EXHIBIT 10.3.4
(Multicurrency -- Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of 28 January, 2004
Citibank, N.A., London The Bank of New York (as "Note Trustee")
Branch ("Party A") Granite Mortgages 04-1 plc ("Party B")
..................................and..........................................
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming
those Transactions.
Accordingly, the parties agree as follows: --
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than
by payment), such delivery will be made for receipt on the due date in
the manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date in
respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified in
this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a
reasonable objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to
make payment of any such amount will be automatically satisfied and discharged
and, if the aggregate amount that would otherwise have been payable by one
party exceeds the aggregate amount that would otherwise have been payable by
the other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii)
above will not, or will cease to, apply to such Transactions from such date).
This election may be made separately for different groups of Transactions and
will apply separately to each pairing of Offices through which the parties
make and receive payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
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(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation
of an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all
necessary action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision
of its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
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(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency
or official or any arbitrator that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of the
date of the information, true, accurate and complete in every material
respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and completed
in a manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated,
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organised, managed and controlled, or considered to have its seat, or in which
a branch or office through which it is acting for the purpose of this
Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other
party against any Stamp Tax levied or imposed upon the other party or in
respect of the other party's execution or performance of this Agreement by any
such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is given
to the party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under
Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by
the party in accordance with this Agreement if such failure is not
remedied on or before the thirtieth day after notice of such failure is
given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of(1) a default, event
of default or other similar condition or event (however
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described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or becoming capable
at such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into,
or transfers all or substantially all its assets to, another entity and,
at the time of such consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii)
below, and, if specified to be applicable, a Credit Event
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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party):--
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
is required to be paid in respect of such Tax under Section 2(d)(i)(4)
(other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than
by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of
a party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity
(which will be the Affected Party) where such action does not constitute
an event described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.
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6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, "Automatic Early Termination" is specified in the Schedule as
applying to a party, then an Early Termination Date in respect of all
outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section
5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as
of the time immediately preceding the institution of the relevant proceeding
or the presentation of the relevant petition upon the occurrence with respect
to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as the
other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected Transactions
to another of its Offices or Affiliates so that such Termination Event
ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) Right to Terminate. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence
of written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in
the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss", and a
payment method, either the "First Method" or the "Second Method". If the
parties fail to designate a payment measure or payment method in the Schedule,
it will be deemed that "Market Quotation" or the "Second Method", as the case
may be, shall apply. The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be subject to
any Set-off.
(i) Events of Default. If the Early Termination Date results from an
Event of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of(A) the sum
of the Settlement Amount (determined by the Non-defaulting Party) in
respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party
over (B) the Termination Currency Equivalent of the Unpaid Amounts
owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the
9
Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of the
party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement Amount
("Y") and (b) the Termination Currency Equivalent of the Unpaid
Amounts owing to X less (II) the Termination Currency
Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all Terminated
Transactions) and an amount will be payable equal to one-half
of the difference between the Loss of the party with the higher
Loss ("X") and the Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate
of loss and not a penalty. Such amount is payable for the loss of bargain
and the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
10
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of
the other party, except that:
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be
void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such tender results
in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered
into the Contractual Currency, of the full amount in the Contractual Currency
of all amounts payable in respect of this Agreement. If for any reason the
amount in the Contractual Currency so received falls short of the amount in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in the
Contractual Currency so received exceeds the amount in the Contractual
Currency payable in respect of this Agreement, the party receiving the payment
will refund promptly the amount of such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party
is entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency and will refund promptly to the other party any excess of
the Contractual Currency received by such party as a consequence of sums paid
in such other currency if such shortfall or such excess arises or results from
any variation between the rate of exchange at which the Contractual Currency
is converted into the currency of the judgment or order for the purposes of
such judgment or order and the rate of exchange at which such party is able,
acting in a reasonable manner and in good faith in converting the currency
received into the Contractual Currency, to purchase the Contractual Currency
with the amount of the currency of the judgment or order actually received by
such party. The term "rate of exchange" includes, without limitation, any
premiums and costs of exchange payable in connection with the purchase of or
conversion into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the
party to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of
this Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
11
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced
by a facsimile transmission) and executed by each of the parties or confirmed
by an exchange of telexes or electronic messages on an electronic messaging
system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall he entered into as soon as practicable
and may he executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange
of electronic messages on an electronic messaging system, which in each
case will be sufficient for all purposes to evidence a binding supplement
to this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it had entered into the
Transaction through its head or home office. This representation will be
deemed to be repeated by such party on each date on which a Transaction is
entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including legal
fees and Stamp Tax, incurred by such other party by reason of the enforcement
and protection of its rights under this Agreement or any Credit Support
Document
12
to which the Defaulting Party is a party or by reason of the early
termination of any Transaction, including, but not limited to, costs of
collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of
New York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the
Civil Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
13
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute
process agent acceptable to the other party. The parties irrevocably consent
to service of process given in the manner provided for notices in Section 12.
Nothing in this Agreement will affect the right of either party to serve
process in any other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the
grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be entitled
in any Proceedings in the courts of any jurisdiction and irrevocably agrees,
to the extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.
14. Definitions
As used in this Agreement:-- "Additional Termination Event" has the meaning
specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control"
of any entity or person means ownership of a majority of the voting power of
the entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified
as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
14
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed
in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to
such recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case
of tax matters, by the practice of any relevant governmental revenue
authority) and "lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and
foreign currency deposits) (a) in relation to any obligation under Section
2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or determined
pursuant to provisions contained, or incorporated by reference, in this
Agreement, (b) in relation to any other payment, in the place where the
relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment, (c) in relation to any notice
or other communication, including notice contemplated under Section 5(a)(i),
in the city specified in the address for notice provided by the recipient and,
in the case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to such
Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or re-establishing any hedge or related trading
position (or any gain resulting from any of them). Loss includes losses and
costs (or gains) in respect of any payment or delivery required to have been
made (assuming satisfaction of each applicable condition precedent) on or
before the relevant Early Termination Date and not made, except, so as to
avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies.
Loss does not include a party's legal fees and out-of-pocket expenses referred
to under Section 11. A party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or
by such party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting
Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions
that would, but for the occurrence of the relevant Early Termination Date,
have
15
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is
to be included. The Replacement Transaction would be subject to such
documentation as such party and the Reference Market-maker may, in good faith,
agree. The party making the determination (or its agent) will request each
Reference Market-maker to provide its quotation to the extent reasonably
practicable as of the same day and time (without regard to different time
zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if
more than one quotation has the same highest value or lowest value, then one
of such quotations shall be disregarded. If fewer than three quotations are
provided, it will be deemed that the Market Quotation in respect of such
Terminated Transaction or group of Terminated Transactions cannot be
determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head
or home office.
"Potential Event of Default" means any event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or
to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention
or withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or
imposed on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not
(in the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule.
