EXHIBIT 4.1
DRAFT
[▇▇▇▇▇ & ▇▇▇▇▇ GRAPHIC]
▇▇▇▇▇ & ▇▇▇▇▇ LLP
LOAN CONFIRMATION EIGHTH ISSUER
INTERCOMPANY LOAN AGREEMENT
PERMANENT FUNDING (NO. 1) LIMITED
as Funding 1
and
PERMANENT FINANCING (NO. 8) PLC
as Eighth Issuer
and
THE BANK OF NEW YORK
as Security Trustee
and
CITIBANK, N.A., LONDON BRANCH
as Agent Bank
[22nd] June, 2005
1
CONTENTS
CLAUSE PAGE
1. Interpretation............................. 1
2. Intercompany Loan Terms and Conditions..... 2
3. The Eighth Issuer Term Advances............ 2
4. Interest................................... 4
5. Repayment.................................. 6
6. Prepayment................................. 9
7. Certain Fees, etc.......................... 10
8. Application of Certain Provisions.......... 11
9. Addresses.................................. 12
10. Counterparts .............................. 13
11. Third Party Rights ........................ 13
12. Governing Law ............................. 13
SCHEDULE
1. Conditions Precedent in Respect of Drawdown 14
Signatories.................................... 17
2
THIS LOAN CONFIRMATION TO THE EIGHTH ISSUER INTERCOMPANY LOAN AGREEMENT is
dated [22nd] June, 2005
BETWEEN:
(1) PERMANENT FUNDING (NO. 1) LIMITED (registered in England and Wales No.
4267660), a private limited company incorporated in England and Wales
whose registered office is at ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(FUNDING 1);
(2) PERMANENT FINANCING (NO. 8) PLC (registered in England and Wales
No.5434519), a public limited company incorporated under the law of
England and Wales whose registered office is at ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the EIGHTH ISSUER);
(3) THE BANK OF NEW YORK, a New York banking corporation acting through its
offices at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (acting in its
capacity as SECURITY TRUSTEE); and
(4) CITIBANK, N.A., LONDON BRANCH, whose offices are at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (acting in its capacity as AGENT BANK).
IT IS AGREED as follows:
1. INTERPRETATION
1.1 The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Agreement and dated [22nd]
June, 2005 (as the same may be amended, varied or supplemented from time
to time with the consent of the parties to this Agreement) (the MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) and the eighth issuer master
definitions and construction schedule signed for the purposes of
identification by ▇▇▇▇▇ & ▇▇▇▇▇ LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ on
[22nd] June, 2005 (the EIGHTH ISSUER MASTER DEFINITIONS AND CONSTRUCTION
SCHEDULE) are expressly and specifically incorporated into this Agreement
and, accordingly, the expressions defined in the Master Definitions and
Construction Schedule and/or the Eighth Issuer Master Definitions and
Construction Schedule (as so amended, varied or supplemented from time to
time) shall, except where the context otherwise requires and save where
otherwise defined herein, have the same meanings in this Agreement and
this Agreement shall be construed in accordance with the interpretation
provisions set out in CLAUSE 2 (Interpretation and Construction) of the
Master Definitions and Construction Schedule and the Eighth Issuer Master
Definitions and Construction Schedule.
1.2 Unless the context otherwise requires, references in the Intercompany
Loan Terms and Conditions to:
CLOSING DATE means [22nd] June, 2005;
INTERCOMPANY LOAN means the Eighth Issuer Intercompany Loan;
INTERCOMPANY LOAN AGREEMENT means the Eighth Issuer Intercompany Loan
Agreement;
INTERCOMPANY LOAN CONFIRMATION means the Eighth Issuer Intercompany Loan
Confirmation;
ISSUER means the Eighth Issuer;
ISSUER TRANSACTION ACCOUNT means the Eighth Issuer Sterling Account;
1
NEW BASEL CAPITAL ACCORD means the new framework published by The Basel
Committee on Banking Supervision on 26th June, 2004 under the title
"Basel II: International Convergence of Capital Measurement and Capital
Standards: a Revised Framework";
NOTES means the Eighth Issuer Notes; and
EIGHTH ISSUER TERM ADVANCES has the meaning given in the Eighth Issuer
Master Definitions and Construction Schedule.
2. INTERCOMPANY LOAN TERMS AND CONDITIONS
Each of the parties to this Agreement agrees that the Intercompany Loan
Terms and Conditions signed by Funding 1, the Security Trustee and the
Agent Bank for the purposes of identification on 14th June, 2002, as
amended and restated on 6th March, 2003, 25th November, 2003, 12th March,
2004, 22nd July, 2004, 18th November, 2004 and 23rd March, 2005 and from
time to time and the provisions set out therein shall form part of this
Agreement and shall be binding on the parties to this Agreement as if
they had expressly been set out herein. References in this Agreement to
"this Agreement" shall be construed accordingly.
