As filed with the Securities and Exchange Commission on October 20, 1999
Registration No. 333-10970
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
AMENDMENT NO. 1
TO
FORM F-1
Registration Statement under the Securities Act of 1933
Gracechurch Card Funding (No. 1) PLC Barclaycard Funding PLC
(Exact name of Registrants as specified in their charters)
England and Wales
(State or other jurisdiction of incorporation or organisation)
---------------------
200 Aldersgate Street, 54 Lombard Street,
London EC1A 4JJ London EC3P 3AH
United Kingdom United Kingdom
44-171-600-1000 44-171-699-5000
(Address, including zip code, and telephone number, including area code, of
principal executive offices of Registrants)
6189 None
(Primary Standard Industrial (I.R.S. Employer
Classification Code Numbers) Identification Numbers)
Patricia Ryan Guarino
Barclays Bank PLC
222 Broadway
New York, New York 20038
(212)-412-1383
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies to:
Paul Weiffenbach Kevin Ingram
Orrick, Herrington & Sutcliffe Clifford Chance
1 Threadneedle Street 200 Aldersgate Street
London EC2R 8AW London EC1A 4JJ
United Kingdom United Kingdom
--------------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
Calculation of Registration Fee
<TABLE>
<CAPTION>
==================================================================================================================================
Title of each class Proposed maximum Proposed maximum
of securities to be amount to be offering aggregate Amount of
registered registered (1) price per unit (2) offering price (1) registration fee(4)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Floating Rate Asset-
Backed Notes, Class A3. $1,000,000 100% $1,000,000 $278
Floating Rate Asset-
Backed Notes, Class B.. $1,000,000 100% $1,000,000 $278
Medium Term Notes (3)
Investor Certificates(3)
==================================================================================================================================
</TABLE>
(1) Includes an indeterminate amount of securities that are to be offered or
sold in connection with market-making activities by Barclays Capital Inc.,
an affiliate of the transferor and servicer.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Securities Act.
(3) The Investor Certificates and the Medium Term Notes are being issued to
Barclaycard Funding PLC and Gracechurch Funding (No. 1) PLC, respectively,
and will be the primary sources of payments on the Class A3 Notes and the
Class B Notes. The Medium Term Notes and the Investor Certificates are not
being offered directly to investors.
(4) The registration fee for the Class A3 Notes has been previously paid.
The registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
================================================================================
The information in this prospectus is not complete and may be amended. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
================================================================================
Subject to Completion, Dated October 20, 1999
Prospectus
- -------------------------------------------------------------------------------
$*
Gracechurch Card Funding (No. 1) PLC
Issuer
Barclays Bank PLC
Transferor, Servicer and Trust Cash Manager
$* Class A3 Floating Rate Asset-Backed Notes
$* Class B Floating Rate Asset-Backed Notes
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Price to Public per Underwriting Proceeds To Issuer
Class Interest Rate Note Discount per Note per Note
--------------------------------------- ------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
A3 One-month LIBOR *% *% $*
plus *% annually
B One-month LIBOR *% *% $*
plus *% annually
</TABLE>
* The ultimate source of payment on the offered notes will be collections
on consumer credit and charge card accounts of Barclaycard originated in
the United Kingdom.
* The transaction documents will be governed by the laws of England and
Wales.
* A currency swap will be used to convert the sterling amounts received
from the receivables into U.S. dollar amounts for payment on the offered
notes.
Please consider carefully the risk factors beginning on page 7 in this
prospectus.
A note is not a deposit and neither the notes nor the underlying receivables
are insured or guaranteed by any United Kingdom or United States governmental
agency.
The notes offered in this prospectus are obligations of the issuer only. The
Issuer will only have a limited pool of assets to satisfy its obligations on
the notes. The notes are not obligations of Barclays Bank PLC or any of its
affiliates.
The total price to public is $*, the total amount of the underwriting discount
is $*, and the total amount of proceeds plus accrued interest and before
deduction of expenses is $*.
We have applied to have the offered notes listed on the London Stock Exchange.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the offered notes or determined that
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offence.
- -------------------------------------------------------------------------------
Underwriter[s] of the Class A3 Notes
Barclays Capital
Underwriter of the Class B Notes
Barclays Capital
*, 1999
<PAGE>
Important Notice About Information Presented In This Prospectus
We include cross-references to captions in this prospectus where you can
find further related discussions. The following table of contents provides the
pages on which these captions are located.
Table Of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Prospectus Summary................................................... 1
Program Structural Summary.......................................... 1
Structural Diagram of Barclaycard Securitisation Program............ 2
The Issuer.......................................................... 3
The Note Trustee.................................................... 3
The Notes........................................................... 3
The Closing Date.................................................... 3
The Security Trustee................................................ 3
The MTN Issuer and Initial Investor Beneficiary..................... 3
The Medium Term Notes............................................... 3
The Receivables..................................................... 4
The Originator, Initial Transferor, Servicer, Trust Cash Manager and
Excess Interest Beneficiary ........................................ 4
The Receivables Trustee............................................. 4
The Receivables Trust............................................... 4
The Investor Certificates........................................... 4
The Swap Counterparty............................................... 5
The Dollar Swap Agreements.......................................... 5
The Euro Swap Agreement............................................. 5
Optional Early Redemption........................................... 5
Notices............................................................. 5
United Kingdom Tax Status........................................... 5
United States Federal Income Tax Status............................. 5
ERISA Considerations for Investors.................................. 6
Risk Factors......................................................... 7
Introduction......................................................... 18
U.S. Dollar Presentation............................................. 18
The Issuer.......................................................... 18
Directors and Secretary............................................ 18
Management's Discussion And Analysis Of Financial Condition........ 19
Sources of Capital and Liquidity.................................. 19
Results of Operations............................................. 19
Use Of Proceeds.................................................... 19
The MTN Issuer...................................................... 19
Directors and Secretary............................................ 20
Management's Discussion and Analysis of Financial Condition........ 20
Sources of Capital and Liquidity.................................. 20
Results of Operations............................................. 20
The Receivables Trustee.............................................. 20
Management and Activities........................................... 21
Barclays Bank PLC.................................................... 22
Business............................................................ 22
Year 2000 Compliance................................................ 22
Credit Card Usage in the United Kingdom.............................. 24
Barclaycard and the Barclaycard Card Portfolio....................... 24
General............................................................. 24
Description of Great Universal Stores Home Shopping Ltd............. 24
Acquisition and Use of Card Accounts................................ 24
Description of Processing........................................... 25
Billing and Payment................................................. 25
Delinquency and Loss Experience..................................... 26
Delinquency Experience -- Bank Portfolio............................. 27
Loss Experience -- Bank Portfolio.................................... 28
The Receivables...................................................... 30
Assignment of Receivables to the Receivables Trustee................ 30
Redesignation and Removal of Accounts............................... 32
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Discount Option Receivables......................................... 32
Special Fees........................................................ 33
Interchange......................................................... 33
Annual Fees......................................................... 33
Reductions in Receivables, Early Collections and Credit Adjustments. 33
Representations..................................................... 34
Amendments to Card Agreement and Card Guidelines.................... 36
Summary of Securitised Portfolio as of 30 September, 1999........... 36
Composition by Account Balance -- Securitised Portfolio............ 36
Composition by Credit Limit -- Securitised Portfolio............... 37
Composition by Account Age -- Securitised Portfolio................ 37
Geographic Distribution of Accounts -- Securitised Portfolio....... 38
Composition by Product Line -- Securitised Portfolio............... 38
Maturity Assumptions................................................ 38
Cardholder Monthly Payment Rates -- Bank Portfolio.................. 39
Receivables Yield Considerations.................................... 40
Yield Experience -- Bank Portfolio................................. 41
The Receivables Trust................................................ 42
General Legal Structure............................................. 42
The Receivables Trust's Property.................................... 44
General Entitlement of Beneficiaries to Trust Property.............. 44
Allocation and Application of Collections........................... 45
Acquiring Additional Entitlements to Trust Property and Payments for
Receivables ........................................................ 46
Non-Petition Undertaking of Beneficiaries........................... 47
Trust Pay Out Events................................................ 48
Termination of the Receivables Trust................................ 49
Amendments to the Declaration of Trust and Trust Cash Management
Agreement .......................................................... 49
Disposals........................................................... 49
Trustee Payment Amount.............................................. 50
Servicing of Receivables and Trust Cash Management................... 50
General -- Servicing................................................ 50
General -- Trust Cash Management.................................... 51
Servicing and Trust Cash Manager Compensation....................... 51
Termination of Appointment of Servicer.............................. 52
Termination of Appointment of Trust Cash Manager.................... 54
Series 99-1.......................................................... 56
General............................................................. 56
Beneficial Entitlement of the MTN Issuer to Trust Property.......... 56
Allocation, Calculation and Distribution of Finance Charge
Collections to the MTN Issuer ...................................... 58
Class A Investor Interest........................................... 59
Class B Investor Interest........................................... 60
Class C Investor Interest........................................... 61
Revolving Period.................................................... 62
Controlled Accumulation Period...................................... 62
Regulated Amortisation Period....................................... 63
Rapid Amortisation Period........................................... 63
Allocation, Calculation and Distribution of Principal Collections to
the MTN Issuer ..................................................... 64
[Postponement of Controlled Accumulation Period..................... 68
Unavailable Principal Collections................................... 68
Shared Principal Collections........................................ 69
Defaulted Receivables; Investor Charge-Offs......................... 69
Excess Spread....................................................... 71
Aggregate Investor Indemnity Amount................................. 72
Principal Funding Account........................................... 72
Reserve Account..................................................... 73
Distribution Ledgers................................................ 74
Trustee Payment Amount.............................................. 74
Qualified Institutions.............................................. 74
Expenses Loan Agreement............................................. 75
Series 99-1 Pay Out Events.......................................... 75
Your Payment Flows.................................................. 76
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
The Notes And The Global Notes....................................... 78
Terms and Conditions of the Notes.................................... 82
The Swap Agreements................................................. 92
Dollar Swap Agreement............................................... 92
Euro Swap Agreement................................................. 94
Common Provisions of the Swap Agreements............................ 94
The Medium Term Notes................................................ 95
Material Legal Aspects of the Receivables............................ 98
Consumer Credit Act 1974............................................ 98
Transfer of Benefit of Receivables.................................. 98
United Kingdom Taxation Treatment Of The Notes....................... 99
Overview............................................................ 99
Taxation of US Residents............................................ 100
Taxation of Interest Paid........................................... 100
Proposed European Directive on the Taxation of Savings.............. 101
Ownership and Disposal, Including Redemption, of the Notes by United
Kingdom Corporation Tax Payers ..................................... 102
Stamp Duty and Stamp Duty Reserve Tax............................... 102
Taxation of the Receivables Trustee................................. 102
United States Federal Income Tax Consequences........................ 102
Overview............................................................ 102
Tax Status of the Receivables Trust, the MTN Issuer and the Issuer.. 103
United States Holders............................................... 104
Interest Payments and Distributions................................. 104
Sourcing........................................................... 105
Disposition or Retirement of Investment............................. 105
Sourcing........................................................... 105
Investment in a Passive Foreign Investment Company.................. 105
Sourcing........................................................... 106
Controlled Foreign Corporation Status............................... 106
Non-United States Holders........................................... 107
Backup Withholding and Information Reporting........................ 107
ERISA Considerations................................................. 107
Enforcement of Foreign Judgements in England And Wales............... 108
Underwriting......................................................... 109
Ratings of the Offered Notes......................................... 110
Experts.............................................................. 111
Legal Matters........................................................ 111
Reports to Noteholders............................................... 111
Where You Can Find More Information.................................. 111
Index of Terms for Prospectus........................................ 112
Index of Appendices.................................................. 115
Appendix A.......................................................... A1
Appendix B.......................................................... B1
Appendix C.......................................................... C1
Appendix D.......................................................... D1
Appendix E.......................................................... E1
Appendix F.......................................................... F1
Appendix G.......................................................... G1
</TABLE>
(iii)
<PAGE>
Prospectus Summary
The following is a brief overview of the key aspects of the class A3 notes
and the class B notes, which we refer to as the offered notes. You need to read
all of this prospectus to fully understand the terms of the offered notes.
Series Structure
<TABLE>
<CAPTION>
Initial Principal Balance Sterling Equivalent % of Total
- ------------------------------- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C> <C>
Class A1....................... L * *%
Class A2*...................... [EURO] * L *(1) *%
Class A3**..................... $ * L *(2) *%
Class B**...................... $ * L *(2) *%
Class C**...................... $ * L *(2) *%
</TABLE>
(1) sterling equivalent obtained by converting euros to sterling at the fixed
exchange rate of L* to [EURO]1.
(2) sterling equivalent obtained by converting dollars to sterling at the
fixed exchange rate of L0.60705 to $1.
<TABLE>
<CAPTION>
Class A3 Notes Class B Notes
<S> <C> <C>
Anticipated Ratings:..... AAA or its equivalent A or its equivalent
from four nationally from four nationally
recognised rating recognised rating
agencies. agencies.
Credit Enhancement:...... Subordination of the
class B and class C Subordination of the
notes. class C Notes.
Interest Rate:........... One-month LIBOR, plus One-month LIBOR, plus
*% annually. *% annually.
Interest Accrual Method:. Actual/360 Actual/360
Interest Payment Dates:.. The 15th day of each The 15th day of each
calendar month. calendar month.
First Interest Payment January 15, 2000 January15, 2000
Date: .................. interest payment date interest payment date.
Scheduled Redemption November 15, 2002 November 15, 2002
Date: .................. interest payment date interest payment date.
Final Redemption Date:... * *, 20* interest * *, 20* interest
payment date. payment date.
Clearance/Settlement:.... DTC/Euroclear/ DTC/Euroclear/
Cedelbank. Cedelbank.
Minimum Denomination:.... $1,000. $1,000.
</TABLE>
Program Structural Summary
The following is a brief summary description of the Barclaycard
securitisation program, of which your notes will form a part.
Barclaycard, a division of Barclays Bank PLC, will assign all of its
present and future beneficial interest in receivables in designated revolving
credit card and charge card accounts originated by Barclaycard in the United
Kingdom. Only the receivables will be assigned. The accounts will be retained
by Barclaycard.
The receivables will be assigned to a special purpose company,
incorporated offshore in Jersey, Channel Islands, acting as receivables
trustee. The receivables trustee will hold the receivables on trust for
Barclaycard, as transferor beneficiary and excess interest beneficiary, and a
special purpose subsidiary of Barclays called the MTN issuer, as investor
beneficiary.
The receivables trustee will issue multiple series of investor
certificates to the MTN issuer. Each series of investor certificates will
represent an undivided beneficial interest in the receivables trust. They will
entitle the MTN issuer to payments of interest and principal payable from
collections on the receivables.
The MTN issuer will finance its acquisition of an undivided beneficial
interest in the receivables trust, evidenced by the issuance of series of
investor certificates, by issuing series of limited recourse medium term notes
to individual issuers and credit enhancement providers, if any. The limited
recourse nature of the medium term notes will ensure that the MTN issuer is
only ever liable under a series of medium term notes for payments of principal
and interest equal to what is paid under the corresponding series of investor
certificates.
The issuers, in turn, will finance their purchases of series of medium
term notes by issuing series of notes to investors. Your series of notes,
series 99-1, will be the first series of notes issued under this program.
1
<PAGE>
Structural Diagram of Barclaycard Securitisation Program
[GRAPHIC OMITTED]
2
<PAGE>
The Issuer
Gracechurch Card Funding (No. 1) PLC is a public limited company
incorporated in England and Wales. Its registered office is at 200 Aldersgate
Street, London EC1A 4JJ. Its telephone number is 44-171-600-1000.
The issuer is a newly created special purpose company. The purpose of the
issuer is to issue the notes which represent its asset-backed debt obligations.
The issuer may not engage in any unrelated activities.
The Note Trustee
The note trustee is The Bank of New York, London Branch. The note trustee
will act as trustee for the noteholders under the trust deed. The note
trustee's address is One Canada Square, London E14 5AL, United Kingdom. Its
telephone number is 44-171-570-1784.
The Notes
In this document, we are offering two classes of notes:
* floating rate class A3 notes with an initial principal balance of
$________.
* floating rate class B notes with an initial principal balance of
$________.
The class A3 notes and the class B notes represent asset-backed debt
obligations of the issuer. The class A3 notes are secured by and payable from
payments received by the issuer from amounts allocated to the class A3 notes
from the class A MTN and payments received from the swap counterparty. The
class B notes are secured by and payable from payments received by the issuer
from the class B MTN and payments received from the swap counterparty. These
payments will ultimately be dependent upon collections Barclaycard receives on
the receivables.
We will issue the notes under the trust deed. The notes will also be
subject to a paying agency and agent bank agreement and a depository agreement.
The security for the notes will be created under a deed of charge between the
issuer and the note trustee. The terms of the notes will be contained in the
trust deed, the paying agency and agent bank agreement, the depository
agreement and the deed of charge.
On the date the offered notes are issued, the notes described below will
be offered to non-U.S. persons. The class C notes may be offered to U.S.
persons in transactions exempt from the registration requirements under the
Securities Act. These notes will also represent asset-backed debt obligations
of the issuer secured by and payable from payments received by the issuer from
the class A MTN and the class C MTN:
* floating rate class A1 notes with an initial principal balance of
L________;
* floating rate class A2 notes with an initial principal balance of
[EURO]________;
* floating rate class C notes with an initial principal balance of
$_______;
The class A1 notes, the class A2 notes and the class A3 notes will rank
equally and will receive payments of interest and principal concurrently. The
class B notes will be subordinated to the class A notes.
If there is an event of default under the notes, the note trustee, on your
behalf, can appoint a receiver of the issuer who would continue to collect
amounts paid by the MTN issuer under the MTNs. The note trustee would also be
able to sell the MTNs. In addition, the note trustee may give an enforcement
notice to the issuer declaring the notes to be immediately due and payable. A
declaration that the notes have become immediately due and payable will not, of
itself, accelerate the timing or amount of redemption of the notes.
The Closing Date
We will issue the notes on or about ___ November, 1999.
The MTN Issuer and Initial Investor Beneficiary
The MTN issuer is Barclaycard Funding PLC, a public limited company
incorporated in England and Wales, having its registered office at 54 Lombard
Street, London EC3P 3AH. The MTN issuer is a subsidiary of Barclays.
The MTN issuer was established to issue secured medium term notes --
called MTNs -- under a programme.
The Security Trustee
The security trustee is The Bank of New York, London Branch. The security
trustee will act as trustee for the holder of the MTNs under the security trust
and cash management deed.
The Medium Term Notes
On the closing date, the MTN issuer will sell to the issuer three limited
recourse medium term notes issued as a series under its medium term note
programme. These limited recourse MTNs will be called the class A MTN, the
class B MTN and the class C MTN. The MTN issuer has made an application to the
London Stock Exchange for the MTNs to be admitted to the official list of the
London Stock Exchange.
The issuer will make payments of interest and principal on the class A
notes, the class B notes and the class C notes from payments made by the MTN
issuer on the class A MTN, the class B MTN and the class C MTN and, for the
class A2 notes, the class A3
3
<PAGE>
notes, the class B notes and the class C notes, from amounts paid by the swap
counterparty.
If an event of default occurs under the MTNs, the security trustee, on
behalf of the issuer as holder of the MTNs, can appoint a receiver of the MTN
issuer who would continue to collect amounts paid on the investor certificates.
The security trustee would also be able to sell the investor certificates. In
addition, the security trustee may give an enforcement notice to the MTN issuer
declaring the MTNs to be immediately due and payable. A declaration that the
MTNs have become immediately due and payable will not, of itself, accelerate
the timing or amount of redemption of the MTNs.
The Receivables
The receivables consist of amounts charged by cardholders to designated
MasterCard* and VISA* revolving credit and charge card accounts of Barclaycard
originated in the United Kingdom for the acquisition of merchandise and
services and cash advances. The receivables also include the periodic finance
charges and fees charged to the credit and charge card accounts and
interchange.
The Originator, Initial Transferor, Servicer, Trust Cash Manager and Excess
Interest Beneficiary
Barclays Bank PLC originates the credit and charge card receivables
through its business unit, Barclaycard. Barclaycard's principal place of
business is located at 1234 Pavilion Drive, Northampton NN4 75G, United
Kingdom. Barclaycard will transfer the credit and charge card receivables to
the receivables trustee.
Barclaycard will service the receivables in the receivables trust.
Barclaycard may not resign as servicer, but may be terminated and a successor
servicer may be appointed in its place if a servicer default occurs.
Barclaycard will also be appointed as the initial trust cash manager to
manage the bank accounts of the receivables trustee for each series of investor
certificates.
Barclaycard will be the excess interest beneficiary of the receivables
trust.
Barclays Bank PLC is a bank incorporated in England and Wales. Its head
office is located at 54 Lombard Street, London EC3P 3AH. It is regulated in the
United Kingdom by the Financial Services Authority. Its telephone number is 44-
207 -- 699-5000.
* MasterCard and VISA are federally registered servicemarks of MasterCard
International Inc. and VISA U.S.A., Inc.
The Receivables Trustee
Gracechurch Receivables Trustee Limited, the receivables trustee, is a
private limited company incorporated under the laws of Jersey, Channel Islands
on 29 September, 1999. Its registered office is located at Normandy House,
Grenville Street, St Helier, Jersey JE2 4UF. The shares of the receivables
trustee are held by a professional trust company -- not affiliated with
Barclays -- on trust for charitable purposes. This means that any profits
received by the receivables trustee, after all amounts have been paid on the
investor certificates will be paid to designated charities in Jersey. The
payments on your notes will not be affected by this arrangement. The
receivables trustee will act as trustee of the receivables trust.
The Receivables Trust
The receivables trust will be formed by a declaration of trust and trust
cash management agreement.
The purpose of the receivables trust is to acquire credit and charge card
receivables of Barclaycard and any additional transferors and to make payments
on the investor certificates. The receivables trustee may issue other series of
investor certificates, representing undivided beneficial interests in the
receivables trust, from time to time. The receivables trustee may not engage in
any unrelated activities.
The Investor Certificates
The MTN issuer will pay the proceeds of the MTNs to the receivables
trustee to acquire, for each class of MTN, separate, undivided beneficial
interests in the receivables trust. These undivided beneficial interests will
be the first series of the receivables trust and will be represented by a class
A investor certificate, a class B investor certificate and a class C investor
certificate. The receivables trustee may issue multiple series of investor
certificates from time to time.
The MTN issuer will make payments of principal and interest on the class A
MTN, the class B MTN and the class C MTN from payments made on the class A
investor certificate, the class B investor certificate and the class C investor
certificate.
The receivables trustee will use the proceeds of the investor certificates
paid to it by the MTN issuer -- together with monies paid to it by the other
beneficiaries of the trust -- to accept an offer to assign by the transferor to
the receivables trustee the present and future receivables generated by the
designated card accounts of the transferor.
The investor certificates will entitle the MTN issuer to receive payment
of a portion of collections of the card receivables assigned by the transferor
to the receivables trustee. The MTN issuer will use those collections for the
redemption of first the class A MTN, then the class B MTN and then the class C
MTN.
4
<PAGE>
If a pay out event occurs, the rapid amortisation period or the regulated
amortisation period may begin, which could cause an early redemption of your
notes. If the transferor beneficiary or the excess interest beneficiary were to
become insolvent, the receivables trustee may be required to liquidate the
receivables. In addition, some breaches of representations made by the
transferor will require the transferor to repurchase the receivables.
The Swap Counterparty
The swap counterparty for the class A3 notes, the class A2 notes, the
class B notes and the class C notes will be Barclays Bank PLC acting through
Barclays Capital, its investment banking division in the United Kingdom. The
swap counterparty's address is 5 The North Colonnade, Canary Wharf, London E14
4BB, United Kingdom.
The Dollar Swap Agreements
Barclays' cardholders will make payments to Barclays in the lawful
currency of the United Kingdom, which is called pounds sterling. Accordingly,
payments on the investor certificates and the MTNs will also be made in
sterling. So that you can receive payments on your class A3 notes or class B
notes in United States dollars, the issuer will enter into two dollar swap
agreements with the swap counterparty. The issuer will also enter into a dollar
swap agreement with the swap counterparty to make payments in dollars on the
class C notes.
Under the dollar swap agreement for the class A3 notes, the issuer will
pay to the swap counterparty the portion of sterling amounts received on the
class A MTN allocated to make payments on the class A3 notes, and the swap
counterparty will convert those sterling amounts into dollars. Under the dollar
swap agreement for the class B notes, the issuer will pay to the swap
counterparty the sterling amounts received on the class B MTN, and the swap
counterparty will convert those sterling amounts into dollars.
The Euro Swap Agreement
So that the class A2 noteholders can receive payments in euros, the issuer
will enter into a euro swap agreement with the swap counterparty. The euro swap
agreement will be substantially identical to the dollar swap agreements.
Optional Early Redemption
The issuer has the option to redeem all of the remaining notes when their
principal balance is reduced to less than 10% of their original principal
balance.
If an early redemption occurs, you will receive a final distribution equal
to the entire unpaid principal balance of your notes plus any accrued and
unpaid interest.
Notices
Any notices that are required to be given by the terms of your notes will
be deemed to be validly given if they are published in the Financial Times or
another leading English language daily newspaper in London.
United Kingdom Tax Status
Subject to important considerations described under "United Kingdom
Taxation of the Notes", Clifford Chance, as special United Kingdom tax
advisers, are of the opinion that payment of principal and interest on the
class A3 notes and the class B notes will not be subject to taxation in the
United Kingdom and no withholding will be required on these payments to any
class A3 noteholder or class B noteholder. No United Kingdom stamp duty or
stamp duty reserve tax is payable on the issue of the global notes or on the
issue or transfer by delivery of a note in definitive form.
United States Federal Income Tax Status
The issuer intends to treat the class A3 notes and the class B notes as
debt for United States federal income tax purposes. Each noteholder, by holding
a beneficial interest in a note, will agree to conform to that treatment.
However, neither a ruling nor a legal opinion will be obtained from the IRS or
counsel about the characterisation of the class A3 notes or the class B notes
for United States federal income tax purposes. If the class A3 notes or the
class B notes were not treated as debt, they likely would be treated as equity
in the issuer for United States federal income tax purposes. U.S. holders of
class A3 notes or class B notes that are treated as equity in the issuer likely
would be treated as owning shares in a passive foreign investment company.
If the class A3 notes or class B notes were treated as equity in a passive
foreign investment company, all or a portion of both distributions and gains on
the class A3 notes or class B notes as applicable generally would be taxable to
the holder as ordinary income, and would be taxable at the highest marginal
rates applicable to current and prior years during the holding period.
Further, all or a portion of the distributions could be subject to the
additional interest charge tax. This interest charge regime may be avoided by
an investor treated as owning equity in a passive foreign investment company if
that investor makes an effective election to account for its investment using a
mark-to-market method of tax accounting, under which it would take into account
accrued gains and losses on its investment in class A3 notes or class B notes
as applicable during the tax years to which they relate, treating all related
income and loss as ordinary income and loss. However, the applicability of the
election is dependent upon certain facts -- such as the frequency of secondary
market trading of the class A3 notes and the class B notes -- as to which there
is uncertainty and, accordingly, as to which no
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assurance is possible. As a result, the mark-to-market election may not be
available, in which case investors would be subject to the tax rules applicable
to investors in passive foreign investment companies described above.
Special U.S. federal income tax counsel to the issuer, Orrick, Herrington
and Sutcliffe LLP, have prepared and reviewed the summary of federal income tax
consequences set forth in this prospectus, and renders the United States
federal income tax opinions contained in this prospectus.
See "United States Federal Income Tax Consequences".
ERISA Considerations for Investors
Subject to important considerations described under "ERISA Considerations"
in this prospectus, the class A3 notes are eligible for purchase by persons
investing assets of employee benefit plans or individual retirement accounts.
The class B notes are not eligible for purchase by persons investing
assets of employee benefit plans or individual retirement accounts.
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Risk Factors
You should carefully consider the following risk factors before deciding
to invest in the notes offered by this prospectus.
You May Not Be Able to There currently is no secondary market for the
Sell Your Notes notes. The underwriter[s] expect, but are not
obligated, to make a market in the notes. If no
secondary market develops, you may not be able
to sell your notes prior to maturity. We cannot
offer any assurance that one will develop or, if
one does develop, that it will continue.
Allocations of Charged-Off We anticipate that the servicer will charge off
Receivables Could Reduce or write off as uncollectable some of the
Your Payments receivables. Each class of investor interest in
the receivables trust will be allocated a
portion of those charged-off receivables. If the
amount of charged-off receivables allocated to
the class A investor interest exceeds the amount
of funds available to cover those charge-offs,
and the class C investor interest and class B
investor interest have been reduced to zero, the
class A investor interest will be reduced. This
could cause the holders of the class A notes to
not receive the full amount of principal and
interest due to them. Similarly, if the amount
of charged-off receivables allocated to the
class B investor interest exceeds the amount of
funds available to cover those charge-offs and
the class C investor interest has been reduced
to zero, the class B investor interest will be
reduced. This could cause the holders of the
class B notes to not receive the full amount of
principal and interest due to them. See "Series
99-1: Defaulted Receivables; Investor Charge-
Offs".
The Class B Notes Bear The class B notes are subordinated in right of
Additional Risk Because They payment of principal to the class B notes.
Are Subordinated to the Principal payments to the class B noteholders
Class A Notes will not be made until the class A noteholders
are paid in full. This could cause the class B
noteholders to not receive the full amount of
principal due to them.
Inability of Note-holders to Some series 99-1 pay out events will cause the
Receive Full Percentage start of the regulated amortisation period
Allocation of Principal rather than the rapid amortisation period.
Collections During During a regulated amortisation period, all of
Regulated Amortisation the principal collections allocated to the
Period Could Delay investor certificates may not be used to make
Payments on Your Notes or payments of principal on the investor
cause Losses on Your Notes certificates as they would be during a rapid
amortisation period. Instead, principal payments
on the investor certificates -- and thus
ultimately on your notes -- will be limited to
the controlled deposit amount. This could cause
you to receive payments of principal slower than
you would during a rapid amortisation period.
Since some of the series 99-1 pay out events
that result in the start of a regulated
amortisation period are caused by a
deterioration in the performance of the
receivables, a delay in the principal payments
on your notes could expose you to an increased
risk of losses on your notes or a delay in
payment on your notes.
Grouping of MTN Issuer Contractual provisions will be contained in the
with Barclays For Tax security trust and cash management deed and the
Purposes Could Jeopardise other agreements to which it is a party by which
Bankruptcy Remote Status the parties to those agreements agree not to
of MTN Issuer Causing an take any actions against the MTN issuer that
Early Redemption of Your might lead to its bankruptcy. Furthermore, the
Notes or a Loss on Your MTN issuer will be contractually restricted from
Notes undertaking any business other than in
connection with the financings described in this
prospectus. In particular, the MTN issuer will
be expressly prohibited from incurring any
additional indebtedness, having any employees,
owning any premises and establishing or
acquiring any subsidiaries. Together, these
provisions ensure that the likelihood of the MTN
issuer becoming insolvent or bankrupt is remote.
Notwithstanding the steps that will be taken to
ensure that a bankruptcy of the MTN issuer will
be remote, it is likely that the MTN issuer will
be included in the Barclays group registration
for VAT purposes. If it is so included, it will
be technically liable, on a joint and several
basis, along with all other companies included
in the group registration, for the whole of the
group VAT liability. Accordingly, potential
secondary liabilities for VAT of other Barclays
companies within the same VAT group could
threaten the bankruptcy remoteness of the MTN
issuer. In addition, there are provisions in the
UK tax code that are designed to enable the UK
Inland Revenue to collect corporation tax from
one member of a group where other members of the
group have
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been involved in asset-stripping schemes that
are designed to evade corporate tax liabilities.
In rating the notes, the rating agencies have
assessed the level of reserves of the MTN issuer
and the mechanics that have been put in place so
as to minimise any such liabilities that may
fall on the MTN issuer. However, if the MTN
issuer were to become liable for the VAT or
corporate tax liabilities of another member in
the Barclays group, which the MTN issuer was
unable to meet, the UK Inland Revenue could seek
to put the MTN issuer in bankruptcy. This could
cause an early redemption of your notes or
losses on your notes.
Issuance of Additional The MTN issuer may issue new series of medium
Series May Adversely Affect term notes in connection with the issuance of
Your Rights by Diluting new series of investor certificates. The holder
Your Voting Power of the medium term notes of each series --
including the issuer -- may require the MTN
issuer, as investor beneficiary, to take action
or direct actions to be taken under the
declaration of trust and trust cash management
agreement or a supplement. However, the consent
or approval of holders of a percentage of the
total principal balance of the medium term notes
of all series might be necessary to require or
direct those actions. These actions include
terminating the appointment of the servicer
under the beneficiaries servicing agreement or
the trust cash manager under the declaration of
trust and trust cash management agreement. Thus,
the holder of any new series of medium term
notes will have voting rights that will reduce
the percentage interest of the issuer as holder
of medium term notes. Holders of medium term
notes of other series -- or persons with the
power to direct their actions -- may have
interests that do not coincide with the
interests of the issuer -- or the persons with
the power to direct the issuer. This may
restrict your ability to ultimately direct the
MTN issuer to take the actions referred to
above. This would not happen if the MTN issuer
could not issue new series of medium term notes.
Insolvency of the None of the MTN issuer, the receivables trustee
Transferor May Result in an or the issuer has undertaken or will undertake
Inability to Repurchase any investigations, searches or other actions to
Receivables verify the details of the receivables -- other
than steps taken by the issuer to verify the
details of the receivables that are presented in
this prospectus -- or to establish the
creditworthiness of any cardholder on the
designated accounts. The MTN issuer, receivables
trustee and the issuer will rely solely on the
representations given by the transferor to the
receivables trustee about the receivables, the
cardholders on the designated accounts, the
designated accounts and the effect of the
assignment of the receivables.
If any representation made by the transferor
about the receivables proves to have been
incorrect when made, the transferor will be
required to repurchase the affected receivables
from the receivables trustee. If the transferor
becomes bankrupt or insolvent, the receivables
trustee may be unable to compel the transferor
to repurchase receivables, and you could incur a
loss on your investment or an early redemption
of your notes.
Insolvency of the Issuer, The ability of each of the issuer, the MTN
the MTN Issuer or the issuer and the receivables trustee to meet its
Receivables Trustee Could obligations under the notes, the MTNs and the
Cause an Early Redemption receivables securitisation agreement and the
of Your Notes or Losses on declaration of trust and trust cash management
Your Notes agreement will depend upon their continued
solvency.
A company that has assets in the United Kingdom
will be insolvent if its
liabilities exceed its assets or if it is unable
to pay its debts as they fall due. Each of the
issuer, the MTN issuer and the receivables
trustee have been structured so that the
likelihood of their becoming insolvent is
remote. Each of these entities will be
contractually restricted from undertaking any
business other than in connection with the
financings described in this prospectus. They
each will be expressly prohibited from incurring
any additional indebtedness, having any
employees, owning any premises and establishing
or acquiring any subsidiaries. Contractual
provisions will be contained in each of the
agreements to which they are a party that will
prohibit the other parties to those agreements
from taking any actions against these entities
that might lead to their bankruptcy. Together,
these provisions help ensure that the likelihood
of any of these entities becoming insolvent or
bankrupt is remote.
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Notwithstanding these actions, it is still
possible that the issuer, the MTN issuer or the
receivables trustee could become insolvent. If
this were to occur, you could suffer losses on
your notes or your notes could be redeemed
before their scheduled payment date.
Application of Consumer The primary statute dealing with consumer credit
Credit Act 1974 May in the United Kingdom is the Consumer Credit Act
Impede Collection Efforts 1974. The Consumer Credit Act 1974 applies to
and Could Cause Early the transactions occurring on the designated
Redemption of Your Notes or accounts and the credit or charge card
Losses on Your Notes agreements. This may have consequences for your
investment in a note, including the possible
unenforceability of the underlying credit or
charge card agreements and possible liability
for misrepresentation or breach of contract.
If a credit or charge card agreement has not
been executed or modified in accordance with the
Consumer Credit Act, it may be unenforceable
against a cardholder without a court order --
and sometimes may be completely unenforceable.
In common with other UK credit card issuers,
some of Barclaycard's credit and charge card
agreements and some of the transactions that
occur on the designated accounts do not comply
with the Consumer Credit Act or other consumer
protection legislation. As a result, these
agreements will be unenforceable by Barclaycard
against the cardholders without a court order
and could be completely unenforceable. The
transferor gives no guarantee that a court order
could be obtained if required. The transferor
estimates that approximately 1% of the aggregate
principal receivables in the designated accounts
on the cut-off date will be completely
unenforceable. Barclaycard does not anticipate
any material increase in the percentage of these
receivables in the securitised portfolio. The
accounts that do not comply with the Consumer
Credit Act are still legal, valid and binding
obligations of the cardholder and it will still
be possible to collect payments and demand
arrears from cardholders willing to pay their
debt. However, losses arising on these accounts
will be written off and borne by the investor
beneficiary and transferor beneficiary based on
their interests in the receivables trust.
Transactions involving the use of a credit or
charge card in the United Kingdom may constitute
transactions under debtor-creditor-supplier
agreements for the purposes of section 75 of the
Consumer Credit Act. A debtor-creditor-supplier
agreement includes an agreement by which the
creditor, with knowledge of its purpose,
advances funds to finance the debtor's purchase
of goods or services from a supplier.
Section 75 of the Consumer Credit Act provides
that if a supplier breaches a contract between
the supplier and a cardholder in a transaction
under a debtor-creditor-supplier agreement, or
if the supplier makes a misrepresentation about
the contract, the creditor may also be liable to
the cardholder for the breach or
misrepresentation. An example of a supplier's
breach of contract would include the supplier
selling the cardholder merchandise that is
defective or unsuitable for its purpose. In
these circumstances, the cardholder may have the
right to reduce the amount owed to the
transferor under his or her credit or charge
card account. This right would survive the sale
of the receivables to the receivables trustee.
As a result, the receivables trustee may not
receive the full amount otherwise owed by a
cardholder. However, the creditor will not be
liable where the cash price of the item or
service supplied underlying the claim is less
than L100 or greater than L30,000.
The receivables trustee has agreed to indemnify
the transferor for any loss suffered by the
transferor from a cardholder claim under section
75 of the Consumer Credit Act. This indemnity
cannot exceed the original outstanding principal
balance of the affected charges on a designated
account.
The receivables trustee's indemnity will be
payable only from excess spread on the
receivables. Any amounts that the transferor
recovers from the supplier will reduce the
transferor's loss for purposes of the
receivables trustee's indemnity. This is
described under "Series 99-1". The transferor
will have rights of indemnity against suppliers
under section 75 of the Consumer Credit Act. The
transferor may also be able to charge-back the
transaction in dispute to the supplier under the
operating regulations of VISA or MasterCard.
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If the transferor's loss for purposes of the
receivables trustee's indemnity exceeds the
excess spread available to satisfy the loss, the
transferor interest in the receivables trust
will be reduced by the amount of the excess
loss.
These consequences could result in you incurring
a loss on your notes or an early redemption of
your notes.
Failure to Notify Cardholders The transfer by the transferor to the
of Transfer of Receivables receivables trustee of the benefit of the
Could Delay or Reduce receivables is governed by English law and does
Payments on Your Notes not give the receivables trustee full legal
title to the receivables. Notice to the
cardholders of the transfer would perfect the
legal title of the receivables trustee to the
receivables. The receivables trustee has agreed
that notice of the transfer will not be given to
cardholders, unless the transferor's long term
senior unsecured indebtedness as rated by either
of Moody's or Standard & Poor's were to fall
below * or *, respectively. The lack of notice
has several legal consequences that could delay
or reduce payments to you.
Until notice is given to a cardholder, the
cardholder will discharge his or her obligation
under the designated account by making payment
to the transferor.
Prior to the insolvency of the transferor,
unless notice was given to a cardholder who is a
depositor or other creditor of the transferor,
equitable set-offs may accrue in favor of the
cardholder against his or her obligation to make
payments to the transferor under the designated
account. These rights may result in the
receivables trustee receiving reduced payments
on the receivables. The transfer of the benefit
of any receivables to the receivables trustee
will continue to be subject both to any prior
equities that a cardholder had and to any
equities the cardholder may become entitled to
after the transfer. Where notice of the transfer
is given to a cardholder, however, some rights
of set-off may not arise after the date notice
is given.
Failure to give notice to the cardholder means
that the receivables trustee would not take
priority over any interest of a later
encumbrancer or transferee of the transferor's
rights who has no notice of the transfer to the
receivables trustee. This could lead to a loss
on your investment in the notes.
Failure to give notice to the cardholder also
means that the transferor or the cardholder can
amend the card agreement without obtaining the
receivables trustee's consent. This could
adversely affect the receivables trustee's
interest in the receivables, which could lead to
a loss on your notes.
Competition in the UK The bank card industry in the United Kingdom is
Card Industry Could highly competitive. There is increased
Lead to Early Redemption competitive use of advertising, target marketing
of Your Notes and pricing competition in interest rates and
annual cardholder fees as both traditional and
new card issuers seek to expand or enter the UK
market and compete for customers.
From January 1999 to July 1999, it is estimated
that new card issuers accounted for 50% of the
$212.5 million spent on card advertising in the
United Kingdom. Furthermore, new card issuers
who rely on customer loyalty have unique ways of
reaching and attracting their customers. For
example, major supermarket retailers are
promoting the use of their own cards through
extensive in-store campaigns and low
introductory interest rates. Also a number of
new card issuers have entered the UK market from
the United States. Some of these issuers have
experience gained in the United States greater
than that of Barclaycard in the utilisation of
data relating to cardholders to maximize
portfolio performance.
As a result of this competition, certain
competitors are able to offer cards to selected
customers on terms more favourable than those
offered by Barclaycard.
This competitive environment may affect the
originator's ability to originate new accounts
and generate new receivables. If the rate at
which new receivables are generated declines
significantly and if the transferor is unable to
nominate additional accounts for the receivables
trust, a series 99-1 pay out event could occur.
A series 99-1 pay out event could result in you
receiving principal on your notes earlier than
expected.
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Social, Legal, Political and Changes in card use, payment patterns, amounts
Economic Factors of interest incurred on credit cards and the
Affect Card Payments rate of defaults by cardholders may result from
and Are Unpredictable a variety of social, legal, political and
economic factors in the United Kingdom. Social
factors include changes in public confidence
levels, attitudes toward incurring debt and
perception of the use of credit and charge
cards. Economic factors include the rate of
inflation, the unemployment rate and relative
interest rates offered for various types of
loans. Political factors include lobbying from
interest groups, such as consumers and
retailers, and government initiatives in
consumer and related affairs: for example, a
non-statutory review of banking services was
announced by the UK Chancellor of the Exchequer
in November 1998 which is wide ranging and might
encompass the manner and levels of charges
earned by credit card issuers from cardholders
and merchant acquirers. We are unable to
determine and have no basis on which to predict
accurately whether, or to what extent, social or
economic factors will affect future use of
credit, default rates, amounts of interest
incurred on credit cards or cardholder repayment
patterns.
A Change in the Terms of the Only the receivables arising under the
Receivables May Adversely designated accounts will be transferred to the
Affect the Amount or Timing receivables trustee. The originator will
of Collections and May Cause continue to own those accounts. As the owner of
an Early Redemption the accounts, the originator retains the right
or a Downgrade of Your Notes to change the terms of the accounts. For
example, the originator could change the monthly
interest rate, reduce or eliminate fees on the
accounts or reduce the required minimum monthly
payment.
The originator may change the terms of the
accounts to maintain its competitive position in
the UK credit and charge card industry. Changes
in interest and fees could lower the amount of
finance charge receivables generated by those
accounts. This could cause a pay out event to
occur, which might cause you to receive
principal payments on your notes earlier than
expected. This could also cause a reduction in
the credit ratings on your notes.
Principal on Your Notes The receivables in the receivables trust may be
May Be Paid Earlier paid at any time and we cannot assure you that
Than Expected new receivables will be generated or will be
Creating a Reinvestment generated at levels needed to maintain the
Risk to You or Later than receivables trust. To prevent the early
Expected redemption of the notes, new receivables must be
generated and added to the receivables trust or
new accounts must be originated and nominated
for the receivables trust. The receivables trust
is required to maintain a minimum amount of
receivables. The generation of new receivables
or receivables in new accounts is affected by
the originator's ability to compete in the
current industry environment and by customers
changing borrowing and payment patterns. If
there is a decline in the generation of new
receivables or new accounts, you may be repaid
your principal before the expected date.
One factor that affects the level of finance
charge and principal collections is the extent
of convenience usage. Convenience use means that
the cardholders pay their account balances in
full on or before the due date. The cardholder,
therefore, avoids all finance charges on his or
her account. An increase in the convenience
usage by cardholders would decrease the
effective yield on the accounts and could cause
a * and therefore possibly an early redemption
of your notes.
No premium will be paid for an early redemption
of your notes. If you receive principal on your
notes earlier than expected, you may not be able
to reinvest the principal at a similar rate of
return. This would result in your suffering a
loss on your notes.
Alternatively, a decrease in convenience use may
reduce the principal payment rate on the
accounts. This could result in you receiving the
principal on your notes later than expected.
Credit Enhancement May Credit enhancement for your notes is limited.
Be Insufficient to Prevent a The only sources of payment for your notes are
Loss on Your Notes the assets of the issuer pledged to secure
payment of your notes. If problems develop with
the receivables, such as an increase in losses
on the receivables, or if there are problems in
the collection and transfer of the receivables
to the trust, or if the swap counterparty fails
to make payments on the dollar swap agreements,
it is possible that you may not
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receive the full amount of interest and
principal that you would otherwise receive.
Issuance of Additional Series Series 99-1 is the first series created within
by the Receivables the receivables trust. Additional series may
Trustee on Behalf of from time to time be created within the
the Receivables Trust receivables trust. Any new series of investor
May Adversely Affect certificates -- and medium term notes and notes
Payments on Your Notes -- will also be payable from the receivables in
the receivables trust. The principal terms of
any new series of investor certificates will be
contained in a new series supplement to the
declaration of trust and trust cash management
agreement. The terms of a new series contained
in the new series supplement to the declaration
of trust and trust cash management agreement
will not be subject to your prior review or
consent.
The principal terms of a new series may include
methods for determining investor percentages and
allocating collections, provisions creating
different or additional security or other credit
enhancement for the new series, provisions
subordinating the new series to other series,
and other amendments or supplements to the
declaration of trust and trust cash management
agreement that apply only to the new series. It
is a condition to the issuance of a new series
that each rating agency that has rated any debt
ultimately payable from a prior series of
investor certificates -- including your notes --
that is outstanding confirms in writing that the
issuance of the new series will not result in a
reduction or withdrawal of its rating.
However, the terms of a new series could
adversely affect the timing and amounts of
payments on any other outstanding series,
including series of which your notes are a part.
Credit Quality of the The transferor may designate additional credit
Receivables Trust's Assets or charge card accounts as designated accounts
May Be Eroded by the and offer the receivables trustee an assignment
Addition of New Accounts of the receivables arising under the additional
accounts. The transferor may be required at
times to nominate additional accounts as
designated accounts. These accounts may include
accounts that were originated using criteria
that are different from those applicable to the
accounts from which receivables were originally
assigned to the receivables trustee. For example
they could be originated at a different date
with different underwriting standards, or they
could be acquired from another institution that
used different underwriting standards.
Consequently, there can be no assurance that
accounts that become designated accounts in the
future will have the same credit quality as the
designated accounts on the closing date.
Interest Rate Payable by the The majority of the designated accounts have
Receivables Trustee on Behalf monthly interest rates that are constant, except
of the Receivables Trust for Barclaycard's ability to change the interest
May Increase Without a rate at its discretion. The interest rate paid
Corresponding Change in to the MTN issuer will be based on the London
Card Rates Potentially interbank offered rate for deposits in sterling,
Causing a Loss on Your which changes from time to time. Accordingly,
Notes or Early Redemption the interest payable to the MTN issuer could
of Your Notes increase without a corresponding increase in the
amount of finance charge collections unless the
originator were to increase the monthly interest
rate on the accounts. If this occurred, you
could suffer a loss on your notes or a pay out
event could occur causing an early redemption of
your notes.
Commingling of Collections Collections from cardholders for the designated
with Transferor May Delay accounts and other Barclaycard cardholders will
or Reduce Payments on initially be paid to an operating account of the
Your Notes transferor. The transferor has declared a trust
over the operating account for collections that
are deposited in it. Collections on the
designated accounts will be transferred to the
trustee collection account within two business
days of being identified.
For the limited time that collections on the
designated accounts are in the operating
account, they may be commingled with other funds
of the transferor or future beneficiaries and
they may be untraceable. Consequently, if the
transferor were to become insolvent, there may
be a delay in the transfer of collections to the
receivables trustee if the transferor -- or a
liquidator or administrator of the transferor --
attempted to freeze the operation of the
operating account pending completion of any
rights of tracing. This could ultimately cause a
delay or reduction in the payments you receive
on your notes.
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If the Transferor Opts to The transferor may opt to cause a percentage of
Treat a Portion of Principal receivables that would otherwise be treated as
Receivables as Finance principal receivables to be treated as finance
Charge Receivables, an charge receivables. The transferor may also
Early Redemption of Your reduce the percentage or stop using the
Notes Could Occur or Could percentage at any time. If the transferor were
Be Delayed to exercise this option, it could prevent a pay
out event from occurring because of a reduction
of the portfolio yield, which could delay an
early redemption of your notes at a time when
the performance of the receivables is
deteriorating. However, this option, if
exercised, will reduce the aggregate amount of
principal receivables, which may increase the
likelihood that the transferor will be required
to designate additional accounts from which
receivables will be assigned to the receivables
trustee. If the transferor were unable to
designate additional accounts, a pay out event
could occur and you could receive payments of
principal on your notes before you expect them.
If Optional Early Redemption When the total principal balance of the notes is
Occurs, It Will reduced to less than 10% of their original total
Result in an Early Redemption principal balance, the issuer has the option to
of Your Notes and a redeem the notes in full. This early redemption
Reinvestment Risk may result in an early return of your
investment. No premium will be paid in the event
of an exercise of the early redemption option.
If you receive principal on your notes earlier
than expected, you may not be able to reinvest
the principal at a similar rate of return.
If Cardholders Are If the receivables trust has a high
Concentrated in a Geographic concentration of receivables from cardholders
Region, Economic Downturn in located in a single region, an economic downturn
that Region May Adversely in that region may have a magnified adverse
Affect Collections of effect on the receivables trust because of that
Receivables concentration. This prospectus contains a
geographic breakdown of accounts and the amount
of receivables generated in the regions of the
United Kingdom.
On 30 September, 1999, approximately 36.86% of
the outstanding balance of receivables were from
cardholders located in London and 11.71% of the
outstanding balance of receivables were from
cardholders located in the Midlands. No other
region currently accounts for more than 10% of
the outstanding balance of the receivables.
These concentration levels may change in the
future. See "The Receivables -- Geographic
Distribution of Accounts -- Securitised
Portfolio".
We are not aware of any existing adverse
economic conditions affecting either of these
regions that would be material to you. Future
adverse economic conditions affecting either of
these regions, however, could adversely affect
the performance of the receivables which could
result in a loss on your notes.
The Year 2000 Problem Could Many computer programs and electronic components
Disrupt the Generation and that incorporate computer programs use only two
Servicing of the Receivables digit references for dates and date dependent
functions and therefore require upgrading or
replacement to recognise and properly perform
functions involving dates before and after
1 January, 2000.
Barclays Bank PLC has been upgrading and
replacing its mission critical computer systems
to address the Year 2000 problem, and expects to
be able to perform its servicing and originator
functions without significant interruption.
Barclays Bank PLC has also been communicating
with its key suppliers to monitor their efforts
in addressing the Year 2000 problem. One
company's system failure could directly or
indirectly affect another company. If Barclays
Bank PLC or any of its suppliers fail to
adequately address the Year 2000 problem, the
generation and servicing of receivables could be
disrupted and payments to you could be reduced
or delayed.
Adoption of the Euro by the Before your notes have matured, the euro could
United Kingdom Would Have become the lawful currency of the United
Uncertain Effects on Your Kingdom. If that were to happen, all amounts
Notes payable on the MTNs and the notes -- including
the sterling payments owed to the swap
counterparty on the dollar swap agreement but
not any dollar payments made on the class A3
notes, class B notes or class C notes by the
swap counterparty -- may become payable in euro
and the law may allow the issuer to redenominate
the class A1 notes into euro. If the notes are
outstanding when the euro becomes the lawful
currency of the United Kingdom, we intend to
13
<PAGE>
make payments on the notes according to the then
market practice of payment on debts. We are
uncertain what effect, if any, the adoption of
the euro by the United Kingdom may have on
investors in the notes.
Adoption of Proposed European In May 1998, the European Commission presented
Directive on the Taxation to the Council of Ministers of the European
of Savings Could Cause Union a proposal to oblige member states to
Withholding Tax to be Applied adopt either a "withholding tax system" or an
to Payments on the Notes "information reporting system" for interest,
discounts and premiums on debt instruments. It
is not clear whether this proposal will be
adopted, and if it is adopted, whether it will
be adopted in its current form and if it is
adopted what the impact will be on your notes.
The withholding tax system would require a
paying agent established in a member state to
withhold tax at a minimum rate of 20 per cent.
from any interest, discount or premium paid to
an individual resident in another member state
unless the individual presents a certificate
obtained from the tax authorities of the member
state in which the individual is resident
confirming that those authorities are aware of
the payment due to the individual. The
information reporting system would require a
member state to supply to other member states
details of any payment of interest, discount or
premium made by paying agents within its
jurisdiction to an individual resident in
another member state. A member state would be
free to choose which of these two systems to
adopt.
The term "paying agent" is widely defined and
includes an agent who collects interest,
discounts or premiums on behalf of an individual
beneficially entitled to the payment. If this
proposal is adopted, it will not apply to
payments of interest, discount and premiums made
before 1 January 2001.
You May Be Subject to UK If any of the following events occur, you will
Withholding Taxes If be entitled to receive definitive notes for your
Definitive book-entry interests:
Notes Are issued * as a result of a change in UK or U.S. law, the
for Book-Entry Interests issuer or any paying agent is or will be
required to make any deduction or withholding
on account of tax from any payment on the
notes that would not be required if the notes
were in definitive form;
* if you hold your book-entry interests through
DTC, DTC has notified the issuer that it is
unwilling or unable to hold the
certificateless depository interests or to
continue as a clearing agency under the United
States Securities and Exchange Act of 1934 and
the issuer cannot appoint a successor;
* if you hold your book-entry interests through
Euroclear or Cedelbank, either Euroclear or
Cedelbank is closed for a continuous period of
14 days -- other than by reason of holiday,
statutory or otherwise -- or announces an
intention permanently to cease business and no
alternative clearance system satisfactory to
the note trustee is available;
* if the depository notifies the issuer that it
is at any time unwilling or unable to continue
as depository and the issuer cannot appoint a
successor; or
* the principal amount of the notes is
accelerated because an event of default has
occurred.
Under current UK tax law, following the issuance
of definitive notes, interest payable on the
definitive notes will be subject to UK
withholding tax -- currently at the rate of 20
per cent. -- subject to the terms of any double
tax treaty or other available relief. Neither
the issuer nor any other person will be obliged
to pay additional amounts to compensate you for
any withholding tax.
If Stamp Duty Becomes Payable, Stamp duty is a United Kingdom tax levied on
it May Cause a Loss on documents which effect conveyances on sale.
Your Notes Stamp duty is charged at the rate of 3.5 per
cent. of the sale price, insofar as the sale
price can be ascertained at the time when the
relevant document is executed. Barclays has
received legal advice, subject to sight of final
documents, that stamp duty will not be payable
on the sale of the receivables to the
receivables trustee. The sale of the receivables
to the receivables trustee will be made by way
of an offer document delivered in accordance
with the receivables securitsation agreement,
with the receivables trustee being permitted to
accept the offer, if it so chooses, by way of
the transfer of the purchase price from the
receivables trustee to the transferor.
14
<PAGE>
Accordingly, the sale is effected by the act of
acceptance of the receivables trustee, not by
the offer or the receivables securitisation
agreement. In addition, there will be no
memorandum of sale.
In order to fulfil all of the conditions for
avoiding stamp duty on the sale of the
receivables, it is necessary for Barclays to
execute a transfer of the receivables which are
the subject of the offer and to have the
transfer adjudicated free of duty by the United
Kingdom Stamp Office. Under current law and
practice, there is in effect no time limit for
Barclays to do this.
Barclays has agreed in the receivables
securitisation agreement to seek a final
adjudication with the United Kingdom Stamp
Office within six months after the closing date
that no stamp duty is payable on a transfer of a
part of the receivables comprised in the offer.
The issuer has agreed to indemnify the MTN
issuer for any stamp duty which it becomes
liable to pay. In the circumstance where the
adjudication is not successful, the issuer has
undertaken to obtain a loan facility under which
the MTN issuer would be permitted to draw to
fund any liability to stamp duty. If the issuer
is unable to secure the necessary stamp duty
facility, the MTN issuer may be unable to
enforce its rights in the receivables if
sufficient funds are not available from excess
spread to pay the stamp duty and to have the
transfer of the receivables stamped. This could
cause a reduction in the payments you receive on
your notes.
Taxable Nature of MTN Issuer In order for the closing of the sale of the
and Issuer Could Cause Losses notes to occur, an opinion must be obtained from
on Your Notes UK tax advisors that neither the MTN issuer nor
the issuer will have any liability to UK tax
apart from a liability to United Kingdom
corporation tax on the profit margin reflected
in their respective profit and loss accounts --
adjusted to take account of the non-deductible
expenses or losses as may be specified in the
opinion. Subject to finalisation of documents,
UK tax advisors expect to deliver the relevant
opinion to the appropriate rating standard.
An opinion of UK tax solicitors, however, is not
binding on the courts, and no specific
transaction rulings on this issue will be
obtained from the UK Inland Revenue. In
addition, there is no case law authority on a
number of features of the transactions that
raise difficult questions.
If the MTN issuer or the issuer were liable for
United Kingdom corporation tax to a greater
extent than stated in the first paragraph of
this risk factor, you could suffer losses on
your notes.
Treatment of Notes as Equity There are no regulations, published rulings or
Interests in a Passive Foreign judicial decisions addressing the
Investment Company Could characterisation for U.S. federal income tax
Have Adverse Tax Consequences purposes of securities with terms similar to the
for U.S. Noteholders notes. Further, because of the level of
capitalisation of the issuer, special U.S.
federal income tax counsel to the issuer is not
able to opine as to the appropriate
classification of the notes as debt or as
equity.
Although no ruling or legal opinion will be
obtained on the classification of the notes as
debt or equity for U.S. federal income tax
purposes, the issuer intends to take the
position that the notes are debt of the issuer
for U.S. federal income tax purposes. Based on
this position, the class A3 notes and class B
notes may be considered to be issued with
original issue discount. The accrual of original
issue discount may require holders to recognise
income in advance of the receipt of payments of
it.
If the notes were not treated as debt, they
likely would be treated as equity in the issuer
for U.S. federal income tax purposes. Further,
the issuer likely would be treated as a "passive
foreign investment company" for U.S. federal
income tax purposes, and holders of notes
treated as equity likely would be treated as
holding shares in a passive foreign investment
company. Although two different tax elections
generally are available to shareholders in
passive foreign investment companies, either of
which may mitigate certain adverse tax
consequences arising from investment in a
passive foreign investment company, the issuer
does not intend to provide information which
would allow investors to make the first
election. Further, the applicability of the
second election, known as a mark-to-market
election, is dependent upon certain facts --
such as the frequency of secondary market
trading of the notes
15
<PAGE>
-- as to which there is uncertainty.
Accordingly, no assurance is possible about the
availability of the second election. As a
result, holders of notes which are deemed to be
equity interests in the issuer may be subject to
a special tax regime which would tax gain at
ordinary income rates and apply an interest
charge on gain and excess distributions. See
"United States Federal Income Tax Consequences
-- Investment in a Passive Foreign Investment
Company."
Limited Nature of Credit Each credit rating assigned to your notes
Ratings Assigned to Your reflects the rating agency's assessment only of
Notes the likelihood that interest and principal will
be paid to you by the final redemption date, not
that it will be paid when expected or scheduled.
These ratings are based on the rating agencies'
determination of the value of the receivables,
the reliability of the payments on the
receivables, the creditworthiness of the swap
counterparty and the availability of credit
enhancement.
The ratings do not address the following:
* the likelihood that the principal or interest
on your notes will be redeemed, as expected on
the scheduled redemption dates or interest
payment dates, respectively;
* the possibility of the imposition of United
Kingdom or European withholding tax;
* the marketability of the notes, or any market
price; or
* that an investment in the notes is a suitable
investment for you.
A rating is not a recommendation to purchase,
hold or sell the notes.
Ratings Can Be Lowered or Any rating agency may lower its rating or
Withdrawn After You Purchase withdraw its rating if, in the sole judgement of
Your Notes the rating agency, the credit quality of the
notes has declined or is in question. If any
rating assigned to your notes is lowered or
withdrawn, the market value of your notes may be
reduced.
Termination of Swap The issuer has the right, but not the
Agreements Could Result in an obligation, to direct the swap counterparty to
Early Redemption of or assign the dollar swap agreements to a
Reduced Payments to Your replacement swap counterparty if the long-term
Notes credit rating of the swap counterparty is
withdrawn or reduced below "Aa3" by Moody's or
its short-term credit rating is reduced below
"A-1+" by Standard & Poor's and the swap
counterparty has not remedied the event under
the terms of the dollar swap agreements. We
cannot assure you, however, that the issuer will
be able to find a replacement swap counterparty
and assign the dollar swap agreements in this
event.
In particular, a dollar swap agreement may be
terminated if as a result of a change in
applicable law, withholding taxes would be
imposed -- by any jurisdiction -- on any
payments made or required to be made to the note
trustee by the swap counterparty under the
dollar swap agreement and there are not any
reasonable measures that the swap counterparty
can take to avoid their imposition. In addition,
a dollar swap agreement may be terminated if the
issuer determines that the note trustee or the
paying agent has or will become obligated to
deduct or withhold amounts from payments on the
related class of notes to be made to any of the
related noteholders on the next payment date,
for any tax, assessment or other governmental
charge imposed by the United Kingdom or any
political subdivision or taxing authority of the
United Kingdom on the payments as a result of
any change in its laws or regulations or
rulings, or any change in official position
regarding the application or interpretation of
its laws, regulations or rulings, which change
or amendment becomes effective on or after the
date the notes are issued, and there are no
reasonable measures the issuer can take to avoid
the tax or assessment.
A payment default by the swap counterparty or a
default in the payment of interest by the issuer
to the swap counterparty if funds are available
to pay interest will result in a termination of
any dollar swap agreement. The dollar swap
agreements may also terminate following a
material breach in a representation or covenant
by the swap counterparty, the insolvency of the
issuer or the swap counterparty or changes in
law resulting in illegality. The
16
<PAGE>
euro swap agreement may be terminated on the
same basis as the dollar swap agreements -- but
regarding the class A2 notes and noteholders.
The swap agreements may also be terminated upon
the occurrence of certain other events described
under "The Swap Agreements".
The termination without replacement of any of
the dollar swap agreements or the euro swap
agreement will result in an event of default
under the notes and a pay out event that results
in a rapid amortisation period. We cannot assure
you that either swap agreement will not
terminate prior to the payment in full of the
principal balance of your notes. If either swap
agreement terminates prior to the payment in
full of the principal balance of your notes, you
could receive payments of principal on your
notes before you expect them.
Withholding Taxes on Swap The issuer and the swap counterparty will each
Payments or Your Notes May represent and warrant in each swap agreement
Reduce the Amount You Are that, under current applicable law, each of them
Paid on Your Notes is entitled to make all payments required to be
made by them under the swap agreement free and
clear of, and without deduction for or on
account of, any taxes, assessments or other
governmental charges -- which we refer to as
withholding taxes. However, neither the issuer
nor the swap counterparty will be required to
indemnify the other party for any withholding
taxes imposed on payments under a swap agreement
as a result of a change in applicable law.
If any withholding taxes -- by any jurisdiction
-- would be imposed on any payments made or
required to be made by the swap counterparty to
the issuer under a swap agreement as a result of
a change in applicable law and the obligation to
deduct or withhold cannot be avoided by the swap
counterparty, the issuer may terminate the swap
agreement, but only if the issuer has been
directed to do so by the relevant noteholders.
If the relevant noteholders do not elect to
terminate the swap agreement, then payments to
that class of noteholders will be reduced pro
rata by an amount withheld for any withholding
taxes.
In addition, if any UK withholding taxes would
be imposed on any payments made or required to
be made by the note trustee or the paying agent
to the class A3 noteholders or the class B
noteholders on their class A3 notes or class B
notes, the issuer will terminate the relevant
dollar swap agreement if the issuer has been
directed to do so by the relevant noteholders.
Upon the imposition of any UK withholding taxes,
the payments to the class A3 noteholders or
class B noteholders will be reduced pro rata by
any amount withheld.
Payment of an Early If a dollar swap agreement is terminated before
Termination Payment to the its scheduled termination date, the issuer or
Swap Counterparty May the swap counterparty may be liable to make an
Reduce Payments on Your Notes early termination payment to the other party.
The amount of any early termination payment will
be based on the market value of the terminated
swap agreement. This market value will be
computed on the basis of market quotations of
the cost of entering into a swap transaction
with the same terms and conditions that would
have the effect of preserving the respective
full payment obligations of the parties. Any
early termination payment could, if interest
rates or the sterling -- dollar exchange rate
change significantly, be substantial.
Any early termination payment made by the issuer
to the swap counterparty under a dollar swap
agreement will be made from principal
collections allocated to the relevant class of
notes. That will cause the sterling amounts
available for conversion to dollars, and
possibly your payments, to be reduced -- perhaps
substantially. If available principal
collections allocated to your notes are
insufficient to pay the early termination
payment, the balance of the early termination
payment will be paid to the extent of available
principal collections allocated to your notes on
the next payment date together with interest on
the unpaid early termination payment carried
forward from the previous payment date. See "The
Swap Agreements".
17
<PAGE>
Introduction
You can find a listing of the pages where terms used in this prospectus
are defined under the caption "Index of Terms for Prospectus" beginning on page
112.
U.S. Dollar Presentation
Unless this prospectus provides a different rate, the translations of
pounds sterling into dollars have been made at the rate of 1.6473, which is the
closing price on 30 September, 1999 for the dollar/sterling exchange rate as
displayed on the Bloombergu Service under GBP Currency HP. Using this rate does
not mean that pound sterling amounts actually represent those U.S. dollar
amounts or could be converted into dollars at that rate.
References throughout this document to "L", "pounds" or "pounds sterling"
are to the lawful currency of the United Kingdom of Great Britain and Northern
Ireland. References in this document to "US$", "$" or "dollars" are to the
lawful currency of the United States of America. References in this document to
"[EURO]" or "euro" are to the single currency introduced at the start of the
third stage of European Economic and Monetary Union under the Treaty
establishing the European Communities, as amended by the Treaty on European
Union.
The Issuer
The issuer was formed in England and Wales on June 24, 1999 as Harpmist
PLC. It passed a special resolution to change its name to Gracechurch Card
Funding (No. 1) PLC on 10 September, 1999. Its registered office and principal
place of business are located at 200 Aldersgate Street, London EC1A 4JJ, United
Kingdom.
All of its issued share capital is held by Gracechurch Card (Holdings)
Limited. It has a fiscal year end date of 31 December.
The issuer was formed principally to:
* issue the notes;
* enter into all financial arrangements in order to issue the notes;
* purchase the MTNs; and
* enter into all the documents necessary to purchase the MTNs.
Directors and Secretary
The following sets out the directors of the issuer and their business
addresses and principal activities. Because the issuer is organised as a
special purpose company and will be largely passive, it is expected that the
directors of the issuer in that capacity will participate in its management to
a limited extent.
<TABLE>
<CAPTION>
Name Nationality Business Address Principal Activities
- ------------------------------- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C> <C>
Peter Stuart Crook British 1234 Pavilion Drive,
Northampton NN4 7SG Finance Director
David Roger Finney British 155 Bishopsgate, London
EC2M 3UU Trust Official
David Donald Needham British 155 Bishopsgate, London
EC2M 3UU Trust Official
Peter Michael Hills British 155 Bishopsgate, London
EC2M 3UU Trust Official
(alternative director)
</TABLE>
Clifford Chance Secretaries will provide the issuer with general
secretarial, registrar and company administration services on behalf of David
Roger Finney. The fees of Clifford Chance Secretaries for providing such
services will be included in the MTN Issuer Costs Amounts. See "Series 99-1:
Allocation, Calculation and Distribution of Finance Charge Collections to the
MTN Issuer".
The secretary of the issuer:
<TABLE>
<CAPTION>
Secretary's Name Business Address
------------------------------------ -------------------------------------------
<S> <C>
David Roger Finney 155 Bishopsgate, London EC2M 3TG
</TABLE>
18
<PAGE>
The net proceeds of the sale of the notes will be used by the issuer to
purchase the MTNs. The issuer will be prohibited by the trust deed and the
terms and conditions of the notes from engaging in business other than:
* the business described in this prospectus;
* preserving and exercising its rights under the notes, the deed of
charge, the paying agency and agent bank agreement, the depository
agreement, the trust deed, the expenses loan agreement, the swap
agreements, the corporate services agreement and the underwriting
and subscription agreements for the notes; and
* purchasing the series 99-1 MTNs.
The issuer's ability to incur, assume or guarantee debt will also be
restricted by the trust deed and the terms and conditions of the notes.
Barclays does not own, directly or indirectly, any of the share capital of
the issuer or the receivables trustee.
Management's Discussion And Analysis Of Financial Condition
Sources of Capital and Liquidity
The issuer's source of capital will be the net proceeds of the offering of
the notes.
The issuer's primary sources of liquidity will be payments of interest and
principal on the MTNs and borrowings under the expenses loan agreement.
Results of Operations
As of the date of this prospectus, the issuer does not have an operating
history. Because the issuer does not have an operating history, we have not
included in this prospectus any historical or pro forma ratio of earnings to
fixed charges. The earnings on the MTNs, the interest costs of the notes and
the related operating expenses will determine the issuer's results of
operations in the future. The income generated on the MTNs will be used to pay
principal and interest on the notes.
Use Of Proceeds
The net proceeds of the issue of the class A notes, the class B notes and
the class C notes will be L[*]. The fees and commissions payable on the issue
of the notes will be deducted from the gross proceeds of the issue. The issuer
will use its reasonable endeavours to make a drawing under the expenses loan
agreement of at least an amount equal to the fees and commissions payable on
the notes. The issuer will use the net proceeds of the issue of the notes
together with the drawing under the expenses loan agreement to purchase the
MTNs from the MTN issuer on the closing date.
The MTN Issuer
The MTN issuer was formed in England and Wales on 13 August, 1990 as
Barshelfco (No. 28) Limited. It re-registered as a public limited company and
changed its name to Barclaycard Funding PLC on 19 October, 1999. Its registered
office and principal place of business are located at 54 Lombard Street, London
EC3P 3AH, United Kingdom.
The MTN issuer is a 75% subsidiary of Barclays. It has a fiscal year end
of 31 December.
The MTN issuer was formed principally to:
* issue the medium term notes;
* enter into the financial arrangements to issue the medium term
notes;
* purchase a beneficial interest in the receivables trust; and
* enter into the documents and exercise its powers connected to the
above.
The MTN issuer has not engaged in any activities since its incorporation
other than the above.
Barclays holds 75% of the issued share capital of the MTN issuer,
representing 51% of the issued voting share capital and a 49% entitlement to
distributable profits. The remaining share capital is held by the Royal
Exchange Trust Company Limited.
19
<PAGE>
Directors and Secretary
The following sets out the directors of the MTN issuer and their business
addresses and principal activities. Because the MTN issuer is organised as a
special purpose company and will be largely passive, it is expected that the
directors of the MTN issuer in that capacity will participate in its management
to a limited extent.
<TABLE>
<CAPTION>
Name Nationality Business Address Principal
Activities
- ------------------ ----------------- ----------------- -----------------
<S> <C> <C> <C>
Peter Stuart Crook British 1234 Pavilion Finance Director
Drive,
Northampton NN4
7SG
David Roger Finney British 155 Bishopsgate, Trust Official
London EC2M 3TG
Brian Donald British 155 Bishopsgate, Trust Official
Needham London EC2M 3TG
Peter Michael British 155 Bishopsgate, Trust Official
Hills (alternate London EC2M 3TG
director)
</TABLE>
The secretary of the MTN issuer is:
<TABLE>
<CAPTION>
Secretary's Name Business Address
- ----------------------------- ------------------------------------
<S> <C>
Barcosec Limited 54 Lombard Street, London EC3P 3AH
</TABLE>
The net proceeds of the sale of the MTNs will be used by the MTN issuer to
acquire a beneficial interest in the receivables trust represented by the
investor certificates.
Management's Discussion and Analysis of Financial Condition
Sources of Capital and Liquidity
The MTN issuer's source of capital will be the net proceeds of the
offering of the MTNs.
The MTN issuer's primary source of liquidity will be payments of principal
and interest on the investor certificates.
Results of Operations
As of the date of this prospectus, the MTN issuer does not have an
operating history. Because the MTN issuer does not have an operating history,
we have not included in this prospectus any historical or pro forma ratio of
earnings to fixed charges. The earnings on series of investor certificates, the
interest costs of series of medium term notes and the related operating
expenses will determine the MTN issuer's results of operations in the future.
The income generated on the investor certificates for series 99-1 will be used
to pay principal and interest on the MTNs.
The Receivables Trustee
The receivables trustee was formed under the laws of Jersey. Its
registered office is at Normandy House, Grenville Street, St Helier, Jersey JE2
4UF and you can inspect its memorandum and articles of association at the
offices of Clifford Chance at 200 Aldersgate Street, London EC1A 4JJ, United
Kingdom.
All of the issued share capital of the receivables trustee is held by a
trust company formed in Jersey, Bedell and Cristin Trustees Limited.
The trust company must pay any capital or income of the receivables
trustee that it holds to institutions formed for charitable purposes.
The receivables trustee was formed principally to:
* act as trustee of the receivables trust;
* accept transfer of the receivables from the transferor; and
* issue investor certificates on behalf of the receivables trust.
Bedell & Cristin Trust Company Limited, a company formed under the laws of
Jersey provides the receivables trustee with company secretarial, registrar and
company administration services. Its fees for providing these services are
included in the fees paid to the receivables trustee. See the section "The
Receivables Trust: Trustee Payment Amount".
Barclays Bank PLC does not own, directly or indirectly, any of the share
capital of the receivables trustee.
20
<PAGE>
Management and Activities
The receivables trustee has been established specifically to act as
trustee of the receivables trust. Its activities are restricted by the
declaration of trust and trust cash management agreements and the related
supplements.
Since it was formed, the receivables trustee has:
* engaged in activities incidental to the declaration of the
receivables trust and the transfer to it of the receivables;
* obtained the necessary customer credit licence and data protection
registrations in the United Kingdom and/or Jersey;
* authorised and executed the documents that it is a party to in
order to establish the receivables trust and to create series 99-1
within the receivables trust;
* engaged in activities incidental to the anticipated transfer to it
of receivables under the designated accounts; and
* authorised the other documents to which it is party.
The receivables trustee covenants in the declaration of trust and trust
cash management agreement that it will not without the prior written consent of
each of the beneficiaries of the receivables trust:
* carry on any business other than as trustee of the receivables
trust and will not engage in any activity or do anything at all
except:
(1) hold and exercise its rights in the trust property of the
receivables trust and perform its obligations for the
receivables trust's property;
(2) preserve, exercise and enforce any of its rights and
perform and observe its obligations under the declaration
of trust and trust cash management agreement, the
receivables sale agreement, the master definitions
schedule, each supplement and each other document executed
for issuance including any documents secured directly or
indirectly by a series of investor certificates issued by
the receivables trust, any mandate and other agreement
about a Trust Account or a bank account in which the
receivables trustee has a beneficial interest, the trust
section 75 indemnity, and any other document contemplated
by and executed in connection with any of the preceding
documents. We refer to these documents collectively as
"relevant documents";
(3) pay dividends or make other distributions to the extent
required by applicable law;
(4) use, invest or dispose of any of its property or assets in
the manner provided in or contemplated by the relevant
documents; and
(5) perform any and all acts incidental to or otherwise
necessary in connection with (1), (2), (3) or (4) above;
* incur any debt other than debt that is described by this
prospectus or a supplement;
* give any guarantee or indemnity in respect of any debt;
* create any mortgage, charge, pledge, lien or other encumbrance
securing any obligation of any person or other type of
preferential arrangement having similar effect, over any of its
assets, or use, invest, sell or otherwise dispose of any part of
its assets, including any uncalled capital, or undertaking,
present or future, other than as expressly contemplated by the
relevant documents;
* consolidate or merge with any other person or convey or transfer
its properties or assets to any person;
* permit the validity or effectiveness of the receivables trust to
be supplemented, amended, varied, terminated, postponed or
discharged -- other than as expressly contemplated in the
declaration of trust and trust cash management agreement or in any
supplement;
* have any employees or premises or have any subsidiary;
* have an interest in any bank account other than a Trust Account
and its own bank account opened for the purpose of receiving and
making payments to be made otherwise than in its capacity as
receivables trustee -- including paying the servicing fee to the
servicer or cash management fee to the trust cash manager; and
21
<PAGE>
In accordance with a delegation agreement with [Royal Bank of Scotland
Bank & Trust], a company incorporated under the laws of Jersey, Channel Islands
and having its registered office at Jersey, Channel Islands, acts as the
delegate of the receivables trustee in order to implement, administer and carry
out the responsibilities and obligations of the receivables trustee under the
receivables securitisation agreement, the declaration of trust and trust cash
management agreement, any related supplement and any documents or any matter
contemplated by any of those documents. The fees of [Royal Bank of Scotland
Bank & Trust], for providing those services are included in the Trustee Payment
Amount.
Barclays Bank PLC
Barclays Bank PLC will perform the following roles in connection with the
issuance of the notes:
* originator
* transferor
* servicer
* cash manager for the notes and the medium term notes
* transferor beneficiary and excess interest beneficiary
* swap counterparty
* lender under expenses loan agreement
Business
Barclays Bank PLC is a public limited company registered in England and
Wales under number 1026167. The liability of the members of Barclays Bank PLC
is limited. It has its registered and head office at 54 Lombard Street, London
EC3P 3AH. Barclays Bank PLC was incorporated on 7 August 1925 under the
Colonial Bank Act 1925 and on 4 October 1971 was registered as a company
limited by shares under the Companies Acts 1948 to 1967. Under the Barclays
Bank Act 1984, on 1 January 1985 Barclays Bank PLC was re-registered as a
public limited company and its name was changed from "Barclays Bank
International Limited" to "Barclays Bank PLC".
Barclays Bank PLC and its subsidiary undertakings are, together, called
the Barclays group. The Barclays group is a financial services company based in
the United Kingdom which undertakes mainly banking and investment banking
business. In terms of assets employed, it is one of the largest financial
services groups in the United Kingdom. The Barclays group also operates in the
financial markets of many other countries around the world. As well as
servicing domestic markets, it provides co-ordinated global services to
multinational corporations and financial institutions from groups operating in
the world's main financial centres. Its principal activities include retail and
corporate banking, investment banking and insurance. The whole of the issued
ordinary share capital of Barclays Bank PLC is owned by Barclays PLC which is
the ultimate holding company of the Barclays group.
The short-term unsecured obligations of Barclays Bank PLC are rated A-1+
by Standard and Poor's, P-1 by Moody's and F1+ by Fitch IBCA and the long-term
obligations of Barclays Bank PLC are rated AA by Standard & Poor's, Aa2 by
Moody's and AA+ by Fitch IBCA.
As at 30 June 1999, Barclays Bank PLC and its subsidiaries had total
assets of $397,435,834,500, total net loans and advances of $240,612,874,500,
total deposits of $257,013,393,300 and shareholders' funds of $13,993,813,500,
including non-equity reserves of $456,302,100. As at 31 December 1998, Barclays
Bank PLC and subsidiaries had total assets of $361,572,466,200, total net loans
and advances of $218,632,950,600, total deposits of $235,934,542,500 and
shareholders' funds of $13,351,366,500, including non-equity reserves of
$433,239,900.
The Annual report on Form 20-F for the year ended December 31, 1998 of
Barclays PLC and Barclays Bank PLC is on file with the Securities and Exchange
Commission. Barclays will provide, without charge to each person to whom this
prospectus is delivered, on the request of that person, a copy of the Form 20-F
referred to in the previous sentence. Written requests should be directed to:
Barclays Bank PLC, 54 Lombard Street, London, EC3P 4AH, England, Attention:
Barclays Group Financial Control.
Neither the Class A3 notes nor the class B notes are obligations of
Barclays Bank PLC, Barclays PLC or any of their affiliates.
Year 2000 Compliance
The Barclays Group Year 2000 Programme, initiated in 1996, is responsible
for Year 2000 projects across the Barclays group world wide and is sponsored by
John Varley, Chief Executive, Retail Financial Services, who
22
<PAGE>
reports directly to Matthew Barrett, Chief Executive of the Barclays Group. The
Year 2000 Programme includes planning at the Barclaycard level. A Programme
Board of executives representing all Barclays group businesses is chaired by
the Managing Director, Barclays Service Provision, David Weymouth, who reports
directly to the programme sponsor.
During the first half of 1999, Barclays has continued working to ensure
that its mission critical systems, those which could have an immediate and
observable impact on the Barclays group's customers and therefore its ability
to continue to operate effectively, can deal satisfactorily with the Year 2000
problem. Barclays believes that all mission critical information technology
systems for its Barclaycard business, including embedded systems, have now been
tested and are Year 2000 ready.
Together with other banks and external network providers, Barclays has
taken part in successful testing of the key industry infrastructure in the
United Kingdom, including the cheque clearing and electronic payment systems,
credit cards and automatic teller machines. Barclays will continue to
participate in industry-wide testing throughout the remainder of 1999. Where
appropriate, similar joint testing is undertaken in other countries in which it
operates.
As a result of working closely with key suppliers the Barclays group has
been able to satisfy itself as to their current, or planned, state of readiness
and the support arrangements required for the cutover to the new year. The Year
2000 readiness of approximately 1,500 of Barclays' most critical counterparties
- -- including those related to Barclaycard -- is being assessed centrally and
procedures are in place to ensure that credit exposure to those, and other
banks with whom the Barclays group, has a relationship, is managed with Year
2000 readiness in mind.
The Barclays group collates and analyses information on specific aspects
of the preparedness of countries in which it operates using data from a variety
of sources. Barclays continues to evaluate significant potential Year 2000
impacts on its funding capability and incorporates such risks into the capital
and liquidity plans.
Despite all these actions Barclays is not taking its progress for granted.
All systems changes are now subject to "Clean Management" processes in order to
prevent the Year 2000 problem being reintroduced. In order to further mitigate
the risk associated with the introduction of new systems a "Change Freeze"
regime has been implemented across the Barclays group, the first element of
which began in July.
It is a prudent planning scenario that there could be some disruption
caused directly or indirectly by the Year 2000 problem. Contingency plans
across the Barclays group -- including the business of Barclaycard -- are
therefore being reviewed and updated, and are being augmented with continuity
plans to mitigate the possible effects of the Year 2000 problem. At the end of
July, Barclays had completed an initial cutover plan which defines how the
Barclays group will operate across the change from 1999 into 2000. This
includes the establishment and testing of a network of command centres,
internal and external communications and participation in industry testing
during the non-business days. This work will continue to be refined during the
remainder of 1999 incorporating market requirements.
The total cost of the Year 2000 Programme is estimated not to exceed
$411,825,000, (including $32,946,000 of capitalised costs, for the four year
period ending December 2000. The total amount spent on the Year 2000 Programme
to the end of June was about $296,514,000, including $24,709,500 of capitalised
costs, of which $57,655,500 was incurred in the half year to June 1999. Year
2000 costs include correction, testing, third party assurance and contingency
planning.
Barclays expectations about completion of its Year 2000 remediation and
testing efforts, the anticipated costs to complete the project and anticipated
business, operational and financial risks to the Barclays group are subject to
a number of uncertainties. Barclays estimates of the cost of preparing for the
Year 2000 are based on numerous assumptions regarding future events including,
among others, expectations of third party modification plans and the nature and
amount of fixing and testing which may be required as well as continued
availability of trained personnel. For example, if the Barclays group is
affected by the inability of suppliers, service providers, counterparties,
customers, payment and settlement networks or market exchanges to deal
satisfactorily with the Year 2000 issue and to continue operations, or the
Barclays group is unsuccessful in identifying or finding all Year 2000 problems
in its critical operations, or if the Barclays group is unable to retain the
staff or third party consultants necessary to implement its Year 2000 plans at
currently projected costs and timetables, the Barclays group's operations or
financial results could be materially impacted.
23
<PAGE>
Credit Card Usage in the United Kingdom
The United Kingdom credit card market is the largest and most developed in
Europe. The adult population of the United Kingdom is 45 million, and the total
population is 59 million. It is estimated that 41% of the British population
holds at least one credit card.
The number of credit, charge and corporate cards in issue in the UK has
grown steadily since 1976, and exceeded 42 million in August 1999. Of these, 26
million carried the VISA service mark and 16 million the MasterCard service
mark, with the remainder comprised of corporate and charge cards.
In the last five years, the number of cards in issue has risen sharply
with 16 million new cards issued in this period. Purchases in the UK, in the
twelve months to August 1999, totalled almost $128,489,400,000. UK plastic card
borrowings have more than doubled since 1994, and were $44,477,100,000 at the
end of August 1999.
UK consumers use their card in a variety of ways. Figures from the Credit
Card Research Group, a trade organisation in England, show that in the year to
August, the average transaction size was $87, with a high of $261 in the
"Travel" sector, and low of $55 in "Food/drink". These two sectors account,
for, respectively, 13.7% and 12.9% of total credit card spending.
Barclaycard and the Barclaycard Card Portfolio
General
Barclaycard, a division of Barclays Bank PLC, is the largest credit card
issuer in the UK. Barclaycard is based in Northampton, England and has in
excess of 4,000 employees in the UK and Europe. In 1966 Barclaycard issued the
UK's first credit card and today has the largest credit card market share in
the UK with $9,719,070,000 of billed balances as of 30 September, 1999.
Barclaycard offers over 12 credit card products and services to individual and
corporate customers. The average customer has had a Barclaycard for 13 years.
