Exhibit 10.3
Agreed Form Cover Sheet
dated 18 May 2007,
attaching:
1. the form of 1992 ISDA Master Agreement (Multicurrency -- Cross Border);
2. the Agreed Form Schedule thereto (Sidley, Austin document number:
1675619 v.4);
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 (Sidley Austin document number: 1682929v.4)
to the CSA pre-printed form,
between
(1) CREDIT SUISSE INTERNATIONAL; and
(2) GRANITE MASTER ISSUER plc, and
signed for the purpose of identification by:
/s/ PB /s/ Ulrike Schefe
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Parminder Bains Ulrike Schefe
Vice President Authorised Signatory
CREDIT SUISSE INTERNATIONAL
on 18 May 2007; and
/s/ Sidley Austin (UK) LLP
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SIDLEY AUSTIN (UK) LLP
on 18 May 2007.
(Multicurrency -- Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of the Effective Date specified in the Confirmation
Credit Suisse International Granite Master Issuer plc
("Party A") and ("Party B")
- ---------------------------- ----------------------------
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.
(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;
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(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 (II) a
Change in Tax Law
(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
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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))
(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.
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(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
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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 11, 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, 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;
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(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 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: --
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(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 Upon Merger if the event is specified
8
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 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 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
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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.
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)(1), (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)(1) 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
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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)(I) 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
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
specifying
11
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 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
12
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 (II) 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).
13
(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
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
14
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 the 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.
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
15
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 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:
16
(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 1(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
17
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 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 from 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
18
(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 funding the relevant amount plus 1% per annum.
"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).
"Indemnifable 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
19
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)(1) 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 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
20
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-off" 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.
21
"Specified Entity" has the meanings specified in the Schedule.
"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.
"Specified 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 of any
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 11:00 a.m. (in the city in which such foreign exchange
agent is located) on such date as would be customary for the
22
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 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.
Credit Suisse International Granite Master Issuer plc
................................... .........................................
(Name of Party) (Name of Party)
By: ............................. By: ....................................
Name: Name:
Title: Title:
Date: Date:
23
Credit Suisse International/Granite Master Issuer plc
Cross Currency/Interest Rate Agreed Form ISDA Schedule
Agreed Form Version: 18.05.2007.
Agreed Form Schedule
(Multicurrency - Cross Border)
SCHEDULE
to the
1992 ISDA
MASTER AGREEMENT
dated as of the Effective Date specified in the Confirmation,
between
(1) CREDIT SUISSE INTERNATIONAL ("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.
"Specified Indebtedness" will have the meaning specified in Section 14
of this Agreement.
24
"Threshold Amount" means, with respect to Party A, an amount equal to,
three percent (3%) of the shareholders' equity (excluding deposits) of
Party A (as shown in the most recent audited financial statements of
Party A).
(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)(iii) and Part 5(m)(v) of this Agreement.
25
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.
26
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 document Form/Document/ Certificate Date by which to be delivered
None None None
(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 signatory's On signing of this Agreement Yes
Party B authority
Party B Certified copy of On signing of this Agreement Yes
board resolution
Party A Legal opinion of counsel (in form and On signing of this Agreement No
substance satisfactory to Party B)
Party B Legal opinion of counsel (in form and On signing of this Agreement No
substance satisfactory to Party A)
Party A An executed original of the Credit On signing of this Agreement No
Support Document listed in Part 4(f)
below
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: One Cabot Square
London E14 4QJ
27
England
Attention: (1) Head of Credit Risk Management
(2) Managing Director - Operations Department
(3) Managing Director - Legal Department
Facsimile No.: +44 20 7888 2686
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
Telephone No.: +44 20 7888 2028
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.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:-
28
Party A is not a Multibranch Party.
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 Effective Date
specified in the Confirmation (the "Credit Support Annex") and any
Eligible Guarantee.
In respect of Party B: none.
(g) Credit Support Provider.
Credit Support Provider means, in relation to Party A, the guarantor
under any Eligible Guarantee.
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.
29
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 or
this Schedule. 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
30
winding-up or liquidation or the making of an administration order
against it and such proceeding or petition results in a judgment of
insolvency or bankruptcy or the making of an order for its winding-up,
administration or liquidation, provided that such proceedings or
petitions are not instituted by Party A or any of its Affiliates;"
(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[, except that: in the case of (i), if the event described therein
occurs on or after the Termination Date (as defined in the
Confirmation), there shall be deemed to be two Affected Parties for the
purposes only of Section 6(b)(iv)] (1).
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.
(C) Withholding Tax Event:
The following shall constitute an Additional Termination Event:
- ---------
(1) The words in square brackets will be incorporated into the Confirmation
only 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.
31
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 (l) be required to make a payment from which an amount is
required to be deducted or withheld for or on account of United Kingdom
Tax or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a United Kingdom Tax (except
in each case in respect of interest under Section 2(e), 6(d)(ii) or
6(e)). In respect of such Additional Termination Event, all Transactions
affected by the occurrence of such Additional Termination Event will be
Affected Transactions. For the purposes of the foregoing, United Kingdom
Tax means any Tax imposed or assessed by or within the United Kingdom or
any authority therein or thereof having power to tax.
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 60 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 Additional 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 60 day period,
whereupon the other party may effect a transfer to any person or entity
within 70 days after the notice is given under Section 6(b)(i) so that
such Additional Termination Event ceases to exist.
Any such transfer by a party under this Part 5(f)(C) will be
subject to and conditional upon the prior written consent of the other
party (the "Consenting Party"), which consent will not be unreasonably
withheld. Such consent will be considered "reasonably withheld" if such
other party's policies in effect at such time would prevent it from
entering into a novation of a transaction with the transferee on the
terms proposed. The Consenting Party shall provide the transferring
party under this Part 5(f)(C) any such assistance and cooperation as may
reasonably be required by the transferring party to effect such a
transfer.
(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)
32
save as otherwise expressly set out in the Issuer Deed of Charge,
no sum shall 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 (other than pursuant to Section 6) 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)](2), (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
- ---------
(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.
33
A or by Party B, as the case may be, under this Agreement) will be
deemed to 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)](3).
(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
- ---------
(3) 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.
34
(B) subject to Part 5(u), 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.
(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); (k)(i)(C) or (k)(i)(D) 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.
(iii) Additional Termination Events
Without prejudice to the consequences of Party A breaching any
provision of this Agreement (other than this paragraph (j)) or
failing to post collateral under the Credit Support Annex in
accordance with Moody's Criteria or the Fitch Criteria, 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 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
35
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) Moody's Definitions
"Moody's Short-term Rating" means a rating assigned by Moody's
under its short-term rating scale in respect of an entity's
short-term, unsecured and unsubordinated debt obligations.
"Relevant Entities" means Party A and any guarantor under an
Eligible Guarantee in respect of all of Party A's present and
future obligations under this Agreement.
the "Moody's First Rating Trigger Requirements" shall apply so
long as no Relevant Entity has the Moody's First Trigger Required
Ratings
An entity shall have the "Moody's First Trigger Required Ratings"
(A) where such entity is the subject of a Moody's Short-term
Rating, if such rating is "Prime-1" and its long-term, unsecured
and unsubordinated debt or counterparty obligations are rated "A2"
or above by Moody's and (B) where such entity is not the subject
of a Moody's Short-term Rating, if its long-term,
36
unsecured and unsubordinated debt or counterparty obligations are
rated "A1" or above by Moody's.
the "Moody's Second Rating Trigger Requirements" shall apply so
long as no Relevant Entity has the Moody's Second Trigger Required
Ratings.
An entity shall have the "Moody's Second Trigger Required Ratings"
(A) where such entity is the subject of a Moody's Short-term
Rating, if such rating is "Prime-2" or above and its long-term,
unsecured and unsubordinated debt or counterparty obligations are
rated "A3" or above by Moody's and (B) where such entity is not
the subject of a Moody's Short-term Rating, if its long-term,
unsecured and unsubordinated debt or counterparty obligations are
rated "A3" or above by Moody's.
(ii) Subsequent Moody's Note Downgrade Event
So long as the Moody's Second Rating Trigger Requirements apply,
Party A will at its own cost use commercially reasonable efforts
to, as soon as reasonably practicable, procure either (A) an
Eligible Guarantee in respect of all of Party A's present and
future obligations under this Agreement to be provided by a
guarantor with the First Trigger Required Ratings and/or the
Second Trigger Required Ratings or (B) a transfer in accordance
with Part 5(u) below.