3. THE EIGHTH ISSUER TERM ADVANCES
3.1 EIGHTH ISSUER TERM AAA ADVANCES
On and subject to the terms of this Agreement, the Eighth Issuer grants
to Funding 1 a term loan which consists of the following sub-loans:
(a) the series 1 term AAA advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 1 TERM AAA ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 1 Class A Eighth Issuer Notes;
(b) the series 2 term AAA advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 2 TERM AAA ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 2 Class A Eighth Issuer Notes;
(c) the series 3 term AAA advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 3 TERM AAA ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 3 Class A Eighth Issuer Notes;
(d) the series 4 term AAA advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 4 TERM AAA ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 4 Class A Eighth Issuer Notes;
(e) the series 5A1 term AAA advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 5A1 TERM AAA ADVANCE)
and which corresponds to the principal amount upon issue of the
Series 5 Class A1 Eighth Issuer Notes; and
(f) the series 5A2 term AAA advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 5A2 TERM AAA ADVANCE
and together with the Eighth Issuer Series 5A1 Term AAA Advance,
the EIGHTH ISSUER SERIES 5 TERM AAA ADVANCES) and which corresponds
to the principal amount upon issue of the Series 5 Class A2 Eighth
Issuer Notes,
and together the Eighth Issuer Series 1 Term AAA Advance, the Eighth
Issuer Series 2 Term AAA Advance, the Eighth Issuer Series 3 Term AAA
Advance, the Eighth Issuer Series 4 Term AAA
2
Advance and the Eighth Issuer Series 5 Term AAA Advances are referred to
herein as the EIGHTH ISSUER TERM AAA ADVANCES.
3.2 EIGHTH ISSUER TERM AA ADVANCES
On and subject to the terms of this Agreement, the Eighth Issuer grants
to Funding 1 a term loan which consists of the following sub-loans:
(a) the series 1 term AA advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 1 TERM AA ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 1 Class B Eighth Issuer Notes;
(b) the series 2 term AA advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 2 TERM AA ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 2 Class B Eighth Issuer Notes;
(c) the series 3 term AA advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 3 TERM AA ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 3 Class B Eighth Issuer Notes; and
(d) the series 4 term AA advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 4 TERM AA ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 4 Class B Eighth Issuer Notes,
and together the Eighth Issuer Series 1 Term AA Advance, the Eighth
Issuer Series 2 Term AA Advance, the Eighth Issuer Series 3 Term AA
Advance, and the Eighth Issuer Series 4 Term AA Advance are referred to
herein as the EIGHTH ISSUER TERM AA ADVANCES.
3.3 EIGHTH ISSUER TERM BBB ADVANCES
On and subject to the terms of this Agreement, the Eighth Issuer grants
to Funding 1 a term loan which consists of the following sub-loans:
(a) the series 1 term BBB advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 1 TERM BBB ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 1 Class C Eighth Issuer Notes;
(b) the series 2 term BBB advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 2 TERM BBB ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 2 Class C Eighth Issuer Notes;
(c) the series 3 term BBB advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 3 TERM BBB ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 3 Class C Eighth Issuer Notes; and
(d) the series 4 term BBB advance in the maximum aggregate principal
amount of [GBP][__] (the EIGHTH ISSUER SERIES 4 TERM BBB ADVANCE)
and which corresponds to the sterling equivalent of the principal
amount upon issue of the Series 4 Class C Eighth Issuer Notes,
and together the Eighth Issuer Series 1 Term BBB Advance, the Eighth
Issuer Series 2 Term BBB Advance, the Eighth Issuer Series 3 Term BBB
Advance, and the Eighth Issuer Series 4 Term BBB Advance are referred to
herein as the EIGHTH ISSUER TERM BBB ADVANCES.
3
3.4 TERM ADVANCE RATING
The Term Advance Rating in respect of the Eighth Issuer Term AAA Advances
shall be AAA/Aaa/AAA, the Term Advance Rating in respect of the Eighth
Issuer Term AA Advances shall be AA/Aa3/AA and the Term Advance Rating in
respect of the Eighth Issuer Term BBB Advances shall be BBB/Baa2/BBB.
3.5 CONDITIONS PRECEDENT
Save as the Eighth Issuer and the Security Trustee may otherwise agree,
the Eighth Issuer Term Advances will not be available for utilisation
unless the Security Trustee has confirmed to Funding 1 that it or its
advisers have received all the information and documents listed
in SCHEDULE 1 hereof in form and substance satisfactory to the Security
Trustee.
4. INTEREST
4.1 RATE OF INTEREST TO FIRST FUNDING 1 INTEREST PAYMENT DATE
On the Closing Date the Agent Bank will determine the Initial Relevant
Screen Rate (as defined below) in respect of each Eighth Issuer Term
Advance as at or about 11.00 a.m. (London time) on that date. If the
Initial Relevant Screen Rate is unavailable, the Agent Bank will request
the principal London office of each of the Reference Banks to provide the
Agent Bank with its offered quotations to leading banks for two-month and
three-month sterling deposits of [GBP]10,000,000, in the London inter-
bank market as at or about 11.00 a.m. (London time) on such Closing Date.
The Term Advance Rates of Interest for the first Interest Period shall be
the aggregate of (a) the Relevant Margin and (b) the Initial Relevant
Screen Rate or, if the Initial Relevant Screen Rate is unavailable, the
linear interpolation of the arithmetic mean of such offered quotations
for two-month sterling deposits and the arithmetic mean of such offered
quotations for three-month sterling deposits (rounded upwards, if
necessary, to five decimal places).