16
"Specified Indebtedness" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or surety or
otherwise) in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into between one party to this Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such party) and
the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is a
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions),
(b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment
or fee of any nature (including interest, penalties and additions thereto)
that is imposed by any government or other taxing authority in respect of any
payment under this Agreement other than a stamp, registration, documentation
or similar tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in
effect immediately before the effectiveness of the notice designating that
Early Termination Date (or, if "Automatic Early Termination" applies,
immediately before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated
in the Termination Currency, such Termination Currency amount and, in respect
of any amount denominated in a currency other than the Termination Currency
(the "Other Currency"), the amount in the Termination Currency determined by
the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or,
if the relevant Market Quotation or Loss (as the case may be), is determined
as of a later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected as
provided below) for the purchase of such Other Currency with the Termination
Currency at or about 11:00 a.m. (in the city in which such foreign exchange
agent is located) on such date as would be customary for the determination of
such a rate for the purchase of such Other Currency for value on the relevant
Early Termination Date or that later date. The foreign exchange agent will, if
only one party is obliged to make a determination under Section 6(e), be
selected in good faith by that party and otherwise will be agreed by the
parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or an
Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or
prior to such Early Termination Date and which remain unpaid as at such Early
Termination Date and (b) in respect of each Terminated Transaction, for each
obligation under Section 2(a)(i) which was (or would have been but for Section
2(a)(iii)) required to be settled by delivery to such party on or prior to
such Early Termination Date and which has not been so settled as at such Early
Termination Date, an amount equal to the fair market
17
value of that which was (or would have been) required to be delivered as of
the originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or
would have been required to have been paid or performed to (but excluding)
such Early Termination Date, at the Applicable Rate. Such amounts of interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed. The fair market value of any obligation referred to in clause
(b) above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be
the average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
Citibank, N.A., London Branch Granite Mortgages 04-1 plc,
being Party A being Party B
------------------------------ --------------------------------
(Name of Party) (Name of Party)
By: By:
--------------------------- -----------------------------
Name: Name:
Title: Title:
Date: Date:
The Bank of New York,
being the Note Trustee
--------------------------------
(Name of Party)
By:
--------------------------------
Name:
Title:
Date:
18
(Series 2 Class C Notes)
SCHEDULE
to the
Master Agreement
dated as of 28 January, 2004
between
(1) CITIBANK, N.A., LONDON BRANCH ("Party A");
(2) GRANITE MORTGAGES 04-1 plc ("Party B"); and
(3) THE BANK OF NEW YORK (as Note Trustee and which has agreed to become a
party to this Agreement solely for the purpose of taking the benefit of
Parts 5(c) and (h) and undertaking the obligations in Part 5(k)(vii) of
the Schedule to this Agreement).
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of:-
Section 5(a)(v), none
Section 5(a)(vi), none
Section 5(a)(vii), none
Section 5(b)(iv), none
and in relation to Party B for the purpose of:-
Section 5(a)(v), none
Section 5(a)(vi), none
Section 5(a)(vii), none
Section 5(b)(iv), none
(b) "Specified Transaction" will have the meaning specified in Section 14.
(c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to
Party A and will not apply to Party B.
1
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will apply
to Party A and will not apply to Party B.
(e) The "Automatic Early Termination" provision of Section 6(a) will not
apply to Party A and will not apply to Party B.
(f) Payments on Early Termination. For the purposes of Section 6(e) of this
Agreement:-
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means Sterling.
Part 2. Tax Representations
(a) Payer Representations. For the purpose of Section 3(e) of this Agreement,
Party A and Party B will each make the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from
any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of
this Agreement) to be made by it to the other party under this Agreement.
In making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement of the other party
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the
satisfaction of the agreement of the other party contained in Section
4(d) of this Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.
(b) Payee Representations. For the purposes of Section 3(f) of the Agreement,
Party A makes the representation specified below (the "Additional Tax
Representation"):-
(i) 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; or
(ii) 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.
(c) Additional Termination Event. The Additional Tax Representation proves to
have been incorrect or misleading in any material respect with respect to
one or more Transactions (each an "Affected Transaction" for the purposes
of this Additional Termination Event) when made or repeated or deemed to
have been made or repeated. The Affected Party shall be Party A only.
2
Part 3. Agreement to Deliver Documents
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each
party agrees to deliver the following documents, as applicable:-
(a) Tax forms, documents or certificates to be delivered are:-
Party required to Form/Document/ Date by which to be
deliver document Certificate delivered
None None None
(b) Other documents to be delivered are:-
Party required Form/Document/ Date by which Covered by
to deliver Certificate to be delivered Section 3(d)
document Representation
Party A and Appropriate evidence On signing of Yes
Party B of its signatory's this Agreement
authority
Party B Certified copy of On signing of Yes
board resolution this Agreement
Party A Legal opinion in On signing of No
form and substance this Agreement
satisfactory to
Party B
Party B Legal opinion of the On signing of No
counsel to Party B this Agreement
in form and
substance
satisfactory to
Party A
3
Part 4. Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a) of this
Agreement:-
Address for notices or communications to Party A:-
Address: Citibank, N.A., London Branch
Citigroup Centre
00 Xxxxxx Xxxxxx
Xxxxxx X00 0XX
Attention: Head of Sales/Trading Legal Dept.
Facsimile No.: x00 000 000 0000
and copy to: Citibank, N.A., London Branch
Citigroup Centre
00 Xxxxxx Xxxxxx
Xxxxxx X00 0XX
Attention: Xxxx Xxxxxx
Facsimile No.: x00 000 000 0000
Address for notices or communications to Party B:-
Address: Granite Mortgages 04-1 plc
Xxxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxxx
XX0X 0XX
With a copy to: Northern Rock plc
Xxxxxxxx Xxxx Xxxxx
Xxxxxxxx
Xxxxxxxxx xxxx Xxxx
XX0 0XX
Attention: Xxxxx X. Xxxxxx
Facsimile No.: 0191 279 4694
With a copy to the Note Trustee:-
Address: The Bank of New York
One Canada Xxxxxx
00xx Xxxxx
0
Xxxxxx
X00 0XX
Attention: Corporate Trust (Global Structured Finance)
Facsimile No.: 020 7964 6061
(b) Process Agent. For this purpose of Section 13(c) of this Agreement:-
Party A appoints as its Process Agent: None.
Party B appoints as its Process Agent: None.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:-
Party A is not a Multibranch Party and will act through its London
branch.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent shall be as specified in each
Confirmation.
(f) Credit Support Document. Details of any Credit Support Document:-
In respect of Party A: none.
In respect of Party B: none.
(g) Credit Support Provider.
Credit Support Provider means, in relation to Party A, None.
Credit Support Provider means, in relation to Party B, None.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with English law.
(i) Netting of Payments. Sub-paragraph (ii) of Section 2(c) of this Agreement
will apply to Transactions entered into under this Agreement unless
otherwise specified in a Confirmation.
(i) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
5
Part 5. Other Provisions
(a) Definitions and Interpretation
Capitalised terms used in this Agreement shall, except where the context
otherwise requires and save where otherwise defined in this Agreement,
bear the meanings given to them in the Master Definitions Schedule as
amended and restated by (and appearing in Appendix 1 to) the Master
Definitions Schedule Seventh Amendment Deed executed by, among others,
the Note Trustee on 26 January, 2004 and the Issuer Master Definitions
Schedule signed for the purposes of identification by Sidley Xxxxxx Xxxxx
& Wood and Xxxxx & Xxxxx on 28 January, 2004 (as the same have been and
may be amended, varied or supplemented from time to time with the consent
of the parties hereto). The Issuer Master Definitions Schedule specified
above shall prevail to the extent that it conflicts with the Master
Definitions Schedule.
