EXHIBIT 4.3


 


	
   

  	
   

  	
  2004-B

  
	
  (Multicurrency—Cross
  Border)

  	
   

  	
  CLASS
  A SWAP

  



 


ISDAÒ


 


International Swap Dealers Association, Inc.


 


MASTER
AGREEMENT


 


dated as of September 22, 2004


 


	
  JPMorgan Chase Bank

  (“Party A”)

  	
   

  	
  and

  	
   

  	
  World Financial Network Credit Card

  Master Note Trust

  (“Party B”)

  



 


have entered
and/or anticipate entering into one or more transactions (each a “Transaction”)
that are or will be governed by this Master Agreement, which includes the
schedule (the “Schedule”), and the documents and other confirming evidence
(each a “Confirmation”) exchanged between the parties confirming those
Transactions.


 


Accordingly, the
parties agree as follows:—


 


1.                                      Interpretation


 


(a)                                  Definitions. The terms defined in
Section 14 and in the Schedule will have the meanings therein
specified for the purpose of this Master Agreement.


 


(b)                                 Inconsistency. In the event of any
inconsistency between the provisions of the Schedule and the other
provisions of this Master Agreement, the Schedule will prevail.  In the event of any inconsistency between
the provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purpose of the relevant
Transaction.


 


(c)                                  Single Agreement. All Transactions are
entered into in reliance on the fact that this Master Agreement and all
Confirmations form a single agreement between the parties (collectively
referred to as this “Agreement”), and the parties would not otherwise enter
into any Transactions.


 


2.                                      Obligations


 


(a)                                  General Conditions.


 


(i)  Each party will
make each payment or delivery specified in each Confirmation to be made by it,
subject to the other provisions of this Agreement.


 


(ii)  Payments under
this Agreement will be made on the due date for value on that date in the place
of the account specified in the relevant Confirmation or otherwise pursuant to
this Agreement, in freely transferable funds and in the manner customary for
payments in the required currency. Where settlement is by delivery (that is,
other than by payment), such delivery will be made for receipt on the due date
in the manner customary for the relevant obligation unless otherwise specified
in the relevant Confirmation or elsewhere in this Agreement.


 


(iii)  Each
obligation of each party under Section 2(a)(i) is subject to (1) the
condition precedent that no Event of Default or Potential Event of Default with
respect to the other party has occurred and is continuing, (2) the condition
precedent that no Early Termination Date in respect of the relevant Transaction
has occurred or been effectively designated and (3) each other applicable
condition precedent specified in this Agreement.


 

















 


(b)                                 Change of Account.  Either party may change its account for
receiving a payment or delivery by giving notice to the other party at least
five Local Business Days prior to the scheduled date for the payment or
delivery to which such change applies unless such other party gives timely
notice of a reasonable objection to such change.


 


(c)                                  Netting. 
If on any date amounts would otherwise be payable:—


 


(i)                                     in
the same currency; and


 


(ii)                                  in
respect of the same Transaction,


 


by each party to
the other, then, on such date, each party’s obligation to make payment of any
such amount will be automatically satisfied and discharged and, if the aggregate
amount that would otherwise have been payable by one party exceeds the
aggregate amount that would otherwise have been payable by the other party,
replaced by an obligation upon the party by whom the larger aggregate amount
would have been payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.


 


The parties may
elect in respect of two or more Transactions that a net amount will be
determined in respect of all amounts payable on the same date in the same
currency in respect of such Transactions, regardless of whether such amounts
are payable in respect of the same Transaction.  The election may be made in the Schedule or a Confirmation
by specifying that subparagraph (ii) above will not apply to the Transactions
identified as being subject to the election, together with the starting date
(in which case subparagraph (ii) above will not, or will cease to, apply to
such Transactions from such date).  This
election may be made separately for different groups of Transactions and will
apply separately to each pairing of Offices through which the parties make and
receive payments or deliveries.


 


(d)                                 Deduction or Withholding for Tax.


 


(i)                                     Gross-Up.  All payments under this Agreement will be
made without any deduction or withholding for or on account of any Tax unless
such deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect.  If a party is so required to
deduct or withhold, then that party (“X”) will:—


 


(1)  promptly
notify the other party (“Y”) of such requirement;


 


(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,
organised, managed and controlled, or considered to have its seat, or in which
a branch or office through


 


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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)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after it gives
notice under Section 6(b)(i) all its rights and obligations under this
Agreement in respect of the Affected Transactions to another of its Offices or
Affiliates so that such Termination Event ceases to exist.


 


If the Affected Party is not able to make
such a transfer it will give notice to the other party to that effect within
such 20 day period, whereupon the other party may effect such 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 Act 1982 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
reestablishing any hedge or related trading position (or any gain resulting
from any of them).  Loss includes losses
and costs (or gains) in respect of any payment or delivery required to have
been made (assuming satisfaction of each applicable condition precedent) on or
before the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies.  Loss does not include a party’s legal fees
and out-of-pocket expenses referred to under Section 11.  A party will determine its Loss as of the
relevant Early Termination Date, or, if that is not reasonably practicable, as
of the earliest date thereafter as is reasonably practicable.  A party may (but need not) determine its
Loss by reference to quotations of relevant rates or prices from one or more
leading dealers in the relevant markets.


 


“Market
Quotation” means, with respect to one or more
Terminated Transactions and a party making the determination, an amount
determined on the basis of quotations from Reference Market-makers.  Each quotation will be for an amount, if
any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the “Replacement Transaction”) that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or contingent
and assuming the satisfaction of each applicable condition precedent) by the
parties under Section 2(a)(i) in respect of such Terminated Transaction or
group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have


 


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.