In September 1998 Barclaycard announced a three year cost efficiency
programme designed to meet world benchmarking standards. The programme, which
included the announcement of the loss of 800 jobs over a three year period in
the card issuing business, involves a major investment in front office
telephony systems. Also, Barclaycard is implementing plans to invest in
information based customer management technology and skills to complement its
brand-name led strategy.
The receivables being securitised come from transactions made by
MasterCard and VISA card accountholders. These include premium accounts and
standard accounts from Barclaycard's portfolio of card accounts. Premium
accounts may carry higher credit limits and may offer different services to the
cardholders.
A cardholder may use its card for both purchases and cash advances. A
purchase is when cardholders use their cards to acquire goods or services. A
cash advance is when cardholders use their cards to get cash from a financial
institution or automated teller machine or using credit card cheques issued by
Barclaycard drawn against their VISA credit lines. Credit cardholders may also
use credit card cheques issued by Barclaycard to draw against their VISA credit
lines. Cardholders may draw against their MasterCard or VISA credit lines by
transferring balances owed to other creditors to their Barclaycard accounts.
See "Servicing of Receivables and Trust Cash Management" for a description
of how Barclaycard services receivables. Barclaycard undertakes all the
processing and administering of accounts apart from cardholder payment
processing, which is done for Barclaycard by Great Universal Stores Home
Shopping Ltd., a company not affiliated with Barclaycard.
Description of Great Universal Stores Home Shopping Ltd.
Barclaycard is a party to an agreement with Great Universal Stores Home
Shopping Ltd., under which they provide Barclaycard certain administrative
services. Under this agreement, Great Universal Stores Home Shopping Ltd.
collects and processes all remittances arising from Barclaycard's credit and
charge card portfolio through facilities located in Bolton, England. Great
Universal Stores Home Shopping Ltd. has been providing these services to
Barclaycard since April 1996. The Great Universal Stores Home Shopping Ltd.
contract with Barclaycard is scheduled to expire in February 2000. At this
time, Barclaycard believes that, at the expiration of the contract, it will be
able either to enter into a comparable agreement at comparable pricing with
Great Universal Stores Home Shopping Ltd. or with another qualified entity or
to take this function back within Barclaycard or another Barclays Bank PLC
division or affiliate.
24
<PAGE>
Acquisition and Use of Card Accounts
Barclaycard uses a value driven marketing strategy to focus new
origination campaigns. This process is assisted by the use of financial
forecasting models for each method it uses to solicit cardholders. The main way
Barclaycard recruits its customers is by introductions from Barclays branches,
but it also uses targeted mailing, media inserts and, in the last year, the
internet. In the future, the internet may increase substantially as a means
of recruiting new cardholders, although we are unable to predict how
cardholders recruited in this way will perform relative to those recruited by
traditional means.
When received, credit application details are screened by a combination of
system based checking, external credit bureau data and manual verification,
where appropriate.
Barclaycard uses a range of application scorecards to assess the credit
quality of new account applications, each tailored towards different market
segments. Scorecards are derived using a combination of factors including
Barclays account history, annual income, time in and place of residence,
current employment and credit bureau data. A proprietary cash flow model is
used to help determine the acceptance score levels for each scorecard.
Acceptance score levels are reviewed at least quarterly by committee.
The initial limit of an account is determined using credit score and
income matrices. Initial limits are set at comparatively low levels. Limits are
increased in a controlled and regular manner using behaviour score and credit
bureau data. Behaviour scoring was introduced in 1989 and is one of the key
tools used by Barclaycard in risk management and underpins all risk decisions
applied to accounts once they have been opened. Barclaycard currently uses
behaviour scorecards developed in conjunction with the Fair, Isaacs
International UK Corporation, an independent firm experienced in developing
credit scoring models.
The behaviour scorecards are monitored using retrospective sampling which
allows a comparison of actual to expected performance over predetermined time
periods. This analysis allows the effectiveness of the scorecards to be
measured on a regular basis, and underpins the decisions on scorecard
development.
Credit limits are adjusted based upon Barclaycard's continuing evaluation
of an account holder's credit behaviour and suitability using Triad V, the
latest account management system developed by the Fair, Isaacs Companies.
Each cardholder has a card agreement with Barclaycard governing the terms
and conditions of their MasterCard or VISA account. Under each card agreement,
Barclaycard is able, if it gives advance notice to the cardholder, to add or
change any terms, conditions, services or features of the MasterCard or VISA
accounts at any time. This includes increasing or decreasing periodic finance
charges, or minimum payment terms. Each card agreement enables Barclaycard to
apply charges to current outstanding balances as well as to future
transactions.
Barclaycard regularly reviews its card agreement forms to ensure their
compliance with applicable law and the suitability of their terms and
conditions. If they need to be updated or amended, this will be done on a
timetable consistent with the issues identified.
Description of Processing
Barclaycard settlement systems have links to VISA, Europay and MasterCard
to enable cardholder transactions to be transferred. Barclaycard also acquires
transactions from merchants. Transactions acquired in this way relating to
Barclaycard cardholders are passed to the card account processing systems
direct rather than via VISA or Europay, the European affiliate of MasterCard.
These acquired transactions do not form part of the receivables.
Billing and Payment
Barclaycard generates and mails monthly statements to cardholders which
give details of the transactions for that account.
Cardholders can get up to 56 days interest free on purchases.
At the moment, cardholders must make a monthly minimum payment which is at
least equal to the greater of:
* 3% of the statement balance
* the stated minimum payment, which is currently $8; and
* in the case of the Premier Card product, the statement balance in
full which is collected via direct debit 14 days after the date of
the statement.
Certain eligible cardholders can be given the option to take a payment
holiday.
25
<PAGE>
Barclaycard charges an annual fee on accounts which ranges from $16 to
$132 depending on the card product. In order to retain customers, Barclaycard
may waive this fee. Barclaycard also assesses a cash advance fee which is 1.5%
of the cash advance with a minimum of $2.5.
The finance charges on purchases are assessed monthly by multiplying the
account's average daily purchase balance over the billing period by the rate for
that account, and multiplying the result by the number of days in the billing
cycle. Finance charges are calculated on purchases from the date the purchase is
debited to the relevant account. Monthly periodic finance charges are usually
not assessed on purchases if all balances shown in the billing statement are
paid by the date they are due. This is usually 25 days after the billing date.
The finance charges on cash advances are assessed monthly by multiplying
the average daily balances of cash advances by the daily periodic rate and
multiplying the result by the number of days in the billing cycle. Finance
charges are calculated on cash advances from the date of the transaction --
except for cash advances by use of credit card cheques, where finance charges
are usually calculated from the date the transaction is debited to the relevant
cardholder's account.
The interest rates on Barclaycard's credit card accounts may be changed by
Barclaycard and are not linked to any index. This is market practice in the
United Kingdom. At the moment, the standard annual percentage rate of charge of
accounts ranges from 14.9 to 19.9 per cent., which includes the annual fee.
Barclaycard may sometimes offer temporary promotional rates. Barclaycard also
offers activation programmes and other incentives. The periodic finance charges
on accounts may differ from those usually assessed by Barclaycard.
Barclaycard have an established pricing committee, consisting of senior
directors, which meets monthly and determines the pricing on Barclaycard's
credit and charge card accounts. The timing of meetings is broadly aligned to
meetings of the Bank of England monetary policy committee. Pricing decisions
are based upon:
* actual and anticipated movements in underlying interest rates;
* marketing strategies and recruitment campaigns; and
* competitive environment.
The committee considers pricing in its broadest sense covering interest
rates, annual fees, minimum payment amounts, etc.
English law does not prescribe a maximum rate that may be charged as
interest for a debt. However, the obligation to make interest payments will not
be enforceable to the extent that the interest rate is extortionate. An
interest rate will be extortionate if it requires the debtor or a relative of
the debtor to make payments -- whether unconditionally or on certain
contingencies -- which are grossly exorbitant, or which otherwise grossly
contravene ordinary principles of fair dealing. Barclaycard believes that the
interest rates charged on its cards do not contravene any laws relating to
extortionate credit agreements.
Delinquency and Loss Experience
An account is contractually delinquent if the minimum payment is not
received by the due date indicated on the customer's statement. Once an account
is recognised as delinquent a determination is made of the timing and type of
initial contact. This initial contact is typically between 5 and 60 days after
an account becomes delinquent and may be by statement, letter or telephone. The
basis for determining the timing of initial contact may include the age of the
account, the amount outstanding, the past account performance and behaviour
score and any external credit bureau information available.
Efforts to collect delinquent receivables occur at each stage of
delinquency. Collection activities include statement messages, telephone calls
and formal collection letters. This process is normally completed anywhere
between 120 and 180 days, at which point an account is charged-off. There is no
specific period in delinquency at the end of which a debt must be charged-off.
The decision to charge-off is based upon an assessment of the likelihood of
recovery and rehabilitation of the individual account and may occur at any
point in the collection process. In certain circumstances, in particular where
notification of bankruptcy is received, charge-off occurs sooner and may be
immediate. In addition, there are instances where accounts are not charged-off
at 180 days, including where an outstanding payment protection insurance claim
or voucher dispute exists.
A charge-off team within the collections unit undertakes a review of all
accounts which have been flagged for charge-off to ensure that all possible
steps have been taken. Once charged-off, the accounts are typically placed with
debt collection agencies to maximise recoveries. Post charge-off account
rehabilitation may occur where improved credit circumstances and significant
recovery occurs. However, charging privileges can only be re-instated once the
cardholder has been accepted for a new account.
The following tables set forth the delinquency and loss experience of
Barclaycards portfolio of VISA and MasterCard credit and charge card accounts
denominated in pounds sterling -- called the "bank portfolio" for
26
<PAGE>
each of the periods shown. The bank portfolio includes platinum, gold and
classic VISA and MasterCard credit cards and the Premier VISA charge card.
Because the receivables in the securitised accounts -- called the "securitised
portfolio" -- may in the future only represent a portion of the bank portfolio,
and because the economic environment may change, we cannot assure you that the
delinquency and loss experience of the securitised portfolio will be the same as
the historic experience set out below.
Delinquency Experience
Bank Portfolio
<TABLE>
<CAPTION>
As of 30 September 1999 As of 30 June 1999 As of 31 March 1999
--------------------------- -------------------------- --------------------------
Percentage Percentage Percentage
of Total of Total of Total
Receivables Receivables Receivables Receivables Receivables Receivables
-------------- ----------- ------------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Receivables Outstanding(1).. $10,065,057,565 $9,499,099,323 $8,973,349,282
Receivables Delinquent:
30--59 Days................. $176,466,009 1.75% $169,372,926 1.78% $159,005,521 1.77%
60--89 Days................. 89,957,585 0.89 91,169,176 0.96 82,383,378 0.92
90--119 Days................ 59,125,523 0.59 58,347,562 0.61 50,775,261 0.57
120--149 Days............... 41,614,119 0.41 38,913,715 0.41 34,086,303 0.38
150 Days or more............ 83,695,102 0.83 67,768,641 0.71 53,544,066 0.60
-------------- ----------- ------------- ----------- ------------- ----------
Total....................... $450,858,338 4.48% $425,572,021 4.48% $379,794,529 4.23%
============== =========== ============= =========== ============= ==========
-------------- ----------- ------------- ----------- ------------- ----------
Repayment Programme Accounts* $130,426,511 1.30% $112,231,351 1.18% $93,493,821 1.04%
============== =========== ============= =========== ============= ==========
</TABLE>
<TABLE>
<CAPTION>
As of 31 December 1998
--------------------------
Percentage
of Total
Receivables Receivables
------------- -----------
<S> <C> <C>
Receivables Outstanding(1).. $9,055,290,590
Receivables Delinquent:
30--59 Days................. $158,440,195 1.75%
60--89 Days................. 79,645,343 0.88%
90--119 Days................ 47,733,162 0,53
120--149 Days............... 32,505,994 0.36
150 Days or more............ 48,724,641 0.54
------------- -----------
Total....................... $367,049,335 4.05%
============= ===========
------------- -----------
Repayment Programme Accounts* $74,566,479 0.82%
============= ===========
</TABLE>
<TABLE>
<CAPTION>
As of 31 December 1997 As of 31 December 1996 As of 31 December 1995
-------------------------- -------------------------- --------------------------
Percentage Percentage Percentage
of Total of Total of Total
Receivables Receivables Receivables Receivables Receivables Receivables
------------- ----------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Receivables Outstanding(1).. $7,930,756,625 $7,140,888,786 $6,461,648,431
Receivables Delinquent:
30--59 Days................. $102,971,647 1.30% $88,452,853 1.24% 82,072,543 1.27%
60--89 Days................. 42,549,610 0.54 39,576,828 0.55 33,175,988 0.51
90--119 Days................ 27,953,051 0.35 26,966,780 0.38 23,202,032 0.36
120--149 Days............... 19,006,742 0.24 18,138,477 0.25 15,649,102 0.24
150 Days or more............ 51,654,124 0.65 4,958,264 0.07 4,338,728 0.07
------------- ----------- ------------- ----------- ------------- -----------
Total....................... $244,135,174 3.08% 178,093,203 2.49% $158,438,394 2.45%
============= =========== ============= =========== ============= ===========
------------- ----------- ------------- ----------- ------------- -----------
Repayment Programme Accounts* $34,850,751 0.44% $21,883,597 0.31% $19,993,871 0.31%
============= =========== ============= =========== ============= ===========
</TABLE>
<TABLE>
<CAPTION>
As of 31 December 1994
--------------------------
Percentage
of Total
Receivables Receivables
------------- -----------
<S> <C> <C>
Receivables Outstanding(1).. $5,700,933,862
Receivables Delinquent:
30--59 Days................. $55,220,426 0.97%
60--89 Days................. 20,306,886 0.36
90--119 Days................ 11,534,906 0.20
120--149 Days............... 6,521,262 0.11
150 Days or more............ 1,431,146 0.03
------------- -----------
Total....................... $95,014,627 1.67%
============= ===========
------------- -----------
Repayment Programme Accounts* $23,551,052 0.41%
============= ===========
</TABLE>
Note
(1) The receivables outstanding on the accounts consist of all amounts due
from cardholders as posted to the accounts as of the end of the period
shown.
27
<PAGE>
Loss Experience
Bank Portfolio
<TABLE>
<CAPTION>
Quarter Ended
-----------------------------------------------------------------
30 September 1999 30 June 1999 31 March 1999
------------------- ------------------- -------------------
<S> <C> <C> <C>
Average receivables outstanding(1)............................ $9,939,601,739 $9,379,117,500 $8,943,070,232
Total gross charge-offs(2).................................... 92,939,579 90,392,464 122,399,583
Recoveries(3)................................................. 26,443,617 26,696,866 24,253,420
Total net charge-offs(4)...................................... 66,495,962 63,695,597 98,146,163
------------------- ------------------- -------------------
Total net charge-offs as a percentage of average receivables
outstanding(5) .............................................. 2.68% 2.72% 4.39%
=================== =================== ===================
</TABLE>
<TABLE>
<CAPTION>
Year ended 31 December
----------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Average receivables outstanding(1).... $8,226,003,597 $7,175,924,182 $6,592,008,620 $5,950,392,038 $5,176,315,073
Total gross charge-offs(2)............ 290,734,015 185,815,933 223,311,193 164,835,454 137,627,293
Recoveries(3)......................... 93,454,157 82,096,147 90,092,899 85,799,144 85,135,953
Total net charge-offs(4).............. 197,279,858 103,719,786 133,218,293 79,036,310 52,491,340
--------------- --------------- --------------- --------------- ---------------
Total net charge-offs as a percentage
of average receivables outstanding(5). 2.40% 1.45% 2.02% 1.33% 1.01%
=============== =============== =============== =============== ===============
</TABLE>
Notes
(1) Average receivables outstanding is the average of the daily receivable
balance during the period indicated.
(2) Total gross charge-offs are total principal and interest charge- offs
before recoveries and do not include the amount of any reductions in
average receivables outstanding due to fraud, returned goods, customer
disputes or other miscellaneous credit adjustments.
(3) Recoveries include all monies received after charge-off, including any
monies received as a result of any sale or other disposition of receivables
in charged-off accounts.
(4) Total net charge-offs are total gross charge-offs less recoveries.
(5) All percentages shown are annualised.
The causes of the increase in delinquency experience are twofold.
* In late 1997 Barclaycard introduced a customer relationship based
approach to delinquency, driven by Barclaycard's perception of how
risky a customer is rather than how delinquent the customer is. Low
risk accounts are actioned later, allowing increased portfolio
delinquency levels up to 90 days. High risk accounts, however, are
actioned at an earlier stage of delinquency, resulting in short term
delinquencies being skewed towards lower credit risk accounts.
* Since the first quarter of 1998, and markedly since the third quarter
of 1998, Barclaycard have experienced adverse economic conditions with
a slowdown in the UK economy. The net charge off experience, with
increases in 1998 and 1999, reflects this economic deterioration.
28
<PAGE>
Provision for Bad and Doubtful Debt
Bank Portfolio
<TABLE>
<CAPTION>
Quarter ended
---------------------------------------------------
30 September
1999 30 June 1999 31 March 1999
--------------- --------------- ---------------
<S> <C> <C> <C>
Net charge............................ $57,594,372 $59,835,278 $88,843,383
Net charge (%)(1)..................... 2.32% 2.55% 3.97%
</TABLE>
<TABLE>
<CAPTION>
Year ended 31 December
---------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Net charge....................... $189,666,854 $232,527,088 $166,021,366 $108,213,906 $86,444,674
Net charge (%)(1)................ 2.31% 3.24% 2.52% 1.82% 1.67%
</TABLE>
(1) The Net charge includes both specific and general charges and releases. As
general provisions are normally adjusted on a semi-annual basis, not
quarterly, the total general release undertaken in the first half of 1999
has been evenly reapportioned in accordance with Barclaycard management's
judgement in order to more fully reflect the quarterly positions.
29
<PAGE>
The Receivables
Assignment of Receivables to the Receivables Trustee
Barclaycard as the initial transferor will offer on the closing date to
the receivables trustee an assignment of all receivables that have arisen or
will arise in all designated accounts. An account of the initial transferor
will be designated as a "designated account" if the account has been originated
under and continues to conform to the credit and charge card products described
in this prospectus and has not been identified on the initial transferor's
system as being excluded from the offer. Only credit and charge card products
available to the transferor's individual accountholders may be designated.
If for any reason there are receivables from designated accounts that
cannot be assigned to the receivables trustee, the transferor will hold those
receivables, and any collections on those receivables, on trust for the
receivables trustee. These collections will be treated as if the receivables
had been properly assigned.
Under the terms of the receivables securitisation agreement, the
transferor also has the right to select accounts that conform to the conditions
in the second paragraph above and that are not designated and nominate them as
designated accounts by offering the receivables trustee an assignment of all
future and existing receivables in these accounts. These accounts are called
"additional accounts". An additional account will be treated as a designated
account from the date on which its receivables are offered to the receivables
trustee. This date is called the "addition date". When additional accounts are
nominated the transferor must:
* provide the receivables trustee with a certificate stating that it
is solvent;
* confirm, in the document that offers to assign the receivables in
the additional accounts to the receivables trustee, that:
(1) the offer of the receivables in the additional accounts
meets the Maximum Addition Amount criteria; or
(2) if the offer does not meet the Maximum Addition Amount
criteria, that the rating agencies have confirmed that
their designation will not result in a reduction or
withdrawal of the current rating of any outstanding debt
that is secured directly or indirectly by the receivables
in the receivables trust, including your notes.
* obtain a legal opinion addressed to the receivables trustee about
any receivables from a jurisdiction outside of the United Kingdom.
If the rating agencies agree, any of these preconditions may be waived by
the receivables trustee. At the time that it is nominated, each additional
account must also meet the eligibility criteria as at the time of its
designation. These criteria are explained in "-- Representations" below.
Additional accounts may have been originated or purchased using credit criteria
that are different from the credit criteria used by Barclaycard in selecting
the original designated accounts. As a result, additional accounts that are
selected in future may not have the same credit quality.
"Maximum Addition Amount" means, for any addition date, the number of
additional accounts originated by the transferor after the cut-off date and
nominated as additional accounts without prior rating agency confirmation that
would either:
* for any three consecutive monthly periods starting with the
monthly period beginning on the first day of the month before the
cut-off date, be equal to 15 per cent of the number of designated
accounts;
* for any twelve-month period, be equal to 20 per cent of the
designated accounts as of the first day of the twelve-month period
or, if later, as of the cut-off date.
Notwithstanding what we just said, if the total principal balance of
receivables in the additional accounts described in either of the two prior
bullet points is more than either:
(1) 15 per cent. of the total amount of eligible principal receivables
determined as of the later of the cut-off date and the first day
of the third preceding monthly period, minus the amount of
eligible principal receivables in each additional account that was
nominated since the later of the closing date and the first day of
the third preceding monthly period -- calculated for each
additional account on its addition date; or
(2) 20 per cent. of the total amount of eligible principal receivables
as of the later of the closing date and the first day of the
calendar year in which the addition date occurs, minus the total
amount of eligible principal receivables in each additional
account that was nominated since the later of
30
<PAGE>
the closing date and the first day of the calendar year,
calculated for each additional account as of its addition date,
then the Maximum Addition Amount will be the lesser of (1) or (2) above.
Every offer of receivables to the receivables trustee under the
receivables securitisation agreement will comprise offers of the following:
* all existing receivables in the designated accounts
* all future principal receivables under the designated accounts,
until the first to occur of (1) the time a designated account
becomes a redesignated account, (2) the receivables trust is
terminated or (3) an Insolvency Event occurs;
* all future finance charge receivables under those designated
accounts that have accrued on receivables that have been assigned
to the receivables trustee as described in the two prior bullet
points;
* all amounts recoverable on future receivables -- including from
disposal of accounts to collection agents;
* if capable of being assigned, the benefit of any guarantee or
insurance policy obtained by the transferor for any obligations
owed by a cardholder on a designated account; and
* the benefit of all amounts representing Acquired Interchange.
The transferor will ensure that each redesignated account is identified
on the transferor's computer system on the date that a designated account
becomes a redesignated account.
Throughout the term of the receivables trust, the designated accounts from
which the receivables will arise will be the designated accounts plus any
additional accounts designated by the transferor from time to time, minus any
redesignated accounts.
Existing receivables and future receivables arising under the designated
accounts will be principal receivables or finance charge receivables. Principal
receivables are receivables that are not finance charge receivables. Principal
receivables are amounts owing by cardholders for the purchase of merchandise or
services and from cash advances, including foreign exchange commissions charged
for merchandise and services payable, or cash advances denominated in, a
currency other than sterling. They are reduced by any credit balance on the
designated account on that day.
Finance charge receivables are receivables from transaction fees, periodic
finance charges, charges for credit insurance, special fees, interchange and
annual fees -- see "-- Special Fees" and "-- Annual Fees" below -- and any
Discount Option Receivables.
Under the receivables securitisation agreement, each offer of receivables
made by the transferor will be accepted by paying the purchase price for the
offered receivables. Payment for existing receivables will have to be made no
later than the business day following the date on which the offer is made.
Alternatively, the parties can agree to a longer period of time for payment.
Payment for future receivables will be made no later than two business days
after the date of processing for those receivables. Alternatively, the parties
can agree to a longer period if the rating agencies consent. This payment will
also include payment for the assignment of the benefit of Acquired Interchange
to the receivables trustee.
It has been agreed between the transferor and the receivables trustee
that, for the purposes of the offer made on the series 99-1 offer date:
(1) the receivables trustee will be entitled to use the collections in
the designated accounts before the date that the offer is accepted
as if the offer had been accepted on the series 99-1 offer date;
(2) the amount payable on the closing date for the designated accounts
will equal the outstanding face amount of all existing principal
receivables, together with an obligation of the receivables
trustee to pay for all future receivables generated on the
designated accounts that are part of the offer on an ongoing,
daily basis when those future receivables are generated.
The payments in (2) will be net of any payments made in (1),
subject to a minimum of L1.
The obligation of the receivables trustee to make payments to the
transferor for the acceptance of an offer or in payment for any future
receivables, will be reduced by the amount of any shortfall in the amount
funded by the transferor as a beneficiary, providing that the Transferor
Interest is increased accordingly.
31
<PAGE>
Redesignation and Removal of Accounts
Each designated account will continue to be a designated account until
such time as the transferor reclassifies it as being no longer a designated
account -- called a "redesignated account".
A designated account becomes a redesignated account on the date specified
by the transferor. No designated account will become a redesignated account
this way unless (1) it has become a cancelled account, a defaulted account or a
zero balance account or (2) the transferor delivers an officer's certificate
confirming the following conditions are satisfied:
* the redesignation will not cause a pay out event to occur;
* the transferor has represented that its selection procedures for
the selection of designated accounts for redesignation are not
believed to have any material adverse effect on any investor
beneficiary;
* the rating agencies have confirmed that the action will not result
in a downgrade in rating of any outstanding debt that is secured
directly or indirectly by the receivables in the receivables
trust; and
* the transferor and the servicer can certify that collections equal
to the outstanding face amount of each principal receivable and
the outstanding balance of each finance charge receivable have
been received by the receivables trustee on all receivables
assigned for that account other than any receivables charged off
as uncollectable.
A "cancelled account", is a designated account that has had its charging
privileges permanently withdrawn. A "defaulted account", is a designated
account where the receivables have been charged off by the servicer as
uncollectable in line with the credit card guidelines or the usual servicing
procedures of the servicer for similar credit and charge card accounts. A "zero
balance account", is a designated account that has had a nil balance of
receivables for a considerable period of time and has been identified by the
servicer as a zero balance account under the credit and charge card guidelines.
Redesignated accounts will include all accounts that become cancelled
accounts, defaulted accounts and zero balance accounts from the date on which
they are redesignated in any of these ways. The principal receivables that
exist before the date of redesignation will be paid for by the receivables
trustee. Any future receivables that come into existence after that time will
not be assigned to the receivables trustee as set out in the receivables
securitisation agreement. No receivable that has been assigned to the
receivables trustee will be reassigned to the transferor except in the limited
circumstances described under the heading "-- Representations".
Until money has been received for the assigned receivables, that have not
been charged off, a reassigned account wil not be identified as having been
removed. The amount identified will be equal to the outstanding face amount of
each principal receivable and finance charge receivable. Once these payments
have been received or any reassignment has occurred, the account will be
identified to indicate that it has become a removed account.
Discount Option Receivables
The transferor may, by giving at least thirty days' prior notice to the
servicer, the receivables trustee and the rating agencies, nominate a fixed or
variable percentage -- called the "Discount Percentage" -- of principal
receivables in the designated accounts. If a Discount Percentage has been
nominated previously, an extension to that period can be applied for in this
way. From the date and for the length of time stated in the notice:
* the amount payable by the receivables trustee to accept an offer
of receivables will be reduced by a percentage amount equal to the
Discount Percentage; and
* a percentage of the principal receivables equal to the Discount
Percentage will be treated by the receivables trustee as finance
charge receivables. These are called "Discount Option
Receivables".
The nomination of a Discount Percentage or increase in the time it is in
place will be effective only if the rating agencies consent to the proposed
nomination or increase and confirm that it will not result in the downgrade or
withdrawal of the current rating of debt that is secured directly or indirectly
by the receivables in the receivables trust, including your notes. The
transferor must also provide the receivables trustee with a certificate
confirming:
* that the performance of the portfolio of designated accounts, in
their reasonable opinion, is not generating adequate cash flows
for the beneficiaries of the receivables trust and the size of the
Discount Percentage is not intended solely to accelerate
distributions to the excess interest beneficiary; and
* that the transferor is solvent and will remain so following the
nomination or increase.
32
<PAGE>
The transferor may have different reasons to designate a Discount
Percentage. The finance charge collections on the designated accounts may
decline for various reasons or may stay constant. The notes have interest rates
that are variable and that could increase. Any of these variables could cause a
Series 99-1 Pay Out Event to occur based in part on the amount of finance
charge collections and the interest rate on the notes. The transferor could
avoid the occurrence of this Series 99-1 Pay Out Event by designating a
Discount Percentage, causing an increase in the amount of finance charge
collections. The transferor, however, is under no obligation to designate a
Discount Percentage and we cannot assure you that the transferor would
designate a Discount Percentage to avoid a Series 99-1 Pay Out Event.
Special Fees
The transferor may in the future charge special fees on its credit or
charge card accounts. These special fees may be assessed at one time or on an
ongoing basis. Any special fees that are charged on designated accounts will be
regarded as finance charge receivables and collections of these special fees
will be treated as finance charge collections. The transferor may, however,
decide that these special fees will be viewed as principal receivables and
collections on them will be allocated accordingly. This can be done only if the
transferor certifies that it has an opinion from legal counsel that the special
fees amount to repayment, for United Kingdom tax purposes, in whole or in part
of an advance to a cardholder.
Interchange
Members participating in the VISA and MasterCard associations receive fees
called "interchange" as partial compensation, for example, for taking credit
risk and absorbing fraud losses. Under the Visa and MasterCard systems,
interchange is passed from the banks that clear the transactions for merchants
to card issuing banks. Interchange fees are calculated as a percentage of the
amount of a credit or charge card transaction for the purchase of goods or
services. This percentage varies from time to time.
On each transfer date the transferor will deposit into the Trustee
Collection Account an amount equal to the interchange received for the
preceding monthly period. This amount is called the "Acquired Interchange" and
is calculated as follows:
Acquired Interchange = A X B
where
A = total interchange paid or payable to the transferor for that period,
and
B = total charges eligible for interchange in designated accounts for
that period
---------------------------------------------------------------------
total charges eligible for interchange in all card accounts owned by
the transferor for that period
Annual Fees
Receivables assigned or to be assigned to the receivables trustee include
annual fees on the designated accounts. All annual fees are and will be treated
as finance charge receivables. The transferor may, however, by notice to the
servicer, the receivables trustee and the rating agencies designate in a
certificate to the receivables trustee that annual fees will be treated as
principal receivables. No designation of annual fees as principal receivables
will be effective unless the transferor has certified that it has received
legal advice that these annual fees will amount, for United Kingdom tax
purposes, to repayment of an advance to a cardholder. For the purposes of
series 99-1, all annual fees are treated as finance charge receivables.
Reductions in Receivables, Early Collections and Credit Adjustments
If a principal receivable that has been assigned to the receivables
trustee is reduced -- for reasons other than because of Section 75 of the
Consumer Credit Act or a credit adjustment -- after the offer date, because of
set-off, counterclaim or any other matter between the cardholder and the
transferor, and the transferor has received a benefit, then the transferor will
pay an amount equal to that reduction to the receivables trustee. Similarly, if
an existing receivable has already been assigned and the transferor has
received full or partial payment of that receivable before the date that the
receivable was purportedly assigned, then the transferor will pay the amount of
that collection to the receivables trustee.
If any principal receivable assigned to the receivables trustee is reduced
for credit adjustment reasons after the offer date, then the transferor will
pay that amount to the receivables trustee. A credit adjustment is the
outstanding face amount of a principal receivable that:
* was created by virtue of a sale of merchandise that was
subsequently refused or returned by a cardholder or against which
the cardholder has asserted any defence, dispute, set-off or
counterclaim;
33
<PAGE>
* is reduced because the cardholder had received a rebate, refund,
charge-back or adjustment; or
* is fraudulent or counterfeit.
Alternatively, instead of paying these amounts to the receivables trustee,
the transferor can reduce the amount of the transferor interest, but not below
zero.
Representations
Each offer of receivables to the receivables trustee will include
representations by the transferor about the offer of the existing receivables
and the future receivables. The representations for the existing receivables
will be given as of 31 October 1999 --- called the "pool selection date" --- or
addition date, as applicable, and the representations for the future
receivables will be given on the date they are processed, and will include, in
each case, that:
* the receivable is an eligible receivable and has arisen from an
eligible account in the amount specified in the offer or daily
activity report, as applicable;
* each assignment passes good and marketable title for that
receivable to the receivables trustee, together with the benefit
of all collections and other rights in connection with it, free
from encumbrances of any person claiming on it through the
transferor to the receivables and, unless such receivable does not
comply with the Consumer Credit Act, nothing further needs to be
done to enforce these rights in the courts of England and Wales,
Scotland or Northern Ireland, or any permitted additional
jurisdiction without the participation of the transferor, except
for payment of any United Kingdom stamp duty and giving a notice
of assignment to the cardholders;
* the assignment complies with all applicable laws on the date of
assignment; and
[* the transferor did not use any procedures adverse to the
beneficiaries of the receivables trust in selecting the designated
accounts from Barclaycard's portfolio of card accounts;]
If a representation given in connection with any principal receivable
proves to be incorrect when made, then the transferor is obliged to pay the
receivables trustee an amount equal to the face value of that receivable on the
following business day. A receivable of this type will afterwards be treated as
an ineligible receivable.
The transferor's obligation to pay amounts due as a result of any breach
of a representation can be fulfilled, in whole or in part, by a reduction in
the amount of the Transferor Interest. The Transferor Interest, however, may
not be reduced below zero. If the transferor meets a payment obligation of this
type, the receivables trustee will have no further claim against the transferor
for the breached representation. However, a breach of a representation may
result in a Series 99-1 Pay Out Event.
If:
* all principal receivables arising under a designated account
become ineligible as a result of incorrect representations;
* that account has become a redesignated account; and
* the transferor has complied with the payment obligations for the
principal receivables;
then the transferor can require the receivables trustee to reassign all those
receivables to the transferor.
The receivables trustee has not made and will not make any initial or
periodic examination of the receivables to determine if they are eligible
receivables or if the transferor's representations and warranties are true.
The expression "eligible account" means, as of the pool selection date or
on an addition date, a credit or charge card account:
* where the cardholder is not a company or partnership for the
purposes of Section 349(2) of the Income and Corporation Taxes Act
1988;
* which was in existence and maintained with the transferor before
it became a designated account;
* which is payable in pounds sterling or the currency of the
additional jurisdiction of that account, as applicable;
* which was in existence and maintained with the transferor before
its designation as a designated account;
34
<PAGE>
* which is governed by one of the transferor's standard form card
agreements or, if it was acquired by the transferor, it is
governed by contractual terms not materially different from that
standard form, and was created and complies with all applicable
laws;
* which is governed in whole or in part by the Consumer Credit Act
and creates legal, valid and binding obligations between the
transferor and the cardholder which, unless the account does not
comply with the Consumer Credit Act, is enforceable, subject to
bankruptcy laws and limitations on enforcement in any cardholder
jurisdiction;
* which was otherwise created and complies with all other applicable
laws;
* where the cardholder's most recent billing address is located in
England, Wales, Scotland, Northern Ireland, or a permitted
additional jurisdiction or in any other jurisdiction that,
together with each other account having a billing address outside
England, Wales, Scotland, Northern Ireland or a permitted
additional jurisdiction does not represent more than 5 per cent.
by number of accounts within the securitised portfolio;
* which has not been classified by the transferor as counterfeit,
cancelled, fraudulent, stolen or lost;
* which has been originated or purchased by the transferor;
* which has been operated in all material respects in accordance
with the transferor's policies and procedures and usual practices
for the operation of its general credit and charge card business;
and
* the receivables in respect of which have not been charged off by
the transferor on the date the account is specified as a
designated account.
If all these conditions have not been satisfied, then an account may still
be an eligible account if each rating agency gives their approval.
A "permitted additional jurisdiction" is a jurisdiction -- other than
England and Wales, Scotland, Northern Ireland, or a restricted additional
jurisdiction -- agreed by the transferor and the receivables trustee, and
approved by each rating agency.
A "restricted additional jurisdiction" is a jurisdiction -- other than
England, Wales, Scotland and Northern Ireland, which satisfies the following
conditions:
* the total of accounts with a billing address in the jurisdiction
represents less than 5% of the designated accounts in the
securitised portfolio; or
* the rating agencies otherwise agree that the jurisdiction can be
treated as a permitted additional jurisdiction.
A "notice of assignment" means a notice given to a cardholder of the
assignment of the receivables -- and the benefit of any guarantees -- to the
receivables trustee.
An "eligible receivable" means a receivable that:
* has arisen under an eligible account;
* was created in compliance with all applicable laws;
* was originated in accordance with the transferor's policies and
procedures and usual practices for its general credit and charge
card business;
* was originated under and is governed by one of the transferor's
standard form card agreements or else, if the related amount was
acquired by the transferor, contractual terms that are materially
the same as the standard form agreement;
* is not a defaulted receivable as at the pool selection date or
addition date, as applicable;
* is free of any encumbrances exercisable against the transferor or
the receivables trustee arising under or through the transferor or
any of its affiliates;
* to which the receivables trustee or the transferor has good and
marketable title;
* is the legal obligation of the cardholder, enforceable, except in
the case of accounts not complying with the Consumer Credit Act,
in accordance with the terms of the card agreement, subject to
bankruptcy and general equitable principles; and
* is not currently subject to any defence, dispute, event, set-off,
counterclaim or enforcement order.
35
<PAGE>
Bank portfolio:
As is market practice for credit and charge card securitisation
transactions, principal receivables that are delinquent will still constitute
eligible receivables if they comply with the eligibility requirements. See the
table captioned: "Delinquency Experience -- Bank Portfolio" in "Barclaycard and
the Barclaycard Card Portfolio -- Delinquency and Loss Experience" below for
data showing the percentage of delinquent receivables.
"Ineligible receivables" means principal receivables which arise under a
designated account but which do not comply with all the criteria set out in the
definition of eligible receivables as at the pool selection date or the
addition date, as applicable.
Amendments to Card Agreement and Card Guidelines
The transferor may amend the terms and conditions of its standard form
card agreements or change its policies and procedures and usual practices for
its general card business. These amendments may include reducing or increasing
the amount of monthly minimum required payments required or may involve changes
to periodic finance charges or other charges that would apply to the designated
accounts. See "Risk Factors: A Change in the Terms of the Receivables May Cause
an Early Redemption or a Downgrade of your Notes".
Summary of Securitised Portfolio as of 30 September, 1999
The tables that follow summarise the securitised portfolio by various
criteria as of the billing dates of accounts in the month ending on 30
September, 1999. Because the future composition of the securitised portfolio
may change over time, these tables are not necessarily indicative of the
composition of the securitised portfolio at any time after 30 September, 1999.
Composition by Account Balance
Securitised Portfolio
<TABLE>
<CAPTION>
Percentage of Percentage of
Total Number of Total Number of Total
Account Balance Range Accounts Accounts Receivables Receivables
- ----------------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Credit Balance....................................... 160,237 1.88% $(17,289,623) (0.18)%
No Balance........................................... 2,879,091 33.80 0 0.00
$00.01 to $5,000.00.................................. 5,045,876 59.24 6,413,167,437 65.75
$5,000.01 to $10,000.00.............................. 360,481 4.23 2,424,488,810 24.86
$10,000.01 to $15,000.00............................. 58,916 0.69 694,502,073 7.12
$15,000.01 to $20,000.00............................. 9,325 0.11 156,582,981 1.61
$20,000.01 to $25,000.00............................. 2,019 0.02 44,436,059 0.46
$25,000.01 to $30,000.00............................. 632 0.01 17,111,085 0.18
$30,000.01 to $35,000.00............................. 274 0.00 8,774,712 0.09
$35,000.01 to $40,000.00............................. 112 0.00 4,190,686 0.04
$40,000.01 to $45,000.00............................. 67 0.00 2,843,619 0.03
$45,000.01 to $50,000.00............................. 33 0.00 1,571,977 0.02
$50,000.01 and over.................................. 51 0.00 3,949,575 0.04
---------------- ---------------- ---------------- ----------------
TOTAL................................................ 8,517,114 100.00% $9,754,329,392 100.00%
================ ================ ================ ================
</TABLE>
36
<PAGE>
Composition by Credit Limit
Securitised Portfolio
<TABLE>
<CAPTION>
Percentage of Percentage of
Total Number of Total Number of Total
Credit Limit Range Accounts Accounts Receivables Receivables
- --------------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Less than $5,000.00.................................. 5,737,719 67.37% $3,550,352,336 36.40%
$5,000.01 to $10,000.00.............................. 1,974,103 23.18 3,522,997,275 36.12
$10,000.01 to $15,000.00............................. 543,308 6.38 1,798,721,150 18.44
$15,000.01 to $20,000.00............................. 193,329 2.27 586,507,984 6.01
$20,000.01 to $25,000.00............................. 41,479 0.49 166,561,871 1.71
$25,000.01 to $30,000.00............................. 15,802 0.19 61,590,172 0.63
$30,000.01 to $35,000.00............................. 7,270 0.09 35,522,596 0.36
$35,000.01 to $40,000.00............................. 1,446 0.02 8,398,308 0.09
$40,000.01 to $45,000.00............................. 1,380 0.02 9,613,627 0.10
$45,000.01 to $50,000.00............................. 583 0.01 5,447,231 0.06
$50,000.01 and over.................................. 695 0.01 8,616,842 0.09
---------------- ---------------- ---------------- ----------------
TOTAL................................................ 8,517,114 100.00% $9,754,329,392 100.00%
================ ================ ================ ================
</TABLE>
Composition by Account Age
Securitised Portfolio
<TABLE>
<CAPTION>
Percentage of Percentage of
Total Number of Total Number of Total
Account Age Accounts Accounts Receivables Receivables
- ------------ ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Not more than 2 Years............................. 1,245,685 14.63% $ 1,178,432,715 12.08%
Over 2 Years to 4 Years........................... 1,102,321 12.94 1,160,674,307 11.90
Over 4 Years to 8 Years........................... 1,810,457 21.26 1,908,461,212 19.57
Over 8 Years to 12 Years.......................... 1,270,942 14.92 1,198,338,702 12.29
Over 12 Years to 16 Years......................... 931,716 10.94 1,377,029,619 14.12
Over 16 Years to 20 Years......................... 808,899 9.50 1,166,112,612 11.95
Over 20 Years..................................... 1,347,094 15.82 1,765,280,225 18.10
---------------- ---------------- ---------------- ----------------
TOTAL............................................. 8,517,114 100.00% $ 9,754,329,392 100.00%
================ ================ ================ ================
</TABLE>
37
<PAGE>
Geographic Distribution of Accounts
Securitised Portfolio
<TABLE>
<CAPTION>
Percentage of Percentage of
Total Number of Total Number of Total
Region Accounts Accounts Receivables Receivables
- -------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
London............................................ 2,938,805 34.50% $ 3,595,813,966 36.86%
Central Midlands.................................. 1,042,966 12.25 1,142,177,199 11.71
Lancashire........................................ 709,807 8.33 824,490,450 8.45
East.............................................. 601,116 7.06 655,494,414 6.72
Yorkshire......................................... 549,187 6.45 621,142,900 6.37
South............................................. 556,675 6.54 604,524,051 6.20
Wales............................................. 564,373 6.63 590,675,460 6.06
North East........................................ 367,388 4.31 411,253,846 4.22
West Country...................................... 286,823 3.37 293,611,393 3.01
Scotland.......................................... 222,433 2.61 303,235,228 3.11
Southwest......................................... 145,629 1.71 166,942,392 1.71
Southeast......................................... 123,663 1.45 145,854,590 1.50
Border Regions.................................... 93,952 1.10 98,558,374 1.01
Northern Ireland.................................. 51,036 0.60 65,748,174 0.67
Other............................................. 59,592 0.70 69,527,187 0.71
Non UK............................................ 203,669 2.39 165,249,767 1.69
---------------- ---------------- ---------------- ----------------
TOTAL............................................. 8,517,114 100.00% $ 9,754,329,392 100.00%
================ ================ ================ ================
</TABLE>
Composition by Product Line
Securitised Portfolio
<TABLE>
<CAPTION>
Percentage of Percentage of
Total Number of Total Number of Total
Product Accounts Accounts Receivables Receivables
----------------------------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Classic Visa...................................... 5,902,944 69.31% $ 6,833,860,699 68.01%
Mastercard........................................ 2,027,774 23.81 1,468,560,343 15.06
Platinum.......................................... 387,784 4.55 1,413,746,165 14.49
Premier........................................... 89,591 1.05 117,489,000 1.20
Gold Visa......................................... 41,504 0.49 79,673,803 0.82
Smaller Products.................................. 67,517 0.79 40,999,381 0.42
---------------- ---------------- ---------------- ----------------
TOTAL............................................. 8,517,114 100.00% $ 9,754,329,392 100.00%
================ ================ ================ ================
</TABLE>
Maturity Assumptions
The series 99-1 supplement to declaration of trust and trust cash
management agreement provides that the MTN issuer will not receive
distributions of principal collections on the Class A Investor Interest, for
payment of principal on the series 99-1 MTNs, until the class A scheduled
redemption date or earlier if a Pay Out Event results in the start of the
Regulated Amortization Period or the Rapid Amortisation Period. The MTN issuer
will also not begin to receive distributions of principal collections on the
Class B Investor Interest, for payment of principal on the class B MTNs, until
the final payment of principal on the class A MTN has been made, and will not
begin to receive distributions of principal collections for the Class C
Investor Interest, for payment of principal on the class C MTN, until the final
payment of principal on the class B MTN has been made.
On each transfer date during the Controlled Accumulation Period, an amount
equal to the Controlled Deposit Amount will be deposited in the Principal
Funding Account until the balance of the Principal Funding Account equals the
Investor Interest. Although it is anticipated that principal collections will
be available on each transfer date during the Controlled Accumulation Period to
make a deposit of the Controlled Deposit Amount and that the Investor Interest
will be paid to the MTN issuer on the series 99-1 scheduled redemption date,
allowing the MTN issuer to fully redeem each class of the MTNs outstanding, no
assurance can be given. If the
38
<PAGE>
amount required to pay the Investor Interest in full is not available on the
series 99-1 scheduled redemption date, a Series 99-1 Pay Out Event will occur
and the Rapid Amortisation Period will begin.
If a Regulated Amortisation Trigger Event occurs during the Controlled
Accumulation Period, the Regulated Amortisation Period will begin. If any other
Pay Out Event occurs during the Controlled Accumulation Period, the Rapid
Amortisation Period will begin. In each case any amount on deposit in the
Principal Funding Account will be paid to the MTN issuer for the Investor
Interest on the first interest payment date relating to the Rapid Amortisation
Period. In addition, to the extent that the Investor Interest for each class
has not been distributed in full, the MTN issuer will be entitled to monthly
distributions of principal collections during the Rapid Amortisation Period
equal to the Available Investor Principal Collections until first the Class A
Investor Interest, then the Class B Investor Interest and then the Class C
Investor Interest have been distributed in full or, during the Regulated
Amortisation Period, an amount equal to the Controlled Deposit Amount until the
Investor Interest for each class has been distributed in full. A Pay Out Event
occurs, either automatically or after specified notice, after a Trust Pay Out
Event or a Series 99-1 Pay Out Event occurs. See "The Receivables Trust: Trust
Pay Out Events" and "Series 99-1: Series 99-1 Pay Out Events". If a Series 99-1
Pay Out Event occurs, it will automatically trigger an early redemption event
under the MTNs.
The following table presents the highest and lowest cardholder monthly
payment rates for the bank portfolio during any month in the period shown and
the average cardholder monthly payment rates for all months during the periods
shown. These are calculated as a percentage of total opening monthly account
balances during the periods shown. The payment rates are based on amounts which
would be deemed principal collections and finance charge collections for the
related accounts.
Cardholder Monthly Payment Rates
Bank Portfolio
<TABLE>
<CAPTION>
30 September
1999 30 June 1999 31 March 1999
------------- ------------- -------------
<S> <C> <C> <C>
Lowest Month..................................................................... 25.00% 22.01% 24.57%
Highest Month.................................................................... 26.08% 27.97% 28.94%
Monthly Average.................................................................. 25.62% 25.40% 26.89%
</TABLE>
<TABLE>
<CAPTION>
Year Ended 31 December
-------------------------------------------------------------------------------
1998 1997 1996 1995 1994
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Lowest Month.................................... 25.09% 26.64% 29.27% 30.34% 30.55%
Highest Month................................... 31.02% 36.47% 39.13% 34.75% 36.37%
Monthly Average................................. 28.80% 32.01% 33.03% 32.94% 34.04%
</TABLE>
Collections may vary from month to month due to:
* seasonal variations;
* promotional offerings -- such as payment holidays;
* general economic conditions; and
* payment habits of individual cardholders.
There is no guarantee that the future monthly payment rates for the
securitised portfolio will be similar to the historical experience in the table
above or that there will be enough principal collections to deposit the
Controlled Deposit Amount into the Principal Funding Account each month to
fully redeem your notes by the series 99-1 scheduled redemption date. If a Pay
Out Event occurs, the average life and maturity of your notes could be
significantly reduced, since you may start receiving principal distributions
before the series 99-1 scheduled redemption date.
Because there may be a slowdown in the payment rate below the payment
rates used to determine the Controlled Deposit Amount or if a Pay Out Event may
occur which would start the Rapid Amortisation Period or the Regulated
Amortisation Period, there is no guarantee that the actual number of months
elapsed from the closing date to the final distribution date for your notes
will equal the expected number of months. [As described under "Series 99-1:
Postponement of Controlled Accumulation Period", if the servicer shortens the
Controlled Accumulation Period there is no guarantee that there will be enough
time to accumulate all amounts necessary to pay the Investor Interest on the
series 99-1 scheduled redemption date.] See "Risk Factors: Principal on Your
Notes May Be Paid Earlier Than Expected Creating a Reinvestment Risk to You or
Later Than Expected".
39
<PAGE>
Receivables Yield Considerations
The gross revenues from finance charges and fees billed to accounts in
the portfolio of credit and charge card accounts for each of the calendar years
ended 31 December 1998, 31 December 1997, 31 December 1996, 31 December 1995,
31 December 1994 and for the nine months ended 30 September 1999, are presented
in the following table.
The historical yield figures in the following table are calculated on
an accrual basis. Collections of receivables included in the receivables trust
will be on a cash basis and may not be the same as previous yields highlighted
in the table. During periods of increasing delinquencies or an increase in
payment deferral plans, accrual yields may exceed cash amounts accrued and
billed to cardholders. Conversely, as delinquencies decrease or the use of
periodic payment deferral programmes decrease, cash yields may exceed accrual
yields as amounts collected in a current period may include amounts accrued
during prior periods. However, the transferor believes that during the periods
referred to in the table set out below, the yield on an accrual basis closely
approximated the yield on a cash basis. The yield on both an accrual and a cash
basis will be affected by many things, including the monthly periodic finance
charges on the receivables, the amount of the annual fees and other fees,
changes in the delinquency rate on the receivables and the percentage of
cardholders who pay their balances in full each month and do not incur monthly
periodic finance charges. Additionally, the transferor may change the periodic
finance charges. See "Risk Factors: A Change in the Terms of the Receivables
May Adversely Affect the Amount or Timing of Collections and May Cause an Early
Redemption or a Downgrade of Your Notes".
The following table sets forth the revenue for the bank portfolio of card
accounts. The revenue is comprised of monthly periodic finance charges, card
fees, annual fees and interchange. These revenues vary for each account based
on the type and volume of activity for each account. See "Barclaycard' and the
Barclaycard Card Portfolio".
40
<PAGE>
Yield Experience
Bank Portfolio
<TABLE>
<CAPTION>
Quarter ended
----------------------------------------------------
30 September
1999 30 June 1999 31 March 1999
--------------- --------------- ---------------
<S> <C> <C> <C>
Accrued finance charges and fees(2)(3)..................................... $1,469,356,802 $1,443,571,477 $1,455,706,418
Average balance outstanding(4)............................................. $9,939,601,739 $9,379,117,500 $8,943,070,232
Yield from finance charges and fees(5)..................................... 14.78% 15.39% 16.28%
Yield from interchange(6).................................................. 3.55% 3.59% 3.44%
--------------- --------------- ---------------
Yield from finance charges fees and interchange............................ 18.33% 18.98% 19.72%
=============== =============== ===============
Net yield from finance charges, fees and interchange after deducting
accrued cost of funds(7) ................................................. 13.04% 13.49% 13.66%
=============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Year ended 31 December(1)
-----------------------------------------------------------------------------------------
1998 1997 1995 1995 1994
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Accrued finance charges and fees(2)(3) $1,432,124,231 $1,251,325,482 $1,150,098,564 $1,048,564,748 $874,940,096
Average balance outstanding(4)........ $8,226,003,597 $7,175,924,182 $6,592,008,620 $5,950,392,038 $5,176,315,073
Yield from finance charges and fees(5) 17.41% 17.44% 17.45% 17.63% 16.90%
Yield from interchange(6)............. 3.85% 3.78% 3.94% 4.05% 3.78%
--------------- --------------- --------------- --------------- ---------------
Yield from finance charges fees and
interchange.......................... 21.26% 21.22% 21.38% 21.67% 20.68%
=============== =============== =============== =============== ===============
Net yield from finance charges, fees
and interchange after deducting
accrued cost of funds(7) ............ 14.23% 14.32% 15.16% 15.12% 14.93%
=============== =============== =============== =============== ===============
</TABLE>
Notes:
(1) All data are presented on an annual basis, save where stated to the
contrary.
(2) Finance Charges and Fees are comprised of monthly periodic finance charges
and other card fees.
(3) Accrued Finance Charges and Fees are presented net of adjustments made
pursuant to Barclaycard's normal servicing procedures.
(4) Average Balance Outstanding includes purchases, cash advances and accrued
and unpaid monthly periodic finance and other charges and are calculated
based on the average of the account balances during the periods shown.
(5) Yield from Finance Charges and Fees is the result of dividing the
annualised Accrued Finance Charges and Fees by the Average Balance
Outstanding for the period.
(6) Yield from Interchange is the result of dividing annualised revenue
attributable to Interchange received during the period by the Average
Balance Outstanding for the period. The amount of Interchange for each of
the periods indicated above has been estimated.
(7) Yield from Finance Charges, Fees and Interchange, net of Accrued Cost of
Funds, has been adjusted to reflect financing losses involved in running
the card operation.
41
<PAGE>
The Receivables Trust
General Legal Structure
The receivables trust is a trust formed under English law by the
receivables trustee as trustee and Barclays as trust cash manager, initial
transferor beneficiary and excess interest beneficiary. The receivables trust
has been declared for the financings described in this prospectus. The terms
and conditions of the receivables trust are contained in the declaration of
trust and trust cash management agreement, which is governed by English law.
This section will describe to you the material terms of the receivables trust
and declaration of trust and trust cash management agreement. The terms of the
declaration of trust and trust cash management agreement may be varied or added
to by executing a supplement -- but only for the series of investor
certificates issued under the supplement. A precondition to the receivables
trustee entering into a supplement is obtaining confirmation from the rating
agencies that entering into the supplement will not result in any rating agency
withdrawing or downgrading its rating of any debt that is ultimately secured by
the receivables in the receivables trust. Under the declaration of trust and
trust cash management agreement, the receivables trustee holds all of the
receivables trust's property on trust for:
* the initial transferor beneficiary and the excess interest
beneficiary as the initial beneficiaries of the trust; and
* for any other person who may become an additional transferor
beneficiary or additional beneficiary of the trust as allowed by
the trust and cash management agreement.
Other than the excess interest beneficiary and a transferor beneficiary,
the two categories of beneficiary are:
* an investor beneficiary, which may include any investor
beneficiary subordinate to another investor beneficiary as a
provider of credit enhancement; or
* an enhancement provider for a series of investor certificates, if
provided for in the supplement for that series.
The excess interest beneficiary and the initial transferor beneficiary
will be the initial beneficiaries of the receivables trust. Any subsidiary of
the initial transferor that accedes to the receivables securitisation agreement
as an additional transferor will upon its accession become an additional
transferor beneficiary of the receivables trust.
By making payments to the receivables trustee as a contribution to the
receivables trust's property, as set out in the declaration of trust and trust
cash management agreement, other persons can form a series of the receivables
trust. These persons are called additional beneficiaries. When payment is made,
the additional beneficiaries will be given a certificate evidencing a
beneficial interest in the receivables trust to show that they are an investor.
This process is called an acquisition and the certificate is called an investor
certificate. When an acquisition takes place a notice will be given that will
list the parties to the acquisition and anyone who is providing credit
enhancement for the series of investor certificates, called an enhancement
provider. A new supplement to the declaration of trust and trust cash
management agreement will govern each new series of the receivables trust that
is created.
Two types of acquisition may be made:
* The transferor beneficiary, upon receiving payment from a new
series of additional beneficiaries, may direct the receivables
trustee to trade the certificate it holds showing its entitlement
to the receivables trust's property -- called the transferor
certificate -- for a new series of investor certificates and a
reissued transferor certificate evidencing the transferor's
reduced beneficial entitlement to the receivables trust's
property. This is known as a transferor acquisition.
Series 99-1 will be the first series of investor certificates
issued by the receivables trust and will be created by a
transferor acquisition occurring on the closing date.
* The second type of acquisition which may be made is an investor
acquisition where, if the supplement permits, an investor
beneficiary together with the transferor beneficiary may direct
the receivables trustee to trade their investor certificates and
the transferor certificate for one or more new investor
certificates and a reissued transferor certificate. The supplement
for series 99-1 does not permit for an investor acquisition.
The receivables trustee will authenticate and deliver a series of investor
certificates only when it has first received:
* a supplement signed by the parties to the new series, including
the receivables trustee and the transferor beneficiary, specifying
the principal terms of the series;
42
<PAGE>
* the credit enhancement, if any, and any agreement by which
an enhancement provider agrees to provide credit
enhancement -- series 99-1 has subordination as credit
enhancement and will not have an enhancement provider or an
enhancement agreement;
* a solvency certificate from the transferor and any
additional transferors;
* written confirmation from the rating agencies that the
proposed acquisition will not result in the reduction or
withdrawal of their ratings on any notes issued by the
issuer or any other issuer of further series of notes that
is ultimately secured by the receivables in the receivables
trust -- called "related beneficiary debt";
* written confirmation from each additional beneficiary and
enhancement provider, if any, that:
(1) its usual place of abode is in the United Kingdom and
it will be liable for United Kingdom corporation tax
for all amounts regarded as interest for UK tax
purposes received by it under the transactions
contemplated by the series of investor certificates;
or
(2) it is a bank, as defined for purposes of Section
349(3)(a) of the Income and Corporation Taxes Act
1988, and it will be liable for United Kingdom
corporation tax for all amounts regarded as interest
for UK tax purposes received by it under the series
of investor certificates;
* the existing transferor certificate and, if it is an
investor acquisition, the applicable investor
certificates;
* an officer's certificate provided by the transferor
certifying either:
(1) that:
* each class of related beneficiary debt issued
as part of the acquisition and described in
the related supplement will be rated in one of
the three highest rating categories by at
least one rating agency recognised in the
United Kingdom;
* each investor beneficiary -- other than any
enhancement provider -- will have associated
with it, either directly or indirectly, a
class of related beneficiary debt; and
* the enhancement for each series will be
provided by any combination of subordination
-- except subordination by way of a collateral
interest -- a letter of credit, a cash
collateral loan -- other than a cash
collateral loan providing for payment from
amounts due on any enhancement invested
amount, as defined in the related supplement,
a surety bond, an insurance policy, or a
spread or reserve account funded from excess
finance charge collections ultimately
reverting to the excess interest beneficiary
to the extent not utilised as enhancement, but
through no other means; or
(2) it has determined that, based on legal advice, the
acquisition is in the best interests of the
transferor beneficiary and its affiliates.
Each supplement to the declaration of trust and trust cash management
agreement will specify the principal terms for its series of investor
certificates, including the accumulation period or amortisation period for the
payment of principal. For each series these may be of a different length and
begin on a different date. Enhancement is specific to each series and will be
held and used by the receivables trustee only for the benefit of the relevant
series. Certain series may be subordinated to other series, and classes within
a series may have different priorities. Whether or not a series or class is
subordinated will be set out in the related supplement. Series 99-1 will not be
subordinate to any other series, but will have classes of investor certificates
that are subordinated to other classes of investor certificates. There will be
no limit on the number of acquisitions that may be performed.
The receivables trustee will not be able to arrange for additional
supplements without obtaining the consent of all the beneficiaries constituting
each existing series. Even if the receivables trustee receives all these
consents, no acquisition will be effective unless the rating agencies confirm
that the additional supplement will not result in the reduction or withdrawal
of its rating of any related beneficiary debt.
43
<PAGE>
The Receivables Trust's Property
The property of the receivables trust will include all present and future
receivables arising under all MasterCard and VISA revolving credit and charge
card accounts of Barclaycard's individual cardholders that have not been
identified as non-designated accounts and that are denominated in pounds
sterling with a billing address within England, Wales, Scotland, Northern
Ireland or a permitted additional jurisdiction. We refer to these accounts as
the "designated accounts". See "The Receivables -- Representations". The
receivables will be assigned to the receivables trustee under the receivables
securitisation agreement between Barclaycard as transferor and the receivables
trustee. The receivables securitisation agreement will be governed by English
law. Occasionally some accounts may be removed from the pool of designated
accounts. These accounts we refer to in this prospectus as the "redesignated
accounts".
The transferor is required to ensure that any of Barclaycard's credit and
charge card accounts that are to be excluded from the offer to the receivables
trustee under the receivables securitisation agreement or that are to be
removed from the pool of designated accounts are identified on its computer
system prior to the date of offer or the date of removal.
The property of the receivables trust will also include:
* all monies due in payment of the receivables from time to time;
* all proceeds of the receivables and proceeds of any guarantees and
insurance policies for the receivables -- to the extent that they
are capable of assignment;
* the benefit of any Acquired Interchange; see "The Receivables:
Interchange";
* any annual fees or special fees on the designated accounts;
* all monies on deposit in the Trust Accounts -- including any
permitted investments in which the monies are invested but
excluding investment earnings on these monies;
* any credit enhancement for the benefit of any series or class;
* all monies provided by beneficiaries of the receivables trust to
fund the purchase of receivables, until these monies are applied
as intended; and
The receivables are divided into eligible receivables and ineligible
receivables. Each investor beneficiary, the excess interest beneficiary and the
transferor beneficiary are beneficially entitled to interests in the pool of
eligible receivables.
The transferor beneficiary is beneficially entitled to the entire pool of
ineligible receivables and is solely entitled to all collections of ineligible
receivables.
General Entitlement of Beneficiaries to Trust Property
The transferor beneficiary and each investor beneficiary will acquire
undivided interests in the receivables trust by making payments in favour of
the receivables trustee. Some of the receivables trust's property that will
constitute credit enhancement may be specified as being the beneficial
entitlement of particular beneficiaries or particular series only. The
beneficiaries of the receivables trust are each beneficially entitled to share
in the receivables trust's property and each beneficiary, other than an
enhancement provider, has or will acquire interests in the pool of eligible
receivables -- called the "Eligible Receivables Pool". See "Series 99-1" for a
description of the beneficial entitlement of the issuer to receivables and for
a description of the manner in which collections will be allocated to the
issuer.
The beneficial entitlement of Barclaycard as the Excess Interest
beneficiary to the property of the receivables trust at any time is called the
"Excess Interest". The Excess Interest consists of a beneficial entitlement to
the finance charge collections and Acquired Interchange for each monthly period
which can be allocated to any series after finance charge collections are
allocated to each beneficiary forming part of that series or group of series,
if applicable, and have been used to make payments to the enhancement provider,
if it is not a beneficiary. These payments will include amounts deemed to
represent finance charge collections as stated in the supplement for the
series.
To understand the beneficial entitlement of the transferor beneficiary and
each additional transferor beneficiary you have to understand the definition of
"Transferor Percentage". The Transferor Percentage is the percentage equal to
100 per cent. less the sum of the applicable Investor Percentages of each
outstanding series.
The aggregate beneficial entitlement of the transferor beneficiary at any
time consists of the following:
* the Transferor Percentage of eligible principal receivables; the
Transferor Percentage is calculated for this purpose using the
Floating Investor Percentage for the Investor Percentage of each
series;
44
<PAGE>
* the Transferor Percentage of finance charge receivables; the
Transferor Percentage is calculated for this purpose using the
Floating Investor Percentage for each series;
* all ineligible receivables; and
* all monies held in the Trust Accounts that represent investment
earnings on permitted investments made using monies deposited in
those Trust Accounts, unless something else is provided for in the
supplement; the supplement for series 99-1 does not provide for
something else.
"Permitted investments" means the following:
* demand or time deposits, certificates of deposit and other short-
term unsecured debt obligations at or of any institution that has
unsecured and unguaranteed debt obligations of A-1+ and P-1 by
Standard & Poor' and Moody's; and
* short-term unsecured debt obligations -- including commercial
paper -- issued or guaranteed by any body corporate whose
unsecured and unguaranteed debt obligations are A-1+ and P-1 by
Standard & Poor's and Moody's.
The aggregate beneficial entitlement of the transferor beneficiary to any
other trust property at any time is equal to the proportion that the Transferor
Interest bears to the amount of eligible principal receivables at that time.
The initial transferor beneficiary's and each additional transferor
beneficiary's entitlement to the aggregate beneficial entitlement of the
transferor beneficiary will be equal to its proportionate share described in
the transferor certificate.
Allocation and Application of Collections
Initially, the following accounts will be opened by the receivables
trustee at 1234 Pavillion Drive, Northampton, NN4 7SGF, England:
* a collection account called the "Trustee Collection Account",
which is where principal collections and finance charge
collections are credited; and
* the acquisition account called the "Trustee Acquisition Account",
which is where amounts are credited that can be used to purchase
beneficial interests in receivables for the investor or transferor
beneficiaries.
The receivables trustee may open other bank accounts of the receivables
trust for particular beneficiaries. All of these accounts are called
"Additional Trust Accounts". The Trustee Acquisition Account, the Trustee
Collection Account and any Additional Trust Accounts are collectively called
"Trust Accounts". The receivables trustee will have legal title to the funds on
deposit in each Trust Account.
Collections from cardholders for designated accounts and cardholders for
other card accounts of Barclaycard are initially paid to Barclaycard's bank
accounts before being cleared on a same-day basis to a bank account called the
"Barclaycard Operating Account". Initially, the Barclaycard Operating Account
will be held by Barclaycard at its branch located at 1234 Pavillion Drive,
Northampton NN4 FSG, England. The transferor has declared a trust over the
Barclaycard Operating Account.
All money in the Barclaycard Operating Account will be transferred to the
Trustee Collection Account within two business days after processing. All money
in the Trustee Collection Account will be treated as collections from
receivables of designated accounts unless it has been incorrectly paid into the
account. Incorrect payments will be deducted from the appropriate collections
on the business day on which the error is notified to the receivables trustee.
Amounts incorrectly categorised as principal collections of eligible
receivables but which are really collections of ineligible receivables will be
given back to the transferor beneficiary, after making adjustments for errors
but before allocating amounts of principal collections that are property of the
receivables trust. The trustee will treat all money deposited in the trustee
collection account as property of the receivables trust unless notified
otherwise by the trust cash manager.
The Eligible Receivables Pool and the Transferor Interest are increased or
decreased, as applicable, to account for the errors made.
Eligible principal receivables in defaulted accounts are allocated between
the transferor beneficiary and each series of investor certificates in
accordance with their respective beneficial entitlements to the property of the
receivables trust at the time the account becomes a defaulted account. Credit
adjustments for principal receivables are allocated to the transferor
beneficiary as a reduction of the Transferor Interest until the Transferor
Interest reaches zero. Ineligible principal receivables in defaulted accounts
reduce the transferor's interest in ineligible receivables -- called the
"Transferor Ineligible Interest" -- until it reaches zero.
45
<PAGE>
Collections that are property of the receivables trust are categorised as:
* principal collections;
* finance charge collections; or
* ineligible collections.
If a Discount Percentage is nominated by the transferor, the Discount
Percentage of principal collections will be treated as finance charge
collections. The transferor has no current intention to nominate a Discount
Percentage. See "The Receivables: Discount Option Receivables".
If the related supplement says so, each series will also be entitled to a
portion of Acquired Interchange. To the extent that any Acquired Interchange is
not allocated to all those series, it will be allocated to the transferor
beneficiary.
Each series will be entitled to its applicable Investor Percentage, and
the transferor beneficiary will be entitled to its applicable Transferor
Percentage, of principal collections and finance charge collections. The excess
interest beneficiary is entitled to finance charge collections allocated to a
series that are:
* not allocated to any other beneficiary, whether or not a member of
that series; or
* any enhancement provider, as set out in the supplement relating to
that series.
Each supplement will set out, for its series, the entitlement of each
investor beneficiary to principal collections, finance charge collections and
Acquired Interchange.
The transferor may fulfil any obligation to make payments to the
receivables trustee for principal receivables for which it has breached a
warranty by:
* reducing the Transferor Interest; and
* increasing the Transferor Ineligible Interest.
However, if the Transferor Interest would be reduced below zero, the
transferor must make a similar payment in immediately available funds to the
receivables trustee under the declaration of trust and trust cash management
agreement and the receivables securitisation agreement.
The receivables trustee will pay the trust cash management fee to the
trust cash manager from payments made by the beneficiaries and this amount will
be deducted from the transferor beneficiary's and each series' portion of the
finance charge collections.
The receivables trustee will transfer money daily from the Trustee
Collection Account in the following priority:
(1) the amount of any incorrect payments notified to the receivables trustee
not previously allocated as collections, to the Barclaycard Operating
Account, after which the transferor beneficiary will own the money
absolutely;
(2) the amount of ineligible collections notified to the receivables trustee
not previously allocated as principal collections, to the Barclaycard
Proceeds Account, after which the transferor beneficiary will own the
money absolutely;
(3) the total amount of principal collections allocated to the investor
interest of any series, minus the Investor Cash Available for Acquisition
of that series, to the account specified in the supplement for that
series;
(4) the total amount of Investor Cash Available for Acquisition and
Transferor Cash Available for Acquisition needed on that day from the
Principal Collections Ledger, to the Trustee Acquisition Account;
(5) the Transferor Percentage of finance charge collections and the amount of
Acquired Interchange deposited in the Trustee Collection Account not
allocated to any outstanding series, from the Finance Charge Collections
Ledger, to the Barclaycard Proceeds Account, or as the transferor
beneficiary may direct, after which the money will be owned by the
transferor beneficiary absolutely; and
(6) each finance charge amount and all Acquired Interchange allocable to any
outstanding series, from the Finance Charge Collections Ledger to any
account that may be specified in the supplement for that series.
Acquiring Additional Entitlements to Trust Property and Payments for Receivables
To understand what a revolving period is, see "Series 99-1: Allocation,
Calculation and Distribution of Principal Collections to the MTN Issuer".
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During the revolving period for a series, the receivables trustee will use
the portion of principal collections allocated to the investor beneficiaries of
that series and which is available to fund the acquisition of the beneficial
entitlement to receivables to pay for the purchase of the beneficial
entitlement to receivables that are eligible. These available principal
collections are called "Investor Cash Available for Acquisition". No Investor
Cash Available for Acquisition will be used to fund ineligible receivables.
On any day a series may be allocated more money for acquisitions than is
needed to purchase existing or future receivables that are eligible and
available for a series to fund. In that case, that series will use the excess
Investor Cash Available for Acquisition to acquire available Transferor
Interest from the transferor beneficiary and, if allowed under its supplement,
investor interest from other designated series. Any money left over will be
used to fund acquisitions on subsequent business days.
The transferor beneficiary will fund the amount payable by the receivables
trustee for all the existing and future receivables that all series are unable
to fund plus the amount of any ineligible receivables that need to be funded.
Consequently, the amount payable by the receivables trustee to the transferor
for all existing and future receivables it is purchasing on any business day
will be funded first by the series to the extent of all of the Investor Cash
Available for Acquisition and then by the transferor beneficiary to the extent
of the Transferor Cash Available for Acquisition. "Transferor Cash Available
for Acquisition" for any day means an amount equal to the Transferor Percentage
of principal collections processed on that day.
On each business day the beneficial interest of each series in the
Eligible Receivables Pool:
* will be decreased by the amount of principal collections allocated
to that series that constitutes Investor Cash Available for
Acquisition; and
* will be increased by the amount of Investor Cash Available for
Acquisition used by the receivables trustee to pay for existing
and future receivables and the amount of Investor Cash Available
for Acquisition allocated to the Transferor Interest or the
investor interest of other series to increase the proportion of
the beneficial interest of that series.
These changes will not effect the beneficial entitlement of:
* any beneficiary to monies credited to any Trust Account to which
it is beneficially entitled; or
* any series to monies credited to any Trust Account to which the
beneficiaries constituting that series are together beneficially
entitled.
On each business day after making all adjustments, the beneficial interest
of the transferor beneficiary in the Eligible Receivables Pool:
* will be decreased by the amount of principal collections and
Investor Cash Available for Acquisition allocated to the
transferor beneficiary; and
* will be increased by the amount of Transferor Cash Available for
Acquisition and the increase in the Transferor Interest resulting
from the decrease described in the prior bullet point.
However, any change in the beneficial interest of the transferor
beneficiary in the Eligible Receivables Pool will not affect the beneficial
entitlement of the transferor beneficiary to money credited to any Trust
Account to which it is beneficially entitled.
The investor interest of each series and the beneficial interest in the
receivables trust of each additional beneficiary will increase or decrease as
described in the related supplement.
On each business day, after making all adjustments, the Transferor
Interest:
* will be decreased by the amount of Transferor Cash Available for
Acquisition not used to pay for new receivables and Investor Cash
Available for Acquisition transferred to the transferor
beneficiary by credit to the Barclaycard Proceeds Account; and
* will be increased by the purchase price payable to the transferor
by the receivables trustee to be funded by the transferor
beneficiary.
These changes will not affect the beneficial entitlement of the transferor
beneficiary to money credited to any Trust Account to which it is beneficially
entitled.
Other adjustments to the Transferor Interest are explained in "The
Receivables Trust: Allocation and Application of Collections".
Non-Petition Undertaking of Beneficiaries
Each beneficiary of the receivables trust, including Barclaycard as
transferor beneficiary and excess interest beneficiary, the transferor, the
trust cash manager and any successor trust cash manager, by entering
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into a supplement, will agree with the receivables trustee for itself and as
trustee that it will not attempt to take any action or legal proceedings for
the winding up, dissolution or re-organisation of, or for the appointment of a
receiver, administrator, administrative receiver, trustee, liquidator,
sequestrator or similar officer for, any investor beneficiary, the receivables
trustee or the receivables trust. These parties will also agree not to seek to
enforce any judgements against any of those persons.
Trust Pay Out Events
The following is a list of what we refer to in this prospectus as the
"Trust Pay Out Events":
(1) the transferor consents or takes any corporate action to appoint a
receiver, administrator, administrative receiver, liquidator, trustee or
similar officer of it or over all or substantially all of its revenues
and assets;
(2) proceedings are started against the transferor under any applicable
liquidation, insolvency, composition or re-organisation or similar laws
for its winding up, dissolution, administration or re-organisation and
the proceedings are not discharged within 60 days, or a receiver,
administrator, administrative receiver, liquidator, trustee or similar
officer of it or relating to all or substantially all of its revenues and
assets is legally and validly appointed and is not discharged within 14
days;
(3) an authorised officer of the transferor admits in writing that the
transferor beneficiary or excess interest beneficiary is unable to pay
its debts when they fall due within the meaning of Section 123(1) of the
Insolvency Act 1986 or the transferor makes a general assignment for the
benefit of or a composition with its creditors or voluntarily suspends
payment of its obligations to generally readjust or reschedule its debt;
(4) the transferor cannot transfer receivables in the designated accounts to
the receivables trust in the manner described in the receivables
securitisation agreement;
(5) the transferor stops being either a resident for tax purposes in the
United Kingdom or liable for United Kingdom corporation tax; or
(6) either:
* a change in law or its interpretation or administration results in
the receivables trustee becoming liable to make any payment on
account of tax -- other than stamp duty payable in the United
Kingdom for the transfer of receivables under the receivables
securitisation agreement;
* any tax authority asserts a tax liability or takes other actions
against Barclays or any of its subsidiaries in relation to the
transaction which would have a material adverse affect on them.
For this trust pay-out event, Barclays is required to obtain an
opinion of counsel stating this. This Trust Pay Out event will
occur when Barclays, as transferor beneficiary, gives written
notice of it to the receivables trustee.
The Trust Pay Out Events in paragraphs (1), (2) and (3) are called
"Insolvency Events". If an Insolvency Event occurs, a pay out event will occur
for each series, each beneficiary within a series and for the transferor
beneficiary. If any other Trust Pay Out Event occurs, a pay out event will
occur for each series and each beneficiary within a series. Trust Pay Out
Events will occur without any notice or other action on the part of the
receivables trustee or any beneficiary, as soon as the event happens.
A "Pay Out Event" for series 99-1 means a Trust Pay Out Event or one of
the events listed in "Series 99-1: Series 99-1 Pay Out Events".
After an Insolvency Event, future receivables, other than finance charge
receivables accruing for principal receivables that have been assigned to the
receivables trustee, will no longer be assigned to the receivables trustee. The
receivables trustee will not be obligated or entitled to accept any more offers
of receivables after an Insolvency Event. Finance charge receivables accruing
on principal receivables that have been assigned to the receivables trustee
before the Insolvency Event will still be part of the receivables trust's
property and finance charge collections from them will continue to be allocated
and applied as set out in the declaration of trust and trust cash management
agreement and each supplement.
The receivables trustee will notify each beneficiary if an Insolvency
Event occurs and will dispose of the receivables on commercially reasonable
terms, unless within 60 days of that notice beneficiaries representing more
than 50 per cent. of the investor interest of every series, both the transferor
beneficiary and the excess interest beneficiary -- in each case, if not subject
to an Insolvency Event -- and every other person identified in any supplement
disapproves of the liquidation of the receivables and wishes to continue with
the receivables trustee accepting offers and purchasing receivables under the
receivables securitisation agreement. Money from this sale will be treated as
collections on the receivables and will be distributed in accordance with the
provisions of the declaration of trust and trust cash management agreement and
each supplement. See "Series 99-1".
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Termination of the Receivables Trust
If the receivables trust has not already been dissolved after an
Insolvency Event, then, the transferor beneficiary can instruct the receivables
trustee to dissolve the receivables trust on any day on which:
* the total amount of all of the investor interests for each series
is reduced to zero;
* there are no finance charge collections or other trust property
allocated to any beneficiaries other than the transferor
beneficiary or the excess interest beneficiary; and
* no beneficiary is committed to fund payments to the transferor for
purchases of receivables by the receivables trust.
After the receivables trust is dissolved, all of the receivables trust's
property will be controlled by the transferor beneficiary as residual
beneficiary, and the receivables securitisation agreement will be terminated.
For the purposes of Section 1 of the Perpetuities and Accumulations Act
1964, the duration of the perpetuity period for the receivables trust's
property will be a period ending not later than 80 years from the date of
execution of the declaration of trust and trust cash management agreement. Any
property of the receivables trust after this period will vest in the current
beneficiaries in accordance with their entitlements to the receivables trust's
property at that date.
Amendments to the Declaration of Trust and Trust Cash Management Agreement
The declaration of trust and trust cash management agreement may be
amended with the prior consent of each beneficiary. No amendment will be
effective unless each rating agency has confirmed that the amendment will not
result in a reduction or withdrawal of its then current rating of any
outstanding debt directly or indirectly secured by the receivables in the
receivables trust.
No investor beneficiary will consent to any proposed amendment unless
instructed to do so by noteholders holding in total not less than two thirds of
the MTNs then outstanding of each outstanding series adversely affected. The
investor will not consent to any proposed amendment that would:
* reduce or delay required distributions to any investor beneficiary
for the affected series;
* change the definition or the manner of calculating the investor
interest, the Investor Percentage or the investor default amount
of the series or any class of the affected series; or
* reduce the percentage required to consent to any amendment unless
instructed to do so by all the noteholders of the MTNs then
outstanding of the series adversely affected.
Disposals
Beneficiaries may not transfer or dispose of their beneficial entitlements
in the receivables trust or create any encumbrance over its beneficial
entitlement, except that:
* the transferor beneficiary or the excess interest beneficiary may
dispose of the Transferor Interest or the Excess Interest by
transferring all or substantially all of its properties and assets
to any person, if that person also expressly assumes the duties and
obligations of the transferor, the transferor beneficiary and the
excess interest beneficiary under the Trustee Relevant Documents;
after the transfer, the new person will be the person used to
determine if an Insolvency Event has occurred;
* the transferor beneficiary or the excess interest beneficiary may
transfer or create any encumbrance over the whole or any part of
the Transferor Interest or the Excess Interest with the consent of
investor beneficiaries representing in total more than one-half of
the total investor interest of each series; however, the rating
agencies must first confirm that the transfer or encumbrance will
not result in a downgrade or withdrawal of its rating of any
outstanding related beneficiary debt; and
* any beneficiary -- except for the transferor beneficiary or the
excess interest beneficiary -- may transfer all or any part of
their beneficial entitlement or grant an encumbrance over their
beneficial entitlement with the prior written consent of the
transferor beneficiary, which consent will not be unreasonably
withheld; however, the receivables trustee must first receive
confirmation in writing from the person to whom the transfer will
be made or for whom the encumbrance will be granted or created,
that it complies with the criteria referred to in the
prerequisites to the completion of an acquisition as referred to
in "-- General Legal Structure" above.
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Trustee Payment Amount
The receivables trustee will be paid its fees, costs and expenses --
including, value added tax on the sums it incurs, any expense incurred from
being indemnified under the declaration of trust and trust cash management
agreement -- out of the property of the receivables trust allocated to the
investor beneficiaries. The receivables trustee will be paid monthly in arrears
on each transfer date the amounts certified by the trust cash manager to the
receivables trustee by the end of any monthly period as being due to it for
that monthly period. This payment is called the "Trustee Payment Amount". The
allocation of the Trustee Payment Amount to series 99-1 and to the MTN issuer
is described in "Series 99-1: Trustee Payment Amount".
Servicing of Receivables and Trust Cash Management
General -- Servicing
Barclaycard has been appointed by the receivables trustee on behalf of the
beneficiaries of the receivables trust as initial servicer under the terms of
the beneficiaries servicing agreement. Any additional transferor beneficiary or
beneficiary must accede to the beneficiaries servicing agreement. The servicer
will service and administer the receivables and will collect payments on the
receivables using its usual servicing policies, procedures and practices for
servicing credit and charge card receivables comparable to the receivables in
the designated accounts. The servicer has full power and authority, acting
alone or through any other party properly designated, to undertake all actions
concerning the management of the receivables it considers necessary or
desirable.
The servicer's duties will include but are not confined to:
* carrying out credit underwriting on anyone applying to open an
account that will become a designated account;
* carrying out valuations on the receivables to determine if they
should be charged-off as uncollectable;
* receiving and responding to requests for authorisation of
cardholder transactions;
* reviewing cardholder payment history to decide if credit limits
should be increased or transactions should be authorised;
* keeping records of the functions listed above and providing them
to the beneficiaries when required;
* monitoring cardholder payments and taking all necessary steps to
collect payments.
The servicer will not resign from its obligations and duties as servicer
under the beneficiaries servicing agreement unless its performance is no longer
permitted under applicable law and there is no reasonable action that it can
take to remedy the situation. The servicer's resignation will not be effective
until a successor servicer has been properly appointed. Barclaycard, as initial
servicer, performs account processing and administration in-house, but has
subcontracted some cardholder payment processing services, which are undertaken
on Barclaycard's behalf by Great Universal Stores Home Shopping. See
"Barclaycard and the Barclaycard Card Portfolio: General".
The servicer will indemnify each investor beneficiary and the receivables
trust against all reasonable loss, liability, expense, damage or injury caused
by the servicer's fraud, willful misconduct or negligence in performing its
servicing functions. However, the servicer will not indemnify any investor
beneficiary:
* if any acts or omissions are caused by the negligence, fraud or
willful misconduct of that investor beneficiary or its agents;
* for any liabilities, costs or other expenses of the receivables
trust for any action taken by the receivables trustee at the
request of any investor beneficiary of any series to which that
investor beneficiary belongs;
* for any loss or other claims that are incurred by them acting in
their capacity as beneficiaries, including those resulting from
defaulted accounts; or
* for any liabilities or other costs arising under any tax law or
any penalties or interest caused by a failure to comply with any
tax law, payable by it in connection with the beneficiaries
servicing agreement to any tax authority.
The directors, officers and other employees and agents of the servicer and
the servicer itself will not be under any liability to the receivables trustee,
the receivables trust, the investor beneficiaries, any enhancement
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provider or any other person under the beneficiaries servicing agreement or any
other person under the beneficiaries servicing agreement or under any other
document delivered pursuant to the beneficiaries servicing agreement, except in
the case of intentional wrongdoing, bad faith or gross negligence in performing
its duties under the beneficiaries servicing agreement.
Any person into which the servicer may be merged or consolidated, or any
person succeeding to or acquiring the business of the servicer in whole or in
part, after executing a supplemental agreement to the beneficiaries servicing
agreement and the delivery of a legal opinion, will become the successor to the
servicer or co-servicer with the servicer under the beneficiaries servicing
agreement.
General -- Trust Cash Management
Barclaycard has been appointed by the receivables trustee on behalf of the
beneficiaries of the receivables trust as initial trust cash manager under the
terms of the declaration of trust and trust cash management agreement. The
trust cash manager will carry out cash management functions in relation to the
receivables on behalf of the receivables trustee.
The trust cash manager's duties will include but are not confined to:
* making calculations on the allocations of receivables; and
* instructing the receivables trustee to transfer money between the
Trust Accounts and to make withdrawals and payments from the Trust
Accounts as set forth in the declaration of trust and trust cash
management agreement.
The trust cash manager will not resign from its obligations and duties as
trust cash manager under the declaration of trust and trust cash management
agreement unless its performance is no longer permitted under applicable law
and there is no reasonable action that it can take to remedy the situation. The
trust cash manager's resignation will not be effective until a successor trust
cash manager has been properly appointed.
The trust cash manager will indemnify the receivables trustee and the
receivables trust against all reasonable loss, liability, expense, damage or
injury caused by its fraud, willful misconduct or negligence in performing its
cash management functions. However, the trust cash manager will not indemnify
the receivables trustee:
* if any acts or omissions are caused by the negligence, fraud or
willful misconduct of the receivables trustee or its agents;
* for any liabilities, costs or other expenses of the receivables
trust for any action taken by the receivables trustee at the
request of any investor beneficiary of any series to which that
investor beneficiary belongs; or
* for any liabilities or other costs of it or the receivables trust
arising under any tax law or any penalties or interest caused by a
failure to comply with any tax law, payable by it or the
receivables trust in connection with the declaration of trust and
trust cash management agreement to any tax authority.
The directors, officers and other employees and agents of the trust cash
manager and the trust cash manager itself will not be under any liability to
the receivables trustee or the receivables trust or any other person under the
declaration of trust and trust cash management agreement except in the case of
intentional wrongdoing, bad faith or gross negligence in performing its duties
under the declaration of trust and trust cash management agreement.
Any person into which the trust cash manager may be merged or
consolidated, or any person succeeding to or acquiring the business of the
trust cash manager in whole or in part, after executing a supplemental
agreement to the trust and cash management agreement and the delivery of a
legal opinion, will become the successor to the trust cash manager or co-trust
cash manager under the declaration of trust and trust cash management
agreement.
