CLIFFORD CHANCE
Draft Date: 15 October 1999
[o] November 1999
Barclays bank plc
as Lender
GRACECHURCH CARD FUNDING (NO. 1) PLC
as Issuer
- and -
THE BANK OF NEW YORK
as Note Trustee
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EXPENSES LOAN AGREEMENT
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CONTENTS
Clause Page
1. Definitions.............................................................1
2. The Facility............................................................5
3. Interest................................................................5
4. Payments................................................................5
5. Repayment...............................................................5
6. Prepayment..............................................................6
7. Representations Of The Issuer...........................................6
8. Enforcement Event.......................................................6
9. Enforcement And Subordination...........................................6
10. Notices.................................................................7
11. Fees....................................................................8
12. Invalidity..............................................................8
13. Assignment And Variation................................................8
14. Remedies And Waivers....................................................8
15. Information, Benefit And Variation......................................8
16. Section 349 Bank........................................................9
17. Counterparts............................................................9
18. Entire Agreement........................................................9
19. Governing Law And Jurisdiction..........................................9
SCHEDULE 1 MANDATORY COSTS..........................................11
THIS EXPENSES LOAN AGREEMENT is made on [o] November 1999
BETWEEN:
(1) BARCLAYS BANK PLC, a company incorporated in England and Wales having
its registered office at 54 Lombard Street, London, EC3P 3AH (the
"Lender");
(2) GRACECHURCH CARD FUNDING (No.1) PLC, a company incorporated in England
and Wales having its registered office at 200 Aldersgate Street, London,
EC1A 4JJ (the "Issuer"); and
(3) THE BANK OF NEW YORK whose London Branch is at One Canada Square, London
E14 5AL (the "Note Trustee", which expression shall, whenever the
context so admits, include any other trustee or trustees for the time
being pursuant to the Trust Deed referred to below).
WHEREAS:
(A) The Issuer proposes to issue Notes pursuant to a trust deed dated the
Closing Date between the Issuer and the Note Trustee (the "Trust Deed").
(B) The Lender is willing to advance funds to the Issuer, to be used to meet
certain expenses incurred by the Issuer in regard to the issue of the
Notes, all on the terms and subject to the conditions contained herein.
(C) The Note Trustee is the trustee for the holders of the Notes.
IT IS HEREBY AGREED as follows:-
1. Definitions
1.1 In this Agreement and in the Recitals hereto, except so far as the
context otherwise requires:-
"Advance" shall have the meaning set out in Clause 2;
"Barclaycard" means Barclays Bank PLC, acting through its business unit
"Barclaycard";
"Barclays Capital" means Barclays Bank PLC, acting through its investment
banking unit, Barclays Capital;
"Business Day" shall mean any day other than a Saturday, a Sunday or a day on
which banking institutions in London, England are authorised or obliged by law
or executive order to be closed;
"Closing Date" shall mean 15 November 1999 or such other date as shall be agreed
between all relevant parties for the closing of the issue of the Notes;
"Conditions" means the terms and conditions applicable to the Notes in the form
or substantially in the form set out in the Seventh Schedule of the Trust Deed
and any reference in these presents to a particular numbered Condition shall be
construed accordingly;
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"Declaration of Trust and Cash Management Agreement" means the declaration of
trust and cash management agreement dated on or about the Closing Date between
the Receivables Trustee and Barclaycard;
"Deed of Charge" means the deed of charge dated on or about the Closing Date
between the Issuer, the Note Trustee and the Lender;
"Depositary Agreement" means the depositary agreement dated on or about the
Closing Date and made between the Issuer, the Depository Trust Company as
depositary and the Note Trustee;
"Enforcement Notice" means a notice given by the Note Trustee to the Issuer
under Condition 9 of the Notes;
"Excess Spread" has the meaning given to it in the Series 99-1 Supplement;
"Expenses Loan" means the principal amount of the Advance from time to time
outstanding as such amount is reduced from time to time by repayments hereunder;
"Facility" means the subordinated expenses loan facility the terms and
conditions of which are set out in this Agreement;
"Final Repayment Date" means the Interest Payment Date on which the Issuer makes
the final payment of interest and principal in respect of the Notes;
"Interest Payment Date" means the 15th day of each calendar month, Provided that
the first Interest Payment Date shall fall on 15 January 2000;
"Interest Period" shall mean, for the purposes of this Agreement with respect to
any Interest Payment Date, the period from and including the Interest Payment
Date immediately preceding such Interest Payment Date to but excluding such