(b) No Set-Off
(i) All payments under this Agreement shall be made without set-off or
counterclaim, except as expressly provided for in Section 6.
(ii) Section 6(e) shall be amended by the deletion of the following
sentence: "The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be
subject to any Set-off."
(c) Security Interest
Notwithstanding Section 7, Party A hereby agrees and consents to the
assignment by way of security by Party B of its interests under this
Agreement (without prejudice to, and after giving effect to, any
contractual netting provision contained in this Agreement) to the Note
Trustee (or any successor thereto) pursuant to and in accordance with the
Current Issuer Deed of Charge 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.
(d) Disapplication of certain Events of Default
Section 5(a)(ii), Section 5(a)(iii), Section 5(a)(iv), Section 5(a)(v),
Section 5(a)(vii)(2), (5),(6),(7) and (9) and Section 5(a)(viii) will not
apply in respect of Party B.
Section 5(a)(vii)(8) will not apply to Party B to the extent that it
applies to Section 5(a)(vii)(2) (5),(6),(7) and (9).
(e) Disapplication of certain Termination Events
The "Tax Event" and "Tax Event Upon Merger" provisions of Section
5(b)(ii) and 5(b)(iii) will not apply to Party A or to Party B.
6
(f) Additional Event of Default and Additional Termination Event
The following shall constitute an additional Event of Default:
"Note Enforcement Notice. The Note Trustee serves a Note Enforcement
Notice on Party B (in which case Party B shall be the Defaulting Party)."
The following shall constitute an Additional Termination Event:
"Redemption and Prepayment of the Current Issuer Notes. The Current
Issuer serves a notice of redemption pursuant to Condition 5(F) of the
terms and conditions of the Current Issuer Notes (in which case Party B
shall be the sole Affected Party and all Transactions shall be Affected
Transactions)."
(g) Northern Rock plc as Party B's Agent
Party B hereby declares that pursuant to the Current Issuer Cash
Management Agreement it has appointed Northern Rock plc to act as its
agent for the purpose, inter alia, of the operation of this Agreement and
dealing with payments hereunder. Accordingly, unless and until written
notice is received by Party A from the Note Trustee that such appointment
has been terminated, Party A shall be entitled to treat all
communications and acts relating to this Agreement received from or
carried out by Northern Rock plc as agent for Party B under the Current
Issuer Cash Management Agreement as being those of Party B and Party B
hereby agrees to ratify and confirm the same.
(h) Security, Enforcement and Limited Recourse
(i) Party A agrees with Party B and the Note Trustee to be bound by the
terms of the Current Issuer Deed of Charge and the Current Issuer
Cash Management Agreement and, in particular, confirms that: (i)
save as otherwise expressly set out in the Current Issuer Cash
Management Agreement or, as applicable, the Current Issuer Deed of
Charge, no sum shall be payable by or on behalf of Party B to it
except in accordance with the Current Issuer Priority of Payments as
set out in the Current Issuer Cash Management Agreement or, as
applicable, the Current Issuer Deed of Charge (as the same may be
amended from time to time); and (ii) it will not take any steps for
the winding up, dissolution or reorganisation or for the appointment
of a receiver, administrator, administrative receiver, trustee,
liquidator, sequestrator or similar officer of Party B or of any or
all of its revenues and assets nor participate in any ex parte
proceedings nor seek to enforce any judgment against Party B except
as provided in the Current Issuer Deed of Charge.
(ii) In relation to all sums due and payable by Party B to Party A, Party
A agrees that it shall have recourse only to sums available to Party
B for the purpose of making payments to Party A in accordance with
the relevant Current Issuer Priority of Payments, the Current Issuer
Cash Management Agreement and/or, as applicable the Current Issuer
Deed of Charge.
7
(iii) If, on any date, Party B does not pay the full amount it would
otherwise owe under any Transaction (after the application of
Section 2(c) to such Transaction) because of the limitation
contained in clause (i) of this paragraph (h), then (A) payment by
Party B of the shortfall (and the corresponding payment obligation
of Party A with respect to such shortfall (being the full amount
Party A would otherwise owe on such date less the actual amount
payable by Party A determined in accordance with clause (iii) (C) of
this paragraph (h))) will not then fall due but will instead be
deferred until the first Payment Date thereafter on which sufficient
funds are available (subject to the limitation in clause (i) of this
paragraph (h)), (B) failure by Party B to make the full payment
under such Transaction (after the application of Section 2(c) to
such Transaction) shall not constitute an Event of Default for the
purpose of Section 5(a)(i), and (C) the obligation of Party A to
make payment to Party B, in respect of the same Transaction, on such
date, will be reduced so that Party A will be obligated to pay the
Equivalent Percentage of the amount it would otherwise owe under
that Transaction. "Equivalent Percentage" means the percentage
obtained by dividing the amount paid by Party B by the amount it
would have paid absent such limitation.
(iv) For the avoidance of doubt, if an Early Termination Date results
from an Event of Default, any amount payable (the payment of which
was deferred or not paid in the circumstances described under clause
(iii) of this Part 5(h) by Party A or by Party B, as the case may
be, under this Agreement) will be deemed to be Unpaid Amounts owing
to Party B or, as the case may be, owing to Party A.
(v) Following the calculation thereof, Party B agrees to notify Party A
of the amount of any shortfall, the payment of which by Party B is
deferred in accordance with clause (iii) of this paragraph (h).
(i) Scope of Agreement
It is hereby understood and agreed that the provisions of this Agreement
shall only apply to the Transactions entered into between Party A and
Party B on the date as of which this Agreement is made as evidenced by
the Confirmation substantially in the form attached hereto as Appendix A,
and that no other Transaction may be entered into pursuant hereto except
in accordance with sub-paragraphs (i)(A),(ii)(D), (iii)(D), (iv)(A) or
(v)(D) of Part 5(k) or where the Rating Agencies have confirmed in
writing that the then current ratings of the Current Issuer Notes would
not be adversely affected by such other Transaction.
(j) Authorised Person
For the purposes of Section 3 of this Agreement, Party A represents to
Party B (which representation will be deemed to be repeated by Party A on
each date on which a Transaction is entered into and throughout the
course of any Transaction) that it is an authorised person for the
purposes of the Financial Services and Markets Xxx 0000.