Servicing and Trust Cash Manager Compensation
The servicer is entitled to receive an annual fee from the beneficiaries.
This fee is called the "servicing fee" and is payable monthly on each transfer
date, to the extent that those monies are available. Any amounts payable in
respect of servicing fee will be inclusive of VAT, if any. The servicing fee
will be equal to one-twelfth of the product of:
* the weighted average of the percentages specified in each
supplement as being the series servicing fee percentage for that
series -- weighted by the investor interest for each series; and
* the average daily total outstanding face amount of principal
receivables during that monthly period.
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The share of the servicing fee payable by the receivables trustee to the
servicer for series 99-1 on any transfer date is called the "investor servicing
fee" and will be equal to:
* one-twelfth of the product of:
(1) [*]%; or
(2) another amount agreed with the investor beneficiaries as
long as Barclaycard is the servicer; and
* the Adjusted Investor Interest as at the last day of the monthly
period before that transfer date; plus
On the first transfer date, after the closing date, the investor servicing
fee will be L[*].
The balance of the servicing fee not payable by series 99-1 or any other
series will be payable by the transferor and is called the "transferor
servicing fee". If the servicer is also the transferor beneficiary in any
monthly period, the transferor servicing fee for that monthly period will not
be paid.
The trust cash manager is entitled to receive a fee from the receivables
trustee for each monthly period. This fee is called the "trust cash management
fee" and is payable monthly on each transfer date, to the extent that those
monies have been received. Any amounts payable for the trust cash manager fee
will be inclusive of VAT, if any. The trust cash management fee will be equal
to one-twelfth of the product of:
* the weighted average of the percentages specified in each
supplement as being the series trust cash management fee
percentage for that series -- weighted by the investor interest
for each series; and
* the average daily total outstanding face amount of principal
receivables during that monthly period.
The share of the trust cash management fee payable by the receivables
trustee to the trust cash manager for series 99-1 on any transfer date is
called the "investor cash management fee" and will be equal to:
* one-twelfth of the product of:
(1) [*]%; or
(2) another amount agreed with the receivables trustee as long
as Barclaycard is the cash manager; and
* the Adjusted Investor Interest as at the last day of the monthly
period before that transfer date.
On the first transfer date, after the closing date, the investor cash
management fee will be L[*].
The balance of the trust cash management fee not payable by series 99-1 or
any other series will be payable by the transferor and is called the
"transferor cash management fee". If the trust cash manager is also the
transferor beneficiary in any monthly period, the transferor cash management
fee for that monthly period will not be paid.
The investor servicing fee allocable to the MTN issuer for each class of
MTNs on any transfer date will be equal to one-twelfth of the product of:
* the floating allocation for the relevant class;
* [*]%; and
* the Adjusted Investor Interest as of the last day of the prior monthly
period.
The investor servicing fee so allocated to the class A MTNs, the class B
MTNs and the class C MTNs will be called the "class A servicing fee", the
"class B servicing fee" and the "class C servicing fee", respectively.
Termination of Appointment of Servicer
The appointment of the transferor as servicer under the beneficiaries
servicing agreement and the appointment of any person as joint servicer or to
replace anyone then acting as the servicer -- called a "successor servicer" --
will terminate when a servicer default occurs.
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"servicer default" means any one of the following events:
(1) failure on the part of the servicer duly to observe or perform in any
respect any other covenant or agreement of the servicer contained in the
beneficiaries servicing agreement, or any other relevant documents, that
has a material adverse effect on the interests of the investor
beneficiaries of any outstanding series; this failure will constitute a
servicer default only if it remains unremedied and continues to have a
material adverse effect on the interests of the investor beneficiaries
for 60 days after the receipt of a notice of the failure is given; the
notice of failure will be given by either (1) the receivables trustee to
the servicer, or (2) the investor beneficiaries to the receivables
trustee and the servicer; if the notice is given by the investor
beneficiaries it will be on the instruction of a group of holders of MTNs
representing more than fifty per cent. of the total face value of the
MTNs outstanding of any outstanding series adversely affected;
(2) delegation by the servicer of its duties under the beneficiaries
servicing agreement to any other entity, except as permitted by the
beneficiaries servicing agreement;
(3) any relevant representation, warranty or certification made by the
servicer in the beneficiaries servicing agreement or in any certificate
delivered under the beneficiaries servicing agreement was incorrect when
made, which has a material adverse effect on the interests of the
investor beneficiaries of any outstanding series; this failure will only
be a servicer default if it remains unremedied and continues to have a
material adverse effect on the interests of the investor beneficiaries
for 60 days after the receipt of a notice of the failure is given; the
notice of the failure will be given by either (1) the receivables trustee
to the servicer, or (2) the investor beneficiaries to the receivables
trustee and the servicer; if the notice is given by the investor
beneficiaries it will be on the instruction of holders of MTNs
representing more than fifty per cent. of the total face value of the
MTNs outstanding of any outstanding series adversely affected;
(4) any of the following:
* the servicer agrees to or takes any corporate action to appoint a
receiver, administrative receiver, trustee or similar officer of
it or of substantially all of its revenues and assets; or
* an order of the court is made for its winding-up, dissolution,
administration or re-organisation that has remained in force
undischarged or unstayed for 60 days; or
* a receiver, administrative receiver, trustee or similar officer of
it or all of its revenues and assets, is appointed; and
(5) any of the following:
* a duly authorised officer of the servicer admits in writing that
the servicer is unable to pay its debts as they fall due within
the meaning of Section 123(1) of the Insolvency Act 1986; or
* the servicer makes a general assignment for the benefit of or a
composition with its creditors or it voluntarily suspends payment
of its obligations with a view to the general readjustment or
rescheduling of its indebtedness.
In the case of (1), (2) or (3) above the grace period will be 60 business
days. The grace period is the extra number of days before a servicer default
can be called, allowing the servicer to remedy a servicer default that has been
caused by so-called acts of God or uncontrollable circumstances. These
circumstances are called force majeure events and are listed in the
beneficiaries serving agreement.
Within two business days after the servicer becomes aware of any servicer
default, the servicer must notify the receivables trustee, each rating agency,
each investor beneficiary, the security trustee and any enhancement provider as
soon as possible in writing. The receivables trustee must give each investor
beneficiary and rating agency notice of any removal of the servicer or
appointment of a successor servicer. The receivables trustee must give each
rating agency notice of any removal of the servicer.
Investor beneficiaries acting on the instructions of holders of MTNs
representing in total more than two-thirds of the total face value of MTNs then
outstanding of each series adversely affected by any default by the servicer or
the transferor in the performance of its obligations under the beneficiaries
servicing agreement and any other relevant documents, may waive the default
unless it is a failure to make any required deposits, or payments of interest
or principal for the adversely affected series.
After the servicer receives a termination notice and a successor servicer
is appointed, the duties of acting as servicer of the receivables under the
beneficiaries servicing agreement will pass from the then servicer to the
successor servicer. The beneficiaries servicing agreement contains the
requirements for the transfer of the servicing role, including the transfer of
authority over collections, the transfer of electronic records and the
disclosure of information.
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After it receives a termination notice, the servicer will continue to act
as servicer until agreed by it and the receivables trustee. The receivables
trustee must try to appoint a successor servicer that is an eligible servicer.
If the receivables trustee cannot appoint a successor servicer and the
servicer delivers a certificate that says it cannot in good faith cure the
servicer default, then the receivables trustee will start the process of
selling the receivables. The investor beneficiary will notify any enhancement
providers of the proposed sale of the receivables by the receivables trustee to
a third party and will provide each enhancement provider an opportunity to bid
on purchasing the receivables.
The proceeds of the sale will be deposited in the Trust Accounts for
distribution to the beneficiaries as set out in the declaration of trust and
trust cash management agreement and the series supplements.
An "eligible servicer" means an entity that, when it is servicer:
* is servicing a portfolio of consumer revolving credit card
accounts or other consumer revolving credit accounts;
* is legally qualified and has the capacity to service the
designated accounts;
* is qualified or licensed to use the software that the servicer is
then currently using to service the designated accounts or obtains
the right to use, or has its own, software that is adequate to
perform its duties under the beneficiaries servicing agreement;
and
* has, in the opinion of each rating agency, demonstrated the
ability to service, professionally and competently, a portfsolio
of similar accounts in accordance with customary standards of
skill and care.
Termination of Appointment of Trust Cash Manager
The appointment of the transferor as trust cash manager under the
declaration of trust and trust cash management agreement and the appointment of
any person as joint trust cash manager or to replace anyone then acting as the
trust cash manager -- called a "successor cash manager" -- will terminate when
a trust cash manager default occurs.
"trust cash manager default" means any one of the following events:
(1) any failure by the trust cash manager to direct the making of any
payment, transfer or deposit or to give instructions or notice to the
receivables trustee pursuant to an agreed schedule of collections and
allocations; any failure by the trust cash manager to instruct the
receivables trustee to make any required drawing, withdrawal, or payment
under any credit enhancement; these events will be considered failures if
they do not happen within five business days after the date that they
were supposed to happen under the terms of the declaration of trust and
trust agreement or any other relevant document;
(2) failure on the part of the trust cash manager duly to observe or perform
in any respect any other covenant or agreement of the trust cash manager
contained in the declaration of trust and trust cash management
agreement, or any other relevant documents, that has a material adverse
effect on the interests of the investor beneficiaries of any outstanding
series; this failure will constitute a servicer default only if it
remains unremedied and continues to have a material adverse effect on the
interests of the investor beneficiaries for 60 days after the receipt of
a notice of the failure is given; the notice of the failure will be given
by either (1) the receivables trustee to the trust cash manager, or (2)
the investor beneficiaries to the receivables trustee and the trust cash
manager; if the notice is given by the investor beneficiaries it will be
on the instruction of a group of holders of MTNs representing more than
fifty per cent. of the total face value of the MTNs outstanding of any
outstanding series adversely affected;
(3) delegation by the trust cash manager of its duties under the declaration
of trust and trust cash management agreement to any other entity, except
as permitted by the declaration of trust and trust cash management
agreement;
(4) any relevant representation, warranty or certification made by the trust
cash manager in the declaration of trust and trust cash management
agreement or in any certificate delivered under the declaration of trust
and trust cash management agreement was incorrect when made, which has a
material adverse effect on the interests of the investor beneficiaries of
any outstanding series; this failure will only be a trust cash manager
default if it remains unremedied and continues to have a material adverse
effect on the interests of the investor beneficiaries for 60 days after
the receipt of a notice of the failure is given; the notice of the
failure will be given by either (1) the receivables trustee to the trust
cash manager, or (2) the investor beneficiaries to the receivables
trustee and the trust cash manager; if the notice is given by the
investor beneficiaries it will be on the instruction of holders of MTNs
representing more than fifty per cent. of the total face value of the
MTNs outstanding of any outstanding series adversely affected;
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(5) any of the following:
* the trust cash manager agrees to or takes any corporate action to
appoint a receiver, administrator, administrative receiver,
liquidator, trustee or similar officer of it or of all of its
revenues and assets; or
* an order of the court is made for its winding-up, dissolution,
administration or re-organisation that has remained in force
undischarged or unstayed for 60 days; or
* a receiver, administrator, administrative receiver, liquidator,
trustee or similar officer of it or all of its revenues and assets
is appointed; and
(6) any of the following:
* a duly authorised officer of the trust cash manager admits in
writing that the trust cash manager is unable to pay its debts as
they fall due within the meaning of Section 123(1) of the
Insolvency Act 1986; or
* the trust cash manager makes a general assignment for the benefit
of or a composition with its creditors it voluntarily suspends
payment of its obligations with a view to the general readjustment
or rescheduling of its indebtedness.
In the case of (1) above the grace period will be 10 business days and in
the case of (2), (3) or (4) above it will be 60 business days. The grace period
is the extra number of days before a trust cash manager default can be called,
allowing the trust cash manager to remedy a trust cash manager default that has
been caused by so-called acts of God or uncontrollable circumstances. These
circumstances are called force majeure events and are listed in the declaration
of trust and trust cash management agreement.
Within two business days after the trust cash manager becomes aware of any
trust cash manager default, the trust cash manager must notify the receivables
trustee, each rating agency, each investor beneficiary and any enhancement
provider as soon as possible in writing. The receivables trustee must give each
investor beneficiary and rating agency notice of any removal of the trust cash
manager or appointment of a successor cash manager. The receivables trustee
must give each rating agency notice of any removal of the trust cash manager.
Investor beneficiaries acting on the instructions of holders of MTNs
representing in total more than two-thirds of the total face value of MTNs then
outstanding of each series adversely affected by any default by the trust cash
manager or the transferor in the performance of its obligations under the
declaration of trust and trust cash management agreement and any other relevant
documents, may waive the default unless it is a failure to make any required
deposits, or payments of interest or principal, for the adversely affected
series.
After the trust cash manager receives a termination notice and a successor
cash manager is appointed, the duties of acting as trust cash manager of the
receivables under the declaration of trust and trust cash management agreement
will pass from the then trust cash manager to the successor cash manager. The
declaration of trust and trust cash management agreement contains the
requirements for the transfer of the cash management role, including the
transfer of authority over collections, the transfer of electronic records and
the disclosure of information.
After it receives a termination notice, the trust cash manager will
continue to act as trust cash manager until a date agreed by the receivables
trustee and the trust cash manager. The receivables trustee must try to appoint
a successor cash manager that is an eligible trust cash manager.
If the receivables trustee cannot appoint a successor cash manager and the
trust cash manager delivers a certificate that says it cannot in good faith
cure the trust cash manager default, then the receivables trustee will start
the process of selling the receivables. The receivables trustee will notify
each enhancement provider of the proposed sale of the receivables by the
receivables trustee to a third party and will provide each enhancement provider
an opportunity to bid on purchasing the receivables.
The proceeds of the sale will be deposited in the Trust Accounts for
distribution to the beneficiaries as set out in the declaration of trust and
agreement and the series supplements.
An "eligible trust cash manager" means an entity that, when it is trust
cash manager:
* is legally qualified and has the capacity to carry out the cash
management functions as set forth in the declaration of trust and
trust cash management agreement;
* is qualified or licensed to use the software that the trust cash
manager is then currently using to carry out cash management of
the receivables or obtains the right to use, or has its own,
software that is adequate to perform its duties under the
declaration of trust and trust cash management agreement; and
* has, in the opinion of each rating agency, demonstrated the
ability to professionally and competently act as a cash manager
with customary standards of skill and care.
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Series 99-1
General
The MTN issuer is an investor beneficiary of the receivables trust and a
member of series 99-1. Series 99-1 is constituted by a series supplement that
is called the "Series 99-1 Supplement". The parties to the Series 99-1
Supplement are the receivables trustee and Barclaycard as the transferor
beneficiary, the excess interest beneficiary, the trust cash manager and the
transferor and:
* the MTN issuer as the beneficiary of the class entitled to the
Class A Investor Interest -- called "Class A";
* the MTN issuer as the beneficiary of the class entitled to the
Class B Investor Interest -- called "Class B"; and
* the MTN issuer as the beneficiary of the class entitled to the
Class C Investor Interest -- called "Class C".
The MTN issuer will become the first investor beneficiary by making the
following payments to the receivables trustee on the closing date:
* for Class A L[*]; we call this the "Class A Initial Investor
Interest";
* for Class B L[*]; we call this the "Class B Initial Investor
Interest"; and
* for Class C L[*]; we call this the "Class C Initial Investor
Interest".
The MTN issuer will receive an investor certificate for each class. These
certificates will be evidence of the initial investor beneficial interests for
series 99-1 in the receivables trust and will be governed by English law.
The MTN issuer will confirm the following in the Series 99-1 Supplement:
* that its usual place of abode is within the United Kingdom for the
purpose of Section 349 of the Income and Corporation Taxes Act
1988; and
* that it has a business establishment -- as defined for the
purposes of the Value Added Tax Act 1994 -- in the United Kingdom
that is either its only business establishment or is its business
establishment at which the services received by it as contemplated
in the declaration of trust and trust cash management agreement
and any Trustee Related Document will be most directly used.
Series 99-1 will be included in group one and will not be subordinated to
any other investor beneficiary or series.
Beneficial Entitlement of the MTN Issuer to Trust Property
In order to understand the beneficial entitlement of the MTN issuer to the
property of the receivables trust you will need to understand the following
definitions.
The "Class A Floating Allocation", the "Class B Floating Allocation" and
the "Class C Floating Allocation" will each be calculated the same way and will
be equal to, for each class and for each monthly period, the following fraction
expressed as a percentage:
The Adjusted Investor Interest for the relevant class
-----------------------------------------------------
Adjusted Investor Interest
where these amounts are calculated on the close of business on the last day of
the monthly period prior to the transfer date.
The floating allocation for each class for the first monthly period will
be calculated as follows:
The Initial Investor Interest for the relevant class
----------------------------------------------------
Initial Investor Interest
"Class A Investor Interest" means at any time an amount equal to:
(1) the Class A Initial Investor Interest, minus
(2) the total principal payments made to the MTN issuer on the class A
investor certificates from the property of the receivables trust,
minus
(3) the total amount of Class A Investor Charge-Offs for all prior
transfer dates, plus
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(4) the total amount of any reimbursements of those Class A Investor
Charge-Offs on those prior transfer dates.
The Class A Investor Interest, however, may not be reduced below zero.
"Class A Adjusted Investor Interest" means an amount equal to the Class A
Investor Interest minus the balance on deposit in the Principal Funding
Account, but not more than the Class A Investor Interest.
"Class A Investor Charge-Off" means a reduction in the Class A Investor
Interest on any transfer date by the amount, if any, by which the Class A
Investor Default Amount exceeds the total amount of Class A Available Funds,
Excess Spread, Reallocated Class B Principal Collections, Reallocated Class C
Principal Collections, the Class C Investor Interest and the Class B Investor
Interest available and allocated on that transfer date to fund the Class A
Investor Default Amount.
"Adjusted Investor Interest" means the sum of the Class A Adjusted
Investor Interest, the Class B Adjusted Investor Interest and the Class C
Adjusted Investor Interest.
"Initial Investor Interest" means L [*]. This equals the sum of the Class
A Initial Investor Interest, the Class B Initial Investor Interest and the
Class C Initial Investor Interest.
"Class B Investor Interest" means, at any time, an amount equal to:
(1) the Class B Initial Investor Interest, minus
(2) the total principal payments made to the MTN issuer, on the class
B investor certificates from the property of the receivables
trust, minus
(3) the total amount of Class B Investor Charge-Offs for all prior
transfer dates, minus
(4) the amount of Reallocated Class B Principal Collections allocated
on all prior transfer dates that have been used to fund the Class
A Required Amount, excluding any Reallocated Class B Principal
Collections that have resulted in a reduction in the Class C
Investor Interest, minus
(5) an amount equal to any reductions in the Class B Investor Interest
on all prior transfer dates to fund the Class A Investor Default
Amount, plus
(6) the total amount of Excess Spread allocated and available on all
prior transfer dates to reimburse amounts deducted under (3), (4)
and (5) above.
The Class B Investor Interest, however, may not be reduced below zero.
"Class B Adjusted Investor Interest" means an amount equal to the Class B
Investor Interest minus the balance on deposit in the Principal Funding Account
in excess of the Class A Investor Interest, but not more than the Class B
Investor Interest.
"Class B Investor Charge-Off" means a reduction in the Class B Investor
Interest on any transfer date by the amount, if any, by which the Class B
Investor Default Amount exceeds the total amount of Excess Spread, Reallocated
Class C Principal Collections and the Class C Investor Interest, in each case
available and allocated on that transfer date to fund the Class B Investor
Default Amount.
"Class C Investor Interest" means at any time an amount equal to:
(1) the Class C Initial Investor Interest, minus
(2) the total principal payments made to the MTN issuer on the class C
investor certificates from the property of the receivables trust,
minus
(3) the total amount of Class C Investor Charge-Offs for all prior
transfer dates, minus
(4) the total amount of Reallocated Class B Principal Collections
allocable to the Class C Investor Interest and Reallocated Class C
Principal Collections on all prior transfer dates that have been
used to fund the Class A Required Amount, minus
(5) any reductions in the Class C Investor Interest on all prior
transfer dates to fund Class A Investor Default Amounts and Class
B Investor Default Amounts, plus
(6) the total amount of Excess Spread allocated and available to
reimburse amounts deducted under (3), (4) and (5) above.
The Class C Investor Interest, however, may not be reduced below zero.
"Class C Adjusted Investor Interest" means an amount equal to the Class C
Investor Interest minus the balance on deposit in the Principal Funding Account
in excess of the sum of the Class A Investor Interest and the Class B Investor
Interest, but not more than the Class C Investor Interest.
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"Class C Investor Charge-Off" means a reduction in the Class C Investor
Interest on any transfer date by the amount, if any, by which the Class C
Investor Default Amount exceeds the amount of Excess Spread available and
allocated on that transfer date to fund the Class C Investor Default Amount.
The beneficial entitlement of the MTN issuer as the investor beneficiary
for series 99-1 to eligible principal receivables -- which includes principal
collections that are the property of the receivables trust but excludes the
amount on deposit in the Principal Funding Account -- is equal to the
proportion that the Adjusted Investor Interest bears to the amount of eligible
principal receivables assigned or purported to be assigned to the receivables
trust at any time. However, the beneficial entitlement for each class will not
exceed the Class A Adjusted Investor Interest, the Class B Adjusted Investor
Interest or the Class C Adjusted Investor Interest at any time.
The beneficial entitlement of the MTN issuer as the investor beneficiary
for series 99-1 to finance charge collections during any monthly period is
equal to the proportion that the floating allocation for each class bears to
the Investor Percentage of finance charge collections for such monthly period
credited to the Finance Charge Collections Ledger from time to time during that
monthly period. However, the beneficial entitlement will not exceed the monthly
required expense amount for any class of series 99-1 during any monthly period.
The beneficial entitlement of the MTN issuer as the investor beneficiary
for series 99-1 at any time to any other property of the receivables trust not
separately held or segregated for any other beneficiary or series will be equal
to the proportion that the Class A Adjusted Investor Interest, the Class B
Adjusted Investor Interest or the Class C Adjusted Investor Interest bears to
the amount of eligible principal receivables from time to time assigned or
purported to be assigned to the receivables trust. The MTN issuer will not be
entitled to the benefit of any credit enhancement for any class available only
for any other beneficiary, series other than series 99-1 or classes within a
series other than series 99-1, except to the extent it is an investor
beneficiary for another series.
The MTN issuer will be beneficially entitled to all monies held in any
Trust Account other than:
* the Trustee Collection Account -- except for the distribution
ledgers for each class; or
* the Trustee Acquisition Account;
that are expressly segregated by separate account or by ledger entry or
otherwise, as allocated to the MTN issuer for each class.
Allocation, Calculation and Distribution of Finance Charge Collections to the
MTN Issuer
On each day on which collections are transferred to the Trustee Collection
Account during the Revolving Period, the Controlled Accumulation Period and, if
applicable, the Regulated Amortisation Period or the Rapid Amortisation Period,
the receivables trustee will credit to the Finance Charge Collections Ledger
for series 99-1 an amount calculated as follows:
A x B
Where:
A = Floating Investor Percentage; and
B = the total amount of finance charge collections processed on
that date.
"Floating Investor Percentage" means, for any monthly period, the
following fraction expressed as a percentage:
A
---------------------
The greater of B or C
Where:
A = the Adjusted Investor Interest;
B = the total balance of eligible principal receivables plus
the Investor Cash Available for Acquisition standing to the
credit of in the Trustee Acquisition Account;
C = the sum of the numerators used to calculate the floating
investor percentages for all outstanding series.
These amounts will be calculated for any monthly period other than the
first monthly period as of the last day of the prior monthly period. For the
first monthly period, they will be calculated as of the closing date.
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Notwithstanding the above, if there is an addition of receivables in
additional accounts to the receivables trust during a monthly period, B in the
fraction used to calculate the Floating Allocation Percentage will be:
* for the period from the first day of the monthly period until the
addition date the total amount of eligible principal receivables
in the receivables trust plus the Investor Cash Available for
Acquisition standing to the credit of the Trustee Acquisition
Account as of the last day of the prior monthly period; and
* for the period from the addition date through the last day of the
monthly period the total amount of eligible principal receivables
in the receivables trust plus the Investor Cash Available for
Acquisition standing to the credit of the Trustee Acquisition
Account as of the addition date -- taking into account the
addition.
If, in any monthly period the Investor Interest would be zero if the
payments to be made on the distribution date in that monthly period were made
on the last day of the prior monthly period, the Floating Investor Percentage
will be zero.
Class A Investor Interest
To understand the amount of finance charge collections distributable to
the MTN issuer for Class A on any transfer date, you need to understand the
following definitions and cash flows.
The "Class A Monthly Required Expense Amount" for any transfer date will
be the sum of the following items:
* the Class A Trustee Payment plus any unpaid Class A Trustee
Payments from previous transfer dates; see "-- Trustee Payment
Amount";
* the MTN Issuer Costs Amount;
* the Class A Monthly Finance Amount;
* the Class A Deficiency Amount; and
* the Class A Additional Finance Amount.
"Class A Monthly Finance Amount" means the amount calculated as follows:
Days in Calculation the interestrate on
Period X the classA MTNs X
--------------------- the ClassA Debt Amount
365 (366 in a leap
year)
"Class A Deficiency Amount" is the excess, if any, of the Class A Monthly
Required Expense Amount for the prior transfer date -- disregarding for this
purpose the Class A Trustee Payment and the MTN Issuer Costs Amount -- over the
funds allocable to Class A actually credited to the Class A Distribution Ledger
for payment of the Class A Monthly Required Expense Amount on that transfer
date.
"Class A Additional Finance Amount" means the amount calculated as
follows:
Days in Calculation The interestrate on any unpaid Class A
Period X the classA MTNs plus X Deficiency Amount on
--------------------- 2.0% the prior distribution
365 (366 in a leap date
year)
The first "distribution date" or "interest payment date" will be 15
January, 1999 interest payment date or, if that day is not a business day, the
next business day after the 15th, and each subsequent distribution date or
interest payment date will be the 15th day of each calendar month, or if that
day is not a business day, the next business day after the 15th.
"Calculation Period" means, for any distribution date, the period from and
including the previous distribution date or, in the case of the first
distribution date, from and including the closing date, to but excluding that
distribution date.
"Class A Debt Amount" means the Class A Initial Investor Interest minus
the total principal payments made to the MTN issuer on the class A investor
certificates from the property of the receivables trust. On the series 99-1
termination date, the Class A Debt Amount will be zero.
"MTN Issuer Costs Amount" means the amounts certified by the security
trustee as being required to pay the fees, costs and expenses of the MTN issuer
accrued due and payable on a transfer date. This amount includes the fees,
costs and expenses of the security trustee and any receiver appointed pursuant
to the security trust
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deed, any fees, costs and expenses remaining unpaid from previous transfer
dates together with any VAT payable on any of the above items, where relevant.
"Class A Available Funds" for any monthly period equals the sum of the
following amounts:
* the Class A Floating Allocation of finance charge collections
allocated to series 99-1;
* the Class A Floating Allocation of Acquired Interchange allocated
to series 99-1 and credited to the Finance Charge Collections
Ledger for that monthly period;
* for any monthly period during the Controlled Accumulation Period
before payment in full of the Class A Investor Interest, the
Principal Funding Investment Proceeds -- up to a maximum amount
equal to the Class A Covered Amount; see "-- Principal Funding
Account"; and
* any amounts withdrawn from the Reserve Account that will be
credited to the Finance Charge Collections Ledger on the related
transfer date; see "-- Reserve Account."
The amount of Acquired Interchange allocated to series 99-1 for any
monthly period will be the product of the Acquired Interchange and the Floating
Investor Percentage. This allocated Acquired Interchange will be credited to
the Finance Charge Collections Ledger.
On each transfer date, the receivables trustee will withdraw the Class A
Available Funds from the Finance Charge Collections Ledger, and they will be
distributed in the following order:
(1) the Class A Trustee Payment plus any unpaid Class A Trustee Payments from
prior transfer dates will be used by the receivables trustee to satisfy
the Trustee Payment Amounts;
(2) the MTN Issuer Costs Amount will be credited to the Class A Distribution
Ledger;
(3) the sum of the Class A Monthly Finance Amount, the Class A Deficiency
Amount and the Class A Additional Finance Amount will be credited to the
Class A Distribution Ledger;
(4) the class A servicing fee and class A cash management fee and any due and
unpaid servicing fees or cash management fees for class A from prior
transfer dates will be distributed to the servicer or trust cash manager,
as applicable;
(5) an amount equal to the Class A Investor Default Amount will be allocated
to Class A and treated as a portion of Investor Principal Collections
allocated to Class A and credited to the Principal Collections Ledger;
and
(6) the balance -- called "Class A Excess Spread" -- will be part of Excess
Spread and will be allocated as described in "Series 99-1: Excess
Spread".
On each distribution date, all amounts credited to the Class A
Distribution Ledger for the amounts in (3) above will be deposited into the
Series 99-1 Distribution Account and will be owned by the MTN issuer.
The "Series 99-1 Distribution Account" is a bank account in the name of
the MTN issuer that will be used to deposit amounts distributed to the MTN
issuer for the series 99-1 investor certificates from the receivables trust.
The "Class A Distribution Ledger" is a ledger for Class A in the Trustee
Collection Account.
See "-- Distribution Ledgers".
Class B Investor Interest
To understand the amount of finance charge collections distributable to
the MTN issuer for Class B on any transfer date, you need to understand the
following definitions and cash flows.
The "Class B Monthly Required Expense Amount" will be the sum of the
following items:
* the Class B Trustee Payment plus any unpaid Class B Trustee
Payments from previous transfer dates see "-- Trustee Payment
Amount";
* the Class B Monthly Finance Amount;
* the Class B Deficiency Amount; and
* the Class B Additional Finance Amount.
"Class B Monthly Finance Amount" means the amount calculated as follows:
Days in Calculation
Period X The interestrate on X The Class B Debt Amount
--------------------- the classB MTNs
365 (366 in a leap
year)
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"Class B Deficiency Amount" is the excess, if any, of the Class B Monthly
Required Expense Amount for the prior transfer date -- disregarding for this
purpose the Class B Trustee Payment -- over the funds actually credited to the
Class B Distribution Ledger for payment of the Class B Monthly Required Expense
Amount on that transfer date.
"Class B Additional Finance Amount" means the amount calculated as
follows:
Days in Calculation The interestrate on Any unpaid Class B
Period X the class X Deficiency Amount on
--------------------- B MTNs plus 2.0% the prior distribution
365 (366 in a leap date
year)
"Class B Debt Amount" means the Class B Initial Investor Interest minus
the total principal payments made to the MTN issuer on the class B investor
certificates from the property of the receivables trust. On the series 99-1
termination date, the Class B Debt Amount will be zero.
The "Class B Distribution Ledger" is a ledger for Class B in the Trustee
Collection Account. See
"-- Distribution Ledgers".
"Class B Available Funds" for any monthly period equals the sum of the
following amounts:
* the Class B Floating Allocation of finance charge collections
allocated to series 99-1; and
* the Class B Floating Allocation of Acquired Interchange allocated
to series 99-1 and credited to the Finance Charge Collections
Ledger for that monthly period.
On each transfer date, the receivables trustee will withdraw the Class B
Available Funds from the Finance Charge Collections Ledger, and they will be
distributed in the following order:
(1) the Class B Trustee Payment plus any Class B Trustee Payments from
prior transfer dates will be used by the receivables trustee to
satisfy the Trustee Payment Amounts;
(2) the sum of the Class B Monthly Finance Amount, the Class B
Deficiency Amount and the Class B Additional Finance Amount will
be credited to the Class B Distribution Ledger;
(3) the class B servicing fee and class B cash management fee and any
due and unpaid servicing fees and cash management fee for Class B
from prior transfer dates will be distributed to the servicer or
trust cash manager, as applicable; and
(4) the balance -- called "Class B Excess Spread" -- will be part of
Excess Spread and will be allocated as described in "-- Excess
Spread".
On each distribution date, all amounts credited to the Class B
Distribution Ledger for the amounts in (2) above will be deposited into the
Series 99-1 Distribution Account and will be owned by the MTN issuer.
Class C Investor Interest
To understand the amount of finance charge collections distributable to
the MTN issuer for Class C on any transfer date, you need to understand the
following definitions and cash flows.
The "Class C Monthly Required Expense Amount" will be the sum of the
following items:
* the Class C Trustee Payment plus any unpaid Class C Trustee
Payments from previous transfer dates; see "-- Trustee Payment
Amount";
* the Class C Monthly Finance Amount;
* the Class C Deficiency Amount; and
* the Class C Additional Finance Amount.
"Class C Monthly Finance Amount" means the amount calculated as follows:
Days in Calculation The interestrate on
Period X the classC MTNs X The Class C Debt Amount
---------------------
365 (366 in a leap
year)
"Class C Deficiency Amount" is the excess, if any, of the Class C Monthly
Required Expense Amount for the prior transfer date -- disregarding for this
purpose the Class C Trustee Payment -- over the funds actually credited to the
Class C Distribution Ledger for payment of the Class C Monthly Required Expense
Amount on that transfer date.
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"Class C Additional Finance Amount" means the amount calculated as
follows:
Days in Calculation The interestrate on Any unpaid Class C
Period X the classC MTNs plus X Deficiency Amounts on
---------------------- 2.0% the prior distribution
365 (366 in a leap date
year)
"Class C Debt Amount" means the Class C Initial Investor Interest minus
the total principal payments made to the MTN issuer on the class C investor
certificates from the property of the receivables trust. On the series 99-1
termination date the Class C Debt Amount will be zero.
The "Class C Distribution Ledger" is a ledger for Class C in the Trustee
Collection Account. See "-- Distribution Ledgers".
"Class C Available Funds" for any monthly period equals the sum of the
following amounts:
* the Class C Floating Allocation of finance charge collections
allocated to series 99-1; and
* the Class C Floating Allocation of Acquired Interchange allocated
to series 99-1 and credited to the Finance Charge Collections
Ledger for that monthly period.
On each transfer date, the receivables trustee will withdraw the Class C
Available Funds from the Finance Charge Collections Ledger, and they will be
distributed in the following order:
(1) the Class C Trustee Payment plus any unpaid Class C Trustee Payments from
prior transfer dates will be used by the receivables trustee to satisfy
the Trustee Payment Amounts;
(2) the class C servicing fee and class C cash management fee and any due and
unpaid servicing fees or cash management fees for Class C from prior
transfer dates will be distributed to the beneficiaries servicer or trust
cash manager, as applicable; and
(3) the balance -- called "Class C Excess Spread" -- will be part of Excess
Spread and will be allocated as described in "-- Excess Spread".
Revolving Period
The "Revolving Period" for series 99-1 is the period from the closing date
to the start of the Controlled Accumulation Period or, if earlier, the start of
the Rapid Amortisation Period or, if earlier, the start of the Regulated
Amortisation Period.
During the Revolving Period, principal collections allocable daily to the
Class A Investor Interest will be used by the receivables trustee as Shared
Principal Collections and, to the extent not used as Shared Principal
Collections, to make payments to the transferor:
* to accept new offers of receivables made by the transferor to the
receivables trustee, and
* to make payments to the transferor for future receivables assigned
by the transferor to the receivables trustee by offers that have
already been made and accepted.
Principal collections allocable to the Class B Investor Interest and the
Class C Investor Interest will be used by the receivables trustee as described
in the previous paragraph on the next following transfer date to the extent not
required to fund shortfalls for the Class A Investor Interest and -- For
Reallocated Class C Principal Collections -- the Class B Investor Interest.
Controlled Accumulation Period
The "Controlled Accumulation Period" for series 99-1 is the period
scheduled to begin on the close of business on 30 October, 2001 and ending when
the Investor Interest is paid in full, unless a Pay Out Event occurs and the
Regulated Amortisation Period or the Rapid Amortisation Period begins. If a
Regulated Amortisation Period or a Rapid Amortisation Period begins before the
start of the Controlled Accumulation Period, there will not be a Controlled
Accumulation Period for series 99-1. [The start of the Controlled Accumulation
Period may be delayed until no later than the close of business on 30
September, 2002. See "-- Postponement of Controlled Accumulation Period".]
During the Controlled Accumulation Period the principal collections
allocated to the Investor Interest for series 99-1, up to the Controlled
Deposit Amount, will be accumulated by the receivables trustee in a trust
account called the "Principal Funding Account" for distribution to the MTN
issuer as the investor beneficiary for Class A, Class B and Class C on the
November 2002 interest payment date -- called the "series 99-1 scheduled
redemption date". Any of these principal collections over the amount that will
be deposited in the Principal Funding Account will be used by the receivables
trustee first as Shared Principal Collections and then to make payments to the
transferor as described above under "-- Revolving Period".
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The "Controlled Deposit Amount" for any transfer date for the Controlled
Accumulation Period or the Regulated Amortisation Period will be L[*], which
equals the Initial Investor Interest divided by 12. [If the start of the
Controlled Accumulation Period is delayed as described in "-- Postponement of
Controlled Accumulation Period", the Controlled Deposit Amount will be greater
than L[*]. This higher amount will be determined by the servicer based on the
principal payment rates on the designated accounts and on the investor
interests of series that are not Companion Series that are scheduled to be in
their revolving periods. In any case, the Controlled Deposit Amount will be the
amount that, if deposited in the Principal Funding Account on each transfer
date for the Controlled Accumulation Period, will cause the balance of the
Principal Funding Account to equal the Investor Interest on the series 99-1
scheduled redemption date.] The Controlled Deposit Amount for any transfer date
will include the amount of any shortfall in payment of the Controlled Deposit
Amount for the previous transfer date.
Regulated Amortisation Period
A "Regulated Amortisation Period" will start on the day, if there is one,
that any of the following Series 99-1 Pay Out Events occur, each of which we
refer to as a "Regulated Amortisation Trigger Event":
* the average Portfolio Yield for any three consecutive monthly
periods is less than the average Expense Rate for that period; or
* Either:
(1) over any period of thirty consecutive days, the Transferor
Interest averaged over that period is less than the Minimum
Transferor Interest for that period and the Transferor
Interest does not increase on or before the tenth business
day following that thirty day period to an amount so that
the average of the Transferor Interest as a percentage of
the Average Principal Receivables for such thirty day
period, computed by assuming that the amount of the
increase of the Transferor Interest by the last day of that
ten business day period, as compared to the Transferor
Interest on the last day of the thirty day period, would
have existed in the receivables trust during each day of
the thirty day period, is at least equal to the Minimum
Transferor Interest; or
(2) on the last day of any monthly period the total balance of
eligible principal receivables is less than the Minimum
Aggregate Principal Receivables, adjusted for any series
having a Companion Series as described in the supplement
for that series and the Companion Series, and the total
balance of eligible principal receivables fails to increase
to an amount equal to or greater than the Minimum Aggregate
Principal Receivables on or before the tenth business day
following that last day.
The Regulated Amortisation Period will continue until the earlier of:
* the start of the Rapid Amortisation Period;
* the series 99-1 termination date; and
* the dissolution of the receivables trust following an Insolvency
Event.
During the Regulated Amortisation Period the amount of principal
collections, up to the Controlled Deposit Amount, will be paid each month to
the MTN issuer first for the Class A Investor Interest, second for the Class B
Investor Interest and third for the Class C Investor Interest until the series
99-1 termination date. Any of these principal collections over the Controlled
Deposit Amount will be used by the receivables trustee first as Shared
Principal Collections and then to make payments to the transferor as described
above under "-- Revolving Period".
Rapid Amortisation Period
A "Rapid Amortisation Period" will start on the earlier of:
* the series 99-1 scheduled redemption date, if the Investor
Interest has not been reduced to zero on that date; and
* any Pay Out Event other than a Regulated Amortisation Trigger
Event occurs;
The Rapid Amortisation Period will continue until the earlier of:
* the series 99-1 termination date; or
* the dissolution of the receivables trust after completion of the
liquidation, winding-up and dissolution procedures taken following
the occurrence of an Insolvency Event; see "The Receivables Trust:
Pay Out Events".
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During the Rapid Amortisation Period, principal collections allocable to
the Investor Interest of series 99-1 will be paid each month to the MTN issuer
first for the Class A Investor Interest, second for the Class B Investor
Interest and third for the Class C Investor Interest until the series 99-1
termination date.
The "series 99-1 termination date" is the earlier of the distribution date
on which the Investor Interest has been reduced to zero and the [*]
distribution date.
Allocation, Calculation and Distribution of Principal Collections to the MTN
Issuer
During the Revolving Period, principal collections will be allocated to
the Investor Interest on the basis of the Floating Investor Percentage. During
the Controlled Accumulation Period, the Regulated Amortisation Period or the
Rapid Amortisation Period, principal collections will be allocated to the
Investor Interest on the basis of the Fixed Investor Percentage. The amount of
principal collections allocated to the Investor Interest at any time will be
credited to the Principal Collections Ledger for series 99-1. The principal
collections credited to the Principal Collections Ledger from time to time that
will be allocated to the MTN issuer will be:
* during the Revolving Period, equal to the total of the floating
allocations for each class;
* during the Controlled Accumulation Period, the Regulated
Amortisation Period or the Rapid Amortisation Period equal to the
total of the fixed allocations for each class.
"Fixed Investor Percentage" means, for any monthly period, the following
calculation expressed as a percentage:
A
---------------------
B
Where:
A = the Investor Interest calculated at the close of business
on the last day of the Revolving Period; and
B = the greater of:
* the total balance of eligible principal receivables in the
receivables trust plus the Investor Cash Available for Acquisition
standing to the credit of the Trustee Acquisition Account; and
* the sum of the numerators used to calculate the investor
percentages for allocations of eligible principal receivables for
all outstanding series.
Notwithstanding the above, for a monthly period in which an addition date
occurs, the denominator in, B above, will be:
* for the period from the first day of the monthly period to the
addition date, the total balance of eligible principal receivables
in the receivables trust plus the Investor Cash Available for
Acquisition standing to the credit of the Trustee Acquisition
Account at the close of business on the last day of the previous
monthly period; and
* for the period from the addition date to the last day of the
monthly period, the total balance of eligible principal
receivables in the receivables trust plus the Investor Cash
Available for Acquisition standing to the credit of the Trustee
Acquisition Account on the addition date, taking into account the
eligible principal receivables added to the receivables trust.
For any monthly period when the Investor Interest would be zero if the
payments that will be made on the distribution date during that monthly period
were made on the last day of the prior monthly period, the Fixed Investor
Percentage will be zero.
The "Class A Fixed Allocation", the "Class B Fixed Allocation" and the
"Class C Fixed Allocation" will each be calculated the same way and will be
equal to, for each class and for any monthly period after the end of the
Revolving Period the following fraction expressed as a percentage:
Investor Interest for that Class
Fixed Allocation for Class = ---------------------------------
Investor Interest
This percentage, never to exceed 100%, will be calculated using values as
of the close of business on the last day of the Revolving Period.
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On each business day during the Revolving Period which is not a transfer
date, the Reinvested Investor Principal Collections for that day will be
distributed in the following priority:
* a portion of the Reinvested Investor Principal Collections will be
applied as Shared Principal Collections and allocated to other
outstanding series in group one; see "-- Shared Principal
Collections"; and
* the balance remaining will be applied as Investor Cash Available
for Acquisition in the manner described in "The Receivables Trust:
Acquiring Additional Entitlements to Trust Property and Payments
for Receivables".
In addition, an amount equal to the product of the sum of the
Class B Floating Allocation and the Class C Floating Allocation
and the Daily Investor Principal Collections will be credited to
the Principal Collections Ledger for application on the following
transfer date.
"Reinvested Principal Collections" means, for any business day:
* principal collections credited to the Principal Collections Ledger
identified for series 99-1-- after adjustments for Unavailable
Principal Collections during the Controlled Accumulation Period,
the Regulated Amortisation Period and the Rapid Amortisation
Period -- for any day called the "Daily Investor Principal
Collections"; minus
* an amount equal to the product of the Class B Floating Allocation
and the Daily Investor Principal Collections; minus
* an amount equal to the product of the Class C Floating Allocation
and the Daily Investor Principal Collections.
"Available Investor Principal Collections" means, for any monthly period:
* the Investor Principal Collections; minus
* the Investor Cash Available for Acquisition that has been
calculated as being available to be used during that monthly
period; minus
* the Reallocated Class C Principal Collections that are required to
fund the Class A Required Amount or the Class B Required Amount;
minus
* the Reallocated Class B Principal Collections for that monthly
period that are required to fund the Class A Required Amount; plus
* the Shared Principal Collections for group one that are allocated
to series 99-1; plus
* for a monthly period in which the Rapid Amortisation Period
starts, any previously identified Investor Cash Available for
Acquisition that was not used to acquire receivables.
"Investor Principal Collections" means, for any monthly period, the sum
of:
* principal collections credited to the Principal Collections Ledger
identified for series 99-1, after adjustments for Unavailable
Principal Collections during the Controlled Accumulation Period,
the Regulated Amortisation Period and the Rapid Amortisation
Period; plus
* amounts treated as Investor Principal Collections up to the Class
A Investor Default Amount and distributed out of Class A Available
Funds, Excess Spread, Reallocated Class C Principal Collections
and Reallocated Class B Principal Collections; plus
* amounts treated as Investor Principal Collections up to the Class
B Investor Default Amount and distributed out of Excess Spread and
Reallocated Class C Principal Collections; plus
* amounts treated as Investor Principal Collections up to the Class
C Investor Default Amount and distributed out of Excess Spread;
plus
* Excess Spread treated as Investor Principal Collections used to
reimburse Class A Investor Charge-Offs, any reductions in the
Class B Investor Interest and any reductions in the Class C
Investor Interest; plus
* Unavailable Principal Collections credited to the Principal
Collections Ledger and to be treated as Investor Principal
Collections; see "-- Unavailable Principal Collections".
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On each transfer date for the Controlled Accumulation Period, the
Regulated Amortisation Period or the Rapid Amortisation Period, the receivables
trustee will withdraw the Class A Monthly Principal Amount from the Principal
Collections Ledger and:
* for a transfer date for the Controlled Accumulation Period,
deposit it into the Principal Funding Account; or
* for a transfer date during the Rapid Amortisation Period or
Regulated Amortisation Period, credit it to the Class A
Distribution Ledger.
The "Class A Monthly Principal Amount" is the least of:
* the Available Investor Principal Collections standing to the
credit of the Principal Collections Ledger on that transfer date;
* for each transfer date for the Controlled Accumulation Period or
the Regulated Amortisation Period before the series 99-1 scheduled
redemption date, the Controlled Deposit Amount for that transfer
date; and
* the Class A Adjusted Investor Interest adjusted to account for any
unreimbursed Class A Investor Charge-Offs.
The first distribution date (1) for the Controlled Accumulation Period, on
which an amount equal to the Class A Investor Interest has been deposited in
the Principal Funding Account, or (2) for the Rapid Amortisation Period or the
Regulated Amortisation Period, on which the Class A Investor Interest is paid
in full, is called the "Class B Principal Commencement Date."
Starting with the Class B Principal Commencement Date, to the extent there
are funds remaining after distributing the Class A Monthly Principal Amount,
the receivables trustee will withdraw the Class B Monthly Principal Amount from
the Principal Collections Ledger and:
* for a transfer date for the Controlled Accumulation Period,
deposit it into the Principal Funding Account; or
* for a transfer date during the Rapid Amortisation Period or the
Regulated Amortisation Period, credit it to the Class B
Distribution Ledger.
The "Class B Monthly Principal Amount" is the lesser of:
* the Available Investor Principal Collections standing to the
credit of the Principal Collections Ledger on that transfer date
minus, if applicable, the Class A Monthly Principal Amount; and
* the Class B Adjusted Investor Interest -- adjusted to take into
account any unreimbursed reductions in the Class B Investor
Interest for reasons other than principal payments.
The first distribution date (1) for the Controlled Accumulation Period, on
which an amount equal to the sum of the Class A Investor Interest and the Class
B Investor Interest has been deposited in the Principal Funding Account, or (2)
during the Rapid Amortisation Period or the Regulated Amortisation Period, on
which the Class B Investor Interest is paid in full, is called the "Class C
Principal Commencement Date".
Starting with the Class C Principal Commencement Date, to the extent there
are funds remaining after distributing the Class A Monthly Principal Amount and
the Class B Monthly Principal Amount, as applicable, the receivables trustee
will withdraw the Class C Monthly Principal Amount from the Principal
Collections Ledger and:
* for a transfer date for the Controlled Accumulation Period,
deposit it into the Principal Funding Account; or
* for a transfer date during the Rapid Amortisation Period or the
Regulated Amortisation Period, credit it to the Class C
Distribution Ledger.
The "Class C Monthly Principal Amount" is the lesser of:
* the Available Investor Principal Collections standing to the
credit of the Principal Collections Ledger on that transfer date
minus, if applicable, the Class A Monthly Principal Amount and the
Class B Monthly Principal Amount; and
* the Class C Adjusted Investor Interest -- adjusted to take into
account any unreimbursed reductions in the Class C Investor
Interest for reasons other than principal payments.
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On the earlier of (1) the first payment date during the Rapid Amortisation
Period or the Regulated Amortisation Period and (2) the series 99-1 scheduled
redemption date, and on each distribution date after that, the receivables
trustee will distribute the following amounts in the following priority:
(1) from the Principal Funding Account, an amount equal to the lesser of:
* the amount credited to the Principal Funding Account; and
* the Class A Investor Interest,
will be deposited to the Series 99-1 Distribution Account for Class A and
will be owned by the MTN issuer. The MTN issuer will use this amount to
redeem the class A MTNs in whole, if the amount distributed is equal to
the Class A Investor Interest, or to repay principal outstanding on the
class A MTNs if the amount is less;
(2) from the Class A Distribution Ledger an amount equal to the lesser of:
* the amount credited to the Class A Distribution Ledger; and
* the Class A Investor Interest, after taking into account the
amount described in clause (1) above;
will be amount will be deposited to the Series 99-1 Distribution Account
for class A and will be owned by the MTN issuer. The MTN issuer will use
this amount to redeem the class A MTNs in whole, if the amount
distributed is equal to the Class B Investor Interest, or to repay
principal outstanding on the class A MTNs if the amount is less.
Starting on the earlier of (1) if the amount on deposit in the Principal
Funding Account exceeds the Class A Investor Interest, the series 99-1
scheduled redemption date and (2) during the Rapid Amortisation Period or the
Regulated Amortisation Period, the Class B Principal Commencement Date, and on
each distribution date after that, the receivables trustee will distribute the
following amounts in the following priority:
(1) from the Principal Funding Account, an amount equal to the lesser of:
* the amount credited to the Principal Funding Account in
excess of the Class A Investor Interest; and
* the Class B Investor Interest;
will be deposited to the Series 99-1 Distribution Account for Class B and
will be owned by the MTN issuer. The MTN issuer will use this amount to
redeem the class B MTNs in whole, if the amount distributed is equal to
the Class B Investor Interest, or to repay principal outstanding on the
class B MTNs if the amount is less;
(2) from the Class B Distribution Ledger an amount equal to the lesser of:
* the amount credited to the Class B Distribution Ledger; and
* the Class B Investor Interest, after taking into account
the amount described in clause (1) above, will be deposited
to the Series 99-1 Distribution Account for Class B and
will be owned by the MTN issuer;
this amount will be deposited to the Series 99-1 Distribution Account for
Class B and will be owned by the MTN issuer. The MTN issuer will use this
amount to redeem the Class B MTNs in whole, if the amount distributed is
equal to the Class B Investor Interest, or to repay principal outstanding
on the Class B MTNs if the amount is less.
Starting with the earlier of (1) if the amount on deposit in the Principal
Funding Account exceeds the sum of the Class A Investor Interest and the Class
B Investor Interest, the series 99-1 scheduled redemption date, and (2) during
the Rapid Amortisation Period or the Regulated Amortisation Period, the Class C
Principal Commencement Date, and on each distribution date after that, the
receivables trustee will distribute the following amounts in the following
priority:
(1) from the Principal Funding Account, an amount equal to the lesser of:
* the amount credited to the Principal Funding Account in
excess of the sum of the Class A Investor Interest and the
Class B Investor Interest; and
* the Class C Investor Interest;
will be paid to the Series 99-1 Distribution Account for Class C and will
be owned by the MTN issuer. The MTN issuer will use this amount to redeem
the class C MTNs in whole, if the amount distributed is equal to the
Class C Investor Interest, or to repay principal outstanding on the class
C MTNs if the amount is less;
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(2) from the Class C Distribution Ledger an amount equal to the lesser of;
* the amount credited to the Class C Distribution Ledger; and
* the Class C Investor Interest after taking into account the
amount described in clause (1) above;
will be deposited to the Series 99-1 Distribution Account for Class C and
will be owned by the MTN issuer. The MTN issuer will use this amount to
redeem the class C MTNs in whole if the amount distributed is equal to
the Class C Investor Interest, or to repay principal outstanding on the
class C MTNs, if the amount is less.
[Postponement of Controlled Accumulation Period
The Controlled Accumulation Period is scheduled to start on the close of
business on 31 October, 2001. If the Controlled Accumulation Period Length,
which is explained in the next paragraph, is less than 12 months, the Revolving
Period may be extended and the start of the controlled accumulation period will
be postponed. The Controlled Accumulation Period will, in any event, start no
later than the close of business on 30 September, 1999.
On the determination date right before the distribution date in [July
2001], and on each determination date after that, until the Controlled
Accumulation Period begins, the servicer will determine the "Controlled
Accumulation Period Length". This is the number of months that the servicer
expects will be needed to fully fund the Principal Funding Account no later
than the series 99-1 scheduled redemption date. This calculation is based on:
* the expected monthly principal collections that the
servicer calculates will be available to the investor
interests of all series other than excluded series,
assuming a principal payment rate no greater than the
lowest monthly principal payment rate on the receivables
for the twelve months before; and
* the amount of principal expected to be distributable to the
investor interests of all series -- other than Companion
Series -- that are not expected to be in their revolving
periods during the Controlled Accumulation Period.
If the Controlled Accumulation Period Length is less than twelve months,
the servicer may, at its option, postpone the start of the Controlled
Accumulation Period such that the number of calendar months in the Controlled
Accumulation Period will be at least equal to the Controlled Accumulation
Period Length.
The effect of this is to permit the reduction of the length of the
Controlled Accumulation Period based on the investor interest of future series
that are scheduled to be in their revolving periods during the Controlled
Accumulation Period and on increases in the principal payment rate occurring
after the closing date. The length of the Controlled Accumulation Period will
not be less than one month.]
Unavailable Principal Collections
If:
* during the Controlled Accumulation Period or the Regulated
Amortisation Period, the amount credited to the Principal
Collections Ledger identified for series 99-1 during any monthly
period minus the amount of Investor Cash Available for Acquisition
calculated for series 99-1 for that monthly period, exceeds the
sum of:
(1) the Adjusted Investor Interest as of the last day of the
prior monthly period, after taking into account any
deposits to be made to the Principal Funding Account on the
transfer date for that monthly period, any unreimbursed
Investor Charge-Offs and any other adjustments to the
Investor Interest for that monthly period; and
(2) any Reallocated Class B Principal Collections or
Reallocated Class C Principal Collections on the transfer
date for that monthly period; or
* during the Rapid Amortisation Period, the amount credited to the
Principal Collections Ledger identified for series 99-1 during any
monthly period exceeds the sum of:
(1) the Investor Interest as of the last day of the prior
monthly period, after taking into account any deposits to
be made to the series 99-1 Distribution Account on the
transfer date for that monthly period, any unreimbursed
Investor Charge-Offs and any other adjustments to the
Investor Interest for that monthly period; and
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(2) any Reallocated Class B Principal Collections or
Reallocated Class C Principal Collections on the transfer
date for that monthly period.
The amount of any excess -- in either (1) or (2) above -- will be credited
to the Principal Collections Ledger and identified for the transferor
beneficiary.
The amount of any excess will be transferred to the transferor beneficiary
only to the extent that the Transferor Interest on that date is greater than
zero. If the Transferor Interest on that date is not greater than zero, the
amount will be identified as unavailable transferor principal collections
credited to the Principal Collections Ledger. This sum, together with any
unavailable investor principal collections that have been credited to the
Principal Collections Ledger, will be identified as "Unavailable Principal
Collections". Unavailable investor principal collections are principal
collections allocable to the transferor beneficiary but not transferred to the
transferor beneficiary because the Transferor Interest at the relevant date is
not greater than zero.
Unavailable Principal Collections will, during the Revolving Period,
remain allocated to the transferor beneficiary but will be transferred to the
transferor beneficiary only if and to the extent that the Transferor Interest
at that time is greater than zero. On each transfer date for the Controlled
Accumulation Period, Regulated Amortisation Period or the Rapid Amortisation
Period, any Unavailable Principal Collections credited to the Principal
Collections Ledger will be included as Investor Principal Collections to be
distributed as Available Investor Principal Collections.
Shared Principal Collections
Principal collections for any monthly period allocated to the Investor
Interest of series 99-1 will first be used to cover:
* until the series 99-1 scheduled redemption date, for any monthly
period during the Controlled Accumulation Period, deposits of the
Controlled Deposit Amount to the Principal Funding Account;
* during the Regulated Amortisation Period, deposits of the
Controlled Deposit Amount to the Series 99-1 Distribution Account
for series 99-1; and
* during the Controlled Accumulation Period, on the series 99-1
scheduled redemption date, and during the Rapid Amortisation
Period, payments to the MTN issuer for series 99-1.
The receivables trustee will determine the amount of principal collections
for any monthly period allocated to the Investor Interest remaining after
covering required distributions to the MTN issuer for each class of series 99-1
and any similar amount remaining for any other outstanding series in group one.
These remaining principal collections are called "Shared Principal
Collections". The receivables trustee will allocate the Shared Principal
Collections to cover any scheduled or permitted principal distributions to
beneficiaries, and deposits to principal funding accounts, if any, for any
series in group one that have not been covered out of the principal collections
allocable to that series. These uncovered principal distributions and deposits
are called "Principal Shortfalls". Shared Principal Collections will not be
used to cover investor charge-offs for any class of any series.
If Principal Shortfalls exceed Shared Principal Collections for any
monthly period, Shared Principal Collections will be allocated in proportion
among the outstanding series in group one based on the amounts of Principal
Shortfalls for each series. To the extent that Shared Principal Collections
exceed Principal Shortfalls, the balance will in the normal course be paid to
the transferor beneficiary.
Defaulted Receivables; Investor Charge-Offs
On each transfer date, the receivables trustee will calculate the Investor
Default Amount for the previous monthly period. The "Investor Default Amount"
will be the total of, for each receivable in a defaulted account, the product
of the Floating Investor Percentage and the default amount.
The "default amount" for any defaulted account will be the amount of
eligible principal receivables in the defaulted account on the day the account
became a defaulted account.
The Investor Default Amount will be allocated to each class of series 99-1
based on its floating allocation during the monthly period. These allocations
will be called the "Class A Investor Default Amount," the "Class B Investor
Default Amount" and the "Class C Investor Default Amount."
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On each transfer date, if the Class A Investor Default Amount for the
prior monthly period exceeds the sum of:
* Class A Available Funds;
* Excess Spread;
* Reallocated Class C Principal Collections; and
* Reallocated Class B Principal Collections;
in each case, to the extent available to cover the Class A Investor Default
Amount, then the Class C Investor Interest will be reduced by the amount of the
excess, but not by more than the remaining Class A Investor Default Amount.
This reduction to the Class C Investor Interest will be made only after giving
effect to reductions to the Class C Investor Interest for any Class C Investor
Charge-Offs, any Reallocated Class B Principal Collections and any Reallocated
Class C Principal Collections.
If this reduction would cause the Class C Investor Interest to be a
negative number, it will be reduced to zero. In this case, the Class B Investor
Interest will be reduced by the amount by which the Class C Investor Interest
would have been reduced below zero, but not by more than the Class A Investor
Default Amount not covered by a reduction in the Class C Investor Interest.
This reduction in the Class B Investor Interest will be made only after giving
effect to reductions for any Class B Investor Charge-Offs and Reallocated Class
B Principal Collections not covered by a reduction in the Class C Investor
Interest.
If this reduction would cause the Class B Investor Interest to be a
negative number, the Class B Investor Interest will be reduced to zero. In this
case, the Class A Investor Interest will be reduced by the amount by which the
Class B Investor Interest would have been reduced below zero, but not by more
than the remaining Class A Investor Default Amount not covered by a reduction
in the Class C Investor Interest or the Class B Investor Interest. This is
called a "Class A Investor Charge-Off" and may have the effect of slowing or
reducing the return of principal to the MTN issuer for Class A.
If the Class A Investor Interest for any class has been reduced by any
Class A Investor Charge-Offs, it will be reimbursed on any transfer date by the
amount of Excess Spread allocated and available for that purpose, but not by
more than the total amount by which the Class A Investor Interest has been
reduced. See "-- Excess Spread".
On each transfer date, if the Class B Investor Default Amount for the
prior monthly period exceeds the sum of:
* Excess Spread; and
* Reallocated Class C Principal Collections;
in each case to the extent available to cover the Class B Investor
Default Amount, then the Class C Investor Interest will be reduced by the
amount of the excess, but not by more than the remaining Class B Investor
Default Amount. This reduction to the Class C Investor Interest will be
made only after giving effect to any reductions to the Class C Investor
Interest for any Class C Investor Charge-Offs, any Reallocated Class B
Principal Collections, any Reallocated Class C Principal Collections and
any reductions in the Class C Investor Interest to cover the Class A
Investor Default Amount.
If this reduction would cause the Class C Investor Interest to be a
negative number, it will be reduced to zero. In this case, the Class B Investor
Interest will be reduced by the amount by which the Class C Investor Interest
would have been reduced below zero, but not by more than the remaining Class B
Investor Default Amount not covered by a reduction to the Class C Investor
Interest. This is called a "Class B Investor Charge-Off" and may have the
effect of slowing or reducing the return of principal to the MTN issuer for
Class B.
On each transfer date, if the Class C Investor Default Amount for the
prior monthly period exceeds the amount of Excess Spread available to cover the
remaining Class C Investor Default Amount, the Class C Investor Interest will
be reduced by the amount of the excess, but not by more than the Class C
Investor Default Amount. This is called a "Class C Investor Charge-Off", which
may have the effect of slowing or reducing the return of principal to the MTN
issuer for Class C.
"Reallocated Class B Principal Collections" means, for any transfer date,
the principal collections allocable to the Class B Investor Interest for the
related monthly period in an amount not to exceed the Class A Required Amount,
after applying Excess Spread and Reallocated Class C Principal Collections to
cover the Class A Required Amount. Reallocated Class B Principal Collections
cannot exceed the Class B Investor Interest after giving effect to any
unreimbursed Class B Investor Charge-Offs.
"Reallocated Class C Principal Collections" means, for any transfer date,
the principal collections allocable to the Class C Investor Interest for the
related monthly period in an amount not to exceed the Class A Required
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Amount and the Class B Required Amount after applying Excess Spread to cover
the Class A Required Amount and the Class B Required Amount. Reallocated Class
C Principal Collections cannot exceed the Class C Investor Interest after
giving effect to any unreimbursed Class C Investor Charge-Offs. Reallocated
Class C Principal Collections will reduce the Class C Investor Interest.
The "Class A Required Amount" for any transfer date will be the amount, if
any, by which the sum of:
* the Class A Monthly Required Expense Amount;
* the total amount of the class A servicing fee and the class A cash
management fee for the prior monthly period and any due and unpaid
class A servicing fees and class A cash management fees; and
* the Class A Investor Default Amount;
exceeds the Class A Available Funds.
The "Class B Required Amount" for any transfer date will be the sum of (1)
the amount, if any, by which the sum of:
* the Class B Monthly Required Expense Amount; and
* the total amount of the class B servicing fee and the class B cash
management fee for the prior monthly period; any due and unpaid
class B servicing fees or class B cash management fees;
exceeds the Class B Available Funds, and (2) the Class B Investor Default
Amount.
Excess Spread
"Excess Spread" for any transfer date will be the sum of Class A Excess
Spread, Class B Excess Spread and Class C Excess Spread.
On each transfer date, the receivables trustee will apply Excess Spread to
make the following distributions in the following priority:
(1) an amount equal to the the Class A Required Amount, if any, will be used
to fund the Class A Required Amount; if the Class A Required Amount is
more than the amount of Excess Spread, Excess Spread will be applied in
the order of priority in which Class A Available Funds are to be
distributed;
(2) an amount equal to the total amount of Class A Investor Charge-Offs that
have not been previously reimbursed will be used to reinstate the Class A
Investor Interest and treated as a portion of Investor Principal
Collections allocated to Class A and credited to the Principal
Collections Ledger;
(3) an amount equal to the Class B Required Amount will be used to fund the
Class B Required Amount; if the Class B Required Amount is more than the
amount of Excess Spread available, Excess Spread will be applied first in
the order of priority with which Class B Available Funds are to be
distributed on any transfer date and then to fund the Class B Investor
Default Amount; any amount available to pay the Class B Investor Default
Amount will be allocated to Class B and treated as a portion of Investor
Principal Collections allocated to Class B and credited to the Principal
Collections Ledger;
(4) an amount equal to the total amount by which the Class B Investor
Interest has been reduced below the Class B Initial Investor Interest for
reasons other than the payment of principal -- but not in excess of the
aggregate amount of such reductions which have not been previously
reimbursed -- will be used to reinstate the Class B Investor Interest,
treated as a portion of Investor Principal Collections and credited to
the Principal Collections Ledger;
(5) an amount equal to the sum of the Class C Monthly Finance Amount, the
Class C Deficiency Amount and the Class C Additional Finance Amount will
be credited to the Class C Distribution Ledger;
(6) an amount equal to the Class C Investor Default Amount will be allocated
to Class C and treated as a portion of Investor Principal Collections
allocated to Class C and credited to the Principal Collections Ledger;
(7) an amount equal to the total amount by which the Class C Investor
Interest has been reduced below the Class C Initial Investor Interest for
reasons other than the payment of principal -- but not in excess of the
total amount of the reductions that have not been previously reimbursed
-- will be used to reinstate the Class C Investor Interest, and treated
as a portion of Investor Principal Collections and credited to the
Principal Collections Ledger;
(8) on each transfer date from and after the Reserve Account Funding Date,
but before the date on which the Reserve Account terminates, an amount up
to the excess, if any, of the Required Reserve Account
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Amount over the amount on deposit in Reserve Account will be allocated to
the MTN issuer and deposited into the Reserve Account;
(9) if the available spread account amount is less than the required spread
account amount, an amount up to any excess will be allocated to the MTN
issuer and deposited into the spread account, established for the benefit
of Class C;
(10) an amount equal to any Aggregate Investor Indemnity Amount for series 99-
1 will be paid to the transferor and will then cease to be property of
the receivables trust; and
(11) the Series 99-1 Extra Amount will be paid into the Series 99-1
Distribution Account and will be owned by the MTN issuer; and
the balance, if any, after giving effect to the payments made under paragraphs
(1) through (11) above will be paid to the excess interest beneficiary and will
then cease to be property of the receivables trust.
The "Series 99-1 Extra Amount" is calculated as follows:
Days in Calculation
Period
--------------------- X 0.02 per cent. X Investor Interest on the
365 (366 in a per annum last Record Date
leap year)
Aggregate Investor Indemnity Amount
By each transfer date, the receivables trustee will calculate the
Aggregate Investor Indemnity Amount for each outstanding series. The "Aggregate
Investor Indemnity Amount" is the sum of all Investor Indemnity Amounts for the
related monthly period.
An "Investor Indemnity Amount" means for any series, the amount of any
Transferor Section 75 Liability claimed from the receivables trustee by the
transferor under the trust section 75 indemnity allocated to that series,
calculated as follows:
Transferor Section 75 Liability X Floating Investor Percentage for that series
The "Transferor Section 75 Liability" is the liability that the transferor
has for any designated account because of Section 75 of the Consumer Credit
Act. The Transferor Section 75 Liability cannot exceed the original outstanding
face amount of the principal receivable relating to the transaction giving rise
to the liability. See "Risk Factors: Application of Consumer Credit Act 1974
May Impede Collection Efforts and Could Cause Early Redemption of Your Notes or
Losses on Your Notes".
Aggregate Investor Indemnity Amounts for series 99-1 will be payable only
if amounts are available from Excess Spread to pay them. See "-- Excess
Spread". If Excess Spread available on any transfer date is not enough to pay
the Aggregate Investor Indemnity Amount for series 99-1 otherwise payable on
that date, the excess will be carried forward and paid on subsequent transfer
dates to the extent amounts of Excess Spread are available to pay them.
Principal Funding Account
The receivables trustee will establish and maintain the Principal Funding
Account at a Qualified Institution -- currently Barclays Bank PLC at its branch
located at 1234 Pavilion Drive Northampton NN4 7SG -- as a segregated Trust
Account held for the benefit of the MTN issuer as the investor beneficiary for
series 99-1. During the Controlled Accumulation Period, the receivables trustee
will transfer the amounts described under " -- Allocation, Calculation and
Distribution of Principal Collections to the MTN Issuer" to the Principal
Funding Account.
Funds on deposit in the Principal Funding Account will be invested to the
following transfer date by the receivables trustee in permitted investments.
Investment earnings, net of investment losses and expenses, on funds on deposit
in the Principal Funding Account are called "Principal Funding Investment
Proceeds".
Principal Funding Investment Proceeds will be used to pay the Class A
Covered Amount.
The "Class A Covered Amount" is calculated as follows:
Days in Calculation
Period Balance in Principal
--------------------- X Class A Finance Rate X Funding Account
365 (366 in a
leap year)
where the balance in the Principal Funding Account is calculated as of the last
day of the monthly period before the one in which the relevant transfer date
occurs.
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Principal Funding Investment Proceeds up to the Class A Covered Amount
will be transferred to the Trustee Collection Account by each transfer date and
credited to the Finance Charge Collections Ledger for application as Class A
Available Funds.
If on any transfer date during the Controlled Accumulation Period, the
Principal Funding Investment Proceeds exceeds the Class A Covered Amount, that
excess will be paid to the transferor beneficiary. If the Principal Funding
Investment Proceeds are less than the Class A Covered Amount, a withdrawal will
be made from the Reserve Account -- to the extent funds are available -- and
will be deposited in the Finance Charge Collections Ledger, for application as
Class A Available Funds. The amount of this withdrawal will be reduced to the
extent Excess Spread would be available for deposit in the Reserve Account. See
"-- Reserve Account" and "-- Excess Spread".
Reserve Account
The receivables trustee will establish and maintain a reserve account at a
Qualified Institution -- currently, Barclays Bank PLC at its branch located at
54 Lombard Street, London EC3P 3AH -- as a Trust Account segregated for the
benefit of series 99-1. This account is called the "Reserve Account". The
Reserve Account will be established to assist with the payment distribution of
the Class A Monthly Finance Amount to the MTN issuer during the Controlled
Accumulation Period.
On each transfer date from and after the Reserve Account Funding Date, but
before the termination of the Reserve Account, the receivables trustee will
apply Excess Spread in the order of priority described in "-- Excess Spread"
to increase the amount on deposit in the Reserve Account, up to the Required
Reserve Amount.
The "Reserve Account Funding Date" will be the transfer date that starts
no later than three months before the start of the Controlled Accumulation
Period. This date will be an earlier date if the Portfolio Yield decreases
below levels described in the Series 99-1 Supplement. In any case, this date
will be no earlier than 12 months before the start of the Controlled
Accumulation Period.
The "Required Reserve Amount" for any transfer date on or after the
Reserve Account Funding Date will be:
* 0.50 per cent. of the Class A Investor Interest; or
* subject to the conditions described in the next paragraph, any
other amount designated by the transferor beneficiary;
If, on or before the Reserve Account Funding Date, the transferor
beneficiary designates a lesser amount, it must provide the servicer and the
receivables trustee with evidence that each rating agency has notified the
transferor, the servicer and the receivables trustee that that lesser amount
will not result in the rating agency reducing or withdrawing its then existing
rating of any outstanding related beneficiary debt. Also, the transferor
beneficiary must deliver to the receivables trustee an officer's certificate to
the effect that, based on the facts known to that officer at that time, in the
reasonable belief of the transferor beneficiary, the designation will not cause
a Pay Out Event to occur or an event that, after the giving of notice or the
lapse of time, would cause a Pay Out Event to occur.
On each transfer date, after giving effect to any deposit to be made to,
and any withdrawal to be made from, the Reserve Account on that transfer date,
the receivables trustee will withdraw from the Reserve Account an amount equal
to the excess, if any, of the amount on deposit in the Reserve Account over the
Required Reserve Amount. The receivables trustee will distribute this amount to
the transferor beneficiary and it will cease to be the property of the
receivables trust.
All amounts on deposit in the Reserve Account on any transfer date will be
invested by the receivables trustee in permitted investments to the following
transfer date. This will be done after giving effect to any deposits to, or
withdrawals from, the Reserve Account to be made on that transfer date. The
interest and other income -- net of investment expenses and losses -- earned on
the investments will be retained in the Reserve Account if the amount on
deposit in the Reserve Account is less than the Required Reserve Amount. If the
amount on deposit is equal to or more than the Required Reserve Amount, it will
be credited to the Finance Charge Collection Ledger to be included in Class A
Available Funds.
By each transfer date for the Controlled Accumulation Period before the
series 99-1 scheduled redemption date and on the first transfer date during the
Regulated Amortisation Period or the Rapid Amortisation Period, the receivables
trustee will withdraw an amount from the Reserve Account and deposit it in the
Trustee Collection Account for credit to the Finance Charge Collections Ledger
to be included in Class A Available Funds. This amount will be equal to the
lesser of:
* the available amount on deposit in the Reserve Account; and
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* the amount, if any, by which the Class A Covered Amount is greater
than the Principal Funding Investment Proceeds.
The amount of this withdrawal will be reduced to the extent Excess Spread
would be available for deposit in the Reserve Account.
The Reserve Account will be terminated following the earlier to occur of:
* the termination of the receivables trust; and
* the earlier of the first transfer date after the start of the
Regulated Amortisation Period or the Rapid Amortisation Period and
the transfer date right before the series 99-1 scheduled redemption
date.
When the Reserve Account terminates, all amounts still on deposit in the
Reserve Account will be distributed to the transferor beneficiary and will no
longer be the property of the receivables trust.
Distribution Ledgers
The receivables trustee will establish distribution ledgers for each class
of series 99-1 in the Trustee Collection Account. On each transfer date it will
credit and debit amounts to these ledgers as described throughout this section
of this prospectus. All amounts credited to the Class A Distribution Ledger,
the Class B Distribution Ledger and the Class C Distribution Ledger will be
regarded as being segregated for the benefit of the MTN issuer.
Trustee Payment Amount
The share of the Trustee Payment Amount payable on any transfer date that
is allocable to series 99-1 -- called the "Investor Trustee Payment" -- will be
calculated as follows:
Investor Interest for series
99-1
- ------------------------------- X Trustee Payment Amount
Total of Investor Interests of
Series for which the Trustee
Payment Amount was incurred
The share of the Investor Trustee Payment allocable to the Investor
Interest for each class is equal to the product of:
* the floating allocation for the relevant class; and
* the Investor Trustee Payment.
This will be called the "Class A Trustee Payment Amount", the "Class B
Trustee Payment Amount" and the "Class C Trustee Payment Amount", respectively.
The Investor Trustee Payment for any class will be payable from amounts
available for distribution for that purpose out of available funds for each
class and Excess Spread. See "Series 99-1 : Allocation, Calculation and
Distribution of Finance Charge Collections to the MTN Issuer" and -- "Excess
Spread".
The portion of the Trustee Payment Amount not allocated to series 99-1
will be paid from cashflows under the receivables trust allocated to other
outstanding series, and in no event will series 99-1 be liable for these
payments.
Qualified Institutions
If the bank or banks at which any of the accounts listed below are held
cease to be a Qualified Institution, then the receivables trustee will, within
10 business days, establish a new account to replace the affected account or
accounts, and will transfer any cash and interest to that new account or
accounts. The accounts referred to above are:
* Trustee Collection Account;
* Trustee Acquisition Account;
* Reserve Account; or
* Principal Funding Account.
The receivables trustee may in its discretion elect to move any or all of
these accounts and the amounts credited to them from the Qualified Institution
at which they are kept as at the date of this document to another or other
Qualified Institutions.
"Qualified Institution" means (1) an institution which at all times has a
short-term unsecured debt rating of at least A-1+ by Standard & Poor's and P-1
by Moody's or (2) an institution acceptable to each rating agency.
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Expenses Loan Agreement
On the closing date, the issuer -- as borrower -- will enter into a loan
agreement with Barclays -- as lender -- under which Barclays will lend to the
issuer up to L[*] to be used by the issuer in meet its costs and expenses
relating to issuing the notes. This loan agreement is called the "Expenses Loan
Agreement". The amounts outstanding under the Expenses Loan Agreement, together
with interest on them, will be repaid out of Class A Available Funds and,
during the Rapid Amortisation Period only, also out of Excess Spread. To the
extent that Class A Available Funds is enough on each transfer date and
provided that a Pay Out Event has not occurred, repayments of principal will be
made by equal monthly installments on each distribution date, with the final
payment being made on the distribution date falling in [*].
Series 99-1 Pay Out Events
The events described below are called "Series 99-1 Pay-Out Events":
(1) failure on the part of the transferor:
* to make any payment or deposit required by the terms of the
receivables securitisation agreement within five business days
after the date that the payment or deposit is required to be made;
or
* duly to observe or perform any covenants or agreements of the
transferor in the receivables securitisation agreement or the
Series 99-1 Supplement that has a material adverse effect on the
interests of the MTN issuer in respect of series 99-1 and which
continues unremedied for a period of 60 days after the date on
which written notice of the failure, requiring it to be remedied,
is given to the transferor by the receivables trustee, or is given
to the transferor and the receivables trustee by the investor
beneficiary for series 99-1 acting on the instructions of holders
of MTNs representing together 50 per cent. or more of the total
balance of MTNs issued and outstanding at that time for series 99-
1, and which unremedied, continues during that 60 day period to
have a material adverse effect on the interests of the MTN issuer
in respect of series 99-1 for that period;
(2) any representation or warranty made by the transferor in the receivables
securitisation agreement or the Series 99-1 Supplement, or any
information contained in a computer file or microfiche list required to
be delivered by the transferor under the receivables securitisation
agreement:
* proves to have been incorrect in any material respect when made or
when delivered and continues to be incorrect in any material
respect for a period of 60 days after the date on which written
notice of the error, requiring it to be remedied, is given to the
transferor by the receivables trustee, or is given to the
transferor and the receivables trustee by the investor beneficiary
for series 99-1 acting on the instructions of holders of loan MTNs
representing together 50 per cent. or more of the total balance of
MTNs issued and outstanding in respect of series 99-1; and
* as a result of which there is a material adverse effect on the
interests of the MTN issuer in respect of series 99-1 and which
unremedied continues during that 60 day period to have a material
adverse effect for that period;
(3) the average Portfolio Yield for any three consecutive monthly periods is
less than the average Expense Rate for that period or, on any
determination date before the end of the third monthly period from the
closing date, the Portfolio Yield is less than the average Expense Rate
for that period;
(4) either:
* over any period of thirty consecutive days, the Transferor
Interest averaged over that period is less than the Minimum
Transferor Interest for that period and the Transferor Interest
does not increase on or before the tenth business day following
that thirty day period to an amount so that the average of the
Transferor Interest as a percentage of the Average Principal
Receivables for such thirty day period, computed by assuming that
the amount of the increase of the Transferor Interest by the last
day of the ten business day period, as compared to the Transferor
Interest on the last day of the thirty day period, would have
existed in the receivables trust during each day of the thirty day
period, is at least equal to the Minimum Transferor Interest; or
* on the last day of any monthly period the total balance of
eligible receivables is less than the Minimum Aggregate Principal
Receivables, adjusted for any series having a Companion Series as
described in the supplement for that series, and the total balance
of eligible receivables fails to increase to an amount equal to or
greater than the Minimum Aggregate Principal Receivables on or
before the tenth business day following that last day;
(5) any servicer default or trust cash manager default occurs that would have
a material adverse effect on the MTN issuer in respect of series 99-1;
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(6) the Investor Interest for each class of series 99-1 is not reduced to
zero on the series 99-1 scheduled redemption date;
(7) the early termination, without replacement, of any of the swap agreements
as described in this prospectus under "The Swap Agreements"; or
(8) the MTN issuer is required to withhold or deduct any amounts for or on
account of tax on the payment of any principal or interest in respect of
the MTNs or any of the swap agreements.
If any event described in paragraphs (1), (2) or (5) then, after the
applicable grace period, either (1) the receivables trustee or (2) the investor
beneficiary may declare that a Series 99-1 Pay Out Event has occurred if the
correct notice has been given. If the investor beneficiary declares that a
Series 99-1 Pay Out Event has occurred, it must have acted on the instructions
of holders of MTNs representing, together, 50 per cent. or more of the MTNs
issued and outstanding at that time in respect of series 99-1. The investor
beneficiary must give a written notice to the transferor, the servicer and the
receivables trustee that a Series 99-1 Pay Out Event has occurred. If the
receivables trustee declares that a Series 99-1 Pay Out Event has occurred it
must give a written notice to this effect to the transferor, the servicer and
the trust cash manager. The Series 99-1 Pay Out Event will be effective as of
the date of the relevant notice. If any event in paragraphs (3), (4), (6), (7)
or (8) occurs, a Series 99-1 Pay Out Event will occur without any notice or
other action on the part of the receivables trustee or the investor
beneficiary.
"Minimum Transferor Interest" means [*] per cent. of the Average Principal
Receivables. The transferor may reduce the Minimum Transferor Interest in the
following circumstances:
* upon 30 days prior notice to the receivables trustee, each rating
agency and any enhancement provider entitled to receive notice
under its supplement;
* upon written confirmation from each rating agency that the
reduction will not result in the reduction or withdrawal of the
ratings of the rating agency for any beneficiary debt secured
directly or indirectly by the receivables in the receivables trust
outstanding to a series -- including for series 99-1, the notes;
and
* delivery to the receivables trustee and each enhancement provider
of an officer's certificate stating that the transferor reasonably
believes that the reduction will not, based on the facts known to
the officer at the time of the certification, cause, at that time
or in the future, a pay out event to occur for any investor
beneficiary.
The Minimum Transferor Interest will never be less than [*] per cent of
the Average Principal Receivables.
"Minimum Aggregate Principal Receivables" means, an amount equal to the
sum of the numerators used in the calculation of the investor percentages for
principal collections for all outstanding series on that date. For any series
in its rapid accumulation period, as defined in its supplement, with an
investor interest as of that date of determination equal to the balance on
deposit in the principal funding account for that series, the numerator used in
the calculation of the investor percentage for principal collections for that
eligible series will, only for the purpose of the definition of Minimum
Aggregate Principal Receivables, be zero.
"Average Principal Receivables" means, for any period, an amount equal to:
* the sum of the total balance of eligible principal receivables at
the end of each day during that period divided by;
* the number of days in that period.
"Companion Series" means:
* each series that has been paired with another series so that the
reduction of the investor interest of the paired series results in
the increase of the investor interest of the other series, as
described in the related supplements; and
* the other series.
Your Payment Flows
On any distribution date during the Revolving Period and Controlled
Accumulation Period the receivables trustee will transfer from available funds
in the Trustee Collection Account the sum of:
* the Class A Monthly Distribution Amount;
* the Class B Monthly Distribution Amount; and
* the Class C Monthly Distribution Amount;
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and deposit that sum into the Series 99-1 Distribution Account held by the
MTN issuer.
The MTN issuer will credit the amount received in respect of Monthly
Distribution Amounts for each class to the respective MTN Coupon Ledger.
The MTN issuer will then transfer from the Series 99-1 Distribution
Account:
* the amounts credited to the Class A MTN Coupon Ledger and the
Class B MTN Coupon Ledger; and
* the excess of the Class C MTN Coupon Ledger, minus the costs and
expenses of the MTN issuer for the relevant monthly period;
and deposit these amounts into the Series 99-1 Issuer Account. The Series
99-1 Issuer Account is held by the issuer.
The issuer will credit the amount received from the MTN Coupon Ledger for
each class to the Notes Coupon Ledger for the respective class.
On each distribution date, the issuer will pay:
* from the Class A Notes Coupon Ledger, the interest due and payable
on the class A1 notes for the relevant monthly Calculation Period,
to the principal paying agent;
* from the Class A Notes Coupon Ledger, the interest due and payable
to the swap counterparty under the euro swap agreement for the
relevant Calculation Period, to the swap counterparty;
* from the Class A Notes Coupon Ledger, the interest due and payable
to the swap counterparty under the class A3 dollar swap agreement
for the relevant Calculation Period, to the swap counterparty;
* from the Class B Notes Coupon Ledger, the interest due and payable
to the swap counterparty under the class B dollar swap agreement
for the relevant Calculation Period, to the swap counterparty; and
* from the Class C Notes Coupon Ledger, the interest due and payable
to the swap counterparty under the class C dollar swap agreement in
respect of the relevant Calculation Period, to the swap
counterparty.
Under the terms of each swap agreement, the swap counterparty will pay to
the principal paying agent on each interest payment date an amount equal to the
interest on the applicable class of notes, converted into euros or dollars, as
applicable, subject to the deferral of interest as described in "Terms and
Conditions of the Notes" and "The Swap Agreement".
On each distribution date during the Rapid Amortisation Period or the
Regulated Amortisation Period, the receivables trustee will also transfer all
amounts credited to the Distribution Ledgers for each class respectively. These
amounts will be calculated in accordance with the distribution of available
funds for each class as described in "-- Allocation, Calculation and
Distribution of Finance Charge Collections to the MTN Issuer", and will be
deposited into the Series 99-1 Distribution Account.
The MTN issuer and the issuer shall treat these amounts in the same way as
payments of interest received during the Revolving Period and the Controlled
Accumulation Period.
On the earlier of the Series 99-1 scheduled redemption date and the first
distribution date for the Regulated Amortisation Period or the Rapid
Amortisation Period, and on each distribution date after that, the receivables
trustee will transfer the following amounts and deposit them into the Series
99-1 Distribution Account:
* from the Principal Funding Account, the lesser of the amount in
the Principal Funding Account on that date and the Class A
Investor Interest; and
* from the Class A Distribution Ledger, the lesser of (1) during the
Rapid Amortisation Period, the amount in the Class A Distribution
Ledger or, during the Regulated Amortisation Period, the
Controlled Deposit Amount; and (2) the Class A Investor Interest
-- after taking into account the amount distributed from the
Principal Funding Account described above.