Interest Payment Date; Provided that the initial Interest Period shall commence
on and include the Closing Date and end on but exclude 15 January 2000;
"Issuer's Account" shall mean the account with Barclays Bank PLC at 54 Lombard
Street, London, EC3P 3AH with account number [o];
"LIBOR" shall mean, for any Interest Period, the London interbank offered rate
for one-month sterling deposits determined by or on behalf of the Lender for
each Interest Period on the following basis:
(i) on the first day of the Interest Period for which the rate will apply
(or if such day is not a Business Day, the next succeeding Business
Day), the offered quotation to leading banks in the London Interbank
Market for one-month sterling deposits by reference to the display
designated as the British Bankers Association LIBOR Rates as quoted on
the Bridge/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
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information on such service as may replace the Bridge/Telerate Monitor)
as at or about 11.00 a.m. (London time) on that date (the "Screen
Rate");
(ii) if, on the relevant date, the Screen Rate does not appear on the Reuter
Monitor Money Rates Service page or the Telerate Screen page, as
aforesaid, the Lender will:
(A) request the principal London office of each of [o], Barclays
Bank PLC, [o] and [o] or any duly appointed substitute reference
bank(s) as may be appointed by the Lender (together the
"Reference Banks") to provide the Lender with its offered
quotation to leading banks in the London Interbank Market for
one-month sterling deposits as at approximately 11.00 a.m.
(London time) on the relevant date in question and in an amount
that is representative for a single transaction in that market
at that time; and
(B) determine the arithmetic mean (rounded upwards to four decimal
places) of such quotations; and
(iii) if on the relevant 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 upwards to four decimal places) of the offered
quotations of those Reference Banks providing the offered quotations;
(iv) if fewer than two such quotations are provided by the Reference Banks as
requested, the Lender will determine the arithmetic mean (rounded
upwards to four decimal places) of the rates quoted by major banks in
London, selected by the Lender, at approximately 11.00 a.m. (London
time) on the first day of the relevant Interest Period for loans in
pounds sterling to leading European banks for a period equal to the
relevant Interest Period and in amount that is representative for a
single transaction in that market at that time,
Provided, that if the Lender is unable to determine the Screen Rate or, as the
case may be, the arithmetic mean in accordance with provisions in relation to
any Interest Period, LIBOR during such Interest Period will be the Screen Rate
or, as the case may be, the arithmetic mean last determined in relation to this
Agreement in respect of a preceding Interest Period;
"Manager" means Barclays Capital in its capacity as manager for the issue of the
Notes;
"Mandatory Cost Rate" means the rate determined in accordance with Schedule 1
(Mandatory Costs);
"Margin" means [o] per cent. per annum;
"Notes" means the (pound)[o] Class A1 Asset Backed Floating Rate Notes due
November 2002, Euro [o] Class A2 Asset Backed Floating Rate Notes due November
2002, $[o] Class A3 Asset Backed Floating Rate Notes due November 2002, $[o]
Class B Asset Backed Floating Rate Notes due November 2002, and $[o] Class C
Asset Backed Floating Rate Notes due November 2002 constituted by the Trust
Deed;
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"Paying Agency and Agent Bank Agreement" means the paying agency and agent bank
agreement dated on or about the Closing Date between the Issuer, the Lender, in
its capacity as Agent Bank, and The Bank of New York;
"Rapid Amortisation Period" has the meaning given to it in the Series 99-1
Supplement;
"Receivables Securitisation Agreement" means the receivables securitisation
agreement dated between Barclaycard and the Receivables Trustee;
"Receivables Trustee" means Gracechurch Receivables Trustee Limited as
receivables trustee pursuant to the Declaration of Trust and Cash Management
Agreement and its permitted successors;
"Regulated Amortisation Period" has the meaning given to it in the Series 99-1
Supplement;
"Relevant Documents" means the Paying Agency and Agent Bank Agreement, the
Depositary Agreement, the Trust Deed, the Declaration of Trust and Cash
Management Agreement, the Series 99-1 Supplement, the Receivables Securitisation
Agreement, this Agreement, the Subscription Agreements and any mandate or other
agreement relating to the Series 99-1 Distribution Account;
"Repayment Amount" has the meaning given to it in Clause 5.1 of this Agreement;
"Repayment Date" has the meaning given to it in Clause 5.1 of this Agreement;
"Series 99-1 Distribution Account" means a bank account in the name of the
Issuer to be used in accordance with the provisions of the Series 99-1
Supplement;
"Series 99-1 Supplement" means the supplement for Series 99-1 dated the Closing
Date between, inter alios, the Receivables Trustee and the MTN Issuer;
"Subscription Agreements" means each of the several subscription agreements for
the Notes dated [o] November 1999 between, inter alios, the Issuer, Barclaycard,
the managers named therein and the Receivables Trustee; and
"Trust Deed" means the trust deed for the Notes dated on or about the Closing
Date between the Note Trustee and the Issuer.
