EXHIBIT 4.5
DRAFT: 25/02/03
THIS FIRST DEED OF ACCESSION TO THE FUNDING 1 DEED OF CHARGE is made on [6th
March], 2003 BETWEEN
(1) PERMANENT FUNDING (NO. 1) LIMITED (registered number 4267660), a
private limited company incorporated under the laws of England and
Wales, whose registered office is at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("FUNDING 1");
(2) PERMANENT FINANCING (NO. 1) PLC (registered number 4416192), a public
limited company incorporated under the laws of England and Wales, whose
registered office is at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ (the "FIRST ISSUER");
(3) STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company
organised under the laws of the Commonwealth of Massachusetts, United
States of America, acting through its office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, acting as a co-trustee in its capacity as
Security Trustee;
(4) U.S. BANK NATIONAL ASSOCIATION, a national banking association formed
under the laws of the United States of America, acting through its
office at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
acting as a co-trustee in its capacity as Security Trustee;
(5) HALIFAX PLC (registered number 2367076), a public limited company
incorporated under the laws of England and Wales, whose registered
office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, acting in
its capacity as Cash Manager;
(6) HALIFAX PLC (registered number 2367076), a public limited company
incorporated under the laws of England and Wales, whose registered
office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, acting in
its capacity as Seller;
(7) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND, established by an Act
of the Parliament of Scotland in 1695, as amended, acting through its
office situated at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇, acting in its
capacity as Account Bank;
(8) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND, established by an Act
of the Parliament of Scotland in 1695, as amended, acting through its
office situated at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ in its
capacity as Funding 1 GIC Provider;
(9) HALIFAX PLC (registered number 2367076), a public limited company
incorporated under the laws of England and Wales, whose registered
office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ acting in
its capacity as Funding 1 Swap Provider;
(10) HALIFAX PLC (registered number 2367076), a public limited company
incorporated under the laws of England and Wales, whose registered
office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ acting in
its capacity as First Start-up Loan Provider (the "FIRST START-UP LOAN
PROVIDER") and Second Start-up Loan Provider (the "SECOND START-UP LOAN
PROVIDER");
(11) JPMORGAN CHASE BANK acting through its office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, acting in its capacity as Funding 1 Liquidity Facility
Provider;
(12) STRUCTURED FINANCE MANAGEMENT LIMITED (registered number 3853947), a
private limited company incorporated under the laws of England and
Wales, whose registered
office is at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ acting in
its capacity as the Funding 1 Corporate Services Provider; and
(13) PERMANENT FINANCING (NO. 2) PLC (registered number 4623188), a public
limited company incorporated under the laws of England and Wales, whose
registered office is at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ (the "SECOND ISSUER").
WHEREAS
(A) Pursuant to the terms of an intercompany loan agreement dated [6th
March], 2003 made between Funding 1 and the Second Issuer (the "SECOND
ISSUER INTERCOMPANY LOAN AGREEMENT"), the Second Issuer has agreed to
make the Second Issuer Term Advances available to Funding 1 and Funding
1 has agreed to secure its obligations and other liabilities to the
Second Issuer thereunder pursuant to the Funding 1 Deed of Charge.
(B) Pursuant to the terms of a start-up loan agreement dated [6th March],
2003 made between Funding 1 and the Second Start-up Loan Provider (the
"SECOND START-UP LOAN AGREEMENT"), the Second Start-up Loan Provider
has agreed to make a subordinated loan to Funding 1 and Funding 1 has
agreed to secure its obligations and other liabilities to the Second
Start-up Loan provider thereunder pursuant to the Funding 1 Deed of
Charge.
(C) Funding 1 has agreed to provide the Security Trustee with the benefit
of the security described in the Funding 1 Deed of Charge to secure
Funding 1's obligations to the Funding 1 Secured Creditors.
(D) The terms of the Funding 1 Deed of Charge permit Funding 1 to secure
its obligations to a New Funding 1 Secured Creditor thereunder.
(E) The Second Issuer and the Second Start-up Loan Provider have agreed to
enter into this Deed to accede to the provisions of the Funding 1 Deed
of Charge.
(F) The Funding 1 Secured Creditors have agreed to enter into this Deed to,
among other things, acknowledge and agree to such accession and to
permit any consequential changes to the Funding 1 Priority of Payments
set out in PART I, PART II and PART III of SCHEDULE 3 of the Funding 1
Deed of Charge as are required and any other amendment as may be
required to give effect to this Accession Undertaking.
NOW THIS DEED WITNESSES AS FOLLOWS
1. INTERPRETATION
The Amended and Restated Master Definitions and Construction Schedule
signed for the purposes of identification by ▇▇▇▇▇ & ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ & Wood on [5th March], 2003 (as the same may be amended,
varied or supplemented from time to time with the consent of the
parties hereto) are expressly and specifically incorporated into this
Deed and, accordingly, the expressions defined in the Amended and
Restated Master Definitions and Construction Schedule (as so amended,
varied or supplemented) shall, except where the context otherwise
requires and save where otherwise defined herein, have the same
meanings in this Deed, including the Recitals hereto and this Deed
shall be construed in accordance with the interpretation provisions set
out in Clause 2 of the Amended and Restated Master Definitions and
Construction Schedule.
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2. REPRESENTATIONS AND WARRANTIES
2.1 The Second Issuer hereby represents and warrants to the Security
Trustee and each of the Funding 1 Secured Creditors in respect of
itself that as of the date of this Deed:
(a) pursuant to the terms of the Second Issuer Intercompany Loan
Agreement, Funding 1 has agreed to pay to the Second Issuer
the amounts set out in the Second Issuer Intercompany Loan
Agreement; and
(b) the Second Issuer Intercompany Loan Agreement expressly
provides that all amounts due from Funding 1 thereunder are to
be secured by the Funding 1 Deed of Charge.
2.2 The Second Start-up Loan Provider hereby represents and warrants to the
Security Trustee and each of the Funding 1 Secured Creditors in respect
of itself that as of the date of this Deed:
(a) pursuant to the terms of the Second Start-up Loan Agreement,
Funding 1 has agreed to pay to the Second Start-up Loan
Provider the amounts set out in the Second Start-up Loan
Agreement; and
(b) the Second Start-up Loan Agreement expressly provides that all
amounts due from Funding 1 thereunder are to be secured by the
Funding 1 Deed of Charge.
