JPMorgan Chase,NPF XII,Bank One, N.A,

The following is an excerpt from a 10-K SEC Filing, filed by J P MORGAN CHASE & CO on 3/9/2006.




Enron litigation. JPMorgan Chase and certain of its officers and directors are
involved in a number of lawsuits arising out of its banking relationships with
Enron Corp.




The three current or former Firm employees are sued in their roles as former
members of NCFE's board of directors (the "Defendant Employees"). JPMorgan
Chase, JPMorgan Partners and Beacon Group, LLC, are claimed to be vicariously
liable for the alleged actions of the Defendant Employees. Banc One Capital
Markets, Inc. is sued in its role as co-manager for three note offerings made by
NPF XII. Other defendants include the founders and key executives of NCFE, its
auditors and outside counsel, and rating agencies and placement agents that were
involved with the issuance of the Notes. Plaintiffs in these actions include
institutional investors who purchased more than $2.7 billion in original face
amount of asset-backed securities issued by NCFE

National Century Financial Enterprises litigation. JPMorgan Chase, JPMorgan
Chase Bank, JPMorgan Partners, Beacon Group, LLC and three current or former
Firm employees have been named as defendants in more than a dozen actions filed
in or transferred to the United States District Court for the Southern District
of Ohio (the "MDL Litigation"). In the majority of these actions, Bank One, Bank
One, N.A., and Banc One Capital Markets, Inc. are also named as defendants.
JPMorgan Chase Bank and Bank One, N.A. are also defendants in an action brought
by The Unencumbered Assets Trust ("UAT"), a trust created for the benefit of the
creditors of National Century Financial Enterprises, Inc. ("NCFE") as a result
of NCFE's Plan of Liquidation in bankruptcy. These actions arose out of the
November 2002 bankruptcy of NCFE. Prior to bankruptcy, NCFE provided financing
to various healthcare providers through wholly-owned special-purpose vehicles,
including NPF VI and NPF XII, which purchased discounted accounts receivable to be paid under third-party insurance programs. NPF VI and NPF XII financed thepurchases of such receivables, primarily through private placements of notes ("Notes") to institutional investors and pledged the receivables for, among
other things, the repayment of the Notes. In the MDL Litigation, JPMorgan Chase
Bank is sued in its role as indenture trustee for NPF VI, which issued
approximately $1 billion in Notes. Bank One, N.A. is sued in its role as indenture trustee for NPF XII, which issued approximately $2 billion in Notes.
The three current or former Firm employees are sued in their roles as former
members of NCFE's board of directors (the "Defendant Employees"). JPMorgan
Chase, JPMorgan Partners and Beacon Group, LLC, are claimed to be vicariously
liable for the alleged actions of the Defendant Employees. Banc One Capital
Markets, Inc. is sued in its role as co-manager for three note offerings made by
. Other defendants include the founders and key executives of NCFE, its
auditors and outside counsel, and rating agencies and placement agents that were
involved with the issuance of the Notes. Plaintiffs in these actions include
institutional investors who purchased more than $2.7 billion in original face
amount of asset-backed securities issued by NCFE

Item 2: Properties


The headquarters of JPMorgan Chase is located in New York City at 270 Park
Avenue, which is a 50-story bank and office building owned by JPMorgan Chase.
This location contains approximately 1.3 million square feet of space. In total,
JPMorgan Chase owns or leases approximately 12.3 million square feet of
commercial office space and retail space in New York City.

JPMorgan Chase and its subsidiaries also own or lease significant administrative
and operational facilities in Chicago, Illinois (5.1 million square feet),
Houston and Dallas, Texas (6.8 million square feet), Columbus, Ohio (2.9 million
square feet), Newark and Wilmington, Delaware (2.2 million square feet),
Phoenix, Arizona (1.4 million square feet), Tampa, Florida (1.0 million square
feet), Jersey City, New Jersey (1.2 million square feet), and Indianapolis,
Indiana (900 thousand square feet).

Outside the United States, JPMorgan Chase owns or leases facilities in the
United Kingdom (2.7 million square feet) and in other countries (2.6 million
square feet).