1.2 Terms defined in the Trust Deed shall, unless otherwise defined herein
or the context otherwise requires, bear the same meanings herein.
1.3 The headings in this Agreement shall not affect its interpretation.
1.4 Words denoting the singular number only shall include the plural number
also and vice versa; words denoting one gender only shall include the
other genders and words denoting persons only shall include firms and
corporations and vice versa.
1.5 Save where the contrary is indicated, any reference in this Agreement to
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
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may have been, or may from time to time be amended, varied, novated or
supplemented.
2. The Facility
Simultaneously with the completion of the issue of the Notes on the
Closing Date, the Lender will advance to the Issuer for the credit of
the Issuer's Account an amount of (pound)[ ] (the "Advance") of which
(pound)[ ] will be applied to meet certain costs and expenses to the
Issuer arising in respect of the issue of Notes. Any amount of the
Facility remaining after the Advance has been made shall be cancelled.
3. Interest
3.1 The period for which the Advance is outstanding hereunder shall be
divided into periods which shall correspond with the Interest Periods.
3.2 Subject to Clause 8, the Issuer shall pay interest on the Advance, at
the rate per annum which is the aggregate of (i) the Margin, (ii) LIBOR
for the relevant Interest Period and (iii) the Mandatory Cost Rate in
respect thereof. Interest will accrue from day to day and will be
calculated on the basis of actual days elapsed and a year of 365 days
(or 366 days if the relevant Interest Period ends in a leap year) and
will be (subject to Clause 8) payable in arrear on each Interest Payment
Date.
3.3 Any payments made by the Issuer under this Agreement shall be paid after
deduction of withholding for tax where such deduction or withholding is
required by law.
3.4 The Lender shall promptly notify the Issuer of each determination of
LIBOR made pursuant to this Agreement.
3.5 A statement made by the Lender as to any amount of interest payable
pursuant to this Clause shall in the absence of manifest error, be
conclusive.
4. Payments
All payments required to be made by the Issuer hereunder shall be
calculated without reference to any set-off or counterclaim and shall be
made in sterling in immediately available funds. If any sum falls due
hereunder on a day which is not a Business Day it shall be paid on the
next Business Day and no additional interest will be payable in respect
of such delay.
5. Repayment
Subject to Clause 8 and Clause 5.2 below, the Advance shall be repaid in
full on the Final Repayment Date.
To the extent insufficient funds are available in the Series 99-1
Distribution Account on the Final Repayment Date to pay in full the
principal amount then due (after taking into account all other payments
to be made therefrom on such date in accordance with the Trust Deed),
the Advance will be re-paid on the next and each subsequent Interest
Payment Date to the extent funds are available for such purpose.
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6. Prepayment
The Issuer may not prepay the whole or any part of the Expenses Loan.
7. Representations of the Issuer
The Issuer represents and warrants to the Lender on the date hereof
that:
(a) the Issuer is a company duly authorised under the laws of the
England;
(b) the Issuer has full power and authority to deliver and perform
this Agreement, and has taken all necessary action to authorise
the execution, delivery and performance by it of this Agreement;
and
(c) this Agreement has been duly executed and delivered by the
Issuer and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms subject to bankruptcy,
insolvency, reorganisation, receivership and other laws relating
to, or affecting generally, the enforcement of creditors' rights
and remedies as the same may be applied in the event of the
bankruptcy, insolvency, reorganisation, receivership or
liquidation or a similar event of the Issuer or a moratorium
applicable to the Issuer and to general principles of equity.
8. Enforcement Event
If the Note Trustee serves an Enforcement Notice on the Issuer pursuant
to the Trust Deed it shall forthwith provide a copy thereof to the
Lender and the Expenses Loan, together with all interest thereon, shall,
subject always to Clause 9, become immediately due and repayable.