On the later to occur of the Class B Principal Commencement Date and the
Series 99-1 scheduled redemption date and each distribution date after, the
receivables trustee will transfer the following amounts and deposit them into
the Series 99-1 Distribution Account:
* from the Principal Funding Account, the lesser of the amount in
the Principal Funding Account in excess of the Class A Investor
Interest and the Class B Investor Interest; and
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* from the Class B Distribution Ledger, the lesser of the amount on
deposit in the Class B Distribution Ledger and the Class B
Investor Interest -- after taking into account the amount
distributed from the Principal Funding Account described above.
On the later to occur of the Class C Principal Commencement Date and the
Series 99-1 scheduled redemption date and each distribution date after, the
receivables trustee will transfer the following amounts and deposit them into
the Series 99-1 Distribution Account:
* from the Principal Funding Account, the lesser of (1) the amount
in the Principal Funding Account in excess of the sum of the Class
A Investor Interest and the Class B Investor Interest and (2) the
Class C Investor Interest; and
* from the Class C Distribution Ledger, the lesser of the amount on
deposit in the Class C Distribution Ledger and the Class C
Investor Interest -- after taking into account the amount
distributed from the Principal Funding Account as described above.
The MTN issuer will credit the amount received for each class of Investor
Interest to the MTN Principal Ledger, for that respective class.
On the Series 99-1 scheduled redemption date and each distribution date
after, the MTN issuer will transfer for same day value from the Series 99-1
Distribution Account the amount in the MTN Principal Ledger, for each class,
respectively, and deposit them into the Series 99-1 Issuer Account.
The issuer will credit each amount received from the MTN Coupon Ledger for
each class respectively to the Notes Coupon Ledger, for that class.
On the Series 99-1 scheduled redemption date or distribution date after,
the issuer shall pay:
* from the Class A Notes Principal Ledger, an amount equal to the
lesser of (1) the product of the amount in the Class A Notes
Principal Ledger and the Class A2 Percentage; and (2) the sterling
equivalent of the principal due and repayable on the class A2
notes to the swap counterparty;
* from the Class A Notes Principal Ledger, an amount equal to the
lesser of (1) the product of the amount in the Class A Notes
Principal Ledger and the Class A3 Percentage; and (2) the sterling
equivalent of the principal due on the class A3 notes, to the swap
counterparty;
* from the Class A Notes Principal Ledger, an amount equal to the
lesser of (1) the product of the amount in the Class A Notes
Principal Ledger and the Class A1 Percentage; and (2) the
principal due on the class A1 notes, to the principal paying
agent;
* from the Class B Notes Principal Ledger, an amount equal to the
lesser of (1) the amount in the Class B Notes Principal Ledger and
(2) the principal due on the class B notes, to the swap
counterparty; and
* from the Class C Notes Principal Ledger, an amount equal to the
lesser of (1) the amount in the Class C Notes Principal Ledger and
(2) the sterling equivalent of the principal due on the class C
notes to the swap counterparty.
The swap counterparty will pay to the principal paying agent, in dollars
or euros, as applicable, principal for distribution to the noteholders
converted into euros or dollars, as applicable, at the applicable fixed
exchange rate under the relevant swap agreement.
The Notes And The Global Notes
The issue of the notes will be authorised by a resolution of the Board of
Directors of the issuer passed on [*] November 1999. The notes will be
constituted by a trust deed to be dated the closing date, between the issuer
and the note trustee, as trustee for, among others, the holders for the time
being of the notes and of any interest coupons for the notes. The trust deed
includes provisions which enable it to be modified or supplemented and any
reference to the trust deed is a reference also to the document as modified or
supplemented in accordance with its terms.
The statements set out below include summaries of, and are subject to, the
detailed provisions of the trust deed. The trust deed will include the form of
the global notes and the form of definitive notes. The offered global notes
will be deposited on the closing date with The Bank of New York, * acting as
depository under the terms of the depository agreement. A paying agency and
agent bank agreement between the issuer, the note trustee, the Bank of New
York, the other paying agents and the agent bank, regulates how payments will be
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made on the notes and how determinations and notifications will be made. It
will be dated as of the closing date and the parties will include, on an
ongoing basis, any successor party appointed in accordance within its terms.
As a noteholder, you will be entitled to the benefit of, will be bound by
and will be deemed to have notice of, all the provisions of the trust deed, the
depository agreement and the paying agency and agent bank agreement. You can
see copies of these agreements at the principal office for the time being of
the note trustee, which is, as of the date of this document, One Canada Square,
London E145AL and at the specified office for the time being of each of the
paying agents.
The class A3 notes and the class B notes will be represented initially by
global notes in bearer form, without coupons, in the principal amount of
respectively $[*] and $[*]. The global notes will be deposited on your behalf
with The Bank of New York, * as the depository under the depository agreement,
on or about the closing date. The depository will:
* issue certificateless depository interests, representing interests in the
class A3 notes and the class B notes, to Cede & Co as nominee of the
Depository Trust Company -- called DTC; and
On confirmation from DTC that the depository, through its nominee, holds
the offered global notes:
* DTC, when it has accepted the certifcateless depository interests --
which will be described in a letter called the DTC letter of
representations sent by the issuer and the depository to DTC -- will
record book-entry interests in your account or the participant account
through which you hold your interests in the notes. These book-entry
interests will represent your beneficial entitlement to the
certificateless depository interest which in turn represent your interest
in the offered notes.
When reference in this section is made to the notes or note owners it is
to the beneficial ownership of them in the form of certificateless depository
interests.
You may hold your interests in the notes through DTC, in the United
States, or Cedelbank or the Euroclear System, in Europe, if they are
participants in those systems, or indirectly through organizations that are
participants in those systems. Cede & Co., as nominee for DTC, will hold the
certificateless depository interests. Cedelbank and Euroclear will hold omnibus
positions on behalf of their respective participants, through customers'
securities accounts in Cedelbank's and Euroclear's names on the books of their
respective depositaries. The depositaries in turn will hold the positions in
customers' securities accounts in the depositaries' names on the books of DTC.
DTC has advised us and the underwriters that it is:
* A limited-purpose trust company organized under the New York Banking Law;
* A "banking organization" within the meaning of the New York Banking Law;
* A member of the Federal Reserve System;
* A "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
* A "clearing agency" registered under the provisions of Section 17A of the
Exchange Act.
DTC holds securities for its participants and facilitates the clearance
and settlement among its participants of securities transactions, including
transfers and pledges, in deposited securities through electronic book-entry
changes in its participants' accounts. This eliminates the need for physical
movement of securities certificates. DTC participants include securities
brokers and dealers, banks, trust companies, clearing corporations and other
organizations. Indirect access to the DTC system is also available to others
including securities brokers and dealers, banks, and trust companies that clear
through or maintain a custodial relationship with a participant, either
directly or indirectly. The rules applicable to DTC and its participants are on
file with the SEC.
Transfers between participants on the DTC system will occur under DTC
rules. Transfers between participants on the Cedelbank system and participants
on the Euroclear system will occur under their rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedelbank
participants or Euroclear participants, on the other, will be effected by DTC
under DTC rules on behalf of the relevant European international clearing
system by that system's depositary. However, these cross-market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in that system under its rules and
procedures and within its established deadlines, European time. The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its depositary to take action
to effect final settlement on its behalf by delivering or receiving securities
in DTC, and making or receiving payment under normal procedures for same-day
funds settlement applicable to DTC. Cedelbank participants and Euroclear
participants may not delivery instructions directly to their system's
depositary.
Because of time-zone differences, credits of securities in Cedelbank or
Euroclear as a result of a transaction with a DTC participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date. The credits for any transactions in these
securities settled
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during this processing will be reported to the relevant Cedelbank participant
or Euroclear participant on that business day. Cash received in Cedelbank or
Euroclear as a result of sales of securities by or through a Cedelbank
participant or a Euroclear participant to a DTC participant will be received
and available on the DTC settlement date. However, it will not be available in
the relevant Cedelbank or Euroclear cash account until the business day
following settlement in DTC.
Purchases of notes under the DTC system must be made by or through DTC
participants, which will receive a credit for the notes on DTC's records. The
ownership interest of each actual note owner is in turn to be recorded on the
DTC participants' and indirect participants' records. Note owners will not
receive written confirmation from DTC of their purchase. However, note owners
are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the DTC
participant or indirect participant through which the note owner entered into
the transaction. Transfer of ownership interests in the notes are to be
accomplished by entries made on the books of DTC participants acting on behalf
of note owners. Note owners will not receive certificates representing their
ownership interest in notes unless use of the book-entry system for the notes
is discontinued.
To facilitate subsequent transfers, all securities deposited by DTC
participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of securities with DTC and their registration in the name of Cede &
Co. does not change beneficial ownership. DTC has no knowledge of the actual
note owners of the notes. DTC's records reflect only the identity of the DTC
participants to whose accounts the notes are credited, which may or may not be
the actual beneficial owners of the notes. The DTC participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to DTC participants,
by DTC participants to indirect participants, and by DTC participants and
indirect participants to note owners will be governed by arrangements among
them and by any statutory or regulatory requirements in effect from time to
time.
Neither DTC nor Cede & Co. will consent or vote on behalf of the notes.
Under its usual procedures, DTC mails an omnibus proxy to the issuer as soon as
possible after the record date, which assigns Cede & Co.'s consenting or voting
rights to those DTC participants to whose accounts the notes are credited on
the record date, identified in a listing attached to the proxy.
Principal and interest payments on the notes will be made to DTC. DTC's
practice is to credit its participants' accounts on the applicable distribution
date according to their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on that distribution
date. Payments by DTC participants to note owners will be governed by standing
instructions, customary practice, and any statutory or regulatory requirements
as may be in effect from time to time, these payments will be the
responsibility of the DTC participant and not of DTC, the trustee or the
issuer. Payment of principal and interest in DTC is the responsibility of the
trustee, DTC is responsible for disbursing payments made to it to DTC
participants and indirect participants.
If any of the following events occur, you will be entitled to receive
definitive certificates for your book-entry interests:
* as a result of a change in UK law, the issuer or any paying agent
is or will be required to make any deduction or withholding on
account of tax from any payment on the notes that would not be
required if the notes were in definitied form; or
* DTC, has notified the issuer that is unwilling or unable to hold
the certificateless depository interests or to continue as a
clearing agency under the United States Securities and Exchange
Act of 1934 and the issuer cannot appoint a successor;
* if the depository notifies the issuer that it is at any time
unwilling or unable to continue as depository and the issuer
cannot appoint a successor;
* the principal amount of the notes is accelerated because an event
of default has occurred.
DTC management is aware that some computer applications, systems and the
like for processing data that are dependent upon calendar dates, including
dates before, on and after January 1, 2000, may encounter year 2000 problems.
DTC has informed its participants and other members of the financial community
that it has developed and is implementing a program so that its systems
relating to the timely payment of distributions to securityholders, book-entry
deliveries, and settlement of trades within DTC will continue to function
appropriately. This program includes a technical assessment and a remediation
plan, each of which is complete. Additionally, DTC's program includes a testing
phase, which it expects to complete within appropriate time frames.
DTC's ability to perform its services properly is also dependent upon
other parties. Third parties include issuers and their agents, DTC's direct and
indirect participants, vendors from whom DTC's licenses software and hardware,
and vendors on whom DTC relies for information or services, including
telecommunication and
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electrical utility service providers. DTC has informed us that it is
contacting, and will continue to contact, third party vendors from whom DTC
acquires services to:
* impress upon them the importance of these services being Year 2000
compliant; and
* determine the extent of their efforts for Year 2000 remediation
and testing for their services.
Additionally, DTC is in the process of developing contingency plans as it
deems appropriate.
According to DTC, the foregoing information about DTC has been provided to
us for informational purposes only and is not a representation, warranty, or
contract modification of any kind.
Cedelbank is incorporated under the laws of Luxembourg as a professional
depositary. Cedelbank holds securities for its participating organizations and
facilitates the clearance and settlement of securities transactions between
Cedelbank participants through electronic book-entry changes in accounts of
Cedelbank participants, thereby eliminating the need for physical movement of
notes. Transactions may be settled in Cedelbank in any of 38 currencies,
including United States dollars.
Cedelbank participants are financial institutions around the world,
including underwriters, securities brokers and dealers, banks, trust companies,
and clearing corporations. Indirect access to Cedelbank is also available to
others, including banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Cedelbank participant,
either directly or indirectly.
The Euroclear system was created in 1968 to hold securities for its
participants and to clear and settle transactions between Euroclear
participants through simultaneous electronic book-entry delivery against
payment. This eliminates the need for physical movement of certificates.
Transactions may be settled in any of 32 currencies, including United States
dollars.
The Euroclear System is operated by Morgan Guaranty Trust Company of New
York, Brussels, Belgium office, the Euroclear operator, under contract with
Euroclear Clearance System, Societe Cooperative, a Belgium co-operative
corporation, the Euroclear co-operative. All operations are conducted by the
Euroclear operator. All Euroclear securities clearance accounts and Euroclear
cash accounts are accounts with the Euroclear operator, not the Euroclear co-
operative. The board of the Euroclear co-operative establishes policy for the
Euroclear System.
Euroclear participants include banks -- including central banks --
securities brokers and dealers and other professional financial intermediaries.
Indirect access to the Euroclear System is also available to other firms that
maintain 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 and Conditions Governing use of Euroclear
and the related Operating Procedures of the Euroclear System. These terms and
conditions govern transfers of securities and cash within the Euroclear System,
withdrawal of securities and cash from the Euroclear System, and receipts of
payments for securities in the Euroclear System. All securities in the
Euroclear system are held on a fungible basis without attribution of specific
certificates to specific securities clearance accounts. The Euroclear operator
acts under these terms and conditions only on behalf of Euroclear participants
and has no record of or relationship with persons holding through Euroclear
participants.
Distributions on the notes held indirectly through Cedelbank or Euroclear
will be credited to the cash accounts of Cedelbank participants or Euroclear
participants according to the relevant system's rules and procedures, to the
extent received by its depositary. These distributions must be reported for tax
purposes under United States tax laws and regulations. Cedelbank or the
Euroclear operator, as the case may be, will take any other action permitted to
be taken by a noteholder on behalf of its participants only as permitted by its
rules and procedures and only if its depositary is able to take these actions
on its behalf through DTC.
Although DTC, Cedelbank and Euroclear have agreed to these procedures to
facilitate transfers of notes among participants of DTC, Cedelbank and
Euroclear, they are not obligated to perform these procedures. Additionally,
these procedures may be discontinued at any time.
So long as the depository or its nominee is the holder of the offered
global notes underlying the book-entry interests, they will be considered the
global noteholder under the trust deed. Because of this, each person holding a
book-entry interest must rely on the procedures of the depository, DTC,
Euroclear and/or Cedelbank or other intermediary though which the interests are
held, to exercise any rights and obligations of noteholders under the trust
deed.
The noncertificated depository interests held by DTC respectively may not
be transferred, until they are exchanged for definitive certificates, unless as
a whole, to their respective successors, validly appointed.
Payment of principal and interest on the offered global notes will be
made, in U.S. dollars, by the swap counterparty on behalf of the issuer to the
depository as the global noteholder. You and any other beneficial owners of
notes must look only to DTC, Euroclear or Cedelbank, as applicable, for your
beneficial entitlement to the notes.
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As the holder of book-entry interests you will not have the right under
the trust deed to act on solicitations by the issuer for action by noteholders.
You will only be able to act to the extent you receive the appropriate proxies
to do so from DTC, Euroclear or Cedelbank. No assurances are made about these
procedures or their adequacy for ensuring timely exercise of remedies under the
trust deed.
You and other holders of book-entry interests will be entitled to receive
definitive notes, in the form and under the circumstances, issued under the
trust deed and the terms and conditions of the notes.
Any definitive notes issued on exchange for book-entry interests will be
registered by a registrar as directed by the depository on instructions --
which are expected to be based on the ownership of the relevant book-entry
interests -- from DTC, Euroclear or Cedelbank.
You should be aware that, under current UK tax law, following the issuance
of definitive notes, payments of interest will be subject to UK withholding tax
- -- currently at a rate of 20 per cent. -- subject to the terms of any
applicable double tax treaty.
Terms and Conditions of the Notes
The material terms of the notes are described in the body of the
prospectus. The terms and conditions attached as Appendix D, which are
incorporated into this prospectus and form a part of this prospectus, are in
the form in which they appear in the trust deed. They summarise some of the
terms of the trust deed, paying agency and agent bank agreement, depository
agreement and deed of charge. The conditions are therefore subject to the
detailed provisions of those agreements.
The following is a summary of the material terms and conditions of the
notes, the trust deed, the paying agency and agent bank agreement, the deed of
charge and the depository agreement, and is numbered 1 to 14, using the same
numbering format as the terms and conditions of the notes attached at Appendix
G. This summary does not need to be read with Appendix G in order to learn all
the material terms and conditions of the offered notes.
The offered notes, together with all the other classes of notes that are
not being offered in this prospectus are the subject of the following
documents:
* a trust deed dated the closing date between the issuer and the
note trustee;
* a paying agency and agent bank agreement dated the closing date
among the issuer, the principal paying agent and the agent bank,
the other paying agents, the transfer agent and the note trustee;
* a deed of charge dated the closing date among the expenses loan
provider, the issuer and the note trustee; and
* a depositary agreement dated the closing date among the issuer,
the note trustee and the note depository.
When we refer to the parties to the documents listed above, the reference
includes any successor to that party validly appointed.
Initially the parties will be as follows:
* Gracechurch Card Funding (No. 1) PLC as issuer;
* The Bank of New York as principal paying agent and agent bank,
transfer agent, depository and note trustee; and
* Barclays Bank PLC as expenses loan provider.
You are bound by and deemed to have notice of all of the provisions of the
trust deed, the paying agency and the agent bank agreement, the deed of charge
and the depository agreement, which are applicable to you. You can view those
documents at the principal place of business of the note trustee or the
specified office of any of the paying agents.
1. Form Denomination and Title
(1) The class A1 notes and the class A2 notes will be initially offered and
sold outside the United States to non-U.S. persons in accordance with
Regulation S under the Securities Act. The class A3 notes and the class B
notes will be initially offered and sold within the United States in
minimum denominations of U.S.$1,000. They are initially in global bearer
form, without coupons attached. The class C notes are being offered and
sold outside the United States to non-U.S. persons in accordance with
Regulation S or inside
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the United States only to qualified institutional buyers within the
meaning of Rule 144A under the Securities Act in transactions exempt from
the Securities Act. If notes in definitive form are issued in respect of
the offered notes, they will be issued in an aggregate principal amount
equal to the principal amount outstanding of the relevant global notes,
in registered form.
(2) Transfers and exchanges of beneficial interests in global notes are made
in accordance with the paying agency and agent bank agreement.
(3) Title to the global notes will pass by delivery. Title to definitive
notes will pass on registration in the register maintained by the
depository. The holder of any global or definitive note is the absolute
owner of that note unless, in the case of definitive notes, evidence to
the contrary can be shown by a duly executed transfer endorsed on the
note.
2. Status
Payments on the offered notes will be made equally amongst all notes of
the same class.
3. Security and Swap Agreement
The security for the payment of amounts due under your notes, together
with the expenses which validly arise during the transaction, is created by the
deed of charge. The security is created in favour of the note trustee who will
hold it on your behalf and on the behalf of other secured creditors of the
issuer. The security consists of the following:
(1) an assignment by way of first fixed security of the issuer's right, title
and interest in and to the MTNs;
(2) an assignment by way of first fixed security of the issuer's right,
title, interest and benefit in and to any agreements or documents to
which the issuer is a party, except the trust deed and deed of charge
(3) an assignment by way of first fixed security of the issuer's right,
title, interest and benefit in and to all monies credited to the Series
99-1 Issuer Account or to any bank or other account in which the issuer
may at any time have any right, title, interest or benefit; and
(4) a first floating charge over the issuer's undertaking and assets not
charged under (1), (2) or (3) above,
The security is described in detail in the deed of charge.
The deed of charge sets out how money is distributed between the secured
parties if the security is enforced. The order of priority it sets out is as
follows:
* in no order of priority between them but in proportion to the
respective amounts due, to pay fees which are due to any receiver
appointed under the deed of charge or the trust deed and all
amounts due for legal fees and other costs, charges, liabilities,
expenses, losses, damages, proceedings, claims and demands which
have been incurred by the note trustee under the documents listed
in the third bullet point under number 4 below and in enforcing or
perfecting title to the security together with interest due on
these amounts;
* subject to the bullet point below, to pay the amounts due to the
swap counterparts in relation to the swap agreements;
* in order of priority between them, the respective amounts due:
in payment of all amounts due and unpaid, following the
applications in the first bullet point above, to the note trustee
and/or anyone appointed by them under the trust deed; and
towards payment of amounts due and unpaid on the class A notes, to
interest then to principal after, in the case of the class A2
notes and the A3 notes having paid any amounts due to the swap
counterparty under the terms the relevant swap agreement;
* towards payment of amounts due on the class B notes, having paid
any amounts due to the swap counterparty under the terms of class
B dollar swap agreement, to interest then to principal;
* towards payments of amounts due on the class C notes, having paid
any amounts due to the swap counterparty under the terms of the
class C dollar swap agreement, to interest then to principal;
* towards payment of interest and then principal under the expenses
loan agreement;
* towards payment of any sums that the issuer must pay to any tax
authority;
* towards payment of any termination payment due to the swap
counterparty which arises as a result of a termination of any swap
agreement;
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* towards payment of any sums due to third parties under obligations
incurred in the course of the issuer's business;
* towards payment of any dividends due and unpaid to shareholders of
the issuer; and
* in payment of the balance, if any, to the liquidator of the
issuer.
The security becomes enforceable when an event of default occurs. These
events are described in number 9 below. If an event of default occurs, the
redemption of notes will not necessarily be accelerated as described in number
6 below.
The issuer has entered into swap agreements the material terms of which
are described under the heading "The Swap Agreements" in this prospectus.
4. Negative Covenants of the Issuer
If any note is outstanding, the issuer will not, unless it is permitted by
the terms of the issuer related documents or by the written consent of the
trustee:
* create or permit to subsist any mortgage, charge, pledge, lien or
other security interest, including anything which amounts to any
of these things under the laws of any jurisdiction, on the whole
or any part of its present or future undertaking, assets or
revenues, including uncalled capital;
* carry on any business other than relating to the issue of the
notes, as described in this prospectus; in carrying on that
business, the issuer will not engage in any activity or do
anything at all except:
(1) preserve and/or exercise and/or enforce any of its rights and perform and
observe its obligations under the notes and coupons, the deed of charge,
the paying agency and agent bank agreement, the trust deed, each
depository agreement the expenses loan agreement, each swap agreement,
the series 99-1 MTNs, the corporate services agreement, the class A and
class B underwriting agreement, the class C subscription agreement, the
bank agreement and any bank mandate regarding the Series 99-1 Issuer
Account -- collectively called the "issuer related documents".
(2) use, invest or dispose of any of its property or assets in the manner
provided in or contemplated by the issuer related documents; or
(3) perform any act incidental to or necessary in connection with (1) or (2)
above;
* have any subsidiaries, subsidiary undertakings, undertakings of
any other kind, employees, premises or interests in bank accounts
other than the Series 99-1 Distribution Account unless the account
is charged to the note trustee on acceptable terms;
* have any indebtedness, other than indebtedness permitted under the
terms of its articles of association or any of the issuer related
documents;
* give any guarantee or indemnity in respect of any obligation of
any person;
* repurchase any shares of its capital stock or declare or pay any
dividend or other distributions to its shareholders;
* consolidate with or merge with or into any person or liquidate or
dissolve on a voluntary basis;
* be a member of any group of companies for the purposes of value
added tax;
* waive or consent to the modification or waiver of any of the
provisions of the issuer related documents without the prior
written consent of the note trustee; or
* offer to surrender to any company any amounts which are available
for surrender by way of group relief.
5. Interest
Each note bears interest on its principal amount outstanding from, and
including, the closing date. Interest on the class A1 notes is paid in arrear
in pounds sterling, interest in respect of the class A2 notes is paid in arrear
in euro and interest in respect of the class A3 notes, class B notes and class
C notes is paid in arrear in U.S.$ on each interest payment date.
An interest payment date occurs on the following days:
* each distribution date for the class A3 notes, class B notes and
class C notes at all times and for the class A1 notes and the
class A2 notes, during the Rapid Amortisation Period or the
Regulated Amortisation Period which falls in this period;
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* for the class A2 notes during the Revolving Period or the
Controlled Accumulation Period, the third distribution date
following the interest payment date before, or, in the case of the
15 January, 2000 interest payment date. If 15 January, 2000 is not
a business day, the next succeeding business day.
If there is a shortfall between the amounts received by the issuer under
the series 99-1 MTNs for the class A1 notes or the amount received by the
issuer from the swap counterparty in relation to the class A2 notes, class A3
notes, class B notes or class C notes and the amount of interest due on the
relevant offered notes on that interest payment date, that shortfall will be
borne by each class of note in a proportion equal to the proportion that the
interest outstanding on the relevant note bears to the total amount of interest
outstanding on the notes of the same class. This will be determined on the
interest payment date on which the shortfall arises. The shortfall will be
deferred until the next interest payment date on which funds are available to
the issuer, from payments made to it under the series 99-1 MTNs or from the
swap counterparty on that interest payment date, to pay it. The shortfall will
accrue interest at the rate described for each class or sub class of note below
plus a margin of 2.0 per cent. per annum, and payment of that interest will
also be deferred until the next interest payment date on which funds are
available to the issuer.
Each period beginning on, and including, the issue date or any interest
payment date and ending on, but excluding, the next interest payment date is
called an interest period. An interest period that starts during the Revolving
Period or the Controlled Accumulation Period and ends during the Rapid
Amortisation Period or Regulated Amortisation Period will end on the originally
scheduled interest payment date. The first interest payment for the class A3
notes will be made on 15 January, 2000 for the interest period from and
including the closing date to but excluding 15 January, 2000.
Interest will stop accruing on any part of the principal amount
outstanding of a note from the date it is due to redeem unless, when it is
presented, payment of principal is improperly withheld or refused. If this
happens it will continue to bear interest in accordance with this condition,
both before and after any judgement is given, until whichever is the earlier of
the following:
* the day on which all sums due in respect of that note up to that
day are received by or on behalf of the relevant noteholder; and
* the day which is seven days after the principal paying agent or
the note trustee has notified the relevant class of noteholders,
either in accordance with number 14 or individually, that it has
received all sums due in respect of the relevant class of notes up
to that day, except to the extent that there is any subsequent
default in payment,
The rate of interest applicable to the notes for each interest period will
be determined by the agent bank on the following basis:
(1) on the quotation date for each class of note, the agent bank will:
determine the offered quotation to leading banks in the London interbank
market for the following:
* in the case of the class A3, class B and class C notes, one month
US$ deposits;
* in the case of the class A1 notes, one month sterling deposits;
and
* in the case of the class A2 notes, three month euro deposits.
In each case these will be determined by reference to the British Bankers
Association LIBOR Rates display as quoted on the Dow Jones/Telerate Screen No.
3750. If the Telerate Screen No. 3750 stops providing these quotations, the
replacement service for the purposes of displaying this information will be
used. If the replacement service stops displaying the information, any page
showing this information will be used, or, if there are more than one, the one
previously approved in writing by the Trustee; and determine the offered
quotation to leading banks in the euro-zone interbank market for three month
euro deposits in the case of the A2 notes. This will be determined by reference
to the EURIBOR Rates display as quoted on the Dow Jones/Telerate Screen No.
248. If the Telerate Screen No. 248 stops providing these quotations, the
replacement service for the purposes of displaying this information will be
used. If the replacement service stops displaying the information, any page
showing this information will be used, or, if there are more than one, the one
previously approved in writing by the Trustee;
in each case as at or about 11.00 a.m., London time, on that date. These
are called the screen rates for the respective classes;
(2) if, on any interest determination date, the screen rate is unavailable,
the agent bank will:
* request the principal London office of each of [*], [*], Barclays
Bank PLC and [*], or in the case of euros, euro-zone banks or any
duly appointed substitute reference bank(s) as may be appointed by
the issuer to provide the agent bank with its offered quotation to
leading banks of the
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equivalent of the screen rate on that interest determination date
in an amount that represents a single transaction in that market
at that time; and
* calculate the arithmetic mean, rounded upwards to four decimal
places or in the case of a euro quotation to the nearest one
hundred thousandth of a percentage point, of those quotations;
(3) if on any interest determination date the screen rate is unavailable and
only two or three of the reference banks provide offered quotations, the rate
of interest for that interest period will be the arithmetic mean of the
quotations as last calculated in (2) above; and
(4) if fewer than two reference banks provide quotations, the agent bank will
determine the arithmetic mean, rounded upwards to four decimal places or
in the case of a euro quotation to the nearest one hundred thousandth of
a percentage point, of the rates quoted by major banks in London, or for
euro in the euro-zone, selected by the agent bank at approximately 11.00
a.m. London time on the first day of the relevant interest period, to
leading European banks for a period equal to the relevant interest period
and in an amount that is representative for a single transaction in that
market at that time, for:
* in the case of the class A1 notes, loans in pounds sterling;
* in the case of the class A2 notes, loans in euro; and
* in the case of the class A3 notes, class B notes and the class C
notes, loans in US$.
The rate of interest for each interest period for the class A1 notes will
be the sum of:
* [*] per cent. per annum; and
* the screen rate or the arithmetic mean calculated to replace the
screen rate.
The rate of interest for each interest period for the class A2 notes will
be the sum of:
* [*] per cent. per annum; and
* the screen rate or the arithmetic mean calculated to replace the
screen rate.
The rate of interest for each interest period for the class A3 notes will
be the sum of:
* [*] per cent. per annum; and
* the screen rate or the arithmetic mean calculated to replace the
screen rate.
The rate of interest for each interest period for the class B notes will
be the sum of:
* [*] per cent. per annum; and
* the screen rate or the arithmetic mean calculated to replace the
screen rate.
The rate of interest for each interest period for the class C notes will
be the sum of:
* [*] per cent. per annum; and
* the screen rate or the arithmetic mean calculated to replace the
screen rate.
If the agent bank is unable to determine the screen rate or an arithmetic
mean to replace it, as described in (2) and (3), the rates of interest for any
interest period will be as follows:
* for the class A1 notes the rate will be the sum of [*] per cent.
per annum and the screen rate or arithmetic mean last determined
for the class A1 notes;
* for the class A2 notes the rate will be the sum of [*] per cent.
per annum and the screen rate or arithmetic mean last determined
for the class A2 notes;
* for the class A3 notes the rate will be the sum of [*] per cent.
per annum and the screen rate or arithmetic mean last determined
for the class A3 notes;
* for the class B notes the rate will be the sum of [*] per cent.
per annum and the screen rate or arithmetic mean last determined
for the class B notes; and
* for the class C notes the rate will be the sum of [*] per cent.
per annum and the screen rate or arithmetic mean last determined
for the class C notes.
The agent bank will, as soon as it can after the interest determination
date for each interest period, calculate the amount of interest payable on each
note for that interest period. The amount of interest will be calculated by
applying the rate of interest for that interest period to the Principal Amount
Outstanding of that
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note during that interest period, multiplying the product by the actual number
of days in that interest period divided by 360, in the case of the class A2
notes, the class A3 notes, the class B notes and the class C notes:
* in the case of the class A1, the nearest penny, half a penny being
rounded upwards;
* in the case of the class A2 notes, the nearest euro 0.01, half a
cent being rounded upwards; and
* in the case of the class A3 notes, the class B notes and the class
C notes, the nearest US$ 0.01, half a cent being rounded upwards.
On each interest payment date, the agent bank will determine the actual
amount of interest which will be paid on the notes on that interest payment
date and the amount of any shortfall on the notes for that interest period and
the amount of interest on any shortfall which will be paid on that interest
payment date. The amount of any interest on the shortfall will be calculated by
applying the relevant rate of interest for those notes plus a margin of 2 per
cent. per annum, to the sum of the shortfall and accrued interest on shortfall
from prior interest periods which remains unpaid, multiplying by the actual
number of days in the relevant interest period and dividing by 360, in the case
of the class A2 notes, the class A3 notes, the class B notes and the class C
notes:
* in the case of the class A1 notes, the nearest penny, half a penny
being rounded upwards;
* in the case of the class A2 notes, the nearest euro 0.01, half a
cent being rounded upwards; and
* in the case of the class A3 notes, class B notes and class C
notes, the nearest US$ 0.01, half a cent being rounded upwards.
If, on any interest payment date, the amount paid to the issuer by the MTN
issuer from the MTNs in the case of the A1 notes, or the amount received from
the swap counterparty in relation to the class A2 notes, class A3 notes, class
B notes or class C notes is insufficient to pay in full the amount of interest
due on the relevant class or sub-class of notes, any outstanding shortfall and
accrued interest on shortfall, due on that interest payment date, that amount
will be applied first to the payment of the interest due on the relevant class
or sub-class of notes, secondly to the payment of any outstanding shortfall and
thereafter to the payment of any accrued interest on shortfall for that class
or sub-class of notes.
The rates and amounts determined by the agent bank will be notified to the
issuer, trustee and paying agent and published in accordance with number 14 as
soon as possible after these parties have been notified.
The issuer, the paying agents, the note trustee, the reference banks, the
agent bank and the noteholders will be bound by the determinations properly
made under the interest provisions of the conditions and none of the reference
banks, the agent bank or the note trustee will be liable in connection with the
exercise or non-exercise by them of their powers, duties and discretions for
those purposes.
If the agent bank fails to make a determination or calculation required
under the conditions, the note trustee, or its appointed agent, without
accepting any liability for it, will make the determination or calculation in
accordance with the conditions. If this happens, the determination or
calculation will be deemed to have been made by the agent bank.
The issuer will ensure that there will be four reference banks while there
are notes outstanding.
6. Redemption and Purchase
The issuer is only entitled to redeem the notes as provided in paragraphs
(1), (2) and (3) below.
(1) Scheduled Redemption
Class A notes:
Unless previously purchased and cancelled or unless the Regulated
Amortisation Period or Rapid Amortisation Period has already started, all class
A notes will be redeemed on the interest payment date which falls in November
2002, which is called the series 99-1 scheduled redemption date, from amounts
in the Series 99-1 Issuer Account which, in the case of the class A2 and class
A3 notes, are paid to the swap counterparty. The payments will be made in no
order of preference between class A1, class A2 and class A3 notes but in the
proportion that the amount that their principal amount outstanding bears to the
total amount outstanding of all class A notes.
If, on the series 99-1 scheduled redemption date, there is a shortfall
between the amount in the Series 99-1 Issuer Account and the total amount
payable on the class A1 notes and, in the case of the class A2 notes and class
A3 notes, the amount due and payable to the swap counterparty under the euro
swap agreement and the class A3 dollar swap agreement respectively, then the
Rapid Amortisation Period will begin.
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Class B notes:
Unless previously purchased and cancelled or unless the Regulated
Amortisation Period or the Rapid Amortisation Period has already started, the
class B notes will be redeemed on the series 99-1 scheduled redemption date
from amounts paid to the swap counterparty from the Series 99-1 Issuer Account.
The payments will be made, only after payment in full of all principal due and
payable on the class A notes, in no order of preference and proportionately
between all class B notes:
If, on the series 99-1 scheduled redemption date, there is a shortfall
between the amount in the Series 99-1 Issuer Account, after payment of all
interest and principal due and payable on the class A notes, and the amount due
and payable to the swap counterparty under the class B dollar swap agreement,
then the Rapid Amortisation Period will begin.
Class C notes:
Unless previously purchased and cancelled or unless the Regulated
Amortisation Period or the Rapid Amortisation Period has already started, the
class C notes will be redeemed on the series 99-1 scheduled redemption date
from amounts paid to the swap counterparty to the issuer:
If, on the series 99-1 scheduled redemption date, there is a shortfall
between the amount in the Series 99-1 Issuer Account, after payment of all
interest and principal due and payable on the class A notes and the class B
notes, and the amount due and payable to the swap counterparty under the class
C dollar swap agreement, then the Rapid Amortisation Period will begin.
If the Rapid Amortisation Period begins as a result of there being
insufficient funds to repay principal and pay interest on the class A notes, as
described above, then on each interest payment date after that, the class A
notes will be redeemed in part, to the extent of amounts in the Series 99-1
Issuer Account as follows:
* with respect to interest, without preference between the class A1
notes, class A2 notes and class A3 notes, in the proportion that
the total of the amount of interest payable, in the case of the
class A1 notes, or, in the case of the class A2 notes and class A3
notes, the amounts payable to the swap counterparty under the euro
swap agreement and the class A3 dollar swap agreement,
respectively, to pay interest on the class A notes, bears to the
total amount payable from the Series 99-1 Issuer Account in
respect of interest on the class A notes; and
* with respect to principal, without preference between the class A1
notes, class A2 notes and class A3 notes, in the proportion that
the principal amount outstanding on the class A1 note, class A2
note or class A3 note bares to the total principal amount
outstanding of the relevant note;
until the earlier of the time when each class of notes has been paid in
full and [*] [200*].
If the Rapid Amortisation Period begins as a result of there being
insufficient funds to repay principal and pay interest on the class B notes or
the class C notes, as described above, then on each interest payment date after
that, the class B notes or the class C notes as applicable, will be redeemed in
part, to the extent of amounts payable by the swap counterparty from the Series
99-1 Issuer Account, in the proportion that their principal amount outstanding
bears to the total principal amount outstanding of the relevant class of note.
This will happen until the earlier of the time when each class of notes has
been paid in full and [*] [200*].
On each interest payment date, the agent bank shall determine the
following:
* the amount of each principal payment payable on each note; and
* the principal amount outstanding of each note of that class on the
first day of the next interest period, after deducting any
principal payment due to be made on each of that class of notes on
that interest payment date.
The amounts and dates determined by the agent bank will be notified to the
issuer, paying agents and note trustee and published in accordance with
condition 14 as soon as possible after these parties have been notified.
The issuer, the paying agents, the note trustee and the noteholders will
be bound by the determinations properly made under the redemption and purchase
provisions of the conditions and neither the agent bank nor the note trustee
will be liable in connection with the exercise or non-exercise by it of its
powers, duties and discretions for those purposes.
If the agent bank fails to make a determination under the conditions, the
note trustee shall calculate the principal payment or principal amount
outstanding in accordance with the conditions, and each of these determinations
or calculations shall be deemed to have been made by the agent bank. If this
happens, the determination will be deemed to have been made by the agent bank.
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The issuer, and/or related companies of it may buy notes at any price. Any
notes that are redeemed or purchased pursuant to these provisions shall be
cancelled at that time and may not be reissued or resold.
You are required, at its request, to sell all of your notes to Gracechurch
Card (Holdings) Limited, pursuant to the option granted to it by the note
trustee, on your behalf. The option is granted to acquire all of the notes,
plus accrued interest on them, for one penny per note, on the earlier of the
following:
* any date falling after the interest payment date in [*] November
200*; and
* in the event that the security is enforced, the date on which the
note trustee determines that the proceeds of that enforcement are
insufficient, after payment of all other claims ranking in
priority to the notes, to pay in full any amount due on the notes.
This is called the post maturity call option.
You acknowledges that the note trustee has the authority and the power to
bind you in accordance with the terms and conditions set out in the post
maturity call option and, by subscribing for your note(s), you agree to be
bound in this way.
7. Payments
Payments of principal and interest on your notes will be made only when
they are presented and, in the case of final redemption, provided that payment
is made in full, surrendered at the specified office of the paying agent by
transfer to a US dollar account.
All payments on your notes are subject to any applicable fiscal or other
laws and regulations. You will not be charged commissions or expenses on these
payments.
If the due date for payment of any amount on your notes is not a business
day in the place it is presented, you will not be entitled to payment of the
amount due in that place until the next business day in that place and you
shall not be entitled to any further interest or other payment as a result of
that delay.
If a paying agent makes a partial payment on your note, that paying agent
will endorse on that note, as applicable, a statement indicating the amount and
date of that payment.
Payments on your notes are subject to the operating rules of DTC,
Euroclear or Cedelbank, as applicable.
8. Taxation
Payments of interest and principal will be made without making any
deductions for any UK tax unless a deduction is required by the jurisdiction
which has power to tax. If a deduction for tax is made, the paying agent will
account to the relevant authority for the amount deducted. Neither the issuer
nor the paying agents are required to make any additional payments to
noteholders for any deductions made for tax.
9. Events of Default
If any of the following events occurs and is continuing it is called an
event of default.
* the issuer fails to pay any amount of principal on the notes
within 7 days of the date payment is due or fails to pay any
amount of interest on the notes within 15 days of the date payment
is due; or
* the issuer fails to perform or observe any of its other
obligations under the notes, the trust deed, the deed of charge or
the paying agency and agent bank agreement, other than any
obligation to pay any principal or interest on the notes, and,
except where that failure is incapable of remedy, it remains
unremedied for 30 days after the note trustee has given written
notice of it to the issuer, certifying that the default is, in its
opinion, materially prejudicial to the interests of the
noteholders; or
* a judgement or order for the payment of any amount is given
against the issuer and continues unsatisfied and unstayed for a
period of 30 days after it is given or, if a later date is
specified for payment, from that date; or
* a secured party and/or encumbrancer takes possession or a
receiver, administrative receiver, administrator, examiner,
manager or other similar officer is appointed, of the whole or any
part of the business, assets and revenues of the issuer or an
enforcement action is begun for unpaid rent or executions levied
against any of the assets of the issuer; or
* the issuer becomes insolvent or is unable to pay its debts as they
fall due;
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* an administrator or liquidator of the issuer or the whole or any
part of the business, assets and revenues of the issuer is
appointed, or an application for an appointment is made;
* the issuer takes any action for a readjustment or deferment of any
of its obligations or makes a general assignment or an arrangement
or composition with or for the benefit of its creditors or
declares a moratorium in respect of any of its indebtedness or any
guarantee of indebtedness given by it; or
* the issuer stops or threatens to stop carrying on all or any
substantial part of its business; or
* an order is made or an effective resolution is passed for the
winding up, liquidation or dissolution of the issuer; or
* any action, condition or thing at any time required to be taken,
fulfilled or done in order
(1) to enable the issuer lawfully to enter into, exercise its rights
and perform and comply with its obligations under and in respect
of the notes and the issuer related documents; or
(2) to ensure that those obligations are legal, valid, binding and
enforceable, except as that enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganisation or
other similar laws affecting the enforcement of the rights of
creditors generally and that that enforceability may be limited by
the effect of general principles of equity; or
* it is or will become unlawful for the issuer to perform or comply
with any of its obligations under or in respect of the notes or
the issuer related documents; or
* all or any substantial part of the business, assets and revenues
of the issuer is condemned, seized or otherwise appropriated by
any person acting under the authority of any national, regional or
local government; or
* the issuer is prevented by any person acting under the authority
of any national, regional or local government from exercising
normal control over all or any substantial part of its business,
assets and revenues,
If an event of default occurs then the note trustee may give an
enforcement notice or appoint a receiver if it chooses and if it is indemnified
to its satisfaction .
If an event of default occurs then the note trustee shall be bound to give
an enforcement notice if it is indemnified to its satisfaction and it is:
* required to by the swap counterparty;
* required to by holders of at least one-quarter of the aggregate
principal amount outstanding of the class A notes, if any remain
outstanding, and if none remain outstanding, the class B notes and
if none of these remain outstanding, the class C notes; or
* directed by an Extraordinary Resolution, as defined in the trust
deed, of holders of outstanding class A notes, and if there are
none, of holders of outstanding class B notes, and if there are
none, of holders of outstanding class C notes.
An enforcement notice is a written notice to the issuer declaring the
notes to be immediately due and payable. When it is given, the notes will
become immediately due and payable at their principal amount outstanding
together with accrued interest without further action or formality. Notice of
the receipt of an enforcement notice shall be given to the noteholders as soon
as possible. A declaration that the notes have become immediately due and
payable will not, of itself, accelerate the timing or amount of redemption of
the notes as described in number 6.
10. Prescription
Your notes or coupons will become void if they are not presented within
the time limit for payment. That time limit is ten years from the due date for
notes. If there is a delay in the principal paying agent receiving the funds,
the due date, for the purposes of this time limit, is the date on which it
notifies you, in accordance with number 14, that it has received the relevant
payment.
11. Replacement of Notes and Coupons
If your notes or coupons are lost, stolen, mutilated, defaced or
destroyed, you can replace them at the specified office of the principal paying
agent. You will be required to both pay the expenses of producing a replacement
and comply with the issuer's reasonable requests for evidence, security and
indemnity. You must surrender any defaced or mutilated notes before
replacements will be issued.
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12. Note Trustee and Agents
The note trustee is entitled to be indemnified and relieved from
responsibility in certain circumstances and to be paid its costs and expenses
in priority to your claims.
In the exercise of its powers and discretions under these conditions and
the trust deed, the note trustee will consider the interests of the noteholders
as a class and will not be responsible for any consequence to you individually
as a result of you being connected in any way with a particular territory or
taxing jurisdiction.
In acting under the paying agency and agent bank agreement, and in
connection with your notes or coupons, the paying agents and the agent bank act
only as agents of the issuer and the note trustee and do not assume any
obligations towards or relationship of agency or trust for or with you.
The note trustee and its related companies are entitled to enter into
business transactions with the issuer, Barclays Bank PLC or related companies
of either of them without accounting for any profit resulting from those
transactions.
The initial paying agents and their initial specified offices are listed
below. The issuer can, at any time, vary or terminate the appointment of any
paying agent or the agent bank and can appoint successor or additional paying
agents or a successor agent bank. If the issuer does this it must ensure that
it maintains the following:
* a principal paying agent;
* a paying agent, if and for so long as any of the Notes are listed
on the London Stock Exchange, in London; and
* an agent bank.
Notice of any change in the paying agents, their specified office or in
the agent bank shall be promptly given to you in accordance with Condition 14.
13. Meetings of Noteholders, Modification and Waiver, Substitution and
Addition.
(a) Meetings of Noteholders
The trust deed contains provisions for convening single and separate
meetings of each class of noteholders to consider matters relating to the
notes, including the modification of any provision of the conditions or the
trust deed. Any modification may be made if sanctioned by an extraordinary
resolution.
The quorum for any meeting convened to consider an extraordinary
resolution will be two or more persons holding or representing a clear majority
of the aggregate principal amount outstanding of the relevant class of notes --
and in the case of a separate meeting, the class A notes, the class B notes or
the class C notes, as the case may be -- for the time being outstanding.
Certain terms including, the date of maturity of the notes, any day for
payment of interest on the notes, reducing or cancelling the amount of
principal or the rate of interest payable in respect of the notes or altering
the currency of payment of the notes, require a quorum for passing an
extraordinary resolution of two or more persons holding or representing in
total not less than 75 per cent. of the total principal amount outstanding of
the relevant class of notes. These modifications are called "Basic Terms
Modifications".
Any extraordinary resolution duly passed shall be binding on all
noteholders, whether or not they are present at the meeting at which such
resolution was passed. The majority required for an extraordinary resolution
shall be 75 per cent. of the votes cast on that extraordinary resolution.
Modification and Waiver
The note trustee may agree, without the consent of the noteholders, (1) to
any modification -- except a Basic Terms Modification -- of, or to the waiver
or authorisation or any breach or proposed breach of, the notes or any other
related agreement, which is not, in the opinion of the note trustee, materially
prejudicial to the interests of the noteholders or (2) to any modification of
any of the provisions of the terms and conditions or any of the related
agreements which, in the opinion of the note trustee, is of a formal, minor or
technical nature or is to correct a manifest error. Any of those modifications,
authorisations or waivers will be binding on the noteholders and, unless the
note trustee agrees otherwise, shall be promptly notified by the issuer to the
noteholders in accordance with number 14.
Substitution and Addition
The note trustee may also agree to the substitution of any other body
corporate in place of the issuer as principal debtor under the trust deed and
the notes and in the case of such a substitution or addition the note trustee
may agree, without the consent of the noteholders, to a change of the law
governing the notes and/or
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the trust deed provided that such change would not in the opinion of the
trustee be materially prejudicial to the interests of the noteholders. Any such
substitution or addition will be promptly notified to the noteholders in
accordance with number 14.
Enforcement
At any time after the notes become due and repayable and without prejudice
to its rights of enforcement in relation to the security, the note trustee may,
at its discretion and without notice, institute such proceedings as it thinks
fit to enforce payment of the notes and coupons (including the right to
repayment of the notes together with accrued interest thereon) and shall be
bound to do so only if :
It has been so directed by an extraordinary resolution of the noteholders
of the relevant class. No extraordinary resolution of the class B noteholders
or class C noteholders or any request of the class B noteholders or class C
noteholders will be effective unless there is an extraordinary resolution of
the class A noteholders or a direction of the class A noteholders to the same
effect or none of the class A notes remain outstanding.
No noteholder or couponholder may institute any proceedings against the
issuer to enforce its rights under or in respect of the notes, the coupons or
the trust deed unless (1) the Note Trustee has become bound to institute
proceedings and has failed to do so within a reasonable time and (2) the
failure is continuing. Notwithstanding the previous sentence and
notwithstanding any other provision of the trust deed, the right of any
noteholder to receive payment of principal of and interest on its notes on or
after the due date for the principal or interest, or to institute suit for the
enfocement of payment of that interest or principal, may not be impaired or
affected without the consent of that noteholder, except as provided in the
paragraph above under "Modification and Waiver".
14. Notices
Notices to you will be deemed to have been validly given if published in a
leading English language daily newspaper in London -- which is expected to be
the Financial Times -- and will be deemed to have been given on the date of
first publication.
Any notices specifying a rate of interest, an interest amount, an amount
of shortfall or interest on it, principal payment or a principal amount
outstanding will be treated as having been duly given if the information
contained in that notice appears on the relevant page of the Reuters Screen or
other similar service approved by the note trustee and notified to you. The
notice will be deemed given when it first appears on the screen. If it cannot
be displayed in this way, it will be published as described in the previous
paragraph.
Copies of all notices given in accordance with these provisions will be
sent to the London Stock Exchange Company Announcements Office and Euroclear,
Cedelbank and DTC.
15. Currency Indemnity
You can be indemnified against losses you suffer from the use of an
exchange rate to convert sums recovered by you in litigation against the
issuer, which is different to the rate you ordinarily use. You must request
this indemnity in writing from the issuer.
This indemnity constitutes a separate and independent obligation of the
issuer and shall give rise to a separate and independent cause of action.
16. Governing Law and Jurisdiction
The notes, coupons, swap agreements and trust deed are governed by English
Law and the courts have non-exclusive jurisdiction in connection with the
notes.
The Swap Agreements
General
The only swap agreements that the issuer will enter into are the class A3
swap agreement, the euro swap agreement, the class B swap agreement and the
class C swap agreement -- called collectively the "swap agreements". There is
no separate interest rate cap agreement for any of the notes.
Dollar Swap Agreements
Under the class A3 dollar swap agreement between the issuer and the swap
counterparty, the issuer will pay to the swap counterparty:
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* an initial payment of dollars, on the closing date, in an amount
equal to the net proceeds of the class A3 notes; and
* on each transfer date after the closing date, in respect of
principal a sterling amount equal to A x B where:
(A) = the amount received by the issuer from the MTN issuer from
principal on the class A MTN; and
(B) = Sterling equivalent of the class A3 notes
--------------------------------------------------
Aggregate sterling equivalent of the class A notes
(B) each referred to as the "class A3 percentage."
The swap counterparty will pay to the issuer:
* an initial payment in sterling, on the closing date, in an amount
equal to the dollar amount of the net proceeds of the class A3
notes converted into sterling at the fixed exchange rate; and
* on each interest payment date after the closing date, sums in
dollars equal to the interest payable and principal repayable, if
any, to holders of the class A3 notes on that interest payment
date, as set out in the terms and conditions of the class A notes.
Under the class B swap agreement between the issuer and the swap
counterparty, the issuer will pay to the swap counterparty:
* an initial payment of dollars, on the closing date, in an amount
equal to the net proceeds of the class B notes; and
* on each transfer date after the closing date, the sterling amount
equal to the interest and principal received by the issuer from
the MTN issuer on the class B MTN.
The swap counterparty will pay to the issuer:
* an initial payment in sterling equal to the dollar amount of the
net proceeds of the class B notes converted into sterling at the
dollar fixed exchange rate; and
* on each interest payment date after the closing date, sums in
dollars equal to the interest payable and principal repayable, if
any, to holders of the class B notes, as set out in the terms and
conditions of the class B notes.
Under the class C swap agreement between the issuer and the swap
counterparty, the issuer will pay to the swap counterparty:
* an initial payment of dollars, on the closing date, in an amount
equal to the net proceeds of the class C notes; and
* on each transfer date after the closing date, the sterling amount
equal to the interest and principal received by the issuer from
the MTN issuer on the class C MTN.
The swap counterparty will pay to the issuer;
* an initial payment in sterling equal to the dollar amount of the
net proceeds of the class C notes converted into sterling at the
dollar fixed exchange rate; and
* on each interest payment date after the closing date, sums in
dollars equal to the interest payable and principal repayable, if
any, to holders of the class C notes, as set out in the terms and
conditions of the class C notes.
The dollar swap agreements provide that payments made under it are to be
reduced in the event that any amount due and payable to the issuer under the
class A MTN, the class B MTN or the class C MTN, as applicable, is deferred by
the MTN issuer under the terms of the relevant class of the MTNs. This is to
prevent that amount in dollars being received by the issuer before it receives
the corresponding amount payable under the relevant class of MTNs. The amount
in dollars will be increased for any interest payment date on which the
deferred amount is subsequently received by the issuer.
The dollar swap agreements will terminate on the November 2002 interest
payment date or, if that day is not a business day, on the next business day,
unless the relevant class of the MTNs has not been redeemed in full on the
series 99-1 scheduled redemption date, in which case the applicable dollar swap
agreement will terminate on the earlier of:
* the distribution date on which the relevant class of the MTNs are
redeemed in full;
* and the series 99-1 termination date; and
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* the occurrence of a swap termination event.
The fixed sterling to dollar exchange rate in the dollar swap agreements
will be L* per one dollar.
Euro Swap Agreement
Under the euro swap agreement between the issuer and the swap
counterparty, the issuer will pay to the swap counterparty:
* an initial payment of euros on the closing date in an amount equal
to the net proceeds of the class A2 notes;
* on any payment date after that a sterling amount equal to A x B
where:
(A) = any payment received by the issuer from the MTN issuer on
that interest payment date in respect of the Class A MTN at
that time; and
(B) = sterling amount for the class A2 notes
----------------------------------------------
aggregate sterling amount of the class A notes
The swap counterparty will pay to the issuer:
* an initial payment in sterling, on the closing date, equal to the
sterling amount of the net proceeds of the class A2 notes; and
* on each interest payment date after that, sums in euros equal to
the interest payable and principal repayable, if any, to holders
of the class A2 notes on that interest payment date, in accordance
with the terms and conditions of the class A notes.
* the euro swap agreement provides that payments made under it are
to be reduced in the event that any amount due and payable to the
issuer in respect of the Class A MTN is deferred by the MTN issuer
under the terms of that Class A MTN. This is to prevent that euro
amount being received by the issuer before it receives the
corresponding amount payable under the Class A MTN. The euro
amount shall be increased in respect of any interest payment date
on which the deferred amount is subsequently received by the
issuer.
The euro swap agreement shall terminate on [*] or, if that day is not a
business day, on the next business day, unless the Class A MTN have not been
redeemed in full on the scheduled redemption date, in which case the euro swap
agreement shall terminate on the earlier of:
* the interest payment date after the date on which the Class A MTN
is redeemed in full; and
* the distribution date following in [*].
Common Provisions of the Swap Agreements
The swap agreements provide that if the long-term rating of the swap
counterparty falls below either AA- by S&P or Aa3 by Moody's, then within 30
days following that event the swap counterparty will be required to take one of
the following steps:
* Post collateral equal to the amount necessary to defease the
obligation of the swap counterparty, as confirmed in writing by
the rating agencies;
* Within thirty days arrange for a substitute swap counterparty,
having long-term unsecured debt ratings of AAA by S&P and Aaa by
Moody's; or
* Arrange for the appointment of a joint and several swap
counterpartyr, whose long-term unsecured debt ratings, when
combined with the long-term unsecured debt ratings of the swap
counterparty, are assessed as sufficient to maintain the then-
current ratings of the class A notes.
Early Termination
The swap agreements may be terminated early in the following circumstances
- -- each called a "swap termination event":
* At the option of one party, if there is a failure by the other
party to pay any amounts due under the swap agreement;
* If an event of default under the notes occurs or if the notes are
required to be redeemed in full following the occurrence of a Pay
Out Event;
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* Upon the occurrence of an insolvency of either party, merger
without an assumption of the obligations under the swap
agreements, or changes in law resulting in illegality;
* if as a result of a change in applicable law, withholding taxes
would be imposed by any jurisdiction on any payments made or
required to be made by the swap counterparty under the swap
agreement and there are no reasonable measures that the swap
counterparty can take to avoid their imposition; and
* the issuer determines that the note trustee or the paying agent
has or will become obligated to deduct or withhold amounts from
payments on the related class of notes to be made to any of the
noteholders on the next interest payment dates, for any tax
assessment or other governmental charge imposed by the United
Kingdom or any political subdivision or taxing authority of the
United Kingdom on the payments as a result of any change in its
laws or regulations or rulings, or any change in official position
regarding the application or interpretation of its laws,
regulations or rulings, which change or amendment becomes
effective on or after the date the notes are issued, and there are
no reasonable measures the issuer can take to avoid the tax or
assessment.
The swap agreements may be terminated following a swap termination event
described in either of the last two bullet points only if the issuer is
directed to terminate the swap agreements by an Extraordinary Resolution of the
holders of the class A notes or, if there are no class A notes outstanding, the
holders of the class B notes or, if there are no class B notes outstanding, the
holders of the class C notes.
Upon an early termination of the swap agreements, the issuer or the swap
counterparty may be liable to make a termination payment to the other. This
termination payment will be calculated and made in sterling. The amount of any
termination payment will be based on the market value of the swap agreement
based on market quotations of the cost of entering into a swap transaction with
the same terms and conditions that would have the effect of preserving the
respective full payment obligations of the parties. Any such termination
payment could, if the sterling/dollar exchange rates have changed
significantly, be substantial.
If there is an event of default by the swap counterparty under one of the
swap agreements, then any termination payment to be paid to the swap
counterparty by the issuer under the early termination provisions of the swaps
will be subordinated to any claims of the noteholders.
Taxation
Neither the issuer nor the swap counterparty is obliged under the swap
agreements to gross up if withholding taxes are imposed on payments made under
the swap agreements.
If any withholding tax is imposed on payments due to the issuer on the
Class A MTN or payments by the issuer under the swap agreements, the swap
counterparty will be entitled to deduct amounts in the same proportion from
subsequent payments due from it. If that happens, payments on the notes will be
reduced in proportion to the amount so deducted.
If any withholding tax is imposed on payments due by the swap counterparty
under the swap agreements the issuer will not be entitled to deduct amounts
from subsequent payment due from it and payments on the notes will be reduced
in proportion to the amount so withheld.
The Medium Term Notes
On the closing date the MTN issuer will issue three interest bearing MTNs
to the issuer. These will be the class A MTN, the class B MTN and the class C
MTN. Each MTN will mature for redemption on the scheduled redemption date for
series 99-1. The Bank of New York, acting out of its London Branch at One
Canada Square, Canary Wharf, London E14 5AL will act as trustee, custodian,
issue agent, registrar and principal paying agent in relation to the series 99-
1 MTNs.
Under the terms of the security trust deed and mtn cash management
agreement, Barclays, acting through its corporate lending division at 54
Lombard Street, London, EC3P 3AH, will be appointed as initial MTN cash
manager.
Application has been made to list the MTNs on the London Stock Exchange.
The MTNs will be issued on a non-syndicated continuous basis in series.
MTNs issued in respect of any series may differ as to principal, interest and
recourse to security. Each series must be constituted by a supplemental deed to
the security trust deed and mtn cash management agreement that will also
specify any enhancement provider for that series and whether that enhancement
provider is to be a beneficiary. The transferor beneficiary may direct the
receivables trustee to create one or more new series within the receivables
trust by making an acquisition.
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Each new series may differ from any other series in its principal terms
and the manner, timing and amounts of distributions made to beneficiaries
within it. The MTN issuer may, by executing a further series trust supplement,
become an investor beneficiary in that new series. The MTN issuer shall not
issue any further MTNs in respect of an existing series without the prior
consent of the holders of the existing MTNs in that series, unless the further
MTNs are fungible with the existing ones.
The MTN issuer will pay the proceeds of the MTNs to the receivables
trustee so that it can acquire separate undivided beneficial interests in the
receivables trust for each class of MTN. See "The Receivables Trust" and "Use
of Proceeds". The initial principal amount of each undivided beneficial
interest acquired is the Investor Interest for each class of investor
certificates. These interests will be represented by an investor certificate
for each class, which will be issued to the MTN issuer by the receivables
trustee. See "Series 99-1: General".
The receivables trustee will use the proceeds of the MTNs paid to it,
together with monies paid to it by other beneficiaries and other trust
property, to accept an offer to assign by the transferor all present and future
amounts arising on the designated accounts. By becoming the initial investor
beneficiary of the receivables trust, the MTN issuer will be entitled to
receive payment, at specified times, of a portion of collections of the
receivables assigned by the transferor to the receivables trustee. These
payments will be used by the MTN issuer in and towards redemption of, first,
the class A MTN, second, the class B MTN and, third the class C MTN.
The ability of the MTN issuer to meet its obligations to pay principal of
and interest on the MTNs will be entirely dependent on the receipt by it of
funds from the receivables trust.
The MTN issuer and the security trustee will have no recourse to Barclays
other than:
* against Barclays as transferor under the receivables securitisation
agreement for any breach of representations and obligations in respect of
the receivables; and
* against Barclays as mtn cash manager under the security trust deed and
mtn cash management agreement for any breach of obligations of the mtn
cash manager.
The obligations of the MTN issuer and certain other rights of the MTN
issuer under each series of MTNs and under the documents relating to them, will
be secured under the security trust deed and mtn cash management agreement, by
security interests over the investor certificates. The security for each series
will be granted by the MTN issuer in favour of the security trustee. If the net
proceeds of the enforcement of security for a series following a mandatory
redemption -- after meeting the expenses of the trustee, the paying agents, the
custodian and any receiver -- are insufficient to make all payments due on the
MTNs of that series, the assets of the MTN issuer securing other series of MTNs
will not be available for payment of that shortfall.
If the [deed of charge] is enforced, the monies paid to the MTN issuer by
the receivables trustee on each transfer date will be applied:
* first to meet payments due to any receiver appointed under it or to the
security trustee and to meet other fees, costs and amounts due to the
security trustee; then
* to the extent not met above, to meet the fees, costs and expenses of the
MTN issuer and the security trustee; then
* to meet payments of principal and interest on the class A MTNs, then on
the class B MTNs and finally on the class C MTNs.
The interest rate on the MTNs will be determined by the programme agent
bank in accordance with the mtn conditions. This is done by reference to the
screen rate or any other rate set by the programme agent bank for one-month
deposits for pounds sterling plus a margin. The margin will be [*] per cent.
per annum for the class A MTN, [*] per cent. per annum for the class B MTN and
[*] per cent. per annum for the class C MTN. The interest rate for the first
interest period will be determined on the closing date. Interest in respect of
the MTNs will be payable in arrear in sterling on each interest payment date.
If any withholding or deduction for any taxes, duties, assessments or
government charges is imposed, levied, collected, withheld or assessed on
payments of principal or interest on the MTNs by Jersey, Channel Islands or the
United Kingdom or any political subdivision or authority in or of them having
power to tax, neither the MTN issuer nor the programme paying agents will be
required to make any additional payments to holders of the MTNs for that
withholding or deduction.
The occurrence and continuation of the following events is called an MTN
event of default:
* the MTN issuer fails to pay any amount of principal of the MTNs within 7
days of the due date for its payment or fails to pay any amount of
interest on the MTNs within 15 days of its due date; or
* the MTN issuer fails to perform or observe any of its other obligations
under the MTNs, the MTN trust supplement, or the security trust deed and
mtn cash management agreement and, except where the failure is incapable
of remedy, it remains unremedied for 30 days after the security trustee
has given
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written notice to the MTN issuer, certifying that the failure is, in the
opinion of the security trustee, materially prejudicial to the interests
of the mtn holders; or
* a judgement or order for the payment of any amount is given against the
MTN issuer and continues unsatisfied and unstayed for a period of 30 days
after the date it is given or the date specified for payment, if later;
or
* a secured party takes possession or a receiver, administrative receiver,
administrator, examiner, manager or other similar officer is appointed,
of the whole or any part of the undertaking, assets and revenues of the
MTN issuer or a distress or execution is levied; or
* the MTN issuer becomes insolvent or is unable to pay its debts as they
fall due or an administrator or liquidator of the MTN issuer or the whole
or any part of its undertaking, assets and revenues is appointed, or
application for any appointment is made, or the MTN issuer takes any
action for a readjustment or deferment of any of its obligations or makes
a general assignment or an arrangement or composition with or for the
benefit of its creditors or declares a moratorium in respect of any of
its indebtedness or any guarantee of indebtedness given by it or ceases
or threatens to cease to carry on all or any substantial part of its
business; or
* an order is made or an effective resolution is passed for the winding up,
liquidation or dissolution of the MTN issuer; or
* any action, condition or thing at any time required to be taken,
fulfilled or done in order to enable the MTN issuer lawfully to enter
into, exercise its rights and perform and comply with its obligations
under and in respect of the MTNs and the documents relating to them or to
ensure that those obligations are legal, valid, binding and enforceable,
except as the enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganisation or other similar laws affecting
the enforcement of the rights of creditors generally and as that
enforceability may be limited by the effect of general principles of
equity; or
* it is or will become unlawful for the MTN issuer to perform or comply
with any of its obligations under or in respect of the MTNs or the
documents relating to them; or
* all or any substantial part of the undertaking, assets and revenues of
the MTN issuer is condemned, seized or otherwise appropriated by any
person acting under the authority of any national, regional or local
government or the MTN issuer is prevented by any of these people from
exercising normal control over all or any substantial part of its
undertaking, assets and revenues,
If an mtn event of default occurs then the security trustee may give an
enforcement notice if it chooses and if it is indemnified to its satisfaction .
If an mtn event of default occurs then the security trustee shall be bound
to give an enforcement notice if it is indemnified to its satisfaction and it
is:
* required to by holders of at least one-quarter of the aggregate principal
amount outstanding of the class A MTNs, if any remain outstanding, and if
none remain outstanding, the class B MTNs and if none of these remain
outstanding, the class C MTNs; or
* directed by an Extraordinary Resolution, as defined in the security trust
and cash management deed, of holders of outstanding class A MTNs, and if
there are none, of holders of outstanding class B MTNs, and if there are
none, of holders of outstanding class C MTNs.
An MTN enforcement notice is a written notice to the MTN issuer declaring
the MTNs to be immediately due and payable. When it is given, the MTNs will
become immediately due and payable at their principal amount outstanding
together with accrued interest without further action or formality. Notice of
the receipt of an MTN enforcement notice shall be given to the MTN holders as
soon as possible. A declaration that the MTNs have become immediately due and
payable will not, of itself, accelerate the timing or amount of redemption of
the MTNs.
When reference is made to the MTN cash manager it includes any successor
to Barclays as MTN cash manager. The security trust deed and mtn cash
management agreement provides that, as MTN cash manager, Barclays will service
and administer the Series 99-1: Distribution Account.
Barclays, and any successor MTN cash manager to the MTN issuer, will be
entitled to receive the fee for acting as MTN cash manager, payable by the MTN
issuer from amounts received as costs and expenses for the MTN issuer from the
Series 99-1 Distribution Account.
The MTN cash manager may not resign, apart from in certain circumstances.
The resignation of the MTN cash manager shall only become effective once a
replacement has assumed all of the responsibilities of the MTN cash manager set
out in the security trust deed and mtn cash management agreement.
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Material Legal Aspects of the Receivables
Consumer Credit Act 1974
A significant number of the credit transactions that occur on a designated
account will be for items of credit extended to a cardholder for an amount up
to L25,000. The Consumer Credit Act 1974 applies to these transactions and
therefore to each card agreement establishing each designated account. This has
certain consequences for the designated accounts, including the following:
Enforcement of improperly executed or modified card agreements
If a credit or charge card agreement has not been executed or modified in
accordance with the Consumer Credit Act, it may be unenforceable against a
cardholder without a court order -- and sometimes may be completely
unenforceable. In common with other UK credit and charge card issuers, some of
Barclaycard's credit and charge card agreements and some of the transactions
that occur on the designated accounts do not comply with the Consumer Credit
Act or other consumer protection legislation. As a result, these agreements
will be unenforceable by Barclaycard against the cardholders without a court
order and could be completely unenforceable. The transferor gives no guarantee
that a court order could be obtained if required. Barclaycard estimates that
less than 1% of the aggregate principal receivables in the designated accounts
on the cut-off date will be completely unenforceable. Barclaycard does not
anticipate any material increase in the percentage of these receivables in the
securitised portfolio. The accounts that do not comply with the Consumer Credit
Act are still legal, valid and binding obligations of the relevant cardholder
and it will still be possible to collect payments and demand arrears from
cardholders willing to pay their debt. However, losses arising on these
accounts will be written off and borne by the investor beneficiary and
transferor beneficiary based on their interests in the receivables trust.
Liability for supplier's misrepresentation or breach of contract
Transactions involving the use of a credit or charge card in the United
Kingdom may constitute transactions under debtor-creditor-supplier agreements.
A debtor-creditor-supplier agreement includes an agreement where the creditor,
with knowledge of its purpose, advances funds to finance the purchase by the
debtor of goods or services from a supplier.
Section 75 of the Consumer Credit Act provides that, if the supplier is in
breach of the contract -- whether such contract is express or implied by law --
between the supplier and a cardholder in a debtor-creditor-supplier agreement
or if the supplier has made a misrepresentation about that contract, the
creditor may also be liable to the cardholder for the breach or
misrepresentation. The liability of the transferor for a designated account is
called a "Transferor Section 75 Liability". In these circumstances, the
cardholder may have the right to reduce the amount owed to the transferor under
his or her credit or charge card account. This right would survive the sale of
the receivables to the receivables trustee. As a result, the receivables
trustee may not receive payments from cardholders that it might otherwise
expect to receive. As a result, the receivables trustee may not receive the
full amount otherwise owed by a cardholder. However, the creditor will not be
liable where the cash price of the item or service supplied concerning the
claim is less than L100 or greater than L30,000.
The receivables trustee has agreed to indemnify the transferor for any
loss suffered by the transferor arising from any claim under section 75 of the
Consumer Credit Act. This indemnity cannot exceed the original outstanding
principal balance of the affected charges on the designated account.
The receivables trustee's Indemnity will be payable from excess spread on
the receivables. Any amounts that Barclaycard recovers from the supplier will
reduce Barclaycard's loss for purposes of the receivables trustee's indemnity.
Barclaycard will have rights of indemnity against suppliers under section 75 of
the Consumer Credit Act. Barclaycard may also be able to charge-back the
transaction in dispute to the supplier under the operating regulations of VISA
or Mastercard.
If Barclaycard's loss for purposes of the receivables trustee's indemnity
exceeds the excess spread available to satisfy the loss, the amount of the
excess will reduce the Transferor Interest accordingly.
Transfer of Benefit of Receivables
The transfer by the transferor to the receivables trustee of the benefit
of the receivables is governed by English law and takes effect in equity only.
Notice to the cardholders of the assignment to the receivables trustee
would perfect the legal title of the receivables trustee to the receivables.
The receivables trustee has agreed that notice will not be given to
cardholders, or to the providers of any guarantee or insurance policy for the
obligations of cardholders, except when required to enforce a receivable. The
lack of notice has several legal consequences.
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Until notice is given to the cardholders, each cardholder will discharge
his or her obligations under the designated account by making payment to the
transferor. Notice to cardholders would mean that cardholders should no longer
make payment to the transferor as creditor under the card agreement but should
instead make payment to the receivables trustee as assignee of the receivables.
If notice is given, and a cardholder ignores it and makes payment to the
transferor for its own account, that cardholder would nevertheless still be
bound to make payment to the receivables trustee. The transferor, having
transferred the benefit of the receivables to the receivables trustee, is the
bare trustee of the receivables trustee for the purposes of the collection of
the receivables that are the property of the receivables trust and is
accountable to the receivables trustee accordingly.
Before the insolvency of the transferor, until notice is given to a
cardholder, equitable set-offs may accrue in favour of that cardholder against
his or her obligation to make payments under the card agreement to the
transferor. These rights of set-off may result in the receivables trustee
receiving less monies than anticipated from the receivables.
The transfer of the benefit of receivables to the receivables trustee has
been and will continue to be subject both to any prior equity interest that
have arisen in favour of the cardholder and to any equity interest that may
arise in the cardholder's favour after the assignment. Where notice of the
assignment is given to a cardholder, certain rights of set-off may not arise
after the date of the notice.
Under the terms of the receivables securitisation agreement, the
transferor represents that each receivable assigned to the receivables trust is
an eligible receivable -- unless the receivable is specified as being an
ineligible receivable. The eligibility criteria include that each receivable
constitutes the legal, valid and binding obligations of the cardholder
enforceable -- unless they are not in compliance with the Consumer Credit Act
in which case they may only be enforceable with a court order and, in a small
number of cases, may be unenforceable -- against the cardholder in accordance
with its terms. They also include that each receivable is not, save as
specifically contemplated by any rule of English law, currently subject to any
defence, dispute, set-off or counterclaim or enforcement orders apart from in
the limited cases described in the previous sentence.
Notice to the cardholder would perfect the transfer so that the
receivables trustee would take priority over any interest of a later
encumbrancer or transferee of the transferor's rights who has no notice of the
transfer to the receivables trustee.
Notice to the cardholder would prevent the card agreement from being
amended by the transferor or the cardholder without the consent of the
receivables trustee.
Lack of notice to the cardholder means that, for procedural purposes, the
receivables trustee will have to join the transferor as a party to any legal
action that the receivables trustee may want to take against any cardholder.
United Kingdom Taxation Treatment Of The Notes
Overview
UK legal advisers, Clifford Chance, have filed an opinion that the
following summary of UK tax considerations for holders of the notes, is true in
all material respects in relation to the matters expressly addressed.
The comments below are of a general nature based on current United Kingdom
law and practice. They relate only to the position of persons who are the
absolute beneficial owners of their notes and may not apply to certain classes
of persons such as dealers who carry on a trade in the UK, but otherwise will,
subject to the following paragraph, apply to US holders who beneficially own
the notes and coupons.
A person who owns the notes as trustee, nominee or otherwise on behalf of
another person will not be regarded as the absolute beneficial owner thereof.
These comments do not necessarily apply where the notes are deemed for UK
tax purposes to be the income of another person, for example where a person
ordinarily resident in the UK transfers assets to a non-resident company for
the purpose of avoiding UK tax.
It is suggested that any noteholders who are in doubt as to their position
consult their professional advisers.
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Taxation of US Residents
As discussed in more detail below, a US holder who is not resident in the
UK for UK tax purposes may obtain payment of interest on their notes without
deduction of tax if and for so long as the notes are quoted Eurobonds, if
either:
* he obtains payment on the notes from a recognised clearing system, which
has received the payments without deduction of UK tax, otherwise than
through a collecting agent in the UK, or;
* if payment is made by or through a paying agent in the UK, or through a
collecting agent in the UK, has filed or procured that a valid
declaration has been filed with the appropriate agent that he is entitled
to receive interest on his notes to be paid with no United Kingdom tax
deducted, because he is the absolute beneficial owner of the interest on
his notes and the notes to which it relates and he is not resident in the
UK for UK tax purposes.
Definitive notes will be in registered form and therefore will not
constitute quoted Eurobonds. Interest on definitive notes will be subject to
deduction of tax at the lower rate, currently 20%, unless relief is available
under the terms of an applicable double tax treaty.
Under the terms of the Convention of 31 December 1975 between the United
Kingdom and the United States of America -- called "the Convention" -- a person
who is a US resident for the purposes of the Convention will not be subject to
UK tax on any coupon beneficially owned by him, unless he carries on business
in the UK through a permanent establishment situated in the UK, or performs in
the UK independent personal services from a fixed base situated therein, and
the notes are effectively connected with such permanent establishment or fixed
base, or in certain other circumstances specified in the Convention where
relief is not available.
A US noteholder who is an individual will not be subject to United Kingdom
tax on any gain on any disposal of the notes unless they are held by or for a
trade, profession or vocation carried on by him through a branch or agency in
the UK -- subject to any relief which may be available under the Convention or
which may be available under UK law.
Taxation of Interest Paid
Under current Inland Revenue practice, the notes will be treated as
"quoted Eurobonds" -- as defined in Section 124 of the Income and Corporation
Taxes Act 1988 -- so long as they are represented by the global notes in bearer
form and are listed on a recognised stock exchange within the meaning of
Section 841 of the Income and Corporation Taxes Act 1988. The London Stock
Exchange is recognised for this purpose. Therefore, so long as the notes are
represented by global notes in bearer form and continue to be listed on a
recognised stock exchange and held within a recognised clearing system,
payments of interest on the notes by any paying agent may, under current law
and practice, be made without withholding or deduction for or on account of
United Kingdom income tax where:
* payment is made direct to the recognised clearing system; or
* in a case where payment is made to, or at the direction of, a depositary
for the recognised clearing system the paying agent obtains a valid
declaration PA3 from the depositary; or
* the paying agent has obtained a notice from the Inland Revenue directing
the paying agent to pay the interest with no tax deducted.
For the purposes of Section 124 of the Income and Corporation Taxes Act
1988, DTC, Euroclear and Cedelbank have been designated as recognised clearing
systems.
This paragraph will not apply if the notes cease to be represented by the
global notes in bearer form. In all other cases, including if definitive notes
are issued, interest will be paid under deduction of the United Kingdom lower
rate income tax -- currently at the rate of 20 per cent. -- subject to any
direction to the contrary by the Inland Revenue pursuant to the provisions of
any appropriate double taxation treaty. If interest is paid under deduction of
United Kingdom income tax, neither the issuer nor any paying agent will be
obliged to pay any additional amount in respect of the notes.
Where a person in the United Kingdom in the course of a trade or
profession:
* by means of coupons, warrants or bills of exchange, collects or
secures payment of or receives interest on the notes which are
quoted Eurobonds for a noteholder; or
* arranges to collect or secure payment of interest on the notes
which are quoted Eurobonds for a noteholder; or
* acts as a custodian of the notes and receives interest on the
notes or directs that interest on the notes is paid to another
person or consents to that payment; or
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- other than solely by clearing a cheque or arranging for the clearing of
the cheque -- that person, called the "collecting agent", will be required to
withhold United Kingdom income tax at the lower rate -- currently 20 per cent.,
subject to certain exceptions, including the following:
* the notes are held in a recognised clearing system and either:
(1) the collecting agent pays or accounts for the interest directly to
the recognised clearing system; or
(2) in a case where payment is made to, or at the direction of, a
depositary for the recognised clearing system, the collecting
agent obtains a valid declaration CA3 from the depositary; or
(3) the collecting agent acts as a depositary for the recognised
clearing system; or
* the person beneficially entitled to the interest owns the notes
and is not resident in the United Kingdom and the collecting agent
either:
(1) holds a valid declaration CA1 from that person; or
(2) holds a valid declaration CA2 from a person -- other than a
beneficial owner of the notes -- to whom the interest is payable
or who is entitled to arrange for the interest to be collected
without deduction of United Kingdom tax and who is not a
collecting agent in the United Kingdom; or
* the interest is payable to trustees of certain trusts, -- called
"qualifying discretionary and accumulation trusts", where essentially
neither the trustees nor the beneficiaries are resident in the United
Kingdom and the collecting agent has obtained a valid declaration CA1
from the trustee; or
* the person beneficially entitled to the interest is eligible for certain
reliefs from tax for the interest -- for example, charities or pension
funds -- and the collecting agent has obtained a valid declaration CA1
from that person; or
* the collecting agent has obtained a notice from the Inland Revenue
directing the collecting agent to pay the interest with no tax deducted.
Any declaration made as referred to above will not have effect in relation
to any given interest payments or receipts where:
* the person who made the declaration has notified the paying agent or
collecting agent that the declaration does not apply, or has ceased to
apply, to the payments or receipts in question; or
* the paying agent or collecting agent has reason to believe that the
declaration is or has become incorrect as regards the relevant payments
or receipts; or
* the paying agent or collecting agent has received notice from the Inland
Revenue directing that the relevant payments or receipts arising after a
specified date are chargeable payments or receipts.
Interest on the notes will have a United Kingdom source and accordingly
will be within the charge to United Kingdom tax even if paid without
withholding or deduction except that exemption from or reduction in any United
Kingdom tax payable on the interest might be available in appropriate
circumstances under the provisions of an applicable double taxation convention.
By way of exception to the charge described in the paragraph right above,
interest on the notes received without deduction or withholding for United
Kingdom income tax will not be chargeable to United Kingdom income tax in the
hands of a noteholder who is not resident for tax purposes in the United
Kingdom unless that holder carries on a trade, profession or vocation in the
United Kingdom through a United Kingdom branch or agency in connection with
which the interest is received or to which the Notes are attributable. There
are exemptions for interest received by certain categories of agent -- such as
some brokers and investment managers.
Proposed European Directive on the Taxation of Savings
In May 1998, the European Commission presented to the Council of Ministers
of the European Union a proposal to oblige member states to adopt either a
withholding tax system or an information reporting system for interest,
discounts and premiums. It is unclear whether this proposal will be adopted,
and if it is adopted, whether it will be adopted in its current form. The
withholding tax system would require a paying agent established in a member
state to withhold tax at a minimum rate of 20 percent. from any interest,
discount or premium paid to an individual resident in another member state,
unless the individual presents a certificate obtained from the tax authorities
of the member state in which the individual is resident confirming that those
authorities are aware of the payment due to that individual. The information
reporting system would require a member state to supply, to other member
states, details of any payment of interest, discount or premium made by paying
agents within its jurisdiction to an individual resident in another member
state. A member state would be free to choose which of these two systems to
adopt. For these purposes, the term paying agent is widely
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defined and includes an agent who collects interest, discounts or premiums on
behalf of an individual beneficially entitled thereto. If this proposal is
adopted, it will not apply to payments of interest, discounts and premiums made
before 1 January 2001.
Neither the issuer nor any paying agent is not required to make any
payments to noteholders to compensate them for any withholding tax imposed on
payments under the notes.
Ownership and Disposal, Including Redemption, of the Notes by United Kingdom
Corporation Tax Payers
Noteholders which are companies within the charge to United Kingdom
corporation tax -- other than authorised unit trusts -- will normally be taxed
on their returns from the notes, including interest and returns attributable to
movements in value, whether income or capital in nature, as income, which is
calculated in accordance with an authorised accruals or mark-to-market basis of
accounting. Relief may be available for related expenses on a similar basis.
Accrued income scheme
On transfer of a note, a noteholder who is not liable to corporation tax
and who is resident or ordinarily resident in the United Kingdom or carrying on
a trade in the United Kingdom through a branch or agency to which that note is
attributable, may be chargeable to UK income tax on an amount treated, by rules
known as the accrued income scheme contained in Chapter II or Part XVII of the
ICTA, as representing interest accrued on the note from the last interest
payment date to the time of transfer.
Taxation of capital gains
A disposal of a note by a noteholder who is not liable to corporation tax
and who is resident or ordinarily resident in the United Kingdom or who carries
on a trade, profession or vocation in the United Kingdom to which that note is
attributable, may give rise to a chargeable gain or allowable loss for the
purposes of the taxation of capital gains. However in calculating any gain or
loss of this sort the consideration for disposal of the note will be reduced by
any amount on which the noteholder is chargeable to income tax on the transfer
of the note under the accrued income scheme as described above.
Stamp Duty and Stamp Duty Reserve Tax
No United Kingdom stamp duty or stamp duty reserve tax is payable on the
issue of the global notes or on the issue or transfer of a note in definitive
form.
Taxation of the Receivables Trustee
The opinion of UK tax advisers to be delivered before closing will confirm the
following:
* the receivables trustee will have no United Kingdom tax
liabilities apart from a liability to United Kingdom income tax or
corporation tax on any amounts, such as trustee fees, which are
paid to the receivables trustee for its own benefit; and
* accordingly, the receivables trustee will have no liability to
United Kingdom tax in relation to amounts which it receives on
behalf of the MTN issuer or amounts which it is obliged to pay to
the MTN issuer.
The confirmations above are based on assumptions that amongst other things:
* all persons who are beneficiaries under the receivables trust at
any time will be companies within the charge to United Kingdom
corporation tax; and
* the receivables trustee will not enter into any transactions other
than acting as trustee of the receivables trust.
United States Federal Income Tax Consequences
Overview
The following summary describes the material United States federal income
tax consequences of acquiring, holding and disposing of the class A3 notes and
class B notes. This summary has been prepared and reviewed by Orrick,
Herrington & Sutcliffe LLP, special United States federal income tax counsel to
the Issuer -- called "special U.S. tax counsel".
This summary does not discuss all aspects of United States federal tax
law. In particular, except as specifically indicated in this summary, it
addresses only purchasers in the original offering who hold class A3
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notes and/or class B notes as capital assets within the meaning of Section 1221
of the United States Internal Revenue Code of 1986, called the "Code". It does
not address special United States federal income tax considerations that may be
important to particular investors in light of their individual investment
circumstances or to certain types of investors subject to special tax rules --
for example, financial institutions, insurance companies, tax-exempt
institutions, persons whose functional currency is not the United States
dollar, dealers in securities or currencies, non-U.S. persons, or investors
holding the notes as part of a conversion transaction, as part of a hedge or
hedging transaction, or as a position in a straddle for tax purposes, or
persons whose functional currency, as defined in Code Section 985, is not the
US dollar.
Further, this discussion does not address alternative minimum tax
consequences or any tax consequences to holders of interests in a note. In
addition, this summary does not discuss any foreign, state, local or other tax
considerations. This summary is based on the Code, and administrative and
judicial authorities, all as in effect on the date of this prospectus and all
of which are subject to change, possibly on a retroactive basis.
Special U.S. tax counsel has prepared and reviewed this summary of
material United States federal income tax consequences, and is of the opinion
that it is correct in all material respects. Special U.S. tax counsel also
opines that, as described below, each of the receivables trust, the MTN issuer
and the issuer will not be treated as engaged in a trade or business within the
United States for U.S. Federal income tax purposes. Except as set forth in the
preceding sentences, special U.S. tax counsel will render no other opinions
about the acquisition, holding and disposition of the notes. Further, an
opinion of special U.S. tax counsel is not binding on the IRS or the courts,
and no ruling on any of the consequences or issues discussed below will be
sought from the IRS. Moreover, there are no authorities on similar transactions
involving securities issued by an entity with terms similar to those of the
notes. Accordingly, the issuer suggests that persons considering the purchase
of class A3 notes and/or class B notes consult their own tax advisors about the
United States federal income tax consequences of an investment in the notes and
the application of United States federal tax laws, as well as the laws of any
state, local or foreign taxing jurisdictions, to their particular situations.
