Exhibit 4.9
DRAFT 11/03/2005
SEVENTH ISSUER CASH MANAGEMENT AGREEMENT
DATED 23RD MARCH, 2005
HALIFAX PLC
and
PERMANENT FINANCING (NO. 7) PLC
and
THE BANK OF NEW YORK
[XXXXX & XXXXX LOGO]
XXXXX & OVERY LLP
LONDON
CONTENTS
CLAUSE PAGE
1. Definitions and Interpretation.......................................................................3
2. Appointment of Seventh Issuer Cash Manager...........................................................3
3. Seventh Issuer Cash Management Services..............................................................4
4. Payments, Accounts, Ledgers..........................................................................5
5. Payments under Seventh Issuer Swap Agreements, Payments to the Principal Paying Agents and
Termination of Seventh Issuer Swap Agreements........................................................7
6. No Liability.........................................................................................9
7. Costs and Expenses...................................................................................9
8. Information..........................................................................................9
9. Remuneration........................................................................................11
10. Covenants of Seventh Issuer Cash Manager............................................................12
11. Non-Exclusivity.....................................................................................12
12. Termination.........................................................................................13
13. Further Assurance...................................................................................15
14. Miscellaneous.......................................................................................16
15. Confidentiality.....................................................................................16
16. Notices.............................................................................................17
17. Variation and Waiver................................................................................18
18. No Partnership......................................................................................18
19. Assignment..........................................................................................18
20. Exclusion of Third Party Rights.....................................................................18
21. Counterparts........................................................................................18
22. Governing Law.......................................................................................18
23. Submission to Jurisdiction..........................................................................18
SCHEDULE
1. Cash Management Services............................................................................19
2. Cash Management and Maintenance of Ledgers..........................................................21
3. Form of Seventh Issuer Quarterly Report.............................................................27
Signatories..................................................................................................31
THIS SEVENTH ISSUER CASH MANAGEMENT AGREEMENT is made on 23rd March, 2005
BETWEEN:
(1) HALIFAX PLC, a public limited company incorporated under the laws of
England and Wales whose registered office is at Xxxxxxx Xxxx, Xxxxxxx,
Xxxx Xxxxxxxxx XX0 0XX (acting in its capacity as the SEVENTH ISSUER
CASH MANAGER);
(2) PERMANENT FINANCING (NO. 7) PLC, a public limited company incorporated
under the laws of England and Wales (registered number 5330776) whose
registered office is at Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxx, Xxxxxx XX0X
0XX (the SEVENTH ISSUER); and
(3) THE BANK OF NEW YORK, a New York banking corporation whose London
branch address is at 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX
(acting in its capacity as Security Trustee).
WHEREAS:
(A) On the Seventh Issuer Closing Date the Seventh Issuer will issue the
Seventh Issuer Notes. The Seventh Issuer will make the Seventh Issuer
Term Advances to Funding 1 from the proceeds of the issue of the
Seventh Issuer Notes.
(B) The Seventh Issuer Cash Manager is willing to provide cash management
services to the Seventh Issuer and the Security Trustee on the terms
and subject to the conditions contained in this Agreement.
IT IS HEREBY AGREED as follows:
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 23rd
March, 2005 (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) and the seventh issuer
master definitions and construction schedule, signed for the purposes
of identification by Xxxxx & Overy LLP and Sidley Xxxxxx Xxxxx & Xxxx
on 23rd March, 2005 (as the same may be amended, varied or supplemented
from time to time) (the SEVENTH ISSUER MASTER DEFINITIONS AND
CONSTRUCTION SCHEDULE) are expressly and specifically incorporated into
this Agreement and, accordingly, the expressions defined in the Master
Definitions and Construction Schedule and the Seventh Issuer Master
Definitions and Construction Schedule 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 Seventh Issuer Master Definitions
and Construction Schedule and the Master Definitions and Construction
Schedule.
2. APPOINTMENT OF SEVENTH ISSUER CASH MANAGER
2.1 APPOINTMENT
Until termination pursuant to CLAUSE 12, the Seventh Issuer and the
Security Trustee (according to their respective estates and interests)
each hereby appoints the Seventh Issuer Cash Manager as its lawful
agent to provide the Seventh Issuer Cash Management Services set out in
this Agreement. The Seventh Issuer Cash Manager in each case hereby
accepts such appointment on the terms and subject to the conditions of
this Agreement.
3
2.2 DUTIES PRESCRIBED BY TRANSACTION DOCUMENTS
For the avoidance of doubt and in connection with the powers conferred
under CLAUSE 2.1, save as expressly provided elsewhere in this
Agreement nothing in this Agreement shall be construed so as to give
the Seventh Issuer Cash Manager any powers, rights, authorities,
directions or obligations other than as specified in this Agreement or
any of the other Seventh Issuer Transaction Documents.
2.3 APPOINTMENT CONDITIONAL UPON ISSUANCE OF SEVENTH ISSUER NOTES
The appointment pursuant to CLAUSE 2.1 is conditional upon the issue of
the Seventh Issuer Notes and shall take effect upon and from the
Seventh Issuer Closing Date automatically without any further action on
the part of any person PROVIDED THAT if the issue of the Seventh Issuer
Notes has not occurred by 23rd March, 2005, or such later date as
the Seventh Issuer and the Lead Managers may agree, this Agreement
shall cease to be of further effect.
3. SEVENTH ISSUER CASH MANAGEMENT SERVICES
3.1 GENERAL
The Seventh Issuer Cash Manager shall provide the services set out in
this Agreement (including, for the avoidance of doubt, the Schedules)
(the SEVENTH ISSUER CASH MANAGEMENT SERVICES).
3.2 APPROVALS AND AUTHORISATIONS
The Seventh Issuer Cash Manager shall maintain, or procure the
maintenance of, the approvals, authorisations, consents and licences
required in connection with the business of the Seventh Issuer and
shall prepare and submit, or procure the preparation and submission of,
on behalf of the Seventh Issuer all necessary applications and requests
for any further approvals, authorisations, consents or licences which
may be required in connection with the business of the Seventh Issuer
and shall, so far as it is reasonably able to do so, perform the
Seventh Issuer Cash Management Services in such a way as not to
prejudice the continuation of any such approvals, authorisations,
consents or licences.
3.3 COMPLIANCE WITH TRANSACTION DOCUMENTS, ETC.
The Seventh Issuer Cash Management Services shall include procuring (so
far as the Seventh Issuer Cash Manager, using its reasonable
endeavours, is able so to do) compliance by the Seventh Issuer with all
applicable legal requirements and with the terms of the Seventh Issuer
Transaction Documents, PROVIDED ALWAYS THAT the Seventh Issuer Cash
Manager shall not lend or provide any sum to the Seventh Issuer and
that the Seventh Issuer Cash Manager shall have no liability whatsoever
to the Seventh Issuer, the Security Trustee or any other person for any
failure by the Seventh Issuer to make any payment due under any of the
Seventh Issuer Transaction Documents (other than to the extent arising
from any failure by the Seventh Issuer Cash Manager to perform any of
its obligations under any of the Seventh Issuer Transaction Documents).
3.4 LIABILITY OF SEVENTH ISSUER CASH MANAGER
(a) The Seventh Issuer Cash Manager shall indemnify each of the Seventh
Issuer and the Security Trustee on demand on an after Tax basis for any
loss, liability, claim, expense or damage suffered or incurred by it in
respect of the negligence, fraud or wilful default of the Seventh
4
Issuer Cash Manager in carrying out its functions as Seventh Issuer
Cash Manager under, or as a result of a breach by the Seventh Issuer
Cash Manager of, the terms and provisions of this Agreement or such
other Seventh Issuer Transaction Documents to which the Seventh Issuer
Cash Manager is a party (in its capacity as such) in relation to such
functions.
(b) For the avoidance of doubt, the Seventh Issuer Cash Manager shall not
be liable in respect of any loss, liability, claim, expense or damage
suffered or incurred by the Seventh Issuer or the Security Trustee
and/or any other person as a result of the proper performance of the
Seventh Issuer Cash Management Services by the Seventh Issuer Cash
Manager save to the extent that such loss, liability, claim, expense or
damage is suffered or incurred as a result of any negligence, fraud or
wilful default of the Seventh Issuer Cash Manager under, or as a result
of a breach by the Seventh Issuer Cash Manager of, the terms and
provisions of this Agreement or any of the other Seventh Issuer
Transaction Documents to which the Seventh Issuer Cash Manager is a
party (in its capacity as such) in relation to such functions.
4. PAYMENTS, ACCOUNTS, LEDGERS
4.1 SEVENTH ISSUER TRANSACTION ACCOUNT
(a) The Seventh Issuer Cash Manager hereby confirms that the Seventh Issuer
Transaction Account has been established on or before the date of this
Agreement and that the mandate in the agreed form will apply to this
Agreement at the Seventh Issuer Closing Date. The Seventh Issuer Cash
Manager undertakes (to the extent to which the same is within its
control in its capacity as Seventh Issuer Cash Manager) that at the
Seventh Issuer Closing Date the Seventh Issuer Transaction Account will
be operative and that the Seventh Issuer Cash Manager will not
knowingly create or permit to subsist any Security Interest in relation
to the Seventh Issuer Transaction Account other than as created under
or permitted pursuant to the Seventh Issuer Deed of Charge.
(b) The Seventh Issuer Cash Manager shall procure that the following
amounts are paid into the Seventh Issuer Transaction Account:
(i) all amounts of interest paid on the Seventh Issuer Term Advances;
(ii) all repayments of principal on the Seventh Issuer Term Advances;
(iii) all amounts received by the Seventh Issuer pursuant to the
Seventh Issuer Swap Agreements (excluding the return or transfer
of any Excess Swap Collateral as set out in the relevant Seventh
Issuer Swap Agreement and in respect of each Seventh Issuer Swap
Provider, prior to the designation of an early termination date
under the relevant Seventh Issuer Swap Agreement and the
resulting application of the collateral by way of netting or
set-off, an amount equal to the value of all collateral (other
than Excess Swap Collateral) provided by such Seventh Issuer Swap
Provider to the Seventh Issuer pursuant to the relevant Seventh
Issuer Swap Agreement (and any interest or distributions in
respect thereof)); and
(iv) any other amounts whatsoever received by or on behalf of the
Seventh Issuer after the Seventh Issuer Closing Date,
and the Seventh Issuer Cash Manager shall procure that all interest
earned on the Seventh Issuer Transaction Account and all investment
proceeds from and income and distributions arising from time to time in
respect of Authorised Investments purchased from amounts standing to
the credit of the Seventh Issuer Transaction Account are credited to
such account.
5
(c) Each of the payments into the Seventh Issuer Transaction Account
referred to in CLAUSE 4.1(B) shall be made forthwith upon receipt by
the Seventh Issuer or the Seventh Issuer Cash Manager of the amount in
question.
(d) For the avoidance of doubt, as soon as reasonably practicable after
becoming aware of the same, the Seventh Issuer Cash Manager may, and
shall, withdraw Cash from the Seventh Issuer Transaction Account if,
and to the extent that, such Cash was credited thereto in error and
shall use its reasonable endeavours to ensure that such Cash is applied
correctly thereafter.
(e) The Seventh Issuer Cash Manager shall promptly notify each of the
Seventh Issuer and the Security Trustee in writing of any additional
account which supplements or replaces any account specifically referred
to in the definition of the Seventh Issuer Transaction Account in the
Seventh Issuer Master Definitions and Construction Schedule.
(f) Each of the Seventh Issuer Cash Manager and the Seventh Issuer
undertakes that, so far as it is able to procure the same, the Seventh
Issuer Transaction Account and all instructions and mandates in
relation thereto will continue to be operative and will not, save as
permitted pursuant to the Seventh Issuer Bank Account Agreement, be
changed without the prior written consent of the Security Trustee (such
consent not to be unreasonably withheld or delayed). For the avoidance
of doubt, the Seventh Issuer Cash Manager may change the authorised
signatories in respect of any instructions or mandates without the
prior written consent of the Security Trustee, in accordance with the
terms of the Seventh Issuer Bank Account Agreement.
4.2 ADDITIONAL SEVENTH ISSUER ACCOUNTS
(a) If established, the Seventh Issuer Cash Manager will not knowingly
create or permit to subsist any Security Interest in relation to any
Additional Seventh Issuer Account other than as created under or
permitted pursuant to the Seventh Issuer Deed of Charge.
(b) The Seventh Issuer Cash Manager shall procure that the relevant amounts
are paid into the applicable Seventh Issuer Account and the Seventh
Issuer Cash Manager shall procure that all interest earned on the
relevant Additional Seventh Issuer Account and all investment proceeds
from and income and distributions arising from time to time in respect
of Authorised Investments purchased from amounts standing to the credit
of an Additional Seventh Issuer Account are credited to such account.
(c) Each of the payments into the Additional Seventh Issuer Account
referred to in CLAUSE 4.2(B) shall be made forthwith upon receipt by
the Seventh Issuer or the Seventh Issuer Cash Manager of the amount in
question.
(d) For the avoidance of doubt, as soon as reasonably practicable after
becoming aware of the same, the Seventh Issuer Cash Manager may, and
shall, withdraw Cash from an Additional Seventh Issuer Account if, and
to the extent that, such Cash was credited thereto in error and shall
use its reasonable endeavours to ensure that such Cash is applied
correctly thereafter.
(e) The Seventh Issuer Cash Manager shall promptly notify each of the
Seventh Issuer and the Security Trustee in writing of any additional
account which is established pursuant to CLAUSE 3.1 of the Seventh
Issuer Bank Account Agreement or any account established to replace or
supplement such account.
(f) Each of the Seventh Issuer Cash Manager and the Seventh Issuer
undertakes that, so far as it is able to procure the same, the
Additional Seventh Issuer Accounts and all instructions and
6
mandates in relation thereto will continue to be operative and will
not, save as permitted pursuant to the Seventh Issuer Bank Account
Agreement, be changed without the prior written consent of the Security
Trustee (such consent not to be unreasonably withheld or delayed). For
the avoidance of doubt, the Seventh Issuer Cash Manager may change the
authorised signatories in respect of any instructions or mandates
without the prior written consent of the Security Trustee, in
accordance with the terms of the Seventh Issuer Bank Account Agreement.
4.3 WITHDRAWALS
(a) The Seventh Issuer Cash Manager may make withdrawals on behalf of the
Seventh Issuer from a Seventh Issuer Account, until such time as the
Seventh Issuer Cash Manager receives a copy of a Seventh Issuer Note
Acceleration Notice served by the Security Trustee on the Seventh
Issuer, as permitted by this Agreement, but shall not in carrying out
its functions as Seventh Issuer Cash Manager under this Agreement
otherwise make withdrawals from a Seventh Issuer Account.
(b) Upon receipt of such a Seventh Issuer Note Acceleration Notice, no
amount shall be withdrawn from the Seventh Issuer Accounts by the
Seventh Issuer Cash Manager without the prior written consent of the
Security Trustee.
4.4 CASH MANAGEMENT
In administering the Seventh Issuer Accounts on behalf of the Seventh
Issuer and the Security Trustee, the Seventh Issuer Cash Manager shall
comply with the provisions of Schedule 2 prior to receipt by the
Seventh Issuer Cash Manager of a copy of any Seventh Issuer Note
Acceleration Notice served on the Seventh Issuer. Following service of
a Seventh Issuer Note Acceleration Notice, the Security Trustee or any
Receiver appointed by the Security Trustee will administer the Seventh
Issuer Accounts in accordance with the terms of the Seventh Issuer Deed
of Charge.
5. PAYMENTS UNDER SEVENTH ISSUER SWAP AGREEMENTS, PAYMENTS TO THE
PRINCIPAL PAYING AGENTS AND TERMINATION OF SEVENTH ISSUER SWAP
AGREEMENTS
5.1 On each Funding 1 Interest Payment Date, the Seventh Issuer or the
Seventh Issuer Cash Manager on its behalf will procure that amounts
received from Funding 1 under the Seventh Issuer Intercompany Loan
Agreement are paid into the Seventh Issuer Transaction Account.
5.2 The Seventh Issuer, or the Seventh Issuer Cash Manager on its behalf,
will procure that:
(a) on each Funding 1 Interest Payment Date subject to making
payments ranking higher in the order of priorities of payment set
out in the Seventh Issuer Pre-Enforcement Priority of Payments
or, as the case may be, the Seventh Issuer Post-Enforcement
Priority of Payments, amounts received in respect of:
(i) the Seventh Issuer Series 1 Term Advances are paid to the
relevant Series 1 Seventh Issuer Swap Provider or if such
Seventh Issuer Swap Agreement has been terminated and the
Seventh Issuer is unable to enter into a replacement hedge
as set out in CLAUSE 5.4, into the relevant Additional
Seventh Issuer Account;
(ii) the Seventh Issuer Series 2 Term Advances are paid to the
relevant Series 2 Seventh Issuer Swap Provider or if such
Seventh Issuer Swap Agreement has
7
been terminated and the Seventh Issuer is unable to enter
into a replacement hedge as set out in CLAUSE 5.4, into the
relevant Additional Seventh Issuer Account;
(iii) the Seventh Issuer Series 3 Term Advances are paid to the
relevant Series 3 Seventh Issuer Swap Provider or if such
Seventh Issuer Swap Agreement has been terminated and the
Seventh Issuer is unable to enter into a replacement hedge
as set out in CLAUSE 5.4, into the relevant Additional
Seventh Issuer Account;
(b) on each relevant Interest Payment Date:
(i) amounts received from each Seventh Issuer Swap Provider
under the relevant Seventh Issuer Swap Agreement are paid
to the Principal Paying Agent, which amounts shall be paid
by the Paying Agents (subject to the terms of the Seventh
Issuer Paying Agent and Agent Bank Agreement) to the
holders of the corresponding classes of Seventh Issuer
Notes; and/or
(ii) amounts standing to the credit of the relevant Additional
Seventh Issuer Account are, if applicable, exchanged at the
"spot" rate from sterling into Euro or US Dollars, as
necessary and, paid to the Principal Paying Agent, which
amounts shall be paid by the Paying Agents (subject to the
terms of the Seventh Issuer Paying Agent and Agent Bank
Agreement) to the holders of the corresponding classes of
Seventh Issuer Notes.
5.3 The Seventh Issuer, or the Seventh Issuer Cash Manager on its behalf,
will procure that on each Interest Payment Date (subject to making
payments ranking higher in the order of priorities of payment set out
in the Seventh Issuer Pre-Enforcement Priority of Payments or, as the
case may be, the Seventh Issuer Post-Enforcement Priority of Payments),
amounts received from Funding 1 in respect of the Seventh Issuer Series
4 Term AAA Advance, the Seventh Issuer Series 4 Term AA Advance and the
Seventh Issuer Series 4 Term BBB Advance and, the Seventh Issuer Series
5 Term AAA Advance, are paid to the Principal Paying Agent, which
amounts shall be paid by the Paying Agents (subject to the terms of the
Seventh Issuer Paying Agent and Agent Bank Agreement) to the holders of
the corresponding class of the Series 3 Seventh Issuer Notes and the
Series 5 Seventh Issuer Notes.
5.4 If on or prior to the date of the earlier of (i) repayment in full of
the Seventh Issuer Notes or (ii) the service of a Seventh Issuer Note
Acceleration Notice, any of the Seventh Issuer Swaps are terminated,
the Seventh Issuer Cash Manager (on behalf of the Seventh Issuer and
the Security Trustee) shall purchase a replacement hedge (taking into
account any early termination payment received from the relevant
Seventh Issuer Swap Provider) in respect of the relevant class of
Seventh Issuer Notes, against, as appropriate:
(a) fluctuations in the relevant currency swap rate between Dollars
and Sterling or the possible variance between LIBOR for
three-month Sterling deposits and either:
(i) LIBOR for one-month Dollar deposits (in relation to the
Series 1 Class A Seventh Issuer Notes); or
(ii) LIBOR for three-month Dollar deposits (in relation to the
Series 1 Class B Seventh Issuer Notes, the Series 1 Class C
Seventh Issuer Notes and the Series 2 Seventh Issuer
Notes);
8
or
(b) fluctuations in the relevant currency swap rate between Euro and
Sterling or the possible variance between LIBOR for three-month
Sterling deposits and EURIBOR for three-month Euro deposits (in
relation to the Series 3 Seventh Issuer Notes)
in each case, on terms acceptable to the Rating Agencies and the
Seventh Issuer and the Security Trustee and with a swap provider whom
the Rating Agencies have previously confirmed in writing to the Seventh
Issuer and the Security Trustee will not cause the then current ratings
of the Seventh Issuer Notes to be downgraded.
5.5 If the Seventh Issuer receives a Refund Payment (as such term is
defined in the definition of Seventh Issuer Revenue Receipts) then the
Seventh Issuer, or the Seventh Issuer Cash Manager on its behalf, will
distribute such Refund Payment as part of the Seventh Issuer Revenue
Receipts in accordance with the relevant priority of payments.
6. NO LIABILITY
Save as otherwise provided in this Agreement, the Seventh Issuer Cash
Manager shall have no liability for the obligations of either the
Security Trustee or the Seventh Issuer under any of the Transaction
Documents or otherwise and nothing in this Agreement shall constitute a
guarantee, or similar obligation, by the Seventh Issuer Cash Manager of
either Funding 1, the Security Trustee or the Seventh Issuer in respect
of any of them.
7. COSTS AND EXPENSES
Subject to and in accordance with the Seventh Issuer Pre-Enforcement
Priority of Payments or, as the case may be, the Seventh Issuer
Post-Enforcement Priority of Payments, the Seventh Issuer will on each
Interest Payment Date reimburse the Seventh Issuer Cash Manager for all
out-of-pocket costs, expenses and charges (together with any amounts in
respect of Irrecoverable VAT due thereon) properly incurred by the
Seventh Issuer Cash Manager in the performance of the Seventh Issuer
Cash Management Services including any such costs, expenses or charges
not reimbursed to the Seventh Issuer Cash Manager on any previous
Interest Payment Date and the Seventh Issuer Cash Manager shall supply
the Seventh Issuer with an appropriate VAT invoice issued by the
Seventh Issuer Cash Manager or, if the Seventh Issuer Cash Manager has
treated the relevant cost, expense or charge as a disbursement for VAT
purposes, by the person making the supply.
8. INFORMATION
8.1 USE OF I.T. SYSTEMS
(a) The Seventh Issuer Cash Manager represents and warrants that at the
date hereof in respect of the software which is to be used by the
Seventh Issuer Cash Manager in providing the Seventh Issuer Cash
Management Services it has in place all necessary licences and/or
consents from the respective licensor or licensors (if any) of such
software.
(b) The Seventh Issuer Cash Manager undertakes that it shall for the
duration of this Agreement, use reasonable endeavours to:
(i) ensure that the licences and/or consents referred to in
PARAGRAPH (A) are maintained in full force and effect; and
9
(ii) except in so far as it would breach any other of its legal
obligations, grant to any person to whom it may sub-contract or
delegate the performance of all or any of its powers and
obligations under this Agreement and/or to such person as the
Seventh Issuer and the Security Trustee elect as a substitute
cash manager in accordance with the terms of this Agreement a
licence to use any proprietary software together with any updates
which may be made thereto from time to time.
(c) The Seventh Issuer Cash Manager shall use reasonable endeavours to
maintain in working order the information technology systems used by
the Seventh Issuer Cash Manager in providing the Seventh Issuer Cash
Management Services.
(d) The Seventh Issuer Cash Manager shall pass to any person to whom it may
sub-contract or delegate the performance of all or any of its powers
and obligations under this Agreement and/or to such person as the
Seventh Issuer and the Security Trustee elect as a substitute cash
manager in accordance with the terms of this Agreement the benefit of
any warranties in relation to the software insofar as the same are
capable of assignment.
8.2 BANK ACCOUNT STATEMENTS
The Seventh Issuer Cash Manager shall take all reasonable steps to
ensure that it receives a monthly bank statement in relation to each of
the Seventh Issuer Bank Accounts (subject to CLAUSE 6.3 of the Seventh
Issuer Bank Account Agreement) and that it furnishes a copy of such
statements to the Seventh Issuer and the Security Trustee, unless
otherwise agreed.
8.3 ACCESS TO BOOKS AND RECORDS
Subject to all applicable laws, the Seventh Issuer Cash Manager shall
permit the Auditors of the Seventh Issuer and any other person
nominated by the Security Trustee (to whom the Seventh Issuer Cash
Manager has no reasonable objection) at any time during normal office
hours upon reasonable notice to have access, or procure that such
person or persons are granted access, to all books of record and
account relating to the Seventh Issuer Cash Management Services
provided by the Seventh Issuer Cash Manager and related matters in
accordance with this Agreement.
8.4 STATUTORY OBLIGATIONS
The Seventh Issuer Cash Manager will use its reasonable endeavours, on
behalf of the Seventh Issuer, to prepare or procure the preparation of
and file all reports, annual returns, financial statements, statutory
forms and other returns which the Seventh Issuer is required by law to
prepare and file. Subject to approval thereof by the directors of the
Seventh Issuer, the Seventh Issuer Cash Manager shall cause such
accounts to be audited by the Auditors and shall procure so far as it
is able so to do that the Auditors shall make a report thereon as
required by law and copies of all such documents shall be delivered to
the Security Trustee, the Seventh Issuer and the Rating Agencies as
soon as practicable after the end of each accounting reference period
of the Seventh Issuer.
8.5 INFORMATION COVENANTS
(a) The Seventh Issuer Cash Manager shall provide the Seventh Issuer, the
Security Trustee, the Seller and the Rating Agencies with a quarterly
report substantially in the form set out in SCHEDULE 3, or in such
other form reasonably acceptable to the recipients thereof, in respect
of the Seventh Issuer. Each such quarterly report shall be delivered to
the Seventh Issuer, the Security Trustee, the Seller and the Rating
Agencies by the last Business Day of the month in which each Interest
Payment Date occurs.
10
(b) The Seventh Issuer Cash Manager shall provide, or procure the provision
of, to the Seventh Issuer, the Security Trustee and the Rating Agencies
copies of any annual returns or financial statements referred to in
CLAUSE 8.4 as soon as reasonably practicable after the preparation
thereof upon the request of any such person.
(c) The Seventh Issuer Cash Manager shall notify the Rating Agencies in
writing of the details of:
(i) any material amendment to the Seventh Issuer Transaction
Documents;
(ii) the occurrence of a Seventh Issuer Note Event of Default; and
(iii) any other information relating to the Seventh Issuer Cash Manager
as the Rating Agencies may reasonably request in connection with
its obligations under this Agreement, PROVIDED THAT such request
does not adversely interfere with the Seventh Issuer Cash
Manager's day-to-day provision of the Seventh Issuer Cash
Management Services under the other terms of this Agreement.
(d) The Seventh Issuer Cash Manager shall, at the request of the Security
Trustee, furnish the Security Trustee and the Rating Agencies with such
other information relating to its business and financial condition as
it may be reasonable for the Security Trustee to request in connection
with this Agreement PROVIDED THAT the Security Trustee shall not make
such a request more than once every three months unless, in the belief
of the Security Trustee, a Seventh Issuer Intercompany Loan Event of
Default, Seventh Issuer Note Event of Default or Seventh Issuer Cash
Manager Termination Event (as defined in CLAUSE 12.1) shall have
occurred and is continuing or may reasonably be expected to occur and
PROVIDED FURTHER THAT such request does not adversely interfere with
the Seventh Issuer Cash Manager's day-to-day provision of the Seventh
Issuer Cash Management Services under the other terms of this
Agreement.
9. REMUNERATION
9.1 FEE PAYABLE
The Seventh Issuer shall pay to the Seventh Issuer Cash Manager for the
Seventh Issuer Cash Management Services a cash management fee (which
shall be inclusive of VAT) which shall be agreed in writing between the
Seventh Issuer, the Security Trustee and the Seventh Issuer Cash
Manager from time to time.
9.2 PAYMENT OF FEE
The cash management fee referred to in CLAUSE 9.1 shall be paid to the
Seventh Issuer Cash Manager in arrear on each Quarterly Interest
Payment Date in the manner contemplated by and in accordance with the
provisions of the Seventh Issuer Pre-Enforcement Revenue Priority of
Payments or, as the case may be, the Seventh Issuer Post-Enforcement
Priority of Payments.
10. COVENANTS OF SEVENTH ISSUER CASH MANAGER
10.1 COVENANTS
The Seventh Issuer Cash Manager hereby covenants with and undertakes to
each of the Seventh Issuer and the Security Trustee that without
prejudice to any of its specific obligations under this Agreement:
11
(a) it will devote all due skill, care and diligence to the
performance of its obligations and the exercise of its
discretions under this Agreement;
(b) it will comply with any proper directions, orders and
instructions which the Seventh Issuer or the Security Trustee may
from time to time give to it in accordance with the provisions of
this Agreement and, in the event of any conflict, those of the
Security Trustee shall prevail;
(c) it will use its reasonable endeavours to keep in force all
licences, approvals, authorisations and consents which may be
necessary in connection with the performance of the Seventh
Issuer Cash Management Services and prepare and submit all
necessary applications and requests for any further approval,
authorisation, consent or licence required in connection with the
performance of the Seventh Issuer Cash Management Services;
(d) save as otherwise agreed with the Seventh Issuer and the Security
Trustee, it will provide free of charge to the Seventh Issuer
during normal office hours office space, facilities, equipment
and staff sufficient to fulfil the obligations of the Seventh
Issuer under this Agreement;
(e) it will not knowingly fail to comply with any legal requirements
in the performance of the Seventh Issuer Cash Management
Services;
(f) it will make all payments required to be made by it pursuant to
this Agreement on the due date for payment thereof for value on
such day without set-off (including, without limitation, in
respect of any fees owed to it) or counterclaim; and
(g) it will, not without the prior written consent of the Security
Trustee, amend or terminate any of the Seventh Issuer Transaction
Documents save in accordance with their terms.
10.2 DURATION OF COVENANTS
The covenants of the Seventh Issuer Cash Manager in CLAUSE 10.1 shall
remain in force until this Agreement is terminated but without
prejudice to any right or remedy of the Seventh Issuer and/or the
Security Trustee arising from breach of any such covenant prior to the
date of termination of this Agreement.
11. NON-EXCLUSIVITY
Nothing in this Agreement shall prevent the Seventh Issuer Cash Manager
from rendering or performing services similar to those provided for in
this Agreement to or for itself or other persons, firms or companies or
from carrying on business similar to or in competition with the
business of the Seventh Issuer or the Security Trustee.
12. TERMINATION
12.1 SEVENTH ISSUER CASH MANAGER TERMINATION EVENTS
If any of the following events (SEVENTH ISSUER CASH MANAGER TERMINATION
EVENTS) shall occur:
(a) default is made by the Seventh Issuer Cash Manager in the payment
on the due date of any payment due and payable by it under this
Agreement and such default
12
continues unremedied for a period of three London Business Days
after the earlier of the Seventh Issuer Cash Manager becoming
aware of such default and receipt by the Seventh Issuer Cash
Manager of written notice from the Seventh Issuer or the Security
Trustee, as the case may be, requiring the same to be remedied;
or
(b) default is made by the Seventh Issuer Cash Manager in the
performance or observance of any of its other covenants and
obligations under this Agreement, which in the reasonable opinion
of the Security Trustee is materially prejudicial to the
interests of the Seventh Issuer Secured Creditors and such
default continues unremedied for a period of twenty London
Business Days after the earlier of the Seventh Issuer Cash
Manager becoming aware of such default and receipt by the Seventh
Issuer Cash Manager of written notice from the Security Trustee
requiring the same to be remedied; or
(c) while the Seventh Issuer Cash Manager is the Seller, an
Insolvency Event occurs,
then the Security Trustee may at once or at any time thereafter while
such default continues by notice in writing to the Seventh Issuer Cash
Manager terminate its appointment as Seventh Issuer Cash Manager under
this Agreement with effect from a date (not earlier than the date of
the notice) specified in the notice.
12.2 RESIGNATION OF SEVENTH ISSUER CASH MANAGER
The appointment of the Seventh Issuer Cash Manager under this Agreement
may be terminated upon the expiry of not less than 12 months' written
notice of termination given by the Seventh Issuer Cash Manager to the
Seventh Issuer and the Security Trustee PROVIDED THAT:
(a) the Seventh Issuer and the Security Trustee consent in writing to
such termination;
(b) a substitute cash manager shall be appointed, such appointment to
be effective not later than the date of such termination;
(c) such substitute cash manager has cash management experience and
is approved by the Seventh Issuer and the Security Trustee;
(d) such substitute cash manager enters into an agreement
substantially on the same terms as the relevant provisions of
this Agreement or on such terms as are satisfactory to the
Seventh Issuer and the Security Trustee and the Seventh Issuer
Cash Manager shall not be released from its obligations under the
relevant provisions of this Agreement until such substitute cash
manager has entered into such new agreement and the rights of the
Seventh Issuer under such agreement are charged in favour of the
Security Trustee on terms satisfactory to the Security Trustee;
and
(e) the then current ratings (if any) of the Seventh Issuer Notes are
not adversely affected as a result thereof.
12.3 EFFECT OF TERMINATION
(a) On and after termination of the appointment of the Seventh Issuer Cash
Manager under this Agreement pursuant to this CLAUSE 12, all authority
and power of the Seventh Issuer Cash Manager under this Agreement shall
be terminated and be of no further effect and the Seventh Issuer Cash
Manager shall not thereafter hold itself out in any way as the agent of
the Seventh Issuer or the Security Trustee pursuant to this Agreement.
13
(b) Upon termination of the appointment of the Seventh Issuer Cash Manager
under this Agreement pursuant to this CLAUSE 12, the Seventh Issuer
Cash Manager shall:
(i) forthwith deliver (and in the meantime hold on trust for, and to
the order of, the Seventh Issuer or the Security Trustee, as the
case may be) to the Seventh Issuer or the Security Trustee, as
the case may be or as it shall direct in writing, all books of
account, papers, records, registers, correspondence and documents
in its possession or under its control relating to the affairs of
or belongings of the Seventh Issuer or the Security Trustee, as
the case may be, (if practicable, on the date of receipt) any
monies then held by the Seventh Issuer Cash Manager on behalf of
the Seventh Issuer, the Security Trustee and any other assets of
the Seventh Issuer and the Security Trustee;
(ii) take such further action as the Seventh Issuer or the Security
Trustee, as the case may be, may reasonably direct at the expense
of the Seventh Issuer or the Security Trustee, as the case may be
(including in relation to the appointment of a substitute cash
manager) provided that the Security Trustee shall not be required
to take or direct to be taken such further action unless it has
been indemnified and/or secured to its satisfaction;
(iii) provide all relevant information contained on computer records in
the form of magnetic tape, together with details of the layout of
the files encoded on such magnetic tapes; and
(iv) co-operate and consult with and assist the Seventh Issuer or the
Security Trustee or its nominee, as the case may be, (which
shall, for the avoidance of doubt, include any Receiver appointed
by it) for the purposes of explaining the file layouts and the
format of the magnetic tapes generally containing such computer
records on the computer system of the Seventh Issuer or the
Security Trustee or such nominee, as the case may be.
12.4 NOTICE OF EVENT OF DEFAULT
The Seventh Issuer Cash Manager shall deliver to the Seventh Issuer and
the Security Trustee as soon as reasonably practicable but in any event
within three London Business Days of becoming aware thereof a notice of
any Seventh Issuer Cash Manager Termination Event or any Seventh Issuer
Note Event of Default or any event which with the giving of notice or
expiry of any grace period or certification, as specified in such
Seventh Issuer Cash Manager Termination Event or Seventh Issuer Note
Event of Default would constitute the same.
12.5 General provisions relating to termination
(a) Termination of the appointment of the Seventh Issuer Cash Manager under
this Agreement shall be without prejudice to the liabilities of the
Seventh Issuer and the Security Trustee to the Seventh Issuer Cash
Manager or vice versa incurred before the date of such termination. The
Seventh Issuer Cash Manager shall have no right of set-off or any lien
in respect of such amounts against amounts held by it on behalf of the
Seventh Issuer or the Security Trustee.
(b) This Agreement shall terminate at such time as the Seventh Issuer
Secured Obligations have been fully discharged.
(c) On termination of the appointment of the Seventh Issuer Cash Manager
under the provisions of this CLAUSE 12, the Seventh Issuer Cash Manager
shall be entitled to receive all fees and other moneys accrued up to
(but excluding) the date of termination but shall not be entitled to
14
any other or further compensation. The Seventh Issuer shall pay such
moneys so receivable by the Seventh Issuer Cash Manager in accordance
with the Seventh Issuer Pre-Enforcement Revenue Priority of Payments
or, as the case may be, the Seventh Issuer Post-Enforcement Priority of
Payments, on the dates on which they would otherwise have fallen due
hereunder. Such termination shall not affect the Seventh Issuer Cash
Manager's rights to receive payment of all amounts (if any) due to it
from the Seventh Issuer other than under this Agreement.
(d) Any provision of this Agreement which is stated to continue after
termination of this Agreement shall remain in full force and effect
notwithstanding termination.
13. FURTHER ASSURANCE
13.1 CO-OPERATION, ETC.
The parties to this Agreement agree that they will co-operate fully to
do all such further acts and things and execute any further documents
as may be necessary or desirable to give full effect to the
arrangements contemplated by this Agreement.
13.2 POWERS OF ATTORNEY
Without prejudice to the generality of CLAUSE 13.1, the Seventh Issuer
and the Security Trustee shall upon request by the Seventh Issuer Cash
Manager forthwith give to the Seventh Issuer Cash Manager such further
powers of attorney or other written authorisations, mandates or
instruments as are necessary to enable the Seventh Issuer Cash Manager
to perform the Seventh Issuer Cash Management Services.
13.3 CHANGE OF SECURITY TRUSTEE
In the event that there is any change in the identity of the Security
Trustee or an additional security trustee is appointed in accordance
with the Seventh Issuer Deed of Charge, the Seventh Issuer Cash Manager
shall execute such documents with any other parties to this Agreement
and take such actions as such new security trustee may reasonably
require for the purposes of vesting in such new security trustee the
rights of the Security Trustee under this Agreement and under the
Seventh Issuer Deed of Charge and releasing the retiring Security
Trustee from further obligations thereunder.
13.4 NO OBLIGATION ON SECURITY TRUSTEE
Nothing contained in this Agreement shall impose any obligation or
liability on the Security Trustee to assume or perform any of the
obligations of the Seventh Issuer or the Seventh Issuer Cash Manager
under this Agreement or render it liable for any breach thereof.
14. MISCELLANEOUS
14.1 NO SET-OFF
The Seventh Issuer Cash Manager agrees that it will not:
(a) set-off or purport to set-off any amount which either the Seventh
Issuer is or will become obliged to pay to it under this
Agreement against any amount from time to time standing to the
credit of or to be credited to any Seventh Issuer Account; or
15
(b) make or exercise any claims or demands, any rights of
counterclaim or any other equities against or withhold payment of
any and all sums of money which may at any time and from time to
time be standing to the credit of any Seventh Issuer Account.
14.2 NO PETITION
The Seventh Issuer Cash Manager agrees that for so long as any Seventh
Issuer Notes are outstanding it will not petition or commence
proceedings for the administration or winding-up of the Seventh Issuer
or participate in any such proceedings with regard thereto or file
documents with the court for the appointment of an administrator in
relation to the Seventh Issuer or serve a notice of intention to
appoint an administrator in relation to the Seventh Issuer.
14.3 NO RECOURSE
(a) In relation to all sums due and payable by the Seventh Issuer to the
Seventh Issuer Cash Manager, the Seventh Issuer Cash Manager agrees
that it shall have recourse only to sums paid to or received by (or on
behalf of) the Seventh Issuer pursuant to the provisions of the Seventh
Issuer Transaction Documents.
(b) For the avoidance of doubt, the Security Trustee shall not be liable to
pay any amounts due under CLAUSES 7 and 9, and without prejudice to the
obligations of the Seventh Issuer, nor shall it be liable to pay any
amounts due to any Receiver appointed pursuant to the Seventh Issuer
Deed of Charge in respect of such amounts.
(c) Notwithstanding any other provisions of this Agreement, all obligations
to, and rights of, the Security Trustee under or in connection with
this Agreement (other than its obligations under CLAUSE 15) shall
automatically terminate upon the discharge in full of all Seventh
Issuer Secured Obligations, PROVIDED THAT this shall be without
prejudice to any claims in respect of such obligations and rights
arising on or prior to such date.
15. CONFIDENTIALITY
During the continuance of this Agreement or after its termination, each
of the Seventh Issuer, the Seventh Issuer Cash Manager and the Security
Trustee shall use its best endeavours not to disclose to any person,
firm or company any information relating to the business, finances or
other matters of a confidential nature of any other party to this
agreement of which it may exclusively by virtue of being party to the
Transaction Documents have become possessed and shall use all
reasonable endeavours to prevent any such disclosure as aforesaid,
PROVIDED HOWEVER THAT the provisions of this CLAUSE 15 shall not apply:
(a) to any information already known to the recipient otherwise than
as a result of entering into any of the Transaction Documents;
(b) to any information subsequently received by the recipient which
it would otherwise be free to disclose;
(c) to any information which is or becomes public knowledge otherwise
than as a result of the conduct of the recipient;
(d) to any extent that the recipient is required to disclose the same
pursuant to any law or order of any court of competent
jurisdiction or pursuant to any direction, request or requirement
(whether or not having the force of law) of any central bank or
any
16
governmental or other authority (including, without limitation,
any official bank examiners or regulators);
(e) to the extent that the recipient needs to disclose the same for
determining the existence of, or declaring, a Seventh Issuer Note
Event of Default, or a Seventh Issuer Cash Manager Termination
Event, the protection or enforcement of any of its rights under
any of the Transaction Documents or in connection herewith or
therewith or for the purpose of discharging, in such manner as it
thinks fit, its duties under or in connection with such
agreements in each case to such persons as require to be informed
of such information for such purposes; or
(f) in relation to any information disclosed to the professional
advisers of the recipient or (in connection with a prospective
rating of any debt to be issued by the Seventh Issuer or any New
Issuer) to any Rating Agency or any prospective new cash manager
or Security Trustee.
16. 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 17.00
hours on a Business Day or on the next Business Day if delivered
thereafter or on a day which is not a Business Day 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 Seventh Issuer Cash Manager: to Halifax plc at
Xxxxxxx Xxxx (XX/0/0/XXX), Xxxxxxx, Xxxx Xxxxxxxxx XX0 0XX
(facsimile number x00 (0) 000 000 0000) for the attention of the
Head of Mortgage Securitisation with a copy to HBOS Treasury
Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile no.
x00 (0) 00 0000 0000) for the attention of Head of Mortgage
Securitisation and Covered Bonds;
(b) in the case of the Seventh Issuer: to Permanent Financing (No. 7)
PLC at Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxx, Xxxxxx XX0X 0XX
(facsimile number x00 (0) 00 0000 0000) for the attention of the
Directors with a copy to Halifax plc at Xxxxxxx Xxxx
(XX/0/0/XXX), Xxxxxxx, Xxxx Xxxxxxxxx XX0 0XX (facsimile number
x00 (0) 000 000 0000) for the attention of the Head of Mortgage
Securitisation; and
(c) in the case of the Security Trustee: to The Bank of New York,
00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX (facsimile number
x00 (0) 00 0000 0000) for the attention of Global Structured
Finance - Corporate Trust,
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 16.
17. VARIATION AND WAIVER
No variation or waiver of this Agreement shall be effective unless it
is in writing and signed by (or by some person duly authorised by) each
of the parties. No single or partial exercise of, or failure or delay
in exercising, any right under this Agreement shall constitute a waiver
or preclude any other or further exercise of that or any other right.
17
18. NO PARTNERSHIP
It is hereby acknowledged and agreed by the parties that nothing in
this Agreement shall be construed as giving rise to any partnership
between any of the parties.
19. ASSIGNMENT
19.1 ASSIGNMENT BY THE SEVENTH ISSUER
The Seventh Issuer may not assign or transfer any of its rights and
obligations under this Agreement without the prior written consent of
each of the Security Trustee and the Seventh Issuer Cash Manager,
except that the Seventh Issuer may assign its respective rights
hereunder without such consent pursuant to the Seventh Issuer Deed of
Charge.
19.2 NO ASSIGNMENT BY SEVENTH ISSUER CASH MANAGER
The Seventh Issuer Cash Manager may not assign or transfer any of its
rights and obligations under this Agreement without the prior written
consent of the Seventh Issuer and the Security Trustee, such consent
not to be unreasonably withheld or delayed.
20. EXCLUSION OF THIRD PARTY RIGHTS
A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Xxx 0000 to enforce any term of
this Agreement, but this does not affect any right or remedy of a third
party which exists or is available apart from that Act.
21. COUNTERPARTS
This Agreement may be executed in any number of counterparts (manually
or by facsimile) each of which, when executed and delivered, shall
constitute an original, but all the counterparts shall together
constitute but one and the same instrument provided, however, that this
Agreement shall have no force or effect until it is executed by the
last party to execute the same and shall be deemed to have been
executed and delivered in the place where such last party executed this
Agreement.
22. GOVERNING LAW
This Agreement is governed by, and shall be construed in accordance
with, the laws of England.
23. SUBMISSION TO JURISDICTION
Each party to this Agreement hereby irrevocably submits to the
non-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 executed the day
and year first before written.
18
SCHEDULE 1
CASH MANAGEMENT SERVICES
The Seventh Issuer Cash Manager shall:
(a) operate the Seventh Issuer Accounts and ensure that payments are made
into and from such accounts in accordance with this Agreement, the
Seventh Issuer Deed of Charge, the Seventh Issuer Bank Account
Agreement and any other relevant Seventh Issuer Transaction Document,
PROVIDED HOWEVER THAT nothing herein shall require the Seventh Issuer
Cash Manager to make funds available to the Seventh Issuer to enable
such payments to be made other than as expressly required by the
provisions of this Agreement;
(b) keep records for all taxation purposes (including, without limitation,
those relating to VAT);
(c) subject to any applicable law, assist the Auditors of the Seventh
Issuer and provide such information to them as they may reasonably
request for the purpose of carrying out their duties as auditors of the
Seventh Issuer;
(d) make all filings, give all notices and make all registrations and other
notifications required in the day-to-day operation of the business of
the Seventh Issuer or required to be given by the Seventh Issuer
pursuant to the Seventh Issuer Transaction Documents;
(e) arrange for all payments due to be made by the Seventh Issuer under any
of the Seventh Issuer Transaction Documents, PROVIDED THAT such moneys
are at the relevant time available to the Seventh Issuer and PROVIDED
FURTHER THAT nothing herein shall constitute a guarantee by the Seventh
Issuer Cash Manager of all or any of the obligations of the Seventh
Issuer under any of the Seventh Issuer Transaction Documents;
(f) without prejudice to the role of and in conjunction with the Seventh
Issuer Corporate Services Provider under the Seventh Issuer Corporate
Services Agreement, keep general books of account and records of the
Seventh Issuer; provide accounting services, including reviewing
receipts and payments, supervising and assisting in the preparation of
interim statements and final accounts and supervising and assisting in
the preparation of tax returns;
(g) without prejudice to the role of and in conjunction with the Seventh
Issuer Corporate Services Provider under the Seventh Issuer Corporate
Services Agreement, provide or procure the provision of company
secretarial and administration services to the Seventh Issuer including
the keeping of all registers and the making of all returns and filings
required by applicable law or by UK regulatory authorities, co-operate
in the convening of board and general meetings and provide registered
office facilities;
(h) on behalf of the Seventh Issuer, PROVIDED THAT monies are at the
relevant time available to the Seventh Issuer, pay all out-of-pocket
expenses of the Seventh Issuer, incurred by the Seventh Issuer Cash
Manager on behalf of the Seventh Issuer in the performance of the
Seventh Issuer Cash Manager's duties hereunder including without
limitation:
(i) all Taxes which may be due or payable by the Seventh Issuer;
(ii) all necessary filing and other fees in compliance with regulatory
requirements;
(iii) all legal and audit fees and other professional advisory fees;
and
19
(iv) all communication expenses including postage, courier and
telephone charges;
(i) with the prior written consent of the Security Trustee, invest monies
standing from time to time to the credit of a Seventh Issuer Account in
Authorised Investments, subject to the following provisions:
(i) any such Authorised Investment shall be made in the joint names
of the Seventh Issuer and the Security Trustee;
(ii) any costs properly and reasonably incurred in making and changing
Authorised Investments will be reimbursed to the Seventh Issuer
Cash Manager and the Security Trustee by the Seventh Issuer; and
(iii) all income and other distributions arising on, or proceeds
following the disposal or maturity of, Authorised Investments
shall be credited to the relevant Seventh Issuer Account.
The Security Trustee and the Seventh Issuer Cash Manager shall not be
responsible (save where any loss results from the Security Trustee's or
the Seventh Issuer Cash Manager's, as the case may be, own fraud,
wilful default or negligence or that of their respective officers or
employees) for any loss occasioned by reason of any such Authorised
Investments whether by depreciation in value or otherwise provided that
such Authorised Investments were made in accordance with the above
provisions;
(j) (i) if necessary, perform all currency conversions free of charge,
cost or expense at the relevant exchange rate; and
(ii) for the purposes of any calculations referred to in
sub-paragraph (i) above, any currency amounts used in or
resulting from such calculations will be rounded in accordance
with the relevant market practice;
(k) make all returns and filings required to be made by the Seventh Issuer
and provide or procure the provision of company secretarial and
administration services to the Seventh Issuer; and
(l) arrange payment of all fees to the London Stock Exchange plc or, as
applicable, the UK Listing Authority of the Financial Services
Authority.
20
SCHEDULE 2
CASH MANAGEMENT AND MAINTENANCE OF LEDGERS
1. DETERMINATION
(a) On each Seventh Issuer Note Determination Date, the Seventh Issuer Cash
Manager shall determine each of the following in accordance with this
paragraph 1:
(i) the amount of any Seventh Issuer Principal Receipts and Seventh
Issuer Revenue Receipts available as at the following Interest
Payment Date; and
(ii) the Principal Amount Outstanding of the Seventh Issuer Notes, the
Pool Factor, and the Note Principal Payment of the Seventh Issuer
Notes in accordance with the Conditions.
(b) The Seventh Issuer Cash Manager shall determine and notify the Seventh
Issuer, the Note Trustee, the Registrar and the Paying Agents on or
prior to 11:00 a.m. (London time) on the last day of each Interest
Period of any Additional Amount payable in respect of such Interest
Period.
(c) (i) The Seventh Issuer Cash Manager may make all the determinations
referred to in paragraph 1(a) and paragraph 1(b) on the basis of
any reasonable and proper assumptions as the Seventh Issuer Cash
Manager considers appropriate (including without limitation as to
the amount of any payments to be made under paragraph 3 below
during the period from and including the Seventh Issuer Note
Determination Date to but excluding the next Interest Payment
Date).
(ii) The Seventh Issuer Cash Manager shall on request notify the
Seventh Issuer and the Security Trustee in writing of any such
other assumptions and shall take account of any representations
made by the Seventh Issuer and the Security Trustee (as the case
may be) in relation thereto.
(d) Each determination made in accordance with this paragraph 1 shall (in
the absence of fraud, wilful default, negligence and/or manifest error)
be final and binding on all persons.
2. NOTIFICATION OF DETERMINATIONS
(a) The Seventh Issuer Cash Manager will cause each determination of
Seventh Issuer Available Funds to be notified forthwith to the Seventh
Issuer.
(b) The Seventh Issuer Cash Manager shall procure that the determinations
and notifications required to be made pursuant to CONDITION 5(C) of the
Conditions are made.
(c) The Seventh Issuer Cash Manager will promptly notify the Seventh Issuer
and each Calculation Agent (as defined in each of the Funding 1 Swap
Agreement and each relevant Seventh Issuer Swap Agreement) of the
relevant Note Principal Payment determined in accordance with paragraph
1(a)(ii) above.
3. PRIORITY OF PAYMENTS FOR SEVENTH ISSUER REVENUE RECEIPTS
Seventh Issuer Revenue Receipts will be applied, as applicable:
21
(i) on each Interest Payment Date; or
(ii) on each day when due in respect of amounts due to third parties
pursuant to paragraph (b) below or amounts due to the Seventh
Issuer Account Bank under the Seventh Issuer Bank Account
Agreement pursuant to paragraph (d) below,
in each case until enforcement of the Seventh Issuer Security pursuant
to the Seventh Issuer Deed of Charge or until such time as there are no
Seventh Issuer Secured Obligations outstanding, in making such payments
and provisions in the following order of priority (in each case only if
and to the extent that payments or provisions of a higher priority have
been made in full and to the extent that such withdrawal does not cause
the Seventh Issuer Transaction Account to become overdrawn) (the
SEVENTH ISSUER PRE-ENFORCEMENT REVENUE PRIORITY OF PAYMENTS):
(a) first, pari passu and pro rata, to pay amounts due to:
(i) the Security Trustee, together with interest and any amount
in respect of VAT on those amounts, and to provide for any
amounts due or to become due during the following Interest
Period to the Security Trustee under the Seventh Issuer
Deed of Charge;
(ii) the Note Trustee, together with interest and any amount in
respect of VAT on those amounts, and to provide for any
amounts due or to become due during the following Interest
Period to the Note Trustee under the Seventh Issuer Trust
Deed; and
(iii) the Agent Bank, the Paying Agents, the Registrar and the
Transfer Agent, together with interest and any amount in
respect of VAT on those amounts, and any costs, charges
liabilities and expenses then due or to become due during
the following Interest Period to the Agent Bank, the
Registrar, the Transfer Agent and the Paying Agents under
the Seventh Issuer Paying Agent and Agent Bank Agreement;
(b) secondly, to pay amounts due to any third party creditors of the
Seventh Issuer (other than those referred to later in this order
of priority of payments), which amounts have been incurred
without breach by the Seventh Issuer of the Seventh Issuer
Transaction Documents and for which payment has not been provided
for elsewhere and to provide for any of those amounts expected to
become due and payable during the following Interest Period by
the Seventh Issuer and to pay or discharge any liability of the
Seventh Issuer for corporation tax on any chargeable income or
gain of the Seventh Issuer;
(c) thirdly, pari passu and pro rata, to pay amounts due to the
Seventh Issuer Cash Manager, together with any amount in respect
of VAT on those amounts, and to provide for any amounts due, or
to become due to the Seventh Issuer Cash Manager in the
immediately succeeding Interest Period, under this Agreement and
to the Corporate Services Provider under the Seventh Issuer
Corporate Services Agreement and to the Seventh Issuer Account
Bank under the Seventh Issuer Bank Account Agreement;
(d) fourthly, pari passu and pro rata, to pay:
(i) on each Funding 1 Interest Payment Date amounts due to the
Series 1 Class A Seventh Issuer Swap Provider in respect of
the Series 1 Class A Seventh
22
Issuer Swap (including any termination payment but
excluding any related Seventh Issuer Swap Excluded
Termination Amount) and from amounts received from the
Series 1 Class A Seventh Issuer Swap Provider to pay on
each Interest Payment Date interest due and payable on the
Series 1 Class A Seventh Issuer Notes;
(ii) amounts due to the Series 2 Class A Seventh Issuer Swap
Provider in respect of the Series 2 Class A Seventh Issuer
Swap (including any termination payment but excluding any
related Seventh Issuer Swap Excluded Termination Amount)
and from amounts received from the Series 2 Class A Seventh
Issuer Swap Provider to pay on each Interest Payment Date
interest due and payable on the Series 2 Class A Seventh
Issuer Notes;
(iii) amounts due to the Series 3 Class A Seventh Issuer Swap
Provider in respect of the Series 3 Class A Seventh Issuer
Swap (including any termination payment but excluding any
related Seventh Issuer Swap Excluded Termination Amount)
and from amounts received from the Series 3 Class A Seventh
Issuer Swap Provider in relation to such swap to pay on
each Interest Payment Date interest due and payable on the
Series 3 Class A Seventh Issuer Notes;
(iv) interest due and payable on the Series 4 Class A Seventh
Issuer Notes; and
(v) interest due and payable on the Series 5 Class A Seventh
Issuer Notes;
(e) fifthly, pari passu and pro rata, to pay:
(i) amounts due to the Series 1 Class B Seventh Issuer Swap
Provider in respect of the Series 1 Class B Seventh Issuer
Swap (including any termination payment but excluding any
related Seventh Issuer Swap Excluded Termination Amount)
and from amounts received from the Series 1 Class B Seventh
Issuer Swap Provider in relation to such swap to pay on
each Interest Payment Date interest due and payable on the
Series 1 Class B Seventh Issuer Notes;
(ii) amounts due to the Series 2 Class B Seventh Issuer Swap
Provider in respect of the Series 2 Class B Seventh Issuer
Swap (including any termination payment but excluding any
related Seventh Issuer Swap Excluded Termination Amount)
and from amounts received from the Series 2 Class B Seventh
Issuer Swap Provider in relation to such swap to pay on
each Interest Payment Date interest due and payable on the
Series 2 Class B Seventh Issuer Notes;
(iii) amounts due to the Series 3 Class B Seventh Issuer Swap
Provider in respect of the Series 3 Class B Seventh Issuer
Swap (including any termination payment but excluding any
related Seventh Issuer Swap Excluded Termination Amount)
and from amounts received from the Series 3 Class B Seventh
Issuer Swap Provider in relation to such swap to pay on
each Interest Payment Date interest due and payable on the
Series 3 Class B Seventh Issuer Notes; and
(iv) interest due and payable on the Series 4 Class B Seventh
Issuer Notes;
23
(f) sixthly, pari passu and pro rata, to pay:
(i) amounts due to the Series 1 Seventh Class C Issuer Swap
Provider in respect of the Series 1 Class C Seventh Issuer
Swap (including any termination payment but excluding any
related Seventh Issuer Swap Excluded Termination Amount)
and from amounts received from the Series 1 Class C Seventh
Issuer Swap Provider in relation to such swap to pay on
each Interest Payment Date interest due and payable on the
Series 1 Class C Seventh Issuer Notes;
(ii) amounts due to the Series 2 Seventh Class C Issuer Swap
Provider in respect of the Series 2 Class C Seventh Issuer
Swap (including any termination payment but excluding any
related Seventh Issuer Swap Excluded Termination Amount)
and from amounts received from the Series 2 Class C Seventh
Issuer Swap Provider in relation to such swap to pay on
each Interest Payment Date interest due and payable on the
Series 2 Class C Seventh Issuer Notes;
(iii) amounts due to the Series 3 Seventh Class C Issuer Swap
Provider in respect of the Series 3 Class C Seventh Issuer
Swap (including any termination payment but excluding any
related Seventh Issuer Swap Excluded Termination Amount)
and from amounts received from the Series 3 Class C Seventh
Issuer Swap Provider in relation to such swap to pay on
each Interest Payment Date interest due and payable on the
Series 3 Class C Seventh Issuer Notes; and
(iv) interest due and payable on the Series 4 Class C Seventh
Issuer Notes;
(g) seventhly, pari passu and pro rata, to pay any termination
payment due (without double counting) to:
(i) the Series 1 Seventh Issuer Swap Provider following a
Seventh Issuer Swap Provider Default or a Seventh Issuer
Swap Provider Downgrade Termination Event in respect of the
Series 1 Seventh Issuer Swap Provider;
(ii) the Series 2 Seventh Issuer Swap Provider following a
Seventh Issuer Swap Provider Default or a Seventh Issuer
Swap Provider Downgrade Termination Event in respect of the
Series 2 Seventh Issuer Swap Provider; and
(iii) the Series 3 Seventh Issuer Swap Provider following a
Seventh Issuer Swap Provider Default or a Seventh Issuer
Swap Provider Downgrade Termination Event in respect of the
Series 3 Seventh Issuer Swap Provider;
(h) eighthly, to the Seventh Issuer, an amount equal to 0.01 per
cent. of the interest received on the Seventh Issuer Term
Advances, to be retained by the Seventh Issuer as profit; and
(i) ninthly, to the Seventh Issuer.
4. PRIORITY OF PAYMENTS FOR SEVENTH ISSUER PRINCIPAL RECEIPTS
Subject to CONDITION 5 of the Seventh Issuer Notes, until enforcement
of the Seventh Issuer Security pursuant to the Seventh Issuer Deed of
Charge or until such time as there are no
24
Seventh Issuer Notes outstanding, Seventh Issuer Principal Receipts
will be applied as follows:
(a) the Series 1 Class A Seventh Issuer Notes shall be redeemed on
the relevant Interest Payment Date in an amount equal to the
amount, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 1 Term AAA Advance, converted into Dollars
at the relevant Dollar Currency Exchange Rate;
(b) the Series 2 Class A Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount, if
any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 2 Term AAA Advance, converted into Dollars
at the relevant Dollar Currency Exchange Rate;
(c) the Series 3 Class A Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount, if
any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 3 Term AAA Advance, converted into Euro at
the Currency Exchange Rate;
(d) the Series 4 Class A Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount,
if any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 4 Term AAA Advance;
(e) the Series 5 Class A Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount, if
any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 5 Term AAA Advance;
(f) the Series 1 Class B Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount, if
any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 1 Term AA Advance, converted into Dollars
at the relevant Dollar Currency Exchange Rate;
(g) the Series 2 Class B Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount, if
any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 2 Term AA Advance, converted into Dollars
at the relevant Dollar Currency Exchange Rate;
(h) the Series 3 Class B Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount, if
any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 3 Term AA Advance, converted into Euro at
the Euro Currency Exchange Rate;
(i) the Series 4 Class B Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount, if
any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 4 Term AA Advance;
(j) the Series 1 Class C Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount, if
any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 1 Term BBB Advance, converted into Dollars
at the relevant Dollar Currency Exchange Rate;
(k) the Series 2 Class C Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount, if
any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 2 Term BBB Advance, converted into Dollars
at the relevant Dollar Currency Exchange Rate;
25
(l) the Series 3 Class C Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount,
if any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 3 Term BBB Advance, converted into Euro
at the Euro Currency Exchange Rate;
(m) the Series 4 Class C Seventh Issuer Notes shall be redeemed on
each Interest Payment Date in an amount equal to the amount, if
any, repaid on that Interest Payment Date in respect of the
Seventh Issuer Series 4 Term BBB Advance.
26
SCHEDULE 3
FORM OF SEVENTH ISSUER QUARTERLY REPORT
PERMANENT FINANCING (NO. 7) PLC
PERIOD ENDED THIS QUARTER ({POUND})
INTERCOMPANY LOAN BALANCES
Total intercompany loan balance
Last Quarter Closing balance
Repayments
New Term Advances
Cash Accumulated
---------------------------
Closing Balance
===========================
CASH ACCUMULATION LEDGER
Opening Balance
Losses this Quarter
Principal Received
Principal paid
---------------------------
Closing Balance
===========================
AVAILABLE CREDIT ENHANCEMENT
Reserve Fund at closing (23/03/2005)
Last Quarter Closing Reserve Fund
Replenishments this quarter
Drawings to make a bullet repayment
Other drawings
---------------------------
Closing Reserve Fund Balance
===========================
Target Reserve Fund
===========================
PRINCIPAL DEFICIENCY LEDGER AAA AA BBB
Opening PDL Balance
Losses this Quarter
PDL top up from Revenue Income
--------------------------- -------------------- --------------------
Closing PDL Balance
=========================== ==================== ====================
SUBORDINATED LOANS OUTSTANDING
Outstanding start up loan balance
Last Quarter Closing Outstanding
Accrued Interest
New Loans
Repayments Made
---------------------------
Closing Balance
===========================
27
PERMANENT FINANCING (NO. 6) PLC
NOTES OUTSTANDING
PERIOD ENDED
SERIES 1 CLASS A SERIES 2 CLASS A SERIES 3 CLASS A SERIES 4 CLASS A SERIES 5 CLASS A
Xxxxx'x Current Rating P-1 Aaa Aaa Aaa Aaa
Fitch Current Rating F1+ AAA AAA AAA AAA
S&P Current Rating A-1+ AAA AAA AAA AAA
SERIES 1 CLASS B SERIES 2 CLASS B SERIES 3 CLASS B SERIES 4 CLASS B
Xxxxx'x Current Rating Aa3 Aa3 Aa3 Aa3
Fitch Current Rating AA AA AA AA
S&P Current Rating AA AA AA AA
SERIES 1 CLASS C SERIES 2 CLASS C SERIES 3 CLASS C SERIES 4 CLASS C
Xxxxx'x Current Rating Xxx0 Xxx0 Xxx0 Xxx0
Fitch Current Rating BBB BBB BBB BBB
S&P Current Rating BBB BBB BBB BBB
SERIES 1 CLASS A SERIES 2 CLASS A SERIES 3 CLASS A SERIES 4 CLASS A SERIES 5 CLASS A
Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note Principal
SERIES 1 CLASS B SERIES 2 CLASS B SERIES 3 CLASS B SERIES 4 CLASS B
Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note Principal
SERIES 1 CLASS C SERIES 2 CLASS C SERIES 3 CLASS C SERIES 4 CLASS C
Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note Principal
SERIES 1 CLASS A SERIES 2 CLASS A SERIES 3 CLASS A SERIES 4 CLASS A SERIES 5 CLASS A
Note Interest Margins
Step Up Dates
Step Up Margins
SERIES 1 CLASS B SERIES 2 CLASS B SERIES 3 CLASS B SERIES 4 CLASS B
Note Interest Margins
Step Up Dates
Step Up Margins
SERIES 1 CLASS C SERIES 2 CLASS C SERIES 3 CLASS C SERIES 4 CLASS C
Note Interest Margins
Step Up Dates
Step Up Margins
28
SERIES 1 CLASS A SERIES 2 CLASS A SERIES 3 CLASS A SERIES 4 CLASS A SERIES 5 CLASS A
Interest Payment Cycle
Interest Payment Date
Next Interest Payment Date
SERIES 1 CLASS B SERIES 2 CLASS B SERIES 3 CLASS B SERIES 4 CLASS B
Interest Payment Cycle
Interest Payment Date
Next Interest Payment Date
SERIES 1 CLASS C SERIES 2 CLASS C SERIES 3 CLASS C SERIES 4 CLASS C
Interest Payment Cycle
Interest Payment Date
Next Interest Payment Date
29
SIGNATORIES
SEVENTH ISSUER CASH MANAGER
SIGNED by )
as attorney for and on behalf of ) ............................
HALIFAX PLC in the presence of: ) (as attorney as aforesaid)
Witness's signature:.......................
Name: .......................
Address: .......................
SEVENTH ISSUER
SIGNED by )
as attorney for and on behalf of )
PERMANENT FINANCING (NO. 7) PLC ) ............................
in the presence of: ) (as attorney as aforesaid)
Witness's signature:.......................
Name: .......................
Address: .......................
SECURITY TRUSTEE
SIGNED by )
for and on behalf of )
THE BANK OF NEW YORK ) ............................
30
