Exhibit 10.2
Agreed Form Cover Sheet
dated 24 January 2006
attaching:
1. the form of 1992 ISDA Master Agreement (Multicurrency - Cross Border);
2. the Agreed Form Schedule thereto (Sidley Austin document number:
1018032);
3. the form of 1995 ISDA Credit and Support Annex (Bilateral Form -
Transfer) (the "CSA pre-printed form") forming part of the Schedule; and
4. the Agreed Form Paragraph 11 to the CSA pre-printed form (Sidley Austin
document number: 1032023),
between
(1) BARCLAYS BANK PLC; and
(2) GRANITE MASTER ISSUER plc,
signed for the purposes of identification by:
/s/ JW Scrivens
- -------------------------------------------------
J.W. Scrivens
Managing Director &
Head of Legal UK & Europe
on 24 January 2006; and
/s/ Sidley Austin
- -------------------------------------------------
SIDLEY AUSTIN
on 24 January 2006.
(Multicurrency - Cross Border)
ISDA,
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of the Trade Date specified in the Confirmation
------------------------------------------------
BARCLAYS BANK PLC and GRANITE MASTER ISSUER plc
-------------------------- ---------------------------
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming
those Transactions.
Accordingly, the parties agree as follows: -
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than
by payment), such delivery will be made for receipt on the due date in
the manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement.
Copyright (C) 1992 by International Swap Dealers Association, Inc.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a
reasonable objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:-
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to
make payment of any such amount will be automatically satisfied and discharged
and, if the aggregate amount that would otherwise have been payable by one
party exceeds the aggregate amount that would otherwise have been payable by
the other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii)
above will not, or will cease to, apply to such Transactions from such date).
This election may be made separately for different groups of Transactions and
will apply separately to each pairing of Offices through which the parties
make and receive payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:-
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y
under this Section 2(d)) promptly upon the earlier of determining
that such deduction or withholding is required or receiving notice
that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net
amount actually received by Y (free and clear of Indemnifiable
Taxes, whether assessed against X or Y) will equal the full amount
Y would have received had no such deduction or withholding been
required. However, X will not be required to pay any additional
amount to Y to the extent that it would not be required to be paid
but for:-
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or
(B) the failure of a representation made by Y pursuant
to Section 3(f) to be accurate and true unless such
failure would not have occurred but for (I) any action
taken by a taxing authority, or brought in a court of
competent jurisdiction, on or after the date on which
a Transaction is entered into (regardless of whether
such action is taken or brought with respect to a
party to this Agreement) or (11) a Change in Tax Law.
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(ii) Liability. If: -
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation
of an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement) that:-
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision
of its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
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(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency
or official or any arbitrator that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of the
date of the information, true, accurate and complete in every material
respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:-
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:-
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment
under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to
be executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) Payment of Stamp Tax. Subject to Section 1 1, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated,
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organised, managed and controlled, or considered to have its seat, or in which
a branch or office through which it is acting for the purpose of this
Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other
party against any Stamp Tax levied or imposed upon the other party or in
respect of the other party's execution or performance of this Agreement by any
such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:-
(i) Failure to Pay or Deliver. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
or to give notice of a Termination Event or any agreement or obligation
under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or
performed by the party in accordance with this Agreement if such failure
is not remedied on or before the thirtieth day after notice of such
failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support Document
or the failing or ceasing of such Credit Support Document to be in
full force and effect for the purpose of this Agreement (in either
case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without
the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however
5
described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule)
which has resulted in such Specified Indebtedness becoming, or becoming
capable at such time of being declared, due and payable under such
agreements or instruments, before it would otherwise have been due and
payable or (2) a default by such party, such Credit Support Provider or
such Specified Entity (individually or collectively) in making one or
more payments on the due date thereof in an aggregate amount of not less
than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or
grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party
or any applicable Specified Entity of such party: -
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its
creditors; (4) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any
other relief under any bankruptcy or insolvency law or other
similar law affecting creditors' rights, or a petition is
presented for its winding-up or liquidation, and, in the case of
any such proceeding or petition instituted or presented against
it, such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief or
the making of an order for its winding-up or liquidation or (B) is
not dismissed, discharged, stayed or restrained in each case
within 30 days of the institution or presentation thereof; (5) has
a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation
or merger); (6) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver,
trustee, custodian or other similar official for it or for all or
substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a
distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter; (8)
causes or is subject to any event with respect to it which, under
the applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (1) to (7) (inclusive);
or (9) takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the foregoing
acts; or
(viii) Merger Without Assumption. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer: -
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its obligations
under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii)
below, and, if specified to be applicable, a Credit Event
6
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:-
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): -
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party
to perform, any contingent or other obligation which the party (or
such Credit Support Provider) has under any Credit Support
Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii)
or 6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
is required to be paid in respect of such Tax under Section 2(d)(i)(4)
(other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an lndemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been
deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either
case as a result of a party consolidating or amalgamating with, or
merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X), any
Credit Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.
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6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, "Automatic Early Termination" is specified in the Schedule as
applying to a party, then an Early Termination Date in respect of all
outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section
5(a)(vii)(l), (3), (5), (6) or, to the extent analogous thereto, (8), and as
of the time immediately preceding the institution of the relevant proceeding
or the presentation of the relevant petition upon the occurrence with respect
to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the 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 another of its Offices or Affiliates 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) 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.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(l) or
a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) Right to Terminate. If: -
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected with
respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a Tax
Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the case
of a Credit Event Upon Merger or an Additional Termination Event if
there is only one Affected Party may, by not more than 20 days notice to
the other party and provided that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifLing any amount payable under Section 6(e)) and (2) giving details
of the relevant account to which any amount payable to it is to be paid.
In the absence of written confirmation from the source of a quotation
obtained in determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the existence
and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including) the
relevant Early Termination Date to (but excluding) the date such amount
is paid, at the Applicable Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss", and a
payment method, either the "First Method or the "Second Method. If the parties
fail to designate a payment measure or payment method in the Schedule, it will
be deemed that "Market Quotation" or the "Second Method", as the case may be,
shall apply. The amount, if any, payable in respect of an Early Termination
Date and determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an
Event of Default: -
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent
of the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a
positive number, the Non-defaulting Party's Loss in respect of
this Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the
9
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the Defaulting Party
will pay it to the Non-defaulting Party; if it is a negative
number, the Non-defaulting Party will pay the absolute value of
that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply,
an amount will be payable equal to the Non-defaulting Party's Loss
in respect of this Agreement. If that amount is a positive number,
the Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: -
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3),
if Market Quotation applies, or Section 6(e)(i)(4), if Loss
applies, except that, in either case, references to the Defaulting
Party and to the Non-defaulting Party will be deemed to be
references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than
all the Transactions are being terminated, Loss shall be
calculated in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: -
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (11) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with
the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will
be subject to such adjustments as are appropriate and permitted by law
to reflect any payments or deliveries made by one party to the other
under this Agreement (and retained by such other party) during the
period from the relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate
of loss and not a penalty. Such amount is payable for the loss of
bargain and the loss of protection against future risks and except as
otherwise provided in this Agreement neither party will be entitled to
recover any additional damages as a consequence of such losses.
10
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of
the other party, except that: -
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e). Any purported
transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such tender results
in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered
into the Contractual Currency, of the full amount in the Contractual Currency
of all amounts payable in respect of this Agreement. If for any reason the
amount in the Contractual Currency so received falls short of the amount in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. if for any reason the amount in the
Contractual Currency so received exceeds the amount in the Contractual
Currency payable in respect of this Agreement, the party receiving the payment
will refund promptly the amount of such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party
is entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency and will refund promptly to the other party any excess of
the Contractual Currency received by such party as a consequence of sums paid
in such other currency if such shortfall or such excess arises or results from
any variation between the rate of exchange at which the Contractual Currency
is converted into the currency of the judgment or order for the purposes of
such judgment or order and the rate of exchange at which such party is able,
acting in a reasonable manner and in good faith in converting the currency
received into the Contractual Currency, to purchase the Contractual Currency
with the amount of the currency of the judgment or order actually received by
such party. The term "rate of exchange" includes, without limitation, any
premiums and costs of exchange payable in connection with the purchase of or
conversion into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the
party to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of
this Agreement.
(d) Evidence of Loss. For tbe purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
11
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced
by a facsimile transmission) and executed by each of the parties or confirmed
by an exchange of telexes or electronic messages on an electronic messaging
system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall he entered into as soon as practicable
and may he executed and delivered in counterparts (including by
facsimile transmission) or be created by an exchange of telexes or by an
exchange of electronic messages on an electronic messaging system, which
in each case will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein or
through another effective means that any such counterpart, telex or
electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it had entered into the
Transaction through its head or home office. This representation will be
deemed to be repeated by such party on each date on which a Transaction is
entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including legal
fees and Stamp Tax, incurred by such other party by reason of the enforcement
and protection of its rights under this Agreement or any Credit Support
Document
12
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:-
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York
City, if this Agreement is expressed to be governed by the laws of the
State of New York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section l(3) of the
Civil Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
13
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute
process agent acceptable to the other party. The parties irrevocably consent
to service of process given in the manner provided for notices in Section 12.
Nothing in this Agreement will affect the right of either party to serve
process in any other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the
grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be entitled
in any Proceedings in the courts of any jurisdiction and irrevocably agrees,
to the extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.
14. Definitions
As used in this Agreement:-
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control"
of any entity or person means ownership of a majority of the voting power of
the entity or person.
"Applicable Rate" means:-
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party fiom and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified
as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of hnding the relevant amount plus 1% per annum.
14
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed
in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to
such recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case
of tax matters, by the practice of any relevant governmental revenue
authority) and "lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and
foreign currency deposits) (a) in relation to any obligation under Section
2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or determined
pursuant to provisions contained, or incorporated by reference, in this
Agreement, (b) in relation to any other payment, in the place where the
relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment, (c) in relation to any notice
or other communication, including notice contemplated under Section 5(a)(i),
in the city specified in the address for notice provided by the recipient and,
in the case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to such
Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading position
(or any gain resulting from any of them). Loss includes losses and costs (or
gains) in respect of any payment or delivery required to have been made
(assuming satisfaction of each applicable condition precedent) on or before
the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(l) or (3) or 6(e)(ii)(2)(A) applies. Loss does
not include a party's legal fees and out-of-pocket expenses referred to under
Section 11. A party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or
by such party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting
Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions
that would, but for the occurrence of the relevant Early Termination Date,
have
15
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is
to be included. The Replacement Transaction would be subject to such
documentation as such party and the Reference Market-maker may, in good faith,
agree. The party making the determination (or its agent) will request each
Reference Market-maker to provide its quotation to the extent reasonably
practicable as of the same day and time (without regard to different time
zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if
more than one quotation has the same highest value or lowest value, then one
of such quotations shall be disregarded. If fewer than three quotations are
provided, it will be deemed that the Market Quotation in respect of such
Terminated Transaction or group of Terminated Transactions cannot be
determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head
or home office.
"Potential Event of Default" means any event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or
to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-of" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or
imposed on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: -
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not
(in the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule.
16
"Specified Indebtedness" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or surety or
otherwise) in respect of borrowed money.
"Specialed Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into between one party to this Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such party) and
the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is a
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions),
(b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment
or fee of any nature (including interest, penalties and additions thereto)
that is imposed by any government or other taxing authority in respect ofany
payment under this Agreement other than a stamp, registration, documentation
or similar tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in
effect immediately before the effectiveness of the notice designating that
Early Termination Date (or, if "Automatic Early Termination" applies,
immediately before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated
in the Termination Currency, such Termination Currency amount and, in respect
of any amount denominated in a currency other than the Termination Currency
(the "Other Currency"), the amount in the Termination Currency determined by
the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or,
if the relevant Market Quotation or Loss (as the case may be), is determined
as of a later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected as
provided below) for the purchase of such Other Currency with the Termination
Currency at or about 11:OO a.m. (in the city in which such foreign exchange
agent is located) on such date as would be customary for the determination of
such a rate for the purchase of such Other Currency for value on the relevant
Early Termination Date or that later date. The foreign exchange agent will, if
only one party is obliged to make a determination under Section 6(e), be
selected in good faith by that party and otherwise will be agreed by the
parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or an
Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or
prior to such Early Termination Date and which remain unpaid as at such Early
Termination Date and (b) in respect of each Terminated Transaction, for each
obligation under Section 2(a)(i) which was (or would have been but for Section
2(a)(iii)) required to be settled by delivery to such party on or prior to
such Early Termination Date and which has not been so settled as at such Early
Termination Date, an amount equal to the fair market
17
value of that which was (or would have been) required to be delivered as of
the originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or
would have been required to have been paid or performed to (but excluding)
such Early Termination Date, at the Applicable Rate. Such amounts of interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed. The fair market value of any obligation referred to in clause
(b) above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be
the average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
BARCLAYS BANK PLC GRANITE MASTER ISSUER plc
- ---------------------------------- --------------------------------
(Name of Party) (Name of Party)
By: By:
------------------------------- -----------------------------
Name: Name:
Title: Title:
Date: Date:
18
Barclays/Granite Master Issuer plc
Cross Currency/Interest Rate Agreed Form ISDA Schedule
Agreed Form Version: 24.01.06.
Agreed Form Schedule
(Multicurrency - Cross Border)
SCHEDULE
to the
1992 ISDA
MASTER AGREEMENT
dated as of the Trade Date specified in the Confirmation,
between
(1) BARCLAYS BANK PLC ("Party A"); and
(2) GRANITE MASTER ISSUER plc ("Party B").
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of:-
Section 5(a)(v), none
Section 5(a)(vi), none
Section 5(a)(vii), none
Section 5(b)(iv), none
and in relation to Party B for the purpose of:-
Section 5(a)(v), none
Section 5(a)(vi), none
Section 5(a)(vii), none
Section 5(b)(iv), none
(b) "Specified Transaction" will have the meaning specified in Section
14.
(c) The "Cross Default" provisions of Section 5(a)(vi) will apply to
Party A and will not apply to Party B.
19
"Specified Indebtedness" will have the meaning specified in Section
14 of this Agreement, other than any obligations in respect of
deposits received at any time in the ordinary course of Party A's
banking business.
"Threshold Amount" means, with respect to Party A, 2 per cent. of the
shareholders' equity of Party A.
For the purposes of the above, shareholders' equity shall be
determined by reference to Party A's most recent consolidated balance
sheet. Such balance sheet shall be prepared in accordance with
accounting principles that are generally accepted in Party A's
country of organization.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will
apply to Party A and will not apply to Party B.
(e) The "Automatic Early Termination" provision of Section 6(a) will not
apply to Party A and will not apply to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of
this Agreement:-
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means Sterling.
(h) Additional Termination Event will apply. The events which constitute
Additional Termination Events are set forth in Part 5(f), Part
5(k)(iii), Part 5(l)(iv) and Part 5(m)(v) of this Agreement.
20
Part 2. Tax Representations
(a) Payer Representations. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will each 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 (i) the accuracy of any representations made by the other
party pursuant to Section 3(f) of this Agreement, (ii) 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 (iii) 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 purposes of Section 3(f) of the
Agreement, neither Party A nor Party B make any representation.
21
Part 3. Agreement to Deliver Documents
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each
party agrees to deliver the following documents, as applicable:-
(a) Tax forms, documents or certificates to be delivered are:-
Party required to deliver Form/Document/Certificate Date by which to be delivered
document
Party B An executed United States On signing of this Agreement
Internal Revenue Service Form
W8-BEN signed by Party B
certifying at Part II thereof
that Party B is a resident of the
United Kingdom within the meaning
of the income tax treaty between
the United States and the United
Kingdom and accompanied by a
statement indicating that any
income from notional principal
contracts to which Party B is
party is not expected to result
in income effectively connected
with the conduct of a trade or
business in the United States.
(b) Other documents to be delivered are:-
Party required Form/Document/ Date by which Covered by
to deliver Certificate to be delivered Section 3(d)
document Representation
Party A and Appropriate evidence of its On signing of this Yes
Party B signatory's authority Agreement
Party B Certified copy of On signing of this Yes
board resolution Agreement
Party A Legal opinion of counsel (in On signing of this No
form and substance Agreement
satisfactory to Party B)
22
Party B Legal opinion of counsel (in On signing of this No
form and substance Agreement
satisfactory to Party A)
Party A An executed original of the On signing of this No
Credit Support Document Agreement
listed in Part 4(f) below
23
Part 4. Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a) of this
Agreement:-
Address for notices or communications to Party A:-
Address: 5, The North Colonnade
Canary Wharf
London E14 4BB
Attention: Derivatives Director, Legal Division
Facsimile No: +44 207 773 4932
Address for notices or communications to Party B:-
Address: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
With a copy to: Northern Rock plc
Northern Rock House
Gosforth
Newcastle upon Tyne
NE3 4PL
Attention: Andy McClean
Facsimile No.: +44 (0)191 279 4929
With a copy to the Note Trustee:-
Address: The Bank of New York
One Canada Square
48th Floor
London
E14 5AL
Attention: Corporate Trust (Global Structured Finance)
Facsimile No.: +44 (0)20 7964 6399
(b) Process Agent. For the purpose of Section 13(c) of this Agreement:-
Party A appoints as its Process Agent: None.
Party B appoints as its Process Agent: None.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
24
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:-
Party A is a Multibranch Party and will act through its London branch
and New York branch.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent shall be as specified in the
Confirmation.
(f) Credit Support Document. Details of any Credit Support Document:-
In respect of Party A: the 1995 Credit Support Annex (Bilateral Form
- Transfer) between Party A and Party B dated as of the Trade Date
specified in the Confirmation (the "Credit Support Annex").
In respect of Party B: none.
(g) Credit Support Provider.
Credit Support Provider means, in relation to Party A, none.
Credit Support Provider means, in relation to Party B, none.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with English law.
(i) Netting of Payments. Sub-paragraph (ii) of Section 2(c) of this
Agreement will apply to Transactions entered into under this
Agreement unless otherwise specified in a Confirmation.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
25
Part 5. Other Provisions
(a) Definitions and Interpretation
Capitalised terms used in this Agreement shall, except where the
context otherwise requires and save where otherwise defined in this
Agreement, bear the meanings given to them in the Programme Master
Definitions Schedule and the Issuer Master Definitions Schedule (each
as described in the Confirmation). Such Issuer Master Definitions
Schedule shall prevail to the extent that it conflicts with such
Programme Master Definitions Schedule.
For the purposes of this Agreement:
"Issuer Notes" has the meaning given to such term in the
Confirmation.
(b) No Set-Off
(i) All payments under this Agreement shall be made without
set-off or counterclaim, except as expressly provided for in
Section 6. For the avoidance of doubt, Section 2(c) shall
not be affected by this provision.
(ii) Section 6(e) shall be amended by the deletion of the
following sentence: "The amount, if any, payable in respect
of an Early Termination Date and determined pursuant to this
Section will be subject to any Set-off."
(c) Security Interest
Notwithstanding Section 7, Party A hereby agrees and consents to the
assignment by way of security by Party B of its interests under this
Agreement (without prejudice to, and after giving effect to, any
contractual netting provision contained in this Agreement) to the
Issuer Security Trustee (or any successor thereto) pursuant to and in
accordance with the terms and conditions of the Issuer Deed of Charge
and acknowledges notice of such assignment.
(d) Disapplication of certain Events of Default
Section 5(a)(ii), Section 5(a)(iii), Section 5(a)(iv), Section
5(a)(v), Section 5(a)(vii)(2),(5),(6),(7) and (9) and Section
5(a)(viii) will not apply in respect of Party B.
Section 5(a)(vii)(8) will not apply to Party B to the extent that it
applies to Section 5(a)(vii)(2),(5),(6) and (7).
Sections 5(a)(vii)(3) and 5(a)(vii)(4) are deleted in their entirety
and replaced with the following:
"(3) makes a general assignment, arrangement or composition with or
for the benefit of its creditors, provided that where such general
assignment, arrangement and/or composition is contemplated by the
Transaction Documents, this Section 5(a)(vii)(3) shall not apply to
Party B; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or a petition is
presented for its winding-up or liquidation or the making of an
administration order against it and such
26
proceeding or petition results in a judgment of insolvency or
bankruptcy or the making of an order for its winding-up,
administration or liquidation."
(e) Disapplication of certain Termination Events
The "Tax Event" and "Tax Event Upon Merger" provisions of Sections
5(b)(ii) and 5(b)(iii) will not apply to Party A or to Party B.
(f) Additional Termination Events
(A) Party B Additional Termination Events:
The following shall each constitute an Additional Termination Event
with respect to Party B:
(i) Note Enforcement Notice. The Note Trustee serves an Issuer
Enforcement Notice on Party B in accordance with Condition 9
(Events of Default) of the Issuer Notes.
(ii) Early Redemption. The Issuer Notes are redeemed in full in
accordance with Condition 5(E) or (F) at any time prior to
their Final Maturity Date.
In the case of (i) and (ii) above, Party B shall be the sole Affected
Party.
(B) Party A Additional Termination Event:
The following shall constitute an Additional Termination Event with
respect to Party A:
Without prejudice to any other remedies available to Party B under
this Agreement or otherwise, it shall be an Additional Termination
Event under this Agreement if the Additional Tax Representation in
Part 5(n)(iii) proves to have been incorrect or misleading in any
material respect with respect to one or more Transactions when made
or repeated or deemed to have been made or repeated. The sole
Affected Party shall be Party A.
(g) Northern Rock plc as Party B's Agent
Party B hereby declares that pursuant to the Issuer Cash Management
Agreement it has appointed Northern Rock plc to act as its agent for
the purpose, inter alia, of the operation of this Agreement and
dealing with payments hereunder. Accordingly, unless and until
written notice is received by Party A from the Note Trustee that such
appointment has been terminated, Party A shall be entitled to treat
all communications and acts relating to this Agreement received from
or carried out by Northern Rock plc as agent for Party B under the
Issuer Cash Management Agreement as being those of Party B, and Party
B hereby agrees to ratify and confirm the same.
(h) Security, Enforcement and Limited Recourse
(i) Party A confirms to Party B that it is, or will be, by the
date hereof, bound by the terms of the Issuer Deed of
Charge and, in particular, confirms that: (i) save as
otherwise expressly set out in the Issuer Deed of Charge,
no sum shall
27
be payable by or on behalf of Party B to it except in
accordance with the Issuer Priority of Payments as set out
in the Issuer Deed of Charge (as the same may be amended,
restated, supplemented and/or otherwise modified from time
to time); and (ii) it will not take any steps for the
winding up, dissolution or reorganization or for the
appointment of a receiver, administrator, administrative
receiver, trustee, liquidator, sequestrator or similar
officer of Party B or of any or all of its revenues and
assets nor participate in any ex parte proceedings nor
seek to enforce any judgment against Party B except as
provided in the Issuer Deed of Charge.
(ii) In relation to all sums due and payable by Party B to
Party A, Party A agrees that it shall have recourse only
to sums available to Party B for the purpose of making
payments to Party A in accordance with the relevant Issuer
Priority of Payments and the Issuer Deed of Charge.
(iii) If, on any payment date under a Transaction, an amount is
payable by Party B to Party A and Party B does not pay
such amount in full on such date (after the application of
Section 2(c) to such Transaction) because of the
limitation contained in Part 5(h)(i) above, then: (A)
payment by Party B of the shortfall (and the corresponding
payment obligation of Party A with respect to such
shortfall (being the full amount Party A would otherwise
owe on such date less the actual amount payable by Party A
determined in accordance with Part 5(h)(iii)(C) below))
will not then fall due, [but will instead be deferred
until the first Payment Date (as defined in the
Confirmation) thereafter on which sufficient funds are
available (subject to the limitation in Part 5(h)(i)
above)](1), (B) failure by Party B to make the full
payment under such Transaction (after the application of
Section 2(c) to such Transaction) shall not constitute an
Event of Default for the purpose of Section 5(a)(i), and
(C) the obligation of Party A to make payment to Party B,
in respect of the same Transaction, on such date, will be
reduced so that Party A will be obligated to pay the
Equivalent Percentage of the amount it would otherwise owe
under that Transaction. "Equivalent Percentage" means the
percentage obtained by dividing the amount paid by Party B
by the amount it would have paid on the relevant date
absent such limitation multiplied by one hundred provided
that, in respect of any Transaction where the Confirmation
provides that Party B makes payments on a monthly basis
and Party A makes payments on a quarterly basis, the
Equivalent Percentage shall be adjusted by the Calculation
Agent so as to reflect all of the amounts paid by Party B
during the relevant quarterly period applicable to Party
A's quarterly payment.