For the purposes of this summary, a "United States holder" means a
beneficial owner of notes who is a "United States person" as described in
Section 7701(a)(30) of the Code, generally including;
* an individual who is a citizen or resident of the United States;
* a corporation or partnership created in or under the laws of the United
States, any state or any political subdivision of any state -- including
the District of Columbia; and
* an estate or trust whose income is includible in gross income for United
States federal income tax purposes without regard to source. A "non-
United States holder" means a beneficial owner of notes that is not a
United States holder.
Tax Status of the Receivables Trust, the MTN Issuer and the Issuer
It is presently contemplated that each of the receivables trust, the MTN
issuer and the issuer will conduct their respective activities, including
activities undertaken on their behalf, such as servicing activities, entirely
outside of the United States. In that regard, assuming that the activities of
each of the receivables trust, the MTN issuer and the issuer are, as
contemplated, conducted entirely outside of the United States, and assuming
each of these entities makes no investments that are subject to withholding of
U.S. federal income tax, special U.S. tax counsel is of the opinion that,
although no transaction closely comparable to that contemplated herein has been
the subject of a Treasury regulation, revenue ruling or judicial decision and
hence the matter cannot be free from doubt, each of the receivables trust, the
MTN issuer and the issuer will not be treated as engaged in a trade or business
within the United States for U.S. federal income tax purposes and that each of
these entities will not be subject to United States federal income tax.
Prospective investors should understand that such determination of whether
a person is engaged in a U.S. trade or business is based on a highly factual
analysis, there is no direct guidance as to which activities constitute being
engaged in a trade or business within the United States, and it is unclear how
a court would construe the existing indirect authorities. A foreign corporation
deemed to be so engaged would be subject to U.S. federal income tax, as well as
the branch profits tax, on its income which is treated as effectively connected
with the conduct of that trade or business. Such income tax, if imposed, would
be based on effectively connected income computed in a manner generally
analogous to that applied to the income of a domestic corporation, except that
a foreign corporation would be entitled to deductions and credits for a taxable
year only if it files, on a timely basis, an income tax return for that year,
which none of the receivables trust, MTN issuer and issuer intend to do, even
as a protective measure. The maximum U.S. federal income tax rates are
currently 35% for a corporation's effectively connected income and 30% for the
branch profits tax, resulting in an effective maximum U.S. federal income tax
rate of 54.5%. The branch profits tax is imposed each year on a corporation's
effectively connected earnings and profits, with certain adjustments, deemed
repatriated out of the United States.
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United States Holders
There are no regulations, published rulings or judicial decisions
addressing the characterisation for United States federal income tax purposes
of securities with terms substantially the same as the notes. The issuer
intends to treat the offered notes as debt of the issuer for United States
federal income tax purposes. Except as otherwise stated, the following
discussion assumes that the offered notes are debt of the issuer.
In determining whether a security -- such as a note -- represents
indebtedness for United States federal income tax purposes, United States
courts and the IRS have applied a number of factors. The most significant of
these factors are:
* a fixed maturity date;
* the right to receive fixed payments;
* the right of a holder to enforce payment on a default;
* the degree of subordination;
* the intent of the parties;
* the level of capitalisation;
* the extent to which the owner of the assets has transferred the
opportunity for gain if the assets increase in value;
* the risk of loss if the assets decrease in value; and
* the extent to which the investors in the security have obtained the
economic benefits and burdens of ownership of the assets. Based on these
factors, among others, the issuer intends to treat the notes as debt for
United States federal income tax purposes.
However, no ruling will be obtained from the IRS on the characterisation
of the notes for federal income tax purposes and there can be no assurance that
the IRS or the courts will agree with the conclusions of the issuer. Primarily
because of the level of capitalisation of the issuer, special U.S. tax counsel
renders no opinion with respect to whether the notes will be treated as equity
for United States federal income tax purposes, and it is possible that the
notes might be viewed as equity interests in the issuer for these purposes. See
"Investment in a Passive Foreign Investment Company" below. In this case, the
timing, character and source of gain, loss and income to the United States
holder may be different than that described below. The issuer suggests that
prospective investors consult their tax advisors regarding the tax consequences
of investing in the notes.
Interest Payments and Distributions
The offered notes may be treated as having been issued with original issue
discount -- "OID" -- for United States federal income tax purposes, in which
case the OID will be taxed as described below. However, in the absence of any
OID on notes, interest on the offered notes will be taxable to a United States
holder as ordinary income at the time it is received or accrued, in accordance
with the holder's regular method of accounting for United States federal income
tax purposes.
The total amount of OID on a note is the excess of its stated redemption
price at maturity over its issue price. The issue price for the offered notes
is the price -- including any accrued interest -- at which a substantial
portion of the relevant notes are first sold to the public. In general, the
stated redemption price at maturity is the sum of all payments made on the note
other than payments of interest that (1) are actually payable at least annually
over the entire life of the note and (2) are based on a single fixed rate or
variable rate -- or certain combinations of fixed and variable rates.
If any of the offered notes are issued at a discount of an amount equal to
or greater than 0.25 per cent of that note's stated redemption price at
maturity multiplied by the note's weighted average maturity, called its "WAM",
then that note will be deemed to bear OID. The WAM of a note is computed based
on the number of full years each distribution of principal -- or other amount
included in the stated redemption price at maturity -- is scheduled to be
outstanding. Further, the IRS could take the position based on Treasury
regulations that none of the interest payable on an offered note is
unconditionally payable and so that all of that interest should be included in
the note's stated redemption price at maturity. In addition, if on the issue
date there is a differential of more than 25 basis points between the initial
fixed interest rate and the current value of the variable interest rate that
follows, then the IRS may take the position that the note bears OID and the
holder of the note will be required to accrue OID into income as described
below.
A United States holder -- including a cash basis holder -- of an offered
note deemed to bear OID generally would be required to accrue OID on the
relevant note for United States federal income tax purposes on a constant yield
basis. This would require the inclusion of OID in income in advance of the
receipt of cash
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attributable to that income. Under Section 1272(a)(6) of the Code, special
provisions apply to debt instruments on 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 those provisions would apply to the notes is unclear.
Sourcing: Interest payments or distributions on a note generally will
constitute foreign source income for United States federal income tax purposes.
Subject to certain limitations, United Kingdom withholding tax, if any, imposed
on these payments will generally be treated as foreign tax eligible for credit
against a United States holder's United States federal income tax. For foreign
tax credit purposes, it is expected that interest will generally be treated as
passive income or, in the case of some United States holders, financial
services income.
Disposition or Retirement of Investment
Subject to the discussion of the PFIC rules below, upon the sale, exchange
or retirement of an offered note -- including pursuant to a redemption by the
issuer prior to its maturity date -- the United States holder will recognise
gain or loss equal to the difference between the amount realised and the United
States holder's "adjusted tax basis" in the relevant note. In general, a United
States holder's adjusted tax basis in an OID debt instrument is equal to the
United States holder's cost for such debt instrument, plus any OID accrued and
less the amount of any payments received by the holder that are not "qualified
stated interest" payments under United States Treasury regulations about OID.
A United States holder's adjusted tax basis in a debt instrument with no
OID is generally equal to the holder's cost less the amount of any principal
payments made before the date of disposition. A United States holder's adjusted
tax basis in stock is generally equal to the United States holder's cost for
the stock. In general, any gain or loss realised by the holder in excess of
foreign currency gain or loss will be capital gain or loss. Under certain
circumstances, capital gains derived by individuals are taxed at preferential
rates. The deductibility of capital losses is subject to limitations.
Sourcing: Gain realised by a United States holder on the sale, exchange or
retirement of a note generally will be treated as a United States source gain.
Under recently issued United States Treasury regulations governing losses
recognised on the sale of personal property, loss from the sale, exchange or
retirement of a note generally will also be treated as a United States source
loss. Exceptions to the application of these regulations' sourcing provisions
include exceptions for certain losses attributable to foreign exchange
fluctuations, accrued but unpaid interest, and foreign offices of U.S.
residents, among others. Some other exceptions to the regulations' general rule
apply to notes treated as equity in the issuer. The issuer suggests that United
States holders consult their own tax advisors about the proper treatment of
losses for foreign tax credit purposes.
Investment in a Passive Foreign Investment Company
Primarily because of the level of capitalisation of the issuer, special
U.S. tax counsel renders no opinion with respect to whether the notes will be
treated as equity for United States federal income tax purposes, and it is
possible that the notes -- and especially the class C notes and, to a lesser
extent, the class B notes and class A notes -- might be viewed as equity
interests -- in other words stock -- in the issuer. Because of the nature of
the income of the issuer, the issuer could constitute a PFIC. Accordingly,
United States holders of the class A3 notes and class B notes may be
shareholders in a PFIC and, if any other class of the notes were not treated as
debt but rather were treated as equity of the issuer for United States federal
income tax purposes, direct or indirect United States holders of these notes
could also be considered United States shareholders of a PFIC.
In general, United States holders treated as shareholders of a PFIC
constituted by the issuer will be subject to special tax rules on excess
distributions made to them by the issuer, including a rateable inclusion of
excess distributions in the United States holder's gross income as ordinary
income and requirement for the payment of an interest charge on tax that is
deemed to have been deferred on these excess distributions. Excess
distributions would generally include, (1) some distributions on a United
States shareholder's equity interest in the issuer for a taxable year, if the
total of those amounts exceeds 125% of the average amount of distributions from
the issuer made during a specified base period, and (2) gain from the
disposition of the equity interest in the issuer. The issuer presently does not
intend to comply with any reporting requirements necessary for United States
holders to elect to treat the issuer as a qualified electing fund or "QEF".
This election would mitigate the adverse tax consequences as described above to
holders.
A United States holder that holds marketable stock in a PFIC may, in lieu
of making a QEF election, also avoid certain unfavourable consequences of the
PFIC rules by electing to mark the PFIC stock to market as of the close of each
taxable year. A United States holder that makes the mark-to-market election is
required to include in income each year as ordinary income an amount equal to
the excess, if any, of the fair market value of the stock at the close of the
year over the United States holder's adjusted tax basis in the stock. For this
purpose, a United States holder's adjusted basis will generally be the holder's
cost for the stock, increased by the amount previously included in the holder's
income pursuant to this mark-to-market election and decreased by any
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amount previously allowed to the United States holder as a deduction pursuant
to this election. If, at the close of the year, the United States holder's
adjusted tax basis exceeds the fair market value of the stock, then the United
States holder may deduct this excess from ordinary income, but only to the
extent of net mark-to-market gains previously included in income. Any gain from
the actual sale of the PFIC stock will be treated as ordinary income, and any
loss will be treated as ordinary loss to the extent of net mark-to-market gains
previously included in income.
Stock is considered marketable if it is regularly traded on an exchange
that the IRS determines to be qualified for these purposes. In that regard, the
IRS recently proposed regulations articulating definitions of regularly traded
and qualified exchange under these mark-to-market provisions, as to which the
issuer suggests that prospective investors consult their advisors. Although the
proposed regulations generally take effect only following their promulgation as
final regulations, shareholders in a PFIC also may elect current application of
the proposed regulations. Although the issuer believes that each class of notes
will be listed on a qualified exchange, there is uncertainty as to whether they
will be regularly traded, and hence, there can be no assurance -- and no
representation is made -- that the notes will be eligible for mark-to-market
election.
Because neither of the foregoing elections mitigating the effect of the
PFIC provisions -- in other words, the qualified electing fund election and the
mark-to-market election -- may be available to an investor, United States
holders should be aware of the potentially adverse tax consequences arising
under the PFIC provisions discussed above. First, all or a portion of both
distributions and gains on notes generally would be taxable to holders as
ordinary income, and would be taxable at the highest marginal rates applicable
to current and prior years during the holding period. Further, all or a portion
of the distributions and gains could be subject to the additional "interest
charge" tax. Such interest charge tax -- computed in the manner described above
on "excess distributions" and gains -- generally is intended to eliminate the
value of any tax deferral arising from an investment in notes. Although the
issuer does not expect there to be any significant deferral of tax arising from
an investment in notes and consequently does not expect that the interest
charge tax computation would normally produce a substantial additional tax
liability, in some circumstances, it could do so. For example, the interest
charge computation could produce an interest charge tax with respect to a
floating rate note if the floating rate on the note increased substantially
over an investor's holding period. Alternatively, the computation could produce
such a tax with respect to a fixed rate note if that note was sold by a United
States holder at a substantial gain due to fluctuations in the general level of
interest rates. No assurance is possible that such circumstances will not
occur.
Certain additional adverse consequences can flow to indirect investors in
a PFIC. More specifically, the ownership of the notes by a non-United States
holder may be attributed to a United States holder notwithstanding that such
United States holder holds no note and receives no cash in respect of a note.
Code Section 1298(a) generally treats notes held directly or indirectly by a
foreign partnership, corporation, trust or estate as owned by such entity's
partners, shareholders or beneficiaries, as applicable; it also may treat any
of various option arrangements as conferring ownership of notes on United
States holders. Hence, a United States holder treated as owning notes held by a
non-United States holder generally would be subject to tax on indirect gains
and distributions attributable to the notes in the manner described above.
Finally, an investor who pledges shares in a PFIC as security for a loan
should be aware that such a pledge is treated as a disposition of the related
shares, and any gain would be subject to the rules applicable to distributions
and gains with respect to shares in a PFIC described above.
Sourcing
For sourcing of payments for a note treated as stock in the issuer and
gain or loss on sale of an interest in this stock, see " -- Interest Payments
and Distributions -- Sourcing" and "-- Disposition or Retirement of Investments
- -- Sourcing" above.
Controlled Foreign Corporation Status
It is possible that the issuer might be treated as a controlled foreign
corporation for United States federal income tax purposes. In this event,
United States holders of equity interests that are treated as owning 10 per
cent. or more of the combined voting power of the issuer would be required to
include in income their pro rata share of the earnings and profits of the
issuer, and generally would not be subject to the rules described above about
PFICs. The issuer suggests that prospective investors consult with their tax
advisors concerning the potential effect of the controlled foreign corporation
provisions.
Non-United States Holders
An investment in the notes by non-United States holders generally will not
give rise to any United States federal income tax to these holders, unless the
income received on, or any gain recognised on the sale or other disposition of
their notes is:
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* treated as effectively connected with the conduct of a trade or
business in the United States; or
* in the case of gain recognised by an individual, the individual is
present in the United States for 183 days or more and has a tax
home -- as defined in the Code -- in the United States during the
taxable year.
Backup Withholding and Information Reporting
Information reporting to the IRS generally will be required for
distributions or payments of principal or interest -- including any OID -- on
the notes and on proceeds of the sale of the notes within the United States to
United States holders other than corporations and certain other exempt
recipients. A 31 per cent. backup withholding tax will apply to those payments
if the United States holder fails to provide certain identifying information --
for example, the holder's taxpayer identification number -- or the holder is
notified by the IRS that it has failed to report all interest and dividends
required to be shown on its United States federal income tax returns. Non-
United States holders may be required to comply with applicable certification
procedures to establish that they are not United States holders in order to
avoid the application of these information reporting requirements and backup
withholding.
The United States Treasury recently released regulations that will revise
the procedures for backup withholding and information reporting described above
for payments on the notes and payments of proceeds of the sale of the notes
made after 31st December, 2000. The issuer suggests that prospective investors
should consult with their tax advisers concerning the potential effect of these
regulations on their ownership of the notes.
ERISA Considerations
The U.S. Employee Retirement Income Security Act of 1974, as amended --
called "ERISA"-, and Section 4975 of the Code impose requirements on employee
benefit plans and some other plans and arrangements, including individual
retirement accounts and annuities, Keogh plans and some collective investment
funds or insurance company general or separate accounts in which these plans,
accounts or arrangements are invested, that are subject to the fiduciary
responsibility provisions of ERISA or Section 4975 of the Code. We call these
entities "Plans." ERISA also imposes requirements on persons who are
fiduciaries of Plans for the investment of "plan assets" of any Plan -- called
"Plan Assets." ERISA generally imposes on Plan fiduciaries certain general
fiduciary requirements, including those of investment prudence and
diversification and the requirement that a Plan's investments be made in
accordance with the documents governing the Plan.
ERISA and Section 4975 of the Code prohibit a broad range of transactions
involving Plan Assets and persons -- called "Parties in Interest" -- who have
specified relationships to a Plan or its Plan Assets, unless an exemption is
available. Parties in Interest that participate in a prohibited transaction may
be subject to a penalty imposed under ERISA or an excise tax imposed under
Section 4975 of the Code, unless an exemption is available. The details of
these prohibited transactions are contained in Section 406 of ERISA and Section
4975 of the Code.
Subject to the considerations described below, you may purchase only the
class A3 notes with Plan Assets of any Plan.
If you are considering whether to purchase class A3 notes with Plan Assets
of any Plan you should determine whether the purchase is consistent with your
fiduciary duties and whether the purchase would result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code because any of
Barclays Bank PLC, the issuer, the servicer, the receivables trustee or any
other party may be Parties in Interest as to the investing Plan and may be
deemed to be benefiting from the issuance of class A3 notes. If Barclays Bank
PLC, the issuer or the servicer is a Party in Interest as to Plan Assets you
are investing, you should consult with your counsel about the availability of
exemptive relief under U.S. Department of Labor -- called "DOL" -- Prohibited
Transaction Class Exemption -- called "PTCE"
* 96-23, relating to transactions determined by in-house asset managers;
* 95-60, relating to transactions involving insurance company general
accounts;
* 91-38, relating to transactions involving bank collective investment
funds;
* 90-1, relating to transactions involving insurance company pooled
separate accounts;
* 84-14, relating to transactions determined by independent qualified
professional asset managers; or
* any other exemption issued by the DOL.
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You should be aware, however, that even if you meet the conditions
specified in one or more of the above-referenced exemptions, the scope of the
exemptive relief provided by the exemption might not cover all acts that might
be construed as prohibited transactions.
In addition, under DOL Regulation Section 2510.3-101 -- called the "Plan
Asset Regulation" if you use Plan Assets to purchase equity interests in the
property of the receivables trust your purchase might cause the receivables and
other property and rights held/owned by the receivables trust to be treated as
Plan Assets of the investing Plan. This would subject the issuer and the
receivables trust's assets to the fiduciary rules of ERISA and the prohibited
transaction provisions of ERISA and Section 4975 of the Code. Nevertheless,
because we expect that class A3 notes (1) will be treated as indebtedness for
federal tax purposes and (2) should not be deemed to have any "substantial
equity features," your purchases of class A3 notes with Plan Assets should not
be treated as equity investments. If so, the receivables trust's assets should
not be deemed to be Plan Assets of the investing Plans. We have based our
conclusions, in part, on the traditional debt features of the class A3 notes,
including your reasonable expectation that the class A3 notes will be repaid
when due, and the fact that the class A3 notes do not have conversion rights,
warrants or other typical equity features.
You must not purchase the class A3 notes with your Plan Assets of any
Plan, if any of the issuer, Barclays Bank PLC, the servicer, the receivables
trustee or any of their affiliates (1) has investment or administrative
discretion for those Plan Asset; (2) has authority or responsibility to give,
or regularly gives, investment advice for those Plan Assets, for a fee and
under an agreement or understanding that the advice will serve as a primary
basis for investment decisions for the Plan Assets, and will be based on the
particular investment needs of the Plan; or (3) unless PTCE 95-60, 91-38 or 90-
1 is applicable, is an employer maintaining or contributing to the Plan. You
will be deemed to have represented by your purchase and holding of a class A3
note that you are not subject to this limitation.
If you are considering whether to purchase any class A3 notes with Plan
Assets of any Plan, you should consult with your counsel and refer to this
prospectus for guidance regarding the ERISA considerations applicable to the
notes.
Some employee benefit plans, such as governmental plans -- as defined in
Section 3(32) of ERISA -- and some church plans -- as defined in Section 3(33)
of ERISA -- are not subject to the requirements of ERISA or Section 4975 of the
Code. Accordingly, assets of these plans may be invested in the notes without
regard to the ERISA considerations described in this prospectus, but subject to
the provisions of other applicable federal and state law. However, any of these
plans that are qualified and exempt from taxation under Sections 401(a) and
501(a) of the Code are subject to the prohibited transaction rules set forth in
Section 503 of the Code.
The class B notes may not be acquired by or on behalf of any Plan or any
entity acting on behalf of or with Plan Assets. You will be deemed to have
represented by your purchase and holding of a class B note that no part of the
funds being used to pay the purchase price for that class B note constitutes
Plan Assets of any Plan.
Enforcement of Foreign Judgements in England and Wales
The issuer is incorporated with limited liability in England and Wales
under the Companies Act 1985. Any final and conclusive judgement of either a
New York state or United States Federal court that has jurisdiction recognised
by England and Wales regarding obligations of the issuer for the class A3
notes, which is for a debt or a fixed sum of money and which has not been
stayed or fully satisfied, can be enforced by action against the issuer in the
courts of England and Wales without re-examining the merits of the issues
determined by the proceedings unless:
* the proceedings in New York state or the United States Federal court
involved a denial of the principles of natural justice;
* the judgement goes against to the public policy of England and Wales;
* the judgement was obtained by fraud, duress or was based on a clear
mistake of fact;
* the judgement is a penal or revenue judgement; or
* there has been an earlier judgement in another court between the same
parties on the same issues as are dealt within the judgement to be
enforced.
A judgement by a court may be sometimes given in pounds sterling. The
issuer expressly submits to the jurisdiction of New York state and the United
States Federal courts sitting in the Borough of Manhattan in the City of New
York for the purpose of any suit, action or proceedings arising out of this
offering. The following parties have been appointed to receive legal documents
for the issuer and the transferor, servicer and trust cash manager.
108
<PAGE>
* for the issuer
* for the transferor, servicer and trust cash manager
Most of the directors and executive officers of the issuer and some of the
experts named in this document live outside the United States. Most of their
assets are located outside the United States. Because of this, the holders of
the offered notes may not be able to serve notice of legal action on them or to
enforce judgements against them. The issuer has been advised by its English
counsel, Clifford Chance, that because of this, they may not be able to enforce
in England and Wales, in original actions or in actions for enforcement of
judgements of United States courts, civil liabilities based on the Federal
securities laws of the United States.
Underwriting
The issuer has agreed to sell and Barclays Capital Inc. and * have agreed
to purchase the principal amount of the class A3 notes listed in the table
below. The issuer has agreed to sell and Barclays Capital Inc. have agreed to
purchase the entire principal amount of the class B notes. The terms of these
purchases are governed by an underwriting agreement between the issuer and
Barclays Capital for itself and as representative for all of the underwriters.
Underwriters of the class A3 notes Principal Amount of the
Class A3 Notes
Barclays Capital Inc.
Underwriter of the Class B Notes Principal Amount of the
Class B Notes
Barclays Capital Inc. [*]
The price to the public and underwriting discounts and commissions as a
percentage of the principal balance of the class A3 notes will be ________ and
_______, respectively.
The underwriters have agreed to purchase all of the offered notes if any
of them are purchased.
Barclays Capital Inc., as representative of the underwriters of the class
A3 notes, have advised the issuer that the underwriters propose initially to
offer the class A3 notes to the public at the public offering price stated on
the cover page of this prospectus, and to some dealers at that price, less a
concession up to _____% for each class A3 note. The underwriters may allow, and
those dealers may reallow, concessions up to _____% of the principal balance of
the class A3 notes to some brokers and dealers.
The price to the public and underwriting discounts and commissions as a
percentage of the principal balance of the class B notes will be _____ and
_____, respectively.
Barclays Capital Inc. have advised the issuer that they propose initially
to offer the class B notes to the public at the public offering price stated on
the cover page of this prospectus, and to some dealers at that price, less a
concession up to _____% for each class B note. Barclays Capital Inc. may
allow, and those dealers may reallow, concessions up to _____% of the
principal balance of the class B notes to some brokers and dealers.
Additional offering expenses are estimated to be $_____________.
The issuer and Barclays Bank PLC will indemnify the underwriters against
liabilities -- including liabilities under the United States Securities Act --
caused by (1) any untrue statement or alleged untrue statement of a material
fact contained in this prospectus or the related registration statement or (2)
any omission or alleged omission to state a material fact required to be stated
in this prospectus or the related registration statement or necessary to make
the statements in this prospectus or the related registration statement not
misleading. The issuer and Barclays Bank PLC will not, however, indemnify the
underwriters against liabilities caused by any untrue statement or omission,
real or alleged, made in reliance upon and in conformity with information
relating to and provided by any underwriter for use in this prospectus and the
related registration statement.
The underwriters may engage in over-allotment transactions, stablising
transactions, syndicate covering transactions and penalty bids for the offered
notes under Regulation M under the United States Exchange Act.
* Over-allotment transactions involve syndicate sales in excess of the
offering size, which creates a syndicate short position.
* Stablising transactions permit bids to purchase the offered notes so long
as the stablising bids do not exceed a specified maximum.
* Syndicate covering transactions involve purchases of the offered notes in
the open market after the distribution has been completed in order to
cover syndicate short positions.
109
<PAGE>
* Penalty bids permit the underwriters to reclaim a selling concession from
a syndicate member when the offered notes originally sold by that
syndicate member are purchased in a syndicate covering transaction.
These transactions may cause the prices of the offered notes to be higher
than they would otherwise be in the absence of those transactions. Neither the
issuer nor any of the underwriters represent that the underwriters will engage
in any of those transactions or that those transactions, once begun, will not
be discontinued without notice at any time.
Each underwriter will represent and agree that:
* it has not offered or sold, and, before the expiry of six months from the
closing date, will not offer or sell, any offered notes to persons in the
United Kingdom, except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal
or agent) for purposes of their business, or otherwise in circumstances
which have not resulted and will not result in an offer to the public in
the United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995;
* it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the offered notes in, from or otherwise involving the United
Kingdom;
* if it is an authorised person under Chapter III of part I of the
Financial Services Act 1986, it has only promoted and will only promote
(as that term is defined in Regulation 1.02(2) of the Financial Services
(Promotion of Unregulated Schemes) Regulations 1991) to any person in the
United Kingdom the scheme described in this prospectus if that person is
of a kind described either in Section 76(2) of the Financial Services Act
1986 or in Regulation 1.04 of the Financial Services (Promotion of
Unregulated Schemes) Regulations 1991; and
* it is a person of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 (as
amended) or is a person to whom the document may otherwise lawfully be
issued or passed on.
This prospectus may be used by Barclays Capital Inc. -- an affiliate of
the transferor and servicer -- for offers and sales related to market-making
transactions in the offered notes. Barclays Capital Inc. may act as principal
or agent in these transactions. These sales will be made at prices relating to
prevailing market prices at the time of sale. Barclays Capital Inc. has no
obligation to make a market in the offered notes, and any market-making may be
discontinued at any time without notice. Barclays Capital Inc. is among the
underwriters participating in the initial distribution of the offered notes.
Ratings of the Offered Notes
It is a condition to issuing the class A3 notes that they be rated in the
highest rating category by four nationally recognised rating agencies.
It is a condition to issuing the class B notes that they be rated A by
four nationally recognised rating agencies.
Any rating of your notes by a rating agency will indicate:
* its view on the likelihood that you will receive interest payments and
principal payments by the series 99-1 termination date; and
* its evaluation of the receivables and the availability of the credit
enhancement for your notes.
What a rating will not indicate is:
* the likelihood that principal payments will be paid on a scheduled
redemption date before the series 99-1 termination date;
* the likelihood that a Pay Out Event will occur;
* the likelihood that a withholding tax will be imposed on noteholders;
* the marketability of your notes;
* the market price of your notes; or
* whether your notes are an appropriate investment for you.
110
<PAGE>
A rating will not be a recommendation to buy, sell or hold the notes. A
rating may be lowered or withdrawn at any time.
The issuer will request a rating of the offered notes from four nationally
recognized rating agencies. Rating agencies other than those requested could
assign a rating to the offered notes, and its rating could be lower than any
rating assigned by a rating agency chosen by the issuer.
Experts
The balance sheet of the issuer and the MTN issuer as of 30 September,
1999, are included in this prospectus in reliance on the reports of
PricewaterhouseCoopers, independent accountants, given on the authority of the
said firm as experts in auditing and accounting.
Legal Matters
Legal matters relating to the validity of the issuance of the notes will
be passed upon for the issuer by Clifford Chance, London, England. Legal
matters will be passed upon for the underwriters by Clifford Chance, London,
England and Orrick, Herrington & Sutcliffe, London, England.
Reports to Noteholders
The servicer will prepare monthly and annual reports that will contain
information about the offered notes. The financial information contained in the
reports will not be prepared in accordance with generally accepted accounting
principles. Unless and until definitive notes are issued, the reports will be
sent to the depository, the holder of the offered notes. No reports will be
sent to you.
Where You Can Find More Information
We filed a registration statement for the offered notes with the SEC. This
prospectus is part of the registration statement, but the registration
statement includes additional information.
The servicer will file with the SEC all required annual, monthly and
special SEC reports and other information about the offered notes.
You may read and copy any reports, statements or other information we file
at the SEC's public reference room in Washington, D.C. You can request copies
of these documents, upon payment of a duplicating fee, by writing to the SEC.
Please call the SEC at (800) SEC-0330 for further information on the operation
of the public reference rooms. Our SEC filings also are available to the public
on the SEC internet site (http://www.sec.gov).
111
<PAGE>
Index of Terms for Prospectus
<TABLE>
<CAPTION>
Page
<S> <C>
$..................................................................... 17
[*] servicer interchange rate......................................... 80
L..................................................................... 17
[EURO]................................................................ 17
Acquired Interchange.................................................. 32
Act................................................................... 2
addition date......................................................... 29
additional accounts................................................... 29
additional jurisdiction............................................... 52
Additional Trust Accounts............................................. 44
additional transferor beneficiary..................................... *
Adjusted Investor Interest............................................ 88
adjusted tax basis.................................................... 105
advance excess payment................................................ 81
Aggregate Investor Indemnity Amount................................... 71
aggregate principal amount............................................ *
Available Investor Principal Collections.............................. 65
Available Funds....................................................... *
Average Principal Receivables......................................... 76
bank portfolio........................................................ 26
Basic Terms Modification.............................................. 91
business day.......................................................... *
Calculation Period.................................................... 59
cancelled account..................................................... 31
capital assets........................................................ *
cardholder............................................................ *
Class A............................................................... 56
Class A3.............................................................. *
Class A Additional Finance Amount..................................... 59
Class A Adjusted Investor Interest.................................... 56
Class A Advance Excess Payment........................................ *
Class A Available Funds............................................... 59
Class A Costs Amount.................................................. *
Class A Covered Amount................................................ 72
Class A Debt Amount................................................... 59
Class A Deficiency Amount............................................. 59
Class A Distribution Ledger........................................... 60
Class A Fixed Allocation.............................................. 64
Class A Floating Allocation........................................... 87
Class A Initial Investor Interest..................................... 86
Class A investor beneficiary.......................................... *
Class A Investor Interest............................................. 56
Class A Investor Charge-Off........................................... 56, 70
Class A Investor Charge-Offs.......................................... 88
Class A Investor Default Amounts...................................... 69
Class A Investor Interest............................................. 87
Class A Monthly Finance Amount........................................ 59
Class A Monthly Principal Amount...................................... 65
Class A Monthly Required Expense Amount............................... 59
Class A MTNs.......................................................... *
Class A noteholders................................................... *
Class A MTN Coupon Ledger............................................. *
Class A MTN Redemption Payment........................................ *
Class A Notes Coupon Ledger........................................... *
Class A1 notes........................................................ *
Class A2 notes........................................................ *
Class A3 notes........................................................ *
Class A Notes Principal Ledger........................................ *
class A3 percentage................................................... 92
</TABLE>
<TABLE>
<CAPTION>
Page
<S> <C>
Class A2 Percentage................................................... *
Class A1 Percentage................................................... *
Class A Required Amount............................................... 70
class A servicing fee................................................. 52
class A scheduled redemption date..................................... *
Class A subscription agreement........................................ *
Class A Trustee Payment Amount........................................ 79
Class A Trustee Payment............................................... *
Class B............................................................... 56
Class B Additional Finance Amount..................................... 60
Class B Adjusted Investor Interest.................................... 57
Class B Available Funds............................................... 61
Class B cash management fee........................................... *
Class B Debt Amount................................................... 61
Class B Deficiency Amount............................................. 60
Class B Distribution Ledger........................................... 61
Class B Excess Spread................................................. 61
Class B Fixed Allocation.............................................. 64
Class B Floating Allocation........................................... 56
Class B Initial Investor Interest..................................... 56
Class B Investor Charge-Off........................................... 70
Class B Investor Charge-Offs.......................................... 89
Class B Investor Default Amount....................................... 69
Class B Investor Interest............................................. 57
Class B Monthly Finance Amount........................................ 60
Class B Monthly Principal Amount...................................... 66
Class B Monthly Required Expense Amount............................... 60
Class B MTNs.......................................................... *
Class B notes......................................................... 18
Class B Notes Coupon Ledger........................................... *
Class B Notes Principal Ledger........................................ *
Class B MTN Coupon Ledger............................................. *
Class B noteholders................................................... *
Class B MTN Redemption Payment........................................ *
Class B Principal Commencement Date................................... 66
Class B Required Amount............................................... 70
class B servicing fee................................................. 52
Class B subscription agreement........................................ *
Class B Trustee Payment Amount........................................ 74
Class B Trustee Payment............................................... *
Class C............................................................... 56
Class C Additional Finance Amount..................................... 61
Class C Adjusted Investor Interest.................................... 57
Class C Available Funds............................................... 62
class C cash management fee........................................... *
Class C Debt Amount................................................... 61
Class C Deficiency Amount............................................. 61
Class C Distribution Ledger........................................... 61
Class C Excess Spread................................................. 62
Class C Fixed Allocation.............................................. 64
Class C Floating Allocation........................................... 56
Class C Initial Investor Interest..................................... 56
Class C Investor Charge-Off........................................... 57, 70
Class C Investor Charge-Offs.......................................... 90
Class C Investor Default Amount....................................... 69
Class C Investor Interest............................................. 57
Class C Monthly Finance Amount........................................ 61
Class C Monthly Principal Amount...................................... 66
Class C Monthly Required Expense Amount............................... 61
</TABLE>
112
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Class C MTNs.......................................................... *
Class C MTN Coupon Ledger............................................. *
Class C MTN Redemption Payment........................................ *
Class C Notes Coupon Ledger........................................... *
Class C notes......................................................... 18
Class C noteholders................................................... *
Class C Notes Principal Ledger........................................ *
Class C Principal Commencement Date................................... 105
class C servicing fee................................................. 52
Class C subscription agreement........................................ *
Class C Trustee Payment Amount........................................ 74
Class C Trustee Payment............................................... *
closing date.......................................................... *
Code.................................................................. 103
Companion Series...................................................... 76
Controlled Accumulation Period........................................ 62
Controlled Accumulation Period Length................................. 108
Controlled Deposit Amount............................................. 62
collecting agent...................................................... 101
credit adjustment..................................................... *
credit enhancement.................................................... *
custodian............................................................. *
Daily Investor Principal Collections.................................. *
default amount........................................................ 69
defaulted account..................................................... 91
Defaulted Amount...................................................... *
definitive notes...................................................... *
depository............................................................ *
depository agreement.................................................. *
Depository Trust Company "DTC"........................................ *
depository interest................................................... *
designated accounts................................................... 29, 43
determination date.................................................... 109
Discount Option Receivables........................................... 31
Discount Percentage................................................... 31
distribution date..................................................... 59
distribution ledgers.................................................. *
DOL................................................................... 108
dollars............................................................... 17
dollar swap agreement................................................. *
eligible account...................................................... 33
eligible receivable................................................... 34
Eligible Receivables Pool............................................. 43
eligible servicer..................................................... 53
eligible trust cash manager........................................... 55
enhancement provider.................................................. *
ERISA................................................................. 107
euro swap agreement................................................... *
euro amount........................................................... *
Excess Interest....................................................... 43
euro.................................................................. 17
excess interest beneficiary........................................... *
excess distribution................................................... *
Excess Interest Interchange........................................... 81
Excess Spread......................................................... 71
expenses loan agreement............................................... 18, 74
Expense Rate.......................................................... *
Extraordinary Resolution.............................................. *
EURIBOR Rates......................................................... *
event of default...................................................... *
Finance Charge Amount................................................. 66
Finance Charge Collection Ledger...................................... *
</TABLE>
<TABLE>
<CAPTION>
Page
<S> <C>
Finance Charge Amounts................................................ 65
Finance Funding Account............................................... *
first fixed security.................................................. *
first floating charge................................................. *
finance charge receivables............................................ *
Fixed Investor Percentage............................................. 63
Floating Allocation Percentage........................................ *
Floating Investor Percentage.......................................... 58
future receivables.................................................... *
global notes.......................................................... *
Group Company Costs Amount............................................ 93
ineligible receivables................................................ 35
Initial Investor Interest............................................. 57
initial transferor beneficiary........................................ *
Insolvency Events..................................................... 47
interest charge....................................................... 106
interchange........................................................... 32
interest payment date................................................. 59
interest period....................................................... *
investor beneficiary.................................................. *
Investor Cash Available for Acquisition............................... 46
investor cash management fee.......................................... ??
Investor Charge-Off................................................... *
investor certificates................................................. *
Investor Default Amount............................................... 69
Investor Indemnity Amount............................................. 72
Investor Interest..................................................... *
Investor Percentage................................................... *
Investor Principal Collections........................................ 65
investor servicing fee................................................ 79
Investor Trustee Payment.............................................. 74
IRS................................................................... *
issuer................................................................ *
issue date............................................................ *
issuer related documents.............................................. 84
Maximum Addition Amount............................................... 29
Minimum Aggregate Principal Receivables............................... 76
Minimum Transferor Interest........................................... 76
MTN Redemption Payment................................................ *
MTN Issuer Costs Amount............................................... 59
MTN issuer............................................................ 18
MTN's................................................................. 17
mtn cash management agreement......................................... *
MTN Coupon Ledger..................................................... *
MTN cash manager...................................................... *
MTN Principal Ledger.................................................. *
Monthly Distribution Amounts.......................................... *
MTN enforcement notice................................................ *
monthly principal collections......................................... *
net servicing fee rate................................................ *
non-United States holder.............................................. 103
Non-Utilised Cash Available for Acquisition........................... 106
Notes Coupon Ledger................................................... *
note trustee.......................................................... *
noteholder............................................................ *
notice of assignment.................................................. 34
OID................................................................... 105
Operating Account..................................................... 67
Parties in Interest................................................... 108
paying agents......................................................... *
Pay Out Event......................................................... 73
payment date.......................................................... *
</TABLE>
113
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
permitted additional jurisdiction..................................... 34
permitted investment.................................................. 44
PFIC.................................................................. 173
Plan Asset Regulation................................................. 108
Plan Assets........................................................... 108
Plans................................................................. 108
pool selection date................................................... 33
Portfolio Yield....................................................... *
pounds................................................................ 17
pounds sterling....................................................... 17
principal amount...................................................... *
Principal Amount Outstanding.......................................... *
Principal Collections Ledger.......................................... *
principal distribution................................................ *
Principal Funding Account............................................. 62
Principal Funding Investment Proceeds................................. 72
principal paying agent................................................ *
principal receivables................................................. *
Principal Shortfalls.................................................. 69
Proceeds Account...................................................... *
PTCE.................................................................. 108
QEF................................................................... 106
Qualified Institution................................................. 74
qualified professional asset managers................................. *
qualified stated interest............................................. 105
qualifying discretionary and accumulation trust....................... 101
quorum................................................................ *
quoted Eurobonds...................................................... 100
Rapid Amortisation Period............................................. 63
Reallocated Class B Principal Collections............................. 90
Reallocated Class C Principal Collections............................. 70
receivables........................................................... *
receivables securitisation agreement.................................. *
recivables trustee.................................................... *
receivables trust..................................................... 18
redesignated accounts................................................. 31, 43
Regulation M.......................................................... *
Reinvested Investor Principal Collections............................. *
Reinvested Principal Collections...................................... 63
relevant documents.................................................... 20
Regulated Amortization Period......................................... 63
Regulated Amortisation Trigger Event.................................. 63
related beneficiary debt.............................................. 42
Required Reserve Amount............................................... 73
required spread account amount........................................ *
Reserve Account....................................................... 72
Reserve Account Funding Date.......................................... 72
Revolving Period...................................................... 62
securitised portfolio................................................. 26
series 99-1........................................................... 19
Series 99-1 Distribution Account...................................... 60
Series 99-1 Extra Amount.............................................. 71
series 99-1 offer date................................................ *
Series 99-1 Issuer Account............................................ *
series 99-1 MTNs...................................................... 18
Series 99-1 Pay-Out Events............................................ 74
</TABLE>
<TABLE>
<CAPTION>
Page
<S> <C>
Series 99-1 scheduled redemption date................................. 62
Series 99-1 Supplement................................................ 55
series 99-1 termination date.......................................... 63
servicer default...................................................... 52
Servicer Interchange.................................................. 79
servicing agreement................................................... *
servicing fee......................................................... 51
Shared Excess Finance Charge Collections.............................. 65
Shared Principal Collections.......................................... 69
special U.S. tax counsel.............................................. 103
spread account........................................................ *
sterling amount....................................................... *
sterling deposits..................................................... *
substantial equity features........................................... 108
successor cash manager................................................ 54
successor party....................................................... *
successor servicer.................................................... 52
swap agreement........................................................ 75
swap counterparty..................................................... *
swap termination event................................................ 99
swap transaction...................................................... *
Transferor............................................................ *
termination payment................................................... *
transferor acquisition................................................ *
transferor beneficiary................................................ *
transferor cash management fee........................................ 52
transferor certificate................................................ *
Transferor Ineligible Interest........................................ 45
Transferor Cash Available for Acquisition............................. 46
Transferor Interest................................................... *
Transferor Percentage................................................. 43
Transferor Section 75 Liability....................................... 98
transferor servicing fee.............................................. 52
Trust Accounts........................................................ 44
trust cash manager.................................................... *
trust cash manager default............................................ 54
trust cash management agreement....................................... *
trust cash management fee............................................. 52
trust deed............................................................ 18
Trust Pay Out Events.................................................. 47
Trust Section 75 Indemnity............................................ 72
Trustee Acquisition Account........................................... 44
Trustee Collection Account............................................ 44
Trustee Payment Amount................................................ 49
Trustee related document.............................................. *
UK withholding tax.................................................... *
Unavailable Investor Principal Collections............................ 110
Unavailable Principal Collections..................................... 68
Unavailable Transferor Principal Collections.......................... 110
United States holder.................................................. 103
United States person.................................................. 171
US$................................................................... 17
US dollar account..................................................... *
US $ deposits......................................................... *
WAM................................................................... 105
zero balance account.................................................. 31
</TABLE>
114
<PAGE>
Index of Appendices
The appendices are an integral part of this prospectus.
<TABLE>
<CAPTION>
Page
<S> <C>
A Report of Independent Accountants for Gracechurch Card
Funding (No.1) PLC............................................. A-1
B Financial Statements of Gracechurch Card Funding (No.1) PLC. B-1
C Notes to Financial Statements............................... C-1
D Report of Independent Accountants for Barclaycard Funding
PLC............................................................ D-1
E Financial Statements of Barclaycard Funding PLC............. E-1
F Notes to Financial Statements............................... F-1
G Terms and Conditions of the Notes........................... G-1
</TABLE>
115
<PAGE>
Appendix A
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FOR GRACECHURCH CARD FUNDING (NO.1) PLC
<PAGE>
Gracechurch Card Funding (No.1) PLC
BALANCE SHEET
AS OF 30 SEPTEMBER, 1999
TOGETHER WITH AUDITORS' REPORT
A-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of :
We have audited the accompanying balance sheet of Gracechurch Card Funding
(No.1) PLC (a public limited company incorporated in England and Wales) as of
30 September, 1999. This financial statement is the responsibility of that
company's management. Our responsibility is to express an opinion on this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the balance
sheet is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the balance sheet. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in
all material respects, the financial position as of Gracechurch Card Funding
(No.1) PLC as of 30 September, 1999, in conformity with generally accepted
accounting principles in the United States of America.
/s/ PricewaterhouseCoopers
20 October, 1999
A-2
<PAGE>
Appendix B
Gracechurch Card Funding (No.1) PLC
BALANCE SHEET-AS OF 30 SEPTEMBER, 1999
ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
Cash.......................................... $ 20,594
=============
Common stock (authorised, 50,000 shares,
$.1.65 par
value, Issued and outstanding, 50,000 shares
comprising 2 fully paid and 49,998 quarter
paid.......................................... (4)) $ 20,594
-------------
Total liabilities and shareholder's equity.... $ 20,594
=============
</TABLE>
The accompanying notes are an integral part of this statement.
B-1
<PAGE>
Appendix C
Gracechurch Card Funding (No. 1) PLC
NOTES TO FINANCIAL STATEMENT
30 September, 1999
1. Accounting policies
The balance sheet has been prepared in accordance with the historical cost
convention.
2. Nature of Operations
The Company was incorporated in England and Wales on 24 June, 1999. The
principal purpose of the Company is, among other things, to issue asset backed
floating rate notes and enter into all financial arrangements in that
connection.
3. Trading activity
The Company did not trade during the period from incorporation on 24 June,
1999 to 30 September, 1999 nor did it receive any income nor did it incur any
expenses or pay any dividends. Consequently, no profit and loss account has
been prepared.
4. Share capital
The Company was incorporated with an authorised share capital of $82,365,
comprising 50,000 Ordinary shares of $1.65 each. Two Ordinary Shares were
allotted for cash, and fully paid, on incorporation. On 10 September, 1999,
49,998 Ordinary Shares were allotted quarter paid.
C-1
<PAGE>
Appendix D
REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS FOR
BARCLAYCARD FUNDING PLC
<PAGE>
Barclaycard Funding PLC
BALANCE SHEET
AS OF 30 SEPTEMBER 1999
TOGETHER WITH AUDITORS' REPORT
D-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Barclaycard Funding PLC:
We have audited the accompanying balance sheet of Barclaycard Funding PLC
(a public limited company incorporated in England and Wales) as of September
30, 1999. This financial statement is the responsibility of that company's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the balance
sheet is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the balance sheet. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in
all material respects, the financial position of Barclaycard Funding PLC as of
September 30, 1999, in conformity with generally accepted accounting principles
in the United States of America.
PricewaterhouseCoopers
October 20, 1999
D-2
<PAGE>
Barclaycard Funding PLC
BALANCE SHEET -- AS OF 30 SEPTEMBER 1999
ASSETS
<TABLE>
<CAPTION>
<S> <C>
Debtors:
Balance with Barclays Bank PLC $3.30
=============
</TABLE>
SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S> <C>
Common stock (authorized, 100 shares of $1.65 each,
Issued and outstanding, two shares of $1.65 each) $3.30
-------------
Total liabilities and shareholders' equity $3.30
=============
</TABLE>
The accompanying notes are an integral part of this document.
E-1
<PAGE>
Barclaycard Funding PLC
NOTES TO FINANCIAL STATEMENT
30 SEPTEMBER 1999
1. Accounting policies
The balance sheet has been prepared in accordance with the historical cost
convention.
2. Nature of Operations
The Company was incorporated in England and Wales on 13 August 1990. The
principal purpose of the Company is, among other things, to issue asset backed
medium term notes and enter into all financial arrangements in that connection.
3. Trading activity
The Company did not trade during the period from incorporation on 13
August 1990 to 30 September 1999 nor did it receive any income nor did it incur
any expenses or pay any dividends. Consequently, no profit and loss account has
been prepared.
4. Share capital
The Company was incorporated with an authorised share capital of $3.30,
comprising two Ordinary shares of $1.65 each. Issued share capital comprises
two Ordinary shares were allotted for cash, and fully paid, on incorporation.
5. Subsequent Events
On 8 October 1999, the Company passed special resolutions to re-register
as a public company and that the name of the Company be changed to from
Exshelfco (BDC) Limited to Barclaycard Funding PLC.
On 8 October 1999, the Company passed ordinary resolutions to convert the
existing share capital of 100 ordinary shares of $1.65 to A ordinary shares of
$1.65 each and to increase the authorised share capital to $82,365 by the
creation of 37,400 A ordinary shares of $1.65 each and 12,500 B ordinary shares
of $1.65 each.
F-1
<PAGE>
Terms and Conditions of the Notes
The following is the text of the terms and conditions of the Notes which
(subject to completion and amendment) will be endorsed on each Note in
definitive form if Notes in definitive form are issued. While the Notes are
represented by the Global Notes the same terms and conditions govern them
except to the extent that they are appropriate only to Definitive Notes. There
will appear at the foot of the Conditions endorsed on each Note the names and
specified offices of the Paying Agents as set out at the end of this Document.
Terms and Conditions of the Notes
The L[*] Class A1 Asset Backed Floating Rate Notes due [*] (the "Class A1
Notes"), the Euro [*] Class A2 Asset Backed Floating Rate Notes (the "Class A2
Notes"), the US$[*] Class A3 Asset Backed Floating Rate Notes, (the "Class A3
Notes" and the Class A1 Notes, the Class A2 Notes and the Class A3 Notes
together the "Class A Notes"), the US$[*] Class B Asset Backed Floating Rate
Notes (the "Class B Notes") and the US$[*] Class C Asset Backed Floating Rate
Notes (the "Class C Notes" and the Class A Notes, the Class B Notes and the
Class C Notes together, the "Notes" and the Class 1 Notes, the Class A2 Notes,
the Class A3 Notes, the Class B Notes and the Class C Notes each a "Class" of
Notes) of the Issuer are the subject of (a) a trust deed dated [*] 1999 (the
"Trust Deed") between the Issuer and The Bank of New York, London Branch, as
trustee (the "Note Trustee", which expression includes any successor trustee(s)
appointed from time to time in connection with the Notes), (b) a depository
agreement in respect of the Class A3 Notes, the Class B Notes and the Rule 144A
Class C Notes dated [*] 1999 (the "Depository Agreement") between the Issuer,
the Note Trustee and the Bank of New York, New York, as depository (the
"Depository") and (c) a paying agency and agent bank agreement dated [*] 1999
(the "Paying Agency and Agent Bank Agreement") between the Issuer, The Bank of
New York, London Branch, as principal paying agent, common depositary and as
agent bank (in such respective capacities the "Principal Paying Agent" or the
"Agent Bank", "Common Depository" which expressions include any successor
principal paying agent or agent bank appointed from time to time in connection
with the Notes), the other paying agents named therein (together with the
Principal Paying Agent, the "Paying Agents", which expression includes any
successor or additional paying agents appointed from time to time in connection
with the Notes) and the Note Trustee. The security for the Notes is created
pursuant to, and on the terms and conditions set out in a deed of charge (the
"Deed of Charge") as from time to time modified in accordance with the
provisions therein contained) to be dated [*] November 1999 made between, inter
alios, the Issuer and the Note Trustee. Certain provisions of these Conditions
are summaries of the Trust Deed, the Depository Agreement, the Paying Agency
and Agent Bank Agreement and the Deed of Charge and subject to the detailed
provisions of those documents. The holders of the Class A1 Notes (the "Class A1
Noteholders") and the holders of the related interest coupons (the "Class A1
Couponholders" and the "Class A1 Coupons" respectively), the holders of the
Class A2 Notes (the "Class A2 Noteholders") and the holders of the related
interest coupons (the "Class A2 Couponholders" and the "Class A2 Coupons"
respectively), the holders of the Class A3 Notes (the "Class A3 Noteholders")
and the holders of the related interest coupons (the "Class A3 Couponholders"
and the "Class A3 Coupons" respectively), the holders of the Class B Notes (the
"Class B Noteholders") and the holders of the related interest coupons (the
"Class B Couponholders" and the "Class B Coupons" respectively) and the holders
of the Class C Notes (the "Class C Noteholders" and together with the Class A1
Noteholders, the Class A2 Noteholders, the Class A3 Noteholders and the Class B
Noteholders, the "Noteholders") and the holders of the related interest coupons
(the "Class C Couponholders" (and the Class C Couponholders together with the
Class A Couponholders and the Class B Couponholders, the "Couponholders") and
the "Class C Coupons" respectively, and the Class C Coupons together with the
Class A1 Coupons, the Class A2 Coupons, the Class A3 Coupons and the Class B
Coupons, the "Coupons") are bound by, and are deemed to have notice of, all the
provisions of the Trust Deed, the Paying Agency and Agent Bank Agreement and
the Deed of Charge applicable to them. Copies of the Trust Deed, the Depository
Agreement, the Paying Agency and Agent Bank Agreement and the Deed of Charge
are available for inspection at the principal place of business for the time
being of the Note Trustee and at the specified office of each Paying Agent.
1. Form, Denomination and Title
(a) The Class A1 Notes, the Class A2 Notes, the Class A3 Notes and the Class
B Notes are each serially numbered and are issued in bearer form in the
denomination of L1,000 each (in the case of the Class A1 Notes, Euro
1,000 each, in the case of the Class A2 Notes, and, in the case of the
Class A3 Notes and the Class B Notes, in the denomination of US$ 1,000
each) with Class A1 Coupons, Class A2 Coupons, Class A3 Coupons, Class B
Coupons, respectively, attached at the time of issue and a grid endorsed
thereon for the recording of all payments of principal in accordance with
the provisions of Condition 7. The Class C Notes are each serially
numbered and are issued in bearer form in the denomination of
US$1,000,000 each with Class C Coupons attached at the time of issue and
a grid endorsed thereon for the recording of all payments of principal in
accordance with the provisions of Condition 7. Title to the Notes and the
Coupons will pass by delivery.
G-1
<PAGE>
(b) The holder of each Coupon (whether or not such Coupon is attached to a
Note) in its capacity as such shall be subject to and bound by all the
provisions contained in the relevant Note.
(c) The holder of any Note or Coupon shall (except as otherwise required by
applicable law) be treated as its absolute owner for all purposes
(whether or not it is overdue and regardless of any notice of ownership,
trust or any other interest therein, any writing thereon or any notice of
any previous loss or theft thereof) and no person shall be liable for so
treating such holder.
2. Status
The Notes and the Coupons are constituted by the Trust Deed and are
direct, secured and unconditional obligations of the Issuer which will at all
times rank pari passu without preference or priority amongst the Notes and
Coupons of the same Class.
3. Security and Swap Agreement
(a) Security
As security for the payment of all monies payable (a) in respect of the
Notes and otherwise under the Trust Deed and the Swap Agreements (as defined in
Condition 3(b) below), including the remuneration, expenses and any other
claims of the Note Trustee and any Receiver (as defined in the Deed of Charge)
appointed under the Deed of Charge and (b) in respect of certain amounts
payable to Barclays Bank PLC (the "Expenses Loan Provider") pursuant to an
expenses loan agreement expected to be dated on or before the Closing Date (the
"Expenses Loan Agreement"), the Issuer will enter into the Deed of Charge
creating the following security (the "Security") in favour of the Note Trustee
for itself and on trust for, inter alios, the Noteholders, the Swap
Counterparty (as defined in Condition 4) and the Expenses Loan Provider:
(i) an assignment by way of first fixed security of the Issuer's right, title
and interest in and to the Series 99-1 MTNs;
(ii) an assignment by way of first fixed security of the Issuer's right,
title, interest and benefit in and to any agreements or documents to
which the Issuer is a party (except for the Trust Deed and the Deed of
Charge);
(iii) an assignment by way of first fixed security of the Issuer's right,
title, interest and benefit in and to all monies credited to the Series
99-1 Issuer Account or to any bank or other account in which the Issuer
may at any time have any right, title, interest or benefit; and
(iv) a first floating charge over the Issuer's undertaking and assets not
charged under (i), (ii) or (iii) above,
(all as more particularly described in the Deed of Charge).
(b) Swap Agreements
The Issuer has entered into the Swap Agreements with the Swap Counterparty
under which the Issuer will make certain payments to the Swap Counterparty and
the Swap Counterparty will make certain payments to the Issuer all as set out
in the relevant Swap Agreement. The swap transactions evidenced by the Swap
Agreements terminate on [* November 2002] unless terminated earlier or extended
in accordance with the terms of the relevant Swap Agreement. In the event of an
early termination of a Swap Agreement, the Swap Counterparty or the Issuer may
be required to make a termination payment to the other party. In addition,
certain events including, without limitation, failure to pay or deliver,
misrepresentation, insolvency or bankruptcy pertaining to the Swap Counterparty
(each of such events pertaining to the Swap Counterparty, a "Swap Counterparty
Event of Default") may result in the early termination of a Swap Agreement. A
copy of each Swap Agreement will be available for inspection at the principal
office of the Trustee and the specified offices of the Paying Agents.
"Dollar A3 Swap Agreement" means an agreement dated on or before [*]
November 1999 between the Issuer, the Swap Counterparty and the Note Trustee,
which provides for certain receipts of the Issuer under or in respect of the
Class A MTN denominated in sterling to be converted into dollars, and vice-
versa, by the Swap Counterparty.
"Dollar B Swap Agreement" means an agreement dated on or before [*]
November 1999 between the Issuer, the Swap Counterparty and the Note Trustee,
which provides for receipts of the Issuer under or in respect of the Class B
MTN denominated in sterling to be converted into dollars, and vice-versa, by
the Swap Counterparty.
"Dollar C Swap Agreement" means an agreement dated on or before [*]
November 1999 between the Issuer, the Swap Counterparty and the Note Trustee,
which provides for receipts of the Issuer under or in respect of the Class C
MTN denominated in sterling to be converted into dollars, and vice-versa, by
the Swap Counterparty.
G-2
<PAGE>
"Dollar Swap Agreements" means the Dollar A3 Swap Agreement, the Dollar B
Swap Agreement and the Dollar C Swap Agreement and "Dollar Swap Agreement"
means any one of them, as the context may require.
"Euro Swap Agreement" means an agreement dated on or before [*] November
1999 between the Issuer, the Swap Counterparty and the Note Trustee, which
provides for certain receipts of the Issuer under or in respect of the Class A
MTN denominated in sterling to be converted into Euro, and vice-versa, by the
Swap Counterparty.
"Sterling Amount" means an amount denominated in sterling paid by or on
behalf of the Issuer to the Swap Counterparty under the terms of any Swap
Agreement.
"Swap Counterparty" means Barclays Bank PLC.
"Swap Agreements" means the Euro Swap Agreement and all or any of the
Dollar Swap Agreements as the context may require.
(c) Application of Proceeds
The Deed of Charge will contain provisions regulating the priority of
application of amounts forming part of the Security among the persons entitled
thereto on enforcement of the Deed of Charge in the following order of
priority:
(i) first, in no order of priority inter se but pro rata to the respective
amounts then due, to pay remuneration then due to any receiver appointed
pursuant to the Deed of Charge or the Note Trustee and all amounts due in
respect of legal fees and other costs, charges, liabilities, expenses,
losses, damages, proceedings, claims and demands then incurred by the
Note Trustee under and in respect of the Related Documents (as defined in
Condition 4(a)) and in enforcing the security created by or pursuant to
the Deed of Charge or in perfecting title to the Security, together with
interest thereon as provided in any such document;
(ii) secondly, (subject to (iii) below) in payment or satisfaction of all
costs, charges, liabilities, expenses, losses, damages, proceedings,
claims and demands of the Swap Counterparty in relation to each Swap
Agreement;
(iii) thirdly, in order of priority inter se, the respective amounts then due:
(A) FIRST (to the extent not covered in (a) above) in payment or
satisfaction of all costs, charges, liabilities, expenses, losses,
damages, proceedings, claims and demands of the Note Trustee under
the Trust Deed; and
(B) SECONDLY in or towards payment pari passu and rateably of all
principal, premium (if any) and interest then due and unpaid in
respect of the Class A after, in the case of the Class A2 Notes
and the Class A3 Notes having paid any Sterling Amounts required
to be paid to the Swap Counterparty under the terms of the Euro
Swap Agreement and the Dollar A3 Swap Agreement respectively;
(iv) fourthly, in or towards payment pari passu and rateably of all principal,
premium (if any) and interest then due and unpaid in respect of the Class
B Notes after having paid any Sterling Amounts required to be paid to the
Swap Counterparty under the Dollar B Swap;
(v) fifthly, in or towards payment pari passu and rateably of all principal,
premium (if any) and interest then due and unpaid in respect of the Class
C Notes after having paid any Sterling Amounts required to be paid to the
Swap Counterparty under the Dollar C Swap Agreement;
(vi) sixthly, in or towards payment of (a) interest and (b) principal, due and
unpaid under the Expenses Loan Agreement;
(vii) seventhly, in or towards payment of any sums due from (or required to be
provided for by) the Issuer to meet its liabilities to any taxation
authority (including in respect of corporation tax to the Inland
Revenue);
(viii) eighthly, in the event that any Swap Agreement is terminated as a result
of a Swap Counterparty Event of Default, in meeting the claims of the
Swap Counterparty in respect of any termination payment to be paid to the
Swap Counterparty by the Issuer in accordance with the early termination
provisions of such Swap Agreement;
(ix) ninthly in or towards payment of any sums due to third parties under
obligations incurred in the course of the Issuer's business;
(x) tenthly, in or towards payment of any dividends due and unpaid to
shareholders of the Issuer; and
(xi) eleventhly, in payment of the balance (if any) to the liquidator of the
Issuer.
G-3
<PAGE>
The Security will become enforceable upon the occurrence of an Event of
Default (as defined in Condition 9), provided however that the occurrence of
the Security becoming enforceable will not, of itself, accelerate the timing or
amount of redemption of the Notes as described in Condition 6.
4. Negative Covenants of the Issuer
So long as any of the Notes remains outstanding (as defined in the Trust
Deed), the Issuer shall not, save to the extent permitted by the Related
Documents (as defined below) or with the prior written consent of the Note
Trustee:
(a) create or permit to subsist any mortgage, charge, pledge, lien or other
security interest including, without limitation, anything analogous to
any of the foregoing under the laws of any jurisdiction upon the whole or
any part of its present or future undertaking, assets or revenues
(including uncalled capital);
(b) carry on any business other than as described in the Offering Circular
dated [*] November 1999 relating to the issue of the Notes and in respect
of that business shall not engage in any activity or do anything
whatsoever except:
(i) preserve and/or exercise and/or enforce any of its rights and
perform and observe its obligations under the Notes and the
Coupons appertaining thereto, the Deed of Charge, the Paying
Agency and Agent Bank Agreement, the Trust Deed, the Depository
Agreement the Expenses Loan Agreement, each Swap Agreement, the
Series 99-1 MTNs (as defined below), the Corporate Services
Agreement (as defined below), the Class A Subscription Agreements
(as defined below), the Class B Subscription Agreement, (as
defined below), the Class C Subscription Agreement (as defined
below), the Bank Agreement (as defined below) and any bank mandate
regarding the Series 99-1 Issuer Account (as defined below)
(together the "Related Documents");
(ii) use, invest or dispose of any of its property or assets in the
manner provided in or contemplated by the Related Documents; and
(iii) perform any act incidental to or necessary in connection with (i)
or (ii) above;
(c) have or form, or cause to be formed, any subsidiaries or subsidiary
undertakings or undertakings of any other nature or have any employees or
premises or have an interest in a bank account other than the Series 99-1
Distribution Account unless such account or interest therein is charged
to the Note Trustee on terms acceptable to it;
(d) create, incur or suffer to exist any indebtedness (as defined in the
Trust Deed) (other than indebtedness permitted to be incurred under the
terms of its Articles and pursuant to or as contemplated in any of the
Related Documents) or give any guarantee or indemnity in respect of any
obligation of any person;
(e) repurchase any shares of its capital stock or declare or pay any dividend
or other distribution to its shareholders;
(f) consolidate with or merge with or into any person or liquidate or
dissolve on a voluntary basis;
(g) be a member of any group of companies for the purposes of value added
tax;
(h) waive, modify or amend, or consent to any waiver, modification or
amendment of, any of the provisions of the Related Documents without the
prior written consent of the Note Trustee; or
(i) offer to surrender to any company any amounts which are available for
surrender by way of group relief.
"Bank Agreement" means an agreement expected to be dated on or before the
Closing Date between the Issuer, the Note Trustee and Barclays Bank PLC,
whereby Barclays Bank PLC has agreed to operate the Series 99-1 Issuer Account
on the terms and conditions set out therein, or any replacement for such
agreement if the Series 99-1 Distribution Account is no longer held at Barclays
Bank PLC.
"Class A MTN" means the Class A medium term note issued by the MTN Issuer in
respect of Series 99-1 pursuant to the MTN Programme.
"Class A Subscription Agreements" means together the Subscription Agreement
dated [*] November 1999 between the Issuer and the Manager (as defined therein)
in respect of the Class A1 Notes and the Class A2 Notes and the Indemnity
Agreement dated [*] November 1999 between the Issuer and the Underwriter (as
defined therein) in respect of the Class A3 Notes.
"Class B MTN" means a Class B medium term note issued by the MTN Issuer in
respect of Series 99-1 pursuant to the MTN Programme.
"Class B Subscription Agreement" means the Subscription Agreement dated [*]
November 1999 between the Issuer and the Manager (as defined therein) in
respect of the Class B Notes.
G-4
<PAGE>
"Class C MTN" means a Class C medium term note issued by the MTN Issuer in
respect of Series 99-1 pursuant to the MTN Programme.
"Class C Subscription Agreement" means the Subscription Agreement dated [*]
November 1999 between the Issuer and the Manager (as defined therein) in
respect of the Class C Notes.
"Corporate Services Agreement" means an agreement dated on or before [*]
November 1999 between [*] and the Issuer, under which [*] and has agreed to
provide certain corporate services to the Issuer.
"MTN Issuer" means Barclaycard Funding PLC, a public limited company
incorporated in England and Wales with registered number [*];
"MTN Programme" means the secured medium term note issuance programme
established by the MTN Issuer.
"Security Trust and Cash Management Deed" means the Security Trust and Cash
Management Deed dated [*] November 1999 between the MTN Issuer, Gracechurch
Receivables Trustee Limited, The Bank of New York, London branch and Barclays
Bank PLC.
"Series 99-1" is the series constituted by the Series 99-1 Supplement.
"Series 99-1 Issuer Account" means a bank account in the name of the Issuer
opened for the purpose of receiving certain distributions of principal and
interest in respect of the Series 99-1 MTNs, and currently located at Barclays
Bank PLC at its branch at 54 Lombard Street, London.
"Series 99-1 MTNs" means each of the Class A MTN, the Class B MTN and the Class
C MTN.
"Series 99-1 Supplement" means the Series 99-1 Supplement to the MTN Programme
dated [*] November 1999 between Gracechurch Receivables Trustee Limited,
Barclays Bank PLC and the MTN Issuer.
5. Interest
(a) Accrual of interest
Each Note bears interest on its Principal Amount Outstanding (as defined
in Condition 6(c)) from (and including) [*] November 1999 (the "Issue Date").
Interest in respect of the Class A1 Notes is payable in arrear in pounds
sterling; interest in respect of the Class A2 Notes is payable in arrear in
Euro; and interest in respect of the Class A3 Notes, the Class B Notes and the
Class C Notes is payable in arrear in US$ on each Interest Payment Date.
"Interest Payment Date" means the following dates:
(i) with respect to the Class A1 Notes and the Class A2 Notes during the
Revolving Period or the Controlled Accumulation Period, the third
Distribution Date following the preceding Interest Payment Date, or, in
the case of the first Interest Payment Date, 15 February 2000 (or, if 15
February 2000 is not a Business Day, the next succeeding Business Day);
or
(ii) (a) at all times with respect to the Class A3 Notes, the Class B Notes
and the Class C Notes each Distribution Date and (b) with respect to the
Class A1 Notes and the Class A2 Notes, during the Rapid Amortisation
Period or the Regulated Amortisation Period each Distribution Date which
falls during such periods.
To the extent that the aggregate of the monies which are paid to the
Issuer under the Series 99-1 MTNs by the MTN Issuer on each Distribution Date
during an Interest Period (as defined below) is insufficient to pay the full
amount of interest on the Class A Notes or the Class B Notes or the Class C
Notes, respectively on the corresponding Interest Payment Date, payment of the
shortfall ("Deferred Interest"), which will be borne by each Class A Note,
Class B Note or Class C Note, as the case may be, in a proportion equal to the
proportion that the Principal Amount Outstanding of the relevant Note bears to
the aggregate Principal Amount Outstanding of all the Notes of the same class
(in each case as determined on the Interest Payment Date on which such Deferred
Interest arises), will be deferred until the earlier of (a) the Interest
Payment Date thereafter on which funds are available to the Issuer (by being
paid to the Issuer under the Series 99-1 MTNs on each Distribution Date during
the relevant Interest Period) to pay such Deferred Interest to the extent of
such available funds and (b) [* 200*]. Such Deferred Interest will accrue
interest ("Additional Interest") at the then applicable Rate of Interest
(calculated as provided in Condition 5(b)) plus a margin of 2 per cent. per
annum, and payment of any Additional Interest will also be deferred until the
Interest Payment Date thereafter on which funds are available to the Issuer to
pay such Additional Interest to the extent of such available funds.
Each period beginning on (and including) the Issue Date or any Interest
Payment Date and ending on (but excluding) the next Interest Payment Date is
herein called an "Interest Period"; Provided, however, that with respect to an
Interest Period that commences during the Revolving Period or the Controlled
Accumulation Period and ends during the Rapid Amortisation Period, such
Interest Period will end on the originally scheduled Interest Payment Date. The
first interest payment on each of the Notes other than the Class A1 Notes and
the Class A2 Notes will be made on the Interest Payment Date falling on 15
February 2000 (or, if 15 February 2000 is not a
G-5
<PAGE>
Business Day, the next succeeding Business Day) in respect of the Interest
Period from (and including) the Issue Date to (but excluding) 15 February 2000
(or, if 15 February 2000 is not a Business Day, the next succeeding Business
Day) and, in the case of the Class A3 Notes, the Class B Notes and the Class C
Notes on the Interest Payment Date falling on 15 January 2000 or, if 15 January
2000 is not a Business Day, the next succeeding Business Day) in respect of the
Interest Period from and including the Issue Date to (but excluding) 15 January
2000 (or, if 15 January 2000 is not a Business Day, the next succeeding
Business Day).
Interest will cease to accrue on any part of the Principal Amount
Outstanding of a Note from the due date for redemption unless, upon due
presentation, payment of principal is improperly withheld or refused, in which
case it will continue to bear interest in accordance with this Condition (as
well after as before judgment) until whichever is the earlier of (i) the day on
which all sums due in respect of such Note up to that day are received by or on
behalf of the relevant Noteholder and (ii) the day which is seven days after
the Principal Paying Agent or the Note Trustee has notified the relevant class
of Noteholders either in accordance with Condition 14 or individually that it
has received all sums due in respect of the relevant class of Notes up to such
seventh day (except to the extent that there is any subsequent default in
payment).
"Controlled Accumulation Period" means (unless the Regulated Amortisation
Period or the Rapid Amortisation Period has commenced) the period commencing on
the close of business on [*] or such later date as is determined in accordance
with the provisions of the Series 99-1 Supplement (such later date falling no
later than [*]), and ending (for the purposes of these Conditions) on the first
to occur of (a) the commencement of the Rapid Amortisation Period, (b) the day
the Investor Interest is reduced to zero and (c) the Distribution Date falling
in [*].
"Distribution Date" means 15 January 2000 and the 15th day of each
calendar month thereafter or, if such day is not a Business Day, the next
succeeding Business Day.
"Quotation Date" means, in relation to any period for which an interest
rate is to be determined in respect of the Class A1 Notes, the first day of
such period, in relation to any period for which an interest rate is to be
determined in respect of the Class A2 Notes, the second Target Settlement Date
before the first day of the period and, in relation to any period for which an
interest rate is to be determined in respect of the Class A3 Notes, the Class B
Notes and/or the Class C Notes, the second Business Day before the first day of
such period.
"Rapid Amortisation Period" means the period commencing on the day on
which a Pay Out Event (not being a Regulated Amortisation Trigger Event) is
deemed to occur pursuant to the provisions of the Series 99-1 Supplement, and
ending (for the purposes of these Conditions) on the earlier of (i) the day on
which the Investor Interest is reduced to zero and (ii) the Distribution Date
falling in [*] [200*].
"Regulated Amortisation Period" means the period commencing on the day on
which a Regulated Amortisation Trigger Event is deemed to occur pursuant to the
provisions of the Series 99-1 Supplement and ending (for the purposes of these
Conditions) on the earlier of (i) the day on which the Investor Interest is
reduced to zero and (ii) the Distribution Date falling in [*].
"Revolving Period" means the period from and including the Issue Date to,
but not including the earlier of the date of commencement of (a) the Controlled
Accumulation Period (b) the Regulated Amortisation Period and (c) the Rapid
Amortisation Period.
(b) Rate of Interest
The rate of interest applicable to each Class of the Notes (the "Rate of
Interest") for each Interest Period will be determined by the Agent Bank on the
following basis:
(i) the Agent Bank will
(A) determine the offered quotation to leading banks in the London
interbank market for three-month sterling deposits (in the case of
the Class A1 Notes) and one-month US$ deposits (in the case of the
Class A3 Notes, the Class B Notes and the Class C Notes) by
reference to the display designated as the British Bankers
Association LIBOR Rates as quoted on the Dow Jones/Telerate Screen
No. 3750 (or (aa) such other page as may replace Telerate Screen
No. 3750 on that service for the purposes of displaying such
information or (bb) if that service ceases to display such
information, such page as displays such information on such
service (or, if more than one, that one previously approved in
writing by the Trustee) as may replace the Dow Jones/Telerate
Monitor); and
(B) (in respect of the Class A2 Notes) determine the offered quotation
to leading banks in the euro-zone interbank market for three-month
euro deposits by reference to the display designated as the
EURIBOR Rates as quoted on the Dow Jones/Telerate Screen No. 248
(or (aa) such other page as may replace Telerate Screen No. 248 on
that service for the purposes of displaying such information or
(bb) if that service ceases to display such information, such page
as displays such
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information on such service (or, if more than one, that one
previously approved in writing by the Trustee) as may replace the
Dow Jones/Telerate Monitor),
in each case as at or about 11.00 a.m. (London time) on the relevant
Quotation Date therefor, (each such rate hereinafter referred to as the
"Screen Rate");
(ii) if, on any Quotation Date, the Screen Rate is unavailable, the Agent Bank
will:
(A) in respect of any quotation for sterling and/or dollars request
the principal London office of each of four major banks selected
by the Agent Bank (together the "Reference Banks") to provide the
Agent Bank with its offered quotation to leading banks in the
London interbank market for three-month sterling deposits (in the
case of the Class A1 Notes) and one month US$ deposits (in the
case of the Class A3 Notes, the Class B Notes and the Class C
Notes) as at approximately 11.00 a.m. (London time) on the
Quotation Date in question and in an amount that is representative
for a single transaction in that market at that time and determine
the arithmetic mean (rounded upwards to four decimal places) of
such quotations; and
(B) in respect of any quotation for euro, request the principal euro-
zone office of each of four major banks in the euro-zone interbank
market to provide a quotation of the rate at which deposits in
euro are effected by it at approximately 11.00 a.m. (London time)
on the Quotation Date in question to prime banks in the euro-zone
interbank market for three month euro deposits and in an amount
that is representative for a single transaction in the market at
that time and determine the arithmetic mean (rounded, if necessary
to the nearest one hundred thousandth of a percentage point,
0.000005 being rounded upwards) of such quotations;
(iii) if on any Quotation Date the Screen Rate is unavailable and two or three
only of the Reference Banks provide offered quotations, the Rate of
Interest for the relevant Interest Period shall be determined in
accordance with the provisions of paragraph (ii) on the basis of the
arithmetic mean (rounded in the case of sterling or dollar quotations
upwards to four decimal places or, in the case of a euro quotation, to
the nearest one hundred thousandth of a percentage point (0.00005 being
rounded upwards)) of the offered quotations of those Reference Banks or,
as the case may be, euro-zone banks providing the offered quotations; and
(iv) if fewer than two such quotations are provided by the Reference Banks or,
in the case of euros, the euro-zone banks, as requested, the Agent Bank
will determine the arithmetic mean (rounded if necessary as aforesaid) of
the rates quoted by major banks in London or (in the case of quotations
for euro), in the euro-zone, selected by the Agent Bank, at approximately
11.00 a.m. (London time) on the relevant Quotation Date for loans in
pounds sterling (in the case of the Class A1 Notes), loans in euro (in
the case of the Class A2 Notes) and loans in US$ (in the case of the
Class A3 Notes, the Class B Notes and the Class C Notes) to leading
European banks for a period equal to the relevant Interest Period and in
an amount that is representative for a single transaction in that market
at that time,
and the Rate of Interest for such Interest Period shall be the sum of (a) (i)
in the case of the Class A1 Notes [*] per cent. per annum, (ii) in the case of
the Class A2 Notes [*] per cent. per annum, (iii) in the case of the Class A3
Notes [*] per cent. per annum, (iv) in the case of the Class B Notes [*] per
cent. per annum and (v) in the case of the Class C Notes [*] per cent. per
annum (each such percentage a "relevant margin") and (b) the Screen Rate or, as
the case may be, the arithmetic mean so determined; provided that if the Agent
Bank is unable to determine the Screen Rate or, as the case may be, an
arithmetic mean in accordance with the above provisions in relation to any
Interest Period, the Rate of Interest applicable to each Class of Note during
such Interest Period will be the sum of the relevant margin and the Screen Rate
or, as the case may be, the arithmetic mean last determined in relation to such
Class of Notes in respect of a preceding Interest Period.
(c) Calculation of Interest Amount
The Agent Bank will, as soon as practicable after 11.00 a.m. (London time)
the Quotation Date in relation to each Interest Period, calculate the amount of
interest (the "Interest Amount") payable in respect of each Note for such
Interest Period. The Interest Amount will be calculated by applying the Rate of
Interest for such Interest Period to the Principal Amount Outstanding of such
Note during such Interest Period, multiplying the product by the actual number
of days in such Interest Period divided by, in the case of the Class A1 Notes,
365 (or 366 in the case of an Interest Period ending in a leap year) or, in the
case of the Class A2 Notes, the Class A3 Notes, the Class B Notes and the Class
C Notes divided by 360 and rounding the resulting figure to (i) in the case of
the Class A1 Notes the nearest penny (half a penny being rounded upwards); (ii)
in the case of the Class A2 Notes the nearest euro 0.01 (half a cent being
rounded upwards); and (iii), in the case of the Class A3 Notes, the Class B
Notes and the Class C Notes the nearest US$ 0.01 (half a cent being rounded
upwards). On each Interest Payment Date, the Agent Bank shall determine the
actual amount of interest which will be paid on the Notes on that Interest
Payment Date and the amount of Deferred Interest (if any) on the Notes in
respect of the related Interest Period and the amount of Additional Interest
(if any) which will be paid on such Interest Payment Date.
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The amount of Additional Interest shall be calculated by applying the relevant
Rate of Interest for the Notes (plus a margin of 2 per cent. per annum) to the
Deferred Interest and any Additional Interest from prior Interest Periods which
remains unpaid, multiplying by the actual number of days in the relevant
Interest Period and dividing, by, in the case of the Class A1 Notes, 365 or, in
the case of an Interest Period ending in a leap year, 366 or, in the case of
the Class A2 Notes, the Class A3 Notes, the Class B Notes and the Class C Notes
dividing by 360 and rounding the resultant figure to (i), in the case of the
Class A1 Notes the nearest penny (half a penny being rounded upwards); (ii) in
the case of the Class A2 Notes the nearest euro 0.01 (half a cent being rounded
upwards); and (iii), the case of the Class A3 Notes, the Class B Notes and the
Class C Notes the nearest US$ 0.01 (half a cent being rounded upwards). In the
event that, on any Interest Payment Date, the amount of monies which are paid
to the Issuer by the MTN Issuer in respect of the MTNs are insufficient to pay
in full the Interest Amount in respect of the relevant class of Notes, any
outstanding Deferred Interest and any Additional Interest due on such Interest
Payment Date, such monies will be applied first to the payment of such Interest
Amount, secondly to the payment of any outstanding Deferred Interest and
thereafter the payment of any Additional Interest in respect of the relevant
class of Notes.
(d) Publication
The Agent Bank will cause each Rate of Interest, Interest Amount, amount
of Deferred Interest (if any) and amount of Additional Interest (if any)
determined by it, together with the relevant Interest Payment Date, to be
notified to the Issuer, the Paying Agents, the Note Trustee and, for so long as
the Notes are listed on the London Stock Exchange Limited (the "London Stock
Exchange"), the London Stock Exchange as soon as practicable after such
determination but in any event not later than the seventh day thereafter or
such earlier day as the London Stock Exchange may require and will cause the
same to be published in accordance with Condition 14 as soon as possible
thereafter. The Agent Bank will be entitled to recalculate any Interest Amount
and amount of Additional Interest (on the basis of the foregoing provisions)
without notice in the event of an extension or shortening of the relevant
Interest Period.
(e) Notifications etc.
All notifications, opinions, determinations, certificates, calculations,
quotations and decisions given, expressed, made or obtained for the purposes of
this Condition, whether by the Reference Banks (or any of them) or the Agent
Bank or the Note Trustee will (in the absence of wilful default, bad faith or
manifest error) be binding on the Issuer, the Paying Agents, the Note Trustee,
the Reference Banks, the Agent Bank, the Noteholders and the Couponholders and
(subject as aforesaid) no liability to any such person will attach to the
Reference Banks, the Agent Bank or the Note Trustee in connection with the
exercise or non- exercise by them or of them of their powers, duties and
discretions for such purposes.
(f) Interpretation
(i) In this Condition, "Business Day" means a day other than a Saturday, a
Sunday or a day on which banking institutions in London, England and New
York, New York are authorised or obliged by law or executive order to be
closed and which is also a Target Settlement Date (as defined below); and
(ii) "Target Settlement Date" means any day on which the Trans-European
Automated Real-time Group Settlement Express Transfer (TARGET) System is
open.
(g) Failure of Agent Bank
If the Agent Bank fails at any time to determine a Rate of Interest or to
calculate an Interest Amount, amount of Deferred Interest (if any) or amount of
Additional Interest (if any), as aforesaid, the Note Trustee (or its appointed
agent), without accepting any liability therefor, will determine such Rate of
Interest as it considers fair and reasonable in the circumstances (having such
regard as it thinks fit to paragraph (b) above) or (as the case may be)
calculate such Interest Amount, amount of Deferred Interest (if any) or amount
of Additional Interest (if any), in accordance with paragraph (c) above, and
each such determination or calculation shall be deemed to have been made by the
Agent Bank.
(h) Reference Banks
The Issuer will ensure that, so long as any of the Notes remain
outstanding, there will at all times be four Reference Banks.
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6. Redemption and Purchase
(a) Scheduled Redemption
(i) Class A Notes
Unless previously purchased and cancelled or unless the Regulated
Amortisation Period or the Rapid Amortisation Period has earlier
commenced, the Class A1 Notes, the Class A2 Notes and the Class A3
Notes will be redeemed on the Interest Payment Date which falls in
November 2002 (the "Series 99-1 Scheduled Redemption Date") pari
passu, pro rata, to their respective Class Percentages to the
extent of the principal amount deposited in the Series 99-1 Issuer
Account by the MTN Issuer on the Series 99-1 Scheduled Redemption
Date in accordance with the terms and conditions of the Class A
MTN. If the principal amount deposited to the Series 99-1
Scheduled Redemption Date by the MTN Issuer in the Series 99-1
Issuer Account is less than the aggregate of (a) the Principal
Amount Outstanding of the Class A1 Notes, (b) the final exchange
amount payable by the Issuer to the Swap Counterparty on the
Series 99-1 Scheduled Redemption Date under the Euro Swap
Agreement and (c) the final exchange amount payable by the Issuer
to the Swap Counterparty on the Series 99-1 Scheduled Redemption
Date under the Dollar A3 Swap Agreement, then the Rapid
Amortisation Period will commence with effect from the Series 99-1
Scheduled Redemption Date.
(ii) Class B Notes
Unless previously purchased and cancelled or unless the Regulated
Amortisation Period or the Rapid Amortisation Period has earlier
commenced, the Class B Notes will be redeemed on the Series 99-1
Scheduled Redemption Date pari passu, pro rata to the extent of
the principal amount deposited in the Series 99-1 Issuer Account
by the MTN Issuer on the Series 99-1 Scheduled Redemption Date in
accordance with the terms and conditions of the Class B MTN. If
the principal amount deposited to the Series 99-1 Scheduled
Redemption Date by the MTN Issuer in the Series 99-1 Issuer
Account is less than the final exchange amount payable by the
Issuer to the Swap Counterparty on the Series 99-1 Scheduled
Redemption Date under the Dollar B Swap Agreement then the Rapid
Amortisation Period will commence with effect from the Series 99-1
Scheduled Redemption Date.
(iii) Class C Notes
Unless previously purchased and cancelled or unless the Rapid
Amortisation Period has earlier commenced, the Class C Notes will
be redeemed on Series 99-1 Scheduled Redemption Date pari passu,
pro rata to the extent of the principal amount deposited in the
Series 99-1 Issuer Account by the MTN Issuer on the Series 99-1
Scheduled Redemption Date in accordance with the terms and
conditions of the Class C MTN. If the principal amount deposited
on the Series 99-1 Scheduled Redemption Date by the MTN Issuer to
the Series 99-1 Issuer Account is less than the final exchange
amount payable by the Issuer to the Swap Counterparty on the
Series 99-1 Scheduled Redemption Date under the Dollar C Swap
Agreement then the Rapid Amortisation Period will commence with
effect from the Series 99-1 Scheduled Redemption Date.
If the Rapid Amortisation Period commences in the circumstances referred
to in (i) above, then on each Interest Payment Date which thereafter occurs
during the Rapid Amortisation Period, the Class A1 Notes, the Class A2 Notes
and the Class A3 Notes will be redeemed in part pari passu, pro rata to their
respective Class Percentages to the extent of the amount deposited to the
Series 99-1 Issuer Account in respect of the Class A MTN until the earlier of
(a) such time as the Class A1 Notes, the Class A2 Notes and the Class A3 Notes
have been paid in full and [*] [200*].
If the Rapid Amortisation Period commences in the circumstances referred
to in (ii) above, then on each Interest Payment Date which thereafter occurs
during the Rapid Amortisation Period, the Class B Notes occurs during the Rapid
Amortisation Period, the Class B Notes will be redeemed pro rata, in part to
the extent of the amount which is deposited to the Series 99-1 Issuer Account
in respect of the Class B MTN until the earlier of (a) such time as the Class B
Notes have been paid in full and (b) [*][200*].
