DRAFT 14.07.04 EXHIBIT 10.1
AMENDED AND RESTATED FUNDING 1 LIQUIDITY
FACILITY AGREEMENT
DATED [22ND JULY], 2004
PERMANENT FUNDING (NO. 1) LIMITED
AS FUNDING 1
AND
JPMORGAN CHASE BANK
AS FUNDING 1 LIQUIDITY FACILITY PROVIDER
AND
HALIFAX PLC
AS CASH MANAGER
AND
THE BANK OF NEW YORK
AS SECURITY TRUSTEE
▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇ LLP
LONDON
CONTENTS
CLAUSE PAGE
1. Definitions and Interpretation..........................................3
2. The Funding 1 Liquidity Facility........................................4
3. Purpose.................................................................6
4. Conditions Precedent....................................................6
5. Drawdown................................................................8
6. Repayment...............................................................9
7. Cancellation...........................................................10
8. Interest...............................................................12
9. Payments...............................................................14
10. Taxes..................................................................14
11. Market Disruption......................................................17
12. Increased Costs........................................................17
13. Illegality.............................................................18
14. Representations and Warranties.........................................19
15. Undertakings...........................................................22
16. Default................................................................23
17. Fees...................................................................23
18. Enforcement and Subordination..........................................25
19. Expenses...............................................................26
20. Stamp Duties...........................................................26
21. Indemnities............................................................27
22. Evidence and Calculations..............................................28
23. Amendments and Waivers.................................................28
24. Changes to the Parties.................................................28
25. Disclosure of Information..............................................31
26. Set-Off................................................................31
27. Severability...........................................................31
28. Counterparts...........................................................31
29. Notices................................................................32
30. Third Party Rights.....................................................32
31. Governing Law..........................................................33
32. Submission to Jurisdiction.............................................33
SCHEDULE
1. Conditions Precedent Documents.........................................34
2. Calculation of the Mandatory Liquid Asset Cost.........................35
3. Form of Funding 1 Liquidity Facility Request...........................37
4. Form of Novation Certificate...........................................38
5.
SIGNATORIES..................................................................40
THIS AMENDED AND RESTATED FUNDING 1 LIQUIDITY FACILITY AGREEMENT is dated
[{circle}], 2004
BETWEEN:
(1) PERMANENT FUNDING (NO. 1) LIMITED, (registered number 4267660) whose
registered office is ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(FUNDING 1);
(2) JPMORGAN CHASE BANK, acting through its offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ acting in its capacity as the Funding 1 Liquidity
Facility Provider;
(3) HALIFAX PLC, a public limited company incorporated under the laws of
England and Wales whose registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ acting in its capacity as Cash Manager; and
(4) THE BANK OF NEW YORK, acting through its offices at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its capacity as Security Trustee, which
expression shall include such company and all other persons or companies
for the time being acting as security trustee (or co-trustee) pursuant to
the terms of the Funding 1 Deed of Charge.
WHEREAS:
(A) The parties hereto entered into the Funding 1 Liquidity Facility
Agreement (as amended and restated by this Agreement and from time to
time, the FUNDING 1 LIQUIDITY FACILITY AGREEMENT) to assist Funding 1 in,
among other things, (i) making Eligible Liquidity Facility Principal
Repayments and (ii) meeting its interest payment liabilities in respect
of relevant Term Advances from time to time.
(B) Upon the terms and subject to the conditions set out in the Funding 1
Liquidity Facility Agreement, the Funding 1 Liquidity Facility Provider
agreed to make a Funding 1 Liquidity Facility available to Funding 1 on
and subject to the terms set out in the Funding 1 Liquidity Facility
Agreement.
(C) The parties to the Funding 1 Liquidity Facility Agreement have agreed to
amend and restate the terms of that Agreement as set out herein.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Agreement 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 Agreement) (the
MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and
specifically incorporated into this Agreement and, accordingly, the
expressions defined in the Master Definitions and Construction Schedule
(as so amended, varied or supplemented from time to time) shall, except
where the context otherwise requires and save where otherwise defined
herein, have the same meanings in this Agreement and this Agreement shall
be construed in accordance with the interpretation provisions set out in
Clause 2 of the Master Definitions and Construction Schedule.
3
1.2 This Agreement amends and restates the Funding 1 Liquidity Facility
Agreement made on 14th June, 2002 as amended and restated on the 6th
March, 2003, 25th November, 2003 and 12th March, 2004(the PRINCIPAL
AGREEMENT). As of the date of this Agreement, any future rights or
obligations (excluding such obligations accrued to the date of this
Agreement) of a party under the Principal Agreement shall be extinguished
and shall instead be governed by this Agreement.
1.3 CONSTRUCTION
The Security Trustee has agreed to become a party to this Agreement only
for the purpose of taking the benefit of CLAUSES 2.3 (Extension), 5.1(B)
(Funding 1 Liquidity Drawings), 5.2(A), (B) and (D) (Stand by Drawings),
6(B) and (C) (Repayment), 14.1 (Representations and warranties by Funding
1), 7.2 (Voluntary Cancellation), 7.3 (Additional right of prepayment and
cancellation), 14 (Representations and warranties). 15.2 (Financial
information), 18 (Enforcement and Subordination), 24 (Changes to the
Parties) and 29 (Notices) and for agreeing amendments to this Agreement
pursuant to CLAUSE 23 (Amendments and waivers) and for the better
preservation and enforcement of its rights under the Funding 1 Deed of
Charge and (without prejudice to the terms of the Funding 1 Deed of
Charge), other than as specified above, the Security Trustee shall assume
no obligations or liabilities whatsoever to the Funding 1 Liquidity
Facility Provider or Funding 1 by virtue of the provisions of this
Agreement.
2. THE FUNDING 1 LIQUIDITY FACILITY
2.1 FACILITY
Subject to the terms of this Agreement, the Funding 1 Liquidity Facility
Provider grants to Funding 1 the Funding 1 Liquidity Facility. The
Funding 1 Liquidity Facility may be utilised by way of Funding 1
Liquidity Facility Drawings or Funding 1 Liquidity Facility Stand-by
Drawings.
2.2 FACILITY LIMITS
The aggregate principal amount of the Funding 1 Liquidity Facility Loan
shall not at any time exceed the Funding 1 Liquidity Facility Commitment.
The Funding 1 Liquidity Facility Provider is not obliged to lend more
than the Funding 1 Liquidity Facility Commitment.
Save as otherwise provided in the Agreement (including, for the avoidance
of doubt, CLAUSE 7 (Cancellation)), if any of the following shall occur,
the Funding 1 Liquidity Facility Commitment shall be reduced in the
manner provided:
(a) if the First Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Liquidity Facility Commitment shall be
reduced by the lesser of {pound-sterling}60,000,000 and an amount
which the Rating Agencies have confirmed will have no material
adverse effect on the then current ratings of any Notes of any
Issuer (or if the rating of any of the Notes of any Issuer has been
downgraded, an amount which will not prevent the restoration of
such rating); or
(b) if the Second Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Liquidity Facility Commitment shall be
reduced by the lesser of {pound-sterling}47,500,000 and an amount
which the Rating Agencies have confirmed will have no material
adverse effect on the then current ratings of any Notes of any
Issuer (or if the rating of any of the Notes of any Issuer has been
downgraded, an amount which will not prevent the restoration of
such rating); or
4
(c) if the Third Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Liquidity Facility Commitment shall be
reduced by the lesser of {pound-sterling}42,500,000 and an amount
which the Rating Agencies have confirmed will have no material
adverse effect on the then current ratings of any Notes of any
Issuer (or if the rating of any of the Notes of any Issuer has been
downgraded, an amount which will not prevent the restoration of
such rating); or
(d) if the Fourth Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Liquidity Facility Commitment shall be
reduced by [the lesser of {pound-sterling}[{circle}] and] an amount
which the Rating Agencies have confirmed will have no material
adverse effect on the then current ratings of any Notes of any
Issuer (or if the rating of any of the Notes of any Issuer has been
downgraded, an amount which will not prevent the restoration of
such rating); or
(e) if the Fifth Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Liquidity Facility Commitment shall be
reduced by an amount which the Rating Agencies have confirmed will
have no material adverse effect on the then current ratings of any
Notes of any Issuer (or if the rating of any of the Notes of any
Issuer has been downgraded, an amount which will not prevent the
restoration of such rating).
2.3 EXTENSION
(a) Save as otherwise provided in this Agreement, Funding 1 (or the Security
Trustee or the Cash Manager on its behalf) may deliver, not more than 60
days and not less than 30 days before the end of the Funding 1 Liquidity
Facility Commitment Period, to the Funding 1 Liquidity Facility Provider
an irrevocable request in writing that the Funding 1 Liquidity Facility
Commitment Period should be extended (an EXTENSION REQUEST) to a date
that is not more than (subject to CLAUSE 2.3(D) below) 364 days from the
last day of the then current Funding 1 Liquidity Facility Commitment
Period.
(b) The Funding 1 Liquidity Facility Provider shall promptly send the
Security Trustee a copy of any Extension Request received by it.
(c) If the Funding 1 Liquidity Facility Provider wishes to accept an
Extension Request then the Funding 1 Liquidity Facility Provider shall,
not more than 15 days after receipt of the Extension Request, deliver to
Funding 1 (with a copy to the Security Trustee) an irrevocable notice (a
NOTICE OF EXTENSION) that the Funding 1 Liquidity Facility Provider has
consented to the Extension Request. Failure to deliver such a Notice of
Extension within the 15-day time period referred to above shall be deemed
to constitute a refusal to grant an extension of the Funding 1 Liquidity
Facility Commitment Period.
(d) The Funding 1 Liquidity Facility Provider is not obliged to agree to
extend the Funding 1 Liquidity Facility Commitment Period and in no event
may it be extended beyond the REPAYMENT DATE, being the earlier to occur
of:
(i) the date when the First Issuer Intercompany Loan, the Second
Issuer Intercompany Loan, the Third Issuer Intercompany Loan, the
Fourth Issuer Intercompany Loan and the Fifth Issuer Intercompany
Loan have been repaid in full; and
(ii) the Funding 1 Interest Payment Date in June 2042 (unless the
parties hereto agree to extend the provision of the Funding 1
Liquidity Facility beyond such date).
5
2.4 CHANGE OF CURRENCY
(a) If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency of
that country, then:
(i) any reference in the Funding 1 Liquidity Documents to, and any
obligations arising under the Funding 1 Liquidity Documents in,
the currency of that country shall be translated into, or paid in,
the currency or currency unit of that country designated by the
Funding 1 Liquidity Facility Provider; and
(ii) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the
central bank for the conversion of that currency or currency unit
into the other, rounded up or down by the Funding 1 Liquidity
Facility Provider acting reasonably.
(b) If a change in any currency of a country occurs, this Agreement will be
amended to the extent the Funding 1 Liquidity Facility Provider specifies
to be necessary to reflect the change in currency and to put the Funding
1 Liquidity Facility Provider in the same position, so far as possible,
that it would have been in if no change in currency had occurred.
3. PURPOSE
(a) Funding 1 (or the Cash Manager on behalf of Funding 1) shall apply each
Funding 1 Liquidity Facility Drawing to meet a Funding 1 Liquidity
Shortfall existing at that time, to the extent that it relates to payment
obligations of Funding 1 arising in connection with the First Issuer
Intercompany Loan Agreement, the Second Issuer Intercompany Loan
Agreement, the Third Issuer Intercompany Loan Agreement, the Fourth
Issuer Intercompany Loan Agreement or the Fifth Issuer Intercompany Loan
Agreement. For the avoidance of doubt, the parties agree that the Funding
1 Liquidity Facility will be available notwithstanding that one or more
(but not all) of the First Issuer Intercompany Loan Agreement, the Second
Issuer Intercompany Loan Agreement, the Third Issuer Intercompany Loan
Agreement, the Fourth Issuer Intercompany Loan Agreement or the Fifth
Issuer Intercompany Loan Agreement may have been repaid in full or
cancelled, subject to any reduction of the Funding 1 Liquidity Facility
Commitment in accordance with CLAUSE 2.2 (Facility Limits).
(b) Funding 1 (or the Cash Manager on behalf of Funding 1) shall apply a
Funding 1 Liquidity Facility Stand-by Drawing for the purposes set out in
CLAUSE 5.2 (Stand-by Drawings).
(c) Without affecting the obligations of Funding 1 in any way, the Funding 1
Liquidity Facility Provider is not bound to monitor or verify the
application of any Funding 1 Liquidity Facility Drawing.
4. CONDITIONS PRECEDENT
4.1 DOCUMENTARY CONDITIONS PRECEDENT
The obligations of the Funding 1 Liquidity Facility Provider to Funding 1
under this Agreement are subject to the condition precedent that the
Funding 1 Liquidity Facility Provider has notified Funding 1 that it has
received all of the documents set out in Schedule 1 and that each is in
form and substance satisfactory to it.
6
4.2 FURTHER CONDITIONS PRECEDENT
(a) The obligation of the Funding 1 Liquidity Facility Provider to make a
Funding 1 Liquidity Facility Drawing available is subject to the further
conditions precedent that on both the date of the Funding 1 Liquidity
Facility Request and the Funding 1 Liquidity Facility Drawdown Date for
that Funding 1 Liquidity Facility Drawing:
(i) no Asset Trigger Event has occurred;
(ii) no Funding 1 Liquidity Facility Default is outstanding or would
result from the making of the Funding 1 Liquidity Facility
Drawing; and
(iii) no or insufficient amounts are available for drawing from the
Reserve Funds in order to pay the liabilities in respect of which
the relevant Funding 1 Liquidity Facility Drawing is to be
applied.
(b) The obligation of the Funding 1 Liquidity Facility Provider to make a
Funding 1 Liquidity Facility Drawing available for the purpose of a
Funding 1 Liquidity Revenue Shortfall is subject to the further
conditions precedent that, on the Funding 1 Liquidity Facility Drawdown
Date for that Funding 1 Liquidity Facility Drawing, Funding 1 (or the
Cash Manager on its behalf) provides confirmation to the Funding 1
Liquidity Facility Provider that:
(i) in respect of any Funding 1 Liquidity Facility Drawing to assist
the payment of interest on the relevant Term AAA Advances, the
debit balance on the relevant AAA Principal Deficiency Sub-Ledger
is not in an amount equal to or in excess of 50 per cent. of the
principal amount outstanding of the relevant Term AAA Advances;
(ii) in respect of any Funding 1 Liquidity Facility Drawing to assist
the payment of interest on the relevant Term AA Advances, the
debit balance on the relevant AA Principal Deficiency Sub-Ledger
is not in an amount equal to or in excess of 50 per cent. of the
principal amount outstanding of the relevant Term AA Advances;
(iii) in respect of any Funding 1 Liquidity Facility Drawing to assist
the payment of interest on the relevant Term A Advances, the debit
balance on the relevant A Principal Deficiency Sub-Ledger is not
in an amount equal to or in excess of 50 per cent. of the
principal amount outstanding of the relevant Term A Advances; and
(iv) in respect of any Funding 1 Liquidity Facility Drawing to assist
the payment of interest on the relevant Term BBB Advances, the
debit balance on the relevant BBB Principal Deficiency Sub-Ledger
is not in an amount equal to or in excess of 50 per cent. of the
principal amount outstanding of the relevant Term BBB Advances.
(c) The obligation of the Funding 1 Liquidity Facility Provider to make a
Funding 1 Liquidity Facility Drawing available for the purpose of a
Funding 1 Liquidity Principal Shortfall is subject to the further
conditions precedent that, on the Funding 1 Liquidity Facility Drawdown
Date for that Funding 1 Liquidity Facility Drawing, Funding 1 (or the
Cash Manager on its behalf) provides confirmation to the Funding 1
Liquidity Facility Provider that:
(i) if a Non-Asset Trigger Event has occurred, then a Funding 1
Liquidity Facility Drawing will be utilised only to make Eligible
Liquidity Facility Principal Repayments on the respective Final
Repayment Date of each relevant Term Advance
7
(in accordance with PARAGRAPH (B) of the definition of Eligible
Liquidity Facility Principal Repayments); and
(ii) if an Asset Trigger Event has occurred, then a Funding 1 Liquidity
Facility Drawing will not be utilised to make Eligible Liquidity
Facility Principal Repayments (in accordance with the last
paragraph of the definition of Eligible Liquidity Facility
Principal Repayments).
5. DRAWDOWN
5.1 FUNDING 1 LIQUIDITY FACILITY DRAWINGS
(a) If, on the Business Day immediately preceding a relevant Funding 1
Interest Payment Date, the Cash Manager determines that, on the relevant
Funding 1 Interest Payment Date, a Funding 1 Liquidity Shortfall will
arise, the Cash Manager will direct Funding 1 to make a Funding 1
Liquidity Facility Drawing on the Business Day immediately preceding that
Funding 1 Interest Payment Date, subject to the terms of this Agreement,
for all or any of the purposes set out in CLAUSE 3 (Purpose) (as
appropriate) and, subject to the limits set out in CLAUSE 2.2 (Facility
limits), in an amount equal to the Funding 1 Liquidity Shortfall.
(b) Funding 1 (or Cash Manager on behalf of Funding 1) will serve on the
Funding 1 Liquidity Facility Provider a Funding 1 Liquidity Facility
Request (substantially in the form set out in SCHEDULE 3 to this
Agreement) for each Funding 1 Liquidity Facility Drawing, such request to
be given by facsimile in accordance with CLAUSE 29 (Notices) of this
Agreement to be received by the Funding 1 Liquidity Facility Provider not
later than 10.00 a.m. on the Business Day immediately preceding the
proposed Funding 1 Liquidity Facility Drawdown Date.
(c) No Funding 1 Liquidity Drawing may be made, or requested to be made, on
or after the last day of the then current Funding 1 Liquidity Facility
Commitment Period.
5.2 FUNDING 1 LIQUIDITY FACILITY STAND-BY DRAWINGS
(a) The Funding 1 Liquidity Provider shall, upon becoming aware of a Relevant
Event, promptly notify Funding 1, the Security Trustee and the Cash
Manager in writing of that fact.
(b) If a Relevant Event occurs, Funding 1 (or the Security Trustee or the
Cash Manager on behalf of Funding 1) may, subject to the terms of this
Agreement, and after serving a Funding 1 Liquidity Facility Request on
the Funding 1 Liquidity Facility Provider, make a Funding 1 Liquidity
Facility Stand-by Drawing equal to the undrawn portion of the Funding 1
Liquidity Facility Commitment at that time provided that such Funding 1
Liquidity Facility Stand-by Drawing shall be used only in accordance with
PARAGRAPH (E) below. No Funding 1 Liquidity Facility Stand-by Drawing may
be made or requested to be made after the end of the Funding 1 Liquidity
Facility Commitment Period.
(c) Upon making a Funding 1 Liquidity Facility Stand-by Drawing, Funding 1
(or the Security Trustee or the Cash Manager on behalf of Funding 1)
shall forthwith pay the Funding 1 Liquidity Facility Stand-by Drawing
into the Funding 1 Liquidity Facility Stand-by Account, which shall be an
account with the Funding 1 Liquidity Facility Provider if the Relevant
Event leading to the making of the Funding 1 Liquidity Facility Stand-by
Drawing is of the type described in PARAGRAPH (B) of the definition of
Relevant Event, and, otherwise with the Account Bank.
8
(d) Subject to the terms of the Funding 1 Deed of Charge, interest earned on
the Funding 1 Liquidity Facility Stand-by Account, together with any
income derived from any Authorised Investments made in accordance with
PARAGRAPH (e)(iii) below using amounts standing to the credit of the
Funding 1 Liquidity Facility Stand- by Account from time to time, shall
belong to and be for the account of Funding 1 (and Funding 1 shall be
entitled to withdraw and retain such interest earned).
(e) Amounts from time to time standing to the credit of the Funding 1
Liquidity Facility Stand-by Account shall belong to Funding 1 and the
Funding 1 Liquidity Facility Provider shall not have any proprietary
interest or Security Interest in such amounts save as arises under the
Funding 1 Deed of Charge. Other than as referred to in PARAGRAPH (D)
above, Funding 1 (or the Security Trustee or the Cash Manager on behalf
of Funding 1) shall only make withdrawals from the Funding 1 Liquidity
Facility Stand-by Account:
(i) in such circumstances and in such amount as it would otherwise
have been able to make a Funding 1 Liquidity Drawing pursuant to
CLAUSE 5.1 (Funding 1 Liquidity Drawings), which withdrawal shall
be deemed to be a Funding 1 Liquidity Drawing made under CLAUSE
5.1; or
(ii) in order to make a repayment of a Funding 1 Liquidity Facility
Stand-by Drawing in accordance with CLAUSE 6 (Repayment); or
(iii) in order to invest funds standing to the credit of the Funding 1
Liquidity Facility Stand-by Account in Authorised Investments (the
nature and characteristics of which Authorised Investments Funding
1 will notify to the Funding 1 Liquidity Facility Provider at the
same time as making the payment described in CLAUSE 5.2(D)),
but not otherwise, and the amounts of the Funding 1 Liquidity Facility
Stand-by Drawing shall be reduced by the amount of such deemed Funding 1
Liquidity Drawings or, as the case may be, repayment.
5.3 PAYMENT OF PROCEEDS
Subject to the terms of this Agreement, the Funding 1 Liquidity Facility
Provider shall make each Funding 1 Liquidity Facility Loan available for
Funding 1 on the relevant Funding 1 Liquidity Facility Drawdown Date and
shall remit each Funding 1 Liquidity Facility Loan to Funding 1 by noon
on the relevant Funding 1 Liquidity Facility Drawdown Date or, if LIBOR
is determined otherwise than in accordance with PARAGRAPH (A) of its
definition, by 2.00 p.m. on the relevant Funding 1 Liquidity Facility
Drawdown Date.
6. REPAYMENT
(a) Subject as provided below and subject to CLAUSE 7.2 (Voluntary
Cancellation), CLAUSE 18 (Enforcement and Subordination) and CLAUSE 21.2
(Other indemnities) on the earlier of:
(i) the immediately succeeding Funding 1 Interest Payment Date; and
(ii) the Repayment Date,
Funding 1 shall repay the outstanding balance of the Funding 1 Liquidity
Drawing, if any, from Funding 1 Available Principal Receipts (but only to
the extent that the Funding 1 Liquidity Drawing has been made to meet
Funding 1 Liquidity Principal Shortfalls (if any)) and from Funding 1
Available Revenue Receipts (but only to the extent that the Funding 1
Liquidity Drawing has been made to meet Funding 1 Liquidity Revenue
Shortfalls (if any)) as
9
at the opening of business on such date. Other than on the Repayment Date
and subject to the terms of this Agreement, Funding 1 may draw a new
Funding 1 Liquidity Drawing or rollover an existing Funding 1 Liquidity
Drawing for the purposes of this PARAGRAPH (A). Funding 1 Liquidity
Drawings so repaid may be redrawn in accordance with and subject to the
terms of this Agreement.
(b) While a Funding 1 Liquidity Facility Stand-by Drawing is outstanding, any
amount that has been withdrawn from the Funding 1 Liquidity Facility
Stand-by Account shall be repaid by crediting such amount to the Funding
1 Liquidity Facility Stand-by Account as if it were a Funding 1 Liquidity
Drawing repayable in accordance with PARAGRAPH (A) above and the Funding
1 Liquidity Facility Stand-by Account shall be increased by the amount of
the Funding 1 Liquidity Drawing repaid. For the avoidance of doubt, any
repayment pursuant to this PARAGRAPH (B) shall not be applied to reduce
the amount of the Funding 1 Liquidity Facility Stand-by Drawing.
(c) The Funding 1 Liquidity Facility Stand-by Drawing shall, subject to
CLAUSE 18 (Enforcement and Subordination), be repayable to the Funding 1
Liquidity Facility Provider, together with accrued interest pursuant to
CLAUSE 8 (Interest), on the earlier of:
(i) (A) if the Relevant Event resulting in the making of the
Funding 1 Liquidity Facility Stand-by Drawing was of the
type described in PARAGRAPH (A) of the definition of
Relevant Event:
I. Funding 1 cancelling the Funding 1 Liquidity
Facility Commitment in full (in accordance with
CLAUSE 7.2(B) (Voluntary cancellation)) or the
Funding 1 Liquidity Facility Provider entering into
a Novation Certificate with a Qualifying Lender
having the Requisite Ratings; or
II. the day which is two London Business Days after the
date on which the Funding 1 Liquidity Facility
Provider has given notice to Funding 1 that it again
has the Requisite Ratings; or
(B) if the Relevant Event resulting in the making of the
Funding 1 Liquidity Facility Stand-by Drawing was of the
type described in PARAGRAPH (B) of the definition of
Relevant Event, Funding 1 entering into a replacement
liquidity facility on terms acceptable to the Security
Trustee and the Rating Agencies;
(ii) the Repayment Date; and
(iii) Funding 1 electing to repay the Funding 1 Liquidity Facility
Stand-by Drawing as a result of Funding 1 not having available to
it sufficient funds to pay interest and other amounts due and
payable in respect of the Funding 1 Liquidity Facility Stand-by
Drawing.
7. CANCELLATION
7.1 AUTOMATIC CANCELLATION OF THE FUNDING 1 LIQUIDITY FACILITY COMMITMENT
The Funding 1 Liquidity Facility Commitment shall be automatically
cancelled at close of business on the last day of the Funding 1 Liquidity
Facility Commitment Period.
7.2 VOLUNTARY CANCELLATION
(a) Funding 1 may with the prior written consent of the Security Trustee and
provided that:
10
(i) the Rating Agencies have confirmed that such cancellation will
have no material adverse effect on the then current ratings of any
of the Notes of any Issuer; or
(ii) if the ratings of any of the Notes of any Issuer has previously
been downgraded that such cancellation will not prevent the
restoration of such rating,
without premium or penalty, cancel the undrawn and uncancelled part of
the Funding 1 Liquidity Facility Commitment in whole or in part (but if
in part, in multiples of not less than {pound-sterling}50,000 unless the
Funding 1 Liquidity Facility Commitment is less than
{pound-sterling}50,000) at any time provided that it has given the
Funding 1 Liquidity Facility Provider not less than seven London Business
Days' prior notice (which notice Funding 1 shall copy to the Security
Trustee, the Cash Manager and to the Rating Agencies) stating the
principal amount to be cancelled. During such seven Business Day period
Funding 1 may not serve a Funding 1 Liquidity Facility Request purporting
to draw all or any part of the amount the subject of such notice of such
cancellation.
(b) If a Relevant Event of the type described in PARAGRAPH (A) or (B) of the
definition of such term occurs, Funding 1 may, without premium or
penalty, by notice to the Funding 1 Liquidity Facility Provider (which
notice Funding 1 shall copy to the Security Trustee and the Cash
Manager):
(i) cancel the undrawn and uncancelled part of the Funding 1 Liquidity
Facility, provided that Funding 1 shall first have made
arrangements for a replacement liquidity facility provider which
is a Qualifying Lender and has the Requisite Ratings to enter into
an agreement on substantially the same terms as this Agreement and
provided that the Funding 1 Liquidity Facility Provider has been
repaid all amounts outstanding to it under this Agreement in full;
or
(ii) require the Funding 1 Liquidity Facility Provider to enter into a
novation agreement (at the cost of Funding 1) in a form reasonably
satisfactory to the Funding 1 Liquidity Facility Provider, Funding
1 and the Security Trustee with, or otherwise transfer the Funding
1 Liquidity Facility Provider's rights and obligations under this
Agreement in such manner as is required by Funding 1 and the
Security Trustee to, a replacement liquidity facility provider
which is a Qualifying Lender and has the Requisite Ratings,
provided that the Funding 1 Liquidity Facility Provider has been
repaid all amounts outstanding to it under this Agreement in full
as a result of the novation.
(c) Without prejudice to Funding 1's rights under PARAGRAPH (B) above, if a
Relevant Event of the type described in PARAGRAPH (A) or (B) of the
definition of such term occurs, the Funding 1 Liquidity Facility Provider
may make arrangements either:
(i) to replace itself with a replacement liquidity facility provider
which is acceptable to Funding 1 which is a Qualifying Lender and
has the Requisite Ratings to enter into an agreement on
substantially the same terms as this Agreement; or
(ii) request Funding 1, the Security Trustee and the Cash Manager to
enter into a novation agreement in a form reasonably satisfactory
to Funding 1 and the Security Trustee with, or otherwise to
transfer the Funding 1 Liquidity Facility Provider's rights and
obligations under this Agreement in such manner as is required by
Funding 1 and the Security Trustee to, a replacement liquidity
facility provider which is a Qualifying Lender and has the
Requisite Ratings,
and in either case, Funding 1 shall take all reasonable steps to effect
such arrangement.
11
(d) To the extent that there is any conflict between Funding 1's rights under
PARAGRAPH (B) and the Funding 1 Liquidity Facility Provider's rights
under PARAGRAPH (C) above, the views of Funding 1 will prevail with the
result that if each of Funding 1 and the Funding 1 Liquidity Facility
Provider had selected a replacement liquidity facility provider, or
wished to adopt a different approach under PARAGRAPH (B) above or
PARAGRAPH (C) above, as appropriate, the selection and/or the approach to
be adopted will be that selected or adopted (as the case may be) by
Funding 1.
(e) Funding 1 may also, without premium or penalty, by notice to the Funding
1 Liquidity Facility Provider, cancel the whole of the Funding 1
Liquidity Facility Commitment on the Repayment Date.
7.3 ADDITIONAL RIGHT OF PREPAYMENT AND CANCELLATION
If:
(a) Funding 1 is required to pay to the Funding 1 Liquidity Facility
Provider any additional amounts under CLAUSE 10 (Taxes); or
(b) Funding 1 is required to pay to the Funding 1 Liquidity Facility
Provider any amount under CLAUSE 12 (Increased costs),
then, without prejudice to the obligations of Funding 1 under those
Clauses, Funding 1 may, whilst the circumstances continue, give a notice
of prepayment and cancellation to the Funding 1 Liquidity Facility
Provider with a copy to the Security Trustee. On the date falling five
London Business Days after the date of giving of the notice:
(i) Funding 1 shall prepay the Funding 1 Liquidity Facility
Loans; and
(ii) the Funding 1 Liquidity Facility Commitment shall be
cancelled.
7.4 MISCELLANEOUS PROVISIONS
(a) Any notice of prepayment and/or cancellation under this Agreement is
irrevocable.
(b) All prepayments under this Agreement shall be made together with accrued
interest on the amount prepaid and, subject to CLAUSE 21 (Indemnities),
without premium or penalty.
(c) No prepayment or cancellation is permitted except in accordance with the
express terms of this Agreement.
(d) No amount of the Funding 1 Liquidity Facility Commitment cancelled under
this Agreement may subsequently be reinstated except with the prior
written consent of the Funding 1 Liquidity Facility Provider, Funding 1
and the Security Trustee.
8. INTEREST
8.1 INTEREST RATE (FUNDING 1 LIQUIDITY FACILITY DRAWINGS)
The rate of interest on each Funding 1 Liquidity Facility Drawing for
each Funding 1 Liquidity Facility Interest Period is the rate per annum
determined by the Funding 1 Liquidity Facility Provider to be the
aggregate of the applicable:
(a) Funding 1 Liquidity Facility Margin;
12
(b) LIBOR; and
(c) subject to CLAUSE 18 (Enforcement and Subordination), Mandatory
Liquid Asset Cost.
8.2 INTEREST RATE (FUNDING 1 LIQUIDITY FACILITY STAND-BY DRAWINGS)
For so long as any amount is outstanding under the First Issuer
Intercompany Loan, and without prejudice to CLAUSE 17.1(A) (Commitment
Fee and Contingent Fee), the rate of interest on each Funding 1 Liquidity
Facility Stand-by Drawing shall be:
(a) in respect of a Funding 1 Liquidity Facility Stand-by Drawing up
to (and including) the first {pound-sterling}60,000,000, the
amount of interest payable will be determined in accordance with
CLAUSE 8.1 (Interest Rate (Funding 1 Liquidity Facility Drawing));
and
(b) in respect of a Funding 1 Liquidity Facility Stand-by Drawing
equal to and in excess of {pound-sterling}60,000,001, interest
will not be payable on the amount in excess of
{pound-sterling}60,000,000.
In the event that the First Issuer Intercompany Loan is repaid or
is otherwise cancelled, interest will not be payable in respect of
any part of a Funding 1 Liquidity Facility Stand-by Drawing.
8.3 DUE DATES
Except as otherwise provided in this Agreement (including, without
limitation, CLAUSE 6 (Repayment)), accrued interest on each Funding 1
Liquidity Facility Loan is payable by Funding 1 on each Funding 1
Interest Payment Date.
8.4 DEFAULT INTEREST
(a) If Funding 1 fails to pay any amount payable by it under this Agreement,
it shall forthwith on demand by the Funding 1 Liquidity Facility Provider
pay interest on the overdue amount from the due date up to the date of
actual payment, as well after as before judgment, at a rate (the DEFAULT
RATE) determined by the Funding 1 Liquidity Facility Provider to be one
per cent. per annum above the higher of:
(i) the rate on the overdue amount under CLAUSE 8.1 (Interest rate)
immediately before the due date (if of principal); and
(ii) the rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted a Funding 1
Liquidity Facility Drawing in the currency of the overdue amount
for such successive Funding 1 Liquidity Facility Interest Periods
of such duration as the Funding 1 Liquidity Facility Provider may
determine (each a DESIGNATED INTEREST PERIOD).
(b) The Default Rate will be determined on each Business Day or the first day
of the relevant Designated Interest Period, as appropriate.
(c) If LIBOR is to be determined in accordance with PARAGRAPH (B) of its
definition and the Funding 1 Liquidity Facility Provider determines that
deposits in the currency of the overdue amount are not at the relevant
time being made available by the Reference Banks to leading banks in the
London interbank market, the Default Rate will be determined by reference
to the cost of funds to the Funding 1 Liquidity Facility Provider from
whatever sources it reasonably selects.
13
(d) Default interest will be compounded at the end of each Designated
Interest Period.
(e) This CLAUSE 8.4 shall not apply to amounts deferred as a result of the
operation of CLAUSE 18 (Enforcement and Subordination).
8.5 NOTIFICATION OF RATES OF INTEREST
The Funding 1 Liquidity Facility Provider shall promptly notify each
relevant party of the determination of a rate of interest under this
Agreement.
9. PAYMENTS
9.1 PLACE
All payments by Funding 1 under this Agreement shall be made to the
Funding 1 Liquidity Facility Provider's account at JPMorgan Chase Bank,
Sort Code: 60-92-42, Account Reference: European Loans or to its account
at such office or bank as it may notify to Funding 1 for this purpose.
9.2 FUNDS
Payments under this Agreement to the Funding 1 Liquidity Facility
Provider shall be made for value on the due date at such times and in
such funds as the Funding 1 Liquidity Facility Provider may specify to
the party concerned as being customary at the time for the settlement of
transactions in Sterling.
9.3 CURRENCY
(a) Amounts payable in respect of costs, expenses, taxes and the like are
payable in the currency in which they are incurred.
(b) Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.4 SET-OFF AND COUNTERCLAIM
All payments made by the Funding 1 under this Agreement shall be made
without set-off or counterclaim.
9.5 NON-BUSINESS DAYS
(a) If a payment under this Agreement is due on a day which is not a London
Business Day, the due date for that payment shall instead be the next
London Business Day in the same calendar month (if there is one) or the
preceding London Business Day (if there is not).
(b) During any extension of the due date for payment of any principal under
this Agreement interest is payable on the principal at the rate payable
on the original due date.
10. TAXES
10.1 GROSS-UP
Subject to CLAUSE 18 (Enforcement and Subordination) and CLAUSE 10.3
(Qualifying Lender), all payments by Funding 1 under the Funding 1
Liquidity Documents shall be made free and clear of and without deduction
or withholding for or on account of any Taxes, except to the
14
extent that Funding 1 is required by law to make payment subject to any
such deduction or withholding for or on account of any Taxes. If any Tax
or amount in respect of Tax is required by law to be deducted or withheld
from any amounts payable or paid by Funding 1 under the Funding 1
Liquidity Documents, subject to CLAUSE 18 (Enforcement and Subordination)
the payment due from Funding 1 shall be increased to include such
additional amounts as may be necessary to ensure that (after any
deduction or withholding required including in respect of such additional
amounts) the Funding 1 Liquidity Facility Provider receives a net amount
equal to the full amount which would have been due had no deduction or
withholding for or on account of any Taxes been required.
10.2 TAX RECEIPTS
Subject to CLAUSE 18 (Enforcement and Subordination), all Taxes required
by law to be deducted or withheld by Funding 1 from any amounts paid or
payable under the Funding 1 Liquidity Documents shall be paid by Funding
1 no later than when due and Funding 1 shall, within 30 days of making
either the deduction or withholding for or on account of any Tax or the
payment in respect of such deduction or withholding, deliver to the
Funding 1 Liquidity Facility Provider evidence satisfactory to the
Funding 1 Liquidity Facility Provider (acting reasonably) (including all
relevant Tax receipts) that the payment has been duly remitted to the
appropriate authority.
10.3 QUALIFYING LENDER
Funding 1 shall not be required to pay an additional amount as referred
to in CLAUSE 10.1 (Gross-up) above in respect of any deduction or
withholding for or on account of any Taxes levied or imposed by the
United Kingdom (or any taxing authority of or in the United Kingdom) from
a payment of interest, if on the date on which the payment falls due:
(a) the payment could have been made to the Funding 1 Liquidity
Facility Provider in the absence of a deduction or withholding for
or on account of any Taxes if the Funding 1 Liquidity Facility
Provider were a Qualifying Lender, but on that date the Funding 1
Liquidity Facility Provider is not or has ceased to be a
Qualifying Lender other than as a result of any change occurring
after the date of this Agreement in (or in the interpretation,
administration or application of) any law or regulation or
applicable Double Taxation Treaty or any published practice or
concession of any relevant Tax authority;
(b) (i) the Funding 1 Liquidity Facility Provider is a Qualifying
Lender solely because it is a UK Non-Bank Lender;
(ii) the Board of the United Kingdom Inland Revenue has given
(and not revoked) a direction (a DIRECTION) under Section
349C ICTA (as that provision has effect on the date of this
Agreement) which relates to such payment and Funding 1 has
notified the Funding 1 Liquidity Facility Provider of the
precise terms of that notice; and
(iii) the payment could have been made to the Funding 1 Liquidity
Facility Provider without any deduction or withholding for
or on account of Tax in the absence of that Direction;
(c) the Funding 1 Liquidity Facility Provider is a Treaty Lender and
Funding 1 is able to demonstrate that the additional amounts
referred to in CLAUSE 10.1 (Gross-up) above would not have been
required if the Funding 1 Liquidity Facility Provider had complied
with its obligations under CLAUSE 10.6 (Treaty Lender) below.
15
10.4 REFUND OF TAX CREDITS
If Funding 1 makes a payment under CLAUSE 10.1 (Gross-up) (a TAX PAYMENT)
in respect of a payment to the Funding 1 Liquidity Facility Provider
under this Agreement and the Funding 1 Liquidity Facility Provider
determines that it has obtained a refund of Tax or obtained and used a
credit against Tax on its overall net income (a TAX CREDIT) which the
Funding 1 Liquidity Facility Provider determines to be attributable to
that Tax Payment, then the Funding 1 Liquidity Facility Provider shall
reimburse Funding 1 such amount as the Funding 1 Liquidity Facility
Provider determines to be such proportion of that Tax Credit as will
leave the Funding 1 Liquidity Facility Provider (after that
reimbursement) in no better or worse position than it would have been in
if no Tax Payment had been required. The Funding 1 Liquidity Facility
Provider shall not be obliged to disclose to any party to this Agreement
or otherwise any information regarding its Tax affairs and computations.
10.5 STATUS OF QUALIFYING LENDER
If the Funding 1 Liquidity Facility Provider or replacement liquidity
facility provider (as applicable) ceases, for whatever reason, to be a
Qualifying Lender, it shall promptly notify Funding 1 in writing of that
change in its status.
10.6 TREATY LENDER
A Treaty Lender and Funding 1 shall co-operate in completing any
procedural formalities necessary for Funding 1 to obtain authorisation to
make payments under the Funding 1 Liquidity Documents free and clear of
and without deduction or withholding for or on account of any Taxes
levied or imposed by the United Kingdom or any taxing authority of or in
the United Kingdom.
10.7 TAX INDEMNITY
(a) Funding 1 shall (within three Business Days of demand by the Funding 1
Liquidity Facility Provider (the PROTECTED PARTY)) pay to a Protected
Party an amount equal to the loss, liability or cost which that Protected
Party determines will be or has been (directly or indirectly) suffered
for on and account of Tax by that Protected Party in respect of the
Funding 1 Liquidity Documents.
(b) PARAGRAPH (A) above shall not apply:
(i) with respect to any Tax assessed on a Protected Party:
(A) under the law of the jurisdiction in which that Protected
Party is incorporated or, if different, the jurisdiction in
which that Protected Party is treated as resident for tax
purposes; or
(B) under the law of the jurisdiction in which that Protected
Party's Facility Office is located in respect of amounts
received or receivable in that jurisdiction,
if that Tax is imposed or calculated by reference to the net
income received or receivable (but not any sum deemed to be
received or receivable) by that Protected Party;
(ii) to the extent a loss, liability or cost:
16
(A) is compensated for by an increased payment under CLAUSE
10.1 (Gross-up); or
(B) would have been compensated for by an increased payment
under CLAUSE 10.1 (Gross-up) but was not so compensated
solely because one of the exclusions in CLAUSE 10.3
(Qualifying Lender) applied.
11. MARKET DISRUPTION
(a) If LIBOR is to be determined in accordance with PARAGRAPH (B) of its
definition and a Reference Bank does not supply an offered rate by 1.00
p.m. on a Funding 1 Liquidity Facility Drawdown Date, the applicable
LIBOR shall, subject to PARAGRAPH (B) below, be determined on the basis
of the quotations of the remaining Reference Bank(s).
(b) If, in relation to any Funding 1 Liquidity Facility Drawing or proposed
Funding 1 Liquidity Facility Drawing:
(i) LIBOR is to be determined in accordance with PARAGRAPH (B) of its
definition and no, or only one, Reference Bank supplies a rate for
the purposes of determining the applicable LIBOR or the Funding 1
Liquidity Facility Provider otherwise determines that adequate and
fair means do not exist for ascertaining the applicable LIBOR; or
(ii) in the Funding 1 Liquidity Facility Provider's opinion:
(A) matching deposits may not be available to it in the London
interbank market in the ordinary course of business to fund
that Funding 1 Liquidity Facility Loan for the relevant
Funding 1 Liquidity Facility Interest Period; or
(B) the cost to it of matching deposits in the London interbank
market would be in excess of the relevant LIBOR,
the Funding 1 Liquidity Facility Provider shall promptly notify Funding 1
of the fact and that this CLAUSE 11 is in operation.
(c) After any notification under PARAGRAPH (B) above, the Funding 1 Liquidity
Facility Loan shall bear interest at the rate per annum equal to the sum
of the applicable Funding 1 Liquidity Facility Margin, Mandatory Liquid
Asset Cost and the cost to the Funding 1 Liquidity Facility Provider
(expressed as a rate per annum) of funding the Funding 1 Liquidity
Facility Loan by whatever means it reasonably determines to be
appropriate.
12. INCREASED COSTS
12.1 INCREASED COSTS
(a) Subject to CLAUSE 12.2 (Exceptions) and CLAUSE 18 (Enforcement and
Subordination), Funding 1 shall forthwith on demand by the Funding 1
Liquidity Facility Provider pay the Funding 1 Liquidity Facility Provider
the amount of any increased cost incurred by it as a result of:
(i) the introduction of, or any change in, or any change in the
interpretation by any court or official authority or application
of, any law or regulation or in the case of Tax, the introduction
of or any change in or any change in the interpretation,
administration or application of any law or regulation or
published practice or concession of any relevant tax authority (in
each case occurring after the date of this Agreement);
17
(ii) compliance with any regulation made or modified after the date of
this Agreement,
including any law or regulation relating to change in currency of a
country or reserve asset, special deposit, cash ratio, liquidity or
capital adequacy requirements or any other form of banking or monetary
control or in the case of taxation, any law, regulation, published
practice or concession relating to Tax.
(b) In this Agreement INCREASED COST means:
(i) an additional cost incurred by the Funding 1 Liquidity Facility
Provider or its holding company as a result of it having entered
into, or performing, maintaining or funding its obligations under,
the Funding 1 Liquidity Documents; or
(ii) that portion of an additional cost incurred by the Funding 1
Liquidity Facility Provider or its holding company in making,
funding or maintaining all or any advances comprised in a class of
advances formed by or including the Funding 1 Liquidity Facility
Loans made or to be made under the Funding 1 Liquidity Documents
as is attributable to it making, funding or maintaining those
participations; or
(iii) a reduction in any amount payable to the Funding 1 Liquidity
Facility Provider or its holding company or the effective return
to a Funding 1 Liquidity Facility Provider under this Agreement or
(to the extent that it is attributable to this Agreement) on its
capital, including any reduction in the effective return from the
Funding 1 Liquidity Facility Margin or the commitment fee payable
under CLAUSE 17 (Fees) of this Agreement; or
(iv) the amount of any payment made by the Funding 1 Liquidity Facility
Provider or its holding company, or the amount of interest or
other return foregone by the Funding 1 Liquidity Facility
Provider, calculated by reference to any amount received or
receivable by the Funding 1 Liquidity Facility Provider from any
other Party under this Agreement.
12.2 EXCEPTIONS
CLAUSE 12.1 does not apply to any increased cost:
(a) to the extent compensated for by the payment of the Mandatory
Liquid Asset Cost;
(b) to the extent compensated for by the operation of CLAUSE 10.7 (Tax
Indemnity); or
(c) to the extent that any such increased cost is attributable to any
deduction or withholding for or on account of any Tax required to
be made by Funding 1.
13. ILLEGALITY
If it is or becomes unlawful in any jurisdiction for the Funding 1
Liquidity Facility Provider to give effect to any of its obligations as
contemplated by this Agreement or to fund or maintain any Funding 1
Liquidity Facility Loan, then:
(a) the Funding 1 Liquidity Facility Provider may notify Funding 1
accordingly; and
(b) (i) subject to CLAUSE 18 (Enforcement and Subordination),
Funding 1 shall forthwith prepay the Funding 1 Liquidity
Facility Loans together with all
18
interest and all other amounts payable by it to the Funding
1 Liquidity Facility Provider under this Agreement; and
(ii) the Funding 1 Liquidity Facility Commitment shall be
cancelled.
14. REPRESENTATIONS AND WARRANTIES
14.1 REPRESENTATIONS AND WARRANTIES BY FUNDING 1
Funding 1 makes the representations and warranties set out in this CLAUSE
14.1 to the Funding 1 Liquidity Facility Provider and the Security
Trustee:
(a) STATUS
(i) It is a limited liability company, duly incorporated and
validly existing under the laws of England and Wales; and
(ii) it has the power to own its assets and carry on its
business as it is being conducted.
(b) POWERS AND AUTHORITY
It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and
delivery of, the Funding 1 Liquidity Documents to which it is or
will be a party and the transactions contemplated by those Funding
1 Liquidity Documents.
(c) LEGAL VALIDITY
Each Funding 1 Liquidity Document to which it is or will be a
party constitutes, or when executed in accordance with its terms
will constitute, its legal, valid and binding obligation
enforceable in accordance with its terms.
(d) NON-CONFLICT
The entry into and performance by it of, and the transactions
contemplated by, the Funding 1 Liquidity Documents do not and will
not:
(i) result in the existence or imposition of nor oblige it to
create any Security Interest in favour of any person (other
than the Funding 1 Secured Creditors) over all or any of
its present or future revenues or assets;
(ii) conflict with any law or regulation or judicial or official
order;
(iii) conflict with its constitutional documents; or
(iv) conflict with any document which is binding upon it or any
of its assets.
(e) NO DEFAULT
No Liquidity Facility Default is outstanding or might result from
the making of any Funding 1 Liquidity Facility Loan.
(f) AUTHORISATIONS
19
All authorisations required or desirable in connection with the
entry into, performance, validity and enforceability of, and the
transactions contemplated by, the Funding 1 Liquidity Documents
have been obtained or effected (as appropriate) and are in full
force and effect.
(g) LITIGATION
No litigation, arbitration or administrative proceedings involving
Funding 1 are current or, to its knowledge, pending or threatened,
which might, if adversely determined, have a material adverse
effect on the business or financial condition of Funding 1 or the
ability of Funding 1 to perform its obligations under this
Agreement.
(h) SECURITY INTERESTS
None of the assets of Funding 1 is affected by any Security
Interest, and Funding 1 is not a party to, nor is it or any of its
assets bound by, any order, agreement or instrument under which
Funding 1 is, or in certain events may be, required to create,
assume or permit to arise any Security Interest, other than the
Security Interests created by the Funding 1 Deed of Charge.
(i) NO OTHER BUSINESS
(i) It has not traded or carried on any business since its date
of incorporation or engaged in any activity whatsoever that
is not incidental to or necessary in connection with any of
the activities in which the Transaction Documents provide
or envisage that it will engage; and
(ii) it is not party to any material agreements other than the
Transaction Documents.
(j) OWNERSHIP
(i) Its entire issued share capital is legally and beneficially
owned and controlled by Holdings; and
(ii) its shares are fully paid.
(k) GOOD TITLE AS TO ASSETS
Funding 1 is and will remain the absolute beneficial owner of the
Funding 1 Share and absolute legal and beneficial owner of all
other assets charged or assigned by the Funding 1 Deed of Charge
to which it is a party.
(l) TAX
(i) It is tax resident and legally domiciled in its
jurisdiction of incorporation; and
(ii) it has no branch, business establishment or other fixed
establishment outside the United Kingdom.
(m) FUNDING 1 DEED OF CHARGE
The Funding 1 Deed of Charge creates, or will create when the
Funding 1 Liquidity Facility Stand-by Account is opened and the
Funding 1 Liquidity Facility Stand-By Deposit is credited to such
account, a first priority Security Interest of the type
20
described in the Funding 1 Deed of Charge over the Funding 1
Liquidity Facility Stand-by Deposit in favour of the Security
Trustee.
For the avoidance of doubt, a breach by Funding 1 of any representation
or warranty contained in this CLAUSE 14.1 or otherwise in this Agreement
shall not entitle the Funding 1 Liquidity Facility Provider to terminate
this Agreement or declare the Funding 1 Liquidity Drawing or the Funding
1 Liquidity Facility Stand-by Drawing or any other amounts payable under
this Agreement due and payable or to prevent any utilisation of the
Funding 1 Liquidity Facility or the Standby-by Facility or any Funding 1
Liquidity Facility Loan being made.
14.2 REPRESENTATIONS AND WARRANTIES BY THE FUNDING 1 LIQUIDITY FACILITY
PROVIDER
The Funding 1 Liquidity Facility Provider makes the representations and
warranties set out in this CLAUSE 14.2 to Funding 1 and the Security
Trustee.
(a) STATUS
It is duly incorporated with limited liability under the laws of
the jurisdiction of its incorporation and is an authorised
institution under the FSMA 2000.
(b) TAX STATUS
It is a Qualifying Lender.
(c) POWERS AND AUTHORISATIONS
The documents which contain or establish its constitution include
provisions which give power, and all necessary corporate authority
has been obtained and action taken, for it to sign and deliver,
and perform the transactions contemplated in this Agreement and
the agreements entered into in connection herewith and this
Agreement and the agreements entered into in connection herewith
constitute its valid, legal and binding obligations.
(d) RATING
It has the Requisite Ratings (and will promptly notify both
Funding 1 and the Security Trustee of the occurrence of any
downgrading by the Rating Agencies of any of its rated debt
obligations to a level below the Requisite Ratings).
(e) NON-VIOLATION
Neither the signing and delivery of this Agreement nor the
performance of any of the transactions contemplated in it does or
will contravene or constitute a default under, or cause to be
exceeded any limit on the Funding 1 Liquidity Facility Provider or
the powers of its directors imposed by or contained in (i) any law
by which it or any of its assets is bound or affected, or (ii) any
agreement to which it is a party or by which any of its assets is
bound.
14.3 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
The representations and warranties set out in this CLAUSE 14
(Representations and warranties):
(a) are made on the date of this Agreement; and
21
(b) save in respect of the representation and warranty of the Funding
1 Liquidity Facility Provider given under CLAUSE 14.2(B) (Tax
Status), are deemed to be repeated by the relevant Party on the
date of each Funding 1 Liquidity Facility Request, each Funding 1
Liquidity Facility Drawdown Date and each Funding 1 Interest
Payment Date with reference to the facts and circumstances then
existing.
15. UNDERTAKINGS
15.1 DURATION
The undertakings in this CLAUSE 15 remain in force from the date of this
Agreement for so long as any amount is or may be outstanding under this
Agreement or any Funding 1 Liquidity Facility Commitment is in force.
15.2 FINANCIAL INFORMATION
Funding 1 shall supply to the Funding 1 Liquidity Facility Provider and
the Security Trustee:
(a) as soon as the same are available (and in any case before the
latest date for publication in accordance with the Companies ▇▇▇
▇▇▇▇, as amended), its audited accounts for that financial year
which shall be in such form as will comply with relevant legal and
accounting requirements for the time being; and
(b) promptly such other information as the Security Trustee may
reasonably request.
15.3 INFORMATION - MISCELLANEOUS
Funding 1 shall supply to the Funding 1 Liquidity Facility Provider
promptly, such further information in its possession or control regarding
its financial condition and operations as it supplies to the Security
Trustee, if the Funding 1 Liquidity Facility Provider so requests.
15.4 NOTIFICATION OF DEFAULT
Funding 1 shall notify the Funding 1 Liquidity Facility Provider of any
Funding 1 Liquidity Facility Default (and the steps, if any, being taken
to remedy it) promptly upon its occurrence.
15.5 AUTHORISATIONS
Funding 1 shall promptly:
(a) obtain, maintain and comply with the terms of; and
(b) supply certified copies to the Funding 1 Liquidity Facility
Provider of,
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity or enforceability of,
any Funding ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
▇▇.▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ACTIVITIES
Funding 1 will not engage in any activities in the United States
(directly or through agents), will not derive any income from United
States sources as determined under United States income tax principles,
and will not hold any property if doing so would cause it to be engaged
or deemed to be engaged in a trade or business within the United States
as determined under United States income tax principles.
22
16. DEFAULT
16.1 FUNDING 1 LIQUIDITY FACILITY DEFAULT
Each of the events set out in CLAUSES 16.2 (Non-Payment) to 16.4
(Unlawfulness) (inclusive) is a Funding 1 Liquidity Facility Default
(whether or not caused by any reason whatsoever outside the control of
Funding 1 or any other person).
16.2 NON-PAYMENT
(a) Subject to PARAGRAPH (B) below, Funding 1 does not pay within 3
London Business Days of the due date any amount payable by it
under the Funding 1 Liquidity Documents at the place at and in the
currency in which it is expressed to be payable.
(b) The Funding 1 Liquidity Facility Provider agrees that the non-
payment of any Funding 1 Liquidity Subordinated Amounts shall only
constitute a Funding 1 Liquidity Facility Default under PARAGRAPH
(A) above in circumstances where Funding 1 has the requisite funds
to pay such amounts in accordance with the Funding 1 Deed of
Charge on the relevant due date and any such Funding 1 Liquidity
Subordinated Amounts are not then paid.
16.3 INTERCOMPANY LOAN ACCELERATION NOTICE
An Intercompany Loan Acceleration Notice is served or the Security
Trustee having become bound to serve an Intercompany Loan Acceleration
Notice fails to do so within 30 days of becoming so bound.
16.4 UNLAWFULNESS
It is or becomes unlawful for Funding 1 to perform any of its obligations
under the Funding 1 Liquidity Documents.
16.5 ACCELERATION
On and at any time after the occurrence of a Funding 1 Liquidity Facility
Default and subject to CLAUSE 18 (Enforcement and Subordination) and if
such Funding 1 Liquidity Facility Default is continuing the Funding 1
Liquidity Facility Provider may by notice to Funding 1:
(a) cancel the Funding 1 Liquidity Facility Commitment; and/or
(b) demand that all or part of the Funding 1 Liquidity Facility Loans,
together with accrued interest, and all other amounts accrued
under this Agreement be immediately due and payable, whereupon
they shall become immediately due and payable; and/or
(c) demand that all or part of the Funding 1 Liquidity Facility Loans
be payable on demand, whereupon they shall immediately become
payable on demand.
17. FEES
17.1 COMMITMENT FEE AND CONTINGENT FEE
(a) Funding 1 shall (subject to CLAUSE 17.1(B) and (C) below and to CLAUSE 18
(Enforcement and Subordination)) pay to the Funding 1 Liquidity Facility
Provider a commitment fee computed at the rate of 0.08 per cent. per
annum on the undrawn, uncancelled amount of the Funding 1 Liquidity
Facility Commitment during the period from the date of this Agreement up
to and including the last day of the Funding 1 Liquidity Facility
Commitment Period.
23
(b) In the event that a Funding 1 Liquidity Facility Stand-by Drawing is
made, and for so long as any amount is outstanding under the First Issuer
Intercompany Loan:
(i) in respect of a Funding 1 Liquidity Facility Stand-by Drawing up
to (and including) the first {pound-sterling}60,000,000, the
Commitment Fee referred to in CLAUSE 17.1(A) (Commitment Fee and
Contingent Fee) will not be payable and in its place Funding 1
will (subject to CLAUSE 18 (Enforcement and Subordination)) pay to
the Funding 1 Liquidity Facility Provider interest as determined
in accordance with Clause 8.1 (Interest Rate (Funding 1 Liquidity
Facility Drawing)) and Clause 8.2(b) (Interest Rate (Funding 1
Liquidity Facility Stand-by Drawing)); and
(ii) in respect of a Funding 1 Liquidity Facility Stand-by Drawing
equal to and in excess of {pound-sterling}60,000,001, the
Commitment Fee referred to in CLAUSE 17.1(A) (Commitment Fee and
Contingent Fee) will not be payable and in its place Funding 1
will (subject to CLAUSE 18 (Enforcement and Subordination) pay to
the Funding 1 Liquidity Facility Provider a contingent fee
computed at the rate of 0.38 per cent. per annum on the amount of
the Funding 1 Liquidity Facility Stand-by Drawing in excess of
{pound-sterling}60,000,000, together with, for the avoidance of
doubt, any amount payable pursuant to Clause 17.1(b) (Commitment
Fee and Contingent Fee) with respect to a Funding 1 Liquidity
Facility Stand-by Drawing up to (and including) the first
{pound-sterling}60,000,000, plus an amount equal to any interest
received by Funding 1 on the Funding 1 Liquidity Facility Stand-by
Account insofar as it relates to the amount in excess of
{pound-sterling}60,000,000.
(c) In the event that the First Issuer Intercompany Loan is repaid or is
otherwise cancelled and a Funding 1 Liquidity Stand-by Drawing is made,
the Commitment Fee referred to in CLAUSE 17.1(A) (Commitment Fee and
Contingent Fee) will not be payable and in its place Funding 1 will
(subject to CLAUSE 18 (Enforcement and Subordination) pay to the Funding
1 Liquidity Facility Provider a contingent fee computed at the rate of
0.38 per cent. per annum on the amount of the Funding 1 Liquidity
Stand-by Drawing, plus an amount equal to any interest received by
Funding 1 on the Funding 1 Liquidity Facility Stand-by Account.
(d) Subject to CLAUSE 18 (Enforcement and Subordination), the accrued
commitment fee and contingent fee is payable quarterly in arrear on each
Funding 1 Interest Payment Date. The accrued commitment fee and
contingent fee is also payable to the Funding 1 Liquidity Facility
Provider on the cancelled amount of the Funding 1 Liquidity Facility
Commitment at the time the cancellation takes effect.
17.2 VAT
(a) All payments to be made by Funding 1 under the Funding 1 Liquidity
Documents are exclusive of VAT chargeable thereon and Funding 1 shall pay
to the Funding 1 Liquidity Facility Provider a sum in respect of any VAT
chargeable in respect of any supply made by the Funding 1 Liquidity
Facility Provider for the purposes of VAT in connection with the Funding
1 Liquidity Documents.
(b) If VAT is chargeable on any supply made by the Funding 1 Liquidity
Facility Provider to any other person in connection with a Funding 1
Liquidity Document and Funding 1 is required by the terms of any Funding
1 Liquidity Document to pay an amount equal to the consideration for such
supply to the Funding 1 Liquidity Facility Provider, Funding 1 shall also
pay to the Funding 1 Liquidity Facility Provider (in addition to and at
the same time as paying such amount) an amount equal to the amount of
such VAT.
24
(c) Where under the Funding 1 Liquidity Documents, Funding 1 is required to
reimburse or indemnify the Funding 1 Liquidity Facility Provider against
any costs, expenses (including legal fees), loss or liability or
otherwise, such obligation to reimburse or indemnify shall extend to any
VAT charged to the Funding 1 Liquidity Facility Provider on such costs,
expenses (including legal fees) or in respect of such loss, liability or
otherwise which is irrecoverable by the Funding 1 Liquidity Facility
Provider.
18. ENFORCEMENT AND SUBORDINATION
(a) The Funding 1 Liquidity Facility Provider acknowledges to the Security
Trustee that it is bound by the terms of the Funding 1 Deed of Charge
and, in particular, confirms that no sum, whether in respect of principal
or interest or otherwise relating to any Funding 1 Liquidity Facility
Loan, shall be paid by Funding 1 except in accordance with the provisions
of the Funding 1 Cash Management Agreement and the Funding 1 Deed of
Charge unless and until all sums required by the Funding 1 Cash
Management Agreement or the Funding 1 Deed of Charge, as the case may be,
to be paid or provided for in priority thereto have been paid or
discharged in full.
(b) The Funding 1 Liquidity Facility Provider further agrees that only the
Security Trustee may enforce the security created in favour of, inter
alia, the Funding 1 Liquidity Facility Provider and the Security Trustee
by the Funding 1 Deed of Charge and that the Funding 1 Liquidity Facility
Provider shall not take any steps for the purpose of:
(i) recovering any debts whatsoever owing to it by Funding 1 save as
provided for in accordance with the terms of the Funding 1 Deed of
Charge (including, without limitation, by exercising any right of
set-off); or
(ii) enforcing any rights arising out of this Agreement against Funding
1; or
(iii) procuring the winding-up, administration or liquidation of Funding
1 in respect of any of its liabilities whatsoever,
unless the Security Trustee, having become bound to serve an Intercompany
Loan Acceleration Notice, fails to do so within 30 days of becoming so
bound and that failure is continuing (in which case the Funding 1
Liquidity Facility Provider shall be entitled to take any such steps and
proceedings as it shall deem necessary other than (i) any legal
proceedings for the winding-up of, or for an administration order or (ii)
filing documents with the court for the appointment of an administrator
or (iii) serving a notice of intention to appoint an administrator, in
respect of Funding 1) provided that the Funding 1 Liquidity Facility
Provider shall not be entitled to take any steps or proceedings pursuant
to this Agreement which would contravene CLAUSES 5 to 9 of the Funding 1
Deed of Charge.
(c) Subject to PARAGRAPH (B) above, the Funding 1 Liquidity Facility Provider
agrees to defer taking any action or proceedings against Funding 1 to
recover any amounts payable by Funding 1 to the Funding 1 Liquidity
Facility Provider under this Agreement except to the extent expressly
permitted by the provisions of the Funding 1 Deed of Charge unless and
until (then only to the extent that) Funding 1 has assets sufficient to
meet such claim in full having taken into account all other liabilities
(actual, contingent or prospective) of Funding 1 which under the Funding
1 Deed of Charge rank pari passu with or in priority to its liabilities
to the Funding 1 Liquidity Facility Provider under this Agreement,
provided however that nothing in this PARAGRAPH (C) shall prevent the
Funding 1 Liquidity Facility Provider from proving for the full amount
owed to it by Funding 1 under this Agreement in the liquidation of
Funding 1.
25
(d) Without prejudice to the other provisions of this CLAUSE 18, the Funding
1 Liquidity Facility Provider covenants with the Security Trustee that
if, whether in the liquidation of Funding 1 or otherwise (and
notwithstanding the provisions of this CLAUSE 18), any payment (whether
of principal, interest or otherwise) is received by it in respect of a
Funding 1 Liquidity Facility Loan other than in accordance with CLAUSES 4
and 6 of the Funding 1 Cash Management Agreement and CLAUSES 7 and 8 of
the Funding 1 Deed of Charge, the amount so paid shall be received and
held by the Funding 1 Liquidity Facility Provider upon trust for the
Security Trustee and shall be paid over to the Security Trustee forthwith
upon receipt provided however that this PARAGRAPH (D) shall have effect
only to the extent that it does not constitute or create and is not
deemed to constitute or create any mortgage, charge or other Security
Interest of any kind.
19. EXPENSES
19.1 INITIAL AND SPECIAL COSTS
Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
forthwith on demand pay the Funding 1 Liquidity Facility Provider the
amount of all costs and expenses (including reasonable legal fees)
incurred by it in connection with:
(a) the negotiation, preparation, printing and execution of:
(i) this Agreement and any other documents referred to in this
Agreement;
(ii) any other Funding 1 Liquidity Document (other than a
Novation Certificate) executed after the date of this
Agreement;
(b) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf of
Funding 1 or, in the case of CLAUSE 2.4 (Change of currency), the
Funding 1 Liquidity Facility Provider and relating to a Funding 1
Liquidity Document or a document referred to in any Funding 1
Liquidity Document; and
(c) any other matter, not of an ordinary administrative nature,
arising out of or in connection with a Funding 1 Liquidity
Document.
19.2 ENFORCEMENT COSTS
Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
forthwith on demand pay to the Funding 1 Liquidity Facility Provider the
amount of all costs and expenses (including legal fees) incurred by it:
(a) in connection with the enforcement of, or the preservation of any
rights under, any Funding 1 Liquidity Document; or
(b) in investigating any possible Funding 1 Liquidity Facility
Default.
20. STAMP DUTIES
Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall pay
and forthwith on demand indemnify the Funding 1 Liquidity Facility
Provider against any liability it incurs in respect of any United Kingdom
stamp, registration and similar tax which is or becomes payable in
connection with the entry into, performance or enforcement of any Funding
1 Liquidity Document.
26
21. INDEMNITIES
21.1 CURRENCY INDEMNITY
(a) Subject to CLAUSE 18 (Enforcement and Subordination), if the Funding 1
Liquidity Facility Provider receives an amount in respect of Funding 1's
liability under the Funding 1 Liquidity Documents or if that liability is
converted into a claim, proof, judgment or order in a currency other than
the currency (the CONTRACTUAL CURRENCY) in which the amount is expressed
to be payable under the relevant Funding 1 Liquidity Document:
(i) Funding 1 shall indemnify the Funding 1 Liquidity Facility
Provider as an independent obligation against any loss or
liability arising out of or as a result of the conversion;
(ii) if the amount received by the Funding 1 Liquidity Facility
Provider, when converted into the contractual currency at a market
rate in the usual course of its business, is less than the amount
owed in the contractual currency, Funding 1 shall forthwith on
demand pay to the Funding 1 Liquidity Facility Provider an amount
in the contractual currency equal to the deficit; and
(iii) Funding 1 shall forthwith on demand pay to the Funding 1 Liquidity
Facility Provider on demand any exchange costs and taxes payable
in connection with any such conversion.
(b) Funding 1 waives any right it may have in any jurisdiction to pay any
amount under the Funding 1 Liquidity Documents in a currency other than
that in which it is expressed to be payable.
21.2 OTHER INDEMNITIES
Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
forthwith on demand indemnify the Funding 1 Liquidity Facility Provider
against any loss or liability which that Funding 1 Liquidity Facility
Provider incurs as a consequence of:
(a) the operation of CLAUSE 16.6 (Acceleration) or if the loss or
liability is caused by Funding 1 making a payment other than in
accordance with CLAUSE 9 (Payments);
(b) any payment of principal or an overdue amount being received from
any source otherwise than on its Funding 1 Interest Payment Date
and, for the purposes of this PARAGRAPH (B), the Funding 1
Interest Payment Date of an overdue amount is the last day of each
Designated Interest Period (as defined in CLAUSE 8.4 (Default
interest)); or
(c) (other than by reason of negligence or default by the Funding 1
Liquidity Facility Provider) a Funding 1 Liquidity Facility Loan
not being made after Funding 1 has delivered a Funding 1 Liquidity
Facility Request for that Funding 1 Liquidity Facility Loan; or
(d) any reasonable costs, including legal fees, which the Funding 1
Liquidity Facility Provider may sustain or incur as a consequence
of any default by Funding 1 in the performance of any of the
obligations expressed to be assumed by it in this Agreement.
27
Funding 1's liability in each case includes any loss of margin or other
loss or expense on account of funds borrowed, contracted for or utilised
to fund any amount payable under any Funding 1 Liquidity Document, any
amount repaid or prepaid or any Funding 1 Liquidity Facility Loan.
22. EVIDENCE AND CALCULATIONS
22.1 ACCOUNTS
Accounts maintained by the Funding 1 Liquidity Facility Provider in
connection with this Agreement are prima facie evidence of the matters to
which they relate.
22.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by the Funding 1 Liquidity Facility
Provider of a rate or amount under this Agreement is, in the absence of
manifest error, conclusive evidence of the matters to which it relates.
22.3 CALCULATIONS
Interest (including any applicable Mandatory Liquid Asset Cost) and the
fee payable under CLAUSE 17.1 (Commitment fee) accrue from day to day and
are calculated on the basis of the actual number of days elapsed and a
year of 365 days or, if market practice dictates, 360 days.
23. AMENDMENTS AND WAIVERS
23.1 PROCEDURE
Subject to CLAUSE 25 of the Funding 1 Deed of Charge (Supplemental
Provisions Regarding the Security Trustee), any term of the Funding 1
Liquidity Documents may be amended or waived with the written agreement
of Funding 1, the Security Trustee and the Funding 1 Liquidity Facility
Provider.
23.2 WAIVERS AND REMEDIES CUMULATIVE
The rights of the Funding 1 Liquidity Facility Provider under the Funding
1 Liquidity Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the general
law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a waiver of
that right.
24. CHANGES TO THE PARTIES
24.1 TRANSFERS BY FUNDING 1
Funding 1 may not assign, transfer, novate or dispose of any of, or any
interest in, the Funding 1 Liquidity Facility Commitment and/or rights
and/or obligations under this Agreement except that Funding 1 may assign
its rights under this Agreement to the Security Trustee pursuant to the
Funding 1 Deed of Charge.
28
24.2 TRANSFER BY THE SECURITY TRUSTEE
The Security Trustee may assign its rights under this Agreement to any
successor security trustee under the Funding 1 Deed of Charge.
24.3 TRANSFERS BY THE CASH MANAGER
The Cash Manager may assign its rights under this Agreement to any
successor Cash Manager under the Cash Management Agreement.
24.4 TRANSFERS BY THE FUNDING 1 LIQUIDITY FACILITY PROVIDER
(a) The Funding 1 Liquidity Facility Provider (the EXISTING FUNDING 1
LIQUIDITY FACILITY PROVIDER) may, subject to PARAGRAPH (B) below, at any
time assign, transfer or novate any of its rights and/or obligations
under this Agreement to another person with the Requisite Ratings (the
NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER) provided that the then current
ratings of the Notes of an Issuer are not adversely affected thereby and
further provided that if, at the time of such assignment, transfer or
novation, the Funding 1 Liquidity Facility Provider is a Qualifying
Lender, such other person is also at such time a Qualifying Lender.
(b) The prior written consent of Funding 1 and the Security Trustee is
required for any such assignment, transfer or novation, unless a Funding
1 Liquidity Facility Default is outstanding in which case no consent is
required from Funding 1. However, the prior written consent of Funding 1
and the Security Trustee must not be unreasonably withheld or delayed and
will be deemed to have been given if, within 14 days of receipt by
Funding 1 or the Security Trustee (as applicable) of an application for
consent, it has not been expressly refused.
(c) A transfer of obligations will be effective only if either:
(i) the obligations are novated in accordance with CLAUSE 24.5
(Procedure for novations); or
(ii) the New Funding 1 Liquidity Facility Provider confirms to the
Security Trustee and Funding 1 in writing that it undertakes to be
bound by the terms of this Agreement (including, without
limitation, the representations and warranties) to be made by it
in accordance with CLAUSE 14.2 (Representations and warranties by
the Funding 1 Liquidity Facility Provider) and the Funding 1 Deed
of Charge. On the transfer becoming effective in this manner the
Existing Funding 1 Liquidity Facility Provider shall be relieved
of its obligations under this Agreement to the extent that they
are transferred to the New Funding 1 Liquidity Facility Provider.
(d) Nothing in this Agreement restricts the ability of the Funding 1
Liquidity Facility Provider to sub-contract an obligation if the Funding
1 Liquidity Facility Provider remains primarily liable under this
Agreement for that obligation.
(e) The Existing Funding 1 Liquidity Facility Provider is not responsible to
a New Funding 1 Liquidity Facility Provider for:
(i) the execution, genuineness, validity, enforceability or
sufficiency of any Funding 1 Liquidity Document or any other
document;
(ii) the collectability of amounts payable under any Funding 1
Liquidity Document; or
29
(iii) the accuracy of any statements (whether written or oral) made in
or in connection with any Funding 1 Liquidity Document.
(f) The New Funding 1 Liquidity Facility Provider confirms to the Existing
Funding 1 Liquidity Facility Provider and the other Finance Parties that
it:
(i) has made its own independent investigation and assessment of the
financial condition and affairs of each of Funding 1 and its
related entities in connection with its participation in this
Agreement and has not relied exclusively on any information
provided to it by the Existing Funding 1 Liquidity Facility
Provider in connection with any Funding 1 Liquidity Document; and
(ii) will continue to make its own independent appraisal of the
creditworthiness of each of Funding 1 and its related entities
while any amount is or may be outstanding under this Agreement or
any Funding 1 Liquidity Facility Commitment is in force.
(g) Nothing in any Funding 1 Liquidity Document obliges the Existing Funding
1 Liquidity Facility Provider to:
(i) accept a re-transfer from a New Funding 1 Liquidity Facility
Provider of the Funding 1 Liquidity Facility Commitment and/or
rights and/or obligations assigned, transferred or novated under
this Clause; or
(ii) support any losses incurred by the New Funding 1 Liquidity
Facility Provider by reason of the non-performance by Funding 1 of
its obligations under this Agreement or otherwise.
(h) Any reference in this Agreement to the Funding 1 Liquidity Facility
Provider includes a New Funding 1 Liquidity Facility Provider.
24.5 PROCEDURE FOR NOVATIONS
(a) A novation is effected if:
(i) the Existing Funding 1 Liquidity Facility Provider and the New
Funding 1 Liquidity Facility Provider deliver to the Security
Trustee a duly completed Novation Certificate, substantially in
the form of SCHEDULE 4; and
(ii) the Security Trustee executes such Novation Certificate.
(b) To the extent that they are expressed to be the subject of the novation
in the Novation Certificate:
(i) the Existing Funding 1 Liquidity Facility Provider and the other
Parties (the EXISTING PARTIES) will be released from their
obligations to each other (the DISCHARGED OBLIGATIONS);
(ii) the New Funding 1 Liquidity Facility Provider and the Existing
Parties will assume obligations towards each other which differ
from the Discharged Obligations only insofar as they are owed to
or assumed by the New Funding 1 Liquidity Facility Provider
instead of the Existing Funding 1 Liquidity Facility Provider;
(iii) the rights of the Existing Funding 1 Liquidity Facility Provider
against the Existing Parties and vice versa (the DISCHARGED
RIGHTS) will be cancelled; and
30
(iv) the New Funding 1 Liquidity Facility Provider and the Existing
Parties will acquire rights against each other which differ from
the Discharged Rights only insofar as they are exercisable by or
against the New Funding 1 Liquidity Facility Provider instead of
the Existing Funding 1 Liquidity Facility Provider,
all on the date of execution of the Novation Certificate by the Security
Trustee or, if later, the date specified in the Novation Certificate.
25. DISCLOSURE OF INFORMATION
The Funding 1 Liquidity Facility Provider may disclose to any person with
whom it is proposing to enter, or has entered into, any kind of transfer,
participation or other agreement in relation to this Agreement:
(a) a copy of any Funding 1 Liquidity Document; and
(b) any information which the Funding 1 Liquidity Facility Provider
has acquired under or in connection with any Funding 1 Liquidity
Document,
if that person undertakes to Funding 1 and the Security Trustee to keep
the information confidential.
26. SET-OFF
(a) The Funding 1 Liquidity Facility Provider undertakes with Funding 1 and
the Security Trustee not to exercise or claim any right of set-off or
combination or consolidation of accounts in respect of any account of
Funding 1 with the Funding 1 Liquidity Facility Provider and/or interest
accruing on amounts in any such account or any part of such account in or
towards, or conditionally upon satisfaction of any liabilities to the
Funding 1 Liquidity Facility Provider of Funding 1 or itself in any other
capacity whatsoever or any other person.
(b) In the event that the Funding 1 Liquidity Facility Provider (in breach of
its undertaking in PARAGRAPH (A) above) exercises any right of set-off or
combination or consolidation of accounts, the Funding 1 Liquidity
Facility Provider shall pay to Funding 1 such additional amount so that
the net amount received by Funding 1 will equal the full amount which
would have been received by it if the Funding 1 Liquidity Facility
Provider had not exercised or claimed such right of set-off or
combination or consolidation of accounts.
27. SEVERABILITY
If a provision of any Funding 1 Liquidity Document is or becomes illegal,
invalid or unenforceable in any jurisdiction, that shall not affect:
(a) the legality, validity or enforceability in that jurisdiction of
any other provision of the Funding 1 Liquidity Documents; or
(b) the legality, validity or enforceability in other jurisdictions of
that or any other provision of the Funding 1 Liquidity Documents.
28. COUNTERPARTS
This Agreement may be executed in any number of counterparts (manually or
by facsimile) each of which, when executed and delivered, shall
constitute an original, but all the counterparts shall together
constitute but one and the same instrument provided, however, that
31
this Agreement shall have no force or effect until it is executed by the
last party to execute the same and shall be deemed to have been executed
and delivered in the place where such last party executed this Agreement.
29. NOTICES
29.1 GIVING OF NOTICES
Any notice, communication or demand made under or in connection with this
Agreement shall be in writing and shall be delivered personally, or by
post, fax or cable to the addresses given in CLAUSE 29.2 (Addresses) or
at such other address as the recipient may have notified to the other
party in writing. Proof of posting or despatch of any notice or
communication shall be deemed to be proof of receipt:
(a) in the case of a letter, on the third business day after posting;
and
(b) in the case of a facsimile on the business day of despatch.
29.2 ADDRESSES FOR NOTICES
The addresses referred to in this CLAUSE 29 (Notices) are as follows:
(a) in the case of Funding 1, to Permanent Funding (No. 1) Limited at
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile number
▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇) for the attention of the Secretary with a
copy to HBOS Treasury Services plc, ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ (facsimile no. ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇) for the attention of
Head of Capital Markets and Securitisation;
(b) in the case of the Cash Manager, to Halifax plc at ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (LP/3/3/SEC) (facsimile number +44
(0) 113 235 7511) for the attention of Head of Mortgage
Securitisation with a copy to HBOS Treasury Services plc, ▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile no. ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇)
for the attention of Head of Capital Markets and Securitisation;
(c) in the case of the Security Trustee, to The Bank of ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number + 44 (020) 7964
6061/6399) for the attention of Corporate Trust Services; and
(d) in the case of the Funding 1 Liquidity Facility Provider, to
JPMorgan Chase Bank, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile
no. ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇/5311) for the attention of European Loans,
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 29.
30. THIRD PARTY RIGHTS
A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce any term of this
Agreement, but this does not affect any right or remedy of a third party
which exists or is available apart from that Act.
32
31. GOVERNING LAW
This Agreement is governed by and construed in accordance with English
law.
32. SUBMISSION TO JURISDICTION
Each party to this Agreement hereby irrevocably submits to the non-
exclusive jurisdiction of the English courts in any action or proceeding
arising out of or relating to this Agreement, and hereby irrevocably
agrees that all claims in respect of such action or proceeding may be
heard and determined by such courts. Each party to this Agreement hereby
irrevocably waives, to the fullest extent it may possibly do so, any
defence or claim that the English courts are an inconvenient forum for
the maintenance or hearing of such action or proceeding.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
33
SCHEDULE 1
CONDITIONS PRECEDENT DOCUMENTS
1. A copy of the memorandum and articles of association and certificate of
incorporation of Funding 1.
2. A copy of a resolution of the board of directors of Funding 1:
(a) approving the terms of, and the transactions contemplated by, this
Agreement and resolving that it execute this Agreement;
(b) authorising a specified person or persons to execute this
Agreement on its behalf; and
(c) authorising a specified person or persons, on its behalf, to sign
and/or despatch all other documents and notices to be signed
and/or despatched by it under or in connection with this
Agreement.
3. A specimen of the signature of each person authorised by the resolution
referred to in PARAGRAPH 2 above.
4. A certificate of an authorised signatory of Funding 1 certifying that
each copy document specified in this SCHEDULE 1 is correct, complete and
in full force and effect as at a date no earlier than the date of this
Agreement.
5. The Transaction Documents.
6. Confirmation from ▇▇▇▇▇▇▇▇ Chance as legal counsel to the Security
Trustee that they have received, on behalf of the Security Trustee, a
transaction legal opinion from ▇▇▇▇▇ & Overy.
34
SCHEDULE 2
CALCULATION OF THE MANDATORY LIQUID ASSET COST
(a) For the purposes of PARAGRAPH (A) of the definition of Mandatory Liquid
Asset Cost, the Mandatory Liquid Asset Cost for a Funding 1 Liquidity
Facility Loan for its Funding 1 Liquidity Facility Interest Period is the
rate determined by the Funding 1 Liquidity Facility Provider (rounded
upward, if necessary, to four decimal places) calculated in accordance
with the following formulae:
BY+S(Y - Z)+Fx(0.01)
-------------------- % per annum = Mandatory Liquid Asset Cost
100 - (B+S)
where on the day of application of the formula:
B is the percentage of the Funding 1 Liquidity Facility Provider's
eligible liabilities (in excess of any stated minimum) which the
Bank of England requires the Funding 1 Liquidity Facility Provider
to hold on a non-interest-bearing deposit account in accordance
with its cash ratio requirements;
Y is the applicable LIBOR for that Funding 1 Liquidity Facility
Provider;
S is the percentage of the Funding 1 Liquidity Facility Provider's
eligible liabilities which the Bank of England requires the
Funding 1 Liquidity Facility Provider to place as a special
deposit;
Z is the lower of Y and the interest rate per annum paid by the Bank
of England on special deposits; and
F is the charge payable by the Funding 1 Liquidity Facility Provider
to the Financial Services Authority under the fees rules (but, for
this purpose, calculated by the Funding 1 Liquidity Facility
Provider on a notional basis as being the average of the fee
tariffs within fee block Category A1 (Deposit acceptors) of the
fees rules, applying any applicable discount and ignoring any
minimum fee required under the fees rules) and expressed in pounds
per {pound-sterling}1 million of the tariff base of the Funding 1
Liquidity Facility Provider.
(b) For the purposes of this Schedule 2:
(i) ELIGIBLE LIABILITIES and SPECIAL DEPOSITS have the meanings given
to them at the time of application of the formula under or
pursuant to the Bank of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or by the Bank of
England; and
(ii) FEE BASE means the then current rules on periodic fees in the
Supervision Manual of the FSA Handbook; and
(iii) TARIFF BASE has the meaning given to it in the fees rules.
(c) In the application of the formula, B, Y, S and Z are included in the
formula as figures and not as percentages, e.g. if B = 0.5% and Y = 15%,
BY is calculated as 0.5 x 15. A negative result obtained by subtracting Z
from Y is taken as zero.
35
(d) (i) Each formula is applied on the first day of the relevant Funding 1
Liquidity Interest Period.
(ii) Each rate calculated in accordance with the formula is, if
necessary, rounded upward to four decimal places.
(iii) If the formula produces a negative percentage, the percentage
shall be taken as zero.
(e) If the Funding 1 Liquidity Facility Provider determines, after
consultation with Funding 1 that a change in circumstances has rendered,
or will render, the formula inappropriate, the Funding 1 Liquidity
Facility Provider shall notify Funding 1 of the manner in which the
Mandatory Liquidity Asset Cost will subsequently be calculated. The
manner of calculation so notified by the Funding 1 Liquidity Facility
Provider shall, in the absence of manifest error, be binding on all the
parties.
36
SCHEDULE 3
FORM OF FUNDING 1 LIQUIDITY FACILITY REQUEST
To: JPMorgan Chase Bank as Funding 1 Liquidity Facility Provider
Copy: The Bank of New York (as Security Trustee)
From: Permanent Funding (No. 1) Limited
Date: [ ]
PERMANENT FUNDING (NO. 1) LIMITED
{pound-sterling}[{circle},000,000] FUNDING 1 LIQUIDITY FACILITY AGREEMENT
(AS AMENDED AND/OR RESTATED FROM TIME TO TIME)
1. We wish to borrow a Funding 1 Liquidity [Facility Drawing/Facility Stand-
by Drawing] as follows:
(a) Funding 1 Liquidity Facility Drawdown Date: [ ]
(b) Funding 1 Liquidity Facility
(c) Amount: {pound-sterling}[ ]
(d) Payment Instructions: [ ].**
(e) Term of Funding 1 Liquidity [Facility Drawing/Facility Stand-by
Drawing]: [ ]
2. We confirm that each condition specified in CLAUSE 4.2 (Further
conditions precedent) is satisfied on the date of this Funding 1
Liquidity Facility Request.
3. We confirm that the Funding 1 Liquidity Facility Drawing is to be used
for one of the purposes specified in CLAUSE 3 (Purpose).
By:
PERMANENT FUNDING (NO. 1) LIMITED
Authorised Signatory
----------
** This will be the Funding 1 Liquidity Facility Stand-by Account it this is
a Funding 1 Liquidity Facility Stand-by Drawing.
37
SCHEDULE 4
FORM OF NOVATION CERTIFICATE
To: [The Bank of New York] (as Security Trustee)
From: [THE EXISTING FUNDING 1 LIQUIDITY FACILITY PROVIDER] and
[THE NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER]
Date: [ ]
PERMANENT FUNDING (NO. 1) LIMITED
{pound-sterling}[{circle},000,000] FUNDING 1 LIQUIDITY FACILITY AGREEMENT AS
AMENDED AND/OR RESTATED FROM TIME TO TIME)
We refer to CLAUSE 24.5 (Procedure for novations).
1. We JPMorgan Chase Bank (the EXISTING FUNDING 1 LIQUIDITY FACILITY
PROVIDER) and [ ] (the NEW FUNDING 1 LIQUIDITY FACILITY
PROVIDER) agree to the Existing Funding 1 Liquidity Facility Provider and
the New Funding 1 Liquidity Facility Provider novating all the Existing
Funding 1 Liquidity Facility Provider's FUNDING 1 LIQUIDITY Facility
Commitment (or part) and/or rights and obligations referred to in the
Schedule in accordance with CLAUSE 24.5 (Procedure for novations).
2. The specified date for the purposes of CLAUSE 24.5(B) (Procedure for
novations) is [date of novation].
3. The New Funding 1 Liquidity Facility Provider makes the representations
and warranties to be made by it in accordance with CLAUSE 14
(Representations and warranties) as at [date of novation].
4. The address for notices of the New Funding 1 Liquidity Facility Provider
for the purposes of CLAUSE 29.2 (Addresses for notices) is set out in the
Schedule to this Novation Certificate.
5. This Novation Certificate is governed by English law.
38
THE SCHEDULE
FUNDING 1 LIQUIDITY FACILITY COMMITMENT AND RIGHTS AND OBLIGATIONS
TO BE NOVATED
[insert relevant details]
[NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER]
[Address for notices]
[Existing Funding 1 [New Funding 1 Liquidity [SECURITY TRUSTEE]
Liquidity Facility Provider] Facility Provider]
By: By: By:
Date: Date: Date:
39
SIGNATORIES
FUNDING 1
SIGNED by )
for and on behalf of )
PERMANENT FUNDING (NO. 1) LIMITED )
FUNDING 1 LIQUIDITY FACILITY PROVIDER
SIGNED by )
for and on behalf of )
JPMORGAN CHASE BANK )
CASH MANAGER
SIGNED by )
for and on behalf of )
HALIFAX PLC )
SECURITY TRUSTEE
SIGNED by )
for and on behalf of )
THE BANK OF NEW YORK )