9. Enforcement and Subordination
9.1 The Lender agrees with the Note Trustee and the Issuer to be bound by
the terms of the Ninth Schedule to the Trust Deed (relating to priority
of payments) and in particular confirms that no sum, whether in respect
of principal or interest or otherwise relating to the Expenses Loan,
shall be due and payable by the Issuer except in accordance with the
Deed of Charge and the Ninth Schedule to the Trust Deed unless and until
all sums thereby required to be paid or provided for in priority thereto
have been paid or will be discharged in full.
9.2 The Lender shall not take any steps for the purpose of receiving any
debts whatsoever owing to it by the Issuer in connection with this
Agreement or enforcing any rights arising out of this Agreement against
the Issuer or procuring the winding-up, administration or liquidation of
the Issuer in respect of any of its liabilities whatsoever.
9.3 The Lender agrees that its rights against the Issuer under this
Agreement are limited to the extent that the Lender will not take any
action or proceedings against the Issuer to recover any amounts due and
payable by the Issuer to the Lender under this Agreement, except to the
extent that the Issuer has sufficient assets to meet the Lender's claim
in full having taken into account all other liabilities both actual and
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contingent of the Issuer which rank in priority to its liabilities to
the Lender under this Agreement and so that the Issuer shall not be
obliged to make any payment to the Lender hereunder if and to the extent
that the making of such payment would cause the Issuer to be or become
unable to pay its debts within the meaning of Section 123 of the
Insolvency Act 1986.
9.4 Without prejudice to the foregoing provisions of this Clause, the Lender
hereby covenants with the Issuer and the Note Trustee that if, whether
in the liquidation of the Issuer or otherwise (and notwithstanding the
provisions of this Clause 9.4), any payment (which shall include any
set-off, combination or withholding) is received by it in respect of the
Expenses Loan or any interest thereon other than in accordance with the
Trust Deed the amount so paid shall be paid over to the Note Trustee
forthwith upon receipt Provided, however, that this Clause 9.4 shall
have effect only to the extent that it does not constitute or create and
is not deemed to constitute or create any mortgage, charge or other
security interest of any kind, Provided, further, that as between the
Note Trustee and the Issuer or any liquidator thereof such amounts paid
under this Clause 9.4 shall be deemed to be paid and as between the
Lender and the Issuer or any liquidator thereof such amounts paid under
this Clause 9.4 shall be deemed not to have been paid.
9.5 The Lender hereby covenants with the Note Trustee that it will not set
off or claim to set off the Expenses Loan or any interest thereon or any
part of either thereof against any liability owed by it to the Issuer.
10. Notices
(i) Each communication to be made hereunder shall, unless otherwise
stated, be made in writing but, unless otherwise stated, may be
made by telex, facsimile or letter; and
(ii) 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 despatched and the appropriate answerback or identification
symbol received by the sender or (in the case of any
communications 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:
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(a) in the case of the Lender, to its address at 54 Lombard Street,
London EC3P 3AH for the attention of Brian Cook of the Corporate
Treasury Division;
(b) in the case of the Issuer, to its address appearing at the
beginning of this Agreement; and
(c) in the case of the Note Trustee, to its address appearing at the
beginning of this Agreement for the attention of Corporate Trust
Administration,
or to such other address or for the attention of such other person as
may from time to time be notified by either party to the other by
written notice in accordance with the provisions of this Clause.
11. Fees
Each of the parties hereto shall bear its own costs and expenses in
connection with the negotiation, preparation and execution of this
Agreement and no fees shall be payable in connection herewith.
12. Invalidity
If, at any time, any of the provisions of this Agreement are or become
invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired.
13. Assignment and Variation
Each of the parties hereto agree that the Lender may not assign its
rights hereunder and that the rights of the Issuer hereunder may be
assigned to the Note Trustee. No variation of this Agreement shall be
effective unless it is in writing and signed by or on behalf of each of
the parties hereto.
14. Remedies and Waivers
No failure to exercise, nor any delay in exercising, on the part of the
Issuer or the Lender, 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. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
15. Information, Benefit and Variation
15.1 The Lender shall provide to the Note Trustee such information and
evidence in respect of any dealing between the Issuer and the Lender
under this Agreement or otherwise as the Note Trustee may reasonably
request for the purpose of discharging the duties, trusts, powers,
authorities and discretions vested in the Note Trustee in or under the
Relevant Documents or by operation of law and the Issuer hereby waives
any right or duty of confidentiality which it may have or which may be
owed to it by the Lender in respect of such information and evidence.