If the Rapid Amortisation Period commences in the circumstances referred
to in (iii) above, then on each Interest Payment Date which thereafter occurs
during the Rapid Amortisation Period, the Class C Notes will be redeemed pro
rata in part to the extent of the amount which is deposited to the Series 99-1
Issuer Account in respect of the Class C MTN until the earlier of (a) such
time as the Class C Notes have been paid in full and (b) [*] [200*].
With respect to any Interest Payment Date (including the Series 99-1
Scheduled Redemption Date) on which the MTN Issuer deposits monies into the
Series 99-1 Issuer Account Issuer to be applied in or towards redemption of any
Class of Notes as referred to in this Condition 6(a) or in Condition 6(b), the
amount so
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deposited shall be the "Available Sterling Redemption Funds" of such Class for
such Interest Payment Date. On each Interest Payment Date, the Agent Bank shall
determine (i) the amount of each "Principal Payment" payable on each Note, and
(ii) the Principal Amount Outstanding of each Note of that Class on the first
day of the next following Interest Period (after deducting any Principal
Payment due to be made in respect of each of that Class of Notes on the
Interest Payment Date).
The Principal Payment payable on each Class A1 Note, each Class A2 Note
and each Class A3 Note shall be determined in accordance with the formula set
out below
PP = SR (CP x ASRF) x 1
---
N
Where:
PP = Principal Payment
SR = the euro, or as the case may be, dollar exchange rate specified in the
relevant Swap Agreement for converting on such date sterling sums into
euro or, as the case may be, dollars under the Euro Swap Agreement or,
as the case may be, the Dollar A3 Swap Agreement provided that in the
case of the Class A1 Notes, "SR" shall equal 1.
CP = the applicable Class Percentage for each Class A1 Note, Class A2 Note
or, as the case may be, Class A3 Note.
ASRF = Available Sterling Redemption Funds for the relevant class of Notes.
N = the number of Class A1 Notes, Class A2 Notes or, as the case may be,
Class A3 Notes outstanding.
The Principal Payment Payable on each Class B Note shall be equal to the
product of (a) the dollar exchange rate specified in the Dollar B Swap
Agreement for converting on such date sterling sums into dollars and (b) the
Available Sterling Redemption Funds for the Class B Notes divided by the number
of Class B Notes then outstanding.
The Principal Payment Payable on each Class C Note shall be equal to the
product of (a) the dollar exchange rate specified in the Dollar C Swap
Agreement for converting on such date sterling sums into dollars and (b) the
Available Sterling Redemption Funds for the Class C Notes divided by the number
of Class C Notes then outstanding.
The Agent Bank will cause each Principal Payment and Principal Amount
Outstanding to be notified to the Issuer, the Paying Agents, the Note Trustee
and, for so long as the Notes are listed on the London Stock Exchange, the
London Stock Exchange, as soon as practicable after such determination, but in
any event not later than the seventh day thereafter or such earlier day as the
London Stock Exchange may require and will cause the same to be published in
accordance with Condition 14 as soon as possible thereafter.
All notifications, opinions, determinations, certificates, calculations,
quotations and decisions given, expressed, made or obtained for the purposes of
this Condition by the Agent Bank will (in the absence of wilful default, bad
faith or manifest error) be binding on the Issuer, the Paying Agents, the Note
Trustee, the Noteholders and the Couponholders and (subject as aforesaid) no
liability to any such person will attach to the Agent Bank in connection with
the exercise or non-exercise by it of its powers, duties and discretions for
such purposes.
If the Agent Bank fails at any time to determine a Principal Payment or
Principal Amount Outstanding as aforesaid, the Note Trustee shall, without
accepting any liability therefore, calculate such Principal Payment or
Principal Amount Outstanding in accordance with the above provisions of this
Condition, and each such determination or calculation shall be deemed to have
been made by the Agent Bank. Any such determination or calculation will be
binding on the Issuer, the Paying Agents, the Note Trustee, the Noteholders and
the Couponholders.
In this Condition 6(a) and in Condition 6(b) "Class Percentage" means (a)
[*] per cent. in respect of the Class A1 Notes, (b) [*] per cent. in respect of
the Class A2 Notes and (c) [*] per cent. in respect of the Class A3 Notes.
(b) Mandatory Early Redemption
If the Regulated Amortisation Period or the Rapid Amortisation Period
commences in respect of the Class A Notes prior to the Series 99-1 Scheduled
Redemption Date, then on each Interest Payment Date which thereafter occurs
during the regulated Amortisation Period, the Class A1 Notes, the Class A2
Notes and the Class A3 Notes will be redeemed pari passu, pro rata to their
respective Class Percentages to the extent of the amount which is deposited
into the Series 99-1 Issuer Account by way of redemption of the Class A MTN
until the earlier
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of (a) such time as the Class A1 Notes, the Class A2 Notes and the Class A3
Notes have has been redeemed in full and (b) [*][200*].
If the Regulated Amortisation Period or the Rapid Amortisation Period
commences in respect of the Class B Notes prior to the Series 99-1 Scheduled
Redemption Date, then on each Interest Payment Date which thereafter occurs,
during the Regulated Amortisation Period or, as the case may be, the Rapid
Amortisation Period, the Class B Notes will be redeemed pro rata to the extent
of the amount which is deposited into the Series 99-1 Issuer Account by way of
redemption of the Class B MTN until the earlier of (a) such time as the Class B
Notes have been redeemed in full and (b) [*][200*].
If the Regulated Amortisation Period or the Rapid Amortisation Period
commences in respect of the Class C Notes prior to the Series 99-1 Scheduled
Redemption Date, then on each Interest Payment Date which thereafter occurs
during the Regulated Amortisation Period, or as the case may be, the Rapid
Amortisation Period, the Class C Notes will be redeemed pro rata to the extent
of the amount which is deposited into the Series 99-1 Issuer Account by way of
redemption of the Class C MTN until the earlier of (a) such time as the Class C
Notes have been redeemed in full and (b) [*][200*].
If the Rapid Amortisation Period commences as a result of the termination of
any or all of the Swap Agreements, the amount falling due for redemption on the
next following Interest Payment Date in respect of the Class A2 Notes, the
Class A3 Notes, the Class B Notes and the Class C Notes will be adjusted by the
amount (the "Notional Swap Termination Amount") notionally payable on
termination of a hypothetical currency and rate transaction (the "Notional
Swap") referable to such class or sub-class of Notes, the principal terms of
which are described below.
If the Notional Swap Termination Amount in respect of any class or sub-
class of Notes:
(a) equals zero (neither Notional Party A (as defined below), nor Notional
Party B (as defined below) having a right to payment), the amount falling
due for redemption on such class or sub-class of Notes will not be
adjusted; or
(b) is a negative figure (Notional Party A owing a payment to Notional Party
B) an amount in euros (in the case of the Class A2 Notes) or dollars (in
the case of the Class A3 Notes, the Class B Notes and the Class C Notes)
equal to the absolute value of such negative amount will be added to the
amount falling due for redemption on such class or sub-class of Notes;
and
(c) is a positive figure (Notional Party B owing a payment to Notional Party
A) an amount in euros (in the case of the Class A2 Notes) or dollars (in
the case of the Class A3 Notes, the Class B Notes and the Class C Notes)
equal to the absolute value of such positive amount will be deducted from
the amount falling due for redemption on such class or sub-class of
Notes,
and such adjusted amount falling due for redemption on the Class A2 Notes, the
Class A3 Notes, the Class B Notes and/or the Class C Notes shall be
respectively the "Adjusted A2 Redemption Amount", the "Adjusted A3 Redemption
Amount", the "Adjusted B Redemption Amount" and the "Adjusted C Redemption
Amount" which adjusted redemption amount may be more or less than the Principal
Amount Outstanding of the relevant class or sub-class of Note.
Under the terms of a Notional Swap with an Effective Date of [*] November
1999 and a Termination Date of [*][200*]:
(A) one party ("Notional Party A") will notionally pay to the other party
("Notional Party B") on 15 February, 15 May, 15 August and 15 November of
each year commencing on 15 February 2000 an amount calculated in
accordance with the Notional Swap at a floating rate (determined in
accordance with 3 month EUR-LIBOR-BBA) plus a margin of [*]% per annum on
the Principal Amount Outstanding on the Class A2 Notes; and
(B) Notional Party B will notionally pay to Notional Party A on the 15th day
of each month of each year commencing on 15 January 2000 an amount
calculated in accordance with the Notional Swap at a floating rate
(determined in accordance with 3 month GBP-LIBOR-BBA) plus a margin of
[*]% per annum on a notional sterling amount of L[*].
Under the terms of a Notional Swap with an Effective Date of [*] November
1999 and a Termination Date of [*][200*]:
(A) one party ("Notional Party A") will notionally pay to the other party
("Notional Party B") on the 15th day of each month of year commencing on
15 January 2000 an amount (determined in accordance with one month USD-
LIBOR-BBA) plus a margin of [*]% per annum on the Principal Amount
Outstanding of the Class A3 Notes; and
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(B) Notional Party B will notionally pay to Notional Party A on the 15th day
of each month of each year commencing on 15 January 2000 an amount
calculated in accordance with the Notional Swap at a floating rate
(determined in accordance with 3 month GBP-LIBOR-BBA) plus a margin of
[*]% per annum on a notional sterling amount of L[*].
Under the terms of a Notional Swap with an Effective Date of [*] November
1999 and a Termination Date of [*][200*]:
(A) one party ("Notional Party A") will notionally pay to the other party
("Notional Party B") on the 15th day of each month of year commencing on
15 January 2000 an amount (determined in accordance with one month USD-
LIBOR-BBA) plus a margin of [*]% per annum on the Principal Amount
Outstanding of the Class B Notes; and
(B) Notional Party B will notionally pay to Notional Party A on the 15th day
of each month of each year commencing on 15 January 2000 an amount
calculated in accordance with the Notional Swap at a floating rate
(determined in accordance with 3 month GBP-LIBOR-BBA) plus a margin of
[*]% per annum on a notional sterling amount of L[*].
Under the terms of a Notional Swap with an Effective Date of [*] November
1999 and a Termination Date of [*][200*]:
(A) one party ("Notional Party A") will notionally pay to the other party
("Notional Party B") on the 15th day of each month of year commencing on
15 January 2000 an amount (determined in accordance with one month USD-
LIBOR-BBA) plus a margin of [*]% per annum on the Principal Amount
Outstanding of the Class C Notes; and
(B) Notional Party B will notionally pay to Notional Party A on the 15th day
of each month of each year commencing on 15 January 2000 an amount
calculated in accordance with the Notional Swap at a floating rate
(determined in accordance with 3 month GBP-LIBOR-BBA) plus a margin of
[*]% per annum on a notional sterling amount of L[*].
The Agent Bank will cause the Adjusted A2 Redemption Amount, the Adjusted
A3 Redemption Amount, the Adjusted B Redemption Amount and the Adjusted C
Redemption Amount to be published in accordance with Condition 14 and to be
notified to the Note Trustee and each of the Paying Agents and to Noteholders
of the relevant class as soon as possible after determination. If the Agent
Bank does not at any time for any reason so determine the Adjusted A2
Redemption Amount the Adjusted A3 Redemption Amount, the Adjusted B Redemption
Amount or the Adjusted C Redemption Amount, the Note Trustee shall do so and
such determination or calculation shall be deemed to have been made by the
Agent Bank. In doing so, the Note Trustee shall apply all of the provisions of
this Condition, to the extent that, in its opinion, it can do so. In all other
respects it shall do so in such manner as it shall deem fair and reasonable in
all the circumstances. Any such determination or calculation made by the Note
Trustee shall be binding on the relevant class of Noteholders.
(c) Final Redemption
If the Notes have not previously been purchased and cancelled or redeemed
in full pursuant to Condition 6(a) or Condition 6(b) above, the Notes will be
finally redeemed at their then Principal Amount Outstanding or, where
applicable in respect of the Class A2 Notes, the Class A3 Notes, the Class B
Notes and the Class C Notes, respectively at the Adjusted A2 Redemption Amount,
the Adjusted A3 Redemption Amount, the Adjusted B Redemption Amount and the
Adjusted C Redemption Amount on the Distribution Date falling in [*][200*].
In these Conditions, "Principal Amount Outstanding" means, in relation to a
Note on any date, the principal amount of that Note on the Issue Date less the
aggregate amount of all principal payments in respect of that Note that have
been paid by the Issuer to the Noteholder concerned under this Condition 6
prior to such date in accordance with these Conditions.
(d) Redemption for Taxation and Other Reasons
If:
(i) (A) the Issuer, on the occasion of the next date for payment in
respect of any class of the Notes or Coupons, would be
required to make any withholding or deduction as referred
to in Condition 8 or would suffer tax in respect of its
income, profits or gains so that in any such case it would
be unable to make payment of the full amount due; or
(B) the Issuer, on the occasion of the next date for payment in
respect of any of the Swap Agreements, would be required to
make any withholding or deduction as referred to in
Condition 8 (applying the said Condition to such amount
mutatis mutandis for this purpose); or
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(C) the amount receivable by the Issuer in respect of the
Series 99-1 MTNs or any Swap Agreement is (or will be on
the next payment date in respect thereof) reduced as the
result of a withholding or deduction as referred to in
Condition 8 (applying the said Conditions to such amount
mutatis mutandis for this purpose),
the Issuer shall forthwith upon becoming aware of such
circumstance so inform the Note Trustee and the Swap Counterparty
and shall consult in good faith with the Note Trustee and the Swap
Counterparty as to whether the Issuer is able to take any steps to
avoid the relevant deduction or withholding referred to in (A),
(B) or (C) above (including arranging) the substitution of another
company incorporated in another jurisdiction approved by the Note
Trustee as the principal debtor under the Notes, or changing its
tax residence to another jurisdiction approved by the Note Trustee
and the Swap Counterparty under the Swap Agreement. The Issuer
shall be under no obligation to take any such steps and in
particular (but without limitation) shall not take any such steps
which would directly or indirectly prejudice the position of the
issuer or any Noteholder or Couponholder, but not so as in any
event to prejudice the position of the Swap Counterparty under any
Swap Agreement. If such circumstances shall not, in the opinion of
the Issuer and the Note Trustee, have been avoided within 20 days
of notification by the Issuer to the Note Trustee and the Swap
Counterparty, then it shall give notice thereof to the Noteholders
in accordance with Condition 14 and the Noteholders may, within a
period of 60 days from the date of such notice, by Extraordinary
Resolution require the Issuer to redeem all, but not some only, of
the Notes a their then Principal Amount Outstanding on the
Interest Payment Date next following such Extraordinary
Resolution; or
(ii) The Swap Counterparty shall forthwith upon becoming aware of such
circumstance so inform the Issuer and the Note Trustee and shall
use its best endeavours (Provided that using its best endeavours
will not require it to incur any loss, excluding immaterial,
incidental expenses) to arrange the substitution of an affiliate
incorporated in another jurisdiction as the Swap Counterparty
under the Swap Agreement or to change the office through which it
acts as Swap Counterparty, but not so as, in any event, to (1)
result in the ratings of the Notes by any Agency then rating the
Notes to be reduced or adversely affected by reference to the
ratings which would otherwise have applied to the Notes if such
circumstance described in this Condition 6(d)(ii) had not occurred
or (2) otherwise prejudice the position of the Issuer under such
Swap Agreement. If the Swap Counterparty is unable to arrange such
substitution or change, the Swap Counterparty shall so inform the
Issuer and the Note Trustee and shall use its best endeavours
(which will not require the Swap Counterparty to incur a loss,
excluding immaterial, incidental expenses) to arrange the
substitution of another company incorporated in another
jurisdiction to act as the Swap Counterparty under the Swap
Agreement but not as in any event to (X) result in the ratings of
the Notes by any rating agency to be reduced or adversely affected
by reference to the ratings which would otherwise have applied to
the Notes if such circumstance described in this Condition
6(d)(ii) had not occurred or (Y) otherwise prejudice the position
of the Issuer under such Swap Agreement. If such circumstance
shall not, in the opinion of the Issuer and the Note Trustee, have
been avoided within 20 days of notification by the Swap
Counterparty to the Issuer and the Note Trustee then the Issuer
shall give notice thereof to the Noteholders in accordance with
Condition 14 and the Noteholders may, within a period of 60 days
from the date of such notice, by Extraordinary Resolution require
the Issuer to redeem all, but not some only, of the Notes at their
then Principal Amount Outstanding on the Interest Payment Date
next following such Extraordinary Resolution.
Notwithstanding the foregoing, if any withholding or deduction referred to
in Condition 6(d)(i)(A) arises by reason of the failure by the relevant
Noteholder to comply with any applicable procedures required to establish non-
residence or other similar claim for exemption from such tax, then Condition 8
shall apply and such Noteholder shall have no right to be included in any
Noteholders calling for redemption of the Notes under this Condition 6(d).
(e) Other Redemption
The Issuer shall not be entitled to redeem the Notes otherwise than as
provided in paragraphs (a), (b), (c) and (d) above.
(f) Purchase
The Issuer, and/or related companies of it may at any time purchase Notes
in the open market or otherwise at any price, provided that all unmatured
Coupons relating thereto are surrendered and purchased therewith.
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(g) Cancellation
All Notes redeemed or purchased pursuant to the foregoing provisions and
any unmatured Coupons attached to or surrendered with them shall be cancelled
forthwith and may not be reissued or resold.
(h) Post Maturity Call Option
All of the Noteholders will, at the request of Gracechurch Card (Holdings)
Limited, sell all (but not some only) of their holdings of Notes to Gracechurch
Card (Holdings) Limited, pursuant to the option granted to it by the Note
Trustee (on behalf of the Noteholders) (the "Post Maturity Call Option") to
acquire all (but not some only) of the Notes (plus accrued interest thereon),
for the consideration of one penny per Note, on the earlier of (i) any date
falling after [*][200*] and (ii) in the event that the Security is enforced,
the date on which the Note Trustee determines that the proceeds of such
enforcement are insufficient after payment of all other claims ranking in
priority to the Notes to pay in full any amount due in respect of the Notes,
after paying in full any amounts available to pay amounts outstanding under the
Notes.
Furthermore, each of the Noteholders acknowledges that the Note Trustee
has the authority and the power to bind Noteholders in accordance with the
terms and conditions set out in the Post Maturity Call Option and each
Noteholder, by subscribing for the relevant Note(s), agrees to be so bound.
7. Payments
(a) Principal
Payments of principal in respect of the Notes shall be made only against
presentation and (in the case of final redemption, provided that payment is
made in full) surrender of Notes at the specified office of any Paying Agent
(in the case of the Class A1 Notes and the Class A2 Notes) outside the United
States of America or (in the case of the Class A3 Notes, the Class B Notes and
the Class C Notes) inside the United States of America by sterling cheque (or,
in the case of the Class A2 Notes by euro cheque or in the case, of the Class
A3 Notes, the Class B Notes and the Class C Notes by US dollar cheque) drawn
on, or by transfer to a sterling account, Euro or US dollar account, as the
case may be maintained by the payee with, a bank in London, or in the case of
the Class A3 Notes, the Class B Notes and the Class C Notes) in New York.
(b) Interest
Payments of interest shall, subject to paragraph (g) below, be made only
against presentation and (provided that payment is made in full) surrender of
the appropriate Coupons at the specified office of any Paying Agent in the
manner described in paragraph (a) above.
(c) Payments subject to fiscal laws
All payments in respect of the Notes are subject in all cases to any
applicable fiscal or other laws and regulations, but without prejudice to the
provisions of Condition 8. No commissions or expenses shall be charged to the
Noteholders or Couponholders in respect of such payments.
(d) Unmatured Coupons void
On the due date for redemption of any Note, all unmatured Coupons relating
thereto (whether or not still attached) shall become void and no payment will
be made in respect thereof.
(e) Payments on business days
If the due date for payment of any amount in respect of any Note or Coupon
is not a business day in the place of presentation, the holder shall not be
entitled to payment in such place of the amount due until the next following
business day in such place and shall not be entitled to any further interest or
other payment in respect of any such delay.
In this paragraph, "business day" means, in respect of any place of
presentation, any day (other than a Saturday or Sunday) which is a Target
Settlement Date and on which banks are open for business in London, New York
and in such place of presentation and, in the case of payment by transfer to a
sterling or euro account as referred to above, on which dealings in foreign
currencies may be carried on in London and in such place of presentation and,
in the case of payment by transfer to a dollar account as referred to above, on
which dealings in foreign currencies may be carried out in New York and in such
place of presentation.
(f) Payments other than in respect of matured Coupons
Payments of interest other than in respect of matured Coupons shall be
made only against presentation of the relevant Notes at the specified office of
any Paying Agent in the manner described in paragraph (a) above.
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(g) Partial payments
If a Paying Agent makes a partial payment in respect of any Note or Coupon
presented to it for payment, such Paying Agent will endorse on such Note (in
respect of payments of principal) or on the Coupon (in respect of payments of
interest) a statement indicating the amount and date of such payment.
8. Taxation
All payments of principal and interest in respect of the Notes and the
Coupons shall be made free and clear of, and without withholding or deduction
for or on account of, any taxes, duties, assessments or governmental charges of
whatsoever nature imposed, levied, collected, withheld or assessed by any
jurisdiction (a "Relevant Jurisdiction") or any political subdivision or any
authority in or of any Relevant Jurisdiction having power to tax, unless such
withholding or deduction is required by the law (or by the authorities) of the
Relevant Jurisdiction. In that event the Issuer or the Paying Agents shall make
such payment after such withholding or deduction has been made and shall
account to the relevant authorities for the amount so required to be withheld
or deducted. Notwithstanding anything in these Conditions, neither the Issuer
nor the Paying Agents will be required to make any additional payments to
holders of Notes or, if Definitive Notes are issued, Coupons in respect of such
withholding or deduction whatsoever applicable to any payment of principal or
interest.
9. Events of Default
If any of the following events (each an "Event of Default") occurs and is
continuing:
(a) Non-payment: the Issuer fails to pay any amount of principal in respect
of the Notes within 7 days of the due date for payment thereof or fails
to pay any amount of interest in respect of the Notes within 15 days of
the due date for payment thereof; or
(b) Breach of other obligations: the Issuer defaults in the performance or
observance of any of its other obligations under or in respect of the
Notes, the Trust Deed, the Deed of Charge (other than, in any such case,
any obligation for the payment of any principal or interest on the Notes)
or the Paying Agency and Agent Bank Agreement and (except where such
default is incapable of remedy) such default remains unremedied for 30
days after the Note Trustee has given written notice thereof to the
Issuer, certifying that such default is, in the opinion of the Note
Trustee, materially prejudicial to the interests of the Noteholders; or
(c) Unsatisfied judgment: a judgment or order for the payment of any amount
is rendered against the Issuer and continues unsatisfied and unstayed for
a period of 30 days after the date thereof or, if later, the date therein
specified for payment; or
(d) Security enforced: a secured party and/or encumbrancer takes possession
or a receiver, administrative receiver, administrator, examiner, manager
or other similar officer is appointed, of the whole or any part of the
undertaking, assets and revenues of the Issuer or a distress or execution
is levied; or
(e) Insolvency etc: (i) the Issuer becomes insolvent or is unable to pay its
debts as they fall due, (ii) an administrator or liquidator of the Issuer
or the whole or any part of the undertaking, assets and revenues of the
Issuer is appointed (or application for any such appointment is made),
(iii) the Issuer takes any action for a readjustment or deferment of any
of its obligations or makes a general assignment or an arrangement or
composition with or for the benefit of its creditors or declares a
moratorium in respect of any of its indebtedness or any guarantee of
indebtedness given by it or (iv) the Issuer ceases or threatens to cease
to carry on all or any substantial part of its business; or
(f) Winding up etc: an order is made or an effective resolution is passed for
the winding up, liquidation or dissolution of the Issuer; or
(g) Failure to take action etc: any action, condition or thing at any time
required to be taken, fulfilled or done in order (i) to enable the Issuer
lawfully to enter into, exercise its rights and perform and comply with
its obligations under and in respect of the Notes and the Related
Documents or (ii) to ensure that those obligations are legal, valid,
binding and enforceable (except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganisation or other
similar laws affecting the enforcement of the rights of creditors
generally and as such enforceability may be limited by the effect of
general principles of equity); or
(h) Unlawfulness: it is or will become unlawful for the Issuer to perform or
comply with any of its obligations under or in respect of the Notes or
the Related Documents; or
(i) Government intervention: (i) all or any substantial part of the
undertaking, assets and revenues of the Issuer is condemned, seized or
otherwise appropriated by any person acting under the authority of any
national, regional or local government or (ii) the Issuer is prevented by
any such person from exercising normal control over all or any
substantial part of its undertaking, assets and revenues; or
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(j) a Swap Agreement is for any reason terminated early,
then the Note Trustee may at its discretion and, if so required by (a) the Swap
Counterparty or (b) holders of at least one-quarter of the aggregate Principal
Amount Outstanding of (i) the Class A Notes so long as any of the Class A Notes
remain outstanding, (ii) thereafter the Class B Notes so long as any of the
Class B Notes remain outstanding, and (iii) thereafter the Class C Notes or if
so directed by an Extraordinary Resolution as defined in the Trust Deed of (x)
the Class A Noteholders so long as any of the Class A Notes remain outstanding,
(y) thereafter by an Extraordinary Resolution of the Class B Notes so long as
any of the Class B Notes remain outstanding and (z) thereafter by an
Extraordinary Resolution of the Class C Notes (subject in each case to being
indemnified to its satisfaction), shall be bound to, give written notice (an
"Enforcement Notice") to the Issuer declaring the Notes to be immediately due
and payable, whereupon they shall become immediately due and payable at their
Principal Amount Outstanding together with accrued interest without further
action or formality. Notice of any such declaration shall promptly be given to
the Noteholders. A declaration that the Notes have become immediately due and
payable (as referred to above) will not, of itself, accelerate the timing or
amount of redemption of the Notes as described in Condition 6.
10. Prescription
Claims for principal shall become void unless the relevant Notes are
presented for payment within ten years of the appropriate Relevant Date (as
defined below). Claims for interest shall become void unless the relevant
Coupons are presented for payment within five years of the appropriate Relevant
Date. After the date on which a Note or Coupon becomes void in its entirety no
claim may be made in respect thereof.
In these Conditions, "Relevant Date" means whichever is the later of (a)
the date on which the payment in question first becomes due and (b) if the full
amount payable has not been received in London by the Principal Paying Agent in
London with respect to payments in sterling and euro and in New York with
respect to payments in dollars or the Note Trustee on or prior to such due
date, the date on which (the full amount having been so received) notice to
that effect has been given to the Noteholders in accordance with Condition 14.
11. Replacement of Notes and Coupons
If any Note or Coupon is lost, stolen, mutilated, defaced or destroyed, it
may be replaced at the specified office of the Principal Paying Agent, subject
to all applicable laws and stock exchange requirements, upon payment by the
claimant of the expenses incurred in connection with such replacement and on
such terms as to evidence, security, indemnity and otherwise as the Issuer may
reasonably require. Mutilated or defaced Notes or Coupons must be surrendered
before replacements will be issued.
12. Note Trustee and Agents
The Note Trustee is entitled to be indemnified and relieved from
responsibility in certain circumstances and to be paid its costs and expenses
in priority to the claims of the Noteholders.
In the exercise of its powers and discretions under these Conditions and
the Trust Deed, the Note Trustee will have regard to the interests of the
Noteholders as a class and will not be responsible for any consequence for
individual holders of Notes or Coupons as a result of such holders being
connected in any way with a particular territory or taxing jurisdiction.
In acting under the Paying Agency and Agent Bank Agreement, and in
connection with the Notes and the Coupons, the Paying Agents and the Agent Bank
act solely as agents of the Issuer and (to the extent provided therein) the
Note Trustee and do not assume any obligations towards or relationship of
agency or trust for or with any of the Noteholders or Couponholders.
The Note Trustee and its related companies are entitled to enter into
business transactions with the Issuer, Barclays Bank PLC/or related companies
of either of them without accounting for any profit resulting therefrom.
The initial Paying Agents and their initial specified offices are listed
below. The Issuer reserves the right at any time to vary or terminate the
appointment of any Paying Agent or the Agent Bank and to appoint successor or
additional paying agents or a successor agent bank; Provided that the Issuer
shall at all times maintain (a) in the case of the Class A1 Notes and the Class
A2 Notes a Principal Paying Agent outside the United States of America, (b) in
the case of the Class A3 Notes, the Class B Notes and the Class C Notes a
Principal Paying Agent inside the United States of America (c) a Paying Agent,
if and for so long as any of the Notes are listed on the London Stock Exchange,
in London and (d) an Agent Bank. Notice of any change in the Paying Agents, in
the specified office of any Paying Agent or in the Agent Bank shall promptly be
given to the Noteholders in accordance with Condition 14.
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13. Meetings of Noteholders, Modification and Waiver, Substitution and Addition
(a) Meetings of Noteholders
The Trust Deed contains provisions for convening joint and separate
meetings of Class A Noteholders, Class B Noteholders and Class C Noteholders to
consider any matter affecting their interests, including the sanctioning by an
Extraordinary Resolution of such Noteholders of the relevant class of any
modification of the Notes of the relevant class (including these Conditions as
they relate to the Notes) of such relevant class) or the provisions of any of
the Related Documents, Provided that no modification of certain terms by the
Noteholders of any class including, inter alia, the maturity date of the Notes
of the relevant class or a modification which would have the effect of
postponing any day for payment of interest in respect of such Notes, the
reduction or cancellation of the amount of principal or premium payable in
respect of such Notes, the alteration of the Rate of Interest in respect of the
currency of payment of such Notes or any alteration of the priority of
redemption of such Notes (any such modification in respect of any such class of
Notes being referred to below as a "Basic Terms Modification") shall be
effective unless such modification is sanctioned by an Extraordinary Resolution
of the Noteholders of the other classes of Notes.
The quorum at any meeting of the Noteholders of any class of Notes for
passing an Extraordinary Resolution shall be two or more persons holding or
representing a clear majority of the aggregate Principal Amount Outstanding of
the Notes of the relevant class; Provided however, that, at any meeting the
business of which includes the sanctioning of a Basic Terms Modification, the
necessary quorum for passing an Extraordinary Resolution shall be two or more
persons holding or representing 75 per cent., or more of the aggregate
Principal Amount Outstanding of the Notes of the relevant class.
An Extraordinary Resolution of the Class B Noteholders or the Class C
Noteholders shall only be effective if the Note Trustee is of the opinion that
it will not be materially prejudicial to the interests of the Class A
Noteholders or (if the Note Trustee is not of that opinion) it is sanctioned by
an Extraordinary Resolution of the Class A Noteholders or there are no Class A
Notes then outstanding. Except in certain circumstances, the Trust Deed imposes
no such limitations on the powers of the Class A Noteholders, the exercise of
which will be binding on the Class B Noteholders and the Class C Noteholders,
irrespective of the effect on their interests.
An Extraordinary Resolution of the Class C Noteholders shall only be
effective if the Note Trustee is of the opinion that it will not be materially
prejudicial to the interests of the Class B Noteholders or (if the Note Trustee
if not of that opinion) it is sanctioned by an Extraordinary Resolution of the
Class B Noteholders or there are no Class B Notes then outstanding. Except in
certain circumstances, the Trust Deed imposes no such limitations on the powers
of the Class B Noteholders, the exercise of which will be binding on the Class
C Noteholders irrespective of the effect on their interests.
An Extraordinary Resolution passed at any meeting of the Noteholders of
any class of Notes shall be binding on all Noteholders of the relevant class,
whether or not they are present at the meeting. The majority required for an
Extraordinary Resolution, including the sanctioning of the Basic Terms
Modification, shall be 75 per cent. of the votes case on that Extraordinary
Resolution.
(b) Modification or Waiver
The Note Trustee may agree, without the consent of the Noteholders, or
Couponholders or the Swap Counterparty to (a) any modification (except a Basic
Term Modification) of, or to the waiver or authorisation of any breach or
proposed breach of, the Notes including these Conditions, or any other Related
Document, which is not, in the opinion of the Trustee, materially prejudicial
to the interests of the Noteholders the Couponholders or the Swap Counterparty
or (b) any modification of the Notes, or Coupons (including these Conditions)
or any of the Related Documents, which in the Note Trustees' opinion is to
correct a manifest error or is of a formal minor or technical nature. Any such
modification, waiver, authorisation or determination shall be binding on the
Noteholders, the Couponholders and the Swap Counterparty and, unless the Note
Trustee agrees otherwise, any such modification shall be notified to the
Noteholders in accordance with Condition 14 as soon as practicable thereafter.
(c) Substitution and Addition
As more fully set forth in the Trust Deed and the Swap Agreements (and
subject to the conditions and qualifications therein) subject to such amendment
of the Trust Deed and such other conditions as the Note Trustee, in the case of
the Trust Deed, and the Swap Counterparty, in the case of the Swap Agreements
may require, but without the consent of the Noteholders, the Note Trustee may
also agree to the substitution of any other body corporate in place of the
Issuer as principal debtor under the Trust Deed and the Notes and in the case
of such a substitution or addition the Note Trustee may agree, without the
consent of the Noteholders, to a change of the law governing the Notes and/or
the Trust Deed provided that such change would not in the opinion of the
Trustee be materially prejudicial to the interests of the Noteholders. Any such
substitution or addition shall be notified to the Noteholders in accordance
with Condition 14 as soon as practicable thereafter.
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(d) Enforcement
At any time after the Notes become due and repayable and without prejudice
to its rights of enforcement in relation to the Security, the Note Trustee may,
at its discretion and without notice, institute such proceedings as it thinks
fit to enforce payment of the Notes and Coupons (including the right to
repayment of the Notes together with accrued interest thereon) and shall be
bound to do so if (and only if):
(i) the security has become enforceable by reason of any Swap
Agreement being terminated; or
(ii) the security has become enforceable by reason of the Notes
becoming payable pursuant to Condition 6(b) or Condition 9(e); or
(iii) it shall have been so directed by an Extraordinary Resolution of
the Noteholders of the relevant class provided that (1) no
Extraordinary Resolution of the Class B Noteholders or Class C
Noteholders or any request of the Class B Noteholders or Class C
Noteholders shall be effective unless there is an Extraordinary
Resolution of the Class A Noteholders or a direction of the Class
A Noteholders to the same effect or none of the Class A Notes
remain outstanding (2) no Extraordinary Resolution of the Class C
Noteholders or any request of the Class C Noteholders shall be
effective unless there is an Extraordinary Resolution of the Class
B Noteholders or a direction of the Class B Notes remain
outstanding; and
(iv) it shall have been indemnified or provided with security to its
satisfaction.
No Noteholder or Couponholder may institute any proceedings against the
Issuer to enforce its rights under or in respect of the Notes, the Coupons or
the Trust Deed unless (i) the Note Trustee has become bound to institute
proceedings and has failed to do so within a reasonable time and (ii) such
failure is continuing.
14. Notices
Notices to the Noteholders shall be deemed to have been duly validly given
if published in a leading English language daily newspaper published in London
(which is expected to be the Financial Times). Any such notice shall be deemed
to have been given on the date of first publication.
Until such time as any Definitive Notes are issued, there may, so long as
the Global Note(s) is or are held in its or their entirety on behalf of
Euroclear and Cedelbank, be substituted for such publication in such newspaper
the delivery of the relevant notice to Euroclear and Cedelbank for
communication by them to the holders of the Notes. Any such notice shall be
deemed to have been given to the holders of the Notes on the seventh day after
the day on which such notice was given to Euroclear and Cedelbank.
Any notices specifying a Rate of Interest, an Interest Amount, an amount
of Additional Interest or of Deferred Interest, a Principal Payment or a
Principal Amount Outstanding shall be deemed to have been duly given if the
information contained in such notice appears on the relevant page of the
Reuters Screen (presently page [*]) or such other medium for the electronic
display of data as may be approved by the Note Trustee and notified to
Noteholders (the "Relevant Screen"). Any such notice shall be deemed to have
been given on the first date on which such information appeared on the Relevant
Screen. If it is impossible or impracticable to give notice in accordance with
this paragraph, then notice of the matters referred to in this Condition shall
be given in accordance with the preceding paragraph.
Copies of all notices given in accordance with these provisions shall be
sent to the London Stock Exchange Company Announcements Office and Euroclear
and Cedelbank.
15. Currency Indemnity
If any sum due from the Issuer in respect of the Notes or the Coupons or
any order or judgment given or made in relation thereto has to be converted
from the currency (the "first currency") in which the same is payable under
these Conditions or such order or judgment into another currency (the "second
currency") for the purpose of (a) making or filing a claim or proof against the
Issuer, (b) obtaining an order or judgment in any court or other tribunal or
(c) enforcing any order or judgment given or made in relation to the Notes, the
Issuer shall indemnify each Noteholder, on the written demand of such
Noteholder addressed to the Issuer and delivered to the Issuer or to the
specified office of the Principal Paying Agent, against any loss suffered as a
result of any discrepancy between (i) the rate of exchange used for such
purpose to convert the sum in question from the first currency into the second
currency and (ii) the rate or rates of exchange at which such Noteholder may in
the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof.
This indemnity constitutes a separate and independent obligation of the
Issuer and shall give rise to a separate and independent cause of action.
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16. Governing Law and Jurisdiction
The Notes, the Coupons, the Swap Agreements and the Trust Deed are
governed by, and shall be construed in accordance with, English law.
The Trust Deed provides for the courts of England to have non-exclusive
jurisdiction in connection with the Notes.
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Use of Proceeds
The net proceeds of issue of the Class A Notes, the Class B Notes and the
Class C Notes will be L[*]*. The fees and commissions payable on the issue of
the Class A Notes, the Class B Notes and the Class C Notes will be deducted
from the gross proceeds of the issue and the Issuer will use its reasonable
endeavours to make a drawing of at least an amount equal to such fees and
commissions under the Expenses Loan Agreement. The net proceeds of the issue of
the Class A Notes, the Class B Notes and the Class C Notes together with the
drawing under the Expenses Loan Agreement referred to above will be applied by
the Issuer to purchase the Class A MTN, the Class B MTN and the Class C MTN on
the Closing Date.
* Converted at the exchange rate set on [*] November 1999 of L1 = euro[*] and
L1 = $[*].
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United Kingdom Taxation
The comments below are of a general nature based on current United Kingdom
law and practice. They relate only to the position of persons who are the
absolute beneficial owners of their Notes and Coupons relating thereto and may
not apply to certain classes of persons such as dealers. They do not
necessarily apply where the income is deemed for tax purposes to be income of
any other person. Prospective Noteholders should be aware that the particular
terms of any tap issue may effect the tax treatment of the Notes. Any
Noteholders who are in doubt as to their personal tax position should consult
their professional advisers.
(A) Taxation of interest paid
1. Under current Inland Revenue practice, the Notes will be treated as
"quoted Eurobonds" (Section 124 of the Income and Corporation Taxes Act
1988) so long as they are represented by the Global Notes in bearer form
and are listed on a recognised stock exchange within the meaning of
Section 841 of the Income and Corporation Taxes Act 1988 (the London
Stock Exchange is recognised for this purpose). Therefore, so long as the
Notes are represented by either of the Global Notes and continue to be
listed on a recognised stock exchange and held within a recognised
clearing system as defined for the purposes of Section 124 of the Income
and Corporation Taxes Act 1988 (Euroclear and Cedelbank have each been
designated as a recognised clearing system for this purpose), payments of
interest on the Notes by any person by or through whom interest is paid
("Paying Agent") may, under current law and practice, be made without
withholding or deduction for or on account of United Kingdom income tax
where:
(i) payment is made direct to the recognised clearing system; or
(ii) in a case where payment is made to, or at the direction of, a
Depository for the recognised clearing system the Paying Agent
obtains a valid declaration PA3 from the Depository; or
(iii) the Paying Agent has obtained a notice from the Inland Revenue
directing the Paying Agent to pay the interest with no tax
deducted.
This paragraph will not apply if the Notes cease to be represented by the
Global Notes.
2. If the Notes cease to be represented by the Global Notes and Definitive
Notes (in bearer form) are issued, the Definitive Notes will constitute
"quoted Eurobonds" within the meaning of Section 124 of the Income and
Corporation Taxes Act 1988, provided that they continue to be listed on a
recognised stock exchange. Accordingly, payments of interest on the Notes
may in such circumstances be made without withholding or deduction for or
on account of United Kingdom income tax where:
(i) the Paying Agent by or through whom payment is made is not in the
United Kingdom; or
(ii) payment is made by or through a Paying Agent who is in the United
Kingdom and either:
(i) the interest is paid on a Note held in a recognised
clearing system and one of the conditions set out in
paragraph 1(a), (b) and (c) above is satisfied; or
(ii) a person who is not resident in the United Kingdom is
beneficially entitled to the interest and is the beneficial
owner of the Notes on which the interest is paid and
either:
(g) the Paying Agent obtains a valid declaration PA1 from the said
person on the occasion of each payment; or
(h) the Paying Agent obtains on the occasion of each payment a valid
declaration PA2 from another person who holds the Note for the
non-resident person and who is entitled to arrange for the
interest to be paid with no United Kingdom tax deducted; or
(iii) the Paying Agent has obtained a notice from the Inland Revenue
directing the Paying Agent to pay the interest with no tax
deducted.
3. In all other cases, interest will be paid under deduction of United
Kingdom lower rate income tax (currently at the rate of 20 per cent.)
subject to any direction to the contrary by the Inland Revenue pursuant
to the provisions of any appropriate double taxation treaty. If interest
is paid under deduction of United Kingdom income tax, the Issuer will not
be obliged to pay any additional amount in respect of the Notes.
4. Where a person in the United Kingdom in the course of a trade or
profession:
(i) by means of Coupons, warrants or bills of exchange, collects or
secures payment of or receives interest on the Notes for a
Noteholder or Couponholder; or
G-21
<PAGE>
(ii) arranges to collect or secure payment of interest on the Notes for
a Noteholder or Couponholder; or
(iii) acts as a custodian of the Notes and receives interest on the
Notes or directs that interest on the Notes is paid to another
person or consents to such payment; or
(iv) sells or realises Coupons representing interest on the Notes,
(other than solely by clearing a cheque or arranging for the clearing of
the cheque) that person (the "collecting agent") will be required to
withhold United Kingdom income tax at the lower rate (currently 20 per
cent.), subject to certain exceptions, including the following:
(i) the Notes are held in a recognised clearing system and either:
(1) the collecting agent pays or accounts for the interest
directly to the recognised clearing system; or
(i) in a case where payment is made to, or at the direction of, a
Depository for the recognised clearing system, the collecting
agent obtains a valid declaration CA3 from the Depository; or
(j) the collecting agent acts as a Depository for the recognised
clearing system; or
(ii) the person beneficially entitled to the interest owns the Notes
and is not resident in the United Kingdom and the collecting agent
either:
(1) holds a valid declaration CA1 from the said person; or
(2) holds a valid declaration CA2 from a person (other than a
beneficial owner of the Notes) to whom the interest is
payable or who is entitled to arrange for the interest to
be collected without deduction of United Kingdom tax and
who is not a collecting agent in the United Kingdom;
(iii) the interest is payable to trustees of certain trusts, (called
"qualifying discretionary and accumulation trusts") where
essentially neither the trustees nor the beneficiaries are
resident in the United Kingdom and the collecting agent has
obtained a valid declaration CA1 from the trustee; or
(iv) the person beneficially entitled to the interest is eligible for
certain reliefs from tax in respect of the interest (for example,
UK charities or approved UK pension funds) and the collecting
agent has obtained a valid declaration CA1 from the said person;
or
(v) the collecting agent has obtained a notice from the Inland Revenue
directing the collecting agent to pay the interest with no tax
deducted.
5. Any declaration made as referred to above will not have effect in
relation to any given interest payments or receipts where:
(i) the person who made the declaration has notified the paying agent
or collecting agent that the declaration does not apply, or has
ceased to apply, to the payments or receipts in question; or
(ii) the paying agent or collecting agent has reason to believe that
the declaration is or has become incorrect as regards the relevant
payments or receipts; or
(iii) the paying agent or collecting agent has received notice from the
Inland Revenue directing that the relevant payments or receipts
arising after a specified date are chargeable payments or
receipts.
6. Interest on the Notes will have a United Kingdom source and accordingly
will be within the charge to United Kingdom tax even if paid without
withholding or deduction except that exemption from or reduction in any
United Kingdom tax payable on the interest might be available in
appropriate circumstances under the provisions of an applicable double
taxation convention.
7. By way of exception to the charge described in 6 above, interest on the
Notes received without deduction or withholding for United Kingdom income
tax will not be chargeable to United Kingdom income tax in the hands of a
Noteholder who is not resident for tax purposes in the United Kingdom
unless that holder carries on a trade, profession or vocation in the
United Kingdom through a United Kingdom branch or agency in connection
with which the interest is received or to which the Notes are
attributable. There are exemptions for interest received by certain
categories of agent (such as some brokers and investment managers).
G-22
<PAGE>
8. Proposed European Directive on the Taxation of Savings
In May 1998, the European Commission presented to the Council of
Ministers of the European Union a proposal to oblige Member States to
adopt either a "withholding tax system" or an "information reporting
system" in relation to interest, discounts and premiums. It is unclear
whether this proposal will be adopted, and if it is adopted, whether it
will be adopted in its current form. The "withholding tax system" would
require a paying agent established in a Member State to withhold tax at a
minimum rate of 20 per cent. from any interest, discount or premium paid
to an individual resident in another Member State unless such an
individual presents a certificate obtained from the tax authorities of
the Member State in which the individual is resident confirming that
those authorities are aware of the payment due to that individual. The
"information reporting system" would require a Member State to supply, to
other Member States, details of any payment of interest, discount or
premium made by paying agents within its jurisdiction to an individual
resident in another Member State. A Member State would be free to choose
which of these two systems to adopt. For these purposes, the term "paying
agent" is widely defined and includes an agent who collects interest,
discounts or premiums on behalf of an individual beneficially entitled
thereto. If this proposal is adopted, it will not apply to payments of
interest, discounts and premiums made before 1 January 2001.
9. The Issuer is not required to make any payments to Noteholders or
Couponholders to compensate them for any withholding tax imposed in
respect of payments under the Notes.
(B) Capital Gains: Accrued Income
(1) Individual Noteholders
The Class A1, Class B and Class C Notes will be qualifying corporate bonds
for the purposes of United Kingdom capital gains tax and accordingly no
chargeable gain (or allowable loss) will normally arise for these purposes on a
disposal (which includes redemption) of the Notes by a Noteholder.
A chargeable gain or allowable loss may arise for the purposes of UK
capital gains tax on a disposal which includes a redemption of Class A2 or
Class A3 Notes by a Noteholder.
Where there is a transfer (which includes redemption) of a Note by a
Noteholder who is resident or ordinarily resident in the United Kingdom or
carrying on a trade in the United Kingdom through a branch or agency with which
the ownership of the Note is connected, the Noteholder may be chargeable to
United Kingdom tax on income such amount as is just and reasonable (under rules
known as the accrued income scheme contained in Chapter II of Part XVII of the
Income and Corporation Taxes Act 1988) as representing interest accrued on the
Note at the time of transfer.
1.2 Corporate Noteholders
Noteholders which are companies within the charge to United Kingdom
corporation tax (other than authorised unit trusts) will normally be taxed in
respect of their returns from the Notes, including interest and returns
attributable to movements in value (whether income or capital in nature), as
income, which is calculated in accordance with an authorised accruals or mark-
to-market basis of accounting. Relief may be available for related expenses on
a similar basis.
(C) Stamp Duty and Stamp Duty Reserve Tax
No United Kingdom stamp duty or stamp duty reserve tax is payable on the
issue of the Global Notes or on the issue or transfer of a Note in definitive
form.
G-23
<PAGE>
- -------------------------------------------------------------------------------
Gracechurch Card Funding (No. 1) PLC
Issuer
Barclays Bank PLC
Originator and Servicer
$* Class A3 Floating Rate Asset-Backed Notes
$* Class B Floating Rate Asset-Backed Notes
--------------
Prospectus
---------------
Underwriter[s] of the Class A3 Notes
Barclays Capital
Underwriter of the Class B Notes
Barclays Capital
You should rely only on the information contained in this prospectus. We
have not authorised anyone to provide you with different information.
We are not offering the offered notes where the offer is not permitted.
Dealers will deliver a prospectus when acting as underwriters of the
offered notes and with respect to their unsold allotments or subscriptions. In
addition, all dealers selling the offered notes will not deliver a prospectus
until * *, 1999.
<PAGE>
PART II
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemised list of the estimated expenses to be incurred
in connection with the offering of the securities being offered in this
prospectus other than underwriting discounts and commissions.
<TABLE>
<CAPTION>
<S> <C>
Registration Statement Fee $556
Printing and Engraving Expenses........................................................... *
Trustee's Fees and Expenses............................................................... *
Legal Fees and Expenses................................................................... *
Accountants' Fees and Expenses............................................................ *
Rating Agency Fees........................................................................ *
Miscellaneous Fees and Expenses........................................................... *
-------------
Total.................................................................................... $ *
=============
</TABLE>
* To be provided by amendment.
Item 15. Indemnification of Directors and Officers.
Indemnification. Under the laws which govern the organization of the
registrant, the registrant has the power and in some instances may be required
to provide an agent, including an officer or director, who was or is a party or
is threatened to be made a party to certain proceedings, with indemnification
against certain expenses, judgements, fines, settlements and other amounts
under certain circumstances.
[to include indemnification provisions under memorandum O & D policies]
Item 16. Exhibits.
1.1 --- Form of Underwriting Agreement for the Class A3 Notes and Class B
Notes.*
3.1 --- Memorandum and Articles of Association of Gracechurch Card Funding
(No.1) PLC.***
3.2 --- Memorandum and Articles of Association of Barclaycard Funding PLC.
4.1 --- Form of Declaration of Trust and Trust Cash Management Agreement.**
4.2 --- Form of Series 99-1 Supplement to Declaration of Trust and Trust Cash
Management Agreement.**
4.3 --- Form of Security Trust and Cash Management Deed.**
4.4 --- Form of Trust Deed.**
4.5 --- Form of Deed of Charge.**
4.6 --- Form of Paying Agency and Agent Bank Agreement.**
4.7 --- Form of Class A3 Note.
4.8 --- Form of Class A MTN.
4.9 --- Form of Class B Note.
4.10 --- Form of Class B MTN.
4.11 --- Form of Series 99-1 MTN Supplement.**
4.12 --- Form of Depository Agreement.*
4.13 --- Form of Beneficiaries Servicing Agreement.**
5.1 --- Opinion of Clifford Chance with respect to validity.
8.1 --- Opinion of Orrick Herrington & Sutcliffe LLP with respect to U.S. tax
matters.
8.2 --- Opinion of Clifford Chance with respect to U.K. tax matters.*
10.1 --- Form of Receivables Securitisation Agreement.
10.2 --- Form of Class A3 Dollar Swap Agreement.
10.3 --- Form of Class B Dollar Swap Agreement.
10.4 --- Form of Expenses Loan Agreement.*
23.1 --- Consent of Clifford Chance (included in Exhibits 5.1 and 8.2).
23.2 --- Consent of Orrick Herrington & Sutcliffe LLP (included in Exhibit 8.1).
23.3 --- Consent of PriceWaterhouseCoopers.
24.1 --- Powers of Attorney.**
25.1 --- Statement of Eligibility of Trustee (form T-1).*
* To be included by amendment.
** Previously filed.
*** Exhibit 3.1 previously filed without Certificate of Incorporation on Change
of Name. Certificate of Incorporation on Change of Name filed herewith.
II-1
<PAGE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes as follows:
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers, and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission this indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
these liabilities, other than payment by a registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by that director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether the indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of the issue.
(b) For purposes of determining any liability under the Act, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(c) For purposes of determining any liability under the Act, each post-
effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered in it,
and the offering of those securities at that time will be deemed to be
the initial bona fide offering of them.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Gracechurch
Card Funding (No. 1) PLC, a Registrant, certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form F-1
and has duly caused this Amendment No.1 to the Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorised, in the City
of London, England, on October 18, 1999
Gracechurch Card Funding (No. 1) PLC,
As Issuer of the Notes
By: /s/ Peter Crook
----------------------------------
Name: Peter Crook
Title: Director
As required by the Securities Act of 1933, this Amendment No.1 to the
Registration Statement has been signed on October 18, 1999 by the following
persons in the capacities for Gracechurch Card Funding (No. 1) PLC indicated.
Signature Title
/s/ Peter Crook Director (Principal Financial Officer,
- ------------------------------------- Principal Executive Officer and
Peter Crook Principal Accounting Officer)
* Director
- -------------------------------------
David Roger Finney
* Director
- -------------------------------------
Brian Donald Needham
*By: /s/ Peter Crook
--------------------------------
Peter Crook
Attorney-in-Fact
Powers of Attorney appointing Peter Crook to execute the Registration
Statement and any amendments thereto on behalf of the above-named individuals
were previously filed with the Securities and Exchange Commission.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Barclaycard
Funding PLC, a Registrant, certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form F-1 and has duly
caused this Amendment No.1 to the Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorised, in the City of London,
England, on October 18, 1999
BARCLAYCARD FUNDING PLC
As Issuer of the Medium
Term Notes
By: /s/ Peter Crook
----------------------------------
Name: Peter Crook
Title: Director
As required by the Securities Act of 1933, this Amendment No.1 to the
Registration Statement has been signed on October 18, 1999 by the following
persons in the capacities for Barclaycard Funding PLC indicated.
Signature Title
/s/ Peter Crook Director (Principal Financial Officer,
- ------------------------------------- Principal Executive Officer and
Peter Crook Principal Accounting Officer)
* Director
- -------------------------------------
David Roger Finney
* Director
- -------------------------------------
Brian Donald Needham
*By: /s/ Peter Crook
-----------------------------------------------
Peter Crook
Attorney-in-Fact
Powers of Attorney appointing Peter Crook to execute the Registration
Statement and any amendments thereto on behalf of the above-named individuals
were previously filed with the Securities and Exchange Commission.
II-4
<PAGE>
AUTHORIZED REPRESENTATIVE
/s/ Michael J. Wade
- ----------------------------------------------------
Michael J. Wade
As the duly authorized representative in the United States of both Barclaycard
Funding PLC and Gracechurch Card Funding (No.1) PLC,
Date: October 18, 1999
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
---- ------------------------------
<S> <C> <C>
1.1 --- Form of Underwriting Agreement for the Class A3 Notes and Class B Notes.*
3.1 --- Memorandum and Articles of Association of Gracechurch Card Funding (No.1) PLC.***
3.2 --- Memorandum and Articles of Association of Barclaycard Funding PLC.
4.1 --- Form of Declaration of Trust and Trust Cash Management Agreement.**
4.2 --- Form of Series 99-1 Supplement to Declaration of Trust and Trust Cash Management Agreement.**
4.3 --- Form of Security Trust and Cash Management Deed.**
4.4 --- Form of Trust Deed.**
4.5 --- Form of Deed of Charge.**
4.6 --- Form of Paying Agency and Agent Bank Agreement.**
4.7 --- Form of Class A3 Note.
4.8 --- Form of Class A MTN.
4.9 --- Form of Class B Note.
4.10 --- Form of Class B MTN.
4.11 --- Form of Series 99-1 MTN Supplement.**
4.12 --- Form of Depository Agreement.*
4.13 --- Form of Beneficiaries Servicing Agreement.**
5.1 --- Opinion of Clifford Chance with respect to validity.
8.1 --- Opinion of Orrick Herrington & Sutcliffe LLP with respect to U.S. tax matters.
8.2 --- Opinion of Clifford Chance with respect to U.K. tax matters.*
10.1 --- Form of Receivables Securitisation Agreement.
10.2 --- Form of Class A3 Dollar Swap Agreement.
10.3 --- Form of Class B Dollar Swap Agreement.
10.4 --- Form of Expenses Loan Agreement.*
23.1 --- Consent of Clifford Chance (included in Exhibits 5.1 and 8.2).
23.2 --- Consent of Orrick Herrington & Sutcliffe LLP (included in Exhibit 8.1).
23.3 --- Consent of PriceWaterhouseCoopers.
24.1 --- Powers of Attorney.**
25.1 --- Statement of Eligibility of Trustee (form T-1).*
</TABLE>
* To be included by amendment.
** Previously filed.
*** Exhibit 3.1 previously filed without Certificate of Incorporation on Change
of Name. Certificate of Incorporation on Change of Name filed herewith.
II-6
[LOGO] HM Seal
CERTIFICATE OF INCORPORATION
ON CHANGE OF NAME
Company No. 3794757
The Registrar of Companies for England and Wales hereby certifies that
HARPMIST PLC
having by special resolution changed its name, it now incorporated under
the name of
GRACECHURCH CARD FUNDING (NO.1) PLC
Given at Companies House, London, the 13th September 1999
/s/
MISS S. BASHAR
For The Registrar Of Companies
[LOGO] Companies House
Company No. 2530163
THE COMPANIES ACTS 1985 AND 1989
----------------------------------------
PUBLIC COMPANY LIMITED BY SHARES
----------------------------------------
MEMORANDUM OF ASSOCIATION
OF
BARCLAYCARD FUNDING PLC
Incorporated 13 August 1990
1
<PAGE>
THE COMPANIES ACTS 1985 AND 1989
----------------------------------------
PUBLIC COMPANY LIMITED BY SHARES
----------------------------------------
MEMORANDUM OF ASSOCIATION
of
BARCLAYCARD FUNDING PLC1
1. The Company's name is "BARCLAYCARD FUNDING PLC".
2. The Company is to be a public company.
3. The Company's registered office is to be situated in England and Wales.
4. The Company's objects are:
(A) (i) To carry on business as manufacturers, builders and suppliers of and
dealers in goods of all kinds, and as mechanical, general, electrical,
marine, radio, electronic, aeronautical, chemical, petroleum, gas civil
and constructional engineers, and manufacturers, importers and exporters
of, dealers in machinery, plant and equipment of all descriptions and
component parts thereof, forgings, castings, tools, implements,
apparatus and all other articles and things.
(ii) To act as an investment holding company and to co-ordinate the
business of any companies in which the Company is for the time being
interested, and to acquire (whether by original subscription, tender,
purchase exchange or otherwise) the whole of or any part of the stock,
shares, debentures, debenture stocks, bonds and other securities issued
or guaranteed by a body corporate constituted or carrying on business in
any part of the world or by any government, sovereign ruler,
commissioners, public body or authority and to hold the same as
investments, and to sell, exchange, carry and dispose of the same.
(iii) To carry on the businesses in any part of the world as importers,
exporters, buyers, sellers, distributors and dealers and to win,
process and work produce of all kinds.
(B) To carry on the following businesses, namely, contractors, garage
proprietors, filling station proprietors, owners and charterers of road
vehicles, aircraft and ships and boats of every description, lightermen
and carriers of goods and passengers by road, rail, water or air,
forwarding, transport and commission agents, customs agents, stevedores,
wharfingers, cargo superintendents, packers, warehouse storekeepers, cold
store keepers, hotel proprietors, caterers, publicans, consultants,
advisers, financiers, bankers, advertising agents, insurance brokers,
travel agents, ticket agents and agency business of all kinds and
generally to provide entertainment for and render services of all kinds
to others and to carry on any other trade or business which can in the
opinion of the directors be advantageously carried on by the Company in
connection with or ancillary to any of the businesses of the Company.
(C) To buy, sell, manufacture, repair, alter, improve, manipulate, prepare
for market, let on hire, and generally deal in all kinds of plant,
machinery, apparatus, tools, utensils, materials, produce, substances,
articles and things for the purpose of any of the businesses specified in
clause 4, or which may be required by persons having, or about to have,
dealings with the Company.
(D) To build, construct, maintain, alter, enlarge, pull down, remove and
replace any buildings, shops, factories, offices, works, machinery and
engines, and to work, manage and control these things.
(E) To enter into contracts, agreements and arrangements with any person for
the carrying out by that person on behalf of the Company of any object
for which the Company is formed.
1 Incorporated with limited liability on 13 August 1990 as Barshelfco (No. 28)
Limited. By special resolutions passed on 8 October 1999, a new Memorandum of
Association was adopted, and it was resolved to reregister the Company as a
public limited company and to change the Company name to "BARCLAYCARD FUNDING
PLC".
2
<PAGE>
(F) To acquire, undertake and carry on the whole or any part of the business,
property and liabilities of any person carrying on any business which may
in the opinion of the directors be capable of being conveniently carried
on, or calculated directly or indirectly to enhance the value of or make
profitable any of the Company's property or rights, or any property
suitable for the purposes of the Company.
(G) To enter into any arrangement with a government or authority, whether
national, international, supreme, municipal, local or otherwise, that may
in the opinion of the directors be conducive to any object of the
Company, and to obtain from that government or authority any right,
privilege or concession which in the opinion of the directors is
desirable, and to carry out, exercise and comply with that arrangement,
right, privilege or concession.
(H) To apply for, purchase and by other means acquire, protect, prolong and
renew any patent, patent right, brevet d'invention, licence, secret
process, invention, trade mark, service mark, copyright, registered
design, protection, concession and right of the same or similar effect or
nature, and to use, turn to account, manufacture under and grant licences
and privileges in respect of those things, and to spend money in
experimenting with, testing, researching, improving and seeking to
improve any of those things.
(I) To acquire an interest in, amalgamate with and enter into partnership or
any arrangement for the sharing of profits, union of interests, co-
operation, joint venture, reciprocal concession or otherwise with any
person, or with any employees of the Company. To lend money to, guarantee
the contracts of, and otherwise assist that person or those employees,
and to take and otherwise acquire an interest in that person's shares or
other securities and to sell, hold, re-issue, with or without guarantee,
and otherwise deal with those shares or other securities.
(J) To lend money to, subsidise and assist any person, to act as agents for
the collection, receipt and payment of money and generally to act as
agents and brokers for and perform services for any person, and to
undertake and perform sub-contracts.
(K) To enter into any guarantee or contract of indemnity or suretyship, and
to provide security, including, without limitation, the guarantee and
provision of security for the performance of the obligations of and the
payment of any money (including, without limitation, capital, principal,
premiums, dividends, interest, commissions, charges, discount and any
related costs or expenses whether on shares or other securities) by any
person including, without limitation, any body corporate which is for the
time being the Company's holding company, the Company's subsidiary, a
subsidiary of the Company's holding company or any person which is for
the time being a member or otherwise has an interest in the Company or is
associated with the Company in any business or venture, with or without
the Company receiving any consideration or advantage (whether direct or
indirect), and whether by personal covenant or mortgage, charge or lien
over all or part of the Company's undertaking, property, assets or
uncalled capital (present and future) or by other means. For the purposes
of paragraph (K) "guarantee" includes any obligation, however described,
to pay, satisfy, provide funds for the payment or satisfaction of
(including, without limitation, by advance of money, purchase of or
subscription for shares or other securities and purchase of assets or
services), indemnify against the consequences of default in the payment
of, or otherwise be responsible for, any indebtedness of any other
person.
(L) To promote, finance and assist any person for the purpose of acquiring
all or any of the property, rights and undertaking or assuming the
liabilities of the Company, and for any other purpose which may in the
opinion of the directors directly or indirectly benefit the Company, and
in that connection to place, guarantee the placing of, underwrite,
subscribe for, and otherwise acquire all or any part of the shares or
other securities of a body corporate.
(M) To pay out of the funds of the Company all or any expenses which the
Company may lawfully pay of or incidental to the formation, registration,
promotion and advertising of and raising money for the Company and the
issue of its shares or other securities, including, without limitation,
those incurred in connection with the advertising and offering of its
shares or other securities for sale or subscription, brokerage and
commissions for obtaining applications for and taking, placing,
underwriting or procuring the underwriting of its shares or other
securities.
(N) To remunerate any person for services rendered or to be rendered to the
Company, including, without limitation, by cash payment or by the
allotment of shares or other securities of the Company, credited as paid
up in full or in part.
3
<PAGE>
(O) To purchase, take on lease, exchange, hire and otherwise acquire any real
or personal property and any right or privilege over or in respect of it.
(P) To receive money on deposit on any terms the directors think fit.
(Q) To invest and deal with the Company's money and funds in any way the
directors think fit.
(R) To lend money and give credit with or without security.
(S) To borrow, raise and secure the payment of money in any way the directors
think fit, including, without limitation, by the issue of debentures and
other securities, perpetual or otherwise, charged on all or any of the
Company's property (present and future) or its uncalled capital, and to
purchase, redeem and pay off those securities.
(T) To remunerate any person for services rendered or to be rendered in
placing, assisting and guaranteeing the placing and procuring the
underwriting of any share or other security of the Company or of any
person in which the Company may be interested or proposes to be
interested, or in connection with the conduct of the business of the
Company, including, without limitation, by cash payment or by the
allotment of shares or other securities of the Company, credited as paid
up in full or in part.
(U) To acquire, hold, dispose of, subscribe for, issue, underwrite, place,
manage assets belonging to others which include, advise on, enter into
contracts or transactions in relation to or involving and in any other
way deal with or arrange dealings with or perform any service or function
in relation to (as applicable): shares, stocks, debentures, loans, bonds,
certificates of deposit and other instruments creating or acknowledging
indebtedness, government, public or other securities, warrants,
certificates representing securities or other obligations, units in
collective investment schemes, options, futures, spot or forward
contracts, contracts for differences or other investments or obligations,
currencies, interest rates, precious metals or other commodities, any
index (whether related in any way to any of the foregoing or otherwise),
any right to, any right conferred by or any interest or any obligation in
relation to any of the foregoing and any financial instrument or product
deriving from or in any other way relating to any of the foregoing or of
any nature whatsoever, and any transaction which may seem to be
convenient for hedging the risks associated with any of the foregoing.
(V) To co-ordinate, finance and manage the business and operation of any
person in which the Company has an interest.
(W) To draw, make, accept, endorse, discount, execute and issue promissory
notes, bills of exchange, bills of lading, warrants, debentures and other
negotiable or transferable instruments.
(X) To sell, lease, exchange, let on hire and dispose of any real or personal
property and the whole or part of the undertaking of the Company, for
such consideration as the directors think fit, including, without
limitation, for shares, debentures or other securities, whether fully or
partly paid up, of any person, whether or not having objects (altogether
or in part) similar to those of the Company. To hold any shares,
debentures and other securities so acquired, and to improve, manage,
develop, sell, exchange, lease, mortgage, dispose of, grant options over,
turn to account and otherwise deal with all or any part of the property
and rights of the Company.
(Y) To adopt any means of publicising and making known the businesses,
services and products of the Company as the directors think fit,
including, without limitation, advertisement, publication and
distribution of notices, circulars, books and periodicals, purchase and
exhibition of works of art and interest and granting and making of
prizes, rewards and donations.
(Z) To support, subscribe to and contribute to any charitable or public
object and any institution, society and club which may be for the benefit
of the Company or persons who are or were directors, officers or
employees of the Company, its predecessor in business, any subsidiary of
the Company or any person allied to or associated with the Company, or
which may be connected with any town or place where the Company carries
on business. To subsidise and assist any association of employers or
employees and any trade association. To grant pensions, gratuities,
annuities and charitable aid and to provide advantages, facilities and
services to any person (including any director or former director) who
may have been employed by or provided services to the Company, its
predecessor in business, any subsidiary of the Company or any person
allied to or associated with the Company and to the spouses, children,
dependants and relatives of those persons and to make advance provision
for the payment of those pensions, gratuities
4
<PAGE>
and annuities by establishing or acceding to any trust, scheme or
arrangement (whether or not capable of approval by the Commissioners of
Inland Revenue under any relevant legislation) the directors think fit,
to appoint trustees and to act as trustee of any trust, scheme or
arrangement, and to make payments towards insurance for the benefit of
those persons and their spouses, children, dependants and relatives.
(AA) To establish and contribute to any scheme for the purchase or
subscription by trustees of shares or other securities of the Company to
be held for the benefit of the employees of the Company, any subsidiary
of the Company or any person allied to or associated with the Company, to
lend money to those employees or to trustees on their behalf to enable
them to purchase or subscribe for shares or other securities of the
Company and to formulate and carry into effect any scheme for sharing the
profits of the Company with employees.
(BB) To apply for, promote and obtain any Act of Parliament and any order or
licence of any government department or authority (including, without
limitation, the Department of Trade and Industry) to enable the Company
to carry any of its objects into effect, to effect any modification of
the Company's constitution and for any other purpose which the directors
think fit, and to oppose any proceeding or application which may in the
opinion of the directors directly or indirectly prejudice the Company's
interests.
(CC) To establish, grant and take up agencies, and to do all other things the
directors may deem conducive to the carrying on of the Company's business
as principal or agent, and to remunerate any person in connection with
the establishment or granting of an agency on the terms and conditions
the directors think fit.
(DD) To distribute among the shareholders in specie any of the Company's
property and any proceeds of sale or disposal of any of the Company's
property and for that purpose to distinguish and separate capital from
profits, but no distribution amounting to a reduction of capital may be
made without any sanction required by law.
(EE) To purchase and maintain insurance for the benefit of any person who is
or was an officer or employee of the Company, a subsidiary of the Company
or a company in which the Company has or had an interest (whether direct
or indirect) or who is or was trustee of any retirement benefits scheme
or any other trust in which any officer or employee or former officer or
employee is or has been interested, indemnifying that person against
liability for negligence, default, breach of duty or breach of trust or
any other liability which may lawfully be insured against.
(FF) To amalgamate with any other person and to procure the Company to be
registered or recognised in any part of the world.
(GG) Subject to the Act, to give (whether directly or indirectly) any kind of
financial assistance (as defined in section 152(1)(a) of the Act) for any
purpose specified in section 151(1) or section 151(2) of the Act.
(HH) To do all or any of the things provided in any paragraph of clause 4:
(i) in any part of the world;
(ii) as principal, agent, contractor, trustee or otherwise;
(iii) by or through trustees, agents, subcontractors or otherwise; and
(iv) alone or with another person or persons.
(II) To do all things that are in the opinion of the directors incidental or
conducive to the attainment of all or any of the Company's objects, or
the exercise of all or any of its powers.
(JJ) The objects specified in each paragraph of clause 4 shall, except where
otherwise provided in that paragraph, be regarded as independent objects,
and are not limited or restricted by reference to or inference from the
terms of any other paragraph or the name of the Company. None of the
paragraphs of clause 4 or the objects or powers specified or conferred in
or by them is deemed subsidiary or ancillary to the objects or powers
mentioned in any other paragraph. The Company has as full a power to
exercise all or any of the objects and powers provided in each paragraph
as if each paragraph contained the objects of a separate company.
5
<PAGE>
(KK) In clause 4, a reference to:
(i) a "person" includes a reference to a body corporate, association or
partnership whether domiciled in the United Kingdom or elsewhere
and whether incorporated or unincorporated;
(ii) the "Act" is, unless the context otherwise requires, a reference to
the Companies Act 1985, as modified or re-enacted or both from time
to time; and
(iii) a "subsidiary" or "holding company" is to be construed in
accordance with section 736 of the Act.
5. The liability of the members is limited.
6. The Company's share capital is L50,000 divided into 50,000 ordinary
shares of L1 each2.
2 By special resolutions passed on 8 October 1999, new Articles of Association
were adopted and the Company's share capital was divided into 37,500 A
Ordinary Shares of L1 each and 12,500 B Ordinary Shares of L1 each.
6
<PAGE>
Company No. 2530163
THE COMPANIES ACTS 1985 AND 1989
----------------------------------------
PUBLIC COMPANY LIMITED BY SHARES
----------------------------------------
ARTICLES OF ASSOCIATION
OF
BARCLAYCARD FUNDING PLC
Incorporated 13 August 1990
1
<PAGE>
THE COMPANIES ACTS 1985 AND 1989
---------------------------------------
PUBLIC COMPANY LIMITED BY SHARES
---------------------------------------
ARTICLES OF ASSOCIATION
of
BARCLAYCARD FUNDING PLC1
PRELIMINARY
1. (A) The regulations contained in Table A in the Schedule to the Companies
(Table A to F) Regulations 1985 (as amended) ("Table A") apply to the
Company except to the extent that they are excluded or modified by these
articles.
(B) The regulations of Table A numbered 2, 3, 4, 24, 32, 33, 34, 37, 38,
39, 40, 42, 43, 46, 48, 51, 52, 54, 60, 61, 64, 73, 74, 75, 76, 77, 78,
79, 80, 81, 84, 90, 94, 95, 96, 97, 98, 115 and 118 do not apply. The
regulations of Table A numbered 46, 47, 50, 53, 56, 57, 59, 62, 65, 66,
67, 68, 72, 84, 88, 89, 110, 112 and 116 are modified. Subject to these
exclusions and modifications, and in addition to the remaining
regulations of Table A, the following are the articles of association of
the Company.
(C) Where an ordinary resolution of the Company is expressed to be
required for any purpose, a special or extraordinary resolution is also
effective for that purpose, and where an extraordinary resolution is
expressed to be required for any purpose, a special resolution is also
effective for that purpose.
SHARE CAPITAL
2. (A) The Company's authorised share capital is L50,000 divided into 37,500
A ordinary shares (" "A" Shares") of L1 each and 12,500 B ordinary
shares (""B" Shares") of L1 each.
(B) The "A" Shares and the "B" Shares for the time being in issue shall
constitute separate classes of shares respectively for the purposes
of these articles and the Act.
1 By special resolutions passed on 8 October 1999, new Articles of Association
were adopted and the Company's share capital was divided into 37,500 A
Ordinary Shares of L1 each and 12,500 B Ordinary Shares of L1 each.
2
<PAGE>
(C) The rights and restrictions attaching to the "A" Shares are as
follows:
(i) Income
(a) The holders of the "A" Shares shall be entitled to in
aggregate 49 per cent. of any dividend from time to
time declared or paid by the Company (rounded down to
the nearest unit of currency in which the dividend is
being declared or paid) (the ""A" Portion"). The "A"
Portion shall be divided amongst the A holders pro
rata to their holdings of "A" Shares. Any part of an
"A" shareholder's pro rata entitlement to the A
Portion which is a fraction of the lowest unit of
currency in which the dividend is paid shall
accumulate to the "A" shareholder who has been a
member of the Company longest.
(b) The "A" Shares do not confer a further right to
participate in the Company's profits.
(ii) Capital
(a) On a return of capital on winding up or otherwise
(other than on conversion, redemption or purchase of
shares) the Company's assets available for
distribution among the members shall be applied in
repaying to the holders of the "A" Shares together 49
per cent. of the assets available for distribution;
(b) The "A" Shares do not confer a further right to
participate in the Company's assets available for
distribution among the members.
(iii) Voting
Each "A" Share shall carry the right for the holder to
attend and vote at general meetings and, on a poll, each "A"
Share shall carry such number of votes as shall (on the
basis that each "A" Share shall carry the same number of
votes as each other "A" Share) provide the holders of all of
the "A" Shares then in issue with 51 per cent. of the total
votes then capable of exercise at general meetings. For this
purpose a holder of an "A" Share may be entitled to exercise
a fraction of one vote, and may vote in respect of such
fractional entitlement which shall be counted accordingly.
3
<PAGE>
(D) The rights and restrictions attaching to the "B" Shares are as
follows:
(i) Income
The holders of the "B" Shares shall be entitled to be paid
in aggregate 51 per cent. of the dividend from time to time
declared or paid by the Company (rounded up to the nearest
unit of currency in which the dividend is being declared or
paid) (the "B Portion"). The B Portion shall be divided
amongst the holders of the "B" Shares pro rata to their
holding of "B" Shares. Any part of a "B" shareholder's pro
rata entitlement to the B Portion which is a fraction of the
lowest unit of currency in which the dividend is paid shall
accumulate to the "B" shareholder who has been a member of
the Company longest.
(ii) Capital
On a return of capital on winding up or otherwise (other
than on conversion, redemption or purchase of shares) the
Company's assets available for distribution among the
members shall be applied in repaying to the holders of the
"B" Shares together 51 per cent. of the assets available for
distribution;
(ii) Voting
Each "B" Share shall carry the right for the holder to
attend and vote at general meetings and, on a poll, each "B"
Share shall carry such number of votes as shall (on the
basis that each "B" Share shall carry the same number of
votes as each other "B" Share) provide the holders of all of
the "B" Shares then in issue with 49 per cent. of the total
votes then capable of exercise at general meetings. For this
purpose a holder of a "B" Share may be entitled to exercise
a fraction of one vote, and may vote in respect of such
fractional entitlement which shall be counted accordngly.
3. (A) Subject to the provisions of the Act, the directors have general and
unconditional authority to allot (with or without conferring rights of
renunciation), grant options over, offer or otherwise deal with or
dispose of any unissued shares of the Company (whether forming part of
the original or any increased share capital) to such persons, at such
times and on such terms and conditions as the directors may decide but no
share may be issued at a discount.
(B) The directors have general and unconditional authority, pursuant to
section 80 of the Act, to exercise all powers of the Company to
allot relevant securities for a period expiring on the fifth
4
<PAGE>
anniversary of the date of incorporation of the Company unless
previously renewed, varied or revoked by the Company in general
meeting.
(C) The maximum amount of relevant securities which may be allotted
pursuant to the authority conferred by paragraph (B) is the amount
of the authorised but as yet unissued share capital of the Company
at the date of incorporation of the Company.
(D) By the authority conferred by paragraph (B), the directors may
before the authority expires make an offer or agreement which would
or might require relevant securities of the Company to be allotted
after it expires and may allot relevant securities in pursuance of
that offer or agreement.
4. The pre-emption provisions of section 89(1) of the Act and the provisions
of sub-sections (1) to (6) inclusive of section 90 of the Act do not
apply to any allotment of the Company's equity securities.
TRANSFERS
5. The directors may, in their absolute discretion and without giving any
reason, refuse to register the transfer of a share to any person, whether
or not it is a fully-paid share or a share on which the Company has a
lien.
GENERAL MEETINGS
6. The directors or any "A" shareholder may call a general meeting.
NOTICE OF GENERAL MEETINGS
7. An annual general meeting and an extraordinary general meeting called for
the passing of a special resolution or an elective resolution must be
called by at least 21 clear days' notice. All other extraordinary general
meetings must be called by at least 14 clear days' notice but a general
meeting may be called by shorter notice if it is so agreed:
(a) in the case of an annual general meeting or a meeting called for
the passing of an elective resolution, by all the members entitled
to attend and vote at that meeting; and
(b) in the case of any other meeting, by a majority in number of the
members having a right to attend and vote, being (i) a majority
together holding not less than such percentage in nominal value of
the shares giving that right as has been determined by elective
resolution of the members in accordance with the Act, or (ii) if
no such elective resolution is in force, a majority together
holding not less than 95 per cent. in nominal value of the shares
giving that right.
The notice must specify the time and place of the meeting and the general
nature of the business to be transacted and, in the case of an annual
general meeting, must specify that the meeting is an annual general
meeting.
5
<PAGE>
Subject to the provisions of the articles and to any restrictions imposed
on any shares, the notice must be given to all the members, to all
persons entitled to a share in consequence of the death or bankruptcy of
a member and to the directors and auditors.
PROCEEDINGS AT GENERAL MEETINGS
8. The quorum at any general meeting or adjourned general meeting shall be
one holder of an "A" Share, present in person, by corporate
representative, or by proxy.
9. A holder of an "A" Share present in person, by corporate representative,
or by proxy shall nominate the chairman of the meeting, who shall be a
person present and willing to act.
10. A corporation which is a member of the Company may, by resolution of its
directors or other governing body, authorise such person as it thinks fit
to act as its representative at any meeting of the Company or at any
meeting of any class of members of the Company. The person so authorised
is entitled to exercise the same powers on behalf of the corporation
which he represents as that corporation could exercise if it were an
individual member. Unless the directors otherwise decide, a copy of such
authority approved by the directors shall be left at or sent by post or
facsimile transmission to the office or such other place within the
United Kingdom as the directors may determine before such representative
is entitled to exercise any power on behalf of the corporation which he
represents;
11. A resolution put to the vote of a meeting shall only be decided by a
poll, which shall be taken forthwith and without further notice. No
resolution shall be put to a meeting on a show of hands.
12. Regulation 53 of Table A is modified by the addition at the end of the
following sentence: "If a resolution in writing is described as a special
resolution or as an extraordinary resolution, it has effect
accordingly.".
13. Regulation 47 of Table A is modified by the deletion of the words "Unless
a poll is duly demanded".
14. Regulation 50 of Table A is modified by the deletion of the words
"whether on a show of hands".
VOTES OF MEMBERS
15. Regulation 56 of Table A is modified by the deletion of the words
"whether on a show of hands or" after "...in matters concerning mental
disorder may vote".
16. Regulation 57 of Table A is modified by the inclusion after the word
"shall" of the phrase ", unless the directors otherwise determine,".
17. Regulation 59 of Table A is modified by the addition at the end of the
following sentence: "Deposit of an instrument of proxy does not preclude
a member from attending and voting at the meeting or at any adjournment
of it.".
6
<PAGE>
18. An instrument appointing a proxy must be in writing in any usual form or
in any other form which the directors may approve and must be executed by
or on behalf of the appointor.
19. Regulation 62 of Table A is modified by the deletion in paragraph (a) of
the words "deposited at" and by the substitution for them of the words
"left at or sent by post or by facsimile transmission to", by the
substitution in paragraph (a) of the words "at any time" in place of "not
less than 48 hours". Paragraphs (b) and (c) of Regulation 62 are deleted.
DIRECTORS
20. Unless and until otherwise decided by the Company by ordinary resolution
the number of directors must not be less than two.
ALTERNATE DIRECTORS
21. A director may appoint any person willing to act, whether or not he is a
director of the Company, to be an alternate director. That person need
not be approved by resolution of the directors, and regulation 65 is
modified accordingly.
22. An alternate director who is absent from the United Kingdom is entitled
to receive notice of all meetings of directors and meetings of committees
of directors and regulation 66 of Table A is modified accordingly.
23. Regulation 68 of Table A is modified by the addition at the end of the
following sentence: "Any such notice may be left at or sent by post or
facsimile transmission to the office or another place designated for the
purpose by the directors.".
DELEGATION OF DIRECTORS' POWERS
24. Regulation 72 is modified by the addition at the end of the regulation of
the following sentence: "Where a provision of the articles refers to the
exercise of a power, authority or discretion by the directors and that
power, authority or discretion has been delegated by the directors to a
committee, the provision must be construed as permitting the exercise of
the power, authority or discretion by the committee.".
APPOINTMENT AND REMOVAL OF DIRECTORS
25. The holders for the time being of a majority of the "A" Shares may from
time to time appoint up to two persons to be directors and these
directors and any alternate shall be called "A" Directors. The holders
for the time being of a majority of the "B" Shares may from time to time
appoint one person to be a director and this director and any alternate
shall be called a "B" Director.
26. Each "A" Director and "B" Director may at any time be removed from office
from the holders of a majority of the "A" Shares or "B" Shares (as the
case may be).
7
<PAGE>
27. A director appointed by a class of members pursuant to this article shall
cease to be a director from the date on which the members of the class at
the time of his appointment cease to be members.
28. Any appointment or removal of a director shall be made by notice in
writing served on the Company and signed by the persons appointing or
removing the director. In the case of a corporation the notice may be
signed on its behalf by a director or the secretary of the corporation or
by its duly appointed attorney or duly authorised representative.
29. The directors are not subject to retirement by rotation. Regulations 73,
74, 75, 76 and 77 of Table A do not apply, and reference in regulations
67 and 84 to retirement by rotation must be disregarded.
30. A person appointed by the Company to fill a vacancy or as an additional
director is not required to retire from office at the annual general
meeting next following his appointment and the last two sentences of
regulation 79 of Table A are deleted.
31. No person is incapable of being appointed a director by reason of his
having reached the age of 70 or another age. No special notice is
required in connection with the appointment or the approval of the
appointment of such person. No director is required to vacate his office
at any time because he has reached the age of 70 or another age and
section 293 of the Act does not apply to the Company.
DISQUALIFICATION AND REMOVAL OF DIRECTORS
32. The office of a director is vacated if:
(a) he ceases to be a director by virtue of any provision of the Act or
he becomes prohibited by law from being a director; or
(b) he becomes bankrupt or makes any arrangement or composition with
his creditors generally; or
(c) he becomes, in the opinion of all his co-directors, incapable by
reason of mental disorder of discharging his duties as director; or
(d) he resigns his office by notice to the Company; or
(e) he is for more than six consecutive months absent without
permission of the directors from meetings of directors held during
that period and his alternate director (if any) has not during that
period attended any such meetings instead of him, and the directors
resolve that his office be vacated; or
(f) he is removed from office.
REMUNERATION OF DIRECTORS
33. A director who, at the request of the directors, goes or resides abroad,
makes a special journey or performs a special service on behalf of the
Company may be paid such reasonable additional remuneration (whether by
way of
8
<PAGE>
salary, percentage of profits or otherwise) and expenses as the directors
may decide.
PROCEEDINGS OF DIRECTORS
34. Regulation 88 of Table A is modified by the exclusion of the third
sentence and the substitution for it of the following sentences: "Every
director must receive notice of a meeting, whether or not he is absent
from the United Kingdom. A director may waive the requirement that notice
be given to him of a board meeting, either prospectively or
retrospectively.".
35. A quorum for the transaction of business of the directors shall be two,
at least one of whom shall be an "A" Director. Regulation 89 of Table A
shall be modified accordingly.
36. A director or his alternate may validly participate in a meeting of the
directors or a committee of directors through the medium of conference
telephone or similar form of communication equipment if all persons
participating in the meeting are able to hear and speak to each other
throughout the meeting. A person participating in this way is deemed to
be present in person at the meeting and is counted in a quorum and
entitled to vote. Subject to the Act, all business transacted in this way
by the directors or a committee of directors is for the purposes of the
articles deemed to be validly and effectively transacted at a meeting of
the directors or of a committee of directors although fewer than two
directors or alternate directors are physically present at the same
place. The meeting is deemed to take place where the largest group of
those participating is assembled or, if there is no such group, where the
chairman of the meeting then is.
37. Regulation 91 of Table A is modified by the deletion in the first
sentence of "one of their number" and by the substitution for them of the
words "one of the "A" Directors (or his alternate)", and by the deletion
in the last sentence of "one of their number" and by the substitution for
them of the words "one of the "A" Directors (or his alternate)".
38. Without prejudice to the obligation of any director to disclose his
interest in accordance with section 317 of the Act, a director may vote
at a meeting of directors or of a committee of directors on any
resolution concerning a matter in respect of which he has, directly or
indirectly, an interest or duty. The director must be counted in the
quorum present at a meeting when any such resolution is under
consideration and if he votes his vote must be counted.
DIVIDENDS
39. The directors may deduct from a dividend or other amounts payable to a
person in respect of a share any amounts due from him to the Company on
account of a call or otherwise in relation to a share.