2.3 Funding 1 hereby represents and warrants to the Security Trustee and
each of the Funding 1 Secured Creditors that as at the date of this
Deed, the conditions to incurring further secured Financial
Indebtedness set out in CLAUSE 2.2 (New Intercompany Loan Agreements)
of the Intercompany Loan Terms and Conditions are satisfied.
3. ACCESSION
In consideration of the Second Issuer and the Second Start-up Loan
Provider being accepted as Funding 1 Secured Creditors for the purposes
of the Funding 1 Deed of Charge by the parties thereto as from the date
of this Deed, each of the Second Issuer and the Second Start-up Loan
Provider:
(a) confirms that as from the date of this Deed, it intends to be
a party to the Funding 1 Deed of Charge as a Funding 1 Secured
Creditor;
(b) undertakes to comply with and be bound by all of the
provisions of the Amended and Restated Master Definitions and
Construction Schedule (as the same may be further amended,
varied or restated from time to time) and the Funding 1 Deed
of Charge in its capacity as a Funding 1 Secured Creditor, as
if it had been an original party thereto;
(c) undertakes to perform, comply with and be bound by all of the
provisions of the Funding 1 Deed of Charge in its capacity as
a Funding 1 Secured Creditor, as if it had been an original
party thereto as provided in CLAUSE 31.8 (Funding 1 Secured
Creditors) (including without limitation CLAUSES 8.4
(Priorities of Payment - After Service of an Intercompany Loan
Acceleration Notice), 8.5 (Application of Monies Received
After Intercompany Loan Acceleration Notice) and 9.2 (No
Enforcement by Funding 1 Secured Creditors)); and
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(d) agrees that the Security Trustee shall be the Security Trustee
of the Funding 1 Deed of Charge for all Funding 1 Secured
Creditors upon and subject to the terms set out in the Funding
1 Deed of Charge.
4. SCOPE OF THE FUNDING 1 DEED OF CHARGE
Funding 1, the Second Issuer, the Second Start-up Loan Provider and the
Security Trustee hereby agree that for relevant purposes under the
Funding 1 Deed of Charge and the Amended and Restated Master
Definitions and Construction Schedule:
(a) the Agreement shall be treated as a Funding 1 Agreement; and
(b) the Second Issuer and the Second Start-up Loan Provider shall
be treated as an Funding 1 Secured Creditors.
5. AMENDMENT TO THE FUNDING 1 PRIORITY OF PAYMENTS
The Funding 1 Secured Creditors agree to amend and restate the Funding
1 Priority of Payments set out in PARTS I, II and III of SCHEDULE 3 of
the Funding 1 Deed of Charge in accordance with APPENDIX 1 hereto.
6. FURTHER AMENDMENTS
6.1 CLAUSE 3.5 of the Funding 1 Deed of Charge is hereby amended by the
insertion of the following words as a new sentence immediately after
the words "by way of security":
"The floating charge created hereby is a qualifying floating charge for
the purpose of paragraph 14 of Schedule B1 of the Insolvency Act 1986."
6.2 CLAUSE 18.2 of the Funding 1 Deed of Charge is hereby amended as
follows:
(a) by the insertion of the words "Subject as set out below,"
immediately before the words "In addition and without
prejudice to"; and
(b) by the insertion of the following as a new paragraph after sub
paragraph (b):
"The floating charge created by CLAUSE 3.5 of this Deed may
not be converted into a fixed charge solely as a result of the
obtaining of a moratorium (or anything done with a view to
obtaining a moratorium) under the Insolvency ▇▇▇ ▇▇▇▇ except
with leave of the court."
6.3 CLAUSE 8.7 of the Funding 1 Deed of Charge is hereby amended by the
insertion after the words "Following presentation of a petition for an
administration order in relation to Funding 1" of the following words:
", the filing of documents with the court for the appointment of an
administrator in relation to Funding 1 or the service of a notice of
intention to appoint an administrator in relation to Funding 1,"
6.4 CLAUSE 13.1 of the Funding 1 Deed of Charge is hereby amended as
follows:
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(a) by the re-numbering of the paragraph as SUB-PARAGRAPH (a) and
by the insertion of the words "Subject to PARAGRAPH (b) below"
at the start thereof; and
(b) by the insertion of the following SUB-PARAGRAPH (b):
"The Security Trustee may not appoint an administrative
receiver, receiver, manager or receiver and manager pursuant
to PARAGRAPH (a) above solely as a result of the obtaining of
a moratorium (or anything done with a view to obtaining a
moratorium) under the Insolvency ▇▇▇ ▇▇▇▇ except with leave of
the court."
6.5 CLAUSES 5.1(c) and 5.5 of the Funding 1 Deed of Charge is hereby
amended by the deletion of the word "first" from the third and fourth
lines thereof, respectively.
6.6 CLAUSES 8.5 of the Funding 1 Deed of Charge is hereby amended by the
insertion of the words "from Funding 1" immediately after the words
"all monies received or recovered by it" on the third line thereof.
6.7 CLAUSE 27.2 of the Funding 1 Deed of Charge is hereby amended by the
deletion of the words "(whether a trust corporation or not)" from the
fourth line thereof and the insertion of the words "(in which case such
person must be a Trust Corporation)" after the words "separate trustee"
on the fifth line thereof.
6.8 Clause 27 of the Funding 1 Deed of Charge is hereby amended by the
insertion of a new clause 27.4 as follows:
"Notwithstanding the provisions of Clause 27.1 (Powers of Funding 1),
any corporation into which the Funding 1 Security Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Funding 1 Security Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of
the Funding 1 Security Trustee, shall be the successor of the Funding 1
Security Trustee hereunder without any consent or sanction of the
Funding 1 Secured Creditors, provided such corporation shall be
otherwise qualified and eligible under this Clause, without the
execution or filing of any paper or any further act on the part of any
of the parties hereto (unless otherwise required by applicable law to
effect such succession)."