(iv) If an Early Termination Date results from an Event of
Default or a Termination Event, any amount payable (the
payment of which was deferred or not paid in the
circumstances described under Part 5(h)(iii) above by
Party A or by Party B, as the case may be, under this
Agreement) will be deemed to
- ----------------
(1) The words in square brackets will not be incorporated into the
Confirmation where the Class of the Issuer Notes referred to therein are rated
on their issuance "AAA" (or equivalent) by S&P, "AAA" (or equivalent) by Fitch
and "Aaa" (or equivalent) by Moody's.
28
be Unpaid Amounts owing to Party B or, as the case may be,
owing to Party A on the Early Termination Date.
(v) Following the calculation thereof, and in any event no later
than two Local Business Days prior to any relevant Payment
Date (as defined in the Confirmation), Party B agrees to
notify Party A of the amount of any shortfall[, the payment
of which by Party B is deferred in accordance with Part
5(h)(iii) above)](2).
(i) Scope of Agreement
It is hereby understood and agreed that the provisions of this
Agreement shall only apply to the Transaction entered into between
Party A and Party B on the Trade Date specified in the only
Confirmation (other than the Credit Support Annex) that supplements,
forms part of, and is subject to this Agreement (and, for the
avoidance of doubt, all references in this Agreement to
"Confirmation" shall be to such Confirmation or, as the context
requires, the Credit Support Annex) and that no other Transaction may
be entered into pursuant hereto except in accordance with sub-Parts
5(k)(i)(A), 5(k)(ii)(B), 5(l)(i)(D), 5(l)(iii), 5(m)(i)(A),
5(m)(ii)(A) or 5(m)(iv), or where the Rating Agencies have confirmed
in writing that the then current ratings of the Issuer Notes would
not be adversely affected by such other Transaction.
(j) Authorised Person
For the purposes of Section 3 of this Agreement, Party A represents
to Party B (which representation will be deemed to be repeated by
Party A on each date on which a Transaction is entered into and until
all outstanding payment and delivery obligations of Party A, from
time to time, under this Agreement have been satisfied in full) that
it is an authorised person for the purposes of the Financial Services
and Markets Act 2000 (or any successor to it).
(k) Ratings Downgrade of Party A - Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies Inc. ("S&P")
(i) Initial S&P Note Downgrade Event
In the event that an Initial S&P Note Downgrade Event occurs, then
Party A shall, within 30 days of the occurrence of such Initial S&P
Note Downgrade Event, at its own cost, either:-
(A) provide collateral in the form of cash and/or securities or
both in support of its obligations under this Agreement in
accordance with the provisions of the Credit Support Annex;
or
- ----------------
(2) The words in square brackets will not be incorporated into the
Confirmation where the Class of the Issuer Notes referred to therein are rated
on their issuance "AAA" (or equivalent) by S&P, "AAA" (or equivalent) by Fitch
and "Aaa" (or equivalent) by Moody's.
29
(B) transfer all of its rights and obligations with respect to
this Agreement to a replacement third party whose
short-term, unsecured and unsubordinated debt obligations
are rated at least as high as "A-1+" (or its equivalent) by
S&P or such other rating as is commensurate with the rating
assigned to the Issuer Notes by S&P from time to time; or
(C) procure another person to become co-obligor or guarantor in
respect of the obligations of Party A under this Agreement
whose short-term, unsecured and unsubordinated debt
obligations are rated at least as high as "A-1+" (or its
equivalent) by S&P or such other rating as is commensurate
with the rating assigned to the Issuer Notes by S&P from
time to time; or
(D) take such other action as Party A may agree with S&P as will
result in the rating of the Issuer Notes then outstanding
following the taking of such action being rated no lower
than the rating of the Issuer Notes immediately prior to
such downgrade.
If any of sub-paragraphs (k)(i)(B), (k)(i)(C) or (k)(i)(D) above are
satisfied at any time, all collateral (or the equivalent thereof, as
appropriate) transferred by Party A pursuant to sub-paragraph
(k)(i)(A) above will be transferred back to Party A, and Party A will
not be required to transfer any additional collateral in respect of
such particular Initial S&P Note Downgrade Event.
(ii) Subsequent S&P Note Downgrade Event
(A) Party A shall, within 10 days of the occurrence of
a Subsequent S&P Note Downgrade Event, at its own
cost and expense, use its best endeavours to take
the action set out in sub-paragraph (k)(i)(B)
above; and
(B) if, at the time a Subsequent S&P Note Downgrade
Event occurs, Party A has provided collateral in
accordance with the provisions of the Credit
Support Annex pursuant to sub-paragraph (k)(i)(A)
above following an Initial S&P Note Downgrade
Event, it will continue to provide collateral
notwithstanding the occurrence of a Subsequent S&P
Note Downgrade Event until such time as the action
in sub-paragraph (k)(ii)(A) above has been taken.
If the action set out in sub-paragraph (k)(ii)(A) above is taken at
any time, all collateral (or the equivalent thereof, as appropriate)
transferred by Party A pursuant to sub-paragraph (k)(i)(A) above will
be transferred back to Party A, and Party A will not be required to
transfer any additional collateral in respect of such Subsequent S&P
Note Downgrade Event.
(iii) Additional Termination Events
If Party A does not take any of the measures described in
sub-paragraphs (k)(i) or (k)(ii) above such failure shall
not be or give rise to an Event of Default but shall
constitute an Additional Termination Event with respect to
Party A and shall be deemed to have occurred on the
thirtieth day following the Initial S&P
30
Note Downgrade Event or Subsequent S&P Note Downgrade Event,
as applicable, with Party A as the sole Affected Party.
However, in the event that Party B were to designate an
Early Termination Date and there would be a payment due to
Party A, Party B may only designate such an Early
Termination Date in respect of an Additional Termination
Event under this sub-paragraph (k)(iii) if Party B has found
a replacement counterparty willing to enter into a new
transaction with Party B on terms that reflect as closely as
reasonably possible (as the Note Trustee, on behalf of Party
B may, in its absolute discretion, determine) the economic,
legal and credit terms of the Terminated Transaction with
Party A.
(iv) S&P Definitions
For the purposes of this Part 5(k):
an "Initial S&P Note Downgrade Event" will occur where:
(a) the short-term, unsecured and unsubordinated debt
obligations of Party A (or its successor), or any
guarantor of Party A's obligations under this
Agreement (or its successor), cease to be rated at
least as high as "A-1+" (or its equivalent) by S&P,
and
(b) as a result of such cessation, the then current
rating of the Issuer Notes may, in the reasonable
opinion of S&P, be downgraded or placed under
review for possible downgrade; and
a "Subsequent Note Downgrade Event" will occur where:
(a) the long-term, unsecured and unsubordinated debt
obligations of Party A (or its successor), or any
guarantor of Party A's obligations under this
Agreement (or its successor), cease to be rated at
least as high as "BBB-" (or its equivalent) by S&P,
and
(b) as a result of such cessation, the then current
rating of the Issuer Notes may, in the reasonable
opinion of S&P, be downgraded or placed under
review for possible downgrade.
(l) Ratings Downgrade of Party A - Moody's Investors Service Limited
("Moody's")
(i) Initial Moody's Note Downgrade Event
Within 30 days of the occurrence of an Initial Moody's Note
Downgrade Event, Party A shall, on a reasonable efforts
basis and at its own cost, attempt to:
(A) transfer all of its rights and obligations with
respect to this Agreement to either (x) a
replacement third party with the Required Ratings
(as defined below) domiciled in the same legal
jurisdiction as Party A or Party B or (y) a
replacement third party which, as agreed with
Moody's, will not adversely affect the ratings of
the Issuer Notes; or
31
(B) procure another person to become co-obligor or
guarantor in respect of the obligations of Party A
under this Agreement. Such co-obligor or guarantor
may be either (x) a person with the Required
Ratings domiciled in the same legal jurisdiction as
Party A or Party B, or (y) a person, who as agreed
with Moody's, will not adversely affect the ratings
of the Issuer Notes; or
(C) take such other action as Moody's shall confirm to
Party A will remedy an Initial Moody's Note
Downgrade Event; or
(D) provide collateral in the form of cash or
securities or both, in support of its obligations
under this Agreement in accordance with the
provisions of the Credit Support Annex.
If any of sub-paragraphs (l)(i)(A), (l)(i)(B) or (l)(i)(C)
above are satisfied at any time, all collateral (or the
equivalent thereof, as appropriate) transferred by Party A
pursuant to sub-paragraph (l)(i)(D) above will be
transferred back to Party A and Party A will not be required
to transfer any additional collateral as a consequence of
such particular Initial Moody's Note Downgrade Event.
(ii) Subsequent Moody's Note Downgrade Event
Party A shall, within 30 days of the occurrence of a
Subsequent Moody's Note Downgrade Event, on a reasonable
efforts basis and at its own cost, attempt to:
(A) transfer all of its rights and obligations with
respect to this Agreement to either (x) a
replacement third party with the Required Ratings
domiciled in the same legal jurisdiction as Party A
or Party B, or (y) a replacement third party which,
as agreed with Moody's, will not adversely affect
the ratings of the Issuer Notes; or
(B) procure another person to become co-obligor or
guarantor in respect of the obligations of Party A
under this Agreement. Such co-obligor or guarantor
may be either (x) a person with the Required
Ratings domiciled in the same legal jurisdiction as
Party A or Party B, or (y) a person, who as agreed
with Moody's, will not adversely affect the ratings
of the Issuer Notes; or
(C) take such other action as Moody's shall confirm to
Party A will remedy a Subsequent Moody's Note
Downgrade Event.
(iii) Subsequent Moody's Note Downgrade Event - Collateral
Requirements
Pending compliance with any of sub-paragraphs (l)(ii)(A),
(l)(ii)(B) or (l)(ii)(C) above, Party A will at its own cost
and within 10 days of such Subsequent Moody's Note Downgrade
Event or 30 days of the occurrence of an Initial Moody's
Note Downgrade Event, whichever is the earlier, provide
collateral in the form of cash or securities or both, in
support of its obligations under this Agreement in
accordance with the provisions of the Credit Support Annex;
provided that, if at the time when a Subsequent Moody's Note
Downgrade Event occurs, Party A has provided collateral
pursuant to the
32
Credit Support Annex pursuant to sub-paragraph (l)(i)(D)
above, it will continue to provide collateral notwithstanding
the occurrence of a Subsequent Moody's Note Downgrade Event.
If any of sub-paragraphs (l)(ii)(A), (l)(ii)(B) or
(l)(ii)(C) above are satisfied at any time, all collateral
(or the equivalent thereof, as appropriate) transferred by
Party A pursuant to this sub-paragraph (l)(iii) will be
transferred back to Party A and Party A will not be required
to transfer any additional collateral (subject always to any
collateral which may be required pursuant to sub-paragraph
(l)(i)(D) above and unless a further Subsequent Moody's Note
Downgrade Event occurs).
(iv) Additional Termination Events and Event of Default
If Party A does not take the measures described in
sub-paragraph (l)(i) above such failure shall not be or give
rise to an Event of Default but shall constitute an
Additional Termination Event with respect to Party A and
shall be deemed to have occurred on the thirtieth day
following an Initial Moody's Note Downgrade Event with Party
A as the sole Affected Party.
If Party A does not take the measures described in
sub-paragraph (l)(iii) above such failure shall give rise to
an Event of Default with respect to Party A and shall be
deemed to have occurred on the tenth day following such
Subsequent Moody's Note Downgrade Event with Party A as the
sole Defaulting Party. Further, it shall constitute an
Additional Termination Event with respect to Party A if,
even after satisfying the requirements of sub-paragraph
(l)(iii), Party A has failed, having applied reasonable
efforts, to comply with any of sub-paragraphs (l)(ii)(A),
(l)(ii)(B) or (l)(ii)(C) and such Additional Termination
Event shall be deemed to have occurred on the thirtieth day
following such Subsequent Moody's Note Downgrade Event with
Party A as the sole Affected Party.
However, in the event that Party B were to designate an
Early Termination Date and there would be a payment due to
Party A, Party B may only designate such an Early
Termination Date in respect of an Additional Termination
Event under this sub-paragraph (l)(iv) if Party B has found
a replacement counterparty willing to enter into a new
transaction with Party B on terms that reflect as closely as
reasonably possible (as the Note Trustee, on behalf of Party
B, may, in its absolute discretion, determine) the economic,
legal and credit terms of the Terminated Transactions with
Party A.
(v) Mark-to-Market valuation
In relation to paragraphs (l)(i)(D) and (iii) above, Party A
will, upon receipt of reasonable notice from Moody's
demonstrate to Moody's the calculation by it of the
mark-to-market value of the outstanding Transactions. In
relation to paragraph (iii) above, Party A will, at its own
cost, on receipt of reasonable notice from Moody's (which,
for the avoidance of doubt, will be no less than 30 days)
arrange a third party valuation of the mark-to-market value
of the outstanding Transactions.
33
(vi) Moody's Definitions
For the purposes of this Part 5(l):
an "Initial Moody's Note Downgrade Event" will occur where:
(a) the long-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) and, if
relevant, any guarantor of Party A's obligations
under this Agreement (or its successor), cease to
be rated at least as high as "A1" (or its
equivalent) by Moody's, or
(b) the short-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) and, if
relevant, any guarantor of Party A's obligations
under this Agreement (or its successor), cease to
be rated at least as high as "P-1" (or its
equivalent) by Moody's;
a "Subsequent Moody's Note Downgrade Event" will occur where:
(a) the long-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) and, if
relevant, any guarantor of Party A's obligations
under this Agreement (or its successor), cease to
be rated at least as high as "A3" (or its
equivalent) by Moody's, or
(b) the short-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) and, if
relevant, any guarantor of Party A's obligations
under this Agreement (or its successor), cease to
be rated at least as high as "P-2" (or its
equivalent) by Moody's; and
"Required Ratings" means, in respect of a person, its
short-term, unsecured and unsubordinated debt obligations
are rated at least as high as "P-1" and its long-term,
unsecured and unsubordinated debt obligations are rated at
least as high as "A1", or such other ratings as may be
agreed with Moody's from time to time.
(m) Ratings Downgrade of Party A - Fitch Ratings Ltd ("Fitch")
(i) Initial Fitch Note Downgrade Event
Party A will, on a reasonable efforts basis, within 30 days
of the occurrence of an Initial Fitch Note Downgrade Event,
at its own cost, either:-
(A) provide collateral in the form of cash or securities
or both, in support of its obligations under this
Agreement, in accordance with the provisions of the
Credit Support Annex; or
(B) transfer all of its rights and obligations with
respect to this Agreement to a replacement third
party whose long-term, unsecured and unsubordinated
debt ratings are rated at least as high as "A+" (or
its equivalent) by Fitch, and whose short-term,
unsecured and unsubordinated debt ratings are rated
at least as high as "F1" (or its equivalent) by
Fitch or such other rating as is commensurate with
the rating assigned to the Issuer Notes by Fitch
from time to time; or
34
(C) procure another person to become co-obligor or
guarantor in respect of the obligations of Party A
under this Agreement whose long-term, unsecured and
unsubordinated debt ratings are rated at least as
high as "A+" (or its equivalent) by Fitch, and whose
short-term, unsecured and unsubordinated debt
ratings are rated at least as high as "F1" (or its
equivalent) by Fitch or such other rating as is
commensurate with the rating assigned to the Issuer
Notes by Fitch from time to time; or
(D) take such other action as Party A may agree with
Fitch as will result in the rating of the Issuer
Notes then outstanding being maintained, or obtain
confirmation from Fitch that there is no adverse
effect on the rating of the Issuer Notes as a result
of that Initial Fitch Downgrade Event so that none
of the courses of action outlined at (m)(i)(A),
(m)(i)(B) or (m)(i)(C) above need be pursued in
respect of such Initial Fitch Downgrade Event.
If any of sub-paragraphs (m)(i)(B), (m)(i)(C) or (m)(i)(D)
are satisfied at any time all collateral (or the equivalent
thereof, as appropriate) transferred by Party A pursuant to
sub-paragraph (m)(i)(A) will be transferred back to Party A
and Party A will not be required to transfer any additional
collateral in consequence of the particular Initial Fitch
Note Downgrade Event.
(ii) First Subsequent Fitch Note Downgrade Event
Party A will,
(A) at its own cost, within 30 days of the occurrence
of a First Subsequent Fitch Note Downgrade Event
provide collateral in the form of cash or
securities or both, in support of its obligations
under this Agreement in accordance with the
provisions of the Credit Support Annex; provided
that, if at the time when a First Subsequent Fitch
Note Downgrade Event Party A has provided
collateral pursuant to the Credit Support Annex
pursuant to sub-paragraph (m)(i)(A) above it will
continue to provide collateral notwithstanding the
occurrence of a First Subsequent Fitch Note
Downgrade Event; provided further that, in either
case, the mark-to-market calculations and the
correct and timely provision of collateral
thereunder are verified by an independent third
party within five Local Business Days of the date
on which collateral is provided pursuant to this
sub-paragraph (l)(ii)(A) and thereafter, on a
periodic basis on every fifth Local Business Day
whilst collateral is being provided pursuant to
this sub-paragraph (l)(ii)(A) (with the costs of
such independent verification being borne by Party
A); or
on a reasonable efforts basis, within 30 days of the
occurrence of a First Subsequent Fitch Note Downgrade Event,
at its own cost, either:
(B) transfer all of its rights and obligations with
respect to this Agreement to a replacement third
party whose long-term, unsecured and unsubordinated
debt ratings are rated at least as high as "A+" (or
its equivalent) by Fitch, and whose short-term,
unsecured and unsubordinated debt ratings are rated
at least as high as "F1" (or its
35
equivalent) by Fitch or such other rating as is
commensurate with the rating assigned to the Issuer
Notes by Fitch from time to time; or
(C) procure another person to become co-obligor or
guarantor in respect of the obligations of Party A
under this Agreement whose long-term, unsecured and
unsubordinated debt ratings are rated at least as
high as "A+" (or its equivalent) by Fitch, and whose
short-term, unsecured and unsubordinated debt
ratings are rated at least as high as "F1" (or its
equivalent) by Fitch or such other rating as is
commensurate with the rating assigned to the Issuer
Notes by Fitch from time to time; or
(D) take such other action as Party A may agree with
Fitch as will result in the rating of the Issuer
Notes then outstanding being maintained, or obtain
confirmation from Fitch that there is no adverse
effect on the rating of the Issuer Notes as a result
of that First Subsequent Fitch Downgrade Event so
that none of the courses of action outlined at
(m)(ii)(A), (m)(ii)(B) or (m)(ii)(C) above need be
pursued in respect of such First Subsequent Fitch
Downgrade Event.
If any of sub-paragraphs (m)(ii)(B), (m)(ii)(C) or
(m)(ii)(D) above are satisfied at any time, all collateral
(or the equivalent thereof, as appropriate) transferred by
Party A pursuant to sub-paragraph (m)(ii)(A) above will be
transferred back to Party A and Party A will not be required
to transfer any additional collateral as a consequence of
the particular First Subsequent Fitch Note Downgrade Event.
(iii) Second Subsequent Fitch Note Downgrade Event
Party A will, on a reasonable efforts basis, within 30 days
of the occurrence of a Second Subsequent Fitch Note
Downgrade Event, at its own cost, either:
(A) transfer all of its rights and obligations with
respect to this Agreement to a replacement third
party whose long-term, unsecured and unsubordinated
debt ratings are rated at least as high as "A+" (or
its equivalent) by Fitch, and whose short-term,
unsecured and unsubordinated debt ratings are rated
at least as high as "F1" (or its equivalent) by
Fitch or such other rating as is commensurate with
the rating assigned to the Issuer Notes by Fitch
from time to time; or
(B) procure another person to become co-obligor or
guarantor in respect of the obligations of Party A
under this Agreement whose long-term, unsecured and
unsubordinated debt ratings are rated at least as
high as "A+" (or its equivalent) by Fitch, and whose
short-term, unsecured and unsubordinated debt
ratings are rated at least as high as "F1" (or its
equivalent) by Fitch or such other rating as is
commensurate with the rating assigned to the Issuer
Notes by Fitch from time to time; or
(C) take such other action as Party A may agree with
Fitch as will result in the rating of the Issuer
Notes then outstanding being maintained, or obtain
confirmation from Fitch that there is no adverse
effect on the rating of the Issuer Notes as a result
of that Second Subsequent Fitch
36
Downgrade Event so that none of the courses of
action outlined at (m)(iii)(A) or (m)(iii)(B) above
need be pursued in respect of such Second
Subsequent Fitch Downgrade Event.
(iv) Second Subsequent Fitch Note Downgrade Event - Collateral
Requirements
Pending compliance with any of sub-paragraphs (m)(iii)(A),
(m)(iii)(B) or (m)(iii)(C) above, Party A will provide, at
its own cost, within 10 days of such Second Subsequent Fitch
Note Downgrade Event or 30 days of the occurrence of First
Subsequent Fitch Note Downgrade Event, whichever is the
earlier, collateral in the form of cash or securities or
both, in support of its obligations under this Agreement in
accordance with the provisions of the Credit Support Annex;
provided that, if at the time when an Initial Fitch Note
Downgrade Event or a First Subsequent Fitch Note Downgrade
Event, as the case may be, occurs Party A has provided
collateral pursuant to the Credit Support Annex pursuant to
sub-paragraphs (m)(i)(A) or (m)(ii)(A) above, it will
continue to provide collateral notwithstanding the
occurrence of a Second Subsequent Fitch Note Downgrade
Event; provided further that in either case, the
mark-to-market calculations and the correct and timely
provision of collateral thereunder are verified by an
independent third party (with the costs of such independent
verification being borne by Party A).
If any of sub-paragraphs (m)(iii)(A), (m)(iii)(B) or
(m)(iii)(C) above are satisfied at any time, all collateral
(or the equivalent thereof, as appropriate) transferred by
Party A pursuant to this sub-paragraph (m)(iv) will be
transferred back to Party A and Party A will not be required
to transfer any additional collateral as a consequence of
the particular Second Subsequent Fitch Note Downgrade Event.
(v) Additional Termination Events
If Party A does not take any of the measures described in
sub-paragraphs (m)(i), (m)(ii) or (m)(iii) above such
failure shall not be or give rise to an Event of Default but
shall constitute an Additional Termination Event with
respect to Party A and shall be deemed to have occurred on
the thirtieth day following such Initial Fitch Note
Downgrade Event, First Subsequent Fitch Note Downgrade Event
or Second Subsequent Fitch Note Downgrade Event, as the case
may be, with Party A as the sole Affected Party.
However, in the event that Party B were to designate an
Early Termination Date and there would be a payment due to
Party A, Party B may only designate such an Early
Termination Date in respect of an Additional Termination
Event under this sub-paragraph (m)(v) if Party B has found a
replacement counterparty willing to enter a new transaction
with Party B on terms that reflect as closely as reasonably
possible (as the Note Trustee, on behalf of Party B, may, in
its absolute discretion, determine) the economic, legal and
credit terms of the Terminated Transactions with Party A.
