EXECUTION COPY
SCHEDULE TO THE ISDA MASTER AGREEMENT
dated as of 15 December 2005
between
(1) THE ROYAL BANK OF SCOTLAND PLC (PARTY A); and
(2) ARRAN FUNDING LIMITED (PARTY B)
PART 1. TERMINATION PROVISIONS
(a) SPECIFIED ENTITY means in relation to Party A for the purpose of:
Section 5(a)(v) Not Applicable
Section 5(a)(vi) Not Applicable
Section 5(a)(vii) Not Applicable
Section 5(b)(iv) Not Applicable
and in relation to Party B for the purpose of:
Section 5(a)(v) Not Applicable
Section 5(a)(vi) Not Applicable
Section 5(a)(vii) Not Applicable
Section 5(b)(iv) Not Applicable
(b) SPECIFIED TRANSACTION will have the meaning specified in Section 14.
(c) The BREACH OF AGREEMENT provision of Section 5(a)(ii) will apply to Party
A and will not apply to Party B.
(d) The CREDIT SUPPORT DEFAULT provision of Section 5(a)(iii) will apply to
Party A and will not apply to Party B.
(e) The MISREPRESENTATION provision of Section 5(a)(iv) will apply to Party A
and will not apply to Party B.
(f) The DEFAULT UNDER SPECIFIED TRANSACTION provision of Section 5(a)(v) will
not apply to Party A and will not apply to Party B.
(g) The CROSS DEFAULT provisions of Section 5(a)(vi) will not apply to Party
A and will not apply to Party B.
(h) In respect of Party A, the BANKRUPTCY provision of Section 5(a)(vii) will
apply.
In respect of Party B, the BANKRUPTCY provision of Section
5(a)(vii)(2)(4) (as it applies to insolvency), (6), (7) and (9) will not
apply.
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Section 5(a)(vii)(8) will not apply to Party B to the extent that any
event caused by Party B, or to which Party B may be subject, is analogous
to any of the events described in Sections 5(a)(vii)(2), (4) (as it
applies to insolvency), (6), (7) and (9).
(i) The CREDIT EVENT UPON MERGER provisions of Section 5(b)(iv) will apply to
Party A but will not apply to Party B.
(j) The TAX EVENT provision of Section 5(b)(ii) will not apply to Party A and
will not apply to Party B.
(k) The TAX EVENT UPON MERGER provision of Section 5(b)(iii) will not apply
to Party A and will not apply to Party B.
(l) The AUTOMATIC EARLY TERMINATION provision of Section 6(a) will not apply
to Party A and will not apply to Party B.
(m) PAYMENTS ON EARLY TERMINATION. For the purposes of Section 6(e) of this
Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(n) TERMINATION CURRENCY means Sterling.
(o) ADDITIONAL TERMINATION EVENT will apply. The following shall constitute
Additional Termination Events:
(1) ENFORCEMENT NOTICE. The Note Trustee gives an Enforcement Notice
pursuant to Condition 10 (Event of Default) of the Conditions. For
the purposes of this Additional Termination Event, Party B shall
be the sole Affected Party.
(2) RATINGS DOWNGRADE OF PARTY A. The Additional Termination Events
resulting from Party A's failure to take the relevant measures
described in Part 5(c) (Ratings Downgrade) (if applicable) (for
which Party A shall be the Affected Party).
(3) WITHHOLDING TAX: Any withholding tax is imposed in relation to
Party B's payments under this Agreement or in relation to Party
A's payments under this Agreement and, following the expiration of
any period during which Party A is required to mitigate against
the imposition of such withholding tax as set out in Part 5(g) of
this Schedule, the imposition of such withholding tax is
determined by an extraordinary resolution of the holders of the
Notes in accordance with condition 14 of the terms and conditions
of the Notes to be a basic term modification.
Party B shall procure that Party A is notified of any such
determination as soon as reasonably practicable after such
extraordinary resolution has been passed. The Affected Party for
the purposes of this Additional Termination
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Event shall be the party making the payments upon which the
relevant withholding tax is imposed.
For the purposes of this Part 1(o), "NOTES" shall mean the relevant class
or sub-class of Notes to which this Agreement relates, as identified in
the applicable confirmation.
In the case of the Additional Termination Event described in clause (1)
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 relevant Additional 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, provided however, that such Early Termination Date shall
not be later nor earlier than the date set for redemption of the Notes in
accordance with Condition 10 of the terms and conditions of the Notes, as
applicable.
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Part 2. Tax Representations
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this Agreement
Party B makes no representation and Party A will 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 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 purpose of Section 3(f) of this
Agreement,
(1) Party A makes the following representations:
(a) it is a party to each transaction solely for the purposes of
a trade (or part of a trade) carried on by it in the United
Kingdom through a branch or agency; and
(b) it is resident in the United Kingdom or in a jurisdiction
with which the United Kingdom has a double tax treaty which
makes provision, whether for relief or otherwise, in relation
to interest, and
(2) Party B makes the following representation:
(a) it is a company duly incorporated under the laws of Jersey.
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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:-
None
(b) Other documents to be delivered are:-
PARTY FORM/DOCUMENT/ DATE BY COVERED BY
REQUIRED CERTIFICATE WHICH TO SECTION 3(D)
TO BE REPRESENTATION
DELIVER DELIVERED
DOCUMENT
Party A Appropriate evidence of the authority and true On signing Yes
and signatures of each official or representative signing of this
Party B this Agreement or, as the case may be, a Confirmation, on its behalf Agreement
Party A Legal opinion regarding the capacity, authority and due authorisation On the No
and Party of each party to enter into this Agreement, in form and substance signing
B satisfactory to the other party of this
Agreement
Party B A copy of the resolution of the Board of Directors of Party B approving On signing Yes
this Agreement and the Transactions contemplated by this Agreement of this
and authorizing a specified person or persons to execute this Agreement Agreement
and any Confirmation on behalf of Party B
Any copy documents shall be certified by a competent senior official of Party B
as being correct, complete and in full force and effect as at the date no
earlier than the date of this Agreement.
