Exhibit 4.1
EXECUTION COPY
LOAN CONFIRMATION SIXTH ISSUER INTERCOMPANY LOAN AGREEMENT
DATED 18TH NOVEMBER, 2004
PERMANENT FUNDING (NO. 1) LIMITED
AS FUNDING 1
AND
PERMANENT FINANCING (NO. 6) PLC
AS SIXTH ISSUER
AND
THE BANK OF NEW YORK
AS SECURITY TRUSTEE
AND
CITIBANK, N.A., LONDON BRANCH
AS AGENT BANK
▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇ LLP
LONDON
CONTENTS
CLAUSE PAGE
1. Interpretation............................................................1
2. Intercompany Loan Terms and Conditions....................................2
3. The Sixth Issuer Term Advances............................................2
4. Interest..................................................................4
5. Repayment.................................................................6
6. Prepayment...............................................................10
7. Certain Fees, etc........................................................10
8. Application of Certain Provisions........................................12
9. Addresses................................................................13
10. Counterparts.............................................................14
11. Third Party Rights.......................................................14
12. Governing Law............................................................14
SCHEDULE
1. Conditions Precedent in Respect of Drawdown..............................15
Signatories...................................................................18
THIS LOAN CONFIRMATION TO THE SIXTH ISSUER INTERCOMPANY LOAN AGREEMENT is dated
18th November, 2004
BETWEEN:
(1) PERMANENT FUNDING (NO. 1) LIMITED (registered in England and Wales No.
4267660), a private limited company incorporated in England and Wales whose
registered office is at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(FUNDING 1);
(2) PERMANENT FINANCING (NO. 6) PLC (registered in England and Wales No.
5232464), a public limited company incorporated under the law of England
and Wales whose registered office is at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the SIXTH ISSUER);
(3) THE BANK OF NEW YORK, a New York banking corporation acting through its
offices at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (acting in its
capacity as SECURITY TRUSTEE); and
(4) CITIBANK, N.A., LONDON BRANCH, whose offices are at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (acting in its capacity as AGENT BANK).
IT IS AGREED as follows:
1. INTERPRETATION
1.1 The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Agreement and dated 18th
November, 2004 (as the same may be amended, varied or supplemented from
time to time with the consent of the parties to this Agreement) (the MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) and the sixth issuer master
definitions and construction schedule signed for the purposes of
identification by ▇▇▇▇▇ & Overy LLP and Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ on 18th
November, 2004 (the SIXTH ISSUER MASTER DEFINITIONS AND CONSTRUCTION
SCHEDULE) are expressly and specifically incorporated into this Agreement
and, accordingly, the expressions defined in the Master Definitions and
Construction Schedule and/or the Sixth Issuer Master Definitions and
Construction Schedule (as so amended, varied or supplemented from time to
time) shall, except where the context otherwise requires and save where
otherwise defined herein, have the same meanings in this Agreement,
including the Recitals hereto and this Agreement shall be construed in
accordance with the interpretation provisions set out in CLAUSE 2
(Interpretation and Construction) of the Master Definitions and
Construction Schedule and the Sixth Issuer Master Definitions and
Construction Schedule.
1.2 Unless the context otherwise requires, references in the Intercompany Loan
Terms and Conditions to:
CLOSING DATE means 18th November, 2004;
INTERCOMPANY LOAN means the Sixth Issuer Intercompany Loan;
INTERCOMPANY LOAN AGREEMENT means the Sixth Issuer Intercompany Loan
Agreement;
INTERCOMPANY LOAN CONFIRMATION means the Sixth Issuer Intercompany Loan
Confirmation;
1
ISSUER means the Sixth Issuer;
ISSUER TRANSACTION ACCOUNT means the Sixth Issuer Sterling Account;
NEW BASEL CAPITAL ACCORD means the new or revised capital accord as
described in the consultative document "The New Basel Capital Accord"
published by the Basel Committee on Banking Supervision in January 2001;
NOTES means the Sixth Issuer Notes; and
SIXTH ISSUER TERM ADVANCES has the meaning given in the Sixth Issuer Master
Definitions and Construction Schedule.
2. INTERCOMPANY LOAN TERMS AND CONDITIONS
Each of the parties to this Agreement agrees that the Intercompany Loan
Terms and Conditions signed by Funding 1, the Security Trustee and the
Agent Bank for the purposes of identification on 14th June, 2002, as
amended and restated on 25th November, 2003, 12th March, 2004 and 22nd
July, 2004 and from time to time and the provisions set out therein shall
form part of this Agreement and shall be binding on the parties to this
Agreement as if they had expressly been set out herein. References in this
Agreement to "this Agreement" shall be construed accordingly.
3. THE SIXTH ISSUER TERM ADVANCES
3.1 SIXTH ISSUER TERM AAA ADVANCES
On and subject to the terms of this Agreement, the Sixth Issuer grants to
Funding 1 a term loan which consists of the following sub-loans:
(a) the series 1 term AAA advance in the maximum aggregate principal
amount of [GBP]541,711,000 (the SIXTH ISSUER SERIES 1 TERM AAA
ADVANCE) and which corresponds to the sterling equivalent of the
principal amount upon issue of the Series 1 Class A Sixth Issuer
Notes;
(b) the series 2 term AAA advance in the maximum aggregate principal
amount of [GBP]541,712,000 (the SIXTH ISSUER SERIES 2 TERM AAA
ADVANCE) and which corresponds to the sterling equivalent of the
principal amount upon issue of the Series 2 Class A Sixth Issuer
Notes;
(c) the series 3 term AAA advance in the maximum aggregate principal
amount of [GBP]1,000,000,000 (the SIXTH ISSUER SERIES 3 TERM AAA
ADVANCE) and which corresponds to the principal amount upon issue of
the Series 3 Class A Sixth Issuer Notes;
(d) the series 4 term AAA advance in the maximum aggregate principal
amount of [GBP]519,600,000 (the SIXTH ISSUER SERIES 4 TERM AAA
ADVANCE) and which corresponds to the sterling equivalent of the
principal amount upon issue of the Series 4 Class A Sixth Issuer
Notes,
(e) the series 5A1 term AAA advance in the maximum aggregate principal
amount of [GBP]500,000,000 (the SIXTH ISSUER SERIES 5A1 TERM AAA
ADVANCE) and which corresponds to the principal amount upon issue of
the Series 5 Class A1 Sixth Issuer Notes; and
2
(f) the series 5A2 term AAA advance in the maximum aggregate principal
amount of [GBP]500,000,000 (the SIXTH ISSUER SERIES 5A2 TERM AAA
ADVANCE, and together with the Sixth Issuer Series 5A1 Term AAA
Advance, the SIXTH ISSUER SERIES 5A TERM AAA ADVANCES) and which
corresponds to the principal amount upon issue of the Series 5 Class
A2 Sixth Issuer Notes,
and together the Sixth Issuer Series 1 Term AAA Advance, the Sixth Issuer
Series 2 Term AAA Advance, the Sixth Issuer Series 3 Term AAA Advance, the
Sixth Issuer Series 4 Term AAA Advance, the Sixth Issuer Series 5A1 Term
AAA Advance and the Sixth Issuer Series A2 Term AAA Advance are referred to
herein as the SIXTH ISSUER TERM AAA ADVANCES.
3.2 SIXTH ISSUER TERM AA ADVANCES
On and subject to the terms of this Agreement, the Sixth Issuer grants to
Funding 1 a term loan which consists of the following sub-loans:
(a) the series 1 term AA advance in the maximum aggregate principal amount
of [GBP]19,394,000 (the SIXTH ISSUER SERIES 1 TERM AA ADVANCE) and
which corresponds to the sterling equivalent of the principal amount
upon issue of the Series 1 Class B Sixth Issuer Notes;
(b) the series 2 term AA advance in the maximum aggregate principal amount
of [GBP]19,394,000 (the SIXTH ISSUER SERIES 2 TERM AA ADVANCE) and
which corresponds to the sterling equivalent of the principal amount
upon issue of the Series 2 Class B Sixth Issuer Notes;
(c) the series 3 term AA advance in the maximum aggregate principal amount
of [GBP]35,300,000 (the SIXTH ISSUER SERIES 3 TERM AA ADVANCE) and
which corresponds to the principal amount upon issue of the Series 3
Class B Sixth Issuer Notes;
(d) the series 4 term AA advance in the maximum aggregate principal amount
of [GBP]18,082,000 (the SIXTH ISSUER SERIES 4 TERM AA ADVANCE) and
which corresponds to the sterling equivalent of the principal amount
upon issue of the Series 4 Class B Sixth Issuer Notes; and
(e) the series 5 term AA advance in the maximum aggregate principal amount
of [GBP]34,800,000 (the SIXTH ISSUER SERIES 5 TERM AA ADVANCE) and
which corresponds to the principal amount upon issue of the Series 5
Class B Sixth Issuer Notes,
and together the Sixth Issuer Series 1 Term AA Advance, the Sixth Issuer
Series 2 Term AA Advance, the Sixth Issuer Series 3 Term AA Advance, the
Sixth Issuer Series 4 Term AA Advance and the Sixth Issuer Series 5 Term AA
Advance are referred to herein as the SIXTH ISSUER TERM AA ADVANCES.
3.3 SIXTH ISSUER TERM BBB ADVANCES
On and subject to the terms of this Agreement, the Sixth Issuer grants to
Funding 1 a term loan which consists of the following sub-loans:
(a) the series 1 term BBB advance in the maximum aggregate principal
amount of [GBP]18,798,000 (the SIXTH ISSUER SERIES 1 TERM BBB ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 1 Class C Sixth Issuer Notes;
3
(b) the series 2 term BBB advance in the maximum aggregate principal
amount of [GBP]18,798,000 (the SIXTH ISSUER SERIES 2 TERM BBB ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 2 Class C Sixth Issuer Notes;
(c) the series 3 term BBB advance in the maximum aggregate principal
amount of [GBP]34,200,000 (the SIXTH ISSUER SERIES 3 TERM BBB ADVANCE)
and which corresponds to the principal amount upon issue of the Series
3 Class C Sixth Issuer Notes;
(d) the series 4 term BBB advance in the maximum aggregate principal
amount of [GBP]17,528,000 (the SIXTH ISSUER SERIES 4 TERM BBB ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 4 Class C Sixth Issuer Notes; and
(e) the series 5 term BBB advance in the maximum aggregate principal
amount of [GBP]33,700,000 (the SIXTH ISSUER SERIES 5 TERM BBB ADVANCE)
and which corresponds to the principal amount upon issue of the Series
5 Class C Sixth Issuer Notes,
and together the Sixth Issuer Series 1 Term BBB Advance, the Sixth Issuer
Series 2 Term BBB Advance, the Sixth Issuer Series 3 Term BBB Advance, the
Sixth Issuer Series 4 Term BBB Advance and the Sixth Issuer Series 5 Term
BBB Advance are referred to herein as the SIXTH ISSUER TERM BBB ADVANCES.
3.4 TERM ADVANCE RATING
The Term Advance Rating in respect of the Sixth Issuer Term AAA Advances
shall be AAA/Aaa/AAA, the Term Advance Rating in respect of the Sixth
Issuer Term AA Advances shall be AA/Aa3/AA and the Term Advance Rating in
respect of the Sixth Issuer Term BBB Advances shall be BBB/Baa2/BBB.
3.5 CONDITIONS PRECEDENT
Save as the Sixth Issuer and the Security Trustee may otherwise agree, the
Sixth Issuer Term Advances will not be available for utilisation unless the
Security Trustee has confirmed to Funding 1 that it or its advisers have
received all the information and documents listed IN SCHEDULE 1 hereof in
form and substance satisfactory to the Security Trustee.
4. INTEREST
4.1 RATE OF INTEREST TO FIRST FUNDING 1 INTEREST PAYMENT DATE
On the Closing Date the Agent Bank will determine the Initial Relevant
Screen Rate (as defined below) in respect of each Sixth Issuer Term Advance
as at or about 11.00 a.m. (London time) on that date. If the Initial
Relevant Screen Rate is unavailable, the Agent Bank will request the
principal London office of each of the Reference Banks to provide the Agent
Bank with its offered quotations to leading banks for two-week and
one-month sterling deposits of [GBP]10,000,000, in the London inter-bank
market as at or about 11.00 a.m. (London time) on such Closing Date. The
Term Advance Rates of Interest for the first Interest Period shall be the
aggregate of (a) the Relevant Margin and (b) the Initial Relevant Screen
Rate or, if the Initial Relevant Screen Rate is unavailable, the linear
interpolation of the arithmetic mean of such offered quotations for
two-week sterling deposits and the arithmetic mean of such offered
quotations for one-month sterling deposits (rounded upwards, if necessary,
to five decimal places).
4
INITIAL RELEVANT SCREEN RATE means the linear interpolation of the
arithmetic mean of the offered quotations to leading banks for two-week
sterling deposits and the arithmetic mean of the offered quotations to
leading banks for one-month sterling deposits (rounded upwards if necessary
to five decimal places) displayed on the Moneyline Telerate monitor at
Moneyline Telerate page number 3750 (or such replacement page on that
service which displays the information) or, if that service ceases to
display the information, such other service as may be determined by the
Sixth Issuer with the approval of the Security Trustee.
4.2 TERM ADVANCE RATES OF INTEREST
The Term Advance Rate of Interest payable on each Term Advance shall be
LIBOR for three-month sterling deposits as determined in accordance with
CLAUSE 6 of the Intercompany Loan Terms and Conditions plus a RELEVANT
MARGIN which shall be:
(a) in respect of the Sixth Issuer Series 1 Term AAA Advance, a margin of
minus 0.02310 per cent. per annum;
(b) in respect of the Sixth Issuer Series 2 Term AAA Advance, a margin of
0.11610 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 0.48220 per cent. per annum;
(c) in respect of the Sixth Issuer Series 3 Term AAA Advance, a margin of
0.12500 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 0.25000 per cent. per annum;
(d) in respect of the Sixth Issuer Series 4 Term AAA Advance, a margin of
0.16290 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 0.57580 per cent. per annum;
(e) in respect of the Sixth Issuer Series 5A1 Term AAA Advance, a margin
of 0.15000 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 0.30000 per cent. per annum;
(f) in respect of the Sixth Issuer Series 5A2 Term AAA Advance, a margin
of 0.16000 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 0.32000 per cent. per annum;
(g) in respect of the Sixth Issuer Series 1 Term AA Advance, a margin of
0.12250 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 0.49500 per cent. per annum;
(h) in respect of the Sixth Issuer Series 2 Term AA Advance, a margin of
0.19190 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 0.63380 per cent. per annum;
(i) in respect of the Sixth Issuer Series 3 Term AA Advance, a margin of
0.23000 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 0.46000 per cent. per annum;
(j) in respect of the Sixth Issuer Series 4 Term AA Advance, a margin of
0.26020 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 0.77040 per cent. per annum;
5
(k) in respect of the Sixth Issuer Series 5 Term AA Advance, a margin of
0.31000 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 0.62000 per cent. per annum;
(l) in respect of the Sixth Issuer Series 1 Term BBB Advance, a margin of
0.40710 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 1.06420 per cent. per annum;
(m) in respect of the Sixth Issuer Series 2 Term BBB Advance, a margin of
0.52670 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 1.30340 per cent. per annum;
(n) in respect of the Sixth Issuer Series 3 Term BBB Advance, a margin of
0.68000 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 1.36000 per cent. per annum;
(o) in respect of the Sixth Issuer Series 4 Term BBB Advance, a margin of
0.74260 per cent. per annum up to and including the Interest Period
ending in September 2011 and thereafter 1.73520 per cent. per annum;
and
(p) in respect of the Sixth Issuer Series 5 Term BBB Advance, a margin of
0.80000 per cent. per annum up to (and including) the Interest Period
ending in September 2011 and thereafter 1.60000 per cent. per annum.
4.3 INTEREST PERIODS
The first Interest Period shall commence on (and include) the Closing Date
and end on (but exclude) the Funding 1 Interest Payment Date falling in
December, 2004. Each subsequent Interest Period shall commence on (and
include) a Funding 1 Interest Payment Date and end on (but exclude) the
following Funding 1 Interest Payment Date.
5. REPAYMENT
5.1 REPAYMENT SUBJECT TO TERMS OF THE FUNDING 1 DEED OF CHARGE
The terms and provisions of this CLAUSE 5 are to be read subject to the
provisions of PART II of SCHEDULE 3 to the Funding 1 Deed of Charge and as
the same may be further amended or varied from time to time in accordance
with the terms of the Funding 1 Deed of Charge. Without limiting the
generality of the foregoing, the Sixth Issuer Term Advances shall become
due and payable as described in PARAGRAPH 1.4 of PART II of SCHEDULE 3 of
the Funding 1 Deed of Charge.
5.2 REPAYMENT OF SIXTH ISSUER TERM AAA ADVANCES PRIOR TO THE OCCURRENCE OF A
TRIGGER EVENT AND PRIOR TO THE SERVICE ON FUNDING 1 OF AN INTERCOMPANY LOAN
ACCELERATION NOTICE OR THE SERVICE ON EACH ISSUER OF A NOTE ACCELERATION
NOTICE
Subject to the provisions of CLAUSES 1 and 2 of PART II of SCHEDULE 3 of
the Funding 1 Deed of Charge, prior to the occurrence of a Trigger Event
and prior to the service on Funding 1 of an Intercompany Loan Acceleration
Notice or the service on each Issuer of a Note Acceleration Notice, Funding
1 shall repay to the Sixth Issuer:
(a) the Sixth Issuer Series 1 Term AAA Advance on the Funding 1 Interest
Payment Date falling in September 2005;
6
(b) the Sixth Issuer Series 2 Term AAA Advance in four equal instalments
(each a Scheduled Amortisation Instalment) on the Funding 1 Interest
Payment Date falling in March 2007, June 2007, September 2007 and
December 2007 but if there are insufficient funds available to repay
the Sixth Issuer Series 2 Term AAA Advance on such Funding 1 Interest
Payment Date, then the shortfall shall be repaid on subsequent Funding
1 Interest Payment Dates from Funding 1 Available Principal Receipts
until the Sixth Issuer Series 2 Term AAA Advance is fully repaid;
(c) the Sixth Issuer Series 3 Term AAA Advance in four equal instalments
(each a Scheduled Amortisation Instalment) on the Funding 1 Interest
Payment Date falling in December 2007, March 2008, June 2008 and
September 2008 but if there are insufficient funds available to repay
the Scheduled Amortisation Instalments on such Funding 1 Interest
Payment Dates, then the shortfall shall be repaid on subsequent
Funding 1 Interest Payment Dates from Funding 1 Available Principal
Receipts until the Sixth Issuer Series 3 Term AAA Advance is fully
repaid;
(d) the Sixth Issuer Series 4 Term AAA Advance in two equal instalments
(each a Scheduled Amortisation Instalment) on the Funding 1 Interest
Payment Date falling December 2009 and March 2010 but if there are
insufficient funds available to repay the Scheduled Amortisation
Instalments on such Funding 1 Interest Payment Dates, then the
shortfall shall be repaid on subsequent Funding 1 Interest Payment
Dates from Funding 1 Available Principal Receipts until the Sixth
Issuer Series 4 Term AAA Advance is fully repaid;
(e) the Sixth Issuer Series 5A1 Term AAA Advance on each Funding 1
Interest Payment Date commencing on the Funding 1 Interest Payment
Date falling in September 2011 to the extent of Funding 1 Available
Principal Receipts until the Sixth Issuer Series 5A1 Term AAA Advance
is fully repaid; and
(f) the Sixth Issuer Series 5A2 Term AAA Advance on each Funding 1
Interest Payment Date commencing on the Funding 1 Interest Payment
Date falling in September 2011 to the extent of Funding 1 Available
Principal Receipts until the Sixth Issuer Series 5A2 Term AAA Advance
is fully repaid.
5.3 REPAYMENT OF SIXTH ISSUER TERM AA ADVANCES PRIOR TO THE OCCURRENCE OF A
TRIGGER EVENT AND PRIOR TO THE SERVICE ON FUNDING 1 OF AN INTERCOMPANY LOAN
ACCELERATION NOTICE OR THE SERVICE ON EACH ISSUER OF A NOTE ACCELERATION
NOTICE
Subject to the provisions of CLAUSES 1 and 2 of PART II of SCHEDULE 3 of
the Funding 1 Deed of Charge, prior to the occurrence of a Trigger Event
and prior to the service on Funding 1 of an Intercompany Loan Acceleration
Notice or the service on each Issuer of a Note Acceleration Notice, Funding
1 shall repay to the Sixth Issuer:
(a) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Sixth Issuer Series 1
Term AAA Advance is fully repaid, the Sixth Issuer Series 1 Term AA
Advance to the extent of Funding 1 Available Principal Receipts until
the Sixth Issuer Series 1 Term AA Advance is fully repaid;
(b) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Sixth Issuer Series 2
Term AAA Advance is fully repaid, the Sixth Issuer Series 2 Term AA
Advance to the extent of Funding 1 Available Principal Receipts until
the Sixth Issuer Series 2 Term AA Advance is fully repaid;
7
(c) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Sixth Issuer Series 3
Term AAA Advance is fully repaid, the Sixth Issuer Series 3 Term AA
Advance to the extent of Funding 1 Available Principal Receipts until
the Sixth Issuer Series 3 Term AA Advance is fully repaid;
(d) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Sixth Issuer Series 4
Term AAA Advance is fully repaid, the Sixth Issuer Series 4 Term AA
Advance to the extent of Funding 1 Available Principal Receipts until
the Sixth Issuer Series 4 Term AA Advance is fully repaid; and
(e) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Sixth Issuer Series 5
Term AAA Advances are fully repaid, the Sixth Issuer Series 5 Term AA
Advance to the extent of Funding 1 Available Principal Receipts
therefor until the Sixth Issuer Series 5 Term AA Advance is fully
repaid.
5.4 REPAYMENT OF SIXTH ISSUER TERM BBB ADVANCES PRIOR TO THE OCCURRENCE OF A
TRIGGER EVENT AND PRIOR TO THE SERVICE ON FUNDING 1 OF AN INTERCOMPANY LOAN
ACCELERATION NOTICE OR THE SERVICE ON EACH ISSUER OF A NOTE ACCELERATION
NOTICE
Subject to the provisions of CLAUSES 1 and 2 of PART II of SCHEDULE 3 of
the Funding 1 Deed of Charge, prior to the occurrence of a Trigger Event
and prior to the service on Funding 1 of an Intercompany Loan Acceleration
Notice or the service on each Issuer of a Note Acceleration Notice, Funding
1 shall repay to the Sixth Issuer:
(a) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Sixth Issuer Series 1
Term AA Advance is fully repaid, the Sixth Issuer Series 1 Term BBB
Advance to the extent of Funding 1 Available Principal Receipts until
the Sixth Issuer Series 1 Term BBB Advance is fully repaid;
(b) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Sixth Issuer Series 2
Term AA Advance is fully repaid, the Sixth Issuer Series 2 Term BBB
Advance to the extent of Funding 1 Available Principal Receipts until
the Sixth Issuer Series 2 Term BBB Advance is fully repaid;
(c) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Sixth Issuer Series 3
Term AA Advance is fully repaid, the Sixth Issuer Series 3 Term BBB
Advance to the extent of Funding 1 Available Principal Receipts until
the Sixth Issuer Series 3 Term BBB Advance is fully repaid;
(d) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Sixth Issuer Series 4
Term AA Advance is fully repaid, the Sixth Issuer Series 4 Term BBB
Advance to the extent of Funding 1 Available Principal Receipts until
the Sixth Issuer Series 4 Term BBB Advance is fully repaid;
(e) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Sixth Issuer Series 5
Term AA Advance is fully repaid, the Sixth Issuer Series 5 Term BBB
Advance to the extent of Funding 1 Available Principal Receipts
therefor until the Sixth Issuer Series 5 Term BBB Advance is fully
repaid.
8
5.5 REPAYMENT OF SIXTH ISSUER TERM ADVANCES FOLLOWING THE OCCURRENCE OF A
NON-ASSET TRIGGER EVENT BUT PRIOR TO THE SERVICE ON FUNDING 1 OF AN
INTERCOMPANY LOAN ACCELERATION NOTICE OR THE SERVICE ON EACH ISSUER OF A
NOTE ACCELERATION NOTICE
On and from the Funding 1 Interest Payment Date following the occurrence of
a Non-Asset Trigger Event but prior to the service on Funding 1 of an
Intercompany Loan Acceleration Notice or the service on each Issuer of a
Note Acceleration Notice, Funding 1 shall repay the Sixth Issuer Term
Advances on each Funding 1 Interest Payment Date from Funding 1 Available
Principal Receipts in the manner set out in CLAUSE 3 of PART II of SCHEDULE
3 to the Funding 1 Deed of Charge.
5.6 REPAYMENT OF SIXTH ISSUER TERM ADVANCES FOLLOWING THE OCCURRENCE OF AN
ASSET TRIGGER EVENT BUT PRIOR TO THE SERVICE ON FUNDING 1 OF AN
INTERCOMPANY LOAN ACCELERATION NOTICE OR THE SERVICE ON EACH ISSUER OF A
NOTE ACCELERATION NOTICE
Following the occurrence of an Asset Trigger Event but prior to the service
on Funding 1 of an Intercompany Loan Acceleration Notice or the service on
each Issuer of a Note Acceleration Notice, Funding 1 shall repay the Sixth
Issuer Term Advances on each Funding 1 Interest Payment Date from Funding 1
Available Principal Receipts in the manner set out in CLAUSE 4 of PART II
of SCHEDULE 3 to the Funding 1 Deed of Charge.
5.7 REPAYMENT OF SIXTH ISSUER TERM ADVANCES FOLLOWING THE SERVICE ON EACH
ISSUER OF A NOTE ACCELERATION NOTICE BUT PRIOR TO THE SERVICE ON FUNDING 1
OF AN INTERCOMPANY LOAN ACCELERATION NOTICE
Following the service on each Issuer (including the Sixth Issuer) of a Note
Acceleration Notice pursuant to the terms of the Sixth Issuer Deed of
Charge but prior to the service on Funding 1 of an Intercompany Loan
Acceleration Notice, Funding 1 shall apply Funding 1 Available Principal
Receipts in the manner set out in CLAUSE 5 of PART II of SCHEDULE 3 to the
Funding 1 Deed of Charge.
5.8 REPAYMENT FOLLOWING THE SERVICE ON FUNDING 1 OF AN INTERCOMPANY LOAN
ACCELERATION NOTICE
Following the service on Funding 1 of an Intercompany Loan Acceleration
Notice pursuant to the terms of the Funding 1 Deed of Charge, the Sixth
Issuer Intercompany Loan shall be repaid in the manner set out in PART III
of SCHEDULE 3 to the Funding 1 Deed of Charge (as the same shall be amended
from time to time).
5.9 ACKNOWLEDGEMENT OF PREVIOUS INTERCOMPANY LOANS
The Sixth Issuer hereby acknowledges and agrees that Funding 1 has entered
into an intercompany loan agreement with Permanent Financing (No. 1) PLC
(the FIRST ISSUER) dated 14th June, 2002 (the FIRST ISSUER INTERCOMPANY
LOAN AGREEMENT), an intercompany loan agreement with Permanent Financing
(No. 2) PLC (the SECOND ISSUER) dated 6th March, 2003 (the SECOND ISSUER
INTERCOMPANY LOAN AGREEMENT), an intercompany loan agreement with Permanent
Financing (No. 3) PLC (the THIRD ISSUER) dated 25th November, 2003 (the
THIRD INTERCOMPANY LOAN AGREEMENT), an intercompany loan agreement with
Permanent Financing (No. 4) PLC (the FOURTH ISSUER) dated 12th March, 2004
(the FOURTH INTERCOMPANY LOAN AGREEMENT) and an intercompany loan agreement
with Permanent Financing (No. 5) PLC (the FIFTH ISSUER) dated 22nd July,
2004 (the FIFTH INTERCOMPANY LOAN AGREEMENT) and accordingly, the
obligation of Funding 1 to repay this Sixth Issuer Intercompany Loan, the
Fifth Issuer Intercompany Loan, the Fourth Issuer Intercompany Loan, the
Third Issuer Intercompany Loan, the Second Issuer Intercompany Loan and the
9
First Issuer Intercompany Loan will depend on the Term Advance Ratings of
the various Term Advances made to Funding 1 under this Sixth Issuer
Intercompany Loan Agreement, the Fifth Intercompany Loan Agreement, the
Fourth Issuer Intercompany Loan Agreement, the Third Issuer Intercompany
Loan Agreement, the Second Issuer Intercompany Loan Agreement and the First
Issuer Intercompany Loan Agreement and the provisions of SCHEDULE 3 to the
Funding 1 Deed of Charge.
5.10 ACKNOWLEDGEMENT OF NEW INTERCOMPANY LOANS
The Sixth Issuer hereby acknowledges and agrees that from time to time
Funding 1 may enter into New Intercompany Loans with New Issuers and that
the obligation of Funding 1 to repay this Sixth Issuer Intercompany Loan
and any New Intercompany Loan will depend on the Term Advance Rating of the
individual Term Advances made to Funding 1 under any of the First Issuer
Intercompany Loan, the Second Issuer Intercompany Loan Agreement, the Third
Issuer Intercompany Loan Agreement, the Fourth Issuer Intercompany Loan,
the Fifth Issuer Intercompany Loan, this Sixth Issuer Intercompany Loan and
any New Intercompany Loans and the provisions of Schedule 3 to the Funding
1 Deed of Charge. Subject to CLAUSE 25 of the Funding 1 Deed of Charge
(Supplemental Provisions Regarding the Security Trustee), any amendments to
this Agreement will be made only with the prior written consent of each
party to this Agreement.
6. PREPAYMENT
6.1 PREPAYMENT OF SIXTH ISSUER TERM ADVANCES
(a) If the conditions to the Redemption Option set out in CONDITION 5(F) of the
Sixth Issuer Notes are met, then Funding 1 has the right to prepay the Term
Advances corresponding to the Called Notes at an amount equal to their
Specified Amount (as set out in CONDITION 5(F) of the Sixth Issuer Notes)
without penalty or premium but subject to CLAUSE 15 (Default Interest and
Indemnity) of the Intercompany Loan Terms and Conditions; and
(b) each of the Security Trustee, the Agent Bank (without liability or
responsibility to any secured creditor in respect of any loss, liability or
claim arising as a result thereof), Funding 1 and the Sixth Issuer shall
concur in, execute and do all such deeds, instruments, acts and things, and
shall consent to any amendment, modification or waiver of the provisions of
the Sixth Issuer Transaction Documents to which it is a party, which may be
necessary or desirable to permit and give effect to the prepayment (as
certified by the Sixth Issuer and/or Funding 1 to the Security Trustee
prior to any such amendment, modification or waiver being effected),
including any waiver of covenants of Funding 1.
6.2 APPLICATION OF MONIES
The Sixth Issuer hereby agrees to apply any amounts received by way of
prepayment pursuant to CLAUSE 6.1 (Prepayment of Sixth Issuer Term
Advances) in making repayments under the relevant Sixth Issuer Notes
pursuant to its Redemption Option.
7. CERTAIN FEES, ETC.
7.1 FEE FOR PROVISION OF SIXTH ISSUER TERM ADVANCES
Funding 1 shall (except in the case of payments due under paragraphs (c),
(e), (f) and (i) below, which shall be paid when due) on each Funding 1
Interest Payment Date pay to the Sixth Issuer for same day value to the
Sixth Issuer Transaction Account a fee for the
10
provision of the Sixth Issuer Term Advances. Such fee shall be an amount or
amounts in the aggregate equal to the following:
(a) the fees, costs, charges, liabilities and expenses and any other
amounts due and payable to the Security Trustee pursuant to the Sixth
Issuer Deed of Charge together with interest thereon as provided
therein;
(b) the fees, costs, charges, liabilities and expenses and any other
amounts due and payable to the Note Trustee pursuant to the Sixth
Issuer Trust Deed together with interest thereon as provided therein;
(c) the reasonable fees and expenses of any legal advisers, accountants
and auditors appointed by the Sixth Issuer and properly incurred in
their performance of their functions under the Transaction Documents
which have fallen due;
(d) the fees, costs and expenses due and payable to the Paying Agents, the
Registrar, the Transfer Agent and the Agent Bank pursuant to the Sixth
Issuer Paying Agent and Agent Bank Agreement;
(e) any amounts due and payable by the Sixth Issuer to the Inland Revenue
in respect of the Sixth Issuer's liability to United Kingdom
corporation tax (insofar as payment is not satisfied by the surrender
of group relief or out of the profits, income or gains of the Sixth
Issuer and subject to the terms of the Sixth Issuer Deed of Charge) or
any other Taxes payable by the Sixth Issuer;
(f) the fees, costs, charges, liabilities and expenses due and payable to
the Sixth Issuer Account Bank, pursuant to the Sixth Issuer Bank
Account Agreement (if any);
(g) the fees, costs, charges, liabilities and expenses due and payable to
the Sixth Issuer Cash Manager, pursuant to the Sixth Issuer Cash
Management Agreement;
(h) any termination payment due and payable by the Sixth Issuer to any
Sixth Issuer Swap Provider, pursuant to any Sixth Issuer Swap
Agreement;
(i) the fees, costs, charges and liabilities and expenses due and payable
to the Corporate Services Provider pursuant to the Sixth Issuer
Corporate Services Agreement;
(j) an amount equal to "G" where G is calculated as follows:
G = (A - D - H) or, if such calculation is less than zero, then G
shall be zero
where,
A = 0.01 per cent of the interest amounts paid by Funding 1 to the
Sixth Issuer on the Sixth Issuer Term Advances on the immediately
preceding Funding 1 Interest Payment Date;
D = E - F
where,
E = the interest amounts (which excludes those fee amounts in
this CLAUSE 6.1) paid by Funding 1 to the Sixth Issuer on
the Sixth Issuer
11
Term Advances on the immediately preceding Funding 1
Interest Payment Date; and
F = amounts paid by the Sixth Issuer under paragraphs (d) to
(h) of the Sixth Issuer Pre-Enforcement Revenue Priority of
Payments on the immediately preceding Funding 1 Interest
Payment Date;
and
H = the cumulative aggregate of (D - A) as calculated on each
previous Funding 1 Interest Payment Date. If such cumulative
aggregate of (D - A) is less than zero, then H shall be
zero;
(k) any other amounts due or overdue by the Sixth Issuer to third parties
including the Rating Agencies and the amounts paid by the Sixth Issuer
under the Subscription Agreement and the Underwriting Agreement
(excluding, for these purposes, the Noteholders) other than amounts
specified in paragraphs (a) to (j) above; and
(l) if on any Funding 1 Interest Payment Date there are Sixth Issuer
Principal Receipts remaining in the Sixth Issuer Bank Accounts, an
amount equal to the difference between (i) the interest that would be
earned by the Sixth Issuer on such Sixth Issuer Principal Receipts
remaining in the Sixth Issuer Bank Accounts during the next succeeding
Interest Period and (ii) the interest that would be payable by the
Sixth Issuer applying the weighted average rate of interest payable on
the Series 5 Sixth Issuer Notes or the relevant Sixth Issuer Currency
Swap Agreements due for repayment at the end of that Interest Period
to such Sixth Issuer Principal Receipts remaining in the Sixth Issuer
Bank Accounts,
together with, (i) in respect of taxable supplies made to the Sixth Issuer,
an amount in respect of any value added tax or similar tax payable in
respect thereof against production of a valid tax invoice; and (ii) in
respect of taxable supplies made to a person other than the Sixth Issuer,
any amount in respect of any Irrecoverable VAT or similar tax payable in
respect thereof (against production of a copy of the relevant tax invoice),
and to be applied subject to and in accordance with the provisions of the
Sixth Issuer Pre-Enforcement Revenue Priority of Payments in the Sixth
Issuer Cash Management Agreement.
7.2 SET-OFF
Funding 1 and each of the other parties to the Sixth Issuer Intercompany
Loan Agreement agree that the Sixth Issuer shall be entitled to set-off
those amounts due and payable by Funding 1 pursuant to this CLAUSE 7 on the
Closing Date against the amount to be advanced by the Sixth Issuer to
Funding 1 by way of the Sixth Issuer Term Advances on the Closing Date.
8. APPLICATION OF CERTAIN PROVISIONS
The provisions set out in CLAUSE 4.2 (Limited Recourse) of the Intercompany
Loan Terms and Conditions shall apply to:
(a) the Sixth Issuer Term AA Advances; and
(b) the Sixth Issuer Term BBB Advances.
12
9. ADDRESSES
The addresses referred to in CLAUSE 18.4 (Notices) of the Intercompany Loan
Terms and Conditions are as follows:
THE SECURITY TRUSTEE:
THE BANK OF NEW YORK
For the attention of: Global Structured Finance - Corporate Trust
Address: The Bank of ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Facsimile: + 44 20 7964 60 1/6399
THE SIXTH ISSUER:
For the attention of: The Secretary
Address: Permanent Financing (No. 6) PLC
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Copy to: HBOS Treasury Services plc
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
For the attention of: Head of Mortgage Securitisation and Covered Bonds
FUNDING 1:
For the attention of: The Secretary
Address: Permanent Funding (No. 1) Limited
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Copy to: HBOS Treasury Services plc
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile number: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
13
For the attention of: Head of Mortgage Securitisation and Covered Bonds
RATING AGENCIES:
MOODY'S:
Address: ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
For the attention of: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
S&P:
Address: ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
For the attention of: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
FITCH:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
For the attention of: FS Surveillance
Telephone: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
10. COUNTERPARTS
This Intercompany Loan Confirmation may be signed (manually or by
facsimile) and delivered in more than one counterpart all of which, taken
together, shall constitute one and the same Agreement.
11. THIRD PARTY RIGHTS
The Intercompany Loan Confirmation does not create any right under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ which is enforceable by any
person who is not a party to the Intercompany Loan Agreement.
12. GOVERNING LAW
This Sixth Issuer Intercompany Loan Confirmation is governed by and shall
be construed in accordance with English law.
14
SCHEDULE 1
CONDITIONS PRECEDENT IN RESPECT OF DRAWDOWN
1. AUTHORISATIONS
(a) A copy of the memorandum and articles of association, certificate of
incorporation and certificate of incorporation on change of name of Funding
1.
(b) A copy of a resolution of the board of directors of Funding 1 authorising
the entry into, execution and performance of each of the Transaction
Documents to which Funding 1 is a party and authorising specified persons
to execute those on its behalf.
(c) A certificate of a director of Funding 1 certifying:
(i) that each document delivered under this paragraph 1 of SCHEDULE 1 is
correct, complete and in full force and effect as at a date no later
than the date of execution of the Sixth Issuer Intercompany Loan
Agreement and undertaking to notify the Security Trustee if that
position should change prior to the first Drawdown Date; and
(ii) as to the identity and specimen signatures of the directors and
signatories of Funding 1.
2. SECURITY
(a) The Funding 1 Deed of Charge (and the Fourth Deed of Accession) duly
executed by the parties thereto.
(b) Duly completed bank account mandates in respect of the Funding 1 GIC
Account and the Funding 1 Transaction Account.
(c) Security Power of Attorney for Funding 1.
3. LEGAL OPINION
Legal opinions of:
(a) Shepherd & Wedderburn Scottish legal advisers to the Seller and the
Servicer, addressed to, inter alios, the Security Trustee;
(b) ▇▇▇▇▇ & ▇▇▇▇▇ LLP, English and U.S. legal advisers to the Seller, the
Sixth Issuer and the Servicer, addressed to, inter alios, the Security
Trustee; and
4. TRANSACTION DOCUMENTS
Duly executed copies of:
(a) the Servicing Agreement;
(b) the Mortgages Trust Deed;
(c) the Halifax Deed and Power of Attorney;
(d) the Funding 1 Deed of Charge;
15
(e) the Second Supplemental Funding 1 Deed of Charge;
(f) the Funding 1 Swap Agreement;
(g) the Corporate Services Agreements;
(h) the Funding 1 Liquidity Facility Agreement;
(i) the First Issuer Intercompany Loan Agreement, the Second Issuer
Intercompany Loan Agreement and the Third Issuer Intercompany Loan
Agreement, the Fourth Issuer Intercompany Loan Agreement, the Fifth
Issuer Intercompany Loan Agreement and the Sixth Issuer Intercompany
Loan Agreement;
(j) the Cash Management Agreement;
(k) the Bank Account Agreement;
(l) the Funding 1 Guaranteed Investment Contract;
(m) the First Start-up Loan Agreement, the Second Start-up Loan Agreement,
the Third Start-up Loan Agreement, the Fourth Start-up Loan Agreement,
the Fifth Start-up Loan Agreement and the Sixth Start-up Loan
Agreement;
(n) the Mortgage Sale Agreement;
(o) the Seller Power of Attorney;
(p) the Sixth Issuer Deed of Charge;
(q) the Sixth Issuer Cash Management Agreement;
(r) the Sixth Issuer Swap Agreements;
(s) the Sixth Issuer Bank Account Agreement;
(t) the Sixth Issuer Post-Enforcement Call Option Agreement;
(u) the Sixth Issuer Trust Deed;
(v) the Sixth Issuer Global Notes;
(w) the Sixth Issuer Paying Agent and Agent Bank Agreement;
(x) the Underwriting Agreement;
(y) the Subscription Agreements;
(z) the Mortgages Trustee Guaranteed Investment Contract; and
(aa) the Master Definitions and Construction Schedule, the First Issuer
Master Definitions and Construction Schedule, the Second Issuer Master
Definitions and Construction Schedule, the Third Issuer Master
Definitions and Construction Schedule, the Fourth Issuer Master
Definitions and Construction Schedule, the Fifth Issuer Master
Definitions and Construction Schedule and the Sixth Issuer Master
Definitions and Construction Schedule.
16
5. BOND DOCUMENTATION
(a) Confirmation that the Sixth Issuer Notes have been issued and the
subscription proceeds received by the Sixth Issuer; and
(b) Copies of the Offering Circular.
6. MISCELLANEOUS
Solvency certificates from Funding 1 signed by two directors of Funding 1
in or substantially in the form set out in SCHEDULE 2 to the Intercompany
Loan Terms and Conditions.
17
SIGNATORIES
IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed on
the day and year appearing on page 1.
FUNDING 1
SIGNED by )
for and on behalf of )
PERMANENT FUNDING (NO. 1) LIMITED ) ..........................
SIXTH ISSUER
SIGNED by )
for and on behalf of )
PERMANENT FINANCING (NO. 6) PLC ) ..........................
SECURITY TRUSTEE
SIGNED by )
for and on behalf of )
THE BANK OF NEW YORK ) ..........................
AGENT BANK
SIGNED by )
for and on behalf of )
CITIBANK, N.A.,
LONDON BRANCH ) ..........................
18
