EXHIBIT 4.1.1
DRAFT (1): 25/09/07
AMENDED AND RESTATED MASTER INTERCOMPANY LOAN AGREEMENT
[o] OCTOBER 2007
PERMANENT FUNDING (NO. 2) LIMITED
AS FUNDING 2
PERMANENT MASTER ISSUER PLC
AS MASTER ISSUER
THE BANK OF NEW YORK
AS FUNDING 2 SECURITY TRUSTEE
AND
CITIBANK, N.A.
AS AGENT BANK
[GRAPHIC OMITTED]
Xxxxx & Xxxxx LLP
CONTENTS
CLAUSE PAGE
1. Definitions and Interpretation................................. 1
2. The Facility................................................... 2
3. Conditions Precedent............................................ 2
4. Purpose........................................................ 3
5. Limited Recourse............................................... 4
6. Advance of Loan Tranches....................................... 5
7. Interest....................................................... 6
8. Repayment...................................................... 9
9. Prepayment..................................................... 11
10. Taxes.......................................................... 12
11. Illegality..................................................... 13
12. Mitigation..................................................... 13
13. Representations and Warranties of Funding 2.................... 13
14. Covenants...................................................... 15
15. Default........................................................ 18
16. Default Interest and Indemnity................................. 19
17. Payments....................................................... 20
18. Entrenched Provisions.......................................... 21
19. Further Provisions............................................. 21
20. Redenomination................................................. 22
21. Notices........................................................ 23
22. Governing Law and Submission to Jurisdiction................... 23
SCHEDULE
1. Conditions Precedent........................................... 24
2. Form of Loan Tranche Notice.................................... 26
3. Form of Loan Tranche Supplement................................ 27
4. Solvency Certificate........................................... 33
SIGNATORIES............................................................. 35
THIS AMENDED AND RESTATED MASTER INTERCOMPANY LOAN AGREEMENT (this AGREEMENT) is
made as a deed on [o] October 2007
BETWEEN:
(1) PERMANENT FUNDING (NO. 2) LIMITED (registered number 4441772), a private
limited company incorporated under the laws of England and Wales whose
registered office is at 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (FUNDING
2);
(2) PERMANENT MASTER ISSUER PLC (registered number 5922774), a public limited
company incorporated under the laws of England and Wales whose registered
office is at 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (the MASTER ISSUER);
(3) THE BANK OF NEW YORK, a national association acting through its office at
Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX (acting in its capacity as the FUNDING
2 SECURITY TRUSTEE, which expression shall include such company and all
other persons or companies for the time being acting as security trustee
(or co-trustee) pursuant to the terms of the Funding 2 Deed of Charge and
in its capacity as the MASTER ISSUER SECURITY TRUSTEE, which expression
shall include such company and all other persons or companies for the
time being acting as trustee and security trustee under the Funding 2
Deed of Charge); and
(4) CITIBANK, N.A., acting through its office at Citigroup Centre, Canada
Square, Xxxxxx Xxxxx, Xxxxxx X00 0XX (acting in its capacity as the AGENT
BANK).
WHEREAS:
(A) From time to time, the Master Issuer has and will issue Notes pursuant to
the Programme.
(B) From time to time after the date hereof, the Master Issuer Subordinated
Loan Provider will make Master Issuer Subordinated Loans to the Master
Issuer pursuant to the Master Issuer Subordinated Loan Agreements.
(C) From time to time after the date hereof, the Master Issuer Start-up Loan
Provider will advance Master Issuer Start-up Loans to the Master Issuer
pursuant to the Master Issuer Start-up Loan Agreements.
(D) The Master Issuer has agreed that it will lend the proceeds (or, as
applicable, the sterling equivalent thereof) of any issue of Notes, any
borrowings under the Master Issuer Subordinated Loan Agreements and any
borrowings under the Master Issuer Start-up Loan Agreements to Funding 2.
(E) The Master Intercompany Loan Agreement sets out the terms and conditions
with respect to lending by the Master Issuer of the proceeds of the issue
of Notes.
(F) The parties to the Master Intercompany Loan Agreement have agreed to
further amend and restate the terms of the Master Intercompany Loan
Agreement as set out herein including to set out the terms and conditions
with respect to lending by the Master Issuer of the proceeds of the
borrowings under the Master Issuer Subordinated Loan Agreements and the
Master Issuer Start-up Loan Agreements to Funding 2.
1. DEFINITIONS AND INTERPRETATION
1.1 The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Agreement and dated [o]
October 2007 (as the same may be amended, varied or
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supplemented from time to time with the consent of the parties to this
Agreement) (the MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) is
expressly and specifically incorporated into this Agreement and,
accordingly, the expressions defined in the Master Definitions and
Construction Schedule (as so amended, varied or supplemented from time to
time) shall, except where the context otherwise requires and save where
otherwise defined herein, have the same meanings in this Agreement
(including the Recitals hereto) and this Agreement shall be construed in
accordance with the interpretation provisions set out in Clause 2 of the
Master Definitions and Construction Schedule.
1.2 This Agreement amends and restates the Master Intercompany Loan Agreement
made on 17 October 2006 as amended and restated on 1 March 2007 (the
PRINCIPAL AGREEMENT). As of the date of this Agreement, any future rights
or obligations (excluding such obligations accrued to the date of this
Agreement) of a party under the Principal Agreement shall be extinguished
and shall instead be governed by this Agreement.
2. THE FACILITY
Subject to the terms of this Agreement, the Master Issuer agrees to make
available to Funding 2 a facility (the MASTER INTERCOMPANY LOAN
FACILITY). On the London Business Day prior to each Closing Date and/or
each Advance Date (as applicable), the Master Issuer shall offer Loan
Tranches to Funding 2 under the Master Intercompany Loan Facility that
correspond to:
(a) each Series and Class of Notes to be issued by the Master Issuer on
the relevant Closing Date;
(b) to each Master Issuer Subordinated Loan to be advanced to the
Master Issuer on the relevant Advance Date; and/or
(c) to each Master Issuer Start-Up Loan to be advanced to the Master
Issuer on the relevant Advance Date.
Each Loan Tranche shall be denominated in Sterling. Subject to the terms
of this Agreement, on each Closing Date and/or each Advance Date (as
applicable), Funding 2 shall accept the offer.
3. CONDITIONS PRECEDENT
Save as the Master Issuer, Funding 2 and the Funding 2 Security Trustee
may otherwise agree, each Loan Tranche will not be available for
utilisation on the relevant Closing Date and/or Advance Date (as
applicable) unless:
(a) (with respect to all Rated Loan Tranches) the related Series and
Class of Notes has been issued by the Master Issuer on the relevant
Closing Date and the subscription proceeds thereof have been
received by or on behalf of the Master Issuer;
(b) (with respect to all Subordinated Loan Tranches) the related Master
Issuer Subordinated Loan has been advanced by the Master Issuer
Subordinated Loan Provider to the Master Issuer on the relevant
Advance Date and the proceeds thereof have been received by or on
behalf of the Master Issuer;
(c) (with respect to all Start-Up Loan Tranches) the related Master
Issuer Start-Up Loan has been advanced by the Master Issuer
Start-Up Loan Provider to the Master Issuer on the relevant Advance
Date and the proceeds thereof have been received by or on behalf of
the Master Issuer;
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(d) the Funding 2 Security Trustee has confirmed to Funding 2 that it
or its advisers have received all the information and documents
listed in Schedule 1 hereto (Conditions Precedent) in form and
substance satisfactory to the Funding 2 Security Trustee;
(e) Funding 2 and the Master Issuer have signed a Loan Tranche
Supplement (substantially in the form set out in Schedule 3 hereto
(Form of Loan Tranche Supplement));
(f) Funding 2 has confirmed in the applicable Loan Tranche Supplement
that:
(i) no Master Intercompany Loan Event of Default has occurred and
is continuing unremedied (if capable of remedy) or unwaived
or would result from the making of such Loan Tranche;
(ii) the representations set out in Clause 13 are true on and as
of the relevant Closing Date by reference to the facts and
circumstances then existing; and
(iii) there will be no debit balance on the Funding 2 Principal
Deficiency Ledger after the application of the Funding 2
Available Revenue Receipts on the next Funding 2 Interest
Payment Date;
(g) Funding 2 has delivered a solvency certificate substantially in the
form set out in Schedule 4 hereto;
(h) the Master Issuer has confirmed in the applicable Loan Tranche
Supplement that no Note Event of Default has occurred and is
continuing unremedied (if capable of remedy) or unwaived or would
result from the making of such Loan Tranche;
(i) each of the Rating Agencies has confirmed in writing to the Master
Issuer Security Trustee and/or the Funding 2 Security Trustee that
there will not, as a result of the Master Issuer issuing any Notes
on the Closing Date, be any reduction, qualification or withdrawal
of the then current ratings by the Rating Agencies of any then
outstanding Notes of the Master Issuer;
(j) one or more Deeds of Accession relating to the Funding 2 Deed of
Charge have been executed by any additional Funding 2 Secured
Creditors and the parties to the Funding 2 Deed of Charge; and
(k) all other conditions precedent as may be specified in the
applicable Loan Tranche Supplement have been satisfied.
4. PURPOSE
4.1 PURPOSE AND APPLICATION OF A RATED LOAN TRANCHES AND SUBORDINATED LOAN
TRANCHES
(a) The proceeds of each Loan Tranche (excluding any Start-Up Loan Tranche)
may only be used by Funding 2:
(i) to pay the Seller the Purchase Price for the sale of any New
Portfolio to the Mortgages Trustee on the relevant Closing Date
(which payment shall increase the Funding 2 Share of the Trust
Property in accordance with the terms of the Mortgages Trust Deed);
(ii) to acquire part of the Funding 1 Share and/or the Seller Share of
the Trust Property (such payment to be made to Funding 1 and/or the
Seller, as the case may be, which shall increase
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the Funding 2 Share of the Trust Property in accordance with the
terms of the Mortgages Trust Deed);
(iii) (in the case of Rated Loan Tranches only) to refinance the existing
debt of Funding 2, including any existing Loan Tranche or of any
New Issuer or New Beneficiary in order to refinance a New
Intercompany Loan (in whole or in part); and/or
(iv) to fund or partly fund or replenish the Funding 2 General Reserve
Fund and/or (if any) the Funding 2 Liquidity Reserve Fund (in whole
or in part).
