.

If the Underlying Securities in respect of a Transaction shall, at any time, consist of assets other than the Initial Underlying Securities and/or U.S. dollars, such Underlying Securities shall be the Bonds for the purposes of this transaction with a Face Amount Purchased equal to the aggregate principal amount or payable amount of such Underlying Securities.

The terms set out in (ii) below shall not apply if the Underlying Securities consist U.S. dollars.

Premium: Party A and Party B agree that this Transaction is entered into in mutual consideration of the Interest Rate Swap and the Credit Default Swap and in consideration of the mutual covenants contained herein and, therefore, no separate premium is payable hereunder.

(ii) Contingent Forward Terms:

Forward Purchase and Sale: Upon the occurrence of a Contingency described in clause (a) of the definition thereof (for settlement on the related Cash Settlement Date); or upon the occurrence of a Contingency described in clause (b) of the definition thereof (for settlement on such date) (in accordance with the Following Business Day Convention), in each case, so long as the Bonds are outstanding, Party A will make a payment to Party B equal to the Applicable Amount and Party B will deliver to Party A the par amount of the Bonds equal to the Applicable Amount.

Contingency: The occurrence of (a) a Cash Settlement Date or (b) the Business Day immediately

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preceding the Scheduled Maturity Date; but in the case of clause (b) only if each of the following conditions is satisfied on such Business Day: (i) the Underlying Securities have not been paid in full to the holders thereof on or prior to the Business Day immediately preceding the Scheduled Maturity Date and (ii) no Indenture Event of Default (including an Underlying Securities Default, but excluding an Indenture Event of Default arising from a Swap Counterparty Event) or an Early Redemption Event (other than an Early Redemption Event consisting of a Related Agreement Redemption Event arising from a Swap Counterparty Event) has occurred.

Applicable Amount: (i) in the case of a purchase and sale upon the occurrence of a Cash Settlement Date, an amount in USD equal to the lesser of the Cash Settlement Amount payable under the related Credit Default Swap and the par or payable amount of all Bonds then held by the Issuer with respect to the relevant Transaction; and

(ii) in the case of a purchase and sale on the Business Day immediately preceding the Scheduled Maturity Date, an amount in USD equal to the par or payable amount of all Bonds then held by the Issuer with respect to the relevant Transaction.

Expiration Date: With respect to a Transaction, the earlier of (i) the Scheduled Termination Date (as defined in the Credit Default Swap Confirmation in respect of the Credit Default Swap) and (ii) the date the Bonds were redeemed or paid

Expiration Time: 4:00 p.m. New York time

Multiple Exercise: Applicable

Business Days: New York, Chicago, London and Hong

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Kong

3. Additional Termination Event

In respect of Party A, the occurrence of a Contingent Forward Counterparty Downgrade shall constitute an Additional Termination Event; provided, that a Contingent Forward Counterparty Downgrade shall not constitute an Additional Termination Event if Party A takes one of the following actions at its sole expense: (i) in the event of a Contingent Forward Counterparty Downgrade described in the definition thereof, within three Business Days after the Calculation Agent or the Trustee has notified Party A in writing that a Contingent Forward Counterparty Downgrade has occurred, Party A posts Underlying Securities Deficiency Collateral for the benefit of Party B; (ii) Party A has elected to designate, by written notice to Party B, the Calculation Agent and the Rating Agency, a Substitute Contingent Forward Counterparty in respect of the Contingent Forward Confirmation within three Business Days of the occurrence of such Contingent Forward Counterparty Downgrade and such substitution shall occur within thirty days of such Contingent Forward Counterparty Downgrade; (iii) Party A has within ten Business Days of the occurrence of such Contingent Forward Counterparty Downgrade, procured the appointment of an Eligible Credit Support Provider with respect to Party A's obligations hereunder and such appointment shall occur within thirty days of such Contingent Forward Counterparty Downgrade, or (iv) Party A has complied with such other collateral posting requirements, if any, with respect to the Contingent Forward Confirmation, in connection with which the Rating Condition has been met. In the event of an Additional Termination Event under this paragraph, Party A shall be deemed the sole Affected Party.

4. Credit Support Annex:

In the case of Party A, the credit support annex signed by Party A and Party B and dated as of April 1, 2005 shall be a Credit Support Document with respect to this Transaction provided that:

(A) the "Minimum Transfer Amount" with respect to Party A shall be amended to USD50,000;

(B) the words "upon a demand made by the Secured Party on or promptly following a Valuation Date," shall be deleted from Paragraph 3(a);

(C) Paragraph 4(b) shall be deleted and replaced by the following:

"4(b) Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise specified:

(i) if the Pledgor is required to Transfer Eligible Credit Support under Paragraph 3(a), then the relevant Transfer will be made not later than the close of business on the next Local Business Day; and

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(ii) if a demand for the Transfer of Posted Credit Support is made by the Notification Time, then the relevant Transfer will be made not later than the close of business on the next Local Business Day; if a demand is made after the Notification Time, then the relevant Transfer will be made not later than the close of business on the second Local Business Day thereafter.";

5. Additional Definitions

"Additional Eligible Collateral" means any of the following investments:

(i) direct obligations of, and obligations fully guaranteed by, the United States, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit System or any agency or instrumentality of the United States the obligations of which are explicitly backed by the full faith and credit of the United States of America; provided that obligations of, or guaranteed by, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the Federal Farm Credit System shall be Additional Eligible Collateral only if, at the time, and during the course, of investment, it has at least the credit rating of "A-1+" or "AAA" by the Rating Agency;

(ii) demand and time deposits in, interest bearing trust accounts, certificates of deposit of, or bankers' acceptances issued by any depository institution or trust company (including the Trustee or any agent of the Trustee acting in their respective commercial capacities) incorporated under the laws of the United States or any State and subject to supervision and examination by Federal and/or State banking authorities so long as the commercial paper and/or the short-term debt obligations of such depository institution or trust company at the time of, and during the course of, such investment or contractual commitment providing for such investment have at least the credit rating of "A-1+" or "AAA" by the Rating Agency (or, in the case of a depository institution which is the principal subsidiary of a holding company, the commercial paper or other short-term debt obligations of such holding company have a credit rating of "A-1+" or "AAA" by the Rating Agency;

(iii) commercial paper having a maturity of not more than 180 days and having at the time, and during the course, of such investment at least the credit rating of "A-1+" by the Rating Agency;

(iv) repurchase agreements with respect to (a) any security described in clause (i) above or (b) any other security issued or guaranteed by an agency or instrumentality of the United States with an entity having the credit rating of "A-1+" or "AAA" by the Rating Agency. Copies of any repurchase agreement entered into will be delivered to the Rating Agency.

"Advance Rate" means on any date:

(i) if the Underlying Securities consist of the Initial Underlying Securities, then the relevant rate (expressed as a percentage) shown in the right-hand column under the

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heading "Advance Rate" of the table below that corresponds to the relevant expected maturity on such date of the Initial Underlying Securities shown in the left-hand column under the heading "Expected Maturity":

Expected Maturity Advance Rate

Maturing up to 1 year 99.0%

Maturing in more than 1 year but less than or equal to 3 years 97.7%

Maturing in more than 3 years but less than or equal to 5 years 96.0%

Maturing in more than 5 years but less than or equal to 7 years

93.8%

Maturing in more than 7 years but less than or equal to 10 years 92.2%

Maturing in more than 10 years 88.6%

(ii) if the Underlying Securities consist of Substitute Underlying Securities (as defined in the Indenture) that are assets listed in Clause (i) of the definition of Underlying Securities, then the relevant rate (expressed as a percentage) shown in the right-hand column under the heading "Advance Rate" of the table below that corresponds to the relevant expected maturity on such date of such Substitute Underlying Securities shown in the left-hand column under the heading "Expected Maturity":

Expected Maturity Advance Rate

Maturing up to 1 year 98%

Maturing in more than 1 year but less than or equal to 3 years 95.8%

Maturing in more than 3 years but less than or equal to 5 years 91.9%

Maturing in more than 5 years but less than or equal to 7 years

88.2%

Maturing in more than 7 years but less than or equal to 10 years 86.6%

Maturing in more than 10 years 78.7%

and (iii) if the Underlying Securities consist of Substitute Underlying Securities that are assets listed in Clause (ii) or (iii) of the definition of Underlying Securities, 100%.

"Applicable Rating(s)" means, with respect to any entity and the Rating Agency, at the time of such measurement, the higher of (x) the ratings assigned with respect to long term

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or short term, as applicable, senior unsecured debt of such entity or (y) the ratings assigned with respect to the long term or short term, as applicable, senior unsecured debt of any Credit Support Provider of such entity.

"Cash Redemption Notification" has the meaning set forth in the Indenture.

"Cash Settlement Amount" has the meaning given to it in the Credit Default Swap Confirmation.

"Cash Settlement Date" means each Cash Settlement Date in respect of the Credit Default Swap as set out in the Credit Default Swap Confirmation.

"Contingent Forward Collateralizing Securities" means (1) Permitted Investments, provided, however, that the restriction on the maturity of the securities described in clause (i) and clause (ii) of the definition of "Permitted Investments" shall be deemed not to apply; (2) Additional Eligible Collateral and/or, (3) any securities issued by the issuer of the Underlying Securities of the same series as the Underlying Securities provided, however, that the Underlying Securities remain rated "AAA" by the Rating Agency and are subject to the same Advance Rate;

"Contingent Forward Counterparty Downgrade" means the Applicable Ratings in respect of the Contingent Forward Guarantor are downgraded to less than "A+" (long-term) or "A-1" (short-term) by the Rating Agency. Notwithstanding the foregoing, if the long-term issuer credit rating of the Contingent Forward Guarantor is greater than or equal to the current rating of the Notes by the Rating Agency, then no Contingent Forward Counterparty Downgrade shall be deemed to occur.

"Contingent Forward Guarantor" means Morgan Stanley.

"Credit Default Swap" means the credit default swap transaction under the Credit Default Swap Confirmation relating to the Transaction.

"Credit Default Swap Confirmation" has the meaning set forth in the Indenture.

"Early Redemption Event" has the meaning given to it in the Indenture.

"Indenture" means the Series 2007-41 Indenture relating to the Notes, dated as of December 13, 2007, between Party B and LaSalle Bank National Association, as Trustee, together with the Standard Terms of Indenture incorporated therein and the Terms Schedule attached thereto.

"Indenture Event of Default" has the meaning given to it in the Indenture.

"Interest Rate Swap" means the interest rate swap transaction under the Rate Confirmation relating to the Transaction.

"Notes" means the U.S.$17,914,000 Floating Rate Notes due 2013 of Series 2007-41, issued by Party B on the Effective Date.

"Notification Deadline" has the meaning set forth in the Indenture.

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"Optional Termination" has the meaning given it in the Credit Default Swap Confirmation.

"Optional Termination Date" has the meaning given it in the Credit Default Swap Confirmation.

"Outstanding Principal Notional Amount" has the meaning given to Outstanding Notional Amount in the Credit Default Swap Confirmation.

"Permitted Investments" has the meaning set forth in the Indenture.

"Principal Balance" has the meaning given to it in the Indenture.

"Rate Confirmation" has the meaning given to it in the Indenture.

"Rating Condition" means, with respect to any action subject to such condition, that the Rating Agency has notified Party B and the Trustee in writing that such action will not result in a reduction or withdrawal of the then current rating of the Notes rated by such Rating Agency.

"Scheduled Maturity Date" has the meaning given to it in the Indenture.

"Substitute Contingent Forward Counterparty" means a counterparty (A) (i) as to which Party A has agreed to transfer all of its rights and obligations under the Contingent Forward Agreement and such transfer has satisfied the Rating Condition and (ii) that has agreed to assume all such rights and obligations, and (B) at the time such Substitute Contingent Forward Counterparty is designated by the Calculation Agent in accordance with the terms hereof, the Applicable Ratings in respect of such Substitute Contingent Forward Counterparty are at least "A+" (long-term) and at least "A-1" (short-term) by the Rating Agency; provided that, if Morgan Stanley or any affiliate thereof (each, a "Morgan Stanley Designee") is designated as a Substitute Contingent Forward Counterparty, such Morgan Stanley Designee must (1) have the aforementioned ratings, (2) post Contingent Forward Collateralizing Securities in an amount that will not cause a Contingent Forward Counterparty Downgrade to result in an Additional Termination Event, or (3) otherwise satisfy the Rating Condition.

"Termination Option" has the meaning given it in the Credit Default Swap Confirmation.

"Underlying Securities" has the meaning given to it in the Indenture.

"Underlying Securities Deficiency Collateral" means Contingent Forward Collateralizing Securities in an amount, as determined by the Calculation Agent, equal to the difference of (a) the then Outstanding Principal Notional Amount minus (b) the product of (x) the then market value of the Underlying Securities (expressed as a percentage of the outstanding principal balance of such Underlying Securities) multiplied by (y) the Advance Rate, if applicable, multiplied by (z) the then Outstanding Principal Notional Amount. The market value of the Underlying Securities, and any Underlying Securities Deficiency Collateral previously posted, shall be recalculated on a weekly basis and failure to restore compliance with the requirements of Section 3 above within three Business Days of such recalculation

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shall constitute an Additional Termination Event. Notwithstanding the foregoing, at least once per calendar quarter, the market value of the Underlying Securities will be determined by the Calculation Agent on the basis of the average of three quotations obtained from dealers in obligations of the type of Underlying Securities (as selected by the Calculation Agent in good faith and in a commercially reasonable manner) or the Bloomberg pricing service in respect of the Underlying Securities.

"Underlying Securities Default" has the meaning given to it in the Indenture.

6. Optional Termination under Credit Default Swap Confirmation

If a Transaction under and as defined in the Credit Default Swap Confirmation is terminated pursuant to the right of Optional Termination as provided in the Credit Default Swap Confirmation, the related Transaction under this Master Confirmation (the "Relevant Transaction") shall terminate on an exercise of the Termination Option on the applicable Optional Termination Date under the Credit Default Swap Confirmation.

Upon any such termination, no further amounts shall be payable by either party to the other under section 6(e) of the Agreement in respect of the termination of such Relevant Transaction, other than any amounts which should have been paid under such Relevant Transaction on or prior to the Optional Termination Date and which remain unpaid and provided that if Party A shall have made a payment to Party B under the Relevant Transaction but Party A shall not have received a par or payable amount of Bonds equal to the amount paid to Party B, Party A shall, notwithstanding the foregoing, have a claim against Party B for an amount equal to the par or payable amount of the Bonds which Party B failed to deliver to Party A.

7. Termination Payments

In the event an Early Termination Date is designated with respect to which this Transaction is an Affected Transaction no termination payment shall be payable by either party; provided, however, that if Party A shall have made a payment to Party B under such Transaction but Party A shall not have received a par or payable amount of Bonds equal to the amount paid to Party B, Party A shall, notwithstanding the foregoing, have a claim against Party B for an amount equal to the par or payable amount of the Bonds which Party B failed to deliver to Party A.

8. Redemption not Termination

The redemption of the Notes following the reduction of the outstanding principal balance of the Notes to zero will not constitute an Additional Termination Event with respect to any Transaction under the Agreement.

HKG-1/715729/06 - 10 - 253644/10-40343641

9. Account Details

Payments to Party A: JPMorgan Chase Bank Account Name: MS Remora Bank Acct. #: 066910307 ABA No.: 021000021

Operations Contact: Mark Esparrago Fixed Income Division Tel: +81 3 5424-7582

Payments to Party B: USD settlements:

LaSalle Bank N.A. ABA 071000505 Account Name: LaSalle Trust GL Acct: 2090067 Further CR: 711585 RE: Morgan Stanley ACES SPC, Series 2007-41 Attn: Thais Hayum

Please confirm that the foregoing correctly sets forth the terms of our agreement for MS Reference No. N4WX8 by executing this Confirmation in the space provided below and returning a copy via fax to the contact set forth above.

Please contact the undersigned immediately if the terms and conditions of this Confirmation are not in accordance with your understanding of this agreement.

HKG-1/715729/06 - 11 - 253644/10-40343641

We are delighted to have entered into this Transaction with you, and we look forward to working with you again.

MS REMORA LTD.

By: _________________________________ Name: Title:

Acknowledged and agreed as of the date first written above:

MORGAN STANLEY ACES SPC, acting for the account of the Series 2007-41 Segregated Portfolio

By: _________________________________ Name: Title:

HKG-1/715729/06 - 12 - 253644/10-40343641

Schedule A

TERMS OF TRANSACTIONS AND DESCRIPTION OF BONDS

Transaction Face Amount Purchased

Initial Underlying Security:

Initial Underlying

Security Issuer:

CUSIP Expected Maturity Date

Series 2007-41 Notes

USD17,914,000 US$300,000,000 Class A (2006-8)

Series Notes

Capital One Multi-Asset

Execution Trust

14041NCX7 June 17, 2013

HKG-1/715683/06 Annex D-1 253644/10-40343641

ANNEX D

INITIAL UNDERLYING SECURITIES PROSPECTUS

Prospectus Supplement dated June 27, 2006 to Prospectus dated May 22, 2006

$300,000,000 Class A(2006-8) Card series Notes

Capital One BankSponsor, Servicer and Originator of Assets

Capital One Funding, LLCDepositor and Transferor

Capital One Multi-asset Execution TrustIssuing Entity

Class A(2006-8) Notes

Principal amount $300,000,000Interest rate One month LIBOR plus 0.03% per yearInterest payment dates 15th day of each calendar month, beginning in

August 2006Expected principal payment date June 17, 2013Legal maturity date April 15, 2016Expected issuance date June 30, 2006Price to public $300,000,000 (or 100.00%)Underwriting discount $600,000 (or 0.20%)Proceeds to the issuing entity $299,400,000 (or 99.80%)

The Class A(2006-8) notes are a tranche of Class A Card series notes.

The assets of the issuing entity, the Capital One Multi-asset Execution Trust, securing the Card series notes include:

• the collateral certificate, Series 2002-CC issued by the Capital One Master Trust, representing an undivided interestin the assets in the Capital One Master Trust; and

• the collection account and other supplemental accounts.

The assets of the Capital One Master Trust primarily include receivables arising in credit card accounts owned by CapitalOne Bank. The assets of the Capital One Master Trust may, in the future, include receivables arising in credit card accountsowned by Capital One, F.S.B. or any affiliate of Capital One Bank or Capital One, F.S.B.

You should consider the discussion under “Risk Factors” beginning on page 15 of the accompanying prospectusbefore you purchase any Card series notes.

The Card series notes are obligations of the issuing entity only and are not obligations of or interests in Capital OneBank, Capital One, F.S.B., Capital One Funding, LLC, their affiliates or any other person. Noteholders will have norecourse to any other assets of the issuing entity for the payment of the Card series notes.

The Card series notes are not insured or guaranteed by the Federal Deposit Insurance Corporation or any othergovernmental agency or instrumentality.

Neither the SEC nor any state securities commission has approved these notes or determined that this prospectussupplement or the prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

Underwriters

Morgan Stanley Goldman, Sachs & Co. Merrill Lynch & Co.

Important Notice about Information Presented in thisProspectus Supplement and the Accompanying Prospectus

We provide information to you about the Card series notes in two separate documents:

(a) this prospectus supplement, which will describe the specific terms of the Class A(2006-8) notes, and

(b) the accompanying prospectus, which provides general information about the Card series notes and eachother series of notes which may be issued by the Capital One Multi-asset Execution Trust some of which may notapply to the Class A(2006-8) notes.

This prospectus supplement may be used to offer and sell the Class A(2006-8) notes only if accompanied bythe prospectus.

This prospectus supplement supplements disclosure in the accompanying prospectus. You should rely onlyon the information provided in this prospectus supplement and the accompanying prospectus including anyinformation incorporated by reference. We have not authorized anyone to provide you with different information.

We are not offering the Class A(2006-8) notes in any State where the offer is not permitted. We do notclaim the accuracy of the information in this prospectus supplement or the accompanying prospectus as of anydate other than the dates stated on their respective covers.

We include cross-references in this prospectus supplement and in the accompanying prospectus to captionsin these materials where you can find further related discussions. The Table of Contents in this prospectussupplement and in the accompanying prospectus provide the pages on which these captions are located.

Table of Contents

Page

Summary of Terms . . . . . . . . . . . . . . . . . . . . S-1Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . S-1Securities Offered . . . . . . . . . . . . . . . . . . . . S-1The Master Trust . . . . . . . . . . . . . . . . . . . . . S-2Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3Nominal Liquidation Amount . . . . . . . . . . . S-3Subordination; Credit Enhancement . . . . . . S-3Required Subordinated Amount and

Conditions to Issuance . . . . . . . . . . . . . . . S-4Security for the Notes . . . . . . . . . . . . . . . . . S-6Accumulation Reserve Account . . . . . . . . . S-6Limited Recourse to COMET . . . . . . . . . . . S-6Stock Exchange Listing . . . . . . . . . . . . . . . . S-6Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-7Federal Income Tax Consequences . . . . . . . S-7ERISA Considerations . . . . . . . . . . . . . . . . . S-7Required Subordinated Amounts . . . . . . . . . S-8

Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . S-10

Page

Annex I . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-I-1

The Capital One Credit CardPortfolio . . . . . . . . . . . . . . . . . . . . . . . . . A-I-1

The Originators . . . . . . . . . . . . . . . . . . . . . A-I-1

The Master Trust Portfolio . . . . . . . . . . . . A-I-1General . . . . . . . . . . . . . . . . . . . . . . . . . . . A-I-1Delinquency and Loss Experience . . . . . . A-I-2Revenue Experience . . . . . . . . . . . . . . . . A-I-4Payment Rates . . . . . . . . . . . . . . . . . . . . . A-I-5The Receivables . . . . . . . . . . . . . . . . . . . . A-I-5

Static Pool Information . . . . . . . . . . . . . . . A-I-8

Annex II . . . . . . . . . . . . . . . . . . . . . . . . . . . A-II-1

Outstanding Series, Classes AndTranches of Notes . . . . . . . . . . . . . . . . . A-II-1

Annex III . . . . . . . . . . . . . . . . . . . . . . . . . . . A-III-1

Outstanding Master Trust Series . . . . . . . A-III-1

i

[THIS PAGE INTENTIONALLY LEFT BLANK]

Summary of Terms

This summary does not contain all the information you may need to make an informed investmentdecision. You should read this prospectus supplement and the accompanying prospectus in their entiretybefore you purchase any notes.

This prospectus supplement and the accompanying prospectus use defined terms. You can find a listing ofdefined terms in the “Glossary of Defined Terms” beginning on page 149 in the accompanying prospectus.

Risk Factors

Investment in the Class A(2006-8) notes involvesrisks. You should consider carefully the riskfactors beginning on page 15 in the accompanyingprospectus.

Securities Offered

$300,000,000 Floating Rate Class A(2006-8) notes.

These Class A(2006-8) notes are part of a series ofnotes called the “Card series.” The Card seriesconsists of Class A notes, Class B notes, Class Cnotes and Class D notes. The Class A(2006-8) notesare a tranche of the Class A Card series notes.

These Class A(2006-8) notes are issued by, and areobligations of, the issuing entity, the Capital OneMulti-asset Execution Trust. The issuing entity hasissued and expects to issue other classes and tranchesof notes of the Card series which may have differentinterest rates, interest payment dates, expectedprincipal payment dates, legal maturity dates andother characteristics. In addition, the issuing entitymay issue other series of notes which may havedifferent interest rates, interest payment dates,expected principal payment dates, legal maturitydates and other characteristics. See “The Notes—Issuances of New Series, Classes and Tranches ofNotes” in the accompanying prospectus.

We refer to the Capital One Multi-asset ExecutionTrust as the “issuing entity” or “COMET.”

Each class of notes in the Card series may consist ofmultiple tranches. Notes of any tranche may beissued on any date so long as there is sufficient creditenhancement on that date, either in the form ofoutstanding subordinated notes or other forms ofcredit enhancement, and all other conditions toissuance are satisfied. See “The Notes—Issuances ofNew Series, Classes and Tranches of Notes” in theaccompanying prospectus.

In general, the subordinated notes of the Card seriesserve as credit enhancement for all of the senior notesof the Card series, regardless of whether thesubordinated notes are issued before, at the sametime as or after the senior notes of the Card series.However, each senior tranche of notes has access tocredit enhancement in an amount not exceeding itsrequired subordinated amount minus the amount ofusage of that required subordinated amount. See“—Required Subordinated Amount and Conditions toIssuance” below and “The Notes—RequiredSubordinated Amount and Usage” in theaccompanying prospectus for a discussion of requiredsubordinated amounts and usage.

Only the Class A(2006-8) notes are being offeredthrough this prospectus supplement and theaccompanying prospectus. Other series, classesand tranches of notes, including other tranches ofnotes that are included in the Card series as a partof the Class A notes, have been issued by COMETand may be issued by COMET in the futurewithout the consent of, or notice to, anynoteholders.

These Class A(2006-8) notes are expected to be thethirty-eighth tranche of Class A notes issued byCOMET in the Card series. On the expected issuancedate of the Class A(2006-8) notes, the Card serieswill be the only outstanding series of notes issued byCOMET.

Other series of certificates of Capital One MasterTrust and other series, classes and tranches of notesof COMET may be issued without the consent of, ornotice to, any noteholders or certificateholders.

See “Annex II: Outstanding Series, Classes andTranches of Notes” for information on the otheroutstanding notes in the Card series.

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The Master Trust

The Card series, including your Class A(2006-8)notes, will be secured by the COMT collateralcertificate owned by COMET. The COMT collateralcertificate will be the primary source of funds for thepayment of principal of and interest on theClass A(2006-8) notes. The COMT collateralcertificate issued by the Capital One Master Trustrepresents an undivided interest in the assets of theCapital One Master Trust.

We refer to the Capital One Master Trust as“COMT” or the “master trust.”

See “Annex III: Outstanding Master Trust Series”for information on the other outstanding series ofcertificates issued by the master trust.

The master trust’s assets primarily include credit cardreceivables from selected MasterCard® and VISA®

credit card accounts that meet the eligibility criteriafor inclusion in the master trust. These eligibilitycriteria are discussed in “The Master Trust—Additionof Master Trust Assets” in the accompanyingprospectus.

As of May 26, 2006, the master trust included$39,190,767,953 of principal receivables and$671,981,845 of finance charge receivables. Formore of a description of certain aspects of the mastertrust, Capital One credit card portfolio, Capital OneBank and Capital One, F.S.B., see “Annex I.”

Interest

These Class A(2006-8) notes will accrue interest at anannual rate equal to one-month LIBOR plus 0.03%, asdetermined on the related LIBOR determination date.

Interest on these Class A(2006-8) notes will begin toaccrue on the issuance date for the Class A(2006-8)notes, expected to be June 30, 2006, and will becalculated on the basis of a 360-day year and theactual number of days in the related interest period.Each interest period will begin on and include aninterest payment date and end on but exclude the nextinterest payment date. However, the first interestperiod will begin on and include the issuance date forthe Class A(2006-8) notes and end on but exclude thefirst interest payment date for the Class A(2006-8)notes, August 15, 2006.

LIBOR for each interest period will be determined onthe second business day before the beginning of thatinterest period. However, LIBOR for the initialinterest period will be determined two business daysbefore the issuance date of the Class A(2006-8)notes. For calculating LIBOR only, a business day isany U.S. business day that U.S. dollar deposits aretransacted in the London interbank market. A U.S.business day is any business day in New York, NewYork, Richmond, Virginia or Falls Church, Virginia.

LIBOR will be the rate appearing on Telerate Page3750 as of 11:00 a.m., London time, on that date fordeposits in U.S. dollars for a one-month period. Ifthat rate does not appear on Telerate Page 3750, theindenture trustee will request four prime banks(selected by the beneficiary of COMET) in theLondon interbank market to provide quotations oftheir rates for U.S. dollar deposits for a one-monthperiod, at approximately 11:00 a.m., London time, onthat day. LIBOR will then be the average of thoserates. However, if less than two rates are provided,LIBOR will be the average of the rates for loans inU.S. dollars to leading European banks for a one-month period offered by four major banks (selectedby the beneficiary of COMET) in New York City, atapproximately 11:00 a.m., New York City time, onthat day.

Interest on the Class A(2006-8) notes for any interestpayment date will equal the product of:

• the Class A(2006-8) note interest rate for theapplicable interest period; times

• the actual number of days in the related interestperiod divided by 360; times

• the outstanding dollar principal amount of theClass A(2006-8) notes as of the related recorddate.

COMET will make interest payments on theseClass A(2006-8) notes on the 15th day of eachmonth, beginning in August 2006. Interest paymentsdue on a day that is not a business day in New York,New York, Richmond, Virginia and Falls Church,Virginia will be made on the following business day.

See “Prospectus Summary—Interest Payments” inthe accompanying prospectus for a general discussionof the priority of interest payments for differentclasses of notes.

S-2

Principal

COMET expects to pay the stated principal amountof these Class A(2006-8) notes in one payment onJune 17, 2013, which is the expected principalpayment date, and is obligated to do so if funds areavailable for that purpose in accordance with theprovisions of the indenture and the Card seriesindenture supplement. If the stated principal amountof these Class A(2006-8) notes is not paid in full onthe expected principal payment date due toinsufficient funds, noteholders will generally nothave any remedies against COMET until April 15,2016, the legal maturity date of theseClass A(2006-8) notes.

If the stated principal amount of theseClass A(2006-8) notes is not paid in full on theexpected principal payment date, then an earlyredemption event will occur for theseClass A(2006-8) notes. As a result, subject to theprincipal payment rules described below under ”—Subordination; Credit Enhancement” and“—Required Subordinated Amount and Conditions toIssuance,” and “Prospectus Summary—Subordination” and “The Notes—Subordination ofInterest and Principal” in the accompanyingprospectus, principal and interest payments on theseClass A(2006-8) notes will be made monthly untilthey are paid in full or until the legal maturity dateoccurs, whichever is earlier.

Principal of these Class A(2006-8) notes may be paidearlier than the expected principal payment date ifany other early redemption event or an event ofdefault and acceleration occurs for theseClass A(2006-8) notes. See “The Notes—EarlyRedemption Events” and “—Events of Default” inthe accompanying prospectus.

Nominal Liquidation Amount

The initial nominal liquidation amount of theseClass A(2006-8) notes is $300,000,000.

The nominal liquidation amount of a tranche of Cardseries notes is based on the initial outstanding dollarprincipal amount of that tranche of notes.

The nominal liquidation amount may be reduced byallocations of charge-offs from uncovered Card seriesdefaulted amounts and, for subordinated tranches ofnotes, reallocations of principal amounts from those

subordinated notes to pay interest on senior classes ofCard series notes or to pay a portion of the servicingfees. If the nominal liquidation amount of theseClass A(2006-8) notes has been reduced, principalamounts and finance charge amounts allocated to payprincipal of and interest on these Class A(2006-8)notes will be reduced. If the nominal liquidationamount of these Class A(2006-8) notes is less thanthe outstanding dollar principal amount of theseClass A(2006-8) notes, the principal of and intereston these Class A(2006-8) notes may not be paid infull.

For a more detailed discussion of nominal liquidationamount, see “The Notes—Stated Principal Amount,Outstanding Dollar Principal Amount, AdjustedOutstanding Dollar Principal Amount and NominalLiquidation Amount” in the accompanyingprospectus.

Subordination; Credit Enhancement

Credit enhancement for the Class A(2006-8) noteswill be provided through subordination. The amountof subordination available to provide creditenhancement to any tranche of notes is limited to itsavailable subordinated amount. If the availablesubordinated amount for any tranche of notes hasbeen reduced to zero, losses will be allocated to thattranche of notes pro rata based on the nominalliquidation amount of those notes. The nominalliquidation amount of those notes will be reduced bythe amount of losses allocated to that tranche ofnotes, and it is unlikely that those notes will receivetheir full payment of principal and accrued interest.

Principal amounts remaining on any payment dateafter any reallocations to pay interest on the seniorclasses of notes of the Card series or to pay servicingfees will be applied to make targeted deposits to theprincipal funding subaccounts of the relevant classesof notes in the following order: first to the Class Anotes, then to the Class B notes, then to the Class Cnotes, and finally to the Class D notes. In each case,principal payments to subordinated classes of noteswill only be made if senior classes of notes havereceived full principal payments on that date and therelated subordinated notes are no longer needed toprovide the required credit enhancement.

S-3

Required Subordinated Amount and Conditionsto Issuance

The conditions described under “The Notes—Issuances of New Series, Classes and Tranches ofNotes” in the accompanying prospectus must besatisfied in connection with any new issuance ofnotes. In addition, in order to issue a tranche (oradditional notes within a tranche) of Class A notes,Class B notes or Class C notes in the Card series, atranche’s required subordinated amount of thenominal liquidation amount of subordinated Cardseries notes must be outstanding and available on theissuance date. See the chart titled “RequiredSubordinated Amounts” below for a depiction ofrequired subordinated amounts and “The Notes—Required Subordinated Amount and Usage” in theaccompanying prospectus for a general discussion ofrequired subordinated amounts.

Class A Required Subordinated Amount. The totalrequired subordinated amount of subordinated notesfor a tranche of Class A Card series notes is generallyequal to the sum of the required subordinated amountof Class B notes, the required subordinated amountof Class C notes and the required subordinatedamount of Class D notes for that tranche of Class ACard series notes.

For each tranche of Class A Card series notes, therequired subordinated amount of Class B notes, therequired subordinated amount of Class C notes andthe required subordinated amount of Class D notes,in each case, will be generally equal to a statedpercentage of the adjusted outstanding dollarprincipal amount of that tranche of Class A notes.Initially, for the Class A(2006-8) notes, that statedpercentage is 10.8434% for Class B notes, 8.4338%for Class C notes and 1.2049% for Class D notes.COMET may change any of these percentages solong as the sum of these stated percentages for theClass A(2006-8) notes is equal to or greater than20.4821%, and provided that change will not result ina shortfall in the available subordinated amount forany tranche of Card series notes. Therefore, anycombination of percentages of Class B notes, Class Cnotes or Class D notes would satisfy the requiredsubordinated amount for the Class A(2006-8) notes,as long as they added up to 20.4821%, and providedthat change would not result in a shortfall in the

available subordinated amount for any tranche ofCard series notes.

Class B Required Subordinated Amount. The totalrequired subordinated amount of subordinated notesfor a tranche of Class B Card series notes is equal tothe sum of the required subordinated amount of ClassC notes and the required subordinated amount ofClass D notes for that tranche of Class B Card seriesnotes. Generally, Class B Card series notes whichprovide credit enhancement for the Class A Cardseries notes will share the same credit enhancementprovided to those Class A notes by the Class C notesand Class D notes in the Card series. Therefore,(i) the required subordinated amount of Class C notesfor a tranche of Class B Card series notes willgenerally be equal to that Class B tranche’s prorata share of the aggregate required subordinatedamount of Class C notes for all Class A notes in theCard series and (ii) the required subordinated amountof Class D notes for a tranche of Class B Card seriesnotes will generally be that Class B tranche’s prorata share of the required subordinated amount ofClass D notes for all Class A notes in the Card series.See “The Notes—Required Subordinated Amount andUsage—Class B Required Subordinated Amount” inthe accompanying prospectus for exceptions to theserules.

In addition, if the adjusted outstanding dollarprincipal amount of the Class B Card series notes isgreater than the total required subordinated amountof Class B notes for all Class A Card series notes, therequired subordinated amount of subordinated notesfor each tranche of Class B Card series notes willinclude that Class B tranche’s pro rata share of thatexcess, times a stated percentage. Similarly, therequired subordinated amount of Class C notes andthe required subordinated amount of Class D notesfor each tranche of Class B Card series notes willinclude that Class B tranche’s pro rata share of therelated excess for each such class, times a statedpercentage.

For example, prior to the issuance of any Class ACard series notes, the Class B required subordinatedamount of subordinated notes will be based entirelyon the calculation described in the precedingparagraph. Once Class A Card series notes are issuedthat rely on Class B notes for credit enhancement, the

S-4

Class B required subordinated amount ofsubordinated notes will be based on the calculationsdescribed in each of the preceding two paragraphs.However, reductions in the adjusted outstandingdollar principal amount of a tranche of Class A Cardseries notes will generally result in a reduction in therequired subordinated amount for that tranche ofClass A notes. Consequently, for each tranche ofClass B Card series notes, a reduction in the requiredsubordinated amount of subordinated notes for thattranche of Class B notes may occur due to moreClass B Card series notes being outstanding than isrequired for the Class A Card series notes.

Class C Required Subordinated Amount. Generally,Class C Card series notes will share the same creditenhancement provided to the Class A notes and theClass B notes by the Class D Card series notes.Therefore, the required subordinated amount of ClassD notes for a tranche of Class C Card series noteswill generally be that Class C tranche’s pro ratashare of the aggregate required subordinated amountof Class D notes for all Class A Card series notesplus that Class C tranche’s pro rata share of therequired subordinated amount of Class D notes for allClass B Card series notes which do not provide creditenhancement for the Class A notes.

In addition, if the adjusted outstanding dollarprincipal amount of the Class C Card series notes isgreater than the total required subordinated amountof Class C notes for all Class A notes and for allClass B notes which do not provide creditenhancement for the Class A Card series notes, therequired subordinated amount of Class D notes foreach tranche of Class C Card series notes will includethat Class C tranche’s pro rata share of that excess,times a stated percentage.

For example, prior to the issuance of any Class Anotes or Class B notes in the Card series, the Class Crequired subordinated amount of Class D notes willbe based entirely on the calculation described in thepreceding paragraph. Once any tranche of Class Anotes or Class B notes of the Card series is issued, theClass C required subordinated amount of Class Dnotes will be based on the calculations described ineach of the preceding two paragraphs. However,reductions in the adjusted outstanding dollar principalamount of a tranche of Class A notes or Class B

notes in the Card series will generally result in areduction in the required subordinated amount forthat tranche of Class A notes or Class B notes.Consequently, for each tranche of Class C Cardseries notes, a reduction in the required subordinatedamount of Class D notes for that tranche of Class Cnotes may occur due to more Class C Card seriesnotes being outstanding than is required assubordination for the Class A notes or the Class Bnotes of the Card series.

At any time, COMET may change the requiredsubordinated amount and related stated percentagesfor any tranche of Card series notes or utilize formsof credit enhancement other than subordinated Cardseries notes upon (i) confirmation from each ratingagency listed under “—Ratings” below that has ratedany outstanding Card series notes that the change inthe required subordinated amount or the form ofcredit enhancement will not cause a reduction,qualification or withdrawal of the ratings of therelated tranche or any outstanding tranche of Cardseries notes, and (ii) delivery by COMET to therating agencies and the indenture trustee of anopinion that the change in the required subordinatedamount or the additional form of credit enhancementwill not have certain adverse tax consequences forholders of outstanding notes. Any such change or usewill be implemented without the consent of or noticeto any noteholders. Despite the conditions describedabove, to the extent that the required subordinatedamount of your notes is reduced, you may experiencelosses due to reductions in the nominal liquidationamount of your notes earlier than would haveoccurred had the required subordinated amount foryour notes remained at a higher level. Any reductionin the nominal liquidation amount of your notes maydelay or reduce interest and principal payments onyour notes. See “Deposit and Application of Fundsfor Card Series Notes—Allocations of Reductions ofNominal Liquidation Amounts from Charge-Offs”and “—Allocations of Reductions of NominalLiquidation Amounts from Reallocations” in theaccompanying prospectus for a description of theallocation of reductions in nominal liquidationamounts.

See “—Required Subordinated Amounts” below and“The Notes—Required Subordinated Amount andUsage” in the accompanying prospectus.

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Security for the Notes

The Class A(2006-8) notes share a security interestwith other notes in:

• the COMT collateral certificate;

• the collection account;

• the applicable principal funding subaccount;

• the applicable interest funding subaccount;and

• the applicable accumulation reservesubaccount.

However, the Class A(2006-8) notes are entitled tothe benefits of only that portion of those assetsallocated to them under the indenture, the asset poolsupplement, the Card series indenture supplementand the related terms document.

See “Sources of Funds to Pay the Notes—General,”“—The COMT Collateral Certificate” and“—COMET Trust Accounts” in the accompanyingprospectus.

Accumulation Reserve Account

COMET will establish an accumulation reservesubaccount to cover shortfalls in investment earningson amounts (other than prefunded amounts) ondeposit in the principal funding subaccount for theseClass A(2006-8) notes.

The amount targeted to be deposited in theaccumulation reserve subaccount for theseClass A(2006-8) notes is zero. However, if more thanone budgeted deposit is required to accumulate andpay the principal of the Class A(2006-8) notes on itsexpected principal payment date, in which case, theamount targeted to be deposited is 0.5% of theoutstanding dollar principal amount of theClass A(2006-8) notes, or any other amountdesignated by COMET. See “Deposit andApplication of Funds for Card Series Notes—Targeted Deposits to the Accumulation ReserveAccount” in the accompanying prospectus.

Limited Recourse to COMET

The sole sources of payment for principal of orinterest on these Class A(2006-8) notes are providedby:

• the portion of the principal amounts andfinance charge amounts allocated to the Cardseries and available to these Class A(2006-8)notes after giving effect to any reallocations,payments and deposits for senior notes; and

• funds in the applicable COMET trustaccounts for these Class A(2006-8) notes.

Class A(2006-8) noteholders will have no recourse toany other assets of COMET—other than any sharedexcess finance charge amounts and shared excessprincipal amounts—or recourse to any other personor entity for the payment of principal of or interest onthese Class A(2006-8) notes.

However, if there is a sale of assets in the master trustor COMET (i) if required under the poolingagreement following the bankruptcy or insolvency ofCapital One Funding or any other transferor,(ii) following an event of default and acceleration forthe Class A(2006-8) notes or (iii) on the legalmaturity date of the Class A(2006-8) notes, asdescribed in “Deposit and Application of Funds forCard Series Notes—Sale of Assets” and “Sources ofFunds to Pay the Notes—Sale of Assets” in theaccompanying prospectus, the Class A(2006-8)noteholders have recourse only to (1) the proceeds ofthat sale allocable to the Class A(2006-8) noteholdersand (2) any amounts then on deposit in COMET trustaccounts allocated to and held for the benefit of theClass A(2006-8) noteholders.

Stock Exchange Listing

COMET will apply to list these Class A(2006-8)notes on a stock exchange in Europe. The issuercannot guarantee that the application for the listingwill be accepted or that, if accepted, such listing willbe maintained. To determine whether theseClass A(2006-8) notes are listed on a stock exchange,you may contact the issuer at c/o Deutsche BankTrust Company Delaware, E.A. Delle DonneCorporate Center, Montgomery Building, 1011Centre Road, Wilmington, Delaware 19805-1266;the telephone number is (201) 593-6792.

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Ratings

COMET will issue these Class A(2006-8) notes onlyif they are rated by at least one of the followingnationally recognized rating agencies as follows:

Standard & Poor’s Ratings Services: AAAMoody’s Investors Service, Inc.: AaaFitch, Inc.: AAA

Other tranches of Class A notes may have differentrating requirements from these Class A(2006-8)notes.

A rating addresses the likelihood of the payment ofinterest on a note when due and the ultimate paymentof principal of that note by its legal maturity date. Arating does not address the likelihood of payment ofprincipal of a note on its expected principal paymentdate. In addition, a rating does not address thepossibility of an early payment or acceleration of anote, which could be caused by an early redemptionevent or an event of default. A rating is not arecommendation to buy, sell or hold notes and maybe subject to revision or withdrawal at any time bythe assigning rating agency. A rating is based on eachrating agency’s independent evaluation of thereceivables and the availability of any creditenhancement for the notes. A rating, or a change orwithdrawal of a rating, by one rating agency will notnecessarily correspond to a rating, or a change or awithdrawal of a rating, from any other rating agency.If any of the ratings of these Class A(2006-8) noteschanges, Class A(2006-8) noteholders will not be sonotified by Capital One Bank, Capital One Fundingor COMET.

See “Risk Factors—The market value of the notescould decrease if the ratings of the notes are loweredor withdrawn” in the accompanying prospectus.

Federal Income Tax Consequences

Subject to important considerations described under“Federal Income Tax Consequences” in theaccompanying prospectus, Orrick, Herrington &Sutcliffe LLP, as special tax counsel to COMET,is of the opinion that under existing law yourClass A(2006-8) notes will be characterized as debtfor federal income tax purposes, and that COMETwill not be classified as an association or publiclytraded partnership taxable as a corporation andaccordingly will not be subject to federal income tax.By your acceptance of a Class A(2006-8) note, youwill agree to treat your Class A(2006-8) note as debtfor federal, state and local income and franchise taxpurposes. See “Federal Income Tax Consequences”in the accompanying prospectus for additionalinformation concerning the application of federalincome tax laws.

ERISA Considerations

Subject to important considerations described under“Benefit Plan Investors” in the accompanyingprospectus, the Class A(2006-8) notes are eligible forpurchase by persons investing assets of employeebenefit plans or individual retirement accounts. Bypurchasing the notes, each investor purchasing onbehalf of employee benefit plans or individualretirement accounts will be deemed to certify that thepurchase and subsequent holding of the notes by theinvestor would be exempt from the prohibitedtransaction rules of ERISA and/or Section 4975 ofthe Internal Revenue Code. A fiduciary or otherperson contemplating purchasing a Class A(2006-8)note on behalf of someone with “plan assets” of anyplan or account should consult with its counselregarding whether the purchase or holding of theseClass A(2006-8) note could give rise to a transactionprohibited or not otherwise permissible under ERISAand/or Section 4975 of the Internal Revenue Code.For further information regarding the application ofERISA, see “Benefit Plan Investors” in theaccompanying prospectus.

S-7

Required Subordinated Amounts

The chart and the accompanying text below provide an illustrative example of the concept of requiredsubordinated amounts. The stated percentages used in this example are applicable to the current calculation forrequired subordinated amounts for these notes. The dollar amounts used in this example are illustrative only andare not intended to represent any allocation of tranches of Card series notes outstanding at any time. COMETmay change the required subordinated amount and related stated percentages for any tranche of Card series notes,the methodology of computing the required subordinated amount, or utilize forms of credit enhancement otherthan subordinated Card series notes at any time without the consent of any noteholders. However, each ratingagency must confirm that the change will not cause a reduction, qualification or withdrawal of the ratings of therelated tranche of notes or any outstanding tranche of Card series notes. If such a change is made, noteholderswill not be provided any notice of the change. See “—Required Subordinated Amount and Conditions toIssuance” above and “The Notes—Required Subordinated Amount and Usage” in the accompanying prospectus.

Generally, the required subordinated amount (“RSA”) of a subordinated class of notes for any date is an amount equal to a stated percentageof the adjusted outstanding dollar principal amount of the senior tranche of notes for that date.

1 The Class A RSA of Class B notes is 10.8434% of $100 MM Class A notes, the Class A RSA of Class C notes is 8.4338% of $100 MMClass A notes, and the Class A RSA of Class D notes is 1.2049% of $100 MM Class A notes. Therefore, the aggregate Class A RSA ofClass B notes, Class C notes and Class D notes for the $100 MM of Class A notes is $20,482,100 ($10,843,400 + $8,433,800 +$1,204,900).

2 The amount of encumbered Class B notes is equal to the Class A RSA of Class B notes. The RSA for those encumbered Class B notes isequal to the sum of the Class A RSA of Class C notes and the Class A RSA of Class D notes.

S-8

3 The amount of unencumbered Class B notes is equal to $9,156,600, which is the total amount of Class B notes ($20 MM) minus theencumbered Class B notes ($10,843,400). The Class B RSA of Class C notes for those unencumbered Class B notes only is equal to$696,698, which is 7.6087% of $9,156,600. The Class B RSA of Class D notes for those unencumbered Class B notes only is equal to$99,532, which is 1.0870% of $9,156,600.

4 The amount of encumbered Class C notes is equal to the sum of the Class A RSA of Class C notes and the Class B RSA of Class C notes(for unencumbered Class B notes only). The amount of unencumbered Class C notes is equal to $869,502, which is the total amount ofClass C notes ($10 MM) minus the encumbered Class C notes ($9,130,498). The Class C RSA of Class D notes for those unencumberedClass C notes only is equal to $8,784, which is 1.0102% of $869,502.

5 The amount of encumbered Class D notes is equal to the sum of the Class A RSA of Class D notes, the Class B RSA of Class D notes(for unencumbered Class B notes only) and the Class C RSA of Class D notes (for unencumbered Class C notes only) ($1,313,216).

S-9

Underwriting

Subject to the terms and conditions of the underwriting agreement for these Class A(2006-8) notes, COMEThas agreed to sell to each of the underwriters named below, and each of those underwriters has severally agreedto purchase, the principal amount of these Class A(2006-8) notes set forth opposite its name:

Underwriters Principal Amount

Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000,000Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000,000Merrill Lynch, Pierce, Fenner & Smith

Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $300,000,000

The several underwriters have agreed, subject to the terms and conditions of the underwriting agreement,to purchase all $300,000,000 aggregate principal amount of these Class A(2006-8) notes if any of theseClass A(2006-8) notes are purchased.

The underwriters have advised COMET that the several underwriters propose initially to offer theseClass A(2006-8) notes to the public at the public offering price determined by the several underwriters and setforth on the cover page of this prospectus supplement, and to certain dealers at that public offering price less aconcession not in excess of 0.12% of the principal amount of these Class A(2006-8) notes. The underwriters mayallow, and those dealers may reallow to other dealers, a concession not in excess of 0.06% of the principalamount.

After the public offering, the public offering price and other selling terms may be changed by theunderwriters.

In the ordinary course of business, one or more of the underwriters or their affiliates have engaged, and mayengage in the future, in certain investment banking or commercial banking transactions with the bank, thesavings bank, the transferor and their affiliates.

Each underwriter of these Class A(2006-8) notes has agreed that:

• it has complied and will comply with all applicable provisions of the Financial Services and MarketsAct 2000 (the “FSMA”) with respect to anything done by it in relation to the Class A(2006-8) notesin, from or otherwise involving the United Kingdom; and

• it has only and will only communicate or cause to be communicated an invitation or inducement toengage in investment activity (within the meaning of Section 21 of the FSMA) received by it inconnection with the issue or sale of any Class A(2006-8) notes in circumstances in whichSection 21(1) of the FSMA does not apply to COMET.

In connection with the sale of these Class A(2006-8) notes, the underwriters may engage in:

• over-allotments, in which members of the syndicate selling these Class A(2006-8) notes sell morenotes than COMET actually sold to the syndicate, creating a syndicate short position;

• stabilizing transactions, in which purchases and sales of these Class A(2006-8) notes may be madeby the members of the selling syndicate at prices that do not exceed a specified maximum;

• syndicate covering transactions, in which members of the selling syndicate purchase theseClass A(2006-8) notes in the open market after the distribution has been completed in order tocover syndicate short positions; and

S-10

• penalty bids, by which underwriters reclaim a selling concession from a syndicate member whenany of these Class A(2006-8) notes originally sold by that syndicate member are purchased in asyndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of theseClass A(2006-8) notes to be higher than it would otherwise be. These transactions, if commenced, may bediscontinued at any time.

COMET, the banks and the transferor, jointly and severally, will indemnify the underwriters against certainliabilities, including liabilities under applicable securities laws, or contribute to payments the underwriters maybe required to make in respect of those liabilities. COMET’s obligation to indemnify the underwriters will belimited to Finance Charge Amounts from the COMT collateral certificate received by COMET after making allrequired payments and required deposits under the indenture and any supplement thereto.

COMET will receive proceeds of approximately $299,400,000 from the sale of these Class A(2006-8) notes.This amount represents 99.80% of the principal amount of those notes. COMET will receive this amount net ofthe underwriting discount of $600,000. The underwriting discount represents 0.20% of the principal amount ofthose notes. Proceeds received by COMET will be paid to the transferor. See “Use of Proceeds” in theaccompanying prospectus. Additional offering expenses are estimated to be $600,000.

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Annex I

The information provided in this Annex I is an integral part of the prospectus supplement.

The Capital One Credit Card Portfolio

The Capital One credit card portfolio (referred to in this prospectus supplement and the accompanyingprospectus as the “Bank Portfolio”) is primarily comprised of VISA and MasterCard accounts originated byCapital One Bank and its predecessor. The Master Trust Portfolio is currently comprised of accounts that havebeen selected from the Bank Portfolio.

Capital One, F.S.B. also originates accounts that may be included in the Master Trust Portfolio. See “TheTransferor, The Depositor and The Receivables Purchase Agreements” in the accompanying prospectus.However, as of the date of this prospectus supplement, no accounts originated by Capital One, F.S.B. have beenselected for designation to the Master Trust Portfolio.

At March 31, 2006 and as of the years ended December 31, 2005, December 31, 2004 and December 31,2003, U.S. card loans originated by Capital One Bank and Capital One, F.S.B. and their predecessors consisted ofreceivables totaling approximately $47.143 billion, $49.464 billion, $48.610 billion and $46.279 billion,respectively.

As of the years ended December 31, 2005, December 31, 2004 and December 31, 2003, the aggregateinvested amount of the outstanding series of certificates issued by the master trust totaled approximately $32.289billion, $31.041 billion and $27.751 billion, respectively.

The Originators

Capital One Bank, a Virginia banking corporation, is a subsidiary of Capital One Financial Corporation. AtMarch 31, 2006, Capital One Bank had assets of approximately $29.0 billion and stockholders’ equity ofapproximately $3.5 billion.

Capital One, F.S.B. is a federal savings bank and a subsidiary of Capital One Financial Corporation. AtMarch 31, 2006, Capital One, F.S.B. had assets of approximately $15.9 billion and stockholders’ equity ofapproximately $2.4 billion.

For a more detailed description of Capital One Bank and Capital One, F.S.B., see “The Banks” in theaccompanying prospectus.

The Master Trust Portfolio

General

The receivables conveyed to the master trust arise in accounts selected from the Bank Portfolio based on theeligibility criteria specified in the pooling agreement as applied on the Master Trust Cut-Off Date and subsequentadditional cut-off dates. See “The Master Trust—Master Trust Assets,” “—Conveyance of Receivables” and“—Representations and Warranties” in the accompanying prospectus. Subject to those eligibility requirementsand applicable regulatory guidelines, the decision regarding the method of selection of accounts to be designatedfor addition to the master trust portfolio resides at the discretion of the transferor. See “The Master Trust—Addition of Master Trust Assets” in the accompanying prospectus.

A-I-1

Delinquency and Loss Experience

Because new accounts usually initially exhibit lower delinquency rates and credit losses, the growth of theMaster Trust Portfolio from approximately $24.554 billion at year end 2001, to approximately $37.361 billion atMarch 31, 2006, has had the effect of significantly lowering the charge-off and delinquency rates for the entireportfolio from what they otherwise would have been. However, as the proportion of new accounts to seasonedaccounts becomes smaller, this effect should be lessened. As seasoning occurs or if new account originationslows, the originator expects that the charge-off rates and delinquencies will increase over time. The delinquencyand net loss rates at any time reflect, among other factors, the quality of the credit card loans, the averageseasoning of the accounts, the success of the originator’s collection efforts, the product mix of the Master TrustPortfolio and general economic conditions.

Gross losses represent the arithmetic sum of all receivables in the Master Trust Portfolio that werecharged-off during the period indicated in the charts below. See “The Master Trust—Defaulted Receivables;Rebates and Fraudulent Charges; Recoveries” in the accompanying prospectus. Recoveries are collectionsreceived in respect of charged-off accounts in the Master Trust Portfolio during the period indicated in the chartsbelow. Recoveries are treated as Finance Charge Collections for the Master Trust Portfolio. See “The MasterTrust—The Receivables” in the accompanying prospectus. Net losses are an amount equal to gross losses minusrecoveries, each for the applicable period.

The following tables set forth the delinquency and loss experience for the Master Trust Portfolio for each ofthe periods shown. There can be no assurance that the delinquency and loss experience for the receivables in thefuture will be similar to the historical experience set forth below for the Master Trust Portfolio.

Delinquencies as a Percentage of the Master Trust Portfolio(1)(2)(Dollars in Thousands)

At March 31, 2006

At Year End

2005 2004

ReceivablesPercentage of

Total Receivables ReceivablesPercentage of

Total Receivables ReceivablesPercentage of

Total Receivables

Receivables Outstanding . . . $37,360,550 100.00% $38,465,692 100.00% $36,957,333 100.00%Receivables Delinquent:30 - 59 days . . . . . . . . . . . . . . $ 387,338 1.04% $ 442,033 1.15% $ 500,336 1.35%60 - 89 days . . . . . . . . . . . . . . 263,701 0.71 294,002 0.76 338,986 0.9290 - 119 days . . . . . . . . . . . . . 231,603 0.62 254,865 0.66 300,917 0.82120 - 149 days . . . . . . . . . . . . 195,410 0.52 217,762 0.57 251,138 0.68150+ days . . . . . . . . . . . . . . . 184,080 0.49 195,650 0.51 226,897 0.61

TOTAL . . . . . . . . . . . . . $ 1,262,132 3.38% $ 1,404,312 3.65% $ 1,618,274 4.38%

At Year End

2003 2002 2001

ReceivablesPercentage of

Total Receivables ReceivablesPercentage of

Total Receivables ReceivablesPercentage of

Total Receivables

Receivables Outstanding . . . $33,875,607 100.00% $29,262,005 100.00% $24,554,226 100.00%Receivables Delinquent:30 - 59 days . . . . . . . . . . . . . . $ 513,831 1.51% $ 502,655 1.72% $ 431,027 1.75%60 - 89 days . . . . . . . . . . . . . . 348,024 1.03 346,070 1.18 274,484 1.1290 - 119 days . . . . . . . . . . . . . 303,714 0.90 292,704 1.00 220,259 0.90120 - 149 days . . . . . . . . . . . . 262,232 0.77 257,752 0.88 186,092 0.76150+ days . . . . . . . . . . . . . . . 240,466 0.71 238,968 0.82 171,576 0.70

TOTAL . . . . . . . . . . . . . $ 1,668,267 4.92% $ 1,638,149 5.60% $ 1,283,438 5.23%

(1) The percentages are the result of dividing the delinquent amount by the end of period receivables outstanding for the applicable period.The delinquent amount is the dollar amount of end of period delinquencies for the period.

(2) Figures and percentages in this table are reported on a processing month basis.

A-I-2

Delinquencies by Accounts as aPercentage of the

Master Trust Portfolio (1)(2)

At March 31, 2006

At Year End

2005 2004

Accounts

Percentageof Total

Accounts Accounts

Percentageof Total

Accounts Accounts

Percentageof Total

Accounts

Total Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,897,333 100.00% 26,105,623 100.00% 25,578,611 100.00%Accounts Delinquent:

30 - 59 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,073 1.16% 387,171 1.48% 458,519 1.79%60 - 89 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186,565 0.72 236,236 0.91 285,800 1.1290 - 119 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163,339 0.63 200,007 0.77 241,352 0.94120 - 149 days . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,259 0.52 168,351 0.64 193,313 0.76150+ days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,216 0.48 149,719 0.57 173,672 0.68

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 909,452 3.51% 1,141,484 4.37% 1,352,656 5.29%

At Year End

2003 2002 2001

Accounts

Percentageof Total

Accounts Accounts

Percentageof Total

Accounts Accounts

Percentageof Total

Accounts

Total Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,512,508 100.00% 22,138,065 100.00% 22,036,683 100.00%Accounts Delinquent:

30 - 59 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447,736 1.90% 449,942 2.03% 496,846 2.26%60 - 89 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267,719 1.14 289,860 1.31 295,505 1.3490 - 119 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,007 0.92 234,808 1.06 225,339 1.02120 - 149 days . . . . . . . . . . . . . . . . . . . . . . . . . . . 176,537 0.75 203,426 0.92 187,173 0.85150+ days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159,296 0.68 185,713 0.84 168,559 0.76

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,266,295 5.39% 1,363,749 6.16% 1,373,422 6.23%

(1) The percentages are the result of dividing the number of delinquent accounts by the end of period accounts for the applicable period.(2) Figures and percentages in this table are reported on a processing month basis.

Loss Experience for the Master Trust Portfolio(Dollars in Thousands)

Three MonthsEnded Year Ended

March 31, 2006 2005 2004 2003 2002 2001

Average Principal ReceivablesOutstanding . . . . . . . . . . . . . . . . . . . . $37,539,888 $36,333,164 $34,333,419 $29,213,922 $25,210,883 $18,682,664

Average Accounts . . . . . . . . . . . . . . . . . 26,082,682 26,301,008 24,649,889 22,224,499 22,477,448 18,256,205Gross Losses . . . . . . . . . . . . . . . . . . . . . . $ 434,847 $ 2,330,842 $ 2,126,329 $ 2,022,487 $ 1,545,916 $ 1,013,156Gross Losses as a Percentage of

Average Principal ReceivablesOutstanding (1) . . . . . . . . . . . . . . . . . . 4.63% 6.42% 6.19% 6.92% 6.13% 5.42%

Recoveries . . . . . . . . . . . . . . . . . . . . . . . $ 226,899 $ 723,573 $ 657,652 $ 543,141 $ 412,269 $ 268,608Net Losses . . . . . . . . . . . . . . . . . . . . . . . $ 207,948 $ 1,607,269 $ 1,468,676 $ 1,479,346 $ 1,133,646 $ 744,548Net Losses as a Percentage of Average

Principal Receivables Outstanding . . 2.22% 4.42% 4.28% 5.06% 4.50% 3.99%Accounts Experiencing a Loss . . . . . . . . 454,411 2,236,212 2,088,008 2,130,664 2,161,561 1,732,572Accounts Experiencing a Loss as a

Percentage of Average AccountsOutstanding . . . . . . . . . . . . . . . . . . . . 6.97% 8.50% 8.47% 9.59% 9.62% 9.49%

Average Net Loss of Accounts with aLoss . . . . . . . . . . . . . . . . . . . . . . . . . . $ 458 $ 719 $ 703 $ 694 $ 524 $ 430

(1) The percentages reflected for the three months ended March 31, 2006 are annualized figures. Annualized figures are not necessarilyindicative of actual results for the entire year.

A-I-3

See “The Banks—The Bank’s Credit Card and Lending Business—Billing and Payments” in theaccompanying prospectus for a discussion of the assessment of finance charges, annual membership fees andother charges.

Revenue Experience

The following table sets forth the revenues from finance charges and fees billed and interchange receivedwith respect to the Master Trust Portfolio for the periods shown.

Revenue Experience for the Master Trust Portfolio (1)(Dollars in Thousands)

Three MonthsEnded Year Ended

March 31, 2006 2005 2004 2003 2002 2001

Average PrincipalReceivables Outstanding . $37,539,888 $36,333,164 $34,333,419 $29,213,922 $25,210,883 $18,682,664

Finance Charges and Fees(2) $ 1,562,210 $ 6,013,533 $ 5,612,785 $ 4,892,493 $ 4,828,868 $ 4,276,975Yield from Finance Charges

and Fees (3) . . . . . . . . . . . . 16.65% 16.55% 16.35% 16.75% 19.15% 22.89%Interchange . . . . . . . . . . . . . . $ 270,689 $ 1,064,342 $ 868,744 $ 730,395 $ 595,702 $ 398,721Yield from Interchange(3) . . 2.88% 2.93% 2.53% 2.50% 2.36% 2.13%

(1) The percentages are calculated by dividing the amount of prior month billed finance charges and fees, and interchange by the averageprincipal receivables outstanding for the applicable period.

(2) Finance Charges and Fees do not include interest on subsequent collections on accounts previously charged off. Finance Charges andFees include monthly periodic rate finance charges, the portion of the annual membership fees amortized on a monthly basis, cashadvance fees, late charges, overlimit fees and other miscellaneous fees.

(3) The percentages reflected for the three months ended March 31, 2006 are annualized figures. Annualized figures are not necessarilyindicative of actual results for the entire year.

There can be no assurance that the yield experience for the receivables in the future will be similar to thehistorical experience set forth above for the Master Trust Portfolio. In addition, revenue from the receivables willdepend on the types of fees and charges assessed on the accounts, and could be adversely affected by futurechanges made by the bank or the servicer in those fees and charges or by other factors. See “Risk Factors” in theaccompanying prospectus.

The revenue from finance charges and fees for the accounts in the Master Trust Portfolio shown in theabove table is comprised of three primary components: periodic rate finance charges, the amortized portion ofannual membership fees and other charges, such as cash advance fees, late charges, overlimit fees and othermiscellaneous fees. See “The Banks—The Bank’s Credit Card and Lending Business—Billing and Payments” inthe accompanying prospectus for a discussion of the assessment of finance charges, annual membership fees andother charges. If payment rates decline, the balances subject to monthly periodic rate finance charges tend togrow, assuming no change in the level of purchasing activity. Accordingly, under these circumstances, the yieldrelated to monthly periodic rate finance charges normally increases. Conversely, if payment rates increase, thebalances subject to monthly periodic rate finance charges tend to fall, assuming no change in the level ofpurchasing activity. Accordingly, under these circumstances, the yield related to monthly periodic rate financecharges normally decreases.

The Master Trust Portfolio may experience growth in receivables through the originator’s origination ofaccounts having an introductory period during which a relatively low annual percentage rate is charged. As theintroductory period on these accounts expire, the originator may choose to waive all or part of the annualpercentage rate increase for such accounts. Under these circumstances, the yield related to monthly periodic ratefinance charges would be adversely affected. The impact of service charges on the Master Trust Portfolio’s yieldvaries with the type and volume of activity in and the amount of each account, as well as with the number ofdelinquent accounts. As aggregate account balances increase, annual membership fees, which remain constant,represent a smaller percentage of the aggregate account balances.

A-I-4

Payment Rates

The following table sets forth the highest and lowest accountholder monthly payment rates for the MasterTrust Portfolio during any single month in the periods shown and the average accountholder monthly paymentrates for all months during the periods shown, in each case calculated as a percentage of average monthly accountbalances during the periods shown. Payment rates shown in the table are based on amounts which would bepayments of principal receivables on the accounts.

Accountholder Monthly Payment Ratesfor the Master Trust Portfolio(1)

Three MonthsEnded Year Ended

March 31, 2006 2005 2004 2003 2002 2001

Lowest Month(2) . . . . . . . . . . . . . . . . . . . . 15.66% 14.23% 13.93% 13.99% 13.98% 12.87%Highest Month(2) . . . . . . . . . . . . . . . . . . . 18.25% 16.92% 16.10% 16.62% 15.38% 15.13%Average Payment Rate for the Period . . . . 16.75% 15.89% 14.82% 15.55% 14.77% 14.02%

(1) The monthly payment rates include amounts which are payments of principal receivables with respect to theaccounts.

(2) The monthly principal payment rate for any month is calculated as the total amount of principal paymentsreceived during such month divided by the sum of (i) the amount of principal receivables outstanding as ofthe beginning of such month and (ii) with respect to accounts added to the Master Trust Portfolio duringsuch month, the amount of principal receivables outstanding in such accounts as of the related addition date.For each period presented, the principal payment rate is calculated as the average of the monthly principalpayment rates during such period.

The Receivables

As of May 26, 2006:

• the Master Trust Portfolio included $39,190,767,953 of principal receivables and $671,981,845 of financecharge receivables;

• the accounts had an average principal receivable balance of $1,426 and an average credit limit of $5,200;

• the percentage of the aggregate total receivable balance to the aggregate total credit limit was 27.89%;

• the average age of the accounts was approximately 47 months; and

• approximately 46.05% of the accounts in the Master Trust Portfolio were assessed a variable rate periodicfinance charge and approximately 53.95% were assessed a fixed rate periodic finance charge.

As of the month ended May 31, 2006:

• 8.27% of the accounts in the Master Trust Portfolio made minimum payments as of their respective lateststatement date, in each case based on the prior month statement minimum payment; and

• 13.80% of the accounts in the Master Trust Portfolio made full payments as of their respective lateststatement date, in each case based on the prior month statement outstanding balance.

The following five tables summarize the Master Trust Portfolio by various criteria as of May 26, 2006.References to “Receivables Outstanding” in the following tables include both finance charge receivables andprincipal receivables. Because the future composition of the Master Trust Portfolio may change over time, thesetables are not necessarily indicative of the composition of the Master Trust Portfolio at any specific time in thefuture.

A-I-5

Composition by Account BalanceMaster Trust Portfolio

Account Balance RangeNumber ofAccounts

% of Total Numberof Accounts

ReceivablesOutstanding

% of TotalReceivables

Credit Balance(1) . . . . . . . . . . . . . . . . . . . . . . . . 467,106 1.70% $ (37,743,853) (0.10)%No Balance(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,475,734 23.56 0 0.00More than $0 and less than or equal to $1,500.00 13,651,419 49.67 6,739,676,054 16.91$1,500.01-$5,000.00 . . . . . . . . . . . . . . . . . . . . . . 4,742,719 17.25 13,340,573,569 33.47$5,000.01-$10,000.00 . . . . . . . . . . . . . . . . . . . . . 1,505,817 5.48 10,477,271,037 26.28Over $10,000.00 . . . . . . . . . . . . . . . . . . . . . . . . . 643,555 2.34 9,342,972,991 23.44

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,486,350 100.00% $39,862,749,798 100.00%

(1) Credit balances are a result of cardholder payments and credit adjustments applied in excess of the unpaidbalance on an account. Accounts which currently have a credit balance are included because receivablesmay be generated with respect to those accounts in the future.

(2) Accounts which currently have no balance are included because receivables may be generated with respectto those accounts in the future. Zero balance accounts described in “The Master Trust—The Receivables” inthe accompanying prospectus are not included in these figures.

Composition by Credit Limit(1)Master Trust Portfolio

Credit Limit RangeNumber ofAccounts

% of Total Numberof Accounts

ReceivablesOutstanding

% of TotalReceivables

Less than or equal to $1,500.00 . . . . . . . . . . . . . . 12,325,734 44.84% $ 4,425,653,620 11.10%$1,500.01-$5,000.00 . . . . . . . . . . . . . . . . . . . . . . 6,678,885 24.30 9,194,366,360 23.06$5,000.01-$10,000.00 . . . . . . . . . . . . . . . . . . . . . 3,848,783 14.00 7,974,993,776 20.01Over $10,000.00 . . . . . . . . . . . . . . . . . . . . . . . . . 4,632,948 16.86 18,267,736,042 45.83

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,486,350 100.00% $39,862,749,798 100.00%

(1) References to “Credit Limit” herein include both the line of credit established for purchases, cash advancesand balance transfers as well as receivables originated under temporary extensions of credit through accountmanagement programs. Credit limits relating to these temporary extensions decrease as cardholderpayments are applied to the accounts.

Composition by Payment StatusMaster Trust Portfolio

Payment StatusNumber ofAccounts

% of Total Numberof Accounts

ReceivablesOutstanding

% of TotalReceivables

Current to 29 days (1) . . . . . . . . . . . . . . . . . . . . . 26,454,259 96.24% $38,486,727,080 96.55%Past due 30 – 59 days . . . . . . . . . . . . . . . . . . . . . 387,687 1.41 457,257,330 1.15Past due 60 – 89 days . . . . . . . . . . . . . . . . . . . . . 219,388 0.80 286,232,212 0.72Past due 90 – 119 days . . . . . . . . . . . . . . . . . . . . 155,725 0.57 229,946,022 0.58Past due 120 – 149 days . . . . . . . . . . . . . . . . . . . 136,300 0.50 205,280,428 0.51Past due 150 + days . . . . . . . . . . . . . . . . . . . . . . . 132,991 0.48 197,306,726 0.49

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,486,350 100.00% $39,862,749,798 100.00%

(1) Accounts designated as current include accounts on which the minimum payment has not been receivedprior to the second billing date following the issuance of the related bill.

A-I-6

Composition by Account AgeMaster Trust Portfolio

Account AgeNumber ofAccounts

% of Total Numberof Accounts

ReceivablesOutstanding

% of TotalReceivables

Not More than 6 Months . . . . . . . . . . . . . . . . . . . 980,375 3.57% $ 1,882,022,987 4.72%Over 6 Months to 12 Months . . . . . . . . . . . . . . . 2,270,088 8.26 3,039,371,004 7.62Over 12 Months to 24 Months . . . . . . . . . . . . . . 4,705,356 17.12 5,796,556,548 14.54Over 24 Months to 36 Months . . . . . . . . . . . . . . 4,692,803 17.07 7,061,777,793 17.72Over 36 Months to 48 Months . . . . . . . . . . . . . . 2,777,690 10.10 3,719,779,792 9.33Over 48 Months to 60 Months . . . . . . . . . . . . . . 3,867,381 14.07 6,270,101,937 15.73Over 60 Months . . . . . . . . . . . . . . . . . . . . . . . . . . 8,192,657 29.81 12,093,139,737 30.34

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,486,350 100.00% $39,862,749,798 100.00%

Composition by Accountholder Billing AddressMaster Trust Portfolio

State or TerritoryNumber ofAccounts

% of Total Numberof Accounts

ReceivablesOutstanding

% of TotalReceivables

California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,388,461 12.33% $ 4,504,597,603 11.30%Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,912,980 6.96 2,408,353,841 6.04Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,905,803 6.93 2,624,764,653 6.59New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,808,742 6.58 2,510,347,540 6.30Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,184,945 4.31 1,783,010,438 4.47Pennsylvania . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,158,450 4.22 1,756,294,527 4.41Ohio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,078,246 3.92 1,730,627,451 4.34New Jersey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 939,568 3.42 1,363,141,185 3.42Michigan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 884,572 3.22 1,464,137,459 3.67Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 783,999 2.85 1,180,285,686 2.96Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,440,584 45.26 18,537,189,415 46.50

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,486,350 100.00% $39,862,749,798 100.00%

(1) No other state individually accounts for more than 2.85% of the Percentage of Total Number of Accounts.

Since the largest number of accountholders (based on billing addresses) whose accounts were included inthe master trust as of May 26, 2006 were in California, Florida, Texas and New York, adverse economicconditions affecting accountholders residing in these areas could affect timely payment by the relatedaccountholders of amounts due on the accounts and, accordingly, the actual rates of delinquencies and losseswith respect to the Master Trust Portfolio. See “Risk Factors” in the accompanying prospectus.

FICO®*. The following table summarizes the Master Trust Portfolio by FICO® score. A FICO® score is ameasurement determined by Fair, Isaac & Company using information collected by the major credit bureaus toassess credit risk. The bank obtains, to the extent available, FICO® scores at the origination of each account andeach month thereafter. In the following table, Receivables Outstanding are determined as of May 26, 2006, andFICO® scores are determined during the month of May 2006. References to “Receivables Outstanding” in thefollowing table include both finance charge receivables and principal receivables. Because the futurecomposition of the Master Trust Portfolio may change over time, this table is not necessarily indicative of thecomposition of the Master Trust Portfolio at any specific time in the future. FICO® scores may change over time,depending on the conduct of the accountholder and changes in credit score technology.

* FICO® is a federally registered servicemark of Fair, Isaac & Company.

A-I-7

Annex II

Outstanding Series, Classes and Tranches of Notes

The information provided in this Annex II is an integral part of the prospectus supplement.

The total Nominal Liquidation Amount and Outstanding Dollar Principal Amount for all outstanding classes and tranches of theCard series notes, including any expected issuances listed below, are $23,232,105,0001 and $23,232,105,0002, respectively.

