EXHIBIT 1.3
CLASS C GLOBAL NOTE CERTIFICATE
CUSIP:
ISIN:
IF THIS NOTE CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. (OR SUCH OTHER
PERSON AS MAY BE NOMINATED BY THE DEPOSITORY TRUST COMPANY ("DTC") FOR THE
PURPOSE) (COLLECTIVELY, "CEDE & CO.") AS NOMINEE FOR DTC, THEN, UNLESS THIS NOTE
CERTIFICATE IS PRESENTED BY AN AUTHORISED REPRESENTATIVE OF DTC TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE
CERTIFICATE ISSUED UPON REGISTRATION OF TRANSFER OR EXCHANGE OF THIS NOTE
CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. (OR SUCH OTHER NAME AS MAY
BE REQUESTED BY AN AUTHORISED REPRESENTATIVE OF DTC) AND ANY PAYMENT HEREUNDER
IS MADE TO CEDE & CO. (OR, AS THE CASE MAY BE, SUCH OTHER PERSON), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO. (OR, AS THE CASE MAY BE,
SUCH OTHER PERSON), HAS AN INTEREST HEREIN.
GRACECHURCH CARD FUNDING (NO. 2) PLC
(incorporated with limited liability under
the laws of England and Wales)
$50,000,000
CLASS C FLOATING RATE ASSET-BACKED NOTES DUE 2007
CLASS C GLOBAL NOTE CERTIFICATE
1. Introduction
This Class C Global Note Certificate is issued in respect of the
$50,000,000 Class C Floating Rate Asset-Backed Notes due 2007 (the
"CLASS C NOTES") of Gracechurch Card Funding (No. 2) PLC (the "ISSUER").
The Class C Notes are constituted by, are subject to, and have the
benefit of, a trust deed dated 24 October 2002 (as amended or
supplemented from time to time, the "TRUST DEED") between the Issuer and
The Bank of New York as trustee (the "TRUSTEE", which expression
includes all persons for the time being appointed trustee or trustees
under the Trust Deed) and are the subject of a Paying Agency and Agent
Bank Agreement dated 24 October 2002 (as amended or supplemented from
time to time, the "PAYING AGENCY AND AGENT BANK AGREEMENT") and made
between the Issuer, The Bank of New York as registrar (the "REGISTRAR",
which expression includes any successor registrar appointed from time to
time in connection with the Class C Notes), The Bank of New York as
principal paying agent, the other paying agents and the transfer agents
named therein and the Trustee.
2. References to Conditions
EXHIBIT 1.3
Any reference herein to the "CONDITIONS" is to the terms and conditions
of the Class C Notes attached hereto and any reference to a numbered
"CONDITION" is to the correspondingly numbered provision thereof.
3. Registered holder
This is to certify that:
CEDE & CO.
is the person registered in the register maintained by the Registrar in
relation to the Class C Notes (the "REGISTER") as the duly registered
holder (the "HOLDER") of the Class C Notes represented from time to time
by this Class C Global Note Certificate.
4. Promise to pay
The Issuer, for value received, hereby promises to pay to the Holder
such principal sum as is noted in the records of the custodian for The
Depository Trust Company (the "DTC CUSTODIAN" and "DTC", respectively)
as being the principal amount of this Class C Global Note Certificate
for the time being on [final maturity date] or on such earlier date or
dates as the same may become payable in accordance with the Conditions,
and to pay interest on such principal sum in arrear on the dates and at
the rate specified in the Conditions, together with any additional
amounts payable in accordance with the Conditions, all subject to and in
accordance with the Conditions.
5. Transfers in whole
Transfers of this Class C Global Note Certificate shall be limited to
transfers in whole, but not in part, to nominees of DTC or to a
successor of DTC or to such successor's nominee.
