SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions set out in Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in Clause 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 3 contracts

Samples: Mortgage Sale Agreement (Permanent Mortgages Trustee LTD), Mortgage Sale Agreement (Permanent Mortgages Trustee LTD), Mortgage Sale Agreement (Permanent Mortgages Trustee LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. ~~4.1~~ 2.1 Subject to fulfilment of the conditions ~~set out in Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3)~~ and ~~4.4 and the restriction~~ undertakings set out in Clause ~~2.3~~2.4 to 2.8, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice in duplicate on the ~~Mortgages Trustee and Funding 1~~ LLP with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell to the LLP the New Loans and their Related Security in the relevant New Portfolio with full title guarantee (or or, in ~~relation to rights~~ the case of any Scottish Loans and ~~assets~~ their Related Security in the relevant New Portfolio and situated in or governed by the law of ~~Scotland~~ Scotland, with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, ~~if appropriate, Funding 1 has entered into a new swap agreement) to hedge against~~ in the ~~interest rates payable in respect~~ case of ~~such New~~ any Northern Irish Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the their Related Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio ~~from the Seller to the Mortgages Trustee~~ and ~~a certified copy of a notice (the original of which shall be served~~ situated in or governed by the ~~Seller by courier or by special delivery)~~ law of ~~such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated~~ Northern Ireland, as beneficial owner). 2.2 Within three London Business Days of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale receipt of a New ~~Portfolio,~~ Portfolio Notice in duplicate the LLP shall countersign that New Portfolio Notice in duplicate and ~~authorising~~ return one original copy to the ~~execution~~ Seller with a copy to the Security Trustee and ~~performance~~ the LLP agrees subject to the provisions of the ~~Transaction Documents~~ LLP Deed, to ~~which the Seller is party~~purchase with full title guarantee (or, ~~in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended~~ as applicable, with absolute warrandice or ~~rescinded~~ as ~~at the date of the certificate; (vi~~beneficial owner) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant ~~Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish~~ Loans and their Related Security which will be New Loans and their Related Security comprised in the relevant New ~~Portfolio,~~ Portfolio on the date for completion specified in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio ~~subject to~~ Notice. 2.3 If the ~~terms and provisions~~ LLP receives written notification from the Cash Manager that the Adjusted Aggregate Loan Amount is less than the aggregate Sterling Equivalent of the ~~Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or~~Principal Amount Outstanding of all Covered Bonds, as ~~applicable~~determined by the Cash Manager on any Calculation Date, ~~Clause 7.5. (a) The Seller undertakes that from~~ then the ~~relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller~~ LLP shall ~~hold the Title Deeds and Customer Files relating to the New Portfolio that are in~~ at its ~~possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that~~ sole discretion within three ~~(3)~~ London Business Days of receiving such written notice notify the ~~Sale Date~~ Seller requesting that the Seller offer to ~~provide~~ sell to the ~~Mortgages Trustee and~~ LLP in accordance with the ~~Security Trustee with an updated, complete and accurate list~~ provisions of ~~the~~ this Clause 2 sufficient New Loans and their Related Security ~~which comprise~~ on or before the ~~New Portfolio which may be provided in a document stored upon electronic media (including~~next Calculation Date to ensure that, ~~but not limited to a CD-Rom) in a form acceptable~~ taking into account the other assets and resources available to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan AgreementLLP, the ~~Interest Payment~~ Asset Coverage Test is met on the next Calculation Date ~~in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller~~ and ~~the Mortgages Trustee as applying in relation to this covenant,~~ the Seller undertakes to use all reasonable endeavours to offer to ~~sell, in accordance with the provisions of this Clause 4,~~ sell to the ~~Mortgages Trustee~~ LLP and the ~~Mortgages Trustee~~ LLP undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so ~~that~~ that, taking into account the ~~aggregate Outstanding Principal Balance of Loans in~~ other assets and resources available to the ~~Portfolio (i) during~~ LLP, the ~~period from and including~~ Asset Coverage Test is met on the ~~Fourth Issuer Closing~~ next Calculation Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the ~~Mortgages Trustee~~LLP, and the ~~Mortgages Trustee~~ LLP shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the ~~Mortgages Trustee~~ LLP of such New Loans and their Related Security would adversely affect the business of the Seller. ~~4.8 On~~ 2.4 The conditions to be met as at each ~~Sale~~ Assignment Date are: (a) there shall have been neither an Abbey Event of Default and service of an Abbey Acceleration Notice nor an LLP Event of Default and service of an LLP Acceleration Notice as at the relevant Assignment Date; (b) the LLP, acting on the advice of the Cash Manager, is not aware, and could not reasonably be expected to be aware, that ~~Funding 1 provides consideration~~ the proposed purchase by the LLP of the relevant Loans and their Related Security on the relevant Assignment Date would adversely affect the then current rating by Xxxxx'x, S&P or Fitch of the then-outstanding Covered Bonds; (c) the yield (as calculated below) of the Loans in the Portfolio together with the yield of the Loans to be assigned to the LLP on the relevant Assignment Date (together, for ~~New~~ the purposes of this paragraph (c) of Clause 2.4, the "Relevant Loans") is not less than the weighted average of LIBOR for Sterling deposits under the Interest Rate Swaps as at the immediately preceding Calculation Date plus 0.50 per cent. The yield of the Relevant Loans is to be calculated as follows: A B C D - E  F G  H  I J Where: A = the average Outstanding Principal Balance, on the relevant Assignment Date, of the Relevant Loans which are Fixed Rate Loans B = LIBOR plus the fixed rate spread on the relevant Assignment Date C = the average Outstanding Principal Balance, on the relevant Assignment Date, of the Relevant Loans which are Variable Rate Loans D = the weighted average variable rate of the Relevant Loans on the relevant Assignment Date E = the current SVR for the Relevant Loans on the relevant Assignment Date F = LIBOR plus the Assignment Date variable rate spread on the relevant G = the average Outstanding Principal Balance, on the relevant Assignment Date, of the Relevant Loans which are Tracker Loans H = LIBOR plus the Assignment Date tracker rate spread on the relevant I = the weighted average margin of the Tracker Loans over the Bank of England repo rate on the relevant Assignment Date J = the average Outstanding Principal Balance of the Relevant Loans on the relevant Assignment Date; (d) no Loan that is proposed to be sold to the ~~Mortgages Trustee pursuant to Clause 4.4(a~~LLP on the relevant Assignment Date has an Outstanding Principal Balance of more than £1,000,000; (e) ~~above,~~ if the ~~Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New~~ Loans that are proposed to be sold to the ~~Mortgages Trustee~~ LLP on the relevant ~~Sale Date.~~ Assignment Date include New Loan Types, the LLP has received written confirmation from each of the Rating Agencies that if such New Loan Types were to be sold to the LLP, such sale of the New Loan Types to the LLP would not have an adverse effect on the then-current ratings by Xxxxx'x, S&P or Fitch of the then-outstanding Covered Bonds; and (f) no Loan that is proposed to be sold to the LLP on the relevant Assignment Date relates to a Property which is not a residential property. 2.5 The ~~costs~~ obligations of the Seller and the LLP under Clauses 2.1 and 2.2 shall be subject to and conditional upon no Insolvency Event having occurred in relation to the Seller or the LLP which is continuing as at the relevant Assignment Date provided that if any part of the consideration for a sale is satisfied pursuant to Clause 2.6, such condition shall be deemed to be satisfied or waived and, if the sale was in fact made at a time when an Insolvency Event had occurred and was continuing in relation to the Seller, Clause 6.3 shall be applicable on the same basis as if Schedule 1 had contained a Representation and Warranty that no Insolvency Event in relation to the Seller had occurred at such time and that there is a material breach of such ~~independent auditors~~ Representation and Warranty. 2.6 The consideration to be provided by the LLP to the Seller for the sale of a New Portfolio to the LLP on an Assignment Date shall be ~~borne~~ an amount (the Purchase Price) equal to the aggregate of the Outstanding Principal Balance of such Loan or Loans and all Arrears of Interest and Accrued Interest relating thereto. Subject to fulfillment of the conditions referred to in Clauses 2.4 and 2.5, the relevant Purchase Price shall be satisfied by a combination of: (a) a cash payment in Sterling to be made by the LLP in the manner that the Seller directs from the proceeds of the relevant Term Advance made on such Assignment Date (after the exchange of such proceeds into Sterling, if required, pursuant to the relevant Covered Bond Swap(s)) and/or, subject to Clause 2.7, from Available Principal Receipts; and/or (b) the Seller being treated as having made a Capital Contribution in Kind in an amount equal to the difference between the Outstanding Principal Balance of the New ~~Issuer~~ Loans sold by the Seller as at the relevant Assignment Date and the cash payment (if any) made by the LLP in accordance with paragraph (a) of Clause 2.6; and (c) Deferred Consideration (including any Postponed Deferred Consideration) which shall be ~~procured~~ paid by ~~Funding 1)~~the LLP on each LLP Payment Date (provided there are available funds and after the making of any provisions in accordance with normal accounting practice) in accordance with the relevant Priorities of Payments. The Seller shall be paid that part of the relevant Purchase Price constituting the cash payment referred to in paragraph (a) of Clause 2.6 by telegraphic transfer by the LLP on the relevant Assignment Date. 2.7 Subject to clauses 14 and 15 of the LLP Deed, on each LLP Payment Date the LLP may apply Available Principal Receipts towards the purchase of New Loans and their Related Security offered to the LLP by the Seller in accordance with Clauses 2.1 and

Appears in 2 contracts

Samples: Mortgage Sale Agreement, Mortgage Sale Agreement

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject ~~to fulfilment~~ xx xxxxxxxxxt of the conditions set out in ~~Clauses~~ CLAUSES 2.2, 3.1, 4.2 (or as applicable, 4.3) and ~~4.4 and the restriction set out in Clause 2.3~~4.4, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the ~~sale~~ assignment specified in such New Portfolio Notice the Seller shall sell and assign with full title guarantee ~~(or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice)~~ to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each ~~Sale~~ Assignment Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant ~~Sale~~ Assignment Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant ~~Sale~~ Assignment Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant ~~Sale~~ Assignment Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Moody's, A-1 by S&P and F1 by Fitch at the time of, and ~~immediately~~ immexxxxxxx following, the ~~sale~~ assignment of the New Loans to the Mortgages Trustee; (e) as at the relevant ~~Sale~~ Assignment Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be ~~sold~~ assigned to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the ~~sale~~ assignment of the New Portfolio on the relevant ~~Sale~~ Assignment Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant ~~Sale~~ Assignment Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be ~~sold~~ assigned to the Mortgages Trustee on the relevant ~~Sale~~ Assignment Date (together for the purposes of this paragraph, the ~~Relevant Loans~~"RELEVANT LOANS") is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant ~~Sale~~ Assignment Date. The yield of the Relevant Loans is to be calculated as follows: (A X B)+(C X (D-E+F))+(G X (H+I)) --------------------------------- J where~~, (A)~~ , A = the Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Fixed Rate ~~Loans; (B)~~ Loans B = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant ~~Sale Date; (C)~~ Assignment Date C = the Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Variable Rate ~~Loans; (D)~~ Loans D = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant ~~Sale Date; (E)~~ Assignment Date E = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant ~~Sale Date; (F)~~ Assignment Date F = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant ~~Sale Date; (G)~~ Assignment Date G = the Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Tracker Rate ~~Loans; (H)~~ Loans H = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant ~~Sale Date; (I)~~ Assignment Date I = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant ~~Sale Date; (J)~~ Assignment Date J = the Outstanding Principal Balance of the Relevant Loans on the relevant ~~Sale~~ Assignment Date; (i) the ~~sale~~ assignment of the New Loans on the relevant ~~Sale~~ Assignment Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant ~~Sale~~ Assignment Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the ~~sale~~ assignment of the New Loans on the relevant ~~Sale~~ Assignment Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant ~~Sale~~ Assignment Date and that have more than 2 years remaining on their incentive period accounting for more than 15 10 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the ~~sale~~ assignment of the New Loans on the relevant ~~Sale~~ Assignment Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no ~~sale~~ assignment of the New ~~Loans~~ Portfolio may ~~occur, if, as at~~ occur after the ~~relevant Sale Date,~~ Interest Payment Date falling in December 2008 if the ~~Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For~~ option to redeem the ~~avoidance of doubt, this prohibition~~ First Issuer Notes on the ~~sale of New Loans~~ Interest Payment date in December 2008 pursuant to the ~~Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption,~~ Terms and Conditions of the ~~sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement~~First Issuer Notes is not exercised; (m) as at the ~~Sale~~ Assignment Date, the adjusted ~~General~~ Reserve Fund is equal to or greater than the ~~General~~ Reserve Fund Threshold; (n) if the ~~sale~~ assignment of New Loans includes the ~~sale~~ assignment of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be ~~sold and~~ assigned to the Mortgages Trustee and that such ~~sale~~ assignment of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant ~~Sale~~ Assignment Date. In this ~~Clause~~ CLAUSE 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under ~~Clause~~ CLAUSE 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant ~~Sale~~ Assignment Date. 4.4 Subject to fulfilment of the conditions referred to in ~~Clauses~~ CLAUSES 4.2, 4.3, 4.4 ~~4.5~~ and 4.6, the consideration to be provided to the Seller for the ~~sale~~ assignment of the New Portfolio to the Mortgages Trustee on ~~a Sale~~ an Assignment Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant ~~Sale~~ Assignment Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; ~~and/or~~and (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the ~~sale~~ assignment of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in ~~Schedule~~ Schedules 8 and ~~Schedule~~ 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (~~iii~~ii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant ~~Sale~~ Assignment Date and in the form of the Assignment of Third Party Rights; (iviii) a certified copy of each of the duly executed Insurance Acknowledgements; (viv) on any ~~Sale~~ Assignment Date that Funding 1 provides consideration for New Loans to be ~~sold~~ assigned to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.5(A) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant ~~Sale~~ Assignment Date attaching ~~either (i)~~ a copy of the board minute referred to in ~~Clause 3.1(a)(v~~CLAUSE 3.1(A)(IV) ~~or (ii) any board minutes or considerations, notes~~ and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate;; and (viv) on any ~~Sale~~ Assignment Date that Funding 1 provides consideration for New Loans to be ~~sold~~ assigned to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.5(A) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant ~~Sale~~ Assignment Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant ~~Sale~~ Assignment Date of the sale and assignment to the Mortgages Trustee of all of the Seller’s 's right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this ~~Clause~~ CLAUSE 4 ~~PROVIDED THAT~~ Provided That the matters described in ~~Clauses 6.6~~ CLAUSES 6.2 and ~~6.5~~ 6.3 shall not occur until the relevant time indicated in ~~Clause~~ CLAUSE 6 or, as applicable, ~~Clause 7.5~~CLAUSE 7. ~~(a)~~ 4.6 The Seller undertakes that from the relevant ~~Sale~~ Assignment Date until the perfection of the assignment ~~or assignation (as appropriate)~~ in accordance with ~~Clauses~~ CLAUSES 6.2 and ~~6.5~~6.3, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in ~~June~~ [December, 2008]; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to ~~sell~~assign, in accordance with the provisions of this ~~Clause~~ CLAUSE 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in ~~June 2008~~ December 2007 (or such later date as may be notified by Funding ~~1 to the Seller~~1) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio ~~(i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006~~ is not less than ~~£21,500,000,000 and~~ (~~ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000~~ pound)15,750,000,000 before ~~June 2008~~ December 2007 (or such other amount or amounts specified by Funding 1 in the notice referred to in ~~Clause 4.7(b)(ii~~CLAUSE 4.78(B)(II) above) provided that the Seller shall not be obliged to ~~sell~~ assign to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the ~~sale~~ assignment to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each ~~Sale~~ Assignment Date that Funding 1 provides consideration for New Loans to be ~~sold~~ assigned to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.5(A) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be ~~sold~~ assigned to the Mortgages Trustee on ~~the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).~~the

