Exhibit 4.1.1
EXECUTION COPY
AMENDED AND RESTATED MASTER INTERCOMPANY LOAN AGREEMENT
1 MARCH 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
33775-00214 ICM:4115141.2
CONTENTS
CLAUSE PAGE
1. Definitions and Interpretation.......................................1
2. The Facility.........................................................2
3. Conditions Precedent.................................................2
4. Purpose..............................................................3
5. Limited Recourse.....................................................3
6. Advance of Loan Tranches.............................................4
7. Interest.............................................................5
8. Repayment............................................................8
9. Prepayment...........................................................9
10. Taxes...............................................................10
11. Illegality..........................................................10
12. Mitigation..........................................................10
13. Representations and Warranties of Funding 2.........................11
14. Covenants...........................................................13
15. Default.............................................................15
16. Default Interest and Indemnity......................................17
17. Payments............................................................18
18. Entrenched Provisions...............................................18
19. Further Provisions..................................................19
20. Redenomination......................................................20
21. Notices.............................................................20
22. Governing Law and Submission to Jurisdiction........................21
SCHEDULE
1. Conditions Precedent................................................22
2. Form of Loan Tranche Notice.........................................24
3. Form of Loan Tranche Supplement.......................................
4. Solvency Certificate................................................31
Execution Page...............................................................33
THIS AMENDED AND RESTATED MASTER INTERCOMPANY LOAN AGREEMENT (this AGREEMENT) is
dated 17 October 2006 as amended and restated on 1 March 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 (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, a a national association acting through its
office at 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX (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
(4) CITIBANK, N.A., acting through its office at Citigroup Centre, Canada
Square, Xxxxxx Xxxxx, Xxxxxx X00 0XX in its capacity as AGENT BANK.
WHEREAS:
(A) From time to time, the Master Issuer will issue Notes pursuant to the
Programme.
(B) The Master Issuer has agreed that it will lend the proceeds (or, as
applicable, the sterling equivalent thereof) of any issue of Notes by
it to Funding 2.
(C) The Master Intercompany Loan Agreement dated 17 October 2006 between
the parties hereto (the ORIGINAL 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 to Funding 2.
(D) The parties to the Original Master Intercompany Loan Agreement have
agreed to amend and restate the terms of the Original Master
Intercompany Loan Agreement as set out herein.
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 17
October 2006 (as the same may be amended, varied or 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 Original Master Intercompany
Loan 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 Original Master Intercompany Loan
Agreement shall be extinguished and shall instead be governed by this
Agreement.
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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, the
Master Issuer shall offer Loan Tranches to Funding 2 under the Master
Intercompany Loan Facility that correspond to each Series and Class of
Notes to be issued by the Master Issuer on the relevant Closing Date.
Each Loan Tranche shall be denominated in Sterling. Subject to the
terms of this Agreement, on each Closing Date, 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 unless:
(a) 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) 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;
(c) 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));
(d) 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;
(e) Funding 2 has delivered a solvency certificate substantially in
the form set out in Schedule 4 hereto;
(f) 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;
(g) each of the Rating Agencies has confirmed in writing to 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
adverse effect on the then current ratings by the Rating Agencies
of any then outstanding Notes of the Master Issuer;
(h) 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
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(i) 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 LOAN TRANCHE
The proceeds of each Loan Tranche may only be used by Funding 2 either:
(a) 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);
(b) 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 the Funding
2 Share of the Trust Property in accordance with the terms of the
Mortgages Trust Deed);
(c) to refinance the existing debt of Funding 2, including any
existing Loan Tranche (in whole or in part); and/or
(d) to fund or partly fund or replenish the Funding 2 General Reserve
Fund.
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 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
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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
to the issue of the relevant Series and Class of Notes by 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) 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
Each Loan Tranche shall be identified by reference to the relevant
Series and Class of Notes 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(c) 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.
6.5 REDEMPTION/PAYMENT BASIS
Each 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.
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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 am 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 sub-paragraph (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 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
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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 sub-paragraph (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.
