EXHIBIT 10.6
SCHEDULE
TO THE MASTER AGREEMENT
DATED AS OF 19 June 2003
between
BARCLAYS BANK PLC
("PARTY A")
and
GRACECHURCH CARD FUNDING (NO. 4) PLC
("PARTY B")
1 TERMINATION PROVISIONS
1.1 "SPECIFIED ENTITY" for the purpose of Sections 5(a)(v), 5(a)(vi),
5(a)(vii) and 5(b)(iv) will not apply to Party A or Party B.
1.2 "SPECIFIED TRANSACTION" is not applicable to Party A or Party B for any
purpose and Section 5(a)(v) shall accordingly not apply.
1.3 The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply to
Party A and will not apply to Party B.
1.4 The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will not
apply to Party A and will not apply to Party B.
1.5 The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not
apply to Party A or to Party B.
1.6 PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
1.7 "TERMINATION CURRENCY" means the lawful currency for the time being of
the United Kingdom.
1.8 "BANKRUPTCY" sub-clause (2) of Section 5 (a)(vii) shall not apply to
Party B.
1.9 ADDITIONAL TERMINATION EVENTS
(A) ADDITIONAL TERMINATION EVENTS. The following shall constitute
Additional Termination Events:
(I) ENFORCEMENT NOTICE. An [Enforcement Notice] is served upon
Party B by the [Security Trustee] and, with respect to such
Additional Termination Event, Party B shall be the sole
Affected Party.
(II) EARLY REDEMPTION EVENT. The [Notes] have been redeemed or
repaid in accordance with the [Conditions], and with respect
to such Additional Termination Event, there shall be two
Affected Parties.
(III) RATING EVENT. A Rating Event as defined in Part 5.2 shall
have occurred. Party A shall be the sole Affected Party in
respect thereof.
1
2 TAX REPRESENTATIONS
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will make the following
representation:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or
on account of any Tax from any payment (other than interest under
Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it
to the other party under this Agreement. In making this
representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of
this Agreement, (ii) the satisfaction of the agreement contained in
Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant
to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the
satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement, provided that it shall not be a
breach of this representation where reliance is placed on clause
(ii) and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
(b) PAYEE TAX REPRESENTATIONS For the purposes of Section 3(f) of this
Agreement, Party A will make the representation in (i) and Party B
will make the representation in (ii):
(i) Party A is entering into the Transactions through a branch in the
United Kingdom within the charge to United Kingdom corporation tax
and holds the Transactions solely for the purpose of a trade carried
on by Party A through that branch otherwise than as agent or nominee
for another person.
(ii) Party B is incorporated and organised in the UK and is not operating
out of a U.S. branch for the purposes of this Agreement.
3 AGREEMENT TO DELIVER DOCUMENTS
(a) Tax forms, documents or certificates to be delivered are:
PARTY FORM/DOCUMENT/CERTIFICATE DATE BY
REQUIRED WHICH TO BE
TO DELIVERED
DELIVER
DOCUMENT
Party A Any document required or reasonably requested to allow Party A or Party B to make payments under this Promptly
and Party Agreement without any deduction or withholding for or on account of any tax or with such deduction or upon the
B withholding at a reduced rate reasonable
demand by
the other
party
(b) Other documents to be delivered are:
PARTY FORM/DOCUMENT/CERTIFICATE DATE BY WHICH COVERED
REQUIRED TO BE BY
TO DELIVERED SECTION
DELIVER 3(D)
DOCUMENTS
Party A Evidence satisfactory to the other party as to the authority of its signatories to this Upon execution Yes
and Party Agreement and to each Confirmation including specimen signatures of such signatories of this
B Agreement and
the relevant
Confirmation,
as applicable
2
Party A Evidence satisfactory to the other party as to its capacity and ability to enter into this Upon execution Yes
and Party Agreement and any Transaction hereunder of this
B Agreement
Party B A legal opinion in a form satisfactory to Party A Upon execution No
of this
Agreement
4 MISCELLANEOUS
4.1 ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:
Addresses for notices or communications to Party A:
For notices regarding operation, payment and confirmation matters only,
notices should be sent to the address of the relevant branch set out in
the relevant Confirmation (as may be amended from time to time), with a
copy in the case of notices or communications relating to Sections 5, 6,
7, 11 or 13 to:
ADDRESS: 5 Xxx Xxxxx Xxxxxxxxx, Xxxxxx Xxxxx, Xxxxxx X00 0XX
ATTENTION: Derivatives Director, Legal Division (marked urgent)
FACSIMILE NO:(x00) 000 000 0000 TELEPHONE NO:(x00) 000 000 0000
Addresses for notices or communications to Party B:
[ ]
ADDRESS:
ATTENTION:
FACSIMILE NO:
4.2 PROCESS AGENT. For the purpose of Section 14(c) of this Agreement:
Party A appoints as its Process Agent:None
Party B appoints as its Process Agent:[ ]