(vi) Fitch Definitions
For the purposes of this Part 5(m):
37
an "Initial Fitch Note Downgrade Event" will occur where,
the long-term, unsecured and unsubordinated debt obligations
of Party A (or its successor) or, if relevant, any guarantor
of Party A's obligations under this Agreement (or its
successor) cease to be rated at least as high as "A+" (or
its equivalent) by Fitch, and the short-term, unsecured and
unsubordinated debt obligations of Party A (or its
successor) or any guarantor of Party A's obligations under
this Agreement (or its successor), cease to be rated at
least as high as "F1" (or its equivalent) by Fitch;
a "First Subsequent Fitch Note Downgrade Event" will occur
where, the long-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) or, if relevant,
any guarantor of Party A's obligations under this Agreement
(or its successor), cease to be rated at least as high as
"BBB+" (or its equivalent) by Fitch, and the short-term,
unsecured and unsubordinated debt obligations of Party A (or
its successor) or any guarantor of Party A's obligations
under this Agreement (or its successor), cease to be rated
at least as high as "F2" (or its equivalent) by Fitch; and
a "Second Subsequent Fitch Note Downgrade Event" will occur
where, the long-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) or, if relevant,
any guarantor of Party A's obligations under this Agreement
(or its successor), cease to be rated at least as high as
"BBB-" (or its equivalent) by Fitch, and the short-term,
unsecured and unsubordinated debt obligations of Party A (or
its successor) or any guarantor of Party A's obligations
under this Agreement (or its successor), cease to be rated
at least as high as "F3" (or its equivalent) by Fitch.
(n) Additional Section 3 and Tax Deductibility Representations
(i) Section 3 is amended by the addition at the end thereof of
the following additional representation:-
"(g) No Agency. It is entering into this Agreement and each
Transaction as principal and not as agent of any person."
(ii) Party A represents to Party B (which representation will be
deemed to be repeated by Party A on each date on which a
Transaction is entered into) that its obligations under this
Agreement rank pari passu with all of its other unsecured,
unsubordinated obligations except those obligations
preferred by operation of law.
(iii) The following representation (the "Additional Tax
Representation") will apply to Party A and will not apply to
Party B and will be deemed to be repeated by Party A at all
times until the termination of this Agreement. In relation
to each Transaction, either:
(A) it is resident in the United Kingdom for United
Kingdom tax purposes, or
38
(B) the conditions of Paragraph 31(6) or Paragraph
31(7) of Schedule 26 of the Finance Act 2002 (in
each case as amended or re-enacted from time to
time) are satisfied with respect to the relevant
Transaction.
(o) Recording of Conversations
Each party: (i) consents to the recording of telephone conversations
between the trading, marketing and other relevant personnel of the
parties in connection with this Agreement or any potential
Transaction, (ii) agrees to obtain any necessary consent of, and give
any necessary notice of such recording to, its relevant personnel,
and (iii) agrees, to the extent permitted by applicable law, that
recordings may be submitted in evidence in any Proceedings.
(p) Relationship between the parties
The Agreement is amended by the insertion after Section 14 of an
additional Section 15, reading in its entirety as follows:
"15. Relationship between the parties
Each party will be deemed to represent to the other party on the date
on which it enters into a Transaction that (absent a written
agreement between the parties that expressly imposes affirmative
obligations to the contrary for that Transaction):-
(i) Non Reliance. It is acting for its own account, and it has
made its own decisions to enter into that Transaction and as
to whether that Transaction is appropriate or proper for it
based upon its own judgment and 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 that
Transaction; it being understood that information and
explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a
recommendation to enter into that Transaction. It has not
received from the other party any assurance or guarantee as
to the expected results of that Transaction.
(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 that
Transaction. It is also capable of assuming, and assumes,
the financial and other risks of that Transaction.
(iii) Status of Parties. The other party is not acting as a
fiduciary for or an adviser to it in respect of that
Transaction."
(q) Tax
The Agreement is amended by deleting Section 2(d) in its entirety and
replacing it with the following:
"(d) Deduction or Withholding for Tax
(i) Requirement to Withhold
39
All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless
such deduction or withholding is required (including, for
the avoidance of doubt, if such deduction or withholding is
required in order for the payer to obtain relief from Tax)
by any applicable law, as modified by the practice of any
relevant governmental revenue authority, then in effect. If
a party ("X") is so required to deduct or withhold, then
that party (the "Deducting Party"):-
(A) will promptly notify the other party ("Y") of such
requirement;
(B) will pay to the relevant authorities the full
amount required to be deducted or withheld
(including the full amount required to be deducted
or withheld from any Gross Up Amount (as defined
below) paid by the Deducting Party to Y under this
Section 2(d)) promptly upon the earlier of
determining that such deduction or withholding is
required or receiving notice that such amount has
been assessed against Y;
(C) will promptly forward to Y an official receipt (or
a certified copy), or other documentation
reasonably acceptable to Y, evidencing such payment
to such authorities; and
(D) if X is Party A, X will promptly pay in addition to
the payment to which Party B is otherwise entitled
under this Agreement, such additional amount (the
"Gross Up Amount") as is necessary to ensure that
the net amount actually received by Party B will
equal the full amount which Party B would have
received had no such deduction or withholding been
required.
(ii) Liability
If:
(A) X is required by any applicable law, as modified by
the practice of any relevant governmental revenue
authority, to make any deduction or withholding for
or on account of any Tax in respect of payments
under this Agreement; and
(B) X does not so deduct or withhold; and
(C) a liability resulting from such Tax is assessed
directly against X,
then, except to the extent that Y has satisfied or then
satisfies the liability resulting from such Tax, (A) where X
is Party B, Party A will promptly pay to Party B the amount
of such liability (the "Liability Amount") (including any
related liability for interest and together with an amount
equal to the Tax payable by Party B on receipt of such
amount but including any related liability for penalties
only if Party A has failed to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d))
and Party B will promptly pay to the relevant government
revenue authority the amount of such liability (including
any related liability for interest and penalties) and (B)
40
where X is Party A and Party A would have been required to
pay a Gross Up Amount to Party B, Party A will promptly pay
to the relevant government revenue authority the amount of
such liability (including any related liability for interest
and penalties).
(iii) Tax Credit, etc.
(a) Where Party A pays an amount in accordance with
Section 2(d)(i)(D) or 2(d)(ii)(C) above, Party B
undertakes as follows:-
(1) to the extent that Party B obtains any Tax
credit, allowance, set-off or repayment
from the tax authorities of any
jurisdiction relating to any deduction or
withholding giving rise to such payment or
in the case of Section 2(d)(ii)(B) the
amount to be assessed ("Tax Credit"), it
shall pay to Party A on the next Note
Interest Payment Date after receipt of the
same so much of the cash benefit (as
determined in accordance with
sub-paragraph (iii)(a)(2) below) relating
thereto which it has received as will
leave Party B in substantially the same
(but in any event no worse) position as
Party B would have been in if no such
deduction or withholding had been required
or the amount had not been so assessed;
(2) the "cash benefit" shall, in the case of
credit, allowance or set-off, be the
additional amount of Tax which would have
been payable by Party B in the
jurisdiction referred to in sub-paragraph
(iii)(a)(1) above but for the obtaining by
it of the said Tax credit, allowance or
set-off and, in the case of a repayment,
shall be the amount of the repayment
together, in either case, with any related
interest or similar payment obtained by
Party B; and
(3) it will use all best endeavours to obtain
any Tax Credit as soon as is reasonably
practicable, provided that it shall be the
sole judge of the amount of any such Tax
Credit and of the date on which the same
is received and shall not be obliged to
disclose to Party A any information
regarding its tax affairs or tax
computations save that Party B shall, upon
request by Party A, supply Party A with a
reasonably detailed explanation of its
calculation of the amount of any such Tax
Credit and of the date on which the same
is received.
The definition of "Indemnifiable Tax" in
Section 14 shall be deleted and the
following shall be substituted therefor:
"Indemnifiable Tax" means any Tax."
(r) Change of Account
Section 2(b) of this Agreement is hereby amended by the addition of
the following at the end thereof:
41
"; provided that such new account shall be in the same legal and tax
jurisdiction as the original account and such new account, in the
case of Party B, is held with a financial institution with a
long-term unsecured and unsubordinated debt obligation rating of at
least "A1" by Moody's and a short-term unsecured, unsubordinated and
unguaranteed debt obligation rating of at least "P-1" by Moody's and
"A-1+" by S&P."
(s) Condition Precedent
Section 2(a)(iii) shall be amended by the deletion of the words "or
Potential Event of Default" in respect of conditions precedent to the
obligations of Party A only.
(t) Representations
(i) Section 3(a)(v) shall be amended by the addition of the
words "(with the exception of Section 11 insofar as it
relates to any Stamp Tax)" after the words "this Agreement".
(ii) Section 3(b) shall be amended by the deletion of the words
"or Potential Event of Default" in respect of the
representation given by Party B only.
(u) Transfers
(i) Section 7 of this Agreement shall not apply to Party A, who
shall be required to comply with, and shall be bound by, the
following:
Without prejudice to Section 6(b)(ii) Party A may transfer
all its interest and obligations in and under this Agreement
to any other entity (a "Transferee"), provided that:
(a) it has given five Business Days prior written
notice to the Note Trustee;
(b) the Transferee's long-term, unsecured and
unsubordinated debt obligations are then rated not
less than "A1" by Moody's and its short-term,
unsecured and unsubordinated debt obligations are
then rated not less than "P-1" by Moody's, "A-1+"
by S&P and "F1" by Fitch (or its equivalent by any
substitute rating agency) or such Transferee's
obligations under this Agreement are guaranteed by
an entity whose long-term, unsecured and
unsubordinated debt obligations are then rated not
less than "A1" by Moody's and whose short-term,
unsecured and unsubordinated debt obligations are
then rated not less than "P-1" by Moody's, "A-1+"
by S&P and "F1"by Fitch (or its equivalent by any
substitute rating agency);
(c) as of 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;
(d) a Termination Event or an Event of Default does not
occur under this Agreement as a result of such
transfer;
42
(e) no additional amount will be payable by Party B to
Party A or the Transferee on the next succeeding
Scheduled Payment Date as a result of such
transfer; and
(f) (if the Transferee is domiciled in a different
country from both Party A and Party B) S&P, Moody's
and Fitch have provided prior written notification
that the then current ratings of the Issuer Notes
will not be adversely affected.
Following such transfer all references to Party A shall be
deemed to be references to the Transferee.
(v) Contracts (Rights of Third Parties) Act 1999
A person who is not a party to this Agreement shall have no right
under the Contracts (Rights of Third Parties) Act 1999 to enforce any
of its terms but this shall not affect any right or remedy of a third
party which exists or is available apart from that Act.
(w) Calculations if an Early Termination Date occurs as a result of an
Event of Default or Additional Termination Event where Party A is the
Defaulting Party or the sole Affected Party.
Subject to compliance with clause 14.3(m) (Issuer Swap Agreements) of
the Issuer Deed of Charge, upon the occurrence of an Event of Default
or an Additional Termination Event where Party A is the Defaulting
Party or the sole Affected Party, as applicable, Party B will be
entitled (but not obliged in the event that it does not designate an
Early Termination Date) to proceed in accordance with Section 6 of
the Agreement subject to the following:
(i) For the purposes of Section 6(d)(i) of this Agreement, Party
B's obligation with respect to the extent of information to
be provided with its calculations is limited to information
Party B has already received in writing and provided Party B
is able to release this information without breaching the
provisions of any law applicable to, or any contractual
restriction binding upon, Party B.
(ii) The following amendments shall be deemed to be made to the
definitions of "Market Quotation":
(a) the word "firm" shall be added before the word
"quotations" in the second line; and
(b) the words "provided that the documentation relating
thereto is either the same as this Agreement and
the Confirmations with respect to the Terminated
Transactions (and the long-term unsecured and
unsubordinated debt obligations of the Reference
Market-maker are rated not less than "A1" by
Moody's, and its short-term, unsecured and
unsubordinated debt obligations are rated not less
than "P-1" by Moody's, "A-1+" by S&P and "F1" by
Fitch (or, if such Reference Market-maker is not
rated by a Rating Agency, at such equivalent rating
(by another rating agency) that is acceptable to
each such Rating Agency) or the Rating Agencies
have confirmed in writing such
43
proposed documentation will not adversely impact
the ratings of the Issuer Notes" shall be added
after "agree" in the sixteenth line; and
(c) the last sentence shall be deleted and replaced
with the following:
"If, on the last date set for delivery of
quotations, exactly two quotations are provided,
the Market Quotation will be the arithmetic mean of
the two quotations. If only one quotation is
provided on such date, Party B may, in its
discretion, accept such quotation as the Market
Quotation and if Party B does not accept such
quotation (or if no quotation has been provided),
it will be deemed that the Market Quotation in
respect of the Terminated Transaction cannot be
determined."
(iii) For the purpose of the definition of "Market Quotation",
and without limitation of the general rights of Party B
under the Agreement:
(A) Party B will undertake to use its reasonable
efforts to obtain at least three firm quotations as
soon as reasonably practicable after the Early
Termination Date and in any event within the time
period specified pursuant to sub-paragraph
(w)(iii)(C) below;
(B) Party A shall, for the purposes of Section 6(e), be
permitted to obtain quotations from Reference
Market-makers; and
(C) if no quotations have been obtained within six
Local Business Days after the occurrence of the
Early Termination Date or such longer period as
Party B may specify in writing to Party A, then it
will be deemed that the Market Quotation in respect
of the Terminated Transaction cannot be determined.
(iv) Party B will be deemed to have discharged its obligations
under sub-paragraph (w)(iii)(A) above if it requests that
Party A (such request to be in writing and made within two
Local Business Days after the occurrence of the Early
Termination Date) obtains quotations from Reference
Market-makers and Party A agrees to act in accordance with
such request.
(v) Party B will not be obliged to consult with Party A as to
the day and time of obtaining any quotations.
44
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA Master Agreement
dated as of the Trade Date specified in the Confirmation
between
BARCLAYS BANK PLC and GRANITE MASTER ISSUER plc
("Party A") ("Party B")
This Annex supplements, forms part of, and is subject to, the ISDA Master
Agreement referred to above and is part of its Schedule. For the purposes of
this Agreement, including, without limitation, Sections 1(c), 2(a), 5 and 6,
the credit support arrangements set out in this Annex constitute a Transaction
(for which this Annex constitutes the Confirmation).
Paragraph 1. Interpretation
Capitalised terms not otherwise defined in this Annex or elsewhere in this
Agreement have the meanings specified pursuant to Paragraph 10, and all
references in this Annex to Paragraphs are to Paragraphs of this Annex. In the
event of any inconsistency between this Annex and the other provisions of this
Schedule, this Annex will prevail, and in the event of any inconsistency
between Paragraph 11 and the other provisions of this Annex, Paragraph 11 will
prevail. For the avoidance of doubt, references to "transfer" in this Annex
mean, in relation to cash, payment, and in relation to the assets, delivery.
Paragraph 2. Credit Support Obligations
(a) Delivery Amount. Subject to Paragraphs 3 and 4, upon a demand made by the
Transferee on or promptly following a Valuation Date, if the Delivery Amount
for that Valuation Date equals or exceeds the Transferor's Minimum Transfer
Amount, then the Transferor will transfer to the Transferee Eligible Credit
Support having a Value as of the date of transfer at least equal to the
applicable Delivery Amount (rounded pursuant to Paragraph 11(b)(iii)(D)).
Unless otherwise specified in Paragraph 11(b), the "Delivery Amount"
applicable to the Transferor for any Valuation Date will equal the amount by
which:
(i) the Credit Support Amount
exceeds
(ii) the Value as of that Valuation Date of the Transferor's Credit
Support Balance (adjusted to include any prior Delivery Amount and to
exclude any prior Return Amount, the transfer of which, in each case,
has not yet been completed and for which the relevant Settlement Day
falls on or after such Valuation Date).
(b) Return Amount. Subject to Paragraphs 3 and 4, upon a demand made by the
Transferor on or promptly following a Valuation Date, if the Return Amount for
that Valuation Date equals or exceeds the Transferee's Minimum Transfer
Amount, then the Transferee will transfer to the Transferor Equivalent Credit
Support specified by the Transferor in that demand having a Value as of the
date of transfer as close as practicable to the applicable Return Amount
(rounded pursuant to Paragraph 11(b)(iii)(D)) and the Credit Support Balance
will, upon such transfer, be reduced accordingly. Unless otherwise specified
in Paragraph 11(b), the "Return Amount" applicable to the Transferee for any
Valuation Date will equal the amount by which:
(i) the Value as of that Valuation Date of the Transferor's Credit
Support Balance (adjusted to include any prior Delivery Amount and to
exclude any prior Return Amount, the transfer of which, in each case,
has not yet been completed and for which the relevant Settlement Day
falls on or after such Valuation Date).
exceeds
(ii) the Credit Support Amount.
Paragraph 3. Transfers, Calculations and Exchanges
(a) Transfers. All transfers under this Annex of any Eligible Credit Support,
Equivalent Credit Support, Interest Amount or Equivalent Distributions shall
be made in accordance with the instructions of the Transferee or Transferor,
as applicable, and shall be made:
(i) in the case of cash, by transfer into one or more bank accounts
specified by the recipient;
(ii) in the case of certificated securities which cannot or which the
parties have agreed will not be delivered by book-entry, by delivery in
appropriate physical form to the recipient or its account accompanied by
any duly executed instruments of transfer, transfer tax stamps and any
other documents necessary to constitute a legally valid transfer of the
transferring party's legal and beneficial title to the recipient; and
(iii) in the case of securities which the parties have agreed will be
delivered by book-entry, by the giving of written instructions
(including, for the avoidance of doubt, instructions given by telex,
facsimile transmission or electronic messaging system) to the relevant
depository institution or other entity specified by the recipient,
together with a written copy of the instructions to the recipient,
sufficient, if complied with, to result in a legally effective transfer
of the transferring party's legal and beneficial title to the recipient.
Subject to Paragraph 4 and unless otherwise specified, if a demand for the
transfer of Eligible Credit Support or Equivalent Credit Support is received
by the Notification Time, then the
relevant transfer will be made not later than the close of business on the
Settlement Day relating to the date such demand is received; if a demand is
received after the Notification Time, then the relevant transfer will be made
not later than the close of business on the Settlement Day relating to the day
after the date such demand is received.
(b) Calculations. All calculations of Value and Exposure for purposes of
Paragraphs 2 and 4(a) will be made by the relevant Valuation Agent as of the
relevant Valuation Time. The Valuation Agent will notify each party (or the
other party, if the Valuation Agent is a party) of its calculations not later
than the Notification Time on the Local Business Day following the applicable
Valuation Date (or, in the case of Paragraph 4(a), following the date of
calculation).
(c) Exchanges.
(i) Unless otherwise specified in Paragraph 11, the Transferor may on
any Local Business Day by notice inform the Transferee that it wishes to
transfer to the Transferee Eligible Credit Support specified in that
notice (the "New Credit Support") in exchange for certain Eligible
Credit Support (the "Original Credit Support") specified in that notice
comprised in the Transferor's Credit Support Balance.
(ii) If the Transferee notifies the Transferor that it has consented to
the proposed exchange, (A) the Transferor will be obliged to transfer
the New Credit Support to the Transferee on the first Settlement Day
following the date on which it receives notice (which may be oral
telephonic notice) from the Transferee of its consent and (B) the
Transferee will be obliged to transfer to the Transferor Equivalent
Credit Support in respect of the Original Credit Support not later than
the Settlement Day following the date on which the Transferee receives
the New Credit Support, unless otherwise specified in Paragraph 11(d)
(the "Exchange Date"); provided that the Transferee will only be obliged
to transfer Equivalent Credit Support with a Value as of the date of
transfer as close as practicable to, but in any event not more than, the
Value of the New Credit Support as of that date.
Paragraph 4. Dispute Resolution
(a) Disputed Calculations or Valuations. If a party (a "Disputing Party")
reasonably disputes (I) the Valuation Agent's calculation of a Delivery Amount
or a Return Amount or (II) the Value of any transfer of Eligible Credit
Support or Equivalent Credit Support, then:
(1) the Disputing Party will notify the other party and the Valuation
Agent (if the Valuation Agent is not the other party) not later than the
close of business on the Local Business Day following, in the case of
(I) above, the date that the demand is received under Paragraph 2 or, in
the case of (II) above, the date of transfer;
(2) in the case of (I) above, the appropriate party will transfer the
undisputed amount to the other party not later than the close of
business on the Settlement Day following the date that the demand is
received under Paragraph 2;
(3) the parties will consult with each other in an attempt to resolve
the dispute; and
(4) if they fail to resolve the dispute by the Resolution Time. then:
(i) in the case of a dispute involving a Delivery Amount or Return
Amount, unless otherwise specified in Paragraph 11(c), the
Valuation Agent will recalculate the Exposure and the Value as of
the Recalculation Date by:
(A) utilising any calculations of that part of the Exposure
attributable to the Transactions that the parties have
agreed are not in dispute;
(B) calculating that part of the Exposure attributable to
the Transactions in dispute by seeking four actual
quotations at mid-market from Reference Market-makers for
purposes of calculating Market Quotation, and taking the
arithmetic average of those obtained; provided that if four
quotations are not available for a particular Transaction,
then fewer than four quotations may be used for that
Transaction, and if no quotations are available for a
particular Transaction, then the Valuation Agent's original
calculations will be used for the Transaction; and
(C) utilising the procedures specified in Paragraph
11(e)(ii) for calculating the Value, if disputed, of the
outstanding Credit Support Balance;
(ii) in the case of a dispute involving the Value of any transfer
of Eligible Credit Support or Equivalent Credit Support, the
Valuation Agent will recalculate the Value as of the date of
transfer pursuant to Paragraph 11(e)(ii).
Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) as
soon as possible but in any event not later than the Notification Time on the
Local Business Day following the Resolution Time. The appropriate party will,
upon demand following such notice given the Valuation Agent or resolution
pursuant to (3) above and subject to Paragraph 3(a), make the appropriate
transfer.
(b) No Event of Default. The failure by a party to make a transfer of any
amount which is the subject of a dispute to which Paragraph 4(a) applies will
not constitute an Event of Default for as long as the procedures set out in
this Paragraph 4 are being carried out. For the avoidance of doubt, upon
completion of those procedures, Section 5(a)(i) of this Agreement will apply
to any failure by a party to make a transfer required under the final sentence
of Paragraph 4(a) on the relevant due date.
Paragraph 5. Transfer of Title, No Security Interest, Distributions and
Interest Amount
(a) Transfer of Title. Each party agrees that all right, title and interest in
and to any Eligible Credit Support, Equivalent Credit Support, Equivalent
Distributions or Interest Amount which it transfers to the other party under
the terms of this Annex shall vest in the recipient free and clear of any
liens, claims, charges or encumbrances or any other interest of the
transferring party or of any third person (other than a lien routinely imposed
on all securities in a relevant clearance system).
(b) No Security Interest. Nothing in this Annex is intended to create or does
create in favour of either party any mortgage, charge, lien, pledge,
encumbrance or other security interest
in any cash or other property transferred by one party to the other party
under the terms of this Annex.
(c) Distributions and Interest Amount.
(i) Distributions. The Transferee will transfer to the Transferor not
later than the Settlement Day following each Distributions Date cash,
securities or other property of the same type, nominal value,
description and amount as the relevant Distributions ("Equivalent
Distributions") to the extent that a Delivery Amount would not be
created or increased by the transfer, as calculated by the Valuation
Agent (and the date of calculation will be deemed a Valuation Date for
this purpose).
(ii) Interest Amount. Unless otherwise specified in Paragraph
11(f)(iii), the Transferee will transfer to the Transferor at the times
specified in Paragraph 11(f)(ii) the relevant Interest Amount to the
extent that a Delivery Amount would not be created or increased by the
transfer, as calculated by the Valuation Agent (and the date of
calculation will be deemed a Valuation Date for this purpose).
Paragraph 6. Default
If any Early Termination Date is designated or deemed to occur as a result of
an Event of Default in relation to a party, an amount equal to the Value of
the Credit Support Balance, determined as though the Early Termination Date
were a Valuation Date, will be deemed to be an Unpaid Amount due to the
Transferor (which may or may not be the Defaulting Party) for purposes of
Section 6(e). For the avoidance of doubt, if Market Quotation is the
applicable payment measure for purposes of Section 6(e), then the Market
Quotation determined under Section 6(e) in relation to the Transaction
constituted by this Annex will be deemed to be zero, and if Loss is the
applicable payment measure for purposes of Section 6(e), then the Loss
determined under Section 6(e) in relation to the Transaction will be limited
to the Unpaid Amount representing the Value of the Credit Support Balance.
