EXHIBIT 10.4
CLASS C CONFIRMATION
Confirmation to the
1992 ISDA Master(R) Agreement
relating to the Class C Swap Agreement
Dated [___] October 2002
GRACECHURCH CARD FUNDING (NO. 2) PLC
Re: Transaction between Barclays Bank PLC ("PARTY A") and Gracechurch Card
Funding (No. 2) PLC ("PARTY B")
Dear Sirs:
The purpose of this letter agreement is to confirm the terms and conditions of
the Swap Transaction entered into between you and us on the Trade Date specified
below (the "SWAP TRANSACTION"). References herein to a TRANSACTION shall be
deemed to be references to a SWAP TRANSACTION for the purposes of the
Definitions.
The definitions and provisions contained in the 2000 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency between
those Definitions and this Confirmation, this Confirmation will govern.
1. This Confirmation incorporates the ISDA Master Agreement, including the
schedule thereto (the "ISDA MASTER") dated as of [___] October 2002,
between you and us and this Confirmation, together with the ISDA Master,
constitutes a single agreement (the "AGREEMENT"). All provisions contained
in the ISDA Master apply to this Confirmation except as expressly modified
below.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Party A: Barclays Bank PLC
Party B: Gracechurch Card Funding (No. 2) PLC
Trade Date: [___] October 2002
Effective Date: [___] October 2002; provided, however, that
effectiveness is subject to the issuance of the
Notes and the receipt by the Series 02-1 Issuer on
or prior to [___] October 2002 of unconditional
confirmation that upon issue the Class C Notes
will be rated [___] by Moody's and [___] by
Standard & Poor's.
Termination Date: [___], subject to adjustment in accordance with
the Following Business Day Convention, and subject
to adjustment in accordance with Section 3.3 below
Business Days for USD: A day other than a Saturday, a Sunday or a day on
which banking institutions in London, England or
New York, New York are authorised or obliged by
law to be closed
Business Days for GBP: Any day other than a Saturday, a Sunday or a day
on which banking institutions in London, England
or New York, New York are authorised or obliged by
law or executive order to be closed. [ensure
definition conforms with MTN]
Calculation Agent Party A
INITIAL EXCHANGE AMOUNTS AND FINAL EXCHANGE AMOUNTS
Party A Initial Exchange Amount: GBP [___]
Party A Initial Exchange Date: Effective Date
Party A Final Exchange Amount: Party A Currency Amount on the Termination Date
Party A Final Exchange Date: Termination Date
Party B Initial Exchange Amount: USD [___]
Party B Initial Exchange Date: Effective Date
Party B Final Exchange Amount: Party B Currency Amount on the Termination Date
Party B Final Exchange Date: Termination Date
PARTY A FLOATING RATE AMOUNTS
Party A Floating Rate Payer: Party A
Party A Currency Amount: USD [___] (subject to adjustment during the
Redemption Period as set out herein)
Party A Floating Rate Payer The 15th day of each calendar month from and
Period End Dates: including 15 [___] 2002 to and including 15 [___],
in each case subject to adjustment in accordance
with the Following Business Day Convention
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Party A Floating Rate Payer Each Party A Floating Rate Payer Period End Date.
Payment Dates: Party A will provide a clearing system notice as
to the amount to be paid on each Party A Floating
Rate Payer Payment Date 2 Business Days prior to
each such Party A Floating Rate Payer Payment
Date.