 


 


	
  JPMorgan
  Chase Bank (“JPMorgan”)

  (Name of Party)

  	
   

  	
  World
  Financial Network Credit Card Master

  Note Trust (“Counterparty”)

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Chase Manhattan Bank USA, National

  Association, not in its individual capacity, but

  solely as Owner Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Name
  of Party)

  
				



 


 


	
  By:

  	
  /s/ Emilio Jimenez

  	
   

  	
  By:

  	
  /s/ John J. Cashin

  	
   

  
	
   

  	
  Name:

  	
  Emilio Jimenez

  	
   

  	
  Name: John J. Cashin

  
	
   

  	
  Title:

  	
  Managing
  Director and Associate

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
  General
  Counsel

  	
   

  	
  Date:  September 22, 2004

  
	
   

  	
  Date:

  	
  September 22,
  2004

  	
   

  	
   

  
							



 


CLASS A SWAP


 


18






















 


SCHEDULE

to the

Master Agreement


 


dated as of September 22, 2004


 


between


 


	
  JPMorgan Chase Bank



  	
   

  	
  and

  	
   

  	
  World Financial
  Network

  Credit Card

  Master Note Trust

  
	
  (“JPMorgan”)

  	
   

  	
   

  	
   

  	
  (the “Counterparty”)

  



 


The only Transaction that will be governed by the terms of this
Agreement will be the Class A Swap (as defined in the Indenture).  References in the Agreement to
“Transactions” or “Transaction” shall be deemed to be references to the Class A
Swap.


 


Part 1


 


Termination Provisions


 


In this Agreement:-


 


(1)                                  “Specified Entity”
shall not apply.


 


(2)                                  The “Breach of
Agreement” provisions of Section 5(a)(ii) will apply to JPMorgan and will
not apply to the Counterparty.


 


(3)                                  The “Credit Support
Default” provisions of Section 5(a)(iii) will apply to JPMorgan and will
not apply to the Counterparty.


 


(4)                                  The
“Misrepresentation” provisions of Section 5(a)(iv) will apply to JPMorgan
and will not apply to the Counterparty.


 


(5)                                  The “Default Under
Specified Transaction” provisions of Section 5(a)(v) will not apply to
JPMorgan and will not apply to the Counterparty.


 


(6)                                  The “Cross Default”
provisions of Section 5(a)(vi) will not apply to JPMorgan and will not
apply to the Counterparty.


 


(7)                                  The “Merger Without Assumption” provisions of
Section 5(a)(viii) will apply to JPMorgan and will not apply to the
Counterparty.


 


(8)                                  The “Tax Event” provisions of
Section 5(b)(ii) will apply to JPMorgan and will not apply to the
Counterparty.


 

















 


(9)                                  The “Tax Event Upon Merger” provisions of
Section 5(b)(iii) will apply to JPMorgan and will not apply to the
Counterparty.


 


(10)                            The “Credit Event Upon Merger” provisions of
Section 5(b)(iv) will not apply to JPMorgan and will not apply to the
Counterparty.


 


(11)                            The “Additional Termination Event” provisions of
Section 5(b)(v) will apply as set forth in Part 1(15) hereof.


 


(12)                            The
“Automatic Early Termination” provisions of Section 6(a) will not apply to
JPMorgan and will not apply to the Counterparty.


 


(13)                            “Termination Currency”
means United States Dollars.


 


(14)                            For purposes of computing
amounts payable on early termination:


 


(a)                                  Market Quotation will
apply to this Agreement; and


 


(b)                                 The Second Method will
apply to this Agreement.


 


(15)                            The occurrence of the
following event shall constitute an “Additional Termination Event” for purposes
of Section 5(b)(v):


 


(a) the occurrence of an Additional Termination Event as forth in Part
5 (10) hereof.  If this Additional
Termination Event occurs, JPMorgan shall be the sole Affected Party and all
Transactions then outstanding between the parties shall be Affected
Transactions.


 


Upon the occurrence of an Additional Termination Event, JPMorgan shall
notify the Rating Agencies of such occurrence.


 


Part 2


 


Tax Representations


 


(1)                                  Payer Tax
Representation:


 


For the purpose of Section 3(e) of this Agreement, JPMorgan and
Counterparty 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) of this Agreement by reason of material prejudice
to its legal or commercial position.


 


(2)                                  Payee Tax
Representations:


 


For the purpose of Section 3(f), JPMorgan and the Counterparty
each represent respectively that it is a United States Person for U.S. federal
income tax purposes and either (a) is a financial institution or (b) is not
acting as an agent for a person that is not a United States Person for U.S.
federal income tax purposes.


 


Part 3


 


Agreement
to Deliver Documents


 


For the purpose of Sections 4(a)(i) and (ii), each party agrees to
deliver the following documents, as applicable:


 


(1)                                  For the purpose of
Sections 4(a)(i) and (ii) of this Agreement, Counterparty agrees to deliver a
complete and accurate United States Internal Revenue Service Form W-9 (or any
applicable successor form), in a manner reasonably satisfactory to JPMorgan,
(I) upon execution of this Agreement; (II) promptly upon reasonable demand of
JPMorgan, and (III) promptly upon learning that any such form previously filed
by Counterparty has become obsolete or incorrect.


 


(2)                                  JPMorgan will, on
demand, deliver a certificate (or, if available, the current authorized
signature book of JPMorgan) specifying the names, title and specimen signatures
of the persons authorized to execute this Agreement and each Confirmation on
its behalf.


 


(3)                                  The Counterparty
will, on demand, deliver a certificate (or, if available, the current authorized
signature book of the Counterparty) specifying the names, title and specimen
signatures of the persons authorized to execute this Agreement and each
Confirmation on its behalf.


 


(4)                                  The Counterparty
will, upon execution of this Agreement, deliver a conformed copy of the
Indenture and the Indenture Supplement.


 


(5)                                  Each party will, upon
execution of this Agreement, deliver a legal opinion of counsel in form and
substance satisfactory to the other party regarding this Agreement and any
other matters as such other party may reasonably request.


 


(6)                                  The Counterparty
shall supply (and/or shall instruct the Trustee to supply) JPMorgan with copies
of the monthly servicing reports delivered to the Series 2004-B Noteholders in
the form specified in the Indenture. 
Copies of such accountings and/or reports shall be delivered to JPMorgan
at the following address:


 

















 


JPMorgan Chase Bank


c/o John Coffey


270 Park Avenue


New York, NY 10017


e-mail address: 
john.j.coffey@jpmorgan.com


 


Each of the foregoing documents (other than the legal opinions
described in (5) above) is covered by the representation contained in
Section 3(d) of this Agreement.