INITIAL RELEVANT SCREEN RATE means the linear interpolation of the
arithmetic mean of the offered quotations to leading banks for two-month
sterling deposits and the arithmetic mean of the offered quotations to
leading banks for three-month sterling deposits (rounded upwards if
necessary to five decimal places) displayed on the Moneyline Telerate
monitor at Moneyline Telerate page number 3750 (or such replacement page
on that service which displays the information) or, if that service
ceases to display the information, such other service as may be
determined by the Eighth Issuer with the approval of the Security
Trustee.
4.2 TERM ADVANCE RATES OF INTEREST
The Term Advance Rate of Interest payable on each Term Advance shall be
LIBOR for three-month sterling deposits as determined in accordance with
CLAUSE 6 of the Intercompany Loan Terms and Conditions plus a RELEVANT
MARGIN which shall be:
(a) in respect of the Eighth Issuer Series 1 Term AAA Advance, a margin
of minus [__] per cent. per annum;
(b) in respect of the Eighth Issuer Series 2 Term AAA Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 and thereafter [__] per cent. per annum;
(c) in respect of the Eighth Issuer Series 3 Term AAA Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 [__] and thereafter [__] per cent. per
annum;
4
(d) in respect of the Eighth Issuer Series 4 Term AAA Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 and thereafter [__] per cent. per annum;
(e) in respect of the Eighth Issuer Series 5A1 Term AAA Advance, a
margin of [__] per cent. per annum up to and including the Interest
Period ending in December 2011 [__] and thereafter [__] per cent.
per annum;
(f) in respect of the Eighth Issuer Series 5A2 Term AAA Advance, a
margin of [__] per cent. per annum up to and including the Interest
Period ending in December 2011 and thereafter [__] per cent. per
annum;
(g) in respect of the Eighth Issuer Series 1 Term AA Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 and thereafter [__] per cent. per annum;
(h) in respect of the Eighth Issuer Series 2 Term AA Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 and thereafter [__] per cent. per annum;
(i) in respect of the Eighth Issuer Series 3 Term AA Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 and thereafter [__] per cent. per annum;
(j) in respect of the Eighth Issuer Series 4 Term AA Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 and thereafter [__] per cent. per annum;
(k) in respect of the Eighth Issuer Series 1 Term BBB Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 and thereafter [__] per cent. per annum;
(l) in respect of the Eighth Issuer Series 2 Term BBB Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 and thereafter [__] per cent. per annum;
(m) in respect of the Eighth Issuer Series 3 Term BBB Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 and thereafter [__] per cent. per annum;and
(n) in respect of the Eighth Issuer Series 4 Term BBB Advance, a margin
of [__] per cent. per annum up to and including the Interest Period
ending in December 2011 and thereafter [__] per cent. per annum.
4.3 INTEREST PERIODS
The first Interest Period shall commence on (and include) the Closing
Date and end on (but exclude) the Funding 1 Interest Payment Date falling
in September, 2005. Each subsequent Interest Period shall commence on
(and include) a Funding 1 Interest Payment Date and end on (but exclude)
the following Funding 1 Interest Payment Date.
5
5. REPAYMENT
5.1 REPAYMENT SUBJECT TO TERMS OF THE FUNDING 1 DEED OF CHARGE
The terms and provisions of this CLAUSE 5 are to be read subject to the
provisions of PART II of SCHEDULE 3 to the Funding 1 Deed of Charge and
as the same may be further amended or varied from time to time in
accordance with the terms of the Funding 1 Deed of Charge. Without
limiting the generality of the foregoing, the Eighth Issuer Term Advances
shall become due and payable as described in PARAGRAPH 1.4 of PART II of
SCHEDULE 3 of the Funding 1 Deed of Charge.
5.2 REPAYMENT OF EIGHTH ISSUER TERM AAA ADVANCES PRIOR TO THE OCCURRENCE OF A
TRIGGER EVENT AND PRIOR TO THE SERVICE ON FUNDING 1 OF AN INTERCOMPANY LOAN
ACCELERATION NOTICE OR THE SERVICE ON EACH ISSUER OF A NOTE ACCELERATION
NOTICE
Subject to the provisions of CLAUSES 1 and 2 of PART II of SCHEDULE 3 of
the Funding 1 Deed of Charge, prior to the occurrence of a Trigger Event
and prior to the service on Funding 1 of an Intercompany Loan
Acceleration Notice or the service on each Issuer of a Note Acceleration
Notice, Funding 1 shall repay to the Eighth Issuer:
(a) the Eighth Issuer Series 1 Term AAA Advance on the Funding 1
Interest Payment Date falling in [June 2006];
(b) the Eighth Issuer Series 2 Term AAA Advance on the Funding 1
Interest Payment Date falling in [June 2008];
(c) the Eighth Issuer Series 3 Term AAA Advance in two equal
instalments (each a Scheduled Amortisation Instalment) on the
Funding 1 Interest Payment Date falling in [March 2010 and June
2010] but if there are insufficient funds available to repay the
Scheduled Amortisation Instalments on such Funding 1 Interest
Payment Dates, then the shortfall shall be repaid on subsequent
Funding 1 Interest Payment Dates from Funding 1 Available Principal
Receipts until the Eighth Issuer Series 3 Term AAA Advance is fully
repaid;
(d) the Eighth Issuer Series 4 Term AAA Advance in two equal
instalments (each a Scheduled Amortisation Instalment) on the
Funding 1 Interest Payment Date falling in [September 2010 and
December 2010] but if there are insufficient funds available to
repay the Scheduled Amortisation Instalments on such Funding 1
Interest Payment Dates, then the shortfall shall be repaid on
subsequent Funding 1 Interest Payment Dates from Funding 1
Available Principal Receipts until the Eighth Issuer Series 4 Term
AAA Advance is fully repaid; and
(e) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Eighth Issuer Series
5A2 Term AAA Advance has been fully repaid the Eighth Issuer Series
5A1 Term AAA Advance to the extent of Funding 1 Available Principal
Receipts until the Eighth Issuer Series 5A1 Term Advance is fully
repaid;
(f) the Eighth Issuer Series 5A2 Term AAA Advance in two equal
instalments (each a Scheduled Amortisation Instalment) on the
Funding 1 Interest Payment Date falling in [September 2011 and
December 2011] but if there are insufficient funds available to
repay the Scheduled Amortisation Instalments on such Funding 1
Interest Payment Dates, then the shortfall shall be repaid on
subsequent Funding 1 Interest Payment Dates from Funding 1
Available Principal Receipts until the Eighth Issuer Series 5A2
Term AAA Advance is fully repaid.
