UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest
event reported)
17 December 2007
Permanent Master Issuer PLC
(Exact name of issuing entity as specified in its charter)
Permanent Funding (No.2) Limited
(Exact name of depositor as specified in its charter)
Bank of Scotland plc
(Exact name of sponsor as specified in its charter)
England and Wales 333-137495-01 N/A
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) ID Number)
35 Great St. Helen's, London,
United Kingdom
EC3A 6AP
- ---------------------------------------------------------- --------------------
Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, +44 (0) 20 7398-6300
including area code:
No Change
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(d) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 - Entry into a Material Definitive Agreement
The Second Supplemental Master Issuer Trust Deed, dated 21 November 2007 (the
"EXISTING MASTER ISSUER TRUST DEED"), by and between Permanent Master Issuer plc
and the Bank of New York, which was filed as an exhibit to Amendment No.3 to the
registration statement on Form S-3 of Permanent Funding (No. 2) Limited (No.
333-145530) dated 17 December 2007, was amended and supplemented by the Third
Supplemental Master Issuer Trust Deed, dated 17 December 2007 (the "THIRD
SUPPLEMENTAL MASTER ISSUER TRUST DEED").
The Third Supplemental Master Issuer Trust Deed amended the Terms and Conditions
of the Notes set out in Schedule 3 of the Existing Master Issuer Trust Deed in
the following respects. Condition 5.5 ("Optional Redemption for Tax and other
Reasons") was amended so that the phrase "on the next Interest Payment Date"
only applies to Conditions 5.5(a) and 5.5(b) and not Condition 5.5(c). This
amendment was made in order to ensure that in Condition 5.5(c) the Master Issuer
can redeem the Notes when the Master Issuer or Funding 2 falls outside the
Securitisation Tax Regime, even if this does not fall on an Interest Payment
Date.
A definition of "Step-Up Date" was added to Condition 19, defining the term as
"the Interest Payment Date on which the Rates of Interest on the relevant Series
and Class of Notes increases by a pre-determined amount as specified in the
applicable Final Terms."
Capitalized terms used in this Form 8-K and not defined shall have the meanings
assigned to them in the Third Supplemental Master Issuer Trust Deed, attached as
Exhibit 4.1 hereto.
Item 9.01 - Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits:
Exhibit No. Description of Exhibit
- ------------------ --------------------------------------------------------
4.1 Third Supplemental Master Issuer Trust Deed
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PERMANENT FUNDING (NO.2) LIMITED,
as Depositor
By: /s/ David Balai
-----------------------------------
Name: David Balai
Title: Director
Dated: December 28, 2007
Exhibit Index
Exhibit No. Description of Exhibit
- ------------------ --------------------------------------------------------
4.1 Third Supplemental Master Issuer Trust Deed
Exhibit 4.1
EXECUTION COPY
THIRD SUPPLEMENTAL MASTER ISSUER TRUST DEED
DATED 17 DECEMBER 2007
PERMANENT MASTER ISSUER PLC
(AS MASTER ISSUER)
AND
THE BANK OF NEW YORK
(AS NOTE TRUSTEE)
RELATING TO A
MORTGAGE BACKED NOTE PROGRAMME
ALLEN & OVERY
ALLEN & OVERY LLP
33775-00220 ICM:5835822.1
CONTENTS
CLAUSE PAGE
1. Interpretation..........................................................1
2. Amendment to the Terms and Conditions...................................1
3. Supplemental............................................................2
4. Notices and Demands.....................................................2
5. Choice of Law...........................................................2
6. Counterparts............................................................2
7. Third Party Rights......................................................2
8. Submission to Jurisdiction..............................................2
Signatories....................................................................3
APPENDIX
1. Amended and Restated Terms and Conditions...............................4
THIS THIRD SUPPLEMENTAL MASTER ISSUER TRUST DEED (this DEED) is made on
17 December 2007
BETWEEN:
(1) PERMANENT MASTER ISSUER PLC (registered number 5922774) whose registered
office is at 35 Great St. Helen's, London EC3A 6AP (the MASTER ISSUER);
and
(2) THE BANK OF NEW YORK, a New York banking corporation whose London branch
address is at 48th Floor, One Canada Square, London E14 5AL (acting in
its capacity as NOTE TRUSTEE, which expression shall include such company
and all other persons and companies for the time being acting as note
trustee under this Deed).
WHEREAS:
(A) This Deed is supplemental to the Master Issuer Trust Deed made between
the parties hereto and dated the Programme Date as supplemented and
amended by the First Supplemental Master Issuer Trust Deed between the
parties hereto and dated 12 January 2007 and the Second Supplemental
Master Issuer Trust Deed between the parties hereto and dated 21 November
2007 (herein after referred to as the EXISTING MASTER ISSUER TRUST DEED).
(B) The Master Issuer and the Note Trustee have agreed to enter into this
Deed to, among other things, permit any consequential changes to the
Terms and Conditions of the Notes set out in Schedule 3 of the Existing
Master Issuer Trust Deed (the TERMS AND CONDITIONS) as are required and
any other amendment as may be required to give effect to this Deed.
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION
The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Deed and dated 21 November
2007 (as the same may be amended, varied or supplemented from time to
time with the consent of the parties to this Deed) (the MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) and the master issuer master
definitions and construction schedule signed by, amongst others, the
parties to this Deed and dated 21 November 2007 (as the same may be
amended, varied or supplemented from time to time with the consent of the
parties to this Deed) (the MASTER ISSUER MASTER DEFINITIONS AND
CONSTRUCTION SCHEDULE) are expressly and specifically incorporated into
this Deed and, accordingly, the expressions defined in the Master
Definitions and Construction Schedule and the Master 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 meanings in
this Deed, including the Recitals hereto, and this Deed shall be
construed in accordance with the interpretation provisions set out in
Clause 3 (Interpretation and Construction) of the Master Definitions and
Construction Schedule and the Master Issuer Master Definitions and
Construction Schedule.
2. AMENDMENT TO THE TERMS AND CONDITIONS
The Master Issuer and the Note Trustee agree to amend and restate the
Terms and Conditions in accordance with Appendix 1 hereto.
1
3. SUPPLEMENTAL
This Deed is supplemental to the Original Master Issuer Trust Deed. Save
as expressly amended by this Deed, the Original Master Issuer Trust Deed
shall remain in full force and effect and the security created under the
Original Master Issuer Trust Deed and all of the other rights, powers,
obligations and immunities comprised therein and arising pursuant thereto
shall remain in full force and effect notwithstanding this Deed. The
Original Master Issuer Trust Deed and this Deed shall henceforth be read
and construed as one document and references in the Original Master
Issuer Trust Deed to "this Deed" shall be read as references to the
Original Master Issuer Trust Deed as supplemented and amended by this
Deed.
4. NOTICES AND DEMANDS
Any notice or communication under or in connection with this Deed or the
Master Issuer Trust Deed shall be given in the manner and at the times
set out in Clause 24 (Notices) of the Master Issuer Trust Deed or at such
other address as the recipient may have notified to the other parties
hereto and/or thereto in writing.
5. CHOICE OF LAW
This Deed is governed by and shall be construed in accordance with
English law.
6. COUNTERPARTS
This Deed 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 Deed.
7. THIRD PARTY RIGHTS
This Deed 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 this Deed.
8. SUBMISSION TO JURISDICTION
Each party to this Deed hereby irrevocably submits to the exclusive
jurisdiction of the English courts in any action or proceeding arising
out of or relating to this Deed and hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and
determined by such courts. Each party to this Deed hereby irrevocably
waives, to the fullest extent it may possibly do so, any defence or claim
that the English courts are an inconvenient forum for the maintenance or
hearing of such action or proceeding.
DULY EXECUTED AND DELIVERED AS A DEED by each of the parties hereto or on its
behalf on the date appearing on page 1.
2
SIGNATORIES
THE MASTER ISSUER
EXECUTED as a DEED by )
PERMANENT )
MASTER ISSUER PLC )
acting by )
Director
Director/Secretary:
THE NOTE TRUSTEE
EXECUTED as a DEED )
for and on behalf of )
THE BANK OF NEW YORK )
by its authorised signatory )
in the presence of: )
Witness: )
Name:
Address:
3
APPENDIX 1
AMENDED AND RESTATED TERMS AND CONDITIONS
Schedule 3 of the Master Issuer Trust Deed shall be replaced in its
entirety by the following:
SCHEDULE 3
TERMS AND CONDITIONS OF THE NOTES
The following are the terms and conditions (the CONDITIONS, and any reference to
a CONDITION shall be construed accordingly) of each Series and Class of the
Notes in the form (subject to amendment) which will be incorporated by reference
into each Global Note and each Definitive Note, in the latter case only if
permitted by the relevant stock exchange or other relevant authority (if any)
and agreed by Permanent Master Issuer PLC (referred to in the Base Prospectus as
the MASTER ISSUER or the ISSUING ENTITY) and the relevant Dealer(s) and/or
Manager(s) at the time of issue but, if not so permitted and agreed, such
Definitive Note will have endorsed thereon or attached thereto such Conditions.
The Final Terms in relation to the relevant Series and Class of Notes may
specify other terms and conditions which shall, to the extent so specified or to
the extent inconsistent with these Conditions, replace or modify these
Conditions for the purpose of such Series and Class of Notes. The applicable
Final Terms (or the relevant provisions thereof) will be endorsed upon, or
attached to, each Global Note and each Definitive Note.
The Notes are constituted by the Master Issuer Trust Deed. The security for the
Notes is created pursuant to, and on the terms set out in, the Master Issuer
Deed of Charge. By the Master Issuer Paying Agent and Agent Bank Agreement,
provision is made for, inter alia, the payment of principal and interest in
respect of the Notes.
References herein to the NOTES shall, unless the context otherwise requires, be
references to all the Notes issued by the Master Issuer and constituted by the
Master Issuer Trust Deed and shall mean:
(a) in relation to any Notes of a Series and Class represented by a Global
Note or Global Notes, units of the lowest Specified Denomination in the
Specified Currency in each case of such Series and Class;
(b) any Global Note; and
(c) any Definitive Note issued in exchange for a Global Note.
Notes constituted by the Master Issuer Trust Deed are issued in series (each a
SERIES) and each Series comprises one or more classes of Notes (each a CLASS).
Each Series and Class of Notes is subject to the applicable Final Terms. The
Final Terms in relation to each Series and Class of Notes (or the relevant
provisions thereof) will be endorsed upon, or attached to, such Series and Class
of Notes and will supplement these Conditions in respect of such Series and
Class of Notes and may specify other terms and conditions which shall, to the
extent so specified or to the extent inconsistent with these Conditions, replace
or modify these Conditions for the purpose of such Series and Class of Notes.
References to the APPLICABLE FINAL TERMS are, in relation to a Series and Class
of Notes, to the Final Terms (or the relevant provisions thereof) attached to or
endorsed on such Series and Class of Notes.
The statements in these Conditions include summaries of, and are subject to, the
detailed provisions of the Master Issuer Trust Deed, the Master Issuer Deed of
Charge and the Master Issuer Paying Agent and Agent Bank Agreement.
Copies of the Master Issuer Trust Deed, the Master Issuer Deed of Charge, the
Master Issuer Paying Agent and Agent Bank Agreement and each of the other
Transaction Documents are available for inspection during
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normal business hours at the registered office of the Master Issuer, being
35 Great St. Helen's, London EC3A 6AP, United Kingdom and the specified office
for the time being of (a) the Principal Paying Agent, being at Citigroup Centre,
Canada Square, Canary Wharf, London E14 5LB, United Kingdom and (b) the US
Paying Agent, being at 14th Floor, 388 Greenwich Street, New York, New York
10013, United States. Copies of the Final Terms of each Series and Class of
Notes are obtainable by Noteholders during normal business hours at the
registered office of the Master Issuer and the specified office for the time
being of (i) the Principal Paying Agent and (ii) the US Paying Agent and any
Noteholder must produce evidence satisfactory to the relevant Paying Agent as
to its holding of Notes and identity.
The Holders of any Series and Class of Notes are entitled to the benefit of, are
bound by, and are deemed to have notice of all the provisions of, and
definitions contained or incorporated in, the Master Issuer Trust Deed, the
Master Issuer Deed of Charge, the Master Issuer Paying Agent and Agent Bank
Agreement, each of the other Transaction Documents and the applicable Final
Terms and to have notice of each other Final Terms relating to each other Series
and Class of Notes.
A glossary of definitions appears in CONDITION 19.
References herein to the Class A Noteholders, the Class B Noteholders, the Class
M Noteholders, the Class C Noteholders and the Class D Noteholders shall, in
each case and unless specified otherwise, be references to the Holders of the
Notes of all Series of the applicable Class.
References herein to the Class A Notes, the Class B Notes, the Class M Notes,
the Class C Notes or the Class D Notes shall, in each case and unless specified
otherwise, be references to the Notes of all Series of the applicable Class.
1. FORM, DENOMINATION, REGISTER, TITLE AND TRANSFERS
1.1 FORM AND DENOMINATION
The US Notes will initially be offered and sold pursuant to a
registration statement filed with the United States Securities and
Exchange Commission. The Reg S Notes will initially be offered and sold
outside the United States to non-US persons pursuant to Reg S.
Each Series and Class of Notes will be issued in the Specified Currency
and in the Specified Denomination.
Each Series and Class of US Notes will be initially represented by a US
Global Note, which, in the aggregate, will represent the Principal Amount
Outstanding from time to time of such Series and Class of US Notes. Each
Series and Class of Reg S Notes will be initially represented by a Reg S
Global Note which, in the aggregate, will represent the Principal Amount
Outstanding from time to time of such Series and Class of the Reg S
Notes.
Each Reg S Global Note will be deposited with, and registered in the name
of a nominee of, a common depositary for Euroclear and Clearstream,
Luxembourg. Each US Global Note will be deposited with a custodian for,
and registered in the name of Cede & Co. (or such other name as may be
requested by an authorised representative of DTC) as nominee of, DTC.
Each Global Note will be numbered serially with an identifying number
which will be recorded on the relevant Global Note and in the Register.
Each Series and Class of Notes may be Fixed Rate Notes, Floating Rate
Notes, Zero Coupon Notes or a combination of any of the foregoing,
depending upon the Interest Basis shown in the applicable Final Terms.
5
Each Series and Class of Notes may be Bullet Redemption Notes, Scheduled
Redemption Notes, Pass-Through Notes or a combination of any of the
foregoing, depending upon the Redemption/Payment Basis shown in the
applicable Final Terms.
Global Notes will be exchanged for notes in definitive registered form
(DEFINITIVE NOTES) only under certain limited circumstances (as described
in the relevant Global Note). If Definitive Notes are issued, they will
be serially numbered and issued in an aggregate principal amount equal to
the Principal Amount Outstanding of the relevant Global Note and in
registered form only.
The Reg S Notes (in either global or definitive form) will be issued in
such denominations as specified in the applicable Final Terms, save that
each Dollar Note will be issued in minimum denominations of $100,000 and
in integral multiples of $1,000 in excess thereof, each Euro Note will be
issued in minimum denominations of (euro)50,000 and in integral multiples
of (euro)1,000 in excess thereof and each Sterling Note will be issued in
minimum denominations of (pound)50,000 and in integral multiples of
(pound)1,000 in excess thereof (provided that Notes issued with a
maturity of less than one year will be issued in minimum denominations of
(pound)100,000 (or such equivalent amount). No Note will be issued in a
denomination of less than (euro)50,000 (or its equivalent in the relevant
currency).
In the case of a Series and Class of Notes with more than one Specified
Denomination, Notes of one Specified Denomination may not be exchanged
for Notes of such Series and Class of another Specified Denomination.
1.2 REGISTER
The Registrar will maintain the Register in respect of the Notes in
accordance with the provisions of the Master Issuer Paying Agent and
Agent Bank Agreement. In these Conditions, the HOLDER of a Note means the
person in whose name such Note is for the time being registered in the
Register (or, in the case of a joint holding, the first named thereof). A
Note will be issued to each Noteholder in respect of its registered
holding. Each Note will be numbered serially with an identifying number
which will be recorded in the Register.
1.3 TITLE
The Holder of each Note shall (to the fullest extent permitted by
applicable law) be treated by the Master Issuer, the Note Trustee, the
Master Issuer Security Trustee, the Agent Bank and any Agent as the
absolute owner of such Note for all purposes (including the making of any
payments) regardless of any notice of ownership, theft or loss or any
trust or other interest therein or of any writing thereon (other than the
endorsed form of transfer).
1.4 TRANSFERS
Title to the Notes shall pass by and upon registration in the Register.
Subject as provided otherwise in this CONDITION 1.4, a Note may be
transferred upon surrender of the relevant Note, with the endorsed form
of transfer duly completed, at the Specified Office of the Registrar or
the Transfer Agent, together with such evidence as the Registrar or (as
the case may be) such Transfer Agent may reasonably require to prove the
title of the transferor and the authority of the individuals who have
executed the form of transfer; provided, however, that a Note may only be
transferred in the minimum denominations specified in the applicable
Final Terms. Where not all the Notes represented by the surrendered Note
are the subject of the transfer, a new Note in respect of the balance of
the Notes will be issued to the transferor.
Within five Business Days of such surrender of a Note, the Registrar will
register the transfer in question and deliver a new Note of a like
principal amount to the Notes transferred to each relevant Holder at its
Specified Office or (as the case may be) the Specified Office of the
Transfer Agent or
6
(at the request and risk of any such relevant Holder) by uninsured first
class mail (and by airmail if the Holder is overseas) to the address
specified for such purpose by such relevant Holder.
