Document:

EXHIBIT 4.4

 

	
   

  	
   

  	
  2004-B

  
	
  (Multicurrency—Cross
  Border)

  	
   

  	
  CLASS
  M SWAP

  

 

ISDAÒ

 

International Swap Dealers Association, Inc.

 

MASTER
AGREEMENT

 

dated as of September 22, 2004

 

	
  JPMorgan Chase Bank

  	
   

  	
  and

  	
   

  	
  World Financial Network Credit Card

  
	
  (“Party A”)

  	
   

  	
   

  	
   

  	
  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

 

5

 

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

 

6

 

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.

 

7

 

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

 

8

 

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 M SWAP

 

 

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 M Swap (as defined in the Indenture).  References in the Agreement to “Transactions”
or “Transaction” shall be deemed to be references to the Class M 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. 500085004881 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 M 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:EXHIBIT 4.5

 

	
   

  	
   

  	
  2004-B

  
	
  (Multicurrency—Cross Border)

  	
   

  	
  CLASS B 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;

 

2

 

(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.

 

(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

 

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)).

 

(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.

 

4

 

(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 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

 

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);

 

6

 

(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 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:—

 

(i) 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

 

7

 

(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 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

 

8

 

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.

 

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

 

9

 

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 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

 

10

 

(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 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

 

11

 

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.

 

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.

 

12

 

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.

 

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.

 

13

 

(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.

 

14

 

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 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

 

15

 

(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 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;

 

16

 

(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.

 

“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

 

17

 

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 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

 

18

 

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.

 

“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.

 

19

 

“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.

 

20

 

“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

 

 

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 B SWAP

 

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 B Swap (as
defined in the Indenture).  References
in the Agreement to “Transactions” or “Transaction” shall be deemed to be
references to the Class B 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. 500085004882
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 B 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

 

 

 

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

 

(l)            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:

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