(b) The proceeds of each Start-Up Loan Tranche may only be used by Funding 2
either:
(i) to fund the Funding 2 General Reserve Fund and/or (if any) the
Funding 2 Liquidity Reserve Fund (in whole or in part);
(ii) to fund the payment of the fees, costs and expenses incurred by or
on behalf of Funding 2 in connection with the payment to the Seller
of part of the consideration for Loans (together with their Related
Security) sold to the Mortgages Trustee and/or the acquisition of
part of the Funding 1 Share of the Trust Property and/or Seller
Share of the Trust Property on the relevant Closing Date and/or
Advance Date; and/or
(iii) to fund the payment of the fees, costs and expenses payable or
incurred by or on behalf of Funding 2 under the Master Intercompany
Loan Agreement which relate to the costs of issuance of the Notes
on the relevant Closing Date and/or the advance of a Master Issuer
Subordinated Loan on the relevant Advance Date.
4.2 APPLICATION OF AMOUNTS
Without prejudice to the obligations of Funding 2 under this Clause 4,
neither the Funding 2 Security Trustee nor any of the Funding 2 Secured
Creditors shall be obliged to concern themselves as to the application of
amounts raised by Funding 2 under a Loan Tranche.
5. LIMITED RECOURSE
5.1 RECOURSE LIMITED TO AVAILABLE FUNDS
Subject to Clause 5.2 but notwithstanding the terms of any other
provision in this Agreement or any other Transaction Document, each of
the Master Issuer and the Funding 2 Security Trustee agree that the
liability of Funding 2 in respect of its obligations to repay principal
and pay interest or any other amounts due under this Agreement or for any
breach of any representation, warranty, covenant or undertaking of
Funding 2 under this Agreement shall be limited to amounts standing to
the credit of the Funding 2 GIC Account and the Funding 2 Transaction
Account from time to time (including, for the avoidance of doubt, amounts
received by Funding 2 in respect of the Funding 2 Share of the Trust
Property and from the Funding 2 Swap Provider) provided that the
application of such amounts to the discharge of Funding 2's obligations
under this Agreement shall be subject to the terms of the Funding 2 Deed
of Charge and the relevant Funding 2 Priority of Payments in all cases.
5.2 SHORTFALL ON FINAL REPAYMENT DATE
To the extent that on the Final Repayment Date of any Loan Tranche
advanced under this Agreement there is a shortfall between all amounts
(including interest and principal) payable on that Loan Tranche under
this Agreement and the amounts available therefor, that shortfall shall
not be due and payable to the Master Issuer until the time, if ever, when
Funding 2 has enough money available to pay the shortfall on that Loan
Tranche after making any other payments due that rank
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higher in priority to that Loan Tranche. Following enforcement of the
Funding 2 Security and distribution of all enforcement proceeds in
accordance with the Funding 2 Deed of Charge, all outstanding claims that
the Master Issuer and the Funding 2 Security Trustee may otherwise have
against Funding 2 will be extinguished.
6. ADVANCE OF LOAN TRANCHES
6.1 NOTICE TO FUNDING 2
Not later than 2:00 p.m. (London time) on the relevant Closing Date (or
such later time as may be agreed in writing by Funding 2, the Master
Issuer and the Funding 2 Security Trustee), Funding 2 shall give to the
Master Issuer (copied to the Funding 2 Security Trustee) a Loan Tranche
Notice (substantially in the form set out in Schedule 1 hereto (Form of
Loan Tranche Notice)) which shall request the drawing of a Loan Tranche
and delivery of which shall (subject to the terms of this Agreement and
(in the case of Rated Loan Tranches) to the issue of the relevant Series
and Class of Notes by the Master Issuer, (in the case of Subordinated
Loan Tranches) to the advance by the Master Issuer Subordinated Loan
Provider of the relevant Master Issuer Subordinated Loan to the Master
Issuer and (in the case of Start-Up Loan Tranches) to the advance by the
Master Issuer Start-Up Loan Provider of the relevant Master Issuer
Start-Up Loan to the Master Issuer) oblige Funding 2 to borrow the whole
amount stated in the Loan Tranche Notice on the relevant Closing Date
upon the terms and subject to the conditions contained in this Agreement
and such Loan Tranche Notice will set out, inter alia:
(a) the amount and currency or currencies of the proposed issue of each
Series and Class of Notes under the Programme;
(b) (in the case of Rated Loan Tranches only) the Specified Currency
Exchange Rate(s) at which the Master Issuer will swap the proceeds
of each Series and Class of Notes that is not denominated in
Sterling into Sterling; and
(c) the principal amount of each Loan Tranche available for drawing
under the Master Intercompany Loan Facility on such Closing Date.
6.2 LOAN TRANCHES CORRESPOND TO SERIES AND CLASSES OF NOTES, MASTER ISSUER
SUBORDINATED LOAN OR MASTER ISSUER START-UP LOAN
Each Loan Tranche shall be identified by reference to the relevant Series
and Class of Notes, the Master Issuer Subordinated Loan or the Master
Issuer Start-Up Loan that is used to fund it, as set out in the
applicable Loan Tranche Supplement.
6.3 LOAN TRANCHE SUPPLEMENT
The Loan Tranche Supplement to be signed on each Closing Date in
accordance with Clause 3(e) shall record, amongst other things, the
amount of each Loan Tranche to be made on such Closing Date, which shall
correspond to the principal amount of such Loan Tranche that is available
for drawing which is notified to the Master Issuer in the applicable Loan
Tranche Notice.
6.4 SINGLE DRAWING OF THE LOAN TRANCHE
On satisfaction of the conditions set out in Clause 3 the Master Issuer
shall make the applicable Loan Tranches available to Funding 2 on the
relevant Closing Date. The aggregate of the Loan Tranches to be made on
the relevant Closing Date will only be available for drawing in one
amount by Funding 2 on the relevant Closing Date.
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6.5 REDEMPTION/PAYMENT BASIS
Each Rated Loan Tranche may be a Bullet Loan Tranche, a Scheduled
Amortisation Loan Tranche, a Pass-Through Loan Tranche or a combination
of any of the foregoing, depending upon the Redemption/Payment Basis
shown in the applicable Loan Tranche Supplement.
7. INTEREST
7.1 LOAN TRANCHE INTEREST PERIODS
(a) The first Loan Tranche Interest Period in respect of a Loan Tranche will
commence on (and include) the Loan Tranche Interest Commencement Date
relating to that Loan Tranche and end on (but exclude) the first Funding
2 Interest Payment Date falling thereafter. Each subsequent Loan Tranche
Interest Period shall commence on (and include) a Funding 2 Interest
Payment Date and end on (but exclude) the next following Funding 2
Interest Payment Date.
(b) Whenever it is necessary to compute an amount of interest in respect of a
Loan Tranche for any period (including any Loan Tranche Interest Period),
such interest shall be calculated on the basis of actual days elapsed in
a 365 day year.
7.2 DETERMINATION OF LOAN TRANCHE INTEREST AMOUNT
In relation to any Loan Tranche, the rate of interest payable (the Loan
Tranche Rate of Interest) and the relevant Sterling interest amount (each
a Loan Tranche Interest Amount) in respect of such Loan Tranche shall be
determined on the basis of the provisions set out below:
(a) On the Loan Tranche Interest Determination Date in relation to such
Loan Tranche, the Agent Bank will determine the Relevant Screen
Rate in respect of such Loan Tranche at or about 11.00 am London
time. If the Relevant Screen Rate is unavailable, the Agent Bank
will request the principal London office of each of the Reference
Banks to provide the Agent Bank with its offered quotation to
leading banks for three-month Sterling deposits of
(pound)10,000,000 in the London inter-bank market as at or about
11.00 a.m. London time on such Loan Tranche Interest Determination
Date.
(b) The Loan Tranche Rate of Interest for such Loan Tranche for the
Loan Tranche Interest Period relating to such Loan Tranche shall be
the aggregate of:
(i) the Relevant Margin in respect of such Loan Tranche; and
(ii) the Relevant Screen Rate in respect of such Loan Tranche or,
if the Relevant Screen Rate is unavailable, the arithmetic
mean (or, in the case of the initial Loan Tranche Interest
Determination Date for such Loan Tranche, the linear
interpolation of the arithmetic mean) of such offered
quotations by the Reference Banks (rounded upwards, if
necessary, to five decimal places).
(c) If on any Loan Tranche Interest Determination Date in relation to
such Loan Tranche, the Relevant Screen Rate in respect of such Loan
Tranche is unavailable and only two or three of the Reference Banks
provide offered quotations, the Loan Tranche Rate of Interest for
such Loan Tranche for the relevant Loan Tranche Interest Period
shall be determined in accordance with the provisions of
subparagraph (a) above on the basis of the offered quotations of
those Reference Banks providing such quotations.
(d) If, on any such Loan Tranche Interest Determination Date, only one
or none of the Reference Banks provides the Agent Bank with such an
offered quotation, the Agent Bank
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shall forthwith consult with the Funding 2 Security Trustee for the
purposes of agreeing two banks (or, where one only of the Reference
Banks provided such a quotation, one additional bank) to provide
such a quotation or quotations to the Agent Bank (which bank or
banks are in the opinion of the Funding 2 Security Trustee suitable
for such purpose) and the Loan Tranche Rate of Interest for such
Loan Tranche for the Loan Tranche Interest Period in question shall
be determined, as aforesaid, on the basis of the offered quotations
of such banks as so agreed (or, as the case may be, the offered
quotations of such bank as so agreed and the relevant Reference
Bank).