8
(k) Ratings Downgrade of Party A
(i) In the event that the short-term, unsecured and unsubordinated debt
obligations of Party A (or its successor), or any Credit Support
Provider of Party A, cease to be rated at least as high as "A1+"(or
its equivalent) by Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies Inc. ("S&P") and as a result of such
downgrade the then current rating of the Series 2 Class C Notes may
in the reasonable opinion of S&P be downgraded or placed under
review for possible downgrade (an "S&P Note Downgrade Event"), then
Party A shall, within 30 days of the occurrence of such S&P Note
Downgrade Event, at its own cost either:-
(A) put in place an appropriate xxxx-to-market collateral agreement
(which may be based on the credit support documentation
published by ISDA, or otherwise, and relates to collateral in
the form of cash or securities or both) in support of its
obligations under this Agreement provided that (x) Party A
shall be deemed to have satisfied the requirements of S&P if
the amount of collateral agreed to be provided in the form of
cash and/or securities (the "Collateral Amount") is determined
on a basis which is no more onerous than the S&P Criteria (as
defined below) and (y) the Collateral Amount shall not be
required to exceed such amount as would be required (in
accordance with the S&P Criteria) to restore the rating of the
Series 2 Class C Notes to the level they would have been at
immediately prior to such downgrading; or
(B) transfer all of its rights and obligations with respect to this
Agreement to a replacement third party whose short-term,
unsecured and unsubordinated debt obligations are rated at
least as high as "A1+" (or its equivalent) by S&P or such other
rating as is commensurate with the rating assigned to the
Series 2 Class C Notes by S&P from time to time; or
(C) procure another person to become co-obligor in respect of the
obligations of Party A under this Agreement whose short-term,
unsecured and unsubordinated debt obligations are rated at
least as high as "A1+" (or its equivalent) by S&P or such other
rating as is commensurate with the rating assigned to the
Series 2 Class C Notes by S&P from time to time; or
(D) take such other action as Party A may agree with S&P as will
result in the rating of the Series 2 Class C Notes then
outstanding following the taking of such action being rated no
lower than the rating of the Series 2 Class C Notes immediately
prior to such downgrade.
"S&P Criteria" means the criteria published in January 1999 as
amended in June 2000 which enable entities rated lower than a
specified level to participate in structured finance transactions
which, through collateralisation, are rated at a higher level (as
referred to, in part, in the article entitled New Interest Rate
9
Currency Swap Criteria Broadens Allowable Counterparties in the
January 1999 issue of S&P's Structured Finance publication).
(ii) In the event that (aa) the long-term, unsecured and unsubordinated
debt obligations of Party A (or its successor) and, if relevant, any
Credit Support Provider of Party A, cease to be rated at least as
high as "A1" (or its equivalent) by Xxxxx'x Investors Service
Limited ("Moody's") or (bb) the short-term, unsecured and
unsubordinated debt obligations of Party A (or its successor) and,
if relevant, any Credit Support Provider of Party A, cease to be
rated at least as high as "Prime-1" (or its equivalent) by Moody's
(an "Initial Moody's Note Downgrade Event"), then Party A will, on a
reasonable efforts basis and at its own cost attempt to:-
(A) transfer all of its rights and obligations with respect to this
Agreement to either (x) a replacement third party with the
Required Ratings (as defined below) domiciled in the same legal
jurisdiction as Party A or Party B or (y) a replacement third
party in relation to whom Xxxxx'x has confirmed that there
would be no Initial Xxxxx'x Note Downgrade Event; or
(B) procure another person to become co-obligor in respect of the
obligations of Party A under this Agreement. Such co-obligor
may be either (x) a person with the Required Ratings domiciled
in the same legal jurisdiction as Party A or Party B, or (y) a
person in relation to whom Xxxxx'x has confirmed that there
would be no Initial Xxxxx'x Note Downgrade Event; or
(C) take such other action as Xxxxx'x shall confirm to Party A will
remedy an Initial Xxxxx'x Note Downgrade Event.
Pending compliance with any of (k)(ii)(A), (k)(ii)(B) or (k)(ii)(C)
above, Party A will, at its own cost:
(D) within 30 days of the occurrence of an Initial Xxxxx'x Note
Downgrade Event, put in place a xxxx-to-market collateral
agreement in a form and substance acceptable to Xxxxx'x (which
may be based on the credit support documentation published by
ISDA, or otherwise, and relates to collateral in the form of
cash or securities or both) in support of its obligations under
this Agreement which complies with the Xxxxx'x Criteria (or
such other amount as may be agreed with Xxxxx'x).
If any of (k)(ii)(A), (k)(ii)(B) or (k)(ii)(C) are satisfied at any
time, all collateral (or the equivalent thereof, as appropriate)
transferred by Party A pursuant to (k)(ii)(D) will be retransferred
to Party A and Party A will not be required to transfer any
additional collateral.
(iii) In the event that (aa) the long-term, unsecured and unsubordinated
debt obligations of Party A (or its successor) and, if relevant, any
Credit Support Provider of Party A, cease to be rated at least as
high as "A3" (or its equivalent)
10
by Xxxxx'x or (bb) the short-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) and, if relevant, any
Credit Support Provider of Party A, cease to be rated at least as
high as "Prime-2" (or its equivalent) by Xxxxx'x (a "Subsequent
Xxxxx'x Note Downgrade Event"), then Party A will, on a reasonable
efforts basis, within 30 days of the occurrence of such Subsequent
Xxxxx'x Note Downgrade Event, and at its own cost:
(A) transfer all of its rights and obligations with respect to this
Agreement to either (x) a replacement third party with the
Required Ratings domiciled in the same legal jurisdiction as
Party A or Party B, or (y) a replacement third party in
relation to whom Xxxxx'x has confirmed that there would be no
Subsequent Xxxxx'x Note Downgrade Event; or
(B) procure another person to become co-obligor in respect of the
obligations of Party A under this Agreement. Such co-obligor
may be either (x) a person with the Required Ratings domiciled
in the same legal jurisdiction as Party A or Party B, or (y) a
person in relation to whom Xxxxx'x has confirmed that there
would be no Subsequent Xxxxx'x Note Downgrade Event; or
(C) take such other action as Xxxxx'x shall confirm to Party A will
remedy a Subsequent Xxxxx'x Note Downgrade Event.
Pending compliance with (k)(iii)(A), (k)(iii)(B) or (k)(iii)(C),
Party A will at its own cost:
(D) put in place a xxxx-to-market collateral agreement in a form
and substance acceptable to Xxxxx'x (which may be based on the
credit support documentation published by ISDA, or otherwise,
and relates to collateral in the form of cash or securities or
both) in support of its obligations under this Agreement which
complies with the Xxxxx'x Criteria (or such other amount as may
be agreed with Xxxxx'x).
If any of (k)(iii)(A), (k)(iii)(B) or (k)(iii)(C) are satisfied at
any time, all collateral (or the equivalent thereof, as appropriate)
transferred by Party A pursuant to (k)(iii)(D) will be retransferred
to Party A and Party A will not be required to transfer any
additional collateral.
For the purposes of (k)(ii) and (k)(iii), "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" and its long-term, unsecured and unsubordinated debt
obligations are rated at least as high as "A1", or such other
ratings as may be agreed with Xxxxx'x from time to time.