Party A Floating Rate Option: USD-LIBOR as calculated in accordance with
Condition 4 of the Conditions of the Notes, [and
provided that in accordance with such Condition in
respect of the first Calculation Period the Party
A Floating Rate Option shall be a linear
interpolation of the rates for [___] USD deposits
and [___] USD deposits]
Designated Maturity: 1 month
Spread: [___]%
Party A Floating Rate
Day Count Fraction: Actual/360 as calculated in accordance with
Condition 4 of the Conditions
Reset Dates: First day of each Calculation Period
PARTY B FLOATING RATE AMOUNTS
Party B Floating Rate Payer: Party B
Party B Currency Amount: GBP [___] (subject to adjustment during the
Redemption Period as set out herein)
Party B Floating Rate Payer
Period End Dates: The 15th day of each calendar month from and
including 15 [___] 2002 to and including 15 [___], in
each case subject to adjustment in accordance with
the Following Business Day Convention
Party B Floating Rate Payer Each Party B Floating Rate Payer Period End Date
Payment Dates:
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Party B Floating Rate Option: GBP-LIBOR-BBA calculated in accordance with the
Series 02-1 Class C Debt Amount [provided that in
respect of the first Calculation Period the Party
B Floating Rate Option shall be a linear
interpolation of the GBP-LIBOR-BBA rates for
[___]-month GBP deposits and [___]-month GBP deposits]
Designated Maturity: 1 month
Spread: [___]%
Party B Floating Rate
Day Count Fraction: A fraction, the numerator of which is the actual
number of days in such Calculation Period and the
denominator of which is 365 (or 366 in the case of
any Calculation Period ending in a leap year) as
calculated in accordance with the interest rate
applicable to the Series 02-1 Class C Debt Amount
Reset Dates: First day of each Calculation Period
3. DETAILS OF VARIATION TO AGREEMENT:
3.1 TAXATION: Neither Party A nor Party B is under any obligation to gross up
any payments to be made under this Agreement for amounts withheld with
respect to any Tax. In the event that a Tax is imposed such that Party B's
payment hereunder shall be net of the amount of any Taxes so withheld,
accounted for, deducted or suffered, then Party A's payment obligation
shall be reduced in proportion to the amount by which the payments to be
made by Party B are so reduced. In the event that a Tax is imposed such
that Party A's payment hereunder shall be net of the amount of any Taxes
so withheld, accounted for, deducted or suffered, then (subject to the
first sentence of this Section 3.1 and Section 3.2, 3.3 and 3.4 below) the
payment obligations of Party B shall remain the same.
3.2 INTEREST DEFERRAL:
(A) The obligation of Party B to pay the Party B Floating Rate Amount on any
Party B Floating Rate Payer Payment Date will be reduced to the extent
that, on such Party B Floating Rate Payer Payment Date, the amount
referable to Finance Charge Collections referable to the Series 02-1 Class
C Debt Amount (other than any funds relating to excess spread attributable
to Series 02-1) having been credited to the Series 02-1 Distribution
Account of Barclaycard Funding plc (the "MTN ISSUER") by the Receivables
Trustee is less than the Class C Monthly Distribution Amount calculated
for the relevant Calculation Period (as such terms are defined in relation
to the Series 02-1 Investor Interest) (any such amount, the "DEFERRED
INTEREST AMOUNT") occurring
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during the period from the preceding Party B Floating Rate Payer Payment
Date and ending on or immediately prior to that Party B Floating Rate
Payer Payment Date.
The obligation of Party A to pay the Party A Floating Rate Amount on any
Party A Floating Rate Payer Payment Date will be reduced by an amount
equal to the Party A Floating Rate Amount otherwise payable on such Party
A Floating Rate Payer Payment Date (prior to any adjustment thereof in
accordance with this Section 3.2) multiplied by the Reduction Ratio. The
"REDUCTION RATIO" is a fraction equal to:
Deferred Interest Amount
--------------------------------
Aggregate Party B Payment Amount
The "AGGREGATE PARTY B PAYMENT AMOUNT" is equal to the Party B Floating
Rate Amount, before any adjustment thereof in accordance with the terms of
the provisions of this Section 3.2, that would otherwise have been payable
on such Party B Floating Rate Payer Payment Date.
(B) The obligation of Party B to pay the Party B Floating Rate Amount on any
Party B Floating Rate Payer Payment Date shall be increased in the event
of (and to the extent of available funds in relation to) additional
amounts referable to Finance Charge Collections in respect of the Series
02-1 Class C Debt Amount (other than any funds relating to excess spread
attributable to Series 02-1) having been credited to the Series 01-2
Distribution Account by the Receivables Trustee to make up any previous
Deferred Interest Amount.
The obligation of Party A to pay the Party A Floating Rate Amount on any
Party A Floating Rate Payer Payment Date will be increased by an amount
(the "ADDITIONAL PARTY A AMOUNT") equal to the Party A Floating Rate
Amount otherwise payable on such Party A Floating Rate Payer Payment Date
(prior to any adjustment thereof in accordance with this Section 3.2)
multiplied by the Increase Ratio. Accordingly, on such Party A Floating
Rate Payer Payment Date, Party A shall pay the Party A Floating Rate
Amount as well as the Additional Party A Amount. The "INCREASE RATIO" is a
fraction equal to:
Increased Interest Amount
---------------------------------
Aggregate Party B Payment Amount
The "INCREASED INTEREST AMOUNT" is equal to the amount of Finance Charge
Collections referable to the Series 02-1 Class C Debt Amount and credited
to the Series 02-1 Distribution Account by the Receivables Trustee on the
Party B Floating Rate Payer Payment Date which corresponds to such Party A
Floating Rating Payer Payment Date and so deposited to make up any
previous Deferred Interest Amount.