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.
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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;
(i) an amount equal to 0.01 per cent 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 including the Rating Agencies and the amounts paid by the
Master Issuer under the Programme Agreement, each Subscription
Agreement and each Underwriting Agreement (excluding, for these
purposes, the Noteholders) other than amounts specified in
paragraphs (a) to (i) above,
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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 LOAN TRANCHES
Subject to CLAUSE 5, on each Loan Payment Date, other than a Loan
Payment Date on which a Loan Tranche is to be repaid under CLAUSE 9,
Funding 2 shall repay principal in respect of such Loan Tranche in an
amount equal to:
(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 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 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
Loan Tranche on any applicable Loan Payment Date occurring on or
following its Step-Up Date shall be calculated in accordance with
sub-paragraph (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
8
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 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 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.
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.
8.2 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.
8.3 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
(c) a Loan Tranche becomes illegal as described in CLAUSE 11,
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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 without penalty or
premium but subject to CLAUSE 16, provided that the Master Issuer is
able to repay the related Notes used to fund such Loan Tranche on such
Funding 2 Interest Payment Date from funds received from repayment of
such 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 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 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
The Master Issuer hereby agrees to apply any amounts received by way of
prepayment pursuant to CLAUSE 9.1 or CLAUSE 9.2 in making prepayments
under the relevant Notes.
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 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:
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(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
(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.
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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 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
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(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; and
(b) it has no branch, business establishment or other fixed
establishment outside the United Kingdom.
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.
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:
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(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.
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;
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(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
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.
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.
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.
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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.
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.
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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.
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
17
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(A) 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.
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 18 of the Funding 2
Deed of Charge PROVIDED THAT no variation shall be made to any of
18
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.
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:
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(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.
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 with a copy to HBOS
Treasury Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX
(facsimile number x00 (0)00 0000 0000) for the attention of Head
of Mortgage Securitisation and Covered Bonds;
(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 with a copy to
HBOS Treasury Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX
(facsimile number x00 (0)00 0000 0000) for the attention of Head
of Mortgage Securitisation and Covered Bonds;
(c) in the case of the Funding 2 Security Trustee: to the Bank of New
York, 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX (facsimile
number + 00 (0)00 0000 0000 or + 00 (0)00 0000 0000, for the
attention of Global Structured Finance - Corporate Trust); and
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(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.
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SCHEDULE 1
CONDITIONS PRECEDENT
1. AUTHORISATIONS
(a) A copy of the memorandum and articles of association and certificate of
incorporation of Funding 2.
(b) 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.
(c) A certificate of a director of Funding 2 certifying:
(i) 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
(ii) 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 + Wedderburn, Scottish legal advisers to the Seller, the
Master Issuer and Funding 2, addressed to the Funding 2 Security
Trustee.
3. TRANSACTION DOCUMENTS
(a) Duly executed copies of:
(b) Bank Account Agreement;
(c) Cash Management Agreement;
(d) Controlling Beneficiary Deed;
(e) Corporate Services Agreement;
(f) Data Processor Agreement;
(g) Funding 2 Deed of Charge;
(h) Funding 2 Guaranteed Investment Contract;
(i) Funding 2 Start-Up Loan Agreements;
(j) Funding 2 Swap Agreement;
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(k) Master Definitions and Construction Schedule;
(l) Master Intercompany Loan Agreement;
(m) Master Issuer Bank Account Agreement;
(n) Master Issuer Cash Management Agreement;
(o) Master Issuer Corporate Services Agreement;
(p) Master Issuer Deed of Charge;
(q) Master Issuer Master Definitions Schedule;
(r) Master Issuer Paying Agent and Agent Bank Agreement;
(s) Master Issuer Post-Enforcement Call Option Agreement;
(t) Master Issuer Swap Agreements;
(u) Master Issuer Trust Deed;
(v) Mortgage Sale Agreement;
(w) Mortgages Trust Deed;
(x) Mortgages Trustee Guaranteed Investment Contract;
(y) Seller Mortgages Trust Assignment Agreement; and
(z) Servicing Agreement.