"Xxxxx'x Criteria" means that the Collateral Amount shall equal the
sum of (a) the product of A multiplied by the xxxx-to-market value
of the outstanding Transactions as determined by Party A in good
faith on each Local Business Day
11
and (b) the product of B multiplied by the current aggregate
notional amounts of the outstanding Transactions, where:
(i) "A" means 102% and "B" means 1.6% if the long-term, unsecured
and unsubordinated debt obligations or the short-term,
unsecured and unsubordinated debt obligations of Party A (or
its successor) and any Credit Support Provider of Party A cease
to be rated as high as "A1" or "Prime-1" by Xxxxx'x;
(ii) "A" means 102% and "B" means 3.7% if the long-term, unsecured
and unsubordinated debt obligations or the short-term,
unsecured and unsubordinated debt obligations of Party A (or
its successor) and any Credit Support Provider of Party A cease
to be rated as high as "A3" or "Prime-2" by Xxxxx'x;
(iii) "A" means 0% and "B" means 0% in all other cases.
(iv) In the event that the short-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) or any Credit Support
Provider of Party A cease to be rated at least as high as "F1" (or
its equivalent) by Fitch Ratings Ltd ("Fitch") and as a result the
then current rating of the Series 2 Class C Notes may in the
reasonable opinion of Fitch be downgraded or placed on credit watch
for possible downgrade (an "Initial Fitch Note Downgrade Event"),
then Party A will, on a reasonable efforts basis, within 30 days of
the occurrence of such Initial Fitch Note Downgrade Event, at its
own cost, either:-
(A) put in place an appropriate xxxx-to-market collateral agreement
(which may be based on the credit support documentation
published by ISDA, or otherwise, and relates to collateral in
the form of cash or securities or both) in support of its
obligations under this Agreement which complies with the Fitch
Criteria (or such other amount as may be agreed with Fitch); or
(B) attempt to transfer all of its rights and obligations with
respect to this Agreement to a replacement third party whose
short-term, unsecured and unsubordinated debt ratings are rated
at least as high as "F1" (or its equivalent) by Fitch or such
other rating as is commensurate with the rating assigned to the
Series 2 Class C Notes by Fitch from time to time; or
(C) procure another person to become co-obligor or guarantor in
respect of the obligations of Party A under this Agreement
whose short-term, unsecured and unsubordinated debt ratings are
rated at least as high as "F1" (or its equivalent) by Fitch or
such other rating as is commensurate with the rating assigned
to the Series 2 Class C Notes by Fitch from time to time; or
12
(D) take such other action as Party A may agree with Fitch as will
result in the rating of the Series 2 Class C Notes then
outstanding being maintained.
(v) In the event that the short-term, unsecured and unsubordinated debt
obligations of Party A (or its successor) or any Credit Support
Provider of Party A cease to be rated at least as high as "F2" (or
its equivalent) by Fitch and as a result the then current rating of
the Series 2 Class C Notes may in the reasonable opinion of Fitch be
downgraded or placed on credit watch for possible downgrade (a
"Subsequent Fitch Note Downgrade Event"), then Party A will, on a
reasonable efforts basis, within 30 days of the occurrence of such
Subsequent Fitch Note Downgrade Event, at its own cost, either:-
(A) attempt to transfer all of its rights and obligations with
respect to this Agreement to a replacement third party whose
short-term, unsecured and unsubordinated debt ratings are rated
at least as high as "F1" (or its equivalent) by Fitch or such
other rating as is commensurate with the rating assigned to the
Series 2 Class C Notes by Fitch from time to time; or
(B) procure another person to become co-obligor or guarantor in
respect of the obligations of Party A under this Agreement
whose short-term, unsecured and unsubordinated debt ratings are
rated at least as high as "F1" (or its equivalent) by Fitch or
such other rating as is commensurate with the rating assigned
to the Series 2 Class C Notes by Fitch from time to time; or
(C) take such other action as Party A may agree with Fitch as will
result in the rating of the Series 2 Class C Notes then
outstanding being maintained.
Pending compliance with (k)(v)(A), (k)(v)(B) or (k)(v)(C), Party A
will at its own cost:
(D) put in place an appropriate xxxx-to-market collateral agreement
(which may be based on the credit support documentation
published by ISDA, or otherwise, and relates to collateral in
the form of cash or securities or both) in support of its
obligations under this Agreement which complies with the Fitch
Criteria (or such other amount as may be agreed with Fitch).
If any of (k)(v)(A), (k)(v)(B) or (k)(v)(C) are satisfied at any
time, all collateral (or the equivalent thereof, as appropriate)
transferred by Party A pursuant to (k)(v)(D) will be retransferred
to Party A and Party A will not be required to transfer any
additional collateral.
"Fitch Criteria" means the Collateral Amount shall equal the sum of
(i) the product of A multiplied by the xxxx-to-market value of the
outstanding Transactions determined by Party A in good faith from
time to time, and (ii) the product of B multiplied by the current
aggregate notional amount of the outstanding Transactions, where:
13
(a) "A" means 100% and "B" means 1.25% if the xxxx-to-market value
of the outstanding Transactions is determined by Party A on
each Local Business Day; or
(b) "A" means 100% and "B" means 2.5% where the xxxx-to-market
value of the outstanding Transactions is determined by Party A
on a weekly basis.
(vi) If Party A does not take any of the measures described in (k)(i)
above such failure shall not be or give rise to an Event of Default
but shall constitute an Additional Termination Event with respect to
Party A and shall be deemed to have occurred on the thirtieth day
following such S&P Note Downgrade Event with Party A as the sole
Affected Party and all Transactions shall be Affected Transactions.
If Party A does not take the measures described in (k)(ii)(A), (B),
(C) or (D) above such failure shall not be or give rise to an Event
of Default but shall constitute an Additional Termination Event with
respect to Party A and shall be deemed to have occurred on the
thirtieth day following such Initial Xxxxx'x Note Downgrade Event
with Party A as the sole Affected Party and all Transactions shall
be Affected Transactions.
If Party A does not take the measures described in (k)(iii)(D) above
such failure shall give rise to an Event of Default with respect to
Party A and shall be deemed to have occurred on the thirtieth day
following such Subsequent Xxxxx'x Note Downgrade Event (or, if Party
A has put in place a collateral agreement in accordance with the
requirements of k(ii)(D) above, such Event of Default shall be
deemed to have occurred on the tenth day following such Subsequent
Xxxxx'x Note Downgrade Event) with Party A as the sole Defaulting
Party. Further, it shall constitute an Additional Termination Event
with respect to Party A if, even after satisfying the requirements
of (k)(iii)(D), Party A has failed, having applied reasonable
efforts, to either transfer as described in (k)(iii)(A), find a
co-obligor as described in (k)(iii)(B) or take such other action as
described in (k)(iii)(C), and such Additional Termination Event
shall be deemed to have occurred on the thirtieth day following such
Subsequent Xxxxx'x Note Downgrade Event with Party A as the sole
Affected Party and all Transactions shall be Affected Transactions.
If Party A does not take any of the measures described in (k)(iv)
above such failure shall not be or give rise to an Event of Default
but shall constitute an Additional Termination Event with respect to
Party A and shall be deemed to have occurred on the thirtieth day
following such Initial Fitch Note Downgrade Event with Party A as
the sole Affected Party and all Transactions shall be Affected
Transactions.
If Party A does not take the measures described in (k)(v)(A), (B),
(C) or (D) above such failure shall not be or give rise to an Event
of Default but shall constitute an Additional Termination Event with
respect to Party A and shall be deemed to have occurred on the
thirtieth day following such Subsequent Fitch
14
Note Downgrade Event with Party A as the sole Affected Party and all
Transactions shall be Affected Transactions.