4.3 OFFICES. The provisions of Section 10(a) will apply to this Agreement.
4.4 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.
4.5 CALCULATION AGENT. The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
4.6 CREDIT SUPPORT DOCUMENT. Not applicable .
4.7 CREDIT SUPPORT PROVIDER. Not applicable.
4.8 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with English law.
3
4.9 NETTING OF PAYMENTS. Section 2(c)(ii) of this Agreement will not apply to
Transactions entered into under this Agreement.
4.10 "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
5 OTHER PROVISIONS
5.1 OBLIGATIONS. In Section 2(a)(iii) the words "or Potential Event of
Default" shall be deleted.
5.2 RATING EVENT
(i) (x)If, at any time, (i) the long-term, unsecured and unsubordinated
debt obligations of Party A (or its successor) cease to be rated at
least as high as A1 (or its equivalent) by Moody's or (ii) the
short-term, unsecured and unsubordinated debt obligations of Party
A (or its successor) cease to be rated at least as high as Prime-1
(or its equivalent) by Moody's (and, at such time, the long-term,
unsecured and unsubordinated debt obligations of any co-obligor to
Party A are not rated as high as A1 (or its equivalent) by Moody's
or the short-term, unsecured and unsubordinated debt obligations of
such co-obligor are not rated as high as Prime-1 (or its
equivalent) by Moody's (such ratings together the "MOODY'S REQUIRED
RATINGS I")), then Party A will, 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 Moody's
Required Ratings I domiciled in the same legal jurisdiction as
Party A or the Issuer or (y) a replacement third party agreed by
Moody's; 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 Moody's Required Ratings I domiciled
in the same legal jurisdiction as Party A or the Issuer, or (y) a
person agreed by Moody's; or
(c) take such other action as Party A may agree with Moody's; or
(d) at its own cost, within thirty (30) days of the occurrence of such
downgrade, lodge collateral in an amount determined in accordance
with the Moody's Criteria in support of its obligations under this
Agreement (or other lesser amount which might be agreed with
Moody's).
If any of (i)(x)(a), (i)(x)(b) or (i)(x)(c) are satisfied at any time,
all collateral (or the equivalent thereof, as appropriate) transferred
by Party A pursuant to (i)(x)(d) above will be retransferred to Party A
and Party A will not be required to transfer any additional collateral.
(i) (y)If, at any time, (i) the long-term, unsecured and unsubordinated
debt obligations of Party A (or its successor) cease to be rated
at least as high as A3 (or its equivalent) by Moody's or (ii) the
short-term, unsecured and unsubordinated debt obligations of Party
A (or its successor) cease to be rated at least as high as Prime-2
(or its equivalent) by Moody's (such ratings together the "MOODY'S
REQUIRED RATINGS II") (and, at such time, the long-term, unsecured
and unsubordinated debt obligations or the short-term, unsecured
and unsubordinated debt obligations of any co-obligor to Party A
are not rated as high as the Moody's Required Ratings I, then
Party A will, on a best efforts basis and at its own cost attempt
to:
4
(a) transfer all of its rights and obligations with respect to
this Agreement to either (x) a replacement third party with
the Moody's Required Ratings I domiciled in the same legal
jurisdiction as Party A or the Issuer or (y) a replacement
third party agreed by Moody's; 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 Moody's Required
Ratings I domiciled in the same legal jurisdiction as Party
A or the Issuer, or (y) a person agreed by Moody's; or
(c) take such other action as Party A may agree with Moody's.
