DRAFT: 14.07.04 EXHIBIT 4.4
FIFTH ISSUER DEED OF CHARGE
DATED [22ND JULY], 2004
PERMANENT FINANCING (NO. 5) 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
XXXXX & XXXXX LLP
LONDON
CONTENTS
CLAUSE PAGE
1. Interpretation......................................................... 2
2. Fifth Issuer's Covenant to Pay......................................... 3
3. Security and Declaration of Trust...................................... 3
4. Release of Fifth Issuer Charged Property............................... 5
5. Payments out of the Fifth Issuer Accounts, Authorised Investments
and Application of Cash prior to Enforcement........................... 6
6. Payments out of the Fifth Issuer Accounts upon Enforcement............. 8
7. Conflict............................................................... 16
8. The Security Trustee's Powers.......................................... 17
9. Receiver............................................................... 20
10. Protection of Third Parties............................................ 23
11. Protection of Security Trustee and Receiver............................ 24
12. Expenses and Indemnity................................................. 24
13. Protection of Security................................................. 26
14. Crystallisation........................................................ 27
15. Power of Attorney, etc................................................. 28
16. Other Security, etc.................................................... 28
17. Avoidance of Payments.................................................. 29
18. Set Off................................................................ 30
19. Execution of Documents................................................. 30
20. Exercise of Certain Rights............................................. 30
21. Covenants and Warranties............................................... 32
22. Supplements to the Trustee Acts........................................ 36
23. Supplemental provisions regarding the Security Trustee................. 42
24. Remuneration and Indemnification of the Security Trustee............... 46
25. Appointment of New Security Trustee and removal of Security Trustee.... 48
26. Retirement of Security Trustee......................................... 49
27. Trust Indenture Act prevails........................................... 49
28. Notices and Demands.................................................... 49
29. Further Provisions..................................................... 51
30. Choice of Law.......................................................... 52
SCHEDULE
1. Power of Attorney...................................................... 59
2. Form of Notice of Assignment and Consent to Assignment................. 61
Signatories.................................................................. 54
THIS FIFTH ISSUER DEED OF CHARGE is made on [{circle}], 2004
BETWEEN:
(1) PERMANENT FINANCING (NO. 5) PLC, (registered number 5114399) 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 FIFTH 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 at 0 Xxxxxxxxx Xxxxxx, Xxxxxx
XX0X 0PA and acting in its capacity as the Agent Bank;
(5) CITIBANK, N.A., acting through its office 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 at 0 Xxxxxxxxx Xxxxxx, Xxxxxx
XX0X 0PA and acting in its capacity as the Registrar;
(7) CITIBANK, N.A., acting through its office at 0 Xxxxxxxxx Xxxxxx, Xxxxxx
XX0X 0PA 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 Fifth Issuer Cash
Manager;
(9) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND, established by an Act
of the Parliament of Scotland in 1695, acting through its office situated
at 00 Xxxxxxxxxx Xxxxxx, Xxxxx XX0 0XX, and acting in its capacity as the
Fifth 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 PROVIDERS]; 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 Fifth Issuer Corporate Services Agreement.
WHEREAS:
(A) This Deed secures and will secure, inter alia, the Fifth Issuer Secured
Obligations.
(B) The Fifth Issuer will on the date of this Deed issue the Fifth Issuer
Notes pursuant to the Fifth Issuer Trust Deed.
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(C) By the Fifth 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 Fifth Issuer for the benefit of the Noteholders.
(D) By the Fifth Issuer Cash Management Agreement, the Fifth Issuer Cash
Manager has agreed to act as cash manager and to provide certain
administration and cash management services to the Fifth Issuer.
(E) By the Fifth Issuer Bank Account Agreement, the Fifth Issuer Account Bank
has agreed to provide certain bank account services to the Fifth Issuer.
(F) By the Series 1 Fifth Issuer Swap Agreements, each Series 1 Fifth Issuer
Swap Provider has agreed to enter into dollar/sterling currency swaps
with the Fifth Issuer in relation to the Series 1 Fifth Issuer Notes.
(G) By the Series 2 Fifth Issuer Swap Agreements, each Series 2 Fifth Issuer
Swap Provider has agreed to enter into dollar/sterling currency swaps
with the Fifth Issuer in relation to the Series 2 Fifth Issuer Notes.
(H) By the Series 3 Fifth Issuer Swap Agreements, each Series 3 Fifth Issuer
Swap Provider has agreed to enter into dollar/sterling currency swaps
with the Fifth Issuer in relation to the Series 3 Fifth Issuer Notes.
(I) By the Series 4 Fifth Issuer Swap Agreements, the Series 4 Fifth Issuer
Swap Provider has agreed to enter into euro/sterling currency swaps with
the Fifth Issuer in relation to the Series 4 Fifth Issuer Notes.
(J) By the Series 5 Class A1 Fifth Issuer Euro Currency Swap Agreement, the
Series 5 Class A1 Fifth Issuer Euro Currency Swap Provider has agreed to
enter into a euro/sterling currency swap with the Fifth Issuer in
relation to the Series 5 Class A1 Fifth Issuer Notes.
(K) By the Series 5 Class A1 Fifth Issuer Interest Rate Swap Agreement, the
Series 5 Class A1 Fifth Issuer Interest Rate Swap Provider has agreed to
enter into a fixed/floating interest rate swap with the Fifth Issuer in
relation to the Series 5 Class A1 Fifth Issuer Notes.
(L) By the Fifth Issuer Corporate Services Agreement, the Corporate Services
Provider has agreed to act as corporate services provider to the Fifth
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 Fifth issuer master
definitions and construction schedule signed for the purposes of
identification by Xxxxx & Xxxxx and Xxxxxx Xxxxxx Xxxxx & Xxxx on
[{circle}], 2004, (the FIFTH 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 Fifth Issuer Master Definitions and Construction Schedule
shall, except where the context otherwise requires and save where
otherwise defined herein, have the same meanings in this Deed and this
Deed shall be construed in accordance with the interpretation provisions
set out in CLAUSE 2
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(Interpretation and Construction) of the Fifth Issuer Master Definitions
and Construction Schedule.
2. FIFTH ISSUER'S COVENANT TO PAY
The Fifth Issuer covenants with and undertakes to the Security Trustee
for itself and on trust for the Fifth Issuer Secured Creditors that it
will, subject to the provisions of the Fifth 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 Fifth
Issuer Secured Creditors) or any of the other Fifth Issuer Secured
Creditors by the Fifth Issuer whether actually or contingently,
under this Deed or any other Fifth Issuer Transaction Document;
and
(b) observe, perform and satisfy all its other obligations and
liabilities under this Deed and/or any other Fifth Issuer
Transaction Document.
3. SECURITY AND DECLARATION OF TRUST
3.1 CONTRACTUAL RIGHTS
The Fifth Issuer, by way of first fixed security for the payment or
discharge of the Fifth Issuer Secured Obligations, subject to CLAUSE 4
(Release of Fifth Issuer Charged Property), hereby assigns (or, to the
extent not assignable, charges) to the Security Trustee (on trust for
itself and for the other Fifth Issuer Secured Creditors) all of its
right, title, interest and benefit, present and future, in, to and under
the Fifth Issuer Transaction Documents including, without limitation, all
rights to receive payment of any amounts which may become payable to the
Fifth Issuer thereunder and all payments received by the Fifth 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 FIFTH ISSUER ACCOUNTS
The Fifth Issuer, by way of first fixed security for the payment or
discharge of the Fifth Issuer Secured Obligations, subject to CLAUSE 4
(Release of Fifth Issuer Charged Property), hereby assigns (or, to the
extent not assignable, charges) to the Security Trustee (on trust for
itself and for the other Fifth Issuer Secured Creditors) 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 Fifth Issuer
Accounts, together with all interest accruing from time to time thereon
and the debt represented thereby.
3.3 AUTHORISED INVESTMENTS
The Fifth Issuer, by way of first fixed security for the payment or
discharge of the Fifth Issuer Secured Obligations, subject to CLAUSE 4
(Release of Fifth Issuer Charged Property), hereby charges by way of
first fixed charge in favour of the Security Trustee (on trust for itself
and for the other Fifth Issuer Secured Creditors) 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 Fifth
Issuer using moneys standing to the credit of the Fifth Issuer Accounts
and all
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moneys, income and proceeds payable thereunder or accrued thereon and the
benefit of all covenants relating thereto and all rights and remedies for
enforcing the same.