Paragraph 7. Representation
Each party represents to the other party (which representation will be deemed
to be repeated as of each date on which it transfers Eligible Credit Support,
Equivalent Credit Support or Equivalent Distributions) that is the sole owner
of or otherwise has the right to transfer all Eligible Credit Support,
Equivalent Credit Support or Equivalent Distributions it transfers to the
other party under this Annex, free and clear of any security interest, lien
encumbrance or other restriction (other than lien routinely imposed on all
securities in a relevant clearance system).
Paragraph 8. Expenses
Each party will pay its own costs and expenses (including any stamp, transfer,
or similar transaction tax or duty payable on any transfer it is required to
make under this Annex) in connection with performing its obligations under
this Annex, and neither party will be liable for any such costs and expenses
incurred by the other party.
Paragraph 9. Miscellaneous
(a) Default Interest. Other than in the case of an amount which is the subject
of dispute under Paragraph 4(a), if a Transferee fails to make, when due, any
transfer of Equivalent Credit Support, Equivalent Distributions or the
Interest Amount, it will be obliged to pay the Transferor (to the extent
permitted under applicable law) an amount equal to interest at the Default
Rate multiplied by the Value on the relevant Valuation Date of the items of
property that were required to be transferred, from (and including) the date
that the Equivalent Credit Support, Equivalent Distributions or Interest
Amount were required to be transferred to (but excluding) the date of transfer
of the Equivalent Credit Support, Equivalent Distributions or Interest Amount.
This interest will be calculated on the basis of daily compounding and the
actual number of days elapsed.
(b) Good Faith and Commercially Reasonable Manner. Performance of all
obligations under this Annex, including, but not limited to, all calculations,
valuations and determinations made by either party, will be made in good faith
and in a commercially reasonable manner.
(c) Demands and Notices. All demands and notices given by a party under this
Annex will be given as specified in Section 12 of this Agreement.
(d) Specifications of Certain Matters. Anything referred to in this Annex as
being specified in Paragraph 11 also may be specified in one or more
Confirmations or other documents and this Annex will be construed accordingly.
Paragraph 10. Definitions
As used in this Annex:
"Base Currency" means the currency specified as such in Paragraph 11(a)(i).
"Base Currency Equivalent" means, with respect to an amount on a Valuation
Date, in the case of an amount denominated in the Base Currency, such Base
Currency and, in the case of an amount denominated in a currency other than
the Base Currency (the "Other Currency"), the amount of Base Currency required
to purchase such amount of the Other Currency at the spot exchange rate
determined by the Valuation Agent for value on such Valuation Date.
"Credit Support Amount" means, with respect to a Transferor on a Valuation
Date, (i) the Transferee's Exposure plus (ii) all Independent Amounts
applicable to the Transferor, if any, minus (iii) all Independent Amounts
applicable to the Transferee, if any, minus (iv) the Transferor's Threshold;
provided, however, that the Credit Support Amount will be deemed to be zero
whenever the calculation of Credit Support Amount yields a number less than
zero.
"Credit Support Balance" means, with respect to a Transferor on a Valuation
Date, the aggregate of all Eligible Credit Support that has been transferred
to or received by the Transferee under this Annex, together with any
Distributions and all proceeds of any such Eligible Credit Support or
Distributions, as reduced pursuant to Paragraph 2(b), 3(c)(ii) or 6. Any
Equivalent Distributions or Interest Amount (or portion of either) not
transferred pursuant to Paragraph 5(c)(i) or (ii) will form part of the Credit
Support Balance.
"Delivery Amount" has the meaning specified in Paragraph 2(a).
"Disputing Party" has the meaning specified in Paragraph 4.
"Distributions" means, with respect to any Eligible Credit Support comprised
in the Credit Support Balance consisting of securities, all principal,
interest and other payments and distributions of cash or other property to
which a holder of securities of the same type, nominal value, description and
amount as such Eligible Credit Support would be entitled from time to time.
"Distribution Date" means, with respect to any Eligible Credit Support
comprised in the Credit Support Balance other than cash, each date on which a
holder of such Eligible Credit Support is entitled to receive Distributions
or, if that date is not a Local Business Day, the next following Local
Business Day.
"Eligible Credit Support" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 11(b)(ii) including, in relation
to any securities, if applicable, the proceeds of any redemption in whole or
in party of such securities by the relevant issuer.
"Eligible Currency" means each currency specified as such in Paragraph
11(a)(ii), if such currency is freely available.
"Equivalent Credit Support" means, in relation to any Eligible Credit Support
comprised in the Credit Support Balance, Eligible Credit Support of the same
type, nominal value, description and amount as that Eligible Credit Support.
"Equivalent Distributions" has the meaning specified in Paragraph 5(c)(i).
"Exchange Date" has the meaning specified in Paragraph 11(d).
"Exposure" means, with respect to a party on a Valuation Date and subject to
Paragraph 4 in the case of a dispute, the amount, if any, that would be
payable to that party by the other party (expressed as a positive number) or
by that party to the other party (expressed as a negative number) pursuant to
Section 6(e)(ii)(1) of this Agreement if all Transactions (other than the
Transaction constituted by this Annex) were being terminated as of the
relevant Valuation Time, on the basis that (i) that party is not the Affected
Party and (ii) the Base Currency is the Termination Currency; provided that
Market Quotations will be determined by the Valuation Agent on behalf of that
party using its estimates at mid-market of the amounts that would be paid for
Replacement Transactions (as that term is defined in the definition of "Market
Quotation").
"Independent Amount" means, with respect to a party, the Base Currency
Equivalent of the amount specified as such for that party in Paragraph
11(b)(iii)(A); if not amount is specified, zero.
"Interest Amount" means, with respect to an Interest Period, the aggregate sum
of the Base Currency Equivalents of the amounts of interest determined for
each relevant currency and calculated for each day in that Interest Period on
the principal amount of the portion of the Credit Support Balance comprised of
cash in such currency, determined by the Valuation Agent for each such day as
follows:
(x) the amount of cash in such currency on that day; multiplied by
(y) the relevant Interest Rate in effect for that day; divided by
(z) 360 (or, in the case of pounds sterling, 365).
"Interest Period" means the period from (and including) the last Local
Business Day on which an Interest Amount was transferred (or, if no Interest
Amount has yet been transferred, the Local Business Day on which Eligible
Credit Support or Equivalent Credit Support in the form of cash was
transferred to or received by the Transferee) to (but excluding) the Local
Business Day on which the current Interest Amount is transferred.
"Interest Rate" means with respect to an Eligible Currency, the rate specified
in Paragraph 11(f)(i) for that currency.
"Local Business Day" , unless otherwise specified in Paragraph 11(h), means:
(i) in relation to a transfer of cash or other property (other than
securities) under this Annex, a day on which commercial banks are open
for business (including dealings in foreign exchange and foreign
currency deposits) in the place where the relevant account is located
and, if different, in the principal financial centre, if any, of the
currency of such payment;
(ii) in relation to a transfer of securities under this Annex, a day on
which the clearance system agreed between the parties for delivery of
the securities is open for the acceptance and execution of settlement
instructions or, if delivery of the securities is contemplated by other
means, a day on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) in the
place(s) agreed between the parties for this purpose.
(iii) in relation to a valuation under this Annex, a day on which
commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) in the place of location of the
Valuation Agent and in the place(s) agreed between the parties for this
purpose; and
(iv) in relation to any notice or other communication under this Annex,
a day on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) in the place
specified in the address for notice most recently provided by the
recipient.
"Minimum Transfer Amount" means, with respect to a party, the amount specified
as such for that party in Paragraph 11(b)(iii)(C); if no amount is specified,
zero.
"New Credit Support" has the meaning specified in Paragraph 3(c)(i).
"Notification Time" has the meaning specified in Paragraph 11(c)(iv).
"Recalculation Date" means the Valuation Date that gives rise to the dispute
under Paragraph 4; provided however, that if a subsequent Valuation Date
occurs under Paragraph 2 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 2.
"Resolution Time" has the meaning specified in Paragraph 11(c)(i).
"Return Amount" has the meaning specified in Paragraph 2(b).
"Settlement Day" means, in relation to a date, (i) with respect to a transfer
of cash or other property (other than securities), the next Local Business Day
and (ii) with respect to a transfer of securities, the first Local Business
Day after such date on which settlement of a trade in the relevant securities,
if effected on such date, would have been settled in accordance with customary
practice when settling through the clearance system agreed between the parties
for delivery of such securities or, otherwise, on the market in which such
securities are principally traded (or, in either case, if there is no such
customary practice, on the first Local Business Day after such date on which
it is reasonably practicable to deliver such securities).
"Threshold" means, with respect to a party, the Base Currency Equivalent of
the amount specified as such for that party in Paragraph 11(b)(iii)(B); if no
amount is specified, zero.
"Transferee" means, in relation to each Valuation Date, the party in respect
of which Exposure is a positive number and, in relation to a Credit Support
Balance, the party which, subject to this Annex, owes such Credit Support
Balance or, as the case may be, the Value of such Credit Support Balance to
the other party.
"Transferor" means, in relation to a Transferee, the other party.
"Valuation Agent" has the meaning specified in Paragraph 11(c)(i).
"Valuation Date" means each date specified in or otherwise determined pursuant
to Paragraph 11(c)(ii).
"Valuation Percentage" means, for any item of Eligible Credit Support, the
percentage specified in Paragraph 11(b)(ii).
"Valuation Time" has the meaning specified in Paragraph 11(c)(iii).
"Value" means, for any Valuation Date or other date for which Value is
calculated, and subject to Paragraph 4 in the case of a dispute, with respect
to:
(i) Eligible Credit Support comprised in a Credit Support Balance that
is:
(A) an amount of cash, the Base Currency Equivalent of such amount
multiplied by the applicable Valuation Percentage, if any; and
(B) a security, the Base Currency Equivalent of the bid price
obtained by the Valuation Agent multiplied by the applicable
Valuation Percentage, if any; and
(ii) items that are comprised in a Credit Support Balance and are not
Eligible Credit Support, zero.
Barclays/Granite Master Issuer plc
Cross Currency/Interest Rate Paragraph 11 to the English law CSA
Agreed Form Version: 24.01.06
Agreed Form Paragraph 11
Paragraph 11. Elections and Variables
(a) Base Currency and Eligible Currency.
(i) "Base Currency" means GBP.
(ii) "Eligible Currency" means the Base Currency, and, where
relevant,
if the Transaction is a EUR/GBP cross currency swap
transaction, Euro; and
if the Transaction is a USD/GBP cross currency swap
transaction, U.S. Dollars.
It is agreed by the parties that where the Credit Support Amount is
transferred in a currency other than the Eligible Currency, the Valuation
Percentage specified in Paragraph 11(b)(ii) shall be reduced by a percentage
agreed by the parties and approved by the relevant rating agency ("Additional
Valuation Percentage"), such Additional Valuation Percentage as agreed by the
parties and approved by the relevant rating agency. For the purpose of this
Annex, references to the "relevant rating agency" shall mean the rating agency
whose Ratings Criteria will be used to determine the amount of Eligible Credit
Support that Party A is required to transfer to Party B following a credit
ratings downgrade of Party A.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in
Paragraph 2(a), except that the words, "upon a
demand made by the Transferee" shall be deleted.
(B) "Return Amount" has the meaning as specified in
Paragraph 2(b).
(C) "Credit Support Amount" has the meaning given to
such term in respect of each of the Rating
Agencies' criteria set out in Paragraph 11(h)(v)
below. In circumstances where more than one of the
Ratings Criteria apply to Party A, the Credit
Support Amount shall be calculated by reference to
the Ratings Criteria which would result in Party A
transferring the greatest amount of Eligible Credit
Support. Under no circumstances will Party A be
required to transfer more Eligible Credit Support
than the greatest amount calculated in accordance
with the Ratings Criteria set out below.
11
(ii) Eligible Credit Support. The following items will qualify as
"Eligible Credit Support" for Party A:
Valuation Percentage
(A) cash in an Eligible Currency 100 per cent.
(B) negotiable debt obligations issued by the For the purposes of S&P and
Government of the United Kingdom, the Federal Moody's, 98.5 per cent. and for
Republic of Germany, the Republic of France, the purposes of Fitch, the
Italy, Netherlands, Sweden, Belgium or the United Advanced Rate (the "Advanced
States of America (with local and foreign currency Rate") under the heading "Notes'
issuer ratings equal to or greater than AA- by Rating/AAA" in the table entitled
S&P, AA- by Fitch and Aa3 by Moody's) having a "Advanced Rates (%)" in Appendix 3
remaining time to maturity of not more than one to Fitch's Structured Finance
year; Report entitled "Counterparty Risk
in Structured Finance Transactions:
Swap Criteria" dated 13 September 2004
(the "Fitch Report").
(C) negotiable debt obligations issued by the To be agreed between Party A,
Government of the United Kingdom, the Federal Party B, Fitch, S&P and Moody's
Republic of Germany, the Republic of France, from time to time.
Italy, Netherlands, Sweden, Belgium or the United
States of America (with local and foreign currency
issuer ratings equal to or greater than AA- by
S&P, AA- by Fitch and Aa3 by Moody's) having a
remaining time to maturity of more than one year
but not more than 5 years;
(D) negotiable debt obligations issued by the To be agreed between Party A,
Government of the United Kingdom, the Federal Party B, Fitch, S&P and Moody's
Republic of Germany, the Republic of France, from time to time.
Italy, Netherlands, Sweden, Belgium or the United
States of America (with local and foreign currency
issuer ratings equal to or greater than AA- by
S&P, AA- by Fitch and Aa3 by Moody's) having a
remaining time to maturity of more than 5 years
but not more than 10 years;
(E) negotiable debt obligations issued by the To be agreed between Party A,
Government of the United Kingdom, the Federal Party B, Fitch, S&P and Moody's
Republic of Germany, the Republic from time to time.
12
of France, Italy, Netherlands, Sweden, Belgium or
the United States of America (with local and
foreign currency issuer ratings equal to or greater
than AA- by S&P, AA- by Fitch and Aa3 by Moody's)
having a remaining time to maturity of more than 10
years; or
(F) such other items as agreed between Party A and the Such Valuation Percentage as
Rating Agencies, from time to time, which Party B agreed between Party A and the
can lawfully receive from, and transfer back to, Rating Agencies from time to time
Party A as required, that will qualify as Eligible in respect of such Eligible Credit
Credit Support. Support.
Where negotiable debt obligations are rated by only one of
the above relevant rating agencies, the rating applied will
be based on the rating of that agency.
Where the ratings and/or the Valuation Percentages of the
relevant rating agencies differ with respect to the same
negotiable debt obligation, for the purposes of B to E above
the lower of the ratings and/or the Valuation Percentages,
as the case maybe, shall apply.
(iii) Thresholds.
(A) "Independent Amount" means, for Party A and Party
B, zero.
(B) "Threshold" means, for Party A,
infinity, unless Party A, in the event of: (a) an
Initial S&P Note Downgrade Event or a Subsequent
S&P Note Downgrade Event (which in each case, is
continuing) has not otherwise complied with Part
5(k)(i)(B), Part 5(k)(i)(C) or Part 5(k)(i)(D) or
Part 5(k)(ii)(A) of the Agreement, as the case may
be, and/or (b) an Initial Moody's Note Downgrade
Event or a Subsequent Moody's Note Downgrade Event
(which in each case, is continuing), has not
otherwise complied with Part 5(l)(i)(A), Part
5(l)(i)(B), Part 5(l)(i)(C), Part 5(l)(ii)(A), Part
5(l)(ii)(B) or Part 5(l)(ii)(C) of the Agreement,
as the case may be, and/or (c) an Initial Fitch
Note Downgrade Event or a First Subsequent Fitch
Note Downgrade Event or a Second Subsequent Fitch
Note Downgrade Event (which in each case, is
continuing) has not otherwise complied with Part
5(m)(i)(B), Part 5(m)(i)(C), Part 5(m)(i)(D), Part
5(m)(ii)(B), Part 5(m)(ii)(C), Part 5(m)(ii)(D),
Part 5(m)(iii)(A), Part 5(m)(iii)(B) or Part
5(m)(iii)(C) of the Agreement, as the case may be,
then its Threshold shall be zero, and
"Threshold" means, for Party B: infinity
(C) "Minimum Transfer Amount" means, with respect to
Party A and Party B, GBP 50,000 provided, that if
(1) an Event of Default has occurred and is
continuing in respect of which Party A is the
Defaulting Party, or (2) an Additional Termination
Event has occurred in respect of which Party A is
13
an Affected Party, the Minimum Transfer Amount with
respect to Party A shall be zero.
(D) "Rounding". The Delivery Amount and the Return
Amount will be rounded up and down to the nearest
integral multiple of GBP 10,000 respectively,
subject to the maximum Return Amount being equal to
the Credit Support Balance.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A in all circumstances.
(ii) "Valuation Date" means each Local Business Day.
(iii) "Valuation Time" means the close of business on the Local
Business Day immediately preceding the Valuation Date or
date of calculation, as applicable; provided that the
calculations of Value and Exposure will be made as of
approximately the same time on the same date.
(iv) "Notification Time" means by 2:00 p.m., London time, on a
Local Business Day.
(d) Exchange Date. "Exchange Date" has the meaning specified in Paragraph
3(c)(ii).
(e) Dispute Resolution.
(i) "Resolution Time" means 2:00 p.m., London time, on the Local
Business Day following the date on which notice is given
that gives rise to a dispute under Paragraph 4.
(ii) Value. For the purpose of Paragraphs 4(a)(4)(i)(C) and
4(a)(4)(ii), the Value of the outstanding Credit Support
Balance or of any transfer of Eligible Credit Support or
Equivalent Credit Support, as the case may be, on the
relevant date will be calculated as follows:
(A) with respect to any Eligible Credit Support or
Equivalent Credit Support comprising securities
("Securities") the Base Currency Equivalent of the
sum of:
(a) (x) the last bid price on such date for
such Securities on the principal national
securities exchange on which such
Securities are listed, multiplied by the
applicable Valuation Percentage, or (y)
where any Securities are not listed on a
national securities exchange, the bid
price for such Securities quoted as at the
close of business on such date by any
principal market maker (which shall not be
and shall be independent from the
Valuation Agent) for such Securities
chosen by the Valuation Agent, multiplied
by the applicable Valuation Percentage, or
(z) if no such bid price is able to be
obtained for such date under
sub-paragraphs (x) or (y) above, the last
bid price listed determined pursuant to
sub-paragraph (x), or failing which
sub-paragraph (y), as of the day
14
next preceding such date on which such
prices were available, multiplied by the
applicable Valuation Percentage; and
(b) the accrued interest where applicable on
such Securities (except to the extent that
such interest shall have been paid to the
Transferor pursuant to Paragraph 5(c)(ii)
or included in the applicable price
referred to in Paragraph 11(e)(ii)(A)(a)
above) as of such date,
provided that it is understood that in no
circumstances shall the Transferee be required to
transfer a Return Amount in excess of the Credit
Support Balance;
(B) with respect to any Cash, the Base Currency
Equivalent of the amount thereof; and
(C) with respect to any Eligible Credit Support or
Equivalent Credit Support other than Securities and
Cash, the Base Currency Equivalent of the fair
market value thereof on such date, as determined in
any reasonable manner chosen by the Valuation
Agent, multiplied by the applicable Valuation
Percentage.
(iii) Alternative. The provisions of Paragraph 4 will apply.
(f) Distribution and Interest Amount.
(i) Interest Rate. The "Interest Rate" in relation to each
Eligible Currency specified below will be:
Eligible Currency Interest Rate
USD For the relevant determination
date, the effective federal
funds rate in U.S. Dollars
published on Telerate Screen
Page 118 for the relevant day at
the close of business in New
York on such day.
Euro For the relevant determination
date, "EONIA", which means the
overnight rate for such day, as
set forth under the heading on
Telerate Screen Page 247 or any
successor page.
GBP For the relevant determination
date, "SONIA" which means the
reference rate equal to the
overnight rate as calculated by
the Wholesale Market Brokers
Association which appears on
Telerate Page 3937 under the
heading "Sterling Overnight
Index" as of 9.00 a.m., London
time, on the first London
Banking Day following that day.
15
(ii) Transfer of Interest Amount. The transfer of the Interest
Amount will be made on the first Local Business Day
following the end of each calendar month, provided that: (1)
Party B has earned and received such amount of interest, and
(2) a Delivery Amount would not arise as a result of, or if
already existing, would not be increased by, such transfer
on such date or on any other Local Business Day on which
Equivalent Credit Support is to be transferred to the
Transferor pursuant to Paragraph 2(b).
(iii) Alternative to Interest Amount. The provisions of Paragraph
5(c)(ii) will apply. For the purposes of calculating the
Interest Amount the amount of interest calculated for each
day of the Interest Period shall, with respect to any
Eligible Currency, be compounded daily.
(iv) Interest Amount. The definition of "Interest Amount" in
Paragraph 10 shall be deleted and replaced with the
following:
""Interest Amount" means, with respect to an Interest Period
and each portion of the Credit Support Balance comprised of
cash in an Eligible Currency, the sum of the amounts of
interest determined for each day in that Interest Period by
the Valuation Agent as follows:
(x) the amount of such currency comprised in the Credit
Support Balance at the close of business for
general dealings in the relevant currency on such
day (or, if such day is not a Local Business Day,
on the immediately preceding Local Business Day);
multiplied by
(y) the relevant Interest Rate; divided by
(z) 360 (or in the case of Pounds Sterling, 365)."
(g) Addresses for Transfers.
Party A:
--------------------------------------------------------------------------------------------------
|GBP Cash |EUR Cash |USD Cash |
|-------- |-------- |-------- |
|Barclays Bank London |Barclays Bank London |Barclays Bank PLC |
|Sort Code 20-00-00 |Sort Code 20-00-00 |Sort Code 20-00-00 |
|A/c number: 50654140 |A/c number 44295577 |A/C 050035428 |
|A/c name: Barclays Capital |A/c name: Barclays Capital |A/c name: Barclays Capital |
|Ref: Granite Collateral |Ref: Granite Collateral |Ref: Granite Collateral |
--------------------------------------------------------------------------------------------------
Party B: To be advised.
(h) Other Provisions.
(i) Transfer Timing
(A) The final paragraph of Paragraph 3(a) shall be
deleted and replaced with the following:
16
"Subject to Paragraph 4, and unless otherwise
specified, any transfer of Eligible Credit Support
or Equivalent Credit Support (whether by the
Transferor pursuant to Paragraph 2(a) or by the
Transferee pursuant to Paragraph 2(b)) shall be
made not later than the close of business on the
Settlement Day."
(B) The definition of Settlement Day shall be deleted
and replaced with the following:
"Settlement Day" means the next Local Business Day
after the Demand Date.
(C) For the purposes of this Paragraph 11(h)(i):
"Demand Date" means, with respect to a transfer by
a party:
(i) in the case of a transfer pursuant to
Paragraph 2, Paragraph 3 or Paragraph
4(a)(2), the relevant Valuation Date
(assuming that, in the case of any
transfer to be made by the Transferee, the
Transferee has received a demand on such
date from the Transferor). For the
purposes of Paragraph 2 and Paragraph
4(a)(2), the Transferor will be deemed to
receive notice of the demand by the
Transferee to make a transfer of Eligible
Credit Support; and
(ii) in the case of a transfer pursuant to
Paragraph 3(c)(ii)(A), the date on which
the Transferee has given its consent to
the proposed exchange.
On each Demand Date the Transferor shall deliver to
the Transferee and the Note Trustee a statement
showing the amount of Eligible Credit Support to be
delivered.
(ii) Early Termination
The heading for Paragraph 6 shall be deleted and replaced
with "Early Termination" and the following shall be added
after the word "party" in the second line of Paragraph 6,
"or a Termination Event where all Transactions are Affected
Transactions".
(iii) Costs of Transfer on Exchange
Notwithstanding Paragraph 8, the Transferor will be
responsible for, and will reimburse the Transferee for, all
costs and expenses (including any stamp, transfer or similar
transaction tax or duty payable on any transfer that it is
required to make under this Annex) in connection with
performing both its and the Transferee's obligations under
this Annex, including but not limited to those involved in
the transfer of Eligible Credit Support or Equivalent Credit
Support either from the Transferor to the Transferee or from
the Transferee to the Transferor hereto.