Pending compliance with (i)(y)(a), (i)(y)(b) or (i)(y)(c) above,
Party A will, at its own cost:
(d) lodge collateral in an amount determined in accordance with
the Moody's Criteria in support of its obligations under
this Agreement (or other lesser amount which might be agreed
with Moody's).
If any of (i)(y)(a), (i)(y)(b) or (i)(y)(c) are satisfied at any
time, all collateral (or the equivalent thereof, as appropriate)
transferred by Party A pursuant to (i)(y)(d) above will be
retransferred to Party A and Party A will not be required to
transfer any additional collateral.
(ii) If, at any time, (i) the short-term unsecured, unsubordinated and
unguaranteed debt obligations of Party A are assigned a rating of
less than A-1+ by S&P (the " S&P REQUIRED RATING") or (ii) any
such rating is withdrawn by S&P, then the Party A will, at its own
cost, within thirty (30) days of such reduction or withdrawal of
any such rating, use its best endeavours (at the option of Party
A) to:
(a) transfer and assign its rights and obligations under this
Agreement and the Transaction dated the same date hereof
between Party A and Party B to either (x) a third party
having the S&P Required Rating or (y) a replacement third
party agreed by S&P; or
(b) enter into an agreement with a third party, having either
(x) the S&P Required Rating or (y) a party agreed with S&P,
which party will guarantee the obligations of Party A under
this Agreement; or
(c) at its own cost, within thirty (30) days of the occurrence
of such downgrade, lodge collateral in an amount determined
in accordance with the S&P Criteria in support of its
obligations under this Agreement (or other lesser amount
which might be agreed with S&P); or
(d) find any other solution acceptable to S&P to maintain the
then current rating of the Notes.
(iii) If Party A does not take the measures described in either (i) or
(ii) above, such failure shall not be or give rise to an Event of Default
but shall constitute an Additional Termination Event (a "RATING EVENT")
with respect to Party A and shall be deemed to have occurred on the
thirtieth day following such downgrade (as appropriate) with Party A as
the sole Affected Party and all Transactions shall be Affected
Transactions, provided that the foregoing shall not apply in respect of
any failure by Party A to comply with its obligations under the Credit
Support Annex. Further, it shall constitute an Additional
5
Termination Event with respect to Party A if Party A fails to satisfy one
of (a), (b) or (c) under paragraph 5.2(i)(y) above, (assuming for this
purpose only that the words, "on a best efforts basis and", and, "attempt
to", are deleted from that paragraph), and such Additional Termination
Event shall be deemed to have occurred on the thirtieth day following such
downgrade (as appropriate) with Party A as the sole Affected Party and all
Transactions shall be Affected Transactions.
5.3 DISAPPLICATION OF CERTAIN EVENTS OF DEFAULT AND TERMINATION EVENTS. The
provisions of Sections 5(a)(ii), 5(a)(iii) and 5(a)(iv) shall not apply
with respect to Party B.
5.4 AMENDMENT TO EVENTS OF DEFAULT AND TERMINATION EVENTS. At the end of
Section 5(a)(i) the addition of the following:
"(for the purposes of this Section failure to pay shall be deemed to
include circumstances where payment is made by a party but is
subsequently required to be repaid pursuant to any applicable laws or
regulations)".
5.5 INDEMNIFIABLE TAX. For the purposes of Section 2(d)(i)(4) no tax shall be
an Indemnifiable Tax.
5.6 GROSS-UP PROVISION
5.6.1 Notwithstanding Section 2(d)(i)(4) of the Agreement, in the event
that either Party is required to deduct or withhold for or on
account of any Tax, such Party will not in any circumstances be
required to pay any additional amounts to the other Party in
respect of such deduction or witholding, and accordingly Section
2(d)(i)(4) and Section 2(d)(ii) shall not apply to either Party.