 


Part 4


 


Miscellaneous


 


(1)                                  Governing Law.  This Agreement will be governed by and construed in accordance
with the laws of the State of New York without reference to choice of law
doctrine.


 


(2)                                  Notices.


 


(a)                                  In connection with
Section 12(a), all notices to JPMorgan shall, with respect to any
particular Transaction, be sent to the address, telex number or facsimile
number specified in the relevant Confirmation and any notice for purposes of
Sections 5 or 6 of the Agreement shall be sent to the address or telex number
specified below:


 


JPMorgan Chase Bank


Attention: 
Legal Dept. - Derivatives Practice Group


270 Park Avenue, 41st Floor


New York, NY 10017


Facsimile No.:  212-270-3620


 


(b)                                 In connection with
Section 12(a), all notices to the Counterparty shall, with respect to any
particular Transaction, be sent to the address, telex number or facsimile
number specified in the relevant Confirmation and any notice for purposes of
Sections 5 or 6 of the Agreement shall be sent to the address or telex number
specified below:


 


World Financial Network Credit Card Master Note Trust


c/o JP Morgan Chase Bank


4 New York Plaza

15th Floor

New York, NY  10004


Attention: Institutional Trust Services


Telephone No.:


Facsimile No.:


 


With a copy to:


 


World Financial Network National Bank


800 Techcenter Drive


Gahanna, OH 43230


Attention:  Treasurer


 

















 


Telephone No.:  614-729-4723


Facsimile No.:  614-729-4899


 


(3)                                  Netting of Payments.  Section 2(c)(ii) of this Agreement will
apply, with the effect that payment netting will not take place with respect to
amounts due and owing in respect of more than one Transaction.


 


(4)                                  Offices; Multibranch Party.  For purposes of Section 10:


 


(a)                                  Section 10(a)
will apply; and


 


(b)                                 For
the purpose of Section 10(c):


 


(i) JPMorgan is a Multibranch Party and may act through its London and
New York Offices.


 


(ii) The Counterparty is not a Multibranch Party.


 


(5)                                  Credit Support Documents.


 


With respect to JPMorgan, if applicable, any Third Party Credit Support
Document delivered by JPMorgan shall constitute a Credit Support Document.


 


With respect to JPMorgan and
the Counterparty, if applicable, any Approved Credit Support Document shall
constitute a Credit Support Document.


 


(6)                                  Credit Support Provider.


 


With respect to JPMorgan, the party guaranteeing JPMorgan’s obligations
pursuant to a Third Party Credit Support Document, if any, shall be a Credit
Support Provider.


 


(7)                                  Process Agents.  The Counterparty appoints as its Process
Agent for the purpose of Section 13(c):


Not applicable


 


Part 5


 


Other Provisions


 


(1)                                  ISDA Definitions.  Reference is hereby made to the 2000 ISDA Definitions (the “ISDA
Definitions”) each as published by the International Swaps and
Derivatives Association, Inc., which are hereby incorporated by reference
herein.  Any terms used and not
otherwise defined herein which are contained in the ISDA Definitions shall have
the meaning set forth therein.


 


(2)                                  Confirmation Procedures.  Each party acknowledges and agrees that the
Confirmation executed as of the date hereof and designated as Reference No.
500085004880 shall be the only transaction governed by this Agreement (it being
understood that, in the event such Confirmation shall be amended (in any
respect), such amendment shall not constitute (for purposes of this paragraph)
a separate Transaction or a separate Confirmation).  Party A and Party B shall not enter into any additional
Confirmations or Transactions hereunder.


 

















 


(3)                                  Inconsistency.  In the event of any inconsistency between any of the following
documents, the relevant document first listed below shall govern:  (i) a Confirmation; (ii) the Schedule; (iii)
the ISDA Definitions; and (iv) the printed form of ISDA Master Agreement.


 


(4)                                  Calculation Agent.  The Calculation Agent will be JPMorgan.


 


(5)                                  Waiver of Jury Trial.  Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in
respect of any suit, action or proceeding relating to this Agreement or any
Credit Support Document.  Each party (i)
certifies that no representative, agent or attorney of the other party or any
Credit Support Provider has represented, expressly or otherwise, that such other
party would not, in the event of such a suit, action or proceeding, seek to
enforce the foregoing waiver and (ii) acknowledges that it and the other party
have been induced to enter into this Agreement and provide for any Credit
Support Document, as applicable, by, among other things, the mutual waivers and
certifications in this Section.


 


(6)                                  Severability.  In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal, or unenforceable (in whole or in
part) in any respect, the remaining terms, provisions, covenants and conditions
hereof shall continue in full force and effect as if this Agreement had been
executed with the invalid or unenforceable portion eliminated, so long as this
Agreement as so modified continues to express, without material change the
original intentions of the parties as to the subject matter of this Agreement
and the deletion of such portion of this Agreement will not substantially
impair the respective benefits or expectations of the parties to this
Agreement; provided, however, that this severability provision shall not be
applicable if any provision of Section 2, 5, 6 or 13 (or any definition or
provision in Section 14 to the extent it relates to, or is used in or in
connection with any such Section) shall be so held to be invalid or
unenforceable.


 


(7)                                  No Gross-up for Counterparty.  Section 2(d) of the Agreement shall not
apply with respect to the Counterparty so that the Counterparty shall not be
obligated to gross up pursuant thereto.


 


(8)                                  JPMorgan Acknowledgment.  Notwithstanding anything to the contrary in
this Agreement, JPMorgan hereby


 


(a) acknowledges and agrees that the Counterparty has pledged its
rights under this Agreement to the Trustee pursuant to the Indenture and that
in the event of an Event of Default (as defined in the Indenture) the Trustee
shall be entitled to exercise all rights and remedies of a secured party with
respect to this Agreement; and


 


(b) agrees that, unless notified in writing by the Trustee of other
payment instructions, any and all amounts payable by JPMorgan to the
Counterparty shall be paid to the Trustee.