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PART 4. MISCELLANEOUS
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:-
Notices or communications to Party A (other than for Section 5 or 6
Notices) to be sent to the address listed in the Confirmation provided by
Party A or if prior to this Confirmation being received, to:-
Address: c/o RBS Financial Markets, 280 Xxxxxxxxxxx, Xxxxxx,
XX0X 0XX
Attention: Swaps Administration
Fax: 000 0000 0000
Telephone: 000 0000 0000
Address for notices or communications to Party A for Section 5 or 6:-
Address: c/o RBS Financial Markets, 135 Xxxxxxxxxxx, Xxxxxx,
XX0X 0XX
Attention: Head of Legal, Financial Markets
Fax: 000 0000 0000
Address for notices or communications to Party B:-
Address: 00 Xxxxxxxxx Xxxxxx
Xx. Xxxxxx
Xxxxxx XX0 0XX
Attention: The Directors, Arran Funding Limited
Telephone No: 00000 000000
Facsimile No: 01534 609333
With a copy in the case of notices or communications relating to Sections
5, 6, 7, 11 or 13 to:
Address: Bank of Xxx Xxxx
0 Xxxxxx Xxxxxx
Xxxxxx X00 0XX
Attention: Global Structured Products Unit (Corporate Trust)
Facsimile No.: 0000 000 0000/6399
Telephone: 0000 000 0000/6408
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(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: Xxxxxxxx Chance Secretaries Limited
00 Xxxxx Xxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx
X00 0XX
(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:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:
In respect of Party A:the Approved Credit Support Document and any other
document enabling the satisfaction of the collateral arrangements
referred to in Part 5(c) (Ratings Downgrade) of this Schedule.
"APPROVED CREDIT SUPPORT DOCUMENT" means the collateral agreement in the
form of the ISDA Credit Support Annex (Bilateral Form - Transfer)
(English Law), as modified by Paragraph 11 thereto, which is annexed to
this Schedule.
In respect of Party B: None
(g) CREDIT SUPPORT PROVIDER. Credit Support Provider means in relation to
Party A, any third party guarantor as referred to in Part 5(c) (Ratings
Downgrade) of this Schedule.
Credit Support Provider means in relation to Party B, not applicable.
(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, except that Party B will be deemed to have no Affiliates.
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PART 5. OTHER PROVISIONS
(a) NO SET-OFF
(i) All payments under this Agreement shall be made without set-off or
counterclaim except as expressly provided for herein.
(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."
(b) SECURITY INTEREST
Notwithstanding Section 7 (including, for the avoidance of doubt, the
amendments to Section 7 contained in Part 5(j) (Transfer) below), 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 Note Trustee (or any successor thereto) pursuant to and
in accordance with the Trust Deed and acknowledges notice of such
assignment. Each of the parties hereby confirms and agrees that the Note
Trustee shall not be liable for any of the obligations of Party B
hereunder.
(c) RATINGS DOWNGRADE
(i) INITIAL S&P RATING EVENT
In the event that the short-term, unsecured and unsubordinated
debt obligations of Party A and, if applicable, any Credit Support
Provider of Party A cease to be rated at least as high as "A-1" by
S&P (an "INITIAL S&P RATING EVENT"), then Party A will, within 30
calendar days of the occurrence of such Initial S&P Rating Event,
on a reasonable efforts basis and at its own cost attempt either
to:
(A) transfer collateral in accordance with the provisions of the
Credit Support Annex;
(B) transfer all of its rights and obligations with respect to
this Agreement to a replacement third party approved by
Party B (acting reasonably) provided that either (1) such
transfer would maintain the rating assigned to the Notes by
S&P at, or restore the rating assigned to the Notes by S&P
to, the level it would have been at but for such Initial S&P
Rating Event or (2) such replacement third party is agreed
between Party A and S&P ;
(C) procure another person to become a co-obligor or guarantor
in respect of Party A's obligations with respect to this
Agreement, provided that either (1) such co-obligor
arrangement or guarantee would maintain the rating assigned
to the Notes by S&P at, or restore the rating assigned to
the Notes by S&P to, the level it would
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have been at but for such Initial S&P Rating Event or (2)
such co-obligor or guarantor is agreed between Party A and
S&P ; or
(D) take such other action as Party A may agree with S&P.
If at any time any of the measures described in Part 5(c)(i)(B),
Part 5(c)(i)(C) and Part 5(c)(i)(D) above is taken or a relevant
Rating Event Remedy occurs, all collateral (or the equivalent
thereof, as appropriate) transferred by Party A pursuant to Part
5(c)(i)(A) above will be transferred by Party B back to Party A
and Party A will not be required to transfer any additional
collateral in respect of such Initial S&P Rating Event.
(ii) SUBSEQUENT S&P RATING EVENT
In the event that the long-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit Support
Provider of Party A cease to be rated at least as high as "BBB-"
by S&P (such event, a "SUBSEQUENT S&P RATING EVENT"), then Party A
will:
(A) immediately after, and in any event within 10 days of, the
occurrence of such Subsequent S&P Rating Event, at its own
cost and expense, use its best efforts to
(1) transfer all of its rights and obligations with
respect to this Agreement to a replacement third party
approved by Party B (acting reasonably) provided that
either (aa) such transfer would maintain the rating
assigned to the Notes by S&P at, or restore the rating
assigned to the Notes by S&P to, the level it would
have been at but for such Subsequent S&P Rating Event
or (bb) such replacement third party is agreed between
Party A and S&P ; or
(2) take such other action as Party A may agree with S&P ;
and
(B) if at the time such Subsequent S&P Rating Event occurs Party
A has provided collateral pursuant to Part 5(c)(i)(A) above,
continue to post collateral, in each case, in accordance
with the provisions of the Credit Support Annex
notwithstanding the occurrence of such Subsequent S&P Rating
Event until such time as the measures described in Part
5(c)(ii)(A) above are effected or a relevant Rating Event
Remedy occurs.
