DRAFT: (2) {circle}.02.04
AMENDED AND RESTATED SERVICING AGREEMENT
DATED [12TH MARCH], 2004
HALIFAX PLC
AS SERVICER
AND
PERMANENT MORTGAGES TRUSTEE LIMITED
AS MORTGAGES TRUSTEE
AND
HALIFAX PLC
AS SELLER
AND
PERMANENT FUNDING (NO. 1) LIMITED
AS FUNDING 1
AND
THE BANK OF NEW YORK
AS SECURITY TRUSTEE
XXXXX & XXXXX
London
CONTENTS
CLAUSE PAGE
1. Definitions and Interpretation......................................... 2
2. Appointment of Servicer................................................ 2
3. The Administration Services............................................ 3
4. Mortgages Trustee Variable Base Rate/Mortgages Trustee Tracker Rate.... 5
5. Administration of Mortgages............................................ 7
6. No Liability........................................................... 10
7. New Loans.............................................................. 11
8. Product Switching and Further Advances................................. 11
9. Redemption of Mortgages................................................ 11
10. Powers of Attorney..................................................... 12
11. Costs and Expenses..................................................... 12
12. Information............................................................ 13
13. Remuneration........................................................... 14
14. Insurances............................................................. 14
15. Halifax Insurance Policies............................................. 15
16. Buildings Policies..................................................... 15
17. Title Deeds............................................................ 16
18. Data Protection........................................................ 17
19. Covenants of Servicer.................................................. 18
20. Services Non-Exclusive................................................. 19
21. Termination............................................................ 19
22. Further Assurance...................................................... 21
23. Miscellaneous.......................................................... 22
24. Confidentiality........................................................ 23
25. Notices................................................................ 24
26. Variation and Waiver................................................... 24
27. No Partnership......................................................... 25
28. Assignment............................................................. 25
29. Change of Security Trustee............................................. 25
30. Amendments............................................................. 25
31. Exclusion of Third Party Rights........................................ 25
32. Counterparts and Severability.......................................... 25
33. Governing Law and Jurisdiction......................................... 26
34. Process Agent.......................................................... 26
SCHEDULE
1. The services........................................................... 27
2. Form of Quarterly Pool Cut............................................. 28
Signatories.................................................................. 29
THIS AMENDED AND RESTATED SERVICING AGREEMENT is made as a deed on [12th
March], 2004
BETWEEN:
(1) HALIFAX PLC (registered number 02367076), 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
the Servicer of the Loans and their Related Security;
(2) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a private
limited 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;
(3) HALIFAX PLC (registered number 02367076), 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
the Seller and as one of the Beneficiaries;
(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 Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxx, Xxxxxx XX0X 0XX
in its capacity as Funding 1 and one of the Beneficiaries; and
(5) THE BANK OF NEW YORK, a New York banking corporation acting through its
office at 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX, the Security
Trustee, which expression shall include such company and all other
persons or companies for the time being acting as security trustee (or
co-trustee) pursuant to the terms of the Funding 1 Deed of Charge.
WHEREAS:
(A) The Servicer carries on the business of, inter alia, administering
mortgage loans secured on residential properties within the United
Kingdom.
(B) By the Mortgage Sale Agreement, the Seller agreed to sell certain
mortgage loans it had originated to individual borrowers together with
their Related Security to the Mortgages Trustee. The Mortgages Trustee
holds those mortgage loans as bare trustee for Funding 1 and the Seller
pursuant to the terms of the Mortgages Trust Deed.
(C) The Servicer has agreed to provide administration and management services
to the Mortgages Trustee, the Seller and Funding 1 on the terms and
subject to the conditions contained in the Servicing Agreement dated 14th
June, 2002, as amended and restated on 6th March, 2003, 25th November,
2003 and as further amended and restated by this Agreement and from time
to time (the SERVICING AGREEMENT) in relation to, inter alia, the Loans
and their Related Security sold to the Mortgages Trustee by the Seller.
(D) The parties to the Servicing Agreement have agreed to amend and restate
the terms of that Agreement as set out herein.
1
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
{circle}, 2004(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 Any reference in this Agreement to any discretion, power or right on the
part of the Mortgages Trustee shall be as exercised by the Mortgages
Trustee only as directed by the Beneficiaries but subject in each case to
the provisions of CLAUSE 16.2 of the Mortgages Trust Deed.
1.3 Save as expressly provided herein, any warranties or undertakings
provided under this Agreement are made to each other party to this
Agreement.
1.4 This Agreement amends and restates the Servicing Agreement made on 14th
June, 2002 as amended and restated on 6th March 2003 and as further
amended on 25th November, 2003 (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. The parties agree that this amended and restated
Agreement shall have effect and be operational as from 14th June, 2002.
2. APPOINTMENT OF SERVICER
2.1 Subject to CLAUSES 2.3 and 4.3(D), and until termination pursuant to
CLAUSE 21, the Mortgages Trustee, the Seller and Funding 1 (according to
their respective estates and interests) each hereby appoints the Servicer
as its lawful agent on their respective behalfs to administer the Loans
and their Related Security, to provide certain other administration and
management services and to exercise their respective rights, powers and
discretions, and to perform their respective duties, under and in
relation to the Loans and their Related Security. The Servicer in each
case hereby accepts such appointment on the terms and subject to the
conditions of this Agreement. The Security Trustee consents to the
appointment of the Servicer on the terms of and subject to the conditions
of this Agreement.
2.2 For the avoidance of doubt and in connection with the rights, powers and
discretions conferred under CLAUSE 2.1, during the continuance of its
appointment hereunder, the Servicer shall, subject to the terms and
conditions of this Agreement, the Mortgage Conditions, the Mortgage Sale
Agreement and the Mortgages Trust Deed, have the full power, authority
and right to do or cause to be done any and all things which it
reasonably considers necessary, convenient or incidental to the
administration of the Loans and their Related Security or the exercise of
such rights, powers and discretions, provided however that neither the
Mortgages Trustee nor Funding 1 nor their respective directors shall be
required or obliged at any time to enter into any transaction or to
comply with any directions which the Servicer may give with respect to
the operating and financial policies of the Mortgages Trustee or Funding
1 and the
2
Servicer hereby acknowledges that all powers to determine such policies
(including the determination of whether or not any particular policy is
for the benefit of the Mortgages Trustee or Funding 1) are, and shall at
all times remain, vested, as the case may be, in the Mortgages Trustee
and/or Funding 1 (and their respective directors) and none of the
provisions of this Agreement shall be construed in a manner inconsistent
with this proviso.
2.3 The appointment pursuant to CLAUSE 2.1 is conditional upon the issue of
the First Issuer Notes having taken place 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 has not occurred by the 14th June, 2002, or such later date as the
First Issuer and the Joint Lead Managers may agree, this Agreement shall
cease to be of further effect.
3. THE ADMINISTRATION SERVICES
3.1 GENERAL
(a) The duty of the Servicer shall be to provide the services set out
in this Agreement including SCHEDULE 1 hereto (the SERVICES).
(b) If and when the Servicer is requested to confirm or state the
capacity in which it is administering and servicing the Loans,
their Related Security and related matters pursuant to this
Agreement by any Borrower or any third party not being a party to
this Agreement and to whom the Servicer is obliged by law to
disclose such information, the Servicer shall confirm or state
that it is acting in its capacity as servicer of the Loans, their
Related Security and related matters as agent for and on behalf of
the Mortgages Trustee and the Beneficiaries and not on its own
behalf.
3.2 SUB-CONTRACTS
(a) The Servicer may sub-contract or delegate the performance of all
or any of its powers and obligations under this Agreement,
provided that (but subject to CLAUSE 3.2(B)):
(i) the prior written consent of Funding 1 and the Security
Trustee to the proposed arrangement (including, if Funding 1
and the Security Trustee consider it necessary, approving
any contract which sets out the terms on which such
arrangements are to be made) has been obtained and written
notification has been given to each of the Rating Agencies;
(ii) where the arrangements involve the custody or control of any
Customer Files and/or Title Deeds relating to the Portfolio
for the purpose of performing any delegated Services the
sub-contractor or delegate has executed an acknowledgement
in form and substance acceptable to Funding 1 and the
Security Trustee to the effect that any such Customer Files
and/or Title Deeds are and will be held to the order of the
Mortgages Trustee (as trustee for the Beneficiaries);
(iii) where the arrangements involve or may involve the receipt by
the sub-contractor or delegate of monies belonging to the
Beneficiaries which, in accordance with this Agreement, are
to be paid into the Mortgages Trustee GIC Account and/or the
Funding 1 GIC Account, the sub-contractor or delegate has
executed a declaration in form and substance acceptable to
the Beneficiaries that any such monies held by it or to its
order are held on trust for the Beneficiaries and will be
paid forthwith into, as applicable, the Mortgages Trustee
GIC Account and/or the Funding 1 GIC Account in accordance
with the terms of the Mortgages Trust Deed;
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(iv) any such sub-contractor or delegate has executed a written
waiver of any Security Interest arising in connection with
such delegated Services (to the extent that such Security
Interest relates to the Portfolio or any amount referred to
in (iii) above); and
(v) neither the Security Trustee, the Mortgages Trustee nor
Funding 1 shall have any liability for any costs, charges or
expenses payable to or incurred by such sub-contractor or
delegate or arising from the entering into, the continuance
or the termination of any such arrangement.