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Mortgages Trustee LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions and undertakings set out in ~~Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3) and~~ Sections 4.4 ~~and the restriction set out in Clause 2.3~~to 4.7, if the Seller shall, at any time and from time to time serve ~~a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee~~ (such service to be in the Seller’s sole discretion)) a properly completed New Portfolio Notice to the Guarantor with a copy to the Bond Trustee and each Rating Agency, the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice (which date shall be no less than five Canadian Business Days after the date of such New Portfolio Notice), the Seller shall ~~sell with full title guarantee (or in relation to rights~~ sell, transfer, assign and ~~assets situated in or governed by the law of Scotland with absolute warrandice)~~ convey to the ~~Mortgages Trustee~~ Guarantor all of the Seller’s right, title, interest and benefit in and to the Loans, their Related Security and the other assets in the relevant New ~~Portfolio~~Portfolio on a fully-serviced basis. 4.2 Within three Canadian Business Days of receipt of a New Portfolio Notice in duplicate the Guarantor shall countersign that New Portfolio Notice in duplicate and return one original copy to the Seller and the Guarantor agrees, subject to the provisions of the Guarantor Agreement, to purchase the relevant Loans and their Related Security which will be New Loans and their Related Security comprised in the relevant New Portfolio on the date for completion specified in the relevant New Portfolio Notice. 4.3 If at any time prior to the occurrence of: (i) an Issuer Event of Default; or (ii) a Guarantor Event of Default, the Guarantor receives written notification from the Cash Manager that the Asset Coverage Test has not been met, as determined by the Cash Manager on any Calculation Date, then, if the Guarantor has not requested that the Seller make a further advance under the Demand Loan with respect to such deficiency, the Guarantor shall within three Canadian Business Days of receiving such written notice notify the Seller requesting that the Seller offer to sell to the Guarantor in accordance with the provisions of this Section 4 sufficient New Loans and their Related Security on or before the next Calculation Date to ensure that, taking into account the other assets and resources available to the Guarantor, the Asset Coverage Test is met on the next Calculation Date and the Guarantor shall use all reasonable endeavours to acquire from the Seller sufficient New Loans and their Related Security so that, taking into account the other assets and resources available to the Guarantor, the Asset Coverage Test is met on the next Calculation Date. 4.4 The conditions to be met as at each ~~Sale~~ Purchase Date are: (a) ~~no event of default under the Transaction Documents~~ there shall have ~~occurred which is continuing~~ been neither an Issuer Event of Default and service of an Issuer Acceleration Notice nor a Guarantor Event of Default and service of a Guarantor Acceleration Notice as at the relevant ~~Sale~~ Purchase Date; (b) the ~~Principal Deficiency Ledger shall not have a debit balance as at~~ Guarantor, acting on the ~~most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c)~~ advice of the ~~Mortgages Trustee~~ Cash Manager, is not ~~aware~~ aware, and could not reasonably be expected to be aware, that the proposed purchase by the Guarantor of the ~~New Portfolio~~ relevant Loans and their Related Security on the relevant ~~Sale~~ Purchase Date ~~will~~ would adversely affect the then current rating by ~~the Ratings Agencies (or~~ any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies ~~from time to time) exceeding~~ of the ~~product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.;~~Covered Bonds; and (hc) ~~the yield (as calculated below) of~~ if the Loans ~~in the Mortgages Trust together with the yield of the New Loans~~ that are proposed to be sold to the ~~Mortgages Trustee~~ Guarantor on the relevant ~~Sale~~ Purchase Date ~~(together for the purposes of this paragraph~~include New Loan Types, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is Rating Agency Condition has been satisfied with respect to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate such Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. ~~4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4~~ 4.5 Subject to fulfilment of the conditions referred to in ~~Clauses 4.2, 4.3, 4.4 4.5 and 4.6~~Section 4.4, the ~~consideration~~ relevant Purchase Price to be provided to the Seller for the ~~sale~~ sale, transfer, assignment and conveyance of ~~the~~ a New Portfolio to the ~~Mortgages Trustee~~ Guarantor on a ~~Sale~~ Purchase Date shall be satisfied by payment to the ~~aggregate of~~Seller in same day funds an amount equal to the Purchase Price for such New Portfolio by depositing such amount into the Seller’s Account or, if the Seller so elects in writing to the Guarantor on or before the applicable Purchase Date, the Guarantor shall credit the Seller’s Capital Account Ledger with an amount equal to all (or the portion of the Purchase Price for such New Portfolio not paid in cash) of such Purchase Price. 4.6 Subject to Schedule 6 to the Guarantor Agreement, on each Guarantor Payment Date the Guarantor may apply Available Principal Receipts towards the purchase of New Loans and their Related Security offered to the Guarantor by the Seller in accordance with Sections 4.1 and 4.2 in an amount sufficient to ensure that, taking into account the other assets and resources available to the Guarantor, the Guarantor is in compliance with the Asset Coverage Test. 4.7 On the relevant Purchase Date, the Seller shall deliver the following documents: (a) to the ~~payment~~ Custodian: (i) the Eligible Loan Details with respect to all Loans and their Related Security sold, transferred, assigned and conveyed by ~~Funding 1~~ the Seller on such Purchase Date, which may be provided in a document stored upon electronic media (including, but not limited to, a CD-ROM) in a form acceptable to the Guarantor and the Custodian (each acting reasonably); and (ii) to the extent not provided on a previous Purchase Date, such number of originals of the Powers of Attorney as may reasonably be requested by the Guarantor, duly executed by the Seller and where applicable, duly executed by the relevant Originator, together with an opinion of legal counsel to the Seller in form and substance acceptable to the Guarantor and the Bond Trustee (each acting reasonably) confirming such Powers of Attorney are valid, enforceable and irrevocable, and sufficient to allow the Guarantor (or a nominee on its behalf) to effect the transfer of registered title to the Loans and Related Security sold, transferred, assigned and conveyed by ~~telegraphic transfer~~ the Seller on ~~the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer~~such Purchase Date; ~~and/or~~and (b) to the ~~covenant~~ Guarantor and the Bond Trustee: (i) a certificate signed by at least one authorized signatory of the ~~Mortgages Trustee to hold~~ Seller dated as of the ~~Trust Property on trust pursuant~~ relevant Purchase Date attaching if applicable a copy of the board minutes of the Seller (if not previously delivered to the ~~terms of~~ Guarantor and the ~~Mortgages Trust Deed. (a~~Bond Trustee) ~~On the date of~~ authorizing its duly authorized representatives to agree to the sale of the relevant New Portfolio and authorizing the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above onlyexecution, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution delivery and performance of the ~~Transaction Documents~~ documentation to ~~which the Seller is party, in each case~~ be entered into pursuant to this Agreement and confirming that the resolutions referred to therein and in the board minutes referred to in Section 3.1(b)(i) are in full force and effect and have not been amended or rescinded as at the date of the certificate; (ii) if applicable, a form of assignment for purposes of the assignment, sale, transfer and conveyance of Properties located in the Province of Québec, in form and substance acceptable to the Guarantor and the Bond Trustee (acting reasonably); (iii) opinions of local counsel to the Seller in form and substance satisfactory to the Guarantor and the Bond Trustee with respect to such matters as may be requested by the Guarantor and the Bond Trustee (each acting reasonably); (iv) executed copies of all financing statements, financing change statements, discharges and releases, if any, necessary to discharge or release all security interests and other rights or interests of any Person in the Loans and Related Security included in the Initial Portfolio previously granted by the Seller (other than Permitted Security Interests), together with copies of the relevant financing change statements or other discharge statements or releases with the registration particulars stamped thereon or other assurance satisfactory to the Guarantor; (v) completed PPSA search results, dated within five Canadian Business Days of the date of the First Purchase Date, listing the financing statements referred to in Section 4.7(b)(iv) above and all other effective financing statements filed in the jurisdictions referred to in Section 4.7(b)(iv) above that name the Seller as debtor and show no other Adverse Claims on any of the Loans or Related Security being purchased on the First Purchase Date; (vi) acknowledgements or duplicate registration copies of proper assignments, financing statements and other similar documents or instruments, with registration particulars stamped thereon, naming the Seller as seller or assignor and the Guarantor as purchaser or assignee, and duly filed on ~~any Sale Date that Funding 1 provides consideration for New~~ or before the date of such purchase under the PPSA in Ontario and pursuant to Article 1642 of the Civil Code in Quebec within seven Canadian Business Days’ following such purchase in order to perfect the interests of the Guarantor in the applicable Loans ~~to be sold~~ contemplated by this Agreement; (vii) an opinion of legal counsel to the ~~Mortgages Trustee pursuant~~ Seller with respect to ~~Clause 4.4(a~~“true sale” matters, “non-consolidation” matters, the registrations specified in Section 4.7(b)(vi) above ~~only,~~ and other matters in form and substance satisfactory to the Guarantor and the Bond Trustee (each acting reasonably); and (viii) a solvency certificate ~~from an authorised~~ signed by at least one authorized signatory of the Seller dated as at the relevant ~~Sale~~ Purchase Date (in form and substance satisfactory to the Guarantor and the Bond Trustee, each acting reasonably), but only in the event that (i) the relevant Purchase Date is also an Issue Date; ~~and~~ and/or (~~vii~~ii) a ~~Scottish Declaration of Trust~~ solvency certificate has not been delivered by the Seller in ~~respect~~ the three months prior to the relevant Purchase Date; and/or (iii) as at the relevant Purchase Date the short-term, unsecured, unsubordinated and unguaranteed debt obligations of the ~~Scottish Loans~~ Seller are not rated at least P-1, R-1(low) or F-1 by Moody’s, DBRS and ~~their Related Security comprised in the relevant New Portfolio~~Fitch, ~~in the form~~ respectively; and/or (~~mutatis mutandis~~iv) ~~set out in Schedule 15~~ an Issuer Event of Default has occurred and ~~with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b)~~ is continuing. The parties hereto acknowledge that completion on each ~~relevant Sale~~ Purchase Date of the ~~sale~~ sale, transfer, conveyance and assignment to the ~~Mortgages Trustee~~ Guarantor of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio ~~subject to the terms and provisions of the Mortgages Trust Deed~~ shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection Section 4. Upon satisfaction of the ~~assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5~~Purchase Price by the Guarantor pursuant to Section 4.5, the Seller shall ~~hold the Title Deeds~~ be deemed to have sold, transferred, assigned and ~~Customer Files relating~~ conveyed all of its right, title, interest and benefit in and to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updatedLoans, ~~complete and accurate list of the Loans and~~ their Related Security ~~which comprise~~ and the other assets in the New Portfolio ~~which may be provided in a document stored upon electronic media (including~~without the need for any further formal or other instrument or assignment, ~~but not limited to a CD-Rom) in a form acceptable to~~ effective as of the ~~Mortgages Trustee and the Security Trustee (each acting reasonably)~~relevant Purchase Date. 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified 4.8 The sale by ~~Funding 1 by notice in writing to~~ the Seller ~~and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions~~ of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient any New Loans and their Related Security ~~so that~~ to the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller Guarantor shall not ~~be obliged~~ include any obligation relating to ~~sell~~ payment of funds to ~~the Mortgages Trustee~~a Borrower in respect of such New Loans, which obligation shall at all times, and notwithstanding the ~~Mortgages Trustee shall not be obliged to acquire,~~ sale of such New Loans and their Related Security ~~if in the reasonable opinion of the Seller the sale~~ to the ~~Mortgages Trustee of New Loans and their Related Security would adversely affect the business~~ Guarantor, remain an obligation of the Seller. ~~4.8 On each Sale~~ 4.9 If any sale of any New Portfolio by the Seller to the Guarantor on the relevant Purchase Date includes the sale of any New Loans, which are New Loan Types, the parties agree that ~~Funding 1 provides consideration for~~ the Eligibility Criteria and the Loan Representations and Warranties, with the prior consent of the Bond Trustee (such consent to be given in accordance with Section 8.10) and subject to satisfaction of the Rating Agency Condition with respect to the sale of such New Loan Types, be modified as appropriate to accommodate such New Loans prior to the relevant Purchase Date. 4.10 The Seller shall not sell any New Loans to ~~be sold~~ the Guarantor which have not been originated by it or another Originator and which have been purchased from third parties unless the Rating Agency Condition has been satisfied in respect thereof. 4.11 The Guarantor shall pay to the ~~Mortgages Trustee pursuant to Clause 4.4(a) above,~~ Seller all Third Party Amounts on each Guarantor Payment Date from amounts on deposit in the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1)GDA Account.

Appears in 1 contract

Samples: Mortgage Sale Agreement (BMO Covered Bond Guarantor Limited Partnership)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject ~~to fulfilment~~ xx xxxxilment of the conditions set out in ~~Clauses~~ CLAUSES 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in ~~Clause~~ CLAUSE 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages ~~Trustee~~ Trustee, Funding 1 and Funding 1 2 with a copy to each of the Funding 1 Security Trustee and the Funding 2 Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) in the case of Funding 1, the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date and in the case of Funding 2, the Funding 2 Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 2 Interest Payment Date after applying all Funding 2 Available Revenue Receipts on that Funding 2 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date ~~will~~ would adversely affect the then current rating by the ~~Ratings~~ Rating Agencies ~~(or~~ of any of ~~them)~~ the outstanding Notes of the ~~Notes~~Funding 1 Issuers or of the Master Issuer; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Moody's, A-1 by S&P and F1 by Fitch at the time of, ~~and immediately~~ anx xxxxxiately following, the sale of ~~the~~ New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust; (f) except where Funding 1 and/or Funding 2 pays amounts to the ~~Mortgages Trustee~~ Seller in consideration of New Loans to be sold to itthe Mortgages Trustee, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any ~~one Interest Period~~ three-month period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that ~~Interest Period~~three-month period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the ~~Portfolio~~ Loans in the Mortgages Trust after such purchase calculated on the relevant Sale Date (in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time)) exceeding the product of WAFF and WALS for the ~~Portfolio~~ Loans in the Mortgages Trust calculated on the ~~most recent Closing~~ Programme Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous [Interest Payment Date], after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s) and/or the Funding 2 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Funding (No. 2) LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions set out in ~~Clauses~~ CLAUSES 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in ~~Clause~~ CLAUSE 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Xxxxx'x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: (A x B)+(C x (D-E+F))+(G x (H+I)) --------------------------------- J where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than ~~Sterling-~~Sterling- LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this ~~Clause~~ CLAUSE 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under ~~Clause~~ CLAUSE 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in ~~Clauses~~ CLAUSES 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to ~~Clause~~ CLAUSE 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in ~~Clause~~ CLAUSE 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to ~~Clause~~ CLAUSE 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s 's right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this ~~Clause~~ CLAUSE 4 PROVIDED THAT the matters described in ~~Clauses~~ CLAUSES 6.6 and 6.5 shall not occur until the relevant time indicated in ~~Clause~~ CLAUSE 6 or, as applicable, ~~Clause 7.5~~CLAUSE 7. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with ~~Clauses~~ CLAUSES 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Financing (No. 5) PLC)

SALE AND PURCHASE OF NEW PORTFOLIOS. ~~4.1~~ 2.1 Subject to fulfilment of the conditions ~~set out in Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3)~~ and ~~4.4 and the restriction~~ undertakings set out in Clause ~~2.3~~2.4 to 2.8, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice in duplicate on the ~~Mortgages Trustee and Funding 1~~ LLP with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell to the LLP the New Loans and their Related Security in the relevant New Portfolio with full title guarantee (or or, in ~~relation to rights~~ the case of any Scottish Loans and ~~assets~~ their Related Security in the relevant New Portfolio and situated in or governed by the law of ~~Scotland~~ Scotland, with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, ~~if appropriate, Funding 1 has entered into a new swap agreement) to hedge against~~ in the ~~interest rates payable in respect~~ case of ~~such New~~ any Northern Irish Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the their Related Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio ~~from the Seller to the Mortgages Trustee~~ and ~~a certified copy of a notice (the original of which shall be served~~ situated in or governed by the ~~Seller by courier or by special delivery)~~ law of ~~such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated~~ Northern Ireland, as beneficial owner). 2.2 Within three London Business Days of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale receipt of a New ~~Portfolio,~~ Portfolio Notice in duplicate the LLP shall countersign that New Portfolio Notice in duplicate and ~~authorising~~ return one original copy to the ~~execution~~ Seller with a copy to the Security Trustee and ~~performance~~ the LLP agrees subject to the provisions of the ~~Transaction Documents~~ LLP Deed, to ~~which the Seller is party~~purchase with full title guarantee (or, ~~in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended~~ as applicable, with absolute warrandice or ~~rescinded~~ as ~~at the date of the certificate; (vi~~beneficial owner) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant ~~Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish~~ Loans and their Related Security which will be New Loans and their Related Security comprised in the relevant New ~~Portfolio,~~ Portfolio on the date for completion specified in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio ~~subject to~~ Notice. 2.3 If the ~~terms and provisions~~ LLP receives written notification from the Cash Manager that the Adjusted Aggregate Loan Amount is less than the aggregate Sterling Equivalent of the ~~Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or~~Principal Amount Outstanding of all Covered Bonds, as ~~applicable~~determined by the Cash Manager on any Calculation Date, ~~Clause 7.5. (a) The Seller undertakes that from~~ then the ~~relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller~~ LLP shall ~~hold the Title Deeds and Customer Files relating to the New Portfolio that are in~~ at its ~~possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that~~ sole discretion within three ~~(3)~~ London Business Days of receiving such written notice notify the ~~Sale Date~~ Seller requesting that the Seller offer to ~~provide~~ sell to the ~~Mortgages Trustee and~~ LLP in accordance with the ~~Security Trustee with an updated, complete and accurate list~~ provisions of ~~the~~ this Clause 2 sufficient New Loans and their Related Security ~~which comprise~~ on or before the ~~New Portfolio which may be provided in a document stored upon electronic media (including~~next Calculation Date to ensure that, ~~but not limited to a CD-Rom) in a form acceptable~~ taking into account the other assets and resources available to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan AgreementLLP, the ~~Interest Payment~~ Asset Coverage Test is met on the next Calculation Date ~~in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller~~ and ~~the Mortgages Trustee as applying in relation to this covenant,~~ the Seller undertakes to use all reasonable endeavours to offer to ~~sell, in accordance with the provisions of this Clause 4,~~ sell to the ~~Mortgages Trustee~~ LLP and the ~~Mortgages Trustee~~ LLP undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so ~~that~~ that, taking into account the ~~aggregate Outstanding Principal Balance of Loans in~~ other assets and resources available to the ~~Portfolio (i) during~~ LLP, the ~~period from and including~~ Asset Coverage Test is met on the ~~Fourth Issuer Closing~~ next Calculation Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the ~~Mortgages Trustee~~LLP, and the ~~Mortgages Trustee~~ LLP shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the ~~Mortgages Trustee~~ LLP of such New Loans and their Related Security would adversely affect the business of the Seller. ~~4.8 On~~ 2.4 The conditions to be met as at each ~~Sale~~ Assignment Date are: (a) there shall have been neither an Abbey Event of Default and service of an Abbey Acceleration Notice nor an LLP Event of Default and service of an LLP Acceleration Notice as at the relevant Assignment Date; (b) the LLP, acting on the advice of the Cash Manager, is not aware, and could not reasonably be expected to be aware, that ~~Funding 1 provides consideration~~ the proposed purchase by the LLP of the relevant Loans and their Related Security on the relevant Assignment Date would adversely affect the then current rating by Xxxxx'x, S&P or Fitch of the then-outstanding Covered Bonds; (c) the yield (as calculated below) of the Loans in the Portfolio together with the yield of the Loans to be assigned to the LLP on the relevant Assignment Date (together, for ~~New~~ the purposes of this paragraph (c) of Clause 2.4, the "Relevant Loans") is not less than the weighted average of the Relevant XXXXX Rate under the Interest Rate Swaps as at the immediately preceding Swap Calculation Date plus 0.65 per cent. The yield of the Relevant Loans is to be calculated as follows: Where: A = the average Outstanding Principal Balance, on the relevant Assignment Date, of the Relevant Loans B = the weighted average of the Relevant XXXXX Rate under the Interest Rate Swaps as at the immediately preceding Swap Calculation Date plus the Floating Rate Payer Spread (as defined in the Interest Rate Swap) on the relevant Assignment Date C = the average Outstanding Principal Balance of the Relevant Loans on the relevant Assignment Date; (d) no Loan that is proposed to be sold to the ~~Mortgages Trustee pursuant to Clause 4.4(a~~LLP on the relevant Assignment Date has an Outstanding Principal Balance of more than £1,000,000; (e) ~~above,~~ if the ~~Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New~~ Loans that are proposed to be sold to the ~~Mortgages Trustee~~ LLP on the relevant ~~Sale Date.~~ Assignment Date include New Loan Types, the LLP has received written confirmation from each of the Rating Agencies that if such New Loan Types were to be sold to the LLP, such sale of the New Loan Types to the LLP would not have an adverse effect on the then-current ratings by Xxxxx'x, S&P or Fitch of the then-outstanding Covered Bonds; and (f) no Loan that is proposed to be sold to the LLP on the relevant Assignment Date relates to a Property which is not a residential property. 2.5 The ~~costs~~ obligations of the Seller and the LLP under Clauses 2.1 and 2.2 shall be subject to and conditional upon no Insolvency Event having occurred in relation to the Seller or the LLP which is continuing as at the relevant Assignment Date provided that if any part of the consideration for a sale is satisfied pursuant to Clause 2.6, such condition shall be deemed to be satisfied or waived and, if the sale was in fact made at a time when an Insolvency Event had occurred and was continuing in relation to the Seller, Clause 6.3 shall be applicable on the same basis as if Schedule 1 had contained a Representation and Warranty that no Insolvency Event in relation to the Seller had occurred at such time and that there is a material breach of such ~~independent auditors~~ Representation and Warranty. 2.6 The consideration to be provided by the LLP to the Seller for the sale of a New Portfolio to the LLP on an Assignment Date shall be ~~borne~~ an amount (the Purchase Price) equal to the aggregate of the Outstanding Principal Balance of such Loan or Loans and all Arrears of Interest and Accrued Interest relating thereto. Subject to fulfillment of the conditions referred to in Clauses 2.4 and 2.5, the relevant Purchase Price shall be satisfied by a combination of: (a) a cash payment in Sterling to be made by the LLP in the manner that the Seller directs from the proceeds of the relevant Term Advance made on such Assignment Date (after the exchange of such proceeds into Sterling, if required, pursuant to the relevant Covered Bond Swap(s)) and/or, subject to Clause 2.7, from Available Principal Receipts; and/or (b) the Seller being treated as having made a Capital Contribution in Kind in an amount equal to the difference between the Outstanding Principal Balance of the New ~~Issuer~~ Loans sold by the Seller as at the relevant Assignment Date and the cash payment (if any) made by the LLP in accordance with paragraph (a) of Clause 2.6; and (c) Deferred Consideration (including any Postponed Deferred Consideration) which shall be ~~procured~~ paid by ~~Funding 1)~~the LLP on each LLP Payment Date (provided there are available funds and after the making of any provisions in accordance with normal accounting practice) in accordance with the relevant Priorities of Payments. The Seller shall be paid that part of the relevant Purchase Price constituting the cash payment referred to in paragraph (a) of Clause 2.6 by telegraphic transfer by the LLP on the relevant Assignment Date. 2.7 Subject to clauses 14 and 15 of the LLP Deed, on each LLP Payment Date the LLP may apply Available Principal Receipts towards the purchase of New Loans and their Related Security offered to the LLP by the Seller in accordance with Clauses 2.1 and