However, in the event that Party B were to designate an Early
Termination Date and there would be a payment due to Party A, Party
B may only designate such an Early Termination Date in respect on an
Additional Termination Event under this Part 5(k) if Party B has
found a replacement counterparty willing to enter a new transaction
on terms that reflect as closely as reasonably possible (as the Note
Trustee may, in its absolute discretion, determine) the economic,
legal and credit terms of the Terminated Transactions with Party A.
Each Additional Termination Event described in this sub-part (k)(vi)
shall, on its occurrence, constitute a "Downgrade Termination
Event".
(vii) Each of Party B and the Note Trustee shall use their reasonable
endeavours to co-operate with Party A in putting in place such
credit support documentation, including agreeing to such
arrangements in such documentation as may satisfy S&P, Xxxxx'x and
Fitch with respect to the operation and management of the collateral
(subject always to proviso (x) and (y) in (k)(i)(A) above) and
entering into such documents as may reasonably be requested by Party
A in connection with the provision of such collateral.
(l) Additional Representation
Section 3 is amended by the addition at the end thereof of the following
additional representations:-
(i) "(g) No Agency. It is entering into this Agreement and each
Transaction as principal and not as agent of any person."
(ii) The following additional representation shall be given by Party A
only:
"(h) Pari Passu. Its obligations under this Agreement rank pari
passu with all of its other unsecured, unsubordinated obligations
except those obligations preferred by operation of law."
(m) 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.
(n) Relationship between the parties
The Agreement is amended by the insertion after Section 14 of an
additional Section 15, reading in its entirety as follows:
15
"15. Relationship between the parties
Each party will be deemed to represent to the other party on the date on
which it enters into a Transaction that (absent a written agreement
between the parties that expressly imposes affirmative obligations to the
contrary for that Transaction):-
(i) Non Reliance. It is acting for its own account, and it has made its
own decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own
judgment and advice from such advisers as it has deemed necessary.
It is not relying on any communication (written or oral) of the
other party as investment advice or as a recommendation to enter
into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction
shall not be considered investment advice or a recommendation to
enter into that Transaction. It has not received from the other
party any assurance or guarantee as to the expected results of that
Transaction.
(ii) Assessment and Understanding. It is capable of assessing the merits
of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. It is also capable of
assuming, and assumes, the financial and other risks of that
Transaction.
(iii) Status of Parties. The other party is not acting as a fiduciary or
an adviser for it in respect of that Transaction."
(o) Tax
The Agreement is amended by deleting Section 2(d) in its entirety and
replacing it with the following:
"(d) Deduction or Withholding for Tax
(i) Requirement to Withhold
All payments under this Agreement will be made without any deduction
or withholding for or on account of any Tax unless such deduction or
withholding is required (including, for the avoidance of doubt, if
such deduction or withholding is required in order for the payer to
obtain relief from Tax) by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in
effect. If a party ("X") is so required to deduct or withhold, then
that party (the "Deducting Party"):-
(A) will promptly notify the other party ("Y") of such requirement;
(B) will pay to the relevant authorities the full amount required
to be deducted or withheld (including the full amount required
to be deducted or withheld from any Gross Up Amount (as defined
below) paid by the Deducting
16
Party to Y under this Section 2(d)) promptly upon the earlier
of determining that such deduction or withholding is required
or receiving notice that such amount has been assessed against
Y;
(C) will promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(D) if X is Party A, X will promptly pay in addition to the payment
to which Party B is otherwise entitled under this Agreement,
such additional amount (the "Gross Up Amount") as is necessary
to ensure that the net amount actually received by Party B will
equal the full amount which Party B would have received had no
such deduction or withholding been required.
(ii) Liability
If:
(A) X is required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, to make any deduction
or withholding for or on account of any Tax in respect of payments
under this Agreement; and
(B) X does not so deduct or withhold; and
(C) a liability resulting from such Tax is assessed directly against X,
then, except to the extent that Y has satisfied or then satisfies the
liability resulting from such Tax, (A) where X is Party B, Party A will
promptly pay to Party B the amount of such liability (the "Liability
Amount") (including any related liability for interest and together with
an amount equal to the Tax payable by Party B on receipt of such amount
but including any related liability for penalties only if Party A has
failed to comply with or perform any agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d)) and Party B will promptly pay to the relevant
government revenue authority the amount of such liability (including any
related liability for interest and penalties) and (B) where X is Party A
and Party A would have been required to pay a Gross Up Amount to Party B,
Party A will promptly pay to the relevant government revenue authority
the amount of such liability (including any related liability for
interest and penalties).
(iii) Tax Credit etc.
(a) Where Party A pays an amount in accordance with Section 2(d)(i)(D)
or 2(d)(ii)(C) above, Party B undertakes as follows:-
(1) To the extent that Party B obtains any Tax credit, allowance,
set-off or repayment from the tax authorities of any
jurisdiction
17
relating to any deduction or withholding giving rise to such
payment or in the case of Section 2(d)(ii)(B) the amount to be
assessed ("Tax Credit"), it shall pay to Party A on the next
Interest Payment Date after receipt of the same so much of the
cash benefit (as calculated below) relating thereto which it
has received as will leave Party B in substantially the same
(but in any event no worse) position as Party B would have been
in if no such deduction or withholding had been required or the
amount had not been so assessed;
(2) The "cash benefit" shall, in the case of credit, allowance or
set-off, be the additional amount of Tax which would have been
payable by Party B in the jurisdiction referred to in (1) above
but for the obtaining by it of the said Tax credit, allowance
or set-off and, in the case of a repayment, shall be the amount
of the repayment together, in either case, with any related
interest or similar payment obtained by Party B; and
(3) It will use all reasonable endeavours to obtain any Tax Credit
as soon as is reasonably practicable provided that it shall be
the sole judge of the amount of any such Tax Credit and of the
date on which the same is received and shall not be obliged to
disclose to Party A any information regarding its tax affairs
or tax computations save that Party B shall, upon request by
Party A, supply Party A with a reasonably detailed explanation
of its calculation of the amount of any such Tax Credit and of
the date on which the same is received.
The definition of "Indemnifiable Tax" in Section 14 shall be
deleted and the following shall be substituted therefor:
"Indemnifiable Tax" means any Tax."
(p) Change of Account
Section 2(b) of this Agreement is hereby amended by the addition of the
following at the end thereof:
"; provided that such new account shall be in the same legal and tax
jurisdiction as the original account and such new account, in the case of
Party B, is held with a financial institution with a short term
unsecured, unsubordinated and unguaranteed debt obligation rating of at
least P-1 (in the case of Xxxxx'x) and A-1 (in the case of S&P)."
(q) Condition Precedent
Section 2(a)(iii) shall be amended by the deletion of the words "a
Potential Event of Default" in respect of conditions precedent to the
obligations of Party A only.
18
(r) Representations
(i) Section 3(a)(v) shall be amended by the addition of the words "(with
the exception of Section 11 insofar as it relates to any Stamp Tax)"
after the words "this Agreement".