7. MISCELLANEOUS
7.1 Save as expressly amended by this Deed, the Funding 1 Deed of Charge
shall remain in full force and effect. This Deed shall form part of the
Funding 1 Deed of Charge and references therein to "this Funding 1 Deed
of Charge" shall be read as references to the Funding 1 Deed of Charge
as amended by this Deed.
7.2 For the purposes of the definition of "First Issuer Transaction
Account" contained in the First Issuer Master Definitions and
Construction Schedule, it is agreed that the First Issuer may, with the
prior written consent of the security trustee, replace any existing
First Issuer Transaction Account with a replacement bank account
thereafter designated, and to be treated as, the First Issuer
Transaction Account for the purposes of the Transaction Documents.
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8. APPLICATION
Prior to and following enforcement of the Funding 1 Security all
amounts at any time held by Funding 1, the Cash Manager or the Security
Trustee in respect of the security created under this Deed shall be
held and/or applied by such person subject to and in accordance with
the relevant provisions of the Funding 1 Deed of Charge.
9. NOTICES AND DEMANDS
Any notice or communication under or in connection with this Deed, the
Funding 1 Deed of Charge or the Amended and Restated Master Definitions
and Construction Schedule shall be given in the manner and at the times
set out in CLAUSE 30 (Notices and Demands) of the Funding 1 Deed of
Charge to the addresses given in this Clause or at such other address
as the recipient may have notified to the other parties hereto and/or
thereto in writing.
The address referred to in this CLAUSE 9 for the Second Issuer is:
Permanent Financing (No. 2) PLC
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
For the attention of: The Directors
with a copy to: HBOS Treasury Services plc
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
For the attention of: Head of Capital Markets and Securitisation
The address referred to in this CLAUSE 9 for the Second Start-up Loan
Provider is:
Halifax plc
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇▇▇ ▇▇▇ ▇▇▇
For the attention of: the Mortgage Securitisation Managers
with a copy to: HBOS Treasury Services plc
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Facsimile: ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
For the attention of: the Head of Capital Markets and
Securitisation
The address referred to in this CLAUSE 9 for the Security Trustees are:
▇
▇▇▇▇▇ ▇▇▇▇▇▇ Bank and Trust Company
c/o U.S. Bank National Association
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇ (▇▇▇) ▇▇▇ ▇▇▇▇
For the attention of: Corporate Trust Services
U.S. Bank National Association
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇ (▇▇▇) ▇▇▇ ▇▇▇▇
For the attention of: Corporate Trust Services
or such other address and/or numbers as the Second Issuer, the Second
Start-up Loan Provider or the Security Trustee may notify to the
parties to the Funding 1 Deed of Charge in accordance with the
provisions thereof.
10. CHOICE OF LAW
This Deed is governed by and shall be construed in accordance with
English law.
DULY EXECUTED AND DELIVERED AS A DEED by each of the parties hereto or on its
behalf on the date appearing on page 1.
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FUNDING 1
EXECUTED as a DEED by )
PERMANENT FUNDING (NO. 1) )
LIMITED acting by two )
directors/a director and the secretary )
Director
Director/Secretary
FIRST ISSUER
EXECUTED as a DEED by )
PERMANENT FINANCING (NO. 1) )
PLC acting by two )
directors/a director and the secretary )
Director
Director/Secretary
SELLER
EXECUTED as a DEED by )
HALIFAX PLC )
IN ITS CAPACITY AS SELLER )
acting by its attorney )
in the presence of )
Witness:
Name:
Address:
8
CASH MANAGER
EXECUTED as a DEED by )
HALIFAX PLC )
IN ITS CAPACITY AS CASH MANAGER )
acting by its attorney )
in the presence of )
Witness:
Name:
Address:
ACCOUNT BANK
EXECUTED as a DEED by )
THE GOVERNOR AND COMPANY OF )
THE BANK OF SCOTLAND )
IN ITS CAPACITY AS ACCOUNT BANK )
acting by two directors/a director )
and the secretary )
Director
Director/Secretary
FUNDING 1 GIC PROVIDER
EXECUTED as a DEED by )
THE GOVERNOR AND COMPANY OF )
THE BANK OF SCOTLAND )
IN ITS CAPACITY AS FUNDING 1 GIC PROVIDER )
acting by two directors/a director )
and the secretary )
Director
Director/Secretary
FUNDING 1 SWAP PROVIDER
EXECUTED as a DEED by )
HALIFAX PLC )
IN ITS CAPACITY AS FUNDING 1 SWAP PROVIDER )
acting by its attorney )
in the presence of )
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Witness:
Name:
Address:
FUNDING 1 CORPORATE SERVICES PROVIDER
EXECUTED as a DEED by )
STRUCTURED FINANCE )
MANAGEMENT LIMITED )
acting by two Directors/a director )
and the secretary )
Director
Director/Secretary
START-UP LOAN PROVIDER
EXECUTED as a DEED by )
HALIFAX PLC )
IN ITS CAPACITY AS FIRST START-UP LOAN )
PROVIDER AND SECOND START-UP )
LOAN PROVIDER )
acting by its attorney )
in the presence of )
Witness:
Name:
Address:
FUNDING 1 LIQUIDITY FACILITY PROVIDER
EXECUTED as a DEED by )
JPMORGAN CHASE BANK )
acting by its attorney )
in the presence of )
Witness:
Name:
Address:
10
SECURITY TRUSTEE
EXECUTED as a DEED by )
STATE STREET BANK AND )
TRUST COMPANY )
acting by its attorney in the presence of )
Witness:
Name:
Address:
SECURITY TRUSTEE
EXECUTED as a DEED by )
U.S. BANK NATIONAL )
ASSOCIATION )
acting by its authorised signatory )
Authorised Signatory:
SECOND ISSUER
EXECUTED as a DEED by )
PERMANENT FINANCING (NO. 2) PLC )
PLC acting by two )
directors/a director and the secretary )