(iv) Single Transferor and Single Transferee
17
Party A and Party B agree that the definitions of
"Transferee" and "Transferor" in Paragraph 10 of this Annex
shall be deleted in their entirety and replaced with the
following in lieu thereof: ""Transferor" means Party A; and
"Transferee" means Party B, and, for the avoidance of doubt,
only Party A will be required to make transfers of Delivery
Amounts hereunder.
(v) "Ratings Criteria" means, the criteria used by S&P (as set
out in S&P's Structure Finance report entitled "Global
Interest Rate and Currency Swaps: Calculating the Collateral
Required Amount" publication dated 26 February 2004 and
S&P's article entitled "Standard and Poor's Global Interest
Rate and Currency Swap Counterparty Rating Criteria
Expanded" publication dated 17 December 2003 (the "S&P
Publications")) ("S&P Criteria"), the criteria used by
Moody's ("Moody's Criteria") and the criteria used by Fitch
(as set out in the Fitch Report) ("Fitch Criteria") for the
purposes of determining the amount of Eligible Credit
Support Party A is required to transfer hereunder following
a credit ratings downgrade where Party A has opted to or is
required to transfer Eligible Credit Support in support of
its obligations under the Agreement pursuant to Part 5(k),
Part 5(l) and/or Part 5(m), as the case may be, of the
Schedule to the Agreement, in respect of each of which the
definition of "Credit Support Amount" is set out below.
Moody's Criteria
"Credit Support Amount" shall be calculated in accordance
with the meaning specified in Paragraph 10, provided
however, that the words "plus the Additional Collateral
Amount" shall be added after the words "Transferee's
Exposure" in the second line thereof.
For such purposes "Additional Collateral Amount" means with
respect to a Valuation Date, the sum of (a) the Transferee's
Exposure multiplied by "A" and (b) the product of "B"
multiplied by the Transaction Notional Amount, where:
(i) "A" means 2 per cent. and "B" means 1.6 per cent.
if the long-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) or any
guarantor of Party A's obligations under the
Agreement are downgraded below "A1" by Moody's, or
the short-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) or any
guarantor of Party A's obligations under the
Agreement are downgraded below "Prime-1" by
Moody's;
(ii) "A" means 2 per cent. and "B" shall be equal to 3.7
per cent. if the long-term, unsecured and
unsubordinated debt obligations of Party A (or its
successor) or any guarantor of Party A's
obligations under the Agreement, are downgraded
below "A3" by Moody's, or the short- term,
unsecured and unsubordinated debt obligations of
Party A (or its successor) or any guarantor of
Party A's obligations under the Agreement, are
downgraded below "Prime-2" by Moody's; and
(iii) "A" means 0 per cent. and "B" means 0 per cent. in
all other cases.
18
S&P Criteria
"Credit Support Amount" shall mean an amount calculated in
accordance with the S&P criteria as set out in the S&P
Publications.
Fitch Criteria
"Credit Support Amount" shall mean at any time for the
purposes of the Fitch Criteria with respect to a Transferor
on a Valuation Date the result of the following formula:
max[MV plus VC multiplied by 105 per cent multiplied
by N;0]
where:
"max" means maximum;
"MV" means the Transferee's Exposure;
"VC" means the applicable volatility cushion at that time
determined by reference to the table headed "Volatility
Cushion (%)" appearing at the end of Appendix 2 to the Fitch
Criteria (and for such purpose calculating the relevant
Weighted Average Life assuming a zero prepayment rate and
zero default rate in relation to the Mortgages beneficially
owned by Party B); and
"N" means the Transaction Notional Amount at that time.
(vi) Calculations
Paragraph 3(b) of this Annex shall be amended by inserting
the words "and shall provide each party (or the other party,
if the Valuation Agent is a party) with a description in
reasonable detail of how such calculations were made, upon
reasonable request" after the word "calculations" in the
third line thereof.
(vii) Demands and Notices
All demands, specifications and notices under this Annex
will be made pursuant to Section 12 of this Agreement.
(viii) Exposure
For the purpose of calculating Exposure pursuant to the
meaning set out in Paragraph 10 of the Annex, the Valuation
Agent shall, unless otherwise agreed in writing by the
Rating Agencies, seek two quotations from Reference
Market-makers; provided that if two Reference Market-makers
are not available to provide a quotation, then fewer than
two Reference Market-makers may be used for such purpose,
and if no Reference Market-maker is available, then the
Valuation Agent's estimate at mid-market will be used. Where
more than one quotation is obtained, the quotation
representing the greatest amount of the Transferee's
Exposure shall be used by the Valuation Agent.
19
(ix) Paragraph 6
For the purposes of determining the Credit Support Balance
pursuant to Paragraph 6, the definition of Value in
Paragraph 10 shall be amended by deleting the words
"multiplied by the applicable Valuation Percentage, if any"
from sub-paragraphs (i)(A) and (i)(B).
(x) Distributions
"Distributions" has the meaning specified in Paragraph 10,
except that the words "to which a holder of securities of
the same type, nominal value, description and amount as such
Eligible Credit Support would be entitled from time to time"
shall be deleted and replaced by the words "received by the
Transferee in respect of such Eligible Credit Support".
"Distribution Date" has the meaning specified in Paragraph
10, except that the words "a holder of such Eligible Credit
Support is entitled to receive Distributions" shall be
deleted and replaced by the words "Distributions are
received by the Transferee".
(xi) Definitions
As used in this Annex, the following terms shall mean:
"Cross Currency Transaction" means, if applicable, the
cross-currency swap rate transaction between Party A and
Party B entered into pursuant to the Agreement as
evidenced by the Confirmation;
"Fitch" means Fitch Ratings Ltd and includes any
successors thereto;
"Interest Rate Transaction" means, if applicable, the
interest rate swap transaction entered into pursuant to
the Agreement between Party A and Party B as evidenced by
the Confirmation;
"Moody's" means Moody's Investors Service Limited and
includes any successors thereto;
"Rating Agencies" means Moody's, S&P and Fitch;
"S&P" means Standard & Poor's Rating Services, a division
of The McGraw-Hill Companies Inc. and includes any
successors thereto;
"Transaction" means the Cross Currency Transaction or the
Interest Rate Transaction; and
"Transaction Notional Amount" means in respect of a
Valuation Date, the Currency Amount applicable to Party A
in respect of a Cross Currency Swap Transaction, or in
respect of an Interest Rate Swap Transaction, the Notional
Amount of such Interest Rate Swap Transaction, each as at
such Valuation Date.
20
Barclays Bank PLC Cross-Currency Confirmation (Class A1)
Execution Version
From: Barclays Bank PLC
5, The North Colonnade
Canary Wharf
London
E14 4BB
Attention: Derivatives Director, Legal Division
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
19 September 2006
Dear Sirs,
Re: Cross Currency Swap Transaction relating to the Issuer Notes
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction").
It is agreed that upon the execution of this Confirmation, we shall be deemed
to have entered into an agreement relating to the Issuer Notes on the terms of
the Agreed Form Agreement (the "Agreement") dated as of the Trade Date
specified below.
"Agreed Form Agreement" means the form of 1992 ISDA Master Agreement
(Multicurrency Cross Border) (including the Schedule thereto and the ISDA
Credit Support Annex (Bilateral Form - Transfer) forming part of the Schedule)
and signed for the purposes of identification by Sidley Austin and Barclays
Bank PLC on 24 January 2006.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the Agreement. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified herein.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the
meanings given to them in the Programme Master Definitions Schedule signed for
the purposes of identification by Sidley Austin Brown & Wood (now known as
Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same may be
amended, restated, varied or supplemented from time to time with the consent
of the parties hereto), and the Issuer Master Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood (now
known as Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same
may be amended, restated, varied or supplemented from time to time with the
consent of the parties hereto). The Issuer Master Definitions Schedule shall
prevail to the extent that it conflicts with the Master Definitions Schedule.
In this Confirmation:
"Conditions" means the terms and conditions of the Issuer Notes, as set out in
the Base Prospectus dated 12 September 2006 and the Final Terms dated 15
September 2006 (as each may be amended, restated, varied, supplemented and/or
otherwise modified from time to time in accordance with the provisions of the
Issuer Trust Deed), and any reference to a numbered Condition shall be
construed accordingly; and
"Issuer Notes" means the Granite Master Issuer plc USD 1,000,000,000 Series
2006-3 Class A1 Notes due December 2030.
1 The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Party A: Barclays Bank PLC
Party B: Granite Master Issuer plc.
Trade Date: 13 September 2006.
Effective Date: 19 September 2006.
Termination Date: The earlier of (a) the Floating
Rate Payer I Payment Date
falling in December 2030; (b) any
other date on which the Issuer
Notes are redeemed in full
accordance with their terms; and
(c) the date on which the
Issuer Security Trustee has
fully enforced the security
under the Issuer Deed of Charge
and distributed the full
proceeds thereof in accordance
with the Issuer Post-Enforcement
Priority of Payments.
Exchange Rate: GBP 1.00: USD 1.8730.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I: Party A.
Floating Rate Payer I On any Floating Rate Payer I
Payment Date, USD 1,000,000,000
less the
2
Currency Amount: aggregate of the Floating Rate
Payer I Interim Exchange
Amounts paid prior to such date.
Floating Rate Payer I Each Note Payment Date (as defined
Payment Dates: in the Conditions).
Floating Rate Payer I LIBOR (as defined in the
Floating Rate Option: Conditions).
Floating Rate Payer I 1 month; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 1 month and 2 month rates.
Floating Rate Payer I Spread: 0.02 per cent. per annum for the
Calculation Periods up to and
including the Calculation
Period ending on, but excluding,
the Payment Date falling in
October 2012; and thereafter 0.04
per cent. per annum.
Floating Rate Payer I Actual/360.
Floating Rate Day Count Fraction:
Floating Rate Payer I The first day of each Calculation
Reset Dates: Period.
Floating Amounts II:
Floating Rate Payer II: Party B.
Floating Rate Payer II On any Floating Rate Payer II
Currency Amount: Payment Date, GBP 533,902,829.68
less the aggregate of the
Floating Rate Payer II
Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer II The 20th day of each calendar
Payment Dates: month in each year during the Term
from, and including, October 2006
to, but excluding, the Termination
Date, subject to adjustment in
accordance with the Following
Business Day Convention and the
Termination Date.
Floating Rate Payer II GBP-LIBOR-BBA.
Floating Rate Option:
3
Floating Rate Payer II 3 months; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates; or
1 month, following the occurrence
of a Pass-Through Trigger Event
or Step-Up Date.
Floating Rate Payer II Spread: -0.0095 per cent. per annum for
the Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.1500 per
cent. per annum.
Floating Rate Payer II Actual/365 (Fixed).
Floating Rate Day Count Fraction:
Floating Rate Payer II The first day of each Calculation
Reset Dates: Period; provided however, that in
respect of every Floating Rate
Payer II Calculation Period
(other than the first Calculation
Period and any Calculation
Period following the occurrence
of a Pass-Through Trigger Event
or Step-Up Date) that does not
start on a Quarterly Reset Date,
the Floating Rate in effect for
such Calculation Period shall be
the Floating Rate for the
immediately preceding Floating
Rate Payer II Calculation Period.
Quarterly Reset Date: Each Note Payment Date (as defined
in the Conditions) scheduled to
fall in January, April, July and
October starting in January 2007.
Calculation Agent: Party A.
Business Days: London and New York.
B. Initial Exchange:
Initial Exchange Date: Effective Date.
Party A Initial Exchange Amount: GBP 533,902,829.68.
4
Party B Initial Exchange Amount: USD 1,000,000,000.
C. Interim Exchange:
Interim Exchange Dates: Each Note Payment Date (as
defined in the Conditions) on
which a USD Amortisation Amount
is payable.
Floating Rate Payer I In respect of an Interim Exchange
Interim Exchange Amount: Date, the amount in USD (if any)
equal to the principal amount of
the Issuer Notes required to be
so repaid, prepaid or otherwise
redeemed (howsoever described) in
accordance with the Conditions
and as determined by the Cash
Manager pursuant to the Issuer
Cash Management Agreement; and
notified to the Calculation Agent
by the Issuer Cash Manager
pursuant to the Issuer Cash
Management Agreement (the "USD
Amortisation Amount").
Floating Rate Payer II In respect of any Interim Exchange
Interim Exchange Amount: Date, an amount in GBP equal to
the Floating Rate Payer I Interim
Exchange Amount converted into GBP
at the Exchange Rate.
D. Final Exchange:
Final Exchange Date: The Termination Date.
Floating Rate Payer I A USD amount equal to the Floating
Final Exchange Amount: Rate Payer II Final Exchange
Amount converted into USD at the
Exchange Rate.
Floating Rate Payer II The Floating Rate Payer II
Final Exchange Amount: Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in USD: Federal Reserve Bank of New York,
New York
ABA No: 026-0025-74
Account: Barclays Bank plc,
New York
5
Favor: Barclays Swaps &
Options Group,
New York
Account No.: 050-01922-8
Account for Payments in GBP: Barclays Bank PLC, 54 Lombard
Street London
Sort Code: 20-00-00
Swift: BARCGB22
Account: Barclays Swaps
Account No.: 00152021
Payments to Floating Rate Payer II:
Account for Payments in USD: Citibank, N.A., New York
SWIFT: CITIUS33
A/C Citibank, N.A., London
A/C No. 10990765
SWIFT: CITIGB2L
for further credit to account:
10860263
Ref: GATS/Granite Master Issuer
plc.
Account for Payments in GBP: Citibank, N.A., London
A/C No. 10860255
Sort Code 18-50-08
Ref: GATS/Granite Master Issuer
plc.
F. Notice Details:
Floating Rate Payer I: Barclays Bank PLC
Address: 5, The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile Number: +44 207 773 4932
Attention: Derivatives Director, Legal
Division
Floating Rate Payer II: Granite Master Issuer plc
Address: Fifth Floor
100 Wood Street
London
EC2V 7EX
With a copy to: Northern Rock plc
Northern Rock House
Gosforth
Newcastle upon Tyne
6
NE3 4PL
Facsimile Number: +44 (0)191 279 4929
Attention: Andy McLean / Claire Blackett
With a copy to the The Bank of New York
Issuer Security Trustee:
Address: One Canada Square
48th Floor
London
E14 5AL
Facsimile Number: +44 (0)20 7964 6399
G. Offices: The Office of Party A is London.
H. Additional Termination Event:
For the purposes of Section 5(b)(v), the following event shall constitute an
Additional Termination Event:
Barclays Bank PLC fails to provide the financial statements with the US
Securities and Exchange Commission ("SEC") as required to be filed by Party
B in respect of Barclays Bank PLC pursuant to Regulation AB as promulgated
by the SEC. For the purposes of this Additional Termination Event, Barclays
Bank PLC shall be the sole Affected Party.
I. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in Part 5(h)(iii) falling after the
words "will not then fall due" are not incorporated into this
Confirmation and the square brackets and words therein are
accordingly deleted.
1.2 The words in the square brackets at the end of Part 5(h)(v) falling
after the words "of any shortfall" are not incorporated into this
Confirmation and the square brackets and words therein are
accordingly deleted.
1.3 For the avoidance of doubt, Part 5(h)(iii) applies to payments under
this Confirmation.
7
Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.
Yours faithfully
Barclays Bank PLC
By:
Name:
Title:
By:
Name:
Title:
Confirmed as of the date first written:
Granite Master Issuer plc
By:
Name:
Title:
8
Barclays Bank PLC Cross-Currency Confirmation (Class A3)
Execution Version
From: Barclays Bank PLC
5, The North Colonnade
Canary Wharf
London
E14 4BB
Attention: Derivatives Director, Legal Division
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
19 September 2006
Dear Sirs,
Re: Cross Currency Swap Transaction relating to the Issuer Notes
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction").
It is agreed that upon the execution of this Confirmation, we shall be deemed
to have entered into an agreement relating to the Issuer Notes on the terms of
the Agreed Form Agreement (the "Agreement") dated as of the Trade Date
specified below.
"Agreed Form Agreement" means the form of 1992 ISDA Master Agreement
(Multicurrency Cross Border) (including the Schedule thereto and the ISDA
Credit Support Annex (Bilateral Form - Transfer) forming part of the Schedule)
and signed for the purposes of identification by Sidley Austin and Barclays
Bank PLC on 24 January 2006.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the Agreement. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified herein.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the
meanings given to them in the Programme Master Definitions Schedule signed for
the purposes of identification by Sidley Austin Brown & Wood (now known as
Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same may be
amended, restated, varied or supplemented from time to time with the consent
of the parties hereto), and the Issuer Master Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood (now
known as Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same
may be amended, restated, varied or supplemented from time to time with the
consent of the parties hereto). The Issuer Master Definitions Schedule shall
prevail to the extent that it conflicts with the Master Definitions Schedule.
In this Confirmation:
"Conditions" means the terms and conditions of the Issuer Notes, as set out in
the Base Prospectus dated 12 September 2006 and the Final Terms dated 15
September 2006 (as each may be amended, restated, varied, supplemented and/or
otherwise modified from time to time in accordance with the provisions of the
Issuer Trust Deed), and any reference to a numbered Condition shall be
construed accordingly; and
"Issuer Notes" means the Granite Master Issuer plc USD 1,800,000,000 Series
2006-3 Class A3 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Party A: Barclays Bank PLC
Party B: Granite Master Issuer plc.
Trade Date: 13 September 2006.
Effective Date: 19 September 2006.
Termination Date: The earlier of (a) the Floating
Rate Payer I Payment Date
falling in December 2054; (b) any
other date on which the Issuer
Notes are redeemed in full
accordance with their terms; and
(c) the date on which the
Issuer Security Trustee has
fully enforced the security
under the Issuer Deed of Charge
and distributed the full
proceeds thereof in accordance
with the Issuer Post-Enforcement
Priority of Payments.
Exchange Rate: GBP 1.00: USD 1.8730.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I: Party A.
Floating Rate Payer I On any Floating Rate Payer I
Payment Date, USD 1,800,000,000
less the
2
Currency Amount: aggregate of the Floating Rate
Payer I Interim Exchange
Amounts paid prior to such date.
Floating Rate Payer I Each Note Payment Date (as defined
Payment Dates: in the Conditions).
Floating Rate Payer I LIBOR (as defined in the
Floating Rate Option: Conditions).
Floating Rate Payer I 3 months; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates;
or 1 month, in the event that the
frequency of the Floating Rate
Payer I Payment Dates alter to
monthly due to the occurrence
of a Pass-Through Trigger Event
or Step-Up Date.
Floating Rate Payer I Spread: 0.04 per cent. per annum for the
Calculation Periods up to and
including the Calculation
Period ending on, but excluding,
the Payment Date falling in
October 2012; and thereafter 0.08
per cent. per annum.
Floating Rate Payer I Actual/360.
Floating Rate Day Count Fraction:
Floating Rate Payer I The first day of each Calculation
Reset Dates: Period.
Floating Amounts II:
Floating Rate Payer II: Party B.
Floating Rate Payer II On any Floating Rate Payer II
Currency Amount: Payment Date, GBP 961,025,093.43
less the aggregate of the
Floating Rate Payer II
Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer II The 20th day of each calendar
Payment Dates: month in each year during the Term
from, and including, January 2007
to, but excluding, the Termination
Date, subject to adjustment in
accordance with the Following
Business Day
3
Convention and the Termination
Date.
Floating Rate Payer II GBP-LIBOR-BBA.
Floating Rate Option:
Floating Rate Payer II 3 months; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates; or
1 month, following the occurrence
of a Pass-Through Trigger Event
or Step-Up Date.
Floating Rate Payer II Spread: 0.0275 per cent. per annum for the
Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.2051 per
cent. per annum.
Floating Rate Payer II Actual/365 (Fixed).
Floating Rate Day Count Fraction:
Floating Rate Payer II The first day of each Calculation
Reset Dates: Period; provided however, that in
respect of every Floating Rate
Payer II Calculation Period
(other than the first Calculation
Period and any Calculation
Period following the occurrence
of a Pass-Through Trigger Event
or Step-Up Date) that does not
start on a Note Payment Date (as
defined in the Issuer Notes),
the Floating Rate in effect for
such Calculation Period shall be
the Floating Rate for the
immediately preceding Floating
Rate Payer II Calculation Period.
Calculation Agent: Party A.
Business Days: London and New York.
B. Initial Exchange:
Initial Exchange Date: Effective Date.
Party A Initial Exchange Amount: GBP 961,025,093.43.
4
Party B Initial Exchange Amount: USD 1,800,000,000.
C. Interim Exchange:
Interim Exchange Dates: Each Note Payment Date (as
defined in the Conditions) on
which a USD Amortisation Amount
is payable.
Floating Rate Payer I In respect of an Interim Exchange
Interim Exchange Amount: Date, the amount in USD (if any)
equal to the principal amount of
the Issuer Notes required to be
so repaid, prepaid or otherwise
redeemed (howsoever described) in
accordance with the Conditions
and as determined by the Cash
Manager pursuant to the Issuer
Cash Management Agreement; and
notified to the Calculation Agent
by the Issuer Cash Manager
pursuant to the Issuer Cash
Management Agreement (the "USD
Amortisation Amount").
Floating Rate Payer II In respect of any Interim Exchange
Interim Exchange Amount: Date, an amount in GBP equal to
the Floating Rate Payer I Interim
Exchange Amount converted into GBP
at the Exchange Rate.
D. Final Exchange:
Final Exchange Date: The Termination Date.
Floating Rate Payer I A USD amount equal to the Floating
Final Exchange Amount: Rate Payer II Final Exchange
Amount converted into USD at the
Exchange Rate.
Floating Rate Payer II The Floating Rate Payer II
Final Exchange Amount: Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in USD: Federal Reserve Bank of New York,
New York
ABA No: 026-0025-74
Account: Barclays Bank plc,
New York
5
Favor: Barclays Swaps &
Options Group,
New York
Account No.: 050-01922-8
Account for Payments in GBP: Barclays Bank PLC, 54 Lombard
Street London
Sort Code: 20-00-00
Swift: BARCGB22
Account: Barclays Swaps
Account No.: 00152021
Payments to Floating Rate Payer II:
Account for Payments in USD: Citibank, N.A., New York
SWIFT: CITIUS33
A/C Citibank, N.A., London
A/C No. 10990765
SWIFT: CITIGB2L
for further credit to account:
10860263
Ref: GATS/Granite Master Issuer
plc.
Account for Payments in GBP: Citibank, N.A., London
A/C No. 10860255
Sort Code 18-50-08
Ref: GATS/Granite Master Issuer
plc.
F. Notice Details:
Floating Rate Payer I: Barclays Bank PLC
Address: 5, The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile Number: +44 207 773 4932
Attention: Derivatives Director, Legal
Division
Floating Rate Payer II: Granite Master Issuer plc
Address: Fifth Floor
100 Wood Street
London
EC2V 7EX
With a copy to: Northern Rock plc
Northern Rock House
Gosforth
Newcastle upon Tyne
6
NE3 4PL
Facsimile Number: +44 (0)191 279 4929
Attention: Andy McLean / Claire Blackett
With a copy to the The Bank of New York
Issuer Security Trustee:
Address: One Canada Square
48th Floor
London
E14 5AL
Facsimile Number: +44 (0)20 7964 6399
G. Offices: The Office of Party A is London.
H. Additional Termination Event:
For the purposes of Section 5(b)(v), the following event shall constitute an
Additional Termination Event:
Barclays Bank PLC fails to provide the financial statements with the US
Securities and Exchange Commission ("SEC") as required to be filed by Party
B in respect of Barclays Bank PLC pursuant to Regulation AB as promulgated
by the SEC. For the purposes of this Additional Termination Event, Barclays
Bank PLC shall be the sole Affected Party.
I. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in Part 5(h)(iii) falling after the
words "will not then fall due" are not incorporated into this
Confirmation and the square brackets and words therein are
accordingly deleted.