 


(9)                                  No Petition; Limited Recourse.  JPMorgan hereby agrees that it
shall not institute against, or join any other Person in instituting against
the Counterparty any bankruptcy, reorganization, arrangement, insolvency,
moratorium or liquidation proceedings or other proceedings under U.S. federal
or state or other bankruptcy or similar laws.


 

















 


Notwithstanding
the foregoing, nothing herein shall prevent JPMorgan from participating in any
such proceeding once commenced.


 


JPMorgan
hereby acknowledges and agrees that the Counterparty’s obligations hereunder
will be solely the limited recourse obligations of the Counterparty, and that
JPMorgan will not have any recourse to any of the directors, officers,
employees, shareholders or affiliates of the Counterparty with respect to any
claims, losses, damages, liabilities, indemnities or other obligations in
connection with any transactions contemplated hereby.  Notwithstanding any other provisions hereof, recourse in respect
of any obligations of the Counterparty to JPMorgan hereunder or thereunder will
be limited to the Collateral, subject to and in accordance with the terms of
the priority of payments set forth in Section 4.4 of the Indenture
Supplement, and on the exhaustion thereof all claims against the Counterparty
arising from this Agreement or any other transactions contemplated hereby or
thereby shall be extinguished.


 


(10)                            Ratings
Downgrade Provisions.   Unless
written notification to the contrary has been received from the Rating
Agencies, following the occurrence of a Ratings Event I and/or a Ratings Event
II, the parties shall comply with the following provisions, as applicable.


 


I.                                         If
a Ratings Event I shall occur and be continuing with respect to JPMorgan, then
JPMorgan shall, within 5 Local Business Days of the occurrence of such Ratings
Event I, give notice of the occurrence of such Ratings Event I to Counterparty.  Following such notice, JPMorgan may either


 


(A) at its sole option and expense, provide, or cause to be provided, a
Third Party Credit Support Document to Counterparty; or


 


(B) at its sole option and expense, use reasonable efforts to transfer
JPMorgan’s rights and obligations under the Agreement and all Confirmations to
another party.


 


Each of I(A) and I(B) above shall be subject to satisfaction of the
Rating Agency Condition.


 


If, on or prior to the date that is 30 calendar days after the
occurrence of a Ratings Event I, JPMorgan has provided a Third Party Credit
Support Document as provided in I(A) above and the Rating Agency Condition has
been satisfied, then, for so long as such Third Party Credit Support Document
is in effect and the Rating Agency Condition continues to be satisfied,
JPMorgan shall have no further obligations in respect of this Part 5(10)(I).


 


If,


 


(i) on or prior to the date that is 30 calendar days after the
occurrence of a Ratings Event I, JPMorgan has not provided a Third Party Credit
Support Document as provided in I(A) above or transferred its rights and
obligations as provided in I(B) above, or


 


(ii) JPMorgan has provided a Third Party Credit Support Document as
provided in I(A) above but such Third Party Credit Support Document has ceased
to be in effect and/or the Rating Agency Condition is no longer satisfied,


 


then, on the first Local Business Day following the date that is 30
calendar days after the occurrence of the Ratings Event I (in respect of (i)
above) or on the first Local Business


 

















 


Day following the date on which the Third Party Credit Support Document
referred to in (ii) above has ceased to be in effect and/or fails to satisfy
the Rating Agency Condition, Counterparty may demand that JPMorgan deliver
Eligible Collateral to Counterparty in accordance with the terms of an Approved
Credit Support Document. 
Notwithstanding the foregoing, JPMorgan’s obligations under this Part
5(10)(I) to post Eligible Collateral under the Approved Credit Support Document
shall remain in effect only for so long as a Ratings Event I is continuing with
respect to JPMorgan.


 


The failure by JPMorgan to comply with the provisions hereof shall
constitute an Additional Termination Event, with JPMorgan as the sole Affected
Party and all Transactions then outstanding between the parties as Affected
Transactions.


 


II.                                     If
a Ratings Event II shall occur and be continuing with respect to JPMorgan, then
JPMorgan shall, within 5 Local Business Days of the occurrence of such Ratings
Event II, give notice of the occurrence of such Ratings Event II to
Counterparty.  Following such notice,
JPMorgan shall either


 


(A) to the extent that is has not already done so in accordance with
Part 5(10)(I), at its sole option and expense, provide, or cause to be
provided, a Third Party Credit Support Document to Counterparty; or


 


(B) at its sole option and expense, use reasonable efforts to transfer
JPMorgan’s rights and obligations under the Agreement and all Confirmations to
another party.


 


Each of II(A) and II(B) above shall be subject to satisfaction of the
Rating Agency Condition.


 


If, on or prior to the date that is 30 calendar days after the
occurrence of a Ratings Event II, JPMorgan has provided a Third Party Credit
Support Document as provided in II(A) or I(A) above and the Rating Agency Condition
has been satisfied, then, for so long as such Third Party Credit Support
Document is in effect and the Rating Agency Condition continues to be
satisfied, then, (i) JPMorgan shall have no further obligations in respect of
this Part 5(10)(II) and, (ii) if JPMorgan was delivering Eligible Collateral to
Counterparty in accordance with the terms of an Approved Credit Support
Document pursuant to the provisions of Part 5(10)(I) hereof, JPMorgan shall
have no further obligations to deliver Eligible Collateral under the Approved
Credit Support Document.