(b) The provisos to CLAUSE 3.2(A)(I), (II) and (III) shall not apply:
(i) to the engagement by the Servicer of:
(A) any receiver, solicitor, insurance broker, valuer,
surveyor, accountant, estate agent, insolvency
practitioner, auctioneer, bailiff, sheriff officer,
debt counsellor, tracing agent, property management
agent, licensed conveyancer, qualified conveyancer or
other professional adviser acting as such; or
(B) any locksmith, builder or other contractor acting as
such in relation to a Property,
in any such case being a person or persons whom the Servicer would
be willing to appoint in respect of its own mortgages in
connection with the performance by the Servicer of any of its
obligations or functions or in connection with the exercise of its
powers under this Agreement; or
(ii) to any delegation to any wholly-owned subsidiary of the
Seller or HBOS plc from time to time.
(c) The Mortgages Trustee and/or Funding 1 and the Security Trustee
may by notice in writing require the Servicer to assign to the
Mortgages Trustee any rights which the Servicer may have against
any sub-contractor or delegate arising from the performance of
services by such person relating to any matter contemplated by
this Agreement and the Servicer acknowledges that such rights
assigned to the Mortgages Trustee will be exercised by the
Mortgages Trustee as trustee for the Beneficiaries subject to the
terms of the Mortgages Trust Deed.
(d) Notwithstanding any sub-contracting or delegation of the
performance of its obligations under this Agreement, the Servicer
shall not thereby be released or discharged from any liability
hereunder and shall remain responsible for the performance of all
of the obligations of the Servicer under this Agreement, and the
performance or non-performance or the manner of performance of any
sub-contractor or delegate of any of the Services shall not affect
the Servicer's obligations under this Agreement and any breach in
the performance of the Services by such sub-contractor or delegate
shall, subject to the Servicer being entitled for a period of 20
London Business Days from receipt of any notice of the breach to
remedy such breach by any sub-contractor or delegate, be treated
as a breach of this Agreement by the Servicer.
3.3 NOTICES ETC.
(a) Within 20 London Business Days of the Initial Closing Date, the
Servicer will give notice (or procure that notice is given) by
courier or by special delivery to HBOS Insurance (PCC) Guernsey
Limited of the assignment to the Mortgages Trustee by the Seller
of its interests in the Halifax Mortgage Re Limited MIG Policies
pursuant to the Assignment of Halifax Mortgage Re Limited MIG
Policies, which shall be held by the Mortgages Trustee absolutely
4
as bare trustee for the Beneficiaries pursuant to the Mortgages
Trust Deed, and the Servicer shall take all reasonable steps to
ensure the return by the relevant recipient of the duplicate
notices of assignment by way of acknowledgement thereof.
(b) Promptly upon request by Funding 1 and the Security Trustee, the
Servicer shall procure that any notices permitted to be given by
the Mortgages Trustee under CLAUSE 6.4 of the Mortgage Sale
Agreement are so given by the Servicer on the Mortgages Trustee's
behalf.
3.4 LIABILITY OF SERVICER
(a) The Servicer shall indemnify each of the Mortgages Trustee and the
Beneficiaries 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 or wilful default of the
Servicer in carrying out its functions as Servicer under this
Agreement or the other Transaction Documents or as a result of a
breach by the Servicer of the terms and provisions of this
Agreement or the other Transaction Documents in relation to such
functions.
(b) For the avoidance of doubt, the Servicer shall not be liable in
respect of any loss, liability, claim, expense or damage suffered
or incurred by the Mortgages Trustee and/or the Beneficiaries
and/or any other person as a result of the proper performance of
the Services by the Servicer save where such loss, liability,
claim, expense or damage is suffered or incurred as a result of
any negligence or wilful default of the Servicer or as a result of
a breach by the Servicer of the terms and provisions of this
Agreement or the other Transaction Documents in relation to such
functions.
(c) Any indemnification under this CLAUSE 3.4 in respect of loss
suffered by the Beneficiaries shall be paid for by reducing the
Seller Share of the Trust Property by an amount equal to the
relevant loss incurred by the Beneficiaries in accordance with
CLAUSE 8.4 of the Mortgages Trust Deed and SCHEDULE 2 to the Cash
Management Agreement.
4. MORTGAGES TRUSTEE VARIABLE BASE RATE/MORTGAGES TRUSTEE TRACKER RATE
4.1 The Mortgages Trustee and each of the Beneficiaries each hereby grants
the Servicer full right, liberty and authority from time to time, in
accordance with the relevant Mortgage Terms, to determine and set the
Mortgages Trustee Variable Base Rate and any variable margin incorporated
within the Mortgages Trustee Tracker Rate above the Bank of England repo
rate applicable in relation to Tracker Rate Loans chargeable to Borrowers
from time to time. In exercising such right, liberty and authority the
Servicer undertakes to each of the other parties to this Agreement that
it shall not at any time, without the prior consent of the Mortgages
Trustee and Funding 1, set or maintain the Mortgages Trustee Variable
Base Rate at a rate which is higher than (although it may be lower than
or equal to) the then prevailing Seller's Variable Base Rate, nor will it
set or maintain a margin incorporated within the Mortgages Trustee
Tracker Rate above the Bank of England repo rate in respect of any
Tracker Rate Loan, which is higher than the margin above the Bank of
England repo rate then applying to those Tracker Rate Loans beneficially
owned by the Seller outside the Portfolio except in the limited
circumstances described in this paragraph when the Mortgages Trustee will
be entitled to do so. The Servicer will not at any time, without the
prior consent of the Mortgages Trustee and Funding 1, set or maintain:
(a) the Mortgages Trustee Variable Base Rate at a rate which is higher
than (although it may be lower than or equal to) the then
prevailing Seller's Variable Base Rate which applies to loans
beneficially owned by the Seller outside the Portfolio;
5
(b) the margin incorporated within the Mortgages Trustee Tracker Rate
in respect of any Tracker Rate Loan in the Portfolio which, where
the offer conditions for that Tracker Rate Loan provide that the
margin above the Bank of England repo rate shall be the same as
the margin above the Bank of England repo rate applicable to all
other loans having the same offer conditions in relation to
interest rate setting as that Tracker Rate Loan, is higher or
lower than the margin above the Bank of England repo rate then
applying to those Tracker Rate Loans beneficially owned by the
Seller outside the Portfolio; and
(c) the margin incorporated within the Mortgages Trustee Tracker Rate
above the Bank of England repo rate in respect of any other
Tracker Rate Loan which is higher than the margin above the Bank
of England repo rate which would then be set in accordance with
the Seller's Policy from time to time in relation to that Tracker
Rate Loan,
unless the Servicer is required to do so pursuant to CLAUSE 4.3, and,
subject to that requirement, that it shall not change the Mortgages
Trustee Variable Base Rate nor the Mortgages Trustee Tracker Rate save
for the same reasons as the Seller was entitled, under the Mortgage
Conditions, to change the Seller's Variable Base Rate and the Seller's
Tracker Rate prior to the sale to the Mortgages Trustee of the Loans
comprised in the Portfolio and their Related Security. Each of the
Mortgages Trustee and the Beneficiaries shall be bound by the Mortgages
Trustee Variable Base Rate and the Mortgages Trustee Tracker Rate set in
accordance with this Agreement.
4.2 The Servicer shall take the steps rendered necessary by the relevant
Mortgage Terms and applicable law (including, without limitation, the
Guidance Note on Interest Variation Terms issued by the Office of Fair
Trading in February 2000 and any successor guideline or applicable
additional guidelines) to bring each change in such rate or rates of
interest to the attention of the relevant Borrowers, whether due to a
change in the Mortgages Trustee Variable Base Rate or the Mortgages
Trustee Tracker Rate or as a consequence of any provisions of the
Mortgage Terms. Any change in the Mortgages Trustee Variable Base Rate
or the Mortgages Trustee Tracker Rate shall be notified in writing to
each of the Mortgages Trustee, the Security Trustee and the Beneficiaries
as soon as reasonably practicable and shall, upon receipt of a request
from any of such parties, notify such requesting party of any changes in
the Monthly Payments in relation to the Loans. All costs arising in
relation to such a notification of a change in such rate or rates of
interest shall be borne by the Servicer.
4.3 (a) On each Funding 1 Interest Payment Date the Servicer shall
determine, having regard to the aggregate of:
(i) the revenue which Funding 1 would expect to receive during
the next succeeding Interest Period;
(ii) the Mortgages Trustee Variable Base Rate, any variable
margins applicable in relation to any Tracker Rate Loans and
the Variable Mortgage Rates in respect of the Loans which
the Servicer proposes to set under this CLAUSE 4; and
(iii) the other resources available to Funding 1 including the
Funding 1 Swap Agreement, the Funding 1 Liquidity Facility,
the General Reserve Fund and the Liquidity Reserve Fund,
whether Funding 1 would receive an amount of revenue during that
Loan Interest Period which when aggregated with the funds
otherwise available to it is less than the
6
amount which is the aggregate of (A) the amount of interest which
will be payable in respect of the Term AAA Advances on the Funding
1 Interest Payment Date falling at the end of such Loan Interest
Period and (B) the other senior expenses of Funding 1 which rank
in priority thereto (the amount (if any) by which it is less being
the INTEREST RATE SHORTFALL).