3.3 REDEMPTION PERIOD. On the earlier of (a) the Series 02-1 Scheduled
Redemption Date in the event that the Class C Debt Amount is not redeemed
in full on such date, (b) the first distribution date for the Regulated
Amortisation Period or (c) the first distribution
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date for the Rapid Amortisation Period (any such event, a "REDEMPTION
TRIGGER") then the following provisions shall apply. The "REDEMPTION
PERIOD END DATE" is the early of (a) the Party B Floating Rate Payer
Payment Date falling in [___] [note to draft: legal final redemption date]
and (b) the date upon which the Class C Debt Amount is redeemed in full.
From the occurrence of the Redemption Trigger, the Termination Date shall
be amended to be the Redemption Period End Date. The period from and
including the date on which the Redemption Trigger occurs and the
Redemption Period End Date is called the "REDEMPTION PERIOD".
3.4 AMORTISATION OF PARTY A CURRENCY AMOUNT AND PARTY B CURRENCY AMOUNT DURING
REDEMPTION PERIOD
During the Redemption Period, on each Party B Floating Rate Payer Period
End Date (including the Series 02-1 Scheduled Redemption Date if the
Redemption Trigger falls on the Series 02-1 Scheduled Redemption Date),
the Party B Currency Amount shall be reduced (for the next following
Calculation Period for Party B) by the amount on deposit on that Party B
Floating Rate Payer Period End Date in the Series 02-1 Issuer Account and
referable to the Class C Debt Amount and credited to the Class C Notes
principal ledger (the amount of such reduction, the "PARTY B AMORTISATION
AMOUNT"). On each Party B Floating Rate Payer Payment Date corresponding
to such Party B Floating Rate Payer Period End Date, Party B shall pay to
Party A an amount equal to the Party B Amortisation Amount.
During the Redemption Period, on each Party A Floating Rate Payer Period
End Date (including the Series 02-1 Scheduled Redemption Date if the
Redemption Trigger occurs on the Series 02-1 Scheduled Redemption Date),
the Party A Currency Amount shall be reduced (for the next following
Calculation Period for Party A) by an amount (the "PARTY A AMORTISATION
AMOUNT") calculated as specified below. The Party A Amortisation Amount is
equal to A x B/C where:
A = the Party A Currency Amount calculated on the Effective Date
B = the Party B Amortisation Amount applicable on the Party B Floating
Rate Payer Period End Date occurring on such Party A Floating Rate Payer
Period End Date
C = the Party B Currency Amount calculated on the Effective Date.
On the Party A Floating Rate Payer Payment Date, Party A shall pay to
Party B an amount equal to the Party A Amortisation Amount.
4. ACCOUNT DETAILS
Account for Barclays Bank PLC, 54 Lombard Street, London
Payments to Party A CHAPS: [20-00-00]
in GBP: Beneficiary: [Barclays Swaps]
Beneficiary Account: [00152021]
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Account for Barclays Bank PLC
Payments to Party A SWIFT: [BARCGB22]
in USD Beneficiary: [Barclays Bank PLC London]
Beneficiary Account: [___]
Account for Barclays Bank PLC [___]
Payments to Party B Sort code [___]
in GBP: Account number [___]
Account for Barclays Bank PLC [___]
Payments to Party B Sort code [___]
in USD: Account number [___]
5. CONTACT FOR PARTY A DOCUMENTATION AND OPERATIONS:
Barclays Bank PLC
Attention: [Derivatives Director, Legal Division
(marked urgent)]
Telephone: +44 20 [7773 2224]
Fax No: +44 20 [7773 4932]
6. GOVERNING LAW: England
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
BARCLAYS BANK PLC
By:
-------------------------------------
Name:
Title: Authorised Signatory
Confirmed as of the date first written:
GRACECHURCH CARD FUNDING (NO. 2) PLC
By:
-------------------------------------
Name:
Title: Authorised Signatory
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SCHEDULE
TO THE
1992 ISDA MASTER(R) AGREEMENT
DATED AS OF [_] OCTOBER 2002
BETWEEN
BARCLAYS BANK PLC
("PARTY A")
AND
GRACECHURCH CARD FUNDING (NO. 2) PLC
("PARTY B")
AND
BANK OF NEW YORK, LONDON BRANCH
("PARTY C")
1. TERMINATION PROVISIONS
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
and in relation to Party B for the purpose of
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
(b) "SPECIFIED TRANSACTION" has the meaning specified in Section 14.