6. Exchange for Class C Individual Note Certificates
This Class C Global Note Certificate will be exchanged in whole (but not
in part) for duly authenticated and completed individual note
certificates ("CLASS C INDIVIDUAL NOTE CERTIFICATES") in substantially
the form (subject to completion) set out in the Sixth Schedule (Form of
Class C Individual Note Certificate) to the Trust Deed if any of the
following events occurs:
(a) the Notes become immediately due and repayable by reason of an
Event of Default; or
(b) DTC at any time notifies the Issuer that it is at any time
unwilling or unable to hold the Global Note Certificates or is
unwilling or unable to continue as or has ceased to be, a clearing
agency registered under the United States Securities and Exchange
Act of 1934 and in each case the Issuer is unable to locate a
qualified successor within 90 days of receiving such notification;
Such exchange shall be effected in accordance with paragraph 7
(Delivery of Class C Individual Note Certificates) below. The
Issuer shall notify the Holder
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EXHIBIT 1.3
of the occurrence of any of the events specified in paragraph (a)
and (b) above as soon as practicable thereafter.
7. Delivery of Class C Individual Note Certificates
Whenever this Class C Global Note Certificate is to be exchanged for
Class C Individual Note Certificates, such Class C Individual Note
Certificates shall be issued in an aggregate principal amount equal to
the principal amount of this Class C Global Note Certificate within five
business days of the delivery, by or on behalf of the Noteholders, DTC,
Euroclear and/or Clearstream, Luxembourg, to the Registrar of such
information as is required to complete and deliver such Class C
Individual Note Certificates (including, without limitation, the names
and addresses of the persons in whose names the Class C Individual Note
Certificates are to be registered and the principal amount of each such
person's holding) against the surrender of this Class C Global Note
Certificate at the Specified Office (as defined in the Conditions) of
the Registrar. Such exchange shall be effected in accordance with the
provisions of the Paying Agency and Agent Bank Agreement and the
regulations concerning the transfer and registration of Class C Notes
scheduled thereto (if any) and, in particular, shall be effected without
charge to any Holder or the Trustee, but against such indemnity as the
Registrar may require in respect of any transfer tax, governmental
charge or any cost or expense relating to insurance, postage,
transportation or any similar charge in connection with the delivery of
such Individual Note Certificates, which will be the sole responsibility
of the Issuer. No service charge will be made for any registration of
transfer or exchange of any Individual Note Certificate. In this
paragraph, "BUSINESS DAY" means a day on which commercial banks are open
for business (including dealings in foreign currencies) in the city in
which the Registrar has its Specified Office.
8. Conditions apply
Save as otherwise provided herein, the Holder of this Class C Global
Note Certificate shall have the benefit of, and be subject to, the
Conditions and, for the purposes of this Class C Global Note
Certificate, any reference in the Conditions to "NOTE CERTIFICATE" or
"NOTE CERTIFICATES" shall, except where the context otherwise requires,
be construed so as to include this Class C Global Note Certificate.
9. Notices
Notwithstanding Condition 14 (Notices), so long as this Class C Global
Note Certificate is held on behalf of DTC or any other clearing system
(an "ALTERNATIVE CLEARING SYSTEM"), notices to Holders of Class C Notes
represented by this Class C Global Note Certificate may be given by
delivery of the relevant notice to DTC or (as the case may be) such
Alternative Clearing System.
10. Legends
The statements set out in the legends above are an integral part of this
Class C Global Note Certificate and, by acceptance hereof, each Holder
of this Class C Global Note Certificate agrees to be subject to and
bound by such legends.
11. Determination of entitlement
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EXHIBIT 1.3
This Class C Global Note Certificate is evidence of entitlement only and
is not a document of title. Entitlements are determined by the Register
and only the Holder is entitled to payment in respect of this Class C
Global Note Certificate.
12. Authentication
This Class C Global Note Certificate shall not be valid for any purpose
until it has been authenticated for and on behalf of The Bank of New
York as registrar.