6
5.3 REPAYMENT OF EIGHTH ISSUER TERM AA ADVANCES PRIOR TO THE OCCURRENCE OF A
TRIGGER EVENT AND PRIOR TO THE SERVICE ON FUNDING 1 OF AN INTERCOMPANY LOAN
ACCELERATION NOTICE OR THE SERVICE ON EACH ISSUER OF A NOTE ACCELERATION
NOTICE
Subject to the provisions of CLAUSES 1 and 2 of PART II of SCHEDULE 3 of
the Funding 1 Deed of Charge, prior to the occurrence of a Trigger Event
and prior to the service on Funding 1 of an Intercompany Loan
Acceleration Notice or the service on each Issuer of a Note Acceleration
Notice, Funding 1 shall repay to the Eighth Issuer:
(a) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Eighth Issuer Series 1
Term AAA Advance is fully repaid, the Eighth Issuer Series 1 Term
AA Advance to the extent of Funding 1 Available Principal Receipts
until the Eighth Issuer Series 1 Term AA Advance is fully repaid;
(b) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Eighth Issuer Series 2
Term AAA Advance is fully repaid, the Eighth Issuer Series 2 Term
AA Advance to the extent of Funding 1 Available Principal Receipts
until the Eighth Issuer Series 2 Term AA Advance is fully repaid;
(c) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Eighth Issuer Series 3
Term AAA Advance is fully repaid, the Eighth Issuer Series 3 Term
AA Advance to the extent of Funding 1 Available Principal Receipts
until the Eighth Issuer Series 3 Term AA Advance is fully repaid;
and
(d) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Eighth Issuer Series 4
Term AAA Advance is fully repaid, the Eighth Issuer Series 4 Term
AA Advance to the extent of Funding 1 Available Principal Receipts
until the Eighth Issuer Series 4 Term AA Advance is fully repaid.
5.4 REPAYMENT OF EIGHTH ISSUER TERM BBB ADVANCES PRIOR TO THE OCCURRENCE OF A
TRIGGER EVENT AND PRIOR TO THE SERVICE ON FUNDING 1 OF AN INTERCOMPANY LOAN
ACCELERATION NOTICE OR THE SERVICE ON EACH ISSUER OF A NOTE ACCELERATION
NOTICE
Subject to the provisions of CLAUSES 1 and 2 of PART II of SCHEDULE 3 of
the Funding 1 Deed of Charge, prior to the occurrence of a Trigger Event
and prior to the service on Funding 1 of an Intercompany Loan
Acceleration Notice or the service on each Issuer of a Note Acceleration
Notice, Funding 1 shall repay to the Eighth Issuer:
(a) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Eighth Issuer Series 1
Term AA Advance is fully repaid, the Eighth Issuer Series 1 Term
BBB Advance to the extent of Funding 1 Available Principal Receipts
until the Eighth Issuer Series 1 Term BBB Advance is fully repaid;
(b) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Eighth Issuer Series 2
Term AA Advance is fully repaid, the Eighth Issuer Series 2 Term
BBB Advance to the extent of Funding 1 Available Principal Receipts
until the Eighth Issuer Series 2 Term BBB Advance is fully repaid;
(c) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Eighth Issuer Series 3
Term AA Advance is fully repaid, the Eighth Issuer Series 3 Term
BBB Advance to the extent of Funding 1 Available Principal Receipts
until the Eighth Issuer Series 3 Term BBB Advance is fully repaid;
and
7
(d) on each Funding 1 Interest Payment Date falling on or after the
Funding 1 Interest Payment Date on which the Eighth Issuer Series 4
Term AA Advance is fully repaid, the Eighth Issuer Series 4 Term
BBB Advance to the extent of Funding 1 Available Principal Receipts
until the Eighth Issuer Series 4 Term BBB Advance is fully repaid.