(iii) Additional Termination Events and Event of Default
Without prejudice to any Event of Default resulting from a failure to
post collateral under the Credit Support Annex in accordance with the
S&P Criteria or the Fitch Criteria, any failure by Party A to comply
with or perform any obligation to be complied with or performed by Party
A under the Credit Support Annex shall not be an Event of Default unless
(A) the Moody's Second Rating Trigger Requirements apply and at least 30
Local Business Days have elapsed since the last time the Moody's Second
Rating Trigger Requirements did not apply and (B) such failure is not
remedied on or before the third Local Business Day after notice of such
failure is given to Party A.
Each of the following shall constitute an Additional Termination Event
with Party A as Affected Party:
Moody's First Rating Trigger Collateral. Party A has failed to comply
with or perform any obligation to be complied with or performed by Party
A in accordance with the Credit Support Annex and either (A) the Moody's
Second Rating Trigger Requirements do not apply or (B) less than 30
Local Business Days have elapsed since the last time the Moody's Second
Rating Trigger Requirements did not apply.
Moody's Second Rating Trigger Replacement. (A) The Moody's Second Rating
Trigger Requirements apply and 30 or more Local Business Days have
elapsed since the last time the Moody's Second Rating Trigger
Requirements did not apply and (B) at least one Eligible Replacement has
provided a Market Quotation on the basis that paragraphs (i) and (ii) of
Part 5(w) below (Close-Out Calculations) apply (which remains capable of
becoming legally binding upon acceptance).
37
(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) subject to Part 5(u) 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
(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.
(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
38
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
(m)(ii)(A) and thereafter, on a periodic basis on every
fifth Local Business Day whilst collateral is being provided
pursuant to this sub-paragraph (m)(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) subject to Part 5(u), 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
(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.
(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) Subject to Part 5(u), 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,
39
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
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).
(v) Additional Termination Events
Without prejudice to the consequences of Party A breaching any
provision of this Agreement (other than this paragraph (l)) or
failing to post collateral under the Credit Support Annex in
accordance with Moody's Criteria or the S&P Criteria, 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
40
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):
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, or
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,
or 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,
or 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
41
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
(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."
42
(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
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,
43
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)
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.
44
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:
"; 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 is an Eligible Replacement
(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 without being
required to pay a Gross Up Amount in respect of such Tax;
(d) a Termination Event or an Event of Default does not occur
under this Agreement as a result of such transfer;
45
(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 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) Modifications to close-out provisions
Unless otherwise specified in a Confirmation, "Market Quotation" and
"Second Method" will apply for the purpose of Section 6(e) of this
Agreement.
Notwithstanding Section 6 of this Agreement, so long as Party A is (A)
the Affected Party in respect of an Additional Termination Event or (B)
the Defaulting Party in respect of any Event of Default, paragraphs (i)
to (vi) below shall apply:
(i) The definition of "Market Quotation" shall be deleted in its
entirety and replaced with the following:
""Market Quotation" means, with respect to one or more Terminated
Transactions, a Firm Offer which is (1) made by a Reference Market-maker
that is an Eligible Replacement, (2) for an amount that would be paid to
Party B (expressed as a negative number) or by Party B (expressed as a
positive number) in consideration of an agreement between Party B and
such 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 Transactions or
group of Terminated Transactions that would, but for the occurrence of
the relevant Early Termination Date, have been required after that Date,
(3) made on the basis that Unpaid Amounts in respect of the Terminated
Transaction or group of 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 and (4) made in respect of a Replacement Transaction
with terms substantially the same as those of this Agreement (save for
the exclusion of provisions relating to Transactions that are not
Terminated Transactions)."
46
(ii) The definition of "Settlement Amount" shall be deleted in its
entirety and replaced with the following:
""Settlement Amount" means, with respect to any Early Termination Date,
an amount (as determined by Party B) equal to the Termination Currency
Equivalent of the amount (whether positive or negative) of any Market
Quotation for the relevant Terminated Transaction or group of Terminated
Transactions that is accepted by Party B so as to become legally
binding, Provided that:
(1) If, on the day falling ten Local Business Days after the day on
which the Early Termination Date is designated or such later day
as Party B may specify in writing to Party A (but in either case
no later than the Early Termination Date) (such day the "Latest
Settlement Amount Determination Day"), no Market Quotation for the
relevant Terminated Transaction or group of Terminated
Transactions has been accepted by Party B so as to become legally
binding and one or more Market Quotations have been communicated
to Party B and remain capable of becoming legally binding upon
acceptance by Party B, the Settlement Amount shall equal the
Termination Currency Equivalent of the amount (whether positive or
negative) of the lowest of such Market Quotations (for the
avoidance of doubt, the lowest of such Market Quotations shall be
the lowest Market Quotation of such Market Quotations expressed as
a positive number or, if any of such Market Quotations is
expressed as a negative number, the Market Quotation expressed as
a negative number with the largest absolute value); and
(2) If, on the Latest Settlement Amount Determination Day, no Market
Quotation for the relevant Terminated Transaction or group of
Terminated Transactions is accepted by Party B so as to become
legally binding and no Market Quotations have been communicated to
Party B and remain capable of becoming legally binding upon
acceptance by Party B, the Settlement Amount shall equal Party B's
Loss (whether positive or negative and without reference to any
Unpaid amounts) for the relevant Terminated Transaction or group
of Terminated Transactions.
(3) For the purpose of paragraph (4) of the definition of Market
Quotation, Party B shall determine in its sole discretion, acting
in a commercially reasonable manner, whether a Firm Offer is made
in respect of a Replacement Transaction with terms substantially
the same as those of this Agreement (save for the exclusion of
provisions relating to Transactions that are not Terminated
Transactions).
(4) At any time on or before the Latest Settlement Amount
Determination Day at which two or more Market Quotations have been
communicated to Party B and remain capable of becoming legally
binding upon acceptance by Party B, Party B shall be entitled to
accept only the lowest of such Market Quotations (for the
avoidance of doubt, the lowest of such Market Quotations shall be
the lowest Market Quotation of such Market Quotations expressed as
a positive number or, if any of such Market Quotations is
expressed as a negative number, the Market Quotation expressed as
a negative number with the largest absolute value).
47
(5) if Party B requests Party A in writing to obtain Market
Quotations, Party A shall use its reasonable efforts to do so
before the Latest Settlement Amount Determination Day.
(6) If the Settlement Amount is a negative number, Section 6(e)(i)(3)
of this Agreement shall be deleted in its entirety and replaced
with the following:
"Second Method and Market Quotation. If Second Method and Market
Quotation apply, (1) Party B shall pay to Party A an amount equal
to the absolute value of the Settlement Amount in respect of the
Terminated Transactions, (2) Party B shall pay to Party A the
Termination Currency Equivalent of the Unpaid Amounts owing to
Party A and (3) Party A shall pay to Party B the Termination
Currency Equivalent of the Unpaid Amounts owing to Party B,
Provided that, (i) the amounts payable under (2) and (3) shall be
subject to netting in accordance with Section 2(c) of this
Agreement and (ii) notwithstanding any other provision of this
Agreement, any amount payable by Party A under (3) shall not be
netted-off against any amount payable by Party B under (1)."
(x) Definitions
"Eligible Guarantee" means an unconditional and irrevocable guarantee
that is provided by a guarantor as principal debtor rather than surety
and is directly enforceable by Party B, where either (A) a law firm has
given a legal opinion confirming that none of the guarantor's payments
to Party B under such guarantee will be subject to withholding for Tax
or (B) such guarantee provides that, in the event that any of such
guarantor's payments to Party B are subject to withholding for Tax, such
guarantor is required to pay such additional amount as is necessary to
ensure that the net amount actually received by Party B (free and clear
of any withholding tax) will equal the full amount Party B would have
received had no such withholding been required.