(e) If no such bank or banks is or are so agreed or such bank or banks
as so agreed does or do not provide such a quotation or quotations,
then the Loan Tranche Rate of Interest for such Loan Tranche for
the relevant Loan Tranche Interest Periods shall be the Loan
Tranche Rate of Interest in relation to such Loan Tranche in effect
for the immediately preceding Loan Tranche Interest Period to which
subparagraph (a) above shall have applied but taking account of any
change in the Relevant Margin in relation to such Loan Tranche.
(f) There will be no minimum or maximum Loan Tranche Rate of Interest
for such Loan Tranche.
(g) The Agent Bank shall as soon as practicable after 11:00 a.m.
(London time) on each Loan Tranche Interest Determination Date,
determine and notify the Master Issuer, Funding 2, the Cash Manager
and the Funding 2 Security Trustee of: (i) the Loan Tranche Rate of
Interest applicable to such Loan Tranche for the relevant Loan
Tranche Interest Period and (ii) the Loan Tranche Interest Amount
payable in respect of such Loan Tranche for the relevant Loan
Tranche Interest Period.
(h) The Loan Tranche Interest Amount for such Loan Tranche shall be
determined by applying the relevant Loan Tranche Rate of Interest
to the Outstanding Principal Balance of such Loan Tranche,
multiplying the sum by the day count fraction described in Clause
7.1 and rounding the resultant figure to the nearest xxxxx (half a
xxxxx being rounded upwards).
(i) If the Agent Bank does not at any time for any reason determine the
Loan Tranche Rate of Interest and the Loan Tranche Interest Amount
for any Loan Tranche in accordance with paragraphs 7.2(a) to (g)
above, the Funding 2 Security Trustee shall (subject to it being
indemnified to its satisfaction) determine the Loan Tranche Rate of
Interest and Loan Tranche Interest Amount for each Loan Tranche and
any such determination shall be deemed to have been made by the
Agent Bank.
(j) All notifications, opinions, determinations, certificates,
calculations and decisions given, expressed, made or obtained for
the purposes of this Clause 7, whether by the Agent Bank or the
Funding 2 Security Trustee, shall (in the absence of wilful
default, bad faith or manifest error) be binding on Funding 2, the
Master Issuer, the Cash Manager, the Agent Bank, the Funding 2
Security Trustee and (in such absence as aforesaid) no liability to
Funding 2 shall attach to the Master Issuer, the Agent Bank, the
Funding 2 Security Trustee or the Cash Manager in connection with
the exercise or non-exercise by them or any of them of their
powers, duties and discretions hereunder.
7.3 PAYMENT ON FUNDING 2 INTEREST PAYMENT DATES
Subject to Clause 5.1, Funding 2 shall pay interest in respect of each
Loan Tranche on the Funding 2 Interest Payment Dates specified in the
applicable Loan Tranche Supplement.
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7.4 DEFERRED INTEREST
Subject to Clause 5.2, to the extent that there are insufficient funds
available to pay interest on a Loan Tranche on any Funding 2 Interest
Payment Date, the shortfall in the interest amount payable will not then
fall due but will instead be due on the following Funding 2 Interest
Payment Date on which sufficient funds are available to pay such
interest, and pending such payment, will accrue interest at the rate
specified for such Loan Tranche in the applicable Loan Tranche
Supplement.
7.5 CERTAIN FEES
In addition to the interest and principal payments to be made by Funding
2 in respect of each Loan Tranche under this Clause 7 and Clause 8,
respectively, on each Funding 2 Interest Payment Date or on any other
date on which the Master Issuer notifies Funding 2, but subject to Clause
5.1, Funding 2 shall pay to the Master Issuer for same day value to the
Master Issuer Transaction Account a fee for the provision of the Master
Intercompany Loan Facility (except that in the case of payments due under
paragraphs (a), (b), (d), (e) and (j) below, such payments shall be paid
when due by the Master Issuer). Such fee shall be an amount or amounts in
the aggregate equal to the following:
(a) the fees, costs, charges, liabilities and expenses and any other
amounts due and payable to the Note Trustee and the Funding 2
Security Trustee pursuant to the Master Issuer Trust Deed, the
Master Issuer Deed of Charge or any other Transaction Document,
together with interest thereon as provided therein;
(b) the reasonable fees and expenses of any legal advisers, accountants
and auditors appointed by the Master Issuer and properly incurred
in their performance of their functions under the Transaction
Documents which have fallen due;
(c) the fees, costs and expenses due and payable to the Paying Agents,
the Agent Bank, the Transfer Agent and the Registrar pursuant to
the Master Issuer Paying Agent and Agent Bank Agreement;
(d) any amounts due and payable by the Master Issuer to HM Revenue and
Customs in respect of the Master Issuer's liability to United
Kingdom corporation tax (insofar as payment is not or will not be
capable of being satisfied by the surrender of group relief or out
of the profits, income or gains of the Master Issuer and subject to
the terms of the Master Issuer Deed of Charge) or any other Taxes
payable by the Master Issuer;
(e) the fees, costs, charges, liabilities and expenses due and payable
to the Master Issuer Account Bank pursuant to the Master Issuer
Bank Account Agreement (if any);
(f) the fees, costs, charges, liabilities and expenses due and payable
to the Master Issuer Cash Manager pursuant to the Master Issuer
Cash Management Agreement;
(g) the fees, costs, charges, liabilities and expenses due and payable
to the Master Issuer Corporate Services Provider pursuant to the
Master Issuer Corporate Services Agreement;
(h) any termination payment due and payable by the Master Issuer to a
Master Issuer Swap Provider pursuant to a Master Issuer Swap
Agreement (which amount, and any amount received by the Master
Issuer in consideration of it entering into an agreement in
replacement of such Master Issuer Swap Agreement, shall be deemed
to be received by the Master Issuer in respect of the Loan Tranche
corresponding to the Series and Class of Notes to which such Master
Issuer Swap Agreement relates);
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(i) an amount equal to 0.01% of the interest amounts paid by Funding 2
to the Master Issuer on the Loan Tranches on Funding 2 Interest
Payment Date, provided that the amount payable by Funding 2 to the
Master Issuer pursuant to this paragraph (i) together with the
amount payable by Funding 2 to the Master Issuer pursuant to
paragraph (d) above, in respect of each accounting period of the
Master Issuer, shall in aggregate not exceed an amount equal to
0.01% of the interest amounts paid by Funding 2 to the Master
Issuer in respect of the Loan Tranches in that accounting period;
and
(j) any other amounts due or overdue by the Master Issuer to third
parties (excluding, for these purposes, the Noteholders) including
the Rating Agencies and the amounts paid by the Master Issuer under
the Programme Agreement, each Subscription Agreement, each
Underwriting Agreement and in consideration of the Master Issuer
entering into any replacement Master Issuer Swap Agreement to the
extent not paid or payable using any early termination amount
received or receivable by the Master Issuer pursuant to the Master
Issuer Swap Agreement it replaces and excluding, for the avoidance
of doubt, any amounts specified in paragraphs (a) to (i) above,
together with, (i) in respect of taxable supplies made to the Master
Issuer, an amount in respect of any VAT or similar tax payable in respect
thereof against production of a valid tax invoice; and (ii) in respect of
taxable supplies made to a person other than the Master Issuer, any
amount in respect of any VAT or Irrecoverable VAT or similar tax (as the
case may be) payable in respect thereof as provided in the relevant
agreement (against production of a copy of the relevant tax invoice), and
to be applied subject to and in accordance with the provisions of the
Master Issuer Pre-Enforcement Revenue Priority of Payments in the Master
Issuer Cash Management Agreement. The parties acknowledge that the amount
payable by Funding 2 to the Master Issuer pursuant to this Clause 7.5
shall be paid in accordance with the Funding 2 Deed of Charge and the
relevant Funding 2 Priority of Payments (which prior to service of a
Master Intercompany Loan Acceleration Notice shall be paragraph (a)(ii)
of the Funding 2 Pre-Enforcement Revenue Priority of Payments in the case
of the amount payable pursuant to paragraphs (a) to (g) and (j) above and
paragraph (q)(ii) of the Funding 2 Pre-Enforcement Revenue Priority of
Payments in the case of the amount payable pursuant to paragraphs (h) and
(i) above) and (in each case) subject to the provisions of Clause 5.1
such that in the event of a shortfall resulting in any such amount not
being paid on a Funding 2 Interest Payment Date then such amount shall
not be paid until the next Funding 2 Interest Payment Date (if any) on
which Funding 2 has sufficient amounts standing to the credit of the
Funding 2 GIC Account and the Funding 2 Transaction Account to pay such
amount in accordance with the Funding 2 Deed of Charge and the relevant
Funding 2 Priority of Payments.
7.6 SET-OFF
Funding 2 and each of the other parties to this Agreement agree that the
Master Issuer shall be entitled to set-off those amounts due and payable
by Funding 2 pursuant to Clause 7.5 on the Closing Date for a Loan
Tranche against the amount to be advanced by the Master Issuer to Funding
2 under such Loan Tranche on such Closing Date.