Appears in 1 contract

Samples: Mortgage Sale Agreement

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to ~~fulfilment~~ fxxxxxxxxt of the conditions set out in ~~Clauses~~ CLAUSES 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in ~~Clause~~ CLAUSE 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date ~~will~~ would adversely affect the then current rating by the ~~Ratings~~ Rating Agencies of the Notes (or any of them~~) of the Notes~~); (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Moody's, A-1 by S&P and F1 by Fitch at the time of, and ~~immediately~~ immxxxxxxxy following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the ~~Mortgages Trustee~~ Seller in consideration of New Loans to be sold to itthe Mortgages Trustee, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date (in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time)) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: (A x B) + (C x (D - E + F)) + (G x (H + I)) ------------------------------------------- J where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 ~~Fixed-~~Fixed Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than ~~Sterling-~~Sterling- LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans ~~comprising~~ comprised in the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this ~~Clause~~ CLAUSE 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under ~~Clause~~ CLAUSE 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in ~~Clauses~~ CLAUSES 4.2, 4.3, ~~4.4~~ 4.4, 4.5 and 4.6, the consideration to be provided to the Seller for the sale and assignment of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust for the Seller (as to the Seller Share) and Funding 1 (as to the Funding 1 Share) pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in ~~Schedule~~ SCHEDULE 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in ~~Schedule~~ SCHDULE 8 and ~~Schedule 9~~ hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.4(A) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in ~~Clause 3.1(a)(v~~CLAUSE 3.1(A)(V) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to ~~therein~~ herein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.4(A) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of ~~the~~ any Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in ~~Schedule~~ SCHEDULE 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s 's right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this ~~Clause~~ CLAUSE 4 PROVIDED THAT the matters described in ~~Clauses~~ CLAUSES 6.6 and 6.5 shall not occur until the relevant time indicated in ~~Clause~~ CLAUSE 6 or, as applicable, ~~Clause 7.5~~CLAUSE 7. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with ~~Clauses~~ CLAUSES 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Financing (No. 8) PLC)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions set out in ~~Clauses~~ CLAUSES 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in ~~Clause~~ CLAUSE 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date ~~will~~ would adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least ~~P-1~~ [P-1] by ~~Xxxxx’x~~Mxxxx'x, ~~A-1~~ [A-1] by S&P and F1 [F1] by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 [5] per cent. of the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 [15] per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus ~~0.25~~ [0.25] per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least ~~0.50~~ [0.50] per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: (AxB)+(Cx(D-E+F))+(Gx(H+I)) --------------------------- J where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus ~~0.25~~ [0.25] per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus ~~0.50~~ [0.50] per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 [15] per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans ~~comprising~~ comprised in the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this ~~Clause~~ CLAUSE 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under ~~Clause~~ CLAUSE 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in ~~Clauses~~ CLAUSES 4.2, 4.3, ~~4.4~~ 4.4, 4.5 and 4.6, the consideration to be provided to the Seller for the sale and assignment of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust for the Seller (as to the Seller Share) and Funding 1 (as to the Funding 1 Share) pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in ~~Schedule~~ SCHEDULE 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in ~~Schedule~~ SCHEDULE 8 and ~~Schedule~~ SCHEDULE 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.4(A) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in ~~Clause 3.1(a)(v~~CLAUSE 3.1(A)(V) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.4(A) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in ~~Schedule~~ SCHEDULE 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s 's right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this ~~Clause~~ CLAUSE 4 PROVIDED THAT the matters described in ~~Clauses~~ CLAUSES 6.6 and 6.5 shall not occur until the relevant time indicated in ~~Clause~~ CLAUSE 6 or, as applicable, ~~Clause 7.5~~CLAUSE 7. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with ~~Clauses~~ CLAUSES 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Financing (No. 6) PLC)

SALE AND PURCHASE OF NEW PORTFOLIOS. ~~4.1~~ ‌ 2.1 Subject to fulfilment of the conditions ~~set out in Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3)~~ and ~~4.4 and the restriction~~ undertakings set out in Clause ~~2.3~~2.4 to 2.8, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice in duplicate on the ~~Mortgages Trustee and Funding 1~~ LLP with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell to the LLP the New Loans and their Related Security in the relevant New Portfolio with full title guarantee (or or, in ~~relation to rights~~ the case of any Scottish Loans and ~~assets~~ their Related Security in the relevant New Portfolio and situated in or governed by the law of ~~Scotland~~ Scotland, with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, ~~if appropriate, Funding 1 has entered into a new swap agreement) to hedge against~~ in the ~~interest rates payable in respect~~ case of ~~such New~~ any Northern Irish Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the their Related Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio ~~from the Seller to the Mortgages Trustee~~ and ~~a certified copy of a notice (the original of which shall be served~~ situated in or governed by the ~~Seller by courier or by special delivery)~~ law of ~~such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated~~ Northern Ireland, as beneficial owner).‌ 2.2 Within three London Business Days of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale receipt of a New ~~Portfolio,~~ Portfolio Notice in duplicate the LLP shall countersign that New Portfolio Notice in duplicate and ~~authorising~~ return one original copy to the ~~execution~~ Seller with a copy to the Security Trustee and ~~performance~~ the LLP agrees subject to the provisions of the ~~Transaction Documents~~ LLP Deed, to ~~which the Seller is party~~purchase with full title guarantee (or, ~~in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended~~ as applicable, with‌ absolute warrandice or ~~rescinded~~ as ~~at the date of the certificate; (vi~~beneficial owner) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant ~~Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish~~ Loans and their Related Security which will be New Loans and their Related Security comprised in the relevant New ~~Portfolio,~~ Portfolio on the date for completion specified in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio ~~subject to~~ Notice. 2.3 If the ~~terms and provisions~~ LLP receives written notification from the Cash Manager that the Adjusted Aggregate Loan Amount is less than the aggregate Sterling Equivalent of the ~~Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or~~Principal Amount Outstanding of all Covered Bonds, as ~~applicable~~determined by the Cash Manager on any Calculation Date, ~~Clause 7.5. (a) The Seller undertakes that from~~ then the ~~relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller~~ LLP shall ~~hold the Title Deeds and Customer Files relating to the New Portfolio that are in~~ at its ~~possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that~~ sole discretion within three ~~(3)~~ London Business Days of receiving such written notice notify the ~~Sale Date~~ Seller requesting that the Seller offer to ~~provide~~ sell to the ~~Mortgages Trustee and~~ LLP in accordance with the ~~Security Trustee with an updated, complete and accurate list~~ provisions of ~~the~~ this Clause 2 sufficient New Loans and their Related Security ~~which comprise~~ on or before the ~~New Portfolio which may be provided in a document stored upon electronic media (including~~next Calculation Date to ensure that, ~~but not limited to a CD-Rom) in a form acceptable~~ taking into account the other assets and resources available to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan AgreementLLP, the ~~Interest Payment~~ Asset Coverage Test is met on the next Calculation Date ~~in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller~~ and ~~the Mortgages Trustee as applying in relation to this covenant,~~ the Seller undertakes to use all reasonable endeavours to offer to ~~sell, in accordance with the provisions of this Clause 4,~~ sell to the ~~Mortgages Trustee~~ LLP and the ~~Mortgages Trustee~~ LLP undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so ~~that~~ that, taking into account the ~~aggregate Outstanding Principal Balance of Loans in~~ other assets and resources available to the ~~Portfolio (i) during~~ LLP, the ~~period from and including~~ Asset Coverage Test is met on the ~~Fourth Issuer Closing~~ next Calculation Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the ~~Mortgages Trustee~~LLP, and the ~~Mortgages Trustee~~ LLP shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the ~~Mortgages Trustee~~ LLP of such New Loans and their Related Security would adversely affect the business of the Seller. ~~4.8 On~~ 2.4 The conditions to be met as at each ~~Sale~~ Assignment Date are:‌ (a) there shall have been neither an Abbey Event of Default and service of an Abbey Acceleration Notice nor an LLP Event of Default and service of an LLP Acceleration Notice as at the relevant Assignment Date; (b) the LLP, acting on the advice of the Cash Manager, is not aware, and could not reasonably be expected to be aware, that ~~Funding 1 provides consideration~~ the proposed purchase by the LLP of the relevant Loans and their Related Security on the relevant Assignment Date would adversely affect the then current rating by Xxxxx'x, S&P or Fitch of the then-outstanding Covered Bonds; (c) the yield (as calculated below) of the Loans in the Portfolio together with the yield of the Loans to be assigned to the LLP on the relevant Assignment Date (together, for ~~New~~ the purposes of this paragraph (c) of Clause 2.4, the "Relevant Loans") is not less than the weighted average of the Relevant XXXXX Xxxx under the Interest Rate Swaps as at the immediately preceding Swap Calculation Date plus 0.65 per cent. The yield of the Relevant Loans is to be calculated as follows: Where: A = the average Outstanding Principal Balance, on the relevant Assignment Date, of the Relevant Loans B = the weighted average of the Relevant XXXXX Xxxx under the Interest Rate Swaps as at the immediately preceding Swap Calculation Date plus the Floating Rate Payer Spread (as defined in the Interest Rate Swap) on the relevant Assignment Date C = the average Outstanding Principal Balance of the Relevant Loans on the relevant Assignment Date; (d) no Loan that is proposed to be sold to the ~~Mortgages Trustee pursuant to Clause 4.4(a~~LLP on the relevant Assignment Date has an Outstanding Principal Balance of more than £1,000,000; (e) ~~above,~~ if the ~~Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New~~ Loans that are proposed to be sold to the ~~Mortgages Trustee~~ LLP on the relevant ~~Sale Date.~~ Assignment Date include New Loan Types, the LLP has received written confirmation from each of the Rating Agencies that if such New Loan Types were to be sold to the LLP, such sale of the New Loan Types to the LLP would not have an adverse effect on the then-current ratings by Xxxxx'x, S&P or Fitch of the then-outstanding Covered Bonds; and (f) no Loan that is proposed to be sold to the LLP on the relevant Assignment Date relates to a Property which is not a residential property. 2.5 The ~~costs~~ obligations of the Seller and the LLP under Clauses 2.1 and 2.2 shall be subject to and conditional upon no Insolvency Event having occurred in relation to the Seller or the LLP which is continuing as at the relevant Assignment Date provided that if any part of the consideration for a sale is satisfied pursuant to Clause 2.6, such condition shall be deemed to be satisfied or waived and, if the sale was in fact made at a time when an Insolvency Event had occurred and was continuing in relation to the Seller, Clause 6.3 shall be applicable on the same basis as if Schedule 1 had contained a Representation and Warranty that no Insolvency Event in relation to the Seller had occurred at such time and that there is a material breach of such ~~independent auditors~~ Representation and Warranty.‌ 2.6 The consideration to be provided by the LLP to the Seller for the sale of a New Portfolio to the LLP on an Assignment Date shall be ~~borne~~ an amount (the Purchase Price) equal to the aggregate of the Outstanding Principal Balance of such Loan or Loans and all Arrears of Interest and Accrued Interest relating thereto. Subject to fulfillment of the conditions referred to in Clauses 2.4 and 2.5, the relevant Purchase Price shall be satisfied by a combination of:‌ (a) a cash payment in Sterling to be made by the LLP in the manner that the Seller directs from the proceeds of the relevant Term Advance made on such Assignment Date (after the exchange of such proceeds into Sterling, if required, pursuant to the relevant Covered Bond Swap(s)) and/or, subject to Clause 2.7, from Available Principal Receipts; and/or (b) the Seller being treated as having made a Capital Contribution in Kind in an amount equal to the difference between the Outstanding Principal Balance of the New ~~Issuer~~ Loans sold by the Seller as at the relevant Assignment Date and the cash payment (if any) made by the LLP in accordance with paragraph (a) of Clause 2.6; and (c) Deferred Consideration (including any Postponed Deferred Consideration) which shall be ~~procured~~ paid by ~~Funding 1)~~the LLP on each LLP Payment Date (provided there are available funds and after the making of any provisions in accordance with normal accounting practice) in accordance with the relevant Priorities of Payments. The Seller shall be paid that part of the relevant Purchase Price constituting the cash payment referred to in paragraph (a) of Clause 2.6 by telegraphic transfer by the LLP on the relevant Assignment Date. 2.7 Subject to clauses 14 and 15 of the LLP Deed, on each LLP Payment Date the LLP may apply Available Principal Receipts towards the purchase of New Loans and their Related Security offered to the LLP by the Seller in accordance with Clauses 2.1 and‌

Appears in 1 contract

Samples: Mortgage Sale Agreement

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions set out in Clauses ~~2.2~~4.4, ~~3.1, 4.2 (or as applicable, 4.3)~~ 4.5 and ~~4.4 and the restriction set out in Clause 2.3~~4.8, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice in duplicate on the ~~Mortgages Trustee and Funding 1~~ LLP with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the later of the Effective Date and the date for completion of the sale specified in such New Portfolio Notice and (in the case of the Effective Date), immediately following the release of the relevant New Portfolio from the CCA Trust (so far as comprised therein) and its assignment and/or transfer to the Seller pursuant to Clause 2.8, the Seller shall sell to the LLP with full title guarantee (or or, in ~~relation to rights~~ the case of any Scottish Loans and ~~assets situated~~ their Related Security comprised in ~~or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee~~ the relevant New Portfolio, with absolute warrandice or, in the case of any Northern Irish Loans and their Related Security comprised in the relevant New Portfolio, as beneficial owner) all its rights, title, interest and benefit in the relevant New Portfolio and each Additional Loan Advance and Product Switch pursuant to any Loan comprising the relevant New Portfolio on the later of the Effective Date and the date thereof. 4.2 Within ten (10) Business Days of receipt of a New Portfolio Notice in duplicate the LLP shall countersign that New Portfolio Notice in duplicate and return one original thereof to the Seller with a copy to the Security Trustee and the LLP agrees subject to the provisions of the LLP Deed to purchase with full title guarantee (or, in the case of any Scottish Loans and their Related Security comprised in the relevant New Portfolio, with absolute warrandice or, in the case of any Northern Irish Loans and their Related Security comprised in the relevant New Portfolio, as beneficial owner) the relevant New Loans and their Related Security comprising the relevant New Portfolio on the later of the Effective Date and the date for completion specified in the relevant New Portfolio Notice. 4.3 If at any time prior to the occurrence of: (a) an Issuer Event of Default; and/or (b) an LLP Event of Default, the LLP receives written notification from the Cash Manager that the Adjusted Aggregate Loan Amount does not comply with the Asset Coverage Test as determined by the Cash Manager on any Calculation Date, then the LLP shall (unless the Security Trustee otherwise requires) within three (3) Business Days of receiving such written notice notify the Seller requesting that the Seller offers to sell in accordance with the provisions of this Clause 4 to the LLP sufficient New Loans and their Related Security on or before the next Calculation Date so that the Adjusted Aggregate Loan Amount is in compliance with the Asset Coverage Test and the Seller undertakes to use all reasonable endeavours to offer to sell to the LLP and the LLP undertakes to use all reasonable endeavours to acquire from the Seller sufficient New Loans and their Related Security so that the Adjusted Aggregate Loan Amount is maintained at all times in compliance with the Asset Coverage Test as determined by the Cash Manager on each Calculation Date PROVIDED THAT the Seller shall not be obliged to sell to the LLP and the LLP shall not be obliged to acquire New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the LLP of such New Loans and their Related Security would adversely affect the business or financial condition of the Seller. 4.4 The conditions to be met as at each ~~Sale~~ relevant Transfer Date ~~are:~~in relation to the sale of New Loans (the (a) no ~~event~~ Issuer Event of ~~default~~ Default or LLP Event of Default under the Transaction Documents shall have occurred which is continuing as at the relevant ~~Sale~~ Transfer Date; (b) the ~~Principal Deficiency Ledger shall not have a debit balance as at~~ LLP acting on the ~~most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c)~~ advice of the ~~Mortgages Trustee~~ Cash Manager is not ~~aware~~ aware, and could not reasonably be expected to be aware, that the purchase of the New Portfolio on the relevant ~~Sale~~ Transfer Date will adversely affect the then current rating by ~~the Ratings Agencies (~~Moody's or ~~any of them)~~ Fitch of the ~~Notes~~Covered Bonds; (c) the weighted average yield on the Loans in the Portfolio (including the loans which it is proposed will be New Loans) is at least 0.25 per cent. greater than the XXXXX Xxxx Xxxx published on the final London Business Day in the previous Calculation Period after taking into account: (i) the weighted average yield on the Loans; and (ii) the margins on the Interest Rate Swap and any additional interest rate swap entered into by the LLP; and (iii) the average yield on any Substitution Assets held by the LLP; (d) ~~as at~~ the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances percentage of the Loans in the ~~Mortgages Trust, in respect of~~ Portfolio that are buy-to-let (including the loans which ~~the aggregate amount in arrears~~ it is ~~more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust;~~proposed will be New Loans) will not exceed 15%; and (fe) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) if the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to loans which it is proposed will be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant ~~Sale~~ Transfer Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the ~~Mortgages Trustee~~LLP, the Security Trustee has received ~~written confirmation from each of the~~ Rating ~~Agencies~~ Agency Confirmation that such New Loan Types may be sold ~~and assigned~~ to the ~~Mortgages Trustee~~ LLP, in each case, as certified by an Authorised Signatory of each of the Issuer and the LLP, PROVIDED THAT, if the Transfer Date is an Issue Date, of the conditions set out in (a) to (e) above, only conditions (a), (c), and (d) are required to be satisfied to effect an assignment and transfer of the loans which is proposed will be New Loans PROVIDED THAT if any part of the consideration for a sale is satisfied pursuant to a cash payment under Clause 4.6(a), the conditions set out in (a) to (e) above shall be deemed to be satisfied or waived and, if the sale was in fact made at a time when the conditions were not satisfied or waived, Clause 9.3 shall be applicable on the basis as if Schedule 2 (Loan Representations and Warranties) had contained a warranty that the conditions in this Clause 4.4 had been satisfied and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into there is a ~~new swap agreement) to hedge against the interest rates payable in respect~~ material breach of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date fallswarranty. ~~4.3~~ 4.5 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred in relation to such Seller which is continuing as at the relevant ~~Sale Date~~Transfer Date PROVIDED THAT if any part of the consideration for a sale is satisfied pursuant to a cash payment under Clause 4.6(a), such condition shall be deemed to be satisfied or waived and, if the sale was in fact made at a time when an Insolvency Event had occurred and was continuing, Clause 9.3 shall be applicable on the basis as if Schedule 2 (Loan Representations and Warranties) had contained a warranty that no Insolvency Event in relation to the Seller had occurred at such time and that there is a material breach of such warranty. ~~4.4~~ 4.6 Subject to fulfilment of the conditions referred to in Clauses ~~4.2~~4.4, ~~4.3, 4.4~~ 4.5 and ~~4.6~~4.8, the ~~consideration~~ relevant Purchase Price to be provided to the Seller for the sale of the New Portfolio to the ~~Mortgages Trustee~~ LLP on a ~~Sale~~ Transfer Date shall be ~~the aggregate~~ satisfied by a combination of: (a) a cash payment (if any) in Sterling to be made by the ~~payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of~~ LLP from the proceeds of ~~any New Intercompany Loan advanced~~ the relevant Term Advance and/or, subject to ~~Funding 1 by a New Issuer~~Clause 4.7, from Available Principal Receipts unless an Asset Coverage Test Breach Notice has been served and is unrevoked; and/or (b) the ~~covenant~~ Seller being treated as having made a Capital Contribution in Kind in an amount equal to the difference between the aggregate of the ~~Mortgages Trustee to hold the Trust Property on trust pursuant to the terms~~ True Balance of the ~~Mortgages Trust Deed. (a) On the date of the sale of the relevant~~ New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated Loans as at the relevant ~~Sale~~ Transfer Date and in the ~~form of~~ cash payment (if any) made by the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to LLP under Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date4.6(a); and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement

SALE AND PURCHASE OF NEW PORTFOLIOS. ~~4.1~~ 2.1 Subject to fulfilment of the conditions ~~set out in Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3)~~ and ~~4.4 and the restriction~~ undertakings set out in Clause ~~2.3~~2.4 to 2.8, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice in duplicate on the ~~Mortgages Trustee and Funding 1~~ LLP with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell to the LLP the New Loans and their Related Security in the relevant New Portfolio with full title guarantee (or or, in ~~relation to rights~~ the case of any Scottish Loans and ~~assets~~ their Related Security in the relevant New Portfolio and situated in or governed by the law of ~~Scotland~~ Scotland, with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, ~~if appropriate, Funding 1 has entered into a new swap agreement) to hedge against~~ in the ~~interest rates payable in respect~~ case of ~~such New~~ any Northern Irish Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the their Related Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio ~~from the Seller to the Mortgages Trustee~~ and ~~a certified copy of a notice (the original of which shall be served~~ situated in or governed by the ~~Seller by courier or by special delivery)~~ law of ~~such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated~~ Northern Ireland, as beneficial owner). 2.2 Within three London Business Days of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale receipt of a New ~~Portfolio,~~ Portfolio Notice in duplicate the LLP shall countersign that New Portfolio Notice in duplicate and ~~authorising~~ return one original copy to the ~~execution~~ Seller with a copy to the Security Trustee and ~~performance~~ the LLP agrees subject to the provisions of the ~~Transaction Documents~~ LLP Deed, to ~~which the Seller is party~~purchase with full title guarantee (or, ~~in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended~~ as applicable, with absolute warrandice or ~~rescinded~~ as ~~at the date of the certificate; (vi~~beneficial owner) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant ~~Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish~~ Loans and their Related Security which will be New Loans and their Related Security comprised in the relevant New ~~Portfolio,~~ Portfolio on the date for completion specified in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio ~~subject to~~ Notice. 2.3 If the ~~terms and provisions~~ LLP receives written notification from the Cash Manager that the Adjusted Aggregate Loan Amount is less than the aggregate Sterling Equivalent of the ~~Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or~~Principal Amount Outstanding of all Covered Bonds, as ~~applicable~~determined by the Cash Manager on any Calculation Date, ~~Clause 7.5. (a) The Seller undertakes that from~~ then the ~~relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller~~ LLP shall ~~hold the Title Deeds and Customer Files relating to the New Portfolio that are in~~ at its ~~possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that~~ sole discretion within three ~~(3)~~ London Business Days of receiving such written notice notify the ~~Sale Date~~ Seller requesting that the Seller offer to ~~provide~~ sell to the ~~Mortgages Trustee and~~ LLP in accordance with the ~~Security Trustee with an updated, complete and accurate list~~ provisions of ~~the~~ this Clause 2 sufficient New Loans and their Related Security ~~which comprise~~ on or before the ~~New Portfolio which may be provided in a document stored upon electronic media (including~~next Calculation Date to ensure that, ~~but not limited to a CD-Rom) in a form acceptable~~ taking into account the other assets and resources available to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan AgreementLLP, the ~~Interest Payment~~ Asset Coverage Test is met on the next Calculation Date ~~in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller~~ and ~~the Mortgages Trustee as applying in relation to this covenant,~~ the Seller undertakes to use all reasonable endeavours to offer to ~~sell, in accordance with the provisions of this Clause 4,~~ sell to the ~~Mortgages Trustee~~ LLP and the ~~Mortgages Trustee~~ LLP undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so ~~that~~ that, taking into account the ~~aggregate Outstanding Principal Balance of Loans in~~ other assets and resources available to the ~~Portfolio (i) during~~ LLP, the ~~period from and including~~ Asset Coverage Test is met on the ~~Fourth Issuer Closing~~ next Calculation Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the ~~Mortgages Trustee~~LLP, and the ~~Mortgages Trustee~~ LLP shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the ~~Mortgages Trustee~~ LLP of such New Loans and their Related Security would adversely affect the business of the Seller. ~~4.8 On~~ 2.4 The conditions to be met as at each ~~Sale~~ Assignment Date are: (a) there shall have been neither an Abbey Event of Default and service of an Abbey Acceleration Notice nor an LLP Event of Default and service of an LLP Acceleration Notice as at the relevant Assignment Date; (b) the LLP, acting on the advice of the Cash Manager, is not aware, and could not reasonably be expected to be aware, that ~~Funding 1 provides consideration~~ the proposed purchase by the LLP of the relevant Loans and their Related Security on the relevant Assignment Date would adversely affect the then current rating by Moody's, S&P or Fitch of the then-outstanding Covered Bonds; (c) the yield (as calculated below) of the Loans in the Portfolio together with the yield of the Loans to be assigned to the LLP on the relevant Assignment Date (together, for ~~New~~ the purposes of this paragraph (c) of Clause 2.4, the "Relevant Loans") is not less than the weighted average of the Relevant XXXXX Xxxx under the Interest Rate Swaps as at the immediately preceding Swap Calculation Date plus 0.65 per cent. The yield of the Relevant Loans is to be calculated as follows: Where: A = the average Outstanding Principal Balance, on the relevant Assignment Date, of the Relevant Loans B = the weighted average of the Relevant XXXXX Xxxx under the Interest Rate Swaps as at the immediately preceding Swap Calculation Date plus the Floating Rate Payer Spread (as defined in the Interest Rate Swap) on the relevant Assignment Date C = the average Outstanding Principal Balance of the Relevant Loans on the relevant Assignment Date; (d) no Loan that is proposed to be sold to the ~~Mortgages Trustee pursuant to Clause 4.4(a~~LLP on the relevant Assignment Date has an Outstanding Principal Balance of more than £1,000,000; (e) ~~above,~~ if the ~~Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New~~ Loans that are proposed to be sold to the ~~Mortgages Trustee~~ LLP on the relevant ~~Sale Date.~~ Assignment Date include New Loan Types, the LLP has received written confirmation from each of the Rating Agencies that if such New Loan Types were to be sold to the LLP, such sale of the New Loan Types to the LLP would not have an adverse effect on the then-current ratings by Moody's, S&P or Fitch of the then-outstanding Covered Bonds; and (f) no Loan that is proposed to be sold to the LLP on the relevant Assignment Date relates to a Property which is not a residential property. 2.5 The ~~costs~~ obligations of the Seller and the LLP under Clauses 2.1 and 2.2 shall be subject to and conditional upon no Insolvency Event having occurred in relation to the Seller or the LLP which is continuing as at the relevant Assignment Date provided that if any part of the consideration for a sale is satisfied pursuant to Clause 2.6, such condition shall be deemed to be satisfied or waived and, if the sale was in fact made at a time when an Insolvency Event had occurred and was continuing in relation to the Seller, Clause 6.3 shall be applicable on the same basis as if Schedule 1 had contained a Representation and Warranty that no Insolvency Event in relation to the Seller had occurred at such time and that there is a material breach of such ~~independent auditors~~ Representation and Warranty. 2.6 The consideration to be provided by the LLP to the Seller for the sale of a New Portfolio to the LLP on an Assignment Date shall be ~~borne~~ an amount (the Purchase Price) equal to the aggregate of the Outstanding Principal Balance of such Loan or Loans and all Arrears of Interest and Accrued Interest relating thereto. Subject to fulfillment of the conditions referred to in Clauses 2.4 and 2.5, the relevant Purchase Price shall be satisfied by a combination of: (a) a cash payment in Sterling to be made by the LLP in the manner that the Seller directs from the proceeds of the relevant Term Advance made on such Assignment Date (after the exchange of such proceeds into Sterling, if required, pursuant to the relevant Covered Bond Swap(s)) and/or, subject to Clause 2.7, from Available Principal Receipts; and/or (b) the Seller being treated as having made a Capital Contribution in Kind in an amount equal to the difference between the Outstanding Principal Balance of the New ~~Issuer~~ Loans sold by the Seller as at the relevant Assignment Date and the cash payment (if any) made by the LLP in accordance with paragraph (a) of Clause 2.6; and (c) Deferred Consideration (including any Postponed Deferred Consideration) which shall be ~~procured~~ paid by ~~Funding 1)~~the LLP on each LLP Payment Date (provided there are available funds and after the making of any provisions in accordance with normal accounting practice) in accordance with the relevant Priorities of Payments. The Seller shall be paid that part of the relevant Purchase Price constituting the cash payment referred to in paragraph (a) of Clause 2.6 by telegraphic transfer by the LLP on the relevant Assignment Date. 2.7 Subject to clauses 14 and 15 of the LLP Deed, on each LLP Payment Date the LLP may apply Available Principal Receipts towards the purchase of New Loans and their Related Security offered to the LLP by the Seller in accordance with Clauses 2.1 and

Appears in 1 contract

Samples: Mortgage Sale Agreement

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject ~~to fulfilment~~ xx xxxxilment of the conditions set out in ~~Clauses~~ CLAUSES 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in ~~Clause~~ CLAUSE 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages ~~Trustee~~ Trustee, Funding 1 and Funding 1 2 with a copy to each of the Funding 1 Security Trustee and the Funding 2 Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) (i) (in the case of Funding 1) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date and (ii) (in the case of Funding 2) the Funding 2 Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 2 Interest Payment Date after applying all Funding 2 Available Revenue Receipts on that Funding 2 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date ~~will~~ would adversely affect the then current rating by the ~~Ratings~~ Rating Agencies ~~(or~~ of any of ~~them)~~ the Notes of any Funding 1 Issuer or of the ~~Notes~~Master Issuer; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Moody's, A-1 by S&P and F1 by Fitch at the time of, ~~and immediately~~ anx xxxxxiately following, the sale of ~~the~~ New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages ~~Trust~~Trust unless the Rating Agencies have confirmed to Funding 1 and Funding 2 or to the Funding 1 Security Trustee and the Funding 2 Security Trustee that the then current ratings of the Notes of any Funding 1 Issuer or of the Master Issuer will not be reduced, withdrawn of qualified; (f) except where Funding 1 and/or Funding 2 (as applicable) pays amounts to the ~~Mortgages Trustee~~ Seller in consideration of New Loans to be sold to itthe Mortgages Trustee, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Loans in the Portfolio after such purchase calculated on the relevant Sale Date (in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time)) exceeding the product of WAFF and WALS for the Loans in the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least 0.50 per cent. greater than the weighed average of Sterling-LIBOR for three-month sterling deposits as at the previous Funding 2 Interest Payment Date and Sterling-LIBOR for three-month sterling deposits as at the previous Funding 1 Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s) and the Funding 2 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Funding (No. 2) LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 ~~Subject to~~ Subxxxx xx fulfilment of the conditions set out in ~~Clauses~~ CLAUSES 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in ~~Clause~~ CLAUSE 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date ~~will~~ would adversely affect the then current rating by the ~~Ratings~~ Rating Agencies (or any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Moody's, A-1 by S&P and F1 by Fitch at the time of, ~~and immediately~~ axx xxxediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: (A x B)+(C x (D-E+F))+(G x (H+I) -------------------------------- J where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; ; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Mortgages Trustee LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 ~~Subject to~~ Sxxxxxx xo fulfilment of the conditions set out in Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in Clause 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages ~~Trustee~~ Trustee, Funding 1 and Funding 1 2 with a copy to each of the Funding 1 Security Trustee and the Funding 2 Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) (i) (in the case of Funding 1) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date and (ii) (in the case of Funding 2) the Funding 2 Principal Deficiency Ledger (other than the Subordinated Loan Tranche Principal Deficiency Sub-Ledger) shall not have a debit balance as at the most recent Funding 2 Interest Payment Date after applying all Funding 2 Available Revenue Receipts on that Funding 2 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date ~~will~~ would adversely affect the then current rating by the ~~Ratings~~ Rating Agencies ~~(or~~ of any of ~~them)~~ the Notes of any Funding 1 Issuer or of the ~~Notes~~Master Issuer; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Moody's, A-1 by S&P and F1 by Fitch at the time of, ~~and immediately~~ xxx xmmediately following, the sale of ~~the~~ New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than ~~5 per cent.~~ 5% of the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages ~~Trust~~Trust unless the Rating Agencies have confirmed to Funding 1 and Funding 2 or to the Funding 1 Security Trustee and the Funding 2 Security Trustee that the then current ratings of the Notes of any Funding 1 Issuer or of the Master Issuer will not be reduced, withdrawn of qualified; (f) except where Funding 1 and/or Funding 2 (as applicable) pays amounts to the ~~Mortgages Trustee~~ Seller in consideration of New Loans to be sold to itthe Mortgages Trustee on the relevant Sale Date, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed ~~15 per cent.~~ 15% of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Loans in the Portfolio after such purchase calculated on the relevant Sale Date (in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time)) exceeding the product of WAFF and WALS for the Loans in the Portfolio calculated on the most recent Closing Date plus ~~0.25 per cent.~~0.25%; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least ~~0.50 per cent.~~ 0.50% greater than the weighed average of Sterling-LIBOR for three-month sterling deposits as at the previous Funding 2 Interest Payment Date and Sterling-LIBOR for three-month sterling deposits as at the previous Funding 1 Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s) and the Funding 2 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Funding (No. 2) LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. ~~4.1~~ 2.1 Subject to fulfilment of the conditions ~~set out in Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3)~~ and ~~4.4 and the restriction~~ undertakings set out in Clause ~~2.3~~2.4 to 2.8, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice in duplicate on the ~~Mortgages Trustee and Funding 1~~ LLP with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell to the LLP the New Loans and their Related Security in the relevant New Portfolio with full title guarantee (or or, in ~~relation to rights~~ the case of any Scottish Loans and ~~assets~~ their Related Security in the relevant New Portfolio and situated in or governed by the law of ~~Scotland~~ Scotland, with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, ~~if appropriate, Funding 1 has entered into a new swap agreement) to hedge against~~ in the ~~interest rates payable in respect~~ case of ~~such New~~ any Northern Irish Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the their Related Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio ~~from the Seller to the Mortgages Trustee~~ and ~~a certified copy of a notice (the original of which shall be served~~ situated in or governed by the ~~Seller by courier or by special delivery)~~ law of ~~such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated~~ Northern Ireland, as beneficial owner). 2.2 Within three London Business Days of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale receipt of a New ~~Portfolio,~~ Portfolio Notice in duplicate the LLP shall countersign that New Portfolio Notice in duplicate and ~~authorising~~ return one original copy to the ~~execution~~ Seller with a copy to the Security Trustee and ~~performance~~ the LLP agrees subject to the provisions of the ~~Transaction Documents~~ LLP Deed, to ~~which the Seller is party~~purchase with full title guarantee (or, ~~in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended~~ as applicable, with absolute warrandice or ~~rescinded~~ as ~~at the date of the certificate; (vi~~beneficial owner) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant ~~Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish~~ Loans and their Related Security which will be New Loans and their Related Security comprised in the relevant New ~~Portfolio,~~ Portfolio on the date for completion specified in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio ~~subject to~~ Notice. 2.3 If the ~~terms and provisions~~ LLP receives written notification from the Cash Manager that the Adjusted Aggregate Loan Amount is less than the aggregate Sterling Equivalent of the ~~Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or~~Principal Amount Outstanding of all Covered Bonds, as ~~applicable~~determined by the Cash Manager on any Calculation Date, ~~Clause 7.5. (a) The Seller undertakes that from~~ then the ~~relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller~~ LLP shall ~~hold the Title Deeds and Customer Files relating to the New Portfolio that are in~~ at its ~~possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that~~ sole discretion within three ~~(3)~~ London Business Days of receiving such written notice notify the ~~Sale Date~~ Seller requesting that the Seller offer to ~~provide~~ sell to the ~~Mortgages Trustee and~~ LLP in accordance with the ~~Security Trustee with an updated, complete and accurate list~~ provisions of ~~the~~ this Clause 2 sufficient New Loans and their Related Security ~~which comprise~~ on or before the ~~New Portfolio which may be provided in a document stored upon electronic media (including~~next Calculation Date to ensure that, ~~but not limited to a CD-Rom) in a form acceptable~~ taking into account the other assets and resources available to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan AgreementLLP, the ~~Interest Payment~~ Asset Coverage Test is met on the next Calculation Date ~~in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller~~ and ~~the Mortgages Trustee as applying in relation to this covenant,~~ the Seller undertakes to use all reasonable endeavours to offer to ~~sell, in accordance with the provisions of this Clause 4,~~ sell to the ~~Mortgages Trustee~~ LLP and the ~~Mortgages Trustee~~ LLP undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so ~~that~~ that, taking into account the ~~aggregate Outstanding Principal Balance of Loans in~~ other assets and resources available to the ~~Portfolio (i) during~~ LLP, the ~~period from and including~~ Asset Coverage Test is met on the ~~Fourth Issuer Closing~~ next Calculation Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the ~~Mortgages Trustee~~LLP, and the ~~Mortgages Trustee~~ LLP shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the ~~Mortgages Trustee~~ LLP of such New Loans and their Related Security would adversely affect the business of the Seller. ~~4.8 On~~ 2.4 The conditions to be met as at each ~~Sale~~ Assignment Date are: (a) there shall have been neither an Abbey Event of Default and service of an Abbey Acceleration Notice nor an LLP Event of Default and service of an LLP Acceleration Notice as at the relevant Assignment Date; (b) the LLP, acting on the advice of the Cash Manager, is not aware, and could not reasonably be expected to be aware, that ~~Funding 1 provides consideration for New~~ the proposed purchase by the LLP of the relevant Loans and their Related Security on the relevant Assignment Date would adversely affect the then current rating by Xxxxx'x, S&P or Fitch of the then-outstanding Covered Bonds; (c) the yield (as calculated below) of the Loans in the Portfolio together with the yield of the Loans to be ~~sold~~ assigned to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee LLP on the relevant ~~Sale Date~~Assignment Date (together, for the purposes of this paragraph (c) of Clause 2.4, the "Relevant Loans") is not less than the weighted average of LIBOR for Sterling deposits under the Interest Rate Swaps as at the immediately preceding Calculation Date plus 0.50 per cent. The ~~costs~~ yield of ~~such independent auditors shall~~ the Relevant Loans is to be ~~borne by the relevant New Issuer~~ calculated as follows: (~~which shall be procured by Funding 1~~A × B) + (C × (D - E + F).) + (G × (H + I))