1.2 The words in the square brackets at the end of Part 5(h)(v) falling
after the words "of any shortfall" are not incorporated into this
Confirmation and the square brackets and words therein are
accordingly deleted.
1.3 For the avoidance of doubt, Part 5(h)(iii) applies to payments under
this Confirmation.
7
Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.
Yours faithfully
Barclays Bank PLC
By: /s/ J. Martin
Name: JONATHAN MARTIN
Title: AUTHORISED SIGNATORY
By:
Name:
Title:
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ Ian Bowden
-------------------------------------
Name: Ian Bowden
--------------------------------------------------------
Title: Representing L.D.C. Securitisation Director No 1 Limited
8
Remarketing/Cross-Currency Confirmation for Series 2006-03 (Class A4 Notes)
Execution Version
From: Barclays Bank PLC
5, The North Colonnade
Canary Wharf
London
E14 4BB
Attention: Derivatives Director, Legal Division
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
19 September 2006
Dear Sirs,
Re: Cross Currency Swap Transaction relating to the Issuer Notes
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction").
It is agreed that upon the execution of this Confirmation, we shall be deemed
to have entered into an agreement relating to the Issuer Notes on the terms of
the Agreed Form Agreement (the "Agreement") dated as of the Trade Date
specified below.
"Agreed Form Agreement" means the form of 1992 ISDA Master Agreement
(Multicurrency Cross Border) (including the Schedule thereto and the ISDA
Credit Support Annex (Bilateral Form - Transfer) forming part of the Schedule)
and signed for the purposes of identification by Sidley Austin and Barclays
Bank PLC on 24 January 2006.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the Agreement. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified herein.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the
meanings given to them in the Programme Master Definitions Schedule signed for
the purposes of identification by Sidley Austin Brown & Wood (now known as
Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same may be
amended, restated, varied or supplemented from time to time with the consent
of the parties hereto), and the Issuer Master Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood (now
known as Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same
may be amended, restated, varied or supplemented from time to time with the
consent of the parties hereto). The Issuer Master Definitions Schedule shall
prevail to the extent that it conflicts with the Master Definitions Schedule.
In this Confirmation:
"Conditions" means the terms and conditions of the Issuer Notes, as set out in
the Base Prospectus dated 12 September 2006 and the Final Terms dated 15
September 2006 (as each may be amended, restated, varied, supplemented and/or
otherwise modified from time to time in accordance with the provisions of the
Issuer Trust Deed), and any reference to a numbered Condition shall be
construed accordingly; and
"Issuer Notes" means the Granite Master Issuer plc USD 1,000,000,000 Series
2006-3 Class A4 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Party A: Barclays Bank PLC
Party B: Granite Master Issuer plc.
Trade Date: 13 September 2006.
Effective Date: 19 September 2006.
Termination Date: The earlier of (a) the Floating
Rate Payer I Payment Date
falling in December 2054; (b) any
other date on which the Issuer
Notes are redeemed in full
accordance with their terms; and
(c) the date on which the
Issuer Security Trustee has
fully enforced the security
under the Issuer Deed of Charge
and distributed the full
proceeds thereof in accordance
with the Issuer Post-Enforcement
Priority of Payments.
Exchange Rate: GBP 1.00: USD 1.8730.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I: Party A.
Floating Rate Payer I On any Floating Rate Payer I
Payment Date, USD 1,000,000,000
less the
2
Currency Amount: aggregate of the Floating Rate
Payer I Interim Exchange
Amounts paid prior to such date.
Floating Rate Payer I Each Note Payment Date (as defined
Payment Dates: in the Conditions).
Floating Rate Payer I LIBOR (as defined in the
Floating Rate Option: Conditions).
Floating Rate Payer I 1 month; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 1 month and 2 month rates;
Floating Rate Payer I Spread: For any Calculation Period, the
Margin applicable under the
Issuer Notes during such period.
Floating Rate Payer I Actual/360.
Floating Rate Day Count Fraction:
Floating Rate Payer I The first day of each Calculation
Reset Dates: Period.
Floating Amounts II:
Floating Rate Payer II: Party B.
Floating Rate Payer II On any Floating Rate Payer II
Currency Amount: Payment Date, GBP 533,902,829.68
less the aggregate of the
Floating Rate Payer II
Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer II The 20th day of each calendar
Payment Dates: month in each year during the Term
from, and including, October 2006
to, but excluding, the Termination
Date, subject to adjustment in
accordance with the Following
Business Day Convention and the
Termination Date.
Floating Rate Payer II GBP-LIBOR-BBA.
Floating Rate Option:
Floating Rate Payer II 3 months; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and
3
in respect of which the Linear
Interpolation shall be applied
by reference to the 4 month and
5 month rates; or 1 month,
following the occurrence of a
Pass-Through Trigger Event.
Floating Rate Payer II Spread: 0.0836 per cent. per annum for
the Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.2337 per
cent. per annum.
Floating Rate Payer II Actual/365 (Fixed).
Floating Rate Day Count Fraction:
Floating Rate Payer II The first day of each Calculation
Reset Dates: Period; provided however, that in
respect of every Floating Rate
Payer II Calculation Period
(other than the first Calculation
Period and any Calculation
Period following the occurrence
of a Pass-Through Trigger Event)
that does not start on a Quarterly
Reset Date, the Floating Rate in
effect for such Calculation Period
shall be the Floating Rate for the
immediately preceding Floating
Rate Payer II Calculation Period.
Quarterly Reset Date: Each Note Payment Date (as defined
in the Conditions) scheduled to
fall in January, April, July and
October starting in January 2007.
Calculation Agent: Party A.
Business Days: London and New York.
B. Initial Exchange:
Initial Exchange Date: Effective Date.
Party A Initial Exchange Amount: GBP 533,902,829.68.
Party B Initial Exchange Amount: USD 1,800,000,000.
C. Interim Exchange:
4
Interim Exchange Dates: Each Note Payment Date (as
defined in the Conditions) on
which a USD Amortisation Amount
is payable.
Floating Rate Payer I In respect of an Interim Exchange
Interim Exchange Amount: Date, the amount in USD (if any)
equal to the principal amount of
the Issuer Notes required to be
so repaid, prepaid or otherwise
redeemed (howsoever described) in
accordance with the Conditions
and as determined by the Cash
Manager pursuant to the Issuer
Cash Management Agreement; and
notified to the Calculation Agent
by the Issuer Cash Manager
pursuant to the Issuer Cash
Management Agreement (the "USD
Amortisation Amount").
Floating Rate Payer II In respect of any Interim Exchange
Interim Exchange Amount: Date, an amount in GBP equal to
the Floating Rate Payer I Interim
Exchange Amount converted into GBP
at the Exchange Rate.
D. Final Exchange:
Final Exchange Date: The Termination Date.
Floating Rate Payer I A USD amount equal to the Floating
Final Exchange Amount: Rate Payer II Final Exchange
Amount converted into USD at the
Exchange Rate.
Floating Rate Payer II The Floating Rate Payer II
Final Exchange Amount: Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in USD: Federal Reserve Bank of New York,
New York
ABA No: 026-0025-74
Account: Barclays Bank plc,
New York
Favor: Barclays Swaps &
Options Group,
New York
Account No.: 050-01922-8
5
Account for Payments in GBP: Barclays Bank PLC, 54 Lombard
Street London
Sort Code: 20-00-00
Swift: BARCGB22
Account: Barclays Swaps
Account No.: 00152021
Payments to Floating Rate Payer II:
Account for Payments in USD: Citibank, N.A., New York
SWIFT: CITIUS33
A/C Citibank, N.A., London
A/C No. 10990765
SWIFT: CITIGB2L
for further credit to account:
10860263
Ref: GATS/Granite Master Issuer
plc.
Account for Payments in GBP: Citibank, N.A., London
A/C No. 10860255
Sort Code 18-50-08
Ref: GATS/Granite Master Issuer
plc.
F. Notice Details:
Floating Rate Payer I: Barclays Bank PLC
Address: 5, The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile Number: +44 207 773 4932
Attention: Derivatives Director, Legal
Division
Floating Rate Payer II: Granite Master Issuer plc
Address: Fifth Floor
100 Wood Street
London
EC2V 7EX
With a copy to: Northern Rock plc
Northern Rock House
Gosforth
Newcastle upon Tyne
NE3 4PL
Facsimile Number: +44 (0)191 279 4929
6
Attention: Andy McLean / Claire Blackett
With a copy to the The Bank of New York
Issuer Security Trustee:
Address: One Canada Square
48th Floor
London
E14 5AL
Facsimile Number: +44 (0)20 7964 6399
G. Offices: The Office of Party A is London.
H. Additional Termination Event:
For the purposes of Section 5(b)(v), the following event shall constitute an
Additional Termination Event:
Barclays Bank PLC fails to provide the financial statements with the US
Securities and Exchange Commission ("SEC") as required to be filed by Party
B in respect of Barclays Bank PLC pursuant to Regulation AB as promulgated
by the SEC. For the purposes of this Additional Termination Event, Barclays
Bank PLC shall be the sole Affected Party.
I. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in Part 5(h)(iii) falling after the
words "will not then fall due" are not incorporated into this
Confirmation and the square brackets and words therein are
accordingly deleted.
1.2 The words in the square brackets at the end of Part 5(h)(v) falling
after the words "of any shortfall" are not incorporated into this
Confirmation and the square brackets and words therein are
accordingly deleted.
1.3 For the avoidance of doubt, Part 5(h)(iii) applies to payments under
this Confirmation.
7
Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.
Yours faithfully
Barclays Bank PLC
By: /s/ J. Martin
Name: JONATHAN MARTIN
Title: AUTHORISED SIGNATORY
By:
Name:
Title:
By:
Name:
Title:
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ Ian Bowden
Name: Ian Bowden
Title: Representing L.D.C. Securitisation Director No 1 Limited
8
Barclays Bank PLC Cross-Currency Confirmation (Class A7)
Execution Version
From: Barclays Bank PLC
5, The North Colonnade
Canary Wharf
London
E14 4BB
Attention: Derivatives Director, Legal Division
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
19 September 2006
Dear Sirs,
Re: Cross Currency Swap Transaction relating to the Issuer Notes
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction").
It is agreed that upon the execution of this Confirmation, we shall be deemed
to have entered into an agreement relating to the Issuer Notes on the terms of
the Agreed Form Agreement (the "Agreement") dated as of the Trade Date
specified below.
"Agreed Form Agreement" means the form of 1992 ISDA Master Agreement
(Multicurrency Cross Border) (including the Schedule thereto and the ISDA
Credit Support Annex (Bilateral Form - Transfer) forming part of the Schedule)
and signed for the purposes of identification by Sidley Austin and Barclays
Bank PLC on 24 January 2006.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the Agreement. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified herein.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the
meanings given to them in the Programme Master Definitions Schedule signed for
the purposes of identification by Sidley Austin Brown & Wood (now known as
Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same may be
amended, restated, varied or supplemented from time to time with the consent
of the parties hereto), and the Issuer Master Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood (now
known as Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same
may be amended, restated, varied or supplemented from time to time with the
consent of the parties hereto). The Issuer Master Definitions Schedule shall
prevail to the extent that it conflicts with the Master Definitions Schedule.
In this Confirmation:
"Conditions" means the terms and conditions of the Issuer Notes, as set out in
the Base Prospectus dated 12 September 2006 and the Final Terms dated 15
September 2006 (as each may be amended, restated, varied, supplemented and/or
otherwise modified from time to time in accordance with the provisions of the
Issuer Trust Deed), and any reference to a numbered Condition shall be
construed accordingly; and
"Issuer Notes" means the Granite Master Issuer plc USD 1,750,000,000 Series
2006-3 Class A7 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Party A: Barclays Bank PLC
Party B: Granite Master Issuer plc.
Trade Date: 13 September 2006.
Effective Date: 19 September 2006.
Termination Date: The earlier of (a) the Floating
Rate Payer I Payment Date
falling in December 2054; (b) any
other date on which the Issuer
Notes are redeemed in full
accordance with their terms; and
(c) the date on which the Issuer
Security Trustee has fully
enforced the security under the
Issuer Deed of Charge and
distributed the full proceeds
thereof in accordance with the
Issuer Post-Enforcement Priority
of Payments.
Exchange Rate: GBP 1.00: USD 1.8730.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I: Party A.
Floating Rate Payer I On any Floating Rate Payer I
Payment Date, USD 1,750,000,000
less the
2
Currency Amount: aggregate of the Floating Rate
Payer I Interim Exchange Amounts
paid prior to such date.
Floating Rate Payer I Each Note Payment Date (as defined
Payment Dates: in the Conditions).
Floating Rate Payer I LIBOR (as defined in the
Floating Rate Option: Conditions).
Floating Rate Payer I 3 months; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of which
the Linear Interpolation shall be
applied by reference to the 4
month and 5 month rates; or 1
month, in the event that the
frequency of the Floating Rate
Payer I Payment Dates alter to
monthly due to the occurrence of a
Pass-Through Trigger Event or
Step-Up Date.
Floating Rate Payer I Spread: 0.10 per cent. per annum for the
Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.20 per
cent. per annum.
Floating Rate Payer I Actual/360.
Floating Rate Day Count Fraction:
Floating Rate Payer I The first day of each Calculation
Reset Dates: Period.
Floating Amounts II:
Floating Rate Payer II: Party B.
Floating Rate Payer II On any Floating Rate Payer II
Currency Amount: Payment Date, GBP 934,329,951.95
less the aggregate of the Floating
Rate Payer II Interim Exchange
Amounts paid prior to such date.
Floating Rate Payer II The 20th day of each calendar
Payment Dates: year during the Term from, and
including, January 2007 to, but
excluding, the Termination Date,
subject to adjustment in
accordance with the Following
Business Day
3
Convention and the Termination
Date.
Floating Rate Payer II GBP-LIBOR-BBA.
Floating Rate Option:
Floating Rate Payer II 3 months; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates;
or 1 month, following the
occurrence of a Pass-Through
Trigger Event or Step-Up Date.
Floating Rate Payer II Spread: 0.0936 per cent. per annum for
the Calculation Periods up to
and including the Calculation
Period ending on, but excluding,
the Payment Date falling in
October 2012; and thereafter
0.3337 per cent. per annum.
Floating Rate Payer II Actual/365 (Fixed).
Floating Rate Day Count Fraction:
Floating Rate Payer II The first day of each Calculation
Reset Dates: Period; provided however, that
in respect of every Floating
Rate Payer II Calculation Period
(other than the first
Calculation Period and any
Calculation Period following the
occurrence of a Pass-Through
Trigger Event or Step-Up Date)
that does not start on a Note
Payment Date (as defined in the
Issuer Notes), the Floating Rate
in effect for such Calculation
Period shall be the Floating
Rate for the immediately
preceding Floating Rate Payer II
Calculation Period.
Calculation Agent: Party A.
Business Days: London and New York.
B. Initial Exchange:
Initial Exchange Date: Effective Date.
Party A Initial Exchange Amount: GBP 934,329,951.95.
4
Party B Initial Exchange Amount: USD 1,750,000,000.
C. Interim Exchange:
Interim Exchange Dates: Each Note Payment Date (as defined
in the Conditions) on which a
USD Amortisation Amount is
payable.
Floating Rate Payer I In respect of an Interim Exchange
Interim Exchange Amount: Date, the amount in USD (if any)
equal to the principal amount of
the Issuer Notes required to be
so repaid, prepaid or otherwise
redeemed (howsoever described)
in accordance with the
Conditions and as determined by
the Cash Manager pursuant to the
Issuer Cash Management
Agreement; and notified to the
Calculation Agent by the Issuer
Cash Manager pursuant to the
Issuer Cash Management Agreement
(the "USD Amortisation Amount").
Floating Rate Payer II In respect of any Interim Exchange
Interim Exchange Amount: Date, an amount in GBP equal to
the Floating Rate Payer I
Interim Exchange Amount
converted into GBP at the
Exchange Rate.
D. Final Exchange:
Final Exchange Date: The Termination Date.
Floating Rate Payer I A USD amount equal to the Floating
Final Exchange Amount: Rate Payer II Final Exchange
Amount converted into USD at the
Exchange Rate.
Floating Rate Payer II The Floating Rate Payer II
Final Exchange Amount: Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in USD: Federal Reserve Bank of New York,
New York
ABA No: 026-0025-74
Account: Barclays Bank plc,
New York
5
Favor: Barclays Swaps &
Options Group, New
York
Account No.: 050-01922-8
Account for Payments in GBP: Barclays Bank PLC, 54 Lombard
Street London
Sort Code: 20-00-00
Swift: BARCGB22
Account: Barclays Swaps
Account No.: 00152021
Payments to Floating Rate Payer II:
Account for Payments in USD: Citibank, N.A., New York
SWIFT: CITIUS33
A/C Citibank, N.A., London
A/C No. 10990765
SWIFT: CITIGB2L
for further credit to account:
10860263
Ref: GATS/Granite Master Issuer
plc.
Account for Payments in GBP: Citibank, N.A., London
A/C No. 10860255
Sort Code 18-50-08
Ref: GATS/Granite Master Issuer
plc.
F. Notice Details:
Floating Rate Payer I: Barclays Bank PLC
Address: 5, The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile Number: +44 207 773 4932
Attention: Derivatives Director, Legal
Division
Floating Rate Payer II: Granite Master Issuer plc
Address: Fifth Floor
100 Wood Street
London
EC2V 7EX
With a copy to: Northern Rock plc
Northern Rock House
Gosforth
Newcastle upon Tyne
6
NE3 4PL
Facsimile Number: +44 (0)191 279 4929
Attention: Andy McLean / Claire Blackett
With a copy to the The Bank of New York
Issuer Security Trustee:
Address: One Canada Square
48th Floor
London
E14 5AL
Facsimile Number: +44 (0)20 7964 6399
G. Offices: The Office of Party A is London.
H. Additional Termination Event:
For the purposes of Section 5(b)(v), the following event shall constitute an
Additional Termination Event:
Barclays Bank PLC fails to provide the financial statements with the US
Securities and Exchange Commission ("SEC") as required to be filed by Party B
in respect of Barclays Bank PLC pursuant to Regulation AB as promulgated by
the SEC. For the purposes of this Additional Termination Event, Barclays Bank
PLC shall be the sole Affected Party.
I. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in Part 5(h)(iii) falling after the
words "will not then fall due" are not incorporated into this
Confirmation and the square brackets and words therein are
accordingly deleted.
1.2 The words in the square brackets at the end of Part 5(h)(v) falling
after the words "of any shortfall" are not incorporated into this
Confirmation and the square brackets and words therein are
accordingly deleted.
1.3 For the avoidance of doubt, Part 5(h)(iii) applies to payments under
this Confirmation.
7
Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.
Yours faithfully
Barclays Bank PLC
By: /s/ J. Martin
Name: JONATHAN MARTIN
Title: AUTHORISED SIGNATORY
By:
Name:
Title:
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ Ian Bowden
Name: Ian Bowden
Title: Representing L.D.C. Securitisation Director No 1 Limited
8
Barclays Bank PLC Cross-Currency Confirmation (Class B1)
Execution Version
From: Barclays Bank PLC
5, The North Colonnade
Canary Wharf
London
E14 4BB
Attention: Derivatives Director, Legal Division
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
19 September 2006
Dear Sirs,
Re: Cross Currency Swap Transaction relating to the Issuer Notes
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction").
It is agreed that upon the execution of this Confirmation, we shall be
deemed to have entered into an agreement relating to the Issuer Notes on the
terms of the Agreed Form Agreement (the "Agreement") dated as of the Trade
Date specified below.
"Agreed Form Agreement" means the form of 1992 ISDA Master Agreement
(Multicurrency Cross Border) (including the Schedule thereto and the ISDA
Credit Support Annex (Bilateral Form - Transfer) forming part of the
Schedule) and signed for the purposes of identification by Sidley Austin and
Barclays Bank PLC on 24 January 2006.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the Agreement. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified herein.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this
Confirmation will govern. References herein to a "Transaction" shall be
deemed to be references to a "Swap Transaction" for the purposes of the
Definitions. Any terms not otherwise defined herein or in the Definitions
shall have the meanings given to them in the Programme Master Definitions
Schedule signed for the purposes of identification by Sidley Austin Brown &
Wood (now known as Sidley Austin) and Allen & Overy LLP on 19 January 2005
(as the same may be amended, restated, varied or supplemented from time to
time with the consent of the parties hereto), and the Issuer Master
Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood (now
known as Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the
same may be amended, restated, varied or supplemented from time to time with
the consent of the parties hereto). The Issuer Master Definitions Schedule
shall prevail to the extent that it conflicts with the Master Definitions
Schedule.
In this Confirmation:
"Conditions" means the terms and conditions of the Issuer Notes, as set out
in the Base Prospectus dated 12 September 2006 and the Final Terms dated 15
September 2006 (as each may be amended, restated, varied, supplemented
and/or otherwise modified from time to time in accordance with the
provisions of the Issuer Trust Deed), and any reference to a numbered
Condition shall be construed accordingly; and
"Issuer Notes" means the Granite Master Issuer plc USD 70,000,000 Series
2006-3 Class B1 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Party A: Barclays Bank PLC
Party B: Granite Master Issuer plc.
Trade Date: 13 September 2006.
Effective Date: 19 September 2006.
Termination Date: The earlier of (a) the Floating
Rate Payer I Payment Date
falling in December 2054; (b)
any other date on which the
Issuer Notes are redeemed in
full accordance with their
terms; and (c) the date on which
the Issuer Security Trustee has
fully enforced the security
under the Issuer Deed of Charge
and distributed the full
proceeds thereof in accordance
with the Issuer Post-Enforcement
Priority of Payments.
Exchange Rate: GBP 1.00: USD 1.8730.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I: Party A.
Floating Rate Payer I On any Floating Rate Payer I
Payment Date, USD 70,000,000 less
the
2
Currency Amount: aggregate of the Floating Rate
Payer I Interim Exchange Amounts
paid prior to such date.
Floating Rate Payer I Each Note Payment Date (as defined
Payment Dates: in the Conditions).
Floating Rate Payer I LIBOR (as defined in the
Floating Rate Option: Conditions).
Floating Rate Payer I 3 months; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates;
or 1 month, in the event that
the frequency of the Floating
Rate Payer I Payment Dates alter
to monthly due to the occurrence
of a Pass-Through Trigger Event
or Step-Up Date.
Floating Rate Payer I Spread: 0.09 per cent. per annum for the
Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.18 per
cent. per annum.
Floating Rate Payer I Actual/360.
Floating Rate Day Count Fraction:
Floating Rate Payer I The first day of each Calculation
Reset Dates: Period.
Floating Amounts II:
Floating Rate Payer II: Party B.
Floating Rate Payer II On any Floating Rate Payer II
Currency Amount: Payment Date, GBP 37,373,198.08
less the aggregate of the
Floating Rate Payer II Interim
Exchange Amounts paid prior to
such date.
Floating Rate Payer II The 20th day of each calendar
Payment Dates: month in each year during the
Term from, and including,
January 2007 to, but excluding,
the Termination Date, subject to
adjustment in accordance with
the Following Business Day
3
Convention and the Termination
Date.
Floating Rate Payer II GBP-LIBOR-BBA.
Floating Rate Option:
Floating Rate Payer II 3 months; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates;
or 1 month, following the
occurrence of a Pass-Through
Trigger Event or Step-Up Date.
Floating Rate Payer II Spread: 0.0744 per cent. per annum for
the Calculation Periods up to
and including the Calculation
Period ending on, but excluding,
the Payment Date falling in
October 2012; and thereafter
0.2988 per cent. per annum.
Floating Rate Payer II Actual/365 (Fixed).
Floating Rate Day Count Fraction:
Floating Rate Payer II The first day of each Calculation
Reset Dates: Period; provided however, that
in respect of every Floating
Rate Payer II Calculation Period
(other than the first
Calculation Period and any
Calculation Period following the
occurrence of a Pass-Through
Trigger Event or Step-Up Date)
that does not start on a Note
Payment Date (as defined in the
Issuer Notes), the Floating Rate
in effect for such Calculation
Period shall be the Floating
Rate for the immediately
preceding Floating Rate Payer II
Calculation Period.
Calculation Agent: Party A.