8. REPAYMENT
8.1 REPAYMENT OF RATED LOAN TRANCHES
Subject to Clause 5, on each Loan Payment Date, other than a Loan Payment
Date on which a Rated Loan Tranche is to be repaid under Clause 9,
Funding 2 shall repay principal in respect of such Rated Loan Tranche in
an amount equal to:
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(a) prior to the occurrence of a Trigger Event, service on Funding 2 of
a Master Intercompany Loan Acceleration Notice or the service on
the Master Issuer of a Note Acceleration Notice, the lower of:
(i) the amount due to be paid on such Loan Payment Date as
specified for such Rated Loan Tranche in the applicable Loan
Tranche Supplement; and
(ii) the amount which is available, under the terms of the Funding
2 Deed of Charge and the Cash Management Agreement, to repay
principal in respect of such Rated Loan Tranche as set out in
Part 2 of Schedule 4 of the Funding 2 Deed of Charge,
provided that, in the case of any Pass-Through Loan Tranche, the
amount of principal to be repaid by Funding 2 in respect of such
Rated Loan Tranche on any applicable Loan Payment Date occurring on
or following its Step-Up Date shall be calculated in accordance
with subparagraph (ii) above; or
(b) following the occurrence of a Non-Asset Trigger Event but prior to
the occurrence of an Asset Trigger Event, service on Funding 2 of a
Master Intercompany Loan Acceleration Notice or service on the
Master Issuer of a Note Acceleration Notice, the amount which is
available under the terms of the Funding 2 Deed of Charge and the
Cash Management Agreement to repay principal in respect of such
Loan Tranche in such circumstances as set out in Part 2 of Schedule
4 of the Funding 2 Deed of Charge; or
(c) following the occurrence of an Asset Trigger Event but prior to
service on Funding 2 of a Master Intercompany Loan Acceleration
Notice or service on the Master Issuer of a Note Acceleration
Notice, the amount which is available under the terms of the
Funding 2 Deed of Charge and the Cash Management Agreement to repay
principal in respect of such Rated Loan Tranche in such
circumstances as set out in Part 2 of Schedule 4 of the Funding 2
Deed of Charge; or
(d) following service on Funding 2 of a Master Intercompany Loan
Acceleration Notice but prior to service on the Master Issuer of a
Note Acceleration Notice, the amount which is available under the
terms of the Funding 2 Deed of Charge and the Cash Management
Agreement to repay principal in respect of such Rated Loan Tranche
in such circumstances as set out in Part 2 of Schedule 4 of the
Funding 2 Deed of Charge; or
(e) following service on the Master Issuer of a Note Acceleration
Notice, the amount which is available under the terms of the
Funding 2 Deed of Charge and the Cash Management Agreement to repay
principal in respect of such Loan Tranche in such circumstances as
set out in Part 3 of Schedule 4 of the Funding 2 Deed of Charge.
8.2 REPAYMENT OF SUBORDINATED LOAN TRANCHES
(a) Funding 2 shall make repayments of all or any part of a Subordinated Loan
Tranche on each Funding 2 Interest Payment Date if, and to the extent
that, there are Funding 2 Available Principal Receipts available therefor
after making the payments and provisions referred to in paragraphs (a) to
(p) of the Funding 2 Pre-Enforcement Principal Priority of Payments,
until such Subordinated Loan Tranche has been reduced to the Required
Subordinated Loan Principal Outstanding Amount.
(b) Subject to Clauses 5, 8.4, 8.8 and 15.10, on any Funding 2 Interest
Payment Date on which all the Rated Loan Tranches have been repaid in
full, Funding 2 shall immediately repay each Subordinated Loan Tranche
and pay any accrued but unpaid interest thereon.
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8.3 REPAYMENT OF START-UP LOAN TRANCHES
(a) Funding 2 shall make repayments of all or any part of a Start-Up Loan
Tranche on each Funding 2 Interest Payment Date if, and to the extent
that, there are Funding 2 Available Revenue Receipts available therefor
after making the payments and provisions referred to in paragraphs (a) to
(t) of the Funding 2 Pre-Enforcement Revenue Priority of Payments, until
such Start-Up Loan Tranche and any accrued but unpaid interest thereon
has been fully repaid.
(b) Subject to Clauses 5, 8.4, 8.8 and 15.10, on any Funding 2 Interest
Payment Date on which all the Rated Loan Tranches have been repaid in
full, Funding 2 shall immediately repay each Start-Up Loan Tranche and
pay any accrued but unpaid interest thereon.
8.4 DEFERRAL OF PRINCIPAL ON LOAN TRANCHES
To the extent that there are insufficient funds available to Funding 2 to
repay the amount due to be paid on such Loan Payment Date, Funding 2 will
be required to repay the shortfall, to the extent that it receives funds
therefor (and subject to the terms of the Funding 2 Deed of Charge and
the Cash Management Agreement) on subsequent Funding 2 Payment Dates in
respect of such Loan Tranche.
8.5 LOAN TRANCHE RATINGS
Unless otherwise specified for any Loan Tranche in the applicable Loan
Tranche Supplement, such Loan Tranche shall be repaid (as to both
interest and principal) in the priority according to the Loan Tranche
Rating of that Loan Tranche. The Loan Tranche Rating for a Loan Tranche
will be specified for such Loan Tranche in the applicable Loan Tranche
Supplement.
8.6 SUBORDINATION OF SUBORDINATED LOAN TRANCHES AND START-UP LOAN TRANCHES TO
RATED LOAN TRANCHES
Each Rated Loan Tranche shall be paid (as to interest) and repaid (as to
principal) in priority to each Subordinated Loan Tranche and each
Start-Up Loan Tranche.
8.7 SUBORDINATION OF START-UP LOAN TRANCHES TO SUBORDINATED LOAN TRANCHES
Each Subordinated Loan Tranche shall be paid (as to interest) and repaid
(as to principal) in priority to each Start-Up Loan Tranche.
8.8 PAYMENT SUBJECT TO TERMS OF THE FUNDING 2 DEED OF CHARGE
The terms and conditions of Clause 7 and this Clause 8 are to be read in
conjunction with the provisions of the Funding 2 Deed of Charge, as the
same may be amended or varied from time to time in accordance with the
provisions thereof.
9. PREPAYMENT
9.1 PREPAYMENT FOR TAXATION OR OTHER REASONS
If:
(a) Funding 2 is required to withhold or deduct from any payment of
principal or interest in respect of any Loan Tranche any amount for
or on account of Tax; or
(b) the Master Issuer is required to withhold or deduct from any
payment of principal, interest or premium in respect of its Notes
any amount for or on account of Tax; or
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(c) the Master Issuer or Funding 2, as the case may be, falls within
the Securitisation Tax Regime but subsequently ceases to fall
within the Securitisation Tax Regime; or
(d) a Loan Tranche becomes illegal as described in Clause 11,
then, without prejudice to the obligations of Funding 2 under Clause 11
and subject to Clause 12, Funding 2 may prepay, on any Funding 2 Interest
Payment Date, having given not more than 60 days' and not less than 30
days' (or such shorter period as may be required by any relevant law in
the case of any Loan Tranche which becomes illegal pursuant to Clause 11)
prior written notice to the Master Issuer and the Note Trustee (or on or
before the latest date permitted by the relevant law in the case of
Clause 11) so long as the relevant circumstances continue, the applicable
Loan Tranches (which in the case of (c) above, shall include all
outstanding Loan Tranches) without penalty or premium but subject to
Clause 16, provided that (in the case of a Rated Loan Tranche) the Master
Issuer is able to repay the related Notes used to fund such Rated Loan
Tranche on such Funding 2 Interest Payment Date from funds received from
repayment of such Rated Loan Tranche.
9.2 PREPAYMENT AT OPTION OF MASTER ISSUER
The Master Issuer, at its option, may require Funding 2 to prepay the
outstanding principal amount of a Rated Loan Tranche (together with any
accrued interest) on any Funding 2 Interest Payment Date on which the
Master Issuer has decided to exercise its option, if any, to redeem in
full the Notes used to fund such Rated Loan Tranche. The Master Issuer
shall give Funding 2 not more than 60 days' and not less than 30 days'
prior written notice of the Master Issuer's decision to exercise its
option to require Funding 2 to prepay the relevant Loan Tranche. Any
prepayment by Funding 2 will be made without penalty or premium but will
be subject to Clause 16.
9.3 APPLICATION OF MONIES
(a) The Master Issuer hereby agrees to apply any amounts received by way of
prepayment of a Rated Loan Tranche pursuant to Clause 9.1 or Clause 9.2
in making prepayments under the relevant Series and Class of Notes.
(b) The Master Issuer hereby agrees to apply any amounts received by way of
prepayment of a Subordinated Loan Tranche pursuant to Clause 9.1 in
making prepayments under the relevant Master Issuer Subordinated Loan
Agreement.
(c) The Master Issuer hereby agrees to apply any amounts received by way of
prepayment of a Start-Up Loan Tranche pursuant to Clause 9.1 in making
prepayments under the relevant Master Issuer Start-Up Loan Agreement.
10. TAXES
10.1 NO GROSS UP
All payments by Funding 2 under this Agreement shall be made without any
deduction or withholding for or on account of, and free and clear of, any
Taxes, except to the extent that Funding 2 is required by law to make
payment subject to such deduction or withholding.
10.2 TAX RECEIPTS
All Taxes required by law to be deducted or withheld by Funding 2 from
any amounts paid or payable under this Agreement shall be paid by Funding
2 when due and Funding 2 shall, within 30 days of the payment being made,
deliver to the Master Issuer evidence satisfactory to the Master
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Issuer (including all relevant Tax receipts) that the payment has been
duly remitted to the appropriate authority.
11. ILLEGALITY
If, at any time, it is unlawful for the Master Issuer to make, fund or
allow to remain outstanding a Loan Tranche made by it under this
Agreement, then the Master Issuer shall, promptly after becoming aware of
the same, deliver to Funding 2, the Funding 2 Security Trustee and the
Rating Agencies a legal opinion to that effect from reputable counsel and
if the Master Issuer so requires, Funding 2 shall promptly to the extent
necessary to cure such illegality prepay such Loan Tranche subject to and
in accordance with the provisions of Clause 9.1.
12. MITIGATION
If circumstances arise in respect of the Master Issuer which would, or
would upon the giving of notice, result in:
(a) the prepayment of the Loan Tranches pursuant to Clause 11; or
(b) a withholding or deduction from the amount to be paid by Funding 2
for or on account of Taxes pursuant to Clause 10,
then, without in any way limiting, reducing or otherwise qualifying the
obligations of Funding 2 under this Agreement, the Master Issuer shall:
(i) promptly upon becoming aware of the circumstances, notify the
Funding 2 Security Trustee, Funding 2 and the Rating Agencies; and
(ii) upon written request from Funding 2, take such reasonable steps as
may be practical to mitigate the effects of those circumstances
including (without limitation) the assignment of the Master
Issuer's rights under this Agreement to, and assumption of all the
Master Issuer's obligations under this Agreement by, another
company satisfactory to the Funding 2 Security Trustee, which is
willing to participate in the Loan Tranches in its place and which
is not subject to (a) and/or (b) above,
provided that no such transfer or assignment and transfer of such rights
and obligations may be permitted unless the Rating Agencies confirm in
writing to Funding 2 and the Funding 2 Security Trustee that there will
be no downgrading of the then current rating of the Notes issued by the
Master Issuer as a result and Funding 2 indemnifies the Master Issuer for
any reasonable costs and expenses properly incurred as a result of such
transfer or assignment.