 


If,


 


(i) on or prior to the date that is 30 calendar days after the
occurrence of a Ratings Event II, JPMorgan has not provided a Third Party
Credit Support Document as provided in II(A) above or transferred its rights
and obligations as provided in II(B) above, or


 


(ii) JPMorgan has provided a Third Party Credit Support Document as
provided in II(A) or I(A) above but such Third Party Credit Support Document
has ceased to be in effect and/or the Rating Agency Condition is no longer
satisfied,


 


then, on the first Local Business Day following the date that is 30
calendar days after the occurrence of the Ratings Event II (in respect of (i)
above) or on the first Local Business Day following the date on which the Third
Party Credit Support Document referred to in (ii) above has ceased to be in
effect and/or fails to satisfy the Rating Agency Condition, and only to the
extent that JPMorgan is not already delivering Eligible Collateral to


 

















 


Counterparty in accordance with the terms of an Approved Credit Support
Document pursuant to the provisions of Part 5(10)(I) hereof, JPMorgan will
deliver Eligible Collateral to Counterparty in accordance with the terms of an
Approved Credit Support Document. 
Concurrently with such delivery of Eligible Collateral, JPMorgan shall
cause its outside counsel to deliver to Counterparty an opinion as to the
enforceability of Counterparty’s security interest in such Eligible Collateral
in all relevant jurisdictions, if necessary to satisfy the Rating Agency
Condition.  Notwithstanding JPMorgan’s
posting of Eligible Collateral in accordance with the terms of the Approved
Credit Support Document, JPMorgan shall use best efforts to either transfer its
rights and obligations to an acceptable third party or to provide a Third Party
Credit Support Document. 
Notwithstanding the foregoing, JPMorgan’s obligations under this Part
5(10)(II) to find a transferee or provide a Third Party Credit Support Document
and to post Eligible Collateral under the Approved Credit Support Document
shall remain in effect only for so long as a Ratings Event II is continuing
with respect to JPMorgan.


 


The failure by JPMorgan to comply with the provisions hereof shall
constitute an Additional Termination Event, with JPMorgan as the sole Affected
Party and all Transactions then outstanding between the parties as Affected
Transactions.


 


As used herein:


 


“Approved Credit Support
Document” means a security agreement in the form of the 1994 ISDA Credit
Support Annex (ISDA Agreements Subject to New York Law Only), as modified by
the Paragraph 13 thereto, which Paragraph 13 will be in the form of Annex A to
this Agreement;


 


“Indenture” means the Master Indenture dated as of August 1, 2001,
between World Financial Network Credit Card Master Note Trust, as Issuer, and
BNY Midwest Trust Company, as Indenture Trustee, as supplemented by the Series
2004-B Indenture Supplement dated as of September 22, 2004, between World
Financial Network Credit Card Master Note Trust, as the Issuer, and BNY Midwest
Trust Company, as the Indenture Trustee (the “Indenture Supplement”), in each
case, as amended, modified, supplemented, restated or replaced from time to
time.


 


“Moody’s” means Moody’s Investors Service, Inc. or any successor
thereto;


 


“Rating Agencies” means S&P and Moody’s;


 


“Rating Agency Condition” has the meaning specified in the Indenture;


 


“Ratings Event I” shall occur with respect to JPMorgan (to the extent
that JPMorgan’s relevant obligations are rated by Moody’s) if JPMorgan’s long-term
senior unsecured debt rating by Moody’s is lower than A1 or is A1 on negative
watch or JPMorgan’s short-term senior unsecured debt rating by Moody’s is lower
than P-1 or is P-1 on negative watch;


 


“Ratings Event II” shall occur with respect to JPMorgan (to the extent
that JPMorgan’s relevant obligations are rated by S&P and/or Moody’s) if
(a) JPMorgan’s short-term senior unsecured debt rating by S&P is lower than
A-1 or (b) JPMorgan’s long-term senior unsecured debt rating by Moody’s is A3
or lower or JPMorgan’s short-term senior unsecured debt rating by Moody’s is
P-2 or lower;


 


“S&P” means by Standard & Poor’s Ratings Service or any
successor thereto; and


 

















 


“Third Party Credit Support Document” means any agreement or instrument
(including any guarantee, insurance policy, security agreement or pledge
agreement) whose terms provide for the guarantee of JPMorgan’s obligations
under this Agreement by a third party.


 


(11)                            Additional Representations.  Section 3 is hereby amended by adding
at the end thereof the following paragraphs:


 


“(g)  It is an “eligible
contract participant” under, and as defined in, Section 1a(12) of the
Commodity Exchange Act, as amended.


 


(h) 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 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.


 


(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 risks of that
Transaction.


 


(iii)                               Status of
Parties.  The other party is
not acting as a fiduciary for or an adviser to it in respect of that
Transaction.”


 


(12)                            Amendment to Section 7 of the Agreement.  Section 7 of the Agreement is hereby
amended by:


 


(i)
adding the words “and the confirmation of the Rating Agencies” immediately
following the word “party” in the third line thereof; and


 


(ii) adding the following sentence immediately following the final
sentence thereof:


 


“In addition, no transfer shall be effective unless it satisfies the
Rating Agency Condition.”.


 


(13)                            Events of Default.  Section 5(a)(i) of the Agreement is amended by substituting
the following therefor:  “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 fifth Local Business Day after notice of such failure
is given to the party.”


 

















 


(14)                            Owner Trustee.  It is expressly understood and agreed by the parties hereto that
(a) this Agreement is executed and delivered by Chase Manhattan Bank USA,
National Association, not individually or personally but solely as trustee of
the Counterparty in the exercise of the powers and authority conferred and
vested in it under the Amended and Restated Trust Agreement (as defined in the
Indenture), (b) each of the representations, undertakings and agreements herein
made on the part of the Counterparty are made and intended not as personal
representations, undertakings and agreements by Chase Manhattan Bank USA,
National Association, but are made and intended for the purpose of binding only
the Counterparty, and (c) under no circumstances shall Chase Manhattan Bank
USA, National Association be personally liable for the payment of any indebtedness
or expenses of the Counterparty or be liable for the breach or failure of any
obligation, representations, warranty or covenant made or undertaken by the
Counterparty under this Agreement.


 


(15)                            Amendment to Section 9(b) of the Agreement.  Section 9(b) of the Agreement is
amended by adding the following sentence immediately following the end of the
first sentence thereof:


 


“In
addition, no amendment modification or waiver in respect of this Agreement will
be effective unless it satisfied the Rating Agency Condition.”


 


(16)                            Amendment to Section 6(e) of the Agreement.  Section 6(e) of the Agreement is
amended by deleting the last sentence of the introductory paragraph thereof.


 


(17)                            The parties agree that
there will be no Set-off with respect to this Agreement.


 

















 


Please confirm your agreement to the terms of the foregoing
Schedule by signing below.