13. Governing law
This Class C Global Note Certificate is governed by, and shall be
construed in accordance with, English law.
AS WITNESS the manual or facsimile signature of a duly authorised person on
behalf of the Issuer.
GRACECHURCH CARD FUNDING (NO. 2) PLC
By:
..............................
[manual or facsimile signature]
(duly authorised)
ISSUED as of
AUTHENTICATED for and on behalf of
The Bank of New York
as registrar without recourse, warranty
or liability
By:
..............................
[manual signature]
(duly authorised)
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EXHIBIT 1.3
FORM OF TRANSFER
FOR VALUE RECEIVED .............................., being the registered holder
of this Class C Global Note Certificate, hereby transfers to...................
.................................................................................
............................................................
of..............................................................................
.................................................................................
....................................,
$ ..................................... in principal amount of the $50,000,000
Class C Asset-Backed Floating Rate Notes due [maturity] (the "CLASS C NOTES") of
Gracechurch Card Funding (No. 2) PLC (the "ISSUER") and irrevocably requests and
authorises The Bank of New York, in its capacity as registrar in relation to the
Class C Notes (or any successor to The Bank of New York, in its capacity as
such) to effect the relevant transfer by means of appropriate entries in the
register kept by it.
Dated: .......................................
By: .......................................
(duly authorised)
NOTES
(a) The name of the person by or on whose behalf this form of transfer is
signed must correspond with the name of the registered holder as it
appears on the face of this Class C Global Note Certificate.
(b) A representative of such registered holder should state the capacity in
which he signs, e.g. executor.
(c) The signature of the person effecting a transfer shall conform to any
list of duly authorised specimen signatures supplied by the registered
holder or be certified by a recognised bank, notary public or in such
other manner as the Registrar may require.
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EXHIBIT 1.3
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EXHIBIT 1.3
TERMS AND CONDITIONS OF THE NOTES
You are bound by and deemed to have notice of all of the provisions of the trust
deed, the paying agency and agent bank agreement, the deed of charge, the
expenses loan agreement and the swap agreements, which are applicable to you.
You can view drafts of those documents at the principal place of business of the
note trustee or the specified office of any of the paying agents.
14. Form, Denomination, Title and Transfer
(1) The notes are in global registered form. Transfers and exchanges of
beneficial interests in notes represented by global note certificates
are made in accordance with the rules and procedures of DTC, Euroclear
or Clearstream, Luxembourg, as applicable. The notes are being offered
in minimum denominations of $1,000.
(2) Global note certificates will be exchanged for individual note
certificates in definitive registered form only under certain limited
circumstances. If individual note certificates are issued, they will be
serially numbered and issued in an aggregate principal amount equal to
the principal amount outstanding of the relevant global note
certificates and in registered form only.
(3) The registrar will maintain a register in respect of the notes in
accordance with the provisions of the paying agent and agent bank
agreement. References in this section to a "holder" of a note means the
person in whose name such note is for the time being registered in the
register - or, in the case of a joint holding, the first named - and
"noteholder" will be construed accordingly. A "note certificate" will be
issued to each noteholder for its registered holding. Each note
certificate will be numbered serially with an identifying number which
will be recorded in the register.
(4) The registered owner of each note will - except as otherwise required by
law - be treated as the absolute owner of such note for all purposes.
This will be true whether or not it is overdue and regardless of any
notice of ownership, trust or any other interest therein, any writing on
the note certificate - other than the endorsed form of transfer - or any
notice of any previous loss or theft of the note certificate - and no
other person will be liable for so treating the registered owner.