5.6.2 If Party A or Party B is required to deduct or withhold for or on
account of any Tax, it shall pay the full amount required to be
deducted or withheld to the relevant taxation or other authority
within the time allowed for such payment under applicable law and
shall deliver to the other, within 30 days after it has made such
payment an original receipt (or certified copy) issued by such
authority or if such receipt or copy is not available, other
appropriate documents reasonably acceptable to the recipient
evidencing payment of such authority of all amounts so required to
be deducted or withheld in respect of such payment.
5.7 TRANSFERS. Section 7 of this Agreement is replaced in its entirety with
the following:
"(a) GENERAL
Save as provided in Part (1)(i)(i) of the Schedule to this
Agreement and this paragraph, neither party may transfer its
interest hereunder or under any Transaction to another party.
(b) TRANSFERS BY PARTY A
(i) Transfers by Party A if a Tax Event occurs and Party A is the
Affected Party.
(a) Section 6(b)(ii) shall not apply and Party A and Party
B will seek to find an alternative counterparty to
replace Party A so that such Tax Event ceases; or
(b) Party A may, with the prior consent of Party B, S&P,
Moody's and the Trustee, within 20 days after it gives
notice under Section 6(b)(i) (or, if earlier, on the
relevant Scheduled Payment Date next following the date
upon which the Tax Event occurs) transfer all its
rights and obligations under this Agreement in respect
of the Affected Transactions to any of its offices or
branches or any other person so that such Tax Event
ceases to exist;
6
(c) In the event that Party A is unable to Transfer the
Affected Transactions in accordance with Section
7(b)(i), a Termination Event will occur with both
parties being Affected Parties.
(ii) Transfers by Party A for any other reason
Party A may with the prior written consent of Party B, S&P,
Moody's and the Trustee, make a transfer of this Agreement to
any Affiliate of Party A (but without prejudice to any other
right or remedy under this Agreement);
With respect to this Section 7(b), Party B, S&P, Moody's and the
Trustee shall not be entitled to withhold their consent to a
proposed transfer if:
(1) any transferee of Party A enters into documentation identical
or, subject to the Trustee's consent, substantially identical
to this Agreement and the documents executed in connection
with this Agreement; and
(2) either (a) the short-term unsecured debt obligation of the
transferee of Party A , as rated by S&P and Xxxxx'x is, at
least "A-1", "P-1" or "F-1" respectively or (b) if the
transfer is due to a Tax Event and if such long term
unguaranteed unsecured and unsubordinated debt obligation of
the transferee of Party A is below that referred to in (a)
above, concurrently with the transfer, one of the options set
out in Part 1(i)(i)(a), (b) or (d) of this Schedule will be
fulfilled.
(a) TRANSFERS BY PARTY B
Neither this Agreement nor any interest in or under this Agreement
or any Transaction may be transferred by Party B to any other entity
save with Party A's prior written consent EXCEPT THAT such consent
is not required in the case of a transfer, charge or assignment to
the Trustee as contemplated in the [Deed of Charge]. For the
avoidance of doubt, Party A hereby agrees and consents to the
assignment by way of security by Party B of its interests under this
Agreement to the Trustee (or any successor thereto) pursuant to and
in accordance with the [Deed of Charge] and acknowledges notice of
such assignment. Party A and Party B acknowledge that the provisions
of this Agreement and any Transaction hereunder will be subject to
(a) the priority of payments set out in [Condition 2] of the Notes
as set out in the [Offering Circular] dated on or about [ ]
2003 and the [Deed of Charge] dated of even date of this Agreement
without regard to any subsequent amendments thereto.
Any transfer by Party B shall be subject to the consent of the
Trustee, S&P and Moody's."
5.8 REDUCTION OF PAYMENT OBLIGATIONS. In the event that any payment made by
Party B to Party A under a Transaction is less than the amount which
Party B would be required to pay Party A but for Part 5.9.2 below the
payment obligation of Party A to Party B shall be rateably reduced to the
extent of the reduction in the amount paid by Party B to Party A. For the
avoidance of doubt the payment of a reduced amount by Party A under this
Agreement shall not constitute a breach of the payment obligations
specified in Section 2(a)(i).
5.9 NO LIABILITY AND NO PETITION. Party A shall not be entitled to have
recourse for the payment or recovery of any monies owing to it by Party B
under this Agreement to any asset of Party B except to the extent
provided in the [Deed of Charge]. Accordingly:
5.9.1 Party A agrees that it shall not:
(i) take any corporate action or other steps or legal proceedings
for the winding-up, dissolution or re-organisation or for the
appointment of a receiver, administrator, administrative
receiver, trustee, liquidator, sequestrator or similar
officer of Party B or of any or all Party B's revenues and
assets; or
7
(ii) have any right to take any steps for the purpose of obtaining
payment of any amounts payable to it under this Agreement by
Party B and shall not take any steps to recover any debts
whatsoever owing to it by Party B,
except as permitted by the [Deed of Charge]; and
5.9.2 Party B's obligation to make payment hereunder shall be limited to
the extent it has funds available to make such payment as
determined in accordance with the provisions of the [Deed of
Charge]. To the extent that, as a result of having insufficient
funds available, Party B makes only a partial payment of any amount
due to Party A, then the related shortfall shall reduce Party A's
payment obligations but otherwise shall not discharge Party A from
its obligation hereunder. Provided that, for the avoidance of
doubt, if Party B fails to pay any amount which would, but for the
provisions of this Part 5.9.2, have been due, such an event will
constitute an Event of Default pursuant to Section 5(a)(i) (Failure
to Pay or Deliver).
5.10 SUCCESSORS. References in this Agreement to the parties hereto, Party A
and Party B shall (for the avoidance of doubt) include, where
appropriate, any permitted successor or assign thereof.
5.11 DEFINITIONS. This Agreement, the Confirmations and each Transaction
hereunder are subject to the 2000 ISDA Definitions (as published by the
International Swap and Derivatives Association, Inc.) (the "DEFINITIONS")
and will be governed in all respects by the provisions set forth in the
Definitions, without regard to any amendments subsequent to the date
hereof. The provisions of the Definitions are incorporated by reference
in and shall be deemed to be part of this Agreement and each Confirmation
as if set forth in full in this Agreement and in each such Confirmation.
In the event of any inconsistency between the provisions of this
Agreement and the Definitions, this Agreement will prevail. Words and
expressions used in this Schedule which are not defined herein or in the
Definitions shall have the same meanings as are given to them in the
Confirmation. Terms defined or referred to in the [Master Definitions
Schedule] dated on or about [ ] 2003 and executed by, inter alia,
Party A and Party B shall, where the context permits, bear the same
respective meanings herein.
5.12 BENEFIT OF AGREEMENT. Any legal entity into which Party A is merged or
converted or any legal entity resulting from any merger or conversion to
which Party A is a party shall, to the extent permitted by applicable
law, be a party to this Agreement in place of Party A without any further
act or formality.
5.13 RELATIONSHIP BETWEEN 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):
5.13.1 NON-RELIANCE. It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to
whether that Transaction is appropriate or proper for it based upon
its own judgment and upon advice from such advisers as it has
deemed necessary. It is not relying on any communication (written
or oral) of the other party as investment advice or as a
recommendation to enter into 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. No
communication (written or oral) received from the other party shall
be deemed to be an assurance or guarantee as to the expected
results of that Transaction.
5.13.2 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 risks of that Transaction.
5.13.3 STATUS OF PARTIES. The other party is not acting as fiduciary for
or an adviser to it in respect of that Transaction.
8
IN WITNESS whereof, the parties have executed this Schedule by their duly
authorised officers as of the date hereof.
BARCLAYS BANK PLC GRACECHURCH CARD FUNDING (NO. 4) PLC
By:............................................................By:.................................................................
Name: Name:
Title: Title:
Date: Date:
9