Business Days: London and New York.
B. Initial Exchange:
Initial Exchange Date: Effective Date.
Party A Initial Exchange Amount: GBP 37,373,198.08.
4
Party B Initial Exchange Amount: USD 70,000,000.
C. Interim Exchange:
Interim Exchange Dates: Each Note Payment Date (as
defined in the Conditions) on
which a USD Amortisation Amount
is payable.
Floating Rate Payer I In respect of an Interim Exchange
Interim Exchange Amount: Date, the amount in USD (if any)
equal to the principal amount of
the Issuer Notes required to be
so repaid, prepaid or otherwise
redeemed (howsoever described)
in accordance with the
Conditions and as determined by
the Cash Manager pursuant to the
Issuer Cash Management
Agreement; and notified to the
Calculation Agent by the Issuer
Cash Manager pursuant to the
Issuer Cash Management Agreement
(the "USD Amortisation Amount").
Floating Rate Payer II In respect of any Interim Exchange
Interim Exchange Amount: Date, an amount in GBP equal to
the Floating Rate Payer I
Interim Exchange Amount
converted into GBP at the
Exchange Rate.
D. Final Exchange:
Final Exchange Date: The Termination Date.
Floating Rate Payer I A USD amount equal to the Floating
Final Exchange Amount: Rate Payer II Final Exchange
Amount converted into USD at the
Exchange Rate.
Floating Rate Payer II The Floating Rate Payer II
Final Exchange Amount: Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in USD: Federal Reserve Bank of New York,
New York
ABA No: 026-0025-74
Account: Barclays Bank plc,
New York
5
Favor: Barclays Swaps &
Options Group,
New York
Account No.: 050-01922-8
Account for Payments in GBP: Barclays Bank PLC, 54 Lombard
Street London
Sort Code: 20-00-00
Swift: BARCGB22
Account: Barclays Swaps
Account No.: 00152021
Payments to Floating Rate Payer II:
Account for Payments in USD: Citibank, N.A., New York
SWIFT: CITIUS33
A/C Citibank, N.A., London
A/C No. 10990765
SWIFT: CITIGB2L
for further credit to account:
10860263
Ref: GATS/Granite Master Issuer
plc.
Account for Payments in GBP: Citibank, N.A., London
A/C No. 10860255
Sort Code 18-50-08
Ref: GATS/Granite Master Issuer
plc.
F. Notice Details:
Floating Rate Payer I: Barclays Bank PLC
Address: 5, The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile Number: +44 207 773 4932
Attention: Derivatives Director, Legal
Division
Floating Rate Payer II: Granite Master Issuer plc
Address: Fifth Floor
100 Wood Street
London
EC2V 7EX
With a copy to: Northern Rock plc
Northern Rock House
Gosforth
Newcastle upon Tyne
6
NE3 4PL
Facsimile Number: +44 (0)191 279 4929
Attention: Andy McLean / Claire Blackett
With a copy to the The Bank of New York
Issuer Security Trustee:
Address: One Canada Square
48th Floor
London
E14 5AL
Facsimile Number: +44 (0)20 7964 6399
G. Offices: The Office of Party A is London.
H. Additional Termination Event:
For the purposes of Section 5(b)(v), the following event shall constitute an
Additional Termination Event:
Barclays Bank PLC fails to provide the financial statements with the US
Securities and Exchange Commission ("SEC") as required to be filed by Party
B in respect of Barclays Bank PLC pursuant to Regulation AB as promulgated
by the SEC. For the purposes of this Additional Termination Event, Barclays
Bank PLC shall be the sole Affected Party.
I. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in Part 5(h)(iii) falling after
the words "will not then fall due" are incorporated into this
Confirmation and the square brackets are accordingly deleted.
1.2 The words in the square brackets at the end of Part 5(h)(v) falling
after the words "of any shortfall" are incorporated into this
Confirmation and the square brackets are accordingly deleted.
2. If the payment of any Floating Amount I is deferred in accordance
with Part 5(h)(iii) of the Schedule to the Agreement, then the
amount so deferred (the "Floating Amount I Deferred Amount")
shall, subject to the terms of this Confirmation, be payable on
the next Floating Rate Payer I Payment Date (the "Floating Amount
I Deferred Payment Date") (together with interest thereon (the
"Floating Amount I Deferred Interest") at the Floating Rate Payer
I Floating Rate for the relevant Calculation Period) and the
Floating Amount I due on such Floating Amount I Deferred Payment
Date shall be deemed to include the Floating Amount I Deferred
Amounts and the Floating Amount I Deferred Interest.
If the payment of any Floating Amount II is deferred in
accordance with Part 5(h)(iii) the Agreement, then the amount so
deferred (the "Floating Amount II
7
Deferred Amount") shall, subject to the terms of this
Confirmation, be payable on the next Floating Rate Payer II
Payment Date (the "Floating Amount II Deferred Payment Date")
(together with interest thereon (the "Floating Amount II Deferred
Interest") at the Floating Rate Payer II Floating Rate for the
relevant Calculation Period) and the Floating Amount II due on
such Floating Amount II Deferred Payment Date shall be deemed to
include the Floating Amount II Deferred Amounts and the Floating
Amount II Deferred Interest.
2.1 For the avoidance of doubt, Part 5(h)(iii) applies to payments under
this Confirmation.
Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.
Yours faithfully
Barclays Bank PLC
By: /s/ J. Martin
Name: JONATHAN MARTIN
Title: AUTHORISED SIGNATORY
By:
Name:
Title:
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ Ian Bowden
Name: Ian Bowden
Title: Representing L.D.C. Securitisation Director No 1 Limited
8
Barclays Bank PLC Cross-Currency Confirmation (Class B2)
Execution Version
From: Barclays Bank PLC
5, The North Colonnade
Canary Wharf
London
E14 4BB
Attention: Derivatives Director, Legal Division
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
19 September 2006
Dear Sirs,
Re: Cross Currency Swap Transaction relating to the Issuer Notes
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction").
It is agreed that upon the execution of this Confirmation, we shall be
deemed to have entered into an agreement relating to the Issuer Notes on the
terms of the Agreed Form Agreement (the "Agreement") dated as of the Trade
Date specified below.
"Agreed Form Agreement" means the form of 1992 ISDA Master Agreement
(Multicurrency Cross Border) (including the Schedule thereto and the ISDA
Credit Support Annex (Bilateral Form - Transfer) forming part of the
Schedule) and signed for the purposes of identification by Sidley Austin and
Barclays Bank PLC on 24 January 2006.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the Agreement. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified herein.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this
Confirmation will govern. References herein to a "Transaction" shall be
deemed to be references to a "Swap Transaction" for the purposes of the
Definitions. Any terms not otherwise defined herein or in the Definitions
shall have the meanings given to them in the Programme Master Definitions
Schedule signed for the purposes of identification by Sidley Austin Brown &
Wood (now known as Sidley Austin) and Allen & Overy LLP on 19 January 2005
(as the same may be amended, restated, varied or supplemented from time to
time with the consent of the parties hereto), and the Issuer Master
Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood (now
known as Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the
same may be amended, restated, varied or supplemented from time to time with
the consent of the parties hereto). The Issuer Master Definitions Schedule
shall prevail to the extent that it conflicts with the Master Definitions
Schedule.
In this Confirmation:
"Conditions" means the terms and conditions of the Issuer Notes, as set out
in the Base Prospectus dated 12 September 2006 and the Final Terms dated 15
September 2006 (as each may be amended, restated, varied, supplemented
and/or otherwise modified from time to time in accordance with the
provisions of the Issuer Trust Deed), and any reference to a numbered
Condition shall be construed accordingly; and
"Issuer Notes" means the Granite Master Issuer plc USD 182,000,000 Series
2006-3 Class B2 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Party A: Barclays Bank PLC
Party B: Granite Master Issuer plc.
Trade Date: 13 September 2006.
Effective Date: 19 September 2006.
Termination Date: The earlier of (a) the Floating
Rate Payer I Payment Date
falling in December 2054; (b)
any other date on which the
Issuer Notes are redeemed in
full accordance with their
terms; and (c) the date on which
the Issuer Security Trustee has
fully enforced the security
under the Issuer Deed of Charge
and distributed the full
proceeds thereof in accordance
with the Issuer Post-Enforcement
Priority of Payments.
Exchange Rate: GBP 1.00: USD 1.8730.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I: Party A.
Floating Rate Payer I On any Floating Rate Payer I
Payment Date, USD 182,000,000
less the
2
Currency Amount: aggregate of the Floating Rate
Payer I Interim Exchange Amounts
paid prior to such date.
Floating Rate Payer I Each Note Payment Date (as defined
Payment Dates: in the Conditions).
Floating Rate Payer I LIBOR (as defined in the
Floating Rate Option: Conditions).
Floating Rate Payer I 3 months; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates;
or 1 month, in the event that
the frequency of the Floating
Rate Payer I Payment Dates alter
to monthly due to the occurrence
of a Pass-Through Trigger Event
or Step-Up Date.
Floating Rate Payer I Spread: 0.17 per cent. per annum for the
Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.34 per
cent. per annum.
Floating Rate Payer I Actual/360.
Floating Rate Day Count Fraction:
Floating Rate Payer I The first day of each Calculation
Reset Dates: Period.
Floating Amounts II:
Floating Rate Payer II: Party B.
Floating Rate Payer II On any Floating Rate Payer II
Currency Amount: Payment Date,GBP 97,170,315.00
less the aggregate of the
Floating Rate Payer II Interim
Exchange Amounts paid prior to
such date.
Floating Rate Payer II The 20th day of each calendar
Payment Dates: month in each year during the
Term from, and including,
January 2007 to, but excluding,
the Termination Date, subject to
adjustment in accordance with
the Following Business Day
3
Convention and the Termination
Date.
Floating Rate Payer II GBP-LIBOR-BBA.
Floating Rate Option:
Floating Rate Payer II 3 months; except in respect of the
Designated Maturity: initial Calculation Period for
which Linear Interpolation is
applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates;
or 1 month, following the
occurrence of a Pass-Through
Trigger Event or Step-Up Date.
Floating Rate Payer II Spread: 0.1686 per cent. per annum for
the Calculation Periods up to
and including the Calculation
Period ending on, but excluding,
the Payment Date falling in
October 2012; and thereafter
0.4875 per cent. per annum.
Floating Rate Payer II Actual/365 (Fixed).
Floating Rate Day Count Fraction:
Floating Rate Payer II The first day of each Calculation
Reset Dates: Period; provided however, that
in respect of every Floating
Rate Payer II Calculation Period
(other than the first
Calculation Period and any
Calculation Period following the
occurrence of a Pass-Through
Trigger Event or Step-Up Date)
that does not start on a Note
Payment Date (as defined in the
Issuer Notes), the Floating Rate
in effect for such Calculation
Period shall be the Floating
Rate for the immediately
preceding Floating Rate Payer II
Calculation Period.
Calculation Agent: Party A.
Business Days: London and New York.
B. Initial Exchange:
Initial Exchange Date: Effective Date.
Party A Initial Exchange Amount: GBP 97,170,315.00.
4
Party B Initial Exchange Amount: USD 182,000,000.
C. Interim Exchange:
Interim Exchange Dates: Each Note Payment Date (as
defined in the Conditions) on
which a USD Amortisation Amount
is payable.
Floating Rate Payer I In respect of an Interim Exchange
Interim Exchange Amount: Date, theamount in USD (if any)
equal to the principal amount of
the Issuer Notes required to be
so repaid, prepaid or otherwise
redeemed (howsoever described)
in accordance with the
Conditions and as determined by
the Cash Manager pursuant to the
Issuer Cash Management
Agreement; and notified to the
Calculation Agent by the Issuer
Cash Manager pursuant to the
Issuer Cash Management Agreement
(the "USD Amortisation Amount").
Floating Rate Payer II In respect of any Interim Exchange
Interim Exchange Amount: Date, an amount in GBP equal to
the Floating Rate Payer I
Interim Exchange Amount
converted into GBP at the
Exchange Rate.
D. Final Exchange:
Final Exchange Date: The Termination Date.
Floating Rate Payer I A USD amount equal to the Floating
Final Exchange Amount: Rate Payer II Final Exchange
Amount converted into USD at the
Exchange Rate.
Floating Rate Payer II The Floating Rate Payer II
Final Exchange Amount: Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in USD: Federal Reserve Bank of New York,
New York
ABA No: 026-0025-74
Account: Barclays Bank plc,
New York
5
Favor: Barclays Swaps &
Options
Group, New York
Account No.: 050-01922-8
Account for Payments in GBP: Barclays Bank PLC, 54 Lombard
Street London
Sort Code: 20-00-00
Swift: BARCGB22
Account: Barclays Swaps
Account No.: 00152021
Payments to Floating Rate Payer II:
Account for Payments in USD: Citibank, N.A., New York
SWIFT: CITIUS33
A/C Citibank, N.A., London
A/C No. 10990765
SWIFT: CITIGB2L
for further credit to account:
10860263
Ref: GATS/Granite Master Issuer
plc.
Account for Payments in GBP: Citibank, N.A., London
A/C No. 10860255
Sort Code 18-50-08
Ref: GATS/Granite Master Issuer
plc.
F. Notice Details:
Floating Rate Payer I: Barclays Bank PLC
Address: 5, The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile Number: +44 207 773 4932
Attention: Derivatives Director, Legal
Division
Floating Rate Payer II: Granite Master Issuer plc
Address: Fifth Floor
100 Wood Street
London
EC2V 7EX
With a copy to: Northern Rock plc
Northern Rock House
Gosforth
Newcastle upon Tyne
6
NE3 4PL
Facsimile Number: +44 (0)191 279 4929
Attention: Andy McLean / Claire Blackett
With a copy to the The Bank of New York
Issuer Security Trustee:
Address: One Canada Square
48th Floor
London
E14 5AL
Facsimile Number: +44 (0)20 7964 6399
G. Offices: The Office of Party A is London.
H. Additional Termination Event:
For the purposes of Section 5(b)(v), the following event shall constitute an
Additional Termination Event:
Barclays Bank PLC fails to provide the financial statements with the US
Securities and Exchange Commission ("SEC") as required to be filed by Party
B in respect of Barclays Bank PLC pursuant to Regulation AB as promulgated
by the SEC. For the purposes of this Additional Termination Event, Barclays
Bank PLC shall be the sole Affected Party.
I. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in Part 5(h)(iii) falling after
the words "will not then fall due" are incorporated into this
Confirmation and the square brackets are accordingly deleted.
1.2 The words in the square brackets at the end of Part 5(h)(v) falling
after the words "of any shortfall" are incorporated into this
Confirmation and the square brackets are accordingly deleted.
2. If the payment of any Floating Amount I is deferred in accordance
with Part 5(h)(iii) of the Schedule to the Agreement, then the
amount so deferred (the "Floating Amount I Deferred Amount")
shall, subject to the terms of this Confirmation, be payable on
the next Floating Rate Payer I Payment Date (the "Floating Amount
I Deferred Payment Date") (together with interest thereon (the
"Floating Amount I Deferred Interest") at the Floating Rate Payer
I Floating Rate for the relevant Calculation Period) and the
Floating Amount I due on such Floating Amount I Deferred Payment
Date shall be deemed to include the Floating Amount I Deferred
Amounts and the Floating Amount I Deferred Interest.
If the payment of any Floating Amount II is deferred in
accordance with Part 5(h)(iii) the Agreement, then the amount so
deferred (the "Floating Amount II
7
Deferred Amount") shall, subject to the terms of this
Confirmation, be payable on the next Floating Rate Payer II
Payment Date (the "Floating Amount II Deferred Payment Date")
(together with interest thereon (the "Floating Amount II Deferred
Interest") at the Floating Rate Payer II Floating Rate for the
relevant Calculation Period) and the Floating Amount II due on
such Floating Amount II Deferred Payment Date shall be deemed to
include the Floating Amount II Deferred Amounts and the Floating
Amount II Deferred Interest.
2.1 For the avoidance of doubt, Part 5(h)(iii) applies to payments under
this Confirmation.
Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.
Yours faithfully
Barclays Bank PLC
By: /s/ J. Martin
Name: JONATHAN MARTIN
Title: AUTHORISED SIGNATORY
By:
Name:
Title:
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ Ian Bowden
Name: Ian Bowden
Title: Representing L.D.C. Securitisation Director No 1 Limited
8
Barclays Bank PLC Cross-Currency Confirmation (Class M1)
Execution Version
From: Barclays Bank PLC
5, The North Colonnade
Canary Wharf
London
E14 4BB
Attention: Derivatives Director, Legal Division
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
19 September 2006
Dear Sirs,
Re: Cross Currency Swap Transaction relating to the Issuer Notes
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction").
It is agreed that upon the execution of this Confirmation, we shall be deemed to
have entered into an agreement relating to the Issuer Notes on the terms of the
Agreed Form Agreement (the "Agreement") dated as of the Trade Date specified
below.
"Agreed Form Agreement" means the form of 1992 ISDA Master Agreement
(Multicurrency Cross Border) (including the Schedule thereto and the ISDA Credit
Support Annex (Bilateral Form - Transfer) forming part of the Schedule) and
signed for the purposes of identification by Sidley Austin and Barclays Bank PLC
on 24 January 2006.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the Agreement. All provisions
contained in the Agreement govern this Confirmation except as expressly modified
herein.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the
meanings given to them in the Programme Master Definitions Schedule signed for
the purposes of identification by Sidley Austin Brown & Wood (now known as
Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same may be
amended, restated, varied or supplemented from time to time with the consent
of the parties hereto), and the Issuer Master Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood (now
known as Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same
may be amended, restated, varied or supplemented from time to time with the
consent of the parties hereto). The Issuer Master Definitions Schedule shall
prevail to the extent that it conflicts with the Master Definitions Schedule.
In this Confirmation:
"Conditions" means the terms and conditions of the Issuer Notes, as set out in
the Base Prospectus dated 12 September 2006 and the Final Terms dated 15
September 2006 (as each may be amended, restated, varied, supplemented and/or
otherwise modified from time to time in accordance with the provisions of the
Issuer Trust Deed), and any reference to a numbered Condition shall be construed
accordingly; and
"Issuer Notes" means the Granite Master Issuer plc USD 90,000,000 Series 2006-3
Class M1 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Party A: Barclays Bank PLC
Party B: Granite Master Issuer plc.
Trade Date: 13 September 2006.
Effective Date: 19 September 2006.
Termination Date: The earlier of (a) the Floating Rate
Payer I Payment Date falling in
December 2054; (b) any other date on
which the Issuer Notes are redeemed
in full accordance with their terms;
and (c) the date on which the Issuer
Security Trustee has fully enforced
the security under the Issuer Deed
of Charge and distributed the full
proceeds thereof in accordance with
the Issuer Post-Enforcement Priority
of Payments.
Exchange Rate: GBP 1.00: USD 1.8730.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I: Party A.
Floating Rate Payer I On any Floating Rate Payer I Payment
Date, USD 90,000,000 less the
2
Currency Amount: aggregate of the Floating Rate Payer
I Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer I Each Note Payment Date (as defined
Payment Dates: in the Conditions).
Floating Rate Payer I LIBOR (as defined in the
Floating Rate Option: Conditions).
Floating Rate Payer I 3 months; except in respect of
Designated Maturity: the initial Calculation Period
for which Linear Interpolation
is applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates;
or 1 month, in the event that
the frequency of the Floating
Rate Payer I Payment Dates alter
to monthly due to the occurrence
of a Pass-Through Trigger Event
or Step-Up Date.
Floating Rate Payer I Spread: 0.18 per cent. per annum for the
Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.36 per cent.
per annum.
Floating Rate Payer I Actual/360.
Floating Rate Day Count
Fraction:
Floating Rate Payer I The first day of each Calculation
Reset Dates: Period.
Floating Amounts II:
Floating Rate Payer II: Party B.
Floating Rate Payer II On any Floating Rate Payer II
Currency Amount: Payment Date, GBP 48,051,254.67 less
the aggregate of the Floating Rate
Payer II Interim Exchange Amounts
paid prior to such date.
Floating Rate Payer II The 20th day of each calendar month
Payment Dates: in each year during the Term from,
and including, January 2007 to, but
excluding, the Termination Date,
subject to adjustment in accordance
with the Following Business Day
3
Convention and the Termination Date.
Floating Rate Payer II GBP-LIBOR-BBA.
Floating Rate Option:
Floating Rate Payer II 3 months; except in respect of the
Designated Maturity: initial Calculation Period for which
Linear Interpolation is applicable
and in respect of which the Linear
Interpolation shall be applied by
reference to the 4 month and 5 month
rates; or 1 month, following the
occurrence of a Pass-Through Trigger
Event or Step-Up Date.
Floating Rate Payer II Spread: 0.1765 per cent. per annum for the
Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.5030 per
cent. per annum.
Floating Rate Payer II Actual/365 (Fixed).
Floating Rate Day Count Fraction:
Floating Rate Payer II The first day of each Calculation
Reset Dates: Period; provided however, that in
respect of every Floating Rate Payer
II Calculation Period (other than
the first Calculation Period and any
Calculation Period following the
occurrence of a Pass-Through Trigger
Event or Step-Up Date) that does not
start on a Note Payment Date (as
defined in the Issuer Notes), the
Floating Rate in effect for such
Calculation Period shall be the
Floating Rate for the immediately
preceding Floating Rate Payer II
Calculation Period.
Calculation Agent: Party A.
Business Days: London and New York.
B. Initial Exchange:
Initial Exchange Date: Effective Date.
Party A Initial Exchange Amount: GBP 48,051,254.67.
4
Party B Initial Exchange Amount: USD 90,000,000.
C. Interim Exchange:
Interim Exchange Dates: Each Note Payment Date (as defined
in the Conditions) on which a USD
Amortisation Amount is payable.
Floating Rate Payer I In respect of an Interim Exchange
Interim Exchange Amount: Date, the amount in USD (if any)
equal to the principal amount of the
Issuer Notes required to be so
repaid, prepaid or otherwise
redeemed (howsoever described) in
accordance with the Conditions and
as determined by the Cash Manager
pursuant to the Issuer Cash
Management Agreement; and notified
to the Calculation Agent by the
Issuer Cash Manager pursuant to the
Issuer Cash Management Agreement
(the "USD Amortisation Amount").
Floating Rate Payer II In respect of any Interim Exchange
Interim Exchange Amount: Date, an amount in GBP equal to the
Floating Rate Payer I Interim
Exchange Amount converted into GBP
at the Exchange Rate.
D. Final Exchange:
Final Exchange Date: The Termination Date.
Floating Rate Payer I A USD amount equal to the Floating
Final Exchange Amount: Rate Payer II Final Exchange Amount
converted into USD at the Exchange
Rate.
Floating Rate Payer II The Floating Rate Payer II Currency
Final Exchange Amount: Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in USD: Federal Reserve Bank of New York,
New York
ABA No: 026-0025-74
Account: Barclays Bank plc,
New York
5
Favor: Barclays Swaps & Options
Group, New York
Account No.: 050-01922-8
Account for Payments in GBP: Barclays Bank PLC, 54 Lombard
Street London
Sort Code: 20-00-00
Swift: BARCGB22
Account: Barclays Swaps
Account No.: 00152021
Payments to Floating Rate Payer II:
Account for Payments in USD: Citibank, N.A., New York
SWIFT: CITIUS33
A/C Citibank, N.A., London
A/C No. 10990765
SWIFT: CITIGB2L
for further credit to
account: 10860263
Ref: GATS/Granite Master Issuer plc.
Account for Payments in GBP: Citibank, N.A., London
A/C No. 10860255
Sort Code 18-50-08
Ref: GATS/Granite Master Issuer plc.