(5) Subject to the provisions below, a note may be transferred upon
surrender of the relevant note certificate, with the endorsed form of
transfer duly completed, at the offices of the registrar or any transfer
agent specified in the paying agent and agent bank agreement, together
with such evidence as the registrar or transfer agent may reasonably
require to prove the title of the transferor and the authority of the
individuals who have executed the form of transfer. A note may not be
transferred, however, unless the principal amount of notes transferred
and - where not all of the notes held by a holder are being transferred
- the principal amount of the balance of notes not transferred are
authorised holdings. "Authorised holdings" means holdings of at least
$1,000. Where not all the notes represented by the surrendered note
certificate are the subject of the transfer, a new note certificate in
respect of the balance of the notes will be issued to the transferor.
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EXHIBIT 1.3
(6) Within five business days of surrender of a note certificate, the
registrar will register the transfer in question and deliver a new note
certificate of a like principal amount to the notes transferred to each
relevant holder at its office or the office of any transfer agent
specified in the paying agent and agent bank agreement or, at the
request and risk of any such relevant holder, by uninsured first class
mail - and by airmail if the holder is overseas - to the address
specified for the purpose by which commercial banks are open for
business, including dealings in foreign currencies, in the city where
the registrar or the relevant transfer agent has its specified office.
(7) The transfer of a note will be effected without charge by or on behalf
of the issuer, the registrar or any transfer agent but against such
indemnity as the registrar or transfer agent may require for any tax or
other duty of any nature that may be levied or imposed in connection
with the transfer.
(8) All payments on the notes are subject to any applicable fiscal or other
laws and regulations. Noteholders will not be charged commissions or
expenses on these payments.
(9) If the due date for payment of any amount on the notes is not a business
day in the place it is presented, noteholders will not be entitled to
payment of the amount due in that place until the next business day in
that place and noteholders will not be entitled to any further interest
or other payment as a result of that delay.
(10) If a noteholder holds individual note certificates, payments of
principal and interest - except in the case of a final payment that pays
off the entire principal on the note - will be made by U.S. dollar check
and mailed to the noteholder at the address shown in the register. In
the case of final redemption, payment will be made only when the note
certificate is surrendered. If the noteholder makes an application to
the registrar, payments can instead be made by transfer to a bank
account.
(11) If payment of principal on a note is improperly withheld or refused, the
interest that continues to accrue will still be payable as usual.
(12) The issuer can, at any time, vary or terminate the appointment of any
paying agent and can appoint successor or additional paying agents,
registrars or transfer agents. If the issuer does this it must ensure
that it maintains a paying agent in London, a paying agent in New York
and a registrar. The issuer will ensure that at least 30 days' notice of
any change in the paying agents, the registrar or the transfer agent or
their specified offices is given to noteholders in accordance with
condition number 14.
(13) Subject as described earlier about the deferral of interest, if payment
of interest on a note is not paid for any other reason when due and
payable, the unpaid interest will itself bear interest at the applicable
rate until both the unpaid interest and the interest on that interest
are paid.
15. Status
Payments on the notes will be made equally amongst all notes of the same class.
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EXHIBIT 1.3
16. 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 series 02-1 medium term note
certificate;
(2) a charge by way of first fixed sub-charge of all of the issuer's right,
title and interest in the security interest created in favour of the
security trustee in respect of the series 02-1 medium term note
certificate;
(3) an assignment by way of first fixed security of the issuer's right,
title, interest and benefit in and to the issuer related documents
except the trust deed and the deed of charge;
(4) 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
02-1 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
(5) a first floating charge over the issuer's business and assets not
charged under (1), (2), (3) or (4) 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:
o 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 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 issuer
related documents and in enforcing or perfecting title to the security
together with interest due on these amounts;
o in payment or satisfaction of all costs, charges, liabilities, expenses,
losses, damages, proceedings, claims and demands of the swap
counterparty under the swap agreements;
o in payment of all amounts due and unpaid, following the applications in
the first bullet point above, to the note trustee or anyone appointed by
them under the trust deed; and
o towards payment of amounts due and unpaid on the class A notes, to
interest then to principal after having paid any amounts due to the swap
counterparty under the terms the class A swap agreement;
o towards payment of amounts due and unpaid on the class B notes, to
interest then to principal after having paid any amounts due to the swap
counterparty under the terms of class B swap agreement;
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EXHIBIT 1.3
o towards payment of amounts of interest due and unpaid under the terms of
the expenses loan agreement;
o towards payment of amounts due and unpaid on the class C notes, to
interest then to principal having paid any amounts due to the swap
counterparty under the terms of the class C swap agreement;
o after the notes have been paid in full, towards payment of amounts of
principal due and unpaid under the terms of the expenses loan agreement;
o towards payment of any sums that the issuer must pay to any tax
authority;
o towards payment of any sums due to third parties under obligations
incurred in the course of the issuer's business;
o towards payment of any dividends due and unpaid to shareholders of the
issuer; and
o 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 condition number 9 below. If an event of default occurs, the
redemption of notes will not necessarily be accelerated as described in
condition number 6 below.