"Eligible Replacement" means an entity (I) (A) with the Moody's First
Trigger Required Ratings and/or the Second Trigger Required Ratings or
(B) whose present and future obligations owing to Party B are guaranteed
pursuant to an Eligible Guarantee provided by a guarantor with the the
Moody's Second Trigger Required Ratings and (II) (A) whose short-term,
unsecured and unsubordinated debt obligations are rated not less than
"A-1+" by S&P and "F1" by Fitch or (B) whose obligations under this
Agreement are guaranteed by an entity whose short-term, unsecured and
unsubordinated debt obligations are then rated not less than "A-1+" by
S&P and "F1"by Fitch.
"Firm Offer" means an offer which, when made, was capable of becoming
legally binding upon acceptance.
(y) Moody's Notifications
Notwithstanding any other provision of this Agreement, this Agreement
shall not be amended, no Early Termination Date shall be effectively
designated by Party B, and no transfer of any rights or obligations
under this Agreement shall be made unless
48
Moody's has been given prior written notice of such amendment,
designation or transfer
49
(Bilateral Form - Transfer)(1) (ISDA Agreements Subject to English Law)(2)
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA Master Agreement
dated as of the Effective Date specified in the Confirmation
------------------------------------------------
between
Credit Suisse International and Granite Master Issuer plc
--------------------------- -------------------------
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 other 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
- ---------
(1) This document is not intended to create a charge or other security
interest over the assets transferred under its terms. Persons intending to
establish a collateral arrangement based on the creation of a charge or other
security interest should consider using the ISDA Credit Support Deed (English
law) or the ISDA Credit Support Annex (New York law), as appropriate.
(2) This Credit Support Annex has been prepared for use with ISDA Master
Agreements subject to English law. Users should consult their legal advisers
as to the proper use and effect of this form and the arrangements it
contemplates. In particular, users should consult their legal advisers if they
with to have the Credit Support Annex made subject to a governing law other
than English law or to have the Credit Support Annex subject to a different
governing law than that governing the rest of the ISDA Master Agreement (e.g.,
English law for the Credit Support Annex and New York law for the rest of the
ISDA Master Agreement.)
Copyright(C) 1995 by International Swaps and Derivatives Association, Inc.
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 either 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 either 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
2
ISDA(R) 1995
(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:
3
ISDA(R) 1995
(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 by the Valuation Agent or a 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
4
ISDA(R) 1995
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 an 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
5
ISDA(R) 1995
Equivalent Distributions) that it 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 a 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 a 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 amount 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,
6
ISDA(R) 1995
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.
"Distributions 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 I1(b)(ii) including, in relation
to any securities, if applicable, the proceeds of any redemption in whole or
in part 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
7
ISDA(R) 1995
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 no 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
8
ISDA(R) 1995
(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)(i).
"Valuation Percentage" means, for any item of Eligible Credit Support, the
percentage specified in Paragraph 11(b)(ii).
9
ISDA(R) 1995
"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.
10
ISDA(R) 1995
Paragraph 11. Elections and Variables
(a) Base Currency and Eligible Currency.
(i) "Base Currency" means Pounds Sterling.
(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 Base Currency, the Valuation
Percentage in respect of S&P and Fitch for each item listed as Eligible
Credit Support 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"), which, in the case of S&P, will be
6% or such lower percentage as agreed by the parties and approved by
S&P.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) (A) "Delivery Amount" has the meaning specified in Paragraph
2(a), as amended (I) by deleting the words "upon a demand
made by the Transferee on or promptly following a Valuation
Date" and inserting in lieu thereof the words "not later
than the close of business on each Valuation Date" and (II)
by deleting in its entirety the sentence beginning "Unless
otherwise specified in Paragraph 11(b)" and inserting in
lieu thereof the following:
The "Delivery Amount" applicable to the Transferor for any
Valuation Date will equal the greatest of:
(1) the amount by which (a) the Credit Support Amount
(calculated according to the Fitch Criteria) for such
Valuation Date exceeds (b) the Value (determined using
the Fitch Valuation Percentages in Paragraph
11(b)(ii)) as of such 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);
(2) the amount by which (a) the Credit Support Amount
(calculated according to Moody's Criteria) for such
Valuation Date exceeds (b) the Value (determined using
the applicable Moody's Valuation Percentages in
Paragraph 11(b)(ii)) as of such 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); and
(3) the amount by which (a) the Credit Support Amount
(calculated according to the S&P Criteria) for such
Valuation Date exceeds (b) the Value (determined using
the S&P's Valuation Percentages in Paragraph
11(b)(ii)) as of such 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
11
completed and for which the relevant Settlement Day
falls on or after such Valuation Date)."
Provided that, in respect of any Valuation Date, the Value
of the Eligible Credit Support to be transferred under
Paragraph 2(a) shall be calculated using the applicable
Valuation Percentages for the rating agency whose criteria
have resulted in the greatest amount under (1), (2) and (3)
above.
Provided further that if, in respect of any Valuation Date,
the Delivery Amount is greater than zero, the Transferor
will transfer to the Transferee sufficient Eligible Credit
Support to ensure that, immediately following such transfer,
none of the amounts calculated under (1), (2) and (3) of
this Paragraph 11(b)(i)(A) shall be greater than zero.
(B) "Return Amount" has the meaning specified in Paragraph 2(b)
as amended by deleting in its entirety the sentence
beginning "Unless otherwise specified in Paragraph 11(b)"
and inserting in lieu thereof the following:
The "Return Amount" applicable to the Transferee for any
Valuation Date will equal the least of:
(1) the amount by which (a) the Value (determined using
the Fitch Valuation Percentages in Paragraph
11(b)(ii)) as of such 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 (b) the Credit Support Amount
(calculated according to the Fitch Criteria) for such
Valuation Date,
(2) the amount by which (a) the Value (determined using
the Moody's Valuation Percentages in Paragraph
11(b)(ii)) as of such 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 (b) the Credit Support Amount
(calculated according to Moody's Criteria) for such
Valuation Date; and
(3) the amount by which (a) the Value (determined using
the S&P's Valuation Percentages in Paragraph
11(b)(ii)) as of such 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 (b) the Credit Support Amount
(calculated according to the S&P Criteria) for such
Valuation Date
Provided that, in respect of any Valuation Date, the Value
of the Eligible Credit Support to be transferred under
Paragraph 2(b) shall be calculated using the applicable
Valuation Percentages for the rating agency whose criteria
have resulted in the lowest amount under (1), (2) and (3) of
this Paragraph 11(b)(i)(B).
12
Provided further that in no event shall the Transferee be
required to transfer any Equivalent Credit Support under
Paragraph 2(b) if, immediately following such transfer, any
of the amounts calculated under (1), (2) and (3) of
Paragraph 11(b)(i)(A) (Delivery Amount) would be greater
than zero.
(C) "Credit Support Amount" has the meaning given to such term
in respect of the S&P Criteria, Moody's Criteria or Fitch
Criteria, as applicable, as set out in Paragraph 11(h)(v)
below.
(ii) Eligible Credit Support. For the purposes of S&P and Fitch the
following items will qualify as "Eligible Credit Support" for
Party A for the purpose of Moody's the collateral specified in
Appendix B will qualify as "Eligible Credit Support" for Party A
and Valuation Percentages shall apply as set out in such table.
Valuation Percentage
(A) cash in an Eligible Currency
100 per cent.
(B) negotiable debt obligations issued by the Government of the
United Kingdom 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 ") having a remaining time to
maturity of not more than one year;
for the purposes of S&P, 98.5 per cent.; for the purposes of
Fitch, the Advance Rate for the relevant type of obligation
and time to maturity as specified in the Appendix hereto (as
amended by Fitch from time to time) (the "Advance Rate").
(C) negotiable debt obligations issued by the Government of the
United Kingdom 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) having a remaining time to
maturity of more than one year but not more than 5 years;
for the purposes of S&P, 92 per cent.; and for the purposes
of Fitch, the Advance Rate.
(D) negotiable debt obligations issued by the Government of the
United Kingdom 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) having a remaining time to
maturity of more than 5 years but not more than 10 years;
for the purposes of S&P, for the purposes of Fitch, the
Advance Rate.
(E) negotiable debt obligations issued by the Government of the
United Kingdom 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) having a remaining time to
maturity of more than 10 years but not more than 15 years;
or
for the purposes of S&P, 77.5 per cent.; and for the
purposes of Fitch, the Advance Rate.