(c) The "BREACH OF AGREEMENT" provisions of Section 5(a)(ii) will not
apply to Party B.
The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will not
apply to Party B.
The "MISREPRESENTATION" provisions of Section 5(a)(iv) will not apply
to Party B.
The "DEFAULT UNDER SPECIFIED TRANSACTION" provisions of Section
5(a)(v) will not apply to Party A and Party B.
The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply to
Party A and Party B.
The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will not
apply to Party A and Party B.
(d) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will not
apply to Party A and Party B.
(e) PAYMENTS ON EARLY TERMINATION. "Second Method" and "Market Quotation"
will apply for the purpose of Section 6(e) of this Agreement.
(f) "TERMINATION CURRENCY" means GBP.
(g) The "TAX EVENT" provisions of Section 5(b)(ii) (and accordingly
5(b)(iii)) will not apply to Party A and Party B.
(h) ADDITIONAL TERMINATION EVENT will apply. Each of the following shall
constitute an Additional Termination Event.
(i) EVENT OF DEFAULT
An Event of Default under the Conditions occurs and Bank of New
York, London Branch, in its capacity as trustee (the "NOTE
TRUSTEE"), gives notice that the notes (the "NOTES") issued by
the Party B pursuant to the Trust Deed (as defined below) are due
and repayable as provided in Condition 9 of the Conditions (in
which event Party B shall be the Affected Party).
In the case of the Additional Termination Event described in
sub-paragraph (i) above, the provisions of Section 6(b)(iv) shall
be modified to provide that Party B will, by not more than 20
days notice to Party A, and provided that the Additional
Termination Event is then continuing, designate as the day which
is the day such notice by the Note Trustee declaring the Notes
due and repayable is effective as an Early Termination Date in
respect of all Affected Transactions.
(ii) WITHHOLDING TAX EVENT
In the event that there is a withholding tax imposed (1) in
relation to the Issuer's payments under the Notes; (2) in
relation to any payments to Party B under the Series 02-1 MTN;
(3) in relation to Party B's payments under this Agreement, (4)
in relation to Party A's payments under this Agreement (following
the expiration of a period of 30 days from Party B or the Note
Trustee becoming aware of the imposition of such withholding tax
and notwithstanding Party A's obligations in relation to Section
6(b)(ii)(2) of this Agreement).
In the case of the Additional Termination Event described in
sub-paragraph (ii) above, Party A shall be the Affected Party.
2. TAX REPRESENTATIONS
(a) PAYER REPRESENTATIONS
For the purpose of Section 3(e) of this Agreement, Party A and Party B
make the representations specified below:
Party A makes the following representation: It is a bank
organised under the laws of England and Wales and is resident for
United Kingdom tax purposes in the United Kingdom.
Party B makes the following representation: It is a company duly
incorporated under the laws of England and Wales and is resident
for United Kingdom tax purposes in the United Kingdom.
(b) PAYEE REPRESENTATIONS
For the purpose of Section 3(f) of this Agreement, Party A and Party B
make the representations specified below:
Party A makes the following representation: It is a bank
organised under the laws of England and Wales.
Party B makes the following representation: It is a company duly
incorporated under the laws of England and Wales.
3. AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Section 4(a) of this Agreement, each party agrees to
deliver the following documents as applicable:
(a) Tax forms, documents or certificates to be delivered are:
================================================================================
PARTY REQUIRED TO | | DATE BY WHICH TO
DELIVER DOCUMENT | FORM/DOCUMENT/CERTIFICATE | BE DELIVERED
- --------------------|--------------------------------|--------------------------
Party A/Party B | Any document required | Promptly upon the
| or reasonably | earlier of (i)
| requested to allow the | reasonable demand by
| other party to make | the other party and
| payments under the | (ii) learning that
| Agreement without any | the form or document
| deduction or | is required
| withholding for or on |
| account of any Tax, or |
| with such deduction or |
| withholding at a |
| reduced rate, or to |
| enable the relevant |
| party to claim back or |
| be refunded for any |
| amount of Tax so |
| withheld or deducted |
| where such relevant |
| party received a |
| payment under this |
| Agreement net of such |
| Tax |
================================================================================
(b) Other documents to be delivered are:
PARTY REQUIRED FORM/ DATE BY WHICH COVERED BY
TO DELIVER DOCUMENT/ TO BE SECTION 3(D)
DOCUMENT CERTIFICATE DELIVERED REPRESENTATION
- --------------- -------------------- ------------------- --------------
Party A/Party B Certificate or other At the execution of Yes
documents evidencing this Agreement, and,
the authority of the if a Confirmation so
party entering into requires it on or
this Agreement and before the date set
the persons acting forth therein
on behalf of such
party (including any
incumbency
certificates
delivered in
connection with the
execution of the
Trust Deed)
Party A/Party B Legal Opinions in At the execution of No
the form reasonably this Agreement
acceptable to the
other party
Party B A duly executed copy Upon execution of No
of the Trust Deed this Agreement
4. MISCELLANEOUS
(a) ADDRESSES FOR NOTICES: For the purpose of Section 12(a) of this
Agreement:
Addresses for notices or communications to Party A:
For notices regarding operation, payment and confirmation matters
only, notices should be sent to the address of the relevant branch set
out in the relevant Confirmation (as may be amended from time to
time), with a copy in the case of notices or communications relating
to Sections 5, 6, 7, 11 or 13 to:
Address: [_]
Attention: Derivatives Director, Legal Division (marked urgent)
Fax No.: +44 20 7[_]
Telephone: +44 20 7[_]
Address for notices or communications to Party B:
Address: Gracechurch Card Funding (No. 2) PLC
54 Lombard Street
London EC3P 3AH
Attention: The Directors
Fax No.: [_]
(b) OFFICES. The Provisions of Section 10(a) will apply to this Agreement.
(c) MULTIBRANCH PARTY. For the purpose of Section 10:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(d) CALCULATION AGENT. The Calculation Agent is Party A.
(e) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:
Party A: None
Party B: None
(f) CREDIT SUPPORT PROVIDER.
Party A: Not applicable
Party B: Not applicable
(g) GOVERNING LAW. This Agreement and each Confirmation will be governed
by and construed in accordance with the laws of England.
(h) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
5. OTHER PROVISIONS
(a) Neither Party A nor Party B will in any circumstances be required to
pay additional amounts in respect of any Indemnifiable Tax or be under
any obligation to pay to the other any amount in respect of any
liability of such other party for or on account of any Tax, and,
accordingly, Section 2(d)(i)(4) and Section 2(d)(ii) of this Agreement
shall not apply.
(b) Section 6(b)(ii) is hereby amended to read as follows:
TRANSFER OF RIGHTS AND OBLIGATIONS.
(1) If an Illegality under Section 5(b)(i)(1) occurs and there is
only one Affected Party, the Affected Party will, as a condition
to its right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require such
party to incur a loss, excluding immaterial, incidental expenses)
to transfer within 20 days after it gives notice under Section
6(b)(i) all its rights and obligations under this Agreement in
respect of the Affected Transactions to (A) in the case of Party
A, another of its Offices or Affiliates and (B) in the case of
Party B, another of its Offices or Affiliates, if any, or another
company so that such Termination Event ceases to exist. If the
Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day
period, whereupon the other party may effect such a transfer
within 30 days after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii)(1) will
be subject to and conditional upon the prior written consent of
the other party, which consent will not be withheld if such other
party's policies in effect at such time would permit it to enter
into transactions with the transferee on the terms proposed.
(2) If Party A, on the occasion of the next date for payment in
respect of this Agreement, would be required by any relevant
taxing authority or court of competent jurisdiction or by
operation of law to withhold or account for any Tax, Party A
shall forthwith upon becoming aware of such circumstance so
inform Party B and the Note Trustee and shall use its best
endeavours (which will not require such Party A to incur a loss,
excluding immaterial, incidental expenses) to arrange the
substitution of an Affiliate incorporated in another jurisdiction
in the place of Party A under this Agreement or to change the
Office through which it acts under this Agreement, but not so as
in any event to (1) result in the ratings of the Notes by Moody's
Investors Service, Inc. ("MOODY'S") or Standard & Poor's Ratings
Services, a division of the McGraw Hill Inc. group of companies
("STANDARD & POOR'S") to be reduced or adversely affected by
reference to the ratings which would otherwise have applied to
the Notes if such circumstances described in this paragraph had
not occurred or (2) otherwise prejudice the position of Party B
under this Agreement. If Party A is unable to arrange such
substitution or change, Party A shall so inform Party B and the
Note Trustee and shall use its best endeavours (which will not
require Party A to incur a loss, excluding immaterial, incidental
expenses) to arrange the substitution of a company incorporated
in another jurisdiction in the place of Party A under this
Agreement, but not so as in any event to (x) result in the
ratings of the Notes by Moody's or Standard & Poor's to be
reduced or adversely affected by reference to the ratings which
would otherwise have applied to the Notes if such circumstance
described in this paragraph had not occurred or (y) otherwise
prejudice the position of Party B under this Agreement.
