DRAFT: (1) {circle}.01.04
FOURTH ISSUER DEED OF CHARGE
DATED [{circle}]
PERMANENT FINANCING (NO. 4) PLC
AND
THE BANK OF NEW YORK
AND
HALIFAX PLC
AND
CITIBANK, N.A.
AND
CITIBANK, N.A., NEW YORK BRANCH
AND
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
AND
STRUCTURED FINANCE MANAGEMENT LIMITED
AND
[ISSUER SWAP PROVIDERS]
XXXXX & XXXXX
London
CONTENTS
CLAUSE PAGE
1. Interpretation...........................................................2
2. Fourth Issuer's Covenant to Pay..........................................3
3. Security and Declaration of Trust........................................3
4. Release of Fourth Issuer Charged Property................................5
5. Payments out of the Fourth Issuer Accounts, Authorised Investments
and Application of Cash prior to Enforcement.............................6
6. Payments out of the Fourth Issuer Accounts upon Enforcement..............8
7. Conflict................................................................17
8. The Security Trustee's Powers...........................................18
9. Receiver................................................................21
10. Protection of Third Parties.............................................24
11. Protection of Security Trustee and Receiver.............................24
12. Expenses and Indemnity..................................................25
13. Protection of Security..................................................27
14. Crystallisation.........................................................27
15. Power of Attorney, etc..................................................29
16. Other Security, etc.....................................................29
17. Avoidance of Payments...................................................30
18. Set Off.................................................................31
19. Execution of Documents..................................................31
20. Exercise of Certain Rights..............................................31
21. Covenants and Warranties................................................33
22. Supplements to the Trustee Acts.........................................37
23. Supplemental provisions regarding the Security Trustee..................43
24. Remuneration and Indemnification of the Security Trustee................47
25. Appointment of New Security Trustee and removal of Security Trustee.....48
26. Retirement of Security Trustee..........................................50
27. Trust Indenture Act prevails............................................50
28. Notices and Demands.....................................................50
29. Further Provisions......................................................52
30. Choice of Law...........................................................53
SCHEDULE
1. Power of Attorney.......................................................60
2. Form of Notice of Assignment and Consent to Assignment..................62
Signatories...................................................................55
THIS THIRD ISSUER DEED OF CHARGE is made on [{circle}], 2004
BETWEEN:
(1) PERMANENT FINANCING (NO. 4) PLC, (registered number 4988201) a public
limited company incorporated under the laws of England and Wales whose
registered office is at Xxxxxxxxx House, Guildhall Yard, London EC2V 5AE
(the FOURTH ISSUER);
(2) 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 the Security Trustee;
(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 the Note Trustee;
(4) CITIBANK, N.A., acting through its office is at 0 Xxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX and acting in its capacity as the Agent Bank;
(5) CITIBANK, N.A., acting through its office is at 0 Xxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX and acting in its capacity as the Principal Paying Agent;
(6) CITIBANK, N.A., acting through its office is at 0 Xxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX and acting in its capacity as the Registrar;
(7) CITIBANK, N.A., acting through its office is at 0 Xxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX and acting in its capacity as the Transfer Agent;
(8) HALIFAX PLC, a public limited company incorporated under the laws of
England and Wales whose registered office is at Trinity Road, Halifax,
West Yorkshire HX1 2RG acting in its capacity as the Fourth Issuer Cash
Manager;
(9) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND, established by an Act
of the Parliament of Scotland in 1695, as amended, acting through its
office situated at 00 Xxxxxxxxxx Xxxxxx, Xxxxx XX0 0XX, and acting in its
capacity as the Fourth Issuer Account Bank;
(10) CITIBANK, N.A., NEW YORK BRANCH, whose principal office is at 14th Floor,
Xxxx 0, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 acting in its capacity
as the U.S. Paying Agent;
(11) [ISSUER SWAP PROVIDER(S)]; and
(12) STRUCTURED FINANCE MANAGEMENT LIMITED, (registered number 3853947), whose
registered office is at Xxxxxxxxx House, Guildhall Yard, London EC2V 5AE
acting in its capacity as the Corporate Services Provider under the terms
of the Fourth Issuer Corporate Services Agreement.
WHEREAS:
(A) This Deed secures and will secure, inter alia, the Fourth Issuer Secured
Obligations.
(B) The Fourth Issuer will on the date of this Deed issue the Fourth Issuer
Notes pursuant to the Fourth Issuer Trust Deed.
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(C) By the Fourth Issuer Paying Agent and Agent Bank Agreement, the Paying
Agents and the Agent Bank have agreed to provide certain agency services
on behalf of the Fourth Issuer for the benefit of the Noteholders.
(D) By the Fourth Issuer Cash Management Agreement, the Fourth Issuer Cash
Manager has agreed to act as cash manager and to provide certain
administration and cash management services to the Fourth Issuer.
(E) By the Fourth Issuer Bank Account Agreement, the Fourth Issuer Account
Bank has agreed to provide certain bank account services to the Fourth
Issuer.
(F) By the Series 1 Fourth Issuer Swap Agreements, each Series 1 Fourth
Issuer Swap Provider has agreed to enter into dollar/sterling currency
swaps with the Fourth Issuer in relation to the Series 1 Fourth Issuer
Notes.
(G) By the Series 2 Fourth Issuer Swap Agreements, each Series 2 Fourth
Issuer Swap Provider has agreed to enter into dollar/sterling currency
swaps with the Fourth Issuer in relation to the Series 2 Fourth Issuer
Notes.
(H) By the Series 3 Fourth Issuer Swap Agreements, each Series 3 Fourth
Issuer Swap Provider has agreed to enter into dollar/sterling currency
swaps with the Fourth Issuer in relation to the Series 3 Fourth Issuer
Notes.
(I) By the Series 4 Fourth Issuer Swap Agreements, the Series 4 Fourth Issuer
Swap Provider has agreed to enter into euro/sterling currency swaps with
the Fourth Issuer in relation to the Series 4 Class A1 Fourth Issuer
Notes, the Series 4 Class B Fourth Issuer Notes and the Series 4 Class C
Fourth Issuer Notes.
(J) By the Series 5 Fourth Issuer Swap Agreements, the Series 5 Fourth Issuer
Currency Swap Provider has agreed to enter into euro/sterling currency
swaps with the Fourth Issuer in relation to the Series 5 Class B Fourth
Issuer Notes and the Series 5 Class C Fourth Issuer Notes.
(K) By the Series 5 Class A Fourth Issuer Swap Agreement, the Series 5 Class
A Fourth Issuer Swap Provider has agreed to enter into an interest rate
swap with the Fourth Issuer in relation to the Series 5 Class A Fourth
Issuer Notes.
(L) By the Fourth Issuer Corporate Services Agreement, the Corporate Services
Provider has agreed to act as corporate services provider to the Fourth
Issuer.
IT IS AGREED as follows:
1. INTERPRETATION
The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Deed and dated [{circle}],
2004 (as the same may be amended, varied or supplemented from time to
time with the consent of the parties to this Deed) (the MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) and the fourth issuer master
definitions and construction schedule signed for the purposes of
identification by Xxxxx & Xxxxx and Xxxxxx Xxxxxx Xxxxx & Xxxx on
[{circle}], 2004, (as the same may be amended, varied or supplemented
from time to time) (the FOURTH ISSUER MASTER DEFINITIONS AND CONSTRUCTION
SCHEDULE) are expressly and specifically incorporated into this Deed and,
accordingly, the expressions defined in the Master Definitions and
Construction Schedule (as so amended, varied or supplemented from time to
time) and the Fourth Issuer Master Definitions and Construction
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Schedule shall, except where the context otherwise requires and save
where otherwise defined herein, have the same meanings in this Deed and
this Deed shall be construed in accordance with the interpretation
provisions set out in CLAUSE 2 (Interpretation and Construction) of the
Fourth Issuer Master Definitions and Construction Schedule.
2. FOURTH ISSUER'S COVENANT TO PAY
The Fourth Issuer covenants with and undertakes to the Security Trustee
for itself and on trust for the Fourth Issuer Secured Creditors that it
will, subject to the provisions of the Fourth Issuer Transaction
Documents:
(a) duly and punctually pay and discharge all monies and liabilities
whatsoever which now are or at any time hereafter may (whether
before or after demand) become due and payable to the Security
Trustee (whether for its own account or as trustee for the Fourth
Issuer Secured Creditors) or any of the other Fourth Issuer
Secured Creditors by the Fourth Issuer whether actually or
contingently, under this Deed or any other Fourth Issuer
Transaction Document; and
(b) observe, perform and satisfy all its other obligations and
liabilities under this Deed and/or any other Fourth Issuer
Transaction Document.
3. SECURITY AND DECLARATION OF TRUST
3.1 CONTRACTUAL RIGHTS
The Fourth Issuer, by way of first fixed security for the payment or
discharge of the Fourth Issuer Secured Obligations, subject to CLAUSE 4
(Release of Fourth Issuer Charged Property), hereby assigns to the
Security Trustee all of its right, title, interest and benefit, present
and future, in, to and under the Fourth Issuer Transaction Documents
including, without limitation, all rights to receive payment of any
amounts which may become payable to the Fourth Issuer thereunder and all
payments received by the Fourth Issuer thereunder including, without
limitation, all rights to serve notices and/or make demands thereunder
and/or to take such steps as are required to cause payments to become due
and payable thereunder and all rights of action in respect of any breach
thereof and all rights to receive damages or obtain other relief in
respect thereof.
3.2 FOURTH ISSUER ACCOUNTS
The Fourth Issuer, by way of first fixed security for the payment or
discharge of the Fourth Issuer Secured Obligations, subject to CLAUSE 4
(Release of Fourth Issuer Charged Property), hereby assigns to the
Security Trustee all its right, title, interest and benefit, present and
future, in and to all moneys now or at any time hereafter standing to the
credit of the Fourth Issuer Accounts, together with all interest accruing
from time to time thereon and the debt represented thereby.
3.3 AUTHORISED INVESTMENTS
The Fourth Issuer, by way of first fixed security for the payment or
discharge of the Fourth Issuer Secured Obligations, subject to CLAUSE 4
(Release of Fourth Issuer Charged Property), hereby charges by way of
first fixed charge in favour of the Security Trustee all its right, title,
interest and benefit, present and future, in and to such Authorised
Investments to be made from time to time by or on behalf of the Fourth
Issuer using moneys standing to the credit of the Fourth Issuer Accounts
and all moneys, income and proceeds payable thereunder or
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accrued thereon and the benefit of all covenants relating thereto and all
rights and remedies for enforcing the same.
3.4 FLOATING CHARGE
The Fourth Issuer, by way of security for the payment or discharge of the
Fourth Issuer Secured Obligations, subject to CLAUSE 4 (Release of Fourth
Issuer Charged Property), hereby charges to the Security Trustee by way of
first floating charge the whole of its undertakings and all its property
and assets whatsoever and wheresoever, present and future, including
without limitation its uncalled capital, other than any property or assets
from time to time or for the time being by CLAUSES 3.1 (Contractual
Rights) to CLAUSE 3.3 (Authorised Investments) (inclusive) effectively
charged by way of fixed charge or otherwise effectively assigned as
security. The floating charge hereby created is a qualifying floating
charge for the purpose of paragraph 14 of Schedule B1 of the Insolvency
Act 1986.
3.5 FULL TITLE GUARANTEE
Each of the dispositions, assignments or charges over property effected in
or pursuant to CLAUSES 3.1 (Contractual Rights) to 3.4 (Floating Charge)
(inclusive) is made with full title guarantee.
3.6 ACKNOWLEDGEMENTS AND UNDERTAKINGS
Each of the Fourth Issuer Secured Creditors hereby acknowledges the
assignments, charges and other security interests made or granted by the
foregoing provisions of this CLAUSE 3 and undertakes to the Security
Trustee not to do anything inconsistent with the security given under or
pursuant to this Deed or knowingly to prejudice the security granted to
the Security Trustee pursuant to this CLAUSE 3 or the Fourth Issuer
Charged Property or the Security Trustee's interest therein provided that,
without prejudice to CLAUSE 9 (Receiver), nothing in this Deed shall be
construed as limiting the rights exercisable by the aforesaid parties in
accordance with the terms of the Fourth Issuer Transaction Documents.
3.7 DECLARATION OF TRUST
Each of the Fourth Issuer Secured Creditors hereby declares the Security
Trustee, and the Security Trustee hereby declares itself, trustee of all
the covenants, undertakings, charges, assignments, assignations and other
security interests made or given or to be made or given under or pursuant
to this Deed and the other Fourth Issuer Transaction Documents for the
Fourth Issuer Secured Creditors in respect of the Fourth Issuer Secured
Obligations owed to each of them respectively upon and subject to the
terms and conditions of this Deed.
3.8 SECURITY TRUSTEE'S DISCRETION
Subject to CLAUSE 23.6 (Consent of Security Trustee), without prejudice to
the rights of the Security Trustee after the security created under this
Deed has become enforceable, the Fourth Issuer hereby authorises the
Security Trustee, prior to the security created by this Deed becoming
enforceable, to exercise, or refrain from exercising, all rights, powers,
authorities, discretions and remedies under or in respect of the Fourth
Issuer Transaction Documents referred to in CLAUSE 3.1 (Contractual
Rights) in such manner as the Security Trustee in its absolute discretion
shall think fit. For the avoidance of doubt, the Security Trustee shall
not be required to have regard to the interests of the Fourth Issuer in
the exercise or non-exercise of any such rights, powers, authorities,
discretions and remedies or to comply with any direction given by the
Fourth Issuer in relation thereto.
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4. RELEASE OF FOURTH ISSUER CHARGED PROPERTY
4.1 PRIOR TO PAYMENT OR DISCHARGE OF FOURTH ISSUER SECURED OBLIGATIONS
(a) Except to the extent expressly provided in this CLAUSE 4, the Security
Trustee shall, release, reassign or discharge the Fourth Issuer Charged
Property or any part thereof only upon receipt of a written request from
the Fourth Issuer accompanied by (i) an Officers' Certificate and (ii)
certificates of independent parties in accordance with Sections 314(c) and
314(d)(1) of the Trust Indenture Act (the INDEPENDENT CERTIFICATES) or an
Opinion of Counsel to the effect that the Trust Indenture Act does not
require any such Independent Certificates;
(b) Prior to the release of any part of the Fourth Issuer Charged Property,
the Fourth Issuer shall, in addition to any obligation imposed in this
CLAUSE 4.1 or elsewhere in this Deed, furnish to the Security Trustee an
Officers' Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value of that part of the Fourth
Issuer Charged Property to be so released. The officers so certifying may
consult with, and may conclusively rely upon a certificate as to the fair
value of such property provided to such officers by an internationally
recognised financial institution with expertise in such matters;
(c) Whenever the Fourth Issuer is required to furnish to the Security Trustee
an Officers' Certificate certifying or stating the opinion of any
signatory thereof as to the matters described in the preceding paragraph,
the Fourth Issuer shall also deliver to the Security Trustee an
Independent Certificate as to the same matters, if the fair value of that
part of the Fourth Issuer Charged Property to be so released (and of all
other such property made the basis of any such release since the
commencement of the Third Issuer's then current fiscal year, as set forth
in the certificates delivered pursuant to this CLAUSE 4.1), is 10 per
cent. or more of the Principal Amount Outstanding of the Fourth Issuer
Notes, but such Independent Certificate need not be furnished with respect
to any property so released if the fair value thereof as set forth in the
related Officers' Certificate is less than U.S.$25,000 or less than one
per cent. of the Principal Amount Outstanding of the Fourth Issuer Notes;
(d) Whenever any part of the Fourth Issuer Charged Property is to be released
from the security constituted by this Deed, the Fourth Issuer shall also
furnish to the Security Trustee an Officer's Certificate certifying or
stating the opinion of each person signing such certificate that in the
opinion of such person the proposed release will not impair the security
under this Deed in contravention of the provisions hereof; and
(e) Notwithstanding anything to the contrary contained herein, the Fourth
Issuer may (i) make cash payments out of the Fourth Issuer Account
relating to the Fourth Issuer Notes as and to the extent permitted or
required by the Fourth Issuer Transaction Documents and (ii) take any
other action permitted or required by the Fourth Issuer Transaction
Documents not inconsistent with the Trust Indenture Act.
4.2 ON PAYMENT OR DISCHARGE OF FOURTH ISSUER SECURED OBLIGATIONS
Upon the irrevocable and unconditional payment or discharge (or any
combination of the foregoing) of all the Fourth Issuer Secured
Obligations, the Security Trustee shall, at the written request and cost
of the Fourth Issuer, release, reassign or discharge the Fourth Issuer
Charged Property to, or to the order of, the Fourth Issuer.
4.3 DISPOSAL OF AUTHORISED INVESTMENTS
Upon the Fourth Issuer Cash Manager, on behalf of the Fourth Issuer and
the Security Trustee, making a disposal of any Authorised Investment
charged pursuant to CLAUSE 3.3
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(Authorised Investments), the Security Trustee shall, if so requested in
writing by and at the sole cost and expense (on an indemnity basis) of the
Fourth Issuer, but without being responsible for any loss, costs, claims
or liabilities whatsoever occasioned and howsoever arising by so acting
upon such request, release, reassign or discharge from the encumbrances
constituted by this Deed the relevant Authorised Investments, provided
that the proceeds of such disposal are paid into an account charged
pursuant to CLAUSES 3.2 (Fourth Issuer Accounts) in accordance with CLAUSE
5.5 (Authorised Investments).
4.4 WITHDRAWALS FROM FOURTH ISSUER ACCOUNTS
From time to time there shall be deemed to be released from the
encumbrances constituted by this Deed all amounts which the Fourth Issuer
Cash Manager, on behalf of the Fourth Issuer and the Security Trustee, is
permitted to withdraw from the Fourth Issuer Accounts pursuant to CLAUSES
5.2 (Pre-Enforcement Priorities of Payment) and CLAUSE 5.3 (Payments under
the Fourth Issuer Cash Management Agreement) and any such release will
take effect immediately upon the relevant withdrawal being made provided
that where the relevant amount is transferred to another bank account of
the Fourth Issuer such bank account shall thereupon become subject to the
encumbrances constituted by this Deed.
5. PAYMENTS OUT OF THE FOURTH ISSUER ACCOUNTS, AUTHORISED INVESTMENTS AND
APPLICATION OF CASH PRIOR TO ENFORCEMENT
5.1 FOLLOWING SERVICE OF A FOURTH ISSUER NOTE ACCELERATION NOTICE
No payment, transfer or withdrawal from the Fourth Issuer Accounts may be
made under this CLAUSE 5 at any time after a Fourth Issuer Note
Acceleration Notice has been served in respect of the Fourth Issuer.
5.2 PRE-ENFORCEMENT PRIORITIES OF PAYMENT
Notwithstanding the security rights created by or pursuant to CLAUSE 3
(Security and Declaration of Trust), but prior to the service of a Fourth
Issuer Note Acceleration Notice on the Fourth Issuer, the Fourth Issuer
Cash Manager, on behalf of the Fourth Issuer and the Security Trustee,
shall:
(a) withdraw, or shall instruct the Fourth Issuer Account Bank or cause
the Fourth Issuer Account Bank to be instructed, to withdraw (unless
the intended recipient of the relevant payment agrees otherwise)
moneys from the Fourth Issuer Accounts (subject to CLAUSE 5.8 (VAT)
below) to be applied in the order of priority on the specified dates
(and in each case only if and to the extent that payments or
provisions of a higher order of priority have been made in full and
to the extent that such withdrawal does not cause the Fourth Issuer
Accounts to become overdrawn) as set out in Schedule 2 of the Fourth
Issuer Cash Management Agreement (the FOURTH ISSUER PRE-ENFORCEMENT
PRIORITY OF PAYMENTS); and
(b) instruct the Fourth Issuer Swap Providers to pay to the specified
bank account of the Principal Paying Agent amounts due to be paid on
dates specified in the Fourth Issuer Swap Agreements.
5.3 PAYMENTS UNDER THE FOURTH ISSUER CASH MANAGEMENT AGREEMENT
Notwithstanding the security rights created by or pursuant to CLAUSE 3
(Security and Declaration of Trust), but prior to the service of a Fourth
Issuer Note Acceleration Notice on the Fourth Issuer, the Fourth Issuer
Cash Manager, on behalf of the Fourth Issuer and the
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Security Trustee, shall withdraw, or shall instruct the Fourth Issuer
Account Bank or cause the Fourth Issuer Account Bank to be instructed, to
withdraw (unless the intended recipient of the relevant payment agrees
otherwise) moneys from the Fourth Issuer Accounts for application on any
Business Day in making any payments due to be made subject to and in
accordance with the Fourth Issuer Cash Management Agreement (but only to
the extent that such withdrawal does not cause the Fourth Issuer Accounts
to become overdrawn).
5.4 INVESTMENTS IN AUTHORISED INVESTMENTS
The Security Trustee may request the Fourth Issuer Cash Manager to (or
the Fourth Issuer Cash Manager may request the Security Trustee to)
invest in the names of the Security Trustee and the Fourth Issuer,
jointly, moneys standing from time to time and at any time standing to
the credit of the Fourth Issuer Accounts in Authorised Investments in
accordance with the following provisions:
(a) any costs properly and reasonably incurred in making and changing
investments will be reimbursed to the Fourth Issuer Cash Manager
and the Security Trustee; and
(b) all income or proceeds following the disposal or maturity of
Authorised Investments shall be credited to the Fourth Issuer
Accounts.
5.5 AUTHORISED INVESTMENTS
Notwithstanding the security rights created by or pursuant to CLAUSE 3
(Security and Declaration of Trust), Authorised Investments may, on any
Business Day, be sold or redeemed or disposed of or realised or otherwise
deposited subject always to the other provisions hereof (including without
limitation CLAUSES 3.3 (Authorised Investments) and 4.3 (Disposal of
Authorised Investments)).
5.6 MANAGEMENT AND APPLICATION OF FUNDS
The Fourth Issuer shall take or cause to be taken such action as may from
time to time be necessary on its part to ensure that the Fourth Issuer
Accounts shall from time to time be credited with all amounts received by
the Fourth Issuer and falling within any of the following categories:
(a) amounts received by the Fourth Issuer from or on behalf of Funding
1 pursuant to the provisions of the Fourth Issuer Intercompany
Loan Agreement;
(b) interest received on the Fourth Issuer Accounts;
(c) amounts received by the Fourth Issuer from the Swap Providers
under the Swap Agreements;
(d) the proceeds arising from the disposal of any Authorised
Investments and any and all income or other distributions received
by the Fourth Issuer in respect thereof or arising from the
proceeds of any Authorised Investments;
(e) amounts received by the Fourth Issuer from the Security Trustee in
its capacity as security trustee under the Funding 1 Deed of
Charge or a Receiver following the service of an Intercompany Loan
Acceleration Notice; and
(f) such other payments received by the Fourth Issuer as are, or ought
in accordance with this Deed to be, comprised in the Fourth Issuer
Charged Property.
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5.7 ENFORCEMENT WHEN NOT ALL AMOUNTS DUE AND PAYABLE
If the Security Trustee enforces the Fourth Issuer Security at a time
when either no amounts or not all amounts owing in respect of the Fourth
Issuer Secured Obligations have become due and payable, the Security
Trustee (or a Receiver) may, for so long as no such amounts or not all
such amounts have become due and payable, pay any monies referred to in
CLAUSE 6 (Payments out of the Fourth Issuer Accounts Upon Enforcement)
into, and retain such monies in, an interest-bearing account (a RETENTION
ACCOUNT) to be held by it as security and applied by it in accordance
with CLAUSE 6 (Payments out of the Fourth Issuer Accounts Upon
Enforcement) as and when any of the amounts referred to therein become
due and payable.
5.8 VAT
If any sums which are payable by the Fourth Issuer under CLAUSE 5.2 (Pre-
Enforcement Priorities of Payments) or CLAUSE 6 (Payments out of Fourth
Issuer Accounts upon Enforcement) of this Deed are subject to VAT, the
Fourth Issuer shall make payment of the amount in respect of VAT to the
relevant person in accordance with the order of priorities set out in
those clauses.
6. PAYMENTS OUT OF THE FOURTH ISSUER ACCOUNTS UPON ENFORCEMENT
6.1 AFTER A FOURTH ISSUER NOTE ACCELERATION NOTICE
From and including the time when a Fourth Issuer Note Acceleration Notice
(which has not been withdrawn) has been served on the Fourth Issuer:
(a) no amount may be withdrawn from the Fourth Issuer Accounts without
the prior written consent of the Security Trustee; and
(b) if not already crystallised, any charge created under or pursuant
to this Deed, which is a floating charge, shall immediately and
without further action on the part of the Security Trustee,
crystallise.
6.2 PAYMENT OF FOURTH ISSUER REVENUE RECEIPTS AFTER SERVICE OF A FOURTH
ISSUER NOTE ACCELERATION NOTICE BUT PRIOR TO THE SERVICE OF AN
INTERCOMPANY LOAN ACCELERATION NOTICE
From and including the time when a Fourth Issuer Note Acceleration Notice
has been served on the Fourth Issuer but prior to the service of an
Intercompany Loan Acceleration Notice, all Fourth Issuer Revenue Receipts
received or recovered by the Security Trustee or any Receiver for the
benefit of the Fourth Issuer Secured Creditors in respect of the Fourth
Issuer Secured Obligations shall be held by the Security Trustee or any
Receiver, as the case may be, on trust to be applied in accordance with
CLAUSES 5.2 (Pre-Acceleration Priorities of Payment) to 5.6 (Management
and Application of Funds) (inclusive) and 5.7 (Enforcement when not all
Amounts due and payable) but as if:
(a) each of the references in the Fourth Issuer Pre-Enforcement
Revenue Priority of Payments to the Security Trustee included a
reference to any Receiver appointed by the Security Trustee;
(b) any reference in the Fourth Issuer Pre-Enforcement Revenue
Priority of Payments to an amount payable by the Fourth Issuer
which is not a Fourth Issuer Secured Obligation were deleted; and
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(c) CLAUSE 5.2 (Pre-Enforcement Priorities of Payment) and the Fourth
Issuer Pre-Enforcement Revenue Priority of Payments were expressed
to be subject to the provisions of CLAUSE 5.7 (Enforcement When Not
All Amounts Due and Payable).
6.3 PAYMENT OF FOURTH ISSUER PRINCIPAL RECEIPTS AFTER SERVICE OF A FOURTH
ISSUER NOTE ACCELERATION NOTICE BUT PRIOR TO THE SERVICE OF A FOURTH
ISSUER INTERCOMPANY LOAN ACCELERATION NOTICE
From and including the time when a Fourth Issuer Note Acceleration Notice
has been served on the Fourth Issuer but prior to the service of an
Intercompany Loan Acceleration Notice, all Fourth Issuer Principal
Receipts received or recovered by the Security Trustee or any Receiver
for the benefit of the Fourth Issuer Secured Creditors in respect of the
Fourth Issuer Secured Obligations shall be held by it on trust to be
applied (save to the extent required otherwise by law) on each Interest
Payment Date in the following order of priority (in each case only if and
to the extent that payments or provisions of a higher order of priority
have been made in full):
(a) first, pro rata and pari passu to repay the Fourth Issuer Class A
Notes as follows:
(i) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 1 Term AAA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 1 Class A Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 1 Class A Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 1 Class A Fourth Issuer Swap
Provider under the Series 1 Class A Fourth Issuer Swap;
(ii) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 2 Term AAA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 2 Class A Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 2 Class A Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 2 Class A Fourth Issuer Swap
Provider under the Series 2 Class A Fourth Issuer Swap;
(iii) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 3 Term AAA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 3 Class A Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 3 Class A Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 3 Class A Fourth Issuer Swap
Provider under the Series 3 Class A Fourth Issuer Swap;
(iv) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 4A1 Term
AAA Advance on each Funding 1 Interest Payment Date, shall
be paid by the Fourth Issuer to the Series 4 Class A Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 4 Class A1 Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 4 Class A Fourth Issuer Swap
Provider under the Series 4 Class A1 Fourth Issuer Swap;
(v) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 4A2 Term
AAA Advance on each Funding
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1 Interest Payment Date shall be applied by the Fourth Issuer
to redeem the Series 4 Class A2 Fourth Issuer Notes on such
Interest Payment Date; and
(vi) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 5 Term AAA
Advance on each Funding 1 Interest Payment Date shall be
applied by the Fourth Issuer to redeem the Series 5 Class A
Fourth Issuer Notes on such Interest Payment Date.
(b) secondly, pro rata and pari passu, to repay the Fourth Issuer
Class B Notes as follows:
(i) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 1 Term AA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 1 Class B Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 1 Class B Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 1 Class B Fourth Issuer Swap
Provider under the Series 1 Class B Fourth Issuer Swap;
(ii) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 2 Term AA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 2 Class B Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 2 Class B Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 2 Class B Fourth Issuer Swap
Provider under the Series 2 Class B Fourth Issuer Swap;
(iii) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 3 Term AA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 3 Class B Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 3 Class B Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 3 Class B Fourth Issuer Swap
Provider under the Series 3 Class B Fourth Issuer Swap
Agreement;
(iv) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 4 Term AA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 4 Class B Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 4 Class B Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 4 Class B Fourth Issuer Swap
Provider under the Series 4 Class B Fourth Issuer Swap; and
(v) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 5 Term AA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 5 Class B Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 5 Class B Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 5 Class B Fourth Issuer Swap
Provider under the Series 5 Class B Fourth Issuer Swap.
(c) thirdly, pro rata and pari passu, to repay the Fourth Issuer Class
B Notes as follows:
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(i) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 1 Term A
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 1 Class M Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 1 Class M Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 1 Class M Fourth Issuer Swap
Provider under the Series 1 Class M Fourth Issuer Swap;
(ii) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 2 Term A
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 2 Class M Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 2 Class M Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 2 Class M Fourth Issuer Swap
Provider under the Series 2 Class M Fourth Issuer Swap;
(iii) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 3 Term A
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 3 Class M Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 3 Class M Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 3 Class M Fourth Issuer Swap
Provider under the Series 3 Class B Fourth Issuer Swap
Agreement;
(iv) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 4 Term A
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 4 Class M Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 4 Class M Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 4 Class M Fourth Issuer Swap
Provider under the Series 4 Class M Fourth Issuer Swap; and
(v) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 5 Term A
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 5 Class M Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 5 Class M Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 5 Class M Fourth Issuer Swap
Provider under the Series 5 Class M Fourth Issuer Swap.
(d) fourthly, pro rata and pari passu to repay the Fourth Issuer Class
C Notes as follows:
(i) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 1 Term BBB
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 1 Class C Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 1 Class C Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 1 Class C Fourth Issuer Swap
Provider under the Series 1 Class C Fourth Issuer Swap;
(ii) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 2 Term BBB
Advance on each Funding 1
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Interest Payment Date, shall be paid by the Fourth Issuer to
the Series 1 Class C Fourth Issuer Swap Provider, and on each
Interest Payment Date the Series 2 Class C Fourth Issuer
Notes will be redeemed in amounts corresponding to the
principal exchange amounts (if any) received from the Series
2 Class C Fourth Issuer Swap Provider under the Series 2
Class C Fourth Issuer Swap;
(iii) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 3 Term BBB
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 3 Class C Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 3 Class C Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 3 Class C Fourth Issuer Swap
Provider under the Series 3 Class C Fourth Issuer Swap;
(iv) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 4 Term BBB
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 4 Class C Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 4 Class C Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 4 Class C Fourth Issuer Swap
Provider under the Series 4 Class C Fourth Issuer Swap; and
(v) any principal amounts received by the Fourth Issuer from
Funding 1 in respect of the Fourth Issuer Series 5 Term BBB
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fourth Issuer to the Series 5 Class C Fourth
Issuer Swap Provider, and on each Interest Payment Date the
Series 5 Class C Fourth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 5 Class C Fourth Issuer Swap
Provider under the Series 5 Class C Fourth Issuer Swap.
6.4 PAYMENT OF FOURTH ISSUER REVENUE RECEIPTS AND FOURTH ISSUER PRINCIPAL
RECEIPTS AFTER SERVICE OF A FOURTH ISSUER NOTE ACCELERATION NOTICE AND
SERVICE OF AN INTERCOMPANY LOAN ACCELERATION NOTICE
All Fourth Issuer Revenue Receipts and Fourth Issuer Principal Receipts
received or recovered by the Security Trustee or any Receiver, after the
service of a Fourth Issuer Note Acceleration Notice and after the service
of an Intercompany Loan Acceleration Notice, for the benefit of the
Fourth Issuer Secured Creditors in respect of the Fourth Issuer Secured
Obligations, shall be held by it in the Fourth Issuer Accounts on trust
to be applied (save to the extent required otherwise by law), on each
Interest Payment Date, in the following order of priority (and, in each
case, only if and to the extent that payments or provisions of a higher
order of priority have been made in full):
(a) first, to pay pro rata and pari passu amounts due to:
(i) the Security Trustee and any Receiver appointed by the
Security Trustee together with interest and any amount in
respect of VAT on those amounts and any amounts then due or
to become due to the Security Trustee and the Receiver under
the provisions of this Deed;
(ii) the Note Trustee together with interest and any amount in
respect of VAT on those amounts and any amounts then due or
to become due and payable to the Note Trustee under the
provisions of this Deed; and
12
(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 and
payable to them under the provisions of the Fourth Issuer
Paying Agent and Agent Bank Agreement;
(b) secondly, to pay pro rata and pari passu amounts due and payable
(together with any amount in respect of VAT on those amounts) to
the Fourth Issuer Cash Manager under the Fourth Issuer Cash
Management Agreement and to the Corporate Services Provider under
the Fourth Issuer Corporate Services Agreement and to the Fourth
Issuer Account Bank under the Fourth Issuer Bank Account
Agreement;
(c) thirdly, to pay pro rata and pari passu:
(i) amounts due to the Series 1 Class A Fourth Issuer Swap
Provider in respect of the Series 1 Class A Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 1 Class A Fourth
Issuer Swap Provider in respect of the Series 1 Class A
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 1 Class A Fourth Issuer Notes;
(ii) amounts due to the Series 2 Class A Fourth Issuer Swap
Provider in respect of the Series 2 Class A Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 2 Class A Fourth
Issuer Swap Provider in respect of the Series 2 Class A
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 2 Class A Fourth Issuer Notes;
(iii) amounts due to the Series 3 Class A Fourth Issuer Swap
Provider in respect of the Series 3 Class A Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 3 Class A Fourth
Issuer Swap Provider in respect of the Series 3 Class A
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 3 Class A Fourth Issuer Notes;
(iv) amounts due to the Series 4 Class A Fourth Issuer Swap
Provider in respect of the Series 4 Class A1 Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 4 Class A Fourth
Issuer Swap Provider in respect of the Series 4 Class A1
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 4 Class A1 Fourth Issuer Notes;
(v) interest and principal on the Series 4 Class A2 Fourth
Issuer Notes;
(vi) amounts due to the Series 5 Class A Fourth Issuer Swap
Provider in respect of the Series 5 Class A Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 5 Class A Fourth
Issuer Swap Provider in respect of the Series 5 Class A
Fourth Issuer Swap to pay interest due and payable on the
Series 5 Class A Fourth Issuer Notes; and
13
(vii) principal on the Series 5 Class A Fourth Issuer Notes;
(d) fourthly, to pay pro rata and pari passu:
(i) amounts due to the Series 1 Class B Fourth Issuer Swap
Provider in respect of the Series 1 Class B Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 1 Class B Fourth
Issuer Swap Provider in respect of the Series 1 Class B
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 1 Class B Fourth Issuer Notes;
(ii) amounts due to the Series 2 Class B Fourth Issuer Swap
Provider in respect of the Series 2 Class B Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 2 Class B Fourth
Issuer Swap Provider in respect of the Series 2 Class B
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 2 Class B Fourth Issuer Notes;
(iii) amounts due to the Series 3 Class B Fourth Issuer Swap
Provider in respect of the Series 3 Class B Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 3 Class B Fourth
Issuer Swap Provider in respect of the Series 3 Class B
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 3 Class B Fourth Issuer Notes;
(iv) amounts due to the Series 4 Class B Fourth Issuer Swap
Provider in respect of the Series 4 Class B Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 4 Class B Fourth
Issuer Swap Provider in respect of the Series 4 Class B
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 4 Class B Fourth Issuer Notes; and
(v) amounts due to the Series 5 Class B Fourth Issuer Swap
Provider in respect of the Series 5 Class B Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 5 Class B Fourth
Issuer Swap Provider in respect of the Series 5 Class B
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 5 Class B Fourth Issuer Notes;
(e) fifthly, to pay pro rata and pari passu:
(i) amounts due to the Series 1 Class B Fourth Issuer Swap
Provider in respect of the Series 1 Class M Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 1 Class M Fourth
Issuer Swap Provider in respect of the Series 1 Class M
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 1 Class M Fourth Issuer Notes;
14
(ii) amounts due to the Series 2 Class M Fourth Issuer Swap
Provider in respect of the Series 2 Class M Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 2 Class B Fourth
Issuer Swap Provider in respect of the Series 2 Class M
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 2 Class M Fourth Issuer Notes;
(iii) amounts due to the Series 3 Class M Fourth Issuer Swap
Provider in respect of the Series 3 Class M Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 3 Class M Fourth
Issuer Swap Provider in respect of the Series 3 Class M
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 3 Class M Fourth Issuer Notes;
(iv) amounts due to the Series 4 Class M Fourth Issuer Swap
Provider in respect of the Series 4 Class M Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 4 Class M Fourth
Issuer Swap Provider in respect of the Series 4 Class M
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 4 Class M Fourth Issuer Notes; and
(v) amounts due to the Series 5 Class M Fourth Issuer Swap
Provider in respect of the Series 5 Class M Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 5 Class M Fourth
Issuer Swap Provider in respect of the Series 5 Class M
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 5 Class M Fourth Issuer Notes;
(f) sixthly, to pay pro rata and pari passu:
(i) amounts due to the Series 1 Class C Fourth Issuer Swap
Provider in respect of the Series 1 Class C Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 1 Class C Fourth
Issuer Swap Provider in respect of the Series 1 Class C
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 1 Class C Fourth Issuer Notes;
(ii) amounts due to the Series 2 Class C Fourth Issuer Swap
Provider in respect of the Series 2 Class C Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 2 Class C Fourth
Issuer Swap Provider in respect of the Series 2 Class C
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 2 Class C Fourth Issuer Notes;
(iii) amounts due to the Series 3 Class C Fourth Issuer Swap
Provider in respect of the Series 3 Class C Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 3 Class C Fourth
Issuer
15
Swap Provider in respect of the Series 3 Class C Fourth
Issuer Swap to pay interest and principal due and payable on
the Series 3 Class C Fourth Issuer Notes;
(iv) amounts due to the Series 4 Class C Fourth Issuer Swap
Provider in respect of the Series 4 Class C Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 4 Class C Fourth
Issuer Swap Provider in respect of the Series 4 Class C
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 4 Class C Fourth Issuer Notes; and
(v) amounts due to the Series 5 Class C Fourth Issuer Swap
Provider in respect of the Series 5 Class C Fourth Issuer
Swap (including any termination payment but excluding any
related Fourth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 5 Class C Fourth
Issuer Swap Provider in respect of the Series 5 Class C
Fourth Issuer Swap to pay interest and principal due and
payable on the Series 5 Class C Fourth Issuer Notes;
(g) seventhly, to pay pro rata and pari passu amounts due to:
(i) the Series 1 Fourth Issuer Swap Provider, following a Fourth
Issuer Swap Provider Default or a Fourth Issuer Swap
Provider Downgrade Termination Event by the Series 1 Fourth
Issuer Swap Provider;
(ii) the Series 2 Fourth Issuer Swap Provider, following a Fourth
Issuer Swap Provider Default or a Fourth Issuer Swap
Provider Downgrade Termination Event by the Series 2 Fourth
Issuer Swap Provider;
(iii) the Series 3 Fourth Issuer Swap Provider, following a Fourth
Issuer Swap Provider Default or a Fourth Issuer Swap
Provider Downgrade Termination Event by the Series 3 Fourth
Issuer Swap Provider;
(iv) the Series 4 Fourth Issuer Swap Provider, following a Fourth
Issuer Swap Provider Default or a Fourth Issuer Swap
Provider Downgrade Termination Event by the Series 4 Fourth
Issuer Swap Provider;
(v) the Series 5 Class A Fourth Issuer Swap Provider, following
a Fourth Issuer Swap Provider Default or a Fourth Issuer
Swap Provider Downgrade Termination Event by the Series 5
Class A Fourth Issuer Swap Provider;
(vi) the Series 5 Class B Fourth Issuer Swap Provider, following
a Fourth Issuer Swap Provider Default or a Fourth Issuer
Swap Provider Downgrade Termination Event by the Series 5
Class B Fourth Issuer Swap Provider; and
(vii) the Series 5 Class C Fourth Issuer Swap Provider, following
a Fourth Issuer Swap Provider Default or a Fourth Issuer
Swap Provider Downgrade Termination Event by the Series 5
Class C Fourth Issuer Swap Provider.
16
7. CONFLICT
7.1 FOURTH ISSUER SECURED CREDITORS
Subject to CLAUSE 7.2 (Noteholders) and except as otherwise expressly
provided in this Deed, the Security Trustee shall have regard to the
interests of the Fourth Issuer Secured Creditors only as regards the
exercise and performance of all powers, rights, trusts, authorities,
duties and discretions of the Security Trustee in respect of the Fourth
Issuer Charged Property, under this Deed or any other Fourth Issuer
Transaction Document to which the Security Trustee is a party or the
rights or benefits in respect of which are comprised in the Fourth Issuer
Charged Property (except where specifically provided otherwise).
7.2 NOTEHOLDERS
(a) If (in the Security Trustee's sole opinion) there is or may be a conflict
of interest between the Class A Noteholders and any other Fourth Issuer
Secured Creditor, then, subject to Condition 11 of the Fourth Issuer
Notes, the Security Trustee will have regard to the interests of the Class
A Noteholders only;
(b) subject to paragraph (a) above, if (in the Security Trustee's sole
opinion) there is or may be a conflict of interest between the Class B
Noteholders and any other Fourth Issuer Secured Creditor then, subject to
Condition 11 of the Fourth Issuer Notes, the Security Trustee will have
regard to the interests of the Class B Noteholders only;
(c) subject to paragraphs (b) and (c) above, if (in the Security Trustee's
sole opinion) there is or may be a conflict of interest between the Class
C Noteholders and any other Fourth Issuer Secured Creditor then, subject
to Condition 11 of the Fourth Issuer Notes, the Security Trustee will have
regard to the interests of the Class C Noteholders only;
(d) subject to paragraphs (a) to (c) above and paragraphs (e) and (f) below,
if (in the Security Trustee's sole opinion) there is or may be a conflict
between the respective interests of the Fourth Issuer Swap Providers and
any of the other Fourth Issuer Secured Creditors, other than the
Noteholders, the Security Trustee will have regard to the interests of the
Fourth Issuer Swap Providers;
(e) subject to paragraph (f) below if, in the Security Trustee's sole opinion,
there is a conflict between the respective interests of the Fourth Issuer
Swap Providers then the Security Trustee will have regard to the interests
of the highest ranking swap providers (being the Series 1 Class A Fourth
Issuer Swap Provider, the Series 2 Class A Fourth Issuer Swap Provider,
the Series 3 Class A Fourth Issuer Swap Provider, the Series 4 Class A
Fourth Issuer Swap Provider and the Series 5 Class A Fourth Issuer Swap
Provider) only; and thereafter the Security Trustee will have regard to
the next highest ranking swap providers (being the Series 1 Class B Fourth
Issuer Swap Provider, the Series 2 Class B Fourth Issuer Swap Provider,
the Series 3 Class B Fourth Issuer Swap Provider, the Series 4 Class B
Fourth Issuer Swap Provider and the Series 5 Class B Fourth Issuer Swap
Provider);
(f) if, in the Security Trustee's sole opinion, there is a conflict between
the respective interests of the Fourth Issuer Swap Providers with the
equal ranking as set out in paragraph (e) above, then the Security Trustee
will have regard to the interests of the relevant Fourth Issuer Swap
Provider or Fourth Issuer Swap Providers in respect of the Fourth Issuer
Notes with the greatest principal amount outstanding; and
(g) subject to paragraphs (a) to (f) above, if (in the Security Trustee's sole
opinion) there is or may be a conflict between the respective interests of
any of the Fourth Issuer Secured
17
Creditors, other than the Noteholders and the Fourth Issuer Swap
Providers, the Security Trustee will have regard to the interests of the
Fourth Issuer Secured Creditor who ranks highest in the order of priority
of payments set out in CLAUSE 6.4 (Payment of Fourth Issuer Revenue
Receipts and Fourth Issuer Principal Receipts after service of a Fourth
Issuer Note Acceleration Notice and service of a Fourth Issuer
Intercompany Loan Acceleration Notice) above.
7.3 ACKNOWLEDGEMENT
Each of the Fourth Issuer Secured Creditors hereby acknowledges and
concurs with the provisions of CLAUSES 7.1 (Fourth Issuer Secured
Creditors) and 7.2 (Noteholders) and each of them agrees that it shall
have no claim against the Security Trustee as a result of the application
thereof.
8. THE SECURITY TRUSTEE'S POWERS
8.1 PRIOR NOTIFICATION
The Security Trustee shall, if reasonably practicable, give prior
notification to the Seller of the Security Trustee's intention to enforce
the security created by this Deed, provided always that the failure of
the Security Trustee to provide such notification shall not prejudice the
ability of the Security Trustee to enforce the security created by this
Deed.
8.2 ENFORCEABLE
Without prejudice to the provisions of CLAUSES 8.5 (Law of Property Act
1925) and 9.1 (Appointment), (a) the security created under this Deed
shall become immediately enforceable and (b) the power of sale and other
powers conferred by Section 101 of the Law of Property Act 1925 (the 1925
ACT), as varied or amended by this Deed, shall, in accordance with this
CLAUSE 8, be exercisable by the Security Trustee, in each case at any time
following service of a Fourth Issuer Note Acceleration Notice or, if there
are no Fourth Issuer Notes outstanding, following a default in payment of
any other Fourth Issuer Secured Obligations on its due date. Without
prejudice to the effectiveness of any service of the Fourth Issuer Note
Acceleration Notice, the Note Trustee shall serve a copy of any Fourth
Issuer Note Acceleration Notice on each of the Fourth Issuer Secured
Creditors, Funding 1 and the Rating Agencies.
8.3 AMOUNTS DUE
Notwithstanding any other provision of this Deed, all amounts owing under
the Fourth Issuer Secured Obligations shall be deemed to have become due
for the purposes of Section 101 of the 1925 Act and (to the extent
applicable) the statutory power of sale and of appointing a Receiver which
are conferred on the Security Trustee under the 1925 Act (as varied or
extended by this Deed) only (and for no other purpose) and all other
powers shall be deemed to arise immediately after execution of this Deed
but shall only become enforceable in accordance with CLAUSE 8.2
(Enforceable) above. For the avoidance of doubt, the Security Trustee
shall not be required to have regard to the interests of the Fourth Issuer
in the exercise of its rights, powers, authorities, discretions and
remedies under this Deed.
8.4 POWER OF SALE
Section 103 of the 1925 Act shall not apply in relation to any of the
charges contained in this Deed and the statutory power of sale (as
extended by this Deed) and all other powers shall be exercisable at any
time after service of a Fourth Issuer Note Acceleration Notice.
18
8.5 LAW OF PROPERTY ACT 1925
The provisions of the 1925 Act relating to the power of sale and the
other powers conferred by Section 101(1) and (2) are hereby extended in
relation to the Fourth Issuer (as if such extensions were contained
therein) to authorise the Security Trustee at its absolute discretion at
any time following the occurrence of a Fourth Issuer Note Event of
Default and subject to the Security Trustee being indemnified and/or
secured to its satisfaction in relation to the exercise of such powers:
(a) to make demand in the name of the Fourth Issuer Secured Creditors
or in its own right for any moneys and liabilities in respect of
the Fourth Issuer Charged Property;
(b) to sell, transfer, convey, vary or otherwise dispose of the Fourth
Issuer's title to or interest in the Fourth Issuer Charged
Property, and to do so for any shares, debentures or other
securities including, without limitation, any Authorised
Investments whatsoever comprising part thereof, or in
consideration of an agreement to pay all or part of the purchase
price at a later date or dates, or an agreement to make periodical
payments, whether or not the agreement is secured by an
Encumbrance or a guarantee, or for such other consideration
whatsoever as the Security Trustee may in its absolute discretion
think fit, and also to grant any option to purchase, and to effect
exchanges of, the whole or any part of the Fourth Issuer Charged
Property (and nothing shall preclude any such disposal being made
to a Fourth Issuer Secured Creditor);
(c) with a view to or in connection with the sale of the Fourth Issuer
Charged Property, to carry out any transaction, scheme or
arrangement which the Security Trustee may, in its absolute
discretion, consider appropriate;
(d) to insure the Fourth Issuer Charged Property against such risks
and for such amounts as the Security Trustee may in its absolute
discretion consider prudent; and
(e) to do all or any of the things or exercise all or any of the powers
which are mentioned or referred to in CLAUSE 9.6 (Powers) as if each
of them was expressly conferred on the Security Trustee by this Deed
and which may not be included in paragraphs (a) to (d) above.
8.6 DELEGATION TO RECEIVER
In addition and without prejudice to any of its statutory powers, the
Security Trustee may at any time by deed delegate to any Receiver all or
any of the extended powers of leasing, surrendering or accepting
surrenders of leases conferred on the Security Trustee by this Deed.
8.7 ADDITIONAL POWERS
The Security Trustee shall have the power to insure against any
liabilities or obligations arising:
(a) as a result of the Security Trustee acting or failing to act in a
certain way (other than which may arise from its negligence or
wilful default or that of its officers or employees);
(b) as a result of any act or failure to act by any person or persons
to whom the Security Trustee has delegated any of its trusts,
rights, powers, duties, authorities or
19
discretions, or appointed as its agent (other than which may arise
from such person's negligence or wilful default);
(c) in connection with the Fourth Issuer Charged Property; or
(d) in connection with or arising from the enforcement of the security
created by this Deed.
The Security Trustee shall not be under any obligation to insure in
respect of such liabilities and/or obligations or to require any other
person to maintain insurance, but to the extent that it does so, the
Fourth Issuer shall quarterly and on written request pay all insurance
premiums and expenses which the Security Trustee may properly incur in
relation to such insurance. If the Fourth Issuer fails to pay such
premiums or expenses or to reimburse the Security Trustee therefor, the
Security Trustee shall be entitled to be indemnified out of the Fourth
Issuer Charged Property in respect thereof and, in the case of a Fourth
Issuer Note Acceleration Notice having been served, the indemnification
of the Security Trustee in respect of all such insurance premiums and
expenses shall be payable in priority to payments to the Fourth Issuer
Noteholders and all other Fourth Issuer Secured Creditors and otherwise
in accordance with this Deed.
8.8 APPLICATION TO COURT
The Security Trustee may at any time after the occurrence of a Fourth
Issuer Note Event of Default apply to the Court for an order that the
powers and trusts of this Deed be exercised or carried into execution
under the direction of the Court and for the appointment of a Receiver of
the Fourth Issuer Charged Property or any part thereof and for any other
order in relation to the execution and administration of the powers and
trusts hereof as the Security Trustee shall deem expedient, and it may
assent to or approve any application to the Court made at the instance of
any of the Fourth Issuer Noteholders.
8.9 AUTHORISED INVESTMENTS
Any moneys which under the trusts of this Deed ought to or may be
invested by the Security Trustee (or by the Cash Manager on its behalf)
after the occurrence of a Fourth Issuer Note Event of Default may be
invested in the name of the Security Trustee or in the name of any
nominee on its behalf and under the control of the Security Trustee in
any Authorised Investments and the Security Trustee may at any time vary
or transfer (or direct the Cash Manager to vary or transfer) any of such
Authorised Investments for or into other such Authorised Investments as
the Security Trustee at its absolute discretion may determine, and shall
not be responsible (save where any loss results from the Security
Trustee's fraud, wilful default or negligence or that of its officers or
employees) for any loss occasioned by reason of any such investments
whether by depreciation in value or otherwise, provided that such
Authorised Investments were made in accordance with the foregoing
provisions.
8.10 DEFICIENCY OR ADDITIONAL PAYMENT
The Security Trustee shall have no responsibility whatsoever to any
Fourth Issuer Secured Creditor as regards any deficiency or additional
payment, as the case may be, which might arise because the Security
Trustee is subject to any Tax in respect of the Fourth Issuer Charged
Property or any part thereof or any income therefrom or any proceeds
thereof or is required to make any withholding or deduction from any
payment to any Fourth Issuer Secured Creditor.
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8.11 APPLICATION OF FUNDS
If, after the service of a Fourth Issuer Note Acceleration Notice, the
amount of the moneys at any time available for payment of principal and
interest in respect of any Fourth Issuer Notes under CLAUSE 6 (Payments
out of the Fourth Issuer Accounts upon Enforcement) shall be less than
one-tenth of the Principal Amount Outstanding of all the Fourth Issuer
Notes then outstanding, the Security Trustee may, at its absolute
discretion, invest such moneys to the extent that it is permitted to do
so under the FSMA 2000 in any Authorised Investments and the Security
Trustee may at any time vary or transfer any of such Authorised
Investments for or into other such Authorised Investments as the Security
Trustee at its absolute discretion may determine; and such investments
with the resulting income thereof may be accumulated until the
accumulations, together with any other funds for the time being under the
control of the Security Trustee and applicable for the purpose, shall
amount to a sum equal to at least one-tenth of the Principal Amount
Outstanding of all the Fourth Issuer Notes then outstanding and such
accumulations and funds shall then be applied in accordance with CLAUSE
6 (Payments out of the Fourth Issuer Accounts upon Enforcement).
9. RECEIVER
9.1 APPOINTMENT
(a) Subject to paragraph below, at any time following the occurrence
of a Fourth Issuer Note Event of Default, the Security Trustee
may, at its absolute discretion, appoint, by writing or by deed,
such person or persons (including an officer or officers of the
Security Trustee) as the Security Trustee thinks fit, to be
Receiver of the Fourth Issuer Charged Property or any part thereof
and, in the case of an appointment of more than one person, to act
together or independently of the other or others.
(b) The Security Trustee may not appoint an administrative receiver,
receiver, manager or receiver and manager pursuant to paragraph
(a) above solely as a result of the obtaining of a moratorium
(or anything done with a view to obtaining a moratorium) under the
Insolvency Act 2000 except with leave of the court.
9.2 REMOVAL AND REPLACEMENT
Except as otherwise required by statute, the Security Trustee may by
writing or by deed remove any Receiver and appoint another in its place
or to act with any Receiver and the Security Trustee may apply to the
Court for an order removing an administrative receiver.
9.3 EXTENT OF APPOINTMENT
The exclusion of any part of the Fourth Issuer Charged Property from the
appointment of any Receiver shall not preclude the Security Trustee from
subsequently extending its appointment (or that of any Receiver replacing
it) to that part of the Fourth Issuer Charged Property or appointing
another Receiver over any other part of the Fourth Issuer Charged
Property.
9.4 AGENT OF THE FOURTH ISSUER
Any Receiver shall, so far as the law permits, be the agent of the Fourth
Issuer and the Fourth Issuer alone shall be responsible for such
Receiver's contracts, engagements, acts, omissions, misconduct,
negligence or default and for liabilities incurred by him and in no
circumstances whatsoever shall the Security Trustee be in any way
responsible for or incur any liability in connection with such Receiver's
contracts, engagements, acts, omissions, misconduct,
21
negligence or default, and if a liquidator of the Fourth Issuer shall be
appointed, such Receiver shall act as principal and not as agent for the
Security Trustee. Notwithstanding the generality of the foregoing, such
Receiver shall in the exercise of his powers, authorities and discretions
conform to the regulations (if any) from time to time made and given in
writing by the Security Trustee.
9.5 REMUNERATION
The remuneration of any Receiver shall be fixed by the Security Trustee
and may be or include a commission calculated by reference to the gross
amount of all moneys received or otherwise and may include remuneration
in connection with claims, actions or proceedings made or brought against
such Receiver by the Fourth Issuer or any other person or the performance
or discharge of any obligation imposed upon him by statute or otherwise,
but subject to CLAUSE 6 (Payments out of the Fourth Issuer Accounts upon
Enforcement), such remuneration shall be payable hereunder by the Fourth
Issuer. The amount of such remuneration shall be paid in accordance with
the terms and conditions and in the manner agreed from time to time
between such Receiver and the Security Trustee.
9.6 POWERS
Any Receiver of the Fourth Issuer, in addition to any powers conferred on
a Receiver by statute or common law, shall have the following powers:
(a) to take possession of, get in and collect the Fourth Issuer
Charged Property (or such part thereof in respect of which it may
be appointed) or any part thereof including income whether accrued
before or after the date of his appointment;
(b) to carry on, manage, concur in or authorise the management of, or
appoint a manager of, the whole or any part of the business of the
Fourth Issuer;
(c) to sell, exchange, license, surrender, release, disclaim, abandon,
return or otherwise dispose of or in any way whatsoever deal with
the whole or any part of the Fourth Issuer Charged Property or any
interest in the Fourth Issuer Charged Property or any part thereof
for such consideration (if any) and upon such terms (including by
deferred payment or payment by instalments) as it may think fit
and to concur in any such transaction;
(d) to sell or concur in selling the whole or any part of the Fourth
Issuer's business whether as a going concern or otherwise;
(e) to appoint, engage, dismiss or vary the terms of employment of any
employees, officers, managers, agents and advisers of the Fourth
Issuer upon such terms as to remuneration and otherwise and for
such periods as he may determine;
(f) to insure, protect, maintain, repair, alter, improve, replace,
exploit, add to and develop or concur in so doing, the Fourth
Issuer Charged Property or any part thereof in any manner and for
any purpose whatsoever;
(g) in connection with the exercise or the proposed exercise of any of
its powers or in order to obtain payment of its remuneration
(whether or not it is already payable), to borrow or raise money
from any person without security or on the security of any of the
Fourth Issuer Charged Property and generally in such manner and on
such terms as it may think fit;
22
(h) to bring, defend, submit to arbitration, negotiate, compromise,
abandon and settle any claims, disputes and proceedings concerning
the Fourth Issuer Charged Property or any part thereof;
(i) to transfer all or any of the Fourth Issuer Charged Property
and/or any of the liabilities of the Fourth Issuer to any other
company or body corporate, whether or not formed or acquired for
the purpose and to form a subsidiary or subsidiaries of the Fourth
Issuer;
(j) to call up or require the directors of the Fourth Issuer to call
up all or any portion of the uncalled capital for the time being
of the Fourth Issuer and to enforce payment of any call by action
(in the name of the Fourth Issuer or the Receiver as may be
thought fit);
(k) to redeem, discharge or compromise any Encumbrance from time to
time having priority to or ranking pari passu with this Deed;
(l) to effect or maintain indemnity insurance and other insurance
(including without limitation the Insurance Policies) and obtain
bonds and performance guarantees;
(m) in connection with the exercise of any of its powers, to execute
or do, or cause or authorise to be executed or done, on behalf of
or in the name of the Third Issuer or otherwise, as it may think
fit, all documents, receipts, registrations, acts or things which
it may consider appropriate;
(n) to exercise any powers, discretions, voting, conversion or other
rights or entitlements in relation to any of the Fourth Issuer
Charged Property or incidental to the ownership of or rights in or
to any of the Fourth Issuer Charged Property and to complete or
effect any transaction entered into by the Fourth Issuer and
complete, disclaim, abandon or modify all or any of the
outstanding contracts or arrangements of the Fourth Issuer
relating to or affecting the Fourth Issuer Charged Property;
(o) to exercise all powers as are described in Schedule 1 to the
Insolvency Act 2000, whether or not the Receiver is an
"administrative receiver" as defined in that Act;
(p) to delegate its powers by way of power of attorney or in any other
manner to any person any right, power or discretion exercisable by
it under this Deed on the terms (including the power to sub-
delegate) and subject to any regulations which such Receiver may
think fit and such Receiver shall not be liable or responsible in
any way to the Fourth Issuer or the Security Trustee for any loss
or liability arising from any act, default, omission or misconduct
on the part of any such delegate or sub-delegate;
(q) generally to carry out, or cause or authorise to be carried out,
any transaction, scheme or arrangement whatsoever, whether similar
or not to any of the foregoing, in relation to the Fourth Issuer
Charged Property which it may consider expedient as effectually as
if he were solely and absolutely entitled to the Fourth Issuer
Charged Property;
(r) in addition:
(i) to do all other acts and things which it may consider
desirable or necessary for realising any Fourth Issuer
Charged Property or incidental or conducive to any of the
rights, powers or discretions conferred on a Receiver under
or by virtue of this Deed; and
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(ii) to exercise in relation to any Fourth Issuer Charged
Property all the powers, authorities and things which it
would be capable of exercising if he were the absolute
beneficial owner of the same,
and may use the name of the Fourth Issuer for any of the above
purposes; and
(s) to pay and discharge out of the profits and income of the relevant
Fourth Issuer Charged Property and the moneys to be made by it in
carrying on the business of the Fourth Issuer the expenses
incurred in and about the carrying on and management of the
business or in the exercise of any of the powers conferred by this
CLAUSE 9.6 or otherwise in respect of such Fourth Issuer Charged
Property and all outgoings which it shall think fit to pay and to
apply the residue of the said profits, income or moneys in the
manner provided by CLAUSE 6 (Payments out of the Fourth Issuer
Accounts upon Enforcement) hereof.
The Security Trustee may pay over to a Receiver any moneys constituting
part of the Fourth Issuer Charged Property to the intent that the same
may be applied for the purposes referred to in CLAUSE 6 (Payments out of
the Fourth Issuer Accounts upon Enforcement) by such Receiver and the
Security Trustee may from time to time determine what funds such Receiver
shall be at liberty to keep in hand with a view to the performance of his
duties as such Receiver.
10. PROTECTION OF THIRD PARTIES
10.1 ENQUIRY
No purchaser from, or other person dealing with, the Security Trustee or
a Receiver shall be concerned to enquire whether any of the powers
exercised or purported to be exercised has arisen or become exercisable,
whether the Fourth Issuer Secured Obligations remain outstanding or have
become payable, whether such Receiver is authorised to act or as to the
propriety or validity of the exercise or purported exercise of any power;
and the title of such a purchaser and the position of such a person shall
not be impeachable by reference to any of those matters and the
protections contained in Sections 104 to 107 of the 1925 Act shall apply
to any person purchasing from or dealing with a Receiver or the Security
Trustee.
10.2 RECEIPTS
Upon any dealing or transaction under this Deed, the receipt of the
Security Trustee or a Receiver, as the case may be, shall be an absolute
and a conclusive discharge to a purchaser and shall relieve him of any
obligation to see to the application of any moneys paid to or by the
direction of the Security Trustee or such Receiver.
11. PROTECTION OF SECURITY TRUSTEE AND RECEIVER
11.1 LIABILITY
Neither the Security Trustee nor any Receiver shall be liable to the
Fourth Issuer in the absence of breach of the terms of this Deed by them,
or wilful default, fraud, negligence or wilful misconduct on their part
or that of their officers, employees or agents in respect of any loss or
damage which arises out of the exercise or the attempted or purported
exercise of or failure to exercise any of their respective powers.
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11.2 POSSESSION
Without prejudice to the generality of CLAUSE 11.3 (Mortgagee in
Possession), entry into possession of the Fourth Issuer Charged Property
or any part thereof shall not render the Security Trustee or the Receiver
of that company liable to account as mortgagee in possession. If and
whenever the Security Trustee or the Receiver enters into possession of
the Fourth Issuer Charged Property, it shall be entitled at any time to go
out of such possession.
11.3 MORTGAGEE IN POSSESSION
Neither the Security Trustee nor the Fourth Issuer Secured Creditors
shall, by reason of any assignment or other security made under this
Deed, be or be deemed to be a mortgagee in possession nor shall they take
any action (other than, in the case of the Fourth Issuer Secured
Creditors, with the Security Trustee's prior written consent) which would
be likely to lead to the Fourth Issuer Secured Creditors or the Security
Trustee becoming a mortgagee in possession in respect of any property
referred to in this Deed. The Security Trustee, in its absolute
discretion, may at any time, serve a written notice on the Fourth Issuer
Secured Creditors requiring the Fourth Issuer Secured Creditors from the
date such notice is served to obtain the Security Trustee's prior written
consent before taking any action which would be likely to lead to the
Fourth Issuer Secured Creditors or the Security Trustee becoming a
mortgagee in possession in respect of any property referred to in this
Deed.
12. EXPENSES AND INDEMNITY
12.1 EXPENSES
The Fourth Issuer covenants with and undertakes to the Security Trustee
to reimburse or pay to the Security Trustee or any Receiver of the Fourth
Issuer (on the basis of a full indemnity) the amount of all costs
(including legal costs), charges and expenses (including insurance
premiums) properly incurred or sustained by the Security Trustee or any
Receiver (including, for the avoidance of doubt, any such costs, charges
and expenses arising from any act or omission of, or proceedings
involving, any third person) in connection with:
(a) the exercise or the attempted exercise, or the consideration of
the exercise by or on behalf of the Security Trustee or any
Receiver of any of the powers of the Security Trustee or such
Receiver, and the enforcement, preservation or attempted
preservation of this Deed (or any of the charges contained in or
granted pursuant to it) or any of the Fourth Issuer Charged
Property or any other action taken by or on behalf of the Security
Trustee or such Receiver with a view to or in connection with the
recovery by the Security Trustee or such Receiver of the Fourth
Issuer Secured Obligations from the Fourth Issuer or any other
person; or
(b) the carrying out of any other act or matter which the Security
Trustee or any Receiver may reasonably consider to be necessary
for the preservation, improvement or benefit of the Fourth Issuer
Charged Property.
12.2 INDEMNITY
The Fourth Issuer agrees to indemnify the Security Trustee and any
Receiver, on an after-Tax basis, from and against all losses, actions,
claims, costs (including legal costs on a full indemnity basis), expenses
(including insurance premiums), demands and liabilities whether in
contract, tort, delict or otherwise now or hereafter properly sustained
or incurred by the Security Trustee or such Receiver and their respective
officers and employees or by any person for whose liability, act or
omission the Security Trustee or such Receiver may be
25
answerable, in connection with anything done or omitted to be done under
or pursuant to this Deed or any other Transaction Document to which such
entity is a party, or in the exercise or purported exercise of the powers
herein contained, or occasioned by any breach by the Fourth Issuer of any
of its covenants or other obligations to the Security Trustee, or in
consequence of any payment in respect of the Fourth Issuer Secured
Obligations (whether made by the Fourth Issuer or a third person) being
declared void or impeached for any reason whatsoever save where the same
arises as the result of the fraud, negligence or wilful default of the
Security Trustee or such Receiver or their respective officers or
employees or breach by the Security Trustee or such Receiver or their
respective officers or employees of the terms of this Deed.
12.3 TAXES
All sums payable by the Fourth Issuer under this Deed are deemed to be
exclusive of any amount in respect of VAT. If, pursuant to any provision
of this Deed, the Security Trustee or any Receiver of the Fourth Issuer
makes any taxable or deemed taxable supply to the Fourth Issuer, then the
Fourth Issuer shall pay to the Security Trustee or such Receiver (as the
case may be) (in addition to the consideration for the supply) an amount
equal to the VAT charged in respect of such taxable or deemed taxable
supply against production of a valid VAT invoice.
If the Security Trustee or any Receiver shall make any payment for a
taxable or deemed taxable supply to it pursuant to or in connection with
this Deed and any such payment shall bear VAT which is Irrecoverable VAT
the Fourth Issuer shall indemnify the Security Trustee or such Receiver
(as the case may be) on demand for an amount equal to such Irrecoverable
VAT so far as it has not been taken into account in computing the amount
of any payment made by the Fourth Issuer to the Security Trustee or such
Receiver under any other indemnity contained in this Deed.
12.4 INTEREST
All sums payable by the Fourth Issuer under CLAUSES 24.3 (Disputes), 24.4
(Expenses) and 24.5 (Indemnity) shall be payable on demand and:
(a) in the case of payments actually made by the Security Trustee
prior to the demand, shall carry interest at the rate per annum
which is 1 per cent. per annum higher than the base rate of the
Agent Bank for the time being from the first Business Day
following the date of the same being demanded to the date of
actual payment (provided that such demand shall be made on a
Business Day, otherwise interest shall be payable from the Third
Business Day following the date of the demand to the date of
actual payment); and
(b) in all other cases, shall carry interest at such rate from the
date 14 days after the date of the same being demanded or (where
the demand specifies that payment by the Security Trustee will be
made on an earlier date provided such earlier date is a business
day) from such earlier date (not being earlier than the Business
Day following the date of such demand) to the date of actual
payment.
Any amounts payable pursuant to CLAUSES 24.1 (Remuneration) and 24.2
(Additional Remuneration) shall carry interest at the aforesaid rate from
the due date thereof to the date of actual payment.
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12.5 STAMP DUTIES
The Fourth Issuer shall, to the extent permitted by applicable United
Kingdom law, pay all stamp duties and other duties or Taxes of a similar
nature, including for the avoidance of doubt any duty levied under the
Stamp Act 1891 as amended and supplemented, (if any) payable on or
arising out of or in consequence of:
(a) the creation of the security constituted by or pursuant to this
Deed; and
(b) the execution and delivery of this Deed and documents executed
pursuant hereto and the other Fourth Issuer Transaction Documents
(except where such obligation to pay such stamp duties and other
duties on Taxes of a similar nature is expressed to be the
obligation of any other party to the Fourth Issuer Transaction
Documents).
13. PROTECTION OF SECURITY
The Fourth Issuer further covenants with and undertakes to the Security
Trustee from time to time (and, for the purposes mentioned in paragraph
below, notwithstanding that a Fourth Issuer Note Acceleration Notice may
not have been served) upon demand to execute, at the Fourth Issuer's own
cost, any document or do any act or thing (other than any amendment
hereto) which the Security Trustee may specify:
(a) with a view to registering or perfecting any charge or other
security created or intended to be created by or pursuant to this
Deed (including the perfecting of the conversion of any floating
charge to a fixed charge pursuant to CLAUSE 14.1 (Notice) or 14.2
(Automatic Crystallisation)) subject to having first obtained all
necessary consents (if any); or
(b) with a view to facilitating the exercise or the proposed exercise of
any of their powers or the realisation of any of the Fourth Issuer
Charged Property; or
(c) with a view to protecting the encumbrances created by or pursuant to
this Deed,
provided that the Fourth Issuer shall not be obliged to execute any
further documentation or take any other action or steps to the extent
that it would breach a restriction in any such agreement to which it is
party relating to assignment, transferring, charging or sharing of
possession/rights of such benefit.
14. CRYSTALLISATION
14.1 NOTICE
In addition and without prejudice to any other event resulting in a
crystallisation of the floating charge created by this Deed or any other
right the Security Trustee may have, the Security Trustee may, at any
time, if:
(a) a Potential Fourth Issuer Note Event of Default is subsisting and
has not been waived; or
(b) it believes that the Fourth Issuer Charged Property or any part
thereof is in danger of being seized or sold under any form of
distress or execution levied or threatened or is otherwise in
jeopardy or imperilled; or
27
(c) any circumstance shall occur which, in the reasonable opinion of
the Security Trustee, prejudices, imperils, threatens or is likely
to do any of the foregoing in respect of the security created by
this Deed or the Fourth Issuer takes or threatens to take any
action that would be prejudicial to, or would be inconsistent
with, the security created hereby,
by notice in writing to the Fourth Issuer declare that the floating
charge hereby created shall be converted into a first specific fixed
charge as to all of the undertakings, property and assets or such of them
as may be specified in the notice, and by way of further assurance, the
Fourth Issuer, at its own expense, shall execute all documents in such
form as the Security Trustee shall require and shall deliver to the
Security Trustee all conveyances, deeds, certificates and documents which
may be necessary to perfect such first specific fixed charge.
14.2 AUTOMATIC CRYSTALLISATION
Subject as set out below, in addition and without prejudice to any other
event resulting in a crystallisation of the floating charge created by
this Deed, the floating charge contained herein shall automatically be
converted into a fixed charge over all property, assets or undertaking of
the Fourth Issuer subject to the floating charge, if and when:
(a) a Fourth Issuer Note Event of Default occurs; or
(b) the Fourth Issuer ceases to carry on all or a substantial part of
its business or ceases to be a going concern or thereafter to do
any of the foregoing; or
(c) the Fourth Issuer stops making payments to its creditors or gives
notice to creditors that it intends to stop payment; or
(d) the holder of any other Encumbrance in relation to the Fourth
Issuer, whether ranking in priority to or pari passu with or after
the charges contained in this Deed, appoints a Receiver; or
(e) any floating charge granted by the Fourth Issuer to any other
person (whether permitted by the Fourth Issuer Transaction
Documents or not) crystallises for any reason whatsoever.
The floating charge created by CLAUSE 3.4 (Floating Charge) of this Deed
may not be converted into a fixed charge solely as a result of the
obtaining of a moratorium (or anything done with a view to obtaining a
moratorium) under the Insolvency Act 2000 except with leave of the court.
14.3 FAILURE OF PETITION FOR ADMINISTRATION OR WINDING-UP
If any petition for the administration or winding-up of the Fourth Issuer
or filing of documents with the court for the administration or service
of a notice of intention to appoint an administrator in relation to the
Fourth Issuer is dismissed or withdrawn or a resolution for winding-up of
the Fourth Issuer is not passed by the necessary majority, then without
prejudice to any rights exercisable otherwise than in consequence of the
presentation of such petition or the filing of documents or the service
of a notice or resolution and subject to anything done in the meantime in
pursuance of the powers given by this Deed and subject to the provisions
contained in this Deed as to costs charges and expenses incurred and
payments made, possession of the Fourth Issuer Charged Property will be
restored to the Fourth Issuer, and the Fourth Issuer and all persons
concerned will be remitted to their original rights
28
provided that the Security Trustee is satisfied that its security
position at that time is not materially different to that as at the date
of this Deed.
15. POWER OF ATTORNEY, ETC.
15.1 EXECUTION OF POWER OF ATTORNEY
Immediately upon execution of this Deed, the Fourth Issuer shall execute
and deliver to the Security Trustee a power of attorney in or
substantially in the form set out in Schedule 1. For the avoidance of
doubt, the Security Trustee confirms that it may only exercise the powers
conferred under such power of attorney in the circumstances set out in
paragraph 1 of Schedule 1.
15.2 FOURTH ISSUER CHARGED PROPERTY ON TRUST
To the extent that it is permitted to do so under the Transaction
Documents, for the purpose of giving effect to this Deed, the Fourth
Issuer hereby declares that, after service of a Fourth Issuer Note
Acceleration Notice, it will hold all of the Fourth Issuer Charged
Property (subject to the right of redemption) upon trust to convey,
assign or otherwise deal with such Fourth Issuer Charged Property in such
manner and to such person as the Security Trustee shall direct, and
declares that it shall be lawful for the Security Trustee to appoint a
new trustee or trustees of the Fourth Issuer Charged Property in place of
the Fourth Issuer.
16. OTHER SECURITY, ETC.
16.1 NO MERGER
The Security Interests contained in or created pursuant to this Deed are
in addition to, and shall neither be merged in, nor in any way exclude or
prejudice any other Encumbrance, right of recourse, set-off or other right
whatsoever which the Security Trustee or any Fourth Issuer Secured
Creditor may now or at any time hereafter hold or have (or would apart
from this Deed or any charge contained or created pursuant to this Deed
hold or have) as regards the Fourth Issuer or any other person in respect
of the Fourth Issuer Secured Obligations, and neither the Security Trustee
(subject to the provisions of CLAUSE 20.4 (Mandatory Enforcement) nor any
Fourth Issuer Secured Creditor shall be under any obligation to take any
steps to call in or to enforce any security for the Fourth Issuer Secured
Obligations, and shall not be liable to the Fourth Issuer for any loss
arising from any omission on the part of the Security Trustee or any
Fourth Issuer Secured Creditor to take any such steps or for the manner in
which the Security Trustee or any Fourth Issuer Secured Creditor shall
enforce or refrain from enforcing any such security.
16.2 CONSOLIDATION
Section 93 of the 1925 Act shall not apply in relation to any of the
charges contained in this Deed.
16.3 RULING OFF
If the Security Trustee receives notice of any Encumbrance affecting the
whole or any part of the Fourth Issuer Charged Property or any Security
Interests created under this Deed in contravention of the provisions
hereof:
29
(a) the Security Trustee may open a new account in respect of the
Fourth Issuer and, if it does not, it shall nevertheless be deemed
to have done so at the time it received such notice; and
(b) all payments made by the Fourth Issuer to the Security Trustee
after the Security Trustee receives such notice shall be credited
or deemed to have been credited to the new account, and in no
circumstances whatsoever shall operate to reduce the Fourth Issuer
Secured Obligations as at the time the Security Trustee received
such notice.
16.4 CHANGE OF NAME, ETC.
This Deed shall remain valid and enforceable notwithstanding any change
in the name, composition or constitution of the Security Trustee or the
Fourth Issuer or any amalgamation or consolidation by the Security
Trustee or the Fourth Issuer with any other corporation (whether, in the
case of the Fourth Issuer, permitted by the Fourth Issuer Transaction
Documents or not).
17. AVOIDANCE OF PAYMENTS
17.1 NO RELEASE
No assurance, security or payment which may be avoided or adjusted under
the law, including under any enactment relating to bankruptcy or
insolvency and no release, settlement or discharge given or made by the
Security Trustee or any Fourth Issuer Secured Creditor on the faith of
any such assurance, security or payment, shall prejudice or affect the
right of the Security Trustee or any Fourth Issuer Secured Creditor to
recover the Fourth Issuer Secured Obligations from the Fourth Issuer
(including any monies which it may be compelled to pay or refund under
the provisions of the Insolvency Act 1986 and any costs payable by it
pursuant to or otherwise incurred in connection therewith) or to enforce
the Security Interests created under or pursuant to this Deed to the full
extent of the Fourth Issuer Secured Obligations.
17.2 RETENTION OF CHARGES
If the Security Trustee shall have reasonable grounds for believing that
the Fourth Issuer may be insolvent or deemed to be insolvent pursuant to
the provisions of the Insolvency Act 1986 (and production of a solvency
certificate of a duly authorised officer of the Fourth Issuer shall be
prima facie evidence of the solvency of the Fourth Issuer) at the date of
any payment made by the Fourth Issuer to the Security Trustee and that as
a result, such payment may be capable of being avoided or clawed back,
the Security Trustee shall be at liberty to retain the Security Interests
contained in or created pursuant to this Deed until the expiry of a
period of one month plus such statutory period within which any
assurance, security, guarantee or payment can be avoided or invalidated
after the payment and discharge in full of all Fourth Issuer Secured
Obligations notwithstanding any release, settlement, discharge or
arrangement which may be given or made by the Security Trustee on, or as
a consequence of, such payment or discharge of liability provided that,
if at any time within such period, a petition shall be presented to a
competent court for an order for the winding up or the making of an
administration order or documents shall be filed with the court for the
appointment of an administrator or formal notice shall be given of an
intention to appoint an administrator in respect of the Fourth Issuer or
the Fourth Issuer shall commence to be wound up or to go into
administration or any analogous proceedings shall be commenced by or
against the Fourth Issuer, as the case may be, the Security Trustee shall
be at liberty to continue to retain such security for such further period
as the Security Trustee may determine and such security shall
30
be deemed to continue to have been held as security for the payment and
discharge to the Security Trustee of all Fourth Issuer Secured
Obligations.
18. SET OFF
The Security Trustee may at any time following the service of a Fourth
Issuer Note Acceleration Notice (without notice and notwithstanding any
settlement of account or other matter whatsoever) combine or consolidate
all or any existing accounts of the Fourth Issuer whether in its own name
or jointly with others and held by it or any Fourth Issuer Secured
Creditor and may set off or transfer all or any part of any credit
balance or any sum standing to the credit of any such account (whether or
not the same is due to the Fourth Issuer from the Security Trustee or
relevant Fourth Issuer Secured Creditor and whether or not the credit
balance and the account in debit or the Fourth Issuer Secured Obligations
are expressed in the same currency in which case the Security Trustee is
hereby authorised to effect any necessary conversions at its prevailing
rates of exchange) in or towards satisfaction of any of the Fourth Issuer
Secured Obligations and may in its absolute discretion estimate the
amount of any liability of the Third Issuer which is contingent or
unascertained and thereafter set off such estimated amount and no amount
shall be payable by the Security Trustee to the Fourth Issuer unless and
until all Fourth Issuer Secured Obligations have been ascertained and
fully repaid or discharged.
19. EXECUTION OF DOCUMENTS
Any document required to be executed as a deed by the Security Trustee
under or in connection with this Deed shall be validly executed if
executed as a deed by a duly authorised attorney of the Security Trustee.
20. EXERCISE OF CERTAIN RIGHTS
20.1 NO ENFORCEMENT BY FOURTH ISSUER SECURED CREDITORS
Each of the Fourth Issuer Secured Creditors (other than the Noteholders,
the Note Trustee acting on behalf of the Fourth Issuer Noteholders and
the Security Trustee) hereby agrees with the Fourth Issuer and the
Security Trustee that:
(a) only the Security Trustee may enforce the security created in
favour of the Security Trustee by this Deed in accordance with the
provisions hereof; and
(b) it shall not take any steps for the purpose of recovering any of
the Fourth Issuer Secured Obligations (including, without
limitation, by exercise any rights of set off) or enforcing any
rights arising out of the Fourth Issuer Transaction Documents
against the Fourth Issuer or procuring the winding up,
administration (including, for the avoidance of doubt, the filing
of documents with the court or the service of a notice of
intention to appoint an administrator) or liquidation of the
Fourth Issuer in respect of any of its liabilities whatsoever,
unless a Fourth Issuer Note Acceleration Notice shall have been served or
the Note Trustee, having become bound to serve a Fourth Issuer Note
Acceleration Notice, and/or having become bound to take any steps or
proceedings to enforce the said security pursuant to this Deed, fails to
do so within 30 days of becoming so bound and that failure is continuing
(in which case each of such Fourth Issuer Secured Creditors shall be
entitled to take any such steps and proceedings as it shall deem
necessary other than the presentation of a petition for the winding up
of, or for an administration order in respect of, the Fourth Issuer or
the filing
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of documents with the court or the service of a notice of intention to
appoint an administrator in relation to the Fourth Issuer).
20.2 KNOWLEDGE OF SECURITY TRUSTEE OF A FOURTH ISSUER NOTE EVENT OF DEFAULT
The Security Trustee will not be deemed to have knowledge of the
occurrence of a Fourth Issuer Note Event of Default unless the Security
Trustee has received written notice from a Fourth Issuer Secured Creditor
stating that a Fourth Issuer Note Event of Default has occurred and
describing that Fourth Issuer Note Event of Default.
20.3 DISCRETIONARY ENFORCEMENT
Subject to the provisions of this Deed, the Security Trustee may at any
time, at its discretion and without notice, take such proceedings and/or
other action as it may think fit against, or in relation to, the Fourth
Issuer or any other person to enforce their respective obligations under
any of the Fourth Issuer Transaction Documents. Subject to the
provisions of this Deed, at any time after the security created by this
Deed has become enforceable, the Security Trustee may, at its discretion
and without notice, take such steps as it may think fit to enforce such
security.
20.4 MANDATORY ENFORCEMENT
The Security Trustee shall not be bound to take any steps or to institute
any proceedings or to take any other action under or in connection with
any of the Fourth Issuer Transaction Documents (including, without
limitation, enforcing the security constituted by or pursuant to this
Deed) unless (subject to the provisions of Condition 10 of the Fourth
Issuer Notes) the Security Trustee:
(a) shall have been directed or requested to do so by an Extraordinary
Resolution of the Class A Noteholders, the Class B Noteholders or
the Class C Noteholders or in writing by the holders of at least
25 per cent. in aggregate Principal Amount Outstanding of the
Class A Fourth Issuer Notes, the Class B Fourth Issuer Notes or
the Class C Fourth Issuer Notes then outstanding or by any other
Third Issuer Secured Creditor PROVIDED THAT:
(i) the Security Trustee shall not, and shall not be bound to,
act at the direction or request of the Class B Noteholders
as aforesaid unless either so to do would not, in the sole
opinion of the Security Trustee, be materially prejudicial
to the interests of the Class A Noteholders or such action
is sanctioned by an Extraordinary Resolution of the Class A
Noteholders;
(ii) the Security Trustee shall not, and shall not be bound to,
act at the direction or request of the Class C Noteholders
as aforesaid unless either so to do would not, in the sole
opinion of the Security Trustee, be materially prejudicial
to the interests of the Class A Noteholders and/or the Class
B Noteholders or such action is sanctioned by an
Extraordinary Resolution of the Class A Noteholders and/or
the Class B Noteholders, as the case may be;
(iii) the Security Trustee shall not, and shall not be bound to,
act at the direction or request of any other Fourth Issuer
Secured Creditor as aforesaid unless so to do would not, in
the sole opinion of the Security Trustee, be materially
prejudicial to the interests of the Class A Noteholders and
the Class B Noteholders and the Class C Noteholders or such
action is sanctioned by Extraordinary Resolutions of the
Class A Noteholders and the Class B
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Noteholders and the Class C Noteholders and each of the
Fourth Issuer Secured Creditors who ranks higher than the
relevant Fourth Issuer Secured Creditor in the order or
priority of payments in CLAUSE 6 (Payments out of the Fourth
Issuer Accounts upon Enforcement) consents to such action;
and
(b) shall have been indemnified and/or secured to its satisfaction
against all liabilities, actions, proceedings, claims and demands
to which it may thereby render itself liable and all costs,
charges, damages and expenses which it may incur by so doing and
the terms of such indemnity may include the provision of a
fighting fund, non-recourse loan or other similar arrangement.
20.5 DISPOSAL OF FOURTH ISSUER CHARGED PROPERTY
Notwithstanding CLAUSE 8 (The Security Trustee's Powers), if the Fourth
Issuer Security has become enforceable otherwise than by reason of a
default in payment of any amount due on the Class A Notes (or, once the
Class A Notes have been redeemed in full, the Class B Notes or, once the
Class A Notes and the Class B Notes have been redeemed in full, the Class
C Notes), the Security Trustee will not be entitled to dispose of any of
the Fourth Issuer Charged Property unless either a sufficient amount
would be realised to allow discharge in full of all amounts owing to the
Class A Noteholders and, once all of the Class A Noteholders have been
repaid, the Class B Noteholders and, once all of the Class A Noteholders
and the Class B Noteholders have been repaid, the Class C Noteholders or
the Security Trustee is of the sole opinion, which shall be binding on
the Fourth Issuer Secured Creditors, reached after considering at any
time and from time to time the advice of any financial adviser (or such
other professional advisers reasonably selected by the Security Trustee
for the purpose of giving such advice), that the cash flow prospectively
receivable by the Fourth Issuer will not (or that there is a significant
risk that it will not) be sufficient, having regard to any other relevant
actual, contingent or prospective liabilities of the Fourth Issuer, to
discharge in full in due course all amounts owing to the Class A
Noteholders (or once all of the Class A Noteholders have been repaid, the
Class B Noteholders, or once all of the Class A Noteholders and the Class
B Noteholders have been repaid, the Class C Noteholders). The fees and
expenses of the aforementioned financial adviser or other professional
adviser selected by the Security Trustee shall be paid by the Fourth
Issuer.
21. COVENANTS AND WARRANTIES
21.1 NOTICE OF ASSIGNMENT
Immediately upon the execution of this Deed, the Fourth Issuer shall
deliver one or more notices of assignment substantially in the form set
out in Schedule 2 to each of the persons named in such notices and shall
use all reasonable endeavours to procure the delivery to the Security
Trustee on the date hereof of receipts from the addressees of such notices
substantially in the form attached to the notice.
21.2 WARRANTY
The Fourth Issuer warrants to the Security Trustee that it has taken all
necessary steps to enable it to charge or assign as security the Fourth
Issuer Charged Property in accordance with CLAUSE 3 (Security and
Declaration of Trust), and that it has taken no action or steps to
prejudice its right, title and interest in and to the Fourth Issuer
Charged Property.
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21.3 NEGATIVE COVENANTS
So long as any of the Fourth Issuer Secured Obligations remain
outstanding, the Fourth Issuer shall not, save to the extent permitted by
or provided for in the Transaction Documents or with the prior written
consent of the Security Trustee:
(a) create or permit to subsist any mortgage, pledge, lien, charge or
other security interest whatsoever (unless arising by operation of
law) upon the whole or any part of its assets (including any
uncalled capital) or its undertaking, present or future;
(b) (i) carry on any business other than as described in the
Prospectus dated [{circle}] relating to the issue of the
Fourth Issuer Notes and the related activities described
therein; or
(ii) have any subsidiaries or any subsidiary undertakings (as
defined in the Companies Act 1985) or any employees or
premises;
(c) transfer, sell, lend, part with or otherwise dispose of, or deal
with, or grant any option or present or future right to acquire
any of its assets or undertaking or any interest, estate, right,
title or benefit therein or thereto or agree or attempts or
purport to do so;
(d) pay any dividend or make any other distribution to its shareholder
or issue any further shares;
(e) incur any indebtedness in respect of borrowed money whatsoever or
give any guarantee or indemnity in respect of any indebtedness or
of any obligation of any person;
(f) consolidate or merge with any other person or convey or transfer
its properties or assets substantially as an entirety to any other
person;
(g) permit any of the Fourth Issuer Transaction Documents to which it
is a party to become invalid or ineffective, or the priority of
the Security Interests created thereby to be reduced, or consent
to any variation of, or exercise any powers of consent or waiver
pursuant to the terms of any of the Fourth Issuer Transaction
Documents to which it is a party, or permit any party to any of
the Transaction Documents to which it is a party or any other
person whose obligations form part of the Fourth Issuer Charged
Property to be released from its respective obligations;
(h) have an interest in any bank account other than the Fourth Issuer
Accounts, unless such account or interest therein is charged to
the Security Trustee on terms acceptable to it;
(i) offer to surrender to any company any amounts which are available
for surrender by way of group relief within Chapter IV of Part X
of the Income and Corporation Taxes Act 1988 except for full
payment at the current applicable rate of corporation tax applied
to the surrendered amount and payable at the date when corporation
tax is due to be paid by the claimant or would be due in the
absence of the surrender;
(j) allow or permit the group election in force between the Fourth
Issuer and Funding 1 under Section 247 of the Income and
Corporation Taxes Act 1988 to cease, unless required to do so by
law;
34
(k) do any act or thing the effect of which would be to make the
Fourth Issuer resident in any jurisdiction other than the United
Kingdom;
(l) permit any person other than the Fourth Issuer and the Security
Trustee to have any equitable interest in any of its assets or
undertakings or any interest, estate, right, title or benefit
therein;
(m) purchase or otherwise acquire any Note or Notes (including the
Fourth Issuer Notes); or
(n) engage in any activities in the United States (directly or through
agents) or derive any income from United States sources as
determined under United States income tax principles or 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.
21.4 POSITIVE COVENANTS
The Fourth Issuer covenants and undertakes with the Security Trustee for
the benefit of the Fourth Issuer Secured Creditors as follows:
(a) at all times to carry on and conduct its affairs in a proper and
efficient manner and in accordance with its constitutive documents
and all laws and regulations applicable to it;
(b) give to the Security Trustee within a reasonable time after
request such information and evidence as it shall reasonably
require and in such form as it shall reasonably require, including
without prejudice to the generality of the foregoing the
procurement by the Fourth Issuer of all such certificates called
for by the Security Trustee pursuant to this Deed or any other
Transaction Document for the purpose of the discharge or exercise
of the duties, trusts, powers, authorities and discretions vested
in it under these presents or any other Transaction Document to
which the Security Trustee is a party or by operation of law;
(c) to cause to be prepared and certified by its auditors in respect
of each Financial Year accounts in such form as will comply with
relevant legal and accounting requirements applicable to it for
the time being;
(d) at all times to keep or procure the keeping of proper books of
account and records and allow the Security Trustee and any person
or persons appointed by the Security Trustee to whom the Fourth
Issuer shall have no reasonable objection free access to such
books of account and records at all times during normal business
hours upon reasonable notice in writing provided that such
inspection shall only be for the purposes of carrying out its
duties under this Deed and any information so obtained shall only
be used and passed on to any other person for the purpose of the
Security Trustee carrying out its duties under this Xxxx;
(e) to send to the Security Trustee a copy of every balance sheet,
profit and loss account, source and application of funds statement
(if any), report, or other notice, statement, circular or document
issued or given to any holder of securities (including Noteholders
and shareholders in their capacity as such) or creditors of the
Fourth Issuer as soon as reasonably practicable after issue of the
same;
35
(f) to give notice in writing to the Security Trustee of the
occurrence of any Fourth Issuer Note Event of Default, Potential
Fourth Issuer Note Event of Default and/or service of a Fourth
Issuer Note Acceleration Notice (such notice to be effective by
the delivery of a copy of the Fourth Issuer Note Acceleration
Notice to Security Trustee) immediately upon becoming aware
thereof and without waiting for the Security Trustee to take any
further action;
(g) give to the Security Trustee (i) within fourteen days after demand
by the Security Trustee therefor and (ii) (without the necessity
for any such demand) promptly after the publication of its audited
accounts in respect of each Financial Year and in any event not
later than the date required by statute to file or publish
(whichever is earlier) such audited accounts after the end of each
such Financial Year a certificate signed by two directors of the
Fourth Issuer to the effect that as at a date not more than seven
days before delivering such certificate (the CERTIFICATION DATE)
there did not exist and had not existed since the certification
date of the previous certificate (or in the case of the first such
certificate the date hereof) any Fourth Issuer Note Event of
Default (or if such then exists or existed, specifying the same)
and that during the period from and including the certification
date of the last such certificate (or in the case of the first
such certificate the date hereof) to and including the
certification date of such certificate the Fourth Issuer has
complied, to the best of such directors' knowledge and belief,
with all its obligations contained in this Deed and each of the
other Fourth Issuer Transaction Documents to which it is a party
or (if such is not the case) specifying the respects in which it
has not so complied;
(h) at all times to execute all such further documents and do all such
further acts and things as may in the reasonable opinion of the
Security Trustee be necessary at any time or times to give effect
to the terms and conditions of this Deed and the other Fourth
Issuer Transaction Documents;
(i) at all times to comply with the obligations and provisions binding
upon it under and pursuant to this Deed and the other Fourth
Issuer Transaction Documents;
(j) duly and promptly to pay and discharge all Taxes imposed upon it
or its assets unless such Taxes are, in the sole opinion of the
Security Trustee, being contested in good faith by the Fourth
Issuer; and
(k) so far as permitted by law to enter into and maintain in full
force and effect a group income election under Section 247 of the
Income and Corporation Taxes Act 1988 in relation to any such
payments as are referred to in Section 247(4) of that Act and
which are made under the Fourth Issuer Intercompany Loan Agreement
by Funding 1 to the Fourth Issuer and ensure that no steps will be
taken (whether by act, omission or otherwise) which would
reasonably be expected to lead to the revocation or invalidation
of the aforementioned election; and immediately to notify the
Security Trustee if it becomes aware that the aforementioned
election ceases to be in full force and effect or if circumstances
arise, of which it is aware, which may result in that election
ceasing to be in full force and effect.
21.5 FORMS 395
The Fourth Issuer shall make a filing or shall procure that a filing is
made with the Registrar of Companies of a duly completed Form 395
together with an executed original of this Deed within the applicable
time limit.
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22. SUPPLEMENTS TO THE TRUSTEE ACTS
22.1 POWERS OF SECURITY TRUSTEE
Section 1 of the Trustee Act 2000 shall not apply to the duties of the
Security Trustee in relation to the trusts constituted by this Deed.
Where there are any inconsistencies between the Trustee Act 1925, the
Trustee Act 2000 and the provisions of this Deed, the provisions of this
Deed shall, to the extent allowed by law, prevail and, in the case of any
such inconsistency with the Trustee Act 2000, the provisions of this Deed
shall constitute a restriction or exclusion for the purposes of that Act.
By way of supplement it is expressly declared as follows:
(a) the Security Trustee may in relation to this Deed or any of the
other Fourth Issuer Transaction Documents act on the opinion or
advice of, or a certificate or any information obtained from, any
lawyer, banker, valuer, surveyor, securities company, broker,
auctioneer, accountant or other expert or adviser in the United
Kingdom or elsewhere (including, without limitation, any
certificate or confirmation from the Rating Agencies), whether
obtained by the Security Trustee or any Receiver and shall not be
responsible for any loss occasioned by so acting;
(b) any such opinion, advice, certificate or information may be sent
or obtained by letter, telegram, telex, facsimile reproduction or
in any other form and the Security Trustee shall not be liable for
acting in good faith on any opinion, advice, certificate or
information purporting to be so conveyed although the same shall
contain some error or shall not be authentic provided that such
error or lack of authenticity is not manifest;
(c) the Security Trustee shall (save as expressly otherwise provided
in this Deed or any of the other Fourth Issuer Transaction
Documents) as regards all rights, powers, authorities and
discretions vested in it by this Deed or any of the other
Transaction Documents, or by operation of law, have absolute and
uncontrolled discretion as to, and save as otherwise provided in
this Deed shall not be liable for any loss, liability, costs,
expenses or inconvenience arising as a result of, the exercise or
non-exercise thereof;
(d) the Security Trustee shall be at liberty to place this Deed and
all deeds and other documents relating to this Deed with any bank
or banking company, or lawyer or firm of lawyers believed by it to
be of good repute, in any part of the world, and the Security
Trustee shall not be responsible for or be required to insure
against any loss incurred in connection with any such deposit and
the Fourth Issuer shall pay all sums required to be paid on
account of or in respect of any such deposit;
(e) the Security Trustee may, in the conduct of its trust business,
instead of acting personally, employ and pay, on such terms as it
in its absolute discretion deems fit, an agent to transact or
conduct, or concur in transacting or conducting, any business and
to do or concur in doing all acts required to be done by the
Security Trustee (including the receipt and payment of money).
The Security Trustee (except where such agent is an affiliate or
associated company of, or otherwise connected with, the Security
Trustee) shall not be responsible for any misconduct or default on
the part of any person appointed by it in good faith hereunder or
be bound to supervise the proceedings or acts of any such persons;
37
(f) where it is necessary or desirable for any purpose in connection
with this Deed to convert any sum from one currency to another it
shall (unless otherwise provided by this Deed or required by law)
be converted at such rate or rates in accordance with such method
and as at such date for the determination of such rate of
exchange, as may be specified by the Security Trustee in its
absolute discretion but having regard to current rates of exchange
if available and the Security Trustee shall not be liable for any
loss occasioned by the said conversion under this paragraph (f);
(g) subject to Clause 23.6 (Consent of Security Trustee), any consent
given by the Security Trustee for the purposes of this Deed or any
of the other Transaction Documents may be given on such terms and
subject to such conditions (if any) as the Security Trustee in its
absolute discretion thinks fit and, notwithstanding anything to
the contrary contained in this Deed or any of the other Fourth
Issuer Transaction Documents, may be given retrospectively;
(h) the Security Trustee shall be entitled to rely (without
investigation or further inquiry) upon a certificate, reasonably
believed by it to be genuine, of the Fourth Issuer or any other
person in respect of every matter and circumstance for which a
certificate is expressly provided for under this Deed or the other
Fourth Issuer Transaction Documents and to call for and rely upon
a certificate of the Fourth Issuer or any other person reasonably
believed by it to be genuine as to any other fact or matter prima
facie within the knowledge of the Fourth Issuer or such person as
sufficient evidence thereof and the Security Trustee shall not be
bound in any such case to call for further evidence or be
responsible for any loss, liability, costs, damages, expenses or
inconvenience that may be caused by it failing to do so;
(i) the Security Trustee shall be entitled to rely (without
investigation or further inquiry) upon instructions or directions
given to it by the Note Trustee as being given on behalf of the
relevant class of Fourth Issuer Noteholders and the Security
Trustee shall not be bound in any such case to inquire as to the
compliance with the Fourth Issuer Trust Deed or be responsible for
any loss, liability, costs, damages, expenses or inconvenience
that may be caused by it failing to do so;
(j) the Security Trustee shall not be responsible for acting upon any
resolution purporting to have been passed at any meeting of the
Class A Noteholders or the Class B Noteholders or the Class C
Noteholders in respect whereof minutes have been made and
purporting to have been signed by the chairman thereof, even
though it may subsequently be found that there was some defect in
the constitution of the meeting or the passing of the resolution
or that for any reason the resolution was not valid or binding
upon the Class A Noteholders or the Class B Noteholders or the
Class C Noteholders;
(k) the Security Trustee may call for and shall be at liberty to
accept and place full reliance on as sufficient evidence of the
facts stated therein a certificate or letter of confirmation
certified as true and accurate and signed on behalf of DTC,
Euroclear, Clearstream, Luxembourg or any depository or common
depository for them or such person as the Security Trustee
considers appropriate, or any form of record made by any of them
to the effect that any particular time or through any particular
period any particular person is, was or will be shown in its
records as entitled to a particular number of Fourth Issuer Notes;
38
(l) the Security Trustee shall, in connection with the exercise by it
of any of its trusts, duties, rights, powers, authorities and
discretions under this Deed and the other Fourth Issuer
Transaction Documents:
(i) where it is required to have regard to the interests of the
Fourth Issuer Noteholders of any class, it shall have regard
to the interests of such Fourth Issuer Noteholders as a
class and, in particular but without prejudice to the
generality of the foregoing, shall not have regard to, or be
in any way liable for, the consequences of any exercise
thereof for individual Fourth Issuer Noteholders resulting
from their being for any purpose domiciled or resident in,
or otherwise connected with, or subject to the jurisdiction
of, any particular territory or any political sub-division
thereof and the Security Trustee shall not be entitled to
require, nor shall any Fourth Issuer Noteholder be entitled
to claim, from the Fourth Issuer, the Security Trustee or
any other person any indemnification or payment in respect
of any tax consequence of any such exercise upon individual
Fourth Issuer Noteholders; and
(ii) be entitled to assume that such exercise will not be
materially prejudicial to the interests of the Class A
Noteholders if each of the Rating Agencies has confirmed
that the then current rating by it of the Class A Notes
would not be adversely affected by such exercise, that such
exercise will not be materially prejudicial to the interests
of the Class B Noteholders if each of the Rating Agencies
has confirmed that the then current rating by it of the
Class B Notes would not be adversely affected by such
exercise and that such exercise will not be materially
prejudicial to the interests of the Class C Noteholders if
each of the Rating Agencies has confirmed that the then
current rating by it of the Class C Notes will not be
adversely affected by such exercise;
(m) the Security Trustee shall have no responsibility for the
maintenance of any rating of the Fourth Issuer Notes by the Rating
Agencies or any other person;
(n) the Security Trustee shall not be liable for any error of judgment
made in good faith by any officer or employee of the Security
Trustee assigned by the Security Trustee to administer its
corporate trust matters unless it shall be proved that the
Security Trustee was negligent in ascertaining the pertinent
facts;
(o) no provision of this Deed or any other Document shall require the
Security Trustee to do anything which may be illegal or contrary
to applicable law or regulation or expend or risk its own funds or
otherwise incur any financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers or
otherwise in connection with this Deed or any other Fourth Issuer
Transaction Document (including, without limitation, forming any
opinion or employing any legal, financial or other adviser), if it
shall believe that repayment of such funds or adequate indemnity
against such risk or liability is not assured to it;
(p) the Security Trustee shall not (unless and to the extent ordered
to do so by a court of competent jurisdiction) be required to
disclose to any Fourth Issuer Secured Creditor any information
made available to the Security Trustee by the Fourth Issuer in
connection with the trusts of this Deed or the Fourth Issuer
Transaction Documents and no Fourth Issuer Secured Creditor shall
be entitled to take any action to obtain from the Security Trustee
any such information; and
(q) the Security Trustee may appoint and pay any person to act as a
custodian or nominee on any terms in relation to such assets of
the trust as the Security Trustee may
39
determine, including for the purpose of depositing with a custodian
this Deed or any documents relating to the trusts created
hereunder. The Security Trustee shall not be responsible for any
misconduct or default on the part of any person appointed by it in
good faith hereunder or be bound to supervise the proceedings or
acts of any such persons.
22.2 REPRESENTATIONS AND WARRANTIES, ETC.
The Security Trustee shall not be responsible for any recitals or
statements or warranties or representations of any party (other than the
Security Trustee) contained herein or in any other Transaction Document
or any other document entered into in connection therewith and may assume
the accuracy and correctness thereof and shall not be responsible for the
execution, legality, effectiveness, adequacy, genuineness, validity or
enforceability or admissibility in evidence of any such agreement or
other document or any trust or security thereby constituted or evidenced.
The Security Trustee may accept without enquiry, requisition or objection
such title as the Fourth Issuer may have to the Fourth Issuer Charged
Property or any part thereof from time to time and shall not be required
to investigate or make any enquiry into the title of the Fourth Issuer to
the Fourth Issuer Charged Property or any part thereof from time to time
whether or not any default or failure is or was known to the Security
Trustee or might be, or might have been, discovered upon examination,
inquiry or investigation and whether or not capable of remedy.
Notwithstanding the generality of the foregoing, each Fourth Issuer
Secured Creditor shall be solely responsible for making its own
independent appraisal of and investigation into the financial condition,
creditworthiness, condition, affairs, status and nature of the Fourth
Issuer, and the Security Trustee shall not at any time have any
responsibility for the same and each Fourth Issuer Secured Creditor shall
not rely on the Security Trustee in respect thereof.
22.3 PERFECTION
The Security Trustee shall not be bound to give notice to any person of
the execution of this Deed nor shall it be liable for any failure,
omission or defect in perfecting the security intended to be constituted
hereby including, without prejudice to the generality of the foregoing:
(a) failure to obtain any licence, consent or other authority for the
execution of the same;
(b) failure to register the same in accordance with the provisions of
any of the documents of title of the Fourth Issuer to any of the
Fourth Issuer Charged Property; and
(c) failure to effect or procure registration of or otherwise protect
any of the Fourth Issuer Transaction Documents by registering the
same under any registration laws in any territory, or by
registering any notice, caution or other entry prescribed by or
pursuant to the provisions of the said laws.
22.4 ENFORCEABILITY, ETC.
The Security Trustee shall not be responsible for the genuineness,
validity, suitability or effectiveness of any of the Fourth Issuer
Transaction Documents or any other documents entered into in connection
therewith or any other document or any obligations or rights created or
purported to be created thereby or pursuant thereto or any security or
the priority thereof constituted or purported to be constituted by or
pursuant to this Deed or any of the Fourth Issuer Transaction Documents,
nor shall it be responsible or liable to any person because of any
invalidity of any provision of such documents or the unenforceability
thereof, whether arising from statute, law or decision of any court and
(without prejudice to the
40
generality of the foregoing) the Security Trustee shall not have any
responsibility for or have any duty to make any investigation in respect
of or in any way be liable whatsoever for:
(a) the nature, status, creditworthiness or solvency of the Fourth
Issuer or Funding 1 or any other person or entity who has at any
time provided any security or support whether by guarantee, charge
or otherwise in respect of any advance made to the Fourth Issuer;
(b) the title, ownership, value, sufficiency, enforceability or
existence of any Fourth Issuer Charged Property or any security
(howsoever described) relating thereto;
(c) the execution, legality, validity, adequacy, admissibility in
evidence, sufficiency or enforceability of this Deed or any other
Fourth Issuer Transaction Document comprised within the Fourth
Issuer Charged Property or any other document entered into in
connection therewith;
(d) the registration, filing, protection or perfection of any security
relating to this Deed or the other Transaction Documents relating
to the Fourth Issuer Charged Property or the priority of the
security thereby created whether in respect of any initial advance
or any subsequent advance or any other sums or liabilities;
(e) the scope or accuracy of any representations, warranties or
statements made by or on behalf of the Fourth Issuer or any other
person or entity who has at any time provided any Fourth Issuer
Transaction Document comprised within the Fourth Issuer Charged
Property or in any document entered into in connection therewith;
(f) the performance or observance by the Fourth Issuer or any other
person with any provisions of this Deed or any other Fourth Issuer
Transaction Document comprised within the Fourth Issuer Charged
Property or in any document entered into in connection therewith
or the fulfilment or satisfaction of any conditions contained
therein or relating thereto or as to the existence or occurrence
at any time of any default, event of default or similar event
contained therein or any waiver or consent which has at any time
been granted in relation to any of the foregoing;
(g) the existence, accuracy or sufficiency of any legal or other
opinions, searches, reports, certificates, valuations or
investigations delivered or obtained or required to be delivered
or obtained at any time in connection with the Fourth Issuer
Charged Property;
(h) the title of the Fourth Issuer to any of the Fourth Issuer Charged
Property;
(i) the failure to effect or procure registration of or to give notice
to any person in relation to or otherwise protect the security
created or purported to be created by or pursuant to this Deed or
other documents entered into in connection herewith;
(j) the failure to call for delivery of documents of title to or
require any transfers, assignments, legal mortgages, charges or
other further assurances in relation to any of the assets the
subject matter of any of this Deed or any other document; or
(k) any other matter or thing relating to or in any way connected with
this Deed or the Fourth Issuer Charged Property or any document
entered into in connection therewith whether or not similar to the
foregoing.
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22.5 NO SUPERVISION
The Security Trustee shall be under no obligation to monitor or supervise
the respective functions of the Fourth Issuer Account Bank under the
Fourth Issuer Bank Account Agreement or the Fourth Issuer Cash Manager
under the Fourth Issuer Cash Management Agreement or of any other person
under or pursuant to any of the other Transaction Documents.
22.6 NO LIABILITY
The Security Trustee shall not be liable or responsible for any loss,
cost, damage, expense or inconvenience which may result from anything
done or omitted to be done by it under this Deed or any of the other
Transaction Documents subject, with respect to the Fourth Issuer, to
Clause 11.1 and otherwise, save where the same arises as a result of the
Security Trustee's fraud, wilful default or gross negligence.
22.7 CONCLUSIVE AND BINDING DETERMINATIONS
The Security Trustee as between itself and the Fourth Issuer Secured
Creditors shall have full power to determine all questions and doubts
arising in relation to any of the provisions of this Deed and the other
Fourth Issuer Transaction Documents and every such determination, whether
made upon a question actually raised or implied in the acts or
proceedings of the Security Trustee, shall be conclusive and shall bind
the Security Trustee and the Fourth Issuer Secured Creditors.
22.8 USE OF PROCEEDS
The Security Trustee shall not be responsible for the receipt or
application by the Fourth Issuer of the proceeds of the issue of the
Fourth Issuer Notes.
22.9 MATERIAL PREJUDICE
The Security Trustee may determine whether or not any event, matter or
thing is, in its opinion, materially prejudicial to the interests of the
Fourth Issuer Secured Creditors and if the Security Trustee shall certify
that any such event, matter or thing is, in its opinion, materially
prejudicial, such certificate shall be conclusive and binding upon the
Fourth Issuer Secured Creditors.
22.10 NO INDEMNITY
None of the provisions of this Deed shall, in any case in which the
Security Trustee has failed to show the degree of care and diligence
required of it as security trustee of this Deed, having regard to the
provisions of this Deed and any of the other Fourth Issuer Transaction
Documents to which the Security Trustee is a party conferring on the
Security Trustee any powers, authorities or discretions, relieve or
indemnify the Security Trustee against any liabilities which by virtue of
any rule of law would otherwise attach to it in respect of any
negligence, default, breach of duty or breach of trust of which it may be
guilty in relation to its duties under this Deed.
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23. SUPPLEMENTAL PROVISIONS REGARDING THE SECURITY TRUSTEE
23.1 ASSUMPTION OF NO DEFAULT
Except as herein otherwise expressly provided, the Security Trustee shall
be and is hereby authorised to assume without enquiry, and it is hereby
declared to be the intention of the Security Trustee that it shall assume
without enquiry, that the Fourth Issuer and each of the other parties
thereto is duly performing and observing all the covenants and provisions
contained in this Deed and the other Transaction Documents to be
performed and observed on their parts and that no event has occurred
which constitutes a Fourth Issuer Note Event of Default or a Potential
Fourth Issuer Note Event of Default or which would cause a right or
remedy to become exercisable, whether by Funding 1, the Fourth Issuer or
the Security Trustee, under or in respect of any of the Transaction
Documents.
23.2 DELEGATION
The Security Trustee may, in the execution of all or any of the trusts,
powers, authorities and discretions vested in it by this Deed or any of
the other Fourth Issuer Transaction Documents, act by responsible
officers or a responsible officer for the time being of the Security
Trustee. The Security Trustee may also, whenever it thinks expedient in
the interests of the Fourth Issuer Secured Creditors, whether by power of
attorney or otherwise, delegate to any person or persons all or any of
the trusts, rights, powers, duties, authorities and discretions vested in
it by this Deed or any of the other Fourth Issuer Transaction Documents.
Any such delegation may be made upon such terms and conditions and
subject to such regulations (including power to sub-delegate) as the
Security Trustee may think fit in the interests of the Third Issuer
Secured Creditors or any of them and, provided that the Security Trustee
shall have exercised reasonable care in the selection of such delegate
and, where a power to sub-delegate has been given, has obliged the
delegate to exercise reasonable care in the selection of any sub-
delegate, the Security Trustee shall not be bound to supervise the
proceedings of, or be responsible for any loss incurred by any misconduct
or default on the part of, such delegate or sub-delegate. The Security
Trustee shall give prompt notice to the Fourth Issuer of the appointment
of any delegate as aforesaid and shall procure that any delegate shall
also give prompt notice of the appointment of any sub-delegate to the
Fourth Issuer.
23.3 COMMERCIAL TRANSACTIONS
The Security Trustee shall not, and no director, officer or employee of
any corporation being a trustee hereof shall, by reason of the fiduciary
position of the Security Trustee, be in any way precluded from making any
contracts or entering into any transactions in the ordinary course of
business with the Fourth Issuer, Funding 1 or Holdings or any other
subsidiary of Holdings or any other party to the Fourth Issuer
Transaction Documents or any other party to any of the Fourth Issuer
Transaction Documents or from accepting the trusteeship of any stock,
shares, debenture stock, debentures or securities of any such person.
Without prejudice to the generality of the foregoing, it is expressly
declared that such contracts and transactions include any contract or
transaction in relation to the placing, underwriting, purchasing,
subscribing for or dealing with or lending money upon or making payments
in respect of any stock, shares, debenture stock, debentures or other
securities of the Fourth Issuer, Funding 1 or Holdings or any other
subsidiary of Holdings or any other party to the Fourth Issuer
Transaction Documents or any contract of banking or insurance with the
Fourth Issuer, Funding 1 or Holdings or any other subsidiary of Holdings
or any other party to the Transaction Documents. Neither the Security
Trustee nor any such director or officer of the Security Trustee shall be
accountable to any of the Fourth Issuer Secured Creditors or the Fourth
Issuer, Funding 1 or Holdings for any profit, fees, commissions,
interest, discounts or
43
share of brokerage earned, arising or resulting from any such contracts
or transactions. The Security Trustee and any such director, officer or
employee shall be at liberty to retain the same for its or his own
benefit.
23.4 ADDITIONAL POWERS
The powers conferred by this Deed upon the Security Trustee shall be in
addition to any powers which may from time to time be vested in it by
general law.
23.5 DUTIES AND RESPONSIBILITIES OF SECURITY TRUSTEE
The Security Trustee has no duties or responsibilities except those
expressly set out in this Deed or in the Transaction Documents.
23.6 CONSENT OF SECURITY TRUSTEE
If a request in writing is made to the Security Trustee by the Fourth
Issuer or any other person to give its consent to any event, matter or
thing, then:
(a) if the Fourth Issuer Transaction Document specifies that the
Security Trustee is required to give its consent to that event,
matter or thing if certain specified conditions are satisfied in
relation to that event, matter or thing, then the Security Trustee
shall give its consent to that event, matter or thing upon being
satisfied acting reasonably that those specified conditions have
been satisfied; and
(b) in any other case, the Security Trustee may give its consent if to
do so would not, in its opinion, be materially prejudicial to the
interests of the Fourth Issuer Secured Creditors.
23.7 INTERESTS OF THIRD ISSUER SECURED CREDITORS
Where the Security Trustee is required to have regard to the interests of
any Fourth Issuer Secured Creditor (other than the Fourth Issuer
Noteholders), the Security Trustee shall consult with such Fourth Issuer
Secured Creditor and may rely on the opinion of such Fourth Issuer
Secured Creditor as to whether any act, matter or thing is or is not in
the interests of, or materially prejudicial to the interests of, such
Fourth Issuer Secured Creditor.
23.8 MODIFICATION TO TRANSACTION DOCUMENTS
(a) Without prejudice to CLAUSE 23.6 (Consent of Security Trustee), the
Security Trustee may from time to time and at any time without any
consent or sanction of the Fourth Issuer Secured Creditors concur
with the Fourth Issuer or any person in making or sanctioning any
modification:
(i) to any of the Fourth Issuer Transaction Documents which in
the opinion of the Security Trustee it may be expedient to
make, provided that the Security Trustee is of the opinion,
acting reasonably, that such modification will not be
materially prejudicial to the interests of the or, if it is
not of that opinion in relation to any Fourth Issuer Secured
Creditor, such Fourth Issuer Secured Creditor has given its
written consent to such modification; or
(ii) to any of the Transaction Documents which in the Security
Trustee's opinion is made to correct a manifest error or an
error established as such to the satisfaction of the
Security Trustee or is of a formal, minor or technical
nature.
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(b) Without prejudice to CLAUSE 23.6 (Consent of Security Trustee) and
subject to paragraph (c) below, the Security Trustee shall be
required to give its consent to any modifications to Mortgage Sale
Agreement, the Servicing Agreement, the Cash Management Agreement,
the Funding 1 Deed of Charge, the Funding 1 Liquidity Facility
Agreement, the Funding 1 Swap Agreement, the Intercompany Loan
Terms and Conditions, the Bank Account Agreement and the Amended
and Restated Master Definitions and Construction Schedule that are
requested by Funding 1 or the Cash Manager, provided that (i) the
Funding 1 Liquidity Facility Provider the Funding 1 Swap Provider
and each of the Fourth Issuer Swap Providers provide written
confirmation to the Security Trustee consenting to such
modification of any and all of those documents listed under this
paragraph (b) to which they are, respectively, a party (such
consent not to be unreasonably withheld) and in any event such
consent shall be deemed to be given by each of the Funding 1
Liquidity Facility Provider, the Funding 1 Swap Provider and each
Fourth Issuer Swap Provider (as the case may be) if no written
response is received by the Security Trustee from each party,
respectively, by the tenth Business Day after the Security
Trustee's request for such consent and (ii) Funding 1 or the Cash
Manager, as the case may be, has certified to the Security Trustee
in writing that such modifications are required in order to
accommodate:
(i) the entry by Funding 1 into New Intercompany Loan Agreements
and/or the addition of other relevant creditors to the
Transaction Documents;
(ii) the issue of new types of notes by New Issuers;
(iii) the inclusion of Funding 2 as a beneficiary of the Mortgages
Trust;
(iv) the issue of new notes by Funding 2;
(v) the assignment of New Loan Types to the Mortgages Trustee;
(vi) changes to be made to the Reserve Fund Required Amount
and/or the manner in which the Reserve Fund is funded;
(vii) changes to be made to the definitions of Asset Trigger Event
and Non-Asset Trigger Event; and
(viii)the addition of an Additional Funding 1 Liquidity Facility
pursuant to the terms of the Funding 1 Deed of Charge.
(c) The Security Trustee shall only be required to give its consent to
the modifications set out in paragraph (b) above if the Security
Trustee is satisfied that:
(i) in respect of the matters set out in paragraphs (b)(i) to
(b)(iv) inclusive, the relevant conditions precedent to, as
applicable, the addition of New Issuers (as set out in
Clause 2.2 of the Intercompany Loan Terms and Conditions),
the inclusion of Funding 2 as a beneficiary of the Mortgages
Trust (as set out in Clause 13 (Funding 2 becomes a
beneficiary of the Mortgages Trust) of the Mortgages Trust
Deed) and the assignment of New Loans to the Mortgages
Trustee (as set out in Clause 4 (Sale and Purchase of New
Portfolios) of the Mortgage Sale Agreement), have been
satisfied; and
(ii) in respect of the matters set out in paragraphs (b)(i) to
(b)(vii) inclusive, the Security Trustee has received
written confirmation from each of the Rating Agencies that
the relevant modifications will not adversely affect the
then current ratings of the Fourth Issuer Notes.
45
(d) Each Fourth Issuer Secured Creditor hereby acknowledges that the
Security Trustee is required to make the modifications set out in
paragraph (b) above (subject to paragraph (c)), and each Fourth
Issuer Secured Creditor further acknowledges that such
modifications may adversely affect the manner in which the
Mortgages Trustee allocates monies to Funding 1 and/or the manner
in which Funding 1 pays monies to the Fourth Issuer and/or the
amount of monies available to the Fourth Issuer to meet the Fourth
Issuer Secured Obligations. Each Fourth Issuer Secured Creditor
agrees that such modifications shall be binding on it and unless
the Security Trustee otherwise agrees, notice thereof shall be
given by the Fourth Issuer Cash Manager to the Fourth Issuer
Secured Creditors as soon as practicable after the modifications
have been made.
(e) Each of the Fourth Issuer Secured Creditors agrees from time to
time to do and perform such other and further acts and execute and
deliver any and all such other documents and instruments as may be
required by law or requested by the other party at the other
party's expense to establish, maintain and protect the rights and
remedies of the other party and carry out and effect the intent
and purpose of this Clause 23.8.
23.9 RATING AGENCIES
If:
(a) a confirmation of rating or other response by a Rating Agency
is a condition to any action or step under this Deed or any
other Transaction Document; and
(b) a written request for such confirmation or response is
delivered to each Rating Agency by the Fourth Issuer (copied
to the Security Trustee) and either one or more Rating Agency
(each a NON-RESPONSIVE RATING AGENCY) indicates that it does
not consider such confirmation or response necessary in the
circumstance or within 30 days of delivery of such request
elicits no confirmation or response and/or such request
elicits no statement by such Rating Agency that such
confirmation or response could not be given; and
(c) at least one Rating Agency gives such a confirmation or
response based on the same facts,
then such condition shall be deemed to be modified with respect to
the facts set out in the request referred to in (b) so that there
shall be no requirement for the confirmation or response from the
Non-Responsive Rating Agency.
The Security Trustee shall be entitled to treat as conclusive a
certificate by any director, officer or employee of the Fourth
Issuer, Funding 1, the Seller, any investment to bank or financial
adviser acting in relation to the Fourth Issuer Notes as to any
matter referred to in (b) in the absence of manifest error or the
Security Trustee having facts contradicting such certificates
specifically drawn to his attention and the Security Trustee shall
not be responsible for any loss, liability, costs, damages,
expenses or inconvenience that may be causes as a result of
treating such certificate as conclusive.
23.10 AUTHORISATION OR WAIVER OF BREACH
The Security Trustee may, without the consent of the Fourth Issuer
Secured Creditors and without prejudice to its right in respect of any
further or other breach, from time to time and at any time, but only if
and in so far as in its opinion acting reasonably the interests of the
Fourth Issuer Secured Creditors will not be materially prejudiced thereby
authorise or waive, on such terms and conditions (if any) as shall seem
expedient to it, any proposed or actual
46
breach of any of the covenants or provisions contained in or arising
pursuant to any of the Transaction Documents. Any such authorisation or
waiver shall be binding on the Fourth Issuer Secured Creditors and,
unless the Security Trustee otherwise agrees, notice thereof shall be
given by the Fourth Issuer Cash Manager to the Fourth Issuer Secured
Creditors as soon as practicable thereafter.
23.11 INCORPORATION BY REFERENCE
The provisions of Schedule 4 to the Fourth Issuer Trust Deed shall be
deemed to be incorporated in this Deed but as if references therein to
the Note Trustee were to the Security Trustee.
24. REMUNERATION AND INDEMNIFICATION OF THE SECURITY TRUSTEE
24.1 REMUNERATION
(a) The Fourth Issuer shall (subject as hereinafter provided) pay to
the Security Trustee annually a fee of such amount and payable on
such dates as shall from time to time be agreed in writing by the
Fourth Issuer and the Security Trustee, provided that if and for
so long as the Note Trustee and the Security Trustee are the same
person, no such fee shall be payable under this Deed. All such
remuneration shall be payable in accordance with the Fourth Issuer
Pre-Enforcement Revenue Priority of Payments or, as the case may
be, the Fourth Issuer Post-Enforcement Priority of Payments. Such
remuneration shall accrue from day to day and shall be payable up
to and including the date when all of the Fourth Issuer Secured
Obligations have been paid or discharged and the Security Trustee
has released, reassigned and/or discharged the Fourth Issuer
Charged Property as provided in CLAUSE 4.1 (Prior to Payment or
Discharge of Fourth Issuer Secured Obligations).
(b) The Fourth Issuer shall in addition pay to the Security Trustee an
amount equal to the amount of any VAT chargeable in respect of its
remuneration hereunder subject to the Security Trustee issuing to
the Fourth Issuer a proper VAT invoice in respect thereof.
24.2 ADDITIONAL REMUNERATION
In the event of a Fourth Issuer Note Event of Default or Potential Fourth
Issuer Note Event of Default occurring or in the event of the Security
Trustee finding it expedient or necessary or being required to undertake
any duties which the Security Trustee and the Fourth Issuer agree to be
of an exceptional nature or otherwise outside the scope of the normal
duties of the Security Trustee under this Deed, the Fourth Issuer shall
pay to the Security Trustee such additional remuneration as shall be
agreed between the Security Trustee and the Fourth Issuer.
24.3 DISPUTES
In the event of the Security Trustee and the Fourth Issuer failing to
agree upon the amount of any remuneration from time to time pursuant to
CLAUSE 24.1 (Remuneration) or to agree in a case to which CLAUSE 24.2
(Additional Remuneration) above applies, upon whether such duties are of
an exceptional nature or otherwise outside the scope of the normal duties
of the Security Trustee hereunder or upon the amount of such additional
remuneration, such matters shall be determined by an investment bank
(acting as an expert and not as an arbitrator) selected by the Security
Trustee and approved by the Fourth Issuer or, failing such approval,
nominated by the President for the time being of the Law Society of
England and Wales, the expenses being involved in such nomination and the
fees of such investment bank being
47
payable by the Fourth Issuer, and the decision of any such investment
bank shall be final and binding on the Fourth Issuer and the Security
Trustee.
24.4 EXPENSES
In addition to remuneration hereunder, the Fourth Issuer shall on written
request, pay (on the basis of a full indemnity) all other costs, charges
and expenses which the Security Trustee may properly incur in relation to
the negotiation, preparation and execution of, the exercise of its powers
and the performance of its duties under, and in any other manner in
relation to, this Deed, the Fourth Issuer Security and any of the other
Fourth Issuer Transaction Documents to which the Security Trustee is a
party including but not limited to travelling and legal expenses and any
stamp, issue, registration, documentary and other Taxes or duties paid or
payable by the Security Trustee in connection with any action taken or
contemplated by or on behalf of the Security Trustee for enforcing, or
resolving any doubt concerning, or for any other purpose in relation to,
this Deed or any of the other Transaction Documents.
24.5 INDEMNITY
Subject to Clause 22.10 (No Indemnity) and without prejudice to the right
of indemnity by law given to trustees, the Fourth Issuer shall indemnify
the Security Trustee, on an after Tax basis, in respect of all
proceedings (including claims and liabilities in respect of taxes other
than on its own overall net income), claims and demands and all costs,
charges, expenses (including, without prejudice to the generality of the
foregoing, legal and travelling expenses), and liabilities to which it
(or any person appointed by it to whom any trust, power, authority or
discretion may be delegated by it in the execution or purported execution
of the trusts, powers, authorities or discretions vested in it by or
pursuant to this Deed and any of the other Fourth Issuer Transaction
Documents to which the Security Trustee is a party) may be or become
liable or which may be properly incurred by it (or any such person as
aforesaid) in the execution or purported execution of any of its trusts,
powers, authorities and discretions hereunder or its functions under any
such appointment or in respect of any other matter or thing done or
omitted in any way relating to this Deed and any of the other Fourth
Issuer Transaction Documents to which the Security Trustee is a party, or
any such appointment and the Security Trustee shall be entitled to be
indemnified out of the Fourth Issuer Charged Property in respect thereof
save where the same arises as the result of the fraud, negligence or
wilful default of the Security Trustee or its officers or employees. The
Security Trustee shall not be entitled to be indemnified twice in respect
of the same matter pursuant to this Clause and the indemnity contained in
Clause 12.2 (Indemnity) of this Deed.
24.6 SURVIVAL
Unless otherwise specifically stated in any discharge of this Deed, the
provisions of this Clause 24 shall continue in full force and effect
notwithstanding such discharge.
25. APPOINTMENT OF NEW SECURITY TRUSTEE AND REMOVAL OF SECURITY TRUSTEE
25.1 POWER OF FOURTH ISSUER
(a) The power of appointing a new Security Trustee and removing the Security
Trustee or any new Security Trustee shall be vested in the Fourth Issuer,
provided that such appointment or removal must be approved by (i) an
Extraordinary Resolution of the Class A Noteholders, the Class B
Noteholders and the Class C Noteholders and (ii) in writing by each Fourth
Issuer Secured Creditor (such approval not to be reasonably withheld or
delayed). Any appointment of a new Security Trustee and any retirement or
removal of an existing Security Trustee
48
hereof shall as soon as practicable thereafter be notified by the Fourth
Issuer to the Fourth Issuer Secured Creditors.
(b) Any new Security Trustee must (i) meet the requirements of section
26(a)(1) of the US Investment Company Act of 1940; (ii) not be an
affiliate (as defined in Rule 405 of the US Securities Act of 1933, as
amended) of the Fourth Issuer or of any person involved in the
organisation or operation of the Fourth Issuer; (iii) not offer or provide
credit or credit enhancement to the Fourth Issuer; and (iv) execute an
agreement or instrument concerning the Fourth Issuer Notes containing
provisions to the effect set forth in section 26(a)(3) of the US
Investment Company Act of 1940.
25.2 POWER OF SECURITY TRUSTEE
Notwithstanding the provisions of Clause 25.1 (Power of Fourth Issuer),
the Security Trustee may (as attorney for the Fourth Issuer) upon giving
prior written notice to the Third Issuer but without the consent of the
Fourth Issuer or the Fourth Issuer Secured Creditors appoint any person
established or resident in any jurisdiction (whether a trust corporation
or not) to act either as a separate security trustee or as a co-trustee
jointly with the Security Trustee:
(a) if the Security Trustee considers such appointment to be in the
interests of the Fourth Issuer Secured Creditors (or any of them);
(b) for the purposes of conforming to any legal requirement,
restrictions or conditions in any jurisdiction in which any
particular act or acts are to be performed or any Fourth Issuer
Charged Property is or is to be located; or
(c) for the purposes of obtaining a judgment in any jurisdiction or
the enforcement in any jurisdiction of either a judgment already
obtained or any of the provisions of this Deed or any of the other
Transaction Documents to which the Security Trustee is a party or
obligations arising pursuant thereto or any of the security
constituted by or pursuant to this Deed.
The Fourth Issuer hereby irrevocably appoints the Security Trustee to be
its attorney in its name and on its behalf to execute any such instrument
of appointment. Such a person shall (subject always to the provisions of
this Deed or any of the other Transaction Documents to which the Security
Trustee is a party) have such trusts, powers, authorities and discretions
(not exceeding those conferred on the Security Trustee by this Deed or
any of the other Transaction Documents to which the Security Trustee is a
party) and such duties and obligations as shall be conferred or imposed
on it by the instrument of appointment. The Security Trustee shall have
power in like manner to remove any such person. Such proper remuneration
as the Security Trustee may pay to any such person, together with any
attributable costs, charges and expenses incurred by it in performing its
function as such separate trustee or co-trustee, shall for the purposes
of this Deed be treated as costs, charges and expenses incurred by the
Security Trustee.
25.3 MULTIPLE TRUSTEES
Whenever there shall be more than two security trustees hereof, the
majority of such security trustees shall be competent to execute and
exercise all the trusts, powers, authorities and discretions vested by
this Deed and any of the other Transaction Documents in the Security
Trustee generally.
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26. RETIREMENT OF SECURITY TRUSTEE
Any security trustee for the time being of this Deed may retire at any
time upon giving not less than three calendar months' prior notice in
writing to the Fourth Issuer without assigning any reason therefor and
without being responsible for any costs resulting from such retirement.
Provided, however, that the retirement or removal of any security trustee
shall not become effective unless there remains at least one security
trustee hereof in office upon such retirement or removal. The Fourth
Issuer covenants that, in the event of a security trustee (being a sole
security trustee) giving notice under this Clause or being removed as
referred to in Clause 25.1 (Power of Fourth Issuer), it shall use its
best endeavours to procure a new security trustee of this Deed to be
appointed as soon as reasonably practicable thereafter. If within 60 days
of having given notice of its intention to retire, the Fourth Issuer has
failed to appoint a replacement Security Trustee, the outgoing Security
Trustee will be entitled to appoint its successor (provided that such
successor is acceptable to the Rating Agencies and will agree to the
terms of this Deed) and that the Rating Agencies confirm in writing that
the current ratings of the Notes shall not be either downgraded, reviewed
or withdrawn as a result of such appointment).
27. TRUST INDENTURE ACT PREVAILS
If any provision of this Deed limits, qualifies or conflicts with another
provision which is required to be included in this Deed by, and is not
subject to a contractual waiver under, the U.S. Trust Indenture Act of
1939, as amended, the required provision of that act shall prevail.
28. NOTICES AND DEMANDS
28.1 SERVICE OF NOTICES
Any notices to be given pursuant to this Deed to any of the parties
hereto shall be in writing and shall be sufficiently served if sent to
the addresses given in Clause 28.2 (Addresses) 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.
28.2 ADDRESSES
The addresses referred to in this Clause 28.2 are as follows:
(a) in the case of the Fourth Issuer, to Permanent Financing (No. 4)
PLC at Xxxxxxxxx House, Guildhall Yard, London EC2V 5AE (facsimile
number x00 (0) 00 0000 0000) for the attention of the Directors
with a copy to Halifax plc at the address and facsimile number set
out in paragraph below;
(b) in the case of the Security Trustee and the Note Trustee, to The
Bank of New York, 48th Floor, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX
(facsimile number x00 (0) 00 0000 0000) for the attention of
Global Structured Finance - Corporate Trust;
(c) in the case of the Principal Paying Agent, the Agent Bank, the
Registrar and the Transfer Agent, to Citibank, N.A., London
Branch, 0 Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number
x00 (0) 00 0000 0000) for the attention of Agency and Trust;
50
(d) in the case of the Fourth Issuer Cash Manager, to Halifax plc at
Trinity Road (LP/3/3/SEC), Halifax, West Yorkshire HX1 2RG
(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
number x00 (0) 00 0000 0000) for the attention of the Head of
Capital Markets and Securitisation;
(e) in the case of the Fourth Issuer Account Bank, to Bank of Scotland
plc, Leeds Business Centre, 000 Xxxxxxxxxx Xxxxxx, Xxxxx, XX0 0XX
(facsimile number x00 (0) 0000 000000) for the attention of the
Associate Director with copies to: Bank of Scotland plc, c/o
Halifax plc, Bradford Business Centre, 00 Xxxx Xxxxxx, Xxxxxxxx
XX0 0XX (facsimile number x00 (0) 0000 000000) for the attention
of the Associate Director; Halifax plc, Trinity Road (LP/3/3/SEC),
Halifax, West Yorkshire HX1 2RG (facsimile number +44 (0) 113 235
7511) for the attention of the Head of Mortgage Securitisation;
and HBOS Treasury Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx
XX0X 0XX (facsimile number x00 (0) 000000 0000) for the attention
of Head of Capital Markets and Securitisation;
(f) in the case of the US Paying Agent, to Citibank, N.A., New York
Branch, 14th Floor, Zone 0, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 for the attention of Agency and Trust (facsimile number
x0 000 000 0000);
(g) in the case of the Series 1 Fourth Issuer Swap Providers, to
Credit Suisse First Boston International, Xxx Xxxxx Xxxxxx,
Xxxxxx X00 0XX (facsimile number x00 (0) 00 0000 0000) for the
attention of Managing Director - Legal Department;
(h) in the case of the Series 2 Fourth Issuer Swap Providers, to
Credit Suisse First Boston International, Xxx Xxxxx Xxxxxx,
Xxxxxx X00 0XX (facsimile number x00 (0) 00 0000 0000) for the
attention of Managing Director - Legal Department ;
(i) in the case of the Series 3 Fourth Issuer Swap Providers, to
Banque AIG, London Branch, Xxx Xxxxxx Xxxxxx, Xxxxxx X0X 0XX
(facsimile number x00 (0) 00 0000 0000) for the attention of Swaps
Administration, with a copy to AIG Financial Products Corp., 00
Xxxxxxx Xxxx, Xxxxxx, XX 00000-0000, XXX (facsimile number
x0 000 000 0000) for the attention of Chief Financial Officer
(with a copy to General Counsel);
(j) in the case of the Series 4 Fourth Issuer Swap Providers, to
JPMorgan Chase Bank, 000 Xxxxxx Xxxx, Xxxxxx XX0X 0XX (facsimile
number x00 (0) 00 0000 0000) for the attention of Head of Legal
Department - FX and Derivatives Group;
(k) in the case of the Series 5 Fourth Issuer Swap Providers, to
Banque AIG, London Branch, Xxx Xxxxxx Xxxxxx, Xxxxxx X0X 0XX
(facsimile number x00 (0) 00 0000 0000) for the attention of Swaps
Administration, with a copy to AIG Financial Products Corp., 00
Xxxxxxx Xxxx, Xxxxxx, XX 00000-0000, XXX (facsimile number
x0 000 000 0000) for the attention of Chief Financial Officer
(with a copy to General Counsel);
(l) in the case of the Series 5 Class A Fourth Issuer Swap Providers,
to HBOS Treasury Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx
XX0X 0XX (facsimile number x00 (0) 00 0000 0000) for the attention
of the Head of Legal;
51
(m) in the case of the Corporate Services Provider, to Structured
Finance Management Limited, Xxxxxxxxx House, Guildhall Yard,
London EC2V 5AE (facsimile number x00 (0) 00 0000 0000) for the
attention of the Directors;
(n) in the case of Fitch Ratings, to Fitch Ratings Limited, 000
Xxxxxxxx Xxxxxxxx, Xxxxxx XX0X 0XX (facsimile number
x00 (0) 00 0000 0000) for the attention of SF Surveillance;
(o) in the case of Moody's, to Xxxxx'x Investor Services, 0 Xxxxxxx
Xxxxx, Xxxxxxx Xxxx, Xxxxxx XX0X 0XX (facsimile number +44 (0) 20
7772 5400) for the attention of Asset Backed Finance; and
(p) in the case of S&P, to Standard & Poor's, Garden House, 00
Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number
x00 (0) 00 0000 0000) for the attention of the Structured Finance
Surveillance Group,
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 28.
29. FURTHER PROVISIONS
29.1 EVIDENCE OF INDEBTEDNESS
In any action, proceedings or claim relating to this Deed or the charges
contained in this Deed, a statement as to any amount due to any Fourth
Issuer Secured Creditor or of the Fourth Issuer Secured Obligations or
any part thereof or a statement of any amounts which have been notified
to the Security Trustee as being amounts due to any Fourth Issuer Secured
Creditor which is certified as being correct by an officer of the
Security Trustee or an officer of the relevant Fourth Issuer Secured
Creditor shall, save in the case of manifest error, be conclusive
evidence that such amount is in fact due and payable.
29.2 RIGHTS CUMULATIVE, WAIVERS
The respective rights of the Security Trustee, the Fourth Issuer Secured
Creditors and any Receiver are cumulative, and may be exercised as often
as they consider appropriate and are in addition to their respective
rights under the general law. The respective rights of the Security
Trustee, the Fourth Issuer Secured Creditors and any Receiver in relation
to this Deed (whether arising under this Deed or under the general law)
shall not be capable of being waived or varied otherwise than by express
waiver or variation in writing; and, in particular, any failure to
exercise or any delay in exercising any such rights shall not operate as
a variation or waiver of that or any other such right; any defective or
partial exercise of such rights shall not preclude any other or further
exercise of that or any other such right; and no act or course of conduct
or negotiation on their part or on their behalf shall in any way preclude
them from exercising any such right or constitute a suspension or any
variation of any such right.
29.3 INVALIDITY OF ANY PROVISION
If any of the provisions of this Deed become invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired.
52
29.4 SEVERABILITY
Any provision of this Deed which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by
applicable law, the Fourth Issuer hereby waives any provision of law but
only to the extent permitted by law which renders any provision of this
Deed prohibited or unenforceable in any respect.
29.5 COUNTERPARTS
This Deed may be executed in any number of counterparts 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 Deed 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 Deed.
29.6 NEW INTERCOMPANY LOAN AGREEMENTS
If Funding 1 enters into a New Intercompany Loan Agreement, then the
parties hereto shall execute such documents and take such action as may
be necessary or required by the Security Trustee for the purpose of
including the New Issuer, any New Funding 1 Swap Provider, any New Start-
Up Loan Provider or any other person who has executed an Accession
Undertaking or any New Term Advance in the Transaction Documents.
29.7 VARIATION
No variation of any provision(s) of this Deed shall be effective unless
it is in writing and signed by (or by a person duly authorised by) each
of the parties hereto.
29.8 EXCLUSION OF THIRD PARTY RIGHTS
The parties to this Deed do not intend that any term of this Deed should
be enforced, by virtue of the Contracts (Rights of Third Parties) Act
1999, by any person who is not a party to this Deed.
30. CHOICE OF LAW
30.1 GOVERNING LAW
This Deed is governed by, and shall be construed in accordance with
English law.
30.2 SUBMISSION TO JURISDICTION
Each party to this Deed hereby irrevocably submits to the non-exclusive
jurisdiction of the English courts in any action or proceeding arising
out of or relating to this Deed, 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 Deed 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.
53
30.3 AGENT FOR PROCESS
The U.S. Paying Agent shall at all times maintain an agent for service of
process of any other documents in proceedings in England or any
proceedings in connection with this Deed. Such agent shall be the
Principal Paying Agent having its office at 0 Xxxxxxxxx Xxxxxx, Xxxxxx
XX0X 0XX (and by execution of this Deed, the Principal Paying Agent
hereby accepts such appointment). Any writ judgment or other notice of
legal process shall be sufficiently served on the Fourth Issuer if
delivered to such agent at its address for the time being. The U.S.
Paying Agent undertakes not to revoke the authority of the above agent
and if, for any reason, the Security Trustee requests the U.S. Paying
Agent to do so, it shall promptly appoint another such agent with an
address in England and advise the Note Trustee, the Fourth Issuer Swap
Providers, the Corporate Services Provider and the Security Trustee
thereof. If following such a request the U.S. Paying Agent fails to
appoint another agent the Security Trustee shall be entitled to appoint
one on their behalf.
The U.S. Paying Agent agrees that failure by a process agent to notify
the U.S. Paying Agent of the process will not invalidate the proceedings
concerned.
IN WITNESS WHEREOF the parties hereto have caused this Deed to be duly executed
and delivered as a deed the day and year first before written.
54
SIGNATORIES
THE FOURTH ISSUER
EXECUTED as a DEED by )
PERMANENT FINANCING (NO. 4) PLC )
acting by director )
and director/secretary )
THE SECURITY TRUSTEE
EXECUTED as a DEED by )
THE BANK OF NEW YORK )
in its capacity as Security Trustee )
acting by its authorised signatory )
Authorised Signatory:
THE NOTE TRUSTEE
EXECUTED as a DEED by )
THE BANK OF NEW YORK )
in its capacity as Note Trustee )
acting by its authorised signatory )
Authorised Signatory:
AGENT BANK, PRINCIPAL PAYING AGENT, REGISTRAR AND TRANSFER AGENT
EXECUTED as a DEED on behalf of
CITIBANK, N.A., a company incorporated in )
the United States of America, )
in its capacities as Agent Bank, Principal )
Paying Agent, Registrar and Transfer Agent, )
by )
being a person who, in accordance with the laws
of that territory, is acting under the authority
of the company
55
THIRD ISSUER CASH MANAGER
EXECUTED as a DEED by )
HALIFAX PLC )
in its capacity as Third Issuer Cash Manager )
acting by its attorney )
in the presence of )
Witness's Signature:
Name:
Address:
FOURTH ISSUER ACCOUNT BANK
EXECUTED as a DEED by )
THE GOVERNOR AND COMPANY OF )
THE BANK OF SCOTLAND )
in its capacity as Account Bank )
acting by two directors/a director )
and the secretary )
Director
Director/Secretary
U.S. PAYING AGENT
EXECUTED as a DEED by )
CITIBANK, N.A., NEW YORK BRANCH )
a company incorporated in )
the United States of America, )
in its capacity as U.S. Paying Agent )
by )
being a person who, in accordance with the laws
of that territory, is acting under the authority
of the company
56
SERIES 1 FOURTH ISSUER SWAP PROVIDER
EXECUTED as a DEED by )
CREDIT SUISSE FIRST BOSTON )
INTERNATIONAL )
in its capacity as Series 1 Fourth Issuer )
Currency Swap Provider )
acting by its attorney )
in the presence of: )
Witness's Signature:
Name:
Address:
SERIES 2 FOURTH ISSUER SWAP PROVIDER
EXECUTED as a DEED by )
CREDIT SUISSE FIRST BOSTON )
INTERNATIONAL )
in its capacity )
as Series 2 Fourth Issuer )
Swap Provider )
acting by its attorney )
in the presence of: )
Witness's Signature:
Name:
Address:
SERIES 3 FOURTH ISSUER SWAP PROVIDER
EXECUTED as a DEED by )
BANQUE AIG, LONDON BRANCH )
in its capacity )
AS SERIES 3 FOURTH ISSUER SWAP PROVIDER )
acting by its attorney )
in the presence of: )
Witness's Signature:
Name:
Address:
57
SERIES 4 FOURTH ISSUER SWAP PROVIDER
EXECUTED as a DEED by )
JPMORGAN CHASE BANK )
in its capacity as )
SERIES 4 FOURTH ISSUER SWAP PROVIDER )
acting by its attorney )
in the presence of: )
Witness's Signature:
Name:
Address:
SERIES 5 FOURTH ISSUER SWAP PROVIDER
EXECUTED as a DEED by )
BANQUE AIG, LONDON BRANCH )
in its capacity as )
SERIES 5 FOURTH ISSUER SWAP PROVIDER )
acting by its attorney )
in the presence of: )
Witness's Signature:
Name:
Address:
SERIES 5 CLASS A FOURTH ISSUER SWAP PROVIDER
EXECUTED as a DEED by )
HBOS TREASURY SERVICES PLC )
in its capacity as )
SERIES 5 CLASS A FOURTH ISSUER SWAP PROVIDER )
acting by two authorised signatories: )
CORPORATE SERVICES PROVIDER
EXECUTED as a DEED by )
STRUCTURED FINANCE )
58
MANAGEMENT LIMITED )
in its capacity as )
CORPORATE SERVICES PROVIDER )
acting by two directors/ )
a director and the secretary )
59
SCHEDULE 1
POWER OF ATTORNEY
THIS POWER OF ATTORNEY is made on [{circle}] by PERMANENT FINANCING (NO. 4) PLC
(registered number 4907355) whose registered office is Xxxxxxxxx House,
Guildhall Yard, London EC2V 5AE (the PRINCIPAL).
WHEREAS:
(1) By virtue of a deed of charge (the FOURTH ISSUER DEED OF CHARGE) dated
[{circle}] between, inter alia, the Principal, the Security Trustee, the
Note Trustee, the Agent Bank, the Principal Paying Agent, the Registrar,
the Transfer Agent, the Fourth Issuer Cash Manager, the Fourth Issuer
Account Bank, the Corporate Services Provider and the Fourth Issuer Swap
Providers (each as referred to therein) provision was made for the
execution by the Principal of this Power of Attorney.
(2) Words and phrases in this Power of Attorney shall (save where expressed
to the contrary) have the same meanings respectively as the words and
phrases in the Fourth Issuer Deed of Charge.
NOW THIS POWER OF ATTORNEY WITNESSETH:
1. The Principal hereby irrevocably and by way of security for the
performance of the covenants, conditions, obligations and undertakings on
the part of the Principal contained in the Fourth Issuer Deed of Charge
appoints The Bank of New York and any other person or persons for the
time being the security trustee or security trustees of and under the
Fourth Issuer Deed of Charge (the ATTORNEY) and any receiver (including
any administrative receiver) and any manager (the RECEIVER) and/or
administrator (the ADMINISTRATOR) appointed from time to time by the
Attorney or on its behalf its true and lawful attorney for and in the
Principal's name or otherwise jointly and severally to do any act matter
or thing which the Attorney, Receiver or Administrator considers in each
case bona fide necessary for the protection or preservation of the
Attorney's interests and rights in and to the Fourth Issuer Charged
Property or which ought to be done under the covenants, undertakings and
provisions contained in the Fourth Issuer Deed of Charge on or at any
time after the service of a Fourth Issuer Note Acceleration Notice or in
any other circumstances where the Attorney has become entitled to take
the steps referred to in Clauses 8.4 (Power of Sale) to 8.10 (Deficiency
or Addition of Payment) (inclusive) of the Fourth Issuer Deed of Charge
including (without limitation) any or all of the following:
(a) to do every act or thing which the Attorney, Receiver or
Administrator may deem to be necessary, proper or expedient for
fully and effectually vesting, transferring or assigning the
Fourth Issuer Security and/or the Fourth Issuer Charged Property
or any part thereof and/or the Principal's estate, right, title,
benefit and/or interest therein or thereto in or to the Attorney
and its successors in title or other person or persons entitled to
the benefit thereof in the same manner and as fully and
effectually in all respects as the Principal could have done; and
(b) the power by writing under its hand by an officer of the Attorney
(including every Receiver appointed under the Fourth Issuer Deed
of Charge) from time to time to appoint a substitute attorney
(each a SUBSTITUTE) who shall have power to act on behalf of the
Principal as if that Substitute shall have been originally
appointed
60
Attorney by this Power of Attorney and/or to revoke any such
appointment at any time without assigning any reason therefor.
2. In favour of the Attorney, any Receiver and/or Administrator and/or
Substitute, or a person dealing with any of them and the successors and
assigns of such a person, all acts done and documents executed or signed
by the Attorney, a Receiver, an Administrator or a Substitute in the
purported exercise of any power conferred by this Power of Attorney shall
for all purposes be valid and binding on the Principal and its successors
and assigns.
3. The Principal irrevocably and unconditionally undertakes to indemnify the
Attorney and each Receiver and/or Administrator and/or Substitute
appointed from time to time by the Attorney and their respective estates
against all actions, proceedings, claims, costs, expenses and liabilities
of every description arising from the exercise, or the purported
exercise, of any of the powers conferred by this Power of Attorney, save
where the same arises as the result of the fraud, negligence or wilful
default of the relevant Indemnified Party or its officers or employees.
4. The provisions of Clause 3 shall continue in force after the revocation
or termination, howsoever arising, of this Power of Attorney.
5. The laws of England shall apply to this Power of Attorney and the
interpretation thereof and to all acts of the Attorney and each Receiver
and/or Administrator and/or Substitute carried out or purported to be
carried out under the terms hereof.
6. The Principal hereby agrees at all times hereafter to ratify and confirm
whatsoever the said Attorney or its attorney or attorneys or any Receiver
or Administrator or Substitute shall properly and lawfully do or cause to
be done in and concerning the Security Trustee's Fourth Issuer Security
and/or the Fourth Issuer Charged Property.
IN WITNESS WHEREOF this Power of Attorney has been executed and delivered as a
deed by the Principal the day and year first before written.
EXECUTED as a DEED by )
PERMANENT FINANCING (NO. 4) PLC )
acting by director )
and director/secretary )
61
SCHEDULE 2
FORM OF NOTICE OF ASSIGNMENT AND CONSENT TO ASSIGNMENT
FORM OF NOTICE OF ASSIGNMENT
From: Permanent Financing (No. 4) PLC (the FOURTH ISSUER)
The Bank of New York (the SECURITY TRUSTEE)
To: Credit Suisse First Boston (Europe) Limited
Citigroup Global Markets Limited
UBS Limited Bank A.G. London Branch
(together, the MANAGERS)
and
Credit Suisse First Boston (Europe) Limited
Citigroup Global Markets Limited
UBS Securities LLC Inc.,
Xxxxxx Xxxxxxx & Co International Limited (together, the UNDERWRITERS)
[{circle}]
Dear Sirs,
U.S.$1,500,000,000 SERIES 1 CLASS A ASSET BACKED FLOATING RATE NOTES DUE
DECEMBER 2004
U.S.$50,000,000 SERIES 1 CLASS B ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
U.S.$55,000,000 SERIES 1 CLASS M ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
U.S.${circle} SERIES 1 CLASS C ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
U.S.$1,750,000,000 SERIES 2 CLASS A ASSET BACKED FLOATING RATE NOTES DUE MARCH
2009
U.S.$41,000,000 SERIES 2 CLASS B ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
U.S.$45,000,000 SERIES 2 CLASS M ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
U.S.$38,000,000 SERIES 2 CLASS C ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
U.S.$1,500,000,000 SERIES 3 CLASS A ASSET BACKED FLOATING RATE NOTES DUE
[{circle}]
U.S.$35,000,000 SERIES 3 CLASS B ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
U.S.$38,000,000 SERIES 3 CLASS M ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
U.S.$32,000,000 SERIES 3 CLASS C ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
[E]1,000,000,000 SERIES 4 CLASS A1 ASSET BACKED FLOATING RATE NOTES DUE JUNE
2042
{pound-sterling}600,000,000 SERIES 4 CLASS A2 ASSET BACKED FIXED-FLOATING RATE
NOTES DUE JUNE 2042
[E]65,000,000 SERIES 4 CLASS B ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
[E]68,000,000 SERIES 4 CLASS M ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
[E]{circle} SERIES 4 CLASS C ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
[E]700,000,000 SERIES 5 CLASS A ASSET BACKED FIXED RATE NOTES DUE JUNE 2042
[E]17,000,000 SERIES 5 CLASS B ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
[E]18,000,000 SERIES 5 CLASS M ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
[E]15,000,000 SERIES 5 CLASS C ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
(the NOTES)
We hereby give you notice that by a deed of charge dated [{circle}] and made
between the Fourth Issuer, the Security Trustee and others (the FOURTH ISSUER
DEED OF CHARGE), the Fourth Issuer assigned to the Security Trustee, inter
alia, all of its right, title, interest and benefit, present and future, in, to
and
62
under the underwriting agreement and the subscription agreement relating to the
Notes both dated [{circle}] and made between, inter alios, the Fourth Issuer
and the Underwriters or Managers (as appropriate) named therein (together the
AGREEMENTS).
You are authorised and instructed henceforth to deal with the Security Trustee
in relation to the Agreement without further reference to us.
This notice is irrevocable. Please acknowledge receipt of this notice to the
Security Trustee by executing the attached Consent to Assignment.
Yours faithfully,
...........................................
For and on behalf of
PERMANENT FINANCING (NO. 4) PLC
...........................................
For and on behalf of
THE BANK OF NEW YORK
63
CONSENT TO ASSIGNMENT
From: Credit Suisse First Boston (Europe) Limited
Citigroup Global Markets Limited
UBS Limited
Dresdner Bank A.G. London Branch
(together, the MANAGERS)
and
Credit Suisse First Boston (Europe) Limited
Citigroup Global Markets Limited
UBS Securities LLC X.X Xxxxxx Securities Inc.,
Xxxxxx Xxxxxxx & Co International Limited
(together, the UNDERWRITERS)
To: The Bank of New York (the SECURITY TRUSTEE)
Permanent Financing (No. 4) PLC (the FOURTH ISSUER)
[{circle}]
Dear Sirs,
We hereby acknowledge receipt of the notice of assignment dated [{circle}]
relating to the Fourth Issuer Deed of Charge dated [{circle}] between the
Fourth Issuer, the Security Trustee and others as adequate notice of the
assignment described therein.
We agree to deal only with Security Trustee in relation to the underwriting
agreement and the subscription agreement dated, in each case, [{circle}]
between the Fourth Issuer and the Underwriters or the Underwriters or Managers
(as appropriate) named therein (together, the AGREEMENTS) without any reference
to the Fourth Issuer.
We have not received from any other person any notice of assignment or charge
of or any interest in the Agreement.
Yours faithfully,
...........................................
For and on behalf of
Credit Suisse First Boston (Europe) Limited on behalf of all of the Managers
...........................................
For and on behalf of
Credit Suisse First Boston (Europe) Limited
on behalf of all of the Underwriters
64