If at any time the measures described in Part 5(c)(ii)(A) above
are effected, all collateral (or the equivalent thereof, as
appropriate) transferred by Party A pursuant to each of Part
5(c)(i)(A) and Part 5(c)(ii)(B) above will be transferred by Party
B back to Party A and Party A will not be required to transfer any
additional collateral in respect of such Subsequent S&P Rating
Event. In addition, if a relevant Rating Event Remedy occurs at
any time prior to a measure described in Part 5(c)(ii)(A) above
being effected, any
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additional collateral (or the equivalent thereof, as appropriate)
transferred by Party A pursuant to Part 5(c)(ii)(B) above will be
transferred by Party B back to Party A and Party A will not be
required to transfer any additional collateral in respect of such
Subsequent S&P Rating Event.
(iii) INITIAL XXXXX'X RATING EVENT
In the event that:
(A) the long-term, unsecured and unsubordinated debt obligations
of Party A and, if applicable, any Credit Support Provider
of Party A cease to be rated at least as high as "A1" (or
its equivalent) by Xxxxx'x; or
(B) the short-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A cease to be rated at least as
high as "Prime- 1" (or its equivalent) by Xxxxx'x
(each, an "INITIAL XXXXX'X RATING EVENT"), then Party A will
within 30 calendar days of the occurrence of such Initial Xxxxx'x
Rating Event, on a reasonable efforts basis and at its own cost
attempt either to:
(1) transfer collateral in accordance with the provisions of the
Credit Support Annex;
(2) transfer all of its rights and obligations with respect to
this Agreement to a replacement third party approved by
Party B (acting reasonably) either (x) with the Xxxxx'x
Required Ratings domiciled in the same legal jurisdiction as
Party A, Party B or in England, or (y) as Party A may agree
with Xxxxx'x;
(3) procure another person to become a co-obligor or guarantor
in respect of Party A's obligations under this Agreement,
provided that such co-obligor or guarantor must be a person
either (x) with the Xxxxx'x Required Ratings domiciled in
the same legal jurisdiction as Party A, Party B or in
England, or (y) as Party A may agree with Xxxxx'x; or
(4) take such other action as Party A may agree with Xxxxx'x.
If at any time any of the measures described in Part 5(c)(iii)(2),
Part 5(c)(iii)(3) and Part 5(c)(iii)(4) above is taken or a
relevant Rating Event Remedy occurs, all collateral (or the
equivalent thereof, as appropriate) transferred by Party A
pursuant to Part 5(c)(iii)(1) above will be transferred by Party B
back to Party A and Party A will not be required to transfer any
additional collateral in respect of such Initial Xxxxx'x Rating
Event.
(iv) SUBSEQUENT XXXXX'X RATING EVENT
In the event that:
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(A) the long-term, unsecured and unsubordinated debt obligations
of Party A and, if applicable, any Credit Support Provider
of Party A cease to be rated at least as high as "A3" (or
its equivalent) by Xxxxx'x; or
(B) the short-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A cease to be rated at least as
high as "Prime- 2" (or its equivalent) by Xxxxx'x
(each, a "SUBSEQUENT XXXXX'X RATING EVENT"), then Party A will:
(1) within 30 calendar days of the occurrence of such Subsequent
Xxxxx'x Rating Event, on a reasonable efforts basis and at
its own cost attempt either to:
(x) transfer all of its rights and obligations with
respect to this Agreement to a replacement third party
approved by Party B (acting reasonably) either (a)
with the Xxxxx'x Required Ratings domiciled in the
same legal jurisdiction as Party A, Party B or in
England, or (b) as Party A may agree with Xxxxx'x;
(y) procure another person to become a co-obligor or
guarantor in respect of Party A's obligations under
this Agreement, provided that such co-obligor or
guarantor must be a person either (a) with the Xxxxx'x
Required Ratings domiciled in the same legal
jurisdiction as Party A, Party B or in England, or (b)
as Party A may agree with Xxxxx'x; or
(z) take such other action as Party A may agree with
Xxxxx'x; and
(2) prior to the later of the date that is 10 calendar days
following the occurrence of such Subsequent Xxxxx'x Rating
Event and the date that is 30 calendar days following the
occurrence of an Initial Xxxxx'x Rating Event, transfer
collateral, or, if at the time such Subsequent Xxxxx'x
Rating Event occurs Party A has provided collateral pursuant
to Part 5(c)(iii)(1) above, continue to post collateral, in
each case in accordance with the provisions of the Credit
Support Annex, notwithstanding the occurrence of such
Subsequent Xxxxx'x Rating Event until such time as any of
the measures described in Part 5(c)(iv)(1)(x), Part
5(c)(iv)(1)(y) and Part 5(c)(iv)(1)(z) above is taken.
If at any time any of the measures described in Part
5(c)(iv)(1)(x), Part 5(c)(iv)(1)(y) and Part 5(c)(iv)(1)(z) above
is taken all collateral (or the equivalent thereof, as
appropriate) transferred by Party A pursuant to each of Part
5(c)(iii)(1) and Part 5(c)(iv)(2) above will be transferred by
Party B back
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to Party A and Party A will not be required to transfer any
additional collateral in respect of such Subsequent Xxxxx'x Rating
Event. In addition, if a relevant Rating Event Remedy occurs at
any time prior to any of the measures described in Part
5(c)(iv)(1)(x), Part 5(c)(iv)(1)(y) and Part 5(c)(iv)(1)(z) above
being taken, any additional collateral (or the equivalent thereof,
as appropriate) transferred by Party A pursuant to Part
5(c)(iv)(2) above will be transferred by Party B back to Party A
and Party A will not be required to transfer any additional
collateral in respect of such Subsequent Xxxxx'x Rating Event.