5.5 REPAYMENT OF EIGHTH ISSUER TERM ADVANCES FOLLOWING THE OCCURRENCE OF A NON-
ASSET TRIGGER EVENT BUT PRIOR TO THE SERVICE ON FUNDING 1 OF AN INTERCOMPANY
LOAN ACCELERATION NOTICE OR THE SERVICE ON EACH ISSUER OF A NOTE
ACCELERATION NOTICE
On and from the Funding 1 Interest Payment Date following the occurrence
of a Non-Asset Trigger Event but prior to the service on Funding 1 of an
Intercompany Loan Acceleration Notice or the service on each Issuer of a
Note Acceleration Notice, Funding 1 shall repay the Eighth Issuer Term
Advances on each Funding 1 Interest Payment Date from Funding 1 Available
Principal Receipts in the manner set out in CLAUSE 3 of PART II of
SCHEDULE 3 to the Funding 1 Deed of Charge.
5.6 REPAYMENT OF EIGHTH ISSUER TERM ADVANCES FOLLOWING THE OCCURRENCE OF AN
ASSET TRIGGER EVENT BUT PRIOR TO THE SERVICE ON FUNDING 1 OF AN INTERCOMPANY
LOAN ACCELERATION NOTICE OR THE SERVICE ON EACH ISSUER OF A NOTE
ACCELERATION NOTICE
Following the occurrence of an Asset Trigger Event but prior to the
service on Funding 1 of an Intercompany Loan Acceleration Notice or the
service on each Issuer of a Note Acceleration Notice, Funding 1 shall
repay the Eighth Issuer Term Advances on each Funding 1 Interest Payment
Date from Funding 1 Available Principal Receipts in the manner set out in
CLAUSE 4 of PART II of SCHEDULE 3 to the Funding 1 Deed of Charge.
5.7 REPAYMENT OF EIGHTH ISSUER TERM ADVANCES FOLLOWING THE SERVICE ON EACH
ISSUER OF A NOTE ACCELERATION NOTICE BUT PRIOR TO THE SERVICE ON FUNDING 1
OF AN INTERCOMPANY LOAN ACCELERATION NOTICE
Following the service on each Issuer (including the Eighth Issuer) of a
Note Acceleration Notice pursuant to the terms of the Eighth Issuer Deed
of Charge but prior to the service on Funding 1 of an Intercompany Loan
Acceleration Notice, Funding 1 shall apply Funding 1 Available Principal
Receipts in the manner set out in CLAUSE 5 of PART II of SCHEDULE 3 to
the Funding 1 Deed of Charge.
5.8 REPAYMENT FOLLOWING THE SERVICE ON FUNDING 1 OF AN INTERCOMPANY LOAN
ACCELERATION NOTICE
Following the service on Funding 1 of an Intercompany Loan Acceleration
Notice pursuant to the terms of the Funding 1 Deed of Charge, the Eighth
Issuer Intercompany Loan shall be repaid in the manner set out in PART
III of SCHEDULE 3 to the Funding 1 Deed of Charge (as the same shall be
amended from time to time).
5.9 ACKNOWLEDGEMENT OF PREVIOUS INTERCOMPANY LOANS
The Eighth Issuer hereby acknowledges and agrees that Funding 1 has
entered into an intercompany loan agreement with Permanent Financing (No.
1) PLC (the FIRST ISSUER) dated 14th June, 2002 (the FIRST ISSUER
INTERCOMPANY LOAN AGREEMENT), an intercompany loan agreement with
Permanent Financing (No. 2) PLC (the SECOND ISSUER) dated 6th March, 2003
(the SECOND ISSUER INTERCOMPANY LOAN AGREEMENT), an intercompany loan
agreement with Permanent Financing (No. 3) PLC (the THIRD ISSUER) dated
25th November, 2003 (the THIRD INTERCOMPANY LOAN AGREEMENT), an
intercompany loan agreement with Permanent Financing (No. 4) PLC (the
FOURTH ISSUER) dated 12th March, 2004 (the FOURTH INTERCOMPANY LOAN
AGREEMENT), an intercompany loan agreement with Permanent Financing (No.
5) PLC (the FIFTH ISSUER) dated 22nd July, 2004 (the FIFTH INTERCOMPANY
LOAN AGREEMENT), an intercompany loan agreement with Permanent
8
Financing (No. 6) PLC (the SIXTH ISSUER) dated 18th November, 2004 (the
SIXTH INTERCOMPANY LOAN AGREEMENT) and an intercompany loan agreement
with Permanent Financing (No. 7) PLC (the SEVENTH ISSUER) dated 23rd
March, 2005 (the SEVENTH INTERCOMPANY LOAN AGREEMENT) and accordingly,
the obligation of Funding 1 to repay this Eighth Issuer Intercompany
Loan, the Seventh Issuer Intercompany Loan, the Sixth Issuer Intercompany
Loan, the Fifth Issuer Intercompany Loan, the Fourth Issuer Intercompany
Loan, the Third Issuer Intercompany Loan, the Second Issuer Intercompany
Loan and the First Issuer Intercompany Loan will depend on the Term
Advance Ratings of the various Term Advances made to Funding 1 under this
Eighth Issuer Intercompany Loan Agreement, the Seventh Issuer
Intercompany Loan Agreement, the Sixth Intercompany Loan Agreement, the
Fifth Intercompany Loan Agreement, the Fourth Issuer Intercompany Loan
Agreement, the Third Issuer Intercompany Loan Agreement, the Second
Issuer Intercompany Loan Agreement and the First Issuer Intercompany Loan
Agreement and the provisions of SCHEDULE 3 to the Funding 1 Deed of
Charge.