13
(F) such other items as agreed between Party A and the Rating
Agencies, from time to time, which Party B can lawfully
receive from, and transfer back to, Party A as required,
that will qualify as Eligible Credit Support.
such Valuation Percentage as agreed between Party A and the
Rating Agencies from time to time in respect of such
Eligible Credit Support.
(iii) Thresholds.
(A) "Independent Amount" means, for Party A and Party B, with
respect to each Transaction, zero.
(B) "Threshold" means, for Party A:
infinity, unless (I) any of an Initial S&P Rating Event, a
Subsequent S&P Rating Event, an Initial Fitch Rating Event,
a First Subsequent Fitch Rating Event or a Second Subsequent
Fitch Rating Event has occurred and is continuing and Party
A has not taken alternative action as contemplated by Part
5(k) or (m) of the Schedule to the Agreement, or (II) no
Relevant Entity has the Moody's First Trigger Required
Ratings and either (i) no Relevant Entity has had the
Moody's First Trigger Required Ratings since this Annex was
executed or (ii) at least 30 Local Business days have
elapsed since the last time a Relevant Entity had the
Moody's First Trigger Required Ratings, in which case the
Threshold for Party A 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 an Affected Party, the Minimum Transfer Amount with
respect to Party A shall be zero.
(D) "Rounding". The Delivery Amount will be rounded up to the
nearest integral multiple of GBP 10,000 and the Return
Amount will be rounded down to the nearest integral multiple
of GBP 10,000, 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).
14
(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 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 Page 118 or
any successor page for the relevant day at
the close of business in New York on such
day.
15
EUR For the relevant determination date,
"EONIA", which means the overnight rate as
calculated by the European Central Bank for
such day, as set forth on Telerate 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 Markets Brokers'
Association which appears on Telerate Page
3937 or any successor page under the
heading "Sterling Overnight Index" as of
9.00 a.m., London time, on the first London
Banking Day following that day.
(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)."
(v) "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 have received from time to time.
(vi) "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 would
have received Distributions or, if that date is not a Local
Business Day, the next following Local Business Day.
16
(g) Addresses for Transfers.
Party A: To be advised.
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:
"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: in respect of a transfer of
securities the first Local Business Day after the Demand
Date on which settlement of a trade in the relevant
securities, if effected on the Demand Date, would have
occurred 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 on
which such securities are principally traded (or, in either
case, if there is not such customary practice, on the first
Local Business Day after the Demand Date on which it is
reasonably practicable to deliver such securities); and in
respect of any other transfer 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;
(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; and
(iii) in the case of a transfer pursuant to Paragraph
5(c)(i), the Distribution Date.
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 of Paragraph 6 shall be deleted and replaced with
"Early Termination", the words "or a Termination Event where all
Transactions are Affected Transactions" shall be added after the
word "party" in the second line of Paragraph 6, and the words "or
an
17
Affected Party" shall be added after the words "Defaulting Party"
in the fourth line of Paragraph 6.
(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
Party A and Party B agree that, notwithstanding anything to the
contrary in this Annex, (a) the term "Transferee" as used in this
Annex means only Party B, and (b) the term "Transferor" as used in
this Annex means only Party A.
(v) "Ratings Criteria" means, for the purposes of determining the
amount of Eligible Credit Support that Party A is required to
transfer hereunder, the criteria used by S&P (as set out in S&P's
Structured Finance reports entitled "Standard & Poor's Global
Interest Rate and Currency Swap Counterparty Rating Criteria
Expanded" dated 17 December 2003 and "Global Interest Rate and
Currency Swaps: Calculating the Collateral Required Amount" dated
26 February 2004) ("S&P Criteria"), the criteria used by Moody's
as defined below ("Moody's Criteria") and/or the criteria used by
Fitch (as set out in Fitch's Structured Finance Report entitled
"Counterparty Risk in Structured Finance Transactions: Swap
Criteria" dated 13 September 2004) ("Fitch Criteria"), 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 "Transferee's Exposure" in the second line thereof shall be
replaced by "Moody's Collateral Amount".
For such purposes, "Moody's Collateral Amount" means:
(A) for so long as (A) no Relevant Entity has the First Trigger
Required Ratings and either (i) no Relevant Entity has had
the First Trigger Required Ratings since this Annex was
executed or (ii) at least 30 Local Business days have
elapsed since the last time a Relevant Entity had the First
Trigger Required Ratings and (B)(x) the Moody's Second
Rating Trigger Requirements do not apply or (y) less than 30
Local Business Days have elapsed since the last time the
Moody's Second Rating Trigger Requirements did not apply, an
amount equal to the greater of (a) zero and (b) the sum of
the Secured Party's aggregate Exposure and the aggregate of
the lesser of:
(x) the product of the 15 and DV01 for such Valuation
Date; and
(y) the product of 2.0% and the Notional Amount for the
Calculation Period which includes such Valuation Date;
18
(B) for so long as the Moody's Second Trigger Rating
Requirements do apply and 30 or more Local Business Days
have elapsed since the last time the Moody's Second Rating
Trigger Requirements did not apply, an amount equal to the
greatest of (a) zero, (b) the aggregate amount (if any) due
to be paid by Party A under this Agreement on the next
scheduled payment date and (c) the sum of the Secured
Party's aggregate Exposure and the aggregate of the lesser
of:
(x) the product of the 65 and DV01 for such Valuation
Date; and
(y) product of 10.0% and the Notional Amount for the
Calculation Period which includes such Valuation Date;
and
(C) at any other time, zero.
"DV01" means the sum of the estimated change in the Secured
Party's Exposure that would result from a one basis point change
in the relevant swap curve on such date, as determined by the
Valuation Agent in good faith and in a commercially reasonable
manner. The Valuation Agent shall, upon request of Party B,
provide to Party B a statement showing in reasonable detail such
calculation.
S&P Criteria
"Credit Support Amount" shall mean an amount calculated in
accordance with the following:
The definition of "Exposure" in Paragraph 10 with respect to Party
B shall be amended to mean the the following:
the sum of (A) the greater of zero and the aggregate of the
Unadjusted Exposures calculated with respect to each Transaction
plus (B) the aggregate Volatility Buffer Amount calculated with
respect to all such Transactions;
where, for purposes of the foregoing:
(A) "Unadjusted Exposure" means the Exposure of Party B as of any
date of determination calculated in accordance with the definition
of "Exposure" prior to amendment in accordance with the provisions
of this Paragraph 11(h)(v);
(B) "Volatility Buffer" means, with respect to any Transaction at
any time, the applicable percentage as specified in the applicable
table (taking into account the rating of the most senior class of
Notes, the rating of the short term senior unsecured debt
obligations of Party A and the remaining period to the Termination
Date of each Transaction at the time such Volatility Buffer falls
to be determined) set out in the publication by S&P dated 17
December 2003 entitled "Global Interest Rate and Currency Swaps:
Counterparty Rating Criteria expanded" and the publication by S&P
dated 26 February 2004 entitled "Global Interest Rate and Currency
Swaps: Calculating the Collateral Required Amount"(1):
(C) "Volatility Buffer Amount" means, with respect to any
Transaction at any time, the applicable Volatility Buffer
multiplied by the Notional Amount, in each case with respect to
such Transaction at such time.
19
(D) "Specified Debt Obligations" means unsecured and
unsubordinated debt obligations.
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 x 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 Ratings
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
"Exposure" has the meaning specified in Paragraph 10, except that (1)
after the word "Agreement" the words "(assuming, for this purpose only,
that Part 5(u) of the Schedule is deleted)" shall be inserted, (2) at
the end of the definition of Exposure, the words "with terms
substantially the same as those of this Agreement" shall be added and
(3) 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
20
quotation is obtained, the quotation representing the greatest amount of
the Transferee's Exposure shall be used by the Valuation Agent.
(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:
"Fitch" means Fitch Ratings Ltd and includes any successors
thereto;
"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 swap transaction entered
into pursuant to the Agreement as evidenced by the Confirmation.
"Transaction Notional Amount" means, in respect of a Valuation
Date, the Currency Amount applicable to Party A in respect of the
Transaction as at such Valuation Date.