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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) Series [o] [o] (Class [o]) Loan Tranche to be funded by the
Series [o] Class [o] Notes on the Closing 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) Series [o] [o] (Class [o]) 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
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SCHEDULE 3
FORM OF LOAN TRANCHE SUPPLEMENT
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FORM OF LOAN TRANCHE SUPPLEMENT
[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
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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 00xx Xxxxx, Xxx
Xxxxxx Xxxxxx, Xxxxxx X00 0XX 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
(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. 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 NOTES OF EACH CLASS OF THE SAME
SERIES]
LOAN TRANCHE: The Series [o] Class [o] Notes will fund the [identifier] Loan
Tranche which shall have the following terms:
1. Borrower: Permanent Funding (No. 2) Limited
2. Lender: Permanent Master Issuer plc
3. (i) Loan Tranche Rating: [o]
(ii) Series Number: [o]
4. Initial Outstanding Principal Balance: [o]
5. (i) Closing Date: [o]
(ii) Loan Tranche Interest Commencement Date: [o]
(iii) Loan Tranche Interest Determination Dates: [o]
6. Final Repayment Date: [o]
7. Loan Payment Dates: [o]
8. Loan Tranche Rate: [o]
9. Loan Reference Rate: [o]
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10. Relevant Margin: [o]
11. Step-Up Date: [Not Applicable/The Funding 2 Payment Date
occurring in [specify date]]
12. Relevant Margin following Step-Up Date: [Not Applicable/[o]]
13. Redemption/Payment Basis: [Bullet Redemption]
[Scheduled Amortisation]
[Pass-through]
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 Tranche: [Applicable/Not Applicable]
[if not applicable, delete the remaining
sub-paragraphs of this paragraph]
(i) Relevant Accumulation Amount: [o]
(ii) Bullet Redemption Date: [o]
16. Details relating to Scheduled Amortisation Loan Tranche: [Applicable/Not Applicable]
[if the Scheduled Amortisation Loan Tranche is
applicable, specify the Scheduled Amortisation
Dates and Scheduled Amortisation Instalments below]
[if not applicable, delete the remaining
sub-paragraphs of this paragraph]
(i) Scheduled Amortisation Dates: Funding 2 Payment Dates occurring in [o]
ii) Relevant Accumulation Amounts: [o]
17. Details relating to Pass-through Loan Tranches: [Applicable/Not Applicable]
[If the Pass-through Loan Tranche is applicable,
specify the Funding 2 Interest Payment Date
following which the Pass-Through Loan Tranches
will be due]
18. Other terms and special conditions: [Not Applicable/give details]
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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.
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EXECUTION PAGE
FOR LOAN TRANCHE SUPPLEMENT
FUNDING 2
EXECUTED for and on behalf of )
PERMANENT FUNDING (NO. 2) LIMITED )
by: )
--------------------------------
Name:
MASTER ISSUER
EXECUTED for and on behalf of )
PERMANENT MASTER ISSUER PLC )
by: )
--------------------------------
Name:
FUNDING 2 SECURITY TRUSTEE
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: )
--------------------------------
Name:
AGENT BANK
EXECUTED for and on behalf of )
CITIBANK, N.A. )
by: )
--------------------------------
Name:
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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;
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(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 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
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EXECUTION PAGE
FUNDING 2
EXECUTED for and on behalf of )
PERMANENT FUNDING (NO. 2) LIMITED )
by: ) /s/ Xxxxxxx Xxxxxxx
Name:
MASTER ISSUER
EXECUTED for and on behalf of )
PERMANENT MASTER ISSUER PLC )
by: ) /s/ Xxxxxxx Xxxxxxx
Name:
Funding 2 Security Trustee
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: ) /s/ Xxxxxxx Xxxxxx
Name:
AGENT BANK
EXECUTED for and on behalf of )
CITIBANK, N.A. )
by ) /s/ Xxxxxxx Xxxxxxxx
Name:
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