No transfer or substitution pursuant to this Section 6(b)(ii) shall
occur unless and until the Note Trustee has received the written
affirmation of each of Standard & Poor's and Moody's that such
transfer or substitution shall not adversely affect the then-current
ratings of the Notes.
(c) Section 6(d)(i) is hereby amended to read in its entirety as follows:
STATEMENT On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, the Calculation Agent shall
make computations of the amounts owing pursuant to Section 6(e) and
will provide to each party a statement (1) showing, in reasonable
detail, such calculations and specifying the net amount payable by the
applicable party pursuant to Section 6(e) and (2) giving details of
the relevant account to which any amount payable is to be paid.
(d) Section 7 is hereby amended to read in its entirety as follows:
Except as stated under Section 6(b)(ii), as provided in the Schedule
or as provided in this Section 7, and except for the assignment by way
of security in favour of The Bank of New York, London Branch under the
trust deed dated [_] October 2002 (including any supplement thereto)
(collectively, the "TRUST DEED") between Party B and The Bank of New
York, London Branch, neither Party A nor Party B is permitted to
assign, novate or transfer as a whole or in party any of its rights,
obligations or interests under this Agreement. Party A may transfer
its rights and obligations under this Agreement (but, not its rights
only) to another of Party A's Offices, branches or Affiliates (the
"TRANSFEREE") on ten Business Days' prior written notice, PROVIDED
that (i) Party A delivers an opinion of independent counsel
of recognised standing in form and substance satisfactory to Party B
(or, following the security becoming enforceable as described in the
Conditions, the Note Trustee on behalf of Party B) and the Note
Trustee confirming that as at the date of such transfer the Transferee
will not, as a result of such transfer, be required to withhold or
deduct on account of tax under this Agreement, (ii) a Termination
Event or Event of Default does not occur under this Agreement as a
result of such transfer and (iii) the Note Trustee has received
written affirmation of Standard & Poor's and Moody's (or their
successors) that such transfer shall not adversely affect the
then-current ratings of the Notes. Party B may transfer is rights and
obligations under this Agreement (but not its rights only) to any
other body corporate which has been duly substituted as the holder of
the Series 02-1 MTN.
(e) ADDITIONAL REPRESENTATIONS Section 3 is hereby amended by adding at
the end thereof the following Subparagraph:
(i) It is entering into this Agreement, any Credit Support Document
to which it is a party and any other documentation relating to
this Agreement as principal (and not as agent or in any other
capacity, fiduciary or otherwise).
(f) RELATIONSHIP BETWEEN PARTIES Each party will be deemed to represent to
the other party on the date on which it enters into this Agreement
that (absent a written agreement between the parties duly executed by
each of them that expressly imposes affirmative obligations to the
contrary);
(i) NON-RELIANCE. It is acting for its own account, and it has made
its own independent decisions to enter into this Agreement and as
to whether this Agreement is appropriate or proper for it based
upon its own judgment and upon advice from such advisers as it
has deemed necessary. It is not relying on any communication
(written or oral) of the other party as investment advice or as a
recommendation to enter into this Agreement; it being understood
that information and explanations related to the Conditions of
this Agreement shall not be considered investment advice or a
recommendation to enter into this Agreement. No communication
(written or oral) received from the other party shall be deemed
to be an assurance or guarantee as to the expected results of
this Agreement.
(ii) ASSESSMENT AND UNDERSTANDING. It is capable of assessing the
merits of an understanding (on its own behalf or through
independent professional advice), and understands and accepts,
the terms, conditions and risks of this Agreement. It is also
capable of assuming, and assumes, the risks of this Agreement.
(iii) STATUS OF PARTIES. The other party is not acting as a fiduciary
for or as adviser to it in respect of this Agreement.
(g) AMENDMENTS. Section 9(b) of this Agreement is hereby amended to read:
AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing and executed by each of
the parties
and approved by the Note Trustee; provided, however, that all such
amendments, modifications or waivers shall require the written
affirmation of each of Standard & Poor's and Moody's that such
amendments, modifications or waivers shall not adversely affect the
then current ratings of the Notes.