9
<PAGE>
CAPITALISATION OF PROFITS
40. The directors may, with the authority of an ordinary resolution of the
Company, resolve that any shares allotted under regulation 110 of Table A
to any member in respect of a holding by the member of any partly paid
shares shall, so long as those shares remain partly paid, rank for
dividends only to the extent that the partly paid shares rank for
dividend. "A" Shares and "B" Shares allotted pursuant to regulation 110
of Table A shall be allotted to holders of "A" Shares and "B" Shares
respectively. Regulation 110 of Table A shall be modified accordingly.
NOTICES
41. Regulation 112 of Table A is modified by the deletion of the last
sentence and the substitution for it of the following: "A member whose
registered address is not within the United Kingdom is entitled to have
notices given to him at that address".
42. A notice sent to a member (or another person entitled to receive notices
under the articles) by post to an address within the United Kingdom is
deemed to be given:
(g) 24 hours after posting, if pre-paid as first class, or
(h) 48 hours after posting, if pre-paid as second class.
A notice sent to a member (or other person entitled to receive notices
under the articles) by post to an address outside the United Kingdom is
deemed to be given 72 hours after posting, if pre-paid as airmail. Proof
that an envelope containing the notice was properly addressed, pre-paid
and posted is conclusive evidence that the notice was given. A notice not
sent by post but left at a member's registered address is deemed to have
been given on the day it was left.
43. Regulation 116 of Table A is modified by the deletion of the words
"within the United Kingdom".
INDEMNITY
44. Subject to the provisions of the Act, but without prejudice to any
indemnity to which he may otherwise be entitled, each person who is a
director, alternate director or secretary of the Company must be
indemnified out of the assets of the Company against all costs, charges,
losses and liabilities incurred by him in the proper execution of his
duties or the proper exercise of his powers, authorities and discretions
including, without limitation, a liability incurred:
(i) defending proceedings (whether civil or criminal) in which
judgement is given in his favour or in which he is acquitted, or
which are otherwise disposed of without a finding or admission of
material breach of duty on his part, or
(j) in connection with any application in which relief is granted to
him by the court from liability for
10
<PAGE>
negligence, default, breach of duty or breach of trust in relation
to the affairs of the Company.
45. The directors may exercise all the powers of the Company to purchase and
maintain insurance for the benefit of a person who is or was:
(k) a director, alternate director, secretary or auditor of the Company
or of a company which is or was a subsidiary undertaking of the
Company or in which the Company has or had an interest (whether
direct or indirect); or
(l) trustee of a retirement benefits scheme or other trust in which a
person referred to in the preceding paragraph is or has been
interested,
indemnifying him against liability for negligence, default, breach of
duty or breach of trust or other liability which may lawfully be insured
against by the Company.
VARIATION OF CLASS RIGHTS
46. Whenever the capital of the Company is divided into different classes of
shares, the special rights attached to the class of shares may be varied
or abrogated, either whilst the Company is a going concern or during or
in contemplation of a winding up, with the consent in writing of the
holders of 75 per cent. of the issued shares of that class, or with the
sanction of a resolution passed at a separate meeting of the holders of
the shares of that class. To every such separate meeting all the
provisions of the articles relating to general meetings of the Company or
to the proceedings thereat shall, mutatis mutandis, apply, save that the
necessary quorum shall be two persons at least holding or representing by
proxy one third in nominal amount of the issued shares of the class (but
so that if at any adjourned meeting of such holders a quorum as above
defined is not present those members who are present shall be a quorum
and where there is only one person holding shares of that class that sole
shareholder shall be a quorum), and that the holders of the shares of the
class shall, on a poll, have one vote in respect of every share of the
class held by them respectively.
11
Class A3 Global Note
[to be amended for SEC/DTC requirements]
GRACECHURCH CARD FUNDING (No. 1) PLC
(a public limited company incorporated under the laws of England and Wales)
$[*]
CLASS A3 ASSET BACKED FLOATING RATE NOTES DUE NOVEMBER 2002
CLASS A3 GLOBAL NOTE
$[*]
[Amount in words]
GRACECHURCH CARD FUNDING (No. 1) PLC (the "Issuer") for value received
promises, all in accordance with the terms and conditions scheduled to the
Trust Deed (the "Note Conditions") to pay to the bearer upon surrender hereof,
the Principal Amount Outstanding of this Class A3 Global Note as indicated on
Schedule 2 hereof, on the Interest Payment Date falling on or about the
Interest Payment date falling in November 2002 (or such earlier date as the
Notes may become repayable in accordance with the Note Conditions herein),
together with interest on the Principal Amount Outstanding of this Class A3
Global Notes at rates calculated from time to time in accordance with the
Conditions and payable in arrear on each Interest Payment Date together with
such other amounts (if any) as may be payable, all subject to and in accordance
with the Conditions, the Trust Deed and the Deed of Charge).
This Class A3 Global Note will be exchangeable for Notes in definitive form in
the limited circumstances set out in Note Condition [*].
The Note Conditions will, for all purposes be an integral part of the terms of
this Class A Global Note as if set forth on the face of this Class A Global
Note. Words and expressions defined in the Note Conditions whall have the same
meaning when used in this Class A3 Global Note.
This Class A3 Global Note is governed by, and shall be construed in accordance
with, English law.
AS WITNESS the signature of a duly authorised officer of the Issuer.
GRACECHURCH CARD FUNDING (No. 1) PLC
By:
ISSUED in London on [*].
This Class A3 Global Note shall not be valid for any purpose until it has been
authenticated for and on behalf of Principal Paying Agent as principal paying
agent.
AUTHENTICATED for and on behalf of
THE BANK OF NEW YORK as principal paying agent without recourse, warranty or
liability
By:
1
<PAGE>
SCHEDULE TO THE CLASS A3 GLOBAL NOTE
PAYMENTS, DELIVERY OF DEFINITIVE CLASS B NOTES AND
CANCELLATION OF NOTES
<TABLE>
<CAPTION>
Aggregate
Date of principal Aggregate
payment, amount of principal
exchange, Definitive amount of New principal
delivery or Amount of Amount of Class B Notes Class B Notes of this Class Authorised
cancellation interest paid principal paid delivered cancelled B Global Note Signature
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
2
<PAGE>
Definitive Class A3 Note
[to be amended for SEC/DTC requirements]
[On the face of the Note:]
$1,000
GRACECHURCH CARD FUNDING (No.1) PLC
(a public limited company incorporated under the laws of England and Wales)
$[*]
CLASS A3 ASSET BACKED FLOATING RATE NOTES DUE NOVEMBER 2002
This Definitive Class A Note is one of a series of Class A3 Notes (the "Class
A3 Notes") of $1,000 each in the aggregate principal amount of $[*] issued by
Gracechurch Card Funding (No.1) PLC (the "Issuer") subject to and with the
benefit of a trust deed dated [*] November 1999 (the "Trust Deed") between the
Issuer and The Bank of New York as note trustee for the holders of the Class A3
Notes.
The Issuer for value received promises, in accordance with the endorsed terms
and conditions (the "Note Conditions"), to pay to the bearer on the Interest
Payment Date (as defined in Note Condition 5(a)) falling in November 2002 or on
such earlier date as this Class A3 Note may become payable in accordance with
the Note Conditions but subject to the provisions of Note Condition 6 the
principal sum of:
$[*]
[AMOUNT IN WORDS]
and to pay interest on such principal sum in arrear on the dates and at the
rate specified in the Note Conditions, together with any additional amounts
payable in accordance with the Note Conditions.
Neither this Class A3 Note nor the Class A3 Coupons relating hereto shall be
valid for any purpose until this Class A3 Note has been authenticated for and
on behalf of The Bank of New York as principal paying agent.
AS WITNESS the facsimile signature of a duly authorised officer on behalf of
the Issuer.
GRACECHURCH CARD FUNDING (No.1) PLC
By:
(duly authorised)
ISSUED in London as of [*] 1999.
AUTHENTICATED for and on behalf of
THE BANK OF NEW YORK as principal paying agent
without recourse, warranty or liability
By:
(duly authorised)
3
<PAGE>
Form of Class A3 Coupon
[On the face of the Class A3 Coupon:]
GRACECHURCH CARD FUNDING (No.1) PLC
$[*]
Class A3 Asset Backed Floating Rate Notes due November 2002
Class A3 Coupon for the amount of interest due on the Interest Payment Date
falling in [month and year].
Such amount is payable, subject to the terms and conditions (the "Note
Conditions") endorsed on the Class A3 Note to which this Coupon relates (which
are binding on the holder of this Class A3 Coupon whether or not it is for the
time being attached to such Class A3 Note), against presentation and surrender
of this Coupon at the specified office for the time being of any of the agents
shown on the reverse of this Coupon (or any successor or additional agents
appointed from time to time in accordance with the Note Conditions).
The Class A3 Note to which this Coupon relates may, in certain circumstances
specified in the Note Conditions, fall due for redemption before the maturity
date of this Coupon. In such event, this Coupon shall become void and no
payment will be made in respect hereof.
4
<PAGE>
[On the reverse of the Class A3 Coupon:]
PAYING AGENT:
The Bank of New York
One Wall Street
New York NY 10286
U.S.A.
5
<PAGE>
PERMANENT GLOBAL NOTE
Series Number:[ ]
Serial Number: [ ]
[Tranche Number:[ ]]
BARCLAYCARD FUNDING PLC
(a public limited company incorporated under the laws of England and Wales)
Barclaycard Asset Backed Medium Term Note Programme
PERMANENT GLOBAL NOTE
representing up to
L[*]
Floating Rate Asset Backed Class A Note due November 2002
This global instrument is a Permanent Global Note with interest coupons issued
in respect of an issue of an aggregate principal amount of L[*] of Floating
Rate Asset Backed Class A Notes due November 2002 (the "Notes") by Barclaycard
Funding PLC (the "Issuer").
The Issuer for value received promises, all in accordance with the terms and
conditions set out in the Series 99-1 Supplement ("Terms and Conditions") and
the Trust Deed (as defined below) to pay to the bearer upon presentation or, as
the case may be, surrender hereof in respect of each Note for the time being
from time to time represented hereby, on the maturity date specified in the
Terms and Conditions or on such earlier date as any such Note may become due
and payable in accordance with the Terms and Conditions, the Redemption Amount
on such dates as may be specified in the Terms and Conditions or, if any such
Note shall become due and payable on any other date, the Redemption Amount and,
in respect of each such Note, to pay interest and all other amounts as may be
payable pursuant to the Terms and Conditions, all subject to and in accordance
therewith.
Except as specified herein, the bearer of this Permanent Global Note is
entitled to the benefit of the Terms and Conditions and of the same obligations
on the part of the Issuer as if such bearer were the bearer of the Notes
represented hereby and to the benefit of those Terms and Conditions (and the
obligations on the part of the Issuer contained therein) applicable
specifically to Permanent Global Notes, and all payments under and to the
bearer of this Permanent Global Note shall be valid and effective to satisfy
and discharge the corresponding Liabilities of the Issuer in respect of the
Notes.
This Permanent Global Note is issued pursuant to a security trust deed dated
[*] November (the "Security Trust Deed") and the supplement thereto in respect
of Series 99-1 (the "Series 99-1 Supplement" and together with the Security
Trust Deed, the "Trust Deed") and made between the Issuer and The Bank of New
York, London Branch as trustee (the "Trustee" which expression includes any
person or corporation appointed from time to time as trustee). Words and
expressions defined expressly or by reference in the Terms and Conditions and
the Trust Deed shall have the same meanings in this Permanent Global Note.
This Permanent Global Note will be exchanged in whole but not in part for
Definitive Notes if (a) any Note of the relevant Series becomes immediately
redeemable following the occurrence of an Event of Default in relation thereto
(b) Morgan Guaranty Trust Company of New York, Brussels office, as operator of
the Euroclear System or Cedelbank, or any other relevant clearing system is
closed for business for a continuous period of 14 days (other than by reason of
legal holidays) or announces an intention to cease business permanently or in
fact does so; or (c) if so specified in the Trust Deed, upon the request of a
Holder of a beneficial interest in this Permanent Global Note. In the case of
(a) and (b), the Issuer shall bear the entire cost and expense and, in the case
of (c) the Holder making such request shall bear the entire cost and expense.
In order to exercise the option contained in paragraph (c) of the preceding
sentence, the bearer hereof must, at the request of the Holder making such
request, not less than forty-five days before the date upon which the delivery
of such Definitive Notes is required, deposit this Permanent Global Note with
the Principal Paying Agent at its specified office with the form of exchange
notice endorsed hereon duly completed. Any Definitive Notes will be made
available for collection by the persons entitled thereto at the specified
office of the Principal Paying Agent.
The Issuer undertakes to procure that the relevant Definitive Notes will be
duly issued in accordance with the Terms and Conditions, the provisions hereof
and of the Trust Deed.
On any occasion on which a payment of interest is made in respect of this
Permanent Global Note, the Issuer shall procure that the same is noted on the
Schedule hereto.
1
<PAGE>
On any occasion on which a payment of principal is made in respect of this
Permanent Global Note or on which this Permanent Global Note is exchanged as
aforesaid or on which any Notes represented by this Permanent Global Note are
to be cancelled the Issuer shall procure that (i) the aggregate principal
amount of the Notes in respect of which such payment is made (or, in the case
of a partial payment, the corresponding part thereof) or which are delivered in
definitive form or which are to be cancelled and (ii) the remaining principal
amount of this Permanent Global Note (which shall be the previous principal
amount hereof less the amount referred to at (i) above) are noted on the
Schedule hereto, whereupon the principal amount of this Permanent Global Note
shall for all purposes be as most recently so noted.
On each occasion on which an option is exercised in respect of any Notes
represented by this Permanent Global Note, the Issuer shall procure that the
appropriate notations are made on the Schedule hereto.
Insofar as the Temporary Global Note by which the Notes were initially
represented has been exchanged in part only for this Permanent Global Note and
is then to be further exchanged as to the remaining principal amount or part
thereof for this Permanent Global Note, then upon presentation of this
Permanent Global Note to the Principal Paying Agent at its specified office and
to the extent that the aggregate principal amount of such Temporary Global Note
is then reduced by reason of such further exchange, the Issuer shall procure
that (i) the aggregate principal amount of the Notes in respect of which such
further exchange is then made and (ii) the new principal amount of this
Permanent Global Note (which shall be the previous principal amount hereof plus
the amount referred to at (i) above) are noted on the Schedule hereto,
whereupon the principal amount of this Permanent Global Note shall for all
purposes be as most recently noted.
The obligations of the Issuer in respect of this Permanent Global Note are
limited recourse in nature, as more particularly set out in the Terms and
Conditions and the Trust Deed. In addition, the bearer of this Permanent Global
Note and, inter alios, the Trustee are restricted in the proceedings which they
may take against the Issuer to enforce their rights hereunder and under the
Trust Deed, as more particularly described in the Terms and Conditions and the
Trust Deed.
This Permanent Global Note is governed by, and shall be construed in accordance
with, English law.
The Issuer irrevocably agrees for the benefit of the bearer that the courts of
England are to have jurisdiction to hear and determine any suit, action or
proceedings, and to settle any disputes, which may arise out of or in
connection with this Permanent Global Note (respectively, "Proceedings" and
"Disputes") and, for such purposes, irrevocably submits to the jurisdiction of
such courts. The Issuer irrevocably waives any objection which it might now or
hereafter have to the courts of England being nominated as the forum to hear
and determine any Proceedings and to settle any Disputes and agrees not to
claim that any such court is not a convenient or appropriate forum.
This Permanent Global Note shall not be valid for any purpose until
authenticated for and on behalf of Barclays Capital as Issue Agent.
AS WITNESS the manual or facsimile signature of a director, duly authorised
officer, or duly authorised attorney on behalf of the Issuer.
BARCLAYCARD FUNDING PLC
By:[manual/facsimile signature]
(director)
ISSUED in London as of [*] 1999
AUTHENTICATED for and on behalf of
THE BANK OF NEW YORK, LONDON BRANCH as Issue Agent
without recourse, warranty or liability
By:[manual signature]
(duly authorised)
2
<PAGE>
THE SCHEDULE
Payments, Delivery of Definitive Note Certificates, Further Exchanges of the
Temporary Global Note, Exercise of Options and Cancellation of Notes
<TABLE>
<CAPTION>
Date of payment,
delivery, further Aggregate
exchange of Temporary principal
Global Note, exercise of amount of Aggregate
option (and date upon Amount of Amount of Definitive Note principal
which exercise is interest then principal then Certificates amount of Notes
effective) or cancellation paid paid then delivered then cancelled
<S> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Aggregate
principal Aggregate
amount of principal Current Authorised
further amount in principal signature by or
exchanges of respect of amount of this on behalf of
Temporary which option is Permanent the Principal
Global Note exercised Global Note Paying Agent
<S> <C> <C> <C>
</TABLE>
3
<PAGE>
EXCHANGE NOTICE
............................., being the bearer of this Permanent Global Note
at the time of its deposit with the Principal Paying Agent at its specified
office for the purposes of the Notes, hereby exercises the option set out above
to have this Permanent Global Note exchanged in whole for Definitive Notes in
aggregate principal amount of [ ] and directs that such Definitive Notes be
made available for collection by it from the Principal Paying Agent's specified
office.
By: ...........................................
(duly authorised
4
Class B Global Note
[to be amended for SEC/DTC requirements]
GRACECHURCH CARD FUNDING (No. 1) PLC
(a public limited company incorporated under the laws of England and Wales)
$[*]
CLASS B ASSET BACKED FLOATING RATE NOTES DUE NOVEMBER 2002
CLASS B GLOBAL NOTE
$[*]
[Amount in words]
GRACECHURCH CARD FUNDING (No. 1) PLC (the "Issuer") for value received
promises, all in accordance with the terms and conditions scheduled to the
Trust Deed (the "Note Conditions") to pay to the bearer upon surrender hereof,
the Principal Amount Outstanding of this Class B Global Note as indicated on
Schedule 2 hereof, on the Interest Payment Date falling on or about the
Interest Payment date falling in November 2002 (or such earlier date as the
Notes may become repayable in accordance with the Note Conditions herein),
together with interest on the Principal Amount Outstanding of this Class B
Global Notes at rates calculated from time to time in accordance with the
Conditions and payable in arrear on each Interest Payment Date together with
such other amounts (if any) as may be payable, all subject to and in accordance
with the Conditions, the Trust Deed and the Deed of Charge).
This Class B Global Note will be exchangeable for Notes in definitive form in
the limited circumstances set out in Note Condition [*].
The Note Conditions will, for all purposes be an integral part of the terms of
this Class A Global Note as if set forth on the face of this Class A Global
Note. Words and expressions defined in the Note Conditions whall have the same
meaning when used in this Class B Global Note.
This Class B Global Note is governed by, and shall be construed in accordance
with, English law.
AS WITNESS the signature of a duly authorised officer of the Issuer.
GRACECHURCH CARD FUNDING (No. 1) PLC
By:
ISSUED in London on [*].
This Class B Global Note shall not be valid for any purpose until it has been
authenticated for and on behalf of Principal Paying Agent as principal paying
agent.
AUTHENTICATED for and on behalf of
THE BANK OF NEW YORK as principal paying agent
without recourse, warranty or liability
By:
1
<PAGE>
SCHEDULE TO THE CLASS B GLOBAL NOTE
PAYMENTS, DELIVERY OF DEFINITIVE CLASS B NOTES AND
CANCELLATION OF NOTES
<TABLE>
<CAPTION>
Aggregate
principal Aggregate
Date of payment, amount of principal
exchange, Definitive amount of New principal
delivery or Amount of Amount of Class B Notes Class B Notes of this Class Authorised
cancellation interest paid principal paid delivered cancelled B Global Note Signature
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
2
<PAGE>
DEFINITIVE CLASS B NOTE
[to be amended for SEC/DTC requirements]
[On the face of the Note:]
$1,000
GRACECHURCH CARD FUNDING (No.1) PLC
(a public limited company incorporated under
the laws of England and Wales)
$[*]
CLASS B ASSET BACKED FLOATING RATE NOTES DUE NOVEMBER 2002
This Definitive Class A Note is one of a series of Class B Notes (the "Class B
Notes") of $1,000 each in the aggregate principal amount of $[*] issued by
Gracechurch Card Funding (No.1) PLC (the "Issuer") subject to and with the
benefit of a trust deed dated [*] November 1999 (the "Trust Deed") between the
Issuer and The Bank of New York as note trustee for the holders of the Class B
Notes.
The Issuer for value received promises, in accordance with the endorsed terms
and conditions (the "Note Conditions"), to pay to the bearer on the Interest
Payment Date (as defined in Note Condition 5(a)) falling in November 2002 or on
such earlier date as this Class B Note may become payable in accordance with
the Note Conditions but subject to the provisions of Note Condition 6 the
principal sum of:
$[*]
[AMOUNT IN WORDS]
and to pay interest on such principal sum in arrear on the dates and at the
rate specified in the Note Conditions, together with any additional amounts
payable in accordance with the Note Conditions.
Neither this Class B Note nor the Class B Coupons relating hereto shall be
valid for any purpose until this Class B Note has been authenticated for and on
behalf of The Bank of New York as principal paying agent.
AS WITNESS the facsimile signature of a duly authorised officer on behalf of
the Issuer.
GRACECHURCH CARD FUNDING (No.1) PLC
By:
(duly authorised)
ISSUED in London as of [*] 1999.
AUTHENTICATED for and on behalf of
THE BANK OF NEW YORK as principal paying agent
without recourse, warranty or liability
By:
(duly authorised)
3
<PAGE>
Form of Class B Coupon
[On the face of the Class B Coupon:]
GRACECHURCH CARD FUNDING (No.1) PLC
$[*]
Class B Asset Backed Floating Rate Notes due November 2002
Class B Coupon for the amount of interest due on the Interest Payment Date
falling in [month and year].
Such amount is payable, subject to the terms and conditions (the "Note
Conditions") endorsed on the Class B Note to which this Coupon relates (which
are binding on the holder of this Class B Coupon whether or not it is for the
time being attached to such Class B Note), against presentation and surrender
of this Coupon at the specified office for the time being of any of the agents
shown on the reverse of this Coupon (or any successor or additional agents
appointed from time to time in accordance with the Note Conditions).
The Class B Note to which this Coupon relates may, in certain circumstances
specified in the Note Conditions, fall due for redemption before the maturity
date of this Coupon. In such event, this Coupon shall become void and no
payment will be made in respect hereof.
4
<PAGE>
[On the reverse of the Class B Coupon:]
PAYING AGENT:
The Bank of New York
One Wall Street
New York NY 10286
U.S.A.
5
<PAGE>
PERMANENT GLOBAL NOTE
Series Number:[ ]
Serial Number: [ ]
[Tranche Number:[ ]]
BARCLAYCARD FUNDING PLC
(a public limited company incorporated under the laws of England and Wales)
Barclaycard Asset Backed Medium Term Note Programme
PERMANENT GLOBAL NOTE
representing up to
L[*]
Floating Rate Asset Backed Class B Note due November 2002
This global instrument is a Permanent Global Note with interest coupons issued
in respect of an issue of an aggregate principal amount of L[*] of Floating
Rate Asset Backed Class B Notes due November 2002 (the "Notes") by Barclaycard
Funding PLC (the "Issuer").
The Issuer for value received promises, all in accordance with the terms and
conditions set out in the Series 99-1 Supplement ("Terms and Conditions") and
the Trust Deed (as defined below) to pay to the bearer upon presentation or, as
the case may be, surrender hereof in respect of each Note for the time being
from time to time represented hereby, on the maturity date specified in the
Terms and Conditions or on such earlier date as any such Note may become due
and payable in accordance with the Terms and Conditions, the Redemption Amount
on such dates as may be specified in the Terms and Conditions or, if any such
Note shall become due and payable on any other date, the Redemption Amount and,
in respect of each such Note, to pay interest and all other amounts as may be
payable pursuant to the Terms and Conditions, all subject to and in accordance
therewith.
Except as specified herein, the bearer of this Permanent Global Note is
entitled to the benefit of the Terms and Conditions and of the same obligations
on the part of the Issuer as if such bearer were the bearer of the Notes
represented hereby and to the benefit of those Terms and Conditions (and the
obligations on the part of the Issuer contained therein) applicable
specifically to Permanent Global Notes, and all payments under and to the
bearer of this Permanent Global Note shall be valid and effective to satisfy
and discharge the corresponding Liabilities of the Issuer in respect of the
Notes.
This Permanent Global Note is issued pursuant to a security trust deed dated
[*] November (the "Security Trust Deed") and the supplement thereto in respect
of Series 99-1 (the "Series 99-1 Supplement" and together with the Security
Trust Deed, the "Trust Deed") and made between the Issuer and The Bank of New
York, London Branch as trustee (the "Trustee" which expression includes any
person or corporation appointed from time to time as trustee). Words and
expressions defined expressly or by reference in the Terms and Conditions and
the Trust Deed shall have the same meanings in this Permanent Global Note.
This Permanent Global Note will be exchanged in whole but not in part for
Definitive Notes if (a) any Note of the relevant Series becomes immediately
redeemable following the occurrence of an Event of Default in relation thereto
(b) Morgan Guaranty Trust Company of New York, Brussels office, as operator of
the Euroclear System or Cedelbank, or any other relevant clearing system is
closed for business for a continuous period of 14 days (other than by reason of
legal holidays) or announces an intention to cease business permanently or in
fact does so; or (c) if so specified in the Trust Deed, upon the request of a
Holder of a beneficial interest in this Permanent Global Note. In the case of
(a) and (b), the Issuer shall bear the entire cost and expense and, in the case
of (c) the Holder making such request shall bear the entire cost and expense.
In order to exercise the option contained in paragraph (c) of the preceding
sentence, the bearer hereof must, at the request of the Holder making such
request, not less than forty-five days before the date upon which the delivery
of such Definitive Notes is required, deposit this Permanent Global Note with
the Principal Paying Agent at its specified office with the form of exchange
notice endorsed hereon duly completed. Any Definitive Notes will be made
available for collection by the persons entitled thereto at the specified
office of the Principal Paying Agent.
The Issuer undertakes to procure that the relevant Definitive Notes will be
duly issued in accordance with the Terms and Conditions, the provisions hereof
and of the Trust Deed.
On any occasion on which a payment of interest is made in respect of this
Permanent Global Note, the Issuer shall procure that the same is noted on the
Schedule hereto.
On any occasion on which a payment of principal is made in respect of this
Permanent Global Note or on which this Permanent Global Note is exchanged as
aforesaid or on which any Notes represented by this Permanent Global Note
1
<PAGE>
are to be cancelled the Issuer shall procure that (i) the aggregate principal
amount of the Notes in respect of which such payment is made (or, in the case
of a partial payment, the corresponding part thereof) or which are delivered in
definitive form or which are to be cancelled and (ii) the remaining principal
amount of this Permanent Global Note (which shall be the previous principal
amount hereof less the amount referred to at (i) above) are noted on the
Schedule hereto, whereupon the principal amount of this Permanent Global Note
shall for all purposes be as most recently so noted.
On each occasion on which an option is exercised in respect of any Notes
represented by this Permanent Global Note, the Issuer shall procure that the
appropriate notations are made on the Schedule hereto.
Insofar as the Temporary Global Note by which the Notes were initially
represented has been exchanged in part only for this Permanent Global Note and
is then to be further exchanged as to the remaining principal amount or part
thereof for this Permanent Global Note, then upon presentation of this
Permanent Global Note to the Principal Paying Agent at its specified office and
to the extent that the aggregate principal amount of such Temporary Global Note
is then reduced by reason of such further exchange, the Issuer shall procure
that (i) the aggregate principal amount of the Notes in respect of which such
further exchange is then made and (ii) the new principal amount of this
Permanent Global Note (which shall be the previous principal amount hereof plus
the amount referred to at (i) above) are noted on the Schedule hereto,
whereupon the principal amount of this Permanent Global Note shall for all
purposes be as most recently noted.
The obligations of the Issuer in respect of this Permanent Global Note are
limited recourse in nature, as more particularly set out in the Terms and
Conditions and the Trust Deed. In addition, the bearer of this Permanent Global
Note and, inter alios, the Trustee are restricted in the proceedings which they
may take against the Issuer to enforce their rights hereunder and under the
Trust Deed, as more particularly described in the Terms and Conditions and the
Trust Deed.
This Permanent Global Note is governed by, and shall be construed in accordance
with, English law.
The Issuer irrevocably agrees for the benefit of the bearer that the courts of
England are to have jurisdiction to hear and determine any suit, action or
proceedings, and to settle any disputes, which may arise out of or in
connection with this Permanent Global Note (respectively, "Proceedings" and
"Disputes") and, for such purposes, irrevocably submits to the jurisdiction of
such courts. The Issuer irrevocably waives any objection which it might now or
hereafter have to the courts of England being nominated as the forum to hear
and determine any Proceedings and to settle any Disputes and agrees not to
claim that any such court is not a convenient or appropriate forum.
This Permanent Global Note shall not be valid for any purpose until
authenticated for and on behalf of Barclays Capital as Issue Agent.
AS WITNESS the manual or facsimile signature of a director, duly authorised
officer, or duly authorised attorney on behalf of the Issuer.
BARCLAYCARD FUNDING PLC
By:[manual/facsimile signature]
(director)
2
<PAGE>
ISSUED in London as of [*] 1999
AUTHENTICATED for and on behalf of
THE BANK OF NEW YORK, LONDON BRANCH as Issue Agent
without recourse, warranty or liability
By:[manual signature]
(duly authorised)
3
<PAGE>
THE SCHEDULE
Payments, Delivery of Definitive Note Certificates, Further Exchanges of the
Temporary Global Note, Exercise of Options and Cancellation of Notes
<TABLE>
<CAPTION>
Date of payment,
delivery, further Aggregate
exchange of Temporary principal
Global Note, exercise of amount of Aggregate
option (and date upon Amount of Amount of Definitive Note principal
which exercise is interest then principal then Certificates amount of Notes
effective) or cancellation paid paid then delivered then cancelled
<S> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Aggregate
principal Aggregate
amount of principal Current Authorised
further amount in principal signature by or
exchanges of respect of amount of this on behalf of
Temporary which option is Permanent the Principal
Global Note exercised Global Note Paying Agent
<S> <C> <C> <C>
</TABLE>
4
<PAGE>
EXCHANGE NOTICE
............................., being the bearer of this Permanent Global Note
at the time of its deposit with the Principal Paying Agent at its specified
office for the purposes of the Notes, hereby exercises the option set out above
to have this Permanent Global Note exchanged in whole for Definitive Notes in
aggregate principal amount of [ ] and directs that such Definitive Notes be
made available for collection by it from the Principal Paying Agent's specified
office.
By: ...........................................
(duly authorised)
5
B1227/19155/KPI 18 October 1999
Gracechurch Card Funding (No.1) PLC
200 Aldersgate Street
London EC1A 4JJ Ladies and Gentlemen:
Re: Gracechurch Card Funding (No.1) PLC
We have acted as special outside counsel of Gracechurch Card Funding
(No.1) PLC (the "Seller") and have examined the Registration Statement on Form
F-1 (Registration No. 333-10970) (the "Registration Statement") filed by the
Seller with the Securities and Exchange Commission (the "Commission") with
respect to the issuance by the Seller of a series of its Floating Rate Asset
Backed Class A3 Notes and Class B Notes, Series 99-1 (the Class A3 Notes and
the Class B Notes, together the "Notes"). The Notes to be issued by the Seller
are constituted pursuant to the Trust Deed (the "Trust Deed"), a form of which
is attached to the Registration Statement as Exhibit 4.5. Terms used herein and
not defined herein shall have the meaning set forth in the Trust Deed.
We are familiar with the proceedings to date with respect to the proposed
offering and sale to the public of the Notes and have examined such records,
documents and matters of law and satisfied ourselves as to such matters of fact
as we have considered relevant for the purposes of this opinion.
Based on the foregoing, it is our opinion that when:
1. the Trust Deed pertaining to the Notes shall have been duly
executed and delivered by the parties thereto,
2. the Notes shall have been duly executed by the Seller and
authenticated by the Note Trustee in accordance with the Trust
Deed and delivered by the Seller, in the case of the Class A3
Notes, in accordance with the Class A3 Note Subscription Agreement
(the "A3 Subscription Agreement"), and, in the case of the Class B
Notes, the Class B Note Subscription Agreement (the "B
Subscription Agreement"), a form of each of which is attached to
the Registration Statement as Exhibit 1.1,
3. the Seller shall have received the agreed purchase price for the
Notes, in the case of the Class A3 Notes, in accordance with the
A3 Subscription Agreement and, in the case of the Class B Notes,
in accordance with the B Subscription Agreement, and
4. the Registration Statement shall have been declared effective by
the Commission under the Securities Act of 1933, as amended (the
"Securities Act"),
the Notes will be legally issued, fully paid and non-assessable, and will be
entitled to the benefits of the Trust Deed.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus which forms a part of the Registration Statement,
and to the filing of this consent as an exhibit to the Registration Statement.
In giving such consent, we do
1
<PAGE>
not consider that we are in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the
Commission promulgated thereunder.
Very truly yours,
Clifford Chance
2
19 October 1999
Gracechurch Card Funding (No.1) PLC
200 Aldersgate Street, London
EC1A 4JJ, United Kingdom
Re: Gracechurch Card Funding (No.1) PLC
Ladies and Gentlemen:
We have acted as U.S. tax counsel for Gracechurch Card Funding (No.1) PLC,
a public limited company incorporated in England and Wales (the "Issuer"), in
connection with the preparation of the Registration Statement on Form F-1 (the
"Registration Statement"), which has been filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"),
for the registration under the Act of class A3 notes (the "Notes") representing
non-recourse asset backed obligations of the Issuer. The Notes are to be issued
pursuant to a trust deed, governed by English law (the "Trust Deed") between
the Issuer and the Bank of New York acting through its London branch, as
trustee, substantially in the form filed as exhibit 4.5 to the Registration
Statement.
We hereby confirm that the statements set forth in the prospectus relating
to the Notes (the "Prospectus") forming a part of the Registration Statement
under the headings "Prospectus Summary: United States Federal Income Tax
Status" and "United States Federal Income Tax Consequences", to the extent that
they constitute matters of law or legal conclusions with respect thereto, are
correct in all material respects. We further hereby confirm and adopt the
opinions as to the material federal tax consequences of the purchase, ownership
and disposition of the notes set forth in the Prospectus under the heading
"United States Federal Income Tax Consequences". The statements concerning
federal income tax consequences contained in the prospectus do not purport to
discuss all possible United States income tax ramifications of the proposed
issuance. In particular, no opinion is given as to the characterisation of the
Notes as debt or equity for United States Federal income tax purposes.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to Orrick, Herrington &
Sutcliffe LLP under the captions "Legal Matters", "Prospectus Summary: United
States Federal Income Tax Status" and "United States Federal Income Tax
Consequences" in the Prospectus. In giving such consent, we do not admit that we
are "experts," within the meaning of the term used in the Act or the rules and
regulations of the Securities and Exchange Commission issued thereunder, with
respect to any part of the Registration Statement, including this opinion as an
exhibit or otherwise.
Respectfully submitted,
/s/ORRICK, HERRINGTON & SUTCLIFFE LLP
1
Draft Date: 12 September 1999
Draft: 2
RECEIVABLES SECURITISATION AGREEMENT
BETWEEN
BARCLAYS BANK PLC
AS TRANSFEROR
AND
[*]
AS RECEIVABLES TRUSTEE
CLIFFORD CHANCE
1
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
Clause Page
<S> <C>
1. Interpretation..................................................... 1
2. Offer Of Receivables............................................... 2
3. Acceptance Of Offer And Payment For Existing Receivables........... 7
4. Assignment Of Receivables.......................................... 8
5. Payment For Future Receivables...................................... 9
6. Perfection And Directions As To Payment............................ 10
7. Redesignation And Removal Of Accounts.............................. 12
8. Discount Percentage, Special Fees, Annual Fees And Acquired
Interchange........................................................ 14
9. Trust.............................................................. 16
10. Reductions In Receivables, Early Collections And Credit Adjustments 17
11. Breach Of Warranty ................................................ 18
12. Currency Of Account And Payment ................................... 19
13. Payments By The Transferor, Additional Transferors And The
Receivables Trustee................................................ 19
14. The Collection Agent And The Collection Agent Accounts ............ 21
15. [*] Operating Account And [*] Proceeds Account .................... 22
16. The Trustee Collection Account .................................... 22
17. Representations ................................................... 22
18. Covenants ......................................................... 23
19. Stamp Duty ........................................................ 25
20. Non-Petition ...................................................... 25
21. Benefit Of Agreement .............................................. 25
22. Disclosure Of Information ......................................... 26
23. Remedies And Waivers .............................................. 26
24. Partial Invalidity ................................................ 27
25. Counterparts ...................................................... 27
26. Notices ........................................................... 27
27. Termination Of Trust And Servicing Agreement ...................... 28
28. Law ............................................................... 28
29. Jurisdiction ...................................................... 28
SCHEDULE 1 Eligible Account Criteria................................... 29
SCHEDULE 2 Eligible Receivables........................................ 30
SCHEDULE 3 Form Of Offer............................................... 31
SCHEDULE 4 [Conditions Precedent To Subsequent Offers.................. 34
SCHEDULE 5 35
Part 1 Representations As To Matters Of Law.......................... 35
Part 2 Representations As To Matters Of Fact......................... 36
Part 3 Representations Relating To Receivables....................... 37
SCHEDULE 6 Notification Events......................................... 38
SCHEDULE 7 Form Of Solvency Certificate................................ 39
</TABLE>
2
<PAGE>
THIS AGREEMENT is made the day of , 1999
BETWEEN
(1) BARCLAYS BANK PLC, an institution authorised under the Banking Act 1987,
acting through its business unit "Barclaycard", having its principal
place of business at 1234 Pavillion Drive, Northampton NN4 7SG (the
"Transferor"); and
(2) [*], a company incorporated in Jersey having its registered office at
Normandy House, Grenville Street, St. Helier, Jersey JE2 4UF, Channel
Islands in its capacity as Receivables Trustee.
WHEREAS
(A) The Transferor has owed to it at present and expects to have owed to it
in the future Receivables arising in the course of its business.
(B) The Transferor and the Receivables Trustee have agreed, upon the terms
and subject to the conditions of this Agreement, that the Transferor may
from time to time offer to assign all Receivables arising on Designated
Accounts (both Existing Receivables and Future Receivables) to the
Receivables Trustee.
(C) The Transferor and the Receivables Trustee have agreed, that subject to
the delivery of an Accession Notice, any member of the Barclays Group
which from time to time originates Accounts or to whom legal and
beneficial title to all or any Accounts is transferred (an "Additional
Transferor") may from time to time offer to assign all Existing
Receivables and Future Receivables arising on such transferred Accounts
subject to and in accordance with the conditions hereof.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 Whenever used in this Agreement, the words and phrases defined in the
Master Definitions Schedule of even date herewith and signed by the
parties hereto shall, unless otherwise defined herein or the context
requires otherwise, bear the same meanings herein (including the recitals
hereto).
1.2 In this Agreement:
1.2.1 an "Article", "Clause", "Recital" or "Schedule" is, subject to any
contrary indication, a reference to an article or clause hereof or
a recital or schedule hereto;
1.2.2 "stamp duty" shall be construed as a reference to any stamp,
registration or other transaction or documentary tax (including,
without limitation, any penalty or interest payable in connection
with any failure to pay or any delay in paying any of the same);
1.2.3 a "subsidiary" of a company or corporation shall be construed as a
reference to any company or corporation:
(a) which is controlled, directly or indirectly, by the first-
mentioned company or corporation;
(b) more than half the issued share capital of which is
beneficially owned, directly or indirectly, by the first-
mentioned company or corporation; or
(c) which is a subsidiary of another subsidiary of the first-
mentioned company or corporation
and, for these purposes, a company or corporation shall be treated
as being controlled by another if that other company or
corporation is able to direct its affairs and/or to control the
composition of its board of directors or equivalent body; and
1.2.4 the "administration", "bankruptcy", "dissolution", "insolvency",
"liquidation", "receivership" or "winding-up" of any person shall
be construed so as to include any equivalent or analogous
proceedings under the laws of the jurisdiction in which such
person is incorporated (or, if not a company or corporation,
domiciled) or any jurisdiction in which such person carries on
business.
1.3 "L" and "Sterling" denote lawful currency for the time being of the
United Kingdom of Great Britain and Northern Ireland.
1.4 Save where the contrary is indicated, any reference in this Agreement to:
1.4.1 this Agreement or any other agreement or document shall be
construed as a reference to this Agreement or, as the case may be,
such other agreement or document as the same may have been, or may
from time to time be, amended, varied, novated or supplemented;
1.4.2 a statute shall be construed as a reference to such statute as the
same may have been, or may from time to time be, amended or re-
enacted; and
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<PAGE>
1.4.3 a time of day (including opening and closing of business) shall be
construed as a reference to London time.
1.5 Clause and Schedule headings are for ease of reference only.
1.6 Costs, charges, expenses or remuneration shall be deemed to include
references to VAT except where the context otherwise requires.
2. OFFER OF RECEIVABLES
2.1 The Transferor may (subject to receipt by the Receivables Trustee of the
documents referred to in the Closing Documents List in form and substance
satisfactory to the Receivables Trustee), by delivering to the
Receivables Trustee an Offer substantially in the form set out in the
Third Schedule:
2.1.1 nominate all existing Accounts of a Specified Product Line to be
Designated Accounts (but excluding those existing Accounts which
have been identified on the Transferor's system as being excluded
from such nomination); and/or
2.1.2 nominate all future Accounts in respect of a Specified Product
Line to be Designated Accounts, which nomination shall be deemed
to be a nomination of all Accounts which come into existence under
that Specified Product Line during the next Monthly Period (unless
and to the extent that such Accounts have been identified on the
Transferor's system as from the relevant Account Creation Date as
being excluded from such nomination),
and offer to the Receivables Trustee in respect of the Initial Offer Date
an assignment of:
(A) in respect of existing Accounts on a Specified Product Line
nominated as Designated Accounts:
(a) all Existing Receivables under each Account nominated in
such Offer;
(b) all Future Receivables under each such Account which are
not Finance Charge Receivables in respect of Principal
Receivables until the earliest of:
(i) in respect of each such Account, such time (if any)
as such Account becomes a Redesignated Account;
(ii) the termination of the Receivables Trust; or
(iii) the occurrence of an Insolvency Event;
(c) all Future Receivables under each Account nominated in such
Offer which are Finance Charge Receivables in respect of
Receivables which are assigned (or purported to be
assigned) to the Receivables Trustee pursuant to paragraphs
(a) and (b) above;
(d) (to the extent such are capable of assignment) the benefit
of each guarantee or insurance policy obtained by the
Transferor in respect of the obligations of an Obligor to
make payments on any such Account,
(B) in respect of future Accounts arising on a Specified Product Line
nominated as Designated Accounts during the next Monthly Period:
(a) all Future Receivables under each such Account which are
not Finance Charge Receivables in respect of Principal
Receivables until the earliest of:
(i) in respect of each such Account, such time (if any)
as such Account becomes a Redesignated Account;
(ii) the termination of the Receivables Trust; or
(iii) the occurrence of an Insolvency Event;
(b) all Future Receivables under each Account nominated in such
Offer which are Finance Charge Receivables in respect of
Receivables which are assigned (or purported to be
assigned) to the Receivables Trustee pursuant to paragraph
(a) above; and
(c) (to the extent such are capable of assignment) the benefit
of each guarantee or insurance policy obtained by the
Transferor in respect of the obligations of an Obligor to
make payments on any such Account; and
(C) the benefit of all amounts representing Acquired Interchange in
respect of each Monthly Period.
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<PAGE>
2.2 The Transferor or any Additional Transferor may on any Offer Date falling
prior to the termination of the Receivables Trust or on any other
Business Day with the written consent of [*] by delivering to the
Receivables Trustee an Offer substantially in the form set out in the
Third Schedule:
2.2.1 nominate all existing Accounts of a Specified Product Line to be
Designated Accounts (but excluding those existing Accounts which
have been identified on the Transferor's or, as the case may be,
such Additional Transferor's system as being excluded from such
nomination); and/or
2.2.2 nominate all future Accounts in respect of a Specified Product
Line to be Designated Accounts, which nomination shall be deemed
to be a nomination of all Accounts which come into existence under
that Specified Product Line during the next Monthly Period or, if
the Offer is not made on an Offer Date, during the current or (if
specified) the next following Monthly Period (unless and to the
extent that such Accounts have been identified on the Transferor's
or, as the case may be, such Additional Transferor's system as
being excluded from such nomination).
and offer to the Receivables Trustee in respect of that Offer Date an
assignment of:
(A) in respect of existing Accounts on a Specified Product Line
nominated as Designated Accounts:
(a) all Existing Receivables under each Account nominated in
such Offer;
(b) all Future Receivables under each such Account which are
not Finance Charge Receivables in respect of Principal
Receivables until the earliest of:
(i) in respect of each such Account, such time (if any)
as such Account becomes a Redesignated Account;
(ii) the termination of the Receivables Trust; or
(iii) the occurrence of an Insolvency Event;
(c) all Future Receivables under each such Account which are
Finance Charge Receivables in respect of Receivables which
are assigned (or purported to be assigned) to the
Receivables Trustee pursuant to paragraphs (a) and (b)
above; and
(d) (to the extent such are capable of assignment) the benefit
of each guarantee or insurance policy obtained by the
Transferor in respect of the obligations of an Obligor to
make payments on any such Account,
(B) in respect of future Accounts arising on a Specified Product Line
nominated as Designated Accounts during the next Monthly Period or
specified Monthly Period if the Offer is not made on an Offer
Date:
(a) all Future Receivables under each such Account which are
not Finance Charge Receivables in respect of Principal
Receivables until the earliest of:
(i) in respect of each such Account, such time (if any)
as such Account becomes a Redesignated Account;
(ii) the termination of the Receivables Trust; or
(iii) the occurrence of an Insolvency Event;
(b) all Future Receivables under each such Account which are
Finance Charge Receivables in respect of Receivables which
are assigned (or purported to be assigned) to the
Receivables Trustee pursuant to paragraph (a) above; and
(c) (to the extent such are capable of assignment) the benefit
of each guarantee or insurance policy obtained by the
Transferor in respect of the obligations of an Obligor to
make payments on any such Account.
Provided, however, that prior to or simultaneously with the making of
each such Offer in respect of an Offer Date, the Transferor or, as the
case may be, such Additional Transferor shall have satisfied the
conditions precedent set out in the Fourth Schedule unless such
conditions precedent have been waived in writing by the Receivables
Trustee (if it has received written confirmation from each relevant
Rating Agency that such waiver will not result in such Rating Agency
reducing or withdrawing its then current rating on any outstanding
Related Debt).
2.3 Every Offer delivered by the Transferor pursuant to Clause 2.1 or by the
Transferor or an Additional Transferor Clause 2.2 shall:
2.3.1 (i) specify that the Accounts nominated pursuant to Clauses
2.1.1(A) or 2.2.1(A) have been identified by the Transferor or, as
the case may be, such Additional Transferor, on its system, and/or
(ii)
5
<PAGE>
undertake that its system will identify those Accounts nominated
pursuant to Clauses 2.1.2(B) or 2.2.2(B), as from the relevant
Account Creation Date, as Designated Accounts in respect of which
an assignment of Existing Receivables and Future Receivables is
being offered to the Receivables Trustee;
2.3.2 in respect of Existing Receivables arising in Designated Accounts
nominated under Clauses 2.1.1(A)(a) or 2.1.2(A)(a):
(a) specify the aggregate amount of the Eligible Receivables
comprised therein;
(b) specify the total Outstanding Face Amount of the Principal
Receivables and the total outstanding balance of the
Finance Charge Receivables comprised in such Eligible
Receivables; and
(c) specify the aggregate amount of the Ineligible Receivables
comprised therein;
2.3.3 be delivered no later than 12.00 noon on the Offer Date relating
thereto; and
2.3.4 constitute an offer by the Transferor or, as the case may be, such
Additional Transferor to sell and assign to the Receivables
Trustee absolutely all of the Transferor's right, title and
interest in and to the Existing Receivables and Future Receivables
arising on each Account nominated in the Offer at the related
Purchase Price therefor on the terms and conditions of this
Agreement, together with (to the extent such are capable of
assignment) the benefit of each guarantee or insurance policy
obtained by the Transferor or, as the case may be, such Additional
Transferor, in respect of the obligations of an Obligor to make
payments on any such Receivables and, in the case of an Offer
delivered pursuant to [Clause 2.1], the benefit of all amounts
representing Acquired Interchange in respect of each Monthly
Period.
2.4 The Transferor and, upon execution of an Accession Notice, each
Additional Transferor agrees to maintain a system which, during the term
of this Agreement, will identify any Accounts which are excluded from
nomination as Designated Accounts in an Offer made pursuant to Clause 2.1
or Clause 2.2. The Transferor and upon execution of an Accession Notice,
each Additional Transferor further agrees to deliver to the extent
permitted by applicable law, on or before the twentieth Business Day (or
within such period as may otherwise be agreed between the Transferor and
(upon execution of an Accession Notice, each Additional Transferor) and
the Servicer) on behalf of the Receivables Trustee may at any time in
writing request, a computer file or microfiche list containing a true and
complete list of all Designated Agreements each identified by a specific
number identifying such Designated Agreement. Provided however, that the
Servicer on behalf of the Receivables Trustee may not request such list
or information more than once during any calendar year unless an
Insolvency Event has occurred and is subsisting, in which case such
request may be made at any time with reasonable frequency.
2.5 The Transferor and upon execution of an Accession Notice, each Additional
Transferor agrees not to alter the file designation with respect to any
Designated Account during the term of this Agreement unless and until
such Designated Account becomes a Removed Account.
2.6 The Transferor and upon execution of an Accession Notice, each Additional
Transferor agrees that if any Offer shall lapse before it is accepted in
accordance with Clause 3.5 it will ensure the Accounts which are
nominated in such lapsed Offer are identified (either at the time of such
lapse the relevant Account Creation Date, as applicable) as not being
Designated Accounts in its system.
2.7 The Transferor may, at any time after the Initial Offer Date, designate
any subsidiary of the Transferor which originates Accounts in the course
of its business and/or to which the Transferor's right, title and
interest in and to Designated Accounts have been assigned as an
Additional Transferor for the purpose of making Offers under this
Agreement, by delivering or procuring the delivery to the Receivables
Trustee of an Accession Notice duly executed by the Transferor and such
nominated subsidiary of the Transferor in such form as the Receivables
Trustee may require together with such other documents (including legal
opinions) as the Receivables Trustee shall require and such nominated
subsidiary shall not be admitted as an Additional Transferor for the
purposes of this Agreement until such time as the Receivables Trustee
shall have confirmed to the Transferor and the Additional Beneficiary
that it has received the Accession Notice and such other prescribed
documents in form and substance satisfactory to the Receivables Trustee.
3. ACCEPTANCE OF OFFER AND PAYMENT FOR EXISTING RECEIVABLES
3.1 Subject to the receipt of the required funds by the Receivables Trustee
from or on behalf of the Beneficiaries, the Receivables Trustee shall
accept any Offer made in accordance with Clause 2.3 in the manner
specified in Clause 3.5.
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3.2 In consideration of the commitment of the Receivables Trustee described
in Clause 3.1, the Transferor shall pay on the date hereof and each
Additional Transfer shall pay on the date of its accession hereunder the
sum of L1 to the Receivables Trustee (receipt whereof is hereby
acknowledged).
3.3 Each Offer shall be accepted by the Receivables Trustee only with respect
to the Existing Receivables and Future Receivables on Accounts nominated
therein and any purported form of acceptance of an Offer otherwise than
in the manner specified in Clause 3.5 shall be null and void and of no
effect (and for the avoidance of doubt nothing in this Agreement or in
any Offer shall of itself operate so as to convey or transfer to any
person any beneficial interest in any Receivables).
3.4 Each Offer shall be irrevocable and binding on the Transferor or, as the
case may be, an Additional Transferor, until (if not accepted before such
time) close of business on the Business Day immediately succeeding the
Offer Date relating thereto or, if the Offer is not made on an Offer
Date, the Business Day immediately succeeding the day the Offer is made
(or such longer period of time for acceptance as may be agreed upon by
the Transferor or, as the case may be, an Additional Transferor, and the
Receivables Trustee), when that Offer shall lapse.
3.5 Each Offer may be accepted only by way of payment of the relevant amount
of the Purchase Price in respect of Existing Receivables the subject of
such Offer to be paid in cash in respect of such Offer being made by or
on behalf of the Receivables Trustee to the Transferor or, as the case
may be, the Additional Transferor in accordance with the Transferor's or,
as the case may be, the Additional Transferor, irrevocable instructions
set out in Clause 6.1 by no later than close of business on the Business
Day immediately succeeding the relevant Offer Date, or such longer period
of time for acceptance as may be agreed upon by the Transferor (or, as
the case may be, the Additional Transferor) and the Receivables Trustee
Provided, however, that the Offer made on the Initial Offer Date shall be
accepted by no later than close of business on the Initial Offer Date.
4. ASSIGNMENT OF RECEIVABLES
4.1 Upon acceptance of an Offer pursuant to Clause 3.5, all of the
Transferor's or, as the case may be, the Additional Transferor's, rights,
title and interest in and to:
4.1.1 the Existing Receivables under each Designated Account nominated
in that Offer; and
4.1.2 the Future Receivables under each such Designated Account which
are not Finance Charge Receivables in respect of Principal
Receivables, until the earliest of:
(a) in respect of each Designated Account, such time (if any),
as such Account becomes a Redesignated Account;
(b) the termination of the Receivables Trust; or
(c) the occurrence of an Insolvency Event;
4.1.3 all Future Receivables under each Account nominated in such Offer
which are Finance Charge Receivables in respect of Receivables
which are assigned (or purported to be assigned) to the
Receivables Trustee pursuant to paragraphs 4.1.1 and 4.1.2 above;
4.1.4 (to the extent such are capable of assignment) the benefit of each
guarantee or insurance policy obtained by the Transferor or, as
the case may be, the Additional Transferor, in respect of the
obligations of an Obligor to make payments on any such Designated
Account; and
4.1.5 (in respect of the Offer made on the Initial Offer Date) the
benefit of all amounts representing Acquired Interchange in
respect of each Monthly Period,
shall thereupon pass to the Receivables Trustee on the terms and
conditions of this Agreement and the Offer.
4.2 It is hereby agreed, for the avoidance of doubt, that no transfer or
purported transfer of Receivables pursuant to this Clause shall be
rendered ineffective or void or otherwise impaired by reason only of it
being subsequently discovered that the Account(s) relating to such
Receivables either:
4.2.1 did not arise under the relevant Specified Product Line relating
to such Account(s), as named in the relevant Offer; or
4.2.2 did arise under the Specified Product Line relating to such
Account(s) in the relevant Offer but were subsequently removed
from such Specified Product Line without having been redesignated
or removed in accordance with Clause 7.
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5. PAYMENT FOR FUTURE RECEIVABLES
5.1 In consideration of the assignment by the Transferor or any Additional
Transferor to the Receivables Trustee of Future Receivables coming into
existence on any day (which Receivables will have been automatically
assigned in equity to the Receivables Trustee) and the benefit of
Acquired Interchange in respect of each Monthly Period, the Receivables
Trustee shall pay to the Transferor or, as the case may be, such
Additional Transferor (and, in respect of the amount to be paid in cash,
in accordance with Clause 6.2), not later than the Business Day which is
two Business Days after the Date of Processing relating to such Future
Receivables or such longer period of time as may be agreed upon by the
Transferor or, as the case may be, such Additional Transferor and the
Receivables Trustee (with the prior written confirmation of each Rating
Agency that such increase in time shall not cause a downgrade in the then
current rating of any outstanding Related Debt), an amount equal to the
Outstanding Face Amount of the Principal Receivables comprised therein as
calculated by the Transferor or, as the case may be, such Additional
Transferor and notified to the Receivables Trustee by the Transferor or,
as the case may be, such Additional Transferor (and specifying the
aggregate amount of such Principal Receivables which are Ineligible
Receivables) by no later than 12.00 noon on such day for payment.
5.2 The Transferor and each Additional Transfer shall prepare and maintain a
daily activity report (the "Daily Activity Report") in connection with
the payment required under Clause 5.1 which shall specify with reference
to the Designated Accounts of the Transferor or, as the case may be, such
Additional Transferor (on an aggregate basis):
5.2.1 the outstanding balance of the Future Receivables which have
arisen and which have automatically been assigned in equity to the
Receivables Trustee since the previous Daily Activity Report and
which are Eligible Receivables;
5.2.2 the Outstanding Face Amount of the Principal Receivables which are
Eligible Receivables and the amount of the Finance Charge
Receivables comprised in such Eligible Receivables; and
5.2.3 the outstanding balance of Future Receivables which have arisen
and which have automatically been assigned in equity to the
Receivables Trustee since the previous Daily Activity Report and
which are Ineligible Receivables
Provided, however, that the Transferor and, upon its accession hereunder
each Additional Transferor agrees to deliver such Daily Activity Report
to the Receivables Trustee within three Business Days (or such other
period as may otherwise be agreed) after the Receivables Trustee may at
any time request.
6. PERFECTION AND DIRECTIONS AS TO PAYMENT
6.1 The Transferor hereby irrevocably directs the Receivables Trustee to make
each payment due to it pursuant to Clause 3.5 in respect of Existing
Receivables by payment into the [*] Proceeds Account, such payment when
so made to constitute payment by the Receivables Trustee to the
Transferor by way of acceptance of the Offer in respect of which the
payment is made pursuant to Clause 3.5.
6.2 The Transferor hereby directs the Receivables Trustee to make each
payment due to it pursuant to Clause 5.1 in respect of Future Receivables
by payment into the [*] Proceeds Account, such payment when so made to
constitute compliance by the Receivables Trustee with Clause 5.1 in
respect of the Future Receivables in respect of which the payment is
made.
6.3 The Receivables Trustee shall be irrevocably directed by terms of each
Accession Notice to make each payment due to the relevant Additional
Transferor pursuant to Clause 3.5 in respect of Existing Receivables by
payment into the proceeds account specified in such Accession Notice,
such payment when made to constitute payment by the Receivables Trustee
to such Additional Transferor by way of acceptance of the Offer in
respect of which the payment is made pursuant to Clause 3.5.
6.4 The Receivables Trustees shall be irrevocably directed by the terms of
each Accession Notice to make each payment due to the relevant Additional
Transferor pursuant to Clause 5.1 in respect of Future Receivables by
payment into the proceeds accounts specified in such Accession Notice,
such payment when so made to constitute compliance by the Receivables
Trustee which Clause 5.1 in respect of the Future Receivables in respect
of which the payment is made.
6.5 Subject to Clause 6.7, the Transferor and each Additional Transferor will
take all such steps and comply with all such formalities as the
Receivables Trustee may require to perfect or more fully to evidence or
secure title to the Receivables (and the benefit of any guarantee or
insurance policy in respect of the obligations of an Obligor to make
payments in respect thereof) assigned (or purported to be assigned)
pursuant to Clause 4 and the interest of the Receivables Trustee therein.
6.6 Subject to Clause 6.7, to secure the proprietary interest of the
Receivables Trustee relating to the Receivables (and the benefit of any
guarantee or insurance policy in respect of the obligations of an Obligor
to make
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payments in respect thereof) assigned (or purported to be assigned) to it
by the Transferor or, as the case may be, an Additional Transferor and
the performance of the Transferor's or, as the case may be, such
Additional Transferor's obligations in respect thereof, the Transferor
and, upon its accession hereunder, each Additional Transfer hereby
irrevocably appoints the Receivables Trustee as its attorney (with full
power of delegation) for the purpose of performing and complying with all
and any of the obligations of the Transferor or, as the case may be, such
Additional Transferor pursuant to Clause 6.3 hereunder whether in its own
name or in the name of the Receivables Trustee and in such manner as the
Receivables Trustee may consider appropriate, and the Transferor and,
upon its accession hereunder, each Additional Transferor hereby ratifies,
confirms and adopts and agrees to ratify, confirm and adopt whatsoever
the Receivables Trustee shall do or purport to do on its behalf by virtue
of and in accordance with this power of attorney, except in the case of
bad faith, fraud or gross negligence on the part of the Receivables
Trustee in so acting.
6.7 The Receivables Trustee (in its capacity as donee of the power of
attorney in Clause 6.4 or otherwise) hereby agrees that at any time:
6.7.1 no Notice of Assignment shall be given by it (or required by it to
be given) to any Obligor or any provider of any guarantee or
insurance policy in respect of the obligations of such Obligor;
and
6.7.2 no written assignment or transfer (whether by deed or otherwise)
of any Receivables (or any guarantee or insurance policy in
respect of the obligations of an Obligor to make payments in
respect thereof) assigned (or purported to be assigned) shall be
required,
unless at such time a Notification Event has occurred and is then
subsisting and such action is required in the opinion of the Receivables
Trustee (after consulting with such legal advisers as it deems necessary)
to effect the obligations of the Transferor or, as the case may be, an
Additional Transferor under Clause 6.3.
6.8 The Receivables Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Receivables Trust
other than as contemplated in this Agreement, the Declaration of Trust
and Trust Cash Management Agreement, any Supplement thereto and any
document related thereto.
7. REDESIGNATION AND REMOVAL OF ACCOUNTS
7.1 Each Designated Account shall continue to be a Designated Account until
such time, if any, that it becomes a Redesignated Account on the date
specified in respect of such Designated Account pursuant to Clause 7.3
(the "Redesignation Date").
7.2 Subject to Clause 7.7, the Transferor and each Additional Transferor may
at any time, and in its absolute discretion, notify the Receivables
Trustee in writing of (i) any Designated Account (which is not a
Cancelled Account, Defaulted Account or Zero Balance Account) which the
Transferor or such Additional Transferor wishes to cease to be a
Designated Account or (ii) any Specified Product Line in respect of which
the Transferor or such Additional Transferor wishes all Designated
Accounts existing under that Specified Product Line to cease to be
Designated Accounts, in each case with effect from such following date as
the Transferor or such Additional Transferor shall specify in that notice
(a "Redesignation Notice").
7.3 The Redesignation Date of a Designated Account shall be ascertained as
follows:
7.3.1 in the case of a Cancelled Account, the Redesignation Date shall
be the day on which the relevant Designated Account is recorded by
the Servicer as a Cancelled Account on the Servicer's computer
master file of Accounts;
7.3.2 in the case of a Zero Balance Account, the Redesignation Date
shall be the day on which the relevant Designated Account is
recorded by the Servicer as being a Zero Balance Account and
removed from the Servicer's computer master file of Accounts;
7.3.3 in the case of a Defaulted Account, the Redesignation Date shall
be the day on which the Receivables thereunder are recorded as
charged-off as uncollectible on the Servicer's computer master
file of Accounts. Notwithstanding any other provision hereof, any
Receivables in a Defaulted Account that are Ineligible Receivables
prior to such date shall be treated as Ineligible Receivables
rather than as Receivables in Defaulted Accounts; and
7.3.4 in the case of a Designated Account which is not a Cancelled
Account, Defaulted Account or Zero Balance Account, the
Redesignation Date shall be the day specified in the Redesignation
Notice.
7.4 On, and with effect from, the Redesignation Date in respect of a
Designated Account the following shall occur:
7.4.1 such Account shall cease to be a Designated Account and thereafter
shall be a Redesignated Account;
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7.4.2 all Receivables which were in existence prior to the Redesignation
Date shall, to the extent the Receivables Trustee has not paid for
such Receivables, be paid for by the Receivables Trustee in
accordance with this Agreement;
7.4.3 all Future Receivables generated on such Redesignated Account
which are Principal Receivables or Finance Charge Receivables in
respect of Receivables which were not in existence prior to such
Redesignation Date which come into existence on or after the
Redesignation Date shall not be assigned by the Transferor or, as
the case may be, such Additional Transferor to the Receivables
Trustee; and
7.4.4 all Future Receivables which are Finance Charge Receivables in
respect of Receivables which were in existence prior to such
Redesignation Date which come into existence on or following such
Redesignation Date shall continue to be automatically assigned by
the Transferor or, as the case may be, such Additional Transferor
to the Receivables Trustee and constitute Trust Property;
Provided, however, that, for the avoidance of doubt, no Receivable
assigned to the Receivables Trustee shall be reassigned to the Transferor
or any Additional Transferor except in the circumstances set out in
Clause 11.3.
7.5 The Transferor and each Additional Transferor shall maintain a system
which identifies each Redesignated Account in the Pool Index File until
the earlier of:
7.5.1 such time as Collections (equal to the Outstanding Face Amount of
each Principal Receivable and the outstanding balance of each
Finance Charge Receivable) have been received by the Receivables
Trustee in respect of every Receivable which has been assigned to
the Receivables Trustee in respect of that Account other than
Receivables which have been charged-off as uncollectible in
accordance with the Card Guidelines on the computer master file of
Accounts used by the Servicer; or
7.5.2 such time as all Receivables outstanding on such Account which
constitute Trust Property are re-assigned to the Transferor or, as
the case maybe, such Additional Transferor in the circumstances
set out in Clause 11.3.
7.6 At such time as the Transferor or an Additional Transferor ceases to be
obliged to identify each Redesignated Account as such in the Pool Index
File (in accordance with Clause 7.5) the Transferor and such Additional
Transferor may at any time thereafter, and in its absolute discretion,
notify the Receivables Trustee that it wishes to cease to identify such
Accounts as being Redesignated Accounts, with effect from such date as
the Transferor or, as the case may be, such Additional Transferor shall
specify in that notice (the "Removal Date"), and such Accounts shall then
be identified in the Pool Index File, in accordance with a system
maintained by the Transferor or, as the case may be, such Additional
Transferor for that purpose, as constituting "Removed Accounts".
Provided, however, that in respect of a Zero Balance Account, the
Transferor or, as the case may be, such Additional Transferor, shall
remove or have removed such designation on the Redesignation Date (which,
consequently, shall also be the Removal Date for such Account) and such
Zero Balance Account shall also constitute a Removed Account.
7.7 Neither the Transferor nor any Additional Transferor shall be permitted
to redesignate Designated Accounts pursuant to Clause 7.2 which are not
Cancelled Accounts, Defaulted Accounts or Zero Balance Accounts unless
the following conditions are satisfied:
7.7.1 such redesignation shall not, in the reasonable belief of the
Transferor or such Additional Transfer, cause a Pay Out Event to
occur;
7.7.2 the Transferor or, as the case may be, such Additional Transferor
shall represent and warrant to the Receivables Trustee that no
selection procedures believed by the Transferor or such Additional
Transferor to have a Material Adverse Effect were utilised in
selecting the Designated Accounts to be redesignated;
7.7.3 on or before the tenth Business Day prior to the Redesignation
Date, each Rating Agency and the Receivables Trustee shall have
received notice in writing from the Transferor or, as the case may
be, such Additional Transferor of such proposed redesignation and
the Transferor or such Additional Transferor and the Receivables
Trustee shall have received notice prior to the Redesignation Date
from each Rating Agency that such proposed redesignation will not
result in a downgrade or withdrawal of its then current rating of
any outstanding Related Debt;
7.7.4 the Transferor or, as the case may be, such Additional Transferor
and the Servicer shall certify to the Receivables Trustee that
Collections (equal to the Outstanding Face Amount of each
Principal Receivable and the outstanding balance of each Finance
Charge Receivable) have been received by the Receivables Trustee
in respect of every Receivable which has been assigned to the
Receivables Trustee in respect of that Account other than
Receivables which have been charged-off as
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uncollectible in accordance with the Card Guidelines on the
computer master file of Accounts used by the Servicer; and
7.7.5 the Transferor or, as the case may be, such Additional Transferor
shall have delivered to the Receivables Trustee an officer's
certificate confirming the items set out in Clauses 7.7.1 to 7.7.4
above.
Provided, however, that the Receivables Trustee may conclusively rely on
the officer's certificate referred to in Clause 7.7.5 above without
making enquiries with regard to the matters set out therein.
8. DISCOUNT PERCENTAGE, SPECIAL FEES, ANNUAL FEES AND ACQUIRED INTERCHANGE
8.1 The Transferor or any Additional Transferor may, at any time by giving
not less than 30 days' prior notice in writing to the Servicer, the
Receivables Trustee and the Rating Agencies, nominate a Discount
Percentage to apply to Principal Receivables from the date specified in
such notice for such period (or additional period) of time as the
Transferor or such Additional Transferor shall specify.
8.2 If the Transferor or any Additional Transferor notifies the Receivables
Trustee of the application of a Discount Percentage in accordance with
Clause 8.1 then, during the period of time specified by the Transferor or
such Additional Transferor under Clause 8.1, the relevant amount of any
Purchase Price to be paid pursuant to Clause 3.5 shall accordingly be
reduced by a percentage equal to the Discount Percentage, and the
obligation of the Receivables Trustee to make the payments referred to in
Clause 5.1 shall be likewise reduced.
8.3 No nomination by the Transferor or any Additional Transferor pursuant to
Clause 8.1 of a Discount Percentage or the period (or additional period)
of time for which it is to be effective shall be of any effect unless:
8.3.1 each Rating Agency has confirmed in writing that such proposed
nomination or increase in length of the relevant period will not
result in a downgrade or withdrawal of its then current rating of
any outstanding Related Debt;
8.3.2 the Transferor or such Additional Transferor has provided the
Receivables Trustee with a certificate in the form set out in the
Seventh Schedule, signed by an authorised officer of the
Transferor or such Additional Transferor confirming that:
(a) the performance of the portfolio of Designated Accounts is
such that in the reasonable opinion of the Transferor or
such Additional Transferor the yield of Finance Charge
Collections is not generating adequate cashflows for the
Beneficiaries of the Receivables Trust and the size of the
Discount Percentage is not intended solely to accelerate
distributions to the Excess Interest Beneficiary; and
(b) the Transferor or such Additional Transferor is able to pay
its debts within the meaning of section 123 of the
Insolvency Act 1986 and will not become unable to pay its
debts within the meaning of that section in consequence of
such Discount Percentage coming into effect, as at the date
on which the Discount Percentage or additional period is to
take effect.
8.4 From time to time, the Transferor and each Additional Transferor may levy
a Special Fee on Accounts (including Designated Accounts) whether at one
time or on an ongoing basis, and may in respect of such Special Fees on
or after the date on which they are first levied on Designated Accounts,
designate in a certificate to the Receivables Trustee whether such
Special Fees shall be treated as Finance Charge Receivables or as
Principal Receivables, Provided, however, that in the absence of such
certificate, such Special Fees shall be treated as Finance Charge
Receivables, Provided further, however, that the Transferor or such
Additional Transferor may not designate Special Fees as Principal
Receivables unless it certifies in such certificate that it has received
an Opinion of Counsel that such Special Fees constitute, for the purpose
of tax in the United Kingdom, repayment in whole or in part of an advance
to an Obligor.
8.5 The Transferor and each Additional Transferor may, at any time by giving
notice in writing to the Servicer, the Receivables Trustee and the Rating
Agencies, designate in a certificate to the Receivables Trustee whether
Future Receivables arising after that time and Existing Receivables
comprised in offers accepted by the Receivables Trustee after that time
in respect of (in each case) Annual Fees shall be treated as Finance
Charge Receivables or as Principal Receivables Provided, however, in the
absence of such certificate, such Receivables in respect of Annual Fees
shall be treated as Finance Charge Receivables; Provided further,
however, that any designation of Annual Fees as Principal Receivables
shall not be of any effect unless the Transferor or, as the case may be,
such Additional Beneficiary certifies in such certificate that it has
received an Opinion of Counsel that such Annual Fees constitute, for the
purpose of tax in the United Kingdom, repayment in whole or in part of an
advance to an Obligor.
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8.6 On or before each Transfer Date, the Transferor and each Additional
Transferor shall notify the Receivables Trustee of the amount of Acquired
Interchange with respect to the preceding Monthly Period.
8.7 On each Transfer Date, the Transferor and each Additional Transferor
shall cause to be paid to the Receivables Trustee by depositing into the
Trustee Collection Account, in immediately available funds, an amount
equal to the amount of Acquired Interchange.
9. TRUST
9.1 If for any reason any Receivable arising on a Designated Account cannot
be duly assigned to the Receivables Trustee as contemplated hereby but
the Receivables Trustee has accepted the Offer relating to that
Receivable then, with effect from the date on which the Receivables
Trustee accepted such Offer, that Receivable shall be treated as if it
had been validly and duly assigned to the Receivables Trustee and the
Transferor or, as the case may be, the Additional Transferor shall hold
the same and all Collections related thereto on trust absolutely for the
Receivables Trustee and all such Collections shall be applied as if such
Receivable had been validly and duly assigned.
9.2 The provisions of Clause 9.1 shall be without prejudice to:
9.2.1 any obligations or representations of the Transferor or, as the
case may be, such Additional Transferor hereunder in respect of
any Receivables; and
9.2.2 any liabilities of the Transferor or such Additional Transferor or
rights of the Receivables Trustee in relation to any breach or
inaccuracy on the part of the Transferor or, as the case may be,
such Additional Transferor of the matters referred to in Clause
9.2.1.
9.3 All Collections in respect of any Receivables constituting Trust Property
received by Barclays Bank PLC (whether or not the appointment of Barclays
Bank PLC as Servicer under the Beneficiaries Servicing Agreement has been
terminated) shall, pending their application to the Trustee Collection
Account, be held on trust for and to the order of the Receivables
Trustee.
10. REDUCTIONS IN RECEIVABLES, EARLY COLLECTIONS AND CREDIT ADJUSTMENTS
10.1 If the amount paid or payable in respect of any Principal Receivable
which has been assigned by the Transferor or any Additional Transferor to
the Receivables Trustee is reduced (other than in respect of a Transferor
Section 75 Liability, Additional Transferor Section 75 Liability or a
Credit Adjustment) after the Offer Date relating thereto by reason of:
10.1.1 any set-off or counterclaim as between an Obligor and
the Transferor or any Additional Transferor; or
10.1.2 any other matter as between an Obligor and the Transferor or
any Additional Transferor,
(each of 10.1.1 and 10.1.2 above a "Reduction")
and the Transferor or such Additional Transferor has received a benefit
in money or money's worth as a consequence of such Reduction (including,
without limitation, any reduction in any liability owing by the
Transferor or such Additional Transferor to such Obligor) then the
Transferor or such Additional Transferor shall nevertheless for the
purposes of this Agreement be treated as having been paid the amount of
such reduction on the date of such reduction in addition to any other
amounts which may be paid or payable in respect of such Receivable.
10.2 If any Existing Receivable which is purported to be assigned pursuant to
any Offer made pursuant to the terms of this Agreement shall have been
collected in whole or in part prior to the time of such purported
assignment, then the portion thereof which shall have been so collected
(an "Early Collection") shall be treated for the purposes of this
Agreement as having been collected by the Transferor or, as the case may
be, the relevant Additional Transferor immediately following such
purported assignment thereof.
10.3 If any Principal Receivable which has been assigned by the Transferor or
any Additional Transferor to the Receivables Trustee is reduced after the
Offer Date relating thereto by reason of a Credit Adjustment then the
Transferor or such Additional Transferor shall nevertheless for the
purposes of this Agreement be treated as having been paid the amount of
such Credit Adjustment on the date of such Credit Adjustment in addition
to any other amounts which may be paid or payable in respect of such
Receivable.
10.4 Subject to Clause 13.3, the Transferor or, as the case may be, such
Additional Transferor shall be obliged to pay to the credit of the
Trustee Collection Account an amount equal to the amount of each
Reduction (as referred to in Clause 10.1), Early Collection (as referred
to in Clause 10.2) or Credit Adjustment (as referred to in Clause 10.3)
by no later than the second Business Day following the date on which it
became aware of
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such Reduction, Early Collection or Credit Adjustment (as the case may
be) or was notified thereof by the Servicer.
11. BREACH OF WARRANTY
11.1 If, in respect of any Principal Receivable which has been assigned to the
Receivables Trustee, any representation referred to in Clause 17.2 or
17.3 proves at any time to have been incorrect when made, the Transferor
or, as the case may be, the relevant Additional Transferor shall be
treated as having received by way of a Collection the Outstanding Face
Amount of such Principal Receivable and, subject to Clause 13.3, the
Transferor or, as the case may be, the relevant Additional Transferor
shall be obliged to pay by no later than the Business Day following the
date on which such representation becomes known to the Transferor or, as
the case may be, the relevant Additional Transferor to be incorrect, an
amount equal to the Outstanding Face Amount of such Principal Receivable
to the Trustee Collection Account under advice to that effect to the
Receivables Trustee, Provided, however, that such Receivable shall not be
re-assigned to the Transferor or such Additional Transferor but shall
thereafter be treated as an Ineligible Receivable unless and until all
Receivables outstanding on the relevant Account are re-assigned to the
Transferor or such Additional Transferor in the circumstances set out in
Clause 11.3.
11.2 The fulfilment of the Transferor's or, as the case may be, the relevant
Additional Transferor's obligation to make payments to the Receivables
Trustee required pursuant to Clause 11.1 in respect of a Principal
Receivable or (as the case may be) all the Principal Receivables of an
Obligor shall be in full satisfaction and discharge of any rights or
remedies which the Receivables Trustee may otherwise have had with
respect to such Principal Receivable as a result of any breach,
anticipatory breach or other circumstance on the part of or affecting the
Transferor or the Additional Transferor arising under this Agreement in
relation to such Receivable or (as the case may be) the Obligor
concerned, and accordingly, the Receivables Trustee hereby acknowledges
that it will have no further or other rights with respect to such
Principal Receivable as a result of or in connection with any such
breach, anticipatory breach or other circumstance.
11.3 In the event that:
11.3.1 each and every Principal Receivable which has been assigned to
the Receivables Trustee in respect of an Account and which
remains outstanding proves to have been assigned to the
Receivables Trustee in circumstances where any representation
referred to in Clause 17.2 and 17.3 proves at any time to have
been incorrect when made with respect to such Principal
Receivables;
11.3.2 the Transferor or any Additional Transferor has re-designated
such Account as a Redesignated Account pursuant to Clause 7.2; and
11.3.3 the obligation of the Transferor or such Additional Transfer with
respect to such Principal Receivables as set out in Clause 11.1
has been fulfilled
then the Transferor or, as the case may be, such Additional Transferor
may by five Business Days written notice require the Receivables Trustee
(at the expense of the Transferor or, as the case may be, such Additional
Transferor) to offer to reassign all (but not some only) of the
Receivables outstanding on such Redesignated Account which constitute
Trust Property to the Transferor or, as the case may be, such Additional
Transfer for a nominal consideration not to exceed L1 pursuant to an
instrument to be executed and maintained, if so requested by the
Transferor or such Additional Transferor, outside of the United Kingdom.
Following such re-assignment such Receivables shall be owned by the
Transferor or, as the case may be, such Additional Transferor absolutely
and such Account shall constitute and be identified as a Removed Account
from the date of such re-assignment (which shall also constitute the
relevant Removal Date).
12. CURRENCY OF ACCOUNT AND PAYMENT
12.1 Sterling is the currency of account and payment for each and every sum at
any time due from any person hereunder Provided, however, that:
12.1.1 each payment in respect of costs and expenses shall be made in the
currency in which the same were incurred; and
12.1.2 each payment which is expressed herein to be payable in another
currency shall be made in that other currency.
12.2 If any sum due from a person (a "relevant person") under this Agreement
or any order or judgment given or made in relation hereto has to be
converted from the currency (the "first currency") in which the same is
payable hereunder or under such order or judgment into another currency
(the "second currency") for the purpose of (i) making or filing a claim
or proof against the relevant person, (ii) obtaining an order or judgment
in any court or other tribunal or (iii) enforcing any order or judgment
given or made in relation
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hereto, the relevant person shall indemnify and hold harmless the person
to whom such sum is due from and against any loss suffered as a result of
any discrepancy between (a) the rate of exchange used for such purpose to
convert the sum in question from the first currency into the second
currency and (b) the rate or rates of exchange at which such person may
in the ordinary course of business purchase the first currency with the
second currency upon receipt of a sum paid to it in satisfaction, in
whole or in part, of any such order, judgment, claim or proof.
12.3 All payments made by any person hereunder shall be made free and clear of
and without any deduction for or on account of any set-off or
counterclaim unless otherwise agreed in writing by the Transferor and the
Receivables Trustee or, as the case may be, such Additional Transferor
and the Receivables Trustee.
13. PAYMENTS BY THE TRANSFEROR, ADDITIONAL TRANSFERORS AND THE RECEIVABLES
TRUSTEE
13.1 On each date upon which this Agreement requires an amount to be paid in
cash by or on behalf of the Transferor or any Additional Transferor to
the Receivables Trustee, the Transferor or, as the case may be, such
Additional Transferor shall, save as expressly provided otherwise herein,
make the same available to the Receivables Trustee:
13.1.1 where such amount is denominated in Sterling by payment in
Sterling and in same day funds (or in such other funds as may for
the time being be customary in London for the settlement of
international banking transactions in Sterling) to such account
and bank in London as the Receivables Trustee shall have specified
in writing for this purpose at least two Business Days prior to
such amount becoming payable; or
13.1.2 where such amount is denominated in a currency other than
Sterling, by payment in such currency and in immediately
available, freely transferable, cleared funds to such account with
such bank in the principal financial centre of the country of such
currency as the Receivables Trustee shall have specified in
writing for this purpose at least five Business Days prior to such
amount becoming payable.
13.2 On each date upon which this Agreement requires an amount to be paid in
cash to the Transferor or any Additional Transferor hereunder by or on
behalf of the Receivables Trustee, the Receivables Trustee shall, save as
otherwise provided herein, make the same available to the Transferor or
such Additional Transferor:
13.2.1 where such amount is denominated in Sterling, by payment in
Sterling and in same day funds (or in such other funds as may for
the time being be customary in London for the settlement of
international banking transactions in Sterling) to the Transferor
or such Additional Transferor at such account and bank as the
Transferor or such Additional Transferor shall have specified in
writing for this purpose at least two Business Days prior to such
amount becoming payable; or
13.2.2 where such amount is denominated in a currency other than
Sterling, by payment in such currency and in immediately
available, freely transferable, cleared funds to such account with
such bank in the principal financial centre of the country of such
currency as the Transferor or such Additional Transferor shall
have specified in writing for this purpose at least five Business
Days prior to such amount becoming payable.
13.3 Notwithstanding any other provision of this Agreement the Transferor,
each Additional Transferor and the Receivables Trustee hereby agree and
acknowledge that:
13.3.1 the amount payable by the Receivables Trustee to the Transferor or
such Additional Transferor in cash pursuant to Clause 3.5 (in
respect of the payment for Existing Receivables) and Clause 5.1
(in respect of the payment for Future Receivables) shall be set-
off against the amount of any shortfall in the amount to be funded
by the Transferor or such Additional Transferor as a beneficiary
of the Receivables Trust in the circumstances contemplated by
Clause [5.02(f)(iii)] of the Declaration of Trust and Trust Cash
Management Agreement Provided, however, that the Transferor
Interest or, as the case may be, the Additional Transferor
Interest, in the Receivables Trust is increased accordingly; and
13.3.2 the obligation of the Transferor to the Receivables Trustee to pay
an amount in cash pursuant to Clause 10.4 (in respect of
reductions in Receivables) and Clause 11.1 (in respect of breach
of warranty) may be fulfilled (in whole or in part) by a reduction
in the amount of the Transferor Interest in the Receivables Trust
in the circumstances contemplated by Clauses [5.3(a)(ii) and
5.3(d)] of the Declaration of Trust and Cash Management Agreement
Provided, however, that such decrease shall not cause the
Transferor Interest or, as the case may be, Additional Transferor
Interest to be decreased to an amount of less than zero.
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14. THE COLLECTION AGENT AND THE COLLECTION AGENT ACCOUNTS
14.1 The Collection Agent has been appointed by the Transferor and, upon its
accession hereunder, each Additional Transferor as its agent to collect
and process Collections received from Obligors in respect of the
Accounts.
14.2 The Transferor has opened a bank account in the name of the Transferor at
the Collection Agent Bank for the purpose of receiving such Collections
(the "Transferor Collection Agent Account"). The Transferor hereby
confirms all such Collections representing cleared funds will be
transferred to the [*] Operating Account on the Business Day such
Collections become cleared funds.
14.3 On or prior to its accession hereunder, each Additional Transferor shall
have opened a bank account in the name of such Additional Transferor at
the Collection Agent Bank for the purpose of receiving such Collections
(such account an "Additional Transferor Collection Account"). Upon its
accession hereunder, each Additional Transferor confirms all such
Collections representing cleared funds will be transferred to the [*]
Additional Transferor Operating Account on the Business Day such
Collections become cleared funds.
14.4 Pending application of monies from the Transferor Collection Agent
Account or, as the case may be, the Additional Transferor Collection
Agent Account to the [*] Operating Account pursuant to Clause 14.2 or
Clause 14.3, the sums from time to time standing to the credit of the
Collection Agent Account and the Additional Transfer Collection Agent
Account shall be held respectively by the Transferor and the relevant
Additional Transferor on trust for and to the order of (1) the
Receivables Trustee to the extent such Collections are Principal
Collections, Finance Charge Collections or Ineligible Collections and (2)
the Transferor or, as the case may be, the Additional Transferor,
otherwise, and the Transferor hereby and each Additional Transferor upon
its accession further confirms that the bank at which the Transferor
Collection Agent Account or, as the case may be, the Additional
Transferor Collection Agent Account is maintained has been notified in
writing that such account is a trust account held on the above basis.
15. [*] OPERATING ACCOUNT AND [*] PROCEEDS ACCOUNT
15.1 The Transferor has opened an account in its name for the purpose of
receiving, inter alia, Collections (the "[*] Transferor Operating
Account"). On or prior to its accession hereunder, each Additional
Transferor shall have opened an account in its name for the purpose of
receiving, inter alia, Collections (the "[*] Additional Transferor
Collection Account").
15.2 Pending application of monies from the [*] Transferor Operating Account
and the [*] Additional Transfer Collection Account to the Trustee
Collection Account either hereunder or in accordance with the Declaration
of Trust and Trust Cash Management Agreement, the sums from time to time
standing to the credit of the [*] Transferor Operating Account and the
[*] Additional Transferor Collection Account shall be held respectively
by the Transferor and the relevant Additional Transferor on trust for and
to the order of (1) the Receivables Trustee, to the extent such
Collections are Principal Collections, Finance Charge Collections or
Ineligible Collections and (2) the Transferor or, as the case may be, the
Additional Transferor, otherwise, and the Transferor and each Additional
Transferor upon its accession hereby confirms that the bank at which the
[*] Operating Account and the [*] Additional Transferor Collection
Account is maintained has been notified in writing that such account is a
trust account held on the above basis.