Appears in 1 contract

Samples: Mortgage Sale Agreement

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions set out in ~~Clauses~~ CLAUSES 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in ~~Clause~~ CLAUSE 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date ~~will~~ would adversely affect the then current rating by the ~~Ratings~~ Rating Agencies of the Notes (or any of them~~) of the Notes~~); (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Xxxxx'x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the ~~Mortgages Trustee~~ Seller in consideration of New Loans to be sold to itthe Mortgages Trustee, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: (A x B)+(C x(D-E+F))+(G x(H+I)) ------------------------------- J where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans ~~comprising~~ comprised in the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this ~~Clause~~ CLAUSE 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under ~~Clause~~ CLAUSE 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in ~~Clauses~~ CLAUSES 4.2, 4.3, ~~4.4~~ 4.4, 4.5 and 4.6, the consideration to be provided to the Seller for the sale and assignment of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust for the Seller (as to the Seller Share) and Funding 1 (as to the Funding 1 Share) pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in ~~Schedule~~ SCHEDULE 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in ~~Schedule~~ SCHEDULE 8 and ~~Schedule~~ SCHEDULE 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.4(A) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in ~~Clause 3.1(a)(v~~CLAUSE 3.1(A)(V) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.4(A) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of ~~the~~ any Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in ~~Schedule~~ SCHEDULE 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s 's right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this ~~Clause~~ CLAUSE 4 PROVIDED THAT the matters described in ~~Clauses~~ CLAUSES 6.6 and 6.5 shall not occur until the relevant time indicated in ~~Clause~~ CLAUSE 6 or, as applicable, ~~Clause 7.5~~CLAUSE 7. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with ~~Clauses~~ CLAUSES 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Mortgages Trustee LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. ~~4.1~~ 2.1 Subject to fulfilment of the conditions ~~set out in Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3)~~ and ~~4.4 and the restriction~~ undertakings set out in Clause ~~2.3~~2.4 to 2.8, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice in duplicate on the ~~Mortgages Trustee and Funding 1~~ LLP with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell to the LLP the New Loans and their Related Security in the relevant New Portfolio with full title guarantee (or or, in ~~relation to rights~~ the case of any Scottish Loans and ~~assets~~ their Related Security in the relevant New Portfolio and situated in or governed by the law of ~~Scotland~~ Scotland, with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, ~~if appropriate, Funding 1 has entered into a new swap agreement) to hedge against~~ in the ~~interest rates payable in respect~~ case of ~~such New~~ any Northern Irish Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the their Related Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio ~~from the Seller to the Mortgages Trustee~~ and ~~a certified copy of a notice (the original of which shall be served~~ situated in or governed by the ~~Seller by courier or by special delivery)~~ law of ~~such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated~~ Northern Ireland, as beneficial owner). 2.2 Within three London Business Days of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale receipt of a New ~~Portfolio,~~ Portfolio Notice in duplicate the LLP shall countersign that New Portfolio Notice in duplicate and ~~authorising~~ return one original copy to the ~~execution~~ Seller with a copy to the Security Trustee and ~~performance~~ the LLP agrees subject to the provisions of the ~~Transaction Documents~~ LLP Deed, to ~~which the Seller is party~~purchase with full title guarantee (or, ~~in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended~~ as applicable, with absolute warrandice or ~~rescinded~~ as ~~at the date of the certificate; (vi~~beneficial owner) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant ~~Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish~~ Loans and their Related Security which will be New Loans and their Related Security comprised in the relevant New ~~Portfolio,~~ Portfolio on the date for completion specified in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio ~~subject to~~ Notice. 2.3 If the ~~terms and provisions~~ LLP receives written notification from the Cash Manager that the Adjusted Aggregate Loan Amount is less than the aggregate Sterling Equivalent of the ~~Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or~~Principal Amount Outstanding of all Covered Bonds, as ~~applicable~~determined by the Cash Manager on any Calculation Date, ~~Clause 7.5. (a) The Seller undertakes that from~~ then the ~~relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller~~ LLP shall ~~hold the Title Deeds and Customer Files relating to the New Portfolio that are in~~ at its ~~possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that~~ sole discretion within three ~~(3)~~ London Business Days of receiving such written notice notify the ~~Sale Date~~ Seller requesting that the Seller offer to ~~provide~~ sell to the ~~Mortgages Trustee and~~ LLP in accordance with the ~~Security Trustee with an updated, complete and accurate list~~ provisions of ~~the~~ this Clause 2 sufficient New Loans and their Related Security ~~which comprise~~ on or before the ~~New Portfolio which may be provided in a document stored upon electronic media (including~~next Calculation Date to ensure that, ~~but not limited to a CD-Rom) in a form acceptable~~ taking into account the other assets and resources available to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan AgreementLLP, the ~~Interest Payment~~ Asset Coverage Test is met on the next Calculation Date ~~in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller~~ and ~~the Mortgages Trustee as applying in relation to this covenant,~~ the Seller undertakes to use all reasonable endeavours to offer to ~~sell, in accordance with the provisions of this Clause 4,~~ sell to the ~~Mortgages Trustee~~ LLP and the ~~Mortgages Trustee~~ LLP undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so ~~that~~ that, taking into account the ~~aggregate Outstanding Principal Balance of Loans in~~ other assets and resources available to the ~~Portfolio (i) during~~ LLP, the ~~period from and including~~ Asset Coverage Test is met on the ~~Fourth Issuer Closing~~ next Calculation Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the ~~Mortgages Trustee~~LLP, and the ~~Mortgages Trustee~~ LLP shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the ~~Mortgages Trustee~~ LLP of such New Loans and their Related Security would adversely affect the business of the Seller. ~~4.8 On~~ 2.4 The conditions to be met as at each ~~Sale~~ Assignment Date are: (a) there shall have been neither an Abbey Event of Default and service of an Abbey Acceleration Notice nor an LLP Event of Default and service of an LLP Acceleration Notice as at the relevant Assignment Date; (b) the LLP, acting on the advice of the Cash Manager, is not aware, and could not reasonably be expected to be aware, that ~~Funding 1 provides consideration~~ the proposed purchase by the LLP of the relevant Loans and their Related Security on the relevant Assignment Date would adversely affect the then current rating by Moody's, S&P or Fitch of the then-outstanding Covered Bonds; (c) the yield (as calculated below) of the Loans in the Portfolio together with the yield of the Loans to be assigned to the LLP on the relevant Assignment Date (together, for ~~New~~ the purposes of this paragraph (c) of Clause 2.4, the "Relevant Loans") is not less than the weighted average of the Relevant XXXXX Xxxx under the Interest Rate Swaps as at the immediately preceding Swap Calculation Date plus 0.65 per cent. The yield of the Relevant Loans is to be calculated as follows: A × B Where: A = the average Outstanding Principal Balance, on the relevant Assignment Date, of the Relevant Loans B = the weighted average of the Relevant XXXXX Xxxx under the Interest Rate Swaps as at the immediately preceding Swap Calculation Date plus the Floating Rate Payer Spread (as defined in the Interest Rate Swap) on the relevant Assignment Date C = the average Outstanding Principal Balance of the Relevant Loans on the relevant Assignment Date; (d) no Loan that is proposed to be sold to the ~~Mortgages Trustee pursuant to Clause 4.4(a~~LLP on the relevant Assignment Date has an Outstanding Principal Balance of more than £1,000,000; (e) ~~above,~~ if the ~~Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New~~ Loans that are proposed to be sold to the ~~Mortgages Trustee~~ LLP on the relevant ~~Sale Date.~~ Assignment Date include New Loan Types, the LLP has received written confirmation from each of the Rating Agencies that if such New Loan Types were to be sold to the LLP, such sale of the New Loan Types to the LLP would not have an adverse effect on the then-current ratings by Moody's, S&P or Fitch of the then-outstanding Covered Bonds; and (f) no Loan that is proposed to be sold to the LLP on the relevant Assignment Date relates to a Property which is not a residential property. 2.5 The ~~costs~~ obligations of the Seller and the LLP under Clauses 2.1 and 2.2 shall be subject to and conditional upon no Insolvency Event having occurred in relation to the Seller or the LLP which is continuing as at the relevant Assignment Date provided that if any part of the consideration for a sale is satisfied pursuant to Clause 2.6, such condition shall be deemed to be satisfied or waived and, if the sale was in fact made at a time when an Insolvency Event had occurred and was continuing in relation to the Seller, Clause 6.3 shall be applicable on the same basis as if Schedule 1 had contained a Representation and Warranty that no Insolvency Event in relation to the Seller had occurred at such time and that there is a material breach of such ~~independent auditors~~ Representation and Warranty. 2.6 The consideration to be provided by the LLP to the Seller for the sale of a New Portfolio to the LLP on an Assignment Date shall be ~~borne~~ an amount (the Purchase Price) equal to the aggregate of the Outstanding Principal Balance of such Loan or Loans and all Arrears of Interest and Accrued Interest relating thereto. Subject to fulfillment of the conditions referred to in Clauses 2.4 and 2.5, the relevant Purchase Price shall be satisfied by a combination of: (a) a cash payment in Sterling to be made by the LLP in the manner that the Seller directs from the proceeds of the relevant Term Advance made on such Assignment Date (after the exchange of such proceeds into Sterling, if required, pursuant to the relevant Covered Bond Swap(s)) and/or, subject to Clause 2.7, from Available Principal Receipts; and/or (b) the Seller being treated as having made a Capital Contribution in Kind in an amount equal to the difference between the Outstanding Principal Balance of the New ~~Issuer~~ Loans sold by the Seller as at the relevant Assignment Date and the cash payment (if any) made by the LLP in accordance with paragraph (a) of Clause 2.6; and (c) Deferred Consideration (including any Postponed Deferred Consideration) which shall be ~~procured~~ paid by ~~Funding 1)~~the LLP on each LLP Payment Date (provided there are available funds and after the making of any provisions in accordance with normal accounting practice) in accordance with the relevant Priorities of Payments. The Seller shall be paid that part of the relevant Purchase Price constituting the cash payment referred to in paragraph (a) of Clause 2.6 by telegraphic transfer by the LLP on the relevant Assignment Date. 2.7 Subject to clauses 14 and 15 of the LLP Deed, on each LLP Payment Date the LLP may apply Available Principal Receipts towards the purchase of New Loans and their Related Security offered to the LLP by the Seller in accordance with Clauses 2.1 and

Appears in 1 contract

Samples: Mortgage Sale Agreement

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions set out in ~~Clauses~~ CLAUSES 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in ~~Clause~~ CLAUSE 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights ~~and assets~~ situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant ~~Sale~~ Assignment Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Mxxxx'x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant ~~Sale Date~~ SaleDate in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: (A x B) + (C x (D-E+F)) + (G x (H + I)) --------------------------------------- J where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than ~~Sterling-~~Sterling- LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this ~~Clause~~ CLAUSE 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under ~~Clause~~ CLAUSE 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in ~~Clauses~~ CLAUSES 4.2, 4.3, 4.4 ~~4.5~~ and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans~~: (A)~~ , two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 ~~hereof~~ duly executed by the Seller~~; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements~~; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.4(A) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in ~~Clause 3.1(a)(v~~CLAUSE 3.1(A)(V) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to ~~Clause 4.4(a~~CLAUSE 4.4(A) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s 's right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this ~~Clause~~ CLAUSE 4 PROVIDED THAT the matters described in ~~Clauses~~ CLAUSES 6.6 and 6.5 shall not occur until the relevant time indicated in ~~Clause~~ CLAUSE 6 or, as applicable, ~~Clause 7.5~~CLAUSE 7. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Mortgages Trustee LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions set out in Clauses 2.2, 3.1, 4.2 ~~(or as applicable,~~ and 4.3~~) and 4.4 and the restriction set out in Clause 2.3~~, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), ~~the Seller agrees that~~ then on the date for completion of the sale and assignment specified in ~~such~~ the New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of ~~Scotland~~ Scotland, with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each ~~Sale~~ Assignment Date are: (a) ~~no event of default under~~ the ~~Transaction Documents~~ Seller shall ~~have occurred which is continuing~~ as at the relevant ~~Sale~~ Assignment Date make the Representations and Warranties to the Mortgages Trustee, Funding and the Security Trustee in relation to each New Loan in the New Portfolio being sold on the relevant Assignment Date in accordance with Clause 8 and such Representations and Warranties must be true in relation to each New Loan (but if such Representation and Warranties are only discovered to be untrue after the relevant Assignment Date, the Mortgages Trustee's and Funding's only remedy shall be under Clause 7); (b) the ~~Principal Deficiency Ledger shall not have a debit balance as~~ Lending Criteria applicable at the ~~most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date~~time of origination of each relevant New Loan have been applied to the New Loan and to the circumstances of the Borrower at the time the New Loan was made; (c) the total amount of arrears in respect of all the Loans in the Mortgages Trust, as a percentage of the total amount of gross interest due to the Mortgages Trustee is during the previous 12 months on all Loans outstanding during all or part of such period, must not ~~aware that~~ exceed 2 per cent. Arrears for this purpose in respect of a Loan on any date means the ~~purchase of the New Portfolio~~ aggregate amount overdue on the ~~relevant Sale Date will adversely affect~~ Loan on that date but only where such aggregate amount overdue equals or exceeds an amount equal to twice the Monthly Payment then ~~current rating by~~ due on the ~~Ratings Agencies (or any of them) of the Notes~~Loan; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Assignment Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 4 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (e) no New Loan has on the relevant Assignment Date an aggregate amount in arrear which is more than the amount of the Monthly Payment then due and each New Loan was made at least three calendar months prior to the relevant Assignment Date; (f) each New Loan is secured by a Mortgage constituting a valid and subsisting first charge by way of legal mortgage or first ranking standard security over the relevant Property (except in the case of some Flexible Loans in respect of which the Mortgage constitutes valid and subsisting first and second charges by way of legal mortgage or first and second ranking standard securities over the relevant Property), subject only (in appropriate cases) to registration or recording at the Land Registry or the Registers of Scotland; (g) no Outstanding Principal Balance of any New Loan is, at the relevant Assignment Date, greater than £750,000; (h) for so long as amounts are owed by Funding to the First Issuer under the First Intercompany Loan Agreement, no New Loan has a final maturity date beyond July, 2038; (i) each Borrower has made at least one full Monthly Payment in respect of the relevant New Loan; (j) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Assignment Date; (k) the Principal Deficiency Ledger shall not have a debit balance as at the relevant Assignment Date; (l) the Mortgages Trustee is not aware that the credit rating then assigned to any of the Notes by the Ratings Agencies (or any of them) will be adversely affected by the purchase of the relevant New Portfolio; (m) unless otherwise agreed by the relevant Rating Agency, the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are rated at least P-1 by Mxxxx'x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the assignment of the New Loans to the Mortgages Trustee; (n) except where ~~Funding 1 pays amounts~~ the Seller assigns New Loans to the Mortgages Trustee in consideration of the payment by Funding of the Purchase Price funded by a New ~~Loans to be sold to it~~Intercompany Loan from an Issuer, ~~the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15~~ at least 85 per cent. of the ~~aggregate Outstanding Principal Balance~~ number of Loans ~~(excluding Arrears of Interest)~~ and their Related Security in the ~~Mortgages Trust~~ Portfolio at the expiry of any one Interest Period shall have been in the Portfolio as at the beginning of ~~that~~ such Interest Period; (go) the ~~sale~~ purchase of the New Portfolio on the relevant ~~Sale~~ Assignment Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant ~~Sale~~ Assignment Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent previous Closing Date plus 0.25 per cent.; (hp) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be ~~sold~~ assigned to the Mortgages Trustee on the relevant ~~Sale~~ Assignment Date (together ~~for~~ the purposes of this paragraph, the Relevant Loans) and the Second Reserve Fund Calculation is ~~at least 0.50 per cent. greater~~ not less than ~~Sterling-~~LIBOR for ~~three-~~three month sterling deposits as at the ~~previous~~ immediately preceding Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale DateDate plus 0.50 per cent. The yield of the Relevant Loans is to be calculated as follows: where~~, (A)~~ , A = the average Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Fixed Rate ~~Loans;~~ Loans B = LIBOR plus the Fixed Rate Spread (Bas defined in the Funding Swap Agreement) on the relevant Assignment Date C = the ~~interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the~~ average Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Variable Rate ~~Loans; (D)~~ Loans D = the weighted average Variable ~~Base~~ Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant ~~Sale~~ Assignment Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Holmes Funding LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions set out in Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in Clause 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date ~~will~~ would adversely affect the then current rating by the ~~Ratings~~ Rating Agencies of the Notes (or any of them~~) of the Notes~~); (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Xxxxx'x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the ~~Mortgages Trustee~~ Seller in consideration of New Loans to be sold to itthe Mortgages Trustee, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date (in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time)) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: (A x B)+(C x (D--E+F))+(G x (H+I)) ---------------------------------- J where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed---Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans ~~comprising~~ comprised in the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, ~~4.4~~ 4.4, 4.5 and 4.6, the consideration to be provided to the Seller for the sale and assignment of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust for the Seller (as to the Seller Share) and Funding 1 (as to the Funding 1 Share) pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of ~~the~~ any Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s 's right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in ~~June 2008~~December 2011; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in ~~June 2008~~ December 2011 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the ~~Fourth~~ Seventh Issuer Closing Date up to ~~and~~ but excluding the Funding ~~1Interest~~ 1 Interest Payment ~~date~~ Date in ~~June 2006~~ March 2008 is not less than ~~£21,500,000,000~~ [GBP]27,000,000,000 and (ii) during the period from and including the interest payment date in ~~June 2006~~ March 2008 to but excluding the ~~Funding 1 Interest Payment Date~~ interest payment date in ~~June 2008~~ September 2009 is not less than ~~£15,750,000,000 before June 2008~~ [GBP]24,000,000,000 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Mortgages Trustee LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions and undertakings set out in Clauses ~~2.2, 3.1, 4.2 (or as applicable, 4.3) and~~ 4.4 ~~and the restriction set out in Clause 2.3,~~ to 4.8 if the ~~Seller shall~~Seller, at any time and from time to time ~~serve~~ serves a properly completed New Portfolio Notice in duplicate on the ~~Mortgages Trustee and Funding 1~~ Fund with a copy to the ~~Security Trustee~~ Representative (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall ~~sell~~ sell, with full title ~~guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice)~~ guarantee, to the ~~Mortgages Trustee~~ Fund the New Loans and their Related Security in the relevant New Portfolio. 4.2 Within three Business Days of receipt of a New Portfolio Notice in duplicate the Fund shall countersign that New Portfolio Notice in duplicate and return one original copy to the Seller with a copy to the Representative and the Fund agrees subject to the provisions of the Fund Deed to purchase, with full title guarantee, the relevant Loans and their Related Security which will be New Loans and their Related Security comprised in the relevant New Portfolio on the date for completion specified in the relevant New Portfolio Notice. 4.3 If at any time prior to the earlier to occur of: (a) an Issuer Event of Default; and (b) a Fund Event of Default, the Fund receives written notification from the Cash Manager that the Adjusted Aggregate Loan Amount is less than the aggregate ISK Equivalent of the Principal Amount Outstanding of all Covered Bonds, as determined by the Cash Manager on any Calculation Date, then the Fund shall, at its sole discretion, within three Business Days of receiving such written notice notify the Seller requesting that the Seller offer to sell, in accordance with the provisions of this Clause 4, to the Fund sufficient New Loans and their Related Security on or before the next Calculation Date to ensure that, taking into account the other assets and resources available to the Fund, the Asset Coverage Test is met on the next Calculation Date and the Seller undertakes to use all reasonable endeavours to offer to sell to the Fund and the Fund undertakes to use all reasonable endeavours to acquire from the Seller sufficient New Loans and their Related Security so that, taking into account the other assets and resources available to the Fund, the Asset Coverage Test is met on the next Calculation Date provided that the Seller shall not be obliged to sell to the Fund, and the Fund shall not be obliged to buy, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Fund of such New Loans and their Related Security would adversely affect the business of the Seller. 4.4 The conditions to be met ~~as at~~ on each ~~Sale~~ Assignment Date are: (a) ~~no event of default under the Transaction Documents~~ there shall have ~~occurred which is continuing~~ been neither an Issuer Event of Default and service of an Issuer Acceleration Notice nor a Fund Event of Default and service of a Fund Acceleration Notice as at the relevant ~~Sale~~ Assignment Date; (b) no Loan that is proposed to be sold to the ~~Principal Deficiency Ledger shall not have~~ Fund on the relevant Assignment Date has a ~~debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date~~loan-to- value ratio of more than 80 per cent; (c) no Loan that is proposed to be sold to the ~~Mortgages Trustee is not aware that the purchase of the New Portfolio~~ Fund on the relevant ~~Sale~~ Assignment Date ~~will adversely affect the then current rating by the Ratings Agencies (or any~~ has, on such Assignment Date, an Outstanding Principal Balance of ~~them) of the Notes~~more than ISK 100,000,000; (d) ~~as at~~ no Loan that is proposed to be sold to the Fund on the relevant ~~Sale Date,~~ Assignment Date relates to a Property which is not a residential Property and each Property is the ~~Seller has not received any notice that the short term, unsecured, unguaranteed~~ primary residence of each Borrower and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trusteeis owner-occupied; (e) ~~as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears~~ no Loan that is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans proposed to be sold to the ~~Mortgages Trustee~~ Fund on the relevant ~~Sale~~ Assignment Date ~~(together~~ is currently in default for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over 90 days or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loanmore; and (pf) ~~no Trigger Event has occurred on~~ the Seller has, since the making of each Loan, kept or ~~before~~ procured the ~~relevant Sale Date~~keeping of full and proper accounts, books and records showing clearly all transactions, payments, receipts, proceedings and notices relating to such Loan. ~~In this Clause 4.2 references to any Monthly Payment due at any date means~~ Notwithstanding the ~~Monthly Payment payable in respect of~~ foregoing, the ~~month in which that date falls~~Representative may waive or amend the above conditions. ~~4.3~~ 4.5 The obligations of the Seller and the Fund under ~~Clause~~ Clauses 4.1 and 4.2 shall be subject to and conditional upon no Insolvency Event having occurred in relation to the Seller or the Fund which is continuing as at the relevant ~~Sale Date~~Assignment Date provided that if any part of the consideration for a sale is satisfied pursuant to Clause 4.6, such condition shall be deemed to be satisfied or waived and, if the sale was in fact made at a time when an Insolvency Event had occurred and was continuing in relation to the Seller, Clause 7.5 shall be applicable on the same basis as if Schedule 1 had contained a Representation and Warranty that no Insolvency Event in relation to the Seller had occurred at such time and that there is a material breach of such Representation and Warranty. ~~4.4~~ 4.6 Subject to fulfilment of the conditions referred to in Clauses ~~4.2, 4.3,~~ 4.4 ~~4.5~~ and ~~4.6~~4.5, the ~~consideration~~ relevant Purchase Price to be provided to the Seller for the sale of ~~the~~ a New Portfolio to the ~~Mortgages Trustee~~ Fund on ~~a Sale~~ an Assignment Date shall be ~~the aggregate~~ satisfied by a combination of: (a) a cash payment to be made by the ~~payment by Funding 1 to~~ Fund in the ~~Seller by telegraphic transfer on the relevant Sale Date~~ ISK Equivalent of the proceeds of ~~any New Intercompany Loan advanced~~ the relevant Term Advance made on such Assignment Date and/or, subject to ~~Funding 1 by a New Issuer~~Clause 4.7, from Available Receipts; and/or (b) the ~~covenant~~ Seller being treated as having made an Equity Contribution in Kind in an amount equal to the difference between the Outstanding Principal Balance of the ~~Mortgages Trustee~~ New Loans sold by the Seller as at the relevant Assignment Date and the cash payment (if any) made by the Fund in accordance with Clause 4.6(a). The Seller shall be paid that part of the relevant Purchase Price constituting the cash payment referred to ~~hold~~ in Clause 4.6(a) by bank account transfer by the ~~Trust Property~~ Fund on ~~trust pursuant~~ the relevant Assignment Date. 4.7 Subject to Clause 11 of the Fund Deed, on each Fund Payment Date the Fund may apply Available Receipts towards the purchase of New Loans and their Related Security offered to the ~~terms~~ Fund by the Seller in accordance with Clauses 4.1 and 4.2 and/or Substitution Assets (in respect of any Substitution Assets up to the ~~Mortgages Trust Deed~~prescribed limit) in an amount sufficient to ensure that taking into account the other assets and resources available to the Fund, the Fund is in compliance with the Asset Coverage Test. ~~(a)~~ 4.8 On the date of the ~~sale~~ assignment of ~~the relevant~~ any New ~~Portfolio~~ Portfolio, the Seller shall deliver to the ~~Security Trustee~~ Representative, or ~~its representative~~ any party nominated by the Representative, the following documents: (ia) in respect of the first New Portfolio assigned on or after the date of ~~the first sale of a relevant New Portfolio including Scottish Loans: (A)~~ this Agreement only, two originals of the power of attorney ~~dated as at the Sale Date and~~ substantially in the form set out in Schedule ~~5 hereof~~ 3, duly executed by the ~~Seller~~Seller or its properly appointed attorney; (Bb) a certified copy of ~~each of~~ the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer board minutes of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives ~~to agree the sale of a New Portfolio, and~~ authorising ~~the~~ execution and performance of this Agreement and the other Transaction Documents to which the Seller is ~~party,~~ a party (in ~~each case confirming that the resolutions referred to therein are in full force~~ any capacity) and ~~effect and have not been amended or rescinded as at the date~~ all of the ~~certificate~~documentation to be entered into pursuant to this Agreement; (vic) ~~on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only,~~ a solvency certificate ~~from an~~ signed by at least one authorised signatory of the Seller dated as at the relevant ~~Sale~~ Assignment Date, but only in the event that: (i) the relevant Assignment Date is also an Issue Date; ~~and~~ and/or (~~vii~~ii) a ~~Scottish Declaration~~ solvency certificate has not been delivered by the Seller in the three months prior to the relevant Assignment Date; and/or (iii) if an Issuer Event of ~~Trust in respect~~ Default has occurred but no liquidator or administrator has been appointed. Within three Business Days of the ~~Scottish~~ relevant Assignment Date the Seller undertakes to provide the Fund and the Representative with an updated, complete and accurate list of the New Loans and their Related Security ~~comprised in~~ that comprise the relevant New Portfolio~~, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1~~. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) 4.9 The Seller undertakes that from the relevant ~~Sale~~ Assignment Date until the perfection of the ~~assignment or assignation (as appropriate)~~ sale and purchase in accordance with ~~Clauses 6.2 and 6.5~~Clause 6, the Seller shall hold the ~~Title Deeds and~~ Customer Files relating to ~~the~~ each New Loan in a New Portfolio assigned by it on the relevant Assignment Date that are in its possession or under its control or held to its order to the order of the ~~Mortgages Trustee~~ Representative, or as the ~~Mortgages Trustee~~ Representative shall otherwise direct~~. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated~~, ~~complete and accurate list of the Loans and their Related Security which comprise the~~ whilst such New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans remains in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the SellerPortfolio. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject ~~to fulfilment~~ xx xxxxilment of the conditions set out in Clauses 2.2, 3.1, 4.2 ~~(or as applicable,~~ and 4.3~~) and 4.4 and the restriction set out in Clause 2.3~~, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), ~~the Seller agrees that~~ then on the date for completion of the sale and assignment specified in ~~such~~ the New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of ~~Scotland~~ Scotland, with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each ~~Sale~~ Assignment Date are: (a) ~~no event of default under~~ the ~~Transaction Documents~~ Seller shall ~~have occurred which is continuing~~ as at the relevant ~~Sale~~ Assignment Date make the Representations and Warranties to the Mortgages Trustee, Funding and the Security Trustee in relation to each New Loan in the New Portfolio being sold on the relevant Assignment Date in accordance with Clause 8 and such Representations and Warranties must be true in relation to each New Loan (but if such Representation and Warranties are only discovered to be untrue after the relevant Assignment Date, the Mortgages Trustee's and Funding's only remedy shall be under Clause 7); (b) the ~~Principal Deficiency Ledger shall not have a debit balance as~~ Lending Criteria applicable at the ~~most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date~~time of origination of each relevant New Loan have been applied to the New Loan and to the circumstances of the Borrower at the time the New Loan was made; (c) the total amount of arrears in respect of all the Loans in the Mortgages Trust, as a percentage of the total amount of gross interest due to the Mortgages Trustee is during the previous 12 months on all Loans outstanding during all or part of such period, must not ~~aware that~~ exceed 2 per cent. ARREARS for this purpose in respect of a Loan on any date means the ~~purchase of the New Portfolio~~ aggregate amount overdue on the ~~relevant Sale Date will adversely affect~~ Loan on that date but only where such aggregate amount overdue equals or exceeds an amount equal to twice the Monthly Payment then ~~current rating by~~ due on the ~~Ratings Agencies (or any of them) of the Notes~~Loan; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Assignment Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 4 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (e) no New Loan has on the relevant Assignment Date an aggregate amount in arrear which is more than the amount of the Monthly Payment then due and each New Loan was made at least three calendar months prior to the relevant Assignment Date; (f) each New Loan is secured by a Mortgage constituting a valid and subsisting first charge by way of legal mortgage or first ranking standard security over the relevant Property (except in the case of some Flexible Loans in respect of which the Mortgage constitutes valid and subsisting first and second charges by way of legal mortgage or first and second ranking standard securities over the relevant Property), subject only (in appropriate cases) to registration or recording at the Land Registry or the Registers of Scotland; (g) no Outstanding Principal Balance of any New Loan is, at the relevant Assignment Date, greater than (pound)350,000; (h) for so long as amounts are owed by Funding to the First Issuer under the First Intercompany Loan Agreement, no New Loan has a final maturity date beyond July, 2038; (i) each Borrower has made at least one full Monthly Payment in respect of the relevant New Loan; (j) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Assignment Date; (k) the Principal Deficiency Ledger shall not have a debit balance as at the relevant Assignment Date; (l) the Mortgages Trustee is not aware that the credit rating then assigned to any of the Notes by the Ratings Agencies (or any of them) will be adversely affected by the purchase of the relevant New Portfolio; (m) unless otherwise agreed by the relevant Rating Agency, the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are rated at least P-1 by Moody's, A-1 by S&P and F1 by Fitch at the time of, and xxxxxxately following, the assignment of the New Loans to the Mortgages Trustee; (n) except where ~~Funding 1 pays amounts~~ the Seller assigns New Loans to the Mortgages Trustee in consideration of the payment by Funding of the Purchase Price funded by a New ~~Loans to be sold to it~~Intercompany Loan from an Issuer, ~~the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15~~ at least 85 per cent. of the ~~aggregate Outstanding Principal Balance~~ number of Loans ~~(excluding Arrears of Interest)~~ and their Related Security in the ~~Mortgages Trust~~ Portfolio at the expiry of any one Interest Period shall have been in the Portfolio as at the beginning of ~~that~~ such Interest Period; (go) the ~~sale~~ purchase of the New Portfolio on the relevant ~~Sale~~ Assignment Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant ~~Sale~~ Assignment Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent previous Closing Date plus 0.25 per cent.; (hp) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be ~~sold~~ assigned to the Mortgages Trustee on the relevant ~~Sale~~ Assignment Date (together ~~for~~ the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) and the Second Reserve Fund Calculation is ~~at least 0.50 per cent. greater~~ not less than ~~Sterling-~~LIBOR for ~~three-~~three month sterling deposits as at the ~~previous~~ immediately preceding Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale DateDate plus 0.50 per cent. The yield of the Relevant Loans is to be calculated as follows: (A x B) + (C x (D - E + F)) + (G x (H + I)) ------------------------------------------- J where~~, (A)~~ , A = the average Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Fixed Rate ~~Loans;~~ Loans B = LIBOR plus the Fixed Rate Spread (Bas defined in the Funding Swap Agreement) on the relevant Assignment Date C = the ~~interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the~~ average Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Variable Rate ~~Loans; (D)~~ Loans D = the weighted average Variable ~~Base~~ Rate of the Relevant Loans ~~which are Variable Rate Loans~~ on the relevant ~~Sale Date; (E)~~ Assignment Date E = the ~~Variable Rate Swap~~ current SVR for the Relevant Loans ~~which are Variable Rate Loans~~ on the relevant ~~Sale Date;~~ Assignment Date F = LIBOR plus the Variable Rate Spread (Fas defined in the Funding Swap Agreement) on the relevant Assignment Date G = the ~~interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the~~ average Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Tracker ~~Rate Loans; (H)~~ Loans H = ~~the interest rate receivable by Funding 1 under~~ LIBOR plus the Tracker Rate Spread (as defined in the Funding Swap ~~as at~~ Agreement) on the relevant ~~Sale Date; (I)~~ Assignment Date I = the weighted average margin of the ~~Relevant Loans which are~~ Tracker ~~Rate~~ Loans over ~~or under~~ the Bank of England ~~Repo Rate~~ repo rate on the ~~relevant Sale Date; (J)~~ Relevant Assignment Date J = the average Outstanding Principal Balance of the Relevant Loans on the relevant ~~Sale~~ Assignment Date; (iq) the ~~sale~~ purchase of the New ~~Loans~~ Portfolio on the relevant ~~Sale~~ Assignment Date does not result in the loan-to-value ratio of Loans in the ~~Loans and~~ Portfolio on the Assignment Date (after the purchase of the New ~~Loans~~ Portfolio) after application of the LTV Test on the relevant ~~Sale~~ Assignment Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent previous Closing Date plus 0.25 per cent.; (jr) the ~~sale~~ assignment by the Seller to the Mortgages Trustee of ~~the~~ New Loans on the relevant ~~Sale~~ Assignment Date does not result in the Loans (other than Fixed Rate Loans) ~~which after taking into account the Funding 1 Swap will yield less~~ with a discount of more than ~~Sterling-LIBOR plus 0.50~~ 0.80 per cent. to the Stabilised Rate as at the relevant ~~Sale~~ Assignment Date ~~and~~ that have more than 2 two years remaining on their incentive period in aggregate accounting for more than 15 20 per cent. of the aggregate Outstanding Principal Balance of all Loans ~~comprising~~ constituting the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (ps) ~~no Trigger Event~~ the First Reserve Fund has ~~occurred~~ not been debited on or before the relevant ~~Sale~~ Assignment Date for the purposes of curing a Principal Deficiency in respect of the Term BBB Advances and/or the Term AA Advances and/or the Term A Advances in circumstances where the First Reserve Fund has not been replenished by a corresponding amount by the relevant Assignment Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 ~~The obligations~~ No assignment of a New Portfolio may occur after any Interest Payment Date on which any Issuer does not exercise its option to redeem the relevant Notes issued on the relevant date pursuant to the Terms and Conditions of such Notes (but only where such right of redemption arises on or after a particular specified date and not as a result of the ~~Seller under Clause 4.1 shall be subject to~~ occurrence of any event specified in the Terms and ~~conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date~~Conditions). 4.4 Subject to fulfilment of the conditions referred to in ~~Clauses 4.2,~~ Clause 4.2 and 4.3~~, 4.4 4.5 and 4.6~~, the consideration to be provided to the Seller ~~for~~ by the ~~sale~~ assignment of the New Portfolio to the Mortgages Trustee on ~~a Sale~~ an Assignment Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the ~~relevant Sale~~ New Portfolio Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed; and (c) the Deferred Consideration (including any Postponed Deferred Consideration) which shall be paid by Funding quarterly on the Interest Payment Dates (provided there are available funds and after making any provisions in accordance with normal accounting practice) in accordance with the Funding Pre-Enforcement Revenue Priority of Payments or, as the case may be, the Funding Post-Enforcement Priority of Payments. 4.5 On the Ninth Issuer Closing Date, Funding shall pay (apound)139,500,000 by way of Deferred Consideration to the Seller for Loans previously transferred pursuant to this Agreement by the Seller to the Mortgages Trustee (such amount representing (i) the amount by which the amounts standing to the credit of the Funding Reserve Ledger exceed the Funding Reserve Fund Required Amount on that date and (ii) the amount by which the amounts standing to the credit of the First Reserve Ledger exceed the First Reserve Required Amount on that date). 4.6 On the date of the ~~sale~~ assignment of the relevant New ~~Portfolio~~ Portfolio, a meeting shall take place at the offices of the Seller or at such other office as may be agreed by the parties at which the Seller shall deliver to the Security Trustee or its representative the following documents: (ia) in respect of the first New Portfolio assigned on or after the date of ~~the first sale of a relevant New Portfolio including Scottish Loans: (A)~~ this Agreement only, two originals of the power of attorney ~~dated as at the Sale Date and~~ substantially in the form set out in Schedule ~~5 hereof~~ 5, duly executed by the ~~Seller~~Seller or its properly appointed attorney; (~~B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii~~b) a duly executed assignment ~~of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee~~ and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment assignation of rights against third parties comprised in the relevant New Portfolio dated as at of the ~~relevant Sale Date~~ date of the sale and purchase of the New Portfolio and in the form (mutatis mutandis) of the Assignment of Third Party Rights; (ivc) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller ~~dated as at the relevant Sale Date~~ attaching ~~either (i)~~ a copy of the board minute referred to in Clause ~~3.1(a)(v~~3.1(d) ~~or (ii) any board minutes or considerations, notes~~ and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vid) ~~on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only,~~ a solvency certificate from ~~an authorised signatory of~~ the Seller dated as at of the ~~relevant Sale Date~~date of the sale and purchase of the New Portfolio; and (~~vii~~e) a Scottish ~~Declaration of~~ Trust Deed in respect of the Scottish Loans in the New Portfolio (if any) and their Related ~~Security comprised in the relevant New Portfolio~~Security, in the form (mutatis mutandis) set out in Schedule 15 14 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and ~~Funding 1~~Funding. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) 4.7 The Seller undertakes that from the ~~relevant Sale~~ Assignment Date until the ~~perfection~~ completion of the ~~assignment or assignation (as appropriate)~~ sale and purchase in accordance with ~~Clauses 6.2 and 6.5~~Clause 6.1, the Seller shall hold the Title Deeds (if applicable) and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 4.8 Prior to the earlier to occur of: (a) a Trigger Event; and (ib) if Funding ~~1 does not enter~~ enters into a New Intercompany Loan Agreement~~, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements~~, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this ~~covenant~~covenant and undertaking, the Seller undertakes to use all reasonable endeavours to offer to ~~sell~~assign, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed ~~until the earlier of~~ up to but excluding the Interest Payment Date falling in ~~June 2008~~ October 2010 (or such later date as may be notified by ~~Funding 1 to the Seller~~Funding) ~~and~~ or until the occurrence of a Trigger ~~Event~~Event (if earlier), sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio ~~(i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006~~ is not less than ~~£21,500,000,000 and~~ (~~ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008~~ pound)25,000,000,000, (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause ~~4.7(b)(ii~~4.8(b) above) provided that the Seller shall not be obliged to ~~sell~~ assign to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the ~~reasonable~~ opinion of the Seller the ~~sale~~ assignment to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. ~~4.8~~ 4.9 On each ~~Sale~~ Assignment Date that Funding 1 provides consideration for New Loans to be ~~sold~~ assigned to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to ~~undertake a due diligence exercise on a sample~~ determine whether the Loans and their Related Security (or any part of them) constituting the ~~Customer Files relating to~~ Trust Property complied with the ~~New~~ representations and warranties set out in Schedule 1 of this Agreement as at the date such Loans ~~to be sold~~ were assigned to the Mortgages ~~Trustee on the relevant Sale Date~~Trustee. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by ~~Funding 1~~Funding).

Appears in 1 contract

Samples: Mortgage Sale Agreement (HOLMES FINANCING (No. 9) PLC)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 ~~Subject to fulfilment~~ Subjexx xx xxlfilment of the conditions set out in Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3) and ~~4.4 and the restriction set out in Clause 2.3~~4.4, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the ~~sale~~ assignment specified in such New Portfolio Notice the Seller shall sell and assign with full title guarantee ~~(or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice)~~ to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each ~~Sale~~ Assignment Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant ~~Sale~~ Assignment Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant ~~Sale~~ Assignment Date will adversely affect the then current rating by the Ratings Agencies (or any of them) of the Notes; (d) as at the relevant ~~Sale~~ Assignment Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Moody's, A-1 by S&P and F1 by Fitch at the time of, ~~and immediately~~ xxx xmmediately following, the ~~sale~~ assignment of the New Loans to the Mortgages Trustee; (e) as at the relevant ~~Sale~~ Assignment Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be ~~sold~~ assigned to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the ~~sale~~ assignment of the New Portfolio on the relevant ~~Sale~~ Assignment Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant ~~Sale~~ Assignment Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be ~~sold~~ assigned to the Mortgages Trustee on the relevant ~~Sale~~ Assignment Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant ~~Sale~~ Assignment Date. The yield of the Relevant Loans is to be calculated as follows: (A x B)+(C x (D-E+F)+(G x (H+I)) --------------------------------- J where, (A) = the Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant ~~Sale~~ Assignment Date; (C) = the Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant ~~Sale~~ Assignment Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant ~~Sale~~ Assignment Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant ~~Sale~~ Assignment Date; (G) = the Outstanding Principal Balance, on the relevant ~~Sale~~ Assignment Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant ~~Sale~~ Assignment Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant ~~Sale~~ Assignment Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant ~~Sale~~ Assignment Date; (i) the ~~sale~~ assignment of the New Loans on the relevant ~~Sale~~ Assignment Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant ~~Sale~~ Assignment Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the ~~sale~~ assignment of the New Loans on the relevant ~~Sale~~ Assignment Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant ~~Sale~~ Assignment Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the ~~sale~~ assignment of the New Loans on the relevant ~~Sale~~ Assignment Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no ~~sale~~ assignment of the New Loans may occur, if, as at the relevant ~~Sale~~ Assignment Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the ~~sale~~ assignment of New Loans to of the ~~Mortgages~~ Mortgage Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the ~~sale~~ assignment of New ~~Loans~~ Loan to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the ~~Sale~~ Assignment Date, the adjusted ~~General~~ Reserve Fund is equal to or greater than the ~~General~~ Reserve Fund Threshold; (n) if the ~~sale~~ assignment of New Loans includes the ~~sale~~ assignment of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be ~~sold and~~ assigned to the Mortgages Trustee and that such ~~sale~~ assignment of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant ~~Sale~~ Assignment Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant ~~Sale~~ Assignment Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 ~~4.5~~ and 4.6, the consideration to be provided to the Seller for the ~~sale~~ assignment of the New Portfolio to the Mortgages Trustee on ~~a Sale~~ an Assignment Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant ~~Sale~~ Assignment Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; ~~and/or~~and (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the ~~sale~~ assignment of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in ~~Schedule 8~~ and ~~Schedule 9~~ hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (~~iii~~ii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant ~~Sale~~ Assignment Date and in the form of the Assignment of Third Party Rights; (iviii) a certified copy of each of the duly executed Insurance Acknowledgements; (viv) on any ~~Sale~~ Assignment Date that Funding 1 provides consideration for New Loans to be ~~sold~~ assigned to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant ~~Sale~~ Assignment Date attaching ~~either (i)~~ a copy of the board minute referred to in Clause 3.1(a)(v) ~~or (ii) any board minutes or considerations, notes~~ and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate;; and (viv) on any ~~Sale~~ Assignment Date that Funding 1 provides consideration for New Loans to be ~~sold~~ assigned to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant ~~Sale~~ Assignment Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant ~~Sale~~ Assignment Date of the sale and assignment to the Mortgages Trustee of all of the Seller’s 's right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses ~~6.6~~ 6.4 and ~~6.5 shall~~ 6.3shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. ~~(a)~~ 4.6 The Seller undertakes that from the relevant ~~Sale~~ Assignment Date until the perfection of the assignment ~~or assignation (as appropriate)~~ in accordance with Clauses 6.2 and ~~6.5~~6.3, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in ~~June 2008~~[December, 2010]; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to ~~sell~~assign, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in [June ~~2008~~ 2008] (or such later date as may be notified by Funding ~~1 to the Seller~~1) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio ~~(i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006~~ is not less than ~~£21,500,000,000 and (ii) during the period from and including the interest payment date in~~ {pound-sterling}[15,750,000,000] before [June ~~2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008~~ 2008] (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to ~~sell~~ assign to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the ~~sale~~ assignment to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each ~~Sale~~ Assignment Date that Funding 1 provides consideration for New Loans to be ~~sold~~ assigned to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be ~~sold~~ assigned to the Mortgages Trustee on the relevant ~~Sale~~ Assignment Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Mortgages Trustee LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject ~~to fulfilment~~ xx xxxxxlment of the conditions set out in ~~Clauses~~ CLAUSES 2.2, 3.1, 4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in ~~Clause~~ CLAUSE 2.3, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of Scotland with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each Sale Date are: (a) no event of default under the Transaction Documents shall have occurred which is continuing as at the relevant Sale Date; (b) the Principal Deficiency Ledger shall not have a debit balance as at the most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c) the Mortgages Trustee is not aware that the purchase of the New Portfolio on the relevant Sale Date ~~will~~ would adversely affect the then current rating by the ~~Ratings~~ Rating Agencies of the Notes (or any of them~~) of the Notes~~); (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by ~~Xxxxx’x~~Moody's, A-1 by S&P and F1 by Fitch at the time of, and ~~immediately~~ xxxxxxately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal ~~Balances~~ Balance of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the ~~Mortgages Trustee~~ Seller in consideration of New Loans to be sold to itthe Mortgages Trustee, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date (in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies from time to time)) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.; (h) the yield (as calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the ~~Relevant Loans~~RELEVANT LOANS) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. 4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Permanent Mortgages Trustee LTD)

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 Subject to fulfilment of the conditions and undertakings set out in ~~Clauses 2.2, 3.1, 4.2 (or as applicable, 4.3) and~~ Sections 4.4 ~~and the restriction set out in Clause 2.3~~to 4.7, if the Seller shall, at any time and from time to time serve ~~a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee~~ (such service to be in the Seller’s 's sole discretion)) a properly completed New Portfolio Notice to the Guarantor with a copy to the Bond Trustee and each Rating Agency, the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice (which date shall be no less than five Canadian Business Days after the date of such New Portfolio Notice), the Seller shall ~~sell with full title guarantee (or in relation to rights~~ sell, transfer, assign and ~~assets situated in or governed by the law of Scotland with absolute warrandice)~~ convey to the ~~Mortgages Trustee~~ Guarantor all of the Seller's right, title, interest and benefit in and to the Loans, their Related Security and the other assets in the relevant New ~~Portfolio~~Portfolio on a fully-serviced basis. 4.2 Within three Canadian Business Days of receipt of a New Portfolio Notice in duplicate the Guarantor shall countersign that New Portfolio Notice in duplicate and return one original copy to the Seller and the Guarantor agrees, subject to the provisions of the Guarantor Agreement, to purchase the relevant Loans and their Related Security which will be New Loans and their Related Security comprised in the relevant New Portfolio on the date for completion specified in the relevant New Portfolio Notice. 4.3 If at any time prior to the occurrence of: (i) an Issuer Event of Default; or (ii) a Guarantor Event of Default, the Guarantor receives written notification from the Cash Manager that the Asset Coverage Test has not been met, as determined by the Cash Manager on any Calculation Date, then, if the Guarantor has not requested that the Seller make a further advance under the Demand Loan with respect to such deficiency, the Guarantor shall within three Canadian Business Days of receiving such written notice notify the Seller requesting that the Seller offer to sell to the Guarantor in accordance with the provisions of this Section 4 sufficient New Loans and their Related Security on or before the next Calculation Date to ensure that, taking into account the other assets and resources available to the Guarantor, the Asset Coverage Test is met on the next Calculation Date and the Guarantor shall use all reasonable endeavours to acquire from the Seller sufficient New Loans and their Related Security so that, taking into account the other assets and resources available to the Guarantor, the Asset Coverage Test is met on the next Calculation Date. 4.4 The conditions to be met as at each ~~Sale~~ Purchase Date are: (a) ~~no event of default under the Transaction Documents~~ there shall have ~~occurred which is continuing~~ been neither an Issuer Event of Default and service of an Issuer Acceleration Notice nor a Guarantor Event of Default and service of a Guarantor Acceleration Notice as at the relevant ~~Sale~~ Purchase Date; (b) the ~~Principal Deficiency Ledger shall not have a debit balance as at~~ Guarantor, acting on the ~~most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date; (c)~~ advice of the ~~Mortgages Trustee~~ Cash Manager, is not ~~aware~~ aware, and could not reasonably be expected to be aware, that the proposed purchase by the Guarantor of the ~~New Portfolio~~ relevant Loans and their Related Security on the relevant ~~Sale~~ Purchase Date ~~will~~ would adversely affect the then current rating by ~~the Ratings Agencies (or~~ any of them) of the Notes; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (f) except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the Mortgages Trust as at the beginning of that Interest Period; (g) the sale of the New Portfolio on the relevant Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio (or as agreed by the Servicer and the Rating Agencies ~~from time to time) exceeding~~ of the ~~product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.;~~Covered Bonds; and (hc) ~~the yield (as calculated below) of~~ if the Loans ~~in the Mortgages Trust together with the yield of the New Loans~~ that are proposed to be sold to the ~~Mortgages Trustee~~ Guarantor on the relevant ~~Sale~~ Purchase Date ~~(together for the purposes of this paragraph~~include New Loan Types, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is Rating Agency Condition has been satisfied with respect to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 under the Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate such Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any Monthly Payment due at any date means the Monthly Payment payable in respect of the month in which that date falls. ~~4.3 The obligations of the Seller under Clause 4.1 shall be subject to and conditional upon no Insolvency Event having occurred which is continuing as at the relevant Sale Date. 4.4~~ 4.5 Subject to fulfilment of the conditions referred to in ~~Clauses 4.2, 4.3, 4.4 4.5 and 4.6~~Section 4.4, the ~~consideration~~ relevant Purchase Price to be provided to the Seller for the ~~sale~~ sale, transfer, assignment and conveyance of ~~the~~ a New Portfolio to the ~~Mortgages Trustee~~ Guarantor on a ~~Sale~~ Purchase Date shall be satisfied by payment to the ~~aggregate of~~Seller in same day funds an amount equal to the Purchase Price for such New Portfolio by depositing such amount into the Seller’s Account or, if the Seller so elects in writing to the Guarantor on or before the applicable Purchase Date, the Guarantor shall credit the Seller’s Capital Account Ledger with an amount equal to all (or the portion of the Purchase Price for such New Portfolio not paid in cash) of such Purchase Price. 4.6 Subject to Schedule 6 to the Guarantor Agreement, on each Guarantor Payment Date the Guarantor may apply Available Principal Receipts towards the purchase of New Loans and their Related Security offered to the Guarantor by the Seller in accordance with Sections 4.1 and 4.2 in an amount sufficient to ensure that, taking into account the other assets and resources available to the Guarantor, the Guarantor is in compliance with the Asset Coverage Test. 4.7 On the relevant Purchase Date, the Seller shall deliver the following documents: (a) to the ~~payment~~ Custodian: (i) the Eligible Loan Details with respect to all Loans and their Related Security sold, transferred, assigned and conveyed by ~~Funding 1~~ the Seller on such Purchase Date, which may be provided in a document stored upon electronic media (including, but not limited to, a CD-ROM) in a form acceptable to the Guarantor and the Custodian (each acting reasonably); and (ii) to the extent not provided on a previous Purchase Date, such number of originals of the Powers of Attorney as may reasonably be requested by the Guarantor, duly executed by the Seller and where applicable, duly executed by the relevant Originator, together with an opinion of legal counsel to the Seller in form and substance acceptable to the Guarantor and the Bond Trustee (each acting reasonably) confirming such Powers of Attorney are valid, enforceable and irrevocable, and sufficient to allow the Guarantor (or a nominee on its behalf) to effect the transfer of registered title to the Loans and Related Security sold, transferred, assigned and conveyed by ~~telegraphic transfer~~ the Seller on ~~the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer~~such Purchase Date; ~~and/or~~and (b) to the ~~covenant~~ Guarantor and the Bond Trustee: (i) a certificate signed by at least one authorized signatory of the ~~Mortgages Trustee to hold~~ Seller dated as of the ~~Trust Property on trust pursuant~~ relevant Purchase Date attaching if applicable a copy of the board minutes of the Seller (if not previously delivered to the ~~terms of~~ Guarantor and the ~~Mortgages Trust Deed. (a~~Bond Trustee) ~~On the date of~~ authorizing its duly authorized representatives to agree to the sale of the relevant New Portfolio and authorizing the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above onlyexecution, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution delivery and performance of the ~~Transaction Documents~~ documentation to ~~which the Seller is party, in each case~~ be entered into pursuant to this Agreement and confirming that the resolutions referred to therein and in the board minutes referred to in Section 3.1(b)(i) are in full force and effect and have not been amended or rescinded as at the date of the certificate; (ii) if applicable, a form of assignment for purposes of the assignment, sale, transfer and conveyance of Properties located in the Province of Québec, in form and substance acceptable to the Guarantor and the Bond Trustee (acting reasonably); (iii) opinions of local counsel to the Seller in form and substance satisfactory to the Guarantor and the Bond Trustee with respect to such matters as may be requested by the Guarantor and the Bond Trustee (each acting reasonably); (iv) executed copies of all financing statements, financing change statements, discharges and releases, if any, necessary to discharge or release all security interests and other rights or interests of any Person in the Loans and Related Security included in the New Portfolio previously granted by the Seller (other than Permitted Security Interests), together with copies of the relevant financing change statements or other discharge statements or releases with the registration particulars stamped thereon or other assurance satisfactory to the Guarantor; (v) completed PPSA search results, dated within five Canadian Business Days of the date of the relevant Purchase Date, listing the financing statements referred to in Section 4.7(b)(vi) below and all other effective financing statements filed in the jurisdictions referred to in Section 4.7(b)(vi) below that name the Seller as debtor and show no other Adverse Claims on any of the Loans or Related Security being purchased on such Purchase Date; (vi) acknowledgements or duplicate registration copies of proper assignments, financing statements and other similar documents or instruments, with registration particulars stamped thereon, naming the Seller as seller or assignor and the Guarantor as purchaser or assignee, and duly filed on ~~any Sale Date that Funding 1 provides consideration for New~~ or before the date of such purchase under the PPSA in Ontario and pursuant to Article 1642 of the Civil Code in Quebec within seven Canadian Business Days’ following such purchase in order to perfect the interests of the Guarantor in the applicable Loans ~~to be sold~~ contemplated by this Agreement; (vii) an opinion of legal counsel to the ~~Mortgages Trustee pursuant~~ Seller with respect to ~~Clause 4.4(a~~“true sale” matters, “non- consolidation” matters, the registrations specified in Section 4.7(b)(vi) above ~~only,~~ and other matters in form and substance satisfactory to the Guarantor and the Bond Trustee (each acting reasonably); and (viii) a solvency certificate ~~from an authorised~~ signed by at least one authorized signatory of the Seller dated as at the relevant ~~Sale Date; and~~ Purchase Date (~~vii) a Scottish Declaration of Trust~~ in ~~respect of the Scottish Loans~~ form and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale substance satisfactory to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee Guarantor and the ~~Security Trustee with an updated~~Bond Trustee, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably)~~. 4.7 Prior to~~ , but only in the ~~earlier to occur of: (a) a Trigger Event; and~~ event that (i) ~~if Funding 1 does not enter into a New Intercompany Loan Agreement,~~ the ~~Interest Payment~~ relevant Purchase Date ~~in June 2008~~is also an Issue Date; or and/or (ii) ~~if Funding 1 does enter into New Intercompany Loan Agreements,~~ a solvency certificate has not been delivered by the ~~latest Interest Payment Date specified by Funding 1 by notice~~ Seller in ~~writing~~ the three months prior to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant ~~Sale~~ Purchase Date~~. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).~~; and/or

Appears in 1 contract

Samples: Mortgage Sale Agreement

SALE AND PURCHASE OF NEW PORTFOLIOS. 4.1 ~~Subject to fulfilment~~ Subjexx xx xxlfilment of the conditions set out in Clauses 2.2, 3.1, 4.2 ~~(or as applicable,~~ and 4.3~~) and 4.4 and the restriction set out in Clause 2.3~~, if the Seller shall, at any time and from time to time serve a properly completed New Portfolio Notice on the Mortgages Trustee and Funding 1 with a copy to the Security Trustee (such service to be in the Seller’s 's sole discretion), ~~the Seller agrees that~~ then on the date for completion of the sale and assignment specified in ~~such~~ the New Portfolio Notice the Seller shall sell with full title guarantee (or in relation to rights and assets situated in or governed by the law of ~~Scotland~~ Scotland, with absolute warrandice) to the Mortgages Trustee the relevant New Portfolio. 4.2 The conditions to be met as at each ~~Sale~~ Assignment Date are: (a) ~~no event of default under~~ the ~~Transaction Documents~~ Seller shall ~~have occurred which is continuing~~ as at the relevant ~~Sale~~ Assignment Date make the Representations and Warranties to the Mortgages Trustee, Funding and the Security Trustee in relation to each New Loan in the New Portfolio being sold on the relevant Assignment Date in accordance with Clause 8 and such Representations and Warranties must be true in relation to each New Loan (but if such Representation and Warranties are only discovered to be untrue after the relevant Assignment Date, the Mortgages Trustee's and Funding's only remedy shall be under Clause 7); (b) the ~~Principal Deficiency Ledger shall not have a debit balance as~~ Lending Criteria applicable at the ~~most recent Funding 1 Interest Payment Date after applying all Funding 1 Available Revenue Receipts on that Funding 1 Interest Payment Date~~time of origination of each relevant New Loan have been applied to the New Loan and to the circumstances of the Borrower at the time the New Loan was made; (c) the total amount of arrears in respect of all the Loans in the Mortgages Trust, as a percentage of the total amount of gross interest due to the Mortgages Trustee is during the previous 12 months on all Loans outstanding during all or part of such period, must not ~~aware that~~ exceed 2 per cent. ARREARS for this purpose in respect of a Loan on any date means the ~~purchase of the New Portfolio~~ aggregate amount overdue on the ~~relevant Sale Date will adversely affect~~ Loan on that date but only where such aggregate amount overdue equals or exceeds an amount equal to twice the Monthly Payment then ~~current rating by~~ due on the ~~Ratings Agencies (or any of them) of the Notes~~Loan; (d) as at the relevant Sale Date, the Seller has not received any notice that the short term, unsecured, unguaranteed and unsubordinated debt obligations of the Seller are not rated at least P-1 by Xxxxx’x, A-1 by S&P and F1 by Fitch at the time of, and immediately following, the sale of the New Loans to the Mortgages Trustee; (e) as at the relevant Sale Assignment Date, the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust, in respect of which the aggregate amount in arrears is more than three times the Monthly Payment then due, is less than 5 4 per cent. of the aggregate Outstanding Principal Balances of the Loans in the Mortgages Trust; (e) no New Loan has on the relevant Assignment Date an aggregate amount in arrear which is more than the amount of the Monthly Payment then due and each New Loan was made at least three calendar months prior to the relevant Assignment Date; (f) each New Loan is secured by a Mortgage constituting a valid and subsisting first charge by way of legal mortgage or first ranking standard security over the relevant Property (except where Funding 1 pays amounts to the Mortgages Trustee in consideration of New Loans to be sold to it, the aggregate Outstanding Principal Balance (excluding Arrears of Interest) of New Loans transferred in any one Interest Period must not exceed 15 per cent. of the aggregate Outstanding Principal Balance of Loans (excluding Arrears of Interest) in the ~~Mortgages Trust as~~ case of some Flexible Loans in respect of which the Mortgage constitutes valid and subsisting first and second charges by way of legal mortgage or first and second ranking standard securities over the relevant Property), subject only (in appropriate cases) to registration or recording at the ~~beginning~~ Land Registry or the Registers of ~~that Interest Period~~Scotland; (g) ~~the sale~~ no Outstanding Principal Balance of ~~the~~ any New ~~Portfolio on~~ Loan is, at the relevant ~~Sale Date does not result in the product of WAFF and WALS for the Portfolio after such purchase calculated on the relevant Sale Date in the same way as for the Initial Portfolio~~ Assignment Date, greater than (~~or as agreed by the Servicer and the Rating Agencies from time to time) exceeding the product of WAFF and WALS for the Portfolio calculated on the most recent Closing Date plus 0.25 per cent.~~pound)750,000; (h) ~~the yield (~~for so long as ~~calculated below) of the Loans in the Mortgages Trust together with the yield of the New Loans to be sold~~ amounts are owed by Funding to the Mortgages Trustee on the relevant Sale Date (together for the purposes of this paragraph, the Relevant Loans) is at least 0.50 per cent. greater than Sterling-LIBOR for three-month sterling deposits as at the previous Interest Payment Date, after taking into account the average yield on the Loans which are Variable Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the margins on the Funding 1 Swap(s), in each case as at the relevant Sale Date. The yield of the Relevant Loans is to be calculated as follows: where, (A) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Fixed Rate Loans; (B) = the interest rate receivable by Funding 1 First Issuer under the ~~Funding 1 Fixed-Floating Rate Swap as at the relevant Sale Date; (C) = the Outstanding Principal Balance~~First Intercompany Loan Agreement, ~~on the relevant Sale Date~~no New Loan has a final maturity date beyond July, of the Relevant Loans which are Variable Rate Loans; (D) = the weighted average Variable Base Rate of the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (E) = the Variable Rate Swap SVR for the Relevant Loans which are Variable Rate Loans on the relevant Sale Date; (F) = the interest rate receivable by Funding 1 under the Funding 1 Variable Rate Swap as at the relevant Sale Date; (G) = the Outstanding Principal Balance, on the relevant Sale Date, of the Relevant Loans which are Tracker Rate Loans; (H) = the interest rate receivable by Funding 1 under the Tracker Rate Swap as at the relevant Sale Date; (I) = the weighted average margin of the Relevant Loans which are Tracker Rate Loans over or under the Bank of England Repo Rate on the relevant Sale Date; (J) = the Outstanding Principal Balance of the Relevant Loans on the relevant Sale Date2038; (i) the sale of the New Loans on the relevant Sale Date does not result in the loan-to-value ratio of the Loans and the New Loans after application of the LTV Test on the relevant Sale Date exceeding the loan-to-value ratio (based on the LTV Test) of Loans in the Portfolio on the most recent Closing Date plus 0.25 per cent.; (j) the sale of the New Loans on the relevant Sale Date does not result in Loans (other than Fixed Rate Loans) which after taking into account the Funding 1 Swap will yield less than Sterling-LIBOR plus 0.50 per cent. as each Borrower has made at the relevant Sale Date and that have more than 2 years remaining on their incentive period accounting for more than 15 per cent. of the aggregate Outstanding Principal Balance of all Loans comprising the Trust Property; (k) the sale of the New Loans on the relevant Sale Date does not result in the Fixed Rate Loans which have more than 1 year remaining on their incentive period accounting for more than 50 per cent. of the aggregate Outstanding Principal Balance of Loans comprising the Trust Property; (l) no sale of the New Loans may occur, if, as at the relevant Sale Date, the Step-up Date in respect of any Note issued after 1st January, 2003 and still outstanding has been reached and such Note has not been redeemed in full. For the avoidance of doubt, this prohibition on the sale of New Loans to the Mortgages Trustee shall remain in effect only for so long as any such Note remains outstanding and, upon its redemption, the sale of New Loans to the Mortgages Trustee may be resumed in accordance with the terms of this Agreement; (m) as at the Sale Date, the adjusted General Reserve Fund is equal to or greater than the General Reserve Fund Threshold; (n) if the sale of New Loans includes the sale of New Loan Types to the Mortgages Trustee, the Security Trustee has received written confirmation from each of the Rating Agencies that such New Loan Types may be sold and assigned to the Mortgages Trustee and that such sale of New Loan Types would not have an adverse effect on the then current ratings of the Notes; (o) the Funding 1 Swap Agreement has been modified as required (or, if appropriate, Funding 1 has entered into a new swap agreement) to hedge against the interest rates payable in respect of such New Loans and the floating rate of interest payable on the Issuer Intercompany Loan; and (p) no Trigger Event has occurred on or before the relevant Sale Date. In this Clause 4.2 references to any least one full Monthly Payment ~~due at any date means the Monthly Payment payable~~ in respect of the ~~month in which that date falls. 4.3 The obligations~~ relevant New Loan; (j) no event of default under the ~~Seller under Clause 4.1~~ Transaction Documents shall ~~be subject to and conditional upon no Insolvency Event having~~ have occurred which is continuing as at the relevant ~~Sale~~ Assignment Date. 4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2, 4.3, 4.4 4.5 and 4.6, the consideration to be provided to the Seller for the sale of the New Portfolio to the Mortgages Trustee on a Sale Date shall be the aggregate of: (a) the payment by Funding 1 to the Seller by telegraphic transfer on the relevant Sale Date of the proceeds of any New Intercompany Loan advanced to Funding 1 by a New Issuer; and/or (b) the covenant of the Mortgages Trustee to hold the Trust Property on trust pursuant to the terms of the Mortgages Trust Deed. (a) On the date of the sale of the relevant New Portfolio the Seller shall deliver to the Security Trustee or its representative the following documents: (i) on the date of the first sale of a relevant New Portfolio including Scottish Loans: (A) two originals of the power of attorney dated as at the Sale Date and substantially in the form set out in Schedule 5 hereof duly executed by the Seller; (B) a certified copy of each of the duly executed Insurance Acknowledgements; and (C) a certified copy of each of the duly executed Insurance Endorsements; (ii) a duly executed assignment of the Halifax Mortgage Re Limited MIG Policies to the extent that they relate to the Mortgages comprised in the relevant New Portfolio from the Seller to the Mortgages Trustee and a certified copy of a notice (the original of which shall be served by the Seller by courier or by special delivery) of such assignment from the Seller to HBOS Insurance (PCC) Guernsey Limited dated as of the relevant Assignment Date and in the form (mutatis mutandis) set out in Schedule 8 and Schedule 9 hereof respectively and a certified copy of consent to assignment of the Halifax Mortgage Re Limited MIG policies (or acknowledgement that the Mortgages Trustee will be an insured under the Halifax Mortgage Re Limited MIG Policies following the assignment) from HBOS Insurance (PCC) Guernsey Limited in such form as HBOS Insurance (PCC) Guernsey Limited reasonably requires; (iii) a duly executed assignment of rights against third parties comprised in the relevant New Portfolio dated as at the relevant Sale Date and in the form of the Assignment of Third Party Rights; (iv) a certified copy of each of the duly executed Insurance Acknowledgements; (v) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a certificate of a duly authorised officer of the Seller dated as at the relevant Sale Date attaching either (i) a copy of the board minute referred to in Clause 3.1(a)(v) or (ii) any board minutes or considerations, notes and resolutions of the Seller or its duly authorised delegate (as applicable) authorising its duly appointed representatives to agree the sale of a New Portfolio, and authorising the execution and performance of the Transaction Documents to which the Seller is party, in each case confirming that the resolutions referred to therein are in full force and effect and have not been amended or rescinded as at the date of the certificate; (vi) on any Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above only, a solvency certificate from an authorised signatory of the Seller dated as at the relevant Sale Date; and (vii) a Scottish Declaration of Trust in respect of the Scottish Loans and their Related Security comprised in the relevant New Portfolio, in the form (mutatis mutandis) set out in Schedule 15 and with the annexure thereto duly completed, duly executed by the Seller, the Mortgages Trustee and Funding 1. (b) The parties hereto acknowledge that completion on each relevant Sale Date of the sale to the Mortgages Trustee of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio subject to the terms and provisions of the Mortgages Trust Deed shall occur as indicated in this Clause 4 PROVIDED THAT the matters described in Clauses 6.6 and 6.5 shall not occur until the relevant time indicated in Clause 6 or, as applicable, Clause 7.5. (a) The Seller undertakes that from the relevant Sale Date until the perfection of the assignment or assignation (as appropriate) in accordance with Clauses 6.2 and 6.5, the Seller shall hold the Title Deeds and Customer Files relating to the New Portfolio that are in its possession or under its control or held to its order to the order of the Mortgages Trustee or as the Mortgages Trustee shall direct. (b) The Seller undertakes that within three (3) London Business Days of the Sale Date to provide the Mortgages Trustee and the Security Trustee with an updated, complete and accurate list of the Loans and their Related Security which comprise the New Portfolio which may be provided in a document stored upon electronic media (including, but not limited to a CD-Rom) in a form acceptable to the Mortgages Trustee and the Security Trustee (each acting reasonably). 4.7 Prior to the earlier to occur of: (a) a Trigger Event; and (i) if Funding 1 does not enter into a New Intercompany Loan Agreement, the Interest Payment Date in June 2008; or (ii) if Funding 1 does enter into New Intercompany Loan Agreements, the latest Interest Payment Date specified by Funding 1 by notice in writing to the Seller and the Mortgages Trustee as applying in relation to this covenant, the Seller undertakes to use all reasonable endeavours to offer to sell, in accordance with the provisions of this Clause 4, to the Mortgages Trustee and the Mortgages Trustee undertakes to use all reasonable endeavours to acquire from the Seller and to hold pursuant to the terms of the Mortgages Trust Deed until the earlier of the Interest Payment Date falling in June 2008 (or such later date as may be notified by Funding 1 to the Seller) and the occurrence of a Trigger Event, sufficient New Loans and their Related Security so that the aggregate Outstanding Principal Balance of Loans in the Portfolio (i) during the period from and including the Fourth Issuer Closing Date up to and excluding the Funding 1Interest Payment date in June 2006 is not less than £21,500,000,000 and (ii) during the period from and including the interest payment date in June 2006 to but excluding the Funding 1 Interest Payment Date in June 2008 is not less than £15,750,000,000 before June 2008 (or such other amount or amounts specified by Funding 1 in the notice referred to in Clause 4.7(b)(ii) above) provided that the Seller shall not be obliged to sell to the Mortgages Trustee, and the Mortgages Trustee shall not be obliged to acquire, New Loans and their Related Security if in the reasonable opinion of the Seller the sale to the Mortgages Trustee of New Loans and their Related Security would adversely affect the business of the Seller. 4.8 On each Sale Date that Funding 1 provides consideration for New Loans to be sold to the Mortgages Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall appoint a firm of independent auditors to undertake a due diligence exercise on a sample of the Customer Files relating to the New Loans to be sold to the Mortgages Trustee on the relevant Sale Date. The costs of such independent auditors shall be borne by the relevant New Issuer (which shall be procured by Funding 1).

Appears in 1 contract

Samples: Mortgage Sale Agreement (Holmes Funding LTD)

Common use of SALE AND PURCHASE OF NEW PORTFOLIOS Clause in Contracts