 


	
   

  	
  JPMORGAN
  CHASE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Emilio Jimenez

  	
   

  
	
   

  	
   

  	
  Name:  Emilio Jimenez

  
	
   

  	
   

  	
  Title:   
  Managing Director and Associate

  General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  WORLD
  FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST

  
	
   

  	
  By:  Chase Manhattan Bank USA, National

  Association, not in its individual capacity, but

  solely as Owner Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John J. Cashin

  	
   

  
	
   

  	
   

  	
  Name:  John J. Cashin

  
	
   

  	
   

  	
  Title:  Vice President

  



 


2004-B


CLASS A SWAP


 

















 


ANNEX A


 


PARAGRAPH 13 TO

CREDIT SUPPORT ANNEX


 


to the Schedule to the

Master Agreement


 


dated as of September 22, 2004


 


between


 


	
  JPMorgan Chase Bank

  (“JPMorgan”)

  	
   

  	
  and

  	
   

  	
  WORLD FINANCIAL NETWORK

  CREDIT CARD MASTER NOTE TRUST

  (“Counterparty”)

  



 


Paragraph 13. Elections and Variables


 


(a)                                  Security
Interest for “Obligations”.  The term
“Obligations” as used in this Annex includes no additional obligations with
respect to either party.


 


(b)                                 Credit
Support Obligations.


 


(i)                                     Delivery Amount,
Return Amount and Credit Support Amount.


 


(A)                              “Delivery
Amount” has the meaning specified in Paragraph 3(a), except that the words “upon a demand made by the Secured Party”
shall be deleted and the word “that” on the second line of Paragraph 3(a) shall
be replaced with the word “a”.


 


(B)                                “Return
Amount” has the meaning specified in Paragraph 3(b).


 


(C)                                “Credit Support Amount” shall not have the
meaning specified in Paragraph 3(b) and, instead, will have the following
meaning:


 


“Credit Support Amount” means, for any Valuation
Date, (i) the Secured Party’s Modified Exposure for that Valuation Date minus
(ii) the Pledgor’s Threshold; provided, however, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.


 


(ii)                                  Eligible
Collateral.  The following items will
qualify as “Eligible Collateral”:


 

















 


	
   

  	
   

  	
   

  	
   

  	
  JPMorgan

  	
   

  	
  “Valuation

  Percentage”

  	
   

  
	
  (A)

  	
   

  	
  USD Cash

  	
   

  	
  X

  	
   

  	
  100

  	
  %

  
	
  (B)

  	
   

  	
  Negotiable debt obligations issued by the U.S. Treasury Department
  having a remaining maturity of one year or less from the Valuation Date

  	
   

  	
  X

  	
   

  	
  98.6

  	
  %

  
	
  (C)

  	
   

  	
  Negotiable debt obligations issued by the U.S. Treasury Department
  having a remaining maturity of more than one year but less than ten years
  from the Valuation Date

  	
   

  	
  X

  	
   

  	
  90.7

  	
  %

  
	
  (D)

  	
   

  	
  Negotiable debt obligations issued by the U.S. Treasury Department
  having a remaining maturity of ten years or more from the Valuation Date

  	
   

  	
  X

  	
   

  	
  85.3

  	
  %

  
	
  (E)

  	
   

  	
  Agency Securities having a remaining maturity of one year or less
  from the Valuation Date

  	
   

  	
  X

  	
   

  	
  98.1

  	
  %

  
	
  (F)

  	
   

  	
  Agency Securities having a remaining maturity of more than one year
  but less than ten years from the Valuation Date

  	
   

  	
  X

  	
   

  	
  88

  	
  %

  
	
  (G)

  	
   

  	
  Agency Securities having a remaining maturity of ten years or more
  from the Valuation Date

  	
   

  	
  X

  	
   

  	
  79.8

  	
  %

  
	
  (H)

  	
   

  	
  USD denominated Commercial Paper rated A1/P1 by S&P and Moody’s
  respectively, that (a )settles within DTC, (b) is not issued by JPMorgan or
  any of its Affiliates and (c) has a remaining maturity of 30 days or less
  from the Valuation Date

  	
   

  	
  X

  	
   

  	
  98

  	
  %

  



 


For purposes of the foregoing:


 


(a) “Agency Securities” means negotiable debt obligations which are
fully guaranteed as to both principal and interest by the Federal National
Mortgage Association, the Government National Mortgage Association or the
Federal Home Loan Mortgage Corporation, but excluding (i) interest only and
principal only securities and (ii) Collateralized Mortgage Obligations, Real
Estate Mortgage Investment Conduits and similar derivative securities.


 


(b) “DTC” shall mean The Depository Trust & Clearing Corporation,
or its successor.


 


(c) “Moody’s” shall mean Moody’s Investors Service, Inc., or its
successor.


 


(d) “S&P” shall mean Standard & Poor’s Ratings Group, or its
successor.


 


(e) Eligible Collateral of the type described
in Paragraph 13(b)(ii)(H) may never constitute more than 20% of the total Value
of Posted Collateral.


 


(f) With respect to Posted Collateral consisting of Eligible Collateral
of the type described in Paragraph 13(b)(ii)(H), the aggregate Value of such
Posted


 

















 


Collateral issued by the same issuer may never be greater than 33% of
the aggregate Value of all Posted Collateral consisting of Eligible Collateral
of the type described in Paragraph 13(b)(ii)(H).


 


(iii)                               Other Eligible
Support.  There shall be no “Other
Eligible Support” for purposes of this Annex, unless (A) agreed in writing
between the parties and (B) upon the prior written consent of Moody’s and
S&P.


 


(iv)                              Thresholds.


 


(A)                              “Independent
Amount” means zero.