The transfer of a Note will be effected without charge by the Registrar,
but subject to payment of (or the giving of such indemnity as the
Registrar may require for) any tax or other governmental charges which
may be imposed in relation to it.
Noteholders may not require transfers of Notes to be registered during
the period of 15 days ending on the due date for any payment of principal
or interest in respect of the Notes.
All transfers of Notes and entries on the Register are subject to the
detailed regulations concerning the transfer of Notes scheduled to the
Master Issuer Paying Agent and Agent Bank Agreement. The regulations may
be changed by the Master Issuer with the prior written approval of the
Note Trustee and the Registrar. A copy of the current regulations will be
mailed (free of charge) by the Registrar to any Noteholder who requests
in writing a copy of such regulations.
The Notes are not issuable in bearer form.
2. STATUS, PRIORITY AND SECURITY
2.1 STATUS
The Notes of each Series and Class are direct, secured and unconditional
obligations of the Master Issuer.
Subject to the provisions of CONDITIONS 4 and 5 and subject to the other
payment conditions set out in the applicable Final Terms and the other
Transaction Documents:
(a) the Class A Notes of each Series will rank pari passu without any
preference or priority among themselves and with the Class A Notes
of each other Series but in priority to the Class B Notes, the
Class M Notes, the Class C Notes and the Class D Notes of any
Series;
(b) the Class B Notes of each Series will rank pari passu without any
preference or priority among themselves and with the Class B Notes
of each other Series but in priority to the Class M Notes, the
Class C Notes and the Class D Notes of any Series;
(c) the Class M Notes of each Series will rank pari passu without any
preference or priority among themselves and with the Class M Notes
of each other Series but in priority to the Class C Notes and the
Class D Notes of any Series;
(d) the Class C Notes of each Series will rank pari passu without any
preference or priority among themselves and with the Class C Notes
of each other Series but in priority to the Class D Notes of any
Series; and
(e) the Class D Notes of each Series will rank pari passu without any
preference or priority among themselves and with the Class D Notes
of each other Series.
2.2 CONFLICT BETWEEN THE CLASSES OF NOTES
The Master Issuer Trust Deed contains provisions requiring the Note
Trustee to have regard to the interests of the Class A Noteholders, the
Class B Noteholders, the Class M Noteholders, the Class C Noteholders and
the Class D Noteholders equally as regards all powers, trusts,
authorities, duties and discretions of the Note Trustee under these
Conditions or any of the Transaction Documents (except
7
where expressly provided otherwise), but requiring the Note Trustee to
have regard (except as expressly provided otherwise):
(a) for so long as there are any Class A Notes outstanding, only to
the interests of the Class A Noteholders if, in the opinion of the
Note Trustee, there is or may be a conflict between the interests
of the Class A Noteholders and the interests of the Class B
Noteholders and/or the interests of the Class M Noteholders and/or
the interests of the Class C Noteholders and/or the interests of
the Class D Noteholders;
(b) subject to (a) above and for so long as there are any Class B
Notes outstanding, only to the interests of the Class B
Noteholders if, in the opinion of the Note Trustee there is or may
be a conflict between the interests of the Class B Noteholders and
the interest of the Class M Noteholders and/or the interests of
the Class C Noteholders and/or the interests of the Class D
Noteholders;
(c) subject to (a) and (b) above and for so long as there are any
Class M Notes outstanding, only to the interests of the Class M
Noteholders if, in the opinion of the Note Trustee, there is or
may be a conflict between the interests of the Class M Noteholders
and the interests of the Class C Noteholders and/or the interests
of the Class D Noteholders; and
(d) subject to (a), (b) above and (c) above and for so long as there
are any Class C Notes outstanding, only to the interests of the
Class C Noteholders if, in the opinion of the Note Trustee, there
is or may be a conflict between the interests of the Class C
Noteholders and the Class D Noteholders.
The Master Issuer Trust Deed also contains provisions:
(i) limiting the powers of the Class B Noteholders, the Class M
Noteholders, the Class C Noteholders and the Class D Noteholders
in each case, of any Series, inter alia, to request or direct the
Note Trustee to take any action or to pass an effective
Extraordinary Resolution according to the effect thereof on the
interests of the Class A Noteholders of that Series or of any
other Series. Except in certain circumstances described in
CONDITION 11, the Master Issuer Trust Deed contains no such
limitation on the powers of the Class A Noteholders, the exercise
of which will be binding on the Class B Noteholders, the Class M
Noteholders, the Class C Noteholders and the Class D Noteholders
in each case, of any Series, irrespective of the effect thereof on
their respective interests;
(ii) limiting the powers of the Class M Noteholders, the Class C
Noteholders and the Class D Noteholders in each case, of any
Series, inter alia, to request or direct the Note Trustee to take
any action or to pass an effective Extraordinary Resolution
according to the effect thereof on the interests of the Class B
Noteholders of that Series or of any other Series. Except in
certain circumstances described above and in CONDITION 11, the
Master Issuer Trust Deed contains no such limitation on the powers
of the Class B Noteholders, the exercise of which will be binding
on the Class M Noteholders, the Class C Noteholders and the Class
D Noteholders, in each case, of any Series, irrespective of the
effect thereof on their respective interests;
(iii) limiting the powers of the Class C Noteholders and the Class D
Noteholders in each case, of any Series, inter alia, to request or
direct the Note Trustee to take any action or to pass an effective
Extraordinary Resolution according to the effect thereof on the
interests of the Class M Noteholders of that Series or of any
other Series. Except in certain circumstances described above and
in CONDITION 11, the Master Issuer Trust Deed contains no such
limitation on the powers of the Class M Noteholders, the exercise
of which will be binding
8
on the Class C Noteholders and the Class D Noteholders in each
case, of any Series, irrespective of the effect thereof on their
interests; and
(iv) limiting the powers of the Class D Noteholders of any Series,
inter alia, to request or direct the Note Trustee to take any
action or to pass an effective Extraordinary Resolution according
to the effect thereof on the interests of the Class C Noteholders
of that Series or of any other Series. Except in certain
circumstances described above and in CONDITION 11, the Master
Issuer Trust Deed contains no such limitation on the powers of the
Class C Noteholders, the exercise of which will be binding on the
Class D Noteholders of any Series, irrespective of the effect
thereof on their respective interests.
The Note Trustee shall be entitled to assume, for the purpose of
exercising any right, power, trust, authority, duty or discretion under
or in relation to these Conditions or any of the Transaction Documents,
without further investigation or inquiry, that such exercise will not be
materially prejudicial to the interests of the Noteholders (or any Series
and Class thereof), if each of the Rating Agencies rating the relevant
Series and Class has confirmed in writing that the then current ratings
of the applicable Series and Class of Notes would not be reduced,
withdrawn or qualified by such exercise.
2.3 SECURITY
As security for, inter alia, the payment of all monies payable in respect
of the Notes, the Master Issuer has entered into the Master Issuer Deed
of Charge creating the Master Issuer Security in favour of the Master
Issuer Security Trustee for itself and on trust for, inter alios, the
Note Trustee and the Noteholders.
3. COVENANTS
Save with the prior written consent of the Note Trustee or unless
provided in or contemplated under these Conditions or any of the
Transaction Documents to which the Master Issuer is a party, the Master
Issuer shall not, so long as any Note remains outstanding:
3.1 NEGATIVE PLEDGE
create or permit to subsist any mortgage, standard security, pledge,
lien, charge or other security interest whatsoever (unless arising by
operation of law), upon the whole or any part of its assets (including
any uncalled capital) or its undertakings, present or future except where
the same is given in connection with the issue of a Series and Class of
Notes or the advance of a Master Issuer Subordinated Loan;
3.2 DISPOSAL OF ASSETS
sell, assign, transfer, lend, lease or otherwise dispose of, or deal
with, or grant any option or present or future right to acquire all or
any of its properties, assets, or undertakings or any interest, estate,
right, title or benefit therein or thereto or agree or attempt or purport
to do any of the foregoing;
3.3 EQUITABLE INTEREST
permit any person other than itself and the Master Issuer Security
Trustee (as to itself and on behalf of the Master Issuer Secured
Creditors) to have any equitable or beneficial interest in any of its
assets or undertakings or any interest, estate, right, title or benefit
therein;
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3.4 BANK ACCOUNTS
have an interest in any bank account, other than the Master Issuer Bank
Accounts, except in connection with the issue of a Series where such bank
account is immediately charged in favour of the Master Issuer Security
Trustee pursuant to the Master Issuer Deed of Charge;
3.5 RESTRICTIONS ON ACTIVITIES
carry on any business other than as described in the Base Prospectus (as
revised, supplemented and/or amended from time to time) relating to the
issue of the Notes, the advancing of Loan Tranches under the Master
Intercompany Loan Agreement to Funding 2 and the related activities
described therein or as contemplated in the Transaction Documents
relating to the issue of the Notes and the advancing of Loan Tranches
under the Master Intercompany Loan Agreement to Funding 2;
3.6 BORROWINGS
incur any indebtedness in respect of borrowed money whatsoever or give
any guarantee or indemnity in respect of any indebtedness or obligation
of any person, except where the same is incurred or given or the Master
Issuer becomes so obligated in connection with the issue of a Series and
Class of Notes or the advance of a Master Issuer Subordinated Loan or a
Master Issuer Start-Up Loan;
3.7 MERGER
consolidate or merge with any other person or convey or transfer
substantially all of its properties or assets to any other person;
3.8 WAIVER OR CONSENT
permit the validity or effectiveness of any of the Master Issuer Trust
Deed or the Master Issuer Deed of Charge or the priority of the security
interests created thereby to be amended, terminated, postponed, waived or
discharged, or permit any other person whose obligations form part of the
Master Issuer Security to be released from such obligations;
3.9 EMPLOYEES OR PREMISES
have any employees or premises or subsidiaries;
3.10 DIVIDENDS AND DISTRIBUTIONS
pay any dividend or make any other distribution to its shareholders or
issue any further shares or alter any rights attaching to its shares as
at the date of the Master Issuer Deed of Charge;
3.11 PURCHASE NOTES
purchase or otherwise acquire any Note or Notes; or
3.12 UNITED STATES ACTIVITIES
engage in any activities in the United States (directly or through
agents), or derive any income from United States sources as determined
under United States income tax principles, or hold any property if doing
so would cause it to be engaged in a trade or business within the United
States as determined under United States income tax principles.
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4. INTEREST
4.1 INTEREST ON FIXED RATE NOTES
Each Fixed Rate Note bears interest on its Principal Amount Outstanding
from (and including) the Interest Commencement Date at the rate(s) per
annum equal to the Rate(s) of Interest payable, subject as provided in
these Conditions, in arrear on the Interest Payment Date(s) in each year
specified for such Fixed Rate Note up to (and including) the Final
Maturity Date.
Except as provided in the applicable Final Terms, the amount of interest
payable in respect of any Fixed Rate Note on each Interest Payment Date
for a Fixed Interest Period ending on (but excluding) such date will
amount to the Fixed Coupon Amount. Payments of interest on any Interest
Payment Date will, if so specified for such Note in the applicable Final
Terms, amount to the Broken Amount so specified.
As used in these Conditions, FIXED INTEREST PERIOD means the period from
and including an Interest Payment Date (or the Interest Commencement
Date) to but excluding the next (or the first) Interest Payment Date.
If interest is required to be calculated in respect of any Fixed Rate
Note for a period other than a Fixed Interest Period, such interest shall
be calculated by applying the Rate of Interest specified for such Note in
the applicable Final Terms to the Principal Amount Outstanding on such
Note, multiplying such sum by the applicable Day Count Fraction, and
rounding the resultant figure to the nearest sub-unit of the relevant
Specified Currency, half of any such sub-unit being rounded upwards or
otherwise in accordance with applicable market convention and (in the
case of a Global Note) apportioning the resulting total between the
Noteholders in respect thereof pro rata and pari passu.
DAY COUNT FRACTION means, in respect of the calculation of an amount of
interest for any Fixed Rate Note in accordance with this CONDITION 4.1:
(a) if "Actual/Actual (ICMA)" is specified for such Note in the
applicable Final Terms:
(i) in the case of Fixed Rate Notes where the number of days in
the relevant period from (and including) the most recent
Interest Payment Date for such Fixed Rate Notes (or, if
none, the Interest Commencement Date) to (but excluding)
the relevant Interest Payment Date (the ACCRUAL PERIOD) is
equal to or shorter than the Determination Period during
which the Accrual Period ends, the number of days in such
Accrual Period divided by the product of (A) the number of
days in such Determination Period and (B) the number of
Determination Dates (as specified in the applicable Final
Terms) that would occur in one calendar year; or
(ii) in the case of Fixed Rate Notes where the Accrual Period is
longer than the Determination Period during which the
Accrual Period ends, the sum of:
(A) the number of days in such Accrual Period falling in
the Determination Period in which the Accrual Period
begins divided by the product of (x) the number of
days in such Determination Period and (y) the number
of Determination Dates that would occur in one
calendar year; and
(B) the number of days in such Accrual Period falling in
the next Determination Period divided by the product
of (I) the number of days in such Determination
Period and (II) the number of Determination Dates
that would occur in one calendar year; and
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(b) if "30/360" is specified for such Fixed Rate Note in the
applicable Final Terms, the number of days in the period from (and
including) the most recent Interest Payment Date for such Fixed
Rate Note (or, if none, the Interest Commencement Date) to (but
excluding) the relevant Interest Payment Date (such number of days
being calculated on the basis of a year of 360 days with twelve
30-day months) divided by 360.
As used in these Conditions, DETERMINATION PERIOD means each period from
and including a Determination Date (as defined in the applicable Final
Terms) to but excluding the next Determination Date (including where
either the Interest Commencement Date or the final Interest Payment Date
is not a Determination Date, the period commencing on the first
Determination Date prior to, and ending on the first Determination Date
falling after, such date).
4.2 INTEREST ON FLOATING RATE NOTES
(a) Interest Payment Dates
Each Floating Rate Note bears interest on its Principal Amount
Outstanding from (and including) the Interest Commencement Date and such
interest will be payable in arrear on the Interest Payment Date(s) in
each year specified for such Floating Rate Note. Such interest will be
payable in respect of each Floating Interest Period.
As used in these Conditions, FLOATING INTEREST PERIOD means the period
from and including an Interest Payment Date (or the Interest Commencement
Date) to but excluding the next (or the first) Interest Payment Date.
If a Business Day Convention is specified for a Floating Rate Note in the
applicable Final Terms and (x) if there is no numerically corresponding
day in the calendar month in which a Interest Payment Date should occur
or (y) if any Interest Payment Date would otherwise fall on a day which
is not a Business Day, then, if the Business Day Convention specified is:
(i) the "Following Business Day Convention", the Interest Payment Date
for such Floating Rate Note shall be postponed to the next day
which is a Business Day; or
(ii) the "Modified Following Business Day Convention", the Interest
Payment Date for such Floating Rate Note shall be postponed to the
next day which is a Business Day unless it would thereby fall into
the next calendar month, in which event such Interest Payment Date
shall be brought forward to the immediately preceding Business
Day; or
(iii) the "Preceding Business Day Convention", the Interest Payment Date
for such Floating Rate Note shall be brought forward to the
immediately preceding Business Day.
In these Conditions, BUSINESS DAY means a day which is both:
(i) a day on which commercial banks and foreign exchange markets
settle payments and are open for general business (including
dealing in foreign exchange and foreign currency deposits) in
London, New York and any Additional Business Centre specified in
the applicable Final Terms;
(ii) a day on which the Trans-European Automated Real-Time Gross
Settlement Express Transfer (TARGET) System (the TARGET SYSTEM) is
open; and
(iii) in relation to any sum payable in a Specified Currency other than
sterling, US dollar or euro a day on which commercial banks and
foreign exchange markets settle payments and are open for general
business (including dealing in foreign exchange and foreign
currency deposits) in the principal financial centre of the
country of the relevant Specified Currency (if other than London,
New York and any Additional Business Centre).
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(b) Rate of Interest
The Rate of Interest payable from time to time in respect of a Floating
Rate Note will be determined in the manner specified for such Note in the
applicable Final Terms.
(i) ISDA Determination for Floating Rate Notes
Where "ISDA Determination" is specified for such Floating Rate
Note in the applicable Final Terms as the manner in which the Rate
of Interest is to be determined, the Rate of Interest for each
Floating Rate Interest Period will be the relevant ISDA Rate plus
or minus (as indicated for such Floating Rate Note in the
applicable Final Terms) the Margin (if any). For the purposes of
this subparagraph (i), ISDA RATE for an Interest Period means a
rate equal to the Floating Rate that would be determined by the
Agent Bank or other person specified in the applicable Final Terms
under an interest rate swap transaction if the Agent Bank or that
other person were acting as Calculation Agent for that swap
transaction under the terms of an agreement incorporating the ISDA
Definitions and under which:
(A) the Floating Rate Option is as specified for such Floating
Rate Note in the applicable Final Terms;
(B) the Designated Maturity is the period specified for such
Floating Rate Note in the applicable Final Terms; and
(C) the relevant Reset Date is either (i) if the applicable
Floating Rate Option is based on LIBOR or EURIBOR for a
currency, the first day of that Interest Period, or (ii) in
any other case, as specified for such Floating Rate Note in
the applicable Final Terms.
For the purposes of this subparagraph (i), FLOATING RATE,
CALCULATION AGENT, FLOATING RATE OPTION, DESIGNATED MATURITY and
RESET DATE have the meanings given to those terms in the ISDA
Definitions.