The issuer will enter into three swap agreements, the material terms of which
are described under the heading "The Swap Agreements" in this prospectus.
17. 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 note
trustee:
o 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 business, assets or revenues, including uncalled
capital;
o 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, exercise or enforce any of its rights and perform and
observe its obligations under the notes, the deed of charge, the
paying agency and agent bank agreement, the trust deed, the
expenses loan agreement, each swap agreement, the series 02-1
medium term note certificate and the related purpose trust, the
corporate services agreement, the underwriting agreement, the bank
agreement and any bank mandate regarding the Series 02-1 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
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EXHIBIT 1.3
(3) perform any act incidental to or necessary in connection with (1)
or (2) above.
o have any subsidiaries, subsidiary business, business of any other kind,
employees, premises or interests in bank accounts other than the Series
02-1 Issuer Account unless the account is charged to the note trustee on
acceptable terms;
o have any indebtedness, other than indebtedness permitted under the terms
of its articles of association or any of the issuer related documents;
o give any guarantee or indemnity for any obligation of any person;
o repurchase any shares of its capital stock or declare or pay any
dividend or other distributions to its shareholders;
o consolidate with or merge with or into any person or liquidate or
dissolve on a voluntary basis;
o be a member of any group of companies for the purposes of value added
tax;
o 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
o offer to surrender to any company any amounts which are available for
surrender by way of group relief.
18. Interest
Each note will bear interest on its principal amount outstanding from, and
including, the closing date. Interest on the notes is payable in arrear in U.S.
dollars on each interest payment date.
If there is a shortfall between the amounts received by the issuer from the swap
counterparty or otherwise and the amount of interest due on any class of notes
on that interest payment date, that shortfall will be borne by each note in that
class in a proportion equal to the proportion that the interest outstanding on
the relevant note bears to the total amount of interest outstanding on all the
notes of that class. This will be determined on the interest payment date on
which the shortfall arises. Payment of the shortfall will be deferred and will
be due on the next interest payment date on which funds are available to the
issuer, or, if earlier, the October 2009 interest payment date, from payments
made to it from the swap counterparty or otherwise on that interest payment
date, to make the payment. The shortfall will accrue interest at the rate
described for each class of note below plus a margin of 2.0 per cent. per annum,
and payment of that interest will also be deferred and will be due on the next
interest payment date on which funds are available to the issuer to make the
payment or, if earlier, on the October 2009 interest payment date.
Each period beginning on, and including, the closing date or any interest
payment date and ending on, but excluding, the next interest payment date is
called an interest period. The first interest payment for the notes will be made
on 15 December 2002 for the interest period from and including the closing date
to but excluding 15 December 2002.
Interest will stop accruing on any part of the principal amount outstanding of a
note from the date it is due to redeem unless payment of principal is improperly
withheld or refused. If this
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EXHIBIT 1.3
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:
o 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
o the day which is seven days after the principal paying agent or the note
trustee has notified the relevant class of noteholders, in accordance
with condition number 14, 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 one-month U.S. dollar deposits or, in the case of the first
interest period, the linear interpolation of one-month and two-month
U.S. dollar deposits.