Director
Director/Secretary
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APPENDIX 1
AMENDED AND RESTATED FUNDING 1 PRIORITY OF PAYMENTS
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SCHEDULE 3
FUNDING 1 PRIORITY OF PAYMENTS
PART I
FUNDING 1 PRE-ENFORCEMENT REVENUE PRIORITY OF PAYMENTS
1. CALCULATION OF FUNDING 1 AVAILABLE REVENUE RECEIPTS
1.1 On the day falling four London Business Days prior to each Funding 1
Interest Payment Date, the Cash Manager will calculate the amount of
Funding 1 Available Revenue Receipts that available to be applied on
the next Funding 1 Interest Payment Date in accordance with the Funding
1 Pre-Enforcement Revenue Priority of Payments.
1.2 Subject to paragraph 1.3 below, if there would be insufficient Funding
1 Available Revenue Receipts to meet Funding 1's obligations on the
next Funding 1 Interest Payment Date under the Funding 1
Pre-Enforcement Revenue Priority of Payments, then Funding 1 (or the
Cash Manager on its behalf) shall pay or provide for that deficit by
applying amounts then standing to the credit of (i) the Funding 1
Principal Ledger, if any, and (ii) any amounts standing to the credit
of the Cash Accumulation Ledger after deducting the amounts standing to
the credit of the Funding 1 Principal Ledger (if any) from such ledger,
and the Cash Manager shall make a corresponding entry in the relevant
Principal Deficiency Ledger.
1.3 Funding 1 Principal Receipts may not be used to pay interest on any
Term Advance if and to the extent that would result in a deficiency
being recorded or an existing deficiency being increased on a Principal
Deficiency Sub-Ledger relating to a higher ranking Term Advance.
1.4 If, on a Funding 1 Interest Payment Date, there is a deficit of Funding
1 Available Revenue Receipts and there are no (or insufficient) amounts
standing to the credit of the Funding 1 Principal Ledger or the Cash
Accumulation Ledger to cure that deficit as described in PARAGRAPHS 1.2
and 1.3 above, then the Cash Manager will direct Funding 1 to request a
drawing pursuant to CLAUSE 5.1 of the Funding 1 Liquidity Facility
Agreement to apply towards the deficit.
2. DISTRIBUTION OF FUNDING 1 AVAILABLE REVENUE RECEIPTS PRIOR TO THE
SERVICE OF AN INTERCOMPANY LOAN ACCELERATION NOTICE ON FUNDING 1
2.1 This section sets out the order of priority of payments of Funding 1
Available Revenue Receipts as at the Closing Date. If Funding 1 enters
into New Intercompany Loan Agreements, then this order of priority may
change pursuant to CLAUSE 7.5 of the Funding 1 Deed of Charge.
2.2 Except for amounts due to third parties by the First Issuer and/or the
Second Issuer and/or Funding 1 under paragraph (a) below or amounts due
to the Account Bank and/or the First Issuer Account Bank and/or the
Second Issuer Account Bank which shall be paid when due, on each
Funding 1 Interest Payment Date prior to the service of an Intercompany
Loan Acceleration Notice on Funding 1, the Cash Manager will apply the
Funding 1 Available Revenue Receipts in the following order of priority
(being the Funding 1 Pre-Enforcement Revenue Priority of Payments):
(a) firstly, in or towards satisfaction of pro rata and pari passu, the
amounts due to:
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(i) the Security Trustee (together with interest and any amount in
respect of VAT on those amounts) and to provide for any
amounts due or to become due in the immediately following
Interest Period to the Security Trustee under the Funding 1
Deed of Charge;
(ii) pro rata and pari passu, to pay amounts due to the First
Issuer in respect of the First Issuer's obligations specified
in items (a) to (c) inclusive of the First Issuer
Pre-Enforcement Revenue Priority of Payments or, as the case
may be, items (a) and (b) of the First Issuer Post-Enforcement
Priority of Payments;
(iii) pro rata and pari passu, to pay amounts due to the Second
Issuer in respect of the Second Issuer's obligations specified
in items (a) to (c) inclusive of the Second Issuer
Pre-Enforcement Revenue Priority of Payments or, as the case
may be, items (a) and (b) of the Second Issuer
Post-Enforcement Priority of Payments;
(iv) any third party creditors of Funding 1 (other than those
referred to later in this order of priority of payments),
which amounts have been incurred without breach by Funding 1
of the Funding 1 Agreements (and for which payment has not
been provided for elsewhere) and to provide for any of these
amounts expected to become due and payable in the immediately
following Interest Period by Funding 1 and to pay or discharge
any liability of Funding 1 for corporation tax on any
chargeable income or gain of Funding 1;
(b) secondly, in or towards satisfaction of amounts due to the Funding 1
Liquidity Facility Provider under the Funding 1 Liquidity Facility
Agreement (except for amounts drawn thereunder to repay principal on
the Bullet Term Advances and any Funding 1 Liquidity Subordinated
Amounts);
(c) thirdly, in or towards satisfaction of amounts due and payable to the
Cash Manager under the Cash Management Agreement (together with any
amount in respect of VAT on those amounts);
(d) fourthly, in or towards satisfaction, pro rata and pari passu, of
amounts, if any, due and payable to the Account Bank under the terms of
the Bank Account Agreement and to the Funding 1 Corporate Services
Provider under the Funding 1 Corporate Services Agreement;
(e) fifthly, in or towards satisfaction of all amounts (if any) due and
payable to the Funding 1 Swap Provider under the Funding 1 Swap
Agreement (including termination payments but excluding any Funding 1
Swap Excluded Termination Amount);
(f) sixthly, in or towards satisfaction, pro rata and pari passu, of the
amounts of interest due and payable on the Term AAA Advances;
(g) seventhly, towards a credit to the AAA Principal Deficiency Sub-Ledger
in an amount sufficient to eliminate any debit on that ledger;
(h) eighthly, in or towards satisfaction, pro rata and pari passu, of the
amounts of interest due and payable on the Term AA Advances;
(i) ninthly, towards a credit to the AA Principal Deficiency Sub-Ledger in
an amount sufficient to eliminate any debit on that ledger;
14
(j) tenthly, in or towards satisfaction, pro rata and pari passu, of