(h) NON-PETITION.
(i) Only The Bank of New York, London Branch may pursue the remedies
available under the general law or under this Agreement, the
Trust Deed and the Series 02-1 MTN to enforce the rights of Party
A, and Party A shall not be entitled to proceed directly against
Party B unless The Bank of New York, London Branch, having become
bound to proceed in accordance with the terms of the Trust Deed,
fails or neglects to do so within a reasonable period and such
failure or neglect is continuing provided always that, for the
avoidance of doubt, the foregoing shall not prevent Party A from
exercising any right to terminate this Agreement pursuant to the
provisions hereof.
(ii) Notwithstanding any other provision of this Agreement, Party A
agrees to be bound by the provisions of the Trust Deed.
(iii) In particular, Party A shall not be entitled to petition or take
any other step for the winding-up of Party B or for the purpose
of commencing or sustaining a case against Party B under any
bankruptcy, insolvency, conservatorship, receivership or similar
law or appointing a conservator, receiver, liquidator, assignee,
trustee, custodian, sequestrator, or other similar official of
Party B or any substantial part of its property, provided that
the Note Trustee and/or Party A may prove or lodge a claim in the
liquidation of Party B initiated by another party and that the
Note Trustee and Party A may take proceedings to obtain a
declaration or similar judgment order as to the obligations and
liabilities of Party B under this Agreement.
(i) ADDITIONAL DEFINITIONS. Terms defined or referred to in each of the
Trust Deed, and the Series 02-1 MTN shall bear the same respective
meanings herein.
(j) INTEREST RATE AND CURRENCY EXCHANGES DEFINITIONS. Reference is hereby
made to the 2000 ISDA Definitions (as published by the International
Swaps and Derivatives Association, Inc.) (the "DEFINITIONS"), which
are incorporated by reference herein.
(k) Section 2(b) is hereby amended to read in its entirety as follows:
CHANGE OF ACCOUNT. Party A may change its account for receiving
payment or delivery by giving notice to Party B at least ten Local
Business Days prior to the scheduled date for payment or delivery to
which such change applies unless Party B gives timely notice of a
reasonable objection to such change. Party B may change its account
for receiving payment or delivery by giving notice to Party A at least
ten Local Business Days prior to the scheduled date for payment or
delivery to which such change applied unless Party A gives timely
notice of a reasonable objection to such change.
(l) PAYMENTS FROM PARTY B. Notwithstanding anything contained in this
Agreement to the contrary, any amount required to be paid by Party B
pursuant to this Agreement will be paid in accordance with the
priority of payments provided in the Trust Deed. For the avoidance of
doubt, Party A shall not bring any claim whatsoever against Capital
One Bank (Europe) plc or Capital One Bank or its assets or any of its
directors, officers employees or agents with respect to any amounts
owing pursuant to this Agreement.
(m) OPTIONAL TRANSFER AND MAINTAINING RATING OF THE NOTES. If any rating
in respect of any of (I) Party A, or (II) any Rating Support (as
defined below) is:
(i) downgraded or withdrawn by Standard & Poor's; or
(ii) downgraded or withdrawn by Moody's;
(either of (i) or (ii) a "PARTY A RATING REDUCTION")
then, immediately upon such Party A Rating Reduction
(1) Party A (acting reasonably) shall determine, or either of
Standard & Poor's or Moody's shall indicate, that as a direct
consequence of such Party A Rating Reduction, the then current
rating of the Notes could be adversely affected, then
(2) Party A shall immediately consult with the relevant rating agency
and if such rating agency confirms that as a direct consequence
of the Party A Rating Reduction the then rating of the Notes is
or will be adversely affected, then
(3) Party A shall thereupon use its best efforts (subject to the
proviso at the end of the last sentence of this paragraph (n)) to
assist Party B in ensuring (if necessary) that, within thirty
days of such Party A Rating Reduction (with the prior written
confirmation of each rating agency (or agencies, as applicable)
carrying out the Party A Rating Reduction) all necessary actions
are taken to maintain the rating of the Notes at the rating that
would subsist but for the Party A Rating Reduction or, in the
case of an immediate adverse effect on the rating of the Notes,
to restore the rating of the Notes to the rating that existed
immediately prior to such Party A Rating Reduction. These efforts
shall include (A) obtaining a third party, acceptable to Party B,
to guarantee the obligations of Party A under this Agreement or
to whom the obligations under this Agreement may be transferred
or (B) posting collateral (and, (1) in the event the Party A
Rating Reduction is carried out by Standard & Poor's, such
posting of collateral shall be in accordance with the Standard &
Poor's interest rate and currency swap criteria dated January
1999 for calculating swap collateral (including all
mark-to-market and volatility buffer calculations set forth
therein), as such criteria may be amended, supplemented or
replaced from time to time and (2) in the event that the Party A
Rating Reduction is carried out by Moody's, such posting of
collateral shall be undertaken only in accordance with the
Moody's Collateral Requirement (as defined below)) or (C) any
other action as Party A, in its sole discretion, deems to be
reasonably necessary (and any of (A), (B) or (C) called "RATING
SUPPORT") to assist Party B and the
Issuer in maintaining the rating of the Notes or (in the event
the Notes have been downgraded) in restoring the rating of the
Notes to the rating that existed immediately prior to such Party
A Rating Reduction, provided that if Rating Support cannot be
completed despite the exercise of Party A's best efforts as
outlined above, Party A shall nonetheless post collateral as
specified in (B) above. Any Rating Support collateral posted
pursuant to (B) or (C) above shall be deposited in an account at
an eligible institution (other than Party A) in the name of the
Issuer or the Note Trustee and invested in eligible investments
at the direction of Party A (such eligible investments to be as
specified pursuant to the Standard & Poor's interest rate and
currency swap criteria dated January 1999).