This will be determined by reference to the British Bankers Association
LIBOR Rates display as quoted on the Moneyline Telerate Service display
page designated 3750. If the display page designated 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. If there is more than one service displaying the information,
the one previously approved in writing by the note trustee will be used;
In each case above, the determination will be made as at or about 11.00
a.m., London time, on that date. These are called the screen rates for
the respective classes.
A "quotation date" means the second business day before the first day of
an interest period.
(2) if, on any quotation date, the screen rate is unavailable, the agent
bank will:
o request the principal London office of each of four major banks - called
"reference banks" - in the London interbank market selected by the agent
bank to provide the agent bank with its offered quotation to leading
banks of the equivalent of the screen rate on that quotation date in an
amount that represents a single transaction in that market at that time;
and
o calculate the arithmetic mean, rounded upwards to four decimal places,
of those quotations;
(1) if on any quotation 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
(2) if fewer than two reference banks provide quotations, the agent bank
will determine the arithmetic mean, rounded upwards to four decimal
places of the rates quoted by major banks in London, selected by the
agent bank at approximately 11.00 a.m. London time
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EXHIBIT 1.3
on the relevant quotation date, to leading 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 loans in U.S.
dollars.
The rate of interest for each interest period for the class A notes will be the
sum of:
o 0.12 per cent. per annum; and
o 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:
o 0.45 per cent. per annum; and
o 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:
o 1.15 per cent. per annum; and
o 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), (3) and (4) the rates of interest for any
interest period will be as follows:
o for the class A notes the rate will be the sum of 0.12 per cent. per
annum and the screen rate or arithmetic mean last determined for the
class A notes;
o for the class B notes the rate will be the sum of 0.45 per cent. per
annum and the screen rate or arithmetic mean last determined for the
class B notes; and
o for the class C notes the rate will be the sum of 1.15 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 quotation 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
note during that interest period, multiplying the product by the actual number
of days in that interest period divided by 360 and rounding to the nearest U.S.
dollars 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 and rounding the nearest
U.S. dollars 0.01, half a cent being rounded upwards.
If, on any interest payment date, the amount available to the issuer, from the
swap counterparty or otherwise is insufficient to pay in full the amount of
interest due on a class of notes, any
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EXHIBIT 1.3
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 that 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 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 condition
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 as
described above 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 as
described above, the note trustee, or its appointed agent, without accepting any
liability for it, will make the determination or calculation as described above.
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.
19. 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 series 02-1 scheduled redemption date, unless there is a
shortfall between the amount in the Series 02-1 Issuer Account and the total
amount payable to the swap counterparty under the class A swap agreement. If
there is such a shortfall, the class A notes will be redeemed proportionately
with the amount in the Series 02-1 Issuer Account after being exchanged under
the terms of the class A swap agreement. The Rapid Amortisation Period will then
begin. The payments will be made in no order of preference and proportionately
between all class A notes.
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 02-1 scheduled redemption date unless there is a
shortfall between the amount in the Series 02-1 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 swap agreement. If
there is such a shortfall, the class B notes will be redeemed proportionately
with the amount in the Series 02-1 Issuer Account after being exchanged under
the terms of the class B swap agreement. The Rapid Amortisation Period will then
begin. The payments will be made, in no order of preference and proportionately
between all class B notes.
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EXHIBIT 1.3
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 02-1 scheduled redemption date unless there is a
shortfall between the amount in the Series 02-1 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
swap agreement. If there is such a shortfall, the class C notes will be redeemed
proportionately with the amount in the Series 02-1 Issuer Account after being
exchanged under the terms of the class C swap agreement. The Rapid Amortisation
Period will then begin. The payments will be made, in no order of preference and
proportionately between all class C notes.
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, the class B
notes or the class C notes, as described above, then on each interest payment
date after that, first the class A notes, second the class B notes and third the
class C notes, will be redeemed, to the extent of amounts available to the
issuer, after being exchanged under the swap agreements, for each note of a
class in the proportion that the principal amount outstanding of that note bears
to the total principal amount outstanding of the notes of that class. This will
happen until the earlier of the time when each class of notes has been paid in
full and the October 2009 interest payment date.
On each interest payment date, the agent bank will determine for each class of
notes the following:
o the amount of principal repayable on each note of that class; and
o 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 note of that class on that interest payment date.
The amounts and dates determined by the agent bank will be notified to the
issuer, the paying agents and the note trustee and published in accordance with
condition number 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 as described above and neither the
agent bank nor the note trustee will be liable for 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 as described above, the note
trustee will calculate the principal payment or principal amount outstanding as
described above, and each of these determinations or calculations will 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.
(2) Mandatory Early Redemption
If the Regulated Amortisation Period or the Rapid Amortisation Period begins
before the series 02-1 scheduled redemption date, then on each interest payment
date after that each note of first class A, second class B, and third class C
will be redeemed, in the proportion that its principal amount outstanding bears
to the total principal amount outstanding of the notes of that class, to
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EXHIBIT 1.3
the extent of the amount which is deposited into the Series 02-1 Issuer Account
towards redemption of the series 02- 1 medium term note certificate - after the
amount has been exchanged for dollars under the relevant swap agreement or by
the note trustee in the spot exchange market if the relevant swap agreement has
been terminated. This will happen until the earliest of:
o the date on which the relevant class of notes has been redeemed in full;
or
o the October 2009 interest payment date.
(3) Optional Redemption
The issuer may by not less than thirty and not more than sixty days prior notice
to the trustee and without the need to obtain the prior consent of the note
trustee or the noteholders redeem all of the remaining notes on the next
following interest payment date together with all accrued interest, deferred
interest and additional interest if any if the principal balance of the
remaining notes is less than 10 per cent. of their original principal balance
and the note trustee is satisfied that the issuer will have funds available to
it to make the required payment on that interest payment date.
(4) Final Redemption
If the notes have not previously been purchased and cancelled or redeemed in
full as described in condition number 6, the notes will be finally redeemed at
their then principal amount outstanding on the October 2009 interest payment
date, together with, in each case, all accrued and unpaid interest, shortfall
and interest on shortfall, if any.
The issuer or its parent may buy notes at any price. Any notes that are redeemed
or purchased pursuant to these provisions will 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, but not some only, of the
notes, plus accrued interest on them, for one penny per note, on the date upon
which the note trustee gives written notice to Gracechurch Card (Holdings)
Limited that it has determined, in its sole opinion, that all amounts
outstanding under the notes have become due and payable and there is no
reasonable likelihood of there being any further realisations, whether arising
from an enforcement of the note trustee's security or otherwise, which would be
available to pay all such amounts outstanding under the notes.
This is called the "post maturity call option".
You acknowledge 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 or acquiring, as the case may be, for your
note(s), you agree to be bound in this way.
20. Payments
Payments of principal and interest in respect of the notes will be made to the
persons in whose names the global note certificates are registered on the
register at the opening of business in the place of the registrar's specified
office on the fifteenth day before the due date for such payment.
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EXHIBIT 1.3
Such date is called the "record date". Payments will be made by wire transfer of
immediately available funds, if the registered holder has provided wiring
instructions no less than five business days prior to the record date, or
otherwise by check mailed to the address of the registered holder as it appears
in the register at the opening of business on the record date. In the case of
the final redemption, and provided that payment is made in full, payment will
only be made against surrender of those global note certificates to the
registrar.
The note trustee will not be responsible for any deficiency which may arise
because it is liable to tax in respect of the proceeds of any security.
Similar provisions in respect of the indemnification of the security trustee are
set out in the transaction documents.