(ii) Screen Rate Determination for Floating Rate Notes
Where SCREEN RATE DETERMINATION is specified for a Floating Rate
Note in the applicable Final Terms as the manner in which the Rate
of Interest is to be determined for such Floating Rate Note, the
Rate of Interest for each Interest Period will, subject as
provided below, be either:
(A) the offered quotation (if there is only one quotation on
the Relevant Screen Page); or
(B) the arithmetic mean (rounded if necessary to the fifth
decimal place, with 0.000005 being rounded upwards) of the
offered quotations,
(expressed as a percentage rate per annum) for the Reference Rate
which appears or appear, as the case may be, on the Relevant
Screen Page as at 11.00 a.m. (London time, in the case of LIBOR,
or Brussels time, in the case of EURIBOR) on the Determination
Date in question plus or minus the Margin (if any), all as
determined by the Agent Bank. If five or more of such offered
quotations are available on the Relevant Screen Page, the highest
(or, if there is more than one such highest quotation, one only of
such quotations) and the lowest (or, if there is more than one
such lowest quotation, one only of such quotations) shall be
disregarded by the Agent Bank for the purpose of determining the
arithmetic mean (rounded as provided above) of such offered
quotations.
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The Master Issuer Paying Agent and Agent Bank Agreement contains
provisions for determining the Rate of Interest pursuant to this
subparagraph (ii) in the event that the Relevant Screen Page is
not available or if, in the case of (A) above, no such offered
quotation appears or, in the case of (B) above, fewer than three
such offered quotations appear, in each case as at the time
specified in the preceding paragraph.
If the Reference Rate from time to time in respect of a Floating
Rate Note is specified for such Floating Rate Note in the
applicable Final Terms as being other than LIBOR or EURIBOR, the
Rate of Interest in respect of such Floating Rate Note will be
determined as provided for such Note in the applicable Final
Terms.
(c) Minimum Rate of Interest and/or Maximum Rate of Interest
If the applicable Final Terms specifies a Minimum Rate of Interest for a
Floating Rate Note for any Interest Period, then, in the event that the
Rate of Interest for such Floating Rate Note in respect of such Interest
Period determined in accordance with the provisions of paragraph (b)
above is less than such Minimum Rate of Interest, the Rate of Interest
for such Floating Rate Note for such Interest Period shall be such
Minimum Rate of Interest.
If the applicable Final Terms specifies a Maximum Rate of Interest for
such Floating Rate Note for any Interest Period, then, in the event that
the Rate of Interest for such Floating Rate Note in respect of such
Interest Period determined in accordance with the provisions of paragraph
(b) above is greater than such Maximum Rate of Interest, the Rate of
Interest for such Floating Rate Note for such Interest Period shall be
such Maximum Rate of Interest.
(d) Determination of Rate of Interest and calculation of Interest Amounts
The Agent Bank will at or as soon as practicable after each time at which
the Rate of Interest is to be determined, determine the Rate of Interest
for the relevant Interest Period.
The Agent Bank will calculate the amount of interest payable on the
Floating Rate Notes in respect of each Specified Denomination or (in the
case of a Global Note) the Principal Amount Outstanding thereunder (each
an INTEREST AMOUNT) for the relevant Interest Period. Each Interest
Amount shall be calculated by applying the Rate of Interest to the
Principal Amount Outstanding of each Floating Rate Note, multiplying such
sum by the applicable Day Count Fraction, and rounding the resultant
figure to the nearest sub-unit of the relevant Specified Currency, half
of any such subunit being rounded upwards or otherwise in accordance with
applicable market convention and (in the case of a Global Note)
apportioning the resulting total between the Noteholders in respect
thereof pro rata and pari passu.
DAY COUNT FRACTION means, in respect of the calculation of an amount of
interest for a Floating Rate Note in accordance with this CONDITION
4.2(D) for any Interest Period:
(a) if ACTUAL/365 or ACTUAL/ACTUAL (ISDA) is specified for such
Floating Rate Note in the applicable Final Terms, the actual
number of days in the Interest Period divided by 365 (or, if any
portion of that Interest Period falls in a leap year, the sum of
(A) the actual number of days in that portion of the Interest
Period falling in a leap year divided by 366 and (B) the actual
number of days in that portion of the Interest Period falling in a
non-leap year divided by 365);
14
(b) if ACTUAL/365 (FIXED) is specified for such for such Floating Rate
Note in the applicable Final Terms, the actual number of days in
the Interest Period divided by 365;
(c) if ACTUAL/365 (STERLING) is specified for such Floating Rate Note
in the applicable Final Terms, the actual number of days in the
Interest Period divided by 365 or, in the case of a Interest
Payment Date falling in a leap year, 366;
(d) if ACTUAL/360 is specified for such Floating Rate Note in the
applicable Final Terms, the actual number of days in the Interest
Period divided by 360;
(e) if 30/360, 360/360 or BOND BASIS is specified for such Floating
Rate Note in the applicable Final Terms, the number of days in the
Interest Period divided by 360 (the number of days to be
calculated on the basis of a year of 360 days with twelve 30-day
months (unless (i) the last day of the Interest Period is the 31st
day of a month but the first day of the Interest Period is a day
other than the 30th or 31st day of a month, in which case the
month that includes that last day shall not be considered to be
shortened to a 30-day month, or (ii) the last day of the Interest
Period is the last day of the month of February, in which case the
month of February shall not be considered to be lengthened to a
30-day month)); and
(f) if 30E/360 or EUROBOND BASIS is specified for such Floating Rate
Note in the applicable Final Terms, the number of days in the
Interest Period divided by 360 (the number of days to be
calculated on the basis of a year of 360 days with twelve 30-day
months, without regard to the date of the first day or last day of
the Interest Period unless, in the case of the final Interest
Period, the Final Maturity Date is the last day of the month of
February, in which case the month of February shall not be
considered to be lengthened to a 30-day month).
(g) Notification of Rate of Interest and Interest Amounts
The Agent Bank will cause the Rate of Interest and each Interest
Amount for each Interest Period and the relevant Interest Payment
Date to be notified to the Note Trustee, the Master Issuer
Security Trustee, the Master Issuer Cash Manager, the Paying
Agents, the Registrar and to any stock exchange or other relevant
competent authority or quotation system on which the relevant
Floating Rate Notes are for the time being listed, quoted and/or
traded or by which they have been admitted to listing and to be
published in accordance with CONDITION 14 as soon as possible
after their determination but in no event later than the fourth
Business Day thereafter. Each Interest Amount and Interest Payment
Date so notified may subsequently be amended (or appropriate
alternative arrangements made by way of adjustment) without notice
in the event of an extension or shortening of the Interest Period.
Any such amendment or alternative arrangements will be promptly
notified to the Note Trustee and each stock exchange or other
relevant authority on which the relevant Floating Rate Notes are
for the time being listed or by which they have been admitted to
listing and to Noteholders in accordance with CONDITION 14.
(h) Determination or Calculation by Note Trustee
If for any reason at any relevant time, the Agent Bank or, as the
case may be, the Calculation Agent defaults in its obligation to
determine the Rate of Interest for a Floating Rate Note or the
Agent Bank defaults in its obligation to calculate any Interest
Amount for such Note in accordance with SUBPARAGRAPH (i)(b) or
(ii) above or as otherwise specified for such Note in the
applicable Final Terms, as the case may be, and in each case in
accordance with PARAGRAPH (d) above, the Note Trustee shall
determine the Rate of Interest at such rate as, in its absolute
discretion (having such regard as it shall think fit to the
foregoing provisions of this Condition, but subject always to any
Minimum Rate of Interest or Maximum Rate of Interest specified for
such Note in the applicable Final Terms), it shall deem fair and
reasonable in all the circumstances or, as the case may be, the
Note Trustee shall calculate the Interest Amount(s) in such manner
as it shall deem fair and reasonable in all the circumstances and
each such determination or calculation shall be deemed to have
been made by the Agent Bank or the Calculation Agent, as the case
may be.
15
(i) Certificates to be final
All certificates, communications, opinions, determinations,
calculations, quotations and decisions given, expressed, made or
obtained for the purposes of the provisions of this CONDITION 4.2,
whether by the Agent Bank or the Calculation Agent or the Note
Trustee shall (in the absence of wilful default, bad faith or
manifest error) be binding on the Master Issuer, the Master Issuer
Cash Manager, the Principal Paying Agent, the Calculation Agent,
the other Paying Agents, the Note Trustee and all Noteholders and
(in the absence of wilful default or bad faith) no liability to
the Master Issuer or the Noteholders shall attach to the Agent
Bank or the Calculation Agent or the Note Trustee in connection
with the exercise or non-exercise by it of its powers, duties and
discretions pursuant to such provisions.
4.3 ACCRUAL OF INTEREST
Interest (if any) will cease to accrue on each Note (or in the case of
the redemption of part only of a Note, that part only of such Note) on
the due date for redemption thereof unless, upon due presentation
thereof, payment of principal is improperly withheld or refused in which
event, interest will continue to accrue until the earlier of:
(a) the date on which all amounts due in respect of such Note have
been paid; and
(b) the seventh day after notice is duly given by the Principal Paying
Agent or the US Paying Agent (as the case may be) to the Holder
thereof that such payment will be made, provided that
subsequently, payment is in fact made.
4.4 DEFERRED INTEREST
To the extent that, subject to and in accordance with the relevant Master
Issuer Priority of Payments, the funds available to the Master Issuer to
pay interest on any Series and Class of Notes (other than any Series and
Class of Notes if then the most senior Class of Notes then outstanding)
on an Interest Payment Date (after discharging the Master Issuer's
liabilities of a higher priority) are insufficient to pay the full amount
of such interest, payment of the shortfall attributable to such Series
and Class of Notes (DEFERRED INTEREST) will not then fall due but will
instead be deferred until the first Interest Payment Date for such Notes
thereafter on which sufficient funds are available (after allowing for
the Master Issuer's liabilities of a higher priority and subject to and
in accordance with the relevant Master Issuer Priority of Payments) to
fund the payment of such Deferred Interest to the extent of such
available funds.
Such Deferred Interest will accrue interest (ADDITIONAL INTEREST) at the
rate of interest applicable from time to time to the applicable Series
and Class of Notes and payment of any Additional Interest will also be
deferred until the first Interest Payment Date for such Notes thereafter
on which funds are available (after allowing for the Master Issuer's
liabilities of a higher priority subject to and in accordance with the
relevant Master Issuer Priority of Payments) to the Master Issuer to pay
such Additional Interest to the extent of such available funds.
Amounts of Deferred Interest and Additional Interest shall not be
deferred beyond the Final Maturity Date of the applicable Series and
Class of Notes, when such amounts will become due and payable.
16
Payments of interest due on an Interest Payment Date in respect of the
most senior Class of Notes of any Series then outstanding will not be
deferred. In the event of the delivery of a Note Acceleration Notice (as
described in CONDITION 9), the amount of interest in respect of such
Notes that was due but not paid on such Interest Payment Date will itself
bear interest at the applicable rate until both the unpaid interest and
the interest on that interest are paid as provided in the Master Issuer
Trust Deed.
5. REDEMPTION, PURCHASE AND CANCELLATION
5.1 FINAL REDEMPTION
Unless previously redeemed in full as provided in this CONDITION 5, the
Master Issuer shall redeem a Series and Class of Notes at their then
Principal Amount Outstanding together with all accrued interest on the
Final Maturity Date in respect of such Notes.
The Master Issuer may not redeem such Notes in whole or in part prior to
their Final Maturity Date except as provided in CONDITIONS 5.2, 5.4, 5.5
or 5.6 below, but without prejudice to CONDITION 9.
5.2 MANDATORY REDEMPTION OF THE NOTES IN PART
On each Interest Payment Date, other than a Interest Payment Date on
which a Series and Class of Notes are to be redeemed under CONDITIONS
5.1, 5.4, 5.5 or 5.6, the Master Issuer shall repay principal in respect
of such Series and Class of Notes in an amount equal to the amount (if
any) repaid on the corresponding Funding 2 Interest Payment Date in
respect of the related Loan Tranche and pursuant to the Master
Intercompany Loan Agreement converted, where the Specified Currency for
such Notes is not Sterling, into the Specified Currency at the Specified
Currency Exchange Rate for such Notes.
To the extent that there are insufficient funds available to the Master
Issuer to repay the amount due to be paid on such Interest Payment Date
the Master Issuer will be required to repay the shortfall, to the extent
that it receives funds therefor (and subject to the terms of the Master
Issuer Deed of Charge and the Master Issuer Cash Management Agreement) on
subsequent Interest Payment Dates in respect of such Series and Class of
Notes.
5.3 NOTE PRINCIPAL PAYMENTS AND PRINCIPAL AMOUNT OUTSTANDING
The principal amount redeemable (the NOTE PRINCIPAL PAYMENT) in respect
of each Note of a particular Series and Class on any Interest Payment
Date under CONDITION 5.2 above shall be a proportion of the amount
required as at that Interest Payment Date to be applied in redemption of
such Series and Class of Notes on such date equal to the proportion that
the Principal Amount Outstanding of the relevant Note bears to the
aggregate Principal Amount Outstanding of such Series and Class of Notes
rounded down to the nearest sub-unit of the Specified Currency; provided
always that no such Note Principal Payment may exceed the Principal
Amount Outstanding of the relevant Note.
On each Note Determination Date the Master Issuer shall determine (or
cause the Agent Bank to determine) (a) the amount of any Note Principal
Payment payable in respect of each Note of the relevant Series and Class
on the immediately following Interest Payment Date and (b) the Principal
Amount Outstanding of each such Note which shall be the Specified
Denomination less (in each case) the aggregate amount of all Note
Principal Payments in respect of such Note that has been paid since the
relevant Closing Date and on or prior to that Note Determination Date
(the PRINCIPAL AMOUNT OUTSTANDING) and (c) the fraction expressed as a
decimal to the fifth decimal point (the POOL FACTOR), of which the
numerator is the Principal Amount Outstanding of that Note (as referred
to in (b) above) and the denominator is the Specified Denomination. Each
determination by or on behalf of the Master Issuer of Note Principal
Payment of a Note, the Principal Amount Outstanding of a Note and the
Pool Factor shall in each case (in the absence of wilful default, bad
faith or manifest error) be final and binding on all persons.
17
The Master Issuer will cause each determination of the Note Principal
Payment and the Principal Amount Outstanding and the Pool Factor in
respect of a Series and Class of Notes to be notified forthwith, and in
any event not later than 1.00 p.m. (London time) on the Business Day
immediately succeeding the Note Determination Date, to the Principal
Paying Agent, who will then notify the Agent Bank, other Paying Agents,
the Note Trustee, the Registrar and (for so long as such Notes are listed
on one or more stock exchanges) the relevant stock exchanges, and will
cause notice of each determination of the Note Principal Payment and the
Principal Amount Outstanding to be given to Noteholders in accordance
with CONDITION 14 by no later than the Business Day after the relevant
Interest Payment Date.
If the Master Issuer does not at any time for any reason determine (or
cause the Agent Bank to determine) a Note Principal Payment, the
Principal Amount Outstanding or the Pool Factor in accordance with the
preceding provisions of this CONDITION 5.3, such Note Principal Payment
and/or Principal Amount Outstanding and/or Pool Factor may be determined
by the Note Trustee in accordance with this CONDITION 5.3 in the manner
the Note Trustee in its discretion considers fair and reasonable in the
circumstances, having regard to this CONDITION 5.3, and each such
determination or calculation shall be deemed to have been made by the
Master Issuer. Any such determination shall (in the absence of wilful
default, bad faith or manifest error) be binding on the Master Issuer,
the Agent Bank and the Noteholders.
5.4 OPTIONAL REDEMPTION IN FULL
Provided a Note Acceleration Notice has not been served and subject to
the provisos below, upon giving not more than 60 nor less than 30 days'
prior written notice to the Note Trustee, the relevant Master Issuer Swap
Provider(s) and the Noteholders in accordance with CONDITION 14, the
Master Issuer may redeem a Series and Class of Notes at their aggregate
Redemption Amount together with any accrued and unpaid interest in
respect thereof on the following dates:
(a) the date specified as the Call Option Date (if any) for such
Series and Class of Notes in the applicable Final Terms and on any
Interest Payment Date for such Series and Class of Notes
thereafter; or
(b) the date specified as the Step-Up Date for such Series and Class
of Notes in the applicable Final Terms and on any Interest Payment
Date for such Series and Class of Notes thereafter; and
(c) on such Interest Payment Date on which the aggregate Principal
Amount Outstanding of such Series and Class of Notes and all other
Classes of Notes of the same Series is less than 10% of the
aggregate Principal Amount Outstanding of such Series of Notes as
at the Closing Date on which such Series of Notes were issued,
PROVIDED THAT:
(i) (in any of the cases above), on or prior to giving any such
notice, the Master Issuer shall have provided to the Note Trustee
a certificate signed by two directors of the Master Issuer to the
effect that it will have the necessary funds to pay all amounts
due in respect of the relevant Series and Class of Notes on the
relevant Interest Payment Date and to discharge all other amounts
required to be paid by it on the relevant Interest Payment Date in
priority to or pari passu with such Series and Class of Notes in
accordance with the applicable Master Issuer Priority of Payments;
and
18
(ii) (in the cases of (a) and (b) above), (1) the amount standing to
the credit of the Funding 2 General Reserve Ledger is equal to or
greater than the Funding 2 Reserve Required Amount or (2) each
Rating Agency has provided written confirmation that the
redemption will not result in a reduction, qualification or
withdrawal of the then current ratings of the Notes then
outstanding.