 


(B)                                “Threshold” shall not
apply with respect to the Counterparty and, with respect to JPMorgan, shall
mean the amounts determined on the basis of the lower of the Credit Ratings set
forth in the following table, provided, however, that if (i)
JPMorgan has no Credit Rating, or (ii) an Event of Default has occurred and is continuing
with respect to JPMorgan, JPMorgan’s Threshold shall be U.S.$0:


 


	
  CREDIT
  RATING

  (S&P /Moody’s)

  	
   

  	
  THRESHOLD

  JPMorgan

  
	
  S&P: A-1
  or above; and

  	
   

  	
  Infinity

  
	
   

  	
   

  	
   

  
	
  Moody’s
  (long-term senior unsecured debt of JPMorgan): A1 or above; and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Moody’s
  (short-term senior unsecured debt of JPMorgan): P-1 or above.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  S&P: Below A-1; or

  	
   

  	
  US$0

  
	
   

  	
   

  	
   

  
	
  Moody’s (long-term senior unsecured debt of JPMorgan): Below A1 or A1
  on negative watch; or

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Moody’s (short-term senior unsecured debt of JPMorgan): Below P-1 or
  P-1 on negative watch.

  	
   

  	
   

  



 


As used herein:


 


“Credit Rating” means, with respect to (a) S&P, the rating assigned
by S&P to the short-term senior unsecured debt of JPMorgan, and (b)
Moody’s, the rating assigned by Moody’s to the long-term senior unsecured debt
of JPMorgan or to the short-term senior unsecured debt of JPMorgan, as
applicable.


 


(C)                                “Minimum Transfer
Amount”, with respect to a party on any Valuation Date, means U.S. $100,000.


 

















 


Rounding.  The Delivery Amount
and the Return Amount will be rounded up and down to the nearest integral
multiple of $10,000, respectively.


 


(c)                                  Valuation
and Timing.


 


(i)                                     “Valuation Agent”
means JPMorgan, unless an Event of Default with respect to JPMorgan is
continuing, in which case “Valuation Agent” shall mean the Counterparty or a
financial institution selected by the Counterparty in its reasonable
discretion.


 


(ii)                                  “Valuation
Date” means weekly on the last Local Business Day of each week or more
frequently if agreed in writing by the parties.


 


(iii)                               “Valuation Time” means
the close of business in the city of the Valuation Agent on the Valuation Date
or date of calculation, as applicable.


 


(iv)                              “Notification Time” means
12:00 p.m., New York time, on a Local Business Day.


 


(d)                                 Conditions
Precedent.  With respect to
JPMorgan, any Additional Termination Event (if JPMorgan is the Affected Party
with respect to such Termination Event) will be a “Specified Condition”.


 


(e)                                  Substitution.


 


(i)                                     “Substitution
Date” has the meaning specified in Paragraph 4(d)(ii).


 


(ii)                                  Consent.  Inapplicable.


 


(f)                                    Dispute
Resolution.


 


(i)                                     “Resolution Time”
means 1:00 p.m., New York time, on the Local Business Day following the date on
which the notice is given that gives rise to a dispute under Paragraph 5.


 


(ii)                                  Value.   For the purposes of Paragraphs 5(i)(C) and
5(ii), the Value of Posted Credit Support other than Cash will be calculated as
follows:


 


(A) with respect to any Eligible Collateral except Cash, the sum of (I)
(x) the mean of the high bid and low asked prices quoted on such date by any
principal market maker for such Eligible Collateral chosen by the Disputing
Party, or (y) if no quotations are available from a principal market maker for
such date, the mean of such high bid and low asked prices as of the first day
prior to such date on which such quotations were available, plus (II) the
accrued interest on such Eligible Collateral (except to the extent Transferred
to a party pursuant to any applicable provision of this Agreement or included
in the applicable price referred to in (I) of this clause (A)) as of such date;
multiplied by the applicable Valuation Percentage.


 


(iii)                               Alternative.  The provisions of Paragraph 5 will apply.


 


(g)                                 Holding
and Using Posted Collateral.


 

















 


(i)                                     Eligibility to
Hold Posted Collateral; Custodians. 
Counterparty and its Custodian will be entitled to hold Posted
Collateral pursuant to Paragraph 6(b); provided that the following conditions
applicable to it are satisfied:


 


(1)                                  Counterparty
is not a Defaulting Party and


 


(2)                                  Posted
Collateral may be held only in the following jurisdictions:


New York State.


 


Initially, the Custodian for Counterparty is: Chase Manhattan Bank USA,
National Association.


 


(ii)                                  Use of Posted
Collateral.  The provisions of Paragraph
6(c)(i) will not apply to Counterparty but the provisions of Paragraph 6(c)(ii)
will apply to the Counterparty; provided, however, that the Counterparty shall
invest, or cause to be invested, Posted Collateral in the form of Cash in such
Eligible Investments (as defined in the Indenture) as designated by
JPMorgan.  The Counterparty is
authorized to liquidate any Posted Credit Support pursuant to written
instructions from JPMorgan.


 


(h)                                 Distributions
and Interest Amount.


 


(i)                                     Interest
Rate.  Not Applicable


 


(ii)                                  Transfer of Interest
Amount.  The Transfer of the Interest
Amount will be made monthly on the second Local Business Day of each calendar
month.


 


(iii)                               Alternative to Interest
Amount.  The provisions of Paragraph
6(d)(ii) will not apply and, instead, the Interest Amount payable by the
Counterparty specified in subparagraph (h)(ii) will be the amount of actual
cash earnings on Posted Collateral in the form of Cash during the relevant
Interest Period.


 


(i)                                     Additional
Representation(s).  Not Applicable.


 


(j)                                     Other Eligible
Support and Other Posted Support.


 


(i)                                     “Value” with
respect to Other Eligible Support and Other Posted Support means: Not
Applicable.


 


(ii)                                  “Transfer” with
respect to Other Eligible Support and Other Posted Support means: Not
Applicable


 


(k)                                  Demands
and Notices.


 


All demands, specifications and notices under this Annex will be made
pursuant to the Notices Section of this Agreement, unless otherwise
specified here:


 

















 


Counterparty:


 


JPMorgan:


JPMorgan Chase Bank


Collateral Middle Office Americas 3/OPS2


500 Stanton Christiana Rd.


Newark, DE  19713


Telephone No.:  302-634-3191


Fax No.:  302-634-3260


 


(l)                                     Addresses
for Transfers.


