Exhibit 1.1
$[ ]
PERMANENT MASTER ISSUER PLC
$[ ] Series [ ] Class [ ] Floating Rate Notes due [ ]
Underwriting Agreement
[Date]
[ ] as Representatives of the
several Underwriters listed
in Schedule I hereto
Ladies and Gentlemen:
Permanent Master Issuer PLC, a public limited company incorporated under
the laws of England and Wales (the ISSUER), proposes to issue and sell to the
Underwriters listed in Schedule I hereto (the UNDERWRITERS), for whom [*] are
acting as representatives (the REPRESENTATIVES), $[ ] Series [ ] Class [ ]
Issuer Notes due [ ] (the OFFERED NOTES) as set forth in Schedule I hereto.
The Offered Notes will be denominated in U.S. dollars and in
denominations of $[75,000] plus integral multiples of $[1,000]. The Offered
Notes will be issued on the date and at the time specified in the Pricing
Supplement, or at such other time and/or date as the Issuer and the
Representatives on behalf of the applicable Underwriters may agree (the CLOSING
DATE). The issue of the Offered Notes is referred to in this Agreement as the
ISSUE.
Simultaneously with the Issue, the Issuer intends to issue other classes
and series of notes (the REG S NOTES) specified in the subscription agreement
dated on or about the date hereof (the SUBSCRIPTION AGREEMENT) among the
Issuer, Halifax plc (HALIFAX), Permanent Funding (No. 2) Limited (FUNDING 2),
Permanent Mortgages Trustee Limited (the MORTGAGES TRUSTEE) and the respective
managers named therein (the MANAGERS). The Managers have agreed to subscribe
and pay for the Reg S Notes upon the terms and subject to the conditions
contained therein and in the programme agreement dated [ ] among the Issuer,
Halifax, Funding 2, the Mortgages Trustee and the respective dealers named
therein (the PROGRAMME AGREEMENT). The Offered Notes, together with the Reg S
Notes, are referred to herein as the NOTES.
The Notes will be constituted by, issued subject to and have the benefit
of, a trust deed (the ISSUER TRUST DEED) dated [ ] (the PROGRAMME DATE) between
the Issuer and The Bank of New York as trustee for the Noteholders (the NOTE
TRUSTEE).
The Notes (together with the Issuer's obligations to its other creditors)
will be secured by the benefit of security interests created under a deed of
charge and assignment by way of security (the ISSUER DEED OF CHARGE) to be
entered into on or before the Programme Date by the Issuer, the Note Trustee,
Citibank, N.A. London Branch (in its capacity as the PRINCIPAL PAYING AGENT,
the US PAYING AGENT, the REGISTRAR, the TRANSFER AGENT and the AGENT BANK),
Halifax in its capacity as cash manager to the Issuer (the ISSUER CASH
MANAGER),
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Halifax as Funding 1 swap provider (the FUNDING 1 SWAP PROVIDER), Bank of
Scotland in its capacity as account bank to the Issuer (the ISSUER ACCOUNT
BANK) and Structured Finance Management Limited in its capacity as corporate
services provider to the Issuer (the ISSUER CORPORATE SERVICES PROVIDER). The
deed of accession to the Issuer Deed of Charge to be entered into on the
Closing Date is herein referred to as the ISSUER DEED OF ACCESSION.
Payments of principal of, and interest on, the Offered Notes will be made
by or on behalf of the Issuer to the US Paying Agent and by the US Paying Agent
to holders of the Offered Notes on behalf of the Issuer under a paying agent
and agent bank agreement dated the Programme Date (the ISSUER PAYING AGENT AND
AGENT BANK AGREEMENT) between the Issuer, the Note Trustee, the Agent Bank, the
paying agents named therein, the Transfer Agent and the Registrar.
Each class of the Offered Notes will be in fully registered permanent
global form. The Registrar will maintain a register (the REGISTER) in respect
of the Offered Notes in accordance with the Issuer Paying Agent and Agent Bank
Agreement. The global issuer notes representing the Offered Notes (the GLOBAL
ISSUER NOTES) will be deposited on behalf of the beneficial owners of the
Offered Notes with Citibank, N.A London Branch as custodian for, and registered
in the name of Cede & Co. as nominee of, The Depository Trust Company (DTC).
The Issuer will use an amount equal to the aggregate of the gross
proceeds of the Issue and the gross proceeds of the Reg S Notes issue to make a
loan to Funding 1 pursuant to an intercompany loan agreement dated the
Programme Date between the Issuer, Funding 1, the Agent Bank and The Bank of
New York as security trustee (the SECURITY TRUSTEE) (the GLOBAL INTERCOMPANY
LOAN AGREEMENT and each loan made thereunder a LOAN TRANCHE). Reference to the
Global Intercompany Loan Agreement shall include reference to a loan tranche
supplement in respect of the Global Intercompany Loan Agreement to be entered
into on or about the Closing Date among Funding 2, the Issuer, the Security
Trustee and the Agent Bank, as amended, restated, novated, verified or
supplemented from time to time and shall include any additional and/or
replacement intercompany loan terms and conditions entered into from time to
time in accordance with the Legal Agreements.
On the Closing Date, Funding 1 will pay the proceeds of the Loan Tranche
to Halifax in its capacity as the seller (the SELLER), or to its order, as
consideration in part for the sale of a new portfolio of mortgage loans and
interests in their related insurances and in their related security to the
Mortgages Trustee (the NEW PORTFOLIO), thereby increasing Funding 1's share of
the Portfolio (as defined below).
On June 14, 2002 and on several subsequent dates (each an ASSIGNMENT
DATE), Halifax completed the sale of first residential mortgage loans (the
LOANS) and an interest in their related insurances and their related security
(together, the RELATED SECURITY and, together with the Loans, any accrued
interest on the Loans and other amounts derived from the Loans, the PORTFOLIO,
being the SCOTTISH PORTFOLIO to the extent that such Portfolio relates to Loans
(SCOTTISH LOANS) which are secured by a standard security over a property in
Scotland and being the ENGLISH PORTFOLIO to the extent that such Portfolio
relates to Loans (ENGLISH LOANS) which are secured by a mortgage over a
property in England and Wales) to the Mortgages Trustee pursuant to the
mortgage sale agreement dated June 14, 2002 among Halifax, the Mortgages
Trustee, Funding 1 and the Security Trustee (the MORTGAGE SALE AGREEMENT as the
same may be amended, restated, supplemented, or otherwise modified from time to
time).
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Each of the Mortgages Trustee, Funding 1 and the Security Trustee has
appointed Halifax as servicer (the SERVICER) to service the Portfolio pursuant
to a Servicing Agreement dated June 14, 2002 (the SERVICING AGREEMENT as the
same may be amended, restated, supplemented, or otherwise modified from time to
time). The Mortgage Sale Agreement and certain other documents incorporate by
reference definitions appearing in a master definitions and construction
schedule which was signed on June 14, 2002 by way of identification for and on
behalf of ▇▇▇▇▇ & ▇▇▇▇▇ LLP and Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ (the MASTER
DEFINITIONS SCHEDULE as the same may be amended, restated, supplemented, or
otherwise modified from time to time).
The Mortgages Trustee holds the Portfolio on a bare trust for the benefit
of Funding 1, Funding 2 and the Seller as tenants in common pursuant to the
mortgages trust deed dated June 13, 2002 among the Seller, Funding 1 and the
Mortgages Trustee (the MORTGAGES TRUST DEED as the same may be amended,
restated, supplemented, or otherwise modified from time to time). The Mortgages
Trustee entered into a guaranteed investment contract with Bank of Scotland (in
such capacity, the MORTGAGES TRUSTEE GIC PROVIDER) dated June 14, 2002 in
respect of its principal bank account (the MORTGAGES TRUSTEE GUARANTEED
INVESTMENT CONTRACT as the same may be amended, restated, supplemented, or
otherwise modified from time to time).
Funding 1's obligations to the Issuer under the Global Intercompany Loan
Agreement and to Funding 1's other creditors will be secured with the benefit
of security interests created by a deed of charge and assignment dated the
Programme Date, which includes any deed of accession entered into in connection
therewith or supplemental thereto (the FUNDING 1 DEED OF CHARGE as the same may
be amended, restated, supplemented, or otherwise modified from time to time)
entered into by the Seller, Funding 1, Halifax in its capacity as swap provider
(the FUNDING 1 SWAP PROVIDER), Bank of Scotland in its capacity as GIC provider
(the FUNDING 1 GIC PROVIDER), the Security Trustee, Halifax in its capacity as
cash manager to the Mortgages Trustee and Funding 1 (the CASH MANAGER), Bank of
Scotland in its capacity as account bank to the Mortgages Trustee, Bank of
Scotland in its capacity as account bank to Funding 1 (in such capacities, each
an ACCOUNT BANK), Halifax in its capacity as start-up loan provider to Funding
1 (the START-UP LOAN PROVIDER) and Structured Finance Management Limited in its
capacity as corporate services provider to Funding 1 (the FUNDING 1 CORPORATE
SERVICES PROVIDER).
In connection with Funding 2's purchase of a beneficial interest in the
mortgage trust portfolio and the issue of certain notes by the Issuer, Funding
1, in addition to the documents described above, entered into on the Programme
Date, (1) a cash management agreement with the Cash Manager, the Mortgages
Trustee and the Security Trustee (the CASH MANAGEMENT AGREEMENT as the same may
be amended, restated, supplemented, or otherwise modified from time to time);
(2) a bank account agreement with the Account Bank and the Mortgages Trustee
(the BANK ACCOUNT AGREEMENT as the same may be amended, restated, supplemented,
or otherwise modified from time to time); (3) a guaranteed investment contract
with the Funding 1 GIC Provider (the FUNDING 1 GUARANTEED INVESTMENT CONTRACT
as the same may be amended, restated, supplemented, or otherwise modified from
time to time); (4) the Funding 1 corporate services agreement between Permanent
Holdings Limited (HOLDINGS), SFM Corporate Services Limited (the SHARE
TRUSTEE), the Seller, the Security Trustee and the Funding 1 Corporate Services
Provider (the FUNDING 1 CORPORATE SERVICES AGREEMENT as the same may be
amended, restated, supplemented, or otherwise modified from time to time); and
(5) an ISDA Master Agreement including the Schedule thereto and
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confirmations thereunder in the respect of the Funding 2 (mortgage rates) basis
rate swap and Funding 2 (LIBOR rate) basis rate swap with Funding 2, the Basis
Rate Swap Provider and the Note Trustee (the BASIS RATE SWAP AGREEMENTS), each
of which will remain in effect, as applicable, in respect of the issue of the
Notes.
The Issuer has executed and delivered on the Programme Date (1) the
Issuer corporate services agreement among Holdings, the Share Trustee, the
Issuer, the Seller, the Security Trustee and the Issuer Corporate Services
Provider (the ISSUER CORPORATE SERVICES AGREEMENT); (2) a cash management
agreement among the Issuer, the Issuer Cash Manager and the Security Trustee
(the ISSUER CASH MANAGEMENT AGREEMENT); (3) a bank account agreement (the
ISSUER BANK ACCOUNT AGREEMENT) among the Issuer Account Bank, the Issuer Cash
Manager, the Security Trustee and the Issuer; (4) a post-enforcement call
option agreement (the ISSUER POST-ENFORCEMENT CALL OPTION AGREEMENT) among the
Issuer, the Note Trustee, the Registrar, the Transfer Agent and Permanent PECOH
Limited in its capacity as the post-enforcement call option holder (the
POST?ENFORCEMENT CALL OPTION HOLDER).
In connection with the issue of the Notes, the Issuer will also execute
and deliver, on or before the Closing Date, (1) the Global Issuer Notes
relating to each class of the Notes; (2) ISDA Master Agreements including the
schedules thereto and confirmations thereunder in respect of Dollar/Sterling
currency swaps among the Issuer, the relevant Issuer Dollar Currency Swap
Provider and the Security Trustee (each an ISSUER DOLLAR CURRENCY SWAP
AGREEMENT); and (3) ISDA Master Agreements including the schedules thereto and
confirmations thereunder in respect of Euro/Sterling currency swaps among the
Issuer, the relevant Issuer Euro Currency Swap Provider and the Security
Trustee (each an ISSUER EURO CURRENCY SWAP AGREEMENT and together with each
Issuer Dollar Currency Swap Agreement, the SWAP AGREEMENTS).
As required, the Issuer, Funding 1, the Mortgages Trustee and/or Halifax
have entered or will enter into any other relevant documents to be signed and
delivered on or before the Closing Date (such documents, together with the
Mortgage Sale Agreement, the Scottish declaration of trust entered into among
Halifax, the Mortgages Trustee and Funding 1 pursuant to the Mortgage Sale
Agreement (such Scottish declaration of trust together with any further
Scottish declaration of trust entered into from time to time pursuant to the
Mortgage Sale Agreement, each a SCOTTISH DECLARATION OF TRUST), the Mortgages
Trust Deed, the Funding 1 Swap Agreement, the corporate services agreement
entered into between the Mortgages Trustee, the Security Trustee and SFM
Offshore Limited (the MORTGAGES TRUSTEE CORPORATE SERVICES AGREEMENT), the
Servicing Agreement, the Mortgages Trustee Guaranteed Investment Contract, the
Global Intercompany Loan Agreement, the Funding 1 Guaranteed Investment
Contract, the Funding 1 Corporate Services Agreement, the Start-up Loan
Agreement, the Start-up Loan Tranche Supplement, the Cash Management Agreement,
the Bank Account Agreement, the Funding 1 Deed of Charge, the Issuer Deed of
Charge (as amended by the Issuer Deed of Accession), the Issuer Trust Deed, the
Issuer Post-Enforcement Call Option Agreement, the Issuer Cash Management
Agreement, the Issuer Paying Agent and Agent Bank Agreement, the Issuer Bank
Account Agreement, the Issuer Corporate Services Agreement, the Swap
Agreements, this Agreement, the Programme Agreement and the Subscription
Agreement, each as they have been or may be amended, restated, varied or
supplemented from time to time, are collectively referred to herein as the
LEGAL AGREEMENTS).
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To the extent not defined herein, capitalized terms used herein have the
meanings assigned to such terms in the Registration Statement and the
Prospectus (each as defined below).
The Issuer hereby confirms its agreement with the Underwriters concerning
the purchase and sale of the Offered Notes, as follows:
1. Purchase of the Offered Notes by the Underwriters.
(a) The Offered Notes will be issued at a price equal to the aggregate
of 100 per cent. of the aggregate principal amount of each of the Offered Notes
(the ISSUE PRICE). The Issuer agrees to sell the Offered Notes to the several
Underwriters as provided in this Agreement, and each Underwriter, on the basis
of the representations, warranties and agreements set forth herein and subject
to the conditions set forth herein, agrees, severally and not jointly, to
purchase from the Issuer the respective principal amount of each class of the
Offered Notes set forth opposite such Underwriter's name in Schedule I hereto
at the Issue Price. The Issuer will not be obligated to deliver any of the
Offered Notes except upon payment for all the Offered Notes to be purchased as
provided herein.
(b) The Issuer understands that the Underwriters intend to make a
public offering of their respective portions of the Offered Notes as soon after
the effectiveness of this Agreement as in the judgment of each of the
Representatives is advisable, and initially to offer the Offered Notes on the
terms set forth in the Prospectus. The Issuer acknowledges and agrees that the
Underwriters may offer and sell Offered Notes to or through any affiliate of an
Underwriter and that any such affiliate may offer and sell the Offered Notes
purchased by it to or through any Underwriter. The several Underwriters will
offer and sell the Offered Notes (as applicable) in the United States only
through their selling agents which are registered broker-dealers in the United
States.
(c) Upon receipt of payment for the Offered Notes, delivery of such
Offered Notes will be made at the offices of ▇▇▇▇▇ & Overy LLP at 1:00 P.M.,
London time, on the Closing Date, or at such other time on the Closing Date as
the Issuer and the Representatives on behalf of the Underwriters may agree.
(d) In consideration of the obligations undertaken herein by the
Underwriters, the Issuer agrees to pay to the relevant Underwriters a selling
commission (the SELLING COMMISSION) of [ ] per cent. of the aggregate principal
amount of the Series [ ] Class [ ] Issuer Notes and a combined management and
underwriting commission (the MANAGEMENT AND UNDERWRITING COMMISSION) of [ ] per
cent. of the aggregate principal amount of the Series [ ] Class [ ] Issuer
Notes.
(e) The Issuer undertakes and covenants that on the Closing Date it
(or a third party on its behalf) will pay to the Representatives the aggregate
Selling Commission in respect of the Offered Notes and the aggregate Management
and Underwriting Commission in respect of the Offered Notes calculated in
accordance with paragraph (d) above.
(f) Against delivery of the Offered Notes (in the form of one or more
Global Issuer Notes) to Citibank, N.A London Branch, as custodian for, and
registered in the name of Cede & Co. as nominee of DTC, for the account of the
Underwriters, (i) the Underwriters will pay to the Representatives the gross
underwriting
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proceeds for the Offered Notes and (ii) the Representatives will pay to or for
the account of the Issuer the gross underwriting proceeds for the Offered Notes
net of any applicable transfer taxes payable in connection with the sale of
such Offered Notes. Such payment shall be made by the Representatives in U.S.
Dollars in immediately available funds, to the account of the Issuer Dollar
Currency Swap Provider (being such account details of which are notified in
writing to the Representatives for this purpose prior to the Closing Date) and
shall be evidenced by a confirmation from the Representatives that they have so
made that payment to or for the account of the Issuer. The Global Issuer Notes
shall be made available for inspection by the Representatives not later than
1:00 P.M., London time, on the London Business Day prior to the Closing Date.
(g) Each of the Issuer, Funding 1 and Halifax and each Underwriter
severally represents and agrees that:
(1) in relation to any Offered Notes which have a maturity of
one year or more and which are to be admitted to the
official list maintained by the UK Listing Authority, it
has not offered or sold, and will not offer or sell any
Offered Notes to persons in the United Kingdom prior to
admission of such Offered Notes to listing in accordance
with Part VI of the Financial Services and Markets ▇▇▇ ▇▇▇▇
(the FSMA), except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of
their businesses, or otherwise in circumstances which have
not resulted and will not result in an offer to the public
in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, as amended, or the
FSMA;
(2) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any
invitation or inducement to engage in investment activities
(within the meaning of Section 21 of the FSMA) received by
it in connection with the issue or sale of any Offered
Notes in circumstances in which Section 21(1) of the FSMA
does not apply to the Issuer; and
(3) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it
in relation to the Offered Notes in, from or otherwise
involving the United Kingdom.
(h) Each of the Issuer, Funding 1 and Halifax and each Underwriter
severally represents and agrees that:
(a) the Issuer must verify that all Dutch Resident (as defined
below) purchasers of Offered Notes (including rights representing an interest
in a Global Issuer Note) issued by it directly to such purchasers on or before
the Closing Date or issued by it in circumstances where it is reasonably able
to identify the holders as Dutch Residents on or before the Closing Date are
Professional Market Parties (as defined below); and
(b) the Issuer shall agree (or procure that the relevant
Underwriter agrees) with each such purchaser that any Offered Notes acquired by
it may not be offered, sold, transferred or delivered by any such purchaser,
except in accordance with the restrictions referred to the following paragraph:
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The Prospectus shall not be distributed and the Offered Notes (including
rights representing an interest in a Global Issuer Note) shall not be offered,
sold, transferred or delivered as part of their initial distribution or at any
time thereafter, directly or indirectly, to individuals or legal entities who
or which are established, domiciled or have their residence in The Netherlands
(DUTCH RESIDENTS) other than to the following entities, provided that such
entities trade or invest in securities in the conduct of a business or
profession (the following such entities hereinafter referred to as PROFESSIONAL
MARKET PARTIES or PMPS) and provided further that they acquire the offered
issuer notes for their own account:
(i) banks, insurance companies, securities firms, collective
investment institutions or pension funds that are supervised or licensed under
Dutch law;
(ii) banks or securities firms licensed or supervised in a
European Economic Area member state (other than The Netherlands) and registered
with the Dutch Central Bank (De Nederlandsche Bank N.V.: DNB) or the Dutch
Authority for the Financial Markets (Stichting Autoriteit Financiele Markten)
acting through a branch office in The Netherlands;
(iii) Netherlands collective investment institutions which offer
their shares or participations exclusively to professional investors and are
not required to be supervised or licensed under Dutch law;
(iv) the Dutch government (▇▇ ▇▇▇▇▇ der Nederlanden), DNB, Dutch
regional, local or other decentralised governmental institutions, or any
international treaty organisations and supranational organisations located in
The Netherlands;
(v) Netherlands enterprises or entities with total assets of at
least [EURO]500,000,000 (or the equivalent thereof in another currency)
according to their balance sheet at the end of the financial year preceding the
date they purchase or acquire the offered issuer notes;
(vi) Netherlands enterprises, entities or individuals with net
equity (eigen vermogen) of at least [EURO]10,000,000 (or the equivalent thereof
in another currency) according to their balance sheet at the end of the
financial year preceding the date they purchase or acquire the offered issuer
notes and who or which have been active in the financial markets on average
twice a month over a period of at least two consecutive years preceding such
date;
(vii) Netherlands subsidiaries of the entities referred to under
(i) above provided such subsidiaries are subject to prudential supervision;
(viii) Netherlands enterprises or entities that have a credit
rating from an approved rating agency or whose securities have such a rating;
and
(ix) such other Netherlands entities designated by the competent
Netherlands authorities after the date hereof by any amendment of the
applicable regulations.
The Offered Notes (whether or not offered to Dutch Residents) shall bear
the following legend:
THIS NOTE (OR ANY INTEREST HEREIN) MAY NOT BE OFFERED, SOLD, TRANSFERRED
OR DELIVERED AS PART OF ITS INITIAL DISTRIBUTION
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OR AT ANY TIME THEREAFTER, DIRECTLY OR INDIRECTLY, TO INDIVIDUALS OR LEGAL
ENTITIES WHO ARE ESTABLISHED, DOMICILED OR HAVE THEIR RESIDENCE IN THE
NETHERLANDS ("DUTCH RESIDENTS") OTHER THAN TO PROFESSIONAL MARKET PARTIES
WITHIN THE MEANING OF THE EXEMPTION REGULATION PURSUANT TO THE DUTCH ACT ON THE
SUPERVISION OF THE CREDIT SYSTEM 1992 ("MPs").
EACH DUTCH RESIDENT BY PURCHASING THIS NOTE (OR ANY INTEREST HEREIN),
WILL BE DEEMED TO HAVE REPRESENTED AND AGREED FOR THE BENEFIT OF THE ISSUER
THAT IT IS SUCH A PMP AND IS ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A PMP.
EACH HOLDER OF THIS NOTE (OR ANY INTEREST HEREIN), BY PURCHASING THIS
NOTE (OR ANY INTEREST HEREIN), WILL BE DEEMED TO HAVE REPRESENTED AND AGREED
FOR THE BENEFIT OF THE ISSUER THAT (1) THIS NOTE (OR ANY INTEREST HEREIN) MAY
NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED TO DUTCH RESIDENTS OTHER THAN TO
A PMP ACQUIRING FOR ITS OWN ACCOUNT AND THAT (2) THE HOLDER WILL PROVIDE NOTICE
OF THE TRANSFER RESTRICTIONS DESCRIBED HEREIN TO ANY SUBSEQUENT TRANSFEREE.
(i) Each of the Issuer, Funding 1 and Halifax and each Underwriter
severally represents and agrees that the Offered Notes have not been registered
with the Spanish Comision Nacional del ▇▇▇▇▇▇▇ de Valores and, accordingly, the
Offered Notes cannot be offered, sold, distributed or proposed in Spain nor may
any document or offer material be distributed in Spain or targeted to Spanish
resident investors (including any legal entity set up, incorporated, domiciled
or resident in the Kingdom of Spain), save in compliance with the requirements
of Law 24/1988, of 28th July (as amended by Law 37/1998, of 16th November), on
the Spanish Securities Market and the Royal Decree 291/1992, of 27th March (as
amended by the Royal Decree 2590/1998, of 7th December), on issues and public
offers for the sale of securities (as further amended, supplemented or restated
from time to time).
(j) Each of the Issuer, Funding 1 and Halifax and each Underwriter
severally represents and agrees that it has not offered or sold and will not
offer or sell in Hong Kong, by means of any document, any Offered Notes other
than (i) to persons whose ordinary business it is to buy or sell shares or
debentures (whether as principal or agent) or (ii) in circumstances which do
not constitute an offer to the public within the meaning of the Companies
Ordinance (Cap.32) of Hong Kong; and (ii) it has not issued or had in its
possession for the purposes of issue and will not issue or have in its
possession for the purposes of issue and advertisement, invitation or document
relating to the Offered Notes, whether in Hong Kong or elsewhere, which is
directed at, or in the contents of which are likely to be accessed or read by,
the public in Hong Kong (except if permitted to do so under the securities laws
of Hong Kong) other than with respect to Offered Notes which are or are
intended to be disposed of only to persons outside Hong Kong or only to
"professional investors" within the meaning of the Securities and Futures
Ordinance (Cap.571) and any rules made thereunder.
(k) Each of the Issuer, Funding 1 and Halifax and each Underwriter
severally represents and agrees that the Offered Notes have not been and will
not be registered under the Securities and Exchange Law of Japan and it has not
offered or sold and will not offer or sell any Offered Notes, directly or
indirectly, in Japan or to, for the benefit of, any resident of
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Japan (which term as used herein means any person resident in Japan, including
any corporation or other entity organised under the laws of Japan) or to others
for re-offering or resale, directly or indirectly, in Japan or to, or for the
benefit of, any resident of Japan, except pursuant to an exemption from the
registration requirements of, and otherwise in compliance with, the Securities
and Exchange Law and any other applicable laws, regulations and ministerial
guidelines of Japan.
(l) Each of the Issuer, Funding 1 and Halifax and each Underwriter
severally represents and agrees that the Prospectus has not been registered as
a prospectus with the Monetary Authority of Singapore under the Securities and
Futures Act. Chapter 289 of Singapore (the SECURITIES AND FUTURES ACT and,
accordingly, the Offered Notes may not be offered or sold or made the subject
of an invitation for subscription or purchase nor may the Prospectus or any
other document or material in connection with the offer or sale or invitation
for subscription or purchase of such Offered Notes be circulated or
distributed, whether directly or indirectly, to the public or any member of the
public in Singapore other than (i) to an institutional investor or other person
falling within section 274 of the Securities and Futures Act, (ii) to a
sophisticated investor (as defined in section 275 of the Securities and Futures
Act) and in accordance with the conditions specified in section 275 of the
Securities and Futures Act or (iii) otherwise than pursuant to, and in
accordance with the conditions of, any other applicable provision of the
Securities and Futures Act.
2. (I) Representations and Warranties of the Issuer. The Issuer
represents and warrants to, and agrees with, the Underwriters, and each of them
that:
(a) Registration Statement and Prospectus. Funding 2 has prepared and
filed with the Commission a Registration Statement on Form S-3 (No. [ ]). The
Registration Statement as amended at the time when it became effective, or, if
a post-effective amendment is filed with respect thereto, as amended by such
post-effective amendment at the time of its effectiveness, including all
exhibits thereto, is referred to in this Agreement as the REGISTRATION
STATEMENT. The Registration Statement has been declared effective by the
Commission under the Securities Act and no order suspending the effectiveness
of the Registration Statement has been issued by the Commission and no
proceeding for that purpose has been instituted or, to the best knowledge of
the Issuer, threatened by the Commission. Funding 2 also proposes to file with
the Commission pursuant to Rule 424(b) under the Securities Act a prospectus
supplement (the PROSPECTUS SUPPLEMENT) to the prospectus dated [ ] (the BASE
PROSPECTUS and, as amended or supplemented to the date hereof, and as further
supplemented by the prospectus supplement, the PROSPECTUS) relating to the
Offered Notes and the method of distribution thereof. The Registration
Statement, at the time it became effective, any post-effective amendment
thereto, at the time it became effective, and the Prospectus, as of the date of
the Prospectus Supplement, complied and on the Closing Date, the Prospectus
(and any amendments or supplements thereto) will comply, in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the Trust Indenture Act of 1939, as amended (the TRUST INDENTURE ACT),
and the respective rules thereunder; and the Registration Statement as of the
applicable effective date as to each part of the Registration Statement and any
amendment thereto pursuant to Rule 430B(f)(2) under the Securities Act, did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and the Prospectus as of the date of the Prospectus Supplement
did not, and on the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the
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circumstances under which they were made, not misleading (provided that the
Issuer makes no representation and warranty with respect to any statements or
omissions made: (i) in that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification (Form T-1) under the
Trust Indenture Act of the Note Trustee or (ii) in reliance upon and in
conformity with information relating to any Underwriter furnished to the Issuer
in writing by or on behalf of any Underwriter through the Representatives
expressly for use in the Registration Statement or the Prospectus or any
amendment or supplement thereto.
(b) Incorporation and Good Standing. The Issuer has been duly
incorporated and is a validly existing organization in good standing under the
laws of its jurisdiction of organization, is duly qualified to do business in
England and Wales and has full right, power and authority necessary to conduct
its business as described in the Prospectus, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, have a material adverse effect on the transactions contemplated
herein or in the Legal Agreements (an ISSUER MATERIAL ADVERSE EFFECT). The
Issuer has not taken any corporate action nor (to the best of its knowledge and
belief) have any other steps been taken or legal proceedings been started or
threatened against it for its winding-up, dissolution or reorganization or for
the appointment of a receiver, administrator, administrative receiver or
similar officer of it or of any or all of its assets or revenues.
(c) The Notes. The Offered Notes have been duly authorized by the
Issuer and, when duly executed, authenticated, issued and delivered as provided
in the Issuer Trust Deed and the Paying Agent and Agent Bank Agreement and paid
for as provided herein, will be duly and validly issued and outstanding and
will constitute valid and legally binding obligations of the Issuer enforceable
against the Issuer in accordance with their terms, except as enforceability may
be limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability (collectively, the ENFORCEABILITY EXCEPTIONS) and the Issuer
Trust Deed has been duly qualified under the Trust Indenture Act.
(d) Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Issuer.
(e) Legal Agreements. Each of the Legal Agreements to which the Issuer
is a party will be duly authorized by the Issuer on or prior to the Closing
Date and when duly executed and delivered in accordance with its terms by each
of the parties thereto, will constitute a valid and legally binding agreement
of the Issuer enforceable against the Issuer in accordance with its terms,
subject to the Enforceability Exceptions.
(f) Descriptions of Legal Agreements. Each Legal Agreement conforms in
all material respects to the description thereof contained in the Prospectus.
(g) No Violation or Default. The Issuer is not (i) in violation of its
Memorandum and Articles of Association; (ii) in default in any material
respect, and no event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in its Memorandum and Articles of
Association or in any agreement or instrument to which the Issuer is a party or
by which the Issuer is bound or to which any of the property or assets of the
Issuer is subject; or (iii) in violation of any applicable law or statute or
any judgment, decree, authorisation, order, license, rule or regulation of any
court or governmental agency or any other body or person having jurisdiction
over the Issuer, or any of its properties (ISSUER GOVERNMENTAL
10
AUTHORITY), except, in the case of clauses (ii) and (iii) above, for any such
default or violation that would not, individually or in the aggregate, have an
Issuer Material Adverse Effect.
(h) No Conflicts with Existing Instruments. The execution, delivery
and performance by the Issuer of each of the Legal Agreements, the issuance and
sale of the Offered Notes on the terms set forth in this Agreement and
compliance by the Issuer with the terms thereof will not (i) conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Issuer (other than those created
in, or imposed by, the Legal Agreements themselves) pursuant to, any indenture,
mortgage, trust deed, loan agreement or other agreement or instrument to which
the Issuer is a party or by which the Issuer is bound or to which any of the
property or assets of the Issuer is subject, (ii) result in any violation of
the provisions of the Memorandum and Articles of Association of the Issuer or
(iii) result in the violation of any applicable law or statute or any judgment,
decree, license, authorisation, rule, notification, order or regulation of any
Issuer Governmental Authority, except, in the case of clauses (i) and (iii)
above, for any such conflict, breach or violation that would not, individually
or in the aggregate, have an Issuer Material Adverse Effect.
(i) No Consents Required. No consent, license, notification, approval,
authorization, order, registration or qualification of or with any Issuer
Governmental Authority is required for the execution, delivery and performance
by the Issuer of each of the Legal Agreements, the issuance and sale of the
Offered Notes and compliance by the Issuer with the terms thereof and the
consummation of the transactions contemplated by the Legal Agreements, except
for (i) the registration of the Offered Notes under the Securities Act, and
such consents, approvals, authorizations, orders and registrations or
qualifications as may be required under applicable state securities, Blue Sky
or similar laws in connection with the purchase and distribution of the Offered
Notes by the Underwriters and (ii) those which have been, or will prior to the
Closing Date be taken, fulfilled or done, and which are, or will on the Closing
Date be, in full force and effect, other than registration required under
Section 395 of the UK Companies ▇▇▇ ▇▇▇▇.
(j) Legal Proceedings. Except as described in the Prospectus, there
are no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Issuer is a party or to which any property of
the Issuer is the subject that, individually or in the aggregate, if determined
adversely to the Issuer, could reasonably be expected to have an Issuer
Material Adverse Effect; to the best knowledge of the Issuer, no such
investigations, actions, suits or proceedings are threatened by any Issuer
Governmental Authority or threatened by others.
(k) Investment Company Act. The Issuer is not and, after giving effect
to the offering and sale of the Offered Notes and the application of the
proceeds thereof as described in the Prospectus, will not be an "investment
company" or an entity "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, the INVESTMENT COMPANY
ACT).
(l) Representations in Legal Agreements. The representations and
warranties of the Issuer contained in the Legal Agreements are true and correct
in all material respects.
11
(m) Taxation. Save as described in the legal opinions referred to in
Section 4(g) of this Agreement, no stamp or other similar duty is assessable or
payable in the United Kingdom, and no withholding or deduction for any taxes,
duties, assessments or governmental charges of whatever nature is imposed or
made for or on account of any income, registration, transfer or turnover taxes,
customs or other duties or taxes of any kind in connection with the
authorization, execution or delivery of the Legal Agreements or with the
authorization, issue, sale or delivery of the Notes and (except as disclosed in
the Prospectus) the performance of the Issuer's, Funding 1's and/or, as the
case may be, the Mortgages Trustee's obligations under the Legal Agreements and
the Notes. This warranty does not apply to any United Kingdom corporation tax
which may be levied, collected, withheld or assessed in connection with the
authorization, execution or delivery of the Legal Agreements or with the
authorization, issue, sale or delivery of the Notes.
(n) Events of Default. No event has occurred or circumstance arisen
which, had the Notes already been issued, would (whether or not with the giving
of notice and/or the passage of time and/or the fulfillment of any other
requirement) constitute an Event of Default as set out in the Conditions of the
Notes.
(o) No Subsidiaries. The Issuer has no subsidiaries or subsidiary
undertakings within the meanings of Sections 258 and 736 of the UK Companies
▇▇▇ ▇▇▇▇.
(p) No Activities. The Issuer has not engaged in any activities since
its incorporation other than (i) those incidental to any registration or
re-registration as a public limited company under the UK Companies Acts 1985
and 1989 and various changes to its name, directors, secretary, registered
office, Memorandum and Articles of Association; (ii) the authorization,
execution and, in certain cases, amendment of the Legal Agreements to which it
is a party; (iii) the activities referred to or contemplated in the Legal
Agreements to which it is a party or in the Prospectus and (iv) the
authorization and issue by it of the Notes. The Issuer has not prepared any
accounts and has neither paid any dividends nor made any distributions since
the date of its incorporation.
(q) Listing Rules. Prior to the delivery of the Reg S Prospectus to
the Registrar of Companies in England and Wales, the Reg S Prospectus (i) has
been approved by or on behalf of the competent authority as listing particulars
(each as defined in the FSMA) and (ii) complies with the listing rules, as set
out under Part VI of the FSMA.
(r) No Prior Security. Save as set out in any of the Legal Agreements,
there exists no mortgage, lien, pledge, assignation or other charge on or over
the assets of the Issuer and, other than the Legal Agreements, the Issuer has
not entered into any indenture or trust deed.
(s) Security for the Notes. Without prejudice to the Reservations as
to matters of English law only in the ▇▇▇▇▇ & ▇▇▇▇▇ LLP legal opinion and Scots
law only in the Shepherd + Wedderburn legal opinion as to the enforcement of
security (and, for the avoidance of doubt, excluding from such Reservations the
factual assumptions on which they are made (including the assumptions as to the
solvency of the Issuer)), which Reservations the Issuer represents are not
material in the context of the Transaction (except to the extent disclosed in
the Prospectus), but subject to Reservations 4 and 6 of the ▇▇▇▇▇ & ▇▇▇▇▇ LLP
legal opinion, the Issuer has created the following security interests in the
Issuer Deed of Charge: (i) an assignment by way of first fixed security of the
Issuer's right, title, interest and benefit in the Global Intercompany Loan
Agreement, the Swap Agreements, the Funding 1 Deed of
12
Charge, the Issuer Trust Deed, the Paying Agent and Agent Bank Agreement, the
Issuer Cash Management Agreement, the Issuer Corporate Services Agreement, the
Issuer Bank Account Agreement, the Issuer Post-Enforcement Call Option
Agreement and any other of the Legal Agreements to which the Issuer is a party;
(ii) an assignment by way of first ranking fixed charge (which may take effect
as a floating charge) over the Issuer Bank Accounts; (iii) a first ranking
fixed charge (which may take effect as a floating charge) over the Issuer's
right, title, interest and benefit to any authorized investments made with
moneys standing to the credit of any of the Issuer Bank Accounts; and (iv) a
first floating charge over the whole of the assets and undertaking of the
Issuer which are not otherwise effectively subject to any fixed charge or
assignment by way of security but extending over all of the Issuer's Scottish
assets.
(t) United States Income Tax. The Issuer has not engaged in any
activities in the United States (directly or through agents), derived any
income from United States sources as determined under the U.S. Internal Revenue
Code of 1986, as amended (the CODE), and has not held nor currently holds any
property which would cause it to be engaged or deemed to be engaged in a trade
or business within the United States as determined under the Code.
(II) Representations and Warranties of Funding 1 and the Mortgages
Trustee. Each of Funding 1 and the Mortgages Trustee severally represents and
warrants (in respect of itself only) to, and agrees with, the Underwriters, and
each of them that:
(a) Registration Statement and Prospectus. Funding 2 has filed with
the Commission the Registration Statement. The Registration Statement has been
declared effective by the Commission under the Securities Act; and no order
suspending the effectiveness of the Registration Statement has been issued by
the Commission and no proceeding for that purpose has been instituted or, to
the best knowledge of Funding 2, threatened by the Commission; the Registration
Statement, at the time it became effective, any post-effective amendment
thereto, at the time it became effective, and the Prospectus, as of the date of
the Prospectus Supplement, complied and on the Closing Date, the Prospectus
(and any amendments or supplements thereto), will comply in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the Trust Indenture Act and the respective rules thereunder; the
Registration Statement, as of the applicable effective date as to each part of
the Registration Statement and any amendment thereto pursuant to Rule
430B(f)(2) under the Securities Act, did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; the Prospectus, as of
the date of the Prospectus Supplement, did not, and on the Closing Date will
not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; (provided that
Funding 1 and the Mortgages Trustee make no representation and warranty with
respect to any statements or omissions made: (i) in that part of the
Registration Statement which constitutes the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Note Trustee or
(ii) in reliance upon and in conformity with information relating to any
Underwriter furnished to the Issuer in writing by or on behalf of any
Underwriter through the Representatives expressly for use in the Registration
Statement and the Prospectus and any amendment or supplement thereto and the
conditions to the use by Funding 2 of a registration statement on Form S-3
under the Securities Act, as set forth in the General Instructions to Form S-3,
have been satisfied).
(b) Incorporation and Good Standing. Each of Funding 1 and the
Mortgages Trustee has been duly incorporated and is a validly existing
organization in good standing
13
under the laws of its jurisdiction of organization, is duly qualified to do
business in England and Wales (with respect to Funding 1) and Jersey (with
respect to the Mortgages Trustee) and has full right, power and authority
necessary to conduct its business as described in the Prospectus, except where
the failure to be so qualified or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the
transactions contemplated herein or in the Legal Agreements (a FUNDING 1
MATERIAL ADVERSE EFFECT or a MORTGAGES TRUSTEE MATERIAL ADVERSE EFFECT, as the
case may be). Neither has taken any corporate action nor (to the best of its
knowledge and belief) have any other steps been taken or legal proceedings been
started or threatened against it for its winding-up, dissolution or
reorganization or for the appointment of a receiver, administrator,
administrative receiver or similar officer of it or of any or all of its assets
or revenues.
(c) Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by each of Funding 1 and the Mortgages Trustee.
(d) Legal Agreements. Each of the Legal Agreements to which Funding 1
or the Mortgages Trustee is a party will be duly authorized by each of Funding
1 and the Mortgage Trustee on or prior to the Closing Date and when duly
executed and delivered in accordance with its terms by each of the parties
thereto, will constitute a valid and legally binding agreement of Funding 1 or
the Mortgages Trustee, as the case may be, enforceable against Funding 1 or the
Mortgages Trustee, as the case may be, in accordance with its terms, subject to
the Enforceability Exceptions.
(e) Descriptions of Legal Agreements. Each Legal Agreement to which
Funding 1 or the Mortgages Trustee is a party conforms in all material respects
to the description thereof contained in the Prospectus.
(f) No Violation or Default. Neither Funding 1 nor the Mortgages
Trustee is (i) in violation of its Memorandum and Articles of Association or
similar organizational documents; (ii) in default in any material respect, and
no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in its Memorandum and Articles of Association
or in any other agreement or instrument to which Funding 1 or the Mortgages
Trustee, as the case may be, is a party or by which Funding 1 or the Mortgages
Trustee, as the case may be, is bound or to which any of the property or assets
of Funding 1 or the Mortgages Trustee, as the case may be, is subject; or (iii)
in violation of any applicable law or statute or any judgment, decree, order,
authorisation, license, rule or regulation of any court or governmental agency
or any other body or person having jurisdiction over Funding 1 or the Mortgages
Trustee, as the case may be, or any of its properties (FUNDING 1 GOVERNMENTAL
AUTHORITY or MORTGAGES TRUSTEE GOVERNMENTAL AUTHORITY, as the case may be),
except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Funding 1
Material Adverse Effect or a Mortgages Trustee Material Adverse Effect, as the
case may be.
(g) No Conflicts with Existing Instruments. The execution, delivery
and performance by each of Funding 1 and the Mortgages Trustee of each of the
Legal Agreements to which each is a party and compliance by each of them with
the terms thereof will not (i) conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of Funding 1 or the Mortgages Trustee (other than those created in, or
imposed by, the Legal Agreements themselves), as the case may be,
14
pursuant to, any indenture, mortgage, trust deed, loan agreement or other
agreement or instrument to which Funding 1 or the Mortgages Trustee, as the
case may be, is a party or by which Funding 1 or the Mortgages Trustee, as the
case may be, is bound or to which any of the property or assets of Funding 1 or
the Mortgages Trustee, as the case may be, is subject, (ii) result in any
violation of the provisions of the Memorandum and Articles of Association of
Funding 1 or the Mortgages Trustee, as the case may be, or (iii) result in the
violation of any applicable law or statute or any judgment, decree, license,
authorisation, rule, notification, order or regulation of any Funding 1
Governmental Authority or Mortgages Trustee Governmental Authority, as the case
may be, except, in the case of clauses (i) and (iii) above, for any such
conflict, breach or violation that would not, individually or in the aggregate,
have a Funding 1 Material Adverse Effect or a Mortgages Trustee Material
Adverse Effect, as the case may be.
(h) No Consents Required. No consent, license, notification, approval,
authorization, order, registration or qualification of or with any Funding 1
Governmental Authority or Mortgages Trustee Governmental Authority, as the case
may be, is required for the execution, delivery and performance by Funding 1 or
the Mortgages Trustee of each of the Legal Agreements and compliance by Funding
1 or the Mortgages Trustee, as the case may be, with the terms thereof and of
the Notes and the consummation of the transactions contemplated by the Legal
Agreements, except for (i) the registration of the Offered Notes under the
Securities Act, and such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under applicable state
securities Blue Sky or similar laws in connection with the purchase and
distribution of the Offered Notes by the Underwriters and (ii) those which have
been, or will prior to the Closing Date be, taken, fulfilled or done, and which
are, or will on the Closing Date be, in full force and effect, other than
registration under Section 395 of the UK Companies ▇▇▇ ▇▇▇▇.
(i) Legal Proceedings. Except as described in the Prospectus, there
are no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which either Funding 1 or the Mortgages Trustee is a
party or to which any property of either Funding 1 or the Mortgages Trustee is
the subject that, individually or in the aggregate, if determined adversely to
either Funding 1 or the Mortgages Trustee, as the case may be, could reasonably
be expected to have a Funding 1 Material Adverse Effect or a Mortgages Trustee
Material Adverse Effect, as the case may be; to the best knowledge of Funding 1
or the Mortgages Trustee, as the case may be, no such investigations, actions,
suits or proceedings are threatened by any Funding 1 Governmental Authority or
Mortgages Trustee Governmental Authority, as the case may be, or threatened by
others.
(j) Investment Company Act. Neither Funding 1 nor the Mortgages
Trustee is and, after giving effect to the offering and sale of the Offered
Notes and the application of the proceeds thereof as described in the
Prospectus, will be an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act.
(k) Representations in Legal Agreements. The representations and
warranties of each of Funding 1 and the Mortgages Trustee contained in the
Legal Agreements are true and correct in all material respects.
(l) Events of Default. With respect to Funding 1, no event has
occurred or circumstance arisen which, had the Global Intercompany Loan
Agreement already been entered into, would (whether or not with the giving of
notice
15
and/or the passage of time and/or the fulfillment of any other requirement)
constitute an Event of Default as set out in the Global Intercompany Loan
Agreement.
(m) No Subsidiaries. Neither Funding 1 nor the Mortgages Trustee has
any subsidiaries or subsidiary undertakings within the meanings of Sections 258
and 736 of the Companies ▇▇▇ ▇▇▇▇.
(n) No Activities. Neither Funding 1 nor the Mortgages Trustee has
engaged in any activities since its incorporation other than (i) those
incidental to any registration or re-registration as private limited companies
under the laws of England and Wales (with respect to Funding 1) and Jersey
(with respect to the Mortgages Trustee) and (if any) various changes to its
name, directors, secretary, registered office, Memorandum and Articles of
Association; (ii) the authorization, execution and, in certain cases, amendment
of the Legal Agreements to which it is a party; (iii) the activities referred
to or contemplated in the Legal Agreements to which it is a party or in the
Prospectus; (iv) the activities undertaken in connection with the establishment
of the Mortgages Trust pursuant to the Mortgages Trust Deed; (v) the filing of
notification as a "data controller" by the Mortgages Trustee and Funding 1
under the Data Protection Act 1998 (the DPA), the registration of the Mortgages
Trustee as a data user under the Data Protection (Jersey) Law 1987 and the
application by the Mortgages Trustee and Funding 1 for a standard license under
the Consumer Credit ▇▇▇ ▇▇▇▇; and (vi) any activities in connection with or
incidental to the issue of notes by the Funding Issuers and the issue of the
Notes by the Master Issuer. The Mortgages Trustee has not prepared any accounts
and has neither paid any dividends nor made any distributions since the date of
its incorporation.
(o) No Prior Security. Save as set out in any of the Legal Agreements,
there exists no mortgage, lien, pledge, assignation, or other charge on or over
the assets of Funding 1 and, other than the Legal Agreements, Funding 1 has not
entered into any indenture or trust deed.
(p) Security for the Intercompany Loan. Without prejudice to the
Reservations as to matters of English law only in the ▇▇▇▇▇ & Overy LLP legal
opinion and Scots law only in the Shepherd + Wedderburn legal opinion as to the
enforcement of security (and, for the avoidance of doubt, excluding from such
Reservations the factual assumptions on which they are made (including the
assumptions as to the solvency of Funding 1)), which Reservations Funding 1
represents are not material in the context of the Transaction (except to the
extent disclosed in the Prospectus), but subject to Reservations 4 and 6 of the
▇▇▇▇▇ & ▇▇▇▇▇ LLP legal opinion, Funding 1 has created the following security
interests in the Funding 1 Deed of Charge: (i) an assignment by way of first
fixed security (which may take effect as a floating charge) of Funding 1's
share of the Trust Property (as defined in the Mortgages Trust Deed); (ii) an
assignment by way of first fixed security of all of Funding 1's right, title,
interest and benefit in the Mortgage Sale Agreement, the Mortgages Trust Deed,
the Global Intercompany Loan Agreement, the Start-up Loan Agreement, the
Funding 1 Guaranteed Investment Contract, the Funding 1 Corporate Services
Agreement, the Cash Management Agreement, the Bank Account Agreement and any
other of the Legal Agreements to which Funding 1 is a party; (iii) an
assignment by way of first ranking fixed security (which may take effect as a
floating charge) over Funding 1's right, title, interest and benefit in the
Funding 1 Bank Accounts; (iv) a first ranking fixed charge (which may take
effect as a floating charge) of Funding 1's right, title, interest and benefit
in all Authorized Investments purchased with moneys standing to the credit of
the Funding 1 Bank Accounts; and (v) a first floating charge over all the
assets and the undertaking of Funding 1 which are not effectively subject to a
fixed charge or assignment by way of security.
16
(q) United States Income Tax. Neither Funding 1 nor the Mortgages
Trustee has engaged in any activities in the United States (directly or through
agents), derived any income from United States sources as determined under the
Code, and has held nor currently holds any property which would cause it to be
engaged or deemed to be engaged in a trade or business within the United States
as determined under the Code.
(r) Beneficial Owner. (i) The Mortgages Trustee holds and will
continue to hold the equitable title to the English Portfolio (excluding Loans
and Related Security which have been redeemed or which, in accordance with the
Mortgage Sale Agreement, have been re-assigned to the Seller since the relevant
Assignment Date) on a bare trust for the benefit of Funding 1, Funding 2 and
Halifax as tenants in common absolutely; and (ii) the Mortgages Trustee is the
sole beneficiary of the Scottish Trust Property as defined in and in terms of
the relevant Scottish Declaration of Trust and holds and will continue to hold
all the rights and interest of the sole beneficiary thereunder on a bare trust
for the benefit of Funding 1; Funding 2 and Halifax as tenants in common
absolutely upon the terms of the Mortgages Trust Deed.
(III) Representations and Warranties of Halifax. Halifax
represents and warrants to, and agrees with, the Underwriters, and each of them
that:
(a) Registration Statement and Prospectus. The Registration Statement,
at the time it became effective, any post-effective amendment thereto, at the
time it became effective, and the Prospectus, as of the date of the Prospectus
Supplement, complied and on the Closing Date, the Prospectus (and any
amendments or supplements thereto), will comply in all material respects with
the applicable requirements of the Securities Act, the Exchange Act and the
Trust Indenture Act and the respective rules thereunder; the Registration
Statement, as of the applicable effective date as to each part of the
Registration Statement and any amendment thereto pursuant to Rule 430B(f)(2)
under the Securities Act, did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Prospectus did
not, and on the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that Halifax makes no representation and
warranty with respect to any statements or omissions made: (i) in that part of
the Registration Statement which constitutes the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Note Trustee or
(ii) in reliance upon and in conformity with information relating to any
Underwriter furnished to the Issuer in writing by or on behalf of any
Underwriter through the Representatives expressly for use in the Registration
Statement and the Prospectus and any amendment or supplement thereto.
(b) Organization and Good Standing. Halifax has been duly organized
and is a validly existing organization in good standing under the laws of its
jurisdiction of organization, is duly qualified to do business in England and
Wales and has full right, power and authority necessary to conduct its business
as described in the Prospectus, except where the failure to be so qualified or
have such power or authority would not, individually or in the aggregate, have
a material adverse effect on the transactions contemplated herein or in the
Legal Agreements (a HALIFAX MATERIAL ADVERSE EFFECT). Halifax has not taken any
corporate action nor (to the best of its knowledge and belief) have any other
steps been taken or legal proceedings been started or threatened against it for
its winding-up, dissolution or reorganization (other than any solvent
reorganization, including that arising from the unification of the banking
licences held by members of the Halifax group) or for the
17
appointment of a receiver, administrator, administrative receiver or similar
officer of it or of any or all of its assets or revenues.
(c) Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by Halifax.
(d) Legal Agreements. Each of the other Legal Agreements to which
Halifax is a party will be duly authorized by Halifax on or prior to the
Closing Date and on the Closing Date will constitute valid and legally binding
obligations of Halifax enforceable against Halifax in accordance with their
terms, subject to the Enforceability Exceptions.
(e) No Conflicts with Existing Instruments. The execution, delivery
and performance by Halifax of this Agreement and the other Legal Agreements to
which Halifax is a party and compliance by Halifax with the terms hereof and
thereof will not, and each assignment of the English Loans and their Related
Security and each Scottish Declaration of Trust in respect of the Scottish
Loans and their Related Security did not upon the relevant Assignment Date, (i)
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge, security or encumbrance upon any property or assets of Halifax
(other than those created in, or imposed by, the Legal Agreements themselves)
pursuant to, any indenture, mortgage, trust deed, loan agreement or other
agreement or instrument to which Halifax is a party or by which Halifax is
bound or to which any of the property or assets of Halifax is subject, (ii)
result in any violation of the provisions of the Memorandum and Articles of
Association of Halifax or (iii) result in the violation of any applicable law
or statute or any judgment, license, authorisation, rule, notification, decree,
order or regulation of any court or governmental agency or any other body or
person having jurisdiction over Halifax or any of its properties (HALIFAX
GOVERNMENTAL AUTHORITY), except, in the case of clauses (i) and (iii) above,
for any such conflict, breach or violation that would not, individually or in
the aggregate, have a Halifax Material Adverse Effect.
(f) All Consents Obtained. All consents, approvals, authorizations,
licenses, notifications, orders, registrations and qualifications of all
Halifax Governmental Authorities required by Halifax for or in connection with
the execution, delivery and performance by Halifax of this Agreement and the
other Legal Agreements to which it is, or will be, on or prior to the Closing
Date, a party, have been obtained and are in full force and effect, including,
without limitation, the receipt of a standard license under the Consumer Credit
▇▇▇ ▇▇▇▇ and registration under the DPA.
(g) Legal Proceedings. There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which Halifax is a
party or to which any property of Halifax is the subject that, individually or
in the aggregate, if determined adversely to Halifax, could reasonably be
expected to have a material and adverse affect on (i) Halifax's performance of
its obligations under, or the validity of, this Agreement or (ii) Halifax's
title to the Related Security or the value of any security therefor or
Halifax's right (in so far as it relates to English Loans) to assign such
Related Security and such English Loans to the Mortgages Trustee or (in so far
as it relates to Scottish Loans) to assign or to create a trust under the
relevant Scottish Declaration of Trust in respect of any such Related Security
and such Scottish Loans in favour of the Mortgages Trustee, and to the best
knowledge of Halifax and save as already disclosed in the Prospectus, no such
investigations, actions, suits or proceedings are threatened by any Halifax
Governmental Authority or threatened by others.
18
(h) Beneficial Owner. (i) The Mortgages Trustee holds and will
continue to hold the equitable title to the English Portfolio (excluding Loans
and Related Security which have been redeemed or which, in accordance with the
Mortgage Sale Agreement, have been re-assigned to the Seller since the relevant
Assignment Date) on a bare trust for the benefit of Funding 1, Funding 2 and
Halifax as tenants in common absolutely; (ii) the Mortgages Trustee is the sole
beneficiary of the Scottish Trust Property as defined in and in terms of the
relevant Scottish Declaration of Trust and holds and will continue to hold all
the rights and interest of the sole beneficiary thereunder on a bare trust for
the benefit of Funding 1, Funding 2 and Halifax as tenants in common absolutely
upon the terms of the Mortgages Trust Deed; and (iii) Halifax is the sole
holder of all right, title and interest in respect of the Scottish Portfolio
(excluding Loans and Related Security which were comprised in the Scottish
Portfolio but which have been redeemed or which, in accordance with the
Mortgage Sale Agreement, have been released from the relevant Scottish
Declaration of Trust since the relevant Assignment Date) and holds such right,
title and interest as sole trustee on and subject to the relevant Scottish
Declaration of Trust on trust for the benefit of the Mortgages Trustee
absolutely.
(i) Legal Agreements. The representations and warranties given by
Halifax in the Mortgage Sale Agreement to which is it is a party are true and
accurate in all material respects as when stated to be made.
3. Further Agreements of the Issuer, Funding 1, the Mortgages Trustee
and Halifax. The Issuer and, where expressly provided, Funding 1, the Mortgages
Trustee and Halifax severally covenants to, and agrees each for itself with,
the Underwriters and each of them that:
(a) Filing of Prospectus. Funding 2 will file the final Prospectus
(including any amendments or supplements thereto) with the Commission within
the time periods specified by Rule 424(b) under the Securities Act; and the
Issuer will furnish copies of the Prospectus (including any amendments or
supplements thereto made on or before the date of this Agreement) to the
Underwriters in London prior to 10:00 A.M., London time, on the business day
next succeeding the date of this Agreement (or such other time as agreed
between the Issuer and the Representatives) in such quantities as the
Representatives may reasonably request.
(b) Delivery of Copies. The Issuer will deliver (i) to the
Representatives, one copy of the Registration Statement as originally filed and
each amendment thereto (including any post-effective amendment to the
Registration Statement), in each case including all exhibits and consents filed
therewith; and (ii) to each Underwriter (A) a conformed copy of the
Registration Statement as originally filed and each amendment thereto, in each
case including all exhibits and consents filed therewith and (B) during the
Prospectus Delivery Period, as many copies of the Prospectus (including all
amendments and supplements thereto made on or before the date of this
Agreement) as the Representatives may reasonably request. As used herein, the
term PROSPECTUS DELIVERY PERIOD means such period of time after the first date
of the public offering of the Offered Notes as in the opinion of counsel for
the Underwriters a prospectus relating to the Offered Notes is required by law
to be delivered in connection with sales of the Offered Notes by any
Underwriter or dealer.
(c) Amendments or Supplements. Before filing any amendment or
supplement to the Registration Statement or the Prospectus prior to the Closing
Date, the Issuer, Funding 1 and the Mortgages Trustee will furnish to the
Representatives and counsel for the
19
Underwriters a copy of the proposed amendment or supplement for review and will
not file any such proposed amendment or supplement to which the Representatives
reasonably object.
(d) Commission Filings. Funding 2 will file, in a timely manner, with
the Commission during the Prospectus Delivery Period, all documents (and any
amendments to previously filed documents) required to be filed by them pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act within the time
periods required by the Exchange Act and the rules and regulations thereunder,
provided that Funding 2 will not file any such document or amendment unless
Funding 2 has furnished the Representatives with copies for their review prior
to filing and none of them will file any such proposed document or amendment
until the Underwriters have been consulted and given a reasonable opportunity
to comment on such document or amendment.
(e) Notice to the Representatives. During the Prospectus Delivery
Period, the Issuer will, and if the Issuer fails to do so, Halifax shall,
advise the Representatives promptly, and confirm such advice in writing, (i)
when any post-effective amendment to the Registration Statement becomes
effective; (ii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or the
receipt of any comments from the Commission relating to the Registration
Statement or any other request by the Commission for any additional
information; (iii) of the issuance by the Commission of any order suspending
the effectiveness of the Registration Statement or preventing or suspending the
use of the Prospectus or the initiation or threatening of any proceeding for
that purpose or of any challenge to the accuracy or adequacy of any document
incorporated by reference in the Prospectus; (iv) of any downgrading in the
rating of any debt securities of Halifax by ▇▇▇▇▇'▇ Investors Service (MOODY'S)
or Standard & Poor's Ratings Services, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. (STANDARD & POOR'S) or Fitch Ratings Ltd. (FITCH) or if any such
organization shall have informed Halifax or HBOS plc or made any public
announcement that any such organization has under surveillance or review its
rating of any debt securities of Halifax (other than an announcement with
positive implications of a possible upgrading, and no implication of a possible
downgrading of such rating) as soon as such announcement is made or Halifax is
informed; and (v) of the receipt by the Issuer of any notice with respect to
any suspension of the qualification of the Offered Notes for offer and sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Issuer will use its best efforts to prevent the issuance of
any such order suspending the effectiveness of the Registration Statement,
preventing or suspending the use of the Prospectus or suspending any such
qualification of the Offered Notes and, if issued, will obtain as soon as
possible the withdrawal thereof.
(f) Ongoing Compliance of the Prospectus. If during the Prospectus
Delivery Period (i) any event shall occur as a result of which it is necessary
to amend or supplement the Prospectus such that the Prospectus will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a potential
purchaser, not misleading or (ii) it is necessary to amend or supplement the
Prospectus to comply with US law, the Issuer will promptly notify the
Underwriters thereof and forthwith prepare and, subject to paragraph (d) above,
file with the Commission and furnish to the Underwriters, such amendments or
supplements to the Prospectus as may be necessary so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances existing when the Prospectus is delivered to a potential
purchaser, be misleading or so that the Prospectus will comply with US law.
20
(g) Blue Sky Compliance. The Issuer will cooperate with the
Underwriters to qualify the Offered Notes for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the applicable
Representatives shall reasonably request and will continue such qualifications
in effect so long as may be reasonably required for distribution of the Offered
Notes and to file such statements and reports as may be required by the laws of
each jurisdiction in which the Offered Notes have been qualified as above;
provided that the Issuer shall not be required to (i) qualify as a foreign
corporation or other entity or as a dealer in securities in any such
jurisdiction where it would not otherwise be required to so qualify, (ii) file
any general consent to service of process in such jurisdiction or take any
other action that would subject it to service of process in suits in any
jurisdiction, other than those arising out of the offering or sale of the
Offered Notes in such jurisdiction or (iii) subject itself to taxation in any
such jurisdiction if it is not so subject.
(h) Use of Proceeds. The Issuer will apply the net proceeds from the
sale of the Offered Notes as described in the Prospectus.
(i) Rating Agencies. To the extent, if any, that the ratings provided
with respect to the Offered Notes by the Rating Agencies are conditional upon
the furnishing of documents or the taking of any other action by the Issuer,
the Issuer shall use its best efforts to furnish such documents and take any
other such action.
(j) Notify Change. Each of the Issuer, the Mortgages Trustee, Funding
1 and Halifax, as the case may be, will notify the Underwriters promptly of any
change affecting any of their respective representations, warranties,
covenants, agreements or indemnities in this Agreement at any time prior to
payment of the net underwriting proceeds for the Notes being made to the Issuer
on the Closing Date and will take such steps as may be reasonably requested by
the Representatives to remedy and/or publicize the same.
(k) Official Announcements. Between the date of this Agreement and the
Closing Date (both dates inclusive) none of Halifax, the Issuer, Funding 1 or
the Mortgages Trustee will, without the prior approval of the Representatives
on behalf of the Underwriters (such approval not to be unreasonably withheld or
delayed), make any official announcement which would have a material adverse
effect on the marketability of the Notes (other than an official announcement
which may be required by law or regulation); provided that reasonable notice of
the substance of any such official announcement which may be required by law or
regulation and which may have a material adverse effect on the marketability of
the Offered Notes shall be given to the Representatives as soon as practicable.
(l) Stamp Duty.
(i) The Issuer will pay any stamp duty, issue, registration,
documentary or other taxes of a similar nature and duties that it is
required to pay under the Legal Agreements to which it is a party payable
in the United Kingdom, Belgium, Luxembourg or the United States,
including interest and penalties in connection with the creation, issue,
distribution and offering of the Notes or in connection with the
execution, delivery or enforcement of any of the Legal Agreements to
which it is a party together with any value added, turnover or similar
tax payable in respect of that amount (and references in this Agreement
to such amount shall be deemed to include any such taxes so payable in
addition to it);
21
(ii) Funding 1 will pay any stamp duty, issue, registration,
documentary or other taxes of a similar nature and duties that it is
required to pay under the Legal Agreements to which it is a party payable
in the United Kingdom or the United States, including interest and
penalties in connection with the execution, delivery or enforcement of
any of the Legal Agreements to which it is a party (other than in respect
of the execution, delivery or enforcement of the Mortgages Trust Deed and
any Legal Agreement to which the Issuer is a party) together with any
value added, turnover or similar tax payable in respect of that amount
(and references in this Agreement to such amount shall be deemed to
include any such taxes so payable in addition to it); and
(iii) The Mortgages Trustee will pay any stamp duty, issue,
registration, documentary or other taxes of a similar nature and duties
that it is required to pay under the Legal Agreements to which it is a
party payable in the United Kingdom, Jersey, Channel Islands or the
United States, including interest and penalties in connection with the
execution, delivery or enforcement of the Mortgages Trust Deed (including
any amendment thereto) and the Mortgage Sale Agreement (including any
amendment thereto) (together with any value added, turnover or similar
tax payable in respect of that amount (and references in this Agreement
to such amount shall be deemed to include any such taxes so payable in
addition to it)) but will be promptly reimbursed an amount equal to any
such payments by the Beneficiaries in accordance with the terms of the
Mortgages Trust Deed.
(iv) For the avoidance of doubt, if Funding 1 or the Mortgages
Trustee discharges its obligations to pay any stamp duty, issue,
registration, documentary or other taxes of a similar nature and duties
payable in the United Kingdom, the Channel Islands or the United States,
including interest and penalties in each case as described above
(together, the RELEVANT TAXES), at any time while amounts are outstanding
in respect of the notes issued by the Issuer and/or any new Issuer, then
Funding 1 and/or (as applicable) the Mortgages Trustee will not be
obliged to pay such relevant taxes multiple times (in respect of the same
obligation), in order to meet its obligations under (1) the underwriting
agreements and subscription agreements relating to the Issuer and/or any
new Issuer and (2) paragraphs (ii) and/or (iii) (as applicable) above.
(m) United States Income Tax. Neither the Issuer, Funding 1 nor the
Mortgages Trustee will engage in any activities in the United States (directly
or through agents), nor derive any income from United States sources as
determined under the Code nor 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 the Code.
(n) Payment of Fees, Charges, Costs and Duties.
(i) Without prejudice to the generality of Section 10, the
Issuer will pay all and any fees, charges, costs and duties and any stamp
and other similar taxes or duties that it is required to pay under the
Legal Agreements to which it is a party, including interest and
penalties, arising from or in connection with the creation of the
security for the Notes and the obligations of the Issuer under the Issuer
Trust Deed and for the other amounts to be secured as contemplated by the
Issuer Deed of Charge (as amended by the Issuer Deed of Accession) and
the perfection of such security at any time;
22
(ii) Without prejudice to the generality of Section 10, Funding
1 will pay all and any fees, charges, costs and duties and any stamp and
other similar taxes or duties that it is required to pay under the Legal
Agreements to which it is a party, including interest and penalties,
arising from or in connection with the creation of the security for a
Loan Tranche and for the other amounts to be secured as contemplated by
the Funding 1 Deed of Charge and the perfection of such security at any
time; and
(iii) Without prejudice to the generality of Section 10, the
Mortgages Trustee will pay all and any fees, charges, costs and duties
and any stamp and other similar taxes or duties that it is required to
pay under the Legal Agreements to which it is a party, including interest
and penalties, arising from or in connection with the purchase of the
Related Security (and related property and rights) excluding The Land
Registry, General Register of Sasines or Land Register of Scotland fees
(it being agreed that registration or recording at The Land Registry or
the General Register of Sasines or the Land Register of Scotland of the
transfer of the Related Security to the Mortgages Trustee will not be
applied for except in the circumstances specified in the Servicing
Agreement), but on the basis that the Mortgages Trustee will be
reimbursed such fees, charges, costs and duties and any stamp and other
similar taxes or duties (including interest and penalties) by the
Beneficiaries pursuant to the terms of the Mortgages Trust Deed;
(o) Perform all required actions. On or prior to the Closing Date,
each of Halifax, the Issuer, Funding 1 and the Mortgages Trustee will do all
things reasonably within each of their respective powers and required of each
of them on such date under the terms of the Legal Agreements to which each is a
party.
(p) Review of Related Security. Halifax will deliver to the
Representatives on the date of this Agreement a letter (relating to its review
of the Related Security) dated the date of this Agreement in the agreed form
addressed to Halifax and the Underwriters from KPMG.
(q) Conditions Precedent. The Issuer will use all reasonable
endeavours to procure satisfaction on or before the Closing Date of the
conditions referred to in Section 4 of this Agreement.
(r) Servicing Agreement. The Issuer, Funding 1 and the Mortgages
Trustee will use all reasonable endeavours to procure that Halifax complies
with its obligations under the Servicing Agreement.
(s) Charges and Security Interests.
(i) The Issuer will procure that each of the charges and other
security interests created by or contained in the Issuer Deed of
Accession is registered within all applicable time limits in all
appropriate registers; and
(ii) Funding 1 will procure that each of the charges and other
security interests created by or contained in the Funding 1 Deed of
Charge is registered within all applicable time limits in all appropriate
registers.
(t) Ratings. None of Halifax, the Issuer, Funding 1 or the Mortgages
Trustee will take, or cause to be taken, any action and none of them will
permit any action to be taken
23
which it knows or has reason to believe would result in the Notes not being
assigned on the Closing Date a [ ] rating for the Series [ ] Class [ ]
Issuer Notes.
(u) Legal Agreements. Prior to closing on the Closing Date none of
Halifax, the Issuer, Funding 1 or the Mortgages Trustee will amend the terms of
the executed Legal Agreements, nor execute any of the other Legal Agreements
other than in the agreed form, without the consent of the Representatives (such
consent not to be unreasonably withheld or delayed).
4. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Offered Notes on the Closing Date as provided
herein is subject to the performance by the Issuer, Funding 1, the Mortgages
Trustee and Halifax of their respective obligations hereunder and to the
following additional conditions:
(a) Registration Compliance; No Stop Order. If a post-effective
amendment to the Registration Statement is required to be filed under the
Securities Act, such post-effective amendment shall have become effective, and
the Representatives shall have received notice thereof, before the
determination of the public offering price of the Offered Notes; no order
suspending the effectiveness of the Registration Statement shall be in effect,
and no proceeding for such purpose shall be pending before or threatened by the
Commission; the Prospectus (including any amendments or supplements thereto)
shall have been timely filed with the Commission under the Securities Act and
in accordance with Section 3(b) hereof; and all requests by the Commission for
additional information shall have been complied with.
(b) Representations and Warranties. The representations and warranties
of the Issuer, Funding 1, the Mortgages Trustee and Halifax contained herein
shall be true and correct on the date hereof and on and as of the Closing Date;
the statements of the Issuer, Funding 1, the Mortgages Trustee and Halifax and
their respective officers made in any certificates delivered pursuant to this
Agreement shall be true and correct on and as of the Closing Date; and each of
the Issuer, Funding 1, the Mortgages Trustee and Halifax shall have complied
with all agreements and all conditions to be performed or satisfied on its
respective part hereunder at or prior to the Closing Date.
(c) No Downgrading. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have been publicly announced in the rating
accorded any debt securities or preference shares of, or guaranteed by, Halifax
by any of Standard & Poor's, Moody's or Fitch and (ii) no such organization
shall have publicly announced that it has under surveillance or review (other
than an announcement with positive implications of a possible upgrading), its
rating of any debt securities or preference shares of, or guaranteed by,
Halifax.
(d) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement, no event of a type that (i) renders untrue or
incorrect any of the representations and warranties contained in Section 2
hereof as though the said representations and warranties had been given on the
Closing Date with reference to the facts and circumstances prevailing at that
date or (ii) causes the failure of the Issuer, Funding 1, the Mortgages Trustee
or Halifax to perform each and every covenant to be performed by it pursuant to
the Legal Agreements, the Loans and the Related Security on or prior to the
Closing Date or (iii) involves a material adverse change or any development
involving a prospective material adverse change in the financial or trading
condition of any of the Issuer,
24
Funding 1, the Mortgages Trustee or Halifax shall have occurred or shall exist,
which event or condition is not described in the Prospectus (excluding any
amendment or supplement thereto) and the effect of any of which in the judgment
of the Representatives makes it impracticable to proceed with the offering,
sale or delivery of the Notes on the terms and in the manner contemplated by
this Agreement and the Prospectus or which in the view of the Representatives
has caused a material deterioration in the price and/or value of the Notes.
(e) Officer's Certificate. The Representatives shall have received on
and as of the Closing Date:
(i) a certificate of an executive officer of each of the
Issuer, Funding 1, the Mortgages Trustee and Halifax reasonably
satisfactory to the Representatives confirming that such officer has
carefully reviewed the Prospectus (including any amendments or
supplements thereto) and, to the best knowledge of such officer, the
representations set forth in Section 2(I)(a), 2(II)(a) and 2(III)(a)
hereof are true and correct;
(ii) a certificate of an executive officer of each of the
Issuer, Funding 1, the Mortgages Trustee and Halifax reasonably
satisfactory to the Representatives to the effect set forth in paragraphs
(a), (b) and (c) above and that there has been no adverse change, nor any
development involving a prospective adverse change, in or affecting the
operations, properties, financial condition or prospects of the Issuer,
Funding 1, the Mortgages Trustee or Halifax which is material in the
context of the issue of the Notes;
(iii) a certificate of an executive officer of the Issuer
reasonably satisfactory to the Representatives confirming the solvency of
the Issuer;
(iv) a certificate of an executive officer of Funding 1
reasonably satisfactory to the Representatives confirming the solvency of
Funding 1;
(v) a certificate of an executive officer of the Mortgages
Trustee reasonably satisfactory to the Representatives confirming the
solvency of the Mortgages Trustee;
(vi) a certificate of an executive officer of Halifax reasonably
satisfactory to the Representatives confirming the solvency of Halifax;
and
(vii) a certificate, reasonably satisfactory to the
Representatives, of an executive officer of each Swap Provider (other
than Halifax) in relation to wording in the Prospectus provided by them.
(f) Comfort Letters. On the date of this Agreement, KPMG shall have
furnished to the Representatives, at the request of the Issuer, letters,
including, without limitation, a pool report in respect of agreed upon
procedures in connection with the Halifax mortgage files (with no material
exceptions to the results stated therein), dated the respective dates of
delivery thereof and addressed to the Underwriters, in form and substance
reasonably satisfactory to the Representatives.
(g) Legal Opinions. On or prior to the Closing Date, there having been
delivered to the Issuer, the Underwriters, the Note Trustee and the Security
Trustee copies of opinions
25
and disclosure letters, in form and substance reasonably satisfactory to the
Representatives, the Note Trustee, the Security Trustee and the Rating
Agencies, dated the Closing Date, of:
(i) ▇▇▇▇▇ & Overy LLP, legal advisers as to English law and as
to US law to Halifax, Funding 1 and the Issuer, addressed to Halifax, the
Mortgages Trustee, Funding 1, the Issuer, the Underwriters, the Note
Trustee and the Security Trustee;
(ii) Mourant du Feu & Jeune, legal advisers as to Jersey law to
the Mortgages Trustee, addressed to the Mortgages Trustee, the
Underwriters, the Note Trustee and the Security Trustee;
(iii) Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, legal advisers as to English
law and as to US law to the Underwriters, addressed to the Underwriters;
(iv) In-house legal counsel of each Swap Provider (other than
Halifax), addressed to the Underwriters, the Issuer and Halifax;
(v) Shepherd + Wedderburn, legal advisers to the Issuer and
Halifax as to Scottish law, addressed to Halifax, the Mortgages Trustee,
Funding 1, the Issuer, the Underwriters, the Note Trustee and the
Security Trustee.
(h) Rating Agency Letters. Each Underwriter shall have received copies
of letters from each Rating Agency stating that the Offered Notes are rated as
set forth in Schedule II hereto by the Rating Agencies either without
conditions or subject only to the execution and delivery on or before the
Closing Date of the Legal Agreements and legal opinions in all material
respects in the form in which they shall then have been executed and delivered
on or prior to the Closing Date.
(i) Execution of Legal Agreements and Global Issuer Notes. The
execution and delivery by all parties thereto of the Legal Agreements and the
Global Issuer Notes representing each class of the Offered Notes on or prior to
the Closing Date.
(j) Admission to Trading. The Offered Notes having been admitted to
the Official List maintained by UK Listing Authority and the London Stock
Exchange plc (the STOCK EXCHANGE) having agreed to admission of the Offered
Notes to trading on or about the Closing Date.
(k) Certified Constitutional Documents. On or prior to the Closing
Date, there having been delivered to the Representatives on behalf of the
Underwriters a copy, certified by a duly authorized director or the company
secretary of, as applicable, the Issuer, Funding 1, the Mortgages Trustee and
Halifax of: (i) the Memorandum and Articles of Association of each of the
Issuer, Funding 1, the Mortgages Trustee and Halifax; (ii) the resolution of
the Board of Directors (or committee as appropriate) of each of the Issuer,
Funding 1, the Mortgages Trustee and Halifax authorizing the execution of this
Agreement and the other Legal Agreements and the entry into and performance of
the transactions contemplated thereby; and (iii) in respect of the Issuer, the
resolution of the Board of Directors of the Issuer authorising the issue of the
Notes and the entry into and performance of the transactions contemplated
thereby.
26
(l) Circumstances for Termination. On or prior to the Closing Date, in
the opinion of the Representatives, none of the circumstances described in
Section 7 having arisen.
(m) Other Issues. The Reg S Notes having been or being issued and
subscribed and paid for pursuant to the Subscription Agreement and the
Programme Agreement prior to or contemporaneously with the issue, subscription
and payment for the Offered Notes hereunder.
(n) Mortgage Sale Agreement. All of the steps required by Clause 4 of
the Mortgage Sale Agreement to be taken on or prior to the Closing Date for the
purposes of the sale of the New Portfolio (including, without limitation, the
assignment of the English Loans and their Related Security to the Mortgages
Trustee from Halifax, the creation and effectiveness of the trust in respect of
the Scottish Loans and their Related Security pursuant to the relevant Scottish
Declaration of Trust by Halifax in favour of the Mortgages Trustee and, in each
case, the related rights to be acquired from Halifax pursuant to the Mortgage
Sale Agreement) having been taken.
(o) No Legal Impediment to Issuance. No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any Halifax Governmental Authority that would, as of the Closing
Date, prevent the issuance or sale of the Notes; and no injunction or order of
any federal, state or foreign court shall have been issued that would, as of
the Closing Date, prevent the issuance or sale of the Notes.
(p) Good Standing. The Representatives shall have received on and as
of the Closing Date satisfactory evidence of the good standing of the Mortgages
Trustee in its jurisdiction of organization from the appropriate Governmental
Authorities of such jurisdictions.
(q) Certificate of Note Trustee. The Note Trustee having furnished to
the Representatives a certificate stating that that part of the Registration
Statement which shall constitute the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of the Note Trustee did not or will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(r) Additional Documents. On or prior to the Closing Date, the Issuer,
Funding 1, the Mortgages Trustee and Halifax shall have furnished to the
Representatives such further certificates and documents as any Representative
may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory in all material respects to counsel for the Underwriters.
If any of the conditions specified in this Section 4 have not been
fulfilled in all material respects when and as provided in this Agreement, or
if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be reasonably satisfactory in all material respects in form
and substance to the Representatives, this Agreement and all obligations of the
Underwriters hereunder may be cancelled at, or at any time prior to, the
Closing Date by the Representatives. Notice of such cancellation shall be
27
given to the Issuer, Funding 1, the Mortgages Trustee and Halifax in writing or
by telephone or facsimile confirmed in writing.
The Representatives, on behalf of the Underwriters, may, in their
discretion, waive compliance with the whole or any part of this Section 4.
5. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Issuer (in respect of
itself only), Funding 1 (in respect of itself only), the Mortgages Trustee (in
respect of itself only) and Halifax (in respect of itself, the Issuer, Funding
1 and the Mortgages Trustee) agree to indemnify and hold harmless each
Underwriter, its affiliates and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, and their respective representatives, directors,
officers, employees and agents, from and against any and all losses, claims,
damages and liabilities (including, without limitation, legal fees and other
expenses reasonably incurred in connection with investigating and defending any
suit, action or proceeding or any claim asserted), joint or several, caused by
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or the Prospectus (or any amendment or supplement
thereto) or any Preliminary Prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and
in conformity with information with respect to which each Underwriter has
agreed to indemnify the Issuer, Funding 1, the Mortgages Trustee and Halifax
pursuant to Section 5(b); provided further, that with respect to any such
untrue statement in or omission from any Preliminary Prospectus, the indemnity
agreement contained in this paragraph (a) shall not inure to the benefit of any
Underwriter to the extent that the sale to the person asserting any such loss,
claim, damage or liability was an initial resale during the Prospectus Delivery
Period by such Underwriter and any such loss, claim, damage or liability of or
with respect to such Underwriter results from the fact that both (i) a copy of
the Prospectus, as amended or supplemented (for purposes of this Section 5, the
FINAL PROSPECTUS) was not sent or given to such person at or prior to the
written confirmation of the sale of such Offered Notes to such person and (ii)
the untrue statement in or omission from such Preliminary Prospectus was
corrected in the Final Prospectus and such corrected Final Prospectus was
delivered to such Underwriter in time so that such delivery of such Final
Prospectus can take place at or prior to the delivery of the written
confirmation of such sale unless, in either case, such failure to deliver the
Final Prospectus was a result of non-compliance by the Issuer, Funding 1, the
Mortgages Trustee or Halifax with the provisions of Section 3 hereof; provided
further that the references to the Registration Statement, the Preliminary
Prospectus and the Prospectus in the first part of this sentence up to but
excluding the first proviso (1) shall exclude the sections therein having the
heading, "The issuer swap providers", (2) shall exclude the Information
Provided by the Managers (as defined in the Subscription Agreement) in the
section having the heading "Subscription and sale", and (3) shall exclude the
Information Provided by the Underwriters (as defined in Section 5(b) below) in
the section having the heading "Underwriting".
No Underwriter or controlling person of any Underwriter shall have any
duty or obligation, whether as fiduciary for any Indemnified Person (as defined
in Section 5(c)) or
28
otherwise, to recover any such payment or to account to any other person for
any amounts paid to it under this Section 5(a).
The foregoing shall be subject to the following:
(i) Any right which at any time the Mortgages Trustee or
Halifax, as the case may be, has under the existing or future laws of
Jersey whether by virtue of the droit de discussion or otherwise to
require that recourse be had to the assets of any other person before any
claim is enforced against such person in respect of the obligations
hereby assumed by such person is hereby abandoned and waived.
(ii) The Mortgages Trustee and Halifax undertake that if at any
time any person indemnified sues the Mortgages Trustee or Halifax, as the
case may be, in respect of any such obligations and the person in respect
of whose obligations the indemnity is given is not sued also, the
Mortgages Trustee or Halifax, as the case may be, shall not claim that
such person be made a party to the proceedings and agrees to be bound by
this indemnity whether or not it is made a party to legal proceedings for
the recovery of the amount due or owing to the person indemnified, as
aforesaid, by the person in respect of whose obligations the indemnity is
given and whether the formalities required by any law of Jersey whether
existing or future in regard to the rights or obligations of sureties
shall or shall not have been observed.
(iii) Any right which the Mortgages Trustee or Halifax, as the
case may be, may have under the existing or future laws of Jersey whether
by virtue of the droit de division or otherwise to require that any
liability under this indemnity be divided or apportioned with any other
person or reduced in any manner whatsoever is hereby abandoned and
waived.
(b) Indemnification of the Issuer, Funding 1, the Mortgages Trustee
and Halifax. Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Issuer, Funding 1 and the Mortgages Trustee, each of
their directors, each of their officers who signed the Registration Statement,
Halifax and each person, if any, who controls the Issuer, Funding 1, Halifax or
the Mortgages Trustee within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the indemnity set forth in
paragraph (a) above, but only with respect to any losses, claims, damages or
liabilities caused by any untrue statement or omission of a material fact or
alleged untrue statement or omission of a material fact made in reliance upon
and in conformity with any information furnished to the Issuer, Funding 1, the
Mortgages Trustee or Halifax in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) or any Preliminary
Prospectus. The Issuer, Funding 1, the Mortgages Trustee and Halifax
acknowledge that the statements set forth under the heading "Underwriting" that
specify (i) the list of Underwriters and their respective participation in the
sale of the Offered Notes, (ii) the sentences related to concessions and
reallowances and (iii) the paragraph related to over-allotment transactions,
short sales, stabilizing transactions, short covering transactions and penalty
bids in any Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters
for inclusion in the Registration Statement, any Preliminary Prospectus or the
Prospectus (such statements being the INFORMATION PROVIDED BY THE
UNDERWRITERS).
29
(c) Notice and Procedures. If any suit, action, proceeding (including
any governmental or regulatory investigation), claim or demand shall be brought
or asserted against any person in respect of which indemnification may be
sought pursuant to either paragraph (a) or (b) above, such person (the
INDEMNIFIED PERSON) shall promptly notify the person against whom such
indemnification may be sought (the INDEMNIFYING PERSON) in writing; provided
that the failure to notify the Indemnifying Person shall not relieve it from
any liability that it may have under paragraph (a) or (b) of this Section 5
except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defences) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve
it from any liability that it may have to an Indemnified Person otherwise than
under paragraph (a) or (b) of this Section 5. If any such proceeding shall be
brought or asserted against an Indemnified Person and it shall have notified
the Indemnifying Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others entitled to indemnification pursuant to this Section 5
that the Indemnifying Person may designate in such proceeding and shall pay the
fees and expenses of such counsel related to such proceeding. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory
to the Indemnified Person; (iii) the Indemnified Person shall have reasonably
concluded that there may be legal defences available to it that are different
from or in addition to those available to the Indemnifying Person; or (iv) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood and agreed that
the Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are incurred. Any such separate firm for any Underwriter, its affiliates
and any control persons of such Underwriter shall be designated in writing by
the Representatives and any such separate firms for the Issuer, Funding 1, the
Mortgages Trustee, each of their directors or officers who signed the
Registration Statement, Halifax and any control persons of the Issuer, Funding
1 and the Mortgages Trustee shall be designated in writing by the Issuer,
Funding 1, the Mortgages Trustee or Halifax, as the case may be. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested that an Indemnifying
Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by the Indemnifying
Person of such request and (ii) the Indemnifying Person shall not have either
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement or objected to such request in writing prior to the
date of such settlement. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder
30
by such Indemnified Person, unless such settlement (x) includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding and (y) does not include any
statement as to or any admission of fault, culpability or a failure to act by
or on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs
(a) and (b) above is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, severally (or, with respect to Halifax, in
respect of itself, the Issuer, Funding 1 and the Mortgages Trustee) agrees to
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Issuer, Funding 1,
the Mortgages Trustee and Halifax on the one hand and the Underwriters on the
other from the offering of the Offered Notes or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Issuer, Funding 1, the Mortgages Trustee and
Halifax on the one hand and the Underwriters on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Issuer, Funding 1, the Mortgages Trustee and
Halifax on the one hand and the Underwriters on the other shall be deemed to be
in the same respective proportions as the net proceeds (before deducting
expenses) received by the Issuer from the sale of the Offered Notes and the
total underwriting discounts, fees and commissions received by the Underwriters
in connection therewith, in each case as set forth in the table on the cover of
the Prospectus, bear to the aggregate offering price of the Offered Notes. The
relative fault of the Issuer, Funding 1, the Mortgages Trustee and Halifax on
the one hand and the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer, Funding 1, the Mortgages
Trustee, Halifax or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) Limitation on Liability. The Issuer, Funding 1, the Mortgages
Trustee, Halifax and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
incurred by such Indemnified Person in connection with any such action or
claim. Notwithstanding the provisions of this Section 5, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total underwriting discounts, fees and commissions received by such
Underwriter with respect to the offering of the Offered Notes exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters'
31
obligations to contribute pursuant to this Section 5 are several in proportion
to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section
5 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any Indemnified Person at law or in equity.
6. Effectiveness of Agreement. This Agreement shall become effective
upon the execution and delivery hereof by the parties hereto.
7. Termination. This Agreement may be terminated by the
Representatives by notice to the Issuer, Funding 1, the Mortgages Trustee and
Halifax, if after the execution and delivery of this Agreement and prior to the
Closing Date:
(a) (i) trading generally shall have been suspended or materially
limited on or by any of the New York Stock Exchange, or the over-the-counter
market; (ii) a general moratorium on commercial banking activities shall have
been declared by federal or New York State authorities; or (iii) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis, either within or outside the
United States, that in the judgment of the Representatives is material and
adverse and makes it impracticable to proceed with the offering, sale or
delivery of the Offered Notes on the terms and in the manner contemplated by
this Agreement and the Prospectus or which in the view of the Representatives
has caused a material deterioration in the price and/or value of the Notes; or
(b) there shall have come to the notice of the Underwriters any breach
of, or any event rendering untrue or incorrect in any material respect, any of
the warranties and representations contained in Section 2 (or any deemed
repetition thereof) or failure to perform any of the Issuer's or Halifax's
covenants or agreements in this Agreement in any material respect; or
(c) any condition specified in Section 4 has not been satisfied or
waived by the Representatives on behalf of the Underwriters; or
(d) the Subscription Agreement is terminated.
If this Agreement shall be terminated pursuant to Clause 7 hereof, this
Agreement shall terminate and be of no further effect and no party hereto shall
be under any liability to any other in respect of this Agreement except that
(a) the Issuer shall remain liable under Clause 10 for the payment of costs and
expenses already incurred or incurred in consequence of such termination, and
if the Issuer shall not pay such costs and expenses, Funding 1, the Mortgages
Trustee and Halifax shall be liable for the payment of such costs and expenses
already incurred or incurred in consequence of such termination for which the
Issuer was liable under Clause 10, (b) the parties hereto shall remain liable
under the indemnity provisions and contribution provisions set forth in Clause
5 and in respect of accrued liabilities and (c) the representations and
agreements of the Underwriters made in Clause 1(h) of this Agreement, which
would have continued in accordance with Clause 12 had the arrangements for the
underwriting and issue of the Notes been completed, shall so continue.
32
8. Listing.
(a) Application for Listing. The Issuer confirms that it has
authorized the Representatives to make or cause to be made at the Issuer's
expense applications on the Issuer's behalf for the Offered Notes to be
admitted to the Official List of the UK Listing Authority and for the Notes to
be admitted to trading on the Stock Exchange.
(b) Supply of Information. The Issuer agrees to supply to the
Representatives for delivery to the UK Listing Authority and the Stock Exchange
copies of the Prospectus (including any amendments or supplements thereto) and
such other documents, information and undertakings as may be required for the
purpose of obtaining such listing.
(c) Maintenance of Listing. The Issuer agrees to use its reasonable
endeavours to maintain a listing of the Offered Notes on the Official List of
the UK Listing Authority and the admission of the Notes to trading on the Stock
Exchange for as long as any of the Offered Notes are outstanding and to pay all
fees and supply all further documents, information and undertakings and publish
all advertisements or other material as may be necessary for such purpose.
However, if such listing becomes impossible, the Issuer will obtain, and will
thereafter use its best endeavours to maintain, a quotation for, or listing of,
the Offered Notes on or by such other stock exchange, competent listing
authority and/or quotation system as is commonly used for the quotation or
listing of debt securities as it may, with the approval of the Representatives
(such approval not to be unreasonably withheld or delayed), decide.
9. Defaulting Underwriter.
(a) If, on the Closing Date, any Underwriter defaults on its
obligation to purchase the Offered Notes that it has agreed to purchase
hereunder, the non-defaulting Underwriters may in their discretion arrange for
the purchase of such Offered Notes by other persons satisfactory to the Issuer
on the terms contained in this Agreement. If, within 36 hours after any such
default by any Underwriter, the non-defaulting Underwriters do not arrange for
the purchase of such Offered Notes, then the Issuer shall be entitled to a
further period of 36 hours within which to procure other persons to purchase
such Offered Notes on such terms. If other persons become obligated or agree to
purchase the Offered Notes of a defaulting Underwriter, either the
non-defaulting Underwriters or the Issuer may postpone the Closing Date for up
to five full business days in order to effect any changes that in the opinion
of counsel for the Issuer or counsel for the Underwriters may be necessary in
the Registration Statement and the Prospectus or in any other document or
arrangement, and the Issuer agrees to promptly prepare any amendment or
supplement to the Registration Statement and the Prospectus that effects any
such changes.
(b) If, after giving effect to any arrangements for the purchase of
the Offered Notes of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriters and the Issuer as provided in paragraph (a) above,
the aggregate principal amount of such Offered Notes that remains unpurchased
does not exceed ten percent of the aggregate principal amount of all the
Offered Notes, then the Issuer shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Offered Notes
that such Underwriter agreed to purchase hereunder plus such Underwriter's pro
rata share (based on the principal amount of Offered Notes that such
Underwriter agreed to purchase hereunder) of the Offered Notes of such
defaulting Underwriter or Underwriters for which such arrangements have not
been made.
33
(c) If, after giving effect to any arrangements for the purchase of
the Offered Notes of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriters and the Issuer as provided in paragraph (a) above,
the aggregate principal amount of such Offered Notes that remains unpurchased
exceeds ten percent of the aggregate principal amount of all the Offered Notes,
or if the Issuer shall not exercise the right described in paragraph (b) above,
then this Agreement shall terminate without liability on the part of the
non-defaulting Underwriters or the Issuer, except that the Issuer will continue
to be liable for the payment of expenses as set forth in Section 10 hereof and
except that the provisions of Section 5 hereof shall not terminate and shall
remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Issuer or any non-defaulting Underwriter for
damages caused by its default.
10. Payment of Expenses.
(a) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Issuer will pay or cause to be
paid the following (together with (i) in respect of taxable supplies made to
the Issuer, any amount in respect of value added tax or similar tax payable in
respect thereof against production of a valid tax invoice and (ii) in respect
of taxable supplies made to a person other than the Issuer, any amount in
respect of Irrecoverable VAT (for the purposes of this Agreement IRRECOVERABLE
VAT means any amount in respect of VAT incurred by a party to the Transaction
Documents (for the purposes of this definition, a RELEVANT PARTY) as part of a
payment in respect of which it is entitled to be indemnified under the relevant
Transaction Documents to the extent that the Relevant Party does not or will
not receive and retain a credit or repayment of such VAT as input tax (as that
expression is defined in section 24(1) of the Value Added Tax Act 1994) for the
prescribed accounting period (as that expression is used in section 25(1) of
the Value Added Tax Act 1994) to which such input tax relates) or similar tax
payable in respect thereof against production of a valid tax invoice): (i) the
costs of the Issuer incident to the authorization, issuance, preparation and
delivery of the Notes; (ii) the costs incident to the preparation, printing and
filing under the Securities Act of the Registration Statement, the Preliminary
Prospectus and the Prospectus (including all exhibits, amendments and
supplements thereto) and the distribution thereof; (iii) the costs of the
preparation and execution of the Legal Agreements and any other relevant
documents and the issue of the Offered Notes and compliance with the Conditions
of the Offered Notes, including the reproduction and distribution thereof; (iv)
the fees and expenses of counsel to the Issuer, Funding 1, the Mortgages
Trustee and the independent accountants; (v) the fees and expenses incurred in
connection with the registration or qualification and determination of
eligibility for investment of the Offered Notes under such United States state
securities, Blue Sky or similar laws as the Representatives may designate and
the preparation, printing and distribution of a Blue Sky Memorandum (including
the related fees and expenses of counsel for the Underwriters); (vi) any fees
charged by Rating Agencies for rating the Offered Notes and annual fees in
connection with such rating or any other rating from the Rating Agencies for
the Offered Notes; (vii) the fees and expenses of the Note Trustee, the
Security Trustee, the US Paying Agent, Agent Bank, any paying agent in
connection with the preparation and execution of the Legal Agreements and any
other relevant documents and the issue of the Offered Notes and compliance with
the Conditions of the Offered Notes (including related fees and expenses of any
counsel to the Note Trustee and the Security Trustee) and the initial fees and
expenses of The Depository Trust Company in relation to the
34
Offered Notes (excluding any such fees and expenses arising as a result of any
transfer of the Offered Notes); (viii) all expenses and application fees
incurred in connection with any filing with the National Association of
Securities Dealers, Inc.; (ix) the fees and expenses payable in connection with
obtaining and maintaining the admission to trading of the Offered Notes on the
Stock Exchange; (x) all out-of-pocket expenses (excluding legal expenses)
incurred by the Representatives on behalf of the Underwriters in connection
with the transactions contemplated hereby; (xi) all expenses incurred by the
Representatives in connection with any "road show" presentation to potential
investors; and (xii) any amount in respect of fees and disbursements of the
Underwriters' counsel, subject to any agreed limit or cap on fees.
(b) The Issuer will reimburse the Underwriters for all amounts in
connection with the issue of the Notes which it has agreed to pay pursuant to
Section 10(a).
(c) For the avoidance of doubt, references to costs and expenses in
this Agreement shall be deemed to include, in addition, references to any
irrecoverable UK value added tax payable in respect of such costs and expenses.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Issuer, Funding 1, the
Mortgages Trustee, each of their officers and directors and any controlling
persons referred to herein, Halifax, the Underwriters, their respective
affiliates and any controlling persons referred to herein, and their respective
successors. Nothing in this Agreement is intended or shall be construed to give
any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. No purchaser of
Offered Notes from any Underwriter shall be deemed to be a successor merely by
reason of such purchase.
12. Survival.
(a) The respective indemnities, rights of contribution,
representations, warranties and agreements of the Issuer, Funding 1, the
Mortgages Trustee, Halifax and the Underwriters contained in this Agreement or
made by or on behalf of the Issuer, Funding 1, the Mortgages Trustee, Halifax
or the Underwriters pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Offered Notes
and shall remain in full force and effect, regardless of any investigation made
by or on behalf of the Issuer, Funding 1, the Mortgages Trustee, Halifax or the
Underwriters.
(b) Save for their respective responsibilities to comply with relevant
representations and warranties set forth herein, neither the Issuer, Funding 1,
the Mortgages Trustee nor Halifax shall have any responsibility in respect of
the legality of the Underwriters or other persons offering and selling the
Notes in any jurisdiction or in respect of the Notes qualifying for sale in any
jurisdiction.
13. Certain Defined Terms. For purposes of this Agreement, (a) except
where otherwise expressly provided, the term AFFILIATE has the meaning set
forth in Rule 405 under the Securities Act; (b) the term BUSINESS DAY (unless
otherwise indicated to be a London Business Day) means any day other than a day
on which banks are permitted or required to be closed in New York City; and (c)
the term SUBSIDIARY has the meaning set forth in Rule 405 under the Securities
Act.
35
14. Miscellaneous.
(a) Authority of the Representatives. Any action by the Underwriters
hereunder may be taken by the Representatives on behalf of the
Underwriters, and any such action taken by the Representatives
shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed
or transmitted and confirmed by any standard form of
telecommunication in accordance with the following information
(all notices to the Underwriters shall be given to the
Representatives):
(i) Representatives
[ ]
(ii) Issuer
▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(Fax: ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇)
Attention: The Directors
(iii) Funding 1
▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(Fax: ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇)
Attention: The Directors
(iv) Mortgages Trustee
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(Fax: ▇▇▇ (▇)▇▇▇▇ ▇▇▇ ▇▇▇)
Attention: The Directors
(v) Halifax
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ (▇▇/▇/▇/▇▇▇)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
(Fax: ▇▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇)
Attention: Head of Mortgage Securitisation
(c) Appointment of Process Agent. Each of the Issuer, Funding 1, the
Mortgages Trustee and Halifax hereby designates and appoints CT Corporation
System, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the PROCESS AGENT), as its
authorized agent, upon whom process may be served in any legal suit, action or
proceeding based on or arising under or in connection with this Agreement, it
being understood that the designation and appointment of
36
the Process Agent as such authorized agent shall become effective immediately
without any further action on the part of the Issuer, Funding 1, the Mortgages
Trustee or Halifax, as applicable. Such appointment shall be irrevocable to the
extent permitted by applicable law and subject to the appointment of a
successor agent in the United States on terms substantially similar to those
contained in this Section 14(c) and reasonably satisfactory to the
Representatives. If the Process Agent shall cease to act as agent for service
of process, the Issuer, Funding 1, the Mortgages Trustee and Halifax shall
appoint, without unreasonable delay, another such agent, and notify the
Representatives of such appointment. Each of the Issuer, Funding 1, the
Mortgages Trustee and Halifax represents to the Underwriters that it has
notified the Process Agent of such designation and appointment and that the
Process Agent has accepted the same in writing and the Issuer, Funding 1, the
Mortgages Trustee and Halifax hereby authorize and direct the Process Agent to
accept such service. Each of the Issuer, Funding 1, the Mortgages Trustee and
Halifax further agree that service of process upon the Process Agent and
written notice of that service to it shall be deemed in every respect effective
service of process upon it in any such legal suit, action or proceeding.
Nothing in this Section 14(c) shall affect the right of any Underwriter or any
person controlling any Underwriter to serve process in any other manner
permitted by law.
(d) Consent to Jurisdiction. Each of the parties hereto submits to the
non-exclusive jurisdiction of the federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
(e) Non Petition and Limited Recourse. Each of the Underwriters agrees
with the Issuer, Funding 1 and the Mortgages Trustee that it shall not, until
the expiry of one year and one day after the payment of all sums outstanding
and owing under the Notes (in respect of the Issuer) and until the expiry of
one year and one day after the payment of all sums outstanding and owing under
any intercompany loan made to Funding 1 by the Issuer or any other company (in
respect of the Mortgages Trustee and Funding 1) take any corporate action or
other steps or legal proceedings for the winding-up, dissolution, arrangement,
reconstruction or re-organisation or for the appointment of a liquidator,
receiver, manager, administrator, administrative receiver or similar officer of
the Issuer, the Mortgages Trustee or Funding 1 or any, or all of, their
respective assets or revenues. To the extent permitted by law, no recourse
under any obligation, covenant or agreement of any person contained in this
Agreement shall be had against any shareholder, officer or director of the
Issuer, Funding 1 or the Mortgages Trustee, by the enforcement of any
assessment or by any legal proceedings, by virtue of any statute or otherwise;
it being expressly agreed and understood that this Agreement is a corporate
obligation of each of the Issuer, Funding 1 and the Mortgages Trustee expressed
to be a party hereto and no personal liability shall attach to or be incurred
by the shareholders, officers, agents or directors of such person as such, or
any of them, under or by reason of any of the obligations, covenants or
agreements of the Issuer, Funding 1 or the Mortgages Trustee contained in this
Agreement, or implied therefrom, and that any and all personal liability for
breaches by such person of any such obligations, covenants or agreements,
either under any applicable law or by statute or constitution, of every such
shareholder, officer, agent or director is hereby expressly waived by each
person expressed to be a party hereto as a condition of and consideration for
the execution of this Agreement.
(f) Foreign Taxes. All payments to be made by the Issuer, Funding 1,
the Mortgages Trustee and Halifax hereunder shall be made without withholding
or deduction for or on account of any present or future taxes, duties or
governmental charges, excluding for
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the purposes of this Section 14(e), (a) any taxes which are payable as a
consequence of any Underwriter having a necessary connection with the relevant
taxing jurisdiction and (b) any income or franchise tax on the overall net
income of such Underwriter imposed by the United States or the State of New
York (all such non-excluded taxes, duties or charges, FOREIGN TAXES), unless
the Issuer, Funding 1, the Mortgages Trustee or Halifax, as applicable, is
compelled by law to deduct or withhold such Foreign Taxes. In that event, the
Issuer, Funding 1, the Mortgages Trustee or Halifax, as applicable, shall pay
such additional amounts as may be necessary in order that the net amounts
received after such withholding or deduction shall equal the amounts that would
have been received if no withholding or deduction had been made.
(g) Judgment Currency. If any judgment or order in any legal
proceeding against any of the Issuer, Funding 1, the Mortgages Trustee or
Halifax is given or made for any amount due hereunder and such judgment or
order is expressed and paid in a currency (the JUDGMENT CURRENCY) other than
United States dollars and there is any variation as between (i) the rate of
exchange (the JUDGMENT RATE) at which the United States dollar amount is
converted into the Judgment Currency for the purpose of such judgment or order,
and (ii) the rate of exchange (the MARKET RATE) at which the person to whom
such amounts is paid (the PAYEE) is able to purchase United States dollars with
the amount of the Judgment Currency actually received by the holder, then the
difference, expressed in United States dollars, between such amount calculated
at the Judgment Rate and such amount calculated at the Market Rate shall be
indemnified (a) if negative by the Issuer, Funding 1, the Mortgages Trustee or
Halifax, as applicable, to the Payee and (b) if positive by the Payee to the
Issuer, Funding 1, the Mortgages Trustee or Halifax, as applicable. The
foregoing indemnity shall constitute a separate and independent obligation of
the Issuer, Funding 1, the Mortgages Trustee, Halifax and/or the Payee, as the
case may be, and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid. The term "rate of exchange" shall include
any premiums and costs of exchange payable in connection with the purchase of,
or conversion into, the relevant currency.
(h) Governing Law. THIS AGREEMENT AND THE OBLIGATIONS OF THE PARTIES
HERETO SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS
RULES THEREOF (OTHER THAN AS CONTAINED IN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).
(i) Counterparts. This Agreement may be signed in counterparts (which
may include counterparts delivered by any standard form of telecommunication),
each of which shall be an original and all of which together shall constitute
one and the same instrument.
(j) Amendments or Waivers. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
parties hereto.
(k) Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing is in accordance with your understanding, please
indicate your acceptance of this Agreement by signing in the space provided
below.
Very truly yours,
PERMANENT MASTER ISSUER PLC
By
PERMANENT FUNDING (NO. 2) LIMITED
By
PERMANENT MORTGAGES TRUSTEE LIMITED
By
HALIFAX plc
By
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Accepted: [Date]
[ ]
By
For itself and as a Representative of and on behalf the several Underwriters
listed in Schedule 1
By
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SCHEDULE I
AGGREGATE INITIAL PRINCIPAL AMOUNT OF CERTIFICATES TO BE PURCHASED
41
SCHEDULE II
OFFERED NOTES RATING
Designation Standard & Poor's ▇▇▇▇▇'▇ Fitch
42