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15.2 No variation of this Agreement shall be effective unless it is duly
executed and delivered by (or by some person duly authorised by) each of
the parties.
16. Section 349 Bank
The Lender warrants that it is a Bank as defined for the purposes of
Section 349(3)(a) of the Income and Corporation Taxes Act 1988 and will
be within the charge to United Kingdom corporation tax as respects all
amounts regarded as interest for United Kingdom tax purposes received by
it under this Agreement.
17. Counterparts
This Agreement may be executed in any number of copies, and by the
different parties hereto on the same or separate counterparts, each of
which shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement.
18. Entire Agreement
This Agreement constitutes the entire agreement between the parties in
respect of the subject matter hereof. Any previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement. Nothing in this Agreement, expressed or implied, is intended
to confer upon any party other than the parties hereto any rights,
remedies, obligations or liabilities under or by reason of this
Agreement.
19. Governing Law and Jurisdiction
19.1 This Agreement, shall be governed by, and is to be construed in
accordance with, English Law. 19.2 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.
19.3 Each party hereto irrevocably waives any objection which it might now or
hereafter have to the courts of England referred to above being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any dispute, 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.
19.4 Each party hereto (if it is not incorporated in England) irrevocably
appoints the person specified against it name on the execution pages
hereto 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
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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 signed and executed this Agreement
the day and year first above written.
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SCHEDULE 1
MANDATORY COSTS
1. The Mandatory Cost Rate is an addition to the interest rate to
compensate the Bank for the cost of compliance with the requirements of
the Bank of England and/or the Financial Services Authority (or, in
either case, any other authority which replaces all or any of its
functions).
2. On the first day of each Interest Period (or as soon as possible
thereafter) the Bank shall calculate the Mandatory Cost Rate as a
percentage rate in accordance with the formulae set out below.
3. The Mandatory Cost Rate will be calculated as follows:
(a) in relation to sterling Advances:
[OBJECT OMITTED]per cent. per annum
(b) in relation to Advances in any currency other than sterling:
[OBJECT OMITTED]per cent. per annum.
Where:
A is the percentage of eligible liabilities (assuming these to be
in excess of any stated minimum) which the Bank is from time to
time required to maintain as an interest free cash ratio deposit
with the Bank of England to comply with cash ratio requirements.
B is the percentage rate of interest (excluding the Margin and the
Mandatory Cost Rate) payable for the relevant Interest Period on
the Advance.
C is the percentage (if any) of eligible liabilities which the
Bank is required from time to time to maintain as interest
bearing special deposits with the Bank of England.
D is the percentage rate per annum payable by the Bank of England
to the Bank on interest bearing special deposits.
E is the rate of charge payable by the Bank to the Financial
Services Authority pursuant to the Fee Regulations (but, for
this purpose, ignoring any minimum fee required pursuant to the
Fee Regulations) and expressed in pounds per (pound)1,000,000 of
the Fee Base of the Bank.
For the purposes of this Schedule:
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(a) "eligible liabilities" and "special deposits" have the meanings
given to them from time to time under or pursuant to the Bank of
England Act 1998 or (as may be appropriate) by the Bank of
England;
(b) "Fee Regulations" means the Banking Supervision (Fees)
Regulations 1999 or such other law as may be in force from time
to time in respect of the payment of fees for banking
supervision; and
"Fee Base" has the meaning given to it, and will be calculated
in accordance with, the Fee Regulations.
In application of the above formulae, A, B, C and D will be
included in the formulae as percentages (i.e. 5 per cent. will
be included in the formula as 5 and not as 0.05). A negative
result obtained by subtracting D from B shall be taken as zero.
The resulting figures shall be rounded to four decimal places.
4. The Bank may from time to time, after consultation with the Borrower,
determine and notify to all parties any amendments or variations which
are required to be made to any of the formulae set out above in order to
comply with any change in law or any requirements from time to time
imposed by the Bank of England or the Financial Services Authority (or,
in either case, any other authority which replaces all or any of its
functions) and any such determination shall, in the absence of manifest
error, be conclusive and binding on all the parties hereto.
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LENDER
SIGNED for and on behalf of )
BARCLAYS BANK PLC )
ISSUER
SIGNED for and on behalf of )
GRACECHURCH CARD FUNDING )
(NO.1) PLC )
NOTE TRUSTEE
SIGNED for and on behalf of )
THE BANK OF NEW YORK )
Acting through its London Branch )
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