5.5 OPTIONAL REDEMPTION FOR TAX AND OTHER REASONS
Provided a Note Acceleration Notice has not been served, if the Master
Issuer at any time satisfies the Note Trustee immediately prior to the
giving of the notice referred to below that:
(a) on the next Interest Payment Date the Master Issuer would by
virtue of a change in the law or regulations of the United Kingdom
or any other jurisdiction (or the application or interpretation
thereof) be required to deduct or withhold from any payment of
principal or interest or any other amount under a Series and Class
of Notes any amount for or on account of any present or future
taxes, duties, assessments or governmental charges of whatever
nature (other than where the relevant Holder or beneficial owner
has some connection with the relevant jurisdiction other than the
holding of the Notes); or
(b) on the next Interest Payment Date Funding 2 would be required to
deduct or withhold from amounts due in respect of the Loan Tranche
under the Master Intercompany Loan Agreement which was funded by
such Series and Class of Notes any amount for or on account of any
present or future taxes, duties, assessments or governmental
charges of whatever nature; or
(c) the Master Issuer or Funding 2, as the case may be, falls within
the Securitisation Tax Regime but subsequently ceases to fall
within such regime; and
(d) in relation to any of the events described in (a), (b) and (c)
above, such obligation of the Master Issuer or Funding 2 (as the
case may be) or such ceasing to fall within the Securitisation Tax
Regime cannot be avoided by the Master Issuer or Funding 2 (as the
case may be) taking reasonable measures available to the Master
Issuer or Funding 2 (as the case may be),
then (in the case of any of the events described in (a) to (b) above) the
Master Issuer shall use its reasonable endeavours to arrange the
substitution of a company incorporated in another jurisdiction approved
by the Note Trustee as principal debtor under such Notes, upon the Note
Trustee being satisfied that (1) such substitution will not be materially
prejudicial to the interests of the Noteholders of any Series and Class,
and upon the Master Issuer Security Trustee being satisfied that (A) the
position of the Master Issuer Secured Creditors will not thereby be
adversely affected, and (B) such substitution would not require
registration of any new security under United States securities laws or
materially increase the disclosure requirements under United States law
or the costs of issuance. Only if the Master Issuer is unable to arrange
a substitution will the Master Issuer be entitled to redeem the Notes as
described in this CONDITION 5.5.
Subject to the proviso below, if the Master Issuer is unable to arrange a
substitution as described above and, as a result, one or more of the
events described in (a) or (b) above (as the case may be) is continuing,
or if the event described in (c) above is continuing, then the Master
Issuer may, having given not more than 60 nor less than 30 days' notice
to the Note Trustee, the relevant Master Issuer Swap Provider(s) and the
Noteholders in accordance with CONDITION 14, redeem all (but not some
only) of such Series and Class of Notes on the immediately succeeding
Interest Payment Date for such Notes at their aggregate Redemption Amount
together with any accrued and unpaid interest in respect thereof provided
that (in either case), prior to giving any such notice, the Master Issuer
shall have provided to the Note Trustee:
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(i) a certificate signed by two directors of the Master Issuer stating
the circumstances referred to in (a), (b) or (c) above and (d)
above prevail and setting out details of such circumstances; and
(ii) an opinion in form and substance satisfactory to the Note Trustee
of independent legal advisors of recognised standing to the effect
that the Master Issuer has or will become obliged to deduct or
withhold such amounts as a result of such change or amendment or,
as the case may be, that the Master Issuer or Funding 2, as the
case may be, has or will cease to fall within the Securitisation
Tax Regime and that such cessation would result in the Master
Issuer and/or Funding 2 having to pay more tax than if the Master
Issuer and Funding 2 remained within the Securitisation Tax
Regime.
The Note Trustee shall be entitled to accept such certificate and opinion
as sufficient evidence of the satisfaction of the circumstance set out in
(a), (b) or (c) above and (d) above in which event they shall be
conclusive and binding on the Noteholders. The Master Issuer may only
redeem such Series and Class of Notes as aforesaid, if on or prior to
giving such notice, the Master Issuer shall have provided to the Note
Trustee a certificate signed by two directors of the Master Issuer to the
effect that (A) it will have the funds available to make the required
payment of principal and interest due in respect of such Series and Class
of Notes on the relevant Interest Payment Date and to discharge all other
amounts required to be paid by it on the relevant Interest Payment Date
in priority to or pari passu with such Series and Class of Notes in
accordance with the applicable Master Issuer Priority of Payments.
In addition to the foregoing, if at any time the Master Issuer delivers a
certificate to Funding 2, the Note Trustee and the Master Issuer Security
Trustee to the effect that it would be unlawful for the Master Issuer to
make, fund or allow to remain outstanding a Rated Loan Tranche under the
Master Intercompany Loan Agreement, then the Master Issuer may require
Funding 2 to prepay the relevant Loan Tranche on a Funding 2 Interest
Payment Date subject to and in accordance with the provisions of the
Master Intercompany Loan Agreement to the extent necessary to cure such
illegality and the Master Issuer may redeem all (but not some only) of
the relevant Series and Class of Notes at their Redemption Amount
together with any accrued interest upon giving not more than 60 nor less
than 30 days' (or such shorter period as may be required under any
relevant law) prior written notice to the Master Issuer Security Trustee,
the Note Trustee, the relevant Master Issuer Swap Provider(s) and the
Noteholders in accordance with CONDITION 14, provided that, prior to
giving any notice, the Master Issuer shall have provided to the Note
Trustee a certificate signed by two directors of the Master Issuer to the
effect that it will have the funds, not subject to the interest of any
other person, required to redeem the relevant Series and Class of Notes
as provided above and any amount to be paid in priority to or pari passu
with the relevant Series and Class of Notes. Such monies received by the
Master Issuer shall be used to redeem the relevant Series and Class of
Notes in full, together with any accrued and unpaid interest, on the
equivalent Interest Payment Date.
5.6 OPTIONAL REDEMPTION OR PURCHASE FOR IMPLEMENTATION OF CAPITAL
REQUIREMENTS DIRECTIVE
(a) If:
(i) the Basel II Framework (as described in the document titled "Basel
II the International Convergence of Capital Measurement and
Capital Standards: A Revised Framework" published in June 2004 by
the Basel Committee on Banking Supervision) has been implemented
in the United Kingdom, whether by rule of law, recommendation of
best practices or by any other regulation (including pursuant to
implementation in the United Kingdom of the EU Capital
Requirements Directive);
(ii) a Note Acceleration Notice has not been served on the relevant
interest payment date for the exercise of the Purchase Option or
Redemption Option, as the case may be;
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(iii) the Master Issuer has given not more than 60 days' and not less
than 30 days' (or such shorter period as may be required by any
relevant law) prior written notice to the Note Trustee, the Master
Issuer Swap Provider and the Noteholders, in accordance with
CONDITION 15 of the exercise of the Purchase Option or Redemption
Option, as the case may be;
(iv) prior to giving any such notice, the Master Issuer shall have
provided to the Note Trustee a certificate signed by two directors
of the Master Issuer to the effect that the Master Issuer will
have necessary funds to purchase or redeem, as the case may be,
the Called Notes in accordance with this CONDITION 5.6 and to
discharge all other amounts required to be paid by it on the
relevant Interest Payment Date in priority to or pari passu with
payments on the Called Notes on the relevant Interest Payment Date
in accordance with the applicable Master Issuer Priority of
Payments; and
(v) the FSA has approved the exercise of the Purchase Option or
Redemption Option (as defined below), as the case may be, if such
approval is required by rule of law, recommendations of best
practices or by any other regulation,
then:
(A) the Master Issuer has the right (the PURCHASE OPTION) to require
holders of all but not some only of the Class B Notes and/or the
Class M Notes and/or the Class C Notes and/or the Class D Notes,
in each case, of any one or more Series issued prior to 1 January
2008 (collectively, the CALLED NOTES) to transfer the Called Notes
to the Master Issuer on any Interest Payment Date (prior to 31
December 2010 or such later date as may be permitted by the FSA)
falling on or after the Interest Payment Date specified in the
applicable Final Terms (if any) for a price equal to the aggregate
Redemption Amount, together with any accrued interest on the
Called Notes, or
(B) the Master Issuer may redeem (the REDEMPTION OPTION) the Called
Notes on any Interest Payment Date (prior to 31 December 2010 or
such later date as may be permitted by the FSA) falling on or
after the Interest Payment Date specified in the applicable Final
Terms (if any) at the aggregate Redemption Amount, together with
any accrued interest on the Called Notes.
(b) The Called Notes transferred to the Master Issuer pursuant to the
Purchase Option shall, subject as provided in (c) below, remain
outstanding until the date on which they would otherwise be redeemed or
cancelled in accordance with the Conditions.
(c) The Note Trustee 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 Transaction Documents to
which it is a party, which may be necessary or desirable to permit and
give effect to the exercise of the Purchase Option and the transfer of
the Called Notes to the Master Issuer, including any waiver of convents
of the Master Issuer and any suspension or termination of the rights of
the holders of the Called Notes from (and including) the interest payment
date specified for the exercise of the Purchase Option, for as long as
the Called Notes have been transferred to the Master Issuer, other than
the right to receive the price payable for such transfer.
(d) Each holder of Called Notes shall be deemed to have authorised and
instructed DTC, Euroclear, or, as the case may be Clearstream, Luxembourg
to effect the transfer of its Called Notes on the relevant Interest
Payment Date to the Master Issuer, in accordance with the rules for the
time being of DTC, Euroclear, or, as the case may be, Clearstream,
Luxembourg.
(e) For the avoidance of doubt, the exercise of the Purchase Option or the
Redemption Option will be subject always to compliance with the
applicable laws and rules of the relevant time.
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5.7 REDEMPTION AMOUNTS
For the purposes of this CONDITION 5, REDEMPTION AMOUNT means, in respect
of any Series and Class of Notes, the amount specified in relation to
such Notes in the applicable Final Terms or, if not so specified:
(a) in respect of each Note (other than a Zero Coupon Note), the
Principal Amount Outstanding of such Note or such other amount
specified in the applicable Final Terms; and
(b) in respect of each Zero Coupon Note, an amount (the AMORTISED FACE
AMOUNT) calculated in accordance with the following formula:
Redemption Amount = RP x (1 + AY) y
where:
RP= the Reference Price;
AY= the Accrual Yield expressed as a decimal; and
y= the Day Count Fraction.
If the amount payable in respect of any Zero Coupon Note upon redemption
of such Zero Coupon Note pursuant to CONDITION 5.1, 5.2, 5.4, 5.5 or 5.6
above or upon its becoming due and repayable as provided in CONDITION 9
is improperly withheld or refused, the amount due and repayable in
respect of such Note shall be the amount calculated as provided in
paragraph (b) above as though the reference therein to the date fixed for
the redemption or, as the case may be, the date upon which such Note
becomes due and payable were replaced by reference to the date which is
the earlier of:
(i) the date on which all amounts due in respect of such Note have
been paid; and
(ii) the date on which the full amount of the monies payable in respect
of such Note has been received by the Principal Paying Agent or
the Note Trustee or the Registrar and notice to that effect has
been given to the Noteholders in accordance with CONDITION 14.
DAY COUNT FRACTION means, in respect of the calculation of the Redemption
Amount for a Zero Coupon Note in accordance with this CONDITION 5.7 for
any Zero Coupon Period:
(i) if ACTUAL/ACTUAL is specified for the relevant Series and Class of
Notes in the applicable Final Terms, the actual number of days
from (and including) the first Closing Date of such Series and
Class of Notes to (but excluding) the date fixed for redemption
(the ZERO COUPON PERIOD) or, as the case may be, the date upon
which such Series and Class of Notes becomes due and payable
divided by 365 (or, if any portion of the Zero Coupon Period falls
in one or more leap years, the sum of (A) the actual number of
days in the Zero Coupon Period falling in a leap year divided by
366 and (B) the actual number of days in the Zero Coupon Period
falling in a non-leap year divided by 365); or
(ii) if 30/360 is specified for the relevant Series and Class of Notes
in the applicable Final Terms, the number of days (calculated on
the basis of a 360-day year consisting of 12 months of 30 days
each) during the Zero Coupon Period divided by 360.
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5.8 MANDATORY TRANSFER OF REMARKETABLE NOTES
(i) Each Series and Class of Remarketable Notes shall, subject to
(iii) below, be transferred in accordance with (iii) below on each
relevant Mandatory Transfer Date prior to the occurrence of a
Mandatory Transfer Termination Event (as confirmed by the relevant
Remarketing Agent or the relevant Tender Agent by the provision of
a Conditional Purchaser Confirmation to the Master Issuer and the
Principal Paying Agent) in exchange for payment of the relevant
Mandatory Transfer Price, and the Master Issuer will procure
payment of the relevant Mandatory Transfer Price to the holders of
such Series and Class of Remarketable Notes on the relevant
Mandatory Transfer Date, provided that the Master Issuer shall not
be liable for the failure to make payment of the relevant
Mandatory Transfer Price to the holders of such Series and Class
of Remarketable Notes to the extent that such failure is a result
of the failure of the Remarketing Agent or the Conditional
Purchaser to perform its obligations under the Remarketing
Agreement.
(ii) Subject to (i) above and (iii) below, all the holders' interests
in a Series and Class of Remarketable Notes shall be transferred
on the relevant Mandatory Transfer Date to the account of the
relevant Remarketing Agent on behalf of the relevant purchasers or
as otherwise notified by or on behalf of the relevant Remarketing
Agent prior to such date or, if Definitive Notes have been issued
with respect to such Series and Class of Remarketable Notes, such
Series and Class of Remarketable Notes will be registered in the
name of the relevant Remarketing Agent or as otherwise notified by
or on behalf of the relevant Remarketing Agent by the Registrar
and the Register will be amended accordingly with affect from the
relevant Mandatory Transfer Date.
(iii) Any holder of a Series and Class of Remarketable Notes may
exercise his rights to retain such Series and Class of
Remarketable Notes through the facilities of DTC at any time prior
to the commencement of the relevant Remarketing Period that ends
immediately before the relevant Mandatory Transfer Date.
6. PAYMENTS
6.1 PAYMENT OF INTEREST AND PRINCIPAL
Payments of principal shall be made by cheque in the Specified Currency,
drawn on a Designated Bank, or upon application by a Holder of the
relevant Note to the Specified Office of the Principal Paying Agent not
later than the fifth Business Day before the Record Date (as defined in
CONDITION 6.7), by transfer to a Designated Account maintained by the
payee with a Designated Bank and (in the case of final redemption) upon
surrender (or, in the case of part payment only, endorsement) of the
relevant Note at the Specified Office of any Paying Agent.
Payments of interest shall be made by cheque in the Specified Currency
drawn on a Designated Bank, or upon application by a Holder of the
relevant Note to the Specified Office of the Principal Paying Agent not
later than the fifth Business Day before the Record Date (as defined in
CONDITION 6.7), by transfer to a Designated Account maintained by the
payee with a Designated Bank and (in the case of interest payable on
final redemption) upon surrender (or, in the case of part payment only,
endorsement) of the relevant Note at the Specified Office of any Paying
Agent.
6.2 LAWS AND REGULATIONS
Payments of principal and interest in respect of the Notes are subject in
all cases to any fiscal or other laws and regulations applicable thereto.
Noteholders will not be charged commissions or expenses on payments.
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6.3 PAYMENT OF INTEREST FOLLOWING A FAILURE TO PAY PRINCIPAL
If payment of principal is improperly withheld or refused on or in
respect of any Note or part thereof, the interest which continues to
accrue in respect of such Note in accordance with CONDITION 4 will be
paid in accordance with this CONDITION 6.
6.4 CHANGE OF AGENTS
The initial Principal Paying Agent, the Registrar, the Transfer Agent and
the initial Paying Agents are listed in these Conditions. The Master
Issuer reserves the right, subject to the prior written approval of the
Note Trustee, at any time to vary or terminate the appointment of the
Principal Paying Agent, the Registrar, the Transfer Agent and the US
Paying Agent and to appoint additional or other Paying Agents. The Master
Issuer will at all times maintain a Paying Agent with a Specified Office
in London and a US Paying Agent with a Specified Office in New York and a
Registrar. Except where otherwise provided in the Master Issuer Trust
Deed, the Master Issuer will cause at least 30 days' notice of any change
in or addition to the Paying Agents, the Transfer Agent or the Registrar
or their Specified Offices to be given in accordance with CONDITION 14
and will notify the Rating Agencies of such change or addition. For as
long as any Note is outstanding, the Master Issuer will endeavour to
maintain a Paying Agent in a member state of the European Union that will
not be obliged to withhold or deduct tax pursuant to European Council
Directive 2003/48/EC or any law implementing or complying with, or
introduced in order to conform to such Directive.
6.5 NO PAYMENT ON NON-BUSINESS DAY
Where payment is to be made by transfer to a Designated Account, payment
instructions (for value the due date or, if the due date is not a
Business Day, for value the next succeeding Business Day) will be
initiated and, where payment is to be made by cheque, the cheque will be
mailed (a) (in the case of payments of principal and interest payable on
redemption) on the later of the due date for payment and the day on which
the relevant Note is surrendered (or, in the case of part payment only,
endorsed) at the Specified Office of a Paying Agent and (b) (in the case
of payments of interest payable other than on redemption) on the due date
for payment. A Holder of a Note shall not be entitled to any interest or
other payment in respect of any delay in payment resulting from (i) the
due date for a payment not being a Business Day or (ii) a cheque mailed
in accordance with this CONDITION 6.5 arriving after the due date for
payment or being lost in the mail.
6.6 PARTIAL PAYMENT
If a Paying Agent makes a partial payment in respect of any Note, the
Master Issuer shall procure and the Registrar will ensure that the amount
and date of such payment are noted on the Register and, in the case of
partial payment upon presentation of a Note, that a statement indicating
the amount and date of such payment is endorsed on the relevant Note.
6.7 RECORD DATE
Each payment in respect of a Note will be made to the persons shown as
the Holder in the Register at the opening of business in the place of the
Registrar's Specified Office on the fifteenth day before the due date for
such payment (the RECORD DATE). Where payment in respect of a Note is to
be made by cheque, the cheque will be mailed to the address shown as the
address of the Holder in the Register at the opening of business on the
relevant Record Date.
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6.8 PAYMENT OF INTEREST
Subject as provided otherwise in these Conditions, if interest is not
paid in respect of a Note of any Class on the date when due and payable
(other than because the due date is not a Business Day) or by reason of
non-compliance with CONDITION 6.1, then such unpaid interest shall itself
bear interest at the Rate of Interest applicable from time to time to
such Note until such interest and interest thereon are available for
payment and notice thereof has been duly given in accordance with
CONDITION 14.
7. PRESCRIPTION
Claims against the Master Issuer for payment of interest and principal on
redemption shall be prescribed and become void if the relevant Notes are
not surrendered for payment within a period of ten years from the
relevant date in respect thereof. After the date on which a payment under
a Note becomes void in its entirety, no claim may be made in respect
thereof. In this CONDITION 7, the RELEVANT DATE, in respect of a payment
under a Note, is the date on which the payment in respect thereof first
becomes due or (if the full amount of the monies payable in respect of
those payments under all the Notes due on or before that date has not
been duly received by the Principal Paying Agent, the US Paying Agent or
the Note Trustee (as the case may be) on or prior to such date) the date
on which the full amount of such monies having been so received, notice
to that effect is duly given to Noteholders in accordance with CONDITION
14.
8. TAXATION
All payments in respect of the Notes will be made without withholding or
deduction for, or on account of, any present or future taxes, duties or
charges of whatsoever nature unless the Master Issuer or any relevant
Paying Agent is required by applicable law to make any payment in respect
of the Notes subject to any such withholding or deduction. In that event,
the Master Issuer or such Paying Agent shall make such payment after such
withholding or deduction has been made and shall account to the relevant
authorities for the amount so required to be withheld or deducted. No
Paying Agent nor the Master Issuer will be obliged to make any additional
payments to Noteholders in respect of such withholding or deduction.
9. EVENTS OF DEFAULT
9.1 CLASS A NOTEHOLDERS
The Note Trustee in its absolute discretion may (and if so requested in
writing by the Holders of not less than 25% in aggregate Principal Amount
Outstanding of the Class A Notes (which for this purpose and the purpose
of any Extraordinary Resolution referred to in this CONDITION 9.1 means
the Class A Notes of all Series constituted by the Master Issuer Trust
Deed) or if so directed by or pursuant to an Extraordinary Resolution
passed at a meeting of the Holders of the Class A Notes shall), subject
in each case to being indemnified and/or secured to its satisfaction,
give notice (a CLASS A NOTE ACCELERATION NOTICE) to the Master Issuer,
the Master Issuer Security Trustee and the Funding 2 Security Trustee of
a Note Event of Default (as defined below) declaring (in writing) the
Class A Notes and all other Notes to be due and repayable (and they shall
forthwith become due and repayable) at any time after the happening of
any of the following events which is continuing or unwaived:
(a) default being made for a period of three Business Days in the
payment of any amount of principal of the Class A Notes of any
Series when and as the same ought to be paid in accordance with
these Conditions or default being made for a period of three
Business Days in the payment of any amount of interest on the
Class A Notes of any Series when and as the same ought to be paid
in accordance with these Conditions; or
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(b) the Master Issuer failing duly to perform or observe any other
obligation binding upon it under the Class A Notes of any Series,
the Master Issuer Trust Deed, the Master Issuer Deed of Charge or
any other Transaction Document and, in any such case (except where
the Note Trustee certifies that, in its sole opinion, such failure
is incapable of remedy, in which case no notice will be required),
such failure is continuing unremedied for a period of 20 days
following the service by the Note Trustee on the Master Issuer of
notice requiring the same to be remedied and the Note Trustee has
certified that the failure to perform or observe is materially
prejudicial to the interests of the Holders of the Class A Notes
of such Series; or
(c) the Master Issuer, otherwise than for the purposes of such
amalgamation or reconstruction as is referred to in SUBPARAGRAPH
(d) below, ceases or threatens to cease to carry on its business
or a substantial part of its business or the Master Issuer is
deemed unable to pay its debts within the meaning of section
123(1)(a), (b), (c) or (d) of the Insolvency Act 1986 (as amended,
modified or re-enacted) or becomes unable to pay its debts as they
fall due or the value of its assets falls to less than the amount
of its liabilities (taking into account for both these purposes
its contingent and prospective liabilities) or otherwise becomes
insolvent; or
(d) an order being made or an effective resolution being passed for
the winding-up of the Master Issuer except a winding-up for the
purposes of or pursuant to an amalgamation, restructuring or
merger the terms of which have previously been approved by the
Note Trustee in writing or by an Extraordinary Resolution of the
Holders of the Class A Notes; or
(e) proceedings being otherwise initiated against the Master Issuer
under any applicable liquidation, insolvency, composition,
reorganisation or other similar laws (including, but not limited
to, presentation of a petition for an administration order, the
filing of documents with the court for an administration or the
service of a notice of intention to appoint an administrator) and
(except in the case of presentation of a petition for an
administration order) such proceedings are not, in the sole
opinion of the Note Trustee, being disputed in good faith with a
reasonable prospect of success, or an administration order being
granted or the appointment of an administrator takes effect or an
administrative receiver or other receiver, liquidator or other
similar official being appointed in relation to the Master Issuer
or in relation to the whole or any substantial part of the
undertaking or assets of the Master Issuer, or an encumbrancer
taking possession of the whole or any substantial part of the
undertaking or assets of the Master Issuer, or a distress,
execution, diligence or other process being levied or enforced
upon or sued out against the whole or any substantial part of the
undertaking or assets of the Master Issuer and such possession or
process (as the case may be) not being discharged or not otherwise
ceasing to apply within 30 days, or the Master Issuer initiating
or consenting to the foregoing proceedings relating to itself
under applicable liquidation, insolvency, composition,
reorganisation or other similar laws or making a conveyance or
assignment for the benefit of its creditors generally or a
composition or similar arrangement with the creditors or takes
steps with a view to obtaining a moratorium in respect of its
indebtedness, including without limitation, the filing of
documents with the court; or
(f) if a Master Intercompany Loan Acceleration Notice is served under
the Master Intercompany Loan Agreement while the Class A Notes of
any Series are outstanding.
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9.2 CLASS B NOTEHOLDERS
This CONDITION 9.2 shall have no effect if, and for as long as, any Class
A Notes of any Series are outstanding. Subject thereto, for so long as
any Class B Notes of any Series are outstanding, the Note Trustee in its
absolute discretion may (and if so requested in writing by the Holders of
not less than 25% in aggregate Principal Amount Outstanding of the Class
B Notes (which for this purpose and the purpose of any Extraordinary
Resolution referred to in this CONDITION 9.2, means the Class B Notes of
all Series constituted by the Master Issuer Trust Deed) or if so directed
by or pursuant to an Extraordinary Resolution passed at a meeting of the
Holders of the Class B Notes shall), subject in each case to it being
indemnified and/or secured to its satisfaction, give notice (a CLASS B
NOTE ACCELERATION NOTICE) to the Master Issuer, the Master Issuer
Security Trustee and the Funding 2 Security Trustee of a Note Event of
Default (as defined below) and declaring (in writing) the Class B Notes
and all other Notes to be due and repayable (and they shall forthwith
become due and repayable) at any time after the happening of any of the
following events:
(a) default being made for a period of three Business Days in the
payment of any amount of principal of the Class B Notes of any
Series when and as the same ought to be paid in accordance with
these Conditions or default being made for a period of three
Business Days in the payment of any amount of interest on the
Class B Notes of any Series when and as the same ought to be paid
in accordance with these Conditions; or
(b) the occurrence of any of the events in CONDITION 9.1(B), (C), (D),
(E) or (F) ABOVE provided that the references in CONDITION 9.1(B),
CONDITION 9.1(D) and CONDITION 9.1(F) to Class A Notes shall be
read as references to Class B Notes.
9.3 CLASS M NOTEHOLDERS
This CONDITION 9.3 shall have no effect if, and for as long as, any Class
A Notes or Class B Notes of any Series are outstanding. Subject thereto,
for so long as any Class M Notes of any Series are outstanding, the Note
Trustee in its absolute discretion may (and if so requested in writing by
the Holders of not less than 25% in aggregate Principal Amount
Outstanding of the Class M Notes (which for this purpose and the purpose
of any Extraordinary Resolution referred to in this CONDITION 9.3, means
the Class M Notes of all Series constituted by the Master Issuer Trust
Deed) or if so directed by or pursuant to an Extraordinary Resolution
passed at a meeting of the Holders of the Class M Notes shall), subject
in each case to it being indemnified and/or secured to its satisfaction,
give notice (a CLASS M NOTE ACCELERATION NOTICE) to the Master Issuer,
the Master Issuer Security Trustee and the Funding 2 Security Trustee of
a Note Event of Default (as defined below) and declaring (in writing) the
Class M Notes and all other Notes to be due and repayable (and they shall
forthwith become due and repayable) at any time after the happening of
any of the following events:
(a) default being made for a period of three Business Days in the
payment of any amount of principal of the Class M Notes of any
Series when and as the same ought to be paid in accordance with
these Conditions or default being made for a period of three
Business Days in the payment of any amount of interest on the
Class M Notes of any Series when and as the same ought to be paid
in accordance with these Conditions; or
(b) the occurrence of any of the events in CONDITION 9.1(B), (C), (D),
(E) or (F) ABOVE provided that the references in CONDITION 9.1(B),
CONDITION 9.1(D) and CONDITION 9.1(F) to Class A Notes shall be
read as references to Class M Notes.
9.4 CLASS C NOTEHOLDERS
This CONDITION 9.4 shall have no effect if, and for as long as, any Class
A Notes, Class B Notes or Class M Notes of any Series are outstanding.
Subject thereto, for so long as any Class C Notes of any Series are
outstanding, the Note Trustee in its absolute discretion may (and if so
requested in writing by the Holders of not less than 25% in aggregate
Principal Amount Outstanding of the Class C Notes (which for this purpose
and the purpose of any Extraordinary Resolution referred to in this
CONDITION 9.4, means the Class C Notes of all Series constituted by the
Master Issuer Trust Deed) or if so directed by or pursuant to an
Extraordinary Resolution passed at a meeting of the Holders of the Class
C Notes shall), subject in each case to it being indemnified and/or
secured to its satisfaction,
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give notice (a CLASS C NOTE ACCELERATION NOTICE) to the Master Issuer,
the Master Issuer Security Trustee and the Funding 2 Security Trustee of
a Note Event of Default (as defined below) and declaring (in writing) the
Class C Notes and all other Notes to be due and repayable (and they shall
forthwith become due and repayable) at any time after the happening of
any of the following events:
(a) default being made for a period of three Business Days in the
payment of any amount of principal of the Class C Notes of any
Series when and as the same ought to be paid in accordance with
these Conditions or default being made for a period of three
Business Days in the payment of any amount of interest on the
Class C Notes of any Series when and as the same ought to be paid
in accordance with these Conditions; or
(b) the occurrence of any of the events in CONDITION 9.1(B), (C), (D),
(E) or (F) ABOVE provided that the references in CONDITION 9.1(B),
CONDITION 9.1(D) and CONDITION 9.1(F) to Class A Notes shall be
read as references to Class C Notes.
9.5 CLASS D NOTEHOLDERS
This CONDITION 9.5 shall have no effect if, and for as long as, any Class
A Notes, Class B Notes, Class M Notes or Class C Notes of any Series are
outstanding. Subject thereto, for so long as any Class D Notes of any
Series are outstanding, the Note Trustee in its absolute discretion may
(and if so requested in writing by the Holders of not less than 25% in
aggregate Principal Amount Outstanding of the Class D Notes (which for
this purpose and the purpose of any Extraordinary Resolution referred to
in this CONDITION 9.5, means the Class D Notes of all Series constituted
by the Master Issuer Trust Deed) or if so directed by or pursuant to an
Extraordinary Resolution passed at a meeting of the Holders of the Class
D Notes shall), subject in each case to it being indemnified and/or
secured to its satisfaction, give notice (a CLASS D NOTE ACCELERATION
NOTICE) to the Master Issuer, the Master Issuer Security Trustee and the
Funding 2 Security Trustee of a Note Event of Default (as defined below)
and declaring (in writing) the Class D Notes to be due and repayable (and
they shall forthwith become due and repayable) at any time after the
happening of any of the following events:
(a) default being made for a period of three Business Days in the
payment of any amount of principal of the Class D Notes of any
Series when and as the same ought to be paid in accordance with
these Conditions or default being made for a period of three
Business Days in the payment of any amount of interest on the
Class D Notes of any Series when and as the same ought to be paid
in accordance with these Conditions; or
(b) the occurrence of any of the events in CONDITION 9.1(B), (C), (D),
(E) or (F) ABOVE provided that the references in CONDITION 9.1(B),
CONDITION 9.1(D) and CONDITION 9.1(F) to Class A Notes shall be
read as references to Class D Notes.
9.6 FOLLOWING SERVICE OF A NOTE ACCELERATION NOTICE
In these Conditions, a NOTE ACCELERATION NOTICE means any of the Class A
Note Acceleration Notice, the Class B Note Acceleration Notice, the Class
M Note Acceleration Notice, the Class C Note Acceleration Notice and the
Class D Note Acceleration Notice. For the avoidance of doubt, upon any
Note Acceleration Notice being given by the Note Trustee in accordance
with CONDITION 9.1, 9.2, 9.3, 9.4 or 9.5 all Notes shall immediately
become due, without further action, notice or formality at their
Principal Amount Outstanding together with accrued interest (or, in the
case of a Zero Coupon Note, at its Redemption Amount, calculated in
accordance with CONDITION 5.7).
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10. ENFORCEMENT OF NOTES
10.1 ENFORCEMENT
The Note Trustee may, at its discretion and without notice at any time
and from time to time, take such steps and institute such proceedings
against the Master Issuer or any other person as it may think fit to
enforce the provisions of the Notes, the Trust Deed (including these
Conditions) or any of the other Transaction Documents to which it is a
party and the Note Trustee may, at its discretion without notice, at any
time after the Master Issuer Security has become enforceable (including
after the service of a Note Acceleration Notice in accordance with
CONDITION 9), instruct the Master Issuer Security Trustee to take such
steps as it may think fit to enforce the Master Issuer Security. The Note
Trustee shall not be bound to take such steps or institute such
proceedings or give such instructions unless:
(a) (subject in all cases to restrictions contained in the Master
Issuer Trust Deed to protect the interests of any higher ranking
Class of Noteholders) it shall have been so directed by an
Extraordinary Resolution of the Class A Noteholders, the Class B
Noteholders, the Class M Noteholders, the Class C Noteholders or
the Class D Noteholders (which for this purpose means the Holders
of all Series of the Class A Notes, the Class B Notes, the Class M
Notes, the Class C Notes or the Class D Notes (as applicable)) or
so requested in writing by the Holders of at least one quarter in
aggregate Principal Amount Outstanding of the Class A Notes, Class
B Notes, Class M Notes, Class C Notes or Class D Notes (as
applicable) of all Series; and
(b) it shall have been indemnified and/or secured to its satisfaction.
The Master Issuer Security Trustee shall not, and shall not be
bound to, take such steps or take any such other action unless it
is so directed by the Note Trustee and indemnified and/or secured
to its satisfaction.
Amounts available for distribution after enforcement of the Master Issuer
Security shall be distributed in accordance with the terms of the Master
Issuer Deed of Charge.
No Noteholder may institute any proceedings against the Master Issuer to
enforce its rights under or in respect of the Notes, the Master Issuer
Trust Deed or the Master Issuer Deed of Charge unless (i) the Note
Trustee or the Master Issuer Security Trustee, as applicable, has become
bound to institute proceedings and has failed to do so within 30 days of
becoming so bound and (ii) such failure is continuing; provided that no
Class B Noteholder, Class M Noteholder, Class C Noteholder or Class D
Noteholder will be entitled to commence proceedings for the winding up or
administration of the Master Issuer unless there are no outstanding Notes
of a Class with higher priority, or if Notes of a Class with higher
priority are outstanding, there is consent of Noteholders of not less
than one quarter of the aggregate principal amount of the Notes
outstanding (as defined in the Master Issuer Trust Deed) of the Class or
Classes of Notes with higher priority or pursuant to an Extraordinary
Resolution of the Holders of such Class of Notes. Notwithstanding the
foregoing and notwithstanding any other provision of the Master Issuer
Trust Deed, the right of any Noteholder to receive payment of principal
and interest on its Notes on or after the due date for such principal or
interest, or to institute suit for the enforcement of payment of that
principal or interest, may not be impaired or affected without the
consent of that Noteholder.
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10.2 POST ENFORCEMENT CALL OPTION
In the event that:
(a) the Master Issuer Security is enforced and the Master Issuer
Security Trustee determines that (i) the proceeds of such
enforcement, after distribution of such proceeds to the persons
entitled thereto ranking in priority to the Notes under the Master
Issuer Deed of Charge and to the Noteholders (to the extent
entitled thereto), are insufficient to pay in full all principal
and interest and other amounts whatsoever due in respect of the
Notes and all other claims ranking pari passu therewith (ii) such
proceeds of enforcement have been so distributed in accordance
with the terms of the Master Issuer Deed of Charge and (iii) there
are no further assets available to pay principal and interest and
other amounts whatsoever due in respect of the Notes; or
(b) within 20 days following the Final Maturity Date of the latest
maturing Note, the Master Issuer Security Trustee certifies that
there is no further amount outstanding under the Master
Intercompany Loan Agreement,
then the Note Trustee is required, at the request of the Post-Enforcement
Call Option Holder, for a nominal amount, to transfer or (as the case may
be) procure transfer of all (but not some only) of the Notes to the
Post-Enforcement Call Option Holder pursuant to the option granted to it
by the Note Trustee (as agent for the Noteholders) under the terms of the
Post Enforcement Call Option Agreement. Immediately upon such transfer,
no such former Noteholder shall have any further interest in the Notes.
Each of the Noteholders acknowledges that the Note Trustee has the
authority and the power to bind the Noteholders in accordance with the
terms and conditions set out in the Master Issuer Post-Enforcement Call
Option Agreement and each Noteholder, by subscribing for or purchasing
Notes, agrees to be so bound. The Note Trustee shall give notice of the
exercise of such option to the Noteholders in accordance with CONDITION
14.
11. MEETINGS OF NOTEHOLDERS, MODIFICATIONS AND WAIVER
11.1 MEETINGS OF NOTEHOLDERS
The Master Issuer Trust Deed contains provisions for convening meetings
of Noteholders of any Series and Class to consider any matter affecting
their interests, including the sanctioning by Extraordinary Resolution of
a modification of any provision of these Conditions or the provisions of
any of the Transaction Documents.
(a) Class A Notes
In respect of the Class A Notes, the Master Issuer Trust Deed
provides that, subject to CONDITION 11.2:
(i) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of one class
only of the Class A Notes shall be deemed to have been duly
passed if passed at a meeting of the Holders of that class
of the Class A Notes;
(ii) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of any two or
more classes of the Class A Notes but does not give rise to
a conflict of interest between the Holders of any such two
or more Classes of Class A Notes, shall be deemed to have
been duly passed if passed at a single meeting of the
Holders of that class of such two or more Classes of Class
A Notes; and
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(iii) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of any two or
more classes of the Class A Notes and gives or may give
rise to a conflict of interest between the Holders of any
such two or more Classes of Class A Notes, shall be deemed
to have been duly passed only if, in lieu of being passed
at a single meeting of the Holders of such two or more
Classes of Class A Notes, it shall be passed at separate
meetings of the Holders of each of such two or more Classes
of Class A Notes.
(b) Class B Notes
In respect of the Class B Notes, the Master Issuer Trust Deed
provides that, subject to CONDITION 11.2:
(i) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of one class
only of the Class B Notes shall be deemed to have been duly
passed if passed at a meeting of the Holders of that class
of the Class B Notes;
(ii) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of any two or
more classes of the Class B Notes but does not give rise to
a conflict of interest between the Holders of any such two
or more Classes of Class B Notes, shall be deemed to have
been duly passed if passed at a single meeting of the
Holders of such two or more Classes of Class B Notes; and
(iii) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of any two or
more classes of the Class B Notes and gives or may give
rise to a conflict of interest between the Holders of any
such two or more Classes of Class B Notes, shall be deemed
to have been duly passed only if, in lieu of being passed
at a single meeting of the Holders of such two or more
Classes of Class B Notes, it shall be passed at separate
meetings of the Holders of each of such two or more Classes
of Class B Notes.
(c) Class M Notes
In respect of the Class M Notes, the Master Issuer Trust Deed
provides that, subject to CONDITION 11.2:
(i) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of one class
only of the Class M Notes shall be deemed to have been duly
passed if passed at a meeting of the Holders of that class
of the Class M Notes;
(ii) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of any two or
more classes of the Class M Notes but does not give rise to
a conflict of interest between the Holders of any such two
or more Classes of Class M Notes, shall be deemed to have
been duly passed if passed at a single meeting of the
Holders of such two or more Classes of Class M Notes; and
(iii) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of any two or
more classes of the Class M Notes and gives or may give
rise to a conflict of interest between the Holders of any
such two or more Classes of Class M Notes, shall be deemed
to have been duly passed only if, in lieu of being passed
at a single meeting of the Holders of such two or more
Classes of Class M Notes, it shall be passed at separate
meetings of the Holders of each of such two or more Classes
of Class M Notes.
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(d) Class C Notes
In respect of the Class C Notes, the Master Issuer Trust Deed
provides that, subject to CONDITION 11.2:
(i) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of one class
only of the Class C Notes shall be deemed to have been duly
passed if passed at a meeting of that class of the Holders
of that class of the Class C Notes;
(ii) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of any two or
more classes of the Class C Notes but does not give rise to
a conflict of interest between the Holders of any such two
or more Classes of Class C Notes, shall be deemed to have
been duly passed if passed at a single meeting of the
Holders of such two or more Classes of Class C Notes; and
(iii) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of any two or
more classes of the Class C Notes and gives or may give
rise to a conflict of interest between the Holders of any
such two or more Classes of Class C Notes, shall be deemed
to have been duly passed only if, in lieu of being passed
at a single meeting of the Holders of such two or more
Classes of Class C Notes, it shall be passed at separate
meetings of the Holders of each of such two or more Classes
of Class C Notes.
(e) Class D Notes
In respect of the Class D Notes, the Master Issuer Trust Deed
provides that, subject to CONDITION 11.2:
(i) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of one class
only of the Class D Notes shall be deemed to have been duly
passed if passed at a meeting of the Holders of that class
of the Class D Notes;
(ii) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of any two or
more classes of the Class D Notes but does not give rise to
a conflict of interest between the Holders of any such two
or more Classes of Class D Notes, shall be deemed to have
been duly passed if passed at a single meeting of the
Holders of such two or more Classes of Class D Notes; and
(iii) a resolution which, in the sole opinion of the Note
Trustee, affects the interests of the Holders of any two or
more classes of the Class D Notes and gives or may give
rise to a conflict of interest between the Holders of any
such two or more Classes of Class D Notes, shall be deemed
to have been duly passed only if, in lieu of being passed
at a single meeting of the Holders of such two or more
Classes of Class D Notes, it shall be passed at separate
meetings of the Holders of each of such two or more Classes
of Class D Notes.
The quorum for any meeting of the Holders of any Series and Class of
Notes or of any Class of Notes of more than one Series convened to
consider a resolution (except for the purpose of passing an Extraordinary
Resolution or a Programme Resolution) will be one or more persons holding
or representing not less than one-twentieth of the aggregate Principal
Amount Outstanding of such Series and Class of Notes or such Class of
Notes of more than one Series or, at any adjourned meeting, one or more
persons being or representing Noteholders of such Series and Class of
Notes or such Class of Notes of more than one Series, whatever the
aggregate Principal Amount Outstanding
32
of the relevant Notes so held or represented. A RESOLUTION means a
resolution (excluding an Extraordinary Resolution or a Programme
Resolution) passed at a meeting of Noteholders duly convened and held in
accordance with the provisions of the Master Issuer Trust Deed by a
simple majority of the persons voting thereat upon a show of hands or if
a poll is duly demanded by a simple majority of the votes cast on such
poll.
Subject as provided in the following paragraph, the quorum at any meeting
of the Holders of any Series and Class of Notes or of any Class of Notes
of more than one Series of Notes convened to consider an Extraordinary
Resolution will be one or more persons holding or representing not less
than 50% of the aggregate Principal Amount Outstanding of such Series and
Class of Notes or such Class of Notes of more than one Series or, at any
adjourned meeting, one or more persons being or representing Noteholders
of such Series and Class of Notes or such Class of Notes of more than one
Series of Notes, whatever the aggregate Principal Amount Outstanding of
the relevant Notes so held or represented.
The quorum at any meeting of Noteholders for passing an Extraordinary
Resolution which includes the sanctioning of a modification which would
have the effect of altering the amount or timing of payments of principal
on the Notes of such Series and Class or of such Class or the rate, the
day or the timing of payments of interest thereon or of the currency of
payment of the Notes of such Series and Class or of such Class or
altering the priority of payments to the extent it affects such Series
and Class or of such Class or altering the quorum or majority required in
relation to any resolution (each a BASIC TERMS MODIFICATION, as more
fully defined in the Master Issuer Trust Deed) shall be one or more
persons holding or representing not less than 75% of the aggregate
Principal Amount Outstanding of the Notes of the relevant Series and
Class or of the Class of Notes of more than one Series of Notes or, at
any adjourned and reconvened meeting, not less than 25% of the aggregate
Principal Amount Outstanding of the Notes of the relevant Series and
Class or of the Class of Notes of more than one Series of Notes.
An Extraordinary Resolution passed at any meeting of Noteholders shall be
binding on all of the Noteholders of the relevant Series and Class or of
the Class of Notes of more than one Series of Notes whether or not they
are present or represented at the meeting.
In connection with any meeting of Noteholders where the relevant Notes
(or any of them) are not denominated in Sterling, the Principal Amount
Outstanding of any Note not denominated in Sterling shall be converted
into Sterling at the relevant Specified Currency Exchange Rate.
A resolution signed by or on behalf of all the Noteholders of the
relevant Series and Class or of the relevant Class of more than one
Series of Notes who for the time being are entitled to receive notice of
a meeting under the Master Issuer Trust Deed shall for all purposes be as
valid and effective as an Extraordinary Resolution passed at a meeting of
Holders of such Series and Class or of the relevant Class of more than
one Series of Notes.
11.2 PROGRAMME RESOLUTION
Notwithstanding the provisions of CONDITION 11.1, any Extraordinary
Resolution of the Noteholders of any Class to direct the Note Trustee to
give a Note Acceleration Notice pursuant to CONDITION 9 or take any
enforcement action or instruct the Master Issuer Security Trustee to
enforce the Master Issuer Security pursuant to CONDITION 10 (a PROGRAMME
RESOLUTION) shall only be capable of being passed at a single meeting of
the Noteholders of all Series of such Class of Notes. The quorum at any
such meeting for passing a Programme Resolution shall be one or more
persons holding or representing not less than 50% of the aggregate
Principal Amount Outstanding of the Notes of such Class or, at any
adjourned and reconvened meeting, one or more persons being or
representing Noteholders of such Class of Notes, whatever the aggregate
Principal Amount Outstanding of such Class of Notes so held or
represented by them.
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A Programme Resolution passed at any meeting of all Series of any Class
of Notes shall be binding on all Noteholders of all Series of that Class
of Notes, whether or not they are present or represented at the meeting.
11.3 LIMITATIONS ON NOTEHOLDERS
Subject as provided in CONDITION 11.4:
(a) an Extraordinary Resolution of the Class A Noteholders of any
Series shall be binding on all Class B Noteholders, all Class M
Noteholders, all Class C Noteholders and all Class D Noteholders
in each case, of that Series or of any other Series;
(b) no Extraordinary Resolution of the Class B Noteholders of any
Series shall take effect for any purpose while any Class A Notes
of that Series or of any other Series remain outstanding unless it
shall have been sanctioned by an Extraordinary Resolution of the
Class A Noteholders of each Series or the Note Trustee is of the
opinion that it would not be materially prejudicial to the
interests of the Class A Noteholders of any Series as applicable
and subject hereto and to CONDITION 11.4, an Extraordinary
Resolution of the Class B Noteholders of any Series will be
binding on the Class M Noteholders, the Class C Noteholders and
the Class D Noteholders in each case, of that or any other Series
irrespective of the effect upon them;
(c) no Extraordinary Resolution of the Class M Noteholders of any
Series shall take effect for any purpose while any Class A Notes
or Class B Notes in each case, of that Series or of any other
Series remain outstanding unless it shall have been sanctioned by
an Extraordinary Resolution of the Class A Noteholders and an
Extraordinary Resolution of the Class B Noteholders, in each case
of each Series or the Note Trustee is of the opinion that it would
not be materially prejudicial to the respective interests of the
Class A Noteholders and/or the Class B Noteholders of any Series
(as applicable) and subject hereto and to CONDITION 11.4, an
Extraordinary Resolution of the Class M Noteholders of any Series
will be binding on the Class C Noteholders and the Class D
Noteholders in each case, of that or of any other Series
irrespective of the effect upon them;
(d) no Extraordinary Resolution of the Class C Noteholders of any
Series shall take effect for any purpose while any Class A Notes,
Class B Notes or Class M Notes in each case, of that Series or of
any other Series remain outstanding unless it shall have been
sanctioned by an Extraordinary Resolution of the Class A
Noteholders, an Extraordinary Resolution of the Class B
Noteholders and an Extraordinary Resolution of the Class M
Noteholders, in each case of each Series or the Note Trustee is of
the opinion that it would not be materially prejudicial to the
respective interests of the Class A Noteholders, the Class B
Noteholders and/or the Class M Noteholders of any Series (as
applicable) and subject hereto and to CONDITION 11.4, an
Extraordinary Resolution of the Class C Noteholders of any Series
will be binding on the Class D Noteholders of that or any other
Series irrespective of the effect upon them; and
(e) no Extraordinary Resolution of Class D Noteholders of any Series
shall take effect for any purpose while any Class A Notes, Class B
Notes, Class M Notes or Class C Notes in each case, of that Series
or of any other Series remain outstanding unless it shall have
been sanctioned by an Extraordinary Resolution of the Class A
Noteholders, an Extraordinary Resolution of the Class B
Noteholders, an Extraordinary Resolution of the Class M
Noteholders and an Extraordinary Resolution of the Class C
Noteholders, in each case of each Series or the Note Trustee is of
the opinion that it would not be materially prejudicial to the
respective interests of the Class A Noteholders, the Class B
Noteholders, the Class M Noteholders and/or the Class C
Noteholders of any Series (as applicable).
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11.4 APPROVAL OF MODIFICATIONS AND WAIVERS BY NOTEHOLDERS
No Extraordinary Resolution of the Noteholders of any one or more Series
of Class A Notes to sanction a modification of, or any waiver or
authorisation of any breach or proposed breach of, any of the provisions
of the Transaction Documents or the Conditions of the Notes shall take
effect unless it has been sanctioned by an Extraordinary Resolution of
the Class B Noteholders, an Extraordinary Resolution of the Class M
Noteholders, an Extraordinary Resolution of the Class C Noteholders and
an Extraordinary Resolution of the Class D Noteholders, in each case of
each Series, or the Note Trustee is of the opinion that it would not be
materially prejudicial to the respective interests of the Class B
Noteholders, the Class M Noteholders, the Class C Noteholders and the
Class D Noteholders of any Series.
No Extraordinary Resolution of the Noteholders of any one or more Series
of Class B Notes to sanction a modification of, or any waiver or
authorisation of any breach or proposed breach of, any of the provisions
of the Transaction Documents or the Conditions of the Notes shall take
effect unless it has been sanctioned by an Extraordinary Resolution of
the Class M Noteholders, an Extraordinary Resolution of the Class C
Noteholders and an Extraordinary Resolution of the Class D Noteholders,
in each case of each Series, or the Note Trustee is of the opinion that
it would not be materially prejudicial to the respective interests of the
Class M Noteholders, the Class C Noteholders and the Class D Noteholders
of any Series.
No Extraordinary Resolution of the Noteholders of any one or more Series
of Class M Notes to sanction a modification of, or any waiver or
authorisation of any breach or proposed breach of, any of the provisions
of the Transaction Documents or the Conditions of the Notes shall take
effect unless it has been sanctioned by an Extraordinary Resolution of
the Class C Noteholders and an Extraordinary Resolution of the Class D
Noteholders, in each case of each Series, or the Note Trustee is of the
opinion that it would not be materially prejudicial to the respective
interests of the Class C Noteholders and the Class D Noteholders of any
Series.
No Extraordinary Resolution of the Noteholders of any one or more Series
of Class C Notes to sanction a modification of, or any waiver or
authorisation of any breach or proposed breach of, any of the provisions
of the Transaction Documents or the Conditions of the Notes shall take
effect unless it has been sanctioned by an Extraordinary Resolution of
the Class D Noteholders of each Series, or the Note Trustee is of the
opinion that it would not be materially prejudicial to the interests of
the Class D Noteholders of any Series.
11.5 MODIFICATIONS AND DETERMINATIONS BY NOTE TRUSTEE
The Note Trustee, may, without the consent of the Noteholders:
(a) agree to any modification (other than a Basic Terms Modification)
of, or to the waiver or authorisation of any breach or proposed
breach of, the Conditions of any Series and Class of Notes or any
of the Transaction Documents which is not, in the opinion of the
Note Trustee, materially prejudicial to the interests of the
Noteholders of any Series and Class of Notes; or
(b) determine that any Note Event of Default shall not be treated as
such provided that it is not in the opinion of the Note Trustee
materially prejudicial to the interests of the Holders of the most
senior Class of Notes then outstanding; or
(c) agree to any modification (including a Basic Terms Modification)
of these Conditions or any of the Transaction Documents which, in
the sole opinion of the Note Trustee, is of a formal, minor or
technical nature or is to correct a manifest error or an error
established as such to the satisfaction of the Note Trustee or is
to comply with the mandatory provisions of law; or
35
(d) agree to any modification of any of these Conditions or any
Transaction Documents as expressly provided for in the Transaction
Documents.
For the avoidance of doubt, the Note Trustee shall be entitled to assume,
without further investigation or inquiry, that such modification, waiver
or authorisation, will not be materially prejudicial to the interests of
the Noteholders if each of the Rating Agencies rating the relevant Series
and Class of Notes has confirmed in writing that the then current ratings
of the applicable Series and Class of Notes would not be reduced,
withdrawn or qualified by such modification, waiver or authorisation. Any
such modification, waiver, authorisation or determination shall be
binding on the Noteholders and, unless the Note Trustee, agrees
otherwise, any such modification shall be notified to the Noteholders and
the Rating Agencies in accordance with CONDITION 14 as soon as
practicable thereafter.
11.6 REDENOMINATION
The Note Trustee may agree, without the consent of the Holders of the
Sterling Notes on or after the Specified Date (as defined below), to such
modifications to the Sterling Notes and the Master Issuer Trust Deed in
respect of redenomination of such Notes in euro and associated
reconventioning, renominalisation and related matters in respect of such
Notes as may be proposed by the Master Issuer (and confirmed by an
independent financial institution approved by the Note Trustee to be in
conformity with then applicable market conventions) and to provide for
redemption at the euro equivalent of the sterling principal amount of the
Sterling Notes. For these purposes, SPECIFIED DATE means the date on
which the United Kingdom participates in the third stage of European
economic and monetary union pursuant to the Treaty establishing the
European Community, as amended by the Treaty on European Union, or
otherwise participates in European economic and monetary union in a
manner with an effect similar to such third stage.
Any such modification shall be binding on the Holders of the Sterling
Notes and, unless the Note Trustee agrees otherwise, any such
modification shall be notified to such Noteholders in accordance with
CONDITION 14 as soon as practicable thereafter.
11.7 EXERCISE OF NOTE TRUSTEE'S FUNCTIONS
Where the Note Trustee is required, in connection with the exercise of
its powers, trusts, authorities, duties and discretions under these
Conditions or any Transaction Document, to have regard to the interests
of the Noteholders of any Class, it shall have regard to the interests of
such Noteholders as a class and, in particular but without prejudice to
the generality of the foregoing, the Note Trustee shall not have regard
to, or be in any way liable for, the consequences of such exercise for
individual Noteholders resulting from their being for any purpose
domiciled or resident in, or otherwise connected with, or subject to the
jurisdiction of, any particular territory. In connection with any such
exercise, the Note Trustee shall not be entitled to require, and no
Noteholder shall be entitled to claim, from the Master Issuer or any
other person, any indemnification or payment in respect of any tax
consequence of any such exercise upon individual Noteholders.
12. INDEMNIFICATION OF THE NOTE TRUSTEE AND THE MASTER ISSUER SECURITY
TRUSTEE
The Master Issuer Trust Deed and the Master Issuer Deed of Charge set out
certain provisions for the benefit of the Note Trustee and the Master
Issuer Security Trustee. The following is a summary of such provisions
and is subject to the more detailed provisions of the Master Issuer Trust
Deed and the Master Issuer Deed of Charge.
The Transaction Documents contain provisions governing the responsibility
(and relief from responsibility) of the Note Trustee and the Master
Issuer Security Trustee and providing for their indemnification in
certain circumstances, including, among others, provisions relieving the
Master
36
Issuer Security Trustee from taking enforcement proceedings or enforcing
the Master Issuer Security unless indemnified to its satisfaction. The
Note Trustee and the Master Issuer Security Trustee are also entitled to
be paid their costs and expenses in priority to any interest payments to
Noteholders.
The Note Trustee and the Master Issuer Security Trustee and their related
companies are entitled to enter into business transactions with the
Master Issuer, Bank of Scotland, the Master Issuer Cash Manager and/or
the related companies of any of them and to act as note trustee or
security trustee for the holders of any new notes and/or any other person
who is a party to any Transaction Document or whose obligations are
comprised in the Master Issuer Security and/or any of its subsidiary or
associated companies without accounting for any profit resulting
therefrom.
Neither the Note Trustee nor the Master Issuer Security Trustee will be
responsible for any loss, expense or liability which may be suffered as a
result of any assets comprised in the Master Issuer Security, or any
deeds or documents of title thereto, being uninsured or inadequately
insured or being held by clearing organisations or their operators or by
intermediaries such as banks, brokers or other similar persons on behalf
of the Note Trustee or the Master Issuer Security Trustee, as applicable.
Furthermore, the Note Trustee and the Master Issuer Security Trustee will
be relieved of liability for making searches or other inquiries in
relation to the assets comprising the Master Issuer Security. The Note
Trustee and the Master Issuer Security Trustee do not have any
responsibility in relation to the legality and the enforceability of the
trust arrangements and the related Master Issuer Security. Neither the
Note Trustee nor the Master Issuer Security Trustee will be obliged to
take any action that might result in its incurring personal liabilities.
Neither the Note Trustee nor the Master Issuer Security Trustee is
obliged to monitor or investigate the performance of any other person
under the Transaction Documents and is entitled to assume, until it has
actual knowledge to the contrary, that all such persons are properly
performing their duties, unless it receives express notice to the
contrary.
Neither the Note Trustee nor the Master Issuer Security Trustee will be
responsible for any deficiency that may arise because it is liable to tax
in respect of the proceeds of any Master Issuer Security.
13. REPLACEMENT OF NOTES
If Definitive Notes are lost, stolen, mutilated, defaced or destroyed,
the Noteholder can replace them at the Specified Office of any Paying
Agent subject to all applicable laws and stock exchange requirements. The
Noteholder will be required both to pay the expenses of producing a
replacement and to comply with the Master Issuer's, the Registrar's and
the Paying Agent's reasonable requests for evidence and indemnity.
If a Global Note is lost, stolen, mutilated, defaced or destroyed, the
Master Issuer will deliver a replacement Global Note to the registered
holder upon receipt of satisfactory evidence and surrender of any defaced
or mutilated Global Note. A replacement will only be made upon payment of
the expenses for a replacement and compliance with the Master Issuer's,
Registrar's and Paying Agents' reasonable requests as to evidence and
indemnity.
Defaced or mutilated Notes must be surrendered before replacements will
be issued.
37
14. NOTICE TO NOTEHOLDERS
14.1 PUBLICATION OF NOTICE
Any notice to Noteholders shall be validly given if such notice is:
(a) sent to them by first class mail (or its equivalent) or (if posted
to a non-UK address) by airmail at the respective addresses on the
Register; and
(b) published in The Financial Times; and
(c) for so long as amounts are outstanding on the US Notes, in a daily
newspaper of general circulation in New York (which is expected to
be The New York Times);
or, if any of such newspapers set out above shall cease to be published
or timely publication therein shall not be practicable, in a leading
English language daily newspaper having general circulation in the United
Kingdom or the United States (as applicable) provided that if, at any
time, the Master Issuer procures that the information concerned in such
notice shall be published on the Relevant Screen, publication in the
newspapers set out above or such other newspaper or newspapers shall not
be required with respect to such information.
14.2 DATE OF PUBLICATION
Any notices so published shall be deemed to have been given on the fourth
day after the date of posting, or as the case may be, on the date of such
publication or, if published more than once on different dates, on the
first date on which publication shall have been made in the newspaper or
newspapers in which (or on the Relevant Screen on which) publication is
required.
14.3 GLOBAL NOTES
While the Notes are represented by Global Notes, any notice to
Noteholders will be validly given if such notice is provided in
accordance with CONDITION 14.1 or (at the option of the Master Issuer) if
delivered to DTC (in the case of the US Notes) or Euroclear and/or
Clearstream, Luxembourg (in the case of the Reg S Notes) or (if specified
in the applicable Final Terms) if delivered through any ALTERNATIVE
CLEARING SYSTEM specified therein. Any notice delivered to the DTC and/or
Euroclear and/or Clearstream, Luxembourg and/or such Alternative Clearing
System will be deemed to be given on the day of such delivery.
14.4 NOTE TRUSTEE'S DISCRETION TO SELECT ALTERNATIVE METHOD
The Note Trustee shall be at liberty to sanction some other method of
giving notice to the Noteholders or any Series or Class or category of
them having regard to market practice then prevailing and to the
requirements of the stock exchanges on which the Notes are then admitted
for trading and provided that notice of such other method is given to the
Noteholders in such manner as the Note Trustee shall require.
15. NOTE ISSUES
The Master Issuer shall be at liberty from time to time, without the
consent of the Noteholders, to create and issue Notes, upon satisfaction
of the following conditions:
(a) the Master Issuer obtaining a written confirmation from each of
the Rating Agencies that the then current ratings of the
outstanding Funding 1 Notes and the outstanding Notes will not be
withdrawn, qualified or reduced because of the new issue;
38
(b) the Master Issuer providing written certification to the Funding 2
Security Trustee and the Master Issuer Security Trustee that no
Master Intercompany Loan Event of Default has occurred which has
not been remedied or waived and no Master Intercompany Loan Event
of Default will occur as a result of the issue of the new Notes;
and
(c) the Master Issuer providing written certification to the Funding 2
Security Trustee and the Master Issuer Security Trustee:
(i) that no principal deficiency is recorded on the Funding 2
Principal Deficiency Ledger in relation to the Loan
Tranches outstanding at that time; or
(ii) where a Principal Deficiency is recorded on the Funding 2
Principal Deficiency Ledger at that time, that there will
be sufficient Funding 2 Available Revenue Receipts on the
forthcoming Funding 2 Interest Payment Date, when applied
in accordance with the Funding 2 Pre-Enforcement Revenue
Priority of Payments, to eliminate such Principal
Deficiency.
16. RATING AGENCIES
If:
(a) a confirmation of rating or other response by a Rating Agency is a
condition to any action or step under any Transaction Document
(other than pursuant to CONDITION 15); and
(b) a written request for such confirmation or response is delivered
to each Rating Agency by the Master Issuer (copied to the Note
Trustee and/or the Master Issuer Security Trustee and/or the
Funding 2 Security Trustee, as applicable) and either one or more
Rating Agency (each a NON-RESPONSIVE RATING AGENCY) indicates that
it does not consider such confirmation or response necessary in
the circumstances; and
(c) at least one Rating Agency gives such a confirmation or response
based on the same facts,
then such condition shall be deemed to be modified with respect to the
facts set out in the request referred to in (b) so that there shall be no
requirement for the confirmation or response from the Non-Responsive
Rating Agency.
The Note Trustee and/or the Master Issuer Security Trustee and/or the
Funding 2 Security Trustee, as applicable, shall be entitled to treat as
conclusive a certificate by any director, officer or employee of the
Master Issuer, Funding 2, the Seller, any investment bank or financial
adviser acting in relation to the Notes as to any matter referred to in
(b) in the absence of manifest error or the Note Trustee and/or the
Master Issuer Security Trustee and/or the Funding 2 Security Trustee, as
applicable, having facts contradicting such certificates specifically
drawn to his attention and the Note Trustee and/or the Master Issuer
Security Trustee and/or the Funding 2 Security Trustee, as applicable,
shall not be responsible for any loss, liability, costs, damages,
expenses or inconvenience that may be caused as a result.
17. GOVERNING LAW AND JURISDICTION
The Transaction Documents and the Notes are governed by English law
unless specifically stated to the contrary. Certain provisions in the
Transaction Documents relating to property situated in Scotland are
governed by Scots law. Unless specifically stated to the contrary:
(a) the courts of England are to have non-exclusive jurisdiction to
settle any disputes which may arise out of or in connection with
the Notes and the Transaction Documents; and
39
(b) the Master Issuer and the other parties to the Transaction
Documents irrevocably submit to the non-exclusive jurisdiction of
the courts of England.
18. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person shall have any right to enforce any term or condition of the
Notes under the Contracts (Rights of Third Parties) Act 1999, but this
shall not affect any right or remedy of a third party which exists or is
available apart from that Act.
19. DEFINITIONS
Unless otherwise defined in these Conditions or unless the context
otherwise requires, in these Conditions the following words shall have
the following meanings and any other capitalised terms used in these
Conditions shall have the meanings ascribed to them or incorporated in
the Master Issuer Trust Deed or the Master Definitions Schedule. The
provisions of Clause 2 (Interpretation and Construction) of the Master
Definitions Schedule are incorporated into and shall apply to these
Conditions.
A LOAN TRANCHES means the Loan Tranches made by the Master Issuer to
Funding 2 under the Master Intercompany Loan Agreement from the proceeds
of issue of the Class M Notes of any Series;
AA LOAN TRANCHES means the Loan Tranches made by the Master Issuer to
Funding 2 under the Master Intercompany Loan Agreement from the proceeds
of issue of the Class B Notes of any Series;
AAA LOAN TRANCHES means the Loan Tranches made by the Master Issuer to
Funding 2 under the Master Intercompany Loan Agreement from the proceeds
of issue of the Class A Notes of any Series;
ACCRUAL YIELD means, in respect of any Series and Class of Notes, the
yield specified as such for such Notes in the applicable Final Terms;
ADDITIONAL BUSINESS CENTRE means, in respect of any Series and Class of
Notes, each place specified as such for such Notes in the applicable
Final Terms;
AGENTS means the Paying Agents, the Transfer Agent, the Registrar and the
Agent Bank;
AGENT BANK means Citibank, N.A. in its capacity as agent bank at its
Specified Office or such other person for the time being acting as agent
bank under the Master Issuer Paying Agent and Agent Bank Agreement;
BASE PROSPECTUS means the base prospectus of the Master Issuer from time
to time, the first being the base prospectus dated 11 October 2006;
BB LOAN TRANCHE means the Loan Tranches made by the Master Issuer to
Funding 2 under the Master Intercompany Loan Agreement from the proceeds
of issue of the Class D Notes of any Series;
BBB LOAN TRANCHES means the Loan Tranches made by the Master Issuer to
Funding 2 under the Master Intercompany Loan Agreement from the proceeds
of issue of the Class C Notes of any Series;
40
BROKEN AMOUNT means, in respect of any Series and Class of Notes, the
amount specified as such (if any) for such Notes in the applicable Final
Terms;
CALL OPTION DATE means, in respect of any Series and Class of Notes, the
date specified as such in the applicable Final Terms, being the Interest
Payment Date on which the Master Issuer is entitled to redeem such Series
and Class of Notes pursuant to CONDITION 5.4(a).
CLASS or CLASS means, in relation to the Class A Notes, the Class B
Notes, the Class M Notes, the Class C Notes and the Class D Notes and the
holders thereof, each single class thereof as the context requires and
except where otherwise specified, and the respective holders thereof;
CLASS A NOTEHOLDERS means the Holders of the Class A Notes;
CLASS A NOTES means Notes of any Series designated as such (or a
sub-class of such) in the applicable Final Terms;
CLASS B NOTEHOLDERS means the Holders of the Class B Notes;
CLASS B NOTES means Notes of any Series designated as such (or a
sub-class of such) in the applicable Final Terms;
CLASS C NOTEHOLDERS means the Holders of the Class C Notes;
CLASS C NOTES means Notes of any Series designated as such (or a
sub-class of such) in the applicable Final Terms;
CLASS D NOTEHOLDERS means the Holders of the Class D Notes;
CLASS D NOTES means Notes of any Series designated as such (or a
sub-class of such) in the applicable Final Terms;
CLASS M NOTEHOLDERS means the Holders of the Class M Notes;
CLASS M NOTES means Notes of any Series designated as such (or a
sub-class of such) in the applicable Final Terms;
CLEARSTREAM, LUXEMBOURG means Clearstream Banking, societe anonyme;
CLOSING DATE has the meaning given to it in the relevant Final Terms;
CONDITIONAL PURCHASER means, in respect of any Series and Class of
Remarketable Notes, the person specified as such for such Series and
Class of Remarketable Notes in the applicable Final Terms;
CONDITIONAL PURCHASER CONFIRMATION means, in respect of any Series and
Class of Remarketable Notes, the confirmation given by the Remarketing
Agent or the Tender Agent to the Master Issuer and the Principal Paying
Agent that the Conditional Purchaser has purchased an interest in or has
had transferred to it or on its behalf an interest in all such Series and
Class of Remarketable Notes;
DEFINITIVE NOTES means the note certificates representing the Notes while
in definitive form;
DESIGNATED ACCOUNT means the account (which, in the case of a payment in
Japanese Yen to a nonresident of Japan, shall be a non-resident account)
maintained by a Holder with a Designated Bank and identified as such in
the Register;
41
DESIGNATED BANK means (in the case of payment in a Specified Currency
other than euro) a bank in the principal financial centre of the country
of such Specified Currency (which, if the Specified Currency is
Australian dollars or New Zealand dollars, shall be Sydney and Auckland,
respectively) and (in the case of a payment in euro) any bank which
processes payments in euro;
DETERMINATION DATE means, in respect of any Series and Class of Notes,
the date(s) specified as such (if any) for such Notes in the applicable
Final Terms;
DETERMINATION PERIOD as defined in CONDITION 4.1;
DOLLARS, US$, US DOLLARS or $ means the lawful currency for the time
being of the United States of America;
EURIBOR means the Euro-zone inter-bank offered rate;
EURO, EURO or (EURO) means the currency of the member states of the
European Union that adopt the single currency in accordance with the
Treaty of Rome of 25 March 1957, establishing the European Community, as
amended from time to time;
EUROCLEAR means Euroclear Bank S.A./N.V., as operator of the Euroclear
System;
EXTRAORDINARY RESOLUTION means a resolution passed at a meeting of the
Noteholders of a particular Class, Series or Series and Class duly
convened and held in accordance with the provisions of the Master Issuer
Trust Deed by a majority consisting of not less than three-fourths of the
persons voting thereat upon a show of hands or if a poll is duly demanded
by a majority consisting of not less than three-fourths of the votes cast
on such poll;
FINAL MATURITY DATE means, in respect of any Series and Class of Notes,
the date specified as such for such Notes in the applicable Final Terms;
FINAL TERMS means, in relation to any Series of Notes, the final terms
issued in relation to such Series of Notes as a supplement to these
Conditions and giving details of, inter alia, the amount and price of
such Series of Notes and which forms a part of the Base Prospectus in
relation to such Series of Notes;
FIXED COUPON AMOUNT means, in respect of any Series and Class of Notes,
the amount specified as such (if any) for such Notes in the applicable
Final Terms;
FUNDING 2 means Permanent Funding (No.2) Limited;
FUNDING 2 DEED OF CHARGE means the deed of charge entered into on the
Programme Date, as amended and restated from time to time, between, among
others, Funding 2, the Funding 2 Security Trustee, the Master Issuer and
the Note Trustee and each deed of accession or supplement entered into in
connection therewith;
FUNDING 2 SECURITY TRUSTEE means The Bank of New York and its successors
or any other security trustee under the Funding 2 Deed of Charge;
GLOBAL NOTES means the US Global Notes and the Reg S Global Notes;
HOLDER has the meaning indicated in CONDITION 1.2;
42
INTEREST COMMENCEMENT DATE means, in respect of any Series and Class of
Notes, the Closing Date of such Notes or such other date as may be
specified as such for such Notes in the applicable Final Terms;
INTEREST PAYMENT DATE means, in respect of a Series and Class of Notes
(other than Money Market Notes), the Quarterly Interest Payment Dates and
(in the case of Money Market Notes) the Monthly Interest Payment Dates,
subject, in each case, to the terms and conditions of the Notes;
ISDA DEFINITIONS means the 2000 ISDA Definitions, as published by the
International Swaps and Derivatives Association, Inc. and as amended and
updated as at the Closing Date of the first Series of Notes;
LIBOR means the London inter-bank offered rate;
LISTED NOTES means each Series and Class of Notes which is admitted to
the official list maintained by the UK Listing Authority and admitted to
trading on the London Stock Exchange's Gilt Edged and Fixed Interest
Market;
LOAN TRANCHES means the AAA Loan Tranches, the AA Loan Tranches, the A
Loan Tranches, the BBB Loan Tranches and the BB Loan Tranches, being the
advances made by the Master Issuer to Funding 2, pursuant to the Master
Intercompany Loan Agreement, each being funded from proceeds received by
the Master Issuer from the issue of a Series and Class of Notes;
LONDON STOCK EXCHANGE means London Stock Exchange plc;
MANDATORY TRANSFER DATE means, in respect of any Series and Class of
Remarketable Notes, the Interest Payment Date specified as such for such
Series and Class of Remarketable Notes in the applicable Final Terms;
MANDATORY TRANSFER PRICE means, in respect of any Series and Class of
Remarketable Notes, the Principal Amount Outstanding of such Series and
Class of Remarketable Notes on the relevant Mandatory Transfer Date
following the application of Note Principal Payments on such date;
MANDATORY TRANSFER TERMINATION EVENT shall occur, in respect of any
Series and Class of Remarketable Notes, if the Conditional Purchaser has
purchased an interest in all such Series and Class of Remarketable Notes;
MARGIN means, in respect of any Series and Class of Notes, the amount
specified as such for such Series and Class of Notes in the applicable
Final Terms;
MASTER DEFINITIONS SCHEDULE means the master definitions schedule dated
the Programme Date setting out, among other things, definitions which
apply to certain Transaction Documents, as amended and restated from time
to time;
MASTER INTERCOMPANY LOAN means, at any time, the aggregate of all Loan
Tranches advanced under the Master Intercompany Loan Agreement;
MASTER INTERCOMPANY LOAN AGREEMENT means the loan agreement entered into
the Programme Date between, among others, Funding 2, the Master Issuer
and the Funding 2 Security Trustee, as amended and restated from time to
time;
MASTER ISSUER means Permanent Master Issuer plc;
43
MASTER ISSUER ACCOUNT BANK means Bank of Scotland or such other person
for the time being acting as account bank to the Master Issuer under the
Master Issuer Bank Account Agreement;
MASTER ISSUER BANK ACCOUNTS means the Master Issuer Transaction Account
and any other account opened and maintained by the Master Issuer with the
Master Issuer Account Bank pursuant to the Transaction Documents;
MASTER ISSUER BANK ACCOUNT AGREEMENT means the bank account agreement
entered into on the Programme Date between the Master Issuer, the Master
Issuer Cash Manager, the Master Issuer Account Bank and the Master Issuer
Security Trustee, as amended and restated from time to time;
MASTER ISSUER CASH MANAGEMENT AGREEMENT means the cash management
agreement dated the Programme Date between, amongst others, the Master
Issuer Cash Manager, the Master Issuer and the Master Issuer Security
Trustee, as amended and restated from time to time;
MASTER ISSUER CASH MANAGER means Bank of Scotland plc or such other
person or persons for the time being acting, under the Master Issuer Cash
Management Agreement, as agent, inter alia, for the Master Issuer;
MASTER ISSUER DEED OF CHARGE means the deed of charge entered into on the
Programme Date, as amended and restated from time to time, between, among
others, the Master Issuer and the Master Issuer Security Trustee and each
deed of accession or supplement entered into in connection therewith;
MASTER ISSUER PAYING AGENT AND AGENT BANK AGREEMENT means the master
issuer paying agent and agent bank agreement entered into on the
Programme Date between, among others, the Master Issuer, the Paying
Agents, the Transfer Agent, the Registrar, the Agent Bank and the Master
Issuer Security Trustee;
MASTER ISSUER POST-ENFORCEMENT CALL OPTION AGREEMENT means the master
issuer post-enforcement call option agreement entered into on the
Programme Date between the Master Issuer, the Post-Enforcement Call
Option Holder and the Note Trustee;
MASTER ISSUER PRIORITY OF PAYMENTS means the master issuer
pre-enforcement revenue priority of payments, the master issuer
pre-enforcement principal priority of payments or the master issuer
post-enforcement priority of payments, as the case may be, each as set
out in the Master Issuer Cash Management Agreement or the Master Issuer
Deed of Charge (as the case may be);
MASTER ISSUER SECURED CREDITORS means the Master Issuer Security Trustee
(and any receiver appointed under the Master Issuer Deed of Charge), the
Note Trustee, the Master Issuer Swap Providers, the Master Issuer
Corporate Services Provider, the Master Issuer Account Bank, the Master
Issuer Cash Manager, the Paying Agents, the Agent Bank, the Transfer
Agent, the Registrar and the Noteholders and any new Master Issuer
Secured Creditor who accedes to the Master Issuer Deed of Charge from
time to time under a deed of accession or a supplemental deed;
MASTER ISSUER SECURITY means the security created by the Master Issuer
pursuant to the Master Issuer Deed of Charge;
MASTER ISSUER SECURITY TRUSTEE means The Bank of New York and its
successors or any other security trustee under the Master Issuer Deed of
Charge;
MASTER ISSUER SWAP AGREEMENTS means the ISDA master agreements, schedules
thereto and confirmations thereunder relating to the currency and/or
interest rate swaps to be entered into on each Closing Date, and any
credit support annexes or other credit support documents entered into at
44
any time, as amended from time to time, among the Master Issuer and the
applicable Master Issuer Swap Provider and/or any credit support provider
and includes any additional and/or replacement Master Issuer Swap
Agreement entered into by the Master Issuer from time to time in
connection with the Notes;
MASTER ISSUER SWAP PROVIDERS means the institutions identified in respect
of each Master Issuer Swap Agreement in the Final Terms related to the
relevant Series and Class of Notes;
MASTER ISSUER TRANSACTION ACCOUNT means the day to day bank account of
the Master Issuer, held with the Master Issuer Account Bank as at the
Programme Date pursuant to the terms of the Master Issuer Bank Account
Agreement;
MASTER ISSUER TRUST DEED means the master issuer trust deed entered into
on the Programme Date as amended and restated from time to time between
the Master Issuer and the Note Trustee, and each supplemental deed
entered into in connection therewith;
MAXIMUM RATE OF INTEREST means, in respect of any Series and Class of
Notes, the rate of interest specified as such for such Notes in the
applicable Final Terms;
MAXIMUM RESET MARGIN means, in respect of any Series and Class of
Remarketable Notes, the amount specified as such for such Series and
Class of Remarketable Notes in the applicable Final Terms;
MINIMUM RATE OF INTEREST means, in respect of any Series and Class of
Notes, the rate of interest specified as such for such Notes in the
applicable Final Terms;
MONEY MARKET NOTES means Notes which will be "Eligible Securities" within
the meaning of Rule 2a-7 under the Investment Company Act;
MONTHLY INTEREST PAYMENT DATES means, in respect of any Money Market
Notes, each monthly date specified in the Final Terms for the payment of
interest and/or principal until the occurrence of a Pass-through Trigger
Event and, following such occurrence, the Quarterly Interest Payment
Dates as specified in the Final Terms for payment of interest and/or
principal subject, in each case, to the appropriate Business Day
Convention, if any, specified in the applicable Final Terms.
NEW BASEL CAPITAL ACCORD means the document "International Convergence of
Capital Measurement and Capital Standards: a Revised Framework" published
in June 2004 by the Basel Committee;
NOTE ACCELERATION NOTICE has the meaning indicated in CONDITION 9.6;
NOTE DETERMINATION DATE means the date two Business Days prior to each
Interest Payment Date;
NOTE EVENT OF DEFAULT means the occurrence of an event of default by the
Master Issuer as specified in CONDITION 9;
NOTE PRINCIPAL PAYMENT has the meaning indicated in CONDITION 5.3;
NOTE TRUSTEE means The Bank of New York and its successors or any further
or other note trustee under the Master Issuer Trust Deed, as trustee for
the Noteholders;
NOTEHOLDERS means the Holders for the time being of the Notes;
45
NOTES means the Class A Notes, the Class B Notes, the Class C Notes, the
Class D Notes and/or the Class M Notes;
PASS-THROUGH TRIGGER EVENT means any of the following events:
(a) a Trigger Event;
(b) the service of a Note Acceleration Notice by the Note Trustee on
the Master Issuer; or
(c) the service of a Master Intercompany Loan Acceleration Notice by
the Funding 2 Security Trustee on Funding 2;
PAYING AGENTS means the Principal Paying Agent and the US Paying Agent,
together with any further or other paying agents for the time being
appointed under the Master Issuer Paying Agent and Agent Bank Agreement;
POST-ENFORCEMENT CALL OPTION HOLDER means Permanent PECOH Limited;
PRINCIPAL AMOUNT OUTSTANDING has the meaning indicated in CONDITION 5.3;
PRINCIPAL PAYING AGENT means Citibank, N.A. in its capacity as principal
paying agent at its Specified Office or such other person for the time
being acting as principal paying agent under the Master Issuer Paying
Agent and Agent Bank Agreement;
PROGRAMME DATE means 17 October 2006;
QUARTERLY INTEREST PAYMENT DATES means, in respect of a Series and Class
of Notes (other than Money Market Notes), each quarterly date specified
in the Final Terms for the payment of interest and/or principal, subject
to the appropriate Business Day Convention, if any, specified in the
applicable Final Terms;
RATE OF INTEREST and RATES OF INTEREST means, in respect of any Series
and Class of Notes, the rate or rates (expressed as a percentage per
annum) of interest payable in respect of such Notes specified in the
applicable Final Terms or calculated and determined in accordance with
the applicable Final Terms;
RATING AGENCIES means Standard & Poor's Rating Services, a division of
The McGraw-Hill Companies Inc., Moody's Investors Service Limited and
Fitch Ratings Ltd.;
REFERENCE PRICE means, in respect of any Series and Class of Notes, the
price specified as such for such Notes in the applicable Final Terms;
REFERENCE RATE means, in respect of any Series and Class of Notes, the
rate specified as such for such Notes in the applicable Final Terms;
REG S means Regulation S under the United States Securities Act of 1933,
as amended;
REG S NOTES means each Series and Class of Notes that are not US Notes;
REG S GLOBAL NOTES means the note certificates representing the Reg S
Notes while in global form;
REGISTER means the register of Noteholders kept by the Registrar and
which records the identity of each Noteholder and the number of Notes
that each Noteholder owns;
46
REGISTRAR means Citibank, N.A. in its capacity as registrar at its
Specified Office or such other person for the time being acting as
registrar under the Master Issuer Paying Agent and Agent Bank Agreement;
RELEVANT SCREEN means a page of the Reuters service or Bloomberg service,
or any other medium for electronic display of data as may be previously
approved in writing by the Note Trustee and has been notified to
Noteholders in the manner set out in CONDITION 14;
RELEVANT SCREEN PAGE means, in respect of any Series and Class of Notes,
the screen page specified as such for such Notes in the applicable Final
Terms (or such replacement page on the relevant service which displays
the information);
REMARKETING AGENT means, in respect of any Series and Class of
Remarketable Notes, the Remarketing Agent specified in the applicable
Final Terms or such other agent appointed to act as remarketing agent
under the terms of the relevant Remarketing Agreement;
REMARKETING AGREEMENT means, in respect of any Series and Class of
Remarketable Notes, the agreement between the Master Issuer and the
Remarketing Agent pursuant to which the Remarketing Agent agrees to use
reasonable efforts to identity third party purchasers for such Series and
Class of Remarketable Notes on each Mandatory Transfer Date prior to the
occurrence of a Mandatory Transfer Termination Event;
REMARKETABLE NOTES means any Series and Class of Notes identified as such
in the applicable Final Terms;
RESET MARGIN means, in respect of any Series and Class of Remarketable
Notes, (i) for each Reset Period, a percentage not exceeding the Maximum
Reset Margin determined by the Remarketing Agent in accordance with the
Remarketing Agreement or (ii) if the Remarketing Agreement has been
terminated, the Maximum Reset Margin;
RESET PERIOD means, in respect of any Series and Class of Remarketable
Notes, the period commencing on the first Mandatory Transfer Date
specified in the applicable Final Terms up to (but excluding) the next
Mandatory Transfer Date and thereafter the period from (and including)
each Mandatory Transfer Date up to (but excluding) the next Mandatory
Transfer Date;
SECURITISATION TAX REGIME means the permanent regime for the taxation of
securitisation companies established pursuant to the Finance Act 2005 and
the regulations made thereunder, in each case as amended from time to
time;
SERIES means, subject to CONDITION 15, in relation to the Notes, all
Notes (of any Class) issued on a given day and designated as such;
SERIES AND CLASS means, a particular Class of Notes of a given Series or,
where such Class of such Series comprises more than one sub-class, SERIES
AND CLASS means any sub-class of such Class;
SPECIFIED CURRENCY means, in respect of any Series and Class of Notes,
the currency or currencies specified as such for such Notes in the
applicable Final Terms;
SPECIFIED CURRENCY EXCHANGE RATE means, in relation to a Series and Class
of Notes, the exchange rate specified in the Master Issuer Swap Agreement
relating to such Series and Class of Notes or, if the Master Issuer Swap
Agreement has been terminated, the applicable spot rate;
SPECIFIED DATE has the meaning indicated in CONDITION 11.6;
47
SPECIFIED DENOMINATION means, in respect of any Series and Class of
Notes, the denomination specified as such for such Notes in the
applicable Final Terms which shall be a minimum of $100,000 (in the case
of Dollar Note), (pound)50,000 (in the case of each Sterling Note) and
(euro)50,000 (in the case of each Euro Note), provided that Notes issued
with a maturity of less than one year will be issued in minimum
denominations of (pound)100,000 (or such equivalent amount) and provided
that no Note shall be issued with a denomination of less than
(euro)50,000 (or its equivalent in the relevant currency at the date of
issue of such Notes);
SPECIFIED OFFICE means, as the context may require, in relation to any of
the Agents, the office specified against the name of such Agent in the
Master Issuer Paying Agent and Agent Bank Agreement or such other
specified office as may be notified to the Master Issuer and the Note
Trustee pursuant to the Paying Agent and Agency Bank Agreement;
STEP-UP DATE means the Interest Payment Date on which the Rates of
Interest on the relevant Series and Class of Notes increases by a
pre-determined amount as specified in the applicable Final Terms;
STERLING, POUNDS STERLING or (POUND) means the lawful currency for the
time being of the United Kingdom of Great Britain and Northern Ireland;
STERLING NOTES means each Series and Class of Notes denominated in
Sterling;
SUB-UNIT means, with respect to any currency other than Sterling, the
lowest amount of such currency that is available as legal tender in the
country of such currency and, with respect to Sterling, one pence;
TRANSACTION DOCUMENTS means the Master Issuer Corporate Services
Agreement, the Master Intercompany Loan Agreement, the Funding 2 Deed of
Charge, the Master Issuer Bank Account Agreement, the Master Issuer Deed
of Charge, the Master Issuer Trust Deed, the Master Issuer Paying Agent
and Agent Bank Agreement, the Master Issuer Cash Management Agreement,
the Master Issuer Post-Enforcement Call Option Agreement, the Master
Issuer Swap Agreements, the Master Issuer Master Definitions Schedule,
the Mortgages Trustee Guaranteed Investment Contract, the Funding 2
Guaranteed Investment Contract and such other related documents which are
referred to in the terms of the above documents;
TRANSFER AGENT means Citibank, N.A. in its capacity as transfer agent at
its Specified Office or such other person for the time being acting as
transfer agent under the Master Issuer Paying Agent and Agent Bank
Agreement;
UK LISTING AUTHORITY means the Financial Services Authority in its
capacity as competent authority for the purposes of Part VI of the
Financial Services and Markets Act 2000, as amended;
US GLOBAL NOTES means the note certificates representing the US Notes
while in global form;
US NOTES means each Series and Class of Notes which is registered with
the United States Securities and Exchange Commission under the United
States Securities Act of 1933, as amended;
US PAYING AGENT means Citibank, N.A., acting in its capacity as US paying
agent through its New York office or such other person for the time being
acting as US paying agent under the Master Issuer Paying Agent and Agent
Bank Agreement.
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