(ii) Section 3(b) shall be amended by the deletion of the words "or
Potential Event of Default" in respect of the representation given
by Party B only.
(s) Transfers
(i) Section 7 of this Agreement shall not apply to Party A, who shall be
required to comply with, and shall be bound by, the following:
Without prejudice to Section 6(b)(ii) as amended in the Schedule,
Party A may transfer all its interest and obligations in and under
this Agreement upon providing five Business Days prior written
notice to the Note Trustee, to any other entity (a "Transferee")
provided that:
(a) the Transferee's long-term, unsecured and unsubordinated debt
obligations are then rated not less than "A1" by Xxxxx'x and
its short-term, unsecured and unsubordinated debt obligations
are then rated not less than "A1+" by S&P and "F1" by Fitch (or
its equivalent by any substitute rating agency) or such
Transferee's obligations under this Agreement are guaranteed by
an entity whose long-term, unsecured and unsubordinated debt
obligations are then rated not less than "A1" by Xxxxx'x and
whose short-term, unsecured and unsubordinated debt obligations
are then rated not less than "A1+" by S&P and "F1"by Fitch (or
its equivalent by any substitute rating agency);
(b) as of the date of such transfer the Transferee will not, as a
result of such transfer, be required to withhold or deduct on
account of tax under this Agreement;
(c) a Termination Event or an Event of Default does not occur under
this Agreement as a result of such transfer;
(d) no additional amount will be payable by Party B to Party A or
the Transferee on the next succeeding Scheduled Payment Date as
a result of such transfer; and
(e) (if the Transferee is domiciled in a different country from
both Party A and Party B) S&P, Xxxxx'x and Fitch have provided
prior written notification that the then current ratings of the
Series 2 Class C Notes will not be adversely affected.
Following such transfer all references to Party A shall be
deemed to be references to the Transferee.
19
(ii) Save as otherwise provided for in this Agreement and notwithstanding
Section 7, Party A shall not be permitted to transfer (by way of
security or otherwise) this Agreement nor any interest or obligation
in or under this Agreement without the prior written consent of the
Note Trustee.
(t) Contracts (Rights of Third Parties) Xxx 0000
A person who is not a party to this Agreement shall have no right under
the Contracts (Rights of Third Parties) Xxx 0000 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.
(u) Calculations if an Early Termination Date occurs as a result of an Event
of Default or Additional Termination Event where Party A is the
Defaulting Party or the sole Affected Party.
Subject to compliance with Clause 15.3(l)(ii) (Euro Currency Swap
Agreements) of the Current Issuer Deed of Charge, 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 in the event that it
does not designate an Early Termination Date) to proceed in accordance
with Section 6 of the Agreement subject to the following:
(i) For the purposes of Clause 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
definitions of "Market Quotation":
(a) the word "firm" shall be added before the word "quotations" in
the second line; and
(b) the words "provided that the documentation relating thereto is
either the same as this Agreement and the existing
confirmations hereto (and the long-term unsecured and
unsubordinated debt obligations of the Reference Market-maker
are rated not less than "A1" by Xxxxx'x and its short-term,
unsecured and unsubordinated debt obligations are rated not
less than "A1+" by S&P and "F1" by Fitch (or, if such Reference
Market-maker is not rated by a Rating Agency, at such
equivalent rating (by another Rating Agency) that is acceptable
to such Rating Agency) or the Rating Agencies have confirmed in
writing such proposed documentation will not adversely impact
the ratings of the Series 2 Class C Notes" shall be added after
"agree" in the sixteenth line; and
(c) the last sentence shall be deleted and replaced with the
following:
20
"If, on the last date set for delivery of quotations, exactly
two quotations are provided, the Market Quotation will be
either (a) the lower of the two quotations where there would be
a sum payable by Party A to Party B, or (b) the higher of the
two quotations where there would be a sum payable by Party B to
Party A. If only one quotation is provided on such date, Party
B may, in its discretion, accept such quotation as the Market
Quotation and if Party B does not accept such quotation (or if
no quotation has been provided), it will be deemed that the
Market Quotation in respect of the Terminated Transaction
cannot be determined."
(iii) For the purpose of the definition of "Market Quotation", and
without limitation of the general rights of Party B under the
Agreement:
(A) Party B will undertake to use its reasonable efforts to obtain
at least three firm quotations as soon as reasonably
practicable after the Early Termination Date and in any event
within the time period specified pursuant to (iii)(C) below;
(B) Party A shall, for the purposes of Section 6(e), be permitted
to obtain quotations from Reference Market-makers; and
(C) If no quotations have been obtained within 6 Local Business
Days after the occurrence of the Early Termination Date or such
longer period as Party B may specify in writing to Party A,
then it will be deemed that the Market Quotation in respect of
the Terminated Transaction cannot be determined.
(iv) Party B will be deemed to have discharged its obligations under
(iii)(A) 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 quotations from
Reference Market-makers and Party A agrees to act in accordance with
such request.
(v) Party B will not be obliged to consult with Party A as to the day
and time of obtaining any quotations.
21
APPENDIX A
Series 2 Class C Notes
From: Citibank, N.A., London Branch
Citigroup Centre
00 Xxxxxx Xxxxxx
Xxxxxx X00 0XX
To: Granite Mortgages 04-1 plc
Xxxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxxx
XX0X 0XX
Attention: Securitisation Team, Risk Operations
To: The Bank of New York
00xx Xxxxx
Xxx Xxxxxx Xxxxxx
Xxxxxx
X00 0XX
Attention: Corporate Trust (Global Structured Finance)
28 January, 2004
Dear Sirs,
Re: Cross Currency Swap Transactions Relating to Granite Mortgages 04-1 plc
EUR 60,000,000 Series 2 Class C Notes due March 2044
The purpose of this letter is to confirm the terms and conditions of the swap
transactions entered into between us on the Trade Date specified below (the
"Swap Transactions"). This letter constitutes a "Confirmation" as referred to
in the 1992 ISDA Master Agreement (Multicurrency-Cross Border) entered into
between us and both of you on the date hereof as amended and supplemented from
time to time (the "Agreement").
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps & Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
shall prevail. Any terms not otherwise defined herein or in the Definitions
shall have the meanings given to them in the Master Definitions Schedule as
amended and restated by (and appearing in Appendix 1 to) the Master
Definitions Schedule Seventh Amendment Deed executed by, among others, the
Note Trustee on 26 January, 2004 and the Issuer Master Definitions Schedule
signed for the purposes of identification by Sidley Xxxxxx Xxxxx & Xxxx and
Xxxxx & Xxxxx on 28 January, 2004 (as the same have been and may be amended,
varied or supplemented from time to time with the consent of the parties
hereto). The Issuer Master Definitions Schedule specified above shall prevail
to the extent that it conflicts with the Master Definitions Schedule.
1
1 This Confirmation supplements, forms part of, and is subject to, the
Agreement. All provisions contained in, incorporated in, or incorporated
by reference to, the Agreement shall govern this Confirmation except as
expressly modified below.