F. Notice Details:
Floating Rate Payer I: Barclays Bank PLC
Address: 5, The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile Number: +44 207 773 4932
Attention: Derivatives Director, Legal Division
Floating Rate Payer II: Granite Master Issuer plc
Address: Fifth Floor
100 Wood Street
London
EC2V 7EX
With a copy to: Northern Rock plc
Northern Rock House
Gosforth
Newcastle upon Tyne
6
NE3 4PL
Facsimile Number: +44 (0)191 279 4929
Attention: Andy McLean / Claire Blackett
With a copy to the The Bank of New York
Issuer Security Trustee:
Address: One Canada Square
48th Floor
London
E14 5AL
Facsimile Number: +44 (0)20 7964 6399
G. Offices: The Office of Party A is London.
H. Additional Termination Event:
For the purposes of Section 5(b)(v), the following event shall constitute an
Additional Termination Event:
Barclays Bank PLC fails to provide the financial statements with the US
Securities and Exchange Commission ("SEC") as required to be filed by Party B in
respect of Barclays Bank PLC pursuant to Regulation AB as promulgated by the
SEC. For the purposes of this Additional Termination Event, Barclays Bank PLC
shall be the sole Affected Party.
I. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in Part 5(h)(iii) falling after the
words "will not then fall due" are incorporated into this Confirmation
and the square brackets are accordingly deleted.
1.2 The words in the square brackets at the end of Part 5(h)(v) falling
after the words "of any shortfall" are incorporated into this
Confirmation and the square brackets are accordingly deleted.
2. If the payment of any Floating Amount I is deferred in accordance with
Part 5(h)(iii) of the Schedule to the Agreement, then the amount so
deferred (the "Floating Amount I Deferred Amount") shall, subject to
the terms of this Confirmation, be payable on the next Floating Rate
Payer I Payment Date (the "Floating Amount I Deferred Payment Date")
(together with interest thereon (the "Floating Amount I Deferred
Interest") at the Floating Rate Payer I Floating Rate for the relevant
Calculation Period) and the Floating Amount I due on such Floating
Amount I Deferred Payment Date shall be deemed to include the Floating
Amount I Deferred Amounts and the Floating Amount I Deferred Interest.
If the payment of any Floating Amount II is deferred in accordance with
Part 5(h)(iii) the Agreement, then the amount so deferred (the
"Floating Amount II
7
Deferred Amount") shall, subject to the terms of this Confirmation, be
payable on the next Floating Rate Payer II Payment Date (the "Floating
Amount II Deferred Payment Date") (together with interest thereon (the
"Floating Amount II Deferred Interest") at the Floating Rate Payer II
Floating Rate for the relevant Calculation Period) and the Floating
Amount II due on such Floating Amount II Deferred Payment Date shall be
deemed to include the Floating Amount II Deferred Amounts and the
Floating Amount II Deferred Interest.
2.1 For the avoidance of doubt, Part 5(h)(iii) applies to payments under
this Confirmation.
Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.
Yours faithfully
Barclays Bank PLC
By: /s/ J. Martin
Name: JONATHAN MARTIN
Title: AUTHORISED SIGNATORY
By:
Name:
Title:
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ Ian Bowden
Name: Ian Bowden
Title: Representing L.D.C. Securitisation Director No 1 Limited
8
Barclays Bank PLC Cross-Currency Confirmation (Class M2)
Execution Version
UK1 1318951v.1
From: Barclays Bank PLC
5, The North Colonnade
Canary Wharf
London
E14 4BB
Attention: Derivatives Director, Legal Division
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
19 September 2006
Dear Sirs,
Re: Cross Currency Swap Transaction relating to the Issuer Notes
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction").
It is agreed that upon the execution of this Confirmation, we shall be deemed to
have entered into an agreement relating to the Issuer Notes on the terms of the
Agreed Form Agreement (the "Agreement") dated as of the Trade Date specified
below.
"Agreed Form Agreement" means the form of 1992 ISDA Master Agreement
(Multicurrency Cross Border) (including the Schedule thereto and the ISDA Credit
Support Annex (Bilateral Form - Transfer) forming part of the Schedule) and
signed for the purposes of identification by Sidley Austin and Barclays Bank PLC
on 24 January 2006.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the Agreement. All provisions
contained in the Agreement govern this Confirmation except as expressly modified
herein.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the meanings
given to them in the Programme Master Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood (now
known as Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same
may be amended, restated, varied or supplemented from time to time with the
consent of the parties hereto), and the Issuer Master Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood (now
known as Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same
may be amended, restated, varied or supplemented from time to time with the
consent of the parties hereto). The Issuer Master Definitions Schedule shall
prevail to the extent that it conflicts with the Master Definitions Schedule.
In this Confirmation:
"Conditions" means the terms and conditions of the Issuer Notes, as set out in
the Base Prospectus dated 12 September 2006 and the Final Terms dated 15
September 2006 (as each may be amended, restated, varied, supplemented and/or
otherwise modified from time to time in accordance with the provisions of the
Issuer Trust Deed), and any reference to a numbered Condition shall be construed
accordingly; and
"Issuer Notes" means the Granite Master Issuer plc USD 100,000,000 Series 2006-3
Class M2 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Party A: Barclays Bank PLC
Party B: Granite Master Issuer plc.
Trade Date: 13 September 2006.
Effective Date: 19 September 2006.
Termination Date: The earlier of (a) the Floating Rate
Payer I Payment Date falling in
December 2054; (b) any other date on
which the Issuer Notes are redeemed
in full accordance with their terms;
and (c) the date on which the Issuer
Security Trustee has fully enforced
the security under the Issuer Deed
of Charge and distributed the full
proceeds thereof in accordance with
the Issuer Post-Enforcement Priority
of Payments.
Exchange Rate: GBP 1.00: USD 1.8730.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I: Party A.
Floating Rate Payer I On any Floating Rate Payer I Payment
Currency Amount: Date, USD 100,000,000 less the
2
Currency Amount: aggregate of the Floating Rate Payer
I Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer I Each Note Payment Date (as defined
Payment Dates: in the Conditions).
Floating Rate Payer I LIBOR (as defined in the
Floating Rate Option: Conditions).
Floating Rate Payer I 3 months; except in respect of
Designated Maturity: the initial Calculation Period
for which Linear Interpolation
is applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates;
or 1 month, in the event that
the frequency of the Floating
Rate Payer I Payment Dates alter
to monthly due to the occurrence
of a Pass-Through Trigger Event
or Step-Up Date.
Floating Rate Payer I Spread: 0.28 per cent. per annum for the
Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.56 per cent.
per annum.
Floating Rate Payer I Actual/360.
Floating Rate Day Count
Fraction:
Floating Rate Payer I The first day of each Calculation
Reset Dates: Period.
Floating Amounts II:
Floating Rate Payer II: Party B.
Floating Rate Payer II On any Floating Rate Payer II
Currency Amount: Payment Date, GBP 53,390,282.97 less
the aggregate of the Floating Rate
Payer II Interim Exchange Amounts
paid prior to such date.
Floating Rate Payer II The 20th day of each calendar month
Payment Dates: in each year during the Term from,
and including, January 2007 to, but
excluding, the Termination Date,
subject to adjustment in accordance
with the Following Business Day
3
Convention and the Termination Date.
Floating Rate Payer II GBP-LIBOR-BBA.
Floating Rate Option:
Floating Rate Payer II 3 months; except in respect of the
Designated Maturity: initial Calculation Period for which
Linear Interpolation is applicable
and in respect of which the Linear
Interpolation shall be applied by
reference to the 4 month and 5 month
rates; or 1 month, following the
occurrence of a Pass-Through Trigger
Event or Step-Up Date.
Floating Rate Payer II Spread: 0.2934 per cent. per annum for the
Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.7368 per
cent. per annum.
Floating Rate Payer II Actual/365 (Fixed).
Floating Rate Day Count Fraction:
Floating Rate Payer II The first day of each Calculation
Reset Dates: Period; provided however, that in
respect of every Floating Rate Payer
II Calculation Period (other than
the first Calculation Period and any
Calculation Period following the
occurrence of a Pass-Through Trigger
Event or Step-Up Date) that does not
start on a Note Payment Date (as
defined in the Issuer Notes), the
Floating Rate in effect for such
Calculation Period shall be the
Floating Rate for the immediately
preceding Floating Rate Payer II
Calculation Period.
Calculation Agent: Party A.
Business Days: London and New York.
B. Initial Exchange:
Initial Exchange Date: Effective Date.
Party A Initial Exchange Amount: GBP 53,390,282.97.
4
Party B Initial Exchange Amount: USD 100,000,000.
C. Interim Exchange:
Interim Exchange Dates: Each Note Payment Date (as defined
in the Conditions) on which a USD
Amortisation Amount is payable.
Floating Rate Payer I In respect of an Interim Exchange
Interim Exchange Amount: Date, the amount in USD (if any)
equal to the principal amount of the
Issuer Notes required to be so
repaid, prepaid or otherwise
redeemed (howsoever described) in
accordance with the Conditions and
as determined by the Cash Manager
pursuant to the Issuer Cash
Management Agreement; and notified
to the Calculation Agent by the
Issuer Cash Manager pursuant to the
Issuer Cash Management Agreement
(the "USD Amortisation Amount").
Floating Rate Payer II In respect of any Interim Exchange
Interim Exchange Amount: Date, an amount in GBP equal to the
Floating Rate Payer I Interim
Exchange Amount converted into GBP
at the Exchange Rate.
D. Final Exchange:
Final Exchange Date: The Termination Date.
Floating Rate Payer I A USD amount equal to the Floating
Final Exchange Amount: Rate Payer II Final Exchange Amount
converted into USD at the Exchange
Rate.
Floating Rate Payer II The Floating Rate Payer II Currency
Final Exchange Amount: Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in USD: Federal Reserve Bank of New York,
New York
ABA No: 026-0025-74
Account: Barclays Bank plc,
New York
5
Favor: Barclays Swaps & Options
Group, New York
Account No.: 050-01922-8
Account for Payments in GBP: Barclays Bank PLC, 54 Lombard
Street London
Sort Code: 20-00-00
Swift: BARCGB22
Account: Barclays Swaps
Account No.: 00152021
Payments to Floating Rate Payer II:
Account for Payments in USD: Citibank, N.A., New York
SWIFT: CITIUS33
A/C Citibank, N.A., London
A/C No. 10990765
SWIFT: CITIGB2L
for further credit to
account: 10860263
Ref: GATS/Granite Master Issuer plc.
Account for Payments in GBP: Citibank, N.A., London
A/C No. 10860255
Sort Code 18-50-08
Ref: GATS/Granite Master Issuer plc.
F. Notice Details:
Floating Rate Payer I: Barclays Bank PLC
Address: 5, The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile Number: +44 207 773 4932
Attention: Derivatives Director, Legal Division
Floating Rate Payer II: Granite Master Issuer plc
Address: Fifth Floor
100 Wood Street
London
EC2V 7EX
With a copy to: Northern Rock plc
Northern Rock House
Gosforth
Newcastle upon Tyne
6
NE3 4PL
Facsimile Number: +44 (0)191 279 4929
Attention: Andy McLean / Claire Blackett
With a copy to the The Bank of New York
Issuer Security Trustee:
Address: One Canada Square
48th Floor
London
E14 5AL
Facsimile Number: +44 (0)20 7964 6399
G. Offices: The Office of Party A is London.
H. Additional Termination Event:
For the purposes of Section 5(b)(v), the following event shall constitute an
Additional Termination Event:
Barclays Bank PLC fails to provide the financial statements with the US
Securities and Exchange Commission ("SEC") as required to be filed by Party B in
respect of Barclays Bank PLC pursuant to Regulation AB as promulgated by the
SEC. For the purposes of this Additional Termination Event, Barclays Bank PLC
shall be the sole Affected Party.
I. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in Part 5(h)(iii) falling after the
words "will not then fall due" are incorporated into this Confirmation
and the square brackets are accordingly deleted.
1.2 The words in the square brackets at the end of Part 5(h)(v) falling
after the words "of any shortfall" are incorporated into this
Confirmation and the square brackets are accordingly deleted.
2. If the payment of any Floating Amount I is deferred in accordance with
Part 5(h)(iii) of the Schedule to the Agreement, then the amount so
deferred (the "Floating Amount I Deferred Amount") shall, subject to
the terms of this Confirmation, be payable on the next Floating Rate
Payer I Payment Date (the "Floating Amount I Deferred Payment Date")
(together with interest thereon (the "Floating Amount I Deferred
Interest") at the Floating Rate Payer I Floating Rate for the relevant
Calculation Period) and the Floating Amount I due on such Floating
Amount I Deferred Payment Date shall be deemed to include the Floating
Amount I Deferred Amounts and the Floating Amount I Deferred Interest.
If the payment of any Floating Amount II is deferred in accordance with
Part 5(h)(iii) the Agreement, then the amount so deferred (the
"Floating Amount II
7
Deferred Amount") shall, subject to the terms of this Confirmation, be
payable on the next Floating Rate Payer II Payment Date (the "Floating
Amount II Deferred Payment Date") (together with interest thereon (the
"Floating Amount II Deferred Interest") at the Floating Rate Payer II
Floating Rate for the relevant Calculation Period) and the Floating
Amount II due on such Floating Amount II Deferred Payment Date shall be
deemed to include the Floating Amount II Deferred Amounts and the
Floating Amount II Deferred Interest.
2.1 For the avoidance of doubt, Part 5(h)(iii) applies to payments under
this Confirmation.
Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.
Yours faithfully
Barclays Bank PLC
By: /s/ J. Martin
Name: JONATHAN MARTIN
Title: AUTHORISED SIGNATORY
By:
Name:
Title:
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ Ian Bowden
Name: Ian Bowden
Title: Representing L.D.C. Securitisation Director No 1 Limited
8
Barclays Bank PLC Cross-Currency Confirmation (Class C2)
Execution Version
From: Barclays Bank PLC
5, The North Colonnade
Canary Wharf
London
E14 4BB
Attention: Derivatives Director, Legal Division
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
19 September 2006
Dear Sirs,
Re: Cross Currency Swap Transaction relating to the Issuer Notes
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction").
It is agreed that upon the execution of this Confirmation, we shall be deemed to
have entered into an agreement relating to the Issuer Notes on the terms of the
Agreed Form Agreement (the "Agreement") dated as of the Trade Date specified
below.
"Agreed Form Agreement" means the form of 1992 ISDA Master Agreement
(Multicurrency Cross Border) (including the Schedule thereto and the ISDA Credit
Support Annex (Bilateral Form - Transfer) forming part of the Schedule) and
signed for the purposes of identification by Sidley Austin and Barclays Bank PLC
on 24 January 2006.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the Agreement. All provisions
contained in the Agreement govern this Confirmation except as expressly modified
herein.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the meanings
given to them in the Programme Master Definitions Schedule signed for the
purposes of identification by Sidley Austin Brown & Wood (now known as Sidley
Austin) and Allen & Overy LLP on 19 January 2005 (as the same may be amended,
restated, varied or supplemented from time to time with the consent of the
parties hereto), and the Issuer Master Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood (now
known as Sidley Austin) and Allen & Overy LLP on 19 January 2005 (as the same
may be amended, restated, varied or supplemented from time to time with the
consent of the parties hereto). The Issuer Master Definitions Schedule shall
prevail to the extent that it conflicts with the Master Definitions Schedule.
In this Confirmation:
"Conditions" means the terms and conditions of the Issuer Notes, as set out in
the Base Prospectus dated 12 September 2006 and the Final Terms dated 15
September 2006 (as each may be amended, restated, varied, supplemented and/or
otherwise modified from time to time in accordance with the provisions of the
Issuer Trust Deed), and any reference to a numbered Condition shall be construed
accordingly; and
"Issuer Notes" means the Granite Master Issuer plc USD 60,000,000 Series 2006-3
Class C2 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Party A: Barclays Bank PLC
Party B: Granite Master Issuer plc.
Trade Date: 13 September 2006.
Effective Date: 19 September 2006.
Termination Date: The earlier of (a) the Floating Rate
Payer I Payment Date falling in
December 2054; (b) any other date on
which the Issuer Notes are redeemed
in full accordance with their terms;
and (c) the date on which the Issuer
Security Trustee has fully enforced
the security under the Issuer Deed
of Charge and distributed the full
proceeds thereof in accordance with
the Issuer Post-Enforcement Priority
of Payments.
Exchange Rate: GBP 1.00: USD 1.8730.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I: Party A.
Floating Rate Payer I On any Floating Rate Payer I Payment
Date, USD 60,000,000 less the
2
Currency Amount: aggregate of the Floating Rate Payer
I Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer I Each Note Payment Date (as defined
Payment Dates: in the Conditions).
Floating Rate Payer I LIBOR (as defined in the
Floating Rate Option: Conditions).
Floating Rate Payer I 3 months; except in respect of
Designated Maturity: the initial Calculation Period
for which Linear Interpolation
is applicable and in respect of
which the Linear Interpolation
shall be applied by reference to
the 4 month and 5 month rates;
or 1 month, in the event that
the frequency of the Floating
Rate Payer I Payment Dates alter
to monthly due to the occurrence
of a Pass-Through Trigger Event
or Step-Up Date.
Floating Rate Payer I Spread: 0.50 per cent. per annum for the
Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 1.00 per cent.
per annum.
Floating Rate Payer I Actual/360.
Floating Rate Day Count
Fraction:
Floating Rate Payer I The first day of each Calculation
Reset Dates: Period.
Floating Amounts II:
Floating Rate Payer II: Party B.
Floating Rate Payer II On any Floating Rate Payer II
Currency Amount: Payment Date, GBP 32,034,169.78 less
the aggregate of the Floating Rate
Payer II Interim Exchange Amounts
paid prior to such date.
Floating Rate Payer II The 20th day of each calendar month
Payment Dates: in each year during the Term from,
and including, January 2007 to, but
excluding, the Termination Date,
subject to adjustment in accordance
with the Following Business Day
3
Convention and the Termination Date.
Floating Rate Payer II GBP-LIBOR-BBA.
Floating Rate Option:
Floating Rate Payer II 3 months; except in respect of the
Designated Maturity: initial Calculation Period for which
Linear Interpolation is applicable
and in respect of which the Linear
Interpolation shall be applied by
reference to the 4 month and 5 month
rates; or 1 month, following the
occurrence of a Pass-Through Trigger
Event or Step-Up Date.
Floating Rate Payer II Spread: 0.5250 per cent. per annum for the
Calculation Periods up to and
including the Calculation Period
ending on, but excluding, the
Payment Date falling in October
2012; and thereafter 0.7368 per
cent. per annum.
Floating Rate Payer II Actual/365 (Fixed).
Floating Rate Day Count Fraction:
Floating Rate Payer II The first day of each Calculation
Reset Dates: Period; provided however, that in
respect of every Floating Rate Payer
II Calculation Period (other than
the first Calculation Period and any
Calculation Period following the
occurrence of a Pass-Through Trigger
Event or Step-Up Date) that does not
start on a Note Payment Date (as
defined in the Issuer Notes), the
Floating Rate in effect for such
Calculation Period shall be the
Floating Rate for the immediately
preceding Floating Rate Payer II
Calculation Period.
Calculation Agent: Party A.
Business Days: London and New York.
B. Initial Exchange:
Initial Exchange Date: Effective Date.
Party A Initial Exchange Amount: GBP 32,034,169.78.
4
Party B Initial Exchange Amount: USD 60,000,000.
C. Interim Exchange:
Interim Exchange Dates: Each Note Payment Date (as defined
in the Conditions) on which a USD
Amortisation Amount is payable.
Floating Rate Payer I In respect of an Interim Exchange
Interim Exchange Amount: Date, the amount in USD (if any)
equal to the principal amount of the
Issuer Notes required to be so
repaid, prepaid or otherwise
redeemed (howsoever described) in
accordance with the Conditions and
as determined by the Cash Manager
pursuant to the Issuer Cash
Management Agreement; and notified
to the Calculation Agent by the
Issuer Cash Manager pursuant to the
Issuer Cash Management Agreement
(the "USD Amortisation Amount").
Floating Rate Payer II In respect of any Interim Exchange
Interim Exchange Amount: Date, an amount in GBP equal to the
Floating Rate Payer I Interim
Exchange Amount converted into GBP
at the Exchange Rate.
D. Final Exchange:
Final Exchange Date: The Termination Date.
Floating Rate Payer I A USD amount equal to the Floating
Final Exchange Amount: Rate Payer II Final Exchange Amount
converted into USD at the Exchange
Rate.
Floating Rate Payer II The Floating Rate Payer II Currency
Final Exchange Amount: Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in USD: Federal Reserve Bank of New York,
New York
ABA No: 026-0025-74
Account: Barclays Bank plc,
New York
5
Favor: Barclays Swaps & Options
Group, New York
Account No.: 050-01922-8
Account for Payments in GBP: Barclays Bank PLC, 54 Lombard
Street London
Sort Code: 20-00-00
Swift: BARCGB22
Account: Barclays Swaps
Account No.: 00152021
Payments to Floating Rate Payer II:
Account for Payments in USD: Citibank, N.A., New York
SWIFT: CITIUS33
A/C Citibank, N.A., London
A/C No. 10990765
SWIFT: CITIGB2L
for further credit to
account: 10860263
Ref: GATS/Granite Master Issuer plc.
Account for Payments in GBP: Citibank, N.A., London
A/C No. 10860255
Sort Code 18-50-08
Ref: GATS/Granite Master Issuer plc.
F. Notice Details:
Floating Rate Payer I: Barclays Bank PLC
Address: 5, The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile Number: +44 207 773 4932
Attention: Derivatives Director, Legal Division
Floating Rate Payer II: Granite Master Issuer plc
Address: Fifth Floor
100 Wood Street
London
EC2V 7EX
With a copy to: Northern Rock plc
Northern Rock House
Gosforth
Newcastle upon Tyne
6
NE3 4PL
Facsimile Number: +44 (0)191 279 4929
Attention: Andy McLean / Claire Blackett
With a copy to the The Bank of New York
Issuer Security Trustee:
Address: One Canada Square
48th Floor
London
E14 5AL
Facsimile Number: +44 (0)20 7964 6399
G. Offices: The Office of Party A is London.
H. Additional Termination Event:
For the purposes of Section 5(b)(v), the following event shall constitute an
Additional Termination Event:
Barclays Bank PLC fails to provide the financial statements with the US
Securities and Exchange Commission ("SEC") as required to be filed by Party B in
respect of Barclays Bank PLC pursuant to Regulation AB as promulgated by the
SEC. For the purposes of this Additional Termination Event, Barclays Bank PLC
shall be the sole Affected Party.
I. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in Part 5(h)(iii) falling after the
words "will not then fall due" are incorporated into this Confirmation
and the square brackets are accordingly deleted.
1.2 The words in the square brackets at the end of Part 5(h)(v) falling
after the words "of any shortfall" are incorporated into this
Confirmation and the square brackets are accordingly deleted.
2. If the payment of any Floating Amount I is deferred in accordance with
Part 5(h)(iii) of the Schedule to the Agreement, then the amount so
deferred (the "Floating Amount I Deferred Amount") shall, subject to
the terms of this Confirmation, be payable on the next Floating Rate
Payer I Payment Date (the "Floating Amount I Deferred Payment Date")
(together with interest thereon (the "Floating Amount I Deferred
Interest") at the Floating Rate Payer I Floating Rate for the relevant
Calculation Period) and the Floating Amount I due on such Floating
Amount I Deferred Payment Date shall be deemed to include the Floating
Amount I Deferred Amounts and the Floating Amount I Deferred Interest.
If the payment of any Floating Amount II is deferred in accordance with
Part 5(h)(iii) the Agreement, then the amount so deferred (the
"Floating Amount II
7
Deferred Amount") shall, subject to the terms of this Confirmation, be
payable on the next Floating Rate Payer II Payment Date (the "Floating
Amount II Deferred Payment Date") (together with interest thereon (the
"Floating Amount II Deferred Interest") at the Floating Rate Payer II
Floating Rate for the relevant Calculation Period) and the Floating
Amount II due on such Floating Amount II Deferred Payment Date shall be
deemed to include the Floating Amount II Deferred Amounts and the
Floating Amount II Deferred Interest.
2.1 For the avoidance of doubt, Part 5(h)(iii) applies to payments under
this Confirmation.
Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.
Yours faithfully
Barclays Bank PLC
By: /s/ J. Martin
Name: JONATHAN MARTIN
Title: AUTHORISED SIGNATORY
By:
Name:
Title:
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ Ian Bowden
Name: Ian Bowden
Title: Representing L.D.C. Securitisation Director No 1 Limited
8