13. REPRESENTATIONS AND WARRANTIES OF FUNDING 2
13.1 REPRESENTATIONS AND WARRANTIES
Funding 2 makes the representations and warranties set out in this Clause
13 to the Master Issuer and the Funding 2 Security Trustee (as trustee
for each of the Funding 2 Secured Creditors).
13.2 STATUS
(a) It is a limited liability company duly incorporated, validly
existing and registered under the laws of the jurisdiction in which
it is incorporated, capable of being sued in its own right and not
subject to any immunity from any proceedings; and
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(b) it has the power to own its property and assets and to carry on its
business as it is being conducted.
13.3 POWERS AND AUTHORITY
It has the power to enter into, perform and deliver, and has taken all
necessary corporate and other action to authorise the execution, delivery
and performance by it of, each of the Transaction Documents to which it
is a party.
13.4 LEGAL VALIDITY
Each Transaction Document to which it is or will be a party constitutes
or when executed in accordance with its terms will constitute, a legal,
valid and binding obligation of Funding 2.
13.5 NON-CONFLICT
The execution by it of each of the Transaction Documents to which it is a
party and the exercise by it of its rights and the performance of its
obligations under such Transaction Documents including, without
limitation, borrowing pursuant to the terms of this Agreement or granting
any security contemplated by the Transaction Documents will not:
(a) result in the existence or imposition of, nor oblige it to create,
any Security Interest in favour of any person (other than the
Funding 2 Secured Creditors or as otherwise contemplated in the
Transaction Documents) over all or any of its present or future
revenues or assets;
(b) conflict with any document which is binding upon it or any of its
assets;
(c) conflict with its constitutional documents; or
(d) conflict with any law, regulation or official or judicial order of
any government, governmental body or court, domestic or foreign,
having jurisdiction over it.
13.6 NO LITIGATION
No litigation, arbitration or administrative proceedings are current or,
to its knowledge, pending or threatened.
13.7 NO DEFAULT
No Master Intercompany Loan Event of Default is continuing unremedied (if
capable of remedy) or unwaived or would result from the making of any
Loan Tranche.
13.8 AUTHORISATIONS
All consents, licences, approvals, notices and authorisations required or
desirable in connection with the entry into, performance, validity and
enforceability of, and the transactions contemplated by, the Transaction
Documents have been obtained or effected (as appropriate) and are in full
force and effect.
13.9 REGISTRATION REQUIREMENTS
Except for due registration of the Funding 2 Deed of Charge under Section
395 of the Companies Xxx 0000, it is not necessary that the Funding 2
Deed of Charge or this Agreement be filed, recorded or enrolled with any
authority or that, except for registration fees payable to the Registrar
of
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Companies in respect of the Funding 2 Deed of Charge, any stamp,
registration or similar tax be paid on or in respect thereof.
13.10 RANKING OF SECURITY
The security conferred by the Funding 2 Deed of Charge constitutes a
first priority security interest of the type described, and over the
security assets referred to, in the Funding 2 Deed of Charge and the
Funding 2 Charged Property is not subject to any prior or pari passu
Security Interests.
13.11 NO OTHER BUSINESS
(a) It has not traded or carried on any business since its date of
incorporation or engaged in any activity whatsoever that is not
incidental to or necessary in connection with any of the activities in
which the Transaction Documents provide or envisage that it will engage;
and
(b) it is not party to any material agreements other than the Transaction
Documents. 13.12 Ownership (a) Its entire issued share capital is legally
and beneficially owned and controlled by Holdings; and (b) its shares are
fully paid.
13.13 GOOD TITLE AS TO ASSETS
Subject to the Security Interests created under the Funding 2 Deed of
Charge, it is and will remain the absolute beneficial owner of the
Funding 2 Share and absolute legal and beneficial owner of all other
assets charged or assigned by the Funding 2 Deed of Charge to which it is
a party.
13.14 TAX
(a) It is a resident for tax purposes and legally domiciled in its
jurisdiction of incorporation;
(b) it has no branch, business establishment or other fixed establishment
outside the United Kingdom; and
(c) (if Funding 2 falls within the Securitisation Tax Regime) no part of its
purpose or objects in being party to the Transaction Documents and the
transactions contemplated by them has been, is or will be an 'unallowable
purpose' as defined in Regulation 12 of the Taxation of Securitisation
Companies Regulations 2006.
13.15 REPETITION
The representations in this Clause 13 shall survive the execution of this
Agreement and the making of each Loan Tranche under this Agreement, and
shall be repeated by Funding 2 on each Closing Date relating to the
making of each Loan Tranche by reference to the facts and circumstances
then existing.
14. COVENANTS
14.1 DURATION
The undertakings in this Clause 14 shall remain in force from the date of
this Agreement for so long as any amount is or may be outstanding under
this Agreement.
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14.2 INFORMATION
Funding 2 shall supply to the Funding 2 Security Trustee and the Rating
Agencies:
(a) as soon as the same are available its audited accounts for that
Financial Year; and
(b) promptly, such other information in connection with the matters
contemplated by the Transaction Documents as the Funding 2 Security
Trustee or the Rating Agencies may reasonably request.
14.3 NOTIFICATION OF DEFAULT
Funding 2 shall notify the Master Issuer and the Funding 2 Security
Trustee of any Master Intercompany Loan Event of Default (and the
steps, if any, being taken to remedy it) promptly upon Funding 2
becoming aware of its occurrence.
14.4 AUTHORISATIONS
Funding 2 shall promptly:
(a) obtain, maintain and comply with the terms of; and
(b) upon request, supply certified copies to the Master Issuer and the
Funding 2 Security Trustee of,
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity or enforceability of,
any Transaction Document to which it is a party.
14.5 PARI PASSU RANKING
Funding 2 shall procure that its obligations under the Transaction
Documents do and will rank at least pari passu with all its other present
and future unsecured obligations, except for obligations mandatorily
preferred by law.
14.6 NEGATIVE PLEDGE
Funding 2 shall not create or permit to subsist any Security Interest
over or in respect of any of its assets (unless arising by operation of
law) other than as provided pursuant to the Transaction Documents.
14.7 DISPOSALS
Funding 2 shall not, either in a single transaction or in a series of
transactions, whether related or not and whether voluntarily or
involuntarily, sell, lend, assign, transfer, lease, part with or
otherwise dispose of or grant any option over all or any part of its
assets, properties or undertakings or any interest, estate, right, title
or benefit therein, other than as provided for pursuant to the
Transaction Documents.
14.8 MERGERS AND ACQUISITIONS
(a) Funding 2 shall not enter into any amalgamation, demerger, merger or
reconstruction.
(b) Funding 2 shall not acquire any assets or business or make any
investments other than as contemplated in the Transaction Documents.
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14.9 LENDING AND BORROWING
(a) Except as provided or contemplated under the Transaction Documents,
Funding 2 shall not make any loans or provide any other form of credit to
any person.
(b) Funding 2 shall not give any guarantee or indemnity to or for the benefit
of any person in respect of any obligation of any other person or enter
into any document under which Funding 2 assumes any liability of any
other person.
(c) Funding 2 shall not incur any indebtedness in respect of any borrowed
money other than under the Transaction Documents.
14.10 SHARES AND DIVIDENDS
Funding 2 shall not:
(a) declare or pay any dividend or make any other distribution in
respect of any of its shares other than in accordance with the
Funding 2 Deed of Charge;
(b) issue any further shares or alter any rights attaching to its
issued shares as at the date hereof; or
(c) repay or redeem any of its share capital.
14.11 CHANGE OF BUSINESS
(a) Funding 2 shall not carry on any business or engage in any activity other
than as contemplated by the Transaction Documents or which is not
incidental to or necessary in connection with any of the activities in
which the Transaction Documents provide or envisage that Funding 2 will
engage.
(b) Funding 2 shall not have any subsidiaries or subsidiary undertakings as
defined in the Companies Xxx 0000, as amended.
(c) Funding 2 shall not have any employees or own any premises.
14.12 TAX
(a) Funding 2 shall not apply to become part of any group for the purposes of
sections 43A-D of the Value Added Tax Act 1994 (including any other
legislative provisions supplementing the same) with the Master Issuer
unless required to do so by law; and
(b) (if Funding 2 falls within the Securitisation Tax Regime) Funding 2 shall
take reasonable steps to ensure that it does not fall outside the
Securitisation Tax Regime.
14.13 UNITED STATES ACTIVITIES
Funding 2 will not engage in any activities in the United States
(directly or through agents), will not derive any income from United
States sources as determined under United States income tax principles
and will not hold any property if doing so would cause it to be
engaged or deemed to be engaged in a trade or business within the
United States as determined under United States tax principles.
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15. DEFAULT
15.1 MASTER INTERCOMPANY LOAN EVENTS OF DEFAULT
Each of the events set out in Clause 15.2 to Clause 15.8 (inclusive) is a
MASTER INTERCOMPANY LOAN EVENT OF DEFAULT (whether or not caused by any
reason whatsoever outside the control of Funding 2 or any other person).
15.2 NON-PAYMENT
Subject to Clause 5.1, Funding 2 does not pay on the due date or such
failure to pay continues for a period of three London Business Days after
such due date any amount payable by it under this Agreement or any other
loan agreement entered into by Funding 2 at the place at and in the
currency in which it is expressed to be payable.