In addition, JPMorgan Chase and its subsidiaries occupy offices and other
administrative and operational facilities throughout the world under various
types of ownership and leasehold agreements, including 2,641 retail branches in
the United States. The properties occupied by JPMorgan Chase are used across all
of the Firm's business segments and for corporate purposes.
JPMorgan Chase continues to evaluate its current and projected space
requirements. There is no assurance that the Firm will be able to dispose of its
excess premises or that it will not incur charges in connection with such
dispositions. Such disposition costs may be material to the Firm's results of
operations in a given period. For a discussion of occupancy expense, see the
Consolidated results of operations discussion on pages 29-30.
Item 3: Legal proceedings

Enron litigation. JPMorgan Chase and certain of its officers and directors areinvolved in a number of lawsuits arising out of its banking relationships with
Enron Corp. and its subsidiaries ("Enron"). Several actions and other
proceedings, against the Firm, have been resolved, including adversary
proceedings brought by Enron's bankruptcy estate. In addition, as previously
reported, the Firm has reached an agreement to settle the lead class action
litigation brought on behalf of the purchasers of Enron securities, captioned
Newby v. Enron Corp., for $2.2 billion (pretax). The settlement is subject to
approval by the United States District Court for the Southern District of Texas.
The Newby settlement does not resolve Enron-related actions filed separately by
plaintiffs who opt out of the class action, or by certain plaintiffs who are
asserting claims not covered by that action.

The remaining Enron-related actions include individual actions against the Firm
by plaintiffs who were lenders or claim to be successors-in-interest to lenders
who participated in Enron credit facilities syndicated by the Firm; individual
and putative class actions by Enron investors, creditors and counterparties; and
third-party actions brought by defendants in Enron-related cases, alleging
federal and state law claims against JPMorgan Chase and many other defendants.
Fact discovery in these actions is mostly complete. Plaintiffs in two of the
bank lender cases have moved for partial summary judgment, which the Firm will
oppose.

In a purported, consolidated class action lawsuit by JPMorgan Chase stockholders
alleging that the Firm issued false and misleading press releases and other
public documents relating to Enron in violation of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder, the United States
District Court for the Southern District of New York dismissed the lawsuit in
its entirety without prejudice in March 2005. Plaintiffs filed an amended
complaint in May 2005. The Firm has moved to dismiss the amended complaint, and
the motion has been submitted to the court for decision.
In a putative class action on behalf of JPMorgan Chase employees who
participated in the Firm's 401(k) plan are alleging claims under the Employee
Retirement Income Security Act ("ERISA") for alleged breaches of fiduciary
duties and negligence by JPMorgan Chase, its directors and named officers. In
August 2005, the United States District Court for the Southern District of New
York denied plaintiffs' motion for class certification and ordered some of
plaintiffs' claims dismissed. A petition has been filed by the plaintiffs
seeking review of the denial of class certification in the United States Court
of Appeals for the Second Circuit, which petition remains pending. The Firm has
also moved for summary judgment seeking dismissal of this ERISA lawsuit in its
entirety.

IPO allocation litigation. Beginning in May 2001, JPMorgan Chase and certain of
its securities subsidiaries were named, along with numerous other firms in the
securities industry, as defendants in a large number of putative class action
lawsuits filed in the United States District Court for the Southern District of
New York. These suits allege improprieties in the allocation of stock in various
public offerings, including some offerings for which a JPMorgan Chase entity
served as an underwriter. The suits allege violations of securities and
antitrust laws arising from alleged material misstatements and omissions in
registration statements and prospectuses for the initial public offerings
("IPOs") and alleged market manipulation with respect to aftermarket
transactions in the offered securities. The securities lawsuits allege, among
other things, misrepresentation and market manipulation of the aftermarket
trading for these offerings by tying allocations of shares in IPOs to
undisclosed excessive commissions paid to JPMorgan Chase and to required
aftermarket purchase transactions by customers who received allocations of
shares in the respective IPOs, as well as allegations of misleading analyst
reports. The antitrust lawsuits allege an illegal conspiracy to require
customers, in exchange for IPO allocations, to pay undisclosed and excessive
commissions and to make aftermarket purchases of the IPO securities at a price
higher than the offering price as a precondition to receiving allocations. The
securities cases were all assigned to one judge for coordinated pre-trial
proceedings, and the antitrust cases were all assigned to another judge. On
February 13, 2003, the Court denied the motions of JPMorgan Chase and others to
dismiss the securities complaints. On October 13, 2004, the Court granted in
part plaintiffs' motion to certify classes in six "focus" cases in the
securities litigation. On June 30, 2005, the United States Court of Appeals for
the Second Circuit granted the underwriter defendants' petition for permission
to appeal the district court's class certification decision, and the appeal
currently is being briefed. The Second Circuit likely will hear oral argument
sometime during the first half of 2006.

In addition, on February 15, 2005, the Court in the securities cases
preliminarily approved a proposed settlement of plaintiffs' claims against 298
of the issuer defendants in these cases and a fairness hearing on the proposed
settlement is now scheduled for April 24, 2006. Pursuant to the proposed issuer
settlement, the insurers for the settling issuer defendants, among other things,

(1) agreed to guarantee that the plaintiff classes will recover at least
$1 billion from the underwriter defendants in the IPO securities and antitrust



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Part I




cases and to pay any shortfall, and (2) conditionally assigned to the plaintiffs
any claims related to any "excess compensation" allegedly paid to the
underwriters by their customers for allocations of stock in the offerings at
issue in the IPO litigation. Joseph P. Lasala, the trustee designated by
plaintiffs to act as assignee of such issuer excess compensation claims, filed
complaints purporting to allege state law claims on behalf of certain issuers
against JPMSI and other underwriters (the "LaSala Actions"), together with
motions to stay proceedings in each case. To date, JPMSI is a defendant in more
than half of the approximately 100 pending LaSala Actions. On August 30, 2005,
the Court stayed until resolution of the proposed issuer settlement the
LaSalaActions then pending against JPMSI and other underwriter defendants at
that time, as well as all future-filed LaSala Actions pursuant to the parties'
stipulation that the Court's decision would govern stay motions in all future
LaSala Actions. On October 12, 2005, the Court granted the underwriter
defendants' motion to dismiss one LaSala Action, which by stipulation applied to
the parallel motions to dismiss in all other pending and future-filed LaSala
Actions. The Court did, however, grant Plaintiffs leave to replead and noted
that the stay of the LaSala Actions remains in effect. Plaintiffs thereafter
filed amended complaints in the lead and other LaSala Actions in which
Plaintiffs are purportedly seeking equitable restitution on a breach of
fiduciary duty claim - a claim that sought damages in the initial LaSala
complaints and was dismissed on the ground that it was time-barred. On
November 21, 2005, the underwriter defendants moved to dismiss the amended
complaint in the lead LaSala Action and - by virtue of the stipulation of the
parties - thereby moved to dismiss the amended complaints in all other pending
and future-filed LaSalaActions. The motion currently is being briefed.
With respect to the IPO antitrust lawsuits, on November 3, 2003, the Court
granted defendants' motion to dismiss the claims relating to the IPO allocation
practices in the IPO Allocation Antitrust Litigation. On September 28, 2005, the
United States Court of Appeals for the Second Circuit reversed, vacated and
remanded the district court's November 3, 2003, dismissal decision. Defendants'
motion for rehearing en banc in the Second Circuit was denied on January 11,
2006.

A wholly separate antitrust class action lawsuit on behalf of a class of IPO
issuers alleging that JPMSI and other underwriters conspired to fix their
underwriting fees in IPOs is in discovery.