(v) INITIAL FITCH RATING EVENT
If at any time:
(A) in the event that the only Confirmations into which this
Master Agreement (including this Schedule) is incorporated
confirm basis swap transactions or interest rate swap
transactions the long-term, unsecured and unsubordinated
debt obligations of Party A and, if applicable, any Credit
Support Provider of Party A, cease to be rated at least as
high as "A" (or its equivalent); or
(B) in the event that any of the Confirmations into which this
Master Agreement (including this Schedule) is incorporated
confirm a cross currency interest rate swap transaction, the
long-term, unsecured and unsubordinated debt obligations of
Party A and, if applicable, any Credit Support Provider of
Party A, cease to be rated at least as high as "A+" (or its
equivalent) by Fitch Ratings; or
(C) the short-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A, cease to be rated at least as
high as "F1" (or its equivalent) by Fitch Ratings;
(each, an "INITIAL FITCH RATING EVENT") then Party A will, within
30 calendar days of the occurrence of such Initial Fitch Rating
Event, on a reasonable efforts basis and at its own cost, attempt
either to:
(1) transfer collateral in accordance with the provisions of the
Credit Support Annex;
(2) transfer all of its rights and obligations with respect to
this Agreement to a replacement third party approved by
Party B (acting reasonably) with the Fitch Minimum Ratings
domiciled in the same legal jurisdiction as Party A, Party B
or in England; or
(3) procure another person to become co-obligor or guarantor in
respect of Party A's obligations under this Agreement,
provided that such co-obligor or guarantor must be a person
with the Fitch Minimum
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Ratings domiciled in the same legal jurisdiction as Party A,
Party B or in England.
If at any time any of the measures described in Part 5(c)(v)(2)
and Part 5(c)(v)(3) above is taken or a relevant Rating Event
Remedy occurs, all collateral (or the equivalent thereof, as
appropriate) transferred by Party A pursuant to Part 5(c)(v)(1)
above will be transferred by Party B back to Party A and Party A
will not be required to transfer any additional collateral in
respect of such Initial Fitch Rating Event.
(vi) FIRST SUBSEQUENT FITCH RATING EVENT
If at any time:
(A) the long-term, unsecured and unsubordinated debt obligations
of Party A and, if applicable, any Credit Support Provider
of Party A, cease to be rated at least as high as "BBB+" (or
its equivalent) by Fitch Ratings; or
(B) the short-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A, cease to be rated at least as
high as "F2" (or its equivalent) by Fitch Ratings,
(each, a "FIRST SUBSEQUENT FITCH RATING EVENT"), then Party A
will:
(1) within 30 calendar days of the occurrence of such First
Subsequent Fitch Rating Event on a reasonable efforts basis
and at its own cost attempt either to:
(aa) transfer all of its rights and obligations with
respect to this Agreement to a replacement third party
approved by Party B (acting reasonably) with the Fitch
Minimum Ratings domiciled in the same legal
jurisdiction as Party A, Party B or in England; or
(bb) procure another person to become co-obligor or
guarantor in respect of Party A's obligations under
this Agreement provided that such co-obligor or
guarantor must be a person with the Fitch Minimum
Ratings domiciled in the same legal jurisdiction as
Party A, Party B or in England.
(2) (aa) on a reasonable efforts basis and at its own cost
attempt to transfer collateral in accordance with the
provisions of the Credit Support Annex provided that
the calculations of the Transferee's Exposure under,
and each as defined in, the Credit Support Annex,
shall be verified on a monthly basis by an
independent third party (with the costs of such
independent verification being borne by Party A); or
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(bb) if at the time such First Subsequent Fitch Rating
Event occurs Party A has provided collateral pursuant
to Part 5(c)(v)(1) above, continue to post collateral,
in each case in accordance with the provisions of the
Credit Support Annex notwithstanding the occurrence of
such First Subsequent Fitch Rating Event until such
time as any of the measures described in Part
5(c)(vi)(1)(aa) and Part 5(c)(vi)(1)(bb) is taken,
except that the calculations of the Transferee's
Exposure under, and each as defined in, the Credit
Support Annex, shall be verified on a monthly basis by
an independent third party (with the costs of such
independent verification being borne by Party A).
If at any time any of the measures described in Part
5(c)(vi)(1)(aa) and Part 5(c)(vi) (1)(bb) is taken, all collateral
(or the equivalent thereof, as appropriate) transferred by Party A
pursuant to each of Part 5(c)(v)(1) and Part 5(c)(vi)(2) above
will be transferred by Party B back to Party A and Party A will
not be required to transfer any additional collateral in respect
of such Subsequent Fitch Rating Event. In addition, if a relevant
Rating Event Remedy occurs at any time prior to any of the
measures described in Part 5(c)(vi)(1)(aa) and Part
5(c)(vi)(1)(bb) above being taken, any additional collateral (or
the equivalent thereof, as appropriate) transferred by Party A
pursuant to Part 5(c)(vi)(2) above will be transferred by Party B
back to Party A and Party A will not be required to transfer any
additional collateral in respect of such First Subsequent Fitch
Rating Event.
(vii) SECOND SUBSEQUENT FITCH RATING EVENT
If at any time:
(A) the long-term, unsecured and unsubordinated debt obligations
of Party A and, if applicable, any Credit Support Provider
of Party A, cease to be rated at least as high as "BBB-" (or
its equivalent) by Fitch Ratings; or
(B) the short-term, unsecured and unsubordinated debt
obligations, of Party A and, if applicable, any Credit
Support Provider of Party A, cease to be rated at least as
high as "F3" (or its equivalent) by Fitch Ratings
(each, a "SECOND SUBSEQUENT FITCH RATING EVENT") then Party
A will, on a best efforts basis and at its own cost,
attempt either to:
(1) transfer all of its rights and obligations with
respect to this Agreement to a replacement third party
approved by Party B (acting reasonably) with the Fitch
Minimum Ratings domiciled in the same legal
jurisdiction as Party A; or
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(2) procure another person to become co-obligor or
guarantor in respect of Party A's obligations under
this Agreement, provided that such co-obligor or
guarantor must be a person with the Fitch Minimum
Ratings domiciled in the same legal jurisdiction as
Party A, Party B or in England.