21
APPENDIX A
Fitch Advance Rates
Negotiable debt obligations issued by
Negotiable debt obligations issued by the the Government of the United States of
Remaining Maturity (Years) Government of the United Kingdom (%) America (%)
0-1 97.5 97.5
1-3 94.7 94.7
3-5 91.5 91.5
5-7 88.8 89
7-10 86.3 86.3
10-15 86.7 83
22
APPENDIX B
Moody's Eligible Collateral and Valuation Percentages
- ------------------------------------------------------------------------------------------------------------------------------------
FIRST TRIGGER SECOND TRIGGER
- ------------------------------------------------------------------------------------------------------------------------------------
INSTRUMENT
- ------------------------------------------------------------------------------------------------------------------------------------
Sterling Cash 100% 100%
- ------------------------------------------------------------------------------------------------------------------------------------
EURO Cash 98% 97%
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Dollar Cash 97% 95%
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed-Rate Negotiable Treasury Debt Issued by The U.S. Treasury Department with Remaining Maturity
< 1 Year 97% 95%
1 to 2 years 97% 94%
2 to 3 years 97% 93%
3 to 5 years 97% 92%
5 to 7 years 97% 91%
7 to 10 years 97% 89%
10 to 20 years 97% 86%
> 20 years 97% 84%
Floating-Rate Negotiable Treasury Debt Issued by The U.S. Treasury Department
All Maturities 97% 94%
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed-Rate U.S. Agency Debentures with Remaining Maturity
< 1 Year 97% 94%
1 to 2 years 97% 94%
2 to 3 years 97% 93%
3 to 5 years 97% 91%
5 to 7 years 97% 90%
7 to 10 years 97% 88%
10 to 20 years 97% 85%
> 20 years 97% 83%
Floating-Rate U.S. Agency Debentures
All Maturities 97% 93%
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed-Rate Euro-Zone Government Bonds Rated Aa3 or Above with Remaining Maturity
< 1 Year 98% 97%
1 to 2 years 98% 96%
2 to 3 years 98% 95%
3 to 5 years 98% 93%
5 to 7 years 98% 92%
7 to 10 years 98% 91%
10 to 20 years 98% 86%
> 20 years 98% 84%
Floating-Rate Euro-Zone Government Bonds Rated Aa3 or Above
23
All Maturities 98% 96%
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed-Rate United Kingdom Gilts with Remaining Maturity
< 1 Year 100% 99%
1 to 2 years 100% 98%
2 to 3 years 100% 97%
3 to 5 years 100% 96%
5 to 7 years 100% 95%
7 to 10 years 100% 94%
10 to 20 years 100% 90%
> 20 years 100% 88%
Floating-Rate United Kingdom Gilts
All Maturities 100% 99%
- ------------------------------------------------------------------------------------------------------------------------------------
All other instruments zero or such other zero or such other
percentage in respect of percentage in respect of
which Moody's has delivered which Moody's has
a writted ratings delivered a writted
affirmation in relation to ratings affirmation in
the most senior rated notes relation to the most
senior rated notes
- ------------------------------------------------------------------------------------------------------------------------------------
For the purpose of the table above, the column headed "First Trigger" applies
for so long as (A) the Second Rating Trigger Requirements do not apply or (B)
less than 30 Local Business Days have elapsed since the last time the Second
Rating Trigger Requirements did not apply and the column headed "Second
Trigger" applies at any other time.
24
Cross-Currency Confirmation for Series 2007-2 (Class 1A2 Notes)
Execution Version
From: Credit Suisse International
One Cabot Square
London E14 4QJ
England
Attention: Settlements
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
23 May 2007
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 Effective 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 (UK) LLP and
Credit Suisse International on 18 May 2007.
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 (UK) LLP) 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 (UK)
LLP) 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 17 May 2007 and the Final Terms dated 18 May 2007
(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 EUR 325,000,000 Series
2007-02 Class 1A2 Notes due April 2032.
1 The terms of the particular Swap Transaction to which this Confirmation
relates are as follows:
Party A:
Credit Suisse International
Party B:
Granite Master Issuer plc.
Trade Date:
16 May 2007.
Effective Date:
23 May 2007.
Termination Date:
The Floating Rate Payer I Payment Date falling in April 2032.
Exchange Rate:
GBP 1.00: EUR 1.4608.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I:
Party A.
Floating Rate Payer I Currency Amount:
On any Floating Rate Payer I Payment Date, EUR 325,000,000 less the
aggregate of the Floating Rate Payer I Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer I Payment Dates:
Each Note Payment Date (as defined in the Conditions).
Floating Rate Payer I Floating Rate Option:
EURIBOR (as defined in the Conditions).
2
Floating Rate Payer I Designated Maturity:
3 months; except in respect of 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 1 month and 2 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 April 2012; and thereafter 0.08 per cent. per annum.
Floating Rate Payer I Floating Rate Day Count Fraction:
Actual/360.
Floating Rate Payer I Reset Dates:
The first day of each Calculation Period.
Floating Amounts II:
Floating Rate Payer II:
Party B.
Floating Rate Payer II Currency Amount:
On any Floating Rate Payer II Payment Date, GBP 222,480,832 less the
aggregate of the Floating Rate Payer II Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer II Payment Dates:
The 17th day of each calendar month in each year during the Term from,
and including, June 2007 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 Floating Rate Option:
GBP-LIBOR-BBA.
Floating Rate Payer II Designated Maturity:
3 months; except in respect of the 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 1 month and 2 month rates; or 1 month, following the
occurrence of a Pass-Through Trigger Event or Step-Up Date.
Floating Rate Payer II Spread:
0.00578 per cent. per annum for the Calculation Periods up to and
including the Calculation Period ending on, but excluding, the Payment
Date falling in April 2012; and thereafter 0.1616 per cent. per annum.
Floating Rate Payer II Floating Rate Day Count Fraction:
Actual/365 (Fixed).
Floating Rate Payer II Reset Dates:
The first day of each Calculation 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 TARGET
B. Initial Exchange:
Initial Exchange Date:
Effective Date.
Party A Initial Exchange Amount:
GBP 222,480,832.
Party B Initial Exchange Amount:
EUR 325,000,000.
C. Interim Exchange:
Interim Exchange Dates:
Each Note Payment Date (as defined in the Conditions) on which a EUR
4
Amortisation Amount is payable.
Floating Rate Payer I
Interim Exchange Amount:
In respect of an Interim Exchange Date, the amount in EUR (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 "EUR Amortisation
Amount").
Floating Rate Payer II
Interim Exchange Amount:
In respect of any Interim Exchange 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
Final Exchange Amount:
A EUR amount equal to the Floating Rate Payer II Final Exchange Amount
converted into EUR at the Exchange Rate.
Floating Rate Payer II
Final Exchange Amount:
The Floating Rate Payer II Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in EUR:
Correspondent: CITIGB2L -
Citibank London
Beneficiary: CSFPGB2L -
Credit Suisse International
Acc: 10403229
Account for Payments in GBP:
To be advised.
5
Payments to Floating Rate Payer II:
Account for Payments in EUR:
Citibank, N.A., London
A/C No. 10861537
SWIFT: CITIGB2L
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:
Credit Suisse International
Address:
One Cabot Square
London
E14 4QJ
Facsimile Number:
+65 6303 1187
Attention:
Settlements
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
Attention:
Andy McLean / Claire Blackett
With a copy to the Issuer Security Trustee:
The Bank of New York
Address:
One Canada Square
48th Floor
London
E14 5AL
6
Facsimile Number:
+44 (0)20 7964 6399
G. Offices:
The Office of Party A is London.
H. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in the last paragraph of Part 5(f)(A)
are incorporated into this Confirmation and the square brackets are
accordingly deleted.
1.2 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.
1.3 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.
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
Credit Suisse International
Yours faithfully
Credit Suisse International
By: /s/ PB
------------------------
Name: Parminder Bains
Title: Vice President
By: /s/ Laura Muir
------------------------
Name: Laura Muir
Title: Authorised Signatory
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ S. Tyson
------------------------
Name: Sharon Tyson
Title: Representing L.D.C. Securitisation
Director No 2 Limited
7
Cross-Currency Confirmation for Series 2007-2 (Class 3A2 Notes)
Execution Version
From: Credit Suisse International
One Cabot Square
London E14 4QJ
England
Attention: Settlements
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
23 May 2007
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 Effective 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 (UK) LLP and
Credit Suisse International on 18 May 2007.