(b) If the Servicer determines that there will be an Interest Rate
Shortfall, it will within one London Business Day of such
determination give written notice thereof to the Mortgages
Trustee, Funding 1 and the Security Trustee of such Interest Rate
Shortfall and of the Mortgages Trustee Variable Base Rate and/or
the Mortgages Trustee Tracker Rate which would (taking into
account the applicable Mortgage Conditions), in the Servicer's
reasonable opinion, need to be set in order for no Interest Rate
Shortfall to arise, having regard to the date(s) (which shall be
specified in the notice) on which such change to the Mortgages
Trustee Variable Base Rate and the Mortgages Trustee Tracker Rate
would take effect and at all times acting in accordance with the
standards of a Reasonable, Prudent Mortgage Lender as regards the
competing interests of Borrowers with Mortgage Trustee Variable
Base Rate Loans and Borrowers with Mortgages Trustee Tracker Rate
Loans.
(c) If the Mortgages Trustee, Funding 1 and the Security Trustee
notify the Servicer that, having regard to the obligations of
Funding 1, the Mortgages Trustee Variable Base Rate and/or the
Mortgages Trustee Tracker Rate should be increased, the Servicer,
as agent for and on behalf of, inter alia, the Mortgages Trustee
and the Beneficiaries, shall take all steps which are necessary,
including publishing any notice which is required in accordance
with the Mortgage Terms, to effect such change in the Mortgages
Trustee Variable Base Rate and/or the Mortgages Trustee Tracker
Rate on the date(s) specified in the notice referred to in CLAUSE
4.3(B).
(d) The Mortgages Trustee and/or Funding 1 and the Security Trustee
may terminate the authority of the Servicer under CLAUSE 4.1 and
CLAUSE 4.3 to determine the Mortgages Trustee Variable Base Rate
and the Mortgages Trustee Tracker Rate on or after the occurrence
of a Servicer Termination Event, in which case the Mortgages
Trustee shall set the Mortgages Trustee Variable Base Rate and the
Mortgages Trustee Tracker Rate in accordance with this CLAUSE 4.
5. ADMINISTRATION OF MORTGAGES
5.1 DIRECT DEBITING SCHEME
(a) For the purposes of collecting amounts due from Borrowers under
the Loans and their Related Security comprised in the Portfolio in
accordance with this Agreement the Servicer will unless otherwise
agreed in writing with the Beneficiaries:
(i) act, or procure that another person approved in writing by
the Beneficiaries (such approval not to be unreasonably
withheld) (the THIRD PARTY COLLECTION AGENT) acts, as
collection agent for the Mortgages Trustee and the
Beneficiaries under the Direct Debiting Scheme and remains a
member of the Direct Debiting Scheme or any scheme which
replaces the Direct Debiting Scheme;
(ii) subject to CLAUSES 5.1(B) and 5.1(C), deliver to the Bankers
Automated Clearing System (BACS) or to the Account Bank such
instructions as may be necessary from time to time for the
debit of the account of each Borrower in respect of which
there is a direct debit mandate (the date of such delivery
being the D.D. DATE) with the Monthly Payment due from such
Borrower, and for the amount of such Monthly
7
Payment to be credited to the Mortgages Trustee GIC Account
on the day after the D.D. Date or, if such is not a London
Business Day, the following London Business Day unless the
short-term ratings of the Account Bank fall below A-1 by
S&P, P-1 by Xxxxx'x or F-1 by Fitch, in which case all
further instructions by the Servicer to debit the accounts
of Borrowers that are subject to direct debit bank mandates
shall be made to another bank which has a rating of at least
A-1 by S&P, P-1 by Xxxxx'x or F-1 by Fitch, or directly to
the Mortgages Trustee GIC Account;
(iii) subject to CLAUSES 5.1(B) and 5.1(C), deliver to the Account
Bank or BACS (as appropriate) instructions for the debit of
the account of each Borrower in respect of which there is a
direct debit mandate and the Monthly Payment due and owing
from such Borrower on the D.D. Date immediately preceding
the next succeeding Monthly Payment Date remains outstanding
to the extent that, on the date of presentation of such
instructions, such Monthly Payment has not been received in
full by the Servicer on behalf of the Mortgages Trustee and
where the instructions for the debit of the account of the
relevant Borrower for the Monthly Payment due and owing from
such Borrower was returned to the Administrator marked
"insufficient funds" within 10 London Business Days of
receipt by the Servicer of any such returned instructions;
(iv) subject to CLAUSES 5.1(B) and 5.1(C), deliver to the Account
Bank or BACS (as appropriate) such other instructions for
the debit of the account of each Borrower in respect of
which there is a direct debit mandate in accordance with the
Direct Debiting Scheme as may be appropriate for the
recovery of sums due by such Borrower;
(v) comply in all material respects with the requirements from
time to time of the Direct Debiting Scheme including "The
Originator's Guide and Rules to the Direct Debiting Scheme"
as amended from time to time,
and take all such other steps as are reasonably appropriate,
including in particular the preparation and administration of
appropriate computer tapes in connection with BACS, to ensure that
all monies received from Borrowers during banking hours on any
particular day are credited on the next day to the Mortgages
Trustee GIC Account.
(b) The Servicer may agree with a Borrower that the Direct Debiting
Scheme shall not apply to Monthly Payments to be made by such
Borrower, provided, subject to CLAUSE 5.1(D), that (i) alternative
payment arrangements are made which are intended to ensure timely
payment of Monthly Payments due from the Borrower to the Mortgages
Trustee on behalf of the Beneficiaries, and (ii) the change in
arrangements was made at the instigation of the Borrower or by the
Servicer in accordance with the procedures which would be adopted
by a Reasonable, Prudent Mortgage Lender.
(c) The Servicer may, notwithstanding the proviso to CLAUSE 5.1(B),
agree such procedures for the payment by a Borrower of (i) overdue
amounts and (ii) amounts payable on redemption of a Mortgage in
whole or in part other than through the Direct Debiting Scheme as
would be agreed by a Reasonable, Prudent Mortgage Lender.
(d) The Servicer shall, notwithstanding the proviso to CLAUSE 5.1(B) ,
use its reasonable endeavours to credit Monthly Payments made by a
Borrower under a payment arrangement other than the Direct
Debiting Scheme to the Mortgages Trustee GIC Account as follows:
(i) where the Borrower pays by standing order, by close of
business on the second London Business Day following the day
on which such amount is received or credited by the
Servicer;
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(ii) where the Borrower pays by payment of cash, by transfer
payment from another account of the Seller or by cheque
where reference to the relevant Borrower is provided or
payments are made by way of paying-in book, by close of
business on the London Business Day which immediately
follows the day on which such amount is received or credited
by the Servicer; and
(iii) where the Borrower pays by cheque where a reference to the
relevant Borrower is not provided, by close of business on
the next London Business Day after notification from the
banks operating the Seller Bank Accounts of the identity of
the Borrower.
(e) Where a Borrower permits a direct debit to be made to his bank
account, the Servicer will endeavour to procure that such Borrower
maintains a valid and effective mandate relating to such direct
debit in relation to each Monthly Payment due from that Borrower,
provided that in any case where a Borrower will not permit a
direct debit to be made to his bank account the Servicer will
endeavour to make alternative arrangements acceptable to a
Reasonable, Prudent Mortgage Lender so that such Borrower
nevertheless pays each Monthly Payment within the month in which
it falls due.
(f) In the event that the BACS system ceases to operate for any reason
the Servicer will use reasonable endeavours to make alternative
arrangements for the use of the back up systems available to each
Account Bank.
(g) If at any time the Servicer shall receive notice whether under the
Direct Debiting Scheme or otherwise that any amount (or part
thereof), which was paid in or credited pursuant to CLAUSE 5.1 and
which has been transferred to the Mortgages Trustee GIC Account
has not been received as cleared funds or has otherwise been
recalled, the Servicer shall notify the Cash Manager and instruct
the Cash Manager forthwith to debit the Mortgages Trustee GIC
Account and credit the relevant collection account for the whole
or any part of such amount (such amount hereinafter referred to as
the SHORTFALL) and, an amount equal to any costs which are
irrecoverable by the Servicer from the relevant Borrower incurred
by the Servicer as a result of such shortfall; PROVIDED THAT no
debit from the Mortgages Trustee GIC Account for the credit of the
collection accounts in respect of any shortfall may be made on or
after a Calculation Date in respect of the relevant period between
that Calculation Date and the next Distribution Date unless
sufficient funds are available after providing or making provision
for all payments to be made on the next succeeding Distribution
Date. After that following Distribution Date the Mortgages Trustee
shall transfer, or procure on its behalf the transfer, from the
Mortgages Trustee GIC Account to the relevant collection account
of an amount equal to such shortfall subject to it having
sufficient funds available to it or the Servicer shall deduct an
amount equal to such shortfall from payments otherwise due on a
daily basis from the Seller to the Mortgages Trustee in respect of
Principal Receipts and Interest Receipts received under the Loans.
5.2 ADMINISTRATION AND ENFORCEMENT OF MORTGAGES
(a) The Mortgages Trustee and the Beneficiaries hereby direct the
Servicer to administer the Loans comprised in the Portfolio and
carry out its specific obligations under this Agreement in
accordance with the Seller's Policy.
(b) The Servicer will, in relation to any default by a Borrower under
or in connection with a Loan or a Mortgage comprised in the
Portfolio, comply with the Enforcement Procedures or, to the
extent that the Enforcement Procedures are not applicable having
regard to the nature of the default in question, take such action
as is not materially prejudicial to the interests of the Mortgages
Trustee (as trustee for the Beneficiaries) and the Beneficiaries
under the relevant MIG Policy, provided that:
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(i) the Servicer shall only become obliged to comply with the
Enforcement Procedures (to the extent applicable) or to take
action as aforesaid after it has become aware of the
default;
(ii) it is acknowledged by the Beneficiaries that mortgage
lenders generally exercise discretion in pursuing their
respective enforcement procedures and that the Servicer may
exercise such discretion as would a Reasonable, Prudent
Mortgage Lender in applying the Enforcement Procedures to
any particular defaulting Borrower or taking action as
aforesaid, provided that in exercising such discretion the
interest of Funding 1 in the Portfolio is not materially
prejudiced; and
(iii) in any case where any of the Insurance Policies requires
exact compliance with certain enforcement procedures the
Servicer shall procure the prior written consent of the
relevant insurance company for any deviation by it from such
enforcement procedures.
5.3 RECORDS
The Servicer shall keep and maintain records in relation to the
Portfolio, on a Loan by Loan basis, for the purposes of identifying
amounts paid by each Borrower, any amount due from a Borrower and the
principal balance (and, if different, the total balance) from time to
time outstanding on a Borrower's account and such other records as would
be kept by a Reasonable, Prudent Mortgage Lender. The Servicer will
provide such information to the Mortgages Trustee and/or Funding 1 and/or
the Security Trustee or to their order at any time upon reasonable notice
subject to the Servicer being reasonably capable of providing such
information without significant additional cost and subject to the
provisions of the Data Protection Xxx 0000 and other applicable
legislation from time to time and provided that no duty of confidence and
no industry code of practice will or may be breached thereby.
5.4 TRUST
(a) If the Servicer in carrying out its functions as Servicer under
this Agreement receives (including in its capacity as agent for
the Mortgages Trustee and the Beneficiaries) any money whatsoever
arising from the Loans and their Related Security, which money
belongs to the Mortgages Trustee (as trustee for the
Beneficiaries) and is to be paid to the Mortgages Trustee GIC
Account pursuant to this Agreement or any of the other Transaction
Documents or otherwise, it will hold such monies on trust for the
Mortgages Trustee and shall keep such money separate from all
other monies held by the Servicer and shall, as soon as reasonably
practicable and in any event within the time limits referred to in
CLAUSE 5.1, pay the monies into the Mortgages Trustee GIC Account.
(b) All other sums received by the Servicer in respect of the Loans
and their Related Security shall be held by the Servicer for
itself.
6. NO LIABILITY
6.1 The Servicer shall have no liability for any obligation of a Borrower
under any Loan comprised in the Portfolio or any Related Security and
nothing herein shall constitute a guarantee, or similar obligation, by
the Servicer of any Loan, Mortgage or any Borrower.
6.2 Save as otherwise provided in this Agreement, the Servicer shall have no
liability for the obligations of the Mortgages Trustee or the
Beneficiaries under any of the Transaction Documents or otherwise and
nothing herein shall constitute a guarantee, or similar obligation, by
the Servicer of the Mortgages Trustee or the Beneficiaries in respect of
any of them.
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7. NEW LOANS
7.1 The Portfolio may be augmented from time to time by the sale to the
Mortgages Trustee on any Sale Date of a New Portfolio by the Seller.
7.2 The sale of each New Portfolio to the Mortgages Trustee will in all cases
be subject to the terms set out in the Mortgage Sale Agreement including,
without limitation, the conditions set out in CLAUSE 4 of the Mortgage
Sale Agreement and the representations and warranties set out in CLAUSE 8
of the Mortgage Sale Agreement.
8. PRODUCT SWITCHING AND FURTHER ADVANCES
8.1 (a) The Servicer shall not accept an application for a Further Advance
without first having received confirmation in writing from the
Seller that the Seller would, if so offered by the Mortgages
Trustee, purchase the relevant Loan and its Related Security from
the Mortgages Trustee.
(b) The Servicer shall not accept an application for a Product Switch
without first having received confirmation in writing from the
Seller save where the Seller and the Servicer are both Halifax plc
that the Seller would, if so offered by the Mortgages Trustee,
purchase the relevant Loan and its Related Security from the
Mortgages Trustee if on the immediately preceding Distribution
Date, the Seller is in breach of the conditions referred to in
CLAUSES 4.2(A) to (O) inclusive of the Mortgage Sale Agreement as
if references therein to "New Loans" and "NEW PORTFOLIO" were
references to the Loan which would result from the implementation
of such Product Switch and as if references to "SALE DATE" were
references to the date when the Seller and relevant Borrower
complete such Product Switch.
8.2 Subject to complying with the terms of CLAUSE 8.1 , where the Servicer
accepts a Product Switch or a Further Advance, the Servicer shall then
notify the Seller and the Mortgages Trustee in writing.
8.3 Notwithstanding CLAUSE 8.2, subject to complying with the terms of CLAUSE
8.1, the Servicer, on behalf of and as agent for the Mortgages Trustee
(or, in the case of Product Switches and Further Advances relative to
Scottish Loans, on behalf of and as agent for the Seller, in its capacity
as trustee for the Mortgages Trustee under the relevant Scottish
Declaration of Trust) may accept requests from Borrowers for Product
Switches and Further Advances provided that the Servicer acts in
accordance with its then procedure which would be acceptable to a
Reasonable, Prudent Mortgage Lender.
9. REDEMPTION OF MORTGAGES
9.1 Upon repayment in full of all sums secured by a Mortgage and/or other
Related Security comprised in the Portfolio, the Servicer shall, and is
hereby authorised by the Mortgages Trustee and the Beneficiaries to
execute a receipt or discharge or relevant H.M. Land Registry Form DS1 of
the Mortgage and any such other or further instrument or deed of
satisfaction regarding such Mortgage and/or the Related Security as it
considers to be necessary or advisable, to implement an Electronic
Notification of Discharge to H.M. Land Registry and to release the
relevant Title Deeds to the person or persons entitled thereto.
9.2 The Servicer undertakes that prior to any actual release by it of the
relevant Title Deeds it will take reasonable and appropriate steps to
satisfy itself that the relevant Title Deeds are being released to the
person or persons entitled thereto.
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9.3 The Servicer shall procure that if, upon completion of the Enforcement
Procedures, an amount in excess of all sums due by the relevant Borrower
is recovered or received, the balance, after discharge of all sums due by
the Borrower, is paid to the person or persons next entitled thereto.
10. POWERS OF ATTORNEY
10.1 For good and valuable consideration and as Seller, the security for the
interests of the Mortgages Trustee and the Beneficiaries hereunder, each
of the Mortgages Trustee and the Beneficiaries hereby appoints the
Servicer as its attorney on its behalf, and in its own or the attorney's
name, for the following purposes:
(a) executing all documents necessary for the purpose of discharging a
Mortgage comprised in the Portfolio which has been repaid in full
and any Related Security or for the sale of a Property as
Mortgagee;
(b) executing all documents and implementing all Electronic
Notifications of Discharge to H.M. Land Registry necessary for the
purpose of releasing a Borrower in accordance with CLAUSE 9;
(c) executing all documents and doing all such acts and things which
in the reasonable opinion of the Servicer are necessary or
desirable for the efficient provision of the Services hereunder;
and
(d) exercising its rights, powers and discretion under the Mortgages
including the right to fix the Mortgages Trustee Variable Base
Rate and the Mortgages Trustee Tracker Rate or any related rights,
provided that, for the avoidance of doubt, these Powers of Attorney shall
not authorise the Servicer to sell any of the Loans and/or their Related
Security comprised in the Portfolio except as specifically authorised in
the Transaction Documents. For the avoidance of doubt, neither the
Seller (where the Servicer is not Halifax plc) Mortgages Trustee nor
Funding 1 shall be liable or responsible for the acts of the Servicer or
any failure by the Servicer to act under or in respect of these Powers of
Attorney.
10.2 The appointments contained in CLAUSE 10.1 shall be irrevocable unless and
until following a Termination Event the Mortgages Trustee and/or Funding
1 and the Security Trustee serves notice pursuant to CLAUSE 21 to
terminate the Servicer's appointment under this Agreement upon which the
appointments contained in CLAUSE 10.1 shall be automatically revoked.
11. COSTS AND EXPENSES
11.1 The Mortgages Trustee (on behalf of the Beneficiaries) will on each
Distribution Date reimburse, in accordance with CLAUSE 10.2 of the
Mortgages Trust Deed, the Servicer for all out-of-pocket costs, expenses
and charges (together with any amounts in respect of Irrecoverable Value
Added Tax due thereon) properly incurred by the Servicer in the
performance of the Services including any such costs, expenses or charges
not reimbursed to the Servicer on any previous Distribution Date and the
Servicer shall supply the Mortgages Trustee with a copy of an appropriate
VAT invoice issued by the person making the supply.
11.2 The Servicer will use reasonable endeavours to recover from the relevant
Borrowers all costs and expenses incurred by the Servicer which are
properly recoverable from those Borrowers under the relevant Mortgage
Conditions.
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12. INFORMATION
12.1 MAINTENANCE OF RECORDS
(a) Subject to CLAUSE 18, the Servicer shall keep the Customer Files
relating to the Portfolio in safe custody and shall take
appropriate technical and organisational measures against the
unauthorised or unlawful processing of personal data and against
accidental loss or destruction of, or damage to, personal data.
The Servicer shall maintain in an adequate form such records as
are necessary to enforce each Mortgage comprised in the Portfolio
and, where relevant, any other Related Security.
(b) A duplicate of any computer records held by the Servicer which
contains information relating to the Loans and the Related
Security shall be lodged by the Servicer on a daily basis at the
offices of the Seller at the Pudsey Data Centre or at such other
locations selected by the Servicer, so long as such location is a
location separate from that in which the original computer records
are stored and in an environment conducive to the safe storage of
electronic media, such records to be held to the order of the
Mortgages Trustee and to be replaced by a revised duplicate as and
when the original records are revised. The Servicer shall keep
the Mortgages Trustee informed of the location of the Customer
Files and duplicate computer records.
12.2 USE OF I.T. SYSTEMS
(a) The Servicer covenants that at the date hereof in respect of the
software which is used by the Servicer in providing the Services,
it shall for the duration of this Agreement:
(i) ensure that it has in place all necessary licences and/or
consents from the respective licensor or licensors (if any)
of such software; 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 the Beneficiaries elect as a
substitute servicer 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.
(b) The Servicer shall use reasonable endeavours to maintain in
working order the information technology systems used by the
Servicer in providing the Services.
(c) The Servicer 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 the Beneficiaries elect as a substitute
servicer 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.
12.3 ACCESS TO BOOKS AND RECORDS
Subject to all applicable laws, the Servicer shall permit the Mortgages
Trustee and Funding 1 (and their auditors) and the Security Trustee and
any other person nominated by the Beneficiaries (to whom the Servicer has
no reasonable objection) upon reasonable notice during normal office
hours to have access, or procure that such person or persons are granted
access, to all books of record and account (including, for the avoidance
of doubt, the Title Deeds and Customer Files) relating to the
administration of the Loans and their Related Security comprised in the
Portfolio and related matters in accordance with this Agreement.
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12.4 INFORMATION COVENANTS
(a) The Servicer shall provide the Mortgages Trustee, the
Beneficiaries, each Manager (as set out in each Issuer Master
Definitions and Construction Schedule) (if requested by such
Manager to do so) and the Rating Agencies quarterly with a report
in, or substantially in, the form set out in SCHEDULE 2 and shall
assist the Cash Manager in the production of quarterly reports
substantially in the forms set out in Schedule 3 of the Cash
Management Agreement.
The Servicer shall notify the Rating Agencies in writing of the
details of (i) any material amendment to the Transaction
Documents, (ii) any proposed material change in the valuation
procedures or policies applied or to be applied in relation to
Properties by it in connection with its mortgage business (details
of which change may be included in a report provided under
paragraph (a)) and (iii) any other information relating to its
mortgage business and financial condition as the Rating Agencies
may reasonably request in connection with the ratings of the Notes
and other matters contemplated by the Transaction Documents,
provided that such request does not adversely interfere with the
Servicer's day to day provision of the Services under the other
terms of this Agreement.
(b) The Servicer shall, at the request of Funding 1 and the Security
Trustee (where the Servicer is the Seller) and at the request of
the Beneficiaries (where the Servicer is no longer the Seller),
furnish Funding 1, the Security Trustee and/or the Beneficiaries
(as appropriate) and the Rating Agencies with such other
information relating to its business and financial condition as it
may be reasonable for Funding 1, the Security Trustee and/or the
Beneficiaries (as appropriate) to request in connection with the
ratings of the Notes and other matters contemplated by the
Transaction Documents, provided that Funding 1, the Security
Trustee or the Beneficiaries (as appropriate) shall not make such
a request more than once every three months unless, in the belief
of Funding 1, the Security Trustee or the Beneficiaries (as
appropriate), an Intercompany Loan Event of Default or a
Termination Event shall have occurred and is continuing or may
reasonably be expected to occur.
(c) The Servicer shall make available to beneficial owners of the
Notes, who have provided beneficial ownership certification as
described herein, on a monthly basis a report containing
information about the loans in the Mortgages Trust.
13. REMUNERATION
The Mortgages Trustee (on behalf of the Beneficiaries) shall pay to the
Servicer for its Services hereunder an administration fee (the
ADMINISTRATION FEE) (inclusive of Value Added Tax) which:
(a) shall be calculated in relation to each 1Distribution Period on the
basis of the number of days elapsed and a 365 day year at the rate
of 0.05 per cent. per annum, inclusive of Value Added Tax, on the
aggregate amount of the Trust Property as at close of business on
the preceding Funding 1 Interest Payment Date (or, as applicable,
the Initial Closing Date); and
(b) shall be paid to the Servicer in arrear on each Distribution Date
in the manner contemplated by and in accordance with the
provisions of CLAUSE 10.2 of the Mortgages Trust Deed.
14. INSURANCES
14.1 The Servicer will administer the arrangements for insurance to which the
Mortgages Trustee is a party or in which either the Seller or the
Mortgages Trustee (on behalf of the
14
Beneficiaries) has an interest and which relate to the Loans and the
Mortgages comprised in the Portfolio or the business of the Mortgages
Trustee. In particular, but without limitation, the Servicer shall
promptly notify the Mortgages Trustee and the Beneficiaries and the
Trustee of the existence of any insurance policies to which the Seller is
a party or in which it has an interest in addition to those specifically
referred to in the definition of "Halifax Insurance Policies" in the
Master Definitions and Construction Schedule.
14.2 The Servicer shall use its reasonable endeavours to credit to the
Mortgages Trustee GIC Account all proceeds received from any claim made
under any Insurance Policy in relation to any Loan or its Related
Security by close of business on the London Business Day which
immediately follows the day on which such amounts are received or
credited by the Servicer and which is to be applied either in whole or in
part in repayment of a Loan.
15. HALIFAX INSURANCE POLICIES
15.1 The Servicer shall not knowingly take or omit to take any action which
would:
(a) result in the avoidance or termination of any of the Halifax
Insurance Policies in relation to any Loans and Mortgages to which
any Halifax Insurance Policy applies; or
(b) reduce the amount payable on any claim made on behalf of the
Mortgages Trustee (as trustee for the Beneficiaries) under any
Halifax Insurance Policy; or
(c) invalidate any Halifax Insurance Policy.
15.2 The Servicer shall prepare and submit any claim under the Halifax
Insurance Policies in accordance with the requirements of the relevant
Halifax Insurance Policy and otherwise with the usual procedures
undertaken by a Reasonable, Prudent Mortgage Lender on behalf of the
Mortgages Trustee and the Beneficiaries and shall comply with the other
requirements of the insurer under the relevant Halifax Insurance Policy.
15.3 If the Seller's Policy requires the Servicer to make a claim under the
relevant MIG Policy and the Servicer has failed to make such a claim,
then the Beneficiaries may direct the Mortgages Trustee on their behalf
to direct the Servicer to make a claim or, in default thereof by the
Servicer, the Beneficiaries may direct the Mortgages Trustee to itself
make a claim under such policy and the Servicer shall, within 10 London
Business Days of receiving a written request from the Mortgages Trustee
(as trustee for the Beneficiaries), provide the Mortgages Trustee with
such information as the Mortgages Trustee may require to enable it to
make a claim under the relevant MIG Policy.
16. BUILDINGS POLICIES
16.1 The Servicer shall not knowingly take any action or omit to take any
action which would result in the avoidance or termination of any
applicable Buildings Policy or would reduce the amount payable on any
claim thereunder.
16.2 Upon receipt of notice that any Borrower whose Loan is secured by a
mortgage of or a standard security over a leasehold Property including a
Property in Scotland held under a long lease has failed to make a payment
when due of any sums due under the relevant lease in respect of the
insurance of the property the Servicer may debit that Borrower's account
with the relevant amount which shall then be paid to the landlord.
15
16.3 If the Servicer becomes aware that a Borrower has failed to pay premiums
due under any Buildings Policy, the Servicer shall take such action as
would a Reasonable, Prudent Mortgage Lender with a view to ensuring that
the relevant Property continues to be insured in accordance with the
applicable Mortgage Terms or the Alternative Insurance Recommendations.
17. TITLE DEEDS
17.1 The Servicer shall keep the Title Deeds relating to the Portfolio in safe
custody and shall not without the prior written consent of the Mortgages
Trustee and the Beneficiaries part with possession, custody or control of
them otherwise than to a sub-contractor or delegate appointed pursuant to
CLAUSE 3.2 or to a solicitor, licensed conveyancer, qualified conveyancer
or authorised practitioner, subject to the usual undertaking to hold them
to the order of the Servicer (who in turn will hold them to the order of
the Mortgages Trustee (as trustee for the Beneficiaries) or to H.M. Land
Registry or Registers of Scotland or, upon redemption of the relevant
Loan, to the order of the Borrower.
17.2 The Title Deeds relating to the Portfolio shall be kept in such manner so
that a computer record is maintained of their location and they are
identifiable and retrievable by reference to an account number and pool
identifier and identifiable and distinguishable from the title deeds
relating to other properties and mortgages in respect of which the
Servicer is mortgagee or heritable creditor or servicer. In the event of
receipt by the Servicer of notice that the short-term, unsecured,
unsubordinated and unguaranteed debt of the Servicer is rated less than
A-1 by S&P and P-1 by Xxxxx'x and F1 by Fitch, the Servicer shall use
reasonable endeavours to ensure that the Title Deeds are identified as
distinct from the title deeds of other properties and mortgages and
standard securities which do not form part of the Portfolio.
17.3 The Servicer shall provide access or procure that access is provided to
the Title Deeds and other records relating to the administration of the
Loans and Mortgages in the Portfolio to the Mortgages Trustee, the
Beneficiaries, the Security Trustee and their respective agents at all
reasonable times and upon reasonable notice. The Servicer acknowledges
that the Title Deeds and Customer Files relating to the Portfolio in its
possession, custody or control will be held to the order of the Mortgages
Trustee (as trustee for the Beneficiaries), and that it has, in its
capacity as Servicer, no beneficial interest therein and the Servicer (in
its capacity as such but not in its capacity as a Beneficiary)
irrevocably waives any rights or any Security Interest which it might
have therein or to which it might at any time be entitled.
17.4 The Servicer shall, forthwith on the termination of the appointment of
the Servicer pursuant to CLAUSE 21, deliver the Title Deeds and Customer
Files to or to the order of the Mortgages Trustee or to such person as
the Mortgages Trustee elects as a substitute servicer in accordance with
the terms of this Agreement upon written request by the Mortgages Trustee
made at any time on or after notice of, or on or after, termination of
the appointment of the Servicer pursuant to CLAUSE 21.
17.5 The Servicer undertakes that it will use all reasonable endeavours to
obtain as soon as reasonably possible:
(a) The title number to each Property in respect of which a Mortgage
is registered at H.M. Land Registry to the extent that such title
number does not appear in the Exhibit to the Mortgage Sale
Agreement (or, as the case may be, the Schedule to the relevant
New Portfolio Notice); and
(b) The title number to each Property in respect of which a Mortgage
is registered in the Land Register of Scotland to the extent that
such title number does not appear in the
16
Schedule to the relevant New Portfolio Notice, or in the case of
Scottish Loans, to the order of the Seller, in its capacity as
trustee for the Mortgages Trustee (as trustee for the
Beneficiaries).
The Servicer shall include in the quarterly report to be delivered in
accordance with CLAUSE 12.4 of this Agreement (i) details of such title
numbers relating to the Initial Portfolio as are then known to the
Servicer at the time of such report and (ii) details of such title
numbers relating to any New Loans purchased from the Seller as are then
known to the Seller at the time of such report, together with such other
information relating thereto as the Mortgages Trustee may reasonably
request.
18. DATA PROTECTION
18.1 The Servicer and the Mortgages Trustee each represents that as at the
date hereof it has and hereafter it will maintain all appropriate
registrations, licences, consents and authorities (if any) required under
the Data Protection Xxx 0000 together, with its ancillary legislation
(the DATA PROTECTION ACT) to enable it to perform its respective
obligations under this Agreement. In addition to the foregoing and
notwithstanding any of the other provisions of this Agreement, each of
the Servicer and the Mortgages Trustee hereby agree and covenant as
follows:
(a) that only data that is not "personal data" (as described in the
Data Protection Act) may be transferred by the Servicer to the
Mortgages Trustee or any other entity located in Jersey (unless:
(i) Jersey is determined, on the basis of Article 25(b) of
Directive 95/46/EC, a third country which ensures an adequate
level of protection of "personal data" by the European Commission
or (ii) the Servicer and the Mortgages Trustee have entered into a
data transfer agreement in a form approved by the EC Commission as
meeting the requirements of Article 26(2) of Directive 95/46/EC
for the transfer of personal data to third countries which do not
ensure an adequate level of protection (the STANDARD CONTRACTUAL
CLAUSES) in which case, subject to Clause 18(e), the Servicer may
transfer such personal data to the Mortgages Trustee in Jersey);
(b) that if, at the date at which circumstances enable the Mortgages
Trustee to exercise its right to demand that the Servicer transfer
inter alia personal data to the Mortgages Trustee, (i) Jersey has
been determined, on the basis of Article 25(b) of Directive
95/46/EC a third country which ensures an adequate level of
protection of personal data by the European Commission or (ii) the
Servicer and the Mortgages Trustee have entered into the Standard
Contractual Clauses then, subject to the CLAUSE 18(E), the
Servicer shall transfer the relevant personal data to the
Mortgages Trustee or to its order;
(c) that the Servicer will, if the Mortgages Trustee requires the
Servicer to do so, take all reasonable steps to notify each
Borrower that the Mortgages Trustee is a "data controller" (as
defined in the Data Protection Act) and provide each such Borrower
with such details as the Mortgage Trustee shall reasonably request
including but not limited to the Mortgages Trustee's contact
details for the purposes of the Data Protection Act;
(d) that the Servicer and the Mortgages Trustee will only use any data
in relation to the Loans and the related Borrowers for the
purposes of administering and/or managing the Portfolio, and will
not sell such data to any third party or allow any third party to
use such data other than in compliance with the Data Protection
Act, the conditions
17
stated in this CLAUSE 18 and for the sole purpose of administering
and/or managing the Portfolio;
(e) that the Mortgages Trustee will comply with the provisions of the
Data Protection (Jersey) Law 1987 (as amended) or any law which
supersedes or replaces the Data Protection (Jersey) Law 1987 and
(so long as the provisions of the Data Protection Act do not
conflict with the provisions of the Data Protection (Jersey) Law
1987 (as amended) or any law which supersedes or replaces the Data
Protection (Jersey) Law 1987) with the provisions of the Data
Protection Act;
(f) that the Mortgages Trustee shall maintain a written record of its
reasons for applying the Data Protection Order 2000/185 (as set
forth under the Conditions under paragraph 3 of Part II of
Schedule I of the Data Protection Act).
18.2 The Servicer will use all reasonable endeavours to ensure that, in the
event of the appointment of a sub-contractor in accordance with CLAUSE
3.2 such sub-contractor shall obtain and maintain all appropriate
registrations, licences, consents and authorities required (including,
without limitation, those required under the Data Protection Act), and
comply with obligations equivalent to those imposed on the Servicer in
this CLAUSE 18, to enable it to perform its obligations.
19. COVENANTS OF SERVICER
19.1 The Servicer hereby covenants with and undertakes to each of the
Mortgages Trustee, the Beneficiaries and the Security Trustee that
without prejudice to any of its specific obligations hereunder it will:
(a) administer the Loans and their Related Security as if the same had
not been sold to the Mortgages Trustee but had remained on the
books of the Seller;
(b) provide the Services in such manner and with the same level of
skill, care and diligence as would a Reasonable, Prudent Mortgage
Lender;
(c) comply with any proper directions, orders and instructions which
the Mortgages Trustee or the Beneficiaries 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 Mortgages Trustee
shall prevail;
(d) keep in force all licences, approvals, authorisations and consents
which may be necessary in connection with the performance of the
Services and prepare and submit on a timely basis all necessary
applications and requests for any further approval, authorisation,
consent or licence required in connection with the performance of
the Services and in particular any necessary registrations under
the Data Protection Act;
(e) save as otherwise agreed with the Mortgages Trustee and each of
the Beneficiaries, provide free of charge to the Mortgages Trustee
and the Beneficiaries, office space, facilities, equipment and
staff sufficient to fulfil the obligations of the Mortgages
Trustee and the Beneficiaries under this Agreement;
(f) not knowingly fail to comply with any legal requirements in the
performance of the Services;
(g) make all payments required to be made by it pursuant to this
Agreement on the due date for payment thereof in sterling (or as
otherwise required under the Transaction
18
Documents) in immediately available funds for value on such day
without set-off (including, without limitation, in respect of any
fees owed to it) or counterclaim;
(h) not without the prior written consent of the Security Trustee
amend or terminate any of the Transaction Documents save in
accordance with their terms; and
(i) forthwith upon becoming aware of any event which may reasonably
give rise to an obligation of the Seller to repurchase any Loan
pursuant to the Mortgage Sale Agreement, notify the Mortgages
Trustee and the Beneficiaries in writing of such event.
19.2 The covenants of the Servicer in CLAUSE 19.1 shall remain in force until
this Agreement is terminated but without prejudice to any right or remedy
of the Mortgages Trustee and/or the Seller and/or Funding 1 arising from
breach of any such covenant prior to the date of termination of this
Agreement.
20. SERVICES NON-EXCLUSIVE
Nothing in this Agreement shall prevent the Servicer 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 and the Beneficiaries.
21. TERMINATION
21.1 If any of the following events (SERVICER TERMINATION EVENTS) shall occur:
(a) default is made by the Servicer in the payment on the due date of
any payment due and payable by it under this Agreement and such
default continues unremedied for a period of three London Business
Days after the earlier of the Servicer becoming aware of such
default and receipt by the Servicer of written notice from Funding
1, the Security Trustee and the Mortgages Trustee requiring the
same to be remedied; or
(b) default is made by the Servicer in the performance or observance
of any of its other covenants and obligations under this
Agreement, which in the reasonable opinion of the Security Trustee
is materially prejudicial to the interests of Funding 1 and/or the
Issuers under the Intercompany Loans and/or the interests of the
holders of the Notes from time to time and such default continues
unremedied for a period of 20 London Business Days after becoming
aware of such default provided however that where the relevant
default occurs as a result of a default by any person to whom the
Servicer has sub-contracted or delegated part of its obligations
hereunder, such default shall not constitute a Termination Event
if, within such period of 10 London Business Days of receipt of
such notice from Funding 1 and the Security Trustee, the Servicer
terminates the relevant sub-contracting or delegation arrangements
and takes such steps as Funding 1 and the Security Trustee may in
their absolute discretion specify to remedy such default or to
indemnify the Mortgages Trustee and the Beneficiaries against the
consequences of such default; or
(c) the occurrence of an Insolvency Event in relation to the Servicer;
or
(d) the Board of Funding 1 resolves, after due consideration and
acting reasonably, that the appointment of the Servicer should be
terminated,
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then the Mortgages Trustee and/or Funding 1 and the Security Trustee may
at once or at any time thereafter while such default continues by notice
in writing to the Servicer terminate its appointment as Servicer under
this Agreement with effect from a date (not earlier than the date of the
notice) specified in the notice. Upon termination of the Servicer as
servicer under this Agreement, the Security Trustee shall use its
reasonable endeavours to appoint a substitute servicer that satisfies the
conditions set forth in CLAUSES 21.2(C), (D) and (E).
21.2 The appointment of the Servicer under this Agreement may be terminated
upon the expiry of not less than 12 months' notice of termination given
by the Servicer to the Mortgages Trustee and the Beneficiaries provided
that:
(a) the Mortgages Trustee and the Beneficiaries consent in writing to
such termination;
(b) a substitute servicer shall be appointed, such appointment to be
effective not later than the date of such termination and the
Servicer shall notify the Rating Agencies in writing of the
identity of such substitute servicer;
(c) such substitute servicer has experience of administering mortgages
of and standard securities over residential property in the United
Kingdom and is approved by the Mortgages Trustee and the
Beneficiaries;
(d) such substitute servicer enters into an agreement substantially on
the same terms as the relevant provisions of this Agreement and
the Servicer shall not be released from its obligations under the
relevant provisions of this Agreement until such substitute
servicer has entered into such new agreement; and
(e) the then current ratings (if any) of the Notes are not adversely
affected as a result thereof, unless otherwise agreed by an
Extraordinary Resolution (as defined in the Note Trust Deed) of
the holders of the relevant series and class of Notes.
21.3 On and after termination of the appointment of the Servicer under this
Agreement pursuant to this CLAUSE 21, all authority and power of the
Servicer under this Agreement shall be terminated and be of no further
effect and the Servicer shall not thereafter hold itself out in any way
as the agent of the Mortgages Trustee and/or the Beneficiaries pursuant
to this Agreement.
21.4 Upon termination of the appointment of the Servicer under this Agreement
pursuant to this CLAUSE 21 (but subject to CLAUSE 18(E)), the Servicer
shall:
(a) forthwith deliver (and in the meantime hold on trust for, and to
the order of, the Mortgages Trustee) to the Mortgages Trustee or
as it shall direct the Customer Files, the Title Deeds, all books
of account, papers, records, registers, correspondence and
documents in its possession or under its control relating to the
affairs of or belonging to the Mortgages Trustee (as trustee for
the Beneficiaries) and the Mortgages in the Portfolio and any
other Related Security, (if practicable, on the date of receipt)
any monies then held by the Servicer on behalf of the Mortgages
Trustee and any other assets of the Mortgages Trustee and the
Beneficiaries;
(b) take such further action as the Mortgages Trustee, Funding 1 and
the Security Trustee may reasonably direct at the expense of the
Beneficiaries (including in relation to the appointment of a
substitute servicer) provided that the Mortgages Trustee shall not
be required to take or direct to be taken such further action
unless it has been indemnified to its satisfaction;
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(c) 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;
(d) co-operate and consult with and assist the Mortgages Trustee,
Funding 1, the Security Trustee and their nominees (which shall,
for the avoidance of doubt, include any new servicer appointed by
any of them) 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
or such nominee; and
(e) permit the Mortgages Trustee, Funding 1 and the Security Trustee
to have access at reasonable times to the Halifax Insurance
Policies.
21.5 The Servicer shall deliver to the Mortgages Trustee and the Beneficiaries
as soon as reasonably practicable but in any event within five days of
becoming aware thereof a notice of any Termination Event or any event
which with the giving of notice or lapse of time or certification would
constitute the same. Such notification shall specify which event in
CLAUSE 21 has occurred and was the cause of such Termination Event (or
any event which the giving of notice or lapse of time or certification
would constitute a Termination Event), a description of the details of
such Termination Event, and, if relevant, a reference to the provision in
this Agreement or the other Transaction Documents which the Servicer has
breached.
21.6 Termination of this Agreement or the appointment of the Servicer under
this Agreement shall be without prejudice to the liabilities of the
Mortgages Trustee and the Beneficiaries to the Servicer or vice versa
incurred before the date of such termination. The Servicer 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.
21.7 This Agreement shall terminate at such time as Funding 1 has no further
interest in any of the Loans or the Mortgages which have been comprised
in the Portfolio.
21.8 On termination of the appointment of the Servicer under the provisions of
this CLAUSE 21, the Servicer shall be entitled to receive all fees and
other monies accrued up to the date of termination but shall not be
entitled to any other or further compensation. Such monies so receivable
by the Servicer shall be paid by the Mortgages Trustee on the dates on
which they would otherwise have fallen due hereunder. For the avoidance
of doubt, such termination shall not affect the Servicer's rights to
receive payment of all amounts (if any) due to it from the Mortgages
Trustee other than under this Agreement.
21.9 Prior to termination of this Agreement, the Servicer, the Seller, the
Security Trustee, the Mortgages Trustee and Funding 1 shall co-operate
to obtain the agreement of the Borrowers to a new bank mandate permitting
the Mortgages Trustee to operate the Direct Debiting Scheme.
21.10 Any provision of this Agreement which is stated to continue after
termination of the Agreement shall remain in full force and effect
notwithstanding termination.
22. FURTHER ASSURANCE
22.1 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.
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22.2 Without prejudice to the generality of CLAUSE 21.1, the Mortgages Trustee
and the Beneficiaries shall upon request by the Servicer forthwith give
to the Servicer such further powers of attorney or other written
authorisations, mandates or instruments as are necessary to enable the
Servicer to perform the Services.
22.3 In the event that there is any change in the identity of the Mortgages
Trustee or an additional Mortgages Trustee is appointed, the remaining
Mortgages Trustee and/or the retiring Mortgages Trustee, as the case may
be, shall execute such documents with any other parties to this Agreement
and take such actions as such new Mortgages Trustee may reasonably
require for the purposes of vesting in such new Mortgages Trustee the
rights of the Mortgages Trustee under this Agreement and releasing the
retiring Mortgages Trustee from further obligations thereunder and while
any Note remains outstanding shall give notice thereof to the Rating
Agencies.
22.4 Nothing herein contained shall impose any obligation or liability on the
Mortgages Trustee to assume or perform any of the obligations of the
Servicer hereunder or render it liable for any breach thereof.
23. MISCELLANEOUS
23.1 Subject to CLAUSE 23.2, in the event that the funds available to the
Mortgages Trustee on any Funding 1 Interest Payment Date are not
sufficient to satisfy in full the aggregate amount payable to the
Servicer by the Mortgages Trustee on such Funding 1 Interest Payment Date
then the amount payable to the Servicer on such Funding 1 Interest
Payment Date shall be reduced by the amount of the shortfall and such
shortfall shall (subject always to the provisions of this CLAUSE 23) be
payable on the immediately succeeding Funding 1 Interest Payment Date.
23.2 In the event that:
(a) after redemption in full of the Intercompany Loans; or
(b) after service of an Intercompany Loan Acceleration Notice and
payment of all other prior claims,
the remaining sums available to the Mortgages Trustee or remaining
proceeds of enforcement are insufficient to satisfy in full the
outstanding fees or other claims of the Servicer, such fees shall be
reduced by the amount of the deficiency.
23.3 Each of the Seller and the Servicer agrees that it will not:
(a) set off or purport to set off any amount which the Mortgages
Trustee, Funding 1 or each Issuer is or will become obliged to pay
to it under any of the Transaction Documents against any amount
from time to time standing to the credit of or to be credited to
the Mortgages Trustee GIC Account, the Funding 1 GIC Account, the
Funding 1 Transaction Account or any Issuer Transaction Account or
in any other account prior to transfer to the Mortgages Trustee
GIC Account, the Funding 1 GIC Account, the Funding 1 Transaction
Account or any Issuer Account, as appropriate; 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
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Account, the Funding 1 GIC Account, the Funding 1 Transaction
Account or the relevant Issuer Account.
23.4 The Servicer agrees that for so long as any Notes are outstanding it will
not petition nor commence proceedings for the administration or winding
up of the Mortgages Trustee or Funding 1 or any Issuer nor participate in
any ex parte proceedings with regard thereto.
23.5 In relation to all sums due and payable by the Mortgages Trustee to the
Servicer, the Servicer agrees that it shall have recourse only to sums
paid to or received by (or on behalf of) the Mortgages Trustee pursuant
to the provisions of the Mortgage Sale Agreement, the other Transaction
Documents and in relation to the Mortgages.
23.6 For the avoidance of doubt, neither Beneficiary shall be liable to pay
any amounts due under CLAUSES 11 and 13 without prejudice to the
obligations of the Mortgages Trustee in respect of such amounts.
23.7 Notwithstanding any other provisions of this Agreement, all obligations
to, and rights of, Funding 1 under or in connection with this Agreement
(other than its obligations under CLAUSE 24) shall automatically
terminate upon the discharge in full of all amounts owing by it under any
Intercompany Loan Agreement, provided that this shall be without
prejudice to any claims in respect of such obligations and rights arising
on or prior to such date.
24. CONFIDENTIALITY
During the continuance of this Agreement or after its termination, each
of the Mortgages Trustee and the Beneficiaries 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 24 shall not apply:
(a) to any information already known to the Mortgages Trustee or the
Beneficiaries otherwise than as a result of entering into any of
the Transaction Documents;
(b) to any information subsequently received by the Mortgages Trustee
or the Beneficiaries 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 Mortgages Trustee or the
Beneficiaries;
(d) to any extent that the Mortgages Trustee or the Beneficiaries is
required to disclose the same pursuant to any law or order of any
court or pursuant to any direction, request or requirement
(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 Mortgages Trustee or the Beneficiaries
needs to disclose the same for determining the existence of, or
declaring, an Intercompany Loan Event of Default or a 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
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(f) in relation to any information disclosed to the professional
advisers of the Mortgages Trustee or the Beneficiaries or (in
connection with the review of current ratings of the Notes or
with a prospective rating of any debt to be issued by an Issuer)
to any credit rating agency or any prospective new Servicer or
Mortgages Trustee.
25. 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 5.00 p.m. on a London
Business Day or on the next London Business Day if delivered thereafter
or (in the case of first class post) when it would be received in the
ordinary course of the post and shall be sent:
(a) in the case of the Servicer, to Halifax plc, Xxxxxxx Xxxx,
Xxxxxxx, Xxxx Xxxxxxxxx XX0 0XX (facsimile number
x00 (0) 0000 000000) for the attention of Mortgage Securitisation
Manager 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 Capital Markets and Securitisation;
(b) in the case of the Mortgages Trustee, to Permanent Mortgages
Trustee Limited, 00 Xxxxxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX
(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 x00 (000) 0000 0000) for
the attention of Head of Capital Markets and Securitisation;
(c) in the case of the Seller, to Halifax plc, Xxxxxxx Xxxx, Xxxxxxx,
Xxxx Xxxxxxxxx XX0 0XX (facsimile number x00 (0) 0000 000000) for
the attention Mortgage Securitisation Manager 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 Capital Markets and Securitisation;
(d) in the case of Funding 1, to Permanent Funding (No. 1) Limited,
Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxx, Xxxxxx XX0X 0XX (facsimile number
x00 (000) 0000 0000) for the attention of the Secretary with a
copy to HBOS Treasury Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx
XX0X 0XX (facsimile number x00 (000) 0000 0000) for the attention
of Head of Capital Markets and Securitisation;
(e) in the case of the Security Trustee, to the Bank of New York, 00xx
Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX (facsimile number + 44
(00) 0000 0000 or + 00 (00) 0000 0000, for the attention of Global
Structured Finance - Corporate Trust;
(f) 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 25. All notices
served under this Agreement shall be simultaneously copied to the
Security Trustee by the person serving the same.
26. VARIATION AND WAIVER
No variation or waiver of this Agreement shall be effective unless it is
in writing and signed by (or by some person duly authorised by) each of
the parties. 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. No
variation or waiver of
24
this Agreement shall be made if the same would adversely affect the then
current ratings of any of the Notes.
27. 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.
28. ASSIGNMENT
28.1 The Mortgages Trustee may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of
each of the Beneficiaries.
28.2 The Servicer may not assign or transfer any of its rights and obligations
under this Agreement without the prior written consent of the Mortgages
Trustee (as trustee for the Beneficiaries) and each of the Beneficiaries.
28.3 The Servicer acknowledges that Funding 1 has assigned its rights under
this Agreement to the Security Trustee pursuant to the Funding 1 Deed of
Charge and acknowledges that pursuant to the terms of the Funding 1 Deed
of Charge, Funding 1 has, inter alios, authorised the Security Trustee,
prior to the Funding 1 Security becoming enforceable, to exercise, or
refrain from exercising, all rights, powers, authorities, discretions and
remedies under or in respect of the Transaction Documents, including this
Agreement, in such manner as in its absolute discretion it shall think
fit.
29. CHANGE OF SECURITY TRUSTEE
29.1 If there is any change in the identity of the Security Trustee in
accordance with the Funding 1 Deed of Charge, the Servicer, the Seller,
Funding 1 and the Mortgages Trustee shall execute such documents and take
such action as the successor Security Trustee and the outgoing Security
Trustee may reasonably require for the purpose of vesting in the
successor Security Trustee the rights and obligations of the outgoing
Security Trustee under this Agreement and releasing the outgoing Security
Trustee from its future obligations under this Agreement.
29.2 It is hereby acknowledged and agreed that by its execution of this
Agreement the Security Trustee shall not assume or have any of the
obligations or liabilities of the Servicer, the Seller, Funding 1 or the
Mortgages Trustee under this Agreement.
30. AMENDMENTS
Subject to CLAUSE 25 of the Funding 1 Deed of Charge (Supplemental
Provisions Regarding the Security Trustee), any amendments to this
Agreement will be made only with the prior written consent of each party
to this Agreement.
31. 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.
32. COUNTERPARTS AND SEVERABILITY
32.1 This Agreement may be executed in any number of counterparts (manually or
by facsimile) and by different parties hereto in separate counterparts,
each of which when so executed shall
25
be deemed to be an original and all of which when taken together shall
constitute one and the same instrument.
32.2 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.
33. GOVERNING LAW AND JURISDICTION
33.1 This Agreement is governed by the laws of England (provided that any
terms of this Agreement which are particular to Scots law shall be
construed in accordance with the laws of Scotland).
33.2 Each party to this Agreement hereby irrevocably submits to the non-
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.
34. PROCESS AGENT
The Mortgages Trustee irrevocably and unconditionally appoints Structured
Finance Management Limited of Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxx, Xxxxxx
XX0X 0XX for the time being as its agent for service of process in
England in respect of any proceedings in respect of this Agreement and
undertakes that in the event of Structured Finance Management Limited
ceasing so to act it will appoint another person with a registered office
in London as its agent for service of process.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed as a
deed the day and year first before written.
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SCHEDULE 1
THE SERVICES
In addition to the Services set out in the body of the Servicing Agreement, the
Servicer shall:
(a) keep records and books of account for the Mortgages Trustee in relation
to the Loans and their Related Security comprised in the Portfolio;
(b) keep records for all taxation purposes and Value Added Tax;
(c) notify relevant Borrowers of any change in their Monthly Payments;
(d) assist the auditors of the Mortgages Trustee and provide information to
them upon reasonable request;
(e) provide a redemption statement upon the request of a Borrower or the
Borrower's solicitor, licensed conveyancer or qualified conveyancer;
(f) notify relevant Borrowers of any other matter or thing which the
applicable Mortgage Conditions or Offer Conditions require them to be
notified of in the manner and at the time required by the relevant
Mortgage Terms;
(g) subject to the provisions of this Agreement (including without limitation
CLAUSE 5.2) take all reasonable steps to recover all sums due to the
Mortgages Trustee including without limitation by the institution of
proceedings and/or the enforcement of any Loan comprised in the Portfolio
or any Related Security;
(h) take all other action and do all other things which it would be
reasonable to expect a Reasonable, Prudent Mortgage Lender to do in
administering its loans and their related security; and
(i) act as collection agent for the Mortgages Trustee under the Direct
Debiting Scheme in accordance with the provisions of this Agreement.
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SCHEDULE 2
FORM OF QUARTERLY POOL CUT
FIELD DESCRIPTION
Year/Month Processing year and month in YYYYMM format
Account Number Unique Mortgage Account Identifier
Original Advance
Current Loan Includes Capital, Interest, Arrears and Unpaid Charges
balance
Latest Property Most recent valuation. It will be equal to original valuation if no further valuation was done
Valuation
Completion Date The date the advance was completed
Outstanding The number of monthly periods remaining on the Loan
Monthly Periods
Method of Code to signify types of Loans: e.g. Endowment, Interest Only, Repayment, Pension, Investment Linked based on
Repayment worst case reporting
First Income First applicant's primary income
Second Income Second applicant's primary income
Post Code Property postcode
MIG Cover Amount Amount of MIG Policy cover
Current Arrears Includes unpaid interest, unpaid capital, unpaid charges
Balance
Arrears Multiplier Arrears at previous month end divided by current month payment due
(Current)
Arrears Multiplier Arrears at previous month end divided by current month payment due
(1 to 2 months)
Arrears Multiplier Arrears at previous month end divided by payment due for that month
(2 to 3 months)
Arrears Multiplier As above, but for 3 months prior to current month
(3 to 6 months)
Arrears Multiplier As above, but for 6 months prior to current month
(6 to 12 months)
Arrears Multiplier As above, but for 1 year prior to current month
(1 to 2 years)
Arrears Multiplier As above, but for 2 years prior to current month
(2 years plus)
Property type Terraced, semi-detached, detached, other (flats, maisonettes, etc.) or unknown
Loan Use House purchase or remortgage
Property Use Owner occupied, rental, etc.
Product code(s) Code identifier for the product(s)
MAR Monthly payment amount
Arrangement term Where an arrangement exists for the primary account the period of the arrangement from the start of the
arrangement
Arrangement amount Amount of the arrangement made
Arrangement type Code for the arrangement type
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SIGNATORIES
SERVICER
EXECUTED as a DEED by )
HALIFAX PLC )
acting by its attorney )
in the presence of: )
Witness's signature:
Name:
Address:
MORTGAGES TRUSTEE
EXECUTED as a DEED by )
PERMANENT MORTGAGES )
TRUSTEE LIMITED acting by two )
directors/a director and the secretary )
Director
Director/Secretary
SELLER
EXECUTED as a DEED by )
HALIFAX PLC )
acting by its attorney )
in the presence of )
Witness's signature:
Name:
Address:
FUNDING 1
EXECUTED as a DEED by )
PERMANENT FUNDING (NO. 1) )
LIMITED acting by two directors/ )
a director and the secretary )
Director
Director/Secretary
29
SECURITY TRUSTEE
EXECUTED as a DEED by an authorised )
signatory for and on behalf of )
THE BANK OF NEW YORK )
Authorised signatory
30