If at any time any of the measures described in Part 5(c)(vii)(1)
and Part 5(c)(vii)(2) above is taken, all collateral (or the
equivalent thereof, as appropriate) transferred by Party A
pursuant to each of Part 5(c)(v)(1) and Part 5(c)(vi)(2) above
will be transferred by Party B back to Party A and Party A will
not be required to transfer any additional collateral in respect
of such Second Subsequent Fitch Rating Event.
(viii) NOTICE OF RATING EVENTS
Party A will promptly notify the Agent upon becoming aware that a
Rating Event has occurred.
(ix) RATING EVENT COSTS AND EXPENSES
On receipt by Party A of a written demand by Party B setting forth
its reasonable costs and expenses (including legal fees) incurred
by Party B and the Agent in connection with the requirements set
forth in this Part 5(c) of this Agreement, Party A will
immediately pay all such reasonable costs and expenses to Party B.
(x) CONSEQUENCES OF FAILURE TO COMPLY WITH RATING EVENT PROVISIONS
(A) If an Initial S&P Rating Event occurs, a relevant Rating
Event Remedy does not occur within 30 calendar days of the
occurrence of such Initial S&P Rating Event and Party A
fails to take any of the measures described in Part
5(c)(i)(A), Part 5(c)(i)(B), Part 5(c)(i)(C) and Part
5(c)(i)(D) above, such failure shall not be or give rise to
an Event of Default but shall constitute an Additional
Termination Event which shall be deemed to occur on the
thirtieth calendar day following the occurrence of such
Initial S&P Rating Event and in respect of which Party A
shall be the sole Affected Party and all Transactions shall
be Affected Transactions.
(B) If a Subsequent S&P Rating Event occurs, a relevant Rating
Event Remedy does not occur within 10 calendar days of the
occurrence of such Subsequent S&P Rating Event and:
(1) Party A fails to take the measures described in Part
5(c)(ii)(B) above, if applicable, such failure shall
not be or give rise to an Event of Default but shall
constitute an Additional Termination Event which shall
be deemed to occur on the tenth calendar day following
the occurrence of such Subsequent S&P Rating Event and
in respect of which Party
15
A shall be the sole Affected Party and all
Transactions shall be Affected Transactions; and
(2) Party A fails to take the measures described in Part
5(c)(ii)(A) above, and notwithstanding whether Party A
has satisfied the requirements of Part 5(c)(ii)(B)
above, such failure shall not be or give rise to an
Event of Default but shall constitute an Additional
Termination Event which shall be deemed to occur on
the tenth calendar day following the occurrence of
such Subsequent S&P Rating Event and in respect of
which Party A shall be the sole Affected Party and all
Transactions shall be Affected Transactions.
(C) If an Initial Xxxxx'x Rating Event occurs, and a relevant
Rating Event Remedy does not occur within 30 calendar days
of the occurrence of such Initial Xxxxx'x Rating Event and
Party A fails to take any of the measures described in Part
5(c)(iii)(1), Part 5(c)(iii)(2), Part 5(c)(iii)(3) and Part
5(c)(iii)(4) above, such failure shall not be or give rise
to an Event of Default but shall constitute an Additional
Termination Event which shall be deemed to occur on the
thirtieth calendar day following the occurrence of such
Initial Xxxxx'x Rating Event and in respect of which Party A
shall be the sole Affected Party and all Transactions shall
be Affected Transactions.
(D) If a Subsequent Xxxxx'x Rating Event occurs and:
(1) a relevant Rating Event Remedy does not occur on or
prior to the later of the date that is 10 calendar
days following such Subsequent Xxxxx'x Rating Event
and the date that is 30 calendar days following the
occurrence of an Initial Xxxxx'x Rating Event and
Party A fails to take the measures described in Part
5(c)(iv)(2) above, such failure shall be an Event of
Default which shall be deemed to occur on the later of
the date that is 10 calendar days following such
Subsequent Xxxxx'x Rating Event and the date that is
30 calendar days following the occurrence of an
Initial Xxxxx'x Rating Event and in respect of which
Party A shall be the Defaulting Party; and
(2) a relevant Rating Event Remedy does not occur within
30 calendar days of the occurrence of such Subsequent
Xxxxx'x Rating Event and Party A fails to take any of
the measures described in Part 5(c)(iv)(1)(x), Part
5(c)(iv)(1)(y) and Part 5(c)(iv)(1)(z) above, and
notwithstanding whether Party A has satisfied the
requirements of Part 5(c)(iv)(2) above, such failure
shall not be or give rise to an Event of Default but
16
shall constitute an Additional Termination Event which
shall be deemed to occur on the thirtieth calendar day
following the occurrence of such Subsequent Xxxxx'x
Rating Event and in respect of which Party A shall be
the sole Affected Party and all Transactions shall be
Affected Transactions.
(E) If an Initial Fitch Rating Event occurs, a relevant Rating
Event Remedy does not occur within 30 calendar days of the
occurrence of such Initial Fitch Rating Event and Party A
fails to take any of the measures described in Part
5(c)(v)(1), Part 5(c)(v)(2) and Part 5(c)(v)(3) above, such
failure shall not be or give rise to an Event of Default but
shall constitute an Additional Termination Event which shall
be deemed to occur on the thirtieth calendar day following
the occurrence of such Initial Fitch Rating Event and in
respect of which Party A shall be the sole Affected Party
and all Transactions shall be Affected Transactions.