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 (UK) LLP) 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 (UK)
LLP) 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 17 May 2007 and the Final Terms dated 18 May 2007
(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 EUR 1,000,000,000 Series
2007-02 Class 3A2 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this Confirmation
relates are as follows:
Party A:
Credit Suisse International
Party B:
Granite Master Issuer plc.
Trade Date:
16 May 2007.
Effective Date:
23 May 2007.
Termination Date:
The Floating Rate Payer I Payment Date falling in December 2054.
Exchange Rate:
GBP 1.00: EUR 1.4608.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I:
Party A.
Floating Rate Payer I Currency Amount:
On any Floating Rate Payer I Payment Date, EUR 1,000,000,000 less the
aggregate of the Floating Rate Payer I Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer I Payment Dates:
Each Note Payment Date (as defined in the Conditions).
Floating Rate Payer I Floating Rate Option:
EURIBOR (as defined in the Conditions).
2
Floating Rate Payer I Designated Maturity:
3 months; except in respect of 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 1 month and 2 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 April 2012; and thereafter 0.20 per cent. per annum.
Floating Rate Payer I Floating Rate Day Count Fraction:
Actual/360.
Floating Rate Payer I Reset Dates:
The first day of each Calculation Period.
Floating Amounts II:
Floating Rate Payer II:
Party B.
Floating Rate Payer II Currency Amount:
On any Floating Rate Payer II Payment Date, GBP 684,556,407 less the
aggregate of the Floating Rate Payer II Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer II Payment Dates:
The 17th day of each calendar month in each year during the Term from,
and including, June 2007 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 Floating Rate Option:
GBP-LIBOR-BBA.
Floating Rate Payer II Designated Maturity:
3 months; except in respect of the 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 1 month and 2 month rates; or 1 month, following the
occurrence of a Pass-Through Trigger Event or Step-Up Date.
Floating Rate Payer II Spread:
0.08483 per cent. per annum for the Calculation Periods up to and
including the Calculation Period ending on, but excluding, the Payment
Date falling in April 2012; and thereafter 0.3197 per cent. per annum.
Floating Rate Payer II Floating Rate Day Count Fraction:
Actual/365 (Fixed).
Floating Rate Payer II Reset Dates:
The first day of each Calculation 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 TARGET
B. Initial Exchange:
Initial Exchange Date:
Effective Date.
Party A Initial Exchange Amount:
GBP 684,556,407.
Party B Initial Exchange Amount:
EUR 1,000,000,000.
C. Interim Exchange:
Interim Exchange Dates:
Each Note Payment Date (as defined in the Conditions) on which a EUR
4
Amortisation Amount is payable.
Floating Rate Payer I
Interim Exchange Amount:
In respect of an Interim Exchange Date, the amount in EUR (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 "EUR Amortisation
Amount").
Floating Rate Payer II
Interim Exchange Amount:
In respect of any Interim Exchange 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
Final Exchange Amount:
A EUR amount equal to the Floating Rate Payer II Final Exchange Amount
converted into EUR at the Exchange Rate.
Floating Rate Payer II
Final Exchange Amount:
The Floating Rate Payer II Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in EUR:
Correspondent: CITIGB2L -
Citibank London
Beneficiary: CSFPGB2L -
Credit Suisse International
Acc: 10403229
Account for Payments in GBP:
To be advised.
5
Payments to Floating Rate Payer II:
Account for Payments in EUR:
Citibank, N.A., London
A/C No. 10861537
SWIFT: CITIGB2L
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:
Credit Suisse International
Address:
One Cabot Square
London
E14 4QJ
Facsimile Number:
+65 6303 1187
Attention:
Settlements
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
Attention:
Andy McLean / Claire Blackett
With a copy to the Issuer Security Trustee:
The Bank of New York
Address:
One Canada Square
48th Floor
London
E14 5AL
Facsimile Number:
+44 (0)20 7964 6399
6
G. Offices:
The Office of Party A is London.
H. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in the last paragraph of Part 5(f)(A)
are incorporated into this Confirmation and the square brackets are
accordingly deleted.
1.2 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.
1.3 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.
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
Credit Suisse International
By: /s/ PB
------------------------
Name: Parminder Bains
Title: Vice President
By: /s/ Laura Muir
------------------------
Name: Laura Muir
Title: Authorised Signatory
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ S. Tyson
------------------------
Name: Sharon Tyson
Title: Representing L.D.C.
Securitisation Director No 2 Limited
7
Cross-Currency Confirmation for Series 2007-2 (Class 3B2 Notes)
Execution Version
From: Credit Suisse International
One Cabot Square
London E14 4QJ
England
Attention: Settlements
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
23 May 2007
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 Effective 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 (UK) LLP and
Credit Suisse International on 18 May 2007.
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 (UK) LLP) 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 (UK) LLP) 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 17 May 2007 and the Final Terms dated 18 May 2007
(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 EUR 100,000,000 Series
2007-02 Class 3B2 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this Confirmation
relates are as follows:
Party A:
Credit Suisse International
Party B:
Granite Master Issuer plc.
Trade Date:
16 May 2007.
Effective Date:
23 May 2007.
Termination Date:
The Floating Rate Payer I Payment Date falling in December 2054.
Exchange Rate:
GBP 1.00: EUR 1.4608.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I:
Party A.
Floating Rate Payer I Currency Amount:
On any Floating Rate Payer I Payment Date, EUR 100,000,000 less the
aggregate of the Floating Rate Payer I Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer I Payment Dates:
Each Note Payment Date (as defined in the Conditions).
Floating Rate Payer I Floating Rate Option:
EURIBOR (as defined in the Conditions).
2
Floating Rate Payer I Designated Maturity:
3 months; except in respect of 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 1 month and 2 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:
0.16 per cent. per annum for the Calculation Periods up to and including
the Calculation Period ending on, but excluding, the Payment Date
falling in April 2012; and thereafter 0.32 per cent. per annum.
Floating Rate Payer I Floating Rate Day Count Fraction:
Actual/360.
Floating Rate Payer I Reset Dates:
The first day of each Calculation Period.
Floating Amounts II:
Floating Rate Payer II:
Party B.
Floating Rate Payer II Currency Amount:
On any Floating Rate Payer II Payment Date, GBP 68,455,641 less the
aggregate of the Floating Rate Payer II Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer II Payment Dates:
The 17th day of each calendar month in each year during the Term from,
and including, June 2007 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 Floating Rate Option:
GBP-LIBOR-BBA.
Floating Rate Payer II Designated Maturity:
3 months; except in respect of the 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 1 month and 2 month rates; or 1 month, following the
occurrence of a Pass-Through Trigger Event or Step-Up Date.
Floating Rate Payer II Spread:
0.15100 per cent. per annum for the Calculation Periods up to and
including the Calculation Period ending on, but excluding, the Payment
Date falling in April 2012; and thereafter 0.4520 per cent. per annum.
Floating Rate Payer II Floating Rate Day Count Fraction:
Actual/365 (Fixed).
Floating Rate Payer II Reset Dates:
The first day of each Calculation 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 TARGET
B. Initial Exchange:
Initial Exchange Date:
Effective Date.
Party A Initial Exchange Amount:
GBP 68,455,641.
Party B Initial Exchange Amount:
EUR 100,000,000.
C. Interim Exchange:
Interim Exchange Dates:
Each Note Payment Date (as defined in the Conditions) on which a EUR
4
Amortisation Amount is payable.
Floating Rate Payer I
Interim Exchange Amount:
In respect of an Interim Exchange Date, the amount in EUR (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 "EUR Amortisation
Amount").
Floating Rate Payer II
Interim Exchange Amount:
In respect of any Interim Exchange 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
Final Exchange Amount:
A EUR amount equal to the Floating Rate Payer II Final Exchange Amount
converted into EUR at the Exchange Rate.
Floating Rate Payer II
Final Exchange Amount:
The Floating Rate Payer II Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in EUR:
Correspondent: CITIGB2L -
Citibank London
Beneficiary: CSFPGB2L -
Credit Suisse International
Acc: 10403229
5
Account for Payments in GBP:
To be advised.
Payments to Floating Rate Payer II:
Account for Payments in EUR:
Citibank, N.A., London
A/C No. 10861537
SWIFT: CITIGB2L
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:
Credit Suisse International
Address:
One Cabot Square
London
E14 4QJ
Facsimile Number:
+65 6303 1187
Attention:
Settlements
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
Attention:
Andy McLean / Claire Blackett
With a copy to the Issuer Security Trustee:
The Bank of New York
Address:
One Canada Square
48th Floor
London
6
E14 5AL
Facsimile Number:
+44 (0)20 7964 6399
G. Offices:
The Office of Party A is London.
H. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in the last paragraph of Part 5(f)(A)
are not incorporated into this Confirmation and the square brackets and
words therein are accordingly deleted.
1.2 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.
1.3 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) of the Agreement, then the amount so deferred (the
"Floating Amount II 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.
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
Credit Suisse International
Yours faithfully
Credit Suisse International
By: /s/ PB
------------------------
Name: Parminder Bains
Title: Vice President
By: /s/ Laura Muir
------------------------
Name: Laura Muir
Title: Authorised Signatory
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ S. Tyson
------------------------
Name: Sharon Tyson
Title: Representing L.D.C. Securitisation
Director No 2 Limited
8
Cross-Currency Confirmation for Series 2007-2 (Class 2C2 Notes)
Execution Version
From: Credit Suisse International
One Cabot Square
London E14 4QJ
England
Attention: Settlements
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
23 May 2007
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 Effective 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 (UK) LLP and
Credit Suisse International on 18 May 2007.
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 (UK) LLP) 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 (UK)
LLP) 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 17 May 2007 and the Final Terms dated 18 May 2007
(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 EUR 52,000,000 Series
2007-02 Class 2C2 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this Confirmation
relates are as follows:
Party A:
Credit Suisse International
Party B:
Granite Master Issuer plc.
Trade Date:
16 May 2007.
Effective Date:
23 May 2007.
Termination Date:
The Floating Rate Payer I Payment Date falling in December 2054.
Exchange Rate:
GBP 1.00: EUR 1.4608.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I:
Party A.
Floating Rate Payer I Currency Amount:
On any Floating Rate Payer I Payment Date, EUR 52,000,000 less the
aggregate of the Floating Rate Payer I Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer I Payment Dates:
Each Note Payment Date (as defined in the Conditions).
Floating Rate Payer I Floating Rate Option:
EURIBOR (as defined in the Conditions).
2
Floating Rate Payer I Designated Maturity:
3 months; except in respect of 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 1 month and 2 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:
0.43 per cent. per annum for the Calculation Periods up to and including
the Calculation Period ending on, but excluding, the Payment Date
falling in April 2012; and thereafter 0.86 per cent. per annum.
Floating Rate Payer I Floating Rate Day Count Fraction:
Actual/360.
Floating Rate Payer I Reset Dates:
The first day of each Calculation Period.
Floating Amounts II:
Floating Rate Payer II:
Party B.
Floating Rate Payer II Currency Amount:
On any Floating Rate Payer II Payment Date, GBP 35,596,933 less the
aggregate of the Floating Rate Payer II Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer II Payment Dates:
The 17th day of each calendar month in each year during the Term from,
and including, June 2007 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 Floating Rate Option:
GBP-LIBOR-BBA.
Floating Rate Payer II Designated Maturity:
3 months; except in respect of the 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 1 month and 2 month rates; or 1 month, following the
occurrence of a Pass-Through Trigger Event or Step-Up Date.
Floating Rate Payer II Spread:
0.44389 per cent. per annum for the Calculation Periods up to and
including the Calculation Period ending on, but excluding, the Payment
Date falling in April 2012; and thereafter 1.0378 per cent. per annum.
Floating Rate Payer II Floating Rate Day Count Fraction:
Actual/365 (Fixed).
Floating Rate Payer II Reset Dates:
The first day of each Calculation 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 TARGET
B. Initial Exchange:
Initial Exchange Date:
Effective Date.
Party A Initial Exchange Amount:
GBP 35,596,933.
Party B Initial Exchange Amount:
EUR 52,000,000.
C. Interim Exchange:
Interim Exchange Dates:
Each Note Payment Date (as defined in the Conditions) on which a EUR
4
Amortisation Amount is payable.
Floating Rate Payer I
Interim Exchange Amount:
In respect of an Interim Exchange Date, the amount in EUR (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 "EUR Amortisation
Amount").
Floating Rate Payer II
Interim Exchange Amount:
In respect of any Interim Exchange 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
Final Exchange Amount:
A EUR amount equal to the Floating Rate Payer II Final Exchange Amount
converted into EUR at the Exchange Rate.
Floating Rate Payer II
Final Exchange Amount:
The Floating Rate Payer II Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in EUR:
Correspondent: CITIGB2L -
Citibank London
Beneficiary: CSFPGB2L -
Credit Suisse International
Acc: 10403229
5
Account for Payments in GBP:
To be advised.
Payments to Floating Rate Payer II:
Account for Payments in EUR:
Citibank, N.A., London
A/C No. 10861537
SWIFT: CITIGB2L
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:
Credit Suisse International
Address:
One Cabot Square
London
E14 4QJ
Facsimile Number:
+65 6303 1187
Attention:
Settlements
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
Attention:
Andy McLean / Claire Blackett
With a copy to the Issuer Security Trustee:
The Bank of New York
Address:
One Canada Square
48th Floor
London
6
E14 5AL
Facsimile Number:
+44 (0)20 7964 6399
G. Offices:
The Office of Party A is London.
H. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in the last paragraph of Part 5(f)(A)
are not incorporated into this Confirmation and the square brackets and
words therein are accordingly deleted.
1.2 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.
1.3 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) of the Agreement, then the amount so deferred (the
"Floating Amount II 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.
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
Credit Suisse International
By: /s/ PB
------------------------
Name: Parminder Bains
Title: Vice President
By: /s/ Laura Muir
------------------------
Name: Laura Muir
Title: Authorised Signatory
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ S. Tyson
------------------------
Name: Sharon Tyson
Title: Representing L.D.C. Securitisation
Director No 2 Limited
8
Cross-Currency Confirmation for Series 2007-2 (Class 3C2 Notes)
Execution Version
From: Credit Suisse International
One Cabot Square
London E14 4QJ
England
Attention: Settlements
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
23 May 2007
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 Effective 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 (UK) LLP and
Credit Suisse International on 18 May 2007.
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 (UK) LLP) 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 (UK)
LLP) 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 17 May 2007 and the Final Terms dated 18 May 2007
(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 EUR 84,500,000 Series
2007-02 Class 3C2 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this Confirmation
relates are as follows:
Party A:
Credit Suisse International
Party B:
Granite Master Issuer plc.
Trade Date:
16 May 2007.
Effective Date:
23 May 2007.
Termination Date:
The Floating Rate Payer I Payment Date falling in December 2054.
Exchange Rate:
GBP 1.00: EUR 1.4608.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I:
Party A.
Floating Rate Payer I Currency Amount:
On any Floating Rate Payer I Payment Date, EUR 84,500,000 less the
aggregate of the Floating Rate Payer I Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer I Payment Dates:
Each Note Payment Date (as defined in the Conditions).
Floating Rate Payer I Floating Rate Option:
EURIBOR (as defined in the Conditions).
2
Floating Rate Payer I Designated Maturity:
3 months; except in respect of 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 1 month and 2 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:
0.49 per cent. per annum for the Calculation Periods up to and including
the Calculation Period ending on, but excluding, the Payment Date
falling in April 2012; and thereafter 0.98 per cent. per annum.
Floating Rate Payer I Floating Rate Day Count Fraction:
Actual/360.
Floating Rate Payer I Reset Dates:
The first day of each Calculation Period.
Floating Amounts II:
Floating Rate Payer II:
Party B.
Floating Rate Payer II Currency Amount:
On any Floating Rate Payer II Payment Date, GBP 57,845,016 less the
aggregate of the Floating Rate Payer II Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer II Payment Dates:
The 17th day of each calendar month in each year during the Term from,
and including, June 2007 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 Floating Rate Option:
GBP-LIBOR-BBA.
Floating Rate Payer II Designated Maturity:
3 months; except in respect of the 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 1 month and 2 month rates; or 1 month, following the
occurrence of a Pass-Through Trigger Event or Step-Up Date.