5.10 ACKNOWLEDGEMENT OF NEW INTERCOMPANY LOANS
The Eighth Issuer hereby acknowledges and agrees that from time to time
Funding 1 may enter into New Intercompany Loans with New Issuers and that
the obligation of Funding 1 to repay this Eighth Issuer Intercompany Loan
and any New Intercompany Loan will depend on the Term Advance Rating of
the individual Term Advances made to Funding 1 under any of the First
Issuer Intercompany Loan, the Second Issuer Intercompany Loan Agreement,
the Third Issuer Intercompany Loan Agreement, the Fourth Issuer
Intercompany Loan, the Fifth Issuer Intercompany Loan, the Sixth Issuer
Intercompany Loan, the Seventh Issuer Intercompany Loan, this Eighth
Issuer Intercompany Loan and any New Intercompany Loans and the
provisions of Schedule 3 to the Funding 1 Deed of Charge. Subject to
CLAUSE 25 of the Funding 1 Deed of Charge (Supplemental Provisions
Regarding the Security Trustee), any amendments to this Agreement will be
made only with the prior written consent of each party to this Agreement.
6. PREPAYMENT
6.1 PREPAYMENT OF EIGHTH ISSUER TERM ADVANCES
(a) If the conditions to the Redemption Option set out in CONDITION 5(F) of
the Eighth Issuer Notes are met, then Funding 1 has the right to prepay
the Term Advances corresponding to the Called Notes at an amount equal to
their Specified Amount (as set out in CONDITION 5(F) of the Eighth Issuer
Notes) without penalty or premium but subject to CLAUSE 15 (Default
Interest and Indemnity) of the Intercompany Loan Terms and Conditions;
and
(b) each of the Security Trustee, the Agent Bank (without liability or
responsibility to any secured creditor in respect of any loss, liability
or claim arising as a result thereof), Funding 1 and the Eighth Issuer
shall concur in, execute and do all such deeds, instruments, acts and
things, and shall consent to any amendment, modification or waiver of the
provisions of the Eighth Issuer Transaction Documents to which it is a
party, which may be necessary or desirable to permit and give effect to
the prepayment (as certified by the Eighth Issuer and/or Funding 1 to the
Security Trustee prior to any such amendment, modification or waiver
being effected), including any waiver of covenants of Funding 1.
6.2 APPLICATION OF MONIES
The Eighth Issuer hereby agrees to apply any amounts received by way of
prepayment pursuant to CLAUSE 6.1 (Prepayment of Eighth Issuer Term
Advances) in making repayments under the relevant Eighth Issuer Notes
pursuant to its Redemption Option.
9
7. CERTAIN FEES, ETC.
7.1 FEE FOR PROVISION OF EIGHTH ISSUER TERM ADVANCES
Funding 1 shall (except in the case of payments due under paragraphs (c),
(e), (f) and (i) below, which shall be paid when due) on each Funding 1
Interest Payment Date pay to the Eighth Issuer for same day value to the
Eighth Issuer Transaction Account a fee for the provision of the Eighth
Issuer Term Advances. Such fee shall be an amount or amounts in the
aggregate equal to the following:
(a) the fees, costs, charges, liabilities and expenses and any other
amounts due and payable to the Security Trustee pursuant to the
Eighth Issuer Deed of Charge together with interest thereon as
provided therein;
(b) the fees, costs, charges, liabilities and expenses and any other
amounts due and payable to the Note Trustee pursuant to the Eighth
Issuer Trust Deed together with interest thereon as provided
therein;
(c) the reasonable fees and expenses of any legal advisers, accountants
and auditors appointed by the Eighth Issuer and properly incurred
in their performance of their functions under the Transaction
Documents which have fallen due;
(d) the fees, costs and expenses due and payable to the Paying Agents,
the Registrar, the Transfer Agent and the Agent Bank pursuant to
the Eighth Issuer Paying Agent and Agent Bank Agreement;
(e) any amounts due and payable by the Eighth Issuer to the Inland
Revenue in respect of the Eighth Issuer's liability to United
Kingdom corporation tax (insofar as payment is not satisfied by the
surrender of group relief or out of the profits, income or gains of
the Eighth Issuer and subject to the terms of the Eighth Issuer
Deed of Charge) or any other Taxes payable by the Eighth Issuer;
(f) the fees, costs, charges, liabilities and expenses due and payable
to the Eighth Issuer Account Bank, pursuant to the Eighth Issuer
Bank Account Agreement (if any);
(g) the fees, costs, charges, liabilities and expenses due and payable
to the Eighth Issuer Cash Manager, pursuant to the Eighth Issuer
Cash Management Agreement;
(h) any termination payment due and payable by the Eighth Issuer to any
Eighth Issuer Swap Provider, pursuant to any Eighth Issuer Swap
Agreement;
(i) the fees, costs, charges and liabilities and expenses due and
payable to the Corporate Services Provider pursuant to the Eighth
Issuer Corporate Services Agreement;
(j) an amount equal to "G" where G is calculated as follows:
G = (A -- D -- H) or, if such calculation is less than zero, then G
shall be zero
where,
A = 0.01 per cent of the interest amounts paid by Funding 1 to the
Eighth Issuer on the Eighth Issuer Term Advances on the immediately
preceding Funding 1 Interest Payment Date;
D = E -- F
10
where,
E = the interest amounts (which excludes those fee amounts in
this CLAUSE 6.1) paid by Funding 1 to the Eighth Issuer on
the Eighth Issuer Term Advances on the immediately
preceding Funding 1 Interest Payment Date; and
F = amounts paid by the Eighth Issuer under paragraphs (d) to
(h) of the Eighth Issuer Pre-Enforcement Revenue Priority
of Payments on the immediately preceding Funding 1 Interest
Payment Date;
and
H = the cumulative aggregate of (D -- A) as calculated on each
previous Funding 1 Interest Payment Date. If such
cumulative aggregate of (D -- A) is less than zero, then H
shall be zero;
(k) any other amounts due or overdue by the Eighth Issuer to third
parties including the Rating Agencies and the amounts paid by the
Eighth Issuer under the Subscription Agreement and the Underwriting
Agreement (excluding, for these purposes, the Noteholders) other
than amounts specified in paragraphs (a) to (j) above; and
(l) if on any Funding 1 Interest Payment Date there are Eighth Issuer
Principal Receipts remaining in the Eighth Issuer Bank Accounts, an
amount equal to the difference between (i) the interest that would
be earned by the Eighth Issuer on such Eighth Issuer Principal
Receipts remaining in the Eighth Issuer Bank Accounts during the
next succeeding Interest Period and (ii) the interest that would be
payable by the Eighth Issuer applying the weighted average rate of
interest payable on the Series 5 Eighth Issuer Notes or the
relevant Eighth Issuer Currency Swap Agreements due for repayment
at the end of that Interest Period to such Eighth Issuer Principal
Receipts remaining in the Eighth Issuer Bank Accounts,
together with, (i) in respect of taxable supplies made to the Eighth
Issuer, an amount in respect of any value added tax or similar tax
payable in respect thereof against production of a valid tax invoice; and
(ii) in respect of taxable supplies made to a person other than the
Eighth Issuer, any amount in respect of any Irrecoverable VAT or similar
tax payable in respect thereof (against production of a copy of the
relevant tax invoice), and to be applied subject to and in accordance
with the provisions of the Eighth Issuer Pre-Enforcement Revenue Priority
of Payments in the Eighth Issuer Cash Management Agreement.
7.2 SET-OFF
Funding 1 and each of the other parties to the Eighth Issuer Intercompany
Loan Agreement agree that the Eighth Issuer shall be entitled to set-off
those amounts due and payable by Funding 1 pursuant to this CLAUSE 7 on
the Closing Date against the amount to be advanced by the Eighth Issuer
to Funding 1 by way of the Eighth Issuer Term Advances on the Closing
Date.
8. APPLICATION OF CERTAIN PROVISIONS
The provisions set out in CLAUSE 4.2 (Limited Recourse) of the
Intercompany Loan Terms and Conditions shall apply to:
(a) the Eighth Issuer Term AA Advances; and
(b) the Eighth Issuer Term BBB Advances.
11
9. ADDRESSES
The addresses referred to in CLAUSE 18.4 (Notices) of the Intercompany
Loan Terms and Conditions are as follows:
THE SECURITY TRUSTEE:
THE BANK OF NEW YORK
For the attention of: Global Structured Finance -- Corporate Trust
Address: The Bank of New York
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Facsimile: + 44 20 7964 60 1/6399
THE EIGHTH ISSUER:
For the attention of: The Secretary
Address: Permanent Financing (▇▇. ▇) ▇▇▇
▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Copy to: HBOS Treasury Services plc
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
For the attention of: Head of Mortgage Securitisation and Covered
Bonds
FUNDING 1:
For the attention of: The Secretary
Address: Permanent Funding (No. ▇) ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Copy to: HBOS Treasury Services plc
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile number: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
For the attention of: Head of Mortgage Securitisation and Covered
Bonds
12
RATING AGENCIES:
▇▇▇▇▇'▇:
Address: ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
For the attention of: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
S&P:
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
For the attention of: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
FITCH:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
For the attention of: FS Surveillance
Telephone: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
10. COUNTERPARTS
This Intercompany Loan Confirmation may be signed (manually or by
facsimile) and delivered in more than one counterpart all of which, taken
together, shall constitute one and the same Agreement.
11. THIRD PARTY RIGHTS
The Intercompany Loan Confirmation does not create any right under the
Contracts (Rights of Third Parties) Act 1999 which is enforceable by any
person who is not a party to the Intercompany Loan Agreement.
12. GOVERNING LAW
This Eighth Issuer Intercompany Loan Confirmation is governed by and
shall be construed in accordance with English law.
13
SCHEDULE 1
CONDITIONS PRECEDENT IN RESPECT OF DRAWDOWN
1. AUTHORISATIONS
(a) A copy of the memorandum and articles of association, certificate of
incorporation and certificate of incorporation on change of name of
Funding 1.
(b) A copy of a resolution of the board of directors of Funding 1 authorising
the entry into, execution and performance of each of the Transaction
Documents to which Funding 1 is a party and authorising specified persons
to execute those on its behalf.
(c) A certificate of a director of Funding 1 certifying:
(i) that each document delivered under this paragraph 1 of SCHEDULE 1
is correct, complete and in full force and effect as at a date no
later than the date of execution of the Eighth Issuer Intercompany
Loan Agreement and undertaking to notify the Security Trustee if
that position should change prior to the first Drawdown Date; and
(ii) as to the identity and specimen signatures of the directors and
signatories of Funding 1.
2. SECURITY
(a) The Funding 1 Deed of Charge (and the Seventh Deed of Accession) duly
executed by the parties thereto.
(b) Duly completed bank account mandates in respect of the Funding 1 GIC
Account and the Funding 1 Transaction Account.
(c) Security Power of Attorney for Funding 1.
3. LEGAL OPINION
Legal opinions of:
(a) Shepherd + Wedderburn Scottish legal advisers to the Seller and the
Servicer, addressed to, inter alios, the Security Trustee;
(b) ▇▇▇▇▇ & ▇▇▇▇▇ LLP, English and U.S. legal advisers to the Seller,
the Eighth Issuer and the Servicer, addressed to, inter alios, the
Security Trustee; and
4. TRANSACTION DOCUMENTS
▇▇▇▇ executed copies of:
(a) the Servicing Agreement;
(b) the Mortgages Trust Deed;
(c) the Halifax Deed and Power of Attorney;
(d) the Funding 1 Deed of Charge;
14
(e) the Second Supplemental Funding 1 Deed of Charge;
(f) the Funding 1 Swap Agreement;
(g) the Corporate Services Agreements;
(h) the Funding 1 Liquidity Facility Agreement;
(i) the First Issuer Intercompany Loan Agreement, the Second Issuer
Intercompany Loan Agreement and the Third Issuer Intercompany Loan
Agreement, the Fourth Issuer Intercompany Loan Agreement, the Fifth
Issuer Intercompany Loan Agreement, the Sixth Issuer Intercompany
Loan Agreement, the Seventh Issuer Intercompany Loan Agreement and
the Eighth Issuer Intercompany Loan Agreement;
(j) the Cash Management Agreement;
(k) the Bank Account Agreement;
(l) the Funding 1 Guaranteed Investment Contract;
(m) the First Start-up Loan Agreement, the Second Start-up Loan
Agreement, the Third Start-up Loan Agreement, the Fourth Start-up
Loan Agreement, the Fifth Start-up Loan Agreement, the Sixth Start-
up Loan Agreement, the Seventh Start-up Loan Agreement and the
Eighth Start-up Loan Agreement;
(n) the Mortgage Sale Agreement;
(o) a Scottish Declaration of Trust;
(p) the Seller Power of Attorney;
(q) the Eighth Issuer Deed of Charge;
(r) the Eighth Issuer Cash Management Agreement;
(s) the Eighth Issuer Swap Agreements;
(t) the Eighth Issuer Bank Account Agreement;
(u) the Eighth Issuer Post-Enforcement Call Option Agreement;
(v) the Eighth Issuer Trust Deed;
(w) the Eighth Issuer Global Notes;
(x) the Eighth Issuer Paying Agent and Agent Bank Agreement;
(y) the Underwriting Agreement;
(z) the Subscription Agreements;
(aa) the Mortgages Trustee Guaranteed Investment Contract; and
(bb) the Master Definitions and Construction Schedule, the First Issuer
Master Definitions and Construction Schedule, the Second Issuer
Master Definitions and Construction Schedule, the Third Issuer
Master Definitions and Construction Schedule, the Fourth Issuer
Master Definitions and Construction Schedule, the Fifth Issuer
Master Definitions and Construction Schedule, the Sixth Issuer
Master Definitions and Construction Schedule, the Seventh Issuer
Master Definitions and Construction Schedule and the Eighth Issuer
Master Definitions and Construction Schedule.
15
5. BOND DOCUMENTATION
(a) Confirmation that the Eighth Issuer Notes have been issued and the
subscription proceeds received by the Eighth Issuer; and
(b) Copies of the Offering Circular.
6. MISCELLANEOUS
Solvency certificates from Funding 1 signed by two directors of Funding 1
in or substantially in the form set out in SCHEDULE 2 to the Intercompany
Loan Terms and Conditions.
16
SIGNATORIES
IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed
on the day and year appearing on page 1.
FUNDING 1
SIGNED by )
for and on behalf of )
PERMANENT FUNDING (NO. 1) LIMITED ) ..........................
EIGHTH ISSUER
SIGNED by )
for and on behalf of )
PERMANENT FINANCING (NO. 8) PLC ) ..........................
SECURITY TRUSTEE
SIGNED by )
for and on behalf of )
THE BANK OF NEW YORK ) ..........................
AGENT BANK
SIGNED by )
for and on behalf of ) ..........................
CITIBANK, N.A.,
LONDON BRANCH )
17