(F) If a First Subsequent Fitch Rating Event occurs, a relevant
Rating Event Remedy does not occur within 30 calendar days
of the occurrence of such First Subsequent Fitch Rating
Event and Party A fails to take any of the measures
described in Part 5(c)(vi)(1) and Part 5(c)(vi)(2) above,
such failure shall not be or give rise to an Event of
Default but shall constitute an Additional Termination Event
which shall be deemed to occur on the thirtieth calendar day
following the occurrence of such First Subsequent Fitch
Rating Event and in respect of which Party A shall be the
sole Affected Party and all Transactions shall be Affected
Transactions.
(G) If a Second Subsequent Fitch Rating Event occurs, a relevant
Rating Event Remedy does not occur within 30 calendar days
of the occurrence of such Second Subsequent Fitch Rating
Event and Party A fails to take any of the measures
described in Part 5(c)(vii)(1) and 5(h)(vii)(2) above, such
failure shall not be or give rise to an Event of Default but
shall constitute an Additional Termination Event which shall
be deemed to occur on the thirtieth calendar day following
the occurrence of such Second Subsequent Fitch Rating Event
and in respect of which Party A shall be the sole Affected
Party and all Transactions shall be Affected Transactions.
(xi) Party B may only designate an Early Termination Date in respect of
an Event of Default or Additional Termination Event under this
Part 5(c) if:
(1) no amount would be payable by Party B to Party A pursuant to
Section 6(e) of this Agreement in respect of such Early
Termination Date; or
(2) if Party B has found a replacement counterparty willing to
enter into a new transaction on terms that reflect as
closely as reasonably possible, as determined by Party B in
its sole and absolute discretion, the
17
economic, legal and credit terms of each Transaction that
would be a Terminated Transaction under this Agreement in
respect of such Early Termination Date.
(xii) Party B will use its reasonable efforts to cooperate with Party A
in entering into such documents as may reasonably be requested by
Party A in connection with any of the measures which Party A may
take under this Part 5(c) following the occurrence of a Rating
Event.
(xiii) ADDITIONAL RATINGS EVENT DEFINITIONS. The following definitions are
added to Section 14 of this Agreement:
"CREDIT SUPPORT ANNEX" means the 1995 Credit Support Annex
(Bilateral Form - Transfer) (English law) published by the
International Swaps and Derivatives Association, Inc. entered into
between Party A and Party B and attached to this Agreement.
"FITCH MINIMUM RATINGS" means, in respect of the relevant entity,
its short-term, unsecured and unsubordinated debt obligations are
rated at least as high as F1 (or its equivalent) by Fitch Ratings
and either:
(a) in the event that the only Confirmations into which this
Master Agreement (including this Schedule) is incorporated
confirm basis swap transactions or interest rate swap
transactions, its long-term, unsecured and unsubordinated
debt obligations are rated at least as high as "A" (or its
equivalent) by Fitch Ratings or such other rating as Party A
may agree with Fitch Ratings from time to time; or
(b) in the event that any of the Confirmations into which this
Master Agreement (including this Schedule) is incorporated
confirm a cross currency interest rate swap transaction, its
long-term, unsecured and unsubordinated debt obligations are
rated at least as high as "A+" (or its equivalent) by Fitch
Ratings or such other rating as Party A may agree with Fitch
Ratings from time to time.
"MOODY'S REQUIRED RATINGS" means, in respect of the relevant
entity, its short-term, unsecured and unsubordinated debt
obligations are rated at least as high as "Prime-1" by Moody's and
its long-term, unsecured and unsubordinated debt obligations are
rated at least as high as "A1" by Moody's, or such other ratings
as Party A may agree with Moody's from time to time.
"RATING EVENT" means any of an Initial S&P Rating Event, a
Subsequent S&P Rating Event, an Initial Xxxxx'x Rating Event, a
Subsequent Xxxxx'x Rating Event, an Initial Fitch Rating Event, a
First Subsequent Fitch Rating Event and a Second Subsequent Fitch
Rating Event.
"RATING EVENT REMEDY" means, with respect to:
18
(a) an Initial S&P Rating Event, following the occurrence of
such Rating Event the short-term, unsecured and
unsubordinated debt obligations of Party A and, if
applicable, any Credit Support Provider of Party A are rated
at least as high as "A-1" by S&P ;
(b) a Subsequent S&P Rating Event, following the occurrence of
such Rating Event the long-term, unsecured and
unsubordinated debt obligations of Party A and if
applicable, any Credit Support Provider of Party A are rated
at least as high as "BBB-" by S&P ;
(c) an Initial Xxxxx'x Rating Event, following the occurrence of
such Rating Event:
(A) the long-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A are rated at least as high
as "A1" (or its equivalent) by Moody's; and
(B) the short-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A are rated at least as high
as "Prime-1" (or its equivalent) by Moody's;
(d) a Subsequent Xxxxx'x Rating Event, following the occurrence
of such Rating Event:
(A) the long-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A are rated at least as high
as "A3" (or its equivalent) by Moody's; and
(B) the short-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A are rated at least as high
as "Prime-2" (or its equivalent) by Moody's;
(e) an Initial Fitch Rating Event, following the occurrence of
such Rating Event:
(A) in the event that
(i) the only Confirmations into which this Master
Agreement (including this Schedule) is
incorporated confirm basis swap transactions or
interest rate swap transactions, the long-term,
unsecured and unsubordinated debt obligations of
Party A and, if applicable, any Credit Support
Provider of Party A are rated at least as high
as "A" (or its equivalent) by Fitch Ratings; or
19
(ii) any of the Confirmations into which this Master
Agreement (including this Schedule) is
incorporated confirm a cross currency interest
rate swap transaction, the long-term, unsecured
and unsubordinated debt obligations of Party A
and, if applicable, any Credit Support Provider
of Party A are rated at least as high as "A+"
(or its equivalent) by Fitch Ratings;
(B) the short-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A are rated at least as high
as "F1" (or its equivalent) by Fitch Ratings;
(f) a First Subsequent Fitch Rating Event, following the
occurrence of such Rating Event:
(A) the long-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A are rated at least as high
as "BBB+" (or its equivalent) by Fitch Ratings; and
(B) the short-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A are rated at least as high
as "F2" (or its equivalent) by Fitch Ratings; and
(g) a Second Subsequent Fitch Rating Event, following the
occurrence of such Rating Event:
(A) the long-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A are rated at least as high
as "BBB-" (or its equivalent) by Fitch Ratings; and
(B) the short-term, unsecured and unsubordinated debt
obligations of Party A and, if applicable, any Credit
Support Provider of Party A are rated at least as high
as "F3" (or its equivalent) by Fitch Ratings.