2 The terms of the particular Swap Transactions to which this Confirmation
relates are as follows:
Party A: Citibank, N.A., London Branch
Party B: Granite Mortgages 04-1 plc
Trade Date: 21 January, 2004
Effective Date: 28 January, 2004
Termination Date: The earlier of (i) the Payment
Date falling in March 2044 and
(ii) the date on which the Series
2 Class C Notes are redeemed or
repaid in full.
Payment Date: Each Quarterly Payment Date.
EUR Amortisation Amount: In respect of a Payment Date,
the amount (in EUR) to be applied
in repayment of the principal
amount of the Series 2 Class C
Notes on such Payment Date as
notified to the Calculation Agent
by the Cash Manager.
Exchange Rate: GBP 1.00: EUR 1.45
A. Floating Payments
Floating Amounts for Party A:
Floating Rate Payer: Party A
Party A Currency Amount: As at any Party A Payment Date,
EUR60,000,000 minus the aggregate
of each Party A Interim Exchange
Amount made prior to such date.
Party A Payment Dates: Each Payment Date in respect of
the Series 2 Class C Notes.
Floating Rate Option: EUR-EURIBOR-Telerate
2
Designated Maturity: 3 months; except for the
initial Calculation Period which
shall be the linear interpolation
of 1 and 2 months.
Spread A for the Calculation Periods 1.07% per annum
up to and including the Calculation
Period ending on but excluding the
Payment Date in March 2009:
Spread A for the Calculation Periods 2.07 % per annum
from and including the Calculation
Period beginning on (and including)
the Payment Date in March 2009 up to
and including the Calculation Period
ending on but excluding the
Termination Date:
Party A Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each
Calculation Period.
Floating Amounts for Party B:
Floating Rate Payer: Party B
Party B Currency Amount: As at any Party B Payment Date,
GBP 41,379,310.34 minus the
aggregate of each Party B Interim
Exchange Amount made prior to such
date.
Party B Payment Dates: Each Payment Date in respect of
the Series 2 Class C Notes.
Floating Rate Option: GBP-LIBOR-BBA
Designated Maturity: 3 months except for the initial
Calculation Period which shall be
the linear interpolation of 1 and
2 months.
Spread B for the Calculation Periods 1.1455 % per annum
up to and including the Calculation
Period ending on but excluding the
Payment Date in March 2009:
Spread B for the Calculation Periods 2.2055 % per annum
from and including the Calculation
Period beginning on (and including)
the Payment Date in March 2009 up to
and including the Calculation Period
ending on but excluding the
Termination Date:
Party B Floating Rate Day Count Fraction: Actual/365 (Fixed)
3
Reset Dates: The first day of each
Calculation Period.
Calculation Agent: Party A
B. Initial Exchange:
Initial Exchange Date: Effective Date
Party A Initial Exchange Amount: GBP 41,379,310.34
Party B Initial Exchange Amount: EUR 60,000,000
C. Interim Exchange:
Interim Exchange Date: Each Payment Date on which the
EUR Amortisation Amount is to
be applied in repayment of the
principal amount of the Series
2 Class C Notes.
Party A Interim Exchange Amount: The EUR Amortisation Amount.
Party B Interim Exchange Amount: In respect of any Interim
Exchange Date, an amount in GBP
equal to the Party A Interim
Exchange Amount converted into GBP
at the Exchange Rate.
D. Final Exchange:
Final Exchange Date: Termination Date
Party A Final Exchange Amount: A EUR amount equal to the Party
B Final Exchange Amount converted
into EUR at the Exchange Rate.
Party B Final Exchange Amount: The Party B Currency Amount.
E. Account Details:
Payments to Party A:
4
Account for Payments in EUR: Citibank N.A.,
London Branch
Sort Code: 18-50-04
Account Number: 780839
Account Name: Citibank N.A.,
London Branch
SWIFT: CITIGB2L
Account for Payments in GBP: Citibank N.A.,
London Branch
Sort Code: 18-50-04
Account Number: 9380001172
Account Name: Citibank N.A.,
London Branch
SWIFT: CITIGB2L
Payments to Party B:
Account for Payments in EUR: Citibank, N.A., London
Agency and Trust
S.W.I.F.T. CITIGB2L
for further credit to
A/C Granite Mortgages 04-1 plc
A/C 00000000
Account for Payments in GBP: Citibank N.A., London
8378088
Agency and Trust
Sort Code 18-50-08
for further credit to
A/C Granite Mortgages 04-1 plc
A/C 10141631
F. Notice Details:
Party A: Citibank N.A., London Branch
Address: Citigroup Centre
00 Xxxxxx Xxxxxx
Xxxxxx X00 0XX
Facsimile Number: x00 000 000 0000
Attention: Head of Sales/Trading Legal Dept.
With a copy to: Citigroup Centre
00 Xxxxxx Xxxxxx
Xxxxxx X00 0XX
Facsimile Number: x00 000 000 0000
5
Attention: Xxxx Xxxxxx
Party B: Granite Mortgages 04-1 plc
Address: Xxxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxxx
XX0X 0XX
With a copy to: Northern Rock plc
Xxxxxxxx Xxxx Xxxxx
Xxxxxxxx
Xxxxxxxxx xxxx Xxxx
XX0 0XX
Facsimile Number: 00-000-000-0000
Attention: Xxxxx X. Xxxxxx
With a copy to the The Bank of New York
Note Trustee:
Address: Xxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx
X00 0XX
Facsimile Number: 020 7964 6061
G. Offices: The Office of Party A for each
of the Transactions evidenced
by this Confirmation is London.
H. Miscellaneous:
(a) Section 2(c)(ii) of the Agreement will not apply to the Transactions
evidenced by this Confirmation.
(b) If any payment of any amounts by Party A and Party B is deferred in
accordance with Part 5(h)(iii) of the Schedule to this Agreement then the
amount so deferred on the Party A Floating Amount shall, subject to the
terms of this Agreement, be payable on the next Party A Payment Date
(together with an additional floating amount accrued thereon at the
applicable Party A Floating Rate) and the Party A Floating Amount due on
such date shall be deemed to include such amounts.
The amount so deferred on the Party B Floating Amount shall, subject to
the terms of this Agreement, be payable on the next Party B Payment Date
(together with an additional floating amount accrued thereon accrued at
the applicable Party B Floating Rate) and the Party B Floating Amount due
on such date shall be deemed to include such amounts.
6
(c) In relation to Part 5(f) of the Schedule to this Agreement, in the case
of a redemption in full of the Series 2 Class C Notes pursuant to
Condition 5(F) of the terms and conditions of the Current Issuer Notes,
"Market Quotation" in respect of the Terminated Transactions shall be
determined based on the anticipated rate of reduction in the Party A
Currency Amount and the Party B Currency Amount had such redemption not
occurred.
(d) "Quarterly Payment Date" means the 20th day of March, June, September and
December in each year (or if such day is not a Business Day, the next
succeeding Business Day), beginning in March 2004.
(e) Time of trading is available from Party A on request.
7
Yours faithfully,
CITIBANK, N.A., LONDON BRANCH
By:
Name:
Title:
Confirmed as of the date first written:
GRANITE MORTGAGES 04-1 PLC
By:
Name:
Title:
THE BANK OF NEW YORK
as Note Trustee
By:
Name:
Title:
8