Card series

Class AIssuance

DateNominal

Liquidation Amount

OutstandingDollar Principal

Amount Note Interest Rate

ExpectedPrincipal

Payment DateLegal

Maturity Date

Class A(2002-1) 10/9/02 $500,000,000 $500,000,000 One Month LIBOR + 0.27% September 2007 July 2010Class A(2003-A) 5/20/03 $400,000,000 $400,000,000 Not to exceed One Month LIBOR + 0.39% May 2008 March 2011Class A(2003-3) 8/13/03 $500,000,000 $500,000,000 One Month LIBOR + 0.25% July 2008 May 2011Class A(2003-4) 9/26/03 $750,000,000 $750,000,000 3.65% September 2008 July 2011Class A(2003-5) 10/10/03 $500,000,000 $500,000,000 One Month LIBOR + 0.29% September 2010 July 2013Class A(2003-6) 10/24/03 $500,000,000 $500,000,000 2.95% October 2006 August 2009Class A(2003-7) 11/21/03 $750,000,000 $750,000,000 One Month LIBOR + 0.18% November 2008 September 2011Class A(2004-1) 2/26/04 $500,000,000 $500,000,000 One Month LIBOR + 0.21% February 2014 December 2016Class A(2004-2) 4/8/04 $750,000,000 $750,000,000 One Month LIBOR + 0.09% March 2009 January 2012Class A(2004-3) 5/6/04 $500,000,000 $500,000,000 One Month LIBOR + 0.10% April 2009 February 2012Class A(2004-4) 6/10/043 $500,000,000 $500,000,000 One Month LIBOR + 0.22% May 2014 March 2017Class A(2004-5) 6/10/04 $200,000,000 $200,000,000 One Month LIBOR + 0.15% May 2011 March 2014Class A(2004-6) 7/14/04 $750,000,000 $750,000,000 Three Month LIBOR + 0.04% June 2007 April 2010Class A(2004-7) 9/9/04 $500,000,000 $500,000,000 Three Month LIBOR + 0.15% August 2011 June 2014Class A(2004-8) 11/10/04 $500,000,000 $500,000,000 One Month LIBOR + 0.13% October 2011 August 2014Class A(2004-NOVA) 11/16/04 Up to $3,000,000,0004 Up to $3,000,000,0004 — — —Class A(2005-1) 4/1/05 $750,000,000 $750,000,000 One Month LIBOR + 0.07% March 2012 January 2015Class A(2005-2) 5/6/05 $500,000,000 $500,000,000 4.05% April 2008 February 2011Class A(2005-3) 6/10/05 $500,000,000 $500,000,000 4.05% May 2010 March 2013Class A(2005-4) 6/13/05 $300,000,000 $300,000,000 One Month LIBOR + 0.00% September 2010 July 2013Class A(2005-5) 7/8/05 $500,000,000 $500,000,000 One Month LIBOR + 0.025% June 2009 April 2012Class A(2005-6) 7/28/05 $455,000,000 $455,000,000 Three Month LIBOR + 0.05% September 2012 July 2015Class A(2005-7) 8/18/05 $500,000,000 $500,000,000 4.70% August 2012 June 2015Class A(2005-8) 8/26/05 $500,000,000 $500,000,000 4.40% October 2008 August 2011Class A(2005-9) 10/19/05 $325,000,000 $325,000,000 One Month LIBOR + 0.09% October 2015 August 2018Class A(2005-10) 11/15/05 $500,000,000 $500,000,000 One Month LIBOR + 0.08% November 2012 September 2015Class A(2005-11) 11/23/05 $500,000,000 $500,000,000 One Month LIBOR + 0.04% November 2010 September 2013Class A(2006-1) 1/20/06 $500,000,000 $500,000,000 One Month LIBOR + 0.035% March 2013 January 2016Class A(2006-2) 2/3/06 $500,000,000 $500,000,000 4.85% January 2011 November 2013Class A(2006-3) 3/1/06 $400,000,000 $400,000,000 5.05% February 2016 December 2018Class A(2006-4) 3/8/06 $1,000,000,000 $1,000,000,000 One Month LIBOR + 0.04% February 2011 December 2013Class A(2006-5) 4/4/06 $500,000,000 $500,000,000 One Month LIBOR + 0.06% March 2013 January 2016Class A(2006-6) 4/25/06 $500,000,000 $500,000,000 5.30% April 2011 February 2014Class A(2006-7) 5/17/06 $1,000,000,000 $1,000,000,000 One Month LIBOR + 0.03% May 2011 March 2014

Total: $17,830,000,0001 $17,830,000,0002

1 This amount does not include up to $3,000,000,000 (subject to increase) Nominal Liquidation Amount of Class A(2004-NOVA)notes.

2 This amount does not include up to $3,000,000,000 (subject to increase) Outstanding Dollar Principal Amount ofClass A(2004-NOVA) notes.

3 Of the $500,000,000 principal amount of the Class A(2004-4) notes, $400,000,000 was issued on 6/10/04 and $100,000,000 wasissued on 11/23/04.

4 Subject to increase.

A-II-1

Card series

Class BIssuance

Date

NominalLiquidation

Amount

OutstandingDollar

PrincipalAmount Note Interest Rate

ExpectedPrincipal

Payment DateLegal

Maturity Date

Class B(2003-3) 9/3/03 $150,000,000 $150,000,000 4.50% August 2008 June 2011Class B(2003-4) 9/16/03 $200,000,000 $200,000,000 One Month LIBOR + 0.80% September 2008 July 2011Class B(2003-5) 11/5/03 $150,000,000 $150,000,000 4.79% October 2010 August 2013Class B(2003-6) 11/20/03 $250,000,000 $250,000,000 One Month LIBOR + 0.53% November 2008 September 2011Class B(2004-1) 1/30/04 $250,000,000 $250,000,000 One Month LIBOR + 0.44% January 2009 November 2011Class B(2004-2) 3/11/04 $250,000,000 $250,000,000 One Month LIBOR + 0.22% February 2007 December 2009Class B(2004-3) 4/14/04 $150,000,000 $150,000,000 One Month LIBOR + 0.73% March 2019 January 2022Class B(2004-4) 7/16/04 $150,000,000 $150,000,000 One Month LIBOR + 0.30% July 2007 May 2010Class B(2004-5) 7/16/04 $200,000,000 $200,000,000 3.70% July 2007 May 2010Class B(2004-6) 10/8/04 $200,000,000 $200,000,000 4.15% September 2009 July 2012Class B(2004-7) 10/27/04 $184,605,000 $184,605,000 Not to exceed Three Month LIBOR + 0.65%1 October 2014 August 2017Class B(2005-1) 3/3/05 $175,000,000 $175,000,000 4.90% February 2015 December 2017Class B(2005-2) 5/20/05 $150,000,000 $150,000,000 One Month LIBOR + 0.15% May 2008 March 2011Class B(2005-3) 8/4/05 $100,000,000 $100,000,000 Three Month LIBOR + 0.55% July 2025 May 2028Class B(2006-1) 4/6/06 $175,000,000 $175,000,000 One Month LIBOR + 0.28% March 2016 January 2019Class B(2006-2) 6/6/06 $350,000,000 $350,000,000 One Month LIBOR + 0.09% May 2009 March 2012

Total: $3,084,605,000 $3,084,605,000

1 Class B(2004-7) noteholders will receive interest at Three Month EURIBOR + 0.49% on an outstanding euro principalamount of €150,000,000, pursuant to the terms of a currency and interest rate swap applicable only to the Class B(2004-7)notes.

A-II-2

Card series

Class CIssuance

Date

NominalLiquidation

Amount

OutstandingDollar

PrincipalAmount Note Interest Rate

ExpectedPrincipal

Payment DateLegal

Maturity Date

Class C(2002-1) 10/9/02 $150,000,000 $150,000,000 One Month LIBOR + 2.75% September 2007 July 2010Class C(2003-A) 2/18/03 $100,000,000 $100,000,000 Not to exceed One Month LIBOR + 3.25% February 2008 December 2010Class C(2003-1) 5/28/03 $250,000,000 $250,000,000 One Month LIBOR + 2.55% May 2008 March 2011Class C(2003-3) 9/23/03 $250,000,000 $250,000,000 One Month LIBOR + 2.25% September 2013 July 2016Class C(2003-4) 10/29/03 $250,000,000 $250,000,000 6.00% October 2010 August 2013Class C(2003-5) 12/23/03 $150,000,000 $150,000,000 One Month LIBOR + 1.15% December 2008 October 2011Class C(2004-1) 1/21/04 $200,000,000 $200,000,000 3.40% January 2007 November 2009Class C(2004-2) 3/5/04 $100,000,000 $100,000,000 One Month LIBOR + 1.05% February 2014 December 2016Class C(2004-3) 6/23/04 $367,500,000 $367,500,000 Not to exceed 6.50%1 June 2014 April 2017Class C(2004-4) 9/2/04 $150,000,000 $150,000,000 One Month LIBOR + 0.65% August 2009 June 2012Class C(2005-1) 4/21/05 $175,000,000 $175,000,000 One Month LIBOR + 0.40% April 2010 February 2013Class C(2006-1) 5/17/06 $175,000,000 $175,000,000 One Month LIBOR + 0.29% May 2011 March 2014

Total: $2,317,500,000 $2,317,500,000

1 Class C(2004-3) noteholders will receive interest at 6.625% on an outstanding sterling principal amount of £200,000,000pursuant to the terms of a currency and interest rate swap applicable only to the Class C(2004-3) notes.

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Annex III

Outstanding Master Trust Series

The information provided in this Annex III is an integral part of the prospectus supplement.

# Series/Class Issuance Date Invested Amount Certificate RateExpected FinalPayment Date Termination Date

1 1998-1Class AClass BClass C

4/1/98———

$500,000,000$50,236,407$40,780,142

6.310%6.356%

—

April 2008June 2008

—

June 2011June 2011

—

2 1998-5 11/20/98 up to $589,500,000 Floating Rate — February 2010

3 1998-6 12/22/98 up to $500,000,000 Floating Rate — May 2010

4 1999-3Class AClass BCollateral Invested Amount

7/27/99———

$400,000,000$50,000,000$50,000,000

One Month LIBOR + .25%One Month LIBOR + .48%

—

July 2006July 2006

—

September 2009September 2009

—

5 2000-3Class AClass BCollateral Invested Amount

8/24/00———

$807,500,000$92,500,000

$100,000,000

One Month LIBOR + .19%One Month LIBOR + .51%

—

August 2007August 2007

—

October 2010October 2010

—

6 2001-1Class AClass BCollateral Invested Amount

2/28/01———

$975,000,000$120,000,000$105,000,000

One Month LIBOR + .20%One Month LIBOR + .51%

—

February 2008February 2008

—

December 2010December 2010

—

7 2001-5Class AClass BCollateral Invested Amount

8/22/01———

$845,000,000$77,500,000$77,500,000

5.30%One Month LIBOR + .38%

—

August 2006August 2006

—

June 2009June 2009

—

8 2001-6Class AClass BCollateral Invested Amount

9/12/01———

$1,056,250,000$130,000,000$113,750,000

One Month LIBOR + .19%One Month LIBOR + .50%

—

August 2008August 2008

—

June 2011June 2011

—

9 2001-8Class AClass BCollateral Invested Amount

11/1/01———

$845,000,000$77,500,000$77,500,000

4.60%One Month LIBOR + .55%

—

October 2006October 2006

—

August 2009August 2009

—

10 2002-1Class AClass BCollateral Invested Amount

1/18/02———

$812,500,000$100,000,000$87,500,000

One Month LIBOR + .20%One Month LIBOR + .60%

—

January 2009January 2009

—

November 2011November 2011

—

11 2002-2Class AClass BCollateral Invested Amount

4/17/02———

$503,750,000$62,000,000$54,250,000

One Month LIBOR + .13%Floating Rate

—

March 2007March 2007

—

January 2010January 2010

—

12 2002-4Class AClass BCollateral Invested Amount

6/7/02———

$633,750,000$58,125,000$58,125,000

4.90%One Month LIBOR + .50%

—

May 2007May 2007

—

March 2010March 2010

—

13 2002-A 6/27/02 up to $491,250,000 Floating Rate — June 2008

14 2002-B 7/2/02 up to $1,254,452,000 Floating Rate — December 2009

15 2003-A 12/9/03 up to $500,000,000 Floating Rate — October 2009

A-III-1

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Prospectus dated May 22, 2006

Capital One BankSponsor, Servicer and Originator of Assets

Capital One Funding, LLCDepositor and Transferor

Capital One Multi-asset Execution TrustIssuing Entity

The issuing entity—

‰ may periodically issue notes in one or more series, classes or tranches;

‰ owns a collateral certificate representing an undivided interest in the Capital One Master Trust, whose assets consistprimarily of receivables arising in credit card accounts owned by Capital One Bank, and whose assets may, in thefuture, include receivables arising in credit card accounts owned by Capital One, F.S.B. or any affiliate of CapitalOne Bank or Capital One, F.S.B.; and

‰ may own—

—one or more additional collateral certificates, each representing an undivided interest in a master trust or othersecuritization special purpose entity, whose assets consist primarily of receivables arising in accounts owned orloans originated or acquired by Capital One Bank, Capital One, F.S.B. or any of their affiliates (includingnon-banking affiliates); and

—other property described in this prospectus and in the accompanying prospectus supplement.

The notes—

‰ will be secured by a limited portion of the issuing entity’s assets, and will be paid only from proceeds of that note’sallocable share of those assets;

‰ offered with this prospectus and the accompanying prospectus supplement will be rated in one of the four highestrating categories by at least one nationally recognized rating agency; and

‰ will be issued as part of a designated series and class and may be issued as part of a designated tranche within a class.

You should consider the discussion under “Risk Factors” beginning on page 15 of this prospectus before youpurchase any notes.

Capital One Multi-asset Execution Trust will be the issuing entity of the notes. The notes will be obligations of the issuingentity only and are not obligations of Capital One Bank, Capital One, F.S.B., Capital One Funding, LLC, their affiliates orany other person. Each class or tranche of notes is secured by the assets of the issuing entity as described in this prospectusand in the related prospectus supplement. Noteholders will have no recourse to any other assets of the issuing entity for thepayment of the notes.

The notes will not be insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmentalagency or instrumentality.

Neither the SEC nor any state securities commission has approved these notes or determined that this prospectus isaccurate or complete. Any representation to the contrary is a criminal offense.

Important Notice about Information Presented in thisProspectus and the Accompanying Prospectus Supplement

We provide information to you about the notes in two separate documents that progressively provide moredetail: (a) this prospectus, which provides general information about the Card series notes and each other seriesof notes, some of which may not apply to your series, class or tranche of notes, and (b) the accompanyingprospectus supplement, which will describe the specific terms of your series, class or tranche of notes, including:

• the timing of interest and principal payments;

• financial and other information about the issuing entity’s assets;

• information about enhancement for your series, class or tranche;

• the ratings for your class or tranche; and

• the method for selling the notes.

This prospectus may be used to offer and sell any series, class or tranche of notes only if accompanied bythe prospectus supplement for that series, class or tranche.

If the description of the terms of a particular series, class or tranche of notes varies between this prospectusand the accompanying prospectus supplement, you should rely on the information in the accompanyingprospectus supplement.

You should rely only on the information provided in this prospectus and the accompanying prospectussupplement including the information incorporated by reference. We have not authorized anyone to provide youwith different information.

We are not offering the notes in any state where the offer is not permitted. We do not claim the accuracy ofthe information in this prospectus or the accompanying prospectus supplement as of any date other than the datesstated on their respective covers.

We include cross-references in this prospectus and in the accompanying prospectus supplement to captionsin these materials where you can find further related discussions. The Table of Contents in this prospectus and inthe accompanying prospectus supplement provide the pages on which these captions are located.

TABLE OF CONTENTS

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Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . 1Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1The Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Capital One, F.S.B . . . . . . . . . . . . . . . . . . . . . . 1Depositor and Transferor . . . . . . . . . . . . . . . . . 1Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Issuing Entity . . . . . . . . . . . . . . . . . . . . . . . . . . 2Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . 2Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 2Assets of the Master Trust . . . . . . . . . . . . . . . . . 2Assets of COMET . . . . . . . . . . . . . . . . . . . . . . . 3Securities Offered . . . . . . . . . . . . . . . . . . . . . . . 3Sources of Funds to Pay the Notes . . . . . . . . . . 3Series, Classes and Tranches of Notes . . . . . . . 5Stated Principal Amount, Outstanding Dollar

Principal Amount, Adjusted OutstandingDollar Principal Amount and NominalLiquidation Amount of Notes . . . . . . . . . . . . 5

COMET Trust Accounts . . . . . . . . . . . . . . . . . . 6Interest Payments . . . . . . . . . . . . . . . . . . . . . . . 7Principal Payments . . . . . . . . . . . . . . . . . . . . . . 7Revolving Period . . . . . . . . . . . . . . . . . . . . . . . . 8Application of Collections . . . . . . . . . . . . . . . . 8Card Series Application of Finance Charge

Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Card Series Application of Principal

Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Fees and Expenses Payable from

Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Limit on Repayment of All Notes . . . . . . . . . . . 9Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . 10Early Redemption of Notes . . . . . . . . . . . . . . . . 11Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 11Shared Excess Finance Charge Amounts . . . . . 12Shared Excess Principal Amounts . . . . . . . . . . 12Limited Recourse to COMET . . . . . . . . . . . . . . 12Denominations . . . . . . . . . . . . . . . . . . . . . . . . . 13Registration, Clearance and Settlement . . . . . . 13

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Structure Overview . . . . . . . . . . . . . . . . . . . . . . . . . 29

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

The Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Capital One Bank . . . . . . . . . . . . . . . . . . . 30Capital One, F.S.B . . . . . . . . . . . . . . . . . . 30Capital One Financial Corporation . . . . . . 30Industry Litigation . . . . . . . . . . . . . . . . . . . 31

The Bank’s Credit Card and LendingBusiness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Business Overview . . . . . . . . . . . . . . . . . . 32Underwriting Procedures . . . . . . . . . . . . . 33Customer Service . . . . . . . . . . . . . . . . . . . 34

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Billing and Payments . . . . . . . . . . . . . . . . 34Delinquencies and Collections—

Collection Efforts . . . . . . . . . . . . . . . . . 35Collections and Recoveries—Recoveries

Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . 36Interchange . . . . . . . . . . . . . . . . . . . . . . . . 37

The Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 37Outsourcing of Servicing . . . . . . . . . . . . . 38

The Transferor, The Depositor and TheReceivables Purchase Agreements . . . . . . . . . . . 40

Capital One Funding . . . . . . . . . . . . . . . . . . . . . 40Receivables Purchase Agreements . . . . . . . . . . 41

The Master Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 43General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Master Trust Assets . . . . . . . . . . . . . . . . . . . . . . 44Origination and Changes . . . . . . . . . . . . . . . . . . 44The Receivables . . . . . . . . . . . . . . . . . . . . . . . . 45Investor Certificates; Master Trust Transferor

Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Conveyance of Receivables . . . . . . . . . . . . . . . 46Addition of Master Trust Assets . . . . . . . . . . . . 47Removal of Master Trust Assets . . . . . . . . . . . . 50Application of Collections . . . . . . . . . . . . . . . . 51Master Trust Collection Account . . . . . . . . . . . 52Allocation Percentage . . . . . . . . . . . . . . . . . . . . 53Sharing of Principal Collections . . . . . . . . . . . . 54Excess Funding Account . . . . . . . . . . . . . . . . . . 54Sharing of Excess Finance Charges . . . . . . . . . 54Defaulted Receivables; Rebates and Fraudulent

Charges; Recoveries . . . . . . . . . . . . . . . . . . . 55The Base Certificate; Additional

Transferors . . . . . . . . . . . . . . . . . . . . . . . . . . 55Master Trust Termination . . . . . . . . . . . . . . . . . 56Pay Out Events . . . . . . . . . . . . . . . . . . . . . . . . . 56New Issuances . . . . . . . . . . . . . . . . . . . . . . . . . . 58Representations and Warranties . . . . . . . . . . . . 59The Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Servicer Covenants . . . . . . . . . . . . . . . . . . 61Limitation on Liability of the Servicer . . . 62Servicing Compensation and Payment of

Expenses . . . . . . . . . . . . . . . . . . . . . . . . 62Certain Other Matters Regarding the

Servicer . . . . . . . . . . . . . . . . . . . . . . . . . 63Servicer Default . . . . . . . . . . . . . . . . . . . . 63

Master Trust Trustee . . . . . . . . . . . . . . . . . . . . . 64General . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Rights and Appointment of Co-Master

Trust Trustees . . . . . . . . . . . . . . . . . . . . 65Duties and Responsibilities . . . . . . . . . . . . 65Limitation on Liability of Master Trust

Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 66Resignation, Removal and

Replacement . . . . . . . . . . . . . . . . . . . . . 66

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Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 66Evidence as to Compliance . . . . . . . . . . . . . . . . 67Amendments to the Pooling Agreement . . . . . . 68Assumption of the Transferor’s Obligations . . . 69Investor Certificateholders Have Limited

Control of Actions . . . . . . . . . . . . . . . . . . . . . 70

The Issuing Entity . . . . . . . . . . . . . . . . . . . . . . . . . . 70General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . 71

Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 71Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 71Depositor and Transferor . . . . . . . . . . . . . . . . . 72Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . 72Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Sources of Funds to Pay the Notes . . . . . . . . . . . . . 75General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75Addition of Assets . . . . . . . . . . . . . . . . . . . . . . . 76The COMT Collateral Certificate . . . . . . . . . . . 77Deposit and Application of Funds in

COMET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80COMET Trust Accounts . . . . . . . . . . . . . . . . . . 80Credit Enhancement . . . . . . . . . . . . . . . . . . . . . 82

Subordination . . . . . . . . . . . . . . . . . . . . . . 82Letter of Credit . . . . . . . . . . . . . . . . . . . . . 82Cash Collateral Guaranty or Account . . . 82Surety Bond or Insurance Policy . . . . . . . 83Spread Account . . . . . . . . . . . . . . . . . . . . . 83Reserve Account . . . . . . . . . . . . . . . . . . . . 83Derivative Agreements . . . . . . . . . . . . . . . 83Supplemental Credit Enhancement

Agreements and Supplemental LiquidityAgreements . . . . . . . . . . . . . . . . . . . . . . 83

Collateral Interests . . . . . . . . . . . . . . . . . . 84Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 84Limited Recourse to COMET; Security for the

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88Stated Principal Amount, Outstanding Dollar

Principal Amount, Adjusted OutstandingDollar Principal Amount and NominalLiquidation Amount . . . . . . . . . . . . . . . . . . . 88

Stated Principal Amount . . . . . . . . . . . . . . . . . . 89Outstanding Dollar Principal Amount . . . . . . . 89Adjusted Outstanding Dollar Principal

Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Nominal Liquidation Amount . . . . . . . . . . . . . . 89Final Payment of the Notes . . . . . . . . . . . . . . . . 92Subordination of Interest and Principal . . . . . . . 92Required Subordinated Amount and Usage . . . 94Principal Payments on Subordinated Card

Series Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 96Redemption and Early Redemption of Notes . . 96

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Optional Redemption . . . . . . . . . . . . . . . . . . . . 96Mandatory Redemption . . . . . . . . . . . . . . . . . . . 97Early Redemption Events . . . . . . . . . . . . . . . . . 97Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 98Events of Default Remedies . . . . . . . . . . . . . . . 99Issuances of New Series, Classes and Tranches

of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101Payments on Notes; Paying Agent . . . . . . . . . . 103Denominations . . . . . . . . . . . . . . . . . . . . . . . . . 104Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Form, Exchange and Registration and Transfer

of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . . . 105The Depository Trust Company . . . . . . . . . . . . 106Clearstream, Luxembourg . . . . . . . . . . . . . . . . . 106Euroclear System . . . . . . . . . . . . . . . . . . . . . . . 107Distributions on Book-Entry Notes . . . . . . . . . . 107Global Clearance and Settlement

Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . 108Definitive Notes . . . . . . . . . . . . . . . . . . . . . . . . 108

Deposit and Application of Funds for CardSeries Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Card Series Finance Charge Amounts . . . . . . . 109Application of Card Series Finance Charge

Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Targeted Deposits of Card Series Finance

Charge Amounts to the Interest FundingAccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Allocation to Interest Funding Subaccounts . . . 112Payments Received from Derivative

Counterparties for Interest of ForeignCurrency Notes . . . . . . . . . . . . . . . . . . . . . . . 112

Allocations of Reductions of NominalLiquidation Amounts from Charge-Offs . . . . 112

Allocations of Reimbursements of NominalLiquidation Amount Deficits . . . . . . . . . . . . 114

Application of Card Series PrincipalAmounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

Allocations of Reductions of NominalLiquidation Amounts from Reallocations . . . 117

Limit on Allocations of Card Series PrincipalAmounts and Card Series Finance ChargeAmounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Targeted Deposits of Card Series PrincipalAmounts to the Principal FundingAccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Allocation to Principal FundingSubaccounts . . . . . . . . . . . . . . . . . . . . . . . . . . 121

Limit on Deposits to the Principal FundingSubaccount of Subordinated Notes; Limit onRepayments of all Tranches . . . . . . . . . . . . . 121

Payments Received from DerivativeCounterparties for Principal . . . . . . . . . . . . . 122

Payments Received from Supplemental CreditEnhancement Providers or SupplementalLiquidity Providers for Principal . . . . . . . . . 122

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Deposits of Withdrawals from the Class CReserve Account to the Principal FundingAccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Withdrawals from Interest FundingSubaccounts . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Withdrawals from Principal FundingSubaccounts . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 125Targeted Deposits to the Class C Reserve

Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126Withdrawals from the Class C Reserve

Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126Targeted Deposits to the Accumulation

Reserve Account . . . . . . . . . . . . . . . . . . . . . . 126Withdrawals from the Accumulation Reserve

Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126Targeted Deposits to the Class D Reserve

Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127Withdrawals from the Class D Reserve

Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127Final Payment of the Notes . . . . . . . . . . . . . . . . 127Pro Rata Payments Within a Tranche . . . . . . . . 127Shared Excess Finance Charge Amounts . . . . . 128Shared Excess Principal Amounts . . . . . . . . . . 128

The Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . 129

General . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Duties and Responsibilities . . . . . . . . . . . . 129Resignation, Removal and

Replacement . . . . . . . . . . . . . . . . . . . . . 130Issuing Entity Covenants . . . . . . . . . . . . . . . . . . 131Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132Amendments to the Indenture, the asset pool

supplement and the IndentureSupplements . . . . . . . . . . . . . . . . . . . . . . . . . 132

Tax Opinions for Amendments . . . . . . . . . . . . . 134

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Addresses for Notices . . . . . . . . . . . . . . . . . . . . 135Issuing Entity’s Annual Compliance

Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135Indenture Trustee’s Annual Report . . . . . . . . . . 135List of Noteholders . . . . . . . . . . . . . . . . . . . . . . 135Replacement of Notes . . . . . . . . . . . . . . . . . . . . 135Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 137

Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 137

Certain Legal Aspects of the Receivables . . . . . . . 138Certain Regulatory Matters . . . . . . . . . . . . . . . . 138Consumer Protection Laws . . . . . . . . . . . . . . . . 138

Federal Income Tax Consequences . . . . . . . . . . . . 139General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139Description of Opinions . . . . . . . . . . . . . . . . . . 140Tax Characterization of the Issuing Entity and

the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140Consequences to Holders of an Interest in the

Offered Notes . . . . . . . . . . . . . . . . . . . . . . . . 141State and Local Tax Consequences . . . . . . . . . . 144

Benefit Plan Investors . . . . . . . . . . . . . . . . . . . . . . . 144Prohibited Transactions . . . . . . . . . . . . . . . . . . . 144Potential Prohibited Transactions from

Investment in Notes . . . . . . . . . . . . . . . . . . . . 144Prohibited Transactions between the Benefit

Plan and a Party in Interest . . . . . . . . . . . . . . 144Prohibited Transactions between the Issuing

Entity or the Master Trust and a Party inInterest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

Investment by Benefit Plan Investors . . . . . . . . 146Tax Consequences to Benefit Plans . . . . . . . . . 146

Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

Where You Can Find More Information . . . . . . . 146

Forward-Looking Statements . . . . . . . . . . . . . . . . 147

Glossary of Defined Terms . . . . . . . . . . . . . . . . . . . 149

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Prospectus Summary

This summary does not contain all the information you may need to make an informed investmentdecision. You should read this prospectus and the accompanying prospectus supplement in their entiretybefore you purchase any notes. The disclosure in this prospectus is supplemented by the accompanyingprospectus supplement.

Risk Factors

Investment in the notes involves risks. You shouldconsider carefully the risk factors beginning onpage 15 in this prospectus.

The Bank

Capital One Bank, a Virginia banking corporation,owns credit card accounts from which receivables aretransferred to Capital One Funding, whichreceivables Capital One Funding then, subject tocertain conditions, adds to the master trust. See “TheMaster Trust—Addition of Master Trust Assets.”

Capital One Bank is the sponsor of the issuing entityand the servicer of the assets included in the mastertrust.

We refer to Capital One Bank as the “bank.”

Capital One, F.S.B.

Capital One, F.S.B., a federal savings bank and anaffiliate of the bank, originates and owns credit cardaccounts and other revolving credit accounts fromwhich receivables may be transferred to Capital OneFunding or an affiliate, which receivables CapitalOne Funding or an affiliate may then, subject tocertain conditions, add to the master trust or anothermaster trust or securitization special purpose entitywhich may then transfer a collateral certificate to theissuing entity. See “The Master Trust—Addition ofMaster Trust Assets.”

We refer to Capital One, F.S.B. as the “savingsbank” and together with Capital One Bank as the“banks.”

Depositor and Transferor

Capital One Funding, LLC, a limited liabilitycompany formed under the laws of theCommonwealth of Virginia on November 13, 2001

and a wholly-owned subsidiary of Capital One Bank,is the depositor of the issuing entity. Capital OneFunding also structures the issuing entity’stransactions. The address for Capital One Funding is140 East Shore Drive, Room 1071-B, Glen Allen,Virginia 23059 and its telephone number is(804) 290-6959. Capital One Funding is thetransferor under the Capital One Master Trust. As thetransferor under the Capital One Master Trust,Capital One Funding purchases from Capital OneBank, and may purchase from Capital One, F.S.B.and affiliates of Capital One Bank or Capital One,F.S.B., receivables arising in credit card accountsowned by Capital One Bank, Capital One, F.S.B. andtheir affiliates. Capital One Funding may then,subject to certain conditions, add those receivables tothe Capital One Master Trust.

As the transferor under the Capital One Master Trust,Capital One Funding holds the transferor interest tothe master trust, which represents the interest in themaster trust not represented by investor certificatesissued and outstanding under the master trust or therights, if any, of any credit enhancement providers toreceive payments from the master trust. See “TheMaster Trust—Investor Certificates; Master TrustTransferor Interest.”

Furthermore, Capital One Funding is currently the soleholder of all outstanding Class D Card series notes.

We refer to Capital One Funding, LLC as “CapitalOne Funding” or the “transferor,” and we refer tothe Capital One Master Trust as “COMT” or the“master trust.”

See “The Transferor, The Depositor and TheReceivables Purchase Agreements—Capital OneFunding” for further description of its activities andhistory.

Servicer

Capital One Bank is the servicer for the master trustand is responsible for servicing, managing and

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making collections on the receivables in the mastertrust. If the issuing entity holds any additionalcollateral certificates issued by any other master trustor special purpose entity, the bank or an affiliate alsowill be the servicer for such other master trusts orsecuritization special purpose entities. The servicerhas outsourced certain functions to affiliated andunaffiliated third parties, but the bank remainsresponsible for the overall servicing process. Forinformation about certain affiliated and unaffiliatedthird party vendors that provide these services,including Capital One Services, Inc. and First DataResources, Inc., see “The Banks—The Servicer—Outsourcing of Servicing.”

As servicer, the bank will receive a master trustservicing fee. Each month, a share of the master trustservicing fee allocated to the COMT collateralcertificate will be further allocated to each series ofnotes. The Card series servicing fee will be anamount equal to 2.00% of the aggregate nominalliquidation amount of each tranche of Card seriesnotes for any month. See “The Master Trust—TheServicer—Servicing Compensation and Payment ofExpenses.”

Issuing Entity

Capital One Multi-asset Execution Trust, a Delawarestatutory trust, is the issuing entity of the notes. Theaddress of the issuing entity is Capital One Multi-asset Execution Trust, c/o Deutsche Bank TrustCompany Delaware, E.A. Delle Donne CorporateCenter, Montgomery Building, 1011 Centre Road,Wilmington, Delaware 19805-1266. Its telephonenumber is (201) 593-6792.

We refer to the Capital One Multi-asset ExecutionTrust as the “issuing entity” or “COMET.”

Indenture Trustee

The Bank of New York, a New York bankingcorporation, is the indenture trustee under theindenture for each series, class and tranche of notesissued by COMET.

Under the terms of the indenture, the role of theindenture trustee is limited. See “The Indenture—Indenture Trustee.”

Owner Trustee

Deutsche Bank Trust Company Delaware, aDelaware banking corporation, is the owner trustee ofCOMET.

Under the terms of the trust agreement, the role of theowner trustee is limited. See “The Issuing Entity—Owner Trustee.”

Assets of the Master Trust

The assets of the master trust consist primarily ofcredit card receivables arising in selected MasterCardand VISA revolving credit card accounts, whichreceivables have been transferred by the bank or thesavings bank to Capital One Funding and have beentransferred by Capital One Funding to the mastertrust.

The size of the master trust will fluctuate dependingon the amount of receivables in accounts designatedto the master trust. The transferor’s ability to increaseand decrease the size of the master trust is a result ofits ability to designate and remove accounts from themaster trust. The transferor may designate additionalaccounts to the master trust portfolio at any timeprovided the receivables in those accounts areeligible receivables arising in eligible accounts. Also,under certain limited circumstances, the transferormay be required to designate additional accounts tothe master trust portfolio if an addition is required tomaintain the master trust required transferor interestor to maintain a minimum required amount ofprincipal receivables in the master trust. Thetransferor cannot add receivables to the master trustunless the transferor certifies that the addition willnot cause a pay out event and the rating agenciesconfirm the outstanding ratings on the certificatesand the notes either at the time of the addition or, inthe case of required additions, on a quarterly basis asdescribed in “The Master Trust—Addition of MasterTrust Assets.” For a description of pay out events, see“The Master Trust—Pay Out Events.”

The transferor may also remove accounts from themaster trust portfolio for any reason so long as thetransferor certifies that the removal will not cause apay out event and the rating agencies confirm theoutstanding ratings on the certificates and the noteson the removal date. The amount of any removal is

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limited, and a removal generally may occur onlyonce in a calendar month. In addition, except inlimited circumstances, the accounts removed fromthe master trust portfolio must be selected randomly.However, if the transferor breaches certainrepresentations or warranties regarding the eligibilityof accounts in the master trust portfolio, thetransferor may be required to remove the ineligiblereceivables related to those accounts from the mastertrust. Finally, on the date when any receivable in anaccount is charged off as uncollectible by the bank,the master trust trustee automatically transfers thosereceivables to the transferor.

See “The Master Trust—Addition of Master TrustAssets,” “—Removal of Master Trust Assets” and“—Defaulted Receivables; Rebates and FraudulentCharges; Recoveries.”

Assets of COMET

COMET’s primary assets will consist of one or morecollateral certificates, each representing an undividedinterest in a master trust or other securitizationspecial purpose entity, whose assets consist primarilyof receivables arising in accounts owned or loansoriginated or acquired by the bank, the savings bankor by any of their affiliates (including non-bankingaffiliates).

COMET owns a collateral certificate, referred to asthe “COMT collateral certificate,” issued by themaster trust. For a description of the COMTcollateral certificate, see “Sources of Funds to Paythe Notes—The COMT Collateral Certificate.” For adescription of the master trust, see “—Assets of theMaster Trust” above and “The Master Trust.”

Other than as specifically described in this prospectusand the related prospectus supplement, noteholderswill have no recourse to any other assets other thanthe assets of COMET. See “Sources of Funds to Paythe Notes—General.” In addition to the Card series,COMET may issue other series of notes that aresecured by the assets in COMET. Each series ofnotes in COMET will be entitled to its allocableshare of the assets in COMET.

The size of the COMT collateral certificate willfluctuate depending on the aggregate nominal

liquidation amount of all of the outstanding Cardseries notes secured by COMET’s assets. See“Sources of Funds to Pay the Notes—The COMTCollateral Certificate.”

The occurrence of a pay out event for a collateralcertificate owned by COMET will result in the earlyamortization of that collateral certificate and mayresult in the early redemption of the notes. Thepayments made upon the occurrence of a pay outevent for a collateral certificate may be reinvested inanother collateral certificate, reinvested directly inreceivables, paid to noteholders or paid to the holderof the transferor interest. See “The Master Trust—Pay Out Events.”

Securities Offered

COMET is offering notes. The notes will be issuedunder the indenture and the asset pool supplement,between COMET and the indenture trustee. Eachseries of notes will be issued under an indenturesupplement between COMET and the indenturetrustee. The Card series notes will be issued under theCard series indenture supplement, which supplementsthe indenture and the asset pool supplement.

Sources of Funds to Pay the Notes

The following sources of funds will be available topay principal of and interest on any series, class ortranche of notes:

• The COMT Collateral Certificate. The COMTcollateral certificate is an investor certificateissued by the master trust and transferred byCapital One Funding to COMET. It representsan undivided interest in the assets of the mastertrust. The master trust primarily ownsreceivables arising in selected MasterCard andVISA credit card accounts. Both collections ofprincipal receivables and finance chargereceivables will be allocated among holders ofinterests in the master trust—including theCOMT collateral certificate—based generallyon the investment in principal receivables in themaster trust. See “Sources of Funds to Pay theNotes—The COMT Collateral Certificate” and“The Master Trust.”

• The COMET Trust Accounts. COMET hasestablished a collection account for the purpose

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of receiving amounts payable under the COMTcollateral certificate and amounts payable underany other assets included in COMET, includingadditional collateral certificates that may betransferred to COMET at a later date. If sospecified in the related prospectus supplement,COMET may establish additional accounts,called supplemental accounts, for any series,class or tranche of notes secured by COMET’sassets.

The following additional sources of funds may alsobe available to pay principal of and interest on theseries, classes or tranches of notes:

• Internal Credit Enhancement. Some notes mayhave the benefit of one or more forms of internalcredit enhancement, such as subordination,collateral interests, spread accounts or reserveaccounts. Noteholders of senior classes of noteswill have the benefit of subordination. See“—Subordination” below and “The Notes—Subordination of Interest and Principal” forgreater detail regarding subordination. Somenotes may have the benefit of a collateralinterests. A description of the specific terms ofany collateral interests that are applicable to aseries, class or tranche of notes will be includedin the related prospectus supplement. See“Sources of Funds to Pay the Notes—CreditEnhancement—Collateral Interests” for adiscussion of collateral interests. Certain notesmay have the benefit of spread accounts orreserve accounts. See generally “—COMETTrust Accounts” below and “Deposit andApplication of Funds for Card Series Notes” fora discussion of these accounts.

• Additional Collateral Certificates. Capital OneFunding or another affiliate of the bank maytransfer to COMET, at a later date, additionalcollateral certificates representing undividedinterests in credit card master trusts or othersecuritization special purpose entities whoseassets consist primarily of receivables arising incredit card and other revolving credit accountsowned by the bank, the savings bank or any oftheir affiliates. These transfers and designationswill occur without noteholder review orapproval.

• Derivative Agreements. Some notes may havethe benefit of one or more derivativeagreements, including interest rate or currencyswaps as described in “Sources of Funds to Paythe Notes— Credit Enhancement—DerivativeAgreements”. The bank or an affiliate may be acounterparty to a derivative agreement. Adescription of the specific terms of eachderivative agreement and each derivativecounterparty will be included in the relatedprospectus supplement.

• Supplemental Credit Enhancement Agreementsand Supplemental Liquidity Agreements. Somenotes may have the benefit of one or moreadditional forms of credit enhancement, referredto in this prospectus and the related prospectussupplement as supplemental credit enhancementagreements, such as letters of credit, cashcollateral guarantees or accounts, surety bondsor insurance policies. In addition, some notesmay have the benefit of one or more forms ofsupplemental liquidity agreements, such as aliquidity facility with various liquidityproviders. The bank, the savings bank or anaffiliate may be the provider of anysupplemental credit enhancement agreement orsupplemental liquidity agreement. A descriptionof the specific terms of any supplemental creditenhancement agreement or any supplementalliquidity agreement applicable to a series, classor tranche of notes and a description of therelated provider will be included in the relatedprospectus supplement. See “Sources of Fundsto Pay the Notes—General,” “—CreditEnhancement—Supplemental CreditEnhancement Agreements and SupplementalLiquidity Agreements,” “The Notes—General”and “Deposit and Application of Funds for CardSeries Notes—Payments Received fromSupplemental Credit Enhancement Providers orSupplemental Liquidity Providers for Principal”for a discussion of credit enhancement,supplemental credit enhancement agreementsand supplemental liquidity agreements.

Each series, class or tranche of notes is entitled onlyto the benefits of that portion of those assets securingthe notes under the indenture, the asset poolsupplement, the applicable indenture supplement andthe applicable terms document.

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Series, Classes and Tranches of Notes

The prospectus supplement for a particular issuanceof notes will designate the related series for thosenotes. Each series of notes is entitled to its allocableshare of COMET’s assets. It is expected that mostseries of notes will consist of multiple classes ofnotes. A class designation determines the relativeseniority for receipt of cash flows and funding of thedefault amount allocated to the related series ofnotes. For example, generally, subordinated classesof notes provide credit enhancement for seniorclasses of notes in the same series.

Some series of notes will be multiple tranche series,meaning that multiple tranches of notes may beissued in each class of notes.

Tranches of notes within a class of notes of amultiple tranche series may be issued on differentdates and have different stated principal amounts,interest rates, interest payment dates, expectedprincipal payment dates, legal maturity dates andother varying characteristics as described, ifapplicable, in the related prospectus supplement.

In a multiple tranche series, the expected principalpayment dates and the legal maturity dates of thetranches of senior and subordinated notes of thatseries likely will be different. As such, certaintranches of subordinated notes may have expectedprincipal payment dates and legal maturity datesearlier than some or all of the tranches of senior notesof that series. However, a tranche of subordinatednotes will not be repaid before its legal maturity dateunless, after payment of that tranche of subordinatednotes, the remaining subordinated notes provide therequired enhancement for the senior notes. Inaddition, a tranche of senior notes will not be issuedunless, after issuance, there are enough outstandingsubordinated notes to provide the requiredsubordinated amount for that tranche of senior notes.See “The Notes—Required Subordinated Amount andUsage” and “—Issuances of New Series, Classes andTranches of Notes.”

Some series may not be multiple tranche series. Forthese series, each class will consist of a single trancheand each class will generally be issued on the samedate. The expected principal payment dates and legalmaturity dates of the subordinated notes of that series

will either be the same as or later than those of thesenior notes of that series.

Stated Principal Amount, Outstanding DollarPrincipal Amount, Adjusted Outstanding DollarPrincipal Amount and Nominal LiquidationAmount of Notes

Each series, class or tranche of notes has a statedprincipal amount, an outstanding dollar principalamount, an adjusted outstanding dollar principalamount and a nominal liquidation amount.

• Stated Principal Amount. The stated principalamount of a series, class or tranche of notes isthe amount that is stated on the face of the notesof that series, class or tranche to be payable tothe holders of that series, class or tranche. It canbe denominated in U.S. dollars or in a foreigncurrency.

• Outstanding Dollar Principal Amount. For aseries, class or tranche of U.S. dollar notes, theoutstanding dollar principal amount is the initialdollar principal amount, as described in therelated prospectus supplement, of that series,class or tranche of notes, less principal paymentsto noteholders of that series, class or tranche,plus increases due to issuances of additionalnotes of that series, class or tranche. Theoutstanding dollar principal amount for foreigncurrency notes or discount notes is determinedas described in “The Notes—Stated PrincipalAmount, Outstanding Dollar Principal Amount,Adjusted Outstanding Dollar Principal Amountand Nominal Liquidation Amount.”

• Adjusted Outstanding Dollar Principal Amount.In addition, a series, class or tranche of notesmay have an adjusted outstanding dollarprincipal amount. The adjusted outstandingdollar principal amount of any series, class ortranche of notes is equal to the outstandingdollar principal amount of that series, class ortranche of notes, less any funds on deposit in theprincipal funding subaccount for that series,class or tranche of notes.

• Nominal Liquidation Amount. The nominalliquidation amount of a class or tranche of notesis a U.S. dollar amount based on the initial

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dollar principal amount of that class or tranche,but after deducting:

— that class’s or tranche’s share ofreallocations of principal amounts used topay interest on senior notes or any portionof the servicing fee allocable to the relatedseries of notes;

— that class’s or tranche’s share of charge-offs resulting from any uncovered defaultamount allocated to that class or tranche ofnotes;

— amounts on deposit in the principal fundingsubaccount for that class or tranche; and

— the amount of all payments of principal forthat class or tranche;

and adding back all reimbursements fromfinance charge amounts allocated to the relatedseries of notes, to cover reductions in thatclass’s or tranche’s nominal liquidation amountdue to:

— that class’s or tranche’s share ofreallocations of principal amounts used topay interest on senior notes or any portionof the servicing fee allocable to the relatedseries of notes; or

— that class’s or tranche’s share of charge-offs resulting from any uncovered defaultamount allocated to that class or tranche ofnotes.

In addition, for a class or tranche of discountnotes, the nominal liquidation amount of thatclass or tranche will increase over time asprincipal accretes.

The nominal liquidation amount of a class ortranche of notes will also be increased ifadditional notes of that class or tranche areissued after the initial issuance of notes of thatclass or tranche.

Upon a sale of assets held by COMET or anyapplicable master trust or securitization specialpurpose entity (i) if required under the poolingagreement following the bankruptcy orinsolvency of the transferor for the relatedmaster trust or securitization special purposeentity, (ii) following an event of default andacceleration of a class or tranche of notes, or

(iii) on a class or tranche of note’s legal maturitydate, as described in “Sources of Funds to Paythe Notes—Sale of Assets,” the nominalliquidation amount of the related notes will bereduced to zero.

The nominal liquidation amount of a series ofnotes is equal to the sum of the nominalliquidation amounts of all the classes or tranchesof notes of that series.

For a detailed discussion of the stated principalamount, the outstanding dollar principal amount, theadjusted outstanding dollar principal amount and thenominal liquidation amount, see “The Notes—StatedPrincipal Amount, Outstanding Dollar PrincipalAmount, Adjusted Outstanding Dollar PrincipalAmount and Nominal Liquidation Amount.”

COMET Trust Accounts

Each month, the payments on the COMT collateralcertificate and payments or collections allocable tothe notes will be deposited into the collection accountand allocated among each series of notes, includingthe Card series. The amounts allocated to the Cardseries, plus any other amounts to be treated as financecharge amounts and principal amounts for the Cardseries, will then be allocated to:

‰ the principal funding account;

‰ the interest funding account;

‰ the accumulation reserve account;

‰ the Class C reserve account;

‰ the Class D reserve account;

‰ any other supplemental account;

‰ make payments under any applicable derivativeagreements, supplemental credit enhancementagreements or supplemental liquidityagreements; and

‰ the other purposes as described in thisprospectus, the accompanying prospectussupplement and any other prospectussupplements for classes and tranches of Cardseries notes.

Funds on deposit in the principal funding account andthe interest funding account will be used to make

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payments of principal of and interest on the Cardseries notes.

The principal funding account, the interest fundingaccount and the accumulation reserve account willhave subaccounts for every tranche of Card seriesnotes. For any tranche of Class C Card series notes,COMET also will establish a Class C reservesubaccount for that tranche of notes.

Interest Payments

Each series, class or tranche of notes, other than aseries, class or tranche of discount notes, will bearinterest from its issuance date at the rate described oras calculated or determined as described in therelated prospectus supplement. Interest on eachseries, class or tranche of notes will be paid on theinterest payment dates specified in the relatedprospectus supplement.

The payment of interest on a senior class of notes ofthe Card series on any payment date is senior to thepayment of interest on subordinated classes of notesof the Card series on such date. Generally, nopayment of interest will be made on any Class BCard series note until the required payment of interesthas been made to the Class A Card series notes.Similarly, generally, no payment of interest will bemade on any Class C Card series note until therequired payment of interest has been made to theClass A notes and the Class B notes in the Cardseries. However, funds on deposit in the Class Creserve account will be available only for the Class Cnotes to cover shortfalls of interest on any interestpayment date. Similarly, generally, no payment ofinterest will be made on any Class D Card series noteuntil the required payment of interest has been madeto the Class A notes, the Class B notes and theClass C notes in the Card series. However, funds ondeposit in the Class D reserve account will beavailable only for the Class D notes to covershortfalls of interest on any interest payment date.

Principal Payments

COMET expects to pay the stated principal amountof each series, class or tranche of notes in onepayment on that series, class or tranche of notes’expected principal payment date. The legal maturity

date is the date on which a series, class or tranche ofnotes is legally required to be fully paid inaccordance with its terms. The expected principalpayment date and legal maturity date for a series,class or tranche of notes will be specified in therelated prospectus supplement.

No payment of principal will be made on any Class BCard series notes unless, following the payment, theremaining nominal liquidation amount of alloutstanding Class B Card series notes is at least equalto the Class A required subordinated amount of ClassB notes for the outstanding Class A Card series notesless any usage of the Class A required subordinatedamount of Class B notes for those outstandingClass A Card series notes.

Similarly, no payment of principal will be made onany Class C Card series notes unless, following thepayment, the remaining outstanding Class C Cardseries notes are at least equal to the requiredsubordinated amount of Class C notes for theoutstanding Class A notes and Class B notes of theCard series less any usage of the requiredsubordinated amount of Class C notes for thoseoutstanding Class A Card series notes and Class BCard series notes.

Similarly, no payment of principal will be made onany Class D Card series notes unless, following thepayment, the remaining outstanding Class D Cardseries notes are at least equal to the requiredsubordinated amount of Class D notes for theoutstanding Class A notes, Class B notes and Class Cnotes of the Card series less any usage of the requiredsubordinated amount of Class D notes for thoseoutstanding Class A notes, Class B notes and Class Cnotes of the Card series. However, there are someexceptions to these rules.

See “The Notes—Required Subordinated Amount andUsage.”

A series, class or tranche of notes may also be paidbefore its expected principal payment date (1) if anearly redemption event occurs for that series, class ortranche of notes, (2) upon an event of default andacceleration for that series, class or tranche of notes,or (3) upon an optional or mandatory redemption forthat series, class or tranche of notes.

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COMET will be obligated to pay the stated principalamount of a series, class or tranche of notes on itsexpected principal payment date or upon theoccurrence of an early redemption event or event ofdefault and acceleration, or upon an optional ormandatory redemption for that series, class or trancheof notes, only to the extent that funds are availablefor that purpose. Additionally, in the case of tranchesof subordinated notes of a multiple tranche series,these payments will be made only to the extent thatpayment is permitted by the subordination provisionsof the senior notes of that series. The remedies anoteholder may exercise following an event ofdefault and acceleration or on its legal maturity dateare described in “The Notes—Events of DefaultRemedies” and “Sources of Funds to Pay the Notes—Sale of Assets.”

If a series, class or tranche of notes is not paid itsstated principal amount on its expected principalpayment date, that series, class or tranche of noteswill receive payments of principal amounts eachmonth until it is paid in full. In this instance, if anoteholder has not been paid the full stated principalamount of its note by its legal maturity date, an eventof default will occur and the assets will be sold, andthe proceeds of that sale will be applied to pay downthe note. See “Sources of Funds to Pay the Notes—Sale of Assets” and “The Notes—Event of DefaultRemedies.” After the legal maturity date, and afterapplying the proceeds of the sale of receivables, thenoteholder will not be entitled to any more paymentson the notes, and the notes will be extinguished.

Revolving Period

Until principal amounts are needed to beaccumulated to pay any series, class or tranche ofnotes, principal amounts allocable to those notes willbe applied to other Card series notes which areaccumulating principal or paid to the transferor. Thisperiod is commonly referred to as the revolvingperiod. Unless an early redemption event or an eventof default and acceleration for any series, class ortranche notes occurs, the revolving period is expectedto end twelve calendar months prior to the expectedprincipal payment date for those notes. However, ifCOMET reasonably expects to need less than twelvemonths to fully accumulate the outstanding dollarprincipal amount of those notes, the end of therevolving period may be delayed. See “Sources of

Funds to Pay the Notes—COMET Trust Accounts”and “Deposit and Application of Funds for CardSeries Notes—Targeted Deposits of Card SeriesPrincipal Amounts to the Principal FundingAccount” for a description of postponing the end ofthe revolving period.

Application of Collections

A general description of the flow of funds, beginningwith payments made by cardholders to the allocationof those payments to the Card series, is outlined inthe chart titled “Flow of Funds” at the end of the“Prospectus Summary.” See “—Card SeriesApplication of Finance Charge Collections” and“—Card Series Application of PrincipalCollections.”

Card Series Application of Finance ChargeCollections

Finance charge collections and other amountsallocated to the Card series, called Card seriesfinance charge amounts, will generally be appliedeach month to make the following payments, depositsor allocations in the following priority:

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The payments of Class A, Class B and Class Cinterest will be made pro rata to the tranches within aclass of notes and will include payments to derivativecounterparties, if any, in a tranche of notes. The Cardseries servicing fee will be an amount equal to 2.00%of the aggregate nominal liquidation amount of eachtranche of Card series notes for any month. See “TheMaster Trust—The Servicer—ServicingCompensation and Payment of Expenses.”

For a detailed description of the application of Cardseries finance charge amounts, see “Deposit andApplication of Funds for Card Series Notes.”

Card Series Application of Principal Collections

Principal collections and other amounts allocated tothe Card series, called Card series principal amounts,will generally be applied each month to make thefollowing payments or deposits in the followingpriority:

If allocations are made to cover senior note interestshortfalls, as described above, those allocations couldreduce the nominal liquidation amounts of thesubordinated notes. See “The Notes—StatedPrincipal Amount, Outstanding Dollar Principal

Amount, Adjusted Outstanding Dollar PrincipalAmount and Nominal Liquidation Amount—NominalLiquidation Amount.” Also, the deposits of Class A,Class B and Class C principal amounts will be madepro rata to the tranches within a class of notes.

For a detailed description of the application of Cardseries principal amounts, see “Deposit andApplication of Funds for Card Series Notes.”

Fees and Expenses Payable from Collections

Card Series Finance Charge Amounts.

Fees and Expenses Payable from Card SeriesFinance Charge Amounts:

- Servicing Fee: 2.00% of nominalliquidation amount paid to the servicer

For any month, the servicing fee is paid immediatelyafter the Class C interest payments or deposits. See“—Card Series Application of Finance ChargeCollections” above. The servicing fee compensatesthe servicer for its expenses in connection withservicing receivables, including expenses associatedwith collection, allocating and distributingcollections on the receivables. See “The MasterTrust—The Servicer—Servicing Compensation andPayment of Expenses.”

Card Series Principal Amounts.

Fees and Expenses Payable from Card SeriesPrincipal Amounts:

- Servicing Fee Shortfalls: any accrued butunpaid servicing fees – paid to the servicer

For any month, servicing fee shortfalls, if any, arepaid immediately after any Class C interest shortfallsare paid. See “—Card Series Application of PrincipalCollections” above.

Limit on Repayment of All Notes

You may not receive full repayment of your notes if:

‰ the nominal liquidation amount of your noteshas been reduced by charge-offs from any

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uncovered default amount or as a result ofreallocations of principal amounts to pay intereston senior classes of notes or any portion of theservicing fee allocable to your series of notes,and those amounts have not been reimbursedfrom finance charge amounts allocated to yourseries of notes; or

‰ collateral certificates or other COMET assetssecuring your notes are sold (i) if required underthe pooling agreement following the bankruptcyor insolvency of the transferor for a relatedmaster trust or securitization special purposeentity, (ii) following an event of default andacceleration of your notes or (iii) on the legalmaturity date of your notes, and the proceedsfrom the sale of those assets, plus any funds ondeposit in the applicable subaccounts allocatedto your notes, and any other amounts availableto your notes, are insufficient to provide the fullrepayment of your notes.

Subordination

Payment of principal of and interest on subordinatedclasses of notes will be subordinated to the paymentof principal of and interest on senior classes of notesexcept to the extent provided in this prospectus andthe related prospectus supplement.

Principal amounts allocable to subordinated classesof notes of a series may be reallocated to pay intereston senior classes of notes of that series or any portionof the servicing fee allocable to that series. Thesereallocations will reduce the nominal liquidationamount of the subordinated classes of notes of thatseries. In addition, the nominal liquidation amount ofa subordinated class of notes of a series willgenerally be reduced for charge-offs resulting fromany uncovered default amount allocated to that seriesprior to any reductions in the nominal liquidationamount of the senior classes of notes of the sameseries. In a multiple tranche series, charge-offs fromany uncovered default amount allocated to that serieswill initially be allocated to each tranche of thatseries and then reallocated to the subordinatedtranches of that series to the extent creditenhancement in the form of subordination is stillavailable to the tranches of senior notes.

In addition, principal amounts allocated to a series ofnotes, after giving effect to any allocations or

reallocations, will first be used to fund targeteddeposits to the principal funding subaccounts ofsenior classes of notes of that series before beingapplied to the principal funding subaccounts of thesubordinated classes of notes of that series.

In a multiple tranche series, a tranche of subordinatednotes that reaches its expected principal paymentdate, or that has an early redemption event, event ofdefault and acceleration, or other optional ormandatory redemption, will not be paid to the extentthat that tranche is necessary to provide the requiredsubordination for tranches of senior notes of thatseries. If a tranche of subordinated notes cannot bepaid because of the subordination provisions of thesenior notes of that series, prefunding of the principalfunding subaccounts for tranches of senior notes ofthat series will begin as described in this prospectusor in the accompanying prospectus supplement. Afterthat time, that tranche of subordinated notes will bepaid only to the extent that:

‰ the principal funding subaccounts for tranchesof senior classes of notes of that series areprefunded in an amount such that the tranche ofsubordinated notes that has reached its expectedprincipal payment date is not necessary toprovide the required subordination; or

‰ new tranches of subordinated notes of that seriesare issued so that the tranche of subordinatednotes of that series that has reached its expectedprincipal payment date is no longer necessary toprovide the required subordination; or

‰ enough tranches of senior notes of that series arerepaid so that the tranche of subordinated notesof that series that has reached its expectedprincipal payment date is no longer necessary toprovide the required subordination; or

‰ that tranche of subordinated notes reaches itslegal maturity date.

On the legal maturity date of a tranche of notes,principal amounts, if any, allocated to that tranche ofnotes, certain funds on deposit in the applicableCOMET trust accounts allocated to that tranche ofnotes and proceeds from any sale of collateralcertificates or receivables directly or indirectlysecuring that tranche of notes will be paid to thenoteholders of that tranche, even if payment would

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reduce the amount of available subordination belowthe required subordination for the senior classes ofnotes of that series.

Early Redemption of Notes

The servicer or an affiliate has the right, but not theobligation, to direct COMET to redeem the notes ofany series, class or tranche before the applicableexpected principal payment date in whole but not inpart on any day on or after the day on which thenominal liquidation amount of that series, class ortranche of notes is reduced to less than 5% of theirhighest outstanding dollar principal amount. Thisredemption option is referred to as a clean-up call.COMET will not redeem subordinated notes if thosenotes are required to provide credit enhancement forsenior classes of notes of the Card series. For adetailed description of the conditions under which aclean-up call may be exercised, see “The Notes—Redemption and Early Redemption of Notes—Optional Redemption.”

In addition, COMET is required to repay any noteupon the occurrence of an early redemption event forthat note, but only to the extent funds are availablefor repayment after giving effect to all allocationsand reallocations and, in the case of subordinatednotes of a multiple tranche series, only to the extentthat payment is permitted by the subordinationprovisions of the senior notes of the same series.

However, if so specified in the related prospectussupplement, subject to certain exceptions, certain notesthat have the benefit of a derivative agreement may notbe redeemed following an early redemption event.

Early redemption events include the following:

‰ for any series, class or tranche of notes, theoccurrence of an event of default andacceleration of the notes of that series, class ortranche;

‰ for any series, class or tranche of notes, theoccurrence of the expected principal paymentdate of such series, class or tranche of notes ifthat series, class or tranche is not fully repaid onor prior to that date;

‰ COMET becoming an “investment company”within the meaning of the Investment CompanyAct of 1940, as amended;

‰ the bankruptcy, insolvency, conservatorship orreceivership of Capital One Funding or therelated transferor;

‰ for any month the average of the excess spreadamounts for the three preceding calendar monthsis less than the required excess spread amountfor such month (see “The Notes—EarlyRedemption Events” for a discussion of therequired excess spread amount); or

‰ for any series, class or tranche of notes, therelated prospectus supplement may includeadditional early redemption events or indicatethat certain of the events listed above are notearly redemption events for that series, class ortranche of notes.

An early redemption event for one series, class ortranche of notes will not necessarily be an earlyredemption event for any other series, class ortranche of notes.

For a more complete description of early redemptionevents, see “The Notes—Redemption and EarlyRedemption of Notes” and “—Early RedemptionEvents.”

Upon the occurrence of an early redemption event forany series, class or tranche of notes, those notes willbe entitled to receive payments of interest andprincipal each month, subject to the conditionsoutlined in “The Notes—Redemption and EarlyRedemption of Notes” and “—Early RedemptionEvents.”

Events of Default

The events of default for the notes are described in“The Notes—Events of Default.” Some events ofdefault result in an automatic acceleration of thenotes of the affected series, class or tranche, andothers result in the right of the indenture trustee orthe holders of the affected series, class or tranche ofnotes to demand acceleration after an affirmativevote by holders of a majority of the aggregateoutstanding dollar principal amount of the notes ofthe affected series, class or tranche.

An event of default for one series, class or tranche ofnotes will not necessarily be an event of default forany other series, class or tranche of notes.

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For a description of the remedies upon an event ofdefault, see “The Notes—Events of DefaultRemedies.”

It is not an event of default if COMET fails toredeem a class or tranche of notes because it does nothave sufficient funds available or if payment of thenote is delayed because that class or tranche isnecessary to provide required subordination for asenior class of notes.

Upon the occurrence of an event of default andacceleration for any series, class or tranche of notes,those notes will be entitled to receive payments ofinterest and principal each month, subject to theconditions outlined in “The Notes—Events ofDefault” and “—Events of Default Remedies.”

Shared Excess Finance Charge Amounts

The Card series notes will be included in “excessfinance charge sharing group A.” In addition to theCard series notes, COMET may issue other series ofnotes that are included in excess finance chargesharing group A.

To the extent that Card series finance charge amountsare available after all required applications of thoseamounts as described in “Deposit and Application ofFunds for Card Series Notes—Application of CardSeries Finance Charge Amounts,” those excess Cardseries finance charge amounts will be applied tocover shortfalls in finance charge amounts for otherseries of notes in excess finance charge sharing groupA and other series of investor certificates issued bythe master trust or other master trust or securitizationspecial purpose entity that has transferred a collateralcertificate to COMET. In addition, the Card seriesnotes may receive the benefits of excess financecharge amounts from other series of notes in excessfinance charge sharing group A, other series of notesoutside of excess finance charge sharing group A,and from other series of investor certificates issuedby the master trust or other master trust orsecuritization special purpose entity that hastransferred a collateral certificate to COMET to theextent finance charge amounts for such other seriesare not needed for those series.

See “Deposit and Application of Funds for CardSeries Notes—Shared Excess Finance Charge

Amounts,” “Sources of Funds to Pay the Notes—General” and “—Deposit and Application of Fundsin COMET.”

Shared Excess Principal Amounts

To the extent that Card series principal amounts areavailable after all required applications of thoseamounts as described in “Deposit and Application ofFunds for Card Series Notes—Application of CardSeries Principal Amounts,” those excess principalamounts will be applied to cover shortfalls inprincipal amounts for other series of notes secured byCOMET’s assets. In addition, the Card series notesmay receive the benefits of excess principal amountsfrom other series of notes secured by COMET’sassets, and other series of investor certificates issuedby master trusts or other securitization specialpurpose entities that have transferred a collateralcertificate to COMET, to the extent the principalamounts for such other series are not needed for suchseries.

See “Deposit and Application of Funds for CardSeries Notes—Shared Excess Principal Amounts,”“Sources of Funds to Pay the Notes— General” and“—Deposit and Application of Funds in COMET.”

Limited Recourse to COMET

The sole source of payment for principal of orinterest on a series, class or tranche of notes isprovided by:

‰ the portion of principal amounts and financecharge amounts received by COMET under thecollateral certificates and receivables securingthat series, class or tranche of notes andavailable to that series, class or tranche of notesafter giving effect to any reallocations,payments and deposits;

‰ funds in the applicable COMET trust accountsfor that series, class or tranche of notes;

‰ payments received under any applicablederivative agreement for that series, class ortranche of notes; and

‰ payments received under any applicablesupplemental credit enhancement agreement orany supplemental liquidity agreement for thatseries, class or tranche of notes.

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A noteholder will have no recourse to any otherassets of COMET or any other person or entity forthe payment of principal of or interest on thatnoteholder’s series, class or tranche of notes.

If there is a sale of assets (i) if required under thepooling agreement following the bankruptcy orinsolvency of the transferor for the related mastertrust or securitization special purpose entity,(ii) following an event of default and acceleration ofa class or tranche of notes, or (iii) on the applicablelegal maturity date for the related class or tranche ofnotes, as described in “Sources of Funds to Pay theNotes—Sale of Assets,” following that sale theaffected noteholders generally will have recourseonly to their allocable share of the proceeds of thatsale, investment earnings on the proceeds of that saleand any funds previously deposited in any applicableissuing entity trust account for those noteholders.

Denominations

The notes offered by this prospectus will be issued indenominations of $100,000 and multiples of $1,000in excess of that amount.

Registration, Clearance and Settlement

The notes offered by this prospectus and the relatedprospectus supplement will be registered in the nameof The Depository Trust Company or its nominee,and purchasers of those notes will not be entitled toreceive physical delivery of those notes in definitivepaper form except under limited circumstances.Owners of those notes may elect to hold their notesthrough The Depository Trust Company in theUnited States or through Clearstream, Luxembourgor the Euroclear system in Europe. Transfers will bemade in accordance with the rules and operatingprocedures of those clearing systems. See “TheNotes—Book-Entry Notes.”

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Risk Factors

The risk factors disclosed in this section and in the accompanying prospectus supplement describe theprincipal risk factors of an investment in the notes. You should consider the following risk factors before youdecide whether or not to purchase the notes.

Some interests could have priority over the master trust trustee’s interest in the receivables or theindenture trustee’s interest in the COMT collateral certificate, which could cause delayed or reducedpayments to you.

Representations and warranties are made that the master trust trustee has a perfected interest in thereceivables and that the indenture trustee has a perfected interest in the COMT collateral certificate. Ifany of these representations and warranties were found not to be true, however, payments to you couldbe delayed or reduced.

In addition, the transaction documents permit liens for municipal and other local taxes to have priorityover the master trust trustee’s perfected interest in the receivables. If any of these tax liens were toarise, you could suffer a loss on your investment.

Furthermore, if the administrative expenses of a conservator or receiver for the bank were found torelate to the receivables, the COMT collateral certificate, or the transaction documents, those expensescould be paid from collections on the receivables before the master trust trustee or the indenture trusteereceives any payments, which could result in losses on your investment.

The master trust trustee and the indenture trustee may not have a perfected interest in collections andinterchange commingled by the servicer with its own funds, which could cause delayed or reducedpayments to you.

The servicer is obligated to deposit collections into the collection account no later than the secondbusiness day after the date of processing for those collections. In the event that conditions specified inthe transaction documents are met, however, the servicer is permitted to hold all collections receivedduring a monthly period and to make only a single deposit of those collections on the followingdistribution date. In addition, the servicer always is permitted to make only a single deposit of allinterchange received during a monthly period on the following distribution date. For further detailsregarding these arrangements, including the conditions that must be met, see “The Master Trust—Application of Collections.”

Prior to depositing collections into the collection account, all collections and interchange that theservicer is permitted to hold are commingled with its other funds and used for its own benefit. See “TheMaster Trust—Master Trust Collection Account.” The master trust trustee and the indenture trusteemay not have a perfected interest in these amounts, and thus payments to you could be delayed orreduced if the servicer were to enter conservatorship or receivership or were to become insolvent.

The conservatorship, receivership, bankruptcy, or insolvency of the bank, Capital One Funding, themaster trust, COMET, or any of their affiliates could result in accelerated, delayed, or reducedpayments to you.

The bank is a Virginia banking corporation, and its deposits are insured by the Federal DepositInsurance Corporation (FDIC). If certain events occur relating to the bank’s financial condition or thepropriety of its actions, the FDIC may be appointed as conservator or receiver for the bank.

Prior to August 1, 2002, the bank treated its transfer of the receivables to the master trust trustee as asale for accounting purposes. From and after August 1, 2002, the bank treats its transfer of the

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receivables to Capital One Funding as a sale. Arguments may be made, however, that any of thesetransfers constitutes only the grant of a security interest under applicable law.

Nevertheless, the FDIC has issued a regulation surrendering certain rights to reclaim, recover, orrecharacterize a financial institution’s transfer of financial assets such as the receivables if:

• the transfer involved a securitization of the financial assets and meets specified conditions fortreatment as a sale under relevant accounting principles;

• the financial institution received adequate consideration for the transfer;

• the parties intended that the transfer constitute a sale for accounting purposes; and

• the financial assets were not transferred fraudulently, in contemplation of the financial institution’sinsolvency, or with the intent to hinder, delay, or defraud the financial institution or its creditors.

The bank’s transfer of the receivables is intended to satisfy all of these conditions.

If a condition required under the FDIC’s regulation were found not to have been met, however, the FDICcould seek to reclaim, recover, or recharacterize the bank’s transfer of the receivables. The FDIC may notbe subject to an express time limit in deciding whether to take these actions, and a delay by the FDIC inmaking a decision could result in losses on your investment. If the FDIC were successful in any of theseactions, moreover, you may not be entitled under applicable law to the full amount of your damages.

Even if the conditions set forth in the regulation were satisfied and the FDIC did not reclaim, recover,or recharacterize the bank’s transfer of the receivables, payments to you could be delayed or reduced ifthe bank entered conservatorship or receivership.

For instance, the FDIC may request a stay of any action to enforce the transaction documents, theCOMT collateral certificate, or the notes. The FDIC also may require that its claims process befollowed before payments on the receivables or the COMT collateral certificate are released. The delaycaused by any of these actions could result in losses to you.

The FDIC, moreover, may have the power to choose whether or not the terms of the transactiondocuments will continue to apply. Thus, regardless of what the transaction documents provide, theFDIC could:

• authorize the bank to stop servicing the receivables or to stop providing administrative services forCapital One Funding or COMET;

• prevent the appointment of a successor servicer or the appointment of a successor administrator forCapital One Funding or COMET;

• alter the terms on which the bank continues to service the receivables or to provide administrativeservices for Capital One Funding or COMET, including the amount or the priority of the fees paidto the bank;

• prevent or limit the commencement of an early amortization period or an early redemption of thenotes, or instead do the opposite and require those to commence;

• prevent or limit the early liquidation of the receivables or the COMT collateral certificate and thetermination of the master trust or COMET, or instead do the opposite and require those to occur; or

• prevent or limit the continued transfer of receivables or continued distributions on the COMTcollateral certificate, or instead do the opposite and require those to continue.

If any of these events were to occur, payments to you could be delayed or reduced. You also may suffera loss if the FDIC were to argue that any term of the transaction documents violates applicableregulatory requirements.

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Capital One Funding is a wholly-owned subsidiary of the bank. Certain banking laws and regulationsmay apply not only to the bank but to its subsidiaries as well. If Capital One Funding were found tohave violated any of these laws or regulations, you could suffer a loss on your investment.

Arguments also may be made that the FDIC’s rights and powers extend to Capital One Funding, themaster trust, and COMET and that, as a consequence, the FDIC could repudiate or otherwise directlyaffect the rights of noteholders under the transaction documents. If the FDIC were to take this position,losses to you could result.

In addition, no assurance can be given that the FDIC would not attempt to exercise control over thereceivables, the COMT collateral certificate, or the other assets of Capital One Funding, the mastertrust, or COMET on an interim or a permanent basis. If this were to occur, payments to you could bedelayed or reduced.

Capital One Funding, the master trust, and COMET have been established so as to minimize the riskthat any of them would become insolvent or enter bankruptcy. Nevertheless, each of them may beeligible to file for bankruptcy, and no assurance can be given that the risk of insolvency or bankruptcyhas been eliminated. If Capital One Funding, the master trust, or COMET were to become insolvent orwere to enter bankruptcy, you could suffer a loss on your investment. Risks also exist that, if CapitalOne Funding, the master trust, or COMET were to enter bankruptcy, any of the others and their assets(including the receivables and the COMT collateral certificate) would be treated as part of thebankruptcy estate.

Regardless of any decision made by the FDIC or ruling made by a court, moreover, the mere fact thatthe bank, Capital One Funding, the master trust, COMET, or any of their affiliates has becomeinsolvent or entered conservatorship, receivership, or bankruptcy could have an adverse effect on thevalue of the receivables and the COMT collateral certificate and on the liquidity and value of the notes.

Regulatory action could result in losses.

The bank is regulated and supervised by the Virginia State Corporation Commission, the Board ofGovernors of the Federal Reserve System, and the FDIC. These regulatory authorities, and possiblyothers, have broad powers of enforcement with respect to the bank and its affiliates.

If any of these regulatory authorities were to conclude that an obligation under the transactiondocuments were an unsafe or unsound practice or violated any law, regulation, written condition, oragreement applicable to the bank or its affiliates, that authority may have the power to order the bankor the related affiliate to rescind the transaction document, to refuse to perform the obligation, toamend the terms of the obligation, or to take any other action determined by that authority to beappropriate. In addition, the bank or the related affiliate probably would not be liable to you forcontractual damages for complying with such an order, and you would be unlikely to have any recourseagainst the regulatory authority. Therefore, if such an order were issued, payments to you could bedelayed or reduced.

In one case of which the bank is aware, the regulatory authority ordered the financial institution toimmediately resign as servicer and to cease performing its duties as servicer within approximately 120days, to immediately withhold and segregate funds from collections for payment of its servicing fee(notwithstanding the priority of payments in the securitization documents and the perfected securityinterest of the relevant trust in those funds), and to increase its servicing fee percentage above thatwhich was specified in the securitization documents.

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Certain events affecting or involving other parties to the transactions could result in accelerated,delayed, or reduced payments to you.

Funds to make payments on the notes may be supplied by derivative counterparties, supplementalenhancement providers, and supplemental liquidity providers. If any of these parties were to enterconservatorship, receivership, or bankruptcy or were to become insolvent, payments to you could beaccelerated, delayed, or reduced.

In addition, arrangements have been made for the savings bank to transfer receivables to Capital OneFunding, which then would transfer those receivables to the master trust trustee. To date, the savingsbank has not transferred receivables to Capital One Funding and does not currently expect to do so.However, no assurance can be given that this expectation will not change or that the parties will noteffect these transfers of receivables. If this were to occur, risks relating to the conservatorship,receivership or insolvency of the savings bank, the commingling of funds by the savings bank orregulatory action with respect to the savings bank similar to those identified in previous Risk Factorswith respect to the bank would exist with respect to the savings bank, these transfers, and the mastertrust trustee’s interest in these receivables, and payments to you could be accelerated, delayed, orreduced for similar reasons.

Changes to consumer protection laws may impede collection efforts or alter timing and amount ofcollections, which may result in acceleration of or reduction in payment on your notes.

Credit card receivables that do not comply with consumer protection laws may not be valid orenforceable under their terms against the obligors of those credit card receivables.

Federal and state consumer protection laws regulate the creation and enforcement of consumer loans,including credit card receivables. The United States Congress and the states could further regulate thecredit card and consumer credit industry in ways that make it more difficult for the servicer to collectpayments on the receivables or that reduce the finance charges and other fees that the banks or theiraffiliates can charge on revolving credit card account balances, resulting in reduced collections. Forexample, if the banks or their affiliates were required to reduce their finance charges and other fees,resulting in a corresponding decrease in the effective yield of revolving credit card accounts, a pay outevent or an early redemption event could occur and could result in an acceleration of payment orreduced payments on your notes. See “The Master Trust—Pay Out Events,” “The Notes—EarlyRedemption Events” and “Certain Legal Aspects of the Receivables—Consumer Protection Laws.”

Each of the banks and their affiliates make representations and warranties about its compliance withlegal requirements. Each bank also makes certain representations and warranties in the receivablespurchase agreements about the validity and enforceability of the accounts and the receivables.However, neither the master trust trustee nor the indenture trustee will examine the receivables or therecords about the receivables for the purpose of establishing the presence or absence of defects,compliance with such representations and warranties, or for any other purpose. If any suchrepresentation or warranty is breached, the only remedy is that the applicable transferor or the servicermust accept the transfer and reassignment of the receivables affected by the breach.

Changes to federal or state bankruptcy or debtor relief laws may impede collection efforts or altertiming and amount of collections, which may result in acceleration of or reduction in payment on yournotes.

If a cardholder sought protection under federal or state bankruptcy or debtor relief laws, a court couldreduce or discharge completely the cardholder’s obligations to repay amounts due on its revolvingcredit card account. As a result, the related credit card receivables arising in that credit card account

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would be written off as uncollectible. You could suffer a loss if no funds are available from creditenhancement or other sources and finance charge amounts allocated to the notes are insufficient tocover the applicable default amount. See “The Master Trust—Defaulted Receivables; Rebates andFraudulent Charges; Recoveries.”

Competition in the credit card industry may result in a decline in ability to generate new receivables.This may result in reduced payment of principal or receipt of principal earlier or later than expected.

The credit card industry is highly competitive. As new credit card companies enter the market andcompanies try to expand their market share, effective advertising, target marketing and pricingstrategies grow in importance. The banks’ ability to compete in this environment will affect theirability to generate new receivables and might also affect payment patterns on the receivables. If therate at which the banks generate new receivables declines significantly, the banks may become unableto transfer additional receivables or designate additional credit card accounts to Capital One Fundingand a pay out event for the COMT collateral certificate or an early redemption event for your notescould occur, resulting in payment of principal sooner than expected or in reduced amounts. If the rate atwhich the banks generate new receivables decreases significantly at a time when noteholders arescheduled to receive principal, noteholders might receive principal more slowly than planned or inreduced amounts.

Variations in cardholder payment patterns may result in reduced payment of principal or receipt ofpayment of principal earlier or later than expected.

Principal amounts available to your notes on any principal payment date or available to make depositsinto an issuing entity trust account when required will depend on many factors, including:

• the rate of repayment of credit card balances by cardholders, which may be slower or faster thanexpected, may cause payment on the notes to be earlier or later than expected;

• the extent to which cardholders use their cards, and the creation of additional credit cardreceivables; and

• the rate of default by cardholders.

Changes in payment patterns and credit card usage result from a variety of economic, competitive,social and legal factors. Economic factors include the rate of inflation, unemployment levels andrelative interest rates. Incentive or other award programs may also affect cardholders’ actions. Socialfactors include consumer confidence levels and the public’s attitude about the use of credit cards andincurring debt and the consequences of personal bankruptcy. Moreover, adverse changes in economicconditions in states where cardholders are located, terrorist acts against the United States or othernations, the commencement of hostilities between the United States and a foreign nation or nations ornatural disasters could have a direct impact on the timing and amount of payments on your notes. Wecannot predict how these or other factors will affect repayment patterns or card use and, consequently,the timing and amount of payments on your notes. Any reductions in the amount or timing of interestor principal payments will reduce the amount available for distribution on the notes.

Allocations of default amounts on principal receivables and reallocation of principal amounts couldresult in a reduction in payment on your notes.

The bank, as master trust servicer, or any other servicer of assets or receivables related to or in themaster trust, will write off the principal receivables arising in accounts in the related portfolio if theprincipal receivables become uncollectible. Notes will be allocated a portion of these default amountson principal receivables for collateral certificates and receivables included in the assets securing the

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notes. In addition, principal amounts otherwise allocable to subordinated notes may be reallocated topay interest on senior classes of notes or to pay a portion of the servicing fee allocated to your series ofnotes. You may not receive full repayment of your notes and full payment of interest due if the nominalliquidation amount of your notes has been reduced by charge-offs resulting from any uncovered defaultamount on principal receivables allocated to your notes or as the result of reallocations of principalamounts to pay interest or a portion of the servicing fee allocable to your series of notes, and thoseamounts have not been reimbursed from subsequently received finance charge amounts. For adiscussion of nominal liquidation amount, see “The Notes—Stated Principal Amount, OutstandingDollar Principal Amount, Adjusted Outstanding Dollar Principal Amount and Nominal LiquidationAmount.”

The note interest rate and the receivables interest rates may re-set at different times or fluctuatedifferently, resulting in a delay or reduction in payments on your notes.

Credit card accounts will have finance charges set at either a variable rate based on a designated index(for example, the prime rate) or a fixed rate. A series, class or tranche of notes may bear interest eitherat a fixed rate or at a floating rate based on either the same index as some or all of the accounts or adifferent index. If the rate charged on variable credit card accounts declines, collections of financecharge receivables allocated to the collateral certificate may be reduced without a correspondingreduction in the amounts payable as interest on the notes and other amounts paid from collections offinance charge receivables allocated to that series, class or tranche of notes. In addition, if the rate ofinterest for a series, class or tranche of notes increases and there is not a corresponding increase in therate charged on the credit card accounts, collections of finance charge receivables allocated to thecollateral certificate may not increase enough to pay interest on the notes. This could result in delayedor reduced principal and interest payments to you.

Issuance of additional notes may affect your voting rights and the timing and amount of payments toyou.

COMET expects to issue notes from time to time. COMET may also “reopen” or later issue additionalnotes in your tranche of Card series notes. New notes may be issued without notice to existingnoteholders, and without your or their consent, and may have different terms from outstanding notes.For a description of the conditions that must be satisfied before COMET can issue new notes, see “TheNotes—Issuances of New Series, Classes and Tranches of Notes.”

The issuance of new notes could adversely affect the timing and amount of payments on outstandingnotes. For example, for a multiple tranche series, if notes in your series issued after your notes have ahigher interest rate than your notes, finance charge amounts available to pay interest on your notescould be reduced. Also, when new notes are issued, the voting rights of your notes will be diluted. See“—You may have limited or no ability to control actions under the indenture and a master trustpooling agreement. This may result in, among other things, payment of principal being acceleratedwhen it is beneficial to you to receive payment of principal on the expected principal payment date, orit may result in payment of principal not being accelerated when it is beneficial to you to receive earlypayment of principal.”

Issuance of additional master trust investor certificates may affect your voting rights and the timingand amount of payments to you.

The master trust may issue new investor certificates from time to time. New master trust investorcertificates may be issued without notice to existing noteholders, and without your or their consent, andmay have different terms from outstanding master trust investor certificates. For a description of the

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conditions that must be satisfied before the master trust can issue new investor certificates, see “TheMaster Trust—New Issuances.”

The issuance of additional master trust investor certificates, including collateral certificates, could alsoadversely affect the timing and amount of payments on outstanding notes. When new master trustinvestor certificates, including collateral certificates, are issued, the voting rights of your notes will bediluted. See “—You may have limited or no ability to control actions under the indenture and a mastertrust pooling agreement. This may result in, among other things, payment of principal beingaccelerated when it is beneficial to you to receive payment of principal on the expected principalpayment date, or it may result in payment of principal not being accelerated when it is beneficial to youto receive early payment of principal.”

The composition of the assets securing your notes may change, which may decrease the credit qualityof the assets securing your notes. If this occurs, your receipt of payments of principal and interest maybe reduced, delayed or accelerated.

Initially, the primary asset in COMET will be the COMT collateral certificate. At any time anothercollateral certificate may be added to COMET. We cannot guarantee that new assets will be of the samecredit quality as the COMT collateral certificate. At all times, COMET’s assets will consist only ofcollateral certificates backed by credit card receivables. The credit card receivables in the master trust willbe generated by revolving credit card accounts owned by the bank, the savings bank or an affiliate.

The bank, the savings bank or their affiliates, may choose, or may be required, to transfer additionalassets to COMET. In addition, if an additional collateral certificate were added to COMET, principalamounts and other amounts treated as principal amounts received on that collateral certificate notallocated to noteholders and not required to be deposited to a principal funding account or applicableprincipal funding subaccount for the benefit of a series, class or tranche of notes or used to pay intereston senior notes or the portion of the servicing fee allocated to that series, need not be reinvested in thatcollateral certificate, but instead may be (1) invested or reinvested in another collateral certificateincluded or to be included in COMET or (2) paid to the transferor or transferors. The invested amountof an existing collateral certificate included in COMET, such as the COMT collateral certificate, mayalso be increased and additional collateral certificates may be transferred to COMET without thepayment of cash. New assets included in COMET, either through a designation for inclusion of assetsor the reinvestment of principal amounts and other amounts treated as principal amounts, may havecharacteristics, terms and conditions that are different from those of the COMT collateral certificateand may be of different credit quality due to differences in underwriting criteria and payment terms.

The occurrence of a pay out event for a collateral certificate will result in the early amortization of thatcollateral certificate. The occurrence of such pay out event or early amortization of that collateral certificatemay cause an early redemption of all the notes, even if COMET has another collateral certificate.

The applicable transferor or transferors, on behalf of COMET, will direct the reinvestment ofcollections on the assets included in COMET over time. Reinvestment may result in increases ordecreases in the relative amounts of different types of assets included in COMET. In addition, there isno obligation on the part of a master trust or other securitization special purpose entity that hastransferred a collateral certificate to COMET to increase the invested amount of that collateralcertificate. If the credit quality of COMET’s assets were to deteriorate, your receipt of principal andinterest payments may be reduced, delayed or accelerated. See “Sources of Funds to Pay the Notes.”

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Addition of credit card receivables to the master trusts or other securitization special purpose entitiesor COMET may decrease the credit quality of the assets securing the repayment of your notes. If thisoccurs, your receipt of payments of principal and interest may be reduced, delayed or accelerated.

The assets of a master trust or other securitization special purpose entity, and therefore, the assetsallocated to certain collateral certificates held by COMET, may change each day. The bank, the savingsbank or an affiliate may choose, or may be required, to transfer additional receivables to a master trustor securitization special purpose entity. The accounts from which those additional receivables arisemay have terms and conditions that are different from the terms and conditions that apply to theaccounts whose receivables are already included in that master trust or securitization special purposeentity. For example, the new accounts may have higher or lower fees or interest rates, or differentpayment terms. In addition, the bank, the savings bank or an affiliate, may transfer the receivables inaccounts purchased by the bank, the savings bank or the affiliate to a master trust if certain conditionsare satisfied. Those accounts purchased by the bank, the savings bank or the affiliate will have beenoriginated using the account originator’s underwriting criteria, not those of the bank, the savings bankor the affiliate. That account originator’s underwriting criteria may be different than those of the bank,the savings bank or the affiliate. Also, the bank, the savings bank or an affiliate may transfer to amaster trust or securitization special purpose entity receivables that arise in accounts that may havebeen originated by the bank, the savings bank or an affiliate using different credit criteria from thecriteria applied by the bank, the savings bank or an affiliate for the accounts whose receivables arecurrently transferred to that master trust or securitization special purpose entity. We cannot guaranteethat new accounts will be of the same credit quality as or have performance characteristics similar tothe accounts currently or historically designated to have their receivables transferred to a master trustor securitization special purpose entity. If the credit quality or performance of the receivablestransferred to a master trust or securitization special purpose entity were to deteriorate and a collateralcertificate issued by that master trust or securitization special purpose entity were included in the assetssecuring your notes, or if the credit quality of receivables transferred to COMET were to deteriorate,your receipt of principal and interest payments may be reduced, delayed or accelerated. See “TheMaster Trust—Addition of Master Trust Assets” and “Sources of Funds to Pay the Notes—General—Addition of Assets.”

You will not be notified of, nor will you have any right to consent to, the addition of any receivables inadditional accounts to the master trust or any other applicable securitization special purpose entity, orthe addition of any additional collateral certificates to COMET.

The banks and their affiliates may not be able to generate new receivables or designate new accountsor maintain or increase the size of a collateral certificate when required. This inability could result inan acceleration of or reduction in payments on your notes.

COMET’s ability to make payments on the notes will be impaired if sufficient new receivables are notgenerated by the bank, the savings bank or their affiliates. Because of regulatory restrictions or forother reasons, the bank, the savings bank or their affiliates may be prevented from generating sufficientnew receivables, or may be prevented from designating new accounts, to add to a master trust orsecuritization special purpose entity or to COMET. None of the bank, the savings bank or theiraffiliates guarantee that new receivables will be created, that any receivables will be transferred to amaster trust or securitization special purpose entity, that the size of the collateral certificates transferredto COMET will be maintained or that receivables will be repaid at a particular time or with a particularpattern.

The pooling agreement provides that the transferor must transfer additional receivables to the mastertrust if the total amount of principal receivables in the master trust falls below the master trust requiredprincipal balance or if the master trust transferor interest falls below the master trust required transferorinterest. There is no guarantee that the transferor will have enough receivables to transfer to the master

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trust. If the transferor does not make an addition of receivables to the master trust when it is required todo so by the pooling agreement, a pay out event will occur for the COMT collateral certificate, whichcould result in an acceleration of or a reduction in payments on your notes. See “The Master Trust—Addition of Master Trust Assets,” “—Pay Out Events” and “The Notes—Early Redemption Events.”

The banks offer accounts with introductory rates, which are generally at low levels during an initialperiod and which generally rise to higher rates after the initial period expires. Accounts having thisintroductory rate feature are subject to a significant risk of attrition when the introductory rate expiresbecause accountholders that were initially attracted by the low introductory rates may decide to transferaccount balances to other credit card accounts having a lower periodic rate. Although the banks havedeveloped methodologies to retain these accounts after expiration of the initial period, there can be noassurance that attrition in these accounts will not be significant.

The banks or their affiliates may change the terms of the accounts in a way that reduces or slowscollections. These changes may result in reduced, accelerated or delayed payments to you.

As owners of the accounts, the banks and their affiliates retain the right to change various terms andconditions of those accounts, including finance charges and other fees they charge and the requiredminimum monthly payment. A pay out event for a collateral certificate or early redemption event forthe notes could occur if the banks or their affiliates decreased the finance charges or fees they chargeand that reduction resulted in a material decrease in the yield on the receivables arising in thoseaccounts. In addition, the banks or their affiliates may change the terms of those accounts to maintaintheir competitive positions in the industry. Changes in the terms of those accounts may reduce (1) theamount of receivables arising under those accounts, (2) the amount of collections on those receivables,(3) the size of a collateral certificate issued by a master trust or securitization special purpose entity towhich those accounts have been designated to have their receivables transferred or (4) the amount ofcollections allocated to a collateral certificate. If payment rates decrease significantly at a time whenyou are scheduled to receive payments of principal, you might receive principal more slowly thanexpected.

Unless required to do so by applicable law, the banks and their affiliates may not change the terms ofthe accounts designated to have their receivables transferred to a master trust or securitization specialpurpose entity or its policies relating to the operation of their credit card businesses, including thereduction of the required minimum monthly payment and the calculation of the amount or the timing offinance charges, other fees and charge-offs, unless the related bank or affiliate reasonably believes sucha change would not cause a pay out event to occur for the related collateral certificates or an earlyredemption event to occur for the notes, and the related bank or affiliate takes the same action on itsother substantially similar revolving credit card accounts, to the extent permitted by those credit cardaccounts.

The banks and their affiliates have no restrictions on their ability to change the terms of the accountsexcept as described above or in the accompanying prospectus supplement. Changes in relevant law,changes in the marketplace or prudent business practices could cause the banks or their affiliates tochange account terms.

If representations and warranties relating to the master trust receivables are breached, payments onyour notes may be reduced.

The transferor makes representations and warranties relating to the validity and enforceability of thereceivables arising under the credit card accounts in the master trust portfolio, and as to the perfectionand priority of the master trust trustee’s interests in the receivables. The transferor will make similarrepresentations and warranties to the extent that receivables are included as assets of COMET. Prior to

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the substitution date, the bank made similar representations and warranties regarding the receivablesthat were transferred by the bank to the master trust. However, the master trust trustee does not and theindenture trustee will not examine the receivables or the related assets for the purpose of determiningthe presence of defects, compliance with the representations and warranties or for any other purpose.

If a representation or warranty relating to the receivables in the master trust portfolio is violated, therelated obligors may have defenses to payment or offset rights, or creditors of the transferor may claimrights to the master trust assets, or to the extent receivables are included as assets of COMET, to theassets of COMET. If a representation or warranty is violated, the transferor, or the bank with respect toreceivables transferred to the master trust prior to the substitution date, may have an opportunity tocure the violation. If it is unable to cure the violation, subject to certain conditions described under“The Master Trust—Representations and Warranties,” the transferor, or the bank with respect toreceivables transferred to the master trust prior to the substitution date, must accept reassignment ofeach receivable affected by the violation. These reassignments are the only remedy for breaches ofrepresentations and warranties, even if your damages exceed your share of the reassignment price. See“The Master Trust—Representations and Warranties.”

There is no public market for the notes. As a result you may be unable to sell your notes or the priceof the notes may suffer.

The underwriters of the notes may assist in resales of the notes but they are not required to do so. Asecondary market for any notes may not develop. If a secondary market does develop, it might notcontinue or it might not be sufficiently liquid to allow you to resell any of your notes.

In addition, some notes may have a more limited trading market and experience more price volatility.There may be a limited number of buyers when you decide to sell your notes. This may affect the priceyou receive for the notes or your ability to sell the notes. You should not purchase notes unless youunderstand and know you can bear the investment risks.

You may not be able to reinvest any early redemption proceeds from an optional or mandatoryredemption in a comparable security.

The servicer or any affiliate of the servicer, has the right, but not the obligation to direct COMET toredeem the notes of any series, class or tranche before its expected principal payment date at any timewhen the aggregate nominal liquidation amount of that series, class or tranche is less than 5% of thehighest outstanding dollar principal amount at any time of that series, class or tranche. See “TheNotes—Redemption and Early Redemption of Notes—Optional Redemption” in this prospectus. Inaddition, the occurrence of certain early redemption events or events of default and acceleration mayrequire repayment of a series, class or tranche of notes prior to the expected principal payment date forcertain notes. See “The Notes—Redemption and Early Redemption of Notes—Early RedemptionEvents” and “—Events of Default” in this prospectus. If your notes are redeemed at a time whenprevailing interest rates are relatively low, you may not be able to reinvest the redemption proceeds in acomparable security with an effective interest rate equivalent to that of your notes.

The market value of the notes could decrease if the ratings of the notes are lowered or withdrawn.

The initial rating of a series, class or tranche of notes addresses the likelihood of the payment ofinterest on that series, class or tranche of notes when due and the ultimate payment of principal of thatnote by its legal maturity date. The ratings do not address the likelihood of payment of principal of thatseries, class or tranche of notes on its expected principal payment date. In addition, the ratings do notaddress the following:

• the likelihood that principal or interest on your notes will be prepaid, paid on the expected principalpayment date, or paid on any particular date before the legal maturity date of your notes;

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• the possibility that your notes will be paid early or the possibility of the imposition of United Stateswithholding tax for non-U.S. noteholders (see “The Notes—Early Redemption Events” and“—Events of Default”);

• the marketability of the notes or any market price; or

• that an investment in the notes is a suitable investment for you.

The ratings of a series, class or tranche of notes are not a recommendation to buy, hold or sell thatseries, class or tranche of notes. Any rating may be lowered or withdrawn entirely at any time by arating agency without notice from the bank, Capital One Funding or COMET to noteholders of suchchange in rating. The market value of that series, class or tranche of notes is likely to decrease if one ormore of the ratings are lowered or withdrawn.

You may have limited or no ability to control actions under the indenture and a master trust poolingagreement. This may result in, among other things, payment of principal being accelerated when it isbeneficial to you to receive payment of principal on the expected principal payment date, or it mayresult in payment of principal not being accelerated when it is beneficial to you to receive earlypayment of principal.

Under the indenture (and any supplement thereto), some actions require the consent of noteholdersholding a specified percentage of the aggregate outstanding dollar principal amount of notes of a series,class or tranche or all the notes. These actions include consenting to amendments relating to thecollateral certificates securing the notes. In the case of votes by series or votes by holders of all of thenotes, the outstanding dollar principal amount of the senior-most class of notes will generally besubstantially greater than the outstanding dollar principal amount of the subordinated classes of notes.Consequently, the noteholders of the senior-most class of notes will generally have the ability todetermine whether and what actions should be taken. The subordinated noteholders will generally needthe concurrence of the senior-most noteholders to cause actions to be taken.

The COMT collateral certificate and each subsequently acquired collateral certificate will be aninvestor certificate under the applicable trust agreement or pooling agreement, and noteholders willhave indirect consent rights under such trust agreement or pooling agreement. See “The Indenture—Voting.” Generally, under a trust agreement or pooling agreement, some actions require the vote of aspecified percentage of the aggregate principal amount of all of the investor certificates. These actionsinclude consenting to amendments to the applicable trust agreement or pooling agreement. In the caseof votes by holders of all of the investor certificates, the outstanding principal amount of the collateralcertificate is and may continue to be substantially smaller than the outstanding principal amount of theother series of investor certificates issued by the related master trust or securitization special purposeentity. Consequently, the holders of investor certificates—other than the related collateral certificate—will generally have the ability to determine whether and what actions should be taken. The noteholders,in exercising their voting powers under the related collateral certificate, will generally need theconcurrence of the holders of the other investor certificates to cause action to be taken. In addition, forthe purposes of any vote to liquidate the assets in a master trust or securitization special purpose entity,the noteholders will be deemed to have voted against any such liquidation.

If an event of default occurs, your remedy options may be limited and you may not receive fullpayment of principal and accrued interest.

Your remedies may be limited if an event of default affecting your series, class or tranche of notesoccurs. After an event of default affecting your series, class or tranche of notes and an acceleration ofyour notes, any funds in an issuing entity trust account for that series, class or tranche of notes will beapplied to pay principal of and interest on that series, class or tranche of notes. Then, in each followingmonth, principal amounts and finance charge amounts will be deposited into the applicable COMET

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trust accounts and applied to make monthly principal and interest payments on that series, class ortranche of notes until the legal maturity date of that series, class or tranche of notes.

However, prior to the legal maturity date of your notes, if your notes are subordinated notes of amultiple tranche series, you generally will receive payment of principal of such notes only if and to theextent that, after giving effect to that payment, the required subordination will be maintained for thesenior classes of notes in that series.

Following an event of default and acceleration, holders of the affected notes will have the ability todirect a sale of the assets only under the limited circumstances as described in “The Notes—Events ofDefault” and “Sources of Funds to Pay the Notes—Sale of Assets.”

However, following an event of default and acceleration for subordinated notes of a multiple trancheseries, if the indenture trustee or a majority of the outstanding dollar principal amount of the notes of theaffected class or tranche direct the sale of a portion of the assets, the sale will occur only if, after givingeffect to that payment, the required subordination will be maintained for the senior notes in that series bythe remaining notes or if such sale occurs on the legal maturity date. If principal of or interest on a trancheof notes has not been paid in full on its legal maturity date, the sale will automatically take place on thatlegal maturity date regardless of the subordination requirements of any senior classes of notes.

Only some of the assets of COMET are available for payments on any tranche of notes.

The sole sources of payment for principal of and interest on your tranche of notes are provided by:

• the portion of the principal amounts and finance charge amounts allocated to the Card seriesavailable to your tranche of notes after giving effect to any reallocations, payments anddeposits for senior notes;

• funds in the applicable COMET trust accounts for your tranche of notes; and

• payments received under any applicable derivative agreement, supplemental creditenhancement agreement or supplemental liquidity agreement for your tranche of notes.

As a result, you must rely only on the particular allocated assets as security for your tranche of notesfor repayment of the principal of and interest on your notes. You will not have recourse to any otherassets of COMET or any other person or entity for payment of your notes. See “Sources of Funds toPay the Notes.”

In addition, if there is a sale of assets (i) if required under the pooling agreement following the bankruptcyor insolvency of Capital One Funding or any other transferor, (ii) following an event of default andacceleration of, a tranche of Card series notes or (iii) on the legal maturity date of, a tranche of Card seriesnotes, as described in “Deposit and Application of Funds in Card Series Notes—Sale of Assets” and“Sources of Funds to Pay the Notes—Sale of Assets,” a tranche of Card series notes has recourse only toits share of the proceeds of that sale allocated to its tranche and any amounts then on deposit in theCOMET trust accounts allocated to and held for the benefit of that tranche of Card series notes.

Class A notes, Class B notes or Class C notes of the Card series can lose their subordination undersome circumstances, resulting in delayed or reduced payments to you.

Subordinated notes of the Card series may have expected principal payment dates and legal maturitydates earlier than some or all of the notes of the senior classes.

If notes of a subordinated class reach their expected principal payment date at a time when they areneeded to provide the required subordination for the senior classes of the Card series and COMET isunable to issue additional notes of that subordinated class or obtain acceptable alternative forms ofcredit enhancement, prefunding of the senior classes will begin and such subordinated notes will not be

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paid on their expected principal payment date. The principal funding subaccounts for the senior classeswill be prefunded with principal amounts allocated to the Card series in an amount necessary to permitthe payment of those subordinated notes while maintaining the required subordination for the seniorclasses. See “Deposit and Application of Funds for Card Series Notes—Targeted Deposits of CardSeries Principal Amounts to the Principal Funding Account.”

Notes of a subordinated class that have reached their expected principal payment date will not be paiduntil the remaining subordinated notes provide the required subordination for the senior notes, whichpayment may be delayed further as other subordinated notes reach their expected principal paymentdate. The subordinated notes will be paid on their legal maturity date, to the extent that any funds areavailable for that purpose from proceeds of the sale of assets or otherwise allocable to the subordinatednotes, whether or not the senior classes of notes have been fully prefunded.

If the rate of repayment of principal receivables in the master trust or in any other master trust orsecuritization special purpose entity that has transferred a collateral certificate to COMET were todecline during this prefunding period, the principal funding subaccounts for the senior classes of notesmay not be fully prefunded before the legal maturity date of the subordinated notes. In that event, andonly to the extent not fully prefunded, the senior classes would not have the required subordinationbeginning on the legal maturity date of those subordinated notes. This will not be cured until additionalsubordinated notes of that class are issued or a sufficient amount of senior notes have matured so thatthe remaining outstanding subordinated notes provide the necessary subordination.

The table under “The Master Trust Portfolio—Payment Rates” in Annex I of the accompanyingprospectus supplement shows the highest and lowest cardholder monthly payment rates for the mastertrust portfolio during the periods shown in that table. Payment rates may change due to a variety offactors including economic, social and legal factors, changes in the terms of credit card accounts by theoriginator of the receivables or the addition of credit card accounts to the master trust or any othermaster trust or securitization special purpose entity that has transferred a collateral certificate toCOMET with different characteristics. There can be no assurance that the rate of repayment willremain in this range in the future.

Yield and payments on the receivables could decrease, resulting in an early redemption event andreceipt of principal payments earlier than the expected principal payment date.

There is no assurance that the stated principal amount of your notes will be paid on their expectedprincipal payment date.

A significant decrease in the amount of receivables in the master trust or any other master trust orsecuritization special purpose entity that has transferred a collateral certificate to COMET for anyreason could result in an early redemption event and early payment of your notes, as well as decreasedprotection to you against defaults on the credit card receivables. In addition, the effective yield on thereceivables in the master trust or any other master trust or securitization special purpose entity that hastransferred a collateral certificate to COMET could decrease due to, among other things, a change inperiodic finance charges on the accounts, an increase in the level of delinquencies, or an increase inconvenience use of cards, whereby cardholders pay their balance in full each month and incur nofinance charges. This could reduce the amount of finance charge amounts and the excess spreadamount. If the average excess spread amount for any three consecutive calendar months is less than therequired excess spread amount for such three months, an early redemption event will occur and couldresult in an early payment of your notes. See “The Notes—Early Redemption Events.”

Even if a sale of assets is permitted, we can give no assurance that the proceeds of the sale will beenough to pay unpaid principal of and interest on the accelerated notes.

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Glossary

This prospectus uses defined terms. You can find a listing of defined terms in the “Glossary of DefinedTerms” beginning on page 149 of this prospectus. Some of the defined terms may be modified as described in therelated prospectus supplement.

Structure Overview

This section provides a brief overview of the structure described in the chart titled “General Summary ofOperating Documents, Parties and Transferred Assets” on the previous page, from the originators of thereceivables through the issuance of the Card series notes. This structural overview does not contain all theinformation you need to make an informed investment decision. You should read this prospectus andaccompanying prospectus supplement in their entirety before you purchase any notes.

Originators of Receivables. Capital One Bank and Capital One, F.S.B. are the owners of certain credit cardaccounts which give rise to receivables. As the originators of the receivables, the bank transfers receivables to thetransferor, Capital One Funding, under a receivables purchase agreement between the bank and the transferor.The savings bank has entered into a receivables purchase agreement with the transferor, but, to date, has nottransferred any receivables to the transferor.

Capital One Master Trust. After it receives the receivables from the banks, Capital One Funding thentransfers those receivables to the master trust under the pooling and servicing agreement. Capital One Bankservices the receivables in the master trust, and The Bank of New York is the trustee for the master trust.

COMT Collateral Certificate. Pursuant to the pooling and servicing agreement, as supplemented by theSeries 2002-CC supplement, the master trust has issued the COMT collateral certificate which represents anundivided interest in the receivables in the master trust.

Capital One Multi-asset Execution Trust. COMET, a Delaware statutory trust, was created pursuant to atrust agreement between Capital One Funding, as beneficiary of COMET, and Deutsche Bank Trust CompanyDelaware, as owner trustee of COMET. Currently, the primary asset of COMET is the COMT collateralcertificate. The COMT collateral certificate was transferred by Capital One Funding to COMET under thetransfer and administration agreement. Pursuant to an indenture, as supplemented by an asset pool supplement,each between COMET and The Bank of New York, as indenture trustee, COMET may issue series of notessecured by the COMT collateral certificate or another collateral certificate that may be added to COMET in thefuture.

Card Series Notes. Pursuant to the Card series indenture supplement to the indenture, COMET will issueCard series notes that are secured by the COMT collateral certificate. Each issuance of notes will be included in adesignated class of the Card series. The class designations – such as Class A, Class B, Class C or Class D –denote, among other things, a class’s relative priority for payments of interest and principal within the Cardseries. Notes may be issued as part of a designated tranche of a class of Card series notes. Each tranche of Cardseries notes may have a different maturity date than the other tranches of notes within the same class of Cardseries notes. Each tranche of Card series notes will be issued pursuant to a terms document, which supplementsthe Card series indenture supplement.

Use of Proceeds

The net proceeds from the sale of each series, class and tranche of notes will be received by COMET andpaid to the transferor and used by the transferor to increase the Invested Amount of a collateral certificate,

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purchase additional receivables from the bank, the savings bank or their affiliates and for the general purposes ofthe transferor, including the repayment to the banks of amounts borrowed by the transferor to purchasereceivables from the banks.

The BanksCapital One Bank

Capital One Bank is a Virginia state chartered banking corporation. It is a subsidiary of Capital OneFinancial Corporation (the “Corporation”) and a member of the Federal Reserve System and its deposits areinsured up to applicable limits by the FDIC.

In 2004, the bank amended its Virginia charter which removes restrictions on its activities and thereforepermits the bank to engage in a full range of lending, deposit-taking and other activities permissible underVirginia and federal banking laws and regulations. The bank currently offers credit card products and takes retaildeposits. Consistent with its charter, the bank also can engage in a wide variety of lending and other financialactivities.

Prior to November 22, 1994, the bank conducted its operations as a division of Signet Bank/Virginia, awholly-owned subsidiary of Signet Banking Corporation. Its main office is currently located at 4851 Cox Road,Glen Allen, Virginia 23060. The bank’s telephone number is (703) 720-1000. For a description of the bank’scredit card portfolio, see “The Capital One Credit Card Portfolio” in “Annex I” of the related prospectussupplement.

The bank (through its predecessor) is one of the oldest continually operating bank card issuers in the UnitedStates, having commenced operations in 1953, the same year as the formation of what is now MasterCard.

The master trust was created by Signet Bank in 1993 as Signet Master Trust. See “The Master Trust.” Thebank is the sponsor of the issuing entity and the servicer of the assets included in the master trust. In addition tosponsoring the securitization of the consumer credit card receivables in the master trust, the bank or its affiliatesis the sponsor of securitizations of other credit card receivables, including receivables generated by smallbusiness credit card and international credit card accounts, and other consumer lending products, includinginstallment loans, installment sales contracts and loans for automobiles, light-duty trucks and motorcycles.

Capital One, F.S.B.

Capital One, F.S.B. is a federal savings bank. It is a subsidiary of the Corporation and a member of theFederal Home Loan Bank System, the deposits of which are insured up to applicable limits by the FDIC. Thesavings bank was established in June 1996, and currently takes deposits and offers a variety of credit card andlending products and services to existing cardholders and other households.

Capital One Financial Corporation

Capital One Financial Corporation is a holding company, incorporated in Delaware on July 21, 1994, whosesubsidiaries market a variety of consumer financial products and services. In 2004, the Corporation became abank holding company. On April 28, 2005, the Corporation filed a declaration with the Federal Reserve Bank ofRichmond electing to become a financial holding company. The election became effective on May 27, 2005.

On November 16, 2005, the Corporation acquired Hibernia Corporation, a financial holding company thatprovides a wide array of financial products and services through Hibernia National Bank and its non-banksubsidiaries. As a result of the acquisition, Hibernia National Bank is a wholly owned subsidiary of theCorporation. On April 24, 2006, Hibernia National Bank changed its name to Capital One, National Association(“Capital One, N.A.”). None of the receivables currently in the Master Trust Portfolio were originated by CapitalOne, N.A.

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On March 12, 2006, the Corporation entered into an Agreement and Plan of Merger with North ForkBancorporation, Inc. (“North Fork”), a bank holding company with operations in the greater New York regionthat provides a full range of financial products and services to its retail and commercial customers, includingdeposit products and consumer, business and mortgage loans, along with other services, through North ForkBank and its non-bank subsidiaries, under which the Corporation will acquire North Fork. The merger, which isexpected to close in the fourth quarter of 2006, is subject to certain conditions, including approval bystockholders of North Fork and the Corporation, receipt and effectiveness of all necessary regulatory approvalsand other customary closing conditions. Upon closing of the merger, North Fork Bank will become a subsidiaryof the Corporation.

Industry Litigation

Over the past several years, MasterCard International and Visa U.S.A., Inc., as well as several of theirmember banks, have been involved in several different lawsuits challenging various practices of MasterCard andVisa.

In 1998, the United States Department of Justice filed an antitrust lawsuit against the MasterCard and Visamembership associations composed of financial institutions that issue MasterCard or Visa credit or debit cards(“associations”), alleging, among other things, that the associations had violated antitrust law and engaged inunfair practices by not allowing member banks to issue cards from competing brands, such as American Expressand Discover Financial Services. In 2001, a New York district court entered judgment in favor of the Departmentof Justice and ordered the associations, among other things, to repeal these policies. The United States Court ofAppeals for the Second Circuit affirmed the district court and, on October 4, 2004, the United States SupremeCourt denied certiorari in the case.

After the Supreme Court denied certiorari, American Express Travel Related Services Company, Inc., onNovember 15, 2004, filed a lawsuit against the associations and several member banks under United Statesfederal antitrust law. The lawsuit alleges, among other things, that the associations and member banksimplemented and enforced illegal exclusionary agreements that prevented member banks from issuing AmericanExpress and Discover cards. The complaints, among other things, request civil monetary damages, which couldbe trebled. Capital One Bank, Capital One, F.S.B. and Capital One Financial Corporation are named defendantsin this lawsuit.

From June 22, 2005 to the present, a number of entities, each purporting to represent a class of retailmerchants, filed seven separate lawsuits against the associations and several member banks under United Statesfederal antitrust law. The lawsuits allege, among other things, that the associations and member banks conspiredto fix the level of interchange fees. The complaints, among other things, request civil monetary damages, whichcould be trebled. Capital One Bank, Capital One, F.S.B., and Capital One Financial Corporation, among others,are named defendants. On October 19, 2005, the Judicial Panel on Multidistrict Litigation issued an opinionconsolidating these lawsuits before the United States District Court for the Eastern District of New York as partof Multidistrict Litigation 1720 “In re Payment Card Interchange Fee and Merchant Discount AntitrustLitigation.”

Capital One Bank, Capital One, F.S.B. and Capital One Financial Corporation believe that they havemeritorious defenses with respect to these cases and intend to defend these cases vigorously.

In addition, several United States merchants have filed class action lawsuits, which have been consolidated,against the associations under United States federal antitrust law relating to certain debit card products. In April2003, the associations agreed to settle the lawsuit in exchange for payments to plaintiffs by MasterCard of $1billion and Visa of $2 billion, both over a ten-year period, and for changes in policies and interchange rates fordebit cards. Certain merchant plaintiffs have opted out of the settlements and have commenced separate lawsuits.Additionally, consumer class action lawsuits with claims mirroring the merchants’ allegations have been filed in

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several courts. Finally, the associations, as well as certain member banks, continue to face additional lawsuitsregarding policies, practices, products and fees.

With the exception of the antitrust lawsuits brought by certain merchants from June 22, 2005 to the presentand the American Express antitrust lawsuit, the banks and their affiliates are not parties to the lawsuits againstthe associations described above and therefore will not be directly liable for any amount related to any possibleor known settlements, the lawsuits filed by merchants who have opted out of the settlements of those lawsuits orthe class action lawsuits pending in state and federal courts. However, the banks are member banks ofMasterCard and Visa and thus may be affected by settlements or lawsuits relating to these issues. In addition, it ispossible that the scope of these lawsuits may expand and that other member banks, including the banks, may bebrought into the lawsuits or future lawsuits.

Given the complexity of the issues raised by the lawsuits described above and the uncertainty regarding:(i) the outcome of these suits, (ii) the likelihood and amount of any possible judgment against the associations orthe member banks, (iii) the likelihood, amount and validity of any claim against the associations’ member banks,including the banks and the Corporation, and (iv) the effects of these suits, in turn, on competition in theindustry, member banks, and interchange and association fees, we cannot determine at this time the long-termeffects of these suits on the banks and on the payment of principal and interest on the notes.

The Bank’s Credit Card and Lending Business

Business Overview

The bank is engaged in secured and unsecured lending in the United States and internationally. The BankPortfolio consists primarily of unsecured consumer loans for which the credit extension vehicle is principally acredit card or an access check. The bank is a member of both the VISA and MasterCard associations. Referencesin this section to the “bank” shall, unless the context otherwise requires, mean Signet Bank prior toNovember 22, 1994 and Capital One Bank (including, if the context requires, its predecessor) on and afterNovember 22, 1994.

The receivables conveyed to the master trust pursuant to the pooling agreement have been and will primarilybe generated from transactions made by holders of selected VISA and MasterCard credit card accounts, includingpremium accounts and standard accounts. Generally, both premium and standard accounts undergo a similarcredit analysis, but premium accounts may have higher initial credit limits.

The growth achieved by the bank has been largely due to general industry dynamics that have existed overthe past several years and the success of the information-based test and learn strategy adopted by the bank in1988. This strategy is designed to differentiate customers based on credit risk, usage, customer preference andother characteristics and to capture profitable opportunities by effectively matching client characteristics withattractive product offerings. Through this methodology, the bank is able to design and test many products andsubsequently target customized solicitations at various customer segments, thereby enhancing customer responselevels and the returns on solicitation expenditures within given underwriting parameters. The bank has appliedthis test and learn strategy to other areas of its businesses, including account management, credit linemanagement, pricing strategies, usage stimulation, collections, recoveries and account and balance retention.Management of the bank believes that this disciplined strategy has allowed the bank to gain market share in ahighly competitive environment.

The bank has been an innovator of strategies designed to attract customers. The initial strategy was to offercredit card products with low introductory rates and a balance transfer option. Faced with increased competitionfor these products, the bank expanded its product offerings to include low fixed-rate products and othercustomized credit cards, including affinity and co-branded, student and other accounts. These strategies,combined with the bank’s segmenting and targeting capabilities, have contributed to the growth in recent periodsof the bank’s account originations and account balances.

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The bank and its affiliates currently service the Bank Portfolio through facilities in Richmond, Virginia andBoise, Idaho. In addition, certain servicing functions, including but not limited to account processing, productionservices, customer service, billing and payments and collections, are increasingly being performed on behalf ofthe bank and its affiliates by third party service providers such as First Data Resources, Inc., and its affiliate,REMITCO, LLC. See “—The Servicer—Outsourcing of Servicing.” The bank’s underwriting, customer serviceand collection procedures, described below, are subject to change as the competitive environment, industrypractice, legal requirements or the bank’s business objectives may require. In addition, in the future, the bank orits affiliates may acquire accounts originated by third parties.

Underwriting Procedures

The bank originates accounts through:

• applications mailed directly to prospective accountholders,

• direct mail and telemarketing solicitations for accounts from individuals whose creditworthiness wasprescreened,

• arrangements with affinity groups and partnerships,

• conversion of existing non-premium accounts to premium accounts,

• applications taken over the telephone or through the internet from prospective accountholders,

• newspaper, magazine, radio and television advertisements, and

• location or event marketing.

For account originations and solicitation activity since 1990, the bank has focused largely on prescreeneddirect mail and telemarketing targeted to multiple customer segments with varying combinations of productstructure and pricing. In general, the bank’s prescreening and underwriting criteria are intended to identify andavoid potential losses. These procedures are based on limited information, however, and it is not possible for thebank to identify all potential losses. The following describes the process by which the bank originates accounts.

Generally, the credit risk of each applicant is evaluated by use of a credit scoring system, which is intendedto provide a general indication, based on the information available, of the applicant’s willingness and ability torepay his or her obligations. Most applications are scored based on the following: information received on theapplication, data obtained from an independent credit reporting agency and any prior or current history as acustomer with the bank. In select cases, based on certain criteria, including likelihood of fraud, and in accordancewith criteria established by the bank’s management, further verification of information by telephone or in writingmay be required.

The bank’s accounts are grouped by solicitation for purposes of administrative convenience. A solicitationrepresents a group of accounts established from replies to a specific mailing, telemarketing program oradvertisement program. Each program has a discrete set of underwriting criteria corresponding to it. Productinformation for a particular solicitation is mailed within a discrete period.

The bank’s prescreened account solicitation processes generally use information from credit reportingagencies to identify consumers who are likely to respond and be approved for a credit card account. In theprescreening process, credit reporting agencies provide the bank with a list of potential customers whose creditmeets or exceeds underwriting standards determined by the bank in advance. Every name on the list then receivesby direct mail an application for a firm offer of credit. The underwriting criteria used to prescreen potentialapplicants varies over time in accordance with the bank’s established lending guidelines relating to the operationof its revolving lending business, as such guidelines may be changed from time to time, and include variousmodels, including risk models, designed to predict the credit risk of potential cardholders. The bank’s pricingstrategies are risk-based. Lower risk customers may likely be offered products with more favorable pricing andthe bank expects those products to yield lower delinquencies and credit losses. On products offered to higher risk

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customers, however, the bank is likely to experience higher delinquencies and losses. As such, the bank pricesproducts to higher risk customers accordingly.

For non-prescreened solicitations, the bank acquires names from a variety of sources, including list vendors,“take one” applications, internet advertising and other media venues. Using internal and external sources toensure quality and accuracy, prospective customers are mailed solicitations. The bank approves or declinesrespondents based on the information drawn from the application and a credit reporting agency report.

The bank tracks and continually tests the results of each mailing. Extensive management informationsystems and processes enable management to monitor continuously the effectiveness of prescreening andunderwriting criteria. Criteria are periodically modified based on the results obtained from this process.

In order to confirm approval and establish the amount of the customer’s credit line, completed applicationsare subject to the back-end verification process. Each customer whose credit request was verified and meets all ofthe underwriting criteria is offered a line of credit. Credit limits are determined based on information obtainedfrom the application and the independent credit reporting agency. Accountholder requests for increased creditlimits are evaluated based on a current credit reporting agency report, updated application data and prior accountperformance.

Each account is subject to certain terms and conditions, including the right of the bank to change orterminate any terms, conditions, services or features of the account (including increasing or decreasing periodicrate finance charges, other charges or minimum payments). The terms of the lending agreements are governed byVirginia and federal law. Credit limits are adjusted periodically based upon the bank’s continuing evaluation ofan accountholder’s overall credit behavior.

Customer Service

The bank began providing its customers access to on-line account servicing via the internet in 1999. Inaddition, voice response units and customer service representatives are currently available 24 hours a day, sevendays a week through a toll free telephone number dedicated to customer service. Customer servicerepresentatives have access to the customer’s account history in order to resolve immediately the majority ofquestions. When a customer initiates a payment inquiry or disputes a charge, the bank’s current policy is to creditthe accountholder’s monthly billing statement in the amount of such claim or dispute. If the claim or dispute isresolved so that the customer accepts the charge, it is re-billed to the customer’s account. However, financecharges are not applied retroactively on any such balances. Multiple tracking and reporting systems are employedto ensure that service standards are achieved and maintained.

Most customers are eligible for on-line account servicing. An increasing number of customers have beensigning up for on-line account servicing, including bill presentment, bill payment and customer service support inthe form of help screens.

Certain customer service functions are performed on behalf of the bank and its affiliates by third partyservice providers. Various providers service customers based on the type of support those customers need. Theprimary driver for any routing of customer calls is based on their current product and the features associated withthat product.

Billing and Payments

The accounts in the Bank Portfolio currently have various billing and payment characteristics, includingvarying periodic rate finance charges and fees. The accounts in the Bank Portfolio have an annual percentage ratethat is either a fixed rate or a variable rate that adjusts periodically according to an index. Some accounts have alow fixed rate.

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Currently, monthly billing statements are sent by the bank to accountholders who either (a) have balances atthe end of each billing period, (b) make a purchase, balance transfer or cash advance payment during the billingperiod or (c) make a complete or partial payment during the billing period. Generally, with some exceptions,each month an accountholder must make a minimum payment equal to the greater of (a) the sum of (i) the greaterof a percentage (either 2% or 3%) of the outstanding balance (including purchases, cash advances, financecharges and fees posted to the account) or $10.00 plus (ii) any past due amounts and (b) the amount that theaccount is overlimit. If the accountholder’s outstanding balance is less than $10.00, then the minimum monthlypayment equals the amount of the outstanding balance. With certain exceptions, accountholders are alsopermitted to make payments in advance for up to three months.

A periodic rate finance charge is assessable on most of the accounts in the Bank Portfolio. Accounts mayhave different periodic rates for each of the purchase, cash advance and balance transfer segments of an account.Except as noted below for certain purchases, finance charges generally begin to accrue from the date that apurchase, cash advance or balance transfer is made and are calculated for each day during the billing cycle bymultiplying the daily periodic rate applicable to the purchase, cash advance, or balance transfer segment of anaccount times the daily balance of each segment of the account during the billing cycle. The products of suchdaily calculations are then added together to determine the total finance charge. No periodic rate finance chargesare assessed on new purchases, however, if the accountholder’s balance from the preceding billing cycle is paidin full by the due date and if new purchases are paid in full by the next statement cycle date. The bank does notcurrently offer products that have no grace period for purchases.

The bank assesses membership fees on certain accounts although under various marketing and otherprograms these fees may be waived or rebated. For most credit card accounts, the bank also assesses late,overlimit and returned check charges. The bank generally assesses a fee on cash advances and certain purchasetransactions. There can be no assurance that periodic rate finance charges, fees and other charges on accounts inthe Master Trust Portfolio or the Bank Portfolio will remain at current levels. See “Risk Factors.”

Currently, payments are accepted and processed in accordance with Regulation Z of the Truth in LendingAct. Prior to 2005, payments by accountholders to the bank were processed at a credit card operations center inRichmond, Virginia and Federal Way, Washington. As of June 2005, the bank transitioned all paymentprocessing to REMITCO, LLC, an affiliate of First Data Resources, Inc. In addition, certain billing and paymentfunctions are increasingly being performed on behalf of the bank and its affiliates by REMITCO, LLC. See“—The Servicer.” While the bank employs a number of different payment allocation methodologies, paymentsgenerally are applied first to finance charges assessed, then to any fees billed to the account and then allocatedamong the applicable balance segments outstanding at the end of such billing period. See “—The Servicer.”

Delinquencies and Collections—Collection Efforts

The bank generally considers an account delinquent if a minimum payment due thereunder is not receivedby the accountholder’s payment due date. An account is deemed overlimit if the balance exceeds thepredetermined credit limit. The bank makes use of behavioral scoring models designed to predict the probabilityof an account charging off. Based on the behavioral score and certain other factors, the bank determines thetiming of the collection activity to be implemented for the account. In general, the bank exerts greater collectionsefforts towards accounts with higher balances and greater probability of charge-offs. Delinquent accounts arecurrently referred for contact by phone between 7 and 60 days after contractual delinquency, depending on theaccountholder’s risk profile. Overlimit accounts are referred for phone contact based on the degree to whichthose accounts exceed the applicable credit limit. In any event, for all delinquent and/or overlimit accounts, theaccountholder’s statement reflects the request for payment of past due and overlimit amounts. Efforts to collectdelinquent credit card accounts are generally made by affiliates of the bank’s collection group, using bothinternal collections associates as well as collection agencies.

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The focus of the bank’s response to an early stage delinquency is rehabilitation and identification of thecauses for delinquency. The bank’s policies and procedures are designed to encourage accountholders to paydelinquent amounts and bring their account under the credit limit. In some cases, the bank provides an incentivewhere needed to encourage payment. These incentives may include waiver of one or more fees, a temporaryreduction in interest rates, re-aging of the applicable account, or some other incentive technique. Currently, anaccount may only be reaged if the related accountholder makes three consecutive minimum monthly payments(or the equivalent lump sum), the account is more than 9 months old, and the account has not been re-aged in thepast 12 months or more than once in the past 5 years. The bank reserves the right to temporarily suspend orpermanently restrict charging privileges at any time after an account enters the collections process. In most cases,an account is permanently restricted and charging privileges are suspended no later than 120 days aftercontractual delinquency. The bank also may, at its discretion, enter into arrangements with delinquentaccountholders to extend or otherwise change payment schedules.

Late stage delinquency efforts focus on charge-off prevention. The bank employs the use of specializedgroups to match the accountholder’s situation. Examples of these specialized groups and situations include, butare not limited to: (i) for customers experiencing financial hardship and meeting certain eligibility criteria, thebank allows the customer to participate in third party debt management programs which allow customers toreduce their overall debt burden in exchange for consistent and consecutive payments over a fixed timeframe;and (ii) a group specializing in contacting delinquent accountholders conducts research to find updated andadditional contact information for accountholders that have been difficult to contact using traditional strategies.

The bank charges off an account (net of collateral) at 180 days past due, except for accounts on which nopayments have ever been received since the origination of such account. These accounts are charged off (net ofcollateral) at 120 days past due.

The bank generally charges off bankrupt customers’ accounts by the end of the next full billing cycle after itreceives the bankruptcy petition. The bank charges off accounts of deceased accountholders within two fullbilling cycles of receiving proper notice if no estate exists against which a proof of claim can be filed, no otherparties remit payments or no other responsible party is available. The credit evaluation, servicing and charge-offpolicies and collection practices of the bank may change over time in accordance with the business judgment ofits management, applicable law and guidelines established by applicable regulatory authorities.

Certain collections functions are performed on behalf of the bank and its affiliates by third party serviceproviders. Outsourcing decisions and strategies are based on the type of account (e.g., sub-prime vs. super-prime)and stage of delinquency. Over the past few years, the bank has gradually increased the use of outsourcing in itscollections efforts. See “—The Servicer—Outsourcing of Servicing.” Currently, the vast majority of collectionsefforts are outsourced. Currently, certain affiliates of the bank are dedicated primarily to high balance accounts.

Collections and Recoveries—Recoveries Efforts

The recoveries department attempts to recover both principal and non-principal balances on charged-offaccounts by charge-off type: contractual (non-payers 181+ days delinquent), bankruptcies and estates. The bankuses various scoring models and certain other factors to determine the appropriate strategy for recovery efforts.Methods of recovery include both phone calls and letters. Accounts are worked through third party agencies, aswell as by the recoveries group of an affiliate of the bank.

The bank applies a monthly post-charge-off interest charge to accounts and attempts to recover this amountin addition to any pre-charge-off principal non-principal balance remaining.

The focus of contractual recovery efforts is to recover the full balance. However, the bank may also, at itsdiscretion, enter into arrangements with delinquent accountholders to pay a reduced portion of the outstanding

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balance. Accountholders are offered three main payment options: payment in full, settlement or a payment plan.Settlement guidelines have been established for third party agencies and may vary depending on a variety offactors including account age and balance.

Since 2003 certain contractually charged off accounts have been segmented into strategies that seek toadvise the related accountholder of its obligations under the terms and conditions of its account and what optionsare available to the bank if payment is not received. Attempts are made to reach a settlement or other paymentarrangement with accountholders. However, in the event of non-payment, legal action is considered.

Bankrupt accounts are prepared for recovery efforts through the bankruptcy court system, including, but notlimited to, preparing and filing proof of claim forms with bankruptcy courts. The bank may enter into, at itsdiscretion and through court approved methods, a reaffirmation agreement with accountholders in bankruptcy.The bank also will attempt to recovery from the estates of deceased accountholders primarily through submittingproof of claim forms through the probate process or through payment protection plan claims on policiesaccountholders may have elected to carry on their account.

The bank, its affiliates and any third parties that perform outsourced services retain the right to change theirpractices for, among other things, conducting credit evaluation, servicing, collection and recoveries practicesover time. These changes are made in response to business, legal, regulatory or other considerations. Noteholderswill not be notified of any changes to these practices.

Interchange

Credit card issuers participating in the VISA and MasterCard associations receive certain fees calledinterchange as partial compensation for taking credit risk, absorbing fraud losses, funding receivables andservicing accountholders for a limited period prior to initial billing. Under the VISA and MasterCard rules andregulations, interchange in connection with accountholder charges for merchandise and services is collected byeither the VISA or MasterCard system and subsequently paid to the credit card-issuing banks. Interchange rangesfrom approximately 1% to 2% of the transaction amount, although VISA and MasterCard may from time to timechange the amount of interchange reimbursed. Interchange paid to the banks will be allocated and sold to CapitalOne Funding for each month on the basis of the percentage equivalent of the ratio that the amount ofaccountholder sales charges in the related accounts bears to the total amount of accountholder sales charges forall accounts in the Bank Portfolio, in each case for such month. This percentage is an estimate of the actualinterchange paid to the banks from time to time in respect of the accounts and may be greater or less than theactual amount of interchange so paid. Each of the banks will be required, pursuant to the terms of the relatedreceivables purchase agreement, to transfer to Capital One Funding and Capital One Funding will be required,pursuant to the terms of the pooling agreement to transfer to the master trust for the benefit of the investorcertificateholders, the percentage of the interchange allocable to the related certificates. All or a portion ofinterchange allocable to any collateral certificate, including the COMT collateral certificate, will be used to paythe servicer part of its Monthly Servicing Fee. See “The Master Trust—The Servicer—Servicing Compensationand Payment of Expenses.” Interchange, if any, in excess of the portion required to be used exclusively to pay theservicer part of its Monthly Servicing Fee will be included in Finance Charge Collections pursuant to the poolingagreement for purposes of determining the amount of Finance Charge Collections and allocating such collectionsand payments to the investor certificateholders. Interchange (including the portion used exclusively to pay theservicer a portion of its Monthly Servicing Fee) will be included in finance charge receivables for purposes ofcalculating the average yield on the portfolio of accounts included in the master trust applicable to any series ofinvestor certificates.

The Servicer

The bank has been the servicer for the master trust and has been servicing the credit card receivables in themaster trust since before November 22, 1994 when it operated as a division of Signet Bank/Virginia, a wholly

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owned subsidiary of Signet Banking Corporation. For a description of the servicer’s credit card portfolio, see“The Capital One Credit Card Portfolio” in “Annex I” of the related prospectus supplement.

Pursuant to the pooling agreement, the servicer is responsible for servicing, collecting, enforcing andadministering the receivables in accordance with its customary and usual procedures for servicing receivablescomparable to the receivables and the lending guidelines. See generally “The Master Trust” for a description ofthe pooling agreement and the various duties of the servicer under the pooling agreement.

Servicing activities to be performed by the servicer include: collecting and recording payments,communicating with accountholders, investigating payment delinquencies, card embossing, evaluating theincrease of credit limits, providing billing and tax records to accountholders and maintaining internal records foreach account. Managerial and custodial services performed by the servicer on behalf of the master trust includeproviding assistance in any inspections of the documents and records relating to the accounts and receivables bythe master trust trustee pursuant to the pooling agreement, maintaining the agreements, documents and filesrelating to the accounts and receivables as custodian for the master trust and providing related data processingand reporting services for investor certificateholders of any series and on behalf of the master trust trustee.

If the bank became insolvent, a Pay Out Event and a Servicer Default would occur. If a Pay Out Eventoccurs, this could cause an early redemption of the notes, and payments on your notes could be accelerated,delayed or reduced. See “The Master Trust—Pay Out Events.” Furthermore, if a Servicer Default occurs, thebank could be removed as servicer for the master trust and a successor servicer would be appointed. See “TheMaster Trust—The Servicer—Servicer Default” for more information regarding the appointment of a successorservicer.

Outsourcing of Servicing

Pursuant to the pooling agreement, the bank, as servicer, has the right to delegate or outsource its duties asservicer to any person who agrees to conduct such duties in accordance with the pooling agreement and thebank’s lending guidelines. The bank has endeavored to outsource certain of its servicing functions by contractingwith affiliated and unaffiliated third parties.

Notwithstanding any such outsourcing, the servicer will continue to be liable for all of its obligations underthe pooling agreement. In certain circumstances, however, the bank could be relieved of its duties as servicerupon the assumption of such duties by another entity.

The bank and its affiliates retain the right to change various terms and conditions of the agreements with thethird party vendors, and retain the right to change the third party vendors themselves. These changes may be theresult of several different factors, including but not limited to: customer satisfaction, informational accuracy,adherence to privacy and corporate security standards or requirements, quality evaluation, performance or skillevaluations, risk management policies, or cost structure. Accordingly, third party vendors who provide servicesto the bank, its affiliates and its customers may change from time to time, and noteholders will not be notified ofany change. Similarly, to the extent that the terms and conditions are altered for agreements with third partyvendors, noteholders will not be given notice of those changes.

If an affiliated or unaffiliated third party performing certain outsourced or delegated functions were to enterbankruptcy or become insolvent, then the servicing of the accounts in the Master Trust Portfolio could be delayedand payments on your notes could be accelerated, delayed or reduced.

Certain servicing functions are increasingly being performed on behalf of the bank and its affiliates by thirdparty service providers. Decisions to outsource certain duties are based on cost, the ability of third parties toprovide greater flexibility to the bank and its affiliates, experience, financial stability and various other factors.

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The bank or its affiliates monitors the third parties performing the outsourced functions based on the level of riskassociated with, and the particular duties being provided by, each third party. Servicing functions that areoutsourced to third party service providers include certain customer service relations, processing and collectionsactivities, and software programs and support, credit score processing and information storage services. Thefollowing discussion provides certain information regarding Capital One Services, Inc., an affiliate of the bank,and other unaffiliated third parties, each of which perform certain servicing functions on behalf of the bank andits affiliates.

Capital One Services, Inc.

The bank has contracted with Capital One Services, Inc., a Delaware corporation and an affiliate of thebank, to perform substantially all of its servicing activities. Capital One Services, Inc. was incorporated onDecember 1, 1995 and has been servicing receivables since that time.

Currently, under the servicing and management agreement between the bank and Capital One Services, Inc.,the servicing functions to be performed by Capital One Services, Inc. include, among other things: productstrategy and development services; solicitation strategy; account acquisition, management, origination andretention services; database management services (including data processing and credit bureau interface); auditservices and oversight of third party service providers; senior management, human resources, treasury andoperational services. Unless otherwise terminated for cause, the servicing and management agreement will be ineffect until March 2008 and will automatically renew thereafter for one-year terms. However, for any of theservices listed in that agreement, either party can terminate that service at any time upon prior notice to the otherparty. In the event of any termination, Capital One Services, Inc. has agreed to provide conversion assistance tothe new service provider.

Capital One, N.A.

Most cardholders who are located in Louisiana or Texas are permitted to make their monthly payments withchecks or cash at branch locations of Capital One, N.A., a national banking association and an affiliate of thebank. The bank has entered into a services agreement with Capital One, N.A. under which Capital One, N.A. willperform certain payment remittance processing activities with regard to those payments. Under that agreement,Capital One, N.A. has agreed to, among other things (i) validate the cardholder’s account number to verify thatthe cardholder is allowed to make payments at a branch location, (ii) prepare and send a payment file to the bankfor posting to that cardholder’s account and (iii) deposit payments received at branch locations into an account ofthe bank at Capital One, N.A. The agreement generally provides for a one-year term which automatically renewsfor successive one-year terms unless terminated by either party. The bank and Capital One, N.A. have the abilityto terminate the agreement for cause, or at any time upon written notice to the other party. In the event of anytermination, Capital One, N.A. has agreed to provide conversion assistance to any new service provider.

First Data Resources, Inc. and REMITCO, LLC

Capital One Services, Inc. and the bank have entered into an agreement with First Data Resources, Inc.(“FDR”), a Delaware corporation, under which FDR and certain of its affiliates will perform substantially all ofcertain production services, including statement and letter printing, card embossing, outbound mail handling andpayment remittance processing.

Under this agreement with Capital One Services, Inc. and the bank, FDR has agreed to, among other things,provide certain services including embossing, data processing, statement and letter printing, outbound mailing,remittance processing and inventory management. FDR has subcontracted with its affiliate, REMITCO, LLC(“REMITCO”), to perform substantially all of the remittance processing including collecting and imaging

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cardholder payments and submitting them to the bank. When cardholder checks, electronic payments or cashpayments are collected by REMITCO they are promptly sent to the bank through a clearing house. REMITCOhas agreed to adhere to guidelines set by the bank and Capital One Services, Inc. relating to the collecting of alltypes of payments.

Under the agreement, the liability of FDR for any damages is generally limited to the lesser of (1) theamount of any actual damages and (2) an amount that varies based on the number of cardholder accountscurrently serviced by FDR or the fees charged by FDR to Capital One Services, Inc. in the previous year. Theagreement generally provides for a fixed term which is extendable upon the request of both parties or upon theunilateral request of Capital One Services, Inc. Capital One Services, Inc. and FDR have the ability to terminatethe agreement for cause and, in certain circumstances, Capital One Services, Inc. may terminate the agreementfor convenience.

REMITCO is the remittance processing subsidiary of First Data Corporation (“FDC”) and one of the largestretail lock-box providers in the United States, processing over 70 million payments per month. REMITCOprovides high-speed remittance processing, image archive and advanced clearing services through an integratednetwork of eight high-speed, high-volume processing facilities across the United States. In addition to theprocessing facilities, REMITCO maintains offices in Wilmington, Delaware and Englewood, Colorado.REMITCO was established in 1997 and was acquired by a subsidiary of FDC in 2000.

FDR has provided printing, mailing and card-embossing services since its formation in 1969 primarily forthe credit card industry. FDR is located in Omaha, Nebraska and is a subsidiary of FDC. The card issuingservices segment of FDC (FDR) provides products to the bank and Capital One Services, Inc. in the form ofcredit card statement printing and mailing services, credit card embossing and mailing services as well as generalcardholder letter correspondence printing and mailing services. FDC is a Delaware corporation with its principaloffices located in Greenwood Village, Colorado.

The Transferor, The Depositor and The Receivables Purchase Agreements

Capital One Funding

Capital One Funding is a limited liability company formed under the laws of the Commonwealth of Virginiaon November 13, 2001 and is a wholly-owned subsidiary of the bank. Capital One Funding is the transferor andthe depositor of COMET. The address for Capital One Funding is 140 East Shore Drive, Room 1071-B, GlenAllen, Virginia 23059 and its telephone number is (804) 290-6959. Capital One Funding was created for thelimited purpose of purchasing, holding, owning and transferring receivables and related activities. Since itsformation, the transferor has been engaged in these activities solely as (i) the purchaser of receivables from thebank pursuant to the receivables purchase agreement, (ii) the transferor of receivables to COMT pursuant to thepooling agreement, (iii) the beneficiary and transferor that formed and capitalized COMET pursuant to the trustagreement, (iv) the transferor of the COMT collateral certificate to COMET pursuant to the transfer andadministration agreement and (v) the beneficiary and transferor that executes underwriting, subscription andpurchase agreements in connection with each issuance of notes. Capital One Funding may also act as thedepositor for other master trusts or securitization special purpose entities affiliated with the bank, but has notdone so to date.

A description of Capital One Funding’s obligations of transferor of the receivables to COMT can be foundin “The Master Trust—Conveyance of Receivables,” “—Addition of Master Trust Assets,” “—Removal ofMaster Trust Assets” and “—Representations and Warranties.” Capital One Funding’s obligations under thetransfer and administration agreement are to transfer the COMT collateral certificate to COMET, to record suchtransfer in its accounting records, computer files and other records, and to take all actions necessary to perfectand maintain the perfection of COMET’s interest in the COMT collateral certificate, including the filing of UCCfinancing statements for that transfer.

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Capital One Funding was initially capitalized by a cash contribution from the bank. Pursuant to a revolvingcredit agreement, Capital One Funding may borrow funds from the bank for the sole purpose of purchasingreceivables from the bank under the related receivables purchase agreement. Under the revolving creditagreement, payments from Capital One Funding are due only to the extent that those funds are not required forany other purpose and so long as the payment will not cause Capital One Funding to default under the poolingagreement. Capital One Funding is currently the sole holder of all outstanding Class D Card series notes.

In addition, other affiliates of the bank may be transferors of assets to COMET.

Receivables Purchase Agreements

Sale of Receivables

The bank and the savings bank are the owners of the accounts which contain the receivables that arepurchased by the transferor under separate receivables purchase agreements with each bank and the transferorand then transferred by the transferor to the master trust. In connection with the sale of receivables to thetransferor, each bank has:

• filed appropriate UCC financing statements to evidence the sale to the transferor and to perfect thetransferor’s right, title and interest in those receivables; and

• indicated in its computer files that the receivables have been sold to the transferor by such bank.

Pursuant to separate receivables purchase agreements, each bank, respectively:

• sold all of its right, title and interest in the receivables existing in the initial accounts at the close ofbusiness on the initial cut-off date and receivables arising thereafter in those accounts, in each caseincluding all interchange, insurance proceeds and recoveries allocable to such receivables, all monies dueor to become due, all amounts received or receivable, all collections and all proceeds, each as it relates tosuch receivables; and

• will sell all of its right, title and interest in the receivables existing in the additional accounts at the closeof business on the date of designation for inclusion in the master trust and receivables arising thereafter inthose accounts, in each case including all interchange, insurance proceeds and recoveries, all monies dueor to become due, all amounts received or receivable, all collections and all proceeds, each as it relates tosuch receivables.

Pursuant to the pooling agreement, those receivables are then transferred immediately by the transferor,subject to certain conditions, to Capital One Master Trust, and the transferor has assigned to the master trust itsrights under the receivables purchase agreements.

Representations and Warranties

In each receivables purchase agreement, each bank, respectively, represents and warrants to the transferor tothe effect that, among other things:

• it is validly existing in good standing under the applicable laws of the applicable jurisdiction and has fullpower and authority to own its properties and conduct its business;

• the execution and delivery of the receivables purchase agreement and the performance of the transactionscontemplated by that document will not conflict with or result in any breach of any of the terms of anymaterial agreement to which such bank is a party or by which its properties are bound and will notconflict with or violate any requirements of law applicable to such bank; and

• all governmental authorizations, consents, orders, approvals, registrations or declarations required to beobtained by such bank in connection with the execution and delivery of, and the performance of thereceivables purchase agreement have been obtained.

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Repurchase Obligations

In each receivables purchase agreement, each bank, respectively, makes the following representations andwarranties, among others:

• as of the initial cut-off date with respect to the initial accounts, and as of the date of designation forinclusion in the master trust with respect to additional accounts, the list of accounts and informationconcerning the accounts provided by such bank is accurate and complete in all material respects;

• each receivable conveyed to transferor has been conveyed free and clear of any lien or encumbrance,other than liens for municipal and other local taxes;

• all government authorizations, consents, orders, approvals, registrations or declarations required to beobtained, effected or given by such bank in connection with the conveyance of receivables to thetransferor have been duly obtained, effected or given and are in full force and effect;

• on the initial cut-off date, each account is an Eligible Account and, on the date of designation forinclusion in the master trust, each additional account is an Eligible Account;

• on the initial cut-off date, each receivable then existing in an initial account is an Eligible Receivable and,on the applicable additional cut-off date, each receivable then existing in the related additional account isan Eligible Receivable;

• as of the date of the creation of any new receivable sold to the transferor by such bank, such receivable isan Eligible Receivable; and

• no selection procedures reasonably believed by such bank to be materially adverse to the interests of thetransferor have been used in selecting the accounts for designation to the master trust.

The receivables purchase agreements provide that if the banks breach any of the representations andwarranties described above and, as a result, the transferor is required under the pooling agreement to accept areassignment of the related Ineligible Receivables transferred to the master trust by the transferor or sold to themaster trust by the banks prior to the date Capital One Funding became the transferor, then the banks will acceptreassignment of such Ineligible Receivables and pay to the transferor an amount equal to the unpaid balance ofsuch Ineligible Receivables. See “The Master Trust—Representations and Warranties.”

Reassignment of Other Receivables

Each of the banks also represents and warrants in the respective receivables purchase agreement that(a) such receivables purchase agreement and any supplemental conveyances each constitute a legal, valid andbinding obligation of such bank and (b) such receivables purchase agreement and any supplemental conveyanceconstitute a valid sale to the transferor of all right, title and interest of such bank of the receivables, including allinterchange, insurance proceeds and recoveries, all monies due or to become due, all amounts received orreceivable, all collections and all proceeds, each as it relates to such receivables, and that the sale is perfectedunder the applicable UCC. If a representation described in (a) or (b) of the preceding sentence is not true andcorrect in any material respect and as a result of the breach the transferor is required under the pooling agreementto accept a reassignment of all of the receivables previously sold by such bank pursuant to such receivablespurchase agreement, such bank shall accept a reassignment of those receivables. See “The Master Trust—Representations and Warranties.” If either of the banks is required to accept reassignment under the precedingparagraph, that bank will pay to the transferor an amount equal to the unpaid balance of the reassignedreceivables.

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Amendments

The receivables purchase agreements may be amended by the applicable bank and the transferor withoutconsent of any investor certificateholders or noteholders. No amendment, however, may be effective unless:

• written confirmation has been received by the master trust trustee from each rating agency that theamendment will not result in the reduction, qualification or withdrawal of the respective ratings of eachrating agency for any securities issued by the master trust; and

• the applicable bank shall certify to the transferor that such bank reasonably believes that the amendmentwill not cause a Pay Out Event.

Termination

The receivables purchase agreements will terminate upon either (a) the termination of the master trustpursuant to the pooling agreement or (b) an amendment to the pooling agreement to replace Capital One Fundingwith an affiliate of Capital One Funding, as transferor under the pooling agreement. In addition, if a receiver orconservator is appointed for either of the banks or the transferor becomes a debtor in a bankruptcy case or certainother liquidation, bankruptcy, insolvency or similar events occur, the applicable bank will cease to transferreceivables to the transferor and promptly give notice of that event to the transferor and the master trust trustee,unless the receiver, conservator or bankruptcy court instructs otherwise.

The Master Trust

The following discussion summarizes the material terms of the amended and restated pooling and servicingagreement—dated as of September 30, 1993, as amended and restated as of August 1, 2002 and January 13,2006, among Capital One Funding, as transferor, Capital One Bank, as servicer, and The Bank of New York, asmaster trust trustee, which may be amended from time to time, and is referred to in this prospectus as the poolingagreement—and the series supplements to the pooling agreement. The summary does not purport to be completeand is qualified in its entirety by reference to the provisions of the pooling agreement and the series supplements.

General

Before it issued the COMT collateral certificate, Capital One Master Trust, as a master trust, issued otherseries of asset backed investor certificates. In addition, the master trust may in the future issue additional seriesfrom time to time. The master trust has been formed under and is administered in accordance with the laws of theState of New York. The master trust is governed by the pooling agreement. The master trust will only engage inthe following business activities:

• acquiring and holding receivables arising in accounts in the Master Trust Portfolio and other master trustassets and the proceeds from these master trust assets;

• issuing series of certificates (including the COMT collateral certificate) and other interests in the mastertrust;

• receiving collections and making payments on series of investor certificates (including the COMTcollateral certificate) and other interests; and

• engaging in related activities (including, for any series, obtaining any enhancement and entering into anenhancement agreement relating thereto).

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The master trust is not expected to have any need for additional capital resources other than the assets of themaster trust.

Master Trust Assets

Each transferor, whether the banks or their predecessors or Capital One Funding or any additionaltransferor, has conveyed and will convey to the master trust, without recourse, its interest in all receivablesarising under eligible accounts in the Master Trust Portfolio. The receivables consist of all amounts charged byaccountholders for goods and services and cash advances, called principal receivables, and all related periodicrate finance charges, cash advance fees, late charge fees, returned check charges, overlimit fees, discount optionreceivables and any other incidental or miscellaneous fees and charges (other than membership fees) billed on theaccounts from time to time, collectively called finance charge receivables.

The master trust assets consist of such receivables, all monies due or to become due thereunder, theproceeds of such receivables, recoveries (in some cases, net of collection expenses) received by the servicerincluding proceeds from the sale or securitization of Defaulted Receivables and proceeds of credit insurancepolicies relating to such receivables, participation interests and related property conveyed to the master trusttrustee pursuant to an assignment, the right to receive certain interchange attributed to accountholder charges formerchandise and services in the accounts in the Master Trust Portfolio, all monies on deposit in the master trustcollection account, the master trust excess funding account and in certain accounts maintained for the benefit ofthe certificateholders, any series enhancements, and all of the transferor’s legal rights and remedies under thereceivables purchase agreements.

The master trust assets are expected to change over the life of the master trust, as credit card accounts, otherrevolving credit accounts and related assets become subject to the master trust and as accounts are closed,charged off or removed and are no longer subject to the master trust. The pooling agreement provides that,subject to certain limitations and conditions, master trust assets may also include participations in receivables.Pursuant to the pooling agreement, the transferor will have the right (subject to certain limitations andconditions), and in some circumstances will be obligated, to designate as master trust assets receivables arising inadditional accounts or, in lieu thereof or in addition thereto, participations in receivables. See “—Addition ofMaster Trust Assets” below. In addition, the transferor will have the right to remove from the master trust itsreceivables arising in designated accounts as described under “—Removal of Master Trust Assets” below.

Origination and Changes

The master trust was originated by Signet Bank in 1993 as Signet Master Trust. As permitted by the poolingagreement:

(1) Signet Bank transferred to Capital One Bank, and Capital One Bank accepted and assumed, all ofSignet Bank’s rights and obligations under the pooling agreement,

(2) Capital One Bank became transferor and servicer of the master trust,

(3) Signet Bank was released from any continuing obligations under the pooling agreement,

(4) the master trust’s name was changed to Capital One Master Trust, and

(5) Signet Bank and Capital One Bank filed with the appropriate governmental authorities UniformCommercial Code financing statements and amendments to financing statements reflecting the transfer toand assumption by Capital One Bank.

Under the terms of the pooling agreement, Capital One, F.S.B. was added as an additional seller in April2001. Capital One, F.S.B. did not transfer any assets to the master trust.

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As permitted by the pooling agreement, the pooling agreement was amended on August 1, 2002 (the“substitution date”) to substitute Capital One Funding as transferor in place of Capital One Bank and CapitalOne, F.S.B. Pursuant to the pooling agreement, Capital One Funding has assumed the obligations of transferor ofthe master trust and Capital One Bank remains the servicer.

At the time of such substitution, each of the banks, as owners of the accounts which are or may be includedin the Master Trust Portfolio, entered into a receivables purchase agreement with Capital One Funding. Under thereceivables purchase agreements, the banks sold their existing right, title and interest in, and on an ongoing basiswill sell, the receivables in the designated accounts to Capital One Funding. Capital One Funding, as transferorunder the pooling agreement, then transfers the receivables to the master trust.

The Receivables

The receivables arise in certain Eligible Accounts selected by the bank from the Bank Portfolio. SuchEligible Accounts are referred to in this prospectus and the related prospectus supplement as the “Master TrustPortfolio.” The bank and its predecessor have identified a pool of accounts, from which the initial accounts wereselected, based on the eligibility and other specified criteria in the pooling agreement. Notwithstanding thisdesignation to Capital One Funding, the designated accounts and the account relationship with the cardholderswill remain with the bank.

Prior to the substitution of Capital One Funding as transferor to the master trust, referred to as thesubstitution date, the bank and its predecessor transferred all receivables, including all interchange, insuranceproceeds, recoveries, all monies due or to become due, all amounts received or receivable, all collections and allproceeds, each as it relates to such receivables, generated in these accounts to the master trust. Prior to thesubstitution date, the savings bank did not transfer any receivables to the master trust. On and after thesubstitution date, the banks transfer all receivables, including all interchange, insurance proceeds, recoveries, allmonies due or to become due, all amounts received or receivable, all collections and all proceeds, each as itrelates to such receivables, in the designated accounts to Capital One Funding under the terms of the receivablespurchase agreements, and Capital One Funding transfers the same to the master trust under the terms of thepooling agreement.

All monthly calculations for such designated accounts are computed based on activity occurring during therelated month.

Some receivables have been charged off as uncollectible prior to their addition to the master trust inaccordance with the bank’s normal servicing policies and lending guidelines. On the date when any receivable inan account becomes a Defaulted Receivable, the master trust trustee automatically transfers the DefaultedReceivables to the transferor together with all monies due or to become due with respect thereto, all proceedsthereof and any insurance proceeds. Pursuant to the pooling agreement and the receivables purchase agreements,the transferor has the right, and in certain cases the obligation (subject to certain limitations and conditionsdescribed below), to cause the bank to designate from time to time additional qualifying VISA or MasterCardcredit card accounts and other revolving credit accounts to be included as accounts and to purchase from thebanks and transfer to the master trust all receivables in such additional accounts, whether such receivables arethen existing or thereafter created. These additional accounts must be Eligible Accounts as of the date thetransferor designates its receivables, including all interchange, insurance proceeds, recoveries, all monies due orto become due, all amounts received or receivable, all collections and all proceeds, each as it relates to suchreceivables, to be included in the master trust.

Accounts in the Master Trust Portfolio also include certain charged-off accounts with zero balances, therecoveries of which will be treated as Finance Charge Collections. The transferor may add such zero balanceaccounts to the trust from time to time.

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Since the Master Trust Cut-Off Date, receivables in certain additional accounts have been transferred to themaster trust in accordance with the provisions of the pooling agreement. Prior to the substitution date, the banksrepresented and warranted, and thereafter, the transferor represents and warrants that each of the receivables inany account in the Master Trust Portfolio or additional account which has been or is transferred by the banks orthe transferor, as applicable, to the master trust meets the eligibility requirements specified in the poolingagreement as of the date on which it has been or is transferred to the master trust. See “—Representations andWarranties.” However, there can be no assurance that all the accounts will continue to meet the applicableeligibility requirements throughout the life of the master trust.

The prospectus supplement relating to each series, class or tranche of notes will provide certain informationabout the Master Trust Portfolio as of the date specified. Such information will include, but not be limited to, theamount of principal receivables, the amount of finance charge receivables, the range of principal balances of thecredit card accounts and the average thereof, the range of credit limits of the credit card accounts and the averagethereof, the range of ages of the credit card accounts and the average thereof, the geographic distribution of thecredit card accounts, the types of credit card accounts and delinquency statistics relating to the credit cardaccounts.

Investor Certificates; Master Trust Transferor Interest

Each series of investor certificates represents an undivided interest in the assets of the master trust,including the right to the applicable investor percentage of all cardholder payments on the receivables in themaster trust.

The transferor initially will own the Master Trust Transferor Interest which represents the interest in themaster trust not represented by the investor certificates issued and outstanding under the master trust or therights, if any, of any credit enhancement providers to receive payments from the master trust. The holder of theMaster Trust Transferor Interest, subject to certain limitations, will have the right to the Master Trust TransferorPercentage of all cardholder payments from the receivables in the master trust. The Master Trust TransferorInterest may be transferred in whole or in part subject to certain limitations and conditions set forth in the poolingagreement. At the discretion of the transferor, the Master Trust Transferor Interest may be held either in anuncertificated form or in the form of a certificate representing the Master Trust Transferor Interest, called a BaseCertificate. See “—The Base Certificate; Additional Transferors” below.

The amount of principal receivables in the master trust will vary each day as new principal receivables arecreated and others are paid or charged off as uncollectible. Therefore, the amount of the Master Trust TransferorInterest will fluctuate each day to reflect the changes in the amount of the principal receivables in the mastertrust. In addition, the Master Trust Transferor Interest will generally increase to reflect reductions in the InvestedAmount of any series of investor certificates, and will generally decrease as a result of the issuance of a newseries of investor certificates by the master trust. Similarly, the Master Trust Transferor Interest will generallyincrease as a result of the reduction of the Invested Amount of the COMT collateral certificate due to payment ofprincipal on a series, class or tranche of notes, and will generally decrease as a result of an increase in theInvested Amount of the COMT collateral certificate due to the issuance of a new series, class or tranche of notes,or due to an issuance of additional notes for an existing tranche of notes. However, if additional collateralcertificates are added to COMET, these general rules may not necessarily apply to such additional collateralcertificates. See “—New Issuances,” “The Notes—Issuances of New Series, Classes and Tranches of Notes” and“Sources of Funds to Pay the Notes—The COMT Collateral Certificate.”

Conveyance of Receivables

Pursuant to the pooling agreement, the banks and their predecessor and Capital One Funding, since itssubstitution as transferor, each during such period as it was the seller or a transferor, as applicable, has assigned

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to the master trust its interest in all receivables arising in the initial accounts, including related accounts, as of theMaster Trust Cut-Off Date and has assigned and will assign its interest in all of the receivables in the additionalaccounts, including related accounts for such additional accounts as of the date of designation of such additionalaccounts for inclusion in the master trust, all receivables thereafter created under the accounts, all recoveries andinsurance proceeds allocable to the master trust, any participations in receivables added to the master trust andthe proceeds of all of the foregoing.

In connection with the transfer of any receivables to the master trust, the transferor is required to indicate inits computer records that the receivables have been conveyed to the master trust. In addition, the transferor hasprovided or will provide to the master trust trustee a computer file or a microfiche list containing a true andcomplete list showing for each initial account, as of the Master Trust Cut-Off Date, and for each additionalaccount, as of the applicable date of designation of such additional accounts for inclusion in the master trust:

(i) its account number,

(ii) the collection status, and

(iii) the aggregate amount outstanding and the aggregate amount of principal receivables in suchaccount.

Capital One Bank, as initial servicer, will retain and will not deliver to the master trust trustee any otherrecords or agreements relating to the accounts or the receivables. Except as set forth above, the records andagreements relating to the accounts and the receivables will not be segregated from those relating to otherrevolving credit accounts and receivables, and the physical documentation relating to the accounts or receivableswill not be stamped or marked to reflect the transfer of receivables to the transferor or to the master trust. Thebanks have filed and are required to file UCC financing statements for the transfer of the receivables to thetransferor and the transferor has filed and is required to file UCC financing statements for the transfer of thereceivables to the master trust, in each case, meeting the requirements of applicable state law.

Addition of Master Trust Assets

The transferor will have the right to designate for the master trust, from time to time, additional accounts tobe included in the Master Trust Portfolio, the receivables of which are transferred to the master trust, subject tocertain conditions described below. In addition, the transferor will be required to add receivables from additionalaccounts if, as of the close of business on the last business day of any month, the Master Trust Transferor Interestis less than the Master Trust Required Transferor Interest or the amount of principal receivables in the mastertrust is less than the Master Trust Required Principal Balance. In such event, the transferor will, on or before thetenth business day after the end of the prior month (unless the Master Trust Transferor Interest exceeds theMaster Trust Required Transferor Interest as of the end of any business day during the period between the lastbusiness day of the prior month and such designation date), make an addition to the master trust in a sufficientamount so that, after giving effect to such addition, the Master Trust Transferor Interest will at least equal theMaster Trust Required Transferor Interest and the amount of principal receivables is at least equal to the MasterTrust Required Principal Balance. See “—Pay Out Events” and “The Notes—Early Redemption Events” for adiscussion of the result of a failure to transfer receivables to the master trust under these circumstances.

Any additional accounts designated to the master trust will be selected from accounts owned by both oreither of the banks. Therefore, if additional accounts are to be designated, the transferor shall, under theapplicable receivables purchase agreement, request that the applicable bank designate accounts which qualify asEligible Accounts to the transferor and the transferor will designate such accounts to the master trust. Subject tothose eligibility requirements and applicable regulatory guidelines, the decision regarding when and to whatextent receivables will be added to the master trust will be solely at the transferor’s discretion, and that decisionwill not be independently verified by any other party.

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The transferor may also from time to time, at its sole discretion, request that both or either of the banksdesignate certain types of Eligible Accounts approved by the rating agencies to be included as automaticadditional accounts and designate the accounts so selected to be added to the master trust, subject to thelimitations described in this paragraph. Unless each rating agency otherwise consents, the number of automaticadditional accounts plus the number of accounts added to maintain the Master Trust Transferor Interest asdescribed above, without prior rating agency notice, will not exceed the Aggregate Addition Limit. On or beforeMarch 31, June 30, September 30 and December 31 of each calendar year, or more frequently if required by anyrating agency, the transferor will deliver to the master trust trustee, each rating agency and certain providers ofseries enhancement an opinion of counsel about the automatic additional accounts included as accounts duringthe preceding three-month period that confirms the creation and perfection of the security interest in thereceivables in such automatic additional accounts. Such opinion of counsel will be provided by outside counsel.If such opinion of counsel for any automatic additional accounts is not so received, the ability of the transferor todesignate automatic additional accounts will be suspended until such time as each rating agency otherwiseconsents in writing or such accounts are removed from the master trust. The addition to the master trust ofreceivables in automatic additional accounts will be subject to the further condition that revolving credit cardaccounts and other revolving credit accounts either (i) not originated by the banks or (ii) not of a type included inthe accounts at the time of their addition may only be designated as automatic additional accounts uponcompliance with the conditions described below about additions. Additions of participations in receivables mustalso comply with such conditions.

In addition to or in lieu of additional credit card accounts, the transferor is permitted to add to master trustparticipations representing undivided interests in a pool of assets primarily consisting of receivables arising undercredit card accounts owned by the banks or any of their affiliates and collections thereon. Participations may beevidenced by one or more certificates of ownership issued under a separate pooling agreement or similaragreement entered into by the transferor or an affiliate of the transferor which entitles the investorcertificateholder to receive percentages of collections generated by the pool of assets subject to such participationagreement from time to time and to certain other rights and remedies specified therein. Participations may havetheir own credit enhancement (see “Sources of Funds to Pay the Notes—Credit Enhancement” for a descriptionof types of credit enhancement), pay out events, servicing obligations and servicer defaults, all of which arelikely to be enforceable by a separate trustee under the participation agreement and may be different from thosespecified in this prospectus. The rights and remedies of the master trust as the holder of a participation (andtherefore the investor certificateholders) will be subject to all the terms and provisions of the related participationagreement.

In connection with an addition, both or either of the banks, under the applicable receivables purchaseagreement, will convey to the transferor the receivables arising in the additional accounts. The transferor willconvey to the master trust the receivables arising in the additional accounts, and the transferor may transferparticipations in receivables, in each case, subject to the following conditions, among others (provided that thefirst, fourth, fifth, sixth and tenth conditions below shall not apply to the transfer to the master trust of receivablesin automatic additional accounts):

(1) the transferor shall have given the master trust trustee, the servicer, each rating agency and certainproviders of series enhancement written notice that the additional accounts or participations inreceivables will be included as master trust assets;

(2) the transferor shall have delivered to the master trust trustee a written assignment and an accountschedule containing a true and complete list of the related additional accounts or participations inreceivables;

(3) the transferor shall have delivered to the master trust trustee copies of all filings necessary to perfectthe master trust’s interest in the receivables in additional accounts;

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(4) in the case of an addition other than a required addition, the transferor shall have received writtennotice from each rating agency that such addition will not cause a reduction, qualification orwithdrawal of the rating of the investor certificates of any outstanding series, and shall have deliveredcopies of each such written notice to the servicer and the master trust trustee;

(5) in the case of a required addition during any of the 3 consecutive months beginning in January, April,July and October of each calendar year, if applicable, the transferor shall have received, to the extentnot previously received, not later than 20 days following the last business day of the relevant 3consecutive months, written notice from each rating agency that such addition will not cause areduction, qualification or withdrawal of the rating of the investor certificates of any outstanding seriesand shall have delivered copies of each such written notice to the servicer and the master trust trustee;provided, however, that in the case of a required addition that exceeds the Aggregate Addition Limit,the transferor shall have provided each rating agency with 15 days prior written notice of such requiredaddition and each rating agency shall have notified the transferor in writing that such addition will notcause a reduction, qualification or withdrawal of the rating of the investor certificates of anyoutstanding series;

(6) the transferor shall have delivered to the master trust trustee, each rating agency and any provider ofseries enhancement entitled thereto an opinion of counsel that for federal and Virginia income andfranchise tax purposes (and, if there has been an assumption of the servicer’s obligations as describedin “—Assumption of the Transferor’s Obligations,” for income and franchise tax purposes of thejurisdiction in which the assuming entity engages in its principal servicing activities, if other thanVirginia), such addition will not cause a taxable event to the holders of the investor certificates andcertain other opinions of counsel;

(7) the transferor shall have delivered to the master trust trustee and certain providers of seriesenhancement a certificate of an authorized officer of the transferor, dated the addition date, to the effectthat, in the reasonable belief of the transferor:

—such addition will not, based on the facts known to such officer at that time, cause a Pay Out Eventor an event that, after the giving of notice or lapse of time, would cause a Pay Out Event to occur forany series of investor certificates, and

—in the case of additional accounts, no selection procedure was utilized by the transferor that wouldresult in a selection of additional accounts (from the Eligible Accounts available to the transferor)that would be materially adverse to the interests of the investor certificateholders of any series as ofthe date of the addition;

(8) the transferor shall have deposited or caused to be deposited in the master trust collection account allcollections for the additional accounts as of the applicable cut-off date;

(9) no bankruptcy or insolvency event shall have occurred with respect to the transferor or the owner of therelated additional accounts, nor shall the transfer of the receivables in the additional accounts or thetransfer of the participation interests to the master trust trustee have been made in contemplation ofsuch occurrence; and

(10) the transferor shall have delivered to the master trust trustee, each rating agency and any provider ofseries enhancement entitled thereto an opinion of counsel with respect to the validity of the interest ofthe master trust in and to the receivables and certain other components of the master trust.

Affiliates of the transferor may originate or acquire portfolios of credit card accounts the receivables inwhich may be conveyed to the transferor and transferred by the transferor to the master trust. Such transfer ofreceivables to the master trust will be subject to the conditions described above relating to additions.

Additional accounts may include accounts originated using criteria different from those which were appliedto the initial accounts because such accounts were originated at a different date or were part of a portfolio of

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credit card accounts which were not part of the Bank Portfolio as of the Master Trust Cut-Off Date or which wereacquired from another institution. Moreover, additional accounts may not be accounts or assets of the same typeor having the same characteristics as those previously included in the master trust. See “—Representations andWarranties.” Consequently, there can be no assurance that such additional accounts will be of the same creditquality or have the same payment characteristics as the initial accounts or the additional accounts previouslyincluded in the master trust.

Additional accounts of a type different than the initial accounts may contain receivables that consist of fees,charges and amounts that are different from the fees, charges and amounts that have been designated as financecharge receivables and principal receivables in this prospectus and participations in receivables may be added tothe master trust as additions. In either case, the servicer will designate the portions of funds collected or to becollected in respect of such receivables to be treated for purposes of the pooling agreement as principalreceivables and finance charge receivables. The pooling agreement provides that the transferor may addparticipations to the master trust that may have characteristics substantially different than those of accounts oradditional accounts, including substantially different eligibility requirements, payment characteristics and risks.

Removal of Master Trust Assets

On any day of any month, the transferor will have the right to require the reassignment to it or its designeeof all the master trust trustee’s right, title and interest in, to and under the receivables then existing and thereaftercreated in accounts designated by the transferor, all recoveries and insurance proceeds allocable to all of theforegoing, all collections with respect to all of the foregoing, all monies due or to become due and all amountsreceived or receivable with respect to all of the foregoing and all proceeds thereof, upon satisfaction of thefollowing conditions:

• the transferor shall have given the master trust trustee, the servicer, each rating agency and certainproviders of series enhancement written notice of such removal specifying the date for removal of theremoved accounts;

• the transferor shall have delivered to the master trust trustee an account schedule containing a true andcomplete list of the removed accounts specifying for each such account, as of the removal date, itsaccount number, the aggregate amount outstanding in such account and the aggregate amount ofprincipal receivables outstanding in such account;

• the aggregate amount of principal receivables to be removed shall not equal or exceed 5% of theaggregate amount of principal receivables in the master trust;

• the transferor shall have represented and warranted as of each removal date that the list of removedaccounts delivered as described in the second clause above, as of the removal notice date, is true andcomplete in all material respects;

• the transferor shall have received written notice from each rating agency that such removal will notresult in the reduction, qualification or withdrawal of its rating of any outstanding series or class ofinvestor certificates; and

• the transferor shall have delivered to the master trust trustee and any series enhancer entitled thereto anofficer’s certificate of the transferor, dated the removal date, to the effect that the transferor reasonablybelieves that the removal will not, based on facts known to such officer at the time of the certification,cause a Pay Out Event or any event that, after the giving of notice or the lapse of time, would constitutea Pay Out Event to occur for any series.

Such removal could occur for a number of reasons, including a determination by the transferor that themaster trust contains more receivables than the transferor is obligated to retain in the master trust under thepooling agreement and any applicable series supplements and a determination that the transferor does not desireto obtain additional financing at the time through the master trust.

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Upon satisfaction of the above conditions, the transferor and the master trust trustee shall execute anddeliver a written reassignment and the master trust trustee shall transfer, assign, set over and otherwise convey tothe transferor or its designee, without recourse, representation or warranty, all the right, title and interest of themaster trust trustee in and to the receivables existing at the close of business on the removal notice date andthereafter created in the removed accounts, all recoveries and insurance proceeds allocable to all of the foregoing,all collections allocable to the foregoing, all monies due or to become due and all amounts received or receivablewith respect to all of the foregoing and all proceeds thereof.

In addition to the foregoing, on the date when any receivable in an account becomes a Defaulted Receivable(including any related finance charge receivables), the master trust trustee shall automatically transfer, set overand otherwise convey to the transferor all right, title and interest of the master trust trustee in and to theDefaulted Receivables (including any related finance charge receivables) in such account, all insurance proceedsallocable to all of the foregoing, all collections with respect to all of the foregoing, all monies due or to becomedue and all amounts received or receivable with respect to all of the foregoing and, all proceeds thereof. See“—Allocation Percentage.”

Furthermore, the transferor’s designation of any account as a removed account will be random, unless thetransferor’s designation of any such account is (1) in response to a third-party action or decision not to act andnot the unilateral action of the transferor or (2) because such account contains Defaulted Receivables.Furthermore, the removed accounts shall not, as of the removal notice date, contain principal receivables whichin the aggregate exceed an amount equal to the positive difference, if any, between the Master Trust TransferorInterest and the Master Trust Required Transferor Interest.

Application of Collections

For as long as the bank remains the servicer under the pooling agreement and either:

• the bank provides to the transferor and the master trust trustee a letter of credit covering collection riskof the servicer acceptable to each rating agency (as evidenced by a letter from each such ratingagency), or

• if the master trust collection account is maintained with the bank, the bank maintains a certificate ofdeposit rating of at least A-1 by Standard & Poor’s Ratings Services and P-1 by Moody’s InvestorsService, Inc.

the bank, as the servicer, may use for its own benefit all collections received on the receivables in each monthuntil 12:00 noon, Richmond, Virginia time, on the Business Day before the related Distribution Date or, in thecase of any collections consisting of interchange, not later than 12:00 noon, Richmond, Virginia time, on eachDistribution Date, at which time it will deposit all such collections, to the extent described below, into the mastertrust collection account. The bank, as the servicer, will make the deposits and payments to the accounts andparties described in this prospectus and in the related prospectus supplement on the date of such deposit.However, if the bank is no longer the servicer or fails to maintain the required letter of credit covering collectionrisk or certificate of deposit rating, the servicer will make such deposits, as described below, not later than 2Business Days after the date of processing or, in the case of collections consisting of interchange, not later than12:00 noon, Richmond, Virginia time, on each Distribution Date. Currently, the bank does not have such a letterof credit or such a certificate of deposit rating from Standard & Poor’s or Moody’s.

The servicer will only be required to deposit collections into the master trust collection account up to theaggregate amount of collections required to be deposited into an account established for any series or, withoutduplication, distributed on or prior to the related Distribution Date to investor certificateholders of any series orto COMET of any series enhancement pursuant to the terms of any series supplement or series enhancement

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agreement plus the aggregate amount of the unamortized portion of any collections of annual membership feesplus the aggregate amount of the unamortized portion of any collections representing recoveries. If at any timeprior to such Distribution Date the amount of collections deposited in the master trust collection account exceedsthe amount required to be deposited as described in the sentence above, the servicer will withdraw such excessfrom the master trust collection account and pay it to the holder of the Master Trust Transferor Interest.Additionally, Finance Charge Collections and Principal Collections allocated to the COMT collateral certificate(solely to the extent that those collections are in excess of a required deposit amount, calculated pursuant to theSeries 2002-CC supplement, that estimates for the related month the aggregate amount of principal, interest andcertain other amounts accruing in respect of all outstanding notes, as well as the Monthly Servicing Fee) may beheld by the servicer and not deposited in the master trust collection account until the related Distribution Date.Any of those collections not deposited in the master trust collection account may be commingled with theservicer’s own funds and used for the benefit of the servicer prior to each Distribution Date. In the event of theinsolvency or bankruptcy of the servicer, or if certain time periods were to pass, the master trust, COMET andthe indenture trustee may lose any perfected security interest in any Finance Charge Collections or PrincipalCollections commingled with the funds of the servicer. See “Risk Factors—The master trust trustee and theindenture trustee may not have a perfected interest in collections and interchange commingled by the servicerwith its own funds, which could cause delayed or reduced payments to you.”

On the earlier of:

(i) the second Business Day after the day of processing of a collection; and

(ii) the day any such deposit is made into the master trust collection account or, in the case of anycollections consisting of interchange, not later than 12:00 noon, Richmond, Virginia time, on eachDistribution Date,

the servicer will withdraw the following amounts from the master trust collection account for application asindicated:

(a) the portion of Principal Collections allocated to the Master Trust Transferor Interest will bepaid to the holder of the Master Trust Transferor Interest; provided that the Master Trust TransferorInterest in principal receivables on such day (after giving effect to any new receivables transferred tothe master trust on the applicable day) exceeds the Master Trust Required Transferor Interest and theaggregate amount of principal receivables exceeds the Master Trust Required Principal Balance, butotherwise such amounts will be deposited into the master trust excess funding account;

(b) the portion of Finance Charge Collections allocated to the Master Trust Transferor Interest willbe paid to the holder of the Master Trust Transferor Interest;

(c) for investor certificates other than the COMT collateral certificate, an amount equal to theapplicable allocation percentage of the aggregate amount of such deposits in respect of finance chargereceivables and principal receivables will be applied in accordance with the related series supplement;and

(d) deposits in respect of finance charge receivables and principal receivables allocable to theCOMT collateral certificate as described in “Sources of Funds to Pay the Notes—The COMTCollateral Certificate” will be paid to COMET as holder of the COMT collateral certificate.

The servicer’s compliance with its obligations under the pooling agreement and each series supplement willbe independently verified as described under “—Evidence as to Compliance” below.

Master Trust Collection Account

The servicer has established and maintains for the benefit of the investor certificateholders of each series, inthe name of the master trust trustee, an Eligible Deposit Account called the master trust collection account,

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bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the investorcertificateholders of each series. Funds will be deposited in the master trust collection account by the servicer asdescribed above under “—Application of Collections.” Funds on deposit in the master trust collection account,except as described under “—Application of Collections” above, will not be commingled with any other fundsrelating to assets serviced by the servicer that are not in the master trust. The master trust collection account iscurrently maintained with The Bank of New York. If at any time the master trust collection account ceases to bean Eligible Deposit Account, the master trust collection account must be moved so that it will again be qualifiedas an Eligible Deposit Account.

Funds in the master trust collection account generally will be invested in Eligible Investments selected bythe servicer. Such funds may be invested in debt obligations of the banks or their affiliates so long as suchobligations qualify as Eligible Investments. Any earnings (net of losses and investment expenses) on funds in thecollection account will be paid to, or at the direction of, the transferor except as otherwise specified in the relatedseries supplement. Any funds on deposit in the collection account will remain in the collection account and willbe invested in Eligible Investments until the Business Day before the Distribution Date when they will beallocated as described in “—Application of Collections” below. The servicer will have the revocable power towithdraw funds and property from the master trust collection account and to instruct the master trust trustee tomake withdrawals and payments from the master trust collection account for the purpose of carrying out itsduties under the pooling agreement and any series supplement. The paying agent shall have the revocable powerto withdraw funds and property from the master trust collection account for the purpose of making distributionsto the investor certificateholders. The paying agent for each series is expected to be The Bank of New York.However, the related prospectus supplement may specify an alternative or additional paying agent for a series,class or tranche of notes.

Allocation Percentage

Pursuant to the pooling agreement, the servicer will allocate among each series of investor certificatesissued and outstanding and the Master Trust Transferor Interest, all amounts collected on finance chargereceivables and principal receivables, the master trust Default Amount and miscellaneous payments, based on avarying percentage called the allocation percentage. Amounts not allocated to any series will be allocated to theMaster Trust Transferor Interest. The servicer will make each allocation by reference to the applicable allocationpercentage of each series and the Master Trust Transferor Percentage, and, in certain circumstances, thepercentage interest of certain series enhancement providers, with respect to such series. For a description of howallocations will be made to the COMT collateral certificate by the master trust, see “Sources of Funds to Pay theNotes—The COMT Collateral Certificate.”

Amounts collected as membership fees for any month will be held in the master trust collection account andwill be amortized in twelve equal installments over twelve month beginning with the month following the monthin which the annual fee is billed. Each such installment of annual membership fees will be treated as a collectionof finance charge receivables in the month in which it is amortized and allocated in the manner described above.

For recoveries constituting the proceeds of any sale or initial securitization of Defaulted Receivables, suchrecoveries will be treated as Finance Charge Collections and allocated as described above over a period of time.For each month, the amount of recoveries received from the sale or initial securitization of Defaulted Receivableswhich shall be treated as Finance Charge Collections for such month shall be an amount equal to the total amountof such recoveries collected during the three months ending with such month divided by three.

Collections of receivables for any month will be allocated by the servicer first to membership fees sold tothe transferor under the receivables purchase agreement during the preceding month, second to finance chargereceivables, to the extent of finance charge receivables billed (or, in the case of annual membership fees,amortized) during the preceding month, and third to principal receivables. The servicer will, to the extent it isrequired to make daily deposits into the master trust collection account, make an estimated allocation ofcollections between annual membership fees, finance charge receivables and principal receivables on each

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deposit date and will deposit amounts into the master trust collection account as set forth above in accordancewith such allocation.

Sharing of Principal Collections

Series 2002-CC is a principal sharing series. Each of the series of certificates listed in “Annex III:Outstanding Master Trust Series” in the related prospectus supplement is a principal sharing series. The servicerwill determine the amount of Principal Collections for any month (plus miscellaneous payments and certain otheramounts) allocated to Series 2002-CC remaining after covering required deposits and distributions and anysimilar amount remaining for any other principal sharing series, and will allocate these remaining PrincipalCollections pro rata, based on the amount of the shortfall, if any, for each other principal sharing series, to coverany principal distributions to investor certificateholders and deposits to principal funding accounts for anyprincipal sharing series of master trust investor certificates which are either scheduled or permitted and whichhave not been covered out of the Principal Collections and miscellaneous payments and certain other amountsallocable to such series.

Excess Funding Account

If on any date the Master Trust Transferor Interest is less than or equal to the Master Trust RequiredTransferor Interest or the aggregate amount of principal receivables is less than the Master Trust RequiredPrincipal Balance, the servicer will not distribute to the transferor any shared principal collections that otherwisewould be distributed to the transferor, but will deposit such funds in an Eligible Deposit Account, called themaster trust excess funding account, established and maintained by the servicer for the benefit of the investorcertificateholders of each series, in the name of the master trust trustee, and bearing a designation clearlyindicating that the funds deposited therein are held for the benefit of the investor certificateholders of each series.Funds on deposit in the master trust excess funding account will be withdrawn and paid to the transferor on anyBusiness Day to the extent that the Master Trust Transferor Interest exceeds the Master Trust RequiredTransferor Interest and the aggregate amount of principal receivables exceeds the Master Trust RequiredPrincipal Balance; provided, however, that if an accumulation period, controlled amortization period or earlyamortization period starts for any principal sharing series, any funds on deposit in the master trust excess fundingaccount will be treated as shared principal collections to the extent needed to cover principal payments due forthe benefit of such series.

Funds on deposit in the master trust excess funding account will be invested by the master trust trustee, atthe direction of the servicer, in Eligible Investments. Any earnings (net of losses and investment expenses)earned on amounts on deposit in the master trust excess funding account during any month will be withdrawnfrom the master trust excess funding account and treated as Finance Charge Collections for such month.

Sharing of Excess Finance Charges

Series 2002-CC is included in a group of series of investor certificates called “Group One.” Currently,Group One consists solely of the series of certificates listed in “Annex III: Outstanding Master Trust Series” inthe related prospectus supplement and the Card series notes. Finance Charge Collections and certain otheramounts allocable to any series that are included in Group One in excess of the amounts necessary to makerequired payments for such series (including payments to the provider of any related series enhancement) that arepayable out of Finance Charge Collections, called Excess Finance Charges, will be applied to cover anyshortfalls in amounts payable from Finance Charge Collections allocable to any other series included in GroupOne, pro rata based upon the amount of the shortfall, if any, for each other series in Group One; provided,however, that the sharing of Excess Finance Charges among series in Group One will continue only until suchtime, if any, at which each transferor shall deliver to the master trust trustee a certificate of an authorized officerto the effect that the continued sharing of Excess Finance Charges would have adverse regulatory implicationsfor the transferor. Following the delivery by the transferor of any such certificates to the master trust trustee,there will not be any further sharing of Excess Finance Charges among the series in Group One. In all cases, any

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Excess Finance Charges remaining after covering shortfalls for all outstanding series in Group One will be paidto the transferor. While any series issued by the master trust may be included in Group One, there can be noassurance that:

• any other series will be included in Group One,

• there will be any Excess Finance Charges for Group One for any month, or

• the transferor will not at any time deliver a certificate as described above.

While the transferor does not believe that, based upon applicable rules and regulations as currently in effect,the sharing of Excess Finance Charges among series in Group One will have adverse regulatory implications forthe bank, there can be no assurance that this will continue to be true in the future.

Defaulted Receivables; Rebates and Fraudulent Charges; Recoveries

The current policy of the bank is to charge off as uncollectible an account at 180 days past due, except foraccounts on which no payments have ever been received since the origination of such account. These accountsare charged off (net of collateral) at 120 days past due. The bank generally charges off a bankrupt customer’saccount within 30 days after receiving the bankruptcy petition. The bank charges off accounts of deceasedaccountholders within 60 days after receiving proper notice if no estate exists against which a proof of claim canbe filed, no other parties remit payments or no other responsible party is available. From time to time, the banksells portfolios of charged off accounts to third parties.

On the date when any receivable in an account becomes a Defaulted Receivable (including any relatedfinance charge receivables), the master trust will automatically transfer to the transferor all right, title and interestof the master trust in and to the Defaulted Receivables (including any related finance charge receivables) in suchaccount, all monies due or to become due with respect thereto, all proceeds thereof and any insurance proceedsrelating thereto; provided that recoveries of such account shall be applied as described in “—AllocationPercentage.”

If the servicer adjusts downward the amount of any principal receivable (other than Ineligible Receivableswhich have been, or are to be, reassigned or assigned to the transferor) because of a rebate, refund, unauthorizedcharge or billing error to an accountholder or such principal receivable was created in respect of merchandisewhich was refused or returned by an accountholder, or if the servicer otherwise adjusts downward the amount ofany principal receivable without receiving collections therefor or charging off such amount as uncollectible, thenthe amount of the principal receivables in the master trust for the month in which such adjustment takes placewill be reduced by the amount of the adjustment. Furthermore, in the event that the exclusion of any suchreceivables would cause the Master Trust Transferor Interest in principal receivables at such time to be anegative number, the transferor shall be required to make an Adjustment Payment in an amount equal to suchdeficiency into the master trust collection account on such Distribution Date.

The Base Certificate; Additional Transferors

The pooling agreement provides that the transferor may exchange a portion of the Base Certificate or itsuncertificated interest in the Master Trust Transferor Interest, if any, for a supplemental certificate or anuncertificated interest in the Master Trust Transferor Interest for transfer or exchange to a person designated bythe transferor upon the execution and delivery of a supplement to the pooling agreement (which supplement willbe subject to the amendment section of the pooling agreement to the extent that it amends any of the terms of thepooling agreement; see “—Amendments to the Pooling Agreement”), provided that prior to such transfer orexchange:

(a) the transferor shall have received written notice from each rating agency that such transfer or exchangewill not cause a reduction, qualification or withdrawal of the rating of the investor certificates of any

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outstanding series and shall have delivered copies of the written notice to the servicer and the mastertrust trustee, and

(b) the transferor shall have delivered to the master trust trustee, each rating agency and certain providersof series enhancement a master trust tax opinion about the transfer or exchange.

Any transfer or exchange of a supplemental certificate or an uncertificated interest in the Master Trust TransferorInterest is subject to the conditions set forth in the preceding sentence. See “—Assumption of the Transferor’sObligations.” The pooling agreement provides that a Base Certificate and any supplemental certificates may bein certificated or uncertificated form.

The transferor may designate one or more of its affiliates to be included as an additional transferor under thepooling agreement (by means of an amendment to the pooling agreement that will not require the consent of anyinvestor certificateholder; see “—Amendments to the Pooling Agreement” below). Any additional transferor maycease to transfer newly arising receivables to the master trust trustee upon written notice from each rating agencythat such cessation will not cause a reduction, qualification or withdrawal of the rating of the investor certificatesof any series. In connection with such designation, the transferor will surrender the Base Certificate to the mastertrust trustee in exchange for a newly issued Base Certificate modified to reflect such additional Master TrustTransferor Interest; provided, however, that:

(i) the conditions set forth in the preceding paragraph for the issuance of a supplemental certificate shallhave been satisfied for the designation of an additional transferor, and

(ii) any applicable conditions described in “—Assumption of the Transferor’s Obligations” shall have beensatisfied for the transfer of receivables or participations in receivables by any additional transferor tothe master trust. Following the inclusion of an additional transferor, the additional transferor will betreated in the same manner as the transferor described herein and references herein to the transferorshall be references to each transferor.

Master Trust Termination

The master trust will terminate on the Master Trust Termination Date. Upon termination of the trust, allright, title and interest in the receivables and other funds of the master trust (other than amounts in accountsmaintained by the trust for the final payment of principal and interest to investor certificateholders) will beconveyed and transferred to the transferor.

Pay Out Events

A Pay Out Event under the pooling agreement will cause the early redemption of the notes. See “TheNotes—Early Redemption Events.” A Pay Out Event refers to any of the following events:

(a) failure on the part of the transferor (i) to make any payment or deposit on the date required under thepooling agreement or the Series 2002-CC supplement within 5 Business Days after the day suchpayment or deposit is required to be made or (ii) to observe or perform any other covenants oragreements of the transferor set forth in the pooling agreement or the Series 2002-CC supplement,which failure has a material adverse effect on the investor certificateholders and which continuesunremedied for a period of 60 days after written notice of such failure;

(b) any representation or warranty made by the transferor in the pooling agreement or the Series 2002-CCsupplement or any information required to be given by the transferor to the master trust trustee toidentify the accounts proves to have been incorrect in any material respect when made or whendelivered and continues to be incorrect in any material respect for a period of 60 days after written

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notice of such failure and as a result of which the interests of the investor certificateholders arematerially and adversely affected, except that a Pay Out Event described in this subparagraph clause(b) will not occur if the transferor has accepted reassignment of the related receivable or all of suchreceivables, if applicable, during such period in accordance with the provisions of the poolingagreement;

(c) a failure by the transferor to make an addition of accounts to the master trust within 5 Business Daysafter the day on which it is required to make such addition pursuant to the pooling agreement or theSeries 2002-CC supplement;

(d) any Servicer Default;

(e) certain events of insolvency, conservatorship, receivership or bankruptcy relating to the transferor(including any additional transferor) or the bank or any other owner of accounts the receivables ofwhich have been transferred to the master trust, provided that, at the time such events occur, the mastertrust includes receivables transferred by such transferor or account owner;

(f) the transferor is unable for any reason to transfer receivables to the master trust in accordance with theprovisions of the pooling agreement;

(g) the bank or any other owner of accounts the receivables of which have been transferred to the mastertrust is unable for any reason to sell receivables to the transferor in accordance with the provisions ofthe related receivables purchase agreement; or

(h) the master trust becomes an “investment company” within the meaning of the Investment CompanyAct of 1940, as amended.

In the case of any event described in clause (a), (b) or (d) above, a Pay Out Event will occur only if, after theapplicable grace period, either the master trust trustee or the noteholders evidencing interests aggregating morethan 50% of the Adjusted Outstanding Dollar Principal Amount of the outstanding notes, by written notice to thetransferor and the servicer (and to the master trust trustee if given by the investor certificateholders) declare thata Pay Out Event has occurred as of the date of such notice.

In the case of any event described in clause (c), (e), (f), (g) or (h), a Pay Out Event will occur without anynotice or other action on the part of the master trust trustee or the noteholders immediately upon the occurrenceof such event.

In addition to the consequences of a Pay Out Event discussed above, if an insolvency event which involveseither of the banks occurs, such bank will immediately cease to transfer principal receivables to the transferor,and the transferor will be unable to transfer principal receivables to the master trust trustee. Such bank willimmediately give notice to the transferor and the master trust trustee. If a bankruptcy or insolvency event whichinvolves the transferor occurs, the transferor will immediately cease to transfer principal receivables to themaster trust trustee. The transferor will give notice of the event to the master trust trustee and the servicer. Solong as any series issued prior to April 1, 2001 is outstanding, within 15 days the master trust trustee will publisha notice of the occurrence of such event stating that the trustee intends to sell, dispose of or otherwise liquidatethe receivables in the master trust by the solicitation of competitive bids and on terms equivalent to the bestpurchase offer as determined by the master trust trustee, unless within 90 days from the date such notice ispublished, the holders of more than 50% of the aggregate unpaid principal amount of each outstanding series or,if a series includes more than one class, each class of such series evidencing more than 50% of the aggregateunpaid principal amount of each such series or class (and, to the extent provided in the related series supplement,any credit enhancement provider for such series) instruct the master trust trustee not to dispose of or liquidate thereceivables and to continue transferring principal receivables as before such event. The proceeds from any suchsale, disposition or liquidation of the receivables will be deposited in the master trust collection account and

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allocated as described in the pooling agreement and each series supplement. If the sum of (a) the portion of suchproceeds allocated to any series and (b) the proceeds of any collections on the receivables in the master trustcollection account allocated to such series is not sufficient to pay the Invested Amount of the investor certificatesof such series in full, the related investor certificateholders, and in the case of the COMT collateral certificate,the noteholders, will incur a loss.

In addition to the consequences of a Pay Out Event discussed above, if a conservator or receiver wereappointed for an additional transferor or if certain other events relating to bankruptcy, insolvency or receivershipof that additional transferor occur, pursuant to the pooling agreement, on the day of such event, the additionaltransferor will immediately cease to transfer principal receivables to the master trust trustee and promptly givenotice to the master trust trustee of such event.

New Issuances

The pooling agreement provides that, pursuant to one or more series supplements, the transferor may causethe master trust trustee to issue one or more new series of investor certificates and may define all principal termsof such series. Each series may have different terms and enhancements than any other series. None of thetransferor, the servicer, the master trust trustee or the master trust is required or intends to obtain the consent ofany investor certificateholder of any other series (or any noteholder) issued prior to the issuance of a new series.The transferor may offer any series to the public under a prospectus and prospectus supplement or otherdisclosure document in transactions either registered under the Securities Act of 1933, as amended, or exemptfrom registration thereunder directly, through one or more underwriters or placement agents, in fixed-priceofferings or in negotiated transactions or otherwise.

Under the pooling agreement, the obligation of the master trust trustee to issue the investor certificates of anew series and to execute and deliver the related series supplement is subject to the following conditions, amongothers:

‰ on or before the fifth business day immediately preceding the date upon which the new issuance is tooccur, the transferor will give to the master trust trustee, the servicer, each rating agency and certainproviders of series enhancement notice of such new issuance and the date upon which the new issuanceis to occur;

‰ the transferor will deliver to the master trust trustee a series supplement, specifying the terms of theseries;

‰ the transferor will deliver to the master trust trustee any related series enhancement agreement;

‰ the transferor will receive written notice from each rating agency that such new issuance will not causea reduction, qualification or withdrawal of the rating of the investor certificates of any outstandingseries;

‰ the transferor will deliver to the master trust trustee and certain providers of series enhancement anofficer’s certificate of the transferor to the effect that such issuance will not cause a Pay Out Event orany event that, after the giving of notice or the lapse of time, would constitute a Pay Out Event to occurfor any series;

‰ the transferor will deliver to the master trust trustee, each rating agency and certain providers of seriesenhancement a master trust tax opinion; and

‰ the transferor will deliver to the master trust trustee and certain providers of series enhancement anofficer’s certificate of the transferor to the effect that the Master Trust Transferor Interest will not beless than 2% of the total amount of principal receivables, as of the date upon which the new issuance isto occur after giving effect to such new issuance.

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Representations and Warranties

The transferor has made in the pooling agreement certain representations and warranties to the master trustabout the accounts and the receivables to the effect, among other things, that as of the substitution date and eachcut-off date for the addition of accounts:

‰ each additional account was an Eligible Account,

‰ each of the receivables existing in an additional account is an Eligible Receivable,

‰ upon the creation of any new receivable transferred by the transferor to the master trust, suchreceivable is an Eligible Receivable, and

‰ each receivable transferred by the transferor to the master trust trustee is free and clear of any liens(other than those provided for in the pooling agreement).

Prior to the substitution date, the bank made similar representations and warranties relating to receivablesthat were transferred by the bank to the master trust. For so long as such receivables are assets of the master trust,then the representations and warranties made by the banks regarding those receivables will be in effect andenforceable.

If the transferor, or either of the banks with respect to receivables transferred to the master trust prior to thesubstitution date, breaches any representation and warranty described in the preceding paragraphs and suchbreach remains uncured for 60 days, or such longer period, not in excess of 150 days, as may be agreed to by themaster trust trustee, after the earlier to occur of the discovery of such breach by the transferor or the banks, asapplicable, or receipt of written notice of such breach by the transferor, and such breach has a material adverseeffect on the investor certificateholders’ interest of all series in any receivable (which determination shall bemade without regard to the availability of funds under any credit enhancement), the investor certificateholders’interest in such Ineligible Receivables will be reassigned to the transferor, or either of the banks with respect toreceivables transferred to the master trust prior to the substitution date, on the terms and conditions set forthbelow and the related account shall no longer be included as an account in the Master Trust Portfolio.

An Ineligible Receivable will be reassigned to the transferor, or either of the banks with respect toreceivables transferred to the master trust prior to the substitution date, on or before the end of the month inwhich such reassignment obligation arises by the transferor directing the servicer to deduct the portion of suchIneligible Receivable that is a principal receivable from the aggregate amount of the principal receivables used tocalculate the Master Trust Transferor Interest. In the event that the exclusion of an Ineligible Receivable from thecalculation of the Master Trust Transferor Interest would cause the Master Trust Transferor Interest to be anegative number, on the Distribution Date following the month in which such reassignment obligation arises, thetransferor will make a deposit in immediately available funds in an amount equal to the principal portion and theinterest portion of the amount by which the Master Trust Transferor Interest would be reduced below zero (up tothe amount of such principal receivables) into the master trust excess funding account and the master trustcollection account, respectively. Any amount deposited into the master trust excess funding account and themaster trust collection account, respectively, in connection with the reassignment of an Ineligible Receivable,called a Transfer Deposit Amount, shall be considered a payment in full of the Ineligible Receivable. Thereassignment of any Ineligible Receivable to the transferor is the sole remedy respecting any breach of therepresentations and warranties described in the preceding paragraphs about such receivable available to investorcertificateholders of any series (or the master trust trustee on behalf of such investor certificateholders) or anyprovider of series enhancement.

Capital One Funding, as transferor, made as of the date it became the transferor and will also make as ofeach series issuance date representations and warranties to the master trust to the effect, among other things, that:

‰ it is a limited liability company validly existing under the laws of the Commonwealth of Virginia; ithas, in all material respects, full power and authority to consummate the transactions contemplated by

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the related series supplement; and each of the receivables purchase agreement, the pooling agreementand the related series supplement constitutes a valid, binding and enforceable agreement of thetransferor; and

‰ the pooling agreement constitutes either:

—a valid sale, transfer and assignment to the master trust trustee (subject to Section 9-315 of the UCC,as such transfer pertains to proceeds, and subject to certain tax liens) of all right, title and interest ofthe transferor in the receivables and the proceeds thereof (including proceeds in any of the accountsestablished for the benefit of the investor certificateholders); or

—the grant of a first priority perfected security interest in such receivables and the proceeds thereof(including proceeds in any of the accounts established for the benefit of the investorcertificateholders) under the UCC as in effect in Virginia and any other state where the filing of afinancing statement is required to perfect the master trust’s interest in the receivables and theproceeds thereof, which is effective as to each receivable then existing on the applicable seriesissuance date or, as to each receivable arising thereafter, upon the creation thereof and untiltermination of the master trust.

Prior to the substitution date, the banks made similar representations and warranties relating to the poolingagreement and the related series supplements as of the date of each series issuance date. For so long asreceivables transferred by the banks prior to the substitution date are assets of the master trust, then therepresentations and warranties made by the banks with respect to the pooling agreement and the related seriessupplements will be in effect and enforceable.

In the event that the breach of any of the representations and warranties described in the precedingparagraphs has a material adverse effect on the investor certificateholders’ interest in the receivables transferredto the master trust by the transferor, or by the banks with respect to receivables transferred to the master trustprior to the substitution date, either the master trust trustee or the holders of investor certificates evidencing notless than 50% of the aggregate unpaid principal amount of the investor certificates of all series, by written noticeto the transferor and the servicer (and the master trust trustee if given by the holders of the requisite percentage ofinvestor certificates of all series), may direct the transferor or the banks, as applicable, to accept the reassignmentof the receivables if such breach and any material adverse effect caused by such breach is not cured within 60days of such notice (or within such longer period, not in excess of 150 days, as may be specified in such notice).The transferor or the banks, as applicable, will be obligated to accept the reassignment of the receivables on theDistribution Date following the month in which such reassignment obligation arises. Such reassignment will notbe required to be made, however, if:

‰ at the end of such applicable period, the representations and warranties shall then be true and correct inall material respects as if made on such day; and

‰ the transferor or the banks, as applicable, shall have delivered to the master trust trustee an officer’scertificate describing the nature of such breach and the manner in which the relevant representation andwarranty became true and correct and the breach of such representation and warranty shall no longermaterially adversely affect the investor certificateholders and any material adverse effect caused bysuch breach shall have been cured.

The price for such reassignment will generally be equal to the aggregate invested amounts and enhancementinvested amounts of all series on the Distribution Date on which the reassignment is scheduled to be made plusaccrued and unpaid interest on the unpaid principal amount of all series and any interest amounts that were duebut not paid on a prior date and interest on such overdue interest amounts (if the applicable series supplement soprovides) at the applicable certificate rates through the day preceding such Distribution Date. The payment ofsuch reassignment price, in immediately available funds, will be considered a payment in full of all receivablesand the principal portion of such funds and the interest portion of such funds will be deposited in the master trust

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collection account. If the master trust trustee or the requisite percentage of investor certificateholders of all seriesgives a notice as provided above, the obligation of the transferor or the banks, as applicable, to make any suchdeposit will constitute the sole remedy respecting a breach of the representations and warranties available toinvestor certificateholders of all series (or the master trust trustee on behalf of such investor certificateholders) orany provider of series enhancement.

It is not required or anticipated that the master trust trustee will make any initial or periodic generalexamination of any documents or records related to the receivables or the accounts for the purpose ofestablishing the presence or absence of defects, compliance with the transferor’s, or the banks’, as applicable,representations and warranties or for any other purpose. In addition, it is not anticipated or required that themaster trust trustee will make any initial or periodic general examination of the servicer for the purpose ofestablishing the compliance by the servicer with its representations or warranties or the performance by theservicer of its obligations under the pooling agreement or for any other purpose. The servicer, however, willdeliver to the master trust trustee on or before April 30 of each calendar year an opinion of counsel with respectto the validity of the interest of the master trust in and to the receivables and certain other components of themaster trust.

The Servicer

Servicer Covenants

In the pooling agreement, the servicer has covenanted as to each receivable and related account that:

‰ it will duly satisfy all obligations on its part to be fulfilled under or in connection with the receivablesand the related accounts, and will maintain in effect all qualifications required in order to service thereceivables and the related accounts and will comply in all material respects with all other requirementsof law in connection with servicing the receivables and the related accounts, the failure to comply withwhich would have a material adverse effect on the investor certificateholders;

‰ it will not authorize any rescission or cancellation of a receivable except as ordered by a court ofcompetent jurisdiction or other governmental authority or in accordance with the bank’s lendingguidelines;

‰ it will take no action which, nor omit to take any action the omission of which, would substantiallyimpair the rights of the master trust trustee in the receivables or the related accounts;

‰ it will not reschedule, revise or defer collections due on the receivable except in accordance with itsordinary course of business and the bank’s lending guidelines; and

‰ except in connection with its enforcement or collection of an account, it will take no action to causeany receivables to be evidenced by any instrument or chattel paper (as defined in the UCC) and, if anyreceivable is so evidenced as a result of the servicer’s action, it shall be deemed to be an IneligibleReceivable and shall be assigned to the servicer as provided below; provided, however, that suchreceivables evidenced by instruments or chattel paper taken from obligors in the ordinary course of theservicer’s collection efforts shall not be deemed Ineligible Receivables solely as a result thereof.

Under the terms of the pooling agreement, in the event any of the representations, warranties or covenants ofthe servicer contained in the clauses above with respect to any receivable or the related account is breached, andsuch breach has a material adverse effect on the master trust trustee’s interest in such receivable (whichdetermination shall be made without regard to the availability of funds under any credit enhancement) and is notcured within 60 days (or such longer period, not in excess of 150 days, as may be agreed to by the master trusttrustee) from the earlier to occur of the discovery of such event by the servicer, or receipt by the servicer ofwritten notice of such event given by the transferor or the master trust trustee, then all receivables in the accountor accounts to which such event relates shall be assigned to the servicer on the terms and conditions set forth

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below; provided, however, that such receivables will not be assigned to the servicer if, on any day prior to the endof such 60-day or longer period:

‰ the relevant representation and warranty shall be true and correct, or the relevant covenant shall havebeen complied with, in all material respects, and

‰ the servicer shall have delivered to the transferor and the master trust trustee an officer’s certificatedescribing the nature of such breach and the manner in which such breach was cured.

Such assignment and transfer will be made when the servicer deposits an amount equal to the amount ofsuch receivable in the master trust collection account on the business day preceding the Distribution Datefollowing the month during which such obligation arises. The amount of such deposit will be deemed a TransferDeposit Amount under the pooling agreement. This reassignment or transfer and assignment to the servicerconstitutes the sole remedy available to the investor certificateholders of any series if such representation,warranty or covenant of the servicer is not satisfied and the master trust trustee’s interest in any such reassignedreceivables shall be automatically assigned to the servicer.

Limitation on Liability of the Servicer

The servicer will indemnify and hold harmless the transferor, the master trust and the master trust trusteefrom and against any loss, liability, expense, damage or injury suffered or sustained by reason of any acts oromissions of the servicer with respect to the master trust pursuant to the pooling agreement. However, unless theservicer performs any of its duties by reason of willful misfeasance, bad faith or gross negligence, or by reason ofreckless disregard of its obligations and duties under the pooling agreement, neither the servicer nor any of thedirectors, officers employees or agents of the servicer in its capacity as servicer will be under any liability to thetransferor, the master trust, the master trust trustee, the investor certificateholders, any series enhancer or anyother person for any action taken or for refraining from the taking of any action in good faith in its capacity asservicer under the pooling agreement.

Servicing Compensation and Payment of Expenses

The share of the master trust servicing fee allocable to the COMT collateral certificate for any DistributionDate, called the Monthly Servicing Fee, will equal one-twelfth of the product of (i) 2.0% and (ii) the numeratorused to calculate the Floating Allocation Percentage for the COMT collateral certificate for the month precedingsuch Distribution Date, except that for the first Distribution Date, the Monthly Servicing Fee will be equal theproduct of (i) 2.0%, (ii) the numerator used to calculate the Floating Allocation Percentage for the COMTcollateral certificate for the first month, and (iii) a fraction, the numerator of which is the actual number of daysduring the period from and including the initial issuance date of any notes through and including the last day ofthe following month and the denominator of which is 360. On each Distribution Date, if the bank or The Bank ofNew York is the servicer, servicer interchange for the related month that is on deposit in the master trustcollection account will be withdrawn from the master trust collection account and paid to the servicer in paymentof a portion of the Monthly Servicing Fee for such month.

The servicer interchange for any month for which the bank or The Bank of New York is the servicer will bean amount equal to the product of the numerator used to calculate the Floating Allocation Percentage for theCOMT collateral certificate for the month and the portion of Finance Charge Collections allocated to theInvested Amount for the COMT collateral certificate for such month that is attributable to interchange. However,servicer interchange for a month will not exceed one-twelfth of the product of (i) 0.75% and (ii) the numeratorused to calculate the Floating Allocation Percentage for the COMT collateral certificate for the month; exceptthat for the first Distribution Date, the servicer interchange may equal but shall not exceed the product of(i) 0.75%, (ii) the numerator used to calculate the Floating Allocation Percentage for the COMT collateralcertificate for the month, and (iii) a fraction, the numerator of which is the actual number of days during theperiod from and including the initial issuance date of any notes through and including the last day of thefollowing month and the denominator of which is 360. In the case of any insufficiency of servicer interchange on

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deposit in the master trust collection account, a portion of the Monthly Servicing Fee allocable to the COMTcollateral certificate for such month will not be paid to the extent of such insufficiency and in no event shall themaster trust, the master trust trustee, the COMT collateral certificateholder, COMET, the indenture trustee or thenoteholders be liable for the share of the servicing fee to be paid out of servicer interchange.

The share of the Monthly Servicing Fee allocable to the COMT collateral certificate for any DistributionDate, called the certificateholder servicing fee, is equal to one-twelfth of the product of (i) the numerator used tocalculate the Floating Allocation Percentage for the COMT collateral certificate for the month and (ii) 1.25%, orif the bank or The Bank of New York is not the servicer, 2.0%; except that for the first Distribution Date thecertificateholder servicing fee will be equal to the product of (i) the numerator used to calculate the FloatingAllocation Percentage for the COMT collateral certificate for the month, (ii) 1.25%, or if the bank or The Bankof New York is not the servicer, 2.0% and (iii) a fraction, the numerator of which is the actual number of daysduring the period from and including the initial issuance date of any notes through and including the last day ofthe following month and the denominator of which is 360.

The portion of the Monthly Servicing Fee allocable to the COMT collateral certificate will be allocated toeach series of notes and will be paid as described in the related prospectus supplement. The remainder of theservicing fee for the master trust (including the remainder of the Monthly Servicing Fee) will be paid by themaster trust transferor or the certificateholders of other series or, to the extent of any insufficiency of servicerinterchange as described above, not be paid. In no event will COMET, the indenture trustee or the noteholders beliable for any portion of the master trust servicing fee to be paid by the master trust transferor or thecertificateholder of any other series or to be paid out of servicer interchange.

The servicer will pay from its own funds all expenses incurred in connection with servicing the receivablesin the master trust including, without limitation, expenses related to the enforcement of the receivables, paymentof the fees and disbursements of the master trust trustee, the owner trustee, the indenture trustee and independentcertified public accountants and other fees that are not expressly stated in the pooling agreement, the trustagreement, the indenture, the asset pool supplement or the applicable indenture supplement to be payable by themaster trust or the investor certificateholders of a series or the transferor (other than federal, state, local andforeign income and franchise or other taxes based on income, if any, or any interest or penalties with respectthereto of the master trust). In the event that the bank is acting as servicer and fails to pay the fees anddisbursements of the master trust trustee, the master trust trustee will be entitled to receive the portion of themaster trust servicing fee that is equal to such unpaid amounts. In no event will the investor certificateholders ofa series (including the noteholders or COMET as holder of the COMT collateral certificate) be liable to themaster trust trustee for the servicer’s failure to pay such amounts, and any such amounts so paid to the mastertrust trustee will be treated as paid to the servicer for all other purposes of the pooling agreement.

Certain Other Matters Regarding the Servicer

The servicer may not resign from its obligations and duties under the pooling agreement, except upondetermination that such duties are no longer permissible under applicable law. No such resignation will becomeeffective until the master trust trustee or a successor to the servicer has assumed the servicer’s responsibilitiesand obligations under the pooling agreement.

Any person into which, in accordance with the pooling agreement, the servicer may be merged orconsolidated or any person resulting from any merger or consolidation to which the servicer is a party, or anyperson succeeding to the business of the servicer, will be the successor to the bank, as servicer, or other servicer,as the case may be, under the pooling agreement.

Servicer Default

In the event of any Servicer Default, either the master trust trustee or investor certificateholders holdingcertificates evidencing more than 50% of the aggregate unpaid principal amount of all outstanding series, bywritten termination notice to the servicer (and to the master trust trustee, the transferor and certain providers of

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series enhancement, if given by the investor certificateholders), may terminate all of the rights and obligations ofthe servicer, as servicer, under the pooling agreement. If the master trust trustee within 60 days of receipt of suchtermination notice does not receive any bids from eligible servicers and the servicer delivers an officer’scertificate to the effect that the servicer cannot in good faith cure the Servicer Default which gave rise to suchtermination notice, then the master trust trustee shall, except when the Servicer Default is caused by theoccurrence of certain events of bankruptcy, insolvency, conservatorship or receivership of the servicer, offer thetransferor a right of first refusal to purchase the investor certificateholders’ interest for all series. The purchaseprice for such a purchase shall be paid on a Distribution Date and shall generally be equal to, for each series, thehigher of:

‰ the sum of the Invested Amount plus the enhancement Invested Amount, if any, of such series on suchDistribution Date (less the amount, if any, on deposit in any principal funding account for such series)plus accrued and unpaid interest at the applicable certificate rate (together with, if applicable, intereston interest amounts that were due and not paid on a prior date), through the last day of the calendarmonth preceding such Distribution Date; and

‰ the sum of the average bid price quoted by two recognized dealers for similar securities rated in thesame rating category as the initial rating of the investor certificates of such series with a remainingmaturity approximately equal to the remaining maturity of the investor certificates of such series plusthe enhancement invested amount, if any, of such series.

The master trust trustee shall, as promptly as possible after giving a termination notice, appoint a successorservicer. Prior to any appointment of a successor servicer, the master trust trustee will seek to obtain bids frompotential servicers meeting certain eligibility requirements set forth in the pooling agreement to serve as asuccessor servicer for servicing compensation not in excess of the master trust servicing fee. Because the bank,as servicer, has significant responsibilities with respect to the servicing of the receivables, the master trust trusteemay have difficulty finding a suitable successor servicer. If no successor servicer has been appointed by themaster trust trustee and has accepted such appointment by the time the servicer ceases to act as servicer, allrights, authority, power and obligations of the servicer under the pooling agreement shall pass to and be vested inthe master trust trustee. The Bank of New York, the master trust trustee, does not have credit card operations. IfThe Bank of New York is automatically appointed as successor servicer, it may not have the capacity to performthe duties required of a successor servicer and current servicing compensation under the pooling agreement maynot be sufficient to cover its actual costs and expenses of servicing the accounts. The rights and interest ofCapital One Funding under the pooling agreement and any series supplement in the Master Trust TransferorInterest will not be affected by any termination notice or appointment of a successor servicer.

Upon the occurrence of any Servicer Default the servicer shall not be relieved from using its best efforts toperform its obligations in a timely manner in accordance with the terms of the pooling agreement and any seriessupplement and the servicer shall provide the master trust trustee, each rating agency, each holder of the MasterTrust Transferor Interest, any provider of series enhancement and the investor certificateholders of each series anofficer’s certificate giving prompt notice of such failure or delay by it, together with a description of its efforts toso perform its obligations.

Master Trust Trustee

General

The Bank of New York, a New York banking corporation, is the master trust trustee under the poolingagreement. Its principal corporate trust office is located at 101 Barclay Street, Floor 8 West, Attention: CorporateTrust Administration—Asset Backed Securities, New York, New York 10286. The Bank of New York has andcurrently is serving as trustee for numerous securitization transactions and programs involving pools of creditcard receivables.

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Rights and Appointment of Co-Master Trust Trustees

The banks, the servicer, the transferor and their respective affiliates may from time to time enter into normalbanking and trustee relationships with the master trust trustee and its affiliates. The master trust trustee may holdinvestor certificates in its own name. For purposes of meeting the legal requirements of certain localjurisdictions, the master trust trustee will have the power to appoint a co-master trust trustee or separate mastertrust trustees of all or any part of the master trust. In the event of such appointment, all rights, powers, duties andobligations conferred or imposed upon the master trust trustee by the pooling agreement will be conferred orimposed upon the master trust trustee and such separate master trust trustee or co-master trust trustee jointly, or,in any jurisdiction in which the master trust trustee shall be incompetent or unqualified to perform certain acts,singly upon such separate master trust trustee or co-master trust trustee who shall exercise and perform suchrights, powers, duties and obligations solely at the direction of the master trust trustee.

Duties and Responsibilities

Under the terms of the pooling agreement, the servicer agrees to pay to the master trust trustee reasonablecompensation for performance of its duties under the pooling agreement. The master trust trustee has agreed toperform only those duties specifically set forth in the pooling agreement. Many of the duties of the master trusttrustee are described in this section and throughout this prospectus and the related prospectus supplement. Underthe terms of the pooling agreement, the master trust trustee’s limited responsibilities include the following:

‰ to deliver to certificateholders of record certain notices, reports and other documents received by themaster trust trustee, as required under the pooling agreement;

‰ to authenticate, deliver, cancel and otherwise administer the investor certificates;

‰ to remove and reassign Ineligible Receivables and accounts from the master trust;

‰ to establish and maintain necessary master trust accounts and to maintain accurate records of activity inthose accounts;

‰ to serve as the initial transfer agent, paying agent and registrar, and, if it resigns these duties, to appointa successor transfer agent, paying agent and registrar;

‰ to invest funds in the master trust accounts at the direction of the servicer;

‰ to represent the certificateholders in interactions with clearing agencies and other similar organizations;

‰ to distribute and transfer funds at the direction of the servicer, as applicable, in accordance with theterms of the pooling agreement;

‰ to file with the appropriate party all documents necessary to protect the rights and interests of thecertificateholders;

‰ to enforce the rights of the certificateholders against the servicer, if necessary;

‰ to notify the certificateholders and other parties, to sell the receivables, and to allocate the proceeds ofsuch sale, in the event of the termination of the master trust;

‰ to cause a sale of receivables on the legal maturity date of any accelerated tranche of notes; and

‰ to perform certain other administrative functions identified in the pooling agreement.

In addition to the responsibilities described above, the master trust trustee has the discretion to require thetransferor to cure a potential Pay Out Event and to declare a Pay Out Event. See “—Pay Out Events.”

In the event that the transferor becomes insolvent, if any series of investor certificates issued on or prior toApril 1, 2001 is outstanding, the master trust trustee shall: (1) notify the certificateholders of the insolvency,(2) dispose of the receivables in a commercially reasonable manner, and (3) allocate the proceeds of such sale.

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See “—Pay Out Events.” If a Servicer Default occurs, in addition to the responsibilities described above, themaster trust trustee may be required to appoint a successor servicer or to take over servicing responsibilitiesunder the pooling agreement. See “— The Servicer—Servicer Default.” In addition, if a Servicer Default occurs,the master trust trustee, in its discretion, may proceed to protect its rights or the rights of the investorcertificateholders under the pooling agreement by a suit, action or other judicial proceeding.

Limitation on Liability of Master Trust Trustee

The master trust trustee is not liable for any errors of judgment as long as the errors are made in good faithand the master trust trustee was not negligent.

The holders of a majority of investor certificates have the right to direct the time, method or place ofconducting any proceeding for any remedy available to the master trust trustee under the pooling agreement.

Resignation, Removal and Replacement

The master trust trustee may resign at any time, in which event the transferor will be obligated to appoint asuccessor master trust trustee. The transferor may also remove the master trust trustee if the master trust trusteeceases to be eligible to continue as such under the pooling agreement or if the master trust trustee becomesbankrupt or insolvent. In such circumstances, the transferor will be obligated to appoint a successor master trusttrustee. Any resignation or removal of the master trust trustee and appointment of a successor master trust trusteedoes not become effective until acceptance of the appointment by the successor master trust trustee.

Any successor master trust trustee will execute and deliver to the transferor, the servicer and its predecessormaster trust trustee an instrument accepting the appointment. Any successor master trust trustee must: (1) be abank or a corporation organized and doing business under the laws of the United States of America or any statethereof; (2) be authorized under such laws to exercise corporate trust powers; (3) have a combined capital andsurplus of at least $50,000,000 and subject to supervision or examination by federal or state authority; and(4) maintain any credit or deposit rating required by any note rating agency.

The servicer has agreed to pay the master trust trustee’s fees and expenses (except as those fees andexpenses may arise from negligence or bad faith by the master trust trustee). The payment of those fees andexpenses by the servicer will be made without reimbursement from any master trust account.

Indemnification

The pooling agreement provides that the servicer will indemnify the transferor, the master trust and themaster trust trustee from and against any loss, liability, expense, damage or injury suffered or sustained arisingout of the servicer’s actions or omissions with respect to the master trust pursuant to the pooling agreement.

Except as provided in the preceding paragraph, the pooling agreement provides that none of the servicer orany of its directors, officers, employees or agents will be under any other liability to the transferor, the mastertrust, the master trust trustee, the investor certificateholders, any provider of series enhancement or any otherperson for any action taken, or for refraining from taking any action, in good faith in the capacity as servicerpursuant to the pooling agreement.

In addition, the pooling agreement provides that, subject to certain exceptions, the transferor will be liable toan injured party for any losses, claims, damages or liabilities (other than those incurred by a certificateholder asan investor in the certificates or those which arise from any action of a certificateholder) arising out of or basedupon the arrangement created by the pooling agreement and the actions of the transferor taken pursuant to thepooling agreement as though the pooling agreement created a partnership under the New York UniformPartnership Law in which the transferor was a general partner.

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Except as provided in the prior paragraph, none of the transferor or any of its directors, officers, employeesor agents will be under any liability to the master trust, the master trust trustee, the certificateholders, anyprovider of a series enhancement or any other person for any action taken or for refraining from the taking of anyaction in good faith in such capacity pursuant to the pooling agreement.

However, none of the transferor, the servicer or any of their directors, officers, employees or agents will beprotected against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith orgross negligence of any such person in the performance of their duties or by reason of reckless disregard of theirobligations and duties thereunder.

In addition, the pooling agreement provides that the servicer is not under any obligations to appear in,prosecute or defend any legal action which is not incidental to its servicing responsibilities under the poolingagreement and which in its reasonable judgment may involve it in any expense or liability. The servicer may, inits sole discretion but only within the scope of its role as servicer, undertake any such legal action which it maydeem necessary or desirable for the benefit of the investor certificateholders with respect to the poolingagreement and the rights and duties of the parties thereto and the interest of such investor certificateholdersthereunder.

Evidence as to Compliance

The fiscal year for the master trust will end on December 31 of each year. The servicer will file with theSEC an annual report on Form 10-K on behalf of the master trust 90 days after the end of its fiscal year.

The servicer will deliver to the master trust trustee and, if required, file with the SEC as part of an annualreport on Form 10-K filed on behalf of the master trust and COMET, the following documents:

‰ a report regarding its assessment of compliance during the preceding fiscal year with all applicableservicing criteria set forth in relevant SEC regulations with respect to asset-backed securitiestransactions taken as a whole involving the servicer that are backed by the same types of assets as thosebacking the notes;

‰ with respect to each assessment report described immediately above, a report by a registered publicaccounting firm that attests to, and reports on, the assessment made by the asserting party, as set forthin relevant SEC regulations; and

‰ a servicer compliance certificate, signed by an authorized officer of the servicer, to the effect that:

(i) a review of the servicer’s activities during the reporting period and of its performance under thepooling agreement has been made under such officer’s supervision.

(ii) to the best of such officer’s knowledge, based on such review, the servicer has fulfilled all of itsobligations under the pooling agreement in all materials respects throughout the reporting period or, if therehas been a failure to fulfill any such obligation in any material respect, specifying each such failure knownto such officer and the nature and status thereof.

The servicer’s obligation to deliver any servicing assessment report or attestation report and, if required, tofile the same with the SEC, is limited to those reports prepared by the servicer and, in the case of reportsprepared by any other party, those reports actually received by the servicer.

Copies of all statements, certificates and reports furnished to the master trust trustee may be obtained by arequest in writing delivered to the master trust trustee.

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Amendments to the Pooling Agreement

By accepting a note, a noteholder will be deemed to acknowledge that the transferor, the servicer and themaster trust trustee may amend the pooling agreement and any series supplement (including the Series 2002-CCsupplement) without the consent of any certificateholder (including COMET) or any noteholder, so long as theamendment will not materially adversely affect the interest of any investor certificateholder (including the holderof the COMT collateral certificate).

For the purposes of any vote or consent under the pooling agreement or any series supplement:

‰ that requires the consent or vote of each investor certificateholder, each noteholder will be treated as aninvestor certificateholder;

‰ that requires the consent or vote of any series of investor certificates issued by the master trust, eachseries of notes will be treated as a series of investor certificates issued by the master trust; and

‰ that requires the consent or vote of any class of investor certificates issued by the master trust, eachtranche of notes will be treated as a class of investor certificates issued by the master trust.

No amendment to the pooling agreement will be effective unless COMET delivers the opinions of counseldescribed under “The Indenture—Tax Opinions for Amendments.”

The pooling agreement and any series supplement may be amended from time to time, including inconnection with:

‰ the assumption of the obligations of the transferor and the servicer under the pooling agreement byanother party,

‰ the provision of additional series enhancement for the benefit of investor certificateholders of anyseries,

‰ the issuance of a supplemental certificate,

‰ the addition of participations in receivables to the master trust, or

‰ the designation of an additional transferor.

Amendments to the pooling agreement and any series supplement may be made by agreement of the mastertrust trustee, the transferor and the servicer without the consent of the investor certificateholders of any series orthe consent of the provider of any series enhancement provided that:

‰ the transferor has received written notice from each rating agency that such amendment will not causea reduction, qualification or withdrawal of the rating of the investor certificates of any outstandingseries,

‰ the transferor delivers to the master trust trustee and each provider of series enhancement an officer’scertificate to the effect that such amendment will not have a material adverse effect on the interests ofthe investor certificateholders,

‰ in the case of an amendment relating to the assumption of the transferor’s or the servicer’s obligationsunder the pooling agreement by another party, all other conditions to such assumption specified in thepooling agreement have been satisfied (see “—Assumption of the Transferor’s Obligations” and “—TheServicer—Certain Other Matters Regarding the Servicer”), and

‰ all conditions to such amendment specified in the pooling agreement have been satisfied.

The pooling agreement and any series supplement may also be amended from time to time by the transferor, theservicer and the master trust trustee (a) with the consent of the holders of investor certificates evidencing not lessthan 50% of the aggregate unpaid principal amount of the investor certificates of all outstanding series affected

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for the purpose of effecting a significant change in the permitted activities of the master trust and (b) in all othercases with the consent of the holders of investor certificates evidencing not less than 662⁄3% of the aggregateunpaid principal amount of the investor certificates of all adversely affected series, for the purpose of adding anyprovisions to or changing in any manner or eliminating any of the provisions of the pooling agreement or anyseries supplement or of modifying in any manner the rights of such investor certificateholders. No suchamendment specified in clause (b) above, however, may:

‰ reduce in any manner the amount of or delay the timing of any distributions to be made to investorcertificateholders or deposits of amounts to be so distributed or the amount available under any seriesenhancement without the consent of each affected investor certificateholder;

‰ change the definition or the manner of calculating the interest of any investor certificateholder withoutthe consent of each affected investor certificateholder;

‰ reduce the percentage required to consent to any such amendment without the consent of each investorcertificateholder; or

‰ adversely affect the rating of any series or class by any rating agency without the consent of the holdersof investor certificates of such series or class evidencing not less than 662⁄3% of the aggregate unpaidprincipal amount of the investor certificates of such series or class.

Promptly following the execution of any such amendment (other than an amendment described in the firstparagraph), the master trust trustee will furnish notice of the substance of such amendment to each investorcertificateholder.

In addition, subject to any other applicable conditions described above, the Series 2002-CC supplement maybe amended by the transferor without the consent of the servicer, the master trust trustee, COMET or anynoteholder if the transferor provides the master trust trustee with (a) an opinion of counsel to the effect that suchamendment or modification would reduce the risk that the master trust would be treated as taxable as a publiclytraded partnership pursuant to Section 7704 of the Internal Revenue Code of 1986, as amended and (b) acertificate that such amendment or modification would not materially and adversely affect any investorcertificateholder (including the noteholders and COMET as holders of the COMT collateral certificate), exceptthat no such amendment (i) shall be deemed effective without the master trust trustee’s consent, if the mastertrust trustee’s rights, duties and obligations under the Series 2002-CC supplement are thereby modified or(ii) shall cause a significant change in the permitted activities of the master trust, as set forth in the poolingagreement. Promptly after the effectiveness of any such amendment, the transferor shall deliver a copy of suchamendment to each of the servicer, the master trust trustee and each rating agency.

Assumption of the Transferor’s Obligations

Each receivables purchase agreement permits a transfer of all of the applicable bank’s credit card accountsand other revolving credit accounts and the receivables arising thereunder, which may include all, but not lessthan all, of such bank’s portfolio of accounts designated to the master trust and such bank’s remaining interest inthe receivables arising thereunder. In the pooling agreement, the transferor is permitted to transfer its remaininginterest in the receivables, its interest in participations in receivables and its interest in the master trust, and thebank is permitted to transfer all servicing functions and other obligations under the pooling agreement or relatingto the transactions contemplated thereby, to another entity which may or may not ultimately be affiliated with thebank or the transferor. Pursuant to the receivables purchase agreements, the banks are permitted to sell theaccounts and the related interests only with the consent of the transferor. Pursuant to the pooling agreement, thetransferor is permitted to consent to the sale by the banks and is permitted to assign, convey and transfer its assetsand obligations to such other entity, without the consent or approval of any certificateholders or noteholders, ifthe following conditions, among others, are satisfied:

‰ the entity, the transferor and the master trust trustee have entered into an assumption agreementproviding for the entity’s assumption of the transferor’s obligations under the pooling agreement,

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including the assumption of the obligation to transfer the receivables arising under the portfolio ofaccounts in the master trust and the receivables arising under any additional accounts directly orindirectly to the master trust;

‰ each provider of series enhancement, if any, has consented to the transfer and assumption;

‰ all UCC financing statement filings required to perfect the interest of the master trust trustee in thereceivables arising under such accounts have been duly made and copies thereof will have beendelivered by the transferor to the master trust trustee;

‰ if the assuming entity is a savings and loan association, a national banking association, a bank or otherentity that is not subject to Title 11 of the United States Code, the transferor has delivered notice ofsuch transfer and assumption to each rating agency (in which case there is no requirement that suchtransfer and assumption will not have an effect on the ratings of any outstanding investor certificates)or, if the assuming entity is not any of those entities, the transferor has received written notice fromeach rating agency that such transfer and assumption will not cause a reduction, qualification orwithdrawal of the rating of the investor certificates of any outstanding series;

‰ the master trust trustee has received an opinion of counsel about the third clause above and as to certainother matters specified in the pooling agreement; and

‰ the master trust trustee has received a master trust tax opinion.

The pooling agreement and the receivables purchase agreements provide that the banks, the transferor, theassuming entity and the master trust trustee may enter into amendments to the pooling agreement and thereceivables purchase agreements to permit the transfer and assumption described above without the consent ofthe holders of any certificates or notes. After any permitted transfer and assumption, the assuming entity will beconsidered to be a “transferor” for all purposes hereof, and the prior transferor will have no further liability orobligation under the pooling agreement.

Investor Certificateholders Have Limited Control of Actions

Investor certificateholders of any series or class within a series may need the consent or approval of aspecified percentage of the Invested Amount of other series or a class of such other series to take or direct certainactions, including to require the appointment of a successor servicer after a Servicer Default, to amend thepooling agreement in some cases, and to direct a repurchase of all outstanding series after certain violations ofthe transferor’s representations and warranties. The interests of the investor certificateholders of any such seriesmay not all coincide, making it more difficult for any particular investor certificateholder to achieve the desiredresults from such vote.

The Issuing Entity

General

The issuing entity, the Capital One Multi-asset Execution Trust, also called “COMET,” will issue the notes.The address of COMET is Capital One Multi-asset Execution Trust, c/o Deutsche Bank Trust CompanyDelaware, E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre Road, Wilmington,Delaware 19805-1266. Its telephone number is (201) 593-6792.

COMET was initially capitalized by a $1 contribution from the beneficiary. No additional capitalcontributions have been made to COMET.

For a description of the assets of COMET, see “Sources of Funds to Pay the Notes—General.”

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Trust Agreement

COMET will operate pursuant to a trust agreement between Capital One Funding and Deutsche Bank TrustCompany Delaware, a Delaware banking corporation, the owner trustee. The fiscal year for COMET will end onDecember 31 of each year. The servicer will file with the SEC an annual report on Form 10-K on behalf ofCOMET 90 days after the end of its fiscal year. COMET does not have any officers or directors. Currently, itssole beneficiary is Capital One Funding. Due to the bank’s ownership of Capital One Funding, COMET is anaffiliate of the servicer, the originator and the depositor. Other affiliates of the banks may also be beneficiaries.

Amendments

Capital One Funding and the owner trustee may amend the trust agreement without the consent of thenoteholders or the indenture trustee so long as the amendment is not reasonably expected to (i) adversely affect inany material respect the interests of the noteholders or (ii) significantly change the permitted activities ofCOMET, as set forth in the trust agreement. Accordingly, neither the indenture trustee nor any holder of any notewill be entitled to vote on any such amendment.

In addition, Capital One Funding and the owner trustee may amend the trust agreement if holders of not lessthan (a) in the case of a significant change in the permitted activities of COMET which COMET does notreasonably expected to have a material adverse effect on the noteholders, a majority of the aggregate outstandingdollar principal amount of the notes affected by an amendment consent, and (b) in all other cases, 662⁄3% of theaggregate outstanding dollar principal amount of the notes affected by an amendment consent; however, unlessall of the holders of the aggregate outstanding dollar principal amount of the notes consent, the trust agreementmay not be amended for the purpose of (i) increasing or reducing the amount of, or accelerating or delaying thetiming of, collections of payments in respect of the assets of COMET or distributions that are required to bemade for the benefit of the noteholders or (ii) reducing the percentage of holders of the outstanding dollarprincipal amount of the notes, the holders of which are required to consent to any amendment.

See “The Indenture—Tax Opinions for Amendments” for additional conditions to amending the trustagreement.

Owner Trustee

Deutsche Bank Trust Company Delaware, the owner trustee, is an affiliate of Deutsche Bank TrustCompany Americas, a New York banking corporation. Deutsche Bank Trust Company Delaware has acted asowner trustee on numerous asset-backed transactions, with Deutsche Bank Trust Company Americas providingadministrative support, including credit card securitizations. While the structure among these transactions maydiffer, Deutsche Bank Trust Company Delaware is experienced in administering transactions of this kind.

For COMET, the powers and duties of the owner trustee are ministerial only. Accordingly, Capital OneFunding, as beneficiary, will direct the owner trustee in the management of COMET and its assets.

The owner trustee is indemnified from and against all liabilities, obligations, losses, damages, claims,penalties or expenses of any kind arising out of the trust agreement or any other related documents, or theenforcement of any terms of the trust agreement, the administration of COMET’s assets or the action or inactionof the owner trustee under the trust agreement, except for (1) its own willful misconduct, bad faith or negligence,(2) the inaccuracy of certain of its representations and warranties in the trust agreement, (3) its failure, acting inits individual capacity, to act as necessary to discharge any lien, pledge, security interest or other encumbranceon any part of COMET’s assets which results from actions by or claims against the owner trustee not related tothe ownership of any part of COMET’s assets, or (4) taxes, fees or other charges based on or measured by anyfees, commissions or other compensation earned by the owner trustee for acting as owner trustee under the trustagreement.

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The owner trustee may resign at any time without cause by giving written notice to the beneficiary. Theowner trustee may also be removed as owner trustee if it becomes insolvent, it is no longer eligible to act asowner trustee under the trust agreement or by a written instrument delivered to the owner trustee by thebeneficiary. In all of these circumstances, the beneficiary must appoint a successor owner trustee for COMET. Ifa successor owner trustee has not been appointed within 30 days of giving notice of resignation or removal, theowner trustee or the beneficiary may apply to any court of competent jurisdiction to appoint a successor ownertrustee to act until the time, if any, as a successor owner trustee is appointed by the beneficiary.

Any owner trustee will at all times (1) be a trust company or a banking corporation under the laws of itsstate of incorporation or a national banking association, having all corporate powers and all material governmentlicenses, authorization, consents and approvals required to carry on a trust business in the State of Delaware,(2) comply with Section 3807 (and any other applicable section) of the Delaware Statutory Trust Act, (3) have acombined capital and surplus of not less than $50,000,000 (or have its obligations and liabilities irrevocably andunconditionally guaranteed by an affiliated person having a combined capital and surplus of at least $50,000,000)and (4) have (or have a parent which has) a rating of at least Baa3 by Moody’s, at least BBB- by Standard &Poor’s or, if not rated, otherwise satisfactory to each rating agency rating the outstanding notes.

Depositor and Transferor

Capital One Funding, LLC is the depositor and transferor of COMET. Capital One Funding is also thetransferor of COMT. COMT has issued the COMT collateral certificate that is the initial asset of COMET.Capital One Funding or other affiliates of the bank may also be the depositor of other master trusts orsecuritization special purpose entities which may issue collateral certificates to be held by COMET. In addition,the bank, the savings bank and their affiliates, including non-banking affiliates, may act as transferors of assets toCOMET.

Administrator

The bank or an affiliate will be the administrator and servicer of any receivables owned by COMET andpursuant to a transfer and administration agreement, will perform all administrative functions for COMETincluding:

‰ causing the note register to be kept, and notifying the indenture trustee of any appointment of a newnote registrar and the location, or change in location, of the note registrar;

‰ preparing or obtaining the documents, legal opinions and instruments required for execution,authentication and delivery of the notes, and delivery of notes to the indenture trustee forauthentication, providing for the replacement of mutilated, destroyed, lost or stolen notes, providing forthe exchange or transfer of notes and notifying each note rating agency of the issuance of any series,class or tranche of notes;

‰ preparing or obtaining the documents, legal opinions and instruments required for execution,authentication and delivery of the notes, and delivery of notes to the indenture trustee forauthentication, providing for the replacement of mutilated, destroyed, lost or stolen notes, providing forthe exchange or transfer of notes and notifying each note rating agency of the issuance of any series,class or tranche of notes;

‰ directing the indenture trustee regarding the investment of funds in COMET accounts;

‰ preparing or obtaining the documents, legal opinions and instruments required to be delivered to theindenture trustee regarding the satisfaction and discharge of the indenture, if applicable, and preparingthe documents necessary for the indenture trustee to acknowledge the same;

‰ if the indenture trustee resigns or is removed, giving written notice of such resignation or removal andappointment to each noteholder;

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‰ preparing or causing to be prepared any required tax returns for COMET and any reporting informationfor the noteholders;

‰ preparing on behalf of COMET written instructions regarding any action proposed to be taken oromitted by the indenture trustee;

‰ furnishing to the indenture trustee a list of the names and addresses of the registered noteholders at thetimes required under the indenture;

‰ establishing reasonable rules for matters relating to an action by or a meeting of noteholders nototherwise set forth in the indenture;

‰ preparing for COMET such filings with the Securities and Exchange Commission, and providing theindenture trustee with copies thereof once filed, as required by the Securities Exchange Act of 1934, asamended, or as otherwise required in accordance with rules and regulations prescribed from time totime by the Securities and Exchange Commission;

‰ preparing, completing and delivering to the indenture trustee and the master trust trustee any monthlystatements for COMET’s assets required to be delivered to the noteholders;

‰ preparing noteholder payment instructions for COMET, and delivering the same to the indenturetrustee and the master trust trustee;

‰ preparing or obtaining any necessary opinion of counsel, issuing entity tax opinion, officer’s certificateof COMET, or other document or instrument as may be required in connection with any supplementalindenture or amendment to the indenture;

‰ giving notice to each note rating agency and collecting the votes of noteholders, as necessary, inconnection with any supplemental indenture or amendment to the indenture;

‰ causing any paying agents to execute and deliver to the indenture trustee an instrument pursuant towhich it agrees to act as paying agent;

‰ preparing officer’s certificates of COMET which direct the paying agent to pay to the indenture trusteesums held in trust by COMET or such paying agent for the purpose of discharging the indenture, ifapplicable;

‰ preparing written statements for execution by an authorized officer of COMET described in “TheIndenture—Issuing Entity’s Annual Compliance Statement”;

‰ performing or causing to be performed all things necessary to preserve and keep in full force and effectthe legal existence of COMET;

‰ giving prompt written notice to the indenture trustee and each note rating agency of each event ofdefault, each breach on the part of the servicer or the master trust transferor of its respective obligationsunder the pooling agreement, or any default of a derivative counterparty;

‰ providing to noteholders and prospective noteholders information required to be provided by COMETpursuant to Rule 144A under the Securities Act of 1933, as amended;

‰ preparing and causing COMET to file any required UCC financing statements and amendmentsthereto;

‰ preparing or obtaining the instruments, documents, agreements and legal opinions required to bedelivered by COMET and preparing any notice required to be given to the note rating agencies inconnection with the merger or consolidation of COMET or the conveyance or transfer of any ofCOMET’s property or assets;

‰ giving written notice to the affected noteholders of any optional repurchase by the servicer or itsaffiliate and to the indenture trustee and each note rating agency for any such optional repurchase orearly redemption event;

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‰ preparing or obtaining the instruments, documents, agreements and legal opinions required to bedelivered by COMET and preparing any notice required to be given by COMET to the note ratingagencies and the indenture trustee in connection with addition or removal of COMET’s assets securingthe notes;

‰ preparing for execution and delivery or filing by COMET of all supplements and amendments to thetransfer and administration agreement; and

‰ establishing and maintaining, or causing to be established and maintained, any issuing entity accounts.

In addition to the duties of the administrator described above, the administrator will perform all ministerialduties and obligations of COMET under the transfer and administration agreement, the trust agreement and theindenture (and any supplements thereto), and will perform calculations and prepare for execution by COMETand the owner trustee all documents, reports, filings, instruments, certificates and opinions as it is the duty ofCOMET or the owner trustee to prepare, file or deliver pursuant to those agreements, and at the request ofCOMET or the owner trustee will take all appropriate action that it is the duty of COMET or the owner trustee totake pursuant to such agreements. In accordance with the directions of COMET, the owner trustee or thetransferor, the administrator will also administer, perform or supervise the performance of any other activities inconnection with COMET’s assets that are not described above, so long as the administrator is expressly requestedby the owner trustee or the transferor to do so, and so long as it is reasonably within the capability of theadministrator to perform those requests.

For any matters that in the reasonable judgment of the administrator are non-ministerial, the administratorshall not take any action except upon direction of the transferor. “Non-ministerial matters” include:

‰ the amendment of or any supplement to the indenture;

‰ the initiation of any claim or lawsuit by COMET and the compromise of any action, claim or lawsuitbrought by or against COMET;

‰ the amendment, change or modification of the transfer and administration agreement, the trustagreement or the indenture (or any supplements thereto);

‰ the appointment of successor note registrars, successor paying agents and successor indenture trusteespursuant to the indenture or the appointment of successor administrators, or the consent to theassignment by the note registrar, a paying agent or the indenture trustee of its obligations under theindenture;

‰ the removal of the indenture trustee;

‰ the timing or amount of any allocation, deposit, withdrawal or payment of funds under any of thetransfer and administration agreement, the trust agreement or the indenture (or any supplementsthereto);

‰ the redemption or payment of any note, or the initiation, suspension or termination of any revolving,redemption or other period under any of the transfer and administration agreement, the trust agreementor the indenture (or any supplements thereto);

‰ the waiver of any default under any of the transfer and administration agreement, the trust agreement orthe indenture (or any supplements thereto);

‰ the release of any part of COMET’s assets; and

‰ any matter that is reserved to the discretion of COMET under any of the transfer and administrationagreement, the trust agreement, the indenture or any supplements thereto or that could have a materialimpact on the financial condition of COMET or the transferor.

The administrator will maintain appropriate books of account and records relating to services performed byit pursuant to the transfer and administration agreement, which books of account and records shall be accessible

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for inspection by COMET, the owner trustee, the indenture trustee and the transferor at any time during normalbusiness hours. As compensation for the performance of the administrator’s obligations under the transfer andservicing agreement, the administrator will be paid $1,500 per month by the transferor, in addition toreimbursement for its liabilities and extra out-of-pocket expenses related to its performance under the transferand administration agreement or under the trust agreement or the indenture (or any supplements thereto).

In addition, the bank or an affiliate will also be the servicer for other master trusts or securitization specialpurpose entities which may issue collateral certificates to be held by COMET.

Activities

COMET’s activities are limited to:

‰ acquiring and holding the collateral certificates, receivables and other assets of COMET and theproceeds from these assets;

‰ issuing notes;

‰ making payments on the notes; and

‰ engaging in other activities that are necessary or incidental to accomplish these limited purposes, whichare not contrary to maintaining the status of COMET as a “qualifying special purpose entity” underapplicable accounting literature.

For a description of the assets of COMET, see “Sources of Funds to Pay the Notes—General.”

Uniform Commercial Code financing statements have been filed, to the extent appropriate, to perfect theownership or security interests of COMET and the indenture trustee described herein. See “Risk Factors” for adiscussion of risks associated with COMET and COMET’s assets, and see “The Transferor, The Depositor andThe Receivables Purchase Agreements—Receivables Purchase Agreements,” “The Master Trust—Representations and Warranties” and “The Indenture—Issuing Entity Covenants” for a discussion of covenantsregarding the perfection of security interests.

See “The Indenture—Issuing Entity Covenants” for a discussion of the covenants that COMET has maderegarding its activities.

Sources of Funds to Pay the Notes

General

COMET’s primary assets will consist of one or more collateral certificates issued by master trusts or othersecuritization special purpose entities whose assets consist primarily of receivables arising in accounts owned orloans originated or acquired by the bank, the savings bank or any of their affiliates (including non-bankingaffiliates). Each collateral certificate will represent an undivided interest in the assets of the applicable mastertrust or applicable securitization special purpose entity. In addition to collateral certificates, the assets of COMETmay include receivables that arise in accounts owned or loans originated or acquired by the bank, the savingsbank or any of their affiliates (including any non-banking affiliate) that have been designated to be transferred toCOMET. The assets of COMET may also include the benefits of one or more derivative agreements,supplemental credit enhancement agreements or supplemental liquidity agreements, and COMET trust accountsor supplemental accounts.

As of the initial issuance date, COMET owns one collateral certificate, the COMT collateral certificateissued by the Capital One Master Trust. For a description of the COMT collateral certificate, see “—The COMTCollateral Certificate.” For a description of the master trust, see “The Master Trust.”

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Currently, the assets of COMET consist primarily of:

‰ the COMT collateral certificate; and

‰ the funds on deposit in the related COMET trust accounts.

The only amounts that will be available to fund payments on a series, class or tranche of are (1) that series’s,class’s or tranche’s allocable share of the assets that have been included in COMET, (2) shared excess FinanceCharge Amounts from other series of notes issued by COMET or series of investor certificates issued by themaster trust, if any, and (3) shared excess Principal Amounts from other series of notes issued by COMET orseries of investor certificates issued by the master trust, if any.

In addition to the Card series, COMET may issue other series of notes that are secured by the assets inCOMET.

In the future, other collateral certificates representing an undivided interest in a master trust or othersecuritization special purpose entity whose assets consist primarily of receivables arising in credit card or otherrevolving credit accounts owned by the bank, the savings bank or their affiliates may be added to COMET. Otherthan the COMT collateral certificate, the funds on deposit in the related COMET trust accounts, and any othercollateral certificates which may be added in the future, COMET does not have any other significant assets ormeans of capitalization.

The composition of the assets in COMET will likely change over time due to:

‰ COMET’s or the applicable transferor’s ability to increase and decrease the size (or Invested Amount)of the COMT collateral certificate;

‰ COMET’s or the applicable transferor’s ability to designate additional collateral certificates;

‰ COMET’s or the applicable transferor’s ability to increase and decrease the size of any or all of thecollateral certificates, and to choose to reinvest or to not reinvest principal payments in any of thosecollateral certificates without corresponding increases to all of the collateral certificates; and

‰ changes in the composition of the receivables transferred to COMET or the master trusts or othersecuritization special purpose entities which have transferred a collateral certificate to COMET as newreceivables are created, existing receivables are paid off or charged-off, additional accounts aredesignated to have their receivables included in those master trusts or other securitization specialpurpose entities or COMET and accounts are designated to have their receivables removed from thosemaster trusts or other securitization special purpose entities or from COMET.

In addition, the occurrence of a pay out event or early amortization event for a collateral certificate willresult in an early amortization of that collateral certificate. The payments made upon the occurrence of a pay outevent or early amortization event for a collateral certificate may be reinvested in another collateral certificate ordirectly in receivables or paid to noteholders whose notes are secured by those assets or to the transferor ortransferors or the holders of the Transferor Interest.

If the composition of the assets in COMET changes over time due to these or other factors, noteholders willnot be notified of such change. However, monthly reports containing information on the notes and the collateralsecuring the notes will be filed with the Securities and Exchange Commission. These reports will not be sent tonoteholders. See “Where You Can Find More Information” for information as to how these reports may beaccessed.

Addition of Assets

In the future, the assets in COMET may include collateral certificates (other than the COMT collateralcertificate) representing undivided interests in master trusts or other securitization special purpose entities, whose

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assets consist primarily of receivables arising in credit card accounts and other revolving credit accounts ownedby the bank, the savings bank or any of their affiliates, which receivables are transferred to Capital One Fundingor another affiliate of the bank for inclusion in the related master trust or securitization special purpose entity.However, prior to the addition of any such collateral certificate to COMET,

‰ each rating agency must confirm that the addition of such collateral certificate will not cause areduction, qualification or withdrawal of the ratings of any outstanding notes secured by the assets inCOMET, and

‰ COMET must deliver an officer’s certificate to the indenture trustee to the effect that such addition willnot, in the reasonable belief of the officer, based on the facts known to such officer at that time, causean early redemption event or an event that, after the giving of notice or lapse of time, would cause anearly redemption event to occur for any outstanding notes secured by the assets in COMET.

COMET is currently designated as a non-receivables asset pool and, therefore, is not eligible to havereceivables directly included in its assets.

The applicable transferor will designate the Invested Amount of any additional collateral certificate.However, the transferor may not reduce the Invested Amount of a collateral certificate without an equal orgreater reduction in the aggregate Nominal Liquidation Amount of the notes secured by the assets in COMET,unless the transferor delivers to COMET and the indenture trustee an officer’s certificate to the effect that suchreduction will not, in the reasonable belief of the officer, based on the facts known to such officer at that time,cause an early redemption event or an event that, after the giving of notice or lapse of time, would cause an earlyredemption event to occur for any outstanding notes secured by the assets in COMET.

Additional collateral certificates may not be of the same credit quality as the existing collateral certificates,and receivables arising in additional accounts or loans may not be of the same credit quality as the receivablesarising in accounts or loans, if any, already included in COMET. Additional accounts or loans may have beenoriginated by the bank, the savings bank or an affiliate using credit criteria different from those which wereapplied by the bank, the savings bank or an affiliate to the accounts or loans already included in COMET or mayhave been acquired by the bank, the savings bank or an affiliate from a third-party institution which may haveused different credit criteria from those applied by the bank, the savings bank or their affiliates to the accounts.See “Risk Factors—Addition of credit card receivables to the master trusts or other securitization specialpurpose entities or COMET may decrease the credit quality of the assets securing the repayment of your notes. Ifthis occurs, your receipt of payments of principal and interest may be reduced, delayed or accelerated.”

The transfer to COMET of additional collateral certificates or receivables arising in additional accounts orloans or the increase of the Invested Amount of an existing collateral certificate, may be subject to conditionsdescribed in the related prospectus supplement.

The COMT Collateral Certificate

As of the date of this prospectus, the primary source of funds for the payment of principal of and interest onthe notes secured by the assets of COMET is the COMT collateral certificate issued by the master trust. Thefollowing discussion summarizes the material terms of the COMT collateral certificate. This summary does notpurport to be complete and is qualified in its entirety by reference to the provisions of the pooling agreement, therelated series supplement and the COMT collateral certificate, copies of which have been filed as exhibits to theregistration statement of which this prospectus forms a part. For a description of the master trust and its assets,see “The Master Trust.”

The COMT collateral certificate represents an undivided interest in the assets of the Capital One MasterTrust, the master trust. The COMT collateral certificate is the only certificate issued pursuant to Series 2002-CCof the master trust. The assets of the master trust consist primarily of credit card receivables arising in selected

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MasterCard and VISA revolving credit card accounts, which receivables have been transferred by the bank or thesavings bank to Capital One Funding and have been transferred by Capital One Funding to the master trust. Theamount of credit card receivables in the master trust will fluctuate from day to day as new credit card receivablesare generated or included in or removed from the master trust and as other credit card receivables are paid off,charged off as uncollectible or otherwise adjusted.

The COMT collateral certificate has no specified interest rate. COMET, as holder of the COMT collateralcertificate, is entitled to receive its allocable share of Finance Charge Collections and Principal Collectionspayable by the master trust and is assessed its allocable share of Default Amounts. In addition, the holder of theCOMT collateral certificate is obligated to pay the portion of the master trust servicing fee allocable to theCOMT collateral certificate.

Allocations of Default Amounts, Finance Charge Collections and Principal Collections in the master trustare made pro rata among (1) each series of investor certificates issued by the master trust, including the COMTcollateral certificate, based on each investor certificate’s respective Invested Amount, as may be adjusted for anyincreases or decreases due to payment of principal or reductions of the Invested Amount from charge-offs foruncovered Default Amounts or reallocated Principal Collections in the master trust, (2) Capital One Funding, asthe transferor of the master trust, based on the Master Trust Transferor Interest and (3) in certain circumstances,the interest of certain credit enhancement providers.

The COMT collateral certificate has a fluctuating Invested Amount, not less than zero, that is equal to theaggregate Nominal Liquidation Amount of all of the notes secured by the assets in COMET minus the aggregateInvested Amount of all other collateral certificates in COMET. Therefore, the sum of the Invested Amounts ofthe collateral certificates in COMET will increase and decrease as the Nominal Liquidation Amounts of the notessecured by the assets in COMET increase and decrease. The administrator will decide in its sole and absolutediscretion which collateral certificate Invested Amount or Invested Amounts will increase or decrease as theNominal Liquidation Amount of the notes secured by the assets in COMET increases and decreases. Principalamounts paid to the transferor or transferors may be reinvested in the COMT collateral certificate or othercollateral certificates in COMET.

The Master Trust Transferor Interest, which is owned by Capital One Funding, represents the interest in theprincipal receivables in the master trust in excess of the interests represented by the COMT collateral certificateor any other master trust series of investor certificates.

Each month, the master trust will allocate Default Amounts, Finance Charge Collections and PrincipalCollections to the investor certificates outstanding under the master trust, including the COMT collateralcertificate.

In general, the Invested Amount of each series of investor certificates (other than the COMT collateralcertificate) issued by the master trust will equal the stated dollar amount of the investor certificates issued toinvestors in that series, minus (A) unreimbursed charge-offs, if any, from uncovered Default Amounts in themaster trust allocable to that series, (B) reallocations of Principal Collections allocated to that series to covercertain shortfalls in Finance Charge Collections for that series and (C) Principal Collections deposited to a mastertrust principal funding account or paid to those investors, plus any reimbursements of the amounts described inclause (A) or (B) above.

When no principal amounts are needed for deposit into a master trust principal funding account or needed topay principal to master trust investors, Principal Collections for all master trust investor certificates are allocatedsimilarly to the allocation of Finance Charge Collections. However, Principal Collections are allocateddifferently when principal amounts are needed to be deposited into the master trust principal funding accounts forother series or paid to the master trust investors. When the principal amount of a master trust investor certificatebegins to accumulate or amortize, Principal Collections continue to be allocated to the investor certificate as if

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the Invested Amount of that investor certificate had not been reduced by Principal Collections deposited to amaster trust principal funding account or paid to master trust investors. During this time of accumulation oramortization, allocations of Principal Collections to the investors in a series of investor certificates issued by themaster trust are based on the Invested Amount of that series “fixed” at the time immediately before the firstdeposit of Principal Collections into a principal funding account or the time immediately before the first paymentof Principal Collections to investors of that series.

The COMT collateral certificate will be allocated Principal Collections at all times based on:

‰ the sum of the Nominal Liquidation Amounts of all series, classes and tranches of notes secured by theassets in COMET, minus

‰ the sum of the Invested Amounts of each of the other collateral certificates in COMET.

For series, classes and tranches of notes secured by the assets in COMET which do not require PrincipalAmounts to be deposited into a principal funding account or paid to noteholders, the Nominal LiquidationAmount calculation will be “floating,” i.e. calculated at the end of the prior month. For series, classes or tranchesof notes secured by the assets in COMET which require Principal Amounts to be deposited into a principalfunding account or paid to noteholders, the Nominal Liquidation Amount calculation will be “fixed” immediatelybefore COMET begins to allocate Principal Amounts to the principal funding subaccount for that series, class ortranche, i.e. calculated at the end of the month prior to any reductions for deposits or payments of principal.

If Principal Collections allocated to the COMT collateral certificate are needed for reallocation to covercertain shortfalls in Finance Charge Amounts, to pay the notes secured by the assets in COMET or to make adeposit into the COMET trust accounts within a month, they will be deposited into the master trust collectionaccount and then paid to COMET for deposit into the collection account. Otherwise, Principal Collectionsallocated to the COMT collateral certificate will be reallocated to other series of master trust investor certificateswhich have a shortfall in Principal Collections only to the extent other series of investor certificates have ashortfall in Principal Collections—which does not reduce the Invested Amount of the COMT collateralcertificate—or reinvested in the master trust to maintain the Invested Amount of the COMT collateral certificate.If the COMT collateral certificate has a shortfall in Principal Collections, but other series of investor certificatesissued by the master trust have excess Principal Collections, a portion of the excess Principal Collectionsallocated to other series of investor certificates issued by the master trust will be reallocated to the COMTcollateral certificate and any other master trust investor certificate which may have a shortfall in PrincipalCollections, and the COMT collateral certificate’s share of the excess Principal Collections from the other serieswill be paid to COMET and treated as Principal Amounts.

Upon a sale of credit card receivables, or interests therein, (i) if required under the pooling agreementfollowing an insolvency or bankruptcy of Capital One Funding, (ii) following an event of default andacceleration, or (iii) on the applicable legal maturity date for a series, class or tranche of notes secured by theassets in COMET, as described in the accompanying prospectus supplement, the portion of the NominalLiquidation Amount, and thereby the portion of the Invested Amount, related to that series, class or tranche willbe reduced to zero and that series, class or tranche will no longer receive any allocations of Finance ChargeCollections or Principal Collections from the master trust.

Following a Pay Out Event, which is an early redemption event for the notes secured by the assets inCOMET, Principal Collections for any month allocated to the Invested Amount of the COMT collateralcertificate will be used to cover principal payments to COMET as holder of the COMT collateral certificate. Thepayments made upon the occurrence of a Pay Out Event for the COMT collateral certificate may be reinvested inanother collateral certificate in COMET.

For a detailed description of the percentage used by the servicer in allocating to the COMT collateralcertificate Finance Charge Collections and Default Amounts, see the definition of “Floating Allocation

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Percentage” in the “Glossary of Defined Terms.” For a detailed description of the percentage used in allocatingPrincipal Collections to the COMT collateral certificate, see the definition of “Principal Allocation Percentage”in the “Glossary of Defined Terms.”

For a detailed description of the application of collections and allocation of Default Amounts by the mastertrust, see “The Master Trust—Application of Collections” and “—Defaulted Receivables; Rebates and FraudulentCharges; Recoveries.”

For a detailed description of the servicing fee to be paid in respect of the COMT collateral certificate, see“The Master Trust—The Servicer—Servicing Compensation and Payment of Expenses.”

Deposit and Application of Funds in COMET

COMET will allocate among the noteholders of each related series and the applicable transferor ortransferors, as holders of the Transferor Interest, all Finance Charge Amounts received and all Default Amountson the assets based on a varying percentage called the “Floating Allocation Percentage.” COMET will allocateamong the noteholders of each related series all Principal Amounts on the assets based on a varying percentagecalled the “Principal Allocation Percentage.” COMET will make each allocation by reference to the applicablepercentage of each series of notes. Finance Charge Amounts and Principal Amounts allocated to the noteholderswill be further allocated to each class and tranche of notes within that series and will be applied by the indenturetrustee, on instruction from COMET, in accordance with this prospectus and the related prospectus supplement.

If Principal Amounts allocable to any series for any month are less than the targeted monthly principalpayments for such series of notes, and any other series of notes has excess Principal Amounts remaining after itsapplication of its allocation as described above, then any such excess will be applied to each other series of notesin that series’s principal sharing group, to the extent such series still needs to cover a monthly principal payment,pro rata based on targeted monthly principal payments for each series that still needs to cover a targeted monthlyprincipal payment in that series’s principal sharing group.

For all series, other than the Card series, a description of the deposits and application of funds will bedescribed in the related prospectus supplement. For a description of the deposits and application of fundsspecifically relating to the Card series notes, see “Deposit and Application of Funds for Card Series Notes.”

COMET Trust Accounts

The supplemental trust accounts described in this section are referred to as COMET trust accounts. COMETtrust accounts are Eligible Deposit Accounts and amounts maintained in COMET trust accounts may only beinvested in Eligible Investments.

COMET has established a collection account for the purpose of receiving amounts payable under the COMTcollateral certificate and amounts payable under any other assets in COMET, including additional collateralcertificates that may be transferred to COMET at a later date. In connection with the Card series, COMET hasalso established a principal funding account, an interest funding account and an accumulation reserve account forthe benefit of the Card series, each of which will have subaccounts for each tranche of notes of the Card series. Inaddition, COMET has established a Class C reserve account, which will have subaccounts for each tranche ofClass C notes of the Card series, and a Class D reserve account, which will have subaccounts for each tranche ofClass D notes of the Card series.

If so specified in the related prospectus supplement, COMET may direct the indenture trustee to establishand maintain in the name of the indenture trustee supplemental trust accounts for any series, class or tranche ofnotes for the benefit of the related noteholders. The indenture trustee’s maintenance of the COMET trustaccounts and the investment of amounts therein will be verified annually by the servicer, in connection with theservicer’s annual report described in “The Master Trust—Evidence as to Compliance” in this prospectus.

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Each month, distributions on the COMT collateral certificate and any other assets in COMET will first bedeposited into the collection account, and then allocated among each series of notes— including the Card series.Amounts on deposit in the collection account for the benefit of the noteholders of the Card series will then beallocated to the applicable principal funding account, interest funding account, accumulation reserve account,Class C reserve account, Class D reserve account and any other supplemental account for the applicable class ortranche of notes to make payments under any applicable derivative agreements, supplemental credit enhancementagreements or supplemental liquidity agreements and additionally as described in “Deposit and Application ofFunds for Card Series Notes.”

Funds on deposit in the principal funding account and the interest funding account will be used to makepayments of principal of and interest on the Card series notes when such payments are due. If interest on a note isnot scheduled to be paid every month—for example, quarterly, semiannually or other interval less frequent thanmonthly—COMET will deposit accrued interest amounts funded from Card series Finance Charge Amounts intothe interest funding subaccount for that note to be held until the interest is due. See “Deposit and Application ofFunds for Card Series Notes—Targeted Deposits of Card Series Finance Charge Amounts to the InterestFunding Account.”

Beginning in the twelfth month before the Expected Principal Payment Date of a tranche of Card seriesnotes, the deposit targeted to be made into the principal funding subaccount for that tranche for each month willbe one-twelfth of the outstanding dollar principal amount of that tranche.

COMET may postpone the date of the commencement of the targeted deposits to be made to the principalfunding subaccount for a tranche of Card series notes if the servicer determines that less than 12 months will berequired to accumulate sufficient Card series Principal Amounts to pay the outstanding dollar principal amountof that tranche on its Expected Principal Payment Date as described in “Deposit and Application of Funds forCard Series Notes—Targeted Deposits of Card Series Principal Amounts to the Principal Funding Account—Budgeted Deposits.” Since funds in the principal funding subaccount for tranches of subordinated Card seriesnotes will not be available for credit enhancement for any senior Card series notes, Card series PrincipalAmounts will not be deposited into the principal funding subaccount for a tranche of subordinated Card seriesnotes if that deposit would reduce the available subordination below the required subordination for any tranche ofsenior Card series notes.

If the earnings on funds in the principal funding subaccount are less than the interest payable on the portionof principal in the principal funding subaccount for the applicable tranche of Card series notes, the amount ofsuch shortfall will be withdrawn from the accumulation reserve account, to the extent available. If the amountson deposit in the principal funding subaccount are prefunded amounts, then additional finance charge collectionsfrom the master trust will be allocated to the COMT collateral certificate and the Card series notes and will betreated as Card series Finance Charge Amounts as described under “Deposit and Application of Funds for CardSeries Notes—Card Series Finance Charge Amounts” and “The Master Trust—Application of Collections.”

The Class C reserve account will have subaccounts for each tranche of Class C Card series notes that will befunded (provided that there are sufficient Card series Finance Charge Amounts) if the three-month excess spreadpercentage falls below certain levels or an early redemption event or event of default occurs (as specified in therelated prospectus supplement). Funds on deposit in a Class C reserve subaccount will be used to make paymentsof interest or principal on the related tranche of Class C notes, if necessary. See “Deposit and Application ofFunds for Card Series Notes—Withdrawals from the Class C Reserve Account.”

The Class D reserve account will have subaccounts for each tranche of Class D notes that will be funded(provided that there are sufficient Card series Finance Charge Amounts) in accordance with the Card seriesindenture supplement and the related terms document. Funds on deposit in the Class D reserve subaccount willbe used to make payments of interest or principal on the related tranche of Class D Card series notes, ifnecessary.

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Credit Enhancement

Credit enhancement may be provided with respect to one or more classes or tranches of notes. Creditenhancement may be in the form of the subordination of one or more classes of the notes, a letter of credit, theestablishment of a cash collateral guaranty or account, a surety bond, an insurance policy, a spread account, areserve account, derivative agreements, supplemental credit enhancement agreements and supplemental liquidityagreements, a collateral interest or any combination of the foregoing. Any form of credit enhancement may bestructured so as to be drawn upon by more than one class or tranche of notes to the extent described in thisprospectus and the related prospectus supplement.

Credit enhancement will generally not provide protection against all risks of loss and will not guaranteerepayment of the entire principal balance of the notes and the related interest. If losses occur which exceed theamount covered by the credit enhancement or which are not covered by the credit enhancement, noteholders willbear their allocable share of deficiencies.

Subordination

One or more of any class or tranche of notes may be subordinated as described in this prospectus or in therelated prospectus supplement to the extent necessary to fund payments with respect to the senior notes. Therights of the holders of any of those subordinated notes to receive distributions of principal and/or interest on anyDistribution Date for the class or tranche will be subordinate in right and priority to the rights of the holders ofthe senior notes, but only to the extent set forth in this prospectus or in the related prospectus supplement. If sospecified in this prospectus or in the related prospectus supplement, subordination may apply only in the event ofcertain types of losses not covered by another credit enhancement. This prospectus or the related prospectussupplement will also set forth information concerning the amount of subordination of a class or classes ofsubordinated notes, the circumstances in which such subordination will be applicable, the manner, if any, inwhich the amount of subordination will decrease over time, and the conditions under which amounts availablefrom payments that would otherwise be made to holders of those subordinated notes will be distributed to holdersof the senior notes.

Letter of Credit

If so specified in this prospectus or in the related prospectus supplement, support for one or more classes ortranches of notes will be provided by one or more letters of credit. A letter of credit may provide limitedprotection against certain losses in addition to or in lieu of other credit enhancement. The issuer of the letter ofcredit will be obligated to honor demands with respect to such letter of credit, to the extent of the amountavailable thereunder, to provide funds under the circumstances and subject to such conditions as are specified inthis prospectus or in the related prospectus supplement.

The maximum liability of an issuer of the letter of credit under its letter of credit will generally be anamount equal to a percentage specified in this prospectus or in the related prospectus supplement of the initialoutstanding dollar principal amount of a class or tranche of notes. The maximum amount available at any time tobe paid under a letter of credit will be determined in the manner specified in the letter of credit and in thisprospectus or in the related prospectus supplement.

Cash Collateral Guaranty or Account

If so specified in this prospectus or in the related prospectus supplement, support for one or more classes ortranches of notes will be provided by a guaranty, called a cash collateral guaranty, secured by the deposit of cashor certain permitted investments in cash collateral account reserved for the beneficiaries of the cash collateralguaranty or by a cash collateral account alone. The amount available pursuant to the cash collateral guaranty orthe cash collateral account will be the lesser of amounts on deposit in the cash collateral account and an amountspecified in this prospectus or in the related prospectus supplement. This prospectus or the related prospectus

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supplement will set forth the circumstances under which payments are made to beneficiaries of the cash collateralguaranty from the cash collateral account or from the cash collateral account directly.

Surety Bond or Insurance Policy

If so specified in this prospectus or in the related prospectus supplement, insurance with respect to a one ormore classes or tranches of notes will be provided by one or more insurance companies. Such insurance willguarantee, with respect to one or more classes or tranches of notes, distributions of interest or principal in themanner and amount specified in this prospectus or in the related prospectus supplement.

If so specified in this prospectus or in the related prospectus supplement, a surety bond will be purchased forthe benefit of the holders of any class or tranche of notes to assure distributions of interest or principal withrespect to that class or tranche of notes in the manner and amount specified in this prospectus or in the relatedprospectus supplement.

Spread Account

If so specified in this prospectus or in the related prospectus supplement, support for one or more classes ortranches of notes will be provided by the periodic deposit of certain available excess cash flow from the poolassets into an account, called a spread account, intended to assist with subsequent distribution of interest andprincipal on the notes of that class or tranche in the manner specified in this prospectus or in the relatedprospectus supplement.

Reserve Account

If so specified in this prospectus or in the related prospectus supplement, support for a one or more classesor tranches of notes will be provided by the establishment of a reserve account. A reserve account may befunded, to the extent provided in this prospectus or in the related prospectus supplement, by an initial cashdeposit, the retention of certain periodic distributions of principal or interest or both otherwise payable to one ormore classes or tranches of notes, including subordinated notes, or the provision of a letter of credit, guarantee,insurance policy or other form of credit or any combination thereof. A reserve account will be established toassist with the subsequent distribution of principal or interest on the notes of that class or tranche in the mannerprovided in this prospectus or in the related prospectus supplement.

Derivative Agreements

Some notes may have the benefits of one or more derivative agreements, which may be a currency, interestrate or other swap, a cap (obligating a derivative counterparty to pay all interest in excess of a specifiedpercentage rate), a collar (obligating a derivative counterparty to pay all interest below a specified percentagerate and above a higher specified percentage rate) or a guaranteed investment contract (obligating a derivativecounterparty to pay a guaranteed rate of return over a specified period) with various counterparties. In general,COMET will receive payments from counterparties to the derivative agreements in exchange for COMET’spayments to them, to the extent required under the derivative agreements. Payments received under derivativeagreements with respect to interest payments on dollar notes in a series, class or tranche will generally be treatedas described in the related prospectus supplement. The specific terms of a derivative agreement applicable to aseries, class or tranche of notes and a description of the related counterparty will be included in the relatedprospectus supplement. The banks or any of their affiliates may be counterparties to a derivative agreement.

Supplemental Credit Enhancement Agreements and Supplemental Liquidity Agreements

Some notes may have the benefit of one or more additional forms of credit enhancement agreements –referred to herein as “supplemental credit enhancement agreements” – such as letters of credit, cash collateralguarantees or accounts, surety bonds or insurance policies with various credit enhancement providers. In

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addition, some notes may have the benefit of one or more forms of supplemental liquidity agreements – referredto herein as “supplemental liquidity agreements” – such as a liquidity facility with various liquidity providers.The specific terms of any supplemental credit enhancement agreement or supplemental liquidity agreementapplicable to a series, class or tranche of notes and a description of the related provider will be included in therelated prospectus supplement for a series, class or tranche of notes. The banks or any of their affiliates may beproviders of any supplemental credit enhancement agreement or supplemental liquidity agreement.

Collateral Interests

If so specified in this prospectus or in the related prospectus supplement, support for some notes may beprovided initially by an interest in COMET, called a collateral interest, in an amount specified in this prospectusor in the related prospectus supplement. Those notes may also have the benefit of a cash collateral guaranty orcash collateral account with an initial amount on deposit in such account, if any, as specified in the prospectussupplement which will be increased (i) to the extent the transferor elects to apply principal amounts allocable tothe collateral interest to decrease the collateral interest, (ii) to the extent principal amounts allocable to thecollateral interest are required to be deposited into the cash collateral account as specified in this prospectus or inthe related prospectus supplement and (iii) to the extent excess collections of finance charge receivables arerequired to be deposited into the cash collateral account as specified in the related prospectus supplement. Thetotal amount of the credit enhancement available pursuant to the collateral interest and, if applicable, the cashcollateral guaranty or cash collateral account will be the lesser of the sum of the collateral interest and theamount on deposit in the cash collateral account and an amount specified in the related prospectus supplement.This prospectus or the related prospectus supplement will set forth the circumstances under which paymentswhich otherwise would be made to holders of the collateral interest will be distributed to the noteholders and, ifapplicable, the circumstances under which payment will be made under the cash collateral guaranty or under thecash collateral account.

Sale of Assets

In addition to a sale of assets if required under the pooling agreement following the insolvency orbankruptcy of Capital One Funding as transferor under the master trust, if a series, class or tranche of notes hasan event of default and is accelerated before its legal maturity date, COMET or a master trust may sell assets, orinterests therein, if the conditions described in “The Notes—Events of Default” and “—Events of DefaultRemedies” are satisfied, and for subordinated notes of a multiple tranche series, only to the extent that payment ispermitted by the subordination provisions of the senior notes of the same series. This sale will take place at theoption of the indenture trustee or at the direction of the holders of a majority of aggregate outstanding dollarprincipal amount of notes of the affected series, class or tranche.

Any sale of assets for a subordinated tranche of notes in a multiple tranche series may be delayed until(1) the senior classes of notes of the same series are prefunded sufficiently, (2) enough notes of senior classes arerepaid, or (3) new subordinated notes have been issued, in each case, to the extent that the subordinated tranche isno longer needed to provide the required subordination for the senior notes of that series. In a multiple trancheseries, if a senior tranche of notes directs a sale of assets, then after the sale, that tranche will no longer beentitled to subordination from subordinated classes of notes of the same series.

If principal of or interest on a tranche of notes has not been paid in full on its legal maturity date, a sale ofassets will automatically take place on that date regardless of the subordination requirements of any seniorclasses of notes. Proceeds from the sale and amounts on deposit in the interest funding subaccount and theprincipal funding subaccount related to that tranche will be immediately paid to the noteholders of that tranche.

The principal amount of assets designated for sale will not exceed (and may be less than) the NominalLiquidation Amount of, plus any accrued, past due and additional interest on, the related series, class or trancheof notes, subject to any further limitations described in the related prospectus supplement. The Nominal

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Liquidation Amount of that series, class or tranche of notes will be automatically reduced to zero upon such saleeven if the proceeds of that sale are not enough to pay all remaining amounts due on the notes. After the sale, nomore Principal Amounts or Finance Charge Amounts will be allocated to that series, class or tranche of notes.Noteholders of that series, class or tranche will receive the proceeds of the sale but no more than the outstandingprincipal amount of their notes, plus any past due, accrued and additional interest on such series, class or trancheof notes. The notes of that series, class or tranche are no longer outstanding under the indenture (or anysupplement thereto) once the sale occurs.

After giving effect to a sale of assets for a series, class or tranche of notes, the amount of proceeds ondeposit in a principal funding account or subaccount may be less than the outstanding dollar principal amount ofthat series, class or tranche of notes. This deficiency can arise because the Nominal Liquidation Amount of thatseries, class or tranche was reduced before the sale of receivables or because the sale price for the receivableswas less than the outstanding dollar principal amount and accrued, past due and additional interest. These typesof deficiencies will not be reimbursed.

Limited Recourse to COMET; Security for the Notes

Only the portion of Finance Charge Amounts and Principal Amounts allocable to a series, class or trancheof notes after giving effect to all allocations and reallocations thereof, funds on deposit in the applicable COMETtrust accounts, funds available pursuant to any applicable derivative agreement, supplemental credit enhancementagreement or supplemental liquidity agreement, and proceeds of sales of assets will provide the source ofpayment for principal of or interest on any series, class or tranche of notes. Noteholders will have no recourse toany other assets of COMET, or any other person or entity for the payment of principal of or interest on the notes.

Each series of notes (including the Card series) is secured by a security interest in the assets in COMET,including the collection account, but each series of notes (including the Card series) is entitled to the benefits ofonly that portion of those assets allocable to it under the indenture, the asset pool supplement and the Card seriesindenture supplement. See “The Transferor, The Depositor and The Receivables Purchase Agreements—Receivables Purchase Agreements,” “The Master Trust—Representations and Warranties” and “TheIndenture—Issuing Entity Covenants” for a discussion of covenants regarding the perfection of security interests.Therefore, only a portion of the collections allocated to COMET are available to the Card series notes. Similarly,Card series notes are entitled only to their allocable share of Card series Finance Charge Amounts, Card seriesPrincipal Amounts, amounts on deposit in the applicable COMET trust accounts, any payments received fromderivative counterparties or under supplemental credit enhancement agreements or supplemental liquidityagreements (to the extent not already included in Card series Finance Charge Amounts) and proceeds of any saleof assets. Card series noteholders will have no recourse to any other assets of COMET or any other person orentity for the payment of principal of or interest on the notes.

Each tranche of Card series notes is also secured by a security interest in the applicable principal fundingsubaccount, the applicable interest funding subaccount, the applicable accumulation reserve subaccount, in thecase of a tranche of Class C notes, the applicable Class C reserve subaccount, in the case of a tranche of Class Dnotes, the applicable Class D reserve subaccount and any other applicable supplemental account, and may besecured by a security interest in any applicable derivative agreement, supplemental credit enhancementagreement or supplemental liquidity agreement.

The Notes

The following discussion and the discussions under “The Indenture” and certain sections in the relatedprospectus supplement summarize the material terms of the notes, the indenture, the asset pool supplement andthe indenture supplements. The indenture supplements may be supplemented by terms documents relating to theissuance of individual tranches of notes in the related series, the terms of which will be described in more detail

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in the related prospectus supplement. In this prospectus, references to an indenture supplement will include anyapplicable terms documents. These summaries do not purport to be complete and are qualified in their entirety byreference to the provisions of the notes, the indenture, the asset pool supplement and the indenture supplements.

The following summaries describe certain provisions common to each series of notes.

General

The prospectus supplement for a particular issuance of notes will specify the series, class and tranche ofthose notes. Each series of notes will be issued pursuant to the indenture, the asset pool supplement and anindenture supplement. A copy of the form of each of these documents is filed as an exhibit to the registrationstatement of which this prospectus is a part. None of the indenture, the asset pool supplement or the indenturesupplement limits the aggregate stated principal amount of notes that may be issued. Each series of notes willrepresent a contractual debt obligation of COMET that will be in addition to the debt obligations of COMETrepresented by any other series of notes. Each prospectus supplement will describe the provisions specific to therelated series, class or tranche of notes. Holders of the notes of any outstanding series, class or tranche will nothave the right to prior review of, or consent to, any subsequent issuance of notes.

Most series of notes are expected to consist of multiple classes of notes. A class designation determines therelative seniority for receipt of cash flows and funding of the Default Amounts allocated to the related series ofnotes. For example, a class of subordinated notes provides credit enhancement for a class of senior notes of thatseries. Some series, if so specified in the related prospectus supplement, may be multiple tranche series, meaningthey have classes consisting of multiple discrete issuances called “tranches.” Whenever a “class” of notes isreferred to in this prospectus or any prospectus supplement, it also includes all tranches of that class, unless thecontext otherwise requires.

COMET may issue different tranches of notes of a multiple tranche series at the same time or at differenttimes, but no tranche of senior notes of a series may be issued unless a sufficient amount of subordinated notes ofthat series will be issued on that date or has previously been issued and is outstanding and available assubordination for such senior tranche of notes. See “—Required Subordinated Amount and Usage.”

COMET may offer notes denominated in U.S. dollars or any foreign currency. The specific terms of anynote denominated in a foreign currency will be described in the related prospectus supplement.

The notes of each series will be allocated the Floating Allocation Percentage of all Finance Charge Amountsand Default Amounts, will be allocated the Principal Allocation Percentage of all Principal Amounts, and will beallocated its pro rata share of the servicing fee on the receivables. The method for calculating the FloatingAllocation Percentage and the Principal Allocation Percentage applicable during any period is described in thedefinitions thereof in the “Glossary of Defined Terms,” which definitions may be supplemented or modified in therelated prospectus supplement. If the notes offered by this prospectus and the related prospectus supplement are in aseries including more than one class or tranche, Finance Charge Amounts, Principal Amounts, the Default Amountsand the servicing fee allocated to that series may be further allocated among each class or tranche in that series asdescribed in the related prospectus supplement. Default Amounts allocated to the Card series will reduce theNominal Liquidation Amount of Card series notes as described in “Deposit and Application of Funds for CardSeries Notes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs.”

The notes of each series may share excess Principal Amounts with other series of notes. In addition a seriesmay be included in one or more groups of series for purposes of sharing excess Finance Charge Amounts.

The Card series notes will share Principal Amounts allocated to the Card series in the manner and to the extentdescribed in “Deposit and Application of Funds for Card Series Notes—Shared Excess Principal Amounts.” TheCard series notes will also be included in Excess Finance Charge Sharing Group A and will share Finance Charge

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Amounts and other amounts treated as Finance Charge Amounts in the manner and to the extent described in“Deposit and Application of Funds for Card Series Notes—Shared Excess Finance Charge Amounts.”

If so specified in the related prospectus supplement, the notes of a particular series, class or tranche mayhave the benefit of a derivative agreement, including an interest rate or currency swap, cap, collar or guaranteedinvestment with various counterparties. The specific terms of each derivative agreement and a description of eachcounterparty will be included in the related prospectus supplement. The notes of a particular series, class ortranche may also have the benefit of a supplemental credit enhancement agreement or a supplemental liquidityagreement. The specific terms of each applicable supplemental credit enhancement agreement or supplementalliquidity agreement and a description of each enhancement provider or liquidity provider, as applicable, will beincluded in the related prospectus supplement.

COMET will pay principal of and interest on a series, class or tranche of notes solely from the portion ofFinance Charge Amounts and Principal Amounts which are allocable to that series, class or tranche after givingeffect to all allocations and reallocations, deposits and withdrawals of amounts in any COMET trust accounts,including any supplemental accounts, relating to that series, class or tranche, and amounts received under anyderivative agreement, under any supplemental credit enhancement agreement or under any supplemental liquidityagreement relating to that series, class or tranche. If those sources are not sufficient for payment of principal of orinterest on that series, class or tranche, the noteholders will have no recourse to any assets in COMET, or anyother person or entity for the payment of principal of or interest on that series, class or tranche of notes.

The indenture allows COMET to “reopen” or later increase the outstanding principal amount of a tranche ofCard series notes without notice by selling additional Card series notes of that tranche with the same terms.Those additional notes will be treated, for all purposes, like the initial notes except that any new notes may beginto accrue interest at a different date. No additional notes of an outstanding Card series from tranche may beissued unless the conditions to issuance described in “The Notes—Issuances of New Series, Classes andTranches of Notes” are satisfied.

Capital One Bank or an affiliate may retain any additional notes of an outstanding Card series trancheresulting from a reopening and may resell them on a subsequent date.

A note is not a deposit and neither the notes nor any underlying collateral certificate or receivables areinsured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

Interest

Interest will accrue on a series, class or tranche of notes, except on a series, class or tranche of discount notes,from the relevant issuance date at the applicable interest rate for that series, class or tranche, which may be a fixed,floating or other type of rate as specified in the related prospectus supplement. Interest on a series, class or trancheof notes will be due and payable on the dates specified in the related prospectus supplement, each referred to in thisprospectus and the related prospectus supplement as an “interest payment date.” If the interest payment dates forany notes occur less frequently than monthly, interest will be deposited in an interest funding account pendingdistribution. Each interest funding account will be established under the indenture supplement for the related series.For series with one or more classes and/or tranches of notes, each class or tranche may have a separate interestfunding subaccount. Interest payments or deposits will be funded from Finance Charge Amounts allocated to thatseries, class or tranche of notes during the preceding month or months, from any applicable credit enhancement, ifnecessary, and from certain other amounts specified in the related prospectus supplement.

For each issuance of a series, class or tranche of fixed rate notes, the fixed rate of interest at which interestwill accrue for that series, class or tranche will be designated in the related prospectus supplement. For eachissuance of a series, class or tranche of floating rate notes, the interest rate index or other formula on which theinterest payment is based will be designated in the related prospectus supplement. In addition, the related

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prospectus supplement will specify if any series, class or tranche of notes receives any additional interest andhow it is to be calculated.

A series, class or tranche of discount notes will be issued at a price lower than the stated principal amountpayable on the Expected Principal Payment Date of that series, class or tranche of notes. Until the ExpectedPrincipal Payment Date for a series, class or tranche of discount notes, accreted principal will be capitalized aspart of the principal of that series, class or tranche of notes and reinvested in the assets of COMET, so long as anearly redemption event or an event of default and acceleration for that series, class or tranche has not occurred. Ifapplicable, the related prospectus supplement will specify the interest rate to be borne by a series, class or trancheof discount notes after an event of default or after its Expected Principal Payment Date.

Each payment of interest on a series, class or tranche of notes will include all interest accrued from thepreceding interest payment date—or, for the first interest period, from the issuance date—through the daypreceding the current interest payment date, or any other period as may be specified in the related prospectussupplement. Interest on a series, class or tranche of notes will be due and payable on each interest payment date.

If interest on a series, class or tranche of notes is not paid within 35 days after such interest is due andpayable, an event of default will occur for that series, class or tranche of notes. See “—Events of Default.”

Principal

The timing of payment of principal of a series, class or tranche of notes will be specified in the relatedprospectus supplement. Each date on which payment is made will be referred to in this prospectus and the relatedprospectus supplement as a “principal payment date.”

Principal of a series, class or tranche of notes may be paid later than its Expected Principal Payment Date ifsufficient funds are not allocated from the assets in COMET securing that series, class or tranche. Additionally,in the case of a tranche of subordinated notes of a multiple tranche series, principal of that tranche will be paid onits Expected Principal Payment Date only to the extent that payment is permitted by the subordination provisionsof the senior notes of that series.

It is not an event of default if the stated principal amount of a series, class or tranche of notes is not paid onits Expected Principal Payment Date. However, if the stated principal amount of a series, class or tranche ofnotes is not paid in full by its legal maturity date, an event of default will occur for that series, class or tranche ofnotes. See “—Events of Default.” If the stated principal amount of a series, class or tranche of notes is not paidon its Expected Principal Payment Date, an early redemption event for that series, class or tranche will occur. See“—Early Redemption Events.”

Principal of a series, class or tranche of notes may be paid earlier than its Expected Principal Payment Dateif an early redemption event, an event of default and acceleration, or an optional or mandatory redemptionoccurs. See “—Early Redemption Events” and “—Events of Default.”

See “Risk Factors” for a discussion of factors that may affect the timing of principal payments on a series,class or tranche of notes.

Stated Principal Amount, Outstanding Dollar Principal Amount, Adjusted Outstanding Dollar PrincipalAmount and Nominal Liquidation Amount

Each series, class or tranche of notes has a stated principal amount, an outstanding dollar principal amount,an Adjusted Outstanding Dollar Principal Amount and a Nominal Liquidation Amount.

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Stated Principal Amount

The stated principal amount of a series, class or tranche of notes is the amount that is stated on the face ofthe notes of that series, class or tranche to be payable to the holders of the notes of that series, class or tranche. Itcan be denominated in U.S. dollars or in a foreign currency.

Outstanding Dollar Principal Amount

For a series, class or tranche of U.S. dollar notes, the outstanding dollar principal amount is the initial dollarprincipal amount of that series, class or tranche of notes, as described in the related prospectus supplement, lessprincipal payments to the noteholders of that series, class or tranche of notes. For a series, class or tranche offoreign currency notes, the outstanding dollar principal amount is the U.S. dollar equivalent of the initialprincipal amount of that series, class or tranche of notes, as described in the related prospectus supplement, lessdollar payments made to derivative counterparties or, in the event the derivative agreement is non-performing,less dollar payments converted to make payments to noteholders, each with respect to principal for that series,class or tranche. For a series, class or tranche of discount notes, the outstanding dollar principal amount is anamount stated in, or determined by a formula described in, the related indenture supplement and terms document.The outstanding dollar principal amount of a series, class or tranche of discount notes will increase over time asprincipal accretes on that series, class or tranche of notes. The outstanding dollar principal amount of any series,class or tranche of notes will decrease as a result of each payment of principal of that series, class or tranche ofnotes, and will increase as a result of any issuance of additional notes of that series, class or tranche.

Adjusted Outstanding Dollar Principal Amount

In addition, a series, class or tranche of notes has an Adjusted Outstanding Dollar Principal Amount. TheAdjusted Outstanding Dollar Principal Amount of a series, class or tranche of notes is the outstanding dollarprincipal amount of all outstanding notes of that series, class or tranche, less any funds on deposit in the principalfunding subaccount for that series, class or tranche. The Adjusted Outstanding Dollar Principal Amount of anyseries, class or tranche of notes will decrease as a result of each deposit into the principal funding subaccount forsuch series, class or tranche.

Nominal Liquidation Amount

The “Nominal Liquidation Amount” of a series, class or tranche of notes is a U.S. dollar amount based onthe initial outstanding dollar principal amount of that series, class or tranche of notes minus some reductions—including reductions from (1) reallocations of Principal Amounts, (2) allocations of charge-offs from uncoveredDefault Amounts and (3) deposits in a principal funding subaccount for or payments of principal of such class ortranche of notes—plus some increases described below. The Nominal Liquidation Amount of a series of notes isequal to the sum of the Nominal Liquidation Amounts of all classes or tranches of notes of that series.

The Nominal Liquidation Amount of a note may be reduced as follows:

• If Finance Charge Amounts allocable to a series of notes are insufficient to fund the Default Amounts inCOMET allocable to such series, the uncovered Default Amounts allocable to that series will result in areduction of the Nominal Liquidation Amount of that series. Within each series, subordinated classes ofnotes will generally bear the risk of reduction in their Nominal Liquidation Amount due to charge-offsresulting from uncovered Default Amounts allocable to that series before senior classes of notes.

In a multiple tranche series, these reductions will be allocated initially pro rata to each tranche of notesregardless of class, and then will be reallocated to the subordinated classes of notes in that series insuccession, beginning with the most subordinated classes. However, these reallocations will be madefrom senior notes to subordinated notes only to the extent that such senior notes have not used all of theirrequired subordinated amount. Reductions that cannot be reallocated to a more subordinated tranche willreduce the Nominal Liquidation Amount of the tranche to which the reductions were initially allocated.

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If Card series Finance Charge Amounts are insufficient to cover Card series Defaulted Amounts, theNominal Liquidation Amount of the Card series notes will be reduced as described in “Deposit andApplication of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amountsfrom Charge-Offs.”

• If Principal Amounts are reallocated from subordinated notes of a series to pay interest on senior notes, tocover any shortfall in the payment of the servicing fee on the assets (direct or indirect) in COMET or tocover any other shortfall in amounts to be covered by Finance Charge Amounts, the Nominal LiquidationAmount of those subordinated notes will be reduced by the amount of the reallocations. The amount ofthe reallocation of Principal Amounts will be applied to reduce the Nominal Liquidation Amount of thesubordinated classes of notes in that series in succession, to the extent of such senior notes’ requiredsubordinated amount of the related subordinated notes, beginning with the most subordinated classes.However, Principal Amounts will be reallocated only to the extent that such senior classes of notes havenot used all of their required subordinated amount. In addition, no Principal Amounts will be reallocatedto pay interest on a senior class of notes or any portion of the servicing fee if such reallocation wouldresult in the reduction of the Nominal Liquidation Amount of such senior class of notes.

If Card series Principal Amounts are reallocated from subordinated notes to pay interest on or otheramounts related to the senior notes in the Card series, any shortfall in the payment of the Card series’sportion of the servicing fees on the receivables in the master trust or in any other master trust orsecuritization special purpose entity that has transferred a collateral certificate to COMET or any othershortfall with respect to Card series Finance Charge Amounts, the Nominal Liquidation Amount of thosesubordinated notes will be reduced by the amount of the reallocations as described in “Deposit andApplication of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amountsfrom Reallocations.”

• The Nominal Liquidation Amount of a class or tranche of notes will be reduced by the amount on depositin its respective principal funding subaccount.

• The Nominal Liquidation Amount of a class or tranche of notes will be reduced by the amount of allpayments of principal of that class or tranche of notes.

• Upon a sale of assets (i) if required under the pooling agreement after the bankruptcy or insolvency of therelated transferor, (ii) after an event of default and acceleration or (iii) on the legal maturity date of a classor tranche of notes, the Nominal Liquidation Amount of such class or tranche of notes will beautomatically reduced to zero. See “Sources of Funds to Pay the Notes—Sale of Assets.”

The Nominal Liquidation Amount of a note can be increased as follows:

• For a class or tranche of discount notes, the Nominal Liquidation Amount of that class or tranche willincrease over time as principal accretes, to the extent that Finance Charge Amounts allocated to therelated series are allocated for that purpose. For Card series discount notes, the Nominal LiquidationAmount will increase over time as principal accretes, to the extent that Card series Finance ChargeAmounts are allocated for that purpose.

• For all series of notes, the Nominal Liquidation Amount of that series will increase if Finance ChargeAmounts are available to reimburse earlier reductions in the Nominal Liquidation Amount from charge-offs from uncovered Default Amounts in COMET or from reallocations of Principal Amounts fromsubordinated classes to pay shortfalls of interest, servicing fee and other items to be covered by FinanceCharge Amounts. Within each series, the increases will be allocated first to the senior-most class with adeficiency in its Nominal Liquidation Amount and then, in succession, to the subordinated classes with adeficiency in their Nominal Liquidation Amounts. The increases will be further allocated to each trancheof a class pro rata based on the deficiency in the Nominal Liquidation Amount in each tranche, asdescribed in “Deposit and Application of Funds for Card Series Notes—Allocations of Reimbursements ofNominal Liquidation Amount Deficits.”

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• For all classes or tranches of notes, the Nominal Liquidation Amount of a class or tranche of notes willincrease by an amount equal to the principal amount of any additional notes of that class or tranche issuedafter the initial issuance of notes of that class or tranche.

In a multiple tranche series, any increase of the Nominal Liquidation Amount of a class of notes may befurther allocated to each tranche in such class as described in the related prospectus supplement.

Finance Charge Amounts allocated to a series of notes for each month will be applied, as described in therelated prospectus supplement, to cover Default Amounts allocable to that series. If Finance Charge Amountsallocated to such series are sufficient to cover these amounts, the Nominal Liquidation Amount of such series ofnotes will not be reduced. Finance Charge Amounts allocated to a series of notes also will be applied, asdescribed in the related prospectus supplement, to reimburse earlier reductions in the Nominal LiquidationAmount of that series of notes from uncovered Default Amounts allocated to that series of notes or forreallocations of Principal Amounts from subordinated classes to pay interest on senior classes of notes or theportion of the servicing fee allocable to the notes of the same series. Finance Charge Amounts used to reimburseearlier reductions of the Nominal Liquidation Amount will be treated as Principal Amounts, and will be appliedto the most senior class of notes until all reductions in the Nominal Liquidation Amount of such class have beenreimbursed in full and then to each next subordinated class of notes in a similar manner. Principal Amounts notpaid to or accumulated for the benefit of noteholders, or not reallocated as described above, may be reinvested inthe assets in COMET in order to maintain the Nominal Liquidation Amount of the notes.

In most circumstances, the Nominal Liquidation Amount of a class or tranche of notes, together with anyaccumulated Principal Amounts held in the related principal funding subaccount, will be equal to the outstandingdollar principal amount of that class or tranche of notes. However, if there are reductions in the NominalLiquidation Amount as a result of reallocations of Principal Amounts from that class or tranche of notes to payinterest on senior classes of notes or the servicing fee, or as a result of charge-offs from uncovered DefaultAmounts in COMET, there will be a deficit in the Nominal Liquidation Amount of that class or tranche. Unlessthat deficit is reimbursed through the application of Finance Charge Amounts allocated to the applicable series,the stated principal amount of that class or tranche of notes may not be paid in full and the holders of those notesmay receive less than the full stated principal amount of their notes. This will occur either because the amount ofdollars allocated to pay them is less than the outstanding dollar principal amount of that class or tranche, orbecause the amount of dollars allocated to pay the counterparty to a derivative agreement is less than the amountnecessary to obtain enough of the applicable foreign currency for payment of the notes in full.

The Nominal Liquidation Amount of a class or tranche of notes may not be reduced below zero, and maynot be increased above the outstanding dollar principal amount of that class or tranche of notes, less any amountson deposit in the applicable principal funding subaccount.

If a note held by Capital One Funding, COMET or any of their affiliates is canceled, the NominalLiquidation Amount of that note is automatically reduced to zero.

The cumulative amount of reductions of the Nominal Liquidation Amount of any class or tranche of notesdue to charge-offs from uncovered Default Amounts in COMET allocable to that class or tranche of notes or dueto the reallocation of Principal Amounts to pay interest on senior classes of notes or the portion of the servicingfees will be limited as described in the related prospectus supplement.

Allocations of charge-offs from uncovered Default Amounts in COMET and reallocations of PrincipalAmounts to pay interest on senior classes of notes or a portion of the servicing fee reduce the NominalLiquidation Amount of outstanding series, classes and tranches of notes only and do not affect series, classes ortranches of notes that are issued after that time.

Any tranche of Card series notes may be paired with another tranche of Card series notes, referred to as the“paired tranche.” As the Nominal Liquidation Amount of a tranche having a paired tranche is reduced (solely due

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to deposits in the related principal funding account other than deposits of prefunded amounts), the NominalLiquidation Amount of the paired tranche may increase by an equal amount. If an early redemption event orevent of default and acceleration occurs for either tranche while such tranches are paired, the NominalLiquidation Amount of and the method for allocating Principal Amounts to each tranche may be reset asotherwise described in this prospectus. For the Card series, if two tranches of notes are paired, the master trustwill be required to maintain a minimum principal balance based on the reduced Nominal Liquidation Amount ofthe paired tranche. If, as a result, there are fewer principal receivables supporting the COMT collateral certificate,there may be fewer Finance Charge Collections available in the master trust to be allocated to the COMTcollateral certificate and reduced Card series Finance Charge Amounts allocable to your tranche of notes.

Final Payment of the Notes

Noteholders of a series, class or tranche will generally not receive payment of principal in excess of thehighest outstanding dollar principal amount of that series, class or tranche, or in the case of a series, class ortranche of foreign currency notes, any amount received by COMET under a derivative agreement with respect toprincipal of that series, class or tranche.

Following an insolvency or bankruptcy of Capital One Funding or following an event of default andacceleration or on the legal maturity date of a series, class or tranche of notes, assets in COMET securing thataffected series, class or tranche will be sold generally in an aggregate amount not to exceed the NominalLiquidation Amount of that affected series, class or tranche, plus any past due, accrued and additional interest, ofthe related series, class or tranche, subject to any further limitations specified in the related prospectussupplement. The proceeds of that sale will be applied, first, to pay the outstanding principal amount of thataffected series, class or tranche and, second, to pay any accrued, past due and additional interest, if any, on thataffected series, class or tranche of notes upon the sale.

A series, class or tranche of notes will be considered to be paid in full, the holders of that series, class ortranche of notes will have no further right or claim, and COMET will have no further obligation or liability forprincipal or interest, on the earliest to occur of:

• the date of the payment in full of the stated principal amount of and all accrued, past due and additionalinterest on that series, class or tranche of notes, as applicable;

• the legal maturity date for that series, class or tranche of notes after giving effect to all deposits,allocations, reallocations, sales of assets and payments to be made on that date; or

• the date on which a sale of assets has taken place for that series, class or tranche of notes, as described in“Sources of Funds to Pay the Notes—Sale of Assets.”

Subordination of Interest and Principal

Interest and principal payments on subordinated classes of notes of a series will be subordinated asdescribed in the related prospectus supplement. For the Card series, interest payments on and principal paymentsof Class B notes, Class C notes and Class D notes of the Card series are subordinated to payments on Class Anotes. Subordination of Class B notes, Class C notes and Class D notes of the Card series provides creditenhancement for Class A Card series notes.

Interest payments on and principal payments of Class C notes and Class D notes of the Card series aresubordinated to payments on Class A notes and Class B notes of the Card series. Subordination of Class C notesand Class D notes of the Card series provides credit enhancement for Class A notes and Class B notes of the Cardseries. In certain circumstances, the credit enhancement for a tranche of Class A Card series notes may beprovided solely by the subordination of Class C notes and Class D notes of the Card series and the Class B Cardseries notes will not, in that case, provide credit enhancement for that tranche of Class A notes.

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Interest payments on and principal payments of Class D Card series notes are subordinated to payments onClass A notes, Class B notes and Class C notes of the Card series and the Card series’s portion of the servicingfee. Subordination of Class D Card series notes provides credit enhancement for Class A notes, Class B notes andClass C notes of the Card series.

Principal Amounts allocated to a series of notes may, after Finance Charge Amounts have been applied, firstbe applied to pay interest on senior classes of notes or the servicing fee allocable to that series. In addition,subordinated classes of notes bear the risk of reduction in their Nominal Liquidation Amount due to charge-offsfrom uncovered Default Amounts in COMET before senior classes of notes of that series. In a multiple trancheseries, charge-offs from uncovered Default Amounts allocated to that series are generally initially allocated toeach tranche of that series and then reallocated to the subordinated tranches of that series, reducing the NominalLiquidation Amount of such subordinated tranches to the extent credit enhancement in the form of subordinationis still available for the tranches of senior notes. See “—Stated Principal Amount, Outstanding Dollar PrincipalAmount, Adjusted Outstanding Dollar Principal Amount and Nominal Liquidation Amount—NominalLiquidation Amount.”

Card series Principal Amounts may be reallocated to pay interest on (or make deposits to the related interestfunding subaccount for) senior classes of notes or to pay the Card series’s portion of the servicing fees on thereceivables in the master trust or in any other master trust or securitization special purpose entity that hastransferred a collateral certificate to COMET, subject to certain limitations. In addition, charge-offs due touncovered Card series Defaulted Amounts are generally first applied against the subordinated classes of the Cardseries. See “—Stated Principal Amount, Outstanding Dollar Principal Amount, Adjusted Outstanding DollarPrincipal Amount and Nominal Liquidation Amount—Nominal Liquidation Amount” and “The Master Trust—Defaulted Receivables; Rebates and Fraudulent Charges; Recoveries.”

In addition, Principal Amounts allocated to a series of notes will be used to fund targeted deposits to theprincipal funding subaccounts of senior notes of that series before being applied to the principal fundingsubaccounts of subordinated notes of that series.

In the Card series, payment of principal may be made on a subordinated class of notes before payment infull of each senior class of notes only under the following circumstances:

• If after giving effect to the proposed principal payment there is still a sufficient amount of subordinatednotes to support the outstanding senior notes. See “Deposit and Application of Funds for Card SeriesNotes—Targeted Deposits of Card Series Principal Amounts to the Principal Funding Account” and“—Allocation to Principal Funding Subaccounts.” For example, if a tranche of Class A notes has beenrepaid, this generally means that, unless other Class A notes are issued, at least some Class B notes, ClassC notes and Class D notes may be repaid when such Class B notes, Class C notes and Class D notes arerequired to be repaid even if other tranches of Class A notes are outstanding.

• If the principal funding subaccounts for the senior classes of notes have been sufficiently prefunded asdescribed in “Deposit and Application of Funds for Card Series Notes—Targeted Deposits of Card SeriesPrincipal Amounts to the Principal Funding Account—Prefunding of the Principal Funding Account ofSenior Classes.”

• If new tranches of subordinated notes are issued or other forms of credit enhancement exist so that thesubordinated notes that have reached their Expected Principal Payment Dates are no longer necessary toprovide the required subordination.

• If a tranche of subordinated notes reaches its legal maturity date.

Card series Principal Amounts remaining after any reallocations to pay interest on or other amounts relatedto the senior notes or to pay the Card series’s portion of the servicing fees will be first applied to make targeteddeposits to the principal funding subaccounts of senior notes before being applied to make targeted deposits tothe principal funding subaccounts of the subordinated notes.

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Required Subordinated Amount and Usage

The required subordinated amount for a senior class or tranche of notes is the amount of subordinated notesthat is required to be outstanding and available to provide subordination for that class or tranche of senior noteson the date when that class or tranche of senior notes is issued.

Class A Required Subordinated Amount. The Class A Required Subordinated Amount of Subordinated notesfor any tranche of Class A Card series notes on any date is equal to the sum of the Class A RequiredSubordinated Amount of Class B notes, the Class A Required Subordinated Amount of Class C notes and theClass A Required Subordinated Amount of Class D notes on that date. For each tranche of Class A notes, theClass A Required Subordinated Amount of Class B notes, the Class A Required Subordinated Amount of Class Cnotes and the Class A Required Subordinated Amount of Class D notes will be equal to a stated percentage of theAdjusted Outstanding Dollar Principal Amount of that tranche of Class A notes. However, after an event ofdefault and acceleration or after an early redemption event has occurred for any tranche of Class A notes, therequired subordinated amount of any subordinated class of notes will be the greater of (x) the requiredsubordinated amount of such subordinated class on that date and (y) the required subordinated amount of suchsubordinated class on the date immediately prior to that event of default or early redemption event.

See the related prospectus supplement for a discussion of the specific Class A Required SubordinatedAmount of Subordinated notes for the related tranche of Class A Card series notes.

Class B Required Subordinated Amount. The Class B Required Subordinated Amount of Subordinated notesfor any tranche of Class B Card series notes on any date is equal to the sum of the Class B Required SubordinatedAmount of Class C notes and the Class B Required Subordinated Amount of Class D notes on that date.

For each tranche of Class B notes, the Class B Required Subordinated Amount of Class C notes will equal(a) its pro rata share (based on the Adjusted Outstanding Dollar Principal Amount) of the Class A RequiredSubordinated Amount of Class C notes for all Class A notes with a Class A Required Subordinated Amount ofClass B notes greater than zero, plus (b) the following amount:

• its pro rata share (based on the Adjusted Outstanding Dollar Principal Amount) of (i) the AdjustedOutstanding Dollar Principal Amount of all Class B Card series notes minus (ii) the sum of the Class ARequired Subordinated Amount of Class B notes for all Class A Card series notes, times

• a stated percentage.

However, after an event of default and acceleration or an early redemption event has occurred for any tranche ofClass B notes, the Class B Required Subordinated Amount of Class C notes for that tranche of Class B notes willbe the greatest of (1) the Class B Required Subordinated Amount of Class C notes for that tranche of Class Bnotes on that date, (2) the Class B Required Subordinated Amount of Class C notes for that tranche of Class Bnotes on the date immediately prior to that event of default and acceleration or early redemption event and(3) such other amount that may be required by the rating agencies.

For each tranche of Class B notes, the Class B Required Subordinated Amount of Class D notes will equal(x) its pro rata share (based on the Adjusted Outstanding Dollar Principal Amount) of the Class A RequiredSubordinated Amount of Class D notes for all Class A notes with a Class A Required Subordinated Amount ofClass B notes greater than zero, plus (y) the following amount:

• its pro rata share (based on the Adjusted Outstanding Dollar Principal Amount) of (i) the AdjustedOutstanding Dollar Principal Amount of all Class B Card series notes minus (ii) the sum of the Class ARequired Subordinated Amount of Class B notes for all Class A Card series notes, times

• a stated percentage.

However, after an event of default and acceleration or an early redemption event has occurred for any tranche ofClass B notes, the Class B Required Subordinated Amount of Class D notes for that tranche of Class B notes will

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be the greater of (1) the Class B Required Subordinated Amount of Class D notes for that tranche of Class Bnotes on that date and (2) the Class B Required Subordinated Amount of Class D notes for that tranche of ClassB notes on the date immediately prior to that event of default and acceleration or early redemption event.

See the related prospectus supplement for a discussion of the specific Class B Required SubordinatedAmount of Subordinated notes for the related tranche of Class B Card series notes.

Class C Required Subordinated Amount. For each tranche of Class C notes, the Class C RequiredSubordinated Amount of Class D notes will equal (a) its pro rata share (based on the Adjusted OutstandingDollar Principal Amount) of the sum of the Class A Required Subordinated Amount of Class D notes for allClass A Card series notes plus the aggregate amount computed as described in clause (y) of “—Class B RequiredSubordinated Amount” above for all Class B Card series notes, plus (b) the following amount:

• its pro rata share (based on the Adjusted Outstanding Dollar Principal Amount) of (i) the AdjustedOutstanding Dollar Principal Amount of all Class C Card series notes minus (ii) the sum of the Class ARequired Subordinated Amount of Class C notes for all Class A Card series notes plus the aggregateamount computed as described in clause (b) of “—Class B Required Subordinated Amount” above for allClass B Card series notes, times

• a stated percentage.

However, after an event of default and acceleration or an early redemption event has occurred for any tranche ofClass C notes, the Class C Required Subordinated Amount of Class D notes for that tranche of Class C notes willbe the greater of (1) the Class C Required Subordinated Amount of Class D notes for that tranche of Class Cnotes on that date and (2) the Class C Required Subordinated Amount of Class D notes for that tranche of ClassC notes on the date immediately prior to that event of default and acceleration or early redemption event.

See the related prospectus supplement for a discussion of the specific Class C Required SubordinatedAmount of Subordinated notes for the related tranche of Class C Card series notes.

Required Subordinated Amounts Generally. COMET may change the above percentages at any time withoutthe consent of any noteholders. In addition, COMET may change the required subordinated amount for anytranche of Card series notes, the methodology of computing the required subordinated amount, or utilize forms ofcredit enhancement other than subordinated Card series notes in order to provide senior Card series notes withthe required credit enhancement, at any time without the consent of any noteholders so long as COMET has:

• received written confirmation from each rating agency that has rated any outstanding Card series notesthat the change will not result in the reduction, qualification with negative implications or withdrawal ofits then-current rating of any outstanding Card series notes;

• delivered an opinion of counsel, that for United States federal income tax purposes, (1) the change willnot cause any outstanding series, class or tranche of Card series notes of COMET that were characterizedas debt at the time of their issuance to be characterized as other than debt, (2) the change will not cause orconstitute an event in which gain or loss would be recognized by any holder of Card series notes, and(3) the change will not cause COMET to be treated as an association, or publicly traded partnership,taxable as a corporation; and

• delivered an opinion of counsel, that for United States federal income tax purposes, (1) the change willnot cause any outstanding investor certificates issued by the master trust that were characterized as debt atthe time of their issuance to be characterized as other than debt, (2) the change will not cause or constitutean event in which gain or loss would be recognized by any investor certificateholder and (3) the changewill not cause the master trust to be treated as an association, or publicly traded partnership, taxable as acorporation.

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Therefore, reductions in the Adjusted Outstanding Dollar Principal Amount of a tranche of senior Cardseries notes will generally result in a reduction in the required subordinated amount for that tranche. For eachtranche of Class B Card series notes, a reduction in the required subordinated amount for that tranche of Class Bnotes may occur as a result of more Class B Card series notes being outstanding than is required for the Class ACard series notes or as a result of the issuance of additional Class B Card series notes. For each tranche of ClassC Card series notes, a reduction in the required subordinated amount for that tranche of Class C notes may occuras a result of more Class C Card series notes being outstanding than is required for the Class A notes and Class Bnotes of the Card series or as a result of the issuance of additional Class C Card series notes.

See the related prospectus supplement for an example of the calculations of required subordinated amountsof the Card series notes.

Usage. No class or tranche of notes of a series may be issued unless the required subordinated amount forthat class or tranche of notes is available at the time of its issuance. The consumption of enhancement fromsubordinated Card series notes is called usage. The required subordinated amount is also used, in conjunction,with usage, to determine the remaining available subordinated amount for a tranche of senior notes and whether aclass or tranche of subordinated notes of a multiple tranche series may be repaid before its legal maturity datewhile senior notes of that series are outstanding. For a detailed description of the calculation of usage amountsfor any tranche of notes, see the definitions of Class A Usage Amount of Subordinated notes, Class A UsageAmount of Class B notes, Class A Usage Amount of Class C notes, Class A Usage Amount of Class D notes,Class B Usage Amount of Subordinated notes, Class B Usage Amount of Class C notes, Class B Usage Amountof Class D notes and Class C Usage Amount of Class D notes in the “Glossary of Defined Terms.”

Principal Payments on Subordinated Card Series Notes

The required subordinated amount of a tranche of senior Card series notes, in conjunction with usage, isused to determine (a) whether a tranche of senior Card series notes can be issued, as described above, (b) whethera tranche of subordinated Card series notes may be repaid before its legal maturity date while senior Card seriesnotes are outstanding and (c) whether the principal funding subaccount for that tranche of senior Card seriesnotes needs to be prefunded. See “—Required Subordinated Amount and Usage” above.

No payment of principal will be made on any Class B Card series notes unless, following the payment, theNominal Liquidation Amount of the remaining outstanding Class B Card series notes is at least equal to theClass A Required Subordinated Amount of Class B notes for all outstanding Class A Card series notes less anyusage of the Class A Required Subordinated Amount of Class B notes for all outstanding Class A Card seriesnotes. Similarly, no payment of principal will be made on any Class C Card series notes unless, following thepayment, the Nominal Liquidation Amount of the remaining outstanding Class C Card series notes is at leastequal to the required subordinated amount of Class C notes for all outstanding Class A notes and Class B notes ofthe Card series less any usage of the required subordinated amount of Class C notes for those outstandingClass A notes and Class B notes of the Card series. Similarly, no payment of principal will be made on any ClassD Card series notes unless, following the payment, the Nominal Liquidation Amount of the remainingoutstanding Class D Card series notes is at least equal to the required subordinated amount of Class D notes forall outstanding Class A notes, Class B notes and Class C notes of the Card series less any usage of the requiredsubordinated amount of Class D notes for those outstanding Class A notes, Class B notes and Class C notes ofthe Card series. However, there are some exceptions to these rules. See “Deposit and Application of Funds forCard Series Notes—Sale of Assets” and “Sources of Funds to Pay the Notes—Sale of Assets.”

Redemption and Early Redemption of Notes

Optional Redemption

The servicer or any affiliate of the servicer, has the right, but not the obligation to direct COMET to redeemthe notes of any series, class or tranche before its Expected Principal Payment Date at any time when the

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aggregate Nominal Liquidation Amount of that series, class or tranche is less than 5% of the highest outstandingdollar principal amount at any time of that series, class or tranche. This redemption option is referred to as aclean-up call. COMET will not redeem subordinated notes if those notes are required to provide creditenhancement for senior classes of notes of the Card series.

If COMET is directed to redeem notes, COMET will notify the registered holders of those notes at least 30days prior to the redemption date. The redemption price of a note will equal 100% of the outstanding principalamount of that note, plus accrued but unpaid interest on the note to but excluding the date of redemption.

If COMET is unable to pay the redemption price in full on the redemption date, monthly payments on thosenotes will thereafter be made, subject to the principal payment rules described above under “—Subordination ofInterest and Principal,” until either the principal of and accrued interest on those notes are paid in full or thelegal maturity date occurs, whichever is earlier. Any funds in the principal funding subaccount, the interestfunding subaccount and, if applicable, the Class C reserve subaccount for those notes will be applied to make theprincipal and interest payments on those notes on the redemption date.

Mandatory Redemption

Each series, class and tranche of notes will be subject to mandatory redemption on its Expected PrincipalPayment Date, which will generally be 34 months before its legal maturity date. In addition, if any other earlyredemption event occurs, COMET will be required to redeem each series, class or tranche of the affected notesbefore the Expected Principal Payment Date of that series, class or tranche of notes; however, if so indicated inthe related prospectus supplement for certain such affected series, class or tranche of notes with the benefit of aderivative agreement, subject to certain exceptions, such redemption will not occur earlier than the ExpectedPrincipal Payment Date of such series, class or tranche of notes. COMET will give notice to holders of theaffected series, class or tranche of notes before an early redemption date. See “—Early Redemption Events” for adescription of the early redemption events and their consequences to noteholders.

Whenever COMET redeems a series, class or tranche of notes, it will do so only to the extent that FinanceCharge Amounts and Principal Amounts allocated to that series, class or tranche of notes are sufficient to redeemthat series, class or tranche of notes in full, and only to the extent that the notes to be redeemed are not requiredto provide required subordination for senior notes. A noteholder will have no claim against COMET if COMETfails to make a required redemption of a series, class or tranche of notes before the legal maturity date because nofunds are available for that purpose or because the notes that would otherwise be redeemed are required toprovide subordination for senior notes. The failure to redeem before the legal maturity date under thesecircumstances will not be an event of default.

Early Redemption Events

COMET will be required to repay in whole or in part, to the extent that funds are available for repaymentafter giving effect to all allocations and reallocations and, with respect to subordinated notes of a multiple trancheseries, to the extent payment is permitted by the subordination provisions of the senior notes of the same series,each affected series, class or tranche of notes upon the occurrence of an early redemption event.

Early redemption events include the following:

• the occurrence of an event of default and acceleration of the notes of a series, class or tranche;

• for any series, class or tranche of notes, the occurrence of the Expected Principal Payment Date of suchseries, class or tranche of notes;

• COMET becoming an “investment company” within the meaning of the Investment Company Act of1940, as amended;

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• the occurrence of certain events of bankruptcy or insolvency of the related transferor;

• for any month the average of the excess spread amounts for the three preceding calendar months is lessthan the required excess spread amount for such month; and

• for any series, class or tranche of notes, any additional early redemption event specified in the relatedprospectus supplement.

In addition to the early redemption events applicable to all notes, including the Card series notes, describedabove, each of the following events will be an early redemption event for the Card series notes:

—if for any month, the average of the Excess Spread Amounts for the three preceding calendar months isless than the Required Excess Spread Amount for such month; or

—a Pay Out Event for the COMT collateral certificate occurs as described in “The Master Trust—PayOut Events” or, if required by the rating agencies, any pay out event or other early amortization eventoccurs for any other collateral certificate included in COMET.

The excess spread amount for any month is equal to the amount of finance charge amounts allocated to theCard series, minus the targeted interest deposits and servicing fee payments, the default amounts allocated to theCard series and any reimbursements of deficits in the nominal liquidation amount of any tranche of Card seriesnotes for that month. Currently, the required excess spread amount is zero. This amount may be changedprovided COMET (i) receives the consent of the rating agencies and (ii) reasonably believes that the change willnot have a material adverse effect on the noteholders.

The amount repaid with respect to a tranche of notes will equal the outstanding principal amount of thattranche, plus any accrued, past due and additional interest to but excluding the date of repayment. If the amountof Finance Charge Amounts and Principal Amounts allocable to the series, class or tranche of notes to beredeemed, together with funds on deposit in the applicable COMET trust accounts and any amounts payable toCOMET under any applicable derivative agreement, supplemental credit enhancement agreement orsupplemental liquidity agreement are insufficient to pay the redemption price in full on the next payment dateafter giving effect to the subordination provisions and allocations to any other notes ranking equally with thatnote, monthly payments on the notes to be redeemed will thereafter be made on each principal payment date untilthe outstanding principal amount of the notes plus all accrued, past due and additional interest are paid in full, orthe legal maturity date of the notes occurs, whichever is earlier. However, if so specified in the related prospectussupplement, subject to certain exceptions, any notes that have the benefit of a derivative agreement will not beredeemed prior to such notes’ Expected Principal Payment Date.

No Principal Amounts will be allocated to a series, class or tranche of notes with a Nominal LiquidationAmount of zero, even if the stated principal amount of that series, class or tranche has not been paid in full.However, any funds previously deposited in the applicable COMET trust accounts and any amounts receivedfrom an applicable derivative agreement, supplemental credit enhancement agreement or supplemental liquidityagreement will still be available to pay principal of and interest on that series, class or tranche of notes. Inaddition, if Finance Charge Amounts are available, they can be applied to reimburse reductions in the NominalLiquidation Amount of that series, class or tranche resulting from reallocations of Principal Amounts to payinterest on senior classes of notes or the servicing fee, or from charge-offs from uncovered Default Amounts.

Payments on redeemed notes will be made in the same priority as described in the related prospectussupplement. COMET will give notice to holders of the affected notes before an early redemption date.

Events of Default

Each of the following events is an event of default for any affected series, class or tranche of notes:

• for any series, class or tranche of notes, as applicable, COMET’s failure, for a period of 35 days, to payinterest on such notes when such interest becomes due and payable;

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• for any series, class or tranche of notes, COMET’s failure to pay the stated principal amount of suchseries, class or tranche of notes on the applicable legal maturity date;

• COMET’s default in the performance, or breach, of any other of its covenants or warranties in theindenture (or any supplement thereto), for a period of 60 days after the indenture trustee or the holders ofat least 25% of the aggregate outstanding dollar principal amount of the outstanding notes of any affectedseries, class or tranche has provided written notice requesting remedy of such breach, and, as a result ofsuch default, the interests of the related noteholders are materially and adversely affected and continue tobe materially and adversely affected during the 60-day period;

• the occurrence of certain events of bankruptcy or insolvency of COMET; or

• for any series, class or tranche, any additional events of default specified in the prospectus supplementrelating to the series, class or tranche.

Failure to pay the full stated principal amount of a note on its Expected Principal Payment Date will notconstitute an event of default. An event of default for one series, class or tranche of notes will not necessarily bean event of default for any other series, class or tranche of notes.

It is not an event of default if COMET fails to redeem a note because it does not have sufficient fundsavailable or because payment of principal of a subordinated note is delayed because it is necessary to providerequired subordination for a senior class of notes.

Events of Default Remedies

The occurrence of an event of default involving the bankruptcy or insolvency of COMET results in anautomatic acceleration of all of the notes, without notice or demand to any person, and COMET willautomatically and immediately be obligated to pay off the notes to the extent funds are available. If other eventsof default occur and are continuing for any series, class or tranche, either the indenture trustee or the holders ofmore than a majority in aggregate outstanding dollar principal amount of the notes of the affected series, class ortranche may declare by written notice to COMET the principal of all those outstanding notes to be immediatelydue and payable. This declaration of acceleration may generally be rescinded by the holders of a majority inaggregate outstanding dollar principal amount of outstanding notes of the affected series, class or tranche.

If a series, class or tranche of notes is accelerated before its legal maturity date, the indenture trustee may atany time thereafter, and at the direction of the holders of a majority of the aggregate outstanding dollar principalamount of notes of the affected series, class or tranche at any time thereafter will sell or direct the sale of assets,in an amount up to the Nominal Liquidation Amount of the affected series, class or tranche of notes plus anyaccrued, past due and additional interest on the affected series, class or tranche, as described in “Sources ofFunds to Pay the Notes—Sale of Assets,” but only if at least one of the following conditions is met:

• the noteholders of 90% of the aggregate outstanding dollar principal amount of the accelerated series,class or tranche of notes consent; or

• the net proceeds of such sale (plus amounts on deposit in the applicable subaccounts and payments to bereceived from any applicable derivative agreement, supplemental credit enhancement agreement andsupplemental liquidity agreement) would be sufficient to pay all outstanding amounts due on theaccelerated series, class or tranche of notes; or

• if the indenture trustee determines that the funds to be allocated to the accelerated series, class or trancheof notes may not be sufficient on an ongoing basis to make all payments on such notes as such paymentswould have become due if such obligations had not been declared due and payable, and the noteholders ofnot less than 662⁄3% of the aggregate outstanding principal dollar amount of notes of the acceleratedseries, class or tranche, as applicable, consent to the sale.

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In addition, a sale of assets following an event of default and acceleration of a subordinated tranche of notes ofa multiple tranche series may be delayed as described under “Sources of Funds to Pay the Notes—Sale of Assets” ifthe payment is not permitted by the subordination provisions of the senior class of notes of the same series.

If an event of default occurs relating to the failure to pay principal of or interest on a series, class or trancheof notes in full on the legal maturity date, assets will automatically be sold, as described in “Sources of Funds toPay the Notes—Sale of Assets.”

Following the sale of assets for a series, class or tranche of notes, the Nominal Liquidation Amount of thatseries, class or tranche will be zero and Principal Amounts and Finance Charge Amounts will no longer beallocated to that series, class or tranche. Holders of the applicable series, class or tranche of notes will receive theproceeds of the sale plus any amounts on deposit in COMET trust accounts that are allocable to that series, classor tranche in an amount not to exceed the outstanding dollar principal amount of, plus any accrued, past due andadditional interest on, that series, class or tranche of notes.

Any money or other property collected by the indenture trustee in connection with a sale of assets followingan event of default and acceleration for a series, class or tranche of notes will be applied in the following priority,at the date fixed by the indenture trustee:

• first, to pay all compensation owed to the indenture trustee for services rendered in connection with theindenture (and any supplement thereto), reimbursements to the indenture trustee for all reasonableexpenses, disbursements and advances incurred or made in accordance with the indenture (and anysupplement thereto), or indemnification of the indenture trustee for any and all losses, liabilities orexpenses incurred without negligence or bad faith on its part, arising out of or in connection with itsadministration of COMET;

• second, to pay the amounts of interest and principal then due and unpaid and any accrued, past due andadditional interest on the notes of that series, class or tranche;

• third, to pay any servicing fees owed to the applicable servicer and any other fees or expenses then owingthat series, class or tranche; and

• fourth, to pay any remaining amounts to COMET.

If a sale of assets does not take place following an event of default and acceleration of a series, class ortranche of notes, then:

• COMET will continue to hold the assets, and distributions on the assets will continue to be applied inaccordance with the distribution provisions of the indenture, the asset pool supplement and the indenturesupplement.

• Principal will be paid on the accelerated series, class or tranche of notes to the extent funds are receivedby COMET and available to the accelerated series, class or tranche after giving effect to all allocationsand reallocations and payment is permitted by the subordination provisions of the senior notes of thesame series.

• If the accelerated notes are a subordinated tranche of notes of a multiple tranche series, and thesubordination provisions prevent the payment of the accelerated subordinated tranche, prefunding of thesenior classes of that series will begin, as provided in the applicable indenture supplement. Thereafter,payment will be made to the extent provided in the applicable indenture supplement.

• On the legal maturity date of the accelerated notes, if the notes have not been paid in full, the indenturetrustee will the direct the sale of assets as provided in the applicable indenture supplement.

Within 90 days of any event of default occurs for any series, class or tranche of notes, the indenture trusteewill provide notice of that event of default to all noteholders at their address listed in the note register. See “TheIndenture—Addresses for Notices.” The holders of a majority in aggregate outstanding dollar principal amount

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of any accelerated series, class or tranche of notes have the right to direct the time, method and place ofconducting any proceeding for any remedy available to the indenture trustee, or exercising any trust or powerconferred on the indenture trustee. However, this right may be exercised only if the direction provided by thenoteholders does not conflict with applicable law or the indenture, the asset pool supplement or the relatedindenture supplement or have a substantial likelihood of involving the indenture trustee in personal liability. Theholder of any note will have the right to institute suit for the enforcement of payment of principal of and intereston such note on the legal maturity date expressed in such note, and such right will not be impaired without theconsent of that noteholder; provided, however, that the obligation to pay principal of or interest on the notes orany other amount payable to any noteholder will be without recourse to any transferor, indenture trustee, ownertrustee or any affiliate, or any officer, employee or director thereof, and the obligation of COMET to payprincipal of or interest on the notes or any other amount payable to any noteholder will be subject to theallocation and payment provisions in the asset pool supplement and the applicable indenture supplement andlimited to amounts available (after giving effect to such allocation and payment provisions) from the collateralpledged to secure the notes.

Generally, if an event of default occurs and any notes are accelerated, the indenture trustee is not obligatedto exercise any of its rights or powers under the indenture (and any supplement thereto) unless the holders ofaffected notes offer the indenture trustee reasonable indemnity. Upon acceleration of the maturity of a series,class or tranche of notes following an event of default, the indenture trustee will have a lien on the collateral forthose notes ranking senior to the lien of those notes for its unpaid fees and expenses.

The indenture trustee has agreed, and the noteholders will agree, that they will not at any time instituteagainst COMET, Capital One Funding, the master trust or any other master trust or securitization special purposeentity for which the banks or Capital One Funding or any of their affiliates is transferor or servicer, anybankruptcy, reorganization or other proceeding under any federal or state bankruptcy or similar law.

Issuances of New Series, Classes and Tranches of Notes

COMET may issue a new series, class or tranche of notes or issue additional notes of an existing series,class or tranche only if the conditions of issuance are met (or waived as described below). These conditionsinclude:

• on or prior to the third Business Day before the new issuance is to occur, COMET gives the indenturetrustee and the rating agencies notice of the new issuance;

• on or prior to the date that the new issuance is to occur, COMET delivers to the indenture trustee and eachrating agency a certificate to the effect that:

—COMET reasonably believes that the new issuance will not (i) cause an early redemption event orevent of default for any note then outstanding, (ii) adversely affect the amount of funds available to bedistributed to noteholders of any series, class or tranche of notes or the timing of such distributions or(iii) adversely affect the security interest of the indenture trustee in the collateral securing theoutstanding notes;

—all instruments furnished to the indenture trustee conform to the requirements of the indenture (and anysupplement thereto) and constitute sufficient authority under the indenture (and any supplementthereto) for the indenture trustee to authenticate and deliver the notes;

—the form and terms of the notes have been established in conformity with the provisions of theindenture (and any supplement thereto); and

—COMET shall have satisfied such other matters as the indenture trustee may reasonably request;

• on or prior to the date that the new issuance is to occur, COMET delivers to the indenture trustee and eachrating agency an opinion of counsel – which may be from internal counsel to COMET – that all laws andrequirements with respect to the execution and delivery by COMET of the new notes have been complied

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with, COMET has the trust power and authority to issue the new notes, and the new notes have been dulyauthorized and delivered by COMET, and, assuming due authentication and delivery by the indenturetrustee, constitute legal, valid and binding obligations of COMET enforceable in accordance with theirterms, subject to certain limitations and conditions, and are entitled to the benefits of the indenture (andany supplement thereto) equally and ratably with all other notes outstanding, if any, of that series, class ortranche, subject to the terms of the indenture, the related asset pool supplement and each related indenturesupplement;

• on or prior to the date that the new issuance is to occur, COMET delivers to the indenture trustee and eachrating agency a master trust tax opinion for each applicable master trust and an issuing entity tax opinionwith respect to such issuance;

• if any additional conditions to the issuance of the new notes which may be required by a rating agencythat has rated any outstanding series, class or tranche of notes, either COMET satisfies those conditions orCOMET obtains confirmation from each rating agency that has rated any outstanding series, class ortranche of notes that the new issuance will not have caused a reduction, qualification with negativeimplications or withdrawal of any then-current rating of any outstanding series, class or tranche of notes;

• in the case of bearer notes, the notes will be as described in section 163(f)(2)(B) of the Internal RevenueCode and that section will apply to the notes;

• on or prior to the date that the new issuance is to occur, COMET delivers to the indenture trustee the assetpool supplement, an indenture supplement and terms document, if applicable, relating to the applicableseries, class or tranche of notes;

• in the case of foreign currency notes, COMET appoints one or more paying agents in the appropriatecountries;

• the provisions governing required subordinated amounts are satisfied; and

• any other conditions specified in the related prospectus supplement are satisfied.

For the Card series, in addition to the above-described conditions to issuance of notes, COMET may issuenew classes and tranches of Card series notes (including additional notes of an outstanding tranche or class), solong as the following conditions are satisfied:

—any increase in the targeted deposit amount of any Class C reserve subaccount or Class D reservesubaccount caused by such issuance will have been funded on or prior to such issuance date;

—immediately after the issuance, the Nominal Liquidation Amount of the outstanding Class B Cardseries notes must be at least equal to the Class A Available Subordinated Amount of Class B notes forall outstanding Class A Card series notes;

—immediately after the issuance, the Nominal Liquidation Amount of the outstanding Class C Cardseries notes must be at least equal to the sum of the following:

(a) the aggregate Class A Available Subordinated Amount of Class C notes for all outstandingClass A Card series notes with a Class A Required Subordinated Amount of Class B notesequal to zero, and

(b) the aggregate Class B Available Subordinated Amount of Class C notes for all outstandingClass B Card series notes; and

—immediately after the issuance, the Nominal Liquidation Amount of the outstanding Class D Cardseries notes must be at least equal to the greater of the following amounts:

(a) the sum of the following amounts:

(i) the aggregate Class A Available Subordinated Amount of Class D notes for alloutstanding Class A Card series notes with a Class A Required Subordinated Amount ofClass B notes equal to zero, and

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(ii) the aggregate Class B Available Subordinated Amount of Class D notes for alloutstanding Class B Card series notes, and

(b) the aggregate Class C Available Subordinated Amount of Class D notes for all outstandingClass C Card series notes.

COMET and the indenture trustee are not required to provide prior notice to, permit any prior review by orto obtain the consent of any noteholder of, any outstanding series, class or tranche to issue any additional notes ofany series, class or tranche.

There are no restrictions on the timing or amount of any additional issuance of notes of an outstanding classor tranche of a multiple tranche series, so long as the conditions described above are met or waived. As of thedate of any additional issuance of notes in an outstanding class or tranche of notes, the stated principal amount,outstanding dollar principal amount and Nominal Liquidation Amount of that tranche will be increased to reflectthe principal amount of the additional notes. If the additional notes are a class or tranche of notes that has thebenefit of a derivative agreement, COMET will enter into a derivative agreement for the benefit of the additionalnotes. In addition, if the additional notes are a class or tranche of notes that has the benefit of any supplementalcredit enhancement agreement or any supplemental liquidity agreement, COMET will enter into a similarsupplemental credit enhancement agreement or supplemental liquidity agreement, as applicable, for the benefit ofthe additional notes. Furthermore, the targeted deposits, if any, to any issuing entity trust account will beincreased proportionately to reflect the principal amount of the additional notes.

COMET may from time to time, without notice to, or the consent of, the registered holders of a series, classor tranche of notes, create and issue additional notes equal in rank to the series, class or tranche of notes offeredby the accompanying prospectus supplement in all respects—or in all respects except for the payment of interestaccruing prior to the issue date of the further series, class or tranche of notes or the first payment of interestfollowing the issue date of the further series, class or tranche of notes. These further series, classes or tranches ofnotes may be consolidated and form a single series, class or tranche with the previously issued notes and willhave the same terms as to status, redemption or otherwise as the previously issued series, class or tranche ofnotes. In addition, the bank or an affiliate may retain notes of a series, class or tranche upon initial issuance orupon a reopening of a series, class or tranche of notes and may sell them on a subsequent date.

When issued, the additional notes of a tranche will be identical in all respects to the other outstanding notesof that tranche equally and ratably entitled to the benefits of the indenture, the asset pool supplement and therelated indenture supplement as applicable to the previously issued notes of such tranche without preference,priority or distinction.

Modification or Waiver of Issuance Conditions

If COMET obtains confirmation from each rating agency that has rated any outstanding series, class ortranche of notes, subject to certain limitations required by each such rating agency, that the issuance of a newseries, class or tranche will not cause a reduction, qualification or withdrawal of the ratings of any outstandingseries, class or tranche notes rated by that rating agency, then any or all of the conditions to issuance describedabove and in the related prospectus supplement may be waived or modified. In addition, COMET may issue ratedCard series notes subject to waived, modified or additional conditions agreed to between COMET and eachrating agency rating such notes.

Payments on Notes; Paying Agent

The notes offered by this prospectus and the related prospectus supplement will be delivered in book-entryform and payments of principal of and interest on the notes will be made in U.S. dollars as described under“—Book-Entry Notes” unless the stated principal amount of the notes is denominated in a foreign currency.

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COMET, the indenture trustee and any agent of COMET or the indenture trustee will treat the registeredholder of any note as the absolute owner of that note, whether or not the note is overdue and notwithstanding anynotice to the contrary, for the purpose of making payment and for all other purposes.

COMET will make payments on a note to (a) the registered holder of the note at the close of business on therecord date established for the related payment date and (b) the bearer of a note in bearer form upon presentationof that bearer note on the related interest payment date or principal payment date, as applicable.

COMET has designated the corporate trust office of The Bank of New York in New York City as its payingagent for the notes of each series. COMET will identify any other entities appointed to serve as paying agents onnotes of a series, class or tranche in the related prospectus supplement. COMET may at any time designateadditional paying agents or rescind the designation of any paying agent or approve a change in the office throughwhich any paying agent acts. However, COMET will be required to maintain an office, agency or paying agent ineach place of payment for a series, class or tranche of notes.

After notice by mail or publication, all funds paid to a paying agent for the payment of the principal of orinterest on any note of any series which remains unclaimed at the end of two years after the principal or interestbecomes due and payable will be paid to COMET. After funds are paid to COMET, the holder of that note maylook only to COMET for payment of that principal or interest.

Denominations

The notes offered by this prospectus will be issued in denominations of $100,000 and multiples of $1,000 inexcess of that amount.

Record Date

The record date for payment of the notes will be the last day of the month before the related payment date.

Form, Exchange and Registration and Transfer of Notes

The notes offered by this prospectus and the related prospectus supplement will be issued in registered form.The notes will be represented by one or more global notes registered in the name of The Depository TrustCompany, as depository, or its nominee. We refer to each beneficial interest in a global note as a “book-entrynote.” For a description of the special provisions that apply to book-entry notes, see “—Book-Entry Notes.”

A holder of notes may exchange those notes for other notes of the same class or tranche of any authorizeddenominations and of the same aggregate stated principal amount, Expected Principal Payment Date and legalmaturity date, and of like terms.

Any holder of a note may present that note for registration of transfer, with the form of transfer properlyexecuted, at the office of the note registrar or at the office of any transfer agent that COMET designates. Unlessotherwise provided in the note to be transferred or exchanged, holders of notes will not be charged any servicecharge for the exchange or transfer of their notes. Holders of notes that are to be transferred or exchanged will beliable for the payment of any taxes or other governmental charges described in the indenture (and anysupplement thereto) before the transfer or exchange will be completed. The note registrar or transfer agent, as thecase may be, will effect a transfer or exchange when it is satisfied with the documents of title and identity of theperson making the request.

COMET has appointed The Bank of New York as the note registrar and transfer agent for the notes.COMET also may at any time designate additional transfer agents for any series, class or tranche of notes.COMET may at any time rescind the designation of any transfer agent or approve a change in the locationthrough which any transfer agent acts.

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The related prospectus supplement may state that application will be made to list the related series, class ortranche of notes on a stock exchange in Europe or another exchange.

Book-Entry Notes

The notes offered by this prospectus and the related prospectus supplement will be delivered in book-entryform. This means that, except under the limited circumstances described below under “—Definitive Notes,”purchasers of notes will not be entitled to have the notes registered in their names and will not be entitled toreceive physical delivery of the notes in definitive paper form. Instead, upon issuance, all the notes of a class willbe represented by one or more fully registered permanent global notes, without interest coupons.

Each global note will be held by a securities depository named The Depository Trust Company (DTC) andwill be registered in the name of its nominee, Cede & Co. No global note representing book-entry notes may betransferred except as a whole by DTC to a nominee of DTC, or by a nominee of DTC to another nominee ofDTC. Thus, DTC or its nominee will be the only registered holder of the notes and will be considered the solerepresentative of the beneficial owners of notes for purposes of the indenture (and any supplement thereto).

The registration of the global notes in the name of Cede & Co. will not affect beneficial ownership and isperformed merely to facilitate subsequent transfers. The book-entry system, which is also the system throughwhich most publicly traded common stock is held, is used because it eliminates the need for physical movementof securities. The laws of some jurisdictions, however, may require some purchasers to take physical delivery oftheir notes in definitive form. These laws may impair the ability to own or transfer book-entry notes.

Purchasers of notes in the United States may hold interests in the global notes through DTC, either directly,if they are participants in that system—such as a bank, brokerage house or other institution that maintainssecurities accounts for customers with DTC or its nominee—or otherwise indirectly through a participant inDTC. Purchasers of notes in Europe may hold interests in the global notes through Clearstream, Luxembourg, orthrough Euroclear Bank S.A./N.V., as operator of the Euroclear system.

Because DTC will be the only registered owner of the global notes, Clearstream, Luxembourg and Euroclearwill hold positions through their respective U.S. depositories, which in turn will hold positions on the books ofDTC.

As long as the notes are in book-entry form, they will be evidenced solely by entries on the books of DTC,its participants and any indirect participants. DTC will maintain records showing:

• the ownership interests of its participants, including the U.S. depositories; and

• all transfers of ownership interests between its participants.

The participants and indirect participants, in turn, will maintain records showing:

• the ownership interests of their customers, including indirect participants, that hold the notes throughthose participants; and

• all transfers between these persons.

Thus, each beneficial owner of a book-entry note will hold its note indirectly through a hierarchy ofintermediaries, with DTC at the “top” and the beneficial owner’s own securities intermediary at the “bottom.”

COMET, the indenture trustee and their agents will not be liable for the accuracy of, and are not responsiblefor maintaining, supervising or reviewing DTC’s records or any participant’s records relating to book-entrynotes. COMET, the indenture trustee and their agents also will not be responsible or liable for payments made onaccount of the book-entry notes.

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Until Definitive Notes are issued to the beneficial owners as described below under “—Definitive Notes,” allreferences to “holders” of notes means DTC. COMET, the indenture trustee and any paying agent, transfer agentor note registrar may treat DTC as the absolute owner of the notes for all purposes.

Beneficial owners of book-entry notes should realize that COMET will make all distributions of principal ofand interest on their notes to DTC and will send all required reports and notices solely to DTC as long as DTC isthe registered holder of the notes. DTC and the participants are generally required to receive and transmit alldistributions, notices and directions from the indenture trustee to the beneficial owners through the chain ofintermediaries.

Similarly, the indenture trustee will accept notices and directions solely from DTC. Therefore, in order toexercise any rights of a holder of notes under the indenture (and any supplement thereto), each person owning abeneficial interest in the notes must rely on the procedures of DTC and, in some cases, Clearstream, Luxembourgor Euroclear. If the beneficial owner is not a participant in that system, then it must rely on the procedures of theparticipant through which that person owns its interest. DTC has advised COMET that it will take actions underthe indenture (and any supplement thereto) only at the direction of its participants, which in turn will act only atthe direction of the beneficial owners. Some of these actions, however, may conflict with actions it takes at thedirection of other participants and beneficial owners.

Notices and other communications by DTC to participants, by participants to indirect participants, and byparticipants and indirect participants to beneficial owners will be governed by arrangements among them.

Beneficial owners of book-entry notes should also realize that book-entry notes may be more difficult topledge because of the lack of a physical note. A beneficial owner may also experience delays in receivingdistributions on his or her notes since distributions will initially be made to DTC and must be transferred throughthe chain of intermediaries to the beneficial owner’s account.

The Depository Trust Company

DTC is a limited-purpose trust company organized under the New York Banking Law and is a “bankinginstitution” within the meaning of the New York Banking Law. DTC is also a member of the Federal ReserveSystem, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a“clearing agency” registered under Section 17A of the Securities Exchange Act of 1934. DTC was created tohold securities deposited by its participants and to facilitate the clearance and settlement of securities transactionsamong its participants through electronic book-entry changes in accounts of the participants, thus eliminating theneed for physical movement of securities. DTC is owned by a number of its participants and by the New YorkStock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers,Inc. The rules applicable to DTC and its participants are on file with the Securities and Exchange Commission.

Clearstream, Luxembourg

Clearstream, Luxembourg is registered as a bank in Luxembourg and is regulated by the Banque Centrale duLuxembourg, the Luxembourg Central Bank, which supervises Luxembourg banks. Clearstream, Luxembourgholds securities for its customers and facilitates the clearance and settlement of securities transactions byelectronic book-entry transfers between their accounts. Clearstream, Luxembourg provides various services,including safekeeping, administration, clearance and settlement of internationally traded securities and securitieslending and borrowing. Clearstream, Luxembourg also deals with domestic securities markets in over 30countries through established depository and custodial relationships. Clearstream, Luxembourg has establishedan electronic bridge with Euroclear in Brussels to facilitate settlement of trades between Clearstream,Luxembourg and Euroclear. Clearstream, Luxembourg currently accepts over 110,000 securities issues on itsbooks.

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Clearstream, Luxembourg’s customers are worldwide financial institutions including underwriters,securities brokers and dealers, banks, trust companies and clearing corporations. Clearstream, Luxembourg’sU.S. customers are limited to securities brokers and dealers and banks. Currently, Clearstream, Luxembourg hasapproximately 2,000 customers located in over 80 countries, including all major European countries, Canada, andthe United States. Indirect access to Clearstream, Luxembourg is available to other institutions that clear throughor maintain a custodial relationship with an account holder of Clearstream, Luxembourg.

Euroclear System

Euroclear was created in 1968 to hold securities for participants of Euroclear and to clear and settletransactions between Euroclear participants through simultaneous electronic book-entry delivery againstpayment. This system eliminates the need for physical movement of securities and any risk from lack ofsimultaneous transfers of securities and cash. Euroclear includes various other services, including securitieslending and borrowing and interfaces with domestic markets in several countries. The Euroclear operator isEuroclear Bank S.A./N.V. The Euroclear operator conducts all operations. All Euroclear securities clearanceaccounts and Euroclear cash accounts are accounts with the Euroclear operator. The Euroclear operatorestablishes policy for Euroclear on behalf of Euroclear participants. Euroclear participants include banks,including central banks, securities brokers and dealers and other professional financial intermediaries and mayinclude the underwriters. Indirect access to Euroclear is also available to other firms that clear through ormaintain a custodial relationship with a Euroclear participant, either directly or indirectly.

Securities clearance accounts and cash accounts with the Euroclear operator are governed by the Terms andConditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, andapplicable Belgian law. These Terms and Conditions govern transfers of securities and cash within Euroclear,withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities inEuroclear. All securities in Euroclear are held on a fungible basis without attribution of specific securities tospecific securities clearance accounts. The Euroclear operator acts under the Terms and Conditions only onbehalf of Euroclear participants, and has no record of or relationship with persons holding through Euroclearparticipants.

This information about DTC, Clearstream, Luxembourg and Euroclear has been provided by each of themfor informational purposes only and is not intended to serve as a representation, warranty or contractmodification of any kind.

Distributions on Book-Entry Notes

COMET will make distributions of principal of and interest on book-entry notes to DTC. These paymentswill be made in immediately available funds by COMET’s paying agent, The Bank of New York, at the office ofthe paying agent that COMET designates for that purpose.

In the case of principal payments, the global notes must be presented to the paying agent in time for thepaying agent to make those payments in immediately available funds in accordance with its normal paymentprocedures.

Upon receipt of any payment of principal of or interest on a global note, DTC will immediately credit theaccounts of its participants on its book-entry registration and transfer system. DTC will credit those accountswith payments in amounts proportionate to the participants’ respective beneficial interests in the stated principalamount of the global note as shown on the records of DTC. Payments by participants to beneficial owners ofbook-entry notes will be governed by standing instructions and customary practices, as is now the case withsecurities held for the accounts of customers in bearer form or registered in “street name,” and will be theresponsibility of those participants.

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Distributions on book-entry notes held beneficially through Clearstream, Luxembourg will be credited tocash accounts of Clearstream, Luxembourg participants in accordance with its rules and procedures, to the extentreceived by its U.S. depository.

Distributions on book-entry notes held beneficially through Euroclear will be credited to the cash accountsof Euroclear participants in accordance with the Terms and Conditions, to the extent received by its U.S.depository.

In the event Definitive Notes are issued, distributions of principal of and interest on Definitive Notes will bemade directly to the holders of the Definitive Notes in whose names the Definitive Notes were registered at theclose of business on the related record date.

Global Clearance and Settlement Procedures

Initial settlement for the notes will be made in immediately available funds. Secondary market tradingbetween DTC participants will occur in the ordinary way in accordance with DTC’s rules and will be settled inimmediately available funds using DTC’s Same-Day Funds Settlement System. Secondary market tradingbetween Clearstream, Luxembourg participants and/or Euroclear participants will occur in the ordinary way inaccordance with the applicable rules and operating procedures of Clearstream, Luxembourg and Euroclear andwill be settled using the procedures applicable to conventional eurobonds in immediately available funds.

Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, anddirectly or indirectly through Clearstream, Luxembourg or Euroclear participants, on the other, will be effected inDTC in accordance with DTC’s rules on behalf of the relevant European international clearing system by theU.S. depositories. However, cross-market transactions of this type will require delivery of instructions to therelevant European international clearing system by the counterparty in that system in accordance with its rulesand procedures and within its established deadlines, European time. The relevant European international clearingsystem will, if the transaction meets its settlement requirements, deliver instructions to its U.S. depository to takeaction to effect final settlement on its behalf by delivering or receiving notes in DTC, and making or receivingpayment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream,Luxembourg participants and Euroclear participants may not deliver instructions directly to DTC.

Because of time-zone differences, credits to notes received in Clearstream, Luxembourg or Euroclear as aresult of a transaction with a DTC participant will be made during subsequent securities settlement processingand will be credited the business day following a DTC settlement date. The credits to or any transactions in thenotes settled during processing will be reported to the relevant Euroclear or Clearstream, Luxembourgparticipants on that business day. Cash received in Clearstream, Luxembourg or Euroclear as a result of sales ofnotes by or through a Clearstream, Luxembourg participant or a Euroclear participant to a DTC participant willbe received with value on the DTC settlement date, but will be available in the relevant Clearstream,Luxembourg or Euroclear cash account only as of the business day following settlement in DTC.

Although DTC, Clearstream, Luxembourg and Euroclear have agreed to these procedures in order tofacilitate transfers of notes among participants of DTC, Clearstream, Luxembourg and Euroclear, they are underno obligation to perform or continue to perform these procedures and these procedures may be discontinued atany time.

Definitive Notes

Beneficial owners of book-entry notes may exchange those notes for physical form or Definitive Notesregistered in their name only if:

• DTC is unwilling or unable to continue as depository for the global notes or ceases to be a registered“clearing agency” and COMET is unable to find a qualified replacement for DTC;

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• COMET, in its sole discretion, elects to terminate its participation in the book-entry system through DTC;or

• any event of default has occurred for those book-entry notes and beneficial owners evidencing not lessthan 50% of the unpaid outstanding dollar principal amount of the notes of the related series, class ortranche advise the indenture trustee and DTC that the continuation of a book-entry system is no longer inthe best interests of those beneficial owners.

If any of these three events occurs, DTC is required to notify the beneficial owners through the chain ofintermediaries that the Definitive Notes are available. The appropriate global note will then be exchangeable inwhole for Definitive Notes in registered form of like tenor and of an equal aggregate stated principal amount, inspecified denominations. Definitive Notes will be registered in the name or names of the person or personsspecified by DTC in a written instruction to the registrar of the notes. DTC may base its written instruction upondirections it receives from its participants. Thereafter, the holders of the Definitive Notes will be recognized asthe “holders” of the notes under the indenture (and any supplement thereto).

Deposit and Application of Funds for Card Series Notes

The indenture and the asset pool supplement specify how Finance Charge Amounts and Principal Amountsreceived by COMET will be allocated among the outstanding series of notes secured by the assets in COMETand the Transferor Interest. The Card series indenture supplement specifies how Card series Finance ChargeAmounts and Card series Principal Amounts will be deposited into the COMET trust accounts established for theCard series notes to provide for the payment of interest on and principal of Card series notes as payments becomedue. In addition, the Card series indenture supplement specifies how Default Amounts allocated to the COMTcollateral certificate and any other collateral certificates in COMET and payments of the servicing fees on thereceivables will be allocated to the Card series notes. Unless otherwise noted, all references to “notes” in this“Deposit and Application of Funds for Card Series Notes” section are to the Card series notes.

For a detailed description of the percentage used by the indenture trustee in allocating Finance ChargeAmounts and Default Amounts to the Card series notes, see the definition of “Floating Allocation Percentage” inthe “Glossary of Defined Terms.” For a detailed description of the percentage used in allocating PrincipalAmounts to the Card series notes, see the definition of “Principal Allocation Percentage” in the “Glossary ofDefined Terms.”

Card Series Finance Charge Amounts

Card series Finance Charge Amounts will consist of the following amounts:

• The Card series’s share of Finance Charge Amounts. See “Sources of Funds to Pay the Notes—Depositand Application of Funds in COMET.”

• Withdrawals from the accumulation reserve subaccount.

If the number of months targeted to accumulate budgeted deposits of Card series Principal Amounts forthe payment of principal on a tranche of notes is greater than one month, then COMET will begin to fundan accumulation reserve subaccount for such tranche. See “—Targeted Deposits of Card Series PrincipalAmounts to the Principal Funding Account” and “—Targeted Deposits to the Accumulation ReserveAccount” below. The amount targeted to be deposited in the accumulation reserve account for eachmonth, beginning with the month prior to the first Distribution Date on which Card series PrincipalAmounts are to be accumulated for such tranche, will be an amount equal to 0.5% of the outstandingdollar principal amount of such tranche of notes.

On each Distribution Date, COMET will calculate the targeted amount of principal funding subaccountearnings for each tranche of notes, which will be equal to the amount that the funds (other than prefunded

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amounts) on deposit in each principal funding subaccount would earn at the interest rate payable byCOMET—taking into account payments due under any applicable derivative agreements—on the relatedtranche of notes. As a general rule, if the amount actually earned on such funds on deposit is less than thetargeted amount of earnings, then the amount of such shortfall will be withdrawn from the applicableaccumulation reserve subaccount and treated as Card series Finance Charge Amounts for such month.

• Additional finance charge collections allocable to the Card series.

COMET will notify the master trust servicer from time to time of the aggregate prefunded amount ondeposit in the principal funding account. Whenever there are any prefunded amounts on deposit in anyprincipal funding subaccount, the master trust will designate an amount of the Master Trust TransferorInterest equal to such prefunded amounts. On each Distribution Date, COMET will calculate the targetedamount of principal funding subaccount prefunded amount earnings for each tranche of notes, which willbe equal to the amount that the prefunded amounts on deposit in each principal funding subaccount wouldearn at the interest rate payable by COMET—taking into account payments due under any applicablederivative agreements—on the related tranche of notes. As a general rule, if the amount actually earnedon such funds on deposit is less than the targeted amount of earnings, collections of finance chargereceivables allocable to such designated portion of the Master Trust Transferor Interest up to the amountof the shortfall will be treated as Card series Finance Charge Amounts. See “The Master Trust—Application of Collections.”

• Investment earnings on amounts on deposit in the principal funding account, interest funding account andaccumulation reserve account for the Card series notes.

• Unless otherwise specified in the Card series indenture supplement or the related terms document,payments received under derivative agreements for interest, supplemental credit enhancement agreementsor supplemental liquidity agreements on notes of the Card series payable in U.S. dollars.

• Any shared excess Finance Charge Amounts allocable to the Card series notes. See “—Shared ExcessFinance Charge Amounts.”

• Any other amounts specified in the Card series indenture supplement or any related terms document.

After a sale of assets as described in “—Sale of Assets” below, the related class or tranche of notes will notbe entitled to any Card series Finance Charge Amounts. See “The Master Trust—Application of Collections” fora discussion of the allocation of collections generally.

Application of Card Series Finance Charge Amounts

On each Distribution Date, the indenture trustee will apply (upon instruction from COMET) Card seriesFinance Charge Amounts as follows:

• first, to make the targeted deposits to the interest funding account to fund the payment of interest on theClass A notes and certain payments due under related derivative agreements;

• second, to make the targeted deposits to the interest funding account to fund the payment of interest onthe Class B notes and certain payments due under related derivative agreements;

• third, to make the targeted deposits to the interest funding account to fund the payment of interest on theClass C notes and certain payments due under related derivative agreements;

• fourth, to pay the portion of the master trust servicing fee allocable to the Card series, plus any previouslydue and unpaid servicing fee allocable to the Card series;

• fifth, to make the targeted deposits to the interest funding account to fund the payment of interest on theClass D notes and certain payments due under related derivative agreements;

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• sixth, to be treated as Card series Principal Amounts in an amount equal to the Card series DefaultedAmounts, if any, for the preceding month;

• seventh, to be treated as Card series Principal Amounts in an amount equal to the Nominal LiquidationAmount Deficits, if any, of all Card series notes;

• eighth, to make the targeted deposits to the accumulation reserve account, if any;

• ninth, to make the targeted deposits to the Class C reserve account, if any;

• tenth, to make the targeted deposits to the Class D reserve account, if any;

• eleventh, to make any other payment or deposit required by any class or tranche of Card series notes;

• twelfth, to be treated as shared excess Finance Charge Amounts; and

• thirteenth, to Capital One Funding, as transferor, or any other transferor of a collateral certificate intoCOMET or their designees.

Targeted Deposits of Card Series Finance Charge Amounts to the Interest Funding Account

The aggregate amount targeted to be deposited monthly to the interest funding account will be equal to thesum of the targeted deposits listed below. The deposit targeted for any month will also include any shortfall inthe targeted deposit from any prior month which has not been previously deposited.

• Interest Payments. The deposit targeted for any tranche of outstanding interest-bearing notes on eachDistribution Date will be equal to the amount of interest accrued on the outstanding dollar principalamount of that tranche during the period from and including the first Monthly Interest Accrual Date in theprior month to but excluding the first Monthly Interest Accrual Date for the current month.

• Amounts Owed to Derivative Counterparties. If a tranche of notes has a Performing or non-Performingderivative agreement for interest that provides for payments to the applicable derivative counterparty, thedeposit targeted for that tranche of notes on each Distribution Date will include any payment to thederivative counterparty which is specified in the Card series indenture supplement or the related termsdocument.

• Discount Notes. The deposit targeted for a tranche of discount notes on each Distribution Date is theamount of accretion of principal of that tranche of notes from and including the prior Monthly PrincipalAccrual Date—or in the case of the first Monthly Principal Accrual Date, from and including the date ofissuance of that tranche—to but excluding the first Monthly Principal Accrual Date for the next month.

• Specified Deposits. If any tranche of notes provides for deposits in addition to or different from thedeposits described above to be made to the interest funding subaccount for that tranche, the depositstargeted for that tranche each month will include the specified amounts.

• Additional Interest. The deposit targeted for any tranche of notes (other than discount notes) that haspreviously due and unpaid interest for any month will include the interest accrued on that overdue interestduring the period from and including the first Monthly Interest Accrual Date in the prior month to butexcluding the first Monthly Interest Accrual Date for the current month at the applicable rate of interest.

Each deposit to the interest funding account for each month will be made on the Distribution Date in suchmonth. A tranche of notes may be entitled to more than one of the preceding deposits, plus deposits from othersources, described under “—Payments Received from Derivative Counterparties for Interest of Foreign CurrencyNotes.”

A class or tranche of notes for which assets have been sold as described in “—Sale of Assets” below will notbe entitled to receive any of the preceding deposits to be made from Card series Finance Charge Amounts afterthe sale has occurred.

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Allocation to Interest Funding Subaccounts

The aggregate amount to be deposited monthly in the interest funding account will be allocated, and aportion deposited in the interest funding subaccount established for each tranche of notes, as follows:

‰ Card Series Finance Charge Amounts are at least equal to targeted amounts. If the amount of fundsavailable for a month is at least equal to the aggregate amount of the deposits and payments for therelated class of notes, then the full targeted amount of such deposit and payment will be made to theapplicable interest funding subaccount.

‰ Card Series Finance Charge Amounts are less than targeted amounts. If Card series Finance ChargeAmounts available for a month for the Class A notes are less than the sum of the deposits targeted foreach tranche of Class A notes as described above, then the amount available will be allocated to eachtranche of Class A notes in such class pro rata based on the ratio of:

—the aggregate amount of the deposits targeted for that tranche of Class A notes, to

—the aggregate amount of the deposits targeted for all tranches of Class A Card series notes.

The Card series Finance Charge Amount remaining after any preceding applications, as described aboveunder “—Application of Card Series Finance Charge Amounts” will be allocated to the Class B notes, theClass C notes and the Class D notes in a similar manner.

Payments Received from Derivative Counterparties for Interest of Foreign Currency Notes

Payments received under derivative agreements for interest of foreign currency notes in the Card series willbe applied as specified in the Card series indenture supplement or the related terms document.

Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs

If on any Distribution Date, Card series Finance Charge Amounts available after the first five applicationsdescribed in “—Application of Card Series Finance Charge Amounts” above are not enough to cover the Cardseries Defaulted Amounts for the preceding month, the amount of such shortfall (referred to as a “charge-off”)will be allocated (and reallocated) on that date to each tranche of notes as described below. For each tranche ofnotes, the Nominal Liquidation Amount of that tranche will be reduced by an amount equal to the amounts thatare allocated or reallocated to that tranche less the amounts that are reallocated from that tranche to othertranches. Any amounts that are allocated (or reallocated) to a tranche of notes and not reallocated to othertranches will reduce the Nominal Liquidation Amount of that tranche of notes.

Initial Allocation. Initially, the amount of each charge-off will be allocated to each tranche of outstandingnotes in the Card series pro rata based on the ratio of the Nominal Liquidation Amount of that tranche of notes tothe Nominal Liquidation Amount of all the Card series notes, each at the end of the prior month. If this allocation(or any portion of it) would reduce the Nominal Liquidation Amount of a tranche of notes below zero, theamount that would cause the Nominal Liquidation Amount to be reduced below zero will be allocated instead toall other tranches of outstanding notes in the Card series in the same manner. The Nominal Liquidation Amountof any tranche of notes will not be reduced below zero.

Reallocation from Class A Notes. The amount initially allocated to the Class A notes as described in“—Initial Allocation” above will be reallocated from each tranche of Class A notes to the Class B notes, but onlyup to the following amount:

(i) the Class A Available Subordinated Amount of Class B notes for that tranche of Class A notes at theend of the prior month, minus

(ii) the amount initially allocated to the Class B notes as described in “—Initial Allocation” abovetimes the amount described in clause (i) above divided by the Nominal Liquidation Amount of all the ClassB Card series notes at the end of the prior month.

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Then, any amounts which a tranche of Class A notes is not permitted to reallocate to the Class B notes asdescribed above will be reallocated to the Class C notes, but only up to the following amount:

(i) the Class A Available Subordinated Amount of Class C notes for that tranche of Class A notes at theend of the prior month, minus

(ii) the amount initially allocated to the Class C notes as described in “—Initial Allocation” abovetimes the amount described in clause (i) above divided by the Nominal Liquidation Amount of all the ClassC Card series notes at the end of the prior month.

Then, any amounts which a tranche of Class A notes is not permitted to reallocate to the Class B notes or theClass C notes as described above will be reallocated to the Class D notes, but only up to the following amount:

(i) the Class A Available Subordinated Amount of Class D notes for that tranche of Class A notes at theend of the prior month, minus

(ii) the amount initially allocated to the Class D notes as described in “—Initial Allocation” abovetimes the amount described in clause (i) above divided by the Nominal Liquidation Amount of all the ClassD Card series notes at the end of the prior month.

Reallocation from Class B Notes. The amounts initially allocated to any tranche of Class B notes asdescribed in “—Initial Allocation” above and the amounts reallocated from the Class A notes to any tranche ofClass B notes as described in “—Reallocation from Class A Notes” above will be reallocated from that tranche ofClass B notes to the Class C notes, but only up to the following amount:

(i) the Class B Available Subordinated Amount of Class C notes for that tranche of Class B notes at theend of the prior month, minus

(ii) (x) the amount initially allocated to the Class C notes as described in “—Initial Allocation” abovetimes the amount described in clause (i) above divided by the Nominal Liquidation Amount of all the ClassC Card series notes at the end of the prior month, plus

(y) the amount reallocated from Class A notes with a Class A Required Subordinated Amount ofClass B notes greater than zero to the Class C notes as described in “—Reallocation from Class ANotes” above times the amount described in clause (i) above divided by the Class B AvailableSubordinated Amount of Class C notes for all Class B Card series notes at the end of the prior month.

Then, any amounts which a tranche of Class B notes is not permitted to reallocate to the Class C notes asdescribed above will be reallocated from that tranche of Class B notes to the Class D notes, but only up to thefollowing amount:

(i) the Class B Available Subordinated Amount of Class D notes for that tranche of Class B notes at theend of the prior month, minus

(ii) (x) the amount initially allocated to the Class D notes as described in “—Initial Allocation” abovetimes the amount described in clause (i) above divided by the Nominal Liquidation Amount of all the ClassD Card series notes at the end of the prior month, plus

(y) the amount reallocated from Class A notes with a Class A Required Subordinated Amount ofClass B notes greater than zero to the Class D notes as described above times the amount described inclause (i) above divided by the Class B Available Subordinated Amount of Class D notes for all ClassB Card series notes at the end of the prior month.

Reallocation from Class C Notes. Finally, the amounts initially allocated to any tranche of Class C notes asdescribed in “—Initial Allocation” above and the amounts reallocated from the Class A notes to any tranche ofClass C notes as described in “—Reallocation from Class A Notes” above or reallocated from the Class B notes

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to any tranche of Class C notes as described in “—Reallocation from Class B Notes” above will be reallocatedfrom that tranche of Class C notes to the Class D notes, but only up to the following amount:

(i) the Class C Available Subordinated Amount of Class D notes for that tranche of Class C notes at theend of the prior month, minus

(ii) (x) the amount initially allocated to the Class D notes as described in “—Initial Allocation” abovetimes the amount described in clause (i) above divided by the Nominal Liquidation Amount of all the ClassD Card series notes at the end of the prior month, plus

(y) the amount reallocated from Class A notes with a Class A Required Subordinated Amount ofClass B notes greater than zero or from any Class B notes to the Class D notes as described above timesthe amount described in clause (i) above divided by the Class C Available Subordinated Amount ofClass D notes for all Class C Card series notes at the end of the prior month.

Reallocations Generally. For each reallocation described above, the amount reallocated to any class of noteswill be reallocated to each tranche of notes within that class pro rata based on the ratio of the NominalLiquidation Amount of that tranche of notes after any reductions to the Nominal Liquidation Amount as a resultof previous allocations or reallocations on that day to the Nominal Liquidation Amount of all the notes in suchclass at the end of the prior month. If this reallocation (or any portion of it) would reduce the NominalLiquidation Amount of a tranche of notes below zero, the amount that would cause the Nominal LiquidationAmount to be reduced below zero will be allocated instead to the other tranches of outstanding Card series notesin the related class of notes in the same manner. The Nominal Liquidation Amount of any tranche of notes willnot be reduced below zero.

Allocations of Reimbursements of Nominal Liquidation Amount Deficits

If there are Card series Finance Charge Amounts available to reimburse any Nominal Liquidation AmountDeficits on any Distribution Date as described in the seventh clause of “—Application of Card Series FinanceCharge Amounts” above, such funds will be allocated to each tranche of notes as follows:

• first, to each tranche of Class A notes,

• second, to each tranche of Class B notes,

• third, to each tranche of Class C notes, and

• fourth, to each tranche of Class D notes.

In each case, Card series Finance Charge Amounts allocated to a class of notes will be allocated to eachtranche of notes within such class pro rata based on the ratio of:

• the Nominal Liquidation Amount Deficit of such tranche of notes, to

• the aggregate Nominal Liquidation Amount Deficits of all tranches of such class.

In no event will the Nominal Liquidation Amount of a tranche of notes be increased above the AdjustedOutstanding Dollar Principal Amount of such tranche.

Application of Card Series Principal Amounts

On each Distribution Date, the indenture trustee will apply (upon instruction from COMET) Card seriesPrincipal Amounts in the following order and priority:

• Class A Interest Funding Account Shortfalls. First, for each month, if Card series Finance ChargeAmounts are insufficient to make the full targeted deposit into the interest funding subaccount for anytranche of Class A notes, then Card series Principal Amounts will be applied to cover the shortfall,

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provided that the total amount of Card series Principal Amounts applied for this purpose will not exceedthe sum of the Class B Principal Allocation, the Class C Principal Allocation and the Class D PrincipalAllocation for such month, and such total amount will be allocated to the interest funding subaccount ofeach such tranche of Class A notes pro rata based on, in the case of each such tranche of Class A notes,the lesser of:

—the amount of the deficiency in the targeted amount to be deposited into the interest fundingsubaccount of such tranche of Class A notes, and

—an amount equal to the Class A Available Subordinated Amount of Subordinated notes for such trancheof Class A notes, determined after giving effect to the applications described in “—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs” above.

• Class B Interest Funding Account Shortfalls. Second, for each month, if Card series Finance ChargeAmounts are insufficient to make the full targeted deposit into the interest funding subaccount for anytranche of Class B notes, then Card series Principal Amounts will be applied to cover the shortfall,provided that the total amount of Card series Principal Amounts applied for this purpose will not exceedthe sum of the Class B Principal Allocation, the Class C Principal Allocation and the Class D PrincipalAllocation for such month minus the greater of (i) the Class B Principal Allocation for such month and(ii) the aggregate amount of Card series Principal Amounts reallocated as described in the precedingclause, and such total amount will be allocated to the interest funding subaccount of each such tranche ofClass B notes pro rata based on, in the case of each such tranche of Class B notes, the lesser of:

—the amount of the deficiency of the targeted amount to be deposited into the interest fundingsubaccount of such tranche of Class B notes, and

—an amount equal to the Class B Available Subordinated Amount of Subordinated notes for such trancheof Class B notes, determined after giving effect to the applications described in “—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs” above and in the first clause above.

• Class C Interest Funding Account Shortfalls. Third, for each month, if Card series Finance ChargeAmounts are insufficient to make the full targeted deposit into the interest funding subaccount for anytranche of Class C notes, then Card series Principal Amounts will be applied to cover the shortfall,provided that the total amount of Card series Principal Amounts applied for this purpose will not exceedthe Class B Principal Allocation, the Class C Principal Allocation and the Class D Principal Allocationfor such month minus the greater of (i) the sum of the Class B Principal Allocation and the Class CPrincipal Allocation for such month and (ii) the aggregate amount of Card series Principal Amountsreallocated as described in the preceding clauses, and such total amount will be allocated to the interestfunding subaccount of each such tranche of Class C notes pro rata based on, in the case of each suchtranche of Class C notes, the lesser of:

—the amount of the deficiency of the targeted amount to be deposited into the interest fundingsubaccount of such tranche of Class C notes, and

—an amount equal to the Class C Available Subordinated Amount of Class D notes for such tranche ofClass C notes, determined after giving effect to the applications described in “—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs” above and in the preceding clauses.

• Class A Servicing Fee Shortfalls. Fourth, for each month, if Card series Finance Charge Amounts areinsufficient to pay the portion of the servicing fees allocable to the Card series as described in“—Application of Card Series Finance Charge Amounts” above, then Card series Principal Amounts willbe applied to cover the shortfall, provided that the total amount of Card series Principal Amounts appliedfor this purpose will not exceed the sum of the Class B Principal Allocation, the Class C PrincipalAllocation and the Class D Principal Allocation for such month minus the aggregate amount of Cardseries Principal Amounts reallocated as described in the preceding clauses, and such total amount will be

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paid to the applicable servicers in an amount equal to, and allocated to each such tranche of Class A notespro rata based on, in the case of each tranche of Class A notes, the lesser of:

—the amount of the servicing fee shortfall allocated to such tranche of Class A notes (based on the ratioof the Nominal Liquidation Amount of such tranche of Class A notes to the Nominal LiquidationAmount of all Card series notes at the end of the prior month), and

—an amount equal to the Class A Available Subordinated Amount of Subordinated notes for such trancheof Class A notes, determined after giving effect to the applications described in “—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs” above and in the preceding clauses.

• Class B Servicing Fee Shortfalls. Fifth, for each month, if Card series Finance Charge Amounts areinsufficient to pay the portion of the servicing fees allocable to the Card series as described in“—Application of Card Series Finance Charge Amounts” above, then Card series Principal Amounts willbe applied to cover the shortfall, provided that the total amount of Card series Principal Amounts appliedfor this purpose will not exceed the sum of the Class B Principal Allocation, the Class C PrincipalAllocation and the Class D Principal Allocation for such month minus the greater of (i) the Class BPrincipal Allocation for such month and (ii) the aggregate amount of Card series Principal Amountsreallocated as described in the preceding clauses, and such total amount will be paid to the applicableservicers in an amount equal to, and allocated to each tranche of Class B notes pro rata based on, in thecase of each such tranche of Class B notes, the lesser of:

—the amount of the remaining servicing fee shortfall allocated to such tranche of Class B notes (based onthe ratio of the Nominal Liquidation Amount of such tranche of Class B notes to the NominalLiquidation Amount of all Card series notes at the end of the prior month), and

—an amount equal to the Class B Available Subordinated Amount of Class C notes for such tranche ofClass B notes, determined after giving effect to the applications described in “—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs” above and in the preceding clauses.

• Class C Servicing Fee Shortfalls. Sixth, for each month, if Card series Finance Charge Amounts areinsufficient to pay the portion of the servicing fees allocable to the Card series as described in“—Application of Card Series Finance Charge Amounts” above, then Card series Principal Amounts willbe applied to cover the shortfall, provided that the total amount of Card series Principal Amounts appliedfor this purpose will not exceed the sum of the Class B Principal Allocation, the Class C

Principal Allocation and the Class D Principal Allocation for such month minus the greater of (i) thesum of the Class B Principal Allocation and the Class C Principal Allocation for such month and(ii) the aggregate amount of Card series Principal Amounts reallocated as described in the precedingclauses, and such total amount will be paid to the applicable servicers in an amount equal to, andallocated to each tranche of Class C notes pro rata based on, in the case of each such tranche ofClass C notes, the lesser of:

—the amount of the servicing fee shortfall allocated to such tranche of Class C notes (based on theratio of the Nominal Liquidation Amount of such tranche of Class C notes to the NominalLiquidation Amount of all Card series notes at the end of the prior month), and

—an amount equal to the Class C Available Subordinated Amount of Subordinated notes for suchtranche of Class C notes, determined after giving effect to the applications described in“—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs” above and in thepreceding clauses.

• Principal Funding Account. Seventh, remaining Card series Principal Amounts will be applied, to theextent needed, to make the targeted deposits to the principal funding account as described in “—TargetedDeposits of Card Series Principal Amounts to the Principal Funding Account” below.

• Shared Excess Principal Amounts. Eighth, remaining Card series Principal Amounts will be treated, to theextent needed, as shared excess Principal Amounts for the benefit of Principal Sharing Group A.

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• Transferor. Ninth, remaining Card series Principal Amounts will be paid to the transferor or transferors.

A tranche of notes for which assets have been sold as described in “—Sale of Assets” below will not beentitled to receive any further allocations of Card series Finance Charge Amounts, Card series Principal Amountsor any other assets of COMET.

Allocations of Reductions of Nominal Liquidation Amounts from Reallocations

On any date when Card series Principal Amounts are deposited in the interest funding subaccount for anytranche of notes or paid to the applicable servicers as described in “—Application of Card Series PrincipalAmounts” above, the Nominal Liquidation Amount of subordinated notes will be reduced on that date asdescribed below. For each tranche of notes, the Nominal Liquidation Amount will be reduced by an amountequal to the amounts that are allocated or reallocated to that tranche of notes, less the amounts that are reallocatedfrom that tranche of notes to other tranches.

Class A Interest Funding Account Shortfalls. For each month, if Card series Principal Amounts are appliedto cover shortfalls in deposits to interest funding subaccounts for Class A Card series notes, the amount appliedwill be allocated as follows:

• first, to the Class B notes, in an amount up to the Class A Available Subordinated Amount of Class Bnotes (after giving effect to the applications described in “—Allocations of Reductions of NominalLiquidation Amounts from Charge-Offs” above),

• second, any remaining amounts to the Class C notes, in an amount up to the Class A AvailableSubordinated Amount of Class C notes (after giving effect to the applications described in “—Allocationsof Reductions of Nominal Liquidation Amounts from Charge-Offs” above), and

• third, any remaining amounts to the Class D notes, in an amount up to the Class A AvailableSubordinated Amount of Class D notes (after giving effect to the applications described in “—Allocationsof Reductions of Nominal Liquidation Amounts from Charge-Offs” above).

Then, any amounts allocated to the Class B notes as described in the preceding sentence will be allocated asfollows:

• first, to the Class C notes, in an amount up to the Class B Available Subordinated Amount of Class Cnotes (after giving effect to the preceding applications), and

• second, any remaining amounts to the Class D notes, in an amount up to the Class B AvailableSubordinated Amount of Class D notes (after giving effect to the preceding applications).

Finally, any amounts allocated or reallocated to the Class C notes as described in the preceding two sentenceswill be reallocated to the Class D notes, in an amount up to the Class C Available Subordinated Amount of ClassD notes (after giving effect to the preceding applications).

Class B Interest Funding Account Shortfalls. For each month, if Card series Principal Amounts are appliedto cover shortfalls in deposits to interest funding subaccounts for Class B Card series notes, the amount appliedwill be allocated as follows:

• first, to the Class C notes, in an amount up to the Class B Available Subordinated Amount of Class Cnotes (after giving effect to the preceding applications), and

• second, any remaining amounts to the Class D notes, in an amount up to the Class B AvailableSubordinated Amount of Class D notes (after giving effect to the preceding applications).

Then, any amounts allocated to the Class C notes as described in the preceding sentence will be reallocated to theClass D notes, in an amount up to the Class C Available Subordinated Amount of Class D notes (after givingeffect to the preceding applications).

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Class C Interest Funding Account Shortfalls. For each month, if Card series Principal Amounts are appliedto cover shortfalls in deposits to interest funding subaccounts for Class C Card series notes, the amount appliedwill be allocated to the Class D notes, in an amount up to the Class C Available Subordinated Amount of Class Dnotes (after giving effect to the preceding applications).

Class A Servicing Fee Shortfalls. For each month, if Card series Principal Amounts are applied to covershortfalls in servicing fees allocated to the Class A Card series notes, the amount applied will be allocated asfollows:

• first, to the Class B notes, in an amount up to the Class A Available Subordinated Amount of Class Bnotes (after giving effect to the preceding applications),

• second, any remaining amounts to the Class C notes, in an amount up to the Class A AvailableSubordinated Amount of Class C notes (after giving effect to the preceding applications), and

• third, any remaining amounts to the Class D notes, in an amount up to the Class A AvailableSubordinated Amount of Class D notes (after giving effect to the preceding applications).

Then, any amounts allocated to the Class B notes as described in the preceding sentence will be allocated asfollows:

• first, to the Class C notes, in an amount up to the Class B Available Subordinated Amount of Class Cnotes (after giving effect to the preceding applications), and

• second, any remaining amounts to the Class D notes, in an amount up to the Class B AvailableSubordinated Amount of Class D notes (after giving effect to the preceding applications).

Finally, any amounts allocated or reallocated to the Class C notes as described in the preceding two sentenceswill be reallocated to the Class D notes, in an amount up to the Class C Available Subordinated Amount of ClassD notes (after giving effect to the preceding applications).

Class B Servicing Fee Shortfalls. For each month, if Card series Principal Amounts are applied to covershortfalls in servicing fees allocated to the Class B Card series notes, the amount applied will be allocated asfollows:

• first, to the Class C notes, in an amount up to the Class B Available Subordinated Amount of Class Cnotes (after giving effect to the preceding applications), and

• second, any remaining amounts to the Class D notes, in an amount up to the Class B AvailableSubordinated Amount of Class D notes (after giving effect to the preceding applications).

Then, any amounts allocated to the Class C notes as described in the preceding sentence will be reallocated to theClass D notes, in an amount up to the Class C Available Subordinated Amount of Class D notes (after givingeffect to the preceding applications).

Class C Servicing Fee Shortfalls. For each month, if Card series Principal Amounts are applied to covershortfalls in servicing fees allocated to the Class C Card series notes, the amount applied will be allocated to theClass D notes, in an amount up to the Class C Available Subordinated Amount of Class D notes (after givingeffect to the preceding applications).

For each of the applications described above, the amount allocated to any tranche of notes will be equal tothe amount allocated to the related class of notes times (x) the Nominal Liquidation Amount of such tranche ofnotes divided by (y) the Nominal Liquidation Amount of all tranches of notes in the related class in the Cardseries after giving effect to the related preceding applications. If this allocation would reduce the NominalLiquidation Amount of a tranche of notes below zero, the amount that would cause the Nominal LiquidationAmount to be reduced below zero will be allocated instead to the other tranches of outstanding notes in therelated class in the same manner.

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Limit on Allocations of Card Series Principal Amounts and Card Series Finance Charge Amounts

Each tranche of notes will be allocated Card series Principal Amounts and Card series Finance ChargeAmounts solely to the extent of its Nominal Liquidation Amount. Therefore, if the Nominal Liquidation Amountof any tranche of notes has been reduced due to reallocations of Card series Principal Amounts to coverpayments of interest or the servicing fees or due to charge-offs from uncovered Card series Defaulted Amounts,such tranche of notes will not be allocated Card series Principal Amounts or Card series Finance ChargeAmounts to the extent of such reductions. However, any funds in the applicable principal funding subaccount,any funds in the applicable interest funding subaccount, any amounts payable from any applicable derivativeagreement, any funds in the applicable accumulation reserve subaccount, in the case of Class C notes, any fundsin the applicable Class C reserve subaccount, and in the case of Class D notes, any funds in the applicable ClassD reserve subaccount, will still be available to pay principal of and interest on that tranche of notes. If theNominal Liquidation Amount of a tranche of notes has been reduced due to reallocation of Card series PrincipalAmounts to pay interest on senior classes of notes or the servicing fees, or due to charge-offs from uncoveredCard series Defaulted Amounts, it is possible for that tranche’s Nominal Liquidation Amount to be increased bysubsequent allocations of Card series Finance Charge Amounts. However, there are no assurances that there willbe any Card series Finance Charge Amounts for such allocations that would increase such Nominal LiquidationAmounts.

Targeted Deposits of Card Series Principal Amounts to the Principal Funding Account

The amount targeted to be deposited into the principal funding subaccount for a tranche of notes in anymonth will be the highest of the following amounts. However, no amount that is greater than the NominalLiquidation Amount for that tranche will be deposited into the principal funding subaccount for any tranche ofnotes.

‰ Principal Payment Date. For the month before any principal payment date of a tranche of notes, thedeposit targeted for that tranche of notes is equal to the Nominal Liquidation Amount of that tranche ofnotes as of the close of business on the last day of that month, determined after giving effect to anycharge-offs from uncovered Card series Defaulted Amounts and any reallocations, payments ordeposits of Card series Principal Amounts occurring on the following Distribution Date.

‰ Budgeted Deposits. For each month beginning with the twelfth month before the Expected PrincipalPayment Date of a tranche of notes, the deposit targeted to be made into the principal fundingsubaccount for a tranche of notes will be an amount equal to one-twelfth of the expected outstandingdollar principal amount of that tranche of notes as of its Expected Principal Payment Date.

COMET may postpone the date of the targeted deposits under the previous paragraph. If COMETdetermines, using conservative historical information about payment rates of principal receivables heldin the master trust or in any other master trust or securitization special purpose entity that hastransferred a collateral certificate to COMET and after taking into account all of the other expectedpayments of principal of the applicable investor certificates and notes secured by such receivables to bemade in the next 12 months, that less than 12 months would be required to accumulate Card seriesPrincipal Amounts necessary to pay a tranche of notes on its Expected Principal Payment Date, thenthe start of the targeted deposits may be postponed each month by one month, with proportionatelylarger targeted deposits for each month of postponement. However, the time necessary to accumulateCard series Principal Amounts may not be less than one month.

‰ Prefunding of the Principal Funding Account of Senior Classes. If any payment of principal ordeposit into a principal funding subaccount for any tranche of Class D notes will occur at a time whenthe payment or deposit of all or part of that tranche of Class D notes would be prohibited because itwould cause a deficiency in the remaining available subordination for the Class A notes, Class B notesor Class C notes, the targeted deposit amount for the Class A notes, Class B notes and Class C noteswill be an amount equal to the portion of the Adjusted Outstanding Dollar Principal Amount of theClass A notes, Class B notes and Class C notes that would have to cease to be outstanding in order topermit the payment of or deposit for that tranche of Class D notes.

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If any payment of principal or deposit into a principal funding subaccount for any Class C notes wouldoccur at a time when the payment or deposit of all or part of that tranche of Class C notes would beprohibited because it would cause a deficiency in the remaining available subordination for the Class Anotes or Class B notes, the targeted deposit amount for the Class A notes and Class B notes will be anamount equal to the portion of the Adjusted Outstanding Dollar Principal Amount of the Class A notesand Class B notes that would have to cease to be outstanding in order to permit the payment of ordeposit for that tranche of Class C notes.

If any payment of principal or deposit into a principal funding subaccount for any Class B notes wouldoccur at a time when the payment or deposit of all or part of that tranche of Class B notes would beprohibited because it would cause a deficiency in the remaining available subordination for the Class Anotes, the targeted deposit amount for the Class A notes will be an amount equal to the portion of theAdjusted Outstanding Dollar Principal Amount of the Class A notes that would have to cease to beoutstanding in order to permit the payment of or deposit for that tranche of Class B notes.

Prefunding of the principal funding subaccount for the senior tranches of the Card series will continueuntil:

—enough senior notes are repaid so that the subordinated notes that are payable are no longernecessary to provide the required subordination for the outstanding senior notes;

—new subordinated notes are issued or other forms of credit enhancement exist so that thesubordinated notes that are payable are no longer necessary to provide the required subordination forthe outstanding senior notes; or

—the principal funding subaccounts for the senior notes are prefunded so that the subordinated notesthat are payable are no longer necessary to provide the required subordination for the outstandingsenior notes.

For purposes of calculating the prefunding requirements, the required subordinated amount of a trancheof a senior class of notes of the Card series will be calculated as described in “The Notes—RequiredSubordinated Amount and Usage” in this prospectus based on its Adjusted Outstanding DollarPrincipal Amount on such date. However, if any early redemption event has occurred with respect tothe subordinated notes, the required subordinated amount will be calculated based on the AdjustedOutstanding Dollar Principal Amount of such tranche as of the close of business on the dayimmediately preceding the occurrence of such early redemption event.

When the prefunded amounts are no longer necessary, they will be withdrawn from the principalfunding account and applied in accordance with the description in “—Withdrawals from PrincipalFunding Subaccounts—Withdrawals of Prefunded Amounts” below. The Nominal Liquidation Amountof the prefunded tranches will be increased by the amount removed from the principal funding account.If any tranche of senior notes becomes payable as a result of an early redemption event, event ofdefault or other optional or mandatory redemption, or upon reaching its Expected Principal PaymentDate, any prefunded amounts on deposit in its principal funding subaccount will be paid to noteholdersof that tranche and deposits to pay the notes will continue as necessary to pay that tranche.

‰ Event of Default, Early Redemption Event or Other Optional or Mandatory Redemption. If anytranche of notes has been accelerated after the occurrence of an event of default during that month, oran early redemption event or other optional or mandatory redemption has occurred for any tranche ofnotes, the deposit targeted for that tranche of notes for that month and each following month will equalthe Nominal Liquidation Amount of that tranche of notes as of the close of business on the last day ofthe preceding month, determined after giving effect to reallocations, payments or deposits occurring onthe Distribution Date for such month.

‰ Amounts Owed to Derivative Counterparties. If a tranche of U.S. dollar notes or foreign currencynotes that has a Performing or non-Performing derivative agreement for principal that provides for apayment to the applicable derivative counterparty, the deposit targeted for that tranche of notes on eachDistribution Date for any payment to the derivative counterparty will be specified in the related termsdocument.

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Allocation to Principal Funding Subaccounts

Card series Principal Amounts, after any reallocation to cover Card series Finance Charge Amountsshortfalls, if any, as described above, will be allocated each month, and a portion deposited in the principalfunding subaccount established for each tranche of notes, as follows:

‰ Card Series Principal Amounts Equal Targeted Amounts. If Card series Principal Amounts remainingafter giving effect to the first six clauses described in “—Application of Card Series PrincipalAmounts” above are equal to the sum of the deposits targeted in the principal funding subaccount foreach tranche of notes, then the applicable targeted amount will be deposited in the principal fundingsubaccount established for each tranche.

‰ Card Series Principal Amounts Are Less Than Targeted Amounts. If Card series Principal Amountsremaining after giving effect to the first six clauses described in “—Application of Card SeriesPrincipal Amounts” above are less than the sum of the deposits targeted in the principal fundingsubaccount for each tranche of notes, then Card series Principal Amounts will be deposited in theprincipal funding subaccounts for each tranche in the following priority:

—first, the amount available will be allocated to the Class A notes,

—second, the amount available after the application above will be allocated to the Class B notes,

—third, the amount available after the applications above will be allocated to the Class C notes, and

—fourth, the amount available after the applications above will be allocated to the Class D notes.

In each case, Card series Principal Amounts allocated to a class will be allocated to each tranche of noteswithin such class pro rata based on the ratio of:

—the amount targeted to be deposited into the principal funding subaccount for the applicable trancheof such class, to

—the aggregate amount targeted to be deposited into the principal funding subaccount for all tranchesof such class.

If the restrictions described in “—Limit on Deposits to the Principal Funding Subaccount of SubordinatedNotes; Limit on Repayments of all Tranches” below prevent the deposit of Card series Principal Amounts intothe principal funding subaccount of any subordinated note, the aggregate amount of Card series PrincipalAmounts available to make the targeted deposit for such subordinated tranche will be allocated first to eachtranche of Class A notes, then to each tranche of Class B notes, and then, if applicable, to the Class C notes, ineach case pro rata based on the dollar amount of subordinated notes required to be outstanding for the relatedsenior notes. See “—Targeted Deposits of Card Series Principal Amounts to the Principal Funding Account.”

Limit on Deposits to the Principal Funding Subaccount of Subordinated Notes; Limit on Repayments of allTranches

Limit on Deposits to the Principal Funding Subaccount of Subordinated Notes

No Card series Principal Amounts will be deposited in the principal funding subaccount of any tranche ofClass B Card series notes, unless, after giving effect to such deposit and any reductions and reallocations on suchdate, including any resulting changes to the Nominal Liquidation Amount, the Nominal Liquidation Amount ofall Class B notes in the Card series (other than the Class B notes for which such deposit is targeted) is at leastequal to the Class A Available Subordinated Amount of Class B notes for all Class A Card series notes.

No Card series Principal Amounts will be deposited in the principal funding subaccount of any tranche ofClass C Card series notes, unless, after giving effect to such deposit and any reductions and reallocations on suchdate, including any resulting changes to the Nominal Liquidation Amount, the following conditions are satisfied:

‰ the Nominal Liquidation Amount of all Class C Card series notes (other than the Class C notes forwhich such deposit is targeted) must be at least equal to the Class A Available Subordinated Amount ofClass C notes for all Class A Card series notes; and

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‰ the Nominal Liquidation Amount of all Class C Card series notes (other than the Class C notes forwhich such deposit is targeted) must be at least equal to the Class B Available Subordinated Amount ofClass C notes for all Class B Card series notes.

No Card series Principal Amounts will be deposited in the principal funding subaccount of any tranche ofClass D notes of the Card series, unless, after giving effect to such deposit and any reductions and reallocationson such date, including any resulting changes to the Nominal Liquidation Amount, the following conditions aresatisfied:

‰ the Nominal Liquidation Amount of all Class D Card series notes (other than the Class D notes forwhich such deposit is targeted) must be at least equal to the Class A Available Subordinated Amount ofClass D notes for all Class A Card series notes;

‰ the Nominal Liquidation Amount of all Class D Card series notes (other than the Class D notes forwhich such deposit is targeted) must be at least equal to the Class B Available Subordinated Amount ofClass D notes for all Class B Card series notes; and

‰ the Nominal Liquidation Amount of all Class D Card series notes (other than the Class D notes forwhich such deposit is targeted) must be at least equal to the Class C Available Subordinated Amount ofClass D notes for all Class C Card series notes.

Card series Principal Amounts will be deposited in the principal funding subaccount of a subordinated noteif and only to the extent that such deposit is not contrary to any of the preceding paragraphs and the prefundingtarget amount for each senior note is zero.

Limit on Repayments of all Tranches

No amounts on deposit in a principal funding subaccount for any tranche of Class A notes or Class B noteswill be applied to pay principal of that tranche or to make a payment under a derivative agreement with respect toprincipal of that tranche in excess of the highest outstanding dollar principal amount of that tranche (or, in thecase of foreign currency notes, such other amount that may be specified in the related terms document). In thecase of any tranche of Class C notes, no amounts on deposit in a principal funding subaccount or, if applicable, aClass C reserve subaccount for any such tranche will be applied to pay principal of that tranche or to make apayment under a derivative agreement with respect to principal of that tranche in excess of the highestoutstanding dollar principal amount of that tranche (or, in the case of foreign currency notes, such other amountthat may be specified in the related terms document). In the case of any tranche of Class D notes, no amounts ondeposit in a principal funding subaccount or, if applicable, a Class D reserve subaccount for any such tranche willbe applied to pay principal of that tranche or to make a payment under a derivative agreement with respect toprincipal of that tranche in excess of the highest outstanding dollar principal amount of that tranche (or, in thecase of foreign currency notes, such other amount that may be specified in the related terms document).

Payments Received from Derivative Counterparties for Principal

Unless otherwise specified in the related terms document, dollar payments for principal received underderivative agreements of U.S. dollar notes in the Card series will be treated as Card series Principal Amounts.Payments received under derivative agreements for principal of foreign currency notes in the Card series will beapplied as specified in the related terms document.

Payments Received from Supplemental Credit Enhancement Providers or Supplemental LiquidityProviders for Principal

Unless otherwise specified in the related terms document, payments for principal received fromsupplemental credit enhancement providers or supplemental liquidity providers for Card series notes will betreated as Card series Principal Amounts.

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Deposits of Withdrawals from the Class C Reserve Account to the Principal Funding Account

Withdrawals from any Class C reserve subaccount will be deposited into the applicable principal fundingsubaccount to the extent required pursuant to the Card series indenture supplement.

Withdrawals from Interest Funding Subaccounts

After giving effect to all deposits of funds to the interest funding account in a month, the followingwithdrawals from the applicable interest funding subaccount may be made, to the extent funds are available, inthe applicable interest funding subaccount. A tranche of notes may be entitled to more than one of the followingwithdrawals in a particular month:

‰ Withdrawals for U.S. Dollar Notes. On each applicable interest payment date for each tranche of U.S.dollar notes, an amount equal to interest due on the applicable tranche of notes on the applicableinterest payment date, including any overdue interest payments and additional interest on overdueinterest payments, will be withdrawn from that interest funding subaccount and paid to the applicablepaying agent.

‰ Withdrawals for Foreign Currency Notes with a Non-Performing Derivative Agreement forInterest. On each applicable interest payment date with respect to a tranche of foreign currency notesthat has a non-Performing derivative agreement for interest, the amount specified in the related termsdocument will be withdrawn from that interest funding subaccount and, if so specified in the applicableindenture supplement, converted to the applicable foreign currency at the applicable spot exchange rateand remitted to the applicable paying agent.

‰ Withdrawals for Discount Notes. On each applicable principal payment date, for each tranche ofdiscount notes, an amount equal to the amount of the accretion of principal of that tranche of notesfrom the prior principal payment date—or, in the case of the first principal payment date, the date ofissuance of that tranche—to but excluding the applicable principal payment date will be withdrawnfrom that interest funding subaccount and invested in the Invested Amount of COMET.

‰ Withdrawals for Payments to Derivative Counterparties. On each date on which a payment isrequired to be made to the derivative counterparty under the applicable derivative agreement, for anytranche of notes that has a Performing or non-Performing derivative agreement for interest, an amountequal to the amount of the payment to be made to the derivative counterparty under the applicablederivative agreement (including, if applicable, any overdue payment and any additional interest onoverdue payments) will be withdrawn from that interest funding subaccount and paid to the derivativecounterparty or as otherwise provided in the related terms document.

If the aggregate amount available for withdrawal from an interest funding subaccount is less than allwithdrawals required to be made from that subaccount in a month after giving effect to all deposits, then theamounts on deposit in that interest funding subaccount will be withdrawn and, if payable to more than oneperson, applied pro rata based on the amounts of the withdrawals required to be made. After payment in full ofany tranche of notes, any amount remaining on deposit in the applicable interest funding subaccount will be firstapplied to cover any interest funding subaccount shortfalls for other tranches of notes in the manner described in“—Allocation to Interest Funding Subaccounts” above, second applied to cover any principal fundingsubaccount shortfalls in the manner described in “—Allocation to Principal Funding Subaccounts” above, andthird paid to the transferor.

Withdrawals from Principal Funding Subaccounts

After giving effect to all deposits of funds to the principal funding account in a month, the followingwithdrawals from the applicable principal funding subaccount will be made to the extent funds are available in

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the applicable principal funding subaccount. A tranche of notes may be entitled to more than one of the followingwithdrawals in a particular month:

‰ Withdrawals for U.S. Dollar Notes with no Derivative Agreement for Principal. On each applicableprincipal payment date, for each tranche of U.S. dollar notes that has no derivative agreement forprincipal, an amount equal to the principal due on the applicable tranche of notes on the applicableprincipal payment date will be withdrawn from the applicable principal funding subaccount and paid tothe applicable paying agent.

‰ Withdrawals for U.S. Dollar or Foreign Currency Notes with a Performing Derivative Agreement forPrincipal. On each date on which a payment is required under the applicable derivative agreement forany tranche of U.S. dollar or foreign currency notes that has a Performing derivative agreement forprincipal, an amount equal to the amount of the payment to be made under the applicable derivativeagreement will be withdrawn from the applicable principal funding subaccount and paid to theapplicable derivative counterparty. COMET will direct the applicable derivative counterparty to remitits payments under the applicable derivative agreement to the applicable paying agent.

‰ Withdrawals for Foreign Currency Notes with a non-Performing Derivative Agreement forPrincipal. On each principal payment date for a tranche of foreign currency notes that has anon-Performing derivative agreement for principal, an amount equal to the amount specified in therelated terms document will be withdrawn from that principal funding subaccount and, if so specifiedin the related terms document, converted to the applicable foreign currency at the prevailing spotexchange rate and paid to the applicable paying agent.

‰ Withdrawals for U.S. Dollar Notes with a non-Performing Derivative Agreement for Principal. Oneach principal payment date for a tranche of U.S. dollar notes with a non-Performing derivativeagreement for principal, the amount specified in the related terms document will be withdrawn fromthe applicable principal funding subaccount and paid to the applicable paying agent.

‰ Withdrawals of Prefunded Amounts. If prefunding of the principal funding subaccounts for seniorclasses of notes is no longer necessary as a result of payment of senior notes or issuance of additionalsubordinated notes, as described under “—Targeted Deposits of Card Series Principal Amounts to thePrincipal Funding Account—Prefunding of the Principal Funding Account of Senior Classes” above,the prefunded amounts will be withdrawn from the principal funding account and first, allocated amongand deposited to the principal funding subaccounts of the Class A notes up to the amount then targetedto be on deposit in such principal funding subaccount; second, allocated among and deposited to theprincipal funding subaccounts of the Class B notes up to the amount then targeted to be on deposit insuch principal funding subaccount; third, allocated among and deposited to the principal fundingsubaccount of the Class C notes up to the amount then targeted to be on deposit in such principalfunding subaccount; fourth, allocated among and deposited to the principal funding subaccount of theClass D notes up to the amount then targeted to be on deposit in such principal funding subaccount;and fifth, any remaining amounts paid to the transferor.

‰ Withdrawals on the Legal Maturity Date. On the legal maturity date of any tranche of notes, amountson deposit in the principal funding subaccount of such tranche will be applied to pay principal of thattranche or to make a payment under a derivative agreement with respect to principal of that tranche.

Upon payment in full of any tranche of notes, any remaining amount on deposit in the applicable principalfunding subaccount will be first applied to cover any interest funding subaccount shortfalls for other tranches ofnotes, second applied to cover any principal funding subaccount shortfalls for other tranches of notes and thirdpaid to the transferor. If the aggregate amount available for withdrawal from a principal funding subaccount forany tranche of notes is less than all withdrawals required to be made from that principal funding subaccount forthat tranche in a month, then the amounts on deposit will be withdrawn and applied pro rata based on theamounts of the withdrawals required to be made.

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Sale of Assets

Assets directly or indirectly in COMET may be sold (i) if required under the pooling agreement followingthe bankruptcy or insolvency of Capital One Funding or any other transferor to COMET, (ii) following an eventof default and acceleration for a tranche of notes and (iii) on the legal maturity date of a tranche of notes. See“The Notes—Events of Default” and “The Master Trust—Pay Out Events.”

If a tranche of notes has an event of default and is accelerated before its legal maturity date, the master trustor other securitization special purpose entity may sell receivables underlying the COMT collateral certificate orany other collateral certificate in COMET, as applicable, in an amount up to the Nominal Liquidation Amount ofthe affected tranche, plus any accrued, past due or additional interest on the affected tranche, if the conditionsdescribed in “The Notes—Events of Default” and “—Events of Default Remedies” are satisfied. This sale willtake place at the option of the indenture trustee or at the direction of the holders of a majority of the aggregateoutstanding dollar principal amount of notes of that tranche. However, a sale will only be permitted if at least oneof the following conditions is met:

• the holders of 90% of the aggregate outstanding dollar principal amount of the accelerated tranche ofnotes consent;

• the net proceeds of such sale, plus amounts on deposit in the applicable subaccounts and payments to bereceived from any applicable derivative agreement, any supplemental credit enhancement provider or anysupplemental liquidity provider, would be sufficient to pay all amounts due on the accelerated tranche ofnotes; or

• if the indenture trustee determines that the funds to be allocated to the accelerated tranche of notes,including (i) Card series Finance Charge Amounts and Card series Principal Amounts allocable to theaccelerated tranche of notes, (ii) payments to be received under any applicable derivative agreement,supplemental credit enhancement agreement or supplemental liquidity agreement and (iii) amounts ondeposit in the applicable subaccounts may not be sufficient on an ongoing basis to make all payments onthe accelerated tranche of notes as such payments would have become due if such obligations had notbeen declared due and payable, and 66 2⁄3% of the noteholders of the accelerated tranche of notes consentto the sale.

Any sale of assets for a subordinated tranche of notes will be delayed for that tranche, but not beyond itslegal maturity date, if the subordination provisions prevent payment of the accelerated tranche. Such sale will bedelayed until a sufficient amount of senior classes of notes are prefunded, or a sufficient amount of senior noteshave been repaid, or a sufficient amount of subordinated tranches have been issued, to the extent that thesubordinated tranche of notes to be accelerated is no longer needed to provide the required subordination for thesenior classes. If a senior tranche of notes directs a sale of assets, then after the sale, that tranche will no longerbe entitled to subordination from subordinated classes of notes.

If principal of or interest on a tranche of notes has not been paid in full on its legal maturity date, aftergiving effect to any allocations, deposits and distributions to be made on such date, the sale of assets willautomatically take place on that date regardless of the subordination requirements of any senior classes of notes.Proceeds from such a sale will be immediately paid to the noteholders of the related tranche of notes.

The principal amount of assets designated for sale will not exceed (and may be less than) the NominalLiquidation Amount of, plus any accrued, past due and additional interest on, the tranches of notes that directedthe sale to be made. The Nominal Liquidation Amount of any tranche of notes that directed the sale to be madewill be automatically reduced to zero upon such sale even if the proceeds of that sale are not enough to pay allremaining amounts due on the notes. After such sale, Card series Principal Amounts or Card series FinanceCharge Amounts will no longer be allocated to that tranche. Noteholders of that tranche will receive the proceedsof the sale, but no more than the outstanding principal amount of their notes, plus any past due, accrued andadditional interest on such tranche of notes. Tranches of notes that have directed sales of assets are notoutstanding under the indenture or any supplement thereto.

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After giving effect to a sale of assets for a tranche of notes, the amount of proceeds on deposit in a principalfunding account or subaccount may be less than the outstanding dollar principal amount of that tranche. Thisdeficiency can arise because of a Nominal Liquidation Amount Deficit or if the sale price for the assets was lessthan the outstanding dollar principal amount of that tranche. These types of deficiencies will not be reimbursedunless, in the case of Class C notes only, there are sufficient amounts in the related Class C reserve subaccountand in the case of Class D notes only, there are sufficient amounts in the related Class D reserve account.

Any amount remaining on deposit in the interest funding subaccount for a tranche of notes that has receivedfinal payment as described in “—Final Payment of the Notes” and that has caused a sale of assets will be treatedas Card series Finance Charge Amounts and will be allocated as described in “—Application of Card SeriesFinance Charge Amounts.”

Targeted Deposits to the Class C Reserve Account

The Class C reserve subaccount will be funded on each month, as necessary, from Card series FinanceCharge Amounts as described under “—Application of Card Series Finance Charge Amounts.” The aggregatedeposit targeted to be made to the Class C reserve account in each month will be the sum of the Class C reservesubaccount deposits targeted to be made for each tranche of Class C notes, if any, as required under the Cardseries indenture supplement.

Withdrawals from the Class C Reserve Account

Withdrawals will be made from the Class C reserve account in the amount and manner required under theCard series indenture supplement.

Targeted Deposits to the Accumulation Reserve Account

If more than one budgeted principal deposit is targeted for a tranche, the accumulation reserve subaccountwill be funded for such tranche on the Distribution Date prior to the Distribution Date on which a budgeteddeposit is first targeted for such tranche as described in “—Targeted Deposits of Card Series Principal Amountsto the Principal Funding Account” above. The accumulation reserve subaccount for a tranche of notes will befunded from Card series Finance Charge Amounts as described in “—Application of Card Series Finance ChargeAmounts” above. The aggregate deposit targeted to be made to the accumulation reserve account in each monthwill be the sum of the accumulation reserve subaccount deposits targeted to be made for each tranche of notes.

If the aggregate amount of Card series Finance Charge Amounts available for deposit to the accumulationreserve account is less than the sum of the targeted deposits for each tranche of notes, then the amount availablewill be allocated to each tranche of notes up to the targeted deposit pro rata based on the ratio of the FloatingAllocation Amount for that tranche of notes to the Floating Allocation Amount for all tranches of notes in theCard series that have a targeted deposit to their accumulation reserve subaccounts for that month. After the initialallocation, any excess will be further allocated in a similar manner to those accumulation reserve subaccountswhich still have an uncovered targeted deposit.

Withdrawals from the Accumulation Reserve Account

Withdrawals will be made from the accumulation reserve subaccounts, but in no event more than theamount on deposit in the applicable accumulation reserve subaccount, in the following order:

• Interest. On or prior to each Distribution Date, COMET will calculate for each tranche of notes theamount of any shortfall of net investment earnings for amounts on deposit in the principal fundingsubaccount for that tranche (other than prefunded amounts) over the amount of interest that would haveaccrued on such deposit if that tranche had borne interest at the applicable note interest rate (or other ratespecified in the Card series indenture supplement) for the prior month. If there is any such shortfall for

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that Distribution Date, or any unpaid shortfall from any earlier Distribution Date, COMET will withdrawthe sum of those amounts from the applicable accumulation reserve subaccount, to the extent available,for treatment as Card series Finance Charge Amounts for such month.

• Excess Amounts. If on any Distribution Date, the aggregate amount on deposit in the accumulationreserve account exceeds the amount required to be on deposit, the amount of such excess will bewithdrawn from the accumulation reserve account and applied in the manner described in the ninththrough thirteenth clauses of “—Application of Card Series Finance Charge Amounts” above.

Targeted Deposits to the Class D Reserve Account

The aggregate deposit targeted to be made to the Class D reserve account on each Distribution Date is anamount equal to the sum of Class D reserve subaccount deposits, if any, targeted to be made for each specifiedtranche of Class D notes. The amount of any such deposit and the circumstances that require that a deposit bemade will be set forth in the related terms document. Unless another time is specified for making such deposits inthe related terms document, these deposits will be made on each Distribution Date.

Withdrawals from the Class D Reserve Account

Withdrawals will be made from the Class D reserve subaccounts in the amount and manner required underthe Card series indenture supplement.

Final Payment of the Notes

Noteholders are entitled to payment of principal in an amount equal to the outstanding dollar principalamount of their respective notes. However, Card series Principal Amounts will be allocated to pay principal onthe notes only up to their Nominal Liquidation Amount, which will be reduced for charge-offs due to uncoveredCard series Defaulted Amounts and reallocations of Card series Principal Amounts to pay interest on seniorclasses of notes or servicing fees. In addition, if a sale of assets occurs, as described in “—Sale of Assets” above,the amount of assets sold will not exceed (and may be less than) the Nominal Liquidation Amount of, plus anyaccrued, past due or additional interest on, the related tranche of notes. If the Nominal Liquidation Amount of atranche has been reduced, noteholders of such tranche will receive full payment of principal only to the extentproceeds from the sale of assets, amounts received from an applicable derivative agreement and amounts whichhave been previously deposited in an issuing entity trust account for such tranche of notes are sufficient to paythe full principal amount.

On the date of a sale of assets, the proceeds of such sale will be available to pay the outstanding dollarprincipal amount of, plus any accrued, past due and additional interest on, that tranche.

A tranche of notes will be considered to be paid in full, the holders of those notes will have no further rightor claim, and COMET will have no further obligation or liability for principal or interest, on the earliest to occurof:

• the date of the payment in full of the stated principal amount of and all accrued interest on that tranche ofnotes;

• the legal maturity date of that tranche of notes, after giving effect to all deposits, allocations,reallocations, sales of assets and payments to be made on that date; or

• the date on which a sale of assets has taken place for such tranche, as described in “—Sale of Assets”above.

Pro Rata Payments Within a Tranche

All notes of a tranche will receive payments of principal and interest pro rata based on the stated principalamount of each note in that tranche.

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Shared Excess Finance Charge Amounts

For any month, Card series Finance Charge Amounts remaining after making the application described inthe first eleven clauses of “—Application of Card Series Finance Charge Amounts” above will be available forallocation to other series of notes in Excess Finance Charge Sharing Group A. Such amounts, including excesses,if any, from other series of notes in Excess Finance Charge Sharing Group A and other series of investorcertificates issued by the master trust, called shared excess Finance Charge Amounts, will be allocated to covercertain shortfalls in Finance Charge Amounts for the series of notes in Excess Finance Charge Sharing Group A,if any, which have not been covered out of Finance Charge Amounts allocable to such series. If these shortfallsexceed shared excess Finance Charge Amounts for any month, shared excess Finance Charge Amounts will beallocated pro rata among the applicable series of notes in Excess Finance Charge Sharing Group A based on therelative amounts of those shortfalls. To the extent that shared excess Finance Charge Amounts exceed thoseshortfalls, the balance will be treated as shared excess Finance Charge Amounts to be applied as follows:

• first, by other series of notes not included in Excess Finance Charge Sharing Group A,

• second, by other series of investor certificates issued by the master trust or any other master trust orsecuritization special purpose entity that has transferred a collateral certificate to COMET, to the extentneeded,

• third, by other series of notes issued by COMET not included in COMET, and

• finally, if not needed by any other series of notes, paid to COMET.

For the Card series notes, shared excess Finance Charge Amounts, to the extent available and allocated to theCard series, will cover shortfalls in the first seven applications described in “—Application of Card SeriesFinance Charge Amounts” above.

However, the sharing of excess Finance Charge Amounts will continue only until such time, if any, asCOMET shall deliver to the indenture trustee a certificate to the effect that the continued sharing of excessFinance Charge Amounts would have adverse regulatory implications for the bank or an affiliate. Following thedelivery by COMET of any such certificate to the indenture trustee, there will not be any further sharing ofexcess Finance Charge Amounts. While any series of notes issued by COMET may be included in an excessfinance charge sharing group, there can be no assurance that:

—any other series will be included in such group,

—there will be any excess Finance Charge Amounts for such group for any month, or

—COMET will not at any time deliver the certificate discontinuing sharing described above.

While COMET does not believe that, based on the applicable rules and regulations as currently in effect, thesharing of excess finance charge amounts will have an adverse regulatory implication for the bank or an affiliate,there can be no assurance that this will continue to be true in the future.

Shared Excess Principal Amounts

For any month, Card series Principal Amounts that are not needed to make targeted deposits to the principalfunding account as described in “—Application of Card Series Principal Amounts” above will be available forallocation to other series of notes in Principal Sharing Group A. Such amounts, including excesses, if any, fromother series of notes in Principal Sharing Group A, called shared excess principal amounts, will be allocated tocover shortfalls in Principal Amounts for other series of notes in Principal Sharing Group A, if any, which havenot been covered out of Principal Amounts allocable to such series. If these shortfalls exceed shared excessprincipal amounts for any month, shared excess principal amounts will be allocated pro rata among theapplicable series of notes in Principal Sharing Group A based on the relative amounts of those shortfalls. To theextent that shared excess principal amounts exceed those shortfalls, the balance will be treated as shared excessprincipal amounts for application by other series of investor certificates issued by the master trust, to the extent

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needed, and, then, paid to the transferor. For the Card series notes, shared excess principal amounts, to the extentavailable and allocated to the Card series notes, will cover shortfalls in the first seven applications described in“—Application of Card Series Principal Amounts” above. Afterward, any remaining shared excess principalamounts will be shared with other series not included in Principal Sharing Group A.

The Indenture

The notes will be issued pursuant to the terms of the indenture, in the asset pool supplement and a relatedindenture supplement. The following discussion and the discussions under “The Notes” and certain sections inthe prospectus summary summarize the material terms of the notes, the indenture, in asset pool supplement andthe related indenture supplement. These summaries do not purport to be complete and are qualified in theirentirety by reference to the provisions of the notes, the indenture, in asset pool supplement and the relatedindenture supplement.

Indenture Trustee

General

The Bank of New York, a New York banking corporation, is the trustee under the indenture (and anysupplement thereto) for each series, class and tranche of notes issued by COMET. Its principal corporate trustoffice is located at 101 Barclay Street, Floor 8 West, Attention: Corporate Trust Administration—Asset BackedSecurities, New York, New York 10286.

The Bank of New York has and currently is serving as indenture trustee and trustee for numeroussecuritization transactions and programs involving pools of credit card receivables.

Duties and Responsibilities

Under the terms of the indenture, COMET has agreed to pay to the indenture trustee reasonablecompensation for performance of its duties under the indenture. The indenture trustee has agreed to perform onlythose duties specifically set forth in the indenture. Many of the duties of the indenture trustee are describedthroughout this prospectus and the related prospectus supplement. Under the terms of the indenture, the indenturetrustee’s limited responsibilities include the following:

• to deliver to noteholders of record certain notices, reports and other documents received by the indenturetrustee, as required under the indenture;

• to authenticate, deliver, cancel and otherwise administer the notes;

• to maintain custody of the COMT collateral certificate pursuant to the terms of the indenture;

• to establish and maintain necessary COMET trust accounts and to maintain accurate records of activity inthose accounts;

• to serve as the initial transfer agent, paying agent and registrar, and, if it resigns these duties, to appoint asuccessor transfer agent, paying agent and registrar;

• to invest funds in the COMET trust accounts at the direction of COMET;

• to represent the noteholders in interactions with clearing agencies and other similar organizations;

• to distribute and transfer funds at the direction of COMET, as applicable, in accordance with the terms ofthe indenture;

• to periodically report on and notify noteholders of certain matters relating to actions taken by theindenture trustee, property and funds that are possessed by the indenture trustee, and other similarmatters; and

• to perform certain other administrative functions identified in the indenture.

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In addition, the indenture trustee has the discretion to require COMET to cure a potential event of defaultand to institute and maintain suits to protect the interest of the noteholders in the COMT collateral certificate.The indenture trustee is not liable for any errors of judgment as long as the errors are made in good faith and theindenture trustee was not negligent. The indenture trustee is not responsible for any investment losses to theextent that they result from Eligible Investments.

If an event of default occurs, in addition to the responsibilities described above, the indenture trustee willexercise its rights and powers under the indenture to protect the interests of the noteholders using the samedegree of care and skill as a prudent man would exercise in the conduct of his own affairs. If an event of defaultoccurs and is continuing, the indenture trustee will be responsible for enforcing the agreements and the rights ofthe noteholders. See “The Notes—Events of Default Remedies.” The indenture trustee may, under certain limitedcircumstances, have the right or the obligation to do the following:

• demand immediate payment by COMET of all principal and accrued interest on the notes;

• enhance monitoring of the securitization;

• protect the interests of the noteholders in the COMT collateral certificate or the receivables in abankruptcy or insolvency proceeding;

• prepare and send timely notice to noteholders of the event of default;

• institute judicial proceedings for the collection of amounts due and unpaid;

• rescind and annul a declaration of acceleration of the notes at the direction of the noteholders followingan event of default; and

• cause the master trust to sell assets, or interests therein (see “Sources of Funds to Pay the Notes—Sale ofAssets”).

Following an event of default, the majority holders of any series, class or tranche of notes will have the right todirect the indenture trustee to exercise certain remedies available to the indenture trustee under the indenture. Insuch case, the indenture trustee may decline to follow the direction of the majority holders only if it determinesthat: (1) the action so directed is unlawful or conflicts with the indenture, (2) the action so directed would involveit in personal liability, or (3) the action so directed would be unjustly prejudicial to the noteholders not takingpart in such direction.

Resignation, Removal and Replacement

The indenture trustee may resign at any time by giving written notice to COMET. The indenture trustee maybe removed for any series, class or tranche of notes at any time by a majority of the noteholders of that series,class or tranche. COMET may also remove the indenture trustee if the indenture trustee is no longer eligible toact as trustee under the indenture (and any supplement thereto), the indenture trustee fails to comply with theTrust Indenture Act of 1939, as amended, or if the indenture trustee becomes insolvent. In all suchcircumstances, COMET must appoint a successor indenture trustee for the notes. Any resignation or removal ofthe indenture trustee and appointment of a successor indenture trustee will not become effective until thesuccessor indenture trustee accepts the appointment. If an instrument of acceptance by a successor indenturetrustee has not been delivered to the indenture trustee within 30 days of giving notice of resignation or removal,the indenture trustee may petition a court of competent jurisdiction to appoint a successor indenture trustee.

The successor indenture trustee must (1) be either a bank or a corporation organized and doing businessunder the laws of the United States of America or of any state, (2) be authorized under such laws to exercisecorporate trust powers, (3) have a combined capital and surplus of at least $50,000,000, subject to supervision orexamination by federal or state authority, and (4) have a rating of at least BBB- by Standard & Poor’s and Baa3by Moody’s. COMET may not, nor may any person directly or indirectly controlling, controlled by, or undercommon control with COMET, serve as indenture trustee.

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COMET or its affiliates may maintain accounts and other banking or trustee relationships with the indenturetrustee and its affiliates.

Issuing Entity Covenants

COMET will not, among other things:

• claim any credit on or make any deduction from the principal and interest payable on the notes, other thanamounts withheld in good faith from such payments under the Internal Revenue Code or other applicabletax law (including foreign withholding),

• voluntarily dissolve or liquidate, or

• permit (A) the validity or effectiveness of the indenture (or any supplement thereto) to be impaired, orpermit the lien created by the indenture (or any supplement thereto) to be amended, hypothecated,subordinated, terminated or discharged, or permit any person to be released from any covenants orobligations with respect to the notes under the indenture except as may be expressly permitted by theindenture, (B) any lien, charge, excise, claim, security interest, mortgage or other encumbrance (otherthan the lien in favor of the indenture trustee created by the indenture (or any supplement thereto)) to becreated on or extend to or otherwise arise upon or burden the collateral designated for inclusion inCOMET securing the notes or proceeds thereof or (C) the lien in favor of the indenture trustee of theindenture (or any supplement thereto) not to constitute a valid first priority security interest in thecollateral designated for inclusion in COMET.

COMET may not engage in any activity other than the activities set forth in the trust agreement, the materialprovisions of which are described in “The Issuing Entity.”

COMET will also covenant that if:

• COMET defaults in the payment of interest on any series, class or tranche of notes when such interestbecomes due and payable and such default continues for a period of 35 days following the date on whichsuch interest became due and payable, or

• COMET defaults in the payment of the principal of any series, class or tranche of notes on its legalmaturity date,

COMET will, upon demand of the indenture trustee, pay to the indenture trustee, for the benefit of the holders ofany such notes of the affected series, class or tranche, the whole amount then due and payable on any such notesfor principal and interest, after giving effect to any allocation and subordination requirements described in thisprospectus and the related prospectus supplement, with interest, to the extent that payment of such interest willbe legally enforceable, upon the overdue principal and upon overdue installments of interest. In addition,COMET will pay an amount sufficient to cover the costs and expenses of collection, including the reasonablecompensation, expenses, disbursements and advances of the indenture trustee, its agents and counsel and all othercompensation due to the indenture trustee. If COMET fails to pay such amounts upon such demand, the indenturetrustee may institute a judicial proceeding for the collection of the unpaid amounts described above.

Meetings

If the notes of a series, class or tranche are issuable in whole or in part as bearer notes, a meeting ofnoteholders of notes of the series, class or tranche may be called at any time and from time to time pursuant tothe indenture to make, give or take any action provided by the indenture (or any supplement thereto).

The indenture trustee will call a meeting upon request of COMET or the holders of at least 10% in aggregateoutstanding dollar principal amount of the outstanding notes of the series, class or tranche issuable in whole or inpart as bearer notes. In any case, a meeting will be called after notice is given to holders of notes in accordance

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with the indenture. The indenture trustee may call a meeting of the holders of notes of a series, class or tranche atany time for any purpose.

The quorum for a meeting is generally a majority of the holders of the outstanding dollar principal amountof the related series, class or tranche of notes, as the case may be. However, if any action to be taken at a meetingrequires the approval of a percentage that is not the majority of the holders of the outstanding dollar principalamount of the related series, class or tranche of notes, then the quorum will be the required percentage forapproving that particular action.

Voting

Any action or vote to be taken by the holders of a majority, or other specified percentage, of any series, classor tranche of notes may be adopted by the affirmative vote of the holders of a majority, or the applicable otherspecified percentage, of the aggregate outstanding dollar principal amount of the outstanding notes of that series,class or tranche, as the case may be. For a description of the noteholders’ actions and voting as they relate to themaster trust, see “Risk Factors—You may have limited or no ability to control actions under the indenture and amaster trust pooling agreement. This may result in, among other things, payment of principal being acceleratedwhen it is beneficial to you to receive payment of principal on the expected principal payment date, or it mayresult in payment of principal not being accelerated when it is beneficial to you to receive early payment ofprincipal.”

Any action or vote taken at any meeting of holders of notes duly held in accordance with the indenture willbe binding on all holders of the affected notes or the affected series, class or tranche of notes, as the case may be.

Notes held by COMET, the transferor or their affiliates will not be deemed outstanding for purposes ofvoting or calculating a quorum at any meeting of noteholders.

Amendments to the Indenture, the asset pool supplement and the Indenture Supplements

COMET and the indenture trustee may amend, supplement or otherwise modify the indenture, the assetpool supplement or any indenture supplement without the consent of any noteholder upon delivery of a mastertrust tax opinion and an issuing entity tax opinion, as described under “—Tax Opinions for Amendments” below,and upon delivery by COMET to the indenture trustee of an officer’s certificate to the effect that COMETreasonably believes that such amendment will not and is not reasonably expected to (i) result in the occurrence ofan early redemption event or event of default for any series, class or tranche of notes, (ii) adversely affect theamount of funds available to be distributed to the noteholders of any series, class or tranche of notes or the timingof such distributions, or (iii) adversely affect the security interest of the indenture trustee in the collateralsecuring the outstanding notes in COMET. Such amendments to the indenture, the asset pool supplement or anyindenture supplement may:

• evidence the succession of another entity to COMET, and the assumption by such successor of thecovenants of COMET in the indenture (or any supplement thereto) and the notes;

‰ add to the covenants of COMET, or have COMET surrender any of its rights or powers under the indenture(or any supplement thereto), for the benefit of the noteholders of any or all series, classes or tranches;

• cure any ambiguity, correct or supplement any provision in the indenture which may be inconsistent withany other provision in the indenture (or any supplement thereto), or make any other provisions withrespect to matters or questions arising under the indenture (or any supplement thereto);

• add to the indenture (or any supplement thereto) certain provisions expressly permitted by the TrustIndenture Act of 1939, as amended;

• establish any form of note, or add to the rights of the holders of the notes of any series, class or tranche;

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• provide for the acceptance of a successor indenture trustee under the indenture for one or more series,classes or tranches of notes and add to or change any of the provisions of the indenture (or anysupplement thereto) as will be necessary to provide for or facilitate the administration of the trusts underthe indenture by more than one indenture trustee;

• add any additional early redemption events or events of default for the notes of any or all series, classes ortranches;

• provide for the consolidation of any master trust and COMET into a single entity or the transfer of assetsin the master trust to COMET after the termination of all series of master trust investor certificates (otherthan the related collateral certificate);

• if one or more transferors are added to, or replaced under, a transfer and servicing agreement, a transferand administration agreement or a related pooling agreement or trust agreement, or one or morebeneficiaries are added to, or replaced under, the trust agreement, make any necessary changes to theindenture (or any supplement thereto) or any other related document;

• add assets to COMET;

• provide for additional or alternative forms of credit enhancement for any tranche of notes;

• comply with any regulatory, accounting or tax laws; or

• qualify for sale treatment under generally accepted accounting principles.

By purchasing an interest in any note, each such owner will be deemed to have consented to amendments tothe indenture, the asset pool supplement or any indenture supplement to satisfy accounting requirements foroff-balance sheet treatment for assets in COMET or any underlying master trust or securitization special purposeentity, including amendments providing for the transfer of receivables and the Transferor Interest to a newlyformed bankruptcy remote special purpose entity that would then transfer the receivables to COMET. Promptlyfollowing the execution of any amendment to the indenture, the asset pool supplement and the applicableindenture supplement, the indenture trustee will furnish written notice of the substance of such amendment toeach noteholder.

The indenture, the asset pool supplement or any indenture supplement may also be amended without theconsent of the indenture trustee or any noteholders upon delivery of a master trust tax opinion and an issuingentity tax opinion, as described under “—Tax Opinions for Amendments” below, for the purpose of addingprovisions to, or changing in any manner or eliminating any of the provisions of, the indenture, the asset poolsupplement or any indenture supplement or of modifying in any manner the rights of the holders of the notesunder the indenture, the asset pool supplement or any indenture supplement, or adding additional assets toCOMET; provided, however, that COMET shall (i) deliver to the indenture trustee an officer’s certificate to theeffect that COMET reasonably believes that such amendment will not and is not reasonably expected to (a) resultin the occurrence of an early redemption event or event of default for any series, class or tranche of notes,(b) adversely affect the amount of funds available to be distributed to the noteholders of any series, class ortranche of notes or the timing of such distributions, or (c) adversely affect the security interest of the indenturetrustee in the collateral securing the outstanding notes in COMET and (ii) receive written confirmation from eachrating agency that such amendment will not result in the reduction, qualification or withdrawal of the ratings ofany outstanding notes which it has rated.

The indenture trustee may, but shall not be obligated to, enter into any amendment which adversely affectsthe indenture trustee’s rights, duties, benefits, protections, privileges or immunities under the indenture (or anysupplement thereto).

COMET and the indenture trustee, upon delivery of a master trust tax opinion and an issuing entity taxopinion, as described under “—Tax Opinions for Amendments” below, may modify and amend the indenture, theasset pool supplement or any indenture supplement, for reasons other than those stated in the prior paragraphs,

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with prior notice to each rating agency and the consent of the holders of at least 662⁄3% of the outstanding dollarprincipal amount of each series, class or tranche of notes affected by that modification or amendment. However,if the modification or amendment would result in any of the following events occurring, it may be made onlywith the consent of the holders of 100% of each outstanding series, class or tranche of notes affected by themodification or amendment:

• a change in any date scheduled for the payment of interest on any note or the Expected Principal PaymentDate or legal maturity date of any note;

• a reduction of the stated principal amount of, or interest rate on, any note, or a change in the method ofcomputing the outstanding dollar principal amount, the Adjusted Outstanding Dollar Principal Amount,or the Nominal Liquidation Amount in a manner that is adverse to any noteholder;

• a reduction of the amount of a discount note payable upon the occurrence of an early redemption event orother optional or mandatory redemption or upon the acceleration of its maturity;

• an impairment of the right to institute suit for the enforcement of any payment on any note;

• a reduction of the percentage in outstanding dollar principal amount of the notes of any outstandingseries, class or tranche, the consent of whose holders is required for modification or amendment of theindenture, the asset pool supplement, any indenture supplement or any related agreement or for waiver ofcompliance with provisions of the indenture or for waiver of defaults and their consequences provided forin the indenture;

• a modification of any of the provisions governing the amendment of the indenture, the asset poolsupplement, any indenture supplement or COMET’s covenants not to claim rights under any law whichwould affect the covenants or the performance of the indenture, the asset pool supplement or anyindenture supplement, except to increase any percentage of noteholders required to consent to any suchamendment or to provide that certain other provisions of the indenture cannot be modified or waivedwithout the consent of the holder of each outstanding note affected by such modification;

• permission being given to create any lien or other encumbrance on the collateral in COMET securing anynotes ranking senior to the lien of the indenture;

• a change in the city or political subdivision so designated for any series, class or tranche of notes whereany principal of, or interest on, any note is payable; or

• a change in the method of computing the amount of principal of, or interest on, any note on any date.

The holders of a majority in aggregate outstanding dollar principal amount of the outstanding notes of anaffected series, class or tranche may waive, on behalf of the holders of all the notes of that series, class ortranche, compliance by COMET with specified restrictive provisions of the indenture or the related indenturesupplement.

The holders of more than 662⁄3% of the aggregate outstanding dollar principal amount of the outstandingnotes of an affected series, class or tranche may, on behalf of all holders of notes of that series, class or tranche,waive any past default under the indenture or the indenture supplement for notes of that series, class or tranche.However, the consent of the holders of all outstanding notes of a series, class or tranche is required to waive anypast default in the payment of principal of, or interest on, any note of that series, class or tranche or in respect ofa covenant or provision of the indenture (or any supplement thereto) that cannot be modified or amended withoutthe consent of the holders of each outstanding note of that series, class or tranche.

Tax Opinions for Amendments

No amendment to the indenture, the asset pool supplement or any indenture supplement will be effectiveunless COMET has delivered to the indenture trustee, the owner trustee and the rating agencies an opinion ofcounsel that for federal income tax purposes (1) the amendment will not adversely affect the tax characterization

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as debt of any outstanding series, class or tranche of notes that were characterized as debt at the time of theirissuance, (2) following the amendment, COMET will not be treated as an association, or publicly tradedpartnership, taxable as a corporation and (3) the amendment will not cause or constitute an event in which gain orloss would be recognized by any holder of any note. A copy of any such opinion will not be provided tonoteholders.

Addresses for Notices

Notices to holders of notes will be given by mail sent to the addresses of the holders as they appear in thenote register.

Issuing Entity’s Annual Compliance Statement

COMET will be required to furnish annually to the indenture trustee a statement concerning its performanceor fulfillment of covenants, agreements or conditions in the indenture (or any supplement thereto) as well as thepresence or absence of defaults under the indenture (or any supplement thereto).

Indenture Trustee’s Annual Report

To the extent required by the Trust Indenture Act, as amended, the indenture trustee will mail each year toall registered noteholders a report concerning:

• its eligibility and qualifications to continue as trustee under the indenture,

• any amounts advanced by it under the indenture (or any supplement thereto),

• the amount, interest rate and maturity date or indebtedness owing by COMET to it in the indenturetrustee’s individual capacity,

• the property and funds physically held by it as indenture trustee,

• any release or release and substitution of collateral subject to the lien of the indenture that has notpreviously been reported, and

• any action taken by it that materially affects the notes and that has not previously been reported.

List of Noteholders

Three or more holders of notes of any series, each of whom has owned a note for at least six months, may,upon written request to the indenture trustee, obtain access to the current list of noteholders of COMET forpurposes of communicating with other noteholders concerning their rights under the indenture (or anysupplement thereto) or the notes. The indenture trustee may elect not to give the requesting noteholders access tothe list if it agrees to mail the desired communication or proxy to all applicable noteholders.

Replacement of Notes

COMET will replace at the expense of the holder any mutilated note upon surrender of that note to theindenture trustee. COMET will replace at the expense of the holder any notes that are destroyed, lost or stolenupon delivery to the indenture trustee of evidence of the destruction, loss or theft of those notes satisfactory toCOMET and the indenture trustee. In the case of a destroyed, lost or stolen note, COMET and the indenturetrustee may require the holder of the note to provide an indemnity satisfactory to the indenture trustee andCOMET before a replacement note will be issued, and COMET may require the payment of a sum sufficient tocover any tax or other governmental charge, and any other expenses (including the fees and expenses of theindenture trustee) in connection with the issuance of a replacement note.

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Reports

Monthly reports containing information on the notes and the collateral securing the notes will be filed withthe Securities and Exchange Commission to the extent required by the SEC. These reports will not be sent tonoteholders. See “Where You Can Find More Information” for information as to how these reports may beaccessed.

Monthly reports, which will be prepared by Capital One Bank as servicer, will contain the followinginformation regarding Series 2002-CC, only to the extent applicable for the related month:

• certain information regarding the performance of the receivables and the master trust (e.g., beginning andend of month finance charge receivables and principal receivables, total receivables removed, totalreceivables added, end of month seller percentage, etc.);

• end of month delinquency and loss information, including the annualized default rate;

• certain information regarding collections during the related month, including, among other things,payment rates and annualized yield;

• the floating allocation amount, available funds, excess finance charge amounts and finance chargeshortfall for Series 2002-CC; and

• the principal allocation amount, Series 2002-CC monthly principal payment, shared principal collectionsand principal shortfall for Series 2002-CC.

The monthly reports, which will be prepared by Capital One Bank as administrator of COMET, will containthe following information for each tranche of Card series notes, only to the extent applicable for those notes forthe related month:

• targeted deposits to interest funding sub-accounts;

• interest to be paid on the corresponding distribution date;

• targeted deposits to principal funding sub-accounts;

• principal to be paid on the distribution date, if any;

• targeted deposits to and withdrawals from Class C reserve sub-accounts, if any;

• targeted deposits to and withdrawals from Class D reserve sub-accounts, if any;

• targeted deposits to and withdrawals from accumulation reserve sub-accounts;

• outstanding dollar principal amount and nominal liquidation amount for the related monthly period;

• usage amounts for each class;

• required subordinated amounts for each class;

• available subordinated amounts for each class;

• the nominal liquidation amount for each tranches of Card series notes outstanding; and

• any new issuances of Card series notes to the extent not previously reported.

On or before January 31 of each calendar year, the paying agent, on behalf of the indenture trustee, willfurnish to each person who at any time during the prior calendar year was a noteholder of record a statementcontaining the information required to be provided by an issuer of indebtedness under the Internal Revenue Code.See “Federal Income Tax Consequences.”

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Governing Law

The laws of the State of New York will govern the notes and the indenture (and any supplement thereto).

Plan of Distribution

COMET may offer and sell the notes in any of three ways:

• directly to one or more purchasers;

• through agents; or

• through underwriters.

Any underwriter or agent that offers the notes may be an affiliate of COMET, and offers and sales of notesmay include secondary market transactions by affiliates of COMET. These affiliates may act as principal oragent in secondary market transactions. Secondary market transactions will be made at prices related toprevailing market prices at the time of sale.

Underwriters or agents may sell the notes to one or more trusts or other special purpose entities.

COMET will specify in a prospectus supplement the terms of each offering, which may include:

• the name or names of any underwriters or agents,

• the public offering or purchase price,

• the net proceeds to COMET from the sale,

• any underwriting discounts and other items constituting underwriters’ compensation,

• any discounts and commissions allowed or paid to dealers,

• any commissions allowed or paid to agents, and

• the securities exchanges, if any, on which the notes will be listed.

Dealer trading may take place in some of the notes, including notes not listed on any securities exchange.Direct sales may be made on a national securities exchange or otherwise. If COMET, directly or through agents,solicits offers to purchase notes, COMET reserves the sole right to accept and, together with its agents, to rejectin whole or in part any proposed purchase of notes.

COMET may change any initial public offering price and any discounts or concessions allowed or reallowedor paid to dealers. If indicated in a prospectus supplement, COMET will authorize underwriters or agents tosolicit offers by certain institutions to purchase securities from COMET pursuant to delayed delivery contractsproviding for payment and delivery at a future date.

The bank may retain notes of a series, class or tranche upon initial issuance and may sell them on asubsequent date. Offers to purchase notes may be solicited directly by the bank and sales may be made by thebank to institutional investors or others deemed to be underwriters within the meaning of the Securities Act of1933, as amended, with respect to any resale of the securities.

Any underwriter participating in the distribution of securities, including notes offered by this prospectus, is,and any agent participating in the distribution of securities, including notes offered by this prospectus, may bedeemed to be, an underwriter of those securities under the Securities Act of 1933 and any discounts orcommissions received by it and any profit realized by it on the sale or resale of the securities may be deemed tobe underwriting discounts and commissions.

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The banks, the transferor and COMET may agree to indemnify underwriters, agents and their controllingpersons against certain civil liabilities, including liabilities under the Securities Act of 1933 in connection withtheir participation in the distribution of COMET’s notes.

Underwriters and agents participating in the distribution of the notes, and their controlling persons, mayengage in transactions with and perform services for the banks, the transferor, COMET or their respectiveaffiliates in the ordinary course of business.

Certain Legal Aspects of the Receivables

Certain Regulatory Matters

The operations and financial condition of the banks are subject to extensive regulation and supervisionunder federal and state law. The appropriate banking regulatory authorities, including the United States FederalDeposit Insurance Corporation, have broad enforcement powers over the banks. These enforcement powers mayadversely affect the operation and financial condition of the master trust and COMET, and your rights under thepooling agreement, the trust agreement, and the indenture prior to the appointment of a receiver or conservator.

If United States federal bank regulatory authorities supervising any bank were to find that any obligation ofsuch bank or an affiliate under a securitization or other agreement, or any activity of such bank or affiliate,constituted an unsafe or unsound practice or violated any law, rule, regulation or written condition or agreementapplicable to the related bank, such federal bank regulatory authorities have the power under the United StatesFederal Deposit Insurance Act to order such bank or affiliate, among other things, to rescind such agreement orcontract, refuse to perform that obligation, terminate the activity, amend the terms of such obligation or take suchother action as such regulatory authorities determine to be appropriate. In such an event, the banks may not beliable to you for contractual damages for complying with such an order and you may have no recourse against therelevant regulatory authority.

Recently, after the Office of the Comptroller of the Currency found that a national bank was, contrary tosafe and sound banking practices, receiving inadequate servicing compensation under its securitizationagreements, that bank agreed to a consent order with the OCC. Such consent order requires that bank, amongother things, to immediately resign as servicer and to cease performing its duties as servicer withinapproximately 120 days, to immediately withhold and segregate funds from collections for payment of itsservicing fee (notwithstanding the priority of payments in the securitization agreements and the perfectedsecurity interest of the relevant trust in those funds) and to increase its servicing fee percentage above that whichwas originally agreed upon in its securitization agreements.

While Capital One Bank and Capital One, F.S.B. have no reason to believe that any appropriate federal bankregulatory authority would consider provisions relating to the banks or any affiliate acting as servicer or thepayment or amount of a servicing fee to the banks or any affiliate, or any other obligation of the banks or anaffiliate under its securitization agreements, to be unsafe or unsound or violative of any law, rule or regulationapplicable to them, there can be no assurance that any such regulatory authority would not conclude otherwise inthe future. If such a bank regulatory authority did reach such a conclusion, and ordered the related bank oraffiliate to rescind or amend its securitization agreements, payments to you could be delayed or reduced.

Consumer Protection Laws

The relationship between an accountholder and consumer lender is extensively regulated by federal, stateand local consumer protection laws. With respect to consumer revolving credit accounts owned by the bank, themost significant federal laws include the federal Truth-in-Lending, Equal Credit Opportunity, Fair CreditReporting and Fair Debt Collection Practices Acts. These statutes impose disclosure requirements before andwhen an account is opened and at the end of monthly billing cycles and, in addition, limit accountholder liability

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for unauthorized use, prohibit certain discriminatory practices in extending credit, impose certain limitations onthe type of account-related charges that may be issued and regulate collection practices. In addition,accountholders are entitled under these laws to have payments and credits applied to their accounts promptly andto require billing errors to be resolved promptly. The master trust may be liable for certain violations ofconsumer protection laws that apply to the receivables, either as assignee from the bank with respect toobligations arising before transfer of the receivables to the transferor or the master trust or as the party directlyresponsible for obligations arising after the transfer. In addition, an accountholder may be entitled to assert suchviolations by way of setoff against the obligation to pay the amount of receivables owing. See “Risk Factors.”All receivables that were not created or serviced in compliance in all material respects with the requirements ofsuch laws, subject to certain conditions described under “The Master Trust—Representations and Warranties,”will be reassigned to the transferor. The servicer has also agreed in the pooling agreement to indemnify themaster trust, among other things, for any liability arising from such servicing violations. For a discussion of themaster trust’s rights if the receivables were not created in compliance in all material respects with applicablelaws, see “The Transferor, The Depositor and The Receivables Purchase Agreements—Receivables PurchaseAgreements” and “The Master Trust—Representations and Warranties.”

The Servicemembers Civil Relief Act allows individuals on active duty in the military to cap the interestrate and fees on debts incurred before the call to active duty at 6%. In addition, subject to judicial discretion, anyaction or court proceeding in which an individual in military service is involved may be stayed if the individual’srights would be prejudiced by denial of such a stay. Currently, some accountholders with outstanding balanceshave been placed on active duty in the military, and more may be placed on active duty in the future.

Application of federal and state bankruptcy and debtor relief laws would affect the interests of investorcertificateholders and the noteholders in the receivables if such laws result in any receivables being charged offas uncollectible when there are no funds available from series enhancement or other sources. See “The MasterTrust—Defaulted Receivables; Rebates and Fraudulent Charges; Recoveries.”

Federal Income Tax Consequences

General

The following discussion describes the material United States federal income tax consequences of thepurchase, ownership and disposition of a beneficial interest in the notes. Additional federal income taxconsiderations relevant to a particular tranche may be set forth in the related prospectus supplement. Thefollowing discussion has been prepared and reviewed by Orrick, Herrington & Sutcliffe LLP as special taxcounsel to COMET (“Special Tax Counsel”). The discussion is based on the Internal Revenue Code of 1986, asamended as of the date hereof, and existing final, temporary and proposed Treasury regulations, revenue rulingsand judicial decisions, all of which are subject to prospective and retroactive changes. The discussion isaddressed only to original purchasers of an interest in the notes, deals only with interests in notes held as capitalassets within the meaning of Section 1221 of the Internal Revenue Code and, except as specifically set forthbelow, does not address tax consequences of holding interests in notes that may be relevant to investors in lightof their own investment circumstances or their special tax situations, such as certain financial institutions,tax-exempt organizations, life insurance companies, dealers in securities, non-U.S. persons, or investors holdinginterests in the notes as part of a conversion transaction, as part of a hedge or hedging transaction, or as a positionin a straddle for tax purposes. Further, this discussion does not address alternative minimum tax consequences orany tax consequences to holders of equity interests in a holder of an interest in a note. Special Tax Counsel is ofthe opinion that the following discussion of federal income tax consequences is correct in all material respects.Noteholders should be aware that this discussion and the opinions contained herein may not be able to be reliedupon to avoid any income tax penalties that may be imposed with respect to the notes. An opinion of Special Tax

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Counsel, however, is not binding on the Internal Revenue Service or the courts, and no ruling on any of the issuesdiscussed below will be sought from the Internal Revenue Service. Moreover, there are no authorities on similartransactions involving interests issued by an entity with terms similar to those of the notes described in thisprospectus. Accordingly, it is suggested that persons considering the purchase of an interest in notes shouldconsult their own tax advisors with regard to the United States federal income tax consequences of aninvestment in an interest in the notes and the application of United States federal income tax laws, as wellas the laws of any state, local or foreign taxing jurisdictions, to their particular situations.

Description of Opinions

As more fully described in this “Federal Income Tax Consequences” section, Special Tax Counsel is of theopinion generally to the effect that each of COMET and the master trust will not be subject to federal income tax,and further that the notes will be characterized as debt for United States federal income tax purposes.Additionally, Special Tax Counsel is of the opinion generally to the effect that the statements set forth in thissection to the extent that they constitute matters of law or legal conclusions, are correct in all material respects.

Special Tax Counsel has not been asked to opine on any other federal income tax matter, and the balance ofthis discussion does not purport to set forth any opinion of Special Tax Counsel concerning any other particularfederal income tax matter. For example, the discussion of original issue discount below is a general discussion offederal income tax consequences relating to an investment in notes that are treated as having original issuediscount, which discussion Special Tax Counsel opines is correct in all material respects as described above;however, that discussion does not set forth any opinion as to whether any particular tranche or series of notes willbe treated as having original issue discount. Additionally, those matters as to which Special Tax Counsel rendersopinions should be understood to be subject to the additional considerations in the discussions relating to thoseopinions set forth below.

Special Tax Counsel has not been asked to, and does not, render any opinion regarding the state or localincome tax consequences of the purchase, ownership and disposition of a beneficial interest in the notes. See“—State and Local Tax Consequences.”

This description of the substance of the opinions rendered by Special Tax Counsel is not intended as asubstitute for an investor’s review of the remainder of this discussion of income tax consequences, or forconsultation with its own advisors or tax return preparer.

Tax Characterization of the Issuing Entity and the Notes

Treatment of the Issuing Entity and the Master Trust as Entities Not Subject to Tax

Special Tax Counsel is of the opinion that, although no transaction closely comparable to that contemplatedherein has been the subject of any Treasury regulation, revenue ruling or judicial decision, each of COMET andthe master trust will not be classified as an association or as a publicly traded partnership taxable as a corporationfor federal income tax purposes. As a result, Special Tax Counsel is of the opinion that each of COMET and themaster trust will not be subject to federal income tax. However, as discussed above, this opinion is not binding onthe Internal Revenue Service and no assurance can be given that this characterization will prevail.

The precise tax characterization of COMET and the master trust for federal income tax purposes is notcertain. They might be viewed as merely holding assets on behalf of the transferor as collateral for notes issuedby the transferor. On the other hand, they could be viewed as one or more separate entities for tax purposesissuing the notes. This distinction, however, should not have a significant tax effect on holders of interests innotes except as stated below under “—Possible Alternative Characterizations.”

Treatment of the Notes as Debt

Special Tax Counsel is of the opinion that, although no transaction closely comparable to that contemplatedherein has been the subject of any Treasury regulation, revenue ruling or judicial decision, the notes will be

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characterized as debt for United States federal income tax purposes. Additionally, COMET will agree by enteringinto the indenture, and the holders of interests in notes will agree by their purchase and holding of an interest innotes, to treat the notes as debt secured by any applicable collateral certificate and other assets of COMET forUnited States federal income tax purposes.

Possible Alternative Characterizations

If, contrary to the opinion of Special Tax Counsel, the Internal Revenue Service successfully asserted that aseries or class of notes did not represent debt for United States federal income tax purposes, those notes might betreated as equity interests in COMET, the master trust or some other entity for such purposes. If so treated,investors could be treated either as partners in a partnership or, alternatively, as shareholders in a taxablecorporation for such purposes. If an investor were treated as a partner in a partnership, it would be taxedindividually on its respective share of the partnership’s income, gain, loss, deductions and credits attributable tothe partnership’s ownership of any applicable collateral certificate and other assets and liabilities of thepartnership without regard to whether there were actual distributions of that income. As a result, the amount,timing, character and source of items of income and deductions of an investor could differ if its interest in noteswere held to constitute a partnership interest rather than debt. Treatment of a holder of an interest in notes as apartner could have adverse tax consequences to certain holders; for example, absent an applicable exemption,income to foreign persons would be subject to United States tax and United States tax return filing andwithholding requirements, and individual holders might be subject to certain limitations on their ability to deducttheir share of partnership expenses. Alternatively, the Internal Revenue Service could contend that some or all ofthe notes, or separately some of the other securities that COMET and the master trust are permitted to issue (andwhich are permitted to constitute debt or equity for federal income tax purposes), constitute equity in apartnership that should be classified as a publicly traded partnership taxable as a corporation for federal incometax purposes. Any such partnership would be classified as a publicly traded partnership and could be taxable as acorporation if its equity interests were traded on an “established securities market,” or are “readily tradable” on a“secondary market” or its “substantial equivalent.” The transferor intends to take measures designed to reducethe risk that either of COMET or the master trust could be classified as a publicly traded partnership; althoughthe transferor expects that such measures will ultimately be successful, certain of the actions that may benecessary for avoiding the treatment of such other securities as “readily tradable” on a “secondary market” or its“substantial equivalent” are not fully within the control of the transferor. As a result, there can be no assurancethat the measures the transferor intends to take will in all circumstances be sufficient to prevent COMET and themaster trust from being classified as publicly traded partnerships. If COMET or the master trust were treated inwhole or in part as one or more publicly traded partnerships taxable as a corporation, corporate tax imposed withrespect to such corporation could materially reduce cash available to make payments on the notes, and foreigninvestors could be subject to withholding taxes. Additionally, no distributions from the corporation would bedeductible in computing the taxable income of the corporation, except to the extent that any notes or othersecurities were treated as debt of the corporation and distributions to the related holder of an interest in notes orother security holders were treated as payments of interest thereon. Further, distributions to a holder of an interestin notes not treated as holding debt would be dividend income to the extent of the current and accumulatedearnings and profits of the corporation (possibly without the benefit of any dividends received deduction).Prospective investors should consult their own tax advisors with regard to the consequences of possiblealternative characterizations to them in their particular circumstances; the following discussion assumes that thecharacterization of the notes as debt and COMET and the master trust as entities not subject to federal income taxis correct.

Consequences to Holders of an Interest in the Offered Notes

Interest and Original Issue Discount

Stated interest on a note will be includible in gross income as it accrues or is received in accordance with theusual method of tax accounting of a holder of an interest in notes. If a class of notes is issued with original issuediscount, the provisions of Sections 1271 through 1273 and 1275 of the Internal Revenue Code will apply to

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those notes. Under those provisions, a holder of an interest in such a note (including a cash basis holder) wouldbe required to include the original issue discount on an interest in a note in income for federal income taxpurposes on a constant yield basis, resulting in the inclusion of original issue discount in income in advance ofthe receipt of cash attributable to that income. Subject to the discussion below, an interest in a note will be treatedas having original issue discount to the extent that its “stated redemption price” exceeds its “issue price,” if suchexcess equals or exceeds 0.25 percent multiplied by the weighted average life of the note (determined by takinginto account the number of complete years following issuance until payment is made for each partial principalpayment). Under Section 1272(a)(6) of the Internal Revenue Code, special provisions apply to debt instrumentson which payments may be accelerated due to prepayments of other obligations securing those debt instruments.However, no regulations have been issued interpreting those provisions, and the manner in which thoseprovisions would apply to the notes is unclear, but the application of Section 1272(a)(6) could affect the rate ofaccrual of original issue discount and could have other consequences to holders of interests in the notes.Additionally, the Internal Revenue Service could take the position based on Treasury regulations that none of theinterest payable on an interest in a note is “unconditionally payable” and hence that all of such interest should beincluded in its stated redemption price at maturity. If sustained, such treatment should not significantly affect taxliabilities for most holders of the notes, but prospective investors should consult their own tax advisorsconcerning the impact to them in their particular circumstances. COMET intends to take the position that intereston the notes constitutes “qualified stated interest” and that the above consequences do not apply.

Market Discount

A holder of an interest in a note who purchases its interest at a discount that exceeds any original issuediscount not previously includible in income may be subject to the “market discount” rules of Sections 1276through 1278 of the Internal Revenue Code. These rules provide, in part, that gain on the sale or other dispositionof a note and partial principal payments on a note are treated as ordinary income to the extent of accrued marketdiscount. The market discount rules also provide for deferral of interest deductions with respect to debt incurredto purchase or carry a note that has market discount.

Market Premium

A holder of an interest in a note who purchases its interest at a premium may elect to amortize the premiumagainst interest income over the remaining term of the note in accordance with the provisions of Section 171 ofthe Internal Revenue Code.

Disposition of an Interest in the Notes

Subject to exceptions such as in the case of “wash sales,” upon the sale, exchange or retirement of aninterest in a note, the holder of such interest will recognize taxable gain or loss in an amount equal to thedifference between the amount realized on the disposition (other than amounts attributable to accrued interest)and the holder’s adjusted tax basis in its interest in the note. The holder’s adjusted tax basis in its interest in thenote generally will equal the cost of the interest in the note to such holder, increased by any market or originalissue discount previously included in income by such holder with respect to the note, and decreased by theamount of any bond premium previously amortized and any payments of principal or original issue discountpreviously received by such holder with respect to such note. Except to the extent of any accrued market discountnot previously included in income, any such gain treated as capital gain will be long-term capital gain if theinterest in the note has been held for more than one year, and any such loss will be a capital loss, subject tolimitations on deductibility.

Foreign Holders

Under United States federal income tax law now in effect, subject to exceptions applicable to certain typesof interest, payments of interest by COMET to a holder of an interest in a note who, as to the United States, is a

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nonresident alien individual or a foreign corporation (a “foreign person”) will be considered “portfolio interest”and will not be subject to United States federal income tax and withholding tax provided the interest is noteffectively connected with the conduct of a trade or business within the United States by the foreign person andthe foreign person (i) is not for United States federal income tax purposes (a) actually or constructively a “10percent shareholder” of the transferor, COMET or the master trust, (b) a “controlled foreign corporation” withrespect to which the transferor, COMET or the master trust is a “related person” within the meaning of theInternal Revenue Code, or (c) a bank extending credit pursuant to a loan agreement entered into in the ordinarycourse of its trade or business, and (ii) provides the person who is otherwise required to withhold United Statestax with respect to the notes with an appropriate statement (on IRS Form W-8BEN or a substitute form), signedunder penalties of perjury, certifying that the beneficial owner of the note is a foreign person and providing theforeign person’s name, address and certain additional information. If a note is held through a securities clearingorganization or certain other financial institutions, the organization or institution may provide the relevant signedstatement to the withholding agent; in that case, however, the signed statement must be accompanied by an IRSForm W-8BEN or substitute form provided by the foreign person that owns the interest in the note. Special rulesapply to partnerships, estates and trusts, and in certain circumstances certifications as to foreign status and othermatters may be required to be provided by partners and beneficiaries thereof. If such interest is not portfoliointerest, then it will be subject to United States federal income and withholding tax at a rate of 30%, unlessreduced or eliminated pursuant to an applicable tax treaty or such interest is effectively connected with theconduct of a trade or business within the United States and, in either case, the appropriate statement has beenprovided.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of an interest in anote by a foreign person will be exempt from United States federal income tax and withholding tax, provided that(i) such gain is not effectively connected with the conduct of a trade or business in the United States by theforeign person, and (ii) in the case of an individual foreign person, such individual is not present in the UnitedStates for 183 days or more in the taxable year.

The U.S. Treasury Department has recently issued final Treasury regulations which revise variousprocedural matters relating to withholding taxes. Holders of interests in notes should consult their tax advisorsregarding the procedures whereby they may establish an exemption from withholding.

Backup Withholding and Information Reporting

Payments of principal and interest, as well as payments of proceeds from the sale, retirement or dispositionof an interest in a note, may be subject to “backup withholding” tax under Section 3406 of the Internal RevenueCode if a recipient of such payments fails to furnish to the payor certain identifying information. Any amountsdeducted and withheld would be allowed as a credit against such recipient’s United States federal income tax,provided appropriate proof is provided under rules established by the Internal Revenue Service. Furthermore,certain penalties may be imposed by the Internal Revenue Service on a recipient of payments that is required tosupply information but that does not do so in the proper manner. Backup withholding will not apply with respectto payments made to certain exempt recipients, such as corporations and financial institutions. Information mayalso be required to be provided to the Internal Revenue Service concerning payments, unless an exemptionapplies. Holders of interests in the notes should consult their tax advisors regarding their qualification forexemption from backup withholding and information reporting and the procedure for obtaining such anexemption.

The United States federal income tax discussion set forth above may not be applicable dependingupon the particular tax situation of a holder of an interest in the notes, and does not purport to address theissues described with the degree of specificity that would be provided by a taxpayer’s own tax advisor.Accordingly, it is suggested that prospective investors should consult their own tax advisors regarding thetax consequences to them of the purchase, ownership and disposition of an interest in the notes and thepossible effects of changes in federal tax laws.

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State and Local Tax Consequences

The discussion above does not address the taxation of COMET or the tax consequences of the purchase,ownership or disposition of an interest in the notes under any state or local tax law. It is suggested that eachinvestor should consult its own tax advisor regarding state and local tax consequences.

Benefit Plan Investors

Benefit plans are required to comply with restrictions under the Employee Retirement Income Security Actof 1974, known as ERISA, and/or section 4975 of the Internal Revenue Code, if they are subject to either or bothsets of restrictions. The ERISA restrictions include rules concerning prudence and diversification of theinvestment of assets of a benefit plan—referred to as “plan assets.” A benefit plan fiduciary should considerwhether an investment by the benefit plan in notes complies with these requirements.

In general, a benefit plan for these purposes includes:

• a plan or arrangement which provides deferred compensation or certain health or other welfare benefits toemployees;

• an employee benefit plan that is tax-qualified under the Internal Revenue Code and provides deferredcompensation to employees—such as a pension, profit-sharing, section 401(k) or Keogh plan; and

• a collective investment fund or other entity if (a) the fund or entity has one or more benefit plan investorsand (b) certain “look-through” rules apply and treat the assets of the fund or entity as constituting planassets of the benefit plan investor.

However, a plan maintained by a governmental employer is not a benefit plan for these purposes. Mostplans maintained by religious organizations and plans maintained by foreign employers for the benefit ofemployees employed outside the United States are also not benefit plans for these purposes. A fund or otherentity—including an insurance company general account—considering an investment in notes should consult itstax advisors concerning whether its assets might be considered plan assets of benefit plan investors under theserules.

Prohibited Transactions

ERISA and Section 4975 of the Internal Revenue Code also prohibit transactions of a specified typebetween a benefit plan and a party in interest who is related in a specified manner to the benefit plan. Individualretirement accounts and tax-qualified plans that provide deferred compensation to employees are also subject tothese prohibited transaction rules unless they are maintained by a governmental employer or (in most cases) areligious organization. Violation of these prohibited transaction rules may result in significant penalties. Thereare statutory exemptions from the prohibited transaction rules, and the U.S. Department of Labor has grantedadministrative exemptions for specified transactions.

Potential Prohibited Transactions from Investment in Notes

There are two categories of prohibited transactions that might arise from a benefit plan’s investment innotes. Fiduciaries of benefit plans contemplating an investment in notes should carefully consider whether theinvestment would violate these rules.

Prohibited Transactions between the Benefit Plan and a Party in Interest

The first category of prohibited transaction could arise on the grounds that the benefit plan, by purchasingnotes, was engaged in a prohibited transaction with a party in interest. A prohibited transaction could arise, for

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example, if the notes were viewed as debt of the bank and the bank is a party in interest as to the benefit plan. Aprohibited transaction could also arise if the bank, the transferor, the master trust trustee, the indenture trustee,the servicer or another party with an economic relationship to COMET or the master trust either:

• is involved in the investment decision for the benefit plan to purchase notes; or

• is otherwise a party in interest as to the benefit plan.

If a prohibited transaction might result from the benefit plan’s purchase of notes, an administrativeexemption from the prohibited transaction rules might be available to permit an investment in notes. Theexemptions that are potentially available include the following prohibited transaction class exemptions:

• 96-23, available to certain “in-house asset managers”;

• 95-60, available to insurance company general accounts;

• 91-38, available to bank collective investment funds;

• 90-1, available to insurance company pooled separate accounts; and

• 84-14, available to independent “qualified professional asset managers.”

However, even if the benefit plan is eligible for one of these exemptions, the exemption may not coverevery aspect of the investment by the benefit plan that might be a prohibited transaction.

Prohibited Transactions between the Issuing Entity or the Master Trust and a Party in Interest

The second category of prohibited transactions could arise if:

• a benefit plan acquires notes, and

• under the “look-through” rules of the U.S. Department of Labor plan asset regulation, assets of COMETand, in turn, assets of the master trust are treated as if they were plan assets of the benefit plan.

In this case, every transaction by COMET and, in turn, the master trust would be treated as a transaction bythe benefit plan using its plan assets.

If assets of COMET and, in turn, assets of the master trust are treated as plan assets of a benefit planinvestor, a prohibited transaction could result if COMET itself engages in a transaction with a party in interest asto the benefit plan. For example, if COMET’s assets are treated as assets of the benefit plan and the master trustholds a credit card receivable that is an obligation of a participant in that same benefit plan, then there would be aprohibited extension of credit between the benefit plan and a party in interest, the plan participant.

As a result, if assets of COMET and, in turn, assets of the master trust are treated as plan assets, there wouldbe a significant risk of a prohibited transaction. Moreover, the prohibited transaction class exemptions referred toabove could not be relied on to exempt all the transactions of COMET or the master trust from the prohibitedtransaction rules. In addition, because all the assets of COMET or the master trust would be treated as planassets, managers of those assets might be required to comply with the fiduciary responsibility rules of ERISA.

Under an exemption in the plan asset regulation, assets of COMET would not be considered plan assets, andso this risk of prohibited transactions should not arise, if a benefit plan purchases a note that:

• is treated as indebtedness under local law, and

• has no “substantial equity features.”

COMET expects that all notes offered by this prospectus will be indebtedness under local law. Likewise,although there is no authority directly on point, COMET believes that the notes should not be considered to have

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Multi-asset Execution Trust, 0001163321. For purposes of any electronic version of this prospectus, thepreceding uniform resource locator, or URL, is an inactive textual reference only. We have taken steps to ensurethat this URL was inactive at the time the electronic version of this prospectus was created.

The servicer makes available to all investors, free of charge, its reports to the SEC pursuant to the SecuritiesExchange Act of 1934, as amended, including the above-mentioned reports on Form 10-K, 10-D and 8-K throughthe Corporation’s website at http://phx.corporate-ir.net/phoenix.zhtml?c=70667&p=irol-secbridge, as soon asreasonably practicable after such material is filed with, or furnished to, the SEC electronically. For purposes ofany electronic version of this prospectus, the preceding URL is an inactive textual reference only. We have takensteps to ensure that this URL was inactive at the time the electronic version of this prospectus was created.

We “incorporate by reference” information we file with the SEC, which means that we can discloseimportant information to you by referring you to those documents. The information incorporated by reference isconsidered to be part of this prospectus. Information that we file later with the SEC will automatically update theinformation in this prospectus. In all cases, you should rely on the later information over different informationincluded in this prospectus or the related prospectus 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 or COMET untilwe terminate our offering of the notes.

As a recipient of this prospectus, you may request a copy of any document we incorporate by reference,except exhibits to the documents (unless the exhibits are specifically incorporated by reference), at no cost, bywriting or calling us at: Capital One Bank, in care of Capital One Services, Inc., 1680 Capital One Drive,McLean, Virginia 22102, attention: Treasury Department, (703) 720-1000.

Forward-Looking Statements

This prospectus and the accompanying prospectus supplement, including information included orincorporated by reference in this prospectus and the accompanying prospectus supplement, may contain certainforward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Inaddition, certain statements made in future SEC filings by the transferor or the banks, in press releases and in oraland written statements made by or with the transferor’s or the banks’ approval that are not statements ofhistorical fact may constitute forward-looking statements. Forward-looking statements may relate to, withoutlimitation, the transferor’s or the banks’ financial condition, results of operations, plans, objectives, futureperformance or business.

Words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “estimates” and similar expressionsare intended to identify forward-looking statements but are not the only means to identify these statements.

Forward-looking statements involve risks and uncertainties. Actual conditions, events or results may differmaterially from those contemplated by the forward-looking statements. Factors that could cause this difference—many of which are beyond any transferor’s or the banks’ control—include the following, without limitation:

• local, regional and national business, political or economic conditions may differ from those expected;

• the effects and changes in trade, monetary and fiscal policies and laws, including the interest rate policiesof the Federal Reserve Board, may adversely affect any transferor’s or the banks’ business;

• the timely development and acceptance of new products and services may be different than anticipated;

• technological changes instituted by any transferor or the banks and by persons who may affect anytransferor’s or the banks’ business may be more difficult to accomplish or more expensive thananticipated or may have unforeseen consequences;

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• acquisitions and integration of acquired businesses or portfolios may be more difficult or expensive thananticipated;

• the ability to increase market share and control expenses may be more difficult than anticipated;

• competitive pressures among financial services companies may increase significantly;

• changes in laws and regulations may adversely affect any transferor or the banks or each of theirrespective businesses;

• changes in accounting policies and practices, as may be adopted by regulatory agencies and the FinancialAccounting Standards Board, may affect expected financial reporting or business results;

• the costs, effects and outcomes of litigation may adversely affect any transferor or the banks or each oftheir respective businesses; and

• the transferor or the banks may not manage the risks involved in the foregoing as well as anticipated.

Forward-looking statements speak only as of the date they are made. The transferor and the banks undertakeno obligations to update any forward-looking statement to reflect subsequent circumstances or events.

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Glossary of Defined Terms

“Adjusted Outstanding Dollar Principal Amount” means, at any time for any series, class or tranche ofnotes, the outstanding dollar principal amount of all outstanding notes of such series, class or tranche at that time,less any funds then on deposit with respect to principal in any issuing entity trust account or the relatedsubaccount, as applicable, for such series, class or tranche.

“Adjustment Payment” means a payment by the transferor into the master trust collection account on anyapplicable Distribution Date in an amount equal to the amount by which the Master Trust Transferor Interest hasbeen reduced below zero as a result of the exclusion of principal receivables (other than Ineligible Receivableswhich have been or will be reassigned to the transferor) from the master trust that have been adjusted downwardby the servicer.

“Aggregate Addition Limit” means the number of automatic additional accounts included in the master trustwithout prior rating agency consent which would either:

• for any three consecutive months, equal 15% of the number of accounts designated to the master trust asof the end of the ninth month before the start of such three months, or

• for any twelve consecutive months, equal 20% of the number of accounts designated to the master trust asof the first day of such twelve months.

“Average Principal Balance” means, (a) for a month in which an addition of accounts or removal ofaccounts occurs in COMET, the weighted average of the principal receivables in COMET at the end of the dayon the last day of the preceding month and the principal receivables in COMET at the end of the day on the daysuch addition or removal of accounts occurs, as the case may be, after giving effect to such addition or removalweighted, respectively, by (1) a fraction, (x) the numerator of which is the number of days from and including thefirst day of such month to but excluding the addition or removal date, as the case may be, and (y) thedenominator of which is the number of days in such month, and (2) by a fraction, (x) the numerator of which isthe number of days from and including the date of the addition or removal, as the case may be, to and includingthe last day of such month, and (y) the denominator of which is the number of days in such month, and (b) for amonth in which no addition or removal of accounts occurs, the aggregate principal receivables in COMET as ofthe last day of the prior month.

“Bank Portfolio” means the portfolio of MasterCard and VISA accounts and other revolving credit accountsowned by the bank and its predecessor.

“Base Certificate” means, if the transferor elects to evidence the Master Trust Transferor Interest incertificated form, a certificate executed by the transferor and authenticated by or on behalf of the master trusttrustee evidencing the Master Trust Transferor Interest.

“Base Rate” means, for any month, the sum of (a) 1.25%, or if the bank or The Bank of New York is not theservicer, 2.0% and (b) the weighted average (based on the Outstanding Dollar Principal Amount of the relatedCard series notes) of the following:

(i) for a tranche of Card series dollar interest-bearing notes without a derivative agreement for interest,the note interest rate for that tranche for the period from and including the Monthly Interest Accrual Date forthat tranche for that month to but excluding the Monthly Interest Accrual Date for that tranche in the nextmonth;

(ii) for a tranche of Card series discount notes, the rate of accretion of principal for that tranche for theperiod from and including the Monthly Interest Accrual Date for that tranche in such month to but excludingthe Monthly Interest Accrual Date for that tranche in the next month;

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(iii) for a tranche of Card series notes with a performing derivative agreement for interest, the rate atwhich payments by COMET are made to the related derivative counterparty (prior to any netting ofpayments, if applicable) for the period from and including the Monthly Interest Accrual Date for thattranche in such month to but excluding the Monthly Interest Accrual Date for that tranche in the next month(however, for a tranche of Card series notes with a performing derivative agreement for interest in which therating on such tranche is not dependant upon the rating of the related derivative counterparty, the amountdetermined pursuant to this clause will be the higher of (1) the rate determined pursuant to this clause asdescribed above and (2) the rate of interest for that tranche for the period from and including the MonthlyInterest Accrual Date for that tranche of Card series notes in such month to but excluding the MonthlyInterest Accrual Date for that tranche of Card series notes in the next month; and

(iv) for a tranche of Card series notes with a non-performing derivative agreement for interest, the ratespecified for that date in the related terms document.

“Business Day” is, unless otherwise indicated in the related prospectus supplement, any day other than aSaturday, a Sunday or a day on which banking institutions in New York, New York, Richmond, Virginia or FallsChurch, Virginia are authorized or obligated by law, executive order or governmental decree to be closed.

“Card series Defaulted Amount” means, for any month, an amount equal to the Floating AllocationPercentage for the Card series times the Default Amount for that month.

“Card series Finance Charge Amounts” means, for any month, the amounts to be treated as Card seriesFinance Charge Amounts as described in “Deposit and Application of Funds for Card Series Notes—Card SeriesFinance Charge Amounts” in this prospectus.

“Card series Principal Amounts” means, for any month, the sum of the Principal Amounts allocated to theCard series, dollar receipts for principal under any derivative agreements for tranches of notes of the Card series,any shared excess Principal Amounts allocated to the Card series, and any amounts of Card series FinanceCharge Amounts available to cover Card series Defaulted Amounts or reimburse any deficits in the NominalLiquidation Amount of the Card series notes.

“Class A Available Subordinated Amount of Class B notes” means, for any tranche of Class A notes, forany Distribution Date, an amount equal to the Class A Required Subordinated Amount of Class B notes minusthe Class A Usage Amount of Class B notes, each for that tranche of Class A notes as of that Distribution Date.

“Class A Available Subordinated Amount of Class C notes” means, for any tranche of Class A notes, forany Distribution Date, an amount equal to the Class A Required Subordinated Amount of Class C notes minusthe Class A Usage Amount of Class C notes, each for that tranche of Class A notes as of that Distribution Date.

“Class A Available Subordinated Amount of Class D notes” means, for any tranche of Class A notes, forany Distribution Date, an amount equal to the Class A Required Subordinated Amount of Class D notes minusthe Class A Usage Amount of Class D notes, each for that tranche of Class A notes as of that Distribution Date.

“Class A Available Subordinated Amount of Subordinated notes” means, for any tranche of Class A notes,for any Distribution Date, an amount equal to the Class A Required Subordinated Amount of Subordinated notesminus the Class A Usage Amount of Subordinated notes, each for that tranche of Class A notes as of thatDistribution Date.

“Class A Required Subordinated Amount of Class B notes” is defined in “The Notes—RequiredSubordinated Amount and Usage” in this prospectus.

“Class A Required Subordinated Amount of Class C notes” is defined in “The Notes—RequiredSubordinated Amount and Usage” in this prospectus.

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“Class A Required Subordinated Amount of Class D notes” is defined in “The Notes—RequiredSubordinated Amount and Usage” in this prospectus.

“Class A Required Subordinated Amount of Subordinated notes” is defined in “The Notes—RequiredSubordinated Amount and Usage” in this prospectus.

“Class A Usage Amount of Class B notes” means, for any tranche of Class A notes, on any DistributionDate, an amount, not to exceed the Class A Required Subordinated Amount of Class B notes, equal to the excess,if any, of the Class A Usage Amount of Subordinated notes over the sum of the Class A Required SubordinatedAmount of Class C notes and the Class A Required Subordinated Amount of Class D notes, in each case for thatDistribution Date, in each case, for that tranche of Class A notes.

“Class A Usage Amount of Class C notes” means, for any tranche of Class A notes for any DistributionDate, an amount, not to exceed the Class A Required Subordinated Amount of Class C notes, equal to the excess,if any, of the Class A Usage Amount of Subordinated notes over the Class A Required Subordinated Amount ofClass D notes, in each case, for that tranche of Class A notes.

“Class A Usage Amount of Class D notes” means, for any tranche of Class A notes for any DistributionDate, an amount, not to exceed the Class A Required Subordinated Amount of Class D notes for such tranche ofClass A notes, equal to the Class A Usage Amount of Subordinated notes.

“Class A Usage Amount of Subordinated notes” means, for any tranche of outstanding Class A notes, zeroon the date of issuance of such tranche and on any Distribution Date thereafter the Class A Usage Amount ofSubordinated notes as of the preceding date of determination for such tranche, plus the sum of the followingamounts (in each case, such amount shall not exceed the Class A Available Subordinated Amount ofSubordinated notes for such tranche after giving effect to the previous clauses, if any):

• an amount equal to (i) the aggregate amount of charge-offs from uncovered defaults initially allocated tothe Class B notes on that date as described in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs—Initial Allocation” in thisprospectus times (ii) the Class A Available Subordinated Amount of Class B notes for such tranche ofClass A notes divided by the aggregate Nominal Liquidation Amount of the Class B notes at the end ofthe prior month; plus

• an amount equal to (i) the aggregate amount of charge-offs from uncovered defaults initially allocated tothe Class C notes on that date as described in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs—Initial Allocation” in thisprospectus times (ii) the Class A Available Subordinated Amount of Class C notes for such tranche ofClass A notes divided by the aggregate Nominal Liquidation Amount of the Class C notes at the end ofthe prior month; plus

• an amount equal to (i) the aggregate amount of charge-offs from uncovered defaults initially allocated tothe Class D notes on that date as described in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs—Initial Allocation” in thisprospectus times (ii) the Class A Available Subordinated Amount of Class D notes for such tranche ofClass A notes divided by the aggregate Nominal Liquidation Amount of the Class D notes at the end ofthe prior month; plus

• the aggregate amount reallocated on that date from such tranche of Class A notes to the Class B notes,Class C notes or Class D notes as described in “Deposit and Application of Funds for Card SeriesNotes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs—Reallocation fromClass A Notes” in this prospectus; plus

• the aggregate amount of Card series Principal Amounts allocated on that date to the interest fundingsub-account of such tranche of Class A notes as described in “Deposit and Application of Funds for Card

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Series Notes—Application of Card Series Principal Amounts—Class A Interest Funding AccountShortfalls” in this prospectus; plus

• an amount equal to (i) an amount, not less than zero, equal to the aggregate amount allocated on that dateto the Class C notes as described in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Reallocations—Class B Interest FundingAccount Shortfalls” in this prospectus minus the aggregate amount reallocated on that date to the Class Dnotes as described in that section times (ii) the Class A Available Subordinated Amount of Class C notesfor such tranche of Class A notes divided by the aggregate Nominal Liquidation Amount of the Class Cnotes, in each case, after giving effect to the applications described in “Deposit and Application of Fundsfor the Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs” in this prospectus; plus

• an amount equal to (i) the aggregate amount allocated on that date to the Class D notes as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class B Interest Funding Account Shortfalls” in thisprospectus or reallocated on that date to the Class D notes as described in that section times (ii) theClass A Available Subordinated Amount of Class D notes divided by the aggregate Nominal LiquidationAmount of the Class D notes, in each case, after giving effect to the applications described in “Depositand Application of Funds for Card Series Notes—Allocations of Reductions of Nominal LiquidationAmounts from Charge-Offs” in this prospectus; plus

‰ an amount equal to (i) the aggregate amount allocated on that date to the Class D notes as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class C Interest Funding Account Shortfalls” in this prospectustimes (ii) the Class A Available Subordinated Amount of Class D notes for such tranche of Class A notesdivided by the aggregate Nominal Liquidation Amount of the Class D notes, in each case, after giving effectto the applications described in “Deposit and Application of Funds for Card Series Notes—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs” in this prospectus; plus

• the aggregate amount of Card series Principal Amounts paid to the servicer on that date as described in“Deposit and Application of Funds for Card Series Notes—Application of Card Series PrincipalAmounts—Class A Servicing Fee Shortfalls” in this prospectus; plus

‰ an amount equal to (i) an amount, not less than zero, equal to the aggregate amount allocated on that date tothe Class C notes as described in “Deposit and Application of Funds for Card Series Notes—Allocations ofReductions of Nominal Liquidation Amounts from Reallocations—Class B Servicing Fee Shortfalls” in thisprospectus, minus the aggregate amount reallocated on that date to the Class D notes as described in thatsection times (ii) the Class A Available Subordinated Amount of Class C notes for such tranche of Class Anotes divided by the aggregate Nominal Liquidation Amount of the Class C notes, in each case, after givingeffect to the applications described in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs” in this prospectus; plus

• an amount equal to (i) the aggregate amount allocated on that date to the Class D notes as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class B Servicing Fee Shortfalls” in this prospectus orreallocated on that date to the Class D notes as described in that section times (ii) the Class A AvailableSubordinated Amount of Class D notes for such tranche of Class A notes divided by the aggregateNominal Liquidation Amount of the Class D notes, in each case, after giving effect to the applicationsdescribed in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions ofNominal Liquidation Amounts from Charge-Offs” in this prospectus; plus

• an amount equal to (i) the aggregate amount allocated on that date to the Class D notes as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class C Servicing Fee Shortfalls” in this prospectus times

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(ii) the Class A Available Subordinated Amount of Class D notes for such tranche of Class A notesdivided by the aggregate Nominal Liquidation Amount of the Class D notes, in each case, after givingeffect to the applications described in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs” in this prospectus; minus

• an amount (not to exceed the Class A Usage Amount of Class B notes for such tranche of Class A notesafter giving effect to the amounts computed above) equal to (i) the aggregate Nominal LiquidationAmount Deficits of all Class B notes which are reimbursed on such Distribution Date times (ii) theClass A Usage Amount of Class B notes (prior to giving effect to any reimbursement of NominalLiquidation Amount Deficits on such Distribution Date) for such tranche of Class A notes divided by theaggregate Nominal Liquidation Amount Deficits (prior to giving effect to such reimbursement) of allClass B notes; minus

• an amount (not to exceed the Class A Usage Amount of Class C notes for such tranche of Class A notesafter giving effect to the amounts computed above) equal to (i) the aggregate Nominal LiquidationAmount Deficits of all Class C notes which are reimbursed on such Distribution Date times (ii) theClass A Usage Amount of Class C notes (prior to giving effect to any reimbursement of NominalLiquidation Amount Deficits on such Distribution Date) for such tranche of Class A notes divided by theaggregate Nominal Liquidation Amount Deficits (prior to giving effect to such reimbursement) of allClass C notes; minus

• an amount (not to exceed the Class A Usage Amount of Class D notes for such tranche of Class A notesafter giving effect to the amounts computed above) equal to (i) the aggregate Nominal LiquidationAmount Deficits of all Class D notes which are reimbursed on such Distribution Date times (ii) theClass A Usage Amount of Class D notes (prior to giving effect to any reimbursement of NominalLiquidation Amount Deficits on such Distribution Date) for such tranche of Class A notes divided by theaggregate Nominal Liquidation Amount Deficits (prior to giving effect to such reimbursement) of allClass D notes.

“Class B Available Subordinated Amount of Class C notes” means, for any tranche of Class B notes, for anyDistribution Date, an amount equal to the Class B Required Subordinated Amount of Class C notes minus theClass B Usage Amount of Class C notes, each for that tranche of Class B notes as of that Distribution Date.

“Class B Available Subordinated Amount of Class D notes” means, for any tranche of Class B notes, forany Distribution Date, an amount equal to the Class B Required Subordinated Amount of Class D notes minusthe Class B Usage Amount of Class D notes, each for that tranche of Class B notes as of that Distribution Date.

“Class B Available Subordinated Amount of Subordinated notes” means, for any tranche of Class B notes,for any Distribution Date, an amount equal to the Class B Required Subordinated Amount of Subordinated notesminus the Class B Usage Amount of Subordinated notes, each for that tranche of Class B notes as of thatDistribution Date.

“Class B Principal Allocation” means for any month an amount equal to the Principal Amounts allocated tothe Card series for such month times the sum of the Principal Allocation Amounts for such month for all Class Bnotes in the Card series divided by the sum of the Principal Allocation Amounts for such month for all Cardseries notes.

“Class B Required Subordinated Amount of Class C notes” is defined in “The Notes—RequiredSubordinated Amount and Usage” in this prospectus.

“Class B Required Subordinated Amount of Class D notes” is defined in “The Notes—RequiredSubordinated Amount and Usage” in this prospectus.

“Class B Required Subordinated Amount of Subordinated notes” is defined in “The Notes—RequiredSubordinated Amount and Usage” in this prospectus.

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“Class B Usage Amount of Class C notes” means, for any tranche of Class B notes for any DistributionDate, an amount, not to exceed the Class B Required Subordinated Amount of Class C notes, equal to the excess,if any, of the Class B Usage Amount of Subordinated notes over the Class B Required Subordinated Amount ofClass D notes, in each case, for that tranche of Class B notes.

“Class B Usage Amount of Class D notes” means, for any tranche of Class B notes for any DistributionDate, an amount, not to exceed the Class B Required Subordinated Amount of Class D notes, equal to the ClassB Usage Amount of Subordinated notes, in each case, for that tranche of Class B notes.

“Class B Usage Amount of Subordinated notes” means, for any tranche of outstanding Class B notes, zeroon the date of issuance of such tranche and on any Distribution Date thereafter the Class B Usage Amount ofSubordinated notes as of the preceding date of determination for such tranche, plus the sum of the followingamounts (in each case, such amount shall not exceed the Class B Available Subordinated Amount ofSubordinated notes for such tranche after giving effect to the previous clauses, if any):

• an amount equal to (i) the aggregate amount of charge-offs from uncovered defaults initially allocated tothe Class C notes on that date as described in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs—Initial Allocation” in thisprospectus times (ii) the Class B Available Subordinated Amount of Class C notes for such tranche ofClass B notes divided by the aggregate Nominal Liquidation Amount of the Class C notes, in each case,after giving effect to the applications described in “Deposit and Application of Funds for Card SeriesNotes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs—Reallocation fromClass A Notes” in this prospectus; plus

• an amount equal to (i) the aggregate amount of charge-offs reallocated on that date from all Class A noteswith a Class A Required Subordinated Amount of Class B notes greater than zero to the Class C notes asdescribed in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions ofNominal Liquidation Amounts from Charge-Offs—Reallocation from Class A Notes” in this prospectustimes (ii) the Class B Available Subordinated Amount of Class C notes for such tranche of Class B notesdivided by the aggregate Class B Available Subordinated Amount of Class C notes for all tranches ofClass B notes in the Card series, in each case, after giving effect to the applications described in “Depositand Application of Funds for Card Series Notes—Allocations of Reductions of Nominal LiquidationAmounts from Charge-Offs—Reallocation from Class A Notes” in this prospectus; plus

‰ an amount equal to (i) the aggregate amount of charge-offs allocated to the Class D notes on that date asdescribed in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions ofNominal Liquidation Amounts from Charge-Offs—Initial Allocation” in this prospectus times (ii) theClass B Available Subordinated Amount of Class D notes for such tranche of Class B notes divided by theaggregate Nominal Liquidation Amount of the Class D notes, in each case, after giving effect to theapplications described in “Deposit and Application of Funds for Card Series Notes—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs—Reallocation from Class A Notes” in thisprospectus; plus

• an amount equal to (i) the aggregate amount of charge-offs reallocated on that date from the Class Anotes with a Class A Required Subordinated Amount of Class B notes greater than zero to the Class Dnotes as described in “Deposit and Application of Funds for Card Series Notes—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs—Reallocation from Class A Notes” in thisprospectus times (ii) the Class B Available Subordinated Amount of Class D notes for such tranche ofClass B notes divided by the aggregate Class B Available Subordinated Amount of Class D notes for alltranches of Class B notes in the Card series, in each case, after giving effect to the applications describedin “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Charge-Offs—Reallocation from Class A Notes” in this prospectus; plus

• the aggregate amount of charge-offs reallocated from such tranche of Class B notes to the Class C notesor Class D notes on that date as described in “Deposit and Application of Funds for Card Series Notes—

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Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs—Reallocation from Class BNotes” in this prospectus; plus

• an amount equal to (i) the aggregate amount allocated to the Class C notes for Class A notes with aClass A Required Subordinated Amount of Class B notes greater than zero on that date as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class A Interest Funding Account Shortfalls” in thisprospectus times (ii) the Class B Available Subordinated Amount of Class C notes for such tranche ofClass B notes divided by the aggregate Class B Available Subordinated Amount of Class C notes for alltranches of Class B notes in the Card series, in each case, after giving effect to the applications describedin “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Charge-Offs” in this prospectus; plus

• an amount equal to (i) the aggregate amount allocated to the Class D notes for Class A notes with aClass A Required Subordinated Amount of Class B notes greater than zero on that date as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class A Interest Funding Account Shortfalls” in thisprospectus times (ii) the Class B Available Subordinated Amount of Class D notes for such tranche ofClass B notes divided by the aggregate Class B Available Subordinated Amount of Class D notes for alltranches of Class B notes in the Card series, in each case, after giving effect to the applications describedin “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Charge-Offs” in this prospectus; plus

• the aggregate amount reallocated from such tranche of Class B notes to the Class C notes and Class Dnotes on that date as described in “Deposit and Application of Funds for Card Series Notes—Allocationsof Reductions of Nominal Liquidation Amounts from Reallocations—Class A Interest Funding AccountShortfalls” in this prospectus; plus

• the aggregate amount of Card series Principal Amounts allocated to the interest funding subaccount ofsuch tranche of Class B notes on that date as described in “Deposit and Application of Funds for CardSeries Notes—Application of Card Series Principal Amounts—Class B Interest Funding AccountShortfalls” in this prospectus; plus

• an amount equal to (i) the aggregate amount allocated to the Class D notes on that date as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class C Interest Funding Account Shortfalls” in thisprospectus times (ii) the Class B Available Subordinated Amount of Class D notes for such tranche ofClass B notes divided by the aggregate Nominal Liquidation Amount of the Class D notes, in each case,after giving effect to the applications described in “Deposit and Application of Funds—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs” in this prospectus and in the first fiveclauses of “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions ofNominal Liquidation Amounts from Reallocations” in this prospectus; plus

• an amount equal to (i) the aggregate amount allocated to the Class C notes for Class A notes with aClass A Required Subordinated Amount of Class B notes greater than zero on that date as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class A Servicing Fee Shortfalls” in this prospectus times(ii) the Class B Available Subordinated Amount of Class C notes for such tranche of Class B notesdivided by the aggregate Class B Available Subordinated Amount of Class C notes for all tranches ofClass B notes in the Card series, in each case, after giving effect to the applications described in “Depositand Application of Funds for Card Series Notes—Allocations of Reductions of Nominal LiquidationAmounts from Charge-Offs” in this prospectus and in the first six clauses of “Deposit and Application ofFunds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts fromReallocations” in this prospectus; plus

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• an amount equal to (i) the aggregate amount allocated to the Class D notes for Class A notes with aClass A Required Subordinated Amount of Class B notes on that date as described in “Deposit andApplication of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amountsfrom Reallocations—Class A Servicing Fee Shortfalls” in this prospectus greater than zero times (ii) theClass B Available Subordinated Amount of Class D notes for such tranche of Class B notes divided by theaggregate Class B Available Subordinated Amount of Class D notes for all tranches of Class B notes inthe Card series, in each case, after giving effect to the applications described in “Deposit and Applicationof Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts fromCharge-Offs” in this prospectus and in the first six clauses of “Deposit and Application of Funds forCard Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Reallocations” inthis prospectus; plus

• the aggregate amount reallocated from such tranche of Class B notes to the Class C notes and Class Dnotes to cover servicing fee shortfalls on that date as described in “Deposit and Application of Funds forCard Series Notes— Allocations of Reductions of Nominal Liquidation Amounts from Reallocations—Class A Servicing Fee Shortfalls” in this prospectus; plus

• the aggregate amount of Card series Principal Amounts paid to the servicer to cover servicing feeshortfalls on that date as described in “Deposit and Application of Funds for Card Series Notes—Application of Card Series Principal Amounts—Class B Servicing Fee Shortfalls” in this prospectus; plus

• an amount equal to (i) the aggregate amount allocated to the Class D notes on that date as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class C Servicing Fee Shortfalls” in this prospectus times(ii) the Class B Available Subordinated Amount of Class D notes for such tranche of Class B notesdivided by the aggregate Nominal Liquidation Amount of the Class D notes, in each case, after givingeffect to the applications described in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs” in this prospectus and inthe first eleven clauses of “Deposit and Application of Funds—Allocations of Reductions of NominalLiquidation Amounts from Reallocations” in this prospectus; minus

• an amount (not to exceed the Class B Usage Amount of Class C notes for such tranche of Class B notesafter giving effect to the amounts computed above) equal to (i) the aggregate Nominal LiquidationAmount Deficits of all Class C notes which are reimbursed on such Distribution Date times (ii) the ClassB Usage Amount of Class C notes (prior to giving effect to any reimbursement of Nominal LiquidationAmount Deficits on such Distribution Date) for such tranche of Class B notes divided by the aggregateNominal Liquidation Amount Deficits (prior to giving effect to such reimbursement) of all Class C notes;minus

• an amount (not to exceed the Class B Usage Amount of Class D notes for such tranche of Class B notesafter giving effect to the amounts computed above) equal to (i) the aggregate Nominal LiquidationAmount Deficits of all Class D notes which are reimbursed on such Distribution Date times (ii) the ClassB Usage Amount of Class D notes (prior to giving effect to any reimbursement of Nominal LiquidationAmount Deficits on such Distribution Date) for such tranche of Class B notes divided by the aggregateNominal Liquidation Amount Deficits (prior to giving effect to such reimbursement) of all Class D notes.

“Class C Available Subordinated Amount of Class D notes” means, for any tranche of Class C notes, forany Distribution Date, an amount equal to the Class C Required Subordinated Amount of Class D notes minusthe Class C Usage Amount of Class D notes, each for that tranche of Class C notes as of that Distribution Date.

“Class C Principal Allocation” means for any month an amount equal to the Principal Amounts allocated tothe Card series for such month times the sum of the Principal Allocation Amounts for such month for all Class Cnotes in the Card series divided by the sum of the Principal Allocation Amounts for such month for all Cardseries notes.

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“Class C Required Subordinated Amount of Class D notes” is defined in “The Notes—RequiredSubordinated Amount and Usage” in this prospectus.

“Class C Usage Amount of Class D notes” means, for any tranche of Class C notes, for any DistributionDate:

• an amount equal to (i) the aggregate amount of charge-offs allocated to the Class D notes on that date asdescribed in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions ofNominal Liquidation Amounts from Charge-Offs—Initial Allocation” in this prospectus times (ii) theClass C Available Subordinated Amount of Class D notes for such tranche of Class C notes divided by theaggregate Nominal Liquidation Amount of the Class D notes, in each case, after giving effect to theapplications described in “Deposit and Application of Funds for Card Series Notes—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs—Reallocation from Class A Notes” in thisprospectus; plus

• an amount equal to (i) the aggregate amount of charge-offs reallocated from the Class A notes or theClass B notes to the Class D notes on that date as described in “Deposit and Application of Funds forCard Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs—Reallocation from Class B Notes” in this prospectus times (ii) the Class C Available SubordinatedAmount of Class D notes for such tranche of Class C notes divided by the aggregate Class C AvailableSubordinated Amount of Class D notes for all tranches of Class C notes in the Card series, in each case,after giving effect to the applications described in “Deposit and Application of Funds for Card SeriesNotes—Allocations of Reductions of Nominal Liquidation Amounts from Charge-Offs—Reallocation fromClass A Notes” in this prospectus; plus

• the aggregate amount of charge-offs reallocated from such tranche of Class C notes to the Class D noteson that date as described in “Deposit and Application of Funds for Card Series Notes—Allocations ofReductions of Nominal Liquidation Amounts from Charge-Offs—Reallocation from Class C Notes” in thisprospectus; plus

• an amount equal to (i) the aggregate amount allocated or reallocated to the Class D notes on that date asdescribed in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions ofNominal Liquidation Amounts from Reallocations—Class A Interest Funding Account Shortfalls” in thisprospectus and (ii) the Class C Available Subordinated Amount of Class D notes for such tranche of ClassC notes divided by the aggregate Class C Available Subordinated Amount of Class D notes for alltranches of Class C notes in the Card series, in each case, after giving effect to the applications describedin “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Charge-Offs” in this prospectus; plus

• an amount equal to the aggregate amount reallocated from such tranche of Class C notes to the Class Dnotes on that date as described in “Deposit and Application of Funds for Card Series Notes—Allocationsof Reductions of Nominal Liquidation Amounts from Reallocations—Class A Interest Funding AccountShortfalls” in this prospectus; plus

• an amount equal to (i) the aggregate amount allocated to the Class D notes on that date as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class B Interest Funding Account Shortfalls” in thisprospectus times (ii) the Class C Available Subordinated Amount of Class D notes for such tranche ofClass C notes divided by the aggregate Class C Available Subordinated Amount of Class D notes for alltranches of Class C notes in the Card series, in each case, after giving effect to the applications describedin “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Charge-Offs” and “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of Nominal Liquidation Amounts from Reallocations—Class A Interest FundingAccount Shortfalls” in this prospectus; plus

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• an amount equal to the aggregate amount reallocated from such tranche of Class C notes to the Class Dnotes on that date as described in “Deposit and Application of Funds for Card Series Notes—Allocationsof Reductions of Nominal Liquidation Amounts from Reallocations—Class B Interest Funding AccountShortfalls” in this prospectus; plus

• the aggregate amount of Card series Principal Amounts allocated to the interest funding subaccount ofsuch tranche of Class C notes on that date as described in “Deposit and Application of Funds for CardSeries Notes—Application of Card Series Principal Amounts—Class C Interest Funding AccountShortfalls” in this prospectus; plus

• an amount equal to (i) the aggregate amount allocated or reallocated to the Class D notes on that date asdescribed in “Deposit and Application of Funds for Card Series Notes—Allocations of Reductions ofNominal Liquidation Amounts from Reallocations—Class A Servicing Fee Shortfalls” in this prospectustimes (ii) the Class C Available Subordinated Amount of Class D notes for such tranche of Class C notesdivided by the aggregate Class C Available Subordinated Amount of Class D notes for all tranches ofClass C notes in the Card series, in each case, after giving effect to the applications described in “Depositand Application of Funds for Card Series Notes—Allocations of Reductions of Nominal LiquidationAmounts from Charge-Offs” and “Deposit and Application of Funds for Card Series Notes—Allocationsof Reductions of Nominal Liquidation Amounts from Reallocations—Class C Interest Funding AccountShortfalls” in this prospectus; plus

• an amount equal to the aggregate amount reallocated from such tranche of Class C notes to the Class Dnotes on that date as described in “Deposit and Application of Funds for Card Series Notes—Allocationsof Reductions of Nominal Liquidation Amounts from Reallocations—Class A Servicing Fee Shortfalls” inthis prospectus; plus

• an amount equal to (i) the aggregate amount allocated to the Class D notes on that date as described in“Deposit and Application of Funds for Card Series Notes—Allocations of Reductions of NominalLiquidation Amounts from Reallocations—Class B Servicing Fee Shortfalls” in this prospectus times(ii) the Class C Available Subordinated Amount of Class D notes for such tranche of Class C notesdivided by the aggregate Class C Available Subordinated Amount of Class D notes for all tranches ofClass C notes in the Card series, in each case, after giving effect to the applications described in “Depositand Application of Funds for Card Series Notes—Allocations of Reductions of Nominal LiquidationAmounts from Reallocations—Class A Servicing Fee Shortfalls” in this prospectus; plus

• an amount equal to the aggregate amount reallocated from such tranche of Class C notes to the Class Dnotes on that date as described in “Deposit and Application of Funds for Card Series Notes—Allocationsof Reductions of Nominal Liquidation Amounts from Reallocations—Class B Servicing Fee Shortfalls” inthis prospectus; plus

• the aggregate amount of Card series Principal Amounts paid to the servicer on that date as described in“Deposit and Application of Funds for Card Series Notes—Application of Card Series PrincipalAmounts—Class C Servicing Fee Shortfalls” in this prospectus; minus

• an amount (not to exceed the Class C Usage Amount of Class D notes for such tranche of Class C notesafter giving effect to the amounts computed above) equal to (i) the aggregate Nominal LiquidationAmount Deficits of all Class D notes which are reimbursed on such Distribution Date times (ii) the ClassC Usage Amount of Class D notes (prior to giving effect to any reimbursement of Nominal LiquidationAmount Deficits on such Distribution Date) for such tranche of Class C notes divided by the aggregateNominal Liquidation Amount Deficits (prior to giving effect to such reimbursement) of all Class D notes.

“Class D Principal Allocation” means, for any month, an amount equal to the Principal Amounts allocatedto the Card series for such month times the sum of the Principal Allocation Amounts for such month for all ClassD Card series notes divided by the sum of the Principal Allocation Amounts for such month for all Card seriesnotes.

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“Default Amounts” means:

• for credit card receivables held directly in COMET, the aggregate amount of principal receivables otherthan ineligible receivables in Defaulted Accounts during the month such account became a DefaultedAccount for each day in the month; and

• for any collateral certificate held by COMET, the aggregate default amount in the related master trust orsecuritization special purpose entity allocated to the holder of the collateral certificate for that month.

“Defaulted Accounts” means accounts, the credit card receivables of which have been written off asuncollectible by the applicable servicer.

“Defaulted Receivables” for any month are principal receivables that were charged off as uncollectible insuch month in accordance with the bank’s (or its affiliates’) lending guidelines and the applicable servicer’scustomary and usual servicing procedures for servicing credit card and other revolving credit account receivablescomparable to the receivables other than due to any Adjustment Payment. For purposes of this definition, aprincipal receivable in any account becomes a Defaulted Receivable on the day it is recorded as charged-off onsuch servicer’s computer master file of revolving credit accounts.

“Definitive Notes” means notes in definitive, fully registered form.

“Distribution Date” means the 15th day of each calendar month (or, if such 15th day is not a Business Day,the next succeeding Business Day).

“Eligible Account” means a MasterCard or Visa revolving credit card account or other revolving creditaccount owned by the bank or an affiliate:

• is in existence and maintained by the bank or an affiliate;

• is payable in United States dollars;

• has not been identified as an account the credit cards or checks, if any, which have been lost or stolen;

• the accountholder of which has provided, as his or her most recent billing address, an address located inthe United States (or its territories or possessions or a military address);

• has not been, and does not have any receivables which have been, sold, pledged, assigned or otherwiseconveyed to any person (except pursuant to the receivables purchase agreements or the poolingagreement);

• except as provided below, does not have any receivables which are Defaulted Receivables;

• does not have any receivables which have been identified as having been incurred as a result of thefraudulent use of any related credit card or check;

• relates to an accountholder who is not identified by the bank or an affiliate or the transferor in itscomputer files as being the subject of a voluntary or involuntary bankruptcy proceeding; and

• is not an account which the accountholder has requested discontinuance of responsibility;

in each case, as of its date of designation to the trustee under the pooling agreement. Eligible Accounts mayinclude accounts, the receivables of which have been written off; provided that:

• the balance of all receivables included in such accounts is reflected on the books and records of thetransferor (and is treated for purposes of the pooling agreement) as “zero,” and

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• charging privileges with respect to all such accounts have been canceled in accordance with the bank’s oran affiliate’s lending guidelines and will not be reinstated by the bank or an affiliate or the servicer.

“Eligible Deposit Account” means either:

• a segregated account with an Eligible Institution (other than the bank or an affiliate), or

• a segregated trust account with the corporate trust department of a depository institution (other than thebank or an affiliate) organized under the laws of the United States or any one of the states thereof, or theDistrict of Columbia (or any domestic branch of a foreign bank), or a trust company acceptable to eachrating agency, and acting as a trustee for funds deposited in such account, so long as any of the securitiesof such depository institution or trust company shall have a credit rating from each rating agency in oneof its generic credit rating categories that signifies investment grade.

“Eligible Institution” means either:

• a depository institution (which may be the master trust trustee) organized under the laws of the UnitedStates or any one of the states thereof, or the District of Columbia, or any domestic branch of a foreignbank, which at all times:

—has either (x) a long-term unsecured debt rating of A2 or better by Moody’s Investors Service, Inc. or(y) a certificate of deposit rating of P-1 by Moody’s;

—has either (x) a long-term unsecured debt rating of AAA by Standard & Poor’s Ratings Services or (y) acertificate of deposit rating of A-1+ by Standard & Poor’s;

—if rated by Fitch, Inc. has either (x) a long-term unsecured debt rating of A– or better by Fitch or (y) acertificate of deposit rating of F1 or better by Fitch; and

—is a member of the FDIC; or

• any other institution that is acceptable to each rating agency.

“Eligible Investments” means:

• obligations fully guaranteed by the United States,

• demand deposits, time deposits or certificates of deposit (having original maturities of no more than 365days) of depository institutions or trust companies incorporated under the laws of the United States or anyone of the states thereof, or the District of Columbia (or any domestic branch of a foreign bank) andsubject to supervision and examination by federal or state banking or depository institution authorities;provided that at the time of the master trust’s or COMET’s, as applicable, investment or contractualcommitment to invest therein, the short-term debt rating of such depository institution or trust companyshall be in the highest rating category from each rating agency,

• commercial paper or other short-term obligations having, at the time of the master trust’s or COMET’s, asapplicable, investment or contractual commitment to invest therein, a rating in the highest rating categoryfrom each rating agency,

• demand deposits, time deposits and certificates of deposit that are fully insured by the FDIC, with anentity the commercial paper of which has a credit rating from each rating agency in its highest ratingcategory,

• notes or bankers’ acceptances (having original maturities of no more than 365 days) issued by anydepository institution or trust company referred to in the second clause above,

• investments in money market funds that have the highest rating from, or have otherwise been approved inwriting by, each rating agency,

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• time deposits (having maturities of not more than 30 days) other than as referred to in the fourth clauseabove, with an entity the commercial paper of which has a credit rating from each rating agency in itshighest rating category, or

• any other investments approved in writing by each rating agency; provided that, with respect to COMET,Eligible Investments shall not include any obligation of the bank or an affiliate.

“Eligible Receivable” means each receivable:

• which has arisen in an Eligible Account;

• which was created in compliance in all material respects with the bank’s or an affiliate’s lendingguidelines and all applicable requirements of law, the failure to comply with which would have amaterial adverse effect on investor certificateholders (including the noteholders as holder of the COMTcollateral certificate), and pursuant to a lending agreement which complies with all requirements of lawapplicable to the bank or an affiliate, the failure to comply with which would have a material adverseeffect on investor certificateholders (including the noteholders as holder of the COMT collateralcertificate);

• with respect to which all material consents, licenses, approvals or authorizations of, or registrations ordeclarations with, any governmental authority required to be obtained or given by the bank or anaffiliate in connection with the creation of such receivable or the execution, delivery and performanceby the bank or an affiliate of the related lending agreement have been duly obtained or given and are infull force and effect as of the date of the creation of such receivable;

• as to which, at the time of its transfer to the master trust trustee, the transferor or the master trust willhave good and marketable title, free and clear of all liens and security interests (including a prior lienor security interest of the bank or an affiliate, but other than any lien for municipal or other local taxesif such taxes are not then due and payable or if the transferor is then contesting the validity thereof ingood faith by appropriate proceedings and has set aside on its books adequate reserves with respectthereto);

• which has been the subject of either:

—a valid transfer and assignment from the transferor to the master trust trustee of all its right, title andinterest therein (including any proceeds thereof), or

—the grant of a first priority perfected security interest therein (and in the proceeds thereof), effectiveuntil the termination of the master trust;

• which at and after the time of transfer to the master trust trustee is the legal, valid and binding paymentobligation of the accountholder thereof, legally enforceable against such accountholder in accordancewith its terms (with certain bankruptcy and equity-related exceptions);

• which constitutes an “account” under Article 9 of the New York UCC and the Virginia UCC;

• which, at the time of its transfer to the master trust trustee, has not been waived or modified;

• which, at the time of its transfer to the master trust trustee, is not subject to any right of rescission,setoff, counterclaim or other defense of the accountholder (including the defense of usury), other thancertain bankruptcy and equity-related defenses;

• as to which, at the time of its transfer to the master trust trustee, the transferor has satisfied allobligations on its part to be fulfilled; and

• as to which, at the time of its transfer to the master trust trustee, the transferor has not taken any actionwhich, or failed to take any action the omission of which, would, at the time of its transfer to the mastertrust trustee, impair in any material respect the rights of the master trust or investor certificateholderstherein.

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“Excess Finance Charge Sharing Group A” means the various series of notes—which will include the Cardseries—that have been designated as a single group for the purpose of sharing excess Finance Charge Amounts.

“Excess Finance Charges” has the meaning described in “The Master Trust—Sharing of Excess FinanceCharges.”

“Excess Spread Amounts” means, for the Card series notes for any month, an amount equal to the Cardseries Finance Charge Amounts (exclusive of any shared excess Finance Charge Amounts allocated to the Cardseries), minus the aggregate amount required to be applied as described in the first seven applications of “Depositand Application of Funds for Card Series Notes—Application of Card Series Finance Charge Amounts” in thisprospectus.

“Excess Spread Percentage” means, for any month, an amount equal to the Portfolio Yield for that monthminus the Base Rate for that month.

“Expected Principal Payment Date” means, regarding any series, class or tranche of notes, the scheduleddue date of any payment of principal on those notes, as specified in the related prospectus supplement, or if suchday is not a Business Day, the next following Business Day, unless such day is in the next calendar month, inwhich case the Expected Principal Payment Date, unless otherwise specified in the related prospectussupplement, will be the last Business Day of the current calendar month.

“Finance Charge Amounts” means, for any month,

• for a collateral certificate included in COMET, the amount of Finance Charge Collections in the relatedmaster trust or other securitization special purpose entity allocated and paid to such collateralcertificate for such month;

• the Finance Charge Amounts for each collateral certificate in COMET for such month, plus any otheramounts or allocable portion thereof to be treated as Finance Charge Amounts for COMET; and

• for any series, class or tranche of notes in COMET, the portion of the Finance Charge Amountsallocated and paid to COMET which are then allocated and paid to such series, class or tranche, asapplicable, plus any other amounts, or allocable portion thereof, to be treated as Finance ChargeAmounts for such series, class or tranche as described in the applicable prospectus supplement.

“Finance Charge Collections” means, for any month,

• all collections received by the applicable servicer on behalf of COMET of periodic finance charges,annual membership fees, cash advance fees, late fees, overlimit fees, return check fees and similar feesand charges and discount receivables and interchange on accounts designated to have their receivablestransferred to COMET, plus amounts allocated to each collateral certificate in COMET that are to betreated as Finance Charge Collections, plus any other amounts which are to be treated as FinanceCharge Collections; and

• for a master trust or other securitization special purpose entity which has transferred a collateralcertificate to COMET, all collections received by the applicable servicer on behalf of such master trustor other securitization special purpose entity of periodic finance charges, annual membership fees, cashadvance fees, late fees, overlimit fees, return check fees and similar fees and charges and discountreceivables and interchange on accounts designated to have their receivables transferred to such mastertrust or other securitization special purpose entity, plus any other amounts which are to be treated asFinance Charge Collections with respect to such master trust or other securitization special purposeentity.

“Floating Allocation Amount” means, for any month, for any class or tranche of Card series notes, the sumof:

• the Nominal Liquidation Amount of such class or tranche of Card series notes as of the last day of thepreceding month, or for the first month for any class or tranche of notes, the initial outstanding dollarprincipal amount of such class or tranche, plus

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• the aggregate amount of any increase in the Nominal Liquidation Amount of that class or tranche ofnotes during the current month due to the issuance of additional notes of such class or tranche, if suchnotes are discount notes, accretions of principal on such class or tranche of notes, or the release ofprefunding excess amounts for such class or tranche of notes from the applicable principal fundingsubaccount.

The Floating Allocation Amount for the Card series for any month is the sum of the Floating AllocationAmounts for all tranches of Card series notes for that month.

“Floating Allocation Percentage” means, for any month,

• for the COMT collateral certificate, the percentage equivalent (which percentage shall never exceed100%) of a fraction,

—the numerator of which is the Invested Amount of the COMT collateral certificate as of the end of thelast day of that month; and

—the denominator of which is the sum of the numerators used to calculate the Floating AllocationPercentages for all series of notes in COMET on the last day of the prior month (treating any increasesor decreases in the current month due to additions or removals of accounts as though they had occurredon the last day of the prior month); and

• for each collateral certificate in COMET, except the COMT collateral certificate, the percentageequivalent (which percentage shall never exceed 100%) of a fraction,

—the numerator of which is the Invested Amount of such collateral certificate; and

—the denominator of which is the Principal Balance of its master trust or securitization special purposeentity that issued the collateral certificate; and

• for any series or class of notes, the percentage equivalent (which percentage shall never exceed 100%)of a fraction,

—the numerator of which is the sum of the numerators used to calculate the Floating AllocationPercentage for each tranche of notes in that series or class; and

—the denominator of which is equal to the sum of:

(i) for any collateral certificate outstanding and included in COMET, the numerator used tocalculate the floating allocation percentage for that collateral certificate; plus

(ii) the Average Principal Balance for such month; and

• for any tranche of notes, the percentage equivalent (which percentage shall never exceed 100%) of afraction,

—the numerator of which is the Nominal Liquidation Amount of such tranche on the last day of thepreceding month, or for the first month for any tranche, the initial Nominal Liquidation Amount ofsuch tranche, plus the aggregate amount of any increase in the Nominal Liquidation Amount of thetranche due to (x) the issuance of additional notes in such tranche or (y) the accretion of principal ondiscount notes of such tranche or (z) the release of prefunded amounts, other than prefunded amountsdeposited during such month for such tranche from the principal funding subaccount for such tranche,in each case during such month, provided that for any tranche of notes that will be paid in full on theapplicable payment date for those notes in such month and for any tranche of notes that will have aNominal Liquidation Amount of zero on the applicable payment date for those notes in such month, thenumerator will be zero; and

—the denominator of which is equal to the sum of:

(i) for any collateral certificate outstanding and included in COMET, the numerator used tocalculate the floating allocation percentage for that collateral certificate; plus

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(ii) the Average Principal Balance for such month.

“Ineligible Receivables” means all receivables with respect to an affected account that have been reassignedto the transferor as a result of the transferor’s breach of certain representations, warranties and covenantsdescribed in “The Master Trust—Representations and Warranties.”

“Invested Amount” means, for any date of determination:

• for the COMT collateral certificate, if the only asset in COMET is the COMT collateral certificate, thesum of the Nominal Liquidation Amounts for each series of notes secured by the assets in COMEToutstanding as of such date (excluding any tranche of notes secured by the assets in COMET whichwill be paid in full on the applicable payment date for those notes in the related month and any trancheof notes that will have a Nominal Liquidation Amount of zero on the applicable payment date for thosenotes in the related month) and, otherwise, such amount as may be consented to by the rating agencies;

• for the COMT collateral certificate, if COMET includes assets in addition to the COMT collateralcertificate, an amount (not less than zero) equal to the sum of the Nominal Liquidation Amounts foreach series of notes secured by the assets in COMET outstanding at the end of such date (excludingany tranche of notes secured by the assets in COMET which will be paid in full on the applicablepayment date for those notes in the related month and any tranche of notes that will have a NominalLiquidation Amount of zero on the applicable payment date for those notes in the related month),minus the sum of the Invested Amounts of each of the other collateral certificates in COMET;

• for all other series of investor certificates, the initial outstanding principal amount of the investorinterests of that series, less the amount of principal paid to the related holders of those interests and theamount of unreimbursed charge-offs from uncovered Default Amounts and reallocations of PrincipalCollections; and

• for each collateral certificate (other than the COMT collateral certificate) included in COMET, theamount so designated by the administrator.

“Master Trust Cut-Off Date” means June 30, 1993.

“Master Trust Portfolio” means the credit card accounts selected from the Bank Portfolio the receivables inwhich have been designated to be included in the master trust as of the Master Trust Cut-Off Date and, foradditional accounts, as of the related date of their designation, based on the eligibility criteria set forth in thepooling agreement and which accounts have not been removed from the master trust.

“Master Trust Required Principal Balance” means, as of any date of determination, an amount (not less thanzero) equal to:

• the sum of the initial Invested Amount, as defined in the relevant supplement to the pooling agreement,of the master trust investor certificates of each master trust series outstanding on such date plus, as ofthat date of determination, the aggregate amounts of any increases in the Invested Amounts of eachprefunded master trust series outstanding (in each case, other than any master trust series or portionthereof which is excluded by the relevant master trust supplement), minus

• the principal amount on deposit in the master trust excess funding account on such date; provided,however, if at any time the only master trust series outstanding are excluded and a Pay Out Event hasoccurred for one or more of such series, the Master Trust Required Principal Balance shall mean:

—the sum of the Invested Amount (as defined in the relevant master trust supplement) of eachexcluded series as of the earliest date on which any such Pay Out Event is deemed to have occurred,minus

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—the principal amount on deposit in the master trust excess funding account.

“Master Trust Required Transferor Interest” means an amount equal to the product of the Master TrustRequired Transferor Percentage and the aggregate amount of principal receivables in the master trust.

“Master Trust Required Transferor Percentage” is equal to 5%. However, the transferor may, upon 30 daysprior notice to the master trust trustee, each rating agency and certain providers of series enhancement, reduce theMaster Trust Required Transferor Percentage; provided that:

• the transferor has received written notice from each rating agency that such reduction will not result inthe reduction, qualification or withdrawal of the respective ratings of each rating agency for anyinvestor certificates issued out of the master trust, and

• the transferor has delivered to the master trust trustee and certain providers of series enhancement acertificate of an authorized officer to the effect that, based on the facts known to such officer at thetime, in the reasonable belief of the transferor, such reduction will not, at the time of such certification,cause a Pay Out Event, or an event that, after the giving of notice or the lapse of time, would constitutea Pay Out Event, to occur for any series of investor certificates issued out of the master trust; and

provided further that the Master Trust Required Transferor Percentage will never be less than 2%.

“Master Trust Termination Date” means, unless the servicer and the holder of the Master Trust TransferorInterest instruct otherwise, the earliest of:

• the day following the Distribution Date on which the aggregate Invested Amounts and enhancementinvested amounts, if any, of all series of investor certificates issued by the master trust is zero,

• September 1, 2030, or

• if the receivables in the master trust are sold, disposed of or liquidated following the occurrence of anevent of bankruptcy, insolvency, conservatorship or receivership of the transferor as described under“The Master Trust—Pay Out Events,” immediately following such sale, disposition or liquidation.

“Master Trust Transferor Interest” means the interest in a master trust or other securitization special purposeentity not represented by the investor certificates issued and outstanding under that master trust or securitizationspecial purpose entity or the rights, if any, of any series enhancement providers to receive payments from themaster trust.

“Master Trust Transferor Percentage” means a percentage equal to 100% minus the aggregate investorpercentages and, if applicable, the percentage interest of credit enhancement providers, for all series issued by therelated master trust or securitization special purpose entity that are then outstanding.

“Monthly Interest Accrual Date” means for any outstanding class or tranche of notes:

• each interest payment date for such class or tranche, and

• for any month in which no interest payment date occurs, the date in that month correspondingnumerically to the next interest payment date for that class or tranche of notes, or in the case of a classor tranche of discount notes, the Expected Principal Payment Date for that class or tranche; but

—for the first month in which a class or tranche of notes is issued, the date of issuance of such class ortranche of notes will be the first Monthly Interest Accrual Date for that month for such class or trancheof notes;

—any date on which proceeds from a sale of assets if required under the pooling agreement following thebankruptcy or insolvency of the related transferor or following an event of default and acceleration ofany class or tranche of notes are deposited into the interest funding account for such class or tranche ofnotes will be a Monthly Interest Accrual Date for such series, class or tranche of notes;

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—if there is no such numerically corresponding date in that month, then the Monthly Interest AccrualDate will be the last Business Day of the month; and

—if the numerically corresponding date in such month is not a Business Day for that class or tranche,then the Monthly Interest Accrual Date will be the next following Business Day, unless that BusinessDay would fall in the following month, in which case the Monthly Interest Accrual Date will be the lastBusiness Day of the earlier month.

“Monthly Principal Accrual Date” means for any outstanding class or tranche of notes:

• for any month in which the Expected Principal Payment Date occurs for such class or tranche, suchExpected Principal Payment Date, or if that day is not a Business Day, the next following BusinessDay; and

• for any month in which no Expected Principal Payment Date occurs for such class or tranche, the datein that month corresponding numerically to the Expected Principal Payment Date for that tranche ofnotes (or for any month following the last Expected Principal Payment Date, the date in such monthcorresponding numerically to the preceding Expected Principal Payment Date for such tranche ofnotes); but

—following a Pay Out Event, the second Business Day following such Pay Out Event shall be a MonthlyPrincipal Accrual Date;

—any date on which prefunded excess amounts are released from any principal funding subaccount anddeposited into the principal funding subaccount of any tranche of notes on or after the ExpectedPrincipal Payment Date for such tranche of notes will be a Monthly Principal Accrual Date for suchtranche of notes;

—any date on which proceeds from a sale of assets if required under the pooling agreement following thebankruptcy or insolvency of the related transferor or following an event of default and acceleration ofany class or tranche of notes are deposited into the principal funding account for such class or trancheof notes will be a Monthly Principal Accrual Date for such class or tranche of notes;

—if there is no numerically corresponding date in that month, then the Monthly Principal Accrual Datewill be the last Business Day of the month; and

—if the numerically corresponding date in such month is not a Business Day, the Monthly PrincipalAccrual Date will be the next following Business Day, unless that Business Day would fall in thefollowing month, in which case the Monthly Principal Accrual Date will be the last Business Day ofthe earlier month.

“Monthly Servicing Fee” has the meaning described in “The Master Trust—The Servicer—ServicingCompensation and Payment of Expenses.”

“Nominal Liquidation Amount” has the meaning described in “The Notes—Stated Principal Amount,Outstanding Dollar Principal Amount, Adjusted Outstanding Dollar Principal Amount and Nominal LiquidationAmount—Nominal Liquidation Amount.”

“Nominal Liquidation Amount Deficit” means, for any tranche of notes, the excess, if any, of the AdjustedOutstanding Dollar Principal Amount of the tranche minus the Nominal Liquidation Amount of the tranche.

“Pay Out Events” are the events described in “The Master Trust—Pay Out Events.”

“Performing” means, for any derivative agreement, that no payment default or repudiation by the derivativecounterparty has occurred and such derivative agreement has not been terminated.

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“Portfolio Yield” means, for any month, the annualized percentage equivalent of a fraction:

• the numerator of which is equal to the sum of:

—Finance Charge Amounts allocated to the Card series notes for the related Distribution Date; plus

—the net investment earnings, if any, in the interest funding sub-accounts for notes of the Card seriesnotes on such Distribution Date; plus

—any amounts to be treated as Card series Finance Charge Amounts remaining in interest fundingsub-accounts after a sale of assets as described in “Deposit and Application of Funds for Card SeriesNotes—Sale of Assets” in this prospectus; plus

—any shared excess finance charge amounts from any other series of notes; plus

—the excess, if any, of the shortfalls in the investment earnings on amounts in any principal fundingaccounts for notes of the Card series to pay the interest payable on such amounts over the sum of(i) any withdrawals of amounts from the accumulation reserve subaccount and (ii) any additionalfinance charge collections allocable to the Card series notes, in each case, to cover such shortfalls asdescribed under “Deposit and Application of Funds for Card Series Notes—Card Series FinanceCharge Amounts”; minus

—the Card series Defaulted Amounts for such month; and

• the denominator of which is the Floating Allocation Amount for the Card series for such month.

“Pre-Allocated Amount” means an amount designated by the administrator, on behalf of COMET, for atranche of notes as described in the related prospectus supplement for that tranche of notes.

“Principal Allocation Amount” means, for any month, for any Card series notes:

• for all classes or tranches of Card series notes in a period in which deposits are required to be made inthe related principal funding account, the Nominal Liquidation Amount of such class or tranche prior tothe start of the most recent of such periods for such class or tranche, and

• for all other classes or tranches of outstanding Card series notes, the sum of:

• the Nominal Liquidation Amount of such class or tranche of notes at the end of the prior month, orfor the first month for any class or tranche of notes, the initial outstanding dollar principal amountof such class or tranche, plus

• the aggregate amount of any increase in the Nominal Liquidation Amount of that class or trancheof notes during the current month due to the issuance of additional notes of such class or tranche,if such notes are discount notes, the accretion of principal on such class or tranche of notes, andthe release of prefunding excess amounts for such class or tranche of notes from the applicableprincipal funding subaccount.

Because each tranche of notes is subject to being paired with a future tranche of notes, if an early redemptionevent occurs for a paired tranche of notes during a period in which deposits are required to be made in the relatedprincipal funding account for such tranche of notes, COMET may designate a different Principal AllocationAmount for the paired tranche of notes.

The Principal Allocation Amount for the Card series for any month is the sum of the Principal AllocationAmounts for all Card series notes for that month.

“Principal Allocation Percentage” means, for any month,

• for the COMT collateral certificate, the percentage equivalent (which percentage shall never exceed100%) of a fraction,

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—the numerator of which is either (x), so long as the COMT collateral certificate is the only asset inCOMET, the sum of (excluding any tranche of notes secured by the assets in COMET which will bepaid in full on the applicable payment date for those notes in such month and any tranche of notes thatwill have a Nominal Liquidation Amount of zero on the applicable payment date for those notes insuch month) (a) for all series, classes and tranches of notes secured by the assets in COMET in theirrevolving periods, the sum of the numerators used to calculate the Floating Allocation Percentage forsuch class or tranche of notes; and (b) for all other series, classes and tranches of notes secured by theassets in COMET, the sum of the Nominal Liquidation Amounts of such series, classes and tranches ofnotes at the end of the last day prior to the commencement of the period in which such deposits arerequired or (y) if COMET includes assets in addition to the COMT collateral certificate, an amount(not less than zero) equal to the amount determined pursuant to clause (x) above, minus the sum of theInvested Amounts of each other collateral certificate in COMET; and

—the denominator of which is the sum of the numerators used to calculate the Principal AllocationPercentages for all series of notes in COMET on the last day of the prior month (treating any increasesor decreases in the current month due to additions or removals of accounts as though they had occurredon the last day of the prior month); and

• for any series or class of notes, the percentage equivalent (which percentage shall never exceed 100%)of a fraction,

—the numerator of which is the sum of (a) the sum of the numerators used to calculate the FloatingAllocation Percentage for such month for each tranche of notes in its revolving period in such series orclass; and (b) the sum of the numerators used to calculate the Principal Allocation Percentage for suchmonth for each tranche of notes in its amortization, accumulation or redemption period in such series orclass; and

—the denominator of which is equal to the sum of:

(1) for any collateral certificate outstanding and included in COMET, the numerator used tocalculate the principal allocation percentage for that collateral certificate, plus

(2) the Average Principal Balance for such month; and

• for any tranche of notes, the percentage equivalent (which percentage shall never exceed 100%) of afraction,

—the numerator of which is (a) for a tranche of notes in its revolving period, the numerator used tocalculate the Floating Allocation Percentage for such tranche for such month, minus for certaintranches of notes, if provided for in the related prospectus supplement, an amount equal to thePre-Allocated Amount, if any; or (b) for a tranche of notes in its amortization, accumulation orredemption period, the Nominal Liquidation Amount of such tranche at the end of its revolvingperiod, minus for certain tranches of notes, if provided for in the related prospectus supplement, anamount equal to the Pre-Allocated Amount, if any, or for the first month for any tranche of notes, theinitial Nominal Liquidation Amount of such tranche, plus the aggregate amount of any increase inthe Nominal Liquidation Amount of the tranche due to (x) the issuance of additional notes in thetranche or (y) the accretion of principal on discount notes of such tranches or (z) the release ofprefunded amounts, other than prefunded amounts deposited during such month for such tranchefrom the principal funding subaccount for such tranche, in each case during such month, providedthat for any tranche of notes that will be paid in full on the applicable payment date for those notes insuch month and for any tranche of notes that will have a Nominal Liquidation Amount of zero on theapplicable payment date for those notes in such month, the numerator will be zero; and

—the denominator of which is equal to the sum of:

(1) for any collateral certificate outstanding and included in COMET, the numerator used tocalculate the principal allocation percentage for that collateral certificate, plus

(2) the Average Principal Balance for such month.

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“Principal Amounts” means, for any month,

• for a collateral certificate included in COMET, the amount of Principal Collections in the relatedmaster trust or securitization special purpose entity allocated and paid to such collateral certificate forsuch month;

• the Principal Amounts for each collateral certificate in COMET for such month, plus any otheramounts or allocable portion thereof to be treated as Principal Amounts; and

• for any series, class or tranche of notes, the portion of the Principal Amounts allocated and paid toCOMET which are then allocated and paid to such series, class or tranche, as applicable, plus any otheramounts, or allocable portion thereof, to be treated as Principal Amounts for such series, class ortranche as described in the applicable prospectus supplement.

“Principal Balance” means, as of any date, with respect to a master trust or other securitization specialpurpose entity which has transferred a collateral certificate to COMET, the aggregate amount of principalreceivables in accounts designated to have their receivables transferred to COMET as of such date, plus theaggregate amount on deposit in an applicable excess funding account.

“Principal Collections” means, for any month,

• the sum of all collections other than Finance Charge Collections received by the applicable servicer onbehalf of COMET on accounts designated to have their receivables transferred to COMET, plusamounts allocated to each collateral certificate in COMET that are to be treated as PrincipalCollections, plus any other amounts which are to be treated as Principal Collections; and

• for a master trust or other securitization special purpose entity which has transferred a collateralcertificate to COMET, all collections other than Finance Charge Collections received by the applicableservicer on behalf of such master trust or other securitization special purpose entity on accountsdesignated to have their receivables transferred to COMET, but not including Defaulted Receivables oramounts billed as membership fees, plus any other amounts which are to be treated as PrincipalCollections for such master trust or other securitization special purpose entity.

“Principal Sharing Group A” means the various series of notes—which will include the Card series—thathave been designated as a single group for the purpose of sharing excess principal amounts.

“Required Excess Spread Amount” means, for any month, $0; provided, however, that this amount may bechanged if COMET (i) receives the consent of the rating agencies and (ii) reasonably believes that the changewill not have a material adverse effect on the notes.

“Servicer Default” means any of the following events with respect to the master trust:

(i) failure by the servicer to make any payment, transfer or deposit, or to give instructions or to give noticeto the master trust trustee to make such payment, transfer or deposit, on or before the date the serviceris required to do so under the pooling agreement or any series supplement, which is not cured within a10 Business Day grace period;

(ii) failure on the part of the servicer duly to observe or perform in any material respect any othercovenants or agreements of the servicer in the pooling agreement or any series supplement which has amaterial adverse effect on the investor certificateholders of any series or class (determined withoutregard to the availability of funds under any series enhancement) and which continues unremedied for aperiod of 60 days after written notice has been delivered to the servicer and, in some cases, to thetransferor and the master trust trustee, or the servicer assigns or delegates its duties under the poolingagreement, except as specifically permitted thereunder;

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(iii) any representation, warranty or certification made by the servicer in the pooling agreement or anyseries supplement or in any certificate delivered pursuant to the pooling agreement or any seriessupplement proves to have been incorrect when made, which has a material adverse effect on the rightsof the investor certificateholders of any series or class (determined without regard to the availability offunds under any series enhancement) issued and outstanding under the master trust, and which materialadverse effect continues for a period of 60 days after written notice has been delivered to the servicerand, in some cases, to the transferor and the master trust trustee; or

(iv) the occurrence of certain events of bankruptcy, insolvency or receivership with respect to the servicer.

Notwithstanding the foregoing, a delay in or failure of performance referred to under clause (i) above for anadditional period of 5 Business Days or referred to under clause (ii) or (iii) above for an additional period of 60days shall not constitute a Servicer Default if such delay or failure could not be prevented by the exercise ofreasonable diligence by the servicer and such delay or failure was caused by an act of God or other similaroccurrence.

“Transfer Deposit Amount” means any amount deposited into the master trust excess funding account or themaster trust collection account in connection with the reassignment of an Ineligible Receivable.

“Transferor Interest” means the interest in COMET in excess of the interests securing the notes issued andoutstanding under COMET.

“Transferor Percentage” means 100% minus the sum of the aggregate Floating Allocation Percentage orPrincipal Allocation Percentage, as applicable, of all series of notes outstanding.

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$300,000,000 Class A(2006-8) Card series Notes

Capital One BankSponsor, Servicer and Originator of Assets

Capital One Funding, LLCDepositor and Transferor

Capital One Multi-asset Execution TrustIssuing Entity

PROSPECTUS SUPPLEMENT

Underwriters

Morgan StanleyGoldman, Sachs & Co. Merrill Lynch & Co.

You should rely only on the information contained or incorporated by reference in this prospectussupplement and the accompanying prospectus. We have not authorized anyone to provide you withdifferent information.

We are not offering the notes in any state where the offer is not permitted.

We do not claim the accuracy of the information in this prospectus supplement and the accompanyingprospectus as of any date other than the dates stated on their respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the notes andwith respect to their unsold allotments or subscriptions. In addition, until the date which is 90 days afterthe date of this prospectus supplement, all dealers selling the notes will deliver a prospectus supplementand prospectus. Such delivery obligation may be satisfied by filing the prospectus supplement andprospectus with the Securities and Exchange Commission.

ANNEX E

INDEX OF DEFINED TERMS

Accrual Cessation Date...................................................11 Additional Eligible Collateral .........................................25 Additional Termination Event ........................................23 Agency Bond ..................................................................19 Applicable Portion of Underlying Securities ..................13 Applicable Ratings..........................................................26 Asset-Backed Securities .................................................19 Base Private Placement Memorandum ..............................i Cash Redemption Notification........................................15 Cash Settlement Amount ................................................12 CMBS .............................................................................19 Code................................................................................35 Collateralizing Securities ................................................26 Companies Law ................................................................1 Contingent Forward Agreement .....................................28 Contingent Forward Confirmation..................................28 Corporate Bond...............................................................19 Corporate Reference Entity ...............................................i Covered Bonds................................................................19 Credit Confirmation........................................................23 Deferral Rate...................................................................10 Eligible Credit Support Provider ....................................26 ERISA.............................................................................35 Event Determination Date ........................................10, 12 Holders...............................................................................i Indenture ........................................................................i, 7 Initial Underlying Securities ...........................................20 Initial Underlying Securities Issuer ................................20 Initial Underlying Securities Maturity Date....................20 Initial Underlying Securities Prospectus.........................22 Interest Accrual Period ...................................................11 Interest Payment ...............................................................8 Interest Payment Date.......................................................8 Investment Company Act ................................................ ii Issuer..................................................................................i Liquidation Amount........................................................14 Liquidity Fund ................................................................20 Margin ............................................................................11 Master Contingent Forward Agreement .........................28 Master Swap Agreement.................................................23 Matrix .............................................................................24

Minimum Interest Payment ............................................10 Morgan Stanley Affiliates.............................................ii, 5 Morgan Stanley Designee...............................................27 Notes..............................................................................i, 7 Notification Deadline .....................................................14 Optional Early Redemption Date....................................13 Permitted Investments ....................................................30 Physical Redemption Notes............................................14 Portfolio Property ..........................................................i, 7 Potential Payable Credit Protection Payment .................10 Principal Payments .........................................................11 Priority Payment .............................................................14 Priority Payments ...........................................................14 Private Placement Memorandum.......................................i Proportional Priority Payment ........................................14 Proportional Priority Payments.......................................14 Provisional Reserve Account............................................9 Rate Confirmation ..........................................................24 Rate Swap Collateral ......................................................26 Rate Swap Counterparty Downgrade .............................26 Rating Agency ................................................................15 Rating Condition ............................................................27 Reference Entity ................................................................i Regulation S .....................................................................ii Related Agreements.......................................................i, 7 Relevant Implementation Date ......................................viii Relevant Member State .................................................viii RMBS.............................................................................19 S&P ................................................................................15 Securities Act..............................................................ii, 34 Series 2007-41 Segregated Portfolio .................................i Substitute Swap Counterparty ........................................27 Substitute Underlying Security.......................................18 Supplement ........................................................................i Swap Agreement ............................................................23 Swap Breakage Fee ..........................................................4 Termination Notice.........................................................24 Trustee ...............................................................................i Underlying Securities .....................................................18 Unsettled Reference Entity ...............................................9 Weighted Average Final Price........................................10