amounts of interest due and payable on the Term BBB Advances;
(k) eleventhly, towards a credit to the BBB Principal Deficiency Sub-Ledger
in an amount sufficient to eliminate any debit on that ledger;
(l) twelfthly, in or towards satisfaction, pro rata and pari passu,
according to the respective amounts thereof:
(i) any amounts due to the First Issuer in respect of the First
Issuer's obligations (if any) to make a termination payment to
a First Issuer Swap Provider (but excluding any First Issuer
Swap Excluded Termination Amount); and
(ii) any amounts due to the Second Issuer in respect of the Second
Issuer's obligations (if any) to make a termination payment to
a Second Issuer Swap Provider (but excluding any Second Issuer
Swap Excluded Termination Amount);
(m) thirteenthly, towards a credit to the Reserve Ledger in an amount up to
the Reserve Fund Required Amount taking into account any net
replenishment of the Reserve Fund on that Funding 1 Interest Payment
Date from Funding 1 Available Principal Receipts;
(n) fourteenthly, in or towards satisfaction, pro rata and pari passu, of
any amounts due (without double counting) to:
(i) the First Issuer in respect of the First Issuer's obligations
to make any termination payment to a First Issuer Swap
Provider as a result of a First Issuer Swap Provider Downgrade
Termination Event;
(ii) the Second Issuer in respect of the Second Issuer's
obligations to make any termination payment to a Second Issuer
Swap Provider as a result of a Second Issuer Swap Provider
Downgrade Termination Event;
(iii) the First Issuer in respect of any other amounts due and
payable under the First Issuer Intercompany Loan Agreement and
not otherwise provided for in this order of priorities:
(iv) the Second Issuer in respect of any other amounts due and
payable under the Second Issuer Intercompany Loan Agreement
and not otherwise provided for in this order of priorities:
(v) after the occurrence of a Funding 1 Swap Provider Default or a
Funding 1 Swap Provider Downgrade Termination Event, towards
payment of any termination amount due and payable by Funding 1
under the Funding 1 Swap Agreement; and
(iv) the Funding 1 Liquidity Facility Provider to pay any Funding 1
Liquidity Subordinated Amounts due under the Funding 1
Liquidity Facility Agreement;
(o) fifteenthly, towards payment pro rata and pari passu amounts due to:
(i) the First Start-up Loan Provider under the First Start-up Loan
Agreement; and
(ii) the Second Start-up Loan Provider under the Second Start-up
Loan Agreement;
15
(p) sixteenthly, towards payment of an amount equal to 0.01 per cent. of
the Funding 1 Available Revenue Receipts; and
(q) seventeenthly, towards payment to the shareholders of Funding 1 of any
dividend declared by Funding 1.
16
PART II
FUNDING 1 PRINCIPAL PRIORITIES OF PAYMENTS
1. DUE AND PAYABLE DATES OF TERM ADVANCES
1.1 Each First Issuer Term Advance shall become "DUE AND PAYABLE" on the
earlier to occur of:
(a) each respective First Issuer Term Advances Due Date;
(b) the date upon which a Trigger Event occurs;
(c) the date upon which the Note Trustee serves a Note
Acceleration Notice on the First Issuer; and
(d) the date upon the Security Trustee serves an Intercompany Loan
Acceleration Notice on Funding 1.
1.2 Each Second Issuer Term Advance shall become "DUE AND PAYABLE" on the
earlier to occur of:
(a) each respective Second Issuer Term Advances Due Date;
(b) the date upon which a Trigger Event occurs;
(c) the date upon which the Note Trustee serves a Note
Acceleration Notice on the Second Issuer;
(d) the date upon the Security Trustee serves an Intercompany Loan
Acceleration Notice on Funding 1; and
(e) the date upon which a step-up date occurs in relation to the
relevant Second Issuer Term Advance.
1.3 If there are insufficient Funding 1 Available Principal Receipts
available to repay a Term Advance on a Funding 1 Interest Payment Date
upon which that Term Advance is due and payable (either in full or as a
Scheduled Amortisation Instalment), then the shortfall will be repaid
on subsequent Funding 1 Interest Payment Dates from Funding 1 Available
Principal Receipts until that Term Advance is fully repaid.
2. REPAYMENT OF TERM ADVANCES OF EACH SERIES 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
2.1 On each Funding 1 Interest Payment Date (but prior to the date on which
(i) a Trigger Event occurs, (ii) the Security Trustee serves an
Intercompany Loan Acceleration Notice on Funding 1 or (iii) each Issuer
has been served with a Note Acceleration Notice by the Security
Trustee), the Cash Manager shall apply Funding 1 Available Principal
Receipts in the following order of priority:
17
(a) firstly, towards repayment of amounts due to the Funding 1
Liquidity Facility Provider under the Funding 1 Liquidity
Facility to the extent only that amounts were drawn thereunder
in order to make Eligible Liquidity Facility Principal
Repayments;
(b) secondly, towards replenishment of the Reserve Fund to the
extent only that monies have been drawn from the Reserve Fund
to make Eligible Reserve Fund Principal Repayments;
(c) thirdly, towards repayment of all Term AAA Advances that are
then due and payable in an order of priority based on their
Final Repayment Date, so that the earliest maturing Term AAA
Advance is paid first (and if any Term AAA Advances have the
same Final Repayment Date, then those Term Advances will be
repaid pro rata and pari passu), in each case subject to Rules
(1), (2) and (3) set out in PARAGRAPHS 2.2(a), (b) and (c)
below;
(d) fourthly, pro rata and pari passu towards repayment of all
Term AA Advances that are then due and payable, in each case
subject to Rules (1), (2) and (3) set out in PARAGRAPHS
2.2(a), (b) and (c) below;
(e) fifthly, pro rata and pari passu towards repayment of all Term
BBB Advances that are then due and payable, in each case
subject to Rules (1), (2) and (3) set out in PARAGRAPHS
2.2(a), (b) and (c) below;
(f) sixthly, towards a credit to the Cash Accumulation Ledger
until the balance is equal to Funding 1's Cash Accumulation
Liability (as calculated after any payments are made at
PARAGRAPH 2.1(c) above); and
(g) seventhly, the remainder shall be credited to the Funding 1
Principal Ledger.
2.2 In the applicable circumstances, the following Rules apply in
determining the amounts to be paid under PARAGRAPHS 2.1(c), (d) and (e)
above and, where indicated, PARAGRAPHS 3.1(c), (d) and (e) and 4.1(c),
(d) and (e) below:
(a) Rule (1) - Deferral of repayment of Pass-Through Term Advances
and/or Scheduled Amortisation Instalments in certain
circumstances.
(A) Deferral of Term AA Advances and/or Term BB Advances
(i) If on a Funding 1 Interest Payment Date:
(1) there is a debit balance on the BBB
Principal Deficiency Sub-Ledger or the AA
Principal Deficiency Sub-Ledger, after
application of the Funding 1 Available
Revenue Receipts on that Funding 1 Interest
Payment Date; or
(2) the Adjusted Reserve Fund Level is less than
the Reserve Fund Threshold; or
(3) the aggregate Outstanding Principal Balance
of Loans in the Mortgages Trust, in respect
of which the aggregate amount in arrears is
more than three times the Monthly Payment
then due, is more than 5 per cent. of the
aggregate Outstanding Principal Balance of
Loans in the Mortgages Trust,
18
then until the relevant circumstances as described in
SUB-PARAGRAPHS 2.2(a)(A)(i)(1), (2) or (3) above has
been cured or otherwise ceases to exist, if:
(a) any Term AAA Advance (whether or not such
Term AAA Advance is then due and payable)
remains outstanding after making the
payments under PARAGRAPH 2.1(c) above the
Term AA Advances (including the Issuer Term
AA Advances) will not be entitled to
Principal Repayments under PARAGRAPH 2.1(d)
above; and/or
(b) any Term AAA Advance or any AA Term Advance
(whether or not such Term AAA Advance or
Term AA Advance is then due and payable)
remains outstanding after making the
payments under PARAGRAPHS 2.1 (c) and/or (d)
above then the Term BBB Advances (including
the Issuer Term BBB Advances) will not be
entitled to Principal Repayments under
PARAGRAPH 2.1(e) above.
(B) Deferral of Scheduled Amortisation Term Advances when
CPR is below certain threshold(s) prior to Step-up
Date:
If on a Funding 1 Interest Payment Date:
(i) one or more Bullet Term Advances are within a Cash
Accumulation Period at that time (irrespective of
whether any Scheduled Amortisation Instalments are
then in a Cash Accumulation Period); and
(ii) either:
(1) the quarterly CPR is less than 10 per
cent.; or
(2) both:
(I) the quarterly CPR is equal to or
greater than 10 per cent., but less
than 15 per cent.; and
(II) the annualised CPR is less than 10
per cent.,
then on or before their Step-up Dates the
Scheduled Amortisation Term Advances will be
entitled to Principal Repayments under
PARAGRAPH 2.1(c) above only the extent
permitted under the Scheduled Amortisation
Repayment Restrictions.
(C) Deferral of original Pass-Through Term Advances when
CPR is below a certain threshold prior to Step-up
Date:
If on a Funding 1 Interest Payment Date:
(i) one or more Bullet Term Advances and/or Scheduled
Amortisation Instalments are within a Cash
Accumulation Period at that time; and
19
(ii) the quarterly CPR is less than 15 per cent.; and
(iii) there is a Cash Accumulation Shortfall at that time,
then, on or before their Step-up Dates, the Original
Pass-Through Term Advances will be entitled to principal
repayments under PARAGRAPHS 2.1(c), (d) and (e) (as
applicable) above only to the extent permitted under the
Pass-Through Repayment Restrictions.
(b) Rule (2) - Repayment of Payable Pass-Through Term Advances
after the occurrence of a Step-up Date
Following the occurrence of the Step-up Date under an
Intercompany Loan Agreement ("INTERCOMPANY LOAN A") but prior
to the time which Rule (3) (as set out in PARAGRAPH 2.2(c)
below) becomes applicable and provided that the Funding 1
Share of the Trust Property is greater than zero, the
aggregate amount repaid on a Funding 1 Interest Payment Date
in relation to Term Advances (other than Bullet Term Advances
or Scheduled Amortisation Instalments) under that Intercompany
Loan A under PARAGRAPHS 2.1(c), (d) and (e) above shall be
limited to an amount calculated as follows:
Funding 1 Principal Funds x Outstanding Principal Balance of Intercompany Loan A
----------------------------------------------------
Aggregate Outstanding Principal Balance of all
Intercompany Loans
(c) Rule (3) - Repayment of Term Advances after service of a Note
Acceleration Notice on one or more (but not all) of the
Issuers
If the Note Trustee serves a Note Acceleration Notice on one
or more (but not all) of the Issuers, then this Rule (3) will
apply. In these circumstances:
(i) service of a Note Acceleration Notice will not result
in automatic enforcement of the Funding 1 Security;
(ii) all of the Term Advances (including any outstanding
Bullet Term Advances and Scheduled Amortisation
Instalments) under the Intercompany Loan relating to
the relevant Issuer who has been served a Note
Acceleration Notice ("INTERCOMPANY LOAN B") will
become immediately due and payable;
(iii) the Cash Manager shall apply the appropriate amount
of Funding 1 Available Principal Receipts allocated
to Intercompany Loan B at the relevant level of the
Funding 1 Principal Priorities of Payments, towards
repayment, pro rata and pari passu, of any Term AAA
Advances outstanding under that Intercompany Loan B
(that is, those Term AAA Advances will not be repaid
in an order of priority based on their Final
Repayment Date); and
(iv) the aggregate amount repaid on a Funding 1 Interest
Payment Date in respect of Intercompany Loan B under
PARAGRAPHS 2.1(c), (d) and (e), 3.1(c), (d) and (e)
or 4.1(c), (d) and (e) (as applicable) of the
relevant priority of payments shall be limited to an
amount calculated as follows:
20
Funding 1 Principal Funds x Outstanding Principal Balance of Intercompany Loan B
----------------------------------------------------
Aggregate Outstanding Principal Balance of all
Intercompany Loans
Allocations involving Rule (2) or Rule (3)
Where Rule (2) or Rule (3) applies at a level of any priority of
payments, the funds available for making payments at that level shall
first be allocated without reference to Rule (2) or Rule (3) (as
applicable). However, if the amount so allocated to one or more Term
Advances exceeds the amount permitted under Rule (2) or Rule (3) (as
applicable) to be paid in respect of those Term Advances (the "CAPPED
ADVANCES"), the excess shall then be reallocated among any other Term
Advances at that level using the method of allocation as applies at
that level but without reference to the Capped Advances in calculating
such reallocation. If a further such excess arises as a result of the
reallocation process, the reallocation process shall be repeated at
that level in relation to each such further excess that arises until no
further funds can be allocated at that level following which the
remaining excess shall then be applied at the next level of that
Priority of Payments.
3. REPAYMENT OF TERM ADVANCES OF EACH SERIES 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
3.1 On each Funding 1 Interest Payment Date following the occurrence of a
Non-Asset Trigger Event (but prior to the date on which (i) an Asset
Trigger Event occurs, (ii) the Security Trustee serves an Intercompany
Loan Acceleration Notice on Funding 1 or (iii) each Issuer has been
served with a Note Acceleration Notice), the Bullet Term Advances and
the Scheduled Amortisation Term Advances under each Intercompany Loan
will be deemed to be Pass-Through Term Advances and, on each Funding 1
Interest Payment Date, Funding 1 will be required to apply Funding 1
Available Principal Receipts in the following order of priority:
(a) firstly, towards repayment of amounts due to the Funding 1
Liquidity Facility Provider under the Funding 1 Liquidity
Facility to the extent only that amounts were drawn thereunder
in order to make Eligible Liquidity Facility Principal
Repayments;
(b) secondly, towards replenishment of the Reserve Fund to the
extent only that monies have been drawn from the Reserve Fund
to make Eligible Reserve Fund Principal Repayments;
(c) thirdly, to repay the Term AAA Advance with the earliest Final
Repayment Date, then to repay the Term AAA Advance with the
next earliest Final Repayment Date, and so on until the Term
AAA Advances are fully repaid;
(d) fourthly, pro rata and pari passu, to repay the Term AA
Advances, until those Term AA Advances are fully repaid; and
(e) fifthly, pro rata and pari passu, to repay the Term BBB
Advances, until each of those Term BBB Advances are fully
repaid.
21
4. REPAYMENT OF TERM ADVANCES OF EACH SERIES 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
4.1 Following the occurrence of an Asset Trigger Event (whether or not a
Non-Asset Trigger Event occurs or has occurred) (but prior to (i)
service by the Security Trustee of an Intercompany Loan Acceleration
Notice on Funding 1 or (ii) each issuer has been served with a Note
Acceleration Notice), the Bullet Term Advances and the Scheduled
Amortisation Term Advances in respect of all Intercompany Loans will be
deemed to be Pass-Through Term Advances, and on each Funding 1 Interest
Payment Date Funding 1 will be required to apply Funding 1 Available
Principal Receipts in the following order of priority:
(a) firstly, towards repayment of amounts due to the Funding 1
Liquidity Facility Provider under the Funding 1 Liquidity
Facility to the extent only that those amounts were drawn in
order to make Eligible Liquidity Facility Principal
Repayments;
(b) secondly, towards replenishment of the Reserve Fund to the
extent only that monies have been drawn from the Reserve Fund
to make Eligible Reserve Fund Principal Repayments;
(c) thirdly, pro rata and pari passu, towards repayment of the
Term AAA Advances, until each of those Term AAA Advances is
fully repaid;
(d) fourthly, pro rata and pari passu, towards repayment of the
Term AA Advances until each of those Term AA Advances is fully
repaid; and
(e) fifthly, pro rata and pari passu, towards repayment of the
Term BBB Advances, until each of those Term BBB Advances is
fully repaid.
5. REPAYMENT OF TERM ADVANCES OF EACH SERIES 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
5.1 If each Issuer has been served with a Note Acceleration Notice, then
that will not result in automatic enforcement of the Funding 1 Security
under the Funding 1 Deed of Charge. In those circumstances, however,
the Bullet Term Advances and any Scheduled Amortisation Term Advances
under each Issuer's respective Intercompany Loan will be deemed to be
Pass-Through Term Advances and Funding 1 will be required to apply
Funding 1 Available Principal Receipts on each Funding 1 Interest
Payment Date in the following order of priority:
(a) firstly, towards repayment to the Funding 1 Liquidity Facility
Provider of amounts drawn under the Funding 1 Liquidity
Facility on the prior Funding 1 Interest Payment Date in order
to make Eligible Liquidity Facility Principal Repayments;
(b) secondly, towards replenishment of the Reserve Fund to the
extent only that monies have been drawn from the Reserve Fund
to make Eligible Reserve Fund Principal Repayments;
(c) thirdly, pro rata and pari passu, towards repayment of the
Term AAA Advances, until each of those Term AAA Advances is
fully repaid.
(d) fourthly, pro rata and pari passu, towards repayment of the
Term AA Advances, until each of those Term AA Advances is
fully repaid; and
22
(e) fifthly, pro rata and pari passu, towards repayment of the
Term BBB Advances, until each of those Term BBB Advances is
fully repaid
6. REPAYMENT OF TERM ADVANCES WHEN FUNDING 1 RECEIVES THE AMOUNT
OUTSTANDING UNDER AN INTERCOMPANY LOAN
If Funding 1 receives a payment from the Seller in the circumstances
set out in CLAUSE 7 of the Mortgages Trust Deed or the proceeds of a
New Intercompany Loan which are to be used to refinance another
Intercompany Loan (such payment by the Seller or such proceeds being a
"FULL REPAYMENT AMOUNT"), then Funding 1 will not apply the Full
Repayment Amount as described in PARAGRAPHS 2 to 5 above. Instead,
Funding 1 will apply the Full Repayment Amount to repay the relevant
Intercompany Loan. If at any time only one Intercompany Loan is
outstanding, then Funding 1 will apply the Full Repayment Amount first
to repay amounts due to the Funding 1 Liquidity Facility Provider under
the Funding 1 Liquidity Facility to the extent only that amounts were
drawn thereunder in order to repay the principal amounts of any Bullet
Term Advances made under any of the Intercompany Loans and the
remainder shall be applied to repay the relevant Intercompany Loan.
23
PART III
FUNDING 1 POST-ENFORCEMENT PRIORITY OF PAYMENTS
All monies received or recovered by the Security Trustee or the Receiver in
respect of the Funding 1 Security subsequent to the Security Trustee serving an
Intercompany Loan Acceleration Notice on Funding 1, will be applied (save to the
extent required by law) by the Security Trustee or the Receiver on each Funding
1 Interest Payment Date in accordance with the following order of priority (in
each case only and to the extent that payments or provision of a higher priority
have been made in full):
(a) firstly, in or towards satisfaction of, pro rata and pari passu,
amounts due to:
(i) the Security Trustee and any Receiver appointed by the
Security Trustee, together with interest and any amount in
respect of VAT on those amounts, and to provide for any
amounts due or to become due to the Security Trustee and the
Receiver in the following Interest Period under the Funding 1
Deed of Charge;
(ii) the First Issuer in respect of the First Issuer's obligations
specified in items (a) and (b) of the First Issuer
Post-Enforcement Priority of Payments; and
(iii) the Second Issuer in respect of the Second Issuer's
obligations specified in items (a) and (b) of the Second
Issuer Post-Enforcement Priority of Payments;
(b) secondly, in or towards satisfaction of amounts due and payable to the
Cash Manager and any costs, charges, liabilities and expenses then due
or to become due and payable to the Cash Manager under the Cash
Management Agreement, together with VAT on those amounts;
(c) thirdly, in or towards satisfaction of, pro rata and pari passu,
amounts (if any) due to the Account Bank under the terms of the Bank
Account Agreement and to the Funding 1 Corporate Services Provider
under the Funding 1 Corporate Services Agreements;
(d) fourthly, in or towards satisfaction of amounts (if any) due to the
Funding 1 Liquidity Facility Provider under the Funding 1 Liquidity
Facility Agreement (except for any Funding 1 Liquidity Facility
Subordinated Amounts);
(e) fifthly, in or towards satisfaction of amounts (if any) due to the
Funding 1 Swap Provider under the Funding 1 Swap Agreement (including
any termination payment but excluding any Funding 1 Swap Excluded
Termination Amount;
(f) sixthly, in or towards satisfaction of, pro rata and pari passu,
amounts of interest and principal due and payable on the Term AAA
Advances;
(g) seventhly, in or towards satisfaction of, pro rata and pari passu,
amounts of interest and principal due and payable on the Term AA
Advances;
(h) eighthly, in or towards satisfaction of, pro rata and pari passu,
amounts of interest and principal due and payable on the Term BBB
Advances;
(i) ninthly, in or towards satisfaction of any amounts due to:
24
(i) the First Issuer in respect of the First Issuer's obligation's
(if any) to make a termination payment to a First Issuer Swap
Provider (but excluding any First Issuer Swap Excluded
Termination Amount);
(ii) the Second Issuer in respect of the Second Issuer's
obligations (if any) to make a termination payment to a Second
Issuer Swap Provider (but excluding any Second Issuer Swap
Excluded Termination Amount);
(j) tenthly, in or towards satisfaction of, pro rata and pari passu
(without double counting):
(i) amounts due to the First Issuer in respect of the First
Issuer's obligations to pay any termination payment to a First
Issuer Swap Provider as a result of a First Issuer Swap
Provider Default or a First Issuer Swap Provider Downgrade
Termination Event (as appropriate);
(ii) amounts due to the Second Issuer in respect of the Second
Issuer's obligations to pay any termination payment to a
Second Issuer Swap Provider as a result of a Current Swap
Provider Default or an Swap Provider Downgrade Termination
Event (as appropriate);
(iii) any other amounts due to the First Issuer under the First
Issuer Intercompany Loan Agreement and not otherwise provided
for earlier in this order of priorities;
(iv) any other amounts due to the Second Issuer under the Second
Issuer Intercompany Loan Agreement and not otherwise provided
for earlier in this order of priorities;
(v) any Funding 1 Liquidity Subordinated Amounts due to the
Funding 1 Liquidity Facility Provider; and
(vi) amounts due to the Funding 1 Swap Provider in respect of any
termination payment due to the Funding 1 Swap Provider as a
result of a Funding 1 Swap Provider Default or a Funding 1
Swap Provider Downgrade Termination Event; and
(k) eleventhly, towards payment, pro rata and pari passu, of amounts due
to:
(i) the First Start-up Loan Provider under the First Start-up Loan
Agreement; and
(ii) the Second Start-up Loan Provider under the Second Start-up
Loan Agreement.
25
DATED [6TH MARCH], 2003
PERMANENT FUNDING (NO. 1) LIMITED
and
PERMANENT FINANCING (NO. 1) PLC
and
PERMANENT FINANCING (NO. 2) PLC
and
STATE STREET BANK AND TRUST COMPANY
and
U.S. BANK NATIONAL ASSOCIATION
and
HALIFAX PLC
and
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
and
JPMORGAN CHASE BANK
and
STRUCTURED FINANCE MANAGEMENT LIMITED
-----------------------------------
FIRST DEED OF ACCESSION TO FUNDING 1 DEED OF CHARGE
-----------------------------------
▇▇▇▇▇ & ▇▇▇▇▇
London
ICM:639292.4
CONTENTS
CLAUSE PAGE
------ ----
1. Interpretation.........................................................................................2
2. Representations and Warranties.........................................................................3
3. Accession..............................................................................................3
4. Scope of the Funding 1 Deed of Charge..................................................................4
5. Amendment to the Funding 1 Priority of Payments........................................................4
6. Further Amendments.....................................................................................4
7. Miscellaneous..........................................................................................5
8. Application............................................................................................6
9. Notices and Demands....................................................................................6
10. Choice of Law..........................................................................................7
APPENDIX 1..................................................................................................12
Schedule 3..................................................................................................13
Part I - Funding 1 Pre-Enforcement Revenue Priority of Payments.............................................13
Part II - Funding 1 Principal Priorities of Payments........................................................17
Part III - Funding 1 Post-Enforcement Priority of Payments..................................................24