(d) RECORDING OF CONVERSATIONS
Each party to this Agreement, acknowledges and agrees to the tape
recording of conversations between the parties to this Agreement whether
by one or other or both of the parties.
(e) RELATIONSHIP BETWEEN THE PARTIES
20
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):
(a) 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 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.
(b) ASSESSMENT AND UNDERSTANDING. It is capable of assessing the
merits of and understanding (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.
(c) STATUS OF PARTIES. The other party is not acting as a fiduciary
or an adviser for it in respect of that Transaction."
(f) TAX
(i) NO DEDUCTION OR WITHHOLDING: The "Deduction or Withholding for
Tax" provisions of Section 2(d) will not apply to Party A and
Party B.
(ii) NO GROSS UP: 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 for or
on account of any Tax and, accordingly, Section 2(d)(i)(4) shall
not apply.
(iii) REDUCTION OF AMOUNTS PAYABLE BY PARTY A: If any Tax shall be
deducted, accounted for, or suffered on a payment due by Party
Payer B any payments to be made by Party B hereunder shall be net
of the amount of any Tax so withheld, accounted for, deducted or
suffered and Party A's payment obligations shall be reduced in
proportion to the amount by which the payments to be made by Party
B are so reduced. If any Tax shall be
21
deducted, accounted for, or suffered on a payment due by Payer A
any payments to be made by Party A hereunder shall be made net of
the amount of any taxes so withheld, accounted for, deducted or
suffered and the payment obligations of Party B shall remain the
same.
(g) TRANSFER FOLLOWING IMPOSITION OF WITHHOLDING TAX
(i) Notwithstanding the preceding paragraphs and the provisions of
Part 1(j) and Part 1(k) of this Schedule, Party A and Party B
agree that if Party A becomes aware that, as a result of the
occurrence of an event that would have constituted a Tax Event or
a Tax Event Upon Merger save for the provisions of Part 1(j) and
Part 1(k) of this Schedule, Party A would, on the next date for
payment under this Agreement, be required by any relevant taxing
authority or court of competent jurisdiction by operation of law
to withhold or account for or deduct any amount in respect of tax,
Party A will inform Party B and the Note Trustee.
(ii) Party A will use its best endeavours (provided that using its best
endeavours will not require it to incur any loss (including
additional capital costs), excluding immaterial, incidental
expenses) to (i) arrange for its obligations in respect of this
Agreement to be transferred to and be assumed by an Affiliate
incorporated in another jurisdiction or (ii) change the office
through which it acts for the purposes of this Agreement in each
case within 20 days of giving notice to Party B and the Note
Trustee pursuant to Part 5(g)(i) above provided that, in each
case, such course of action does not (a) result in the ratings of
the Notes to which this Agreement relates being reduced or
adversely affected by reference to the ratings which would
otherwise have applied to such Notes if the circumstances
described above had not occurred or (b) otherwise prejudice the
position of Party B under this Agreement.
(iii) If Party A is unable to arrange such substitution or change in
office, Party A shall so inform Party B and the Note Trustee and
shall use its best endeavours (provided that using its best
endeavours will not require it to incur any loss (including
additional capital costs), excluding immaterial, incidental
expenses) to arrange for its obligations in respect of this
Agreement to be transferred to and be assumed by another company
incorporated in another jurisdiction within 30 days of informing
Party B and the Note Trustee of its inability to arrange for a
substitution or change in office pursuant to Part 5(g)(ii) above
provided that such course of action does not (a) result in the
ratings of the Notes to which this Agreement relates being reduced
or adversely affected by reference to the ratings which would
otherwise have applied to such Notes if the circumstances
described above had not occurred or (b) otherwise prejudice the
position of Party B under this Agreement.
(h) CONDITION PRECEDENT
Section 2(a)(iii) shall be amended by the deletion of the words "a
Potential Event of Default".
22
(i) ADDITIONAL DEFINITIONS
Words and expressions defined in the prospectus dated 10 November 2005 in
respect of Party B's $7,500,000,000 Medium Term Note Programme (the
"PROSPECTUS") shall, except so far as the context otherwise requires,
have the same meanings in this Agreement. In the event of any
inconsistency between the definitions in this Agreement and in the
Prospectus, the definitions in this Agreement shall prevail.
(j) TRANSFER
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 Note Trustee under the Trust Deed neither Party
A nor Party B is permitted to assign, novate or transfer as a whole or in
part any of its rights, obligations or interests under this Agreement.
Party A may transfer is 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 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
the rating agencies then rating the Notes (or their successors) that such
transfer shall not adversely affect the then-current ratings of the
Notes.
(k) CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
A person who is not a party to this Agreement has no right under, or by
virtue of, the Contract (Rights of Third Parties) Xxx 0000 to enforce any
term of this Agreement, but this does not affect any right or remedy of
any person which exists or is available apart from that Act.
(l) LIMITED RECOURSE AND NON PETITION
The provisions of Clause 8 (Limited Recourse and Non-Petition) of the
Common Terms and Clause 1.3.2 of the Trust Deed relating to the Notes
apply to this Agreement as if set out in full in this Agreement, and as
if Party A is a Secured Creditor.