Floating Rate Payer II Spread:
0.51590 per cent. per annum for the Calculation Periods up to and
including the Calculation Period ending on, but excluding, the Payment
Date falling in April 2012; and thereafter 1.1818 per cent. per annum.
Floating Rate Payer II Floating Rate Day Count Fraction:
Actual/365 (Fixed).
Floating Rate Payer II Reset Dates:
The first day of each Calculation 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 TARGET
B. Initial Exchange:
Initial Exchange Date:
Effective Date.
Party A Initial Exchange Amount:
GBP 57,845,016.
Party B Initial Exchange Amount:
EUR 84,500,000.
C. Interim Exchange:
Interim Exchange Dates:
Each Note Payment Date (as defined in the Conditions) on which a EUR
4
Amortisation Amount is payable.
Floating Rate Payer I
Interim Exchange Amount:
In respect of an Interim Exchange Date, the amount in EUR (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 "EUR Amortisation
Amount").
Floating Rate Payer II
Interim Exchange Amount:
In respect of any Interim Exchange 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
Final Exchange Amount:
A EUR amount equal to the Floating Rate Payer II Final Exchange Amount
converted into EUR at the Exchange Rate.
Floating Rate Payer II
Final Exchange Amount:
The Floating Rate Payer II Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in EUR:
Correspondent: CITIGB2L -
Citibank London
Beneficiary: CSFPGB2L -
Credit Suisse International
Acc: 10403229
5
Account for Payments in GBP:
To be advised.
Payments to Floating Rate Payer II:
Account for Payments in EUR:
Citibank, N.A., London
A/C No. 10861537
SWIFT: CITIGB2L
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:
Credit Suisse International
Address:
One Cabot Square
London
E14 4QJ
Facsimile Number:
+65 6303 1187
Attention:
Settlements
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
Attention:
Andy McLean / Claire Blackett
With a copy to the Issuer Security Trustee:
The Bank of New York
Address:
One Canada Square
48th Floor
London
6
E14 5AL
Facsimile Number:
+44 (0)20 7964 6399
G. Offices:
The Office of Party A is London.
H. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in the last paragraph of Part 5(f)(A)
are not incorporated into this Confirmation and the square brackets and
words therein are accordingly deleted.
1.2 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.
1.3 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) of the Agreement, then the amount so deferred (the
"Floating Amount II 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.
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
Credit Suisse International
By: /s/ PB
------------------------
Name: Parminder Bains
Title: Vice President
By: /s/ Laura Muir
------------------------
Name: Laura Muir
Title: Authorised Signatory
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ S. Tyson
------------------------
Name: Sharon Tyson
Title: Representing L.D.C. Securitisation
Director No 2 Limited
8
Cross-Currency Confirmation for Series 2007-2 (Class 3M2 Notes)
Execution Version
From: Credit Suisse International
One Cabot Square
London E14 4QJ
England
Attention: Settlements
To: Granite Master Issuer plc
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: Securitisation Team, Risk Operations
23 May 2007
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 Effective 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 (UK) LLP and
Credit Suisse International on 18 May 2007.
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 (UK) LLP) 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 (UK)
LLP) 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 17 May 2007 and the Final Terms dated 18 May 2007
(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 EUR 162,000,000 Series
2007-02 Class 3M2 Notes due December 2054.
1 The terms of the particular Swap Transaction to which this Confirmation
relates are as follows:
Party A:
Credit Suisse International
Party B:
Granite Master Issuer plc.
Trade Date:
16 May 2007.
Effective Date:
23 May 2007.
Termination Date:
The Floating Rate Payer I Payment Date falling in December 2054.
Exchange Rate:
GBP 1.00: EUR 1.4608.
A. Floating Payments
Floating Amounts I:
Floating Rate Payer I:
Party A.
Floating Rate Payer I Currency Amount:
On any Floating Rate Payer I Payment Date, EUR 162,000,000 less the
aggregate of the Floating Rate Payer I Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer I Payment Dates:
Each Note Payment Date (as defined in the Conditions).
Floating Rate Payer I Floating Rate Option:
EURIBOR (as defined in the Conditions).
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Floating Rate Payer I Designated Maturity:
3 months; except in respect of 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 1 month and 2 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:
0.29 per cent. per annum for the Calculation Periods up to and including
the Calculation Period ending on, but excluding, the Payment Date
falling in April 2012; and thereafter 0.58 per cent. per annum.
Floating Rate Payer I Floating Rate Day Count Fraction:
Actual/360.
Floating Rate Payer I Reset Dates:
The first day of each Calculation Period.
Floating Amounts II:
Floating Rate Payer II:
Party B.
Floating Rate Payer II Currency Amount:
On any Floating Rate Payer II Payment Date, GBP 110,898,138 less the
aggregate of the Floating Rate Payer II Interim Exchange Amounts paid
prior to such date.
Floating Rate Payer II Payment Dates:
The 17th day of each calendar month in each year during the Term from,
and including, June 2007 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 Floating Rate Option:
GBP-LIBOR-BBA.
Floating Rate Payer II Designated Maturity:
3 months; except in respect of the initial Calculation Period for which
Linear Interpolation is applicable and
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in respect of which the Linear Interpolation shall be applied by
reference to the 1 month and 2 month rates; or 1 month, following the
occurrence of a Pass-Through Trigger Event or Step-Up Date.
Floating Rate Payer II Spread:
0.28933 per cent. per annum for the Calculation Periods up to and
including the Calculation Period ending on, but excluding, the Payment
Date falling in April 2012; and thereafter 0.7287 per cent. per annum.
Floating Rate Payer II Floating Rate Day Count Fraction:
Actual/365 (Fixed).
Floating Rate Payer II Reset Dates:
The first day of each Calculation 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 TARGET
B. Initial Exchange:
Initial Exchange Date:
Effective Date.
Party A Initial Exchange Amount:
GBP 110,898,138.
Party B Initial Exchange Amount:
EUR 162,000,000.
C. Interim Exchange:
Interim Exchange Dates:
Each Note Payment Date (as defined in the Conditions) on which a EUR
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Amortisation Amount is payable.
Floating Rate Payer I
Interim Exchange Amount:
In respect of an Interim Exchange Date, the amount in EUR (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 "EUR Amortisation
Amount").
Floating Rate Payer II
Interim Exchange Amount:
In respect of any Interim Exchange 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
Final Exchange Amount:
A EUR amount equal to the Floating Rate Payer II Final Exchange Amount
converted into EUR at the Exchange Rate.
Floating Rate Payer II
Final Exchange Amount:
The Floating Rate Payer II Currency Amount.
E. Account Details:
Payments to Floating Rate Payer I:
Account for Payments in EUR:
Correspondent: CITIGB2L -
Citibank London
Beneficiary: CSFPGB2L -
Credit Suisse International
Acc: 10403229
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Account for Payments in GBP:
To be advised.
Payments to Floating Rate Payer II:
Account for Payments in EUR:
Citibank, N.A., London
A/C No. 10861537
SWIFT: CITIGB2L
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:
Credit Suisse International
Address:
One Cabot Square
London
E14 4QJ
Facsimile Number:
+65 6303 1187
Attention:
Settlements
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
Attention:
Andy McLean / Claire Blackett
With a copy to the Issuer Security Trustee:
The Bank of New York
Address:
One Canada Square
48th Floor
London
6
E14 5AL
Facsimile Number:
+44 (0)20 7964 6399
G. Offices:
The Office of Party A is London.
H. Miscellaneous:
1. It is understood and agreed that in the Schedule to the Agreement:
1.1 The words in the square brackets in the last paragraph of Part 5(f)(A)
are not incorporated into this Confirmation and the square brackets and
words therein are accordingly deleted.
1.2 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.
1.3 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) of the Agreement, then the amount so deferred (the
"Floating Amount II 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.
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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
Credit Suisse International
By: /s/ PB
------------------------
Name: Parminder Bains
Title: Vice President
By: /s/ Laura Muir
------------------------
Name: Laura Muir
Title: Authorised Signatory
Confirmed as of the date first written:
Granite Master Issuer plc
By: /s/ S. Tyson
------------------------
Name: Sharon Tyson
Title: Representing L.D.C. Securitisation
Director No 2 Limited
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