 


Counterparty: as set forth in notices to JPMorgan from time to time


 


JPMorgan:


JPMorgan Chase Bank


Collateral Middle Office Americas 3/OPS2


500 Stanton Christiana Rd.


Newark, DE  19713


Telephone No.:  302-634-3191


Fax No.:  302-634-3260


 


(m)                               Other
Provisions:


 


(i)                                     Modification to
Paragraph 1: The following subparagraph (b) is substituted for subparagraph
(b) of this Annex:


 


(b) Secured
Party and Pledgor.  All references
in this Annex to the “Secured Party” will be to Counterparty and all
corresponding references to the “Pledgor” will be to JPMorgan.


 


(ii)                                  Modification to
Paragraph 2:  The following
Paragraph 2 is substituted for Paragraph 2 of this Annex:


 


Paragraph 2.  Security Interest.  The Pledgor hereby pledges to the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in and lien on against all Posted
Collateral Transferred to or received by the Secured Party hereunder.  Upon the Transfer by the Secured Party to
the Pledgor of Posted Collateral, the security interest and lien granted
hereunder on that Posted Collateral will be released immediately and, to the
extent possible, without any further action by either party.


 


(iii)                               Modification to
Paragraph 8(a):  Paragraph 8(a) is
modified by deleting the text of clause (iii) thereof and replacing such text
with the word “Reserved”.


 


(iv)                              Modification to
Paragraph 8(b)(iv):  Paragraph
8(b)(iv) is modified and restated in its entirety to read as follows:


 


“(iv) to the extent that Posted Collateral or the Interest Amount is
not so Transferred pursuant to (iii) above, the Pledgor may withhold payment of
any remaining amounts payable by the Pledgor with respect to any Obligations,
up to the Value of


 

















 


any remaining Posted Collateral held by the Secured Party, until that
Posted Collateral is Transferred to the Pledgor.”


 


(v)                                 Modification to
Paragraph 8(c):  Paragraph 8(c) is
modified and restated in its entirety to read as follows:


 


“(c)                            Deficiencies and Excess Proceeds.  The Secured Party will Transfer to the
Pledgor any proceeds and Posted Credit Support remaining after liquidation
and/or application under Paragraphs 8(a) and 8(b) after satisfaction in full of
all amounts payable by the Pledgor with respect to any Obligations; the Pledgor
in all events will remain liable for any amounts remaining unpaid after any
liquidation and/or application under Paragraphs 8(a) and 8(b).”


 


(vi)                              Modification to
Paragraph 9:  The following first
clause of Paragraph 9 is substituted for the first clause of Paragraph 9 of
this Annex:


 


Paragraph 9.   Representations.  The Pledgor represents to the Secured Party
(which representations will be deemed to be repeated as of each date on which
it Transfers Eligible Collateral) that:


 


(vii)                           Modifications to
Paragraph 12:  The following
definitions of “Pledgor” and “Secured Party” are substituted for the
definitions of those terms contained in Paragraph 12 of this Annex:


 


“Pledgor” means JPMorgan, when that party (i) is required to Transfer
Eligible Credit Support under Paragraph 3(a) or (ii) has Transferred Eligible
Credit Support under Paragraph 3(a).


 


“Secured Party” means Counterparty, when that party (i) is entitled to
receive Eligible Credit Support under Paragraph 3(a) or (ii) holds or is deemed
to hold Posted Credit Support.


 


(viii)                        Addition to Paragraph 12:  The following definitions of “Modified
Exposure” shall be added immediately after the definition of the term “Minimum
Transfer Amount” and immediately prior to the definition of the term
“Notification Time” in Paragraph 12 of this Annex:


 


“Modified Exposure” means, for any Valuation
Date, an amount equal to the greater of (i) the sum of the Secured Party’s
Exposure for that Valuation Date and the Volatility Buffer, and (ii) the amount
of the next scheduled payment that is required to be made by JPMorgan pursuant
to the Transaction.  As used herein:


 


“Volatility Buffer” means, with respect to
the Transaction, an amount equal to the product of (a) the Factor applicable to
the Transaction and (b) the Notional Amount of the Transaction.


 


“Factor” means, with respect to the
Transaction, a percentage dependent on JPMorgan’s Counterparty Rating and the
original maturity of the Transaction and determined by the Valuation Agent by
reference to the following table:


 


	
  Counterparty Rating

  	
   

  	
  Maturities up to 5

  years (%)

  	
   

  	
  Maturities up to 10

  years (%)

  	
   

  	
  Maturities up to 30

  years (%)

  
	
  A-2/P-2

  	
   

  	
  3.25

  	
   

  	
  4.00

  	
   

  	
  4.75

  
	
  A-3/P-3

  	
   

  	
  4.00

  	
   

  	
  5.00

  	
   

  	
  6.25

  
	
  BB+/Ba1 or lower

  	
   

  	
  4.50

  	
   

  	
  6.75

  	
   

  	
  7.50

  



 

















 


(ix)                                Modification to
Paragraph 12:  Clause “(B)” of the
definition of “Value” will be substituted to read in its entirety as follows:


 


“(B) a security, the bid price obtained by the Valuation Agent from one
of the Pricing Sources multiplied by the applicable Valuation Percentage, if
any;”


 


(x)                                      Addition to
Paragraph 12:  The following definition
of “Pricing Sources” shall be added immediately after the definition of the
term “Posted Credit Support” and immediately prior to the definition of the
term “Recalculation Date” in Paragraph 12 of this Annex:


 


“Pricing Sources” means the sources of financial information commonly
known as Bloomberg, Bridge Information Services, Data Resources Inc.,
Interactive Data Services, International Securities Market Association, Merrill
Lynch Securities Pricing Service, Muller Data Corporation, Reuters, Wood Gundy,
Trepp Pricing, JJ Kenny, S&P and Telerate.


 


(xi)                                Expenses.  Notwithstanding Paragraph 10,
the Pledgor will be responsible for, and will reimburse the Secured Party for,
all transfer and other taxes and other costs involved in the transfer of
Eligible Collateral.


 


 


Accepted and Agreed:


 


	
  JPMORGAN CHASE BANK

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  WORLD FINANCIAL
  NETWORK CREDIT CARD MASTER NOTE TRUST

  
	
   

  
	
  By: Chase Manhattan Bank
  USA, National

  Association, not in its individual capacity, but

  solely as Owner Trustee

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title: