Exhibit 4.8
EXECUTION COPY
AMENDED AND RESTATED CASH MANAGEMENT AGREEMENT
17 OCTOBER 2006
HALIFAX PLC
(as CASH MANAGER and SELLER)
AND
PERMANENT MORTGAGES TRUSTEE LIMITED
(as MORTGAGES TRUSTEE)
AND
PERMANENT FUNDING (NO. 1) LIMITED
(as FUNDING 1)
AND
PERMANENT FUNDING (NO. 2) LIMITED
(as FUNDING 2)
AND
THE BANK OF NEW YORK
(as FUNDING 1 SECURITY TRUSTEE and FUNDING 2 SECURITY TRUSTEE)
XXXXX & XXXXX
XXXXX & XXXXX LLP
CONTENTS
CLAUSE PAGE
1. Definitions and Interpretation..........................................2
2. Appointment of Cash Manager.............................................2
3. The Services............................................................3
4. Payments, Accounts, Ledgers.............................................4
5. Early Repayment Fees....................................................9
6. Swaps...................................................................9
7. No Liability...........................................................10
8. Costs and Expenses.....................................................10
9. Information............................................................11
10. Remuneration...........................................................13
11. Covenants of Cash Manager..............................................13
12. Services Non-Exclusive.................................................14
13. Termination............................................................14
14. Further Assurance......................................................17
15. Miscellaneous..........................................................17
16. Confidentiality........................................................18
17. Notices................................................................19
18. No Partnership.........................................................20
19. Assignment.............................................................20
20. Amendments and Consents................................................20
21. Amendments and Consents......................ERROR! BOOKMARK NOT DEFINED.
22. Exclusion of Third Party Rights........................................21
23. Counterparts...........................................................21
24. Severability...........................................................21
25. Governing Law and Submission to Jurisdiction...........................21
SCHEDULE
1. The Cash Management Services...........................................22
2. Cash Management and Maintenance of Ledgers.............................24
3. Form of Funding 1 Quarterly Report.....................................35
4. Form of Funding 2 Quarterly Report.....................................37
Signatories..................................................................39
THIS AMENDED AND RESTATED CASH MANAGEMENT AGREEMENT (this AGREEMENT) is made on
17 October 2006
BETWEEN:
(1) HALIFAX PLC, 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 capacity as CASH MANAGER;
(2) HALIFAX PLC, 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 capacity as SELLER of the Loans and one of
the BENEFICIARIES;
(3) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a private
company incorporated under the laws of Jersey, Channel Islands whose
registered office is at 00 Xxxxxxxxx, Xx. Xxxxxx, Xxxxxx, XX0 0XX,
Channel Islands, in its capacity as the MORTGAGES TRUSTEE;
(4) 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 00 Xxxxx Xx. Xxxxx'x Xxxxxx XX0X 0XX, in its
capacity as FUNDING 1 and one of the BENEFICIARIES;
(5) PERMANENT FUNDING (NO. 2) LIMITED (registered number 4441772), a private
limited company incorporated under the laws of England and Wales whose
registered office is at 00 Xxxxx Xx. Xxxxx'x Xxxxxx XX0X 0XX, in its
capacity as FUNDING 2 and one of the BENEFICIARIES;
(6) THE BANK OF NEW YORK, a New York banking corporation acting through its
offices at 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX, acting in its
capacity as FUNDING 1 SECURITY TRUSTEE, which expression shall include
such company and all other persons or companies for the time being acting
as Funding 1 Security Trustee (or co-trustee) pursuant to the terms of
the Funding 1 Deed of Charge; and
(7) THE BANK OF NEW YORK, a New York banking corporation acting through its
offices at 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX, acting in its
capacity as FUNDING 2 SECURITY TRUSTEE, which expression shall include
such company and all other persons or companies for the time being acting
as Funding 2 Security Trustee (or co-trustee) pursuant to the terms of
the Funding 2 Deed of Charge.
WHEREAS:
(A) On the Initial Closing Date and on several subsequent dates, the Seller
agreed to sell and assign certain mortgage loans (together with their
related security) it had originated to the Mortgages Trustee. The
Mortgage Trustee holds the assigned mortgage loans as bare trustee for
Funding 1, the Seller and, as of the Programme Date, Funding 2, pursuant
to the terms of the Mortgages Trust Deed.
(B) On the Initial Closing Date and several subsequent Closing Dates, Funding
1 has used the proceeds of Funding 1 Intercompany Loans granted to it by
Funding 1 Issuers to pay the Seller for an increased share in the
Mortgages Trust. As of the Programme Date, Funding 1 may continue to use
the proceeds of Funding 1 Intercompany Loans and Funding 2 may use the
proceeds of Loan Tranches advanced under the Master Intercompany Loan
Agreement to pay the Mortgages Trustee for an increased share in the
Mortgages Trust.
(C) The Cash Manager has agreed to provide Cash Management Services to the
Mortgages Trustee, Funding 1 and Funding 1 Security Trustee on the terms
and subject to the conditions contained in the
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Cash Management Agreement made on 12 June 2002 and, as of the Programme
Date, to Funding 2 and the Funding 2 Security Trustee as amended and
restated on 22 March 2006 (the CASH MANAGEMENT AGREEMENT) in relation to,
inter alia, the Trust Property.
(D) The parties to the Cash Management Agreement, Funding 2 and the Funding 2
Security Trustee have agreed to amend and restate the terms of that
Agreement as set out herein.
IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Agreement and dated 17
October 2006 (as the same may be amended, varied or supplemented from
time to time with the consent of the parties to this Agreement) (the
MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and
specifically incorporated into this Agreement and, accordingly, the
expressions defined in the Master Definitions and Construction Schedule
(as so amended, varied or supplemented from time to time) shall, except
where the context otherwise requires and save where otherwise defined
herein, have the same meanings in this Agreement, including the Recitals
hereto and this Agreement shall be construed in accordance with the
interpretation provisions set out in clause 2 of the Master Definitions
and Construction Schedule.
1.2 This Agreement amends and restates the Cash Management Agreement made on
14 June 2002 as amended and restated on 22 March 2006 (the PRINCIPAL
AGREEMENT). As of the date of this Agreement, any future rights or
obligations (excluding such obligations accrued to the date of this
Agreement) of a party under the Principal Agreement shall be extinguished
and shall instead be governed by this Agreement.
1.3 Any reference in this Agreement to any discretion, power or right on the
part of the Mortgages Trustee shall be exercised by the Mortgages Trustee
only as directed by the Beneficiaries but subject in each case to the
provisions of Clause 16 of the Mortgages Trust Deed.
2. APPOINTMENT OF CASH MANAGER
2.1 APPOINTMENT
Until termination pursuant to Clause 13, the Mortgages Trustee, Funding
1, Funding 2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee (according to their respective estates and interests) each hereby
appoints the Cash Manager as its lawful agent to provide the Cash
Management Services set out in this Agreement, including in relation to:
(a) the Mortgages Trust;
(b) Funding 1; and
(c) Funding 2,
and the Cash Manager in each case hereby accepts such appointment on the
terms and subject to the conditions of this Agreement.
2.2 DUTIES PRESCRIBED BY TRANSACTION DOCUMENTS
For the avoidance of doubt and in connection with the powers conferred
under Clause 2.1, save as expressly provided elsewhere in this Agreement,
nothing herein shall be construed so as to give the
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Cash Manager any powers, rights, authorities, directions or obligations
other than as specified in this Agreement or any of the other Transaction
Documents.
2.3 APPOINTMENT CONDITIONAL UPON ISSUANCE OF FIRST ISSUER NOTES
The appointment pursuant to Clause 2.1 is conditional upon the issue of
the First Issuer Notes and the making of the First Issuer Term Advances
under the First Issuer Intercompany Loan Agreement and shall take effect
upon and from the Initial Closing Date automatically without any further
action on the part of any person PROVIDED THAT if the issue of the First
Issuer Notes by the First Issuer has not occurred by 14 June 2002, or
such later date as the First Issuer and the Lead Manager may agree this
Agreement shall cease to be of further effect.
2.4 APPOINTMENT CONDITIONAL UPON ACQUISITION OF A BENEFICIAL INTEREST
The appointment pursuant to Clause 2.1 is conditional upon the
acquisition by Funding 2 from the Seller of a portion of the Seller's
beneficial interest in the Mortgages Trust pursuant to the Seller Trust
Property Assignment Agreement and shall take effect upon and as of the
Programme Date automatically without any further action on the part of
any person PROVIDED THAT if Funding 2 has not acquired from the Seller a
portion of the Seller's beneficial interest in the Mortgages Trust by 17
October 2006, or such later date as Funding 2 and the Seller may agree,
the appointment of the Cash Manager as agent of Funding 2 under Clause
2.1 shall not take effect.
3. THE SERVICES
3.1 GENERAL
The Cash Manager shall provide the services set out in this Agreement
(including, without limitation, the Schedules to this Agreement) (the
CASH MANAGEMENT SERVICES).
3.2 APPROVALS AND AUTHORISATIONS
The Cash Manager shall maintain, or procure the maintenance of, the
approvals, authorisations, consents and licences required in connection
with the respective businesses of the Mortgages Trustee, Funding 1 and
Funding 2 and shall prepare and submit, or procure the preparation and
submission of, on behalf of the Mortgages Trustee, Funding 1 and Funding
2, all necessary applications and requests for any further approvals,
authorisations, consents or licences which may be required in connection
with the respective businesses of the Mortgages Trustee, Funding 1 and
Funding 2 and shall, so far as it is reasonably able to do so, perform
the Cash Management Services in such a way as not to prejudice the
continuation of any such approvals, authorisations, consents or licences.
3.3 COMPLIANCE WITH TRANSACTION DOCUMENTS, ETC.
The Cash Management Services shall include procuring (so far as the Cash
Manager, using its reasonable endeavours, is able so to do) compliance by
the Mortgages Trustee, Funding 1 and Funding 2 with all applicable legal
requirements and with the terms of the Transaction Documents to which
each of the Mortgages Trustee and/or Funding 1 and/or Funding 2 is a
party, PROVIDED ALWAYS THAT the Cash Manager shall not lend or provide
any sum to the Mortgages Trustee, Funding 1 or Funding 2 (other than as
expressly contemplated by the Transaction Documents) and the Cash Manager
shall have no liability whatsoever to the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee, the Funding 2 Security Trustee
or any other person for any failure by the Mortgages Trustee, Funding 1
or Funding 2 to make any payment due under any of the Transaction
Documents (other than to the extent arising from (i) the Cash Manager
failing to make a payment in its capacity as Servicer, Funding 1 Swap
Provider, Funding 2 Swap Provider or in any
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other capacity under the Transaction Documents, or (ii) the Cash Manager
failing to perform any of its obligations under any of the Transaction
Documents).
3.4 LIABILITY OF CASH MANAGER
(a) The Cash Manager shall indemnify each of the Mortgages Trustee, Funding
1, Funding 2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee on demand on an after Tax basis for any loss, liability, claim,
expense or damage suffered or incurred by any of them in respect of the
negligence, bad faith or wilful default of the Cash Manager in carrying
out its functions as Cash Manager under this Agreement or under the other
Transaction Documents or as a result of a breach by the Cash Manager of
the terms and provisions of this Agreement or such other Transaction
Documents to which the Cash Manager is a party (in its capacity as Cash
Manager) in relation to such functions.
(b) For the avoidance of doubt, the Cash Manager shall not be liable in
respect of any loss, liability, claim, expense or damage suffered or
incurred by the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee, the Funding 2 Security Trustee and/or any other person
as a result of the proper performance of the Cash Management Services by
the Cash Manager save to the extent that such loss, liability, claim,
expense or damage is suffered or incurred as a result of any negligence,
bad faith or wilful default of the Cash Manager or as a result of a
breach by the Cash Manager of the terms and provisions of this Agreement
or any of the other Transaction Documents to which the Cash Manager is a
party (in its capacity as Cash Manager) in relation to such functions.
4. PAYMENTS, ACCOUNTS, LEDGERS
4.1 BANK ACCOUNTS
(a) The Cash Manager hereby confirms that the Mortgages Trustee GIC Account
has been established on or before the date hereof pursuant to the Bank
Account Agreement and the Mortgages Trustee Guaranteed Investment
Contract and that the Mortgages Trustee GIC Account Mandate in the agreed
form will apply thereto at the Initial Closing Date. The Cash Manager
undertakes (to the extent to which the same is within its control) that
at the Initial Closing Date the Mortgages Trustee GIC Account will be
operative and that the Cash Manager will not create or permit to subsist
any Security Interest in relation to the Mortgages Trustee GIC Account
(but without prejudice to the Mortgages Trust).
(b) The Cash Manager hereby confirms that the Funding 1 GIC Account has been
established on or before the date hereof pursuant to the Bank Account
Agreement and the Funding 1 Guaranteed Investment Contract and that the
Funding 1 GIC Account Mandate in the agreed form will apply thereto at
the Initial Closing Date. The Cash Manager undertakes (to the extent to
which the same is within its control) that at the Initial Closing Date
the Funding 1 GIC Account will be operative and that the Cash Manager
will not knowingly create or permit to subsist any Security Interest in
relation to the Funding 1 GIC Account other than as created under or
permitted pursuant to the Funding 1 Deed of Charge.
(c) The Cash Manager hereby confirms that the Funding 1 Transaction Account
has been established on or before the date hereof and that the Funding 1
Transaction Account Mandate in the agreed form will apply thereto at the
Initial Closing Date. The Cash Manager undertakes (to the extent to which
the same is within its control) that at the Initial Closing Date the
Funding 1 Transaction Account will be operative and that the Cash Manager
will not knowingly create or permit to subsist any Security Interest in
relation to the Funding 1 Transaction Account other than as created under
or permitted pursuant to the Funding 1 Deed of Charge.
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(d) The Cash Manager hereby confirms that the Funding 2 GIC Account has been
established on or before the Programme Date pursuant to the Bank Account
Agreement and the Funding 2 Guaranteed Investment Contract and that the
Funding 2 GIC Account Mandate in the agreed form will apply thereto at
the Programme Date. The Cash Manager undertakes (to the extent to which
the same is within its control) that at the Programme Date the Funding 2
GIC Account will be operative and that the Cash Manager will not
knowingly create or permit to subsist any Security Interest in relation
to the Funding 2 GIC Account other than as created under or permitted
pursuant to the Funding 2 Deed of Charge.
(e) The Cash Manager hereby confirms that the Funding 2 Transaction Account
has been established on or before the Programme Date and that the Funding
2 Transaction Account Mandate in the agreed form will apply thereto at
the Programme Date. The Cash Manager undertakes (to the extent to which
the same is within its control) that at the Programme Date the Funding 2
Transaction Account will be operative and that the Cash Manager will not
knowingly create or permit to subsist any Security Interest in relation
to the Funding 2 Transaction Account other than as created under or
permitted pursuant to the Funding 2 Deed of Charge.
4.2 MORTGAGES TRUSTEE LEDGERS
(a) The Cash Manager shall open and maintain in the books of the Mortgages
Trustee certain ledgers to be known as the Revenue Ledger and the
Principal Ledger which shall together reflect the aggregate of all
amounts of cash standing to the credit of the Mortgages Trustee GIC
Account from time to time.
(b) The Cash Manager shall also open and maintain in the books of the
Mortgages Trustee certain ledgers to be known as the Losses Ledger and
the Funding 1 Share/Funding 2 Share/Seller Share Ledger.
(c) The Cash Manager shall make credits and debits to the Mortgages Trustee
Ledgers in the manner described in SCHEDULE 2.
4.3 FUNDING 1 LEDGERS
(a) The Cash Manager shall open and maintain in the books of Funding 1
certain ledgers to be known as the Funding 1 Revenue Ledger, the Funding
1 Principal Ledger, the Funding 1 General Reserve Ledger, the Funding 1
Cash Accumulation Ledger and, if the Funding 1 Liquidity Reserve Fund is
established, the Funding 1 Liquidity Reserve Ledger which shall together
reflect the aggregate of all amounts of cash standing to the credit of
the Funding 1 GIC Account and the Funding 1 Transaction Account and all
amounts invested in Authorised Investments purchased from amounts
standing to the credit of the Funding 1 GIC Account and the Funding 1
Transaction Account from time to time.
(b) The Cash Manager shall also open and maintain in the books of Funding 1
certain ledgers to be known as (i) the Funding 1 Principal Deficiency
Ledger, which comprised, on the Initial Closing Date, three sub-ledgers
known as the AAA Principal Deficiency Sub Ledger, the AA Principal
Deficiency Sub Ledger and the BBB Principal Deficiency Sub Ledger, and
shall comprise on the Fourth Issuer Closing Date, four sub-ledgers known
as the AAA Principal Deficiency Sub Ledger, the AA Principal Deficiency
Sub Ledger, the A Principal Deficiency Sub Ledger, and the BBB Principal
Deficiency Sub Ledger (ii) the Funding 1 Intercompany Loan Ledger and
(iii) the Funding 1 Liquidity Facility Ledger. If Funding 1 enters into
New Intercompany Loan Agreements and the New Term Advances advanced
thereunder have different Term Advance Ratings to the Term Advance
Ratings assigned to the existing Term Advances (including the Fourth
Issuer Term Advances), then the Cash Manager shall establish new
sub-ledgers in respect of the Funding 1 Principal Deficiency Ledger,
which shall correspond to the Term Advance Ratings assigned to each such
New Term Advance.
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(c) The Cash Manager shall make credits and debits to the Funding 1 Ledgers
in accordance with the provisions of SCHEDULE 2.
4.4 FUNDING 2 LEDGERS
(a) The Cash Manager shall open and maintain in the books of Funding 2
certain ledgers to be known as the Funding 2 Revenue Ledger, the Funding
2 Principal Ledger, the Funding 2 General Reserve Ledger, the Funding 2
Cash Accumulation Ledger and, if the Funding 2 Liquidity Reserve Fund is
established, the Funding 2 Liquidity Reserve Ledger which shall together
reflect the aggregate of all amounts of cash standing to the credit of
the Funding 2 GIC Account and the Funding 2 Transaction Account and all
amounts invested in Authorised Investments purchased from amounts
standing to the credit of the Funding 2 GIC Account and the Funding 2
Transaction Account from time to time.
(b) The Cash Manager shall also open and maintain in the books of Funding 2
certain ledgers to be known as (i) the Funding 2 Principal Deficiency
Ledger, which comprised, on the Programme Date, five sub-ledgers known as
the AAA Principal Deficiency Sub Ledger, the AA Principal Deficiency Sub
Ledger, the A Principal Deficiency Sub Ledger, the BBB Principal
Deficiency Sub Ledger and the BB Principal Deficiency Sub Ledger and (ii)
the Master Intercompany Loan Ledger, to be divided into sub-ledgers each
of which shall record payments made under each Loan Tranche.
(c) The Cash Manager shall make credits and debits to the Funding 2 Ledgers
in accordance with the provisions of SCHEDULE 2.
4.5 BANK ACCOUNTS
(a) The Cash Manager shall procure that so far as it may be able in relation
to all Loans comprised in the Portfolio, the following amounts are paid
into the Mortgages Trustee GIC Account:
(i) all Monthly Payments, other interest received under and in respect
of the Loans and any costs or other amounts received under the
Loans (including in any such case amounts recovered on enforcement
of rights against any Borrower or guarantor of the Borrower, any
Property or any of the Borrower's or guarantor's other property or
assets);
(ii) all final releases and all repayments or prepayments of principal
under the Loans;
(iii) any amount received by or on behalf of the Mortgages Trustee
pursuant to any Halifax Insurance Policy or the Buildings
Policies; and
(iv) any other amounts whatsoever received by or on behalf of the
Mortgages Trustee after the Initial Closing Date,
and the Cash Manager shall procure that all interest earned on the
Mortgages Trustee GIC Account is credited to such account.
(b) The Cash Manager shall procure that the following amounts are paid into
the Funding 1 GIC Account:
(i) all Funding 1 Revenue Receipts;
(ii) all Funding 1 Principal Receipts;
(iii) all amounts received by Funding 1 pursuant to the Funding 1 Swap
Agreement; and
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(iv) any other amounts whatsoever received by or on behalf of Funding 1
after the Initial Closing Date,
and the Cash Manager shall procure that all interest earned on the
Funding 1 Bank Accounts and all investment proceeds from Authorised
Investments purchased from amounts standing to the credit of the Funding
1 GIC Account are credited to such account.
(c) The Cash Manager shall procure that all Liquidity Drawings under the
Funding 1 Liquidity Facility are paid into the Funding 1 Transaction
Account.
(d) The Cash Manager shall procure that all transfers and withdrawals of
amounts standing to the credit of the Funding 1 Transaction Account and
the Funding 1 GIC Account shall be made in accordance with the provisions
of the Funding 1 Deed of Charge.
(e) The Cash Manager shall procure that the following amounts are paid into
the Funding 2 GIC Account:
(i) all Funding 2 Revenue Receipts;
(ii) all Funding 2 Principal Receipts;
(iii) all amounts received by Funding 2 pursuant to the Funding 2 Swap
Agreement; and
(iv) any other amounts whatsoever received by or on behalf of Funding 2
after the Programme Date,
and the Cash Manager shall procure that all interest earned on the
Funding 2 Bank Accounts and all investment proceeds from Authorised
Investments purchased from amounts standing to the credit of the Funding
2 GIC Account are credited to such account.
(f) The Cash Manager shall procure that all transfers and withdrawals of
amounts standing to the credit of the Funding 2 Transaction Account and
the Funding 2 GIC Account shall be made in accordance with the provisions
of the Funding 2 Deed of Charge.
(g) Each of the payments into the Mortgages Trustee GIC Account, the Funding
1 GIC Account, the Funding 1 Transaction Account, the Funding 2 GIC
Account and the Funding 2 Transaction Account referred to in Clauses
4.5(a), (b), (c), (d), (e) and (f) shall be made forthwith upon receipt
by the Mortgages Trustee, Funding 1, Funding 2 or the Cash Manager, as
the case may be, of the amount in question.
(h) For the avoidance of doubt, as soon as reasonably practicable after
becoming aware of the same, the Cash Manager may, and shall, withdraw
Cash from, as the case may be, the Mortgages Trustee GIC Account, the
Funding 1 Transaction Account, the Funding 1 GIC Account, the Funding 2
Transaction Account and/or the Funding 2 GIC Account if, and to the
extent that, such Cash was credited thereto in error and shall use its
reasonable endeavours to ensure that such Cash is applied correctly
thereafter.
(i) The Cash Manager shall promptly notify each of the Mortgages
Trustee,Funding 1 and/or the Funding 1 Security Trustee (in the case of
Funding 1 Bank Accounts), Funding 2 and/or the Funding 2 Security Trustee
(in the case of Funding 2 Bank Accounts) (as applicable) of any
additional account which supplements or replaces any account specifically
referred to in the definitions of the "Mortgages Trustee GIC Account",
the "Funding 1 Transaction Account", the "Funding 1 GIC Account", the
"Funding 2 Transaction Account" or the "Funding 2 GIC Account", as the
case may be, in the Master Definitions and Construction Schedule.
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(j) Each of the Cash Manager, the Mortgages Trustee, Funding 1 (in the case
of Funding 1 Bank Accounts) and Funding 2 (in the case of Funding 2 Bank
Accounts) undertakes that, so far as it is able to procure the same, the
Mortgages Trustee GIC Account, the Funding 1 Transaction Account, the
Funding 1 GIC Account, the Funding 2 Transaction Account and the Funding
2 GIC Account and all instructions and Mandates in relation thereto will
continue to be operative and will not, save as provided in Clause 4.7
below or as permitted pursuant to the Bank Account Agreement be changed
without the prior written consent of the Funding 1 Security Trustee
and/or the Funding 2 Security Trustee (as applicable) (such consent not
to be unreasonably withheld or delayed). For the avoidance of doubt, the
Cash Manager may change the Authorised Signatories in respect of any
instructions or Mandates relating to Funding 1, Funding 2 and/or the
Mortgages Trustee, without the prior written consent of the Funding 1
Security Trustee and/or the Funding 2 Security Trustee (as applicable),
in accordance with Clause 4.2 of the Bank Account Agreement.
(k) The Cash Manager and Funding 1 agree that the Cash Manager shall procure
that (i) the tranche of the Advance being made available to Funding 1
pursuant to paragraph 2(a) of the First Start-Up Loan Agreement for the
purposes of funding the Funding 1 General Reserve Fund and (ii) the
tranche (if any) of any New Start-up Loan Agreement for the purposes of
funding further the Funding 1 General Reserve Fund (or any other similar
reserve fund) shall be credited to the Funding 1 GIC Account promptly
upon receipt of such amounts by Funding 1, and the Funding 1 General
Reserve Ledger shall record such credit.
(l) The Cash Manager and Funding 2 agree that the Cash Manager shall procure
that (i) any Advance being made available to Funding 2 pursuant to Clause
2 of the Funding 2 Start-Up Loan Agreement for the purposes of funding
the Funding 2 General Reserve Fund (or any other similar reserve fund)
and (ii) any Advance (if any) of any new Funding 2 Start-up Loan
Agreement for the purposes of funding further the Funding 2 General
Reserve Fund (or any other similar reserve fund) shall be credited to the
Funding 2 GIC Account promptly upon receipt of such amounts by Funding 2,
and the Funding 2 General Reserve Ledger shall record such credit.
(m) The Cash Manager shall give all notices and make all determinations and
withdrawals under the Funding 1 Liquidity Facility Agreement on behalf of
Funding 1, as set out therein.
4.6 WITHDRAWALS
The Cash Manager may make withdrawals:
(a) on behalf of the Mortgages Trustee from the Mortgages Trustee GIC
Account; and
(b) on behalf of Funding 1 from the Funding 1 GIC Account and the
Funding 1 Transaction Account, but only until receipt of an
Intercompany Loan Acceleration Notice served by the Funding 1
Security Trustee on Funding 1 (with a copy to the Cash Manager and
the Mortgages Trustee); and
(c) on behalf of Funding 2 from the Funding 2 GIC Account and the
Funding 2 Transaction Account, but only until receipt of a Master
Intercompany Loan Acceleration Notice served by the Funding 2
Security Trustee on Funding 2 (with a copy to the Cash Manager and
the Mortgages Trustee),
respectively as permitted by this Agreement, the Mortgages Trust Deed,
the Bank Account Agreement, the Mortgages Trustee Guaranteed Investment
Contract, the Funding 1 Guaranteed Investment Contract, the Funding 2
Guaranteed Investment Contract, the Funding 1 Liquidity Facility
Agreement, the Funding 1 Deed of Charge and the Funding 2 Deed of Charge,
but shall not in carrying out its functions as Cash Manager under this
Agreement otherwise make withdrawals
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from the Mortgages Trustee GIC Account, the Funding 1 Bank Accounts or
the Funding 2 Bank Accounts.
4.7 CASH MANAGEMENT
In administering the Mortgages Trustee GIC Account, the Funding 1 Bank
Accounts and the Funding 2 Bank Accounts on behalf of the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee (as applicable), the Cash Manager shall comply
with the provisions of SCHEDULE 2 prior to receipt by the Cash Manager of
a copy of (in respect of the Funding 1 Bank Accounts) any Intercompany
Loan Acceleration Notice served by the Funding 1 Security Trustee on
Funding 1 and (in respect of the Funding 2 Bank Accounts) any Master
Intercompany Loan Acceleration Notice served by the Funding 2 Security
Trustee on Funding 2.
5. EARLY REPAYMENT FEES
The Cash Manager shall withdraw any Early Repayment Fees paid into the
Mortgages Trustee GIC Account and pay the same to the Seller, by
telegraphic transfer to such account as may be specified by the Seller
from time to time, promptly following a request for such withdrawal being
received from the Seller. For the avoidance of doubt, the Cash Manager
shall not record the receipt or withdrawal of Early Repayment Fees in any
of the ledgers maintained under this Agreement.
6. SWAPS
6.1 COMPUTATIONS UNDER FUNDING 1 SWAP
On each Calculation Date, the Cash Manager shall determine, in accordance
with the terms of the Funding 1 Swap, in respect of the relevant
Calculation Period:
(a) the Average Fixed Rate Loan Balance, the Average Variable Rate
Loan Balance and the Average Tracker Rate Loan Balance (each as
defined in the Funding 1 Swap Agreement);
(b) the weighted average of the fixed rates of interest charged to
borrowers of Fixed Rate Loans;
(c) the Tracker Swap Rate; and
(d) the Variable Rate Swap SVR,
and shall notify Funding 1 and the Funding 1 Security Trustee of such
amounts, balances and rates.
6.2 TERMINATION OF FUNDING 1 SWAP
If on or prior to the date of the earlier of either (i) the reduction of
the aggregate principal amount outstanding of all Intercompany Loans to
zero or (ii) the service of an Intercompany Loan Acceleration Notice, the
Funding 1 Swap is terminated, then the Cash Manager (on behalf of Funding
1 and the Funding 1 Security Trustee) shall purchase a new hedge against
the possible variance between (1) the Mortgages Trustee Variable Base
Rate payable on the Variable Rate Loans, the fixed rates of interest
payable on the Fixed Rate Loans and the Tracker Swap Rate and (2) a
LIBOR-based rate for three-month sterling deposits, on terms acceptable
to Funding 1 and the Rating Agencies with a new Funding 1 swap provider
whom the Rating Agencies have previously confirmed in writing will not
cause the then current rating of any Notes of the Funding 1 Issuers to be
downgraded. The Cash Manager may apply any early termination payment
received from the Funding 1 Swap Provider pursuant to the Funding 1 Swap
for such purpose.
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6.3 COMPUTATIONS UNDER FUNDING 2 SWAP
On each Calculation Date, the Cash Manager shall determine, in accordance
with the terms of the Funding 2 Swap, in respect of the relevant
Calculation Period:
(a) the Average Fixed Rate Loan Balance, the Average Variable Rate
Loan Balance and the Average Tracker Rate Loan Balance (each as
defined in the Funding 2 Swap Agreement);
(b) the weighted average of the fixed rates of interest charged to
borrowers of Fixed Rate Loans;
(c) the Tracker Swap Rate; and
(d) the Variable Rate Swap SVR,
and shall notify Funding 2 and the Funding 2 Security Trustee of such
amounts, balances and rates.
6.4 TERMINATION OF FUNDING 2 SWAP
If on or prior to the date of the earlier of either (i) the reduction of
the aggregate principal amount outstanding of all Loan Tranches under the
Master Intercompany Loan Agreement to zero or (ii) the service of a
Master Intercompany Loan Acceleration Notice, the Funding 2 Swap is
terminated, then the Cash Manager (on behalf of Funding 2 and the Funding
2 Security Trustee) shall purchase a new hedge against the possible
variance between (1) the Mortgages Trustee Variable Base Rate payable on
the Variable Rate Loans, the fixed rates of interest payable on the Fixed
Rate Loans and the Tracker Swap Rate and (2) a LIBOR-based rate for
three-month sterling deposits, on terms acceptable to Funding 2 and the
Rating Agencies with a new Funding 2 swap provider whom the Rating
Agencies have previously confirmed in writing will not cause the then
current rating of any Notes of the Master Issuer to be downgraded. The
Cash Manager may apply any early termination payment received from the
Funding 2 Swap Provider pursuant to the Funding 2 Swap for such purpose.
7. NO LIABILITY
Save as otherwise provided in this Agreement, the Cash Manager shall have
no liability for the obligations of any of the Mortgages Trustee, Funding
1, Funding 2, the Funding 1 Security Trustee or the Funding 2 Security
Trustee under any of the Transaction Documents or otherwise and nothing
herein shall constitute a guarantee, or similar obligation, by the Cash
Manager of either the Mortgages Trustee, Funding 1, Funding 2, the
Funding 1 Security Trustee or the Funding 2 Security Trustee in respect
of any of them.
8. COSTS AND EXPENSES
8.1 Subject to and in accordance with the Mortgages Trust Revenue Priority of
Payments, the Funding 1 Priority of Payments and the Funding 2 Priority
of Payments (as applicable), each of the Mortgages Trustee, Funding 1 and
Funding 2 will on each Distribution Date, Funding 1 Interest Payment Date
and Funding 2 Interest Payment Date (respectively) reimburse the Cash
Manager for all out-of-pocket costs, expenses and charges (together with
any amounts in respect of Irrecoverable VAT due thereon) properly
incurred by the Cash Manager in the performance of the Cash Management
Services to it including any such costs, expenses or charges not
reimbursed to the Cash Manager on any previous Distribution Date, Funding
1 Interest Payment Date and Funding 2 Interest Payment Date
(respectively) and the Cash Manager shall supply the Mortgages Trustee,
Funding 1 and Funding 2 with an appropriate VAT invoice issued by the
Cash Manager or, if the Cash Manager has treated the relevant cost,
expense or charge as a disbursement for VAT purposes, by the person
making the supply.
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8.2 Unless and until otherwise agreed by the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee in writing (notified to the Cash Manager), the Mortgages Trustee
shall be solely responsible for reimbursing the Cash Manager for the
out-of-pocket costs, expenses and charges (together with any amounts in
respect of Irrecoverable VAT due thereon) referred to in Clause 8.1
above.
9. INFORMATION
9.1 USE OF I.T. SYSTEMS
(a) The Cash Manager represents and warrants that at the date hereof in
respect of the software which is to be used by the Cash Manager in
providing the Cash Management Services it has in place all necessary
licences and/or consents from the respective licensor or licensors (if
any) of such software.
(b) The Cash Manager undertakes that it shall for the duration of this
Agreement, use reasonable endeavours to:
(i) ensure that the licences and/or consents referred to in paragraph
(a) are maintained in full force and effect; and
(ii) except in so far as it would breach any other of its legal
obligations, grant to any person to whom it may sub-contract or
delegate the performance of all or any of its powers and
obligations under this Agreement and/or to such person as the
Mortgages Trustee and/or Funding 1 and Funding 2 elect as a
substitute cash manager in accordance with the terms of this
Agreement a licence to use any proprietary software together with
any updates which may be made thereto from time to time.
(c) The Cash Manager shall use reasonable endeavours to maintain in working
order the information technology systems used by the Cash Manager in
providing the Cash Management Services.
(d) The Cash Manager shall pass to any person to whom it may sub-contract or
delegate the performance of all or any of its powers and obligations
under this Agreement and/or to such person as the Mortgages Trustee
and/or Funding 1 and Funding 2 elect as a substitute cash manager in
accordance with the terms of this Agreement the benefit of any warranties
in relation to the software insofar as the same are capable of
assignment.
9.2 BANK ACCOUNT STATEMENTS
The Cash Manager shall take all reasonable steps to ensure that it
receives:
(a) a monthly bank statement in relation to the Mortgages Trustee GIC
Account (and any additional or supplemental bank account of the
Mortgages Trustee) and that it furnishes a copy of such statement
to the Mortgages Trustee, each of the Beneficiaries, the Funding 1
Security Trustee and the Funding 2 Security Trustee;
(b) monthly bank statements in relation to each of the Funding 1
Transaction Account and the Funding 1 GIC Account (and any
additional or supplemental bank account of Funding 1) and that it
furnishes a copy of such statements to Funding 1 and the Funding 1
Security Trustee; and
(c) monthly bank statements in relation to each of the Funding 2
Transaction Account and the Funding 2 GIC Account (and any
additional or supplemental bank account of Funding 2) and that it
furnishes a copy of such statements to Funding 2 and the Funding 2
Security Trustee.
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9.3 ACCESS TO BOOKS AND RECORDS
Subject to all applicable laws, the Cash Manager shall permit the
Auditors of the Mortgages Trustee, Funding 1 and Funding 2 and any other
person nominated by the Funding 1 Security Trustee and/or Funding 2
Security Trustee or the Beneficiaries (to whom the Cash Manager has no
reasonable objection) at any time during normal office hours upon
reasonable notice to have access, or procure that such person or persons
are granted access, to all books of record and account relating to the
Cash Management Services provided by the Cash Manager and related matters
in accordance with this Agreement.
9.4 STATUTORY OBLIGATIONS
The Cash Manager will use its reasonable endeavours, on behalf of the
Mortgages Trustee, Funding 1 and Funding 2, to prepare or procure the
preparation of and file all reports, annual returns, financial
statements, statutory forms and other returns which each of the Mortgages
Trustee, Funding 1 and Funding 2 is required by law to prepare and file.
Subject to approval thereof by the directors of the Mortgages Trustee,
Funding 1 or Funding 2 (as appropriate), the Cash Manager shall cause
such accounts to be audited by the Auditors and shall procure so far as
it is able so to do that the Auditors shall make a report thereon as
required by law and copies of all such documents shall be delivered to
the Mortgages Trustee, the Funding 1 Security Trustee, the Funding 2
Security Trustee, Funding 1 and Funding 2 (as appropriate) and the Rating
Agencies as soon as practicable after the end of each accounting
reference period of the Mortgages Trustee, Funding 1 or Funding 2 (as
appropriate).
9.5 INFORMATION COVENANTS
(a) The Cash Manager shall provide a quarterly report in, or substantially
in, the form set out in Schedule 3 in respect of Funding 1 to any Funding
1 Issuer, Funding 1, the Funding 1 Security Trustee, the Seller and the
Rating Agencies and a quarterly report in, or substantially in the form
set out in Schedule 4 in respect of Funding 2 to the Master Issuer,
Funding 2, the Funding 2 Security Trustee, the Seller and the Rating
Agencies.
(b) The Cash Manager shall provide, or procure the provision of, to the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee,
the Funding 2 Security Trustee and the Rating Agencies copies of any
annual returns or financial statements referred to in Clause 9.4 as soon
as reasonably practicable after the preparation thereof.
(c) The Cash Manager shall notify the Rating Agencies in writing of the
details of (i) any material amendment to the Transaction Documents, (ii)
the occurrence of an Intercompany Loan Event of Default, Master
Intercompany Loan Event of Default, Potential Intercompany Loan Event of
Default or Potential Master Intercompany Loan Event of Default and (iii)
any other information relating to the Cash Manager as the Rating Agencies
and/or the Funding 1 Security Trustee and/or the Funding 2 Security
Trustee may reasonably request in connection with its obligations under
this Agreement, PROVIDED THAT neither the Funding 1 Security Trustee nor
the Funding 2 Security Trustee shall make such a request more than once
every three months unless, in the belief of the Funding 1 Security
Trustee and/or the Funding 2 Security Trustee, an Intercompany Loan Event
of Default or a Master Intercompany Loan Event of Default (respectively)
and/or a Note Event of Default in respect of any Funding 1 Issuer or the
Master Issuer (respectively) or Cash Manager Termination Event (as
defined in Clause 13.1) shall have occurred and is continuing or a
Potential Intercompany Loan Event of Default or Potential Master
Intercompany Loan Event of Default (respectively) and/or a Potential Note
Event of Default in respect of any Funding 1 Issuer or the Master Issuer
(respectively) shall have occurred and is continuing PROVIDED FURTHER
THAT such request does not adversely interfere with the Cash Manager's
day to day provision of the Cash Management Services under the other
terms of this Agreement.
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(d) The Cash Manager shall, at the request of the Funding 1 Security Trustee
or the Funding 2 Security Trustee, furnish the Funding 1 Security
Trustee, the Funding 2 Security Trustee and the Rating Agencies with such
other information relating to its business and financial condition as it
may be reasonable for the Funding 1 Security Trustee and/or the Funding 2
Security Trustee to request in connection with this Agreement, PROVIDED
THAT such request does not adversely interfere with the Cash Manager's
day to day provision of the Cash Management Services under the other
terms of this Agreement.
10. REMUNERATION
10.1 FEE PAYABLE
The Mortgages Trustee, Funding 1 and Funding 2 shall pay to the Cash
Manager for the Cash Management Services provided to it hereunder a cash
management fee which shall be agreed in writing between the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee, the
Funding 2 Security Trustee and the Cash Manager from time to time.
10.2 PAYMENT OF FEE
The cash management fee referred to in Clause 10.1 shall be paid to the
Cash Manager in arrear on each Distribution Date in the manner
contemplated by and in accordance with the provisions of the Mortgages
Trustee Revenue Priority of Payments.
11. COVENANTS OF CASH MANAGER
11.1 COVENANTS
The Cash Manager hereby covenants with and undertakes to each of the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee
and the Funding 2 Security Trustee that without prejudice to any of its
specific obligations hereunder:
(a) it will devote all due skill, care and diligence to the
performance of its obligations and the exercise of its discretions
hereunder;
(b) it will comply with any proper directions, orders and instructions
which the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee or the Funding 2 Security Trustee may from time
to time give to it in accordance with the provisions of this
Agreement and, in the event of any conflict, those of the Funding
Security 1 Trustee and the Funding 2 Security Trustee shall
prevail;
(c) it will use its reasonable endeavours to keep in force all
licences, approvals, authorisations and consents which may be
necessary in connection with the performance of the Cash
Management Services and prepare and submit all necessary
applications and requests for any further approval, authorisation,
consent or licence required in connection with the performance of
the Cash Management Services;
(d) save as otherwise agreed with the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee, it will provide free of charge to the Mortgages
Trustee, Funding 1 and Funding 2 during normal office hours office
space, facilities, equipment and staff sufficient to fulfil the
obligations of the Mortgages Trustee, Funding 1 and Funding 2
under this Agreement;
(e) it will not knowingly fail to comply with any legal requirements
in the performance of the Cash Management Services;
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(f) it will make all payments required to be made by it pursuant to
this Agreement on the due date for payment thereof for value on
such day without set-off (including, without limitation, in
respect of any fees owed to it) or counterclaim; and
(g) it will not without the prior written consent of the Funding 1
Security Trustee and the Funding 2 Security Trustee amend or
terminate any of the Transaction Documents save in accordance with
their terms.
11.2 DURATION OF COVENANTS
The covenants of the Cash Manager in Clause 11.1 shall remain in force
until this Agreement is terminated but without prejudice to any right or
remedy of the Mortgages Trustee and/or Funding 1 and/or Funding 2 and/or
the Funding 1 Security Trustee and/or the Funding 2 Security Trustee
arising from breach of any such covenant prior to the date of termination
of this Agreement.
12. SERVICES NON-EXCLUSIVE
Nothing in this Agreement shall prevent the Cash Manager from rendering
or performing services similar to those provided for in this Agreement to
or for itself or other persons, firms or companies or from carrying on
business similar to or in competition with the business of the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee or the
Funding 2 Security Trustee.
13. TERMINATION
13.1 CASH MANAGER TERMINATION EVENTS
If any of the following events (CASH MANAGER TERMINATION EVENTS) shall
occur:
(a) default is made by the Cash Manager in the payment on the due date
of any payment due and payable by it under this Agreement or in
the performance of its obligations under Clauses 4.5 and 4.6 and
such default continues unremedied for a period of three London
Business Days after the earlier of the Cash Manager becoming aware
of such default; or
(b) default is made by the Cash Manager in the performance or
observance of any of its other covenants and obligations under
this Agreement, which in the reasonable opinion of the Funding 1
Security Trustee and/or the Funding 2 Security Trustee (as
applicable) is materially prejudicial to the interests of the
Funding 1 Secured Creditors (in the case of Funding 1) or the
Funding 2 Secured Creditors (in the case of Funding 2) and such
default continues unremedied for a period of twenty London
Business Days after the earlier of the Cash Manager becoming aware
of such default and receipt by the Cash Manager of written notice
from the Funding 1 Security Trustee and/or the Funding 2 Security
Trustee (as applicable) requiring the same to be remedied;
(c) an Insolvency Event occurs,
then Funding 1 and/or Funding 2 and/or the Funding 1 Security Trustee
and/or the Funding 2 Security Trustee may at once or at any time
thereafter while such default continues by notice in writing to the Cash
Manager terminate its appointment as Cash Manager under this Agreement
with effect from a date (not earlier than the date of the notice)
specified in the notice.
13.2 RESIGNATION OF CASH MANAGER
The appointment of the Cash Manager under this Agreement may be
terminated upon the expiry of not less than 12 months' notice of
termination given by the Cash Manager to the Mortgages Trustee,
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Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee PROVIDED THAT:
(a) the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee and the Funding 2 Security Trustee consent in
writing to such termination;
(b) a substitute cash manager shall be appointed, such appointment to
be effective not later than the date of such termination;
(c) such substitute cash manager has cash management experience and is
approved by the Mortgages Trustee, Funding 1, Funding 2, the
Funding 1 Security Trustee and the Funding 2 Security Trustee;
(d) the substitute cash manager enters into an agreement substantially
on the same terms as the relevant provisions of this Agreement and
the Cash Manager shall not be released from its obligations under
the relevant provisions of this Agreement until such substitute
cash manager has entered into such new agreement and the rights of
the Mortgages Trustee, Funding 1 and Funding 2 under such
agreement are charged in favour of the Funding 1 Security Trustee
and the Funding 2 Security Trustee (as applicable) on terms
satisfactory to the Funding 1 Security Trustee and the Funding 2
Security Trustee; and
(e) the then current ratings of the Notes are not adversely affected
as a result thereof, unless otherwise agreed by an Extraordinary
Resolution of the holders of each class of the Notes of each
Funding 1 Issuer or the Master Issuer, as applicable.
13.3 EFFECT OF TERMINATION
(a) On and after termination of the appointment of the Cash Manager under
this Agreement pursuant to this Clause 13, all authority and power of the
Cash Manager under this Agreement shall be terminated and be of no
further effect and the Cash Manager shall not thereafter hold itself out
in any way as the agent of the Mortgages Trustee, Funding 1, Funding 2,
the Funding 1 Security Trustee or the Funding 2 Security Trustee pursuant
to this Agreement.
(b) Upon termination of the appointment of the Cash Manager under this
Agreement pursuant to this Clause 13, the Cash Manager shall:
(i) forthwith deliver (and in the meantime hold on trust for, and to
the order of, the Mortgages Trustee, Funding 1, Funding 2, the
Funding 1 Security Trustee or the Funding 2 Security Trustee, as
the case may be) to the Mortgages Trustee, Funding 1, Funding 2,
the Funding 1 Security Trustee or the Funding 2 Security Trustee,
as the case may be or as it shall direct, all books of account,
papers, records, registers, correspondence and documents in its
possession or under its control relating to the affairs of or
belongings of the Mortgages Trustee, Funding 1, Funding 2, the
Funding 1 Security Trustee or the Funding 2 Security Trustee, as
the case may be (if practicable, on the date of receipt), any
monies then held by the Cash Manager on behalf of the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee or
the Funding 2 Security Trustee and any other assets of the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security
Trustee and the Funding 2 Security Trustee;
(ii) take such further action as the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee or the Funding 2
Security Trustee, as the case may be, may reasonably direct at the
expense of the Mortgages Trustee, Funding 1, Funding 2, the
Funding 1 Security Trustee or the Funding 2 Security Trustee, as
the case may be (including in relation to the appointment of a
substitute cash manager), provided that the Mortgages Trustee, the
15
Funding 1 Security Trustee or the Funding 2 Security Trustee, as
the case may be, shall not be required to take or direct to be
taken such further action unless it has been indemnified to its
satisfaction (and in the event of a conflict between the
directions of Funding 1, Funding 2, the Funding 1 Security
Trustee, the Funding 2 Security Trustee and the Mortgages Trustee,
the directions of the Funding 1 Security Trustee and the Funding 2
Security Trustee shall prevail);
(iii) provide all relevant information contained on computer records in
the form of magnetic tape, together with details of the layout of
the files encoded on such magnetic tapes; and
(iv) co-operate and consult with and assist the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee or the
Funding 2 Security Trustee or its nominee, as the case may be
(which shall, for the avoidance of doubt, include any Receiver
appointed by it), for the purposes of explaining the file layouts
and the format of the magnetic tapes generally containing such
computer records on the computer system of the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee or the
Funding 2 Security Trustee or such nominee, as the case may be.
13.4 NOTICE OF EVENT OF DEFAULT
The Cash Manager shall deliver to the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee as soon as reasonably practicable but in any event within three
London Business Days of becoming aware thereof a notice of any Cash
Manager Termination Event or any event which with the giving of notice or
expiry of any grace period or certification, as specified in such Cash
Manager Termination Event would constitute the same or any Intercompany
Loan Event of Default or Master Intercompany Loan Event of Default or any
Potential Intercompany Loan Event of Default or Potential Master
Intercompany Loan Event of Default.
13.5 GENERAL PROVISIONS RELATING TO TERMINATION
(a) Termination of this Agreement or the appointment of the Cash Manager
under this Agreement shall be without prejudice to the liabilities of the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee
and the Funding 2 Security Trustee to the Cash Manager or vice versa
incurred before the date of such termination. The Cash Manager shall have
no right of set-off or any lien in respect of such amounts against
amounts held by it on behalf of the Mortgages Trustee, Funding 1, Funding
2, the Funding 1 Security Trustee or the Funding 2 Security Trustee.
(b) This Agreement shall terminate automatically at such time as Funding 1
and Funding 2 have no further interest in the Trust Property and the
Intercompany Loans and the Master Intercompany Loan have been fully
repaid or Funding 1's obligations under the Intercompany Loans and
Funding 2's obligations under the Master Intercompany Loan Agreement have
been otherwise discharged.
(c) On termination of the appointment of the Cash Manager under the
provisions of this Clause 13, the Cash Manager shall be entitled to
receive all fees and other monies accrued up to (but excluding) the date
of termination but shall not be entitled to any other or further
compensation. Such monies so receivable by the Cash Manager shall be paid
by the Mortgages Trustee, on the dates on which they would otherwise have
fallen due hereunder and under the terms of the Funding 1 Deed of Charge.
For the avoidance of doubt, such termination shall not affect the Cash
Manager's rights to receive payment of all amounts (if any) due to it
from the Mortgages Trustee, Funding 1 or Funding 2 other than under this
Agreement.
(d) Any provision of this Agreement which is stated to continue after
termination of the Agreement shall remain in full force and effect
notwithstanding termination.
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14. FURTHER ASSURANCE
14.1 CO-OPERATION, ETC.
The parties hereto 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 Agreement.
14.2 POWERS OF ATTORNEY
Without prejudice to the generality of Clause 14.1, the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee shall upon request by the Cash Manager
forthwith give to the Cash Manager such further powers of attorney or
other written authorisations, mandates or instruments as are necessary to
enable the Cash Manager to perform the Cash Management Services.
14.3 CHANGE OF THE FUNDING 1 SECURITY TRUSTEE OR THE FUNDING 2 SECURITY
TRUSTEE
In the event that there is any change in the identity of the Funding 1
Security Trustee or the Funding 2 Security Trustee or an additional
Funding 1 Security Trustee or an additional Funding 2 Security Trustee is
appointed in accordance with the Funding 1 Deed of Charge or the Funding
2 Deed of Charge, as the case may be, the Cash Manager shall execute such
documents with any other parties to this Agreement and take such actions
as such new Funding 1 Security Trustee or such new Funding 2 Security
Trustee may reasonably require for the purposes of vesting in such new
Funding 1 Security Trustee or such new Funding 2 Security Trustee the
rights of the Funding 1 Security Trustee and the Funding 2 Security
Trustee, as the case may be, under this Agreement and under the Funding 1
Deed of Charge and the Funding 2 Deed of Charge, as the case may be, and
releasing the retiring Funding 1 Security Trustee or the retiring Funding
2 Security Trustee from further obligations thereunder and while any of
the Notes of any Funding 1 Issuer or the Master Issuer, as the case may
be, remains outstanding shall give notice thereof to the Rating Agencies.
14.4 NO OBLIGATION ON THE FUNDING 1 SECURITY TRUSTEE OR THE FUNDING 2 SECURITY
TRUSTEE
Nothing herein contained shall impose any obligation or liability on the
Funding 1 Security Trustee or the Funding 2 Security Trustee to assume or
perform any of the obligations of the Mortgages Trustee, Funding 1,
Funding 2 or the Cash Manager hereunder or render either the Funding 1
Security Trustee or the Funding 2 Security Trustee liable for any breach
thereof.
15. MISCELLANEOUS
15.1 NO SET-OFF
Each of the Seller and the Cash Manager agrees that it will not:
(a) set off or purport to set off any amount which any of the
Mortgages Trustee, Funding 1 or Funding 2 is or will become
obliged to pay to it under this Agreement against any amount from
time to time standing to the credit of or to be credited to the
Mortgages Trustee GIC Account, any Funding 1 Bank Account or any
Funding 2 Bank Account or any replacement or additional bank
account of any of the Mortgages Trustee, Funding 1 or Funding 2;
or
(b) make or exercise any claims or demands, any rights of counterclaim
or any other equities against or withhold payment of any and all
sums of money which may at any time and from time to time be
standing to the credit of the Mortgages Trustee GIC Account, any
Funding 1
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Bank Account or any Funding 2 Bank Account or any replacement of
additional bank accounts of any of the Mortgages Trustee, Funding
1 or Funding 2.
15.2 NO PETITION
The Cash Manager agrees that for so long as any Notes of any Funding 1
Issuer or the Master Issuer are outstanding it will not petition or
commence proceedings for the administration (including, for the avoidance
of doubt, the filing of documents with the court or the service of a
notice of intention to appoint an administrator) or winding up of the
Mortgages Trustee, Funding 1, Funding 2 or any Funding 1 Issuer or the
Master Issuer or participate in any ex parte proceedings with regard
thereto.
15.3 NO RECOURSE
(a) In relation to all sums due and payable by the Mortgages Trustee, Funding
1 or Funding 2 to the Cash Manager, the Cash Manager agrees that it shall
have recourse only to sums paid to or received by (or on behalf of) the
Mortgages Trustee, Funding 1 and Funding 2 pursuant to the provisions of
the Transaction Documents.
(b) For the avoidance of doubt, neither the Funding 1 Security Trustee nor
the Funding 2 Security Trustee shall be liable to pay any amounts due
under Clause 8, and without prejudice to the obligations of the Mortgages
Trustee, Funding 1 or Funding 2, as the case may be, or any receiver
appointed pursuant to the Funding 1 Deed of Charge or the Funding 2 Deed
of Charge, as the case may be, in respect of such amounts.
(c) Notwithstanding any other provisions of this Agreement, all obligations
to, and rights of the Funding 1 Security Trustee and the Funding 2
Security Trustee under or in connection with this Agreement (other than
their respective obligations under Clause 14) shall automatically
terminate upon the discharge in full (in the case of the Funding 1
Security Trustee) of the Funding 1 Secured Obligations and (in the case
of the Funding 2 Security Trustee) the Funding 2 Secured Obligations,
PROVIDED THAT this shall be without prejudice to any claims in respect of
such obligations and rights arising on or prior to such date.
16. CONFIDENTIALITY
During the continuance of this Agreement or after its termination, each
of the Mortgages Trustee, the Cash Manager, the Seller, Funding 1,
Funding 2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee shall use its best endeavours not to disclose to any person, firm
or company whatsoever any information relating to the business, finances
or other matters of a confidential nature of any other party hereto of
which it may exclusively by virtue of being party to the Transaction
Documents have become possessed and shall use all reasonable endeavours
to prevent any such disclosure as aforesaid, PROVIDED HOWEVER that the
provisions of this Clause 16 shall not apply:
(a) to any information already known to the recipient otherwise than
as a result of entering into any of the Transaction Documents;
(b) to any information subsequently received by the recipient which it
would otherwise be free to disclose;
(c) to any information which is or becomes public knowledge otherwise
than as a result of the conduct of the recipient;
(d) to any extent that the recipient is required to disclose the same
pursuant to any law or order of any court of competent
jurisdiction or pursuant to any direction, request or requirement
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(whether or not having the force of law) of any central bank or
any governmental or other authority (including, without
limitation, any official bank examiners or regulators);
(e) to the extent that the recipient needs to disclose the same for
determining the existence of, or declaring, a Note Event of
Default, an Intercompany Loan Event of Default, a Master
Intercompany Loan Event of Default or a Cash Manager Termination
Event, the protection or enforcement of any of its rights under
any of the Transaction Documents or in connection herewith or
therewith or for the purpose of discharging, in such manner as it
thinks fit, its duties under or in connection with such agreements
in each case to such persons as require to be informed of such
information for such purposes; or
(f) in relation to any information disclosed to the professional
advisers of the recipient or (in connection with a prospective
rating of any debt issued or to be issued by any Funding 1 Issuer,
any New Issuer or the Master Issuer) to any Rating Agency or any
prospective new cash manager or prospective new security trustee.
17. NOTICES
Any notices to be given pursuant to this Agreement to any of the parties
hereto shall be sufficiently served if sent by prepaid first class post,
by hand or facsimile transmission and shall 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 on a day which is not a London Business Day 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 Cash Manager: to Halifax plc, Xxxxxxx Xxxx,
Xxxxxxx, Xxxx Xxxxxxxxx XX0 0XX (LP/3/3/SEC) (facsimile number +44
(0) 113 235 7511) 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, Esplanade, St Helier, Jersey JE1 OBD, Channel
Islands (facsimile number x00 (0) 0000 000000) for the attention
of the Secretary 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 and Securitisation and
Covered Bonds;
(c) in the case of the Seller, to Halifax plc: Xxxxxxx Xxxx
(XX/0/0/XXX), 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;
(d) in the case of Funding 1: to Permanent Funding (No. 1) Limited, 00
Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (facsimile number +44 (020)
7398 6325) for the attention of the Secretary with a copy to HBOS
Treasury Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX
(facsimile number x00 (000) 0000 0000) for the attention of Head
of Mortgage Securitisation and Covered Bonds;
(e) in the case of Funding 2: to Permanent Funding (No. 2) Limited, 00
Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (facsimile number +44 (020)
7398 6325) for the attention of the Secretary with a copy to HBOS
Treasury Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX
(facsimile number x00 (000) 0000 0000) for the attention of Head
of Mortgage Securitisation and Covered Bonds; and
19
(f) in the case of the Funding 1 Security Trustee and the Funding 2
Security Trustee: to The Bank of Xxx Xxxx, Xxx Xxxxxx Xxxxxx,
Xxxxxx X00 0XX (facsimile number x00 (0) 00 0000 0000/6339) 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 17.
18. NO PARTNERSHIP
It is hereby acknowledged and agreed by the parties that nothing in this
Agreement shall be construed as giving rise to any partnership between
any of the parties.
19. ASSIGNMENT
19.1 ASSIGNMENT BY THE MORTGAGES TRUSTEE, FUNDING 1 AND FUNDING 2
None of the Mortgages Trustee, Funding 1 nor Funding 2 may assign or
transfer any of its respective rights and obligations under this
Agreement without the prior written consent of:
(a) in the case of the Mortgages Trustee, each of the Beneficiaries,
the Funding 1 Security Trustee and the Funding 2 Security Trustee;
(b) in the case of Funding 1, the Funding 1 Security Trustee and the
Cash Manager; and
(c) in the case of Funding 2, the Funding 2 Security Trustee and the
Cash Manager,
except that Funding 1 may assign its respective rights hereunder without
such consent pursuant to the Funding 1 Deed of Charge and Funding 2 may
assign its respective rights hereunder without such consent pursuant to
the Funding 2 Deed of Charge.
19.2 NO ASSIGNMENT BY CASH MANAGER
The Cash Manager may not assign or transfer any of its rights and
obligations under this Agreement without the prior written consent of the
Mortgages Trustee, each of the Beneficiaries, the Funding 1 Security
Trustee and the Funding 2 Security Trustee.
20. AMENDMENTS AND CONSENTS
20.1 Subject to Clause 2 , Clause 3 and Clause 4 of the Controlling
Beneficiary Deed (as applicable) and (in the case of Funding 1) Clause 25
of the Funding 1 Deed of Charge and (in the case of Funding 2) Clause 12
of the Funding 2 Deed of Charge , no amendment or waiver of any provision
of this Agreement shall be effective unless the same shall be in writing
and signed by (or by some person duly authorised by) each of the parties
to this Agreement. In the case of a waiver, such waiver 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. No
single or partial exercise of, or failure or delay in exercising, any
right under this Agreement shall constitute a waiver or preclude any
other or further exercise of that or any other right.
20.2 Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee will each exercise all rights, powers, benefits and/or
discretions conferred on it under this Agreement (including, without
limitation, in giving its consent, approval or authorisation to any
event, matter or thing requested hereunder) in accordance with Clauses 2,
3 and 4 of the Controlling Beneficiary
20
Deed (as applicable) and (in the case of Funding 1) Clause 25 of the
Funding 1 Deed of Charge and (in the case of Funding 2) Clause 12 of the
Funding 2 Deed of Charge..
21. EXCLUSION OF THIRD PARTY RIGHTS
The parties to this Agreement do not intend that any term of this
Agreement should be enforced, by virtue of the Contracts (Rights of Third
Parties) Xxx 0000, by any person who is not a party to this Agreement.
22. COUNTERPARTS
This Agreement may be executed in any number of counterparts (manually or
by facsimile) each of which, when executed and delivered, shall
constitute an original, but all the counterparts shall together
constitute but one and the same instrument provided, however, that this
Agreement shall have no force or effect until it is executed by the last
party to execute the same and shall be deemed to have been executed and
delivered in the place where such last party executed this Agreement.
23. SEVERABILITY
Where any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations
under this Agreement, or of such provision or obligation in any other
jurisdiction, shall not be affected or impaired thereby.
24. GOVERNING LAW AND SUBMISSION TO JURISDICTION
24.1 This Agreement is governed by, and shall be construed in accordance with,
the laws of England.
24.2 Each party to this Agreement hereby irrevocably submits to the exclusive
jurisdiction of the English courts in any action or proceeding arising
out of or relating to this Agreement, 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 Agreement hereby
irrevocably waives, to the fullest extent it may possibly do so, any
defence or claim that the English courts are an inconvenient forum for
the maintenance or hearing of such action or proceeding. The Mortgages
Trustee irrevocably appoints Structured Finance Management Limited at 00
Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX as its agent for the service of
process.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed
the day and year first before written.
21
SCHEDULE 1
THE CASH MANAGEMENT SERVICES
The Cash Manager shall:
(a) make the determinations set out in Schedule 2 hereto;
(b) operate the Mortgages Trustee GIC Account, the Funding 1 GIC Account, the
Funding 1 Transaction Account, the Funding 2 GIC Account, the Funding 2
Transaction Account or any other Bank Account and ensure that payments
are made into and from such accounts in accordance with this Agreement,
the Mortgages Trust Deed, the Funding 1 Deed of Charge, the Funding 2
Deed of Charge, the Bank Account Agreement, the Mortgages Trustee
Guaranteed Investment Contract, the Funding 1 Guaranteed Investment
Contract, the Funding 2 Guaranteed Investment Contract and any other
applicable Transaction Document PROVIDED HOWEVER THAT nothing herein
shall require the Cash Manager to make funds available to the Mortgages
Trustee, Funding 1 or Funding 2 to enable such payments to be made other
than as expressly required by the provisions of this Agreement;
(c) keep records for all taxation purposes (including, without limitation
VAT);
(d) assist the auditors of the Mortgages Trustee, Funding 1 and Funding 2 and
provide such information to them as they may reasonably request for the
purpose of carrying out their duties as auditors;
(e) make all filings, give all notices and make all registrations and other
notifications required in the day-to-day operation of the respective
businesses of the Mortgages Trustee, Funding 1 and Funding 2 or required
to be given by the Mortgages Trustee, Funding 1 or Funding 2 pursuant to
the Transaction Documents;
(f) arrange for all payments due to be made by the Mortgages Trustee and/or
Funding 1 and/or Funding 2 under any of the Transaction Documents,
PROVIDED THAT such monies are at the relevant time available to the
Mortgages Trustee and/or Funding 1 and/or Funding 2 and PROVIDED FURTHER
that nothing herein shall constitute a guarantee by the Cash Manager of
all or any of the obligations of the Mortgages Trustee, Funding 1 or
Funding 2 under any of the Transaction Documents;
(g) without prejudice to the role of and in conjunction with the relevant
Corporate Services Provider under the relevant Corporate Services
Agreement, keep general books of account and records of the Mortgages
Trustee, Funding 1 and Funding 2; provide accounting services, including
reviewing receipts and payments, supervising and assisting in the
preparation of interim statements and final accounts and supervising and
assisting in the preparation of Tax returns;
(h) without prejudice to the role of and in conjunction with the relevant
Corporate Services Provider under the relevant Corporate Services
Agreement, provide or procure the provision of company secretarial and
administration services to the Mortgages Trustee, Funding 1 and Funding 2
including the keeping of all registers and the making of all returns and
filings required by applicable law or by US or UK regulatory authorities
(including the Securities and Exchange Commission), co-operate in the
convening of board and general meetings and provide registered office
facilities;
(i) itself on behalf of the Mortgages Trustee, Funding 1 and Funding 2,
PROVIDED THAT such monies are at the relevant time available to the
Mortgages Trustee, Funding 1 and Funding 2, pay all the out-of-pocket
expenses of the Mortgages Trustee, Funding 1 and Funding 2, incurred by
the Cash
22
Manager on behalf of the Mortgages Trustee, Funding 1 and Funding 2, as
the case may be, in the performance of the Cash Manager's duties
hereunder including without limitation:
(i) all Taxes which may be due or payable by the Mortgages Trustee,
Funding 1 and Funding 2;
(ii) all registration, transfer, filing and other fees and other
charges payable in respect of the sale by the Seller of the
Portfolio to the Mortgages Trustee;
(iii) all fees payable to the London Stock Exchange plc;
(iv) all necessary filing and other fees in compliance with regulatory
requirements;
(v) all legal and audit fees and other professional advisory fees;
(vi) all communication expenses including postage, courier and
telephone charges; and
(vii) all premiums payable by the Mortgages Trustee in respect of the
Insurance Policies;
(j) at the request of Funding 1 or Funding 2, as the case may be (but also
with the prior written consent of the Funding 1 Security Trustee or the
Funding 2 Security Trustee, as the case may be), invest monies standing
from time to time to the credit of the Funding 1 GIC Account and the
Funding 1 Liquidity Stand-by Account (if any) or the Funding 2 GIC
Account, as the case may be, in Authorised Investments, subject to the
following provisions:
(i) any such Authorised Investment shall be made in the joint names of
the Funding 1 Security Trustee and Funding 1 or the Funding 2
Security Trustee and Funding 2, as the case may be;
(ii) any costs properly and reasonably incurred in making and changing
Authorised Investments will be reimbursed to the Cash Manager, the
Funding 1 Security Trustee and the Funding 2 Security Trustee by
Funding 1 or Funding 2, as the case may be;
(iii) all income or other distributions arising on, or proceeds
following the disposal or maturity of, Authorised Investments
shall be credited to the Funding 1 GIC Account or the Funding 2
GIC Account, as the case may be; and
(iv) the Funding 1 Security Trustee, the Funding 2 Security Trustee and
the Cash Manager shall not be responsible (save where any loss
results from the Funding 1 Security Trustee's, the Funding 2
Security Trustee's or the Cash Manager's, as the case may be, own
fraud, wilful default or negligence or that of their respective
officers or employees) for any loss occasioned by reason of any
such Authorised Investments whether by depreciation in value or
otherwise provided that such Authorised Investments were made in
accordance with the above provisions.
23
SCHEDULE 2
CASH MANAGEMENT AND MAINTENANCE OF LEDGERS
1. DETERMINATION
(a) On each Calculation Date based on the amount of monies standing to the
credit of the Mortgages Trustee GIC Account as at close of business on
the London Business Day immediately preceding the relevant Calculation
Date, the Cash Manager shall determine each of the following:
(i) the amount of Principal Receipts and Revenue Receipts received
during the preceding Calculation Period; and
(ii) the amount of Mortgages Trust Available Revenue Receipts and
Mortgages Trust Available Principal Receipts to be distributed to
Funding 1, Funding 2 and to the Seller on the Distribution Date
immediately following the relevant Calculation Date.
(b) On each Calculation Date, the Cash Manager shall determine each of the
following:
(i) the amount of any Losses incurred on the Loans in the period from
the immediately preceding Calculation Date to the relevant
Calculation Date;
(ii) the Funding 1 Share, the Seller Share, the Funding 2 Share, the
Funding 1 Share Percentage, the Funding 2 Share Percentage and the
Seller Share Percentage in accordance with clause 8 of the
Mortgages Trust Deed; and
(iii) the Minimum Seller Share in accordance with clause 9.2 of the
Mortgages Trust Deed.
(c) Four Business Days prior to each Funding 1 Interest Payment Date the Cash
Manager shall determine each of the following:
(i) the amount of any Funding 1 Available Revenue Receipts to be
applied on the following Funding 1 Interest Payment Date in
accordance with the Funding 1 Pre-Enforcement Revenue Priority of
Payments;
(ii) the amount of any Funding 1 Available Principal Receipts to be
applied on the following Funding 1 Interest Payment Date in
accordance with the Funding 1 Principal Priority of Payments; and
(iii) the amount of any Funding 1 Income Deficit.
(d) Four Business Days prior to each Funding 2 Interest Payment Date the Cash
Manager shall determine each of the following:
(i) the amount of any Funding 2 Available Revenue Receipts to be
applied on the following Funding 2 Interest Payment Date in
accordance with the Funding 2 Pre-Enforcement Revenue Priority of
Payments;
(ii) the amount of any Funding 2 Available Principal Receipts to be
applied on the following Funding 2 Interest Payment Date in
accordance with the Funding 2 Principal Priority of Payments; and
(iii) the amount of any Funding 2 Income Deficit.
24
(e) The Cash Manager shall make all the determinations referred to in
paragraphs 1(a) to (d) above on the basis of the following assumptions:
(i) that the amount of any Losses will not increase;
(ii) that any debit balance on the Funding 1 Principal Deficiency
Ledger or the Funding 2 Principal Deficiency Ledger, as the case
may be, will not increase; and
(iii) such other assumptions (including without limitation as to the
amount of any payments or provisions to be made in accordance with
the applicable Funding 1 Priority of Payments or the Funding 2
Priority of Payments, as the case may be) as the Cash Manager
considers appropriate.
The Cash Manager shall on request notify the Mortgages Trustee, Funding
1, Funding 2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee in writing of any such other assumptions and shall take account
of any representations made by the Mortgages Trustee, Funding 1, Funding
2, the Funding 1 Security Trustee and the Funding 2 Security Trustee (as
the case may be) in relation thereto.
(f) The Cash Manager shall, if necessary, perform all currency conversions
free of charge, cost or expense at the relevant exchange rate (for the
purposes of any calculations referred to above, (i) all percentages
resulting from such calculations will be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point (e.g. 9.876541%
being rounded down to 9.87654%) and (ii) any currency amounts used in or
resulting from such calculations will be rounded in accordance with the
relevant market practice).
(g) Each determination made in accordance with this paragraph 1 shall (in the
absence of bad faith, wilful default, negligence and manifest error) be
final and binding on all persons.
2. NOTIFICATION OF DETERMINATIONS
(a) The Cash Manager will cause each determination of Principal Receipts,
Revenue Receipts, Losses, Mortgages Trust Available Revenue Receipts,
Mortgages Trust Available Principal Receipts, the Funding 1 Share, the
Funding 2 Share, the Seller Share, the Funding 1 Share Percentage, the
Funding 2 Share Percentage, the Seller Share Percentage and the Minimum
Seller Share to be notified forthwith in writing to the Mortgages
Trustee, the Beneficiaries, the Funding 1 Security Trustee (in the case
of Funding 1) and the Funding 2 Security Trustee (in the case of Funding
2).
(b) The Cash Manager will cause each determination of the Funding 1 Income
Deficit (if any), the Funding 2 Income Deficit (if any), the Funding 1
Liquidity Shortfall (if any), the Funding 2 Liquidity Shortfall (if any),
the Funding 1 Available Revenue Receipts, the Funding 1 Available
Principal Receipts, the Funding 2 Available Revenue Receipts and the
Funding 2 Available Principal Receipts to be notified forthwith in
writing to Funding 1 (in the case of Funding 1) and Funding 2 (in the
case of Funding 2), the Funding 1 Security Trustee (in the case of
Funding 1) and the Funding 2 Security Trustee (in the case of Funding 2).
3. PRIORITY OF PAYMENTS FOR MORTGAGES TRUST AVAILABLE REVENUE RECEIPTS
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date withdraw Cash from
the Mortgages Trustee GIC Account and/or, in the case of sums to be
provided for, retain Cash in the amounts required (to the extent that
such withdrawal does not cause the Mortgages Trustee GIC Account to
become overdrawn or, if any amounts are retained by way of provision for
the relevant liability and are thus not withdrawn, to the extent that
withdrawal of those amounts that are withdrawn would not, if such
retained amounts were also to be
25
withdrawn, cause the balance on the Mortgages Trustee GIC Account to
become overdrawn) in an aggregate amount equal the Mortgages Trust
Available Revenue Receipts on each Distribution Date. The withdrawal
shall be used to make the payments and provisions in the order of
priority set out in clause 10.2 of the Mortgages Trust Deed (in each case
only if and to the extent that payments or provisions of a higher
priority have been made in full).
4. PRIORITY OF PAYMENTS FOR MORTGAGES TRUST AVAILABLE PRINCIPAL RECEIPTS
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date, withdraw Cash from
the Mortgages Trustee GIC Account (to the extent only that such
withdrawal does not cause the Mortgages Trustee GIC Account to become
overdrawn) in an aggregate amount equal to the Mortgages Trust Available
Principal Receipts on each Distribution Date to make the payments in the
order of priority set out in clause 11 of the Mortgages Trust Deed.
5. PRIORITY OF PAYMENTS FOR FUNDING 1 AVAILABLE REVENUE RECEIPTS
Funding 1 Available Revenue Receipts will be applied by the Cash Manager
on each Funding 1 Interest Payment Date until enforcement of the Funding
1 Security pursuant to the Funding 1 Deed of Charge or until such time as
there are no amounts outstanding under any Intercompany Loan Agreement,
in making such payments and provisions in the order of priority set out
in the Funding 1 Pre-Enforcement Revenue Priority of Payments (in each
case only if and to the extent that payments or provisions of a higher
priority have been made in full) as set out in Part 1 of Schedule 3 to
the Funding 1 Deed of Charge (as the same may be amended, varied or
restated from time to time).
6. PRIORITY OF PAYMENTS FOR FUNDING 1 AVAILABLE PRINCIPAL RECEIPTS
Funding1 Available Principal Receipts will be applied by the Cash
Manager on each Funding 1 Interest Payment Date until enforcement of the
Funding 1 Security pursuant to the Funding 1 Deed of Charge or until
such time as there are no amounts outstanding under any Intercompany
Loan Agreement, in making such payments and provisions in the order of
priority (in each case only if and to the extent that payments or
provisions of a higher priority have been made in full) set out in Part
2 of Schedule 3 to the Funding 1 Deed of Charge.
7. FUNDING 1 INCOME DEFICIT/FUNDING 1 LIQUIDITY FACILITY
(a) If the Cash Manager determines four Business Days prior to a Funding 1
Interest Payment Date that there will be a Funding 1 Income Deficit, then
the Cash Manager, on behalf of Funding 1, shall pay or provide for such
Funding 1 Income Deficit by applying Funding 1 Principal Receipts (plus
any part of the balance of the Funding 1 Cash Accumulation Ledger which
is not comprised in Funding 1 Available Principal Receipts) to make good
such Funding 1 Income Deficit, and the Cash Manager shall make a
corresponding entry in the relevant Funding 1 Ledgers as described in
paragraphs 14 and 19 below.
(b) If the Cash Manager determines there are no (or insufficient) amounts
standing to the credit of the Funding 1 Principal Ledger and the Cash
Accumulation Ledger to cure the Funding 1 Income Deficit then on the
London Business Day immediately preceding a Funding 1 Interest Payment
Date the Cash Manager will, subject to paragraph (c) below, (i) direct
Funding 1 to request a drawing pursuant to CLAUSE 5.1 of the Funding 1
Liquidity Facility Agreement to apply towards such Funding 1 Income
Deficit.
(c) A Funding 1 Liquidity Drawing may not be used to pay interest or
principal (as applicable) on the Term Advances if and to the extent that
there are funds standing to the credit of the Funding 1 Liquidity Reserve
Fund that are available to cure such Funding 1 Income Deficit on such
Funding 1 Interest Payment Date.
26
8. PRIORITY OF PAYMENTS FOR FUNDING 2 AVAILABLE REVENUE RECEIPTS
Funding 2 Available Revenue Receipts will be applied by the Cash Manager
on each Funding 2 Interest Payment Date until enforcement of the Funding
2 Security pursuant to the Funding 2 Deed of Charge or until such time as
there are no amounts outstanding under the Master Intercompany Loan
Agreement, in making such payments and provisions in the order of
priority set out in the Funding 2 Pre-Enforcement Revenue Priority of
Payments (in each case only if and to the extent that payments or
provisions of a higher priority have been made in full) as set out in
Part 1 of Schedule 3 to the Funding 2 Deed of Charge (as the same may be
amended, varied or restated from time to time).
9. PRIORITY OF PAYMENTS FOR FUNDING 2 AVAILABLE PRINCIPAL RECEIPTS
Funding 2 Available Principal Receipts will be applied by the Cash
Manager on each Funding 2 Interest Payment Date until enforcement of the
Funding 2 Security pursuant to the Funding 2 Deed of Charge or until such
time as there are no amounts outstanding under the Master Intercompany
Loan Agreement, in making such payments and provisions in the order of
priority (in each case only if and to the extent that payments or
provisions of a higher priority have been made in full) set out in Part 2
of Schedule 3 to the Funding 2 Deed of Charge.
10. FUNDING 2 INCOME DEFICIT
If the Cash Manager determines four Business Days prior to a Funding 2
Interest Payment Date that there will be a Funding 2 Income Deficit, then
the Cash Manager, on behalf of Funding 2, shall pay or provide for such
Funding 2 Income Deficit by applying Funding 2 Principal Receipts (plus
any part of the balance of the Funding 2 Cash Accumulation Ledger which
is not comprised in Funding 2 Available Principal Receipts) to make good
such Funding 2 Income Deficit, and the Cash Manager shall make a
corresponding entry in the relevant Funding 2 Ledgers as described in
paragraphs 14 and 26 below.
11. OTHER PAYMENTS
Each of the Beneficiaries and the Cash Manager agrees, and the Mortgages
Trustee concurs, that (save as otherwise specified below) the following
payments may be made from the Mortgages Trustee GIC Account (to the
extent that withdrawal of those amounts would not cause the balance of
the Mortgages Trustee GIC Account to become overdrawn) on any date:
(i) if any amount has been received from a Borrower for the express
purpose of payment being made to a third party for the provision
of a service (including giving insurance cover) to either that
Borrower or the Seller or the Mortgages Trustee, to pay such
amount when due to such third party or, in the case of the payment
of an insurance premium, where such third party and the Cash
Manager have agreed that payment of commission should be made by
deduction from such insurance premium, to pay such amount less
such commissions when due to such third party and to pay such
commission to the Cash Manager and to pay any premiums in respect
of any Insurance Policy or other insurance policy relating to any
Loan comprised in the Portfolio;
(ii) to pay to any person (including the Cash Manager) any amounts due
arising from any overpayment by any person or arising from any
reimbursement by any person of any such overpayment (including,
for the avoidance of doubt, where arising from the failure of a
direct debit);
(iii) to pay when due (but subject to any right to refuse or withhold
payment or of set-off that has arisen by reason of the Borrower's
breach of the terms of the relevant Mortgage or Loan) any
27
amount payable to a Borrower under the terms of the Mortgage or
the Loan to which that Borrower is a party, and to pay when due
any amount payable by the Mortgages Trustee to the Seller pursuant
to clauses 3.3, 4.4 and 5.2 of the Mortgage Sale Agreement;
(iv) to pay to the Seller any amounts (including, for the avoidance of
doubt, any Early Repayment Fees) received and held by the
Mortgages Trustee on trust for the Seller pursuant to clause 5 of
the Mortgage Sale Agreement;
(v) to pay when due and payable any amounts due and payable by the
Mortgages Trustee to third parties and incurred without breach by
the Mortgages Trustee of the Mortgages Trust Deed and not provided
for payment elsewhere in this paragraph 8;
(vi) to refund any amounts due arising from the rejection of any
payments in respect of a Loan and any other amounts which have not
been received by the Mortgages Trustee as cleared funds; and
(vii) to refund to the Seller any amounts which represent amounts
received from Borrowers but which do not form part of the Mortgage
Account balance or comprise unpaid interest as at the relevant
date and which are amounts owed by such Borrowers in respect of
the period prior to the date on which the Mortgage Loan (together
with its Related Security) relating to such Mortgage Account was
transferred to the Mortgages Trustee as and when identified by the
Cash Manager and if a Borrower fails to pay the full amount that
it owes, the Cash Manager shall be obliged to refund to the Seller
only such portion of the amount which relates to any period prior
to such transfer.
12. USE OF LEDGERS
The Cash Manager shall forthwith record monies received or payments made
by it on behalf of the Mortgages Trustee, Funding 1 or Funding 2 in the
ledgers in the manner set out in this Agreement. If, at any time, the
Cash Manager is in any doubt as to which ledger a particular amount
should be credited or debited, it shall consult with the Funding 1
Security Trustee and the Funding 2 Security Trustee (as applicable)
thereon.
Except in the case of the Funding 1 Principal Deficiency Ledger or the
Funding 2 Principal Deficiency Ledger, a debit item shall only be made in
respect of any of the Mortgages Trustee Ledgers, the Funding 1 Ledgers
and the Funding 2 Ledgers and the corresponding payment or transfer (if
any) may only be made from the Mortgages Trustee GIC Account, the Funding
1 GIC Account, the Funding 1 Transaction Account, the Funding 2 GIC
Account or the Funding 2 Transaction Account, as the case may be, to the
extent that such entry does not cause the relevant ledger to have a debit
balance. In the case of the Funding 1 Principal Deficiency Ledger, each
Funding 1 Principal Deficiency Sub-Ledger, the Funding 2 Principal
Deficiency Ledger and each Funding 2 Principal Deficiency Sub-Ledger, a
credit item shall only be made to the extent that such entry does not
cause such ledger to have a credit balance.
13. REVENUE LEDGER
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Revenue Ledger:
(i) all Revenue Receipts; and
(ii) all interest received by the Mortgages Trustee on the
Mortgages Trustee GIC Account; and
28
(b) any payment or provision made under paragraph 3 above shall be
debited to the Revenue Ledger.
14. PRINCIPAL LEDGER
The Cash Manager shall ensure that:
(a) all Principal Receipts shall be credited to the Principal Ledger;
and
(b) any payment or provision made under paragraph 4 above shall be
debited to the Principal Ledger.
15. LOSSES LEDGER
The Cash Manager shall ensure that all Losses shall be recorded in the
Losses Ledger.
16. FUNDING 1 SHARE/FUNDING 2 SHARE/SELLER SHARE LEDGER
The Cash Manager shall ensure that the Current Funding 1 Share and the
Current Funding 1 Share Percentage of the Trust Property, the Current
Funding 2 Share and the Current Funding 2 Share Percentage of the Trust
Property and the Current Seller Share and the Current Seller Share
Percentage of the Trust Property are recorded in the Funding 1
Share/Funding 2 Share/Seller Share Ledger on the Initial Closing Date (in
the case of Funding 1 and the Seller) and on the Programme Date (in the
case of Funding 2) and thereafter on each Distribution Date.
17. FUNDING 1 REVENUE LEDGER
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Funding 1 Revenue
Ledger:
(i) all Funding 1 Revenue Receipts;
(ii) all interest received by Funding 1 in respect of the
Funding 1 Bank Accounts;
(iii) all amounts received by Funding 1 representing income on
any Funding 1 Authorised Investments;
(iv) all amounts (other than any early termination payment which
is to be used to acquire, if necessary, a new swap)
received by Funding 1 under the Funding 1 Swap Agreement;
and
(v) any amount debited to the Funding 1 Principal Ledger under
paragraph 19(b)(ii) below; and
(b) any payment or provision made under paragraph 5 above shall be
debited to the Funding 1 Revenue Ledger.
18. FUNDING 1 LIQUIDITY FACILITY LEDGER
The Cash Manager shall ensure that:
(a) all Funding 1 Liquidity Facility Drawings shall be credited to the
Funding 1 Liquidity Facility Ledger; and
29
(b) all Funding 1 Liquidity Facility Repayments shall be noted on the
Funding 1 Liquidity Facility Ledger.
19. FUNDING 1 PRINCIPAL LEDGER
Without prejudice to paragraph 20 below, the Cash Manager shall ensure
that:
(a) the following amounts shall be credited to the Funding 1 Principal
Ledger:
(i) all Funding 1 Principal Receipts; and
(ii) amounts credited to the Funding 1 Principal Deficiency
Ledger under paragraph 5 above and paragraph 20 below; and
(b) the following amounts shall be debited to the Funding 1 Principal
Ledger:
(i) the aggregate amount paid pursuant to paragraph 6 above
(other than any remainder to be credited to the Funding 1
Principal Ledger); and
(ii) on each Funding 1 Interest Payment Date, an amount equal to
the Funding 1 Income Deficit on such Funding 1 Interest
Payment Date.
20. FUNDING 1 PRINCIPAL DEFICIENCY LEDGER
(a) Without prejudice to paragraph 5 above, the Cash Manager shall ensure
that there shall be debited to the Funding 1 Principal Deficiency Ledger:
(i) deficiencies arising from Losses which have been allocated to the
Funding 1 Share; and
(ii) any amount required to be debited to the Funding 1 Principal
Ledger under paragraph 19(b)(ii) above.
(b) The Cash Manager shall ensure that there shall be credited to the Funding
1 Principal Deficiency Ledger any amount to be credited in accordance
with paragraph 5 above.
(c) Amounts to be debited to the Funding 1 Principal Deficiency Ledger shall
be debited in the following order:
(i) first, to the Funding 1 Principal Deficiency Sub-Ledger
corresponding to the Term Advance with the lowest ranking Term
Advance Rating until the debit balance thereon is equal to the
then principal amount outstanding of the corresponding Term
Advance(s); and
(ii) secondly, to the Funding 1 Principal Deficiency Sub-Ledger
corresponding to the Term Advance with the next lowest Term
Advance Rating until the debit balance thereon is equal to the
then principal amount outstanding of corresponding Term
Advance(s),
and so on until amounts are debited to the AAA Principal Deficiency Sub
Ledger, at which point there will be an Asset Trigger Event.
Losses on the Loans and/or the application of Funding 1 Available
Principal Receipts to pay interest on the Term Advances will not be
recorded on the Funding 1 Principal Deficiency Ledger to the extent that
the Funding 1 Share of the Trust Property together with amounts standing
to the credit of the Funding 1 Cash Accumulation Ledger and the Funding 1
Principal Ledger, in aggregate, is greater than or equal to the aggregate
Outstanding Principal Balance of the Intercompany Loans on
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the relevant Funding 1 Interest Payment Date, after taking account of
such Losses or the relevant application of Principal Receipts.
(d) Amounts to be credited to the Funding 1 Principal Deficiency Ledger shall
be credited in the following order:
(i) first, to the Funding 1 Principal Deficiency Sub-Ledger
corresponding to the Term Advance with the highest ranking Term
Advance Rating until the debit balance thereon is reduced to zero;
(ii) secondly, to the Funding 1 Principal Deficiency Sub-Ledger
corresponding to the Term Advance with the next highest ranking
Term Advance Rating until the debit balance thereon is reduced to
zero; and
(iii) thirdly, to the Funding 1 Principal Deficiency Sub-Ledger
corresponding to the Term Advance with the next highest ranking
Term Advance Rating until the debit balance thereon is reduced to
zero,
and so on until the balance of the Funding 1 Principal Deficiency Ledger
is zero.
21. FUNDING 1 GENERAL RESERVE LEDGER
(a) A tranche (if any) drawn down on a relevant Closing Date by Funding 1
pursuant to a Start-Up Loan Agreement for the purposes of funding the
Funding 1 General Reserve Fund (or any other similar reserve fund) will
be credited to the Funding 1 General Reserve Ledger.
(b) Amounts shall be credited to the Funding 1 General Reserve Ledger in
accordance with the Funding 1 Priority of Payments above.
(c) Amounts shall be debited to the Funding 1 General Reserve Ledger on each
Funding 1 Interest Payment Date in order to be applied in accordance with
the order of priority of payments set out in Schedule 3 to the Funding 1
Deed of Charge.
22. FUNDING 1 LIQUIDITY RESERVE LEDGER
(a) Amounts shall be credited to the Funding 1 Liquidity Reserve Ledger in
accordance with the Funding 1 Priority of Payments above.
(b) Amounts shall be debited to the Funding 1 Liquidity Reserve Ledger to the
extent permitted on each relevant Funding 1 Interest Payment Date in
order to be applied in accordance with the priority of payments set out
in Schedule 3 to the Funding 1 Deed of Charge.
23. INTERCOMPANY LOAN LEDGER
The Cash Manager shall ensure that all payments of interest and
repayments of principal on each of the Term Advances are recorded in the
Intercompany Loan Ledger.
24. FUNDING 1 CASH ACCUMULATION LEDGER
The Cash Manager shall ensure that all Funding 1 Principal Receipts
reserved by Funding 1 to pay the relevant Bullet Term Advances are
recorded on the Funding 1 Cash Accumulation Ledger.
25. FUNDING 2 REVENUE LEDGER
The Cash Manager shall ensure that:
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(a) the following amounts shall be credited to the Funding 2 Revenue
Ledger:
(i) all Funding 2 Revenue Receipts;
(ii) all interest received by Funding 2 in respect of the
Funding 2 Bank Accounts;
(iii) all amounts received by Funding 2 representing income on
any Funding 2 Authorised Investments;
(iv) all amounts (other than any early termination payment which
is to be used to acquire, if necessary, a new swap)
received by Funding 2 under the Funding 2 Swap Agreement;
and
(v) any amount debited to the Funding 2 Principal Ledger under
paragraph 26(b)(ii) below; and
(b) any payment or provision made under paragraph 8 above shall be
debited to the Funding 2 Revenue Ledger.
26. FUNDING 2 PRINCIPAL LEDGER
Without prejudice to paragraph 27 below, the Cash Manager shall ensure
that:
(a) the following amounts shall be credited to the Funding 2 Principal
Ledger:
(i) all Funding 2 Principal Receipts; and
(ii) amounts credited to the Funding 2 Principal Deficiency
Ledger under paragraph 8 above and paragraph 27 below; and
(b) the following amounts shall be debited to the Funding 2 Principal
Ledger:
(i) the aggregate amount paid pursuant to paragraph 9 above
(other than any remainder to be credited to the Funding 2
Principal Ledger); and
(ii) on each Funding 2 Interest Payment Date, an amount equal to
the Funding 2 Income Deficit on such Funding 2 Interest
Payment Date.
27. FUNDING 2 PRINCIPAL DEFICIENCY LEDGER
(a) Without prejudice to paragraph 8 above, the Cash Manager shall ensure
that there shall be debited to the Funding 2 Principal Deficiency Ledger:
(i) deficiencies arising from Losses which have been allocated to the
Funding 2 Share; and
(ii) any amount required to be debited to the Funding 2 Principal
Ledger under paragraph 26(b)(ii) above.
(b) The Cash Manager shall ensure that there shall be credited to the Funding
2 Principal Deficiency Ledger any amount to be credited in accordance
with paragraph 8 above.
(c) Amounts to be debited to the Funding 2 Principal Deficiency Ledger shall
be debited in the following order:
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(i) first, on the Funding 2 BB Principal Deficiency Sub-Ledger until
the balance of the Funding 2 BB Principal Deficiency Sub-Ledger is
equal to the aggregate principal amount outstanding of all BB Loan
Tranches;
(ii) second, on the Funding 2 BBB Principal Deficiency Sub-Ledger until
the balance of the Funding 2 BBB Principal Deficiency Sub-Ledger
is equal to the aggregate principal amount outstanding of all BBB
Loan Tranches;
(iii) third, on the Funding 2 A Principal Deficiency Sub-Ledger until
the balance of the Funding 2 A Principal Deficiency Sub-Ledger is
equal to the aggregate principal amount outstanding of all A Loan
Tranches;
(iv) fourth, on the Funding 2 AA Principal Deficiency Sub-Ledger until
the balance of the Funding 2 AA Principal Deficiency Sub-Ledger is
equal to the aggregate principal amount outstanding of all AA Loan
Tranches; and
(v) fifth, on the Funding 2 AAA Principal Deficiency Sub-Ledger, at
which point there will be an Asset Trigger Event (unless such
losses are recorded when (a) the aggregate principal amount
outstanding of all BB Loan Tranches, BBB Loan Tranches, A Loan
Tranches and AA Loan Tranches is equal to zero and (b) the sum of
(i) the amount standing to the credit of the Funding 2 General
Reserve Ledger and (ii) the amount standing to the credit of the
Funding 2 Revenue Ledger together with amounts determined and due
to be credited to the Funding 2 Revenue Ledger prior to the
immediately following Funding 2 Interest Payment Date after such
debit is made, is greater than the amount necessary to pay the
items in paragraphs (A) to (E) in the Funding 2 Pre-Enforcement
Revenue Priority of Payments on the immediately following Funding
2 Interest Payment Date after such debit is made).
Losses on the Loans and/or the application of amounts standing to the
credit of the Funding 2 Principal Ledger to pay interest fees on the
Master Intercompany Loan will not be recorded on the Funding 2 Principal
Deficiency Ledger to the extent that the Funding 2 Share of the Trust
Property together with amounts standing to the credit of the Funding 2
Cash Accumulation Ledger and the Funding 2 Principal Ledger, in
aggregate, is greater than or equal to the aggregate Outstanding
Principal Balance of the Loan Tranches under the Master Intercompany Loan
Agreement on the relevant Funding 2 Interest Payment Date, after taking
account of such Losses or the relevant application of Principal Receipts.
(d) Amounts to be credited to the Funding 2 Principal Deficiency Ledger shall
be credited in the following order:
(i) first, in an amount necessary to reduce to zero the balance on the
Funding 2 AAA Principal Deficiency Sub-Ledger;
(ii) second, provided that interest due on the AA Loan Tranches has
been paid, in an amount necessary to reduce to zero the balance on
the Funding 2 AA Principal Deficiency Sub-Ledger;
(iii) third, provided that interest due on the A Loan Tranches has been
paid, in an amount to reduce to zero the balance on the Funding 2
A Principal Deficiency Sub-Ledger;
(iv) fourth, provided that interest due on the BBB Loan Tranches has
been paid, in an amount necessary to reduce to zero the balance on
the Funding 2 BBB Principal Deficiency Sub-Ledger; and
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(v) fifth, provided that interest due on the BB Loan Tranches has been
paid, in an amount necessary to reduce to zero the balance on the
BB Principal Deficiency Sub-Ledger.
28. FUNDING 2 GENERAL RESERVE LEDGER
(a) A tranche (if any) drawn down on a relevant Closing Date by Funding 2
pursuant to a Funding 2 Start-Up Loan Agreement for the purposes of
funding the Funding 2 General Reserve Fund (or any other similar reserve
fund) will be credited to the Funding 2 General Reserve Ledger.
(b) Amounts shall be credited to the Funding 2 General Reserve Ledger in
accordance with the Funding 2 Priority of Payments above.
(c) Amounts shall be debited to the Funding 2 General Reserve Ledger on each
Funding 2 Interest Payment Date in order to be applied in accordance with
the order of priority of payments set out in Schedule 3 to the Funding 2
Deed of Charge.
29. FUNDING 2 LIQUIDITY RESERVE LEDGER
(a) Amounts shall be credited to the Funding 2 Liquidity Reserve Ledger in
accordance with the Funding 2 Priority of Payments above.
(b) Amounts shall be debited to the Funding 2 Liquidity Reserve Ledger to the
extent permitted on each relevant Funding 2 Interest Payment Date in
order to be applied in accordance with the priority of payments set out
in Schedule 3 to the Funding 2 Deed of Charge.
30. MASTER INTERCOMPANY LOAN LEDGER
The Cash Manager shall ensure that all payments of interest and
repayments of principal on each of the Loan Tranches are recorded in the
Master Intercompany Loan Ledger.
31. FUNDING 2 CASH ACCUMULATION LEDGER
The Cash Manager shall ensure that all Funding 2 Principal Receipts
reserved by Funding 2 to pay the relevant Bullet Loan Tranches are
recorded on the Funding 2 Cash Accumulation Ledger.
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SCHEDULE 3
FORM OF FUNDING 1 QUARTERLY REPORT
INTERCOMPANY LOANS BALANCES
[Balances]
Last quarter closing balance
Repayments
New Term Advances
CR to Cash Accumulation Ledger in period
CR to Principal Ledger in period
Closing balance
CASH ACCUMULATION LEDGER
Opening balance
Principal received
Principal paid
Closing balance
PRINCIPAL LEDGER
Opening balance
Principal received
CR from Principal Deficiency Ledger
Principal paid
Closing balance
AVAILABLE CREDIT ENHANCEMENT
General Reserve Fund at closing
Last quarter closing General Reserve Fund
Drawings to make a bullet repayment
Other drawings
Closing of balance of General Reserve Fund
Target of balance General Reserve Fund
35
PRINCIPAL DEFICIENCY LEDGER AAA AA BBB
Opening Principal Deficiency Ledger Balance
Losses this Quarter
Principal Deficiency Ledger top up from Revenue Income
Closing Principal Deficiency Ledger Balance
SUBORDINATED LOAN OUTSTANDING
[Balances]
Last quarter closing outstanding
Accrued interest
Repayments Made
Closing balance
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SCHEDULE 4
FORM OF FUNDING 2 QUARTERLY REPORT
MASTER INTERCOMPANY LOANS BALANCE
[Balance]
Last quarter closing balance
Repayments
New Loan Tranche
CR to Cash Accumulation Ledger in period
CR to Principal Ledger in period
Closing balance
CASH ACCUMULATION LEDGER
Opening balance
Principal received
Principal paid
Closing balance
PRINCIPAL LEDGER
Opening balance
Principal received
CR from Principal Deficiency Ledger
Principal paid
Closing balance
AVAILABLE CREDIT ENHANCEMENT
Funding 2 General Reserve Fund at Programme Date
Last quarter closing Funding 2 General Reserve Fund
Drawings to make a bullet repayment
Other drawings
Closing balance of Funding 2 General Reserve Fund
Target balance of Funding 2 General Reserve Fund
37
PRINCIPAL DEFICIENCY LEDGER AAA AA BBB
Opening Principal Deficiency Ledger balance
Losses this quarter
Principal Deficiency Ledger top up from
Revenue Receipts
Closing Principal Deficiency Ledger balance
SUBORDINATED LOANS OUTSTANDING
[Balances]
Last quarter closing outstanding
Accrued interest
Repayments made
Closing balance
38
SIGNATORIES
CASH MANAGER
Signed by ) /s/ Xxx Xxxxxxx
for and on behalf of ) /s/ Xxxxxxx Takk
HALIFAX PLC )
SELLER
Signed by ) /s/ Xxx Xxxxxxx
for and on behalf of ) /s/ Xxxxxxx Takk
HALIFAX PLC )
MORTGAGES TRUSTEE
Signed by ) /s/ Xxxxxxx Xxxxxxx
for and on behalf of )
PERMANENT MORTGAGES TRUSTEE )
LIMITED )
FUNDING 1
Signed by ) /s/ Xxxxxxx Xxxxxxx
for and on behalf of )
PERMANENT FUNDING (NO. 1) LIMITED )
FUNDING 2
Signed by ) /s/ Xxxx Xxxxxxx
for and on behalf of )
PERMANENT FUNDING (NO. 2) LIMITED )
FUNDING 1 SECURITY TRUSTEE AND FUNDING 2 SECURITY TRUSTEE
Signed by )
for and on behalf of )
THE BANK OF NEW YORK )
39