(m) SEPARATE AGREEMENT
Section 1(c) (Single Agreement) will be deleted and replaced with the
following:
"Each Transaction is entered into the basis that this Master Agreement
(including the Schedule and the Credit Support Annex to the Schedule) is
incorporated by reference into the Confirmation relating to that
Transaction so that this Master Agreement and
23
the relevant Confirmation shall form a single agreement with respect to
that Transaction. This Master Agreement shall not be constructed to form
a single agreement with two or more Confirmations together unless
specific provision to that effect is made in the relevant Confirmations.
Accordingly, all references to this "Agreement" mean, with respect to any
Transaction, this Master Agreement together with the Confirmation
relating to that Transaction and any other Transaction entered into in
relation to the same class or sub-class of Notes. It is understood that
the parties would not enter into any Transaction except on the foregoing
terms".
(n) TERMINATION PAYMENTS
Upon the occurrence of an Event of Default or an Additional Termination
Event with respect to Party A, Party B will be entitled (but not obliged)
to proceed in accordance with Section 6 of the Agreement subject to the
following:
(i) for the purposes of Section 6(d)(i), Party B's obligation with
respect to the extent of information to be provided with its
calculations is limited to information Party B has already
received in writing and provided Party B is able to release this
information without breaching the provisions of any law applicable
to, or any contractual restriction binding upon, Party B;
(ii) the following amendments shall be deemed to be made to the
definition of MARKET QUOTATION:
(1) the word "firm" shall be added before the word "quotations"
in the second line; and
(2) the words "provided that the documentation relating thereto
is either the same as this Agreement and the existing
confirmations hereto and the long-term, unsecured and
unsubordinated debt obligations of the Reference
Market-maker are rated not less than "AA-" by S&P, "A1" by
Xxxxx'x and "A" by Fitch Ratings (or, if such Reference
Market-maker is not rated by a Rating Agency, at such
equivalent rating that is acceptable to such Rating Agency)
or the Rating Agencies have confirmed in writing such
proposed documentation will not adversely impact the ratings
of the Notes" shall be added after "agree" in the sixteenth
line; and
(3) the last sentence shall be deleted and replaced with the
following:
"If, on the last date set for delivery of quotations,
exactly two quotations are provided, the Market Quotation
will, irrespective of whether the sum is payable by Party A
or by Party B, be equal to that amount which is the average
of the two quotations. If only one quotation is provided on
such date, Party B may, in its discretion, accept such
quotation as the Market Quotation and if Party B does not
accept such quotation (or if no quotation has been provided),
it will be deemed that the Market
24
Quotation in respect of the Terminated Transaction cannot be
determined."
(o) MARKET QUOTATION
For the purpose of the definition of Market Quotation, and without
limitation of the general rights of Party B under the Agreement, Party B
will undertake to use its reasonable efforts to obtain at least three
firm quotations as soon as reasonably practicable after the Early
Termination Date and in any event within six Local Business Days; and
Party A shall, for the purposes of Section 6(e), be permitted to obtain
on behalf of Party B quotations from Reference Market-makers.
If no quotations have been obtained within six Local Business Days after
the occurrence of the Early Termination Date or such longer period as
Party B may specify in writing to Party A, then it will be deemed that
the Market Quotation in respect of the Terminated Transaction cannot be
determined.
Party B will be deemed to have discharged its obligations under Part 5(n)
(Termination Payments) above if it promptly requests, in writing, Party A
(such request to be made within two Local Business Days after the
occurrence of the Early Termination Date) to obtain on behalf of Party B
quotations from Reference Market-makers. Party A agrees to act in
accordance with such request and Party B will not be obliged to consult
with Party A as to the day and time of obtaining any quotations.
(p) CHANGE OF ACCOUNT
Party A may change its account for receiving payment or delivery by
giving notice to Party B at least 10 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 10 Local Business Days prior to the
scheduled date for payment or delivery to which such change applies
unless Party A gives timely notice of a reasonable objection to such
change.
(q) AMENDMENTS TO SECTION 6
Upon the occurrence of an Event of Default pursuant to Section 5(a)(i) in
circumstances where Party A is the Defaulting Party and Party B
designates an Early Termination Date in respect of such Event of Default,
(A) Section 6(e)(i)(3) shall be amended by the deletion of the words in
the first sentence beginning "and the Termination Currency" on the third
line and ending "Defaulting Party" on the fifth line, (B) the addition of
the following words after the words "Terminated Transactions" in the
third line of Section 6(e)(ii)(3): "less (B) the Termination Currency
Equivalent of the Unpaid Amounts equal to the Value of the Credit Support
Balance (if any) pursuant to Paragraph 6 of the ISDA Credit Support Annex
(the "COLLATERAL UNPAID AMOUNTS") and (C) the insertion at the end of
Section 6(e)(i)(3) of the following sentence:
25
"Furthermore, a separate amount equal to the Termination Currency
Equivalent of the Unpaid Amounts (other than Collateral Unpaid Amounts)
owing to the Non-Defaulting Party less the Termination Currency
Equivalent of the Unpaid Amounts (other than Collateral Unpaid Amounts)
owing to the Defaulting Party will be payable. 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."
In addition, Section 6(d)(ii) shall be amended by the deletion of the
word "An" at the beginning of the first sentence and the replacement of
the word "Each" and each subsequent reference to "such amount" in Section
6(d)(ii) shall be replaced by a reference to "each amount" therein.
For the purposes of this Part 5(q) and the payments referred to herein,
the provisions of Section 2(c) shall not apply.
(r) PAYMENTS TO THE PRINCIPAL PAYING AGENT
Party A is hereby authorised to make payment of all sums which are
payable to Party B under this Agreement direct to the Principal Paying
Agent or such other person as may be specified in any Confirmation on
behalf of Party B and any such payment will discharge Party A's
obligation to make such payment to Party B.
IN WITNESS WHEREOF, the parties have executed and delivered this Schedule as of
the date specified on the first page of this document.
THE ROYAL BANK OF SCOTLAND PLC ARRAN FUNDING LIMITED
------------------------------ ------------------------------
By: By:
Name: Name:
Title Title
26