"MOODY'S COLLATERAL REQUIREMENT" means: (i) in the event that the
Party A Rating Reduction is in relation to a downgrade below Aa3,
102% of the weekly mark-to-market in relation to the Agreement
plus 25 basis points to be calculated as follows: A + (B x C x D)
where A=102% of the weekly mark-to-market in relation to this
Agreement; B=0.25%; C = the notional amount of the Transactions
represented by this Agreement and D = the remaining years to the
Termination Date; (ii) in the event that the Party A Rating
Reduction is in relation to a downgrade below A2, the formula set
forth in (i) shall continue to apply except that A shall be
amended as follows: A=110% of the weekly mark-to-market in
relation to this Agreement.
(n) Pari Passu The following Section 3(a)(vi) shall be inserted after
Section 3(a)(v):
(iv) Pari Passu. Party A represents and warrants to Party B that its
payment obligations hereunder rank and will rank at all times at
least pari passu in all respects with all of its unsecured
obligations (except for those which are preferred by operation of
law).
(o) SEPARATE AGREEMENTS Section 1(c) (Single Agreement) will be deleted
and replaced with the following:
"Each Transaction is entered into on the basis that this Master
Agreement (including the Schedule) is incorporated by reference into
the Confirmation relating to that Transaction so that this Master
Agreement and the relevant Confirmation shall form a single agreement
with respect to that Transaction. This Master Agreement shall not be
construed to form a single agreement with two or more Confirmations
together unless specific provision to that effect is made in the
relevant Confirmation. Accordingly, all references to this "AGREEMENT"
mean, with respect to any Transaction, this Master Agreement together
with the Confirmation relating to that Transaction. It is understood
that the parties would not enter into any Transaction except on the
foregoing terms."
(p) INCONSISTENCY In the event of an inconsistency among or between any of
the following documents, the relevant document first listed below
shall govern.
(i) Confirmation;
(ii) Schedule;
(iii) Definitions.
(q) RECORDING OF TELEPHONE CONVERSATIONS. Each party consents to the
recording of the telephone conversations of trading and marketing
personnel of the parties. Party A agrees to obtain any necessary
consent of, and give notice of such recording to, such personnel of
it.
(r) SEVERABILITY. Any provision of this Agreement which is prohibited (for
reasons other than those constituting an illegality) or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions of the Agreement or affecting
the validity or enforceability of such provision in any other
jurisdiction unless the severance shall substantially impair the
benefits of the remaining portions of this Agreement or change the
reciprocal obligations of the parties.
(s) 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 Party) 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.
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorised officers as of [_] October 2002 effective as of [_] October
2002.
BARCLAYS BANK PLC
By:
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GRACECHURCH CARD FUNDING (NO. 2) PLC
By:
--------------------------------
Party C is a party to this Agreement to take the benefit of the provisions
herein and Party C will not be assuming any obligations under this Agreement
other than pursuant to Part 5(n) of this Schedule in the event that any Rating
Support collateral is posted to an account in the name of Party C or to an
account in the name of the Issuer where such account is charged in favour of
Party C:
THE BANK OF NEW YORK, LONDON BRANCH
By:
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Name:
Title: