DRAFT: 03.11.04 Exhibit 10.1
AMENDED AND RESTATED FUNDING 1 LIQUIDITY
FACILITY AGREEMENT
DATED [{circle}], 2004
PERMANENT FUNDING (NO. 1) LIMITED
AS FUNDING 1
AND
JPMORGAN CHASE BANK
AS FUNDING 1 LIQUIDITY FACILITY PROVIDER
AND
HALIFAX PLC
AS CASH MANAGER
AND
THE BANK OF NEW YORK
AS SECURITY TRUSTEE
▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇ LLP
LONDON
CONTENTS
CLAUSE PAGE
1. Definitions and Interpretation............................................3
2. The Funding 1 Liquidity Facility..........................................4
3. Purpose...................................................................6
4. Conditions Precedent......................................................6
5. Drawdown..................................................................7
6. Repayment.................................................................9
7. Cancellation.............................................................11
8. Interest.................................................................12
9. Payments.................................................................13
10. Taxes....................................................................15
11. Market Disruption........................................................17
12. Increased Costs..........................................................18
13. Illegality...............................................................19
14. Representations and Warranties...........................................19
15. Undertakings.............................................................22
16. Default..................................................................23
17. Fees.....................................................................24
18. Enforcement and Subordination............................................25
19. Expenses.................................................................26
20. Stamp Duties.............................................................27
21. Indemnities..............................................................27
22. Evidence and Calculations................................................28
23. Amendments and Waivers...................................................28
24. Changes to the Parties...................................................29
25. Disclosure of Information................................................31
26. Set-Off..................................................................31
27. Severability.............................................................31
28. Counterparts.............................................................31
29. Notices..................................................................32
30. Third Party Rights.......................................................32
31. Governing Law............................................................32
32. Submission to Jurisdiction...............................................32
SCHEDULE
1. Conditions Precedent Documents...........................................34
2. Calculation of the Mandatory Liquid Asset Cost...........................35
3. Form of Funding 1 Liquidity Facility Request.............................37
4. Form of Novation Certificate.............................................38
5.
SIGNATORIES...................................................................40
THIS AMENDED AND RESTATED FUNDING 1 LIQUIDITY FACILITY AGREEMENT is dated
[{circle}], 2004
BETWEEN:
(1) PERMANENT FUNDING (NO. 1) LIMITED, (registered number 4267660) whose
registered office is ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(FUNDING 1);
(2) JPMORGAN CHASE BANK, acting through its offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ acting in its capacity as the Funding 1 Liquidity Facility
Provider;
(3) HALIFAX PLC, a public limited company incorporated under the laws of
England and Wales whose registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ acting in its capacity as Cash Manager; and
(4) THE BANK OF NEW YORK, acting through its offices at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its capacity as Security Trustee, which
expression shall include such company and all other persons or companies
for the time being acting as security trustee (or co-trustee) pursuant to
the terms of the Funding 1 Deed of Charge.
WHEREAS:
(A) The parties hereto entered into the Funding 1 Liquidity Facility Agreement
(as amended and restated by this Agreement and from time to time, the
FUNDING 1 LIQUIDITY FACILITY AGREEMENT) to assist Funding 1 in, among other
things, (i) making Eligible Liquidity Facility Principal Repayments and
(ii) meeting its interest payment liabilities in respect of relevant Term
Advances from time to time.
(B) Upon the terms and subject to the conditions set out in the Funding 1
Liquidity Facility Agreement, the Funding 1 Liquidity Facility Provider
agreed to make a Funding 1 Liquidity Facility available to Funding 1 on and
subject to the terms set out in the Funding 1 Liquidity Facility Agreement.
(C) The parties to the Funding 1 Liquidity Facility Agreement have agreed to
amend and restate the terms of that Agreement as set out herein.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Agreement and dated
[{circle}], 2004 (as the same may be amended, varied or supplemented from
time to time with the consent of the parties to this Agreement) (the MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and specifically
incorporated into this Agreement and, accordingly, the expressions defined
in the Master Definitions and Construction Schedule (as so amended, varied
or supplemented from time to time) shall, except where the context
otherwise requires and save where otherwise defined herein, have the same
meanings in this Agreement and this Agreement shall be construed in
accordance with the interpretation provisions set out in Clause 2 of the
Master Definitions and Construction Schedule.
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1.2 This Agreement amends and restates the Funding 1 Liquidity Facility
Agreement made on 14th June, 2002 as amended and restated on the 6th March,
2003, 25th November, 2003, 12th March, 2004 and 22/nd/ July 2004 (the
PRINCIPAL AGREEMENT). As of the date of this Agreement, any future rights
or obligations (excluding such obligations accrued to the date of this
Agreement) of a party under the Principal Agreement shall be extinguished
and shall instead be governed by this Agreement.
1.3 CONSTRUCTION
The Security Trustee has agreed to become a party to this Agreement only
for the purpose of taking the benefit of CLAUSES 2.3 (Extension), 5.1(B)
(Funding 1 Liquidity Facility Drawings), 5.2(A), (B) and (D) (Funding 1
Liquidity Facility Stand-by Loans), 6.2 and 6.4 (Repayment), 14.1
(Representations and warranties by Funding 1), 7.2 (Voluntary
Cancellation), 7.3 (Additional right of prepayment and cancellation), 14
(Representations and warranties). 15.2 (Financial information),
18 (Enforcement and Subordination), 24 (Changes to the Parties) and 29
(Notices) and for agreeing amendments to this Agreement pursuant to CLAUSE
23 (Amendments and waivers) and for the better preservation and enforcement
of its rights under the Funding 1 Deed of Charge and (without prejudice to
the terms of the Funding 1 Deed of Charge), other than as specified above,
the Security Trustee shall assume no obligations or liabilities whatsoever
to the Funding 1 Liquidity Facility Provider or Funding 1 by virtue of the
provisions of this Agreement.
2. THE FUNDING 1 LIQUIDITY FACILITY
2.1 FACILITY
Subject to the terms of this Agreement, the Funding 1 Liquidity Facility
Provider grants to Funding 1 the Funding 1 Liquidity Facility. The Funding
1 Liquidity Facility may be utilised by way of Funding 1 Liquidity Facility
Loans or Funding 1 Stand-by Loans.
2.2 FACILITY LIMITS
The aggregate principal amount of the Funding 1 Liquidity Loans and the
Funding 1 Stand-by Loans shall not at any time exceed the Funding 1
Liquidity Facility Commitment. The Funding 1 Liquidity Facility Provider is
not obliged to lend more than the Funding 1 Liquidity Facility Commitment.
Save as otherwise provided in the Agreement (including, for the avoidance
of doubt, CLAUSE 7 (Cancellation)), if any of the following shall occur,
the Funding 1 Liquidity Facility Commitment shall be reduced in the manner
provided:
(a) if the First Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Funding 1 Liquidity Facility Commitment shall
be reduced by the lesser of [GBP]60,000,000 and an amount which the
Rating Agencies have confirmed will have no material adverse effect on
the then current ratings of any Notes of any Issuer (or if the rating
of any of the Notes of any Issuer has been downgraded, an amount which
will not prevent the restoration of such rating); or
(b) if the Second Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Funding 1 Liquidity Facility Commitment shall
be reduced by the lesser of [GBP]47,500,000 and an amount which the
Rating Agencies have confirmed will have no material adverse effect on
the then current ratings of any Notes of any Issuer (or if the rating
of any of the Notes of any Issuer has been downgraded, an amount which
will not prevent the restoration of such rating); or
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(c) if the Third Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Funding 1 Liquidity Facility Commitment shall
be reduced by the lesser of [GBP]42,500,000 and an amount which the
Rating Agencies have confirmed will have no material adverse effect on
the then current ratings of any Notes of any Issuer (or if the rating
of any of the Notes of any Issuer has been downgraded, an amount which
will not prevent the restoration of such rating); or
(d) if the Fourth Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Funding 1 Liquidity Facility Commitment shall
be reduced by an amount which the Rating Agencies have confirmed will
have no material adverse effect on the then current ratings of any
Notes of any Issuer (or if the rating of any of the Notes of any
Issuer has been downgraded, an amount which will not prevent the
restoration of such rating); or
(e) if the Fifth Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Funding 1 Liquidity Facility Commitment shall
be reduced by an amount which the Rating Agencies have confirmed will
have no material adverse effect on the then current ratings of any
Notes of any Issuer (or if the rating of any of the Notes of any
Issuer has been downgraded, an amount which will not prevent the
restoration of such rating); or
(f) if the Sixth Issuer Intercompany Loan is repaid in full or is
otherwise cancelled, the Funding 1 Liquidity Facility Commitment shall
be reduced by an amount which the Rating Agencies have confirmed will
have no material adverse effect on the then current ratings of any
Notes of any Issuer (or if the rating of any of the Notes of any
Issuer has been downgraded, an amount which will not prevent the
restoration of such rating).
2.3 EXTENSION
(a) Save as otherwise provided in this Agreement, Funding 1 (or the Security
Trustee or the Cash Manager on its behalf) may deliver, not more than 30
days and not less than 20 days before the end of the Funding 1 Liquidity
Facility Commitment Period, to the Funding 1 Liquidity Facility Provider an
irrevocable request in writing that the Funding 1 Liquidity Facility
Commitment Period should be extended (an EXTENSION REQUEST) to a date that
is not more than (subject to CLAUSE 2.3(D) below) 364 days starting from
the last day of the then current Funding 1 Liquidity Facility Commitment
Period.
(b) If the Funding 1 Liquidity Facility Provider wishes to accept an Extension
Request then the Funding 1 Liquidity Facility Provider shall, not more than
15 days after receipt of the Extension Request, deliver to Funding 1 an
irrevocable notice (a NOTICE OF EXTENSION) that the Funding 1 Liquidity
Facility Provider has consented to the Extension Request. Failure to
deliver such a Notice of Extension within the 15-day time period referred
to above shall be deemed to constitute a refusal to grant an extension of
the Funding 1 Liquidity Facility Commitment Period.
(c) The Funding 1 Liquidity Facility Provider shall promptly notify the
Security Trustee of each Extension Request and Notice of Extension received
or delivered (or deemed delivered) by it.
(d) The Funding 1 Liquidity Facility Provider is not obliged to agree to extend
the Funding 1 Liquidity Facility Commitment Period and in no event may it
be extended beyond the REPAYMENT DATE, being the earlier to occur of:
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(i) the date when the First Issuer Intercompany Loan, the Second Issuer
Intercompany Loan, the Third Issuer Intercompany Loan, the Fourth
Issuer Intercompany Loan, the Fifth Issuer Intercompany Loan and the
Sixth Issuer Intercompany Loan have been repaid or cancelled in full;
and
(ii) the Funding 1 Interest Payment Date in June 2042 (unless the parties
hereto agree to extend the provision of the Funding 1 Liquidity
Facility beyond such date).
3. PURPOSE
(a) Funding 1 (or the Cash Manager on behalf of Funding 1) may use each Funding
1 Liquidity Facility Drawing only to meet a Funding 1 Liquidity Shortfall
existing at that time, to the extent that it relates to payment obligations
of Funding 1 arising in connection with the First Issuer Intercompany Loan
Agreement, the Second Issuer Intercompany Loan Agreement, the Third Issuer
Intercompany Loan Agreement, the Fourth Issuer Intercompany Loan Agreement,
the Fifth Issuer Intercompany Loan Agreement or the Sixth Issuer
Intercompany Loan. For the avoidance of doubt, the parties agree that the
Funding 1 Liquidity Facility will be available notwithstanding that one or
more (but not all) of the First Issuer Intercompany Loan Agreement, the
Second Issuer Intercompany Loan Agreement, the Third Issuer Intercompany
Loan Agreement, the Fourth Issuer Intercompany Loan Agreement, the Fifth
Issuer Intercompany Loan Agreement or the Sixth Issuer Intercompany Loan
may have been repaid in full or cancelled, subject to any reduction of the
Funding 1 Liquidity Facility Commitment in accordance with CLAUSE 2.2
(Facility Limits).
(b) Funding 1 (or the Cash Manager on behalf of Funding 1) may use a Funding 1
Liquidity Facility Drawing only to credit the Funding 1 Liquidity Facility
Stand-by Account.
(c) Without affecting the obligations of Funding 1 in any way, the Funding 1
Liquidity Facility Provider is not bound to monitor or verify the
application of any Funding 1 Liquidity Facility Drawing or any Funding 1
Liquidity Facility Stand-by Drawing.
4. CONDITIONS PRECEDENT
4.1 DOCUMENTARY CONDITIONS PRECEDENT
The obligations of the Funding 1 Liquidity Facility Provider to Funding 1
under this Agreement are subject to the condition precedent that the
Funding 1 Liquidity Facility Provider has notified Funding 1 that it has
received all of the documents set out in Schedule 1 and that each is in
form and substance satisfactory to it.
4.2 FURTHER CONDITIONS PRECEDENT
(a) The obligation of the Funding 1 Liquidity Facility Provider to make a
Funding 1 Liquidity Facility Loan or a Funding 1 Liquidity Facility
Stand-by Loan available, is subject to the further conditions precedent
that on both the date of the Funding 1 Liquidity Facility Request and the
corresponding Funding 1 Liquidity Facility Drawdown Date:
(i) no Asset Trigger Event has occurred;
(ii) no Funding 1 Liquidity Facility Default is outstanding or would
result from the making of the Funding 1 Liquidity Facility Loan or
the Funding 1 Liquidity Facility Stand-by Loan; and
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(iii) in respect of Funding 1 Liquidity Facility Loans, no or insufficient
amounts are available for drawing from the Reserve Funds in order to
pay the liabilities in respect of which the relevant Funding 1
Liquidity Facility Loan is to be applied.
(b) The obligation of the Funding 1 Liquidity Facility Provider to make a
Funding 1 Liquidity Facility Loan available for the purpose of a Funding 1
Liquidity Revenue Shortfall is subject to the further conditions precedent
that, on the Funding 1 Liquidity Facility Drawdown Date for that Funding 1
Liquidity Facility Loan, Funding 1 (or the Cash Manager on its behalf)
provides confirmation to the Funding 1 Liquidity Facility Provider that:
(i) in respect of any Funding 1 Liquidity Facility Loan to assist the
payment of interest on the relevant Term AA Advances, the debit
balance on the relevant AA Principal Deficiency Sub-Ledger is not in
an amount equal to or in excess of 50 per cent. of the principal
amount outstanding of the relevant Term AA Advances;
(ii) in respect of any Funding 1 Liquidity Facility Loan to assist the
payment of interest on the relevant Term A Advances, the debit
balance on the relevant A Principal Deficiency Sub-Ledger is not in
an amount equal to or in excess of 50 per cent. of the principal
amount outstanding of the relevant Term A Advances; and
(iii) in respect of any Funding 1 Liquidity Facility Loan to assist the
payment of interest on the relevant Term BBB Advances, the debit
balance on the relevant BBB Principal Deficiency Sub-Ledger is not in
an amount equal to or in excess of 50 per cent. of the principal
amount outstanding of the relevant Term BBB Advances.
(c) The obligation of the Funding 1 Liquidity Facility Provider to make a
Funding 1 Liquidity Facility Loan available for the purpose of a Funding 1
Liquidity Principal Shortfall is subject to the further conditions
precedent that:
(i) prior to the occurrence of a Trigger Event, the Funding 1 Liquidity
Facility Provider is obliged only to pay:
(A) the principal amount on any relevant Original Bullet Term
Advances when such amounts are due and payable; and
(B) the principal amount on any relevant Original Scheduled
Amortisation Term Advances on their respective Final Repayment
Dates; and
(ii) following the occurrence of a Non-Asset Trigger Event but prior to
the occurrence of an Asset Trigger Event, the Funding 1 Liquidity
Facility Provider is obliged only to pay the principal amount on the
relevant Original Bullet Term Advances and the relevant Original
Scheduled Amortisation Term Advances on their respective Final
Repayment Dates.
5. DRAWDOWN
5.1 FUNDING 1 LIQUIDITY FACILITY LOANS
(a) If, on the Business Day immediately preceding a relevant Funding 1 Interest
Payment Date, the Cash Manager determines that, on the relevant Funding 1
Interest Payment Date, a Funding 1 Liquidity Shortfall will arise, the Cash
Manager will direct Funding 1 to make a Funding 1 Liquidity Facility
Drawing on the Business Day immediately preceding that Funding 1 Interest
Payment Date, subject to the terms of this Agreement, for all or any of the
purposes set out in CLAUSE 3 (Purpose) (as appropriate) and, subject to the
limits set out in
7
CLAUSE 2.2 (Facility limits), in an amount equal to the Funding 1 Liquidity
Shortfall.
(b) Funding 1 (or Cash Manager on behalf of Funding 1) will serve on the
Funding 1 Liquidity Facility Provider a Funding 1 Liquidity Facility
Request (substantially in the form set out in SCHEDULE 3 to this Agreement)
for each Funding 1 Liquidity Facility Drawing, such request to be given by
facsimile in accordance with CLAUSE 29 (Notices) of this Agreement to be
received by the Funding 1 Liquidity Facility Provider not later than 10.00
a.m. on the Business Day immediately preceding the proposed Funding 1
Liquidity Facility Drawdown Date.
(c) No Funding 1 Liquidity Drawing may be made, or requested to be made, on or
after the last day of the then current Funding 1 Liquidity Facility
Commitment Period.
5.2 FUNDING 1 LIQUIDITY FACILITY STAND-BY LOANS
(a) The Funding 1 Liquidity Provider shall, upon becoming aware of a Relevant
Event, promptly notify Funding 1, the Security Trustee and the Cash Manager
in writing of that fact.
(b) If a Relevant Event occurs, Funding 1 (or the Security Trustee or the Cash
Manager on behalf of Funding 1) may, subject to the terms of this
Agreement, and after serving a Funding 1 Liquidity Facility Request on the
Funding 1 Liquidity Facility Provider, make a Funding 1 Liquidity Facility
Stand-by Loan equal to the undrawn portion of the Funding 1 Liquidity
Facility Commitment at that time. No Funding 1 Liquidity Facility Stand-by
Drawing may be made or requested to be made after the end of the Funding 1
Liquidity Facility Commitment Period.
(c) Upon making a Funding 1 Liquidity Facility Stand-by Loan, Funding 1 (or the
Security Trustee or the Cash Manager on behalf of Funding 1) shall
forthwith pay the Funding 1 Liquidity Facility Stand-by Loan into the
Funding 1 Liquidity Facility Stand-by Account, which shall be an account
with the Funding 1 Liquidity Facility Provider if the Relevant Event
leading to the making of the Funding 1 Liquidity Facility Stand-by Loan is
a Funding 1 Liquidity Facility Extension Refusal.
(d) Subject to the terms of the Funding 1 Deed of Charge, interest earned on
the Funding 1 Liquidity Facility Stand-by Account, together with any income
derived from any Authorised Investments made in accordance with PARAGRAPH
(e)(iv) below using amounts standing to the credit of the Funding 1
Liquidity Facility Stand-by Account from time to time, shall belong to and
be for the account of Funding 1 (and Funding 1 shall be entitled to
withdraw and retain such interest earned).
(e) Amounts from time to time standing to the credit of the Funding 1 Liquidity
Facility Stand-by Account shall belong to Funding 1 and the Funding 1
Liquidity Facility Provider shall not have any proprietary interest or
Security Interest in such amounts save as arises under the Funding 1 Deed
of Charge. Other than as referred to in PARAGRAPH (D) above, Funding 1 (or
the Security Trustee or the Cash Manager on behalf of Funding 1) shall only
make withdrawals from the Funding 1 Liquidity Facility Stand-by Account:
(i) in such circumstances and in such amount as it would otherwise have
been able to make a Funding 1 Liquidity Loan pursuant to CLAUSE 5.1
(Funding 1 Liquidity Drawings), provided that there shall be no
requirement that the Funding 1 Liquidity Facility Drawdown Date falls
on or before the end of the Funding 1 Liquidity Facility Commitment
Period, where there has been a Funding 1 Liquidity Facility Extension
Refusal; or
8
(ii) in order to make a repayment of a Funding 1 Liquidity Facility
Stand-by Loan in accordance with CLAUSE 6 (Repayment); or
(iii) in order to pay interest on any Funding 1 Liquidity Facility Stand-by
Loan in accordance with Clause 8.2; or
(iv) in order to invest funds standing to the credit of the Funding 1
Liquidity Facility Stand-by Account in Authorised Investments (the
nature and characteristics of which Authorised Investments Funding 1
will notify to the Funding 1 Liquidity Facility Provider at the same
time as making those investments),
(f) Any withdrawal from the Funding 1 Liquidity Facility Stand-by Account under
paragraph 5.2(e)(i) above will be deemed to be a Funding 1 Liquidity
Facility Drawing and the amount withdrawn will be deemed to be a Funding 1
Liquidity Facility Loan.
(g) The aggregate amount of the Funding 1 Liquidity Facility Stand-by Loans
outstanding will be:
(i) reduced by the amount of any deemed Funding 1 Liquidity Facility
Loans under paragraph 5.2(e)(i) above and any repayment or prepayment
of all or any part of the Funding 1 Liquidity Facility Stand-by
Loans; and
(ii) increased by the amount of any deemed Funding 1 Liquidity Facility
Stand-by Loans under Sub-clause 6.3 (Repayment of Liquidity Loans).
5.3 PAYMENT OF PROCEEDS
Subject to the terms of this Agreement, the Funding 1 Liquidity Facility
Provider shall make each Funding 1 Liquidity Facility Loan available for
Funding 1 on the relevant Funding 1 Liquidity Facility Drawdown Date and
shall remit each Funding 1 Liquidity Facility Loan to Funding 1 by noon on
the relevant Funding 1 Liquidity Facility Drawdown Date or, if LIBOR is
determined otherwise than in accordance with PARAGRAPH (A) of its
definition, by 2.00 p.m. on the relevant Funding 1 Liquidity Facility
Drawdown Date.
6. REPAYMENT
6.1 Subject as provided below and subject to Clause 7.2 (Voluntary
Cancellation), Clause 18 (Enforcement and Subordination) and Clause 21.2
(Other indemnities) on the earlier of:
(i) the immediately succeeding Funding 1 Interest Payment Date; and
(ii) the Repayment Date,
Funding 1 shall repay the outstanding balance of the Funding 1 Liquidity
Loan, if any, from Funding 1 Available Principal Receipts (but only to the
extent that the Funding 1 Liquidity Loan has been made to meet Funding 1
Liquidity Principal Shortfalls (if any)) and from Funding 1 Available
Revenue Receipts (but only to the extent that the Funding 1 Liquidity Loan
has been made to meet Funding 1 Liquidity Revenue Shortfalls (if any)) as
at the opening of business on such date.
9
6.2 Subject to the other terms of this Agreement, any amount repaid under
paragraph 6.1 above may be re-borrowed and, other than on the Repayment
Date, Funding 1 may repay a Funding 1 Liquidity Facility Loan for the
purposes of paragraph 6.1 above by making a new Funding 1 Liquidity
Facility Drawing by submitting a Funding 1 Liquidity Facility Request for a
new Funding 1 Liquidity Facility Loan or, if a Relevant Event is
outstanding, by making a deemed Funding 1 Liquidity Facility Drawing or by
rolling over an existing Funding 1 Liquidity Facility Loan.
6.3 Whilst a Relevant Event is outstanding, any amount due under paragraph 6.1
above must be repaid by Funding 1 paying such amount into the Funding 1
Liquidity Facility Stand-by Account and such payment will be deemed to be a
Funding 1 Liquidity Facility Stand-by Drawing and the amount repaid will be
deemed to be a Funding 1 Liquidity Facility Stand-by Loan.
6.4 The Funding 1 Liquidity Facility Stand-by Loans shall, subject to CLAUSE 18
(Enforcement and Subordination), be repayable to the Funding 1 Liquidity
Facility Provider, together with accrued interest pursuant to CLAUSE 8
(Interest), on the earlier of:
(a) the Repayment Date;
(b) if the Relevant Event resulting in the making of the Funding 1
Liquidity Facility Stand-by Drawing was a Funding 1 Liquidity Facility
Downgrade Event, then the earliest of:
(i) the date on which the Funding 1 Liquidity Facility Commitment is
made unconditionally available to Funding 1 by a new liquidity
facility provider following a transfer of all the Funding 1
Liquidity Facility Provider's rights and obligations under this
Agreement to a new liquidity facility provider which is a
Qualifying Lender and has the Requisite Ratings under Sub-clause
24.4 (Assignments and transfers by the Funding 1 Liquidity
Facility Provider) or Sub-clause 24.5 (Assignments and transfers
required by Funding 1);
(ii) the date on which a new commitment is made unconditionally
available to Funding 1 by a new liquidity facility provider
which is a Qualifying Lender and has the Requisite Ratings
following the cancellation of the Funding 1 Liquidity Facility
Commitment in whole by Funding 1 under Sub-clause 7.2 (Voluntary
cancellation); and
(iii) the date falling two Business Days after the date on which the
Liquidity Facility Provider has notified Funding 1 and the
Security Trustee that it again has the Requisite Ratings, unless
a Funding 1 Liquidity Facility Extension Refusal occurred after
the Funding 1 Liquidity Facility Downgrade Event; or
(c) if the Relevant Event resulting in the making of the Funding 1
Liquidity Facility Stand-by Drawing was a Funding 1 Liquidity Facility
Extension Refusal, then the date on which a new commitment is made
unconditionally available to Funding 1 by a new liquidity facility
provider which is a Qualifying Lender and has the Requisite Ratings
following the cancellation of the Funding 1 Liquidity Facility
Commitment in whole by Funding 1 under Sub-clause 7.2 (Voluntary
cancellation).
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7. CANCELLATION
7.1 AUTOMATIC CANCELLATION OF THE FUNDING 1 LIQUIDITY FACILITY COMMITMENT
The Funding 1 Liquidity Facility Commitment shall be automatically
cancelled at close of business on the last day of the Funding 1 Liquidity
Facility Commitment Period.
7.2 VOLUNTARY CANCELLATION
(a) Funding 1 may with the prior written consent of the Security Trustee and
provided that:
(i) the Rating Agencies have confirmed that such cancellation will have
no material adverse effect on the then current ratings of any of the
Notes of any Issuer; or
(ii) if the ratings of any of the Notes of any Issuer has previously been
downgraded that such cancellation will not prevent the restoration of
such rating,
without premium or penalty, cancel the undrawn and uncancelled part of the
Funding 1 Liquidity Facility Commitment in whole or in part (but if in
part, in multiples of not less than [GBP]50,000 unless the Funding 1
Liquidity Facility Commitment is less than [GBP]50,000) at any time
provided that it has given the Funding 1 Liquidity Facility Provider not
less than seven London Business Days' prior notice (which notice Funding 1
shall copy to the Security Trustee, the Cash Manager and to the Rating
Agencies) stating the principal amount to be cancelled. During such seven
Business Day period Funding 1 may not serve a Funding 1 Liquidity Facility
Request purporting to draw all or any part of the amount the subject of
such notice of such cancellation.
(b) If a Relevant Event has occurred, Funding 1 may, without premium or
penalty, by notice to the Funding 1 Liquidity Facility Provider (which
notice Funding 1 shall copy to the Security Trustee and the Cash Manager)
prepay any Funding 1 Liquidity Facility Loans and any Funding 1 Liquidity
Facility Stand-by Loans, provided that :
(i) Funding 1 has given the Funding 1 Liquidity Facility Provider not
less than 15 Business Days' notice (copied to the Security Trustee
and the Rating Agencies);
(ii) Funding 1 has made arrangements for a new liquidity facility provider
which is a Qualifying Lender and has the Requisite Ratings to enter
into a new liquidity facility agreement on substantially the same
terms as this Agreement; and
(iii) the Funding 1 Liquidity Facility Provider has been repaid all amounts
outstanding to it under this Agreement.
(c) Funding 1 may also, without premium or penalty, by notice to the Funding 1
Liquidity Facility Provider, cancel the whole of the Funding 1 Liquidity
Facility Commitment on the Repayment Date.
7.3 ADDITIONAL RIGHT OF PREPAYMENT AND CANCELLATION
If:
(a) Funding 1 is required to pay to the Funding 1 Liquidity Facility
Provider any additional amounts under CLAUSE 10 (Taxes); or
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(b) Funding 1 is required to pay to the Funding 1 Liquidity Facility
Provider any amount under CLAUSE 12 (Increased costs),
then, without prejudice to the obligations of Funding 1 under those
Clauses, Funding 1 may, whilst the circumstances continue, give a notice of
prepayment and cancellation to the Funding 1 Liquidity Facility Provider
with a copy to the Security Trustee. On the date falling five London
Business Days after the date of giving of the notice:
(i) Funding 1 shall prepay the Funding 1 Liquidity Facility Loans;
and
(ii) the Funding 1 Liquidity Facility Commitment shall be cancelled.
7.4 MISCELLANEOUS PROVISIONS
(a) Any notice of prepayment and/or cancellation under this Agreement is
irrevocable.
(b) All prepayments under this Agreement shall be made together with accrued
interest on the amount prepaid and, subject to CLAUSE 21 (Indemnities),
without premium or penalty.
(c) No prepayment or cancellation is permitted except in accordance with the
express terms of this Agreement.
(d) No amount of the Funding 1 Liquidity Facility Commitment cancelled under
this Agreement may subsequently be reinstated except with the prior written
consent of the Funding 1 Liquidity Facility Provider, Funding 1 and the
Security Trustee.
8. INTEREST
8.1 INTEREST RATE (FUNDING 1 LIQUIDITY FACILITY LOANS)
The rate of interest on each Funding 1 Liquidity Facility Loan for each
Funding 1 Liquidity Facility Interest Period is the rate per annum
determined by the Funding 1 Liquidity Facility Provider to be the aggregate
of the applicable:
(a) Funding 1 Liquidity Facility Margin;
(b) LIBOR; and
(c) subject to CLAUSE 18 (Enforcement and Subordination), Mandatory
Liquid Asset Cost.
8.2 INTEREST RATE (FUNDING 1 LIQUIDITY FACILITY STAND-BY LOANS)
For so long as any amount is outstanding under the First Issuer
Intercompany Loan, and without prejudice to CLAUSE 17.1(A) (Commitment Fee
and Contingent Fee), the rate of interest on each Funding 1 Liquidity
Facility Stand-by Loan shall be:
(a) in respect of a Funding 1 Liquidity Facility Stand-by Loans up to
(and including) the first [GBP]60,000,000, the amount of interest
payable will be determined in accordance with CLAUSE 8.1 (Interest
Rate (Funding 1 Liquidity Facility Drawing)); and
(b) in respect of a Funding 1 Liquidity Facility Stand-by Loans equal to
and in excess of [GBP]60,000,001, interest will not be payable on the
amount in excess of [GBP]60,000,000.
12
In the event that the First Issuer Intercompany Loan is repaid or is
otherwise cancelled, interest will not be payable in respect of any part of
a Funding 1 Liquidity Facility Stand-by Loan.
8.3 DUE DATES
Except as otherwise provided in this Agreement (including, without
limitation, CLAUSE 6 (Repayment)), accrued interest on each Funding 1
Liquidity Facility Loan is payable by Funding 1 on each Funding 1 Interest
Payment Date.
8.4 DEFAULT INTEREST
(a) If Funding 1 fails to pay any amount payable by it under this Agreement, it
shall forthwith on demand by the Funding 1 Liquidity Facility Provider pay
interest on the overdue amount from the due date up to the date of actual
payment, as well after as before judgment, at a rate (the DEFAULT RATE)
determined by the Funding 1 Liquidity Facility Provider to be one per cent.
per annum above the higher of:
(i) the rate on the overdue amount under CLAUSE 8.1 (Interest rate)
immediately before the due date (if of principal); and
(ii) the rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted a Funding 1 Liquidity
Facility Drawing in the currency of the overdue amount for such
successive Funding 1 Liquidity Facility Interest Periods of such
duration as the Funding 1 Liquidity Facility Provider may determine
(each a DESIGNATED INTEREST PERIOD).
(b) The Default Rate will be determined on each Business Day or the first day
of the relevant Designated Interest Period, as appropriate.
(c) If LIBOR is to be determined in accordance with PARAGRAPH (B) of its
definition and the Funding 1 Liquidity Facility Provider determines that
deposits in the currency of the overdue amount are not at the relevant time
being made available by the Reference Banks to leading banks in the London
interbank market, the Default Rate will be determined by reference to the
cost of funds to the Funding 1 Liquidity Facility Provider from whatever
sources it reasonably selects.
(d) Default interest will be compounded at the end of each Designated Interest
Period.
(e) This CLAUSE 8.4 shall not apply to amounts deferred as a result of the
operation of CLAUSE 18 (Enforcement and Subordination).
8.5 NOTIFICATION OF RATES OF INTEREST
The Funding 1 Liquidity Facility Provider shall promptly notify each
relevant party of the determination of a rate of interest under this
Agreement.
9. PAYMENTS
9.1 PLACE
All payments by Funding 1 under this Agreement shall be made to the Funding
1 Liquidity Facility Provider's account at JPMorgan Chase Bank, Sort Code:
60-92-42, Account
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Reference: European Loans or to its account at such office or bank as it
may notify to Funding 1 for this purpose.
9.2 FUNDS
Payments under this Agreement to the Funding 1 Liquidity Facility Provider
shall be made for value on the due date at such times and in such funds as
the Funding 1 Liquidity Facility Provider may specify to the party
concerned as being customary at the time for the settlement of transactions
in Sterling.
9.3 CURRENCY
(a) Amounts payable in respect of costs, expenses, taxes and the like are
payable in the currency in which they are incurred.
(b) Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.4 CHANGE OF CURRENCY
(a) If more than one currency or currency unit are at the same time recognised
by the central bank of any country as the lawful currency of that country,
then:
(i) any reference in the Funding 1 Liquidity Documents to, and any
obligations arising under the Funding 1 Liquidity Documents in, the
currency of that country shall be translated into, or paid in, the
currency or currency unit of that country designated by the Funding 1
Liquidity Facility Provider; and
(ii) any translation from one currency or currency unit to another shall
be at the official rate of exchange recognised by the central bank
for the conversion of that currency or currency unit into the other,
rounded up or down by the Funding 1 Liquidity Facility Provider
acting reasonably.
(b) If a change in any currency of a country occurs, this Agreement will be
amended to the extent the Funding 1 Liquidity Facility Provider specifies
to be necessary to reflect the change in currency and to put the Funding 1
Liquidity Facility Provider in the same position, so far as possible, that
it would have been in if no change in currency had occurred.
9.5 SET-OFF AND COUNTERCLAIM
All payments made by Funding 1 under this Agreement shall be made without
set-off or counterclaim.
9.6 NON-BUSINESS DAYS
(a) If a payment under this Agreement is due on a day which is not a London
Business Day, the due date for that payment shall instead be the next
London Business Day in the same calendar month (if there is one) or the
preceding London Business Day (if there is not).
(b) During any extension of the due date for payment of any principal under
this Agreement interest is payable on the principal at the rate payable on
the original due date.
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10. TAXES
10.1 GROSS-UP
Subject to CLAUSE 18 (Enforcement and Subordination) and CLAUSE 10.3
(Qualifying Lender), all payments by Funding 1 under the Funding 1
Liquidity Documents shall be made free and clear of and without deduction
or withholding for or on account of any Taxes, except to the extent that
Funding 1 is required by law to make payment subject to any such deduction
or withholding for or on account of any Taxes. If any Tax or amount in
respect of Tax is required by law to be deducted or withheld from any
amounts payable or paid by Funding 1 under the Funding 1 Liquidity
Documents, subject to CLAUSE 18 (Enforcement and Subordination) the payment
due from Funding 1 shall be increased to include such additional amounts as
may be necessary to ensure that (after any deduction or withholding
required including in respect of such additional amounts) the Funding 1
Liquidity Facility Provider receives a net amount equal to the full amount
which would have been due had no deduction or withholding for or on account
of any Taxes been required.
10.2 TAX RECEIPTS
Subject to CLAUSE 18 (Enforcement and Subordination), all Taxes required by
law to be deducted or withheld by Funding 1 from any amounts paid or
payable under the Funding 1 Liquidity Documents shall be paid by Funding 1
no later than when due and Funding 1 shall, within 30 days of making either
the deduction or withholding for or on account of any Tax or the payment in
respect of such deduction or withholding, deliver to the Funding 1
Liquidity Facility Provider evidence satisfactory to the Funding 1
Liquidity Facility Provider (acting reasonably) (including all relevant Tax
receipts) that the payment has been duly remitted to the appropriate
authority.
10.3 QUALIFYING LENDER
Funding 1 shall not be required to pay an additional amount as referred to
in CLAUSE 10.1 (Gross-up) above in respect of any deduction or withholding
for or on account of any Taxes levied or imposed by the United Kingdom (or
any taxing authority of or in the United Kingdom) from a payment of
interest, if on the date on which the payment falls due:
(a) the payment could have been made to the Funding 1 Liquidity Facility
Provider in the absence of a deduction or withholding for or on
account of any Taxes if the Funding 1 Liquidity Facility Provider were
a Qualifying Lender, but on that date the Funding 1 Liquidity Facility
Provider is not or has ceased to be a Qualifying Lender other than as
a result of any change occurring after the date of this Agreement in
(or in the interpretation, administration or application of) any law
or regulation or applicable Double Taxation Treaty or any published
practice or concession of any relevant Tax authority;
(b) (i) the Funding 1 Liquidity Facility Provider is a Qualifying Lender
solely because it is a UK Non-Bank Lender;
(ii) the Board of the United Kingdom Inland Revenue has given (and
not revoked) a direction (a DIRECTION) under Section 349C ICTA
(as that provision has effect on the date of this Agreement)
which relates to such payment and Funding 1 has notified the
Funding 1 Liquidity Facility Provider of the precise terms of
that notice; and
15
(iii) the payment could have been made to the Funding 1 Liquidity
Facility Provider without any deduction or withholding for or on
account of Tax in the absence of that Direction;
(c) the Funding 1 Liquidity Facility Provider is a Treaty Lender and
Funding 1 is able to demonstrate that the additional amounts referred
to in CLAUSE 10.1 (Gross-up) above would not have been required if the
Funding 1 Liquidity Facility Provider had complied with its
obligations under CLAUSE 10.6 (Treaty Lender) below.
10.4 REFUND OF TAX CREDITS
If Funding 1 makes a payment under CLAUSE 10.1 (Gross-up) (a TAX PAYMENT)
in respect of a payment to the Funding 1 Liquidity Facility Provider under
this Agreement and the Funding 1 Liquidity Facility Provider determines
that it has obtained a refund of Tax or obtained and used a credit against
Tax on its overall net income (a TAX CREDIT) which the Funding 1 Liquidity
Facility Provider determines to be attributable to that Tax Payment, then
the Funding 1 Liquidity Facility Provider shall reimburse Funding 1 such
amount as the Funding 1 Liquidity Facility Provider determines to be such
proportion of that Tax Credit as will leave the Funding 1 Liquidity
Facility Provider (after that reimbursement) in no better or worse position
than it would have been in if no Tax Payment had been required. The Funding
1 Liquidity Facility Provider shall not be obliged to disclose to any party
to this Agreement or otherwise any information regarding its Tax affairs
and computations.
10.5 STATUS OF QUALIFYING LENDER
If the Funding 1 Liquidity Facility Provider or replacement liquidity
facility provider (as applicable) ceases, for whatever reason, to be a
Qualifying Lender, it shall promptly notify Funding 1 in writing of that
change in its status.
10.6 TREATY LENDER
A Treaty Lender and Funding 1 shall co-operate in completing any procedural
formalities necessary for Funding 1 to obtain authorisation to make
payments under the Funding 1 Liquidity Documents free and clear of and
without deduction or withholding for or on account of any Taxes levied or
imposed by the United Kingdom or any taxing authority of or in the United
Kingdom.
10.7 TAX INDEMNITY
(a) Funding 1 shall (within three Business Days of demand by the Funding 1
Liquidity Facility Provider (the PROTECTED PARTY)) pay to a Protected Party
an amount equal to the loss, liability or cost which that Protected Party
determines will be or has been (directly or indirectly) suffered for on and
account of Tax by that Protected Party in respect of the Funding 1
Liquidity Documents.
(b) PARAGRAPH (A) above shall not apply:
(i) with respect to any Tax assessed on a Protected Party:
(A) under the law of the jurisdiction in which that Protected Party
is incorporated or, if different, the jurisdiction in which
that Protected Party is treated as resident for tax purposes; or
16
(B) under the law of the jurisdiction in which that Protected
Party's Facility Office is located in respect of amounts
received or receivable in that jurisdiction,
if that Tax is imposed or calculated by reference to the net income
received or receivable (but not any sum deemed to be received or
receivable) by that Protected Party;
(ii) to the extent a loss, liability or cost:
(A) is compensated for by an increased payment under CLAUSE 10.1
(Gross-up); or
(B) would have been compensated for by an increased payment under
CLAUSE 10.1 (Gross-up) but was not so compensated solely because
one of the exclusions in CLAUSE 10.3 (Qualifying Lender)
applied.
11. MARKET DISRUPTION
(a) If LIBOR is to be determined in accordance with PARAGRAPH (B) of its
definition and a Reference Bank does not supply an offered rate by 1.00
p.m. on a Funding 1 Liquidity Facility Drawdown Date, the applicable LIBOR
shall, subject to PARAGRAPH (B) below, be determined on the basis of the
quotations of the remaining Reference Bank(s).
(b) If, in relation to any Funding 1 Liquidity Facility Drawing or proposed
Funding 1 Liquidity Facility Drawing:
(i) LIBOR is to be determined in accordance with PARAGRAPH (B) of its
definition and no, or only one, Reference Bank supplies a rate for the
purposes of determining the applicable LIBOR or the Funding 1
Liquidity Facility Provider otherwise determines that adequate and
fair means do not exist for ascertaining the applicable LIBOR; or
(ii) in the Funding 1 Liquidity Facility Provider's opinion:
(A) matching deposits may not be available to it in the London
interbank market in the ordinary course of business to fund that
Funding 1 Liquidity Facility Loan for the relevant Funding 1
Liquidity Facility Interest Period; or
(B) the cost to it of matching deposits in the London interbank
market would be in excess of the relevant LIBOR,
the Funding 1 Liquidity Facility Provider shall promptly notify Funding 1
of the fact and that this CLAUSE 11 is in operation.
(c) After any notification under PARAGRAPH (B) above, the Funding 1 Liquidity
Facility Loan shall bear interest at the rate per annum equal to the sum of
the applicable Funding 1 Liquidity Facility Margin, Mandatory Liquid Asset
Cost and the cost to the Funding 1 Liquidity Facility Provider (expressed
as a rate per annum) of funding the Funding 1 Liquidity Facility Loan by
whatever means it reasonably determines to be appropriate.
17
12. INCREASED COSTS
12.1 INCREASED COSTS
(a) Subject to CLAUSE 12.2 (Exceptions) and CLAUSE 18 (Enforcement and
Subordination), Funding 1 shall forthwith on demand by the Funding 1
Liquidity Facility Provider pay the Funding 1 Liquidity Facility Provider
the amount of any increased cost incurred by it as a result of:
(i) the introduction of, or any change in, or any change in the
interpretation by any court or official authority or application of,
any law or regulation or in the case of Tax, the introduction of or
any change in or any change in the interpretation, administration or
application of any law or regulation or published practice or
concession of any relevant tax authority (in each case occurring
after the date of this Agreement);
(ii) compliance with any regulation made or modified after the date of
this Agreement,
including any law or regulation relating to change in currency of a country
or reserve asset, special deposit, cash ratio, liquidity or capital
adequacy requirements or any other form of banking or monetary control or
in the case of taxation, any law, regulation, published practice or
concession relating to Tax.
(b) In this Agreement INCREASED COST means:
(i) an additional cost incurred by the Funding 1 Liquidity Facility
Provider or its holding company as a result of it having entered
into, or performing, maintaining or funding its obligations under,
the Funding 1 Liquidity Documents; or
(ii) that portion of an additional cost incurred by the Funding 1
Liquidity Facility Provider or its holding company in making, funding
or maintaining all or any advances comprised in a class of advances
formed by or including the Funding 1 Liquidity Facility Loans made or
to be made under the Funding 1 Liquidity Documents as is attributable
to it making, funding or maintaining those participations; or
(iii) a reduction in any amount payable to the Funding 1 Liquidity Facility
Provider or its holding company or the effective return to a Funding
1 Liquidity Facility Provider under this Agreement or (to the extent
that it is attributable to this Agreement) on its capital, including
any reduction in the effective return from the Funding 1 Liquidity
Facility Margin or the commitment fee payable under CLAUSE 17 (Fees)
of this Agreement; or
(iv) the amount of any payment made by the Funding 1 Liquidity Facility
Provider or its holding company, or the amount of interest or other
return foregone by the Funding 1 Liquidity Facility Provider,
calculated by reference to any amount received or receivable by the
Funding 1 Liquidity Facility Provider from any other Party under this
Agreement.
12.2 EXCEPTIONS
CLAUSE 12.1 does not apply to any increased cost:
(a) to the extent compensated for by the payment of the Mandatory Liquid
Asset Cost;
18
(b) to the extent compensated for by the operation of CLAUSE 10.7 (Tax
Indemnity); or
(c) to the extent that any such increased cost is attributable to any
deduction or withholding for or on account of any Tax required to be
made by Funding 1.
13. ILLEGALITY
If it is or becomes unlawful in any jurisdiction for the Funding 1
Liquidity Facility Provider to give effect to any of its obligations as
contemplated by this Agreement or to fund or maintain any Funding 1
Liquidity Facility Loan, then:
(a) the Funding 1 Liquidity Facility Provider may notify Funding 1
accordingly; and
(b) (i) subject to CLAUSE 18 (Enforcement and Subordination), Funding 1
shall forthwith prepay the Funding 1 Liquidity Facility Loans
together with all interest and all other amounts payable by it
to the Funding 1 Liquidity Facility Provider under this
Agreement; and
(ii) the Funding 1 Liquidity Facility Commitment shall be cancelled.
14. REPRESENTATIONS AND WARRANTIES
14.1 REPRESENTATIONS AND WARRANTIES BY FUNDING 1
Funding 1 makes the representations and warranties set out in this CLAUSE
14.1 to the Funding 1 Liquidity Facility Provider and the Security Trustee:
(a) STATUS
(i) It is a limited liability company, duly incorporated and validly
existing under the laws of England and Wales; and
(ii) it has the power to own its assets and carry on its business as
it is being conducted.
(b) POWERS AND AUTHORITY
It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and delivery
of, the Funding 1 Liquidity Documents to which it is or will be a
party and the transactions contemplated by those Funding 1 Liquidity
Documents.
(c) LEGAL VALIDITY
Each Funding 1 Liquidity Document to which it is or will be a party
constitutes, or when executed in accordance with its terms will
constitute, its legal, valid and binding obligation enforceable in
accordance with its terms.
(d) NON-CONFLICT
The entry into and performance by it of, and the transactions
contemplated by, the Funding 1 Liquidity Documents do not and will
not:
19
(i) result in the existence or imposition of nor oblige it to create
any Security Interest in favour of any person (other than the
Funding 1 Secured Creditors) over all or any of its present or
future revenues or assets;
(ii) conflict with any law or regulation or judicial or official
order;
(iii) conflict with its constitutional documents; or
(iv) conflict with any document which is binding upon it or any of
its assets.
(e) NO DEFAULT
No Liquidity Facility Default is outstanding or might result from the
making of any Funding 1 Liquidity Facility Loan.
(f) AUTHORISATIONS
All authorisations required or desirable in connection with the entry
into, performance, validity and enforceability of, and the
transactions contemplated by, the Funding 1 Liquidity Documents have
been obtained or effected (as appropriate) and are in full force and
effect.
(g) LITIGATION
No litigation, arbitration or administrative proceedings involving
Funding 1 are current or, to its knowledge, pending or threatened,
which might, if adversely determined, have a material adverse effect
on the business or financial condition of Funding 1 or the ability of
Funding 1 to perform its obligations under this Agreement.
(h) SECURITY INTERESTS
None of the assets of Funding 1 is affected by any Security Interest,
and Funding 1 is not a party to, nor is it or any of its assets bound
by, any order, agreement or instrument under which Funding 1 is, or in
certain events may be, required to create, assume or permit to arise
any Security Interest, other than the Security Interests created by
the Funding 1 Deed of Charge.
(i) NO OTHER BUSINESS
(i) It has not traded or carried on any business since its date of
incorporation or engaged in any activity whatsoever that is not
incidental to or necessary in connection with any of the
activities in which the Transaction Documents provide or
envisage that it will engage; and
(ii) it is not party to any material agreements other than the
Transaction Documents.
(j) OWNERSHIP
(i) Its entire issued share capital is legally and beneficially
owned and controlled by Holdings; and
(ii) its shares are fully paid.
20
(k) GOOD TITLE AS TO ASSETS
Funding 1 is and will remain the absolute beneficial owner of the
Funding 1 Share and absolute legal and beneficial owner of all other
assets charged or assigned by the Funding 1 Deed of Charge to which it
is a party.
(l) TAX
(i) It is tax resident and legally domiciled in its jurisdiction of
incorporation; and
(ii) it has no branch, business establishment or other fixed
establishment outside the United Kingdom.
(m) FUNDING 1 DEED OF CHARGE
The Funding 1 Deed of Charge creates, or will create when the Funding
1 Liquidity Facility Stand-by Account is opened and the Funding 1
Liquidity Facility Stand-By Deposit is credited to such account, a
first priority Security Interest of the type described in the Funding
1 Deed of Charge over the Funding 1 Liquidity Facility Stand-by
Deposit in favour of the Security Trustee.
For the avoidance of doubt, a breach by Funding 1 of any representation or
warranty contained in this CLAUSE 14.1 or otherwise in this Agreement shall
not entitle the Funding 1 Liquidity Facility Provider to terminate this
Agreement or declare the Funding 1 Liquidity Facility Loans or the Funding
1 Liquidity Facility Stand-by Loans or any other amounts payable under this
Agreement due and payable or to prevent any utilisation of the Funding 1
Liquidity Facility or the Stand-by Facility or any Funding 1 Liquidity
Facility Loan being made.
14.2 REPRESENTATIONS AND WARRANTIES BY THE FUNDING 1 LIQUIDITY FACILITY PROVIDER
The Funding 1 Liquidity Facility Provider makes the representations and
warranties set out in this CLAUSE 14.2 to Funding 1 and the Security
Trustee.
(a) STATUS
It is duly incorporated with limited liability under the laws of the
jurisdiction of its incorporation and is an authorised institution
under the FSMA 2000.
(b) TAX STATUS
It is a Qualifying Lender.
(c) POWERS AND AUTHORISATIONS
The documents which contain or establish its constitution include
provisions which give power, and all necessary corporate authority has
been obtained and action taken, for it to sign and deliver, and
perform the transactions contemplated in this Agreement and the
agreements entered into in connection herewith and this Agreement and
the agreements entered into in connection herewith constitute its
valid, legal and binding obligations.
(d) RATING
21
It has the Requisite Ratings (and will promptly notify both Funding 1
and the Security Trustee of the occurrence of any downgrading by the
Rating Agencies of any of its rated debt obligations to a level below
the Requisite Ratings).
(e) NON-VIOLATION
Neither the signing and delivery of this Agreement nor the performance
of any of the transactions contemplated in it does or will contravene
or constitute a default under, or cause to be exceeded any limit on
the Funding 1 Liquidity Facility Provider or the powers of its
directors imposed by or contained in (i) any law by which it or any of
its assets is bound or affected, or (ii) any agreement to which it is
a party or by which any of its assets is bound.
14.3 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
The representations and warranties set out in this CLAUSE 14
(Representations and warranties):
(a) are made on the date of this Agreement; and
(b) save in respect of the representation and warranty of the Funding 1
Liquidity Facility Provider given under CLAUSE 14.2(B) (Tax Status),
are deemed to be repeated by the relevant Party on the date of each
Funding 1 Liquidity Facility Request, each Funding 1 Liquidity
Facility Drawdown Date and each Funding 1 Interest Payment Date with
reference to the facts and circumstances then existing.
15. UNDERTAKINGS
15.1 DURATION
The undertakings in this CLAUSE 15 remain in force from the date of this
Agreement for so long as any amount is or may be outstanding under this
Agreement or any Funding 1 Liquidity Facility Commitment is in force.
15.2 FINANCIAL INFORMATION
Funding 1 shall supply to the Funding 1 Liquidity Facility Provider and the
Security Trustee:
(a) as soon as the same are available (and in any case before the latest
date for publication in accordance with the Companies ▇▇▇ ▇▇▇▇, as
amended), its audited accounts for that financial year which shall be
in such form as will comply with relevant legal and accounting
requirements for the time being; and
(b) promptly such other information as the Security Trustee may reasonably
request.
15.3 INFORMATION - MISCELLANEOUS
Funding 1 shall supply to the Funding 1 Liquidity Facility Provider
promptly, such further information in its possession or control regarding
its financial condition and operations as it supplies to the Security
Trustee, if the Funding 1 Liquidity Facility Provider so requests.
15.4 NOTIFICATION OF DEFAULT
Funding 1 shall notify the Funding 1 Liquidity Facility Provider of any
Funding 1 Liquidity Facility Default (and the steps, if any, being taken to
remedy it) promptly upon its occurrence.
22
15.5 AUTHORISATIONS
Funding 1 shall promptly:
(a) obtain, maintain and comply with the terms of; and
(b) supply certified copies to the Funding 1 Liquidity Facility Provider
of,
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity or enforceability of,
any Funding ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
▇▇.▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ACTIVITIES
Funding 1 will not engage in any activities in the United States (directly
or through agents), will not derive any income from United States sources
as determined under United States income tax principles, and will not hold
any property if doing so would cause it to be engaged or deemed to be
engaged in a trade or business within the United States as determined under
United States income tax principles.
16. DEFAULT
16.1 FUNDING 1 LIQUIDITY FACILITY DEFAULT
Each of the events set out in CLAUSES 16.2 (Non-Payment) to 16.4
(Unlawfulness) (inclusive) is a Funding 1 Liquidity Facility Default
(whether or not caused by any reason whatsoever outside the control of
Funding 1 or any other person).
16.2 NON-PAYMENT
(a) Subject to PARAGRAPH (B) below, Funding 1 does not pay within 3 London
Business Days of the due date any amount payable by it under the Funding 1
Liquidity Documents at the place at and in the currency in which it is
expressed to be payable.
(b) The Funding 1 Liquidity Facility Provider agrees that the non-payment of
any Funding 1 Liquidity Subordinated Amounts shall only constitute a
Funding 1 Liquidity Facility Default under PARAGRAPH (A) above in
circumstances where Funding 1 has the requisite funds to pay such amounts
in accordance with the Funding 1 Deed of Charge on the relevant due date
and any such Funding 1 Liquidity Subordinated Amounts are not then paid.
16.3 INTERCOMPANY LOAN ACCELERATION NOTICE
An Intercompany Loan Acceleration Notice is served or the Security Trustee
having become bound to serve an Intercompany Loan Acceleration Notice fails
to do so within 30 days of becoming so bound.
16.4 UNLAWFULNESS
It is or becomes unlawful for Funding 1 to perform any of its obligations
under the Funding 1 Liquidity Documents.
16.5 ACCELERATION
On and at any time after the occurrence of a Funding 1 Liquidity Facility
Default and subject to CLAUSE 18 (Enforcement and Subordination) and if
such Funding 1 Liquidity Facility Default is continuing the Funding 1
Liquidity Facility Provider may by notice to Funding 1:
23
(a) cancel the Funding 1 Liquidity Facility Commitment; and/or
(b) demand that all or part of the Funding 1 Liquidity Facility Loans,
together with accrued interest, and all other amounts accrued under
this Agreement be immediately due and payable, whereupon they shall
become immediately due and payable; and/or
(c) demand that all or part of the Funding 1 Liquidity Facility Loans be
payable on demand, whereupon they shall immediately become payable on
demand.
17. FEES
17.1 COMMITMENT FEE AND CONTINGENT FEE
(a) Funding 1 shall (subject to CLAUSE 17.1(B) and (C) below and to CLAUSE 18
(Enforcement and Subordination)) pay to the Funding 1 Liquidity Facility
Provider a commitment fee computed at the rate of 0.08 per cent. per annum
on the undrawn, uncancelled amount of the Funding 1 Liquidity Facility
Commitment during the period from the date of this Agreement up to and
including the last day of the Funding 1 Liquidity Facility Commitment
Period.
(b) In the event that a Funding 1 Liquidity Facility Stand-by Drawing is made,
and for so long as any amount is outstanding under the First Issuer
Intercompany Loan:
(i) in respect of a Funding 1 Liquidity Facility Stand-by Drawing up to
(and including) the first [GBP]60,000,000, the Commitment Fee
referred to in CLAUSE 17.1(A) (Commitment Fee and Contingent Fee) will
not be payable and in its place Funding 1 will (subject to CLAUSE 18
(Enforcement and Subordination)) pay to the Funding 1 Liquidity
Facility Provider interest as determined in accordance with Clause 8.1
(Interest Rate (Funding 1 Liquidity Facility Drawing)) and Clause 8.2
(Interest Rate (Funding 1 Liquidity Facility Stand-by Drawings)); and
(ii) in respect of a Funding 1 Liquidity Facility Stand-by Drawing equal to
and in excess of [GBP]60,000,001, the Commitment Fee referred to in
CLAUSE 17.1(A) (Commitment Fee and Contingent Fee) will not be payable
and in its place Funding 1 will (subject to CLAUSE 18 (Enforcement and
Subordination) pay to the Funding 1 Liquidity Facility Provider a
contingent fee computed at the rate of 0.38 per cent. per annum on the
amount of the Funding 1 Liquidity Facility Stand-by Drawing in excess
of [GBP]60,000,000, together with, for the avoidance of doubt, any
amount payable pursuant to Clause 17.1(b)(i) (Commitment Fee and
Contingent Fee) with respect to a Funding 1 Liquidity Facility
Stand-by Drawing up to (and including) the first [GBP]60,000,000,
plus an amount equal to any interest received by Funding 1 on the
Funding 1 Liquidity Facility Stand-by Account insofar as it relates to
the amount in excess of [GBP]60,000,000.
(c) In the event that the First Issuer Intercompany Loan is repaid or is
otherwise cancelled and a Funding 1 Liquidity Stand-by Drawing is made, the
Commitment Fee referred to in CLAUSE 17.1(A) (Commitment Fee and Contingent
Fee) will not be payable and in its place Funding 1 will (subject to CLAUSE
18 (Enforcement and Subordination) pay to the Funding 1 Liquidity Facility
Provider a contingent fee computed at the rate of 0.38 per cent. per annum
on the amount of the Funding 1 Liquidity Stand-by Drawing, plus an amount
equal to any interest received by Funding 1 on the Funding 1 Liquidity
Facility Stand-by Account.
(d) Subject to CLAUSE 18 (Enforcement and Subordination), the accrued
commitment fee and contingent fee is payable quarterly in arrear on each
Funding 1 Interest Payment Date. The accrued commitment fee and contingent
fee is also payable to the Funding 1 Liquidity
24
Facility Provider on the cancelled amount of the Funding 1 Liquidity
Facility Commitment at the time the cancellation takes effect.
17.2 VAT
(a) All payments to be made by Funding 1 under the Funding 1 Liquidity
Documents are exclusive of VAT chargeable thereon and Funding 1 shall pay
to the Funding 1 Liquidity Facility Provider a sum in respect of any VAT
chargeable in respect of any supply made by the Funding 1 Liquidity
Facility Provider for the purposes of VAT in connection with the Funding 1
Liquidity Documents.
(b) If VAT is chargeable on any supply made by the Funding 1 Liquidity Facility
Provider to any other person in connection with a Funding 1 Liquidity
Document and Funding 1 is required by the terms of any Funding 1 Liquidity
Document to pay an amount equal to the consideration for such supply to the
Funding 1 Liquidity Facility Provider, Funding 1 shall also pay to the
Funding 1 Liquidity Facility Provider (in addition to and at the same time
as paying such amount) an amount equal to the amount of such VAT.
(c) Where under the Funding 1 Liquidity Documents, Funding 1 is required to
reimburse or indemnify the Funding 1 Liquidity Facility Provider against
any costs, expenses (including legal fees), loss or liability or otherwise,
such obligation to reimburse or indemnify shall extend to any VAT charged
to the Funding 1 Liquidity Facility Provider on such costs, expenses
(including legal fees) or in respect of such loss, liability or otherwise
which is irrecoverable by the Funding 1 Liquidity Facility Provider.
18. ENFORCEMENT AND SUBORDINATION
(a) The Funding 1 Liquidity Facility Provider acknowledges to the Security
Trustee that it is bound by the terms of the Funding 1 Deed of Charge and,
in particular, confirms that no sum, whether in respect of principal or
interest or otherwise relating to any Funding 1 Liquidity Facility Loan,
shall be paid by Funding 1 except in accordance with the provisions of the
Funding 1 Cash Management Agreement and the Funding 1 Deed of Charge unless
and until all sums required by the Funding 1 Cash Management Agreement or
the Funding 1 Deed of Charge, as the case may be, to be paid or provided
for in priority thereto have been paid or discharged in full.
(b) The Funding 1 Liquidity Facility Provider further agrees that only the
Security Trustee may enforce the security created in favour of, inter alia,
the Funding 1 Liquidity Facility Provider and the Security Trustee by the
Funding 1 Deed of Charge and that the Funding 1 Liquidity Facility Provider
shall not take any steps for the purpose of:
(i) recovering any debts whatsoever owing to it by Funding 1 save as
provided for in accordance with the terms of the Funding 1 Deed of
Charge (including, without limitation, by exercising any right of
set-off); or
(ii) enforcing any rights arising out of this Agreement against Funding 1;
or
(iii) procuring the winding-up, administration or liquidation of Funding 1
in respect of any of its liabilities whatsoever,
unless the Security Trustee, having become bound to serve an Intercompany
Loan Acceleration Notice, fails to do so within 30 days of becoming so
bound and that failure is continuing (in which case the Funding 1 Liquidity
Facility Provider shall be entitled to take any such steps and proceedings
as it shall deem necessary other than (i) any legal proceedings
25
for the winding-up of, or for an administration order or (ii) filing
documents with the court for the appointment of an administrator or (iii)
serving a notice of intention to appoint an administrator, in respect of
Funding 1) provided that the Funding 1 Liquidity Facility Provider shall
not be entitled to take any steps or proceedings pursuant to this Agreement
which would contravene CLAUSES 5 to 9 of the Funding 1 Deed of Charge.
(c) Subject to PARAGRAPH (B) above, the Funding 1 Liquidity Facility Provider
agrees to defer taking any action or proceedings against Funding 1 to
recover any amounts payable by Funding 1 to the Funding 1 Liquidity
Facility Provider under this Agreement except to the extent expressly
permitted by the provisions of the Funding 1 Deed of Charge unless and
until (then only to the extent that) Funding 1 has assets sufficient to
meet such claim in full having taken into account all other liabilities
(actual, contingent or prospective) of Funding 1 which under the Funding 1
Deed of Charge rank pari passu with or in priority to its liabilities to
the Funding 1 Liquidity Facility Provider under this Agreement, provided
however that nothing in this PARAGRAPH (C) shall prevent the Funding 1
Liquidity Facility Provider from proving for the full amount owed to it by
Funding 1 under this Agreement in the liquidation of Funding 1.
(d) Without prejudice to the other provisions of this CLAUSE 18, the Funding 1
Liquidity Facility Provider covenants with the Security Trustee that if,
whether in the liquidation of Funding 1 or otherwise (and notwithstanding
the provisions of this CLAUSE 18), any payment (whether of principal,
interest or otherwise) is received by it in respect of a Funding 1
Liquidity Facility Loan other than in accordance with CLAUSES 4 and 6 of
the Funding 1 Cash Management Agreement and CLAUSES 7 and 8 of the Funding
1 Deed of Charge, the amount so paid shall be received and held by the
Funding 1 Liquidity Facility Provider upon trust for the Security Trustee
and shall be paid over to the Security Trustee forthwith upon receipt
provided however that this PARAGRAPH (D) shall have effect only to the
extent that it does not constitute or create and is not deemed to
constitute or create any mortgage, charge or other Security Interest of any
kind.
19. EXPENSES
19.1 INITIAL AND SPECIAL COSTS
Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
forthwith on demand pay the Funding 1 Liquidity Facility Provider the
amount of all costs and expenses (including reasonable legal fees) incurred
by it in connection with:
(a) the negotiation, preparation, printing and execution of:
(i) this Agreement and any other documents referred to in this
Agreement;
(ii) any other Funding 1 Liquidity Document (other than a Novation
Certificate) executed after the date of this Agreement;
(b) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf of
Funding 1 or, in the case of CLAUSE Error! Reference source not found.
(Change of currency), the Funding 1 Liquidity Facility Provider and
relating to a Funding 1 Liquidity Document or a document referred to
in any Funding 1 Liquidity Document; and
(c) any other matter, not of an ordinary administrative nature, arising
out of or in connection with a Funding 1 Liquidity Document.
26
19.2 ENFORCEMENT COSTS
Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
forthwith on demand pay to the Funding 1 Liquidity Facility Provider the
amount of all costs and expenses (including legal fees) incurred by it:
(a) in connection with the enforcement of, or the preservation of any
rights under, any Funding 1 Liquidity Document; or
(b) in investigating any possible Funding 1 Liquidity Facility Default.
20. STAMP DUTIES
Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall pay
and forthwith on demand indemnify the Funding 1 Liquidity Facility Provider
against any liability it incurs in respect of any United Kingdom stamp,
registration and similar tax which is or becomes payable in connection with
the entry into, performance or enforcement of any Funding 1 Liquidity
Document.
21. INDEMNITIES
21.1 CURRENCY INDEMNITY
(a) Subject to CLAUSE 18 (Enforcement and Subordination), if the Funding 1
Liquidity Facility Provider receives an amount in respect of Funding 1's
liability under the Funding 1 Liquidity Documents or if that liability is
converted into a claim, proof, judgment or order in a currency other than
the currency (the CONTRACTUAL CURRENCY) in which the amount is expressed to
be payable under the relevant Funding 1 Liquidity Document:
(i) Funding 1 shall indemnify the Funding 1 Liquidity Facility Provider
as an independent obligation against any loss or liability arising
out of or as a result of the conversion;
(ii) if the amount received by the Funding 1 Liquidity Facility Provider,
when converted into the contractual currency at a market rate in the
usual course of its business, is less than the amount owed in the
contractual currency, Funding 1 shall forthwith on demand pay to the
Funding 1 Liquidity Facility Provider an amount in the contractual
currency equal to the deficit; and
(iii) Funding 1 shall forthwith on demand pay to the Funding 1 Liquidity
Facility Provider on demand any exchange costs and taxes payable in
connection with any such conversion.
(b) Funding 1 waives any right it may have in any jurisdiction to pay any
amount under the Funding 1 Liquidity Documents in a currency other than
that in which it is expressed to be payable.
21.2 OTHER INDEMNITIES
Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
forthwith on demand indemnify the Funding 1 Liquidity Facility Provider
against any loss or liability which that Funding 1 Liquidity Facility
Provider incurs as a consequence of:
27
(a) the operation of CLAUSE 16.6 (Acceleration) or if the loss or
liability is caused by Funding 1 making a payment other than in
accordance with CLAUSE 9 (Payments);
(b) any payment of principal or an overdue amount being received from any
source otherwise than on its Funding 1 Interest Payment Date and, for
the purposes of this PARAGRAPH (B), the Funding 1 Interest Payment
Date of an overdue amount is the last day of each Designated Interest
Period (as defined in CLAUSE 8.4 (Default interest)); or
(c) (other than by reason of negligence or default by the Funding 1
Liquidity Facility Provider) a Funding 1 Liquidity Facility Loan not
being made after Funding 1 has delivered a Funding 1 Liquidity
Facility Request for that Funding 1 Liquidity Facility Loan; or
(d) any reasonable costs, including legal fees, which the Funding 1
Liquidity Facility Provider may sustain or incur as a consequence of
any default by Funding 1 in the performance of any of the obligations
expressed to be assumed by it in this Agreement.
Funding 1's liability in each case includes any loss of margin or other
loss or expense on account of funds borrowed, contracted for or utilised to
fund any amount payable under any Funding 1 Liquidity Document, any amount
repaid or prepaid or any Funding 1 Liquidity Facility Loan.
22. EVIDENCE AND CALCULATIONS
22.1 ACCOUNTS
Accounts maintained by the Funding 1 Liquidity Facility Provider in
connection with this Agreement are prima facie evidence of the matters to
which they relate.
22.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by the Funding 1 Liquidity Facility
Provider of a rate or amount under this Agreement is, in the absence of
manifest error, conclusive evidence of the matters to which it relates.
22.3 CALCULATIONS
Interest (including any applicable Mandatory Liquid Asset Cost) and the fee
payable under CLAUSE 17.1 (Commitment fee) accrue from day to day and are
calculated on the basis of the actual number of days elapsed and a year of
365 days or, if market practice dictates, 360 days.
23. AMENDMENTS AND WAIVERS
23.1 PROCEDURE
Subject to CLAUSE 25 of the Funding 1 Deed of Charge (Supplemental
Provisions Regarding the Security Trustee), any term of the Funding 1
Liquidity Documents may be amended or waived with the written agreement of
Funding 1, the Security Trustee and the Funding 1 Liquidity Facility
Provider.
28
23.2 WAIVERS AND REMEDIES CUMULATIVE
The rights of the Funding 1 Liquidity Facility Provider under the Funding 1
Liquidity Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the general law;
and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a waiver of
that right.
24. CHANGES TO THE PARTIES
24.1 TRANSFERS BY FUNDING 1
Funding 1 may not assign, transfer, novate or dispose of any of, or any
interest in, the Funding 1 Liquidity Facility Commitment and/or rights
and/or obligations under this Agreement except that Funding 1 may assign
its rights under this Agreement to the Security Trustee pursuant to the
Funding 1 Deed of Charge.
24.2 TRANSFER BY THE SECURITY TRUSTEE
The Security Trustee may assign its rights under this Agreement to any
successor security trustee or trustees under the Funding 1 Deed of Charge.
24.3 TRANSFERS BY THE CASH MANAGER
The Cash Manager may assign its rights under this Agreement to any
successor Cash Manager under the Cash Management Agreement.
24.4 TRANSFERS BY THE FUNDING 1 LIQUIDITY FACILITY PROVIDER
(a) The Funding 1 Liquidity Facility Provider may, subject to the following
provisions of this Sub-clause, at any time assign or transfer (including by
way of novation) any of its rights and obligations under this Agreement to
a new liquidity facility provider which is a Qualifying Lender and has the
Requisite Ratings (the NEW LIQUIDITY FACILITY PROVIDER).
(b) The consent of Funding 1 and the Security Trustee is required for any
assignment or transfer unless:
(i) the New Liquidity Facility Provider is an Affiliate of the Funding 1
Liquidity Facility Provider; or
(ii) a Funding 1 Liquidity Facility Default is outstanding (in which case
no consent is required from Funding 1 or the Security Trustee).
(c) The consent of Funding 1 and the Security Trustee must not be unreasonably
withheld or delayed. Funding 1 and the Security Trustee will be deemed to
have given their consent fourteen days after Funding 1 and the Security
Trustee are given notice of the request unless it is expressly refused by
Funding 1 or the Security Trustee within that time. Upon such consent being
given (or deemed given), Funding 1 and the Security Trustee will take such
steps as are reasonably required by the Funding 1 Liquidity Facility
Provider to effect the assignment or transfer.
29
(d) A transfer of obligations will be effective only if the Funding 1 Liquidity
Facility Provider and the New Liquidity Facility Provider deliver to
Funding 1 and the Security Trustee a duly completed certificate,
substantially in the form of Schedule 4 (Form of Novation Certificate) and
each of Funding 1 and the Security Trustee executes the certificate to
confirm its consent to the transfer. On the transfer becoming effective in
this manner the Funding 1 Liquidity Facility Provider will be released from
its obligations under this Agreement to the extent that they are
transferred to the New Liquidity Facility Provider.
(e) Nothing in this Agreement restricts the ability of the Funding 1 Liquidity
Facility Provider to sub-contract an obligation if the Funding 1 Liquidity
Facility Provider remains primarily liable under this Agreement for that
obligation.
24.5 ASSIGNMENTS AND TRANSFERS REQUIRED BY FUNDING 1
(a) If:
(i) Funding 1 is, or will be, required to pay to the Funding 1 Liquidity
Facility Provider a Tax Payment or an Increased Cost or a Relevant
Event has occurred; and
(ii) Funding 1 has not cancelled the Funding 1 Liquidity Facility
Commitment in whole pursuant to Clause 7.2 (Voluntary and
Cancellation),
then Funding 1 may by notice to the Funding 1 Liquidity Facility Provider,
require the Funding 1 Liquidity Facility Provider to assign or transfer
(including by way of novation) its rights and obligations under this
Agreement to a new liquidity facility provider which is a Qualifying Lender
and has the Requisite Ratings in such manner as is required by Funding 1
and approved by the Security Trustee.
(b) A condition precedent to any assignment or transfer by Funding 1 under this
Clause 24.5, is that the Funding 1 Liquidity Facility Provider has been
repaid all amounts outstanding to it under this Agreement.
(c) If there is any conflict between Funding 1's rights under paragraph (a)
above and the Funding 1 Liquidity Facility Provider's rights under
Sub-clause 24.4 (Assignments and transfers by the Funding 1 Liquidity
Facility Provider), then the views of Funding 1 will prevail with the
result that if each of Funding 1 and the Funding 1 Liquidity Facility
Provider had selected a New Liquidity Facility Provider, or wished to adopt
a different approach under paragraph (a) above or Sub-clause 24.4, as
appropriate, the selection and/or the approach to be adopted will be that
selected or adopted (as the case may be) by Funding 1.
24.6 COSTS RESULTING FROM CHANGE OF LIQUIDITY FACILITY PROVIDER OR FACILITY
OFFICE
If:
(a) the Funding 1 Liquidity Facility Provider assigns or transfers any of
its rights and obligations under the Funding 1 Liquidity Documents
under Sub-clause 24.4 (Assignments and transfers by the Funding 1
Liquidity Facility Provider) or changes its facility office; and
(b) as a result of circumstances existing at the date the assignment,
transfer or change occurs, Funding 1 would be obliged to pay a Tax
Payment or an Increased Cost,
then, unless the assignment, transfer or change is made by the Funding 1
Liquidity Facility Provider to mitigate any circumstances giving rise to
the Tax Payment, Increased Cost or a
30
right to be prepaid and/or cancelled by reason of illegality, Funding 1
need only pay that Tax Payment or Increased Cost to the same extent that it
would have been obliged to if no assignment, transfer or change had
occurred.
25. DISCLOSURE OF INFORMATION
The Funding 1 Liquidity Facility Provider may disclose to any person with
whom it is proposing to enter, or has entered into, any kind of transfer,
participation or other agreement in relation to this Agreement:
(a) a copy of any Funding 1 Liquidity Document; and
(b) any information which the Funding 1 Liquidity Facility Provider has
acquired under or in connection with any Funding 1 Liquidity Document,
if that person undertakes to Funding 1 and the Security Trustee to keep the
information confidential.
26. SET-OFF
(a) The Funding 1 Liquidity Facility Provider undertakes with Funding 1 and the
Security Trustee not to exercise or claim any right of set-off or
combination or consolidation of accounts in respect of any account of
Funding 1 with the Funding 1 Liquidity Facility Provider and/or interest
accruing on amounts in any such account or any part of such account in or
towards, or conditionally upon satisfaction of any liabilities to the
Funding 1 Liquidity Facility Provider of Funding 1 or itself in any other
capacity whatsoever or any other person.
(b) In the event that the Funding 1 Liquidity Facility Provider (in breach of
its undertaking in PARAGRAPH (A) above) exercises any right of set-off or
combination or consolidation of accounts, the Funding 1 Liquidity Facility
Provider shall pay to Funding 1 such additional amount so that the net
amount received by Funding 1 will equal the full amount which would have
been received by it if the Funding 1 Liquidity Facility Provider had not
exercised or claimed such right of set-off or combination or consolidation
of accounts.
27. SEVERABILITY
If a provision of any Funding 1 Liquidity Document is or becomes illegal,
invalid or unenforceable in any jurisdiction, that shall not affect:
(a) the legality, validity or enforceability in that jurisdiction of any
other provision of the Funding 1 Liquidity Documents; or
(b) the legality, validity or enforceability in other jurisdictions of
that or any other provision of the Funding 1 Liquidity Documents.
28. COUNTERPARTS
This Agreement may be executed in any number of counterparts (manually or
by facsimile) each of which, when executed and delivered, shall constitute
an original, but all the counterparts shall together constitute but one and
the same instrument provided, however, that this Agreement shall have no
force or effect until it is executed by the last party to execute the same
and shall be deemed to have been executed and delivered in the place where
such last party executed this Agreement.
31
29. NOTICES
29.1 GIVING OF NOTICES
Any notice, communication or demand made under or in connection with this
Agreement shall be in writing and shall be delivered personally, or by
post, fax or cable to the addresses given in CLAUSE 29.2 (Addresses) or at
such other address as the recipient may have notified to the other party in
writing. Proof of posting or despatch of any notice or communication shall
be deemed to be proof of receipt:
(a) in the case of a letter, on the third business day after posting; and
(b) in the case of a facsimile on the business day of despatch.
29.2 ADDRESSES FOR NOTICES
The addresses referred to in this CLAUSE 29 (Notices) are as follows:
(a) in the case of Funding 1, to Permanent Funding (No. 1) Limited at
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile number +44
(▇) ▇▇ ▇▇▇▇ ▇▇▇▇) for the attention of the Secretary with a copy to
HBOS Treasury Services plc, ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(facsimile no. ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇) for the attention of Head of
Capital Markets and Securitisation;
(b) in the case of the Cash Manager, to Halifax plc at ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (LP/3/3/SEC) (facsimile number +44 (0)
113 235 7511) for the attention of Head of Mortgage Securitisation
with a copy to HBOS Treasury Services plc, ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ (facsimile no. ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇) for the attention of
Head of Capital Markets and Securitisation;
(c) in the case of the Security Trustee, to The Bank of ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number + 44 (020) 7964
6061/6399) for the attention of Corporate Trust Services; and
(d) in the case of the Funding 1 Liquidity Facility Provider, to JPMorgan
Chase Bank, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile no. +44 20
7777 5305/5311) for the attention of European Loans,
or to such other address or facsimile number or for the attention of such
other person or entity as may from time to time be notified by any party to
the others by written notice in accordance with the provisions of this
CLAUSE 29.
30. THIRD PARTY RIGHTS
A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce any term of this
Agreement, but this does not affect any right or remedy of a third party
which exists or is available apart from that Act.
31. GOVERNING LAW
This Agreement is governed by and construed in accordance with English law.
32. SUBMISSION TO JURISDICTION
Each party to this Agreement hereby irrevocably submits to the
non-exclusive jurisdiction of
32
the English courts in any action or proceeding arising out of or relating
to this Agreement, and hereby irrevocably agrees that all claims in respect
of such action or proceeding may be heard and determined by such courts.
Each party to this Agreement hereby irrevocably waives, to the fullest
extent it may possibly do so, any defence or claim that the English courts
are an inconvenient forum for the maintenance or hearing of such action or
proceeding.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
33
SCHEDULE 1
CONDITIONS PRECEDENT DOCUMENTS
1. A copy of the memorandum and articles of association and certificate of
incorporation of Funding 1.
2. A copy of a resolution of the board of directors of Funding 1:
(a) approving the terms of, and the transactions contemplated by, this
Agreement and resolving that it execute this Agreement;
(b) authorising a specified person or persons to execute this Agreement on
its behalf; and
(c) authorising a specified person or persons, on its behalf, to sign
and/or despatch all other documents and notices to be signed and/or
despatched by it under or in connection with this Agreement.
3. A specimen of the signature of each person authorised by the resolution
referred to in PARAGRAPH 2 above.
4. A certificate of an authorised signatory of Funding 1 certifying that each
copy document specified in this SCHEDULE 1 is correct, complete and in full
force and effect as at a date no earlier than the date of this Agreement.
5. The Transaction Documents.
6. Confirmation from ▇▇▇▇▇▇▇▇ Chance LLP as legal counsel to the Security
Trustee that they have received, on behalf of the Security Trustee, a
transaction legal opinion from ▇▇▇▇▇ & Overy LLP.
34
SCHEDULE 2
CALCULATION OF THE MANDATORY LIQUID ASSET COST
(a) For the purposes of PARAGRAPH (A) of the definition of Mandatory Liquid
Asset Cost, the Mandatory Liquid Asset Cost for a Funding 1 Liquidity
Facility Loan for its Funding 1 Liquidity Facility Interest Period is the
rate determined by the Funding 1 Liquidity Facility Provider (rounded
upward, if necessary, to four decimal places) calculated in accordance with
the following formulae:
BY + S(Y - Z) + Fx(0.01)
------------------------ % per annum = Mandatory Liquid Asset Cost
100 - (B + S)
where on the day of application of the formula:
B is the percentage of the Funding 1 Liquidity Facility Provider's
eligible liabilities (in excess of any stated minimum) which the Bank
of England requires the Funding 1 Liquidity Facility Provider to hold
on a non-interest-bearing deposit account in accordance with its cash
ratio requirements;
Y is the applicable LIBOR for that Funding 1 Liquidity Facility
Provider;
S is the percentage of the Funding 1 Liquidity Facility Provider's
eligible liabilities which the Bank of England requires the Funding 1
Liquidity Facility Provider to place as a special deposit;
Z is the lower of Y and the interest rate per annum paid by the Bank of
England on special deposits; and
F is the charge payable by the Funding 1 Liquidity Facility Provider to
the Financial Services Authority under the fees rules (but, for this
purpose, calculated by the Funding 1 Liquidity Facility Provider on a
notional basis as being the average of the fee tariffs within fee
block Category A1 (Deposit acceptors) of the fees rules, applying any
applicable discount and ignoring any minimum fee required under the
fees rules) and expressed in pounds per [GBP]1 million of the tariff
base of the Funding 1 Liquidity Facility Provider.
(b) For the purposes of this Schedule 2:
(i) ELIGIBLE LIABILITIES and SPECIAL DEPOSITS have the meanings given to
them at the time of application of the formula under or pursuant to
the Bank of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or by the Bank of England; and
(ii) FEE BASE means the then current rules on periodic fees in the
Supervision Manual of the FSA Handbook; and
(iii) TARIFF BASE has the meaning given to it in the fees rules.
(c) In the application of the formula, B, Y, S and Z are included in the
formula as figures and not as percentages, e.g. if B = 0.5% and Y = 15%, BY
is calculated as 0.5 x 15. A negative result obtained by subtracting Z from
Y is taken as zero.
35
(d) (i) Each formula is applied on the first day of the relevant Funding 1
Liquidity Interest Period.
(ii) Each rate calculated in accordance with the formula is, if necessary,
rounded upward to four decimal places.
(iii) If the formula produces a negative percentage, the percentage shall
be taken as zero.
(e) If the Funding 1 Liquidity Facility Provider determines, after consultation
with Funding 1 that a change in circumstances has rendered, or will render,
the formula inappropriate, the Funding 1 Liquidity Facility Provider shall
notify Funding 1 of the manner in which the Mandatory Liquidity Asset Cost
will subsequently be calculated. The manner of calculation so notified by
the Funding 1 Liquidity Facility Provider shall, in the absence of manifest
error, be binding on all the parties.
36
SCHEDULE 3
FORM OF FUNDING 1 LIQUIDITY FACILITY REQUEST
To: JPMorgan Chase Bank as Funding 1 Liquidity Facility Provider
Copy: The Bank of New York (as Security Trustee)
From: Permanent Funding (No. 1) Limited
Date:[ ]
PERMANENT FUNDING (NO. 1) LIMITED
[GBP][{circle},000,000] FUNDING 1 LIQUIDITY FACILITY AGREEMENT
(AS AMENDED AND/OR RESTATED FROM TIME TO TIME)
1. We wish to borrow a Funding 1 Liquidity [Facility Drawing/Facility Stand-by
Drawing] as follows:
(a) Funding 1 Liquidity Facility Drawdown Date: [ ]
(b) Funding 1 Liquidity Facility
(c) Amount:[GBP][ ]
(d) Payment Instructions: [ ].**
(e) Term of Funding 1 Liquidity [Facility Drawing/Facility Stand-by
Drawing]: [ ]
2. We confirm that each condition specified in CLAUSE 4.2 (Further conditions
precedent) is satisfied on the date of this Funding 1 Liquidity Facility
Request.
3. We confirm that the Funding 1 Liquidity Facility Drawing is to be used for
one of the purposes specified in CLAUSE 3 (Purpose).
By:
PERMANENT FUNDING (NO. 1) LIMITED
Authorised Signatory
--------
** This will be the Funding 1 Liquidity Facility Stand-by Account if this is a
Funding 1 Liquidity Facility Stand-by Drawing.
37
SCHEDULE 4
FORM OF NOVATION CERTIFICATE
To: [The Bank of New York] (as Security Trustee)
From: [THE EXISTING FUNDING 1 LIQUIDITY FACILITY PROVIDER] and
[THE NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER] Date: [ ]
PERMANENT FUNDING (NO. 1) LIMITED
[GBP][{circle},000,000] FUNDING 1 LIQUIDITY FACILITY AGREEMENT AS AMENDED
AND/OR RESTATED FROM TIME TO TIME)
We refer to CLAUSE Error! Reference source not found. (Procedure for novations).
1. We JPMorgan Chase Bank (the EXISTING FUNDING 1 LIQUIDITY FACILITY PROVIDER)
and [ ] (the NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER) agree to the
Existing Funding 1 Liquidity Facility Provider and the New Funding 1
Liquidity Facility Provider novating all the Existing Funding 1 Liquidity
Facility Provider's FUNDING 1 LIQUIDITY Facility Commitment (or part)
and/or rights and obligations referred to in the Schedule in accordance
with CLAUSE Error! Reference source not found. (Procedure for novations).
2. The specified date for the purposes of CLAUSE Error! Reference source not
found. (Procedure for novations) is [date of novation].
3. The New Funding 1 Liquidity Facility Provider makes the representations and
warranties to be made by it in accordance with CLAUSE 14 (Representations
and warranties) as at [date of novation].
4. The address for notices of the New Funding 1 Liquidity Facility Provider
for the purposes of CLAUSE 29.2 (Addresses for notices) is set out in the
Schedule to this Novation Certificate.
5. This Novation Certificate is governed by English law.
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THE SCHEDULE
FUNDING 1 LIQUIDITY FACILITY COMMITMENT AND RIGHTS AND OBLIGATIONS TO BE NOVATED
[insert relevant details]
[NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER]
[Address for notices]
[Existing Funding 1 [New Funding 1 Liquidity [SECURITY TRUSTEE]
Liquidity Facility Provider] Facility Provider]
By: By: By:
Date: Date: Date:
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SIGNATORIES
FUNDING 1
SIGNED by )
for and on behalf of )
PERMANENT FUNDING (NO. 1) LIMITED )
FUNDING 1 LIQUIDITY FACILITY PROVIDER
SIGNED by )
for and on behalf of )
JPMORGAN CHASE BANK )
CASH MANAGER
SIGNED by )
for and on behalf of )
HALIFAX PLC )
SECURITY TRUSTEE
SIGNED by ) for and on behalf of )
THE BANK OF NEW YORK )
40