National Century Financial Enterprises litigation. JPMorgan Chase, JPMorgan
Chase Bank, JPMorgan Partners, Beacon Group, LLC and three current or former
Firm employees have been named as defendants in more than a dozen actions filed
in or transferred to the United States District Court for the Southern District
of Ohio (the "MDL Litigation"). In the majority of these actions, Bank One, Bank
One, N.A., and Banc One Capital Markets, Inc. are also named as defendants.
JPMorgan Chase Bank and Bank One, N.A. are also defendants in an action brought
by The Unencumbered Assets Trust ("UAT"), a trust created for the benefit of the
creditors of National Century Financial Enterprises, Inc. ("NCFE") as a result
of NCFE's Plan of Liquidation in bankruptcy. These actions arose out of the
November 2002 bankruptcy of NCFE. Prior to bankruptcy, NCFE provided financing
to various healthcare providers through wholly-owned special-purpose vehicles,
including NPF VI and NPF XII, which purchased discounted accounts receivable to
be paid under third-party insurance programs. NPF VI and NPF XII financed the
purchases of such receivables, primarily through private placements of notes
("Notes") to institutional investors and pledged the receivables for, among
other things, the repayment of the Notes. In the MDL Litigation, JPMorgan Chase
Bank is sued in its role as indenture trustee for NPF VI, which issued
approximately $1 billion in Notes. Bank One, N.A. is sued in its role as
indenture trustee for NPF XII, which issued approximately $2 billion in Notes.
The three current or former Firm employees are sued in their roles as former
members of NCFE's board of directors (the "Defendant Employees"). JPMorgan
Chase, JPMorgan Partners and Beacon Group, LLC, are claimed to be vicariously
liable for the alleged actions of the Defendant Employees. Banc One Capital
Markets, Inc. is sued in its role as co-manager for three note offerings made by
NPF XII. Other defendants include the founders and key executives of NCFE, its
auditors and outside counsel, and rating agencies and placement agents that were
involved with the issuance of the Notes. Plaintiffs in these actions include
institutional investors who purchased more than $2.7 billion in original face
amount of asset-backed securities issued by NCFE. Plaintiffs allege that the
trustees violated fiduciary and contractual duties, improperly permitted NCFE
and its affiliates to violate the applicable indentures and violated securities
laws by (among other things) failing to disclose the true nature of the NCFE
arrangements. Plaintiffs further allege that the Defendant Employees controlled
the Board and audit committees of the NCFE entities; were fully aware or
negligent in not knowing of NCFE's alleged manipulation of its books; and are
liable for failing to disclose their purported knowledge of the alleged fraud to
the plaintiffs. Plaintiffs also allege that Banc One Capital Markets, Inc. is
liable for cooperating in the sale of securities based upon false and misleading
statements. Motions to dismiss on behalf of the JPMorgan Chase entities, the
Bank One entities and the Defendant Employees are currently pending. In the UAT
action, JPMorgan Chase Bank and Bank One are sued in their roles as indenture
trustees. Claims are asserted under the Federal Racketeer Influenced and Corrupt
Organizations Act ("RICO"), the Ohio Corrupt Practices Act and various
common-law claims. On March 31, 2005, motions to dismiss the UAT action were
filed on behalf of JPMorgan Chase Bank. These motions are currently pending. On
February 22, 2006, the JPMorgan Chase entities, the Bank One entities and the
Defendant Employees reached a settlement with the holders of $1.6 billion face
value of Notes (the "Arizona Noteholders"), and reached a separate agreement
with the UAT. The settlements are contingent upon the entry of certain orders by
the MDL court and bankruptcy courts. Assuming the contingencies are met, the
Firm has agreed to pay the Arizona Noteholders the sum of $375 million for all
claims and potential claims held by them and has agreed to pay the UAT the sum
of $50 million for all claims or potential claims held by it.

In addition, the Securities and Exchange Commission has served subpoenas on
JPMorgan Chase Bank and Bank One, N.A. ("Bank One") and has interviewed certain
current and former employees. On April 25, 2005, the staff of the Midwest
Regional Office of the SEC wrote to advise Bank One that it is considering
recommending that the Commission bring a civil injunctive action against Bank
One and a former employee alleging violations of the securities laws in
connection with Bank One's role as indenture trustee for the NPF XII note
program. On July 8, 2005, the staff of the Midwest Regional Office of the
Securities and Exchange Commission wrote to advise that it is considering
recommending that the Commission bring a civil injunctive action against two
individuals, one present and one former employee of the Firm's affiliates,
alleging violations of certain securities laws in connection with their role as
former members of NCFE's board of directors. On July 13, 2005, the staff further
advised that it is considering recommending that the Commission also bring a
civil injunctive action against the Firm in connection with the alleged
activities of the two individuals as alleged agents of the Firm. Lastly, the
United States Department of Justice is also investigating the events surrounding
the collapse of NCFE, and the Firm is cooperating with that investigation.



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In addition to the various cases, proceedings and investigations discussed
above, JPMorgan Chase and its subsidiaries are named as defendants in a number
of other legal actions and governmental proceedings arising in connection with
their businesses. Additional actions, investigations or proceedings may be
brought from time to time in the future. In view of the inherent difficulty of
predicting the outcome of legal matters, particularly where the claimants seek
very large or indeterminate damages, or where the cases present novel legal
theories, involve a large number of parties or are in early stages of discovery,
the Firm cannot state with confidence what the eventual outcome of these pending
matters will be, what the timing of the ultimate resolution of these matters
will be or what the eventual loss, fines or penalties related to each pending
matter may be. JPMorgan Chase believes, based upon its current
knowledge, after consultation with counsel and after taking into account its
current litigation reserves, that the outcome of the legal actions, proceedings
and investigations currently pending against it should not have a material,
adverse effect on the consolidated financial condition of the Firm. However, in
light of the uncertainties involved in such proceedings, actions and
investigations, there is no assurance that the ultimate resolution of these
matters will not significantly exceed the reserves currently accrued by the
Firm; as a result, the outcome of a particular matter may be material to
JPMorgan Chase's operating results for a particular period, depending upon,
among other factors, the size of the loss or liability imposed and the level of
JPMorgan Chase's income for that period.