3.4 FLOATING CHARGE
The Fifth Issuer, by way of security for the payment or discharge of the
Fifth Issuer Secured Obligations, subject to CLAUSE 4 (Release of Fifth
Issuer Charged Property), hereby charges to the Security Trustee (on
trust for itself and for the other Fifth Issuer Secured Creditors) 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 but excepting from the foregoing exclusion the
undertakings, property and assets of the Fifth Issuer situated in
Scotland or governed by Scots law, all of which are charged by the
floating charge hereby created. 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 CLAUSE 3.4
(Floating Charge) (inclusive) is made with full title guarantee or, in
relation to any rights or assets situated in Scotland or governed by
Scots law, with absolute warrandice.
3.6 ACKNOWLEDGEMENTS AND UNDERTAKINGS
Each of the Fifth 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 Fifth 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 Fifth Issuer Transaction
Documents.
3.7 DECLARATION OF TRUST
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 Fifth Issuer Transaction Documents for the Fifth
Issuer Secured Creditors in respect of the Fifth 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 Fifth 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 Fifth
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 Fifth Issuer in
the exercise or non-exercise of
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any such rights, powers, authorities, discretions and remedies or to
comply with any direction given by the Fifth Issuer in relation thereto.
4. RELEASE OF FIFTH ISSUER CHARGED PROPERTY
4.1 PRIOR TO PAYMENT OR DISCHARGE OF FIFTH ISSUER SECURED OBLIGATIONS
(a) Except to the extent expressly provided in this CLAUSE 4, the Security
Trustee shall, release, reassign or discharge the Fifth Issuer Charged
Property or any part thereof only upon receipt of a written request from
the Fifth 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 Fifth Issuer Charged Property, the
Fifth 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 Fifth
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 Fifth 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 Fifth 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
Fifth 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
Fifth 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 Fifth 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 Fifth Issuer Notes;
(d) Whenever any part of the Fifth Issuer Charged Property is to be released
from the security constituted by this Deed, the Fifth 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 Fifth
Issuer may (i) make cash payments out of the Fifth Issuer Account relating
to the Fifth Issuer Notes as and to the extent permitted or required by
the Fifth Issuer Transaction Documents and (ii) take any other action
permitted or required by the Fifth Issuer Transaction Documents not
inconsistent with the Trust Indenture Act.
4.2 ON PAYMENT OR DISCHARGE OF FIFTH ISSUER SECURED OBLIGATIONS
Upon the irrevocable and unconditional payment or discharge (or any
combination of the foregoing) of all the Fifth Issuer Secured
Obligations, the Security Trustee shall, at the written request and cost
of the Fifth Issuer, release, reassign or discharge the Fifth Issuer
Charged Property to, or to the order of, the Fifth Issuer.
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4.3 DISPOSAL OF AUTHORISED INVESTMENTS
Upon the Fifth Issuer Cash Manager, on behalf of the Fifth Issuer and the
Security Trustee, making a disposal of any Authorised Investment charged
pursuant to CLAUSE 3.3 (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 Fifth 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 (Fifth Issuer
Accounts) in accordance with CLAUSE 5.5 (Authorised Investments).
4.4 WITHDRAWALS FROM FIFTH ISSUER ACCOUNTS
From time to time there shall be deemed to be released from the
encumbrances constituted by this Deed all amounts which the Fifth Issuer
Cash Manager, on behalf of the Fifth Issuer and the Security Trustee, is
permitted to withdraw from the Fifth Issuer Accounts pursuant to CLAUSES
5.2 (Pre-Enforcement Priorities of Payment) and CLAUSE 5.3 (Payments
under the Fifth 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 Fifth Issuer such bank account shall thereupon become
subject to the encumbrances constituted by this Deed.
5. PAYMENTS OUT OF THE FIFTH ISSUER ACCOUNTS, AUTHORISED INVESTMENTS AND
APPLICATION OF CASH PRIOR TO ENFORCEMENT
5.1 FOLLOWING SERVICE OF A FIFTH ISSUER NOTE ACCELERATION NOTICE
No payment, transfer or withdrawal from the Fifth Issuer Accounts may be
made under this CLAUSE 5 at any time after a Fifth Issuer Note
Acceleration Notice has been served in respect of the Fifth 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 Fifth
Issuer Note Acceleration Notice on the Fifth Issuer, the Fifth Issuer
Cash Manager, on behalf of the Fifth Issuer and the Security Trustee,
shall:
(a) withdraw, or shall instruct the Fifth Issuer Account Bank or cause
the Fifth Issuer Account Bank to be instructed, to withdraw
(unless the intended recipient of the relevant payment agrees
otherwise) moneys from the Fifth 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 Fifth Issuer Accounts to become overdrawn) as set out in
Schedule 2 of the Fifth Issuer Cash Management Agreement (the
FIFTH ISSUER PRE-ENFORCEMENT PRIORITY OF PAYMENTS); and
(b) (i) instruct the Fifth Issuer Swap Providers (other than the
Series 5 Class A1 Fifth Issuer Euro Currency Swap Provider,
in respect of only that part of the amount payable under the
Series 5 Class A1 Fifth Issuer Euro Currency Swap Agreement
representing the amount payable to the Series 5 Class A1
Fifth Issuer Interest Rate Swap Provider (the INTEREST RATE
SWAP PAYMENT)) to
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pay to the specified bank account of the Principal Paying
Agent amounts due to be paid on dates specified in the Fifth
Issuer Swap Agreements;
(iI) instruct the Series 5 Class A1 Fifth Issuer Euro Currency
Swap Provider to (i) prior to the interest payment date
falling in [June 2011], pay to the specified bank account of
the Series 5 Class A1 Fifth Issuer Interest Rate Swap
Provider the Interest Rate Swap Payment on the dates
specified in the Series 5 Class A1 Fifth Issuer Euro
Currency Swap Agreement, and (ii) thereafter to pay to the
specified bank account of the Principal Paying Agent amounts
due to be paid on the dates specified in the Series 5 Class
A1 Euro Currency Swap Agreement; and
(iIi) instruct the Series 5 Class A1 Fifth Issuer Interest Rate
Swap Provider to pay to the specified bank account of the
Principal Paying Agent amounts due to be paid on the dates
specified in the Series 5 Class A1 Fifth Issuer Interest
Rate Swap Agreement.
5.3 PAYMENTS UNDER THE FIFTH 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 Fifth
Issuer Note Acceleration Notice on the Fifth Issuer, the Fifth Issuer
Cash Manager, on behalf of the Fifth Issuer and the Security Trustee,
shall withdraw, or shall instruct the Fifth Issuer Account Bank or cause
the Fifth Issuer Account Bank to be instructed, to withdraw (unless the
intended recipient of the relevant payment agrees otherwise) moneys from
the Fifth Issuer Accounts for application on any Business Day in making
any payments due to be made subject to and in accordance with the Fifth
Issuer Cash Management Agreement (but only to the extent that such
withdrawal does not cause the Fifth Issuer Accounts to become overdrawn).
5.4 INVESTMENTS IN AUTHORISED INVESTMENTS
The Security Trustee may request the Fifth Issuer Cash Manager to (or the
Fifth Issuer Cash Manager may request the Security Trustee to) invest in
the names of the Security Trustee and the Fifth Issuer, jointly, moneys
standing from time to time and at any time standing to the credit of the
Fifth 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 Fifth 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 Fifth 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)).
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5.6 MANAGEMENT AND APPLICATION OF FUNDS
The Fifth 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 Fifth Issuer
Accounts shall from time to time be credited with all amounts received by
the Fifth Issuer and falling within any of the following categories:
(a) amounts received by the Fifth Issuer from or on behalf of Funding
1 pursuant to the provisions of the Fifth Issuer Intercompany Loan
Agreement;
(b) interest received on the Fifth Issuer Accounts;
(c) amounts received by the Fifth Issuer from the Swap Providers under
the Fifth Issuer Swap Agreements;
(d) the proceeds arising from the disposal of any Authorised
Investments and any and all income or other distributions received
by the Fifth Issuer in respect thereof or arising from the
proceeds of any Authorised Investments;
(e) amounts received by the Fifth 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 Fifth Issuer as are, or ought
in accordance with this Deed to be, comprised in the Fifth Issuer
Charged Property.
5.7 ENFORCEMENT WHEN NOT ALL AMOUNTS DUE AND PAYABLE
If the Security Trustee enforces the Fifth Issuer Security at a time when
either no amounts or not all amounts owing in respect of the Fifth 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 Fifth 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 Fifth 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 Fifth Issuer under CLAUSE 5.2 (Pre-
Enforcement Priorities of Payments) or CLAUSE 6 (Payments out of Fifth
Issuer Accounts upon Enforcement) of this Deed are subject to VAT, the
Fifth 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 FIFTH ISSUER ACCOUNTS UPON ENFORCEMENT
6.1 AFTER A FIFTH ISSUER NOTE ACCELERATION NOTICE
From and including the time when a Fifth Issuer Note Acceleration Notice
(which has not been withdrawn) has been served on the Fifth Issuer:
(a) no amount may be withdrawn from the Fifth Issuer Accounts without
the prior written consent of the Security Trustee; and
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(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 FIFTH ISSUER REVENUE RECEIPTS AFTER SERVICE OF A FIFTH ISSUER
NOTE ACCELERATION NOTICE BUT PRIOR TO THE SERVICE OF AN INTERCOMPANY LOAN
ACCELERATION NOTICE
From and including the time when a Fifth Issuer Note Acceleration Notice
has been served on the Fifth Issuer but prior to the service of an
Intercompany Loan Acceleration Notice, all Fifth Issuer Revenue Receipts
received or recovered by the Security Trustee or any Receiver for the
benefit of the Fifth Issuer Secured Creditors in respect of the Fifth
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-Enforcement 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 Fifth 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 Fifth Issuer Pre-Enforcement Revenue Priority
of Payments to an amount payable by the Fifth Issuer which is not
a Fifth Issuer Secured Obligation were deleted; and
(C) CLAUSE 5.2 (Pre-Enforcement Priorities of Payment) and the Fifth
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 FIFTH ISSUER PRINCIPAL RECEIPTS AFTER SERVICE OF A FIFTH
ISSUER NOTE ACCELERATION NOTICE BUT PRIOR TO THE SERVICE OF AN
INTERCOMPANY LOAN ACCELERATION NOTICE
From and including the time when a Fifth Issuer Note Acceleration Notice
has been served on the Fifth Issuer but prior to the service of an
Intercompany Loan Acceleration Notice, all Fifth Issuer Principal
Receipts received or recovered by the Security Trustee or any Receiver
for the benefit of the Fifth Issuer Secured Creditors in respect of the
Fifth 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 Fifth Issuer Class A
Notes as follows:
(i) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 1 Term AAA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 1 Class A Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 1 Class A Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 1 Class A Fifth Issuer Swap
Provider under the Series 1 Class A Fifth Issuer Swap;
(ii) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 2 Term AAA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 2 Class A Fifth
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Issuer Swap Provider, and on each Interest Payment Date the
Series 2 Class A Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 2 Class A Fifth Issuer Swap
Provider under the Series 2 Class A Fifth Issuer Swap;
(iii) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 3 Term AAA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 3 Class A Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 3 Class A Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 3 Class A Fifth Issuer Swap
Provider under the Series 3 Class A Fifth Issuer Swap;
(iv) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 4 Term AAA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 4 Class A Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 4 Class A Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 4 Class A Fifth Issuer Swap
Provider under the Series 4 Class A Fifth Issuer Swap;
(v) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 5A1 Term AAA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 5 Class A1 Fifth
Issuer Euro Currency Swap Provider, and on each Interest
Payment Date the Series 5 Class A1 Fifth Issuer Notes will
be redeemed in amounts corresponding to the principal
exchange amounts (if any) received from the Series 5 Class
A1 Fifth Issuer Euro Currency Swap Provider under the Series
5 Class A1 Fifth Issuer Euro Currency Swap;
(vi) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 5A2 Term AAA
Advance on each Funding 1 Interest Payment Date shall be
applied by the Fifth Issuer to redeem the Series 5 Class A2
Fifth Issuer Notes on such Interest Payment Date; and
(b) secondly, pro rata and pari passu, to repay the Fifth Issuer Class
B Notes as follows:
(i) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 1 Term AA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 1 Class B Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 1 Class B Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 1 Class B Fifth Issuer Swap
Provider under the Series 1 Class B Fifth Issuer Swap;
(ii) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 2 Term AA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 2 Class B Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 2 Class B Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 2 Class B Fifth Issuer Swap
Provider under the Series 2 Class B Fifth Issuer Swap;
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(iii) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 3 Term AA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 3 Class B Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 3 Class B Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 3 Class B Fifth Issuer Swap
Provider under the Series 3 Class B Fifth Issuer Swap
Agreement;
(iv) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 4 Term AA
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 4 Class B Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 4 Class B Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 4 Class B Fifth Issuer Swap
Provider under the Series 4 Class B Fifth Issuer Swap; and
(v) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 5 Term AA
Advance on each Funding 1 Interest Payment Date shall be
applied by the Fifth Issuer to redeem the Series 5 Class B
Fifth Issuer Notes on such Interest Payment Date; and
(c) thirdly, pro rata and pari passu to repay the Fifth Issuer Class C
Notes as follows:
(i) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 1 Term BBB
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 1 Class C Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 1 Class C Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 1 Class C Fifth Issuer Swap
Provider under the Series 1 Class C Fifth Issuer Swap;
(ii) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 2 Term BBB
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 2 Class C Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 2 Class C Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 2 Class C Fifth Issuer Swap
Provider under the Series 2 Class C Fifth Issuer Swap;
(iii) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 3 Term BBB
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 3 Class C Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 3 Class C Fifth Issuer Notes will be redeemed in
amounts corresponding to the principal exchange amounts (if
any) received from the Series 3 Class C Fifth Issuer Swap
Provider under the Series 3 Class C Fifth Issuer Swap;
(iv) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 4 Term BBB
Advance on each Funding 1 Interest Payment Date, shall be
paid by the Fifth Issuer to the Series 4 Class C Fifth
Issuer Swap Provider, and on each Interest Payment Date the
Series 4 Class C Fifth Issuer Notes will be redeemed in
amounts corresponding to the
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principal exchange amounts (if any) received from the Series
4 Class C Fifth Issuer Swap Provider under the Series 4
Class C Fifth Issuer Swap; and
(v) any principal amounts received by the Fifth Issuer from
Funding 1 in respect of the Fifth Issuer Series 5 Term BBB
Advance on each Funding 1 Interest Payment Date shall be
applied to redeem the Series 5 Class C Fifth Issuer Notes on
such Interest Payment Date.
6.4 PAYMENT OF FIFTH ISSUER REVENUE RECEIPTS AND FIFTH ISSUER PRINCIPAL
RECEIPTS AFTER SERVICE OF A FIFTH ISSUER NOTE ACCELERATION NOTICE AND
SERVICE OF AN INTERCOMPANY LOAN ACCELERATION NOTICE
All Fifth Issuer Revenue Receipts and Fifth Issuer Principal Receipts
received or recovered by the Security Trustee or any Receiver, after the
service of a Fifth Issuer Note Acceleration Notice and after the service
of an Intercompany Loan Acceleration Notice, for the benefit of the Fifth
Issuer Secured Creditors in respect of the Fifth Issuer Secured
Obligations, shall be held by it in the Fifth 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
(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 Fifth 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 Fifth Issuer Cash Manager under the Fifth Issuer Cash
Management Agreement and to the Corporate Services Provider under
the Fifth Issuer Corporate Services Agreement and to the Fifth
Issuer Account Bank under the Fifth Issuer Bank Account Agreement;
(c) thirdly, to pay pro rata and pari passu:
(i) amounts due to the Series 1 Class A Fifth Issuer Swap
Provider in respect of the Series 1 Class A Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 1 Class A Fifth Issuer
Swap Provider in respect of the Series 1 Class A Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 1 Class A Fifth Issuer Notes;
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(ii) amounts due to the Series 2 Class A Fifth Issuer Swap
Provider in respect of the Series 2 Class A Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 2 Class A Fifth Issuer
Swap Provider in respect of the Series 2 Class A Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 2 Class A Fifth Issuer Notes;
(iii) amounts due to the Series 3 Class A Fifth Issuer Swap
Provider in respect of the Series 3 Class A Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 3 Class A Fifth Issuer
Swap Provider in respect of the Series 3 Class A Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 3 Class A Fifth Issuer Notes;
(iv) amounts due to the Series 4 Class A Fifth Issuer Swap
Provider in respect of the Series 4 Class A Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 4 Class A Fifth Issuer
Swap Provider in respect of the Series 4 Class A Fifth
Issuer Swap to pay interest due and payable on the Series 4
Class A Fifth Issuer Notes;
(v) amounts due to the Series 5 Class A1 Fifth Issuer Swap
Providers in respect of the Series 5 Class A1 Fifth Issuer
Swaps (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 5 Class A1 Fifth
Issuer Swap Providers in respect of the Series 5 Class A1
Fifth Issuer Swaps to pay interest and principal due and
payable on the Series 5 Class A1 Fifth Issuer Notes; and
(vi) interest and principal on the Series 5 Class A2 Fifth Issuer
Notes;
(d) fourthly, to pay pro rata and pari passu:
(i) amounts due to the Series 1 Class B Fifth Issuer Swap
Provider in respect of the Series 1 Class B Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 1 Class B Fifth Issuer
Swap Provider in respect of the Series 1 Class B Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 1 Class B Fifth Issuer Notes;
(ii) amounts due to the Series 2 Class B Fifth Issuer Swap
Provider in respect of the Series 2 Class B Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 2 Class B Fifth Issuer
Swap Provider in respect of the Series 2 Class B Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 2 Class B Fifth Issuer Notes;
(iii) amounts due to the Series 3 Class B Fifth Issuer Swap
Provider in respect of the Series 3 Class B Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 3 Class B Fifth Issuer
Swap Provider in respect of the Series 3 Class B Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 3 Class B Fifth Issuer Notes;
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(iv) amounts due to the Series 4 Class B Fifth Issuer Swap
Provider in respect of the Series 4 Class B Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 4 Class B Fifth Issuer
Swap Provider in respect of the Series 4 Class B Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 4 Class B Fifth Issuer Notes; and
(v) interest and principal on the Series 5 Class B Fifth Issuer
Notes;
(e) fifthly, to pay pro rata and pari passu:
(i) amounts due to the Series 1 Class C Fifth Issuer Swap
Provider in respect of the Series 1 Class C Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 1 Class C Fifth Issuer
Swap Provider in respect of the Series 1 Class C Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 1 Class C Fifth Issuer Notes;
(ii) amounts due to the Series 2 Class C Fifth Issuer Swap
Provider in respect of the Series 2 Class C Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 2 Class C Fifth Issuer
Swap Provider in respect of the Series 2 Class C Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 2 Class C Fifth Issuer Notes;
(iii) amounts due to the Series 3 Class C Fifth Issuer Swap
Provider in respect of the Series 3 Class C Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 3 Class C Fifth Issuer
Swap Provider in respect of the Series 3 Class C Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 3 Class C Fifth Issuer Notes;
(iv) amounts due to the Series 4 Class C Fifth Issuer Swap
Provider in respect of the Series 4 Class C Fifth Issuer
Swap (including any termination payment but excluding any
related Fifth Issuer Swap Excluded Termination Amount) and
from amounts received from the Series 4 Class C Fifth Issuer
Swap Provider in respect of the Series 4 Class C Fifth
Issuer Swap to pay interest and principal due and payable on
the Series 4 Class C Fifth Issuer Notes; and
(v) interest and principal on the Series 5 Class C Fifth Issuer
Notes;
(f) sixthly, to pay pro rata and pari passu amounts due to:
(i) the Series 1 Fifth Issuer Swap Provider, following a Fifth
Issuer Swap Provider Default or a Fifth Issuer Swap Provider
Downgrade Termination Event by the Series 1 Fifth Issuer
Swap Provider;
(ii) the Series 2 Fifth Issuer Swap Provider, following a Fifth
Issuer Swap Provider Default or a Fifth Issuer Swap Provider
Downgrade Termination Event by the Series 2 Fifth Issuer
Swap Provider;
(iii) the Series 3 Fifth Issuer Swap Provider, following a Fifth
Issuer Swap Provider Default or a Fifth Issuer Swap Provider
Downgrade Termination Event by the Series 3 Fifth Issuer
Swap Provider;
14
(iv) the Series 4 Fifth Issuer Swap Provider, following a Fifth
Issuer Swap Provider Default or a Fifth Issuer Swap Provider
Downgrade Termination Event by the Series 4 Fifth Issuer
Swap Provider;
(v) the Series 5 Class A1 Fifth Issuer Euro Currency Swap
Provider, following a Fifth Issuer Swap Provider Default or
a Fifth Issuer Swap Provider Downgrade Termination Event by
the Series 5 Class A1 Fifth Issuer Euro Currency Swap
Provider; and
(vi) the Series 5 Class A1 Fifth Issuer Interest Rate Swap
Provider, following a Fifth Issuer Swap Provider Default or
a Fifth Issuer Swap Provider Downgrade Termination Event by
the Series 5 Class A1 Fifth Issuer Interest Rate Swap
Provider.
6.5 SUBORDINATION
(a) Each of the Fifth Issuer Secured Creditors hereby agree to be
bound by the order of priority set out in the Fifth Issuer Pre-
Enforcement Priority of Payments or the Fifth Issuer Post-
Enforcement Priority of Payments (as applicable). Without
prejudice to CLAUSE 20, each of the Fifth Issuer Secured Creditors
further agree with each other party to this Deed that,
notwithstanding any other provision contained herein or in any
other Fifth Issuer Transaction Document:
(i) it will not demand or receive payment of any distribution in
respect of, or on account of, any amounts payable by the
Fifth Issuer or the Security Trustee (as applicable) to that
Fifth Issuer Secured Creditor under the Fifth Issuer
Transaction Documents, in cash or in kind, and will not
apply any money or assets in discharge of any such amounts
payable to it (whether by set-off or by any other method),
unless all amounts then due and payable by the Fifth Issuer
to all other Fifth Issuer Secured Creditors ranking higher
in the order of priority set out in the Fifth Issuer Pre-
Enforcement Priority of Payments or the Fifth Issuer Post-
Enforcement Priority of Payments (as applicable) have been
paid in full; and
(ii) without prejudice to the foregoing, whether in the
liquidation of the Fifth Issuer or any other party to the
Fifth Issuer Transaction Documents or otherwise, if any
payment or distribution (or the proceeds of any enforcement
of any security) is received by a Fifth Issuer Secured
Creditor in respect of any amount payable by the Fifth
Issuer or the Security Trustee (as applicable) to that Fifth
Issuer Secured Creditor under a Fifth Issuer Transaction
Document at a time when, by virtue of the provisions of the
relevant Fifth Issuer Transaction Document and this Deed, no
payment or distribution should have been made, the amount so
received shall be held by the Fifth Issuer Secured Creditor
upon trust for the entity from which such payment was
received and shall be paid over to such entity as soon as is
reasonably practicable following the earlier of, (i) receipt
of written notice from such entity and (ii) actual knowledge
of such Fifth Issuer Secured Creditor, in each case, that
such payment or distribution should not have been made
(whereupon the relevant payment or distribution shall be
deemed not to have been made or received).
(b) The Security Trustee shall not pay or repay, or make any
distribution in respect of, any amount owing to a Fifth Issuer
Secured Creditor under the relevant Fifth Issuer Transaction
Documents, in cash or in kind, unless and until all amounts then
due and
15
payable by the Security Trustee to all other Fifth Issuer Secured
Creditors ranking higher in the order of priority set out in the
Fifth Issuer Pre-Enforcement Priority of Payment or the Fifth
Issuer Post-Enforcement Priority of Payments (as applicable) have
been paid in full based on the information provided to it by the
Fifth Issuer Cash Manager and/or the Fifth Issuer.
(c) Where amounts owing to a group of Fifth Issuer Secured Creditors
under the relevant Fifth Issuer Transaction Documents are
expressed to be required to be made pari passu and pro rata among
such group, the Security Trustee shall not pay or repay, or make
any distribution in respect of, such amounts to a Fifth Issuer
Secured Creditor of such group, in cash or in kind, except on a
pari passu and pro rata basis among such group.
7. CONFLICT
7.1 FIFTH 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 Fifth 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 Fifth
Issuer Charged Property, under this Deed or any other Fifth Issuer
Transaction Document to which the Security Trustee is a party or the
rights or benefits in respect of which are comprised in the Fifth 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 Fifth Issuer
Secured Creditor, then, save as provided herein and subject to Condition
11 of the Fifth 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 Fifth Issuer Secured Creditor then, save as
provided herein and subject to Condition 11 of the Fifth Issuer Notes, the
Security Trustee will have regard to the interests of the Class B
Noteholders only;
(c) subject to paragraph (a) and (b) above, if (in the Security Trustee's sole
opinion) there is or may be a conflict of interest between the Class C
Noteholder and any other Fifth Issuer Secured Creditor then, save as
provided herein and subject to Condition 11 of the Fifth Issuer Notes, the
Security Trustee will have regard to the interest 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 Fifth Issuer Swap Providers and
any of the other Fifth Issuer Secured Creditors, other than the
Noteholders, the Security Trustee will have regard to the interests of the
Fifth 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 Fifth 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 Fifth
Issuer Swap Provider, the Series 2 Class A Fifth Issuer Swap Provider, the
Series 3 Class A Fifth Issuer Swap Provider, the Series 4 Class A Fifth
Issuer Swap Provider and the Series 5 Class A Fifth Issuer Swap Provider)
only; and thereafter the Security Trustee
16
will have regard to the next highest ranking swap providers (being
the Series 1 Class B Fifth Issuer Swap Provider, the Series 2 Class B
Fifth Issuer Swap Provider, the Series 3 Class B Fifth Issuer Swap
Provider and the Series 4 Class B Fifth Issuer Swap Provider and so on;
(f) if, in the Security Trustee's sole opinion, there is a conflict between
the respective interests of the Fifth Issuer Swap Providers with equal
ranking as set out in paragraph (e)above, then the Security Trustee will
have regard to the interests of the relevant Fifth Issuer Swap Provider or
Fifth Issuer Swap Providers in respect of the Fifth Issuer Notes with the
greatest aggregate 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 Fifth Issuer Secured Creditors, other than the Noteholders and
the Fifth Issuer Swap Providers, the Security Trustee will have regard to
the interests of the Fifth Issuer Secured Creditor who ranks highest in
the order of priority of payments set out in CLAUSE 6.4 (Payment of Fifth
Issuer Revenue Receipts and Fifth Issuer Principal Receipts after service
of a Fifth Issuer Note Acceleration Notice and service of an Intercompany
Loan Acceleration Notice) above.
7.3 ACKNOWLEDGEMENT
Each of the Fifth Issuer Secured Creditors hereby acknowledges and concurs
with the provisions of CLAUSES 7.1 (Fifth 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 Fifth Issuer Note Acceleration Notice or, if
there are no Fifth Issuer Notes outstanding, following a default in
payment of any other Fifth Issuer Secured Obligations on its due date.
Without prejudice to the effectiveness of any service of the Fifth Issuer
Note Acceleration Notice, the Note Trustee shall serve a copy of any
Fifth Issuer Note Acceleration Notice on each of the Fifth 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 Fifth 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
17
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 Fifth 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 Fifth Issuer Note Acceleration Notice.
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 Fifth 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 Fifth 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 Fifth Issuer Secured Creditors
or in its own right for any moneys and liabilities in respect of
the Fifth Issuer Charged Property;
(b) to sell, transfer, convey, vary or otherwise dispose of the Fifth
Issuer's title to or interest in the Fifth 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 Fifth Issuer Charged
Property (and nothing shall preclude any such disposal being made
to a Fifth Issuer Secured Creditor);
(c) with a view to or in connection with the sale of the Fifth 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 Fifth 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.
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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 discretions, or appointed
as its agent (other than which may arise from such person's
negligence or wilful default);
(c) in connection with the Fifth 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
Fifth 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 Fifth 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 Fifth
Issuer Charged Property in respect thereof and, in the case of a Fifth
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 Fifth Issuer
Noteholders and all other Fifth 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 Fifth
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 Fifth 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 Fifth 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 Fifth 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.
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8.10 DEFICIENCY OR ADDITIONAL PAYMENT
The Security Trustee shall have no responsibility whatsoever to any Fifth
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 Fifth 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
Fifth Issuer Secured Creditor.
8.11 APPLICATION OF FUNDS
If, after the service of a Fifth Issuer Note Acceleration Notice, the
amount of the moneys at any time available for payment of principal and
interest in respect of any Fifth Issuer Notes under CLAUSE 6 (Payments
out of the Fifth Issuer Accounts upon Enforcement) shall be less than
one- tenth of the Principal Amount Outstanding of all the Fifth 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 Fifth Issuer Notes then outstanding and such
accumulations and funds shall then be applied in accordance with CLAUSE 6
(Payments out of the Fifth Issuer Accounts upon Enforcement).
9. RECEIVER
9.1 APPOINTMENT
(a) Subject to paragraph (b) below, at any time following the occurrence
of a Fifth 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
Fifth 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 Fifth 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 Fifth Issuer Charged Property or appointing
another Receiver over any other part of the Fifth Issuer Charged
Property.
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9.4 AGENT OF THE FIFTH ISSUER
Any Receiver shall, so far as the law permits, be the agent of the Fifth
Issuer and the Fifth 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, negligence or
default, and if a liquidator of the Fifth 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 Fifth 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 Fifth Issuer Accounts upon
Enforcement), such remuneration shall be payable hereunder by the Fifth
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 Fifth 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 Fifth 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
Fifth 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 Fifth Issuer Charged Property or any
interest in the Fifth 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 Fifth
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 Fifth
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 Fifth
Issuer Charged Property or any part thereof in any manner and for
any purpose whatsoever;
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(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
Fifth Issuer Charged Property and generally in such manner and on
such terms as it may think fit;
(h) to bring, defend, submit to arbitration, negotiate, compromise,
abandon and settle any claims, disputes and proceedings concerning
the Fifth Issuer Charged Property or any part thereof;
(i) to transfer all or any of the Fifth Issuer Charged Property and/or
any of the liabilities of the Fifth 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 Fifth Issuer;
(j) to call up or require the directors of the Fifth Issuer to call up
all or any portion of the uncalled capital for the time being of
the Fifth Issuer and to enforce payment of any call by action (in
the name of the Fifth 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 Fifth 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 Fifth Issuer
Charged Property or incidental to the ownership of or rights in or
to any of the Fifth Issuer Charged Property and to complete or
effect any transaction entered into by the Fifth Issuer and
complete, disclaim, abandon or modify all or any of the
outstanding contracts or arrangements of the Fifth Issuer relating
to or affecting the Fifth 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 Fifth 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 Fifth Issuer
Charged Property which it may consider expedient as effectually as
if he were solely and absolutely entitled to the Fifth Issuer
Charged Property;
22
(r) in addition:
(i) to do all other acts and things which it may consider
desirable or necessary for realising any Fifth 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
(ii) to exercise in relation to any Fifth 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 Fifth Issuer for any of the above
purposes; and
(s) to pay and discharge out of the profits and income of the relevant
Fifth Issuer Charged Property and the moneys to be made by it in
carrying on the business of the Fifth 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 Fifth 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 Fifth Issuer Accounts upon
Enforcement) hereof.
The Security Trustee may pay over to a Receiver any moneys constituting
part of the Fifth Issuer Charged Property to the intent that the same may
be applied for the purposes referred to in CLAUSE 6 (Payments out of the
Fifth 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 Fifth 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.
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11. PROTECTION OF SECURITY TRUSTEE AND RECEIVER
11.1 LIABILITY
Neither the Security Trustee nor any Receiver shall be liable to the
Fifth 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.
11.2 POSSESSION
Without prejudice to the generality of CLAUSE 11.3 (Mortgagee in
Possession), entry into possession of the Fifth Issuer Charged Property
or any part thereof shall not render the Security Trustee or the Receiver
of that company liable to account as mortgagee or security holder in
possession. If and whenever the Security Trustee or the Receiver enters
into possession of the Fifth 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 Fifth Issuer Secured Creditors
shall, by reason of any assignment or other security made under this
Deed, be or be deemed to be a mortgagee or security holder in possession
nor shall they take any action (other than, in the case of the Fifth
Issuer Secured Creditors, with the Security Trustee's prior written
consent) which would be likely to lead to the Fifth Issuer Secured
Creditors or the Security Trustee becoming a mortgagee or security holder
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 Fifth Issuer Secured Creditors requiring the Fifth
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 Fifth Issuer Secured Creditors or
the Security Trustee becoming a mortgagee or security holder in
possession in respect of any property referred to in this Deed.
12. EXPENSES AND INDEMNITY
12.1 EXPENSES
The Fifth Issuer covenants with and undertakes to the Security Trustee to
reimburse or pay to the Security Trustee or any Receiver of the Fifth
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 Fifth 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 Fifth
Issuer Secured Obligations from the Fifth Issuer or any other
person; or
24
(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 Fifth Issuer
Charged Property.
12.2 INDEMNITY
The Fifth 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 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 Fifth Issuer of any of its
covenants or other obligations to the Security Trustee, or in consequence
of any payment in respect of the Fifth Issuer Secured Obligations
(whether made by the Fifth 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 Fifth 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 Fifth Issuer
makes any taxable or deemed taxable supply to the Fifth Issuer, then the
Fifth 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 Fifth 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 Fifth Issuer to the Security Trustee or such
Receiver under any other indemnity contained in this Deed.
12.4 INTEREST
All sums payable by the Fifth 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
25
(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.
12.5 STAMP DUTIES
The Fifth 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 Fifth 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 Fifth Issuer Transaction
Documents).
13. PROTECTION OF SECURITY
The Fifth Issuer further covenants with and undertakes to the Security
Trustee from time to time (and, for the purposes mentioned in paragraph
(a) below, notwithstanding that a Fifth Issuer Note Acceleration Notice
may not have been served) upon demand to execute, at the Fifth 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 Fifth
Issuer Charged Property; or
(c) with a view to protecting the encumbrances created by or pursuant
to this Deed,
provided that the Fifth 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.
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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 Fifth Issuer Note Event of Default is subsisting and
has not been waived; or
(b) it believes that the Fifth Issuer Charged Property or any part
thereof is in danger of being seized or sold under any form of
distress, execution or diligence levied or threatened or is
otherwise in jeopardy or imperilled; or
(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 Fifth 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 Fifth 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 Fifth
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 or, in respect of Scottish assets, to create and
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 Fifth Issuer subject to the floating charge, if and when:
(a) a Fifth Issuer Note Event of Default occurs; or
(b) the Fifth 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 Fifth 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 Fifth
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 Fifth Issuer to any other
person (whether permitted by the Fifth 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
27
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 Fifth 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
Fifth Issuer is dismissed or withdrawn or a resolution for winding-up of
the Fifth 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 Fifth Issuer Charged Property will be
restored to the Fifth Issuer, and the Fifth Issuer and all persons
concerned will be remitted to their original rights 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 Fifth Issuer shall execute
and deliver to the Security Trustee a power of attorney in or
substantially in the form set out in . 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 FIFTH 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 Fifth
Issuer hereby declares that, after service of a Fifth Issuer Note
Acceleration Notice, it will hold all of the Fifth Issuer Charged
Property (subject to the right of redemption) upon trust to convey,
assign or otherwise deal with such Fifth 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 Fifth Issuer Charged Property in place of
the Fifth 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 Fifth 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 Fifth Issuer or any other person in respect
of the Fifth Issuer Secured Obligations, and neither the Security Trustee
(subject to the provisions of CLAUSE 20.4 (Mandatory Enforcement) nor any
Fifth Issuer Secured Creditor shall be under any obligation to take any
steps to call in or to enforce any security for the Fifth Issuer Secured
Obligations, and shall not be liable to the Fifth Issuer for any loss
arising from any omission on the part of the Security Trustee or any
Fifth Issuer Secured Creditor to take any such steps or for the manner in
which the Security
28
Trustee or any Fifth 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 Fifth Issuer Charged Property or any Security
Interests created under this Deed in contravention of the provisions
hereof:
(a) the Security Trustee may open a new account in respect of the
Fifth 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 Fifth 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 Fifth 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
Fifth Issuer or any amalgamation or consolidation by the Security Trustee
or the Fifth Issuer with any other corporation (whether, in the case of
the Fifth Issuer, permitted by the Fifth 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 Fifth 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 Fifth Issuer Secured Creditor to recover
the Fifth Issuer Secured Obligations from the Fifth 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 Fifth Issuer Secured Obligations.
17.2 RETENTION OF CHARGES
If the Security Trustee shall have reasonable grounds for believing that
the Fifth 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 Fifth Issuer shall be
prima facie evidence of the solvency of the Fifth Issuer) at the date of
any payment made by the Fifth 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
29
can be avoided or invalidated after the payment and discharge in full of
all Fifth 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
Fifth Issuer or the Fifth Issuer shall commence to be wound up or to go
into administration or any analogous proceedings shall be commenced by or
against the Fifth 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 be deemed
to continue to have been held as security for the payment and discharge
to the Security Trustee of all Fifth Issuer Secured Obligations.
18. SET OFF
The Security Trustee may at any time following the service of a Fifth
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 Fifth Issuer whether in its own name
or jointly with others and held by it or any Fifth 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 Fifth Issuer from the Security Trustee or
relevant Fifth Issuer Secured Creditor and whether or not the credit
balance and the account in debit or the Fifth 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 Fifth Issuer
Secured Obligations and may in its absolute discretion estimate the
amount of any liability of the Fifth 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 Fifth Issuer unless and
until all Fifth 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 FIFTH ISSUER SECURED CREDITORS
Each of the Fifth Issuer Secured Creditors (other than the Noteholders,
the Note Trustee acting on behalf of the Fifth Issuer Noteholders and the
Security Trustee) hereby agrees with the Fifth 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) subject to CLAUSE 3.6 (Acknowledgement and Undertaking), it shall
not take any steps for the purpose of recovering any of the Fifth
Issuer Secured Obligations (including, without limitation, by
exercising any rights of set off or enforcing any rights arising
out of the Fifth Issuer Transaction Documents against the Fifth
Issuer or procuring the winding up, administration (including, for
the avoidance of doubt, the
30
filing of documents with the court or the service of a notice of
intention to appoint an administrator) or liquidation of the Fifth
Issuer in respect of any of its liabilities whatsoever),
unless a Fifth Issuer Note Acceleration Notice shall have been served or
the Note Trustee, having become bound to serve a Fifth 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 Fifth 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 Fifth Issuer or the
filing of documents with the court or the service of a notice of
intention to appoint an administrator in relation to the Fifth Issuer).
20.2 KNOWLEDGE OF SECURITY TRUSTEE OF A FIFTH ISSUER NOTE EVENT OF DEFAULT
The Security Trustee will not be deemed to have knowledge of the
occurrence of a Fifth Issuer Note Event of Default unless the Security
Trustee has received written notice from a Fifth Issuer Secured Creditor
stating that a Fifth Issuer Note Event of Default has occurred and
describing that Fifth 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 Fifth
Issuer or any other person to enforce their respective obligations under
any of the Fifth 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 Fifth 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 Fifth
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 Fifth Issuer Notes, the Class B Fifth Issuer Notes or the
Class C Fifth Issuer Notes then outstanding or by any other Fifth
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;
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(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 Fifth 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 Noteholders and the
Class C Noteholders and each of the Fifth Issuer Secured
Creditors who ranks higher than the relevant Fifth Issuer
Secured Creditor in the order or priority of payments in
CLAUSE 6 (Payments out of the Fifth 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 FIFTH ISSUER CHARGED PROPERTY
Notwithstanding CLAUSE 8 (The Security Trustee's Powers), if the Fifth
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 Fifth 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 the Class A Noteholders and the
Class B Noteholders, the Class C Noteholders or the Security Trustee is
of the sole opinion, which shall be binding on the Fifth 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 Fifth
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 Fifth 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 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 Fifth Issuer.
21. COVENANTS AND WARRANTIES
21.1 NOTICE OF ASSIGNMENT
Immediately upon the execution of this Deed, the Fifth 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
32
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 Fifth Issuer warrants to the Security Trustee that it has taken all
necessary steps to enable it to charge or assign as security the Fifth
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 Fifth Issuer Charged
Property.
21.3 NEGATIVE COVENANTS
So long as any of the Fifth Issuer Secured Obligations remain
outstanding, the Fifth 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, standard security,
assignation, 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}], 2004 relating to the issue of
the Fifth 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, convey, 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 Fifth 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 Fifth 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 Fifth Issuer Charged
Property to be released from its respective obligations;
(h) have an interest in any bank account other than the Fifth Issuer
Accounts, unless such account or interest therein is charged to
the Security Trustee on terms acceptable to it;
33
(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 Fifth
Issuer and Funding 1 under Section 247 of the Income and
Corporation Taxes Act 1988 to cease, unless required to do so by
law;
(k) do any act or thing the effect of which would be to make the Fifth
Issuer resident in any jurisdiction other than the United Kingdom;
(l) do any act or thing the effect of which would be to cause the
Fifth Issuer to have an establishment in a member state other than
England;
(m) permit any person other than itself and the Security Trustee to
have any equitable or beneficial interest in any of its assets or
undertakings or any interest, estate, right, title or benefit
therein;
(n) purchase or otherwise acquire any Note or Notes (including the
Fifth Issuer Notes); or
(o) 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 Fifth Issuer covenants and undertakes with the Security Trustee for
the benefit of the Fifth 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 Fifth 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 Fifth
Issuer shall have no reasonable objection free access to such
books of account and records at all times during normal business
hours upon
34
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 Deed;
(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
Fifth Issuer as soon as reasonably practicable after issue of the
same;
(f) to give notice in writing to the Security Trustee of the
occurrence of any Fifth Issuer Note Event of Default, Potential
Fifth Issuer Note Event of Default and/or service of a Fifth
Issuer Note Acceleration Notice (such notice to be effective by
the delivery of a copy of the Fifth 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
Fifth 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 Fifth 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 Fifth 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 Fifth 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 Fifth
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 Fifth 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 Fifth
Issuer;
(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 Fifth Issuer Intercompany Loan Agreement
by Funding 1 to the Fifth 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
35
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; and
(l) at all times maintain its "centre of main interests" as defined in
the EU Insolvency Regulation (EC) No. 1346/2000 of 29th May 2000
(the REGULATION) in England.
21.5 FORMS 395
The Fifth 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.
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 Fifth 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 Fifth 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
36
incurred in connection with any such deposit and the Fifth 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;
(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 Fifth
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 Fifth 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
Fifth Issuer Transaction Documents and to call for and rely upon a
certificate of the Fifth 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 Fifth 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 Fifth Issuer Noteholders and the Security
Trustee shall not be bound in any such case to inquire as to the
compliance with the Fifth 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
37
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 Fifth Issuer Notes;
(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 Fifth Issuer Transaction
Documents:
(i) where it is required to have regard to the interests of the
Fifth Issuer Noteholders of any class, it shall have regard
to the interests of such Fifth 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 Fifth 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 Fifth Issuer Noteholder be entitled to claim,
from the Fifth Issuer, the Security Trustee or any other
person any indemnification or payment in respect of any tax
consequence of any such exercise upon individual Fifth
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 Noteholder 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 Fifth 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 Fifth Issuer
Transaction Document (including, without limitation, forming any
opinion or employing any
38
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 Fifth Issuer Secured Creditor any information made
available to the Security Trustee by the Fifth Issuer in
connection with the trusts of this Deed or the Fifth Issuer
Transaction Documents and no Fifth 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 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 Fifth Issuer may have to the Fifth 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 Fifth Issuer to
the Fifth 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 Fifth 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 Fifth
Issuer, and the Security Trustee shall not at any time have any
responsibility for the same and each Fifth 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 Fifth Issuer to any of the
Fifth Issuer Charged Property; and
(c) failure to effect or procure registration of or otherwise protect
any of the Fifth Issuer Transaction Documents by registering the
same under any registration laws in any
39
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 Fifth 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 Fifth 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 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 Fifth
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 Fifth Issuer;
(b) the title, ownership, value, sufficiency, enforceability or
existence of any Fifth 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
Fifth Issuer Transaction Document comprised within the Fifth
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 Fifth 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 Fifth Issuer or any other
person or entity who has at any time provided any Fifth Issuer
Transaction Document comprised within the Fifth Issuer Charged
Property or in any document entered into in connection therewith;
(f) the performance or observance by the Fifth Issuer or any other
person with any provisions of this Deed or any other Fifth Issuer
Transaction Document comprised within the Fifth 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 Fifth Issuer
Charged Property;
(h) the title of the Fifth Issuer to any of the Fifth Issuer Charged
Property;
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(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 Fifth Issuer Charged Property or any document
entered into in connection therewith whether or not similar to the
foregoing.
22.5 NO SUPERVISION
The Security Trustee shall be under no obligation to monitor or supervise
the respective functions of the Fifth Issuer Account Bank under the Fifth
Issuer Bank Account Agreement or the Fifth Issuer Cash Manager under the
Fifth 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 Fifth 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 Fifth 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
Fifth 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 Fifth Issuer Secured Creditors.
22.8 USE OF PROCEEDS
The Security Trustee shall not be responsible for the receipt or
application by the Fifth Issuer of the proceeds of the issue of the Fifth
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
Fifth 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
Fifth 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 Fifth Issuer Transaction
Documents
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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.
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 Fifth 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 Fifth Issuer Note Event of Default or a Potential
Fifth Issuer Note Event of Default or which would cause a right or remedy
to become exercisable, whether by Funding 1, the Fifth 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 Fifth 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 Fifth 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 Fifth 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 Fifth 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 Fifth 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 Fifth 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 Fifth Issuer, Funding 1 or Holdings or any other
subsidiary of Holdings or any other party to the Fifth Issuer Transaction
Documents or any other party to any of the Fifth 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
Fifth Issuer, Funding 1 or Holdings or any other subsidiary of Holdings
or any other party to the Fifth Issuer
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Transaction Documents or any contract of banking or insurance with the
Fifth 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 Fifth Issuer Secured Creditors or the Fifth
Issuer, Funding 1 or Holdings for any profit, fees, commissions,
interest, discounts or 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 Fifth
Issuer or any other person to give its consent to any event, matter or
thing, then:
(a) if the Fifth 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 Fifth Issuer Secured Creditors.
23.7 INTERESTS OF FIFTH ISSUER SECURED CREDITORS
Where the Security Trustee is required to have regard to the interests of
any Fifth Issuer Secured Creditor (other than the Fifth Issuer
Noteholders), the Security Trustee shall consult with such Fifth Issuer
Secured Creditor and may rely on the opinion of such Fifth 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 Fifth
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 Fifth Issuer Secured Creditors concur with
the Fifth Issuer or any person in making or sanctioning any modification:
(i) to any of the Fifth 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 Fifth Issuer Secured Creditor
or, if it is not of that opinion in
43
relation to any Fifth Issuer Secured Creditor, such Fifth Issuer
Secured Creditor has given its written consent to such modification;
or
(ii) to any of the Fifth Issuer 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.
(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 the 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 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 the Fifth 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 the Fifth Issuer Swap Providers (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 sale of New Loan Types to the Mortgages Trustee;
(vi) changes to be made to the Reserve Fund Required Amount the Liquidity
Reserve Fund Required Amount and/or the manner in which the Reserve
Funds are 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 sale of New Loans to the Mortgages
Trustee (as set out in CLAUSE 4 (Sale and
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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 Fifth
Issuer Notes.
(d) Each Fifth 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 Fifth 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 Fifth Issuer and/or the
amount of monies available to the Fifth Issuer to meet the Fifth Issuer
Secured Obligations. Each Fifth 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 Fifth Issuer Cash
Manager to the Fifth Issuer Secured Creditors as soon as practicable after
the modifications have been made.
(e) Each of the Fifth 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 Fifth
Issuer Transaction Document; and
(b) a written request for such confirmation or response is delivered
to each Rating Agency by the Fifth 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 Fifth Issuer,
Funding 1, the Seller, any investment bank or financial adviser acting in
relation to the Fifth 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 caused as a result
of treating such certificate as conclusive.
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23.10 AUTHORISATION OR WAIVER OF BREACH
The Security Trustee may, without the consent of the Fifth 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 Fifth 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 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 Fifth Issuer
Secured Creditors and, unless the Security Trustee otherwise agrees,
notice thereof shall be given by the Fifth Issuer Cash Manager to the
Fifth Issuer Secured Creditors as soon as practicable thereafter.
23.11 INCORPORATION BY REFERENCE
The provisions of Schedule 4 to the Fifth 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 Fifth 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 Fifth 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 Fifth Issuer Pre-Enforcement Revenue Priority of Payments or, as the
case may be, the Fifth 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 Fifth Issuer Secured Obligations have
been paid or discharged and the Security Trustee has released, reassigned
and/or discharged the Fifth Issuer Charged Property as provided in CLAUSE
4.1 (Prior to Payment or Discharge of Fifth Issuer Secured Obligations).
(b) The Fifth 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 Fifth Issuer a
proper VAT invoice in respect thereof.
24.2 ADDITIONAL REMUNERATION
In the event of a Fifth Issuer Note Event of Default or Potential Fifth
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 Fifth 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 Fifth Issuer shall pay to
the Security Trustee such additional remuneration as shall be agreed
between the Security Trustee and the Fifth Issuer.
24.3 DISPUTES
In the event of the Security Trustee and the Fifth 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
46
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 Fifth 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 payable by the Fifth Issuer, and the
decision of any such investment bank shall be final and binding on the
Fifth Issuer and the Security Trustee.
24.4 EXPENSES
In addition to remuneration hereunder, the Fifth 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 Fifth Issuer Security and any of the other
Fifth 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 Fifth 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 Fifth 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 Fifth
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 Fifth 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.
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25. APPOINTMENT OF NEW SECURITY TRUSTEE AND REMOVAL OF SECURITY TRUSTEE
25.1 POWER OF FIFTH 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 Fifth 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 Fifth
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 hereof shall as soon as
practicable thereafter be notified by the Fifth Issuer to the Fifth 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 Fifth Issuer or of any person involved in the organisation
or operation of the Fifth Issuer; (iii) not offer or provide credit or
credit enhancement to the Fifth Issuer; and (iv) execute an agreement or
instrument concerning the Fifth 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 Fifth Issuer),
the Security Trustee may (as attorney for the Fifth Issuer) upon giving
prior written notice to the Fifth Issuer but without the consent of the
Fifth Issuer or the Fifth 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 Fifth 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 Fifth 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 Fifth 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
48
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.
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 Fifth 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 Fifth
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 Fifth 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 Fifth 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 Fifth Issuer, to Permanent Financing (No. 5)
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 (d) below;
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(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;
(d) in the case of the Fifth 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 Fifth Issuer Account Bank, to Bank of Scotland,
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, 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 Fifth Issuer Swap Providers, to
[{circle}];
(h) in the case of the Series 2 Fifth Issuer Swap Providers, to
[{circle}]);
(i) in the case of the Series 3 Fifth Issuer Swap Providers, to
[{circle}];
(j) in the case of the Series 4 Fifth Issuer Swap Providers, to
[{circle}];
(k) in the case of the Series 5 Class A1 Fifth Issuer Euro Currency
Swap Provider, to [{circle}];
(l) in the case of the Series 5 Class A1 Fifth Issuer Interest Rate
Provider, to [{circle}];
(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;
50
(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 Fifth
Issuer Secured Creditor or of the Fifth 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 Fifth Issuer Secured
Creditor which is certified as being correct by an officer of the
Security Trustee or an officer of the relevant Fifth 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 Fifth 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 Fifth 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.
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 Fifth 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.
51
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 (other than any terms hereof which are particular to the law
of Scotland, which shall be construed in accordance with Scots 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.
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 Fifth 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
52
another such agent with an address in England and advise the Note
Trustee, the Fifth 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.
53
SIGNATORIES
THE FIFTH ISSUER
EXECUTED as a DEED by )
PERMANENT FINANCING (NO. 5) 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
54
FIFTH ISSUER CASH MANAGER
EXECUTED as a DEED by )
HALIFAX PLC )
in its capacity as Fifth Issuer Cash Manager)
acting by its attorney )
in the presence of: )
(as attorney for HALIFAX PLC)
Witness:
Name:
Address:
FIFTH 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 its attorney in the presence of)
Witness's Signature: (as attorney for the GOVERNOR AND
COMPANY OF THE BANK OF SCOTLAND)
Address:
Name:
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
55
SERIES 1 FIFTH ISSUER SWAP PROVIDER
EXECUTED as a DEED by )
[{circle}] )
in its capacity as Series 1 Fifth Issuer)
Currency Swap Provider )
acting by its attorney )
in the presence of: )
Witness:
Name:
Address:
SERIES 2 FIFTH ISSUER SWAP PROVIDER
EXECUTED as a DEED on behalf of
[{circle},] )
in its capacity as Series 2 Fifth Issuer)
Swap Provider by )
being a person who, in accordance with the laws
of that territory, is acting under the authority
of the company
SERIES 3 FIFTH ISSUER SWAP PROVIDER
EXECUTED as a DEED by )
[{circle}] )
in its capacity )
AS SERIES 3 FIFTH ISSUER SWAP PROVIDER)
acting by its attorney )
in the presence of: )
Witness's Signature:
Name:
Address:
56
SERIES 4 FIFTH ISSUER SWAP PROVIDER
EXECUTED as a DEED on behalf of
[{circle}] )
in its capacity as Series 4 Fifth Issuer)
Swap Provider )
by ) Xxxxxxx X. Xxxxxx
being a person who, in accordance with the laws
of that territory, is acting under the authority
of the company
SERIES 5 CLASS A1 FIFTH ISSUER EURO CURRENCY SWAP PROVIDER
EXECUTED as a DEED by )
[{circle}] in its capacity as )
SERIES 5 CLASS A1 FIFTH ISSUER )
EURO CURRENCY SWAP PROVIDER )
acting by its attorney )
in the presence of: )
Witness's Signature:
Name:
Address:
SERIES 5 CLASS A1 FIFTH ISSUER INTEREST RATE SWAP PROVIDER
EXECUTED as a DEED by )
[{circle}] )
in its capacity as )
SERIES 5 CLASS A1 FIFTH ISSUER )
INTEREST RATE SWAP PROVIDER )
acting by two directors/ )
a director and a secretary )
Director:
Director/Secretary
57
CORPORATE SERVICES PROVIDER
EXECUTED as a DEED by )
STRUCTURED FINANCE )
MANAGEMENT LIMITED )
in its capacity as )
CORPORATE SERVICES PROVIDER )
acting by two directors/ )
a director and the secretary )
58
SCHEDULE 1
POWER OF ATTORNEY
THIS POWER OF ATTORNEY is made on [{circle}], 2004 by PERMANENT FINANCING (NO.
5) PLC (registered number 5114399) whose registered office is Xxxxxxxxx House,
Guildhall Yard, London EC2V 5AE (the PRINCIPAL).
WHEREAS:
(1) By virtue of a deed of charge (the FIFTH ISSUER DEED OF CHARGE) dated
[{circle}], 2004 between, inter alia, the Principal, the Security
Trustee, the Note Trustee, the Agent Bank, the Principal Paying Agent,
the Registrar, the Transfer Agent, the Fifth Issuer Cash Manager, the
Fifth Issuer Account Bank, the Corporate Services Provider and the Fifth
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 Fifth 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 Fifth 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
Fifth 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 Fifth Issuer Charged
Property or which ought to be done under the covenants, undertakings and
provisions contained in the Fifth Issuer Deed of Charge on or at any time
after the service of a Fifth 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 Fifth 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 Fifth
Issuer Security and/or the Fifth 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 Fifth 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
59
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 Fifth Issuer Security
and/or the Fifth 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. 5) PLC )
acting by director )
and director/secretary )
60
SCHEDULE 2
FORM OF NOTICE OF ASSIGNMENT AND CONSENT TO ASSIGNMENT
FORM OF NOTICE OF ASSIGNMENT
From: Permanent Financing (No. 5) PLC (the FIFTH ISSUER)
The Bank of New York (the SECURITY TRUSTEE)
To:
Credit Suisse First Boston (Europe) Limited
UBS Limited
X.X. Xxxxxx Securities Ltd.
(together, the MANAGERS)
and
Credit Suisse First Boston (Europe) Limited
UBS Limited
X.X. Xxxxxx Securities Inc. (for the Class A Notes)
(together, the UNDERWRITERS)
[{circle}], 2004
Dear Sirs,
U.S.$[750,000,000] SERIES 1 CLASS A ASSET BACKED FLOATING RATE NOTES DUE [JUNE
2005]
U.S.$[32,250,000] SERIES 1 CLASS B ASSET BACKED FLOATING RATE NOTES DUE JUNE
2042
U.S.$[27,000,000] SERIES 1 CLASS C ASSET BACKED FLOATING RATE NOTES DUE JUNE
2042
U.S.$[1,000,000,000] SERIES 2 CLASS A ASSET BACKED FLOATING RATE NOTES DUE
[SEPTEMBER 2027]
U.S.$[44,000,000] SERIES 2 CLASS B ASSET BACKED FLOATING RATE NOTES DUE JUNE
2042
U.S.$[36,000,000] SERIES 2 CLASS C ASSET BACKED FLOATING RATE NOTES DUE JUNE
2042
U.S.$[750,000,000] SERIES 3 CLASS A ASSET BACKED FLOATING RATE NOTES DUE
[SEPTEMBER 2034]
U.S.$[32,250,000] SERIES 3 CLASS B ASSET BACKED FLOATING RATE NOTES DUE JUNE
2042
U.S.$[27,000,000] SERIES 3 CLASS C ASSET BACKED FLOATING RATE NOTES DUE JUNE
2042
E[1,000,000,000] SERIES 4 CLASS A ASSET BACKED FLOATING RATE NOTES DUE [MARCH
2042]
E[43,500,000] SERIES 4 CLASS B ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
E[36,000,000] SERIES 4 CLASS C ASSET BACKED FLOATING RATE NOTES DUE JUNE 2042
E[750,000,000] SERIES 5 CLASS A1 ASSET BACKED FIXED RATE NOTES DUE JUNE 2042
{pound-sterling}[750,000,000] SERIES 5 CLASS A2 ASSET BACKED FLOATING RATE
NOTES DUE 2042
{pound-sterling}[47,000,000] SERIES 5 CLASS B ASSET BACKED FLOATING RATE NOTES
DUE JUNE 2042
{pound-sterling}[39,000,000] 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}], 2004 and
made between the Fifth Issuer, the Security Trustee and others (the FIFTH
ISSUER DEED OF CHARGE), the Fifth Issuer assigned to the Security Trustee,
inter alia, all of its right, title, interest and benefit, present and future,
in, to and under the underwriting agreement and the subscription agreement
relating to the Notes both dated
61
[{circle}], 2004 and made between, inter alios, the Fifth 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. 5) PLC
...........................................
For and on behalf of
THE BANK OF NEW YORK
62
CONSENT TO ASSIGNMENT
From:
Credit Suisse First Boston (Europe) Limited
UBS Limited
X.X. Xxxxxx Securities Ltd.
(together, the MANAGERS)
and
Credit Suisse First Boston (Europe) Limited
UBS Limited
X.X. Xxxxxx Securities Inc. (for the Class A Notes)
(together, the UNDERWRITERS)
To: The Bank of New York (the SECURITY TRUSTEE)
Permanent Financing (No. 5) PLC (the FIFTH ISSUER)
[{circle}], 2004
Dear Sirs,
We hereby acknowledge receipt of the notice of assignment dated [{circle}],
2004 relating to the Fifth Issuer Deed of Charge dated [{circle}], 2004 between
the Fifth 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}], 2004
between the Fifth Issuer and the Underwriters or the Underwriters or Managers
(as appropriate) named therein (together, the AGREEMENTS) without any reference
to the Fifth 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
63