15.3 BREACH OF OTHER OBLIGATIONS
Funding 2 does not comply in any material respect (in the opinion of the
Funding 2 Security Trustee) with any of its obligations under the
Transaction Documents to which it is a party (other than those referred
to in Clause 15.2) and such non-compliance, if capable of remedy, is not
remedied promptly and in any event within twenty London Business Days of
Funding 2 becoming aware of the non-compliance or receipt of a written
notice from the Funding 2 Security Trustee requiring Funding 2's
non-compliance to be remedied.
15.4 MISREPRESENTATION
A representation, warranty or statement made or repeated in or in
connection with any Transaction Document or in any document delivered by
or on behalf of Funding 2 under or in connection with any Transaction
Document is incorrect in any material respect (in the opinion of the
Funding 2 Security Trustee) when made or deemed to be made or repeated.
15.5 INSOLVENCY
Any corporate action is taken by Funding 2, or any legal proceedings are
started, for the winding-up, dissolution, administration or appointment
of a liquidator, receiver, administrator, administrative receiver,
trustee or similar officer of Funding 2 or of any or all of Funding 2's
revenues and assets or any application is made or petition is lodged for
the making of an administration order in relation to Funding 2.
15.6 CREDITORS' PROCESS
Any attachment, sequestration, distress or execution affects any asset of
Funding 2 and is not discharged within twenty London Business Days.
15.7 UNLAWFULNESS
It is or becomes unlawful for Funding 2 to perform any of its obligations
under any Transaction Document.
15.8 THE FUNDING 2 DEED OF CHARGE
The Funding 2 Deed of Charge is no longer binding on or enforceable
against Funding 2 or effective to create the security intended to be
created by it.
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15.9 OWNERSHIP
The entire issued share capital of Funding 2 ceases to be legally and
beneficially owned and controlled by Holdings.
15.10 ACCELERATION OF MASTER INTERCOMPANY LOAN
Upon the occurrence of a Master Intercompany Loan Event of Default which
is continuing unremedied and/or has not been waived, the Funding 2
Security Trustee may by written notice to Funding 2 (a MASTER
INTERCOMPANY LOAN ACCELERATION NOTICE) which is copied to each of the
Funding 2 Secured Creditors and the Mortgages Trustee:
(a) declare all Loan Tranches made under this Agreement to be
immediately due and payable, whereupon the same shall, subject to
Clause 15.11, become so payable together with accrued interest
thereon and any other sums then owed by Funding 2 under this
Agreement; and/or
(b) declare the Loan Tranches to be due and payable on demand of the
Funding 2 Security Trustee.
15.11 REPAYMENT OF MASTER INTERCOMPANY LOAN ON ACCELERATIOn
Upon the Funding 2 Security Trustee declaring the Loan Tranches to be
immediately due and payable pursuant to Clause 15.10, the amount due and
payable in respect of each Loan Tranche shall be paid by Funding 2
without penalty or premium but subject to Clause 16.
16. DEFAULT INTEREST AND INDEMNITY
16.1 DEFAULT LOAN INTEREST PERIODS
If any sum due and payable by Funding 2 under this Agreement is not paid
on the due date for payment in accordance with this Agreement or if any
sum due and payable by Funding 2 under any judgment or decree of any
court in connection with this Agreement is not paid on the date of such
judgment or decree, the period beginning on such due date or, as the case
may be, the date of such judgment or decree and ending on the date upon
which the obligation of Funding 2 to pay such sum (the balance thereof
for the time being unpaid being herein referred to as an UNPAID SUM) is
discharged shall be divided into successive periods, each of which (other
than the first) shall start on (and include) a Funding 2 Interest Payment
Date and end on (but exclude) the next Funding 2 Interest Payment Date
unless the Funding 2 Security Trustee otherwise provides having regard to
when such unpaid sum is likely to be paid.
16.2 DEFAULT INTEREST
During each such period relating to an unpaid sum as is mentioned in this
Clause 16 an unpaid sum shall bear interest at the rate per annum which
the Master Issuer, acting reasonably, determines and certifies to Funding
2 and the Funding 2 Security Trustee will be sufficient to enable it to
pay interest and other costs and indemnities on or in respect of any
amount which the Master Issuer does not pay as a result of Funding 2's
non-payment under this Agreement, as a result of such unpaid sum not
being paid to it.
16.3 PAYMENT OF DEFAULT INTEREST
Any interest which shall have accrued under Clause 16.2 in respect of an
unpaid sum shall be due and payable and shall be paid by Funding 2 at the
end of the period by reference to which it is calculated.
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16.4 BROKEN PERIODS
Funding 2 shall forthwith on demand indemnify the Master Issuer against
any loss or liability that the Master Issuer incurs as a consequence of
any payment of principal being received from any source otherwise than on
a Funding 2 Interest Payment Date or an overdue amount being received
otherwise than on its due date.
16.5 FUNDING 2'S PAYMENT INDEMNITY
Funding 2 undertakes to indemnify the Master Issuer:
(a) against any cost, claim, loss, expense (including legal fees) or
liability together with any amount in respect of Irrecoverable VAT
thereon (other than by reason of the negligence or wilful default
by the Master Issuer) which it may sustain or incur as a
consequence of the occurrence of any Master Intercompany Loan Event
of Default or any default by Funding 2 in the performance of any of
the obligations expressed to be assumed by it in any of the
Transaction Documents (other than by reason of negligence or wilful
default on the part of the Master Issuer or prior breach by the
Master Issuer of the terms of any of the Transaction Documents to
which it is a party);
(b) against any loss it may suffer as a result of its funding a Loan
Tranche requested by Funding 2 under the Master Intercompany Loan
Agreement but not made; and
(c) against any other loss or liability (other than by reason of the
negligence or default of the Master Issuer or breach by the Master
Issuer of the terms of any of the Transaction Documents to which it
is a party (except where such breach is caused by the prior breach
of Funding 2) or loss of profit) it may suffer by reason of having
made a Loan Tranche available or entering into this Agreement or
enforcing any security granted pursuant to the Funding 2 Deed of
Charge.
17. PAYMENTS
17.1 PAYMENT
(a) Subject to Clause 5, all amounts of interest and principal to be paid to
the Master Issuer under this Agreement shall be paid in Sterling for
value by Funding 2 to the Master Issuer Transaction Account and the
relevant irrevocable payment instruction for such payment shall be given
by Funding 2 by no later than noon to the Master Issuer Cash Manager
under the Master Issuer Cash Management Agreement (with a copy to the
Master Issuer and the Funding 2 Security Trustee) on the Distribution
Date immediately preceding the relevant Funding 2 Interest Payment Date.
(b) On each date on which this Agreement requires any amount other than the
amounts specified in Clause 17.1 to be paid by Funding 2, Funding 2
shall, save as provided otherwise herein, make the same available to the
Master Issuer by payment in Sterling in immediately available, freely
transferable, cleared funds to the Master Issuer Transaction Account.
17.2 ALTERNATIVE PAYMENT ARRANGEMENTS
If, at any time, it shall become impracticable (by reason of any action
of any governmental authority or any change in law, exchange control
regulations or any similar event) for Funding 2 to make any payments
under this Agreement in the manner specified in Clause 17.1, then Funding
2 shall make such alternative arrangements for the payment direct to the
Master Issuer of amounts due under this Agreement as are acceptable to
the Funding 2 Security Trustee.
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17.3 NO SET-OFF
All payments required to be made by Funding 2 under this Agreement shall
be calculated without reference to any set-off or counterclaim and shall
be made free and clear of, and without any deduction for or on account
of, any set-off or counterclaim.
18. ENTRENCHED PROVISIONS
Each of Funding 2, the Master Issuer and the Funding 2 Security Trustee
acknowledge and agree that Funding 2 may from time to time enter into New
Funding 2 Loan Agreements and that the obligation of Funding 2 to repay
the Loan Tranches made under this Agreement will rank pari passu with the
obligations of Funding 2 to repay any such other loans made under such
New Funding 2 Loan Agreements. If Funding 2 intends to enter into a New
Funding 2 Loan Agreement then the provisions of this Agreement may be
varied (with the consent of the parties to this Agreement to the extent
necessary to reflect the terms of such New Funding 2 Loan Agreement) in
accordance with Clause of the Funding 2 Deed of Charge PROVIDED THAT no
variation shall be made to any of the following terms without the prior
written consent of the Funding 2 Secured Creditors and the Rating
Agencies:
(a) the determination of the Loan Tranche Rates of Interest;
(b) Clause 5 (Limited Recourse);
(c) Clause 10 (Taxes); and
(d) Clause 19.5 (Funding 2 Security Trustee).
19. FURTHER PROVISIONS
19.1 EVIDENCE OF INDEBTEDNESS
In any proceeding, action or claim relating to a Loan Tranche a statement
as to any amount due to the Master Issuer under such Loan Tranche which
is certified as being correct by an officer of the Funding 2 Security
Trustee shall, unless otherwise provided in this Agreement, be prima
facie evidence that such amount is in fact due and payable.
19.2 ENTIRE AGREEMENT, AMENDMENTS AND WAIVER AND RIGHTS CUMULATIVE
(a) This Agreement sets out the entire agreement and understanding between
the parties with respect to the subject matter of this Agreement
superseding all prior oral or written understandings other than the other
Transaction Documents.
(b) Subject to Clause 18, no amendment or waiver of any provision of this
Agreement nor consent to any departure by any of the parties therefrom
shall in any event be effective unless the same shall be in writing and
signed by each of the parties hereto. In the case of a waiver or consent,
such waiver or consent shall be effective only in the specific instance
and as against the party or parties giving it for the specific purpose
for which it is given.
(c) The respective rights of each of the parties to this Agreement are
cumulative and may be exercised as often as they consider appropriate. No
failure on the part of any party to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies
in this Agreement are cumulative and not exclusive of any remedies
provided by law.
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19.3 ASSIGNMENT
Neither the Master Issuer nor Funding 2 may assign or transfer any of its
respective rights and obligations under this Agreement PROVIDED THAT:
(a) the Master Issuer may assign its rights, title, interest or benefit
hereunder to the Funding 2 Security Trustee pursuant to the Master
Issuer Deed of Charge; and
(b) Funding 2 may assign its rights hereunder to the Funding 2 Security
Trustee pursuant to the Funding 2 Deed of Charge.
19.4 SEVERABILITY
If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
(a) the validity or enforceability in that jurisdiction of any other
provision of this Agreement; or
(b) the validity or enforceability in other jurisdictions of that or
any other provision of this Agreement.
19.5 FUNDING 2 SECURITY TRUSTEE
The Funding 2 Security Trustee shall have no responsibility for any of
the obligations of the Master Issuer or any other party to this Agreement
(other than itself). For the avoidance of doubt, the parties to this
Agreement acknowledge that the rights and obligations of the Funding 2
Security Trustee under this Agreement are governed by the Funding 2 Deed
of Charge.
19.6 COUNTERPARTS
This Agreement may be executed in any number of counterparts (manually or
by facsimile) and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all
of which when taken together shall constitute one and the same
instrument.
19.7 THIRD PARTY RIGHTS
A person who is not a party to this Agreement may not enforce any of its
terms under the Contracts (Rights of Third Parties) Xxx 0000, but this
shall not affect any right or remedy of a third party which exists or is
available apart from that Act.
20. REDENOMINATION
Each obligation under this Agreement which has been denominated in
Sterling shall be redenominated in Euro in accordance with applicable
legislation passed by the European Monetary Union upon such
redenomination of the Notes.
22
21. NOTICES
Any notices to be given pursuant to this Agreement to any of the parties
hereto shall be sufficiently served if sent by prepaid first class post,
by hand or facsimile transmission and shall be deemed to be given (in the
case of facsimile transmission) when despatched, (where delivered by
hand) on the day of delivery if delivered before 5.00 p.m. on a London
Business Day or on the next London Business Day if delivered thereafter
or (in the case of first class post) when it would be received in the
ordinary course of the post and shall be sent:
(a) in the case of the Master Issuer: to Permanent Master Issuer PLC,
00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (facsimile number +44 (0)20
7398 6325) for the attention of the Secretary;
(b) in the case of Funding 2: to Permanent Funding (No. 2) Limited, 00
Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (facsimile number +44 (0)20 7398
6325 ) for the attention of the Secretary;
(c) in the case of the Funding 2 Security Trustee: to the Bank of Xxx
Xxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX (facsimile number + 44
(0)00 0000 0000), for the attention of Corporate Trust
Administration - ABS/MBS); and
(d) in the case of Agent Bank, to Citibank, N.A., Citigroup Centre,
Canada Square, Xxxxxx Xxxxx, Xxxxxx X00 0XX, (facsimile number 020
7508 3881) for the attention of Rate Fixing,
or to such other address or facsimile number or for the attention of such
other person or entity as may from time to time be notified by any party
to the others by written notice in accordance with the provisions of this
Clause 21. All notices served under this Agreement shall be
simultaneously copied to the Funding 2 Security Trustee by the person
serving the same.
22. GOVERNING LAW AND SUBMISSION TO JURISDICTION
22.1 THIS AGREEMENT IS GOVERNED BY THE LAWS OF ENGLAND.
22.2 Each party to this Agreement hereby irrevocably submits to the exclusive
jurisdiction of the English courts in any action or proceeding arising
out of or relating to this Agreement, and hereby irrevocably agrees that
all claims in respect of such action or proceeding may be heard and
determined by such courts. Each party to this Agreement hereby
irrevocably waives, to the fullest extent it may possibly do so, any
defence or claim that the English courts are an inconvenient forum for
the maintenance or hearing of such action or proceeding.
IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed
on the day and year first before written.
23
SCHEDULE 1
CONDITIONS PRECEDENT
1. AUTHORISATIONS
1.1 A copy of the memorandum and articles of association and certificate of
incorporation of Funding 2.
1.2 A copy of a resolution of the board of directors of Funding 2 authorising
the entry into, execution and performance of the Loan Tranche Supplement
and each of the relevant Transaction Documents related to the relevant
Loan Tranche Supplement to which Funding 2 is a party and authorising
specified persons to execute those on its behalf.
1.3 A certificate of a director of Funding 2 certifying:
(a) that each document delivered under this paragraph 1 of Schedule 1
is correct, complete and in full force and effect as at a date no
later than the date of the Loan Tranche Supplement and undertaking
to notify the Funding 2 Security Trustee if that position should
change prior to the relevant Closing Date; and
(b) as to the identity and specimen signatures of the directors and
signatories of Funding 2.
2. LEGAL OPINION
Legal opinions of:
(a) Xxxxx & Xxxxx LLP, English and U.S. legal advisers to the Seller,
the Master Issuer and Funding 2, addressed to the Funding 2
Security Trustee; and
(b) Shepherd and Wedderburn LLP, Scottish legal advisers to the Seller,
the Master Issuer and Funding 2, addressed to the Funding 2
Security Trustee.
3. TRANSACTION DOCUMENTS
Duly executed copies of:
3.1 Bank Account Agreement;
3.2 Cash Management Agreement;
3.3 Controlling Beneficiary Deed;
3.4 Corporate Services Agreement;
3.5 Data Processor Agreement;
3.6 Funding 2 Deed of Charge;
3.7 Funding 2 Guaranteed Investment Contract;
3.8 Funding 2 Start-Up Loan Agreements;
3.9 Funding 2 Swap Agreement;
24
3.10 Master Definitions and Construction Schedule;
3.11 Master Intercompany Loan Agreement;
3.12 Master Issuer Bank Account Agreement;
3.13 Master Issuer Cash Management Agreement;
3.14 Master Issuer Corporate Services Agreement;
3.15 Master Issuer Deed of Charge;
3.16 Master Issuer Master Definitions Schedule;
3.17 Master Issuer Paying Agent and Agent Bank Agreement;
3.18 Master Issuer Post-Enforcement Call Option Agreement;
3.19 Master Issuer Start-up Loan Agreement (dated the relevant Closing Date)
(if applicable);
3.20 Master Issuer Subordinated Loan Agreement (dated the relevant Advance
Date) (if applicable);
3.21 Mortgages Trust Deed;
3.22 Master Issuer Swap Agreements;
3.23 Master Issuer Trust Deed;
3.24 Mortgage Sale Agreement;
3.25 Mortgages Trustee Guaranteed Investment Contract;
3.26 Seller Mortgages Trust Assignment Agreement; and
3.27 Servicing Agreement.
25
SCHEDULE 2
FORM OF LOAN TRANCHE NOTICE
From: Permanent Funding (No. 2) Limited (FUNDING 2)
To: Permanent Master Issuer plc (the MASTER ISSUER)
Copy: The Bank of New York (the FUNDING 2 SECURITY TRUSTEE)
Dear Sirs,
1. We refer to the agreement between, inter alios, ourselves, the Master
Issuer and the Funding 2 Security Trustee (as from time to time amended,
varied, novated or supplemented (the MASTER INTERCOMPANY LOAN AGREEMENT))
dated 17 October 2006 whereby a Master Intercompany Loan Facility was
made available to us. Terms defined in the Master Intercompany Loan
Agreement shall have the same meaning in this notice.
2. We hereby give you notice that, pursuant to the Master Intercompany Loan
Agreement and upon the terms and subject to the conditions contained
therein, we wish the following Loan Tranches to be made available to us
on [specify Closing Date]:
(a) Issue [o] [o] [AAA/AA/A/BBB/BB/Subordinated/Start-Up] Loan Tranche
to be funded by the Series [o] [Class [o] Notes/Master Issuer
Subordinated Loan/Master Issuer Start-Up Loan on the [Closing
Date:/Advance Date]
(i) principal amount and currency of [o];
(ii) specified Currency Exchange Rate of GBP 1.00/[o];
(iii) Principal amount (in Sterling) available to be drawn in
respect of such Loan Tranche of (pound)[o];
[repeat for all applicable Loan Tranches]
3. The interest rate(s) applicable to each Loan Tranche will be as follows:
(a) Issue [o] [o] [AAA/AA/A/BBB/BB/Master Issuer Subordinated/Master
Issuer Start-Up] Loan Tranche: [o] [Set out relevant interest
rate(s)]
[repeat for all applicable Loan Tranches]
Yours faithfully,
For and on behalf of
PERMANENT FUNDING (NO. 2) LIMITED
26
SCHEDULE 3
FORM OF LOAN TRANCHE SUPPLEMENT
FORM OF LOAN TRANCHE SUPPLEMENT
[o] - [o]
PERMANENT FUNDING (NO. 2) LIMITED
as Funding 2
PERMANENT MASTER ISSUER PLC
as Master Issuer
THE BANK OF NEW YORK
as Funding 2 Security Trustee
and
CITIBANK, N.A.
as Agent Bank
27
THIS LOAN TRANCHE SUPPLEMENT is dated [o]
BETWEEN:
(1) PERMANENT FUNDING (NO. 2) LIMITED (registered number 4441772), a private
limited company incorporated under the laws of England and Wales whose
registered office is at 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (as FUNDING
2);
(2) PERMANENT MASTER ISSUER PLC (registered number 5922774), a public limited
company incorporated under the laws of England and Wales whose registered
office is at 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (as MASTER ISSUER);
(3) THE BANK OF NEW YORK, acting through its office at One Canada Square,
London E14 5AL (in its capacity as FUNDING 2 SECURITY TRUSTEE which,
expression shall include such company and all other persons or companies
for the time being acting as security trustee (or co-trustee) pursuant to
the terms of the Funding 2 Deed of Charge and in its capacity as the
Master Issuer Security Trustee, which expression shall include such
company and all other persons or companies for the time being acting as
trustee and security trustee under the Funding 2 Deed of Charge); and
(4) CITIBANK, N.A., acting through its office at Citigroup Centre, Canada
Square, Xxxxxx Xxxxx, Xxxxxx X00 0XX (in its capacity as AGENT BANK).
This document constitutes the Loan Tranche Supplement relating to the Loan
Tranches described herein. Terms used herein shall be deemed to be defined as
such for the purposes of the Master Intercompany Loan Agreement entered into
between the parties hereto on 17 October 2006 as amended and restated on 1
March 2007 and [o] October 2007. This Loan Tranche Supplement contains the
final terms of the Loan Tranches identified and described herein, is
supplemental to and must be read in conjunction with the Master Intercompany
Loan Agreement.
[TO BE REPEATED FOR EACH LOAN TRANCHE FUNDED BY A SERIES AND CLASS OF NOTES A
MASTER ISSUER SUBORDINATED LOAN AND/OR A START-UP LOAN DATED THE SAME CLOSING
DATE AND/OR ADVANCE DATE]
LOAN TRANCHE: The Series [o] [Class [o] Notes/Master Issuer Subordinated Loan
Advance/Master Issuer Start-Up Loan] will fund the [[o]-[o]
[AAA/AA/A/BBB/BB/Master Issuer Subordinated/Master Issuer Start-Up]] Loan
Tranche which shall have the following terms:
1. Borrower: Permanent Funding (No. 2) Limited
2. Lender: Permanent Master Issuer plc
3. (a) Loan Tranche Rating: [Not Applicable/o]
(b) Series Number: [o]
4. Initial Outstanding Principal Balance: [o]
5. (a) [Closing Date/Advance Date]: [o]
(b) Loan Tranche Interest [o]
Commencement Date:
(c) Loan Tranche Interest [o]
Determination Dates:
28
6. Final Repayment Date: [o]
7. Loan Payment Dates: [o]
8. Relevant Margin: [o]
9. Relevant Screen Rate: [o]
10. Call Option Date: [Not Applicable/The Funding 2
Payment Date occurring in (specify
date)]
11. Step-Up Date: [Not Applicable/The Funding 2
Payment Date occurring in [specify
date]]
12. Relevant Margin following Step-Up [Not Applicable/[o]]
Date:
13. Redemption/Payment Basis: [Bullet Redemption]
[Scheduled Amortisation]
[Pass-through]
[Not Applicable]
14. Change of Redemption/Payment Basis: [Specify details of any provision
for change of Loan Tranches into
another Redemption/Payment Basis
15. Details relating to Bullet Loan [Applicable/Not Applicable]
Tranche:
[if not applicable, delete the
remaining subparagraphs of this
paragraph]
(a) Relevant Accumulation Amount: [o]
(b) Bullet Redemption Date: [o]
16. Details relating to Scheduled [Applicable/Not Applicable]
Amortisation Loan Tranche:
[if the Scheduled Amortisation Loan
Tranche is applicable, specify the
Scheduled Amortisation Dates and
Scheduled Amortisation Instalments
below]
[if not applicable, delete the
remaining subparagraphs of this
paragraph]
(a) Scheduled Amortisation Dates: Funding 2 Payment Dates occurring
in [o]
(b) Relevant Accumulation Amounts: [o]
17. Details relating to Pass-through Loan [Applicable/Not Applicable]
Tranches:
[If the Pass-through Loan Tranche
is applicable, specify the Funding
2 Interest Payment Date
29
following which the Pass-Through
Loan Tranches will be due]
18. Other terms and special conditions: [Not Applicable/give details]
30
CONFIRMATIONS:
Funding 2 confirms that:
(a) no Master Intercompany Loan Event of Default has occurred and is
continuing which has not been waived, or would result from the making of
such Loan Tranche;
(b) the representations and warranties set out in Clause 13 of the Master
Intercompany Loan Agreement are true on and as of the Closing Date
specified in this Loan Tranche Supplement by reference to the facts and
circumstances then existing; and
(c) as of the Closing Date specified in this Loan Tranche Supplement, there
will be no debit balance on the Funding 2 Principal Deficiency Ledger
after the application of the Funding 2 Available Revenue Receipts on the
next Funding 2 Interest Payment Date.
The Master Issuer confirms that no Note Event of Default has occurred and is
continuing which has not been waived, or would result from the making of such
Loan Tranche.
31
EXECUTION PAGE
FOR LOAN TRANCHE SUPPLEMENT
FUNDING 2
EXECUTED as a DEED by )
PERMANENT FUNDING (NO. 2) LIMITED )
acting by two directors )
MASTER ISSUER
EXECUTED as a DEED by )
PERMANENT MASTER ISSUER PLC )
acting by two directors )
FUNDING 2 SECURITY TRUSTEE
EXECUTED as a DEED by an authorised signatory for )
and on behalf of: )
THE BANK OF NEW YORK )
)
Authorised Signatory
Witness's signature
-----------------------------------------------
Name:
Address:
AGENT BANK
EXECUTED as a DEED by an authorised signatory for )
and on behalf of: )
CITIBANK, N.A. )
Authorised Signatory
Witness's signature
Name:
Address:
32
SCHEDULE 4
SOLVENCY CERTIFICATE
PERMANENT FUNDING (NO. 2) LIMITED (THE COMPANY)
To: Permanent Master Issuer plc (the MASTER ISSUER)
Copy: The Bank of New York (the FUNDING 2 SECURITY TRUSTEE)
We the undersigned HEREBY CERTIFY, that (i) having made all appropriate
searches and investigations of the Company's books and records and the
Company's accounts (both management and those required by law); and (ii) the
officers of the Company having duly considered the provisions of the insolvency
laws of the United Kingdom (including, without limitation, the provisions of
sections 123 and 238 to 243 and 423 of the Insolvency Xxx 0000, as amended (the
ACT) and the provisions of the equivalent common law of Scotland regarding
gratuitous alienations and fraudulent preferences) we have determined that:
(a) the Company is not unable to pay its debts within the meaning of section
123 of the Act and would not become unable to do so in consequence of
entering into the Transaction Documents to which it is a party or making
any drawing or granting any security under the Transaction Documents to
which it is a party, and the Company's assets currently exceed its
liabilities (taking into account its actual, contingent and prospective
liabilities) and will continue to do so notwithstanding the entry into by
it of the Transaction Documents and the making of any drawing or the
granting of any security under the Transaction Documents to which it is a
party;
(b) no execution or other process issued on a judgment, decree or order of
any court in favour of a creditor of the Company remains unsatisfied in
whole or in part;
(c) to the best of our knowledge and belief no corporate action has been
taken or is pending, no other steps have been taken and no legal
proceedings have been commenced or are threatened or are pending for (i)
the winding-up, liquidation, dissolution, administration or
reorganisation of the Company; or (ii) the Company to enter into any
composition or arrangement with its creditors generally; or (iii) the
appointment of a receiver, administrator, administrative receiver,
trustee or similar officer in respect of the Company or any of its
property, undertaking or assets. No event equivalent to any of the
foregoing has occurred in or under the laws of any relevant jurisdiction;
(d) neither the entry into of the Transaction Documents to which it is a
party nor the making of any drawing nor granting of security under the
Transaction Documents to which it is a party would be a transaction at an
undervalue within the meaning of section 238 of the Act, since the value
of any consideration received by the Company as a result of such drawing
and/or grant of security would not be significantly less than the value
of any consideration provided by the Company under the Transaction
Documents to which it is a party;
(e) the entry into of the Transaction Documents to which it is a party, any
drawing made by the Company under or pursuant to the Transaction
Documents to which it is a party, and any security granted by the Company
under or pursuant to the Transaction Documents to which it is a party
will be entered into or made, as the case may be, by the Company, in good
faith and for the purpose of carrying on its business, and there are
reasonable grounds for believing that such entry into of such Transaction
Documents, such drawings and grants of security would benefit the
Company;
(f) neither the entry into the Transaction Documents to which it is a party
nor the making of any drawing nor the granting of any security under the
Transaction Documents to which it is a party
33
would be a gratuitous alienation under section 242 of the Act (and
equivalent provisions of common law of Scotland), since such drawing
and/or grant of security was made for adequate consideration;
(g) in entering into the Transaction Documents to which it is a party, making
a drawing under or pursuant to the Transaction Documents to which it is a
party and/or granting security under or pursuant to the Transaction
Documents to which it is a party the Company has no desire to give a
preference to any person as contemplated by section 239 of the Act nor is
it the purpose of the Company to put assets beyond the reach of a person
who is making, or may at some time make, a claim against the Company or
of otherwise prejudicing the interests of such a person in relation to
the claim which he is making or may make;
(h) in entering into the Transaction Documents to which it is a party, making
a drawing under or pursuant to the Transaction Documents to which it is a
party and/or granting security under or pursuant to the Transaction
Documents to which it is a party, the Company has not and will not breach
any provision or exceed any powers contained in its Memorandum and
Articles of Association; and
(i) the transaction contemplated by the Transaction Documents constitute
reciprocal obligations of the Company with the other parties thereto for
the purposes of section 243 of the Act (and equivalent provisions of
common law of Scotland) and neither the entry into the Transaction
Documents to which it is a party nor the making of any drawing nor the
granting of any security under or pursuant to the Transaction Documents
to which it is a party is or will be collusive for the purposes of
prejudicing the general body of creditors of the Company.
Terms defined in the amended and restated master definitions and construction
schedule signed by, amongst others, the Master Issuer and the Funding 2
Security Trustee and dated 17 October 2006 (as the same may be amended, varied
or supplemented from time to time) shall have the same respective meanings when
used in this Certificate.
DATED [o]
Signed for and on behalf of Permanent Funding (No. 2) Limited
.....................................................
Director
.....................................................
Director/Secretary
34
SIGNATORIES
FUNDING 2
EXECUTED as a DEED by )
PERMANENT FUNDING (NO. 2) LIMITED )
acting by two directors )
MASTER ISSUER
EXECUTED as a DEED by )
PERMANENT MASTER ISSUER PLC )
acting by two directors )
FUNDING 2 SECURITY TRUSTEE
EXECUTED as a DEED by an authorised signatory for )
and on behalf of: )
)
THE BANK OF NEW YORK )
Authorised Signatory
Witness's signature_________________________
Name:
Address:
AGENT BANK
EXECUTED as a DEED by an authorised signatory for )
and on behalf of: )
)
CITIBANK, N.A. )
Authorised Signatory
Witness's signature_________________________
Name:
Address:
35
