Exhibit 4.2
EXECUTION COPY
AMENDED AND RESTATED MORTGAGES TRUST DEED
DATED 18TH NOVEMBER, 2004
HALIFAX PLC
AND
PERMANENT FUNDING (NO. 1) LIMITED
AND
PERMANENT MORTGAGES TRUSTEE LIMITED
AND
SFM OFFSHORE LIMITED
XXXXX & XXXXX
XXXXX & XXXXX LLP
LONDON
CONTENTS
CLAUSE PAGE
1. Definitions and Construction.........................................................................1
2. Creation of Mortgages Trust..........................................................................2
3. Conditions Precedent.................................................................................2
4. Acquisition by Funding 1 of an Increased Interest in the Trust Property..............................3
5. Initial Funding 1 Share and Initial Seller Share.....................................................4
6. Acquisition by Seller of an Interest Relating to Capitalised Interest................................5
7. Payment by the Seller to Funding 1 of the Amount Outstanding under an Intercompany Loan..............5
8. Adjustment of Funding 1 Share Percentage and Seller Share Percentage on Calculation Dates............6
9. Minimum Seller Share.................................................................................8
10. Allocation and Distribution of Revenue Receipts.....................................................10
11. Allocation and Distribution of Principal Receipts...................................................11
12. Allocation of Losses................................................................................12
13. Funding 2 becomes a Beneficiary of the Mortgages Trust..............................................13
14. Ledgers.............................................................................................13
15. Costs and Expenses of the Mortgages Trustee.........................................................13
16. Directions from Beneficiaries.......................................................................14
17. Transfers...........................................................................................14
18. Covenants of the Mortgages Trustee..................................................................15
19. Power to Delegate...................................................................................16
20. Powers of Investment................................................................................17
21. Other Provisions regarding the Mortgages Trustee....................................................17
22. No Retirement of Mortgages Trustee..................................................................18
23. Termination.........................................................................................18
24. Further Assurances..................................................................................18
25. Amendments..........................................................................................19
26. Non Petition Covenant...............................................................................19
27. No Partnership or Agency............................................................................19
28. Calculations........................................................................................19
29. No Waiver; Remedies.................................................................................19
30. Severability........................................................................................19
31. Tax.................................................................................................20
32. Confidentiality.....................................................................................20
33. Exclusion of Third Party Rights.....................................................................21
34. Addresses for Notices...............................................................................21
35. Governing Law and Submission to Jurisdiction........................................................21
36. Exclusion of Trustee Act 2000.......................................................................22
Signatories...............................................................................................22
THIS AMENDED AND RESTATED MORTGAGES TRUST DEED is made on 18th November, 2004
between:
(1) HALIFAX PLC (registered number 2367076), a public limited company
incorporated under the laws of England and Wales whose registered
office is at Xxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxxxxxxx XX0 0XX (in its
capacities as SELLER, BENEFICIARY and CASH MANAGER);
(2) PERMANENT FUNDING (NO. 1) LIMITED (registered number 4267660), a
private limited company incorporated under the laws of England and
Wales whose registered office is at Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxx,
Xxxxxx XX0X 0XX (in its capacity as a BENEFICIARY);
(3) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a
private limited company incorporated under the laws of Jersey whose
registered office is at 00 Xxxxxxxxx, Xx Xxxxxx, Xxxxxx XX0 0XX,
Xxxxxxx Xxxxxxx (xx its capacity as MORTGAGES TRUSTEE); and
(4) SFM OFFSHORE LIMITED (registered number 76015), a private limited
company incorporated under the laws of Jersey whose registered office
is at 00 Xxxxxxxxx, Xx Xxxxxx, Xxxxxx XX0 0XX, Xxxxxxx Xxxxxxx (xx its
capacity as SHARE TRUSTEE of the Mortgages Trustee).
WHEREAS:
(A) The Mortgages Trust was constituted by the Share Trustee of the
Mortgages Trustee in favour of Funding 1 and the Seller on the terms
and subject to the conditions set out in the Mortgages Trust Deed (as
amended and/or restated by this Deed and from time to time, the
MORTGAGES TRUST DEED).
(B) The Mortgages Trustee holds the Trust Property as bare trustee for the
Beneficiaries upon, with and subject to the trusts, powers and
provisions of the Mortgages Trust Deed.
(C) The Seller carries on the business of, inter alia, originating
residential first mortgage loans to individual Borrowers in the United
Kingdom and of managing and administering such mortgage loans. The
Seller assigned the Initial Portfolio to the Mortgages Trustee on 14th
June, 2002 and (from time to time) has sold and may sell New Portfolios
to the Mortgages Trustee, pursuant to the terms of the Mortgage Sale
Agreement. The Initial Portfolio is, and any New Portfolios are and
shall be, held by the Mortgages Trustee (in relation to Scottish Loans,
in its capacity as trustee under a Scottish Declaration of Trust) on
trust for the Beneficiaries upon, with and subject to the trusts,
powers and provisions of the Mortgages Trust Deed.
(D) The parties to the Mortgages Trust Deed have agreed to amend and
restate the terms of the Mortgages Trust Deed as set out herein.
NOW THIS DEED WITNESSES:
1. DEFINITIONS AND CONSTRUCTION
1.1 The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Deed and dated 18th
November, 2004 (as the same may be amended, varied or supplemented from
time to time with the consent of the parties to this Deed) (the MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and specifically
incorporated into this Deed and, accordingly, the expressions defined
in the Master Definitions and Construction Schedule (as so amended,
varied or supplemented from time to time) shall,
1
except where the context otherwise requires and save where otherwise
defined herein, have the same meanings in this Deed, including the
Recitals hereto and this Deed shall be construed in accordance with the
interpretation provisions set out in CLAUSE 2 of the Master Definitions
and Construction Schedule.
1.2 This Deed amends and restates the Mortgages Trust Deed made on 13th
June, 2002 as amended and restated on 6th March, 2003, 25th November,
2003, 12th March, 2004 and 22nd July, 2004 (the PRINCIPAL DEED). As of
the date of this Deed, any future rights or obligations (excluding such
obligations accrued to the date of this Deed) of a party under the
Principal Deed shall be extinguished and shall instead be governed by
this Deed.
2. CREATION OF MORTGAGES TRUST
2.1 INITIAL TRUST PROPERTY
On 13th June, 2002 the Share Trustee of the Mortgages Trustee settled
on trust the Initial Trust Property to be held on trust absolutely as
to both capital and income by the Mortgages Trustee for the benefit, as
tenants in common, of the Seller as to the Initial Seller Share
Percentage and Funding 1 as to the Initial Funding 1 Share Percentage.
2.2 INITIAL CLOSING TRUST PROPERTY
Pursuant to the provisions of the Mortgage Sale Agreement, the Seller
assigned the Initial Closing Trust Property to the Mortgages Trustee on
the Initial Closing Date.
2.3 FUTURE TRUST PROPERTY
From time to time and pursuant to the Mortgage Sale Agreement, the
Seller has sold and intends to sell the Future Trust Property to the
Mortgages Trustee.
2.4 TRUST PROPERTY
Subject to CLAUSE 3, the Mortgages Trustee shall hold the Trust
Property as to both capital and income on trust absolutely for Funding
1 (as to the Funding 1 Share) and for the Seller (as to the Seller
Share) as tenants in common upon, with and subject to all the trusts,
powers and provisions of this Deed.
3. CONDITIONS PRECEDENT
3.1 The Initial Trust Property is held by the Mortgages Trustee on the
Mortgages Trust.
3.2 The Initial Closing Trust Property shall be held by the Mortgages
Trustee on the Mortgages Trust upon the satisfaction of the following
conditions precedent:
(a) due execution and delivery of the Mortgage Sale Agreement as
amended and restated by all parties to it;
(b) due execution and delivery of this Deed by all parties to it; and
(c) in respect of the Funding 1 Share of the Trust Property only,
payment of the Purchase Price by Funding 1 to the Seller.
3.3 The Initial Closing Trust Property and any Future Trust Property shall
be held by the Mortgages Trustee on the Mortgages Trust subject to
satisfaction of the conditions set out in
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CLAUSE 4.1 of the Mortgage Sale Agreement for the sale of New Loans and
their New Related Security to the Mortgages Trustee.
4. ACQUISITION BY FUNDING 1 OF AN INCREASED INTEREST IN THE TRUST PROPERTY
4.1 OFFER TO PAY
On not more than 60 days' written notice nor less than 20 days' written
notice, Funding 1 may offer to make a payment to the Seller so as to
increase Funding 1's share of the Trust Property and to cause a
corresponding decrease in the Seller's share of the Trust Property on
the date specified in that notice. Such offer may only be accepted if
the following conditions precedent are satisfied on such date:
(a) no deficiency is recorded on the Principal Deficiency Ledger as
at the most recent Funding 1 Interest Payment Date;
(b) no Note Event of Default or Intercompany Loan Event of Default
shall have occurred which is continuing or unwaived as at the
relevant date;
(c) the Security Trustee is not aware that the increase in the
Funding 1 Share of the Trust Property (or the corresponding
decrease in the Seller Share of the Trust Property) would
adversely affect the then current credit ratings by the Rating
Agencies (or any of them) of the Notes;
(d) the Notes have been issued by the relevant Issuer, the
subscription proceeds received on behalf of the relevant Issuer
and advanced by the relevant Issuer to Funding 1 pursuant to an
Intercompany Loan Agreement, the proceeds of which will be
applied by Funding 1 to make the payment referred to in the
notice on the relevant date;
(e) Funding 1 has entered into, if necessary, a New Start-up Loan and
a New Funding 1 Swap and adjustments have been made, if required,
to the General Reserve Fund;
(f) receipt of a solvency certificate executed by an authorised
signatory of the Seller in form and content acceptable to the
Mortgages Trustee, Funding 1 and the Security Trustee;
(g) as at the relevant date, the aggregate Outstanding Principal
Balance of Loans constituting the Trust Property, 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 Balance of all Loans constituting
the Trust Property;
(h) the Seller has not received written 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 Standard
and Poor's and F1 by Fitch at the time of, and immediately
following, the payment made by Funding 1 on the relevant date;
(i) the product of the WAFF and WALS for the Loans constituting the
Trust Property calculated on the relevant date in the same way as
for the Initial Portfolio (or as agreed by the Servicer and the
Rating Agencies from time to time) does not exceed the product of
the WAFF and WALS for the Loans constituting the Trust Property
calculated on the most recent previous Closing Date, plus 0.25
per cent.;
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(j) the loan-to-value ratio of Loans in the Trust Property, after
application of the LTV Test on the relevant date, does not exceed
the loan-to-value ratio (based on the LTV Test) of Loans in the
Trust Property on the most recent previous Closing Date plus 0.25
per cent.; and
(k) the General Reserve Fund has not been debited on or before the
relevant date for the purposes of curing a Principal Deficiency
in respect of the Term Advances in circumstances where the
General Reserve Fund has not been replenished by a corresponding
amount by the relevant date.
Funding 1 may not make or offer to make a payment to the Seller in
consideration of an increased share of the Trust Property if, as at the
relevant date, the Step-up Date in respect of any Note has been reached
and the Issuer who issued that Note has not exercised its option to
redeem that Note as at the relevant date in accordance with the Terms
and Conditions of that Note. For the avoidance of doubt, this
prohibition on Funding 1 making a payment to the Seller in
consideration of an increased share of the Trust Property shall remain
in effect only so long as any such Note remains outstanding and, upon,
its redemption, Funding 1 may again make a payment to the Seller in
consideration of an increased share of the Trust Property.
4.2 COMPLETION OF ASSIGNMENT
If an offer is made by Funding 1 in accordance with CLAUSE 4.1 above
and that offer is accepted by the Seller, Funding 1 shall, subject to
satisfaction of the conditions precedent set out in CLAUSE 4.1 above,
pay to the Seller an amount equal to the increase in the Funding 1
share of the Trust Property, the Funding 1 Share of the Trust Property
shall increase by a corresponding amount and the Seller Share of the
Trust Property shall decrease by the same amount.
4.3 AUDIT OF LOANS CONSTITUTING THE TRUST PROPERTY
If the short term, unsecured, unguaranteed and unsubordinated debt
obligations of the Seller fall below A-1 by Standard & Poor's, P-1 by
Xxxxx'x and/or F1 by Fitch, then the Beneficiaries shall appoint a firm
of independent auditors (approved by the Rating Agencies) to determine
whether the Loans and their Related Security (or any part of them)
constituting the Trust Property complied with the representations and
warranties set out in Schedule 1 of the Mortgage Sale Agreement as at
the date such Loans were sold to the Mortgages Trustee. The costs of
such independent auditors shall be borne by the Beneficiaries pro rata
according to their respective current percentage shares in the Trust
Property.
5. INITIAL FUNDING 1 SHARE AND INITIAL SELLER SHARE
5.1 INITIAL FUNDING 1 SHARE
The Initial Funding 1 Share of the Trust Property was (pound)34.38 as
at 13th June, 2002 and (pound)3,478,376,344.38 as at the Initial
Closing Date. The Initial Funding 1 Share Percentage was the Initial
Funding 1 Share expressed as a percentage of the Trust Property as at
the Initial Closing Date, such percentage being 34.38 per cent.
5.2 INITIAL SELLER SHARE
The Initial Seller Share of the Trust Property was the total amount of
the Trust Property minus the Initial Funding 1 Share as at 13th June,
2002. As at the Initial Closing Date, the Initial Seller Share was
(pound)6,638,679,574.44 and the Initial Seller Share Percentage was
equal
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to 100 per cent. minus the Initial Funding 1 Share Percentage, such
percentage being 65.62 per cent.
6. ACQUISITION BY SELLER OF AN INTEREST RELATING TO CAPITALISED INTEREST
6.1 Any increase in the Outstanding Principal Balance of a Loan due to
Capitalised Interest will be allocated to the Funding 1 Share of the
Trust Property and to the Seller Share of the Trust Property, based on
respectively the Funding 1 Share Percentage and the Seller Share
Percentage in the Trust Property as calculated on the most recent
Calculation Date.
6.2 Prior to an Insolvency Event occurring in respect of the Seller, on
each Distribution Date the Seller shall make a cash payment to Funding
1 in an amount equal to Funding 1's share of the Capitalised Interest
in respect of those Loans that are subject to Payment Holidays. As a
result of making such payment the Seller Share of the Trust Property
will increase by an amount equal to the amount paid to Funding 1 for
Funding 1's Share of the Capitalised Interest and Funding 1's Share of
the Trust Property will decrease by a corresponding amount. The cash
payment shall be made in accordance with CLAUSE 6.4 below.
6.3 If an Insolvency Event occurs in respect of the Seller, then the Seller
may acquire from Funding 1 its share of the Capitalised Interest in the
same manner as is contemplated in CLAUSE 6.2, but it is not obliged to
do so.
6.4 In respect of the cash payment to be made by the Seller pursuant to
CLAUSE 6.2, the Seller hereby directs the Mortgages Trustee to deduct
from the Seller's Share of the Mortgages Trust Available Revenue
Receipts (allocated to the Seller pursuant to CLAUSE 10.2 of this Deed)
an amount equal to such cash payment and to pay the same to Funding 1
in satisfaction of the Seller's obligations under CLAUSE 6.2. To the
extent that the Seller's Share of the Mortgages Trust Available Revenue
Receipts is less than the amount required to be paid by it pursuant to
CLAUSE 6.2, then the Seller shall pay an amount equal to the shortfall
directly to Funding 1 from its own resources.
7. PAYMENT BY THE SELLER TO FUNDING 1 OF THE AMOUNT OUTSTANDING UNDER AN
INTERCOMPANY LOAN
7.1 CONDITIONS PRECEDENT TO ACCEPTANCE OF OFFER
On each occasion that the Seller offers to make a payment to Funding 1
of the amount outstanding under an Intercompany Loan (referred to in
this CLAUSE 7 as the RELEVANT INTERCOMPANY LOAN), then Funding 1 may
accept that offer but only if:
(a) the Security Trustee has received written confirmation from each
of the Rating Agencies that the then current ratings of the Notes
would not be adversely affected by Funding 1 accepting the offer;
(b) Funding 1 would receive the payment from the Seller on a Funding
1 Interest Payment Date; and
(c) Funding 1 will apply the proceeds of the payment to repay the
relevant Intercompany Loan and the relevant Issuer has confirmed
to Funding 1 that on that Funding 1 Interest Payment Date it will
use the proceeds of the relevant payment to repay the
corresponding classes of Notes.
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7.2 ADJUSTMENT TO SHARES IF OFFER ACCEPTED
If Funding 1 accepts the offer as described in CLAUSE 7.1 above, then
the Funding 1 Share of the Trust Property shall decrease by an amount
corresponding to the amount paid by the Seller and the Seller Share of
the Trust Property shall increase by the same amount.
8. ADJUSTMENT OF FUNDING 1 SHARE PERCENTAGE AND SELLER SHARE PERCENTAGE ON
CALCULATION DATES
8.1 DISTRIBUTION
On each Calculation Date, excluding, for the avoidance of doubt, the
Initial Closing Date, the Funding 1 Share Percentage and the Seller
Share Percentage will be recalculated by the Cash Manager (on behalf of
the Mortgages Trustee and the Beneficiaries) based on the aggregate
Outstanding Principal Balance of the Loans constituting the Trust
Property (as adjusted from time to time) as at the close of business on
the London Business Day immediately preceding that Calculation Date. On
each Distribution Date, the Mortgages Trustee will distribute Principal
Receipts and Revenue Receipts in accordance with CLAUSES 10 and 11
hereof.
8.2 CURRENT FUNDING 1 SHARE PERCENTAGE
On each Calculation Date (the RELEVANT CALCULATION DATE) or on the date
that the Mortgages Trust terminates, the Current Funding 1 Share
Percentage will be recalculated and the recalculated amount will take
effect from the next Distribution Date. The "Current Funding 1 Share
Percentage" will be an amount, expressed as a percentage (calculated to
an accuracy of five decimal places (rounded upwards), equal to:
A - B - C + D + E + F
--------------------- x 100
G
where,
A = the Current Funding 1 Share as calculated on the immediately
preceding Calculation Date (or, in the case of the first
Calculation Date, the Initial Funding 1 Share as at the Initial
Closing Date);
B = the amount of any Principal Receipts to be distributed to Funding
1 on the Distribution Date immediately following the relevant
Calculation Date in accordance with the provisions described in
CLAUSE 11 below;
C = the amount of any Losses sustained on the Loans in the period
from the last Calculation Date to the relevant Calculation Date
and the amount of any reductions occurring in respect of the
Loans as described in paragraphs (i) to (iv) of CLAUSE 8.4(A), in
each case allocated to Funding 1 in the Calculation Period ending
on the relevant Calculation Date;
D = an amount equal to any consideration to be paid by Funding 1 to
the Seller in relation to any New Loans to be sold to the
Mortgages Trustee on the relevant Calculation Date;
E = an amount equal to any consideration to be paid by Funding 1 to
the Seller in relation to any acquisition by Funding 1 from the
Seller on the relevant Calculation Date of an interest in the
Trust Property;
6
F = an amount equal to any Capitalised Interest accruing on a Loan
due to Borrowers taking payment holidays or which has been
allocated to Funding 1 since the immediately preceding
Calculation Date, less the amount to be paid by the Seller on the
relevant Distribution Date to acquire an interest in the Trust
Property in accordance with CLAUSE 6 above; and
G = the aggregate Outstanding Principal Balance of all the Loans
constituting the Trust Property as at the relevant Calculation
Date including after making the distributions, allocations and
additions referred to in (B), (C), (D), (E) and (F) above, and
after taking account of any distributions of Principal Receipts
to Funding 1 and the Seller, the amount of any Losses allocated
to Funding 1 and the Seller, the amount of any increase in the
balances of the loans constituting the Trust Property due to
capitalisation of insurance premiums due by Borrowers or
Borrowers taking Payment Holidays under Loans, the adjustments
referred to in paragraphs (i) to (iv) (inclusive) of CLAUSE
8.4(A) below and the amount of any other additions or
subtractions to the Trust Property.
8.3 CURRENT FUNDING 1 SHARE
The "Current Funding 1 Share" will be an amount equal to:
A - B - C + D + E + F
where "A", "B", "C", "D", "E" and "F" have the meanings specified in
CLAUSE 8.2 above.
8.4 ADJUSTMENTS TO TRUST PROPERTY
(a) On each relevant Calculation Date, the aggregate Outstanding Principal
Balance of the Loans constituting the Trust Property shall be reduced
or, as the case may be, deemed to be reduced for the purposes of the
calculation set out in "G" above, if any of the following events has
occurred during the Calculation Period immediately preceding the
relevant Calculation Date:
(i) any Borrower exercises a right of set-off in relation to Loans
constituting part of the Trust Property so that the amount of
principal and/or interest owing under a loan is reduced but no
corresponding amount is received by the Mortgages Trustee in
which event the total amount of Trust Property shall be reduced
by an amount equal to the amount set-off; and/or
(ii) a Loan or its Related Security (i) is in breach of the Loan
Warranties in the Mortgage Sale Agreement, (ii) is the subject of
a Further Advance or (iii) is the subject of a Product Switch in
the circumstances set out in CLAUSE 8.4 of the Mortgage Sale
Agreement or other obligation of the Seller to repurchase, and if
the Seller fails to repurchase the Loan or Loans under the
relevant Mortgage Account and their Related Security as required
by the terms of the Mortgage Sale Agreement, then the Trust
Property shall be deemed to be reduced for the purposes of the
calculation of "G" in CLAUSE 8.2 above by an amount equal to the
Outstanding Principal Balance of the relevant Loan or Loans under
the relevant Mortgage Account together with Arrears of Interest
and Accrued Interest; and/or
(iii) the Seller would be required to repurchase a Loan and its Related
Security in accordance with the terms of the Mortgage Sale
Agreement, but such Loan and its Related Security are not capable
of repurchase, in which case the Trust Property shall be deemed
to be reduced for the purposes of the calculation of "G" in
CLAUSE 8.2 above by an amount equal to the Outstanding Principal
Balance of the relevant Loan
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or Loans under the relevant Mortgage Account together with
Arrears of Interest and Accrued Interest; and/or
(iv) the Seller materially breaches any other material warranty under
the Mortgage Sale Agreement and/or (for so long as it is the
Servicer) the Servicing Agreement, in which event the aggregate
Outstanding Principal Balance of Loans constituting the Trust
Property shall be deemed for the purposes of the calculation of
"G" in CLAUSE 8.2 above to be reduced by an amount equivalent to
all losses, costs, liabilities, claims, expenses and damages
incurred by the Beneficiaries as a result of such breach.
(b) The reductions and deemed reductions set out in paragraph (i) to (iv)
(inclusive) of CLAUSE 8.4(A) above shall be made on the relevant
Calculation Date first to the Seller's Share (including the Minimum
Seller Share) of the Trust Property only, and thereafter shall be made
to the Funding 1 Share of the Trust Property.
(c) If at any time after the Initial Closing Date the Mortgages Trustee
holds, or there is held to its order, or it receives, or there is
received to its order any property, interest, right or benefit relating
to any Loan and its Related Security which is or has been subject to
any reduction or deemed reduction pursuant to paragraphs (i) to (iv)
(inclusive) of CLAUSE 8.4(A) above, then such property, interest, right
or benefit shall constitute a Revenue Receipt under the relevant Loan.
Such Revenue Receipt shall belong to Funding 1 (but only if and to the
extent that the related reductions were applied against the Funding 1
Share of the Trust Property) and thereafter shall belong to the Seller.
8.5 CURRENT SELLER SHARE PERCENTAGE
On each Calculation Date, the "Current Seller Share Percentage" will be
an amount calculated to the accuracy of five decimal places equal to:
100% - Current Funding 1 Share Percentage.
8.6 CURRENT SELLER SHARE
The "Current Seller Share" will be an amount equal to:
Outstanding Principal Balance of all the Loans in the Trust Property
on the relevant Calculation Date - Current Funding 1 Share.
8.7 FUNDING 1 SHARE/SELLER SHARE
Neither the Funding 1 Share nor the Seller Share may be reduced below
zero. At all times the Funding 1 Share Percentage and the Seller Share
Percentage shall be equal to 100 per cent. of the Trust Property.
9. MINIMUM SELLER SHARE
9.1 INITIAL MINIMUM SELLER SHARE
The Seller Share of the Trust Property includes an amount equal to the
Minimum Seller Share. Unless and until the Funding 1 Share of the Trust
Property is in an amount equal to zero or an Asset Trigger Event
occurs, the Seller will not be entitled to receive Principal Receipts
which would reduce the Seller Share of the Trust Property to an amount
less than the Minimum Seller Share and the Seller consents and directs
the Mortgages Trustee accordingly.
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9.2 FLUCTUATION OF MINIMUM SELLER SHARE ON EACH CALCULATION DATE
At the Initial Closing Date, the Minimum Seller Share was
(pound)505,862,790.74. The amount of the Minimum Seller Share will be
recalculated on each Calculation Date in accordance with the following
formula:
X + Y + Z
where:
X = 5% of the aggregate Outstanding Principal Balance of all Loans
comprised in the Trust Property;
Y = the product of: (p x q) x r where:
p = 8%;
q = the FLEXIBLE DRAW CAPACITY, being an amount equal to the excess
of (i) the maximum amount that Borrowers are entitled to draw
under Flexible Loans included in the Trust Property (whether or
not drawn) over (ii) the aggregate principal balance of actual
Flexible Loan advances made to Borrowers in the Trust Property on
the relevant Calculation Date (but excluding the Initial Advances
made thereunder); and
r = 3; and
Z = the aggregate sum of reductions deemed made (if any) in
accordance with paragraphs (ii), (iii) and (iv) of CLAUSE 8.4(A).
9.3 RECALCULATION OF MINIMUM SELLER SHARE FOLLOWING OCCURRENCE OF
EXCEPTIONAL EVENTS
Prior to the occurrence of a Trigger Event:
(a) the calculation of the Minimum Seller Share in accordance with
CLAUSE 9.2 above will be recalculated or increased (in
consultation with the relevant Rating Agencies) if the Seller
merges or otherwise combines its business with another bank or
other financial institution so as to increase the risks
associated with Borrowers holding deposits in Halifax accounts
and such merger or combination would adversely affect the then
current ratings of the Notes and such adverse effect on the then
current ratings of the Notes would be avoided if the Minimum
Seller Share was so recalculated or increased;
(b) the calculation of the Minimum Seller Share in accordance with
CLAUSE 9.2 above will be recalculated or increased (in
consultation with the relevant Rating Agencies) if notice has
been received from one or more of the Rating Agencies that the
then current ratings of the Notes would be downgraded and that
such downgrade would be avoided if the Minimum Seller Share was
so recalculated or increased;
(c) the amount of the Minimum Seller Share as calculated in
accordance with CLAUSE 9.2 above will be decreased (and the
calculation thereof amended accordingly) from time to time at the
request of the Seller or Funding 1 (acting reasonably) provided
that the Security Trustee has received written confirmation from
each of the Rating Agencies that there would be no adverse effect
on the then current ratings of the Notes as a result thereof.
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10. ALLOCATION AND DISTRIBUTION OF REVENUE RECEIPTS
10.1 ALLOCATION AND DISTRIBUTION OF THIRD PARTY AMOUNTS
Pursuant to the Cash Management Agreement, the Cash Manager (at the
direction of the Mortgages Trustee on behalf of the Beneficiaries at
their direction and with their consent) will deduct, as and when
identified, Third Party Amounts from the Revenue Receipts standing to
the credit of the Mortgages Trustee GIC Account, and pay over the same
to the proper recipients thereof. The Mortgages Trustee and the
Beneficiaries hereby consent to such deductions.
10.2 ALLOCATION AND DISTRIBUTION OF MORTGAGES TRUST AVAILABLE REVENUE
RECEIPTS
On each Distribution Date the Cash Manager (at the direction of the
Mortgages Trustee and on behalf of the Beneficiaries at their direction
and with their consent) will allocate and distribute Mortgages Trust
Available Revenue Receipts as follows:
(a) firstly, in or towards satisfaction pari passu and pro rata
according to the respective amounts thereof of:
(i) any costs, charges, liabilities and expenses then due or to
become due to the Mortgages Trustee under the provisions of
this Deed or any terms agreed by the Mortgages Trustee with
the Seller and Funding 1 in writing together with VAT
thereon as provided herein (if payable); and
(ii) any amounts due and payable by the Mortgages Trustee to
third parties in respect of the Mortgages Trust and
incurred without breach by the Mortgages Trustee of the
documents to which it is a party and for which payment has
not been provided for elsewhere), (including amounts due to
H.M Customs and Excise and/or to the Inland Revenue or any
other taxation authority which has jurisdiction over the
Trust Property or the Mortgages Trustee in respect of any
stamp, issue, registration, documentary and other fees,
duties and taxes (including interest and penalties) payable
by the Mortgages Trustee in connection with (i) the
execution and delivery of this Deed; (ii) any action to be
taken by or on behalf of the Mortgages Trustee to enforce
or to resolve any doubt concerning or, for any other
purpose in relation to, the Mortgages Trust Deed; and (iii)
any such tax which is primarily due from either or both of
the Seller and Funding 1 in their capacities as
Beneficiaries (and, for the avoidance of doubt, only in
such capacities) in circumstances where the Mortgages
Trustee has made a payment of such tax (or part thereof) by
reason of a failure by the Seller or Funding 1 to discharge
their primary liability in respect of such tax);
(b) secondly, in or towards satisfaction of any remuneration then due
and payable or to become due and payable during the following
Calculation Period to the Servicer and any costs, charges,
liabilities and expenses then due or to become due to the
Servicer under the provisions of the Servicing Agreement,
together with VAT thereon as provided therein (if payable);
(c) thirdly, to allocate and pay to Funding 1 an amount equal to the
lesser of:
(x) an amount determined by multiplying the total amount of the
remaining Mortgages Trust Available Revenue Receipts by the
Funding 1 Share
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Percentage of the Trust Property (as determined on the
Relevant Share Calculation Date); and
(y) the aggregate of Funding 1's obligations on the immediately
succeeding Funding 1 Interest Payment Date as set out under
the Funding 1 Pre-Enforcement Revenue Priority of Payments
or, as the case may be, the Funding 1 Post-Enforcement
Priority of Payments (but excluding any principal amount
due under any Intercompany Loan and/or items (j) and (k) of
the Funding 1 Post-Enforcement Priority of Payments), less
(in each case only to the extent that such amounts of
interest or income would not otherwise be payable under the
Intercompany Loan or, as applicable, the Notes, on the
succeeding Interest Payment Date) the sum of (i) the
interest or other income credited or to be credited to
Funding 1's Bank Accounts on the immediately succeeding
Funding 1 Interest Payment Date and (ii) all other income
(not derived from the distribution of Revenue Receipts
under the Mortgages Trust) which will constitute Funding 1
Available Revenue Receipts on the succeeding Funding 1
Interest Payment Date;
(d) fourthly, to allocate and distribute to the Mortgages Trustee
and/or Funding 1 (as applicable), an amount equal to any Loss
Amount suffered or incurred by it or them (as applicable); and
(e) fifthly, to allocate and distribute to the Seller an amount equal
to (if positive) the Mortgages Trust Available Revenue Receipts
less the amount of such Mortgages Trust Available Revenue
Receipts applied and/or allocated under paragraphs (a) to (d)
above.
11. ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS
11.1 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS
(a) On each Calculation Date (the RELEVANT CALCULATION DATE), prior
to distributing any Principal Receipts, the Cash Manager shall
ascertain:
(i) the amount of Mortgages Trust Available Principal Receipts;
(ii) whether the Distribution Date immediately succeeding the relevant
Calculation Date is within a Cash Accumulation Period relating to
a Bullet Term Advance or a Scheduled Amortisation Instalment (the
Cash Accumulation Period being calculated separately for each
Bullet Term Advance and Scheduled Amortisation Instalment); and
(iii) Funding 1's Cash Accumulation Requirement and Repayment
Requirement.
(b) On each Distribution Date, the Cash Manager (at the direction of
the Mortgages Trustee acting on behalf of the Beneficiaries at their
direction and with their consent) shall then allocate and distribute
Principal Receipts as provided in this CLAUSE 11.
11.2 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS PRIOR TO THE
OCCURRENCE OF A TRIGGER EVENT
On each Distribution Date where no Trigger Event has occurred on or
before the immediately preceding Calculation Date, the Cash Manager
shall allocate and distribute Mortgages Trust Available Principal
Receipts as follows:
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(a) firstly, where Funding 1 has no Cash Accumulation Requirement and
no Repayment Requirement on that Distribution Date, to allocate
the Mortgages Trust Available Principal Receipts to the Seller
until the Seller Share of the Trust Property (as calculated on
the Relevant Share Calculation Date) is equal to the Minimum
Seller Share;
(b) secondly, if Funding 1 has a Cash Accumulation Requirement on
that Distribution Date, to allocate the Mortgages Trust Available
Principal Receipts to Funding 1 in an amount up to but not
exceeding Funding 1's Cash Accumulation Requirement on that
Distribution Date;
(c) thirdly, if Funding 1 has a Repayment Requirement on that
Distribution Date, to allocate the Mortgages Trust Available
Principal Receipts to Funding 1 in an amount up to but not
exceeding Funding 1's Repayment Requirement on that Distribution
Date; and
(d) fourthly, to allocate the remainder of the Mortgages Trust
Available Principal Receipts, if any, to the Seller until the
Seller Share of the Trust Property (as calculated on the Relevant
Share Calculation Date) is equal to the Minimum Seller Share.
11.3 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS ON OR AFTER THE
OCCURRENCE OF A NON-ASSET TRIGGER EVENT BUT PRIOR TO THE OCCURRENCE OF
AN ASSET TRIGGER EVENT
On each Distribution Date where a Non-Asset Trigger Event has occurred
on or before the immediately preceding Calculation Date and an Asset
Trigger Event has not occurred on or before that Calculation Date, all
Mortgages Trust Available Principal Receipts shall be allocated and
distributed to Funding 1 until the Funding 1 Share of the Trust
Property (as calculated on the relevant Share Calculation Date) is zero
and shall thereafter be allocated and paid to the Seller.
11.4 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS ON OR AFTER THE
OCCURRENCE OF AN ASSET TRIGGER EVENT
On each Distribution Date where an Asset Trigger Event has occurred on
or before the immediately preceding Calculation Date, all Mortgages
Trust Available Principal Receipts shall be allocated and distributed
pari passu and pro rata between Funding 1 and the Seller according to
the Current Funding 1 Share Percentage of the Trust Property (as
calculated on the Relevant Share Calculation Date) and the Current
Seller Share Percentage of the Trust Property (as calculated on the
Relevant Share Calculation Date) respectively until, in the case of
Funding 1, the Funding 1 Share of the Trust Property is zero (and, for
the avoidance of doubt, such payments may reduce the Current Seller
Share to an amount less than the Minimum Seller Share). When the
Funding 1 Share of the Trust Property is zero, the remaining Mortgages
Trust Available Principal Receipts (if any) shall be allocated to the
Seller.
12. ALLOCATION OF LOSSES
Subject as provided in this Deed (and in particular, CLAUSE 8), all
Losses sustained on the Loans during a Calculation Period shall be
applied in reducing pro rata both the Funding 1 Share and the Seller
Share of the Trust Property. Funding 1's share and the Seller's share
of the Losses shall be determined by multiplying the Losses in the
relevant Calculation Period by the Current Funding 1 Share Percentage,
(as calculated on the Relevant Share Calculation Date), the product of
which shall be allocated to Funding 1, and the remainder of such Losses
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shall be allocated to the Seller, on each Calculation Date, in each
case prior to calculating the allocation of Mortgages Trustee Available
Principal Receipts on that Calculation Date.
13. FUNDING 2 BECOMES A BENEFICIARY OF THE MORTGAGES TRUST
On not more than 60 days' written notice nor less than 20 days' written
notice to the Mortgages Trustee, Funding 1 and the Seller may direct
the Mortgages Trustee to add Funding 2 as a beneficiary to the
Mortgages Trust. The Mortgages Trustee shall include Funding 2 as a
beneficiary of the Mortgages Trust if Funding 1 (or the Security
Trustee) notifies the Mortgages Trustee in writing that the following
conditions precedent are satisfied on the date of such inclusion:
(a) that the Security Trustee has received written confirmation from
each of the Rating Agencies that the inclusion of Funding 2 as a
beneficiary of the Mortgages Trust would not have an adverse
effect on the then current ratings of the Notes;
(b) no deficiency is recorded on the Principal Deficiency Ledger as
at the most recent Funding 1 Interest Payment Date;
(c) no Note Event of Default or Intercompany Loan Event of Default
shall have occurred which is continuing or unwaived as at the
relevant Distribution Date;
(d) requisite amendments have been made to the Transaction Documents
to enable the inclusion of Funding 2 as a beneficiary to the
Mortgages Trust (including, without limitation, changes to the
way in which the Mortgages Trustee will allocate Mortgages Trust
Revenue Receipts and Mortgages Trust Principal Receipts under
this Deed); and
(e) the General Reserve Fund has not been debited on or before the
relevant Distribution Date for the purposes of curing a Principal
Deficiency in respect of the Term Advances in circumstances where
the General Reserve Fund has not been replenished by a
corresponding amount by the date.
14. LEDGERS
The Mortgages Trustee shall maintain, or shall procure that there are
maintained, the following Mortgages Trustee Ledgers:
(a) the Principal Ledger, which shall record all receipts of
Principal Receipts and distribution of the same to Funding 1 and
the Seller;
(b) the Revenue Ledger, which shall record all receipts of Revenue
Receipts and distribution of the same to Funding 1 and the
Seller;
(c) the Losses Ledger, which shall record Losses in relation to the
Loans; and
(d) the Funding 1 Share/Seller Share Ledger which shall record the
Current Funding 1 Share, the Current Seller Share of the Trust
Property, the Current Funding 1 Share Percentage and the Current
Seller Share Percentage.
15. COSTS AND EXPENSES OF THE MORTGAGES TRUSTEE
The Mortgages Trustee shall be entitled to charge and be remunerated
for the work undertaken by it as trustee of the trusts created by this
Deed. The remuneration shall be on
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such terms (if any) as the Mortgages Trustee may from time to time
agree with the Seller and Funding 1 in writing. Funding 1 and the
Seller shall indemnify the Mortgages Trustee from time to time with
such regularity as is reasonably agreed between the parties, for the
documentable costs and expenses directly and properly incurred by the
Mortgages Trustee in performing its obligations hereunder together with
any amounts in respect of Irrecoverable VAT incurred in respect of such
costs and expenses. The cost of such indemnity shall be paid in
accordance with the priority of payments set out in CLAUSE 10.2 of this
Deed.
16. DIRECTIONS FROM BENEFICIARIES
16.1 On the Initial Closing Date, the Mortgages Trustee entered into the
Servicing Agreement, the Cash Management Agreement, the Mortgage Sale
Agreement, the Mortgages Trustee Guaranteed Investment Contract and the
Bank Account Agreement.
16.2 Subject to CLAUSE 16.4 below, the Mortgages Trustee covenants with the
Seller and Funding 1 that the Mortgages Trustee shall take all
necessary steps and do everything which both Funding 1 and the Seller
(acting together) may reasonably request or direct it to do in order to
give effect to the terms of this Deed or the other Transaction
Documents to which the Mortgages Trustee is a party.
16.3 Funding 1 and the Seller covenant with each other that neither shall
direct or request the Mortgages Trustee to do any act or thing which
breaches the terms of, or is otherwise expressly dealt with (such that
the Mortgages Trustee has no discretion) by, any of the Transaction
Documents.
16.4 The Mortgages Trustee will not be bound and shall have no power to take
any proceedings, actions or steps under or in connection with any of
this Deed or the other Transaction Documents to which it is a party
unless:
(a) it shall have been directed to do so by the Beneficiaries or it
is required to do so under any express provision of this Deed or
the other Transaction Documents (but subject to CLAUSE 16.2 in
respect of conflict of directions); and
(b) it shall have been indemnified to its satisfaction against all
liabilities, proceedings, claims and demands to which it may be
or become liable and all costs, charges and expenses which may be
incurred by it in connection therewith and the terms of such
indemnity may include the provision of a fighting fund,
non-recourse loan or other similar arrangement.
16.5 COVENANT OF THE MORTGAGES TRUSTEE
Subject to CLAUSE 16.2, the Mortgages Trustee covenants with each of
the Seller and Funding 1 to exercise all of its rights arising under
the Trust Property (including without limitation any rights of
enforcement) for the benefit of and on behalf of the Beneficiaries.
17. TRANSFERS
17.1 FUNDING 1 SHALL NOT ASSIGN
Subject to the terms of the Transaction Documents (including for the
avoidance of doubt, the Funding 1 Deed of Charge and the Second
Supplemental Funding 1 Deed of Charge) and the right of Funding 1 (or
the Security Trustee or a Receiver on its behalf) to sell the Funding 1
Share of the Trust Property following the service of an Intercompany
Loan Enforcement Notice (which right is hereby conferred), Funding 1
covenants with the Seller that it shall not,
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and shall not purport to, sell, assign, transfer, convey, charge,
declare a trust over, create any beneficial interest in, or otherwise
dispose of the Funding 1 Share in the Trust Property and/or its rights
under this Deed, or any of Funding 1's rights, title and interest or
benefit in the Trust Property and/or this Deed to or in favour of a
third party.
17.2 SELLER SHALL NOT ASSIGN
Subject to the terms of the Transaction Documents, the Seller covenants
with Funding 1 that it shall not, and shall not purport to, sell,
assign, transfer, convey, charge, declare a trust over, create any
beneficial interest in, or otherwise dispose of the Seller Share in the
Trust Property and/or its rights under this Deed or any of the Seller's
rights, title and interest or benefit in the Trust Property and/or this
Deed to or in favour of a third party, without the prior consent of
Funding 1 (such consent not to be unreasonably withheld).
17.3 TRANSFERS TO FUNDING 2
Subject to CLAUSE 13, the parties hereby acknowledge that Funding 2 may
become a beneficiary to the Mortgages Trust after the Initial Closing
Date and if it is to become such a beneficiary then the Seller and/or
Funding 1 shall be entitled to sell, assign, transfer, convey, charge,
declare a trust over, create a beneficial interest in, or otherwise
dispose of their respective shares in the Trust Property to Funding 2
or, as the case may be, Funding 1 or the Seller.
18. COVENANTS OF THE MORTGAGES TRUSTEE
Save with the prior written consent of the Beneficiaries or as provided
in or envisaged by this Deed and the other Transaction Documents to
which the Mortgages Trustee is a party, the Mortgages Trustee shall
not, so long as it is acting as Mortgages Trustee hereunder:
(A) NEGATIVE PLEDGE
create or permit to subsist any mortgage, standard security,
pledge, lien, charge, assignation in security or other security
interest whatsoever (unless arising by operation of law), upon
the whole or any part of its assets (including any uncalled
capital) or its undertakings, present or future;
(B) DISPOSAL OF ASSETS
transfer, sell, lend, part with or otherwise dispose of, or deal
with, or grant any option or present or future right to acquire
any of its assets or undertakings or any interest, estate, right,
title or benefit therein or thereto or agree or attempt or
purport to do so;
(C) EQUITABLE INTEREST
permit any person other than the Beneficiaries to have any
equitable or beneficial interest in any of its assets or
undertakings or any interest, estate, right, title or benefit
therein;
(D) BANK ACCOUNTS
have an interest in any bank account, other than as set out in
the Transaction Documents;
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(E) RESTRICTIONS ON ACTIVITIES
carry on any business other than as described in this Deed and
the Mortgage Sale Agreement;
(F) BORROWINGS
incur any indebtedness in respect of borrowed money whatsoever or
give any guarantee or indemnity in respect of any such
indebtedness;
(G) MERGER
consolidate or merge with any other person or convey or transfer
its properties or assets substantially as an entirety to any
other person;
(H) EMPLOYEES OR PREMISES
have any employees or premises or subsidiaries;
(I) FURTHER SHARES
issue any further shares;
(J) ACQUISITIONS
acquire any assets other than pursuant to the terms of the
Mortgage Sale Agreement and this Mortgages Trust Deed (whereby
any New Portfolio shall be held by the Mortgages Trustee subject
to the Mortgages Trust); or
(K) UNITED STATES ACTIVITIES
engage in any activities in the United States (directly or
through agents) or derive any income from United States sources
as determined under United States income tax principles or hold
any property if doing so would cause it to be engaged or deemed
to be engaged in a trade or business within the United States as
determined under United States tax principles.
19. POWER TO DELEGATE
19.1 POWER TO DELEGATE
Subject to CLAUSE 19.2, the Mortgages Trustee may (notwithstanding any
rule of law or equity to the contrary) delegate (revocably or
irrevocably and for a limited or unlimited period of time) the
performance of all or any of its obligations and the exercise of all or
any of its powers under this Deed or imposed or conferred on it by law
or otherwise to any person or body of persons fluctuating in number
selected by it and any such delegation may be by power of attorney or
in such other manner as the Mortgages Trustee may think fit and may be
made upon such terms and conditions (including the power to
sub-delegate) as the Mortgages Trustee may think fit.
19.2 NO FURTHER APPOINTMENTS
Notwithstanding the provisions of CLAUSE 19.1, the Mortgages Trustee
shall not appoint any agent, attorney or other delegate having power to
act in respect of the Trust Property unless it
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is directed in writing to do so by the Beneficiaries. The appointment
of any agent, attorney or other delegate shall terminate immediately
upon the occurrence of a Trigger Event.
20. POWERS OF INVESTMENT
Save as expressly provided for in this Deed, the Mortgages Trustee
Guaranteed Investment Contract and the Bank Account Agreement, the
Mortgages Trustee shall have no further or other powers of investment
with respect to the Trust Property and neither the Trustee Xxx 0000 nor
any other provision relating to trustee powers of investment implied by
statute or general law shall apply to the Mortgages Trust and, for the
avoidance of doubt, the statutory power to accumulate income conferred
on trustees by Section 31 of the Trustee Act 1925 is expressly
excluded.
21. OTHER PROVISIONS REGARDING THE MORTGAGES TRUSTEE
21.1 NO ACTION TO IMPAIR TRUST PROPERTY
Except for actions expressly authorised by this Deed, the Mortgages
Trustee shall take no action reasonably likely to impair the interests
of the Beneficiaries in any Trust Property now existing or hereafter
created or to impair the value of any Loan or its Related Security
subject to the Mortgages Trust.
21.2 LITIGATION
The Mortgages Trustee must not prosecute or defend any legal or other
proceedings anywhere in the world (at the cost of the Trust Property)
unless it obtains legal or other advice that it is in the interests of
the Beneficiaries to do so.
21.3 NO IMPLIED DUTIES
The duties and obligations of the Mortgages Trustee under the Mortgages
Trust shall be determined solely by the express provisions of this Deed
(but without prejudice to the duties and obligations of the Mortgages
Trustee under any of the other Transaction Documents). The Mortgages
Trustee shall not be liable under this Deed except for the performance
of such duties and obligations as shall be specifically set forth in
this Deed. No implied covenants or obligations shall be read into this
Deed against the Mortgages Trustee, and the permissible right of the
Mortgages Trustee to do things set out in this Deed shall not be
construed as a duty.
21.4 NO LIABILITY
Neither the Mortgages Trustee, Funding 1 (in its capacity as a
Beneficiary hereunder) nor the Seller (in its capacity as a Beneficiary
hereunder) shall be liable to each other, in the absence of wilful
default, negligence or breach of the terms of this Deed, in respect of
any loss or damage which arises out of the exercise or attempted or
purported exercise or failure to exercise any of their respective
powers.
21.5 RELIANCE ON CERTIFICATES
The Mortgages Trustee may rely on and shall be protected in acting on,
or in refraining from acting in accordance with, any resolution,
officer's certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented to it pursuant to
the Transaction Documents by the proper party or parties.
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21.6 RELIANCE ON THIRD PARTIES
The Mortgages Trustee may, in relation to these presents, act on the
opinion or advice of or a certificate or any information obtained from
any lawyer, banker, valuer, broker, accountant, financial adviser,
securities dealer, merchant bank, computer consultant or other expert
in the United Kingdom or elsewhere and shall not, provided that it
shall not have acted fraudulently or in breach of any of the provisions
of the Transaction Documents, be responsible for any loss occasioned by
so acting. Any such opinion, advice, certificate or information may be
sent or obtained by letter, telemessage, telex, cable or facsimile
device and the Mortgages Trustee shall not be liable for acting on any
opinion, advice, certificate or information purporting to be so
conveyed although the same shall contain some error or shall not be
authentic, provided that such error or lack of authenticity shall not
be manifest.
22. NO RETIREMENT OF MORTGAGES TRUSTEE
22.1 NO RETIREMENT
The Mortgages Trustee shall not, and shall not purport to, retire as
the trustee of the Mortgages Trust or appoint any additional trustee of
the Mortgages Trust and shall have no power to retire or appoint any
additional trustee under the Trustee Xxx 0000 or otherwise.
22.2 NO REPLACEMENT
Neither the Seller nor Funding 1 shall at any time remove or purport to
remove and/or replace the Mortgages Trustee as the trustee of the
Mortgages Trust.
22.3 NO TERMINATION
Prior to the payment by Funding 1 of all amounts owing under the
Intercompany Loan Agreements and under the Transaction Documents,
neither the Seller nor Funding 1 shall at any time, except in
accordance with the provisions of CLAUSES 16 and 23, terminate or
purport to terminate the Mortgages Trust and, in particular, but
without prejudice to the generality of the foregoing, the Seller and
Funding 1 shall not in reliance on their absolute beneficial interests
in the Trust Property call for the transfer to them or vesting in them
of the legal estate in all or any part of the Trust Property.
23. TERMINATION
The Mortgages Trust shall terminate in respect of the Trust Property
(if any then remains) upon the later to occur of:
(a) the date upon which all amounts due from Funding 1 to its secured
creditors have been paid in full; and
(b) any other date agreed in writing by Funding 1 and the Seller.
24. FURTHER ASSURANCES
The parties agree that they will co-operate fully to do all such
further acts and things and execute any further documents as may be
necessary or desirable to give full effect to the arrangements
contemplated by this Deed.
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25. AMENDMENTS
25.1 AMENDMENTS AND WAIVERS
Without prejudice to CLAUSE 25.8 of the Funding 1 Deed of Charge, no
amendment or waiver of any provision of this Deed nor consent to any
departure by any of the parties therefrom shall in any event be
effective unless the same shall be in writing and signed by each of the
parties to this Deed. In the case of a waiver or consent, such waiver
or consent shall be effective only in the specific instance and as
against the party or parties giving it for the specific purpose for
which it is given.
25.2 ENTIRE AGREEMENT
This Deed contains a final and complete integration of all prior
expressions by the parties with respect to the subject matter of this
Deed and constitutes the entire agreement among the parties with
respect to the subject matter of this Deed superseding all prior oral
or written understandings other than the other Transaction Documents.
26. NON PETITION COVENANT
The Seller hereby agrees that it shall not institute against either
Funding 1 or the Mortgages Trustee any winding-up, administration,
insolvency or similar proceedings so long as any sum is outstanding
under any Intercompany Loan Agreement for the duration of one year plus
one day since the last day on which any such sum was outstanding.
27. NO PARTNERSHIP OR AGENCY
Nothing in this Deed shall be taken to constitute or create a
partnership between any of the parties to this Deed or to make or
appoint the Seller the agent of Funding 1 (or vice versa).
28. CALCULATIONS
In the absence of manifest error, any determination or calculation made
by or on behalf of the Mortgages Trustee in connection with the
provisions of this Deed shall be deemed to be conclusive.
29. NO WAIVER; REMEDIES
No failure on the part of any party to this Deed to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or
remedy preclude any other or further exercise thereof or the exercise
of any other right or remedy. The remedies in this Deed are cumulative
and not exclusive of any remedies provided by law.
30. SEVERABILITY
Where any provision in or obligation under this Deed shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations under
this Deed, or of such provision or obligation in any other
jurisdiction, shall not be affected or impaired thereby.
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31. TAX
31.1 Any payment by Funding 1 to the Seller to increase its share of the
Trust Property shall be inclusive of value added tax (if any).
31.2 Any payment by the Seller to Funding 1 which would increase its share
of the Trust Property shall be exclusive of VAT (if any).
31.3 Any stamp duty or stamp duty reserve tax in respect of any increase in
Funding 1's share of the Trust Property shall be payable by the Seller.
32. CONFIDENTIALITY
32.1 GENERAL OBLIGATION OF CONFIDENTIALITY
Unless otherwise required by applicable law, and subject to CLAUSE 32.2
below, each of the parties agrees not to disclose to any person any
information relating to the business, finances or other matters of a
confidential nature of or relating to any other party to this Deed or
any of the Transaction Documents which it may have obtained as a result
of having entered into this Deed or otherwise.
32.2 EXCEPTIONS
The provisions of CLAUSE 32.1 above shall not apply:
(a) to the disclosure of any information to any person who is a party
to any of the Transaction Documents as expressly permitted by the
Transaction Documents;
(b) to the disclosure of any information which is or becomes public
knowledge otherwise than as a result of the wrongful conduct of
the recipient;
(c) to the extent that the recipient is required to disclose the same
pursuant to any law or order of any court or pursuant to any
direction or requirement (whether or not having the force of law)
of any central bank or any governmental or other regulatory or
Taxation authority;
(d) to the disclosure of any information to professional advisers who
receive the same under a duty of confidentiality;
(e) to the disclosure of any information with the consent of the
parties to this Deed;
(f) to the disclosure to the Rating Agencies or any of them of such
information as may be requested by any of them for the purposes
of setting or reviewing the rating assigned to the Notes (or any
of them), provided that no information which would disclose the
identity of a Borrower shall be disclosed to the Rating Agencies
or any of them;
(g) to the disclosure of any information disclosed to a prospective
assignee of Funding 1 (provided that it is disclosed on the basis
that the recipient will hold it confidential); or
(h) to any disclosure for the purposes of collecting in or enforcing
the Trust Property or any of it.
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33. EXCLUSION OF THIRD PARTY RIGHTS
The parties to this Deed do not intend that any term of this Deed
should be enforced, by virtue of the Contracts (Rights of Third
Parties) Xxx 0000, by any person who is not a party to this Deed.
34. ADDRESSES FOR NOTICES
Any notices to be given pursuant to this Deed will be sufficiently
served if sent by prepaid first class post, by hand or facsimile
transmission and will be deemed to be given (in the case of facsimile
transmission) when despatched (where delivered by hand) on the day of
delivery if delivered before 17.00 hours on a London Business Day or on
the next London Business Day if delivered thereafter or (in the case of
first class post) when it would be received in the ordinary course of
the post and shall be sent:
(a) in the case of the Seller: to Halifax plc (LP/3/3/SEC), at
Xxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxxxxxxx XX0 0XX (facsimile number
x00 (0)000 000 0000) for the attention of the Head of Mortgage
Securitisation with a copy to HBOS Treasury Services plc, 00 Xxx
Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number +44 (0)20 7574
8303) for the attention of Head of Mortgage Securitisation and
Covered Bonds;
(b) in the case of the Mortgages Trustee: to Permanent Mortgages
Trustee Limited, 00 Xxxxxxxxx, Xx Xxxxxx, Xxxxxx XX0 0XX, Channel
Islands (facsimile number x00 (0) 0000 000000) for the attention
of the Company Secretary with a copy to HBOS Treasury Services
plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number +44
(0)00 0000 0000) for the attention of Head of Mortgage
Securitisation and Covered Bonds;
(c) in the case of Funding 1: to Permanent Funding (No. 1) Limited,
Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxx, Xxxxxx, XX0X 0XX (facsimile
number x00 (0) 00 0000 0000) for the attention of the Secretary
with a copy to HBOS Treasury Services plc, 00 Xxx Xxxxx Xxxxxx,
Xxxxxx XX0X 0XX (facsimile number x00 (0)00 0000 0000) for the
attention of Head of Mortgage Securitisation and Covered Bonds;
and
(d) in each case with a copy to The Bank of New York, One Canada
Square, Xxxxxx X00 0XX, (facsimile number x00 (0)00 0000 0000 /
6399) for the attention of Global Structured Finance - Corporate
Trust,
or to such other address or facsimile number or for the attention of
such other person or entity as may from time to time be notified by any
party to the others by written notice in accordance with the provisions
of this CLAUSE 33.
35. GOVERNING LAW AND SUBMISSION TO JURISDICTION
35.1 GOVERNING LAW
This Deed is governed by English law.
35.2 SUBMISSION TO JURISDICTION
Each party to this Deed hereby irrevocably submits to the non-exclusive
jurisdiction of the English courts in any action or proceeding arising
out of or relating to this Deed, and hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and
determined by such courts. Each party to this Deed hereby irrevocably
waives, to the fullest
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extent it may possibly do so, any defence or claim that the English
courts are an inconvenient forum for the maintenance or hearing of such
action or proceeding. The Mortgages Trustee irrevocably appoints
Structured Finance Management Limited at Xxxxxxxxx Xxxxx, Xxxxxxxxx
Xxxx, Xxxxxx XX0X 0XX as its agent for service of process.
36. EXCLUSION XX XXXXXXX XXX 0000
Xxx Xxxxxxx Xxx 0000 is hereby excluded to the maximum extent
permissible, to the intent that it shall not apply to the trusts
constituted by this Deed and that the parties shall be in the same
position as they would be had that Act not come into force.
IN WITNESS of which this Deed has been executed by the parties hereto as a deed
which has been delivered on the date first appearing on page one.
SIGNATORIES
EXECUTED as a DEED by )
HALIFAX plc )
as Seller, Cash Manager )
and Beneficiary ) .............................
acting by its attorney )
in the presence of ) (as attorney for HALIFAX PLC)
Witness's Signature:......................
Name: ......................
Address: ......................
EXECUTED as a DEED by )
PERMANENT FUNDING (NO. 1) )
LIMITED acting by its attorney ) ..................................
in the presence of: ) (as attorney for PERMANENT FUNDING
(NO. 1) LIMITED)
Witness's Signature:......................
Name: ......................
Address: ......................
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EXECUTED as a DEED on behalf of )
PERMANENT MORTGAGES TRUSTEE )
LIMITED, a company incorporated in Jersey, )
Channel Islands, by )
being a person who, in )
accordance with the laws of that territory is acting )
under the authority of the company, in the presence ) ..........................
of: ) (as attorney for PERMANENT
MORTGAGES TRUSTEE LIMITED)
Witness's Signature:...................................
Name: ...................................
Address: ...................................
EXECUTED as a DEED by )
SFM OFFSHORE )
LIMITED as Share Trustee of the )
Mortgages Trustee )
acting by its attorney ) .............................
in the presence of: ) (as attorney for SFM OFFSHORE
LIMITED)
Witness's Signature: ...................................
Name: ...................................
Address: ...................................
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