15.3 The Transferor has opened a bank account in its name for the purpose of
receiving cash payments due to the Transferor in respect of the Purchase
Price of Receivables (the "[*] Proceeds Account"). On or prior to its
accession hereunder, each Additional Transferor shall have opened an
account in its name for the purpose of receiving cash payments due to
such Additional Transferor in respect of the Purchase Price of the
Receivables (the "[*] Additional Transferor Proceeds Account").
16. THE TRUSTEE COLLECTION ACCOUNT
The Receivables Trustee has opened an account at a Qualified Institution
in the name of the Receivables Trustee (the "Trustee Collection
Account").
17. REPRESENTATIONS
17.1 The Transferor represents as of the date hereof and each Additional
Transferor represents as of the date of its accession hereunder that each
of the statements set out in Parts 1 and 2 of the Fifth Schedule is true
and the Transferor and such Additional Transferor shall be deemed to
repeat such representations by reference to the facts and circumstances
then existing on each Closing Date specified in respect of any
Supplement.
17.2 Each Offer shall constitute a representation by the Transferor or, as the
case may be, the relevant Additional Transferor, that, in relation to
that Offer, each of the statements set out in Part 3 of the Fifth
Schedule is true with regard to the Existing Receivables identified in
such Offer which are Principal Receivables other than such Existing
Receivables which are specified in that Offer as being Ineligible
Receivables.
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17.3 The Transferor or, as the case may be the relevant Additional Transferor
shall be deemed to represent in respect of each Future Receivable which
is a Principal Receivable on the Date of Processing relating thereto that
each of the statements set out in Part 3 of the Fifth Schedule is true
with regard to such Receivable unless such Receivable is specified by the
Transferor or, as the case may be, the relevant Additional Transferor as
being an Ineligible Receivable pursuant to Clause 5.1.
18. COVENANTS
18.1 The Transferor and each Additional Transferor shall:
18.1.1 pay to the Receivables Trustee by payment to the Trustee
Collection Account all payments received by the Transferor or, as
the case may be, such Additional Transferor in respect of
Receivables as soon as practicable after receipt thereof by the
Transferor;
18.1.2 notify the Receivables Trustee of the existence of any Encumbrance
on any Receivable and defend, at its own expense, the right, title
and interest of the Receivables Trustee in, to and under the
Receivables, whether now existing or created, against all claims
of third parties claiming through or under the Transferor or, as
the case may be, such Additional Transferor; and
18.1.3 comply with and perform its obligations under the Card Agreement
relating to the Accounts and the Card Guidelines and all
applicable rules and regulations of MasterCard International Inc.
and its subsidiaries, if any, and VISA International, Inc. and its
subsidiaries, if any, except insofar as any failure to comply or
perform would not cause a Material Adverse Effect.
18.2 Neither the Transferor nor any Additional Transferor shall :
18.2.1 sell, assign, convey, transfer, lease, pledge or otherwise dispose
(or purport to do so) of any Receivable (whether now existing or
hereafter created) under a Designated Account to any person other
than the Receivables Trustee; or
18.2.2 grant, create, incur, assume or suffer to exist any Encumbrance or
purport to do so over any Receivable (whether now existing or
hereafter created) under a Designated Account or any interest
therein; or
18.2.3 consolidate with or merge into any other corporation or convey or
transfer its properties and assets substantially as an entirety to
any Person unless :
(a) the corporation formed by such consolidation or into which
the Transferor or such Additional Transferor is merged or
the Person which acquires by conveyance or transfer the
properties and assets of the Transferor or such Additional
Transferor substantially as an entirety, shall expressly
assume, by an agreement supplemental hereto, executed and
delivered to the Receivables Trustee in form satisfactory
to the Receivables Trustee, the performance of the
obligations of the Transferor or such Additional Transferor
hereunder (to the extent that any right, covenant or
obligation of the Transferor or such Additional Transferor,
as applicable hereunder, is inapplicable to the successor
entity, such successor entity shall be subject to such
covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor
entity) and the Transferor or such Additional Transferor
shall also execute such documents as are necessary for such
person to become a Transferor Beneficiary and an Excess
Interest Beneficiary as contemplated in the Declaration of
Trust and Trust Cash Management Agreement;
(b) the Transferor or such Additional Transferor shall have
delivered to the Receivables Trustee an Officer's
Certificate of the Transferor or such Additional Transferor
stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this
Clause 18.2.3 and that all conditions precedent herein
provided for relating to such transaction have been
complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid, binding and
enforceable; and
(c) the Transferor or such Additional Transferor shall have
delivered notice to each Rating Agency of such
consolidation, merger, conveyance or transfer; or
18.2.4 disclose the name or address of any Obligor to any Person seeking
to enforce a claim against the Transferor or such Additional
Transferor or otherwise in breach of its obligations of
confidentiality to any Obligor, except pursuant to any Requirement
of Law.
18.3 Subject to Clause 18.4, each of the Transferor and any Additional
Transferor may from time to time amend the terms and conditions of the
Card Agreements (other than the terms and conditions which relate to the
matters referred to in paragraph (iv) of the First Schedule) or the Card
Guidelines in any respect (including, without limitation, reducing or
increasing the amount of any required minimum monthly payment or
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amending the calculation of the amount or the timing of charge-offs and
the Periodic Finance Charges and other fees assessed thereon), Provided,
however, that no such amendment may be made unless:
18.3.1 in the reasonable belief of the Transferor or such Additional
Transferor, such amendment would not cause a Pay Out Event; and
18.3.2 such amendment is also applied to any comparable segment of
Accounts which are owned and serviced by the Transferor or such
Additional Transferor which have characteristics equivalent or
substantially similar to, the Designated Accounts (except as
otherwise restricted by an endorsement, sponsorship or other
agreement between the Transferor or such Additional Transferor and
an unrelated third party or by the terms of the relevant Card
Agreements).
18.4 The Transferor and each Additional Transferor upon its accession hereby
agrees that, except as otherwise required by any Requirement of Law or as
may be determined by the Transferor or such Additional Transferor to be
necessary in order to maintain its credit card and related card business
(such determination being based on a good-faith assessment by the
Transferor or such Additional Transferor, in its sole discretion, of the
nature of competition in the credit card business in the United Kingdom
as a whole, or, as the case may be, in respect of Accounts relating to an
Additional Jurisdiction, of the nature of competition in the credit card
business in such Additional Jurisdiction as a whole), it shall not at any
time reduce the Periodic Finance Charges assessed on Receivables existing
or arising under any Designated Account or other fees on any Designated
Account if, as a result of such reduction, the Transferor's or such
Additional Transferor's reasonable expectation of the Portfolio Yield (as
defined in each Series Supplement) as of such date would be less than the
then Expense Rate (as defined in each Series Supplement).
19. STAMP DUTY
Each and every Offer made pursuant to this Agreement shall be executed
and retained outside the United Kingdom and, if any such document is
introduced into the United Kingdom by any party hereto or any person
acting under the direction of or with the agreement of such a party, the
Receivables Trustee shall promptly arrange for the document so brought
into the United Kingdom to be stamped at the expense of the Receivables
Trustee Provided, however, that it is acknowledged that the obligations
of the Receivables Trustee to pay stamp duty shall be limited to the
extent that Trust Property is calculated as available for such purpose
pursuant to the Receivables Trust and not otherwise.
20. NON-PETITION
The Transferor and each Additional Transferor upon its accession
covenants with the Receivables Trustee that it shall not take any
corporate action or other steps or legal proceedings for the winding-up,
dissolution or re-organisation or for the appointment of a receiver,
administrator, administrative receiver, trustee, liquidator, sequestrator
or similar officer of the Receivables Trustee (either in its own capacity
or as trustee of the Receivables Trust or otherwise) or any Investor
Beneficiary or of any or all of the revenues and assets of any of them.
21. BENEFIT OF AGREEMENT
21.1 This Agreement shall be binding upon and enure to the benefit of each
party hereto and its successors and permitted assigns.
21.2 Except in the circumstances contemplated by the provisions of Clause
18.2.3 neither the Transferor nor any Additional Transferor in its
capacity as such shall not be entitled to assign or transfer all or any
of its rights, benefits and obligations hereunder. The Receivables
Trustee agrees that it shall, at the expense of the Transferor or, as the
case may be, such Additional Transferor, execute such documents as the
Transferor or, as the case may be, such Additional Transferor may
reasonably require to effect the matters permitted pursuant to Clause
18.2.3.
21.3 The Receivables Trustee shall not be entitled to assign or transfer all
or any of its rights, benefits and obligations hereunder except to the
extent permitted and in the manner provided by the Declaration of Trust
and Trust Cash Management Agreement.
22. DISCLOSURE OF INFORMATION
22.1 The Receivables Trustee hereby agrees not to disclose to any person any
Account Information except and only to the extent permitted by applicable
law:
22.1.1 if required in connection with the performance of its duties
hereunder or under the Declaration of Trust and Trust Cash
Management Agreement and any Supplement thereto;
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22.1.2 in enforcing the rights of any Beneficiary of the Receivables
Trust or to a Successor Servicer appointed pursuant to Clause 4.3
of the Beneficiaries Servicing Agreement;
22.1.3 with the consent of the Transferor and each Additional Transferor,
in connection with any security interest any Investor Beneficiary
has created or is proposing to create over its beneficial interest
in the Receivables Trust in connection with an issue of Related
Debt; or
22.1.4 pursuant to any Requirement of Law.
22.2 The Receivables Trustee agrees to take such measures as shall be
reasonably requested by the Transferor or any Additional Transferor, to
protect and maintain the security and confidentiality of Account
Information and, in connection therewith, shall allow the Transferor and
each Additional Transferor to inspect the Receivables Trustee's security
and confidentiality arrangements from time to time during normal business
hours and upon reasonable notice being given.
22.3 If the Receivables Trustee is required by any Requirement of Law to
disclose any Account Information, the Receivables Trustee shall provide
the Transferor and each Additional Transferor with prompt written notice,
unless such notice is prohibited by law, of any such request or
requirement. The Receivables Trustee shall make reasonable efforts to
provide the Transferor and each Additional Transferor with written notice
no later than five days prior to any such disclosure unless compliance
with this requirement would or might breach any law.
23. REMEDIES AND WAIVERS
23.1 No failure to exercise, nor any delay in exercising, on the part of any
party hereto, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
prevent any further or other exercise thereof or the exercise of any
other right or remedy.
23.2 The rights and remedies herein provided are cumulative and not exclusive
of any rights or remedies provided by law.
24. PARTIAL INVALIDITY
Without prejudice to any other provision hereof, if one or more
provisions hereof is or becomes invalid, illegal or unenforceable in any
respect in any jurisdiction or with respect to any party such invalidity,
illegality or unenforceability in such jurisdiction or with respect to
such party or parties shall not, to the fullest extent permitted by
applicable law, render invalid, illegal or unenforceable such provision
or provisions in any other jurisdiction or with respect to any other
party or parties hereto.
25. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same Agreement.
26. NOTICES
26.1 Unless otherwise stated herein, each communication or notice to be made
hereunder shall be made in writing and may be made by telex, telefax or
letter.
26.2 Any communication, notice or document to be made or delivered by any one
person to another pursuant to this Agreement shall (unless that other
person has by fifteen days' written notice to the other parties hereto
specified another address) be made or delivered to that other person at
the address identified below and shall be deemed to have been made or
delivered when despatched and confirmation of transmission received by
the sending machine (in the case of any communication made by telefax) or
(in the case of any communication made by telex) when dispatched and the
appropriate answerback or identification symbol received by the sender or
(in the case of any communication made by letter) when left at that
address or (as the case may be) ten days after being deposited in the
post postage prepaid in an envelope addressed to it at that address
Provided, however, that each telefax or telex communication made by one
party hereto to another shall be made to that other person at the telefax
or telex number notified to such party by that other person from time to
time:
(i) in the case of the Transferor to Barclaycard, 1234 Pavillion
Drive, Northampton NN4 7SG, Attention: [*], facsimile number: [*]
[with a copy to Attention: [*], facsimile number: [*]];
(ii) in the case of any Additional Transferor, to the address and fax
number set out in the Accession Notice of such Additional
Transferor; and
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(iii) in the case of the Receivables Trustee at [an address for service
in London at c/o Clifford Chance Secretaries Limited, 200
Aldersgate Street, London, EC1A 4JJ].
27. TERMINATION OF TRUST AND SERVICING AGREEMENT
Notwithstanding any other provision of this Agreement, the parties hereto
acknowledge that if following the occurrence of any Insolvency Event the
Receivables Trust is dissolved in accordance with the provisions of
Clause 6.3 of the Declaration of Trust and Trust Cash Management
Agreement, then the provisions of this Agreement shall also terminate
without further action by the parties hereto, Provided, however, that
such termination shall be without prejudice to any rights existing on or
prior to the date of such Insolvency Event (including rights relating to
the giving of notice to Obligors as set out in Clause 6 hereof).
28. LAW
This Agreement shall be governed by, and construed in accordance with,
English law.
29. JURISDICTION
29.1 Each of the parties hereto irrevocably agrees for the benefit of each
other party that the courts of England shall have exclusive jurisdiction
to hear and determine any suit, action or proceeding, and to settle any
disputes, which may arise out of or in connection with this Agreement
and, for such purposes, irrevocably submits to the exclusive jurisdiction
of such courts.
29.2 Each party hereto irrevocably waives any objection which it might now or
hereafter have to the courts referred to in Clause 29.1 being nominated
as the forum to hear and determine any suit, action or proceeding, and to
settle any disputes, which may arise out of or in connection with this
Agreement and agrees not to claim that any such court is not a convenient
or appropriate forum.
29.3 The Receivables Trustee irrevocably appoints the person specified against
its name below to accept service of any process on its behalf and further
undertakes to the other parties hereto that it will at all times during
the continuance of this Agreement maintain the appointment of some person
in England as its agent for the service of process and irrevocably agrees
that service of any writ, notice or other document for the purposes of
any suit, action or proceeding in the courts of England shall be duly
served upon it if delivered or sent by registered post to the address of
such appointee (or to such other address in England as that party may
notify to the other parties hereto).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorised representatives as a deed on
the day and year first before written.
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SCHEDULE 1
ELIGIBLE ACCOUNT CRITERIA
An Account will be an "Eligible Account" if (1) in respect of an Account which
is nominated in an Offer and which is in existence at the relevant Offer Date,
at that Offer Date; or (2) in respect of an Account which is nominated in an
Offer and which comes into existence on a subsequent Account Creation Date, at
that Account Creation Date, it is an Account:
(i) the Obligor of which is not a company or partnership for the purposes of
s.349(2) of the Income and Corporation Taxes Act 1988;
(ii) which is payable in Sterling or, in respect of an Account relating to any
Additional Jurisdiction, the lawful currency of such Additional
Jurisdiction;
(iii) [which (a) is governed by a Card Agreement without waiver or amendment in
any material respect of the following matters: governing law, assignment
and disclosure of information to persons who may assume rights under the
Card Agreement, or else, if acquired by the Transferor or an Additional
Transferor, it is governed by contractual terms not materially different
from such Card Agreement in relation to those matters listed previously
and (b) was created and complies with all applicable laws, and in
particular with the Consumer Credit Act 1974 and the Data Protection Act
1984;]
(iv) the Obligor of which has provided as its most recent billing address an
address which is located in England, Wales, Scotland or Northern Ireland
or, if applicable, in any Additional Jurisdiction;
(v) any card in respect of which the Transferor has not classified on its
electronic records as counterfeit, cancelled, fraudulent, stolen or lost;
(vi) which has been originated or purchased by the Transferor;
(vii) which has been operated, in all material respects, in accordance with the
Transferor's Card Guidelines; and
(viii) the Receivables in respect of which the Transferor or, as the case may
be, the Additional Transferor Interest has not charged-off in its
customary and usual manner for charging-off Receivables on such Accounts
as at the date on which such Account is specified a Designated Account.
Provided, however, that notwithstanding (i) to (viii) above an Account will be
an Eligible Account if the Transferor or, as the case may be, the Additional
Transferor Interest and the Receivables Trustee have been notified that such
Account (or each Account with such characteristics) has been approved by each
Rating Agency as an Eligible Account.
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SCHEDULE 2
ELIGIBLE RECEIVABLES
A Receivable will be an "Eligible Receivable" if all of the following
statements are correct in relation to such Receivables at the time when :
(a) in the case of Existing Receivables, the Receivables Trustee accepts the
relevant Offer; and
(b) in the case of Future Receivables, the Receivable in question arises:
(i) it has arisen under an Eligible Account;
(ii) it has been created in compliance with all applicable laws and all
consents, licenses, approvals, authorisations, registrations or
declarations required to be obtained, effected or given by the
Transferor, the Additional Transferor or the Servicer in
connection with the creation and assignment of Receivables have
been obtained, effected or given, and are in full force and effect
as of the date of creation;
(iii) [it (a) was originated in accordance with and is governed by a
Card Agreement without waiver or amendment in any material respect
of the following matters: governing law, assignment and disclosure
of information to persons who may assume rights under the Card
Agreement, or else, it was originated in all material respects in
accordance with and is governed by contractual terms not
materially different from such Card Agreement in relation to those
matters listed previously; (b) was created and complies with all
applicable laws and in particular with the Consumer Credit Act
1974 and the Data Protection Act 1984; and (c) was originated in
accordance with the Card Guidelines;]
(iv) it is free and clear of any Encumbrances exercisable against the
Transferor, the Additional Transferor or the Receivables Trustee
arising under or through the Transferor or the Additional
Transferor (or any of its respective Affiliates) and to which, at
the time of creation of such Receivable (or at the time of
acquisition of such Receivable by the Transferor or the Additional
Transferor if such Receivable was originated by any person other
than the Transferor or such Additional Transferor) and at all
times thereafter, the Transferor, the Additional Transferor or the
Receivables Trustee had good and marketable title; and
(v) [it constitutes legal, valid and binding obligations of the
relevant Obligor enforceable against such Obligor in accordance
with the terms of the relevant Card Agreement subject only to (a)
applicable bankruptcy, insolvency, reorganisation, moratorium or
other similar laws affecting the enforcement of the rights of
creditors generally and (b) the effect of general principles of
equity, and is not currently subject to any defence, dispute, set-
off or counterclaim or enforcement order.]
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SCHEDULE 3
FORM OF OFFER
To: The Receivables Trustee
From: Transferor/Additional Transferor
Dated: [ ]
Dear Sirs
OFFER
1. We refer to the receivables securitisation agreement (as from time to
time amended, supplemented or novated, the "RSA") dated [ ], 1999 and
made between ourselves and yourselves.
2. Terms defined in (or incorporated by reference into) the RSA shall bear
the same meaning herein.
3. We have identified in the Pool Index File the following Specified Product
Lines (the "[date -- eg: "September 1999"] Specified Product Lines"):
[List Specified Product Lines]
4. Each [date] Specified Product Line contains Eligible Accounts which are
to be Designated Accounts (the "New Designated Accounts"). We hereby
offer you an assignment on [date] of:
(i) the Existing Receivables under each New Designated Account;
(ii) all Future Receivables under each such New Designated Account
which are not Finance Charge Receivables in respect of Principal
Receivables until the earliest of:
(a) in respect of each New Designated Account, such time (if
any) as such Account becomes a Redesignated Account;
(b) the termination of the Receivables Trust; or
(c) the occurrence of an Insolvency Event;
(iii) all Future Receivables under each Account specified in connection
with such Offer which are Finance Charge Receivables in respect of
Receivables which are assigned (or purported to be assigned) to
the Receivables Trustee pursuant to paragraphs (i) and (ii) above;
(iv) (to the extent such are capable of assignment) the benefit of any
guarantee or insurance policy obtained by ourselves in respect of
the obligations of an Obligor to make payments on such New
Designated Accounts; and
(v) [in respect of the Offer made on the Initial Offer Date only] the
benefit of all amounts representing Acquired Interchange in
respect of each Monthly Period.
5. In relation to each Eligible Account on a [date] Specified Product Line
which Eligible Account comes into existence after the relevant Offer Date
(the "Future Designated Accounts") we hereby offer you an assignment on
[date] of :
(i) all Future Receivables under each such Future Designated Account
which are not Finance Charge Receivables in respect of Principal
Receivables until the earliest of:
(a) in respect of each Future Designated Account, such time (if
any) as such Account becomes a Redesignated Account;
(b) the termination of the Receivables Trust; or
(c) the occurrence of an Insolvency Event,
(ii) all Future Receivables under each such Future Designated Account
which are Finance Charge Receivables in respect of Receivables
which are assigned (or purported to be assigned) to the
Receivables Trustee pursuant to paragraph (i) above; and
(iii) (to the extent such are capable of assignment) the benefit of any
guarantee or insurance policy obtained by ourselves in respect of
the obligations of an Obligor to make payments on such Future
Designated Accounts.
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6. In respect of the Existing Receivables identified by reference to the New
Designated Accounts we have identified the Eligible Receivables and
Ineligible Receivables comprised therein.
7. In respect of the Eligible Receivables so identified, we certify that:
(a) the aggregate amount of the Eligible Receivables comprised in the
Existing Receivables is [ ];
(b) the total Outstanding Face Amount of the Principal Receivables
comprised in the Existing Receivables is L[ ]; and
(c) the total outstanding balance of the Finance Charge Receivables
comprised in the Existing Receivables is L[ ].
8. In respect of the Ineligible Receivables so identified, we certify that
the aggregate amount of the Ineligible Receivables comprised in the
Existing Receivables is L[ ].
9. Save in respect of an Existing Receivable which is identified as an
Ineligible Receivable, we warrant that each of the representations
referred to in Clause 17.2 of the RSA is true on and as of the Offer
Date, as the case may be, in respect of each Existing Receivable which is
a Principal Receivable which is offered to you hereby.
10. We acknowledge that if you accept the Offer contained herein we will be
deemed to represent in respect of each Future Receivable which is a
Principal Receivable arising on the New Designated Accounts on the Date
of Processing relating thereto and each Principal Receivable arising on a
Future Designated Account on the Date of Processing relating thereto,
that each of the representations referred to in Clause 17.3 of the RSA is
true on and as of such Date of Processing save in respect of a Principal
Receivable which is identified as an Ineligible Receivable.
11. In respect of the [date] Specified Product Lines we certify and represent
that:
(a) no selection procedures adverse to the Investor Beneficiaries of
any Applicable Series have been employed by us in selecting the
[date] Specified Product Lines from amongst the Product Lines in
the Bank Portfolio; and
(b) [in relation to all Offers except the Initial Offer] [the Offer
satisfies the Maximum Addition Amount criteria]1 or the Offer does
not satisfy the Maximum Addition Amount criteria but we have
received written confirmation from each Rating Agency that the
inclusion of such New Designated Accounts as Designated Accounts
pursuant to Clause 2.2 of the RSA will not result in the reduction
or withdrawal of its then current rating of any outstanding
Related Debt]1
Yours faithfully
for and on behalf of
[Name of Transferor/Additional Transferor]
- -------------------------------------------------------------------------------
1 Delete as appropriate.
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SCHEDULE 4
[CONDITIONS PRECEDENT TO SUBSEQUENT OFFERS
The Transferor and each Additional Transferor shall provide the following
documents to the Receivables Trustee (which shall be in form and substance
satisfactory to the Receivables Trustee):
1. a Solvency Certificate from the Transferor and such Additional Transferor
substantially in the form set out in the Seventh Schedule;
2. a statement from the Transferor and such Additional Transferor in the
relevant Offer substantially in the form set out in paragraph 10(c) of
the Third Schedule confirming either:
(i) the Offer satisfies the Maximum Addition Amount criteria; or
(ii) the Offer does not satisfy the Maximum Addition Amount criteria
but the Transferor has received written notice from each Rating
Agency that the inclusion of such Accounts as Designated Accounts
pursuant to Clause 2.2 will not result in the reduction or
withdrawal of its then current rating of any outstanding Related
Debt; and
3. a legal opinion addressed to the Receivables Trustee in respect of
Receivables arising in a new Additional Jurisdiction from reputable legal
advisers qualified to practise in such new Additional Jurisdiction.
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SCHEDULE 5
Part 1
Representations as to Matters of Law
1. Organisation: It is a corporation duly organised under the laws of
England with full corporate power, authority and legal right to own its
assets and conduct its business as such assets are presently owned and
its business is presently conducted and with power to enter into this
Agreement and other Relevant Documents and each assignment to be entered
into by it in respect of any Receivables assigned or scheduled to be
assigned and to exercise its rights and perform its obligations
thereunder and all corporate and other action required to authorise its
execution of each Relevant Document and each such assignment and its
performance of its obligations thereunder has been duly taken or will be
taken prior to the execution of such Relevant Document or assignment (as
the case may be).
2. Due Authorisation: All acts, conditions and things required to be done,
fulfilled and performed in order (a) to enable it lawfully to enter into,
exercise its rights under and perform and comply with the obligations
expressed to be assumed by it in each Relevant Document or in any such
assignment, (b) to ensure that the obligations expressed to be assumed by
it in each Relevant Document or in any such assignment are legal, valid
and binding on it and (c) to make each Relevant Document and each such
assignment admissible in evidence in England have been done, fulfilled
and performed or will be done, fulfilled or performed prior to the
execution of such Relevant Document or assignment (as the case may be)
save for the payment of stamp duty in respect of any such assignment
under Requirement of Law.
3. No Violation: The execution of each Relevant Document by it and each
assignment to be entered into by it in respect of any Receivables
assigned or scheduled to be assigned in the manner contemplated and the
exercise of its rights and the performance of its obligations in any such
assignment will not conflict with or violate any applicable law.
4. Documentary Requirements: Under the laws of England in force as at the
date of making this representation, it is not necessary that each
Relevant Document or any such assignment be filed, recorded or enrolled
with any court or other authority in England or that any stamp,
registration or similar tax be paid on or in relation to each Relevant
Document or any such assignment, save for the payment of stamp duty on
any such assignment under any applicable law.
5. Binding Obligations: The obligations expressed to be assumed by it in
each Relevant Document and in each such assignment are legal and valid
obligations binding on it and enforceable against it in accordance with
its terms (or will be so upon execution of each such Relevant Document or
each such assignment), except (a) as such enforceability may be limited
by applicable bankruptcy, insolvency, moratorium, re-organisation or
other similar laws affecting the enforcement of the rights of creditors
generally and (b) as such enforceability may be limited by the effect of
general principles of equity.
6. All Consents Required: All approvals, authorisations, consents, orders or
other actions of any person or of any governmental or regulatory body or
official required in connection with the execution and delivery of each
Relevant Document and/or the assignment of Receivables in the manner
contemplated herein or therein, the performance of the transactions
contemplated by each Relevant Document and the fulfilment of the terms
thereof have been obtained.
Part 2
Representations as to Matters of Fact
1. No Proceedings: There are no proceedings or investigations pending or, to
the best of its knowledge, threatened against the Transferor or any
Additional Transferor before any Court, regulatory body, arbitral
tribunal or public or administrative body or agency (i) asserting the
invalidity of any Relevant Document or of any assignment made in the
manner therein contemplated; (ii) seeking to prevent the entering into of
any such assignment or of any of the transactions contemplated by any
Relevant Document; (iii) seeking any determination or ruling that, in the
Transferor's or such Additional Transferor's reasonable opinion, would
materially and adversely affect the performance by it of its obligations
under any Relevant Document; or (iv) seeking any determination or ruling
that would materially and adversely affect the validity or enforceability
of any Relevant Document or any assignment of Receivables to be made in
the manner therein contemplated.
2. No Conflict: The execution of any Relevant Document or the assignment of
any Receivables in the manner therein contemplated and the exercise by
the Transferor or any Additional Transferor of its rights and the
performance of its obligations thereunder with regard to such Receivables
will not conflict with, result in any breach of the material terms and
provisions of, or constitute a material default under, any agreement,
indenture, contract, mortgage, deed of charge or other instrument to
which it is a party or by which it or any of its assets is otherwise
bound.
25
<PAGE>
3. Due Qualification: All licences, approvals, authorisations and consents
which may be reasonably considered to be necessary in connection with the
performance of its credit card business and in particular any applicable
licences under the Consumer Credit Act 1974 and the Data Protection Act
1984 have been obtained and remain in force in all material respects.
4. Tax Residence: Each of the Transferor and each Additional Transferor is
resident for tax purposes in the United Kingdom and, in the case of the
Transferor, is a bank as defined for the purpose of Section 349(3) of the
Income and Corporation Taxes Act 1988.
Part 3
Representations relating to Receivables
1. Eligibility: Unless identified as an Ineligible Receivable, each Existing
Receivable which is a Principal Receivable offered to the Receivables
Trustee thereunder is, at the Offer Date relating thereto, an Eligible
Receivable and has arisen from an Eligible Account in the amount
specified in the Offer and, unless specified in any daily activity report
provided to the Receivables Trustee by the Transferor pursuant to Clause
5.2, each Future Receivable which is a Principal Receivable and each
Principal Receivable arising on a Future Designated Account (as defined
in the Offer relating thereto) is on the date that it comes into
existence an Eligible Receivable and has arisen from an Eligible Account
in the amount specified in such Daily Activity Report.
2. Assignment Effective: The assignment of each Receivable the subject of an
Offer will be effective to pass to the Receivables Trustee good and
marketable title thereto and the benefit thereof (including in such
context, any Collections and other rights in connection therewith such as
related guarantees and Insurance Proceeds) free of any Encumbrances in
favour of any person claiming through or under the Transferor or any of
its Affiliates to the Receivables Trustee and no further act, condition
or thing will be required to be done in connection therewith to enable
the Receivables Trustee to require payment of any such Receivable or to
enforce any such right in the courts of England and Wales, Scotland or
Northern Ireland or any Additional Jurisdiction without the participation
of the Transferor other than:
(1) the payment of any applicable United Kingdom stamp duty; and
(2) the giving of a Notice of Assignment.
3. Compliance: The assignment of each Receivable the subject of an Offer is
in compliance with Requirements of Law applicable to the Transferor or,
as the case may be, the Additional Transferor on the date of such
assignment.
26
<PAGE>
SCHEDULE 6
NOTIFICATION EVENTS
1. A duly authorised officer of the Transferor or any Additional Transferor
shall admit in writing that the Transferor or such Additional Transferor
is unable to pay its debts as they fall due within the meaning of Section
123(1) of the Insolvency Act 1986 [and in the case of paragraph (a) of
that Section such written demand (not being frivolous or vexatious in
nature) is not paid out or discharged within [ ] days of the date such
written demand is made or is not otherwise subject to a bona fide dispute
as to payment] or the Transferor or any Additional Transferor makes a
general assignment for the benefit of or a composition with its creditors
or voluntarily suspends payments of its obligations with a view to the
general readjustment or rescheduling of its indebtedness.
2. The Transferor or any Additional Transferor shall consent to or take any
corporate action relating to the appointment of a receiver,
administrator, administrative receiver, trustee, liquidator or similar
officer of it or relating to all or substantially all of its revenues and
assets or an order of the court is made for its winding-up, dissolution,
administration or reorganisation (except for a solvent reorganisation)
and such order shall have remained in force undischarged or unstayed for
a period of 60 days or a receiver, administrator, administrative
receiver, liquidator, trustee or similar officer of it or relating to all
or substantially all of its revenues and assets is legally and validly
appointed and such appointment is not discharged within 14 days.
3. An encumbrancer legally and validly enforces its security with respect to
all or substantially all of the assets and revenues of the Transferor or
any Additional Transferor and such action by the encumbrancer is not
discharged within 14 days.
4. The Transferor or any Additional Transferor (or the Servicer on behalf of
the Transferor or any Additional Transferor) fails to pay any sum due
from it to the Receivables Trustee hereunder in respect of the Designated
Accounts within five Business Days of the due date thereof or the date of
demand, if payable on demand, in the currency and in the manner specified
herein, and such failure is not remedied within ten Business Days after
the Receivables Trustee has given notice thereof to the Transferor or
such Additional Transferor.
27
<PAGE>
SCHEDULE 7
FORM OF SOLVENCY CERTIFICATE
[on letterhead of the Transferor]
To: The Receivables Trustee
[[P.O. Box 75]
Normandy House
Grenville Street
St. Helier
Jersey JE2 4UF]
dated ____________________
IN RELATION TO THE SALE OF
CREDIT CARD RECEIVABLES BY
[BARCLAYS BANK PLC/NAME OF ADDITIONAL TRANSFEROR]
(the "Company")
I [ ], having duly considered the provisions of Sections 123 and 238 to 241
of the Insolvency Act 1986 have determined that as at the date hereof:
(1) the Company is able to pay its debts within the meaning of the said
Section 123 and to the best of my knowledge and belief would not become
unable to do so in consequence of the sale by way of assignment of credit
card receivables pursuant to the [[Offer of even date herewith] or
[effect of the proposed Discount Percentage nomination]] made pursuant to
the terms of [[Clause 2.1] or [Clause 2.2] or [Clause 8.3]] of the
receivables securitisation agreement (the "RSA") dated , 1999 and
entered into between the Company and the Receivables Trustee;
(2) no order has been made or resolution passed for the winding-up of the
Company and, to the best of my knowledge and belief:
(i) no petition had been presented for the winding-up of the Company
or the making of an administration order; and
(ii) no receiver, administrative receiver, administrator or receiver
and manager has been appointed in relation to the Company
(disregarding proceedings which are not being pursued or are discharged
or are being contested in good faith on proper grounds where less than
sixty days have expired since their commencement);
(3) in my opinion the value of the consideration which would be received by
the Company for the sale of Receivables if calculated in accordance with
this Agreement will not be considerably less than the value, in money or
money's worth, of the consideration provided by the Company;
(4) the sale of the Receivables to the Receivables Trustee and all matters
concerning the Company in connection with such matters will, to the
extent to which these were to be carried out by the Company, be effected
by the Company in good faith and for the purpose of carrying on its
business, and in my opinion there are reasonable grounds for believing
that the sale of the Receivables and all related matters will benefit the
Company;
(5) in submitting Offers to the Receivables Trustee the Company has not been
influenced by a desire to prefer the Receivables Trustee as a creditor
over any other creditors of the Company;
[(6) in respect of a Discount Percentage only] in the reasonable opinion of
the Company the performance of the portfolio of Designated Accounts is
such that the yield of Finance Charge Collections is not generating
adequate cashflows for the Beneficiaries of the Receivables Trust and the
size of the Discount Percentage is not intended by the Company solely to
accelerate distributions to the Excess Interest Beneficiary.]
Words and expressions defined in the RSA shall, unless the context otherwise
requires, bear the same meanings when used herein.
This certificate is given by me on behalf of the Company.
.......................
Director or other duly authorised officer
.......................
28
<PAGE>
EXECUTION
The Transferor
Executed as a deed by )
BARCLAYS BANK PLC )
acting by its duly authorised )
attorney in the presence of: )
The Receivables Trustee
The Common Seal of )
[*] )
was duly affixed hereto pursuant to a )
resolution of the Board in )
the presence of: )
[Address for Service
Clifford Chance Secretaries Limited
200 Aldersgate Street
London EC1A 4JJ]
29
Confirmation to the
ISDA Master Agreement
Dated as of [*] November 1999
relating to the
$ * Class A3 Backed Floating Rate Notes issued Party B Due * (the "Class A
Notes")
To: Gracechurch Card Funding (No. 1) PLC
Re: Transaction between Barclays Bank Plc ("Party A") and
Gracechurch Card Funding No 1 PLC ("Party B")
Dear Sirs:
The purpose of this letter agreement is to confirm the terms and conditions of
the Swap Transaction entered into between you and us on the Trade Date
specified below (the "Swap Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.
References herein to a Transaction shall be deemed to be references to a Swap
Transaction for the purposes of the 1991 ISDA Definitions (as supplemented by
the 1998 Supplement). The definitions and provisions contained in the 1991 ISDA
Definitions (as supplemented by the 1998 Supplement) and the 1998 ISDA Euro
Definitions (each as published by the International Swaps and Derivatives
Association, Inc. (formerly known as the International Swap Dealers
Association, Inc.)) are incorporated into this Confirmation. In the event of
any inconsistency between those Definitions and this Confirmation, this
Confirmation will govern. Terms defined in the terms and conditions of the
Notes will have the same meaning where used herein.
1. This Confirmation supplements, forms part of, and is subject to, the ISDA
Master Agreement, dated as of * October 1999, 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. Expressions used herein and not defined herein or in the
Definitions shall bear the meaning ascribed thereto in the Agreement.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Party A: Barclays Bank PLC
Party B: Gracechurch Card Funding (No. 1) PLC
Trade Date: *
Effective Date: * 1999; provided, however, that
effectiveness is subject to the
issuance of the Notes [and the
receipt by Party A on or prior to *
1999 of unconditional confirmation
that upon issue the Notes will be
rated Aaa by Moody's and AAA by
Standard & Poor's]; [provided
further, however, that solely for
the purpose of determining the
initial Calculation Period relating
to the initial Party B Floating Rate
Payer Payment Date, the Effective
Date shall be deemed to be * 1999.]
Termination Date: * , subject to adjustment as
provided herein and in accordance
with the Following Business Day
Convention.
Party A Floating Amount:
Party A Floating Rate Payer: Party A
Party A Floating Rate
Currency Amount: EUR *
Party A Floating Rate Payer
Period End Dates: Each *, *, * and * from and
including the Party A Floating Rate
Payer Period End Date falling in *
to and including *, subject to
adjustment in accordance with the
Following Business Day Convention.
Party A will provide a SWIFT MT100
notice as to the amount to be paid
on each Party A Floating Rate Payer
1
<PAGE>
Payment Date 2 Business Day for
euros prior to each such Party A
Floating Rate Payer Payment Date.
Party A Floating Rate Payer
Payment Dates: Each Party A Floating Rate Payer
Period End Date
Party A Floating Rate: EURIBOR, as calculated pursuant to
the terms and conditions of the
Notes
Designated Maturity: 3 months
Spread: Plus * per cent. per annum
Party A Floating Rate in
Respect of the initial
Calculation Period: * (excluding the Spread)
Party A Floating Rate
Day Count Fraction: [Actual/Actual]
Reset Dates: First day of each Calculation Period
Party B Floating Amounts:
Party B Floating Rate Payer: Party B
Party B Floating Rate Payer
Currency Amount: GBP *
Party B Floating Rate Payer
Period End Dates: Each *, *, * and * from and
including the Party B Floating Rate
Payer Period End Date falling in *
to and including *, subject to
adjustment in accordance with the
Following Business Day Convention
Party B Floating Rate Payer
Payment Dates: Each Party B Floating Rate Payer
Period End Date
Party B Floating Rate Amount: The product of the amount due [(or
which would be due assuming no early
redemption or withholding tax on the
Class A MTNs)] in respect of the
Class A MTNs and the Class A3
Percentage
Party B Floating Amount in
respect of the initial
Calculation Period: GBP *
Floating Rate
Day Count Fraction: [Actual/360]
Reset Dates: First day of each Calculation Period
Party A Initial Exchange Amount: GBP *
Party A Initial Exchange Date: Effective Date
Party A Final Exchange Amount: EUR *
Party A Final Exchange Date: The Party A Floating Rate Payer
Payment Date falling in *
Party B Initial Exchange Amount: EUR *
Party B Initial Exchange Date: Effective Date
Party B Final Exchange Amount: GBP *
Party B Final Exchange Date: The Party B Floating Rate Payer
Period End Date falling in *.
Business Days for Euro: Any day (other than a Saturday or
Sunday or a day on which banking
institutions in London, England or
[New York] are authorised or obliged
by law or executive order to close)
which is TARGET Settlement Date.
Business Days for USD: Any day (other than a Saturday or
Sunday or a day on which banking
institution in New York, New York
and London, England are authorised
or obligated by law or executive
order to close) on
2
<PAGE>
which dealings in deposits in United
States dollars are transacted in the
London interbank market.
Calculation Agent: Party A
3. Details of Variation to Agreement:
Expenses: The obligation of Party B to pay amounts hereunder to Party A
on any Party B Floating Rate Payer Payment Date in respect of the
Calculation Period beginning on the Party B Floating Rate Payer Period
End Date immediately preceding such Party B Floating Rate Payer Payment
Date (prior to and during the Amortisation Period) will be reduced by an
amount equal to the sum of any [Ordinary Expenses [to be defined in the
Terms and Conditions of the Class A Notes?]] of which Party B actually
received notice during such Calculation Period. [Such reduction will be
permitted only to the extent that Party B does not have other funds that
are available for the purpose of paying any such expenses.] No such
reduction will permit Party A to reduce the amounts it is obliged to pay
hereunder.
Taxation: If any of the events described in Condition * of the Class A
Notes shall occur, any payments to be made by Party B hereunder shall be
net of the amount of any taxes so withheld, accounted for, deducted or
suffered and Party A's payment obligations shall be reduced in proportion
to the amount by which the payments to be made by Party B are so netted.
If any of the events described in Condition * of the Class A Notes shall
occur, any payments to be made by Party A hereunder shall be made net of
the amount of any taxes so withheld, accounted for, deducted or suffered
and the payment obligations of Party B shall remain the same.
Interest Deferral: The obligation of Party A to pay Party A Floating
Amounts on any Party A Floating Rate Payer Payment Date will be reduced
proportionately to the extent that the Party B Floating Amounts received
by Party A and accrued during the Party B Floating Rate Payer Calculation
Period ending on the Party B Floating Rate Payer Period End Date falling
in the same calendar month as such Party A Floating Rate Payer Payment
Date have been reduced because the MTN Issuer in respect of the Class A
MTNs has, [in accordance with the terms of the Class A MTNs], deferred
the payment of interest on the Class A MTNs (any amount so deferred
(excluding, for the avoidance of doubt, any interest on interest payable
pursuant to the terms and conditions of the Class A MTNs), the "Deferred
Interest"). The obligation of Party A to pay Party A Floating Amounts on
any Party A Floating Rate Payer Payment Date will be increased in
proportion to the amount of any Deferred Interest received by Party B and
included in the payment made by Party B to Party A on the Party B
Floating Rate Payer Payment Date falling in the same calendar month as
such Party A Floating Rate Payer Payment Date. The obligation of Party B
to pay Party B Floating Amounts on any Party B Floating Rate Payer
Payment Date will be reduced by the amount of interest due on the Class A
MTNs on such Party B Floating Rate Payer Payment Date that constitutes
Deferred Interest. The obligation of Party B to pay Party B Floating
Amounts on any Party B Floating Rate Payer Payment Date will be increased
by the amount of any Deferred Interest and all additional interest paid
by the MTNs Issuer to Party B in respect of Deferred Interest received by
Party B on such Party B Floating Rate Payer Payment Date.
Rapid Amortisation Period: During the Rapid Amortisation Period, Party B
shall pay to Party A, on each date when it receives a principal payment
on the Class A MTNs an amount equal to the product of the amount of
principal so received on such date and the Class A3 Percentage (each such
payment, an "Interim Party B Principal Payment"). The aggregate of the
Interim Party B Principal Payments paid by Party B to Party A during the
period from (but not including) the immediately preceding Party B
Floating Rate Payer Payment Date (as defined below) to (and including)
each following Party B Floating Rate Payer Payment Date is called the
"Party B Early Amortisation Principal Payment". During the Rapid
Amortisation Period, Party A shall pay to Party B, on each Party A
Floating Rate Payer Payment Date (as defined below), the percentage of
the Party A Floating Rate Payer Currency Amount set forth in Section 2
(the "Original Party A Floating Rate Payer Currency Amount") that is
equal to the percentage of the Party B Floating Rate Payer Currency
Amount set forth in Section 2 (the "Original Party B Floating Rate Payer
Currency Amount") represented by such Interim Party B Principal Payment
(each such payment, an "Interim Party A Principal Payment"). The
aggregate of the Interim Party A Principal Payments paid by Party A to
Party B on a Party A Floating Rate Payer Payment Date is called the
"Party A Early Amortisation Principal Payment".
From the commencement of the Rapid Amortisation Period, (1) the
Termination Date shall be extended to the earliest of (i) the Party A
Floating Rate Payer Payment Date (as amended below) in respect of the
Party A Floating Rate Calculation Period during which the final payment
of principal and interest on the Class A MTNs is made, and (ii) the
Series 1999-1 Termination Date, (2) the Party A Final Exchange Date shall
be the Termination Date as so extended and (3) the Party B Final Exchange
Date shall be extended to the Party B Floating Rate Payer Payment Date
(as amended below) on which the final payment of principal and interest
on the Class A MTNs is made. The Party A Final Exchange Amount shall be
reduced by the aggregate amount of the Party A Early Amortisation
Principal Payments and the Party B Final Exchange Amount shall be reduced
by the aggregate of the amount of the Party B Early Amortisation
Principal Payments (the original
3
<PAGE>
Party A Final Exchange Amount before any reduction, the "Original Party A
Final Exchange Amount" and the original Party B Final Exchange Amount
before any reduction, the "Original Party B Exchange Amount").
Party A Floating Amount
Party A Floating Rate Payer: Party A
Party A Floating Rate
Currency Amount: The Original Party A Floating Rate
Currency Amount as reduced by the
aggregate of the Party A Early
Amortisation Principal Payments
Party A Floating Rate Payer
Period End Dates: The * of each month commencing on
the * of the month next following
the commencement of the Rapid
Amortisation, subject to adjustment
in accordance with the Following
Business Day Convention, [provided,
however, that if the Rapid
Amortisation Period commences other
than on a date that would otherwise
be a Party A Floating Rate Payer
Period End Date, the Party A
Floating Rate Payer Period End Date
shall be the first Party A Floating
Rate Period End Date in the
Amortisation Period]
Party A Floating Rate Payer
Payment Dates: Each Party A Floating Rate Payer
Period End Date, subject to
adjustment in accordance with the
Following Business Day Convention
Party A Floating Rate Option: EURIBOR, as calculated pursuant to
the terms and conditions of the
Class A Notes
Designated Maturity: 1 month, [provided, however, that if
the Designated Maturity of the Party
A Floating Amount prior to the
commencement of the Rapid
Amortisation Period was in respect
of a 3 month period that would end
on a Party A Floating Rate Payer
Payment Date later than the next
succeeding Party A Floating Rate
Payer Payment Date, for the purposes
of calculating the Party A Floating
Amount, the Designated Maturity of
the Party A Floating Rate Option
shall be 3 months as calculated
prior to the commencement of the
Amortisation Period]
Spread: Plus * percent. per annum
Floating Rate
Day Count Fraction: [Actual/Actual]
Reset Dates: First day of each Calculation Period
Party B Floating Amount
Party B Floating Rate Payer: Party B
Party B Floating Rate
Currency Amount: The Original Party B Floating Rate
Currency Amount, as reduced by the
aggregate of all Party B Early
Amortisation Principal Payments
Party B Floating Rate
Payer Payment Dates: Each Party B Floating Rate Payer
Period End Date
Party B Floating Rate Payer
Period End Dates: The * of each month commencing on
the * of the month next following
the occurrence of a Rapid
Amortisation Event, subject to
adjustment in accordance with the
Following Business Day Convention,
provided, however, that if the
Amortisation Period commences other
than on a date that would otherwise
be a Party B Floating Rate Payer
Period End Date, the Party B
Floating Rate Payer Period End Date
shall be the first Party B Floating
Rate Period End Date in the
Amortisation Period
4
<PAGE>
Party B Floating Rate Amount: The product of the amount due in
respect of the Class A MTNs and the
Class A3 Percentage.
Floating Rate
Day Count Fraction: [Actual/360]
Reset Dates: First day of each Calculation Period
4. Account Details
Payments to Party A:
Account for Payments in EUR SWIFT Code: *
ABA Number: *
Account: *
Account: *
REF: *
Account for Payments in GBP Account: *
REF: *
Payments to Party B:
Account for Payments in GBP: Account: *
REF: *
Account for Payments in EUR: Account: *
Account: *
REF: *
5. Contact for Party A Documentation and Operations:
Telephone: -----------------------------------
Facsimile No: -----------------------------------
6. Governing Law: England
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
BARCLAYS BANK PLC
By:
Name:
Title:
Confirmed as of the date first written:
GRACECHURCH CARD FUNDING (NO. 1) PLC
By:
Name:
Title:
5
SCHEDULE TO THE
MASTER AGREEMENT
dated as of * November 1999
relating to the
$ * Class B Backed Floating
Rate Notes Issued by Party B due * (the "Class B Notes")
between
BARCLAYS BANK PLC
("Party A")
and
GRACECHURCH CARD FUNDING (NO.1) PLC
("Party B")
1. TERMINATION PROVISIONS
(a) "Specified Entity" means in relation to Party A for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
and in relation to Party B for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(a)(iv), None Specified
(b) "Specified Transaction" has the meaning specified in Section 14.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) will not apply
to Party B.
The "Credit Support Default" provisions of Section 5(a)(iii) will not
apply to Party B.
The "Misrepresentation" provisions of Section 5(a)(iv) will not apply to
Party B.
The "Default under Specified Transaction" provisions of Section 5(a)(v)
will not apply to Party A and Party B.
The "Cross Default" provisions of Section 5(a)(vi) will not apply to
Party A and Party B.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to Party B.
(e) The "Automatic Early Termination" provisions of Section 6(a) will not
apply to Party A and Party B.
(f) Payments on Early Termination "Second Method" and "Loss" will apply for
the purpose of Section 6(3) of this Agreement.
(g) "Termination Currency" means [Dollars].
(h) The "Tax Event" provisions of Section 5(b)(ii) will not apply to Party A
and Party B.
(i) Additional Termination Event will apply. Each of the following shall
constitute an Additional Termination Event.
(i) Event of Default An Event of Default under the terms and
conditions occurs and the Trustee gives notice
that the Class A Notes are due and repayable
as provided in Condition 8 in the [terms and
conditions of the Class A Notes] (in which
event Party B shall be the Affected Party).
In the case of Additional Termination Event[s] described in clause
[(i)] above, the provisions of Section 6(b)(iv) shall be modified
to provide that Party B will, by not more than 20 days notice to
Party A, and provided that the relevant Additional Termination
Event is then continuing, designate a day not earlier than the day
such notice is effective as an Early Termination Date in respect
of all
1
<PAGE>
Affected Transaction, provided however, that such Early
Termination Date shall not be later than the date set for
redemption of the Class A Notes in accordance with Condition 5(a)
of the Terms and Conditions of the Class A Notes, as applicable.
(j) The "Deduction or Withholding for Tax" provisions of Section 2(d) will
not apply to Party A and Party B.
2. TAX REPRESENTATIONS
(a) Payer Representations. For the purpose of Section 3(e) of this Agreement,
Party A and Party B will make the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from
any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of
this Agreement) to be made by it to the other party under this Agreement.
In making this representation, it may rely on the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, the satisfaction of the agreement of the other party contained
in section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii) of this Agreement and the satisfaction of
the agreement of the other party contained in Section 4(d) of this
Agreement, provided that it shall not be a breach of this representation
where reliance is placed on clause (ii) and the other party does not
deliver a form or document under Section 4(a)(iii) by reason of material
prejudice to its legal or commercial position.
(b) Payee Representations. For the purpose of Section 3(f) of this Agreement,
Party A and Party B make the representations specified below:
(A) Party A makes no representation.
(B) Party B makes the following representation: It is a company duly
incorporated under the laws of England and Wales and is a foreign
corporation for United States tax purposes, and any payments
received by it pursuant to this Agreement do not arise from the
conduct of a United States trade or business for such purposes.
3. AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Section 4(a) of this Agreement, each party agrees to
deliver the following documents as applicable:
(c) Tax forms, documents or certificates to be delivered are:
<TABLE>
<CAPTION>
Party required to deliver Form/Document/ Date by which to be
document Certificate delivered
<S> <C> <C>
Party B A duly completed and (i) Before the first
executed Internal Payment Date under the
Revenue Service Form W8 Agreement, (ii)
(or any successor promptly upon
thereto) as requested reasonable demand by
by Party A with respect Party A and (iii)
to any payments promptly upon learning
received that any such form
previously provided by
Party B has become
obsolete or incorrect
Party A/Party B Any document required Promptly upon the
or reasonably requested earlier of (i)
to allow the other reasonable demand by
party to make payments the other party and
under the Agreement (ii) learning that the
without any deduction form or document is
or withholding for or required
on account of any Tax
or with such deduction
or withholding at a
reduced rate
Party B A duly completed and (i) Before the first
executed Internal Payment Date under the
Revenue Service Form Agreement, (ii)
4224 (or any successor promptly upon
thereto) as requested reasonable demand by or
by Party B with respect on behalf of Party B
to any payments and (iii) promptly upon
received by Party A learning that any such
form previously
provided by Party A has
become obsolete or
incorrect
</TABLE>
2
<PAGE>
(d) Other documents to be delivered are:
<TABLE>
<CAPTION>
Party required to deliver Form/Document/Certificate Date by which to be delivered Covered by Section 3(d)
document Representation
<S> <C> <C> <C>
Party A A copy of the most recent Upon execution of this Yes
annual report of Party A Agreement
Party A/Party B Certificate or other At the execution of this Yes
documents evidencing the Agreement, and, if a
authority of the party Confirmation so requires it
entering into this Agreement on or before the date set
and the persons acting on forth therein
behalf of such party
Party A/Party B Legal Opinions in the form At the execution of this No
reasonably acceptable to the Agreement
other party
Party B A duly executed copy of the Upon execution of this No
Credit Support Document Agreement
specified in Part 4 of this
Schedule together with duly
executed copies of the
Support Documents (as defined
in the Trust Deed)
Party B Certificate of Incorporation, At the execution of this Yes
Memorandum and Articles of Agreement
Association of Party B
Party B Letter of Acceptance of At the execution of this No
Appointment from the Process Agreement
Agent acknowledging agreement
to act in such capacity
</TABLE>
4. MISCELLANEOUS
(e) Addresses for Notices: For the purpose of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
In connection with Section 12(a), all notices to Party A shall, with respect to
any particular Transaction, be sent to the address, telex number or facsimile
number specified in the relevant Confirmation and any notice for purposes of
Section 5 or 6 shall be sent to the address, telex number or facsimile number
specified below:
Address: 5 The North Colonnade
Canary Wharf
London E14 4BB
Attention: Swaps Operations
Facsimile No.0171 773 6857/6858
Telephone: 0171 773 6603
cc:
Address: 5 The North Colonnade
Canary Wharf
London E14 4BB
3
<PAGE>
Attention: Markets Credit
Facsimile No.0171 773 4857
Telephone: 0171 773 2274
With a copy in the case of notices or communications relating to Sections 5, 6,
7, 11 or 13 to:
Address: 5 The North Colonnade
Canary Wharf
London E14 4BB
Attention: Legal Director, Legal Division (marked urgent)
Facsimile No.0171 773 4934
Telephone: 0171 773 4720
Address for notices or communications to Party B:
Address: Gracechurch Card Funding (No.1) PLC
200 Aldersgate Street
London EC1A 4JJ
Attention: The Directors
Fax: *
(For all purposes)
(f) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent:
Not applicable
Party B appoints as its Process Agent:
Address: CLIFFORD CHANCE SECRETARIES LIMITED
200 Aldersgate Street
London EC1A 4JJ
(g) Offices. The provisions of Section 10(a) will apply to this Agreement.
(h) Multibranch Party. For the purpose of Section 10:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(i) Calculation Agent. The Calculation Agent is Barclays Bank PLC. All
calculations by the Calculation Agent (the "CA") shall be made in good
faith and through the exercise of the CA's commercially reasonable
judgment. If either Party A or Party B objects to any calculation made by
the CA, then Party A and Party B will negotiate in good faith to agree on
an independent leading dealer to make such calculation, and if they
cannot agree within three Business Days, they will each promptly choose
an independent leading dealer and instruct such dealers to agree on
another independent leading dealer to make such calculation. The
calculation of any such leading independent dealer will be binding absent
manifest error. The costs of such independent leading dealers will be
borne equally by Party A and Party B.
(j) Credit Support Document. Details of any Credit Support Document:
Party A: None.
Party B: The Trust Deed.
(k) Credit Support Provider.
Party A: Not Applicable
Party B: Not Applicable
(l) Governing Law. This Agreement and each Confirmation will be governed by
and construed in accordance with the laws of England.
(m) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
5. OTHER PROVISIONS
(n) Neither Party A nor Party B will in any circumstances be required to pay
additional amounts in respect of any Indemnifiable Tax or be under any
obligation to pay to the other any amount in respect of any liability of
4
<PAGE>
such other for or on account of any Tax and, accordingly, Section
2(d)(i)(4) and Section 2(d)(ii) of this Agreement shall not apply.
(o) Section 6(b)(ii) is hereby amended to read in its entirety as follows:
Transfer to Avoid Termination Event
(1) If an Illegality under Section 5(b)(i)(1) occurs and there is only
one Affected Party, the Affected Party will, as a condition to its
right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require such
party to incur a loss, excluding immaterial, incidental expenses)
to transfer within 20 days after it gives notice under Section
6(b)(i) all its rights and obligations under this Agreement in
respect of the Affected Transactions to (A) in the case of Party
A, another of its Officers or Affiliates and (B) in the case of
Party B, another of its Offices or Affiliates, if any, or another
company so that such Termination Event ceases to exist. If the
Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day
period, whereupon the other party may effect such a transfer
within 30 days after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii)(1) will
be subject to and conditional upon the prior written consent of
the other party, which consent will not be withheld if such other
party's policies in effect at such time would permit it to enter
into transactions with the transferee on the terms proposed.
[(2)] [Others].
[(3)] No transfer or substitution pursuant to this Section 6(b)(ii)
shall occur unless and until the Trustee has received the written
affirmation of each of Standard & Poor's and Moody's that such
transfer or substitution shall not adversely affect the then-
current ratings of the Class A Notes.
(p) Section 6(d)(i) is hereby amended to read in its entirety as follows:
Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, the Calculation Agent shall make
computations of the amounts owing pursuant to Section 6(e) and will
provide to each party a statement (1) showing, in reasonable detail, such
calculations and specifying the net amount payable by the applicable
party pursuant to Section 6(e) and (2) giving details of the relevant
account to which any amount payable is to be paid.
(q) Section 7 is hereby amended to read in its entirety as follows:
Except as stated under Section 6(b)(ii), as provided in the Schedule or
as provided in this Section 7, and except for the assignment by way of
security in favour of the Trustee under the Trust Deed, neither Party A
nor Party B is permitted to assign, novate or transfer as a whole or in
party any of its rights, obligations or interests under this Agreement.
Party A may transfer is rights and obligations under this Agreement (but,
not its rights only) to another of Party A's Offices, branches or
Affiliates (the "Transferee") on ten Business Days' prior written notice,
provided that (i) Party A delivers an opinion of independent counsel of
recognised standing in form and substance satisfactory to the Trustee
confirming that as at the date of such transfer the Transferee will not,
as a result of such transfer, be required to withhold or deduct on
account of tax under this Agreement, (ii) a Termination Event or Event of
Default does not occur under this Agreement as a result of such transfer
and (iii) the Trustee has received written affirmation of Standard &
Poor's and Moody's (or their successors) that such transfer shall not
adversely affect the then-current ratings of the Class A Notes.
(r) Additional Representations. Section 3 is hereby amended by adding at the
end thereof the following Subparagraphs:
(g) It is entering into this Agreement, any Credit Support Document to
which it is a party and any other documentation relating to this
Agreement as principal (and not as agent or in any other capacity,
fiduciary or otherwise).
(s) Relationship Between Parties. Each party will be deemed to represent to
the other party on the date which it enters into this Agreement that
(absent a written agreement between the parties duly executed by each of
them that expressly imposes affirmative obligations to the contrary):
(i) Non-Reliance. It is acting for its own account, and it has made
its own independent decisions to enter into this Agreement and as
to whether this Agreement is appropriate or proper for it based
upon its own judgement and upon advice from such advisers as it
has deemed necessary. It is not relying on any communication
(written or oral) of the other party as investment advice or as a
recommendation to enter into this Agreement; it being understood
that information and explanations related to the terms and
conditions of this Agreement shall not be considered investment
advice or a recommendation to enter into this Agreement. No
communication (written or oral) received from the other party
shall be deemed to be an assurance or guarantee as to the expected
results of this Agreement.
5
<PAGE>
(ii) Assessment and Understanding. It is capable of assessing the
merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the
terms, conditions and risks of this Agreement. It is also capable
of assuming, and assumes, the risks of this Agreement.
(iii) Status of Parties. The other party is not acting as a fiduciary
for or as adviser to it in respect of this Agreement.
(t) Amendments. Section 9(b) of this Agreement is hereby amended to read:
Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing and executed by each of the
parties and approved by the Trustee; provided, however, that all such
amendments, modifications or waivers shall require the written
affirmation of each of Standard & Poor's and Moody's that such
amendments, modifications or waivers shall not adversely affect the then
current ratings of the Class A Notes.
(u) Confirmations. Each Confirmation supplements, forms part of, and will be
read and construed as one with this Agreement.
(v) Non-Petition. Only the Trustee may pursue the remedies available under
the general law or under this Agreement, the Trust Deed and the Notes to
enforce the rights of Party A, and Party A shall not be entitled to
proceed directly against Party B unless the Trustee, having become bound
to proceed in accordance with the terms of the Trust Deed, fails or
neglects to do so within a reasonable period and such failure or neglect
is continuing provided always that, for the avoidance of doubt, the
foregoing shall not prevent Party A from exercising any right to
terminate this Agreement pursuant to the provisions hereof. The Trustee
having realised the security constituted by or pursuant to the Trust Deed
and distributed the net proceeds in accordance with Condition 3 of the
Terms and Conditions of the Class A Notes and the Trust Deed, Party A may
not take any further steps against Party B to recover any sum still
unpaid under the Trust Deed or under this Agreement and Party B's
liability for any sum still unpaid shall be extinguished. In particular,
Party A shall not be entitled to petition or take any other step for the
winding-up of Party B or for the purpose of commencing or sustaining a
case against Party B under any bankruptcy, insolvency, conservatorship,
receivership or similar law or appointing a conservator, receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of Party B or any substantial part of its property, provided
that the Trustee and/or Party A may prove or lodge a claim in the
liquidation of Party B initiated by another party and provided further
that the Trustee and Party A may take proceedings to obtain a declaration
or similar judgment or order as to the obligations and liabilities of
Party B under this Agreement. [to conform to other documents].
(w) Additional Definitions. Terms defined or referred to in the Trust Deed
shall bear the same respective meaning herein.
(x) 1991 ISDA Definitions. Reference is hereby made to the 1991 ISDA
Definitions (as supplemented by the 1998 Supplement) and as amended by
the 1998 ISDA Euro Definitions) (the "Definitions"), published by the
International Swaps and Derivatives Association, Inc., which are hereby
incorporated by reference herein.
(y) Section 2(b) is hereby amended to read in its entirety as follows:
Change of Account. Party A may change its account for receiving payment
or delivery by giving notice to Party B at least 10 Local Business Days
prior to the scheduled date for payment or delivery to which such change
applies unless Party B gives timely notice of a reasonable objection to
such change. Party B may change its account for receiving payment or
delivery by giving notice to Party A at least 10 Local Business Days
prior to the scheduled date for payment or delivery to which such change
applies unless Party A gives timely notice of a reasonable objection to
such change.
(z) Payments from Party B. Notwithstanding anything contained in this
Agreement to the contrary, any amount required to be paid by Party B
pursuant to this Agreement will be payable only to the extent and in
accordance with the priority provided in the Trust Deed.
(aa) Optional Transfer and Maintaining Rating of the Notes. If any rating in
respect of any of (I) Party A, or (II) any Rating Support (as defined
below) is:
(iv) downgraded or withdrawn by Standard & Poor's; or
(v) downgraded or withdrawn by Moody's;
(either of (i) or (ii) a "Party A Rating Reduction")
then, immediately upon such Party A Rating Reduction
6
<PAGE>
(1) Party A (acting reasonably) shall determine, or either Standard &
Poor's or Moody's shall indicate, that as a direct consequence of
such Party A Rating Reduction, the then current rating of the
Class A Notes could be adversely affected, then
(2) Party A shall immediately consult with the relevant rating agency
and if such rating agency confirms that as a direct consequence of
the Party A Rating Reduction the then rating of the Class A Notes
is or will be adversely affected, then
(3) Party A shall thereupon use its best efforts (subject to the
proviso at the end of the penultimate sentence of this paragraph
(n)) to assist Party B in ensuring (if necessary) that, within
thirty days of such Party A Rating Reduction (with the prior
written confirmation of each rating agency (or agencies, as
applicable) carrying out the Party A Rating Reduction) all
necessary actions are taken to maintain the rating of the Class A
Notes at the rating that would subsist but for the Party A Rating
Reduction or, in the case of an immediate adverse effect on the
rating of the Class A Notes, to restore the rating of the Class A
Notes to the rating that existed immediately prior to such Party A
Rating Reduction. These efforts shall include (A) obtaining a
third party, acceptable to Party B, to guarantee the obligations
of Party A under this Agreement or to whom the obligations under
this Agreement may be transferred or (B) posting collateral (and,
in the event the Party A Rating Reduction is carried out by
Standard & Poor's, such posting of collateral shall be in
accordance with the Standard & Poor's interest rate and currency
swap criteria dated January 1999 for calculating swap collateral
(including all mark-to-market and volatility buffer calculations
set forth therein), as such criteria may be amended, supplemented
or replaced from time to time) or (C) any other action as Party A,
in its sole discretion, deems to be reasonably necessary (and any
of (A), (B) or (C) called "Rating Support") to assist Party B in
maintaining the rating of the Class A Notes or (in the event the
Class A Notes have been downgraded) in restoring the rating of the
Class A Notes to the rating that existed immediately prior to such
Party A Rating Reduction, provided that if Rating Support cannot
be completed despite the exercise of Party A's best efforts as
outlined above, Party A shall nonetheless post collateral as
specified in (B) above. In the event that any rating in respect of
Party A is placed under review for possible downgrade or placed
under review for possible withdrawal by Moody's, then Party A
shall promptly send written notice of such fact to Moody's.
[(bb) Pari Passu. The following Section 3(a)(vi) shall be inserted after
Section 3(a)(v):
(vi) Pari Passu. Party A represents and warrants to Party B that its
payment obligations hereunder rank and will rank at all times at
least pari passu in all respects with all of its unsecured
obligations (except for those which are preferred by operation of
law).]
(cc) Inconsistency. In the event of any inconsistency among or between any of
the following documents, the relevant document first listed below shall
govern.
(vi) Confirmation;
(vii) Schedule;
(viii)Definitions;
(ix) Sections 1 through 14 of this Agreement.
(dd) Telephone Recording. Each party to this Agreement acknowledges and agrees
to the tape recording of conversations between the parties to this
Agreement whether by one or other or both of the parties and that any
such tape recordings may be submitted in evidence to any court or legal
proceedings for the purpose of establishing any matters relating to this
Agreement.
(ee) Payments made by either party to this Agreement pursuant to this
Agreement will be made in accordance with the provisions of the [Trust
and cash Management Agreement] dated * 1999 between, inter alios, the
parties hereto.
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorised officers as of * 1999 effective as of * 1999.
BARCLAYS BANK PLC
By:
Name:
Title:
Date:
7
<PAGE>
GRACECHURCH CARD FUNDING (NO.1) PLC
By:
Name:
Title:
Date:
8
<PAGE>
SCHEDULE TO THE
MASTER AGREEMENT
dated as of * November 1999
relating to the
$ * Class B Backed Floating
Rate Notes Issued by Party B due * (the "Class B Notes")
between
BARCLAYS BANK PLC
("Party A")
and
GRACECHURCH CARD FUNDING (NO.1) PLC
("Party B")
1. TERMINATION PROVISIONS
(a) "Specified Entity" means in relation to Party A for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
and in relation to Party B for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(a)(iv), None Specified
(b) "Specified Transaction" has the meaning specified in Section 14.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) will not apply
to Party B.
The "Credit Support Default" provisions of Section 5(a)(iii) will not
apply to Party B.
The "Misrepresentation" provisions of Section 5(a)(iv) will not apply to
Party B.
The "Default under Specified Transaction" provisions of Section 5(a)(v)
will not apply to Party A and Party B.
The "Cross Default" provisions of Section 5(a)(vi) will not apply to
Party A and Party B.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to Party B.
(e) The "Automatic Early Termination" provisions of Section 6(a) will not
apply to Party A and Party B.
(f) Payments on Early Termination "Second Method" and "Loss" will apply for
the purpose of Section 6(3) of this Agreement.
(g) "Termination Currency" means [Dollars].
(h) The "Tax Event" provisions of Section 5(b)(ii) will not apply to Party A
and Party B.
(i) Additional Termination Event will apply. Each of the following shall
constitute an Additional Termination Event.
(i) Event of Default An Event of Default under the terms and
conditions occurs and the Trustee gives notice that the Class A
Notes are due and repayable as provided in Condition 8 in the
[terms and conditions of the Class A Notes] (in which event Party
B shall be the Affected Party).
In the case of Additional Termination Event[s] described in clause
[(i)] above, the provisions of Section 6(b)(iv) shall be modified
to provide that Party B will, by not more than 20 days notice to
Party A, and provided that the relevant Additional Termination
Event is then continuing, designate a
9
<PAGE>
day not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transaction, provided
however, that such Early Termination Date shall not be later than
the date set for redemption of the Class A Notes in accordance
with Condition 5(a) of the Terms and Conditions of the Class A
Notes, as applicable.
(j) The "Deduction or Withholding for Tax" provisions of Section 2(d) will
not apply to Party A and Party B.
2. TAX REPRESENTATIONS
(a) Payer Representations. For the purpose of Section 3(e) of this Agreement,
Party A and Party B will make the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from
any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of
this Agreement) to be made by it to the other party under this Agreement.
In making this representation, it may rely on the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, the satisfaction of the agreement of the other party contained
in section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii) of this Agreement and the satisfaction of
the agreement of the other party contained in Section 4(d) of this
Agreement, provided that it shall not be a breach of this representation
where reliance is placed on clause (ii) and the other party does not
deliver a form or document under Section 4(a)(iii) by reason of material
prejudice to its legal or commercial position.
(b) Payee Representations. For the purpose of Section 3(f) of this Agreement,
Party A and Party B make the representations specified below:
(A) Party A makes no representation.
(B) Party B makes the following representation: It is a company duly
incorporated under the laws of England and Wales and is a foreign
corporation for United States tax purposes, and any payments
received by it pursuant to this Agreement do not arise from the
conduct of a United States trade or business for such purposes.
3. AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Section 4(a) of this Agreement, each party agrees to
deliver the following documents as applicable:
(c) Tax forms, documents or certificates to be delivered are:
<TABLE>
<CAPTION>
Party required to deliver Form/Document/ Date by which to be
document Certificate delivered
<S> <C> <C>
Party B A duly completed and (i) Before the first
executed Internal Payment Date under the
Revenue Service Form W8 Agreement, (ii)
(or any successor promptly upon
thereto) as requested reasonable demand by
by Party A with respect Party A and (iii)
to any payments promptly upon learning
received that any such form
previously provided by
Party B has become
obsolete or incorrect
Party A/Party B Any document required Promptly upon the
or reasonably requested earlier of (i)
to allow the other reasonable demand by
party to make payments the other party and
under the Agreement (ii) learning that the
without any deduction form or document is
or withholding for or required
on account of any Tax
or with such deduction
or withholding at a
reduced rate
10
<PAGE>
Party B A duly completed and (i) Before the first
executed Internal Payment Date under the
Revenue Service Form Agreement, (ii)
4224 (or any successor promptly upon
thereto) as requested reasonable demand by or
by Party B with respect on behalf of Party B
to any payments and (iii) promptly upon
received by Party A learning that any such
form previously
provided by Party A has
become obsolete or
incorrect
</TABLE>
(d) Other documents to be delivered are:
<TABLE>
<CAPTION>
Party required to Form/Document/ Date by which to Covered by
deliver document Certificate be delivered Section 3(d)
Representation
<S> <C> <C> <C>
Party A A copy of the Upon execution of Yes
most recent this Agreement
annual report of
Party A
Party A/Party B Certificate or At the execution Yes
other documents of this
evidencing the Agreement, and,
authority of the if a Confirmation
party entering so requires it on
into this or before the
Agreement and the date set forth
persons acting on therein
behalf of such
party
Party A/Party B Legal Opinions in At the execution No
the form of this Agreement
reasonably
acceptable to the
other party
Party B A duly executed Upon execution of No
copy of the this Agreement
Credit Support
Document
specified in Part
4 of this
Schedule together
with duly
executed copies
of the Support
Documents (as
defined in the
Trust Deed)
Party B Certificate of At the execution Yes
Incorporation, of this Agreement
Memorandum and
Articles of
Association of
Party B
Party B Letter of At the execution No
Acceptance of of this Agreement
Appointment from
the Process Agent
acknowledging
agreement to act
in such capacity
</TABLE>
4. MISCELLANEOUS
(e) Addresses for Notices: For the purpose of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
In connection with Section 12(a), all notices to Party A shall, with respect to
any particular Transaction, be sent to the address, telex number or facsimile
number specified in the relevant Confirmation and any notice for purposes of
Section 5 or 6 shall be sent to the address, telex number or facsimile number
specified below:
11
<PAGE>
Address: 5 The North Colonnade
Canary Wharf
London E14 4BB
Attention: Swaps Operations
Facsimile No.: 0171 773 6857/6858
Telephone: 0171 773 6603
cc:
Address: 5 The North Colonnade
Canary Wharf
London E14 4BB
Attention: Markets Credit
Facsimile No.: 0171 773 4857
Telephone: 0171 773 2274
With a copy in the case of notices or communications relating to Sections 5, 6,
7, 11 or 13 to:
Address: 5 The North Colonnade
Canary Wharf
London E14 4BB
Attention: Legal Director, Legal Division (marked urgent)
Facsimile No.: 0171 773 4934
Telephone: 0171 773 4720
Address for notices or communications to Party B:
Address: Gracechurch Card Funding (No.1) PLC
200 Aldersgate Street
London EC1A 4JJ
Attention: The Directors
Fax: *
(For all purposes)
(f) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent:
Not applicable
Party B appoints as its Process Agent:
Address: CLIFFORD CHANCE SECRETARIES LIMITED
200 Aldersgate Street
London EC1A 4JJ
(g) Offices. The provisions of Section 10(a) will apply to this Agreement.
(h) Multibranch Party. For the purpose of Section 10:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(i) Calculation Agent. The Calculation Agent is Barclays Bank PLC. All
calculations by the Calculation Agent (the "CA") shall be made in good
faith and through the exercise of the CA's commercially reasonable
judgment. If either Party A or Party B objects to any calculation made by
the CA, then Party A and Party B will negotiate in good faith to agree on
an independent leading dealer to make such calculation, and if they
cannot agree within three Business Days, they will each promptly choose
an independent leading dealer and instruct such dealers to agree on
another independent leading dealer to make such calculation. The
calculation of any such leading independent dealer will be binding absent
manifest error. The costs of such independent leading dealers will be
borne equally by Party A and Party B.
(j) Credit Support Document. Details of any Credit Support Document:
Party A: None.
Party B: The Trust Deed.
12
<PAGE>
(k) Credit Support Provider.
Party A: Not Applicable
Party B: Not Applicable
(l) Governing Law. This Agreement and each Confirmation will be governed by
and construed in accordance with the laws of England.
(m) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
5. OTHER PROVISIONS
(n) Neither Party A nor Party B will in any circumstances be required to pay
additional amounts in respect of any Indemnifiable Tax or be under any
obligation to pay to the other any amount in respect of any liability of
such other for or on account of any Tax and, accordingly, Section
2(d)(i)(4) and Section 2(d)(ii) of this Agreement shall not apply.
(o) Section 6(b)(ii) is hereby amended to read in its entirety as follows:
Transfer to Avoid Termination Event
(1) If an Illegality under Section 5(b)(i)(1) occurs and there is only
one Affected Party, the Affected Party will, as a condition to its
right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require such
party to incur a loss, excluding immaterial, incidental expenses)
to transfer within 20 days after it gives notice under Section
6(b)(i) all its rights and obligations under this Agreement in
respect of the Affected Transactions to (A) in the case of Party
A, another of its Officers or Affiliates and (B) in the case of
Party B, another of its Offices or Affiliates, if any, or another
company so that such Termination Event ceases to exist. If the
Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day
period, whereupon the other party may effect such a transfer
within 30 days after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii)(1) will
be subject to and conditional upon the prior written consent of
the other party, which consent will not be withheld if such other
party's policies in effect at such time would permit it to enter
into transactions with the transferee on the terms proposed.
[(2)] [Others].
[(3)] No transfer or substitution pursuant to this Section 6(b)(ii)
shall occur unless and until the Trustee has received the written
affirmation of each of Standard & Poor's and Moody's that such
transfer or substitution shall not adversely affect the then-
current ratings of the Class A Notes.
(p) Section 6(d)(i) is hereby amended to read in its entirety as follows:
Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, the Calculation Agent shall make
computations of the amounts owing pursuant to Section 6(e) and will
provide to each party a statement (1) showing, in reasonable detail, such
calculations and specifying the net amount payable by the applicable
party pursuant to Section 6(e) and (2) giving details of the relevant
account to which any amount payable is to be paid.
(q) Section 7 is hereby amended to read in its entirety as follows:
Except as stated under Section 6(b)(ii), as provided in the Schedule or
as provided in this Section 7, and except for the assignment by way of
security in favour of the Trustee under the Trust Deed, neither Party A
nor Party B is permitted to assign, novate or transfer as a whole or in
party any of its rights, obligations or interests under this Agreement.
Party A may transfer is rights and obligations under this Agreement (but,
not its rights only) to another of Party A's Offices, branches or
Affiliates (the "Transferee") on ten Business Days' prior written notice,
provided that (i) Party A delivers an opinion of independent counsel of
recognised standing in form and substance satisfactory to the Trustee
confirming that as at the date of such transfer the Transferee will not,
as a result of such transfer, be required to withhold or deduct on
account of tax under this Agreement, (ii) a Termination Event or Event of
Default does not occur under this Agreement as a result of such transfer
and (iii) the Trustee has received written affirmation of Standard &
Poor's and Moody's (or their successors) that such transfer shall not
adversely affect the then-current ratings of the Class A Notes.
(r) Additional Representations. Section 3 is hereby amended by adding at the
end thereof the following Subparagraphs:
(g) It is entering into this Agreement, any Credit Support Document to
which it is a party and any other documentation relating to this
Agreement as principal (and not as agent or in any other capacity,
fiduciary or otherwise).
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(s) Relationship Between Parties. Each party will be deemed to represent to
the other party on the date which it enters into this Agreement that
(absent a written agreement between the parties duly executed by each of
them that expressly imposes affirmative obligations to the contrary):
(i) Non-Reliance. It is acting for its own account, and it has made
its own independent decisions to enter into this Agreement and as
to whether this Agreement is appropriate or proper for it based
upon its own judgement and upon advice from such advisers as it
has deemed necessary. It is not relying on any communication
(written or oral) of the other party as investment advice or as a
recommendation to enter into this Agreement; it being understood
that information and explanations related to the terms and
conditions of this Agreement shall not be considered investment
advice or a recommendation to enter into this Agreement. No
communication (written or oral) received from the other party
shall be deemed to be an assurance or guarantee as to the expected
results of this Agreement.
(ii) Assessment and Understanding. It is capable of assessing the
merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the
terms, conditions and risks of this Agreement. It is also capable
of assuming, and assumes, the risks of this Agreement.
(iii) Status of Parties. The other party is not acting as a fiduciary
for or as adviser to it in respect of this Agreement.
(t) Amendments. Section 9(b) of this Agreement is hereby amended to read:
Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing and executed by each of the
parties and approved by the Trustee; provided, however, that all such
amendments, modifications or waivers shall require the written
affirmation of each of Standard & Poor's and Moody's that such
amendments, modifications or waivers shall not adversely affect the then
current ratings of the Class A Notes.
(u) Confirmations. Each Confirmation supplements, forms part of, and will be
read and construed as one with this Agreement.
(v) Non-Petition. Only the Trustee may pursue the remedies available under
the general law or under this Agreement, the Trust Deed and the Notes to
enforce the rights of Party A, and Party A shall not be entitled to
proceed directly against Party B unless the Trustee, having become bound
to proceed in accordance with the terms of the Trust Deed, fails or
neglects to do so within a reasonable period and such failure or neglect
is continuing provided always that, for the avoidance of doubt, the
foregoing shall not prevent Party A from exercising any right to
terminate this Agreement pursuant to the provisions hereof. The Trustee
having realised the security constituted by or pursuant to the Trust Deed
and distributed the net proceeds in accordance with Condition 3 of the
Terms and Conditions of the Class A Notes and the Trust Deed, Party A may
not take any further steps against Party B to recover any sum still
unpaid under the Trust Deed or under this Agreement and Party B's
liability for any sum still unpaid shall be extinguished. In particular,
Party A shall not be entitled to petition or take any other step for the
winding-up of Party B or for the purpose of commencing or sustaining a
case against Party B under any bankruptcy, insolvency, conservatorship,
receivership or similar law or appointing a conservator, receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of Party B or any substantial part of its property, provided
that the Trustee and/or Party A may prove or lodge a claim in the
liquidation of Party B initiated by another party and provided further
that the Trustee and Party A may take proceedings to obtain a declaration
or similar judgment or order as to the obligations and liabilities of
Party B under this Agreement. [to conform to other documents].
(w) Additional Definitions. Terms defined or referred to in the Trust Deed
shall bear the same respective meaning herein.
(x) 1991 ISDA Definitions. Reference is hereby made to the 1991 ISDA
Definitions (as supplemented by the 1998 Supplement) and as amended by
the 1998 ISDA Euro Definitions) (the "Definitions"), published by the
International Swaps and Derivatives Association, Inc., which are hereby
incorporated by reference herein.
(y) Section 2(b) is hereby amended to read in its entirety as follows:
Change of Account. Party A may change its account for receiving payment
or delivery by giving notice to Party B at least 10 Local Business Days
prior to the scheduled date for payment or delivery to which such change
applies unless Party B gives timely notice of a reasonable objection to
such change. Party B may change its account for receiving payment or
delivery by giving notice to Party A at least 10 Local Business Days
prior to the scheduled date for payment or delivery to which such change
applies unless Party A gives timely notice of a reasonable objection to
such change.
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(z) Payments from Party B. Notwithstanding anything contained in this
Agreement to the contrary, any amount required to be paid by Party B
pursuant to this Agreement will be payable only to the extent and in
accordance with the priority provided in the Trust Deed.
(aa) Optional Transfer and Maintaining Rating of the Notes. If any rating in
respect of any of (I) Party A, or (II) any Rating Support (as defined
below) is:
(iv) downgraded or withdrawn by Standard & Poor's; or
(v) downgraded or withdrawn by Moody's;
(either of (i) or (ii) a "Party A Rating Reduction")
then, immediately upon such Party A Rating Reduction
(1) Party A (acting reasonably) shall determine, or either Standard &
Poor's or Moody's shall indicate, that as a direct consequence of
such Party A Rating Reduction, the then current rating of the
Class A Notes could be adversely affected, then
(2) Party A shall immediately consult with the relevant rating agency
and if such rating agency confirms that as a direct consequence of
the Party A Rating Reduction the then rating of the Class A Notes
is or will be adversely affected, then
(3) Party A shall thereupon use its best efforts (subject to the
proviso at the end of the penultimate sentence of this paragraph
(n)) to assist Party B in ensuring (if necessary) that, within
thirty days of such Party A Rating Reduction (with the prior
written confirmation of each rating agency (or agencies, as
applicable) carrying out the Party A Rating Reduction) all
necessary actions are taken to maintain the rating of the Class A
Notes at the rating that would subsist but for the Party A Rating
Reduction or, in the case of an immediate adverse effect on the
rating of the Class A Notes, to restore the rating of the Class A
Notes to the rating that existed immediately prior to such Party A
Rating Reduction. These efforts shall include (A) obtaining a
third party, acceptable to Party B, to guarantee the obligations
of Party A under this Agreement or to whom the obligations under
this Agreement may be transferred or (B) posting collateral (and,
in the event the Party A Rating Reduction is carried out by
Standard & Poor's, such posting of collateral shall be in
accordance with the Standard & Poor's interest rate and currency
swap criteria dated January 1999 for calculating swap collateral
(including all mark-to-market and volatility buffer calculations
set forth therein), as such criteria may be amended, supplemented
or replaced from time to time) or (C) any other action as Party A,
in its sole discretion, deems to be reasonably necessary (and any
of (A), (B) or (C) called "Rating Support") to assist Party B in
maintaining the rating of the Class A Notes or (in the event the
Class A Notes have been downgraded) in restoring the rating of the
Class A Notes to the rating that existed immediately prior to such
Party A Rating Reduction, provided that if Rating Support cannot
be completed despite the exercise of Party A's best efforts as
outlined above, Party A shall nonetheless post collateral as
specified in (B) above. In the event that any rating in respect of
Party A is placed under review for possible downgrade or placed
under review for possible withdrawal by Moody's, then Party A
shall promptly send written notice of such fact to Moody's.
[(bb) Pari Passu. The following Section 3(a)(vi) shall be inserted after
Section 3(a)(v):
(vi) Pari Passu. Party A represents and warrants to Party B that its
payment obligations hereunder rank and will rank at all times at
least pari passu in all respects with all of its unsecured
obligations (except for those which are preferred by operation of
law).]
(cc) Inconsistency. In the event of any inconsistency among or between any of
the following documents, the relevant document first listed below shall
govern.
(vi) Confirmation;
(vii) Schedule;
(vii) Definitions;
(ix) Sections 1 through 14 of this Agreement.
(dd) Telephone Recording. Each party to this Agreement acknowledges and agrees
to the tape recording of conversations between the parties to this
Agreement whether by one or other or both of the parties and that any
such tape recordings may be submitted in evidence to any court or legal
proceedings for the purpose of establishing any matters relating to this
Agreement.
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(ee) Payments made by either party to this Agreement pursuant to this
Agreement will be made in accordance with the provisions of the [Trust
and cash Management Agreement] dated * 1999 between, inter alios, the
parties hereto.
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorised officers as of * 1999 effective as of * 1999.
BARCLAYS BANK PLC
By:
Name:
Title:
Date:
GRACECHURCH CARD FUNDING (NO.1) PLC
By:
Name:
Title:
Date:
16
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form F-1 (333-
10970) of our report dated 14 October 1999 relating to the balance sheet of
Barclaycard Funding PLC, which appears in such Registration Statement. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
PricewaterhouseCoopers
London, 20 October 1999
1
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form F-1 (333-
10970) of our report dated 14 October 1999 relating to the balance sheet of
Gracechurch Card Funding (No.1) PLC, which appears in such Registration
Statement. We also consent to the reference to us under the heading "Experts"
in such Registration Statement.
PricewaterhouseCoopers
London, 20 October 1999
2