21. Taxation
Payments of interest and principal will be made without making any deductions
for any tax imposed by any jurisdiction having power to tax unless a deduction
is required by the law of the relevant 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 any paying agent is
required to make any additional payments to noteholders for any deductions made
for tax.
22. Events of Default
If any of the following events occurs and is continuing it is called an "event
of default":
o 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
o 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
o the early termination, without replacement, of any of the swap
agreements as described in this prospectus under "The Swap Agreements:
Common Provisions of the Swap Agreements"; or
o 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
o a secured party 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 execution is levied against any of the assets of the
issuer; or
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EXHIBIT 1.3
o the issuer becomes insolvent or is unable to pay its debts as they fall
due; or
o 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; or
o 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
o the issuer stops or threatens to stop carrying on all or any substantial
part of its business; or
o an order is made or an effective resolution is passed for the winding
up, liquidation or dissolution of the issuer; or
o 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,
is not taken, fulfilled or done; or
o 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
o 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
o 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:
o required to by the swap counterparty;
o 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
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EXHIBIT 1.3
outstanding, the class B notes, and if
none of these remain outstanding, the class C notes; or
o 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 condition number 6.
23. Prescription
Your notes will become void if they are not presented within the time limit for
payment. That time limit is ten years from their due date. 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 condition number 14, that it has received the relevant payment.
24. Replacement of Note Certificates
If any note certificates are lost, stolen, mutilated, defaced or destroyed, you
can replace them at the specified office of the registrar. 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 note certificates before replacements will be issued.
25. 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 the 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, 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 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:
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EXHIBIT 1.3
o a principal paying agent;
o a paying agent in New York and, if and for so long as any of the notes
are listed on the Official List of the UK Listing Authority and admitted
to trading on the London Stock Exchange, in London;
o an agent bank; and
o a registrar.
Notice of any change in the paying agents, agent bank, registrar or their
specified offices shall be promptly given to you in accordance with condition
number 14.
26. Meetings of Noteholders, Modification and Waiver, Substitution and
Addition
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".
Except where the extraordinary resolution effects a Basic Terms Modification,
the interests of the most senior class of notes outstanding at the time take
precedence over the interests of the subordinated classes. The note trustee may
only give effect to an extraordinary resolution passed by the class C
noteholders if it considers that the interests of the class A noteholders or the
class B noteholders will not be materially prejudiced. An extraordinary
resolution of the class B noteholders will only be effective if the note trustee
considers that it will not be materially prejudicial to the class A noteholders.
Subject to the foregoing, 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 of any breach or
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EXHIBIT 1.3
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 condition 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 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 condition 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, 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 extraordinary resolution of the class C noteholders or any request of the
class C noteholders will be effective unless there is an extraordinary
resolution of the class B noteholders or a direction of the class B noteholders
to the same effect or none of the class B notes remain outstanding.
No noteholder may institute any proceedings against the issuer to enforce its
rights under or in respect of the notes 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 enforcement of payment of that interest or principal, may not be
impaired or affected without the consent of that noteholder.
27. Notices
Any notice 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 day it is first
published.
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EXHIBIT 1.3
Any notice 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, Clearstream, Luxembourg,
Euroclear and DTC.
28. 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.
29. Governing Law and Jurisdiction
The notes, swap agreements and trust deed are governed by English Law and the
English courts have non-exclusive jurisdiction in connection with the notes.
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EXHIBIT 1.3
PRINCIPAL PAYING AGENT REGISTRAR, NEW YORK PAYING
AGENT AND TRANSFER AGENT
THE BANK OF NEW YORK THE BANK OF NEW YORK
ONE CANADA SQUARE ONE WALL STREET
LONDON E14 5A1 NEW YORK
UK NEW YORK
USA 10286
PAYING AGENTS AND TRANSFER AGENTS
[NAME] [NAME]
[ADDRESS] [ADDRESS]
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